A5579

An Act expanding the Neighborhood Revitalization Tax Credit Program and amending P.L.2001, c.415.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 2 of P.L.2001, c.415 (C.52:27D-491) is amended to read as follows:

2. As used in P.L.2001, c.415 (C.52:27D-490 et seq.):

"Assistance" means the contribution of moneys to aid in the provision of neighborhood preservation and revitalization services or community services.

"Business entity" means any business firm or individual which is authorized to conduct or operate a trade or business in the State and is subject to taxes on business related income.

"Certificate for neighborhood revitalization State tax credits" means the certificate in the form prescribed by the Treasurer and issued by the commissioner to a business entity that specifies the dollar amount of neighborhood preservation and revitalization State tax credits that business entity may take as an annual credit against certain State taxes pursuant to P.L.2001, c.415 (C.52:27D-490 et seq.).

"Commissioner" means the Commissioner of Community Affairs.

"Department" means the Department of Community Affairs.

"Eligible neighborhood" means: a. a contiguous area located in one or more municipalities that, at the time of the application to the department for approval of a neighborhood preservation and revitalization plan, shall be designated by the commissioner based on factors including, but not limited to, population change, non-seasonal housing vacancy rates, total household and child recipients of the Temporary Assistance for Needy Families or a successor program, poverty levels, unemployment rates, high school completion rates, median household income, property tax rates, and equalized property valuation per capita; [or] b. an area that (1) is adjacent to a neighborhood that fulfills the requirements of subsection a. of this definition, and has received approval of a neighborhood preservation and revitalization plan pursuant to section 5 of P.L.2001, c.415 (C.52:27D-494); (2) increases the area of the adjacent eligible neighborhood by no more than 25 percent; and (3) shares similar characteristics as determined by the commissioner or the commissioner's designee; c. an area located within a qualified urban aid municipality, as determined pursuant to paragraph (1) of subsection c. of section 7 of P.L.2024, c.2 (C.52:27D-304.3); or d. an area located within a municipality that demonstrates economic distress, housing shortages, or community development needs, as determined by the commissioner.

"Housing and economic development activities" means those activities carried out in furtherance of a neighborhood preservation and revitalization plan in an eligible neighborhood approved pursuant to P.L.2001, c.415 (C.52:27D-490 et seq.), to improve the housing and economic conditions of the neighborhood; and shall include, without limitation, measures to foster the rehabilitation and construction of housing affordable to low and moderate income households within the neighborhood, including planning, design, rehabilitation, construction, and management of low and moderate income housing, home buyer counseling, and related activities needed to effectuate the rehabilitation and construction of housing affordable to low and moderate income households; measures to increase business activity within the neighborhood, including the rehabilitation and construction of commercial facilities and the provision of assistance to small business entities; and measures to increase the income and labor force participation of neighborhood residents, including provision of education, training, child care, broadband telecommunications expansion, and transportation assistance to enable low income neighborhood residents to obtain or retain employment.

"Low income household" means a household whose gross household income is less than 50 percent of the median gross household income for the region in which the neighborhood is located for households of similar size as determined by the department.

"Moderate income household" means a household whose gross household income is greater than or equal to 50 percent but less than 80 percent of the median gross household income of the region in which the neighborhood is located for households of similar size as determined by the department.

"Neighborhood preservation and revitalization activities" means housing and economic development activities and other neighborhood preservation and revitalization activities.

"Neighborhood Revitalization Plan" means a plan for the preservation or revitalization of an eligible neighborhood.

"Nonprofit organization" means a private nonprofit corporation that has been determined by the Internal Revenue Service of the United States Department of the Treasury to be exempt from income taxation under 26 U.S.C. s.501(c)(3).

"Other Neighborhood Revitalization Activities" means those activities, other than housing and economic development activities, carried out in furtherance of a State-approved neighborhood preservation and revitalization plan in a qualified low and moderate income neighborhood, and may include, without limitation, improvements to infrastructure, street scape, public open space, and transportation systems; provision of social and community services, health care, crime prevention, recreation activities, community and environmental health services; and community outreach and organizing activities.

"Qualified nonprofit organization" means a nonprofit organization that has demonstrated a commitment to the neighborhood for which it is submitting a plan or project, as reflected in its past activities or proposed activities in a preservation and revitalization plan.

"Qualified project" means one or more housing and economic development activities and which may also include one or more other neighborhood revitalization activities to be carried out in accordance with a neighborhood revitalization plan as approved by the commissioner with funds provided by a business entity eligible to receive a certificate for neighborhood revitalization State tax credits.

"Similar characteristics" means comparable socioeconomic qualities as determined by the commissioner or his designee, using the smallest Census unit for which data are available.

(cf: P.L.2019, c.144, s.1)

2. Section 3 of P.L.2001, c.415 (C.52:27D-492) is amended to read as follows:

3. A business entity shall be eligible for a certificate for neighborhood revitalization State tax credits if it has provided funding for a qualified project that has been approved in accordance with sections 4 and 5 of P.L.2001, c.415 (C.52:27D-493 and C.52:27D-494).

a. Credits may be granted in an amount up to 100 percent of the approved assistance provided to a nonprofit organization to implement a qualified neighborhood preservation and revitalization project.

b. The credit may be applied by the business entity receiving the certificate as credit against tax imposed on business related income including, but not limited to, business income subject to the provisions of the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et al.), "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., the tax imposed on marine insurance companies pursuant to R.S.54:16-1 et seq., the tax imposed on insurers generally, pursuant to P.L.1945, c.132 (C.54:18A-1 et seq.), the sewer and water utility excise tax imposed pursuant to section 6 of P.L.1940, c.5 (C.54:30A-54) and the petroleum products gross receipts tax imposed pursuant to section 3 of P.L.1990, c.42 (C.54:15B-3).

For a taxpayer applying credit to liability due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., the credit allowed pursuant to this section shall only be applied to the amount of gross income tax liability for the taxable year, which as a percentage of gross income tax liability, is equal to the percentage of the taxpayer's gross income that is attributable to the taxpayer's business entity through which the taxpayer provided the funding for the qualified project. For purposes of determining the amount of gross income tax liability to which a credit allowed pursuant to this section may be applied, gross income shall be calculated without the application of exclusions or deductions.

c. The credit allowed to a business entity under this section may not exceed for any taxable year $1,000,000 or the total amount of tax otherwise payable by the business entity for the taxable year and, in addition, shall not exceed limitations placed on the amounts of credits or carryforward credits allowed, if any, under the relevant statute as enumerated in subsection b. of this section concerning the tax for which a credit is being claimed.

d. Credit shall not be allowed for activities for which the business entity is receiving credit under any other provision against any tax on business related income including, but not limited to, the corporation business tax, New Jersey gross income tax, corporate income tax, insurance premiums tax, petroleum products gross receipts tax, public utilities franchise tax, public utilities gross receipts tax, public utility excise tax, railroad franchise tax, and the saving institution tax.

e. The tax credit shall be awarded only for assistance provided within the same year in which the commissioner issued the certificate, or if the commissioner approved assistance for more than one year, within the year in which payment was scheduled and made. The provisions of this subsection may be waived for good cause shown.

f. The total tax credits certified for all qualified projects proposed in a fiscal year shall not exceed [$15,000,000] $65,000,000,000.

g. In certifying tax credits pursuant to P.L.2001, c.415 (C.52:27D-490 et seq.), the department shall give equal consideration to qualified projects located in the north, central, and southern geographical regions of the State.

(cf: P.L.2019, c.144, s.2)

3. This act shall take effect immediately and shall apply to tax credits certified for State fiscal years beginning on or after the effective date of this act.

STATEMENT

This bill expands the Neighborhood Revitalization Tax Credit program to include in the definition of "eligible neighborhood" areas located within qualified urban aid municipalities and municipalities that demonstrate economic distress, housing shortages, or community development needs, as determined by the Commissioner of Community Affairs. The bill also adds "broadband telecommunications expansion" to the definition of "housing and economic development activities."

The bill increases the annual cap on tax credits certified pursuant to the program from $15 million to $65 million and requires, in certifying tax credits, the Department of Community Affairs to give equal consideration to qualified projects located in the north, central, and southern geographical regions of the State.