A4426

An Act providing for grants and a partial sales and use tax exemption for certain businesses impacted by certain public highway projects, supplementing Titles 34 and 54 of the Revised Statutes, and making an appropriation.

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

1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

"Applicant" means a retail business establishment seeking a grant pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).

"Authority" means the New Jersey Economic Development Authority, established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4).

"Business day" means a calendar day during which a retail business establishment incurs business expenses.

"Business expenses" means the costs incurred by a retail business establishment that are necessary for the day-to-day operation of the retail business establishment. “Business expenses” may include, during a relief period, lost revenues, including, but not limited to, profit loss due to the public highway project.

"Impacted construction zone" means any area immediately surrounding a public highway project, within which area the occurrence of the public highway project impedes or blocks the normal and reasonable flow of traffic or otherwise restricts access to business establishments located within the area.

"Public highway project" means any infrastructure project that involves the construction, improvement, or maintenance of a State, county, or municipal highway, road, bridge, or street, including, but not limited to, the repair or reconstruction of any highway, road, bridge, or street that has suffered serious damage as a result of a natural disaster or catastrophic failure from any external cause.

"Relief period" means the period of time between the date on which a public highway project commences and the date on which the project concludes.

"Retail business establishment" means a small business that maintains a fixed permanent location where goods are exhibited or services are offered, on-site or off-site, on an appointment or walk-in basis. For the purposes of this definition, offered services may include, but shall not be limited to, charter boat services.

"Small business" means a business that has no more than 50 full-time employees, is independently owned and operated, has its principal place of business in the State of New Jersey, and is not delinquent or deficient with respect to the payment of any State tax.

2. a. The authority shall establish and administer a grant program to provide financial assistance to reimburse the costs of increased business expenses incurred during a relief period as a direct result of a public highway project by a retail business establishment that operates within an impacted construction zone.

b. An applicant seeking a grant pursuant to this section shall submit an application to the authority in such form and manner as the authority may require. In addition to any other information or documentation that the authority shall deem necessary, an application for a grant pursuant to this section shall include:

(1) evidence that the applicant is a retail business establishment that meets the criteria set forth in subsection a. of this section;

(2) documentation of the business expenses regularly incurred by the applicant prior to the relief period, which documentation shall demonstrate the business expenses incurred during a period containing an equal number of business days to the period for which a grant is sought pursuant to this section; and

(3) documentation of the increased business expenses incurred by the applicant during the relief period as a direct result of the public highway project, which documentation shall include the number and dates of business days for which a grant is sought pursuant to this section.

c. The authority shall review and approve applications for the grant program on a rolling basis, subject to the availability of funds for the program. Upon the approval of an application, the authority shall issue a grant to the approved applicant in an amount equal to the difference between the increased business expenses incurred by the applicant during the relief period as a direct result of the public highway project, and the business expenses regularly incurred by an applicant prior to the relief period, as demonstrated to the authority’s satisfaction in an application submitted pursuant to subsection b. of this section. The amounts used in the calculation of a grant award pursuant to this section shall represent the business expenses for an equal number of business days prior to and during the relief period.

d. To assist the authority in the review of applications under this section, upon the commencement or completion of a public highway project, the Commissioner of Transportation shall provide written notice to the authority attesting to the commencement or completion of the project, as applicable. Within 30 days following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the commissioner shall provide written notice to the authority attesting to each ongoing public highway project within the State.

3. a. A seller that operates a retail business establishment within an impacted municipality shall be entitled to an exemption to the extent of 50 percent of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), provided that the seller is approved by the director pursuant to subsection b. of this section.

b. (1) Before or after the commencement of a public highway project, a seller may apply to the director for the exemption authorized under this section. The application shall be submitted in a form and manner prescribed by the director. The director shall require the seller to submit such documentation as the director deems necessary to verify that the seller operates a retail business establishment within an impacted municipality.

(2) If the director deems that the seller meets the conditions set forth in subsection a. of this section, the director shall issue a written determination to the seller, which determination shall indicate the retail business establishments to which the exemption shall apply and the relief period during which the exemption shall apply.

c. (1) Upon the commencement or completion of a public highway project, the Commissioner of Transportation shall provide written notice to the director attesting to the commencement or completion of the project, as applicable. Within 30 days following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the commissioner shall provide written notice to the director attesting to each ongoing public highway project within the State.

(2) Within 30 days of receiving the written notice from the commissioner concerning the completion of a public highway project, the director shall provide written notice to each seller for which an exemption has been authorized related to the public highway project, which notice shall indicate that the seller's exemption under this section is terminated, as of the date of receipt of the written notice.

d. As used in this section:

"Commissioner" means the Commissioner of Transportation.

"Director" means the Director of the Division of Taxation in the Department of the Treasury.

"Impacted municipality" means any municipality in which an ongoing public highway project is located.

"Relief period" means the period of time between the date on which a public highway project commences and the date on which the project concludes.

4. a. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the authority may adopt, immediately, upon filing with the Office of Administrative Law, such rules and regulations as the authority deems necessary to implement the provisions of sections 1 and 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), which regulations shall be effective for a period not to exceed 180 days from the date of the filing. Thereafter, the authority shall amend, adopt, or readopt any regulations issued pursuant to this subsection in accordance with the requirements of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

b. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the Director of the Division of Taxation in the Department of the Treasury shall adopt, immediately, upon filing with the Office of Administrative Law, such rules and regulations as the director deems necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill). Thereafter, the director shall amend, adopt, or readopt any regulations issued pursuant to this subsection in accordance with the requirements of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

5. There is appropriated from the General Fund to the New Jersey Economic Development Authority the sum of $1,000,000 to support the costs of administering the grant program established pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).

6. This act shall take effect immediately.

STATEMENT

This bill requires the New Jersey Economic Development Authority (EDA) to establish and administer a grant program to provide financial assistance to reimburse retail business establishments for the cost of any increased business expenses incurred due to a public highway project. The bill also provides for a 50 percent exemption to the sales and use tax in impacted municipalities.

Definitions

The bill defines “business expenses” as the costs incurred by a retail business establishment that are necessary for the day-to-day operation of the retail business establishment. Business expenses may include, during a relief period, lost revenues, including, but not limited to, profit loss due to the public highway project.

The bill defines "retail business establishment" as a small business that maintains a fixed permanent location where goods are exhibited or services are offered, on-site or off-site, on an appointment or walk-in basis. A retail business establishment's offered services may include, but are not limited to, charter boat services.

The bill defines "impacted construction zone" as any area immediately surrounding a public highway project, within which area the occurrence of the public highway project impedes or blocks the normal and reasonable flow of traffic or otherwise restricts access to business establishments located within the area.

The bill defines "relief period" to mean the period of time between the date on which a public highway project commences and the date on which the project concludes.

"Public highway project" means any infrastructure project that involves the construction, improvement, or maintenance of a State, county, or municipal highway, road, bridge or street, including, but not limited to, the repair or reconstruction of any highway, road, bridge, or street that has suffered serious damage as a result of a natural disaster or catastrophic failure from any external cause.

The bill defines "impacted municipality" as any municipality in which an ongoing public highway project is located.

Grant Program

Under the bill, the grant program is intended to reimburse a retail business establishment operating within an impacted construction zone for any increase in business expenses incurred during a relief period.

The bill requires an application for a grant to include: (1) evidence that an applicant is a retail business establishment that is qualified under the grant program; (2) documentation of the business expenses regularly incurred by the applicant prior to the relief period; (3) documentation of the increased business expenses incurred by the applicant during the relief period as a direct result of the public highway project; and (4) any other information or documentation the EDA deems necessary. An applicant’s documentation of business expenses prior to and during the relief period, respectively, is required to demonstrate the business expenses incurred by the applicant for an equal number of business days.

The bill directs the EDA to review and approve applications for the grant program on a rolling basis, subject to the availability of funds for the program. Upon the approval of an application, the grant issued to an approved applicant is required to be in an amount equal to the difference between: (1) the increased business expenses incurred by the applicant during the relief period as a direct result of the public highway project; and (2) the business expenses regularly incurred by the applicant prior to the relief period. These amounts are to represent the business expenses for an equal number of days during which an applicant incurred business expenses.

To assist the authority in the review of applications under the program, the bill requires the Commissioner of Transportation to notify the EDA of the commencement or completion of public highway projects. The Commissioner of Transportation is also required to notify the EDA of each ongoing public highway project within the State within 30 days after the bill’s effective date.

The bill appropriates $1 million from the General Fund to the EDA to support the costs of administering the grant program.

Sales and Use Tax Reduction

Under the bill, a seller is entitled to an exemption to the extent of 50 percent of the tax imposed under the Sales and Use Tax Act, upon approval by the Director of the Division of Taxation (director), if the seller operates a retail business establishment within an impacted municipality during a relief period. To be entitled to the exemption, a seller is required to submit an application to the director to verify that the retail business establishment operates within an impacted municipality.

Upon the commencement or completion of a public highway project, the bill requires the Commissioner of Transportation (commissioner) to provide written notice to the director attesting to the commencement or completion of the project, as applicable. Within 30 days following the bill's effective date, the commissioner is required to provide written notice to the director attesting to each ongoing public highway project within the State. Within 30 days of receiving the written notice from the commissioner concerning the completion of a public highway project, the bill requires the director to provide written notice to each seller for which such an exemption has been authorized indicating that the seller's exemption is terminated, as of the date of receipt of the written notice.