New Jersey businesses that choose to stay in the state and expand would be eligible for tax credits under an amended version of the NJ Grow program that passed out of the Assembly Commerce and Economic Development Committee today.
An identical bill was unanmiously passed by the senate in September.
The program, paid for out of the existing Urban Transit Hub Tax Credit Program, would offer a tax credit for a business that creates at least 100 full time jobs and makes capital investments of $20 million or more.
The program, known as the Grow New Jersey Assistance Program, would require “green” standards for any building built under the program.
Areas eligible for the plan include both urban and suburban zones, former military bases, vacant commercial office properties having over 400,000 square feet for at least one year and areas designated for development in the New Jersey Meadowlands, Highlands, and Pinelands, as specified in the acts establishing these areas.
Under the program, an eligible business would receive a base tax credit of $5,000 per job, per year, for 10 years with no distinction between retained or new jobs. The tax credit term of 10 years includes an annual compliance review before the credit is issued.
Caren Franzini, chief executive officer of the state Economic Development Agency, testified in favor of the bill, telling the committee business will be required to show a net benefit to the state- the state must receive more of a tax benefit than goes out – before becoming eligible for the credit. To be eligible, the CEO of a company applying for the grant would be required to certify that the incentive program was instrumental in the company’s decision to expand.
Sen. Ray Lesniak, the sponsor of the bill in the upper chamber, testified that despite criticisms of tax credits, they are necessary to lure and retain businesses.
“These credits only take place if there is an investment in the state and jobs are created. Without these credits because New Jersey is a high cost state and we do have impediments to development that have not been lifted yet in terms of our governmental structure the benefits of New Jersey’s location that have been so beneficial to us in the past no longer is that great of an advantage. Jobs can locate anywhere,” Lesniak said. “They can locate anywhere in the country and they can locate anywhere in the world. That’s why we still need tax credits because we still have an awful lot to offer.”
Three amendments were passed along with the bill, including one that would cap the value of the eligible expansion at $40 million and another that would extend the eligible area around a mass transit hub from a half mile to a mile.
Representatives of the State Chamber of Commerce and the New Jersey Business and Industry Association testified in support of the bill.