TRENTON – The state Economic Development Authority approved changes Tuesday to the Urban Transit Hub tax credit program to make it more effective.
The amendments were suggested following a review of the program the EDA conducts periodically.
Under the UTHTC, which was approved in 2008, commercial projects are eligible to receive a 100 percent tax credit toward their capital costs. For residential projects, the UTHTC could be as much as 35 percent of the costs, according to EDA.
In addition to tax credits for both commercial and residential projects, UTHTC also offers $100 million in credits for offshore wind projects and $200 million for the new Grow New Jersey program that was the brainchild of Sen. Ray Lesniak.
The program is capped at $1.5 billion, with some $250 million capped for residential projects only.
So far, $746.5 million in commercial projects have been approved, or are in the process for being approved for the credit, and $219.6 million for residential projects, leaving $30.4 million remaining for that component alone.
Between what’s already been approved for the commercial and residential projects, as well as the $300 million in offshore wind and GROW New Jersey allocations, there remains $203.5 million in uncommitted tax credits for commercial projects and some $30.4 million for residential projects.
The question now is how best to use those funds before the programs “sunset” by January 2014.
That’s where the following changes to the program were suggested. They include:
1.) Continue to accept applications for commercial projects through the end of the year to use up the commercial tax credits before they expire by January 2013;
2.) Keep the tax credit cap for residential projects at $250 million and not accept any new applications for residential projects seeking the tax credit;
3.) Utilize the $30.5 million remaining in the residential component of tax-credits for projects already under construction, and increase the credit from the originally approved 20 percent to 35 percent.
4.) Use the balance of funds to reallocate toward Grow and residential hub credits.
Caren Franzini, CEO of EDA, said credits for the projects are not given until it’s been completed.