A number of legislators have signed on as primary sponsors and co-sponsors of a bill tagged as "New Jersey Economic Opportunity Act II of 2013," currently pending in both legislative houses as A4501 and S3030. This legislation would amend and expand the legislation signed into law by New Jersey Governor Chris Christie in September known as the New Jersey Economic Opportunity Act of 2013 (the Act). A key hurdle was passed recently with the Senate Economic Growth Committee reporting out the bill favorably after a second reading with a referral to the Senate Budget and Appropriations Committee on Thursday, November 14th.
There are five primary areas that the bill seeks to address as summarized by the statement of the Senate Economic Growth Committee. The legislation, as reported by the Committee, seeks to modify and correct some provisions of the Act and implement "additional economic development initiatives." First, the bill will extend the $50 million cap on appeal bonds. The essential purpose of an appeal bond is to allow a party challenging a trial court's judgment to appeal a judgment but only after posting an appeal (supersedeas) bond but, at the same time, protect the party prevailing at trial. In 2003, a $50 million cap on appeal bonds had been imposed on certain tobacco companies. S3030 would allow a court to reduce an appeal bond to an amount lower than the judgment amount.
Secondly, the legislation would grant a developer credit against its corporate business tax or gross income tax liability for capital investments made to a formerly licensed health care facility. A developer seeking to repurpose such a facility would apply to and seek approval from the New Jersey Economic Development Authority for an allocation of credits. If allowed, a tax credit of 50 percent of the developer's capital investment could be taken over a 10 year period. As reported out by the Committee, the tax credit would apply to a former hospital that had been repurposed as a non-acute health care and health support services center.
Thirdly, the bill seeks to address an apparent oversight in the Act which did not authorize an exception to the 20 percent affordable housing set aside. This occurred when the Act merged the qualified residential project portion of the Urban Transit Hub Tax Credit Act into the Economic Redevelopment and Growth Grant Program. S3030 will extend the exemption to such projects in those situations where the municipality in which the project is located has satisfied its affordable housing obligations.
Fourthly, this legislation proposes to amend the ERGG Program to allow an additional $200 million of tax credits for certain types of housing; however, the legislation would direct the EDA to give priority to qualified projects located within 10 of the 21 counties in New Jersey. An existing resident that would be displaced as a result of a qualified residential project would have the limited right of first refusal to purchase or lease a unit that is constructed as a result of the grant of the tax credit.
Lastly, the legislation aims at increasing the attractiveness of New Jersey as a film production venue. The bill would expand the existing tax credit formula from $10 million to $50 million for film production tax credits and $5 million to $10 million for digital media production tax credits. Similarly, the percentage of the tax credits would be increased from 20 percent to 22 percent but only if purchases of goods and services are made from businesses within or residents of an urban enterprise zone. If passed, the law's sunset would be extended from 2015 to 2020.
Interestingly, the sponsors of this legislation have not appeared to gain much support. Noticeably missing to date is the usual string of legislators signing onto the bill. While recently reported out of committee favorably, we learned that the bill has been withdrawn from consideration. It will be introduced in the new legislative session next year as two bills to ease passage of the noncontroversial provisions while the sponsor drums up support for the more nettlesome provisions.
Originally published by In the Zone.
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