ASSEMBLY DEMOCRATIC ECONOMIC STIMULUS BILL PASSES ASSEMBLY

ECONOMIC STIMULUS BILL PASSES ASSEMBLY
Would Place Moratorium on Nonresidential Development Fee,
Expand Transit Hub Tax Credit, Fuel Redevelopment,
Allow Colleges to Partner with Private Firms To Build Infrastructure

(TRENTON) - The General Assembly today passed landmark legislation that would take a broad approach to jumpstarting local economic development projects and creating new jobs by maximizing New Jersey's federal stimulus investments and promoting growth and development efforts vital to repositioning the state for long-term prosperity.

The measure (A-4048) is sponsored by Assembly Speaker Joseph J. Roberts Jr. and Assemblymen Albert Coutinho, Patrick Diegnan, John Wisniewski and Upendra Chivukula.

The bill passed 49-27 with two abstentions. Following anticipated passage in the Senate later today, the measure would head to Governor Jon S. Corzine for his signature enacting it into law.

"Local officials and businesses need more tools and greater flexibility to work together in planning and building the infrastructure projects that will bring new jobs and economic opportunities to New Jersey," said Roberts (D-Camden). "This multi-faceted effort sends the clear message that New Jersey is open for business and looking to the future."

The measure would place a temporary moratorium on the 2.5 percent nonresidential development fee established under state law signed last year and eliminate the affordable housing obligation associated with any project subject to the moratorium.

"We cannot allow towns to back away from their responsibilities to provide housing choice and opportunity to all working families, but this move recognizes the vital need to move projects along and get shovels in the ground during these extraordinary economic times," said Roberts.

The bill also would revamp the two-year-old Urban Transit Hub Tax Credit program to offer a 100-percent corporate business tax credit to companies that plan capital projects that invest at least $50 million and create or relocate at least 250 jobs to within a half-mile of mass transit stations in Trenton, Newark, New Brunswick, Paterson, Elizabeth, Hoboken, Jersey City and East Orange. In Camden, that radius would be one mile. Businesses that lease space could receive the tax incentive through investments of at least $17.5 million.

"An investment tax credit is an important tool to luring new jobs and taking full advantage of our transportation infrastructure," said Assemblyman Albert Coutinho (D-Essex). "Focusing private investment in our transit hubs would complement the infusion of federal stimulus money in vital transportation projects."

A new Economic Redevelopment and Growth Grant program (ERGG) - modeled off the state's successful Brownfields Site Reimbursement program - would be created to allow towns to finance redevelopment efforts through revenues derived from a site's redevelopment rather than through local borrowing.

The ERGG program would replace the state's unsuccessful Revenue Allocation District program, which has seen the creation of only one redevelopment district since 2002.

"Not only will we give towns a new tool to help them smartly redevelop, but we are basing it on a highly successful program that has proven results," said Assemblyman Louis Greenwald (D-Camden). "Tossing aside a failed model for one we know works makes common sense."

State colleges and universities also would be permitted to partner directly with the private sector to build new campus infrastructure - such as dormitories - that would be paid-for through revenue generated by the facility. Such agreements would curtail the need for higher education institutions to self-finance the costs of construction. Over the past two decades, many colleges and universities have found themselves at or near debt capacity in trying to keep up with the needs for additional development.

Under the bill, all public colleges and universities would be required to develop long-range facilities plans and update those plans every five years.

"Too many state colleges and universities have been forced to rely on borrowing and tuition hikes as they try to keep up with the needs of rapidly growing student populations," said Assemblyman Patrick Diegnan (D-Middlesex). "Allowing schools to work directly with the private sector will not only create the modern campuses needed to keep more students in New Jersey, but will also do so in a more financially sound way."

A final key component of the bill would encourage investments in technology-centric businesses that have fewer than 225 employees by revising the rules of the state's Technology Business Tax Certificate Transfer Program.

The Technology Business Tax Certificate Transfer Program allows corporations to purchase the research and development tax credits and net operating loss deductions of new or expanding emerging technology and biotechnology companies - businesses that cannot use these tax benefits because they are not yet making a profit - at a rate of 75 percent of the value of the tax benefits, up to an aggregate total of $60 million a year.  This enables new tech firms in the state to turn their unusable tax losses and research credits into cash, which can then be used to purchase new equipment or upgrade facilities.

"New Jersey has a long history of being a hub for technological innovation and advancement," said Chivukula (D-Somerset). "This enhanced investment incentive will ensure we continue writing new chapters of that history."