CHIVUKULA / OLIVER / GIBLIN BILL TO ENCOURAGE INVESTMENT, EXPANSION IN NJ TECH FIRMS ADVANCES

CHIVUKULA / OLIVER / GIBLIN BILL TO ENCOURAGE INVESTMENT, EXPANSION IN NJ TECH FIRMS ADVANCES

Measure Would Expand Existing Technology Incentive Program To Put NJ Back on the Vanguard of Technology Development

(TRENTON) – Legislation Assembly members Upendra J. Chivukula, Sheila Y. Oliver and Thomas P. Giblin sponsored to enhance the incentives offered to individuals and businesses that invest in the state’s technology sector was released by an Assembly committee today.

“New Jersey has a long history of being a hub for technological innovation and advancement,” said Chivukula (D-Somerset), a member of the Assembly Commerce and Economic Development Committee. “This enhanced investment incentive will ensure we continue writing new chapters of that history.”

The measure (A-3883) – developed by the sponsors in partnership with the state Economic Development Authority (EDA) – 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.

“In the current economic climate, we have two main responsibilities to business: help companies weather the recession and ensure they emerge stronger from it when it ends,” said Oliver (D-Essex). “Encouraging private investment in tech firms will help us meet both those goals.”

The state’s 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 – 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.

Under the bill, the program would:

• Allow the unused balances of the program’s annual $10 million set-aside for businesses in the state’s three technology innovation zones revert to the program’s general pool, allowing businesses not situated in innovation zones access to the funds;

• Increase the maximum lifetime benefit per business from $10 million to $15 million;

• Automate the awarding of the tax benefit transfer certificate if the applicant meets all requirements and adequate funding is available; and

• Allow the EDA to reclaim tax benefits from any business that fails to use the financial assistance as required by the program or from any business that moves its headquarters out of New Jersey within five years of receipt of benefits.

“These incentives won’t just help protect existing jobs and businesses in the state,” said Giblin (D-Essex). “They will act as a catalyst for investors which, in turn, will attract new businesses to New Jersey and help existing companies in the state expand.”

The Assembly Commerce and Economic Development Committee released the measure by a vote of 7-0 It now heads to the Assembly Appropriations Committee for further consideration.

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