Bill Text: NJ A1788 | 2022-2023 | Regular Session | Introduced
Bill Title: Establishes Economic Development Incentive Review Commission.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-01-11 - Introduced, Referred to Assembly Commerce and Economic Development Committee [A1788 Detail]
Download: New_Jersey-2022-A1788-Introduced.html
STATE OF NEW JERSEY
220th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION
Sponsored by:
Assemblyman WAYNE P. DEANGELO
District 14 (Mercer and Middlesex)
SYNOPSIS
Establishes Economic Development Incentive Review Commission.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act establishing an Economic Development Incentive Review Commission and supplementing Title 34 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. As used in sections 1 and 2 of P.L. , c. (pending before the Legislature as this bill):
"Authority" means the Economic Development Authority.
"Commission" means the Economic Development Incentive Review Commission established pursuant to section 1 of P.L. , c. (pending before the Legislature as this bill).
"Department" means the Department of Treasury.
"Executive Director" means the Executive Director of the Economic Development Authority.
"Report" means the annual incentive review report required pursuant to subsection a. of section 2 of P.L. , c. (pending before the Legislature as this bill).
"Statement" means the policy recommendation statement that accompanies the report and is required pursuant to subsection c. of section 2 of P.L. , c. (pending before the Legislature as this bill).
b. There is established in the Department of Treasury an Economic Development Incentive Review Commission.
c. The purpose of the commission is to ensure regular independent outside reviews of State business incentive programs, to determine whether the incentive programs are being administered in accordance with underlying statutory authorization, to quantify the benefits derived by the State from the incentive programs, and to advance statutory and administrative recommendations on best practices for administering the incentive programs.
d. The commission shall consist of nine members. The State Treasurer and the Executive Director of the New Jersey Economic Development Authority shall serve as ex-officio members. Seven public members of the commission shall be appointed by the Governor in the following manner: one individual that is a certified public accountant or an auditor, employed as an internal auditor by a private audit firm; one individual that is a professional economist from a New Jersey public or private institution of higher education; one individual that leads a Statewide entity that represents the interests of the business community of the State; one individual that leads a Statewide entity that represents the interests of the real estate community of the State; and one individual that is a member of the general public with no specific expertise. The Governor shall appoint one member upon the recommendation of the Senate President who shall have experience in county or municipal government. The Governor shall appoint one member upon the recommendation of the Speaker of the General Assembly who shall have experience in county or municipal government.
All public members shall serve for four year staggered terms and until their successors are appointed. Each public member may be removed from office by the Governor for cause. A vacancy in the membership of the board occurring other than by expiration of the term shall be filled in the same manner as the original appointment, but for the unexpired term only. The first appointments not upon the recommendation of the Senate President or Speaker of the General Assembly shall be for one, two, or three years, with the Governor determining the respective terms; and the members appointed upon the recommendation of the Senate President or Speaker of the General Assembly shall be for full four year terms. All subsequent appointments shall be for terms of four years as stated. The Governor shall appoint commission members within 90 days of the enactment of P.L. , c. (pending before the Legislature as this bill). The commission shall organize as soon as practicable after the appointment of at least five members.
e. Commission members shall serve without compensation, but shall be reimbursed for necessary expenses incurred in the performance of their duties and within the limits of available funds. The commission may call to its assistance and avail itself of the services of the employees of any State, county, or municipal department, board, bureau, task force, or agency as it may require and as may be available to it for its purposes, and to employ stenographic and clerical assistance and incur traveling and other miscellaneous expenses necessary to perform its duties, within the limits of funds appropriated or otherwise made available to it for its purposes. The commission may utilize department and authority staff and expertise to contract for the report, to staff the commission, and to assist in the preparation of the statement.
f. The commission shall annually receive an appropriation through the department in an amount necessary to contract for the report required pursuant to subsection a. of section 2 of P.L. , c. (pending before the Legislature as this bill), to generate the statement required pursuant to subsection c. of section 2 of P.L. , c. (pending before the Legislature as this bill), and any other work of the commission.
g. The authority shall share all available information from its incentive agreements with the commission. The authority shall also work to revise its existing agreements as applicable, and structure future incentive agreements, to ensure that the commission has access to all relevant financial and employment information from incentive award recipients as the commission deems necessary for the execution of its duties.
h. The commission shall maintain the confidentiality of sensitive individual business data, and structure its reports in a manner that avoids public release of competitive business information unless necessary in the execution of the commission's duties.
2. a. The commission shall be responsible for contracting an annual report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature which provides a comprehensive review and analysis of incentives awarded under the Grow New Jersey Assistance Program, established pursuant to P.L.2011, c.149 (C.34:1B-242 et seq.), the Economic Redevelopment and Growth Grant program, established pursuant to section 5 of P.L.2009, c.90 (C.52:27D-489e), Garden State Growth Zones, established pursuant to P.L.2013, c.161 (C.52:27D-489p et al.), as well as any subsequent legislative incentive program providing tax credits or tax increment financing. The reports shall focus on: the effectiveness of those incentives on private-sector job creation and retention and capital investment; the impact on State and local tax revenues; and the broader impacts on the Statewide competitive business climate. The report shall also provide an analysis of the net benefits test used prior to the awarding of each incentive award. The analysis of the net benefits test shall document the degree to which the assumptions in the test proved to be accurate, evaluate the methodology utilized by the authority, causes for any discrepancy between the test and actual results, and a year by year accounting of the tax credits claimed under each individual incentive award, and the amount tax revenues attributable to the incentive award recipient. Finally, the report is to provide a cost benefit analysis of each statutory program, covering the history of the program.
b. The reports required pursuant to subsection a. of this section shall utilize a diverse set of contractors and pursue a diverse set of analytic viewpoints. On a three-year cycle, the authors of the report shall alternate between professional academic researchers, independent private sector economics firms, and non-profit research entities, to ensure a broad range of economic perspectives.
c. Following the receipt of the report required pursuant to subsection a. of this section, the commission shall work with the authors of the report to generate a separate policy recommendation statement to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. The policy recommendation statement shall combine the expertise of the commission members and the information provided in the report to provide an executive summary of the report and then also to generate policy recommendations, at the commission's discretion, in the following areas:
(1) recommendations for legislation to make improvements to the programs, that will increase overall net State revenues, increase State employment, ensure effective administration of the programs, and prevent abuses relative to the original statutory intentions of the incentive programs;
(2) guidance to the department on how to estimate revenue impacts from tax credit programs and tax transfer certificates in the current and future fiscal years;
(3) analysis of the administration of incentive programs, which identifies any inconsistencies between the administration of the incentive programs and the statutory intent of the programs;
(4) guidance to the authority on how to more effectively administer incentive programs, including improved business outreach, project evaluation, contracting practices, net benefits test administration, and post-award evaluation; and
(5) documentation of any observed best practices in other states concerning incentive programs that the commission finds would benefit the State.
d. The report required pursuant to subsection a. of this section and the statement required pursuant to subsection c. of this section shall be submitted annually by 180 days following the end of the State fiscal year to be covered by the respective report and statement and shall be required in every year in which a tax credit or tax increment financing incentive program is in effect in the State. The report shall also be publicly posted on the websites of the authority and the department.
e. The commission shall also appear annually before the Senate Economic Growth Committee and the Assembly Commerce and Economic Development Committee to present the findings of the report required pursuant to subsection a. of this section and the statement required pursuant to subsection c. of this section and to answer questions from the Legislature concerning the findings of the report and the policy recommendation statement.
3. This act shall take effect immediately. The first report of the commission shall be due within 180 days of the effective date of this bill and shall cover the most recently completed fiscal year before the effective date of this bill.
STATEMENT
This bill establishes the Economic Development Incentive Review Commission (commission). The commission is established within the Department of Treasury (department) and is to consist of nine members. The nine members include the State Treasurer, Executive Director of the New Jersey Economic Development Authority (authority) ex-officio. The Governor is to choose five public members, including an accountant or an auditor, a professional economist, a representative of the business community, a representative of the real estate community, and a member of the general public with no specific expertise. The Governor is to then appoint one member each upon the recommendation of the Senate President and the Speaker of the General Assembly who shall have experience in county or municipal government. Members aside from the first appointments not made upon the recommendation of the Senate President or Speaker of the General Assembly are to serve for four year terms.
The commission is required to annually contract for a report that comprehensively reviews State tax credit and tax increment financing programs, including, but not limited to, the Grow New Jersey Assistance program, the Economic Redevelopment and Growth Grant program, and the Garden State Growth Zone program. The program is to be both a review of the individual awards issued under those programs, as well as an overall evaluation of the programs themselves. The commission is to alternate between professional academic researchers, independent private sector economics firms, and non-profit research entities, to ensure a broad range of economic perspectives, when identifying firms to generate the report.
Upon receipt of the report, the commission is also to utilize its own expertise to generate an annual statement that accompanies the report. This statement is to provide additional analysis of the tax incentive programs, recommendations for legislative changes to the programs, documentation of best practices in other states, guidance to the department and authority concerning revenue impacts from tax incentive programs, and how to more efficiently manage the programs. Once the report and statement have been completed, the commission is to appear before the Senate Economic Growth Committee and the Assembly Commerce and Economic Development Committee, to present the report and statement and answer questions from Legislators.
