Bill Text: NJ A2405 | 2020-2021 | Regular Session | Introduced
Bill Title: Grants credit against business income taxes to developer of rental housing reserved for occupancy by veterans.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2020-02-03 - Introduced, Referred to Assembly Housing Committee [A2405 Detail]
Download: New_Jersey-2020-A2405-Introduced.html
Sponsored by:
Assemblyman BENJIE E. WIMBERLY
District 35 (Bergen and Passaic)
Assemblyman WILLIAM W. SPEARMAN
District 5 (Camden and Gloucester)
Assemblywoman BRITNEE N. TIMBERLAKE
District 34 (Essex and Passaic)
Co-Sponsored by:
Assemblyman Calabrese
SYNOPSIS
Grants credit against business income taxes to developer of rental housing reserved for occupancy by veterans.
CURRENT VERSION OF TEXT
As introduced.
An Act granting a tax credit to developers of certain housing for veterans and supplementing Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares that:
a. It is estimated that more than 630,000 veterans live in New Jersey, and more than 500,000 of these personnel are civilian veterans.
b. Repeated and extended deployments in the ongoing conflicts in Iraq and Afghanistan have made it especially difficult for military personnel serving since September 11, 2001 to find housing suited to their unique situations.
c. Veterans have served our country in times of war and peace, sharing a common belief in a cause higher than self.
d. Veterans are valuable members of communities across New Jersey, and their experience serving their country has endowed them with unique and valuable experience.
e. The State and the nation owe much to those who have chosen to serve in the Armed Forces.
f. It is essential to the public good to encourage the development of stable, decent housing for New Jersey's veterans.
2. As used in this act:
"Approved costs" means the expenditures by a developer for the production of qualified housing for veterans, and may include amounts paid or incurred for: the purchase of land or any remediation costs; construction or rehabilitation; commissioning costs; interest paid during the construction or rehabilitation period; legal, architectural, engineering, and professional fees allocable to construction or rehabilitation; closing costs for construction or mortgage loans; recording taxes and filing fees incurred with respect to construction or rehabilitation; site costs, such as temporary electrical wiring, scaffolding, demolition costs, and fencing and security facilities; and costs of carpeting, partitions, walls and wall coverings, ceilings, lighting, plumbing, electrical wiring, and ventilation, provided that such costs shall not include the cost of telephone systems and computers other than electrical wiring costs in a project.
"Commissioner" means the Commissioner of Community Affairs.
"Department" means the Department of Community Affairs. "Developer" means a person or entity, including but not limited to a partnership or corporation, engaging development of a property.
"Development" means construction, reconstruction, conversion, structural alteration, relocation, rehabilitation or enlargement of any building or other structure, site remediation, and any use or change in the use of any building or other structure, or land or extension of use of land, for which permission may be required pursuant to the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).
"Qualified Housing for Veterans" means any new project to construct, reconstruct or rehabilitate residential rental property in which all of the units are occupied or reserved for occupancy by a veteran. Any property shall not be treated as failing to be residential rental property merely because part of the building is used for purposes other than residential purposes.
"Veteran" means a person who served on federal active duty in the United States Armed Forces, National Guard, or a reserve component thereof, and who was discharged or released therefrom under conditions other than dishonorable.
3. a. A developer shall be granted a tax credit for its approved costs in creating qualified housing for veterans.
b. The amount of the credit shall be 10 percent of the approved costs in the building or project.
c. The developer receiving the credit shall be allowed a credit against the tax liability imposed pursuant to the provisions of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., or the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq.).
d. The credit allowed to a developer under this section may not exceed the total amount of tax otherwise payable by the developer for the developer's tax accounting period.
e. A credit shall not be allowed for activities for which the developer is receiving credit under any other provision against any State tax on business-related income.
f. Credits granted to developers pursuant to this section, in the aggregate, shall not exceed $5 million in any fiscal year.
g. The amount of credit granted under this act to a New Jersey S corporation or an entity classified as a partnership for federal tax purposes shall be passed through to the partners, members, shareholders, or owners respectively, either in proportion to their ownership interest in the equity or as the partners, members, shareholders, or owners mutually agree as provided in an executed document detailing the alternate distribution method. The developer shall notify the department and the Division of Taxation of the relevant ownership interests and the intended distribution method in the developer's application for the tax credit.
4. In order for a developer to be eligible to receive a tax credit pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill), as soon as practicable, the developer of the project shall submit a proposed plan for the housing to the department. If the project is not a new residential property, the developer shall submit an affidavit certifying occupancy by veterans and any other information required by the department, pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) for the tax credit year.
5. a. To be eligible for a tax credit pursuant to this act, a developer or housing sponsor shall submit an application, in writing, to the department for a credit eligibility certificate. The application shall contain a showing of the following by the developer:
(1) the developer is likely, within a reasonable time, to obtain a certificate of occupancy for the housing for veterans;
(2) the developer's estimated allowable costs; and
(3) the housing for veterans meets the criteria listed in subsection b. of this section.
b. (1) Each unit of the rental housing for veterans shall be reserved for occupancy or occupied by veterans for not less than 15 years; and
(2) each unit of rental housing meets any other requirements promulgated by the department, pursuant to section b. of section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) , and intended to further the purposes of this act.
6. a. The department shall issue a credit eligibility certificate based upon a project to a developer if the developer provides all information the department deems necessary to effectuate the intent of P.L. , c. (C. ) (pending before the Legislature as this bill). The department shall determine whether housing for veterans is qualified housing pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill). The certificate shall include sufficient information to identify individual buildings and projects that are the qualified housing for veterans.
b. The department, in consultation with the Department of the Treasury, the director of the Division of Taxation, and the Department of Military and Veterans Affairs, shall develop, promulgate and publish any necessary forms, procedures, or rules to effectuate this act, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.). The regulations shall establish a reasonable schedule for the submission of applications and specific criteria, designed to discourage tax fraud, for allowable costs. The department shall design the rules to encourage use of the tax credit and to make the tax credit simple to apply for and simple to use.
c. Annually, the department, in consultation with the Division of Taxation, shall prepare a written report regarding the purpose and effectiveness of the credit. The report shall include the number and amount of tax credits granted and any recommendations that the Division of Taxation, Department of Military and Veterans Affairs and the department deem appropriate. The report shall be submitted to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature.
7. a. When filing a return that includes a claim for a credit pursuant to this act, the developer or housing sponsor shall include a copy of the eligibility certificate obtained pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. If a credit is owed to an owner of a qualified project and the property, or an interest therein, is sold, the credit for the period after the sale which would have been allowed under this act to the prior owner had the property not been sold shall be allowed to the successor owner if that right is specified in the deed transferring the property and the Department of Community Affairs and the Division of Taxation in the Department of the Treasury are notified of the transaction and intended distribution of the credit. If the credit is not transferred pursuant to this subsection, then the remaining credit shall remain with the prior building owner.
8. In order to promote the provision of qualified housing for veterans, the New Jersey Housing and Mortgage Finance Agency shall designate a person or persons to provide information about financial assistance available from the New Jersey Housing and Mortgage Finance Agency for the development of qualified housing for veterans and to coordinate and advise an interested developer about applying for or otherwise securing available financial assistance.
9. This act shall take effect on the July 1 next following its date of enactment, and apply to tax periods beginning on or after that date.
STATEMENT
This bill would establish a tax credit for New Jersey housing developers who construct homes for New Jersey veterans. This legislation would provide a credit against an entity's business taxes.
The bill permits a developer to receive a non-refundable credit against New Jersey business taxes. The credit amount is calculated based on the developer's expenditures to create rental housing restricted to occupancy by veterans. The bill provides that expenditures for a wide array of construction and real estate development activities are "allowable costs" that qualify for a credit. The credit amount may be up to 10 percent of the developer's allowable costs for developing veterans' housing.
To receive a credit, the developer must submit both a project plan and an application to the Department of Community Affairs. The Department of Community Affairs will issue a certificate of eligibility, which the developer will file with the developer's tax return to obtain the credit. The Commissioner of the Department of Community Affairs will develop regulations to administer the credit program in conjunction with the Division of Taxation and the Department of Military and Veteran's Affairs.
