Bill Text: NJ A2441 | 2018-2019 | Regular Session | Introduced
Bill Title: Establishes Main Street Economic Growth Program to encourage business development in small, highly developed municipalities.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Introduced - Dead) 2018-03-05 - Reported and Referred to Assembly Appropriations Committee [A2441 Detail]
Download: New_Jersey-2018-A2441-Introduced.html
Sponsored by:
Assemblyman DANIEL R. BENSON
District 14 (Mercer and Middlesex)
SYNOPSIS
Establishes Main Street Economic Growth Program to encourage business development in small, highly developed municipalities.
CURRENT VERSION OF TEXT
As introduced.
An Act creating the Main Street Economic Growth Program and supplementing P.L.1974, c.80 (C.34:1B-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Main Street Economic Growth Act."
2. The Legislature finds and declares that:
a. Many municipalities in this State having small populations with substantially developed commercial areas face considerable obstacles in fostering new jobs and business growth and do not qualify for assistance offered by the State's municipal and business assistance programs; and
b. Recognizing the difficulties faced by these municipalities and businesses, it is in the long-term economic interest of this State to establish an economic development incentive program to encourage business growth in the commercial areas of smaller, substantially developed municipalities so that the local economy of these municipalities may grow and thrive.
3. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Area business" means any entity authorized to do business in the State of New Jersey which, at the time a small municipality designates an area as a Main Street area, is engaged in the active conduct of a trade or business in that area; or an entity which, after a small municipality designates an area as a Main Street area, becomes newly engaged in the active conduct of a trade or business in that area and has at least 25 percent of its full-time employees employed at a business location in the area who are residents within the small municipality.
"Authority" means the New Jersey Economic Development Authority established by section 4 of P.L.1974, c.80 (C.34:1B-4).
"Center" means the New Jersey Business Action Center created in the Department of State.
"Department" means the Department of Community Affairs.
"Developed" means areas included within the Level 1 Urban or Built-up Land category in the 2012 New Jersey Department of Environmental Protection land use/land cover data set.
"Full-time employee" means a person employed by an area business for consideration for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, or a person who is employed by a professional employer organization pursuant to an employee leasing agreement between an area business and the professional employer organization, in accordance with P.L.2001, c.260 (C.34:8-67 et seq.) for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, and whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. or a person who is a resident of another State but whose income is not subject to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., or who renders any other standard of service generally accepted by custom or practice as full-time employment, and whose distributive share of income, gain, loss, or deduction, or whose guaranteed payments, or any combination thereof, is subject to the payment of estimated taxes, as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. "Full-time employee" shall not include any person who works as an independent contractor or on a consulting basis for an area business.
"Fund" means the "Main Street Economic Growth Loan Fund" established pursuant to section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Main Street area" or "area" means an eligible area designated by a small municipality pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Program" means the "Main Street Economic Growth Program" established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Small municipality" means any municipality with a population of under 11,000 persons according to the latest decennial census which is over 70 percent developed according to the 2012 New Jersey Department of Environmental Protection land use/land cover data set.
"Technical assistance" means assistance in the establishment, development, or promotion of an area business operating within a Main Street area under the terms and conditions adopted by the authority under the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
4. a. The Economic Development Authority, in consultation with the Department of Community Affairs and the New Jersey Business Action Center, shall establish the Main Street Economic Growth Program for the purpose of providing loans, loan guarantees, tax credits, and technical assistance to area businesses located within a Main Street area designated by a small municipality.
b. The authority may establish terms governing the provision of loans, loan guarantees, tax credits, and technical assistance to area businesses for the implementation of the program pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).
5. Under terms and conditions established by the authority, the governing body of a small municipality may, by ordinance, designate an area within the small municipality as a Main Street area. In designating a Main Street area, the governing body shall set forth the boundaries of the area with the approval of the authority, state findings of fact concerning the economic conditions existing in the Main Street area, and state the small municipality's policy and intentions for addressing these conditions. The statement of intent to address conditions in a Main Street area shall include:
a. Utilizing the powers conferred on the small municipality by law for the purpose of stimulating investment in and economic development of the Main Street area;
b. Utilizing State assistance through the provisions of the Main Street Economic Growth Program relating to financial and technical assistance to area businesses available from the authority or any other State entity;
c. Securing the involvement in, and commitment to, Main Street area economic development by private entities, including area neighborhood associations, voluntary community organizations supported by residents, and area businesses;
d. Utilizing the powers conferred by law to revise municipal planning and zoning ordinances and other land use regulations as they pertain to the Main Street area, in order to enhance the attraction of the area to existing and prospective area businesses; and
e. Increasing the availability and efficiency of support services, public and private, generally used by, and necessary to, the efficient functioning of commercial and industrial facilities within and outside of the Main Street area, and the extent to which the increase or improvement is to be provided and financed by the municipal government or by other entities.
6. The authority shall work cooperatively with the center and other State departments, agencies, boards, commissions, and authorities to explore and implement opportunities to direct resources and create enhanced incentives for area businesses participating in the Main Street Economic Growth Program.
7. a. A taxpayer shall be allowed a credit for the privilege period against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 15 percent of the taxpayer's employee compensation expenses related to meeting the employment criteria under the definition of an area business pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) and participation in the program, as determined by the authority, pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill), that is allowed for the privilege period. An unused credit may be carried forward, if necessary, for use in the seven privilege periods following the privilege period for which the credit is allowed.
b. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed by law shall be prescribed by the director. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with any other credits allowed by law, shall not exceed 50 percent of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). An amount of expense claimed as a credit pursuant to this section shall not be allowed as an amount calculated or claimed pursuant to any other credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5).
8. a. A taxpayer shall be allowed a credit for the taxable year against the tax otherwise due for the taxable year pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 15 percent of the taxpayer's employee compensation expenses related to meeting the employment criteria under the definition of an area business pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) and participation in the program, as determined by the authority, pursuant to P.L. c. (C. ) (pending before the Legislature as this bill), that is allowed for the taxable year. An unused credit may be carried forward, if necessary, for use in the seven taxable years following the taxable year for which the credit is allowed.
b. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed by law shall be prescribed by the director. The amount of the credit applied under this section against the tax imposed pursuant to "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a taxable year together with any other credits allowed by law, shall not exceed 50 percent of the tax liability otherwise due. An amount of expense claimed as a credit pursuant to this section shall not be allowed as an amount calculated or claimed pursuant to any other credit against the tax imposed pursuant to "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.
A business entity classified as a partnership for federal income tax purposes shall not be allowed a credit directly under the gross income tax, but the amount of credit of a taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.
A New Jersey S Corporation shall not be allowed a credit directly under the gross income tax, but the amount of credit of a taxpayer in respect of a pro rata share of S Corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.
9. Not longer than one year after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and annually thereafter, the authority shall prepare a report on the Main Street Economic Growth Program, deliver the report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, and make the report available on the authority's website. The report shall include the number of area businesses participating in the program, the names and types of area businesses participating in the program, the total amount of financial and technical assistance provided to area businesses, the amount of financial and technical assistance received per area business, the number of jobs created overall and per area business, the amount of capital investment made per area business, and any other information as the authority determines is necessary to evaluate the progress of the program.
10. a. To fund the Main Street Economic Growth Program, the authority shall establish and maintain a special non-lapsing, revolving fund to be known as the "Main Street Economic Growth Assistance Fund" for the purpose of providing loans, loan guarantees, and technical assistance to an area businesses located within a small municipality. The terms of a loan or loan guarantee, and the amount of technical assistance shall be at the discretion of the authority based on the monies made available by the authority for the purposes of the fund.
b. The fund may be credited with:
(1) monies made available by the authority for the purpose of the fund; and
(2) monies received by the authority from any public or private source.
11. The authority shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), including, but not limited to, a requirement that, in order for an area business to receive financial and technical assistance from the authority, an area business shall enter into a agreement with the authority to submit an audited financial statement to the authority.
12. This act shall take effect immediately, but shall remain inoperative for 60 days following the date of enactment. Sections 7 and 8 shall apply to privilege periods and taxable years beginning on or after the January 1 next following the date of enactment.
STATEMENT
This bill establishes the "Main Street Economic Growth Program" for the purpose of providing financial and technical assistance to businesses located in main street areas of small municipalities. The bill's purpose is to encourage business development along traditional main streets of less-populated municipalities.
The bill directs the New Jersey Economic Development Authority (EDA) to establish the program. The bill authorizes the governing body of each municipality that has a population under 11,000 and which is more than 70 percent developed, according to a Department of Environmental Protection data set, to designate a "Main Street area" within the municipality. This designation would set forth the municipality's policy and plan for addressing the economic conditions in the Main Street area.
The bill provides for corporation business tax credits and gross income tax credits for businesses located in a Main Street area within a small municipality that participates in the program based upon criteria to be determined by EDA. The bill provides that the credits be equal to 15 percent of the cost of employee compensation expenses related to meeting the employment criteria developed by EDA pursuant to the bill.
The bill also provides that the EDA create the "Main Street Economic Growth Assistance Fund" for the purpose of providing loans, loan guarantees, and technical assistance to area businesses located within the designated Main Street area of a participating small municipality. The bill provides that the EDA is to decide the terms of a loan or loan guarantee and the amount of technical assistance. The bill requires the EDA to issue an annual report to the Governor and Legislature on the program and to adopt rules and regulations to implement the program.
