Bill Text: NJ A3815 | 2010-2011 | Regular Session | Introduced
Bill Title: Expands the Urban Transit Hub Tax Credit program to include port district municipalities and makes other changes to the program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-02-17 - Introduced, Referred to Assembly Commerce and Economic Development Committee [A3815 Detail]
Download: New_Jersey-2010-A3815-Introduced.html
Sponsored by:
Assemblyman ALBERT COUTINHO
District 29 (Essex and Union)
SYNOPSIS
Expands the Urban Transit Hub Tax Credit program to include port district municipalities and makes other changes to the program.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the urban transit hub tax credit program and amending P.L.2007, c.346 and P.L.2009, c.90.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.2007, c.346 (C.34:1B-208) is amended to read as follows:
2. As used in this act:
"Affiliate" means an entity that directly or indirectly controls, is under common control with, or is controlled by the business. Control exists in all cases in which the entity is a member of a controlled group of corporations as defined pursuant to section 1563 of the Internal Revenue Code of 1986 (26 U.S.C.s.1563) or the entity is an organization in a group of organizations under common control as defined pursuant to subsection (b) or (c) of section 414 of the Internal Revenue Code of 1986 (26 U.S.C.s.414). A taxpayer may establish by clear and convincing evidence, as determined by the Director of the Division of Taxation in the Department of the Treasury, that control exists in situations involving lesser percentages of ownership than required by those statutes. An affiliate of a business may contribute to meeting either the qualified investment or full-time employee requirements of a business that applies for a credit under section 3 of P.L.2007, c.346 (C.34:1B-209).
"Authority" means the New Jersey Economic Development Authority established by section 4 of P.L.1974, c.80 (C.34:1B-4).
"Business" means an owner or a tenant that is a corporation that is subject to the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), a corporation that is subject to the tax imposed pursuant to sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and 54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15) or N.J.S.17B:23-5, or is a partnership, an S corporation, [or] a limited liability corporation, a business trust, a nonprofit corporation, a sole proprietorship, or any other legal entity organized under the laws of this State or of any other state or foreign jurisdiction. A business shall include an affiliate of the business if that business applies for a credit based upon any capital investment made by or full-time employees of an affiliate.
"Capital investment" in a qualified business facility means expenses incurred after, but before the end of the eighth year after, the effective date of [P.L.2007, c.346 (C.34:1B-207 et seq.)] P.L.2009, c.90 (C.52:27D-489a et al.) for: a. the site preparation and construction, repair, renovation, improvement, equipping, or furnishing of a building, structure, facility or improvement to real property; [and] b. obtaining and installing furnishings and machinery, apparatus or equipment for the operation of a business in a building, structure, facility or improvement to real property; c. the construction, repair, renovation and improvement of residential units, excluding furniture and furnishings, in any mixed use project; and d. paying any employer payroll taxes imposed on the business or businesses in the qualified business facility, including projected employer payroll taxes to be paid during the 10-year eligibility period, pursuant to any ordinance adopted by an eligible municipality pursuant to P.L.1970, c.326 (C.40:48C-1 et seq.).
"Eligible municipality" means [a municipality: (1) which qualifies for State aid pursuant to P.L.1978, c.14 (C.52:27D-178 et seq.) or which was continued to be a qualified municipality thereunder pursuant to P.L.2007, c.111; and (2) in which 30 percent or more of the value of real property was exempt from local property taxation during tax year 2006. The percentage of exempt property shall be calculated by dividing the total exempt value by the sum of the net valuation which is taxable and that which is tax exempt] an urban municipality or a port district municipality.
"Freight rail site" means a property in any eligible municipality adjacent to or connected by rail spur to a freight rail line, or a property in any urban municipality connected to a freight rail line located within a 1/2 mile of the property by means of short-haul trailers, if the business utilizes that freight line for loading and unloading freight cars on trains.
"Full-time employee" means a person employed by the 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 the 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 an employee 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 is a partner of a business who works for the partnership 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 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 the business.
"Member" means a shareholder, principal, partner, member, beneficial owner, officer, director, or employee of a business. "Mixed use project" means a qualified business facility that includes a qualified residential project.
"Owner" means the developer or owner of a qualified business facility in which one or more tenants are located.
"Partnership" means an entity classified as a partnership for federal income tax purposes.
"Port district municipality" means a municipality located within the port district of the Port Authority of New York and New Jersey, as defined in Article II of the Compact Between the States of New York and New Jersey of 1921, or within the South Jersey Port District established pursuant to "The South Jersey Port Corporation Act," P.L.1968, c. 60 (C.12:11A-1 et seq.).
"Professional employer organization" means an employee leasing company registered with the Department of Labor and Workforce Development pursuant to P.L.2001, c.260 (C.34:8-67 et seq.).
"Qualified business facility" means any building, complex of buildings or structural components of buildings, and all machinery and equipment located within a designated urban transit hub in an eligible municipality, used in connection with the operation of a business.
"Qualified green building conversion" means any qualified business facility, other than a qualified business facility located on a freight rail site, that consists entirely or substantially of the conversion of existing office or other commercial premises that are vacant or functionally obsolete and at least 35 years old into "Class A" office, as determined by the Building Owners and Managers Association, or other commercial premises satisfying the requirements, under the Leadership in Energy and Environmental Design Green Building Rating System adopted by the United States Green Building Council, at such level as shall be determined by the authority.
"Qualified residential project" shall have the meaning prescribed for that term under section 34 of P.L.2009, c.90 (C.34:1B-209.2).
"Residential unit" means a residential dwelling unit such as a rental apartment, a condominium or cooperative unit, a hotel room, or a dormitory room.
"Tenant" means a business that leases all or a portion or that owns a portion of the net leasable area of a qualified business facility.
"Urban municipality" means a municipality: (1) which qualifies for State aid pursuant to P.L.1978, c.14 (C.52:27D-178 et seq.) or which was continued to be a qualified municipality thereunder pursuant to P.L.2007, c.111; and (2) in which 30 percent or more of the value of real property was exempt from local property taxation during tax year 2006. Whether a municipality meets the requirement that 30 percent or more of the value of real property be exempt from local property taxation, set forth in (2) above, shall be calculated by dividing the total exempt value by the sum of the net valuation which is taxable and that which is tax exempt.
"Urban transit hub" means:
a. property located within a 1/2 mile radius surrounding the mid point of a New Jersey Transit Corporation, Port Authority Transit Corporation or Port Authority Trans-Hudson Corporation rail station platform area, including all light rail stations, and property located within a one mile radius of the mid point of the platform area of such a rail station if the property is in a qualified municipality under the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et seq.);
b. property located within a 1/2 mile radius surrounding the mid point of one of up to two underground light rail stations' platform areas that are most proximate to an interstate rail station;
c. [property adjacent to, or connected by rail spur to, a freight rail line if the business utilizes that freight line for loading and unloading freight cars on trains] a freight rail site;
which property shall have been specifically delineated by the authority pursuant to subsection e. of section 3 of P.L.2007, c.346 (C.34:1B-209).
A property which is partially included within the radius shall only be considered part of the urban transit hub if over 50 percent of its land area falls within the radius. ["Rail station" shall not include] A property which is located in a port district municipality shall only be considered part of the urban transit hub if the property is a freight rail site; and a business shall demonstrate to the authority at the time of application, and the authority shall certify after rigorous review, that no freight rail site in excess of 50 contiguous acres in an urban municipality is capable of housing a suitable qualified business facility within eight years after the effective date of P.L.2009, c.90 (C.52:27D-489a et al.). With respect to any rail station located at an international airport, a property shall not be considered part of an urban transit hub if it is owned by a public entity.
(cf: P.L.2009, c.90, s.31)
2. Section 3 of P.L.2007, c.346 (C.34:1B-209) is amended to read as follows:
3. a. (1) A business, upon application to and approval from the authority, shall be allowed a credit of 100 percent of its capital investment, made after the effective date of P.L.2007, c.346 (C.34:1B-207 et seq.) but prior to its submission of documentation pursuant to subsection c. of this section, in a qualified business facility within an eligible municipality, pursuant to the restrictions and requirements of this section. To be eligible for any tax credits authorized under this section, a business shall demonstrate to the authority, at the time of application, that the State's financial support of the proposed capital investment in a qualified business facility will yield a net positive benefit to both the State and the eligible municipality [. The] including, without limitation, both direct and indirect economic benefits and non-financial community revitalization objectives. The combined value of all credits approved by the authority pursuant to P.L.2007, c.346 (C.34:1B-207 et seq.) and P.L.2009, c.90 (C.52:27D-489a et al.) shall not exceed $1,500,000,000; provided, however, that the value of all credits approved by the authority for qualified business facilities in port district municipalities shall not exceed $150,000,000.
(2) A business, other than a tenant eligible pursuant to paragraph (3) of this subsection, shall make or acquire capital investments totaling not less than $50,000,000 in a qualified business facility, or not less than $35,000,000 if the qualified business facility is located on a freight rail site in an urban municipality, at which the business shall employ not fewer than 250 full-time employees to be eligible for a credit under this section. A business that acquires a qualified business facility shall also be deemed to have acquired the capital investment made or acquired by the seller.
(3) A business that is a tenant in a qualified business facility, the owner of which has made or acquired capital investments in the facility totaling not less than $50,000,000, or not less than $35,000,000 if the facility is located on a freight rail site in an urban municipality, shall occupy a leased area of the qualified business facility that represents at least [$17,500,000] $10,000,000 of the capital investment in the facility at which the tenant business and up to [two] nine other tenants in the qualified business facility shall employ not fewer than 250 full-time employees in the aggregate to be eligible for a credit under this section. The amount of capital investment in a facility that a leased area represents shall be equal to that percentage of the owner's total capital investment in the facility that the percentage of net leasable area leased by the tenant is of the total net leasable area of the qualified business facility. Capital investments made by a tenant shall be deemed to be included in the calculation of the capital investment made or acquired by the owner, but only to the extent necessary to meet the owner's minimum capital investment of $50,000,000 or $35,000,000, as applicable. Capital investments made by a tenant and not allocated to meet the owner's minimum capital investment threshold of $50,000,000 or $35,000,000, as applicable, shall be added to the amount of capital investment represented by the tenant's leased area in the qualified business facility.
(4) A business shall not be allowed tax credits under this section if the business participates in a business employment incentive grant relating to the same capital and employees that qualify the business for this credit, or if the business receives assistance pursuant to P.L.1996, c.25 (C.34:1B-112 et seq.). A business that is allowed a tax credit under this section shall not be eligible for incentives authorized pursuant to P.L.2002, c.43 (C.52:27BBB-1 et al.). A business shall not qualify for a tax credit under this section, based upon capital investment and employment of full-time employees, if that capital investment or employment was the basis for which a grant was provided to the business pursuant to the "InvestNJ Business Grant Program Act," P.L.2008, c.112 (C.34:1B-237 et seq.). Notwithstanding the foregoing, a business shall not be precluded from availing itself of such other specified grant, assistance, or incentive programs after applying for tax credits under this section; however, if the business shall submit its documentation for approval of its credit amount before the deadline set forth in subsection b. of this section and such approval is obtained, then the business shall relinquish all rights it may have and shall reimburse the State for any monies theretofore received under any of such other specified grant, assistance, or incentive programs to the extent prohibited by the foregoing provisions of this paragraph.
(5) Full-time employment for an accounting or privilege period shall be determined as the average of the monthly full-time employment for the period.
(6) The capital investment of the owner of a qualified business facility is that percentage of the capital investment made or acquired by the owner of the building that the percentage of net leasable area of the qualified business facility not leased to tenants eligible pursuant to paragraph (3) of this subsection is of the total net leasable area of the qualified business facility. The owner shall qualify for tax credits on its capital investment provided the benefits of the tax credits are passed through to tenants of the qualified business facility that are not eligible pursuant to paragraph (3) of this subsection. An owner that acquires a qualified business facility shall also be deemed to have acquired the capital investment made or acquired by the seller.
(7) The owner of a qualified residential project within a mixed use project shall qualify for tax credits of up to 35 percent of its capital investment with respect to any residential units in the project, provided that the aggregate amount of capital investment made or acquired in the mixed use project by all businesses totals not less than $50,000,000.
(8) The minimum capital investment described in paragraphs (2) and (3) of this subsection shall be reduced to $20,000,000 for any qualified business facility that is a qualified green building conversion in an urban municipality.
b. A business shall apply for the credit within five years after the effective date of [P.L.2007, c.346 (C.34:1B-207 et seq.)] P.L.2009, c.90 (C.52:27D-489a et al.), and a business shall submit its documentation for approval of its credit amount within eight years after the effective date of [P.L.2007, c.346 (C.34:1B-207 et seq.)] P.L.2009, c.90 (C.52:27D-489a et al.).
c. (1) The amount of credit allowed shall, except as otherwise provided, be equal to the capital investment made by the business, or the capital investment represented by the business' leased area, or area owned by the business as a condominium, and shall be taken over a 10-year period, at the rate of one-tenth of the total amount of the business' credit for each tax accounting or privilege period of the business, beginning with the tax period in which the business is first approved by the authority as having met the investment capital and employment qualifications, subject to any reduction or disqualification as provided by subsection d. of this section as determined by annual review by the authority. In conducting its annual review, the authority may require a business to submit any information determined by the authority to be necessary and relevant to its review.
The credit amount for any tax period ending after the date eight years after the effective date of [P.L.2007, c.346 (C.34:1B-207 et seq.)] P.L.2009, c.90 (C.52:27D-489a et al.) during which the documentation of a business' credit amount remains unapproved shall be forfeited, although credit amounts for the remainder of the years of the 10-year credit period shall remain available to it.
The amount of tax credits that may be taken for a tax accounting or privilege period of the business that exceeds the final liabilities of the business for the tax accounting or privilege period may be carried forward for use by the business in the next 20 successive tax accounting or privilege periods, and shall expire thereafter, provided the value of all credits applied against tax liabilities pursuant to P.L.2007, c.346 (C.34:1B-207 et seq.) in any fiscal year shall not exceed $150,000,000.
The amount of credit allowed for a tax period to a business that is a tenant in a qualified business facility shall not exceed the business' total lease payments for occupancy of the qualified business facility for the tax period.
(2) A business [that is a partnership shall not be allowed a] may, in its discretion, use all or any portion of the credit under this section directly [, but the amount of credit of an owner of a business shall be determined] and may allocate to its members the portion of the credit which it does not directly use. The amount of the credit allocated to the members of a business entity as shall be allocated among such members: (a)(i) in the case of an entity other than a corporation, by allocating to each [owner] member of the [partnership] business that proportion of the credit of the business that is equal to the [owner of the partnership's] member's share, whether or not distributed, of the total distributive income or gain of the [partnership] business for its tax period ending within or with the [owner's] member's tax period, [or] and (ii) in the case of a corporation, by allocating to each shareholder of common stock in that corporation that proportion of the credit of the business that is equal to the percentage of shares of outstanding common stock of the corporation owned by such shareholder on the last day of the corporation's tax period, or (b) in any case, at the election of the business, by allocating to its members that proportion that is allocated by [an agreement, if any, among the owners of the partnership that has been] the business to one or more of its members pursuant to a statement for each applicable year signed by an individual with authority to sign for the federal tax matters of the business and provided to the Director of the Division of Taxation in the Department of the Treasury by such time and accompanied by such additional information as the director may require.
(3) The amount of credit allowed may be applied against the tax liability otherwise due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), pursuant to sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and 54:18A-3), pursuant to section 1 of P.L.1950, c.231 (C.17:32-15), [or] pursuant to N.J.S.17B:23-5, or pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. The tax credits may be utilized by the business and by one or more of its affiliates. The tax credits may also be assigned or pledged to a private investor or bank as securitization of equity, mezzanine, construction or permanent financing of the qualified business facility.
d. (1) If, in any tax period, fewer than 200 full-time employees of the business at the qualified business facility are employed in new full-time positions, the amount of the credit otherwise determined pursuant to final calculation of the award of tax credits pursuant to subsection c. of this section shall be reduced by 20 percent for that tax period and each subsequent tax period until the first period for which documentation demonstrating the restoration of the 200 full-time employees employed in new full-time positions at the qualified business facility has been reviewed and approved by the authority, for which tax period and each subsequent tax period the full amount of the credit shall be allowed; provided, however, that for businesses applying before January 1, 2010, there shall be no reduction if a business relocates to an urban transit hub from another location or other locations in the same municipality. For the purposes of this paragraph, a "new full-time position" means a position created by the business at the qualified business facility that did not previously exist in this State.
(2) If, in any tax period, the business reduces the total number of full-time employees in its Statewide workforce by more than 20 percent from the number of full-time employees in its Statewide workforce in the last tax accounting or privilege period prior to the credit amount approval under this section, then the business shall forfeit its credit amount for that tax period and each subsequent tax period, until the first tax period for which documentation demonstrating the restoration of the business' Statewide workforce to the threshold levels required by this paragraph has been reviewed and approved by the authority, for which tax period and each subsequent tax period the full amount of the credit shall be allowed.
(3) If, in any tax period, the number of full-time employees employed by the business at the qualified business facility located in an urban transit hub within an eligible municipality drops below 250 then the business shall forfeit its credit amount for that tax period and each subsequent tax period, until the first tax period for which documentation demonstrating the restoration of the number of full-time employees employed by the business at the qualified business facility to 250 has been reviewed and approved by the authority, for which tax period and each subsequent tax period the full amount of the credit shall be allowed.
(4) (i) If the qualified business facility is sold in whole or in part during the 10-year eligibility period the new owner shall not acquire the capital investment of the seller and the seller shall forfeit all credits for the tax period in which the sale occurs and all subsequent tax periods, provided however that any credits of tenants shall remain unaffected.
(ii) If a tenant subleases its tenancy in whole or in part during the 10-year eligibility period the new tenant shall not acquire the credit of the sublessor, and the sublessor tenant shall forfeit all credits for the tax period of its sublease and all subsequent tax periods, except that if the sublessor tenant continues to operate its business in part of the qualified business facility and retains sufficient capital investment and employees to otherwise remain eligible for the credits under this section the forfeiture shall only affect the credits attributable to the net leasable area of the subleased premises.
e. (1) The Executive Director of the [New Jersey Economic Development Authority] authority, in consultation with the Director of the Division of Taxation in the Department of the Treasury, shall adopt rules in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as are necessary to implement this act, including but not limited to: examples of and the determination of capital investment; the enumeration of eligible municipalities; specific delineation of urban transit hubs; the determination of the limits, if any, on the expense or type of furnishings that may constitute capital improvements; the promulgation of procedures and forms necessary to apply for a credit; and provisions for credit applicants to be charged an initial application fee, and ongoing service fees, to cover the administrative costs related to the credit.
(2) Through regulation, the [Economic Development Authority] authority shall establish standards based on the green building manual prepared by the Commissioner of Community Affairs pursuant to section 1 of P.L.2007, c.132 (C.52:27D-130.6), regarding the use of renewable energy, energy-efficient technology, and non-renewable resources in order to reduce environmental degradation and encourage long-term cost reduction. Prior to and until the green building manual has been prepared by the Commissioner of Community Affairs pursuant to section 1 of P.L.2007, c.132 (C.52:27D-130.6), redevelopment projects seeking State or local incentive grants shall meet the National Green Building Standard ICC 700-2008, which was approved by the American National Standards Institute (ANSI) as an American National Standard on January 29, 2009.
(cf: P.L.2009, c.90, s.32)
3. Section 33 of P.L.2009, c.90 (C.34:1B-209.1) is amended to read as follows:
33. a. A business may apply to the Director of the Division of Taxation in the Department of the Treasury and the executive director of the authority for a tax credit transfer certificate, covering one or more years, in lieu of the business being allowed any amount of the credit against the tax liability of the business. No tax credit transfer certificate shall be issued in respect of any year for which the business has applied for and has been conditionally approved to receive a refund pursuant to paragraph b. of this section. The tax credit transfer certificate, upon receipt thereof by the business from the director and the executive director of the authority, may be sold or assigned, in full or in part, to any other person that may have a tax liability pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), pursuant to sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and 54:18A-3), pursuant to section 1 of P.L.1950, c.231 (C.17:32-15), or pursuant to N.J.S.17B:23-5. The certificate provided to the business shall include a statement waiving the business's right to claim that amount of the credit against the taxes that the business has elected to sell or assign. The sale or assignment of any amount of a tax credit transfer certificate allowed under this section shall not be exchanged for consideration received by the business of less than 75 percent of the transferred credit amount. Any amount of a tax credit transfer certificate used by a purchaser or assignee against a tax liability shall be subject to the same limitations and conditions that apply to the use of the credit by the business that originally applied for and was allowed the credit.
b. A business may apply to the Director of the Division of Taxation in the Department of the Treasury and the executive director of the authority to receive a refund in any year in which the amount of the credit to which such business is entitled exceeds the tax liability of the business otherwise due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), pursuant to sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and 54:18A-3), pursuant to section 1 of P.L.1950, c.231 (C.17:32-15), or pursuant to N.J.S.17B:23-5, or pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., but only to the extent of such excess as confirmed by the director. The director shall approve such applications to the extent funds have been appropriated for such purpose in the State budget, but each such approval shall be conditional and shall be subject to the timely filing by the business of all requisite tax returns and subject further to the demonstration, to the satisfaction of the director, that the amount of the credit to which such business is entitled exceeds the tax liability of the business otherwise due. No application shall be approved which would cause the total amount of all approved refunds to exceed the amount so appropriated for such purpose. The director shall either conditionally approve or deny its approval within 60 days following the filing of an application. For each application conditionally approved, the director shall confirm the amount of the approved refund within 90 days following the last deadline for filing of the tax returns in respect of that year. Upon confirmation, any such approved refund shall be paid, without interest, within 90 days following the director's confirmation; provided, however, that refunds shall be withheld if the business is delinquent on any such tax liability, unless the unpaid amount is under appeal. No such application for refund may be made in respect of any year for which a tax credit transfer certificate has been issued pursuant to subsection a. of this section.
(cf: P.L.2009, c.90, s.33)
4. Section 34 of P.L.2009, c.90 (C.34:1B-209.2) is amended to read as follows:
34. As used in sections 34 and 35 of P.L.2009, c.90 (C.34:1B-209.2 and C.34:1B-209.3), the terms "affiliate," "authority," "capital investment," "eligible municipality," "partnership," "residential unit," "urban municipality," and "urban transit hub" shall have the same meanings as ascribed thereto in the "Urban Transit Hub Tax Credit Act," P.L.2007, c.346 (C.34:1B-207 et seq.), as amended by P.L.2009, c.90 (C.52:27D-489a et al.) and by P.L. , c. (C. ) (pending before the Legislature as this bill), except that all references therein to "business" and "qualified business facility" shall be deemed to refer respectively to "developer" and "qualified residential project," as such terms are defined in this section. In addition, as used in sections 34 and 35 of P.L.2009, c.90 (C.34:1B-209.2 and C.34:1B-209.3):
"Developer" shall have the same meaning as "business," as such term is defined in the "Urban Transit Hub Tax Credit Act," P.L.2007, c.346 (C.34:1B-207 et seq.), as amended by P.L.2009, c.90 (C.52:27D-489a et al.).
"Qualified residential project" means any building, complex of buildings or structural components of buildings, including a mixed use project, consisting predominantly of residential units, located in an urban transit hub within an [eligible] urban municipality.
(cf: P.L.2009, c.90, s.34)
5. Section 35 of P.L.2009, c.90 (C.34:1B-209.3) is amended to read as follows:
35. a. (1) A developer, upon application to and approval from the authority, shall be allowed a credit of up to [20] 35 percent of its capital investment, made after the effective date of P.L.2009, c.90 (C.52:27D-489a et al.) but prior to its submission of documentation pursuant to subsection c. of this section, in a qualified residential project, pursuant to the restrictions and requirements of this section. To be eligible for any tax credits authorized under this section, a developer shall demonstrate to the authority, through a project pro forma analysis at the time of application, that the qualified residential project is likely to be realized with the provision of tax credits at the level requested but is not likely to be accomplished by private enterprise without the tax credits. The value of all credits approved by the authority pursuant to P.L.2009, c.90 (C.52:27D-489a et al.) for qualified residential projects may be up to $150,000,000, except as may be increased by the authority as set forth below; provided, however, that the combined value of all credits approved by the authority pursuant to both P.L.2007, c.346 (C.34:1B-207 et seq.) and P.L.2009, c.90 (C.52:27D-489a et al.) shall not exceed $1,500,000,000. The authority shall monitor application and allocation activity under P.L.2007, c.346 (C.34:1B-207 et seq.), and if sufficient credits are available after taking into account allocation under P.L.2007, c.346 (C.34:1B-207 et seq.) to those qualified business facilities for which applications have been filed or for which applications are reasonably anticipated, and if the executive director judges certain qualified residential projects to be meritorious, the aforementioned $150,000,000 cap may, in the discretion of the executive director, be exceeded for allocation to qualified residential projects in such amounts as the executive director deems reasonable, justified, and appropriate. In allocating all credits to qualified residential projects under this section, the executive director shall take into account, together with other factors deemed relevant by the executive director: input from the municipality in which the project is to be located, whether the project furthers specific State or municipal planning and development objectives, or both, and whether the project furthers a public purpose, such as catalyzing urban development or maximizing the value of vacant, dilapidated, outmoded, government-owned, or underutilized property, or both.
(2) A developer shall make or acquire capital investments totaling not less than $50,000,000 in a qualified residential project to be eligible for a credit under this section. A developer that acquires a qualified residential project shall also be deemed to have acquired the capital investment made or acquired by the seller.
(3) The capital investment requirement may be met by the developer or by one or more of its affiliates.
b. A developer shall apply for the credit within five years after the effective date of P.L.2009, c.90 (C.52:27D-489a et al.), and a developer shall submit its documentation for approval of its credit amount within eight years after the effective date of P.L.2009, c.90 (C.52:27D-489a et al.).
c. The credit shall be administered in accordance with the provisions of subsections c. and e. of section 3 of P.L.2007, c.346 (C.34:1B-209), as amended by section 32 of P.L.2009, c.90, and section 33 of P.L.2009, c.90 (C.34:1B-209.1), except that (1) all references therein to "business" and "qualified business facility" shall be deemed to refer respectively to "developer" and "qualified residential project," as such terms are defined in section 34 of P.L.2009, c.90 (C.34:1B-209.2) and (2) all references therein to credits claimed by tenants and to reductions or disqualifications in credits as determined by annual review of the authority shall be disregarded.
(cf: P.L.2009, c.90, s.35)
6. This act shall take effect immediately.
STATEMENT
This bill makes numerous changes the "Urban Transit Hub Tax Credit" program ("program"). Specifically, the bill:
1) Opens up more port sites in the nine current eligible municipalities (now defined as "urban municipalities under the bill) by permitting locations not adjacent to "freight rail sites" (as defined in the bill) so long as the business uses short-haul trailers to load or unload goods at a nearby rail spur;
2) Permits a business to qualify under the program at a location in other municipalities that are part of the port districts of the Port Authority of New York and New Jersey or the South Jersey Port Corporation if the business demonstrates that there are no suitable 50 or more acre sites in the nine eligible municipalities that could satisfy all of the program requirements before the end of the program;
3) Reduces the $50 million capital investment requirement to $35 million for freight rail sites;
4) Reduces the $50 million capital investment requirement to $20 million for "green" building conversion projects where 35 or more year old buildings are converted to Class A office/retail space in the nine eligible municipalities;
5) Reduces the per-tenant capital investment requirement from $17,500,000 to $10,000,000;
6) Increases from three to ten the number of businesses allowed to aggregate their capital investment and/or jobs to satisfy the eligibility requirements;
7) Recognizes the mixed-use nature of some projects; awards the owner of a qualifying project to receive a tax credit of up to (subject to net benefits test) 35 percent of its capital investment attributable to residential units within a retail/office complex and, in a solely residential project, increases the maximum tax credit percentage (subject to net benefits test) from 20 percent to 35 percent;
8) Expands the definition of "business" to apply to an owner or a tenant of a business and includes other forms of businesses such as a business trust, a nonprofit corporation, a sole proprietorship, or any other legal entity organized under the laws of this State or of any other state or foreign jurisdiction;
9) Permits the owner of a project to take the tax credit for any portions of the building whose tenants do not individually qualify for the program so long as the developer passes along those savings to the non-qualifying tenants;
10) Provides that if the tax liabilities of a business in any given year exceed the tax credits awarded to the business for such year, the business should not have as its sole option the right to sell the credits to buyers of tax credits who will likely pay the business no more than the minimum of 75 cents on the dollar. The bill permits businesses the alternate rights to: (i) carry-forward tax credits into future years with a $150,000,000 annual cap on the program or (ii) apply for a tax refund; also, businesses organized as partnerships, sole proprietorships, etc. may offset the tax credits against personal income taxes;
11) Clarifies that any portion of a half-mile radius around a train station within an eligible municipality is included in the program even if the train station itself is not in the same municipality;
12) Provides that, in the absence of a State "green" building manual, the developer must abide by the ANSI green building standards;
13) Provides that the net benefits test may take into account indirect economic benefits and non-financial community revitalization objectives; and
14) Delays by two years the implementation of the program to coincide with the effective date of the "New Jersey Economic Stimulus Act of 2009," P.L.2009, c.90 (C.52:27D-489a et al.).
