Bill Text: NJ A473 | 2014-2015 | Regular Session | Introduced
Bill Title: Allows corporation business tax or gross income tax credits to developers for certain capital investments for repurposing qualified health care facilities.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced - Dead) 2014-01-16 - Introduced, Referred to Assembly Commerce and Economic Development Committee [A473 Detail]
Download: New_Jersey-2014-A473-Introduced.html
STATE OF NEW JERSEY
216th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2014 SESSION
Sponsored by:
Assemblyman JERRY GREEN
District 22 (Middlesex, Somerset and Union)
Assemblywoman SHAVONDA E. SUMTER
District 35 (Bergen and Passaic)
Assemblyman PATRICK J. DIEGNAN, JR.
District 18 (Middlesex)
Assemblywoman BONNIE WATSON COLEMAN
District 15 (Hunterdon and Mercer)
Assemblyman THOMAS P. GIBLIN
District 34 (Essex and Passaic)
Co-Sponsored by:
Assemblywoman Spencer
SYNOPSIS
Allows corporation business tax or gross income tax credits to developers for certain capital investments for repurposing qualified health care facilities.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act allowing corporation business tax or gross income tax credits to developers for certain capital investments for repurposing qualified health care facilities, supplementing Title 34 of the Revised Statutes.
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 "Health Care Facility Repurposing and Revitalization Tax Credit Act."
2. As used in this act:
"Authority" means the New Jersey Economic Development Authority established by section 4 of P.L.1974, c.80 (C.34:1B-4).
"Developer" means a person who undertakes the repurposing of a qualified health care facility.
"Capital investment" in a qualified health care facility means expenses incurred after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) for: the acquisition, site preparation and construction, repair, renovation, improvement, equipping, or furnishing of a building, structure, facility or improvement to real property.
"Full-time employee" means a person employed 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 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 who is a partner of a partnership 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., and includes only a person whose employer provides employee health benefits under a group health plan as defined under section 14 of P.L.1997, c.146 (C.17B:27-54), a health benefits plan as defined under section 1 of P.L.1992, c.162 (C.17B:27A-17), or a policy or contract of health insurance covering more than one person issued pursuant to Article 2 of Title 17B of the New Jersey Statutes. "Full-time employee" shall not include any person who works as an independent contractor or on a consulting basis for the business.
"Qualified health care facility" means a building, complex of buildings or structural components of buildings previously licensed by the Department of Health which has been granted a certificate of need to cease all or partial operation.
3. a. (1) A developer, upon application to and approval from the authority, shall be allowed credit of 75 percent, or by determination of the authority of up to 100 percent, of its capital investment, made after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) but prior to its submission of documentation pursuant to subsection c. of this section, for the repurposing of a qualified health care facility. The repurposing of a qualified health care facility is its renovation and redevelopment as a non-acute health care and health support services center. The non-acute health care and health support services components of the repurposed facility shall comprise no less than 50 percent of the net leasable space of the repurposed facility, provided however that the 50 percent requirement may be waived by the authority if the requirement is not economically feasible or if the inclusion of further non-health care and non-health support services elements would improve the utilization and development of the health care and health support services components. To be eligible for any tax credits authorized under this section, a developer shall demonstrate to the authority, at the time of application, that the State's financial support of the proposed capital investment in a qualified health care facility will not destabilize the supply and delivery of acute care health services in its market, will yield a net positive benefit to the State and local government, and, through a project pro forma analysis at the time of application, that the repurposing of the qualified health care facility 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.
(2) A developer shall make or acquire capital investments totaling not less than $10,000,000 in a qualified health care facility, at which the tenant businesses shall employ not fewer than 100 full-time employees, to be eligible for a credit under this section. A successor to a developer that acquires a repurposed qualified health care facility shall also be deemed to have acquired the capital investment made or acquired by the developer.
(3) Full-time employment for a privilege period or taxable year shall be determined as the average of the monthly full-time employment for the period.
(4) All construction projects for the repurposing of a qualified health care facility entered into pursuant to this section shall contain a project labor agreement. The project labor agreement shall be subject to the provisions of P.L.2002, c.44 (C.52:38-1 et seq.). Further, the general contractor, construction manager, design-build team, or subcontractor for a construction project proposed in accordance with this paragraph shall be registered pursuant to the provisions of P.L.1999, c.238 (C.34:11-56.48 et seq.).
b. A developer shall apply for the credit within five years after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and a developer shall submit its documentation for approval of its credit amount within eight years after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. (1) The amount of credit allowed shall, except as otherwise provided, be equal to the capital investment made by the developer, and shall be taken over a 10-year period, at the rate of one-tenth of the total amount of the developer's credit for each privilege period or taxable year of the developer, beginning with the privilege period or taxable year in which the developer 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 developer to submit any information determined by the authority to be necessary and relevant to its review.
(2) The amount of credit allowed may be applied against the corporation business tax liability otherwise due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) or the tax liability otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.
(3) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit directly, 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.
d. If, in any privilege period or taxable year, the number of full-time employees employed at the repurposed qualified health care facility is fewer than 80 then the amount of credit otherwise allowed to the developer for the privilege period or taxable year shall be reduced by the percentage determined by dividing 100 minus the number of employees employed at the facility for that tax period by 100 and similarly for each subsequent tax period, until the first tax period for which documentation demonstrating the restoration of the number of full-time employees employed at the repurposed qualified health care facility to 100 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.
e. The 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 P.L. , c. (C. )(pending before the Legislature as this bill), including but not limited to: examples of and the determination of capital investment; 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.
4. This act shall take effect immediately.
STATEMENT
This bill allows a developer to receive a credit against its corporation business tax liability for capital investments made to repurpose a former licensed health care facility as a licensed health care and health services support center. Current law does not provide a tax credit for this specific purpose.
The bill provides that a developer, upon application to and approval from the New Jersey Economic Development Authority (EDA), is allowed a tax credit of 100 percent of its capital investment made for the purpose of renovating and redeveloping a former licensed health care facility as a non-acute health care and health support services center. Annually for 10 years, the developer may apply 10 percent of its capital investment as a credit against its corporation business tax liability, otherwise due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), so that the total value of the tax credit is equal to 100 percent of the capital investment.
The bill requires that the health care and health support services components of the repurposed facility comprise no less than 50 percent of the net leasable space of the repurposed facility, but this requirement may be waived by the EDA if the requirement is not economically feasible or if the inclusion of further non-health care and non-health support services elements would improve the utilization and development of the health care and health support services components.
In order for the developer to receive the tax credit, the bill requires that: 1) the developer must demonstrate to the EDA that its proposed capital investment would not destabilize the supply and delivery of acute care health services in its market, will yield a net positive benefit to the State and local government, and that the repurposing is likely to be realized with the provision of tax credits at the level requested but would not likely be accomplished by private enterprise without the tax credits; 2) the developer must make or acquire capital investments of at least $10 million; 3) the tenants of the repurposed facility must employ at least 100 full-time employees; and 4) the developer must apply for the tax credit within five years after the effective date of the bill, and submit its documentation for approval within eight years after the effective date of the bill.
The bill provides that the EDA must annually review the developer's application, and if it finds that fewer than 80 full-time employees are employed at the facility, the amount of the tax credit for that tax period will be reduced by a percentage calculated by dividing 100 minus the number of full-time employees employed at the facility for that tax period by 100. In conducting its annual review, the EDA may require a developer to submit any information determined to be necessary and relevant to the review.
