Bill Text: NJ A828 | 2012-2013 | Regular Session | Introduced
Bill Title: Concerns UEZ funding to qualifying municipalities.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Introduced - Dead) 2012-03-12 - Reviewed by the Sales Tax Review Commission recommend to not enact [A828 Detail]
Download: New_Jersey-2012-A828-Introduced.html
STATE OF NEW JERSEY
215th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2012 SESSION
Sponsored by:
Assemblyman JOSEPH CRYAN
District 20 (Union)
Assemblyman ALBERT COUTINHO
District 29 (Essex)
Assemblywoman ANNETTE QUIJANO
District 20 (Union)
Assemblyman CRAIG J. COUGHLIN
District 19 (Middlesex)
Assemblywoman PAMELA R. LAMPITT
District 6 (Burlington and Camden)
SYNOPSIS
Concerns UEZ funding to qualifying municipalities.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act concerning urban enterprise zones and amending P.L.1983, c.303 and P.L.2001, c.347.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 6 of P.L.1983, c.303 (C.52:27H-65) is amended to read as follows:
6. It shall be the duty of the authority to:
a. Promulgate criteria for the designation of zones pursuant to the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.);
b. Receive and evaluate applications of municipalities for the designation of zones;
c. Enter into discussions with applying municipalities regarding zone development proposals;
d. Act as agent of the State with respect to zone development plans, and in determining the State-furnished components to be included in those plans;
e. Designate zones in accordance with the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.) and promulgate rules and regulations necessary to carry out its duties under [this act] P.L.1983, c.303 (C.52:27H-60 et seq.);
f. Exercise continuing review and supervision of the implementation of zone development plans;
g. [Receive and evaluate proposals of qualifying municipalities in which enterprise zones are designated for funding of projects and increased eligible municipal services from the enterprise zone assistance fund, and to certify annually to the State Treasurer amounts to be paid from the enterprise zone assistance fund to support approved projects and increased eligible municipal services in designated enterprise zones] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill);
h. Assist and represent qualifying municipalities in any negotiations with, or proceedings before, other agencies of State Government or of the federal government, to secure necessary or appropriate assistance, support and cooperation of those agencies in the implementation of zone development plans in accordance with the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.) and any other applicable State or federal law;
i. Upon request, assist agencies of municipal government in gathering, compiling and organizing data to support an application for designation of a zone, and in identifying and coordinating the elements of a zone development proposal suitable for the zone sought to be designated;
j. Provide assistance to State and local government agencies relating to application for the security of permits, licenses and other regulatory approvals required by those agencies, to assure consideration and expeditious handling of regulatory requirements of any zone business, zone business association or zone neighborhood association; regulatory agencies of the State and its agencies and instrumentalities may agree to any simplification, consolidation or other liberalization of procedural requirements which may be requested by the authority and which is not inconsistent with provisions of law;
k. Assist the State in applying to, or entering into negotiations or agreements with, the federal government, for federal enterprise zone designations; and
l. Exercise continuing review of the implementation of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.), and to report annually to the Governor and the Legislature , pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), on the effectiveness of enterprise zones in addressing the conditions cited in [this act] P.L.1983, c.303 (C.52:27H-60 et seq.), including any recommendations for legislation to improve the effectiveness of operation of those zones. The report shall be submitted one year from the effective date of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.), and annually thereafter.
(cf: P.L.1983, c.303, s.6)
2. Section 7 of P.L.1983, c.303 (C.52:27H-66) is amended to read as follows:
7. The authority shall designate enterprise zones from among those areas of qualifying municipalities determined to be eligible pursuant to P.L.1983, s.303. No more than 32 enterprise zones shall be in effect at any one time. No more than one enterprise zone shall be designated in any one municipality. [Except as otherwise provided by section 11 of P.L.2001, c.347 (C.52:27H-66.6), any designation granted shall be for a period of 20 years, beginning with the year in which a zone is eligible for an exemption to the extent of 50% of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), and shall not be renewed at the end of that period.] In designating enterprise zones the authority shall seek to avoid excessive geographic concentration of zones in any particular region of the State. At least six of the 10 additional enterprise zones authorized pursuant to section 3 of P.L.1993, c.367 shall be located in counties in which enterprise zones have not previously been designated and shall be designated within 90 days of the date of the submittal of an application and zone development plan. The authority shall accept applications within 90 days of the effective date of P.L.1993, c.367. Notwithstanding the provisions of P.L.1983, c.303 (C.52:27H-60 et seq.) to the contrary, the six additional enterprise zones to be designated by the authority pursuant to the criteria for priority consideration in this section shall be entitled to an exemption to the extent of 50% of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The following criteria shall be utilized in according priority consideration for designation of these zones by the authority:
a. One zone shall be located in a county of the second class with a population greater than 595,000 and less than 675,000 according to the latest federal decennial census and shall be located in the qualifying municipality in that county with the highest annual average number of unemployed persons and the highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development;
b. Two zones shall be located in a county of the second class with a population greater than 445,000 and less than 455,000 according to the latest federal decennial census, one of which shall be located in the qualifying municipality in that county with the highest annual average number of unemployed persons and the highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development, and one of which shall be located in the qualifying municipality in that county with the second highest annual average number of unemployed persons and the second highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development;
c. One zone shall be located in a county of the third class with a population greater than 84,000 and less than 92,000 according to the latest federal decennial census and shall be located in the qualifying municipality in that county with the highest annual average number of unemployed persons and the highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development;
d. One zone shall be located within two noncontiguous qualifying municipalities but comprised of not more than two noncontiguous areas each having a continuous border, if:
(1) both municipalities are located in the same county which shall be a county of the fifth class with a population greater than 500,000 and less than 555,000 according to the latest federal decennial census;
(2) the two municipalities submit a joint application and zone development plan; and
(3) each of the municipalities has a population greater than 16,000 and less than 30,000 and a population density of more than 5,000 persons per square mile, according to the latest federal decennial census; and
e. One zone shall be located within a municipality having a population greater than 38,000 and less than 46,000 according to the latest federal decennial census if the municipality is located within a county of the fifth class with a population greater than 340,000 and less than 440,000 according to the latest federal decennial census.
(cf: P.L.2004, c.75, s.2)
3. Section 11 of P.L.2001, c.347 (C.52:27H-66.6) is amended to read as follows:
11. a. Notwithstanding the provisions of any law, rule, regulation or order to the contrary, the designation of an enterprise zone by the authority pursuant to P.L.1983, c.303 (C.52:27H-60 et seq.), which is located in a municipality in which the annual average of unemployed persons is equal to or greater than 2,000, or the municipal average annual unemployment rate exceeds the State average annual unemployment rate, or an enterprise zone which is located in a municipality contiguous to a municipality in which an enterprise zone is designated pursuant to P.L.1983, c.303 (C.52:27H-60 et seq.) and in which the annual average of unemployed persons is equal to or greater than 2,000 or the municipal average annual unemployment rate exceeds the State average annual unemployment rate, shall, [following the expiration of the third five-year period during which the State shall have collected reduced rate revenues within the zone as provided in subsection c. of section 21 of P.L.1983, c.303 (C.52:27H-80),] be extended by the authority [, on a one-time basis, for a period of 16 years, within 90 days after the effective date of P.L.2001, c.347 (C.52:27H-66.2 et al.), or within 90 days after the expiration of that third five-year period, whichever is later] and shall not expire for so long as the municipality in which it is located remains a qualifying municipality.
b. [During the 90-day period] As provided for in subsection a. of this section, the authority shall notify all qualified businesses in the enterprise zone that the benefits authorized by sections 16 through 20 of P.L.1983, c.303 (C.52:27H-75 through C.52:27H-79) shall be extended to qualified businesses in the enterprise zone commencing with the designation of the extended enterprise zone [and continuing as long as a zone retains its designation as an extended enterprise zone] .
c. Notwithstanding any other provisions of any law, rule or regulation to the contrary, [90 days after the expiration of the period provided for in subsection c. of section 21 of P.L.1983, c.303 (C.52:27H-80),] except as provided in subsection b. of section 6 of P.L.1996, c.124 (C.13:1E-116.6), and after first depositing 10 percent of the gross amount of all revenues received from the taxation of retail sales made by certified vendors from business locations in an extended enterprise zone designated pursuant to subsection a. of this section, to which this exemption shall apply into the account created in the name of the authority in the enterprise zone assistance fund pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88), the remaining 90 percent shall be deposited immediately upon collection by the Department of the Treasury, as follows:
(1) [In the first five-year period] On and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and until June 30, 2023, during which period the State shall have collected reduced rate revenues within the extended enterprise zone, [all] 33 1/3% of such revenues shall be deposited in the enterprise zone assistance fund created pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88), and 66 2/3% shall be deposited in the General Fund ; and
(2) [In the second five-year period during which the State shall have collected reduced rate revenues within the extended enterprise zone, 66 2/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 33 1/3% shall be deposited in the General Fund;
(3) In the third five-year period during which the State shall have collected reduced rate revenues within the extended enterprise zone, 33 1/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 66 2/3% shall be deposited in the General Fund;
(4) In the final year during which the State shall have collected reduced rate revenues within the extended enterprise zone, but not to exceed the life of the enterprise zone, all those revenues] As of July 1, 2023 and thereafter, 100% of the revenues received from the taxation of retail sales made by certified vendors from business locations in an extended enterprise zone designated pursuant to subsection a. of this section shall be deposited in the General Fund.
The revenues required to be deposited in the enterprise zone assistance fund under this section shall be used for the purposes of that fund and for the uses prescribed in section 29 of P.L.1983, c.303 (C.52:27H-88), subject to annual appropriations being made for those purposes and uses.
d. The designation as an extended enterprise zone pursuant to this section shall terminate if the authority determines that the municipality in which the zone is located fails to meet the criteria of subsection a. of this section for three consecutive years. Any enterprise zone which loses its designation as an extended enterprise zone pursuant to this subsection shall be eligible to re-apply to the authority for designation as an extended enterprise zone pursuant to the provisions of P.L.1983, c.303 (C.52:27H-60 et seq.). If the authority approves its application, an urban enterprise zone designation may be extended to the applicant in accordance with the schedules set forth in P.L.1983, c.303 (C.52:27H-60 et seq.), beginning at the point where the enterprise zone was located on such schedules on the effective date of P.L.2001, c.347 (C.52:27H-66.2 et al.).
(cf: P.L.2001, c.347, s.11)
4. Section 21 of P.L.1983, c.303 (C.52:27H-80) is amended to read as follows:
21. Receipts of retail sales, except retail sales of motor vehicles, of alcoholic beverages as defined in the "Alcoholic Beverage Tax Law," R.S.54:41-1 et seq., of cigarettes as defined in the "Cigarette Tax Act," P.L.1948, c.65 (C.54:40A-1 et seq.), of manufacturing machinery, equipment or apparatus, and of energy, made by a certified seller from a place of business owned or leased and regularly operated by the seller for the purpose of making retail sales, and located in a designated enterprise zone established pursuant to the "New Jersey Urban Enterprise Zones Act," P.L.1983, c.303 (C.52:27H-60 et al.), or a UEZ-impacted business district established pursuant to section 3 of P.L.2001, c.347 (C.52:27H-66.2), are exempt to the extent of 50% of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
Any seller, which is a qualified business having a place of business located in a designated enterprise zone or in a designated UEZ-impacted business district, may apply to the Director of the Division of Taxation in the Department of the Treasury for certification pursuant to this section. The director shall certify a seller if the director shall find that the seller owns or leases and regularly operates a place of business located in the designated enterprise zone or in the designated UEZ-impacted business district for the purpose of making retail sales, that items are regularly exhibited and offered for retail sale at that location, and that the place of business is not utilized primarily for the purpose of catalogue or mail order sales. The certification under this section shall remain in effect during the time the business retains its status as a qualified business meeting the eligibility criteria of section 27 of P.L.1983, c.303 (C.52:27H-86). However, the director may at any time revoke a certification granted pursuant to this section if the director shall determine that the seller no longer complies with the provisions of this section.
Notwithstanding the provisions of this act to the contrary, except as may otherwise be provided by section 7 of P.L.1983, c.303 (C.52:27H-66), the authority may, in its discretion, determine if the provisions of this section shall apply to any enterprise zone designated after the effective date of P.L.1985, c.142 (C.52:27H-66 et al.); provided, however, that the authority may make such a determination only where the authority finds that the award of an exemption of 50 percent of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) will not have any adverse economic impact upon any other urban enterprise zone.
Notwithstanding any other provisions of law to the contrary, except as provided in subsection b. of section 6 of P.L.1996, c.124 (C.13:1E-116.6), after first depositing 10 percent of the gross amount of all revenues received from the taxation of retail sales made by certified sellers from business locations in designated enterprise zones to which this exemption shall apply into the account created in the name of the authority in the enterprise zone assistance fund pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88), the remaining 90 percent shall be deposited immediately upon collection by the Department of the Treasury, as follows:
a. [In the first five-year period] On and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and until June 30, 2023, during which period the State shall have collected reduced rate revenues within an enterprise zone, [all] 33 1/3% of such revenues shall be deposited in the enterprise zone assistance fund created pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88), and 66 2/3% shall be deposited in the General Fund; and
b. [In the second five-year period during which the State shall have collected reduced rate revenues within an enterprise zone, 66 2/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 33 1/3% shall be deposited in the General Fund;
c. In the third five-year period during which the State shall have collected reduced rate revenues within an enterprise zone, 33 1/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 66 2/3% shall be deposited in the General Fund;
d. In the final five-year period during which the State shall have collected reduced rate revenues within an enterprise zone, but not to exceed the life of the enterprise zone, all those revenues shall be deposited in the General Fund.
Commencing on the effective date of P.L.1993, c.144, all revenues in any enterprise zone to which the provisions of this section have been extended prior to the enactment of P.L.1993, c.144 shall be deposited into the enterprise zone assistance fund until there shall have been deposited all revenues into that fund for a total of five full years, as set forth in subsection a. of this section. The State Treasurer then shall proceed to deposit funds into the enterprise zone assistance fund according to the schedule set forth in subsections b. through d. of this section, beginning at the point where the enterprise zone was located on that schedule on the effective date of P.L.1993, c.144. No enterprise zone shall receive the deposit benefit granted by any one subsection of this section for more than five cumulative years] As of July 1, 2023 and thereafter, 100% of the revenues received from the taxation of retail sales made by certified vendors from business locations in an extended enterprise zone designated pursuant to subsection a. of this section shall be deposited in the General Fund.
The revenues required to be deposited in the enterprise zone assistance fund under this section shall be used for the purposes of that fund and for the uses prescribed in section 29 of P.L.1983, c.303 (C.52:27H-88), subject to annual appropriations being made for those purposes and uses.
(cf: P.L.2011, c.49, s.15)
5. Section 28 of P.L.1983, c.303 (C.52:27H-87) is amended to read as follows:
28. [Any] a. After the first year in which a firm [that receives] shall have received any benefits set forth in sections 16 through 24 of [this act] P.L.1983, c.303 (C.52:27H-75 through C.52:27H-83), the firm shall annually certify to the authority that it [is] continues to be a qualified business under subsection c. of section 3 of [this act] P.L.1983, c.303 (C.52:27H-62) by indicating on the firm's annual business filing with the State (1) the number of employees that the firm employed during the prior calendar year, and (2) the number of such employees in active employment as of the date of certification.
b. Failure to supply the certification or willful falsification of data in the certification will result in a fine of not more than ten times the benefits received, nor more than two years in prison.
(cf: P.L.1983, c.303, s.28)
6. Section 29 of P.L.1983, c.303 (C.52:27H-88) is amended to read as follows:
29. a. There is created an enterprise zone assistance fund to be held by the State Treasurer, which shall be the repository for all moneys required to be deposited therein under section 21 of P.L.1983, c.303 (C.52:27H-80) or moneys appropriated annually to the fund. All moneys deposited in the fund shall be held and disbursed in the amounts necessary to fulfill the purposes of this section and subject to the requirements hereinafter prescribed. The State Treasurer may invest and reinvest any moneys in the fund, or any portion thereof, in legal obligations of the United States or of the State or of any political subdivision thereof. Any income from, interest on, or increment to moneys so invested or reinvested shall be included in the fund.
The State Treasurer shall maintain separate accounts for each enterprise zone designated under P.L.1983, c.303 (C.52:27H-60 et al.), and one in the authority's name for the administration of the Urban Enterprise Zone program. The State Treasurer shall credit to each account an amount of the moneys deposited in the fund equal to the amount of revenues collected from the taxation of retail sales made in the zone and appropriated to the enterprise zone assistance fund, or that amount of moneys appropriated to the fund and required to be credited to the enterprise zone account of the qualifying municipality pursuant to section 21 of P.L.1983, c.303 (C.52:27H-80) and section 11 of P.L.2001, c.347 (C.52:27H-66.6), as appropriate.
The State Treasurer shall promulgate the rules and regulations necessary to govern the administration of the fund for the purposes of this section, which shall include, but not be limited to, regulations requiring the establishment of separate bank accounts for funds credited to the enterprise zone account of each municipality from the enterprise zone assistance fund, commonly known as "first generation funds," and funds generated from the repayments of loans to individuals and businesses from the enterprise zone account of each municipality and the proceeds from the sale of properties and equipment acquired through the enterprise zone program, commonly known as "second generation funds," and the review, compilation, and monitoring of second generation fund quarterly reports submitted by each enterprise zone.
Any individual, including an individual who is not directly employed by a municipality, with the authority to administer, allocate or approve the use of zone assistance funds is subject to the "Local Government Ethics Law," P.L.1991, c.29 (C.40A:9-22.1 et seq.), unless the individual is a State employee or a special State officer.
b. The enterprise zone assistance fund shall be used for the purpose of assisting qualifying municipalities in which enterprise zones are designated in undertaking public improvements [,] and economic development projects, and , subject to the time limitations prescribed by subsection c. of this section, in upgrading eligible municipal services in designated enterprise zones. After making an application to the Commissioner of Community Affairs for funds by April 1 of each year, qualifying municipalities shall receive disbursements from the fund by June 15 of that year in the form of a grant for such purposes, of which amount up to 10% may be used for administrative purposes. Qualifying municipalities shall annually report to the commissioner on all outstanding projects and whether the qualifying municipality requests any reallocation of outstanding balances for other approved projects. Outstanding balances in the fund account for an enterprise zone at the end of a State fiscal year may be carried over to the following fiscal year only; provided, however, that this limitation on carry-over shall not apply to any outstanding balances derived from the receipt of second generation funds pursuant to subsection a. of this section. Any portion of the outstanding balance in that account at the end of a fiscal year in excess of the amount authorized hereunder to be carried over shall be credited to and deposited in the General Fund. Any outstanding balances held in zone project accounts on June 30, 2012 shall be remitted to those respective eligible municipalities no later than October 1, 2012. Eligible municipalities may spend those funds in conformity with the permitted uses pursuant to this section; provided that any such funds not expended by the zone within 24 months of receipt shall be paid to the General Fund.
c. The governing body of a qualifying municipality in which an enterprise zone is designated and the zone development corporation created or designated by the municipality for that enterprise zone may, by resolution jointly adopted after public hearing, propose to undertake a project for the public improvement of the enterprise zone or to increase eligible municipal services in the enterprise zone, and to fund that project or increase in eligible municipal services from moneys deposited in the enterprise zone assistance fund and credited to the account maintained by the State Treasurer for the enterprise zone; provided, however that the amount of moneys used to increase eligible municipal services in an enterprise zone during each of the two State fiscal years next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed one-third of the amount allocated to the enterprise zone in those respective fiscal years; and provided further that, following those two State fiscal years, no moneys so deposited and credited shall be used to fund such eligible municipal services.
The proposal so adopted shall set forth a plan for the project or for the increase in eligible municipal services and shall include:
(1) A description of the proposed project or of the municipal services to be increased;
(2) An estimate of the total project costs, or of the total costs of increasing the municipal services, and an estimate of the amounts of funding necessary annually from the enterprise zone account;
(3) A statement of any other revenue sources to be used to finance the project or to fund the increase in eligible municipal services;
(4) A statement of the time necessary to complete the project, or of the time during which the increased municipal services are to be maintained;
(5) A statement of the manner in which the proposed project or increase in municipal services furthers the municipality's policy and intentions for addressing the economic and social conditions existing in the area of the enterprise zone as set forth in the zone development plan approved by the authority; and
(6) A description of the financial and programmatic controls and reporting mechanisms to be used to guarantee that the funds will be spent in accordance with the plan and that the project or increased municipal service will accomplish its purpose.
As used in this section, "project" means an activity funded by the zone assistance fund through the qualified municipality and implemented by the zone development corporation, including the purchasing, leasing, condemning, or otherwise acquiring of land or other property, or an interest therein, in the enterprise zone or as necessary for a right-of-way or other easement to or from the enterprise zone, which acquisition of land or other property will increase economic activity and job creation within the zone; the relocating and moving of persons or businesses displaced by the acquisition of land or property; the rehabilitation and redevelopment of land or property, including demolition, clearance, removal, relocation, renovation, alteration, construction, reconstruction, installation or repair of land or a building, street, highway, alley, utility, service or other structure or improvement which will lead to increased economic activity and job creation within the zone; [the purchase and installation of closed circuit television surveillance systems or other related equipment and those expenses associated with homeland security and domestic preparedness; the acquisition, construction, reconstruction, rehabilitation, or installation of public facilities and improvements, except buildings and facilities for the general conduct of government and schools;] the establishment of revolving loan [or grant] programs for qualified businesses in the zone to encourage private investment and job creation [,]; matching grant programs [for] to fund up to 50% of the costs of the establishment or operation of [pedestrian malls,] special improvement districts and tax increment districts, or other appropriate entity; [marketing, advertising and special event activities that will lead to increased economic activity or encourage private investment and job creation in the zone, but not including the expenditures therefor which are required to be reported pursuant to "The New Jersey Campaign Contributions and Expenditures Reporting Act," P.L.1973, c.83 (C.19:44A-1 et al.)] and the costs associated [therewith] with any of the foregoing, including the costs of an administrative appraisal, economic and environmental analyses, environmental remediation, engineering, planning, design, architectural, surveying or other professional or managerial services.
As used in this section, "eligible municipal services" means the hiring of additional policemen or firemen assigned duties in the enterprise zone, or the purchasing or leasing of additional police or fire vehicles, equipment or apparatus to be used for the provision of augmented or upgraded public safety services in the enterprise zone and its immediate vicinities.
d. Upon adoption by the governing body of the qualifying municipality and by the zone development corporation, the proposal shall be sent to the [authority] Commissioner of Community Affairs for [its] the commissioner's evaluation and approval. The [authority] commissioner shall approve the proposal if [it] the commissioner shall find [:
(1) In the case of a project,] that the proposed project [furthers the policy and intentions of the zone development plan approved by the authority] conforms to the criteria provided in subsection c. of this section, and that the estimated annual payments for the project from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account [;
(2) In the case of an increase in eligible municipal services, that the proposal furthers the policy and intentions of the zone development plan approved by the authority; that the qualifying municipality has furnished satisfactory assurances that the additional policemen or firemen to be hired, or the additional vehicles, equipment or apparatus to be purchased or leased, shall be used to augment or upgrade public safety in the enterprise zone, and shall not be used in other areas of the municipality; that the qualifying municipality shall annually appropriate for the increased eligible municipal services an amount equal to 20% of the amount of annual payments for the eligible municipal services from the enterprise zone account and shall not request for the increased eligible municipal services an amount equal to more than 35% of the amount of annual payments into the enterprise zone account, unless the municipality and the authority have entered into an agreement or agreements to the contrary prior to July 1, 1992; and that the estimated annual payments for the eligible municipal services from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account].
e. If the [authority] Commissioner of Community Affairs shall approve the proposal, [it] the commissioner shall annually, upon [its] the commissioner's receipt of a written statement from the governing body of the qualifying municipality and the zone development corporation, certify to the State Treasurer the amount to be paid in that year from the enterprise zone account in the enterprise zone assistance fund with respect to each project or increase in eligible municipal services approved. The [authority] commissioner may at any time revoke its approval of a project or an increase in eligible municipal services if [it] the commissioner finds that the annual payments made from the enterprise zone assistance fund are not being used as required by this section.
f. Upon certification by the [authority] Commissioner of Community Affairs of the annual amount to be paid to a qualifying zone with respect to any project or increase in eligible municipal services, the State Treasurer shall pay in each year to the qualifying municipality from the amounts deposited in the enterprise zone assistance fund the amount so certified, within the limits of the amounts credited to the enterprise zone account of the qualifying municipality.
g. An amount not to exceed one-third of the amount deposited in the account created in the name of the authority in the enterprise zone assistance fund shall be used by the authority for the coordination and administration of the program throughout the State, including but not limited to costs for personnel, operating expenses and marketing. The balance of the remaining amount shall be distributed to qualifying municipalities in proportion to each municipality's contribution to the enterprise zone assistance fund for the coordination and administration of the program within the municipality, including but not limited to costs for personnel, operating expenses and marketing.
h. A qualifying municipality shall be permitted to use up to 75% of the interest received as part of the repayment of any loan made from second generation funds, pursuant to subsection a. of this section, for the cost of administering that loan.
i. If in any fiscal year revenues that were due to be deposited in the assistance fund for use by qualifying municipalities were instead allocated to the General Fund, or appropriated as general State funds for a purpose, in a manner not authorized by section 11 of P.L.2001, c.347 (C.52:27H-66.6) or section 21 of P.L.1983, c.303 (C.52:27H-80), an amount equal to the amount of the revenues thus allocated or appropriated without such authorization shall be paid to the assistance fund at the earliest possible date thereafter and be made available for approved enterprise zone projects, which payment shall be in addition to the amount to be deposited pursuant to those sections in the fiscal year in which the payment is made. The State shall exercise any powers otherwise authorized by law to provide financial assistance to qualifying municipalities seeking to finance approved enterprise zone projects, including, but not limited to, the issuance of bonds or notes by the State or any instrumentality of the State if any such diversion of funds from the assistance fund occurs.
j. Enterprise zones receiving less than $1,000,000 from the assistance fund annually are permitted and shall be encouraged to regionalize the administration of their zone operations in order to maximize efficiency. Regionalization shall be permitted on a county-wide or multi-county basis.
(cf: P.L.2009, c.25, s.1)
7. This act shall take effect on July 1, 2012.
STATEMENT
This bill makes several changes to the law governing the monies made available to qualifying municipalities in which urban enterprise zones ("UEZs") are located.
Currently, 10% of the sales tax revenues collected by sellers in an urban enterprise zone that have been certified as meeting the employment requirements to be qualified to collect sales taxes at a reduced rate are deposited in an account of the Urban Enterprise Zone Authority in the enterprise zone assistance fund. The remaining 90% are allocated between the State General Fund and accounts in the enterprise zone assistance fund in the names of the individual enterprise zone municipalities. The allocation of these funds is subject to complex statutory provisions that originally reduced the allocation to the individual zones and increased the allocation to the General Fund over a 20 year schedule. Subsequent amendments have extended that schedule and made it more complex. This bill concerns the allocation of those funds and the uses to which the individual enterprise zone municipalities may apply the funds allocated to them.
The bill:
1) sets the allocation of revenues to be received by qualifying municipalities under the UEZ program from a decreasing percentage amount to a stable amount of 33.3% of allocable revenues until July 1, 2023 when all funding to UEZ municipalities under the UEZ program will cease and future revenues will be allocated to the General Fund;
2) provides that UEZ municipalities are to annually receive that percentage of funding as a grant after application for the funds to the UEZ Authority with 10% of that amount allowed for administrative purposes, and requires the municipalities to report to the UEZ Authority on all outstanding approved UEZ projects and whether the qualifying municipality requests any reallocation of outstanding balances for other approved UEZ projects;
3) provides that any outstanding balances from the UEZ assistance fund on any approved UEZ project may be carried over from one fiscal year to another fiscal year and, if any outstanding balances remain unexpended after one year, that remaining amount shall be credited to the General Fund, except that this limitation will not apply to any outstanding balances resulting from the receipt of funds to UEZ businesses;
4) phases out the use of UEZ monies from the fund for police and fire services to UEZs by prohibiting those monies to be used in any future fiscal year, except that one-third of those monies may be used for police and fire services in the two fiscal years following the effective date of the bill;
5) clarifies that future UEZ project funds may only be used for capital investment and associated costs which will lead to increased economic activity and job creation;
6) permits UEZ municipalities to use up to 75% of the interest amount received from the repayment of any loans made to UEZ businesses for the cost of administering those loans;
7) provides that if in any fiscal year for which revenues were due to be deposited in the UEZ assistance fund for use by UEZ municipalities but were allocated to the General Fund, those revenues are to be paid back to the assistance fund at the earliest possible date and be made available for approved UEZ projects; and
8) designates the Commissioner of Community Affairs, rather than the UEZ Authority, as the entity making the decision on the approval of projects proposed by UEZ municipalities and simplifies the decision process.
Further, the bill provides that two or more UEZs receiving less than $1,000,000 from the assistance fund annually are permitted and encouraged to regionalize the administration of their UEZ operations in order to maximize efficiency and that regionalization may be done on a county-wide or multi-county basis.
Concerning UEZ businesses, the bill: 1) assures that the tax and workforce benefits of the UEZ program to that are provided directly to businesses will continue, by removing the expiration dates of all UEZs, and 2) allows a business qualifying for UEZ program benefits to annually certify to the UEZ authority that it is a qualified business in a manner that, without any additional requirements, allows the business to indicate on its annual business filing with the State the number of employees the business employed for the prior calendar year and employs during the current calendar year.
