Bill Text: NJ S4071 | 2024-2025 | Regular Session | Introduced
Bill Title: Authorizes HMFA to use certain tax credits; directs HMFA to conduct tax credit auctions to provide financial assistance for middle-income workforce housing purposes.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced) 2025-01-30 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S4071 Detail]
Download: New_Jersey-2024-S4071-Introduced.html
Sponsored by:
Senator M. TERESA RUIZ
District 29 (Essex and Hudson)
Co-Sponsored by:
Senator McKnight
SYNOPSIS
Authorizes HMFA to use certain tax credits; directs HMFA to conduct tax credit auctions to provide financial assistance for middle-income workforce housing purposes.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the use of tax credits for certain housing programs, amending P.L.2020, c.156 (C.34:1B-269 et al.), and supplementing P.L.1983, c.530 (C.55:14K-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 89 of P.L.2020, c.156 (C.52:18A-263) is amended to read as follows:
89. a. The Director of the Division of Taxation in the Department of the Treasury may purchase unused tax credits awarded under a program listed in subsection b. of this section, including tax credit transfer certificates issued by the director in lieu of a tax credit allowed under such programs. The director shall not pay consideration in excess of 75 percent of the credit amount to be purchased, except for a credit awarded under the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), which shall be subject to the provisions of paragraph (4) of subsection d. of section 77 of P.L.2020, c.156 (C.34:1B-345).
b. The Director of the Division of Taxation in the Department of the Treasury may purchase tax credits awarded under the following:
(1) the "Historic Property Reinvestment Act," sections [1] 2 through 8 of P.L.2020, c.156 ([C.34:1B-269] C.34:1B-270 through C.34:1B-276);
(2) the "Brownfield Redevelopment Incentive Program Act," sections 9 through 19 of P.L.2020, c.156 (C.34:1B-277 through C.34:1B-287);
(3) the "New Jersey Innovation Evergreen Act," sections 20 through 34 of P.L.2020, c.156 (C.34:1B-288 through C.34:1B-302);
(4) the "Food Desert Relief Act," sections 35 through 42 of P.L.2020, c.156 (C.34:1B-303 through C.34:1B-310);
(5) the "New Jersey Community-Anchored Development Act," sections 43 through 53 of P.L.2020, c.156 (C.34:1B-311 through C.34:1B-321);
(6) the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through C.34:1B-335);
(7) the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.);
(8) the Grow New Jersey Assistance Program established pursuant to section 3 of P.L.2011, c.149 (C.34:1B-244);
(9) section 6 of P.L.2010, c.57 (C.34:1B-209.4);
(10) the State Economic Redevelopment and Growth Grant program established pursuant to section 5 of P.L.2009, c.90 (C.52:27D-489e);
(11) section 1 of P.L.2018, c.56 (C.54:10A-5.39b); [and]
(12) section 2 of P.L.2018, c.56 (C.54A:4-12b); and
(13) sections 3 through 7 of P.L. , c. (C. ) (pending before the Legislature as this bill).
(cf: P.L.2020, c.156, s.89)
2. Section 98 of P.L.2020, c.156 (C.34:1B-362) is amended to read as follows:
98. a. The combined value of all tax credits awarded under the "Historic Property Reinvestment Act," sections 2 through 8 of P.L.2020, c.156 (C.34:1B-270 through 34:1B-276); the "Brownfields Redevelopment Incentive Program Act," sections 9 through 19 of P.L.2020, c.156 (C.34:1B-277 through 34:1B-287); the "New Jersey Innovation Evergreen Act," sections 20 through 34 of P.L.2020, c.156 (C.34:1B-288 through 34:1B-302); the "Food Desert Relief Act," sections 35 through 42 of P.L.2020, c.156 (C.34:1B-303 through 34:1B-310); the "New Jersey Community-Anchored Development Act," sections 43 through 53 of P.L.2020, c.156 (C.34:1B-311 through 34:1B-321); the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335); the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.); section 6 of P.L.2010, c.57 (C.34:1B-209.4); the "Cultural Arts Incentives Program Act," P.L.2023, c.197 (C.34:1B-383 et al.); [and] the "Next New Jersey Program Act," P.L.2024, c.49 ([C.34:1B-362 et seq.] C.34:1B-394 et al.); and P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed an overall cap of $11.5 billion over a nine-year period, subject to the conditions and limitations set forth in this section. Of this $11.5 billion, $2.5 billion shall be reserved for transformative projects approved under the Aspire Program.
b. (1) The total value of tax credits awarded under any constituent program of the "New Jersey Economic Recovery Act of 2020," P.L.2020, c.156 (C.34:1B-269 et al.), the "Cultural Arts Incentives Program Act," P.L.2023, c.197 (C.34:1B-383 et al.), [and] the "Next New Jersey Program Act," P.L.2024, c.49 ([C.34:1B-362 et seq.] C.34:1B-394 et al.), and P.L. , c. (C. ) (pending before the Legislature as this bill), shall be subject to the following limitations, except as otherwise provided in subsection c. of this section:
(a) for tax credits awarded under the "Historic Property Reinvestment Act," sections 2 through 8 of P.L.2020, c.156 (C.34:1B-270 through 34:1B-276), the total value of tax credits annually awarded during each of the first six years of the nine-year period shall not exceed $50 million;
(b) for tax credits awarded under the "Brownfields Redevelopment Incentive Program Act," sections 9 through 19 of P.L.2020, c.156 (C.34:1B-277 through 34:1B-287), the total value of tax credits annually awarded during each of the first six years of the nine-year period shall not exceed $50 million;
(c) for tax credits awarded under the "New Jersey Innovation Evergreen Act," sections 20 through 34 of P.L.2020, c.156 (C.34:1B-288 through 34:1B-302), the total value of tax credits annually awarded during each of the first six years of the nine-year period shall not exceed $60 million and the total value of tax credits awarded over the entirety of the nine-year period shall not exceed $300,000,000;
(d) for tax credits awarded under the "Food Desert Relief Act," sections 35 through 42 of P.L.2020, c.156 (C.34:1B-303 through 34:1B-310), the total value of tax credits annually awarded during each of the first six years of the nine-year period shall not exceed $40 million;
(e) (i) for tax credits awarded under the "New Jersey Community-Anchored Development Act," sections 43 through 53 of P.L.2020, c.156 (C.34:1B-311 through 34:1B-321), and the "Cultural Arts Incentives Program Act," P.L.2023, c.197 (C.34:1B-383 et al.), the total value of tax credits awarded during the nine-year period shall not exceed [$1,200,000,000] $800,000,000; provided, however, tax credits shall not be available under the "New Jersey Community-Anchored Development Act," sections 43 through 53 of P.L.2020, c.156 (C.34:1B-311 through 34:1B-321), until January 1, 2026. Beginning January 1, 2026, the authority shall annually award tax credits under the "New Jersey Community-Anchored Development Act," sections 43 through 53 of P.L.2020, c.156 (C.34:1B-311 through 34:1B-321), valuing no greater than $130 million for projects located in the 13 northern counties of the State, and the authority shall annually award tax credits valuing no greater than $70 million for projects located in the eight southern counties of the State. If during any year of operation of the "New Jersey Community-Anchored Development Act," sections 43 through 53 of P.L.2020, c.156 (C.34:1B-311 through 34:1B-321), the authority awards tax credits pursuant to the program in an amount less than the annual limitation for projects located in northern counties or southern counties, as applicable, the uncommitted portion of the annual limitation, up to the aggregate value of tax credits authorized by this sub-subparagraph, shall be available to be deployed by the authority in a subsequent year without consideration to the county in which a project is located;
(ii) for tax credits awarded under P.L. , c. (C. ) (pending before the Legislature as this bill), the sum of $400,000,000 in tax credits shall be allocated to the New Jersey Housing and Mortgage Finance Agency, established pursuant to P.L.1983, c.530 (C.55:14K-1 et seq.), which tax credits shall be sold through competitive auctions conducted pursuant to sections 3 through 7 of P.L. , c. (C. ) (pending before the Legislature as this bill). All proceeds of the tax credit auctions shall be used by the New Jersey Housing and Mortgage Finance Agency for the purposes authorized in subsection b. of section 4 of P.L. , c. (C ) (pending before the Legislature as this bill);
(f) for tax credits awarded under the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), not including tax credits awarded for transformative projects, the total value of tax credits annually awarded during each of the first six years of the nine-year period shall not exceed $1.1 billion. If the authority awards tax credits in an amount less than the annual limitation, then the uncommitted portion of the annual limitation shall be made available for qualified offshore wind projects awarded under section 6 of P.L.2010, c.57 (C.34:1B-209.4), pursuant to subparagraph (h) of this paragraph, projects awarded a tax credit pursuant to the "Next New Jersey Program Act," P.L.2024, c.49 ([C.34:1B-362 et seq.] C.34:1B-394 et al.), pursuant to subparagraph (k) of this paragraph, or New Jersey studio partners, New Jersey film-lease production companies, and taxpayers, other than New Jersey studio partners and New Jersey film-lease production companies awarded under sections 1 and 2 of P.L.2018, c.56 (C.54:10A-5.39b and C.54A:4-12b), pursuant to subparagraph (i) of this paragraph and subsection d. of this section. During each of the first six years of the nine-year period, the authority shall annually award tax credits valuing no greater than $715 million for projects located in the northern counties of the State, and the authority shall annually award tax credits valuing no greater than $385 million for projects located in the southern counties of the State under the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.). If during any of the first six years of the nine-year period, the authority awards tax credits under the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), in an amount less than the annual limitation for projects located in northern counties or southern counties, as applicable, the uncommitted portion of the annual limitation shall be available to be deployed by the authority in a subsequent year, provided that the uncommitted portion of tax credits shall be awarded for projects located in the applicable geographic area, except that (i) after the completion of the third year of the nine-year period, the authority may deploy 50 percent of the uncommitted portion of tax credits for any previous year without consideration to the county in which a project is located; and (ii) after the completion of the sixth year of the nine-year period, the authority may deploy all available tax credits, including the uncommitted portion of the annual limitation for any previous year, without consideration to the county in which a project is located;
(g) except as provided in subparagraph (j) of this paragraph, for tax credits awarded for transformative projects under the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), the total value of tax credits awarded during the nine-year period shall not exceed $2.5 billion. The total value of tax credits awarded for transformative projects in a given year shall not be subject to an annual limitation, except that the total value of tax credits awarded to any transformative project shall not exceed $400 million;
(h) from the tax credits made available, pursuant to subparagraph (f) of this paragraph, to the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), not including tax credits awarded for transformative projects, an amount not to exceed $350,000,000 shall be made available for qualified offshore wind projects awarded a credit pursuant to section 6 of P.L.2010, c.57 (C.34:1B-209.4) during the first three years of the nine-year period;
(i) beginning in fiscal year 2023, from the tax credits made available, pursuant to subparagraph (f) of this paragraph, to the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), not including tax credits awarded for transformative projects, additional amounts shall be made available for New Jersey studio partners, New Jersey film-lease production companies, and taxpayers, other than New Jersey studio partners and New Jersey film-lease production companies pursuant to sections 1 and 2 of P.L.2018, c.56 (C.54:10A-5.39b and C.54A:4-12b);
(j) beginning in fiscal year 2024, from the tax credits made available, pursuant to subparagraph (f) of this paragraph, to the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335) and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), not including tax credits awarded for transformative projects, an amount not to exceed $500,000,000 may be annually transferred for the award to transformative projects under the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), provided that: (i) the remaining allocation of tax credits otherwise available for transformative projects, pursuant to subparagraph (g) of this paragraph, is less than $1,000,000,000; and (ii) the authority board determines that the transfer of tax credits is warranted based on such criteria as the authority deems appropriate, which may include the criteria set forth in paragraph (2) of this subsection. If a transfer of tax credits is made pursuant to this subparagraph, the authority shall award no greater than 65 percent of the tax credits transferred pursuant to this subparagraph to transformative projects located in the northern counties of the State and no greater than 35 percent of the tax credits transferred pursuant to this subparagraph to transformative projects located in the southern counties of the State; and
(k) beginning in fiscal year 2025, from the tax credits made available, pursuant to subparagraph (f) of this paragraph, to the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335) and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), but not including tax credits awarded for transformative projects, an amount not to exceed $500,000,000 shall be made available for projects awarded a tax credit pursuant to the "Next New Jersey Program Act," P.L.2024, c.49 ([C.34:1B-362 et seq.] C.34:1B-394 et al.).
(2) The authority may in any given year determine that it is in the State's interest to approve an amount of tax credits in excess of the annual limitations set forth in paragraph (1) of this subsection, but in no event more than $200,000,000 in excess of the annual limitation, upon a determination by the authority board that such increase is warranted based on specific criteria that may include:
(i) the increased demand for opportunities to create or retain employment and investment in the State as indicated by the volume of project applications and the amount of tax credits being sought by those applications;
(ii) the need to protect the State's economic position in the event of an economic downturn;
(iii) the quality of project applications and the net economic benefit to the State and municipalities associated with those applications;
(iv) opportunities for project applications to strengthen or protect the competitiveness of the State under the prevailing market conditions;
(v) enhanced access to employment and investment for underserved populations in distressed municipalities and qualified incentives tracts;
(vi) increased investment and employment in high-growth technology sectors and in projects that entail collaboration with education institutions in the State;
(vii) increased development proximate to mass transit facilities;
(viii) any other factor deemed relevant by the authority.
c. In the event that the authority in any year approves projects for tax credits in an amount less than the annual limitations set forth in paragraph (1) of subsection b. of this section, then the uncommitted portion of the annual limitation shall be available to be deployed by the authority in future years for projects under the same program; provided however, that in no event shall the aggregate amount of tax credits approved be in excess of the overall cap of $11.5 billion, and in no event shall the uncommitted portion of the annual limitation for any previous year be deployed after the conclusion of the nine-year period.
d. Notwithstanding the provisions of any other law to the contrary, the uncommitted balance of the total value of tax credits authorized for award by the authority pursuant to subparagraph (f) of paragraph (1) of subsection b. of this section to the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 et seq.), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), shall be made available for tax credits allowed to New Jersey studio partners, New Jersey film-lease production companies, and taxpayers, other than New Jersey studio partners and New Jersey film-lease production companies pursuant to sections 1 and 2 of P.L.2018, c.56 (C.54:10A-5.39b and C.54A:4-12b). The value of tax credits, including tax credits allowed through the granting of tax credit transfer certificates, made available to New Jersey studio partners, New Jersey film-lease production companies, and taxpayers, other than New Jersey studio partners and New Jersey film-lease production companies pursuant to this subsection shall be as follows:
(1) in fiscal year 2023, $250,000,000 for New Jersey studio partners and $250,000,000 for New Jersey film-lease production companies;
(2) in fiscal year 2024, $250,000,000 for New Jersey studio partners and $250,000,000 for New Jersey film-lease production companies; and
(3) in fiscal year 2025, $250,000,000 for New Jersey studio partners, $250,000,000 for New Jersey film-lease production companies, and $300,000,000 for taxpayers, other than New Jersey studio partners and New Jersey film-lease production companies.
If the value of tax credits, including tax credits allowed through the granting of tax credit transfer certificates, approved to New Jersey studio partners and New Jersey film-lease production companies in any fiscal year pursuant to this subsection is less than the cumulative total amount of tax credits permitted to be approved in that fiscal year, the authority shall certify the amount of the remaining tax credits available for approval to each such category in that fiscal year, and shall increase the cumulative total amount of tax credits permitted to be approved for New Jersey studio partners and New Jersey film-lease production companies in the subsequent fiscal year by the certified amount remaining for each such category from the prior fiscal year.
(cf: P.L.2024, c.49, s.10)
3. (New section) As used in sections 4 through 7 of P.L. , c. (C. ) (pending before the Legislature as this bill):
²Agency² means the New Jersey Housing and Mortgage Finance Agency, established pursuant to P.L.1983, c.530 (C.55:14K-1 et seq.).
²Director² means the Director of the Division of Taxation in the Department of the Treasury.
²Middle-income workforce housing² means housing that is deed-restricted for occupancy by households with a gross household income of 80 percent or more, but not exceeding 120 percent, of the median gross household income for households of the same size within the housing region in which the housing is located.
4. (New section) a. Beginning on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the agency shall sell up to $400,000,000 in tax credits, subject to the limitations set forth in section 98 of P.L.2020, c.156 (C.34:1B-362), to purchasers through a competitive auction process. The competitive auctions shall be conducted, in consultation with the New Jersey Economic Development Authority, in a manner consistent with the processes set forth in section 24 of P.L.2020, c.156 (C.34:1B-292), as determined by the agency, except that agency shall not sell tax credits for less than 85 percent of the tax credit amount, and the agency shall not sell more than $75 million in tax credits annually.
b. (1) The proceeds from the sale of tax credits at each auction shall be reserved for use by the agency for the purposes of providing financial assistance to support the development of middle-income workforce housing in the State, including but not limited to, the rehabilitation or construction of residential units within multiple dwellings located within areas with proximity to existing public transportation or job opportunities.
(2) Subject to the requirements of this subsection, the agency may use some or all of the proceeds of the tax credit auctions as part of an existing program operated by the agency on or before the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) or through the establishment of a new program to effectuate the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
5. (New section) A purchaser that submits a successful bid for the purchase of tax credits pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall enter into a contract with the agency that includes payment information and the commitments made by the purchaser in its auction bid. A purchaser that submits a successful bid for the purchase of tax credits pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall pay by wire transfer the amount specified in its auction bid to the agency. Upon receipt thereof, the Executive Director of the agency shall notify the director to issue tax credits in the amount approved. Failure by the purchaser to pay the amount agreed upon on time shall disqualify the purchaser from purchasing the tax credits and the authority may reassign the right to purchase the credits to another bidder. Failure by the purchaser to adhere to the commitments made in its auction bid shall disqualify the purchaser from participating in future auctions and may result in the recapture of a portion of the tax credits.
6. (New section) a. A purchaser shall apply a credit awarded pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) against the purchaser's State tax liability due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 for the current privilege period as of the date of the approval of the credits. A purchaser may carry forward an unused credit resulting from the limitations of subsection b. of this section, if necessary, for use in the seven privilege periods next following the privilege period for which the credit is awarded.
b. The director shall prescribe the order of priority of the application of the credits awarded under section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) and any other credits allowed by law. The amount of a credit applied under section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with any other credits allowed by law, shall not reduce the tax liability of the purchaser to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).
7. (New section) a. A purchaser may apply to the agency and the director for a tax credit transfer certificate in lieu of the purchaser being allowed to apply any amount of the tax credit against the purchaser's State tax liability. A tax credit may be sold or assigned, in full or in part, to another person that may have a tax liability pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5. The tax credit transfer certificate provided to the purchaser shall include a statement waiving the purchaser's right to claim the credit that the purchaser has elected to sell or assign.
b. The purchaser shall not sell or assign a tax credit transfer certificate allowed under this section for consideration received by the purchaser of less than 85 percent of the transferred credit amount before considering any further discounting to present value which shall be permitted. The tax credit transfer certificate issued to a purchaser by the director shall be subject to any limitations and conditions imposed on the application of State tax credits pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) and any other terms and conditions that the director may prescribe.
c. A buyer or assignee of a tax credit transfer certificate pursuant to this section shall not make any subsequent transfers, assignments, or sales of the tax credit transfer certificate.
d. 10 percent of the consideration received by a purchaser from the sale or assignment of a tax credit transfer certificate pursuant to this section shall be remitted to the director and deposited in the General Fund of the State.
e. The agency shall publish on its Internet website the following information concerning each tax credit transfer certificate approved by the agency and the director pursuant to this section:
(1) the name of the transferor;
(2) the name of the transferee;
(3) the value of the tax credit transfer certificate;
(4) the State tax against which the transferee may apply the tax credit; and
(5) the consideration received by the transferor.
8. (New section) Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Executive Director of the agency, in consultation with the Chief Executive Officer of the New Jersey Economic Development Authority, may adopt, immediately, upon filing with the Office of Administrative Law, regulations that the Executive Director of the agency deems necessary to implement the provisions of sections 3 through 6 of P.L. , c. (C. ) (pending before the Legislature as this bill), which regulations shall be effective for a period not to exceed 180 days from the date of the filing. The Executive Director of the agency shall thereafter amend, adopt, or readopt the regulations in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
9. This act shall take effect immediately.
STATEMENT
This bill reallocates that $400 million in tax credits, which are currently authorized for the Community-Anchored Development Program and Cultural Arts Incentives Program, to the New Jersey Housing and Mortgage Finance Agency (HMFA) and sold through a competitive tax credit auction. The proceeds from the sale of tax credits at auction are to be used by the HMFA to support the development of middle-income workforce housing in the State.
Under current law, the "New Jersey Economic Recovery Act of 2020" has authorized $1.2 billion in tax credits over a nine-year period for the Community-Anchored Development Program. As amended by P.L.2023, c.197, the law also allows a portion of the tax credits allocated for the Community-Anchored Development Program to be used to support tax credit awards for projects through the Cultural Arts Incentives Program. However, tax credits are not authorized to be awarded under the Community-Anchored Development Program until beginning on January 1, 2026, and no projects have been awarded tax credits under the Cultural Arts Incentives Program as of November 2024. Under this bill, $400 million in tax credits will be transferred from these two programs to the HMFA in order to support middle-income workforce housing programs administered by the HMFA.
Specifically, this bill requires the HMFA to sell up to $400 million in tax credits through a competitive auction process. Under the bill, this auction is to be conducted in a manner consistent with the auctions held by the EDA under the New Jersey Innovation Evergreen Program, except that the tax credits could not be sold for a consideration less than 85 percent of the tax credit amount, and no more than $75 million in tax credits may be sold at auction annually. This bill also permits the Director of the Division of Taxation in the Department of the Treasury to purchase unused tax credits awarded under the provisions of this bill. The bill also provides that certain of these tax credits may be sold or transferred by the recipient, subject to certain restrictions specified in this bill.
Under the bill, the HMFA is required to use the proceeds of tax credit auctions for the purposes of providing financial assistance to support the development of middle-income workforce housing in the State, including, but not limited to, the rehabilitation or construction of residential units within multiple dwellings located within areas with proximity to existing public transportation and job opportunities. The bill defines "middle-income workforce housing" to mean housing that is deed-restricted for occupancy by households with a gross household income of 80 percent or more, but not exceeding 120 percent, of the median gross household income for households of the same size within the housing region in which the housing is located.
The bill provides that the HMFA may use the proceeds from the competitive tax credit auction to support an existing program operated by the HMFA or through the establishment of a new program to effectuate the provisions of this bill. Notably, the HMFA currently operates the Workforce Housing Program, which provides loans to fund eligible projects that include the rehabilitation and construction of residential units that are reserved for middle-income workforce housing, also known as workforce housing, within multiple dwellings located within areas with proximity to existing public transportation and job opportunities.
