On September 18, 2013, the New Jersey Economic Opportunity Act of 2013 ("The Act") was signed into law. The Act consolidates New Jersey's largest incentive programs into two existing programs, the Grow New Jersey Assistance Program ("Grow NJ") and the Economic Redevelopment and Growth Grant ("ERG"), thereby simplifying and expanding the eligibility for New Jersey's economic development incentive programs. The expansion of these programs begins on November 1, 2013.
EXISTING INCENTIVE PROGRAM
The Act phases out New Jersey's Business Retention and Relocation Assistance Grant ("BRRAG"), Business Employment Incentive Program ("BEIP"), and Urban Transit Hub Tax Credit Program. New Jersey will still honor the BRRAG and BEIP programs for companies previously awarded these incentives, as well as for those companies who submitted applications prior to the effective date of the Act to the extent that sufficient funds remain, provided that New Jersey's Economic Development Authority takes further action within 90 days. The BEIP and BRRAG Programs will be phased out by December 31, 2013.
EXPANDED INCENTIVE PROGRAMS
Grow New Jersey Assistance Program ("Grow NJ")
The Grow NJ Program provides negotiated, transferable tax credits of up to $15,000 per new employee for a period of up to 10 years (retained jobs may receive lower benefit amounts). The amount of the tax credit per employee is based on a number of factors, including industry, location, investment, etc., and the Program credit has certain caps depending on project size and location.
The Act expands the Grow NJ Program by lowering the required job creation number to 10-35 full-time jobs (the threshold is higher for job retention). In addition, the Grow NJ Program quantifies capital investment by investment per square foot, requiring a minimum outlay of at least $20-$120 per square foot. Specific job creation, job retention, and investment requirements depend on industry, project scope, and project location. The project must also demonstrate the investment and job retention and/or creation will result in a net positive benefit of at least 110% to the state, and the company must also locate or be located in a Qualified Incentive Area.
Economic Redevelopment and Growth Grant ("ERG")
The ERG Grant offers reimbursements of up to 75% (85% in Garden State Growth Zones) of the annual incremental state tax and/or local tax revenue for a period of up to 20 years, for up to 30% of the project costs (40% in Garden State Growth Zones). In order to qualify for the grant, eligible companies must demonstrate a financing gap, meet certain Green building requirements, and wait to commence construction until after the incentive is awarded.
HOW CAN TRUE PARTNERS CONSULTING HELP?
True Partners Consulting's Credits and Incentives Practice can assist your business with all aspects of incentives negotiations, including New Jersey's retention and expansion projects. Our team of knowledgeable professionals provides advice and performs services to assist in all aspects of credits and incentives negotiation and compliance. If you have any questions or need help in maximizing your incentives potential, please contact us.
Minah C. Hall
Jennifer A. Carroll