Assembly Commerce and Economic Development Committee Statement to Assembly, No. 4929 (December 5, 2022)

Summary

Assembly Commerce and Economic Development Committee Statement to Assembly, No. 4929, State of New Jersey, dated December 5, 2022, reporting Assembly Bill No. 4929 favorably with committee amendments. The bill would provide an additional waiver, for July 1, 2022 through December 31, 2023, of the requirement that a full-time employee spend at least 60 percent of the employee's time at the qualified business facility, for businesses in the Business Employment Incentive Program, the Grow New Jersey Assistance Program and other named programs. A business would qualify if employees spend at least 10 percent of their time there through the 2023 tax period and the business pays the EDA five percent of its tax credit for the 2022 tax period. The bill also extends the termination accommodation to December 31, 2023.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT
                COMMITTEE

                          STATEMENT TO

                     ASSEMBLY, No. 4929
                         with committee amendments



       STATE OF NEW JERSEY
                         DATED: DECEMBER 5, 2022

          The Assembly Commerce and Economic Development Committee
      reports favorably Assembly Bill No. 4929, with committee
      amendments.
          This bill, as amended, would provide certain accommodations to
      businesses participating in the Business Employment Incentive
      Program (BEIP), the Business Retention and Relocation Assistance
      Grant (BRAG) Program, the Grow New Jersey Assistance (GROW)
      Program, and the Urban Transit Hub (HUB) Program.
          During the COVID-19 public health emergency, the New Jersey
      Economic Development Authority (EDA) implemented certain
      accommodations for businesses that had previously been approved
      awards under these programs. As part of these accommodations, the
      EDA waived the requirement that a full-time employee employed by a
      business participating in any of the programs is to spend at least 80
      percent of the employee’s time at the qualified business facility to be
      eligible for an award under the program. The New Jersey Economic
      Recovery Act of 2020 lowered the requirement for spending time at
      the qualified business facility to 60 percent of the employee’s time.
          This bill would provide an additional waiver to eligible businesses
      for the period beginning on July 1, 2022 and ending on December 31,
      2023. Specifically, the bill would allow businesses to waive the
      requirement that a full-time employee who is employed by the
      business must spend at least 60 percent of the employee’s time at the
      qualified business facility if the business satisfies the following
      criteria: (1) any full-time employee employed by the business must
      spend at least 10 percent of the employee’s time at the qualified
      business facility through the 2023 tax period; and (2) the business
      must pay to EDA five percent of the amount of the tax credit the
      business receives for the 2022 tax period, which payment EDA would
      use to support small business and downtown activation activities.
          During the COVID-19 public health emergency, the EDA also
      allowed businesses participating in the Grow New Jersey Assistance
      Program to terminate their program agreements any time before
      December 31, 2022 without the EDA recapturing previously
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distributed tax credits. The bill extends this accommodation for one
calendar year, allowing a business to terminate its program agreements
any time before December 31, 2023, commencing with the 2020 tax
period or any subsequent tax period ending on or before December 31,
2023. The bill prohibits any amendment to a termination agreement
once executed by the EDA and the business. The bill would provide
this same accommodation to a business that has executed an approval
letter under the Urban Transit Hub program.
    The bill would also extend the time allowed under current law for a
business to suspend its obligations under a GROW tax credit, and to
extend the term of eligibility for the same period of time. Current law
allows a suspension of a business’s obligations for the 2020 and 2021
tax periods. The bill would extend this provision to include the 2022
and 2023 tax periods as well. The bill would also extend the ability of
a business to suspend its obligations for the same period under the
Urban Transit Hub program for the same period of time being afforded
to GROW program recipients.

COMMITTEE AMENDMENTS:
    Proposed committee amendments would:
    (1) require a business which waives the requirement for full-time
employees to be on-site at least 60 percent of the employee’s time at
the qualified business facility (under BEIP, BRAG, GROW, or HUB)
to pay to the EDA five percent of the amount of the tax credit the
business receives for the 2022 tax period, and requires EDA to use the
payment to support small business and downtown activation activities.
The bill as introduced would have required payments to be made to a
local economic development entity.
    (2) extend the ability of a GROW program recipient, and allow a
HUB program recipient, to suspend its obligations under an incentive
agreement for the 2020-2023 tax periods.
    (3) extend the ability of a GROW program recipient to terminate
an incentive agreement due to COVID-19 for an additional year,
through December 31, 2023, and allow HUB program recipients the
same accommodation for the 2020-2023 tax periods.


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