Bill Text: NJ A2461 | 2016-2017 | Regular Session | Introduced
Bill Title: Concerns reviews of State's economic development incentives.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Introduced - Dead) 2016-02-04 - Introduced, Referred to Assembly Commerce and Economic Development Committee [A2461 Detail]
Download: New_Jersey-2016-A2461-Introduced.html
Sponsored by:
Assemblyman TIM EUSTACE
District 38 (Bergen and Passaic)
SYNOPSIS
Concerns reviews of State's economic development incentives.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning reviews of the State's economic development incentives and supplementing Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. The State Auditor shall, on or before July 1 next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and on or before July 1 of every second year thereafter, publish a report on an audit of every program of the New Jersey Economic Development Authority (hereinafter, "authority") that provides a private business with a grant, loan, or tax credit. Each biennial report and audit shall cover the two-year period ending on December 31 of the year preceding the date of its publication. The purpose of the report and audit shall be to enable an evaluation of the State's return on the economic development incentives provided through the authority to private businesses.
b. The report and audit shall provide detailed information on grants, loans, and tax credits awarded by the authority and on the private businesses that received those grants, loans, or tax credits. The report and audit (hereafter, "report") shall include a description of each authority program that provides or provided a grant, loan, or tax credit to a private business after December 31, 2006. The report shall also include the following information about every grant, loan, or tax credit in excess of $1,000 that the authority shall have awarded after December 31, 2006 to a private business:
(1) the name of the private business that received the grant, loan, or tax credit;
(2) the amount of the grant, loan, or tax credit;
(3) a detailed description of any development project that the private business was required to complete in exchange for the grant, loan, or tax credit and the status of the project;
(4) the amount of any investment, in excess of the funds provided by the State, that the authority required the private business to make in exchange for the grant, loan, or tax credit and the amount invested by the private business;
(5) the number of jobs that the private business promised to create, retain, or relocate within the State in exchange for the grant, loan, or tax credit and the number of those jobs that were to be permanent or temporary;
(6) the actual number of jobs that the private business created, retained, or relocated within the State as the direct or indirect result of the grant, loan, or tax credit, whether those jobs were temporary or are permanent, whether those jobs still existed in this State at the conclusion of the reporting period, or at the conclusion during the reporting period of the term of any contract or agreement between the authority and the business, under which contract or agreement the grant, loan or tax credit was awarded, and the salary and benefits provided during the reporting period to the individuals who have filled those jobs;
(7) the total number of individuals employed by the private business in this State on the day it received the grant, loan, or tax credit, the total number of individuals employed by the private business in this State at the conclusion of the reporting period or at the conclusion during the reporting period of any contract or agreement referred to in paragraph (6) of this subsection, and whether the private business has engaged in any layoffs in this State since its receipt of the grant, loan, or tax credit;
(8) the amount of additional tax revenue, on an annual basis for each year since the grant, loan, or tax credit was issued, attributable to increases in the private business's net income, sales, or workforce as the direct or indirect result of its receipt of the grant, loan, or tax credit, including, but not limited to, additional income tax withholdings from an employee in a job created by the grant, loan, or tax credit; and
(9) the use of a provision of law by the authority to recapture or reduce the benefits of any grant, loan, or tax credit awarded to a private business.
The report shall also include a summary of the findings of the preparers of the report and shall detail any trends identified by the preparers of the report, positive or negative, that could be utilized to improve the State's return on the economic development incentives provided through the authority to private businesses.
c. The report shall highlight any information required by this section that the preparers of the report were unable to obtain through the authority and recommend any legislative changes that would allow the authority to collect and provide that information.
d. (1) The Office of the State Auditor may prepare the report to be published pursuant to this section; or may contract with an independent private entity to prepare the report, or a part thereof. If the State Auditor decides to contract with an independent private entity to prepare the report, or a part thereof, the State Auditor shall award the contract to an entity which has at least 10 years' experience in the preparation of financial and performance audits of governmental units or their agencies and instrumentalities. The contract shall require that the audit portion of the report be conducted in accordance with generally accepted government auditing standards used by the federal Government Accountability Office.
The authority shall provide the State Auditor or independent private entity preparing the report, or part thereof, with unfettered access to any authority documents, records and employees. An independent private entity preparing the report, or part thereof, shall be required by contract to maintain the confidentiality of any confidential information it obtains through the authority.
(2) An independent private entity preparing the report, or part thereof, shall not publish the report or any part thereof to, or discuss its findings with, any person other than the State Auditor and the Executive Director of the authority, to each of whom the independent private entity shall transmit a copy of the report.
(3) Upon completion or receipt of the report, the State Auditor shall transmit a copy of the report to the President and the Minority Leader of the Senate, the Speaker and the Minority Leader of the General Assembly, the "Legislative Task Force on Business Development Incentives," the Governor and, pursuant to section 2 of P.L.1991, c.169 (C.52:14-19.1), the Legislature. The State Auditor and the authority shall make the report available to the public through the Office of the State Auditor's website and the authority's website, respectively.
2. a. There is hereby established the "Legislative Task Force on Business Development Incentives."
b. The task force shall study the effectiveness of the business development and retention incentives offered by the New Jersey Economic Development Authority.
c. The task force shall be comprised of 14 members of the Legislature, as follows:
(1) The chairpersons of the following committees, or their successors, shall serve ex officio: the Senate Economic Growth Committee, the Senate Labor Committee, the Senate Budget and Appropriations Committee, the Assembly Commerce and Economic Development Committee, the Assembly Labor Committee, and, at the discretion of the Speaker of the General Assembly, either the Assembly Appropriations Committee, or the Assembly Budget Committee. Ex officio members may be represented by designees;
(2) (a) A member of each of the following committees, or their successors, appointed by the President of the Senate based upon the recommendation of the Senate Minority Leader: the Senate Economic Growth Committee, the Senate Labor Committee, and the Senate Budget and Appropriations Committee; and
(b) a member of each of the following committees, or their successors, appointed by the Speaker of the General Assembly based upon the recommendation of the Assembly Minority Leader: the Assembly Commerce and Economic Development Committee, the Assembly Labor Committee, and, at the discretion of the Speaker of the General Assembly, either the Assembly Appropriations Committee, or the Assembly Budget Committee; and
(3) The Majority Leader of the Senate and the Majority Leader of the General Assembly.
d. Within 15 days of the Legislature's receipt of a report transmitted pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), the Senate and Assembly Minority Leaders shall submit to the Senate President and the Speaker of the General Assembly, respectively, their recommendations for members to serve on the task force. Within 30 days of the Legislature's receipt of the report transmitted pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), the Senate President and the Speaker of the General Assembly shall appoint the members of the minority party. Vacancies in the appointed membership of the task force shall be filled in the same manner as the original appointments were made.
e. The task force shall organize as soon as practicable after the appointment of its members, and shall hold at least one public hearing to take testimony regarding the findings of the report published by the State Auditor pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) within 60 days of the Legislature's receipt of a report transmitted pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).
f. The task force shall submit a report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, within 120 days of the Legislature's receipt of the report published by the State Auditor pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill). The task force report shall summarize the findings of the State Auditor's report and provide recommendations for revising or discontinuing any existing New Jersey Economic Development Authority program so as to improve the State's return on the economic development incentives provided through the authority to private businesses.
g. The Office of Legislative Services shall provide technical, stenographic, and secretarial assistance as may be required by the task force. The task force may also request the assistance and services of employees of any other State department, board, bureau, commission, task force, or agency as it may require and as may be available to it for its purposes.
3. This act shall take effect on July 1 next following the date of enactment.
STATEMENT
This bill provides for the periodic review of certain economic development incentive programs administered by the New Jersey Economic Development Authority (authority). The purpose of the bill is to expand upon current reporting requirements of authority programs to allow the Legislature to independently evaluate the effectiveness of New Jersey's economic development incentives.
The bill requires the State Auditor to conduct an audit of each authority program that provides a private business with a grant, loan, or tax credit every two years, and to publish a report on the audit. The bill requires the audit and report to describe each authority program that provides or provided a grant, loan, or tax credits to a private business after December 31, 2006, and to include the following information regarding each grant, loan, or tax credit in excess of $1,000 that the authority awarded after December 31, 2006 to a private business:
(1) the name of the private business that received the grant, loan, or tax credit;
(2) the amount of the grant, loan, or tax credit;
(3) a detailed description of any development project that the private business was required to complete in exchange for the grant, loan, or tax credit and the status of the project;
(4) the amount of any investment, in excess of the funds provided by the State, that the authority required the private business to make in exchange for the grant, loan, or tax credit and the amount invested by the private business;
(5) the number of jobs that the private business promised to create, retain, or relocate within the State in exchange for the grant, loan, or tax credit and the number of those jobs that were to be permanent or temporary;
(6) the actual number of jobs that the private business created, retained, or relocated within the State as the direct or indirect result of the grant, loan, or tax credit, whether those jobs were temporary or are permanent, whether those jobs still existed in this State at the conclusion of the reporting period, or at the conclusion during the reporting period of the term of any contract or agreement between the authority and the business, under which contract or agreement the grant, loan, or tax credit was awarded, and the salary and benefits provided during the reporting period to the individuals who have filled those jobs;
(7) the total number of individuals employed by the private business in this State on the day it received the grant, loan, or tax credit, the total number of individuals employed by the private business in this State at the conclusion of the reporting period or at the conclusion during the reporting period of any contract or agreement referred to in paragraph (6) above, and whether the private business has engaged in any layoffs in this State since its receipt of the grant, loan, or tax credit;
(8) the amount of additional tax revenue, on an annual basis for each year since the grant, loan, or tax credit was issued, attributable to increases in the private business's net income, sales, or workforce as the direct or indirect result of its receipt of the grant, loan, or tax credit, including, but not limited, to additional income tax withholdings from an employee in a job created by the grant, loan, or tax credit; and
(9) the use of a provision of law by the authority to recapture or reduce the benefits of any grant, loan, or tax credit awarded to a private business.
The bill provides for the report to include a summary of the findings of the preparers of the report, and to detail any trends, positive or negative, that could be utilized to improve the State's return on the economic development incentives provided to private businesses. The bill stipulates that the report is to highlight any information the preparers of the report were unable to obtain through the authority as well as any recommended legislative changes that would allow the authority to collect and provide that information.
The bill authorizes the State Auditor to contract with an independent private entity to prepare an audit and report, or part thereof. If the State Auditor contracts with an independent private entity, the bill requires the State Auditor to award the contract to an entity that has at least 10 years' experience in the preparation of financial and performance audits of governmental units, and requires the contract to mandate that the audit be conducted in accordance with generally accepted government auditing standards used by the Government Accountability Office.
In addition, the bill establishes the "Legislative Task Force on Business Development Incentives" to study the effectiveness of the authority's business development and retention incentives. The bill provides for the task force to be comprised of 14 legislators:
(1) the chairpersons of the Senate Economic Growth Committee, the Senate Labor Committee, the Senate Budget and Appropriations Committee, the Assembly Commerce and Economic Development Committee, the Assembly Labor Committee, and, at the discretion of the Speaker of the General Assembly, either the Assembly Appropriations Committee or the Assembly Budget Committee, or their respective successors;
(2) a member of each of those committees, appointed by the presiding officer of the House, based upon the recommendation of the minority leader of that House; and
(3) the Majority Leader of the Senate and the Majority Leader of the General Assembly.
The bill directs the task force to hold at least one public hearing on the State Auditor's report, and to issue its own report that makes recommendations for revising or discontinuing any existing authority program to improve the State's return on the economic development incentives provided through the authority to private businesses.
The bill takes effect on July 1 next following the date of enactment.
