Bill Text: NJ A3294 | 2012-2013 | Regular Session | Introduced
Bill Title: Adjusts the business employment incentive program to allow certain small medical practices to qualify for program participation.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2012-09-27 - Introduced, Referred to Assembly Commerce and Economic Development Committee [A3294 Detail]
Download: New_Jersey-2012-A3294-Introduced.html
Sponsored by:
Assemblywoman AMY H. HANDLIN
District 13 (Monmouth)
SYNOPSIS
Adjusts the business employment incentive program to allow certain small medical practices to qualify for program participation.
CURRENT VERSION OF TEXT
As introduced.
An Act modifying the business employment incentive program to support the growth of small medical practices, amending P.L.1979, c.303 and P.L.1996, c.26.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.1979, c.303 (C.34:1B-5.1) is amended to read as follows:
1. The New Jersey Economic Development Authority shall adopt rules and regulations requiring that not less than the prevailing wage rate be paid to workers employed in the performance of any construction contract, including contracts for millwork fabrication, undertaken in connection with authority financial assistance or any of its projects, those projects which it undertakes pursuant to P.L.2002, c.43 (C.52:27BBB-1 et al.), or undertaken to fulfill any condition of receiving authority financial assistance, including the performance of any contract to construct, renovate or otherwise prepare a facility for operations which are necessary for the receipt of authority financial assistance, unless the work performed under the contract is performed on a facility owned by a landlord of the entity receiving the assistance and less than 55% of the facility is leased by the entity at the time of the contract and under any agreement to subsequently lease the facility. The prevailing wage rate shall be the rate determined by the Commissioner of Labor and Workforce Development pursuant to the provisions of P.L.1963, c.150 (C.34:11-56.25 et seq.). For the purposes of this section, "authority financial assistance" means any loan, loan guarantee, grant, incentive, tax exemption or other financial assistance that is approved, funded, authorized, administered or provided by the authority to any entity and is provided before, during or after completion of a project, including but not limited to, all authority financial assistance received by the entity pursuant to the "Business Employment Incentive Program Act," P.L.1996, c.26 (C.34:1B-124 et al.) that enables the entity to engage in a construction contract, but this section shall not be construed as requiring the payment of the prevailing wage for construction commencing more than two years after an entity has executed with the authority a commitment letter regarding authority financial assistance and the first payment or other provision of the assistance is received.
Provided however, the prevailing wage requirement prescribed pursuant to this section or a prevailing wage requirement otherwise prescribed pursuant to law or regulation, shall not apply to a business employment incentive agreement entered into by a small medical practice pursuant to the "Business Employment Incentive Program Act," P.L.1996, c.26 (C.34:1B-124 et al.).
(cf: P.L.2007, c.245, s.1)
2. Section 2 of P.L.1996, c.26 (C.34:1B-125) is amended to read as follows:
2. As used in sections 1 through 17 of P.L.1996, c.26 (C.34:1B-124 et seq.) and in sections 9 through 11 of P.L.2003, c.166 (C.34:1B-139.1 through C.34:1B-139.3), unless a different meaning clearly appears from the context:
"Advanced computing" means a technology used in the designing and developing of computing hardware and software, including innovations in designing the full spectrum of hardware from hand-held calculators to super computers, and peripheral equipment;
"Advanced computing company" means a person, whose headquarters or base of operations is located in New Jersey, engaged in the research, development, production, or provision of advanced computing for the purpose of developing or providing products or processes for specific commercial or public purposes;
"Advanced materials" means materials with engineered properties created through the development of specialized processing and synthesis technology, including ceramics, high value-added metals, electronic materials, composites, polymers, and biomaterials;
"Advanced materials company" means a person, whose headquarters or base of operations is located in New Jersey, engaged in the research, development, production, or provision of advanced materials for the purpose of developing or providing products or processes for specific commercial or public purposes;
"Application year" means the grant year for which an eligible partnership submits the information required under section 8 of P.L.1996, c.26 (C.34:1B-131);
"Authority" means the New Jersey Economic Development Authority created pursuant to P.L.1974, c.80 (C.34:1B-1 et seq.);
"Base years" means the first two complete calendar years following the effective date of an agreement;
"Biotechnology" means the continually expanding body of fundamental knowledge about the functioning of biological systems from the macro level to the molecular and sub-atomic levels, as well as novel products, services, technologies and sub-technologies developed as a result of insights gained from research advances which add to that body of fundamental knowledge;
"Biotechnology company" means a person, whose headquarters or base of operations is located in New Jersey, engaged in the research, development, production, or provision of biotechnology for the purpose of developing or providing products or processes for specific commercial or public purposes, including but not limited to, medical, pharmaceutical, nutritional, and other health-related purposes, agricultural purposes, and environmental purposes, or a person, whose headquarters or base of operations is located in New Jersey, engaged in providing services or products necessary for such research, development, production, or provision;
"Bonds means bonds, notes or other obligations issued by the authority pursuant to this act;
"Business" means a corporation; sole proprietorship; partnership; corporation that has made an election under Subchapter S of Chapter One of Subtitle A of the Internal Revenue Code of 1986, or any other business entity through which income flows as a distributive share to its owners; limited liability company; nonprofit corporation; or any other form of business organization located either within or outside this State. A grant received under this act by a partnership, Subchapter S-Corporation, or other such business entity shall be apportioned among the persons to whom the income or profit of the partnership, Subchapter S-Corporation, or other entity is distributed, in the same proportions as those in which the income or profit is distributed;
"Business employment incentive agreement" or "agreement" means the written agreement between the authority and a business proposing a project in this State in accordance with the provisions of this act which establishes the terms and conditions of a grant to be awarded pursuant to this act;
"Department" means the [New Jersey Commerce and Economic Growth Commission] New Jersey Economic Development Authority;
"Designated industry" means a business engaged in the field of biotechnology, pharmaceuticals, financial services or transportation and logistics, advanced computing, advanced materials, electronic device technology, environmental technology or medical device technology;
"Director" means the Director of the Division of Taxation;
"Division" means the Division of Taxation in the Department of the Treasury;
"Electronic device technology" means a technology involving microelectronics, semiconductors, electronic equipment, and instrumentation, radio frequency, microwave, and millimeter electronics, and optical and optic-electrical devices, or data and digital communications and imaging devices;
"Electronic device technology company" means a person, whose headquarters or base of operations is located in New Jersey, engaged in the research, development, production, or provision of electronic device technology for the purpose of developing or providing products or processes for specific commercial or public purposes;
"Eligible partnership" means a partnership or limited liability company that is qualified to receive a grant as established in this act;
"Eligible position" is a new full-time position created by a business in New Jersey or transferred from another state by the business under the terms and conditions set forth in this act during the base years or in subsequent years of a grant. In determining if positions are eligible positions, the authority shall give greater consideration to positions that average at least 1.5 times the minimum hourly wage during the term of an agreement authorized pursuant to this act. For grants awarded on or after July 1, 2003, eligible position includes only a position for which a business provides employee health benefits under a group health plan as defined under section 14 of P.L.1997, c.146 (C.17B:27-54), a health benefits plan as defined under section 1 of P.L.1992, c.162 (C.17B:27A-17), or a policy or contract of health insurance covering more than one person issued pursuant to Article 2 of Title 17B of the New Jersey Statutes. "Eligible position" also includes all current and future partners or members of a partnership or limited liability company created by a business in New Jersey or transferred from another state by the business pursuant to the conditions set forth in this act during the base years or in subsequent years of a grant. An "eligible position" shall also include a position occupied by a resident of this State whose position is relocated to this State from another state but who does not qualify as a "new employee" because prior to relocation his wages or his distributive share of income from a gain, from a loss or deduction, or his guaranteed payments or any combination thereof, prior to the relocation, were not subject to income taxes imposed by the state or municipality in which the position was previously located. An "eligible position" shall also include a position occupied by a resident of another State whose position is relocated to this State but whose income is not subject to the New Jersey gross income tax pursuant to N.J.S.54A:1-1 et seq. An "eligible position" shall not include any position located within New Jersey, which, within a period either three months prior to the business' application for a grant under this act or six months after the date of application, ceases to exist or be located within New Jersey;
"Employment incentive" means the amount of a grant determined pursuant to subsection a. of section 6 of this act;
"Environmental technology" means assessment and prevention of threats or damage to human health or the environment, environmental cleanup, or the development of alternative energy sources;
"Environmental technology company" means a person, whose headquarters or base of operations is located in New Jersey, engaged in the research, development, production, or provision of environmental technology for the purpose of developing or providing products or processes for specific commercial or public purposes;
"Estimated tax" means an amount calculated for a partner in an eligible position equal to 6.37% of the lesser of (i) the amount of the partner's net income from the eligible partnership that is sourced to New Jersey as reflected in Column B of the partner's Schedule NJK-1 of the application year less the amount of the partner's net income from the eligible partnership that is sourced to New Jersey as reflected in column B of the partner's Schedule NJK-1 in the foundation year, or (ii) the net of all items of partnership income upon which tax has been paid as reflected on the partner's New Jersey Gross Income Tax return in the application year;
"Foundation year" means the year immediately prior to the creation of the eligible position;
"Full-time employee" means a person who is employed for consideration for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and who is determined by the authority to be employed in a permanent position according to criteria it develops, or who is a partner of an eligible partnership, who works for the partnership for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, and whose distributive share of income, gain, loss or deduction, or whose guaranteed payments, or any combination thereof, is subject to the payment of estimated taxes, as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. "Full-time employee" shall not include any person who works as an independent contractor or on a consulting basis for the business;
"Grant" means a business employment incentive grant as established in this act;
"Medical device technology" means a technology involving any medical equipment or product (other than a pharmaceutical product) that has therapeutic value, diagnostic value, or both, and is regulated by the federal Food and Drug Administration;
"Medical device technology company" means a person, whose headquarters or base of operations is located in New Jersey, engaged in the research, development, production, or provision of medical device technology for the purpose of developing or providing products or processes for specific commercial or public purposes;
"Net income from the eligible partnership" means the net combination of a partner's distributive share of the eligible partnership's income, gain, loss, deduction, or guaranteed payments;
"New employee" means a full-time employee first employed in an eligible position on the project which is the subject of an agreement or who is a partner of an eligible partnership, who works for the partnership for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, and whose distributive share of income, gain, loss or deduction, or whose guaranteed payments, or any combination thereof, is subject to the payment of estimated taxes, as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.; except that such a New Jersey resident whose position is relocated to this State shall not be classified as a "new employee" unless his wages, or his distributive share of income from a gain, from a loss or deduction, or his guaranteed payments or any combination thereof, prior to the relocation, were subject to income taxes imposed by the state or municipality in which the position was previously located. "New employee" may also include an employee rehired or called back from a layoff during or following the base years to a vacant position previously held by that employee or to a new position established during or following the base years. "New employee" shall not include any employee who was previously employed in New Jersey by the business or by a related person as defined in section 2 of P.L.1993, c.170 (C.54:10A-5.5) if the employee is transferred to the business which is the subject of an agreement unless the employee's position at his previous employer is filled by a new employee. "New employee" also shall not include a child, grandchild, parent or spouse of an individual associated with the business who has direct or indirect ownership of at least 15% of the profits, capital, or value of the business. New employee shall also include an employee whose position is relocated to this State but whose income is not subject to the New Jersey gross income tax pursuant to N.J.S.54A:1-1 et seq.;
"Partner" means a person who is entitled to either a distributive share of a partnership's income, gain, loss or deduction, or guaranteed payments, or any combination thereof, by virtue of holding an interest in the partnership. "Partner" also includes a person who is a member of a limited liability company which is treated as a partnership, as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.;
"Refunding Bonds" means bonds, notes or other obligations issued to refinance bonds, notes or other obligations previously issued by the authority pursuant to the provision of this act;
"Residual withholdings" means for any period of time, the excess of the estimated cumulative withholdings for all executed agreements eligible for payments under this act over the cumulative anticipated grant amounts;
"Schedule NJK-1" means Schedule NJK-1 as the form existed for taxable year 1997;
"Small medical practice" means a business located in New Jersey that is primarily engaged as a professional medical practice with no more than five practitioners who are each licensed to practice medicine and surgery by the State Board of Medical Examiners pursuant to chapter 9 of Title 45 of the Revised Statutes or licensed to practice podiatric medicine by the State Board of Medical Examiners pursuant to chapter 5 of Title 45 of the Revised Statutes;
"Withholdings" means the amount withheld by a business from the wages of new employees or estimated taxes paid by, or on behalf of, partners that are new employees, or any combination thereof, pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and, if the new employee is an employee whose position has moved to New Jersey but whose income is not subject to the New Jersey gross income tax pursuant to N.J.S.54A:1-1 et seq., the amount of withholding that would occur if the employee were to move to New Jersey.
(cf: P.L.2003, c.166, s.1)
3. Section 4 of P.L.1996, c.26 (C.34:1B-127) is amended to read as follows:
4. a. A business may apply to the authority for a grant for any project which:
(1) Will create at least 25 eligible positions in the base years; [or]
(2) Will create at least 10 eligible positions in the base years if the business is an advanced computing company, an advanced materials company, a biotechnology company, an electronic device technology company, an environmental technology company, or a medical device technology company; or
(3) Will create at least five eligible positions within the first five complete calendar years following the effective date of a business employment incentive agreement entered into pursuant to section 3 of P.L.1996, c.26 (C.34:1B-126) if the business qualifies as a small medical practice.
b. In the case of a business which is a landlord, the business may apply to the authority for a grant for any project in which at least 25 eligible positions are created in the base years.
c. A project which consists solely of point-of-final-purchase retail facilities shall not be eligible for a grant under this act. If a project consists of both point-of-final-purchase retail facilities and non-retail facilities, only the portion of the project consisting of non-retail facilities shall be eligible for a grant, and only the withholdings from new employees which are employed in the portion of the project which represents non-retail facilities shall be used to determine the amount of the grant. If a warehouse facility is part of a point-of-final-purchase retail facility and supplies only that facility, the warehouse facility shall not be eligible for a grant. For the purposes of this act, catalog distribution centers shall not be considered point-of-final-purchase retail facilities.
(cf: P.L.2003, c.166, s.2)
4. Section 6 of P.L.1996, c.26 (C.34:1B-129) is amended to read as follows:
6. a. The amount of the employment incentive awarded as a grant in each case shall be not less than 10% and not more than 50% of the withholdings of the business, or not less than 10% and not more than 30% of the estimated tax of partners of an eligible partnership whether paid directly by the partner or by the eligible partnership on behalf of such partner's account, or any combination thereof, and shall be subject to the provisions of sections 10 and 11 of this act. In no case shall the aggregate amount of the employment incentive grant awarded pursuant to a business employment incentive agreement entered into on or after July 1, 2003 exceed an average of $50,000 for all new employees over the term of the grant. The employment incentive shall be based on criteria developed by the authority after considering the following:
(1) The number of eligible positions to be created;
(2) The expected duration of those positions;
(3) The type of contribution the business can make to the long-term growth of the State's economy;
(4) The amount of other financial assistance the business will receive from the State for the project;
(5) The total dollar investment the business is making in the project;
(6) Whether the business is (a) a designated industry; or (b) a small medical practice;
(7) Impact of the business on State tax revenues; and
(8) Such other related factors determined by the authority.
b. A business may be eligible to be awarded a grant of up to 80% of the withholdings of the business or up to 50% of the estimated tax of the partners of an eligible partnership if the grant promotes smart growth and the goals, strategies and policies of the State Development and Redevelopment Plan established pursuant to section 5 of P.L.1985, c.398 (C.52:18A-200) as determined by and based upon criteria promulgated by the authority following consultation with the Department of Community Affairs, Office of Smart Growth.
c. The term of the grant shall not exceed 10 years.
d. At the discretion of the authority, the grant may apply to new employees or partners in eligible positions created during the base years, and during the remainder of the term of the grant.
(cf: P.L.2003, c.166, s.4)
5. Section 13 of P.L.1996, c.26 (C.34:1B-136) is amended to read as follows:
13. The authority shall establish an application fee for a grant application and service fees payable by each business which is a grant recipient to pay the costs of the administration of the program.
The application fees and service fees established by the authority for small medical practices shall be no more than twenty percent of the amount otherwise prescribed for businesses pursuant to section 14 of P.L.1996, c.26 (C.34:1B-137).
(cf: P.L.1996, c.26, s.13)
6. This act shall take effect immediately and apply to business employment incentive agreements with effective dates occurring on or after the date of enactment.
STATEMENT
The bill adjusts the business employment incentive program to allow certain small medical practices to qualify for program participation. The purpose of the bill is to encourage the growth of small medical practices and provide an incentive for small medical practices to expand their workforce.
Administered by the New Jersey Economic Development Authority (EDA), the current business employment incentive program provides grants to qualified employers that are expanding their workforce. The amount of the grant is based on a percentage of the withholding paid by a qualified employer for new employees under the State's personal income tax. The withholding percentage varies from ten percent to 80 percent depending upon the type of entity involved and a number of economic development variables that are considered by the EDA.
However, to qualify for a grant under the current program a small medical practice has to create at least 25 new jobs in the first two complete calendar years after formally entering into the program. Given the scale of a small medical practice, which is anchored by five or fewer licensed physicians or podiatrists, the addition of 25 new jobs inside of two years is more likely aspirational than attainable.
In recognition of this reality and to encourage the expansion of small medical practices in New Jersey, the bill adjusts the new job requirement for small medical practices. Specifically, the bill allows a qualified small medical practice to participate in the program by creating five or more new positions within the first five complete calendar years following formal entry into the program.
The bill also makes two other adjustments to facilitate the participation of small medical practices in the program. The bill reduces the programmatic application and service fees to be paid by small medical practices to an amount not exceeding twenty percent of the standing fee schedule. Additionally, the bill exempts small medical practices from the prevailing wage requirements otherwise attached to the program.
The bill is scheduled to apply to program agreements with effective dates occurring on or after the date of enactment.
