Bill Text: NJ A3436 | 2014-2015 | Regular Session | Introduced
Bill Title: Provides loans and tax credits to businesses for costs incurred in purchase and installation of certain equipment to mitigate damage from natural disasters.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2014-06-23 - Introduced, Referred to Assembly Environment and Solid Waste Committee [A3436 Detail]
Download: New_Jersey-2014-A3436-Introduced.html
Sponsored by:
Assemblyman CARMELO G. GARCIA
District 33 (Hudson)
Assemblyman TIMOTHY J. EUSTACE
District 38 (Bergen and Passaic)
SYNOPSIS
Provides loans and tax credits to businesses for costs incurred in purchase and installation of certain equipment to mitigate damage from natural disasters.
CURRENT VERSION OF TEXT
As introduced.
An Act providing loans and tax credits to businesses for costs incurred in the purchase and installation of certain equipment, supplementing P.L.1974, c.80 (C.34:1B-1 et seq.), P.L.1945, c.162 (C.54:10A-1 et seq.), and chapter 4 of Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. The authority shall establish, maintain, and administer a loan program for the purpose of providing loans to eligible businesses consistent with the purposes of this section.
b. As determined by the authority, a loan may be made to an eligible business and may be applied to any aspect of the business that supports the business's purchase of equipment that has technology certified by the United States Department of Defense to mitigate damage from a natural disaster.
c. A business seeking to participate in the loan program shall submit an application in a manner as the authority shall require. In order to receive a loan, a business, at the time of application, shall provide proof that it is an eligible business. The application shall include information as the authority shall determine is necessary in consideration of the purposes of this section. The authority shall review and may approve an application for a business's participation in the loan program.
d. Upon receiving approval of a business's application by the authority, the eligible business shall enter into a loan agreement with the authority. The loan agreement shall bear interest at rates and terms deemed appropriate by the authority, contain other terms and conditions considered appropriate by the authority that are consistent with the provisions of this section, and be consistent with rules and regulations promulgated by the authority pursuant to subsection f. of this section.
e. The authority may, in its discretion, either through the terms of the loan agreement made pursuant to subsection d. of this section, or through the adoption of rules and regulations pursuant to subsection f. of this section:
(1) require an eligible business that receives a loan under the loan program administered pursuant to this section to submit an audited financial statement to the authority in order to ensure the eligible business's continued vitality;
(2) establish terms governing the incidence of default by an eligible business that receives a loan under the loan program administered pursuant to this section; and
(3) consider, along with other criteria that the authority deems appropriate, whether the eligible business commits to increasing its full-time employment level in the State.
f. The authority shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as may be necessary to effectuate the purposes of this section.
g. As used in this section:
"Authority" means the New Jersey Economic Development Authority established by section 4 of P.L.1974, c.80 (C.34:1B-4).
"Eligible business" means a business entity that, at the time of application for participation in the loan program established pursuant to this section: (1) is independently owned and operated; (2) operates primarily within this State; (3) uses equipment or apparatus that has technology certified by the United States Department of Defense to mitigate damage from a natural disaster at a building located in this State; and (4) satisfies other criteria that may be established by the authority.
"Natural disaster" means any emergency due to a weather-related event causing damage of sufficient severity and magnitude that results in a declaration of a state of emergency by the Governor or the President of the United States.
2. a. A taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 10 percent of the amount paid for the purchase and installation of equipment or apparatus deemed eligible equipment.
b. To qualify for the tax credit allowed pursuant to this section, the taxpayer shall provide to the director a certification from the United States Department of Defense that the equipment purchased and installed by the taxpayer is deemed eligible equipment and qualifies for the tax credit. The certification shall specifically indicate the date of purchase, the date of installation, a description of the equipment and how it is used or consumed in the taxpayer's business, trade, or occupation, and the amount paid for the purchase and installation of the eligible equipment.
c. The first privilege period in which a taxpayer may use a tax credit allowed under this section is the privilege period in which the taxpayer's application made and filed for a certification from the director is granted.
d. The amount of any unused tax credit may be carried forward, if necessary, for use in each of the seven privilege periods following the privilege period for which the tax credit is allowed.
e. The order of priority of the application of the tax credit allowed pursuant to this section and any other tax credits allowed by law shall be as prescribed by the director. The amount of the credit applied for pursuant to this section 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 against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), shall not exceed 50 percent of the tax liability otherwise due and shall not reduce the tax liability 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).
f. A tax credit shall not be allowed pursuant to this section for the purchase and installation of eligible equipment which is included in the calculation of another credit allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for the same or a prior privilege period by the same or another taxpayer.
g. As used in this section:
"Eligible equipment" means equipment or apparatus that has technology certified by the United States Department of Defense to mitigate damage from a natural disaster and is used by a business at a building located in this State.
"Natural disaster" means any emergency due to a weather-related event causing damage of sufficient severity and magnitude that results in a declaration of a state of emergency by the Governor or the President of the United States.
3. a. A taxpayer shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 10 percent of the amount paid for the purchase and installation of equipment or apparatus deemed eligible equipment.
b. To qualify for the tax credit allowed pursuant to this section, the taxpayer shall provide to the director a certification from the United States Department of Defense that the equipment purchased and installed by the taxpayer is deemed eligible equipment and qualifies for the tax credit. The certification shall specifically indicate the date of purchase, the date of installation, a description of the equipment and how it is used or consumed in the taxpayer's business, trade, or occupation, and the amount paid for the purchase and installation of the eligible equipment.
c. The first taxable year in which a taxpayer may claim a tax credit allowed under this section is the taxable year in which the taxpayer's application made and filed for a certification from the director is granted.
d. The amount of any unused tax credit may be carried forward, if necessary, for use in each of the seven taxable years following the taxable year for which the tax credit is allowed.
e. The order of priority of the application of the tax credit allowed pursuant to this section and any other tax credits allowed by law shall be as prescribed by the director. The amount of the credit applied for pursuant to this section against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, together with any other credits allowed against the tax imposed pursuant to N.J.S.54:A:1-1 et seq., shall not exceed 50 percent of the taxpayer's liability for tax for the taxable year.
f. A tax credit shall not be allowed pursuant to this section for the purchase and installation of eligible equipment which is included in the calculation of another credit allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for the same or a prior taxable year by the same or another taxpayer.
g. As used in this section:
"Eligible equipment" means equipment or apparatus that has technology certified by the United States Department of Defense to mitigate damage from a natural disaster and is used by a business at a building located in this State.
"Natural disaster" means any emergency due to a weather-related event causing damage of sufficient severity and magnitude that results in a declaration of a state of emergency by the Governor or the President of the United States.
4. This act shall take effect immediately. Sections 2 and 3 shall apply to amounts paid in privilege periods and taxable years beginning on or after the date of enactment.
STATEMENT
This bill requires the New Jersey Economic Development Authority (authority) to establish, maintain, and administer a loan program for the purpose of providing loans to businesses to underwrite the costs incurred in the business's purchase and installation of eligible equipment. Under the bill, "eligible equipment" means equipment or apparatus that has technology certified by the United States Department of Defense to mitigate damage from a natural disaster and is used by a business at a building located in this State.
In order to receive a loan, a business seeking to participate in the loan program is to submit an application in a manner as the authority requires. A business, at the time of application, is to provide proof that it is an eligible business and enter into a loan agreement with the authority. A loan agreement is to bear interest at rates and terms deemed appropriate by the authority, contain other terms and conditions considered appropriate by the authority that are consistent with the purposes of the bill, and be consistent with rules and regulations promulgated by the authority to implement the loan program.
In administering the loan program, the bill authorizes the authority, in its discretion to: 1) require an eligible business that receives a loan to submit an audited financial statement to the authority in order to ensure the business's continued vitality; 2) establish terms governing the incidence of default by an eligible business that receives a loan; and 3) consider whether the business commits to increasing its full-time employment level in the State.
This bill provides tax credits to businesses for 10 percent of the costs incurred in purchase and installation of eligible equipment under the corporation business tax and the gross income tax. The bill provides that the first privilege period or taxable year in which a taxpayer may use the tax credit is the privilege period or taxable year in which the certification is granted. The bill also provides that the amount of any unused tax credit may be carried forward, if necessary to each of the seven privilege periods or taxable years following the period or year in which the tax credit is first allowed, but stipulates that a tax credit is not allowed if the eligible equipment is used to secure another tax credit in the same or prior period or year by the same or another taxpayer.
