Bill Text: NJ A430 | 2012-2013 | Regular Session | Introduced
Bill Title: Establishes New Jersey Borough Enterprise Zone Program to encourage business development in small, highly developed municipalities.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2012-03-12 - Reviewed by the Sales Tax Review Commission recommend to not enact [A430 Detail]
Download: New_Jersey-2012-A430-Introduced.html
STATE OF NEW JERSEY
215th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2012 SESSION
Sponsored by:
Assemblywoman MARY PAT ANGELINI
District 11 (Monmouth)
Assemblyman DAVID P. RIBLE
District 30 (Monmouth and Ocean)
SYNOPSIS
Establishes New Jersey Borough Enterprise Zone Program to encourage business development in small, highly developed municipalities.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act creating the New Jersey Borough Enterprise Zone Program, amending P.L.1983, c.303, and supplementing chapter 27H of Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) This act shall be known and may be cited as the "New Jersey Borough Enterprise Zone Program."
2. (New section) The Legislature finds and declares that:
a. Few urban business development programs have proven more successful than New Jersey's urban enterprise zone program, which, since its inception in 1985, has resulted in the creation of over 100,000 new jobs statewide;
b. The current program emphasizes unemployment in its definition of which municipalities may be designated as urban enterprise zones, but does not consider the capacity of municipalities to grow and generate new economic development;
c. Those municipalities which are smaller and substantially developed face considerable obstacles in fostering new jobs and business growth and many would not otherwise qualify for assistance offered by such programs as the New Jersey Urban Enterprise Zone Program; and
d. Recognizing the difficulties faced by these municipalities and given the success of the existing UEZ program, it is in the long-term economic interest of this State to establish an urban economic development incentive program to encourage business growth in smaller, substantially developed municipalities.
3. (New section) As used in the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill):
"Authority" means the New Jersey Urban Enterprise Zone Authority established pursuant to section 4 of P.L.1983, c.303 (C.52:27H-63);
"Borough enterprise zone," "enterprise zone" or "zone" means a borough enterprise zone designated by the authority pursuant to the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill);
"Eligible area" means an area proposed for an enterprise zone in a preliminary zone development plan formulated pursuant to section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill);
"Qualified business" means any entity authorized to do business in the State of New Jersey which, at the time of designation as an enterprise zone, is engaged in the active conduct of a trade or business in that zone; or an entity which, after that designation but during the designation period, becomes newly engaged in the active conduct of a trade or business in that zone and has at least 25% of its full-time employees employed at a business location in the zone who are residents within the zone, within another zone or within a qualified municipality;
"Qualified municipality" means any municipality with a population of under 10,000 persons according to the latest decennial census which is over 85% developed according to the 1995 New Jersey Department of Environmental Protection land use/land cover data set;
"Zone development corporation" means a nonprofit corporation or association created or designated by the governing body of a qualified municipality to formulate and propose a preliminary zone development plan pursuant to section 7 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill) and to prepare, monitor, administer, and implement the zone development plan;
"Zone development plan" means a plan adopted by the governing body of a qualified municipality for the development of an enterprise zone therein, and for the direction and coordination of activities of the municipality, zone businesses and community organizations within the enterprise zone toward the economic betterment of the residents of the zone and the municipality;
"Enterprise zone assistance fund" or "assistance fund" means the fund created by section 22 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill).
4. Section 6 of P.L.1983, c.303 (C.52:27H-65) is amended to read as follows:
6. It shall be the duty of the authority to:
a. Promulgate criteria for the designation of zones pursuant to the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.);
b. Receive and evaluate applications of municipalities for the designation of zones;
c. Enter into discussions with applying municipalities regarding zone development proposals;
d. Act as agent of the State with respect to zone development plans, and in determining the State-furnished components to be included in those plans;
e. Designate zones in accordance with the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.) and promulgate rules and regulations necessary to carry out its duties under [this act] P.L.1983, c.303 (C.52:27H-60 et seq.);
f. Exercise continuing review and supervision of the implementation of zone development plans;
g. Receive and evaluate proposals of qualifying municipalities in which enterprise zones are designated for funding of projects and increased eligible municipal services from the enterprise zone assistance fund, and to certify annually to the State Treasurer amounts to be paid from the enterprise zone assistance fund to support approved projects and increased eligible municipal services in designated enterprise zones;
h. Assist and represent qualifying municipalities in any negotiations with, or proceedings before, other agencies of State Government or of the federal government, to secure necessary or appropriate assistance, support and cooperation of those agencies in the implementation of zone development plans in accordance with the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.) and any other applicable State or federal law;
i. Upon request, assist agencies of municipal government in gathering, compiling and organizing data to support an application for designation of a zone, and in identifying and coordinating the elements of a zone development proposal suitable for the zone sought to be designated;
j. Provide assistance to State and local government agencies relating to application for the security of permits, licenses and other regulatory approvals required by those agencies, to assure consideration and expeditious handling of regulatory requirements of any zone business, zone business association or zone neighborhood association; regulatory agencies of the State and its agencies and instrumentalities may agree to any simplification, consolidation or other liberalization of procedural requirements which may be requested by the authority and which is not inconsistent with provisions of law;
k. Assist the State in applying to, or entering into negotiations or agreements with, the federal government, for federal enterprise zone designations; [and]
l. Exercise continuing review of the implementation of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.), and to report annually to the Governor and the Legislature on the effectiveness of enterprise zones in addressing the conditions cited in [this act] P.L.1983, c.303 (C.52:27H-60 et seq.), including any recommendations for legislation to improve the effectiveness of operation of those zones. The report shall be submitted one year from the effective date of [this act] P.L.1983, c.303 (C.52:27H-60 et seq.), and annually thereafter; and
m. Administer the borough enterprise zone program established pursuant to the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill).
(cf: P.L.1983, c.303, s.6)
5. (New section) The authority shall designate borough enterprise zones from among those areas of qualified municipalities determined to be eligible pursuant to the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill). No more than one enterprise zone shall be designated in any one municipality. Any designation granted shall be for a period of 20 years, beginning with the year in which a zone is eligible for an exemption to the extent of 50% of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), and shall not be renewed at the end of that period. In designating enterprise zones the authority shall seek to avoid excessive geographic concentration of zones in any particular region of the State. Zone designation shall be approved or denied within 90 days of the date of the submittal of an application and zone development plan to the authority.
6. (New section) The governing body of any qualified municipality may, by ordinance, create or designate a nonprofit corporation established pursuant to the provisions of Title 15 of the Revised Statutes or Title 15A of the New Jersey Statutes to act as the zone development corporation for the municipality. Any zone development corporation so created or so designated shall include on its board of directors representatives of the government of the qualified municipality, members of the business community thereof, and representatives of community organizations in the municipality, and the total membership of the board of directors shall be broadly representative of businesses and communities within the municipality.
Notwithstanding the provisions of any other law to the contrary, a zone development corporation shall be considered to be a local development corporation for the purpose of receiving any State financial or technical assistance as may be available, and the creation of a zone development corporation shall not preclude a qualified municipality from creating another local development corporation for the municipality with responsibilities not related to the enterprise zone, nor preclude that other corporation from receiving State financial or technical assistance.
7. (New section) Before applying for designation of an enterprise zone, the municipal governing body shall cause a preliminary zone development plan to be formulated, either by a zone development corporation or by the governing body, with the assistance of those officers and agencies of the municipality as the governing body may see fit. The preliminary zone development plan shall set forth the boundaries of the proposed enterprise zone, findings of fact concerning the economic conditions existing in the area proposed for an enterprise zone, and the municipality's policy and intentions for addressing these conditions, and may include proposals respecting:
a. Utilizing the powers conferred on the municipality by law for the purpose of stimulating investment in and economic development of the proposed zone;
b. Utilizing State assistance through the provisions of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill) relating to exemptions from, and credits against, State taxes;
c. Securing the involvement in, and commitment to, zone economic development by private entities, including zone neighborhood associations, voluntary community organizations supported by residents and businesses in the zone;
d. Utilizing the powers conferred by law to revise municipal planning and zoning ordinances and other land use regulations as they pertain to the zone, in order to enhance the attraction of the zone to prospective developers;
e. Increasing the availability and efficiency of support services, public and private, generally used by and necessary to the efficient functioning of commercial and industrial facilities in the area, and the extent to which the increase or improvement is to be provided and financed by the municipal government or by other entities.
8. (New section) a. In designating eligible areas as enterprise zones, the authority shall accord preference to zone development plans which:
(1) Have the greatest potential for success in stimulating primarily new economic activity in the area;
(2) Demonstrate the most substantial and reliable commitments of resources by zone businesses, zone neighborhood associations, voluntary community organizations, and other private entities to the economic success of the zone; and
(3) Demonstrate the most substantial effort and commitment by the municipality to encourage economic activity in the area and to remove disincentives for job creation compatible with the fiscal condition of the municipality.
b. In addition to the considerations set forth in subsection a. of this section, the authority in evaluating a zone development plan for designation purposes shall consider:
(1) The likelihood of attracting federal assistance to projects in the eligible area, and of obtaining federal designation of the area as an enterprise zone for federal tax purposes;
(2) The adverse or beneficial effects of an enterprise zone located at the proposed area upon economic development activities or projects of State or other public agencies which are in operation, or are approved for operation, in the qualified municipality;
(3) The impact of the zone development plan upon the social, natural and historic environment of the eligible area; and
(4) The degree to which the implementation of the plan involves the relocation of residents from the eligible area, and the adequacy of commitments and provisions with respect thereto.
9. (New section) a. Any qualified municipality may propose any area set forth in the zone development plan as an enterprise zone. The municipality may then make written application to the authority to have the area selected for State and federal assistance offered to enterprise zones or either type of assistance. The application shall include the zone development plan adopted for the area and any other information as the authority may require.
b. Upon receipt of an application from the qualified municipality the authority shall review the application to determine whether the area described in the application qualifies for State assistance under the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill).
c. The authority shall complete its review within 90 days of receipt of an application, but may extend this time period by an additional 60 days if necessary. If the authority denies the application, it shall inform the municipality of that fact in writing setting forth the reasons for the denial.
d. The designation of an enterprise zone by the authority shall take effect upon the adoption by the qualified municipality of an ordinance accepting that designation.
10. (New section) Except as otherwise specified in the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill), a qualified business in an enterprise zone shall be eligible to receive from among those benefits authorized in sections 11 through 15 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill) as are determined by the authority. The authority shall state in writing to the qualified municipality at the time of designation its determinations as to which of those benefits are to apply in an enterprise zone.
11. (New section) Any qualified business subject to the provisions of the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), as employing a larger number of persons at a place of business located within an enterprise zone designated pursuant to the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill) than at all other places of business of the taxpayer within the State, shall be exempt from the net worth tax imposed pursuant to subsection (a) of section 5 of P.L.1945, c.162 (C.54:10A-5(a)), and from the tax imposed by subsection (f) of that section (C.54:10A-5(f)), for a period of 20 tax years from the date of designation of the enterprise zone, or for a period of 20 tax years from the date upon which the taxpayer is first subject to the provisions of the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), whichever date is later. The termination of the designation of an enterprise zone shall not terminate the exemption provided under this section if the exemption was granted prior to the end of the designation period. The provisions of this section are subject to the phase-out provisions of P.L.1982, c.55 (C.54:10A-4 et seq.).
12. (New section) Enterprise zone employee tax credits or enterprise zone investment tax credits provided under section 13 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill) shall not reduce a taxpayer's tax liability under the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.) in any tax year by more than 50% of the amount otherwise due, but either employee tax credits or investment tax credits remaining and unused in a tax year may be carried forward by the taxpayer to the next succeeding tax year and applied against 50% of the amount of tax otherwise due in that succeeding tax year.
13. (New section) Any qualified business subject to the provisions of the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), as actively engaged in the conduct of business from a location within an enterprise zone designated pursuant to the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill) which business at that location consists primarily of manufacturing or other business which is not retail sales or warehousing oriented, shall receive an enterprise zone employee tax credit against the amount of tax imposed under the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), as hereinafter provided:
a. A one-time credit of $1,500 for each new full-time, permanent employee employed at that location who is a resident of the qualified municipality in which the designated enterprise zone is located, or any other qualified municipality in which an urban enterprise zone is located, and who immediately prior to employment by the taxpayer was unemployed for at least 90 days, or was dependent upon public assistance as the primary source of income;
b. A one-time credit of $500 for each new full-time, permanent employee employed at that location who is a resident of a qualified municipality in which a designated enterprise zone is located, or any other qualified municipality in which an urban enterprise zone is located, who does not meet the requirements of subsection a. of this section, and who was not, immediately prior to employment by the taxpayer, employed at a location within the qualified municipality;
c. A qualified business which is not entitled to an employee tax credit under this section, but meets the eligibility criteria pursuant to the provisions of c. of section 20 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill), shall receive a one-time credit in an amount equal to 8% of each new investment made by the qualified business in the enterprise zone under an agreement approved by the authority.
This credit shall be applied against the taxpayer's corporation business tax liability subject to the limitations and carry forward provisions set forth in section 12 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill); provided, however, that a qualified business shall not claim an employee tax credit and an investment tax credit authorized pursuant to this subsection in the same year regardless of whether those credits were earned for the tax year or carried forward from a previous year.
d. The enterprise zone employee tax credit shall be allowed in the tax year immediately following the tax year in which the new full-time, permanent employee was first employed by the taxpayer, and shall be permitted in any tax year of a 20 year period from the date of designation of the enterprise zone, or of a period of 20 tax years from the date within that designation period upon which the taxpayer is first subject to the provisions of the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), whichever date is later and the termination of the designation of an enterprise zone at the end of the designation period shall not terminate the eligibility period provided under this section;
e. A tax credit shall be permitted under this section only for those new full-time, permanent employees who have been employed for at least six continuous months by the taxpayer during the tax year for which the tax credit is claimed.
f. A newly employed employee shall not be deemed a new full-time, permanent employee for the purposes of this section unless the total number of full-time, permanent employees, including the newly employed employee, employed by the employer in the zone during the calendar year exceeds the greatest number of full-time, permanent employees employed in the zone by the employer during any prior calendar year during the period commencing with the date of zone designation.
14. (New section) Retail sales of personal property (except motor vehicles and energy) and sales of services (except telecommunications and utility services) to a qualified business for the exclusive use or consumption of such business within an enterprise zone are exempt from the taxes imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
15. (New section) Receipts of retail sales, except retail sales of motor vehicles, of alcoholic beverages as defined in the "alcoholic beverage tax law," R.S.54:41-1 et seq., of cigarettes as defined in the "Cigarette Tax Act," P.L.1948, c.65 (C.54:40A-1 et seq.), of manufacturing machinery, equipment or apparatus, and of energy, made by a certified vendor from a place of business owned or leased and regularly operated by the vendor for the purpose of making retail sales, and located in a designated enterprise zone established pursuant to the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill), are exempt to the extent of 50% of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
Any vendor, which is a qualified business having a place of business located in a designated enterprise zone may apply to the Director of the Division of Taxation in the Department of the Treasury for certification pursuant to this section. The director shall certify a vendor if he shall find that the vendor owns or leases and regularly operates a place of business located in the designated enterprise zone for the purpose of making retail sales, that items are regularly exhibited and offered for retail sale at that location, and that the place of business is not utilized primarily for the purpose of catalogue or mail order sales. The certification under this section shall remain in effect during the time the business retains its status as a qualified business meeting the eligibility criteria of section 20 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill). However, the director may at any time revoke a certification granted pursuant to this section if he shall determine that the vendor no longer complies with the provisions of this section. Notwithstanding any other provisions of law to the contrary, except as provided in subsection b. of section 6 of P.L.1996, c.124 (C.13:1E-116.6), after first depositing 10% of the gross amount of all revenues received from the taxation of retail sales made by certified vendors from business locations in designated enterprise zones to which this exemption shall apply into the account created in the name of the authority in the enterprise zone assistance fund pursuant to section 22 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill), the remaining 90% shall be deposited immediately upon collection by the Department of the Treasury, as follows:
a. In the first six-year period during which the State shall have collected reduced rate revenues within an enterprise zone, 66.67% of such revenues shall be deposited in the enterprise zone assistance fund created pursuant to section 22 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill) and 33.33% shall be paid to the school district which is coterminous with the municipality in which the enterprise zone is situated;
b. In the second six-year period during which the State shall have collected reduced rate revenues within an enterprise zone, 33 1/3% of all those revenues shall be deposited in the enterprise zone assistance fund, 33 1/3% shall be paid to the school district which is coterminous with the municipality in which the enterprise zone is situated, and 33 1/3% shall be deposited in the General Fund;
c. In the third eight-year period during which the State shall have collected reduced rate revenues within an enterprise zone, 16.665% of all those revenues shall be deposited in the enterprise zone assistance fund, 16.665% shall be paid to the school district which is coterminous with the municipality in which the enterprise zone is situated, and 66.67% shall be deposited in the General Fund.
The revenues required to be deposited in the enterprise zone assistance fund under this section shall be used for the purposes of that fund and for the uses prescribed in section 22 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill), subject to annual appropriations being made for those purposes and uses.
16. (New section) The Director of the Division of Taxation in the Department of the Treasury shall promulgate such rules and regulations as may be necessary to effectuate the provisions of sections 11 through 15 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill).
17. (New section) The New Jersey Department of Labor shall develop and coordinate the delivery of skill training programs necessary to meet the needs of qualified businesses.
18. (New section) In order to carry out the purposes of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill), any municipality or State agency may exempt designated enterprise zones from the provisions of any regulation, in whole or in part, promulgated by that entity or agency, but enterprise zones shall not be exempted from the provisions of any regulation, except upon finding by the State or municipal agency, as appropriate, that the exemption would not endanger the health and safety of the citizens and residents of the State.
19. (New section) The authority shall conduct a continuing review of all State regulations and shall recommend to any appropriate administrative body the modification or waiver of regulations promulgated by that agency in order to contribute to the implementation of "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill).
20. (New section) a. To be eligible for any of the incentives provided under the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill), a qualified business must demonstrate to the satisfaction of the authority that:
(1) The business will create new employment in the municipality;
(2) The business will not create unemployment in other areas of the State, including the municipality in which the zone is located.
b. For the purposes of eligibility for the incentives provided under sections 11 through 15 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill), a qualified business shall not be required to meet the requirements of paragraph (1) of subsection a. of this section, if:
(1) At the time of designation of the enterprise zone or at the time zone designation is extended by expansion to the location of a business, the qualified business had been engaged in the active conduct of a trade or business in that zone or in the added area of that zone for at least one year prior to that designation or expansion;
(2) The qualified business employs fewer than 50 employees; and
(3) The qualified business has entered into an agreement, approved by the authority, with the governing body of the qualified municipality in which the enterprise zone is located, under which the qualified business agrees to undertake an investment in the enterprise zone in lieu of the employment of new employees. An investment permitted under an agreement shall be in an amount and of a nature which the municipal governing body and the authority find shall contribute substantially to the economic attractiveness of the enterprise zone, and may include, but shall not be limited to:
(a) The improvement of the exterior appearance or customer facilities of the property constituting the place of business of the qualified business within the zone; provided that the improvement is of a permanent nature and not required to meet existing ordinances or code regulations; or
(b) Monetary contributions to the municipality to undertake improvements to increase the safety or attractiveness of the zone to businesses which may wish to locate there or to consumer visitors to the zone, including, but not limited to litter clean-up and control, landscaping, parking areas and facilities, recreational and rest areas and facilities, repair or improvements to public streets, curbing, sidewalks and pedestrian thoroughfares, street lighting, or increased police, fire or sanitation services in the enterprise zone.
In order to meet the requirements of paragraph (3) of this subsection, an investment shall be in an amount no less than $5,000 if the qualified business employs 10 or fewer employees, or if the qualified business employs more than 10 employees, not less than the amount produced by multiplying the number of employees employed by the qualified business by $500. A qualified business shall be required to make an investment for each year the qualified business does not meet the requirements of paragraph (1) of subsection a. of this section. In order to receive the incentives permitted by this section, the business shall provide written evidence of the investment to the authority.
21. (New section) Any firm that receives any benefits set forth in sections 11 through15 of "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill) shall annually certify to the authority that it is a qualified business under section 3 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill). Failure to supply the certification or willful falsification of data in the certification will result in a fine of not more than ten times the benefits received, nor more than two years in prison.
22. (New section) a. There is created an enterprise zone assistance fund to be held by the State Treasurer, which shall be the repository for all moneys required to be deposited therein under section 15 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill) or moneys appropriated annually to the fund. All moneys deposited in the fund shall be held and disbursed in the amounts necessary to fulfill the purposes of this section and subject to the requirements hereinafter prescribed. The State Treasurer may invest and reinvest any moneys in the fund, or any portion thereof, in legal obligations of the United States or of the State or of any political subdivision thereof. Any income from, interest on, or increment to moneys so invested or reinvested shall be included in the fund.
The State Treasurer shall maintain separate accounts for each enterprise zone designated under the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill), and one in the authority's name for the administration of the New Jersey Borough Urban Enterprise Zone Program. The State Treasurer shall credit to each account an amount of the moneys deposited in the fund equal to the amount of revenues collected from the taxation of retail sales made in the zone and appropriated to the enterprise zone assistance fund, or that amount of moneys appropriated to the fund and required to be credited to the enterprise zone account of the qualified municipality pursuant to section 15 of the "New Jersey Borough Enterprise Zone Program," P.L. , c. (C. ) (pending before the Legislature as this bill).
The State Treasurer shall promulgate the rules and regulations necessary to govern the administration of the fund for the purposes of this section.
b. The enterprise zone assistance fund shall be used for the purpose of assisting qualified municipalities in which enterprise zones are designated in undertaking public improvements, economic development projects and in upgrading eligible municipal services in designated enterprise zones.
c. The governing body of a qualified municipality in which an enterprise zone is designated and the zone development corporation created or designated by the municipality for that enterprise zone may, by resolution jointly adopted after public hearing, propose to undertake a project for the public improvement of the enterprise zone or to increase eligible municipal services in the enterprise zone, and to fund that project or increase in eligible municipal services from moneys deposited in the enterprise zone assistance fund and credited to the account maintained by the State Treasurer for the enterprise zone.
The proposal so adopted shall set forth a plan for the project or for the increase in eligible municipal services and shall include:
(1) A description of the proposed project or of the municipal services to be increased;
(2) An estimate of the total project costs, or of the total costs of increasing the municipal services, and an estimate of the amounts of funding necessary annually from the enterprise zone account;
(3) A statement of any other revenue sources to be used to finance the project or to fund the increase in eligible municipal services;
(4) A statement of the time necessary to complete the project, or of the time during which the increased municipal services are to be maintained;
(5) A statement of the manner in which the proposed project or increase in municipal services furthers the municipality's policy and intentions for addressing the economic and social conditions existing in the area of the enterprise zone as set forth in the zone development plan approved by the authority; and
(6) A description of the financial and programmatic controls and reporting mechanisms to be used to guarantee that the funds will be spent in accordance with the plan and that the project or increased municipal service will accomplish its purpose.
As used in this section, "project" means an activity funded by the zone assistance fund through the qualified municipality and implemented by the zone development corporation, including the purchasing, leasing, condemning, or otherwise acquiring of land or other property, or an interest therein, in the enterprise zone or as necessary for a right-of-way or other easement to or from the enterprise zone; the relocating and moving of persons or businesses displaced by the acquisition of land or property; the rehabilitation and redevelopment of land or property, including demolition, clearance, removal, relocation, renovation, alteration, construction, reconstruction, installation or repair of a lot or a building, street, highway, alley, utility, service or other structure or improvement which will lead to increased economic activity within the zone; the acquisition, construction, reconstruction, rehabilitation, or installation of public facilities and improvements, except buildings and facilities for the general conduct of government and schools; the establishment of revolving loan or grant programs for qualified businesses in the zone to encourage private investment and job creation, matching grant programs for the establishment or operation of pedestrian malls, special improvement districts and tax increment districts, or other appropriate entity; marketing, advertising and special event activities that will lead to increased economic activity or encourage private investment and job creation in the zone, but not including the expenditures therefor which are required to be reported pursuant to "The New Jersey Campaign Contributions and Expenditures Reporting Act," P.L.1973, c.83 (C.19:44A-1 et seq.), and the costs associated therewith including the costs of an administrative appraisal, economic and environmental analyses, environmental remediation, engineering, planning, design, architectural, surveying or other professional or managerial services
As used in this section, "eligible municipal services" means the hiring of additional policemen or firemen assigned duties in the enterprise zone, or the purchasing or leasing of additional police or fire vehicles, equipment or apparatus to be used for the provision of augmented or upgraded public safety services in the enterprise zone and its immediate vicinity.
d. Upon adoption by the governing body of the qualified municipality and by the zone development corporation, the proposal shall be sent to the authority for its evaluation and approval. The authority shall approve the proposal if it shall find:
(1) In the case of a project, that the proposed project furthers the policy and intentions of the zone development plan approved by the authority, and that the estimated annual payments for the project from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account;
(2) In the case of an increase in eligible municipal services, that the proposal furthers the policy and intentions of the zone development plan approved by the authority; that the qualified municipality has furnished satisfactory assurances that the additional policemen or firemen to be hired, or the additional vehicles, equipment or apparatus to be purchased or leased, shall be used to augment or upgrade public safety in the enterprise zone, and shall not be used in other areas of the municipality; that the qualified municipality shall annually appropriate for the increased eligible municipal services an amount equal to 20% of the amount of annual payments for the eligible municipal services from the enterprise zone account and shall not request for the increased eligible municipal services an amount equal to more than 35% of the amount of annual payments into the enterprise zone account; and that the estimated annual payments for the eligible municipal services from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account.
e. If the authority shall approve the proposal, it shall annually, upon its receipt of a written statement from the governing body of the qualified municipality and the zone development corporation, certify to the State Treasurer the amount to be paid in that year from the enterprise zone account in the enterprise zone assistance fund with respect to each project or increase in eligible municipal services approved. The authority may at any time revoke its approval of a project or an increase in eligible municipal services if it finds that the annual payments made from the enterprise zone assistance fund are not being used as required by this section.
f. Upon certification by the authority of the annual amount to be paid to a qualifying zone with respect to any project or increase in eligible municipal services, the State Treasurer shall pay in each year to the qualified municipality from the amounts deposited in the enterprise zone assistance fund the amount so certified, within the limits of the amounts credited to the enterprise zone account of the qualified municipality.
g. An amount not to exceed one-third of the amount deposited in the account created in the name of the authority in the enterprise zone assistance fund shall be used by the authority for the coordination and administration of the New Jersey Borough Enterprise Zone Program throughout the State, including but not limited to costs for personnel, operating expenses and marketing. The balance of the remaining amount shall be distributed to qualified municipalities in proportion to each municipality's contribution to the enterprise zone assistance fund for the coordination and administration of the program within the municipality, including but not limited to costs for personnel, operating expenses and marketing.
23. This act shall take effect 180 days next following enactment.
STATEMENT
This bill, the "New Jersey Borough Enterprise Zone Program," would permit the establishment of enterprise zones by qualified municipalities. The bill's purpose is to encourage business development in small municipalities which are substantially developed.
The bill authorizes the New Jersey Urban Enterprise Zone (UEZ) Authority to designate an unspecified number of zones in those municipalities of under 10,000 population which are over 85 percent developed according to 1995 data published by the Department of Environmental Protection. This program is designed to provide benefits similar to the existing UEZ program in order to spur business development in highly developed municipalities with limited growth potential owing to a lack of available land.
The bill requires the formulation and adoption of a zone development plan. The qualified municipality would create a zone development corporation, which shall include on its board of directors representatives of the municipal government, the business community, and community organizations. The zone development corporation is to be considered a local development corporation for the purposes of receiving State financial and technical assistance.
The zone development corporation is to formulate and propose a preliminary zone development plan to the municipal governing body. The plan is to set forth the municipality's findings concerning the economic conditions existing in the area and the municipality's intentions for addressing them.
For a business to be eligible to receive any of the benefits offered under the bill, at least 25 percent of the work force of a firm must reside within the zone or municipality. Fiscal incentives include elimination of net worth tax liability and an exemption from sales tax for the purchase of materials by a business to construct or expand facilities in a UEZ. Other incentives are offered to employers who hire new employees who meet the specified eligibility criteria.
The Department of Labor is to develop and coordinate a skill training program to meet the needs of private sector employers. It is to develop educational programs targeted to employers' needs, and coordinate recruiting, screening, testing and training programs.
In addition, the bill provides for a partial exemption from the "Sales and Use Tax Act" for retail sales made within designated enterprise zones, except for sales of motor vehicles and certain manufacturing equipment. The effective sales tax within the enterprise zone would be three percent for the first six years of designation, two percent for the subsequent six years of designation, and one percent for the final eight years of designation.
In the first six years of designation, 75 percent of the tax revenues collected in the zone are to be paid into the UEZ assistance fund and 25 percent, to the school district which is coterminous with the municipality in which the enterprise zone is situated.
In the second six years of designation, the two percent sales tax revenues are to be shared equally between the UEZ assistance fund and the school district and the remaining one percent is to be paid into the General Fund.
In the final eight years of designation, two percent of the sales tax proceeds is to be paid into the General Fund and the remaining one percent is to be divided equally between the UEZ assistance fund and the school district.
An enterprise zone assistance fund is established to provide municipalities in which enterprise zones are designated with assistance in undertaking public improvements and in upgrading public safety services in the enterprise zone area. Moneys for the fund come from the dedication of the revenues from the sales tax levied in the zone. The public improvement projects and programs to increase public safety services are to be approved by the New Jersey Enterprise Zone Authority as furthering the zone development plan for the enterprise zone. The increased public safety services may consist of hiring additional police or firefighters assigned duties in the enterprise zone or the purchasing or leasing of additional police or fire vehicles, equipment or apparatus. The public safety service funding requires a 20 percent municipal match.
