Bill Text: NJ A4421 | 2010-2011 | Regular Session | Introduced
Bill Title: Establishes a Health Facility Reuse and Community Revitalization program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-12-08 - Introduced, Referred to Assembly Budget Committee [A4421 Detail]
Download: New_Jersey-2010-A4421-Introduced.html
Sponsored by:
Assemblywoman CONNIE WAGNER
District 38 (Bergen)
SYNOPSIS
Establishes a Health Facility Reuse and Community Revitalization program.
CURRENT VERSION OF TEXT
As introduced.
An Act establishing a Health Facility Reuse and Community Revitalization program, supplementing P.L.1974, c.80 (C.34:1B-1 et seq.) and Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Health Facility Reuse and Community Revitalization Act."
2. As used in sections 1 through 9 of P.L. , c. (C. ) (pending before the Legislature as this bill):
"Applicant" means a private entity proposing to enter into a redevelopment incentive grant agreement in connection with a vacant health facility redevelopment project.
"Authority" means the New Jersey Economic Development Authority established by section 4 of P.L.1974, c. 80 (C.34:1B-4).
"Health facility" means a hospital licensed by the Department of Health and Senior Services or a developmental center operated by the Department of Human Services and listed in R.S.30:1-7.
"Incentive grant" means reimbursement of all or a portion of the project financing gap of a vacant health facility redevelopment project through the Health Facility Reuse and Community Revitalization program established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"New full-time employee" means a person employed by a private or public entity at the site of a vacant health facility redevelopment project: (1) who shall have entered such employment after the completion of the vacant health facility redevelopment project; (2) who fills a position that the authority shall have determined (a) is permanent, and (b) did not exist in this State prior to the completion of the vacant health facility redevelopment project; (3) who works at least a 35 hour week in exchange for consideration, or renders any other standard service generally accepted by custom or practice as full-time employment; and (4) whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.
"Project financing gap" means the part of the total vacant health facility redevelopment project cost, including return on investment, that remains to be financed after all other sources of capital have been accounted for, including, but not limited to (1) capital contributed by the developer of the project, which shall not be less than 20 percent of the total project cost, and (2) investor or financial entity capital or loans as to which the developer, after making all good faith efforts to raise additional capital, certifies that additional capital cannot be raised from other sources.
"Redevelopment incentive grant agreement" means an agreement between the State Treasurer and the authority and a developer under which, in exchange for the proceeds of an incentive grant, the developer agrees to undertake a vacant health facility redevelopment project.
"Revenue increment base" means the amounts of all eligible revenues from sources within the vacant health facility site in the calendar year preceding the year in which the redevelopment incentive grant agreement is executed, as certified by the State Treasurer for those State revenue sources set forth in subsection a. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Vacant health facility redevelopment project" means a specific work or improvement, including lands, buildings, improvements, real and personal property or any interest therein, including an interest in lands under water, riparian rights, space rights and air rights, acquired, owned, developed or redeveloped, constructed, reconstructed, rehabilitated or improved, undertaken by a developer on a vacant health facility site.
"Vacant health facility site" means a location where a vacant hospital or vacant developmental center currently exists. A hospital shall be considered vacant if at least 80 percent of that facility has not been open to the public or utilized to serve any patients within the preceding calendar year. A developmental center shall be considered vacant if the Department of Human Services certifies that no clients currently reside at, or receive any service at, the developmental center and that the department does not intend to utilize the developmental center to serve clients in the future.
3. a. The New Jersey Economic Development Authority, in consultation with the State Treasurer, shall establish a Health Facility Reuse and Community Revitalization program for the purpose of encouraging the redevelopment of vacant health facility sites within the State, through the provision of incentive grants to reimburse developers for certain project financing gap costs.
b. A developer shall be permitted to submit an application for an incentive grant under the Health Facility Reuse and Community Revitalization program during the five year period that begins on the first day of the tenth month following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and ends on the last day of the 69th month following that date of enactment.
4. a. Up to the limits established in subsection b. of this section and in accordance with a redevelopment incentive grant agreement, the State Treasurer shall pay to the developer incremental State revenues directly realized from businesses operating on the vacant health facility redevelopment project premises from the following taxes: the tax imposed under the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), the tax imposed on marine insurance companies pursuant to R.S.54:16-1 et seq., the tax imposed on insurers generally, pursuant to P.L.1945, c.132 (C.54:18A-1 et seq.), the public utility franchise tax, public utilities gross receipts tax and public utility excise tax imposed on sewerage and water corporations pursuant to P.L.1940, c.5 (C.54:30A-49 et seq.), the tax derived from net profits from business, a distributive share of partnership income, or a pro rata share of S corporation income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., the tax derived from a business at the site of a vacant health facility redevelopment project that is required to collect the tax pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), the tax imposed pursuant to P.L.1966, c.30 (C.54:32B-1 et seq.) on the purchase of materials used for the remediation, the construction of new structures, or the construction of new residences at the site of a vacant health facility redevelopment project, the hotel and motel occupancy fees imposed pursuant to section 1 of P.L.2003, c.114 (C.54:32D-1), or the portion of the fee imposed pursuant to section 3 of P.L.1968, c.49 (C.46:15-7) derived from the sale of real property at the site of the vacant health facility redevelopment project and paid to the State Treasurer for use by the State, that is not credited to the "Shore Protection Fund" or the "Neighborhood Preservation Nonlapsing Revolving Fund," known as the "New Jersey Affordable Housing Trust Fund," pursuant to section 4 of P.L.1968, c.49 (C.46:15-8).
b. Up to 50 percent of the projected annual incremental revenues for a fiscal year may be pledged towards an incentive grant.
c. An additional 25 percent of the projected annual incremental revenues may be pledged for any fiscal year for which the authority certifies that the number of new full-time employees exceeds: (1) the average total employment of the three hospitals that are geographically closest to the vacant health facility site, if the health facility to be redeveloped is a hospital; or (2) the average number of individuals employed at all of the developmental centers within the State that are operated by the Department of Human Services, if the health facility to be redeveloped is a developmental center.
d. An additional 10 percent of the projected annual incremental revenues may be pledged for any fiscal year for which the authority certifies that more than 50 percent of the new full-time employees receive an annual salary greater than the Statewide average salary as shall be determined by the Department of Labor and Workforce Development in consultation with the New Jersey Division of Taxation.
e. All administrative costs associated with the incentive grant, including costs associated with the review of incentive grant applications, shall be assessed to the applicant and be retained in the State General Fund by the State Treasurer as an offset against annual incentive grant payments.
f. The incremental revenue for the revenues listed in subsection a. of this section shall be calculated as the difference between the amount collected in any fiscal year from any eligible revenue source included in the State redevelopment incentive grant agreement, less the revenue increment base for that eligible revenue.
g. No incentive grant, in combination with any other State grant, State tax credit, or other State financial assistance, shall cause the State to retain less than 15 percent of the annual incremental revenue from the sources listed in subsection a. of this section.
5. a. The authority, in consultation with the State Treasurer, shall promulgate an incentive grant application form and procedure for the Health Facility Reuse and Community Revitalization program. A completed incentive grant application shall be submitted to the Chief Executive Officer of the authority, and shall be subject to the approval of the authority, after the review and recommendation of the incentive grant by the chief executive officer, in consultation with the State Treasurer, the Commissioner of Community Affairs, the Commissioner of Human Services, and the Commissioner of Health and Senior Services.
b. Through regulation, the authority shall establish standards for vacant health facility redevelopment projects seeking State incentive grants based on the green building manual prepared by the Commissioner of Community Affairs pursuant to section 1 of P.L.2007, c.132 (C.52:27D-130.6), regarding the use of renewable energy, energy-efficient technology, and non-renewable resources in order to reduce environmental degradation and encourage long-term cost reduction.
c. Within each incentive grant application, the applicant shall certify information concerning:
(1) the status of control of the entire vacant health facility site;
(2) all required State and federal government permits that have been issued for the vacant health facility redevelopment project, or will be issued pending resolution of financing issues;
(3) Municipal land use permits for the vacant health facility redevelopment project that, pursuant to section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill), have been identified by regulation of the Health Facility Reuse and Community Revitalization Land Use Commission as eligible for issuance in an expedited manner;
(4) the unemployment rate within the municipality where the vacant health facility redevelopment project is located and the percentage of that municipality's total annual budget that is dependent upon State aid;
(5) any health care services currently provided at the vacant health facility site, any condition that the New Jersey Department of Health and Senior Services has placed upon the developer or other party in order to secure the department's permission to terminate any health care service currently being provided at the vacant health facility, and the developer's plan to ensure the continued provision of any health care service required by the department in order to secure its permission to terminate the provision of any health care service at the vacant health facility site; and
(6) the estimated revenue increment base, the estimated eligible revenues for the project, the estimated number of jobs that will be created by the project, the total number of employees at the three nearest hospitals or developmental centers, and the assumptions upon which the estimated figures are based.
d. With regard to State tax revenues proposed to be pledged for an incentive grant, the authority and the State Treasurer shall review the vacant health facility redevelopment project costs, evaluate and validate the project financing gap projected by the developer, and conduct a State fiscal impact analysis to ensure that the overall public assistance provided to the project will result in a total net benefit to the State.
e. The authority and the State Treasurer may act cooperatively to administer and review applications, and shall consult with the Business Action Center in the New Jersey Department of State on matters concerning State, regional, and local development and planning strategies.
f. The costs of the aforementioned reviews shall be assessed to the applicant as an application fee pursuant to the provisions of subsection e. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
6. a. The authority and the State Treasurer are authorized to enter into a redevelopment incentive grant agreement with a developer for any vacant health facility redevelopment project located within the State.
b. The decision whether or not to enter into a redevelopment incentive grant agreement is solely within the discretion of the authority and the State Treasurer, provided that they both agree to enter into an agreement.
c. The Chief Executive Officer of the authority, in consultation with the State Treasurer, the Commissioner of Community Affairs, the Commissioner of Human Services, and the Commissioner of Health and Senior Services, shall negotiate the terms and conditions of any redevelopment incentive grant agreement on behalf of the State.
d. The redevelopment incentive grant agreement shall specify the amount of the incentive grant that may be awarded to the developer depending on the number and salaries of the new full-time employees, the frequency of payments, and the length of time, which shall not exceed 20 years, during which that reimbursement shall be granted. In no event, shall the amount of the reimbursements under a redevelopment incentive grant agreement with the State exceed 20 percent of the total cost of the vacant health facility redevelopment project. For the purposes of calculating the total cost of all projects, the cost of infrastructure improvements in the public right-of-way and publicly owned facilities shall not be included.
e. The authority and the State Treasurer may enter into a redevelopment incentive grant agreement only if they make a joint finding that the State revenues to be realized from the vacant health facility redevelopment project will be in excess of the amount necessary to reimburse the private entity for its project financing gap. This finding may be made by an estimation based upon the professional judgment of the Chief Executive Officer of the authority and the State Treasurer.
f. The authority and the State Treasurer may enter into a redevelopment incentive grant agreement only if the New Jersey Department of Health and Senior Services has provided the developer or other party, when appropriate, with its approval for such cessation of the provision of all medical services as may be necessary to effectuate the redevelopment of a vacant health facility site.
g. In deciding whether or not to recommend entering into a redevelopment incentive grant agreement and in negotiating a redevelopment agreement with a developer, the Chief Executive Officer of the authority shall consider the following factors:
(1) the economic feasibility of the vacant health facility redevelopment project;
(2) the likelihood that the vacant health facility redevelopment project shall, upon completion, be capable of generating new tax revenue in an amount in excess of the amount necessary to reimburse the private entity for project costs incurred as provided in the redevelopment incentive grant agreement;
(3) the benefit created by the vacant health facility redevelopment project to the community in which the vacant health facility site is located;
(4) the degree to which the vacant health facility redevelopment project will advance State, regional and local development and planning strategies;
(5) the need of the redevelopment incentive grant agreement to the viability of the vacant health facility redevelopment project;
(6) the degree to which the vacant health facility redevelopment project enhances and promotes job creation and economic development;
(7) whether the community surrounding the vacant health facility site has access to adequate health care services, even if all medical services currently provided at the vacant health facility site cease to be provided at the same location; and
(8) whether the vacant health facility redevelopment project will create a total net benefit to the State.
7. a. A developer that has entered into a redevelopment incentive grant agreement with the authority and the State Treasurer pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) may, upon notice to and consent of the authority and the State Treasurer, pledge and assign as security or support for any loan or bond, any or all of its right, title and interest in and to such agreement and in the incentive grants payable thereunder, and the right to receive same, along with the rights and remedies provided to the developer under such agreement. Any such assignment shall be an absolute assignment for all purposes, including those of the federal bankruptcy code.
b. Any pledge of incentive grants made by the developer shall be valid and binding from the time when the pledge is made and filed in the records of the authority. The incentive grants so pledged and thereafter received by the developer shall immediately be subject to the lien of the pledge without any physical delivery thereof or further act, and the lien of any pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the developer irrespective of whether the parties have notice thereof. Neither the redevelopment incentive grant agreement nor any other instrument by which a pledge under this section is created need be filed or recorded except with the authority.
8. a. No later than March 1 of each year, for the preceding grant year, each developer which has entered into a redevelopment incentive grant agreement under P.L. , c. (C. ) (pending before the Legislature as this bill) shall submit to the authority a copy of its applicable New Jersey tax return within 30 days of filing showing business income and withholdings as a condition of its continuation in the Health Facility Reuse and Community Revitalization program, together with a combined annual payroll report that it shall prepare based upon information from entities operating on the vacant health facility site showing the new full-time employees hired during each year since the incentive grant was issued and a statement from the developer's chief executive officer certifying that all employees listed as new full-time employees meet the requirements listed in section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill). Should any business which is awarded an incentive grant under P.L. , c. (C. ) (pending before the Legislature as this bill) fail to submit to the authority a copy of its annual payroll report or submit its annual payroll report without the information required above, any grant payment to be received by any such business shall be forfeited for the applicable reporting year unless the Chief Executive Officer of the authority determines that there are extenuating circumstances excusing the timely filing required herein. No grant payment shall be made until the developer has submitted all of the documentation required under this subsection a..
b. The authority may cause an audit of any developer receiving an incentive grant to be conducted at any time.
9. The State Treasurer, the New Jersey Economic Development Authority, and the Commissioner of the Department of Community Affairs may adopt implementation guidelines or directives, and adopt such administrative rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as are necessary for the implementation of those agencies' and officials' respective responsibilities under sections 2 through 8 and section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill) except that notwithstanding any provision of P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the State Treasurer, the authority, and the commissioner may adopt, immediately upon filing with the Office of Administrative Law, such rules and regulations as they deem necessary to implement the provisions of sections 2 through 8 and section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill) which shall be effective for a period not to exceed 12 months and shall thereafter be amended, adopted, or re-adopted in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).
10. a. The Department of Community Affairs shall establish a commission to be known as the "Health Facility Reuse and Community Revitalization Land Use Commission." The commission shall consist of three members, one of whom shall be the Commissioner of the Department of Community Affairs, ex officio, or the commissioner's designee, one of whom shall be the Attorney General, ex officio, or the Attorney General's designee, and one of whom shall be an officer or employee of the New Jersey Business Action Center in the Department of State designated by the Secretary of State. The members of the commission shall be designated and shall hold their initial organizational meeting as soon as practicable, but no later than 30 days following the designation of the commission's members. Through the Commissioner of the Department of Community Affairs, the commission shall establish through regulation a procedure for a developer to obtain the municipal land use permits necessary for a vacant health facility redevelopment project in an expedited manner.
b. At a minimum, the procedure established by the commission shall require that one public hearing be held before the municipal governing body upon reasonable advance notice within the municipality in which the proposed vacant health facility redevelopment project is to be located. During this public hearing there shall be set aside a portion of the hearing for public comment upon the project and the cessation of any service currently being provided at the vacant health facility site.
c. At a minimum, the procedure established by the commission shall require a municipality's governing body to pass a resolution in support of the vacant health facility redevelopment project which shall state the reasons for its action.
11. a. There is established in but not of the Department of Health and Senior Services a study commission to be known as the "Health Facility Reuse and Community Revitalization Program Study Commission" that shall study the feasibility of establishing an expedited process of issuing all permits, other than those relating to land use that shall have been expedited pursuant to regulations of the commission established pursuant to section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill), that are required to effectuate the redevelopment of a vacant health facility, for which an application and approval process can be expedited without an adverse impact on the health and safety of the people of the State of New Jersey.
b. The commission shall consist of seven members. The commission chair shall be the Chief Executive Officer of the New Jersey Economic Development Authority, ex officio, or his or her designee. Two members of the commission shall be appointed by the Commissioner of Health and Senior Services. Two members of the commission shall be appointed by the Commissioner of Community Affairs. Two members of the commission shall be appointed by the Commissioner of Environmental Protection. Vacancies in the membership of the commission shall be filled in the same manner as the original appointments were made.
c. The members of the commission shall be appointed within 30 days of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and shall hold their initial organizational meeting as soon as practicable, but no later than 30 days following the appointment of the commission's members.
d. The commission shall prepare a report of the results of its study undertaken pursuant to subsection a. of this section. The commission's report shall include detailed recommendations concerning: (1) all permits that may be covered by a vacant health facility redevelopment project expedited permit, (2) the process by which a developer engaged in a vacant health facility redevelopment project may apply for an expedited permit, (3) the process by which the developer's application shall be reviewed, (4) which governmental entities shall be involved in the review process, and (5) the criteria under which an application for an expedited permit shall be granted or denied.
e. The New Jersey Economic Development Authority shall provide such technical, stenographic, and secretarial assistance as may be required by the commission. The commission 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.
f. The commission shall submit its report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), within 180 days of its initial organizational meeting.
12. This act shall take effect immediately; sections 2 through 8 shall remain inoperative until the first day of the third month next following enactment and section 11 shall expire upon submission of the commission's report to the Legislature.
STATEMENT
This bill establishes a Health Facility Reuse and Community Revitalization program ("program"). The program is designed to provide the developer of a project to redevelop the site of a vacant hospital or developmental center with an additional revenue stream, consisting of a portion of the tax revenues attributable to the project, to facilitate the redevelopment.
The bill directs the New Jersey Economic Development Authority ("EDA") to establish the program in consultation with the State Treasurer. Through the program, the EDA may provide a developer with a grant of up to 50 percent of the incremental State revenue from various taxes in order to reimburse it for a gap in the financing of the redevelopment project. The developer may receive an additional 25 percent of the incremental revenues if the number of new full-time jobs created at the redevelopment site exceeds the average total employment of the three geographically nearest hospitals or developmental centers. The developer may receive an additional 10 percent of the incremental revenues if more than 50 percent of the new full-time jobs created have an annual salary that exceeds the average State salary.
The EDA is authorized to negotiate and enter into redevelopment incentive grant agreements with developers at its own discretion, provided the State Treasurer is in agreement. The agreement must specify the amount that may be awarded depending on the projections of the number and salary of new full-time employees, the frequency of the payments and the term for which grant payments will be made, which is not to exceed 20 years. In deciding whether to enter into a redevelopment incentive grant agreement, the authority and the State Treasurer must consider a variety of factors including: (1) the economic feasibility of the project; (2) the likelihood that the grant will cover the financing gap; (3) the vacant health facility redevelopment project's benefit to the community; (4) the redevelopment project's ability to promote job creation and economic growth; and (5) whether the redevelopment project will create a total net benefit to the State.
A private entity that has entered into a redevelopment incentive grant agreement is provided the right to assign the proceeds of the grant to another entity.
The bill requires any developer that receives a grant to annually provide the EDA with a copy of tax filings stating its business income and withholdings, an annual payroll report detailing all new full-time employees hired during each year the incentive grant was issued, and a certification by the chief executive officer of the private entity that all employees listed in the payroll report meet the requirements of being a new full-time employee. The EDA is also authorized to audit any private entity that is receiving an incentive grant.
The bill also directs the Department of Community Affairs to establish a "Health Facility Reuse and Community Revitalization Land Use Commission." The commission is tasked with expediting municipal land use approval processes for vacant health facility redevelopment projects. At a minimum, the expediting process must include at least one public hearing, with notice, and the municipality's governing body must pass a resolution approving the project.
The bill also establishes a study commission to develop a proposal for a process by which State permits may be expedited for vacant health facility redevelopment projects.
