Bill Text: NJ S366 | 2024-2025 | Regular Session | Amended
Bill Title: Provides that fusion energy and fusion technology companies are eligible to receive benefits under certain economic incentive programs.
Spectrum: Bipartisan Bill
Status: (Introduced) 2024-05-16 - Reported from Senate Committee with Amendments, 2nd Reading [S366 Detail]
Download: New_Jersey-2024-S366-Amended.html
SENATE, No. 366
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator JOSEPH PENNACCHIO
District 26 (Essex, Morris and Passaic)
Senator SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
Provides that fusion energy and fusion technology companies are eligible to receive benefits under certain economic incentive programs.
CURRENT VERSION OF TEXT
As reported by the Senate Judiciary Committee on May 16, 2024, with amendments.
An Act related to the applicant eligibility under certain economic incentive programs to specifically include fusion energy and fusion technology companies, 1supplementing P.L.1974, c.80 (C.34:1B-1 et seq.),1 amending P.L.1999, c.140 and P.L.1997, c.349 1[, and supplementing P.L.1974, c.80 (C.34:1B-1 et seq.)]1.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) a. Notwithstanding any provision of law to the contrary, the New Jersey Economic Development Authority, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall, in consultation with the New Jersey Commission on Science, Innovation and Technology and the Board of Public Utilities, adopt rules and regulations for the administration of economic incentive programs to provide that any reference or stipulation under an economic incentive program related to the development or production of renewable energy, the development of emerging technologies, 1[or]1 to the expansion of targeted industries in this State connected to the award of a benefit or incentive to a company under that program is deemed to include the development or production of fusion energy or fusion technology in this State. The rules and regulations adopted pursuant to this subsection shall establish eligibility requirements applicable to the different economic incentive programs and establish uniform methodologies for determining qualifications of an individual applicant that is a fusion energy or fusion technology company under this section to ensure that benefits and incentives are properly earned pursuant to the individual economic incentive program and incentive agreement.
Nothing contained in P.L. , c. (C. ) (pending before the Legislature as this bill) shall be construed to deem fusion energy or fusion technology eligible for program incentives under the New Jersey Clean Energy Program or other program incentives funded through the societal benefits charge of the "Universal Service Fund" established pursuant to section 12 of P.L.1999, c.23 (C.48:3-60).
b. As used in this section:
"Applicant" means a person applying to the authority to receive a benefit or incentive pursuant to an economic incentive program. "Authority" means the New Jersey Economic Development Authority established by section 4 of P.L.1974, c.80 (C.34:1B-4).
"Benefit or incentive" means 1a1 financial incentive, awarded by the authority to a person or entity under an economic incentive program administered by the authority for the purpose of stimulating economic development or redevelopment in New Jersey, including
but not limited to a bond, grant, loan, loan guarantee, matching fund, or tax credit or other tax expenditure.
"Economic incentive program" means any program administered by the authority that offers a benefit or incentive to a person in order to stimulate economic development of new or existing renewable energy or technology business in New Jersey.
"Fusion energy" means a form of power generation that generates electricity either directly or 1, including but not limited to,1 by using heat from nuclear fusion reactions.
"Fusion energy or fusion technology company" means a corporation or other entity that has its headquarters or base of operations in this State; that owns, has filed for, or has a valid license to use protected, proprietary intellectual property; and that employs some combination of the following: highly educated or trained managers and workers, or both, employed in this State who use sophisticated scientific research service or production equipment, processes, or knowledge to discover, develop, test, transfer, or manufacture a product or service related to fusion energy or fusion technology.
"Fusion technology" means a technology that is developed to permit the production of fusion energy or a technology developed to create nuclear fusion reactions.
"Incentive agreement" means an agreement entered into by the authority and a person or entity to establish rights and duties of both parties through which the person or entity is entitled to receive a benefit or incentive under an economic incentive program.
"New Jersey Commission on Science, Innovation and Technology" means the New Jersey Commission on Science, Innovation and Technology established pursuant to section 3 of 1[P.L.1984.] 1985,1 c.102 (C.52:9X-3).
2. Section 1 of P.L.1999, c.140 (C.34:1B-7.42b) is amended to read as follows:
1. As used in P.L.1997, c.334 (C.34:1B-7.42a et al.):
"Authority" means the New Jersey Economic Development Authority established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4).
"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 that add to that body of fundamental knowledge. This definition may be modified by regulation to conform to definitions in other programs administered by the authority.
"Biotechnology company" means an emerging corporation that has its headquarters or base of operations in this State; that owns, has filed for, or has a valid license to use protected, proprietary intellectual property; and that is 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. This definition may be modified by regulation to conform to definitions in other programs administered by the authority.
"Full-time employee" means a person employed by a new or expanding emerging technology or biotechnology company 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 and whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., or who is a partner of a new or expanding emerging technology or biotechnology company 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. To qualify as a "full-time employee," an employee shall also receive from the new or expanding emerging technology or biotechnology company health benefits under a health benefits plan authorized pursuant to State or federal law. "Full-time employee" shall not include any person who works as an independent contractor or on a consulting basis for the new or expanding emerging technology or biotechnology company.
"Fusion energy" means a form of power generation that generates electricity either directly or 1, including but not limited to,1 by using heat from nuclear fusion reactions.
"Fusion technology" means a technology that is developed to permit the production of fusion energy or a technology 1[that involves the creation of] developed to create1 nuclear fusion reactions.
"New or expanding" means a technology or biotechnology company that (1) on June 30 of the year in which the company files an application for surrender of unused but otherwise allowable tax benefits under P.L.1997, c.334 (C.34:1B-7.42a et al.) and on the date of the exchange of the corporation business tax benefit certificate, has fewer than 225 employees in the United States of America; (2) on June 30 of the year in which the company files such an application, has at least one full-time employee working in this State if the company has been incorporated for less than three years, has at least five full-time employees working in this State if the company has been incorporated for more than three years but less than five years, and has at least 10 full-time employees working in this State if the company has been incorporated for more than five years; and (3) on the date of the exchange of the corporation business tax benefit certificate, the company has the requisite number of full-time employees in New Jersey that were required on June 30 as set forth in part (2) of this definition.
"Opportunity zone" means a federal population census tract in this State that was eligible to be designated as a qualified opportunity zone pursuant to 26 U.S.C. s.1400Z-1.
"Technology company" means an emerging corporation that has its headquarters or base of operations in this State; that owns, has filed for, or has a valid license to use protected, proprietary intellectual property; and that employs some combination of the following: highly educated or trained managers and workers, or both, employed in this State who use sophisticated scientific research service or production equipment, processes or knowledge to discover, develop, test, transfer or manufacture a product or service, including, but not limited to, fusion energy and fusion technology products and services. This definition may be modified by regulation to conform to definitions in other programs administered by the authority.
(cf: P.L.2021, c.160, s.53)
3. Section 2 of P.L.1997, c.349 (C.54:10A-5.29) is amended to read as follows:
2. As used in sections 1 through 3 of P.L.1997, c.349 (C.54:10A-5.28 through C.54:10A-5.30):
"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 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.
"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.
"Carbon footprint reduction technology" means a technology using equipment for the commercial, institutional, and industrial sectors that: increases energy efficiency; develops and delivers renewable or non-carbon-emitting energy technologies; develops innovative carbon emissions abatement with significant carbon emissions reduction potential; or promotes measurable electricity end-use energy efficiency.
"Control" with respect to a corporation means ownership, directly or indirectly, of stock possessing 80 percent or more of the total combined voting power of all classes of the stock of the corporation entitled to vote; and "control" with respect to a trust means ownership, directly or indirectly, of 80 percent or more of the beneficial interest in the principal or income of the trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in subsection (c) of section 267 of the federal Internal Revenue Code of 1986 (26 U.S.C. § 267), other than paragraph (3) of subsection (c) of that section.
"Controlled group" means one or more chains of corporations connected through stock ownership with a common parent corporation if stock possessing at least 80 percent of the voting power of all classes of stock of each of the corporations is owned directly or indirectly by one or more of the corporations and the common parent owns directly stock possessing at least 80 percent of the voting power of all classes of stock of at least one of the other corporations.
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"Diverse entrepreneur" means a New Jersey based business that meets the criteria for a minority business or female business set forth in section 3 of P.L.1983, c.482 (C.52:32-19).
"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.
"Fusion energy" means a form of power generation that generates electricity either directly or 1, including but not limited to,1 by using heat from nuclear fusion reactions.
"Information technology" means software publishing, motion picture and video production, television production and post-production services, telecommunications, data processing, hosting and related services, custom computer programming services, computer system design, computer facilities management services, other computer related services, and computer training.
"Life sciences" means the production of medical equipment, ophthalmic goods, medical or dental instruments, diagnostic substances, biopharmaceutical products, or physical and biological research.
"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.
"Mobile communications technology" means a technology involving the functionality and reliability of the transmission of voice and multimedia data using a communication infrastructure via a computer or a mobile device, that shall include, but not be limited to, smartphones, electronic books and tablets, digital audio players, motor vehicle electronics, home entertainment systems, and other wireless appliances, without having connected to any physical or fixed link.
"New Jersey based business" means a company with fewer than 225 employees, of whom at least 75 percent are filling a position in New Jersey, that is doing business, employing or owning capital or property, or maintaining an office in this State.
"New Jersey emerging technology business" means a company with fewer than 225 employees, of whom at least 75 percent are filling a position in New Jersey, that is doing business, employing or owning capital or property, or maintaining an office in this State and: has qualified research expenses paid or incurred for research conducted in this State; conducts pilot scale manufacturing in this State; or conducts technology commercialization in this State in the fields of advanced computing, advanced materials, biotechnology, carbon footprint reduction technology, electronic device technology, information technology, life sciences, medical device technology, mobile communications technology, or renewable energy technology.
"New Jersey emerging technology business holding company" means any corporation, association, firm, partnership, trust, or other form of business organization, but not a natural person, which directly or indirectly, owns, has the power or right to control, or has the power to vote, a controlling share of the outstanding voting securities of a corporation or other form of a New Jersey emerging technology business.
"Partnership" means a syndicate, group, pool, joint venture, or other unincorporated organization through or by means of which any business, financial operation, or venture is carried on, and which is not a trust or estate, a corporation, or a sole proprietorship.
"Pilot scale manufacturing" means the design, construction, and testing of preproduction prototypes and models in the fields of advanced computing, advanced materials, biotechnology, carbon footprint reduction technology electronic device technology, information technology, life sciences, medical device technology, mobile communications technology, and renewable energy technology, other than for commercial sale, excluding sales of prototypes or sales for market testing if the total gross receipts, as calculated in the manner provided in section 6 of P.L.1945, c.162 (C.54:10A-6), from the sales of the product, service, or process do not exceed $1,000,000.
"Qualified investment" means the non-refundable transfer of cash to a New Jersey emerging technology business or to a New Jersey emerging technology business holding company by a taxpayer that is not a related person of the New Jersey emerging technology business or the New Jersey emerging technology business holding company, the transfer of which is in connection with either: a transaction between or among the taxpayer and the New Jersey emerging technology business or the New Jersey emerging technology holding company or both in exchange for stock, interests in partnerships or joint ventures, licenses (exclusive or non-exclusive), rights to use technology, marketing rights, warrants, options, or any items similar to those included herein, including, but not limited to, options or rights to acquire any of the items included herein; or a purchase, production, or research agreement between or among the taxpayer and the New Jersey emerging technology business or the New Jersey emerging technology holding company or both. "Qualified investment" also means the non-refundable transfer of cash or irrevocable contractual commitment to a qualified venture fund.
"Qualified research expenses" means qualified research expenses, as defined in section 41 of the federal Internal Revenue Code of 1986 (26 U.S.C. § 41), as in effect on June 30, 1992, in the fields of advanced computing, advanced materials, biotechnology, carbon footprint reduction technology, electronic device technology, information technology, life sciences, medical device technology, mobile communications technology, or renewable energy technology.
"Qualified venture fund" means a venture fund required by contract to invest a minimum of 50 percent of its funds in New Jersey based businesses that the authority, in its sole discretion, based upon the qualified venture fund's investment history, if any, its private placement memorandum and other relevant information, has determined has the capacity to make the minimum investment.
"Related person" means:
a corporation, partnership, association or trust controlled by the taxpayer;
an individual, corporation, partnership, association or trust that is in the control of the taxpayer;
a corporation, partnership, association or trust controlled by an individual, corporation, partnership, association or trust that is in the control of the taxpayer; or
a member of the same controlled group as the taxpayer.
"Renewable energy technology" means a technology involving the generation of electricity from solar energy; wind energy; wave or tidal action; geothermal energy; the combustion of gas from the anaerobic digestion of food waste and sewage sludge at a biomass generating facility; the combustion of methane gas captured from a landfill; and a fuel cell powered by methanol, ethanol, landfill gas, digestor gas, biomass gas, fusion energy, or other renewable fuel but not powered by a fossil fuel.
"Tax year" means the fiscal or calendar accounting period of a taxpayer.
"Venture fund" means a partnership, corporation, trust, or limited liability company that invests cash in a business during the early or expansion stages of a business in exchange for an equity stake in the business in, which the investment is made. Venture firm may include a venture capital fund, a family office fund, or a corporate investor fund, provided that a professional manager administers the venture firm.
"Verified transfer of funds" means a non-refundable transfer of funds equal to 100 percent of the taxpayer's qualified investment in the New Jersey emerging technology business holding company to a New Jersey emerging technology business by the New Jersey emerging technology business holding company that is accompanied by documentation, as required by the New Jersey Economic Development Authority, which provides proof of a cash transaction originating with a taxpayer and concluding with a New Jersey emerging technology business, provided that the transactions from origin to destination occur within the same tax year.
The definitions of "advanced computing," "advanced materials," "biotechnology," "carbon footprint reduction technology," "electronic device technology," "information technology," "life sciences," "medical device technology," "mobile communications technology," "New Jersey emerging technology business," "pilot scale manufacturing," and "renewable energy technology" may be modified by regulation to conform to definitions in other programs administered by the authority.
(cf: P.L.2020, c.156, s.117)
4. This act shall take effect immediately.
