The state of New Jersey finally jumped back into the world of economic development incentives with the state legislature passed and New Jersey Governor Phil Murphy signed the legislation in December of 2020. The New Jersey Economic Recovery Act of 2020 provides for the administration of programs and policies related to jobs, property development, food deserts, community partnerships, small and early-stage businesses, state procurement, wind energy, and film production, and makes an appropriation. Key highlights of the New Jersey economic development legislation includes:
- Historic Property Reinvestment program can provide tax credits for part of the cost of rehabilitating historic properties in this State capped at $50 million annually for six years.
- Brownfields Redevelopment Incentive program can provide tax credits to compensate developers of redevelopment projects located on brownfield sites for remediation costs capped at $50 million annually for six years.
- New Jersey Innovation Evergreen program can auction tax credits for cash, which will be used to invest in innovation as a catalyst for economic growth and to advance the competitiveness of the State’s businesses in the global economy capped at $60 million annually for six years.
- Food Desert Relief program provides tax credits in order to incentivize businesses to establish and retain new supermarkets and grocery stores in food desert communities capped at $40 million annually for six years.
- New Jersey Community-Anchored Development program provides tax credits to anchor institutions to incentivize the expansion of targeted industries in the State and the continued development of certain areas of the State capped at $200 million annually for six years, but the $200 million annual cap will be split so that up to $130 million of tax credits will be for areas in the 13 northern counties of the State and $70 million for areas in the eight southern counties.
- New Jersey Aspire program provides tax credits to encourage redevelopment projects by covering certain project financing gap costs.
- Emerge program provides tax credits to encourage economic development, job creation, and the retention of significant numbers of jobs in imminent danger of leaving the State. Tax credits under the Aspire program combined with tax credits under the Emerge program are capped at $1.1 billion annually for six years, but the $1.1 billion annual cap will be split so that up to $715 million of tax credits will be for projects located in the northern counties of the State and $385 million for projects located in the southern counties but the $1.1 billion cap does not apply to transformative projects. For transformative projects under the Aspire program and the Emerge program the combined credits over six years is capped at $2.5 billion.
- Main Street Recovery Finance program provides grants, loans, and loan guarantees to small businesses with $50 million appropriated for this program.
- New Jersey Ignite program, a public-private partnership providing start-up rent grants to collaborative workspaces to support the early months of an early stage innovation economy business’s rent at the collaborative workspace appropriating $250,000 for this program.
- New Jersey Offshore Wind Economic Development Act provides changes to eligibility requirements, disbursement of credits, and deadlines.
- New Jersey Film Tax Credit gained an additional $200 million of tax credits annually over 13 years.
- New Jersey Emerging Technology and Biotechnology Financial Assistance Program increased the annual amount of tax benefits that maybe approved for transfer between corporations.
- New Jersey Angel Investor Tax Credit Act increased the annual tax credit cap from $25 million to $35 million and to add provisions for venture funds.
- New Jersey Economic Redevelopment and Growth Grant Program gained an additional $220 million of tax credits to be awarded.
This legislation authorizes up to $11.5 billion of tax credits over seven years for new incentive programs, $2.6 billion of film tax credits over 13 years, $220 million of tax credits under the Economic Redevelopment and Growth Grant program for certain project applications submitted prior to December 31, 2021, $30 million over three years for hiring employees for the manufacture of personal protective equipment in sections, increases the angel investor tax credit cap from $25 to $35 million annually, and appropriates $55.5 million to support various programs and administrative functions established by the bill.