ASSEMBLY, No. 3043
STATE OF NEW JERSEY
INTRODUCED JUNE 7, 2012
Assemblyman JERRY GREEN
District 22 (Middlesex, Somerset and Union)
Assemblywoman SHAVONDA E. SUMTER
District 35 (Bergen and Passaic)
Assemblyman PATRICK J. DIEGNAN, JR.
District 18 (Middlesex)
Assemblywoman BONNIE WATSON COLEMAN
District 15 (Hunterdon and Mercer)
Assemblyman THOMAS P. GIBLIN
District 34 (Essex and Passaic)
Allows corporation business tax or gross income tax credits to developers for certain capital investments for repurposing qualified health care facilities.
CURRENT VERSION OF TEXT
As reported by the Senate Budget and Appropriations Committee on June 13, 2013, with amendments.
An Act allowing corporation business tax 2or gross income tax2 credits to developers for certain capital investments for repurposing qualified health care facilities, supplementing Title 34 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 “1[Hospital] Health Care Facility1 Repurposing and Revitalization Tax Credit Act.”
2. As used in this act:
"Authority" means the New Jersey Economic Development Authority established by section 4 of P.L.1974, c.80 (C.34:1B-4).
“Developer” means a person who undertakes the repurposing of a qualified health care facility.
“Capital investment” in a qualified health care facility means expenses incurred after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) for: the 1acquisition,1 site preparation and construction, repair, renovation, improvement, equipping, or furnishing of a building, structure, facility or improvement to real property.
“Full-time employee” means a person employed 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 partnership 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. 2, and includes only a person whose employer provides employee health benefits under a group health plan as defined under section 14 of P.L.1997, c.146 (C.17B:27-54), a health benefits plan as defined under section 1 of P.L.1992, c.162 (C.17B:27A-17), or a policy or contract of health insurance covering more than one person issued pursuant to Article 2 of Title 17B of the New Jersey Statutes.2 “Full-time employee” shall not include any person who works as an independent contractor or on a consulting basis for the business.
"Qualified health care facility" means a building, complex of buildings or structural components of buildings previously licensed by the Department of Health 2[and Senior Services]2 1[as a general hospital]1 which has been granted a certificate of need to cease 1all or partial1 operation 1[as a general hospital]1.
3. a. (1) A developer, upon application to and approval from the authority, shall be allowed credit of 275 percent, or by determination of the authority of up to2 100 percent 2,2 of its capital investment, made after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) but prior to its submission of documentation pursuant to subsection c. of this section, for the repurposing of a qualified health care facility. The repurposing of a qualified health care facility is its renovation and redevelopment as a 1non-acute1 health care and health support services center. The 1non-acute1 health care and health support services components of the repurposed facility shall comprise no less than 50 percent of the net leasable space of the repurposed facility, provided however that the 50 percent requirement may be waived by the authority if the requirement is not economically feasible or if the inclusion of further non-health care and non-health support services elements would improve the utilization and development of the health care and health support services components. To be eligible for any tax credits authorized under this section, a developer shall demonstrate to the authority, at the time of application, that the State's financial support of the proposed capital investment in a qualified health care facility will 1not destabilize the supply and delivery of acute care health services in its market,1 will yield a net positive benefit to the State and local government, and, through a project pro forma analysis at the time of application, that the repurposing of the qualified health care facility is likely to be realized with the provision of tax credits at the level requested but is not likely to be accomplished by private enterprise without the tax credits.
(2) A developer shall make or acquire capital investments totaling not less than $10,000,000 in a qualified health care facility, at which the tenant businesses shall employ not fewer than 100 full-time employees 1, to1 be eligible for a credit under this section. A successor to a developer that acquires a repurposed qualified health care facility shall also be deemed to have acquired the capital investment made or acquired by the developer.
(3) Full-time employment for 2[an accounting or] a2 privilege period 2or taxable year2 shall be determined as the average of the monthly full-time employment for the period.
2(4) All construction projects for the repurposing of a qualified health care facility entered into pursuant to this section shall contain a project labor agreement. The project labor agreement shall be subject to the provisions of P.L.2002, c.44 (C.52:38-1 et seq.). Further, the general contractor, construction manager, design-build team, or subcontractor for a construction project proposed in accordance with this paragraph shall be registered pursuant to the provisions of P.L.1999, c.238 (C.34:11-56.48 et seq.).2
b. A developer shall apply for the credit within five years after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and a developer shall submit its documentation for approval of its credit amount within eight years after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. (1) The amount of credit allowed shall, except as otherwise provided, be equal to the capital investment made by the developer, and shall be taken over a 10-year period, at the rate of one-tenth of the total amount of the developer’s credit for each privilege period 2or taxable year2 of the developer, beginning with the privilege period 2or taxable year2 in which the developer is first approved by the authority as having met the investment capital and employment qualifications, subject to any reduction or disqualification as provided by subsection d. of this section as determined by annual review by the authority. In conducting its annual review, the authority may require a developer to submit any information determined by the authority to be necessary and relevant to its review.
(2) The amount of credit allowed may be applied against the corporation business tax liability otherwise due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) 2or the tax liability otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.
(3) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.
A New Jersey S Corporation shall not be allowed a credit directly under the gross income tax, but the amount of credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year2 .
d. If, in any privilege period 2or taxable year2, the number of full-time employees employed at the repurposed qualified health care facility is fewer than 80 then the amount of credit otherwise allowed to the developer for the privilege period 2or taxable year2 shall be reduced by the percentage determined by dividing 100 minus the number of employees employed at the facility for that 2[privilege] tax2 period by 100 and similarly for each subsequent 2[privilege] tax2 period, until the first 2[privilege] tax2 period for which documentation demonstrating the restoration of the number of full-time employees employed at the repurposed qualified health care facility to 100 has been reviewed and approved by the authority, for which 2[privilege] tax2 period and each subsequent 2[privilege] tax2 period the full amount of the credit shall be allowed.
e. The authority, in consultation with the Director of the Division of Taxation in the Department of the Treasury, shall adopt rules in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as are necessary to implement P.L. , c. (C. )(pending before the Legislature as this bill), including but not limited to: examples of and the determination of capital investment; the promulgation of procedures and forms necessary to apply for a credit; and provisions for credit applicants to be charged an initial application fee, and ongoing service fees, to cover the administrative costs related to the credit.
4. This act shall take effect immediately.