S846 SCS

An Act concerning certain urban enterprise zones, amending P.L.1983, c.303 and P.L.2001, c.347 and supplementing Title 52 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 7 of P.L.1983, c.303 (C.52:27H-66) is amended to read as follows:

7. The authority shall designate enterprise zones from among those areas of qualifying municipalities determined to be eligible pursuant to P.L.1983, [s.] c.303 (C.52:27H-60 et seq.). No more than 32 enterprise zones shall be in effect at any one time. No more than one enterprise zone shall be designated in any one municipality. [Except as otherwise provided by section 11 of P.L.2001, c.347 (C.52:27H-66.6), 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. At least six of the 10 additional enterprise zones authorized pursuant to section 3 of P.L.1993, c.367 shall be located in counties in which enterprise zones have not previously been designated and shall be designated within 90 days of the date of the submittal of an application and zone development plan. The authority shall accept applications within 90 days of the effective date of P.L.1993, c.367. Notwithstanding the provisions of P.L.1983, c.303 (C.52:27H-60 et seq.) to the contrary, the six additional enterprise zones to be designated by the authority pursuant to the criteria for priority consideration in this section shall be entitled to an exemption to the extent of [50%] 50 percent of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The following criteria shall be utilized in according priority consideration for designation of these zones by the authority:

a. One zone shall be located in a county of the second class with a population greater than 595,000 and less than 675,000 according to the latest federal decennial census and shall be located in the qualifying municipality in that county with the highest annual average number of unemployed persons and the highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development;

b. Two zones shall be located in a county of the second class with a population greater than 445,000 and less than 455,000 according to the latest federal decennial census, one of which shall be located in the qualifying municipality in that county with the highest annual average number of unemployed persons and the highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development, and one of which shall be located in the qualifying municipality in that county with the second highest annual average number of unemployed persons and the second highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development;

c. One zone shall be located in a county of the third class with a population greater than 84,000 and less than 92,000 according to the latest federal decennial census and shall be located in the qualifying municipality in that county with the highest annual average number of unemployed persons and the highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development;

d. One zone shall be located within two noncontiguous qualifying municipalities but comprised of not more than two noncontiguous areas each having a continuous border, if:

(1) both municipalities are located in the same county which shall be a county of the fifth class with a population greater than 500,000 and less than 555,000 according to the latest federal decennial census;

(2) the two municipalities submit a joint application and zone development plan; and

(3) each of the municipalities has a population greater than 16,000 and less than 30,000 and a population density of more than 5,000 persons per square mile, according to the latest federal decennial census; and

e. One zone shall be located within a municipality having a population greater than 38,000 and less than 46,000 according to the latest federal decennial census if the municipality is located within a county of the fifth class with a population greater than 340,000 and less than 440,000 according to the latest federal decennial census.

(cf: P.L.2004, c.75, s.2)

2. Section 11 of P.L.2001, c.347 (C.52:27H-66.6) is amended to read as follows:

11. a. Notwithstanding the provisions of any law, rule, regulation or order to the contrary, the designation of an enterprise zone by the authority pursuant to P.L.1983, c.303 (C.52:27H-60 et seq.), which is located in a municipality in which the annual average of unemployed persons is equal to or greater than 2,000, or the municipal average annual unemployment rate exceeds the State average annual unemployment rate, or an enterprise zone which is located in a municipality contiguous to a municipality in which an enterprise zone is designated pursuant to P.L.1983, c.303 (C.52:27H-60 et seq.) and in which the annual average of unemployed persons is equal to or greater than 2,000 or the municipal average annual unemployment rate exceeds the State average annual unemployment rate, shall, following the expiration of the third five-year period during which the State shall have collected reduced rate revenues within the zone as provided in subsection c. of section 21 of P.L.1983, c.303 (C.52:27H-80), be extended by the authority [, on a one-time basis,] for a period of 16 years, within 90 days after the effective date of P.L.2001, c.347 (C.52:27H-66.2 et al.), or within 90 days after the expiration of that third five-year period, whichever is later.

b. During the 90-day period provided for in subsection a. of this section, the authority shall notify all qualified businesses in the enterprise zone that the benefits authorized by sections 16 through 20 of P.L.1983, c.303 (C.52:27H-75 through C.52:27H-79) shall be extended to qualified businesses in the enterprise zone commencing with the designation of the extended enterprise zone and continuing as long as a zone retains its designation as an extended enterprise zone.

c. Notwithstanding [any other] the provisions of any law, rule or regulation to the contrary, 90 days after the expiration of the period provided for in subsection c. of section 21 of P.L.1983, c.303 (C.52:27H-80), except as provided in subsection b. of section 6 of P.L.1996, c.124 (C.13:1E-116.6), and after first depositing 10 percent of the gross amount of all revenues received from the taxation of retail sales made by certified vendors from business locations in an extended enterprise zone designated pursuant to subsection a. of this section, to which this exemption shall apply into the account created in the name of the authority in the enterprise zone assistance fund established pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88), the remaining 90 percent shall be deposited immediately upon collection by the Department of the Treasury, as follows:

(1) In the first five-year period during which the State shall have collected reduced rate revenues within the extended enterprise zone, [all such] those revenues shall be deposited in the enterprise zone assistance fund created pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88);

(2) In the second five-year period during which the State shall have collected reduced rate revenues within the extended enterprise zone, 66 [2/3%] and 2/3 percent of [all] those revenues shall be deposited in the enterprise zone assistance fund, and 33 [1/3%] and 1/3 percent shall be deposited in the General Fund;

(3) In the third five-year period during which the State shall have collected reduced rate revenues within the extended enterprise zone, 33 [1/3%] and 1/3 percent of [all] those revenues shall be deposited in the enterprise zone assistance fund, and 66 [2/3%] and 2/3 percent shall be deposited in the General Fund;

(4) In the [final] sixteenth year during which the State shall have collected reduced rate revenues within the extended enterprise zone, but not to exceed the life of the enterprise zone, [all] those revenues shall be deposited in the General Fund.

The revenues required to be deposited in the enterprise zone assistance fund [under] pursuant to this section shall be used for the purposes of [that] the enterprise urban assistance fund and for the uses prescribed in section 29 of P.L.1983, c.303 (C.52:27H-88), subject to annual appropriations being made for those purposes and uses.

d. The designation as an extended enterprise zone pursuant to this section shall terminate if the authority determines that the municipality in which the zone is located fails to meet the criteria of subsection a. of this section for three consecutive years. Any enterprise zone which loses its designation as an extended enterprise zone pursuant to this subsection shall be eligible to re-apply to the authority for designation as an extended enterprise zone pursuant to the provisions of P.L.1983, c.303 (C.52:27H-60 et seq.). If the authority approves its application, an urban enterprise zone designation may be extended to the applicant in accordance with the schedules set forth in P.L.1983, c.303 (C.52:27H-60 et seq.), beginning at the point where the enterprise zone was located on [such] those schedules on the effective date of P.L.2001, c.347 (C.52:27H-66.2 et al.).

(cf: P.L.2001, c.347, s.11)

3. New section) a. Notwithstanding the provisions of any law, rule, or regulation to the contrary, the duration of the first five enterprise zones that were designated pursuant to P.L.1983, c.303 (C.52:27H-60 et seq.) are hereby extended for a period commencing on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and ending on September 30, 2019. This extension shall be in addition to the extension provided for in section 11 of P.L.2001, c.347 (C.52:27H-66.6).

b. The authority shall notify all qualified businesses in the enterprise zones extended pursuant to subsection a. of this section that the benefits authorized by sections 16 through 20 of P.L.1983, c.303 (C.52:27H-75 through C.52:27H-79) and by section 23 of P.L.2004, c.65 (C.52:27H-87.1) have been extended to qualified businesses, and the exemption provided by section 21 of P.L.1983, c.303 (C.52:27H-80) will remain in effect for retail sales made by a certified seller from a place of business, in the enterprise zones for a period commencing on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and ending on September 30, 2019.

c. Notwithstanding the provisions of any law, rule, or regulation to the contrary, after first depositing 10 percent of the gross amount of all revenues received from the taxation of retail sales made by qualified businesses from business locations in each enterprise zone, to which this exemption shall apply, into the account created in the name of the authority in the enterprise zone assistance fund established pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88), the remaining 90 percent shall be deposited immediately in the General Fund upon collection by the Department of the Treasury.

d. The revenues required to be deposited in the enterprise zone assistance fund pursuant to subsection c. of this section shall be used for the purposes of the assistance fund and for the uses prescribed in section 29 of P.L.1983, c.303 (C.52:27H-88), subject to annual appropriations being made for those purposes and uses.

4. (New section) In addition to the duties of the authority required pursuant to section 6 of P.L.1983, c.303 (C.52:27H-65), and any other provisions of law, the authority shall undertake a review and analysis of the Urban Enterprise Zone program created pursuant to the “New Jersey Urban Enterprise Zones Act,” P.L.1983, c.303 (C.52:27H-60 et seq.), and shall report the findings and recommendations of the authority to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, no later than the date the Governor transmits the budget message for the fiscal year ending June 30, 2020 to the Legislature. The authority may enter into an agreement with a third party, including, but not limited to, a public institution of higher education in the State or an independent consulting firm, for purposes of preparing all or part of the report. The report shall include, but not be limited to, an assessment of the following aspects of the “New Jersey Urban Enterprise Zones Act,” P.L.1983, c.303 (C.52:27H-60 et seq.):

a. the appropriateness of the criteria evaluated when designating an enterprise zone or UEZ-impacted business district;

b. any additional criteria that should be considered when making or reviewing an enterprise zone designation;

c. whether the designation of a new, or the de-designation of an existing, enterprise zone or UEZ-impacted business district furthers the goals of the “New Jersey Urban Enterprise Zones Act,” and if so, the municipalities, zones, or districts that should be designated or de-designated;

d. impediments to obtaining an enterprise zone or UEZ-impacted business district designation, or to de-designating an existing enterprise zone or district;

e. the economic, employment, and demographic effects attributable to the expiration of the first five enterprise zones;

f. business participation rates; and

g. whether an alternative, location-based program to assist fiscally distressed municipalities is appropriate, and if so, the parameters of such a program that would provide a sufficient return on State investment.

5. This act shall take effect immediately.