LEGISLATIVE FISCAL ESTIMATE

SENATE, No. 3046

STATE OF NEW JERSEY

219th LEGISLATURE

 

DATED: OCTOBER 26, 2020

 

 

SUMMARY

 

Synopsis:

Extends certain document submission deadlines for Urban Transit Hub Tax Credit program and Economic Redevelopment and Growth Grant Program.

Type of Impact:

Annual loss of State revenue.

Agencies Affected:

Economic Development Authority

 

 

Annual Fiscal Impact

 

State Revenue Loss

Indeterminate

 

·         The Office of Legislative Services (OLS) estimates that this bill will result in an indeterminate annual loss of State revenue.  The OLS assumes that some businesses wanting to participate in the programs are likely to miss certain deadlines, due to the Covid-19 public health emergency or other factors, and therefore lose access to the tax credits.  As a result of the deadline extension, more businesses and developers could qualify for the tax credits awards and more tax credits could be awarded.

 

·         The OLS cannot quantify the exact amount of revenue that would be lost because of a lack of data on the specific projects that may be affected by the bill, the amount of tax credits they would receive, the number of businesses and developers that would have lost the tax credits as a result of the old deadline, and the number of businesses and developers that will receive credits with the new deadline.  The OLS notes that to the extent the tax credit programs lead to increased economic activity, the State could realize additional indeterminate revenues.

 

BILL DESCRIPTION

 

      This bill extends the document submission deadlines applicable to a business or developer that was seeking to receive tax credits under the Economic Redevelopment and Growth Grant Program (ERGG) and the Urban Transit Hub Tax Credit Program (UTHTC).

      The original deadline for submitting the required documentation for approval of tax documents for certain residential and commercial UTHTC projects was April 26, 2021.  This bill extends the deadline to December 31, 2023.  The bill also changes the date when approved UTHTC projects will begin forfeiting annual tax credit awards if the project has not been certified as having met investment capital and employment qualifications.  The original deadline was July 28, 2021, and the bill extends it to December 31, 2023.

      The bill also extends the deadline for when developers of certain qualified residential and mixed use parking ERGG projects are required to submit temporary certificates of occupancy to December 31, 2023.  

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates that this bill will result in an indeterminate annual loss of State revenue.  The OLS assumes that some businesses wanting to participate in the ERGG and UTHTC programs are likely to miss certain deadlines, due to the Covid-19 public health emergency or other factors, and therefore lose tax credits.  As a result of the deadline extension, more businesses and developers could qualify for the tax credits awards and more tax credits could be awarded.  The OLS cannot quantify the exact amount of revenue that would be lost because the OLS does not have data on the specific projects that would qualify, the amount of tax credits they would receive, and the number of businesses and developers that would have lost the tax credits as a result of the old deadline.   The OLS also cannot estimate how many businesses will gain tax credit awards as a result of the extension of the deadlines or how many developers will be able to submit the temporary certificates of occupancy by the new deadline.  The OLS notes that to the extent the tax credit programs lead to increased economic activity, the State could realize additional indeterminate revenues.

 

 

Section:

Revenue, Finance and Appropriations

Analyst:

Parag Shende

 Associate Fiscal Analyst

Approved:

Frank W. Haines III

Legislative Budget and Finance Officer

 

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).