ASSEMBLY, No. 1872
STATE OF NEW JERSEY
INTRODUCED MAY 2, 1996
By Assemblyman CARABALLO
An Act authorizing the Governor of the State of New Jersey to enter into certain contracts, and allowing the deferral of certain taxes in relation thereto under certain circumstances.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. In exchange for the tax deferrals authorized in section 3 of this act, the Governor is authorized to negotiate and enter into contracts with corporations operating in this State, or desirous of operating in this State, under which:
a. In the case of a corporation already operating in New Jersey, the corporation agrees to increase employment above current levels at each location within the State for a period of at least five years; or
b. In the case of a corporation desirous of establishing or relocating operations in New Jersey, the corporation agrees to maintain a certain level of employment at each location within the State for a period of at least five years; and
c. In either case, the corporation agrees to pay its employees wages at the rate of at least 150% of the State minimum wage established pursuant to section 5 of P.L.1966, c.113 (C.34:11-56a4) and further agrees to provide benefits which are consistent with the State's goal of providing workers with meaningful employment as prescribed by the Commissioner of Labor pursuant to section 4 of this act.
Contracts negotiated by the Governor pursuant to this section shall be subject to review and ratification by the New Jersey Employment Guarantee Incentive Commission as provided in section 2 of this act.
2. a. The New Jersey Employment Guarantee Incentive Commission is created for the purpose of review and ratification of the contracts authorized by section 1 of this act. The commission shall be comprised of 10 members, as follows: four Senators, not more than two of whom shall be of the same political party, appointed by the President of the Senate; four members of the General Assembly, not more than two of whom shall be of the same political party, appointed by the Speaker of the General Assembly; and two members of the public, appointed by the Governor with the advice and consent of the Senate, one of whom shall represent organized labor and one of whom shall represent business. Legislators shall serve for terms concurrent with their legislative terms. Members appointed by the Governor shall serve for terms of three years. Vacancies shall be filled in the same manner as the original appointment.
b. The commission shall review each contract negotiated by the Governor pursuant to section 1 of this act and shall ratify the contract if it is satisfied that it meets the requirements of that section and this act. A contract shall be ratified by an affirmative vote of not less than six members of the commission, at least five of whom shall be legislators. If the commission finds that a contract as negotiated by the Governor does not meet the requirements of this act, it may advise the Governor thereof and request that the Governor renegotiate the terms of the contract that are not satisfactory. The Governor shall resubmit any contract so returned for ratification by the commission within 60 days of its return by the commission.
c. Upon ratification of a contract, the commission and the Governor shall notify the State Treasurer of the terms thereof.
3. Pursuant to regulations promulgated by the State Treasurer, a corporation entering into a ratified contract authorized by this act shall be entitled to a deferral of the tax otherwise due under P.L.1945, c.162 (C.54:10A-1 et seq.), in the amount of 1% of the tax otherwise due for each 1% percent increase in the number of employees hired and working for that corporation in this State under the terms of the contract. The deferral shall be effective for each of the first five full privilege periods after the effective date of the contract. If at the end of those five privilege periods, employment by the corporation in this State has been increased or maintained, as the case may be, at the level agreed to in the contract, and all other conditions of the contract, with respect to the rate of wages paid and benefits provided as required by section 1 of this act, have been satisfied, then the deferral of the tax shall become a permanent abatement of the amount of the tax deferred and otherwise due for each of those five privilege periods. If, however, at any time before the end of the fifth privilege period, the business fails to maintain the level of employment agreed to in the contract, then any deferral shall be canceled and the entire amount of taxes previously deferred shall become due and payable as of the date of the original tax liability.
4. The Commissioner of Labor, after consultation with the New Jersey Employment Guarantee Incentive Commission, shall prescribe by regulation the types of benefits and benefit levels which are consistent with the State's goal of providing meaningful employment.
5. The State Treasurer shall, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), promulgate any other rules and regulations necessary to effectuate the purposes of this act.
6. This act shall take effect immediately.
STATEMENT
This bill authorizes the Governor to negotiate contracts with corporations doing business in this State, or considering a relocation to this State, under which they would receive a deferral of their corporate business tax liability in an amount of 1% for each 1% increase in the number of jobs they agree to maintain in the State for a five-year period. A corporation already operating in New Jersey must agree to increase its employment above current levels at each location within the State for at least five years. A corporation considering the establishment or relocation of operations in New Jersey must agree to maintain a certain level of employment at each location within the State for at least five years. All corporations entering into such an arrangement must also agree to pay employees hired pursuant to the contract at least 150% of the State's minimum wage and to provide benefits consistent with the State's goal of providing workers with meaningful employment.
The bill establishes the New Jersey Employment Guarantee Incentive Commission to review and ratify the contracts authorized by the bill. The commission would be comprised of 10 members, as follows: four Senators, but no more than two from the same political party; four members of the General Assembly, but no more than two from the same political party; and two members of the public, appointed by the Governor with the advice and consent of the Senate, one of whom shall represent organized labor and one of whom shall represent business.
A corporation entering into a contract will be entitled to a deferral of the tax in the amount of 1% for each 1% increase in the number of employees it hires and retains in New Jersey under the contract. The deferral shall be effective for each of the first five full privilege periods, or tax years, after the effective date of the contract. If at the end of those five years, employment by the corporation has been maintained at the level agreed to in the contract and the other terms of the contract with respect to the rate of wages paid and benefits provided have been met, then the deferral of the tax shall become permanent in nature and shall become an abatement against the tax otherwise due for each of those five tax years. If, however, at any time before the end of the fifth tax year, the business fails to maintain the level of employment agreed to in the contract or to meet the other terms of the contract, then any deferral shall be canceled and the entire amount of taxes previously abated shall become due and payable as of the date of the original tax liability.
The Commissioner of Labor, after consultation with the commission, is required to prescribe the types of benefits and benefit levels which are consistent with the State's goal of providing meaningful employment. The State Treasurer is charged with promulgating all other rules and regulations necessary to effectuate the bill's provisions.
Authorizes Governor to enter into certain contracts and allows certain tax deferrals in relation thereto.