ASSEMBLY, No. 2778

 

STATE OF NEW JERSEY

 

INTRODUCED MARCH 3, 1997

 

 

By Assemblywoman ALLEN and Assemblyman DeSOPO

 

 

An Act authorizing the recapture of certain business incentives and supplementing Title 54 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 "New Jersey Corporate and Business Responsibility Act."

 

    2.    The Legislature finds and declares that:

    a.    New Jersey has a long history of providing tax credits and other incentives to businesses which relocate, expand or initiate operations in, and thereby create jobs and contribute to the economic development of the State;

    b.    More recently, businesses that have been long-time employers and contributors to New Jersey's economy, and which may have accepted business incentives from time to time, have closed facilities and relocated operations, or moved large numbers of jobs to other states;

    c.    In the wake of such moves, New Jersey residents are left unemployed and those who remain employed feel less secure in the knowledge that they will remain on the payroll;

    d.    While business incentives are an important aspect of any state's economic development program, businesses which take advantage of them must realize that they are expected to make a commitment to the State in return;

    e.    It is therefore in the public interest to authorize the recapture of some portion of these financial incentives when a beneficiary business later abandons the State. Doing so will alert businesses seeking to take advantage of these incentives to their commitment and at the same time will serve to reassure New Jersey's workforce that their jobs will stay in New Jersey.

 

    3.    As used in this act:

    "Business-related incentive" means a tax credit allowed under the Corporation Business Tax Act (1945), P.L.1945, c. 162 (C. 54:10A-1 et seq.), the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., the "New Jersey Urban Enterprise Zones Act," P.L.1983, c.303 (C.52:27H-60 et seq.), or other law of this State or a grant or other incentive received by a recipient business for the purpose of encouraging the creation, expansion or retention of business and employment in this State;

    "Recipient business" means a corporation, partnership, sole proprietorship, or other business entity which has applied for or has received or been allowed a business-related incentive.

 

    4.    The State Treasurer, the Commissioner of Labor and the Commissioner of Commerce and Economic Development shall constitute a council, to be known as the Corporate and Business Responsibility Council. Pursuant to section 7 of this act, the council shall publish in the New Jersey Register a list of those incentives which it determines to be business-related incentives. The council shall monitor the receipt of business-related incentives and the creation, expansion and retention of business and employment by recipient businesses. Whenever a member of the council has reason to believe that a recipient business intends to relocate or move a substantial number of jobs located in New Jersey to another state, he shall immediately notify the Treasurer so that he may institute assessment procedures pursuant to section 5 of this act.

 

    5.    Whenever the State Treasurer receives notice that a recipient business intends to relocate outside the State or move a substantial number of jobs located in New Jersey to another state, he shall calculate and assess the recipient business for a portion of the business-related incentives pursuant to this section. The assessment shall be not less than 70% of the total amount of each business-related incentive allowed or received by the recipient business in the seven years immediately preceding the relocation or move, except that the amount of the assessment shall be reduced by 10% of the amount of the incentive for each year elapsed since the incentive was allowed or received. The assessment shall become due and payable upon the relocation or move by the recipient business.

 

    6.    At the time a recipient business applies for a business-related incentive, it shall be notified of the assessment authorized by section 5 of this act, and as a condition of receipt of that incentive, it shall agree to pay any assessment determined pursuant thereto.

 

    7.    The State Treasurer, in consultation with the Commissioner of Labor and the Commissioner of Commerce and Economic Development, shall promulgate rules and regulations to effectuate the provisions of this act, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

 

    8.    This act shall take effect immediately and shall apply to incentives allowed or received after its enactment.

 

 

STATEMENT

 

    This bill authorizes the State Treasurer to recapture a portion of the incentives provided to businesses to move to or expand operations in New Jersey when those businesses later relocate to another state or move a substantial number of jobs from New Jersey. Once the Treasurer is notified that a business which received such an incentive is preparing to leave New Jersey, he is authorized to recapture not less than 70% of the tax credit allowed or other incentive received in the seven years immediately preceding the relocation or move. The assessment will be prorated or reduced at the rate of 10% per year, so that not less than 70% of an incentive received in the year immediately preceding the move can be recaptured, but only 20% of an incentive received five years before the move can be recaptured.

    The Commissioner of Labor and the Commissioner of Commerce and Economic Development are required to work with the Treasurer in determining what incentives should be subject to recapture. They will also monitor the business activities of the recipient businesses and will inform the Treasurer anytime they have reason to believe that a recipient business intends to relocate or move a substantial number of jobs from New Jersey.

    Businesses would receive notice at the time they apply for an incentive subject to recapture, that if they leave New Jersey within seven years of receipt of the incentive, they may be required to repay a portion of the incentive.

 

 

                                                

 

Authorizes recapture of certain business incentives when recipients move out of State.