S830

SENATE, No. 830

STATE OF NEW JERSEY

INTRODUCED FEBRUARY 26, 1996

By Senator BUBBA

An Act concerning urban enterprise zones and amending and supplementing P.L.1983, c.303.

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

1. Section 2 of P.L.1983, c.303 (C.52:27H-61) is amended to read as follows:

2. The Legislature finds:

a. That there persist in this State, particularly in its urban centers, areas of economic distress characterized by high unemployment, low investment of new capital, blighted conditions, obsolete or abandoned industrial or commercial structures, and deteriorating tax bases.

b. That the severe and persistent deterioration of these areas demands vigorous and coordinated efforts by private and public entities to restore their prosperity and enable them to resume significant contributions to the economic and social life of the State.

c. That the economic revitalization of these areas requires application of the skills and entrepreneurial vigor of private enterprise; and it is the responsibility of government to provide a framework within which encouragement be given to private capital investment in these areas, disincentives to investment be removed or abated, and mechanisms be provided for the coordination and cooperation of private and public agencies in restoring the economic viability and prosperity of these areas.

d. That the location of areas of economic distress are not necessarily limited by political boundaries; that limiting the benefits that result from zone designation along arbitrary political boundary lines works to the detriment of both designated enterprise zones and economically distressed areas that border designated zones; and that a mechanism is needed by which designated zones may be expanded to encompass a defined economically distressed area irrespective of political boundary lines.

(cf: P.L.1983, c.303, s.2)

2. Section 3 of P.L.1983, c.303 (C.52:27H-62) is amended to read as follows:

3. As used in this act:

a. "Enterprise zone" or "zone" means an urban enterprise zone designated by the authority pursuant to this act and shall include an expanded zone designated pursuant to P.L. , c. (pending before the Legislature as this bill);

b. "Authority" means the New Jersey Urban Enterprise Zone Authority created by this act;

c. "Qualified business" means any entity authorized to do business in the State of New Jersey which, at the time of designation or expansion as an enterprise zone, is engaged in the active conduct of a trade or business in that zone; or an entity which, after that designation or expansion but during the designation or expansion period, becomes newly engaged in the active conduct of a trade or business in that zone and has at least 25% of its full-time employees employed at a business location in the zone, meeting one or more of the following criteria:

(1) Residents within the zone, within another zone or within a qualifying or contiguous municipality; or

(2) Unemployed for at least six months prior to being hired and residing in New Jersey, and recipients of New Jersey public assistance programs for at least six months prior to being hired, or either of the aforesaid; or

(3) Determined to be economically disadvantaged pursuant to the Jobs Training Partnership Act, Pub.L.97-300 (29 U.S.C.§1501 et seq.);

d. "Qualifying municipality" means any municipality in which there was, in the last full calendar year immediately preceding the year in which application for enterprise zone designation is submitted pursuant to section 14 of P.L.1983, c.303 (C.52:27H-73), an annual average of at least 2,000 unemployed persons, and in which the municipal average annual unemployment rate for that year exceeded the State average annual unemployment rate; except that any municipality which qualifies for State aid pursuant to P.L.1978, c.14 (C.52:27D-178 et seq.) shall qualify if its municipal average annual unemployment rate for that year exceeded the State average annual unemployment rate. The annual average of unemployed persons and the average annual unemployment rates shall be estimated for the relevant calendar year by the Office of Labor Statistics, Division of Planning and Research of the State Department of Labor. In addition to those municipalities that qualify pursuant to the criteria set forth above, that municipality accorded priority designation pursuant to subsection e. of section 7 of P.L.1983, c.303 (C.52:27H-66) and that municipality set forth in paragraph (7) of section 3 of P.L.1995, c.382 (C.52:27H-66.1) shall be deemed qualifying municipalities;

e. "Public assistance" means income maintenance funds administered by the Department of Human Services or by a county welfare agency;

f. "Zone development corporation" means a nonprofit corporation or association created or designated by the governing body of a qualifying municipality or a contiguous municipality to formulate and propose a preliminary zone development plan pursuant to section 9 of P.L.1983, c.303 (C.52:27H-68) and to prepare, monitor, administer and implement the zone development plan;

g. "Zone development plan" means a plan adopted by the governing body of a qualifying municipality or a contiguous municipality for the development or expansion of an enterprise zone therein, and for the direction and coordination of activities of the municipality or municipalities, zone businesses and community organizations within the enterprise zone toward the economic betterment of the residents of the zone and the municipality or municipalities;

h. "Zone neighborhood association" means a corporation or association of persons who either are residents of, or have their principal place of employment in, a municipality in which an enterprise zone has been designated pursuant to this act; which is organized under the provisions of Title 15 of the Revised Statutes or Title 15A of the New Jersey Statutes; and which has for its principal purpose the encouragement and support of community activities within, or on behalf of, the zone so as to (1) stimulate economic activity, (2) increase or preserve residential amenities, or (3) otherwise encourage community cooperation in achieving the goals of the zone development plan; and

i. "Enterprise zone assistance fund" or "assistance fund" means the fund created by section 29 of P.L.1983, c.303 (C.52:27H-88).

(cf: P.L.1995, c.382, s.2)

3. Section 6 of P.L.1983, c.303 (C.52:27H-65) is amended to read as follows:

6. It shall be the duty of the authority to:

a. Promulgate criteria for the designation and expansion of zones pursuant to the provisions of this act;

b. Receive and evaluate applications of municipalities for the designation and expansion of zones;

c. Enter into discussions with applying municipalities regarding zone development proposals;

d. Act as agent of the State with respect to zone development plans, and in determining the State-furnished components to be included in those plans;

e. Designate and expand zones in accordance with the provisions of this act and promulgate rules and regulations necessary to carry out its duties under this act;

f. Exercise continuing review and supervision of the implementation of zone development plans;

g. Receive and evaluate proposals of [qualifying] municipalities in which enterprise zones are designated for funding of projects and increased eligible municipal services from the enterprise zone assistance fund, and to certify annually to the State Treasurer amounts to be paid from the enterprise zone assistance fund to support approved projects and increased eligible municipal services in designated enterprise zones;

h. Assist and represent [qualifying] municipalities in any negotiations with, or proceedings before, other agencies of State Government or of the federal government, to secure necessary or appropriate assistance, support and cooperation of those agencies in the implementation of zone development plans in accordance with the provisions of this act and any other applicable State or federal law;

i. Upon request, assist agencies of municipal government in gathering, compiling and organizing data to support an application for designation of a zone or expansion of an existing zone, and in identifying and coordinating the elements of a zone development proposal suitable for the zone sought to be designated or expanded;

j. Provide assistance to State and local government agencies relating to application for the security of permits, licenses and other regulatory approvals required by those agencies, to assure consideration and expeditious handling of regulatory requirements of any zone business, zone business association or zone neighborhood association; regulatory agencies of the State and its agencies and instrumentalities may agree to any simplification, consolidation or other liberalization of procedural requirements which may be requested by the authority and which is not inconsistent with provisions of law;

k. Assist the State in applying to, or entering into negotiations or agreements with, the federal government, for federal enterprise zone designations; and

l . Exercise continuing review of the implementation of this act, and to report annually to the Governor and the Legislature on the effectiveness of enterprise zones in addressing the conditions cited in this act, including any recommendations for legislation to improve the effectiveness of operation of those zones. The report shall be submitted one year from the effective date of this act, and annually thereafter.

(cf: P.L.1983, c.303, s.6)

4. Section 8 of P.L.1983, c.303 (C.52:27H-67) is amended to read as follows:

8. The governing body of any qualifying municipality or the governing body of any municipality that is contiguous to an existing enterprise zone may, by ordinance, create or designate a nonprofit corporation established pursuant to the provisions of Title 15 of the Revised Statutes or Title 15A of the New Jersey Statutes to act as the zone development corporation for the municipality. Any zone development corporation so created or so designated shall include on its board of directors representatives of the government of the [qualifying] municipality, members of the business community thereof, and representatives of community organizations in the municipality, and the total membership of the board of directors shall be broadly representative of businesses and communities within the municipality.

Notwithstanding the provisions of any other law to the contrary, a zone development corporation shall be considered to be a local development corporation for the purpose of receiving any State financial or technical assistance as may be available, and the creation of a zone development corporation shall not preclude a [qualifying] municipality from creating another local development corporation for the municipality with responsibilities not related to the enterprise zone, nor preclude that other corporation from receiving State financial or technical assistance.

(cf: P.L.1993, c.367, s.4)

5. (New section) Whenever the authority expands a zone pursuant to the provisions of P.L. , c. (C. )(pending before the Legislature as this bill), the qualifying municipality and the adjacent municipality or municipalities shall merge zone development corporations in accordance with procedures adopted by the authority. The authority may require a municipality that has not created a zone development corporation to do so for the purpose of merger.

6. Section 9 of P.L.1983, c.303 (C.52:27H-68) is amended to read as follows:

9. Before applying for designation of an enterprise zone or expansion of a zone by a contiguous municipality, the municipal governing body of the qualifying municipality, or, in the case of a zone expansion, the governing body of the municipality into which the enterprise zone would be expanded, shall cause a preliminary zone development plan to be formulated, either by a zone development corporation or by the governing body, with the assistance of those officers and agencies of the municipality as the governing body may see fit. The preliminary zone development plan shall set forth the boundaries of the proposed enterprise zone or of the area into which a zone would be expanded, findings of fact concerning the economic and social conditions existing in the area proposed for an enterprise zone or an area into which a zone would be expanded, and the municipality's policy and intentions for addressing these conditions, and may include proposals respecting:

a. Utilizing the powers conferred on the municipality by law for the purpose of stimulating investment in and economic development of the proposed zone or area into which a zone would be expanded;

b. Utilizing State assistance through the provisions of this act relating to exemptions from, and credits against, State taxes;

c. Securing the involvement in, and commitment to, zone economic development by private entities, including zone neighborhood associations, voluntary community organizations supported by residents and businesses in the zone or area into which a zone would be expanded;

d. Utilizing the powers conferred by law to revise municipal planning and zoning ordinances and other land use regulations as they pertain to the zone, or area into which a zone would be expanded in order to enhance the attraction of the zone or area into which a zone would be expanded to prospective developers;

e. Increasing the availability and efficiency of support services, public and private, generally used by and necessary to the efficient functioning of commercial and industrial facilities in the area, and the extent to which the increase or improvement is to be provided and financed by the municipal government or by other entities.

(cf: P.L.1983, c.539, s.1)

7. Section 10 of P.L.1983, c.303 (C.52:27H-69) is amended to read as follows:

10. An area defined by a continuous border within one qualifying municipality or within two or more contiguous qualifying municipalities and two noncontiguous areas each having a continuous border within two noncontiguous qualifying municipalities shall be eligible for designation as a zone; and an area defined by a continuous border within a qualifying municipality and a contiguous municipality shall be eligible for zone expansion if:

a. It has been designated an "area in need of rehabilitation" pursuant to Article VIII, Section I, paragraph 6 of the Constitution of the State of New Jersey and P.L.1977, c.12 (C.54:4-3.95 et seq.); or is qualified for that designation in the judgment of the authority; and

b. It meets the criteria established by the authority pursuant to this act relating to the incidence of poverty, unemployment and general economic distress.

(cf: P.L.1993, c.367, s.5)

8. Section 13 of P.L.1983, c.303 (C.52:27H-72) is amended to read as follows:

13. a. In designating eligible areas as enterprise zones and in expanding existing zones in accordance with the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), the authority shall accord preference to zone development plans which:

(1) Have the greatest potential for success in stimulating primarily new economic activity in the area;

(2) Are designed to address the greatest degree of urban distress, as measured by existing levels of unemployment, poverty, and property tax arrearages;

(3) Demonstrate the most substantial and reliable commitments of resources by [zone] businesses, [zone] neighborhood associations, voluntary community organizations and other private entities to the economic success of the zone or expanded zone;

(4) Demonstrate the most substantial effort and commitment by the municipality or municipalities to encourage economic activity in the area and to remove disincentives for job creation compatible with the fiscal condition of the municipality or municipalities.

b. In addition to the considerations set forth in subsection a. of this section, the authority in evaluating a zone development plan for designation or expansion purposes shall consider:

(1) The likelihood of attracting federal assistance to projects in the eligible area, and of obtaining federal designation of the area as an enterprise zone for federal tax purposes;

(2) The adverse or beneficial effects of an enterprise zone or an expanded zone located at the proposed area upon economic development activities or projects of State or other public agencies which are in operation, or are approved for operation, in the qualifying municipality and contiguous municipalities;

(3) The degree of commitment made by public and private entities to utilize minority contractors and assure equal opportunities for employment in connection with any construction or reconstruction to be undertaken in the eligible area;

(4) The impact of the zone development plan upon the social, natural and historic environment of the eligible area;

(5) The degree to which the implementation of the plan involves the relocation of residents from the eligible area, and the adequacy of commitments and provisions with respect thereto.

(cf: P.L.1983, c.303, s.13)

9. (New section) a. Any municipality that is contiguous to an existing zone may designate an area that is within the municipal boundary, that is contiguous to the existing zone and that has been set forth in the zone development plan as an expansion area. The municipality may then make written application to the authority to have the designated area appended to the contiguous zone and be eligible for State and federal assistance offered to enterprise zones or either type of assistance. The application shall include the zone development plan adopted for the area and any other information as the authority may require.

b. Upon receipt of an application from the municipality the authority shall review the application to determine whether the area described in the application qualifies for State assistance under the criteria of P.L.1983, c.303 (C.52:27H-60 et seq.). Notwithstanding any provision of law to the contrary, the authority shall append an expansion area to a contiguous enterprise zone if the area satisfies zone criteria regardless of whether the applicant municipality satisfies the definition of qualified municipality.

The authority shall complete its review within 90 days of receipt of an application, but may extend this time period by an additional 60 days if necessary. If the authority denies the application, it shall inform the municipality of that fact in writing setting forth the reasons for the denial.

c. The expansion of an enterprise zone by the authority shall take effect upon the adoption by the municipality of an ordinance accepting that designation.

10. Section 15 of P.L.1983, c.303 (C.52:27H-74) is amended to read as follows:

15. Except as otherwise specified in this act, a qualified business in an enterprise zone shall be eligible to receive from among those benefits authorized in sections 16 through 20 of this act as are determined by the authority. The authority shall state in writing to the qualifying municipality at the time of designation, and the contiguous municipality at the time of expansion, its determinations as to which of those benefits are to apply in an enterprise zone.

(cf: P.L.1983, c.303, s.15)

11. Section 17 of P.L.1983, c.303 (C.52:27H-76) is amended to read as follows:

17. Any qualified business subject to the provisions of the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), as employing a larger number of persons at a place of business located within an enterprise zone designated or expanded pursuant to this act than at all other places of business of the taxpayer within the State, shall be exempt from the net worth tax imposed pursuant to subsection (a) of section 5 of P.L.1945, c.162 (C.54:10A-5(a)), and from the tax imposed by subsection (f) of that section (C.54:10A-5(f)), for a period of 20 tax years from the date of designation or for a period of years commencing on the date of expansion and expiring when the designation of the enterprise zone expires or expansion of the enterprise zone, or for a period of 20 tax years from the date upon which the taxpayer is first subject to the provisions of the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), whichever date is later. The termination of the designation of an enterprise zone at the end of a 20 year designation period shall not terminate the exemption provided under this section if the exemption was granted prior to the end of the designation period. The provisions of this section are subject to the phase-out provisions of P.L.1982, c.55 (C.54:10A-4 et seq.).

(cf: P.L.1983, c.303, s.17)

12. Section 19 of P.L.1983, c.303 (C.52:27H-78) is amended to read as follows:

19. Any qualified business subject to the provisions of the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), as actively engaged in the conduct of business from a location within an enterprise zone designated pursuant to this act, which business at that location consists primarily of manufacturing or other business which is not retail sales or warehousing oriented, shall receive an enterprise zone employee tax credit against the amount of tax imposed under the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), as hereinafter provided:

a. A one-time credit of $1,500.00 for each new full-time, permanent employee employed at that location who is a resident of the [qualifying] municipality in which the designated enterprise zone is located, or any other qualifying municipality in which an urban enterprise zone is located, and who immediately prior to employment by the taxpayer was unemployed for at least 90 days, or was dependent upon public assistance as the primary source of income;

b. A one-time credit of $500.00 for each new full-time, permanent employee employed at that location who is a resident of a [qualifying] municipality in which a designated or expanded enterprise zone is located, or any other qualifying municipality in which an urban enterprise zone is located, who does not meet the requirements of subsection a. of this section, and who was not, immediately prior to employment by the taxpayer, employed at a location within the [qualifying] municipality;

c. A qualified business which is not entitled to an employee tax credit under this section, but meets the eligibility criteria pursuant to the provisions of subsection c. of section 27 of P.L.1983, c.303 (C.52:27H-86), shall receive a one-time credit in an amount equal to 8% of each new investment made by the qualified business in the enterprise zone under an agreement approved by the authority.

This credit shall be applied against the taxpayer's corporation business tax liability subject to the limitations and carry forward provisions set forth in section 18 of P.L.1983, c.303 (C.52:27H-77); provided, however, that a qualified business shall not claim an employee tax credit and an investment tax credit authorized pursuant to this subsection in the same year regardless of whether those credits were earned for the tax year or carried forward from a previous year.

d. The enterprise zone employee tax credit shall be allowed in the tax year immediately following the tax year in which the new full-time, permanent employee was first employed by the taxpayer, and shall be permitted in any tax year of a 20 year period from the date of designation or expansion of the enterprise zone, or of a period of 20 tax years from the date within that designation period upon which the taxpayer is first subject to the provisions of the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), whichever date is later and the termination of the designation of an enterprise zone at the end of a 20 year designation period shall not terminate the eligibility period provided under this section;

e. A tax credit shall be permitted under this section only for those new full-time, permanent employees who have been employed for at least six continuous months by the taxpayer during the tax year for which the tax credit is claimed.

f. A newly employed employee shall not be deemed a new full-time, permanent employee for the purposes of this section unless the total number of full-time, permanent employees, including the newly employed employee, employed by the employer in the zone during the calendar year exceeds the greatest number of full-time, permanent employees employed in the zone by the employer during any prior calendar year during the period commencing with the date of zone designation.

(cf: P.L.1988, c.93, s.4)

13. Section 27 of P.L.1983, c.303 (C.52:27H-86) is amended to read as follows:

27. To be eligible for any of the incentives provided under this act a qualified business must demonstrate to the satisfaction of the authority that:

a. The business will create new employment in the municipality or municipalities; and

b. The business will not create unemployment in other areas of the State, including the municipality or municipalities in which the zone is located.

c. For the purposes of eligibility for the incentives provided under sections 17, 19, 20, and 21 of P.L.1983, c.303 (C.52:27H-76, 52:27H-78, 52:27H-79, and 52:27H-80, respectively), a qualified business shall not be required to meet the requirements of subsection a. of this section, if:

(1) At the time of designation of the enterprise zone or at the time zone designation is extended by expansion to the location of a business, the qualified business had been engaged in the active conduct of a trade or business in that zone or in the added area of that zone for at least one year prior to that designation or expansion;

(2) The qualified business employs fewer than 50 employees;

(3) The qualified business has entered into an agreement, approved by the authority, with the governing body of the [qualifying] municipality or municipalities in which the enterprise zone is located, under which the qualified business agrees to undertake an investment in the enterprise zone in lieu of the employment of new employees. An investment permitted under an agreement shall be in an amount and of a nature which the municipal governing body or bodies and the authority find shall contribute substantially to the economic attractiveness of the enterprise zone, and may include, but shall not be limited to:

(a) The improvement of the exterior appearance or customer facilities of the property constituting the place of business of the qualified business within the zone; provided that the improvement is of a permanent nature and not required to meet existing ordinances or code regulations; or

(b) Monetary contributions to the [qualifying] municipality or municipalities to undertake improvements to increase the safety or attractiveness of the zone to businesses which may wish to locate there or to consumer visitors to the zone, including, but not limited to litter clean-up and control, landscaping, parking areas and facilities, recreational and rest areas and facilities, repair or improvements to public streets, curbing, sidewalks and pedestrian thoroughfares, street lighting, or increased police, fire or sanitation services in the enterprise zone.

In order to meet the requirements of paragraph (3) of this subsection, an investment shall be in an amount no less than $5,000.00 if the qualified business employs 10 or fewer employees, or if the qualified business employs more than 10 employees, not less than the amount produced by multiplying the number of employees employed by the qualified business by $500.00. A qualified business shall be required to make an investment for each year the qualified business does not meet the requirements of subsection a. of this section. In order to receive the incentives permitted by this section, the business shall provide written evidence of the investment to the authority.

(cf: P.L.1993, c.367, s.8)

14. Section 29 of P.L.1983, c.303 (C.52:27H-88) is amended to read as follows:

29. a. There is created an enterprise zone assistance fund to be held by the State Treasurer, which shall be the repository for all moneys required to be deposited therein under section 21 of P.L.1983, c.303 (C.52:27H-80) or moneys appropriated annually to the fund. All moneys deposited in the fund shall be held and disbursed in the amounts necessary to fulfill the purposes of this section and subject to the requirements hereinafter prescribed. The State Treasurer may invest and reinvest any moneys in the fund, or any portion thereof, in legal obligations of the United States or of the State or of any political subdivision thereof. Any income from, interest on, or increment to moneys so invested or reinvested shall be included in the fund.

The State Treasurer shall maintain separate accounts for each enterprise zone designated under this act, and one in the authority's name for the administration of the Urban Enterprise Zone program. The State Treasurer shall credit to each account an amount of the moneys deposited in the fund equal to the amount of revenues collected from the taxation of retail sales made in the zone and appropriated to the enterprise zone assistance fund, or that amount of moneys appropriated to the fund and required to be credited to the enterprise zone account of the [qualifying] municipality or municipalities pursuant to section 21 of P.L.1983, c.303 (C.52:27H-80).

The State Treasurer shall promulgate the rules and regulations necessary to govern the administration of the fund for the purposes of this section.

b. The enterprise zone assistance fund shall be used for the purpose of assisting [qualifying] municipalities in which enterprise zones are designated in undertaking public improvements , economic development projects and in upgrading eligible municipal services in designated enterprise zones.

c. The governing body of a [qualifying] municipality or the governing bodies of municipalities in which an enterprise zone is designated and the zone development corporation created or designated by the municipality or merged by the municipalities for that enterprise zone may, by resolution jointly adopted after public hearing, propose to undertake a project for the public improvement of the enterprise zone or to increase eligible municipal services in the enterprise zone, and to fund that project or increase in eligible municipal services from moneys deposited in the enterprise zone assistance fund and credited to the account maintained by the State Treasurer for the enterprise zone.

The proposal so adopted shall set forth a plan for the project or for the increase in eligible municipal services and shall include:

(1) A description of the proposed project or of the municipal services to be increased;

(2) An estimate of the total project costs, or of the total costs of increasing the municipal services, and an estimate of the amounts of funding necessary annually from the enterprise zone account;

(3) A statement of any other revenue sources to be used to finance the project or to fund the increase in eligible municipal services;

(4) A statement of the time necessary to complete the project, or of the time during which the increased municipal services are to be maintained;

(5) A statement of the manner in which the proposed project or increase in municipal services furthers the municipality's policy and intentions for addressing the economic and social conditions existing in the area of the enterprise zone as set forth in the zone development plan approved by the authority; and

(6) A description of the financial and programmatic controls and reporting mechanisms to be used to guarantee that the funds will be spent in accordance with the plan and that the project or increased municipal service will accomplish its purpose.

As used in this section, "project" means an activity funded by the zone assistance fund through the [qualified] municipality or municipalities within which the zone is located and implemented by the zone development corporation, including the purchasing, leasing, condemning, or otherwise acquiring of land or other property, or an interest therein, in the enterprise zone or as necessary for a right-of-way or other easement to or from the enterprise zone; the relocating and moving of persons or businesses displaced by the acquisition of land or property; the rehabilitation and redevelopment of land or property, including demolition, clearance, removal, relocation, renovation, alteration, construction, reconstruction, installation or repair of a land or a building, street, highway, alley, utility, service or other structure or improvement which will lead to increased economic activity within the zone; the acquisition, construction, reconstruction, rehabilitation, or installation of public facilities and improvements, except buildings and facilities for the general conduct of government and schools; the establishment of revolving loan or grant programs for qualified businesses in the zone to encourage private investment and job creation, matching grant programs for the establishment or operation of pedestrian malls, special improvement districts and tax increment districts, or other appropriate entity; and the costs associated therewith including the costs of an administrative appraisal, economic and environmental analyses, environmental remediation, engineering, planning, design, architectural, surveying or other professional or managerial services necessary to effectuate the project.

As used in this section, "eligible municipal services" means the hiring of additional policemen or firemen assigned duties in the enterprise zone, or the purchasing or leasing of additional police or fire vehicles, equipment or apparatus to be used for the provision of augmented or upgraded public safety services in the enterprise zone and its immediate vicinities.

d. Upon adoption by the governing body of the [qualifying] municipality or the governing bodies of the municipalities within which the zone is located and by the zone development corporation, the proposal shall be sent to the authority for its evaluation and approval. The authority shall approve the proposal if it shall find:

(1) In the case of a project, that the proposed project furthers the policy and intentions of the zone development plan approved by the authority, and that the estimated annual payments for the project from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account;

(2) In the case of an increase in eligible municipal services, that the proposal furthers the policy and intentions of the zone development plan approved by the authority; that the [qualifying] municipality has or municipalities have, as appropriate, furnished satisfactory assurances that the additional policemen or firemen to be hired, or the additional vehicles, equipment or apparatus to be purchased or leased, shall be used to augment or upgrade public safety in the enterprise zone, and shall not be used in other areas of the municipality; that the [qualifying] municipality or municipalities shall annually appropriate for the increased eligible municipal services an amount equal to 20% of the amount of annual payments for the eligible municipal services from the enterprise zone account and shall not request for the increased eligible municipal services an amount equal to more than 35% of the amount of annual payments into the enterprise zone account, unless the municipality and the authority have entered into an agreement or agreements to the contrary prior to July 1, 1992; and that the estimated annual payments for the eligible municipal services from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account.

e. If the authority shall approve the proposal, it shall annually, upon its receipt of a written statement from the governing body of the qualifying municipality and the contiguous municipality, if applicable, and the zone development corporation, certify to the State Treasurer the amount to be paid in that year from the enterprise zone account in the enterprise zone assistance fund with respect to each project or increase in eligible municipal services approved. The authority may at any time revoke its approval of a project or an increase in eligible municipal services if it finds that the annual payments made from the enterprise zone assistance fund are not being used as required by this section.

f. Upon certification by the authority of the annual amount to be paid to a qualifying zone with respect to any project or increase in eligible municipal services, the State Treasurer shall pay in each year to the qualifying municipality and contiguous municipality, if appropriate, from the amounts deposited in the enterprise zone assistance fund the amount so certified, within the limits of the amounts credited to the enterprise zone account of the [qualifying municipality] designated zone.

g. An amount not to exceed one-third of the amount deposited in the account created in the name of the authority in the enterprise zone assistance fund shall be used by the authority for the coordination and administration of the program throughout the State, including but not limited to costs for personnel, operating expenses and marketing. The balance of the remaining amount shall be distributed to qualifying municipalities and contiguous municipalities, if appropriate, in proportion to each municipality's contribution to the enterprise zone assistance fund for the coordination and administration of the program within the municipality, including but not limited to costs for personnel, operating expenses and marketing.

(cf: P.L.1993, c.367, s.9)

15. This act shall take effect immediately.

STATEMENT

Since adoption of the "New Jersey Urban Enterprise Zone Act," P.L.1983, c.303 (C.52:27H-60 et seq.) it has become apparent that the decision to designate urban enterprise zones, subject to limited exceptions, along or within municipal boundary lines has at times worked to the detriment of both designated zones and adjacent areas that have not received zone designation. This is particularly apparent where zone boundaries are along municipal boundaries that divide defined areas of economic distress which is the case of the Bloomfield border with Newark and the Paterson and Passaic borders with Clifton.

By dividing a defined economically distressed area along arbitrary municipal boundary lines that fail to recognize the borders of the economically distressed area, rather than revitalizing the area, the problems characteristic of economically distressed areas are exacerbated. While the portion of the area within the zone may begin to revitalize, that revitalization is frustrated by the continual presence of the bordering distressed area. More troubling, while the area within the zone begins to improve, distressed areas that border the zone continue to deteriorate thus frustrating underlying attempts to revitalize the area as a whole.

It is therefore the intention of this bill to establish a procedure by which existing UEZ's may be expanded in order to encompass a defined economically distressed area. The bill would allow a municipality that borders on an existing UEZ to formulate a zone development plan to expand the existing zone to include a distressed area of the municipality that is contiguous with the existing zone. The municipality may then apply to the UEZ authority to have the area appended to the contiguous zone and be eligible for assistance offered to enterprise zones.

Authorizes expansion of existing UEZs to include contiguous economically distressed areas.