SENATE ECONOMIC GROWTH, AGRICULTURE AND TOURISM COMMITTEE

STATEMENT TO

SENATE, No. 1928

with committee amendments

STATE OF NEW JERSEY

DATED: MAY 8, 1997

      The Senate Economic Growth, Agriculture and Tourism Committee reports favorably and with committee amendments Senate Bill No. 1928. 

      This bill, as amended by the committee, authorizes the State Treasurer to establish a special fund in the State's General Fund to be known as the "Economic Growth Fund" (hereinafter, the "fund"). The amended bill also permits the State Treasurer to deposit into the fund up to one-half of the sales tax revenues that are received from economic growth areas designated in economic growth plans to be submitted to the Treasurer by developers. Although the revenues deposited into the fund are derived from the State Sales and Use Tax or other revenues collected by the State Treasurer, the revenues shall not be considered part of the General Fund and shall not be commingled with other General Fund moneys.

      The amended bill provides that the moneys deposited in the fund may be used to pay for the principal and interest on bonds to finance, within a designated economic growth area or in certain adjacent locations, economic development projects that the State Treasurer determines would not be undertaken without State financing.

      A developer may seek eligibility for State financing from the fund by submitting a development plan to the State Treasurer who shall review the plan, in consultation with the Commissioner of Commerce and Economic Development and the New Jersey Economic Development Authority, in accordance with criteria contained in the amended bill.

      The amended bill requires the State Treasurer to determine that a proposed development will generate significant new sales tax or other revenues and new jobs before granting eligibility for State financing to a proposed development. The amended bill further requires the State Treasurer to make certain findings concerning the feasibility of the proposed development and the ability of the developer to complete the proposed development.

      The committee amended the bill to require that developers who submit plans to the State Treasurer shall include a provision that contracts for the acquisition, construction, reconstruction or rehabilitation of land or property and improvements thereon provide for a payment of not less than the prevailing wage. The committee also amended the bill to authorize the State Treasurer to require developers and their project contractors to provide guarantee payment bonds for construction work pertaining to developments receiving State financing.