Proposed New Rules / Amendments
The New Jersey Economic Development Authority (“NJEDA” or “Authority”) is proposing amendments to its existing debarment and disqualification rules at N.J.A.C.19:30-2 et seq, and proposing new rules relating to the suspension of applicants for Authority financial assistance and Authority contractors. In accordance with Executive Order 63, these draft rules are being provided to enable the public to provide input.
The draft new rules are proposed to codify the Authority’s suspension procedure in accordance with Executive Order 34 (Byrne) and Executive Order 189 (Kean).
The draft amendments to the existing debarment and disqualification rules are proposed to update the rules consistent with current Authority policies and procedures. These debarment and disqualification rules were last updated in 2010.
The New Jersey Economic Development Authority (“NJEDA” or “Authority”) is proposing amendments to its existing prevailing wage rules at N.J.A.C. 19:30-4.1 through -4.5, and a new prevailing wage rule, N.J.A.C. 19:30-4.1A. In accordance with Executive Order 63, these draft rules are being provided to enable the public to provide input.
New rule, N.J.A.C. 19:30-4.1A, provides clarity that these rules are promulgated by the Authority to implement the provisions of the Authority’s enabling statute, N.J.S.A. 34:1B-5.1, and indicates that compliance may be required with other statutes, rules, and regulations.
The draft amendments to the existing prevailing wage rules at N.J.A.C. 19:30-4.1 through -4.5 are proposed to update the rules to be consistent with current statutory requirements, including but not limited to the New Jersey Economic Recovery Act of 2020, P.L. 2020, c. 156 (as amended by P.L. 2021, c. 160), the Public Works Contractor Registration Act, N.J.S.A. 34:11-56.58, et seq, and the Prevailing Wage Act, N.J.S.A. 34:11-56-25, et seq.
Main Street Recovery Finance Program
Proposed Amendments at N.J.A.C. 19:31E-1.6.
The New Jersey Economic Development Authority (“NJEDA” or “Authority”) is proposing amendments to its Main Street Recovery Finance Program (Program) Rules at N.J.A.C. 19:31E-1.6 to clarify the fee structure for the Program, as well as to codify the $100 application-approval fee for the Small Business Lease Grant and Small Business Improvement Grant Programs previously approved by the Authority’s Board on August 11, 2021.
Authority Professional Services Contracts Rules Amendments
Proposed Amendments N.J.A.C. 19:30-8.1 through 8.3.
The New Jersey Economic Development Authority (“NJEDA” or “Authority”) is proposing amendments to the existing rules at N.J.A.C. 19:30-8.1 through 8.3.
The New Jersey Economic Development Authority (“EDA” or “Authority”) is proposing amendments to its Professional Services Contracts rules at N.J.A.C. 19:30-8.1 through 8.3 to allow firms interested in being qualified to provide professional architectural, professional engineering and related design services, or professional land surveying services exceeding the threshold prescribed in N.J.S.A. 52:34-7 to provide the Authority a current statement of qualifications and supporting data approved by another State agency.
Food Desert Relief Tax Credit Program
Specially Adopted and Concurrently Proposed New Rules: N.J.A.C. 19:31-28
As set forth at proposed N.J.A.C. 19:31-28, the Food Desert Relief Tax Credit Program is a program to provide tax credits to developers and operators of supermarkets and grocery stores located in NJEDA- designated, food desert communities (FDCs) for a portion of project costs or initial operating costs, in accordance with N.J.S.A. 34:1B-306.
The Program focuses on attracting and retaining supermarkets and grocery stores as a component of community development, strengthening food security, and increasing access to nutritious foods. As supermarket developers and operators are both needed to attract and retain supermarkets and grocery stores in New Jersey’s food deserts, the FDRA establishes two types of tax credits:
- A Financing Gap Tax Credit for developers provides up to 40 percent of project costs for the first new supermarket in an FDC, capped at the project financing gap, and up to 20 percent of project costs for the second new supermarket in an FDC, capped at the project financing gap. This includes a reasonable and appropriate return on investment, based on at least 20 percent of capital contributed by the developer (equity). Applicants for the financing gap tax credit may be eligible for a higher cap on their tax credit amount if the supermarket or grocery store has an agreement. A developer approved for a Financing Gap Tax Credit can take the tax credit over a period of four years (the eligibility period) and must remain in compliance with the Program for an additional three years (the commitment period).
- An Initial Operating Cost Tax Credit for supermarket operators provides for the lower of either the initial operating shortfall or 100 percent of initial operating costs for the first new supermarket in an FDC, and the lower of either the initial operating shortfall or 50 percent of initial operating costs for the second new supermarket in an FDC. An operator approved for an Initial Operating Cost Tax Credit can take the tax credit over a period of up to three years (the eligibility period) and must remain in compliance with the Program for an additional four years (the commitment period).
To be eligible for the Program, a project must meet various eligibility criteria at the time of application, including, but not limited to:
- Demonstrating that the project is not economically feasible without the incentive award;
- Demonstrating that the new supermarket or grocery store will operate on a full-time basis during both the eligibility period and commitment period;
- Demonstrating that the new supermarket or grocery store will be economically and commercially viable by the last year of the commitment period;
- That the project is located in an NJEDA-designated food desert community;
- Commitment to accept benefits from Federal nutrition assistance programs, including, but not limited to: the Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC);
- Commitment to devote at least 10 percent of retail space to fresh and/or frozen fruits and vegetables; and
- Commitment to hold a community listening session at least once per year.
In addition to the eligibility requirements, the developer and the operator must also be in substantial good standing with the Department of Labor and Workforce Development, the Department of Environmental Protection, and the Division of Taxation within the Department of the Treasury or have a corrective action plan. The Program rules also require that all projects that receive Food Desert Relief Tax Credits must comply with the EDA’s prevailing wage requirements at P.L. 2007, c. 245 (N.J.S.A. 34:1B-5.1) and N.J.A.C. 19:30-4. Applications for this Program will be accepted on a rolling basis.
The new rules implement the Food Desert Relief Tax Credit Program and do not establish the auctions, grants, and technical assistance programs created pursuant to N.J.S.A. 34:1B-306(d), 306(e), and 306(f).
Garden State Film and Digital Media Jobs Act
Proposed Amendments: N.J.A.C. 19:31-21.1 through 21.10 and Proposed New Rules: N.J.A.C. 19:31-21.8, 21.9, and 21.13
The Garden State Film and Digital Media Jobs Act, P.L. 2018, c. 56 (N.J.S.A. 54:10A-5.39b and 54A:4-12b), provides a transferable credit against the corporation business tax and the gross income tax for qualified expenses incurred for the production of certain film and digital media content in New Jersey. The goal of the program is to incentivize production companies to film and create digital media content in New Jersey.
The New Jersey Economic Development Authority (“NJEDA” or “Authority”) is proposing amendments to the existing rules and new rules to incorporate provisions of recent statutory revisions, pursuant to the New Jersey Economic Recovery Act of 2020, P.L. 2020, c. 156 (as amended by P.L. 2021, c. 160); as well as P.L. 2019, c. 506, and P.L. 2021, c. 367.
The Film and Digital Media Tax Credit Program encourages the production of film and digital media content in the State. The program makes available $ 100,000,000 in annual allocation for films and $ 30,000,000 annual allocation for digital media projects.
To be eligible for the production of a film, the film project must be a feature film, a television series, or a television show of 22 minutes or more in length, intended for a national viewing audience; or a television series or a television show of 22 minutes or more in length intended for a national or regional viewing audience, including, but not limited to, a game show, award show, or other gala event filmed and produced at a nonprofit arts and cultural venue receiving State funding. The film project must meet one of the following eligibility criteria:
1. At least 60 percent of the total film production expenses (exclusive of post-production costs) must be incurred for services and goods purchased through vendors authorized to do business in New Jersey; or
2. Qualified film production expenses (expenses incurred in New Jersey for the production of a film) must exceed one million dollars per production for a single privilege period for goods and services purchased through vendors authorized to do business in New Jersey.
Productions featuring news, current events, weather, market reports, public programming, talk shows, sports events, or reality shows; productions that solicit funds; productions containing obscene material, as defined at N.J.S.A. 2C:34-2 and 2C:34-3; and productions primarily for private, industrial, corporate, or institutional purposes are not eligible for film tax credits.
To be eligible for the production of digital media content, the production must meet both eligibility thresholds below:
1. At least two million dollars of the total digital media production expenses must be incurred for services performed, and goods purchased, through vendors authorized to do business in New Jersey; and
2. Fifty percent of the qualified digital media production expenses must be incurred for wages and salaries paid to full-time employees in New Jersey.
For film projects, the available tax credit is based on the qualified film production expenses incurred in New Jersey. The tax credit is 35 percent of all qualified film production expenses, including labor; except that the tax credit is reduced to 30 percent for all qualified film production expenses for goods and services incurred for use within the 30-mile radius of Columbus Circle, New York City. Expenses for advertising, promotional materials, and wage and salary payments, in excess of $ 500,000 per person, are not eligible under the program. Additionally, all qualifying wage and salary payments are subject to a 6.37 percent withholding requirement, including payments made to independent contractors and loan out companies.
For digital media projects, the available tax credit is based on the qualified digital media production expenses incurred in New Jersey. The credit is 30 percent of all qualified digital media production expenses, with an increase to 35 percent for all qualified digital media production expenses, for goods and services, incurred through vendors authorized to transact business in New Jersey, who have a primary business location in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, or Salem Counties.
For both film and digital media projects, there is an available bonus of two percent for productions that exhibit satisfactory evidence of a commitment to prioritizing hiring minority and women employees across all levels of the production. Eligible productions that make additional commitments for hiring certain local on-screen talent from underrepresented ethnic groups may receive an additional two percent bonus.
To encourage the development of large, long-term, studio facilities, two additional and separate allocation designations were created by the Economic Recovery Act of 2020, for studio partners and film-lease partners. Studio partners are a designated production company that has made the commitment to produce films or commercial audiovisual products in New Jersey, and occupy a production facility of at least 250,000 square feet, for a period of at least 10 years. Film-lease partners are an Authority-designated production company that has made a commitment to lease or acquire a production facility of at least 50,000 square feet, for a period of five to 10 successive years, and commits to spend an annual average of $ 50,000,000 in qualified film production expenses during that period.
Studio partners and film-lease partners will first apply to the Authority to be designated, and once designated, submit subsequent applications for each film project produced in New Jersey thereafter. There are three designations available for studio partners; designations will be made on a first-in-time basis. However, in circumstances where interest in the studio partner designation is expected to surpass available designations, the Authority may, at its discretion and upon notice, institute a competitive application process whereby all completed applications submitted by a date certain will be evaluated. There are no restrictions on the number of production companies that can receive the film-lease partners designation.
The tax-credit percentage for studio and film-lease partners is calculated the same as the legacy program; however, studio and film-lease partners benefit from a separate approval queue and separate annual allocation of $ 100,000,000 for each designation. Above-the-line (ATL) wages and salaries are still capped at $ 500,000, per person, for film-lease partners. Depending on the amount of qualified film production expenses involved in the project, a studio partner is able to capture additional wage and salary expenses as follows:
● A studio partner that incurs $ 15 million, but less than $ 50 million, in qualified film production expenses can include up to $ 15 million in ATL wage and salary expenses, as qualified per project;
● A studio partner that incurs $ 50 million or more, but less than $ 100 million, in qualified film production expenses can include up to $ 25 million in ATL wage and salary expenses, as qualified per project;
● A studio partner that incurs $ 100 million or more, but less than $ 150 million, in qualified film production expenses can include up to $ 40 million in ATL wage and salary expenses, as qualified per project; and
● A studio partner that incurs $ 150 million or more in qualified film production expenses can include up to $ 60 million in ATL wage and salary expenses, as qualified per project.
The initial NJEDA Board approval for film and digital media production applications will set a not to exceed amount of tax credits available for the project. Once the film or digital media project is completed, the applicant will submit a final certification of expenses through a qualified, independent, certified public accountant in accordance with the procedures on the Authority’s website. Once the final certification is reviewed and approved, it will be sent to the Division of Taxation for review, and ultimate issuance of the tax credit.
The tax credits awarded through the Film and Digital Media Tax Credit Program can be used to offset either corporate-business tax or gross-income tax and can be transferred to another taxpayer for no less than 75 percent of their value. The amount of the credit allowed may be carried forward to the seven tax years following the tax year the credit was initially allowed.
Beginning in State Fiscal Year 2025, in addition to the $ 100,000,000 made available for studio partners annually, the Authority may make an additional $ 350,000,000 available to studio partner projects. In addition to the $ 100,000,000 made available annually to film-lease partners, the Authority may make available an additional $ 100,000,000 for film-lease projects.
In any State fiscal year where there are any unused or unredeemed tax credits, the Authority will certify the amount of the excess, and carry it forward to the subsequent fiscal year. Unused, or unredeemed, tax credits for studio partners and digital media projects shall be carried forward only into the subsequent allocation for those specific categories. The unused or unredeemed amount of tax credits for legacy film and film-lease partners may be allocated between the categories at the Authorities discretion.
Aspire
Specially Adopted and Concurrently Proposed New Rules: N.J.A.C. 19:31-23
In accordance with P.L. 2020, c. 156, the New Jersey Economic Development Authority has adopted the following new rules to implement the provisions of the New Jersey Economic Recovery Act of 2020, establishing the New Jersey Aspire Program Act, sections 54 through 67 of P.L. 2020, c. 156, as amended by P.L. 2021, c. 160. The new rules became effective on November 15, 2021, upon acceptance for filing by the Office of Administrative Law. The specially adopted new rules shall be effective for a period not to exceed 180 days from the date of filing, that is, until May 14, 2022. Concurrently, the provisions of the new rules are being proposed for readoption in accordance with the normal rulemaking requirements of the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq. As the NJEDA has filed this notice of readoption before May 14, 2022, the expiration date is extended 180 days to November 10, 2022, pursuant to N.J.S.A. 52:14B-5.1.c. The concurrently proposed new rules will become effective and permanent upon acceptance for filing by the Office of Administrative Law (see N.J.A.C. 1:30-6.4(f)), if filed on or before November 10, 2022. The NJEDA has provided as 60-day comment period on this notice of concurrent proposal, therefore, this notice is excepted from the rulemaking calendar requirement, pursuant to N.J.A.C. 1:30-3.3(a)5.
Archived Proposed Rules/Amendments
Historic Property Reinvestment Program
Proposed New Rules: N.J.A.C. 19:31-26
The New Jersey Economic Development Authority (“NJEDA” or “Authority”) is proposing rules to establish tax credits for part of the cost of rehabilitating historic properties in this State pursuant to the Historic Property Reinvestment Act (Act), sections 2 through 8 of the New Jersey Economic Recovery Act of 2020, P.L. 2020, c. 156 (N.J.S.A. 34:1B-270 through 34:1B-276).
The New Jersey Economic Recovery Act of 2020, P.L. 2020, c. 156, as amended by P.L. 2021, c. 160, creates a package of tax incentive, financing, and grant programs that will address the ongoing economic impacts of the COVID-19 pandemic and build a stronger, fairer New Jersey economy.
The Historic Property Reinvestment Program focuses on historic preservation as a component of community development. The program, which is capped at $300 million over six years, focuses on historic preservation as a component of community development and encourages long-term private investment into the State, while preserving properties that are of historic significance. The program can be used to leverage the federal Historic Tax Credit Program to incentivize rehabilitation of identified historic properties. To be eligible for such awards, a rehabilitation project must:
- Demonstrate at the time of application that without the tax credit, the rehabilitation project is not economically feasible.
- Prove that a project financing gap exists, and the tax credit award being considered for the project is equal to or less than the project financing gap.
- Not have commenced any construction or rehabilitation activity at the site of the rehabilitation project prior to submitting an application and will not commence any construction or rehabilitation activity until the execution of the rehabilitation agreement (with certain limited exceptions).
- Include business entity contributed equity of at least 20 percent of the total cost of rehabilitation, or if the project is located in a government-restricted municipality, the equity shall be at least 10 percent of the total cost of rehabilitation.
- Meet minimum cost requirements such that the cost of rehabilitation for the selected rehabilitation period shall not be less than $5,000 or the adjusted basis of the structure, whichever is greater.
- For a residential project, the structure must serve a residential rental purpose and also contain at least four dwelling units.
- For a residential project or a redevelopment project consisting of newly constructed residential units, at least 20 percent of the residential units constructed shall be reserved for occupancy by low- and moderate-income households with affordability controls as required under the “Fair Housing Act.”
- Include the rehabilitation of a qualified property, or a transformative property.
The Historic Property Rehabilitation Program awards are calculated based on a percentage of the cost of rehabilitation (eligible costs), with the percentage dependent on both whether the project includes a qualified property or a transformative property and on location of the project. Most eligible projects can receive tax credits worth up to 40 percent of eligible costs with a maximum project cap of $4 million for qualified properties. Eligible projects located within a qualified incentive tract or in government-restricted municipalities can receive tax credits worth up to 45 percent of eligible project costs with a maximum project cap of $8 million for qualified properties. Transformative projects can receive tax credits worth up to 45 percent of eligible project costs with a maximum project cap of $50 million. Awards are scored on a competitive basis.
Tax credits are only available for rehabilitation of “qualified” or “transformative” properties. “Qualified property” means a property located in the State of New Jersey that is an income producing property, and that is: 1. Individually listed, or located in a district listed on the National Register of Historic Places, the New Jersey Register of Historic Places, or designated by the Pinelands Commission; or 2. Individually identified or registered, or located in a district composed of properties or structures and such district is identified or registered, for protection as significant historic resources in accordance with criteria established by a municipality in which the property, structure or district is located if the criteria for identification or registration has been approved by the State Historic Preservation Officer as suitable for substantially achieving the purpose of preserving and rehabilitating buildings of historic significance within the jurisdiction of the municipality. If located within a district, the property must be certified by the Officer as contributing to the historic significance of the district.
A “transformative property” means a property that:
- Is an income producing property, not including residential, whose rehabilitation the Authority determines will generate a substantial increase in State revenues through the creation of increased business activity within the surrounding areas.
- Is individually listed on the New Jersey Register of Historic Places.
- Received a Determination of Eligibility from the Keeper of the National Register of Historic Places.
- Is located within a one-half mile radius of the center point of a transit village, as designated by the NJDOT and within a city of the first class, OR located within a government-restricted municipality.
Emerge Program
Proposed Repeal and New Rule: N.J.A.C. 19:31-22.16
Proposed Amendments: N.J.A.C. 19:31-22.1 through 22.11, 22.14, and 22.15
The NJEDA is proposing amendments to the rules implementing the Emerge program pursuant to recently enacted statutory revisions in P.L. 2021, c. 160 (approved July 2, 2021). In accordance with the New Jersey Economic Recovery Act of 2020, P.L. 2020, c. 156, the NJEDA specially adopted and concurrently proposed the Emerge program rules on May 20, 2021, and adopted the concurrently proposed rules on December 15, 2021, as simultaneously noticed along with these proposed amendments. Under the New Jersey Economic Recovery Act of 2020, the Emerge Program Act, sections 68 through 81 of P.L. 2020, c. 156, was established to encourage economic development in the State’s priority sectors by providing per-job tax credits for up to seven years. To be eligible for the program, a project must meet various eligibility criteria at application and at project certification, including:
● Be located in a qualified incentive area;
● Meet minimum capital investment requirements, except for small businesses;
● Yield a net positive benefit to the State of at least 400 percent of the requested tax credit (projects in certain more highly distressed areas of the State are subject to a lower net positive benefit threshold);
● Demonstrate that the award of the tax credit is a “material factor” in the decision to create or retain at least the minimum number of full-time jobs in New Jersey;
● Ensure that at least 80 percent of incented employees’ work time is spent in New Jersey;
● Ensure that the qualified business facility can accommodate at least 50 percent of incented new jobs, and to receive tax credits for retained jobs, the qualified business facility must accommodate all the retained full-time jobs at the time of application; and
● Commit to stay at the qualified business facility for 1.5 times the eligibility period.
Aspire
Specially Adopted and Concurrently Proposed New Rules: N.J.A.C. 19:31-23
In accordance with P.L. 2020, c. 156, the New Jersey Economic Development Authority has adopted the following new rules to implement the provisions of the New Jersey Economic Recovery Act of 2020, establishing the New Jersey Aspire Program Act, sections 54 through 67 of P.L. 2020, c. 156, as amended by P.L. 2021, c. 160. The new rules became effective on November 15, 2021, upon acceptance for filing by the Office of Administrative Law. The specially adopted new rules shall be effective for a period not to exceed 180 days from the date of filing, that is, until May 14, 2022. Concurrently, the provisions of the new rules are being proposed for readoption in accordance with the normal rulemaking requirements of the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq. As the NJEDA has filed this notice of readoption before May 14, 2022, the expiration date is extended 180 days to November 10, 2022, pursuant to N.J.S.A. 52:14B-5.1.c. The concurrently proposed new rules will become effective and permanent upon acceptance for filing by the Office of Administrative Law (see N.J.A.C. 1:30-6.4(f)), if filed on or before November 10, 2022. The NJEDA has provided as 60-day comment period on this notice of concurrent proposal, therefore, this notice is excepted from the rulemaking calendar requirement, pursuant to N.J.A.C. 1:30-3.3(a)5.
