New Jersey Economic Recovery Act of 2020
On December 21, 2020, the New Jersey Legislature passed the “New Jersey Economic Recovery Act of 2020” (the “Economic Recovery Act” or the "Act"), an omnibus piece of legislation which provides support for various programs and policies related to jobs, property development, food deserts, community partnerships, and small and early-stage businesses, among others. The bill now heads to Governor Murphy, who is expected to sign it into law.
In an effort to bolster development, the Economic Recovery Act creates, among other things, various tax credit programs which will provide qualifying taxpayers with tax credits for project financing gaps for: (i) qualified redevelopment projects, (ii) rehabilitating qualified historic New Jersey properties, (iii) remediation costs for qualified brownfield redevelopment projects, and (iv) establishing and retaining new supermarkets and grocery stores in food desert communities.
Additional programs under the Economic Recovery Act will provide tax credits to qualifying taxpayers: (i) to incentivize the expansion and development of targeted industries and areas in New Jersey, and (ii) to encourage economic development, job creation, and the retention of jobs in imminent danger of leaving New Jersey (similar to the now sunset Grow New Jersey Assistance Program).
The Economic Recovery Act also creates economic redevelopment programs and policies relating to (i) grants, loans, and loan guarantees to small businesses, (ii) advancing the competitiveness of the State's businesses in the global economy, and (iii) a public-private partnership giving start-up rent grants to collaborative workspaces. The Act requires the EDA to adopt rules requiring that not less than the prevailing wage rate be paid to a broad range of workers employed in connection with certain incentive programs.
Two important features of the Economic Recovery Act, which were critical to garnering the Governor’s support, deal with the breadth of the incentives and oversight. The Act establishes caps on the on the amount of tax credits that can be awarded for the programs that are established by the Act. Moreover, it includes the “Economic Development Authority Integrity and Protection Act”, which among other things, creates an Office of the Economic Development Inspector General for oversight purposes.