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Oct. 24, 2008 - Tracking Legislation Important to the New Jersey Business Community

ECONOMIC DEVELOPMENT

Assembly Budget Committee
New Main Street Program - A-3377 (Schaer/D-36; Fisher/D-3): Committee passed. Appropriates $50 million to the NJ Economic Development Authority to provide guarantees and loans to small and mid-sized businesses and not-for-profit corporations on an expedited basis to stimulate the economy.

ENERGY

Senate Economic Growth Committee
Low Interest Loans for Green Buildings - S-1066 (Smith/D-17; Sarlo/D-36): Committee passed, referred to Senate Budget and Appropriations Committee. Requires the executive director of the NJ Economic Development Authority to establish and administer a program that makes low-interest loans available to a developer or redeveloper who constructs a new building or renovates an existing building that, when completed, qualifies as a high performance green building. A high performance green building is defined in the bill as a building having at least 15,000 square feet in total floor area that is designed and constructed in a manner that achieves at least a silver rating according to the Leadership in Energy and Environmental Design Green Building Rating System as adopted by the United States Green Building Council.

HEALTH

Assembly Health and Senior Services Committee
NJ Health Insurance Connector Act - A-1939 (Conaway/D-7; Watson Coleman/D-15): Committee passed. Establishes the NJ Health Insurance Connector as an independent public entity, in but not of the NJ Department of Banking and Insurance, with certain authority to facilitate the availability and choice of health benefits plans offered to employees of small employers that employ between two and 50 employees. The Chamber is concerned about the creation of another layer of government inserted in the health care delivery process and the impact this might have on existing relationships between employers and carriers. In addition, evidence that this is a solution to an existing problem has yet to be offered.

Assembly Health and Senior Services Committee
Electronic Health Information Technology Fund - A-3368 (Conaway/D-7): Committee passed. Establishes the Electronic Health Information Technology Fund (e-HIT fund). The Office for e-HIT, in collaboration with the NJ Health Information Technology Commission, is directed to develop a statewide health information technology plan that will create an effective, efficient system of collecting, accessing and distributing electronic health information. While the Chamber has long supported the creation and utilization of electronic medical records, we oppose the funding mechanism established under this bill. Adding more than $20 million in fees to insurance carriers exacerbates an already bad situation in terms of health care affordability.

Assembly Consumer Affairs Committee
Pharmacy Quality Improvement and Error Prevention Act - A-1803 (Albano/D-1; Vainieri Huttle/D-37): Committee passed. Establishes a 24-member Medication Error Prevention Task Force to provide guidelines for the NJ State Board of Pharmacy to utilize in implementing medication error prevention, pharmacy quality improvement and consumer education programs. The guidelines provided by the task force are required to address topics, including the type of situations in which a pharmacist should be required to report that a medication-related error may have occurred. The Chamber supports efforts to prevent medical errors and increase quality since this lowers the costs of premiums.

LABOR

Worker Compensation Reform - S-1918 (Sarlo/D-36; Madden/D-4; Egan/D-17; Cohen/D-20; Giblin/D-34; Barnes/D-18): Senate passed 38-0. Authorizes the Insurance Fraud Prosecutor to investigate, and if warranted, prosecute, cases of failure to provide workers' compensation insurance coverage. Amendments to the bill stipulate that this may only occur after the employer has been given a reasonable opportunity to obtain that coverage. This bill is part of a package that implements steps towards reforming the state's worker compensation system.

TAXATION

Senate Commerce Committee
Improving NJ's Corporate Governance Laws - S-2049/A-2882 (Adler/D-6; Sarlo/D-36; Diegnan/D-18; Vas/D-19; Milam/D-1; Watson Coleman/D-15; Lampitt/D-6) and S-2050/A-2879 (Adler/D-6; Sarlo/D-36; Diegnan/D-18; Vas/D-19; Chivukula/D-17; DeAngelo/D-14; Watson Coleman/D-15; Lampitt/D-6): Committee passed. These bills (part of a seven-bill package) are designed to update New Jersey's corporate governance laws to make it easier for corporations to conduct business in our state. Many of the legislative changes proposed are modeled on Delaware General Corporation Law.

Corporate Business Tax Reform - S-2130 (Codey/D-27; Buono/D-18): Senate passed 38-0. Extends the net operating loss (NOL) carryover period from seven to 20 years. This legislation will bring New Jersey's tax policies more in line with others states and make us more competitive. Reforming our business tax climate is vital to retaining businesses, attracting capital investment and growing good jobs.

Senate Budget and Appropriations Committee
Financial Crisis Impact on New Jersey - The Committee heard testimony from economists on the current financial crisis and its impact on the state budget. James Hughes, dean of the Rutgers Bloustein School of Planning and Public Policy, provided committee members with an update on the economy and future projections. Noting decreased private sector employment, increased unemployment rates and increased office market vacancies, Hughes predicted that recessionary conditions will continue well into 2009 or beyond, and New Jersey will continue to see declines in our construction, manufacturing, trade and transportation, retail, financial, leisure and hospitality sectors. However, there may be modest gains in the information technology and health sectors.

Based on historical trend lines, Hughes reported that it is possible to see an additional loss of 67,000 to 247,000 private sector jobs. Additionally, in response to questioning about the impact of the new 2.5% COAH fee, Hughes told the committee members that this fee is a deterrent to investment during these difficult times. Rutgers economist Joseph Seneca highlighted the importance of focusing on our state's business climate and tax structure to encourage private sector investment.

Legislative Budget Finance Officer David Rosen discussed the recently released revenue collections for the first quarter of Fiscal 2009, which are $47 million (-0.7 percent) below estimates. Rosen cautioned against making assumptions based on these figures as first quarter figures can be unreliable, but did agree that we should be particularly concerned about sales tax collections, which were down 4.8 percent the first quarter of 2008. Gross income tax revenues are slightly under target, Corporate Business Tax Collections are above target, and the realty transfer fee is down 25 percent. Rosen noted that revenue assumptions in the fiscal 2009 budget were very conservative, so the state's downward adjustments may not be as significant as other states, but he agreed that the Governor's prediction of a $400 million shortfall for the current fiscal budget is a reasonable projection. The fiscal 2010 budget faces a $3 billion to 4 billion shortfall.

Assembly Housing and Local Government Committee
Tax on Oil Refineries - A-2599 (Burzichelli/D-3; Fisher/D-3): Committee passed. Permits municipalities to establish a tax on an entity that engages in the bulk transfer, storage, discharge, refining, blending or packaging of crude oils or its refined products. The State Chamber opposes the imposition of a tax on a specific industry during this unstable and uncertain economic climate.

Assembly Appropriations Committee
Corporate Business Tax Reform - A-2722 (Vas/D-19; Greenwald/D-6; Coutinho/D-29): Committee passed. Repeals the "throwout" rule, a CBT provision which requires a New Jersey company (when calculating its corporate business tax liability) to include income earned in another state if that state chooses not to tax or is unable to tax that income. New Jersey is one of only two states that utilize this onerous provision. Additionally, this bill repeals the "regular place of business" provision, which requires a multi-state corporation to maintain an office with at least one employee outside the state in order to allocate its income on the same basis as corporations with multiple business locations. New Jersey is the only state with this requirement. Our business tax policies impact the way that our state is perceived in the national and global marketplace. Reforming our business tax climate is vital to retaining and attracting businesses.

Assembly Appropriations Committee
Taxing Rental Vehicles - A-2765 (Coutinho/D-29; Spencer/D-29): Committee passed. Authorizes certain municipalities to impose a tax on motor vehicle rentals to fund redevelopment plan activities. In 2006, the auto rental industry was required to charge an additional $5 domestic security fee on top of the cost of a car rental. Additional taxes on this industry to cover redevelopment projects is detrimental.