Nov. 25, 2008 - Tracking Legislation Important to the New Jersey Business Community
Governor Signs Net Operating Loss Extension Bill – S-2130 (Codey/D-27; Buono/D-18; Geenwald/D-6; McKeon/D-27; Vas/D-19; Pou/D-35): Governor Corzine signed into law on Nov. 24. 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. This was a recommendation included in the Chamber’s Corporate Business Tax Reform Package presented to the Governor and members of the Legislature.
ECONOMIC DEVELOPMENT
Small Business Loans Program – S-4 (Sarlo/D-36) and A-3377 (Schaer/D-36; Fisher/D-3; Spencer/D-29; Conners/D-7; Watson Coleman/D-15; Pou/D-35): Senate passed 37-3. Establishes the Main Street Business Assistance Program, which appropriates $50 million to the New Jersey 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.
Senate Economic Growth Committee
Modifying the Revenue Allocation District Financing Act – S-2299 (Lesniak/D-20): Committee passed. Amends the Revenue Allocation District Financing Act and the Local Redevelopment and Housing Law. The bill increases the revenue sources available for use in a revenue allocation district and broadens the criteria for determining an area in need of rehabilitation. The second part of this bill amends the Redevelopment Area Bond (RAB) Financing Law to provide that county improvement authorities and certain other instrumentalities created by state law may issue bonds under the RAB law. Additionally, the bill authorizes the use of the special assessment for local improvement law for environmental cleanup work.
Senate Economic Growth Committee
Expanding the Urban Transit Hub Credit – S-2379 (Cunningham/D-31; Ruiz/D-29): Committee passed. Expands the eligibility and clarifies certain provisions of the Urban Transit Hub Tax Credit Program, which provides tax credits of up to 100 percent of qualified capital investments made in an urban transit hub. The bill lowers the capital investment threshold from $75 million to $50 million, revises forfeiture requirements, allows the tax credits to be carried forward for 20 years, and allows unused credits to be sold.
HEALTH
Hearing Aid Mandate – S-467 (Buono/D-18; Lance/R-23): Senate passed 39-0. Requires health insurers to cover the cost of hearing aids for individuals 15 years of age and younger. Continuing to mandate benefits severely restricts the ability of insurance companies to control costs, which in turn increases health insurance premiums for employers.
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 40-0. 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 Economic Growth Committee
Tax on Oil Refineries – S-1556 (Sweeney/D-3): Committee passed with amendments, referred to the Senate Budget and Appropriations Committee. Permits municipalities to establish a tax on any entity that engages in the bulk transfer, storage, discharge, refining, blending or packaging of crude oils or its refined products if the total assessed value of all property in a particular municipality drops by 5 percent or more. The State Chamber opposes the imposition of a tax on a specific industry as a way to make up for an overall drop in assessments during an economic downturn.
Corporate Business Tax Reform – S-3 (Codey/D-27) and S-1874 (Oroho/R-24; Sweeney/D-3) and A-2722 (Vas/D-19; Greenwald/D-6; Coutinho/D-29): Senate passed 39-0. Repeals two corporate business tax (CBT) provisions -- the “throwout” rule and the “regular place of business” requirement. The throwout rule 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 the income. New Jersey is one of only two states that utilize this onerous provision. The regular place of business provision 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. These were recommendations included in the Chamber’s Corporate Business Tax Reform Package presented to the Governor and members of the Legislature.
Invest In NJ Tax Benefit Program Act – S-6/S-2213 (Buono/D-18; Turner/D-15; Van Drew/D-1): Senate passed 33-7. Establishes a grant program in the New Jersey Economic Development Authority to provide businesses with grants of up to 7 percent of their capital investment costs and $3,000 for each new job created and retained for one year. This new incentive program is designed to stimulate capital investment and job creation.
BEIP Credits – S-265 (Kyrillos/R-13; Cunningham/D-31): Senate passed 40-0. Allows employers that participate in the Business Employment Incentive Program (BEIP) to elect to take an amount of their business employment incentive payment as a credit against corporation business tax liability, whether computed as a regular corporation business tax liability or as an alternative minimum assessment. The employment incentive can be authorized for up to 10 years. The State Chamber supports allowing businesses flexibility in deciding how to best use incentive program funds.
