June 25, 2009 - Tracking Legislation Important to the New Jersey Business Community
STATE BUDGET
The below bills regarding the state budget are scheduled to be voted on today in the Senate and Assembly. If the legislation passes, they go to the governor for signature. Under the state constitution, New Jersey must have a spending plan in place by July 1.
Senate Budget and Appropriations Committee and Assembly Budget Committee
Fiscal Year 2010 State Budget – S-2010 (Buono/D-18) and A-4100 (Greenwald/D-6): Committees passed, scheduled for vote today. Appropriates $28.6 billion in state funds and $13.9 billion in federal funds for the state budget for fiscal year 2009-10. The State Chamber is concerned about the impact the budget will have on the employer community, especially small businesses, such as S Corporations, LLCs and Partnerships, as well as large companies that pay the corporate business tax, and insurance companies. The budget relies heavily on generating revenue from high-end earners, even though the income tax is not a stable revenue source.
Senate Budget and Appropriations Committee and Assembly Budget Committee
Extending the Corporate Business Tax – S-2014 (Sweeney/D-3) and A-4105 (Pou/D-35; Evans/D-35): Committees passed, scheduled for vote today. Extends for one year the 4 percent surtax that was imposed on businesses in 2006 as part of their overall corporate business tax (CBT) liability. This extension impacts our larger companies that employ thousands and pay millions in property and corporate taxes to the state and local municipalities. Additionally, the bill decouples the CBT from a federal tax provision that would have allowed businesses to defer their debt income.
Senate Budget and Appropriations Committee and Assembly Budget Committee
Raising the Income Tax Rate – S-2015 (Buono/D-18) and A-4102 (Watson Coleman/D-15): Committees passed, scheduled for vote today. Increases for one year the income tax rate from 6.37 to 8 percent on those earning between $400,000 and $500,000, increases the rate from 8.97 to10.25 percent on income over $500,000, and increases the rate from 10.25 to 10.75 percent on those with incomes over $1 million. This bill also suspends for one year the property tax deduction for non-seniors earning more than $250,000. Those earning more than $150,000 but less than $250,000 are allowed a deduction of $5,000. These changes impact small business owners since many of them - S Corporations, LLCs or Partnerships - pay taxes through their owner’s income. Additionally, the bill taxes New Jersey lottery winnings that exceed $10,000.
Senate Budget and Appropriations Committee and Assembly Budget Committee Raising Insurance Premiums – S-2016 (Sweeney/D-3) and A-4108 (Cryan/D-20; Coutinho/D-29): Committees passed, scheduled for vote today. Increases for one year the tax rate on group accident and health insurance premiums from 1 to 1.35 percent. This bill also increases the premium tax on surplus lines carriers from 3 to 5 percent, makes a one-time transfer of $60 million from the surplus lines fund to the Health Care Subsidy Fund, and imposes a one-year 1.35 percent premium tax on dental service corporations. Increasing the cost of health insurance will ultimately lead to higher healthcare costs on consumers, making insurance less affordable and accessible.
ECONOMIC DEVELOPMENT
Allowing Non-Age-Restricted Housing – S-2577 (Sarlo/D-36; Vitale/D-19; Greenwald/D-6; Malone/R-30; Cruz-Perez/D-5): Senate passed 21-13. The Governor's conditional veto language provides for a flat 20 percent affordable housing set-aside and allows municipalities to consider whether a conversion would be "detrimental to the public good." Additionally, the bill directs the courts to consider "the reasonableness of the decision of the approving board" when deciding an appeal.
Innovation Zones – A-830 (Chivukula/D-17; Greenstein/D-14; Lampitt/D-6): Assembly passed 56-18. This bill codifies a 2004 Executive Order that establishes an “innovation zone” program within the state Economic Development Authority (NJEDA) to stimulate technology industry clusters around New Jersey’s public universities, colleges or research hospitals. This bill requires the NJEDA to modify its existing programs to give bonuses or other incentives to businesses that locate in an innovation zone. Additionally, this initiative requires the Commission on Science and Technology to promote and support networks and collaboration between the local technology industry and university or hospital researchers, and to increase federal funding to universities in areas of strategic importance to New Jersey's technology industry. This bill is designed to keep New Jersey on the cutting edge of development and discovery. The high-tech business sector is an important segment of New Jersey's economy that generates significant revenue and high quality jobs.
Senate Budget and Appropriations Committee and Assembly Budget Committee
NJ Economic Stimulus Act of 2009 – S-2299 (Lesniak/D-20) and A-4048 (Roberts/D-5; Coutinho/D-29; Diegnan/D-18; Wisniewski/D-19): Committees passed. This bill is intended to stimulate economic growth throughout the state by modifying redevelopment, affordable housing and higher education financing laws, and by expanding incentive programs.
Specific provisions include allowing a municipality to establish a local Economic Redevelopment and Growth Grant program to encourage redevelopment projects by reimbursing developers for project financing gaps, as well as expanding the Urban Transit Hub Tax Credit Program by lowering the capital investment threshold from $75 million to $50 million, expanding the credit to light rail stations, revising forfeiture requirements, and permitting owners to meet employment requirements by aggregating employments of tenants. The bill also expands the Technology Business Tax Certificate Transfer Program, which allows unprofitable technology and biotechnology businesses to sell their unused net operating losses (NOLs) and R&D tax credits and suspends the 2.5% COAH fee and allows a refund for commercial and industrial projects that have been issued either preliminary or final approval before July 1, 2010. The bill allows certain municipalities to impose a tax on the rental of motor vehicles within designated industrial zones to fund redevelopment projects and allows higher education institutions to enter into agreements with private entities or municipalities to finance higher education projects.
The State Chamber has concerns with provisions in the bill pertaining to new taxes, no-bid contracts, prevailing wage and project labor agreements.
EDUCATION
Teaching Personal Finance to High School Seniors – A-1943 (Schaer/D-36; Lampitt/D-6; Coutinho/D-29; Vas/D-19; Sweeney/D-3; Bateman/R-16): Senate passed 35-1, sent to the Governor. Establishes a three-year pilot program to provide high school seniors in selected districts with a personal financial literacy course. The goal is to ensure that high school graduates in the pilot districts receive instruction on budgeting, savings and investment, credit card debt, and other issues associated with personal financial responsibility. At the conclusion of the pilot, the Education Commissioner will report to the Governor and the Legislature on the feasibility of implementing the program on a statewide basis. The State Chamber supports this measure as a way to educate students on the workings of the money and credit markets to safeguard against irresponsible spending that leads to excessive personal debt and bankruptcy.
ENERGY
Assembly Environment and Solid Waste Committee
Establishing Green Teams in State Government – A-3082 (Lampitt/D-6): Committee passed. Establishes a “green team” in each department of state g overnment and certain state agencies in the executive branch, the state legislature and the Judiciary to promote, improve, and incorporate best practices for energy conservation and efficiency and environmental sustainability throughout state government. The State Chamber is seeking an amendment from the sponsor that would include a business representative on the team.
ENVIRONMENT
Senate Environment Committee
Mandated Public Access – S-1921 (Ciesla/R-10): Committee held. Mandates public access to tidal waterfront areas and requires certain facilities to pay for off-site public access. The bill in its original form, which the State Chamber supported, would have prohibited the NJ Department of Environmental Protection from requiring public access to areas adjacent to critical infrastructure such as energy facilities, ports, chemical plants, refineries, and military installations. The amended language introduced by Senate Environment Committee Chairman Bob Smith would have provided statutory authority to DEP to force companies to pay for off-site public access.
GOVERNMENT REFORM
Assembly Judiciary Committee and Assembly Budget Committee
Adopting and Distributing Constitution and Bylaws – S-930 (Weinberg/D-37; Allen/R-7)/ A-1904 (Greenstein/D-14; Handlin/R-13; Vainieri Huttle/D-37; Johnson/D-37; Vandervalk/R-39): Committees passed. Requires county political party committees to adopt and distribute a constitution and bylaws, and file a certified list of committee members with the county clerk. The constitution and bylaws must also include procedures for removing a committee officer who is unwilling or unable to serve his or her office in the county committee.
Senate Budget and Appropriations Committee and Assembly Budget Committee
Transferring Municipal Tax Assessment to the County – S-2356 (Sweeney/D-3; Oroho/R-24) and A-3722 (Burzichelli/D-3; Riley/D-3): Committees passed with amendments. Establishes a pilot program in Gloucester County for the transfer of the municipal property tax assessment function to a county assessor. As amended by the committee, the bill requires the state to reimburse each municipality for the costs associated with the revaluation from either the Sharing Available Recourses Efficiently Fund or the Consolidation Fund. The bill also requires the Local Unit Alignment, Reorganization and Consolidation Commission to study this program and issue a report no later than February 1 of the sixth year of the pilot program.
HEALTH
Senate Health, Human Services and Senior Citizens Committee
Bleeding Disorders Treatment Fund – S-1864 (Weinberg/D-37): Committee passed, referred to the Senate Budget and Appropriations Committee. Establishes the Bleeding Disorders Treatment Fund to support certain hemophilia treatment centers. The bill specifically requires an assessment upon manufacturers equal to 6 percent of the average manufacturer’s price for clotting factor sold in New Jersey, and an assessment on home care companies equal to 2 percent of the sales price of each unit of clotting factor sold in New Jersey. Proceeds from the assessments are to be collected by the NJ Department of Health and Senior Services and deposited in the fund.
Hospital Medical Errors – S-2471 (Vitale/D-19; Sweeney/D-3; Weinberg/D-37; Moriarty/D-4; Greenstein/D-14; Conaway/D-7; Greenwald/D-6; Cruz-Perez/D-5; Vas/D-19; Chiappone/D-31): Senate passed 39-0, sent to the Governor. Directs the state Department of Health and Senior Services to include hospital-specific data in the NJ Hospital Performance Report. In addition, since the conditions identified in the 14 patient safety indicators are generally preventable, the bill seeks to prohibit hospitals and physicians from charging for certain medical errors. The State Chamber suggested amendments that would change the bill so hospitals are not punished for errors that happen beyond their control.
Senate Health, Human Services and Senior Citizens Committee
Mandated Universal Health Insurance – SR-47 (Weinberg/D-37; Vitale/D-19)/SR-100 (Rice/D-28): Committee passed. Memorializes Congress and President to enact legislation to provide universal health insurance coverage. While the State Chamber supports smart reform to the health care system, we have serious concerns about a final product that includes an employer mandate, a minimum benefits package, and a government-run plan.
LABOR
Assembly Budget Committee
Protecting the UI Fund – S-562 (Sweeney/D-3; Sarlo/D-36; Burzichelli/D-3; Albano/D-1): Committee passed, Assembly passed 77-0, sent to the Governor. Provides a new, reduced unemployment insurance (UI) tax schedule when the reserves in the state’s UI fund are greater than needed for claims. Aside from the direct employer benefit of reduced UI taxes, this will help prevent an excessive build up in the UI fund balance during periods of growth and high employment, thus reducing the likelihood of the redirection of UI tax revenues to other purposes.
Senate Labor Committee
Revocation of Employer License for Repeat Violations – S-2773 (Sweeney/D-3; Madden/D-4): Committee passed. Concerns suspension and revocation of employer licenses for repeated violations of wage, benefit and tax laws. The State Chamber will review the proposed amendments and analyze the impact on the employer community.
Assembly Budget Committee
Expanding Employment Protection to Emergency Responders: A-1263 (Moriarty/D-4; Burzichelli/D-3; Love/D-4): Committee passed. The Emergency Responders Employment Protection Act would provide employment protection for volunteer emergency responders who, because they are providing emergency services in response to a state of emergency or emergency call, fail to report to work.
*Information provided by the NJ State Chamber of Commerce
