N.J. Admin. Code § 19:31Q-1.7

Current through Register Vol. 56, No. 12, June 17, 2024

Section 19:31Q-1.7 - Review of application and certification of project completion

(a) A business seeking an approval of tax credits for a qualified business facility shall apply for tax credits prior to July 1, 2019, except as set forth at N.J.A.C. 19:31Q-1.3(b) and except for businesses seeking a credit for a mega project, which shall apply by September 18, 2017, four years after the effective date of P.L. 2013, c. 161.

(b) The Authority shall conduct a review of the applications commencing with the completed application bearing the earliest submission date or if interest in the program so warrants, at its discretion and upon notice, institute a competitive application process whereby all applications submitted by a date certain will be evaluated as if submitted on that date. The Authority may require the submission of additional information to complete the application or may require the resubmission of the entire application, if incomplete. In order to be deemed complete, the application shall identify the proposed project site and demonstrate financial and organizational ability to undertake the proposed project through evidence of available capital sufficient to complete the project. The review will determine whether the applicant:

1. Complies with the eligibility criteria;

2. Satisfies the submission requirements; and

3. Provides adequate information for the subject application.

(c) In determining whether the company meets the net positive economic benefits test pursuant to N.J.A.C. 19:31Q-1.3(a)3ii and as certified by the chief executive officer pursuant to N.J.A.C. 19:31Q-1.5(a)2iv, the Authority's consideration shall include, but not be limited to, the local and State taxes paid directly by and generated indirectly by the business, property taxes or payment in lieu of taxes paid directly by and generated indirectly by the business, taxes paid directly or generated indirectly by new employees and retained employees for which the award of tax credits will be a material factor in the business's decision to retain the employees in the State, and peripheral economic growth caused by the business's relocation, provided that such determination shall be limited to the net positive economic benefits derived from the capital investment commenced after the submission of an application to the Authority. Retained employees in a project in a Garden State Growth Zone that qualifies under the Municipal Rehabilitation and Economic Recovery Act pursuant to P.L. 2002, c. 43 (N.J.S.A. 52:27BBB-1 et seq.), or a project located in a Garden State Growth Zone that contains a Tourism District as established pursuant to section 5 at P.L. 2011, c. 18 (N.J.S.A. 5:12-219), and regulated by the Casino Reinvestment Development Authority shall not be included unless the business demonstrates that the award of tax credits will be a material factor to retain the employees in the State in addition to demonstrating the material factor provision at N.J.A.C. 19:31Q-1.3(a)3iii(4). For a project located in a Garden State Growth Zone, the Authority may award bonuses in its net positive economic benefit calculation including, but not limited to, full payment of taxes for a qualified business facility that receives a tax abatement pursuant to the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq. With regard to a project located in a Garden State Growth Zone that qualified for the Municipal Rehabilitation and Economic Recovery Act, P.L. 2002, c. 43 (N.J.S.A. 52:27BBB-1 et seq.), the net positive economic benefits test may utilize the value of those property taxes subject to the provisions of section 24 at P.L. 2013, c. 161 (N.J.S.A. 52:27D-489s), or the value of those property taxes that would have been assessed on the new construction, improvements, or substantial rehabilitation of structures on real property if the structures were not exempt because they are on real property owned by a public entity and incremental sales and excise taxes that are derived from activities within the area and which are rebated or retained by the municipality pursuant to the New Jersey Urban Enterprise Zones Act, P.L. 1983, c. 303 (N.J.S.A. 52:27H-60 et seq.) or any other law providing for such rebate or retention.

(d) Upon completion of the review of an application pursuant to (b) and (c) above, and receipt of a recommendation from Authority staff on the application, the Board shall determine whether or not to approve the application, and the maximum amount of tax credits to be granted and, shall promptly notify the applicant and the Director of the Division of Taxation of the determination. When considering an application involving intra-State job transfers, after staff's review of the materials submitted by the applicant, testing the validity of financial information and assumptions through the use of computer models and, to the extent necessary, seeking input from third-party consultants, the cost which will be paid by the applicant, the Board shall make a separate determination to verify and confirm by way of making a factual finding by separate vote that the jobs are at risk of leaving the State, and as to the date or dates at which the Authority expects that those jobs would actually leave the State, or, with respect to projects located in a Garden State Growth Zone that qualifies pursuant to the Municipal Rehabilitation and Economic Recovery Act, P.L. 2002, c. 43 (N.J.S.A. 52:27BBB-1 et seq.), that the provision of tax credits under the program is a material factor in the business's decision to make a capital investment and locate in a Garden State Growth Zone that qualifies pursuant to the Municipal Rehabilitation and Economic Recovery Act, P.L. 2002, c. 43 (N.J.S.A. 52:27BBB-1 et seq.). The Board's award of the credits will be subject to conditions subsequent that must be met in order to retain the credits. An approval letter setting forth the conditions subsequent will be sent to the applicant. Such conditions shall include, but not be limited to, the requirement that the project complies with the Authority's prevailing wage requirements, P.L. 2007, c. 245 (N.J.S.A. 34:1B-5.1), and affirmative action requirements, P.L. 1979, c. 303 (N.J.S.A. 34:1B-5.4), that the project does not violate any environmental law requirements, and requirements regarding the use of renewable energy, energy-efficient technology, and non-renewable resources in order to reduce environmental degradation and encourage long-term cost reduction.

1. If the application is approved, the project approval is subject to the terms and conditions of the approval letter and incentive agreement, and any benefits under the program are subject to the completion of the project and satisfaction of the capital investment and employment qualifications required for the Grow New Jersey tax credits.

2. In the approval letter to the business, the Authority shall set a date by which its approval will expire.

(e) Within 12 months following the date of application approval by the Authority, each approved business shall submit progress information indicating that the business has site plan approval, committed financing for and site control of the qualified business facility, except that a business shall have 24 months to submit such progress information for a mega project or for a qualified business facility that consists of new construction. Unless otherwise determined by the Authority in its sole discretion, the Authority's approval of the tax credits shall expire if the progress information is not received by the Authority within the required period of time, or if progress as indicated has not been achieved.

(f) Upon completion of the capital investment and employment requirements of the program, the business shall submit certifications evidencing that the business has satisfied the conditions relating to capital investment and any employment requirements with supporting evidence satisfactory to the Authority.

1. The business shall submit a certification of a certified public accountant, which may be made pursuant to an "agreed upon procedures" letter acceptable to the Authority, relating to the capital investment. The amount of the capital investment in the certification that has been approved by the Authority shall not be increased regardless of additional capital investment in the qualified business facility, provided, however, that in no event will the amount of capital investment exceed the amount of capital investment previously approved by the Board. In the event the capital investment is reduced below the capital investment in the approval of the incentive grant, the Authority may reevaluate the net positive economic benefit and reduce the size of the grant accordingly. If the certification indicates that the capital investment is less than the minimum eligibility requirement, the business shall no longer be eligible for tax credits.

2. The business shall submit a certification of the chief financial officer of the business, which certification shall be acceptable to the Authority, evidencing that the business has satisfied the conditions relating to any employment requirements. The number of new and retained full-time jobs in the certification shall be utilized by the Authority in the calculation of tax credits and shall not be increased regardless of additional jobs located at the qualified business facility, and, except as set forth at N.J.A.C. 19:31Q-1.11(e), in no event will the number of jobs exceed the number of jobs previously approved by the Board. To the extent a business has received an award for both new and retained full-time jobs, the business shall meet the employment requirements as set forth at N.J.A.C. 19:31Q-1.4(d). In the event the number of new and/or retained full-time jobs is reduced below the number of new and/or retained full-time jobs in the approval of the incentive grant, the Authority may reevaluate the net positive economic benefit and reduce the size of the grant accordingly. If the certification indicates that the employment is less than the minimum eligibility requirement, the business shall no longer be eligible for tax credits.

3. Absent extenuating circumstances and the written approval of the Authority, the certification with respect to capital investment and employment shall be submitted within three years following the date of approval of the application. The Authority may grant two six-month extensions of the deadline, however, in no event, shall the incentive effective date occur later than four years following the date of approval of an application by the Authority, except that:

i. As of January 19, 2016, the effective date of P.L. 2015, c. 252, a business that applied for the tax credit prior to July 1, 2014, pursuant to P.L. 2011, c. 149 (N.J.S.A. 34:1B-242 et seq.), and was required to submit its documentation no later than July 28, 2017, shall submit its documentation to the Authority no later than July 28, 2018, indicating that it has met the capital investment and employment requirements specified in the incentive agreement for certification of its tax credit amount; and

ii. The Authority may grant additional extensions for projects located in a Garden State Growth Zone with a capital investment greater than $ 100,000,000 and a total tax credit award greater than $ 100,000,000 as a result of force majeure that will be recognized under the following circumstances, which shall be demonstrated by the business to the satisfaction of the Authority:

(1) The business is delayed due to unforeseeable acts related to the project beyond the business's control and without its fault or negligence;

(2) The business is using best efforts, with all due diligence, to proceed with the completion of the project and the submission of the certification;

(3) The business has made, and continues to make, all reasonable efforts to prevent, avoid, mitigate, and overcome the delay;

(4) The business provides timely notice to the Authority of the delay, not to exceed 30 days after the business's actual or constructive knowledge of the delay; and

(5) The business provides periodic reports, not less than every 30 days, of the status of the delay and the steps being taken to mitigate or overcome the delay.

4. An organization operating a qualified incubator facility shall provide written evidence that the qualified business facility continues to qualify as a qualified incubator facility and that the benefit from the award of tax credits will inure to the businesses and positions on whose behalf the application was made.

5. The Authority may seek additional information from the business and/or information from the Department of Labor and Workforce Development to support the certification.

(g) Once the Authority accepts the certification of the business that it has satisfied the capital investment and employment requirements, if any, of the program, and the Authority determines that other necessary conditions have been met, within 90 days of the submission of the certifications and evidence satisfactory to the Authority, the Authority shall notify the business and notify the Director of the Division of Taxation, and the business shall receive its tax credit certificate which will be based on the information submitted in the certifications under (f) above, provided it shall not exceed the maximum amount determined by the Board under (d) above. The use of the tax credit certificate shall be subject to the receipt of an annual letter of compliance issued by the Authority.

N.J. Admin. Code § 19:31Q-1.7

Amended by R.2015 d.014, effective 1/20/2015.
See: 46 N.J.R. 1593(a), 47 N.J.R. 277(b).
Rewrote the section.
Amended by R.2015 d.132, effective 8/17/2015.
See: 47 N.J.R. 258(a), 47 N.J.R. 2178(b).
Rewrote (c) and (e).
Amended by R.2015 d.201, effective 12/21/2015.
See: 47 N.J.R. 2055(a), 47 N.J.R. 3160(a).
In the introductory paragraph of (f), deleted "of a certified public accountant, which may be made pursuant to an 'agreed upon procedures' letter acceptable to the Authority" following "certifications"; and in (f)1 and (f)2, inserted the first sentence.
Amended by R.2016 d.059, effective 6/6/2016.
See: 47 N.J.R. 2341(a), 48 N.J.R. 977(b).
Added new (f)4, and recodified former (f)4 as (f)5.
Amended by R.2017 d.010, effective 1/3/2017.
See: 48 N.J.R. 2031(a), 49 N.J.R. 134(a).
In (c), substituted "employees and" for "or", inserted "for which the award of tax credits will be a material factor in the business's decision to retain the employees in the State", and inserted the second sentence; in (e), substituted "12" for "six" and "24" for "12"; in (f)2, deleted a comma following "award" and substituted "as set forth in N.J.A.C. 19:31-18.4(d)" for "related to the retained full-time jobs before receiving benefits for new full-time jobs"; and rewrote (f)3.

Recodified from 19:31-18.7 56 N.J.R. 807(a), effective 5/6/2024