N.J. Admin. Code § 19:31S-1.3

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

Section 19:31S-1.3 - Eligibility criteria

(a) In order to be eligible for an offshore wind economic development tax credit for a qualified wind energy facility:

1. If the business is other than a tenant, the business shall:

i. Make or acquire capital investments in a qualified wind energy facility totaling not less than $ 50,000,000. A business that acquires a qualified wind energy facility after August 19, 2010, the effective date of the Act, shall also be deemed to have acquired the capital investment made or acquired by the seller, subject to the disqualifications at N.J.A.C. 19:31S-1.13. The capital investments of the owner shall include capital investments made by a tenant and may include any tenant allowance provided by the owner in the lease and any tenant improvements funded by a tenant(s), but only to the extent necessary to meet the owner's minimum capital investment of $ 50,000,000 provided that the owner so indicates in the owner's application or certification and further provided that such tenant allowance or tenant improvements meet the definition of capital investment;

ii. Employ, in the aggregate, with tenants at the qualified wind energy facility, the minimum number of new full-time employees at the qualified wind energy facility or through an equipment supply coordination agreement, except that any business with the prorated annual minimum number of new full-time employees will be eligible for a prorated award; and

iii. Demonstrate to the Authority that the State's financial support of the proposed capital investment will yield a net positive economic benefit in the amount required at (c) below; and

2. If the business is a tenant in a qualified wind energy facility:

i. The owner of the qualified wind energy facility shall make or acquire capital investments in the facility totaling not less than $ 50,000,000 in accordance with (a)1i above;

ii. The tenant shall occupy a leased area of the qualified wind energy facility that represents at least $ 17,500,000 of the capital investment in the qualified wind energy facility, as calculated pursuant to (b) below;

iii. Employ, in the aggregate, with other tenants at the qualified wind energy facility, the minimum number of new full-time employees at the qualified wind energy facility or through an equipment supply coordination agreement, except that any business with the prorated annual minimum number of new full-time employees will be eligible for a prorated award;

iv. The business shall lease the qualified wind energy facility for a term of not less than the eligibility period; and

v. Except for tenants of a qualified wind energy facility for which the owner has previously demonstrated a net positive economic benefit and received approval of the qualified wind energy facility or approval of tax credits, the business shall demonstrate to the Authority that the State's financial support of the proposed capital investment will yield a net positive economic benefit in the amount required at (c) below. For purposes of this evaluation, the tenant may include the benefit derived from the owner's capital investment.

(b) In order to determine whether the tenant's leasable area of the qualified wind energy facility satisfies the capital investment eligibility threshold, the Authority shall multiply the owner's capital investment by the fraction, the numerator of which is the leased net leasable area and the denominator of which is the total net leasable area. Capital investments made by a tenant and not allocated to meet the owner's minimum capital investment threshold of $ 50,000,000 shall be added to the amount of capital investment represented by the tenant's leased area in the qualified wind energy facility.

(c) The net positive economic benefit required at (a)1iii and (a)2v above shall equal at least 110 percent of the approved tax credit allocation amount, to the State for the period equal to 75 percent of the useful life of the investment, not to exceed the eligibility period, provided that the Authority may determine, at its discretion, that the net positive economic benefit may extend to 20 years based on the length of the business's commitment to maintain the project at the qualified wind energy facility and that the award of tax credits is subject to the recoupment provisions included in the approval letter. To support the determination of a net positive economic benefit, the business shall submit to the Authority, prior to approval, a nonbinding letter of intent executed between the Chief Executive Officer of the Authority and the chief executive officer, or equivalent officer for North American operations, of the business stating that the tax credits will yield a net positive economic benefit in the amount required in this subsection, taking into account the criteria listed at N.J.A.C. 19:31-20.7(c). The letter of intent shall also include a certification from the chief executive officer, or equivalent officer for North American operations, of the business that all factual representations made by the business to the Authority since the submission of the application are true under the penalty of perjury. The Authority may make the non-binding letter of intent public, unless the Authority determines that the interests of the State require confidentiality.

(d) Full-time employment for an accounting or privilege period, or the portion thereof after the certification of the business that it has met the capital investment and employment qualifications, shall be determined as the average of the monthly full-time employment for the period or portion thereof.

(e) Because a business may include an affiliate or affiliates, the capital investment and employment requirements may be met by the business or by one or more of its affiliates, and the entity satisfying the capital investment requirement does not need to be the same as the entity satisfying the employment requirement.

(f) A business shall be treated as owner of a qualified wind energy facility if it holds title to the facility or if it ground leases the land underlying the facility for at least 50 years.

(g) A business that is investing in a qualified wind energy facility may apply for tax credits valued at less than the total amount of the capital investments in its project.

N.J. Admin. Code § 19:31S-1.3

Amended by R.2021 d.131, effective 11/15/2021.
See: 53 N.J.R. 1347(a), 53 N.J.R. 1922(a).
Rewrote (a) and (c); and in (f), inserted "or".

Recodified from 19:31-20.3 56 N.J.R. 807(a), effective 5/6/2024