N.J. Admin. Code § 19:31X-1.2
The following words and terms, as used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Act" means the New Jersey Innovation Evergreen Act, sections 20 through 34 of P.L. 2020, c. 156, as amended (N.J.S.A. 34:1B-288 through 34:1B-302).
"Affiliate" means an entity that directly or indirectly controls, is under common control with, or is controlled by, another entity. Control exists in all cases in which the entities are members of a controlled group of corporations, as defined pursuant to section 1563 of the Internal Revenue Code of 1986 (26 U.S.C. § 1563), or the entities are an organization in a group of organizations under common control, as defined pursuant to subsection (c) of section 414 of the Internal Revenue Code of 1986 (26 U.S.C. § 414).
"Authority" means the New Jersey Economic Development Authority established by section 4 at P.L. 1974, c. 80 (N.J.S.A. 34:1B-4).
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"Evergreen special purpose vehicle" means an entity controlled by or under common control with a qualified venture firm that is formed solely by the qualified venture firm for the purpose of the fund investing in a qualified business alongside the investment from the qualified venture firm active fund.
"Evergreen special purpose vehicle manager" means the managing member or general partner of an Evergreen special purpose vehicle.
"Filling a position in New Jersey" means filling a position with a full-time employee whose primary office is in New Jersey and who spends at least 80 percent of their time in New Jersey, or any other period of time generally accepted by custom or practice as full-time employment at a location, as determined by the Authority.
"Follow-on investment" means a subsequent investment in a qualified business made by the fund, through an Evergreen special purpose vehicle, corresponding to the additional investment made by a qualified venture firm that has a previous qualified investment in such qualified business.
"Full-time employee" means a person who is in a position in the United States that is employed by a qualified business on a permanent or indefinite basis for consideration for at least 35 hours a week, or any other standard of service generally accepted by custom or practice, as determined by the Authority, as full-time employment, or who is a partner of a qualified business who works for the partnership for at least 35 hours a week, or any other standard of service generally accepted by custom or practice, as determined by the Authority, as full-time employment. A "full-time employee" shall not include any person who works as an independent contractor or on a consulting basis for a qualified business; any person who works as an intern, as a temporary employee, or in a temporary position; or any employee in a position that is primarily engaged in final point-of-sale retail.
"Fund" means the New Jersey Innovation Evergreen Fund established by section 23 at P.L. 2020, c. 156 (N.J.S.A. 34:1B-291).
"High-growth business" means a business that is growing significantly faster than the average growth rate of the economy or, in the absence of historic data necessary to verify the business's past operations, is a start-up business that is investing in developing a product or new business model that will allow it to grow significantly faster than the average growth rate of the economy within the next three to five years. The Authority shall establish, and publish on its website, metrics for determining the growth rate of the economy and the relative rate of growth of businesses, which may be based on revenues, number of customers, or valuation and may take into consideration the growth rate of the industry of the high-growth business.
"Incentive area" means an area in this State designated pursuant to the State Planning Act, P.L. 1985, c. 398 (N.J.S.A. 52:18A-196 et seq.), as Planning Area 1 (Metropolitan); or that has been designated as a qualified opportunity zone pursuant to 26 U.S.C. § 1400Z-1.
"Innovation ecosystem" means funding, programs, and events that support the establishment and expansion of high-growth business in targeted industries. Examples of such funding, programs, and events include, but are not limited to, mentoring programs for start-ups, meet-up or networking events, funding for locating a business in a collaborative workspace, programs that provide business services, and entrepreneurial education to businesses.
"Intellectual property" means property protected by patent pending, patent awaiting approval, approved patent, registered copyright, or intellectual property licensed from a college or university in New Jersey. For purposes of this definition, "licensed" means intellectual property used pursuant to an agreement that states that it is granting an exclusive license that authorizes the licensee to control aspects of the development of the protected proprietary intellectual property.
"New Jersey S corporation" means the same as the term is defined in section 12 at P.L. 1993, c. 173 (N.J.S.A. 54A:5-10).
"Opportunity zone" means a Federal population census tract in this State that was eligible to be designated as a qualified opportunity zone pursuant to 26 U.S.C. § 1400Z-1.
"Partnership" means an entity classified as a partnership for Federal income tax purposes.
"Principal business operations" means at least 50 percent of the business's full-time employees reside in the State, or at least 50 percent of the business's payroll for full-time employees is paid to individuals living in this State. For purposes of this definition, payroll shall mean wages.
"Program" means the New Jersey Innovation Evergreen Program established by section 22 of P.L. 2020, c. 156 (N.J.S.A. 34:1B-290).
"Qualified business" means a high-growth business that, at the time of the first qualified investment in the business, and throughout the qualified business compliance period, is registered to do business in this State with the Director of the Division of Revenue and Enterprise Services in the Department of the Treasury; has its principal business operations located in the State and intends to maintain its principal business operations in the State after receiving a qualified investment under the program; is engaged in a targeted industry; and employs fewer than 250 full-time employees at the time of the qualified investment.
"Qualified business compliance period" means the period starting with the qualified investment in a qualified business and ending on the sale or other disposition of all shares of stock of the qualified business from the Evergreen special purpose vehicle, including any distribution of the shares to the Authority. If the distribution of the shares of stock from the Evergreen special purpose vehicle to the Authority occurs in less than five years after the qualified investment, the qualified business compliance period shall be five years or such other shorter qualified business compliance period determined by the Authority, which may be based on factors including, but not limited to, the number of the qualified business full-time employees filling a position in New Jersey.
"Qualified business side agreement" means the agreement entered into by the Authority, the qualified venture firm, and the qualified business relating to the qualified investment in the qualified business.
"Qualified investment" means the direct investment of money by the Fund, through an Evergreen special purpose vehicle, corresponding with a qualified venture firm's initial investment in a qualified business for the purchase of shares of stock, which may include option or warrant rights, and the right to make a follow-on investment at a later date, all of which is matched by the initial investment by a qualified venture firm. The exercise of the option or warrant, or the decision to make a follow-on investment, shall be at the discretion of the Authority.
"Qualified venture firm" means a venture firm that is certified by the Authority as a qualified venture firm pursuant to section 29 at P.L. 2020, c. 156 (N.J.S.A. 34:1B-297) and N.J.A.C. 19:31X-1.7.
"Qualified venture firm active fund" means the entity managed by the qualified venture firm or an affiliate of the qualified venture firm from which the qualified venture firm invests in a qualified business alongside the qualified investment.
"Qualified venture firm agreement" means the agreement entered into by the Authority and the qualified venture firm regarding the participation of the qualified venture firm in the program.
"Qualified venture firm managing individual" means the individual with the authority to execute and bind the qualified venture firm to agreements.
"Reserves" means capital in the Fund that has been reserved for the purposes set forth at N.J.A.C. 19:31X-1.3(e).
"Strategic commitment" means the commitment by the tax credit purchaser to strengthen the State's innovation ecosystem, which may include, but is not limited to, providing mentorship, networking, sales and distribution pipeline access, and collaboration opportunities to qualified businesses that receive qualified investments.
"Targeted industry" means any industry identified from time to time by the Authority that shall initially include advanced transportation and logistics, advanced manufacturing, aviation, autonomous vehicle and zero-emission vehicle research or development, clean energy, life sciences, hemp processing, information and high technology, finance and insurance, professional services, film and digital media, non-final point of sale retail food and beverage businesses, including food innovation, and other innovative industries that disrupt current technologies or business models. A qualified business shall be considered to be in a targeted industry if the business is engaged primarily in a targeted industry. The Authority may consider whether a qualified business is engaged primarily in another innovative industry that disrupts current technologies or business models, by assessing factors including, but not limited to, whether businesses in the industry are offering products or services that significantly improve current market offerings on the basis of price or other performance levels, whether the new industry creates opportunities for new businesses to enter and redefine the supply chain or value chain of an industry, or whether the industry utilizes new technology or business processes that allow New Jersey-based businesses to collect a share of revenues that were traditionally only available to companies in other geographies.
"Tax credit bid" means the submission of the strategic commitment, the tax credit purchase offer, and all other documents required pursuant to N.J.A.C. 19:31X-1.4(e) for a bid for tax credit as part of the tax credit auction.
"Tax credit purchase offer" means the specific cash dollar amount offered by a potential tax credit purchaser to purchase a specific amount of tax credits.
"Tax credit purchaser" means an entity registered to do business with the Director of the Division of Revenue and Enterprise Services in the Department of the Treasury, subject to tax liability pursuant to section 5 at P.L. 1945, c. 162 (N.J.S.A. 54:10A-5), and that purchases an allocation of tax credits under the program.
"University spin-off business" means a business whose primary function is to commercialize proprietary intellectual property developed at a New Jersey-based college or university, or a business that was created by a then-current faculty member or then currently enrolled student utilizing the facilities and/or resources of such college or university. To be a "university spin-off business," the business must have been formed less than 10 years prior to the date of the qualified investment application. Formation shall be based on the earliest use of the intellectual property of a predecessor entity, irrespective of the corporate structure, or tax status of the business.
"Venture firm" means a partnership, corporation, trust, or limited liability company that invests cash in a business during the early or expansion stages of a business in exchange for an equity stake in the business in which the investment is made. Venture firm may include a venture capital fund, a family office fund, or a corporate investor fund, provided that a professional manager administers the venture firm.
N.J. Admin. Code § 19:31X-1.2