Platform Update

December 2007

ACTION ITEMS

Corporate Business Tax Reform Package Continues Forward: As reported in previous updates, the State Chamber Tax Council has drafted legislation to repeal some of the more onerous Corporate Business Tax (CBT) changes that were enacted in 2002. These have placed New Jersey at a competitive disadvantage with other states. Members of the Tax Council have had several meetings with legislators, representatives of the Office of Economic Growth and the state Division of Taxation to discuss the package and its costs and benefits to the state. While there is support for certain provisions, there are some budgetary aspects that need to be clarified. Tax Council members are working with the Division to estimate the fiscal impact of the reforms and expect to have those answers by the end of the year. Additionally, the NJ Society of CPA’s has joined a growing group of partners endorsing the reform package.  

Public Advocate Addresses Chamber Members: At a recent chamber breakfast, State Public Advocate Ronald Chen discussed his Department’s priorities, including eminent domain reform, affordable housing, energy, and immigration policies. Advocate Chen detailed his main concerns regarding eminent domain abuse: insufficient evidence to designate areas in need of redevelopment, inadequate notice and transparency of process, compensation lower than where it should be, relocation assistance which is lacking at times, and potential conflicts of interest throughout the process. In addition to the courts weighing in on the subject, he noted that the Legislature is currently considering legislation (S-1975 & A-3257) to address some of these issues as well. 

Chen also voiced concern over a lack of affordable housing in New Jersey, particularly for low-income residents, and how this impacts workforce attraction and retention. He reviewed the Council on Affordable Housing’s “Third Round” rule revisions for implementation of affordable housing requirements. 

During his presentation Chen also described his coordination with the Ratepayer Advocate to keep energy costs down by ensuring that all energy customers have adequate options and that costs are shared fairly. They are working with various stakeholders to ensure that the draft Energy Master Plan will result in fair treatment for all consumers.

Finally, Chen discussed his work as Chair of the Governor’s Blue Ribbon Advisory Panel on Immigration Policy, which is tasked with developing recommendations to integrate immigrants in the state. Areas to be examined include education, healthcare, housing, civil rights and workforce development.

Business Incentive Legislation Advances: Last week, two bills advocated by the Platform Coalition were released from the Senate Economic Growth Committee. Legislators approved S-80, which lowers the minimum jobs retention eligibility requirement for tax credits through the Business Retention and Relocation Assistance Grant (BRRAG). Under S-80, businesses relocating 50 or more employees to New Jersey would qualify for tax credits that are currently only available to large businesses that relocate at least 250 employees. One of the goals of the Platform is to advocate for legislation that improves the state’s business incentive programs and that meet the needs of small business. These types of financial incentives are essential to companies that struggle with the high cost of doing business in New Jersey. 

The Committee also favorably moved S-2491 and A-3938. This legislation, as amended, restores the point of sale exemption on purchases by businesses located within an Urban Enterprise Zone (UEZ). These bills repeal legislation enacted last year that requires a business that qualifies for a sales tax exemption to pay the sales tax and then apply for a rebate, rather than exempting the sale from tax at the point of sale.  Since the rebate program was implemented, a significant number of businesses have dropped out of the UEZ program, citing the administrative burdens and costs of complying with the law. The Chamber has advocated for the repeal of the rebate requirement since it became law. Both bills await action by the Senate Budget and Appropriations Committee.

Governor Conditionally Vetoes Digital Media Bill: Governor Corzine recently conditionally vetoed S-2526, which provides corporation business tax credits for digital media content production expenses. This bill expands upon legislation enacted in 2006 to provide credits for film production expenses. A coalition of supporters backed S-2526, believing that by providing incentives to digital media companies, New Jersey can be at the forefront of this emerging industry and gain a competitive advantage over other states. The Governor recommended various changes to the bill for the Legislature to consider. Key recommendations include considering job creation in calculating the amount of tax credits to be awarded, separating the credits available for film production from the credits for digital media content and capping the amount available for the digital media credit at $5 million. The Senate approved the language in the conditional veto on December 10, and action by the Assembly is pending. 

Legislation Expands Reporting Requirements: On November 2, Governor Corzine signed into law S-1213, which expands the state’s disclosure and reporting requirements for recipients of state financial assistance and incentive programs. The State Chamber opposed this legislation as duplicative and onerous and we fear it could serve to discourage participation in the incentive programs. However, the Chamber supported a provision in the legislation requiring the Treasurer to submit an annual unified economic development report which provides comprehensive information about the costs and benefits of the state’s financial assistance programs.  

Small Business Administration (SBA) Regulation Reform Initiative: The SBA’s Office of Advocacy has launched a new initiative, “r3” or Regulation, Review and Reform. The r3 program is designed to help small businesses address the cumulative federal regulatory burden. SBA is asking for small businesses to nominate federal regulations that they think need to be reformed. If you would like to nominate a regulation, please contact Keith Holman at the Office of Advocacy at 202-205-6936 or via email keith.holman@sba.gov. The deadline for nominations is December 31, 2007. 

New Jersey Awarded Workforce Investment Grant: Last month, State Labor and Workforce Development Commissioner David Socolow launched Central New Jersey’s BIO-1 Workforce Innovation in Regional Economic Development (WIRED) initiative. BIO-1 is a partnership of five central New Jersey counties collaborating with the Department of Labor and Workforce Development, regional higher education institutions and businesses to create high-skilled, high-paying jobs that will help cement central New Jersey’s leadership role in the life sciences industry. The U.S. Department of Labor awarded New Jersey $5 million in funding to invest in bioscience workforce development.

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MaryEllen Peppard
Government Relations Manager
New Jersey Chamber of Commerce
216 West State Street
Trenton, NJ 08608
Phone: (609)989-7888 Ext. 125
Fax: (609)989-9696
Maryellen.Peppard@njchamber.com