“Garden State Manufacturing Jobs Act” Promotes New Tax Incentives, Employee Involvement; Measure Part of Assembly Democratic Job Creation Effort
An Assembly panel on Thursday advanced legislation sponsored by Assembly Democrats Gabriela M. Mosquera, Craig J. Coughlin, Gary S. Schaer, John S. Wisniewski and Benjie E. Wimberly to revitalize the state’s manufacturing industry through a new corporate status, tax incentives and employee participation in the corporate decision-making process.
The measure (A-579) was designed to provide an incentive for manufacturing companies to create well-paying manufacturing jobs in New Jersey that will remain in the state long-term.
“Historically, a thriving manufacturing industry is a sign of a viable economy and a source of financial stability for many families, from low- to high-level, skilled workers,” said Mosquera (D-Camden, Gloucester). “Encouraging these corporations to build, to employ and to do business here will reinvigorate New Jersey’s economy. In turn, the industry can reclaim its stake as an integral part of the backbone of the American economy.”
“Historically, the manufacturing industry has provided countless jobs for New Jersey residents, jobs that have been hard to replace in more recent times,” said Coughlin (D-Middlesex). “Our economic recovery depends on our ability to revitalize industries that have been hit hardest by the recession. This bill encourages long-term manufacturing industry growth along with the potential to get more people back to work.”
“We have one of the most dedicated and brightest workforces in the country, but the manufacturing industry has seen a steep decline in jobs over the years, in great part because of a lack of needed tax incentives,” said Schaer (D-Bergen, Passaic). “The Garden State Manufacturing Jobs Act provides the incentive to expand the industry and promote job creation.”
“The Garden State Manufacturing Jobs Act” would permit the establishment of “Garden State Corporations,” which are corporations principally engaged in manufacturing with facilities based in New Jersey. The designation would offer a tax incentive to manufacturing companies with employee-elected board members and a more generous tax incentive to a company also designated as a “benefit corporation,” which is a for-profit corporation that places a social benefit above the profit motive, thereby insulating board members from shareholder lawsuits for failure to maximize profits.
“Massive layoffs are a notable sign of economic instability that we, unfortunately, have seen before, during and after the recession,” said Wisniewski (D-Middlesex). “Often decisions to release a substantial part of the workforce are made without constructive input from the people who are ultimately affected – the employees. This bill changes this practice of employee exclusion by requiring their input as elected members of the board of directors.”
“Employee involvement roots the business to the community it is in,” said Wimberly (D-Bergen, Passaic). “In cities such as Paterson, a thriving manufacturing hub in years past, employee stakeholders would have made it less likely for companies to relocate their business elsewhere. With these new state corporation requirements, we give workers an equal voice. It is important for the people who are the reason the company succeeds to have a say in where and how the company performs. “
The bill requires a Garden State Corporation to have procedures regarding the election of the employee-elected board members, which require that only employees who work in facilities in New Jersey are eligible to seek election and serve as employee-elected members of the board of directors.
The bill also requires that each employee of the corporation who works in facilities in New Jersey, regardless of his or her position, rank or the amount of ownership interest they have in the corporation, has the right to vote for and seek election as an employee-elected member of the board of directors.
Finally, the bill provides tax credits against the corporation business tax. If a corporation is a Garden State Corporation under the bill, but not a “benefit corporation,” it is allowed credits against its liability for the corporation business tax of:
– 35 percent during the first five tax years in which it is continuously a Garden State Corporation;
– 25 percent during the sixth and seventh tax years; and
-15 percent during the eighth and ninth tax years.
If a corporation is both a Garden State Corporation and a “benefit corporation,” it is allowed credits against its liability for the corporation business tax of:
– 60 percent during the first five tax years in which it is continuously both a Garden State Corporation and a benefit corporation;
– 45 percent during the sixth and seventh tax years, and
– 30 percent during the eight and ninth tax years.
The bill, which was advanced by the Assembly Commerce and Economic Development Committee, would take effect on July 1 following the date of enactment.