Legislation sponsored by Assemblymen Tim Eustace, Daniel Benson, Vince Mazzeo, Gordon Johnson and Craig Coughlin to help ensure New Jersey is getting a proper return on its investments in the business community was approved by an Assembly panel on Monday.
The bill (A-660) would establish the “Legislative Task Force on Business Development Incentives” and require a biennial audit of the economic development incentive programs offered through the New Jersey Economic Development Authority (EDA).
The EDA oversees numerous business development and financing programs, including several new programs to help with the recovery from the aftermath of Superstorm Sandy. In 2013, alone, the EDA finalized more than $1.29 billion in financing assistance, business incentives and tax credits.
“The state, and its taxpayers, makes a huge investment in the business community every year,” said Eustace (D-Bergen/Passaic). “They deserve the confidence of knowing their tax dollars are going to good use to benefit the state as a whole.”
“The bill will enable us to examine the economic development incentives offered by the state in order to identify the most effective tools to grow our economy and create-much needed jobs,” said Benson (D-Mercer/Middlesex).
In doing so, the bill would require an audit every two years of the EDA’s programs and a report that provides information on every grant, loan, or tax credit awarded to a private business and the recipient issued after 2013 and in excess of $1,000. The State Auditor would be given the discretion of conducting the audit itself or hiring a private entity to conduct all or part of it.
“With so many people still struggling to find work, particularly in Atlantic County, it’s critical that we make sure economic incentive programs are working to maximum effect to benefit the people who fund them – the taxpayers,” said Mazzeo (D-Atlantic).
“This will enable us to more closely examine our incentive programs to determine which ones are the most effective in generating jobs and tax revenue for the people of this state,” said Johnson (D-Bergen).
“With our economic recovery still lagging behind neighboring states, it’s important that we are maximizing our limited state resources to get people back to work and help our businesses grow and thrive,” said Coughlin (D-Middlesex).
The report is required to include the following information:
1) the name of the private business that received the grant, loan, or tax credit;
2) the amount of the grant, loan, or tax credit;
3) a detailed description of any development project that the private business was required to complete in exchange for the grant, loan, or tax credit and the status of the project;
4) the amount of any investment, in excess of the funds provided by the state, that the authority required the private business to make in exchange for the grant, loan, or tax credit and the amount invested by the private business;
5) the number of jobs that the private business promised to create, retain, or relocate within the state in exchange for the grant, loan, or tax credit and the number of those jobs that were to be permanent or temporary;
6) the actual number of jobs that the private business created, retained, or relocated within the State as the direct or indirect result of the grant, loan, or tax credit, whether those jobs were temporary or permanent, whether those jobs still existed in the state at the conclusion of the reporting period, or at the conclusion of the term of any contract or agreement with the EDA;
7) the total number of individuals employed by the private business in the state on the day it received the grant, loan, or tax credit, the total number of individuals employed by the private business in this State at the conclusion of the reporting period or at the conclusion of any contract or agreement with the EDA, and whether the private business has engaged in any layoffs in the state since it received the grant, loan, or tax credit;
8) the amount of additional tax revenue generated by the business on an annual basis for each year since the grant, loan, or tax credit was issued, attributable to increases in the private business’s net income, sales, or workforce as the direct or indirect result of its receipt of the grant, loan, or tax credit, including, but not limited to, additional income tax withholdings from an employee in a job created by the grant, loan, or tax credit; and
9) the use of a provision of law by the EDA to recapture or reduce the benefits of any grant, loan, or tax credit awarded to a private business.
Finally, the report shall include a summary of its findings and detail any trends, positive or negative, that could be utilized to improve the state’s return on the economic development incentives provided through the EDA to private businesses.
The 10-member task force established under the bill would be comprised of various members of the Assembly and Senate and charged with holding at least one public hearing concerning the report and issue its own report that makes recommendations for revising or discontinuing any existing EDA program that would improve the state’s return on the economic development incentives provided through the EDA to private businesses.
The bill was approved by the Assembly Appropriations Committee and now awaits consideration by the full Assembly.