Legislation sponsored by Assembly Democrats Whip Wilson, Sheila Oliver, Craig Coughlin, Marlene Caride and Benjie Wimberly to require corporations qualifying for state development subsidy grants to repay the entire amount if they fail to uphold the grant terms gained Assembly approval on Thursday.
Under the provisions of the bill (A-1808), a corporation that violates the terms of its grant agreement with the state entity issuing the grant would be required to refund the grant in full. The amount of the refund collected would be used to provide property tax relief.
“The intent of this legislation is to ensure that corporations hold up their end of the deal,” said Wilson (D-Camden/Gloucester). “Grant incentives encourage companies to move, build and grow here. We must make sure that they do exactly what they say they will do and fulfill the terms of the grant.”
“By offering incentives, we welcome corporations to bring their business to New Jersey,” said Oliver (D-Essex/Passaic). “More corporations who make New Jersey their home means more job opportunities and more support for families. This legislation would ensure our grant dollars are used wisely and keep corporations honest.”
“This is a very simple concept – protect the investment by taxpayers,” said Coughlin (D-Middlesex). “We want to create jobs and spark economic development, but we also want to do it responsibly. This bill accomplishes both those goals.”
“With our job growth numbers still lagging behind other states, it’s particularly important that corporations receiving state grants live up to their promise to generate employment,” said Caride (D-Bergen/Passaic).
“Job growth remains one of our top priorities,” said Wimberly (D-Bergen/Passaic). “With state dollars being extremely tight, it’s crucial that corporations receiving grants fulfill their responsibility to the taxpayers who fund these grants.”
Under the bill, the public entity issuing the grant would include provisions for the refund as part of an agreement to provide a grant and may pursue an action to collect the amount of the refund plus any attorney fees and other costs of the action.
While the New Jersey Economic Development Authority, the primary issuer of development subsidy grants, generally includes provisions permitting partial refunds in its grant agreements, at present there is no requirement for a full refund in the event of violation of an agreement’s terms.
The measure passed 75-5-2 in the Assembly.