LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 4226
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JULY 3, 2024
SUMMARY
Synopsis: Modifies requirements for certain projects under Economic
Redevelopment and Growth Grant Program.
Type of Impact: Multi-year net decrease in State revenues.
Agencies Affected: New Jersey Economic Development Authority.
Office of Legislative Services Estimate
Fiscal Impact Multi-Year Lifespan of Incentive Awards
State Revenue Decrease Indeterminate
 The Office of Legislative Services (OLS) finds that the bill will result in an indeterminate
multi-year net decrease in State revenues. The Economic Redevelopment and Growth Grant
program is administered by the Economic Development Authority.
 By extending the definition of project cost to include costs associated with the funding of a
debt services reserve fund in total projects costs, the bill may result in a State revenue loss
because it allows a developer to receive an incentive grant or tax credit award in an amount
greater than otherwise permitted under current law.
 The OLS notes that provisions of the bill allowing the developers of certain mixed use parking
projects to exclude a visitor center or youth center, or both, from the project application, or to
assign the application to a municipal redeveloper, would have an indeterminate impact on State
finances. The impact of these provisions will vary, depending on whether a project is
eliminated from a project application or reassigned to a municipal redeveloper.
 The bill may also result in a State revenue loss by extending the deadline for a developer to
submit a temporary certificate of occupancy for certain qualified projects to June 30, 2028.
The deadline extension proposed by the bill may allow developers to receive larger incentive
grants or tax credit awards over a longer period of time, resulting in additional State revenue
losses.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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BILL DESCRIPTION
The bill modifies deadlines for certain existing projects under the Economic Redevelopment
and Growth Grant program and modifies the definition of the term “project cost” under that
program.
Temporary Certificate of Occupancy Deadlines. The bill extends the deadline for a developer
to submit a temporary certificate of occupancy for certain qualified residential projects or mixed
use parking projects to June 30, 2028. Under current law, the deadline to submit this
documentation is June 30, 2026. This bill also extends the deadline for a municipal redeveloper
to submit a temporary certificate of occupancy for certain proposed mixed use parking projects to
June 30, 2028. Under current law, the deadline to submit this documentation is June 30, 2026.
Modified Projects. Additionally, the bill permits the developers of certain mixed use parking
projects to exclude a visitor center, youth center, or both from the project application, or to assign
the application to a municipal redeveloper, provided that the project otherwise qualifies as a mixed-
use parking project. This permission to amend or assign an application applies to any mixed use
parking project: (1) that is undertaken by a municipal redeveloper after July 29, 2022; (2) for which
a redevelopment incentive grant is awarded; (3) that is located in a Garden State Growth Zone
with a population over 125,000, except not including those projects located in Atlantic, Burlington,
Camden, Cape May, Cumberland, Gloucester, Ocean, and Salem counties; and (4) that was
initially intended to be utilized by a visitor center or youth center within or adjacent to a national
historic park.
Under current law, the redevelopment incentive grant award for such a project is equal to 100
percent of the total project costs allocated to the parking component combined with 80 percent of
the total project costs allocated to the non-parking component. Under the bill, the maximum
amount of any redevelopment incentive grant for the modified project would be determined in the
same manner as for an unmodified project.
Project Cost. This bill revises the definition of the term “project cost,” for the purposes of the
program, to include among other costs: capitalized interest paid to third parties, the funding of a
debt service reserve fund, the cost of infrastructure improvements, including ancillary
infrastructure projects, and an amount not to exceed 20 percent of the total project cost for costs
not directly related to construction. The bill also provides that, for purposes of the definition of
“project cost,” capitalized interest paid to third parties is deemed to be costs directly related to
construction.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that the bill will result in an indeterminate multi-year net decrease in State
revenues. The Economic Redevelopment and Growth Grant program is administered by the
Economic Development Authority.
By extending the definition of project cost to include costs associated with the funding of a
debt service reserve fund in total projects costs, the bill may result in a State revenue loss because
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it allows a developer to receive an incentive grant or tax credit award in an amount greater than
otherwise permitted under current law.
The OLS notes that provisions of the bill allowing the developers of certain mixed use parking
projects to exclude a visitor center or youth center, or both, from the project application, or to
assign the application to a municipal redeveloper, would have an indeterminate impact on State
finances. The impact of these provisions will vary, depending on whether a project is eliminated
from a project application or reassigned to a municipal redeveloper. The elimination of a project
from an application may result in a reduction in a developer’s incentive grant or tax credit award,
thereby reducing State expenditures and revenue losses. In contrast, the reassignment of a project
to a municipal redeveloper may result in a recalculation of total project costs resulting in a larger
tax credit award to the extent the reassignment enables the completion of approved projects.
The bill may also result in a State revenue loss by extending the deadline for a developer to
submit a temporary certificate of occupancy for certain qualified projects to June 30, 2028.
Through the Economic Redevelopment and Growth Grant program, the authority awards incentive
grants or tax credits for a portion of project costs incurred in connection with the redevelopment
project by a developer until the issuance of a permanent certificate of occupancy. Extending the
deadline for the submission of a temporary certificate of occupancy may allow additional project
costs to be counted in the calculation of the incentive grant or tax credit award.
Additionally, a developer that has been awarded an incentive grant or tax credit does not
receive the final incentive grant or tax credit award until they submit a certificate of occupancy to
the authority. The deadline extension proposed by the bill may allow developers to receive larger
incentive grants or tax credit awards over a longer period of time, resulting in additional State
revenue losses.
The OLS notes that the statutory Economic Redevelopment and Growth Grant program
application deadline was December 31, 2021. Accordingly, any changes to the program proposed
in the bill would only impact projects that have already been approved for an incentive grant or
tax credit. Current law caps aggregate tax credit awards for qualified residential and mixed use
parking projects at $993 million. The bill does not increase that statutory ceiling and any increases
in tax credit awards resulting from changes to the Economic Redevelopment and Growth Grant
program proposed by the bill are subject to the $993 million limit.
Section: Revenue, Finance, and Appropriations
Analyst: Scott A. Brodsky
Staff Fiscal & Budget Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).


Statutes affected:
Introduced: 52:27D-489