Bill Summary – FastDemocracy

LEGISLATIVE FISCAL ESTIMATE
                                SENATE, No. 3479
                             STATE OF NEW JERSEY
                               221st LEGISLATURE
                                             DATED: JULY 3, 2024
                                                  SUMMARY
    Synopsis:                   Modifies certain provisions of Historic Property Reinvestment and
                                Brownfields Redevelopment Incentive programs.
    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 Life Span of Tax Credit Awards
    Net State Revenue Decrease                                    Indeterminate
    The Office of Legislative Services (OLS) concludes that the bill will result will result in a net
     loss of State revenues over a multi-year period. The bill increases the maximum tax credit
     awards under the Historic Property Reinvestment Program and the Brownfields
     Redevelopment Program and extends eligibility for tax credit awards under each program to
     new types of projects.
    The provisions of the bill increasing the maximum amount of tax credits that may be awarded
     to an individual project through either program will result in a State revenue loss to the extent
     that the developers of qualified properties and redevelopment projects qualify for larger tax
     credit awards than permitted under current law.
    By requiring a business to demonstrate that a project financing gap exists only for projects
     located outside of a government-restricted municipality with rehabilitation or remediation cost
     of $5 million, the bill will result in a State revenue loss because certain projects may qualify
     for tax credits for which they are not eligible under current law.
    The provisions of the bill allowing the Economic Development Authority to award tax credits
     to facade rehabilitation projects or a for a redevelopment project erecting a solar panel array
     on the site of a closed sanitary landfill will result in a State revenue loss to the extent that it
     allows developers to receive tax credits for which they are not eligible under current law.
      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 revises various provisions of the New Jersey Economic Recovery Act of 2020
concerning the Historic Property Reinvestment Program and the Brownfields Redevelopment
Incentive Program. The Historic Property Reinvestment Program provides tax credits on a
competitive basis to support the rehabilitation of identified historic properties. The Brownfields
Redevelopment Incentive Program provides project-based tax credits to incentivize environmental
remediation, abatement, and demolition activities that will allow for the redevelopment of
brownfield sits for commercial, retail, or mixed use. Both of these programs are administered by
the Economic Development Authority.
    The bill increases the maximum tax credit award for projects eligible for tax credit awards
under both programs, regardless of where the project is located. The bill also allows the authority
to award tax credits to facade rehabilitation projects and for a redevelopment projects involving
the erection of a solar panel array on the site of a closed sanitary landfill.
    The bill amends the project financing gap requirements for both programs. Current law
requires applicants to demonstrate that a project financing gap exists for all projects, without regard
to where that project is located. The bill amends current law governing both programs to provide
that a business must demonstrate a project financing gap only for projects located outside of a
government-restricted municipality that have total rehabilitation costs, total facade rehabilitation
costs, or total remediation costs of at least $5 million.
                                      FISCAL ANALYSIS
EXECUTIVE BRANCH
    None received.
OFFICE OF LEGISLATIVE SERVICES
    The OLS concludes that the bill will result will result in a net loss of State revenues over a
multi-year period. The OLS notes that the any revenue loss will be: a) temporally limited because
current law places restrictions on the time period during which the authority may award tax credits
through each program and b) spread out over several years since unused tax credits awarded under
the Historic Property Reinvestment Program may be carried forward for up to nine privilege
periods following the privilege period in which the credit was first allowed. Current law does not
allow for the carry forward of unused tax credits awarded under the Brownfields Redevelopment
Incentive Program.
    The provisions of the bill increasing the maximum amount of tax credits that may be awarded
to an individual project through either program will result in a State revenue loss to the extent that
the developers of qualified properties and redevelopment projects qualify for larger tax credit
awards permitted under current law.
    By revising the tax credit eligibility requirement for a business to demonstrate a project
financing gap so that it applies only to projects located outside of a government-restricted
municipality that have total rehabilitation costs, total façade rehabilitation costs, or total
remediation costs of at least $5 million, the bill will result in a State revenue loss to the extent that
these modifications allow developers to receive tax credits for which they may not be eligible
under current law.
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    The provision of the bill allowing the Economic Development Authority to award tax credits
to facade rehabilitation projects or a for a redevelopment project erecting a solar panel array on
the site of a closed sanitary landfill will result in a State revenue loss to the extent that it allows
developers to receive tax credits for which they are not eligible under current law.
    Current law provides the total amount of tax credits awarded annually through the Historic
Property Reinvestment Program and the Brownfields Redevelopment Incentive Program at $50
million each during the first six years of the nine-year period following enactment of the New
Jersey Economic Recovery Act of 2020. Although the bill increases the maximum amount of tax
credits that may be awarded to eligible projects and the types of projects that may qualify for tax
credit awards, the bill does not alter the current statutory tax credit cap for each program.
  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: 34:1B-271, 34:1B-272, 34:1B-274, 34:1B-275, 34:1B-278, 34:1B-280, 34:1B-281, 34:1B-282, 34:1B-284, 34:1B-287