The Downtown Economic Growth Act establishes a program aimed at fostering business development in designated downtown areas of small municipalities in New Jersey, specifically those with populations under 11,000. The New Jersey Economic Development Authority (EDA) is tasked with creating the Downtown Economic Growth Program, which will provide financial and technical assistance, including loans, loan guarantees, and tax credits, to area businesses. Small municipalities can designate a downtown area and outline their economic development strategies, which may include utilizing state assistance and revising local planning and zoning regulations to attract investment.

The bill offers tax credits equal to 15 percent of employee compensation expenses for businesses that meet specific employment criteria and participate in the program. Additionally, it establishes the Downtown Economic Growth Assistance Fund to support these initiatives. The EDA is required to report annually on the program's progress, detailing participation, financial assistance provided, job creation, and capital investments. The act will take effect immediately but will remain inoperative for 60 days post-enactment, with certain provisions applying to tax periods beginning after January 1 of the following year.