Passaic County Provides COVID-19 Update to the Business Community

By /

New Jersey Economic Recovery Act of 2020 adopted – Approves and Extends Tax Credit Programs
The State of New Jersey has adopted legislation, named the “New Jersey Economic Recovery Act of 2020,” The legislation provides for the administration of programs and policies related to jobs, property development, food deserts, community partnerships, small and early stage businesses, State procurement, wind energy, and film production, and makes an appropriation. 

  • Sections 2-8 of the bill address the Historic Property Reinvestment program providing tax credits for part of the cost of rehabilitating historic properties in this State. Tax credits under this program are capped at $50 million annually for six years. 
  • Sections 9-19 of the legislation fund the Brownfields Redevelopment Incentive program providing tax credits to compensate developers of redevelopment projects located on brownfield sites for remediation costs. Tax credits under this program are capped at $50 million annually for six years.
  • Section 20-34 of the legislation fund the New Jersey Innovation Evergreen program  auctioning tax credits for cash, which will be used to invest in innovation as a catalyst for economic growth and to advance the competitiveness of the State’s businesses in the global economy. Tax credits under this program are capped at $60 million annually for six years.
  • Sections 35-42 of the legislation addresses the Food Desert Relief program providing tax credits in order to incentivize businesses to establish and retain new supermarkets and grocery stores in food desert communities. Tax credits under this program are capped at $40 million annually for six years.
  • Sections 43-53 are the New Jersey Community-Anchored Development program providing tax credits to anchor institutions to incentivize the expansion of targeted industries in the State and the continued development of certain areas of the State. Tax credits under this program are capped at $200 million annually for six years, but the $200 million annual cap will be split so that up to $130 million of tax credits will be for areas in the 13 northern counties of the State and $70 million for areas in the eight southern counties.
  • Sections 54-67 create the New Jersey Aspire program providing tax credits to encourage redevelopment projects by covering certain project financing gap costs. 
  • Sections 68-81 create the Emerge program providing tax credits to encourage economic development, job creation, and the retention of significant numbers of jobs in imminent danger of leaving the State.
  • Tax credits under the Aspire program combined with tax credits under the Emerge program are capped at $1.1 billion annually for six years, but the $1.1 billion annual cap will be split so that up to $715 million of tax credits will be for projects located in the northern counties of the State and $385 million for projects located in the southern counties. The $1.1 billion cap does not apply to transformative projects. For transformative projects under the Aspire program and the Emerge program the combined credits over six years is capped at $2.5 billion.
  • Sections 82-88 create the Main Street Recovery Finance program providing grants, loans, and loan guarantees to small businesses. The bill appropriates $50 million for this program.
  • Section 89 allows the Director of Taxation to purchase unused tax credits. 
  • Section 90 establishes a working group for the purpose of making recommendations for the establishment of entrepreneur zones throughout the State. 
  • Section 91 grants preferences to businesses within the State with respect to bidders for a State contract to supply personal protective equipment. 
  • Sections 92-97 creates the New Jersey Ignite program, a public-private partnership providing start-up rent grants to collaborative workspaces to support the early months of an early stage innovation economy business’s rent at the collaborative workspace. The bill appropriates $250,000 for this program.
  • Section 98 sets the caps on tax credits for the programs in sections 2-81 of the bill, including an overall cap of $11.5 billion for those programs, and allows a seventh year of tax credits under those programs for uncommitted credits.
  • Sections 99-105 creates an Office of Economic Development Inspector General, and requires employment of a Chief Compliance Officer to manage the Division of Portfolio Management and Compliance. The bill appropriates $250,000 to implement these sections. 
  • Sections 106-107 allows tax credits for hiring employees for the manufacture of personal protective equipment. Tax credits under these sections are capped at $10 million annually for three years.
  • Section 108 allows deferrals, adjustments, and termination of incentive agreements for businesses affected by COVID-19. 
  • Section 109 amends the Offshore Wind Economic Development Act, including to change eligibility requirements, disbursement of credits, and deadlines.
  • Sections 110-111 amends the existing film tax credit provisions to include provisions for “New Jersey film partners” and “New Jersey film-lease partners,” and to allow an additional $200 million of tax credits annually over 13 years. 
  • Section 112 requires the Economic Development Authority (EDA) to adopt rules requiring that not less than the prevailing wage rate be paid to workers employed in connection with certain incentive programs.
  • Sections 113-114 makes adjustments to the New Jersey Emerging Technology and Biotechnology Financial Assistance Program, including to increase the annual amount of tax benefits that the EDA may approve for transfer between corporations. 
  • Section 115 allows the EDA to purchase and lease real property.
  • Section 116 modifies and expands what the EDA’s Economic Recovery Fund’s money may be used for.
  • Sections 117-119 makes adjustments to the New Jersey Angel Investor Tax Credit Act, including to increase the annual tax credit cap from $25 million to $35 million and to add provisions for venture funds.
  • Sections 120-121 makes adjustments to the Grow New Jersey Assistance Program, including to amend the definition of “incentive effective date.” 
  • Section 122-124 amends the Economic Redevelopment and Growth Grant Program, including to extend deadlines and allow an additional $220 million of tax credits to be awarded.
  • Sections 125-126 amends existing law to allow the Division of Taxation to share relevant taxpayer data with the EDA.
  • Section 127 appropriates $55.5 million, which includes the appropriations mentioned above for implementing sections 82-88, 92-97, and 99-105, as well as $5 million to award grants for zoning and economic planning services or economic redevelopment plans.

FISCAL IMPACT:

The Office of Legislative Services (OLS) notes that this legislation authorizes: up to $11.5 billion of tax credits over seven years for new incentive programs in sections 2-81; up to $2.6 billion of film tax credits over 13 years in sections 110-111; up to  $220 million of tax credits under the Economic Redevelopment and Growth Grant program for certain project applications submitted prior to December 1, 2021 in sections 122-124; up to $30 million over three years for hiring employees for the manufacture of personal protective equipment in sections 106-107. The bill also increases the angel investor tax credit cap from $25 to $35 million annually in sections 117-119. Finally, the OLS notes that the legislation appropriates $55.5 million to support various programs and administrative functions established by the legislation.  

FEDERAL STIMULUS PACKAGE SUMMARY
Source: Melanie Willoughby, Executive Director, NJBAC

Small Business – $325 Billion

Democrats secured critical funding and policy changes to help small businesses, including minority-owned businesses, and nonprofits recover from the pandemic. This bill includes $284 billion for the Paycheck Protection Program (PPP) and extends PPP through March 31, 2021. Changes to PPP include:

  • Provides a second PPP forgivable loan for the hardest-hit small businesses and non- profits with 300 or fewer employees and that can demonstrate a loss of 25% of gross receipts in any quarter during 2020 when compared to the same quarter in 2019;
  • Creates a dedicated $15 billion set-aside for lending through community financial institutions, including Community Development Financial Institutions and Minority Depository Institutions to increase access for minority-owned and other underserved small businesses and nonprofits;
  • Creates a set-aside for very small businesses with 10 or fewer employees and for small businesses located in distressed areas;
  • Expands PPP eligibility for more critical access hospitals, local newspapers and TV and radio broadcasters, housing cooperatives, and 501(c)(6) nonprofits, including tourism promotion organizations and local chambers of commerce;
  • Allows for small businesses in the restaurant and hospitality industries to receive larger awards of 3.5 times average total monthly payroll, rather than 2.5 times;
  • Adds PPE expenses, costs associated with outdoor dining, and supplier costs as eligible and forgivable expenses;
  • Simplifies the forgiveness process for loans of $150,000 and less;
  • Repeals the requirement of deducting an EIDL Advance from the PPP forgiveness amount.


EIDL Grant Program – $20 Billion

This bill includes $20 billion for EIDL Advance grants. Small businesses and nonprofits in low- income communities are eligible to receive $10,000 grants. Any small businesses and nonprofits in low-income communities that received an EIDL Advance previously are also eligible to receive the full $10,000 if their award was less in the first round of grants.


Grants for Shuttered Venue Operators – $15 Billion

The bill provides $15 billion for SBA grants up to $10 million to live venues, independent movie theaters, and cultural institutions to address the economic effects of the pandemic. Grants can be used to cover expenses such as payroll costs, rent, utilities, and personal protective equipment. Two priority periods are established to ensure the hardest hit entities have dedicated access to assistance for the first 28 days of the program, while a reserve fund is made available ensure entities that are ineligible for the priority periods are able to receive assistance following the two 14-day priority periods. A set-aside of $2 billion is also reserved for entities with 50 or fewer employees. The program is authorized to make supplemental grants equal to 50 percent of the initial grant.


Extended SBA Debt Relief Payments – $3.5 Billion

This bill provides $3.5 billion to resume debt relief payments of principal and interest (P&I) on small business loans guaranteed by the SBA under the 7(a), 504 and microloan programs. All borrowers with qualifying loans approved by the SBA prior to the CARES Act will receive an additional three months of P&I, starting in February 2021. Going forward, those payments will be capped at $9,000 per borrower per month. After the three-month period described above, borrowers considered to be underserved—namely the smallest or hardest-hit by the pandemic— will receive an additional five months of P&I payments, also capped at $9,000 per borrower per month. SBA payments of P&I on the first 6 months of newly approved loans will resume for all loans approved between February 1 and September 30, 2021, also capped at $9,000 per month.


Enhancements of SBA Lending Programs – $2 Billion

This bill provides $2 billion to enhance SBA’s core programs, including 7(a), Community Advantage, 504, and the Microloan program, by making them more affordable and useful to small businesses. It also provides $57 million for the SBA Microloan Program to provide technical assistance and leverage about $64 million in microloans for minority-owned and other underserved small businesses.


Melanie Willoughby
Executive Director
NJ Business Action Center
33 West State Street
P.O. Box 820
Trenton, NJ 08625-0820
P: 609-633-8301
C: 609-462-6917
Melanie.Willoughby@sos.nj.gov

We have an updated link for the NJ Business Action Center and the launch of the state’s new business portal at business.nj.gov.

The following links provide updates to policies and guidelines, safety recommendations, and business resources.

Quick Resources

Federal Resources

Additional Resources

Source: Melanie Willoughby
Executive Director, NJBAC

Scroll to Top

Discover more from Pompton Lakes Business Improvement District

Subscribe now to keep reading and get access to the full archive.

Continue reading