P.L. 2022, CHAPTER 46, approved June 30, 2022

Senate, No. 2917

 

 


An Act concerning the New Jersey Aspire Program and amending P.L.2020, c.156.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    Section 62 of P.L.2020, c.156 (C.34:1B-330) is amended to read as follows:

     62.  a.  A developer approved for an incentive award pursuant to sections 58 and 59 of P.L.2020, c.156 (C.34:1B-326 and C.34:1B-327) and that enters an incentive award agreement pursuant to section 60 of P.L.2020, c.156 (C.34:1B-328) shall submit annually, commencing in the year in which the incentive award is issued and for the remainder of the eligibility period, a report indicating whether the developer is aware of any condition, event, or act that would cause the developer not to be in compliance with the incentive award agreement or the provisions of sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through C.34:1B-335) and any additional reporting requirements contained in the incentive award agreement or tax credit certificate.  The developer, or an authorized agent of the developer, shall certify that the information provided pursuant to this subsection is true under the penalty of perjury.

     b.    (1) Upon receipt and review of each report submitted during the eligibility period, the authority shall provide to the developer and the director a certificate of compliance indicating the amount of tax credits that the developer may apply against the developer's tax liability.

     (2) Upon receipt by the director of the certificate of compliance, the director shall allow the developer a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5).  A developer shall apply the credit awarded against the developer's liability under section 5 of P.L.1945, c.162 (C.54:10A-5), sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 for the privilege period during which the director allows the developer a tax credit pursuant to this subsection.  A developer [shall not] may carry forward an unused credit [unless the developer was unable to use the credit because the developer's redevelopment project was directly impacted due to a natural disaster, state emergency, national emergency, or a situation that was out of the developer's control that impacted the developer's use of the credit that year, in which case the developer is permitted to carry forward an unused credit for up to two years upon submitting evidence of the developer's redevelopment project being directly impacted by such a circumstance and receiving approval from the authority] resulting from the limitations of paragraph (3) of this subsection, if necessary, for use in the seven privilege periods next following the privilege period for which the credits are awarded.  Credits granted to a partnership shall be passed through to the partners, members, or owners, respectively, pro-rata, or pursuant to an executed agreement among the partners, members, or owners documenting an alternate distribution method provided to the director accompanied by any additional information as the director may prescribe.

     (3) The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax imposed under section 5 of P.L.1945, c.162 (C.54:10A-5).  The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with any other credits allowed by law, shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).

(cf: P.L.2020, c.156, s.62)

 

     2.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill provides that the recipients of tax credits under the New Jersey Aspire Program may carry forward unused tax credits during the seven privilege periods following the year in which the credits are awarded.

     Under current law, when a developer is awarded tax credits under the New Jersey Aspire Program, the developer may only carry forward unused tax credits in certain circumstances.  Specifically, the developer is required to demonstrate that the tax credits could not be claimed because the developer’s redevelopment project was directly impacted by a natural disaster, state emergency, national emergency, or other situation beyond the developer's control.  In these circumstances, current law allows the developer to carry forward the unused tax credit for up two years if the developer receives approval from the New Jersey Economic Development Authority (EDA). 

     Notably, the bill expands the circumstances in which a developer may carry forward unused tax credits under the New Jersey Aspire Program.  Under the bill, a developer would be permitted to carry forward any tax credits that cannot be claimed due to the value of the tax credits exceeding the amount of eligible tax liabilities against which the tax credits may be claimed.  The bill also provides that the EDA would no longer be required to approve the carry forward of tax credits.

     Additionally, the bill increases the period of time in which unused tax credits may be carried forward.  Specifically, the bill permits a developer to carry forward unused tax credits for use in the seven privilege periods following the privilege period for which the tax credits are awarded.

 

 

                                

 

     Expands allowance for developers to carry forward unused tax credits under New Jersey Aspire Program.