ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

SENATE, No. 3189

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 19, 2025

      The Assembly Appropriations Committee reports favorably and with committee amendments Senate Bill No. 3189 (1R).

      As amended, this bill increases the amount of the tax credit provided under the “New Jersey Angel Investor Tax Credit Act” for a qualified investment made in a New Jersey emerging technology business venture.  Under current law, a taxpayer is allowed a credit against the gross income tax and corporation business tax in an amount equal to 20 percent of a qualified investment made by the taxpayer in a New Jersey emerging technology business or a qualified venture fund.  A taxpayer may also qualify for an additional five percent credit when the qualified investment is made in: (1) an emerging technology business that is located in an opportunity zone or a low-income community; or (2) an emerging technology business that is a minority business or women’s business, and, in the case of a qualified venture fund, if the qualified venture fund commits by contract to invest 50 percent of its funds in diverse entrepreneurs.  The bill also clarifies that the maximum value of an award of tax credits is $500,000 for each qualified investment made by a taxpayer.

      The bill increases the amount of the tax credit that may be provided to a taxpayer from 20 percent to 35 percent of the taxpayer’s qualified investment in a New Jersey emerging technology business or qualified venture fund.  The bill also increases the total amount of the tax credit provided to taxpayers that qualify for the additional five percent credit from 25 percent to 40 percent of a taxpayer’s qualified investment.  The bill also revises the definitions of “New Jersey based business” and “New Jersey emerging technology business” to lower, from 224 to 149, the maximum number of employees that a business may employ in order for a taxpayer to qualify for the tax credit.

      The bill also modifies the maximum amount of tax credits that may be awarded in any calendar year to support the “New Jersey Angel Investor Tax Credit Act.”  Under current law, the EDA is not permitted to approve more than $35,000,000 in tax credits in a calendar year under the “New Jersey Angel Investor Tax Credit Act.”  This bill reduces this maximum allowable amount from $35,000,000 to $25,000,000.  Concurrently, this bill also provides that in any calendar year, additional, unused tax benefits may also be deployed from the Technology Business Tax Certificate Transfer Program’s annual authorization to support the award of tax credits under the “New Jersey Angel Investor Tax Credit Act.”

      Under current law, new or expanding emerging technology and biotechnology companies with unused amounts of certain corporation business tax benefits are permitted to apply for a corporation business tax benefit certificate transfer program.  Under the Technology Business Tax Certificate Transfer Program, also known as the “NOL Program” or “net operating losses program,” corporation business taxpayers may surrender certain unused, but otherwise allowable and transferable, tax benefits in exchange for private financial assistance from other corporation business taxpayers.  The EDA is authorized to approve the transfer of no more than $75,000,000 of tax benefits in a State fiscal year.  If less than this amount is surrendered during any State fiscal year, the difference would be added to the maximum allowable tax credits that may be awarded under the “New Jersey Angel Investor Tax Credit Act” in the following calendar year.

      The bill also repeals the “New Jersey Ignite Act,” which authorized the EDA to establish and administer the New Jersey Ignite Program to foster early stage innovation economy businesses.

      As amended and reported, this bill is identical to Assembly Bill No. 2365 (1R), which was also amended and reported by the committee on this date.

COMMITTEE AMENDMENTS:

      The committee amendments provide several changes to the “New Jersey Angel Investor Tax Credit Act,” including modifying the maximum amount of tax credits that may be awarded in certain calendar years.  Under current law, the EDA is not permitted to approve more than $35,000,000 in tax credits in any calendar year.  These amendments reduce the maximum amount of allowable tax credits that the EDA is permitted to approve in any calendar year from $35,000,000 to $25,000,000.  These amendments also provide that in any calendar year, unused tax benefits may also be reallocated from the Technology Business Tax Certificate Transfer Program to support the award of tax credits under the “New Jersey Angel Investor Tax Credit Act.”  Specifically, if less than the maximum allowable amount of tax benefits are surrendered under the Technology Business Tax Certificate Transfer Program, the difference would be added to the maximum allowable tax credits that may be awarded under the “New Jersey Angel Investor Tax Credit Act” in the following calendar year.

      The amendments also clarify that tax credits awarded under the “New Jersey Angel Investor Tax Credit Act” may be used in the taxable year or privilege period in which the taxpayer applied for the tax credit.  Additionally, the amendments clarify that the maximum value of tax credits approved by the EDA is $500,000 for each qualified investment made by a taxpayer.  The amendments also permit the Chief Executive Officer of the EDA to adopt regulations necessary to implement the provisions of this bill.

      The amendments repeal the “New Jersey Ignite Act.”  The amendments also provide technical changes to the title and synopsis of the bill.

FISCAL IMPACT:

      Fiscal information for this bill is currently unavailable.