LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 4135
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JULY 14, 2025
SUMMARY
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Synopsis: |
Provides allowances for certain redevelopment projects undertaken by institutions of higher education under New Jersey Aspire Program. |
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Type of Impact: |
Multi-year decrease in State revenues. |
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Agencies Affected: |
New Jersey Economic Development Authority. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
Multi-Year Lifespan of Incentive Awards |
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State Revenue Decrease |
Indeterminate |
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· The Office of Legislative Services (OLS) finds that the bill will result in an indeterminate multi-year decrease in State revenues.
· By allowing developers to receive tax credits for certain redevelopment projects undertaken by institutions of higher education, the bill may result in a State revenue loss because it allows the Economic Development Authority to award tax credits to developers for costs associated with these institutional projects.
· Using information available through the authority, the OLS estimates that there were approximately $2.9 billion in uncommitted tax credits available for award through the New Jersey Aspire and Emerge programs as of March 12, 2025. Of that amount, approximately $2.1 billion in tax credits may be awarded to non-transformative projects and $842.0 million may be awarded to transformative projects.
BILL DESCRIPTION
The bill modifies certain provisions of current law to allow institutional projects to qualify for tax credits under the New Jersey Aspire Program, which is administered by the New Jersey Economic Development Authority. The bill defines an “institutional project” as a redevelopment project that is developed by, or in affiliation with, a public or private institution of higher education, and where 51 percent of the square footage of the project is dedicated for the use of qualified research and development.
To qualify for an incentive award under the Aspire Program, the bill provides that the developer of an institutional project is required to contribute capital of at least $30.0 million, regardless of the overall cost of the project, except when the project is located in a government-restricted municipality. Under current law, the developer of a redevelopment project is required to contribute capital of at least 20 percent of the total project costs, except that if the project is located in a government-restricted municipality, the developer is required to contribute capital of at least 10 percent of the total project cost.
The bill also provides that an institutional project is not subject to a net benefit analysis that is required for certain other redevelopment projects. Under current law, an exemption from the net benefit analysis is provided for investments in residential projects, food delivery sources, and health care or health services centers. The bill also provides that an institutional project is eligible for an incentive award equal to 80 percent of project costs, not to exceed a maximum value of $120.0 million.
The bill provides similar changes for institutional projects that qualify as transformative projects under the Aspire Program. Specifically, the bill provides that institutional projects are eligible for an incentive award equal to 80 percent of project costs, up to $400.0 million or the amount of the project financing gap. The bill also exempts institutional projects from the net benefit analysis requirement for transformative projects.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that the bill will result in an indeterminate multi-year decrease in State revenues. By allowing developers to receive tax credits for certain redevelopment projects undertaken by institutions of higher education, the bill may result in a State revenue loss because it allows the authority to award tax credits to developers for costs associated with these institutional projects. Current law does not allow the authority to authorize tax credit awards under the New Jersey Aspire Program for institutional projects. The OLS cannot precisely quantify the direct revenue loss due to insufficient information regarding institutional projects that may qualify for tax credits under the bill.
Using information available through the authority, the OLS estimates that there were approximately $2.9 billion in uncommitted tax credits available for award through the New Jersey Aspire and Emerge programs as of March 12, 2025. Of that amount, approximately $2.1 billion in tax credits may be awarded to non-transformative projects and $842.0 million may be awarded to transformative projects. Current law allows New Jersey Aspire Program tax credits allocated for non-transformative projects to be transferred to support transformative projects if the amount of tax credits otherwise available for transformative projects is less than $1.0 billion and the authority’s board determines that the transfer is warranted based on such criteria as the authority deems appropriate.
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Section: |
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Analyst: |
Staff Fiscal & Budget Analyst |
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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.).