ASSEMBLY APPROPRIATIONS COMMITTEE
STATEMENT TO
[Second Reprint]
SENATE, No. 4135
with committee amendments
STATE OF NEW JERSEY
DATED: JANUARY 8, 2026
The Assembly Appropriations Committee reports favorably and with committee amendments Senate Bill No. 4135 (2R).
Under the bill, the term “institutional project” is defined as a redevelopment project that is developed by, or in affiliation with, an institution of higher education with a research activity designation of Research 1 (R1) or Research 2 (R2) from the Carnegie Classification of Institutions of Higher Education, provided that: no more than five percent of the square footage of the project is to be leased or subleased to any entity other than the institution of higher education occupying the redevelopment project; and 51 percent of the square footage of the project is dedicated for the use of qualified research and development. “Qualified research and development” is defined as research and development activities that are undertaken within a priority industry, including, but not limited to, technology, artificial intelligence, software development, financial services, financial services technology, film and digital media, advanced manufacturing, gaming, pharmaceuticals, biotechnology, transportation, logistics, and renewable energy.
Under the bill, the developer of an institutional project is required to submit an application for an incentive award, in a form and manner prescribed by the authority, no sooner than April 1, 2026 and no later than April 1, 2027. The bill provides that the developer of an institutional project may elect an eligibility period not to exceed five years in combination with an additional period of continued compliance for five years.
The bill requires the calculation of the “project cost” of an institutional project to include the construction and completion of: research workspaces; meeting, classroom, dining, and dormitory spaces; and common areas, including, but not limited to, hallways, utility rooms, storage areas, and parking components.
The bill also makes certain changes related to the requirement for the developer of a redevelopment project to commit capital for the project. Under current law, the developer is required to contribute capital of at least 20 percent of the total project costs. However, if the project is located in a government-restricted municipality, the developer is only required to contribute capital of at least 10 percent of the total project cost. Instead, the bill provides that the developer of an institutional project is required to contribute capital of at least 20 percent of the total project cost or $30 million, whichever is greater, regardless of the overall cost of the project, except when the project is located in a government-restricted municipality.
The bill also increases the amount of tax credits that may be awarded to an institutional project in most circumstances. Under the bill, an institutional project is eligible for an incentive award equal to 80 percent of project costs, which incentive award is limited to a maximum value of $90 million for each institutional project or phase thereof. The bill prohibits the approval of a total amount of tax credits greater than $90 million for all institutional projects approved under the program.
The bill provides that an institutional project is not subject to the net benefit analysis that is required for certain other redevelopment projects. Under current law, an exemption from the net benefit analysis is only provided for investments in residential projects, food delivery sources, and health care or health services centers. The bill also exempts qualified institutional projects from the net benefit analysis requirement for transformative projects.
As amended and reported by the committee, Senate Bill No. 4135 (2R) is identical to Assembly Bill No. 5470 (1R), which was also amended and reported by the committee on this date.
COMMITTEE AMENDMENTS:
The committee amended the bill to:
(2) provide that a developer of an institutional project may elect a period not to exceed five years in combination with an additional period of continued compliance for five years;
(3) require that no more than five percent of the square footage of an institutional project be leased or subleased to any entity other than the institution of higher education occupying the redevelopment project;
(4) require the developer of an institutional project to contribute capital of at least 20 percent of the total project cost or $30 million, whichever is greater;
(5) require the developer of an institutional project to submit an application for an incentive award, in a form and manner prescribed by the authority, no sooner than April 1, 2026 and no later than April 1, 2027;
(6) provide that an institutional project is eligible for an incentive award equal to 80 percent of project costs, which incentive award is limited to a maximum value of $90 million for each institutional project or phase thereof. Previously, the bill would have limited each institutional project or phase thereof to $120 million;
(7) prohibit the approval of a total amount of tax credits greater than $90 million for all institutional projects approved under the program;
(8) revise the bill's synopsis; and
(9) make technical changes.
FISCAL IMPACT:
Fiscal information for this bill is currently unavailable.