On August 7, 2017, Governor Chris Christie signed legislation to amend the Grow New Jersey Assistance Program (“Grow NJ”). The amendment (ACS for A-4432/SCS for S-2841), which passed both the Senate and the Assembly with broad bipartisan support, is meant to encourage businesses to enter into collaborative research relationships with New Jersey colleges and universities.
Now, businesses may qualify for a base tax credit amount of $5,000 per job, per year, if the business locates a qualified business facility (“QBF”) in a Garden State Create Zone, and the facility is used by the business in a targeted industry (including, transportation, manufacturing, defense, energy, logistics, life sciences, technology, health, and finance) to conduct a collaborative research relationship with that university.
A Garden State Create Zone is defined as the campus of a doctoral university, and the area within a three-mile radius of the outermost boundary of the campus of a doctoral university. The State currently has 8 doctoral universities, including Montclair State University, NJIT, Princeton University, Rowan University, Rutgers University-New Brunswick, Rutgers University-Newark, Seton Hall University, and Stevens Institute of Technology.
In addition, the legislation establishes a new bonus of $1,000 per job, per year, if a business (1) is in a targeted industry and locates in a QBF on, or within three miles of, the campus of a college or university other than a doctoral university, and (2) the facility is used by the business to conduct a collaborative research relationship with the college or university. The State currently has 40 non-doctoral colleges and universities (including community colleges) that qualify under this bonus category.
The legislation requires the New Jersey Economic Development Authority (“NJEDA”), in consultation with the Secretary of Higher Education, to establish standards for collaborative research relationships between businesses in targeted industries and colleges and universities necessary for a business to qualify.
Created under the Economic Opportunity Act of 2013, Grow NJ is the State’s main job creation and business retention incentive program. The purpose of the program is to encourage economic development and job creation and to preserve jobs that currently exist in New Jersey but which are in danger of being relocated outside of the State.
These recent changes to the Grow NJ program could signal a shift towards incentives aimed at encouraging job growth in industries focused on innovation. In an election year in New Jersey, the State’s economic incentive programs have been put under a microscope. While both candidates for governor believe that incentives have a role to play in the State’s overall economic development strategy, it is hard to tell exactly how and when the current programs will change. These recent amendments, passed with broad bipartisan support, could be a sign that the next round of incentives will be focused on the “innovation economy.” Putting the State’s resources into higher paying, skill-based jobs, could be the future.
If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or email@example.com.
MURPHY PARTNERS LLP
Murphy Partners LLP is a boutique law firm specializing in real estate development and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.