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A171
ASSEMBLY, No. 171
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblywoman DAWN FANTASIA
District 24 (Morris, Sussex and Warren)
Assemblyman MICHAEL INGANAMORT
District 24 (Morris, Sussex and Warren)
SYNOPSIS
���� Establishes Main Street Economic Growth Program to
encourage business development in certain small municipalities.
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act
creating the Main Street Economic Growth Program and
supplementing P.L.1974, c.80 (C.34:1B-1 et seq.).
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� This act shall be known
and may be cited as the �Main Street Economic Growth Act.�
���� 2.��� The Legislature finds
and declares that:
���� a.���� Many municipalities in
this State having small populations with substantially developed commercial
areas face considerable obstacles in fostering new jobs and business growth and
do not qualify for assistance offered by the State�s municipal and business
assistance programs.
���� b.��� Recognizing the
difficulties faced by these municipalities and businesses, it is in the
long-term economic interest of this State to establish an economic development
incentive program to encourage business growth in the commercial areas of
smaller, substantially developed municipalities so that the local economy of
these municipalities may grow and thrive.
���� 3.��� As used in
P.L. ,
c. (C. )
(pending before the Legislature as this bill):
���� �Area business� means any
entity authorized to do business in the State of New Jersey which, at the time
a small municipality designates an area as a Main Street area, is engaged in
the active conduct of a trade or business in that area; or an entity which,
after a small municipality designates an area as a Main Street area, becomes
newly engaged in the active conduct of a trade or business in that area and has
at least 25 percent of its full-time employees employed at a business location
in the area who are residents within the small municipality.
���� �Authority� means the New
Jersey Economic Development Authority established by section 4 of P.L.1974,
c.80 (C.34:1B-4).
���� �Center� means the New Jersey
Business Action Center created in the Department of State.
���� �Department� means the
Department of Community Affairs.
���� �Developed� means areas
included within the Level 1 Urban or Built-up Land category in the 2012 New
Jersey Department of Environmental Protection land use/land cover data set.
���� �Director� means the Director
of the Division of Taxation in the Department of the Treasury.
���� �Full-time employee� means a
person employed by an area business for consideration for at least 35 hours a
week, or who renders any other standard of service generally accepted by custom
or practice as full-time employment, or a person who is employed by a
professional employer organization pursuant to an employee leasing agreement
between an area business and the professional employer organization, in
accordance with P.L.2001, c.260 (C.34:8-67 et seq.) for at least 35 hours a
week, or who renders any other standard of service generally accepted by custom
or practice as full-time employment, and whose wages are subject to withholding
as provided in the �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et seq. or
a person who is a resident of another State but whose income is not subject to
the �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et seq., or who renders
any other standard of service generally accepted by custom or practice as
full-time employment, and whose distributive share of income, gain, loss, or
deduction, or whose guaranteed payments, or any combination thereof, is subject
to the payment of estimated taxes, as provided in the �New Jersey Gross Income
Tax Act,� N.J.S.54A:1-1 et seq.� �Full-time employee� shall not include any
person who works as an independent contractor or on a consulting basis for an
area business.
���� �Fund� means the Main Street
Economic Growth Assistance Fund established pursuant to section 10 of
P.L. ,
c. (C. )
(pending before the Legislature as this bill).
���� �Main Street area� or �area�
means an eligible area designated by a small municipality pursuant to section 5
of P.L. ,
c. (C. )
(pending before the Legislature as this bill).
���� �Opportunity zone� means a
federal population census tract in this State that was eligible to be
designated as a qualified opportunity zone pursuant to 26 U.S.C. s.1400Z-1.
���� �Program� means the Main
Street Economic Growth Program established pursuant to section 4 of
P.L. ,
c. (C. )
(pending before the Legislature as this bill).
���� �Small municipality� means any
municipality with a population of under 11,000 persons, according to the most
recent decennial census, and which municipality either: is designated as a
county seat; contains an opportunity zone; or is over 70 percent developed,
according to the 2012 New Jersey Department of Environmental Protection land
use/land cover data set.
���� �Technical assistance� means
assistance in the establishment, development, or promotion of an area business
operating within a Main Street area under the terms and conditions adopted by
the authority under the provisions of P.L. , c. (C. )
(pending before the Legislature as this bill).
���� 4.��� a.� The New Jersey
Economic Development Authority, in consultation with the
Department of Community Affairs
and the
New Jersey Business Action Center
, shall
establish the Main Street Economic Growth Program for the purpose of providing
loans, loan guarantees, tax credits, and technical assistance to
area businesses
located within a
Main Street area designated by a
small
municipality.
���� b.��� The authority may
establish terms governing the provision of loans, loan guarantees, tax credits,
and technical assistance to
area businesses
for the implementation of the program pursuant to P.L. ,
c. (C. )
(pending before the Legislature as this bill).
���� 5.��� a.� Under terms and
conditions established by the authority, the governing body of a small
municipality may, by ordinance, designate an area within the small municipality
as a Main Street area.� In designating a Main Street area, the governing body
shall set forth the boundaries of the area with the approval of the authority,
state findings of fact concerning the economic conditions existing in the Main
Street area, and develop a statement of intent concerning the small
municipality's policy and intentions for addressing these conditions.�
���� b.��� The statement of intent
to address conditions in a Main Street area shall include:
���� (1)�� utilizing the powers
conferred on the small municipality by law for the purpose of stimulating
investment in and economic development of the Main Street area;
���� (2)�� utilizing State
assistance through the provisions of the Main Street Economic Growth Program
relating to financial and technical assistance to area businesses available
from the authority or any other State entity;
���� (3)�� securing the involvement
in, and commitment to, Main Street area economic development by private
entities, including area neighborhood associations, voluntary community
organizations supported by residents, and area businesses;
���� (4)�� utilizing the powers
conferred by law to revise municipal planning and zoning ordinances and other
land use regulations related to the Main Street area in order to enhance the
attraction of the area to existing and prospective area businesses; and
���� (5)�� increasing the
availability and efficiency of support services, public and private, generally
used by, and necessary to, the efficient functioning of commercial and
industrial facilities within and outside of the Main Street area, and
indicating the extent to which the increase or improvement is to be provided
and financed by the municipal government or by other entities.
���� 6.��� The authority shall work
cooperatively with the center and other State departments, agencies, boards,
commissions, and authorities to explore and implement opportunities to direct
resources and create enhanced incentives for area businesses participating in
the Main Street Economic Growth Program.
����� 7.�� a.��� A
taxpayer shall be allowed a credit for the privilege period against the tax
imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount
equal to 15 percent of the taxpayer�s employee compensation expenses related to
meeting the employment criteria under the definition of an area business
pursuant to section 3 of
P.L. ,
c. (C. )
(pending before the Legislature as this bill) and
participation in the program, as determined by the authority, pursuant to
P.L. ,
c. (C. )
(pending before the Legislature as this bill), that
is allowed for the privilege period.� An unused credit may be carried forward,
if necessary, for use in the seven privilege periods following the privilege
period for which the credit is allowed.
����� b.�� The
order of priority of the application of the credit allowed pursuant to this
section, together with any other credits allowed by law, shall be prescribed by
the director.� 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
exceed 50 percent of the tax liability otherwise due and 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).� An amount of
expense claimed as a credit pursuant to this section shall not be allowed as an
amount calculated or claimed pursuant to any other credit against the tax imposed
pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5).
����� 8.�� a.�
A taxpayer shall be allowed a credit for the taxable year against the tax
otherwise due for the taxable year pursuant to the �New Jersey Gross Income Tax
Act,� N.J.S.54A:1-1 et seq., in an amount equal to 15 percent of the taxpayer�s
employee compensation expenses related to meeting the employment criteria under
the definition of an area business pursuant to section 3 of
P.L. ,
c. (C. )
(pending before the Legislature as this bill) and participation in the program,
as determined by the authority, pursuant P.L. ,
c. (C. )
(pending before the Legislature as this bill), that is allowed
for the
taxable year.� An unused credit may be carried forward, if necessary, for use
in the seven taxable years following the taxable year for which the credit is
allowed.
����� b.�� (1)�
The order of priority of the application of the credit allowed pursuant to this
section, together with any other credits allowed by law, shall be prescribed by
the director.� The amount of the credit applied under this section against the
tax imposed pursuant to �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et
seq., for a taxable year together with any other credits allowed by law, shall
not exceed 50 percent of the tax liability otherwise due.� An amount of expense
claimed as a credit pursuant to this section shall not be allowed as an amount
calculated or claimed pursuant to any other credit against the tax imposed
pursuant to �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et seq.
����� (2)� A
business entity classified as a partnership for federal income tax purposes
shall not be allowed a credit directly under the gross income tax, but the
amount of credit of a taxpayer in respect of a distributive share of
partnership income shall be determined by allocating to the taxpayer that
proportion of the credit acquired by the partnership that is equal to the
taxpayer's share, whether or not distributed, of the total distributive income
or gain of the partnership for its taxable year ending within or with the
taxpayer's taxable year.
����� (3)� A
New Jersey S Corporation shall not be allowed a credit directly under the gross
income tax, but the amount of credit of a taxpayer in respect of a pro rata
share of S Corporation income shall be determined by allocating to the taxpayer
that proportion of the credit acquired by the New Jersey S Corporation that is
equal to the taxpayer's share, whether or not distributed, of the total pro
rata share of S Corporation income of the New Jersey S Corporation for its
privilege period ending within or with the taxpayer's taxable year.
���� 9.��� Not longer than one year
after the effective date of P.L. ,
c. (C. )
(pending before the Legislature as this bill) and annually thereafter, the
authority shall prepare a report on the Main Street Economic Growth Program,
submit the report to the Governor and, pursuant to section 2 of P.L.1991, c.164
(C.52:14-19.1), to the Legislature, and make the report available on the
authority�s website.� The report shall include the number of area businesses
participating in the program, the names and types of area businesses
participating in the program, the total amount of financial and technical
assistance provided to area businesses, the amount of financial and technical
assistance received per area business, the number of jobs created overall and
per area business, the amount of capital investment made per area business, and
any other information as the authority determines is necessary to evaluate the
progress of the program.
���� 10.� a.� To fund the Main
Street Economic Growth Program, the authority shall establish and maintain a
special non-lapsing, revolving fund to be known as the �Main Street Economic
Growth Assistance Fund� for the purpose of providing loans, loan guarantees, and
technical assistance to an area businesses located within a small
municipality.� The terms of a loan or loan guarantee, and the amount of
technical assistance shall be at the discretion of the authority based on the
monies made available by the authority for the purposes of the fund.
���� b.��� The fund may be credited
with:
���� (1)�� monies made available by
the authority for the purpose of the fund; and
���� (2)�� monies received by the
authority from any public or private source.
���� 11.� The authority shall adopt
rules and regulations, pursuant to the �Administrative Procedure Act,�
P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to implement the provisions of
P.L. , c. (C. )
(pending before the Legislature as this bill), including, but not limited to, a
requirement that in order for an area business to receive financial and
technical assistance from the authority, an area business shall enter into an
agreement with the authority to submit an audited financial statement to the
authority.
���� 12.� This act shall take
effect immediately, but shall remain inoperative for 60 days following the date
of enactment, except that sections 7 and 8 of this act shall apply to privilege
periods and taxable years beginning on or after the January 1 next following
the date of enactment.
STATEMENT
���� This bill establishes the Main
Street Economic Growth Program (program) for the purpose of providing financial
and technical assistance to businesses located in main street areas within
certain small municipalities.� The bill's purpose is to encourage business
development along traditional main streets of less-populated municipalities.
���� The bill directs the New
Jersey Economic Development Authority (EDA) to establish the program, in
consultation with the Department of Community Affairs and the New Jersey
Business Action Center.� The bill authorizes the governing body of a small
municipality to designate a �Main Street area� within the municipality. This
designation would set forth the municipality's policy and plan for addressing
the economic conditions in the Main Street area.� Specifically, the bill
defines �small municipality� as any municipality with a population under
11,000, and which municipality either: (1) is designated as a county seat; (2)
contains an opportunity zone; or (3) is over 70 percent developed, according to
a Department of Environmental Protection data set.
���� The bill provides for
corporation business tax credits and gross income tax credits for businesses
located in a Main Street area that participate in the program based upon
criteria to be determined by EDA. The bill provides that the credits be equal
to 15 percent of the cost of employee compensation expenses related to meeting
the employment criteria developed by EDA pursuant to the bill.
���� The bill also requires the EDA
to establish the Main Street Economic Growth Assistance Fund for the purpose of
providing loans, loan guarantees, and technical assistance to area businesses
located within the designated Main Street area of a participating small
municipality.� Under the bill, the EDA is permitted to decide the terms of any
loan or loan guarantee, as well as the amount of any technical assistance, that
is provided through the program.� The bill requires the EDA to issue an annual
report to the Governor and Legislature on the program and to adopt rules and
regulations to implement the program.