Establishes Main Street Economic Growth Program to encourage business development in small, highly developed municipalities.

A2424

ASSEMBLY, No. 2424

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman TENNILLE R. MCCOY

District 14 (Mercer and Middlesex)

SYNOPSIS

���� Establishes Main Street Economic Growth Program to
encourage business development in small, highly developed 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; and

���� 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.

���� "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 Loan 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).

���� �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 latest
decennial census which 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 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.��� 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 state the small municipality's policy and intentions for
addressing these conditions.� The statement of intent to address conditions in
a Main Street area shall include:

���� a.���� 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;

���� b.��� 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;

���� c.���� 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;

���� d.��� Utilizing the powers
conferred by law to revise municipal planning and zoning ordinances and other
land use regulations as they pertain to the Main Street area, in order to
enhance the attraction of the area to existing and prospective area businesses;
and

���� e.���� 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 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 and 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 to 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.�� The
order of priority of the application of the credit allowed pursuant to this
section and 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.

����� 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.

����� 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, deliver 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 a 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.� Sections 7 and 8 shall apply to privilege periods and taxable
years beginning on or after the January 1 following the date of enactment.

STATEMENT

���� This bill establishes the
�Main Street Economic Growth Program� for the purpose of providing financial
and technical assistance to businesses located in main street areas of small
municipalities. The bill directs the New Jersey Economic Development Authority
(EDA) to establish the program. The bill authorizes the governing body of each
municipality that has a population under 11,000 and which is more than 70
percent developed, according to a Department of Environmental Protection data
set, 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.

���� The bill provides for
corporation business tax credits and gross income tax credits for businesses
located in a Main Street area within a small municipality that participates in
the program based upon criteria to be determined by EDA. The bill provides for
tax credits equal to 15 percent of the cost of employee compensation expenses
related to meeting the employment criteria developed by EDA pursuant to the
bill.

���� Under the bill, EDA would
create 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.
The bill allows EDA to establish terms governing loans, loan guarantees, tax
credits, and technical assistance under the program. The bill requires EDA to
issue an annual report to the Governor and the Legislature on the program and
to adopt rules and regulations to implement the program.