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A4437
ASSEMBLY, No. 4437
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED FEBRUARY 19, 2026
Sponsored by:
GAssemblyman� LOUIS D. GREENWALD
District 6 (Burlington and Camden)
SYNOPSIS
���� Provides CBT and GIT credits for undertaking of
qualified moderate-income housing projects in certain distressed
municipalities.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
providing corporation business and gross income tax
credits for the undertaking of qualified moderate-income housing projects in
certain municipalities, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.)
and Title 54A of the New Jersey Revised Statutes.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� a. (1) A taxpayer shall
be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5), as calculated pursuant to paragraph (2) of this subsection,
for the qualified construction costs incurred by the taxpayer during the
privilege period for a qualified moderate-income housing project located in a
qualified distressed municipality.
���� (2) The amount of the credit
authorized pursuant to this section shall not exceed the lesser of: (a) 25
percent of the total qualified construction costs incurred by the taxpayer
during the privilege period; or (b) $1,000,000.
���� b.��� (1)� In order to claim
the tax credit allowed pursuant to this section, a taxpayer shall submit an
application to the director, in a form and manner prescribed by the director,
demonstrating that the qualified moderate-income housing project undertaken by
the taxpayer meets the requirements of this section.� In addition to any other
information or documentation that the director deems appropriate, the
application shall also include a copy of any receipts or other documentation
demonstrating the qualified construction costs incurred by the taxpayer.
���� (2)�� The director shall
review each application submitted by a taxpayer in accordance with this section
and make a determination regarding the approval of the application within 90
calendar days of the date the completed application is received.� The director
shall issue a written certification to each taxpayer whose application has been
reviewed and approved by the director in accordance with this section within
five calendar days of the date the director�s determination is made.� A copy of
the certification shall be included in the filing of a return that includes a
claim for the credit.
���� (3)�� If the director fails to
make a determination regarding an application submitted pursuant to this
subsection within 90 calendar days of the date the application is received, or
if the director fails to issue a written certification within five calendar days
of the date a determination is made, the application shall be deemed to have
been approved and the written certification shall be deemed to have been issued
by the director.� Each taxpayer that submitted an application in accordance
with this subsection but fails to receive a determination from the director
within 90 calendar days of the date the application is submitted, or fails to
receive a written certification from the director within five calendar days of
the date of the director�s determination is made, shall include a copy of the
taxpayer�s application when filing a return that includes a claim for the
credit allowed in accordance with subsection a. of this section.
���� c.���� The order of priority
of the application of the credit allowed under this section, together with any
other credits allowed by law shall be as prescribed by the Director of the
Division of Taxation.� The amount of credits 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 payments, credits, deductions, and
adjustments allowed by law, shall not exceed 25 percent of the tax liability
otherwise due and shall not reduce the tax liability for a privilege period 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).� The amount of the credit otherwise
allowable under this section which cannot be applied for the privilege period
due to the limitations of this subsection or under other provisions of
P.L.1945, c.162 (C.54:10A-1 et seq.) may be carried forward, if necessary, to
the seven privilege periods following the privilege period for which the credit
is allowed.�����
���� d.��� (1)� A taxpayer allowed
a credit in accordance with subsection a. of this section may make and file an
application with the director for a tax credit transfer certificate in lieu of
the taxpayer being allowed any amount of the credit against the tax liability
of the taxpayer.
���� (2)�� Upon the review and
approval of an application made and filed in accordance with this subsection,
the director shall issue to the taxpayer a tax credit transfer certificate.� The
tax credit transfer certificate issued to a taxpayer by the director shall
include a statement waiving the taxpayer's right to apply that amount of the
credit against the tax imposed pursuant to section 5 of P.L.1945, c.162
(C.54:10A-5) that the taxpayer has elected to sell to another person in
exchange for private financial consideration.�
���� (3)�� The tax credit transfer
certificate issued to a taxpayer by the director may be sold, in full or in
part, to another person that may have a liability for tax under section 5 of
P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945,
c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15),
or N.J.S.17B:23-5, in exchange for private financial consideration to be
provided to the taxpayer by the person making the purchase.� The sale of any
amount of a tax credit transfer certificate issued to a taxpayer by the
director shall not be made for private financial consideration of less than 75
percent of the transferred credit amount.
���� (4)�� The amount of any tax
credit transfer certificate that may be used by a purchaser against a tax
liability of the purchaser under section 5 of P.L.1945, c.162 (C.54:10A-5),
N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and
C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 shall
be subject to any limitations and conditions on the application of tax credit
transfer certificates that may be prescribed by the director.
���� e.���� As used in this
section:
���� �Director� means Director of
the Division of Taxation in the Department of the Treasury.
���� �Moderate-income housing� means
housing affordable, occupied, or reserved for occupancy by households with a
gross household income equal to more than 50 percent but less than 80 percent
of the median gross household income for households of the same size within the
housing region in which the housing is located, according to United States
Department of Housing and Urban Development or other recognized standards for
home ownership and rental costs.
���� �Qualified construction costs�
means costs incurred in connection with the completion of a qualified
moderate-income housing project, including, but not limited to, demolition of
preexisting buildings, removal of debris, site remediation, or the repurposing
of an existing building for residential use as part of a qualified
moderate-income housing project.
���� �Qualified distressed
municipality� means a municipality in the State that is qualified to receive
assistance under P.L.1978, c.14 (C.52:27D-178 et seq.), a municipality under
the supervision of the Local Finance Board pursuant to the provisions of the �Local
Government Supervision Act (1947),� P.L.1947, c.151 (C.52:27BB-1 et seq.), a
municipality identified by the Director of the Division of Local Government
Services in the Department of Community Affairs to be facing serious fiscal
distress, a SDA municipality, or a municipality in which a major rail station
is located.
���� �Qualified moderate-income
housing project� means development undertaken in a qualified distressed
municipality for the purpose of creating one or more residential structures, whether
in the form of detached units or attached units for separate occupancy, in
which at least 80 percent of the housing units are reserved for moderate-income
households.� �Qualified moderate-income housing project� shall not include
development in which any portion of the property is dedicated for commercial
purposes.
���� �Remediation� means the
investigation, analysis, planning, monitoring, acquisition, removal,
containment, remediation, construction, or improvement of any real property or
building necessary or desirable for the cleanup of actual, potential, or
perceived environmental contamination or pollution, including without
limitation, water pollution, air pollution, pollution caused by solid waste
disposal, thermal pollution, radiation contamination, or other general
environmental contamination or pollution which is or may become injurious to
the environment or to the public health, safety, or welfare.
���� 2.��� a. (1) A taxpayer shall
be allowed a credit against the �New Jersey Gross Income Tax Act,�
N.J.S.54A:1-1 et seq., as calculated pursuant to paragraph (2) of this
subsection, for the qualified construction costs incurred by the taxpayer
during the taxable year for a qualified moderate-income housing project located
in a qualified distressed municipality.
���� (2) The amount of the credit
authorized pursuant to this section shall not exceed the lesser of: (a) 25
percent of the total qualified construction costs incurred by the taxpayer
during the taxable year; or (b) $1,000,000.
���� b.��� (1)� In order to claim
the tax credit allowed pursuant to this section, a taxpayer shall submit an
application to the director, in a form and manner prescribed by the director,
demonstrating that the qualified moderate-income housing project undertaken by
the taxpayer meets the requirements of this section.� In addition to any other
information or documentation that the director deems appropriate, the
application shall also include a copy of any receipts or other documentation
demonstrating the qualified construction costs incurred by the taxpayer.
���� (2)�� The director shall
review each application submitted by a taxpayer in accordance with this section
and make a determination regarding the approval of the application within 90
calendar days of the date the completed application is received.� The director
shall issue a written certification to each taxpayer whose application has been
reviewed and approved by the director in accordance with this section within
five calendar days of the date the director�s determination is made.� A copy of
the certification shall be included in the filing of a return that includes a
claim for the credit.
���� (3)�� If the director fails to
make a determination regarding an application submitted pursuant to this
subsection within 90 calendar days of the date the application is received, or
if the director fails to issue a written certification within five calendar days
of the date a determination is made, the application shall be deemed to have
been approved and the written certification shall be deemed to have been issued
by the director.� Each taxpayer that submitted an application in accordance
with this subsection but fails to receive a determination from the director
within 90 calendar days of the date the application is submitted, or fails to
receive a written certification from the director within five calendar days of
the date of the director�s determination is made, shall include a copy of the
taxpayer�s application when filing a return that includes a claim for the
credit allowed in accordance with subsection a. of this section.
���� c.���� (1)� A business entity
that is classified as a partnership for federal income tax purposes shall not
be allowed the credit directly under the gross income tax, but the amount of
credit of the taxpayer with respect to 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.
���� (2)�� A taxpayer that is a New
Jersey S corporation shall not be allowed the credit directly under the gross
income tax, but the amount of credit of a taxpayer with respect to 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.
���� d.��� The order of priority of
the application of the credit allowed pursuant to this section, together with
any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et
seq. for a taxable year, shall be as prescribed by the director.� The amount of
the credit applied under this section against the New Jersey gross income tax
imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, when taken
together with any other payments, credits, deductions, and adjustments allowed
by law, shall not reduce a taxpayer's tax liability to an amount less than
zero.� The amount of the tax credit otherwise allowable under this section
which cannot be applied for the taxable year due to the limitations of this
section or other provisions of N.J.S.54A:1-1 et seq. may be carried forward, if
necessary, to the seven taxable years following the taxable year for which the
tax credit was allowed.
���� e.���� (1)� A taxpayer allowed
a credit in accordance with subsection a. of this section may make and file an
application with the director for a tax credit transfer certificate in lieu of
the taxpayer being allowed any amount of the credit against the tax liability
of the taxpayer.
���� (2)�� Upon the review and
approval of an application made and filed in accordance with this subsection,
the director shall issue to the taxpayer a tax credit transfer certificate.� The
tax credit transfer certificate issued to a taxpayer by the director shall
include a statement waiving the taxpayer's right to apply that amount of the
credit against the tax imposed pursuant to N.J.S.54A:1-1 et seq. and that the
taxpayer has elected to sell to another person in exchange for private
financial consideration.�
���� (3)�� The tax credit transfer
certificate issued to a taxpayer by the director may be sold, in full or in
part, to another person that may have a liability for tax under section 5 of
P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945,
c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15),
or N.J.S.17B:23-5, in exchange for private financial consideration to be
provided to the taxpayer by the person making the purchase.� The sale of any
amount of a tax credit transfer certificate issued to a taxpayer by the
director shall not be made for private financial consideration of less than 75
percent of the transferred credit amount.
���� (4)�� The amount of any tax
credit transfer certificate that may be used by a purchaser against a tax
liability of the purchaser under section 5 of P.L.1945, c.162 (C.54:10A-5),
N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and
C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 shall
be subject to any limitations and conditions on the application of tax credit
transfer certificates that may be prescribed by the director.
���� f.���� As used in this
section:
���� �Director� means Director of
the Division of Taxation in the Department of the Treasury.
���� �Moderate-income housing� means
housing affordable, occupied, or reserved for occupancy by households with a
gross household income equal to more than 50 percent but less than 80 percent
of the median gross household income for households of the same size within the
housing region in which the housing is located, according to United States
Department of Housing and Urban Development or other recognized standards for
home ownership and rental costs.
���� �Qualified construction costs�
means costs incurred in connection with the completion of a qualified
moderate-income housing project, including but not limited to, demolition of
preexisting buildings, removal of debris, site remediation, or the repurposing
of an existing building for residential use as part of a qualified
moderate-income housing project.
���� �Qualified distressed
municipality� means a municipality in the State that is qualified to receive
assistance under P.L.1978, c.14 (C.52:27D-178 et seq.), a municipality under
the supervision of the Local Finance Board pursuant to the provisions of the �Local
Government Supervision Act (1947),� P.L.1947, c.151 (C.52:27BB-1 et seq.), a
municipality identified by the Director of the Division of Local Government
Services in the Department of Community Affairs to be facing serious fiscal
distress, a SDA municipality, or a municipality in which a major rail station
is located.
���� �Qualified moderate-income
housing project� means development undertaken in a qualified distressed
municipality for the purpose of creating one or more residential structures,
whether in the form of detached units or attached units for separate occupancy,
in which at least 80 percent of the housing units are reserved for
moderate-income households.� �Qualified moderate-income housing project� shall
not include development in which any portion of the property is dedicated for
commercial purposes.
���� �Remediation� means the
investigation, analysis, planning, monitoring, acquisition, removal,
containment, remediation, construction, or improvement of any real property or
building necessary or desirable for the cleanup of actual, potential, or
perceived environmental contamination or pollution, including without
limitation, water pollution, air pollution, pollution caused by solid waste
disposal, thermal pollution, radiation contamination, or other general
environmental contamination or pollution which is or may become injurious to
the environment or to the public health, safety, or welfare.
���� 3.��� The Director of the
Division of Taxation in the Department of the Treasury shall adopt rules and
regulations in accordance with the "Administrative Procedure Act,"
P.L.1968, c.410 (C.52:14B-1 et seq.) as necessary to implement the provisions
of this act.
���� 4.��� This act shall take
effect immediately and shall apply to privilege periods and taxable years
beginning on or after January 1 of the year next following the date of
enactment.
STATEMENT
���� This bill provides corporation
business and gross income tax credits to taxpayers for qualified
moderate-income housing projects undertaken in certain distressed
municipalities.� Specifically, the credits would be for either 25 percent or $1
million of the qualified construction costs incurred by the taxpayer, whichever
is less, during the privilege period or taxable year for a qualified
moderate-income housing project located in a qualified distressed municipality.
���� In order to claim the tax credits
allowed under the bill, a taxpayer would be required to submit an application
to the Director of the Division of Taxation, in a form and manner prescribed by
the director, demonstrating that the qualified moderate-income housing project undertaken
by the taxpayer incurred qualified construction costs, and the amount of the
tax credit the taxpayer is entitled to pursuant to the bill.� Upon approval of
the application, a copy of the certification issued by the director would be
required to be included with the taxpayer�s tax return when such return is
filed.�
���� A taxpayer that is eligible to
claim the credits would be permitted to apply for a tax credit transfer
certificate with the Director of the Division of Taxation in lieu of having the
credits applied against their tax liability.� Upon issuance of the transfer
certificate, the taxpayer would then be permitted to be sell the credits to
another taxpayer with tax liability under certain other State taxes.� If the
sale of a transfer certificate occurs, it is required to be conducted for
private financial consideration of no less than 75 percent of the transferred
credit amount.
���� The bill defines a �qualified
moderate-income housing project� as development undertaken in a qualified
distressed municipality for the purpose of creating one or more residential
structures, whether in the form of detached units or attached units for
separate occupancy, in which a substantial percentage of the housing units are reserved
for moderate-income housing.� The bill specifically prohibits a qualified
moderate-income housing project from including development in which any portion
is dedicated for commercial purposes.
���� The bill also defines a
�moderate-income household� as housing affordable, occupied, or reserved for
occupancy by households with a gross household income equal to more than 50
percent but less than 80 percent of the median gross household income for
households of the same size within the housing region in which the housing is
located, according to United States Department of Housing and Urban Development
or other recognized standards for home ownership and rental costs.
���� The bill further defines a
�qualified distressed municipality� as a municipality in the State that is
qualified to receive assistance as an urban aid municipality, a municipality
under the supervision of the Local Finance Board within the Division of Local
Government Services, a municipality identified by the Director of the Division
of Local Government Services in the Department of Community Affairs to be
facing serious fiscal distress, a SDA municipality, or a municipality in which
a major rail station is located.