Bill > A982

Introduced Session

This bill, entitled the "Innovate New Jersey Act," creates the Innovate New Jersey Program (program) to allow public and private colleges, universities, and community colleges in New Jersey to be able to apply to have vacant space or land on their campuses designated as tax-free areas for the purpose of creating incubators for certain new and expanding businesses. The area designated for a business incubator may be no more than 150,000 square feet at any one college or university and no more than 1.5 million square feet of business incubator space authorized for the State. Participating colleges or universities may not utilize space that is currently being used for academic purposes to open a business incubator. Business incubator programs which currently exist and meet the program's qualifications criteria may apply for approval under the program. The program transforms vacant land and building space on the campuses of institutions of higher education into a "tax-free New Jersey area" (tax-free area) for qualifying businesses. This creates the opportunity for businesses to engage in commerce in a zero tax environment and allows businesses to leverage the assets of the college or university. Under the bill, these businesses will not be subject to State corporate or income tax or franchise fees or any local property taxes for five years, and will not have any sales tax liability for 10 years. Applications for acceptance into the program are to be decided by an Innovate New Jersey Board (board) to be established within the Economic Development Authority (EDA). The board consists of five members, one member each designated by the Governor, the Senate President, the Assembly Speaker, the Senate Minority Leader, and the Assembly Minority Leader. The board is to decide which colleges or universities may allocate tax-free space for a business incubator and which businesses are eligible to locate there. A new business accepted into the program is exempt for five years, or for the duration of the time that the new business is participating in the program, whichever is shorter, from: 1) the corporation business tax; 2) the gross income tax; 3) premiums taxes on domestic and foreign insurers; and 4) local property taxes. Further, the new business is exempt for 10 years, or for the duration of the time that the new business is participating in the program, whichever is shorter, from the sales and use tax. In order to locate in a tax-free area: 1) A new business is to be in the formative stage of development or engaged in the design, development, and introduction of new biotechnology, information technology, remanufacturing, advanced materials, processing, engineering, or electronic technology products, or innovative manufacturing processes, and meet any other requirements for a high technology business as the authority shall develop; 2) the missions and activities of the business are to align with, or further the academic mission of the university or college in the area in which the business seeks to locate; 3) a business will be required to be a new business in the State or an expanding business that creates net new jobs pursuant to a net-benefits test requiring that the business continue to maintain net new jobs and employment numbers of the business and its related companies throughout the State while in the program; and 4) the business's participation in the program is to have positive community and economic effects. The bill establishes an "Innovate New Jersey Grant Fund" (fund) to provide grants to assist selected colleges or universities with start-up costs related to necessary capital improvements to college or university facilities, and service improvement including consulting and technical assistance in order to open and operate an incubator. Grants are to be up to $125,000 a year for the first three years following board approval for inclusion in the program. A business that does not meet its net new job creation performance standards is subject to a proportionate reduction of benefits, suspension, termination, or any of the above. In the case of a business that acted fraudulently, the business would be immediately terminated from the program, be subject to applicable criminal penalties including the crime of offering a false instrument for filing in the first degree, and be required to pay back all tax benefits that the company and its employees have received. In administering the program, the EDA is to create a website for the program to include, but not be limited to: 1) a list of the resources available to potential new businesses; 2) a complete listing of business incubator facilities located in the State; 3) a description of the economic incentives for New Jersey-based businesses with the criteria for each program; and 4) the contact information for the authority and the Business Action Center.

AI Summary

Committee Categories

John Azzariti (R)*,  Nancy Muñoz (R)*, 

Introduced, Referred to Assembly Science, Innovation and Technology Committee (on 01/09/2024)

Official Document