Bill > S1582

Introduced Session

This bill permits the establishment of a new type of corporation termed as a Garden State Corporation. Garden State Corporations would be corporations that are principally engaged in manufacturing, principally utilizing facilities located in New Jersey, and which provide employees with a greater role in the corporate decision-making process. Garden State Corporations would qualify for credits against the corporation business tax. The bill allows a corporation to be formed as a Garden State Corporation, an existing corporation to convert to become a Garden State Corporation, and a Garden State Corporation to terminate its status as a Garden State Corporation. The certificate of incorporation or by-laws of a Garden State Corporation must provide that half of the members of the board of directors of the corporation are elected by the employees of the corporation who work in New Jersey facilities. The employee-elected members of the board would have access to all corporation documents and records and equal authority with other members of the board regarding all matters affecting the business and affairs of the corporation, including: · The selection and removal of officers of the corporation; · The amendment or repealing of the by-laws or the certificate of incorporation of the corporation; · Any decision regarding the location of corporation facilities; · Any decision to seek to obtain or terminate the status of the corporation as a benefit corporation under the provisions of P.L.2011, c.30 (C.14A:18-1 et seq.); and · Any decision that may result in the termination of the status of the corporation as a Garden State Corporation. To qualify as a Garden State Corporation, a corporation's governing documents must include procedures regarding the election of the employee-elected board members which require that only employees of the Garden State Corporation who work in facilities in New Jersey are eligible to seek election and serve as employee-elected members of the board of directors. The bill requires that each employee of the corporation who works in facilities in New Jersey, without respect the position or rank of the employee or the amount of any ownership interest that the employee may have in the corporation, have the right to vote in the selection of the employee-elected members of the board of directors, with the vote of the employee vote having equal weight with the vote of any other employee, and the right to seek election as an employee-elected member of the board of directors and serve on the board if elected. The bill provides that a Garden State Corporation would qualify for credits against the corporation business tax. These credits vary as to years of operation and whether the Garden State Corporation is also a "benefit corporation" under P.L.2011, c.30 (C.14A:18-1 et seq.). If a corporation is a Garden State Corporation but not a "benefit corporation," the bill allows the corporation credits against its liability for the corporation business tax of: 35% during the first five tax years in which it is continuously a Garden State Corporation; 25% during the sixth and seventh tax years, and 15% during the eight and ninth tax years. If a corporation is both a Garden State Corporation and a "benefit corporation," the bill allows the corporation credits against its liability for the corporation business tax of: 60% during the first five tax years in which it is continuously both a Garden State Corporation and a benefit corporation; 45% during the sixth and seventh tax years, and 30% during the eight and ninth tax years. The number of tax years in which the lower tax credit for being only a Garden State Corporation applies would be reduced by the number of years in which the higher tax credit for being both a Garden State Corporation and a "benefit corporation" applies, thus limiting to nine the total number of tax years to which the credits may apply.

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Nilsa Cruz-Perez (D)*, 

Introduced in the Senate, Referred to Senate Labor Committee (on 02/05/2018)