April is typically a quiet period for the New Jersey Legislature, which is in recess, but there was some activity on the pending economic legislation introduced at the end of March. This activity and the anticipated introduction of the Economic Opportunity Act of 2014, Part II merits a brief update. As reported in the March issue of In the Zone, bills introduced by Senator Raymond Lesniak as the Economic Opportunity Act of 2014, Part I, and the Economic Opportunity Act of 2014, Part III, were intended to correct errors in the New Jersey Economic Opportunity Act of 2013 but also supplement the existing law. See the March issue of In the Zone for a brief overview of these bills.
Part I (S928) received legislative committee consideration last month. It had been introduced in January and referred to the Senate Economic Growth Committee, which reported favorably on the bill engrafting some amendments in late January. It was next referred to the Senate Budget and Appropriations Committee which, on March 24th, reported favorably on the bill and sent it to the entire Senate for consideration despite a tepid fiscal impact analysis by the Office of Legislative Services (OLS). In that analysis, OLS warned that the bill may have a negative fiscal net impact of unknown magnitude in concluding that any indirect revenue gain from the residential redevelopment projects benefitting from the legislation would probably be less than the State's direct cost of providing additional ERGG tax credits. Notwithstanding that analysis, S928 was referred out, put to a vote and passed the Senate by a 34 to 2 margin on March 27th. The companion legislation, A2716, is presently before the Assembly Commerce and Economic Development Committee for consideration.
The Economic Opportunity Act of 2014, Part II, has been withheld from introduction by the Senator to date. An informed source believes it could be dropped in early May and will include a significant increase in tax credits for residential projects. While this remains to be seen, the granddaddy of them all, the New Jersey Economic Opportunity Act of 2013, has been widely embraced with many developers and municipalities seeking to take advantage of its provisions. Thus, there now appears to be a significant backlog of applications awaiting agency action. We will continue to follow this progressive legislation as it wends its way through the Legislature.
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