New Jersey Direct Financial Incentives 2011
New Jersey's economic development, finance, and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include bond financing and a brownfields remediation program.
The New Jersey Economic Development Authority (EDA) issues conduit tax-exempt private activity bonds, the proceeds of which are used to provide long-term loans from $500,000 to $10,000,000 for qualified manufacturers. Certain exempt facilities in New Jersey may also be eligible, including governmentally owned public airports, docks and wharves; facilities that furnish water, electric and gas; sewer facilities; solid waste disposal facilities, including certain recycling facilities; commercial and industrial projects in federal Empowerment Zones or Enterprise Communities; certain facilities for governmental bodies, which qualify as tax-exempt governmental obligations; and certain assisted living facilities, which qualify as residential rental projects. In addition, tax-exempt bonds are available with no limit to qualified 501(c)(3) not-for-profit organizations. Financing can be used for capital improvements and expansion, including real estate acquisitions, new equipment, machinery, building construction and renovations, as well as refinancing or working capital for not-for-profit corporations. Taxable bonds are also available for a wide variety of businesses. Taxable bonds offer similar flexibility in structuring rates and terms, but are not subject to the restrictions placed on tax-exempt financing under the Internal Revenue Code (IRC).
Brownfields and Contaminated Site Remediation Program
A developer in New Jersey in need of financial assistance to clean up and redevelop polluted sites and closed municipal landfills may be eligible to recover up to 75 percent of approved costs associated with the remediation effort.
Business Employment Incentive Program (BEIP)
Companies seeking to relocate to, or expand, in New Jersey may be eligible for BEIP grants based on the number of new jobs created. By adding at least 25 qualified jobs (10 for qualifying technology companies) within two years, eligible companies can be reimbursed for up to 80 percent of gross withholding tax paid by new employees for up to 10 years, to a maximum of $50,000 per employee over the course of the grant. Companies must demonstrate that the BEIP grant is a material factor in the decision to relocate to or expand in New Jersey.
Business Retention and Relocation Assistance Grant (BRRAG)
BRRAG provides corporate business tax credits to companies that are relocating operations within New Jersey, or maintaining jobs and making a qualified capital investment at a current location in the State. Companies may benefit from up to $2,250 per year for six years, per job retained, payable as a tax credit against a company's corporate tax liability. Companies must demonstrate that the capital investment and job retention resulting from the proposed project will yield a net positive benefit to the State.
Business Retention and Relocation Assistance Grant (BRRAG) Tax Credit Certificate Transfer Program
The BRRAG Tax Credit Certificate Transfer Program allows New Jersey businesses with unused amounts of BRRAG tax credits to raise cash by selling the unused tax credits to other New Jersey businesses for at least 75 percent of their value. The selling company must certify that it cannot use the BRRAG tax credits originally issued.
Customized Training Grants
The New Jersey Department of Labor & Workforce Development offers competitively awarded training funds to help businesses develop industry specific solutions to the workforce training challenges they face.
Direct Install is a New Jersey Board of Public Utilities (BPU) program that addresses energy efficiency needs for small commercial and industrial facilities with peak demand of less than 200 kW. The peak demand threshold is waived for local government entities using an Energy Efficiency and Conservation Block Grant (EECBG) in conjunction with Direct Install. This turnkey program is aimed at providing owners a seamless, comprehensive process for analysis, equipment replacement and financial incentives to reduce consumption, lower utility costs and improve profitability. Direct Install is designed to identify cost-effective energy efficiency retrofit opportunities and provide direct installation and financial incentives for up to 60% of installed cost to encourage the early replacement of existing equipment with high efficiency alternatives. There is a $50,000 incentive cap on each project. Systems and equipment eligible for incentives include lighting, HVAC (such as natural gas infra-red heaters and warm air furnaces and boilers), motors, and variable frequency drives. Energy assessments are conducted as part of Direct Install to identify a comprehensive package of cost-effective energy efficiency improvement opportunities for each project.
Economic Redevelopment and Growth (ERG) Grant
The ERG Grant is an incentive for developers, businesses and owners to address redevelopment project financing gaps. The program utilizes up to 75 percent of the incremental increase in certain state and local revenue sources attributed to the project to provide gap financing of up to 20 percent of the total project cost, paid out over a period of up to 20 years. Redevelopment projects in qualifying areas that have secured a municipal ordinance and demonstrated sufficient net benefits may be eligible for assistance. The ERG Grant is available to shovel-ready projects that have not commenced any construction at the site of a proposed redevelopment project prior to submitting an application, except that if the New Jersey Economic Development Authority (EDA) determines that the project would not be completed otherwise, or in the event the project is to be undertaken in phases, a developer may apply for phases for which construction has not yet commenced. In addition, a developer/owner is required to make a minimum capital investment of 20 percent of the project's total cost.
Edison Innovation Clean Energy Manufacturing Fund (CEMF)
CEMF includes two separate program components offering up to $3.3 million as a grant and interest-free loan for New Jersey manufacturers of Class I renewable energy and energy efficiency technologies. Up to $300,000 is available as a grant to assist with the manufacturing site identification and procurement, design and permits. Up to $3 million is available as an interest-free loan to support site improvements, equipment purchases and facility construction and completion. One-third of the loan may convert to a performance grant if certain business and technology-based milestones are met.
Edison Innovation Growth Fund
New Jersey revenue generating technology companies may be eligible for growth capital under a matching program. These funds are currently fully invested, but please check back in the near future for the redeployment of available funds.
Edison Innovation Zones
Throughout the state, New Jersey has established three Innovation Zones that encompass state universities, research institutions and related businesses. These "technology neighborhoods" are designed to spur collaborative efforts and encourage the rapid transfer of discoveries from the laboratory to the marketplace. Resident businesses may be eligible for special benefits and financing incentives. Innovation Zones are located in Newark, Camden and the Greater New Brunswick area.
Energy Efficiency and Conservation Block Grants (EECBG)
The Energy Efficiency and Conservation Block Grant (EECBG) Rebate Program provides supplemental funding up to $20,000 for eligible New Jersey local government entities to lower the cost of installing energy conservation measures. Funding for the EECBG Rebate Program is provided through the American Recovery and Reinvestment Act (ARRA).
Energy Sales Tax Exemption for Certain Counties
Manufacturing businesses in Salem County may be eligible for energy sales tax exemption for the retail sale, transmission or distribution of electricity and natural gas.
Federal Historically Underutilized Business Zone (HUBZone) Empowerment Contracting Program
The HUBZone Empowerment Contracting Program provides federal contracting preferences to businesses that obtain HUBZone certification in part by employing staff who live in a HUBZone. The company must also maintain a "principal office" in one of these specially designated areas. New Jersey's HUBZones are located in over 60 cities and towns throughout 20 counties.
Foreign Trade Zones
Foreign Trade Zones allow companies to bring foreign goods or raw materials for manufacturing and/or assembling into the United States without formal customs entry or payment of customs duties and government excise taxes until products leave the zone. If the final product is exported from the United States, no U.S. customs duty or excise tax is levied. If the final product is entered into the commerce of the United States, fees are only due at the time of transfer on the product or its parts, whichever is lower. New Jersey has five foreign trade zones strategically located throughout the state: Morris County, Port Newark/Port Elizabeth Marine Terminal, South Jersey Port in Camden, Mercer County Airport and Lakewood Development Corporation.
Fund for Community Economic Development
The Fund for Community Economic Development provides loans and loan guarantees to support community and economic development initiatives in New Jersey's urban centers. This program offers three forms of assistance: up to a $500,000 loan for lenders to support community-based organizations and projects; up to $50,000 for feasibility studies and other pre-development costs; and up to $1.25 million for real estate projects to fill financing gaps.