The New Jersey Governor recently signed legislation creating new incentives for New Jersey businesses to provide monies for capital investment and a $3,000 grant to New Jersey businesses for each new job created and retained for one year. These initiatives were announced in October, 2008 by Governor Corzine in order to support business growth and job creation in New Jersey and were recently enacted by the New Jersey legislature. The regulations governing these initiatives are contained in the March 2, 2009 New Jersey Register.
The $3,000 grant program is designed to provide grants for each eligible position created after December 1, 2008 and before January 1, 2011 by qualified businesses that experience a net increase in employment of eligible positions in New Jersey during the same 12 consecutive months.
The capital investment component of the program authorizes the payment of grants equal to seven percent of a business's qualifying investment in New Jersey of at least $5,000 made prior to January 1, 2011. Up to $70 million is available for capital investment grants, not to exceed $1 million per grantee, to fund certain qualifying business expenses. These expenses may cover site preparation, construction, renovations, improvements, and the purchase of fixtures, machinery and equipment. Under certain conditions, site remediation costs may also be included. To be eligible, businesses must have operated continuously for at least the prior two years, and must employ at least five full-time workers.
In addition, the New Jersey Governor signed the Main Street Business Assistance Program to enable qualified businesses and nonprofit organizations in New Jersey to more easily access capital by providing state support for bank lending through loan participations and credit enhancements.
As of early March, the incentive program has been so popular that it is already oversubscribed. Since the program became active in early January, the EDA has received 820 applications. If all of the applications were approved, they would exceed the $50 million budgeted for the job creation program and the $70 million budgeted for capital investment rebates. The State has not yet committed additional funds to the program; however, the EDA is still accepting applications for a waiting list in case enough initial applications do not qualify. Applications can be found on the EDA’s website at www.njeda.com, and must be submitted prior to January 11, 2011.
As with the other business incentives, the New Jersey Economic Development Authority (EDA) administers the new programs. These incentives are part of the array of incentives offered by New Jersey to businesses. Examples of others are the Business Employment Incentive Program (BEIP) and Business Retention and Relocation Assistance Grant (BRRAG) program.
Riker Danzig is familiar with these programs and has experience meeting with the appropriate New Jersey state officials on behalf of clients. We are available to provide clients with assistance in evaluating these incentives.
