Heeding Governor Jon Corzine's urgent plea for action, both houses of the Legislature have moved quickly on legislation to spur economic growth. Measures that would bring New Jersey’s corporate tax code more in line with that of other states cleared important legislative hurdles on October 23 as an Assembly committee took up an important new initiative aimed directly at helping small businesses survive the credit crunch.

The legislative session was the third in as many weeks devoted primarily to economic growth legislation. With its close proximity to Wall Street and the large financial services industry, New Jersey is expected to suffer deeply from the financial crisis. Legislators and the Governor are trying to improve New Jersey’s business climate and provide new tools to State agencies to blunt the downturn.

Here is a look at the most recent action.

NJEDA Main Street Business Assistance Program. Part of the Governor’s economic recovery plan includes an innovative initiative dubbed the Main Street Business Assistance Program. Administered by the NJ Economic Development Authority (EDA), the program would provide business loans for working capital, capital investment and debt refinancing. But unlike other EDA programs, this one would be tied to job retention, not just creating new jobs. It would also allow businesses to refinance existing debt. The EDA would also provide a line-of-credit guarantee to help businesses deal with the credit crunch.

Legislation implementing the program, A-3377 (Schaer, Fisher), was released October 23 by the Assembly Budget Committee. The bill would appropriate $50 million for the program.

NOL Expansion. The Senate passed S-2130 (Codey), which would increase New Jersey’s net-operating-loss, carry forward period to 20 years from the current seven. Under the bill, businesses that have a loss in one fiscal year would be able to deduct it from income received for up to 20 future years. The federal government and more than half of the states that have a corporation business tax, including our regional competitors, allow the longer deduction period. S-2130 and a similar Assembly Bill, A-3124 (Greenwald, McKeon), are awaiting votes by the Assembly.

"Throw-Out" and "Regular Place of Business" Rules. Since 2002, New Jersey has taxed the out-of-state income of its corporate taxpayers in a situation where no other state taxes it. This is known as the "throw-out" rule and it discourages businesses from locating in New Jersey and creating jobs here. A-2722 (Vas, Greenwald), which would repeal the tax on non-New Jersey-related income, was released October 23 by the Assembly Appropriations Committee, and is scheduled for a floor vote on October 27.

The committee also amended the bill to eliminate the Corporation Business Tax’s regular-place-of-business clause. Currently, a company must have a staffed out-of-state facility in order to have its income apportioned for New Jersey tax purposes. This wasteful requirement will be eliminated. Together, these two provisions would save New Jersey businesses $150 million annually.

For more information, contact at ext. 247.

Energy Master Plan Released, Could Raise Rates on Employers

The State’s newly completed Energy Master Plan would help businesses conserve energy and reduce the amount of energy they consume from utilities, but it could also lead to higher electricity rates. The plan calls for more on-site cogeneration of energy at businesses and publication of a “best practices” energy conservation manual to facilitate energy savings in ten specific industries. However, a recommended mandate on renewable energy could lead to higher electricity rates in a State where businesses already pay among the highest rates in the nation.

Governor Corzine unveiled the Energy Master Plan on October 22. It is intended to help move the state toward a responsible energy future in which there will be adequate, reliable energy supplies that are both environmentally responsible and competitively priced.

Specifically, the plan calls for increasing the amount of electricity businesses generate on-site by 1,500 megawatts by 2020. Businesses would be able to save on their electric bill by engaging in cogeneration and other programs that take pressure off New Jersey’s electric utilities. Additionally, the publication of a best practices manual would facilitate energy conservation by businesses. NJBIA supports measures to encourage voluntary green-building. However, parts of the plan call for mandatory green building codes that would increase New Jersey’s already high cost of doing business.

The plan also recommends that New Jersey generate 30 percent of its energy from renewable energy sources such as wind, solar power, and biofuels by 2020. NJBIA thinks this goal is unrealistic, as only 2 to 5 percent of the State’s energy comes from renewable sources right now. Furthermore, meeting that goal would increase electricity rates. Energy generated from renewable sources is far more expensive than energy from conventional power plants. Forcing New Jersey consumers to obtain nearly one-third of their energy from these more costly sources could have a negative impact on the economy.

For more information, contact at ext. 204.

How to Buy Health Insurance... and Other Events

NJBIA is gearing up to close out the year with great events to keep you plugged in, ahead of the curve and on top of things. For more information or to register, contact at 609-393-7707, ext. 213, or register online now. If you want to raise your company's visibility by sponsoring an event, contact at ext. 219. In the meantime, mark your calendar.

Awards for Excellence Dinner - Meet our nine 2008 award winners.
Begins at 6:00 p.m.
Wednesday, November 5
Pines Manor, Edison

Health Insurance: How To Be a Savvy Purchaser - Find out how to manage your costs.
8:30 a.m. to 12:30 p.m.
Friday, November 14
Woodbridge Hotel and Conference Center, Iselin

Navigating Paid Family Leave - NJ's new paid leave law applies to all employers.
8:30 a.m. to 1:00 p.m.
Tuesday, December 3
Sheraton, Eatontown

Public Policy Forum - Meet NJ's top business and government leaders.
7:45 a.m. to 2:00 p.m.
Tuesday, December 9
Woodbridge Hotel and Conference Center, Iselin