New Jersey Administrative Code › Title 19 - OTHER AGENCIES › NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY › Chapter 31Y - HISTORIC PROPERTY REINVESTMENT PROGRAM › Subchapter 1 - HISTORIC PROPERTY REINVESTMENT PROGRAM › Section 19:31Y-1.13 - Reduction and recapture of tax credits

Current through Register Vol. 56, No. 14, July 15, 2024
(a) If during the compliance period, a
				  business entity that has received a tax credit modifies the qualified property
				  or transformative property so that it ceases to meet the requirements for the
				  rehabilitation of a qualified property or transformative property as defined
				  under the program or ceases to meet the requirements of the rehabilitation
				  agreement, then the Authority may recapture some or all of the tax credit
				  allowed under the program. The requirements include, but are not limited to:
				  substantial compliance with the Secretary of the Interior's Standards for
				  Rehabilitation, 36 CFR
				  67.7; remaining an income producing property;
				  minimum number of residential units, if applicable; maintaining the
				  rehabilitation project so that it meets the minimum score pursuant to N.J.A.C.
				  19:31Y-1.6(c); and for a transformative project, continuing to meet the
				  definition of transformative property.
(b) If, during the compliance period, the
				  business entity ceases to maintain adequate climate control or fails to
				  preserve the building envelope, then the Authority may recapture some or all of
				  the tax credit allowed under the program.
(c) If any worker employed to perform
				  building services work at the rehabilitation project is paid less than the
				  prevailing wage rate for the worker's craft or trade pursuant to N.J.A.C.
				  19:31Y-1.12(b) and (c) during the relevant tax period, then the Authority shall
				  recapture a proportional amount of the tax credit.
(d) In the case of a business entity that has
				  chosen a selected rehabilitation period of 60 months, if the architectural
				  plans change in the course of the phased rehabilitation project, so that the
				  rehabilitation of the qualified property or transformative property would, upon
				  the rehabilitation's completion, no longer qualify for a tax credit pursuant to
				  the requirements of this program, then the business entity's tax liability for
				  the accounting or privilege period in which the business entity was issued the
				  certificate of compliance shall be increased by the full amount of the tax
				  credit that the Authority had previously allowed by that certificate of
				  compliance upon the completion of a district's prior project phase that the
				  business entity has applied against its tax liability in the prior accounting
				  or privilege period. The Authority shall notify the business entity and the
				  Director. The Director may take adverse action against the business entity,
				  consistent with the State Uniform Tax Procedure Law,
				  N.J.S.A.
				  54:48-1 et seq., including, but not limited
				  to, determining a deficiency with respect to payment due to the increased
				  liability and assessing penalties and interest from the date of the accounting
				  or privilege period. Any portion of the tax credit that the business entity has
				  not yet used or transferred at the time of the disallowance by the Officer
				  shall be deemed void.
(e) If, based
				  on new information, the Authority determines that recapture should have been
				  applicable pursuant to any of the provisions in this section, the Authority
				  shall recapture the tax credits as if the Authority had been timely
				  informed.
(f) If, at any time, the
				  Authority determines that the business entity or co-applicant made a material
				  misrepresentation on the business entity's application, project completion
				  certification, annual report, or any related submissions, the Authority shall
				  recapture some or all of the tax credits of the business entity and any
				  co-applicant, which shall be in addition to any other remedies in the
				  rehabilitation agreement and any criminal or civil penalties to which the
				  business entity, co-applicant, and the respective officer of the business
				  entity or co-applicant may be subject.
(g) Any recapture amount pursuant to this
				  section may include interest on the recapture amount, at a rate equal to the
				  statutory rate for tax deficiencies, plus any statutory penalties, and all
				  costs incurred by the Authority and the Division of Taxation in the Department
				  of the Treasury, in connection with the pursuit of the recapture, including,
				  but not limited to, counsel fees, court costs, and other costs of collection.
				  The Authority shall confer with the Division of Taxation to determine the
				  recapture amount.
(h) The Authority
				  shall notify the Officer of any reduction or recapture of tax credit awarded
				  under this program.
(i) If all, or
				  part of a tax credit sold or assigned pursuant to section 5 at
				  P.L.
				  2020, c. 156, and
				  N.J.A.C. 19:31Y-1.11 is subject to recapture, then the Authority shall pursue
				  recapture from the business entity and, to the extent the co-applicant is
				  involved with the basis for the recapture, any co-applicant, and not from the
				  purchaser or assignee of the tax credit transfer certificate.
(j) The Authority shall notify the Director
				  of any funds recaptured pursuant to this section. Any recaptured funds,
				  including penalties and interest, shall be deposited into the General Fund of
				  the State.