New Jersey Administrative Code › Title 19 - OTHER AGENCIES › NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY › Chapter 31H - URBAN TRANSIT HUB TAX CREDIT PROGRAM › Subchapter 1 - URBAN TRANSIT HUB TAX CREDIT PROGRAM › Section 19:31H-1.2 - Definitions

Current through Register Vol. 56, No. 14, July 15, 2024
The following words and terms, when used in this
					 subchapter, shall have the following meanings, unless the context clearly
					 indicates otherwise.
"Acquisition" means the purchase of a qualified business
					 facility between unrelated parties pursuant to an arm's length transaction. The
					 value of the land shall be appraised as vacant and subtracted from the purchase
					 price to determine the amount of the capital investment. If the acquisition is
					 of a facility that existed prior to the January 13, 2008 effective date of the
					 Act, the buyer shall undertake capital investments of a value not less than 50
					 percent of the total cost to acquire the facility in order for the acquisition
					 of such facility to be included in this Program.
"Act" means the Urban Transit Hub Tax Credit Act,
					 P.L.
					 2007, c. 346.
"Affiliate" means an entity that directly or indirectly
					 controls, is under common control with, or is controlled by the business, and
					 may include not-for-profit entities. Control exists in all cases in which the
					 entity is a member of a controlled group of corporations as defined pursuant to
					 Section 1563 of the Internal Revenue Code
					 of 1986, as amended, 26 U.S.C. § 1563 or the entity is an organization in
					 a group of organizations under common control as defined in Section
					 414(b) or
					 (c) of the Internal Revenue Code of 1986, as
					 amended, 26 U.S.C. § 414(b), (c). A taxpayer may establish by clear and
					 convincing evidence, as determined by the by clear and convincing evidence, as
					 determined by the Director of the Division of Taxation in the Department of the
					 Treasury, that control exists in situations involving lesser percentages of
					 ownership than required by those statutes. An affiliate of a business may
					 contribute to meeting either the qualified investment or full-time employee
					 requirements of a business that applies for a credit under
					 section
					 3 of
					 P.L.
					 2007, c. 346 (34:1B-209
					 ).
"Approval letter" means the letter sent by the Authority
					 that sets forth the conditions subsequent to the approval, the forecasted
					 schedule for completion and occupancy of the project, the date the 10-year
					 eligibility period is scheduled to commence, the estimated amount of tax
					 credits, and other such information which further the purposes of
					 P.L.
					 2007, c. 346. The
					 approval letter will require the applicant to submit progress information by a
					 certain date in order to preserve the approval of the tax credits.
"Authority" means the New Jersey Economic Development
					 Authority.
"Board" means the Board of the New Jersey Economic
					 Development Authority.
"Business" means a corporation that is subject to the tax
					 imposed pursuant to section 5 of P.L. 1945, c. 162 (54:10A-5 ), a corporation
					 that is subject to the tax imposed pursuant to sections 2 and 3 of P.L. 1945,
					 c. 132 (54:18A-2 and 54:18A-3 ), section 1 of P.L. 1950, c. 231 (17:32-15 ) or
					 17B:23-5, or is an entity classified as a partnership, an S corporation, or a
					 limited liability company. A business shall include an affiliate of the
					 business if that business applies for a credit based upon any capital
					 investment made by the affiliate or full-time employees of an affiliate are
					 necessary to evidence compliance with eligibility requirements.
"Capital investment" in a qualified business facility and a
					 qualified residential project means expenses incurred for the site preparation
					 and construction, repair, renovation, improvement, equipping, or furnishing of
					 a building, structure, facility, or improvement to real property, including
					 associated soft costs. Capital investment includes obtaining and installing
					 furnishings and machinery, apparatus or equipment for the operation of a
					 business in a building, structure, facility, or improvement to real property,
					 site-related utility and transportation infrastructure improvements, plantings
					 or other environmental components required to attain the level of silver rating
					 or above in the LEED(R) building rating system, but only to the extent that
					 such capital investments have not received any grant financial assistance from
					 any other State funding source including
					 N.J.S.A.
					 52:27H-80 et seq. (The United States Green
					 Building Council has developed the Leadership in Energy & Environmental
					 Design (LEED) Green Building Rating System for measuring the energy efficiency
					 and environmental sustainability of buildings. The LEED Rating System is a
					 third-party certification program and the nationally accepted benchmark for the
					 design, construction, and operation of high performance buildings.) Vehicles
					 and heavy equipment not permanently located in the building, structure,
					 facility, or improvement shall not constitute a capital investment. Also
					 included is remediation of the qualified business facility or qualified
					 residential project site, but only to the extent that such remediation has not
					 received financial assistance from any other Federal, State, or local funding
					 source. With respect to commercial development, to be included the capital
					 investment must be commenced after January 13, 2008, the effective date of
					 P.L.
					 2007, c. 346. For
					 applications submitted to and approved by the Authority prior to September 18,
					 2013, the effective date of the "New Jersey Economic Opportunity Act of 2013,"
					 P.L.
					 2013, c. 161, the
					 applicant shall incur expenses and submit its documentation for approval of its
					 credit amount by January 13, 2016, the eighth anniversary of the effective date
					 of P.L.
					 2007, c. 346, and for
					 commercial development applications approved on or after September 18, 2013,
					 and on or before December 31, 2013, the applicant shall incur expenses and
					 submit its documentation for approval of its credit amount no later than April
					 26, 2019. With respect to residential development, the capital investment must
					 be commenced after July 28, 2009, the effective date of
					 P.L.
					 2009, c. 90, to be
					 included and developers shall incur expenses and submit their documentation to
					 support the amount of their capital investment no later than April 26, 2019.
					 For purposes of this subchapter, "commenced" shall mean that the project
					 consisting of construction of a new building shall not have progressed beyond
					 site preparation; the project consisting of acquisition of an existing building
					 shall not have closed title; and the project consisting of renovation or
					 reconstruction of an existing building shall not have commenced
					 construction.
"Developer" means, with respect to a qualified business
					 facility, a business that intends to construct and lease a business facility. A
					 developer may seek to receive approval that the facility will constitute a
					 qualified business facility conditioned upon identification of tenants that
					 will have qualifying employment and pro formas indicating that the capital
					 investment requirements will be met.
"Eligibility period" means the 10-year period in which a
					 business may claim an urban transit hub tax credit, beginning with the tax
					 period in which the Authority first certifies that the business has met the
					 capital investment and employment qualifications, if any, of the
					 Program.
"Eligible municipality" means a municipality: which
					 qualifies for State aid pursuant to P.L. 1978, c. 14 (52:27D-178 et seq.) or
					 which was continued to be a qualified municipality thereunder pursuant to P.L.
					 2007, c. 111; and in which 30 percent or more of the value of real property was
					 exempt from local property taxation during tax year 2006. The percentage of
					 exempt property shall be calculated by dividing the total exempt value by the
					 sum of the net valuation, which is taxable and that which is tax exempt. For
					 State fiscal year 2008, the eligible municipalities are: Camden, East Orange,
					 Elizabeth, Jersey City, Newark, New Brunswick, Paterson, Trenton and Hoboken.
					 For subsequent State fiscal years, the Authority, after consultation of the
					 Department of Community Affairs, shall annually publish at
www.newjerseybusiness.gov
a
					 notice listing the eligible municipalities.
"Full-time employee" means a person employed by the
					 business for consideration for at least 35 hours a week, or who renders any
					 other standard of service generally accepted by custom or practice as full-time
					 employment, as determined by the Authority, or a person who is employed by a
					 professional employer organization pursuant to an employee leasing agreement
					 between the business and the professional employer organization, in accordance
					 with P.L.
					 2001, c. 260 (34:8-67
					 et seq.) for at least 35 hours a week, or who renders any other standard of
					 service generally accepted by custom or practice as full-time employment, as
					 determined by the Authority, and whose wages are subject to withholding as
					 provided in the New Jersey Gross Income Tax Act, 54A:1-1 et seq., or an
					 employee who is a resident of another state but whose income is not subject to
					 the New Jersey Gross Income Tax Act, 54A:1-1 et seq., or who is a partner of a
					 business who works for the partnership for at least 35 hours a week, or who
					 renders any other standard of service generally accepted by custom or practice
					 as determined by the Authority as full-time employment, and whose distributive
					 share of income, gain, loss, or deduction, or whose guaranteed payments, or any
					 combination thereof is subject to the payment of estimated taxes, as provided
					 in the New Jersey Gross Income Tax Act, 54A:1-1 et seq. "Full-time employee"
					 shall not include any person who works as an independent contractor or on a
					 consulting basis for the business.
"Full-time employee at the qualified business facility"
					 means a full-time employee whose primary office is at the site and who spends
					 at least 80 percent of his or her time at the site, or who spends any other
					 period of time generally accepted by custom or practice as full-time employment
					 at the site, as determined by the Authority. For the purpose of calculating the
					 number of new full-time employees, a position shall not be considered a new
					 full-time position unless it is in addition to the number of full-time
					 employees in the business's Statewide workforce in the last tax accounting or
					 privilege period prior to the tax credit amount approval.
"Leasable area" means rentable area of the building as
					 calculated pursuant to the measuring standards of the project. This standard
					 will be defined in the lease for tenant applicants. The rentable area measures
					 the tenant's pro rata portion of the entire office floor, including public
					 corridors, restrooms, janitor closets, utility closets and machine rooms used
					 in common with other tenants, but excluding elements of the building that
					 penetrate through the floor to areas below. The rentable area of a floor is
					 fixed for the life of a building and is not affected by changes in corridor
					 sizes or configuration.
"Letter of compliance" means the letter issued annually by
					 the Authority pursuant to N.J.A.C. 19:31H-1.14 that must accompany the use of
					 the tax credit certificate.
"Light rail station" means a location where passengers
					 board or alight River Line Light Rail, the Hudson-Bergen Light Rail, the Newark
					 Light Rail services, or any other light rail service owned and/or operated by
					 New Jersey Transit Corporation, Port Authority Transit Corporation or Port
					 Authority Trans-Hudson Corporation in the State of New Jersey. Light rail is a
					 transit mode with a lighter volume traffic capacity compared to commuter rail
					 service and characterized by lighter vehicles operating in one or two-car
					 trains on fixed rails, powered by electric or diesel, and not regulated by the
					 Federal Railroad Administration unless covered by a waiver for shared-use
					 operation of freight and light rail passenger service.
"Mixed use project" means a project comprising both a
					 qualified business facility and a qualified residential project, provided that
					 the residential project does not need to be the predominant part of the mixed
					 use project if it meets the criteria set forth in N.J.A.C.
					 19:31H-1.3(a)5.
"Net leasable area" means the usable area or actual
					 occupiable area of a building, a floor or an office suite. The amount of usable
					 area can vary over the life of a building as corridors expand and contract and
					 as floors are remodeled, and thus is not fixed for the life of a building as
					 would be the case with leasable area.
"New full-time position" means a position created by the
					 business at the qualified business facility that did not previously exist in
					 this State. New full-time position shall also include new full-time positions
					 that a business creates after receipt of approval pursuant to N.J.A.C. 19:31-97
					 that are transferred to the qualified business facility upon completion
					 thereof.
"Partnership" means an entity classified as a partnership
					 for Federal income tax purposes.
"Professional employer organization" means an employee
					 leasing company registered with the Department of Labor and Workforce
					 Development pursuant to
					 P.L.
					 2001, c. 260 (34:8-67
					 et seq.).
"Program" means the Urban Transit Hub Tax Credit Program
					 created pursuant to
					 P.L.
					 2007, c. 346 and
					 provided in this subchapter.
"Progress information" means the information that must be
					 submitted pursuant to N.J.A.C. 19:31H-1.8.
"Project" or "hub project" means employment by the business
					 of a minimum of 250 full-time employees at a facility that meets the capital
					 investment criteria of the Act in a qualified business facility located within
					 a designated urban transit hub in an eligible municipality.
"Qualified business facility" means any building, complex
					 of buildings or structural components of buildings, and all machinery and
					 equipment as defined under capital investment, located within a designated
					 urban transit hub in an eligible municipality, used in connection with the
					 operation of a business.
"Qualified residential project" means any building, complex
					 of buildings or structural components of buildings, consisting predominantly of
					 residential units, located in an urban transit hub within an eligible
					 municipality.
"Rail station" means a rail station, including light rail
					 stations, of the New Jersey Transit Corporation, Port Authority Transit
					 Corporation or Port Authority Trans-Hudson Corporation, but shall not include
					 any rail station located at an international airport, except that any property
					 located within a one-half mile radius surrounding the mid point of a New Jersey
					 Transit Corporation rail station platform area at an international airport upon
					 which a qualified business facility is constructed or renovated commencing
					 after the effective date of
					 P.L.
					 2011, c. 149 shall be
					 deemed an urban transit hub, excluding any property owned or controlled by the
					 Port Authority of New York and New Jersey.
"Residential developer" means a business that intends to
					 make or acquire capital investments in a qualified residential project pursuant
					 to sections 34 and
					 35 of
					 P.L.
					 2009, c. 90.
"Residential unit" means a residential dwelling unit such
					 as a rental apartment, a condominium or cooperative unit, a hotel room, or a
					 dormitory room.
"Site preparation" means the clearing, excavation, or
					 removal of existing buildings, structures, vegetation, or facilities, and the
					 site grading or other earth work, which is necessary for the construction of a
					 qualified business facility.
"Soft costs" means all costs associated with financing,
					 design, engineering, legal, real estate commissions, furniture, or office
					 equipment with a useful life of less than five years, provided they do not
					 exceed 20 percent of total capital investment.
"Tax accounting period" or "tax privilege period" or "tax
					 period" shall mean tax year for purposes of this chapter.
"Tenant" means a business that is a lessee or owner of a
					 condominium in a qualified business facility and does not include a lessee or
					 owner of a condominium in a qualified residential facility.
"Urban transit hub" means property located within a
					 one-half mile radius surrounding the mid point of a New Jersey Transit
					 Corporation, Port Authority Transit Corporation or Port Authority Trans-Hudson
					 Corporation rail station platform area, including all light rail stations;
					 property located within a one-mile radius of the mid point of the platform area
					 of such a rail station if the property is in a qualified municipality under the
					 Municipal Rehabilitation and Economic Recovery Act,
					 P.L.
					 2002, c. 43 (N.J.S.A.
					 52:27BBB-1 et seq.) or in an area that is the subject of a Choice Neighborhoods
					 Transformation Plan funded by the Federal Department of Housing and Urban
					 Development; the site of the campus of an acute care medical facility located
					 within a one-mile radius of the mid point of the platform area of such a rail
					 station; the site of a closed hospital located within a one-mile radius of the
					 mid point of the platform area of such a rail station; property located within
					 a one-half mile radius surrounding the mid point of one of up to two
					 underground light rail stations' platform areas that are most proximate to an
					 interstate rail station; and property adjacent to, or connected by rail spur
					 to, a freight rail line if, as part of its regular course of business, as
					 determined by the Authority, the business utilizes that freight rail line for
					 loading and unloading freight cars on trains delineated by the Authority
					 pursuant to subsection e. of
					 section
					 3 of
					 P.L.
					 2007, c. 346 (N.J.S.A.
					 34:1B-3e ). A property, which is partially included within the radius, shall
					 only be considered part of the hub if over 50 percent of its land area falls
					 within the radius. In the case of a rail station with multiple rail lines, a
					 separate midpoint shall be determined for each such rail line. Once the hubs
					 have been delineated, the Authority will post eligible rail stations and
					 corresponding midpoints on the website at
www.newjerseybusiness.gov
. The
					 posting will be updated if the eligible rail stations change and to reflect
					 changes in station midpoints.
"Urban transit hub tax credit" or "tax credit" means the
					 tax credit permitted under
					 P.L.
					 2007, c. 346, as
					 amended by P.L. 2009, c.
					 90 and this subchapter, which may be applied
					 against the tax liability otherwise due for corporation business tax or
					 insurance premiums tax pursuant to section 5 of P.L. 1945, c. 162 (54:10A-5 ),
					 pursuant to sections 2 and 3 of P.L. 1945, c. 132 (54:18A-2 and 54:18A-3 ),
					 pursuant to section 1 of P.L. 1950, c. 231 (17:32-15 ), or pursuant to
					 17B:23-5.
"Urban transit hub tax credit transferee" or "tax credit
					 transferee" means if the business transfers its tax credits by first obtaining
					 and then selling or assigning its tax credits as evidenced by a tax credit
					 transfer certificate, then the owner of the tax credits, including any
					 subsequent owners of the tax credits.