New Jersey Administrative Code › Title 19 - OTHER AGENCIES › NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY › Chapter 31U - EMERGE › Subchapter 1 - EMERGE › Section 19:31U-1.14 - Reduction and forfeiture of tax credits

Current through Register Vol. 56, No. 14, July 15, 2024
(a) If, in any tax period, an eligible
				  business reduces the total number of full-time employees in its Statewide
				  workforce by more than 20 percent from the number of full-time employees in its
				  Statewide workforce in the last tax period prior to the credit amount approval
				  under the program, then the eligible business shall forfeit its credit amount
				  for that tax period and each subsequent tax period, until the first tax period
				  for which documentation demonstrating the restoration of the eligible
				  business's Statewide workforce to the threshold levels required by this
				  subsection has been reviewed and approved by the Authority, for which tax
				  period and each subsequent tax period the full amount of the credit shall be
				  allowed.
(b) Except for a small
				  business, if the annual report filed by an eligible business pursuant to
				  section 77 at
				  P.L.
				  2020, c. 156, and
				  N.J.A.C. 19:31U-1.10(a) provides that the number of new full-time employees
				  employed by the eligible business subject to the project agreement or the
				  salaries of the new full-time employees, as measured by the median salary, was
				  reduced by more than 10 percent of the number of new full-time employees, or
				  salaries thereof, in the annual report of the prior year, or the project
				  agreement if the annual report is the first such report filed, then the
				  Authority may reevaluate the net positive economic benefit of the project and
				  reduce the size of the award accordingly. This reduction shall not affect any
				  recapture pursuant to (f) below.
(c) If, in any tax period, the amount of
				  withholdings paid to New Jersey or full-time employees employed by the eligible
				  business subject to the project agreement or the salaries thereof, drops below
				  80 percent of the withholdings and number of new and retained full-time jobs,
				  and the salaries thereof, specified in the project agreement or the project
				  phase agreement, then the eligible business shall forfeit its tax credit amount
				  for that tax period and each subsequent tax period, until the first tax period
				  for which documentation demonstrating the restoration of the amount of
				  withholdings paid to New Jersey or number of full-time employees employed by
				  the eligible business subject to the project agreement to 80 percent of the
				  withholdings and number of jobs specified in the project agreement or project
				  phase agreement or the restoration of 80 percent of the salaries specified in
				  the project agreement is reviewed and approved by the Authority.
(d) If the business is not in compliance with
				  the community benefits agreement pursuant to N.J.A.C. 19:31U-1.9(c), the
				  Authority shall reduce the size of the award by the amount equal to 120 percent
				  of the monetary value of the contribution or contributions for which the
				  business in not in compliance. This reduction shall not affect any recapture
				  pursuant to (f) below.
(e) If at
				  any time during the eligibility period, the Authority determines that the
				  eligible business made a material misrepresentation on the eligible business's
				  application, the eligible business shall forfeit all tax credits awarded under
				  the program, which shall be in addition to any other remedies in the commitment
				  agreement and any criminal or civil penalties to which the business and the
				  officer may be subject.
(f) The
				  Authority may recapture all, or part of, a tax credit awarded if an eligible
				  business does not remain in compliance with the requirements of a project
				  agreement for the duration of the commitment period. A recapture pursuant to
				  this subsection may include interest on the recapture amount, at a rate equal
				  to the statutory rate for corporate business or insurance premiums 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. Failure of the
				  eligible business to meet any program criteria shall constitute a default and
				  shall result in the recapture of all or part of the tax credit
				  awarded.
(g) With the exception of
				  N.J.A.C. 19:31U-1.12(d), if all or part of a tax credit sold or assigned
				  pursuant to section 78 at
				  P.L.
				  2020, c. 156, and
				  N.J.A.C. 19:31U-1.12 is subject to recapture, then the Authority shall pursue
				  recapture from the eligible business and not from the purchaser or assignee of
				  the tax credit transfer certificate.
(h) Any funds, net of costs incurred by the
				  Authority, recaptured pursuant to this section, including penalties and
				  interest, shall be deposited into the General Fund of the State.