New Jersey Administrative Code › Title 19 - OTHER AGENCIES › NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY › Chapter 31X - EVERGREEN › Subchapter 1 - EVERGREEN › Section 19:31X-1.2 - Definitions

Current through Register Vol. 56, No. 14, July 15, 2024
The following words and terms, as used in this subchapter,
					 shall have the following meanings, unless the context clearly indicates
					 otherwise.
"Act" means the New Jersey Innovation Evergreen Act,
					 sections
					 20 through
					 34 of
					 P.L.
					 2020, c. 156, as
					 amended (N.J.S.A. 34:1B-288 through 34:1B-302).
"Affiliate" means an entity that directly or indirectly
					 controls, is under common control with, or is controlled by, another entity.
					 Control exists in all cases in which the entities are members of a controlled
					 group of corporations, as defined pursuant to section
					 1563 of the Internal Revenue Code
					 of 1986 (26 U.S.C. § 1563), or the entities are an organization in a group
					 of organizations under common control, as defined pursuant to subsection (c) of
					 section 414 of the Internal Revenue Code
					 of 1986 (26 U.S.C. § 414).
"Authority" means the New Jersey Economic Development
					 Authority established by section 4 at P.L. 1974, c. 80 (N.J.S.A.
					 34:1B-4).
"Director" means the Director of the Division of Taxation
					 in the Department of the Treasury.
"Evergreen special purpose vehicle" means an entity
					 controlled by or under common control with a qualified venture firm that is
					 formed solely by the qualified venture firm for the purpose of the fund
					 investing in a qualified business alongside the investment from the qualified
					 venture firm active fund.
"Evergreen special purpose vehicle manager" means the
					 managing member or general partner of an Evergreen special purpose
					 vehicle.
"Filling a position in New Jersey" means filling a position
					 with a full-time employee whose primary office is in New Jersey and who spends
					 at least 80 percent of their time in New Jersey, or any other period of time
					 generally accepted by custom or practice as full-time employment at a location,
					 as determined by the Authority.
"Follow-on investment" means a subsequent investment in a
					 qualified business made by the fund, through an Evergreen special purpose
					 vehicle, corresponding to the additional investment made by a qualified venture
					 firm that has a previous qualified investment in such qualified
					 business.
"Full-time employee" means a person who is in a position in
					 the United States that is employed by a qualified business on a permanent or
					 indefinite basis for consideration for at least 35 hours a week, or any other
					 standard of service generally accepted by custom or practice, as determined by
					 the Authority, as full-time employment, or who is a partner of a qualified
					 business who works for the partnership for at least 35 hours a week, or any
					 other standard of service generally accepted by custom or practice, as
					 determined by the Authority, as full-time employment. A "full-time employee"
					 shall not include any person who works as an independent contractor or on a
					 consulting basis for a qualified business; any person who works as an intern,
					 as a temporary employee, or in a temporary position; or any employee in a
					 position that is primarily engaged in final point-of-sale retail.
"Fund" means the New Jersey Innovation Evergreen Fund
					 established by section 23 at
					 P.L.
					 2020, c. 156
					 (N.J.S.A.
					 34:1B-291).
"High-growth business" means a business that is growing
					 significantly faster than the average growth rate of the economy or, in the
					 absence of historic data necessary to verify the business's past operations, is
					 a start-up business that is investing in developing a product or new business
					 model that will allow it to grow significantly faster than the average growth
					 rate of the economy within the next three to five years. The Authority shall
					 establish, and publish on its website, metrics for determining the growth rate
					 of the economy and the relative rate of growth of businesses, which may be
					 based on revenues, number of customers, or valuation and may take into
					 consideration the growth rate of the industry of the high-growth
					 business.
"Incentive area" means an area in this State designated
					 pursuant to the State Planning Act, P.L. 1985, c. 398 (N.J.S.A.
					 52:18A-196 et seq.), as Planning Area 1
					 (Metropolitan); or that has been designated as a qualified opportunity zone
					 pursuant to 26 U.S.C. § 1400Z-1.
"Innovation ecosystem" means funding, programs, and events
					 that support the establishment and expansion of high-growth business in
					 targeted industries. Examples of such funding, programs, and events include,
					 but are not limited to, mentoring programs for start-ups, meet-up or networking
					 events, funding for locating a business in a collaborative workspace, programs
					 that provide business services, and entrepreneurial education to
					 businesses.
"Intellectual property" means property protected by patent
					 pending, patent awaiting approval, approved patent, registered copyright, or
					 intellectual property licensed from a college or university in New Jersey. For
					 purposes of this definition, "licensed" means intellectual property used
					 pursuant to an agreement that states that it is granting an exclusive license
					 that authorizes the licensee to control aspects of the development of the
					 protected proprietary intellectual property.
"New Jersey S corporation" means the same as the term is
					 defined in section 12 at P.L. 1993, c. 173 (N.J.S.A.
					 54A:5-10).
"Opportunity zone" means a Federal population census tract
					 in this State that was eligible to be designated as a qualified opportunity
					 zone pursuant to 26 U.S.C. § 1400Z-1.
"Partnership" means an entity classified as a partnership
					 for Federal income tax purposes.
"Principal business operations" means at least 50 percent
					 of the business's full-time employees reside in the State, or at least 50
					 percent of the business's payroll for full-time employees is paid to
					 individuals living in this State. For purposes of this definition, payroll
					 shall mean wages.
"Program" means the New Jersey Innovation Evergreen Program
					 established by
					 section
					 22 of
					 P.L.
					 2020, c. 156
					 (N.J.S.A.
					 34:1B-290).
"Qualified business" means a high-growth business that, at
					 the time of the first qualified investment in the business, and throughout the
					 qualified business compliance period, is registered to do business in this
					 State with the Director of the Division of Revenue and Enterprise Services in
					 the Department of the Treasury; has its principal business operations located
					 in the State and intends to maintain its principal business operations in the
					 State after receiving a qualified investment under the program; is engaged in a
					 targeted industry; and employs fewer than 250 full-time employees at the time
					 of the qualified investment.
"Qualified business compliance period" means the period
					 starting with the qualified investment in a qualified business and ending on
					 the sale or other disposition of all shares of stock of the qualified business
					 from the Evergreen special purpose vehicle, including any distribution of the
					 shares to the Authority. If the distribution of the shares of stock from the
					 Evergreen special purpose vehicle to the Authority occurs in less than five
					 years after the qualified investment, the qualified business compliance period
					 shall be five years or such other shorter qualified business compliance period
					 determined by the Authority, which may be based on factors including, but not
					 limited to, the number of the qualified business full-time employees filling a
					 position in New Jersey.
"Qualified business side agreement" means the agreement
					 entered into by the Authority, the qualified venture firm, and the qualified
					 business relating to the qualified investment in the qualified business.
"Qualified investment" means the direct investment of money
					 by the Fund, through an Evergreen special purpose vehicle, corresponding with a
					 qualified venture firm's initial investment in a qualified business for the
					 purchase of shares of stock, which may include option or warrant rights, and
					 the right to make a follow-on investment at a later date, all of which is
					 matched by the initial investment by a qualified venture firm. The exercise of
					 the option or warrant, or the decision to make a follow-on investment, shall be
					 at the discretion of the Authority.
"Qualified venture firm" means a venture firm that is
					 certified by the Authority as a qualified venture firm pursuant to section 29
					 at P.L.
					 2020, c. 156
					 (N.J.S.A.
					 34:1B-297) and N.J.A.C. 19:31X-1.7.
"Qualified venture firm active fund" means the entity
					 managed by the qualified venture firm or an affiliate of the qualified venture
					 firm from which the qualified venture firm invests in a qualified business
					 alongside the qualified investment.
"Qualified venture firm agreement" means the agreement
					 entered into by the Authority and the qualified venture firm regarding the
					 participation of the qualified venture firm in the program.
"Qualified venture firm managing individual" means the
					 individual with the authority to execute and bind the qualified venture firm to
					 agreements.
"Reserves" means capital in the Fund that has been reserved
					 for the purposes set forth at N.J.A.C. 19:31X-1.3(e).
"Strategic commitment" means the commitment by the tax
					 credit purchaser to strengthen the State's innovation ecosystem, which may
					 include, but is not limited to, providing mentorship, networking, sales and
					 distribution pipeline access, and collaboration opportunities to qualified
					 businesses that receive qualified investments.
"Targeted industry" means any industry identified from time
					 to time by the Authority that shall initially include advanced transportation
					 and logistics, advanced manufacturing, aviation, autonomous vehicle and
					 zero-emission vehicle research or development, clean energy, life sciences,
					 hemp processing, information and high technology, finance and insurance,
					 professional services, film and digital media, non-final point of sale retail
					 food and beverage businesses, including food innovation, and other innovative
					 industries that disrupt current technologies or business models. A qualified
					 business shall be considered to be in a targeted industry if the business is
					 engaged primarily in a targeted industry. The Authority may consider whether a
					 qualified business is engaged primarily in another innovative industry that
					 disrupts current technologies or business models, by assessing factors
					 including, but not limited to, whether businesses in the industry are offering
					 products or services that significantly improve current market offerings on the
					 basis of price or other performance levels, whether the new industry creates
					 opportunities for new businesses to enter and redefine the supply chain or
					 value chain of an industry, or whether the industry utilizes new technology or
					 business processes that allow New Jersey-based businesses to collect a share of
					 revenues that were traditionally only available to companies in other
					 geographies.
"Tax credit bid" means the submission of the strategic
					 commitment, the tax credit purchase offer, and all other documents required
					 pursuant to N.J.A.C. 19:31X-1.4(e) for a bid for tax credit as part of the tax
					 credit auction.
"Tax credit purchase offer" means the specific cash dollar
					 amount offered by a potential tax credit purchaser to purchase a specific
					 amount of tax credits.
"Tax credit purchaser" means an entity registered to do
					 business with the Director of the Division of Revenue and Enterprise Services
					 in the Department of the Treasury, subject to tax liability pursuant to section
					 5 at P.L. 1945, c. 162 (N.J.S.A. 54:10A-5),
					 and that purchases an allocation of tax credits under the program.
"University spin-off business" means a business whose
					 primary function is to commercialize proprietary intellectual property
					 developed at a New Jersey-based college or university, or a business that was
					 created by a then-current faculty member or then currently enrolled student
					 utilizing the facilities and/or resources of such college or university. To be
					 a "university spin-off business," the business must have been formed less than
					 10 years prior to the date of the qualified investment application. Formation
					 shall be based on the earliest use of the intellectual property of a
					 predecessor entity, irrespective of the corporate structure, or tax status of
					 the business.
"Venture firm" means a partnership, corporation, trust, or
					 limited liability company that invests cash in a business during the early or
					 expansion stages of a business in exchange for an equity stake in the business
					 in which the investment is made. Venture firm may include a venture capital
					 fund, a family office fund, or a corporate investor fund, provided that a
					 professional manager administers the venture firm.