Gibbons Law Alert

Gibbons Law Alert

Author: Michael D. DeLoreto

Governor Christie Presents the FY 2018 Budget

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Posted in State Legislative and Budget Matters

On March 3, 2017

Earlier this week, Governor Christie announced his final State Budget to a joint session of the Legislature. The Governor’s Fiscal Year 2018 budget of $35.5 billion represents a 2.6 percent increase from the prior year. It assumes annual growth in the State’s major tax revenues (gross income tax, sales tax, and corporate business tax) and also reallocates funding between programs. The highlights of the FY 2018 Budget include: $17.4 billion in school and local aid, representing almost half of all State spending; A $2.5 billion contribution to the State pension system, with payments occurring quarterly; Cuts to most Executive Departments including Agriculture, Community Affairs, Corrections, Environmental Protection, Labor, Law and Public Safety, Military and Veterans Affairs, Transportation, and Treasury; Funding increases to the Departments of Health and Human Services for the expansion of FamilyCare, opioid addiction treatment, and graduate medical education; $20 million appropriation for lead remediation assistance for low and moderate income households; Additional State health benefit reforms, saving the State $125 million in FY 2018; and A lump-sum contribution from the State Lottery system to the State’s pension system to reduce the existing unfunded liability. Governor Christie also proposed a supplemental appropriation in the current fiscal year of $400 million for the State’s transportation system, to be allocated within the next 100 days....

What You Need to Know About Federal Regulatory Reform

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Posted in Regulatory Counseling and Departmental Action

On February 17, 2017

President Trump and the newly-elected Congress have made regulatory reform a main focus of their policy agenda. With Republicans controlling both the White House and Capitol Hill for the first time in over a decade, significant actions were taken within the first several weeks of coming into power that regulated industries should be aware of. Implementation of a Regulatory Freeze – The Trump Administration froze all federal rulemaking by issuing a policy memorandum to the Executive Branch departments and agencies. The memorandum declared that no regulations should be submitted “until a department or agency head appointed or designated by the President … reviews and approves the regulation.” The memorandum also required the Executive Branch agencies to either withdraw or postpone all agency regulations submitted to the Office of the Federal Register. The only exceptions to the regulatory freeze are for “emergency situations or other urgent circumstances relating to health, safety, financial, or national security matters” or “regulations subject to statutory or judicial deadlines.” Reducing Regulations for Domestic Manufacturing – President Trump directed the Executive Branch departments and agencies to support the expansion of manufacturing in the United States through “expedited reviews of and approvals for proposals to construct or expand manufacturing facilities and through reductions in regulatory burdens affecting domestic manufacturing.” A key component of...

Governor Christie Delivers 2017 State of the State Address

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Posted in State Legislative and Budget Matters

On January 11, 2017

On January 10, 2017, Governor Chris Christie delivered his State of the State address to a joint session of the New Jersey Legislature. The Governor concentrated his remarks on his accomplishments over the past seven years, and his goals for the final year of his Administration. The Governor noted that during his tenure, the State saw seven consecutive years of job creation, decreasing the unemployment rate from 9.8% to 5.0%. The collective size of State, county, and local government was reduced by 31,000 employees and Discretionary State spending is $2.3 billion less today than it was nine years ago. The State contributed $6.3 billion to the State pension system since the Governor took office, double the amount that has been contributed over the past sixteen years. Governor Christie also stated that 2017 will be the first year since 1996 that New Jersey residents will see broad-based tax cuts, including a reduction in the sales tax, the phase-out of the estate tax, increases in retirement income tax exclusions, and increases in the earned income tax credit.

New Jersey’s Legislature Attempts to Override Governor’s Objections to “Equal Pay” Bill

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Posted in Discrimination / Regulatory Counseling and Departmental Action

On December 16, 2016

The sponsors of pay equity legislation passed by the New Jersey Senate and Assembly earlier this year have announced that the State Senate will attempt to override Governor Christie’s veto of the bill on December 19, 2016. Senate Bill 992/Assembly Bill 2750 would amend the Law Against Discrimination (“LAD”) to promote gender pay equality. The New Jersey bill follows a trend of recently enacted state laws, in California, New York, Maryland, and Massachusetts, that aim to make it easier for plaintiffs to bring pay equity claims and subject employers to potentially greater damages.

Equity Crowdfunding Turns Six Months Old: Looking at Title III for Investors and Businesses

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Posted in Regulatory Counseling and Departmental Action

On December 5, 2016

November 16, 2016 marked the six-month anniversary of Title III of the JOBS Act of 2012 being fully implemented. Title III and the rules promulgated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) allow businesses to raise capital through “equity crowdfunding.” This is the act of raising capital from others via the internet, by seeking small investments from a large number of potential investors through the use of licensed broker-dealers or internet funding portals. These investments are exempt from the traditional security registration requirements. People are generally familiar with existing “crowdfunding” platforms such as Kickstarter, Indiegogo, and GoFundMe which have been in existence since at least 2008. These platforms practice rewards-based crowdfunding.  Backers give a “campaign” money, and the backer gets back a “reward,” i.e., a thank you note or the first edition of a product. Title III, however, allows for “equity crowdfunding,” which is the ability to buy ownership in an early-stage company and hopefully reap a monetary return on that investment. Instead of getting that thank you note or new product, the investor is getting a piece of equity in the company he or she just invested in. Many industry professionals and commentators expected “equity crowdfunding” to be a “slow burn” due to regulatory hurdles, a lack...

Are New Jersey’s Business Loan, Incentive, and Grant Programs Right for You?

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Posted in Business Incentives / Economic Development

On October 26, 2016

Ronald Reagan famously said that the nine most terrifying words in the English language are, “I’m from the government and I’m here to help.” But for businesses starting up, expanding, or relocating into New Jersey, state government can be helpful, if you know where to start. We regularly counsel clients on government incentives, loans, and business assistance offered through the nationally-recognized New Jersey Economic Development Authority (NJEDA) and other State agencies. The NJEDA’s programs assist businesses of all sizes access loans/loan guarantees, as well as business and tax incentives. A few of the many programs offered are listed below. Loan Programs The NJEDA offers several loan programs that support small and mid-sized companies acquiring fixed assets, obtaining working capital, and refinancing debt: The Premier Lender Program provides loan and line of credit participations/guarantees in varying amounts. The NJEDA has a group of preferred lenders, and rates are generally at or below traditional loans. In return for the NJEDA’s assistance, the business has to agree to add one new full-time employee for every $65,000 of NJEDA exposure. The Small Business Fund provides up to $500,000 for small businesses, minority or woman owned businesses, and nonprofits that have been in business for at least one to three years. The Direct Loan Program provides up to $2 million...

Innovation Brewing in the New Jersey Legislature

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Posted in Economic Development

On August 18, 2016

Every summer, New Jersey legislators travel to the annual conferences of the National Conference of State Legislators (“NCSL”), the Council of State Governments (“CSG”), and the American Legislative Exchange Council (“ALEC”) to educate themselves about policy innovations occurring throughout the United States. While we wait to learn about their experiences, right now is a good opportunity to focus on innovative legislation currently before the New Jersey Legislature. As of August 15, 2016, 7,068 bills have been introduced in the New Jersey Legislature, 4,379 in the Assembly and 2,689 in the Senate, and only 87 have been signed into law. The following list of bills currently in committee represent examples by legislators looking to encourage innovation in New Jersey: S158 (Madden)/A3631 (Quijano) would promote investment in New Jersey by broadening the types of New Jersey emerging technology businesses that are eligible to receive investments under the New Jersey Angel Investor Tax Credit Act; A3187 (Munoz)/ S948 (Singer) would create a program within the New Jersey Economic Development Authority that would create a pathway to the commercial market for technology developed at a New Jersey college or university. Under this legislation, New Jersey would stimulate the economy while recapturing the state’s investment in higher education; and S348 (Kean) would utilize funds from the Workforce Development Partnership Fund,...

Governor Christie Acts on BEIP Conversion Tax Credit Payment Changes

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Posted in Business Incentives

On July 1, 2016

On June 30, 2016, Governor Christie signed to law Senate Bill 2376/Assembly Bill 4002, which modifies the tax credit payment schedule for Business Employment Incentive Program (“BEIP”) Grant recipients converting their cash grants to tax credits. The Legislature and Governor enacted a law in January allowing businesses to convert outstanding BEIP Grants into tax credits. The law provided that BEIP Grants accrued but not paid during years 2008-2013 were to be redeemable as tax credits over a five-year period starting in the 2017 tax accounting or privilege period of the business. S-2376/A-4002 revises the tax payment credit schedule so that only 5 percent of the tax credit is redeemable in 2017. Twenty percent would be redeemable in 2018, with 25 percent redeemable in years 2019, 2020, and 2021. The change was required due to the projected budgetary shortfall in Fiscal Year 2017, which the State Treasurer announced on May 18, 2016. If your business is still considering a BEIP conversion, the deadline to opt-in is the close of business on July 11, 2016. Gibbons can assist your company with the process of evaluating and implementing a conversion.

BEIP Conversion Update: State Treasurer Recommends Amending Law

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Posted in Business Incentives

On May 23, 2016

With projected revenues for State Fiscal Year (“SFY”) 2017 decreasing, on May 18, 2016, the NJ State Treasurer recommended that the Legislature amend the Business Employment Incentive Program (“BEIP”) conversion law (P.L.2015, c.194) to reduce the percentage of BEIP tax credits redeemable in SFY 2017 from thirty (30) percent to five (5) percent. In testimony before the Assembly and Senate Budget Committees, the Treasurer stated that any legislation implementing his recommendation should not change (1) the conversion election deadline of July 11, 2016; (2) the total number of years for the tax credits to be issued; or (3) the overall amounts convertible to tax credits. The only change sought by the Treasurer’s Office is to shift a greater percentage of BEIP tax credit redemptions to SFY 2018 through SFY 2021. If your business is a BEIP Grant recipient and you have questions regarding the BEIP conversion process, please contact a member of the Gibbons Government & Regulatory Affairs Department. We will continue to monitor the BEIP conversion program and any action to amend the existing law.

Update: Waterfront Access Stakeholder Group Reports to Senate Committee

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Posted in Environmental and Green Issues

On May 20, 2016

As previously reported, the New Jersey State Senate Environment and Energy Committee convened a stakeholder group to explore legislative action to address waterfront and shoreline public access. On April 21, 2016, the Committee took testimony from the stakeholder group, which will provide a full report to the Committee in a few weeks. Legislation based on the stakeholder’s report may be up for consideration in the fall. The stakeholder group received comments and participation from roughly 80 different entities. The stakeholder group members testified that a general consensus existed between all stakeholders regarding the need to protect critical infrastructure and hazardous sites from public access. This includes the State’s ports, nuclear facilities, chemical and petroleum locations, and environmentally compromised areas (i.e., locations subject to environmental cleanup). Consensus did not exist among the stakeholder group regarding access to waterfront property on or near industrial or commercial locations that are non-critical. There is also a lack of consensus regarding urban waterfront access near residential and commercial buildings. We will continue to monitor the Committee’s work towards drafting a legislative proposal on waterfront access. Should you or your organization have an interest in engaging on this issue, please contact a member of the Gibbons Government & Regulatory Affairs Department.

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