Two bills intended to strengthen the Urban Enterprise Zone (UEZ) are advancing in the New Jersey Assembly. One measure addresses urban enterprise zone sales tax revenues, while the other extends the UEZ designation in all qualifying municipalities for additional 10 years.
New Jersey’s Urban Enterprise (UEZ) Program, which dates back to 1983, aims to revitalize urban communities and stimulate growth by providing tax and other financial incentives to participating businesses. The program currently covers approximately 6,800 private companies in 32 UEZ zones in 37 New Jersey municipalities.
Extending Urban Enterprise Zone Designations
Under the existing law, the UEZ designation expires after 20 years, with one 16-year extension allowed. Next year, the designation will sunset in several municipalities. In response, Assembly Bill No. 2576 extends the designation of all previously designated UEZs for a one-time period of 10 years. The bill specifies that the 10-year extension of these UEZs be designated within 90 days of the date of expiration of their previous designation as UEZs.
Urban Enterprise Zone Fund Allocation
Another bill pending in the Assembly, No. 1996, dedicates 30 percent of all UEZ sales tax revenues to the respective Enterprise Zone Assistance Fund and 70 percent of UEZ sales tax revenues to the state’s General Fund. Accordingly, the bill removes the UEZ tax revenue deposit and appropriation allocation schedules for the assistance fund, including the requirement that the Urban Enterprise Zone Authority receive up to one-third of those revenues for the coordination and administration of the UEZ program throughout the State.
The legislation also removes the ability of the authority to consider a proposal by a municipality having a UEZ to fund the cost of an increase in “eligible municipal services” from the assistance fund account in the name of the municipality having a UEZ. Under the bill, UEZs would receive from their assistance fund account the authority-approved amount for a project and the municipal-certified amount for eligible municipal services in the UEZ.
The Assembly Commerce and Economic Development Committee recently advanced both bills. We will be closely tracking the status of the legislation and will provide updates as they become available.
For more information about the proposed UEZ bills or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.