Gopal Supports Extension of Urban Enterprise Zone Program

04/11/18 | News

Senator Vin Gopal offers his full support of a bill (S846) seeking to extend the designation of all previously designated Urban Enterprise Zones (UEZ), including Asbury Park and Long Branch.

The bill, which was approved by both the Senate and Assembly on Thursday, April 5, would extend the designation of UEZs for a one-time period of 10 years, allowing participating cities continue their involvement in the program.

“The Urban Enterprise Zone has helped attract new businesses to Asbury Park, allowing this iconic Monmouth County community revitalize its ever-growing business district. Today, Asbury Park is a destination community with a wide variety of successful restaurants, shops, boutique hotels and other local businesses. It is impossible to discuss the growth of Asbury Park without acknowledging the key role its designation as an Urban Enterprise Zone has played,” Senator Gopal said.

“Long Branch has built up momentum and it would be a shame to stop it now. We must continue to foster our small business community and give communities like Long Branch every advantage necessary in revitalizing its business community.

“I want to see Asbury Park and Long Branch continue to grow and thrive. Extending the Urban Enterprise Zone Program an additional 10 years will allow these communities to continue to attract new local businesses, employ more residents and serve more consumers.

“I am amazed by the transformation of this great community and I can’t wait to see what the future has in store for Asbury Park. With the extension of the Urban Enterprise Zone Program, we can help ensure that future is bright.”

“I am proud to support our local businesses. As a small business owner myself, I understand what these business owners are up against. I will do everything I can to make sure our business community in Long Branch, Asbury Park and throughout Monmouth County continues to evolve.”​

During the extension in these UEZs, qualified businesses that participate in the program would continue to be eligible for certain UEZ incentives and benefits currently available through the program, including the corporation business tax employees tax credit and the investment tax credit, the sales and use tax exemption for qualified business purchases, and the sales and use tax exemption for energy and utility services, and, if certified, would continue to be permitted to collect the sales and use tax on retail sales made from a place of business located in the zone at one-half the Statewide sales and use tax rate. After a 10 percent dedication of the reduced-rate sales and use tax revenue to the authority, the remaining 90 percent would be deposited into the General Fund.

The bill would also require the authority to review and analyze the UEZ program and produce a report on the findings and recommendations to the Governor and the Legislature no later than the date that the Governor delivers the budget message for fiscal year 2020 to the Legislature. The report would examine the UEZ program in its entirety, but would be required to specifically address the following:

  • The appropriateness of the criteria evaluated when designating an enterprise zone or UEZ-impacted business district;
  • Any additional criteria that should be considered when making or reviewing an enterprise zone designation;
  • Whether the designation of a new, or the de-designation of an existing, enterprise zone or UEZ-impacted business district furthers the goals of the New Jersey Urban Enterprise Zones Act, and if so, the municipalities, zones, or districts that should be designated or de-designated;
  • Impediments to obtaining an enterprise zone or UEZ-impacted business district designation, or to de-designating an existing enterprise zone or district;
  • The economic, employment, and demographic effects attributable to the expiration of the first five enterprise zones;
  • Business participation rates; and
  • Whether an alternative, location-based program to assist fiscally distressed municipalities is appropriate, and if so, the parameters of such a program that would provide a sufficient return on State investment.

The bill has passed the Senate and is now up for consideration by the Assembly.

The “New Jersey Urban Enterprise Zones Act” established the New Jersey Urban Enterprise Zone Authority in the Department of Community Affairs (DCA) and authorized the authority to designate zones in qualifying municipalities. Currently, there are 27 active zones in 32 municipalities. Enterprise zones were designated by the authority based on factors including high unemployment, low investment in new capital, blighted conditions, obsolete or abandoned industrial or commercial structures, and deteriorating tax bases.

New Jersey’s Urban Enterprise Zone Program provides incentives to encourage businesses to locate to urban enterprise zones and create private sector jobs by providing public and private investment to foster an economic climate that will revitalize designated communities. Business incentives are provided to qualified zone businesses through employment and investment income tax credits, reduced sales tax collections on certain retail sales, and sales tax exemptions on qualified business purchases.

Under the original UEZ act, enterprise zones were limited to one non-renewable term of 20 years. In 2001, the UEZ act was amended to replace the final five-year period for the 27 zones designated prior to 2001 with a one-time 16-year extension period, if the municipality met certain unemployment criteria in existence at the time the municipality applies for an extension. This amendment therefore created a 31-year designation for each of the applicable zones. Currently, the five zones designated after 2001 are only permitted a single 20-year term. The program in its entirety is currently scheduled to end in 2027.