NJBIA is urging the Legislature to finalize a bill as part of the current budget negotiations that would make tax incentives available to eligible New Jersey manufacturers to encourage investment in the state, create new jobs and position New Jersey as a leader in the manufacturing economy.
Bill A-5687 (Greenwald, D-6; McClellan, R-1; Reynolds-Jackson, D-15) and its Senate counterpart S-4407 (Testa, R-1; Greenstein, D-14) establishes the “Next New Jersey Manufacturing Program” which would use $500 million from the existing Aspire and Emerge tax credit to incentivize in-state manufacturing programs and job creation.
The program would be administered by the New Jersey Economic Development Authority.
S-4407 is scheduled for a vote in Thursday’s Senate Budget and Appropriations Committee.
“This legislation is monumental for manufacturing and the overall business climate in New Jersey,” said NJBIA Chief Government Affairs Officer Christopher Emigholz.
“By itself, the bill would galvanize our ‘Trenton Makes, the World Takes’ mantra. But coupled with federal uncertainty regarding some manufacturing programs that companies rely upon, this legislation really is a no-brainer.
“It requires no new additional funding, and enjoys bipartisan support from the Legislature’s Manufacturing Caucus,” Emigholz added. “We need to get this done.”
The proposed program would incentivize a wide range of manufacturing activities benefitting various industries, including advanced manufacturing; non-retail food and beverage; life sciences; defense; and the production of components for clean energy technologies, such as offshore wind, solar, geothermal, green hydrogen, nuclear energy, fuel cells, battery storage, and other sustainable clean energy solutions.
Under the bill, $100 million of the $500 million in tax credits would be exclusively reserved for clean energy product manufacturers during the first two years of the program.
However, if the NJEDA awards less than $100 million in tax credits reserved for clean energy product manufacturers during that two-year period, the uncommitted portion could be awarded to any other eligible manufacturer in the third year of the program.
“Let’s be clear – this is not an ‘offshore wind bill’ and anyone who suggests so clearly hasn’t read it,” Emigholz said.
“The clean energy portion only accounts for 20% of the program and the definition of clean energy under the bill includes nuclear, which by all accounts will be increasing in New Jersey,” Emigholz said.
“This bill is a positive for New Jersey manufacturing, even if you’re not a supporter of wind projects here. If a New Jersey manufacturer is creating parts or mechanisms for wind projects anywhere else in the world, our state is the beneficiary of the jobs and revenue created.”
To qualify for tax credits under the program, an eligible business would be required to:
- make, acquire, or lease not less than $10 million in capital investments at a qualified business facility in New Jersey;
- create at least 20 new full-time jobs in New Jersey;
- provide a median salary for the full-time jobs at the qualified business facility of not less than 120% of the median salary for manufacturing employees in the county in which the project is located.
Under the bill, the amount of the tax credit would equal to the lesser of 0.1% of the eligible business’s total capital investment, multiplied by the number of new full-time jobs; or 25% of the eligible business’s total capital investment; or $150 million. However, the bill also authorizes the NJEDA, in its discretion, to establish one or more bonus credit awards.
