Donald M. Pepe
Partner
732-568-8370 dpepe@sh-law.comAuthor: Donald M. Pepe|September 17, 2021
New Jersey is relaunching its Urban Enterprise Zone (UEZ) Program, which aims to stimulate economic growth by providing tax and other financial incentives to participating businesses. For New Jersey developers, the program can provide a number of key benefits.
Under legislation recently signed into law by Acting Governor Sheila Oliver, the UEZ Program will be fully operational for the first time in more than ten years, with $42.5 million in Zone Assistance Funds (ZAF) for FY22. “The UEZ Program helps support the local economy, particularly in our urban centers,” Oliver said in a press statement. “I am excited to sign this legislation today restoring UEZ funding, especially as many of these cities and businesses located in the designated communities continue to recover from the pandemic. Starting today, the UEZ Program will be an essential part of the state’s economic recovery strategy.”
New Jersey’s UEZ Program dates back to 1983. Currently, there are 32 zones, which are spread across 37 municipalities and home to approximately 7,267 UEZ-certified businesses. The first five municipalities joined the program in 1986, with the most recent joining in 2002.
As discussed in prior articles, UEZ designations expired in Bridgeton, Camden, Newark, Plainfield, and Trenton at the end of 2016. Under the state’s prior UEZ statute, the designations expired after 20 years and allowed for just one 16-year extension. In 2018, Gov. Phil Murphy signed legislation reinstating expired UEZs and extending them until December 31, 2023. It also extended, until December 31, 2023, the duration of each UEZ that was scheduled to expire prior to that date.
The legislation also directed the New Jersey Department of Community Affairs (DCA) to study the UEZ Program and submit recommendations as to whether the program should be continued as is, be amended, or expire. The resulting 2019 New Jersey Urban Enterprise Zone Program Assessment, prepared by the John S. Watson Institute for Public Policy, PEL Analytics, and Anderson Economic Group, measured the net economic impact of the UEZ Program by analyzing employment counts, payroll expenditures, and gross receipts for participating and non-participating businesses located in UEZs across the state. The analysis of the qualitative and quantitative data compiled determined that the UEZ program is a valuable tool in New Jersey’s economic toolbox and should remain available to designated municipalities.
The Urban Enterprise Zone (UEZ) Reform Bill (A5580/S3600) signed into law by Acting Governor Oliver on August 16, 2021, implements additional reforms to the UEZ Program. Among other changes, the new law:
Under the new law, the UEZ Authority Board at DCA will assume following responsibilities:
The Urban Enterprise Zone (UEZ) Reform law is good news for New Jersey municipalities and businesses that rely on UEZ programs. It also helps ensure that additional businesses will be able to take advantage of its incentives going forward.
If you have any questions or if you would like to discuss the matter further, please contact me, Don Pepe, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
Partner
732-568-8370 dpepe@sh-law.comNew Jersey is relaunching its Urban Enterprise Zone (UEZ) Program, which aims to stimulate economic growth by providing tax and other financial incentives to participating businesses. For New Jersey developers, the program can provide a number of key benefits.
Under legislation recently signed into law by Acting Governor Sheila Oliver, the UEZ Program will be fully operational for the first time in more than ten years, with $42.5 million in Zone Assistance Funds (ZAF) for FY22. “The UEZ Program helps support the local economy, particularly in our urban centers,” Oliver said in a press statement. “I am excited to sign this legislation today restoring UEZ funding, especially as many of these cities and businesses located in the designated communities continue to recover from the pandemic. Starting today, the UEZ Program will be an essential part of the state’s economic recovery strategy.”
New Jersey’s UEZ Program dates back to 1983. Currently, there are 32 zones, which are spread across 37 municipalities and home to approximately 7,267 UEZ-certified businesses. The first five municipalities joined the program in 1986, with the most recent joining in 2002.
As discussed in prior articles, UEZ designations expired in Bridgeton, Camden, Newark, Plainfield, and Trenton at the end of 2016. Under the state’s prior UEZ statute, the designations expired after 20 years and allowed for just one 16-year extension. In 2018, Gov. Phil Murphy signed legislation reinstating expired UEZs and extending them until December 31, 2023. It also extended, until December 31, 2023, the duration of each UEZ that was scheduled to expire prior to that date.
The legislation also directed the New Jersey Department of Community Affairs (DCA) to study the UEZ Program and submit recommendations as to whether the program should be continued as is, be amended, or expire. The resulting 2019 New Jersey Urban Enterprise Zone Program Assessment, prepared by the John S. Watson Institute for Public Policy, PEL Analytics, and Anderson Economic Group, measured the net economic impact of the UEZ Program by analyzing employment counts, payroll expenditures, and gross receipts for participating and non-participating businesses located in UEZs across the state. The analysis of the qualitative and quantitative data compiled determined that the UEZ program is a valuable tool in New Jersey’s economic toolbox and should remain available to designated municipalities.
The Urban Enterprise Zone (UEZ) Reform Bill (A5580/S3600) signed into law by Acting Governor Oliver on August 16, 2021, implements additional reforms to the UEZ Program. Among other changes, the new law:
Under the new law, the UEZ Authority Board at DCA will assume following responsibilities:
The Urban Enterprise Zone (UEZ) Reform law is good news for New Jersey municipalities and businesses that rely on UEZ programs. It also helps ensure that additional businesses will be able to take advantage of its incentives going forward.
If you have any questions or if you would like to discuss the matter further, please contact me, Don Pepe, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
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