New JerseyA5378220th Legislature (2024-2025)HouseWALLET

Modifies provisions of Cultural Arts Incentives Program, New Jersey Aspire Program, and Grow New Jersey Program; eliminates Community-Anchored Development Program.*

Sponsored By: Al Abdelaziz (Democratic), Linda S. Carter (Democratic), Sumter, Shavonda E., Shirley K. Turner (Democratic), Benjie E. Wimberly (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

27 provisions identified: 10 benefits, 0 costs, 17 mixed.

Business credits shift toward technology and manufacturing

Beginning in fiscal year 2025, up to $500 million in Aspire and Emerge capacity supports projects awarded Next New Jersey credits. Beginning in fiscal year 2026, up to $500 million supports projects awarded Next New Jersey Manufacturing credits. Of the manufacturing amount, $100 million is reserved exclusively for eligible clean energy product makers. Both transfers exclude credits awarded for transformative projects.

Film businesses receive redirected tax credits

Unused Aspire and Emerge capacity supports film and digital media credits. Fiscal years 2023 and 2024 each have $250 million for studio partners and $250 million for film-lease production companies. Fiscal year 2025 has those same allocations plus $300 million for other eligible taxpayers. Unapproved studio-partner and film-lease amounts carry into the next fiscal year within the same category.

Arts projects get capped financing help

Cultural arts projects can receive credits covering up to 100% of eligible costs, capped at $75 million per project. Total cultural arts awards cannot exceed $1.2 billion over nine years. Beginning in fiscal year 2026, up to $500 million in Aspire and Emerge credit capacity is available for cultural arts awards. Transformative-project credits are excluded from that funding source. These credits support institutions and projects, not household tax bills.

Business tax credits face shared limits

The law caps combined awards across listed tax-credit programs at $11.5 billion over nine years. For the first six years, non-transformative Aspire and Emerge awards have a $1.1 billion annual cap: $715 million north and $385 million south. Unused regional amounts carry forward; after year three, half of prior unused credits can go anywhere statewide. After year six, all available credits can go anywhere statewide. The Economic Development Authority board can approve up to $200 million above an annual limit based on project demand, economic conditions, and other listed factors. Unused annual capacity can support the same program in later years, but approvals must stay within the overall cap and nine-year window.

Large redevelopment projects get capped credits

Transformative Aspire projects have a $2.5 billion allocation over nine years, no annual cap, and a $400 million per-project ceiling. Beginning in fiscal year 2024, the Authority can shift up to $500 million yearly from other Aspire and Emerge capacity. Already-awarded transformative credits are excluded from that source. Transfers require less than $1 billion remaining in the transformative allocation and an Authority board finding that a transfer is warranted. No more than 65% of transferred credits can go north or 35% south.

Businesses gain pandemic incentive timing relief

Businesses can elect in writing by December 31, 2025, to suspend incentive obligations for any combination of tax periods 2020–2024. They must sign the Authority's agreement amendment within its deadline, and their eligibility period extends by the suspension period. Annual reports missed because of suspension do not cause forfeiture or an uncertified tax period. Separately, the Authority can request later credit use in response to COVID-19's economic and fiscal impact. Holders can refuse; agreed deferrals must include written terms that protect holders from losses.

Cleanup projects gain development incentive access

Warehouses and fulfillment centers qualify as commercial Aspire projects when eligible costs include at least $10 million in environmental cleanup. A separate incentive-area expansion covers sites of at least 100 acres with at least $10 million in certified cleanup costs. A licensed site remediation professional must certify those costs. Some portion of that larger site must already lie within a qualifying incentive area.

Offshore wind projects get credit capacity

Up to $350 million in non-transformative Aspire and Emerge credits is available for qualifying offshore wind projects. This allocation applies during the first three years of the nine-year program period. Projects must qualify under the State's offshore wind tax-credit law.

State purchases turn arts credits into cash

Two purchase paths help cultural arts credit holders turn credits into cash. The Authority or State can buy credits offered by institutions at 90% of stated value before permitted present-value discounts. Separately, the Taxation Director must buy qualifying unused cultural arts credits at 85% of their amount. For that unused-credit path, the credit or transfer certificate must be at least one year old when the holder applies.

Business waiver payments fund downtown support

Businesses choosing the qualified-facility work-location waiver must pay the state economic development authority 5% of their covered tax credit. This applies to credits received for the 2022 tax period through March 31, 2024. The money funds small-business support and downtown or commercial-corridor activity in the facility's municipality. Financing can include loans, guarantees, equity investments, grants, or other aid. The authority's chief executive chooses the supported financing activities.

Business credits shift to housing auctions

After the previously allocated auction credits run out, $300 million shifts from Aspire and Emerge to the state housing agency. The agency uses these credits for competitive auctions, with proceeds supporting housing purposes authorized by the referenced law. Credits for transformative projects are excluded. Annual installments cannot exceed that law's cap. The shifted credits are exempt from New Jersey Economic Recovery Act of 2020 requirements and conditions.

Housing agency auctions redirected cleanup credits

The law redirects $200 million in brownfield redevelopment credits to the New Jersey Housing and Mortgage Finance Agency. The agency sells them through competitive auctions and uses proceeds for housing purposes authorized by the referenced 2025 law. These credits are exempt from New Jersey Economic Recovery Act of 2020 requirements and conditions. This shift does not establish a household payment or eligibility rule.

Project workers gain prevailing wage protections

Covered Aspire and Emerge construction and related work must pay at least the prevailing wage. Coverage includes qualifying site preparation within 24 months before or during the incentive period when ownership remains continuous. The landlord-owned-facility exception applies when the recipient leases less than 35% at contract time, including agreed future leases. Covered contractors and subcontractors must register with the Labor Department, and applicants must certify compliance under penalty of perjury. Developers who materially misrepresent compliance lose 35% of allowed credits and must pay affected workers back wages.

Wage floors for arts project workers

Construction and building services workers at cultural arts projects must receive at least the applicable prevailing wage during the eligibility period. Leasing more than 55% of one facility extends both wage requirements throughout that facility. Leasing more than 35% extends the construction wage requirement throughout the facility. These wage floors protect workers but can raise costs for employers and contractors.

Arts institutions can claim and sell credits

Arts institutions can start claiming credits after an occupancy permit for any project portion or another agreed completion event. Claims per tax period cannot exceed the total award divided by the eligibility period's years. Certificate holders can sell or assign at least $25,000 at a time for at least 85% of face value before permitted present-value discounts. Buyers can use credits in the issue period or next three tax periods and carry unused credits forward for five successive periods. Buyers cannot resell them; credits apply only to specified New Jersey taxes and remain subject to annual claim limits.

Arts projects combine credits but need equity

A project can use both cultural arts and Aspire tax credits. The cultural arts credit does not count as developer-contributed money when calculating the Aspire financing gap. Arts institutions generally need equity equal to at least 20% of project cost, or 10% in government-restricted municipalities. Government grants can count toward equity, but Economic Development Authority subsidies cannot.

Businesses ease commitments but lose credits

Businesses affected by COVID-19 were allowed to request incentive termination before December 31, 2024, starting with tax period 2020 or a later period ending by that date. A chief executive's certification had to describe the emergency's impact; termination forfeits that period's and all later credits, and the signed agreement cannot be amended. Businesses also had until before December 31, 2024, to request lower promised job counts starting in 2020. Reductions apply first to new jobs, then retained jobs; businesses must certify eligible positions and keep the program's minimum job count. The Authority recalculates credits for 2020 and remaining eligibility years, and the change cannot increase credits.

Businesses received temporary onsite work relief

After the COVID-19 public health emergency ended, businesses were allowed to elect a temporary onsite-work waiver before March 31, 2024. It waived the 60% facility-time requirement from July 1, 2022, through March 31, 2024. Each full-time employee still needed at least 10% onsite time during tax period 2023. That minimum also applied to the 2024 period through March 31 when a business included that period.

More arts applicants and partners qualify

For-profit public arts facilities qualify when they receive federal historic rehabilitation or New Jersey historic property tax credits. Eligibility also includes qualifying nonprofits honoring New Jersey veterans of foreign conflicts and developers with National Park Service partnerships. An institution's affiliate can help pay costs and meet site-control rules during construction and the credit eligibility period. Affiliates must control, share control with, or be controlled by the institution, but cannot receive the credit certificate. An institution can prove control through clear and convincing evidence that it controls at least all program compliance.

More towns qualify for redevelopment terms

More municipalities can qualify for Aspire's government-restricted designation through added population, county-seat, revitalization-score, and highway-location tests. The highway test involves the Interstate 280 and Garden State Parkway intersection and a revitalization score. Redevelopment projects in designated municipalities can count land costs up to 20% of eligible project costs. Fees for applying for or administering an Aspire grant do not count as project costs.

State buys studio credits with safeguards

For original applications approved on or after January 1, 2026, the State must buy qualifying film credits at 95% of value. Certificates must be at least one year old and held by, or originally issued to, a New Jersey studio partner. Purchase caps are $80 million in fiscal year 2026, $160 million in 2027, $240 million in 2028, and $200 million yearly afterward. Applications above a year's cap carry into the next year, subject to that year's cap. Payments require full school funding, required retirement contributions, and a surplus of at least 12% of General Fund and Property Tax Relief Fund appropriations.

State buys unused developer tax credits

The Taxation Director must buy qualifying unused Aspire credits for 85% of their amount. The credit or transfer certificate must be at least one year old when the holder applies. Applications after the eligibility period's sixth year raise the developer's required payment to 50% of returns above a reasonable and appropriate investment return.

Arts institutions must support benefit recipients

Qualifying cultural arts institutions must provide support and services to Work First New Jersey recipients during the eligibility period. Institutions can also meet this requirement through services provided on or after December 21, 2023. Facilities operated by the National Park Service are exempt. The law does not set a service value or direct payment amount.

Supportive housing nonprofits get project exemptions

Qualifying special-mission nonprofit projects are exempt from the net benefit test, affordable housing requirements, and market-study requirement. Projects must be in a government-restricted municipality or enhanced area and have an Authority-approved special mission. They can include no more than 100 units, all supportive housing for tenants needing special-needs or social services. They can also include up to 25,000 square feet of specified on-site social-service space, including licensed child care.

Emergency delays allow longer project deadlines

During a Governor-declared emergency, the Authority's chief executive can extend certification deadlines for the emergency's duration. Extensions address economic disruption and unforeseeable project delays beyond the business's control, without its fault or negligence. Businesses must use best efforts and due diligence to finish and submit certification, while continuing reasonable efforts to overcome delays. The Authority board can grant two additional six-month extensions on that basis.

Lower upfront funding for qualifying developers

Developers of qualifying Aspire redevelopment projects in government-restricted municipalities must contribute at least 10% of total project costs. That replaces the general 20% minimum for these projects. The lower minimum reduces the upfront capital developers must provide.

Arts credits require checks and reporting

The Authority ranks arts projects by score and can make partial awards when available credits cannot fully fund eligible projects. Before awards, it checks institutional standing or corrective-action agreements, contractor registration, non-debarment, and tax clearance. Agreements set a five- to 10-year eligibility period, completion targets, progress and financing reports, oversight, and nondiscrimination policies. Annual reports start in the award year; uncured defaults or missing both good standing and a corrective plan cause yearly forfeiture, and other failures can trigger credit reductions or recovery. The Authority can extend individual reporting deadlines and require completion evidence, such as accountant-certified costs or an occupancy permit, certified under penalty of perjury.

Sponsors & Cosponsors

Cosponsors

Angela V. McKnight
Democratic • Senate
Andrew Zwicker
Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 147 • No: 49

House vote • 6/30/2025

CONCUR IN SA

Yes: 63 • No: 16 • Other: 1

Senate vote • 6/30/2025

3RDG FINAL PASSAGE

Yes: 27 • No: 12

House vote • 5/22/2025