Business Law: Recognizing the current economic condition of the Country generally, and the State of New Jersey in particular, the New Jersey Legislature passed, and the Governor signed into law, in December, legislation aimed at encouraging people and companies to invest in New Jersey businesses. The InvestNJ Business Grant Program Act (the “Act”) provides a grant to eligible businesses that make capital investments in the State. The grant is calculated as seven percent (7%) of the capital investment made, but may not exceed $1 million to any one grantee. Moreover, the sum of all of the capital investment grants given by the state are not to exceed $70 million.
For purposes of the Act, a capital investment is an expense of at least $5,000 incurred for “the direct use and operation of a business for (1) the site preparation and construction, renovation, improvement, equipping of, or obtaining and installing fixtures and machinery, apparatus or equipment in, a newly constructed, renovated or improved building, structure, facility, or improvement to real property; and (2) obtaining and installing fixtures and machinery, apparatus or equipment in a building, structure or facility.” To be eligible to receive the InvestNJ grant, the grantee must be a business that (a) operated for at least two years before the grant application was submitted; and (b) employed at least five full-time employees. Moreover, the grant needs to have been made between the effective date of the Act, December 9, 2008 and January 1, 2011.
To receive the grant, the business must submit an application, in the form provided by the CEO of the New Jersey Economic Development Authority before January 1, 2011. Another feature of the Act provides incentives to New Jersey businesses to add employment opportunities within the State. Specifically, the Act provides for the provision of a grant to businesses that (a) operate continuously in New Jersey for at least two years prior to filing the application; (b) employ at least five full-time employees; (c) add a position created in New Jersey after December 1, 2008 and before January 1, 2011 for a period of at least one year; and (d) had a “net increase” in employment of eligible positions within that time period. For purposes of this provision, an “eligible position” is defined by the Act as a full time position where the individual’s payment is subject to New Jersey tax withholding, and for which the business provides employee health benefits under its group plan. The law specifically excludes positions for consultants or independent contractors. Again, a business looking to receive a grant for its new hiring, in accordance with this Act, needs to submit an application by January 1, 2011. The grant to be provided is $3,000.00 for each eligible position, but one business may not receive more than $500,000.00 in grants for creating new eligible positions. Moreover, the total amount of grants issued for the creation of new positions is not to exceed $50 million.
Business owners, entities looking to establish businesses in New Jersey, and potential buyers and sellers of New Jersey businesses should all be aware of the financial incentives being offered by the State for investing in New Jersey businesses.
© 2009 Nissenbaum Law Group, LLC