New Jersey § 34:1b-328

§ 34:1b-328.

a. (1) Following approval and selection of an application pursuant to sections 58

and 59 of P.L.2020, c. 156 ( C.34:1B-326 and C.34:1B-327 ), the authority shall enter into an incentive award agreement with the developer.

The chief executive officer of the authority shall negotiate the terms and conditions

of the incentive award agreement on behalf of the State. (2) For a phased project, the incentive phase agreement shall set forth, for each

phase of the project and for the total project, the capital investment requirements

and the time periods in which each phase of the project shall be commenced and completed.

The awarding of tax credits shall be conditioned on the developer's compliance with

the requirements of the agreement. A redevelopment project may be completed in phases in accordance with rules adopted

by the authority if the redevelopment project has a total project cost in excess of

$50,000,000. b. An incentive award agreement shall specify the amount of the incentive award the

authority shall award to the developer and the duration of the eligibility period . The duration of the eligibility period shall not exceed 15 years for a commercial or mixed-use project and shall not exceed

10 years for a residential project , except that to reduce the total value of tax credits needed to reimburse a developer

for all or part of the project financing gap of a redevelopment project, the authority

may, in its discretion, approve a duration for the eligibility period that is shorter

than the applicable maximum periods . The incentive award agreement shall provide an estimated date of completion and

include a requirement for periodic progress reports, including the submittal of executed

financing commitments and documents that evidence site control. If the authority does not receive periodic progress reports, or if the progress reports

demonstrate unsatisfactory progress, then the authority may rescind the incentive

award. If the authority rescinds an incentive award in the same calendar year in which the

authority approved the incentive award, then the authority may assign the incentive

award to another applicant. The incentive award agreement may also provide for a verification of the financing

gap at the time the developer provides executed financing commitments to the authority

and a verification of the developer's projected cash flow at the time of certification

that the project is completed. c. To ensure the protection of taxpayer money, if the authority determines at project

certification that the actual capital financing approach utilized by the project has

resulted in a financing gap that is smaller than the financing gap determined at board

approval, the authority shall reduce the amount of the tax credit or accept payment

from the developer on a pro rata basis. If there is no project financing gap due to the actual capital financing approach

utilized by the project, then the developer shall forfeit the incentive award. At the end of the seventh year of the eligibility period, the authority shall evaluate

the developer's rate of return on investment and compare that rate of return on investment

to the reasonable and appropriate rate of return at the time of board approval. If the actual rate of return on investment exceeds the reasonable and appropriate

rate of return on investment at the time of board approval by more than 15 percent,

the authority shall require the developer to pay up to 20 percent of the amount in

excess of the reasonable and appropriate rate of return on investment. The authority shall require an escrow account to be held by the authority until

the end of the eligibility period. Following the final year of the eligibility period, the authority shall determine

if the developer's rate of return exceeded the reasonable and appropriate rate of

return determined at board approval. If the final rate of return does not exceed the reasonable and appropriate rate

of return determined at board approval, the authority shall release to the developer

the escrowed funds. If the project final rate of return exceeds the reasonable and appropriate rate

of return determined at board approval, the authority shall require the developer

to pay up to 20 percent of the amount of the excess, which shall include the funds

held in escrow, and such funds shall be deposited in the State General Fund. d. The incentive award agreement shall include a requirement that the authority confirm

with the Department of Environmental Protection, the Department of Labor and Workforce

Development, and the Department of the Treasury that the developer is in substantial

good standing with the respective department, or the developer has entered into an

agreement with the respective department that includes a practical corrective action

for the developer, and the developer shall confirm that each contractor or subcontractor

performing work at the redevelopment project: (1) is registered as required by “The

Public Works Contractor Registration Act,” P.L.1999, c. 238 ( C.34:11-56.48 et seq. ); (2) has not been debarred by the Department of Labor and Workforce Development

from engaging in or bidding on Public Works Contracts in the State; and (3) possesses

a tax clearance certificate issued by the Division of Taxation in the Department of

the Treasury. The incentive award agreement shall also include a provision that the developer shall

forfeit the incentive award in any year in which the developer is neither in substantial

good standing with each department nor has entered into a practical corrective action.

The incentive award agreement shall also require a developer to engage in on-site

consultations with the Division of Workplace Safety and Health in the Department of

Health. e. (1) Except as provided in paragraph (2) of this subsection, the authority shall

not enter into an incentive award agreement for a redevelopment project that includes

at least one retail establishment which will have more than 10 employees, at least

one distribution center which will have more than 20 employees, or at least one hospitality

establishment which will have more than 10 employees, unless the incentive award agreement

includes a precondition that any business that serves as the owner or operator of

the retail establishment , distribution center , or hospitality establishment enters into a labor harmony agreement with a labor organization or cooperating labor

organizations which represent retail establishment, hospitality establishment, or distribution center employees in the State. (2) A labor harmony agreement shall be required only if the State has a proprietary

interest in the redevelopment project and shall remain in effect for as long as the

State acts as a market participant in the redevelopment project. The authority may enter into an incentive award agreement with a developer without

the labor harmony agreement required under paragraph (1) of this subsection if the

authority determines that the redevelopment project would not be able to go forward

if a labor harmony agreement is required. The authority shall support the determination by a written finding, which provides

the specific basis for the determination. (3) (Deleted by amendment, P.L.2023, c. 98 ) f. (1) Except for a residential project that is located in a government-restricted municipality,

and in which 100 percent of the residential units constructed in the residential project

are reserved for occupancy by low- and moderate-income households, for a redevelopment project whose total project cost equals or exceeds $10 million, in

addition to the incentive award agreement, a developer shall enter into a community

benefits agreement with the authority and the county or municipality in which the

redevelopment project is located. The agreement may include, but shall not be limited to, requirements for training,

employment, and youth development and free services to underserved communities in

and around the community in which the redevelopment project is located. Prior to entering a community benefits agreement, the governing body of the county

or municipality in which the redevelopment project is located shall hold at least

one public hearing at which the governing body shall hear testimony from residents,

community groups, and other stakeholders on the needs of the community that the agreement

should address. (2) The community benefits agreement shall provide for the creation of a community

advisory committee to oversee the implementation of the agreement, monitor successes,

ensure compliance with the terms of the agreement, and produce an annual public report.

The community advisory committee created pursuant to this paragraph shall be comprised

of representatives of diverse community groups and residents of the county or municipality

in which the redevelopment project is located. (3) At the time the developer submits the annual report required pursuant to section

62 of P.L.2020, c. 156 ( C.34:1B-330 ) to the authority, the developer shall certify, under the penalty of perjury, that

it is in compliance with the terms of the community benefits agreement. If the developer fails to provide the certification required pursuant to this paragraph

or the authority determines that the developer is not in compliance with the terms

of the community benefits agreement based on the reports submitted by the community

advisory committee pursuant to paragraph (2) of this subsection, then the authority

may rescind an award or recapture all or part of any tax credits awarded. (4) Notwithstanding any requirement of this subsection to the contrary, a developer shall be considered to have met the requirements of a community benefits agreement pursuant to this subsection if the developer submits

to the authority : (a) a copy of either the developer's approval letter from the authority or a redevelopment

agreement applicable to the qualified business facility, provided that the approval

letter or redevelopment agreement is certified by the municipality in which the redevelopment

project is located, and includes provisions that meet or exceed the standards required

for a community benefits agreement in this subsection, as determined by the chief

executive officer pursuant to rules adopted by the authority ; or (b) a resolution adopted by the governing body of the municipality in which the redevelopment

project is located, which resolution shall be adopted after at least one public hearing

at which the governing body provides an opportunity for residents, community groups,

and other stakeholders to testify, and which resolution shall state that the governing

body has determined that the redevelopment project will provide economic and social

benefits to the community that fulfill the purposes of this subsection, which benefits

render a separate community benefit agreement unnecessary, and explain the reasons

supporting the governing body's determination . g. A developer shall submit, prior to the first disbursement of tax credits under

the incentive award agreement, but no later than six months following project completion,

satisfactory evidence of actual project costs, as certified by a certified public

accountant, evidence of a temporary certificate of occupancy, or other event evidencing

project completion that begins the eligibility period indicated in the incentive award

agreement. The developer, or an authorized agent of the developer, shall certify that the information

provided pursuant to this subsection is true under the penalty of perjury. Claims, records, or statements submitted by a developer to the authority in order

to receive tax credits shall not be considered claims, records, or statements made

in connection with State tax laws. h. The incentive award agreement shall include a provision allowing the authority

to extend, in individual cases, the deadline for any annual reporting or certification

requirement. i. The incentive award agreement shall include one or more provisions, as determined

by the authority, concerning the terms and conditions for default and the remedies

for the developer of a redevelopment project in the event of default. The incentive award agreement shall not allow the authority to declare a cross-default

when the developer of a redevelopment project, including any business affiliate of

the developer or any other entity with common principals as the developer, is in default

with any other assistance program administered by the authority.