Governor Jon Corzine on June 28 signed the $33.5 billion State budget as well as several related bills designed to enhance the collection of existing taxes. NJBIA supports the budget because it results in $275 million in business tax reductions without raising any other taxes or fees. The budget eliminates the double taxation of S corporations and continues the tax savings from the repeal of the alternative minimum assessment and reinstatement of all net-operating-loss deductions.

The Governor also signed S-3001 (Turner)/A-5002 (Burzichelli), which allows the NJ Division of Taxation to request information on joint accounts of suspected tax debtors. It also requires companies to notify Taxation at least 10 days before the bulk sale of company assets so the agency can check a company's tax liabilities. Corzine also signed S-3003 (Turner)/A-5003 (Burzichelli, Vas), which requires participants in various State incentive programs to be up-to-date on any taxes owed. For more information, contact Art Maurice at ext. 247.

Last-Minute Action on Environment, Tax and Workforce Bills—Having completed their budget more than a week before the July 1 deadline, legislators wrapped up the last legislative voting sessions before the November election with action on environmental bills, Urban Enterprise Zone sales tax rebates, and new workforce rules and penalties. Two of NJBIA’s biggest concerns, paid family leave legislation and a vastly expanded mental healthcare insurance coverage mandate, were not acted on but could still come up after the election. Here is a look at some of the bills the Legislature did pass before going on break.

Greenhouse Gas Emissions. Both the Senate and Assembly sent to the Governor legislation capping greenhouse gas emissions that would increase consumers' electricity costs. A-3301 (Stender, Vainieri-Huttle)/S-2114 (Buono, T. Kean) would mandate a 20 percent reduction in greenhouse gases by 2020 and an 80 percent reduction by 2050. At NJBIA's urging, legislators removed provisions that would have allowed the NJ Department of Environmental Protection (DEP) and Board of Public Utilities (BPU) virtually unlimited powers to charge fees to businesses to implement the act. Nevertheless, the measure does give these agencies vast authority to regulate electricity use by businesses.

While NJBIA understands the need to reduce greenhouse gases, doing so on a state-by-state basis is ineffective. New Jersey should not set arbitrary emission limits before completing plans to implement the Regional Greenhouse Gas Initiative and the State's Energy Master Plan. The bill now goes to the Governor for consideration. For more information, contact Sara Bluhm at ext. 204.

Criminal Penalties for Misclassifying Workers. Legislation that could land employers in prison for as long as 10 years if they knowingly misclassify an independent contractor received final legislative approval on June 18. A-4009 (Caraballo, Egan)/S-2579 (Karcher, Codey) would make the misclassification a second-degree crime if it involves a contract valued at more than $75,000, a third degree crime for contracts between $2,500 and $75,000, and a fourth-degree crime for contracts under $2,500.

The bill also would put the burden on employers to prove that they do not have an employer-employee relationship subject to New Jersey's employment laws. NJBIA opposes this bill. The Association believes that intentionally misclassifying workers hurts both reputable employers and employees alike and should be punished with civil penalties. But hitting contractors with the same criminal penalties as some violent offenses goes too far. The bill is awaiting the Governor's consideration. For more information, contact John Rogers at ext. 209.

Increased Environmental Penalties. The Senate approved S-2650 (Vitale/Buono), which would greatly increase penalties for environmental violations. Before passage, the Senate Environment Committee adopted several NJBIA-backed amendments: removing big penalties for minor violations and clerical errors that were not intentional; clarifying that fines are paid to the Treasury, not the NJ Department of Environmental Protection; and ensuring that only the State can seek natural resources damages from a company. Nevertheless, companies would face fines of as much as $35,000 per day for violating a wide variety of environmental laws. For more information, contact David Brogan at ext. 236.

UEZ Tax Rebates. The Assembly on June 21 approved NJBIA-backed legislation that would rescind the requirement that Urban Enterprise Zone (UEZ) businesses apply for sales tax reimbursement on the business supplies they purchase, provided they have no business locations outside of a zone. Presently, these businesses have to pay the full sales tax and later file for a tax rebate with the NJ Division of Taxation.

The bill, A-3938 (Burzichelli, Fisher)/S-2491 (Sweeney), also would make the rebate process more business friendly for those who would not be exempt by reducing the period that the Division of Taxation has to audit a business's rebate claim from four years to one year, and requiring the Division of Taxation to pay interest on unpaid rebates. The measure is awaiting action in the Senate. For more information, contact Art Maurice at ext. 247.

Business Lay-off Notices. Some employers that close businesses or lay off workers would be subject to greater notification requirements and penalties, under legislation that received final legislative approval on June 11. A-1044 (Van Drew, Johnson)/S-472 (Sweeney, Doria) would require employers with 100 or more employees to provide 90 days notice before closing a business or laying off 50 or more employees within a 30-day period. If employers miss the notice requirements by even a single day, the bill would require them to pay employees the equivalent of one week's wages for each year of employment. NJBIA opposes this bill because it far exceeds other state and federal notification laws. Federal law requires only 60 days notice and does not penalize businesses with huge severance payments that could cost an employer hundreds of thousands of dollars. The measure now goes to Governor Corzine for consideration. For more information, contact John Rogers at ext. 209.

Reserve Your Tee Time for NJBIA Golf & Tennis Day, July 17—NJBIA will hold its 37th Annual Golf & Tennis Day at Forsgate Country Club in Monroe Township (exit 8A - NJ Turnpike). The event is one of the State's major business outings, attracting over 250 golfers each year.

Download our registration form or contact Sherry Esteves at 609-393-7707, ext. 219, for more information about sponsorship.

Raise Your Visibility. Become an Event Sponsor—Golf & Tennis Day. NJBIA's Meet the Decision Makers series. First-rate events like these offer your company an excellent opportunity to reach their target audiences and heighten their visibility as an event sponsor. Learn more about becoming an NJBIA sponsor online or contact Sherry Esteves at 609-393-7707, ext. 219.