Projects delayed by the economic downturn would not lose their existing permit approvals under legislation released by the Assembly Environment Committee on June 12. Known as the Permit Extension Act, A-2867 (Greenwald, Malone) would extend to December 31, 2010, the expiration date of all State and local government approvals issued since January 1, 2006.

The permitting process in New Jersey is extremely time-consuming and expensive. In many cases, projects must obtain dozens of permits from five levels of government. Permits can easily take five years and hundreds of thousands of dollars to secure. But the housing mortgage crisis, the tightening of the credit markets, and other economic factors have delayed financing for many projects that have already successfully completed the arduous permitting process. At a time when the State economy desperately needs such projects to move forward, it makes no sense to force them to navigate the entire time-consuming permitting process again because of an arbitrary deadline.

The State's previous Permit Extension Act was a great success. A similar extension of government-issued permits in 1992 proved to be a successful economic stimulus. It stabilized the construction workforce, accelerated construction activity during a recession and created jobs, all without negatively impacting the environment. For more information, contact Art Maurice at ext. 247.

The Senate Budget and Appropriations Committee on June 9 voted to overturn new Council on Affordable Housing (COAH) regulations that would allow municipalities to charge an 8 percent to 10 percent tax on nonresidential development. Instead, the committee released S-1783 (Lesniak), which would establish a Statewide tax of 2.5 percent on nonresidential development and specifically prohibit municipalities from assessing other fees or requiring affordable housing construction by nonresidential developers. A similar bill, A-500 (Roberts, Watson Coleman), was released by the Assembly Appropriations Committee on June 5.

NJBIA supports the bill. It would encourage creation of affordable housing and limit the power of municipalities to impose outrageous affordable housing developer fees and building requirements designed to discourage commercial and industrial development. Without this measure, the costs of non-residential development could increase by as much as 10 percent, making some projects too expensive to build or requiring builders to charge higher rents. For more information, contact Art Maurice at ext. 247.

Workers' Comp Bills Clear Assembly Labor Committee

Legislation that would make some modifications to New Jersey’s workers’ compensation system were released by the Assembly Labor Committee on June 12. Employers are required to purchase workers’ compensation insurance to cover work-related injuries to their employees. New Jersey’s current workers’ compensation system works well and should be fundamentally maintained. The system, funded entirely by employers, provides generous benefits at reasonable premium costs. In fact, even though New Jersey has among the highest labor costs of any state in the nation, it is ranked only 23rd in workers’ compensation costs.

The committee released, A-2969 (Cohen, Egan), which would increase the membership of the Compensation Rating and Inspection Bureau (CRIB), which sets the rules and premium rates for workers’ compensation insurance. The bill would add one member each from a Statewide business organization, a Statewide labor organization, and the public at large. The committee also released A-2970 (Egan, Cohen), which would authorize the Insurance Fraud Prosecutor to prosecute cases where employers fail to provide workers’ compensation insurance. Before the vote, however, the committee adopted NJBIA-backed amendments to clarify that the authorization would only extend to cases involving alleged repeat offenders.

In separate action, the full Senate passed two workers’ compensation reform bills to increase criminal penalties for failing to maintain workers’ compensation insurance (S-1914 (Sarlo, Cunningham)) and expand CRIB membership (S-1917 (Sarlo, S. Kean)). A third bill, S-1918 (Sarlo, Madden), authorizing the Insurance Fraud Prosecutor to prosecute cases where employers fail to provide workers’ compensation insurance, including first-time offenders, has been referenced to the Senate Budget and Appropriations Committee.

Governor Jon Corzine and legislative leaders are considering delaying the phase-out of a 3 percent tax on energy bills as part of the State budget. It would be the fourth time in seven years the date for reduction or elimination of what was supposed to be a temporary tax is delayed. NJBIA opposes this proposal and believes the tax should be phased out by 2010, as current law requires.

The tax is known as the Transitional Energy Facilities Assessment (TEFA) and was established in 1997 as part of New Jersey’s energy deregulation laws, which shifted the taxation of utilities from a gross receipts tax to a combination of corporation and sales taxes. TEFA was originally scheduled to end in 2002, but the Legislature extended the phase-out deadline twice and delayed a scheduled reduction in 2006. The next reduction in TEFA of $62 million is scheduled for January 2009.

New Jersey already has some of the highest electricity costs in the nation, and rates in New Jersey have risen by double digits over the past five years. With rising costs and a weak economy, New Jersey’s employers and consumers alike can no longer afford to pay a tax that was supposed to be eliminated years ago. For more information, contact Art Maurice at ext. 247.

Seminar: Hot Legal Topics for Employers, June 17

This half-day seminar is a must for human resources managers. NJBIA will bring together some of NJ’s foremost HR attorneys to cover critical workplace issues, such as paid family leave, hiring and firing, wage- and hour-compliance, and discrimination and harassment. Our panelists will cut through the legal jargon and tell you what you need to know to avoid legal liability. Register online now, or for more information, contact at 609-393-7707, ext. 213.