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NJEDA Board Approves Amendments to the Offshore Wind Economic Development Tax Credit Program Rules
On June 9, the New Jersey Economic Development Authority (NJEDA) Board approved a series of amendments to the Offshore Wind Economic Development Tax Credit Program rules to reflect changes to the program enabled by the New Jersey Economic Recovery Act (ERA) of 2020, signed by Governor Phil Murphy on January 7, 2021.
The primary changes enacted by the ERA include:
- modifying the period over which tax credits are paid out from 10 years to five years;
- revising the minimum number of new full-time jobs required to be eligible for the program from 300 to 150, and allowing for a project to ramp-up jobs over time;
- expanding the eligible geography for the program from the seven southern counties to the entire state.
The changes create a pathway for additional projects to participate in the program. Previously a project needed at least 300 new full-time jobs to be eligible for tax credits. Now, projects that projects creating between 150-300 new full-time jobs can apply for tax credits, however awards will be sized using a pro-rated award formula. In recognition of offshore wind being a new industry in the State, the rules also now allow a project to ramp-up job creation over the first four years of a project.
Another change made by the ERA of 2020, expands the eligible geography for the program from the seven counties to the entire state. In addition, to provide clarity on the above statutory changes, the approved amendments also include policy updates on eligible costs, calculating net benefits test parameters, and fees.
Tenants in qualified wind energy facilities may also receive tax credits, if they occupy space in a qualified wind energy facility that proportionally represents at least $17.5 million of the capital investment in the facility, and, employ at least the minimum number of new, full-time employees in that facility.
Businesses must apply for the tax credits by July 1, 2025 and satisfy the capital investment and employment conditions for award of the credits by July 1, 2028.
Please reach out to Hilary Chebra, Manager, Government Affairs at hchebra@chambersnj.com if you have any questions.
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