Over the past month, economic woes have become the central issue of concern, both locally globally, and of course nationally. With the interconnectivity of today’s global marketplace, this concern is more than justified. What we do or fail to do, in the case of the rejected federal economic bailout package by Congress, has significant implications on the world economic stage.
Here in New Jersey, we fully understand that we cannot successfully operate as a financial entity unto ourselves. We also understand that the national economic situation is likely to get worse before it gets better, a prospect that could have a dire impact on the lives of hundreds of thousands of Garden State working families.
While New Jersey legislators know that we cannot hope to solve the nation’s economic problems alone, we have been more than just passive observers of the burgeoning economic recession. Over the past nine months, the legislation has taken action, advancing numerous measures that will help protect our state’s economic engine and shore up New Jersey businesses as the national economic climate continues to sour.
In the General Assembly, we backed cutting business taxes by $275 million; we strengthened the state’s Unemployment Trust Fund and avoided a $350 million business tax increase; and we passed the Permit Extension Act of 2008 that extends all permits and approvals granted to businesses by the government for up to four years.
More recently, we held a special meeting of the Assembly Labor Committee to discuss the impact of the recent financial crisis on New Jersey residents and businesses. I am proud to have been a sponsor of a seven-bill package, that passed last month designed to simplify many of New Jersey’s corporate governance statutes and make the state more attractive to business.
The first measure of the seven-bill package (A-2879) allows any notice required under the provisions of the “New Jersey Business Corporation Act” to be issued electronically, saving corporations time and money and allowing for more immediate, direct access to corporate directors and shareholders.
The second piece (A-2880) eliminates the 10-day notice period required for certain types of shareholder actions. That requirement creates inefficiencies in standard transactions and causes unnecessary delays for corporations seeking to complete routine business.
The third legislation (A-2881) enables corporate directors to provide a notice of resignation that is only effective when certain events occur, providing for smoother transitions in many circumstances – such as when a director doesn’t receive a majority vote at a shareholder’s meeting.
The forth measure (A-2882) provides true one-hour and two-hour options for expedited over-the-counter corporate service requests. Currently, expedited service is considered priority same day service, which is processed within 8.5 hours from the time the request is received.
The fifth option (A-2883) allows a corporation to eliminate plurality voting for director elections using the corporation’s bylaws, giving New Jersey corporations greater flexibility in adopting other voting methods concerning the selection of directors. Current law requires a corporation to amend the certificate of incorporation for any such changes.
The sixth (A-2884) modernizes state law to better account for the expanded scope of global business interactions by amending the definition of a foreign corporation to mirror the definition used in the Uniform Limited Partnership Law and the New Jersey Limited Liability Company Act. The measure would eliminate confusion caused by the differing definitions and also allow unincorporated entities beyond the traditional partnerships and limited liability companies to merge with New Jersey corporations.
The final measure (A-2885) provides greater flexibility in the types of equity awards a corporation may use, in recognition of the corporate trend away from granting stock options in favor of more restricted stock grants.
In the coming weeks and months, the Legislature we will be considering more options that may provide economic stimulus, relief or protection to New Jersey’s businesses and residents. New Jersey has several options to streamline businesses.
This past Monday, the General Assembly held special hearings to asset in the economic crisis that New Jersey is facing. As Chairman of the Assembly Commerce and Economic Development Committee, I focused our concern solely on the financial emergency and what can be done to help New Jersey’s residents and businesses.
An option that I have proposed (A-2997) modifies the Business Employment Incentive Program (BEIP) to allow co-ops to participate in the program, let eligible businesses count certain types of permitted contract workers as new employees for the purpose of BEIP incentive agreements, give over-performing urban businesses better incentives under BEIP and allow grant agreement extensions for businesses if they agree to extend participation in the BEIP program.
In addition, A-3243 will allow certain business employment incentives offered by BEIP to be taken as a credit against the company’s corporate business tax liability. This approach differs from other corporate business tax credits in that it would allow a corporation to reduce its tax obligation to zero and, if the BEIP incentive exceeds the corporation’s tax obligation, to receive the remainder as a refund.
Lastly, A-2722 could eliminate the so-called “throw-out” provision of the state’s corporate business tax, which currently discounts sales made in states where the corporation is not taxed, increasing the overall amount of taxes owed by New Jersey businesses. By eliminating the throw-out provision a more accurate and fair representation of a business’s total income – and what portion should be allotted to New Jersey – is produced.
In the face of continued national economic uncertainty, we must make every effort to help refuel the engines of private commerce in New Jersey. Doing so will stimulate our statewide economy, boost private sector job growth, and give New Jersey families some of the tools they need to successfully weather the tough economic times ahead.
Please feel free to take the time to contact my district office at 276 Hobart Street in Perth Amboy at (732) 324-5955 or via e-mail at AsmVas@njleg.org, should you have any questions, concerns or proposals regarding legislative matters.
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