Bill to Enhance Investments in Small Technology Companies Passes Committee
Thursday, June 04, 2009

MEMORANDUM

TO: Members of the Assembly Commerce and Economic Development Committee

FROM: Christina M. Genovese, Manager, Government Relations

RE: A-3883 (Chivukula/Oliver/Giblin)

DATE: June 4, 2009

The Chamber of Commerce Southern New Jersey supports committee substitute A-3883 (Chivukula/Oliver/Giblin), which expands State programs to encourage investments in small technology companies.

The Technology Business Tax Certificate Transfer Program is a program administered by the New Jersey Economic Development Authority that enables approved technology and biotechnology businesses to sell their unused net operating loss carryover (NOL) and unused research and development tax credits to unaffiliated, profitable corporations in New Jersey for 80 % of the value of the tax benefits. The proceeds from those sales are required to be re-invested in the seller's business by purchasing equipment, facilities, or other allowable expenditures.

The Chamber believes A-3883 (Chivukula/Oliver/Giblin) will enhance this program by raising the ceiling on the maximum lifetime value of surrendered tax benefits under the NOL component of this program from $10 million to $15 million. Additionally, the Chamber believes that increasing the amount of private financial assistance offered for the tax credits from 75% to 80% will also assist in providing extra funding to less profitable companies during this economic decline.

New Jersey maintains a national leadership position in the United States as one of the top ten destination states for technology companies. However, that leadership position is fragile and current economic conditions have only made things worse. By expanding the qualifications for the Technology Business Tax Certificate Transfer Program, the Legislature will send a message that government is serious about fostering economic growth and helping small technology businesses during hard economic times.

For these reasons, we urge you to support committee substitute A-3883 (Chivukula/Oliver/Giblin).