I. State Issues

a. Tax Incentive Debate Looms over State Budget

 
On Wednesday, Governor Murphy outlined his proposal for a revamping of State economic development initiatives offered through the Economic Development Agency (EDA.)  As you are likely aware, the incentives advanced in the Economic Opportunity Act of 2013 have become a source of controversy since a State Comptroller’s report late last year. The current incentives program is set to expire on June 30.

Currently, there is State Task Force, appointed by the Governor, examining the incentives program and the State Senate has created a special committee, chaired by Senator Bob Smith to do the same. In the Assembly, Speaker Coughlin has indicated that the standing Assembly Commerce Committee would also undertake a review.   
 
Legislative leadership has expressed an interest in extending the current program for another year to develop a new program. In the Governor’s speech on Wednesday in Cherry Hill, he outlined his proposal. The Governor proposes the creation of 5 new programs to replace the current incentives program:

1)  NJ Forward: to promote investments in the newly designated Opportunity Zones;
2)  NJ Aspire: to promote neighborhood based investment;
3)  a new Brownfield Redevelopment program;
4)  Innovation Evergreen Fund:  to leverage the sale of future tax credits for strategic investments;
5)  Historic Preservation incentives.
 
The League will provide a deeper explanation and analysis of this proposal in the upcoming days. In the meanwhile, the Thursday story from NJ Spotlight provides good background.
 
Contact: Michael F. Cerra, Assistant Executive Director, mcerra@njlm.org, 609-695-3481 x120.

b. Cannabis Update

 
On Monday, the General Assembly is expected to concur with Senate amendments to A10/S10,  which expands access to medical marijuana.  This legislation establishes the Cannabis Regulatory Commission (CRC) to oversee the regulation of medical cannabis in the state, including the expansion of access to medical marijuana for patients with a diagnosed medical condition and the regulation of the four types of permits authorized by the Act. Under the act, patients could obtain up to 3 ounces of medicine per month, for 18 -months, an increase from the current 2- ounce maximum.  After that, the CRC will set the maximum amount that may be prescribed.
 
A-10/S-10 includes the following provisions:

1. Caps the number of cultivation permits to 23, with an 18- month exception to the limit for microbusiness;
2. Allows 7 alternative treatment centers to concurrently hold cultivator; manufacturer and dispensary permits. (All other entities can hold only one class of permits, and only one permit for that class.);
3.Allows the CRC to approve any medical cannabis dispensary permit holder to operate a medical cannabis consumption area, provided there is an endorsement from the municipality and permits municipality by ordinance to authorize the operations of local endorsed medical cannabis consumption areas;
4. CRC must consider proposed location including zoning approvals, provided there is a letter or affidavit from appropriate municipal officials and there is proof of local support, such as a resolution of the governing body; and
5. Authorizes a municipality with a medical cannabis dispensary may adopt an ordinance imposing a transfer tax on any medical cannabis dispensed by the dispensary. The rate is at the discretion of the municipality and cannot exceed 2%.
 
In addition, the Senate has scheduled a vote on S-3205, dealing with the expungement process. The Assembly is also holding a voting session on Monday but, at the time this is being written, has not scheduled the Assembly companion for a vote. 

Quoting the statement of the Senate Health Committee, “…this bill concerns several reforms to expungement eligibility and procedures, some focused on the treatment of various marijuana or hashish possession, distribution, or drug paraphernalia crimes and offenses and others being more generally applicable to any expungement.”  It is unclear what funding, if any, is contemplated to offset the costs of expungement.  It is expected, however, that the bill may be further amended or additional legislation may advance, to address some of the outstanding issues with the legislation. 
 
Contact: Michael F. Cerra, Assistant Executive Director, mcerra@njlm.org, 609-695-3481 x120.

c. NJ Department of Agriculture Set to Expand Spotted Lanternfly
    Quarantine Area

 
Earlier this week the NJ Department of Agriculture proposed expanding the Spotted Lanternfly Quarantine to include Burlington, Gloucester, Camden, Salem and Somerset Counties to the current quarantine area of Warren, Hunterdon and Mercer County.
 
The Spotted Lanternfly, Lycorma delicatula is a new pest to the United States.  This invasive plant-hopper, initially discovered in Berks County, Pennsylvania in 2014, is native to Southeast Asia and poses a threat to forests, ornamental trees, orchards, vegetables, grapes, hops and other agricultural commodities critical to the economy of the Garden State.  Since its initial discovery in Pennsylvania it has spread to infest portions of 14 counties of that state, recently it has been discovered in New Jersey in Warren, Hunterdon and Mercer, Burlington, Camden, Salem, and Somerset County. 
 
The New Jersey Department of Agriculture has determined this insect to be dangerous and destructive to the agriculture, horticulture and forest industries of New Jersey and has declared this insect to be a "public nuisance." The purpose of quarantine is to minimize the environmental and economic damage to the nursery, horticultural, fruit, vegetable, orchard and viticulture industries that will be severely economically affected by infestations along with the nuisance of honeydew excretions affecting the public wellbeing.
 
Full text of the proposal and all impact statements are published in the New Jersey Register dated June 3, 2019 and can be obtained by visiting the Department’s website.
 
For additional information or questions please contact Joe Zoltowski, Director, Division of Plant Industry, NJDA, at Joseph.Zoltowski@ag.nj.gov or 609-406-6940.