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NJTC TechPAC

NJTC TECH AGENDA

New Jersey maintains a significant national leadership position in United States as one of the top ten destination states for technology companies. However, that leadership position is fragile. There have been signs of fatigue in many of the metrics that are studied comparing New Jersey to its peers. This fatigue was confirmed by multiple national economic rankings that showed New Jersey lagging in the attraction of jobs and investment.

With proper incentives and state support, the technology sector can lead New Jersey out of its economic morass and offers a promising opportunity to jump start the economy with high-paying and lasting high-tech jobs. The New Jersey Technology Council contends that the State of New Jersey should focus on three areas: economic stimulus for high-tech companies; increased funding for higher education and resources for math, science and engineering education; and broadband.

Economic Stimulus Action Items

The New Jersey Technology Council believes New Jersey's Technology Business Tax Certificate Transfer Program needs statutory changes in order for New Jersey based technology and biotechnology companies to achieve long-term success. The Technology Business Tax Certificate Transfer Program allows technology and biotechnology companies with fewer than 225 employees to sell their Net Operating Lossess (NOL) and/or Research & Devleopment (R&D) tax credits to profitable corporate entities. The proceeds from those sales are required to be re-invested in the seller's business. There are two changes that need to be made statutorily:
1) Statutorily change Net Income to Net Operating Income. Currently, if a company had any income for the past two years they were ruled out of the program. Some companies have been kicked out for selling their own NOL's which put them in a positive position while still maintaining a negative operation position. A few companies were kicked out for settling debt for $.20 on the dollar. The phantom non-operating income due to GAAP put them in a positive income position on paper while receiving no actual cash to help them move forward and kicked them out of the program. In order to stay with the spirit of the original legislation, the change can be Net Operating Income before Extraordinary Income. Extraordinary income should be excluded, such as income from grants, sale of a building, sale of NOL's or R&D credits, etc. where the company continues to have a net operating loss.
2) Statutorily change the certification process for new, returning and re-certification of companies. By eliminating the returning applicant category and requiring all applicants to qualify on an annual basis, companies that have benefited from the program and no longer qualify will be eliminated. This will provide an increased pool of funds to allocate for those who currently qualify. The problem has been that a prior approved company's application has to be filled out, however it is not scored like first time applicants.

Support the creation of a State Procurement Program similar to the Small Business Innovation Research (SBIR) Program administered by the U.S. Small Business Administration. The SBIR program is a highly competitive program that encourages small businesses to explore their technological potential and provides the incentive to profit from its commercialization. This program stimulates high-tech innovation and the U.S. gains entrepreneurial spirit as it meets R&D needs by funding startup and development stages and encourages the commercialization of the technology, product or service, which, in turn, stimulates the economy. The NJTC supports any legislative effort to create a State run program which awards money/credits/grants to companies, which meet qualifications, to produce a product, technology or service. Once the final product, technology or service is produced the State would then be able to purchase it. This State program would encourage new technologies in New Jersey, provide an incentive for businesses to re-locate and remain in New Jersey, and increase and expand markets for New Jersey developed products through greater government preference.

Technology Education Action Items

Support increased funding for higher education in the State Budget. The NJTC reiterates its concern that New Jersey is not producing enough of the math, science and engineering graduates that the high-tech industry requires to fuel growth in high-tech jobs. For too many years the State would not increase funding. The FY2008 State Budget provided $2.1 billion for higher education, a reduction of $76 million from FY2008; and $11.5 billion for Pre-K to 12 education, an increase of $614 million for the FY2008 budget. New Jersey's education policy of teaching our children from K-12 and then exporting most of them out-of-state for college portends a bright future for the recipient states and a lost opportunity for New Jersey. Inadequate state aid leads to increased tuition costs which reduces student enrollment.

Support Assembly bill 591 (Voss, Malone) to establish a loan redemption program to encourage teachers to enter the Technology Education field. The number of applicants for advertised technology teacher positions has been dropping and school districts have been discontinuing technology programs when their certified technology education teachers retire. New Jersey needs to do all it can to encourage potential teachers to enter the technology education discipline and this legislation is a start. Technology Education classes get students motivated and excited to use math and science applications, and get them to critically think and problem solve.

Support Senate bill 2982 (Turner)/Assembly bill 850 (Chivukula) to establish a program in the New Jersey Department of Education to provide laptop computers and other educational technology equipment and training to public school middle school teachers.

Science Technology Engineering Mathematics (STEM). The NJTC supports using various incentives to motivate students and adults to study and enter science, technology, engineering and mathematics careers. There is a declining number of Americans pursuing undergraduate degrees in the sciences and engineering while European and Asian countries are heavily investing in their own science and engineering education and workforce capacity.

Broadband

Broadband is the key driver of economic development in New Jersey and across America. All Americans should have acess to affordable broadband products and services. Regulatory policies need to promote competition, investment and innovation to ensure that broadband services providers have incentives to develop and offer services. The NJTC opposes unfair and discriminatory taxation on internet sales, computer and I.T. services. Leaving the Internet unregulated has encouraged private investment in new services and infrastructure since the Telecommunications Act of 1996.