A special governor’s task force investigating the state’s controversial tax incentive program has abruptly backed off on plans next week to hold its third public hearing, after it was threatened Thursday with court action.

The move came a day after South Jersey powerbroker George Norcross III sought a restraining order against Gov. Phil Murphy and the task force in connection with Tuesday’s hearing in Trenton.

The task force, which is investigating how billions in New Jersey’s tax incentives were awarded, said it agreed with a request by a Superior Court judge to at least temporarily put the matter on hold. It said it will also delay a planned issuance next week of a fact-finding report, which is expected to focus at least some attention on whether business entities in Camden tied to Norcross might have benefitted from those tax breaks.

“The court presiding over the litigation asked that the task force postpone the hearing and issuance of its first report to permit the court to review the issues raised in the motion, and the task force agreed,” said the task force in a statement on Friday. “The court has scheduled a hearing on the motion for Monday, June 17.”

It added that it was “confident that the governor’s authority to appoint the task force will be upheld.”

The case is being heard before Superior Court Judge Mary C. Jacobson in Mercer County.

Attorneys for Norcross did not immediately respond to a request for comment.

In a 44-page brief filed in Mercer County Superior Court late Thursday afternoon, lawyers for Norcross, his insurance company, and other Camden-based entities with ties to him, challenged the legality and conduct of the task force, citing the “unlawful acts” of the governor and others in empowering the investigative board.

The task force, headed by former state Public Advocate Ronald Chen, was formed by Murphy in January after the New Jersey comptroller issued a highly critical report, concluding that the state Economic Development Authority may have “improperly awarded, miscalculated, overstate and overpaid” tax credits to a number of companies.

The EDA is responsible for directing New Jersey’s economic development efforts. Its major incentive programs — which include the Grow New Jersey Assistance Program and the Economic Redevelopment and Growth Grant Program — are set to expire in July unless renewed by the Legislature, which has said it will hold its own hearings.

In court filings, including an earlier lawsuit against the governor, Norcross has claimed the governor overstepped his authority in the creation of the task force that has already held two public hearings and has made clear that much of its focus is on Norcross. That lawsuit was brought on behalf of Norcross; his insurance company, Conner Strong & Buckelew, LLC; NFI, L.P.; The Michaels Organization, LLC; Cooper University Health Care and Parker McKay.

In seeking a restraining order, Norcross had argued that the task force’s “misconduct” caused them to suffer reputational harm, citing news stories that suggested they had taken unfair advantage of the EDA’s tax-incentive programs.

The task force earlier this week had announced its intentions to hold its third hearings and issue its first public report, when attorneys for Norcross went to court.

The issue remains a hot-button matter for the governor, who has made reform of New Jersey’s economic development incentives a key focus of the administration.

Laying out his proposals earlier this week, Murphy said he had no issue with New Jersey using tax breaks, which are traditionally handed out by states to lure or keep businesses and create jobs.

“I will not unilaterally disarm our economic development while our competitor states are luring businesses, in part, through incentives,” Murphy said.

But he reiterated Monday that he will not renew the current program set to expire June 30.

“I will not simply renew a set of incentive programs when serious questions exist about whether they have been successful in spurring broad-based economic activity in our communities, or even if their most basic promises have been met," the governor said.

Ted Sherman may be reached at tsherman@njadvancemedia.com. Follow him on Twitter @TedShermanSL. Facebook: @TedSherman.reporter. Find NJ.com on Facebook.

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