[Second Reprint]

ASSEMBLY, No. 3959

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED MAY 1, 2020

 


 

Sponsored by:

Assemblyman  RAJ MUKHERJI

District 33 (Hudson)

Assemblywoman  VALERIE VAINIERI HUTTLE

District 37 (Bergen)

Assemblywoman  VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

 

Co-Sponsored by:

Assemblyman Thomson, Assemblywoman Sumter, Assemblymen Johnson, DePhillips, Assemblywomen Timberlake, Speight, Assemblyman Spearman, Assemblywoman McKnight, Assemblymen Catalano, S.Kean, McGuckin, DeAngelo, Assemblywomen Lopez and Downey

 

 

 

 

SYNOPSIS

     Establishes NJ Hospitality Emergency Loan Program in EDA to provide no-interest loans to qualified small hospitality businesses; makes $100 million appropriation to EDA from federal funds for certain small business assistance.

 

CURRENT VERSION OF TEXT

     As reported by the Assembly Appropriations Committee on May 11, 2020, with amendments.

  


An Act expanding a small business loan program to include hospitality industry businesses 2and allocating federal funding for certain small business assistance2, amending P.L.2011, c.201, 2[1and1]2 repealing section 3 of P.L.2019, c.240 1[, and making an appropriation]1 2, and making an appropriation2.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    Section 1 of P.L.2011, c.201 (C.34:1B-241.1) is amended to read as follows:

     1.    As used in P.L.2011, c.201 (C.34:1B-241.1 et seq.):

     "Authority" means the New Jersey Economic Development Authority established by section 4 of P.L.1974, c.80 (C.34:1B-4).

     “Department” means the Department of Agriculture established pursuant to R.S.4:1-1.

     "Eligible farming operation" means two or more business entities that are engaged in farming operations in the State, that are applying together for participation in the small business loan program established pursuant to section 2 of [P.L.2019, c.240] P.L.2011, c.201 (C.34:1B-241.2), and that, at the time of the application, are independently owned and operated, participate in an agricultural commodity or product marketing and development program operated by the Department of Agriculture, and satisfy other criteria that may be established by the authority pursuant to [P.L.2019, c.240] P.L.2011, c.201 (C.34:1B-241.1 et seq.).

     "Eligible small business" means a business entity that, at the time of application for participation in the small business loan program established pursuant to section 2 of P.L.2011, c.201 (C.34:1B-241.2), is independently owned and operated, operates primarily within this State, and which satisfies other criteria that may be established by the authority.  "Eligible small business" shall include a qualified dairy [farmers and] farmer, an eligible farming [operations] operation, and a qualified hospitality business.

     “Farm equipment” means equipment used directly for farming operations.

     “Farming operations” mean any activities connected to the commercial growing, harvesting, processing, producing, or raising of agricultural products in the State, including crops, dairy animals, livestock, fur-bearing animals, poultry, bees, crops used in fermented alcoholic beverages and wine, and any products therefrom, including organic agricultural products; aquacultural products; horticultural products; and silviculture products.

     "Qualified dairy farmer" means a person or business entity that produces valued-added dairy products and that, at the time of application for participation in the small business loan program and receipt of a loan under the program, is independently owned and operated, operates primarily within this State, and satisfies other criteria that may be established by the authority.

     “Qualified hospitality business” means a small hospitality industry-related business, as determined by the authority using the latest four-digit North American Industry Classification System of codes 1[and], including, but not limited to, code number 3121 (Beverage Manufacturing) and code number 7223 (Special Food Services),1 that, as of the effective date of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), 1[that]1 has been in operation for more than six months and, for that prior year, had annual sales revenue below 1[$1.5 million] $2 million if in operation for more than 12 months or had annual sales revenue below $1 million if in operation for less than 12 months1.

     “Value-added dairy product” means a dairy product created by a qualified dairy farmer by means of a change in the physical state of a dairy commodity, and shall include, but not be limited to, cheese, cultured sour cream, yogurt, kefir, butter, ice cream, evaporated milk, condensed milk, and concentrated milk.

(cf: P.L.2019, c.240, s.1)

 

     2.    Section 2 of P.L.2011, c.201 (C.34:1B-241.2) is amended to read as follows:

     2.    a.  The authority shall maintain and administer a small business loan program for the purpose of providing loans to eligible small businesses.  The authority shall consult with the department in administering the small business loan program as it applies to: (1) an eligible small business that is an eligible farming operation; (2) defining the types of dairy products that shall be considered as value-added dairy products under the small business loan program, not inconsistent with section 1 of [P.L.2019, c.240] P.L.2011, c.201 (C.34:1B-241.1); (3) developing small business loan program guidelines for qualified dairy farmers and eligible farming operations; and (4) developing materials to provide to qualified dairy farmers seeking to expand value-added dairy production in this State.

     b.    (1)  Loans made through the small business loan program may be made to an eligible small business.  The loan funds may be applied to any aspect of the eligible small business that supports its capital purchases, employee training, and salaries for new positions as determined by the authority.

     (2)   Notwithstanding paragraph (1) of [subsection b. of this section] this subsection, loans made by the authority to an eligible farming operation may only be applied to aspects of the eligible farming operation that support the farming operation’s farm equipment purchases, as determined by the authority.  Farm equipment purchased from loan funds made pursuant to [P.L.2019, c.240] P.L.2011, c.201 (C.34:1B-241.1 et seq.) shall be used by all of the business entities in the eligible farming operation.

     (3)   Two or more business entities engaged in farming operations in the State seeking to participate in the loan program established pursuant to subsection a. of this section shall submit a joint application in a form as the authority shall require and shall include information as the authority determines is necessary in consideration of a loan authorized pursuant to [P.L.2019, c.240] P.L.2011, c.201 (C.34:1B-241.1 et seq.).

     (4)   Notwithstanding paragraph (1) of this subsection, loans made by the authority to a qualified hospitality business may only be applied to cover immediate, unavoidable expenses, as determined by the authority, other than payroll costs, throughout the duration of the emergency established under Executive Order No. 103 of 2020.

     c.     (1)  (a)  In order to receive a loan pursuant to the small business loan program, a business, at the time of application, shall provide proof that it is an eligible small business and shall enter into a small business loan agreement with the authority.

     (b)   1[A] In addition to the requirements of subparagraph (a) of this paragraph, a1 qualified hospitality business shall provide to the authority:

     (i)    proof that the qualified hospitality business has been in operation and generating revenue for at least six months;

     (ii)   an income statement showing the qualified hospitality business  1[has] had1 no more than 1[$1.5 million in annual revenue] $2 million in annual sales revenue if in operation for more than 12 months, or had no more than $1 million in annual sales revenue if in operation for less than 12 months1; and

     (iii)     bills for which payment is sought, including proof of payments, or for a qualified hospitality business in operation less than 12 months, a letter to the entity for which the money is due, the qualified hospitality business has been current for 100 percent of payments over the time the qualified hospitality business has been in operation and not past due in the month prior to the current month for which the qualified hospitality business is applying for a loan under the small business loan program.

     (2)   In order to receive a loan from the authority pursuant to [P.L.2019, c.240] P.L.2011, c.201 (C.34:1B-241.1 et seq.), a business entity engaged in farming operations in the State, at the time of application, shall provide proof, in a manner determined by the authority, that it and at least one other business entity meet the requirements to be an eligible farming operation, including, but not limited to, proof that each business entity is engaged in farming operations in the State and will use the farm equipment purchased with the loan funds.

     d.    The authority shall review and may approve applications for the small business loan program.

     e.     A business seeking to participate in the small business loan program shall submit an application in a form as the authority shall require.  The application shall include information the authority shall determine is necessary in consideration of the provisions of P.L.2011, c.123 (C.52:14B-21.1 et seq.).

     f.     Loans to an eligible small business under this section shall:

     (1)   be made pursuant to a small business loan agreement made pursuant to subsection c. of this section;

     (2)   except as otherwise provided in this subsection, bear interest at rates and terms deemed appropriate by the authority; and

     (3)   contain other terms and conditions considered appropriate by the authority that are consistent with the purposes of P.L.2011, c.201 (C.34:1B-241.1 et seq.) and with rules and regulations adopted by the authority pursuant to section 3 of P.L.2011, c.201 (C.34:1B-241.3).

     Loans to a qualified hospitality business shall be of an amount not to exceed $10,000 1[per business]1 per month, shall be interest free, and have a 10-year term with payments deferred for nine months from the date of the beginning of the loan agreement.

     The provisions of a loan agreement with an eligible farming operation shall include, but need not be limited to, a statement of an eligible farming operation’s proportional shares of ownership, its farm equipment usage and maintenance responsibilities, and its loan repayment responsibilities for any loan proceeds received under the loan program.

     g.    The authority may, in its discretion, require an eligible small business that receives a loan under the small business loan program administered pursuant to P.L.2011, c.201 (C.34:1B-241.1 et seq.) to submit an audited financial statement to the authority in order to ensure the business's continued vitality.  An audited financial statement from an eligible farming operation shall include each business entity in the eligible farming operation using the farm equipment.

     h.    The authority may, either through the adoption of rules and regulations, or through the terms of the small business loan agreement made pursuant to subsection c. of this section, establish terms governing the incidence of default by a recipient of a loan under the small business loan program, administered pursuant to P.L.2011, c.201 (C.34:1B-241.1 et seq.).

     i.     In determining whether to provide a loan to an eligible small business, the authority shall consider, along with other criteria that the authority in its discretion deems appropriate, whether the business commits to increasing its full-time employment level in the State.

     1j.    The authority shall make available no less than a total of $5 million for the purpose of providing loans to qualified hospitality businesses pursuant to P.L.2011, c.201 (C.34:1B-241.1 et seq.).1

(cf: P.L.2019, c.240, s.2)

 

     3.    Section 3 of P.L.2011, c.201 (C.34:1B-241.3) is amended to read as follows:

     3.    The authority may adopt such rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as may be necessary to effectuate the purposes of P.L.2011, c.201 (C.34:1B-241.1 et seq.).  The authority shall consult with the department concerning the rules and regulations applicable to loans made to qualified dairy farmers and eligible farming operations.  The authority may consult with the Division of Alcoholic Beverage Control in the Department of Law and Public Safety concerning the rules and regulations applicable to loans made to qualified hospitality businesses 1[having] that have been issued1 a 1[licensed] license1 to sell alcoholic beverages pursuant to R.S.33:1-1 et seq. or 1[who has] have1 been issued a permit to sell alcoholic beverages by the Division of Alcoholic Beverage Control.

(cf: P.L.2011, c.201, s.3)

 

     1[4.  There is appropriated from the General Fund to the New Jersey Economic Development Authority the sum of $5,000,000 solely for the provision of loans to qualified hospitality businesses pursuant to paragraph (4) of subsection b. of section 2 of P.L.2011, c.201 (C.34:1B-241.2).]1

 

     24.   There is appropriated from the General Fund to the New Jersey Economic Development Authority the sum of $100 million from a portion of those federal block grant funds allocated to the State from the federal “Coronavirus Relief Fund,” established pursuant to the federal Coronavirus Aid, Relief, and Economic Security Act,” Pub.L.116-136, for use by the authority to provide financial support, such as loans or grants, to small businesses for the costs associated with business operation interruptions caused by any State-required closures due to the impacts of Coronavirus disease 2019.2

 

     1[5.] 2[4.1] 5.2     Section 3 of P.L.2019, c.240 is repealed.

 

     1[6.] 2[5.1] 6.2     This act shall take effect immediately.