ASSEMBLY, No. 92

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman ROONEY

An Act to establish a program in the New Jersey Economic Development Authority to provide assistance to owners of dry cleaning businesses for the purchase and installation of certain equipment used for control and abatement of certain toxic emissions and supplementing chapter 1B of Title 34 of the Revised Statutes.

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

    1. This act shall be known and may be cited as the "New Jersey Dry Cleaning Business Assistance Act of 1994."

    2. The Legislature finds and declares that: it is in the public interest for the State to establish a loan fund and guarantee program for owners of dry cleaning businesses who require financial assistance to purchase and install "Generation 4 dry cleaning equipment" in order to comply with State and federal limits on perchloroethylene emissions caused by the operation of such machinery; while "Generation 4 dry cleaning equipment" incorporates several advanced features that substantially reduce the amount of such releases, the cost of purchasing and installing this equipment makes it impractical for many small business owners to finance the purchase and installation thereof without financial assistance; the funding of a financial assistance program by the New Jersey Economic Development Authority is an appropriate use of monies available to the authority; such a program will assist ongoing efforts to reduce the levels of perchloroethylene emissions in the State and to meet national standards promulgated by the United States Environmental Protection Agency for hazardous waste generated by dry cleaning businesses.

    3. As used in this act:

    "Area source cleaner" means any perchloroethylene dry cleaning facility including, but not limited to, facilities with owner-operated dry

cleaning machines or coin-operated dry cleaning machines operated by customers,

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

    "Department" means the New Jersey Department of Commerce and Economic Development;

    "Dry cleaning" means the process of cleaning clothing, garments, textiles, fabrics, leather goods, and the like, using perchloroethylene;

    "Dry cleaning business" means a sole proprietorship, partnership or corporation that operates an area source dry cleaner;

    "Dry-to-dry machine" means a one-machine dry cleaning operation in which washing and drying are performed in the same machine;

    "Generation 4 dry cleaning equipment" means dry-to-dry machines with a stage of carbon absorbers or equivalent apparatus that reduces the level of perchloroethylene left in the drum of the machine to 300 parts per million or less;

    "Perchloroethylene emissions" means any gaseous or vaporous releases of perchloroethylene, tetrachloroethylene or its chemical equivalent, whether released into the indoor environment or outdoor environment;

    "Program" means the "New Jersey Dry Cleaning Business Assistance Program" to be established by the authority pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill).

    4. There is established within the authority, the New Jersey Dry Cleaning Business Assistance Program. The purpose of the program shall be to provide financial assistance to owners of dry cleaning businesses for the purchase and installation of generation 4 dry cleaning equipment which reduces perchloroethylene emissions. The program shall be administered by the authority in consultation with the department. The purpose and activity of the program shall be deemed to be supplementary to, and not in lieu of, the powers of the authority.

    5. a. In order to effectuate the purpose of the program, the authority shall establish and maintain a special, revolving account to be known as the "New Jersey Dry Cleaning Business Assistance Account," hereinafter the "assistance account," which shall be credited with:

(1) an amount from the Economic Recovery Fund established pursuant to section 4 of P.L.1992, c.16 (C.34:1B-7.13) which the authority determines is necessary to effectively implement the program, within the limits of funding available from the Economic Recovery Fund, and based upon the response to the program by owners of dry cleaning businesses and by participating banks; (2) any moneys that shall be received by the authority from the repayment of the moneys in the assistance account used to provide direct loans or loan guarantees pursuant to this section and interest thereon; and (3) other moneys of the authority, including but not limited to, any moneys available from other business loan programs administered by the authority which it determines to deposit therein.

    b. The authority may use the moneys in the assistance account established pursuant to this section for:

    (1) funding direct loans, the amounts of which shall be determined by the authority in consultation with the department, to assist eligible dry cleaning businesses with the purchase and installation of generation 4 dry cleaning equipment, and guaranteeing up to 25% of the amounts of loans to be provided by participating banks in accordance with section 7 of P.L. , c. (C. )(now before the Legislature as this bill);

    (2) making payments in fulfillment of the terms of any direct loans, or guarantee agreements, entered into pursuant to section 7 of P.L.  , c. (C. )(now before the Legislature as this bill); and

     (3) defraying the administrative costs of the authority in carrying out the purposes and provisions of P.L. , c. (C. )(now before the Legislature as this bill).

    c. The portion of the direct loans provided by participating banks may be guaranteed by the authority pursuant to section 7 of P.L. , c. (C. )(now before the Legislature as this bill) if the owner of the dry cleaning business has qualified therefor by demonstrating to the satisfaction of the authority that the funds needed to purchase the generation 4 dry cleaning equipment would not otherwise be available to the business.

    d. The maximum amount and term of a loan or guarantee made pursuant to P.L. , c. (c. )(now before the Legislature as this bill) shall be determined by the authority.

    6. (New section) The authority shall establish sufficient reserves and liquid reserves, aside from those moneys required to provide a sufficient and actuarially sound basis for its pledges contained in any loan, or guarantee agreement entered into pursuant to P.L. , c. (c. ) (now before the Legislature as this bill).

    7. (New section) The authority shall enter into agreements with participating banks to use the moneys from the assistance account to provide up to 25% of the direct loans to enable owners of dry cleaning businesses to purchase and install generation 4 dry cleaning equipment.

    The agreements shall further provide that the balance of the loans for financing the purchase of such systems for eligible dry cleaning businesses shall come from participating banks. The authority may also use moneys from the assistance account to guarantee up to 25% of the portion of the loans to be provided by the participating banks in those cases where the authority determines that such a guarantee is necessary for an agreement authorized by this section. The agreements shall also provide for any other terms or conditions which the authority and the participating banks stipulate to as being necessary or desirable to make loans, to guarantee loans and to otherwise effectuate the purpose of the program.

    8. (New section) In addition to the duties of the authority required under section 6 of P.L.1983, c.303 (C.52:27H-65), the authority shall, in consultation with the department, prepare a report within one year following the effective date of P.L. , c. (C. )(now before the Legislature as this bill). The report shall include, but not be limited to, a description of the demand for the program from eligible dry cleaning businesses and participating banks, the efforts made by the authority to promote the program, the total amount of loans, or guarantees issued by the authority pursuant to the program and an assessment of the effectiveness of the program in meeting the goals of P.L. , c. (C. ) (now before the Legislature as this bill). The authority shall submit its report to the Governor and the Legislature, along with any recommendations for legislation to improve the effectiveness of the program.

    9. (New section) The authority and the department shall jointly adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as may be necessary to effectuate the purposes of P.L. , c. (C. )(now before the Legislature as this bill) including, but not limited to, the making of loans, and the issuance of guarantees pursuant to P.L. , c. (C. )(now before the Legislature as this bill).

    10. This act shall take effect immediately, but shall remain inoperative until the enactment into law of P.L. , c, (C. ) (now before the Legislature as Assembly Bill No. 1917 of 1994) or legislation of substantially similar effect.

STATEMENT

    This bill establishes a "New Jersey Dry Cleaning Business Assistance Program" in the New Jersey Economic Development Authority to assist owners of dry cleaning businesses in purchasing and installing state-of-the-art dry-cleaning equipment which reduces the amount of perchloroethylene released as part of the dry cleaning process. The program is intended to provide access to funding which might otherwise not be available to these businesses by directing the authority to make direct loans and to give loan guarantees, in conjunction with a consortium of participating banks, to eligible businesses for the purchase of more technologically advanced dry cleaning equipment.

    The program will be administered by the authority in consultation with the Department of Commerce and Economic Development.

    The bill establishes a special, revolving account to be known as the "New Jersey Dry Cleaning Business Assistance Account" (the assistance account), which shall be credited with such amount from the Economic Recovery Fund, established pursuant to section 4 of P.L.1992, c.16 (C.34:1B-7.13), as the authority shall determine is necessary to effectively implement the program based upon demand from eligible dry-cleaning businesses, and participating banks. The assistance account shall also be credited with other available moneys including, but not limited to, moneys in the business loan programs administered by the authority, which the authority determines to deposit therein.

    The bill establishes a means to leverage the moneys in the assistance account through a public/private partnership between the Economic Development Authority and participating banks whereby up to 25% of the loan needed for the purchase of new dry cleaning equipment would be provided by the account with the balance of the loan to be provided by participating banks.

    Rules and regulations to administer the program would be adopted jointly by the authority and the Department of Commerce and Economic Development.

    The bill requires the authority, in consultation with the department, to report back to the Governor and the Legislature within one year following the effective date of the bill on the status of the program and any recommendations for legislation to better effectuate the goals of the program.

    The bill would remain inoperative until the enactment of legislation setting forth standards and requirements for state-of-the-art dry cleaning equipment.

The "New Jersey Dry Cleaning Business Assistance Act."