ASSEMBLY, No. 979
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblyman GEIST
An Act establishing an economic recovery program for agriculture, and amending and supplementing P.L.1974, c.80.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) Sections 1 through 9 of this 1993 amendatory and supplementary act shall be known and may be cited as the "New Jersey Agricultural Business Assistance Act."
2. (New section) The Legislature finds and determines that the ongoing recessionary economy has exacerbated the financial plight of farmers in this State to the point of financial crisis, which must be promptly addressed to preserve agricultural jobs, to prevent any further loss of diminishing farmland and to maintain the viability and competitiveness of the State's agricultural industry; the problems experienced by the State's farmers, including the inability to obtain credit for funds to cover start-up costs, are of sufficient magnitude that only the implementation of emergency measures to provide immediate relief and assistance to the agricultural sector will enable the State's farming community to weather the current recession; it is in the public interest to establish a special economic recovery fund to assist the State's agricultural sector not only because of the many unique aspects of this industry which warrant special consideration in the State's overall economic recovery efforts but also because any additional loss of farmland and open space would irreversibly lower the quality of life in the State.
3. (New section) As used in this act:
"Agricultural product" means any edible food crop intended for human consumption, or any marketable horticultural or forestry product, grown on a farm located within this State;
"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 Department of Agriculture;
"Farmer" means a person owning or operating a farm which meets the eligibility criteria for differential property taxation pursuant to the provisions of the "Farmland Assessment Act of 1964," P.L. 1964, c. 48 (C.54:4-23.1 et seq.) and whose primary source of income is farming;
"Fixed assets" means any real property, machinery or equipment, or any interest therein;
"Participating bank" means a bank as defined pursuant to section 1 of P.L.1948, c.67 (C.17:9A-1) and deemed eligible by the authority for participation in the program;
"Program" means the "New Jersey Agricultural Business Assistance Program" to be established by the authority pursuant to section 4 of this act;
"Working capital" means cash, credit and other liquid capital assets other than fixed assets.
4. (New section) The authority shall, in consultation with the department, establish the "New Jersey Agricultural Business Assistance Program" to assist farmers in maintaining and improving the production of agricultural products in this State by providing direct loans, lines of credit and credit guarantees to farmers. The authority shall, in consultation with the department, administer the program under guidelines which take into account the special financial needs of farmers in this State. The activities of the program shall be deemed to be supplementary to, and not in lieu of, the powers of the authority prescribed by law.
5. (New section) a. In order to effectuate the purposes of the program, the authority shall establish and maintain a special, non-lapsing revolving fund to be known as the "New Jersey Agricultural Business Assistance Fund," hereinafter the "assistance fund," 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, based upon the response to the program by farmers and participating banks; (2) any moneys that shall be received by the authority from the repayment of the moneys in the assistance fund used to provide direct loans or revolving credit lines pursuant to this 1993 amendatory and supplementary act 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 fund established pursuant to this section for:
(1) funding grants, in amounts to be determined by the authority in consultation with the department, to assist eligible farmers;
(2) funding direct loans or revolving lines of credit agreements for fixed asset needs and working capital, including the refinancing of existing farm debt, to assist eligible farmers in the production of agricultural products in this State, and guaranteeing up to 25% of the loans or lines of credit provided by participating banks, in accordance with section 7 of this 1993 amendatory and supplementary act;
(3) making payments in fulfillment of the terms of any direct loans, revolving lines of credit agreements, or guarantee agreements, entered into pursuant to section 7 of this 1993 amendatory and supplementary act; and
(4) defraying the administrative costs of the authority in carrying out the purposes and provisions of this 1993 amendatory and supplementary act.
c. The portion of the direct loans or lines of credit provided by participating banks may be guaranteed by the authority pursuant to section 7 of this 1993 amendatory and supplementary act only if the farmer has qualified therefor by demonstrating to the satisfaction of the authority that the funds are needed to insure the future viability of his farming operation.
d. The maximum amount and term of a loan, line of credit or guarantee made pursuant to this 1993 amendatory and supplementary act 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, line of credit or guarantee agreement entered into pursuant to this 1993 amendatory and supplementary act.
7. (New section) The authority shall enter into agreements with participating banks to use the moneys from the assistance fund to provide up to 25% of the direct loans or revolving lines of credit for fixed asset needs and working capital of eligible farmers. The agreements shall further provide that the balance of the loans or lines of credit for financing the fixed asset needs and working capital of eligible farmers shall come from participating banks. The authority may also use moneys from the assistance fund to guarantee up to 25% of the portion of the loans or lines of credit 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, establish and extend lines of credit, guarantee loans and 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 this 1993 amendatory and supplementary act. The report shall include, but not be limited to, a description of the demand for the program from eligible farmers and participating banks, the efforts made by the authority to promote the program, the total amount of loans, lines of credit or guarantees issued by the authority pursuant to the program and an assessment of the effectiveness of the program in meeting the goals of this 1993 amendatory and supplementary act. 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 this 1993 amendatory and supplementary act including, but not limited to, the making of loans, extending of credit and the issuance of guarantees pursuant to this 1993 amendatory and supplementary act.
10. Section 3 of P.L.1974, c.80 (C.34:1B-3) is amended to read as follows:
3. As used in this act, unless a different meaning clearly appears from the context:
a. "Authority" means the New Jersey Economic Development Authority, created by section 4 of this act.
b. "Bonds" means bonds or other obligations issued by the authority pursuant to this act or "Economic Recovery Bonds or Notes" issued pursuant to P.L.1992, c.16 (C.34:1B-7.10 et al.).
c. "Cost" means the cost of the acquisition, construction, reconstruction, repair, alteration, improvement and extension of any building, structure, facility including water transmission facilities, or other improvement; the cost of machinery and equipment; the cost of acquisition, construction, reconstruction, repair, alteration, improvement and extension of energy saving improvements or pollution control devices, equipment or facilities; the cost of lands, rights-in-lands, easements, privileges, agreements, franchises, utility extensions, disposal facilities, access roads and site development deemed by the authority to be necessary or useful and convenient for any project or in connection therewith; discount on bonds; cost of issuance of bonds; engineering and inspection costs; costs of financial, legal, professional and other estimates and advice; organization, administrative, insurance, operating and other expenses of the authority or any person prior to and during any acquisition or construction, and all such expenses as may be necessary or incident to the financing, acquisition, construction or completion of any project or part thereof, and also such provision for reserves for payment or security of principal of or interest on bonds during or after such acquisition or construction as the authority may determine.
d. "County" means any county of any class.
e. "Development property" means any real or personal property, interest therein, improvements thereon, appurtenances thereto and air or other rights in connection therewith, including land, buildings, plants, structures, systems, works, machinery and equipment acquired or to be acquired by purchase, gift or otherwise by the authority within an urban growth zone.
f. "Person" means any person, including individuals, firms, partnerships, associations, societies, trusts, public or private corporations, or other legal entities, including public or governmental bodies, as well as natural persons. "Person" shall include the plural as well as the singular.
g. "Pollution control project" means any device, equipment, improvement, structure or facility, or any land and any building, structure, facility or other improvement thereon, or any combination thereof, whether or not in existence or under construction, or the refinancing thereof in order to facilitate improvements or additions thereto or upgrading thereof, and all real and personal property deemed necessary thereto, having to do with or the end purpose of which is the control, abatement or prevention of land, sewer, water, air, noise or general environmental pollution, including, but not limited to, any air pollution control facility, noise abatement facility, water management facility, thermal pollution control facility, radiation contamination control facility, wastewater collection system, wastewater treatment works, sewage treatment works system, sewage treatment system or solid waste disposal facility or site; provided that the authority shall have received from the Commissioner of the State Department of Environmental Protection or his duly authorized representative a certificate stating the opinion that, based upon information, facts and circumstances available to the State Department of Environmental Protection and any other pertinent data, (1) said pollution control facilities do not conflict with, overlap or duplicate any other planned or existing pollution control facilities undertaken or planned by another public agency or authority within any political subdivision, and (2) that such facilities, as designed, will be a pollution control project as defined in this act and are in furtherance of the purpose of abating or controlling pollution.
h. "Project" means: (1)(a) acquisition, construction, reconstruction, repair, alteration, improvement and extension of any building, structure, facility, including water transmission facilities or other improvement, whether or not in existence or under construction, (b) purchase and installation of equipment and machinery, (c) acquisition and improvement of real estate and the extension or provision of utilities, access roads and other appurtenant facilities; and (2)(a) the acquisition, financing, or refinancing of inventory, raw materials, supplies, work in process, or stock in trade, or (b) the financing, refinancing or consolidation of secured or unsecured debt, borrowings, or obligations, or (c) the provision of financing for any other expense incurred in the ordinary course of business; all of which are to be used or occupied by any person in any enterprise promoting employment, either for the manufacturing, processing or assembly of materials or products, or for research or office purposes, including, but not limited to, medical and other professional facilities, or for industrial, recreational, hotel or motel facilities, public utility and warehousing, or for commercial and service purposes, including, but not limited to, retail outlets, retail shopping centers, restaurant and retail food outlets, and any and all other employment promoting enterprises, including, but not limited to, motion picture and television studios and facilities and commercial fishing facilities, commercial facilities for recreational fishermen, fishing vessels, aquaculture facilities and marketing facilities for fish and fish products, or for agricultural purposes, and (d) acquisition of an equity interest in, including capital stock of, any corporation; or any combination of the above, which the authority determines will: (i) tend to maintain or provide gainful employment opportunities within and for the people of the State, or (ii) aid, assist and encourage the economic development or redevelopment of any political subdivision of the State,
or (iii) maintain or increase the tax base of the State or of any political subdivision of the State, or (iv) maintain or diversify and expand employment promoting enterprises within the State; and (3) the cost of acquisition, construction, reconstruction, repair, alteration, improvement and extension of an energy saving improvement or pollution control project which the authority determines will tend to reduce the consumption in a building devoted to industrial or commercial purposes, or in an office building, of nonrenewable sources of energy or to reduce, abate or prevent environmental pollution within the State; and (4) the acquisition, construction, reconstruction, repair, alteration, improvement, extension, development, financing or refinancing of infrastructure and transportation facilities or improvements related to economic development and of cultural, recreational and tourism facilities or improvements related to economic development and of capital facilities for primary and secondary schools and of mixed use projects consisting of housing and commercial development. Project may also include: (i) reimbursement to any person for costs in connection with any project, or the refinancing of any project or portion thereof, if determined by the authority as necessary and in the public interest to maintain employment and the tax base of any political subdivision and will facilitate improvements thereto or the completion thereof, and (ii) development property and any construction, reconstruction, improvement, alteration, equipment or maintenance or repair, or planning and designing in connection therewith.
i. "Revenues" means receipts, fees, rentals or other payments to be received on account of lease, mortgage, conditional sale, or sale, and payments and any other income derived from the lease, sale or other disposition of a project, moneys in such reserve and insurance funds or accounts or other funds and accounts, and income from the investment thereof, established in connection with the issuance of bonds or notes for a project or projects, and fees, charges or other moneys to be received by the authority in respect of projects and contracts with persons.
j. "Resolution" means any resolution adopted or trust agreement executed by the authority, pursuant to which bonds of the authority are authorized to be issued.
k. "Energy saving improvement" means the construction, purchase and installation in a building devoted to industrial or commercial purposes of any of the following, designed to reduce the amount of energy from nonrenewable sources needed for heating and cooling that building: insulation, replacement burners, replacement high efficiency heating and air conditioning units, including modular boilers and furnaces, water heaters, central air conditioners with or without heat recovery to make hot water for industrial or commercial purposes or in office buildings, and any solar heating or cooling system improvement, including any system which captures
solar radiation to heat a fluid which passes over or through the collector element of that system and then transfers that fluid to a point within the system where the heat is withdrawn from the fluid for direct usage or storage. These systems shall include, but not necessarily be limited to, systems incorporating flat plate, evacuated tube or focusing solar collectors.
The foregoing list shall not be construed to be exhaustive, and shall not serve to exclude other improvements consistent with the legislative intent of this amendatory act.
l. "Urban growth zone" means any area within a municipality receiving State aid pursuant to the provisions of P.L.1978, c.14 (C.52:27D-178 et seq.) or a municipality certified by the Commissioner of Community Affairs to qualify under such law in every respect except population, which area has been so designated pursuant to an ordinance of the governing body of such municipality.
(cf: P.L.1992, c.16, s.11)
11. This act shall take effect immediately.
STATEMENT
This bill establishes a "New Jersey Agricultural Business Assistance Program" in the New Jersey Economic Development Authority to promote the growth and expansion of New Jersey's agricultural sector. The program is intended to provide access to funding and credit which might otherwise not be available to farmers by directing the authority to make direct loans and grants, to extend revolving lines of credit and to give credit guarantees, in conjunction with a consortium of participating banks, to farmers for fixed asset needs and working capital.
The program would be administered by the authority in consultation with the Department of Agriculture, to take into account the special financial needs of the agricultural sector in the State.
The bill establishes a special, non-lapsing revolving fund, the "New Jersey Agricultural Business Assistance Fund" (the assistance fund), 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 farmers and participating banks. The assistance fund 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 fund through a public/private partnership between the Economic Development Authority and participating banks whereby up to 25% of the loan or revolving credit needed for fixed assets and working capital of eligible farmers would be provided by the fund with the balance of the loan or revolving credit to be provided by participating banks.
In order to provide additional incentive for participation by banks in this program to assist farmers in New Jersey, the bill also authorizes the authority to use the moneys in the agricultural assistance fund to guarantee up to 25% of the portion of the loan or revolving credit line provided by participating banks.
Rules and regulations to administer the program would be adopted jointly by the authority and the Department of Agriculture.
The bill requires the authority, in consultation with the department, to report back to the Governor and the Legislature within a reasonable time after the end of 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.
It is the intent of this legislation to provide emergency assistance to the agricultural sector in this State which is facing a financial crisis due to the ongoing recessionary economy.
The "New Jersey Agricultural Business Assistance Act."