ASSEMBLY, No. 1432
STATE OF NEW JERSEY
INTRODUCED FEBRUARY 5, 1996
By Assemblymen CORODEMUS, GEIST, Malone, Azzolina, Asselta and Assemblywoman Farragher
An Act authorizing the Commissioner of Commerce and Economic Development to establish a public-private pilot program in the Department of Commerce and Economic Development for regional global export network centers to assist small and medium-sized businesses.
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 "Small Business Global Export Network Centers Act."
2. The Legislature finds and declares that:
a. The advent of the North American Free Trade Agreement (NAFTA), the conclusion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), the integration of the economies of the European Union, the opening of markets in Eastern Europe and former Soviet Union, and the emerging markets of countries in the Asian Pacific, Caribbean Basin, and Latin America, as well as other international trade arrangements present important opportunities to expand exports.
b. International trade is important to the State's economy given the State's ideal location, with its two key strategic ports, its well-developed transportation system, its increased international carrier service at Newark Airport, and the establishment of three Foreign Trade Zones. Exports have a material impact in bringing about economic benefits and growth, as highlighted in a recent United States Trade Representative's Office study showing that export-related jobs in both manufacturing and services paid on average 17% more than their domestic counterparts. Other statistics show that total exports grew in the State by 32% from 1989 to 1992, compared to 23% nationwide and growth in the State's exports grew faster than growth in the domestic State economy.
c. The New Jersey Department of Commerce and Economic Development's Division of International Trade has an aggressive program of assisting export-potential firms in becoming exporters despite operating on a very small staff and budget; however, many small and medium-sized businesses are not able to take advantage of international trade opportunities due to a lack of knowledge or experience in exporting.
d. It is of particular importance to provide export assistance to small and medium-sized businesses since these businesses are the key job creators in the State and in many cases, these smaller businesses lack adequate resources to learn how to export. The most effective method of providing training to small and medium-sized businesses on exporting is by creating and promoting a network of centers throughout the State to provide the assistance needed by small and medium-sized businesses to identify foreign markets and learn about exporting. Experience in other states, such as Illinois, Massachusetts and Texas, has shown that export network centers provide small and medium-sized businesses with one-on-one counseling and other customized service oriented assistance with little public cost.
e. It is, therefore, in the public interest to authorize the Commissioner of Commerce and Economic Development to act through the Division of International Trade, or through a nonprofit entity designated by the department which may include a nonprofit corporation organized to implement the recommendations of the economic master plan commission, to establish a pilot program to supplement the work of the Division of International Trade whereby the State will be the catalyst in forming, overseeing and coordinating the development of information-sharing network centers, to help small and medium-sized businesses to acquire the knowledge necessary to ensure their competitiveness through exporting. The Department of Commerce and Economic Development shall, to the greatest extent possible, seek the participation of local business groups and organizations, within each network region, that already have trade assistance experience in order to leverage the maximum benefit from available resources through shared office space, equipment, and "on-loan" professionals in order to implement the network functions at a minimum cost to the State.
3. As used in this act:
"Authority" means the New Jersey Economic Development Authority established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4);
"Centers" means Small Business Global Export Network Centers authorized by the commissioner to participate in the program as provided in section 5 of this act;
"Commissioner" means the Commissioner of Commerce and Economic Development;
"Division" means the Division of International Trade within the Department of Commerce and Economic Development; and
"Economic master plan commission" means the New Jersey Economic Master Plan Commission established by Executive Order No. 1 issued by the Governor on January 18, 1994.
"Small or medium-sized business" means a business which has its principal place of business in this State and is independently owned and operated and which is of a size and type defined by the commissioner.
4. a. Within 90 days of the effective date of this act, the commissioner is authorized to designate sites for three centers as part of a program authorized under the provisions of this act. In selecting the sites for the centers, the commissioner shall strive to allocate the three sites in an equitable manner throughout the various regions of the State.
b. The division is authorized, after examining export trade development programs in other states and in consultation with the New Jersey Small Business Development Centers, to act through the division, or through a nonprofit entity designated by the department which may include a nonprofit corporation organized to implement the recommendations of the economic master plan commission, to promote the development of the centers to collect, develop, maintain, distribute and publish information relating to exporting for the State's small and medium-sized businesses and to provide direct services to assist small and medium-sized businesses in exporting their goods and services. The services to be provided by the centers shall include, but not be limited to, providing export management advice, assisting with the adoption of export techniques, and developing strategies to enable businesses to meet their exporting objectives, including training that is focused on providing small and medium-sized businesses the opportunity to participate in trade shows and trade missions sponsored by the division. The centers may be divided by industry type or business sector if the division sees the need and receives adequate financial or other type of assistance from contributing businesses.
5. The commissioner is authorized to act through the division, or through a nonprofit entity designated by the department pursuant to section 4 of this act, to initiate contacts with existing entities in the State including, but not limited to, community colleges, the New Jersey Small Business Development Centers, research centers associated with private industry or institutions of higher education in this State, appropriate agencies, authorities, departments, divisions, commissions, boards or bureaus of the State or federal government, or any other appropriate nonprofit or for-profit entity, for the purpose of arranging with an appropriate entity or entities to operate the three centers, and to provide free or shared office space, personnel, facilities and resources therefor, including computerized electronic equipment to allow access to export trade leads that become available to the division. The arrangements shall provide for the entity or entities to continue operating the centers provided that such entity or entities demonstrate that they have professional staff with expertise and skills in export operations management and other international business fields. The arrangements entered into pursuant to this section shall specify the terms and conditions under which State guarantees and direct loans may be made available from the authority in accordance with eligibility criteria to be developed by the authority, in order to provide financial incentives for the initial development of the centers. The commissioner shall encourage global export network centers to support their activities with private industry membership fees. The commissioner shall work with each center to develop and implement a schedule of fees to be paid by the small or medium-sized businesses served by the centers. The fees shall be established to provide sufficient funding to permit the centers to operate without State loans or guarantees.
6. Within 24 months of the effective date of this act, the commissioner shall, after consultation with the authority, report to the Governor and the Legislature on the outcome of the small business global export network centers program authorized under this act, including, but not limited to, whether the centers are self-supporting entities, and if not, what specific steps should be taken to enable the centers to continue operating without the need for further State assistance, the cost of the program, the number and type of businesses assisted by the program, and any recommendations regarding the improvement and expansion of the centers in the State.
7. The commissioner shall, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt any rules and regulations necessary to effectuate the purposes of this act.
8. This act shall take effect on the 90th day following enactment and shall expire on the 90th day after the submission of the commissioner's report and recommendations to the Governor and Legislature pursuant to section 6 of this act.
STATEMENT
This bill authorizes the Commissioner of Commerce and Economic Development to establish a pilot program to help small and medium-sized businesses engage in exporting in order to compete more effectively in the international marketplace. The bill authorizes the department to establish small business export network centers which will operate throughout the State to respond to the needs of small and medium-sized businesses.
The Commissioner of Commerce and Economic Development is authorized to designate three sites for the location of the small business export network centers. For the purposes of the pilot program, the commissioner shall strive to allocate the three sites in an equitable manner throughout the various regions of the State. The bill authorizes the commissioner to consider export development programs in other states and to consult with the New Jersey Small Business Development Centers (NJSBDCs), prior to acting through the division or a nonprofit entity designated by the department to promote the development of export network centers in this State.
The bill authorizes the commissioner to act through the division or appropriate nonprofit entity to initiate contacts with various entities in the State, including but not limited to, community colleges and other institutions of higher learning, the NJSBDCs and private sector research centers to arrange for an appropriate entity or entities to operate the centers and to provide the office space, personnel, facilities and resources necessary for the operation of the centers.
The arrangements to be entered into shall specify under what terms and conditions State guarantees and direct loans may be made available to assist with the initial development of these centers. The bill further provides that the commissioner shall encourage the export network centers to support their activities with private industry membership fees and that the commissioner shall work with the centers to develop sufficient fee-based funding to enable the centers to operate without State loans or guarantees.
Within two years of the effective date of this act, the commissioner is required to report to the Governor and the Legislature on the outcome of the program and shall include any recommendations for improving and expanding the program in the State. Ninety days after the submission of the report, the law enacted by this bill shall expire.
Authorizes Commissioner of Commerce and Economic Development to establish a pilot program to promote exports of small and medium-sized businesses.