ASSEMBLY, No. 2686

STATE OF NEW JERSEY

INTRODUCED JANUARY 29, 1997

By Assemblymen GEIST, CARABALLO, Azzolina, Asselta, Gibson, Lance, Wolfe, Assemblywoman Heck, Assemblymen Malone, Romano, Garcia and Holzapfel

An Act to provide incentive grants and loans to assist municipalities and counties in retaining and attracting business and supplementing 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 "Local-State Business Incentive Promotion Act."

    2. As used in this act:

    "Act" means the "Local-State Business Incentive Promotion Act."

    "Applicant" means any county or municipality applying for a development loan or incentive grant pursuant to 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).

    "Business" means a corporation; sole proprietorship; partnership; corporation that has made an election under Subchapter S of Chapter One of Subtitle A of the Internal Revenue Code of 1986, or any other business entity through which income flows as a distributive share to its owners; limited liability company; nonprofit corporation; or any other form of business organization located either within or outside this State.

    "Commissioner" means the Commissioner of Commerce and Economic Development.

    "Department" means the Department of Commerce and Economic Development.

    "Loan" means money loaned to a county or municipality by the authority for the purpose of retaining existing business or attracting new business pursuant to this act.

    "Incentive grant" or "grant" means money provided by the authority to a county or municipality on a matching fund basis for the purpose of retaining existing business or attracting new business. 

    "Program" means the Local-State Business Incentive Promotion Program established pursuant to section 3 of this act.

    "Promotion fund" means the Local-State Business Incentive Promotion Fund established pursuant to section 4 of this act.

    3. a. There is created, in the authority, a "Local-State Business Incentive Promotion Program." The program shall be established by the authority in consultation with the department. The program shall consist of loans and grants which shall be provided to qualified applicants in order to defray the cost of plans to retain existing business or to attract new business within a county or municipality, as the case may be, including, but not limited to, the development of transportation services, parking facilities or other types of investments needed to assist local business retention and attraction efforts, the promotion of environmental, quality of life and public safety projects to make an area more conducive for existing business to expand and to attract new business to an area, and the acquisition of buildings and real property needed to retain businesses or to attract businesses to locate within the area.

    b. In designing and implementing the program, the authority shall enter into agreements with local agencies, businesses and non-profit organizations for matching funds in order to leverage its loans and grants with funds from such entities. The terms and conditions of any agreements for matching funds shall be determined by the authority and subject to the approval of the commissioner.

    4. a. To implement the program, the authority shall establish and maintain a special account designated the "Local-State Business Incentive Promotion Fund," into which shall be deposited moneys to be used by the authority for the purposes specified in this act. Moneys deposited into the promotion fund shall include, but not be limited to:

    (1) such moneys from the "Economic Recovery Fund" established pursuant to section 3 of P.L.1992, c.16 (C.34:1B-7.12), and such other business development fund moneys that the authority determines are available and necessary, in response to the demand for the program, to effectively implement the purposes of this act;

    (2) moneys that shall be received by the authority from the repayment of development loans and interest thereon;

    (3) moneys as may be available to the authority from business development programs administered by other State agencies or authorities;

    (4) appropriations made by the Legislature to effectuate the purposes of this act;

    (5) fees collected from applicants pursuant to subsection c. of this section; and

    (6) such other moneys as may be made available including, but not limited to, funds provided by agreement with private investors to effectuate the purposes of this act.

    b. Moneys in the promotion fund which are determined by the authority not to be needed for current responsibilities of the promotion fund, may be invested by the authority in any direct obligations as to which principal and interest are guaranteed by the United States of America or any other obligation deemed appropriate by the authority.         c. The authority may charge fees in connection with the provision of loans and incentive grants from the promotion fund.

    d. The authority is authorized to disburse moneys in the promotion fund for purposes unrelated to this act if, for a period of at least three years, no moneys are disbursed from the promotion fund for the purposes set forth pursuant to this act.

    5. a. The authority shall use the moneys in the promotion fund to provide loans and incentive grants to applicants determined to be qualified by the authority to participate in the program in accordance with the criteria set forth in this section. Moneys received in repayment of loans shall be deposited in the promotion fund. The maximum amount of each loan from the promotion fund that is provided to each qualified applicant shall be determined in accordance with criteria to be adopted jointly by the authority and department pursuant to section 10 of this act.

    b. In determining the criteria for qualifying applicants for loans and incentive grants, the authority shall consider:

    (1) the need to provide assistance for retaining and attracting businesses and jobs;

    (2) the viability of the plan to retain and attract business submitted by an applicant;

    (3) the level of potential job creation and the longevity of such jobs;

    (4) the conduciveness of the economic environment for the establishment, expansion or relocation of businesses within the applicant’s jurisdiction;

    (5) the geographic representation of all regions of the State, including both urban and rural municipalities; and

    (6) the level of financial and other participation by local economic development agencies, county or municipal government entities, non-profit or for-profit organizations and lending institutions.

    c. The authority shall require applicants for incentive grants to contribute cash from other sources to leverage the amount of moneys received from the promotion fund. Contributions provided from other sources shall be in a ratio of at least $1 from other sources for each $2 from the program. These contributions may come from a public or private source other than the program.

    d. Loans to stimulate the retention or attraction of business in accordance with this act shall be made by the authority pursuant to a loan agreement and may be amortization or term loans, bear interest at less than the market rate, be renewable, be callable, and contain other terms and conditions considered appropriate by the authority that are consistent with the purposes of this act and with rules and regulations jointly adopted by the authority and the department to implement the program.

    e. The authority shall require, as a condition of receiving a grant or loan under the program, that a business which the applicant seeks to retain or attract continue operating at a location in New Jersey for at least 1.5 times the number of years of the term of the grant or loan.

    6. The authority shall have, in addition to the powers set forth in section 5 of P.L.1974, c.80 (C.34:1B-5), the power to enter into written agreements with one or more private investors, or with one or more State agencies or authorities for the purpose of establishing a pool of moneys to be deposited in the promotion fund and to provide moneys to be used exclusively for loans and grants to stimulate the retention or attraction of business pursuant to this act. The pooled moneys provided as loans by the authority from the promotion fund shall be fixed at an interest rate to be determined by the authority and shall be for a term not exceeding one year.

    7. a. The authority, the department and a county or municipality approved for a loan or grant from the program, shall seek to coordinate their efforts and activities, to the greatest extent feasible, to retain or attract businesses in the applicant's jurisdiction.

    b. The authority shall actively seek the advice of county economic development offices in order to improve the effectiveness of the program.

    8. In addition to the duties of the authority required under section 4 of P.L.1974, c.80 (C.34:1B-4), the authority shall prepare a report within two years following the effective date of this act, and not later than September 15 of each third year thereafter, which shall describe the demand for the program, the number of applicants assisted by the program, the efforts made by the authority to promote the program and to establish a pool of funds from private and public sources pursuant to section 6 of this act, the total number of loans and incentive grants and the average amount of such loans and grants provided by the authority and an assessment of the effectiveness of the program in meeting the goals of the 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. If the applicant receiving a grant or loan fails to meet or comply with a condition or requirement set forth in a grant or loan agreement with the authority or in rules and regulations of the authority, the authority may cancel or rescind the agreement or amend the agreement to reduce the amount of the grant or loan or the term of the grant or loan agreement.

    10. 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 act.

    11. This act shall take effect on the 180th day following enactment.

STATEMENT

    This bill establishes the "Local-State Business Incentive Promotion Program" within the New Jersey Economic Development Authority (EDA) in order to assist counties and municipalities with plans to retain existing businesses or attract new businesses. The plans to be submitted by counties and municipalities to the EDA may be eligible for funding with loans or grants from the "Local-State Business Incentive Promotion Fund," administered by the EDA to assist local governments in their efforts to stimulate new business development and retain existing business.

    Such plans could include the development of transportation services, parking facilities or other types of investments needed to assist local business retention and development efforts, the promotion of environmental, quality of life and public safety projects to make an area more conducive for existing business to expand and to attract new business to an area, and the acquisition of buildings and real property needed to retain businesses or to attract businesses to locate within the area.

    The program is intended to complement existing business development programs such as the "Business Employment Incentive Program Act," P.L.1996, c.26 (C.34:1B-124 et seq.) and the "Business Relocation Assistance Act," P.L.1996, c.25 (C.34:1B-112 et seq.).

    The bill directs the EDA to establish the Local-State Business Incentive Promotion Fund to provide loans and incentive grants to counties and municipalities to implement plans to retain existing business and to attract new business. The incentive grants shall be provided by the authority on a matching fund basis with $1 coming from outside sources for every $2 coming from the program.

    The bill requires the EDA to report to the Governor and the Legislature on the effectiveness of the program within two years following the effective date of the bill and every third year thereafter and to recommend legislation to improve the operation of the program. In that regard, the authority and the department shall seek the input of county economic development offices.

Establishes a Local-State Business Incentive Promotion Program within EDA.