Bill Text: NJ S3749 | 2022-2023 | Regular Session | Introduced
Bill Title: Establishes loan program in EDA to assist businesses owned by individuals with disabilities; appropriates $5 million.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2023-03-30 - Introduced in the Senate, Referred to Senate Economic Growth Committee [S3749 Detail]
Download: New_Jersey-2022-S3749-Introduced.html
Sponsored by:
Senator JOSEPH PENNACCHIO
District 26 (Essex, Morris and Passaic)
Senator NILSA I. CRUZ-PEREZ
District 5 (Camden and Gloucester)
SYNOPSIS
Establishes loan program in EDA to assist businesses owned by individuals with disabilities; appropriates $5 million.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain businesses owned by individuals with disabilities and supplementing Title 34 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Authority" means the New Jersey Economic Development Authority, established by section 4 of P.L.1974, c.80 (C.34:1B-4).
"Individual with a disability" means a person who has a physical or mental impairment that substantially limits one or more major life activities.
"Loan program" means the program established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Qualified business" means a business entity that is owned or operated by an individual with a disability, is located in the State of New Jersey, and performs the majority of its operations within the State.
"Revolving loan fund" means the fund established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
2. a. The authority shall establish and administer a loan program to provide qualified businesses with funding for operational or capital expenses, or both, to establish or continue business operations.
b. To qualify for the loan program, a qualified business shall demonstrate to the authority that:
(1) the qualified business is, or will become newly engaged, in a viable trade or business;
(2) the qualified business employs or plans to employ at least five full-time employees during every calendar month of the 24-month period following the date of application for the loan program, with at least 50 percent of those employees being residents in the State; and
(3) the qualified business is owned or operated by an individual, or individuals, with a disability.
c. A qualified business that seeks assistance under the loan program shall submit an application to the authority, in a form and manner prescribed by the authority. In addition to any other information that the authority may deem appropriate, the application shall require the qualified business applicant to submit:
(1) information demonstrating that the qualified business meets the eligibility requirements set forth in subsection b. of this section; and
(2) an outline of the anticipated use of loan proceeds.
d. (1) The authority may approve applications for the loan program on a rolling basis, subject to the availability of funds in the revolving loan fund established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill). Upon approval of an application, the authority shall provide low-interest loans to the qualified business.
(2) In addition to any other terms and conditions that the authority may deem appropriate, each loan issued under the loan program may include provisions for the forgiveness of the loan, in whole or in part, within two years of loan fund disbursement, if the qualified business notifies the authority, in accordance with subsection e. of this section, that, after a bona-fide effort, the qualified business no longer exists because the trade or business is no longer viable. Nothing contained in this section shall be construed to provide for compulsory loan forgiveness by the authority, and no loan shall be forgiven in the event of fraud or mismanagement of funds.
(3) Each loan issued under the program shall:
(a) be issued for a term not to exceed six years, with payments not commencing until one year after the loan's approval;
(b) bear interest at rates not more than three percent for qualified businesses; and
(c) provide more flexible repayment terms than are customarily made available through conventional business loans issued by private lenders.
e. A qualified business that receives assistance under the loan program shall submit an annual report to the authority until such time as the full balance of the loan has been repaid to the authority. The annual report shall be submitted in a form and manner prescribed by the authority. At a minimum, the annual report shall include information outlining the expenses supported by the loan, describing bona fide efforts to ensure the viability of the business, and assessing the performance of the qualified business, including whether the business still exists.
3. a. The authority shall establish and maintain a non-lapsing revolving fund which shall serve as the repository of all monies used to support the loan program.
b. All loans provided under section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be issued from monies held in the revolving loan fund. All monies received by the authority from the repayment of a loan provided under section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be deposited into the revolving loan fund.
c. Any interest collected from loans provided under section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) may be used by the authority to offset the costs of the administration of the loan program or shall otherwise be deposited in the revolving loan fund.
4. a. There is appropriated the sum of $5,000,000 from the General Fund to the New Jersey Economic Development Authority for deposit into the revolving loan fund established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. In addition to the amounts appropriated pursuant to subsection a. of this section, the Legislature may appropriate such additional funds as may be necessary for the implementation of P.L. , c. (C. ) (pending before the Legislature as this bill). The New Jersey Economic Development Authority may also utilize other such funds as are available for implementation of P.L. , c. (C. ) (pending before the Legislature as this bill).
5. Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) or any other law to the contrary, the authority may adopt, immediately upon filing with the Office of Administrative Law and no later than the 90th day after the effective date of this act, such rules and regulations as the authority deems necessary to implement the provisions of this act, which regulations shall be effective for a period not to exceed 12 months. The regulations shall, at a minimum, set forth the requirements for application submissions, the criteria for application selections, and the permitted uses of loan proceeds. The regulations shall thereafter be amended, adopted, or readopted by the authority in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
6. This act shall take effect on the first day of the seventh month following enactment.
STATEMENT
This bill requires the New Jersey Economic Development Authority (EDA) to establish a loan program to provide businesses owned or operated by individuals with a disability with funding for operational or capital expenses, or both, to establish or continue business operations.
Loan Program Qualifications
The loan program provides low-interest loans to qualified businesses that demonstrate to the EDA that:
1) the qualified business is, or will become newly engaged, in a viable trade or business;
2) the qualified business employs or plans to employ at least five full-time employees during every calendar month of the 24-month period following the date of application for the loan program and at least 50 percent of the employees are New Jersey residents; and
3) the qualified business is owned or operated by an individual with a disability.
Application Criteria
A qualified business that seeks assistance under the loan program is required to submit an application to the EDA, in a form and manner prescribed by the EDA. In addition to any other information that the EDA may deem appropriate, the application is required to request an applicant to submit information demonstrating that the applicant meets the eligibility requirements and an outline of the anticipated use of loan proceeds.
Under the bill, the EDA is required to approve applications for the loan program on a rolling basis, subject to the availability of funds.
Loan Requirements
In addition to any other terms and conditions that the EDA may deem appropriate, each loan issued under the loan program may include provisions for the forgiveness of the loan, in whole or in part, within two years of loan fund disbursement, if the qualified business notifies the EDA that, after a bona-fide effort, the qualified business no longer exists because the trade or business is no longer viable. This provision of the bill should not be construed to provide for compulsory loan forgiveness by the EDA, and no loan will be forgiven in the event of fraud or mismanagement of funds.
Each loan issued under the program is required to:
1) be issued for a term not to exceed six years, with payments not commencing until one year after the loan's approval;
2) bear interest at rates not more than three percent for qualified businesses; and
3) provide more flexible repayment terms than are customarily made available through conventional business loans issued by private lenders.
Any qualified business that
receives assistance under the loan program is required to submit an annual
report to the EDA until such time as the full balance of the loan has been
repaid to the EDA. At a minimum, the annual report is required to include
information outlining the expenses supported by the loan, describing bona fide
efforts to ensure the viability of the business, and assessing the performance
of the qualified business, including whether the business still exists.
Loan Fund and Appropriation
Finally, the bill appropriates $5 million from the General Fund to the EDA to support the operations of the loan program. These monies are to be deposited into a non-lapsing revolving loan fund which the EDA is required to administer for the purposes of the loan program. Any interest collected from loans provided by the loan program may be used by the EDA to offset the costs of the administration of the loan program, or otherwise are required to be deposited in the fund.
