Bill Text: NJ S2583 | 2022-2023 | Regular Session | Introduced
Bill Title: Establishes Veteran-Owned Business Contract Financing Loan Program in EDA to help certain veteran-owned businesses perform public contracts; appropriates $5 million.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2022-11-03 - Referred to Senate Budget and Appropriations Committee [S2583 Detail]
Download: New_Jersey-2022-S2583-Introduced.html
Sponsored by:
Senator JOSEPH P. CRYAN
District 20 (Union)
Senator TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Establishes Veteran-Owned Business Contract Financing Loan Program in EDA to help certain veteran-owned businesses perform public contracts; appropriates $5 million.
CURRENT VERSION OF TEXT
As introduced.
An Act establishing the Veteran-Owned Business Contract Financing Loan Program, supplementing P.L.1974, c.180 (C.34:1B-1 et seq.), and making an appropriation.
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).
"Contract" means a contract or agreement for the performance of work or the furnishing or hiring of services, materials, or supplies, as distinguished from a contract of employment.
"Contracting agency" means any principal department of the State, and any division, board, bureau, office, commission, or other instrumentality within or created by such department, any independent State authority, commission, instrumentality, or agency, any State college or university, any county college, and any local unit.
"Disabled veteran" means any veteran who is certified by the United States Department of Veterans Affairs, or its successor, as having any degree of service-connected disability.
"Loan program" or "program" means the "Veteran-Owned Business Contract Financing Loan Program," established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Local unit" means any contracting unit, as defined pursuant to section 2 of P.L.1971, c.198 (C.40A:11-2), and any board of education, as defined pursuant to N.J.S.18A:18A-2.
"Revolving loan fund" means the "Veteran-Owned Business Contract Financing Loan Fund," established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Service-disabled veteran-owned business" means: (1) any business that has its principal place of business in the State, is independently owned and operated, and at least 51 percent of the business is owned and controlled by persons who are disabled veterans; and (2) any business that has its principal place of business in this State and has been officially verified by the United States Department of Veterans Affairs, or its successor, as a service-disabled veteran-owned business for the purposes of contracts issued pursuant to federal law.
"Veteran" means any resident of this State, now or hereafter, who has been discharged honorably or under general honorable conditions and who served in any branch of the Armed Forces of the United States, a Reserve component thereof, or the National Guard, and shall include a disabled veteran.
"Veteran-owned business" means any business that has its principal place of business in the State, is independently owned and operated, and at least 51 percent of the business is owned and controlled by persons who are veterans.
2. a. The authority shall establish and administer the "Veteran-Owned Business Contract Financing Loan Program" to assist veteran-owned businesses and service-disabled veteran-owned businesses in the performance of contracts issued by contracting agencies.
b. To qualify for the loan program, a business shall demonstrate to the authority that the business:
(1) qualifies as a veteran-owned business or service-disabled veteran-owned business;
(2) has secured a contract from a contracting agency before the date of application;
(3) lacks sufficient financial resources to defray any expenses needed to perform the contract; and
(4) meets any other eligibility requirements that the authority may deem appropriate.
c. A 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 applicant to submit information:
(1) demonstrating that the business meets the eligibility requirements set forth in subsection b. of this section; and
(2) outlining the anticipated use of loan proceeds.
d. The authority may approve applications for the loan program on a rolling basis, subject to the availability of funds in the revolving loan fund. In approving applications, the authority shall give preference to applications submitted by service-disabled veteran-owned businesses.
e. Upon approval of an application, the authority shall provide a low-interest loan to the business. In addition to any other terms and conditions that the authority may deem appropriate, each loan issued under the loan program shall:
(1) be issued in an amount not to exceed $500,000;
(2) be secured through the assignment of contract payments from the contracting agency to the authority;
(3) bear interest at lower rates than are customarily made available through conventional business loans issued by private lenders;
(4) be used to support working capital, purchase equipment, and finance any other expenses incurred by the business in the performance of the contract; and
(5) mature no later than the term of the contract, except as otherwise extended by the authority.
f. The authority shall submit an annual report to the Governor and the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), detailing the operations of the loan program, including, but not limited to, the amount of each program loan, the recipient of each program loan, and the repayment rate of all program loans.
3. a. The authority shall establish and maintain a non-lapsing revolving fund, known as the "Veteran-Owned Business Contract Financing Loan 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 program loan shall be deposited into the revolving loan fund.
4. Notwithstanding any provision of 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 commissioner in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).
5. There is appropriated the sum of $5 million from the General Fund to the New Jersey Economic Development Authority for deposit into the "Veteran-Owned Business Contract Financing Loan Fund," established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
6. This act shall take effect immediately.
STATEMENT
This bill establishes the "Veteran-Owned Business Contract Financing Loan Program" (loan program) within the New Jersey Economic Development Authority (EDA) to assist veteran-owned businesses in the performance of public contracts.
Specifically, the loan program would provide low-interest loans to veteran-owned businesses that have secured a public contract but lack the financial resources necessary to perform the contract. Under the bill, the EDA would approve applications for the loan program on a rolling basis, subject to the availability of funds. However, the EDA would give preference to applications submitted by service-disabled veteran-owned businesses.
Under the bill, a program loan may not exceed $500,000 and may only be used to support working capital, purchase equipment, and finance other expenses incurred in the performance of the contract. The bill also requires each program loan to be secured through the assignment of contract payments to the EDA. Additionally, the bill provides that each program loan would mature no later than the term of the public contract, except as otherwise extended by the EDA.
Notably, the bill appropriates $5 million from the General Fund to the EDA to support the operations of the loan program. These monies would be deposited into a non-lapsing revolving loan fund, known as the "Veteran-Owned Business Contract Financing Loan Fund," which the EDA would be required to administer for the purposes of the loan program.
