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S3052CV

S3052CV

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Published by: Governor Chris Christie on Jan 09, 2012
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01/09/2012

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January 9, 2012
SENATE BILL NO. 3052
To the Senate:The Legislature has seen fit to unilaterally pass “jobs”bills that are duplicative of existing efforts by myAdministration. Accordingly, pursuant to Article V, Section I,Paragraph 14 of the New Jersey Constitution, I am returningSenate Bill No. 3052 with my recommendations forreconsideration.This bill would require the Economic Development Authorityto establish a Small Business Loan Program to provide loans toeligible small businesses. However, this proposed program wouldduplicate the already existing efforts of the Authority.Through various programs, including the Small Business Fund, theMain Street Business Assistance Program, the Statewide Loan PoolProgram, and the New Jersey Business Growth Fund, the Authorityprovides financing options to assist small businesses. Over thelast three years, these programs have provided approximately $60million in public financing, which was leveraged for over $250million in combined public/private financing, to 231 projectswithin the State. The vast majority of those loans were to NewJersey small businesses.However, despite the fact that this legislation isunnecessary and duplicative of the Authority’s efforts, I amnevertheless pleased with the Authority’s current programs andbelieve that the State would benefit by those efforts beingmemorialized via a permanent statutory enactment. Such anenactment will assist in my on-going efforts to ensure that NewJersey remains a friendly environment for small business foryears to come.
 
 
2I also note that in addition to the duplicative nature ofthis legislation, I am highly concerned that it provides forstatutorily mandated interest rates of two percent or less forloans from its proposed Small Business Loan Program.Statutorily mandated interest rates that do not account for oraccommodate fluctuating market conditions are not sustainable.Similarly, I am concerned with the other strict criteria –including a maximum number of employees, maximum financingamounts, maximum loan amounts, and employee hiring requirementsthat this bill mandates. I believe that the reason theAuthority has continued to thrive in its mission of providingincentives and financing options to businesses is due to itsflexibility to respond to changing market conditions. TheAuthority can accommodate the evolving needs of the businesscommunity in a manner far swifter than legislative enactments.Therefore, I am also returning this legislation withrecommendations that eligibility criteria and interest rates beleft to the Authority to administratively determine, in order torespond to the ever-changing marketplace.Accordingly, I herewith return Senate Bill No. 3052 andrecommend that it be amended as follows:Page 2, Section 1, Line 14: Delete “(1)”Page 2, Section 1, Lines 15-16: Delete “; (2) is organizedfor profit with a place ofbusiness located in thisState; (3)” and insert “,”Page 2, Section 1, Line 17: Delete “; (4) employs lessthan 100 full-timeemployees; (5) is not” andinsert “, and whichsatisfies other criteriathat may be established bythe Authority in itsdiscretion.”Page 2, Section 1, Lines 18-20: Delete in their entiretyPage 2, Section 2, Line 22: Delete “establish” andinsert “maintain”
 
 
3Page 2, Section 2, Lines 26-27: Delete “, provided that thetotal amount of all loansunder the program to anysuch business shall notexceed $250,000”Page 2, Section 2, Line 34: Delete “, which agreementshall provide that thebusiness” and insert “.”Page 2, Section 2, Lines 35-39: Delete in their entiretyPage 2, Section 2, Line 47: Delete “(1)”Page 3, Section 2, Lines 1-2: Delete “no more than twopercent” and insert “ratesand terms deemedappropriate by theAuthority”Page 3, Section 2, Lines 7-37: Delete in their entiretyand insert “g. TheAuthority may, in itsdiscretion, require aneligible small businessthat receives a smallbusiness loan under theprogram administeredpursuant to P.L. , c. (C.) (pending before theLegislature as this bill)to submit an auditedfinancial statement to theAuthority in order toensure the business’scontinued viability.”Page 3, Section 2, Lines 38-48: Delete in their entiretyand insert “h. TheAuthority may, eitherthrough the adoption ofrules and regulations, orthrough the terms of thesmall business loanagreement made pursuant tosubsection c. of thissection, establish termsgoverning the incidence ofdefault by an eligiblesmall business thatreceives a small businessloan under the programadministered pursuant toP.L. , c. (C. ) (pendingbefore the Legislature asthis bill).”Page 4, Section 2, Lines 1-3: Delete in their entiretyand insert “i. Indetermining whether toprovide a loan to aneligible small business,the Authority shallconsider, along with othercriteria that the Authorityin its discretion deemsappropriate, whether thebusiness commits toincreasing its full-time

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