ASSEMBLY, No. 3965
STATE OF NEW JERSEY
INTRODUCED MAY 1, 2020
Assemblyman WILLIAM F. MOEN, JR.
District 5 (Camden and Gloucester)
Assemblywoman CAROL A. MURPHY
District 7 (Burlington)
Assemblyman RAJ MUKHERJI
District 33 (Hudson)
Senator LINDA R. GREENSTEIN
District 14 (Mercer and Middlesex)
Senator NILSA I. CRUZ-PEREZ
District 5 (Camden and Gloucester)
Assemblymen Spearman, DeAngelo, Senators Bateman and Turner
Expands existing EDA loan program to include certain small producers and retailers of alcoholic beverages.
CURRENT VERSION OF TEXT
As reported by the Assembly Appropriations Committee on May 4, 2020, with amendments.
An Act concerning loans to small producers 1and retailers1 of alcoholic beverages and amending P.L.2019, c.34.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.2019, c.34 (C.34:1B-266) is amended to read as follows:
1. As used in P.L.2019, c.34 (C.34:1B-266 et seq.):
"Authority" shall have the same meaning as provided in section 3 of P.L.1974, c.80 (C.34:1B-3).
"Department" means the Department of Agriculture established pursuant to R.S.4:1-1.
“Division” means the Division of Alcoholic Beverage Control in the Department of Law and Public Safety.
“Pandemic” means an outbreak of a disease of unusual virulence characterized by very widespread growth or extent, which has a significant impact on economic activity within this State, resulting in the Governor declaring a public health emergency, pursuant to section 3 of P.L.2005, c.222 (C.26:13-3), and a state of emergency, pursuant to P.L.1942, c.251 (C.App.A:9-33 et seq.), within this State.
“Qualified small producer 1or retailer1 capital expense” means amounts paid by a small producer 1or retailer1 of alcoholic beverages for the purchase of 1[items of]1 plant, machinery, equipment, or 1[any]1 other 1associated1 item, for 1the purpose of an expansion of the business model of the small producer or retailer of alcoholic beverages to alleviate the financial burdens or economic hardship imposed by a pandemic and1 use by the small producer 1or retailer1 of alcoholic beverages within the State in the manufacture, sale, or both, of alcoholic beverages. For the purposes of this section, “qualified small producer 1or retailer1 capital expense” includes, but shall not be limited to:
a. amounts actually paid by the small producer 1or retailer1 of alcoholic beverages; and
b. amounts promised to be paid under firm purchase contracts actually executed during the tax year; provided, however, that a small producer 1or retailer1 of alcoholic beverages shall not claim a qualified small producer 1or retailer1 capital expense that was claimed by the small producer 1or retailer1 of alcoholic beverages in a prior tax year.
"Qualified vineyard or winery capital expense" means all expenditures made by an eligible vineyard or winery for land acquisition or improvement, infrastructure acquisition or modernization, and the purchase or modernization of machinery and equipment, including:
c. bottling equipment;
d. canopy management machines;
e. capsuling equipment;
i. deer control fencing;
k. fermenters or other recognized fermentation devices;
l. fertilizer and soil amendments;
n. fruit harvesters;
o. fruit plants;
q. irrigation equipment;
r. labeling equipment;
x. pruning equipment;
aa. refrigeration equipment;
dd. small tools;
hh. weeding and spraying equipment;
ii. wine tanks;
jj. wire; and
kk. any other items as approved by the authority in consultation with the department.
“Qualified vineyard or winery capital expense” may include a qualified small producer 1or retailer1 capital expense, defined pursuant to this section, as applicable to a small producer 1or retailer1 of alcoholic beverages.
“Qualified operating expense” means the normal, day-to-day operating expenditures made by an eligible small producer 1or retailer1 of alcoholic beverages, including payroll, rent, utilities, insurance, and marketing expenses and purchases of goods and services. “Qualified operating expense” shall not include any qualified small producer 1or retailer1 capital expense or qualified vineyard or winery capital expense.
“Small producer 1or retailer1 of alcoholic beverages” means 1:
a.1 a business that has been issued, pursuant to R.S.33:1-10, and is operating in compliance with, a limited brewery license, a restricted brewery license, a plenary winery license, a farm winery license, a cidery and meadery license, a limited distillery license, a supplementary limited distillery license, or a craft distillery license 1;or
b. a business having 10 or fewer employees that has been issued, pursuant to R.S.33:1-12, and is operating in compliance with, a Class C license1.
"Vineyard" means agricultural lands located in the State consisting of at least one contiguous acre dedicated to the growing of grapes or other fruit that are used or are intended to be used in the production of wine by a winery as well as any other plants or other improvements located thereon.
"Winery" means a commercial farm where the owner or operator of the commercial farm has been issued and is operating in compliance with a plenary winery license or farm winery license pursuant to R.S.33:1-10.
(cf: P.L.2019, c.34, s.1)
2. Section 2 of P.L.2019, c.34 (C.34:1B-267) is amended to read as follows:
2. a. The New Jersey Economic Development Authority, in consultation with the [Department of Agriculture] department and the division, shall maintain and administer a loan program and application process for the purpose of providing:
(1) loans to eligible vineyards or wineries and eligible small producers 1or retailers1 of alcoholic beverages to pay for qualified small producer 1or retailer1 capital expenses and qualified vineyard or winery capital expenses respectively; and
(2) loans to eligible small producers 1or retailers1 of alcoholic beverages to pay for qualified operating expenses during a pandemic having an interest rate equal to the prime rate or an amount up to three percentage points above the prime rate.
b. A loan to an eligible vineyard [or], winery, or small producer 1or retailer1 of alcoholic beverages authorized under P.L.2019, c.34 (C.34:1B-266 et seq.) shall be made pursuant to a loan agreement with the authority and shall contain any terms and conditions considered appropriate by the authority that are consistent with the purposes of P.L.2019, c.34 (C.34:1B-266 et seq.). The provisions of the loan agreement shall include, but not be limited to, a statement of the proportional shares of ownership in an eligible vineyard [or], winery, or small producer 1or retailer1 of alcoholic beverages, equipment usage and maintenance responsibilities, and loan repayment responsibilities for any loan proceeds received under the loan program.
c. The authority may, in its discretion, require an eligible vineyard [or], winery, or small producer 1or retailer1 of alcoholic beverages that receives a loan authorized pursuant to P.L.2019, c.34 (C.34:1B-266 et seq.) to submit an annual audited financial statement to the authority in order to ensure the continued viability of [all] the operations of the vineyard [or], winery [operations], or small producer 1or retailer1 of alcoholic beverages.
d. The authority may, either through the adoption of rules and regulations, or through the terms of the loan agreement made pursuant to subsection 1[c.] b.1 of this section, establish terms governing the incidence of default by an eligible vineyard [or], winery, or small producer 1or retailer1 of alcoholic beverages that receives a loan under the program administered pursuant to P.L.2019, c.34 (C.34:1B-266 et seq.).
e. The authority may discontinue providing loans, pursuant to paragraph (2) of subsection a. of this section, once the Governor has rescinded a declared public health emergency and state of emergency pertaining to a pandemic.
(cf: P.L.2019, c.34, s.2)
3. Section 3 of P.L.2019, c.34 (C.34:1B-268) is amended to read as follows:
3. The authority, in consultation with the department and the division, may adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as may be necessary to effectuate the purposes of P.L.2019, c.34 (C.34:1B-266 et seq.).
(cf: P.L.2019, c.34, s.3)
4. This act shall take effect immediately.