COVID-19 - NJ Legislature Bill To Assist Small Businesses Clears Senate
On March 19, 2020, the New Jersey Legislature passed a number of bills intended to ease some of the economic pain caused by COVID-19 and the related State-wide closures and restrictions. One such bill, A3845, would authorize the New Jersey Economic Development Authority (EDA) to make grants to small and medium businesses and nonprofits for projects pending during a state of emergency.
The bill amends (1) the EDA’s statutory authority to make such grants during states of emergency, (2) the Economic Recovery Fund Act, first established in the 1992 downturn, to permit EDA to use that fund to make the grants and (3) the Grow NJ statute to permit EDA to grant extensions of time to meet project completion and job certification deadlines during a state of emergency, but only if the emergency causes the delay.
The bill also permits EDA to use the economic growth account in the Economic Recovery Fund to make grants to small and medium-size businesses and not-for-profit corporations for the planning, designing, acquiring, constructing, improving, equipping, or furnishing of a project as well as providing working capital and funding to meet payroll requirements during a state of emergency. “Project” is very broadly defined by existing law (NJSA 34:1B-3). Other details, such as the size of the grants and application criteria and process, are not contained in the bill and are left to EDA to develop.
The bill will now be given to the Governor for consideration. While the normal review period is 45 days, we expect the Governor to act quickly given the intent of the legislation. Two things to watch with respect to the Governor’s action: (1) will he issue a Conditional Veto to provide the fine print on the criteria for making grants and (2) does he have any appetite to assist the Grow NJ program, which has been under fire for the past six months.
The good news is that the Legislature is acting proactively to ease some of the pressure on small and medium businesses and nonprofits in the State resulting from COVID-19. We're here to help your business too. Please contact your relationship partner or lawyer for up-to-date developments.