S2463 —

     u.    poles;

     v.    posts;

     w.   presses;

     x.    pruning equipment;

     y.    pumps;

     z.     refractometers;

     aa.   refrigeration equipment;

     bb.  seeders;

     cc.   soil;

     dd.  small tools;

     ee.   tanks;

     ff.   tractors;

     gg.  vats;

     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 or retailer capital expense, defined pursuant to this section, as applicable to a small producer or retailer of alcoholic beverages.

     “Qualified operating expense” means the normal, day-to-day operating expenditures made by an eligible small producer or retailer 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 or retailer capital expense or qualified vineyard or winery capital expense.

     “Small producer or retailer of alcoholic beverages” means:

     a.     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;

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 license.

     "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 or retailers of alcoholic beverages to pay for qualified small producer or retailer capital expenses and qualified vineyard or winery capital expenses respectively;

and      (2)   loans to eligible small producers or retailers 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 or retailer 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 or retailer 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 or retailer 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 or retailer 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 [c.] b.

of this section, establish terms governing the incidence of default by an eligible vineyard [or], winery, or small producer or retailer 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.

    STATEMENT        This bill expands an existing loan program administered by the New Jersey Economic Development Authority (EDA) to include loans to a “small producer or retailer of alcoholic beverages” (small producer or retailer) for qualified operating expenses during a pandemic.  As defined in the bill, a small producer or retailer is a business:

     1)    that has been issued 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;

or      2)    having 10 or fewer employees that has been issued and is operating in compliance with, a Class C license.

     The bill allows the EDA to discontinue providing loans for qualified operating expenses once the Governor has rescinded a declared state of emergency and public health emergency pertaining to a pandemic.  These loans may be issued at an interest rate equal to the prime rate or up to three percentage points above the prime rate.

     The bill expands the non-emergency loan program to allow the EDA to provide, on a permanent basis, loans to a small producer or retailer to be used for “qualified small producer or retailer capital expenses” just as the current program permits loans to vineyards or wineries for qualified vineyard and winery capital expenses.  As defined in the bill, a “qualified small producer or retailer capital expense” is an amount paid by a small producer or retailer for the purchase of plant, machinery, equipment, or other associated item, for the purpose of an expansion of the business model of the small producer or retailer to alleviate the financial burdens or economic hardship imposed by a pandemic and use by the small producer or retailer within the State in the manufacture, sale, or both, of alcoholic beverages.  A “qualified small producer or retailer capital expense” includes, but is not to be limited to:

     1)    amounts actually paid by the small producer or retailer;

and      2)    amounts promised to be paid under firm purchase contracts actually executed during the tax year;

      As reported, Senate Bill No.

2463 is identical to Assembly Bill No.

3965 (1R), which was also reported by the committee on this date.