SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE, No. 3891

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 26, 2025

      The Senate Budget and Appropriations Committee reports favorably and with committee amendments Senate Bill No. 3891.

      As amended and reported, this bill requires the New Jersey Economic Development Authority (EDA) to establish a “Small Business Interruption Grant Program” (program) to provide grants to small businesses that have suffered economic loss due to an extended closure as a consequence of prolonged infrastructure or construction projects undertaken by the State or another public entity.  The bill requires the EDA to:  develop an application by which a small business may apply for a grant, award grants to small businesses subject to availability of funds, administer the grant program, and establish and maintain a “Small Business Interruption Grant Program Fund” to provide grants to small businesses that participate in the program.

      To qualify for grant funding through the program, an applicant is required to:  (1) be a small business; (2) have suffered economic loss due to an extended closure as a consequence of a prolonged infrastructure or construction project undertaken by the State or another public entity before or after the bill’s effective date; and (3) meet any other eligibility criteria that the EDA deems appropriate.  Under the bill, the EDA is to determine the amount of a program grant based on operating expenses incurred by a small business due to an extended closure as a consequence of a prolonged infrastructure or construction project.

      Finally, the bill requires the entity responsible for the prolonged infrastructure or construction project, for each prolonged infrastructure or construction project, to contribute to the fund, at most, an amount equal to five percent of the estimated total project costs to support small businesses that suffer an economic loss due to an extended closure as a consequence of the prolonged infrastructure or construction project.

COMMITTEE AMENDMENTS:

      The committee amended the bill to: 

      (1)  define “extended closure” as a closure of a small business for a period of time equal to or exceeding one month;

      (2)  remove the definition of “low-income community”;

      (3)  revise the definition of “small business” to mean a business that is independently owned and operated, employs fewer than 10 individuals, and has a gross revenue of $1.5 million or less annually;

      (4)  change the scope of the program from the provision of grants to small businesses in low-income communities that have suffered economic loss due to prolonged infrastructure or construction projects undertaken by the State or other public entity to instead, providing grants for small businesses that have suffered economic loss due to an extended closure as a consequence of prolonged infrastructure or construction projects undertaken by the State or another public entity;

      (5)  require the EDA to determine program grant amounts based on operating expenses incurred by a small business due to an extended closure as a consequence of a prolonged infrastructure or construction project, rather than on the amount of actual or projected revenue loss as a result of closures or declines in business;

      (6)  remove the requirement for grants to be awarded on a rolling basis;

      (7)  require the EDA to collaborate with relevant State and local entities to ensure that infrastructure and construction project timeframes include specific project start dates to assist small businesses determine funding eligibility under the program;

      (8)  require the entity responsible for the prolonged infrastructure or construction project to contribute to the fund established by the bill, at most, an amount equal to five percent of the estimated total project costs to support small businesses that suffer economic loss due to an extended closure as a consequence of the prolonged infrastructure or construction project;

      (9)  omit a section with provisions requiring the EDA to establish certain rules and regulations to administer the program;

      (10)  delete a proposed appropriation of $750,000 from the General Fund to the EDA for the purposes of the program; and

      (11)  make technical changes to the bill.

FISCAL IMPACT:

      The Office of Legislative Services (OLS) determines that annual State expenditures will increase by an indeterminate amount, for the New Jersey Economic Development Authority to establish, administer, and award grants for small businesses that have suffered economic loss due to an extended closure as a consequence of prolonged infrastructure or construction projects undertaken by the State or another public entity.  Annual State costs cannot be determined because these costs will depend on program demand and any funding made available for the program through future appropriations made by the Legislature.

      The State, counties, and local entities may potentially experience additional expenditure increases if a State, county, or local entity is responsible for the prolonged infrastructure or construction project and is required to contribute up to five percent of the estimated total project costs as outlined in the bill.

      The State may realize additional revenue from application fees collected from grant applicants.  The OLS is unable to quantify these potential revenue increases because the amount of potential application fee collections cannot be determined at this time.