S4626

An Act establishing the Office of Small Business Advisory Services and the Small Business Advisory and Accountability Fund, supplementing Title 52 of the Revised Statutes, and making an appropriation.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares that:

a. Small businesses are the foundation of the State’s economy and account for the majority of jobs and economic activity across the State.

b. The National American and Indian Chamber of Commerce (NAICCO) and the New Jersey Small Business Growth Council (NJSBGC) collectively represent more than 10,000 small businesses operating across the State.

c. Small businesses frequently encounter regulatory burdens, funding barriers, and limited access to State programs and procurement opportunities that impede their growth and sustainability.

d. Formalizing the advisory role of the NAICCO and the NJSBGC will create a structured, accountable, and effective channel through which small business interests are representing in State policymaking.

e. It is therefore in the public interest of this State to invest in infrastructure necessary to ensure that small businesses have a meaningful, institutionalized, voice in State governance by establishing the Office of Small Business Advisory Services and the Small Business Advisory Accountability Fund with the aim to improve the regulatory and economic environment through mandatory impact reporting, increased inter-agency collaboration, and the creation of a Red Tape Reduction Task Force.

2. As used in this act:

“National American and Indian Chamber of Commerce” or “NAICCO” means a nonprofit organization representing small business interests across the State and nationwide.

“New Jersey Small Business Growth Council” or “NJSBGC” means a nonprofit organization dedicated to the advancement and advocacy of small businesses operating in this State.

“Office of Small Business Advisory Services” means an office established in the executive branch pursuant to section 3 of this act that shall review and oversee small business policy in this State.

“Red Tape Reduction Task Force” means a task force established within the Office of Small Business Advisory Services that is authorized to review existing State statutes, regulations, and administrative rules that govern small business operations.

“Small business” means any for-profit enterprise independently owned and operated, not dominant in its field of operation, and meeting the size standards established pursuant to the United States Small Business Administration’s regulations, as applicable or otherwise

“Small business impact report” means a formal written assessment, prepared in consultation with the NAICCO and NJSBGC, that evaluates the projected economic, regulatory, and operational impact of proposed legislation upon small businesses in the State.

“Small Business Advisory and Accountability Fund” means a fund established pursuant to section 11 of this act to aid the Office of Small Business Advisory Service in carrying out its operations set out in sections 5 through 9 of this act.

3. a. There is established the Office of Small Business Advisory Services in the New Jersey Business Action Center within the Department of State. The Office shall serve as the primary coordinating entity between the NAICCO, the NJSBGC, and State agencies to facilitate the implementation of all programs, reporting obligations, and collaborative activities established pursuant to this act.

b. The NAICCO and NJSBGC are formally recognized as official advisory partners to the Office of Small Business Advisory Services on matters pertaining to small business policy, economic development, regulatory affairs, and State procurement.

c. The Office of Small Business Advisory Services shall, with the NAICCO and NJSBGC:

(1) submit formal policy recommendations to the Governor, the Legislature, and State agencies;

(2) participate in State hearings, rulemaking proceedings, and legislative committee sessions pertaining to relevant legislation and administrative rules;

(3) receive appropriated State funds as provided in section 11 of this act; and

(4) produce and submit reports, assessments, and recommendations pursuant to sections 5, 6, 8, 9, and 12 of this act.

d. The Office of Small Business Advisory Services shall concentrate on the following areas of policy:

(1) streamlining and simplifying State grant applications, with particular attention on the standardization of application forms, the reduction of documentation requirements, and plain-language guidance;

(2) recommending statutory and administrative reform to reduce approval timelines for small business funding applications, including the establishment of mandatory decisions timelines, and automatic approval mechanisms where appropriate;

(3) formulating targeted tax relief measures applicable to the first three to five years of a small business’ operation, including, but not limited to, abatements, credits, or deferral mechanisms;

(4) recommending plans to foster the expansion, restructuring, and increased capitalization of State-backed microloan programs, with specific focus on underserved entrepreneurs including but not limited to, minority-owned, women-owned, veteran-owned, and immigrant-owned small businesses;

(5) recommending improvements for small business access to and participation in, State procurement processes, including set-aside programs, simplified bid procedures, and technical assistance; and

(6) identifying regulations that are outdated, duplicative, or disproportionately burdensome for small businesses.

4. a. The Governor shall appoint a Director of the Office of Small Business Advisory Services.

b. The Director of the Office of Small Business Advisory Services shall be an individual with demonstrated expertise in business policy, economic development, or public administration and shall be responsible for administering and implementing this act.

5. a. The Office of Small Business Advisory Services shall, in consultation with the NAICCO and NJSBGC, prepare and submit a small business impact report for bills, resolutions, and proposed rules to the relevant Legislative committees or State agencies no later than 20 calendar days following the introduction of relevant legislation or publication of a proposed rule.

b. The small business impact report shall address:

(1) the estimated number of small businesses in this State that would be directly or indirectly affected by the pending legislation or rule;

(2) the projected economic impact, including effects on revenues, costs, employment, and capital investment;

(3) the anticipated regulatory burden, including new compliance obligations, licensing requirements, or reporting mandates;

(4) an assessment of operational challenges that the proposed legislation or rule may impose upon small businesses; and

(5) recommended modifications or alternatives that would reduce adverse impacts while achieving the Legislature’s or agency’s stated policy objectives.

c. The NAICCO and the NJSBGC shall retain independent authority to submit their own impact assessment evaluating relevant legislation and proposed rules.

d. Prior to any floor vote on relevant legislation, the presiding officer of each house shall ensure that the small business impact report and any independent advisory assessment submitted pursuant to this section are made available to all members of that house. The Legislature shall formally consider such reports in its deliberations.

e. The requirements of this section shall not apply to appropriations bills, emergency legislation enacted pursuant to law, or legislation determined by a two-thirds vote of each house to be exempt on grounds of urgent public necessity, provided that any such determination is set forth in writing with specific findings.

f. Nothing in this act shall be construed to limit the authority of the Governor, Legislature, or State agency to enact or promulgate a law, rule, or regulation without recommendation from the Office of Small Business Advisory Servies.

6. a. The Office of Small Business Advisory Services shall operate a formal, statewide feedback system designed to collect, analyze, and transmit small business perspectives on state programs, regulations, and policies to the Legislature and the Governor according to the requirements pursuant to subsection e. of this section.

b. The Office of Small Business Advisory Services shall conduct a minimum of four regional listening sessions per calendar year, geographically distributed across the State to ensure equitable representation of small businesses in urban, suburban, and rural areas. Each listening session shall:

(1) be open to all small businesses operating in the State;

(2) be noticed to the public no fewer than 14 calendar days prior to the date of the meeting;

(3) be accessible in person, and provide online access to the meeting via an electronic link;

(4) address topics, including but not limited to regulatory pain points, grant access, procurement challenges, workforce development, and State agency responsiveness; and

(5) have a representative from the NAICCO and NJSBGC at each meeting.

c. The Office of Small Business Advisory Services shall maintain an ongoing, systemic program of data collection on frequently cited regulatory issues compliance burdens, funding gaps, and programmatic inefficiencies experienced by small businesses. Data collection methods may include surveys, focus groups, direct business interviews, and analysis of publicly available State data.

d. The Office of Small Business Advisory Services shall establish and maintain a publicly accessible digital portal through which small businesses may submit feedback on State programs and policies on a continuous basis.

e. The Office Small Business Advisory Services, in collaboration with the NAICCO and NJSBGC, shall submit a written summary of the feedback system findings to the Governor and the Legislature pursuant to section 2 of P.L. 1991, c.164 (C.52:14-19.1). The summaries shall be due on January 15th and July 15th each year. The summaries shall include aggregated data collected from the feedback system channels, themes of small business concerns, and preliminary policy recommendations.

7. a. The Office of Small Business Advisory Services shall enter into an interagency memorandum of agreement with each of the following entities:

(1) the New Jersey Economic Development Authority;

(2) the New Jersey Department of Labor and Workforce Development;

(3) the Division of Purchase and Property in the Department of the Treasury;

(4) the Department of Consumer Affairs; and

(5) any other State agency that the director of the Office has determined to administer programs or regulatory schemes materially affecting small businesses.

b. The interagency memorandum of agreement shall:

(1) designate a senior liaison to serve as the primary point of contact between the agency, the Office of Small Business Advisory Services, the NAICCO, and the NJSGBC;

(2) designate a representative who shall attend each of the regional listening sessions hosted by the Office of Small Business Advisory Services;

(3) facilitate the Office of Small Business Advisory’s access to relevant program data, rulemaking databases, and procurement information; and

(4) require the agency to submit an annual report to the director of the Office of Small Business Advisory Services outlining the agency’s small business engagement activities. The first report shall be due one year after the date of enactment.

c. State agencies shall, to the extent permitted by law and consistent with privacy protections, share program outcome data, application statistics, and regulatory compliance data with the Office of Small Business Advisory Services for the purposes of impact assessment and policy development.

8. a. There is established the Red Tape Reduction Task within the Office of Small Business Advisory Services.

b. The Red Tape Reduction Task Force shall consist of 13 members:

(1) two co-chairs appointed jointly by the NAICCO and then NJSBGC; the Director of the Office of Small Business Advisory Services, ex officio, or a designee;

(2) one member appointed by the New Jersey Economic Development Authority;

(3) one member appointed by the New Jersey Business Action Center;

(4) one member appointed by the New Jersey Department of Labor and Workforce Development;

(5) one member appointed by the Department of the Treasury, Division of Purchase and Property;

(6) one member appointed by the New Jersey Department of Community Affairs;

(7) three public members appointed by the Governor with regard to geographic, industrial, and demographic diversity;

(8) one public member appointed by the Present of the Senate; and

(9) one public member appointed by the Speaker of the General Assembly.

c. The task force shall organize itself within 15 days after the appointment of its members. The task force shall elect a vice-chairperson from among its members and shall appoint a secretary who need not be a member of the task force. No determination, decision or action of the task force shall be made or taken unless a majority of its members vote in favor of the action. The Office of Small Business Advisory Services, and the New Jersey Business Action Center shall provide staff to serve as administrative support to the task force.

d. Each member of the task force shall serve a two-year term and may be reappointed.

e. The task force shall:

(1) conduct a systemic review of State statutes, administrative rules, and regulations that impose requirements upon small businesses;

(2) identify regulations and statutory provisions that are outdated, duplicative, inconsistent, or disproportionately burdensome upon small businesses relative to the public benefit achieved;

(3) consult with small business owners, industry associations, and State agency personnel while conducting these reviews;

(4) develop specific, actionable, recommendations for regulatory reform, including proposed legislative changes, regulatory amendments, and administrative streamlining measures.

e. The Red Tape Task Force shall submit an annual report to the Governor, the President of the Senate, the Speaker of the General Assembly, and the Director of the Office of Small Business Advisory one year from the organization of the task force and each following year. The annual report shall include:

(1) a summary of the task force’s review during the preceding year;

(2) a list of specific regulations and statutory provisions recommended for elimination, modification, or consolidation;

(3) the estimated regulatory cost savings projected to accrue to small businesses upon implementation of the recommendations; and

(4) legislative or administrative actions taken in response to prior recommendations.

9. a. The Office of Small Business Advisory Services shall review State procurement policies, procedures, and contract award data, and submit recommendations to the Division of Purchase and Property in the Department of the Treasury for improvements to the State procurement processes that would increase the participation of small businesses in State contracts.

b. Pursuant to subsection a. of this section, the Office of Small Business Advisory Services shall submit to the Division of Purchase and Property a written procurement access report for the prior fiscal year no later than March 31 of each calendar year following enactment. The report shall include:

(1) an analysis of small business participation rates in State contracting by agency, contract type, and industry sector;

(2) identified barriers to small business participation in State procurement;

(3) specific recommendations for regulatory, procedural, or programmatic reforms to increase small business participation and access; and

(4) recommendations for revisions to bid thresholds, set-aside programs, or qualification criteria.

c. The Division of Purchase and Property shall, within 90 calendar days of receipt of the procurement access report written pursuant to subsection b. of this section shall, provide a written response to the Office of Small Business Advisory Services indicating the status of each recommendation.

d. The annual procurement access report written pursuant to subsection b. of this section shall also be transmitted to members of the Senate Commerce Committee and the Assembly Commerce and Economic Development Committee upon submission.

10. a. There is established in the General Fund, a dedicated, non-lapsing fund to be known as the “Small Business Advisory and Accountability Fund.”

b. The fund shall be administered by the director of the Office of Small Business Advisory Services to compensate the Office of Small Business Advisory Services staff and to carry out the functions of the Office of Small Business Advisory described in sections 5 through 10 and section 12 of this act.

c. The sum of $2,500,000 is appropriated from the General Fund to the Small Business Advisory and Accountability Fund for the fiscal year this act takes effect.

d. The Director of the Office of Small Business Advisory Services shall:

(1) maintain complete and accurate books and records of all fund receipts and disbursements;

(2) prepare and submit to the Governor, the President of the Senate, and the Speaker of the General Assembly an annual financial report detailing all expenditures from the fund no later than March 31 of each calendar year;

(3) make public any independent audit of the “Small Business Advisory and Accountability Fund” by a certified public accounting firm; and

(4) establish written internal controls and procurement procedures for Fund expenditures.

e. No monies from the Small Business Advisory and Accountability Fund shall be expended for:

(1) partisan political activities or lobbying of the Legislature by the NAICCO and NJSBGC or the Office of Small Business Advisory Services in a manner not directly related to the execution of duties under this act;

(2) compensation of members of the Legislature or officers of the Executive Branch; and

(3) any purpose not enumerated in subsection e. of this section.

11. a. No later than January 31st of each calendar year, the Director of the Office of Small Business Advisory Services, in collaboration with the NAICCO and NJSBGC shall submit a comprehensive annual report to the Government, the President of the Senate, and the Speaker of the General Assembly. The annual report shall include:

(1) a description of all activities undertaken by the Office and the Advisory Bodies during the preceding calendar year;

(2) a summary of all Small Business Impact Reports prepared pursuant to section 4 of this act;

(3) a summary of all Feedback System data collected pursuant to section 5 of this act, including key trends, most frequently cited regulatory pain points, and geographic variations;

(4) all formal policy recommendations submitted pursuant to section 7 of this act, together with the responses received;

(5) the Annual Report of the Red Tape Reduction Task Force pursuant to subsection e. of section 8 of this act;

(6) the Annual Procurement Access Report submitted pursuant to subsection b. of section 9 of this act;

(7) a financial accounting of all Fund expenditures during the preceding calendar year;

(8) measurable outcome data, where available, demonstrating the impact of this act on small businesses, including but not limited to regulatory burden reductions, improvements in State grant approval rates, and increases in small business State procurement participation; and

(9) recommendations for legislative or administrative action in the coming year.

b. The annual report shall be posted on the Office’s publicly accessible website no later than the date of submission to the Governor and Legislature.

12. The Office of Small Business Advisory Services shall, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations necessary to effectuate the purpose of this act.

13. This act shall take effect six months after the date of enactment.

STATEMENT

This bill establishes the Office of Small Business Advisory services within the Business Action Center in the Department of State. The bill formally recognizes the role of the National American and Indian Chamber of Commerce (NAICCO) and the New Jersey Small Business Growth Council (NJSBGC) as recognized advisory partners to the Office. Together, the NAICCO and NJSBGC organizations represent more than 10,000 small businesses across the State.

This legislation aims to platform the challenges small businesses are facing to the Legislature and the Governor and focus on identifying actionable policy changes to ease these burdens by implementing mandatory small business impact reporting, a structured statewide feedback system, an inter-agency collaboration framework, and a Red Tape Reduction Task Force, which are all supported by dedicated funding to support these functions.

This bill also creates the Small Business Advisory and Accountability Fund within the General Fun and appropriates is estimated at $2,500,000 for the initial fiscal year.

By enacting this legislation, New Jersey will take a significant step toward ensuring that the needs of its small business community are meaningfully integrated into the processes of government.