ASSEMBLY, No. 5167
STATE OF NEW JERSEY
221st LEGISLATURE
INTRODUCED JANUARY 14, 2025
Sponsored by:
Assemblyman REGINALD W. ATKINS
District 20 (Union)
Assemblyman JULIO MARENCO
District 33 (Hudson)
SYNOPSIS
Establishes programs in EDA to support New Jersey-based start-ups, small businesses, and medium-sized businesses adopting artificial intelligence capabilities; appropriates $175.5 million.
CURRENT VERSION OF TEXT
As introduced.
An Act providing assistance to support the development and use of artificial intelligence technologies, supplementing Title 34 of the Revised Statutes, and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Authority" means the New Jersey Economic Development Authority, established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4).
"AI business" means a corporation or other entity that has its headquarters or base of operations in this State; that owns, has filed for, or has a valid license to use protected, proprietary intellectual property related to artificial intelligence; and that employs some combination of the following: highly educated or trained managers and workers, or both, employed in this State who use sophisticated scientific research service or production equipment, processes, or knowledge to discover, develop, test, transfer, or manufacture products or services related to artificial intelligence.
"AI innovation hub" means a facility or campus designed to foster artificial intelligence research, development, and commercialization through collaboration between businesses, academic institutions, and research organizations.
"Consultancy program" means the "AI for Small and Medium-Sized Businesses Consultancy Program," established pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Fund program" means the "AI Job Creation and Economic Development Fund Program," established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Grant program" means the "AI for Small Business Grant Program," established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Medium-sized business" means a business enterprise, which has its principal place of business in this State, is independently owned and operated as a sole proprietorship, partnership, corporation, or limited liability company with a level of gross income from operations defined by the authority as a medium-sized business.
"Revolving loan fund" means the "AI Job Creation and Economic Development Revolving Loan Fund," established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Small business" means a business located in this State engaged in the conduct of a trade or business that qualifies as a "small business concern" within the meaning of the federal "Small Business Act," Pub.L.85-536 (U.S.C. s.631 et seq.) for the purpose of the small business's eligibility for assistance from the United States Small Business Administration.
"Start-up business" means a for-profit business located in the State that has been in operation no more than seven years. For purposes of this definition, operations shall be deemed to commence on the date that the business first hired at least one employee in a full-time position.
2. a. The authority shall establish and administer the "AI Job Creation and Economic Development Fund Program" to provide financial assistance to support the establishment, expansion, or improved operations of AI businesses in the State and to support the development of AI innovation hubs by AI businesses in the State.
b. To qualify for the fund program, a business shall demonstrate to the authority that the business:
(1) qualifies as an AI business;
(2) has a viable business plan that includes the potential for job creation;
(3) commits to creating a minimum number of new full-time jobs in the State, as determined by the authority;
(4) lacks sufficient financial resources to execute its business plan or develop an AI innovation hub without assistance from the fund program; and
(5) meets any other eligibility requirements that the authority may deem appropriate.
c. A business that seeks assistance under the fund program shall submit an application to the authority in a form and manner prescribed by the authority. The application shall specify whether the applicant is seeking funding for the development of an AI innovation hub or for the establishment, expansion, or improvement of AI business operations. In addition to any other information that the authority may deem appropriate, the application shall require the applicant to submit:
(1) information demonstrating that the business meets the eligibility requirements set forth in subsection b. of this section;
(2) a detailed business plan, including the projected number of full-time jobs to be created directly by the business or AI innovation hub or indirectly through the development of the artificial intelligence technologies by the business;
(3) documentation of any existing artificial intelligence intellectual property or technology that has been developed by the business; and
(4) an outline of the proposed use of funds, including an explanation of the business operations to be established, expanded, or improved or the AI innovation hub to be developed, as applicable.
d. The authority may approve applications for the fund program on a rolling basis, subject to the availability of funds in the revolving loan fund. Upon approval, the authority shall:
(1) provide a grant, not to exceed $500,000, to any applicant seeking to undertake the development of an AI innovation hub in the State; or
(2) issue a low-interest loan, not to exceed $1,000,000, to any applicant seeking to establish, expand, or improve business operations in the State.
e. In addition to any other terms and conditions that the authority may deem appropriate, each loan issued under the fund program shall:
(1) bear interest at lower rates than are customarily made available through conventional business loans issued by private lenders;
(2) be used to support working capital, purchase equipment, and finance other expenses incurred by the business in the development or deployment of AI technology; and
(3) mature no later than five years from issuance, except as otherwise extended by the authority.
f. The authority shall submit an annual report to the Governor and the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), detailing the operations of the fund program, including, but not limited to the:
(1) amount of each program grant or loan;
(2) recipient of each program grant or loan;
(3) estimated number of jobs created by recipient businesses;
(4) status of each AI innovation hub developed through the fund program; and
(5) repayment rate of all program loans.
3. a. The authority shall establish and maintain a non-lapsing revolving fund, known as the "AI Job Creation and Economic Development Revolving Loan Fund," which shall serve as the repository of all monies used to support the fund program.
b. All grants and loans provided under section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be issued from monies held in the revolving loan fund. All monies received by the authority from the repayment of a program loan shall be deposited into the revolving loan fund.
4. a. The authority shall establish and administer an "AI for Small Business Grant Program," for the purpose of awarding grants to qualified start-up businesses and small businesses that seek to adopt and implement artificial intelligence technologies for research and development, business expansion, or job-creation purposes.
b. To qualify for the grant program, a start-up business or small business shall demonstrate to the authority that the business:
(1) qualifies as a start-up business or small business, as defined pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), and operates primarily within the State; and
(2) meets any other eligibility criteria that the authority deems appropriate.
c. A start-up business and small business may apply to the program for grant funding to support the adoption and implementation of artificial intelligence technologies for research and development, business expansion, or job creation purposes, except that the amount of the grant awarded to any recipient shall not be:
(1) less than $50,000 or greater than $250,000 for research and product development purposes;
(2) less than $250,000 or greater than $1,000,000 for business expansion purposes; or
(3) less than $10,000 or greater than $20,000 for job creation purposes.
d. A start-up business or small business that seeks assistance through the grant program shall submit an application to the authority in a form and manner prescribed by the authority. In addition to any other information that the authority may deem appropriate, the application shall require the applicant to submit information:
(1) demonstrating that the start-up business or small business meets the eligibility criteria established pursuant to subsection b. of this section;
(2) identifying a business development and growth plan, including the anticipated amount of the start-up business' or small business' payroll, as measured by total dollar value, attributable to employment located within the State; and
(3) identifying the purpose for which the grant is sought, including research and development, business expansion, or job creation purposes, and outlining the anticipated use of the grant proceeds.
e. The authority shall review and approve applications submitted pursuant to this section on a rolling basis, subject to the availability of funds. Upon approval of each application, the authority shall issue a grant to a qualified start-up business or small business in accordance with the grant amount requirements in subsection c. of this section.
f. Beginning one year after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and each year thereafter until all funds deposited into the AI for Small Business Grant Program Fund have been expended, the authority shall submit a report to the Governor and the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), detailing the operations of the grant program. In addition to any other information deemed appropriate by the authority, the report shall indicate the number of applications submitted during the previous year, and the amount awarded to each grant recipient in the previous year.
5. The authority shall establish and maintain a special, non-lapsing fund, known as the "AI for Small Business Grant Program Fund," to provide grant funding to qualified start-up businesses and small businesses that participate in the program and to administer the program. The fund shall be credited with such monies as may be appropriated or made available for the purposes of the fund.
6. a. The authority shall establish and administer, in consultation with the New Jersey Chief Technology Officer, an "AI for Small and Medium-Sized Businesses Consultancy Program." The consultancy program shall offer consultancy services and technical assistance to assist small businesses and medium-sized businesses in identifying and implementing artificial intelligence technologies and tools to enhance productivity, streamline operations, or improve customer service.
b. The AI for Small and Medium-Sized Businesses Consultancy Program shall be administered under the immediate supervision of a manager, who, prior to being appointed, shall be qualified by work in artificial intelligence development activities or its equivalent in training and experience. The manager of the consultancy program shall be appointed by the Chief Executive Officer of the authority, and serve at the pleasure of the authority. The manager shall administer the consultancy program, including the staffing of necessary professional and clerical staff, under the direction and supervision of the Chief Executive Officer of the authority, and shall perform such other functions as the authority may prescribe.
c. (1) The consultancy program shall provide consultancy services and technical assistance to small businesses and medium-sized businesses, upon application to the authority, in identifying and implementing artificial intelligence technologies and tools that support the business development and growth plan identified in the business' application to the program. The authority shall prescribe the form and manner in which a small business or medium-sized business may apply for the consultancy program;
(2) The manager of the
consultancy program shall establish and update, as necessary, a database
listing the availability of qualified artificial intelligence professionals,
businesses, research institutions, industry networks, academic networks, technologies,
and tools in the State. The database shall be published and maintained on the
official Internet website of the authority.
7. The authority shall adopt rules and regulations, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as necessary to implement the provisions of this act.
8. a. There is appropriated the sum of $25 million from the General Fund to the New Jersey Economic Development Authority for deposit into the "AI Job Creation and Economic Development Revolving Loan Fund," established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. There is appropriated the sum of $150 million from the General Fund to the New Jersey Economic Development Authority for deposit into the "AI for Small Business Grant Program Fund," established pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. There is appropriated the sum of $500,000 from the General Fund to the New Jersey Economic Development Authority for the purposes of establishing and administering an AI for Small and Medium-Sized Businesses Consultancy Program, established pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
9. This act shall take effect immediately.
STATEMENT
This bill provides support, through the New Jersey Economic Development Authority ("authority"), to New Jersey-based start-ups, small businesses, and medium-sized businesses that operate within the artificial intelligence industry or that seek to adopt artificial intelligence capabilities. Specifically, the bill establishes three distinct programs within the authority to support these purposes and appropriates a sum of $175.5 million to support these programs.
AI Job Creation and Economic Development Fund Program
First, the bill establishes the "AI Job Creation and Economic Development Fund Program" within the authority to support the establishment, expansion, or improved operations of AI businesses in the State and to support the development of AI innovation hubs by AI businesses in the State.
Under the program, the authority would provide: (1) grants of up to $500,000 to AI businesses that seek to develop AI innovation hubs in the State; and (2) low-interest loans of up to $1 million to AI businesses that seek to establish, expand, or improve business operations in the State. An AI innovation hub is defined under the bill to include any facility or campus that is designed to foster artificial intelligence research, development, and commercialization through collaboration between businesses, academic institutions, and research organizations.
To qualify for assistance, AI businesses would be required to demonstrate a viable business plan, commit to creating a minimum number of new full-time jobs in New Jersey, as determined by the authority, and meet certain other eligibility requirements.
The bill appropriates $25 million from the General Fund to the authority to support the operations of this program. These monies would be deposited into a non-lapsing revolving loan fund, which the authority would administer for purposes of the program.
Notably, the bill requires the authority to submit annual reports detailing program operations, including the number of jobs created, economic impact, and development of AI innovation hubs.
AI for Small Business Grant Program
Secondly, the bill establishes an "AI for Small Business Grant Program" in the authority, supported through a special, non-lapsing fund known as the "AI for Small Business Grant Program Fund," for the purpose of awarding grants to qualified start-up businesses and small businesses that seek to adopt and implement artificial intelligence technologies for research and development, business expansion, or job creation purposes.
Under the program, start-up businesses and small businesses could apply for grant funding to adopt and implement artificial intelligence technologies for research and development purposes, business expansion purposes, and job creation purposes. However, any grant awarded to a recipient would not be: (1) less than $50,000 or greater than $250,000 for research and product development purposes; (2) less than $250,000 or greater than $1 million for business expansion purposes; or (3) less than $10,000 or greater than $20,000 for job creation purposes.
The bill appropriates $150 million from the General Fund to the authority to support this program. Beginning one year after the establishment of the grant program and each year thereafter until all funds deposited into the AI for Small Business Grant Program Fund have been expended, the authority would be required to submit a report to the Governor and the Legislature on the number of applications submitted during the previous year, and the amount awarded to each grant recipient for that year.
AI for Small and Medium-Sized Businesses Consultancy Program
Lastly, the bill also establishes the "AI for Small and Medium-Sized Businesses Consultancy Program," which would be administered by the authority, in consultation with the New Jersey Chief Technology Officer.
Under the program, the authority would provide consultancy services and technical assistance to small and medium-sized businesses, upon application to the authority, in identifying and implementing the artificial intelligence technologies and tools that support the business development and growth plan identified in the business's application to the program.
The program would be administered by a manager, appointed by the Chief Executive Officer of the Authority, qualified by work in artificial intelligence development activities or its equivalent in training and experience. As part of the program manager's duties, the person would establish and update, as necessary, a database listing the availability of qualified artificial intelligence professionals, businesses, research institutions, industry networks, academic networks, technologies, and tools in the State. The database would be published and maintained on the official Internet website of the authority.
The bill appropriates $500,000 from the General Fund to the authority for the purposes of establishing and administering the AI for Small and Medium-Sized Businesses Consultancy Program.