TRENTON, N.J. – A bill sponsored by Assemblyman Jay Webber that would prevent companies in default from receiving additional state subsidies cleared the Assembly Commerce and Economic Development Committee today.
The bill (S1576/A299) would bar awarding additional subsidies to a company that has failed to make repayments for 24 months on a previously awarded subsidized loan.
CLICK TO WATCH Webber discuss his bill to stop subsidies to defaulting companies
“The recent comptroller’s audit revealed that accountability is nearly nonexistent in New Jersey corporate subsidies programs,” said Webber (R-Morris). “Allowing defaulting companies to take new subsidies is not ‘economic development’; it’s corrupt cronyism at the expense of our citizens. At the very least, accountability must mean that a company that has defaulted on a taxpayer-subsidized loan and failed to keep its end of a bargain should be stopped from getting yet another subsidy.”
While current law prohibits the award of a subsidy when a company is in default on a prior subsidy loan, the statute does not spell out a timeframe of what constitutes default. This bill will revise the law to create a timeframe of 24 months.
The bill was approved by the Senate in December with a vote of 39-0 and now goes to the full Assembly.