PARSIPPANY – 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.
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.
“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.