New Jersey Assembly Bill A1028

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Prohibits awarding of economic development subsidy to business if payment of principal and interest on previously awarded loan or loan guarantee is greater than 24 months overdue.

Impact

The impact of Bill A1028 on state laws is significant as it introduces stricter compliance measures for businesses that seek state economic development assistance. By prohibiting further subsidies for companies in default or overdue on prior financial obligations, the bill aims to foster a more disciplined approach to state funding. As a result, the state may be better equipped to allocate resources to businesses that maintain good standing and meet their financial commitments, thus potentially maximizing the efficacy of public funds in promoting economic growth.

Summary

Assembly Bill A1028 is designed to amend New Jersey's existing economic development subsidy protocols. The bill sets forth a clear prohibition on the awarding of economic development subsidies to any business that has previously received such a subsidy in the form of a loan or loan guarantee, should the business fail to make timely payments. Specifically, if the business has a principal or interest payment that is more than 24 months overdue, it will not qualify for further subsidies. This requirement aims to ensure responsible fiscal management and accountability among businesses receiving state funds.

Contention

While the primary focus of Bill A1028 is financial accountability, it has the potential to result in contentious debates. Proponents will likely argue that it protects taxpayer dollars from being misallocated to businesses that cannot meet their financial obligations. However, opponents may raise concerns regarding the bill's rigidity, arguing that it could hinder support for businesses in temporary financial distress or those attempting to recover from unforeseen circumstances. This dichotomy reflects an ongoing tension between fiscal responsibility and economic compassion in public policy.

Additional_notes

The bill is a direct amendment to P.L.2015, c.167, which already limited the ability of the state to provide subsidies to businesses in default. A1028 builds upon this framework by introducing a specific timeline for overdue payments, emphasizing the importance of compliance and timely financial management.