And the EnCap mess has resulted in new legislation to protect public interests: As a result of the bankruptcy, the state and Bergen County stand to lose as much as $50 million of taxpayer money. That legislation has taken a major step forward with Assembly approval of a bill that would increase the oversight of major projects that receive public money.
The bill is intended to "ensure that state funds are not being foolishly or unwisely invested," says its co-sponsor, assemblyman Gary Schaer (D-Passaic County), in a statement. "[New Jersey] has an obligation to taxpayers to make sure that funds are being expended in an appropriate and correct manner."
The legislation's other co-sponsor is assemblyman Fred Scalera (D-Essex County). Specifically, the bill would affect any project that gets $50 million or more in public money. In the case of EnCap, the state and Bergen County put together $300 million in financing for the ill-fated project.
As passed, the Assembly bill would require developers of such projects to file audited annual financial statements, post performance bonds of 110% of the public funds they've received and spend at least $1 of their own private money for each $5 of public funds expended. Of the public funds, 10% would be set aside and paid only when the specific project is completed.
The oversight of a given project would fall to the specific state agency providing the largest share of the public funding. The bill also gives the state comptroller the power to audit a project's finances throughout the development process.
The legislation still has to clear the state Senate, where it currently resides in that body's State Government Committee. The Senate is not scheduled to meet again until mid-January, and no vote has been scheduled yet. There is also no word on when it will reach Gov. John Corzine.
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