January 31, 2007

THE TRUST RESPONDS TO RECENT MEDIA REPORTS

Statement of the New Jersey Environmental Infrastructure Trust:

The New Jersey Environmental Infrastructure Financing Program -- a partnership between the New Jersey Environmental Infrastructure Trust and the New Jersey Department of Environmental Protection -- provides low interest loans and zero interest loans to fund the environmental infrastructure projects undertaken by (i) qualifying municipalities and counties, (ii) qualifying state, regional and county utilities authorities, as well as (iii) qualifying private parties.

Recent newspaper articles have raised questions concerning a participant in our 2005 Program. The project in question involved a loan extended by the Program, through the Bergen County Improvement Authority, to EnCap Golf Holdings, LLC. EnCap is a developer that was selected by the New Jersey Meadowlands Commission, through a Request for Proposals process in 1999, to undertake the remediation and development of almost 800 acres of land in the Meadowlands district that are contaminated with solid waste landfills, which landfills discharge thousands of gallons of leachate into the surrounding waters each day.

Every loan that is extended by the NJEIT and the NJDEP, as part of the Program, is subject to multiple instances of State legislative and executive branch consideration and approval, involving multiple State agencies. Generally, the implementation and administration of the Program is the subject of an extensive body of State statutory and regulatory provisions, as well as an extensive body of federal statutes and federal regulations promulgated by the United States Environmental Protection Agency. The Program is the subject of several public hearings and proceedings, each subject to the State Open Public Meetings Act.

Throughout its history, NJEIT staff and Board members have aggressively promoted the Program to potential participants throughout the State so as to expand its portfolio of qualifying participants and projects. The qualification of a participant and a project for inclusion in the Program is an issue that is extensively regulated by both the State and the federal government. To date, the Program has extended over $4 Billion in low interest loans and zero interest loans to approximately 270 qualifying borrowers for the implementation of more than 500 qualifying environmental projects that, collectively, have improved water resources in every county in the State. During the past twenty years, no application for a project that improves the State's water resources and that qualifies pursuant to State and federal statutory and regulatory provisions has been rejected for financing from the Program. The NJEIT estimates that the Program will extend low interest loans and zero interest loans to approximately 50 qualifying borrowers during 2007.

Bonds issued by the NJEIT are neither a debt nor liability of the State of New Jersey. The NJEIT bonds are repaid from the loan repayments made by the participants in the Program. The NJEIT bonds are sold pursuant to a competitive process that is governed by State law. The loans extended by the NJDEP are made from a revolving fund, derived (i) to a limited extent from the proceeds of general obligation bonds issued by the State and (ii) primarily from capitalization grants provided to the State by the federal government, acting through the United States Environmental Protection Agency, for environmental infrastructure projects, such as the Meadowlands remediation.

Since the financing for the Meadowlands project involved a particularly complex financing structure, a "stand-alone" issue, separate from our annual pool of borrowers, was deemed necessary. Given such complexity, it is understandable that those without prior experience with the structure and procedures associated with the financing find it challenging to appreciate its scope, intricacy and detail. The NJEIT believes that significant inaccuracies with respect to the Program were included in recent press reports. The NJEIT looks forward to the opportunity to correct such public statements. Furthermore, the NJEIT is committed to cooperating with any evaluation or examination of our Program and, in connection therewith, the NJEIT is committed to undertaking a careful and thorough review, with any evaluator or examiner, of our Program for the purposes of carefully setting forth and explaining this complex financing, its structure and the associated procedures.

Robert A. Briant, Sr., Chairman
New Jersey Environmental Infrastructure Trust