N.J. Stat. § 48:3-5: Capitalizing franchises or contracts for consolidation

No public utility shall:

a. Capitalize any franchise to be a corporation;

b. Capitalize any franchise in excess of the amount, exclusive of any tax or annual charge, actually paid to the state or any political subdivision thereof as the consideration of the franchise;

c. Capitalize any contract for consolidation, merger or lease; or

d. Issue any bonds or other evidence of indebtedness against or as a lien upon any contract for consolidation, merger or lease.

Nothing herein shall prevent the issuance of stock, bonds or other evidence of indebtedness, subject to the approval of the board, by any lawfully merged or consolidated public utilities not in contravention of this section.