§ 18A:7G-14 — Powers of financing authority; powers of development authority.

New Jersey § 18A:7G-14

• Jurisdiction: New Jersey
• Title 18A: EDUCATION

Text

14. Notwithstanding any other provisions of law to the contrary: a. The financing authority shall have the power, pursuant to the provisions of P.L.2000, c.72 (C.18A:7G-1 et al.), P.L.1974, c.80 (C.34:1B-1 et seq.) and P.L.2007, c.137 (C.52:18A-235 et al.), to issue bonds and refunding bonds, incur indebtedness and borrow money secured, in whole or in part, by moneys received pursuant to sections 17, 18, and 19 of P.L.2000, c.72 (C.18A:7G-17, C.18A:7G-18, and C.18A:7G-19) for the purposes of: financing all or a portion of the costs of school facilities projects and any costs related to the issuance thereof, including, but not limited to, the administrative, insurance, operating and other expenses of the financing authority to undertake the financing, and the development authority to undertake the planning, design, and construction of school facilities projects; lending moneys to local units to pay the costs of all or a portion of school facilities projects and any costs related to the issuance thereof; funding the grants to be made pursuant to section 15 of P.L.2000, c.72 (C.18A:7G-15); and financing the acquisition of school facilities projects to permit the refinancing of debt by the district pursuant to section 16 of P.L.2000, c.72 (C.18A:7G-16). Notwithstanding the provisions of this section to the contrary, if financial support is provided to the development authority following a budget request made directly to the Division of Budget and Accounting in the Department of the Treasury for State support pursuant to subsection k. of this section, bonds and refunding bonds, or any indebtedness or other borrowed moneys, secured, in whole or in part, by moneys received pursuant to sections 17, 18, and 19 of P.L.2000, c.72 (C.18A:7G-17, C.18A:7G-18, and C.18A:7G-19) or pursuant to this section after the effective date of P.L.2023, c.311 (C.18A:7G-5b et al.) shall not be issued for the purposes of financing costs related to the issuance of the bonds, indebtedness, or other borrowed moneys, including, but not limited to, the administrative expenses (other than retained professional services related to the issuance of the bonds, indebtedness, or other borrowed moneys), non-project insurance expenses, operating and other expenses of the financing authority to undertake the financing. If financial support is provided to the development authority following a budget request pursuant to subsection k. of this section, bonds, indebtedness, or other borrowed moneys issued pursuant to this section shall also not be issued for the purposes of financing any costs related to the issuance of moneys lent to local units to pay the costs of all or a portion of school facilities projects. The administrative expenses (other than retained professional services related to the issuance of the bonds, indebtedness, or other borrowed moneys), non-project insurance expenses, operating and other expenses of the financing authority related to undertaking the financing of school facilities projects pursuant to this section shall be supported by State appropriations when financial support is made available following a budget request pursuant to subsection k. of this section. The administrative, non-project insurance, operating, and other expenses of the development authority shall be funded by State appropriations pursuant to paragraph (2) of subsection o. of section 4 of P.L.2007, c.137, (C.52:18A-238) when financial support is made available following a budget request pursuant to subsection k. of this section. If financial support is provided to the development authority following a budget request pursuant to subsection k. of this section, bonds and refunding bonds, or any indebtedness or other borrowed moneys issued pursuant to this section after the effective date of P.L.2023, c.311 (C.18A:7G-5b et al.) shall only be issued for the purposes of: financing all or a portion of the costs of school facilities projects; lending moneys to local units to pay the costs of all or a portion of school facilities projects; funding the grants to be made pursuant to section 15 of P.L.2000, c.72 (C.18A:7G-15); financing the acquisition of school facilities projects to permit the refinancing of debt by the district pursuant to section 16 of P.L.2000, c.72 (C.18A:7G-16); and paying for the administrative expenses of the financing authority that are in connection with retained professional services related to the issuance of the bonds, indebtedness, or other borrowed moneys. The aggregate principal amount of the bonds, notes, or other obligations issued by the financing authority as authorized pursuant to P.L.2000, c.72 (C.18A:7G-1 et al.) shall not exceed: $100,000,000 for the State share of costs for county vocational school district school facilities projects; $6,000,000,000 for the State share of costs for Abbott district school facilities projects; and $2,500,000,000 for the State share of costs for school facilities projects in all other districts. The aggregate principal amount of the bonds, notes, or other obligations issued by the financing authority as authorized pursuant to P.L.2008, c.39 (C.18A:7G-14.1 et al.) shall not exceed: $2,900,000,000 for the State share of costs of SDA district school facilities projects and $1,000,000,000 for the State share of costs for school facilities projects in all other districts, $50,000,000 of which shall be allocated for the State share of costs for county vocational school district school facilities projects. This limitation shall not include any bonds, notes, or other obligations issued for refunding purposes. The financing authority may establish reserve funds to further secure bonds and refunding bonds issued pursuant to this section and may issue bonds to pay for the administrative, insurance, and operating costs of the financing authority and the development authority in carrying out the provisions of this act. Notwithstanding the provisions of this section to the contrary, the proceeds of bonds issued pursuant to this section after the effective date of P.L.2023, c.311 (C.18A:7G-5b et al.) shall not pay for any costs related to the issuance of the bonds, including the administrative expenses (other than retained professional services related to the issuance of the bonds, indebtedness, or other borrowed moneys), non-project insurance, and operating costs of the financing authority and the development authority in carrying out the provisions of P.L.2000, c.72 (C.18A:7G-1 et al.). Such costs of the financing authority shall be supported by State appropriations when financial support is made available following a budget request pursuant to subsection k. of this section. Such costs of the development authority shall be funded by State appropriations pursuant to paragraph (2) of subsection o. of section 4 of P.L.2007, c.137, (C.52:18A-238) when financial support is made available following a budget request pursuant to subsection k. of this section. In addition to its bonds and refunding bonds, the financing authority shall have the power to issue subordinated indebtedness, which shall be subordinate in lien to the lien of any or all of its bonds or refunding bonds as the financing authority may determine. b. The financing authority shall issue the bonds or refunding bonds in such manner as it shall determine in accordance with the provisions of P.L.2000, c.72 (C.18A:7G-1 et al.), P.L.1974, c.80 (C.34:1B-1 et seq.), and P.L.2007, c.137 (C.52:18A-235 et al.); provided that notwithstanding any other law to the contrary, no resolution adopted by the financing authority authorizing the issuance of bonds or refunding bonds pursuant to this section shall be adopted or otherwise made effective without the approval in writing of the State Treasurer; and refunding bonds issued to refund bonds issued pursuant to this section shall be issued on such terms and conditions as may be determined by the financing authority and the State Treasurer. The financing authority may, in any resolution authorizing the issuance of bonds or refunding bonds issued pursuant to this section, pledge the contract with the State Treasurer provided for pursuant to section 18 of P.L.2000, c.72 (C.18A:7G-18), or any part thereof, or may pledge all or any part of the repayments of loans made to local units pursuant to section 19 of P.L.2000, c.72 (C.18A:7G-19) for the payment or redemption of the bonds or refunding bonds, and covenant as to the use and disposition of money available to the financing authority for payment of the bonds and refunding bonds. All costs associated with the issuance of bonds and refunding bonds by the financing authority for the purposes set forth in this act may be paid by the financing authority from amounts it receives from the proceeds of the bonds or refunding bonds, and from amounts it receives pursuant to sections 17, 18, and 19 of P.L.2000, c.72 (C.18A:7G-17, C.18A:7G-18 and C.18A:7G-19). The costs may include, but shall not be limited to, any costs relating to the issuance of the bonds or refunding bonds, administrative costs of the financing authority attributable to the making and administering of loans and grants to fund school facilities projects, and costs attributable to the agreements entered into pursuant to subsection d. of this section. Notwithstanding the provisions of this section to the contrary, if financial support is provided to the development authority following a budget request made directly to the Division of Budget and Accounting in the Department of the Treasury for State support pursuant to subsection k. of this section, the proceeds of bonds and refunding bonds that are issued pursuant to this section after the effective date of P.L.2023, c.311 (C.18A:7G-5b et al.) shall not pay for the administrative costs of the financing authority associated with the issuance of the bonds and refunding bonds, including, but not limited to, administrative costs (other than retained professional services related to the issuance of the bonds, indebtedness, or other borrowed moneys) of the financing authority attributable to the making and administering of loans and grants to fund school facilities projects and costs attributable to the agreements entered into pursuant to subsection d. of this section. Such costs of the financing authority shall be supported by State appropriations when financial support is made available following a budget request pursuant to subsection k. of this section. c. Each issue of bonds or refunding bonds of the financing authority shall be special obligations of the financing authority payable out of particular revenues, receipts or funds, subject only to any agreements with the holders of bonds or refunding bonds, and may be secured by other sources of revenue, including, but not limited to, one or more of the following: (1) Pledge of the revenues and other receipts to be derived from the payment of local unit obligations and any other payment made to the financing authority pursuant to agreements with any local unit, or a pledge or assignment of any local unit obligations, and the rights and interest of the financing authority therein; (2) Pledge of rentals, receipts and other revenues to be derived from leases or other contractual arrangements with any person or entity, public or private, including one or more local units, or a pledge or assignment of those leases or other contractual arrangements and the rights and interests of the financing authority therein; (3) Pledge of all moneys, funds, accounts, securities and other funds, including the proceeds of the bonds; (4) Pledge of the receipts to be derived from payments of State aid to the financing authority pursuant to section 21 of P.L.2000, c.72 (C.18A:7G-21); (5) Pledge of the contract or contracts with the State Treasurer pursuant to section 18 of P.L.2000, c.72 (C.18A:7G-18); (6) Pledge of any sums remitted to the local unit by donation from any person or entity, public or private, subject to the approval of the State Treasurer; (7) A mortgage on all or any part of the property, real or personal, comprising a school facilities project then owned or thereafter to be acquired, or a pledge or assignment of mortgages made to the financing authority by any person or entity, public or private, including one or more local units and rights and interests of the financing authority therein; and (8) The receipt of any grants, reimbursements or other payments from the federal government. d. The resolution authorizing the issuance of bonds or refunding bonds pursuant to this section may also provide for the financing authority to enter into any revolving credit agreement, agreement establishing a line of credit or letter of credit, reimbursement agreement, interest rate exchange agreement, currency exchange agreement, interest rate floor or cap, options, puts or calls to hedge payment, currency, rate, spread or similar exposure or similar agreements, float agreements, forward agreements, insurance contracts, surety bonds, commitments to purchase or sell bonds, purchase or sale agreements, or commitments or other contracts or agreements and other security agreements approved by the financing authority in connection with the issuance of the bonds or refunding bonds pursuant to this section. In addition, the financing authority may, in anticipation of the issuance of the bonds or the receipt of appropriations, grants, reimbursements or other funds, including, without limitation, grants from the federal government for school facilities projects, issue notes, the principal of or interest on which, or both, shall be payable out of the proceeds of notes, bonds or other obligations of the financing authority or appropriations, grants, reimbursements or other funds or revenues of the financing authority. e. The financing authority is authorized to engage, subject to the approval of the State Treasurer and in such manner as the State Treasurer shall determine, the services of financial advisors and experts, placement agents, underwriters, appraisers, and other advisors, consultants and agents as may be necessary to effectuate the financing of school facilities projects. f. Bonds and refunding bonds issued by the financing authority pursuant to this section shall be special and limited obligations of the financing authority payable from, and secured by, funds and moneys determined by the financing authority in accordance with this section. Notwithstanding any other provision of law or agreement to the contrary, any bonds and refunding bonds issued by the financing authority pursuant to this section shall not be secured by the same property as bonds and refunding bonds issued by the financing authority to finance projects other than school facilities projects. Neither the members of the financing authority nor any other person executing the bonds or refunding bonds shall be personally liable with respect to payment of interest and principal on these bonds or refunding bonds. Bonds or refunding bonds issued pursuant to this section shall not be a debt or liability of the State or any agency or instrumentality thereof, except as otherwise provided by this subsection, either legal, moral or otherwise, and nothing contained in this act shall be construed to authorize the financing authority to incur any indebtedness on behalf of or in any way to obligate the State or any political subdivision thereof, and all bonds and refunding bonds issued by the financing authority shall contain a statement to that effect on their face. g. The State hereby pledges and covenants with the holders of any bonds or refunding bonds issued pursuant to this act that it will not limit or alter the rights or powers vested in the financing authority by this act, nor limit or alter the rights or powers of the State Treasurer in any manner which would jeopardize the interest of the holders or any trustee of the holders, or inhibit or prevent performance or fulfillment by the financing authority or the State Treasurer with respect to the terms of any agreement made with the holders of the bonds or refunding bonds or agreements made pursuant to subsection d. of this section; except that the failure of the Legislature to appropriate moneys for any purpose of this act shall not be deemed a violation of this section. h. The financing authority and the development authority may charge to and collect from local units, districts, the State and any other person, any fees and charges in connection with the financing authority's or development authority's actions undertaken with respect to school facilities projects, including, but not limited to, fees and charges for the financing authority's administrative, organization, insurance, operating and other expenses incident to the financing of school facilities projects, and the development authority's administrative, organization, insurance, operating, planning, design, construction management, acquisition, construction, completion and placing into service and maintenance of school facilities projects. Notwithstanding any provision of this act to the contrary, no SDA district shall be responsible for the payment of any fees and charges related to the development authority's operating expenses. i. Upon the issuance by the financing authority of bonds pursuant to this section, other than refunding bonds, the net proceeds of the bonds shall be transferred to the development authority. The development authority shall establish three funds in which the net proceeds of the bonds issued pursuant to this section, and any State appropriations for school facilities projects, shall be deposited. The three funds shall be as follows: (1) the SDA District Project Fund, in which shall be deposited any funds made available for the State share of costs for SDA district school facilities projects, which funds shall include, but not be limited to, the proceeds of bonds issued pursuant to subsection a. of this section for the State share of costs for SDA district school facilities projects, the proceeds of any general obligation or other bonds that may be authorized for SDA district school facilities projects, and any State appropriations for SDA district school facilities projects; (2) the Regular Operating District Construction and Maintenance Grants Fund, in which shall be deposited any funds made available for the State share of costs for school facilities projects in districts other than SDA districts, which funds shall include, but not be limited to, the proceeds of bonds issued pursuant to subsection a. of this section for the State share of costs for school facilities projects in districts other than SDA districts, the proceeds of any general obligation or other bonds that may be authorized for school facilities projects in districts other than SDA districts, and any State appropriations for school facilities projects in districts other than SDA districts; and (3) (a) the SDA District Emergent Project Fund, in which shall be deposited any funds made available for emergent projects in SDA districts under the "Emergent Condition Remediation Program" established pursuant to section 20 of P.L.2023, c.311 (C.18A:7G-47.1), which funds shall include, but not be limited to, the proceeds of bonds issued pursuant to subsection a. of this section for the State share of costs for SDA district emergent projects, the proceeds of any general obligation or other bonds that may be authorized for SDA district emergent projects, and any State appropriations for SDA district emergent projects; (b) as used in this paragraph, "emergent project" means a school facilities project or other capital project eligible for State funding that would alleviate a condition that, if not corrected on an expedited basis, would render a building or facility so potentially injurious or hazardous that it causes an imminent peril to the health and safety of students or staff. j. In the event that the annual appropriations act provides for direct funding for school facilities projects, or in the event that a separate act appropriates direct funding of school facilities projects from the "New Jersey Debt Defeasance and Prevention Fund" established pursuant to section 1 of P.L.2021 c.125 (C.52:9H-2.2), no less than 70 percent of the direct funding shall be appropriated to the SDA District Project Fund and the SDA District Emergent Project Fund. The remaining funds for school facilities projects shall be disbursed to the Regular Operating District Construction and Maintenance Grants Fund. k. In the event that the financing authority issues bonds or incurs indebtedness pursuant to this section for the purpose of financing all or a portion of the costs of school facilities projects and for the purpose of providing funding to the development authority to undertake school facilities projects, the development authority may submit a budget request directly to the Division of Budget and Accounting in the Department of the Treasury, for State support to provide supplemental financing for the development authority's operations in carrying out the provisions of P.L.2000, c.72 (C.18A:7G-1 et al.). L.2000, c.72, s.14; amended 2005, c.235, s.33; 2007, c.137, s.25; 2007, c.260, s.45; 2008, c. 39, s.4; 2023, c.311, s.9.