ASSEMBLY, No. 3747
STATE OF NEW JERSEY
210th LEGISLATURE
INTRODUCED JUNE 5, 2003
Sponsored by:
Assemblyman JERRY GREEN
District 22 (Middlesex, Somerset and Union)
Assemblywoman NELLIE POU
District 35 (Bergen and Passaic)
Assemblyman REED GUSCIORA
District 15 (Mercer)
Co-Sponsored by:
Assemblymen Azzolina, Thompson and Senator McNamara
SYNOPSIS
Authorizes New Jersey Environmental Infrastructure Trust to expend certain sums to make loans for environmental infrastructure projects.
CURRENT VERSION OF TEXT
As introduced.
(Sponsorship Updated As Of: 6/24/2003)
An Act authorizing the expenditure of funds by the New Jersey Environmental Infrastructure Trust for the purpose of making loans to eligible project sponsors to finance a portion of the cost of construction of environmental infrastructure projects, and supplementing P.L.1985, c.334 (C.58:11B-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. The New Jersey Environmental Infrastructure Trust, established pursuant to P.L.1985, c.334 (C.58:11B-1 et seq.), as amended and supplemented by P.L.1997, c.224, is authorized to expend the aggregate sum of up to $100,000,000, and any unexpended balance of the aggregate expenditures authorized pursuant to section 1 of P.L.2000, c.93, section 1 of P.L.2001, c.224 and section 1 of P.L.2002, c.71 for the purpose of making loans, to the extent sufficient funds are available, to or on behalf of local government units or public water utilities (hereinafter referred to as "project sponsors") to finance a portion of the cost of construction of environmental infrastructure projects listed in sections 2 and 4 of this act.
b. The trust is authorized to increase the aggregate sums specified in subsection a. of this section by:
(1) the amounts of capitalized interest and the bond issuance expenses as provided in subsection b. of section 7 of this act;
(2) the amounts of reserve capacity expenses and debt service reserve fund requirements as provided in subsection c. of section 7 of this act;
(3) the interest earned on amounts deposited for project costs pending their distribution to project sponsors as provided in subsection d. of section 7 of this act; and
(4) the amounts of the loan origination fee as provided in subsection e. of section 7 of this act.
c. For the purposes of this act:
(1) "capitalized interest" means the amount equal to interest paid on trust bonds which is funded with trust bond proceeds and the earnings thereon;
(2) "issuance expenses" means and includes, but need not be limited to, the costs of financial document printing, bond insurance premiums or other credit enhancement, underwriters' discount, verification of financial calculations, the services of bond rating agencies and trustees, the employment of accountants, attorneys, financial advisors, loan servicing agents, registrars, and paying agents, and any other costs related to the issuance of trust bonds;
(3) "reserve capacity expenses" means those project costs for reserve capacity not eligible for loans under rules and regulations governing zero interest loans adopted by the Commissioner of Environmental Protection pursuant to section 4 of P.L.1985, c.329 but which are eligible for loans from the trust in accordance with the rules and regulations adopted by the trust pursuant to section 27 of P.L.1985, c.334 (C.58:11B-27);
(4) "debt service reserve fund expenses" means the debt service reserve fund costs associated with reserve capacity expenses, water supply projects for which the project sponsors are public water utilities as provided in section 9 of P.L.1985, c.334 (C.58:11B-9), and other drinking water projects not eligible for, or interested in, State or federal debt service reserve funds pursuant to the "Water Supply Bond Act of 1981," P.L.1981, c.261, as amended and supplemented by P.L.1997, c.223; and
(5) "loan origination fee" means the fee charged by the Department of Environmental Protection and financed under the trust loan to pay a portion of the costs incurred by the department in the implementation of the New Jersey Environmental Infrastructure Financing Program.
d. The trust is authorized to increase the loan amount in the future to compensate for a refunding of the issue, provided adequate savings are achieved, for the loans issued pursuant to P.L.1989, c.190, P.L.1990, c.97, P.L.1991, c.324, P.L.1992, c.37, P.L.1993, c.192, P.L.1994, c.105, P.L.1995, c.218, P.L.1996, c.87, P.L.1997, c.222, P.L.1998, c.85, P.L.1999, c.173, P.L.2000, c.93, P.L.2001, c.224, P.L.2002, c.71 and P.L.2003, c. (pending in the Legislature as Assembly Bill No. 3747 and Senate Bill No. 2535 of 2003).
2. a. (1) The New Jersey Environmental Infrastructure Trust is authorized to expend funds for the purpose of making supplemental loans to or on behalf of the project sponsors listed below for the following clean water environmental infrastructure projects:
Project Number Project Sponsor Estimated
Allowable
Loan Amount
340641-01-1 Camden City $1,300,000 340325-02-1 Monmouth County
Bayshore OA $ 300,000
340454-03-1 Warren County
(Pequest River) MUA $1,600,000
TOTAL $3,200,000
(2) The loans authorized in this subsection shall be made for the difference between the allowable loan amounts required by these projects based upon final building costs pursuant to subsection a. of section 7 of this act and the loan amounts certified by the chairman of the trust in State fiscal years 2002 and 2003, and for increased allowable costs as defined and determined in accordance with the rules and regulations adopted by the trust pursuant to section 27 of P.L.1985, c.334 (C.58:11B-27). The loans authorized in this subsection shall be made to or on behalf of the project sponsors listed, up to the individual amounts indicated and in the priority stated, to the extent sufficient funds are available, except as a project fails to meet the requirements of section 6 of this act.
(3) The loans authorized in this subsection shall have priority over the environmental infrastructure projects listed in subsection a. of section 4 of this act.
b. (1) The trust is authorized to expend funds for the purpose of making supplemental loans to or on behalf of the project sponsors listed below for the following drinking water environmental infrastructure projects:
Project Number Project Sponsor Estimated
Allowable
Loan Amount
0408001-003-1 Camden City $1,900,000
0408001-009-1 Camden City $1,000,000
0424001-001-1 Merchantville-Pennsauken
WC $ 500,000 TOTAL $3,400,000
(2) The loans authorized in this subsection shall be made for the difference between the allowable loan amounts required by these projects based upon final building costs pursuant to subsection a. of section 7 of this act and the loan amounts certified by the chairman of the trust in State fiscal years 2002 and 2003, and for increased allowable costs as defined and determined in accordance with the rules and regulations adopted by the trust pursuant to section 27 of P.L.1985, c.334 (C.58:11B-27). The loans authorized in this subsection shall be made to or on behalf of the project sponsors listed, up to the individual amounts indicated and in the priority stated, to the extent sufficient funds are available, except as a project fails to meet the requirements of section 6 of this act.
(3) The loans authorized in this subsection shall have priority over the environmental infrastructure projects listed in subsection b. of section 4 of this act.
3. a. The New Jersey Environmental Infrastructure Trust is authorized to make loans to or on behalf of the project sponsors for the clean water projects listed in subsection a. of section 2 and subsection a. of section 4 of this act up to the individual amounts indicated and in the priority stated, except as any such amount may be reduced by the trust pursuant to subsection a. of section 7 of this act, or if a project fails to meet the requirements of section 6 of this act. The trust is authorized to increase any such amount pursuant to subsections b., c., d. or e. of section 7 or section 8 of this act.
b. The trust is authorized to make loans to project sponsors for the drinking water projects listed in subsection b. of section 2 and subsection b. of section 4 of this act up to the individual amounts indicated and in the priority stated, except as any such amount may be reduced by the trust pursuant to subsection a. of section 7 of this act, or if a project fails to meet the requirements of section 6 of this act. The trust is authorized to increase any such amount pursuant to subsections b., c., d. or e. of section 7 or section 8 of this act.
4. a. The following environmental infrastructure projects shall be known and may be cited as the "State Fiscal Year 2004 Clean Water Project Priority List":
Project Number Project Sponsor Estimated
Allowable
Loan Amount
340926-01 Paterson City $3,300,000
340399-20 North Bergen
Township MUA $14,900,000
340944-01 Chesterfield Township $ 700,000
340921-05 Millville City $1,600,000
340547-09 Rahway Valley SA $ 500,000
340803-04 Hackettstown MUA $1,100,000
340547-07 Rahway Valley SA $12,800,000
343045-01 Cape May City $1,300,000
340640-08 Camden County MUA $2,800,000
343037-01 Burlington County BCF $ 500,000
343027-01 Edison Township $ 300,000
343010-02 Brick Township $1,100,000
340945-01 Old Bridge MUA $1,000,000
340437-11 New Brunswick City $1,300,000
343039-01 Manalapan Township $ 800,000
343030-03 Montville Township $ 300,000
343034-02 Readington Township $ 100,000
343012-01 Clinton Township $3,100,000
343047-01 Byram Township (Morris LC)$ 500,000
340957-01 Fairfield Township $1,300,000
343048-01 Lebanon Township (New Jersey
Water Supply Authority) $ 700,000
343049-01 Peapack-Gladstone Borough$1,000,000
340778-03 West Paterson Borough $ 600,000
342007-03 Burlington County BCF $8,000,000
340299-06 Linden-Roselle SA $7,300,000
340641-02 Camden City $1,400,000
340844-01 Clifton City $ 400,000
340435-06 Perth Amboy City $1,100,000
340969-03 Berkeley Township SA $2,400,000
340858-02 Cranford Township $1,200,000
340029-02 Secaucus Town $2,000,000
340873-01 Clinton Township SA $ 400,000
340362-02 Harrison Township $1,200,000
340569-03 Byram Township $ 200,000
340363-02/03 Runnemede SA $ 400,000
340305-01 Barrington Borough $ 600,000
340882-05 Lambertville SA $ 900,000
340842-02 High Bridge Borough $ 100,000
TOTAL $79,200,000
b. The following environmental infrastructure projects shall be known and may be cited as the "State Fiscal Year 2004 Drinking Water Project Priority List":
Project Number Project Sponsor Estimated
Allowable
Loan Amount
0601001-001 Bridgeton City $1,000,000
061001-001 Millville City $ 900,000
1505004-001 Berkeley Township MUA $4,500,000
16113001-003/ North Jersey District
004/010/011 Water Supply Commission $5,400,000
0408001-010 Camden City $3,100,000
1518001-001/002 Cedar Glen Homes $ 300,000
1517001-005/006 Long Beach Township $1,600,000
0604001-004 Bayview Water Company $ 400,000
1111001-003 Trenton City $4,600,000
1209002-003 Old Bridge MUA $1,000,000
1415001-001/ Fayson Lake Water Company
003/007 $ 700,000
1225001-017 Middlesex Water Company $5,100,000
1604001-001 Hawthorne Borough $1,500,000
0708001-002 Glen Ridge Borough $ 700,000
1209002-004 Old Bridge MUA $2,100,000
2108001-001/002 Hackettstown MUA $ 300,000
0811002-001 Monroe Township MUA $3,400,000
1504001-002 Beachwood Borough $ 300,000
1510001-001 Island Heights Borough $ 300,000
0324001-003 Mount Laurel Township MUA$ 700,000
TOTAL $37,900,000
5. In accordance with and subject to the provisions of sections 5, 6 and 23 of P.L.1985, c.334 (C.58:11B-5, 58:11B-6, and 58:11B-23) and as set forth in the financial plan required pursuant to section 21 of P.L.1985, c.334 (C.58:11B-21), or the financial plan required pursuant to section 25 of P.L.1997, c.224 (C.58:11B-21.1), any proceeds from bonds issued by the trust to make loans for priority environmental infrastructure projects listed in sections 2 and 4 of this act which are not expended for that purpose may be applied for the payment of all or any part of the principal of and interest and premium on the trust bonds whether due at stated maturity, the interest payment dates or earlier upon redemption. A portion of the proceeds from bonds issued by the trust to make loans for priority environmental infrastructure projects pursuant to this act may be applied for the payment of capitalized interest and for the payment of any issuance expenses; for the payment of reserve capacity expenses; for the payment of debt service reserve fund expenses; and for the payment of increased costs as defined and determined in accordance with the rules and regulations adopted by the trust pursuant to section 27 of P.L.1985, c.334 (C.58:11B-27).
6. Any loan made by the New Jersey Environmental Infrastructure Trust pursuant to this act shall be subject to the following requirements:
a. The chairman of the trust has certified that the project is in compliance with the provisions of P.L.1977, c.224, P.L.1985, c.334, P.L.1992, c.88, P.L.1997, c.223, P.L.1997, c.224, P.L.1997, c.225 or P.L.1999, c.175, and any rules and regulations adopted pursuant thereto. In making this certification, the chairman may conclusively rely on the project review conducted by the Department of Environmental Protection without any independent review thereof by the trust;
b. The loan shall be conditioned upon approval of a zero interest loan from the Department of Environmental Protection from the "Water Supply Fund" established pursuant to section 14 of the "Water Supply Bond Act of 1981," (P.L.1981, c.261), as amended by P.L.1983, c.355 and amended and supplemented by P.L.1997, c.223, the "Wastewater Treatment Fund" established pursuant to section 15 of the "Wastewater Treatment Bond Act of 1985" (P.L.1985, c.329), or the Drinking Water State Revolving Fund established pursuant to section 1 of P.L.1998, c.84;
c. The loan shall be repaid within a period not to exceed 20 years of the making of the loan;
d. The loan shall not exceed the allowable project cost of the environmental infrastructure facility, exclusive of capitalized interest and issuance expenses as provided in subsection b. of section 7 of this act, reserve capacity expenses and the debt service reserve fund expenses as provided in subsection c. of section 7 of this act, interest earned on project costs as provided in subsection d. of section 7 of this act, the amounts of the loan origination fee as provided in subsection e. of section 7 of this act, refunding increases as provided in section 8 of this act and increased costs as defined and determined in accordance with the rules and regulations adopted by the trust pursuant to section 27 of P.L.1985, c.334 (C.58:11B-27);
e. The loan shall bear interest, exclusive of any late charges or administrative fees payable to the trust pursuant to subsection o. of section 5 of P.L.1985, c.334 (C.58:11B-5) by the project sponsors receiving trust loans, at or below the interest rate paid by the trust on the bonds issued to make or refund the loans authorized by this act, adjusted for underwriting discount and original issue discount or premium, in accordance with the terms and conditions set forth in the financial plan required pursuant to section 21 of P.L.1985, c.334 (C.58:11B-21) or the financial plan required pursuant to section 25 of P.L.1997, c.224 (C.58:11B-21.1); and
f. The loan shall be subject to all other terms and conditions as the trust shall determine to be consistent with the provisions of P.L.1985, c.334 (C.58:11B-1 et seq.) and any rules and regulations adopted pursuant thereto, and with the financial plan required by section 21 of P.L.1985, c.334 (C.58:11B-21) or the financial plan required pursuant to section 25 of P.L.1997, c.224 (C.58:11B-21.1).
The priority lists and authorization for the making of loans pursuant to this act shall expire on July 1, 2004, and any project sponsor which has not executed and delivered a loan agreement with the trust for a loan authorized in this act shall no longer be entitled to that loan.
7. a. The New Jersey Environmental Infrastructure Trust is authorized to reduce the individual amount of loan funds made available to or on behalf of project sponsors pursuant to sections 2 and 4 of this act based upon final building costs defined in and determined in accordance with rules and regulations adopted by the trust pursuant to section 27 of P.L.1985, c.334 (C.58:11B-27) or rules and regulations adopted by the Commissioner of Environmental Protection pursuant to section 4 of P.L.1985, c.329, section 11 of P.L.1977, c.224 (C.58:12A-11) or section 5 of P.L.1981, c.261. The trust is authorized to use any such reduction in the loan amount made available to a project sponsor to cover that project sponsor's increased costs due to differing site conditions or other allowable expenses as defined and determined in accordance with the rules and regulations adopted by the trust pursuant to section 27 of P.L.1985, c.334 (C.58:11B-27).
b. The trust is authorized to increase each loan amount authorized in sections 2 and 4 of this act by the amount of capitalized interest and issuance expenses allocable to each loan made by the trust pursuant to this act; provided that the increase for issuance expenses, excluding underwriters' discount, original issue discount or premiums, municipal bond insurance premiums and bond rating agency fees, shall not exceed 0.4% of the principal amount of trust bonds issued to make loans authorized by this act.
c. The trust is authorized to increase each loan amount authorized in sections 2 and 4 of this act by the amount of reserve capacity expenses, and by the debt service reserve fund expenses associated with such reserve capacity expenses or associated with loans issued to owners of public water utilities, as may be allowed for the project by the trust in accordance with rules and regulations adopted by the trust pursuant to section 27 of P.L.1985, c.334 (C.58:11B-27).
d. The trust is authorized to increase each loan amount authorized in sections 2 and 4 of this act by the interest earned on amounts deposited for project costs pending their distribution to project sponsors.
e. The trust is authorized to increase each loan amount authorized in sections 2 and 4 of this act by the loan origination fee.
8. The New Jersey Environmental Infrastructure Trust is authorized to increase the individual amount of loan funds made available to project sponsors by the trust pursuant to P.L.1989, c.190, P.L.1990, c.97, P.L.1991, c.324, P.L.1992, c.37, P.L.1993, c.192, P.L.1994, c.105, P.L.1995, c.218, P.L.1996, c.87, P.L.1997, c.222, P.L.1998, c.85, P.L.1999, c.173, P.L.2000, c.93, P.L.2001, c.224, P.L.2002, c.71 or P.L.2003, c. (pending in the Legislature as Assembly Bill No. 3747 and Senate Bill No. 2535 of 2003), provided that adequate savings are achieved, to compensate for a refunding of trust bonds issued to make loans authorized by the aforementioned acts.
9. The expenditure of funds authorized pursuant to this act is subject to the provisions of P.L.1977, c.224 (C.58:12A-1 et seq.), P.L.1985, c.329, P.L.1985, c.334 (C.58:11B-1 et seq.), as amended and supplemented by P.L.1997, c.224, P.L.1992, c.88, P.L.1997, c.223, P.L.1997, c.225 or P.L.1999, c.175, and the rules and regulations adopted pursuant thereto, and the provisions of the Federal Clean Water Act or the Federal Safe Drinking Water Act, as appropriate.
10. This act shall take effect immediately.
STATEMENT
This bill would authorize the New Jersey Environmental Infrastructure Trust (Trust) to expend up to $100 million and any unexpended balances from the authorizations made by P.L.2000, c.93, P.L.2001, c.224 and P.L2002, c.71 to provide loans with an interest rate at or below the prevailing market rate to project sponsors (primarily local governments, public authorities or public water utilities) for a portion of the costs of eligible environmental infrastructure projects. The eligible projects are those included in the "State Fiscal Year 2004 Clean Water Project Priority List" and the "State Fiscal Year 2004 Drinking Water Project Priority List," as well as three clean water and three drinking water environmental infrastructure projects that received loans in the past and which now require supplemental loans in order to meet actual costs.
This bill permits the Trust to expend up to $100 million for loans to local governments, public authorities, private water companies and other private entities for eligible clean water and drinking water projects, and authorizes the use of any remaining moneys from prior authorizations, any loan repayments received to date, and the amounts for capitalized interest, bond issuance expenses and related amounts, to fund the 2003 New Jersey Environmental Infrastructure Financing Program.
A companion bill (Assembly Bill No. 3746 and Senate Bill No. 2515 of 2003) would appropriate certain federal and State moneys to the Department of Environmental Protection for the purpose of implementing the 2003 New Jersey Environmental Infrastructure Financing Program. The Department would use the funds appropriated under that bill to make zero interest loans to project sponsors for up to 50% - 75% of eligible project costs for new clean water projects included in the "State Fiscal Year 2004 Clean Water Project Priority List" and for new drinking water projects included in the "State Fiscal Year 2004 Drinking Water Project Priority List," and to provide supplemental loans for the actual costs of three previously funded clean water and three drinking water environmental infrastructure projects.
The 2003 New Jersey Environmental Infrastructure Financing Program is expected to finance $335.8 million in environmental infrastructure projects for State Fiscal Year 2004.
There is an important change to the 2003 New Jersey Environmental Infrastructure Financing Program. To advance the smart growth initiatives, under the State FY 2004 Program the Trust and the Department are proposing that certain categories of environmental infrastructure projects would qualify for a "Smart Growth Financing Package." The package would involve a change from the traditional "50/50" financing package and provide a "75/25" split of the eligible or allowable project costs. Heretofore, the Program has consisted of a combined loan financing of 100% of the eligible cost of a clean water or a drinking water project: approximately one-half of the loan amount from the Trust with interest at or below the prevailing market rate and one-half from a zero interest loan from the Department. Under the package, the eligible cost of a clean water or a drinking water project would be financed by one-quarter of the loan amount from the Trust and three-quarters from the Department with interest at one-quarter of the prevailing market rate.
Environmental infrastructure projects that would qualify for funding under the package would include: (1) projects serving a designated Urban Center or Urban Complex, as designated by the State Planning Commission; (2) projects that eliminate, reduce or improve combined sewer overflows; and (3) open space and land acquisition projects.
New clean water projects that are eligible for financing in calendar year 2003 under this bill have allowable costs totaling $79.2 million, while previously financed clean water projects that are eligible to receive supplemental loans under the State FY 2004 Program total $3.2 million. Clean water projects include wastewater treatment system projects, stormwater management projects and nonpoint source projects, including landfill closure and new cell construction projects, open space land acquisition and well sealing projects.
New drinking water projects that are eligible for financing in calendar year 2003 under this bill have allowable costs totaling $37.9 million, while previously financed drinking water projects that are eligible to receive supplemental loans under the State FY 2004 Program total $3.4 million. The State FY 2004 Program will finance drinking water projects sponsored on or behalf of eligible municipalities, public authorities, counties, private water purveyors and non-profit noncommunity drinking water systems.