SENATE, No. 1471

STATE OF NEW JERSEY

212th LEGISLATURE

 

INTRODUCED FEBRUARY 27, 2006

 


 

Sponsored by:

Senator RICHARD J. CODEY

District 27 (Essex)

Senator BARBARA BUONO

District 18 (Middlesex)

 

Co-Sponsored by:

Senator Bryant

 

 

 

 

SYNOPSIS

     Authorizes the issuance of cigarette tax revenue bonds by the NJEDA to fund State capital projects including $150 million for stem cell research facilities and $50 million for biomedical research facilities.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act authorizing the financing of the cost of State capital projects with the proceeds of cigarette tax securitization bonds to be issued by the New Jersey Economic Development Authority, amending P.L.2004, c.68 (C.34:1B-21.16 et seq.).

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.  The Title of P.L.2004, c.68 is amended to read as follows:

An Act authorizing the issuance of cigarette tax securitization bonds, notes or other obligations by the New Jersey Economic Development Authority for the purposes of providing revenue to meet appropriations in [any] State [fiscal year] Fiscal Year 2005 commencing on [or after] July 1, 2004, thereafter providing funding for State capital projects, and providing a source of payment and security for such bonds, notes or other obligations, supplementing P.L.1974, c.80 (C.34:1B-1 et seq.) and amending P.L.1997, c.264.

(cf: P.L.2004, c.68, Title)

 

     2.  Section 2 of P.L.2004, c.68 (C.34:1B-21.17) is amended to read as follows:

     2.  The following words or terms as used in this act shall have the following meanings unless a different meaning clearly appears from the context:

     "Authority" means the New Jersey Economic Development Authority created pursuant to P.L.1974, c.80 (C.34:1B-1 et seq.);

     "Biomedical research facilities" means one or more facilities located in Camden, New Jersey, that will be utilized for biomedical research and related activities, including all facilities ancillary thereto;

     "Bonds" means any bonds, notes or other obligations issued or entered into by the authority pursuant to this act;

     "Capital cost" means the expenses incurred in connection with: the planning, construction, reconstruction, development, erection, acquisition, extension, improvement, rehabilitation and equipping of State capital projects authorized by this act; the acquisition by purchase, lease, or otherwise, and the development of any real or personal property for use in connection with a State capital construction project authorized by this act, including any rights or interests therein, the execution of any agreements and franchises deemed to be necessary or useful and convenient in connection with any State capital construction project authorized by this act; the procurement of engineering, inspection, planning, legal, financial, or other professional services; the administrative, organizational, operating or other expenses incident to the financing, completing, and placing into service of any State capital construction project authorized by this act;

     "Cigarette Tax" means the tax imposed by the State pursuant to the "Cigarette Tax Act," P.L.1948, c.65 (C.54:40A-1 et seq.), as amended and supplemented, on the sale, use or possession for sale or use within the State of each cigarette;

     "Cigarette Tax Securitization Fund" means the fund by that name created and established pursuant to section 7 of this act;

     "Cigarette Tax Securitization Proceeds Fund" means the fund by that name created and established pursuant to section 3 of this act;

     "Dedicated Cigarette Tax Revenue Fund" means the fund by that name created and established pursuant to section 5 of this act;

     "Dedicated Cigarette Tax Revenues" means an amount equal to the revenue collected by the State during each State fiscal year beginning on and after July 1, 2006 from $0.0325 of the cigarette tax; [and]

     "State capital construction project" means a project that includes the acquisition of land, and the acquisition and construction of new structures and equipment for major capital facilities for State use and use by other units of government, including stem cell research facilities and biomedical research facilities, whose estimated cost of land, planning, acquisition, construction, furnishing and equipping is estimated to be $50,000 or more;

     "Stem cell research facilities" means facilities located in New Brunswick, New Jersey, that shall be primarily utilized for stem cell research, including all facilities ancillary thereto;  and

     "Refunding Bonds" means any bonds, notes or other obligations issued by the authority to refinance bonds, notes or other obligations previously issued or entered into by the authority pursuant to this act.

(cf: P.L.2004, c.68, s.2)

 

     3.  Section 3 of P.L.2004, c.68 (C.34:1B-21.18) is amended to read as follows:

     3.  a.  The authority shall establish and maintain a special nonlapsing fund to be known as the "Cigarette Tax Securitization Proceeds Fund" into which shall be deposited the following moneys:

     (1) the proceeds from the sale of all bonds (other than refunding bonds) issued by the authority pursuant to [this act] P.L.2004, c.68 (C.34:1B-21.16 et seq.) which are remaining after any required deposit to any reserve or other fund established for such bonds or any refunding bonds in accordance with subsection a. of section 4 of [this act] P.L.2004, c.68 (C.34:1B-21.19) and after the payment of all costs, fees and other expenses related to, or incurred by the authority or the State in connection with, the issuance of such bonds or any refunding bonds;

     (2) any amounts which shall be appropriated by the Legislature for the purposes of such fund; and

     (3) any other amounts or funds which the authority shall determine to deposit into such fund.

     Moneys on deposit in the Cigarette Tax Securitization Proceeds Fund shall be invested in such obligations as the authority may determine or as shall otherwise be provided in any contract between the authority and the State Treasurer authorized and entered into pursuant to section 6 of [this act] P.L.2004, c.68 (C.34:1B-21.21), and interest or other earnings on any such investments shall be credited to such fund.

     b.  (1)  Amounts on deposit in the Cigarette Tax Securitization Proceeds Fund [shall be] from the proceeds of bonds issued on or before January 1, 2005, having been withdrawn by the authority from time to time during State Fiscal Year 2005, upon written request of the State Treasurer or as otherwise provided in any contract between the authority and the State Treasurer authorized and entered into pursuant to section 6 of [this act] P.L.2004, c.68 (C.34:1B-21.21), and having been paid to the State Treasurer for deposit into either the General Fund of the State or the Cigarette Tax Securitization Fund, as determined by the State Treasurer, [and] have been used for [any] lawful [purpose] purposes of the State for which moneys on deposit in the General Fund [may] might be used.  All amounts withdrawn from the Cigarette Tax Securitization Proceeds Fund and deposited into the General Fund of the State as provided in this subsection [shall represent] have represented financial resources and revenues of the State from that fund as certified by the Governor pursuant to Article VIII, Section II, paragraph 2 of the State Constitution for the State annual appropriation act for [such] State [fiscal year , and as may be applicable for such annual appropriation act as may be amended and supplemented from time to time] Fiscal Year 2005. [Notwithstanding any provision of this subsection to the contrary,]  No request by the State Treasurer [shall not request] has been made of the authority to pay [, and the authority shall not pay,] to the State Treasurer during [any] State [fiscal year] Fiscal Year 2005 amounts then on deposit in the Cigarette Tax Securitization Proceeds Fund which are in excess of the amounts anticipated as revenues from such fund during State Fiscal Year 2005.

     (2)  (a)  The Legislature finds and declares that:

     (i)  Millions of people suffer from currently incurable diseases and injuries, and recent medical science, including the use of new regenerative medical therapies such as the use of a special type of human cells called "stem cells," provides indications that cures and treatments for certain of these diseases and injuries can be developed;

     (ii)  The development of such cures and treatments will improve New Jersey's health care system, can reduce long-term health care costs, and can benefit the New Jersey economy by creating projects, jobs and therapies;

     (iii)  The State of New Jersey is home to many of the leading life sciences, biotechnology and pharmaceutical companies and the State seeks to preserve its leading role, attract investment, attract scientists, enhance research and, toward that end, seeks to finance facilities for entities involved in stem cell research and biomedical research;

     (iv)  Financing stem cell research facilities and biomedical research will substantially further the public interest and can most economically be financed through a bond issue; and

     (v)  The State of New Jersey has previously authorized the "Cigarette Tax Securitization Act of 2004," P.L.2004, c.68 (C.34:1B-21.16 et seq.), and has determined that bonds issued by the New Jersey Economic Development Authority under such act are the most desirable means to provide funding for such facilities and projects.

     (b)  An amount not to exceed the first $150,000,000 in the aggregate from the proceeds of bonds issued after March 1, 2006, authorized under P.L.2004, c.68 (C.34:1B-21.16 et seq.), on deposit in the Cigarette Tax Securitization Proceeds Fund shall be withdrawn by the authority from time to time, and shall be utilized by the authority, pursuant to a State capital construction project agreement between the State Treasurer and the authority, to fund the capital costs of stem cell research facilities.  Any agreement entered into pursuant to this subparagraph shall specify the scope of the project, the use of the proceeds of the bonds, the permitted uses of the project, the use of any rental income from the project, and such other matters as the State Treasurer shall determine.

     (c)  An amount not to exceed the subsequent $50,000,000 in the aggregate from the proceeds of bonds issued after March 1, 2006, authorized under P.L.2004, c.68 (C.34:1B-21.16 et seq.), on deposit in the Cigarette Tax Securitization Proceeds Fund shall be withdrawn by the authority from time to time, and shall be utilized by the authority, pursuant to a State capital construction project agreement between the State Treasurer and the authority, to fund the capital costs of biomedical research facilities that will be utilized for biomedical research and related activities, including all facilities ancillary thereto.  Any  agreement  entered into pursuant to this subparagraph shall specify the scope of the project, the use of the proceeds of the bonds, the permitted uses of the project, the use of any rental income from the project, and such other matters as the State Treasurer shall determine.

     (d)  Except as specifically provided pursuant to subparagraphs (b) and (c) of this paragraph (2), amounts on deposit in the Cigarette Tax Securitization Proceeds Fund from the proceeds of bonds issued on or after March 1, 2006, shall be withdrawn by the authority from time to time, upon written request of the State Treasurer or as otherwise provided in any contract between the authority and the State Treasurer authorized and entered into pursuant to P.L.       , c.       (C.   ) (pending before the Legislature as this bill), and shall be appropriated by law exclusively to fund the capital costs of State capital construction projects.

(cf: P.L.2004, c.68 , s.3)

 

     4.  This act shall take effect immediately.

 

 

STATEMENT

 

     This bill authorizes the financing of the capital costs of State capital construction projects with the proceeds of cigarette tax securitization bonds to be issued by the New Jersey Economic Development Authority.  During State Fiscal Year 2005 these bonds were issued to provide $1,190,000,000 in General Fund revenues to support the annual appropriations act.  However, that debt did not require the securitization of the full dedicated revenue which is an amount equal to the revenue collected by the State during each State fiscal year beginning on and after July 1, 2006 from $0.0325 of the cigarette tax.

     That revenue stream will be securitized under this bill to issue bonds to fund the capital costs of the acquisition of land, and the acquisition and construction of new structures and equipment for major capital facilities for State use and use by other units of government, whose estimated cost of land, planning, acquisition, construction, furnishing and equipping is estimated to be $50,000 or more.

     The bill also specifically authorizes two capital construction projects: (1)  from the first $150 million of bonds proceeds issued after March 1, 2006, for the capital costs of stem cell research facilities located in New Brunswick, New Jersey, that shall be primarily utilized for stem cell research, including all ancillary facilities; and (2) from the next $50 million of bond proceeds for the capital costs of biomedical research facilities located in Camden, New Jersey, that shall be primarily utilized for biomedical research, including all ancillary facilities.

     Millions of people suffer from currently incurable diseases and injuries, and recent medical science, including the use of new regenerative medical therapies such as the use of a special type of human cells called "stem cells," provides indications that cures and treatments for certain of these diseases and injuries can be developed.  The development of such cures and treatments will improve New Jersey's health care system, may reduce long-term health care costs, and can benefit the New Jersey economy by creating projects, jobs and therapies.  This State is home to many of the leading life sciences, biotechnology and pharmaceutical companies and through the funding provided by this bill the State seeks to preserve that leading role, attract investment, attract scientists, enhance research and, toward that end, seeks to finance facilities for entities involved in stem cell research and biomedical research.  The financing of stem cell research and biomedical research facilities will substantially further the public interest and can most economically be financed through bond issues under the "Cigarette Tax Securitization Act of 2004," P.L.2004, c.68 (C.34:1B-21.16 et seq.).  Other future bond proceeds from sales of bonds under that act may provide funding for other State capital construction projects.