ASSEMBLY, No. 4117
STATE OF NEW JERSEY
INTRODUCED SEPTEMBER 15, 2016
Assemblyman LOUIS D. GREENWALD
District 6 (Burlington and Camden)
Assemblyman TROY SINGLETON
District 7 (Burlington)
Assemblywoman PAMELA R. LAMPITT
District 6 (Burlington and Camden)
Assemblywoman GABRIELA M. MOSQUERA
District 4 (Camden and Gloucester)
Assemblyman ARTHUR BARCLAY
District 5 (Camden and Gloucester)
Assemblyman JAMEL C. HOLLEY
District 20 (Union)
Assemblymen Giblin, Benson and Assemblywoman Handlin
Permits county improvement authorities to establish student loan refinancing loan programs.
CURRENT VERSION OF TEXT
An Act concerning county improvement authorities and amending P.L.1960, c.183.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 11 of P.L.1960, c.183 (C.40:37A-54) is amended to read as follows:
11. The purposes of every authority shall be (a) provision within the county or any beneficiary county of public facilities for use by the State, the county or any beneficiary county, or any municipality in any such county, or any two or more or any subdivisions, departments, agencies or instrumentalities of any of the foregoing for any of their respective governmental purposes, (b) provision within the county or any beneficiary county of public facilities for use as convention halls, or the rehabilitation, improvement or enlargement of any convention hall, including appropriate and desirable appurtenances located within the convention hall or near, adjacent to or over it within boundaries determined at the discretion of the authority, including but not limited to office facilities, commercial facilities, community service facilities, parking facilities, hotel facilities and other facilities for the accommodation and entertainment of tourists and visitors, (c) provision within the county or any beneficiary county of structures, franchises, equipment and facilities for operation of public transportation or for terminal purposes, including development and improvement of port terminal structures, facilities and equipment for public use in counties in, along or through which a navigable river flows, (d) provision within the county or any beneficiary county of structures or other facilities used or operated by the authority or any governmental unit in connection with, or relative to development and improvement of, aviation for military or civilian purposes, including research in connection therewith, and including structures or other facilities for the accommodation of passengers, (e) provision within the county or any beneficiary county of a public facility for a combination of governmental and nongovernmental uses; provided that not more than 50% of the usable space in any such facility shall be made available for nongovernmental use under a lease or other agreement by or with the authority, (f) acquisition of any real property within the county or any beneficiary county, with or without the improvements thereof or thereon or personal property appurtenant or incidental thereto, from the United States of America or any department, agency or instrumentality heretofore or hereafter created, designated or established by or for it, and the clearance, development or redevelopment, improvement, use or disposition of the acquired lands and premises in accordance with the provisions and for the purposes stated in this act, including the construction, reconstruction, demolition, rehabilitation, conversion, repair or alteration of improvements on or to said lands and premises, and structures and facilities incidental to the foregoing as may be necessary, convenient or desirable, (g) acquisition, construction, maintenance and operation of garbage and solid waste disposal systems for the purpose of collecting and disposing of garbage, solid waste or refuse matter, whether owned or operated by any person, the authority or any other governmental unit, within or without the county or any beneficiary county, (h) the improvement, furtherance and promotion of the tourist industries and recreational attractiveness of the county or any beneficiary county through the planning, acquisition, construction, improvement, maintenance and operation of facilities for the recreation and entertainment of the public, which facilities may include, without being limited to, a center for the performing and visual arts, (i) provision of loans and other financial assistance and technical assistance for the construction, reconstruction, demolition, rehabilitation, conversion, repair or alteration of buildings or facilities designed to provide decent, safe and sanitary dwelling units for persons of low and moderate income in need of housing, including the acquisition of land, equipment or other real or personal properties which the authority determines to be necessary, convenient or desirable appurtenances, all in accordance with the provisions of this act, as amended and supplemented, (j) planning, initiating and carrying out redevelopment projects for the elimination, and for the prevention of the development or spread of blighted, deteriorated or deteriorating areas and the disposition, for uses in accordance with the objectives of the redevelopment project, of any property or part thereof acquired in the area of such project, (k) any combination or combinations of the foregoing or following, and (l) subject to the prior approval of the Local Finance Board, the planning, design, acquisition, construction, improvement, renovation, installation, maintenance and operation of facilities or any other type of real or personal property within the county for a corporation or other person organized for any one or more of the purposes described in subsection a. of N.J.S.15A:2-1 except those facilities or any other type of real or personal property which can be financed pursuant to the provisions of P.L.1972, c.29 (C.26:2I-1 et seq.) as amended. A county improvement authority shall also have as its [purpose] purposes the pooling of loans for any local governmental units within the county or any beneficiary county that are refunding bonds in order to achieve more favorable interest rates and terms for those local governmental units , and the refinancing of student loans, whether in the name of a student or parent borrower, for students who are residents of the county.
(cf: P.L.2002, c.42, s.8)
2. Section 12 of P.L.1960, c.183 (C.40:37A-55) is amended to read as follows:
12. Every authority shall be a public body politic and corporate constituting a political subdivision of the State established as an instrumentality exercising public and essential governmental functions to provide for the public convenience, benefit and welfare and shall have perpetual succession and, for the effectuation of its purposes, have the following additional powers:
(a) To adopt and have a common seal and to alter the same at pleasure;
(b) To sue and be sued;
(c) To acquire, hold, use and dispose of its facility charges and other revenues and other moneys;
(d) To acquire, rent, hold, use and dispose of other personal property for the purposes of the authority;
(e) Subject to the provisions of section 26 of this act, to acquire by purchase, gift, condemnation or otherwise, or lease as lessee, real property and easements or interests therein necessary or useful and convenient for the purposes of the authority, whether subject to mortgages, deeds of trust or other liens or otherwise, and to hold and to use the same, and to dispose of property so acquired no longer necessary for the purposes of the authority; provided that the authority may dispose of such property at any time to any governmental unit or person if the authority shall receive a leasehold interest in the property for such term as the authority deems appropriate to fulfill its purposes;
(f) Subject to the provisions of section 13 of this act, to lease to any governmental unit or person, all or any part of any public facility for such consideration and for such period or periods of time and upon such other terms and conditions as it may fix and agree upon;
(g) To enter into agreements to lease, as lessee, public facilities for such term and under such conditions as the authority may deem necessary and desirable to fulfill its purposes, and to agree, pursuant thereto, to be unconditionally obligated to make payments for the term of the lease, without set-off or counterclaim, whether or not the public facility is completed, operating or operable, and notwithstanding the destruction of, damage to, or suspension, interruption, interference, reduction or curtailment of the availability or output of the public facility to which the agreement applies;
(h) To extend credit or make loans to any governmental unit or person for the planning, design, acquisition, construction, equipping and furnishing of a public facility, upon the terms and conditions that the loans be secured by loan and security agreements, mortgages, leases and other instruments, the payments on which shall be sufficient to pay the principal of and interest on any bonds issued for the purpose by the authority, and upon such other terms and conditions as the authority shall deem reasonable;
(i) Subject to the provisions of section 13 of this act, to make agreements of any kind with any governmental unit or person for the use or operation of all or any part of any public facility for such consideration and for such period or periods of time and upon such other terms and conditions as it may fix and agree upon;
(j) (1) To borrow money and issue negotiable bonds or notes or other obligations and provide for and secure the payment of any bonds and the rights of the holders thereof, and to purchase, hold and dispose of any bonds;
(2) To issue bonds, notes or other obligations to provide funding to a municipality that finances the purchase and installation of renewable energy systems and energy efficiency improvements by property owners as provided in section 2 of P.L.2011, c.187 (C.40:56-13.1);
(k) To apply for and to accept gifts or grants of real or personal property, money, material, labor or supplies for the purposes of the authority from any governmental unit or person, and to make and perform agreements and contracts and to do any and all things necessary or useful and convenient in connection with the procuring, acceptance or disposition of such gifts or grants;
(l) To determine the location, type and character of any public facility and all other matters in connection with all or any part of any public facility which it is authorized to own, construct, establish, effectuate or control;
(m) To make and enforce bylaws or rules and regulations for the management and regulation of its business and affairs and for the use, maintenance and operation of any public facility, and to amend the same;
(n) To do and perform any acts and things authorized by this act under, through or by means of its own officers, agents and employees, or by contract with any governmental unit or person;
(o) To acquire, purchase, construct, lease, operate, maintain and undertake any project and to fix and collect facility charges for the use thereof;
(p) To mortgage, pledge or assign or otherwise encumber all or any portion of its revenues and other income, real and personal property, projects and facilities for the purpose of securing its bonds, notes and other obligations or otherwise in furtherance of the purpose of this act;
(q) To extend credit or make loans to redevelopers for the planning, designing, acquiring, constructing, reconstructing, improving, equipping and furnishing any redevelopment project or redevelopment work;
(r) To conduct examinations and investigations, hear testimony and take proof, under oath at public or private hearings of any material matter, require the attendance of witnesses and the production of books and papers and issue commissions for the examination of witnesses who are out of the State, unable to attend, or excused from attendance;
(s) To authorize a committee designated by it consisting of one or more members, or counsel, or any officer or employee to conduct any such investigation or examination, in which case such committee, counsel, officer or employee shall have power to administer oaths, take affidavits and issue subpenas or commissions;
(t) To enter into any and all agreements or contracts, execute any and all instruments, and do and perform any and all acts or things necessary, convenient or desirable for the purposes of the authority or to carry out any power expressly given in this act subject to the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.); [and]
(u) To pool loans for any local governmental units within the county or any beneficiary county that are refunding bonds and do and perform any and all acts or things necessary, convenient or desirable for the purpose of the authority to achieve more favorable interest rates and terms for those local governmental units; and
(v) To make loans, and advertise the availability of such loans, to any student borrower who is a resident of the county, and to any parent borrower who is a resident of the State or has their primary employment within the State and who is the obligor on a student loan for a student who is a resident of the county, for the purpose of refinancing that student loan at a lower interest rate. For the purposes of this subsection, “student loan” means any amount borrowed, whether through a public or private lender, for the purpose of attending an institution of higher education or a proprietary institution licensed in New Jersey to offered academic degrees.
(1) A student loan refinancing loan shall be made upon terms and conditions as determined by the authority, and shall include but not be limited to:
(i) a confession of judgment clause to permit any outstanding student loan refinancing loan balance to be entered as a judgment in any jurisdiction, and applied as a wage attachment or garnishment without notice or a hearing, on or after the loan has been declared by the authority to be in default, which for the purpose of this paragraph means that at least three consecutive monthly payments have not been made when due; and
(ii) at least two different types of repayment plans, one of which shall provide a percentage-of-discretionary income repayment plan. Any repayment plan, to the extent practicable, shall include deferment or forbearance options. All repayment plans shall allow for interest-free deferment of payments upon certification of temporary disability of the borrower that prevents them from exercising the usual and customary duties of their employment.
(2) The interest rate and payments on student loan refinancing loans shall be set by the authority at levels sufficient to pay the principal of, and interest on, any bonds issued by the authority for this purpose, and upon such other terms and conditions as the authority shall deem reasonable; provided, however, that the authority shall not refinance a student loan when the proposed monthly payments would result in an undue hardship for the borrower, taking into consideration their current sources of income and other expenses. Any collections from student loan refinancing loan payments in excess of the amount necessary to pay the principal of, and interest on, any bonds issued by the authority for this purpose shall be used solely to cover the reasonable costs of administering the student loan refinancing program and losses from defaults and other risks.
(3) It is intended that any student loan refinanced pursuant to this subsection shall not be dischargeable in bankruptcy.
(4) The authority shall ensure that a borrower may contact and speak with a live representative of the authority who can access the borrower’s loan information and who has knowledge of the student loan refinancing program.
(cf: P.L.2011, c.187, s.4)
3. This act shall take effect immediately.
This bill is intended to permit county improvement authorities to establish programs to refinance student loan debt, including loans to attend proprietary institutions licensed to offer academic degrees (for example, DeVry University – New Jersey) for students who are residents of the county. A student-borrower who is a resident of the county or a parent-borrower who is a New Jersey resident or employee and whose child-student is a resident of the county could apply to refinance that student loan debt at a lower interest rate, which loan may stay in place as long as the student remains a resident of New Jersey. The purpose for permitting county improvement authorities to refinance student loan debt is to offer a borrower an option to lower their loan interest rate, decreasing the borrower’s student debt obligation and making it financially easier for former students to remain in New Jersey. Currently, New Jersey students graduate with an average of $32,700 in student loan debt.
The county improvement authority would set the interest rate and other terms of the student loan refinancing loan, provided that the interest rates charged must be sufficient to pay the principal and interest on any bonds issued by the authority to fund its program. The authority would have to provide at least two different types of repayment plans, one of which must provide, to the extent practicable, deferment or forbearance options.
To ensure no undue hardship is placed on the borrower, an authority is not permitted to refinance a student loan if the payments would result in an undue hardship on the borrower, taking into consideration their current income and expenses. Although student loans are generally non-dischargeable in federal bankruptcy proceedings, some case law indicates that bankruptcy judges may discharge loans for undue hardship. The bill provides that it is intended that any student loan refinancing loan not be dischargeable in bankruptcy. Since most refinancing borrowers have no property, such as a house, to secure a refinancing student loan, it is important for the authority to ensure that the flow of regular monthly payments from refinancing borrowers is sufficient to pay the principal and interest on any authority bonds issued to fund its student loan refinancing program.
Lastly, the bill would require that the authority ensure that a borrower may contact and speak with a live representative of the authority who can access the borrower’s loan information and who has knowledge of the student loan refinancing program.