S812

An Act creating the State Debt Capacity Advisory Commission and supplementing Title 52 of the Revised Statutes.

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

1. a. There is created a commission to be known as the “State Debt Capacity Advisory Commission.” The purpose of the commission shall be to publish and make available to the public, and maintain in electronic form on the State government Internet website, an annual report on the State's overall debt, which shall include: (1) a detailed analysis and narrative discussion of the State's ability to afford an increase in its overall debt by incurring additional debt, and (2) nonbinding, advisory information on the affordability of the amount of any such increase for purposes of assisting State policymakers evaluate priorities for legislative and executive considerations that may impact the amount of State debt that may be incurred or issued during future State fiscal years. The annual report of the commission shall be submitted, on or before December 1, to the Governor and both houses of the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), and the commission is authorized to issue revisions of the annual report at other times as the commission deems appropriate.

b. In presenting its analysis, narrative discussion and nonbinding advisory information, the commission shall include in the annual report:

(1) An estimate of revenues available for the next ten fiscal years to pay debt service on State debt, including State general revenues plus any revenues specifically pledged to pay debt service;

(2) An estimate of additional debt issuance for the next ten fiscal years for the State's existing borrowing programs;

(3) A schedule of the annual debt service requirements, including principal and interest allocation, on outstanding State debt and an estimate of the annual debt service requirements on State debt for each of the next ten fiscal years;

(4) The calculations and listing of pertinent debt ratios, including, but not limited to, debt service to State revenues available to pay debt service, debt to State total personal income, and debt per capita for the State's net tax-supported debt;

(5) The estimated debt capacity available over the next ten fiscal years benchmarked to various ratios of debt service to State revenue;

(6) A comparison of the State's debt ratios with the comparable debt ratios for the ten most populous states; and

(7) Such other information as the commission deems relevant to the foregoing matters.

The analysis, narrative discussion and nonbinding advisory information reported by the commission shall not constitute an official State disclosure statement of material information that is required to be provided by State issuers and shall not represent a finding or an opinion of any State issuing official.

c. The commission shall be comprised of nine members, two of whom shall be the State Auditor, ex officio, or a designee, and the Legislative Budget and Finance Officer, ex officio, or a designee; three of whom shall be appointed by the Governor who shall be members of the public with education and experience in areas of public budget and finance, and who shall not hold elective or other public office; and four of whom shall be appointed, one each, by the Senate President, the Senate Minority Leader, the Assembly Speaker, and the Assembly Minority Leader, each of whom shall be members of the public with education and experience in areas of public budget and finance, and shall not hold elective or other public office. Vacancies in the membership of the commission shall be filled in the same manner provided for the original appointments. All members, including any designees, shall be voting members and a majority of all the authorized members shall constitute a quorum. Each public member shall serve for a term of four years and until the appointment and qualification of that member's successor, and may serve, if so appointed, for successive terms. Of the seven public members first appointed to the commission, two shall be appointed for a two-year term, two shall be appointed for a three-year term, and three shall be appointed for a four-year term.

d. The commission shall organize within 60 days after the appointment of all of its public members. The commission shall elect a chairperson from among its members and appoint a secretary who need not be a member of the commission.

e. The commission may meet at the call of its chairperson and at the times and in the places it deems necessary and appropriate to fulfill its charge. The commission shall be entitled to call to its assistance, and avail itself of the services of, the employees of any State department, board, bureau, commission, or agency as it may require and as may be available for its purposes. The commission may make use of existing studies, surveys, plans, data and other materials in the possession of any State agency and each such agency is hereby authorized to make such staff and information available to the commission so that the commission may have available to it current information with respect to information essential to the completion of, and any necessary revisions to, the commission's annual report.

f. The members of the commission shall serve without compensation, but shall be eligible for reimbursement for necessary and reasonable expenses incurred in the performance of their official duties, including traveling and other miscellaneous expenses, as the commission deems necessary for the members to perform their duties, within the limits of the funds appropriated or otherwise made available to the commission for its purposes. Each State officer serving as a member of the commission, and any other person serving as a member designee, may serve on the commission without forfeiture of office or employment and with no loss or diminution in the compensation, status, rights and privileges which they otherwise enjoy.

2. This act shall take effect immediately.

STATEMENT

This bill creates a State Debt Capacity Advisory Commission with members from the legislative branch and the public that will prepare an annual State debt affordability analysis.

The annual State debt affordability analysis by the State Debt Capacity Advisory Commission, will include: (1) a detailed analysis and narrative discussion of the State's ability to afford an increase in its overall debt by incurring additional debt, and (2) nonbinding, advisory information on the affordability of the amount of any such increase for purposes of assisting State policymakers evaluate priorities for legislative and executive considerations that may impact the amount of State debt that may be incurred or issued during future State fiscal years.

The annual report to be prepared, published and made available to the public, no later than December 1, will include:

• An estimate of revenues available for the next ten fiscal years to pay debt service on State debt, including State general revenues plus any revenues specifically pledged to pay debt service;

• An estimate of additional debt issuance for the next ten fiscal years for the State's existing borrowing programs;

• A schedule of the annual debt service requirements, including principal and interest allocation, on outstanding State debt and an estimate of the annual debt service requirements on State debt for each of the next ten fiscal years;

• The calculations and listing of pertinent debt ratios, including, but not limited to, debt service to State revenues available to pay debt service, debt to State total personal income, and debt per capita for the State's net tax-supported debt;

• The estimated debt capacity available over the next ten fiscal years benchmarked to various ratios of debt service to State revenue;

• A comparison of the State's debt ratios with the comparable debt ratios for the ten most populous states; and

• Such other information as the commission deems relevant to the foregoing matters.

The analysis, narrative discussion and nonbinding advisory information reported by the commission shall not constitute an official State disclosure statement of material information that is required to be provided by State issuers of debt and shall not represent a finding or an opinion of any State debt issuing official.

The commission shall be comprised of nine members, two of whom shall be the State Auditor, ex officio, or a designee, and the Legislative Budget and Finance Officer, ex officio, or a designee, three of whom shall be appointed by the Governor who shall be members of the public with education and experience in areas of public budget and finance, and who shall not hold elective or other public office; and four of whom shall be appointed, one each, by the Senate President, the Senate Minority Leader, the Assembly Speaker, and the Assembly Minority Leader, each of whom shall be members of the public with education and experience in areas of public budget and finance, and shall not hold elective or other public office.