A906

An Act authorizing the creation of a debt of the State of New Jersey by the issuance of bonds of the State in the aggregate principal amount of $250,000,000 for the purpose of providing financial aid to local school districts for the construction of public school facilities; providing the ways and means to pay the interest on the bonds and also to pay and discharge the principal thereof; providing for the submission of this act to the people at a general election; and providing an appropriation therefor.

1. This act shall be known and may be cited as the "Public School Facilities Bond Act of 1994."

2. The Legislature finds and declares that the provision of safe and adequate public school buildings is an essential State obligation; that there is a current unmet need of more than one billion dollars for the renovation, repair and construction of those facilities; that the lack of adequate facilities has seriously impeded the ability of local school districts to provide a thorough and efficient system of education to all pupils as required by the State Constitution; and that the State cannot ignore conditions which jeopardize the health, safety and general welfare of our children.

"Construction" means, in addition to the usual meaning thereof, the designing, engineering, financing, extension, repair, remodeling, rehabilitation or alteration, or any combination thereof, of a public school building or any part thereof.

"Cost" means the expenses incurred in connection with: the acquisition by purchase, lease or otherwise, the development, and the construction of any project 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 any project authorized by this act, including any rights or interests therein; the execution of any agreements and franchises deemed by the department to be necessary or useful and convenient in connection with any project authorized by this act; the procurement of engineering, inspection, planning, legal, financial or other professional services, including the services of a bond registrar or an authenticating agent; the issuance of bonds, or any interest or discount thereon; the administrative, organizational, operating or other expenses incident to the financing, completing and placing into service of projects authorized by this act; the establishment of a reserve fund or funds for working capital, operating, maintenance or replacement expenses and for the payment or security of principal or interest on bonds, as the Director of the Division of Budget and Accounting in the Department of the Treasury may determine; and reimbursement to any fund of the State of moneys which may have been transferred or advanced therefrom to any fund created by this act, or of any moneys which may have been expended therefrom for or in connection with any project authorized by this act.

"Government securities" means any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any federal agency to the extent those obligations are unconditionally guaranteed by the United States of America and any certificates or any other evidences of an ownership interest in those obligations of, or unconditionally guaranteed by, the United States of America or in specified portions of those obligations, which may consist of the principal of, or the interest on, those obligations.

"Local school district" means any school district which is operated under the provisions of Title 18A of the New Jersey Statutes and which is responsible for the provision of the free public education to all children.

"Project" means any work relating to the construction of a public school facility by a local school district.

"Public school" means a school, under collegiate grade, which is operated by a local school district.

4. The State Board of Education, shall adopt, pursuant to law, the rules and regulations necessary to carry out the provisions of this act. The commissioner shall review and consider the findings and recommendations of the commission in the administration of the provisions of this act.

5. Bonds of the State of New Jersey in the aggregate principal amount of $250,000,000 are hereby authorized for the construction, renovation, repair or alteration of public school buildings the proceeds of which shall be allocated on the basis of a facilities needs assessment as determined by the State Board of Education in accordance with the following estimates of costs:

a. For the "Public School Facilities Loan Fund" in the State Department of Education as established pursuant to P.L. , c. (C. ) (now pending before the Legislature as Assembly Bill No. 505 of 1994 ) - a minimum of $190,000,000.

b. For grants to socioeconomically and geographically disadvantaged school districts for the cost of construction of public school facilities to be used for comprehensive pre-kindergarten and full day kindergarten programs -a maximum of $60,000,000. Of the $60,000,000, $30,000,000shall be used for grants to special needs districts as defined in section 3 of P.L.1990, c.52 (C.18A:7D-3) in an amount equal to at least $1,000,000 per grant which shall be used for the construction of two classrooms, a room for social services and a community meeting room. The remainder of the grant funds shall be allocated among the socioeconomically and geographically disadvantaged districts, including the special needs districts, for the construction of additional classrooms based upon each district's anticipated enrollment in pre-kindergarten and full day kindergarten programs. The grants so allocated shall not exceed $250,000 per classroom. The Commissioner of Education shall establish application procedures and requirements. Each grant shall be contingent upon the recipient local board of education both entering into a contract or contracts for the commencement of construction of the public school facility within one year of the awarding of the grant and upon receiving approval by the Commissioner of Education for a comprehensive plan to provide pre-kindergarten and full day kindergarten programs within the district. The State Board of Education shall adopt standard model plans for the construction of school facilities for pre-kindergarten and full day kindergarten programs to be used by school districts applying for grants under this subsection.

6. The bonds authorized under this act shall be serial bonds, term bonds, or a combination thereof, and shall be known as "Public School Facilities Bonds." These bonds shall be issued from time to time as the issuing officials herein named shall determine, and may be issued in coupon form, fully registered form or book-entry form. These bonds shall be subject to redemption prior to maturity and shall mature and be paid no later than 35 years from the respective dates of their issuance.

7. The Governor, the State Treasurer and the Director of the Division of Budget and Accounting in the Department of the Treasury, or any two of these officials, herein referred to as "the issuing officials," are authorized to carry out the provisions of this act relating to the issuance of bonds, and shall determine all matters in connection therewith subject to the provisions of this act. If an issuing official is absent from the State or incapable of acting for any reason, the powers and duties of that issuing official shall be exercised and performed by the person authorized by law to act in an official capacity in the place of that issuing official.

8. Bonds issued in accordance with the provisions of this act shall be direct obligations of the State of New Jersey, and the faith and credit of the State are pledged for the payment of the interest thereon when due and for the payment of the principal thereof at maturity. The principal of and interest on the bonds shall be exempt from taxation by the State or by any county, municipality or other taxing district of the State.

9. The bonds shall be signed in the name of the State by the Governor or by his facsimile signature, under the Great Seal of the State, which seal may be by facsimile or by way of any other form of reproduction on the bonds, and attested by the manual or facsimile signature of the Secretary of State, or an assistant Secretary of State, and shall be countersigned by the facsimile signature of the Director of the Division of Budget and Accounting in the Department of the Treasury and may be manually authenticated by an authenticating agent or bond registrar, as the issuing officials shall determine. Interest coupons, if any, attached to the bonds shall be signed by the facsimile signature of the director. The bonds may be issued notwithstanding that an issuing official signing them or whose manual or facsimile signature appears thereon has ceased to hold office at the time of issuance or at the time of the delivery of the bonds to the purchaser thereof.

10. a. The bonds shall recite that they are issued for the purposes set forth in section 5 of this act, that they are issued pursuant to this act, and that this act was submitted to the people of the State at the general election held in the month of November, 1994 and that this act was approved by a majority of the legally qualified voters of the State voting thereon at the election. This recital shall be conclusive evidence of the validity of the bonds and of the authority of the State to issue them. Any bonds containing this recital shall, in any suit, action or proceeding involving their validity, be conclusively deemed to be fully authorized by this act and to have been issued, sold, executed and delivered in conformity herewith and with all other provisions of laws applicable hereto, and shall be incontestable for any cause.

b. The bonds shall be issued in the denominations and in the form or forms, whether coupon, fully-registered or book-entry, and with or without provisions for the interchangeability thereof, as may be determined by the issuing officials.

11. When the bonds are issued from time to time, the bonds of each issue shall constitute a separate series to be designated by the issuing officials. Each series of bonds shall bear the rate or rates of interest as may be determined by the issuing officials, which interest shall be payable semiannually; except that the first and last interest periods may be longer or shorter, in order that intervening semiannual payments may be at convenient dates.

12. The bonds shall be issued and sold at such price or prices and under such terms, conditions and regulations, as the issuing officials may prescribe, after notice of the sale, published at least once in at least three newspapers published in New Jersey, and at least once in a publication carrying municipal bond notices and devoted primarily to financial news, published in New Jersey or in the City of New York, the first notice to appear at least five days prior to the day of bidding. The notice of sale may contain a provision to the effect that any or all bids in pursuance thereof may be rejected. In the event of rejection or of failure to receive any acceptable bid, the issuing officials, at any time within 60 days from the date of the advertised sale, may sell the bonds at a private sale at such price or prices and under such terms and conditions as the issuing officials may prescribe. The issuing officials may sell all or part of the bonds of any series as issued to any State fund or to the federal government or any agency thereof, at a private sale, without advertisement.

13. Until permanent bonds are prepared, the issuing officials may issue temporary bonds in such form and with such privileges to their registration and exchange for permanent bonds as may be determined by the issuing officials.

14. The proceeds from the sale of the bonds shall be paid to the State Treasurer and shall be held by him in a separate fund, which shall be known as the "Public School Facilities Bond Fund." The proceeds of this fund shall be deposited in such depositories as may be selected by the State Treasurer to the credit of the fund.

15. a. The moneys in the "Public School Facilities Bond Fund" are specifically dedicated and shall be applied to the costs of the purposes set forth in section 5 of this act, and all such moneys are appropriated for those purposes, and no such moneys shall be expended for those purposes, except as otherwise authorized in this act without the specific appropriation thereof by the Legislature, but bonds may be issued as herein provided, notwithstanding that the Legislature has not adopted an act making a specific appropriation of any of the moneys. Any act appropriating moneys from the "Public School Facilities Bond Fund" shall identify the specific project or projects to be funded with those moneys.

b. At any time prior to the issuance and sale of bonds under this act, the State Treasurer is authorized to transfer from available money in any fund of the treasury of the State to the credit of the "Public School Facilities Bond Fund" the sum or sums as the State Treasurer may deem necessary. The sum so transferred shall be returned to the same fund of the treasury by the State Treasurer from the proceeds of the sale of the first issue of bonds.

c. Pending their application to the purposes provided in this act, the moneys in the "Public School Facilities Bond Fund" may be invested and reinvested as are other trust funds in the custody of the State Treasurer, in the manner provided by law. Net earnings received from the investment or deposit of the "Public School Facilities Bond Fund" shall be paid into the "Public School Facilities Bond Fund".

16. If any coupon bond or coupon or registered bond is lost, mutilated or destroyed, a new bond or coupon shall be executed and delivered of like tenor, in substitution for the lost, mutilated or destroyed bond or coupon, upon the owner furnishing to the issuing officials such evidence satisfactory to them of the loss, mutilation or destruction of the bond or coupon; the ownership thereof; and the security, indemnity and reimbursement for expenses connected therewith, as the issuing officials may require.

17. The accrued interest received upon the sale of the bonds shall be applied to the discharge of a like amount of interest upon the bonds when due. Any expense incurred by the issuing officials for advertising, engraving, printing, clerical, authenticating, registering, legal or other services necessary to carry out the duties imposed upon them by the provisions of this act shall be paid from the proceeds of the sale of the bonds by the State Treasurer, upon the warrant of the Director of the Division of Budget and Accounting in the Department of the Treasury, in the same manner as other obligations of the State are paid.

18. Bonds of each series issued hereunder shall mature, including any sinking fund redemptions, not later than the 35th year from the date of issue of the series, and in such amounts as shall be determined by the issuing officials. The issuing officials may reserve to the State by appropriate provision in the bonds of any series the power to redeem any of the bonds prior to maturity at the price or prices and upon the terms and conditions as may be provided in the bonds.

19. Any bond or bonds issued hereunder which are subject to refinancing pursuant to the "Refunding Bond Act of 1985," P.L.1985, c.74 as amended by P.L.1992, c.182 (C.49:2B-1 et seq.), shall no longer be deemed to be outstanding, shall no longer constitute a direct obligation of the State of New Jersey, and the faith and credit of the State shall no longer be pledged to the payment of the principal of, redemption premium, if any, and interest on the bonds, and the bonds shall be secured solely by and payable solely from moneys and government securities deposited in trust with one or more trustees or escrow agents, which trustees and escrow agents shall be trust companies or national or state banks having powers of a trust company, located either within or without the State, as provided herein, whenever there shall be deposited in trust with the trustees or escrow agents, as provided herein, either moneys or government securities, including government securities issued or held in book-entry form on the books of the Department of Treasury of the United States, the principal of and interest on which when due will provide money which, together with the moneys, if any, deposited with the trustees or escrow agents at the same time, shall be sufficient to pay when due the principal of, redemption premium, if any, and interest due and to become due on the bonds on or prior to the redemption date or maturity date thereof, as the case may be; provided the government securities shall not be subject to redemption prior to their maturity other than at the option of the holder thereof. The State of New Jersey hereby covenants with the holders of any bonds for which government securities or moneys shall have been deposited in trust with the trustees or escrow agents as provided in this section that, except as otherwise provided in this section, neither the government securities nor moneys so deposited with the trustees or escrow agents shall be withdrawn or used by the State for any purpose other than, and shall be held in trust for, the payment of the principal of, redemption premium, if any, and interest to become due on the bonds; provided that any cash received from the principal or interest payments on the government securities deposited with the trustees or escrow agents, to the extent the cash will not be required at any time for that purpose, shall be paid over the to State, as received by the trustees or escrow agents, free and clear of any trust, lien, pledge or assignment securing the bonds; and to the extent the cash will be required for that purpose at a later date, shall, to the extent practicable and legally permissible, be reinvested in government securities maturing at times and in amounts sufficient to pay when due the principal of, redemption premium, if any, and interest to become due on the bonds on and prior to the redemption date or maturity date thereof, as the case may be, and interest earned from the reinvestments shall be paid over to the State, as received by the trustees or escrow agents, free and clear of any trust, lien or pledge securing the bonds. Notwithstanding anything to the contrary contained herein: a. the trustees or escrow agents shall, if so directed by the issuing officials, apply moneys on deposit with the trustees or escrow agents pursuant to the provisions of this section, and redeem or sell government securities so deposited with the trustees or escrow agents, and apply the proceeds thereof to (1) the purchase of the bonds which were refinanced by the deposit with the trustees or escrow agents of the moneys and government securities and immediately thereafter cancel all bonds so purchased, or (2) the purchase of different government securities; provided however, that the moneys and government securities on deposit with the trustees or escrow agents after the purchase and cancellation of the bonds or the purchase of different government securities shall be sufficient to pay when due the principal of, redemption premium, if any, and interest on all other bonds in respect of which the moneys and government securities were deposited with the trustees or escrow agents on or prior to the redemption date or maturity date thereof, as the case may be; and b. in the event that on any date, as a result of any purchases and cancellations of bonds or any purchases of different government securities, as provided in this sentence, the total amount of moneys and government securities remaining on deposit with the trustees or escrow agents is in excess of the total amount which would have been required to be deposited with the trustees or escrow agents on that date in respect of the remaining bonds for which the deposit was made in order to pay when due the principal of, redemption premium, if any, and interest on the remaining bonds, the trustees or escrow agents shall, if so directed by the issuing officials, pay the amount of the excess to the State, free and clear of any trust, lien, pledge or assignment securing the refunding bonds.

20. Refunding bonds issued pursuant to P.L.1985, c.74 as amended by P.L.1992, c.182 (C.49:2B-1 et seq.) may be consolidated with bonds issued pursuant to section 6 of this act or with bonds issued pursuant to any other act for purposes of sale.

21. To provide funds to meet the interest and principal payment requirements for the bonds issued under this act and outstanding, there is appropriated in the order following:

a. Revenue derived from the collection of taxes under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), or so much thereof as may be required; and

b. If, at any time, funds necessary to meet the interest and principal payments on outstanding bonds issued under this act, are insufficient or not available, there shall be assessed, levied and collected annually in each of the municipalities of the counties of this State, a tax on the real and personal property upon which municipal taxes are or shall be assessed, levied and collected, sufficient to meet the interest on all outstanding bonds issued hereunder and on the bonds proposed to be issued under this act in the calendar year in which the tax is to be raised and for the payment of bonds falling due in the year following the year for which the tax is levied. The tax shall be assessed, levied and collected in the same manner and at the same time as other taxes upon real and personal property. The governing body of each municipality shall pay to the treasurer of the county in which the municipality is located, on or before December 15 in each year, the amount of tax herein directed to be assessed and levied, and the county treasurer shall pay the amount of the tax to the State Treasurer on or before December 20 in each year.

If on or before December 31 in any year, the issuing officials, by resolution, determine that there are moneys in the General Fund beyond the needs of the State, sufficient to meet the principal of bonds falling due and all interest payable in the ensuing calendar year, the issuing, officials shall file the resolution in the office of the State Treasurer, whereupon the State Treasurer shall transfer the moneys to a separate fund to be designated by him, and shall pay the principal and interest out of that fund as the same shall become due and payable, and the other sources of payment of the principal and interest provided for in this section shall not then be available, and the receipts for the year from the tax specified in subsection a. of this section shall be considered part of the General Fund, available for general purposes.

22. Should the State Treasurer by December 31 of any year deem it necessary, because of insufficiency of funds collected from the sources of revenues as provided in this act, to meet the interest and principal payments for the year after the ensuing year, then the State Treasurer shall certify to the Director of the Division of Budget and Accounting in the Department of the Treasury the amount necessary to be raised by taxation for those purposes, which is to be assessed, levied and collected for and in the ensuing calendar year. The director shall, on or before March 1 following, calculate the amount in dollars to be assessed, levied and collected in each county as herein set forth. This calculation shall be based upon the corrected assessed valuation of each county for the year preceding the year in which the tax is to be assessed, but the tax shall be assessed, levied and collected upon the assessed valuation of the year in which the tax is assessed and levied. The director shall certify the amount to the county board of taxation and the treasurer of each county. The county board of taxation shall include the proper amount in the current tax levy of the several taxing districts of the county in proportion to the ratables as ascertained for the current year.

23. For the purpose of complying with the provisions of the State Constitution, this act shall be submitted to the people at the general election to be held in the month of November, 1994. To inform the people of the contents of this act, it shall be the duty of the Secretary of State, after this section takes effect, and at least 60 days prior to the election, to cause this act to be published in at least 10 newspapers published in the State and to notify the clerk of each county of this State of the passage of this act, and the clerks respectively, in accordance with the instructions of the Secretary of State, shall have each of the ballots printed as follows:

If you approve the act entitled below, make a cross (x), plus (+), or check () mark in the square opposite the word "Yes."

If you disapprove the act entitled below, make a cross (x), plus (+), or check () mark in the square opposite the word "No."

If voting machines are used, a vote of "Yes" or "No" shall be equivalent to these markings respectively.

			PUBLIC SCHOOL FACILITIES BOND ISSUE
		YES	Should the "Public School Facilities Bond Act of 1994" which authorizes the State to issue bonds in the amount of $250,000,000 for the purpose of providing financial aid to local school districts for the construction, renovation or repair of public school facilities; providing the ways and means to pay the interest on these bonds and also to pay and discharge the principal thereof, be approved?
			INTERPRETIVE STATEMENT
		NO	Approval of this act would authorize the sale of $250,000,000 in bonds, to be used to provide $60,000,000 of grants for the construction of facilities for comprehensive kindergarten and pre-kindergarten programs in disadvantaged districts and a minimum of $190,000,000 for a revolving loan program for the construction, renovation, alteration or repair of public school buildings.

The fact and date of the approval or passage of this act, as the case may be, may be inserted in the appropriate place after the title in the ballot. No other requirements of law as to notice or procedure, except as herein provided, need be adhered to.

The votes cast for and against the approval of this act, by ballot or voting machine, shall be counted and the result thereof returned by the election officer, and a canvass of the election had in the same manner as is provided for by law in the case of the election of a Governor, and the approval or disapproval of this act so determined shall be declared in the same manner as the result of an election for a Governor, and if there is a majority of all votes cast for and against it at the election in favor of the approval of this act, then all the provisions of this act not made effective theretofore shall take effect forthwith.

24. There is appropriated the sum of $5,000 to the Department of State for expenses in connection with the publication of notice pursuant to section 23 of this act.

25. The commissioner shall submit to the State Treasurer and the commission with the department's annual budget request a plan adopted in conjunction with the authority for the expenditure of funds from the "Public School Facilities Bond Fund" for the upcoming fiscal year. This plan shall include the following information: a performance evaluation of the expenditures made from the fund to date; a description of programs planned during the upcoming fiscal year; a copy of the regulations in force governing the operations of programs that are financed, in part or in whole, by funds from the "Public School Facilities Bond Fund;" and an estimate of expenditures for the upcoming fiscal year.

26. Immediately following the submission to the Legislature of the Governor's annual budget message, the commissioner shall submit to the General Assembly Education Committee, the Senate Education Committee, or their successors, and the Joint Budget Oversight Committee, or its successor, a copy of the plan called for under section 25 of this act, together with such changes therein as may have been required by the Governor's budget message.

27. No less than 30 days prior to entering into any contract, lease, obligation, or agreement to effectuate the purposes of this act, the commissioner shall report to and consult with the Joint Budget Oversight Committee, or its successor.

28. This section and sections 23 and 24 of this act shall take effect immediately and the remainder of the act shall take effect as provided in section 23^.

This bill authorizes the issuance of general obligation bonds of this State in the amount of $250,000,000 following approval by the voters in teh November, 1994 general election. Under the bill’s provisions, the proceeds of the bonds are to be used to provide financial ass instance to local school districts for the construction, renovation, repair or alteration of public school buildings and will be allocated in the following manner:

(1) A minimum of $190,000,000 of the bond revenues would be used to provide the principal for a revolving loan fund in the Department of Education.

(2) A maximum of $60,000,000 for grants to socioeconomically and geographically disadvantaged school districts for the construction of facilities for comprehensive pre-kindergarten and full day kindergarten programs. Of the $60,000,000, $30,000,000 shall be used for grants to special needs districts in the amount of at least $1,000,000 per grant to be used to construct two classrooms, a room for social services and a community meeting room in each district. The remainder of the grant funds will be allocated among disadvantaged districts, including the special needs districts, in increments of $250,000 per additional classroom, according to t heir respective enrollments.

The loan funds are to be allocated on the basis of a facilities needs assessment, conducted by the State Board of Education.

Authorizes issuance of $250 million in general obligation bonds to help school districts finance construction and renovation of school buildings; appropriates $5,000.