ASSEMBLY, No. 1277
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblyman COLLINS
An Act concerning lead abatement, providing financial assistance for certain lead abatement work, establishing the Lead Abatement Assistance Fund, and supplementing Title 34 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Lead Abatement Assistance Act."
2. As used in this act:
"Authority" means the New Jersey Economic Development Authority established pursuant to P.L.1974. c.80 (C.34:1B-1 et seq.);
"Bonds" means bonds, notes or any form of evidence of indebtedness of the authority, bearing either a fixed rate or variable rate of interest, issued pursuant to this act;
"Eligible loan" means a loan, made for the purpose of financing lead abatement work on residential property located in the State;
"Financial assistance" means loans and loan guarantees;
"Fund" means the Lead Abatement Assistance Fund established pursuant to section 3 of this act;
"Lead abatement work" means work to mitigate or to eliminate permanently lead-based paint hazards on a premises by a person certified to perform lead abatement work pursuant to P.L.1993, c.288 (C.26:2Q-1 et seq.) and shall include but need not be limited to: the removal of lead-based paint and lead contaminated dust; the containment or encapsulation of lead-based paint; the replacement of lead painted surfaces or fixtures; the removal or covering of lead-contaminated soil; and all preparation, cleanup, disposal, and post-abatement clearance testing activities associated with such measures;
"Residential housing" means any residential dwelling unit whether detached or attached or in the form of a multiple dwelling, for occupancy by persons as their usual and permanent residence.
3. a. The New Jersey Economic Development Authority shall establish and maintain a nonlapsing revolving fund to be known as the "Lead Abatement Assistance Fund" hereinafter referred to as the "fund." There shall be paid into this fund: (1) the proceeds from the sale of bonds issued pursuant to section 4 of this act; (2) moneys as are appropriated Legislature; (3) moneys deposited into the fund as repayment of principal and interest on outstanding loans made from the fund; (4) any return on investment on moneys deposited in the fund; (5) moneys made available to the authority for the purposes of the fund.
b. Moneys in the fund shall be used exclusively for (1) funding loans and loan guarantees pursuant to section 5 of this act; (2) paying the interest on and repaying the principal of bonds issued pursuant to section 4 of this act; (3) entering into agreements pursuant to section 7 of this act for credit enhancement of bonds issued by the authority pursuant to this act; (4) making payments in fulfillment of the terms of loan guarantees entered into pursuant to section 6 of this act; and (5) defraying the administrative costs of the agency in carrying out the purposes and provisions of this act.
c. Interest upon loans made by or through the fund and fees for the issuance of loan guarantees issued by the fund shall be established by the authority at the lowest rate compatible with the integrity of the fund and its proper administration, maintenance of adequate reserves for the actuarially sound funding of guarantee pledges, and the ability of the agency to pay the interest upon and repay the principal of bonds issued pursuant to section 4 of this act.
4. a. In addition to any other bonding authority conferred upon the authority by any other law, the authority is hereby authorized to issue bonds for the purpose of funding loans and loan guarantees in the manner and to the extent provided in section 5 of this act; but the total capital sum of bonds issued and outstanding under this authorization shall not at any time exceed $50,000,000.
b. These bonds shall be designated as Lead Abatement Assistance Bonds and shall not be general obligations of the authority or of the State of New Jersey, but shall be special obligations of the authority; and the payment of interest on and repayment of principal of these bonds shall be secured by and paid out of the revenues accruing to the fund pursuant to section 3 of this act or, if at any time the revenue should prove insufficient for the full and punctual payment thereof, out of moneys provided through the credit enhancement arrangements authorized in section 7 of this act.
c. Except as otherwise explicitly authorized in this act, any bonds issued or to be issued pursuant to this section shall be subject to all the requirements, conditions and restrictions of P.L.1974, c.80 (C.34: 1B-1 et seq.) upon the bonding authority of the authority.
d. The interest rate and other terms upon which bonds are issued pursuant to this section shall not create a prospective obligation of the authority in excess of the amount of revenues that can reasonably be expected from the fees and interest charges that the authority can reasonably expect to charge pursuant to subsection c. of section 3 of this act.
5. a. The authority is hereby authorized to provide financial assistance with moneys from the fund to eligible owners of residential housing for lead abatement work, in compliance with the terms of this act and subject to the conditions set forth in this section.
b. Financial assistance may be provided only to an eligible owner of residential housing who has the ability to repay the loan as determined by the authority.
c. No financial assistance shall be provided for a period of more than ten years; except that the authority may, by regulation provide for cases in which unforseen economic changes or physical obstacles may warrant an extension.
d. The authority may provide financial assistance, upon application therefore, for 100% of the costs of lead abatement work subject to any limitation on the amount determined by the authority based on the credit worthiness of the applicant, except that no award of financial assistance may exceed $150,000.
e. Financial assistance provided pursuant to this act shall be secured by a lien upon the real property on which the lead abatement work is performed, with respect to which the financial assistance is made and other such collateral as the authority may consider necessary to secure the interests of the fund in accordance with the provisions and purposes of this act. The authority may, if it deems necessary, require the financial assistance to be secured by a personal loan guarantee by the owner of the property or by a lien upon other real property belonging to the person to whom the loan is made.
6. a. The authority is hereby authorized to contract with institutional lenders to guarantee on behalf of an eligible owner the repayment of the full principal balance of that loan outstanding at the time of any default, if (1) the loan was made for performance of lead abatement work on residential housing as provided in this act; (2) the amount of the loan and the terms on which it was made conform substantially to the amount and terms then available to the borrower on such a loan; and (3) the regulations of the authority adopted pursuant to subsection c. of this section are complied with.
b. The authority shall establish within the fund sufficient reserves and liquid reserves, aside from those moneys required to meet payments of interest and repayments of principal on bonds issued pursuant to section 4 of this act, to provide a sufficient and actuarially sound basis for its pledges contained in any loan guarantee contract entered into pursuant to subsection a. of this section.
c. The authority shall adopt, pursuant to the "Administrative Procedure act," P.L.1968, c.410 (C.52:14B-1 et seq.) rules and regulations governing the issuance of loan guarantees pursuant to this section, including:
(1) procedures for the submission of requests for such guarantees;
(2) standards and requirements governing the allocation of guarantees to applicant institutional lenders, and determining the fees to be charged therefor and the manner of payment of those fees;
(3) restrictions as to the maturities and interest rates of any loan, or the return realized therefrom by the institutional lender, upon which a guarantee is to be issued;
(4) requirements as to commitments by institutional lenders with respect to loans upon which guarantees may be issued; and
(5) any other matters related to the duties and the exercise of the powers of the authority under this section.
7. In order to secure purchasers of the bonds issued pursuant to section 4 of this act against any default arising out of insufficiency of moneys in the fund and resulting in failure to make full and punctual payments of interest and principal in accordance with the terms of their issuance, the authority is authorized to enter into a contract or contracts with one or more corporations authorized under Title 17 of the Revised Statutes to insure against loss from such defaults.
8. The authority shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations necessary to effectuate the provisions of this act.
9. This act shall take effect 90 days following enactment, except that section 8 shall take effect immediately.
STATEMENT
This bill would authorize the New Jersey Economic Development Authority to issue up to $50,000,000 in bonds to finance the provision of loans and loan guarantees to owners of residential housing for lead abatement work.
Provides financial assistance for lead abatement work; authorizes EDA to issue bonds.