SENATE, No. 306

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Senators INVERSO and EWING

 

 

An Act concerning the New Jersey Commission on Capital Budgeting and Planning, renaming the Commission as the New Jersey Capital Planning and Debt Management Commission, expanding its powers and duties, establishing the Debt Management Review Council, and amending and supplementing P.L.1975, c.208.

 

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

 

    1. (New section) As used in this amendatory and supplementary act:

    "Bond" means any bond, certificate of obligation, certificate of participation, or other instrument evidencing a proportionate interest in payments due to be paid by a public issuer, or other obligation that is incurred by a public issuer in the exercise in whole or in part of its borrowing power, regardless of whether the payment is subject to annual appropriation, and is represented by an instrument issued in bearer or registered form or not represented by such an instrument but the transfer of which is registered on books maintained for the purpose by or on behalf of the public issuer, and "bond" shall further include an installment sale or lease-purchase obligation or a refunding of an existing bond issued by or on behalf of a public issuer only if it has a stated term of longer than five years or has an initial principal amount greater than $250,000;

    "Commission" means the New Jersey Capital Planning and Debt Management Commission created by section 2 of P.L.1975, c.208 (C.52:9S-2).

    "Public issuer" means the State, any body corporate and politic, district, public authority, agency, commission or other public institution heretofore or hereafter created by the State, and any State college or university which is authorized to issue bonds. "Public issuer" shall not include any county, municipality, school district or local government agency, district or authority or any issuer whose bonds are issued for the purpose of making loans to local government units to finance the cost of any wastewater treatment system project which the local government unit may lawfully undertake or acquire, which loans are secured by the notes, bonds or other obligations of a local government unit subject to the approval of the Local Finance Board in the Division of Local Government Services in the Department of Community Affairs.

    "Council" means the Debt Management Review Council established by section 2 of this amendatory and supplementary act.

 

    2. (New section) There is established a council, which shall be known as the Debt Management Review Council. The council shall consist of: the chairman of the Senate Budget and Appropriations Committee or its successor committee; the chairman of the Appropriations Committee of the General Assembly or its successor committee; the Director of the Division of Budget and Accounting in the Department of the Treasury; a public member appointed by the Governor with the advice and consent of the Senate; the executive director of a State authority designated by the commission; a public member appointed by the President of the Senate and a public member appointed by the Speaker of the General Assembly. The State authority designated by the commission to be represented by the executive director thereof shall rotate as determined by the commission, except that no State authority shall be designated for less than one year. The public members of the council shall be appointed based upon their experience and expertise in public finance, debt management and bonding practices.

    The public members shall serve for a term of six years and until their successors are qualified, except that at the time of the initial appointments, the public member appointed by the Governor shall be appointed for a term of six years, the public member appointed by the President of the Senate for a term of four years and the public member appointed by the Speaker of the General Assembly for a term of the two years. Any vacancy among the public members shall be filled in the same manner as the original appointment but for the unexpired term only. A member shall be eligible for reappointment.

    The Director of the Division of Budget and Accounting shall not participate in the deliberations concerning, or cast a vote or take any other action regarding, a proposed bond issue by the State of New Jersey.

    The executive director of the State authority designated by the commission shall not participate in the deliberations concerning, or cast a vote or take any action regarding, a proposed bond issue by the


authority of which he is the executive director.

 

    3. (New section) The chairman of the council shall be selected annually by the membership of the council from among the public members.

    Members of the council shall serve without compensation, but public members shall be entitled to reimbursement for expenses incurred in the performance of their duties.

 

    4. (New section) The executive director of the commission shall serve as the secretary of the council and its principal executive officer. The council shall be staffed by the employees of the commission.

 

    5. a. (New section) It shall be the duty of the council to review every proposal of a public issuer to issue bonds unless the issuance has been exempted from review by the commission.

    b. Notwithstanding the provision of any other law, a public issuer shall not issue bonds heretofore or hereafter authorized by law unless the issuance has been reviewed by the council, or exempted from review by the commission pursuant to section 13 of this amendatory and supplementary act.

 

     6. a. (New section) A public issuer intending to issue bonds shall submit a written notice to the secretary of the council no later than 21 days prior to the date requested for council consideration. The secretary shall forward one copy of the notice to each member of the council.

    b. A notice of intention to issue bonds shall include:

    (1) a brief description of the proposed issuance including, but not limited to, the purpose, the proposed amount, and a brief outline of the proposed terms;

    (2) the proposed timing of the issuance with a proposed date of sale and a proposed date for closing;

    (3) a request to have the bond issue scheduled for consideration by the council on a date requested by the public issuer prior to the scheduled date of issuance; and

    (4) an agreement to submit the required application set forth in section 7 of this amendatory and supplementary act no later than 14 days prior to the requested council meeting date.

    c. A public issuer may reschedule the date requested for council consideration of the bonds by submitting an amended notice of intention at any time prior to the application date in the same manner as provided in this section for an original application.

    d. The date for council consideration requested by the public issuer shall be granted by the council; provided however, that the council, in its discretion, may change the date of the council meeting for consideration of the proposed issuance of bonds; in the case of any such change, written notice of the change shall be sent as soon as possible to the public issuer.

 

    7. a. (New section) A public issuer that has not been granted an exemption from review by the commission pursuant to section 13 of this amendatory and supplementary act, and that proposes to issue bonds shall apply for review by the council by filing one application with original signatures and eight copies with the secretary of the council. The secretary shall forward one copy of the application to each member and one copy to the Office of the Attorney General.

    b. An application for review of a lease-purchase agreement shall include:

    (1) a description of, and statement of need for, the facilities or equipment being considered for the lease-purchase proposal, which statement shall include a provision that the facilities or equipment shall have a useful life at least equal to the maximum duration of the lease-purchase obligations used to finance the facilities or equipment;

    (2) the statutory authorization for the lease-purchase proposal;

    (3) evidence of all necessary approvals from any State department, board or agency for the lease-purchase proposal;

    (4) a detailed explanation of the terms of the lease-purchase agreement, including but not limited to the amount of purchase, trade-in allowances, interest charges and service contract charges; and

    (5) a detailed statement of any operating expenses of the public issuer to be paid for under the lease-purchase proposal.

    c. An application for bonds other than lease-purchase agreements shall include:

    (1) a substantially complete draft or summary of the proposed resolution, order, or ordinance providing for the issuance of the bonds;

    (2) a brief description of the program under which the bonds are proposed to be issued, which shall include a reference to the authorizing statute or administrative rules or regulations, as appropriate;

    (3) the applicant's plans for use of the bond proceeds, including, for informational purposes only, a description of, statement of the need for, and approximate cost of, each specific project for which bond proceeds are proposed to be used; and a statement of any operating expenses of the public issuer to be paid for from the bond proceeds; provided, however, that the specific project descriptions shall not be required in the case of a refunding issue nor in the case of revenue bonds issued by the New Jersey Economic Development Authority, created pursuant to the provisions of P.L.1974, c.80 (C.34:1B-1 et seq.), for the purpose of providing loans or loan guarantees for business expansion or retention in this State;

    (4) the applicant's plans for the administration and servicing of the bonds to be issued, including, when applicable, an estimated disbursement schedule of bond proceeds, the proposed flow of funds, the sources and methods of repayment and an estimated debt service schedule;

    (5) if the sale of bonds is proposed to be accomplished by a method other than competitive bid, a statement of the reasons the issuer has chosen not to accomplish this sale by competitive bid and, in the case of a State authority, any resolution adopting such a statement;

    (6) the method of selection or approval of bond counsel, financial advisors and underwriters;

    (7) a description of the applicant's investment provisions for bond proceeds including any specific provisions for safety and security and a description of the duties and obligations of the trustee, paying agent and registrar as may be applicable;

    (8) a timetable for financing that contains estimated dates of all major steps in the issuance process, including all necessary approvals;

    (9) if the applicant has authority to issue both general obligation and revenue bonds and the proposed issuance is of one of these, a statement of the applicant's reasons for its type of bonds;

    (10) a statement of the applicant's estimated costs of issuance, listed on an item by item basis, including, as applicable, the estimated costs for:

    (a) bond counsel;

    (b) financial advisor;

    (c) paying agent and registrar;

    (d) rating agencies;

    (e) official statement printing;

    (f) bond printing;

    (g) trustee;

    (h) credit enhancement;

     (i) liquidity facility; and

    (j) miscellaneous issuance costs;

    (11) an estimate, if the bond sale is negotiated, of the underwriter's "spread," broken down into the following components, and accompanied by a list of underwriters' spreads from recent comparable bond issues:

    (a) management fee;

    (b) underwriter's fees;

    (c) selling concessions;

    (d) underwriter's counsel; and

    (e) other costs;

    (12) a list of the firms proposing to provide the services reported in paragraphs (10) and (11) of this subsection with appropriate estimates;

    (13) a justification of the decision on whether or not to apply for bond insurance or other credit enhancement, including a comparison of expected bond ratings and borrowing costs for the issue with and without the particular enhancements considered;

    (14) a statement of any potential liability of the General Fund or any other State funds resulting from the issuance;

    (15) a copy of any preliminary written review of the issuance that has been made by the Attorney General, if such a review exists;

    (16) a statement addressing the participation of women and minorities as a way of promoting economic opportunity by affording equal access to the procurement of contracts for professional services for the financing of bonds by public issuers. Such statement shall include the following information about each participant, including but not limited to, bond counsel, underwriter, underwriter's counsel and financial advisor:

    (a) the degree of ownership and control of each participant firm by minorities and women;

    (b) the number and percentage of professionally employed women and minorities in each participant's firm;

    (c) a brief description of the effort made by each participant to encourage and develop participation of women and minorities. This description may include internal firm recruitment efforts, any offers tendered for apportioning responsibilities by subcontractor or joint venture, and the equal opportunity goals and policies of each participant's firm; and

    (d) a brief description of actions taken in compliance with any applicable State or federal law.

    (17) a statement outlining the opportunities afforded by the applicant to New Jersey based vendors, and small or medium-sized firms, to participate in the provision of services connected with the proposed issuance;

    (18) the notification procedures used by or on behalf of the issuer to select the participants referred to in paragraphs (16) and (17) of this subsection.

    d. In addition to the information required by subsections b. or c. of this section, an application under this section may include any other relevant information the applicant chooses to submit to the council.

    e. At any time before the date requested for consideration of an application by the council, an applicant may withdraw a bond review application. Revisions to an application shall be submitted in writing not less than two days prior to the council's consideration of an application.

 

    8. a. The chairman may call meetings of the council or cancel a meeting.

    b. A planning session of the council may be held regarding applications pending before the council on or before the requested date for council consideration. At a planning session, council members, their designated representatives, or their staff representatives may discuss pending applications, but may not undertake activity constituting action of the council upon the application. Applicants may be required to attend a planning session and may be asked to make a presentation and answer questions regarding their application. Applicants may be asked to submit written answers to questions regarding their application in lieu of, or in addition to, their attendance at a planning session.

    c. At a meeting of the council convened for consideration of an application, a council member or designated representative may allow an applicant to make an oral presentation to the council.

    d. At a meeting of the council convened for consideration of an application, the council, by resolution, or other process adopted by the council, may recommend in favor of an issuance of bonds as proposed in the application, may recommend in favor of an issuance of bonds upon contingent conditions established by the council, or may recommend against a proposed issuance of bonds. If the council does not act on a proposed issuance during the meeting at which the application is scheduled to be considered, the council shall be deemed to have recommended in favor of the issuance.

    e. If a public issuer has complied with the provisions of sections 6 and 7 of this amendatory and supplementary act and has not been scheduled for a meeting before the council for consideration of the application prior to the expected date of issuance, the council shall be deemed to have recommended in favor of the issuance.

    f. The secretary of the council shall notify applicants in writing of any action taken regarding their application. A letter of recommendation shall contain the terms and conditions of the issue as recommended by the council. Public issuers shall inform the secretary of the council of changes to the aspects of their application which are contrary to the terms and conditions specified in the letter of recommendation. Such changes may prompt reconsideration of the application by the council. A copy of the letter of recommendation shall be forwarded to the Office of the Attorney General.

    g. If applicable law requires the approval by the Attorney General of an issuance of bonds that are not exempt from review by the council, the Attorney General's approval shall be obtained after recommendation by the council.

 

    9. (New section) The council in reviewing any proposed bond issue is authorized to consider only the following:

    a. The timeliness of the proposed issue.

     b. The effect of the size of the bond issue on the State's ability, or the ability of other public issuers, to market other bond issues.

    c. The method of selection of bond underwriters, bond counsels, and financial advisors with particular reference to conformity with:

    (1) federal and State laws, rules and regulations, orders and decisions;

    (2) principles of open, fair and public competition;

    (3) the provision of opportunities to New Jersey based vendors, vendors with significant minority or women ownership, and small or medium-sized vendors; and

    d. The reasonableness and appropriateness of the fees charged, or estimated cost of such fees, by bond underwriters, bond counsel and financial advisors and other persons providing services in connection with the sale of bonds.

    The council shall not consider or inquire into the authorized purposes for which the bond issue is being proposed or into the substance of any project to be funded thereby.

 

    10. (New section) In the event that the council decides to recommend against a proposed issuance of bonds, a copy of the recommendation shall be transmitted to the commission, to the Governor, the President of the Senate and the Speaker of the General Assembly. Within seven days of the recommendation of the council, the public issuer may appeal the recommendation to the commission. The matter shall be heard by the commission within 21 days of the filing of the appeal by the public issuer and the recommendation of the commission shall be final. In the event that the commission shall recommend against a proposed issuance of bonds or if no appeal is filed against the recommendation of the council, the Legislature and the Governor may by joint resolution direct that the public issuer not proceed with the sale in question. If, within 45 days of the date of the final recommendation of the commission or of the recommendation of the council, if not appealed, a joint resolution directing the public issuer not to proceed with the sale in question has not been enacted, the sale may proceed. During the pendency of these matters, the public issuer shall delay the sale of the bonds in question. The refusal of a public issuer to agree to contingent conditions established by the council in its recommendation shall be treated in the same fashion as a recommendation against a proposed issuance. Nothing in this section shall be construed as prohibiting a public issuer from submitting a new application to the council for recommendation of a bond issue previously recommended against.

 

    11. (New section) a. The public issuer or purchaser, as the case may be, shall, within 60 days after the signing of a lease-purchase agreement or delivery of the bonds and receipt of the bond proceeds, submit a final report prepared pursuant to this section to the council and a copy of the final report to the Director of the Division of Budget and Accounting in the Department of the Treasury.

    b. A final report for lease-purchases shall include a detailed explanation of the terms of the lease-purchase agreement including, but not limited to, amount of purchase, trade-in allowance, interest charges and service contracts.

    c. A final report for all bonds shall include:

    (1) all actual costs of issuance including, as appropriate, the items listed in paragraphs (10) and (11) of subsection c. of section 7 of this amendatory and supplementary act, as well as the underwriting spread for competitive financing and the private placement fee for private placement, all closing costs, and any other costs incurred during the issuance process; and

    (2) The final official statement, private placement memorandum, if applicable, or any other offering documents and any other executed documents pertaining to the issuance of the bonds. The public issuer also shall submit a copy of the winning bid form, if appropriate, and a final debt service schedule.

    d. Submission of final reports shall be for the purpose of assisting the council in compiling data and disseminating information to all interested parties. Any person requesting a copy of a final report from the council shall pay the council for reasonable reproduction costs.

    e. The secretary of the council shall prepare and distribute to the members of the council a summary of each final report within 30 days after the final report has been submitted by the public issuer. The summary shall include a comparison of the estimated costs of issuance for the items listed in paragraphs (10) and (11) of subsection c. of section 7 of this amendatory and supplementary act contained in the application for approval with the actual costs of issuance listed pursuant to paragraph (1) of subsection c. of this section submitted in the final report. This summary shall also include such other information, which in the opinion of the secretary, represents a material addition to, or a substantial deviation from, the application for recommendation.

 

    12. (New section) An ex officio member of the council may designate another person to represent that member of the council by written designation filed with the secretary of the council. A designation of representation filed under this section shall be effective until revoked by a subsequent filing by the member with the secretary. During the time a designation of representation is in effect, the person designated shall have all powers and duties as a member of the council, except the authority to make a further designation under this section.

 

    13. (New section) The commission shall adopt criteria for the exemption of certain bond issues from review and recommendation by the council which criteria shall include, but not be limited to, such matters as the minimum size of a proposed issue, the record of the issuer in securing favorable recommendations from the council in regard to past issuances, and the necessity for expedition in the issuance of the bonds in order to take advantage of interest rate changes. The exemptions may be granted by the commission after consideration of a petition by the public issuer. The commission shall from time to time publish in the New Jersey Register a notice of bonds that are exempt from council review and recommendation and the criteria relied upon to grant the exemption.

 

     14. (New section) All public issuers whose bonds are subject to review by the council shall file a report no later than July 15 of each year with the secretary of the council, which annual report shall include:

    a. The investment status of all unexpended bond proceeds, which shall provide information on the amount of proceeds, the name of institution or entity holding the investment, the type of investment program or instrument in which the proceeds are invested, and the maturity date and interest rate of the investment;

    b. An explanation of any change, during the fiscal year immediately preceding the deadline for this report, in the debt retirement schedule for any outstanding bond issue, which shall include information regarding the exercise of redemption provisions, refunding and conversion from short-term to long-term bonds; and

    c. A description of any bond issues expected during the fiscal year, including type of issue, estimated amount and expected month of sale.

 

    15. (New section) In order to encourage use of the request for proposal method to maximize participation in the bond issuance process, any public issuer whose bonds are subject to review by the council shall, for information purposes only, submit to the secretary of the council at the time of distribution, a copy of any request for proposal for bond counsels, underwriters, financial advisors or other consultants prepared in connection with the planned issuance of bonds. The council, upon request, shall make the request for proposals available to such consultants, other public issuers and the general public.

 

    16. (New section) On the request of the council, the State Auditor shall review the disposition of the proceeds of bonds issued by any public issuer as defined in this amendatory and supplementary act. The State Auditor shall prepare a report of the review for the council.

 

    17. (New section) The provisions of this amendatory and supplementary act shall not affect the right of a public issuer to select its own bond counsel, underwriter, financial advisor, or other provider of service in connection with the issuance of bonds. The provisions of this act shall not affect the duty or right of the Attorney General to review State bonds.

 

    18. (New section) Not later than 60 days after the effective date of this amendatory and supplementary act, the commission, in consultation with the council, shall issue a report and recommendations concerning the standards to be employed by public issuers in the issuance of bonds which shall include, but not be limited to, the competitive selection of bond underwriters, bond counsels, and financial advisors, provision of opportunities to New Jersey based vendors, those with significant minority or woman ownership, and small or medium-sized firms, and guidelines for determining the reasonableness and appropriateness of fees charged by bond underwriters, bond counsels, and financial advisors in connection with the sale of bonds. The State Treasurer is authorized and directed to adopt rules and regulations pursuant to the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) providing for the application of such standards to public issuers, after having considered the report and recommendations of the commission.

 

    19. Section 1 of P.L. 1975, c.208 (C.52:9S-1) is amended to read as follows:

    1. As used in this act, the following words and terms shall have the following meanings, unless the context shall indicate another or different meaning or intent:

    a. "Capital project" means any undertaking which is to be financed or funded or is proposed to be financed or funded by the issuance of bonds, notes or other evidences of indebtedness of the State or any public authority thereof; or any undertaking which is to be financed or funded or is requested to be financed or funded by an appropriation in the annual budget, where the expenditure therefor is, by statute, or under standards as they may be prescribed from time to time by the Department of the Treasury, a capital expenditure.

    b. "Commission" means the New Jersey [Commission on Capital Budgeting and Planning] Capital Planning and Debt Management Commission created by section 2 of this act;

    c. "Plan" means the State Capital Improvement Plan provided for by subsection a. of section 3. of this act.

    d. "State agency" means an executive or administrative department, office, public authority or other instrumentality of State Government.

    d. "Council" means the Debt Management Review Council established by section 2 of P.L. 19 ,c. (C. )(now pending before the Legislature as this bill).

(cf: P.L.1975, c.208, s.1)

 

    20. Section 2 of P.L. 1975, c.208 (C.52:9S-2) is amended to read as follows:

    2. There is hereby created a New Jersey [Commission on Capital Budgeting and Planning] Capital Planning and Debt Management Commission. The commission shall consist of 12 members selected as follows: the State Treasurer and any three other [members of the Executive Branch] cabinet officers designated by the Governor to so serve at his pleasure, two members of the General Assembly, two members of the Senate and four public members from the State at large.

    The members from the General Assembly shall be appointed by the Speaker of the General Assembly. The members of the Senate shall be appointed by the President of the Senate. No more than one of the members appointed by the Speaker or President shall be from the same political party. Legislative members shall serve while members of their respective houses for the term for which they have been elected except that the chairman of the respective appropriations committees shall serve while in that capacity.

    [The] Of the four public members two shall be appointed by the Governor with advice and consent of the Senate and two by the Legislature, one each by the President of the Senate and the Speaker of the General Assembly, for a term of 6 years and until their successors are qualified[, provided that no more than two of them may be of the same political party, and] provided [further] that [at the time of the initial appointment of the public members, the Governor shall provide for staggered terms by appointing two public members for a term of 6 years, one public member for a term of 4 years, and one public member for a term of 2 years] the members serving on the effective date of this amendatory and supplementary act shall continue to serve until the expiration of their appointments. The President of the Senate shall make the first appointment of a public member upon the expiration of the term of the public member first occurring after the effective date of this amendatory and supplementary act, and the Speaker of the General Assembly shall make the second appointment of a public member upon the expiration of the term of the public member next occurring after the effective date of this amendatory and supplementary act. The public members shall be chosen without regard to political affiliation, based solely upon their experience and expertise in public finance, debt management and bonding practices. Any vacancy among the public members shall be filled in the same manner as the original appointment, but for the unexpired term only. A member shall be eligible for reappointment.

    A chairman of the commission shall be [designated by, and serve at the pleasure of, the Governor] selected annually by the membership of the commission from among the public members.

Members of the commission shall serve without compensation, but public members shall be entitled to reimbursement for expenses incurred in the performance of their duties.

(cf: P.L.1975, c.208, s.2)

 

    21. Section 3 of P.L. 1975, c.208 (C.52:9S-3) is amended to read as follows:

    3. a. The commission shall each year prepare a State Capital Improvement Plan containing its proposals for State spending for capital projects, which shall be consistent with the goals and provisions of the State Development and Redevelopment Plan adopted by the State Planning Commission and shall be prepared after consultation with the New Jersey Council of Economic Advisors, created pursuant to P.L.1993, c.149 (C.52:9H-34 et seq.). Copies of the plan shall be submitted to the Governor and the Legislature no later than December 1 of each year. The plan shall provide:

    (1) A detailed list of all capital projects of the State which the commission recommends be undertaken or continued by any State agency in the next three fiscal years, together with information as to the effect of such capital projects on future operating expenses of the State, and with recommendations as to the priority of such capital projects and the means of funding them;

    (2) The forecasts of the commission as to the requirements for capital projects of State agencies for the four fiscal years next following such three fiscal years and for such additional periods, if any, as may be necessary or desirable for adequate presentation of particular capital projects, and a schedule for the planning and implementation or construction of such capital projects;

    (3) A schedule for the next fiscal year of recommended appropriations of bond funds from issues of bonds previously authorized;

    (4) A review of capital projects which have recently been implemented or completed or are in process of implementation or completion;

    (5) Recommendations as to the maintenance of physical properties and equipment of State agencies;

    (6) Recommendations which the commission deems appropriate as to the use of properties reported in subsection [b. (6)]c. of this section; [and]

    (7) A report on the State's overall debt. This report shall include information on the outstanding general obligation debt and debt service costs for each of the prior 10 years, the current year, and the estimated amount for the subsequent nine years. In addition, the report shall provide similar information on capital leases and installment obligations;

    (8) An assessment of the State's ability to increase its overall debt and a recommendation on the amount of any such increase. In developing this assessment and recommendation, the commission shall consider those criteria used by municipal securities rating services in rating governmental obligations; and

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

    b. Each State agency shall no later than August 15 of each year provide the commission with:

    (1) A detailed list of capital projects which each State agency seeks to undertake or continue for its purposes in the next three fiscal years, together with information as to the effect of such capital projects on future operating expenses of the State, and with such relevant supporting data as the commission requests;

    (2) Forecasts as to the requirements for capital projects of such agency for the four fiscal years next following such [four] three fiscal years and for such additional periods, if any, as may be necessary or desirable for adequate presentation of particular capital projects, and a schedule for the planning and implementation or construction of such capital projects;

    (3) A schedule for the next fiscal year of requested appropriations of bond funds from issues of bonds previously authorized;

    (4) A report on capital projects which have recently been implemented or completed or are in process of implementation or completion;

    (5) A report as to the maintenance of its physical properties and capital equipment;

    (6) Such other information as the commission may request.

    c. Each State agency shall, when requested, provide the commission with supplemental information in addition to that to be available to the commission under the computerized record keeping of the Department of the Treasury, Bureau of Real Property Management, concerning any real property owned or leased by the agency including its current or future availability for other State uses.

    d. A copy of the plan shall also be forwarded to the Division of Budget and Accounting each year upon its completion, and the portion of the plan relating to the first fiscal year thereof shall, to the extent it treats of capital appropriations in the annual budget, constitute the recommendations of the commission with respect to such capital appropriations in the budget for the next fiscal year.

(cf: P.L. 1985, c. 398, s.13)

 

    22. Section 7 of P.L.1975, c.208 (C.52:93-7) is amended to read as follows:

    7. The commission [may] shall employ and fix the compensation of an executive director who shall be its secretary and principal executive officer. The executive director shall be knowledgeable about the capital improvement process, the issuance of obligations by governmental entities, and the negotiation of fees for professional services deemed necessary in the issuance of governmental obligations. The commission shall be staffed by the [Division of Budget and Accounting of the] Department of the Treasury and shall be entitled to call to its assistance the services of the employees of the Department of the Treasury including but not limited to the Division of Budget and Accounting in the Department of the Treasury, the Office of Legislative Services and other State departments or agencies as may be available to the commission for its purposes. [There is hereby created within said division a bureau of capital planning for this purpose.] The commission may also employ such other stenographic, clerical and expert assistance, and incur such traveling and other miscellaneous expenses as it may deem necessary in order to perform its duties and as may be within the limits of funds appropriated or otherwise made available to it.

(cf: P.L.1975, c.208, s.7)

 

    23. There shall annually be appropriated such sums as are necessary to effectuate the purposes of this act.

 

    24. This act shall take effect on the 60th day after enactment but such anticipatory administrative action in advance may be taken as shall be necessary for the implementation of the act.

 

 

STATEMENT

 

    This bill amends the law creating the New Jersey Commission on Capital Budgeting and Planning by expanding its powers and duties to include an annual assessment of the amount of State debt and recommendations concerning the ability of the State to increase its overall debt. The commission is also renamed as the New Jersey Capital Planning and Debt Management Commission (the "commission") to reflect its new functions. The bill also establishes the Debt Management Review Council (the "council") to carry out the review of the procedures used by public issuers in issuing debt.

    The membership of the commission is altered to provide that two of the existing public members now appointed by the Governor would be appointed by the Senate President and Assembly Speaker respectively, thereby increasing the number of members appointed by the Legislature's presiding officers to six out of the 12 member commission, with the remaining six being appointed by the Governor.

    The bill provides that the membership of the Debt Management Review Council would consist of the following seven members: the chairman of the Senate Appropriations Committee; the chairman of the Assembly Appropriations Committee; the Director of the Office of Management and Budget in the Department of the Treasury; a public member appointed by the Governor with the advice and consent of the Senate; the executive director of a State authority designated by the commission (since State authority bond issues would be reviewed by the council); a public member appointed by the President of the Senate and a public member appointed by the Speaker of the General Assembly. The chairman of the council would annually be selected by the council from among its public members.

    The function of the council would be to review the issuance of bonds by certain public issuers and to recommend whether or not the bonds should be issued. The term "public issuer" is defined as the State, any body corporate and politic, district, public authority, commission or other public institution created by the State, and any State college or university issuing bonds. The term does not include any county, municipality, school district or local government agency, district or authority. The indebtedness subject to council review would include general obligation bonds, public revenue bonds, State lease financing of real property acquisitions, building construction and equipment purchases, bonds issued by government entities based on another entity's promise to pay in part or under certain deficiencies, other public debt instruments involving public borrowing power and generally sold in the municipal securities market, as well as bond refinancing.

    In reviewing any proposed bond issue the council is limited to considering the timeliness of the proposed issue, the effect of the size of the bond issue on the ability of other public issuers to market other bond issues, the method of selection of bond underwriters, bond counsels and financial advisors with particular reference to conformity with federal and State laws, rules, regulations, orders and decisions, the principles of open, fair and public competition, the provision of opportunities to New Jersey based vendors, those with significant minority or women ownership and small or medium-sized firms, and the reasonableness and appropriateness of fees for bond underwriters, bond counsels, financial advisors and others providing services to the bond issuer. The council would not deal with the substance of the programs the bond issue is to fund. A negative recommendation from the council could be appealed to the full commission. The Legislature and the Governor are authorized to adopt a joint resolution directing the public issuer to abide by the recommendation of the council or commission. However, if no action is taken by the Legislature within the prescribed time, the issuance of the bonds could occur.

    The State Treasurer is authorized and directed by the bill to adopt rules and regulations providing for procedures to be followed by public issuers in the issuance of bonds. These rules and regulations are to be adopted after the consideration of a report and recommendation by the commission on this subject.

    Finally, the bill contains language concerning the appropriation of such sums as are necessary to effectuate its provisions.

 

 

 

Renames New Jersey Commission on Capital Budgeting and Planning as New Jersey Capital Planning and Debt Management Commission, expands its powers and duties, establishes Debt Management Review Council.