SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

SENATE, No. 865

STATE OF NEW JERSEY

DATED: JUNE 3, 1996

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 865 (1R) of 1996.

      Senate Bill No. 865 (1R) authorizes the issuance of $35 million in State general obligation bonds for the costs of the demolition and disposal of unsafe buildings in urban and rural centers. The bill defines "urban and rural center" as any municipality eligible to receive State aid under P.L.1977, c.260 (C.52:27D-162 et seq.) or P.L.1978, c.14 (C.52:27D-178 et seq.).

      Of this amount, $15 million will be used for grants to municipalities, and agencies or authorities thereof, for building demolition and disposal projects, $15 million will be used for loans to such entities for such projects, and $5 million will be used by the State for demolishing and disposing of State-owned buildings in urban and rural areas.

      The bill requires the Commissioner of Community Affairs to devise procedures for the review and approval of, and eligibility criteria for, building demolition and disposal projects. In addition, a grant award will require the municipal government to provide matching funds toward the cost of the project. Loan awards could be made for terms of up to 20 years at an interest rate not exceeding 4 percent per year.

      The bill requires the commissioner to prepare a priority list of eligible municipal projects based upon requests from municipal governing bodies, or agencies or authorities thereof, and based upon need. The commissioner is required to prepare a priority list of eligible State projects based upon requests from the State Treasurer.

      The bill sets forth criteria according to which the commissioner is to evaluate the priority list in funding municipal projects. The commissioner will give first priority to the demolition and disposal of an unsafe building as a necessary prerequisite to the erection of a new building by a governmental entity, non-profit organization or a private individual or commercial enterprise pursuant to construction plans that have been approved by the municipality. Second priority will be given to projects that involve unsafe buildings posing an imminent and extreme health and safety hazard.

      The expenditure of bond funds will require an act of the Legislature and each such act must identify the projects to be funded with the appropriated moneys. The bonds issued will be backed by the full faith and credit of the State of New Jersey.

      The bill will not take effect until it has been signed by the Governor and until the passage by the voters of the bond measure at the next general election.

FISCAL IMPACT

      This bill permits the issuance by the State of general obligation bonds in the aggregate principal amount of $35,000,000 for the demolition of unsafe buildings in urban and rural centers in this State.      The bill appropriates $5,000 to the Department of State for the costs of publishing notices of this bond issue in newspapers prior to the next general election.