S1407

SENATE, No. 1407

STATE OF NEW JERSEY

INTRODUCED JULY 25, 1996

By Senator CARDINALE

An Act concerning the New Jersey Health Care Facilities Financing Authority and the New Jersey Economic Development Authority, amending various parts of the statutory law, and supplementing Title 26 of the Revised Statutes.

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

1. (New section) This act shall be known and may be cited as the "New Jersey Health Care Facilities Financing Consolidation Act of 1996."

2. (New section) The Legislature hereby finds and declares that:

a. A unified system to provide for capital financing and other financial needs of health care providers is an essential public service which promotes access to high quality health care for the State's population;

b. Currently, the jurisdiction over health care facility financing in the State is split between the New Jersey Health Care Facilities Financing Authority and the New Jersey Economic Development Authority which both issue bonds for capital project financing and provide other assistance to meet the financial needs of the State's health care providers including the construction, replacement, expansion and renovation of existing facilities and the financing and refinancing of existing obligations;

c. While the New Jersey Health Care Facilities Financing Authority provides assistance with construction and renovation projects, low-interest capital loans, refinancings and compliance monitoring to assist hospitals and other health care providers, the New Jersey Economic Development Authority provides financing for certain ancillary hospital facilities such as office parking garages and other "for profit" buildings and also assists with financing for nonprofit nursing homes, long-term care and assisted-living facilities;

d. It is in the public interest for the State to promote a more coordinated, unified and comprehensive system of financing capital projects and providing other types of financial assistance for health care providers, especially in light of the rapid and complex changes affecting health care providers in the State and the need for these providers to adapt to a more competitive environment;

e. In furtherance of these findings and declarations, it is altogether fitting and proper for the State to consolidate the New Jersey Health Care Facilities Financing Authority with the New Jersey Economic Development Authority in order to promote a more integrated and coordinated approach to meeting the financial needs of the State's health care providers, and to reduce costs by combining the operations of these two authorities under a single "umbrella" authority.

3. Section 2 of P.L.1972, c.29 (C.26:2I-2) is amended to read as follows:

2. Short title. This act shall be known and may be cited as the "New Jersey Health Care Facilities Financing [Authority] Law."

(cf: P.L.1972, c.29, s.2)

4. Section 3 of P.L.1972, c.29 (C.26:2I-3) is hereby amended to read as follows:

3. Terms defined. As used in this act, the following words and terms shall have the following meanings, unless the context indicates or requires another or different meaning or intent:

"Advisory board" means the Health Care Facilities Financing Advisory Board established pursuant to section 4 of P.L.1972, c.29 (C.26:2I-4).

"Authority” means the New Jersey [Health Care Facilities Financing] Economic Development Authority created by [this act] section 4 of P.L.1974, c.80 (C.34:1B-4) or any board, body, commission, department or officer succeeding to the principal functions thereof or to whom the powers conferred upon the authority by this act shall be given by law.

"Bond" means bonds, notes or other evidences of indebtedness of the authority issued pursuant to this act.

"Commissioner" means the State Commissioner of [Health] Commerce and Economic Development.

"[Hospital] Health care facility" means a structure suitable to provide hospitals, hospital related housing facilities, doctors' office buildings or other health-care facilities for the prevention, diagnosis or treatment of human disease, pain, injury, disability, deformity or physical condition or mental illness and retardation, and for facilities incidental or appurtenant thereto including a health maintenance organization, public health center, ambulatory care facility, diagnostic center, treatment center, rehabilitation center, extended care facility, skilled nursing home, nursing home, intermediate care facility, tuberculosis hospital, chronic disease hospital, maternity hospital, special hospital, mental hospital, outpatient clinic, dispensary, home health agency, boarding home or other home for sheltered care situated within the State and which is a nonprofit institution providing hospital or health care service to the public.

"Original authority" means and includes the New Jersey Health Care Facilities Financing Authority created by P.L.1972, c.29 (C.26:2I-1 et seq.).

"Participating hospital" means a public hospital or private hospital which has entered into a regulatory agreement in accordance with this act.

"Private hospital" means a hospital or health-care institution, or an institution for the training of doctors, nurses, paramedical or other personnel engaged in the provision of health care, other than a State, county or municipal hospital or health care facility, or related institution [including a health maintenance organization, public health center, diagnostic center, treatment center, rehabilitation center, extended care facility, skilled nursing home, nursing home, intermediate care facility, tuberculosis hospital, chronic disease hospital, maternity hospital, special hospital, mental hospital, outpatient clinic, dispensary, home health agency, boarding home or other home for sheltered care situated within the State and which is a nonprofit institution providing hospital or health care service to the public].

"Public hospital" means a State, county or municipal hospital or health-care facility including health maintenance organization, public health center, diagnostic center, treatment center, rehabilitation center, extended care facility, skilled nursing home, nursing home, intermediate care facility, tuberculosis hospital, chronic disease hospital, maternity hospital, mental hospital, outpatient clinic, dispensary, home health care agency, boarding home or other home for sheltered care now or hereafter established or authorized by law.

"Project" [or "hospital project"] means [a specific work, including lands, buildings, improvements, alterations, renovations, enlargements, reconstructions, fixtures and articles of personal property, acquired, constructed, rehabilitated, owned and operated by a participating hospital]: (1) (a) the acquisition, construction, reconstruction, repair, alteration, improvement and extension of any building, structure, facility or other improvement whether or not in existence or under construction; (b) the purchase and installation of equipment and machinery; (c) the acquisition and improvement of real estate and the extension or provision of utilities, access roads and other appurtenant facilities; and (2) (a) the acquisition, financing, or refinancing of inventory, raw materials, supplies, work in progress, or stock in trade; (b) the financing, refinancing or consolidation of secured or unsecured debt, borrowings, or obligations; or (c) the provision of financing for any other expense incurred in the ordinary course of business all of which are to be used or occupied pursuant to this act, to provide [hospital or] health-care facilities or facilities related, required or useful to or for the operation of a [hospital] health care facility, and "project" [or "hospital project"] may include any combination of the foregoing undertaken jointly by any participating [hospital] health care facility with one or more other participating [hospitals] health care facilities. Project may also include: (1) reimbursement to any person for costs in connection with any project, or the refinancing of any project or portion thereof, if the authority determines that it is necessary, and in the public interest and will facilitate improvements thereto or the completion thereof.

"Project cost" [or "hospital project cost"] means the sum total of all or any part of costs incurred or estimated to be incurred by the authority or by a participating [hospital] health care facility which are reasonable and necessary for carrying out all works and undertakings and providing all necessary equipment for the development of a project, exclusive of the amount of any private or Federal, State or local financial assistance for and received by a participating [hospital] health care facility for the payment of such project cost. Such costs shall include, but are not necessarily limited to, interest prior to, during and for a reasonable period after such development, start-up costs and costs of operation and maintenance during the construction period and for a reasonable additional period thereafter, the cost of necessary studies, surveys, plans and specifications, architectural, engineering, legal or other special services, the cost of acquisition of land, buildings and improvements thereon (including payments for the relocation of persons displaced by such acquisition), site preparation and development, construction, reconstruction, equipment, including fixtures, equipment, and cost of demolition and removal, and articles of personal property required, the reasonable cost of financing incurred by a participating [hospital] health care facility or the authority in the course of the development of the project, reserves for debt service, the fees imposed upon a participating [hospital] health care facility by the commissioner and by the authority; other fees charged, and necessary expenses incurred in connection with the initial occupancy of the project, and the cost of such other items as may be reasonable and necessary for the development of a project. The commissioner's approval of estimated project cost in accordance with section 6 of this act shall include his approval, which shall be conclusive, as to the reasonableness or necessity of any item of cost and as to the reasonableness of any period of time in respect of which interest, start-up, operation and maintenance costs have included in project costs.

(cf: P.L.1972, c.29, s.3)

5. Section 4 of P.L.1972, c.29 (C.26:2I-4) is hereby amended to read as follows:

4. Authority created; members; terms; organization meetings; governor's veto power. a. There is hereby established [in the State Department of Health, a public body corporate and politic, with corporate succession, to be known as the "New Jersey Health-Care Facilities Financing Authority." The authority shall constitute a political subdivision of the State established as an instrumentality exercising public and essential governmental functions, and the exercise by the authority of the powers conferred by this act shall be deemed and held to be an essential governmental function] the Health Care Facilities Financing Advisory Board which shall review all applications for financing of projects through the authority and make recommendations to the members of the authority.

b. The [authority] advisory board shall consist of [seven] eight members, [three] one of whom shall be the [commissioner] Commissioner of Health, who shall be the chairman, [the Commissioner of Insurance, and the Commissioner of the Department of Institutions and Agencies,] who shall serve during [their] the commissioner's [terms] term of office, or when so designated by [them] the commissioner, [their deputies] the commissioner's deputy or other [representatives] representative, who shall serve at [their] the commissioner's pleasure, and [four] two public members [who] , one physician, three representatives of the hospital industry and one representative of the financial services industry, all of whom are citizens of the State, to be appointed by the Governor, with the advice and consent of the Senate for terms of 4 years; provided that the [four] members first appointed by the Governor shall serve terms expiring on the first, second, third, and fourth, respectively, April 30 ensuing after the enactment of [this act] P.L. , c. (C. )(now before the Legislature as this bill) provided that on the effective date of P.L. , c. (C. ) (now before the Legislature as this bill), the current members of the original authority shall cease to be members of the original authority and shall immediately become interim members of the advisory board until such time as the Governor appoints the new members of the advisory board and the new members have qualified pursuant to this section. Each member shall hold office for the term of [his] the member's appointment and until [his] the member's successor shall have been appointed and qualified. Any vacancy among the public members shall be filled by appointment for the unexpired term only and in the same manner as the original appointment.

c. Any member of the [authority] advisory board appointed by the Governor may be removed from office by the Governor for cause after a public hearing.

d. The members of the [authority] advisory board shall serve without compensation, but the [authority] advisory board may reimburse its members for necessary expenses incurred in the discharge of their official duties.

e. The [authority] advisory board, upon the first appointment of its members and thereafter on or after April 30 in each year, shall annually elect from among its members a vice chairman who shall hold office until April 30 next ensuing and shall continue to serve during the term of [his] the member's successor and until [his] the member's successor shall have been appointed and qualified. The [authority] advisory board may also appoint, retain and employ, without regard to the provisions of [Title 11, Civil Service, of the Revised Statutes] Title 11A of the New Jersey Statutes, such officers, agents, and employees as it may require to assist the advisory board, and it shall determine their qualifications, terms of office, duties, services and compensation.

f. The powers of the [authority] advisory board shall be vested in the members thereof in office from time to time and a majority of the total authorized membership of the [authority] advisory board shall constitute a quorum at any meeting thereof. Action may be taken and motions and resolutions adopted by the [authority] advisory board at any meeting thereof by the affirmative vote of a majority of the members present, unless in any case the bylaws of the [authority] advisory board shall require a larger number. No vacancy in the membership of the [authority] advisory board shall impair the right of a quorum to exercise all the rights and perform all the duties of the [authority] advisory board.

[g. Each member and the treasurer of the authority shall execute a bond to be conditioned upon the faithful performance of the duties of such member or treasurer, as the case may be, in such form and amount as may be prescribed by the Attorney General. Such bonds shall be filed in the office of the Secretary of State. At all times thereafter the members and treasurer of the authority shall maintain such bonds in full force and effect. All costs of such bonds shall be borne by the authority.

h. No trustee, director, officer or employee of a hospital may serve as a member of the authority.

i. At least two true copies of the minutes of every meeting of the authority shall be forthwith delivered by and under the certification of the secretary thereof, to the Governor. No action taken at such meeting by the authority shall have force or effect until 10 days, exclusive of Saturdays, Sundays and public holidays, after such copies of the minutes shall have been so delivered or at such earlier time as the Governor shall sign a statement of approval thereof. If, in said 10-day period, the Governor returns a copy of the minutes with veto of any action taken by the authority or any member thereof at such meeting, such action shall be null and of no effect. If the Governor shall not return the minutes within said 10-day period, any action therein recited shall have force and effect according to the wording thereof. At any time prior to the expiration of the said 10-day period, the Governor may sign a statement of approval of all or any such action of the authority.

The powers conferred in this subsection upon the Governor shall be exercised with due regard for the rights of the holders of bonds of the authority at any time outstanding.]

(cf: P.L.1972, c.29, s.4)

6. (New section) The advisory board, established pursuant to section 4 of P.L.1972, c.29 (C.26:2I-4), shall have the power,

subject to the approval of the authority:

a. To adopt bylaws for the regulation of its affairs and the conduct of its business.

b. To assist the authority in reviewing, evaluating and obtaining loans, grants, aid or contributions from any public agency, governmental agency or any other source for or in aid of any project.

c. To advise the authority in the event the authority takes over a participating health care facility in the event of default.

d. To assist the authority with the transition of functions from the original authority to the authority.

e. To assist the authority with the preparation of reports required pursuant to P.L. , c. (C. ) (now before the Legislature as this bill), and P.L.1972, c.29 (C.26:2I-1 et seq.).

f. To review all applications from health care facilities for financing from the authority and provide recommendations to the authority within 60 days of the advisory board's receipt of the application.

g. To recommend a plan to the authority, within 60 days of the effective date of P.L. , c. (C. ) (now before the Legislature as this bill), for the use of fund balances.

7. Section 5 of P.L.1972, c.29 (C.26:2I-5) is amended to read as follows:

5. Powers of authority. The authority shall have power:

a. To adopt bylaws for the regulation of its affairs and the conduct of its business and to alter and revise such bylaws from time to time at its discretion.

b. To adopt and have an official seal and alter the same at pleasure.

c. To maintain an office at such place or places within the State as it may designate.

d. To sue and be sued in its own name.

e. To borrow money and to issue bonds of the authority and to provide for the rights of the holders thereof as provided in this act.

f. To acquire, lease as lessee or lessor, hold and dispose of real and personal property or any interest therein, in the exercise of its powers and the performance of its duties under this act.

g. To acquire in the name of the authority by purchase or otherwise, on such terms and conditions and in such manner as it may deem proper, any land or interest therein and other property which it may determine is reasonably necessary for any project; and to hold and use the same and to sell, convey, lease or otherwise dispose of property so acquired, no longer necessary for the authority's purposes, for fair consideration after public notice.

h. To receive and accept, from any federal or other public agency or governmental entity directly or through the Department of Health or any other agency of the State or any participating hospital, grants or loans for or in aid of the acquisition or construction of any project, and to receive and accept aid or contributions from any other source, of either money, property, labor or other things of value, to be held, used and applied only for the purposes for which such grants, loans and contributions may be made.

i. To prepare or cause to be prepared plans, specifications, designs and estimates of costs for the construction and equipment of [hospital] health care facility projects for participating [hospitals] health care facilities under the provisions of this act, and from time to time to modify such plans, specifications, designs or estimates.

j. By contract or contracts with and for participating [hospitals] health care facilities only, to construct, acquire, reconstruct, rehabilitate and improve, and furnish and equip [hospital] projects. The authority, in the exercise of its authority to make and enter into contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers, shall adopt standing rules and procedures providing that, except as hereinafter provided, no contract on behalf of the authority shall be entered into for the doing of any work, or for the hiring of equipment or vehicles, where the sum to be expended exceeds the sum of $7,500.00 or the amount determined as provided in this subsection, unless the authority shall first publicly advertise for bids therefor, and shall award the contract to the lowest responsible bidder; provided, however, that such advertising shall not be required where the contract to be entered into is one for the furnishing or performing services of a professional nature or for the supplying of any product or the rendering of any service by a public utility subject to the jurisdiction of the Board of Public Utilities, and tariffs and schedules of the charges, made, charged, or exacted by the public utility for any such products to be supplied or services to be rendered are filed with said board. The Governor, in consultation with the Department of the Treasury, shall, no later than March 1 of each odd-numbered year, adjust the threshold amount set forth in this subsection, or subsequent to 1985 the threshold amount resulting from any adjustment under this subsection or section 17 of P.L.1985, c.469, in direct proportion to the rise or fall of the Consumer Price Index for all urban consumers in the New York City and the Philadelphia areas as reported by the United States Department of Labor. The Governor shall, no later than June 1 of each odd-numbered year, notify the authority of the adjustment. The adjustment shall become effective July 1 of each odd-numbered year.

k. To determine the location and character of any project to be undertaken, subject to the provisions of this act, and subject to State health and environmental laws, to construct, reconstruct, maintain, repair, lease as lessee or lessor, and regulate the same and operate the same in the event of default by a participating [hospital] health care facilities of its obligations and agreements with the authority; to enter into contracts for any or all such purposes; and to enter into contracts for the management and operation of a project in the event of default as herein provided. The authority shall use its best efforts to conclude its position as an operator as herein provided as soon as is practicable.

l. To establish rules and regulations for the use of a project or any portion thereof and to designate a participating[ hospital] health care facility as its agent to establish rules and regulations for the use of a project undertaken by such a participating [hospitaL] health care facility.

m. Generally to fix and revise from time to time and to charge and collect rates, rents, fees and other charges for the use of and for the services furnished or to be furnished by a project or any portion thereof and to contract with holders of its bonds and with any other person, party, association, corporation or other body, public or private, in respect thereof, subject to the provisions of the "Health Care Facilities Planning Act," P.L.1971, c.136 (C.26:2H-1 et seq.).

n. To enter into agreements or contracts, execute any and all instruments, and do and perform any and all acts or things necessary, convenient or desirable for the purposes of the authority or to carry out any power expressly given in this act.

o. To invest any moneys held in reserve or sinking funds, or any moneys not required for immediate use or disbursement, at the discretion of the authority, in such obligations as are authorized by resolution of the authority.

p. To obtain, or aid in obtaining, from any department or agency of the United States any insurance or guarantee as to, or of, or for the payment or repayment of interest or principal, or both, or any part thereof, on any loan or any instrument evidencing or securing the same, made or entered into pursuant to the provisions of this act; and notwithstanding any other provisions of this act, to enter into agreement, contract or any other instrument whatsoever with respect to any such insurance or guarantee, and accept payment in such manner and form as provided therein in the event of default by the borrower.

q. To obtain from any department or agency of the United States or a private insurance company any insurance or guarantee as to, or of, or for the payment or repayment of interest or principal, or both, or any part thereof, on any bonds issued by the authority pursuant to the provisions of this act; and notwithstanding any other provisions of this act, to enter into any agreement, contract or any other instrument whatsoever with respect to any such insurance or guarantee, except to the extent that such action would in any way impair or interfere with the authority's ability to perform and fulfill the terms of any agreement made with the holders of the bonds of the authority.

r. To receive and accept, from any department or agency of the United States or of the State or from any other entity, any grant, appropriation or other moneys to be used for or applied to any corporate purpose of the authority, including without limitation the meeting of debt service obligations of the authority in respect of its bonds.

(cf: P.L.1985, c.469, s.2)

8. Section 6 of P.L.1972, c.29 (C.26:2I-6) is amended to read as follows:

6. Approval of project costs; regulatory agreements; expenses. Notwithstanding any other provision of this act, the authority shall not acquire or authorize the acquisition, the commencement of construction or rehabilitation of any project or [hospital] health care facility to be leased to a participating [hospital] health care facility, in respect of any project where such acquisition or work is to be done by the authority, nor advance loan funds to any participating [hospital] health care facility, in respect of a project involving a loan to such [hospital] health care facility, until (i) the estimated project cost shall have been approved by the [commissioner] Commissioner of Health and (ii) the participating [hospital] health care facility shall have entered into a regulatory agreement with the [commissioner] Commissioner of Health. Such regulatory agreement shall contain such provisions as shall be deemed adequate by the [commissioner] Commissioner of Health to assure that the project shall be constructed, maintained and operated in a manner consistent with the purposes of this act and the Health Care Facilities Planning Act, P.L.1971, c.136 (C.26:2H-1 et seq.).

The requirements of the preceding paragraph shall not preclude the authority from taking actions, and incurring expenses in connection therewith, preliminary to the actual acquisition or commencement of construction or rehabilitation of facilities or the advancing of loan funds in respect of any proposed project, provided, that all expenses incurred in carrying out the provisions of this act shall be payable solely from funds provided under the authority of this act and no liability or obligation shall be incurred by the authority hereunder beyond the extent to which moneys shall have been provided under the provisions of this act.

(cf: P.L.1972, c.29, s.6)

9. (New section) a. The authority is hereby required to maintain the following reserves:

(1) A reserve equal to two times the operating expenses associated with its activities; and

(2) A reserve of two million dollars in the event of bankruptcies or other contingencies.

b. Within six months of the effective date of P.L. , c. (C. ) (now before the Legislature as this bill), the authority shall report to the Governor on the amount of such reserves that it deems appropriate, consistent with sound financial planning. On acceptance of such report by the Governor, the level of reserves set forth herein shall be immediately modified to reflect the amounts recommended by the authority and accepted by the Governor.

c. All fund balances remaining after the establishment of the reserves required by this section may be utilized for projects authorized by the "New Jersey Health Care Facilities Financing Law," P.L.1972, c.29 (C.26:2I-1 et seq.) provided that the income and expenses generated for such projects shall be separately accounted for by the authority.

10. Section 21 of P.L.1972, c.29 (C.26:2I-21) is amended to read as follows:

21. Visatorial powers; department of [health]commerce and economic development; commissioner. The Department of [Health] Commerce and Economic Development , or the commissioner or their representatives, may visit, examine into and inspect, the authority and may require, as often as desired, duly verified reports therefrom giving such information and in such form as such department or commissioner shall prescribe.

(cf: P.L.1971, c.29, s.21)

11. Section 4 of P.L.1974, c.80 (C.34:1B-4) is amended to read as follows:

4. a. There is hereby established in, but not of, the Department of Commerce and Economic Development a public body corporate and politic, with corporate succession, to be known as the "New Jersey Economic Development Authority." The authority is hereby constituted as an instrumentality of the State exercising public and essential governmental functions, and the exercise by the authority of the powers conferred by this act shall be deemed and held to be an essential governmental function of the State.

b. The authority shall consist of the Commissioner of Banking, the Commissioner of Commerce and Economic Development, the Commissioner of Labor, the Commissioner of Health, the Commissioner of Insurance, and the State Treasurer, who shall be members ex officio, and six public members appointed by the Governor with the advice and consent of the Senate, of which one public member (who shall not be a legislator) shall be appointed by the Governor upon recommendation of the Senate President and one public member (who shall not be a legislator) shall be appointed by the Governor upon recommendation of the Speaker of the General Assembly, all for terms of three years. The first two public member positions on the authority that are or become vacant on or after the effective date of P.L.1992, c.16 (C.34:1B-7.10 et al.) shall be filled by appointment of the Governor upon the recommendation of the Senate President and the Speaker of the General Assembly, respectively. Each member shall hold office for the term of his appointment and until his successor shall have been appointed and qualified. A member shall be eligible for reappointment. Any vacancy in the membership occurring other than by expiration of term shall be filled in the same manner as the original appointment but for the unexpired term only. In the event the authority shall by resolution determine to accept the declaration of an urban growth zone by any municipality, the mayor or other chief executive officer of such municipality shall ex officio be a member of the authority for the purpose of participating and voting on all matters pertaining to such urban growth zone.

The Governor shall appoint with the advice and consent of the Senate, three alternate members of the authority, of which one alternate member (who shall not be a legislator) shall be appointed by the Governor upon the recommendation of the Senate President, and one alternate member (who shall not be a legislator) shall be appointed by the Governor upon the recommendation of the Speaker of the General Assembly, all for terms of three years. The first two alternate member positions on the authority that are or become vacant on or after the effective date of P.L.1992, c.16 (C.34:1B-7.10 et al.) shall be filled by appointment of the Governor upon the recommendation of the Senate President and the Speaker of the General Assembly, respectively. The chairperson may authorize an alternate member, in order of appointment, to exercise all of the powers, duties and responsibilities of such member, including, but not limited to, the right to vote on matters before the authority.

Each alternate member shall hold office for the term of his appointment and until his successor shall have been appointed and qualified. An alternate member shall be eligible for reappointment. Any vacancy in the alternate membership occurring other than by the expiration of a term shall be filled in the same manner as the original appointment but for the unexpired term only. Any reference to a member of the authority in this act shall be deemed to include alternate members unless the context indicates otherwise.

c. Each member appointed by the Governor may be removed from office by the Governor, for cause, after a public hearing, and may be suspended by the Governor pending the completion of such hearing. Each member before entering upon his duties shall take and subscribe an oath to perform the duties of his office faithfully, impartially and justly to the best of his ability. A record of such oaths shall be filed in the office of the Secretary of State.

d. The Commissioner of Commerce and Economic Development may, at his discretion, serve as the chairperson of the authority or may appoint one of the six public members of the authority as chairperson. Any such designation or appointment shall be made in writing and shall be delivered to the authority and to the Governor and shall continue in effect until revoked or amended by a writing delivered to the authority and the Governor. The members of the authority shall elect from their remaining number a vice chairperson and a treasurer thereof. The authority shall employ an executive director who shall be its secretary and chief executive officer. The powers of the authority shall be vested in the members thereof in office from time to time and [six] seven members of the authority shall constitute a quorum at any meeting thereof. Action may be taken and motions and resolutions adopted by the authority at any meeting thereof by the affirmative vote of at least [six] seven members of the authority. No vacancy in the membership of the authority shall impair the right of a quorum of the members to exercise all the powers and perform all the duties of the authority.

e. Each member of the authority shall execute a bond to be conditioned upon the faithful performance of the duties of such member in such form and amount as may be prescribed by the Director of the Division of Budget and Accounting in the Department of the Treasury. Such bonds shall be filed in the office of the Secretary of State. At all times thereafter the members and treasurer of the authority shall maintain such bonds in full force and effect. All costs of such bonds shall be borne by the authority.

f. The members of the authority shall serve without compensation, but the authority shall reimburse its members for actual expenses necessarily incurred in the discharge of their duties. Notwithstanding the provisions of any other law, no officer or employee of the State shall be deemed to have forfeited or shall forfeit his office or employment or any benefits or emoluments thereof by reason of his acceptance of the office of ex officio member of the authority or his services therein.

g. Each ex officio member of the authority may designate an officer or employee of his department to represent him at meetings of the authority, and each such designee may lawfully vote and otherwise act on behalf of the member for whom he constitutes the designee. Any such designation shall be in writing delivered to the authority and shall continue in effect until revoked or amended by writing delivered to the authority.

h. The authority may be dissolved by act of the Legislature on condition that the authority has no debts or obligations outstanding or that provision has been made for the payment or retirement of such debts or obligations. Upon any such dissolution of the authority, all property, funds and assets thereof shall be vested in the State.

i. A true copy of the minutes of every meeting of the authority shall be forthwith delivered by and under the certification of the secretary thereof to the Governor. No action taken at such meeting by the authority shall have force or effect until 10 days, Saturdays, Sundays, and public holidays excepted, after the copy of the minutes shall have been so delivered , unless during such 10-day period the Governor shall approve the same in which case such action shall become effective upon such approval. If, in that 10-day period, the Governor returns such copy of the minutes with veto of any action taken by the authority or any member thereof at such meeting, such action shall be null and void and of no effect. The powers conferred in this subsection i. upon the Governor shall be exercised with due regard for the rights of the holders of bonds and notes of the authority at any time outstanding, and nothing in, or done pursuant to, this subsection i. shall in any way limit, restrict or alter the obligation or powers of the authority or any representative or officer of the authority to carry out and perform in every detail each and every covenant, agreement or contract at any time made or entered into by or on behalf of the authority with respect to its bonds or notes or for the benefit, protection or security of the holders thereof.

j. On or before March 31 in each year, the authority shall make an annual report of its activities for the preceding calendar year to the Governor and the Legislature. Each such report shall set forth a complete operating and financial statement covering the authority's operations during the year. The authority shall cause an audit of its books and accounts to be made at least once in each year by certified public accountants and cause a copy thereof to be filed with the Secretary of State and the Director of the Division of Budget and Accounting in the Department of the Treasury.

k. The Director of the Division of Budget and Accounting in the Department of the Treasury and his legally authorized representatives are hereby authorized and empowered from time to time to examine the accounts, books and records of the authority including its receipts, disbursements, contracts, sinking funds, investments and any other matters relating thereto and to its financial standing.

l. No member, officer, employee or agent of the authority shall be interested, either directly or indirectly, in any project or in any contract, sale, purchase, lease or transfer of real or personal property to which the authority is a party.

(cf: P.L.1995, c.227.5.1)

12. (New section) a. Immediately upon the effective date of P.L. , c. (C. ) (now before the Legislature as this bill):

(1) The authority shall become the successor authority to the original authority and the powers, duties and functions of the original authority shall then and thereafter be vested in and shall be exercised by the authority to the extent provided by the provisions of P.L. , c. (C. ) (now before the Legislature as this bill).

(2) The officers having custody of the funds of the original authority shall deliver those funds into the custody of the chief financial officer of the authority, all the property, real and personal, including moneys, investments, causes of action and every other asset of the original authority shall become the property and assets of the authority, without further act or deed, and the original authority shall cease to exist, provided that the title to any real estate, or interest therein, vested in the original authority shall not revert or be in any way impaired by reason of the succession effected hereby.

(3) The authority shall assume and be liable for all the liabilities and obligations of the original authority to make payments on its outstanding bonds, and notes or other obligations and no liability or obligation due or to become due, claim or demand for any cause existing against the original authority respectively, or any officer or member thereof, shall be released or impaired or in any respect expanded in regard to the source of payment thereof or otherwise, by the succession provided for by any provision of P.L. , c. (C. )(now before the Legislature as this bill). Neither the rights of creditors nor any liens upon, or security interests in, the property of the original authority shall be impaired by the succession. No action or proceeding, whether civil or criminal, pending by or against the original authority, respectively, or any officer or member thereof, shall abate or be discontinued by the succession, but may be enforced, prosecuted, settled or compromised as if such succession had not occurred, or the authority may be substituted in such action or special proceeding in place of the original authority, as the case may be.

(4) With respect to contracts, agreements, leases, and other similar arrangements previously made by and between the original authority and any other party, the authority shall, in succeeding to the powers, duties and functions of the original authority, perform all the obligations and duties of, and shall have all the rights, powers, and functions of, the original authority under and pursuant to such contracts, agreements, leases or other similar arrangements.

(5) The authority shall possess all the rights, privileges, immunities, powers and purposes of the original authority and nothing in P.L. , c. (C. )(now before the Legislature as this bill), shall limit or otherwise affect the power of the authority to issue bonds, notes and other obligations under and pursuant to and in accordance with, the terms and conditions of the "New Jersey Economic Development Authority Act," P.L.1974, c.80 (C.34:1B-1 et seq.) and the "New Jersey Health Care Facilities Financing Law," P.L.1972, c.29 (C.26:2I-1 et seq.), or to alter the terms and conditions of any grants, loans, bonds or agreements made by the original authority. Nothing in P.L. , c. (C. ) (now before the Legislature as this bill) shall be construed to alter the terms, conditions, rights or remedies of any obligation issued by the original authority.

(6) In addition to succeeding to the powers, duties and functions of the original authority, the authority is authorized to issue bonds, notes and other obligations for any purpose for which the original authority was authorized by law to issue bonds, notes or other obligations, under and pursuant to, and in accordance with the terms and conditions of, and subject to the limitations in, the "New Jersey Health Care Facilities Financing Law," P.L.1972, c.29 (C.26:2I-1 et seq.), and the "New Jersey Economic Development Authority Act," P.L.1974, c.80 (C.34:1B-1 et seq.).

(7) The exercise of powers, duties and functions of the original authority to which the authority has succeeded, including, without limitation, the execution of contracts in connection therewith, shall be governed by applicable provisions of the "New Jersey Health Care Facilities Financing Law," P.L.1972, c.29 (C.26:2I-1 et seq.), and the "New Jersey Economic Development Authority Act," P.L.1974, c. 80 (C.34:1B-1 et seq.).

(8) The officers and employees of the original authority shall be transferred to the authority and shall become employees of the authority until determined otherwise by the authority.

Nothing in P.L. , c. (C. ) (now before the Legislature as this bill) shall be construed to deprive any officers or employees of their rights, privileges, obligations or status with respect to any pension or retirement system. The officers and employees of the original authority who are transferred to the authority shall continue to be enrolled in the Public Employees Retirement System and, for the purposes of P.L. , c. (C. ) (now before the Legislature as this bill), the authority shall be considered to be a State agency which shall make the appropriate contributions on behalf of such officers and employees to the Public Employees Retirement System in order to maintain their rights, privileges, obligations or status with respect to that retirement system. The employees shall retain all of their rights and benefits under existing collective bargaining agreements or contracts until such time as new or revised agreements or contracts are agreed to or these agreements or contracts shall expire. All existing bargaining agents shall be retained to act on behalf of those employees until such time as the employees shall, pursuant to law, elect to change those agents.

Nothing in P.L. , c. (C. ) (now before the Legislature as this bill) shall affect the civil service status, if any, of those officers or employees. The provisions of this subsection shall not apply to any officer or employee appointed or employed, or any collective bargaining agreement entered into, on or after the date of enactment of P.L. , c. (C. ) (now before the Legislature as this bill). Nothing in P.L. , c. (C. ) (now before the Legislature as this bill), shall be construed as providing for the permanent tenure of officers or employees who were granted this tenure by the original authority and no officer or employee transferred pursuant to subparagraph (8) of this subsection shall be deemed to receive or enjoy permanent tenure with the authority by virtue of any action of the original authority.

(9) In continuing the functions, contracts, obligations and duties of the original authority, the authority is authorized to act in its own name or in the name of the original authority as may be convenient or advisable under the circumstances from time to time.

(10) Any references to the original authority in any other law or regulation shall be deemed to refer and apply to the authority.

(11) All rules and regulations of the original authority shall continue in effect as the rules and regulations of the authority until amended, supplemented or rescinded by the authority in accordance with law.

(12) All operations of the original authority shall continue as operations of the authority until altered by the authority as may be permitted pursuant to P.L. c. (C. ) (now before the Legislature as this bill), and pursuant to P.L.1972, c.29 (C.26:2I-1 et seq.).

(13) The powers vested in the authority by P.L. c. (C. ) (now before the Legislature as this bill) shall be construed as being in addition to, and not in diminution of, the powers heretofore vested by law in the original authority to the extent not otherwise altered or provided for in P.L. , c. (C. ) (now before the Legislature as this bill).

b. All transfers directed by P.L. , c. (C. ) (now before the Legislature as this bill), shall be made in accordance with, and subject to, the provisions of the "State Agency Transfer Act," P.L.1971, c.375 (C.52:14D-1 et seq.).

13. (New section) The authority shall submit to the Governor, within three months of the effective date of P.L. , c. (C. ) (now before the Legislature as this bill), the following:

a. A report analyzing where operational, financial, procedural and organizational improvements can be made as a result of P.L. , c. (C. ) (now before the Legislature as this bill);

b. A report of the impact of the consolidation on any projects of the authority and original authority;

c. A report identifying positions or functions which may be eliminated as a result of P.L. , c. (C. ) (now before the Legislature as this bill);

d. Recommendations for additional legislative initiatives to achieve further operational, procedural, organizational or financial improvements; and

e. Recommendations for reductions in the fees paid by participating health care facilities in connection with applications with the original authority.

14. This act shall take effect 90 days following the date of enactment.

STATEMENT

This bill provides that, immediately upon the effective date of the bill, the New Jersey Economic Development Authority (NJEDA) shall become the successor authority to the New Jersey Health Care Facilities Financing Authority (NJHCFFA), which shall thereafter cease to exist.

The bill also provides that the seven members of the NJHCFFA shall be replaced, immediately upon the effective date of this bill, with an eight-member Health Care Facility Financing Advisory Board composed of the Commissioner of Health, who shall serve ex officio, two public members, one physician, three representatives of the hospital industry and one representative of the financial services industry, all of whom are to be appointed by the Governor, with the advice and consent of the Senate.

The advisory board shall review applications for financing of health care facility projects through the NJEDA and make recommendations to members of the NJEDA. Immediately upon the effective date of the bill, the NJEDA shall succeed to the functions, powers and duties of the NJHCFFA and the employees of the NJHCFFA shall be employees of the NJEDA, until otherwise determined by the NJEDA.

The bill further provides that the NJEDA shall submit a report to the Governor, within three months of the effective date of the bill, analyzing the improvements resulting from the bill and the impact of the consolidation on projects, identifying functions or positions that may be eliminated as a result of the consolidation and recommending any additional legislative initiatives needed to further implement the goals of the bill.

The bill also amends P.L.1974, c.80 (C.34:1B-1 et seq.) to add the Commissioner of Health and the Commissioner of Insurance as members of the NJEDA.

Provides for establishing the New Jersey Economic Development Authority as the successor authority to the New Jersey Health Care Facilities Financing Authority.