SENATE, No. 1661
STATE OF NEW JERSEY
INTRODUCED OCTOBER 28, 1996
By Senator McGREEVEY
An Act concerning certain public school facilities loan fund repayments, amending P.L.1993, c.102, and repealing section 3 of P.L.1996, c.48 (C.34:1B-7.23a).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 4 of P.L.1993, c.102 (C.34:1B-7.23) is amended to read as follows:
4. a. The authority shall establish and maintain a special nonlapsing revolving fund to be known as the "Public School Facilities Code Compliance Loan Fund," hereinafter the "compliance fund," which shall be credited with: (1) the $25 million allocated from the Economic Recovery Fund pursuant to paragraph (1) of subsection d. of section 4 of P.L.1992, c.16 (C.34:1B-7:13); (2) any moneys that shall be received by the authority from the repayment of loans made from the compliance fund and interest thereon; and (3) any other moneys which the authority determines to deposit therein.
b. The authority may use the moneys in the compliance fund to finance not less than 25%, and not more than 50%, of the total cost of any project, in accordance with the criteria set forth in this section, for the purpose of providing low-interest loans to school districts, to finance the renovation, repair or other alteration of existing school buildings, the construction of new school buildings or the conversion of existing school buildings to other instructional purposes, if such renovation, repair, alteration, construction or conversion is required to bring buildings that, at the time of application, do not meet State health and safety code requirements, into compliance with those requirements.
c. Upon application by a school district for a low-interest loan, the commissioner is authorized and empowered to determine whether the renovations, repairs, alterations, conversion or construction are necessary to meet State health and safety code requirements. If the commissioner determines that such work is necessary, the commissioner shall certify that the school district is eligible for a low-interest loan pursuant to this section to finance the renovation, repair, alteration, conversion or construction described in the application.
d. (1) Upon certification, the commissioner shall waive the holding of a referendum or the requirement for approval by a board of school estimate pursuant to subsection (d) of N.J.S.18A:20-4.2 or N.J.S.18A:24-5 et seq., as the case may be, or the requirement for approval of the project by a capital projects control board pursuant to P.L.1991, c.139 (C.18A:7A-46.1 et seq.), as appropriate, and the school district may, upon receiving the certification and waiver, apply to the authority for a loan pursuant to this section. The terms of the loan and the repayment schedule shall be established by the authority. The repayments to the authority by the school districts shall be treated as net debt service by the school districts for school aid purposes. In addition to the amount of taxes determined by the legal voters of the district at the annual school election, the secretary of the board of education shall certify the amount required for the repayment of the interest and principal of the loan in the same manner required for interest and debt redemption charges pursuant to N.J.S.18A:22-33, and the amount so certified shall be included in the taxes assessed, levied and collected in the municipality or municipalities comprising the school district for such purposes.
(2) All repayments, and interest thereon, shall be deposited by the authority in the compliance fund, for use in the manner provided for in this section, except insofar as the authority may direct that such amounts be deposited in the small projects fund established pursuant to section 7 of P.L.1993, c.102 (C.34:1B-7.25).
(3) [ Notwithstanding any provision of this section to the contrary, on and after the effective date of P.L.1996, c.48 (C.34:1B-7.23a et al.), any loan repayments and interest thereon on deposit or deposited into the compliance fund shall be paid by the authority to the State Treasurer for deposit into the General Fund of the State, provided that the payment does not violate any existing agreement of the authority with bondholders.] (Deleted by amendment, P.L. , c. ).
e. The authority, in consultation with the commissioner shall, in determining whether to grant approval of any loan application pursuant to this section, take into consideration the severity of the need for the particular project, the ability of the school district to begin and complete the project in an expeditious manner, the ability of the school district to proceed with the funding of the balance of the funds for the project, and the extent to which the approval of the project contributes to the equable distribution of moneys in the compliance fund.
f. The balance of the moneys needed for a project for which an application for a loan is made pursuant to this section may be funded by the school district by: (1) the issuance of bonds, or other borrowing, excluding lease-purchase agreements, pursuant to the provisions of subsection (d) of N.J.S.18A:20-4.2, N.J.S.18A:24-5 et seq., or P.L.1991, c.139 (C.18A:7A-46.1 et seq.), as appropriate; except that the commissioner shall waive the holding of a referendum or the requirement for approval by a board of school estimate pursuant to subsection (d) of N.J.S.18A:20-4.2, or N.J.S.18A:24-5 et seq., as the case may be, or the requirement for approval of the project by a capital projects control board pursuant to P.L.1991, c.139 (C.18A:7A-46.1 et seq.), as appropriate; (2) borrowing from the "Public Schools Small Projects Loan Assistance Fund" established pursuant to section 7 of P.L.1993, c.102 (C.34:1B-7.25), if the total cost of the project does not exceed $5,000,000, and in any such case the commissioner shall waive the holding of a referendum or the requirement for approval by a board of school estimate pursuant to subsection (d) of N.J.S.18A:20-4.2 or N.J.S.18A:24-5 et seq., as the case may be, or approval of the project by a capital projects control board pursuant to P.L.1991, c.139 (C.18A:7A-46.1 et seq.), as appropriate; (3) moneys of the school district not necessary for the completion of any other specific projects; and (4) any other lawful source; except that no project funded or approved to be funded by school district bonds authorized, pursuant to law, prior to December 31, 1992 shall be funded pursuant to P.L.1993, c.102 (C.34:1B-7.20 et al.).
g. Any school district shall be eligible to receive additional loans pursuant to this section even if the district has received a previous loan; provided that those additional loans are in conformity with the selection criteria established pursuant to this section.
h. Net earnings received from the investment or deposit of moneys in the compliance fund by the authority shall be redeposited in the fund for use for the purposes of this section.
(cf: P.L.1996, c.48, s.1)
2. Section 5 of P.L. 1993, c.102 (C.34:1B-7.25) is amended to read as follows:
5. a. The authority shall establish and maintain a special nonlapsing revolving fund to be known as the "Public School Facilities Loan Assistance Fund," hereinafter the "facilities fund," which shall be credited with: (1) not less than $105,000,000 from the amount of capital funding appropriated for school facilities pursuant to the annual appropriations act for the State fiscal year ending June 30, 1994, P.L.1993 c.155 ; (2) the $20,000,000 allocated from the Economic Recovery Fund pursuant to paragraph (2) of subsection d. of section 4 of P.L.1992, c.16 (C.34:1B-7.13); (3) any moneys that shall be received by the authority from the repayment of loans made from the
facilities fund and interest thereon; and (4) any other moneys which the authority determines to deposit therein.
b. The authority may use the moneys in the facilities fund to provide for low interest loans to finance not less than 25%, and not more than 50%, of the total cost of any project, in accordance with the criteria set forth in this section, for the purpose of renovation, repair or other alteration of existing school buildings, for construction of new school buildings or for the conversion of existing school buildings to other instructional purposes, whether or not that renovation, repair, alteration, construction or conversion is required to bring buildings that, at the time of application do not meet State health and safety code requirements, into compliance with those requirements.
c. Upon application by any school district to the authority for a loan to be made pursuant to subsection b. of this section, the authority shall, in consultation with the commissioner, determine whether to grant approval for the loan based upon the appropriate authorization for the loan pursuant to subsection (d) of N.J.S.18A:20-4.2, or the project pursuant to P.L.1991, c.139 (C.18A:7A-46.1 et seq.), as the case may be, the relationship of the project to the enhancement of the school's academic programs, the ability of the school district to begin and complete the project in an expeditious manner, the ability of the school district to proceed with the funding of the balance of the moneys needed for the project, and the extent to which approval of the project would contribute to the equable distribution of moneys in the facilities fund.
d. The balance of the moneys needed for a project for which an application for a loan is made pursuant to subsection b. of this section may be funded by the school district by: (1) the issuance of bonds, or other borrowing, excluding lease-purchase agreements, pursuant to the provisions of subsection (d) of N.J.S.18A:20-4.2, N.J.S.18A:24-5 et seq., or P.L.1991, c.139 (C.18A:7A-46.1 et seq.) as appropriate; (2) if the borrowing of money or the issuance of bonds is authorized pursuant to subsection (d) of N.J.S.18A:20-4.2 or N.J.S.18A:24-5 et seq., as the case may be, or if the project is approved pursuant to P.L.1991, c.139 (C.18A:7A-46.1 et seq.), as appropriate, borrowing from the "Public Schools Small Projects Loan Assistance Fund" established pursuant to section 7 of P.L.1993, c.102 (C. 34:1B-7.25), if the total cost of the project does not exceed $5,000,000; (3) moneys of the school district not necessary for the completion of any other specific projects; and (4) any other lawful source; except that no project funded or approved to be funded by school district bonds authorized, pursuant to law, prior to December 31, 1992 shall be funded pursuant to P.L.1993, c.102 (C.34:1B-7.20 et al.).
e. (1) The authority shall establish the terms of the loan which shall include, but not be limited to, the rate of interest, a schedule for drawing down loan funds, and a repayment schedule. The repayments shall be treated by the school district as net debt service for school aid purposes. In addition to the amount of taxes determined by the legal voters of the district at the annual school election, the secretary of the board of education shall certify the amount required for the repayment of the interest and principal of the loan in the same manner required for interest and debt redemption charges pursuant to N.J.S.18A:22-33, and the amount so certified shall be included in the taxes assessed, levied and collected in the municipality or municipalities comprising the school district for such purposes.
(2) All repayments, and interest thereon, shall be deposited by the authority in the facilities fund for use in the manner provided for in this section, except insofar as the authority may direct that such amounts be deposited in the small projects fund established pursuant to section 7 of P.L.1993, c.102 (C.34:1B-7.25).
(3) [Notwithstanding any provision of this section to the contrary, on and after the effective date of P.L.1996, c.48 (C.34:1B-7.23a et al.), any loan repayments and interest thereon on deposit or deposited into the facilities fund shall be paid by the authority to the State Treasurer for deposit into the General Fund of the State, provided that the payment shall not violate any existing agreement of the authority with bondholders.] (Deleted by amendment, P.L. , c. ).
f. Net earnings received from the investment or deposit of moneys in the facilities fund by the authority shall be redeposited in the fund for use for the purposes of this section.
(cf: P.L.1996, c.48, s.2)
3. Section 3 of P.L.1996, c.48 (C.34:1B-7.23a) is repealed.
4. This act shall take effect immediately.
STATEMENT
This bill eliminates language in the "Public School Capital Finance Assistance Act," P.L.1993, c.102, as amended by P.L.1996, c.48, which authorized the diversion of certain loan repayments received from public school districts. P.L.1996, c.48, approved on June 28, 1996, provided that the repayment of loans into the Public School Facilities Code Compliance Loan Fund and the Public School Facilities Loan Assistance Fund in an amount not to exceed $20.5 million was to be paid to the State Treasurer for deposit into the General Fund. Once the amount of transferred funds reached $20.5 million, the loan repayments were again to be applied for the purposes specified in the original act, the recapitalization of the loan funds. The 1996 law was required to implement one of the provisions of the FY 1997 budget.
This bill eliminates the language in the "Public School Capital Finance Assistance Act" which authorized the diversion and is a companion to Senate Bill No. 1660 which appropriates an amount equal to the $20.5 million diverted from the Public School Facilities Code Compliance Loan Fund and the Public School Facilities Loan Assistance Fund into those funds. This bill is necessary to ensure that future diversions are not made from those funds through budget language.
Eliminates language concerning the diversion of certain public school facilities loan fund repayments.