N.J. Stat. tit. 49, ch. 2B

in effect

N.J. Stat. § 49:2B-1 Short title

1. This act shall be known and may be cited as the "Refunding Bond Act of 1985." L.1985,c.74,s.1.

N.J. Stat. § 49:2B-2 Findings

2. The Legislature finds that: a. Many series of bonds of the State have been issued periodically to fulfill the various purposes for which those bonds were authorized; b. It has been necessary to sell some series of bonds of the State at times when interest rates in the municipal bond market have been higher than presently prevailing rates; c. Projections indicate that, when interest rates decline in the municipal bond market, certain refinancing methods can be utilized to reduce, on a present value basis, the aggregate amount of principal and interest payable on bonds of the State; d. Laws of the State enacted prior to the effective date of this act and authorizing the issuance of bonds do not provide the authority needed to utilize those refinancing methods; e. Bonds of the State have heretofore and will hereafter be issued pursuant to those laws; f. It is necessary for the State of New Jersey to provide for refinancing methods that will reduce, on a present value basis, the aggregate amount of principal and interest payable on bonds of the State in order to make more efficient use of the State's resources; g. At the general election held in the month of November 1983, the people of the State approved, in accordance with the provisions of the Constitution of the State of New Jersey, the amendment of Article VIII, Section II, paragraph 3 of the Constitution to allow the Legislature to authorize actions which would facilitate greater financial flexibility in connection with the refinancing of all or a portion of any outstanding debts of liabilities of the State theretofore or thereafter created; and h. The purpose of this Refunding Bond Act of 1985 is to implement the purpose of that amendment to the Constitution. L.1985,c.74,s.2.

N.J. Stat. § 49:2B-3 Definitions

3. As used in this act: a. "Outstanding bonds" means any bonds of the State of New Jersey, and the interest coupons, if any, appertaining thereto, which have heretofore been issued or which are hereafter issued pursuant to any law of the State and which are direct obligations of the State for which the faith and credit of the State are pledged for the payment of the interest thereon as it shall become due and the payment of the principal at maturity. b. "Government securities" means any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any federal agency to the extent those obligations are unconditionally guaranteed by the United States of America and any certificates or any other evidences of any ownership interest in those obligations of, or unconditionally guaranteed by, the United States of America or in specified portions of those obligations (which may consist of the principal of, or the interest on, those obligations). c. "State Treasurer" means the Treasurer of the State of New Jersey. d. "Refinancing" means providing for the payment of an obligation at or prior to its maturity or upon redemption, as provided in this act. e. "Refunding bonds" means bonds of the State issued under this act. L.1985,c.74,s.3; amended 1992,c.182,s.1.

N.J. Stat. § 49:2B-4 Amount authorized

4. Refunding bonds of the State of New Jersey are authorized to be issued in an amount not to exceed the amount necessary to effectuate the refinancing of all or any portion of any series of outstanding bonds in accordance with the terms and conditions of section 5 of this act. L.1985,c.74,s.4.

N.J. Stat. § 49:2B-5 Refunding bonds, terms

5. a. Refunding bonds shall be serial bonds or term bonds or a combination thereof and shall be known as "refunding bonds." They may be subject to redemption prior to maturity, including any sinking fund redemptions, at any time not later than five years following the latest scheduled maturity date, determined without regard to any redemptions prior thereto, or any of the outstanding bonds to be refinanced thereby, and shall mature and be paid in no event later than 35 years following the date of issuance of the refunding bonds, but may be issued in whole or in part for a shorter term. b. The issuing officials named in section 6 of this act may issue refunding bonds at any time for the purpose set forth in section 4 of this act, subject to the following provisions: (1) Refunding bonds may be issued at any time prior to the maturity or redemption of the outstanding bonds to be refinanced thereby as the issuing officials shall determine; (2) Each series of refunding bonds may be issued in a sufficient amount to pay or to provide for the payment of the principal of the outstanding bonds to be refinanced, together with any redemption premium on the outstanding bonds, any interest accrued or to accrue on the outstanding bonds to be refinanced to the date of payment of those outstanding bonds, the expenses of issuing the refunding bonds and the expenses, if any, of paying the outstanding bonds to be refinanced; (3) No refunding bonds shall be issued unless the issuing officials shall first determine that the present value of the aggregate principal of and interest on the refunding bonds is less than the present value of the aggregate principal of and interest on the outstanding bonds to be refinanced, except that, for the purposes of this limitation, present value shall be computed using a discount rate equal to the yield of those refunding bonds, and yield shall be computed using an actuarial method based upon a 360-day year with semiannual compounding and upon the prices paid to the State by the initial purchasers of those refunding bonds; and (4) Any refinancing authorized under this act may be effected by the sale of the refunding bonds and the application of the proceeds of the refunding bonds to the payment of the principal of the outstanding bonds to be refinanced thereby, together with any redemption premium thereon, any interest accrued or to accrue on those outstanding bonds to be refinanced to the date of payment of the outstanding bonds, the expenses of issuing the refunding bonds and the expenses, if any, of paying the outstanding bonds to be refinanced, as provided in this act. L.1985,c.74,s.5.

N.J. Stat. § 49:2B-6 Issuing officials

6. The Governor, State Treasurer and Comptroller of the Treasury or any two of those officials (hereinafter referred to as "the issuing officials") are authorized to carry out the provisions of this act relating to the issuance of refunding bonds, and shall determine all matters in connection therewith subject to the provisions of this act. If any of those officials shall be absent from the State or incapable of acting for any reason, his powers and duties shall be exercised and performed by the person authorized by law to act in his place as a State official. L.1985,c.74,s.6.

N.J. Stat. § 49:2B-7 Pledge

7. Refunding bonds issued in accordance with the provisions of this act shall be a direct obligation of the State of New Jersey and the faith and credit of the State are pledged for the payment of the interest thereon as it shall become due and the payment of the principal at maturity. The principal and interest on refunding bonds shall be exempt from taxation by the State or by any county, municipality or other taxing district of the State. L.1985,c.74,s.7.

N.J. Stat. § 49:2B-8 Authentication

8. Refunding bonds shall be signed in the name of the State by the Governor or by his facsimile signature, under the Great Seal of the State (which seal may be by facsimile or by way of any other form of reproduction on the refunding bonds), and attested by the manual or facsimile signature of the Secretary of State, or an Assistant Secretary of State, shall be countersigned by the facsimile signature of the Comptroller of the Treasury and may be authenticated by an authenticating agent or bond registrar, as the issuing officials shall determine. Interest coupons, if any, attached to the bonds shall be signed by the facsimile signature of the Comptroller of the Treasury. Refunding bonds may be issued notwithstanding that any of the officials signing them or whose facsimile signatures appear on the refunding bonds or coupons shall cease to hold office at the time of that issue or at the time of the delivery of the bonds to the purchaser. L.1985,c.74,s.8.

N.J. Stat. § 49:2B-9 Recitals

9.a. Refunding bonds shall recite that they are issued for the purposes set forth in section 4 of this act and that they are issued in pursuance of this act and that this act was enacted in accordance with the provisions of the Constitution of the State of New Jersey. The recital in the bonds shall be conclusive evidence of the authority of the State to issue those bonds and of their validity. Any refunding bonds containing that recital shall in any suit, action or proceeding involving their validity be conclusively deemed to be fully authorized by this act and to have been issued, sold, executed and delivered in conformity therewith and with all other provisions of statutes applicable thereto, and shall be incontestable for any cause. b. Refunding bonds shall be issued in denominations and in forms, whether coupon, fully registered or book-entry, and with or without provisions for interchangeability thereof, as may be determined by the issuing officials. L.1985,c.74,s.9.

N.J. Stat. § 49:2B-10 Issues as separate series, interest payable

10. When refunding bonds are issued from time to time, the refunding bonds of each issue shall constitute a separate series to be designated by the issuing officials. Each series of refunding bonds shall bear rates of interest as may be determined by the issuing officials, which interest shall be payable at such times and in such manner as may be determined by the issuing officials. L.1985,c.74,s.10; amended 1992,c.182,s.2.

N.J. Stat. § 49:2B-11 Sale

11. Refunding bonds may be issued and sold at public or private sale at prices and terms, conditions and regulations as the issuing officials may prescribe. L.1985,c.74,s.11.

N.J. Stat. § 49:2B-12 Temporary bonds

12. Until permanent refunding bonds can be prepared, the issuing officials may, in their discretion, issue in lieu of the permanent refunding bonds, temporary refunding bonds in a form and with privileges as to registration and exchange for permanent refunding bonds as may be determined by the issuing officials. L.1985,c.74,s.12.

N.J. Stat. § 49:2B-13 Application of proceeds

13. a. Proceeds derived from the sale of each series of refunding bonds shall be applied, together with any other moneys legally available therefor, to the payment of the expenses authorized by this act and to the immediate payment of the principal of, redemption premium, if any, and interest due on any outstanding bonds to be refinanced by the refunding bonds, or, to the extent not required for that immediate payment, shall be deposited, together with any other moneys legally available therefor, in trust with the State Treasurer, to be held separate and apart from all other funds of the State, or, at the direction of the issuing officials, in trust with one or more trustees or escrow agents, which trustees or escrow agents shall be trust companies or national or State banks having powers of a trust company, located either within or without the State. Proceeds or moneys deposited in trust with the State Treasurer or with one or more trustees or escrow agents shall be applied solely to the payment when due of the principal of, redemption premium, if any, and interest due and to become due on those outstanding bonds to be refinanced on or prior to the redemption date or maturity date of the outstanding bonds, as the case may be. Proceeds or moneys so held by the State Treasurer or deposited with trustees or escrow agents may be invested in government securities (including government securities issued or held in book-entry form on the books of the Department of the Treasury of the United States); except that those government securities shall not be subject to redemption prior to their maturity other than at the option of the holder thereof. Except as provided in subsection b. neither government securities nor moneys so deposited with the State Treasurer or with trustees or escrow agents shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of, redemption premium, if any, and interest on the outstanding bonds to be refinanced by the refunding bonds; except that any cash received from principal or interest payment on government securities deposited with the State Treasurer or with trustees or escrow agents: (1) to the extent that the cash will not be required at any time for that purpose, shall be paid over to the State as received by the State Treasurer or by the trustees or escrow agents, and (2) to the extent that cash will be required for that purpose at a later date, shall, to the extent practicable and legally permissible, be reinvested in government securities maturing at times and in amounts sufficient to pay when due the principal of, redemption premium, if any, and interest to become due on the outstanding bonds on and prior to the redemption date or maturity date of the outstanding bonds, as the case may be, and interest earned from those reinvestments to the extent not required for the payment of bonds shall be paid over to the State, as received by the State Treasurer or by the trustees or escrow agents. b. Notwithstanding anything to the contrary contained in this section: (1) the State Treasurer or trustees or escrow agents shall, if so directed by the issuing officials, apply moneys on deposit with the State Treasurer or the trustees or escrow agents pursuant to the provisions of this section and redeem or sell government securities so deposited with the State Treasurer or the trustees or escrow agents and apply the proceeds thereof to: (a) the purchase of the outstanding bonds which were refinanced by the deposit with the State Treasurer or the trustees or escrow agents of the moneys and government securities and immediately thereafter cancel all outstanding bonds so purchased or (b) the purchase of different government securities; except that the moneys and government securities on deposit with the State Treasurer or the trustees or escrow agents after the purchase and cancellation of the outstanding bonds or the purchase of different government securities shall be sufficient to pay, when due, the principal of, redemption premium, if any, and interest on all other outstanding bonds in respect of which the moneys and government securities were deposited with the State Treasurer or the trustees or escrow agents on or prior to the redemption date or maturity date of the outstanding bonds, as the case may be; and (2) if on any date, as a result of any purchases and cancellations of outstanding bonds or any purchases of different government securities as provided in this subsection, the total amount of moneys and government securities remaining on deposit with the State Treasurer or the trustees or escrow agents is in excess of the total amount which would have been required to be deposited with the State Treasurer or the trustees or escrow agents on that date in respect of the remaining outstanding bonds for which the deposit was made in order to pay when due the principal of, redemption premium, if any, and interest on those remaining outstanding bonds, the State Treasurer or the trustees or escrow agents shall, if so directed by the issuing officials, pay the amount of that excess to the State. c. Any amounts held by the State Treasurer in a separate fund for the payment of the principal of and interest on outstanding bonds to be refinanced, as provided in this section, shall, if so directed by the issuing officials, be transferred by the State Treasurer for deposit with one or more trustees or escrow agents as provided in this section, or for deposit with the State Treasurer as provided in this section, to be held separate and apart from all other funds of the State, to be applied to the payment when due of the principal of, redemption premium, if any, and interest to become due on those outstanding bonds, as provided in this section, or be applied by the State Treasurer to the payment when due of the principal of and interest on refunding bonds issued under this act to refinance those outstanding bonds. d. The State Treasurer is authorized, upon direction of the issuing officials, to enter into contracts with one or more trust companies or national or State banks, to act as trustees or escrow agents as provided in this section, on terms and conditions as shall be approved by the issuing officials. L.1985,c.74,s.13.

N.J. Stat. § 49:2B-14 Application of trust amounts

14. The moneys and the principal of and interest on government securities held in trust as provided in section 13 of this act shall be applied for the purposes provided in this act, and those amounts are appropriated for those purposes. L.1985,c.74,s.14.

N.J. Stat. § 49:2B-15 Replacement of lost bonds or coupons

15. If any coupon refunding bonds or coupons thereunto appertaining or any registered refunding bonds become lost, mutilated or destroyed, a new refunding bond or coupon shall be executed and delivered of like tenor, in substitution for the lost, mutilated or destroyed refunding bonds or coupons, upon the owner furnishing to the issuing officials evidence satisfactory to them of the loss, mutilation or destruction, proof of ownership and such security and indemnity and reimbursement for expenses as the issuing officials may require. L.1985,c.74,s.15.

N.J. Stat. § 49:2B-16 Application of accrued interest

16. Accrued interest received upon the sale of refunding bonds shall be applied to the discharge of a like amount of interest upon those bonds when due. Any expense incurred by the issuing officials for advertising, engraving, printing, clerical, authenticated, registering, trustees, escrow agents, legal, financial, advisory or other services necessary or convenient to carry out the duties imposed upon them by the provisions of this act, as well as the overhead and other expenses of the Department of the Treasury properly allocable to the cost of the State Treasurer performing the duties provided in this act, shall be paid from the proceeds of the sale of the bonds, by the State Treasurer upon warrant of the Comptroller of the Treasury, in the same manner as other obligations of the State are paid. L.1985,c.74,s.16.

N.J. Stat. § 49:2B-17 Maturities

17. Each series of refunding bonds shall mature, including any sinking fund redemptions, at those times not later than five years following the latest scheduled maturity date, determined without regard to any redemptions prior thereto, of any of the outstanding bonds to be refunded thereby, but in no event later than 35 years following the date of issuance of the refunding bonds, and in those amounts as the issuing officials shall determine in accordance with the provisions of this act. The issuing officials may reserve to the State by appropriate provision in the refunding bonds of any series the power to redeem all or any of those bonds prior to maturity at prices and upon such terms and conditions as may be provided in those bonds. L.1985,c.74,s.17.

N.J. Stat. § 49:2B-18 Bonds secured by amounts in trust

18.a. Any refunding bonds and any coupons appertaining thereto shall no longer be deemed to be outstanding, shall no longer constitute a direct obligation of the State of New Jersey and the faith and credit of the State shall no longer be pledged to the payment of the principal of and interest on those bonds, and those bonds shall be secured solely by and payable solely from moneys and government securities deposited in trust with the State Treasurer, to be held separate and apart from all other funds of the State, or in trust with one or more trustees or escrow agents, which trustees or escrow agents shall be trust companies or national or State banks having powers of a trust company, located either within or without the State, whenever there shall be deposited in trust with the State Treasurer or with the trustees or escrow agents either moneys or government securities (including government securities issued or held in book-entry form on the books of the Department of the Treasury of the United States) the principal of and interest on which when due will provide money which, together with moneys, if any, deposited with the State Treasurer or with the trustees or escrow agents at the same time, shall be sufficient to pay when due the principal of, redemption premium, if any, and interest due and to become due on those bonds on or prior to the redemption date or maturity date of those bonds, as the case may be; except that government securities shall not be subject to redemption prior to their maturity other than at the option of the holder thereof; and except that those moneys and government securities shall be deposited with the State Treasurer or with one or more trustees or escrow agents as provided in the resolution of the issuing officials authorizing the issuance of the refunding bonds for which the deposit is made. b. The State of New Jersey hereby covenants with the holders of any refunding bonds for which government securities or moneys shall have been deposited in trust with the State Treasurer or with the trustees or escrow agents as provided in subsection a. of this section that, except as provided in subsection c. of this section, neither the government securities nor moneys so deposited with the State Treasurer or with the trustees or escrow agents as provided in subsection a. of this section that, except as provided in subsection c. of this section, neither the government securities nor moneys so deposited with the State Treasurer or with the trustees or escrow agents shall be withdrawn or used by the State for any purpose other than, and shall be held in trust for, the payment of the principal of, redemption premium, if any, and interest to become due on those bonds; except that any cash received from the principal or interest payments on government securities deposited with the State Treasurer or with trustees or escrow agents: (1) to the extent that cash will not be required at any time for that purpose, shall be paid over to the State as received by the State Treasurer or by the trustees or escrow agents, free and clear of any trust, lien, pledge or assignment securing those bonds, and (2) to the extent that cash will be required for that purpose at a later date, shall, to the extent practicable and legally permissible, be reinvested in government securities maturing at times and in amounts sufficient to pay when due the principal of, redemption premium, if any, and interest to become due on hose bonds on and prior to the redemption date or maturity date of those bonds, as the case may be, and interest earned from those reinvestments shall be paid over to the State, as received by the State Treasurer or by the trustees or escrow agents, free and clear of any trust, lien or pledge securing those bonds. c. Notwithstanding anything to the contrary contained in this section: (1) the State Treasurer or trustees or escrow agents shall, if so directed by the issuing officials, apply moneys on deposit with the State Treasurer or with those trustees or escrow agents pursuant to the provisions of this section and redeem or sell government securities so deposited with the State Treasurer or with those trustees or escrow agents and apply the proceeds thereof to (a) the purchase of the refunding bonds which were refinanced by the deposit with the State Treasurer or with the trustees or escrow agents of those moneys and government securities and immediately thereafter cancel all refunding bonds so purchased, or (b) the purchase of different government securities, if the moneys and government securities on deposit with the State Treasurer or with the trustees or escrow agents after the purchase and cancellation of the refunding bonds or the purchase of different government securities shall be sufficient to pay when due the principal of, redemption premium, if any, and interest on all other refunding bonds in respect of which the moneys and government securities were deposited with the State Treasurer or with the trustees or escrow agents on or prior to the redemption date or maturity date of the refunding bonds, as the case may be; and (2) if on any date, as a result of any purchases and cancellations of refunding bonds or any purchases of different government securities as provided in this subsection, the total amount of moneys and government securities remaining on deposit with the State Treasurer or with the trustees or escrow agents is in excess of the total amount which would have been required to be deposited with the State Treasurer or with the trustees or escrow agents on the date in respect of the remaining refunding bonds for which that deposit was made in order to pay when due the principal of, redemption premium, if any, and interest on those remaining refunding bonds, the State Treasurer or the trustees or escrow agents shall, if so directed by the issuing officials, pay the amount of that excess to the State free and clear of any trust, lien, pledge or assignment securing those refunding bonds. L.1985, c.74, s.18.

N.J. Stat. § 49:2B-19 Appropriations

19. To provide funds to meet the interest and principal payment requirements for the refunding bonds issued under this act and outstanding, there is hereby appropriated in the order following: a. Revenue derived from the collection of taxes as provided by the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), or so much thereof as may be required; and b. If in any year or at any time funds, as hereinabove appropriated, necessary to meet interest and principal payments upon outstanding refunding bonds, be insufficient or not available, then and in that case there shall be assessed, levied and collected annually in each of the municipalities of the counties of this State a tax on real and personal property upon which municipal taxes are or shall be assessed, levied and collected, sufficient to meet the interest on all outstanding refunding bonds issued under this act and on those refunding bonds as it is proposed to issue under this act in the calendar year in which that tax is to be raised and for the payment of refunding bonds falling due in the year following the year for which the tax is levied. The tax thus imposed shall be assessed, levied and collected in the same manner and at the same time as other taxes upon real and personal property are assessed, levied and collected. The governing body of each municipality shall cause to be paid to the county treasurer of the county in which each municipality is located, on or before December 15 in each year, the amount of tax herein directed to be assessed and levied, and the county treasurer shall pay the amount of that tax to the State Treasurer on or before December 20 in each year. If on or before December 31 in any year the issuing officials shall determine that there are moneys in the General Fund beyond the needs of the State, sufficient to meet the principal of refunding bonds falling due and all interest payable in the ensuing calendar year, if the issuing officials shall by resolution so find and shall file their findings in the office of the State Treasurer, whereupon the State Treasurer shall transfer the moneys to a separate fund to be designated by him, and shall pay the principal and interest out of that fund as it shall become due and payable, and the other sources of payment of that principal and interest provided for in this section shall not then be available, and the receipts for that year from the tax specified in subsection a. of this section shall thereon be considered and treated as part of the General Fund, available for general purposes. L.1985,c.74,s.19.

N.J. Stat. § 49:2B-20 Insufficiency of funds

20. Should the State Treasurer, by December 31 of any year, deem it necessary, because of insufficiency of funds to be collected from the sources of revenues as provided in this act, to meet the interest and principal payments for the year after the ensuing year, then the State Treasurer shall certify to the Comptroller of the Treasury the amount necessary to be raised by taxation for those purposes, the amount to be assessed, levied and collected for and in the ensuing calendar year. In that case the Comptroller of the Treasury shall, on or before March 1 following, calculate the amount in dollars to be assessed, levied and collected in each county. That calculation shall be based upon the corrected assessed valuation of the county for the year preceding the year in which the tax is to be assessed, but the tax shall be assessed, levied and collected upon the assessed valuation of the year in which the tax is assessed and levied. The Comptroller of the Treasury shall certify that amount to the county board of taxation and the county treasurer of each county. The county board of taxation shall include the proper amount in the current tax levy of the several taxing districts of the county in proportion to the ratables as ascertained for the current year. L.1985,c.74,s.20.

N.J. Stat. § 49:2B-21 Reports, legislative authority

21.a. The issuing officials named in section 6 of this act shall cause to be prepared and delivered to the Joint Appropriations Committee's Subcommittee on Transfers, or its successor, reports or information as the subcommittee may request from time to time concerning the use of the authority vested in the issuing officials by this act. b. upon the decision by the issuing officials to issue refunding bonds pursuant to section 5, and prior to the sale of those bonds, the issuing officials shall transmit to the Joint Appropriations Committee's Subcommittee on Transfers a report that a decision has been made, reciting the basis on which the decision was made, including an estimate of the debt service savings to be achieved and the calculations upon which the issuing officials relied when making the decision to issue refunding bonds. The report shall also disclose the intent of the issuing officials to issue and sell the refunding bonds at public or private sale and the reasons therefor. c. The Joint Appropriations Committee's Subcommittee on Transfers shall have authority to approve or disapprove the sale of refunding bonds as included in each report submitted in accordance with subsection b. of this section. The subcommittee shall notify the issuing officials in writing of the approval or disapproval as expeditiously as possible. d. No refunding bonds shall be issued unless the report has been submitted to and approved by the Joint Appropriations Committee's Subcommittee on Transfers as set forth in subsection b. of this section. e. Within 30 days after the sale of the refunding bonds, the issuing officials shall notify the Subcommittee on Transfers of the result of that sale, including the prices and terms, conditions and regulations concerning the refunding bonds, the actual amount of debt service savings to be realized as a result of the sale of refunding bonds, and the intended use of the proceeds from the sale of those bonds pursuant to section 13 of this act. f. The subcommittee shall, however, review all information and reports submitted in accordance with this section and may, on its own initiative, make observations and recommendations to the issuing officials, or to the Legislature, or both, as it deems appropriate. L.1985,c.74,s.21.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026