Bill Text: NJ A2740 | 2016-2017 | Regular Session | Amended
Bill Title: Establishes "Economic Redevelopment and Growth Grant Bond Financing Act," authorizing issuance of bonds secured by pledge of Economic Redevelopment and Growth Grant proceeds, municipal liens, and special assessment; expands "Redevelopment Area Bond Financing Law,"extends time to complete certain projects under "Long Term Tax Exemption Law." **
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2017-12-07 - Assembly Floor Amendment Passed (Johnson) [A2740 Detail]
Download: New_Jersey-2016-A2740-Amended.html
ASSEMBLY COMMITTEE SUBSTITUTE FOR
ASSEMBLY, No. 2740
STATE OF NEW JERSEY
217th LEGISLATURE
ADOPTED JANUARY 30, 2016
Sponsored by:
Assemblyman CRAIG J. COUGHLIN
District 19 (Middlesex)
Assemblyman JAMEL C. HOLLEY
District 20 (Union)
Assemblywoman ELIANA PINTOR MARIN
District 29 (Essex)
SYNOPSIS
Authorizes issuance of bonds secured by pledge of Economic Redevelopment and Growth Grant proceeds and municipal lien and imposition of special assessment to further secure bonds.
CURRENT VERSION OF TEXT
As reported by the Assembly Appropriations Committee on March 20, 2017, with amendments.
An Act concerning the issuance of bonds and imposition of certain municipal liens and special assessments, designated as the "Economic Redevelopment and Growth Grant Bond Financing Act," and supplementing Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Economic Redevelopment and Growth Grant Bond Financing Act."
2. As used in this act:
"Authority" means the New Jersey Economic Development Authority established pursuant to P.L.1974, c.80 (C.34:1B-1 et seq.), the New Jersey Redevelopment Authority established pursuant to section 4 of P.L.1996, c.62 (C.55:19-23) or other instrumentality created by law by the State with the power to incur debt and issue bonds and other obligations.
"Board" means the Local Finance Board established in the Division of Local Government Services in the Department of Community Affairs.
"Bonds" mean bonds, notes or other obligations issued by an authority, including any State entity, or a municipality to finance or refinance economic redevelopment and growth grant projects, and in connection therewith, to finance or refinance any other cost or expense of an authority, a State entity or a municipality pursuant to this act, the "Local Redevelopment and Housing Law," P.L.1992, c.79 (C.40A:12A-1 et al..), or other applicable law.
"Developer" means any person who enters or proposes to enter into a redevelopment incentive grant agreement pursuant to the provisions of section 9 of P.L.2009, c.90 (C.52:27D-489i), or its successors or assigns, including but not limited to a lender that completes an economic redevelopment and growth grant project, operates an economic redevelopment and growth grant project, or completes and operates an economic redevelopment and growth grant project. A developer also may be a municipal redeveloper as defined herein 1[or Rutgers, the State University of New Jersey]1.
1["economic] "Economic1 redevelopment and growth grant project" means a project for which an incentive grant has been approved pursuant to section 4 or section 5 of P.L.2009, c.90 (C.52:27D-489d or C.52:27D-489e).
"Incentive grant" means reimbursement of all or a portion of the project financing gap of an economic redevelopment and growth grant project through the State or a local Economic Redevelopment and Growth Grant program pursuant to section 4 or section 5 of P.L.2009, c. 90 (C.52:27D-489d or C.52:27D-489e).
"Incentive grant pledge" means an agreement between a developer and the issuer of bonds pursuant to which the developer pledges its incentive grant for repayment of the bonds, which pledge may be part of a bond indenture or other agreement related to the issuance of the bonds.
"Municipal redeveloper" means an applicant for a redevelopment incentive grant agreement, which applicant is:
a. a municipal government, a municipal parking authority, or a redevelopment agency acting on behalf of a municipal government as defined in section 3 of P.L.1992, c.79 (C.40A:12A-3); or
b. a developer of a mixed use parking project, provided that the parking component of the mixed use parking project is operated and maintained by a municipal parking authority for the term of any financial assistance granted pursuant to P.L.2015, c. 69.
"Municipality" means the municipal governing body or an entity acting on behalf of the municipality if permitted by the federal Internal Revenue Code of 1986, or, if a redevelopment agency or redevelopment entity is established in the municipality pursuant to P.L.1992, c.79 (C.40A:12A-1 et seq.) and the municipality so provides, the redevelopment agency or entity so established.
"Redevelopment incentive grant agreement" means an agreement between:
a. the State and the New Jersey Economic Development Authority and a developer; or
b. a municipality and a developer, or a municipal ordinance authorizing a project to be undertaken by a municipal redeveloper, under which, in exchange for the proceeds of an incentive grant, the developer agrees to perform any work or undertaking necessary for an economic redevelopment and growth grant project, including the clearance, development or redevelopment, construction, or rehabilitation of any structure or improvement of commercial, industrial, residential, or public structures or improvements within a qualifying economic redevelopment and growth grant incentive area or a transit village.
"Special assessment" means an assessment upon the lands or improvements on such lands, or both, on the real property benefitted by improvements undertaken pursuant to this act and assessed pursuant to chapter 56 of Title 40 of the Revised Statutes, R.S.40:56-1 et seq., except as otherwise provided in subsection b. of section 3 of this act.
"State entity" means the "Meadowlands Regional Commission," established by section 6 of P.L.2015, c.19 (C.5:10A-6), or any other entity created by State law with the power to undertake an economic redevelopment and growth grant project directly or through a State entity developer and with the power to determine the location, type, and character of an economic redevelopment and growth grant project or part of an economic redevelopment and growth grant project on land owned or controlled by it.
"State entity developer" means any person, firm, or corporation that shall enter into or propose to enter into a State entity development agreement with a State entity for an economic redevelopment and growth grant project under the enabling legislation governing the actions of the State entity or for any construction or other work forming a part of an economic redevelopment and growth grant project.
"State entity development agreement" means an agreement between a State entity and a State entity developer for an economic redevelopment and growth grant project.
3. a. In connection with any economic redevelopment and growth grant project, the municipality in which the project is located may issue bonds itself in the manner provided for herein or pursuant to the "Local Redevelopment and Housing Law," P.L.1992, c.79 (C.40A:12A-1 et al.) or may apply to an authority to issue bonds, regardless of whether the economic redevelopment and growth grant project is undertaken under municipal authority pursuant to P.L.1991, c.431 (C.40A:20-1 et seq.) or by a State entity developer pursuant to a State entity development agreement, which, in any case, may be secured by an incentive grant pledge, and may be further secured by a municipal lien, by special assessments, or both a municipal lien and special assessments, by the adoption of a resolution or ordinance, as applicable, of the governing body of the municipality, the authority, or the State entity to that effect.
b. In addition to, or in lieu of, an incentive grant pledge, a municipality may provide by ordinance for one or more special assessments on the economic redevelopment and growth grant project in accordance with chapter 56 of Title 40 of the Revised Statutes, R.S.40:56-1 et seq.; provided, however, the local improvements for which such special assessments may be made may include any improvement in the economic redevelopment and growth grant project whether or not listed at R.S.40:56-1 and, provided further, that the provisions of R.S.40:56-35 shall be applied so that if any installment of a special assessment shall remain unpaid for 30 days after the time at which it shall become due, the municipality may provide, by ordinance, either that: (1) the whole assessment or balance due thereon shall become and be immediately due; or, (2) any subsequent installments which would not yet have become due except for the default shall be considered as not in default and that the lien for the installments not yet due shall continue; and provided, further, that the ordinance may require that the assessments be payable in quarterly, semi-annual, or yearly installments, with legal interest thereon, over a period of years up to but in no event exceeding the period of years for which the bonds were issued, or for 30 years, whichever shall be less. In levying a special assessment on the lands or improvements, or both, on which the economic redevelopment and growth grant project is located, the municipality may provide that the amount of the special assessment shall be a specific amount, not to exceed the cost of the improvements, paid with respect to property on which the economic redevelopment and growth grant project is located. That specific amount shall, to the extent accepted by the owner of the property benefitted, be deemed the conferred benefit, in lieu of the amount being determined by the procedures otherwise applicable to determining the actual benefit conferred on the property. Special assessments levied pursuant to an ordinance adopted under this subsection shall constitute a municipal lien under R.S.40:56-33.
c. Upon adoption, a copy of the ordinance shall be filed for public inspection in the office of the municipal clerk, and there shall be published in a newspaper, published or circulating in the municipality, a notice stating the fact and the date of adoption and the place where the ordinance is filed and a summary of the contents of the ordinance. The notice shall state that any action or proceeding of any kind or nature in any court questioning the validity or proper authorization of the ordinance or the actions authorized to be taken as set forth in the ordinance shall be commenced within 20 days after the publication of the notice. If no action or proceeding questioning the validity of the ordinance providing for tax abatement, special assessments, or other actions authorized by the ordinance shall be commenced or instituted within 20 days after the publication of the notice, the county and the school district and all other municipalities within the county and all residents and taxpayers and owners of property therein shall be forever barred and foreclosed from instituting or commencing any action or proceeding in any court questioning the validity or enforceability of the ordinance or the validity or enforceability of acts authorized under the ordinance, and the ordinance and acts authorized by the ordinance shall be conclusively deemed to be valid and enforceable in accordance with their terms and tenor.
d. The municipality may include in the terms of a bond or contract, including an incentive grant pledge, a provision that the pledge of an incentive grant or special assessments shall constitute a municipal charge for the purposes of R.S.54:4-66.
e. The incentive grant pledge or special assessments, or both, may be assigned directly by the municipality or the authority or the trustee for the bonds as payment or security for the bonds. Notwithstanding any law to the contrary, the assignment shall be an absolute assignment of all the municipality's right, title, and interest in the incentive grant pledge or special assessments, or both, or portion thereof, along with the rights and remedies provided to the municipality under the agreement including, but not limited to, the right of collection of payments due. Incentive grant pledges and special assessments assigned as provided hereunder shall not be included in the general funds of the municipality, nor shall they be subject to any laws regarding the receipt, deposit, investment, or appropriation of public funds and shall retain such status notwithstanding enforcement of the payment or assessment by the municipality or assignee as provided herein. The municipality shall be a "person" within the meaning of that term as defined in section 3 of P.L.1974, c.80 (C.34:1B-3); and the purpose described in this section shall be a "project" within the meaning of that term as defined in section 3 of P.L.1974, c.80 (C.34:1B-3).
f. Notwithstanding the provisions of subsection g. of section 37 of P.L.1992, c.79 (C.40A:12A-37), the bonds issued pursuant to this section may be issued as non-recourse obligations, and unless otherwise provided for by a separate action of the municipality to guarantee such bonds or otherwise provide for a pledge of the municipality's full faith and credit shall not, except for such action, be considered to be direct and general obligations of the municipality, and, absent such action, the municipality shall not be obligated to levy and collect a tax sufficient in an amount to pay the principal and interest on the bonds when the same become due and payable. The provisions of the "Local Government Supervision Act (1947)," P.L.1947, c.151 (C.52:27BB-1 et seq.) shall not apply to any bonds issued or authorized pursuant to this section and those bonds shall not be considered gross debt of the municipality on any debt statement filed in accordance with the "Local Bond Law," N.J.S.40A:2-1 et seq., and the provisions of chapter 27 of Title 52 of the Revised Statutes shall not apply to such bonds.
g. The proceeds from the sale of bonds and any funds provided by any department of the State, authority created by the State or bi-state authority for the purposes described in this act or for the purpose of financing or refinancing an economic redevelopment and growth grant project pursuant to a State entity development agreement, shall not require compliance with public bidding laws, including the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.), or any other statute where the developer or State entity developer, as the case may be, shall undertake the economic redevelopment and growth grant project. The use of these funds shall be subject to public accountability and oversight by the issuer of those bonds, regardless of whether the municipality, agency, or authority provides the funds.
h. In order to provide additional security for bonds issued to finance an economic redevelopment and growth grant project, the municipality may utilize powers otherwise provided by law, including the "Local Redevelopment and Housing Law," P.L.1992, c.79 (C.40A:12A-1 et al), to provide for any extension of the municipality's credit to any developer or State entity developer, as the case may be, or its full faith and credit which may include a full faith and credit lease as security for the bonds or any loan to a developer or State entity developer, as the case may be. To the extent that the municipality provides for a full faith and credit guarantee of any bonds, but determines not to authorize the issuance of bonds or notes to provide for the funding source thereof, or otherwise determines to enter into a full faith and credit lease, it may do so by resolution approved by a majority of the full governing body. To the extent that bonds or notes are authorized as provided above, such bonds or notes shall be authorized pursuant to the provisions of the "Local Bond Law," N.J.S.40A:2-1 et seq., and shall be deductible from the gross debt of the municipality until such time as such bonds or notes are actually issued, and only up to the amount actually issued, to fund such guarantee.
i. A financial instrument, whether issued by a municipality or an authority, which is secured in whole or in part by the full faith and credit thereof as provided herein, shall be subject to the review and approval of the Local Finance Board. That review and approval shall be made prior to approval of, in the case of a municipality, an introduced ordinance or, in the case of an authority, a resolution. The board shall be entitled to receive from the applicant an amount sufficient to provide for all reasonable professional and other fees and expenses incurred by it for the review, analysis, and determination with respect thereto. As part of its review, the board shall specifically solicit comments from the New Jersey Economic Development Authority in addition to comments from the public. As part of the board's review and approval, it shall consider where appropriate one or more of the following: whether the economic redevelopment and growth grant project or plan promotes the goals and objectives of P.L.2009, c.90 (C.52:27D-489a et al.): approaches and concepts to reduce congestion; enhanced mobility; assistance in the redevelopment of our municipalities; or otherwise improves the quality of life of our citizens.
j. A municipality that has assigned any portion of the incentive grant pledge it receives as payment or security for bonds, may, with the consent of the developer, also pledge a portion of the incentive grant pledge as payment or security for bonds in order to finance or refinance any cost or expense of the municipality, State entity or authority.
k. In the case of a
municipality which is otherwise subject to tax or revenue sharing pursuant to
law and which assigns a portion of the incentive grant pledge or special
assessments to secure bonds issued by the municipality or the authority, the
assigned portion of the incentive grant pledge or special assessments shall not
be considered part of the tax or revenue sharing formula or calculation of
municipal revenues for the purpose of determining whether that municipality is
obligated to make payment to, or receive a credit from, any tax sharing or
revenue sharing pool.
4. a. Payments required to be made in accordance with an incentive grant pledge entered into pursuant to this act shall be a continuous lien on the land against which the ordinance is recorded on and after the date of recordation of both the ordinance and the agreement, whether simultaneously or not, or the date of confirmation of the special assessments, whichever is earlier. All subsequent payments of the incentive grant pledge thereunder, interest, penalties, and costs of collection which thereafter fall due or accrue shall be added and relate back to and be a part of the initial lien. Upon recordation of the ordinance and agreement, the incentive grant pledge shall constitute a municipal lien within the meaning, and for all purposes, of law.
b. If bonds are issued, the municipality, the developer or the State entity developer, as the case may be, may record, either simultaneously or at different times, any ordinance adopted by the municipality relating to the incentive grant pledge or special assessments and, either simultaneously with the ordinance or at different times, a copy of the agreement or agreements. The ordinance, when recorded, shall contain a legend at the top of the front page substantially as follows:
THIS ORDINANCE SECURES BONDS OR OTHER OBLIGATIONS ISSUED IN ACCORDANCE WITH THE PROVISIONS OF THE "ECONOMIC REDEVELOPMENT AND GROWTH GRANT BOND FINANCING ACT" AND THE LIEN HEREOF IN FAVOR OF THE OWNERS OF SUCH BONDS OR OTHER OBLIGATIONS IS A MUNICIPAL LIEN SUPERIOR TO ALL OTHER NON-MUNICIPAL LIENS HEREAFTER RECORDED.
c. Notwithstanding any law to the contrary, upon recordation of both the ordinance and any accompanying agreement, the lien thereof shall be perfected for all purposes in accordance with law and the lien shall thereafter be superior to all non-municipal liens thereafter recorded or otherwise arising, without any additional notice, recording, filing, continuation filing, or action, until the payment in full of the bonds. The lien thereby established shall apply not only to the bonds initially issued, but also to any refinancing or refunding thereof, as well as to any additional bonds thereafter issued on a parity therewith in accordance with the provisions of the original documents securing the initial bonds; provided, however, that in the event any ordinance or agreement is amended or supplemented in a way which increases the amount of an incentive grant pledge or special assessments, the lien as to that increase shall be perfected and apply upon the recordation of the amended or supplemented ordinance and agreement (including the above-recited legend). Except as set forth in this section, no amendment or supplement to the ordinance or agreement thereafter recorded shall affect the perfection or priority of the lien established upon original recordation thereof.
d. Upon the final payment in full of any bonds secured as provided in this act, the lien established hereby shall terminate, and the municipality shall record a notice to that effect.
5. a. In lieu of, or in addition to, the provisions of section 4 of this act, the municipality may provide in the agreement that the incentive grant pledge, if any, is to be secured by a mortgage. In that event the mortgage may also be assigned and pledged to the repayment of the bonds authorized herein.
b. The assignment of any mortgage that secures an incentive grant pledge, if any, may also be an absolute assignment of all or part of the municipality's right, title, and interest in the mortgage and, to the extent assigned, any moneys realized from the foreclosure of the mortgaged property shall not be included in the general funds of the municipality.
c. After the bonds are paid and no longer deemed to be outstanding, the assignment of the mortgage shall terminate.
6. All bonds issued pursuant to this act, are hereby declared to be issued by a political subdivision of this State and for an essential public and governmental purpose and the bonds, and the interest thereon and the income therefrom, and all facility charges, funds, revenues, and other moneys pledged or available to pay or secure the payment of the bonds, or interest thereon, shall at all times be exempt from taxation except for transfer inheritance and estate taxes.
7. The State of New Jersey does hereby pledge to and covenant and agree with the holders of any bonds issued pursuant to this act that the State will not limit or alter the terms of any agreement, ordinance, or resolution made in connection with the security for and the issuance and sale of any bonds, so as to in any way impair the rights or remedies of such holders, and will not modify in any way the exemption from taxation provided for in this act until the bonds, together with interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged or provided for.
8. If any section, subsection, clause or provision of this act, shall be adjudged to be unconstitutional or ineffective in whole or in part, to the extent that it is not adjudged unconstitutional or is not ineffective, it shall be valid and effective and no other section, subsection, clause or provision of this act shall on account thereof be deemed invalid or ineffective, and the inapplicability or invalidity of any section, subsection, clause or provision of this act, in any one or more instances or under any one or more circumstances shall not be taken to affect or prejudice in any way its applicability or validity in any other instance or under any other circumstance.
9. After issuance, pursuant to this act, all bonds shall be conclusively presumed to be fully authorized and issued by all courts and officers of this State, and any person shall be estopped from questioning their sale, execution or delivery.
10. This act shall take effect immediately.
