Bill Text: NJ S500 | 2010-2011 | Regular Session | Introduced
Bill Title: Provides for DCA to set maximum loan amounts to volunteer emergency service organizations to purchase vehicles and equipment.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2010-01-12 - Introduced in the Senate, Referred to Senate Law and Public Safety Committee [S500 Detail]
Download: New_Jersey-2010-S500-Introduced.html
STATE OF NEW JERSEY
214th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION
Sponsored by:
Senator JOHN A. GIRGENTI
District 35 (Bergen and Passaic)
Senator ANTHONY R. BUCCO
District 25 (Morris)
SYNOPSIS
Provides for DCA to set maximum loan amounts to volunteer emergency service organizations to purchase vehicles and equipment.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act concerning loans to volunteer emergency service organizations and amending P.L.1987, c.8.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.1987, c.8 (C.52:27D-363) is amended to read as follows:
3. a. The department is authorized, upon application of any volunteer emergency service organization, to make loans for the following purposes:
(1) For establishing or modernizing emergency facilities. The amount of a loan for this purpose shall not exceed 50% of the total cost or [$50,000.00] the maximum amount established by the commissioner pursuant to subsection a. of section 5 of P.L.1987, c.8 (C.52:27D-365), whichever is less. The notarized financial statement filed pursuant to subsection d. of this section shall show that the applicant has available 20% of the total cost of the emergency facilities in unobligated funds. Proceeds of the loan shall be used only for purposes of land acquisition or construction, and shall not be used for payment of fees for design, planning, preparation of applications, or any other cost not directly attributable to land acquisition or construction.
(2) For purchasing emergency vehicles. The amount of a loan for this purpose shall not exceed [$50,000.00] the maximum amount established by the commissioner pursuant to subsection a. of section 5 of P.L.1987, c.8 (C.52:27D-365) for any individual item, or 50% of the total cost, whichever is less. The notarized financial statement filed pursuant to subsection d. of this section shall show that the applicant has available 20% of the total cost of the emergency vehicle in unobligated funds.
(3) For purchasing emergency equipment. The amount of a loan for this purpose shall not exceed [$10,000.00] the maximum amount established by the commissioner pursuant to subsection a. of section 5 of P.L.1987, c.8 (C.52:27D-365). No volunteer emergency service organization shall receive a loan under this paragraph more than once in any five-year period.
(4) For refinancing of debt incurred or contracts entered into and used for the purchase or modernization of emergency facilities, emergency equipment or emergency vehicles. The amount of a loan under this paragraph shall be limited to the monetary limitations as provided in paragraphs (1), (2) and (3) of this subsection.
(5) For repair or rehabilitation of existing emergency vehicles or equipment when it has been determined that the standards of the National Fire Protection Association (NFPA) are no longer met, and that the repair or rehabilitation, or both, will bring the vehicle or equipment into compliance with NFPA standards. Loans for the repair or rehabilitation of emergency vehicles or equipment shall [be for not less than $1,000.00 nor more than $35,000.00] not exceed the maximum amount established by the commissioner pursuant to subsection a. of section 5 of P.L.1987, c.8 (C.52:27D-365); nor shall a loan exceed 80% of the total cost of repair or rehabilitation.
(6) Purchasing of used emergency equipment or used emergency vehicles, provided, however, that the used equipment or vehicles shall meet the National Fire Protection Association's standards.
(7) Except as provided in paragraph (4) of this subsection, loan proceeds shall not be used for operating expenses.
b. The criteria on which the department shall base its determinations on loan applications shall include, but not be limited to, the following: the relative financial need and resources of the applicants, the information included in the application described in subsection d. of this section, and whether the purpose of the loan is consistent with the recommendations included in the National Fire Protection Association's "Fire Protection Handbook" regarding public fire protection, particularly the evaluation and planning of public fire protection, including demographic and geographical factors.
c. Any loan in excess of [$10,000.00] $25,000 shall be for a period of not more than 10 years, and any loan in the amount of [$10,000.00] $25,000 or less shall be for a period of not more than five years. Loans shall be subject to the payment of interest at 2% per annum and shall be subject to security as determined by the department. The total amount of interest earned by the investment or reinvestment of all or any part of the principal of any loan shall be returned to the department and transferred to the Volunteer Emergency Service Organizations Loan Fund, and shall not be credited as payment of principal or interest on the loan. The minimum amount of any loan shall be [$1,000.00] $5,000.
d. Every application for a loan under this act shall be accompanied by a notarized financial statement of the volunteer service organization and a financial plan showing the amount of assets and projected revenues for the repayment of the loan and any other obligations and operating expenses over the period of the loan. Every application shall show the total costs of the item to which the loan will be applied and how they are to be met by the emergency service organization. If a volunteer emergency service organization is unable to meet the 20% requirement of paragraphs (1) and (2) of subsection a., then a political subdivision which is served by the volunteer company may pledge its credit in the amount of funds necessary to satisfy the 20% requirement and, if it does so, shall cosign the application submitted by the volunteer emergency service organization.
e. A volunteer emergency service organization shall be eligible for a loan under this act regardless of legal ownership in whole or part by any political subdivision of any emergency facilities, equipment or vehicles used by the volunteer emergency service organization. Any emergency vehicles, equipment or facilities financed under this act may be transferred to a political subdivision served by the volunteer emergency service organization and shall be subject to security as shall be determined by the department.
(cf: P.L.1987, c.8, s.3)
2. Section 5 of P.L.1987, c.8 (C.52:27D-365) is amended to read as follows:
5. The Commissioner of the Department of Community Affairs shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to:
a. annually review and establish maximum loan amounts necessary to effectuate the purposes of subsection a. of section 3 of P.L.1987, c.8 (C.52:27D-363);
b. further specify the loan criteria in subsection b. of section 3 of [this act and to] P.L.1987, c.8 (C.52:27D-363);
c. request through the annual budget process that any excess fees collected by the Division of Fire Safety, as determined by the commissioner, be allocated to the Volunteer Emergency Service Organizations Loan Fund created in section 4 of P.L.1987, c.8 (C.52:27D-364); and
d. implement the other provisions of [this act] P.L.1987, c.8 (C.52:27D-361 et seq.).
(cf: P.L.1987, c.8. s.5)
3. This act shall take effect immediately.
STATEMENT
This bill provides for the Commissioner of Community Affairs to establish by rule and regulation the maximum loan amounts that can be made to volunteer emergency service organizations under the Volunteer Emergency Service Organizations Loan Fund (VESO) program.
Under the VESO program, the Department of Community Affairs is authorized to make loans to volunteer emergency service organizations to establish or modernize facilities; purchase emergency vehicles and equipment; refinance debt; and repair and rehabilitate existing emergency vehicles or equipment. Current law dating to 1987 specifically sets forth the maximum amount of these loans. For example, the maximum amount the department could loan to an organization to update facilities or buy an emergency vehicle is $50,000. As such costs have substantially increased since 1987, this bill would allow the department to annually review and make appropriate adjustments to the maximum amounts by rule and regulation.
Currently, emergency service organizations have up to 10 years to repay VESO loans over $10,000 and up to five years to repay loans of $10,000 or less. The loan amounts subject to these repayment periods would increase under the bill to over $25,000 and to $25,000 or less, respectively.
The bill also specifies that excess fees collected by the Division of Fire Safety may be allocated to the Volunteer Emergency Service Organizations Loan Fund. The excess fees would be determined by the commissioner.
