Rutgers Law

New Jersey Statutes, Title: 40A, MUNICIPALITIES AND COUNTIES

    Chapter 12a:

      Section: 40A:12a-37: Municipality, county may incur indebtedness to aid housing authority, redevelopment entity

           37. a. Any municipality or county may incur indebtedness, borrow, appropriate and expend money and issue its negotiable bonds or other obligations for the purpose of aiding any housing authority with respect to any housing project which is located within its jurisdiction and as to which the State or federal government shall have contracted to furnish financial assistance.

b. Any municipality or county may incur indebtedness, borrow, appropriate and expend money and issue its negotiable bonds or other obligations for the purpose of aiding any redevelopment entity with respect to any redevelopment project which is located within its jurisdiction.

c. The bonds or other obligations of any municipality or county issued pursuant to this section shall be authorized by ordinance adopted pursuant to the "Local Bond Law" (N.J.S.40A:2-1 et seq.), except that: (1) the ordinance may be adopted notwithstanding the provisions of N.J.S.40A:2-6 and, subject to the provisions of subsection e. of this section, bonds or other obligations may be authorized and issued notwithstanding any debt or other limit prescribed by that law; (2) the ordinance may be adopted notwithstanding the provisions of N.J.S.40A:2-11 and no down payment will be required; (3) the bonds or other obligations shall mature in annual installments commencing not more than two and ending not more than 40 years from the date of issuance; and (4) the ordinance need set forth only a brief and general description of the location and designation of the housing or redevelopment project with respect to which the bonds or other obligations are authorized, the amount of the appropriation made thereby, the maximum amount of bonds or other obligations to be issued pursuant thereto, and the rate or maximum rate of interest the bonds or obligations shall bear. The bonds or other obligations may be subject to redemption prior to maturity, with or without premium, at such times and on such terms and conditions as may be provided by resolution of the governing body adopted prior to their issuance, and all matters relating to the bonds or obligations and those matters required to be stated in the ordinance may be performed or determined by resolution or resolutions of the governing body adopted prior to their issuance.

d. Any bonds or other obligations, issued or authorized pursuant to subsection b. of this section by a municipality or county for the purpose of providing cash to meet cash grant-in-aid requirements of a redevelopment entity or of a municipality exercising directly the powers conferred by this act with respect to a redevelopment project located within that municipality, and as to which the federal government shall have contracted to furnish financial assistance, shall be deductible from the gross debt of the municipality or county on any debt statement filed in accordance with the "Local Bond Law" (N.J.S.40A:2-1 et seq.). Any bonds or other obligations issued or authorized pursuant to subsection b. of this section by any municipality for the purpose of providing funds to enable any housing authority, redevelopment entity or municipality exercising directly the powers conferred by this act to extend credit or make loans to redevelopers pursuant to section 8 of P.L.1992, c.79 (C.40A:12A-8) shall be deductible from the gross debt of the municipality for a period from the date of adoption of the ordinance until one year after the completion of construction or rehabilitation of the project or until the end of the fifth fiscal year commencing subsequent to the date of adoption of the ordinance, whichever period is shorter. The municipality shall file with the Local Finance Board a certified copy of the ordinance as introduced, and a request that the board determine by resolution on the basis of a project report whether the project will generate revenues annually for the municipality from rental payments, loan repayments, real property taxes, including payments in lieu of taxes, income from the investment or proceeds of obligations authorized by the ordinance and other sources, direct or indirect, including like revenues generated from related projects, that the Local Finance Board finds justifiable in its discretion, in an amount equal to or exceeding the annual debt service requirement for the obligations for that fiscal year, or in the subsequent fiscal year if the municipality is not required to make payments of principal of or interest on obligations issued for that purpose in a particular fiscal year. If the board determines affirmatively, it shall endorse its approval on the certified copy of the ordinance. If, within 60 days of the request and filing, the board determines negatively as to the matters described above, it shall disapprove the ordinance, endorse that disapproval on the certified copy and deliver to the municipality a statement of its reasons therefor.

e. If it appears from the supplemental debt statement filed pursuant to N.J.S.40A:2-10 with respect to an ordinance adopted pursuant to this act, which relates to a housing project, or a redevelopment project the bonds or other obligations for which are not deductible from the gross debt pursuant to subsection d. of this section, that the percentage of net debt as stated therein exceeds the limit prescribed by N.J.S.40A:2-6, the ordinance shall not take effect unless there shall be endorsed upon a certified copy thereof, as adopted, the approval of the Local Finance Board of the Division of Local Government Services in the Department of Community Affairs. A certified copy of that ordinance shall, upon introduction, be filed with the Local Finance Board together with such statements and information with respect thereto and regarding the financial condition of the municipality as the board may prescribe. The board shall cause its approval to be endorsed upon the certified copy if it shall be satisfied, and shall record upon its minutes its estimates that: (1) the amounts to be expended by the municipality or county for such project are not unreasonable or exorbitant; (2) issuance of the bonds or obligations will not materially impair the credit of the municipality or county or substantially reduce its ability during the ensuing 10 years to pay punctually the principal and interest of its debts and supply essential public improvements and services; and, (3) taking into consideration trends in population and in values and uses of the property and in needs for essential public improvements, the percentage of net debt of the municipality or county, computed as provided in the "Local Bond Law" (N.J.S.40A:2-1 et seq.), will at some date within 10 years be either less than the debt limit prescribed by that law or less than the percentage appearing from the supplemental debt statement. If the Local Finance Board within 60 days after the filing of the certified copy shall not be satisfied as to the matters described above, it shall disapprove the ordinance, endorse that disapproval on the certified copy and deliver to the municipality or county a statement of its reasons therefor.

f. Any municipality or county may issue its negotiable notes, at public or private sale, in anticipation of the issuance of bonds authorized by it pursuant to this section after the ordinance has taken effect and may, from time to time, renew those notes in accordance with the provisions of the "Local Bond Law" (N.J.S.40:2-1 et seq.).

g. All bonds and notes issued pursuant to this section shall be direct obligations of the municipality or county issuing them and, unless payment is otherwise made or provided for, a tax sufficient in an amount to pay the principal and interest on such bonds and notes shall be levied and collected by the municipality or county in the year in which the same shall become due and payable. The bonds and notes may contain a recital that they are issued pursuant to this act in the manner or mode of procedure prescribed by law, and those recitals shall be conclusive evidence of their validity and of the regularity of their issuance.

h. The powers conferred by this section shall be in addition to the powers conferred by any other law, and bonds or other obligations may be issued hereunder for the purposes herein provided, notwithstanding that other law may provide for the issuance of bonds or obligations for like purposes.

i. The Local Finance Board shall, by regulation, provide for the budgetary treatment of moneys borrowed by a county or municipality on behalf of a redevelopment entity or housing authority, stating those provisions of chapter 4 of Title 40A of the New Jersey Statutes which are or are not to apply.

L.1992,c.79,s.37.



This section added to the Rutgers Database: 2012-09-26 13:37:53.

Older versions of 40a:12a-37 (if available):

Court decisions that cite this statute: CLICK HERE.