N.J. Stat. tit. 52, ch. 31C

in effect

N.J. Stat. § 52:31C-1 Short title.

1. This act shall be known and may be cited as the "Structured Financing Act." L.1999,c.157,s.1.

N.J. Stat. § 52:31C-2 Findings, declarations relative to structured financing transactions.

2. The Legislature finds and declares that: a. In this era of limited sources of State and local revenues coupled with the increasing demands placed on State and local government to fulfill its governmental functions, the need exists to maximize the value of their assets; b. One possible way of maximizing such value is to utilize new and innovative financing structures which take advantage of the existing assets; c. A new and innovative financing structure that has been developed is the structured financing transaction whereby a governmental entity can obtain additional revenues by conveying its interest in its assets to other parties and by so conveying such interests, transfer certain benefits which the State or local government unit enjoys in connection with its assets, which would have value to the other party but of which the State or local government unit cannot take advantage; d. Entry into such structured financing transactions is not intended to interfere with the governmental unit's ownership, occupation or use of its assets, although under the terms of a structured financing transaction, upon the occurrence of certain events, the other party may have the right to exercise certain rights and remedies and to acquire certain interests which may interfere with the governmental unit's ownership, occupation or use of its assets; e. By the State or local government unit entering into such structured financing transactions, the State or local government unit can obtain additional revenues required to carry out its governmental functions without affecting the use by the State or local government unit of its assets for its governmental functions; f. It is in the best interests of the State or local government unit to be able to enter into structured financing transactions. L.1999,c.157,s.2.

N.J. Stat. § 52:31C-3 Definitions relative to structured financing transactions.

3. As used in this act, "Assets" means all property, both real, personal or mixed, tangible or intangible, of any type and all rights, easements, privileges or interests of any kind or description in, relating to, or connected with property, including but not limited to, land, buildings, plants, structures, institutions, water supply facilities, resource recovery facilities, sewage treatment facilities, wastewater treatment facilities, transportation facilities, highways, parking facilities, equipment, motor vehicles, rolling stock, machinery, furniture, leasehold improvements, fixtures, space rights, development rights, and air rights. "Benefits" means benefits, including but not limited to tax benefits, which the State enjoys as a result of its ownership, use or occupancy of its assets of which the State cannot take advantage but which would have value to an investor if those assets were transferred to the investor. "Investor" means a person who enters into a structured financing transaction pursuant to which the investor agrees to pay consideration to the State in return for the transfer to the investor of the State's benefits enjoyed in connection with certain State assets. "Land" means real property, including improvements thereof or thereon, rights-of-way, lands under water, water, riparian and other rights, easements, privileges and all other rights or interest of any kind or description in, relating to or connected with real property. "Net receipt" means the State receipt less the amount deposited into the State payment account. "Payment bank" means a bank, trust company, savings bank, investment company, financial institution or any other person carrying on a banking or financial business which may be selected by the State to hold the State payment account in connection with a structured financing transaction. "State asset" means any asset that the State owns, or leases, operates or otherwise has a property interest therein in conjunction with other State agencies and State authorities. "State receipt" means an amount of money paid to the State by the investor representing the consideration paid by the investor to the State pursuant to a structured financing agreement. "State payment account" means an account to be established with a payment bank by the State and used to pay the State's payment obligations under a structured financing agreement. "State authority" means a public body established by statute as an instrumentality of the State exercising public and essential governmental functions. "State agency" means a department, division, commission, board, bureau or agency of the State. "Structured financing agreement" means an agreement, contract or action taken to authorize, implement and finance a structured financing transaction including, but not limited to, lease and sublease agreements, State payment account agreements, escrow deposit agreements, mortgages, security agreements, pledge agreements, trust agreements, service agreements, letter of credit agreements, operating agreements, financing agreements including credit agreements, line of credit agreements, revolving credit agreements, interest rate exchange agreements, insurance contracts, surety bonds, purchase or sale agreement, or commitments or other contracts or agreements entered into in connection with a structured financing transaction. "Structured financing transaction" means a transaction, or series of transactions, evidenced by one or more structured financing agreements, pursuant to which the State conveys to an investor in return for a State receipt all or a portion of its interest in State assets, including but not limited to the conveyance of the State's property interests in State assets, in order that the investor receives all or a portion of the benefits in the State assets. A structured financing transaction shall not include the conveyance of fee simple title interest to real property, nor entail or permit a change in the operation or name of a State asset. L.1999,c.157,s.3.

N.J. Stat. § 52:31C-4 Authority to enter into structured financing transaction

4. Notwithstanding any other provisions of law to the contrary: a. The State Treasurer is authorized to enter into a structured financing transaction, on such terms, covenants and conditions and at such times as the State Treasurer may determine, to enter into, execute and deliver a structured financing agreement, and to do any act necessary or convenient to carrying out a structured financing transaction; provided that the State Treasurer shall not enter into a structured financing transaction relating to any State assets that are otherwise restricted by law, regulation or contract with respect to the transfer of the State's interest in those assets. A structured financing transaction shall not result in a change in the use or occupancy by the State of the assets that are the subject of a structured financing transaction; provided however, that the structured financing transaction may permit that, upon the occurrence of certain events, the investor may have the right to exercise certain rights and remedies and to acquire certain interests which may interfere with or terminate the State's ownership, occupation or use of the assets. b. No consent or approval of any State agency or State authority, other than the approval as required by subsection a. and subsection c. of this section, shall be required to effectuate a structured financing transaction and to enter into, execute, deliver and perform a structured financing agreement. c. If with respect to assets that are the subject of a structured financing agreement, the participation of a State agency or State authority is required, the State Treasurer shall not enter into that structured financing agreement without the consent of the participating State agency or State authority, as the case may be, and upon such consent if given, such State agency or State authority is hereby authorized, notwithstanding any other law to the contrary, to enter into, execute, deliver and perform a structured financing agreement upon such terms and conditions as such State agency, State authority and the State Treasurer shall determine; and no consent or approval of any other State agency or State authority, except as otherwise required by this section, shall be required to authorize entry into, execution, delivery and performance of a structured financing agreement. Notwithstanding anything to the contrary, the entry into, execution, delivery and performance of a structured financing agreement by the New Jersey Building Authority established pursuant to the "New Jersey Building Authority Act," P.L.1981, c.120 (C.52:18A-78.1 et seq.) shall not constitute a "project" for the purposes of the "New Jersey Building Authority Act." d. The State Treasurer is authorized to select the investors for structured financing transactions through a public bidding procedure. e. The State Treasurer is authorized to engage, in such manner as the State Treasurer may determine, the services of financial advisors and experts, placement agents, underwriters, appraisers, and such other advisors, consultants and agents as may be necessary in the State Treasurer's judgment to assist the State Treasurer in carrying out a structured financing transaction. f. An obligation of the State to make payments pursuant to a structured financing transaction shall not constitute a general obligation of the State or a debt or a liability within the meaning of the State Constitution. An obligation of the State to make payments pursuant to a structured financing agreement shall be subject to and dependent upon appropriations being made by the Legislature for the purposes of this act. The net receipt made in connection with a structured financing transaction and received by the State Treasurer shall be deposited in the General Fund of the State. g. A structured financing agreement may, upon the determination of the State Treasurer, provide that an entity taking part in a structured financing transaction shall be immune from liability in the same manner and to the same extent as is the State under the provisions of the "New Jersey Tort Claims Act," N.J.S.59:1-1 et seq., and the "New Jersey Contractual Liability Act," N.J.S.59:13-1 et seq. h. A structured financing agreement may provide that an entity taking part in a structured financing transaction, and the officers, directors and employees of that entity, shall have a right of indemnification from the State or the State agency or State authority with which the agreement is made for any claim or judgment arising out of assets that are the subject of the structured financing agreement, except that the State, State agency or State authority, as appropriate, shall not indemnify or agree to indemnify such an entity, officer, director or employee for any act or omission to act that constitutes gross negligence, actual malice, actual fraud, willful misconduct or a crime, or that relates to any financial decisions made by the entity and its officers, directors and employees in connection with the structured financing transaction. The State or State agency or State authority may agree to indemnify any entity taking part in a structured financing transaction, and the officers, directors and employees of that entity, for punitive damages for a violation of civil law if such damages do not arise from actions that constitute gross negligence, actual malice, actual fraud or willful misconduct. The State Treasurer may set forth a provision for indemnity under this subsection in the structured financing agreement upon such terms and conditions as the State Treasurer shall determine. L.1999,c.157,s.4; amended 2003, c.106, s.1.

N.J. Stat. § 52:31C-5 Establishment of State payment account for structured financing transaction.

5. a. The State Treasurer may establish a State payment account for a structured financing transaction. If the State Treasurer determines that a State payment account should be established, the State Treasurer is authorized to: (1) Select the payment bank in such manner as the State Treasurer may determine to be appropriate; (2) Direct the deposit of moneys to the payment bank to fund the State payment account; and (3) Take any actions necessary or convenient in connection with the establishment of the State payment account. b. There are appropriated such moneys as are required to be deposited in a State payment account for the purposes specified in the related structured financing agreement. L.1999,c.157,s.5.

N.J. Stat. § 52:31C-6 Reports, JBOC approval.

6. a. Prior to entering into a structured financing transaction, the State Treasurer shall transmit to the Joint Budget Oversight Committee, or its successor, a preliminary report that a decision to enter a structured financing transaction has been made, reciting the basis on which the decision was made, including an estimate of the State receipt and net receipt related to the transaction upon which the State Treasurer relied when making the decision to enter into a structured financing transaction. b. The Joint Budget Oversight Committee, or its successor, shall have authority to approve or disapprove of the structured financing transaction as included in each preliminary report submitted in accordance with subsection a. of this section. The committee shall approve or disapprove the transaction within 10 business days after physical receipt of the report. The committee shall notify the State Treasurer in writing of the approval or disapproval as expeditiously as possible. c. No structured financing transaction shall be entered into unless the preliminary report has been submitted to and approved by the Joint Budget Oversight Committee, or its successor, as set forth in subsection b. of this section. d. The State Treasurer shall, within 60 days after completing a structured financing agreement, submit a final report prepared pursuant to this section to the Joint Budget Oversight Committee and a copy of the final report to the Director of the Division of Budget and Accounting in the Department of the Treasury. e. A final report for a structured financing agreement shall include a detailed explanation of the terms of the structured financing agreement including, but not limited to, the investor's obligations, the State assets, the amount of the State receipt, transaction charges and service agreements entered into as part of the structured financing transaction and the names of the parties to those agreements and those persons providing the services of counsel, financial advisors, payment bank, rating agencies, trustee, credit enhancement, liquidity facility; and the fees charged for those services. L.1999,c.157,s.6.

N.J. Stat. § 52:31C-7 Construction of act as to State obligations.

7. Nothing in this act shall be deemed or construed as to limit, alter or impair in any way the rights and obligations of the State, a State agency or a State authority under the provisions of contracts made with the holders from time to time of bonds, notes and other obligations heretofore or hereafter issued by the State, a State agency or a State authority with respect to assets that are the subject of a structured financing transaction. L.1999,c.157,s.7.

N.J. Stat. § 52:31C-8 Immunity from personal liability.

8. No State Treasurer or any officer, director or employee of any State agency or State authority executing a structured financing agreement pursuant to this act shall be personally liable for any debt, obligation or other liability of the State, State agency, or State authority incurred by or on behalf of the State, State agency or State authority arising from a structured financing agreement. L.1999,c.157,s.8.

N.J. Stat. § 52:31C-9 Powers constitute performance of essential governmental function; tax exemption.

9. The exercise of the powers granted by this act shall constitute the performance of an essential governmental function and no person shall be required to pay taxes or assessments upon or in respect of a State asset. The entry into, filing, and performance of a structured financing transaction and a structured financing agreement shall be free from taxation by any unit of local government including, without limitation, taxation imposed upon the filing of a structured financing agreement. No person shall be deemed to be doing business, or employing or owning capital or property in this State, for purposes of P.L.1945, c.162 (C.54:10A-1 et seq.), by reason of the entry into and performance of a structured financing agreement. L.1999,c.157,s.9.

N.J. Stat. § 52:31C-10 Procedures for undertaking structured financing agreements by public agencies other than the State

10. Notwithstanding any law to the contrary, the State Treasurer shall establish procedures under which a county or municipal governing board, a board of education, a sewerage authority created pursuant to the "sewerage authorities law," P.L.1946, c.138 (C.40:14A-1 et seq.), a utilities authority created pursuant to the "municipal and county utilities authorities law," P.L.1957, c.183 (C.40:14B-1 et seq.), or the Passaic Valley Sewerage Commissioners, continued pursuant to R.S.58:14-2 may undertake structured financing agreements involving local assets in a manner similar to that provided for State assets, including procedures for the incorporation in such agreements of provisions that accord entities participating in structured financing transactions such rights of immunity and indemnification as the State Treasurer, under subsections g. and h. of section 4 of P.L.1999, c.157 (C.52:31C-4), may deem appropriate to be established for entities participating in a structured financing transaction with the State. L.1999,c.157,s.10; amended 2000, c.54; 2003, c.106, s.2.

N.J. Stat. § 52:31C-11 Structured Financing Act to supplement, supersede other laws.

11. This act shall be deemed to provide an additional, alternative and complete method for the doing of the things authorized hereby and shall be deemed and construed to be supplemental and additional to any powers conferred by other laws on public entities and not in derogation of any such powers now existing, provided that, it is the intent of the Legislature that in the event of any conflict or inconsistency in this act and any other law, general, special, or local now in existence or hereafter (unless with specific reference to this act) adopted, pertaining to matters herein established or provided, to the extent of the conflict or inconsistency, the provisions of this act shall be enforced and the provisions of the other acts shall be of no effect. L.1999,c.157,s.11.

N.J. Stat. § 52:31C-12 Severability.

12. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid, the judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, section or part thereof directly involved in the controversy in which the judgment shall have been rendered. L.1999,c.157,s.12.

N.J. Stat. § 52:31C-13 Liberal construction.

13. This act shall be construed liberally to effectuate the legislative intent and the purposes of this act as complete and independent authority for the performance of each and every act and thing herein authorized and all powers herein granted shall be broadly interpreted to effectuate such intent and purposes and not as a limitation of powers. L.1999,c.157,s.13.

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