Requires DEP and New Jersey Infrastructure Bank to provide priority for principal forgiveness on environmental infrastructure project loans to municipalities in coastal areas.

A1845

ASSEMBLY, No. 1845

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman GREGORY E. MYHRE

District 9 (Ocean)

Assemblyman BRIAN E. RUMPF

District 9 (Ocean)

Co-Sponsored by:

Assemblymen Scharfenberger, Kanitra, Clifton, Sauickie,
Assemblywoman Fantasia, Assemblymen Inganamort, Guardian, Assemblywoman Flynn,
Assemblymen Auth, S.Kean and McGuckin

SYNOPSIS

���� Requires DEP and New Jersey Infrastructure Bank to
provide priority for principal forgiveness on environmental infrastructure
project loans to municipalities in coastal areas.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
concerning the financing of environmental
infrastructure projects in coastal areas and amending P.L.1985, c.334.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 9 of P.L.1985,
c.334 (C.58:11B-9) is amended to read as follows:

���� 9. a. (1) The trust may make
and contract to make loans to local government units, or to a local government
unit on behalf of another local government unit, in accordance with and subject
to the provisions of P.L.1985, c.334 (C.58:11B-1 et seq.) or P.L.1997, c.224
(C.58:11B-10.1 et al.) to finance the cost of any wastewater treatment system
project or water supply project, which the local government unit may lawfully
undertake or acquire and for which the local government unit is authorized by
law to borrow money.

���� (2) The trust may make and
contract to make loans to public water utilities, or to any other person or
local government unit on behalf of a public water utility, in accordance with
and subject to the provisions of P.L.1985, c.334 (C.58:11B-1 et seq.) or P.L.1997,
c.224 (C.58:11B-10.1 et al.) to finance the cost of any water supply project,
which the public water utility may lawfully undertake or acquire.

���� (3) The trust may make and
contract to make loans to private persons other than local government units, or
to any other person or local government unit on behalf of a private person, in
accordance with and subject to the provisions of P.L.1985, c.334 (C.58:11B-1 et
seq.) or P.L.1997, c.224 (C.58:11B-10.1 et al.) to finance the cost of
stormwater management systems.

���� (4) The trust may make and
contract to make loans and provide other assistance to a local government unit
or consortia thereof to finance the cost of transportation projects, aviation
projects, and marine projects pursuant to sections 22 and 34 through 38 of
P.L.2016, c.56 (C.58:11B-10.3 through C.58:11B-10.5, C.58:11B-20.2,
C.58:11B-22.3, and C.58:11B-22.4), and provided that the federally-funded
transportation subaccount is operated in accordance with the provisions of the
federal infrastructure bank program.

���� The loans may be made subject
to those terms and conditions as the trust shall determine to be consistent
with the purposes thereof. Each loan by the trust and the terms and conditions
thereof shall be subject to approval by the State Treasurer, and the trust
shall make available to the State Treasurer all information, statistical data
and reports of independent consultants or experts as the State Treasurer shall
deem necessary in order to evaluate the loan. Each loan to a local government
unit, public water utility or any other person shall be evidenced by notes,
bonds or other obligations thereof issued to the trust.� In the case of each
local government unit, notes and bonds to be issued to the trust and, if
applicable, the State, acting by and through the Department of Environmental
Protection, by the local government unit (1) shall be authorized and issued as
provided by law for the issuance of notes and bonds by the local government
unit, (2) notwithstanding any provisions of the "Local Authorities Fiscal
Control Law," P.L.1983, c.313 (C.40A:5A-1 et seq.) to the contrary, shall
be approved by the Director of the Division of Local Government Services in the
Department of Community Affairs, and (3) notwithstanding the provisions of
N.J.S.40A:2-27, N.J.S.40A:2-28 and N.J.S.40A:2-29 or any other provisions of
law to the contrary, may be sold at private sale to the trust or the State, as
the case may be, at any price, whether or not less than par value, and shall be
subject to redemption prior to maturity at any times and at any prices as the
trust or the State, as the case may be, and local government units may agree.
Each loan to a local government unit, public water utility or any other person
and the notes, bonds or other obligations thereby issued shall bear interest at
a rate or rates per annum as the trust or the State, as the case may be, and
the local government unit, public water utility or any other person, as the
case may be, may agree.

���� b.��� The trust is authorized
to guarantee or contract to guarantee the payment of all or any portion of the
principal and interest on bonds, notes or other obligations issued by a local
government unit, public water utility, or other person, to finance, as applicable,
the cost of any wastewater treatment system project, water supply project,
transportation project, aviation project, or marine project, or redevelopment
project that includes, as a portion thereof, any wastewater treatment system
project, water supply project, transportation project, aviation project, marine
project, or hazard mitigation and resilience project as defined in section 2 of
P.L.2023, c.63 (C.58:11B-20.4), which the local government unit, public water
utility, or other person may lawfully undertake or acquire and for which the
local government unit is authorized by law to borrow money, and the guarantee
shall constitute an obligation of the trust, and shall be in furtherance of the
corporate purposes of the trust, for the purposes of P.L.1985, c.334
(C.58:11B-1 et seq.), P.L.1997, c.224 (C.58:11B-10.1 et al.), or sections 22
and 34 through 38 of P.L.2016, c.56 (C.58:11B-10.3 through C.58:11B-10.5,
C.58:11B-20.2, C.58:11B-22.3, and C.58:11B-22.4).� Each guarantee by the trust
and the terms and conditions thereof shall be subject to approval by the State
Treasurer, and the trust shall make available to the State Treasurer all
information, statistical data and reports of independent consultants or experts
as the State Treasurer shall deem necessary in order to evaluate the guarantee.

���� c.���� The trust shall not
make or contract to make any loans or guarantees to local government units,
public water utilities or any other person, or otherwise incur any additional
indebtedness, on or after June 30, 2053.

���� d.��� Notwithstanding any
provision of P.L.1985, c.334 (C.58:11B-1 et seq.) or P.L.1997, c.224
(C.58:11B-10.1 et al.) to the contrary, the trust may receive funds from any
source including, without limitation, any funds drawn by the trust from a
revolving line of credit or other similar financial vehicle that may be
procured by the trust, either through a competitive or negotiated process,
pursuant to section 5 of P.L.1985, c.334 (C.58:11B-5), for deposit into the
Interim Environmental Financing Program Fund or the trust may issue its bonds,
notes or other obligations, including commercial paper issued through a
competitive or negotiated process, in any principal amounts, in either case, as
in the judgment of the trust shall be necessary to provide sufficient funds to
finance or refinance short-term or temporary loans to local government units,
public water utilities or private persons for any wastewater treatment system
projects included on the Department of Environmental Protection project
priority list and eligible for approval pursuant to section 20 of P.L.1985,
c.334 (C.58:11B-20) or water supply projects included on the Department of
Environmental Protection project priority list and eligible for approval
pursuant to section 24 of P.L.1997, c.224 (C.58:11B-20.1), as applicable,
without regard to any other provisions of P.L.1985, c.334 (C.58:11B-1 et seq.)
or P.L.1997, c.224 (C.58:11B-10.1 et al.), including, without limitation, any
administrative or legislative approvals.

���� The trust shall create and
establish a special fund to be known as the "Interim Environmental
Financing Program Fund" for the short-term or temporary loan financing or
refinancing program to be known as the "Interim Environmental Financing
Program."� The monies in the fund shall be used for short-term or
temporary loans for clean water and drinking water projects pursuant to the New
Jersey Environmental Infrastructure Financing Program.

���� Except as provided in section
1 of P.L.2013, c.93 (C.58:11B-9.5), any short-term or temporary loans made by
the trust pursuant to this subsection may only be made in advance of the
anticipated loans the trust may make and contract to make under the provisions
of subsection a. of this section from any source of funds anticipated to be
received by the trust.� Any such short-term or temporary loan made pursuant to
the Interim Environmental Financing Program shall mature no later than the last
day of the third succeeding fiscal year following the closing date on which the
short-term or temporary loan was made by the trust to the project sponsor;
except a planning, design, and construction loan shall mature no later than the
last day of the fifth succeeding fiscal year following the closing date of the
planning, design, and construction loan or the last day of the third succeeding
fiscal year following the date of construction certification following the
closing date of the planning, design, and construction loan, whichever is
sooner, provided that, in either case, project planning or engineering design
activities shall not exceed two years from the closing date of the planning,
design, and construction loan; and except a short-term or temporary loan made
pursuant to this subsection for environmental planning and engineering design
costs associated with long-term control plans for combined sewer overflow
projects shall mature no later than the last day of the 10th succeeding fiscal
year following the closing date on which the short-term or temporary loan was
made by the trust to the project sponsor; and except a short-term or temporary
loan made pursuant to this subsection which has been submitted as part of an
application for funding pursuant to the "Water Infrastructure Finance and
Innovation Act of 2014" (WIFIA), 33 U.S.C. s.3901 et seq., as amended and
supplemented, shall mature not later than the funding draw period allowed by
this federal act.� Any short-term or temporary loan or planning, design and
construction loan made by the trust pursuant to this subsection may mature in a
shorter period of time as may be necessary to align with construction
completion.� With respect to any short-term or temporary loan or planning,
design, and construction loan made by the trust pursuant to this subsection,
the trust may authorize one short-term supplemental loan for residual project
expenses thereof upon receipt by the trust from the Department of Environmental
Protection of a certification that states that the time required by the project
sponsor to complete construction of the project exceeds the maximum maturity
date of the project sponsor's outstanding short-term or temporary loan or
planning, design, and construction loan.� Any such short-term supplemental loan
shall not exceed in duration the last day of the third succeeding fiscal year
following the loan closing of the supplemental loan.� The trust may make
short-term or temporary loans pursuant to the Interim Environmental Financing
Program to any one or more of the project sponsors, for the respective projects
thereof, identified in the interim financing project priority list to be known
as the "Interim Environmental Financing Program Project Priority
List" in the form provided to the Legislature by the Commissioner of
Environmental Protection.

���� The Interim Environmental
Financing Program Project Priority List, including any revision thereof or
supplement thereto, shall be submitted to the Legislature pursuant to section 2
of P.L.1991, c.164 (C.52:14-19.1) at least once in each fiscal year as provided
in section 20 of P.L.1985, c.334 (C.58:11B-20) and section 24 of P.L.1997,
c.224 (C.58:11B-20.1).� The Secretary and the Clerk shall cause the date of
submission to be entered upon the Senate Journal and the Minutes of the General
Assembly, respectively. The trust may revise or supplement the Interim
Environmental Financing Program Project Priority List no more than four times
during the fiscal year and shall submit the revised list to the Legislature
when the revisions are made.� Any environmental infrastructure project or the
project sponsor thereof not identified in the Interim Environmental Financing
Program Project Priority List shall not be eligible for a short-term or
temporary loan from the Interim Environmental Financing Program Fund.� The trust
may issue short-term or temporary loans pursuant to this subsection only if a
project is listed on an Interim Environmental Financing Program Project
Priority List that has been submitted to the Legislature.� No funds may be
disbursed pursuant to this section for environmental infrastructure project
activities prior to a determination and certification, in writing, from the
Department of Environmental Protection, that the project activities satisfy the
provisions of P.L.1985, c.334 (C.58:11B-1 et seq.).

���� e.���� Notwithstanding any
provisions of the "Local Bond Law" (N.J.S.40A:2-1 et seq.), the
"sewerage authorities law," P.L.1946, c.138 (C.40:14A-1 et seq.), or
the "municipal and county utilities authorities law," P.L.1957, c.183
(C.40:14B-1 et seq.) to the contrary, short-term or temporary loans made by the
trust pursuant to section 9 of P.L.1985, c.334 (C.58:11B-9) or section 1 of
P.L.2013, c.93 (C.58:11B-9.5), and the obligations issued by project sponsors
to evidence such loans, may, at the discretion of the trust and upon
application by the project sponsor, bear interest at a variable rate determined
pursuant to a methodology as may be established by the trust from time to time.

���� Further, notwithstanding any
provisions of the "Local Bond Law" (N.J.S.40A:2-1 et seq.), the
"sewerage authorities law," P.L.1946, c.138 (C.40:14A-1 et seq.), or
the "municipal and county utilities authorities law," P.L.1957, c.183
(C.40:14B-1 et seq.) to the contrary, any short-term or temporary loans made by
the trust pursuant to section 9 of P.L.1985, c.334 (C.58:11B-9) or section 1 of
P.L.2013, c.93 (C.58:11B-9.5), and any notes or other obligations issued by
project sponsors to evidence such short-term or temporary loans, as such loans,
notes, or other obligations may be refinanced or extended, as provided in
subsections d. and g. of this section and section 1 of P.L.2013, c.93
(C.58:11B-9.5), except for loans for environmental planning and engineering
design costs associated with long-term control plans for combined sewer
overflow projects as provided in subsection d. of this section, shall mature no
later than the maturity date as established pursuant to subsections d. and g.
of this section and section 1 of P.L.2013, c.93 (C.58:11B-9.5), without payment
by project sponsors of any portion of the principal thereof prior to maturity.

���� f.���� Any balances remaining
in the Emergency Loan Fund established pursuant to section 4 of P.L.2007, c.138
(C.58:11B-9.1), the Planning and Design Fund established pursuant to section 1
of P.L.2009, c.59 (C.58:11B-9.2), the Onsite Wastewater Disposal Loan Fund
established pursuant to section 5 of P.L.2009, c.103 (C.58:11B-9.3), the
Supplemental Loan Fund established pursuant to section 2 of P.L.2011, c.94
(C.58:11B-9.4), and the Equipment Loan Fund established pursuant to section 1
of P.L.2014, c.28 (C.58:11B-9.6) after the date of enactment of P.L.2016, c.30
shall be transferred to the Interim Environmental Financing Program Fund, and
any loan repayments to the trust of principal and interest or premium on loans
made from those funds shall be credited to the Interim Environmental Financing
Program Fund.

���� g.��� The trust shall create
and establish a special fund to be known as the "Interim Transportation
Financing Program Fund" for the short-term or temporary loan financing or
refinancing program to be known as the "Interim Transportation Financing
Program."

���� Notwithstanding any provision
of P.L.1985, c.334 (C.58:11B-1 et seq.) or P.L.1997, c.224 (C.58:11B-10.1 et
al.) to the contrary, the trust may receive funds from any source including,
without limitation, any funds drawn by the trust from a revolving line of
credit or other similar financial vehicle that may be procured by the trust,
either through a competitive or negotiated process, pursuant to section 5 of
P.L.1985, c.334 (C.58:11B-5), for deposit into the Interim Transportation
Financing Program Fund or the trust may issue its bonds, notes or other
obligations in any principal amounts, in either case, as in the judgment of the
trust shall be necessary to provide sufficient funds to finance or refinance
short-term or temporary loans to local government units or private persons for
any transportation project, aviation project, or marine project included on the
Department of Transportation Interim Transportation Financing Program Project
Priority List for the ensuing fiscal year and eligible for approval pursuant to
sections 22 and 34 through 38 of P.L.2016, c.56 (C.58:11B-10.3 through
C.58:11B-10.5, C.58:11B-20.2, C.58:11B-22.3, and C.58:11B-22.4), without regard
to any other provisions of P.L.1985, c.334 (C.58:11B-1 et seq.), P.L.1997,
c.224 (C.58:11B-10.1 et al.), or sections 22 and 34 through 38 of P.L.2016,
c.56 (C.58:11B-10.3 through C.58:11B-10.5, C.58:11B-20.2, C.58:11B-22.3, and
C.58:11B-22.4), including, without limitation, any administrative or
legislative approvals.

���� Any short-term or temporary
loans made by the trust pursuant to this subsection may only be made in advance
of the anticipated loans the trust may make and contract to make under the
provisions of subsection a. of this section from any source of funds anticipated
to be received by the trust.� Any such short-term or temporary loan made
pursuant to the Interim Transportation Financing Program shall mature no later
than the last day of the third succeeding fiscal year following the closing
date on which the short-term or temporary loan was made by the trust to the
project sponsor; except a planning, design, and construction loan shall mature
no later than the last day of the fifth succeeding fiscal year following the
closing date of the planning, design, and construction loan or the last day of
the third succeeding fiscal year following the date of construction
certification following the closing date of the planning, design, and
construction loan, and except a short-term or temporary loan made pursuant to this
subsection which has been submitted as part of an application for funding
pursuant to the "Transportation Infrastructure Finance and Innovation Act
of 1998" (TIFIA), 23 U.S.C. s.601 et seq., as amended and supplemented,
shall mature not later than the funding draw period allowed by this federal
act.� Any short-term or temporary loan or planning, design and construction
loan made by the trust pursuant to this subsection may mature in a shorter
period of time as may be necessary to align with construction completion,
whichever is sooner, provided that, in either case, project planning or
engineering design activities shall not exceed two years from the closing date
of the planning, design, and construction loan.� With respect to any short-term
or temporary loan or planning, design, and construction loan made by the trust
pursuant to this subsection, the trust may authorize one short-term
supplemental loan for residual expenses thereof upon receipt by the trust from
the Department of Transportation of a certification that states that the time
required by the project sponsor to complete construction of the project exceeds
the maximum maturity date of the short-term or temporary loan or planning,
design, and construction loan.� Any such short-term supplemental loan shall not
exceed in duration the last day of the third succeeding fiscal year following
the loan closing of the short-term supplemental loan.� The trust may make
short-term or temporary loans pursuant to the Interim Transportation Financing
Program to any one or more of the project sponsors, for the respective projects
thereof, only if a project is identified in the Department of Transportation
Interim Transportation Financing Program Project Priority List to be known as
the "Interim Transportation Financing Program Project Priority List"
in the form provided to the Legislature by the Commissioner of Transportation.

���� The Interim Transportation
Financing Program Project Priority List, including any revision thereof or
supplement thereto, shall be submitted to the Secretary of the Senate and the
Clerk of the General Assembly on or before July 1 of each year.� The Interim
Transportation Financing Program Project Priority List shall be submitted to
the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1) at
least once in each fiscal year.� The Secretary and the Clerk shall cause the
date of submission to be entered upon the Senate Journal and the Minutes of the
General Assembly, respectively. Any transportation infrastructure project or
the project sponsor thereof not identified in the Interim Transportation
Financing Program Project Priority List shall not be eligible for a short-term
or temporary loan from the Interim Transportation Financing Program Fund.� The
trust may revise or supplement the Interim Transportation Financing Program
Project Priority List no more than four times during the fiscal year, and shall
submit the revised list to the Legislature when the revisions are made.

���� No funds may be disbursed
pursuant to this subsection for transportation project, aviation project, or
marine project activities prior to certification in writing, from the trust,
that the project activities satisfy the provisions of P.L.1985, c.334 (C.58:11B-1
et seq.), P.L.1997, c.224 (C.58:11B-10.1 et al.), or sections 22 and 34 through
38 of P.L.2016, c.56 (C.58:11B-10.3 through C.58:11B-10.5, C.58:11B-20.2,
C.58:11B-22.3, and C.58:11B-22.4).� Construction activities for a
transportation project shall also require written notification of award
concurrence from the Department of Transportation prior to fund disbursement.

����
h.� The Department of
Environmental Protection and the trust shall provide that priority for
principal forgiveness shall be given to municipalities in coastal areas, for
loans issued pursuant to this section in support of environmental
infrastructure projects.� As used in this subsection, "coastal area"
means the same as the term is defined in section 4 of P.L.1973, c.185
(C.13:19-4).

(cf: P.L.2023, c.63, s.14)

���� 2. This act shall take effect
immediately.

STATEMENT

���� This bill requires the
Department of Environmental Protection (DEP) and the New Jersey Infrastructure
Bank (I-Bank) to provide priority for principal forgiveness on environmental
infrastructure project loans to municipalities in coastal areas.� The DEP and
the I-Bank finance the State's Water Bank program, which provides financing, in
the form of low-interest loans, often with a certain amount of principal
forgiveness, in support of wastewater and drinking water projects throughout
the State.