N.J. Admin. Code § 6A:26-10.6

Current through Register Vol. 56, No. 17, September 3, 2024

Section 6A:26-10.6 - Approval procedures to refinance a lease-purchase agreement

(a) A district board of education proposing to refinance a lease-purchase agreement entered into at any time, including lease-purchase agreements in excess of five years, shall adopt a resolution requesting the Division's approval of the transaction.

(b) A district board of education requesting approval to refinance a lease-purchase agreement shall submit to the Division on a Commissioner-prescribed form an application for refinancing. A district board of education shall also file with the Division the following documents:

1. A copy of the district board of education resolution requesting approval of the refinancing and the board's vote;

2. An opinion of counsel stating that the refinancing is permitted under the original or modified lease-purchase agreement and is in conformance with local, Federal, and State statutes;

3. The list of persons and/or firms the district board of education contacted concerning the refinancing, the one selected and the specific reasons for the selection;

4. A copy of the amended rent payment schedule;

5. A schedule of sources and uses of the lease-purchase agreement refinancing proceeds;

6. An analysis of the escrow account under the proposed refinancing;

7. A copy of the documents in final draft form with amendments and modifications to the lease-purchase, ground lease, trustee or agent, and assignment agreements, if necessary, that effect the refinancing;

8. A copy of the updated insurance or other credit-enhancement commitment, modified to cover refinancing, if applicable;

9. Proposed credit ratings on the issue and credit-rating agencies; and

10. A detailed analysis of the percentage of net present value cost savings to the school district of at least three percent using the effective interest cost method as the discount rate based on an analysis of the total refunding issue that includes the following for each payment:

i. Date;

ii. Prior debt service;

iii. New debt service;

iv. Savings (prior debt service minus new debt service);

v. Present value factor;

vi. Present value savings (savings times present value factor);

vii. Cumulative present value savings; and

viii. Totals of items in (b)10ii through vii above.

(c) After the receipt of the refinancing application on a Commissioner-prescribed form and related documents, the Division shall endorse the application if satisfied that the refinancing is in the school district's best interest.

N.J. Admin. Code § 6A:26-10.6

Amended by R.2007 d.81, effective 3/19/2007.
See: 38 N.J.R. 4533(a), 39 N.J.R. 899(a).
In (b)10 and (c), inserted "school" preceding "district".
Amended by R.2013 d.145, effective 12/16/2013.
See: 45 N.J.R. 1026(a), 45 N.J.R. 2557(a).
Section was "Approval procedures to refinance a lease purchase agreement". In (a), (b)2, (b)5, and (b)7, substituted "lease-purchase" for "lease purchase"; in (a), substituted "Division's approval of the" for "approval of the Division for the"; rewrote the introductory paragraph of (b) and (c); in (b)1, substituted "district board of education" for "board", in (b)2, inserted a comma following "Federal"; in (b)7, deleted ", if necessary," following "modifications", inserted a comma following "agent", and substituted "if necessary, that" for "in order to"; in (b)8, substituted "credit-enhancement" for "credit enhancement"; in (b)9, deleted a comma following "issue", and substituted "credit-rating" for "credit rating"; and in the introductory paragraph of (b)10, substituted "that includes" for "to include".