N.J. Admin. Code § 6A:26-3.15

Current through Register Vol. 56, No. 12, June 17, 2024

Section 6A:26-3.15 - Insurance, damages awards, gifts, grants, other private sources of funds, and municipal surplus

(a) School districts shall insure all insurable property, real or personal, in accordance with 18A:20-25.

(b) Insurance proceeds and damages awards received by a school district shall be applied as follows: if the school district applies for approval of a school facilities project involving a facility for which there are insurance proceeds or a damages award, the insurance proceeds and/or damages award shall be applied to reduce the amount of State support as follows:

1. For locally constructed school facilities projects for which a school district elects to receive a State share pursuant to 18A:7G-15, the State share amount shall be reduced in the following manner:

i. Calculate the percentage of total project costs that would be funded by the State pursuant to 6A:26-3.8 if no insurance proceeds and/or damages award were received by the school district;

ii. Multiply the percentage by the amount of insurance proceeds and/or damages award to which the school district is entitled, minus any amount that would exceed the eligible costs of the project; and

iii. Reduce the State share by the amount determined in step ii.

2. For Development Authority-constructed school facilities projects with a local share, the local share shall be adjusted in the following manner:

i. Calculate the percentage of total costs that would be funded by local share if no insurance proceeds and/or damages award were received by the school district;

ii. Reduce the total costs by the amount of insurance proceeds and/or damages award to which the school district is entitled minus any amount that would exceed the eligible costs of the project;

iii. Multiply the local share percentage determined in (b)2i above by the amount determined in (b)2ii above; and

iv. Add the amount of insurance proceeds and/or damages award to the revised local share amount determined in (b)2iii above. The amount determined in this subparagraph shall be provided to the Development Authority before it undertakes a school facilities project.

3. For Development Authority-constructed school facilities projects without a local share, the State share shall be adjusted in the following manner:

i. Reduce the State share by the amount of insurance proceeds and/or damages award to which the school district is entitled; and

ii. The amount determined in (b)3i above shall be provided to the Development Authority before it undertakes a school facilities project.

4. For locally constructed school facilities projects for which a school district elects to receive State debt service aid pursuant to 18A:7G-9, the school district shall issue bonds only for the amount of the total projects costs minus the insurance proceeds and/or damages award.

i. If the bonds have already been issued, the insurance proceeds and/or damages award should be used to reduce the outstanding principal amount at the earliest call date or to annually reduce the amount of debt service payment. The calculation of State debt service aid shall be made from the reduced amount.

(c) Gifts, grants, other private sources, and/or municipal surplus received by a school district shall be applied as follows: if the school district applies for approval of a school facilities project that will also receive funding through any of the above sources, such source of revenue shall be applied to the local share of the project, and may be applied to reduce the State support only if a Development Authority-constructed school facilities project does not have a local share, or for school facilities projects with a local share, the source of revenue exceeds the local share and, by its terms, may only be used for the school facilities project, in which case State share shall be reduced by the amount of the excess over local share.

1. For locally constructed school facilities projects for which a school district elects to receive a State share pursuant to 18A:7G-15, and the revenue source exceeds the local share and, by its terms, may only be used for the school facilities project, such excess shall be applied to the State share of the project and reduce the amount of the grant before a disbursement is made.

2. For locally constructed school facilities projects for which a school district elects to receive State debt service aid pursuant to 18A:7G-9, the school district shall issue bonds only for the amount of the total project costs, minus the revenue source.

3. For Development Authority-constructed school facilities projects with a local share, the revenue source shall be applied toward the local share, and that amount shall be provided to the Development Authority before it undertakes the school facilities project, along with any amount in excess of the local share that by the terms of the revenue source must be used for the school facilities project, which shall be applied to reduce the amount of State share.

4. For Development-Authority-constructed school facilities projects without a local share, the revenue source shall be applied to reduce the amount of State share only if the terms of the revenue source require that it be used for the school facilities project, in which case that amount shall be provided to the Development Authority before it undertakes the school facilities project.

N.J. Admin. Code § 6A:26-3.15

The following annotations apply to N.J.A.C. 6A:26-3.15 prior to its repeal by R.2013 d.145:
Amended by R.2001 d.367, effective 10/1/2001.
See: 33 N.J.R. 1809(a), 33 N.J.R. 3482(a).
In (b), inserted "district" preceding "board"; in (e), substituted N.J.S.A. reference for EFCFA reference in the third sentence; and in (f), updated N.J.A.C. references and inserted reference to the Commissioner's rules to be adopted.
Amended by R.2004 d.214, effective 6/7/2004.
See: 36 N.J.R. 243(a), 36 N.J.R. 2733(b).
Rewrote (b); in (f), amended the N.J.S.A. reference.
Amended by R.2007 d.81, effective 3/19/2007.
See: 38 N.J.R. 4533(a), 39 N.J.R. 899(a).
Inserted "school" preceding "districts" and "district" throughout; and in (f), substituted "and" for a comma preceding "12".
The following annotations apply to N.J.A.C. 6A:26-3.15 subsequent to its recodification from N.J.A.C. 6A:26-3.17 by R.2013 d.145:
New Rule, R.2001 d.367, effective 10/1/2001.
See: 33 N.J.R. 1809(a), 33 N.J.R. 3482(a).
Amended by R.2004 d.214, effective 6/7/2004.
See: 36 N.J.R. 243(a), 36 N.J.R. 2733(b).
Rewrote (b); added (c).
Amended by R.2007 d.81, effective 3/19/2007.
See: 38 N.J.R. 4533(a), 39 N.J.R. 899(a).
Inserted "school" preceding "district" throughout; and in (a), substituted "School districts" for "Districts".
Recodified from N.J.A.C. 6A:26-3.17 and amended by R.2013 d.145, effective 12/16/2013.
See: 45 N.J.R. 1026(a), 45 N.J.R. 2557(a).
Rewrote the section. Former N.J.A.C. 6A:26-3.15, Demonstration projects, repealed.