N.J. Admin. Code § 6A:26-3.7

Current through Register Vol. 56, No. 23, December 2, 2024

Section 6A:26-3.7 - Local support of school facilities projects

(a) No school facilities project shall be constructed unless local support, if any, plus other local revenue sources utilized to fund the total costs of a school facilities project receiving State debt service aid has received approval as set forth in this section. School districts shall notify the Commissioner and executive county superintendent when approval is obtained, and, if applicable, provide each the schedule for issuance of school bonds. School districts shall also notify the executive county superintendent of the issuance of school bonds within 30 days of their issuance.

(b) If the Development Authority is constructing the school facilities project, the school district shall provide to the Development Authority funds for 100 percent of the ineli-gible costs of the project in accordance with the rules of the Development Authority.

(c) If the school district determines to issue school bonds to fund all or any part of the local support, the school district shall proceed in accordance with (e), (f), or (g) below, as applicable. If the school district determines to fund the entire local support through a means other than school bonds, it shall obtain approval of necessary line-items in the budget, obtain separate voter or board-of-school-estimate approval of the expenditure of local support, make withdrawals from capital reserve in accordance with N.J.A.C. 6A:23A-14. A school district may fund the local support for additions or improvements to an existing school facility or equipment through a lease-purchase agreement not in excess of five years' duration if the school district obtains approval of the lease-purchase agreement in accordance with 18A:20-4.2(f) and N.J.A.C. 6A:26-10.

(d) If a school district submits to voters a separate proposal for local funding for a non-referendum capital project pursuant to 18A:7F-5 and 6A:23A-8.4, such amounts shall not be utilized as the local share or to reduce the total costs of a school facilities project receiving State debt service aid of a school facilities project.

(e) Whenever the district board of education in a Type I or Type II school district having a board of school estimate determines it is necessary to sell school bonds to raise money for the local support for any school facilities project approved pursuant to EFCFA and these regulations, it shall estimate by resolution the amount necessary to be raised for school facilities project(s) and itemizing the estimate to make it readily understandable. The secretary of the district board of education shall certify to each member of the school district's board of school estimate a copy of the resolution. The resolution shall include the amount needed to be raised by school bonds; the final eligible costs of the school facilities project as approved by the Commissioner; the total costs; the State share or State debt-service-aid percentage; the local share, if applicable; and the excess costs, if applicable. If the district board of education determines to use a combination of school bonds and other revenue sources, the resolution shall also include the portion of the local share or total costs of a school facilities project receiving State debt service aid to be raised through other revenue sources, listing separately each source and the amount from it. Gifts, grants, other private sources, and municipal surplus shall also be listed but only for the informational purposes of evidencing their portion of total costs and not for authorizing their use.

(f) Whenever a school facilities project(s) to be paid for from school bond proceeds is submitted to the voters of a Type II school district an annual or special school election for their approval or disapproval, the district board of education shall frame and adopt the question(s) to be submitted so each school facilities project is submitted as a separate question, or so all or any number of them are submitted in one question, which shall state the school facilities project(s) submitted and the amounts to be raised for each of the school facilities projects separately submitted or for each or all of the school facilities projects jointly submitted, as the case may be, but any proposal for land purchase shall be sufficient to authorize the taking and condemning of the land. If the district board of education determines to use a combination of school bonds and other revenue sources, the question shall also include the portion of the local share or total costs of a school facilities project receiving State debt service aid to be raised through other revenue sources, listing separately each source and the amount from it. Gifts, grants, private sources, and municipal surplus shall also be listed but only for informational purposes of evidencing their portion of total costs and not for authorizing their use.

1. If the school facilities project is to be constructed by the Development Authority or a redevelopment entity, or by the school district with a grant pursuant to 18A:7G-15, the single-question referendum shall request approval for the local share and shall disclose the amount needed to be raised by school bonds, the final eligible costs of the school facilities project as approved by the Commissioner, the State share, the total costs, and the excess costs, if any.

2. If the school facilities project is not to be constructed by the Development Authority or a redevelopment entity or by the school district with a grant pursuant to 18A:7G-15, the single-question referendum shall request approval for the total costs of the school facilities project, disclose the amount needed to be raised by school bonds, the State debt-service-aid percentage, the final eligible costs, and the excess costs, if any.

i. The State debt-service-aid percentage shall be stated as a percentage of the annual debt service of the final eligible costs.

3. When a school facilities project is framed in more than one question, the explanatory statement accompanying the questions shall include a summary that lists the total costs of the project; the State share or the State debt-service-aid percentage; the final eligible costs of the project; the local share, if applicable; excess costs; and the revenue source for the local share or total costs of a school facilities project receiving State debt service aid.

4. The statement of excess costs in any ballot question and in any explanatory statement that accompanies a ballot question shall describe the excess costs as follows: "This school facilities project includes [insert amount) for school facility construction elements in addition to the facilities efficiency standards developed by the Commissioner of Education, or that are not otherwise eligible for State support pursuant to 18A:7G-5(g) ".

(g) Whenever a State-operated school district determines it is necessary to sell school bonds to raise money for any school facilities project approved pursuant to EFCFA and this subchapter, it shall estimate the amount necessary to be raised for the school facilities project(s), itemizing such estimate to make it readily understandable. The State school district superintendent shall certify to each member of the school district's capital project review board a copy of the resolution. The resolution shall include the amount needed to be raised by school bonds; the final eligible costs of the school facilities project as approved by the Commissioner; the total costs; the State share or the State debt-service-aid percentage; the local share, if applicable; and the excess costs, if any. The capital project review board shall review the project in accordance with 18A:7A-46.2. If the school district determines to use a combination of school bonds and other revenue sources, the question shall also include the portion of the local share or total costs of the school facilities project receiving State debt service aid to be raised through other revenue sources, listing separately each source and the amount from the source. Gifts, grants, other private sources, and municipal surplus shall also be listed but only for informational purposes of evidencing their portion of total costs and not for authorizing their use.

(h) A school district, other than a State-operated school district, that sought and failed to receive approval pursuant to 18A:7G-11 of a school facilities project that did not have excess costs, and sought and failed within the three years prior but after July 18, 2000, to receive approval of the same school facilities project, with or without excess costs, may file a petition with the Office of Controversies and Disputes, in conformance with 6A:3-1.4 and the procedures in this subsection, to request that the Commissioner approve the school facilities project and authorize the issuance of school bonds for the local share of the school facilities project. Pursuant to 18A:7G-12, a State-operated school district may not use the process set forth in this paragraph but shall instead use the process established by 18A:7A-46.2 to undertake a school facilities project.

1. A petition filed pursuant to this subsection shall be captioned In the Matter of the Application of the Board of Education of the (Township, Borough, etc.) of (School district), (Name) County, for an Order Directing Issuance of Bonds Pursuant to 18A:7G-12 and shall:

i. Briefly set forth the basis for the school district's appeal, including: an explanation of how each school facilities project proposed in the petition meets the statutory requirements that the school district has failed to obtain approval of the local share of the school facilities project(s) within the three years prior to the latter of such failures; the latter failure was for a school facilities project(s) without excess costs as defined in 6A:26-1.2; and why the requested school facilities project(s) is necessary for the provision of a thorough and efficient system of education in the school district;

ii. Be accompanied by a district board of education resolution approving the school district's appeal, documentation of the failed referenda underlying the appeal and a verification as set forth in N.J.A.C. 6A:3-1.4; and

iii. Be filed in triplicate (original and two copies).

2. The review, public comment, and hearing process regarding the petition shall be as follows:

i. A conforming petition and supporting materials filed pursuant to (h)1 above shall be forwarded to the Division, which shall review the record for completeness and solicit such documentation from the school district as may be necessary to ensure the petition's consistency with the threshold statutory criteria as set forth in (h)1 above. Once the record is determined to be complete, the Division shall return to the Office of Controversies and Disputes the record with a written report of its review. The Division also shall provide to the school district a copy of its written report;

ii. Upon receipt of a completed record from the Division, the Office of Controversies and Disputes shall notify the district board of education that it has met the prerequisites for seeking an order of the Commissioner directing issuance of school bonds for the local share of the school facilities project(s) and shall direct the school district to:

(1) Announce at a district board of education meeting to occur by a specified date that interested persons may submit written comments to the Commissioner through the Office of Controversies and Disputes, in duplicate and no more than 10 pages in length, and a copy to the district board of education;

(2) Publish by the date specified and in a minimum of two newspapers, one local and one Statewide, notice of the opportunity for the public to file such comments. Both the announcement and published notice shall identify clearly the school facilities projects; the amount of school bonds the school district seeks to issue; the fact that the voters previously rejected referenda seeking the issuance and the number of such rejections; and the purpose of the school district's appeal to the Commissioner; and

(3) File with the Office of Controversies and Disputes a sworn certification that the required announcement was made and the required notice was published.

iii. Upon receipt of the required certification from the school district and expiration of the public comment period pursuant to (h)2ii above, the Commissioner shall arrange for an evidentiary hearing in accordance with the following procedures:

(1) The Commissioner may either request that the Director of the Office of Administrative Law assign an administrative law judge to conduct the matter as an uncontested case pursuant to 52:14F-5 (o) or arrange for assignment of a hearing officer to conduct the matter on behalf of the Department;

(2) Written notice of the hearing date(s) shall be sent to the district board of education and its legal representative;

(3) The district board of education shall effectuate notice to interested persons by announcing the hearing date at a district board of education meeting prior to the hearing date, and shall publish same in a minimum of two newspapers, one Statewide and one local, with a minimum of 20 days' notice provided through both means, and with proof of both the announcement and the publication to be submitted to the assigned judge or hearing officer;

(4) The hearing shall be conducted on an expedited basis and, to the extent possible, at a location close to the school district;

(5) Interested persons shall be provided with a reasonable amount of time, as determined by the assigned judge or hearing officer, to present comments without unduly prolonging proceedings; and

(6) The district board of education shall present, in a manner to be determined by the assigned judge or hearing officer, proofs as to why the school facilities project(s) for which it seeks to issue school bonds are necessary for provision of a thorough and efficient system of education in the school district.

3. Following review of the report and recommendation issued by the Office of Administrative Law pursuant to 1:1-21.5 or prepared by the assigned hearing officer in a manner consistent with N.J.A.C. 1:1-21.5, the Commissioner shall make in a written decision a final determination taking into consideration the report's recommended findings of fact and conclusions of law.

i. Within 13 days of the date the report was mailed to the district board of education, or such longer period as may be requested by the school district and granted by the Commissioner, the school district may file with the Office of Administrative Law comments on the report and recommendation.

4. If the Commissioner finds that the school facilities project(s) is necessary for the provision of a thorough and efficient system of education in the school district, the written ordering decision shall authorize the district board of education to prepare to issue school bonds once the Division has approved the final eligible costs of the school facilities project(s) pursuant to 6A:26-3.5 and to submit to the Division detailed plans and specifications, or if unavailable, the most complete documentation on the project.

i. The Division shall then issue a preliminary project report and transmit the documentation to the Development Authority for purposes of a Development Authority recommendation of the final eligible costs of the school facilities project(s), pursuant to N.J.A.C. 6A:26-3.5.

ii. If the Development Authority has the detailed plans and specifications and/or documentation sufficient to make a recommendation of the final eligible costs of the project(s), the recommendation shall be forwarded to the Division. If the plans for the school facilities project(s) do not meet the criteria for detailed plans and specifications, the additional design work shall be funded so a final-eligible-cost recommendation can be made to the Division. The local share shall be adjusted to reflect the Development Authority's funding of the additional design work.

iii. Once the Commissioner approves the final eligible costs of the school facilities project(s) and issues to the Development Authority a final project report, the Commissioner shall approve the school facilities project(s) without excess costs and authorize the issuance of school bonds to fund the local share.

5. In addition to the amount of taxes determined by the legal voters of the school district at the annual school election, the district board of education secretary shall certify the amount required for the repayment of the interest and principal of the school bonds required to fund the local share approved by the Division in the same manner required for interest and debt-redemption charges pursuant to 18A:22-33. The amount certified shall be included in the taxes assessed, levied, and collected in the municipality(ies) comprising the school district.

6. Any school facilities project authorized pursuant to this subsection shall be constructed by the Development Authority pursuant to 6A:26-3.9.

(i) Any ROD included in district factor group A or B as of July 18, 2000 may apply to the Commissioner for 100 percent State share of final eligible costs of a school facilities project in the event the school district is having difficulty financing the local share or the total costs of a school facilities project receiving State debt service aid. To receive from the Commissioner a recommendation for 100 percent State share of final eligible costs, a school district shall submit documentation demonstrating that:

1. It sought approval of a school facilities project that did not have excess costs, and failed to receive such approval, and previously sought and failed to receive approval of the same school facilities project, with or without excess costs and:

i. The budget equalized tax rate of the school district is at least 130 percent of the State average; or

ii. The equalized municipal tax rate is above the State average; and

2. The school facilities project is necessary for the provision of a thorough and efficient system of education in the school district.

(j) Upon review of the application, the Commissioner shall determine whether to recommend to the Legislature that the school district receive 100 percent State share of the final eligible costs of the project. A school district will receive 100 percent State share only if the Legislature so determines upon receipt of the Commissioner's recommendation.

(k) All school facilities projects approved pursuant to (i) and (j) above shall be constructed by the Development Authority pursuant to N.J.A.C. 6A:26-3.9. Final eligible costs of the project shall be determined in accordance with 6A:26-3.5 prior to the Development Authority undertaking construction of the school facilities project.

N.J. Admin. Code § 6A:26-3.7

Amended by R.2001 d.367, effective 10/1/2001.
See: 33 N.J.R. 1809(a), 33 N.J.R. 3482(a).
Rewrote the section.
Amended by R.2004 d.214, effective 6/7/2004.
See: 36 N.J.R. 243(a), 36 N.J.R. 2733(b).
Rewrote the section.
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; in (a), substituted "School districts" for "Districts" two times; in (d), updated the N.J.A.C. reference; in (f)2, deleted an extra comma following "percentage"; in (i)1, substituted "School district" for "District"; in (i)1i, inserted "school" preceding "district's" two times; in (i)2 through (i)4, inserted "of education" following "district board" throughout; and rewrote (m).
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.