N.J. Admin. Code § 7:24A-4.1

Current through Register Vol. 56, No. 24, December 18, 2024

Section 7:24A-4.1 - Amount and terms of loan

(a) The amount of the loan, determined by the Department, shall be based upon allowable project costs as set forth in this chapter.

(b) The interest rate for loans made pursuant to the Act from the 1992 Dam Restoration and Clean Water Trust Fund and the 2003 Dam, Lake and Stream Project Revolving Loan Fund shall not exceed two percent per year.

(c) The loan maturity period shall be for a period not to exceed 20 years from the date that disbursements to the borrower begin. The Department and borrower may establish a shorter repayment schedule by mutual agreement. Principal and accrued interest may be prepaid by the borrower prior to the end of the loan maturity period without penalty.

(d) The cost of payment of the principal and interest of any loan made to a private lake association or similar organization or owner of a private dam, as a co-applicant with a local government unit, shall be assessed by the local government unit against the real estate benefited thereby in proportion to and not in excess of the benefits conferred. Such assessments shall bear interest and penalties from the same time and at the same rate as assessments for local improvements in the municipality where they are imposed. From the date of confirmation, the assessments shall be a first and paramount lien upon the real estate assessed to the same extent, and be enforced and collected in the same manner as assessments for local improvements.

(e) A local government unit may be required to secure a loan awarded under this chapter in a manner acceptable to the Department. Acceptable security arrangements include, but are not limited to, general obligation bonds of the local government unit, municipal bond insurance and surety bonds.

(f) An estimated amortization or loan repayment schedule will be provided to the borrower by the Department and be made part of the loan award agreement. The schedule will indicate installment dates and loan repayment amounts. The Department reserves the right to unilaterally adjust the loan repayment dates and amounts on the amortization schedule if the timetable for completion and the actual project costs and disbursements vary from the estimated amortization schedule.

(g) The loan shall be repaid in semi-annual installments over a period which will not exceed 20 years from the date of the first drawdown to the date of the borrower's final repayment.

(h) Interest shall accrue on the amount of loan funds disbursed from the Fund at a rate of two percent per year, computed from the date of disbursement to the date of the final repayment of principal. Interest accrued against each interim drawdown, from the date of the first drawdown to a date three months following the last project drawdown, must be paid to the Treasurer of the State of New Jersey three months after the date of the final drawdown.

(i) The first principal repayment will be made to the Treasurer of the State beginning nine months after the final project drawdown, or two years from the date of the first disbursement, or as per a schedule prescribed by the loan award agreement, whichever comes first.

(j) The borrower shall allocate a portion of its budget in an amount sufficient to meet the annual debt service on the loan. Repayment funds must be deposited into a fund specifically established for the purpose of assuring repayment of the loan to the Treasurer of the State.

(k) The borrower's failure to make any repayment within 30 days of the scheduled payment due date will result in the Department's assessing a late fee. The late fee is computed on the following basis:

1. When a payment is 30 days past due, the late fee shall be five percent of the payment amount due.

2. When a payment is 60 days past due, the late fee shall be 10 percent of the payment amount due.

3. When a payment is 90 days past due, the late fee shall be 15 percent of the payment amount due, and the borrower will be in default of the loan award agreement. Upon default, all outstanding principal, interest, and penalty amounts immediately become payable to the Treasurer of the State.

4. On a loan in default, interest charges at a rate of two percent accrue on the outstanding principal, interest, and penalty charges calculated from the date the repayment was due.

N.J. Admin. Code § 7:24A-4.1

Amended by R.2005 d.301, effective 9/6/2005.
See: 37 N.J.R. 999(a), 37 N.J.R. 3342(a).
In (b), added "and the 2003 Dam, Lake and Stream Project Revolving Loan Fund" following "Clean Water Trust Fund".