N.J. Admin. Code § 7:36-1.7
All or a portion of the funding from the Garden State Preservation Trust (GSPT) may be derived from the proceeds of tax-exempt bonds issued from time to time by the State for acquisition and development projects for recreation and conservation purposes. Therefore, a local government unit or nonprofit that has been awarded GSPT funding shall not take or permit any action, or fail to take any action, that would cause the interest on such bonds to be treated as taxable for Federal income tax purposes pursuant to Section 103 of the United States Internal Revenue Code (the Code) or subject to the Alternative Minimum Tax under Section 57 of the Code. Additionally, a local government unit or nonprofit cannot use or permit the use of the proceeds of the bonds in such a way that would cause the bonds to be arbitrage bonds within the meaning of Section 148(a) of the Code.
N.J. Admin. Code § 7:36-1.7