New Jersey-2022-ACR89-Introduced

A Concurrent Resolution proposing to amend Article VIII, Section II, paragraph 3 of the Constitution of the State of New Jersey.

Be It Resolved by the General Assembly of the State of New Jersey (the Senate concurring):

1. The following proposed amendment to the Constitution of the State of New Jersey is agreed to:

PROPOSED AMENDMENT

Amend Article VIII, Section II, paragraph 3 to read as follows:

3. a. The Legislature shall not, in any manner, create in any fiscal year a debt or debts, liability or liabilities of the State, which together with any previous debts or liabilities shall exceed at any time one per centum of the total amount appropriated by the general appropriation law for that fiscal year, unless the same shall be authorized by a law for some single object or work distinctly specified therein. Regardless of any limitation relating to taxation in this Constitution, such law shall provide the ways and means, exclusive of loans, to pay the interest of such debt or liability as it falls due, and also to pay and discharge the principal thereof within thirty-five years from the time it is contracted; and the law shall not be repealed until such debt or liability and the interest thereon are fully paid and discharged. Except as hereinafter provided, no such law shall take effect until it shall have been submitted to the people at a general election and approved by a majority of the legally qualified voters of the State voting thereon.

b. [On and after the date on which this subparagraph b. becomes part of the Constitution, the Legislature shall not enact any law that, in any manner, creates or authorizes the creation of a debt or liability of an] An autonomous public corporate entity, established either as an instrumentality of the State or otherwise exercising public and essential governmental functions, [which] shall not issue any debt or liability that has a pledge of an annual appropriation as the ways and means to pay the interest of such debt or liability as it falls due and pay and discharge the principal of such debt, unless [a law authorizing] the creation of that debt for some single object or work distinctly specified [therein] shall have been submitted to the people at a general election and approved by a majority of the legally qualified voters of the State voting thereon. Voter approval shall not be required for any [such law] debt or liability providing that the ways and means to pay the interest of and to pay and discharge the principal of such debt or liability shall be subject to appropriations of an independent non-State source of revenue paid by third persons for the use of the single object or work thereof, or from a source of State revenue otherwise required to be appropriated pursuant to another provision of this Constitution.

c. No voter approval shall be required for any such law under [subparagraphs] subparagraph a. [or b.] of this paragraph authorizing the creation of a debt or debts in a specified amount or an amount to be determined in accordance with such law , or the issuance of any debt or liability under subparagraph b. of this paragraph in a specified amount, for the refinancing of all or a portion of any outstanding debts or liabilities of the State, or of an autonomous public corporate entity, established either as an instrumentality of the State or otherwise exercising public and essential governmental functions, heretofore or hereafter created, so long as such law shall require , or such issuance shall require, that the refinancing provide a debt service savings determined in a manner to be provided in such law , or by the action of the autonomous public corporate entity, and that the proceeds of such debt or debts and any investment income therefrom shall be applied to the payment of the principal of, any redemption premium on, and interest due and to become due on such debts or liabilities being refinanced on or prior to the redemption date or maturity date thereof, together with the costs associated with such refinancing.

d. All money to be raised by the authority of such law , or by the action of the autonomous public corporate entity, shall be applied only to the specific object stated therein, and to the payment of the debt thereby created.

e. This paragraph shall not be construed to refer to any money that has been or may be deposited with this State by the government of the United States. Nor shall anything in this paragraph contained apply to the creation of any debts or liabilities for purposes of war, or to repel invasion, or to suppress insurrection or to meet an emergency caused by disaster or act of God.

(cf: Article VIII, Section II, paragraph 3 amended effective December 4, 2008)

2. When this proposed amendment to the Constitution is finally agreed to pursuant to Article IX, paragraph 1 of the Constitution, it shall be submitted to the people at the next general election occurring more than three months after the final agreement and shall be published at least once in at least one newspaper of each county designated by the President of the Senate, the Speaker of the General Assembly and the Secretary of State, not less than three months prior to the general election.

3. This proposed amendment to the Constitution shall be submitted to the people at that election in the following manner and form:

There shall be printed on each official ballot to be used at the general election, the following:

a. In every municipality in which voting machines are not used, a legend which shall immediately precede the question as follows:

If you favor the proposition printed below make a cross (X), plus (+), or check (a) in the square opposite the word "Yes." If you are opposed thereto make a cross (X), plus (+), or check (a) in the square opposite the word "No."

b. In every municipality the following question:

		CONSTITUTIONAL AMENDMENT TO REQUIRE VOTER APPROVAL OF CERTAIN BONDING BACKED BY STATE APPROPRIATIONS
	YES	Do you approve amending the Constitution to require voter approval for certain State debt? Voter approval would be needed when a State independent authority issues debt that is to be repaid from State funds. Under current law, voter approval is not needed if the debt is based on a law that was enacted before December 4, 2008.
		INTERPRETIVE STATEMENT
	NO	Voters have to approve certain State debt. Under current law, this generally includes when a State independent authority issues debt that the Legislature promises to repay each year and State funds are used to make the payments. An independent authority is an entity created by law that exercises certain government functions but is not under direct control of the State. However voter approval is not needed if the debt issued by an independent authority is based on a law that was enacted before December 4, 2008. The amendment ends this exception. It requires voter approval for all borrowing by a State independent authority when the Legislature promises to appropriate funds as the means to repay the debt. This does not affect bonds that have already been issued.

SCHEDULE

The Constitutional amendment shall, if approved, take effect immediately.

STATEMENT

This concurrent resolution proposes to amend the State Constitution to require voter approval whenever debt is issued through State independent authority bonds that are backed by annual State appropriations.

Pursuant to an amendment to the New Jersey Constitution that became effective on December 4, 2008 (known as the "Lance Amendment"), voter approval is generally required before State independent authorities can issue debt that is backed by annual appropriations by the Legislature to pay the principal and interest on the debt. However, this voter approval prerequisite has been held to be inapplicable when a State independent authority that issues appropriations-backed debt is granted authority to undertake such borrowing based upon statutes enacted prior to December 4, 2008 (ie., the date the Lance Amendment became effective).

This concurrent resolution amends the State Constitution to close this loophole. Any future borrowing by a State independent authority, when backed by an annual State appropriation, will be subject to approval by the voters in this State.

This proposed constitutional amendment does not affect borrowing that has already taken place. In addition, if the debt issued by a State independent authority is supported by a constitutional dedication of State revenue or by an independent non-State source of revenue paid by third persons for the use of the financed project, then voter approval of the borrowing is not required.