S 4064 — Exempts school refunding bond issuances from prior Local Finance Board approval under certain circumstances.*

S4064 SCS SENATE COMMITTEE SUBSTITUTE FOR SENATE, No.

4064 STATE OF NEW JERSEY 222nd LEGISLATURE   INTRODUCEDADOPTED MAY 4,11, 2026     Sponsored by:

GREENSTEIN District 14 (Mercer and Middlesex)  Senator   SHIRLEY  K.   SYNOPSIS      Lowers threshold of achievable net present value savings needed in refinancing of school district debt.

 TURNER CURRENTDistrict VERSION15 OF(Hunterdon TEXTand     Mercer) As  introduced.Co-Sponsored by:

  Senator AnMcKnight Act  concerning  refinancing  of  SYNOPSIS      Exempts school districtrefunding debtbond andissuances amendingfrom P.L.2007,prior c.53.Local Finance Board approval under certain circumstances.

  CURRENT VERSION OF TEXT      Substitute as adopted by the Senate Education Committee.

       An Act concerning refinancing of school district debt and amending P.L.1969, c.130.

       1.    Section 15 of P.L.2007,P.L.1969, c.53c.130 (C.18A:55-3)(C.18A:24-61.5) is amended to read as follows:

     1.   5. As a condition of receiving State aid, a school district shall:

    a. a.     examine all available group options for every insurance policy held by the district, including any self-insurance plan administered by the New Jersey School Boards Association Insurance Group on behalf of districts, and shall participate in the most cost effective plans;

    A b.   certified takecopy stepsof toany maximizerefunding bond ordinance shall be filed with the district'sDirector participationof the Division of Local Government Services in the federalDepartment Universalof ServiceCommunity ProgramAffairs (E-rate)before adoption, together with a complete statement in form prescribed by the director and signed by the ACTchief telecommunicationsfinancial programofficer offeredof throughthe school district as to the Newoutstanding Jerseybonds Associationto be funded or refunded by issuance of Schoolthe Businessrefunding Officials;bonds.  Except as provided in subsection b.

    of c.    this participatesection, inno therefunding Alliancebond forordinance Competitiveor Energyany Servicesresolution (ACES)performing, Programdetermining, offeredor throughauthorizing thematters Newor Jerseyacts Schoolin Boardsconnection Association,with unlessrefunding thebonds districtshall istake ableeffect tountil demonstratethe toconsent of the commissionerlocal thatfinance itboard receivesshall goodshave orbeen servicesendorsed atupon a costcertified lesscopy thanthereof oras equaladopted. to the cost achieved by participants in the program;

     d.   Any takecertification appropriateor stepsendorsement of consent made by the local finance board or by a majority of the members thereof or by the secretary thereof pursuant to maximizeits direction as to any issue of refunding bonds shall, after the district'sissuance participationof in[such] the Specialrefunding Educationbonds Medicaidin Initiativereliance (SEMI)thereon, Program,be withconclusive maximumas participationto definedits byvalidity or regularity and shall not be contested in any action or proceeding relating to [such] the commissioner;refunding bonds instituted after the issuance of [such] those bonds.

and      e.    The refinancecounty, allmunicipality, outstandingor debtschool district may enter into any contracts or agreements to implement the refunding program, including agreements with banking institutions with respect to the application of moneys deposited in a sinking fund for the payment of the refunding bonds at their maturity date to the purchase of obligations of the United States Government or obligations the principal of and interest on which aare [3%]guaranteed twoby percentthe netUnited presentStates valueGovernment savingsor thresholdobligations isof achievable.any agency or instrumentality of the United States Government without regard to any limitations as to the investment or deposit of moneys.

     b.    Refunding bonds to realize total debt service savings on outstanding obligations may be issued without the approval of the Local Finance Board in the Department of Community Affairs when authorized by conditions set forth in rules and regulations of the Local Finance Board and upon a resolution adopted by 2/3 vote of the full membership of the board of education of the district.  The rules and regulations promulgated by the Local Finance Board pursuant to this subsection shall, at a minimum, provide that prior approval of the Local Finance Board is not required for refunding bonds issued by school districts in which the present value savings are at least two percent.

P.L.2007,P.L.2003, c.53,c.264, s.1)s.8)        2.2.    This act shall take effect immediately and shall first apply to the first full school year following the date of enactment, except that the Local Finance Board and the Commissioner of Education may take any administrative action in advance as shall be necessary for the implementation of this act.

This act shall take effect immediately and shall first apply to the first full school year following the date of enactment, except that the Commissioner of Education may take any administrative action in advance as shall be necessary for the implementation of this act.

    STATEMENT        This bill lowers the threshold of achievable net present value savings needed in the refinancing of a school district’s outstanding debt.

     Current law requires school districts to implement a number of efficiency standards as a condition of receiving State aid.  One of the requirements is that a school district refinances all outstanding debt for which a three percent net present value savings threshold is achievable.  This bill lowers the threshold from three percent to two percent.