New Jersey § 18a:56-21

§ 18a:56-21.

a. There is hereby established within the fund for the support of free public schools

a school facilities financing reserve, to which shall be credited an amount necessary

to secure the principal of and interest on school bonds issued to represent the loans

that secure the bonds issued by the New Jersey Economic Development Authority pursuant

to section 7 of this 1993 amendatory and supplementary act. 1 The amount of the reserve so established shall not exceed the moneys available in

the fund or include those amounts in the fund that are obligated for the purposes

of the school bond reserve fund established pursuant to section 5 of P.L.1980, c.

72 ( C. 18A:56-19 ). The reserve shall be pledged as security for prompt payment to the authority by

the school districts of the principal and interest on the school bonds issued to represent

the loans made under section 7 of this 1993 amendatory and supplementary act in the

event of the inability of the school districts to make timely payment. These amounts shall be used by the authority for payment to holders of bonds issued

pursuant to section 7 of this 1993 amendatory and supplementary act. The school facilities financing reserve shall be composed entirely of direct obligations

of the United States Government or obligations guaranteed by the full faith and credit

of the United States Government. Securities representing at least one-third of the minimum market value to be held

in the school facilities financing bond reserve shall be due to mature within one

year of the date of issuance or purchase. b. It shall be the duty of the trustees of the fund to determine that the school facilities

financing bond reserve is established at the proper level, based on the market value

of the obligations to be held therein on the effective date of this 1993 amendatory

and supplementary act, to ascertain annually on or before September 15 of each year

the aggregate amount of bonds issued by the New Jersey Economic Development Authority

pursuant to section 7 of this 1993 amendatory and supplementary act and the amount

outstanding, and to maintain the school facilities financing bond reserve at an appropriate

level for the ensuing year based on annual market valuations of the obligations. The State Treasurer, acting as agent of the trustees, is authorized to retain as

much of the income earned by the fund in the preceding year as he may determine to

be required to maintain the school facilities financing bond reserve at the level

herein specified. c. Bonds issued by the New Jersey Economic Development Authority pursuant to section

7 of this 1993 amendatory and supplementary act shall contain, in addition to any

other language required to issue the bonds, a statement, in bold print, that the loans

that secure the bonds are secured by monies reserved in the fund for the support of

free public schools pursuant to the provision of the “Public School Capital Finance

Assistance Act.” 1

N.J.S.A. § 34:1B-7.25.