New Jersey § 18a:7g-21

§ 18a:7g-21.

a. In the event that a local unit has failed or is unable to pay to the financing

authority or the development authority in full when due any local unit obligations

issued by the local unit to the financing authority, including, but not limited to,

any lease or sublease obligations, or any other moneys owed by the district to the

financing authority, to assure the continued operation and solvency of the authority,

the State Treasurer shall pay directly to the financing authority an amount sufficient

to satisfy the deficiency from State aid payable to the local unit; provided that

if the local unit is a school district, the State aid shall not include any State

aid which may otherwise be restricted pursuant to the provisions of P.L.2007, c. 260 ( C.18A:7F-43 et al.) . As used in this section, local unit obligations include the principal or interest

on local unit obligations or payment pursuant to a lease or sublease of a school facilities

project to a local unit, including the subrogation of the financing authority to the

right of the holders of those obligations, any fees or charges payable to the financing

authority, and any amounts payable by a local unit under a service contract or other

contractual arrangement the payments under which are pledged to secure any local unit

obligations issued to the financing authority by another local unit. b. If the financing authority requires, and if there has been a failure or inability

of a local unit to pay its local unit obligations to the financing authority for a

period of 30 days, the chairman or the executive director of the financing authority

shall certify to the State Treasurer, with written notice to the fiscal officer of

the local unit, the amount remaining unpaid, and the State Treasurer shall pay that

amount to the financing authority; or if the right to receive those payments has

been pledged or assigned to a trustee for the benefit of the holders of bonds or refunding

bonds of the financing authority, to that trustee, out of the State aid payable to

the local unit, until the amount so certified has been paid. Notwithstanding any provision of this act to the contrary, the State Treasurer's

obligation to pay the financing authority pursuant to this section shall not extend

beyond the amount of State aid payable to the local unit. c. The amount paid to the financing authority pursuant to this section shall be deducted

from the appropriation or apportionment of State aid payable to the local unit and

shall not obligate the State to make, nor entitle the local unit to receive, any additional

appropriation or apportionment. The obligation of the State Treasurer to make payments to the financing authority

or trustee and the right of the financing authority or trustee to receive those payments

shall be subject and subordinate to the rights of holders of qualified bonds issued

prior to the effective date of this act pursuant to P.L.1976, c. 38 ( C.40A:3-1 et seq. ) and P.L.1976, c. 39 ( C.18A:24-85 et seq. ).