New Jersey § 49:2b-13

§ 49:2b-13.

a. Proceeds derived from the sale of each series of refunding bonds shall be applied,

together with any other moneys legally available therefor, to the payment of the expenses

authorized by this act and to the immediate payment of the principal of, redemption

premium, if any, and interest due on any outstanding bonds to be refinanced by the

refunding bonds, or, to the extent not required for that immediate payment, shall

be deposited, together with any other moneys legally available therefor, in trust

with the State Treasurer, to be held separate and apart from all other funds of the

State, or, at the direction of the issuing officials, in trust with one or more trustees

or escrow agents, which trustees or escrow agents shall be trust companies or national

or State banks having powers of a trust company, located either within or without

the State. Proceeds or moneys deposited in trust with the State Treasurer or with one or more

trustees or escrow agents shall be applied solely to the payment when due of the principal

of, redemption premium, if any, and interest due and to become due on those outstanding

bonds to be refinanced on or prior to the redemption date or maturity date of the

outstanding bonds, as the case may be. Proceeds or moneys so held by the State Treasurer or deposited with trustees or

escrow agents may be invested in government securities (including government securities

issued or held in book-entry form on the books of the Department of the Treasury of

the United States); except that those government securities shall not be subject

to redemption prior to their maturity other than at the option of the holder thereof. Except as provided in subsection b. neither government securities nor moneys so

deposited with the State Treasurer or with trustees or escrow agents shall be withdrawn

or used for any purpose other than, and shall be held in trust for, the payment of

the principal of, redemption premium, if any, and interest on the outstanding bonds

to be refinanced by the refunding bonds; except that any cash received from principal

or interest payments on government securities deposited with the State Treasurer or

with trustees or escrow agents: (1) to the extent that the cash will not be required

at any time for that purpose, shall be paid over to the State as received by the State

Treasurer or by the trustees or escrow agents, and (2) to the extent the cash will

be required for that purpose at a later date, shall, to the extent practicable and

legally permissible, be reinvested in government securities maturing at times and

in amounts sufficient to pay when due the principal of, redemption premium, if any,

and interest to become due on the outstanding bonds on and prior to the redemption

date or maturity date of the outstanding bonds, as the case may be, and interest earned

from those reinvestments to the extent not required for the payment of bonds shall

be paid over to the State, as received by the State Treasurer or by the trustees or

escrow agents. b. Notwithstanding anything to the contrary contained in this section: (1) the State

Treasurer or trustees or escrow agents shall, if so directed by the issuing officials,

apply moneys on deposit with the State Treasurer or the trustees or escrow agents

pursuant to the provisions of this section and redeem or sell government securities

so deposited with the State Treasurer or the trustees or escrow agents and apply the

proceeds thereof to: (a) the purchase of the outstanding bonds which were refinanced

by the deposit with the State Treasurer or the trustees or escrow agents of the moneys

and government securities and immediately thereafter cancel all outstanding bonds

so purchased or (b) the purchase of different government securities; except that

the moneys and government securities on deposit with the State Treasurer or the trustees

or escrow agents after the purchase and cancellation of the outstanding bonds or the

purchase of different government securities shall be sufficient to pay, when due,

the principal of, redemption premium, if any, and interest on all other outstanding

bonds in respect of which the moneys and government securities were deposited with

the State Treasurer or the trustees or escrow agents on or prior to the redemption

date or maturity date of the outstanding bonds, as the case may be; and (2) if on

any date, as a result of any purchases and cancellations of outstanding bonds or any

purchases of different government securities as provided in this subsection, the total

amount of moneys and government securities remaining on deposit with the State Treasurer

or the trustees or escrow agents is in excess of the total amount which would have

been required to be deposited with the State Treasurer or the trustees or escrow agents

on that date in respect of the remaining outstanding bonds for which the deposit was

made in order to pay when due the principal of, redemption premium, if any, and interest

on those remaining outstanding bonds, the State Treasurer or the trustees or escrow

agents shall, if so directed by the issuing officials, pay the amount of that excess

to the State. c. Any amounts held by the State Treasurer in a separate fund for the payment of the

principal of and interest on outstanding bonds to be refinanced, as provided in this

section, shall, if so directed by the issuing officials, be transferred by the State

Treasurer for deposit with one or more trustees or escrow agents as provided in this

section, or for deposit with the State Treasurer as provided in this section, to be

held separate and apart from all other funds of the State, to be applied to the payment

when due of the principal of, redemption premium, if any, and interest to become due

on those outstanding bonds, as provided in this section, or be applied by the State

Treasurer to the payment when due of the principal of and interest on refunding bonds

issued under this act to refinance those outstanding bonds. d. The State Treasurer is authorized, upon direction of the issuing officials, to

enter into contracts with one or more trust companies or national or State banks,

to act as trustees or escrow agents as provided in this section, on terms and conditions

as shall be approved by the issuing officials.