Legislation sponsored by Assembly Democrats John Wisniewski, Troy Singleton, Daniel R. Benson and Joseph Lagana that would establish a State Transportation Infrastructure Bank to leverage public and private investments for the long-term overhaul of New Jersey’s transportation network received final legislative approval in the Senate on Monday, 35-1.
“We can’t ignore the underlying value that our infrastructure system holds for our economy,” said Wisniewski (D-Middlesex), who chairs the committee. “For too long, we have neglected this foundation of our economy while our competitors in the global marketplace have invested in state-of-the-art water, energy and transportation systems. New Jersey’s economic recovery will be inherently linked to whether or not we create a more reliable and sustainable infrastructure system with better roads, bridges, tunnels and rail systems.”
“Economists have often said that the creation of a robust and dependable infrastructure system is an essential building block for a great economy,” said Singleton (D-Burlington). “Absent our roadways, water systems, energy supply grids, bridges, and rail system, companies could not supply their goods to market, individuals would not have electricity or drinkable water, families could not help their children bolster their educational opportunities, and our state would cease to be an incubator for enhanced productivity and innovation. This is not just a physical reality but an economic imperative as well.”
“A strong transportation infrastructure is a must if New Jersey is going to have a sustainably strong economy,” said Benson (D-Mercer/Middlesex). “This bill will help us build a better New Jersey, which means creating jobs and economic growth.”
“This is all about creating jobs and economic development and ensuring a better future for our state,” said Lagana (D-Bergen/Passaic). “Coupling private investment with state and federal funds to infuse capital into much needed infrastructure projects is, quite simply, the type of innovation we need these days.”
The bill (A-2268) repeals the existing State Transportation Infrastructure Bank, and establishes two special non-lapsing, revolving funds within the New Jersey Environmental Infrastructure Trust (trust) to be known as the State Transportation Infrastructure Bank Fund (transportation bank) and the Clean Energy and Infrastructure Modernization Fund (energy bank). The transportation bank replaces the State Transportation Infrastructure Bank that was a subaccount of the Special Transportation Trust Fund.
The bill expands the trust's current mission to include transportation and energy projects. Currently, the trust is involved with water and environmental infrastructure projects. The bill requires that funds and accounts of the trust be segregated to prevent the mixing of transportation moneys, energy moneys, and water or environmental infrastructure moneys.
The bill permits the trust to issue bonds in maturities of up to 30 years for all types of projects and creates an interim financing program for transportation and energy projects to mirror the existing interim financing program for water and environmental projects.
Federal law requires states to establish a state transportation infrastructure bank fund to be a depository for federal transportation infrastructure bank monies. The federal program allows states to enter into agreements where monies in the state transportation infrastructure bank may be loaned or used to provide other financial assistance to public or private entities for the planning, acquisition, engineering, construction, reconstruction, repair, and rehabilitation of a transportation project or for any other permitted purpose.
The transportation bank may be credited with State appropriations, federal fund allocations, proceeds from privately negotiated bond sales, monetary donations made available to the State to support the transportation bank program, and any principle and interest received as loan repayment or otherwise provided pursuant to the program.
The bill permits the trust to administer loans of federal funds through the Section 129 loan program. The Section 129 loan program permits federal transportation funds to be issued to public or private entities as loans, as long as revenues can be identified as a source of repayment for the loan funds. Repayments of Section 129 loans are to be deposited into the federal subaccount of the transportation bank as permitted by federal law.
The bill also establishes an account within the fund that only receives State funds so that grants can be issued, including for pedestrian infrastructure projects, without violating the terms of the federal program. The federal program only permits infrastructure banks to make loans to transportation projects.
The program is to be administered by the trust with assistance from the Department of Transportation (DOT). The Commissioner of DOT is to become an ex-officio member of the board of trustees for the trust, and the DOT is to be responsible for establishing the list of projects that the trust is to finance and the priority order in which they are to be funded. The trust is also directed to collaborate with the DOT on: the evaluation of potential transportation projects; fulfilling federal regulations regarding capital projects; coordinating with metropolitan planning organizations; ensuring that projects are consistent with the Statewide capital investment strategy; and advancing local, regional, and Statewide transportation objectives.
The bill provides that the Legislature consider the full DOT project list through the Senate and General Assembly budget committees before the list is included in the annual appropriations act. The Legislature is also to receive a copy of the transportation financial plan developed by the trust for the implementation of the financing of the DOT project list. The Legislature will have until June 15th to approve the transportation financial plan through a concurrent resolution. If the transportation financial plan is not approved by June 15, the project list is to be removed from the appropriations act, and the trust is not to undertake any proposed activities included in the project list.
The energy bank established by the bill is permitted to issue loans for the acquisition, construction, repair, or reconstruction of all or part of any structure, facility or equipment, or real or personal property necessary for or ancillary to: the production, collection, storage, improvement, distribution, maintenance, transmission, supply, consumption, or conservation of Class I renewable energy, Class II renewable energy, and gas energy; or the relocation of power lines underground.
The energy bank account may be credited with federal funds, State appropriations, or bond proceeds from public or privately negotiated bond sales.
The energy bank is to be able to issue both loans and grants and is to work with the Board of Public Utilities to develop a formal process for reviewing, evaluating, and ranking applicants for grant or loan funding. The energy bank is not to have a formal annual project list or financial plan.
The bill, if signed into law, would be effective immediately, but is to remain inoperative until State, Federal, or other private funds are provided to capitalize the banks.
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