40A:3-7 Certification, withholding; lien; covenants.

6. a. Each municipality which issues qualified bonds shall certify to the State Treasurer the name and address of the paying agent, the maturity schedule, interest rate and dates of payment of debt service on such qualified bonds within 10 days after the date of issuance of such qualified bonds. After receipt of such certificate the State Treasurer shall withhold from the amount of business personal property tax replacement revenues, gross receipts tax revenues, municipal purposes tax assistance fund distributions, State urban aid, State revenue sharing and any other funds appropriated as State aid and not otherwise dedicated to specific municipal programs payable to such municipality an amount of such business personal property tax replacement revenues, gross receipts tax revenues, municipal purposes tax assistance fund distributions, State urban aid, State revenue sharing and any other funds appropriated as State aid and not otherwise dedicated to specific municipal programs which will be sufficient to pay the debt service on such qualified bonds as the same shall mature and become due. The State Treasurer shall, on or before each principal and interest payment date, forward such withheld amounts to the paying agent for such qualified bonds for deposit to the account established with such paying agent for the purpose of paying the debt service on such qualified bonds. Notwithstanding any other provision of law to the contrary, a statutory lien and trust is automatically and without further act or filing created and impressed upon the business personal property tax replacement revenues, gross receipts tax revenues, municipal purposes tax assistance fund distributions, State urban aid, State revenue sharing, and any other funds appropriated as State aid and not otherwise dedicated to specific municipal programs so payable to such municipality that are withheld or are required to be withheld by the State Treasurer under P.L.1976, c.38 (C.40A:3-1 et seq.), which statutory lien and trust shall be paramount and superior to all other liens and interests of any kind in favor of the holders of qualified bonds, for the sole purpose of paying debt service on the qualified bonds issued pursuant to P.L.1976, c.38 (C.40A:3-1 et seq.). The lien created under this subsection for the benefit of bondholders is perfected without delivery, recording, or notice. All such business personal property tax replacement revenues, gross receipts tax revenues, municipal purposes tax assistance fund distributions, State urban aid, State revenue sharing, and any other funds appropriated as State aid and not otherwise dedicated to specific municipal programs that are withheld or are required to be withheld by the State Treasurer under P.L.1976, c.38 (C.40A:3-1 et seq.) shall be exempt from being levied upon, taken, sequestered, or applied toward paying the debts of the municipality other than for payment of debt service on such qualified bonds. All such business personal property tax replacement revenues, gross receipts tax revenues, municipal purposes tax assistance fund distributions, State urban aid, State revenue sharing, and any other funds appropriated as State aid and not otherwise dedicated to specific municipal programs that are withheld or are required to be withheld by the State Treasurer under P.L.1976, c.38 (C.40A:3-1 et seq.) shall be deemed to be held in trust for the sole purpose of paying the debt service on such qualified bonds.

b. The State of New Jersey hereby covenants with the purchasers, holders and owners, from time to time, of qualified bonds that it will not repeal, revoke, rescind, modify or amend the provisions of subsection a. of this section so as to create any lien or charge on or pledge, assignment, diversion, withholding payment or other use of or deduction from any business personal property tax replacement revenues, gross receipts tax revenues, municipal purposes tax assistance fund distributions, State urban aid, State revenue sharing or any other funds appropriated as State aid and not otherwise dedicated to specific municipal programs to be apportioned and paid to any paying agent of qualified bonds which is prior in time or superior in right to the payment required by subsection a. of this section; provided, however, that nothing herein contained shall be deemed or construed to require the State of New Jersey to continue to make payments of business personal property tax replacement revenues, gross receipts tax revenues, municipal purposes tax assistance fund distributions, State urban aid, State revenue sharing or any other funds appropriated as State aid and not otherwise dedicated to specific municipal programs or to limit or prohibit the State from repealing or amending any law heretofore or hereafter enacted for the payment or apportionment of said revenues or aid or the manner, time, or amount thereof.

c. It being the original and continuing intent of the State that all such business personal property tax replacement revenues, gross receipts tax revenues, municipal purposes tax assistance fund distributions, State urban aid, State revenue sharing, and any other funds appropriated as State aid and not otherwise dedicated to specific municipal programs that are withheld or are required to be withheld by the State Treasurer under P.L.1976, c.38 (C.40A:3-1 et seq.) shall be subject to a statutory lien and trust, the provisions of P.L.2015, c.95 shall apply to all qualified bonds whether issued prior to or following enactment of that act. All persons shall be forever estopped from denying that qualified bonds, whenever issued pursuant to subsection a. above, are entitled to the benefits of the provisions of P.L.1976, c.38 (C.40A:3-1 et seq.), including but not limited to the statutory lien and trust created pursuant to subsection a. of this section.

L.1976, c.38, s.6; amended 1978, c.35, s.3; 1991, c.180, s.4; 2015, c.95, s.38.