Bill > S2381

Introduced Session

This bill, known as the "New Jersey Infrastructure Capital Asset Reassignment Enterprise Fund Act", establishes a trust fund for the conveyance of certain assets for the benefit of the State-administered retirement systems. The fund, known as the Infrastructure Capital Asset Reassignment Enterprise (ICARE) Fund, is established as an instrumentality of the State to exercise public and essential governmental functions. The purpose of the fund is to lessen the burdens of government by providing a fund through which a public entity may contribute, transfer or sell its revenue-producing assets, to a segregated or commingled account and share the risks and benefits of the performance of those assets, to maximize the performance and long-term value of those assets and to benefit the public entity. The fund will be administered by an Administrator retained, appointed, or procured by the Infrastructure Capital Asset Reassignment Enterprise Fund. The assets of the fund will be maintained as a separate account segregated from all other funds of the State, the administrator and the non-State public employers participating in State-administered retirement systems. The fund will be legally independent and separate, regardless of its treatment for tax, accounting, reporting, securities law, or other purposes. No person will use or authorize the use of the assets in the fund, or the investment earnings, for any purpose other than for the maximization of the value of the assets in the fund, including meeting or exceeding the level of service required to operate the asset pursuant to State and federal law and regulations for the safety of the public and the environment, and for the benefit of members and retirees in the State-administered retirement systems, and for the reasonable costs of administering the fund. The ICARE Fund will have a board of five members as follows: a member of the New Jersey Infrastructure Bank, a member of the Division of Investments or their designee, who will serve ex officio, and three members of the public appointed by the Governor. Members appointed by the Governor should have experience and expertise in ERISA law and laws governing public pension plans, experience and expertise in pension finance or experience and expertise in the construction trades. Each public member will be appointed for a term of three years, with staggered terms. Members will remain active until their successor is qualified. The chairperson will be determined by the Governor and the director of the Division of Investment will serve as treasurer of the board and as vice chairperson of the board. The position of secretary will be elected from among the three public members of the board. The term for secretary will be three years. The board will be constituted as an instrumentality of the State exercising public and essential governmental functions, and the exercise by the board of the powers conferred by this bill will be deemed and held to be an essential governmental function of the State. The members of the ICARE Fund will serve without compensation, but the fund will reimburse the members for actual and necessary expenses incurred in the performance of their duties The bill establishes an advisory committee to the board comprised of each municipality or county which is a benefitting public entity. The advisory committee members will serve for two years. Members of the advisory committee will be appointed by the secretary of the board upon the recommendation from the executive of the public entity. All public information that is distributed to board members relative to board meetings will also be provided simultaneously to the advisory committee members. The purpose of the advisory committee is to provide the board with advice and information relevant to local systems. The advisory committee will not have any voting or veto authority over the board. The advisory committee members will receive no compensation. The fund administrator will have a fiduciary duty to maximize the value of an asset over the long-term, to the holders of certificates of trust issued pursuant to this bill. The administrator will ensure that each asset meets or exceeds the level of service required to operate the asset pursuant to State and federal law and regulations for the safety of the public and the environment. The bill provides that a public entity may convey to the fund an asset held by the public entity. The conveyance will be governed by a transfer agreement, which will be proposed by the administrator, in consultation with the board, and approved by the public entity. Only that portion of the conveyed asset that is net of financing costs and amounts deposited into the investment account or other distributions made to, or on behalf of the public entity will be evidenced by certificates of trust and credited to the holding account of the Common Pension Fund as provided by this bill. Asset contributions on behalf of the public entity and the fund's asset distributions will be deposited in the investment account of the Common Pension Fund. The State-administered retirement systems will not be required or permitted to pay any expenses incurred in connection with the conveyance of an asset pursuant to this act. An asset proposed for conveyance to the fund will be valued by an independent valuation agent and be revalued periodically. The valuation agent will issue a report representing its opinion as to the valuation of the asset in accordance with an asset conveyance. An asset conveyance will not be effectuated until after the report has been issued and both the fund manager, upon approval from the board, and the public entity or non-public entity accept the proposed value. If either rejects the proposed value, the conveyance will not be effectuated, and any written agreement for the conveyance of an asset will be void. The bill amends the "Water Infrastructure Protection Act," to allow a municipality with a water or wastewater asset under emergent conditions to include conveyance of the asset to the fund as an option under that law. The bill appropriates $20,000,000 to the ICARE fund for the operating and administrative expenses of the fund and for the performance by the administrator and the board of their responsibilities.

AI Summary

Committee Categories

Troy Singleton (D)*, 

Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee (on 01/29/2024)

Official Document