summary
Introduced
01/13/2026
01/13/2026
In Committee
01/13/2026
01/13/2026
Crossed Over
Passed
Dead
Introduced Session
2026-2027 Regular Session
Bill Summary
This bill prohibits the State Treasurer from authorizing new State debt through appropriations-backed bonds unless: (1) there is no available balance in the "New Jersey Debt Defeasance and Prevention Fund"; or (2) the present value of debt service per $1,000 of face value of appropriations-backed bonds being issued is less than the present value of debt service per $1,000 of face value of appropriations-backed bonds that could be retired or defeased though the "New Jersey Debt Defeasance and Prevention Fund." When the fund has an unexpended and uncommitted balance, the bill requires the State Treasurer to immediately notify the Joint Budget Oversight Committee, or its successor, whenever the State Treasurer is facilitating the issuance of new appropriations-backed bonds and would be required to certify that State bonds with higher amounts of debt service that could otherwise be retired or defeased do not remain outstanding, or that the issuance of new State debt is in compliance with applicable law. The bill is intended to address instances where the State Treasurer has been authorizing new State debt with payment schedules beginning a decade into the future, declining to pay back debt with high rates of interest despite availability of funds, and choosing to defease debt with lower interest rates. By regulating the issuance of new State debt in accordance with the provisions of this bill, the State can ensure responsible management of its debt obligations.
AI Summary
This bill restricts the State Treasurer's ability to authorize new State debt through appropriations-backed bonds, which are bonds repaid from specific government funds rather than general tax revenues. The Treasurer can only issue these bonds if either the "New Jersey Debt Defeasance and Prevention Fund" (a dedicated fund for paying off or preventing debt) has no available money, or if the cost of servicing the new debt is cheaper than the cost of retiring or preventing existing debt using the fund. If the fund has money, the Treasurer must inform the Joint Budget Oversight Committee (a legislative group that reviews budget matters) whenever new appropriations-backed bonds are being issued, and must confirm that no more expensive outstanding State bonds could be paid off with the fund's money or that the new debt issuance complies with the law. This measure aims to prevent situations where the State issues new debt with distant payment dates and high interest rates, even when funds are available to pay off existing, more costly debt.
Committee Categories
Budget and Finance
Sponsors (1)
Last Action
Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 01/13/2026)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2026/S2535 |
| BillText | https://pub.njleg.gov/Bills/2026/S3000/2535_I1.HTM |
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