Section 34:1B-21.39 - "Charter School and Renaissance School Project Facilities Loan Program" establisheda. The authority shall establish and administer a loan program to be known as the "Charter School and Renaissance School Project Facilities Loan Program" to provide eligible borrowers with a loan, including, but not limited to, subordinate loans, to undertake or facilitate school facilities projects for non-profit charter schools and non-profit renaissance school projects located in an SDA district.b.(1) The authority, in consultation with the department, shall annually review the applications for school facilities projects submitted pursuant to subsection c. of this section and may approve applications for loans on a quarterly basis. The authority, in consultation with the department, shall consider the critical need of a school facilities project in making a determination on a submitted application. At a minimum, the criteria and methodology for determining critical need shall prioritize, in order from highest to lowest priority: (a) school facilities projects that address critical operational building needs related to health and safety issues and program mandates, which projects shall include, in order from highest to lowest priority: (i) essential building systems upgrades, including finishing work and the repair or replacement of structural, mechanical, heating and cooling, electrical, and plumbing systems;(ii) building skin, including the repair or replacement of roofs, windows, and masonry;(iii) improvements or other modifications and alterations needed to address appropriate building code issues;(iv) upgrades required for a school facility to meet the standards of the "Americans with Disabilities Act of 1990" (42 U.S.C. s. 12101 et seq.);(v) hazardous material abatement and required refinishing work, which hazardous material may include radon, lead, and asbestos;(vi) security and communication systems upgrades;(vii) technology infrastructure upgrades, which shall not include technology equipment with a useful life of less than five years; and(viii) site drainage related to the remediation of an existing issue and not in conjunction with new construction;(b) new construction projects of a charter school or renaissance school project offering programs within grade levels permitted by the school's charter and within the municipality in which the charter school or renaissance school project's charter has permitted them to operate; and(c) major renovation and rehabilitation projects, including projects that seek to expand the capacity of a charter school or renaissance school project facility used for educational purposes of a charter school or renaissance school project that operates grade levels permitted within the school's charter and within the municipality in which the charter school or renaissance school project's charter has permitted them to operate.(2) In the event that a school facilities project for which an eligible borrower is seeking a loan pursuant to this section is requested for a leased facility in which the charter school or renaissance school project is the sole lessee, the eligible borrower shall submit the lease agreement or lease agreement addendum as part of the application. The lease agreement or lease agreement addendum shall demonstrate that the lessor of the facility is a non-profit entity or government agency and that the term of the lease is no less than 10 years, inclusive of all lease renewal options. An eligible borrower shall not receive a loan pursuant to this section in the event that the school facilities project for which the eligible borrower is seeking funds is requested for a leased facility in which the lessor is a for-profit entity.(3) In the event that a school facilities project for which an eligible borrower is seeking a loan pursuant to this section is requested for a leased facility in which the charter school or renaissance school project is not the only lessee, the eligible borrower shall not seek a loan for any costs related to the improvement, alteration, modernization, renovation, reconstruction, maintenance, or capital maintenance of all or any part of the shared spaces of the facility, which shared spaces shall include elevators, stairs, roofs, and common areas.c. An eligible borrower seeking a loan for a school facilities project pursuant to the provisions of this section shall apply to the authority and department in a form and manner prescribed by the authority in consultation with the department. In the case of a charter school or renaissance school project established after the effective date of P.L. 2023, c. 311 (C.18A:7G-5b et al.), the authority shall not approve a loan for a school facilities project until after the charter school's first renewal pursuant to section 17 of P.L. 1995, c. 426 (C.18A:36A-17) or after the renaissance school project's first renewal under section 10 of P.L. 2011, c. 176 (C.18A:36C-10) or of a charter school or renaissance school project placed on probationary status by the Commissioner of Education. In addition to any other information the authority and department deem appropriate, the application shall require the eligible borrower to submit a detailed plan of the anticipated use of loan proceeds, full project costs, and all sources of funding.d.(1) The authority and department may approve applications for loans on a quarterly basis, subject to the availability of funds in the loan fund established pursuant to section 33 of P.L. 2023, c. 311 (C.34:1B-21.40). Upon approval of the application, the authority shall provide loans with an interest rate that is equal to the lower of one-half of the Triple A Bond Rate available on the date of loan approval or 1.75 percent to eligible borrowers seeking to undertake school facilities projects for charter schools and renaissance school projects located in SDA districts. The terms of the loan and the repayment schedule shall be established by the authority.(2) All loan repayments, and interest thereon, shall be deposited by the authority in the loan fund established pursuant to section 33 of P.L. 2023, c. 311 (C.34:1B-21.40), for use in the manner provided for in this section.e.(1) The authority shall require, as a condition of a loan for a school facilities project pursuant to the provisions of sections 30 through 34 of P.L. 2023, c. 311 (C.34:1B-21.37 through 34:1B-21.41) on a school facility owned by the charter school or renaissance school project, that, notwithstanding the provisions of section 7 of P.L. 2013, c. 149 (C.18A:36C-16) or any other law, rule, or regulation to the contrary, in the event the authorization to operate a charter school is revoked, not renewed, or surrendered or the authorization to operate a renaissance school project is terminated or expires for any reason, and no substitute or replacement owner or operator for that charter school or renaissance school project has been approved prior to the date that the operations of the charter school or renaissance school project cease, the title to the charter school or renaissance school project shall revert to another eligible borrower or the Department of the Treasury, except as provided pursuant to paragraph (2) of this subsection, for consideration in an amount calculated as follows: (a) if the principal and interest due on any outstanding debt used to finance a school facilities project pursuant to the provisions of sections 30 through 34 of P.L. 2023, c. 311 (C.34:1B-21.37 through 34:1B-21.41) of a charter school or renaissance school project is equal to or greater than the fair market value of the charter school or renaissance school project, as determined by a certified appraiser agreed to by the board of education of the district in which the charter school or renaissance school project is located and the owner of the charter school or renaissance school project, an eligible borrower or the Department of the Treasury shall assume any outstanding debt used to finance the school facilities project of the charter school or renaissance school project, and thereafter an eligible borrower or the State shall be legally obligated for the payment thereof; or(b) if the fair market value of the charter school or renaissance school project is greater than the amount of the principal and interest due on the outstanding debt used to finance a school facilities project pursuant to the provisions of sections 30 through 34 of P.L. 2023, c. 311 (C.34:1B-21.37 through 34:1B-21.41) of a charter school or renaissance school project, the State shall pay to the owner of the charter school or renaissance school project the fair market value of the charter school or renaissance project, provided that, to the extent that any debt used to finance the school facilities project pursuant to the provisions of sections 30 through 34 of P.L. 2023, c. 311 (C.34:1B-21.37 through 34:1B-21.41) of a charter school or renaissance school project is then outstanding, the owner of the charter school or renaissance school project shall utilize the funds received from the State pursuant to this subparagraph to retire the outstanding debt. If the school district in which the charter school or renaissance school project is located does not exercise its right of first refusal established pursuant to paragraph (2) of this subsection, the Department of the Treasury may sell the property to another charter school or renaissance school project or another eligible borrower.(2) The authority shall require as a condition of a loan for a school facilities project pursuant to the provisions of sections 30 through 34 of P.L. 2023, c. 311 (C.34:1B-21.37 through 34:1B-21.41) on a school facility owned by the charter school or renaissance school project that, notwithstanding the provisions of section 7 of P.L. 2013, c. 149 (C.18A:36C-16) or any other law, rule, or regulation to the contrary, in the event the authorization to operate a charter school is revoked, not renewed, or surrendered or the authorization to operate a renaissance school project is terminated or expired for any reason, and no substitute or replacement owner or operator for that charter school or renaissance school project has been approved prior to the date that the operations of the charter school or renaissance school project cease, the board of education of the district in which the charter school or renaissance school project is located shall have the right of first refusal of the title to the charter school or renaissance school project school facility. If the title transfers to the board of education, the State shall assume, pursuant to subparagraph (a) of paragraph (1) of this subsection, or pay, any outstanding debt used to finance a school facilities project of the charter school or renaissance school project pursuant to the provisions of sections 30 through 34 of P.L. 2023, c. 311 (C.34:1B-21.37 through 34:1B-21.41).f. The authority, in consultation with the department, shall promulgate within 12 months following the date of enactment of P.L. 2023, c. 311 (C.18A:7G-5b et al.), pursuant to the "Administrative Procedures Act," P.L. 1968, c. 410 (C.52:14B-1 et seq.), such rules and regulations as may be necessary to implement the provisions of this section, which rules and regulations shall at a minimum establish: (1) the process for review and approval of charter school and renaissance school project school facilities projects; and(2) the process for the reversion to the board of education of the district in which the charter school or renaissance school project is located, an eligible borrower, or the State of a school facilities project pursuant to subsection e. of this section, which shall be consistent with the requirements of section 7 of P.L. 2013, c. 149 (C.18A:36C-16).g. Not less than the prevailing wage rate determined by the Commissioner of Labor and Workforce Development pursuant to the provisions of P.L. 1963, c. 150 (C.34:11-56.25 et seq.) shall be paid to workers employed in the performance of construction contracts in connection with any charter school or renaissance school project school facilities project undertaken pursuant to sections 30 through 34 of P.L. 2023, c. 311 (C.34:1B-21.37 through 34:1B-21.41).h. The authority shall not approve a second or subsequent loan pursuant to the provisions of the loan program to an eligible borrower who is in arrears or default of a prior loan issued pursuant to the provisions of the loan program.i. In the event that the aggregate amount of a loan provided pursuant to this section exceeds $5,000,000 for a school facilities project approved pursuant to the provisions of sections 30 through 34 of P.L. 2023, c. 311 (C.34:1B-21.37 through 34:1B-21.41), the authority shall require as a condition of the loan that the school facilities project be subject to the provisions of a project labor agreement.Added by L. 2023, c. 311, s. 32, eff. 1/16/2024.