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Bill

A 3523

Revises membership of New Jersey Educational Facilities Authority.*

2026-2027 Regular Session Introduced by Linda Carter and 1 co-sponsor

Reforms NJEFA governance by specifying a seven-member board, staggered five-year terms, defined leadership, bonding safeguards, and clearer conflict-of-interest rules.

Received in the Senate, Referred to Senate Higher Education Committee
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Bill Summary · A 3523

Bill Summary: A 3523 (Session 222) – New Jersey Educational Facilities Authority Membership

Overview

  • Jurisdiction: New Jersey
  • Title: Revises membership of the New Jersey Educational Facilities Authority
  • Purpose: Adjust the composition and governance of the New Jersey Educational Facilities Authority (NJEFA), clarifying appointment processes, term structure, and certain governance safeguards.

What the bill does (Key Provisions)

  1. Establishment and Independence (a)

    • Reaffirms that NJEFA is a public body corporate and politic, independent of direct supervision by the Department of the Treasury.
    • Creates explicit recognition of the authority as an instrumentality performing essential governmental functions.

  2. Membership Composition (b)

    • NJEFA shall consist of seven members:
      • Two ex officio members: the Secretary of Higher Education and the State Treasurer (or their designated deputies).
      • Three Governor-appointed citizens (with Senate advice and consent) serving 5-year terms.
      • One additional citizen appointed by the Governor from a recommendation of the Speaker of the General Assembly (5-year term).
      • One additional citizen appointed by the Governor from a recommendation of the Senate President (5-year term).
    • Term staggering: initial terms arranged by the Governor so that one expires on April 30 in each successive year after appointment.
    • Eligibility for reappointment is allowed.

  3. Removal (c)

    • Governors may remove a Governor-appointed member for cause after a public hearing.

  4. Compensation (d)

    • Members serve without compensation but may be reimbursed for necessary expenses.

  5. Leadership and Staffing (e)

    • Annual election of a chairman and vice chairman from among members, with terms through April 30 of the next year.
    • Authority to hire staff and consultants, with the ability to set qualifications, duties, and compensation (exemption from Civil Service rules).

  6. Powers and Quorum (f)

    • Majority of the total authorized membership (not fewer than three) constitutes a quorum.
    • Decisions require a majority of those present, subject to any higher quorum requirements in bylaws.
    • Vacancies do not impair the ability of a quorum to act.

  7. Bond Security (g)

    • Before bond issuance, officers and key money-handling personnel must be covered by a surety bond of at least $25,000 per person.
    • Bonds require Attorney General approval and must be filed with the Secretary of State.
    • Bond costs are borne by the authority.

  8. Conflict of Interest (h)

    • Clarifies that serving as a trustee, director, officer, or employee of a participating institution does not create a conflict of interest for NJEFA membership, provided the member abstains from deliberation and voting on matters related to that institution.

  9. Minutes and Governor Veto Power (i)

    • True copies of meeting minutes must be delivered to the Governor.
    • Actions do not take effect until 10 days (excluding weekends and holidays) after delivery, to allow the Governor to veto.
    • If the Governor approves within the period, the action stands; if not vetoed, it becomes effective.
    • The Governor’s approval rights do not diminish the authority’s covenants with bondholders.

Affected Parties

  • New Jersey Educational Facilities Authority (NJEFA): changes to board composition, terms, governance, and protections.
  • Participating institutions: allowed to have their trustees/directors serve on NJEFA with abstention on related matters to avoid conflicts.
  • State government: Governor, Speaker of the General Assembly, and Senate President influence appointments (recommendation roles).
  • Bondholders: governance and bond covenants preserved, with governor’s veto mechanism affecting actions.

Timeline and Process

  • Effective Date: Immediate upon enactment.
  • Membership terms: Five-year terms with staggered expirations beginning after appointment.
  • Annual leadership elections: Each year after April 30.

Practical Impact

  • The bill formalizes a seven-member board with a defined mix of ex officio and gubernatorial appointments and introduces staggered terms for continuity.
  • It enhances governance and accountability (public hearings for removal, annual leadership elections, annual reporting to the Governor, and bonding safeguards).
  • It clarifies conflicts of interest while enabling representation from major legislative leadership for appointments.
  • It preserves the authority’s core function of issuing and managing educational facilities bonds, with explicit bonding requirements and protections for bondholders.

Note: The act is aligned with prior related legislation (referenced as P.L.2021, c.415) and includes modernized governance provisions.

Compiled from official sources — confirm details with the bill’s official record.

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