New Jersey Revised Statutes § 40:37c-10 - Nonliability Of State, Political Subdivision Thereof, County Or Municipality; Guarantee Of Rights And Remedies Of Bondholders

40:37C-10. Nonliability of state, political subdivision thereof, county or municipality; guarantee of rights and remedies of bondholders
Bonds issued under the provisions of this act shall not be deemed to constitute a debt or liability of the State or of any political subdivision thereof, but shall be payable solely from the funds herein provided therefor. The issuance of bonds under the provisions of this act shall not, directly, indirectly or contingently, obligate the State or any political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment. Nothing in this act shall be construed to authorize an agency to create a debt of the State or any county or municipality within the meaning of the Constitution or statutes of New Jersey and all bonds issued by such authority pursuant to the provisions of this act, unless funded or refunded pursuant to this act, are payable and shall state that they are payable solely from the funds pledged for their payment in accordance with the resolution authorizing their issuance or in any indenture executed as security therefor. The State, county, and municipality shall not in any event be liable for the payment of the principal of or interest or premiums, if any, on any bonds of an authority or for the performance of any pledge, obligation or agreement of any kind whatsoever which may be undertaken by such authority. No breach by an authority of any such pledge, obligation or agreement may impose any pecuniary liability upon the State, county or municipality or any charge upon their general credit or against their taxing power.

The State, however, does pledge and agree with the holders of any bonds issued under this act that it will not limit or alter the rights hereby vested in any authority to fulfill the terms of any agreements made with the holders thereof consistent herewith, or in any way impair the rights and remedies of such holders until such bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses for which the authority is liable in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged. Any authority is authorized to include this pledge and agreement of the State in any agreement it may make with the holders of such bonds.

L.1973, c. 376, s. 10, eff. Jan. 9, 1974.

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Last modified: October 11, 2016