Governing Laws
The New Jersey Educational Facilities Construction and Financing Act (EFCFA) became law on July 18, 2000 and changed the way that public school facilities are funded in New Jersey. The law established a School Financing and Construction Program at the New Jersey Economic Development Authority (EDA) which became responsible for the financing, designing and constructing all of the school facilities projects in the Abbott school districts, in school districts which receive 55% or more in State funding for education and in school districts that are in Level II State monitoring. In addition, the EDA was given responsibility for providing grants to fund the State share of school facilities projects in school districts that receive less than 55% in state education funding.
In July 2002, gubernatorial Executive Order No. 24 directed the EDA School Financing and Construction Program reconstituted as a new subsidiary corporation called the New Jersey Schools Construction Corporation (SCC) with a Chief Executive Officer appointed to provide a more concentrated focus and streamlined approach to the timely and efficient construction and financing of quality schools in New Jersey. The SCC has been delegated all the responsibilities of the EDA with respect to implementing the Act, other than the EDAs power to incur indebtedness under the Act.
On August 6, 2007, legislation was enacted that established the New Jersey Schools Development Authority ("SDA"), in, but not of, the Department of Treasury, and revised the governance and accountability of the states school construction program established under the Act. At the same time, the new legislation abolished the SCC and transferred all of its functions, responsibilities and employees to the SDA. Again, however, the EDA retained the power to incur indebtedness. The new legislation formalized the SDAs capacity to strategically plan and sequence school construction projects, and implemented safeguards to enable the SDA to acquire land for school sites at fair market, non-inflated, prices. The new law also allowed Abbott districts that have the capabilities to manage a wider range of projects, and empowered the SDA to assist the remaining districts to build those capabilities.
On July 9, 2008, legislation was enacted authorizing $3.9 billion in additional funding for the New Jersey Schools Development Authority (SDA). The legislation allocates $2.9 billion for 31 special-needs districts, known as SDA Districts. The SDA manages and funds 100 percent of eligible project costs in the former Abbott districts. The legislation also allocates $1 billion to leverage construction in New Jerseys Regular Operating Districts (RODs) and includes $50 million for vocational schools. The SDA administers grants for RODs, which manage their own projects.
On January 12, 2010, legislation was enacted that addressed the application of EFCFA to county vocational schools.
On January 16, 2024, P.L. 2023, c. 311. was enacted that makes updates to the operations and funding mechanisms for the New Jersey Schools Development Authority. Among some of the changes, the law codifies SDA’s Kit of Parts and construction standards, strengthens staffing practices, adds additional members to the SDA Board of Directors, places a cap of district paid enhancements on SDA built facilities, and requires a budget appropriation for SDA operational costs.
To view current versions of EFCFA as codified, as well as the statutes creating the SDA, click the links below to view in a PDF file. You will need Adobe Acrobat Reader software to view the document. If you do not have it, the plug-in may be downloaded below.
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