Terms Used In New Jersey Statutes 18A:66-86

  • Amortization: Paying off a loan by regular installments.
  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • real property: include lands, tenements and hereditaments and all rights thereto and interests therein. See New Jersey Statutes 1:1-2
  • State: extends to and includes any State, territory or possession of the United States, the District of Columbia and the Canal Zone. See New Jersey Statutes 1:1-2
If the property is rented or leased to the state, it shall be on terms calling for level periodic rental payments, not more than one year apart, in such amounts as will amortize the total actual cost of the investment, including cost of land, construction, improvement and supervision of construction, over a period of 20 years from the beginning of the term of its first rental, together with income to be derived therefrom for the benefit of the fund at the rate of 4% per annum on the depreciated value of the asset which shall be its total actual cost to the fund less a depreciation allowance equal in amount to the aggregate sums received toward amortization of the investment. Such portion of the rentals as shall exceed the amounts received toward amortization shall be treated as investment income.

It is the purpose of this section to provide for the accounting basis upon which the real property investment shall be carried and depreciated and for the treatment, as between capital and income, of the amounts received for the use of the property by way of rental, in order to maintain the integrity and actuarial soundness of the funds established by this article.

In order to carry out the purposes of this article such rental arrangement or lease may include, on behalf of the state, permission to construct a building or buildings, which will constitute the real property in which the investment is made, upon lands owned by the state, and to transfer title to such lands to the said teachers’ pension and annuity fund.

L.1967, c.271.

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