Enourato v. N.J. Building Auth

In Enourato v. N.J. Building Auth., 90 N.J. 396, 399, 448 A.2d 449 (1982), the Court upheld the New Jersey Building Authority Act, N.J.S.A. 52:18A-78.1 et seq., which established the New Jersey Building Authority to construct and operate state office facilities. To fund construction, the act authorized the Building Authority to issue up to $ 250,000,000 in bonds. However, the act expressly provided, and the bonds state on their face, that the debt is that of the Building Authority and disclaims any State liability. Ibid. To repay the bonds the Building Authority leases the constructed facilities to the State for amounts specifically calculated to satisfy the Building Authority's bond obligations. Id. at 402, 448 A.2d 449. In other words, the State pays the bonded indebtedness of the Building Authority, however, such payment is subject to appropriation by the Legislature which is not legally obligated by the lease. Ibid.