New Jersey-2010-A2019-Introduced

An Act modifying the distribution of aid pursuant to the "Special Municipal Aid Act" and the "Supplemental Municipal Property Tax Relief Act," and amending P.L.1987, c.75 and P.L.1991, c.63.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 6 of P.L.1987, c.75 (C.52:27D-118.29) is amended to read as follows:

6. a. The board shall determine the total amounts of grants and loans, or any combination thereof, to be provided to each eligible municipality and the director shall certify that amount to the State Treasurer and the governing body of the eligible municipality. In the case of loans to an eligible municipality, the board shall set forth the terms of the loan agreement, including whether or not any interest shall be paid and, if so, the rate of that interest. The term of a loan authorized under the provisions of P.L.1987, c.75 (C.52:27D-118.24 et seq.) shall not exceed 10 years.

As a condition of receiving assistance under the provisions of P.L.1987, c.75 (C.52:27D-118.24 et seq.), an eligible municipality shall implement any government, administrative and operational efficiency, and oversight measures necessary for the fiscal recovery of the municipality as recommended by the director and approved by the board, and be subject to management and fiscal audit by the director. An eligible municipality shall certify to the director that it has adopted an ordinance establishing that supplemental compensation paid to any officer or employee for the sum of accumulated unused sick and vacation leave shall not exceed $15,000. The director shall reduce the total amount of financial assistance provided in the next succeeding fiscal year to an eligible municipality that has not enacted such an ordinance by an amount equal to the difference between $15,000 and the amount of each supplemental compensation payment greater than $15,000.

The determination of the board pursuant to P.L.1987, c.75 as to the amount of financial assistance to be paid to an eligible municipality shall be final and conclusive, and there shall be no appeal therefrom nor any review thereof.

b. The director may withhold from an eligible municipality any State aid payments that are disbursed by the Division of Local Government Services if the director finds the municipality has failed to implement fiscal recovery measures approved by the board. Upon withholding an aid payment, the director shall report to the board the circumstances surrounding the reasons for withholding aid. The board shall then hold a hearing to give the eligible municipality an opportunity to explain why such aid payments should not continue to be withheld, and what action the eligible municipality plans to take to implement the fiscal recovery measures. Upon completion of the hearing, the board shall determine if State aid payments should continue to be made to the municipality, establish a schedule for such payments when appropriate, and determine what other actions should be taken.

c. If an eligible municipality receives increased amounts of aid under P.L.1987, c.75 (C.52:27D-118.24 et seq.) after January 1, 1999 and continues to receive such aid for two continuous fiscal years, at the end of each second year, or at such other time the board deems appropriate, the board shall hold a hearing for the eligible municipality to demonstrate why the board should not create a financial review board to oversee the fiscal condition of the eligible municipality. If the board finds that the eligible municipality has successfully implemented fiscal recovery measures or has otherwise acted to improve sufficiently its fiscal condition, the board shall permit the eligible municipality to continue to receive aid without the creation of a financial review board and be subject to such other fiscal recovery conditions the board may place on it; otherwise, the board shall order, by resolution, the creation of a financial review board to operate in accordance with the provisions of subsections b. through d. of section 5 of P.L.1999, c.156 (C.52:27D-118.30a).

(cf: P.L.1999, c.156, s.4)

2. Section 4 of P.L.1991, c.63 (C.52:27D-118.35) is amended to read as follows:

4. The director shall on or before December 31, 1991 and annually thereafter make distributions of "Supplemental Municipal Property Tax Relief Act" extraordinary aid. The director shall annually notify the chief financial officer of each municipality, other than a municipality that received $500,000 or more in regular grant financial assistance in the prior year pursuant to the "Special Municipal Aid Act," P.L.1987, c.75 (C.52:27D-118.24 et seq.), that, in addition to State aid provided pursuant to section 3 of P.L.1991, c.63 (C.52:27D-118.34), the municipality is eligible to apply for "Supplemental Municipal Property Tax Relief Act" extraordinary aid. The municipality may apply to the board for financial assistance pursuant to this section on forms promulgated by the director. The director shall reduce the total amount of financial assistance provided in the next succeeding fiscal year to an eligible municipality that has not certified that it has adopted an ordinance pursuant to paragraph d. of section 5 of P.L.1991, c.63 (C.52:27D-118.36) by an amount equal to the difference between $15,000 and the amount of each supplemental compensation payment greater than $15,000.

(cf: P.L.1999, c.156, s.6)

3. Section 5 of P.L.1991, c.63 (C.52:27D-118.36) is amended to read as follows:

5. The director shall select among the municipalities that have applied for extraordinary aid pursuant to section 4 of P.L.1991, c.63 (C.52:27D-118.35) and shall forward to the board the list of selected municipalities along with the amount of financial assistance to be paid to each municipality. The director in selecting among those eligible municipalities for payment of extraordinary aid shall use criteria which shall include:

a. whether a municipality is experiencing fiscal distress, whether the cost of providing municipal services is extraordinarily high, and whether the tax base is inadequate to meet property tax demands;

b. whether a municipality will use the extraordinary aid for costs associated with activities that improve operations and provide short-term and long-term property tax savings, including but not limited to shared and regionalized services, enhanced tax and revenue collection efforts and other activity that can be demonstrated to meet those requirements; or

c. whether a municipality has incurred other unusual or atypical expenses.

d. An eligible municipality shall certify to the director that it has adopted an ordinance establishing that supplemental compensation paid to any officer or employee for the sum of accumulated unused sick and vacation leave shall not exceed $15,000.

(cf: P.L.1999, c.156, s.7)

4. This act shall take effect immediately.

STATEMENT

This bill would amend the "Special Municipal Aid Act," P.L.1987, c.75 (C.52:27D-118.24 et seq.) and the "Supplemental Municipal Property Tax Relief Act," P.L.1991, c.63 (C.52:27D-118.32 et seq.) to reduce the amount of Special Municipal Aid and extraordinary aid awarded to eligible municipalities that have not set limits on the amount of supplemental compensation paid to employees for unused sick and vacation leave. An eligible municipality would have to certify to either the Local Finance Board (for Special Municipal Aid) or the Director of the Division of Local Government Services (for extraordinary aid) that it has approved an ordinance establishing that supplemental compensation for the total of unused sick and vacation leave shall not exceed $15,000. An eligible municipality that receives Special Municipal Aid or extraordinary aid and does not pass the ordinance would have the amount of its aid award in the next succeeding fiscal year reduced by an amount equal to the difference between $15,000 and the amount of each supplemental compensation payment greater than $15,000.