Bill Text: NJ A708 | 2016-2017 | Regular Session | Introduced
Bill Title: Requires third-party disbursement service organization that contracts with local government unit or board of education to post bond against failure to meet obligations.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2016-01-27 - Introduced, Referred to Assembly State and Local Government Committee [A708 Detail]
Download: New_Jersey-2016-A708-Introduced.html
STATE OF NEW JERSEY
217th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2016 SESSION
Sponsored by:
Assemblyman JOHN DIMAIO
District 23 (Hunterdon, Somerset and Warren)
Assemblyman THOMAS P. GIBLIN
District 34 (Essex and Passaic)
Assemblyman SCOTT T. RUMANA
District 40 (Bergen, Essex, Morris and Passaic)
Co-Sponsored by:
Assemblymen Diegnan, Bramnick, McKeon, Assemblywomen Vainieri Huttle, N.Munoz, Assemblymen Johnson, Peterson, Caputo, Assemblywoman Handlin, Assemblymen Egan, Rible, Prieto, A.M.Bucco and Space
SYNOPSIS
Requires third-party disbursement service organization that contracts with local government unit or board of education to post bond against failure to meet obligations.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning third-party disbursement services and amending P.L.2000, c.126.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 38 of P.L.2000, c.126 (C.52:27D-20.1) is amended to read as follows:
38. Notwithstanding the provisions of the "Local Fiscal Affairs Law," N.J.S.40A:5-1 et seq., or any other law, rule, or regulation to the contrary, the Local Finance Board, in consultation with the Commissioner of Education, may adopt rules and regulations permitting local government units and boards of education to contract with third-party disbursement service organizations in order to make payments and execute financial transactions for those purposes and under such conditions as permitted by the Local Finance Board. All third-party disbursement service organizations that contract with local government units and boards of education pursuant to this section shall be required to post a bond, in an amount and with sureties approved by the Local Finance Board, with the local government unit or board of education, said bond to be forfeited in the event that the third-party disbursement service organization fails to make payments or execute financial transactions, including federal or State tax deposits, on behalf of the local government unit or board of education.
(cf: P.L.2000, c.126, s.38)
2. This act shall take effect immediately.
STATEMENT
This bill would require all third-party disbursement service organizations that contract with local government units and boards of education to make payments and execute financial transactions for those purposes to post a bond, in an amount and with sureties approved by the Local Finance Board, with the local government unit or board of education. The bond would be forfeited in the event that the third-party disbursement service organization fails to make payments or execute financial transactions, including federal or State tax deposits, on behalf of the local government unit or board of education.
This bill responds to concerns
raised in the case of Ameripay, a third-party disbursement service organization
used by
municipalities as well as other public entities in New Jersey. Ameripay is
currently under investigation for fraud by the Securities and Exchange
Commission and the Federal Bureau of Investigation. It is alleged that the
principals of Ameripay failed to meet payroll obligations of Ameripay clients
and also failed to make in excess of $8 million in federal and State tax
deposits on behalf of clients.
