S1400

An Act concerning local unit and authority budgets and supplementing Title 40A of the New Jersey Statutes.

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

1. a. The director shall not approve a budget pursuant to N.J.S.40A:4-10 until the governing body has provided the director with a report outlining any lawsuits filed by or against the local unit which the governing body expects will not be covered or defended by a liability insurer and in which the governing body expects to expend more than $50,000 in legal fees or settlement costs. The report shall be in a format approved by the director and shall include, but not be limited to, the following information:

The number of lawsuits filed by the local unit, with an explanation of the nature of each lawsuit, and, when appropriate, the dollar amount awarded to the local unit, unless the amount is rendered confidential by court order, during the reporting period;

The number of lawsuits filed against the local unit, with an explanation of the nature of each lawsuit, and, when appropriate, the dollar amount awarded to the plaintiff, unless the amount is rendered confidential by court order, during the reporting period;

The number of lawsuits that were settled out of court, with the dollar amounts of each settlement, during the reporting period;

The number of pending lawsuits, with an explanation of the nature of each lawsuit, during the reporting period;

The name of the attorney or law firm that represented the local unit in each lawsuit, and the dollar amount paid to the attorney or law firm for representation, during the reporting period;

An explanation of the manner of billing used by the attorney or law firm representing the local unit in each lawsuit, indicating whether the attorney or law firm received a set fee per hour or arranged another manner of billing, during the reporting period;

An indication whether the local unit is self-insured or contracts its liability out to an insurance provider, during the reporting period.

b. The director shall make a copy of each report available on the division’s website for at least one year.

c. For the purposes of this section, “reporting period” means the previous January 1 to December 31 for any local unit operating under a calendar fiscal year or the previous July 1 to June 30 for any local unit operating under a State fiscal year.

2. a. The director shall not approve a budget pursuant to N.J.S.40A:5A-10 until the authority has provided the director with a report outlining any lawsuits filed by or against the authority which the authority expects will not be covered or defended by a liability insurer and in which the authority expects to expend more than $50,000 in legal fees or settlement costs. The report shall be in a format approved by the director and shall include, but not be limited to, the following information:

The number of lawsuits filed by the authority, with an explanation of the nature of each lawsuit, and, when appropriate, the dollar amount awarded to the authority, unless the amount is rendered confidential by court order, during the reporting period;

The number of lawsuits filed against the authority, with an explanation of the nature of each lawsuit, and, when appropriate, the dollar amount awarded to the plaintiff, unless the amount is rendered confidential by court order, during the reporting period;

The number of lawsuits that were settled out of court, with the dollar amounts of each settlement, during the reporting period;

The number of pending lawsuits, with an explanation of the nature of each lawsuit, during the reporting period;

The name of the attorney or law firm that represented the authority in each lawsuit, and the dollar amount paid to the attorney or law firm for representation, during the reporting period;

An explanation of the manner of billing used by the attorney or law firm representing the authority in each lawsuit, indicating whether the attorney or law firm received a set fee per hour or arranged another manner of billing, during the reporting period;

An indication whether the authority is self-insured or contracts its liability out to an insurance provider, during the reporting period.

b. The director shall make a copy of each report available on the division’s website for at least one year.

c. For the purposes of this section, “reporting period” means the twelve month period preceding the submission of the budget for approval.

3. This act shall take effect immediately but shall not apply to any local unit or local authority until that entity’s first full fiscal year next following enactment.

STATEMENT

This bill provides that the Director of the Division of Local Government Services in the Department of Community Affairs shall not approve a budget pursuant to the “Local Budget Law,” N.J.S.40A:4-1 et seq., or the “Local Authorities Fiscal Control Law,” P.L. 1983, c. 313 (C.40A:5A-1 et seq.), until the local unit or authority has provided the director with a report outlining lawsuits to which it is a party and which the local unit or authority expects will not be covered or defended by a liability insurer and in which the local unit or authority expects to expend more than $50,000 in legal fees or settlement costs. The report shall be in a format approved by the director and shall include, but not be limited to, the following information:

The number of lawsuits filed by the local unit or authority, with an explanation of the nature of each lawsuit, and, when appropriate, the dollar amount awarded to the local unit or authority, unless the amount is rendered confidential by court order, during the reporting period;

The number of lawsuits filed against the local unit or authority, with an explanation of the nature of each lawsuit, and, when appropriate, the dollar amount awarded to the plaintiff, unless the amount is rendered confidential by court order, during the reporting period;

The number of lawsuits that were settled out of court, with the dollar amounts of each settlement, during the reporting period;

The number of pending lawsuits, with an explanation of the nature of each lawsuit, during the reporting period;

The name of the attorney or law firm that represented the local unit or authority in each lawsuit, the dollar amount paid to the attorney or law firm for representation, and an explanation of the attorney’s billing practice, indicating whether the attorney or law firm received a set fee per hour or arranged another manner of billing, during the reporting period;

An indication whether the local unit or authority is self-insured or contracts its liability out to an insurance provider, during the reporting period.

The bill provides that the Director of the Division of Local Government Services shall make a copy of each report available on the division’s website for a period of at least one year.

For the purposes of this bill, “reporting period” means the previous January 1 to December 31 for any local unit operating under a calendar fiscal year, or the previous July 1 to June 30 for any local unit operating under a State fiscal year, or the twelve month period preceding the submission of the budget for approval for any local authority.