A4734

An Act concerning electronic tax sales and revising various parts of the statutory law.

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

1. Section 1 of P.L.2001, c.160 (C.54:5-19.1) is amended to read as follows:

1. a. Any provision of law to the contrary notwithstanding, a municipality may satisfy requirements of the "tax sale law," R.S.54:5-1 et seq., electronically through the use of any nationally recognized electronic municipal tax lien service, including, but not limited to, electronic publication of tax lien sale notices, electronic auctions, electronic payment for purchased liens, digital signature validation, or any other matters necessary for the conduct of electronic tax lien sales in accordance with rules, regulations and procedures promulgated by the Director of the Division of Local Government Services in the Department of Community Affairs in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

b. Any tax sale notices required to be sent to a property owner or lienholder shall continue to be made by mail pursuant to the "tax sale law," R.S.54:5-1 et seq.

c. [The director may authorize "electronic tax lien sale" pilot programs on a case-by-case basis upon application of individual municipalities prior to the director's promulgation of rules, regulations and procedures pursuant to subsection a. of this section.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

(cf: P.L.2001, c.160, s.1)

2. R.S.54:5-25 is amended to read as follows:

54:5-25. After completing the list or sections thereof the collector shall give public notice of the time and [place] physical or electronic location of sale, stating the description of the several lots and parcels of land and the owner's name as contained in the list, together with the total amount due thereon respectively as computed to the date of tax sale and stating in substance that the respective lands will be sold to make the amounts severally chargeable against them on said date as computed in the list, together with interest to the date of sale, and the costs of sale. No other statements need be included in the notice.

(cf: P.L.1991, c.75, s.45)

3. R.S.54:5-28 is amended to read as follows:

54:5-28. At the time and [place] physical or electronic location fixed for the sale and from time to time thereafter the collector may adjourn the sale in his discretion, either for want of bidders or at the request of persons interested, or for any other reason satisfactory to him, from day to day or from week to week, on making public announcement thereof, and noting the adjournment on the list. Adjournments shall not be made for more than eight weeks in all, after which new public notice shall be given as hereinbefore provided if further sale is to be made.

(cf: R.S.54:5-28)

4. Section 1 of P.L.1962, c.161 (C.54:5-30.1) is amended to read as follows:

1. Whenever the governing body of a municipality shall by resolution determine that a particular parcel or parcels of real estate, scheduled to be sold at public auction pursuant to the tax sale law, would be useful for a public purpose, it may authorize and direct a municipal official to attend the auction or participate electronically, as applicable, and bid for such parcel or parcels at such sale on behalf of the municipality in the same manner as any other bidder.

(cf: P.L.1962, c.161, s.1)

5. R.S.54:5-31 is amended to read as follows:

54:5-31. At the time and [place] physical or electronic location specified in the notice of sale, or adjournment, the collector shall sell at public auction each parcel of real property which has been so advertised, upon which the municipal liens remain unpaid, unless an error is found requiring readvertisement. The sale shall be made for the amount for which the parcel was advertised, unless that amount is found to be in excess of the correct amount, and then for the correct amount together with the interest thereon unless such interest has already been included in the notice of sale and the costs of sale.

(cf: P.L.1991, c.75, s.46)

6. This act shall take effect immediately.

STATEMENT

In 2001, the Legislature enacted P.L.2001, c.160 (C.54:5-19.1), directing the Division of Local Government Services (DLGS) in the Department of Community Affairs to permit the operation of municipal tax sales electronically as a pilot program. That legislation required each interested municipality to apply to DLGS prior to initiating electronic tax sale operation.

This bill facilitates the establishment of electronic tax sales by eliminating the pilot program status of such sales, and removing the requirement for municipalities to apply to DLGS prior to establishing an electronic tax sale program.

Illegal collusion at municipal tax sales, identified as a significant problem in recent years, often occurs when bidders personally attend a tax sale, allowing the bidders to easily signal to each other on which properties each intends to bid. Conducting tax sales electronically over the Internet, as facilitated by this bill, has become recognized as an approach to preventing this collusion. When tax sales are operated electronically, bidders do not know how many other bidders are participating, and cannot easily communicate with the other bidders, making collusion more difficult. Electronic tax sales also help to expand the number of potential bidders to a nation-wide online network, rather than leaving that number limited to those who can be physically present the day of the tax sale.