S2033

An Act authorizing certain local units to adopt policies for the payment of certain claims through the use of standard electronic funds transfer technologies, 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. Notwithstanding any laws, rules, or regulations to the contrary, the governing body of a local unit may adopt policies, by ordinance or resolution, as appropriate, for the payment of claims pursuant to N.J.S.40A:5-17, N.J.S.18A:19-2, or other applicable law, through the use of one or more standard electronic funds transfer technologies in lieu of payment through the use of signed checks or warrants.

b. (1) Any policy adopted pursuant to subsection a. of this section shall explicitly list the forms of standard electronic funds transfer technologies that may be used by that local unit.

(2) A policy adopted pursuant to subsection a. of this section shall designate the chief financial officer of the local unit as being responsible for the oversight and administration of the disbursement policy and associated systems. The chief financial officer shall document and implement internal controls sufficient to ensure safe and proper use of the system and mitigate the potential for fraud and abuse.

c. As used in this section:

“Chief financial officer” means the official designated by the governing body to be responsible for the proper administration of the finances of the local unit under any statutes and such rules and regulations promulgated by any State agency as may pertain to the financial administration of the local unit.

“Governing body” means the board, body, or administrator, by whatever name it may be known, having charge of the finances of the local unit.

“Local unit” means a contracting unit as defined by the “Local Public Contracts Law,” P.L.1971, c.198 (C.40A:11-1 et seq.), a board of education as defined by the “Public School Contracts Law,” N.J.S.18A:18A-1 et seq., and a county college as defined by the “County College Contracts Law,” P.L.1982, c.189 (C.18A:64A-25.1 et seq.).

“Standard electronic funds transfer technologies” include, but are not limited to, wire transfers, automated clearing house transactions, and debit cards.

d. (1) The Local Finance Board, in consultation with the Commissioner of Education, may adopt rules and regulations for the purpose of clarifying the implementation and use of standard electronic funds transfer technologies.

(2) For the purposes of this section, a county college shall be subject to the rules and regulations of the Secretary of Higher Education.

2. This act shall take effect immediately.

STATEMENT

This bill authorizes certain local units to adopt policies for the payment of certain claims through the use of standard electronic funds transfer technologies. The purpose of this bill is to simplify the procedures that must be followed by local units seeking to implement the use of modern payment methods in place of more costly paper alternatives.

Under the bill, the governing body of a local unit may adopt policies, by ordinance or resolution, as appropriate, for the payment of claims pursuant to N.J.S.40A:5-17, N.J.S.18A:19-2, or other applicable law, through the use of one or more standard electronic funds transfer technologies in lieu of payment through the use of signed checks or warrants. The bill requires any policies adopted by local units to explicitly list the forms of standard electronic funds transfer technologies that may be used by that local unit.

In addition, the bill requires policies adopted by local units for the payment of claims through standard electronic funds transfer technologies to designate the chief financial officer of the local unit as being responsible for the oversight and administration of the disbursement policy and associated systems. In furtherance of this duty, the bill requires the chief financial officer to document and implement internal controls sufficient to ensure safe and proper use of the system and mitigate the potential for fraud and abuse.

The bill defines “standard electronic funds transfer technologies” to include, but not be limited to, wire transfers, automated clearing house transactions, and debit cards. A “local unit” is defined to include a contracting unit as defined by the “Local Public Contracts Law,” P.L.1971, c.198 (C.40A:11-1 et seq.), a board of education as defined by the “Public School Contracts Law,” N.J.S.18A:18A-1 et seq., and a county college as defined by the “County College Contracts Law,” P.L.1982, c.189 (C.18A:54A-25.1 et seq.).

The bill authorizes the Local Finance Board, in consultation with the Commissioner of Education, to adopt rules and regulations to clarify the implementation and use of standard electronic funds transfer technologies. The bill provides that a county college is subject to the rules and regulations of the Secretary of Higher Education.