[Fourth Reprint]

ASSEMBLY, No. 2925

STATE OF NEW JERSEY

216th LEGISLATURE

 

INTRODUCED MARCH 20, 2014

 


 

Sponsored by:

Assemblyman  JOSEPH A. LAGANA

District 38 (Bergen and Passaic)

Assemblyman  DECLAN J. O'SCANLON, JR.

District 13 (Monmouth)

Assemblyman  JOHN J. BURZICHELLI

District 3 (Cumberland, Gloucester and Salem)

Assemblyman  CARMELO G. GARCIA

District 33 (Hudson)

Senator  LORETTA WEINBERG

District 37 (Bergen)

Senator  STEVEN V. OROHO

District 24 (Morris, Sussex and Warren)

Senator  JEFF VAN DREW

District 1 (Atlantic, Cape May and Cumberland)

 

Co-Sponsored by:

Assemblyman Diegnan, Assemblywoman Jasey, Assemblyman Eustace, Assemblywoman Lampitt and Senator A.R.Bucco

 

 

 

 

SYNOPSIS

     Allows modernization for the form of disbursement for certain State government and local unit payments to individuals and business entities. 

 

CURRENT VERSION OF TEXT

     As reported by the Senate Budget and Appropriations Committee on January 7, 2016, with amendments.

  


An Act 3[providing for the use of prepaid debit cards as the standardized] allowing modernization for the3 form of disbursement for certain State 3[and local]3 government 3and local unit3 payments, supplementing Title 52 of the Revised Statutes 2[and Title 40A of the New Jersey Statutes]2.

 

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

 

     1.    a. Standardizeable State payments to individuals or business entities shall be made in the form of prepaid debit cards.

     b.    The implementation of this section shall be subject to the following conditions:

     The scope and timing of the implementation of this section shall be subject to an ongoing determination of financial feasibility by the State Treasurer, provided that implementation shall comply with the terms of subsection c. of this section and the public disclosure 4and regulatory4 requirements imposed by this subsection;

     No later than the first business day of the fourth month of each calendar year that commences at least six months after the date of enactment of this section, the State Treasurer shall make publicly available, via the Department of the Treasury’s website, the following information concerning the status of the implementation of this section: the scope of current standardizeable State payments in compliance with this section, plans for continued implementation of the standardizeable State payment prepaid debit card requirement, and explanations as to any determinations of financial infeasibility;

     4No later than the first business day of the fourth month that commences after the date of enactment of this section, the State Treasurer shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations to identify and provide a uniform strategy to address the needs of standardizeable State payment recipients that are unbanked or underbanked and do not have or have limited access to an automated teller machine or a manual teller terminal that is operated by, or on behalf of, the entity responsible for the issuance of prepaid debit cards to complete a domestic withdrawal of cash against the balance assigned to the card.4   

     In implementing this section the State Treasurer shall 4[consider carrying]  carry4 out the standardization of prepaid debit card payments 4[in two stages: the first stage applies to State Fiscal Years 1[2015] 20161 and 1[2016] 20171, wherein] by providing4 recipients 4[are allowed] the opportunity4 to elect a series of alternatives to the prepaid debit card payment default for standardizeable State payments, which alternatives shall include, but are not limited to a conventional check or electronic fund transfer for direct deposit into a recipient’s account held by a financial institution; 4[and the second stage applies to State Fiscal Year 1[2017] 20181 and State Fiscal Years thereafter, wherein recipients are allowed to elect an alternative to the prepaid debit card payment default for standardizeable State payments, which alternative shall be electronic fund transfer for direct deposit into a recipient’s account held by a financial institution;]4

     This section shall apply to standardizeable State payments authorized by law to be made on or after July 1, 1[2014] 4[20151] 20164; and

     This section shall not be construed to authorize or preclude the provision of prepaid debit cards to State officers, employees, and agents as compensation for services.

     c.     As used in this section:

     “Automated teller machine” means an electronic information processing device 3[located in the State of New Jersey that is operated by a financial institution]3 which accepts or dispenses cash in connection with credit or deposit accounts.

     3“Financial institution” means a State or federally chartered bank, savings bank, savings and loan association, credit union, or other entity approved by the State Treasurer.

     “Manual teller terminal” means a terminal or other station staffed by a teller or other individual who accepts or dispenses cash in connection with credit or deposit accounts.3

     “Prepaid debit card” means an open loop card, which may be reloadable or nonreloadable, that enables the cardholder to: (i) transfer funds assigned to the card to a merchant through a point-of-sale terminal in exchange for products, services, or a combination thereof; 3[and]3 (ii) withdraw cash against the balance assigned to the card via 3[a qualified financial institution’s] 4[an3] a qualified financial institution’s4 automated teller machine or a 3[qualified financial institution’s]3 4a qualified financial institution’s4 manual teller terminal 3; and (iii) complete, for each standardizeable State payment made to an individual or business entity, not fewer than two transactions involving the domestic withdrawal of cash against the balance assigned to the card via an automated teller machine or a manual teller terminal that is operated by, or on behalf of, the entity responsible for the issuance of the card prior to incurring a charge, surcharge, or other convenience fee for the completion of the transaction3.

     3[“Qualified financial institution” means a State or federally chartered bank, savings bank, savings and loan association, credit union, or other entity approved by the State Treasurer, which owns or operates automated teller machines or manual teller terminals in New Jersey.]3

     4“Qualified financial institution” means a State or federally chartered bank, savings bank, savings and loan association, credit union, or other entity approved by the State Treasurer, which owns or operates automated teller machines or manual teller terminals in New Jersey.4

     “Standardizeable State payment” means a payment authorized by law to be made by a State entity to an individual or a business entity, other than: (i) a payment made pursuant to the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq.; 4[and]4 (ii) payments provided as compensation for services to State officers, employees, and agents4; and (iii) payments in connection with any programs or services administered by a State entity in which the recipient’s ability to receive payment through a conventional check has been eliminated on or before the effective date of P.L.    , c.   (C.       ) (pending before the Legislature as this bill)4.

     “State entity” means an entity operating in the form of a State department, agency, board, commission, corporation, authority, university or college, or an entity created by the State that the State Treasurer deems to be a State entity.

 

     2[2.  a.  The governing body of a local government entity may adopt a resolution to require that standardizeable local government payments to individuals or business entities shall be made in the form of prepaid debit cards.

     b.    If a local government entity adopts a resolution pursuant to this section, the implementation of prepaid debit card payment standardization for standardizeable local government payments shall be subject to the following conditions:

     The scope and timing of the prepaid debit card payment standardization for standardizeable local government payments shall be subject to an ongoing determination of financial feasibility by the governing body of the local government entity;

     The implementation of prepaid debit card payment standardization for standardizeable local government payments

shall comply with the terms of subsection c. of this section and the public disclosure requirements imposed by this subsection;

     No later than the first business day of the fourth month of each calendar year that commences at least six months after the date of enactment of this section, the governing body of the local government entity shall make publicly available, via the local government entity’s website, the following information concerning the status of the implementation of prepaid debit card payment standardization for standardizeable local government payments: the scope of current prepaid debit card payment standardization undertaken pursuant to this section for standardizeable local government payments, plans for continued implementation of prepaid debit card payment standardization for standardizeable local government payments, and explanations as to any determinations of financial infeasibility;

     In implementing this section the governing body of the local government entity shall consider carrying out the implementation of prepaid debit card payment standardization for standardizeable local government payments in two stages: the first stage applies to State Fiscal Years 1[2015] 20161 and 1[2016] 20171, wherein recipients are allowed to elect a series of alternatives to the standardized prepaid debit card payment for standardizeable local government payments, which alternatives shall include, but are not limited to a conventional check or electronic fund transfer for direct deposit into a recipient’s account held by a financial institution; and the second stage applies to State Fiscal Year 1[2017] 20181 and State Fiscal Years thereafter, wherein recipients are allowed to elect an alternative to the standardized prepaid debit card payment for standardizeable local government payments, which alternative shall be electronic fund transfer for direct deposit into a recipient’s account held by a financial institution;

     This section shall apply to standardizeable local government payments authorized by law to be made on or after July 1, 1[2014] 20151; and

     This section shall not be construed to authorize or preclude the provision of prepaid debit cards to local government officers, employees, and agents as compensation for services.

     c.     As used in this section:

     “Automated teller machine” means an electronic information processing device located in the State of New Jersey that is operated by a financial institution which accepts or dispenses cash in connection with credit or deposit accounts.

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

     “Local government entity” means a borough, city, county, county college, county special services district, county vocational school, jointure commission, environmental education center, educational information and resource center, educational research and demonstration center, educational services commission, local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes, municipality, town, township, and village.

     “Prepaid debit card” means an open loop card, which may be reloadable or nonreloadable, that enables the cardholder to: (i) transfer funds assigned to the card to a merchant through a point-of-sale terminal in exchange for products, services or a combination thereof; and (ii) withdraw cash against the balance assigned to the card via a qualified financial institution’s automated teller machine or a qualified financial institution’s manual teller terminal.

     “Qualified financial institution” means a State or federally chartered bank, savings bank, savings and loan association, credit union, or other entity approved by the State Treasurer pursuant to section 1 of P.L.   , c.   (C.         ) (pending before the Legislature as this bill), which owns or operates automated teller machines or manual teller terminals in New Jersey.

     “Standardizeable local government payment” means a payment authorized by law to be made by a local government entity to an individual or a business entity, other than payments provided as compensation for services to local government officers, employees, and agents.]2

 

     22.   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 (EFT) technologies in lieu of payment through the use of signed checks or warrants.  "Standard electronic funds transfer technologies" include, but are not limited to, wire transfers, automated clearing house (ACH) transactions, and debit cards.

     b.    (1) Any policy adopted pursuant to subsection a. of this section shall explicitly list the forms of standard EFT technologies that may be used by that local unit 4, and shall adhere to the uniform strategy provided pursuant to subsection d. of this section to address the needs of recipients of claims paid through the use of standard EFT technologies that are unbanked or underbanked4 .  The policy also may limit the circumstances for EFT use 4, and shall require recipients of claims be provided with the opportunity to elect to receive payment through a conventional check as an alternative to any standard EFT technologies implemented by the local unit4 .

     (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:54A-25.1 et seq.).

     d.    (1) The Local Finance Board, in consultation with the Commissioner of Education, 4shall adopt rules and regulations to identify and provide a uniform strategy to address the needs of recipients of claims paid through the use of standard EFT technologies that are unbanked or underbanked.  The board, in consultation with the commissioner, also4 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

 

     3.    This act shall take effect immediately.