STATE OF NEW JERSEY
PRE-FILED FOR INTRODUCTION IN THE 2016 SESSION
Assemblyman GARY S. SCHAER
District 36 (Bergen and Passaic)
Assemblywoman SHAVONDA E. SUMTER
District 35 (Bergen and Passaic)
Assemblyman JAMEL C. HOLLEY
District 20 (Union)
Eliminates five percent down payment requirement for bond ordinances approved by counties and municipalities.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning the issuance of local bonds and amending N.J.S.40A:2-11.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.40A:2-11 is amended to read as follows:
40A:2-11. a. [No] A bond ordinance [shall be finally adopted unless it appropriates] may appropriate to the purpose, or ratably to the respective purposes to be financed, in addition to the obligations thereby authorized, a sum as a down payment which is [not less than 5%] a percentage of the amount of the obligations authorized.
b. [Said] When a sum [so] is appropriated as a down payment, then that sum must have been made available prior to final adoption of the bond ordinance from any one or more of the following:
1. by provision in a previously adopted budget or budgets of the local unit for down payment or for capital improvement purposes;
2. from moneys then actually held by the local unit and previously contributed for such purpose other than by the local unit; or
3. by emergency appropriation.
c. [The provisions of this section shall not apply to a bond ordinance which authorizes obligations solely for any purpose referred to in paragraphs a, b, c, d, e and h of section 40A:2-7 or for those bond ordinances which involve projects funded by State grants such as Green Acres, Environmental Trust Fund, Transportation Trust Fund, and other similar programs.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
(cf: P.L.2003, c.15, s.2)
2. This act shall take effect immediately.
This bill makes permissive the down payment requirement for counties and municipalities to issue bonds. Under current law, most bond ordinances require an appropriation of at least five percent of the amount of the authorized obligation for final adoption of the bond ordinance. Although this appropriation is excluded from the property tax levy cap, relief from the requirement to make the down payment is intended to free-up scarce resources for other purposes of the county or municipality.