[Third Reprint]

ASSEMBLY, No. 2505

STATE OF NEW JERSEY

214th LEGISLATURE

 

INTRODUCED MARCH 18, 2010

 


 

Sponsored by:

Assemblywoman  NELLIE POU

District 35 (Bergen and Passaic)

Assemblyman  PAUL D. MORIARTY

District 4 (Camden and Gloucester)

Assemblyman  GORDON M. JOHNSON

District 37 (Bergen)

 

Co-Sponsored by:

Assemblyman P. Barnes, III, Senators Weinberg, Gordon, Oroho, Beck, S.Kean and Assemblyman Giblin

 

 

 

 

SYNOPSIS

     Concerns compensation and benefits of officers, employees, and members of State and local authorities.

 

CURRENT VERSION OF TEXT

     As reported by the Senate Budget and Appropriations Committee on January 20, 2011, with amendments.

  


An Act concerning limits on 1[salaries] compensation1 and benefits of officers, employees, and members of independent State authorities and of local authorities, amending and supplementing P.L.1983, c.313 and supplementing Title 52 of the Revised Statutes.

 

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

 

     3[1.  Section 4 of P.L.1983, c.313 (C.40A:5A-4) is amended to read as follows:

     4.    On and after the effective date of this act, no authority shall be created by any local unit or units without the prior approval of the Local Finance Board.  Prior to the introduction of an ordinance or the adoption of a resolution to create an authority, the local unit or units proposing this creation shall make application to the Local Finance Board for its approval.  The application shall contain:

     a.     A copy of the proposed ordinance or resolution creating the authority;

     b.    A statement, in brief and general terms, of the project or projects to be undertaken, the estimated project cost, the manner of project financing, and  the area to be served by the project;

     c.     A proposed budget for the first year of authority operation, including a  table of organization, personnel requirements, the level of staff required for  supervision of the operation of the authority and the proposed source or sources of the authority's funding; [and]

     d.    A statement, in the form prescribed by the Local Finance Board, indicating that the local unit or units have considered alternative means of undertaking and financing the proposed project or projects and have determined that the creation of an authority is the most efficient and feasible means of providing and financing the project or projects; and

     e.     A certification by the chairman of the authority that the 1[salaries] compensation1 and benefits of the officers and employees of the local authority do not exceed the limits permitted pursuant to section 3 of P.L.    , c.    (C.      ) (pending before the Legislature as this bill).

     The Local Finance Board may consider estimates, computations or calculations made in connection with an application, may require the production of papers, documents, witnesses or information, may make or cause to be made an audit or investigation, and may take any other appropriate action necessary to its consideration of
whether or not to approve the creation of an authority.

(cf: P.L.1983, c.313, s.4)]3

 

     31.  Section 10 of P.L.1983, c.313 (C.40A:5A-10) is amended to read as follows:

     10.  a.  Each authority shall submit a budget for each fiscal year to the director prior to its adoption thereof.  The budget shall comply with the terms and provisions of any bond resolutions, and shall be in such form and detail as to items of revenue, expenditure and other content as shall be required by law or by rules and regulations of the Local Finance Board.  Submission of each authority budget shall include a certification by the chairman of the authority that the compensation and benefits of the officers and employees of the local authority do not exceed the limits permitted pursuant to section 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill).

     b.    The Local Finance Board shall prescribe by rule or regulation the procedure for the adoption of budgets by authorities.  The rules and regulations may include or be similar to any provisions of the "Local Budget Law" (N.J.S. 40A:4-1 et seq.) which the Local Finance Board shall deem to be practicable or necessary, and may further include any other provisions and requirements which the Local Finance Board shall deem appropriate or necessary.  The rules and regulations shall provide for approval or disapproval of a budget within 45 days of the director's receipt thereof.

     c.     The Local Finance Board shall also prescribe by rule or regulation the procedures and requirements for execution of any budget after adoption, and for the administration of financial affairs of authorities.  The rules and regulations may include, without limitation, any provisions of the "Local Budget Law" (N.J.S. 40A:4-1 et seq.), and the "Local Fiscal Affairs Law" (N.J.S. 40A:5-1 et seq.), which the Local Finance Board shall deem to be practicable and necessary. 3

(cf: P.L1987, c.319, s.5)

 

     2.    Section 11 of P.L.1983, c.313 (C.40A:5A-11) is amended to read as follows:

     11.  No authority budget shall be finally adopted until the director shall have approved same.  In granting the approval, the director shall consider whether or not:

     a.     All estimates of revenue are reasonable, accurate and correctly stated;

     b.    Items of appropriation are properly set forth;

     c.     In itemization, form and content, the budget will permit the exercise of  the comptroller function within the authority;

     d.    The schedule of rates, fees and charges then in effect will produce sufficient revenues, together with all other anticipated revenues, to satisfy all obligations to the holders of bonds of the authority, to meet operating expenses, capital outlays, debt service requirements, and to provide for such reserves, all as may be required by law, regulation or terms of contracts and agreements;

     e.     The 3[salaries] compensation3 and benefits of the officers and employees of the authority do not exceed the limits permitted pursuant to section 3 of P.L.    , c.    (C.      ) (pending before the Legislature as this bill).

     The director may require such documentation, records and other information,  and undertake any audit or investigation, as he may deem necessary in  connection with his review.

     If the director finds that all requirements of law and the rules and regulations of the Local Finance Board have been met, he shall, within 45 days of his receipt of the budget, approve it;  otherwise he shall within that time refuse to approve it.  The director, in refusing to approve the budget, shall not substitute his discretion with respect to the amount of an appropriation when that amount is not made mandatory by law or regulation.

     Any decision of the director in the course of budget review under this section may be appealed to the Local Finance Board in the manner generally provided by law.

(cf: P.L.1983, c.313, s.11)

 

     3.    (New section)  a.  1[For the purposes of this section, "local] As used in this section:

     "Compensation" means wages, salaries, commissions, or any other form of remuneration paid to officers or employees for personal services but shall not include supplemental compensation for accumulated unused sick leave.

     "Local1 authority" means an "authority" as defined under the "Local Authorities Fiscal Control Law," P.L.1983, c.313 (C.40A:5A-1 et seq.).

     b.    No executive director or chief executive officer of a local authority commencing service on and after the effective date of this act shall be paid 1[a salary] compensation1 higher than the salary of the Governor of New Jersey without approval of the Local Finance Board, for good cause shown.

     c.     No officer or employee of a local authority, except as provided in subsection b. of this section, commencing service on and after the effective date of this act shall be paid 2[a]2 1[a salary] compensation1 higher than the salary of an officer listed in section 1 of P.L.1974, c.55 (C.52:14-15.107) 1or of the Governor, if the salary of such officer shall be higher than that of the Governor,1 without approval of the Local Finance Board, for good cause shown.

     d.    Nothing in this section shall be construed as extending or increasing any maximum salary limit or requiring an increase in salary heretofore established by a local authority for an officer or employee of the local authority.

     1[e.   A local authority shall not pay or agree to pay its officers or employees any compensation, whether described as a bonus, incentive payment, monetary award, or functionally similar term, in addition to the officer or employee’s regular salary.

     f.e.1 3[A local authority shall not pay supplemental compensation to an officer or employee for accumulated unused sick leave in an amount in excess of $15,000.  Supplemental compensation shall be payable only at the time of retirement from a State-administered or locally-administered retirement system or a retirement program or plan provided by the authority, and shall be based on the leave credited on the date of retirement.  This subsection shall apply only to officers and employees who commence service with the local authority on or after the effective date of this act.  This subsection shall not be construed to affect the terms in any collective negotiations agreement with a relevant provision in force on that effective date.]  An officer or employee of a local authority who on the effective date of P.L.    , c.   (C.        ) (pending before the Legislature as this bill), or upon the expiration of a collective negotiations agreement or contract of employment applicable to that officer or employee in effect on that date, has accrued supplemental compensation based upon accumulated unused sick leave shall, upon retirement, be eligible to receive for any unused leave not more than the amount so accumulated or not more than $15,000, whichever is greater.3

     1[g.] f.1  A local authority shall not grant to its officers or employees any paid holidays in excess of those granted to State employees, as set forth in section 25 of P.L.2008, c.89 (C.11A:6-24.1).  This subsection shall take effect for a local authority in the calendar year following the expiration of the collective bargaining agreements or contracts covering a majority of the officers and employees of the local authority in effect on the effective date of this act.

     1[h.] g.1 3[(1) The cost of health care benefits coverage provided by a local authority pursuant to a health care benefits plan or program shall be shared by the officers and employees of the authority through the withholding of a contribution in an amount in accordance with this paragraph.  Upon the expiration of any applicable binding collective negotiations agreement in force on the effective date of this act, the amount of the contribution required by the officers and employees of a local authority for whom there is a majority representative for collective negotiations purposes shall be 1.5 percent of base salary, notwithstanding any other amount that may be required additionally for a share of the cost or a percentage of the premium for such coverage by means of a binding collective negotiations agreement, and the amount of the contribution required by the officers and employees of a local authority for whom there is no majority representative for collective negotiations purposes shall be 1.5 percent of base salary, notwithstanding any other amount that may be required additionally for a share of the cost or a percentage of the premium for such coverage by means of the application by the authority to such officers and employees of the terms of a binding collective negotiations agreement or by other means.

     (2)   The cost of health care benefits coverage provided by a local authority pursuant to a health care benefits plan or program shall be shared by the officers and employees of the local authority in retirement through the withholding of a contribution in an amount in accordance with this paragraph.  The amount of contribution required in retirement as to an officer or employee of a local authority who becomes a member of a State-administered or locally-administered retirement system on or after the effective date of this act, for whom there is a majority representative for collective negotiations purposes or for whom there is no such representative, shall be 1.5 percent of the retiree’s monthly retirement allowance, including any future cost-of-living adjustments, notwithstanding any other amount that may be required additionally for a share of the cost or a percentage of the premium for such coverage by means of a binding collective negotiations agreement or by means of the application by the authority to such officers or employees of the terms of such an agreement or by other means.  When an officer or employee is not required to become a member of a State-administered or locally-administered retirement system, this paragraph shall apply to an officer or employee who commences service with the local authority on or after the effective date of this act.

     1[i.] h.1]3  The local authority shall prohibit the use of six or more consecutive days of accumulated sick leave by an officer or employee commencing service on and after the effective date of this act in the 12 months prior to retirement and in anticipation of that retirement, without a medical necessity verified in writing by a physician.  The local authority may require the officer or employee to submit to an examination by a physician selected by the employer to verify the medical necessity.  The local authority shall (1) impose a fine and issue a reprimand against the employee found to be in violation of this prohibition, with the fine to be an amount equivalent to three times the daily rate of compensation for each day of violation, or (2) for a second violation of the prohibition, deduct all sick leave found to have been used in violation of this prohibition from the number of days of unused accumulated sick leave credited on the effective date of retirement upon which supplemental compensation, if any, for the employee at the time of retirement is calculated, or (3) both.


     4.    (New section) As used in 1this section and1 sections 5 and 6 of this act:

     “Board” means the board of directors or governing board.

     1"Compensation" means wages, salaries, commissions, or any other form of remuneration paid to officers, employees, or members for personal services but shall not include supplemental compensation for accumulated unused sick leave.1

     "Executive director" means the executive or administrative head.

     “Independent State authority" means a public authority, board, commission, corporation, or other agency or instrumentality of the State allocated, in but not of, a principal department of State government pursuant to Article V, Section IV, paragraph 1 of the New Jersey Constitution, or which is not subject to supervision or control by the department in which it is allocated, and a regional authority, but shall not include a college or university.

     "Member" means a member of an independent State authority or board thereof.

     "Regional authority" means and includes the Passaic Valley sewerage commissioners and the North Jersey district water supply commission.

 

     5.    (New section)  The chairman of each independent State authority or the chairman of the board of each independent State authority shall annually certify to the State Treasurer that the 1[salaries] compensation1 and benefits of the officers, employees, and members do not exceed the limits permitted pursuant to section 6 of this act.

 

     6.    (New section)  a.  No executive director of an independent State authority commencing service on and after the effective date of this act shall be paid 1[a salary] compensation1 higher than the salary of the Governor of New Jersey without approval of the State Treasurer, for good cause shown.

     b.    No officer, employee, or member of an independent State authority, except as provided in subsection a. of this section, commencing service on and after the effective date of this act shall be paid 3[a salary] compensation3 higher than the 2[salary] 3[compensation2] salary3 of an officer listed in section 1 of P.L.1974, c.55 (C.52:14-15.107) 1or of the Governor, if the salary of such officer shall be higher than that of the Governor,1 without approval of the State Treasurer, for good cause shown.

     c.     Nothing in this section shall be construed as extending or increasing any maximum salary limit or requiring an increase in salary heretofore established by an independent State  authority for an officer or employee of the authority.

     d.    3[An independent State authority shall not pay supplemental compensation to an officer or employee for accumulated unused sick leave in an amount in excess of $15,000.  Supplemental compensation shall be payable only at the time of retirement from a State-administered or locally-administered retirement system or a retirement program or plan provided by the authority, and shall be based on the leave credited on the date of retirement.  This subsection shall apply only to officers and employees who commence service with the authority on or after the effective date of this act.  This subsection shall not be construed to affect the terms in any collective negotiations agreement with a relevant provision in force on that effective date.]  An officer or employee of an independent State authority who on the effective date of P.L.    ,    c.    (C.        ) (pending before the Legislature as this bill), or upon the expiration of a collective negotiations agreement or contract of employment applicable to that officer or employee in effect on that date, has accrued supplemental compensation based upon accumulated unused sick leave shall, upon retirement, be eligible to receive for any unused leave not more than the amount so accumulated or not more than $15,000, whichever is greater.3

     1[e.  An independent State authority shall not pay or agree to pay its officers or employees any compensation, whether described as a bonus, incentive payment, monetary award, or functionally similar term, in addition to the officer or employee's regular salary. 

     f.] e.1  An independent State authority shall not grant to its officers or employees any paid holidays in excess of those granted to State employees, as set forth in section 25 of P.L.2008, c.89 (C.11A:6-24.1).  This subsection shall take effect for an independent State authority in the calendar year following the expiration of the collective bargaining agreements or contracts covering a majority of the officers and employees of the independent State authority in effect on the effective date of this act.

     1[g.] f.1  (1) The cost of health care benefits coverage provided by an independent State authority 3that is not participating in the State Health Benefits Program, and therefore not subject to section 7 of P.L.1964, c.125 (C.52:14-17.38) and P.L.2010, c.2,3 pursuant to 3[a] an other3 health care benefits plan or program shall be shared by the officers and employees of the authority through the withholding of a contribution in an amount in accordance with this paragraph.  Upon the expiration of any applicable binding collective negotiations agreement in force on the effective date of this act, the amount of the contribution required by the officers and employees of an independent State authority for whom there is a majority representative for collective negotiations purposes shall be 1.5 percent of base salary, notwithstanding any other amount that may be required additionally for a share of the cost or a percentage of the premium for such coverage by means of a binding collective negotiations agreement, and the amount of the contribution required by the officers and employees of an independent State authority for whom there is no majority representative for collective negotiations purposes shall be 1.5 percent of base salary, notwithstanding any other amount that may be required additionally for a share of the cost or a percentage of the premium for such coverage by means of the application by the authority to such officers and employees of the terms of a binding collective negotiations agreement or by other means.

     (2)   The cost of health care benefits coverage provided by an independent State authority 3that is not participating in the State Health Benefits Program, and therefore not subject to section 7 of P.L.1964, c.125 (C.52:14-17.38) and P.L.2010, c.2,3 pursuant to 3[a] an other3 health care benefits plan or program shall be shared by the officers and employees of the authority in retirement through the withholding of a contribution in an amount in accordance with this paragraph.  The amount of contribution required in retirement as to an officer or employee of an independent State authority who becomes a member of a State-administered or locally-administered retirement system on and after the effective date of this act, for whom there is a majority representative for collective negotiations purposes or for whom there is no such representative, shall be 1.5 percent of the retiree’s monthly retirement allowance, including any future cost-of-living adjustments, notwithstanding any other amount that may be required additionally for a share of the cost or a percentage of the premium for such coverage by means of a binding collective negotiations agreement or by means of the application by the authority to the officers or employees of the terms of such an agreement or by other means.  When an officer or employee is not required to become a member of a State or locally-administered retirement system, this paragraph shall apply to an officer or employee who commences service with the independent State authority on or after the effective date of this act.

     1[h.] g.1  An independent State authority shall prohibit the use of six or more consecutive days of accumulated sick leave by an officer or employee commencing service on and after the effective date of this act in the 12 months prior to retirement and in anticipation of that retirement, without a medical necessity verified in writing by a physician.  The independent State authority may require the officer or employee to submit to an examination by a physician selected by the employer to verify the medical necessity.  The independent State authority shall: (1) impose a fine and issue a reprimand against the employee found to be in violation of this prohibition, with the fine to be an amount equivalent to three times the daily rate of compensation for each day of violation, or (2) for a second violation of the prohibition, deduct all sick leave found to have been used in violation of this prohibition from the number of days of unused accumulated sick leave credited on the effective date of retirement upon which supplemental compensation, if any, for the employee at the time of retirement is calculated, or (3) both.

 

     7.    This act shall take effect on the 60th day following enactment and shall be applicable to all agreements and contracts entered into or renewed, and all salary resolutions adopted, after the effective date.