SENATE, No. 2926

STATE OF NEW JERSEY

214th LEGISLATURE

 

INTRODUCED JUNE 6, 2011

 


 

Sponsored by:

Senator  CHRISTOPHER J. CONNORS

District 9 (Atlantic, Burlington and Ocean)

Senator  ANTHONY R. BUCCO

District 25 (Morris)

 

 

 

 

SYNOPSIS

     Permits local government units to increase service charge imposed for check payments returned for insufficient funds.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning service charges imposed by local government units and amending P.L.1990, c.105 and P.L.1991, c.339.

 

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

 

     1.    Section 1 of P.L.1990, c.105 (C.40:5-18) is amended to read as follows:

     1.    a.   The governing body of a municipality may provide, by resolution or ordinance, for the imposition of a service charge to be added to any account owing to the municipality, if payment tendered on the account was by a check or other written instrument which was returned for insufficient funds.

     b.    Whenever an account owing to a municipality is for a tax or special assessment, the service charge authorized by this section shall be included on whatever list of delinquent accounts is prepared for the enforcement of the lien.

     c.     The service charge for a check or other written instrument returned for insufficient funds shall be determined and set by resolution or by ordinance of the governing body, from time to time, as appropriate, but shall not exceed [$20 per check or other written instrument] the usual and customary service charge of the commercial banking institution where the municipality deposits its checks and other written instruments.

     d.    Any service charge authorized by this section shall be collected in the same manner prescribed by law for the collection of the account for which the check or other written instrument was tendered.  In addition, the governing body may require future payments to be tendered in cash or by certified or cashier’s check.

(cf: P.L.1990, c.105, s.1)

 

     2.    Section 1 of P.L.1991, c.339 (C.40:5-19) is amended to read as follows:

     1.    a.   The governing body of a county may provide, by resolution or ordinance, as appropriate, for the imposition of a service charge to be added to any account owing to the county, if payment tendered on the account was by a check or other written instrument which was returned for insufficient funds.

     b.    The service charge for a check or other written instrument returned for insufficient funds shall be determined and set by resolution or by ordinance of the governing body, as appropriate, from time to time, but shall not exceed [$20 per check or other written instrument] the usual and customary service charge of the commercial banking institution where the municipality deposits its checks and other written instruments.

     c.     Any service charge authorized by this section shall be collected in the same manner prescribed by law for the collection of the account for which the check or other written instrument was tendered.  In addition, the governing body may require future payments to be tendered in cash or by certified or cashier's check. 

(cf: P.L.1991, c.339, s.1)

 

     3.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill amends N.J.S.A.40:5-18 and 19 to permit municipalities and counties to increase the service charge imposed for checks or other written instruments returned for insufficient funds up to, but not to exceed, the usual and customary service charge of the commercial banking institution where the municipality or county deposits its checks and other written instruments.

     Under current law, the service charge imposed by a municipality or county cannot exceed $20 per check or other written instrument, while most commercial banking institutions generally charge fees in excess of $20 for returned checks or other instruments due to insufficient funds.  As a result of the discrepancy in fees charged and collected, fees paid to commercial banking institutions by municipalities or counties in excess of $20 are unfairly absorbed by local taxpayers.