ASSEMBLY, No. 160

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman BUCCO

An Act concerning free balances in public schools, amending N.J.S.18A:21-3, supplementing P.L.1990, c.52 (C.18A:7D-1 et seq.) and repealing section 3 of P.L.1993, c.80.

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

    1. N.J.S.18A:21-3 is amended to read as follows:

    18A:21-3. Such account shall be established by resolution of the board of school estimate or the board of education, as the case may be, in such form as shall be prescribed by the commissioner, a true copy of which shall be filed with the department. For any school year an amount not to exceed the amount of foundation aid anticipated in the capital outlay budget, as calculated pursuant to section 10 of P.L.1990, c.52 (C.18A:7D-10), plus any additional sum expressly approved by the voters of the district or the board of school estimate[, and any free balance amount, authorized under section 3 of P.L.1993, c.80 (C.18A:7D-27.1),]may be appropriated to the account. The account shall also include the earnings attributable to the investment of the assets of the account.

(cf: P.L.1993, c.80, s.2)

    2. (New section) On or before October 31 of each year, a school district shall remit to the municipality any general fund free balance in excess of 6% of the budgeted general fund as determined by the annual audit of the preceding school year, after deducting from the balance any federal funds provided to the district pursuant to Pub.L.81-874, 20 U.S.C.§236 et seq. In the case of regional school districts, the free balance shall be remitted to the municipalities in the same proportion as the annual appropriation is apportioned among the municipalities. A municipality shall use the free balance exclusively for the purpose of property tax relief.

    3. Section 3 of P.L.1993, c.80 (C.18A:7D-27.1) is repealed.

    4. This act shall take effect immediately.

STATEMENT

    This bill requires a school district to remit to the municipality any surplus in excess of 6% of the budgeted general fund as determined by the annual audit of the preceding school year, after deducting from the balance any federal impact aid provided to the district. In the case of regional school districts, the surplus would be remitted to the municipalities in the same proportion as the annual appropriation is apportioned among the municipalities. A municipality is required to use the surplus exclusively for the purpose of property tax relief.

    The bill repeals the current statute which requires the appropriation of a general fund free balance in excess of 7.5% or its transfer to the capital reserve account.

Requires school district to remit certain surplus annually to municipality.