ASSEMBLY, No. 2468

STATE OF NEW JERSEY

INTRODUCED NOVEMBER 7, 1996

By Assemblymen ROMA and KELLY

An Act concerning the municipal reserve for uncollected taxes and amending N.J.S.40A:4-41.

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

    1. N.J.S.40A:4-41 is amended to read as follows:

    40A:4-41. a. For the purpose of determining the amount of the appropriation for "reserve for uncollected taxes" required to be included in each annual budget where less than 100% of current tax collections may be and are anticipated, anticipated cash receipts shall be as set forth in the budget of the current year, and in accordance with the limitations of statute for anticipated revenue from, surplus appropriated, miscellaneous revenues and receipts from delinquent taxes.

    b. Receipts from the collection of taxes levied or to be levied in the municipality, or in the case of a county for general county purposes and payable in the fiscal year shall be anticipated in an amount which is not in excess of the percentage of taxes levied and payable during the next preceding fiscal year which was received in cash by the last day of the preceding fiscal year.

    c. (1) For any municipality in which tax appeal judgments have been awarded to property owners from action of the county tax board pursuant to R.S.54:3-21 et seq., or the State tax court pursuant to R.S.54:48-1 et seq.in the preceding fiscal year, the governing body of the municipality may elect to determine the reserve for uncollected taxes by using the average of the percentages of taxes levied which were received in cash by the last day of each of the three preceding fiscal years. Election of this choice shall be made by resolution, approved by a majority vote of the full membership of the governing body prior to the introduction of the annual budget pursuant to N.J.S.40A:4-5.

    (2) If the amount of tax reductions resulting from tax appeal judgments of the county tax board pursuant to R.S.54:3-21 et seq., or the State tax court pursuant to R.S.54:48-1 et seq., for the previous fiscal year exceeds 1% of the tax levy for that previous fiscal year, the governing body of the municipality may elect to calculate the current year reserve for uncollected taxes by reducing the certified tax levy of the prior year by the amount of the tax levy adjustments resulting from those judgments. Election of this choice shall be made by resolution, approved by a majority vote of the full membership of the governing body prior to the introduction of the annual budget pursuant to N.J.S.40A:4-5.

(cf: P.L.1991, c.75, s.19)

    2. This act shall take effect immediately.

STATEMENT

    This bill would permit a municipality to take into account county tax board or State tax court judgments in the calculation of the reserve for uncollected taxes. When judgments have been issued in favor of taxpayers, the municipality would be permitted to determine the reserve for uncollected taxes by using the average of the percentages of taxes levied which were received in cash by the last day of each of the three preceding fiscal year in each of the previous three fiscal years. If the amount of the tax reductions ordered by the county tax board or the State tax court exceeds 1% of the preceding year's tax levy, then the municipality could elect to reduce the current year's reserve for uncollected taxes by reducing the certified tax levy of the prior year by the amount of the tax levy adjustments resulting from those judgments. The elections to reduce the reserve for uncollected taxes would be made by resolution of the governing body adopted prior to introduction of the annual budget.

Permits reduction of reserve for uncollected taxes due to prior year tax reductions ordered by county board of taxation or State tax court.