[Passed Both Houses]
[First Reprint]
ASSEMBLY COMMITTEE SUBSTITUTE FOR
SENATE, No. 1303
STATE OF NEW JERSEY
ADOPTED JUNE 9, 1997
Sponsored by Senators LYNCH, GORMLEY, Bryant, Assemblymen Jones, DiGaetano and Dalton
An Act permitting establishment of joint municipal lien pools and supplementing Title 54 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. The governing bodies of two or more municipalities 1, by adoption of parallel resolutions,1 may create a joint municipal lien pool for the purpose of 1undertaking1 bulk sales of municipal liens, the public sale of liens at auction 1[and] or1 the 1[creation] issuance1 of 1[securities] notes and bonds1 backed 1solely1 by municipal liens 1held by the joint municipal lien pool1 through the adoption of resolutions for that purpose. A joint municipal lien pool created pursuant to this section shall be known as the "(name of region or other identifying characteristic) Joint Municipal Lien Pool."
b. (1) The powers of a joint municipal lien pool shall be vested in a board of directors which shall consist of one member from each participating municipality, who shall serve without compensation. The member shall be either the municipal tax collector or such other resident of the municipality as the mayor selects. The member shall serve at the pleasure of the mayor.
(2) The board of directors may delegate such authority as it deems appropriate to an executive committee of the board.
c. The members of the joint municipal lien pool shall establish procedures, times and locations for meetings as may be required for the operation of the pool.
d. Following the creation of a joint municipal lien pool, any additional municipality may participate in the pool through the adoption of an authorizing resolution by that municipality, subject to the approval of all of the members of the board of directors of the pool.
1e. Prior to the commencement of its operations a joint municipal lien pool shall adopt bylaws to govern the conduct of its affairs. The bylaws shall include provisions regarding the responsibilities and obligations of the members of the pool, the termination of the joint municipal lien pool or the withdrawal of a member from the pool upon satisfaction by the member of all financial obligations to the pool. The bylaws shall be submitted to the Local Finance Board for approval. The contents of the bylaws shall be as determined necessary by the members of the pool and as may be required by the Local Finance Board. The Local Finance Board may approve the bylaws or require the adoption of specific changes for approval. Upon approval, a copy of the bylaws shall be filed in the Office of the Secretary of State and with the Director of the Division of Local Government Services. Upon proof of such filings, the joint municipal lien pool shall, in any suit, action or proceeding involving the validity or enforcement of, or relating to, any contract or obligation or act of the joint municipal lien pool, be conclusively deemed to have been lawfully and properly created, organized and established and authorized to transact business and exercise its powers under this act. Copies of the filing, duly certified by the Secretary of State, shall be admissible in evidence in any suit, action or proceeding and shall be conclusive evidence of due and proper filing thereof.1
2. The powers of a joint municipal lien pool created and operating pursuant to section 1 of P.L. , c. (C. ) (now pending before the Legislature as this bill) shall be as follows:
a. 1[Accept] To accept1 transfers of municipal liens from member municipalities.
b. 1[The sale of] To sell1 municipal liens in bulk and 1[the securitization of liens] to issue bonds and notes, using municipal liens held by the joint municipal lien pool as collateral,1 on behalf of its members, upon the approval of the Local Finance Board.
c. 1[The assessment of] To assess1 initial 1and continuing1 membership fees to fund the operations of the joint municipal lien pool, such fees to be refunded from proceeds of sales of liens.
d. 1[The creation of] To create1 special purpose pools of certain liens, subject to approval of the Local Finance Board.
e. 1[The employment of] To employ1 or contract with professionals, such as administrators, trustees and other service providers, on such terms as the board of directors of the pool deems appropriate, to manage the affairs of the pool and to sell 1[or securitize]1 pooled liens 1and/or arrange for their use as collateral for bonds or notes1.
1f. To contract for the purchase of supplies and other such needs as the pool may require, including, but not limited to, acquisition of office space and the hiring of clerical and secretarial employees.
g. Notwithstanding any other provisions of law to the contrary, the joint municipal lien pool shall employ or contract with a person holding a tax collector certificate pursuant to P.L.1979, c.384 (C.40A:9-145.1 et seq.), to perform those functions and responsibilities normally performed by a municipal tax collector with regard to municipal liens.1
13. For the purposes of P.L. , c. (C. ) (now pending before the Legislature as this bill), municipal liens means municipal liens as defined under the "tax sale law," R.S.54:5-1 et seq., except that no lien for taxes shall be transferred to a joint municipal lien pool unless the taxes that are the basis for that lien continue to be delinquent after the tenth day of the eleventh month of the fiscal year of the municipality for which those taxes were due and payable.1
1[3.] 4.1 The operations of a joint municipal lien pool shall be subject to the provisions of the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.)1, the Open Public Meetings Act, P.L.1975, c.231 (C.10:4-6 et seq.),1 and the "Local Fiscal Affairs Law," N.J.S.40A:5-1 et seq.
1[4.] 5.1 a. No municipal lien shall be transferred to a joint municipal lien fund unless the record owner of the property subject to the lien has first been sent notice, by regular and certified mail, of the intended transfer and been given an opportunity to redeem the lien at least 10 days prior to the transfer.
b. A municipal lien transferred to a joint municipal lien pool shall remain the property of the municipality transferring the lien until actually sold by the pool. Joint municipal lien pools shall not own or foreclose upon municipal liens. The sale or 1[securitization] arrangement for use as collateral for a bond or note1 of a municipal lien shall not affect redemption rights or the existing foreclosure process.
1[5.] 6.1 A joint municipal lien pool may act on behalf of any member municipal tax collector to execute lien certificates as part of a sale. All interests and penalties otherwise due shall be paid to the municipality 1in cash or notes1 up to and until the time the liens are sold or 1[securitized] used as collateral for a bond or note1.
1[6.] 7.1 Prior to any initial bulk sale, public sale at auction or 1[securitization] arrangement for use as collateral for a bond or note1 of municipal liens by a joint municipal lien pool, the pool shall file an operating plan for review and approval of 1[Director of Local Government Services in the Department of Community Affairs] the Local Finance Board1. The operating plan shall include 1the procedure by which the sale, auction or issuance of bonds or notes shall be accomplished along with1 a method of distribution of revenues that exceed the costs of operating the activities of the pool. 1The Local Finance Board shall ensure that the operating plan is fiscally prudent, that the fees and costs to be incurred, including those for professional contracts, are appropriate and reasonable, and that the plan meets such other criteria as the board deems necessary.1
1[7.] 8.1 The Director of the Division of Local Government Services in the Department of Community Affairs may adopt rules and regulations and issue orders, as necessary, to effectuate the purposes of this act.
1[8.] 9.1 This act shall take effect immediately.
Permits establishment of joint municipal lien pools.