SENATE COMMUNITY AFFAIRS COMMITTEE

STATEMENT TO

SENATE, No. 1303

with committee amendments

STATE OF NEW JERSEY

DATED: JUNE 24, 1996

      The Senate Community Affairs Committee reports favorably and with committee amendments Senate, No. 1303 .

      This bill, as amended, would establish the State Municipal Property Tax Lien Fund in the Department of Commerce to purchase or take assignment of municipal tax liens. Municipalities would be able to convert their municipally held tax sale certificates into cash either by borrowing from the fund using the certificates as security, or selling outright the certificates individually or in bulk to the fund. The Economic Development Authority would be authorized to administer the fund, and be empowered to service liens, manage properties, foreclose liens, sell liens individually or in bulk, and own property for the benefit of the fund. The authority would also be authorized to contract with private vendors to service these liens and manage these properties.

      The committee amended the bill to make clear that using monies in the fund for the purpose of the individual or bulk purchase of property tax liens held by a municipality is not a new use of these monies, but is done pursuant to existing law, P.L.1993, c.325 (C.54:5-113.4). These amendments also make clear that the monies are to be used for subsequent tax payments, not loans, to a municipality secured by property tax liens held by the fund. Finally, the committee added one additional use for these monies, namely, to secure debt for redevelopment projects or economic development projects located in a municipality participating in the fund.