[Passed Both Houses]

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 may create a joint municipal lien pool for the purpose of bulk sales of municipal liens, the public sale of liens at auction and the creation of securities backed by municipal liens 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.

      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. Accept transfers of municipal liens from member municipalities.

      b. The sale of municipal liens in bulk and the securitization of liens on behalf of its members, upon the approval of the Local Finance Board.

      c. The assessment of initial membership fees to fund the operations of the joint municipal lien pool, such fees to be refunded from proceeds of sales of liens.

      d. The creation of special purpose pools of certain liens, subject to approval of the Local Finance Board.

      e. The employment of 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 or securitize pooled liens.

      3. 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.) and the "Local Fiscal Affairs Law," N.J.S.40A:5-1 et seq.

      4. 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 securitization of a municipal lien shall not affect redemption rights or the existing foreclosure process.

      5. 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 up to and until the time the liens are sold or securitized.

      6. Prior to any initial bulk sale, public sale at auction or securitization of municipal liens by a joint municipal lien pool, the pool shall file an operating plan for review and approval of Director of Local Government Services in the Department of Community Affairs. The operating plan shall include a method of distribution of revenues that exceed the costs of operating the activities of the pool.

      7. 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.

      8. This act shall take effect immediately.

Permits establishment of joint municipal lien pools.