SENATE, No. 1304

STATE OF NEW JERSEY

INTRODUCED JUNE 13, 1996

By Senator CONNORS

An Act exempting certain municipalities from annual budget review by the State and supplementing chapter 4 of Title 40A of the New Jersey Statutes.

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

    1. Notwithstanding the provisions of N.J.S.40A:4-10 and N.J.S.40A:4-76 through N.J.S.40A:4-79, the Local Finance Board shall adopt rules, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to exempt a municipality in good financial condition from the requirement that the Director of the Division of Local Government Services certify and examine its annual budget. The rules so adopted shall provide for a system of local examination and approval of such budgets by municipal officials in place of the annual certification and examination. The budget certification and examination exemption shall not be applicable to a municipality that the director finds is fiscally unsound or in which the fiscal practices have been conducted contrary to law or sound administrative practice.

    a. The director shall examine the budget of a municipality exempted from annual budget certification and examination pursuant to the requirements of the "Local Budget Law," N.J.S.40A:4-1 et seq. at least every third year.

    b. The governing body and chief financial officer of an exempt municipality shall each file an annual certification with the director stating that, with reference to the municipality's adopted budget, they have:

    (1) examined it in the manner prescribed under N.J.S.40A:4-76;

    (2) determined that it complies with the requirements set forth in N.J.S.40A:4-77; and

    (3) determined that it complies with all other provisions of law, including but not limited to the requirements of the "Local Budget Law, " N.J.S.40A:4-1 et seq. and of P.L.1976, c.68 (C.40A:4-45.1 et seq.), and the regulations of the Local Finance Board.

    c. All budget documents required by law or by regulations adopted by the Local Finance Board shall be filed annually by an exempt municipality with the director on a timely basis.

    d. An exempt municipality shall meet all other criteria and responsibilities established by the regulations adopted by the Local Finance Board.

    e. The director shall act to require immediate compliance by an exempt municipality with the requirements of the "Local Budget Law," N.J.S.40A:4-1 et seq., when the director finds that the exemption impairs the fiscal integrity or solvency of any such municipality.

    f. The director shall retain jurisdiction over any appeal by an aggrieved party of the action by the governing body of an exempt municipality in adopting an annual budget.

    2. This act shall take effect immediately.

STATEMENT

    This bill would exempt municipalities in sound financial condition, as defined by the Local Finance Board, from annual budget certification and examination by the Director of the Division of Local Government Services in the Department of Community Affairs. Instead, the mayor and the chief financial officer of a municipality would each certify to the director that they have examined the budget and determined that it complies with the requirements set forth under the "Local Budget Law," N.J.S.40A:4-1 et seq., the cap law (P.L.1976, c.68; C.40A:4-45.1 et seq.), and regulations promulgated by the Local Finance Board. The director would be required to examine the budget of each municipality at least every third year. Municipalities determined by the director to be in unsound financial condition would not be exempt from annual State budget certifications and examinations.

Revises requirement of annual State review of municipal budgets.