New Jersey Statutes 52:27BBBB-4. Determination of whether municipality is in need of stabilization and recovery
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Terms Used In New Jersey Statutes 52:27BBBB-4
- Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
- Balanced budget: A budget in which receipts equal outlays.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- month: means a calendar month, and the word "year" means a calendar year. See New Jersey Statutes 1:1-2
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- State: extends to and includes any State, territory or possession of the United States, the District of Columbia and the Canal Zone. See New Jersey Statutes 1:1-2
4. a. The director may ascertain whether a municipality should be deemed a municipality in need of stabilization and recovery. If the director ascertains that a municipality should be deemed a municipality in need of stabilization and recovery, the director shall recommend that the commissioner make that determination. Within 7 days of receipt of the director’s recommendation, the commissioner shall make the final determination of whether to deem the municipality a municipality in need of stabilization and recovery and subject to the provisions of P.L.2016, c.4 (C. 52:27BBBB-1 et al.). The commissioner shall notify the Governor, the State Treasurer, and the director when a determination has been made and a municipality is subject to the provisions of P.L.2016, c.4 (C. 52:27BBBB-1 et al.). The director shall then notify the municipal clerk, or other appropriate municipal official of the municipality, in writing, of the determination. A municipality in need of stabilization and recovery shall be subject to the provisions of P.L.2016, c.4 (C. 52:27BBBB-1 et al.) until the end of the recovery plan adopted pursuant to subsection b. of this section and approved by the commissioner pursuant to subsection c. of this section, or until the first day of the 109th month next following the date on which the municipality becomes subject to the requirements and provisions of sections 5 through 11, 14, 16, and 17 of P.L.2016, c.4 (C. 52:27BBBB-5 et al.), as applicable.
b. Not later than 150 days next following the commissioner’s final determination that a municipality is in need of stabilization and recovery, the governing body of the municipality in need of stabilization and recovery shall prepare and adopt a resolution containing a nine-year recovery plan, commencing on the first day of the first fiscal year of the municipality next following the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.), that is sufficient to effectuate the financial stability of the municipality. The recovery plan shall establish processes and identify specific actions undertaken by the municipality following the determination that it is a municipality in need of stabilization and recovery pursuant to subsection a. of this section, and actions to be undertaken by the municipality if the recovery plan is approved pursuant to subsection c. of this section. The recovery plan shall include a proposed balanced budget for the first fiscal year of the municipality next following the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.), which shall be consistent with the “Local Budget Law,” N.J.S. 40A:4-1 et seq., except as otherwise stated in this subsection. There shall be no requirement for the proposed balanced budget to identify amounts outstanding, including accrued interest, on any obligation to the State of New Jersey, including any office, department, division, bureau, board, commission, or agency of the State, for deferred pension and health benefit payments for the first fiscal year of the municipality prior to the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.). For the purposes of the proposed budget prepared pursuant to this subsection, the municipality in need of stabilization and recovery is not required to appropriate the total amount necessary for the extinguishment of all outstanding property tax appeal debt. For the purposes of the proposed budget prepared pursuant to this subsection, the municipality in need of stabilization and recovery shall identify and account for the loss in revenue from any anticipated set-offs arising from all such property tax appeal debt or identify and appropriate for any amounts owed in the first fiscal year of the municipality next following the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.) for the continued repayment of debts related to all property tax appeals settled by the municipality. To effectuate financial stability, in addition to the proposed balanced budget, the recovery plan shall include detailed processes to:
(1) achieve sustainable net reductions in the municipality’s general appropriations to be commensurate with revenues anticipated in the proposed budget;
(2) ensure that the municipality remits to the county in which it is located the full amount of all property taxes or payments in lieu of property taxes owed by law to the county on the dates on which the payments are due;
(3) ensure that the municipality remits to the school district serving the municipality the full amount of all property taxes or payments in lieu of property taxes owed by law to the school district on the dates the payments are due;
(4) schedule for the repayment of debts, including any accrued interest, as of the date of the commissioner’s determination pursuant to subsection a. of this section, including, without limitation, any money owed to the State of New Jersey, including any office, department, division, bureau, board, commission, or agency of the State, for deferred pension and health benefits payments;
(5) account for future payments on bonded debt and unbonded debt, including, without limitation, any general obligation bonds, refunding bonds, pension refunding bonds, tax appeal bonds, and unbonded tax appeal settlements, obligations, liens, or judgments known to the municipality as of the date of the commissioner’s determination pursuant to subsection a. of this section;
(6) account for future payments on any off balance sheet liabilities of the municipality known to the municipality as of the date of the commissioner’s determination pursuant to subsection a. of this section;
(7) ensure the repayment of the loan in accordance with section 18 of P.L.2016, c.4 (C. 52:27BBBB-16), including accrued interest; and
(8) increase the municipality’s revenues, including, without limitation, through the establishment of long-term economic and land use development strategies.
c. The recovery plan shall be submitted by the governing body to the commissioner. The commissioner, within five business days next following the day of receipt of the plan, shall determine, in the commissioner’s sole and exclusive discretion, whether the recovery plan is likely or is not likely to achieve financial stability for the municipality. If the commissioner determines that the recovery plan is likely to achieve financial stability for the municipality, the plan shall be effective and the provisions of sections 5 through 11, 14, 16, and 17 of P.L.2016, c.4 (C. 52:27BBBB-5 through C.52:27BBBB-9, C.52:27BBBB-12, C.52:27BBBB-14, and C. 52:27BBBB-15) shall not be applicable with respect to the municipality in need of stabilization and recovery. If the commissioner determines that the recovery plan is likely to achieve financial stability for the municipality, the plan shall be implemented beginning on the first day of the first fiscal year of the municipality next following the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.) and the municipality in need of stabilization and recovery shall strictly comply with the recovery plan. If the commissioner determines that the plan is not likely to achieve financial stability for the municipality, if the municipality fails to submit a plan, if the commissioner determines that the municipality is not strictly complying with a recovery plan approved by the commissioner pursuant to this subsection, or if the commissioner determines that a recovery plan approved by the commissioner pursuant to this subsection is no longer likely to achieve financial stability, the municipality shall be immediately subject to the requirements and provisions of sections 5 through 11, 14, 16, and 17 of P.L.2016, c.4 (C. 52:27BBBB-5 et al.) for as long as the municipality is deemed a municipality in need of stabilization and recovery.
b. Not later than 150 days next following the commissioner’s final determination that a municipality is in need of stabilization and recovery, the governing body of the municipality in need of stabilization and recovery shall prepare and adopt a resolution containing a nine-year recovery plan, commencing on the first day of the first fiscal year of the municipality next following the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.), that is sufficient to effectuate the financial stability of the municipality. The recovery plan shall establish processes and identify specific actions undertaken by the municipality following the determination that it is a municipality in need of stabilization and recovery pursuant to subsection a. of this section, and actions to be undertaken by the municipality if the recovery plan is approved pursuant to subsection c. of this section. The recovery plan shall include a proposed balanced budget for the first fiscal year of the municipality next following the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.), which shall be consistent with the “Local Budget Law,” N.J.S. 40A:4-1 et seq., except as otherwise stated in this subsection. There shall be no requirement for the proposed balanced budget to identify amounts outstanding, including accrued interest, on any obligation to the State of New Jersey, including any office, department, division, bureau, board, commission, or agency of the State, for deferred pension and health benefit payments for the first fiscal year of the municipality prior to the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.). For the purposes of the proposed budget prepared pursuant to this subsection, the municipality in need of stabilization and recovery is not required to appropriate the total amount necessary for the extinguishment of all outstanding property tax appeal debt. For the purposes of the proposed budget prepared pursuant to this subsection, the municipality in need of stabilization and recovery shall identify and account for the loss in revenue from any anticipated set-offs arising from all such property tax appeal debt or identify and appropriate for any amounts owed in the first fiscal year of the municipality next following the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.) for the continued repayment of debts related to all property tax appeals settled by the municipality. To effectuate financial stability, in addition to the proposed balanced budget, the recovery plan shall include detailed processes to:
(1) achieve sustainable net reductions in the municipality’s general appropriations to be commensurate with revenues anticipated in the proposed budget;
(2) ensure that the municipality remits to the county in which it is located the full amount of all property taxes or payments in lieu of property taxes owed by law to the county on the dates on which the payments are due;
(3) ensure that the municipality remits to the school district serving the municipality the full amount of all property taxes or payments in lieu of property taxes owed by law to the school district on the dates the payments are due;
(4) schedule for the repayment of debts, including any accrued interest, as of the date of the commissioner’s determination pursuant to subsection a. of this section, including, without limitation, any money owed to the State of New Jersey, including any office, department, division, bureau, board, commission, or agency of the State, for deferred pension and health benefits payments;
(5) account for future payments on bonded debt and unbonded debt, including, without limitation, any general obligation bonds, refunding bonds, pension refunding bonds, tax appeal bonds, and unbonded tax appeal settlements, obligations, liens, or judgments known to the municipality as of the date of the commissioner’s determination pursuant to subsection a. of this section;
(6) account for future payments on any off balance sheet liabilities of the municipality known to the municipality as of the date of the commissioner’s determination pursuant to subsection a. of this section;
(7) ensure the repayment of the loan in accordance with section 18 of P.L.2016, c.4 (C. 52:27BBBB-16), including accrued interest; and
(8) increase the municipality’s revenues, including, without limitation, through the establishment of long-term economic and land use development strategies.
c. The recovery plan shall be submitted by the governing body to the commissioner. The commissioner, within five business days next following the day of receipt of the plan, shall determine, in the commissioner’s sole and exclusive discretion, whether the recovery plan is likely or is not likely to achieve financial stability for the municipality. If the commissioner determines that the recovery plan is likely to achieve financial stability for the municipality, the plan shall be effective and the provisions of sections 5 through 11, 14, 16, and 17 of P.L.2016, c.4 (C. 52:27BBBB-5 through C.52:27BBBB-9, C.52:27BBBB-12, C.52:27BBBB-14, and C. 52:27BBBB-15) shall not be applicable with respect to the municipality in need of stabilization and recovery. If the commissioner determines that the recovery plan is likely to achieve financial stability for the municipality, the plan shall be implemented beginning on the first day of the first fiscal year of the municipality next following the enactment of P.L.2016, c.4 (C. 52:27BBBB-1 et al.) and the municipality in need of stabilization and recovery shall strictly comply with the recovery plan. If the commissioner determines that the plan is not likely to achieve financial stability for the municipality, if the municipality fails to submit a plan, if the commissioner determines that the municipality is not strictly complying with a recovery plan approved by the commissioner pursuant to this subsection, or if the commissioner determines that a recovery plan approved by the commissioner pursuant to this subsection is no longer likely to achieve financial stability, the municipality shall be immediately subject to the requirements and provisions of sections 5 through 11, 14, 16, and 17 of P.L.2016, c.4 (C. 52:27BBBB-5 et al.) for as long as the municipality is deemed a municipality in need of stabilization and recovery.
L.2016, c.4, s.4; amended 2021, c.124, s.1.