N.J. Stat. tit. 52, ch. 27

in effect

N.J. Stat. § 52:27-1 Local Government Board to be constituted the "Municipal Finance Commission"

All the powers and duties formerly exercised and performed by the Municipal Finance Commission and vested in the Local Government Board of the State Department of Local Government by chapter three hundred eighty-five of the laws of one thousand nine hundred and thirty-nine and in the Local Government Board of the Division of Local Government in the State Department of Taxation and Finance by the effect of chapter one hundred twelve of the laws of one thousand nine hundred and forty-four shall continue to be exercised and performed by the Local Government Board of said division, and the said Local Government Board shall be constituted the Municipal Finance Commission, hereinafter, in this chapter, called "Municipal Finance Commission" or "commission." Amended by L.1947, c. 119, p. 583, s. 1.

N.J. Stat. § 52:27-2 Action where municipality defaults; judgment; powers and duties of commission

Whenever it shall be made to appear to the Superior Court in an action brought by or on behalf of the holder of any notes or bonds of any municipality of this State against the municipality, that the municipality has defaulted for over sixty days in the payment of the principal or interest of any of its outstanding notes or bonds held by the plaintiff, the court may proceed in the action in a summary manner or otherwise. If it shall be established to the satisfaction of the court that the municipality is so in default, it may enter judgment to that effect. Upon the entry of the judgment, the commission shall have and exercise with respect to such municipality the powers and duties prescribed by this chapter. Amended by L.1953, c. 49, p. 864, s. 27.

N.J. Stat. § 52:27-3 Resolution by municipality declaring inability to meet obligations; action in Superior Court; commission to function

Any municipality may file with the Clerk of the Superior Court a certified copy of a resolution adopted by the governing body of the municipality, reciting in general terms that due to unusual conditions the municipality is not in a position to meet its obligations when due, in spite of the endeavors of its officers, and institute a civil action in the Superior Court, making the Director of the Division of Local Government a defendant and making application that the commission function in the municipality. The court may proceed in the action in a summary manner or otherwise. If it shall be established to the satisfaction of the court that the municipality is so unable to meet its obligations, it may enter judgment to that effect. Upon the entry of the judgment, the commission shall function in such municipality with all the powers and duties conferred by this chapter. Amended by L.1953, c. 49, p. 865, s. 28.

N.J. Stat. § 52:27-4 Duration of commission in municipality; subsequent powers of Director of Division of Local Government

The commission shall continue in force in such municipality, and shall exercise the powers and perform the duties conferred by this chapter until all bonds or notes or other indebtedness of the municipality which has fallen due, and all bonds or notes which will fall due within one year, and the interest thereon, have been paid or funded or refunded, or the payment thereof in cash adequately provided for by a cash reserve, excepting tax anticipation or tax revenue notes or bonds of the current year, at which time its authority under this chapter shall cease. Thereafter the Director of the Division of Local Government in the State Department of Taxation and Finance shall have the power to continue the employment of the auditor as provided for in section 52:27-6 of this Title, and to exercise the powers of the commission under section 52:27-22 of this Title, until the gross and net debt of such municipality, including notes or bonds issued under this chapter, is within all statutory limits, at which time his authority under this chapter shall cease. Amended by L.1947, c. 119, p. 583, s. 2.

N.J. Stat. § 52:27-5 Powers of commission and director to cease upon annulment of order adjudging municipality in default

Whenever the Superior Court has heretofore made or shall hereafter make an order or judgment annulling, vacating and discharging any order or judgment theretofore made by it pursuant to this chapter adjudging that the municipality has defaulted in the payment of the principal or interest of any of its outstanding notes or bonds, the commission shall cease to continue in force in such municipality and neither the commission nor the said director shall thereafter exercise any powers or perform any duties in and for such municipality pursuant to this chapter, provided that the commission shall have heretofore or hereafter determined by resolution that it is not functioning in said municipality. Amended by L.1947, c. 119, p. 584, s. 3; L.1953, c. 49, p. 865, s. 29.

N.J. Stat. § 52:27-6 Secretary, auditor and other assistants; limitation on expenses

For the purpose of enabling the commission to carry out this chapter it may appoint a secretary and counsel, employ an auditor and such other assistants, legal, clerical or otherwise, and fix their duties, terms of service and compensation, and incur such other expenses as it may deem necessary, but no expenses (other than expenses directly attributable to the municipality, such as costs of issuing notes or bonds of the municipality and the costs of audit) shall be incurred exceeding ten thousand dollars ($10,000.00) in any one municipal fiscal year for any one municipality without the approval of a judge of the Superior Court. Amended by L.1953, c. 49, p. 866, s. 30.

N.J. Stat. § 52:27-7 Duties of secretary

The secretary shall keep minutes of the transactions and proceedings of the commission and shall be the official reporter of the proceedings of the commission.

N.J. Stat. § 52:27-8 Office for auditor; access to books and records

The auditor employed by the commission shall have an adequate office in the municipal building, if any, and shall have access to all books of account, records, papers and memoranda of such municipality.

N.J. Stat. § 52:27-9 Warrants and checks to be countersigned by auditor

All warrants, checks or other instruments for the withdrawal or transfer of funds of the municipality shall be submitted to such auditor for his countersignature, and no banking institution in which funds of the municipality have heretofore been or shall hereafter be deposited shall honor warrants or checks drawn thereon unless the countersignature of such auditor shall appear on the face of such instruments.

N.J. Stat. § 52:27-10 Rules; seal

The commission may make all needful rules for its government and other proceedings not inconsistent with this chapter, and shall have and adopt a common seal.

N.J. Stat. § 52:27-11 Majority may act; hearing; single member may sit

The act of a majority of the commission shall be deemed the act of the commission. The commission may hold hearings and administer oaths to witnesses. The members of the commission may sit singly for the purpose of holding public hearings.

N.J. Stat. § 52:27-12 Subpoenas; failure to obey or refusal to answer questions

The commission may issue subpoenas, signed by a majority of the commission, to compel attendance of witnesses before it and the production of books, papers and records. Any failure to obey any subpoena so issued or refusal to answer questions propounded by the commission, shall be punishable by the Superior Court in the same manner as a similar failure or refusal would be punishable in a case pending in such court. Amended by L.1953, c. 49, p. 866, s. 31.

N.J. Stat. § 52:27-13 Commission may carry out directions not complied with by municipality

Whenever any direction of the commission authorized under this chapter has not been fully performed or carried out by the officials of the municipality affected, the commission may perform directly, or cause to be performed by its agents, in the name of the municipality, any act so directed by the commission, including the power to execute, sell, issue and deliver any bonds or notes directed to be issued under a resolution certified in accordance with section 52:27-14 of this title.

N.J. Stat. § 52:27-13.1 Powers and duties of auditor

Whenever, pursuant to this chapter, the commission shall function in any municipality, the auditor appointed by the commission in and for such municipality shall, upon the adoption by the commission of a resolution providing therefor, have with respect to such municipality authority to recommend the tentative annual budget to the governing body thereof and to the commission; to review all contracts prior to their execution and their authorization by the governing body; to make recommendations concerning all capital improvements; to attend all meetings of the governing body with the right to take part in discussions but without the right to vote on any matters; to investigate the affairs of any department, officer, department head, employee, subordinate or assistant of such municipality; and to make recommendations with respect to any or all matters aforesaid both to the governing body and to the commission.

N.J. Stat. § 52:27-13.2 Certifying failure of municipal officer or employee to perform duties; removal or suspension; appointment of another

Whenever, pursuant to this chapter, the commission shall function in a municipality, it shall have, in addition to the powers granted in sections 52:27-13.1 of this title, the power, and it shall be its duty, to certify by resolution to the governing body and to the officer or employee concerned any failure on the part of such officer or employee of such municipality to perform any duty imposed upon such officer or employee under the provisions of any statute, local ordinance or regulation. Unless prior to the thirtieth day following the date of such certification, the governing body and the commission shall by resolution declare that such officer or employee has satisfactorily undertaken the performance of such duty, the governing body shall by resolution either remove, or suspend, with or without pay, such officer or employee; but nothing herein contained shall be deemed to authorize the removal or suspension hereunder without pay of any elected officer, but such officer may be suspended hereunder with pay for the remainder of his term of office. Upon the removal or suspension hereunder of any officer or employee, it shall be the duty of the governing body, with the concurrence and approval of the commission, to appoint a person or persons satisfactory to the governing body and to the commission to perform the duties of such officer or employee. In the event that no such satisfactory person can be found to perform such duties who is a resident of the municipality, it shall be lawful to appoint a person residing outside of the municipality.

N.J. Stat. § 52:27-13.3 Special collectors; appointment

Whenever, pursuant to this chapter, the commission shall function in a municipality, it shall have, in addition to the powers granted in sections 52:27-13.1 and 52:27-13.2 of this title, the power by resolution to recommend to the governing body of such municipality the appointment of one or more persons to act as special collectors of delinquent taxes or any other revenues in such municipality. Thereupon it shall be the duty of the governing body, with the concurrence and approval of the commission, to appoint a person or persons satisfactory to the governing body and to the commission to act as such special collector or collectors and to fix his or their compensation, and it shall be lawful so to appoint a person or persons residing outside of the municipality.

N.J. Stat. § 52:27-13.4 Application of proceeds of taxes

The commission shall have power from time to time by resolution to direct that for such period as may be stated in such resolution the proceeds of any taxes collected, received, or realized in any manner during such period shall be applied equally and ratably to the purposes for which such taxes were levied.

N.J. Stat. § 52:27-13.5 Manner of certifying resolution; binding effect

Any resolution adopted by the commission pursuant to sections 52:27-13.1 to 52:27-13.4 of this title may be certified to the municipality by the commission in the manner provided in section 52:27-64 of this title, and when so certified the provisions of such resolution shall be binding upon such municipality.

N.J. Stat. § 52:27-14 Funding or refunding indebtedness; resolution by commission

The commission may from time to time prepare and certify to the governing body of any municipality in which the commission is functioning, resolutions providing for the funding or refunding of notes or bonds, or other indebtedness of the municipality, and the interest thereon, which the commission shall have found after public hearing to be outstanding and unpaid and to be due or to become due.

N.J. Stat. § 52:27-15 Public hearing on resolution

Any proposed resolution providing for the issuance of notes or bonds, if such notes or bonds are payable more than one year from the date of issue, shall be so certified only after a public hearing by the commission, but no resolution or amendment thereto determining or altering the form of notes or bonds or providing for their sale, execution or delivery shall require any public hearing before such certification.

N.J. Stat. § 52:27-16 Adoption of resolution by municipality

Such resolution shall, on direction of the commission, be adopted by the proper officials of such municipality in the form certified by the commission.

N.J. Stat. § 52:27-17 Other laws not applicable; debt statements as including obligations issued after December 31, 1946

Such resolutions and any notes or bonds issued thereunder shall not be subject to the limitations or other provisions of any other law. Notwithstanding the provisions of any other law, no notes or bonds issued after December thirty-first, one thousand nine hundred and forty-six by any municipality pursuant to this chapter shall be included in computing either the gross debt or the net debt of the municipality in any annual debt statement or in any supplemental debt statement filed in connection with the authorization of bonds or notes for other purposes, unless, by provision or recital in such resolution or in such notes or bonds, the faith and credit of such municipality shall have been pledged for the payment of principal of or interest on such notes or bonds. Amended by L.1947, c. 54, p. 189, s. 1.

N.J. Stat. § 52:27-18 Publication of resolution; when effective; validity

Excepting resolutions determining or altering the form of notes or bonds or providing for their sale, execution or delivery, and resolutions amendatory thereof or supplemental thereto, such resolutions shall be published in a newspaper circulating in the municipality and shall take effect immediately upon such publication. Resolutions not required to be published shall take effect immediately upon adoption by the proper officials of such municipality. Thirty days after taking effect all resolutions shall be conclusively presumed to have been duly and regularly adopted by such municipality, and to comply with the provisions of this and every other law, and the validity of any such resolution shall not thereafter be questioned by either a party plaintiff, or a party defendant, except in a suit, action, or proceeding commenced prior to the expiration of such thirty days.

N.J. Stat. § 52:27-19 Terms and form of notes or bonds; sale or exchange

Subject only to the limitations of this chapter, such resolutions supplemental thereto shall determine the terms and the form of notes or bonds to be issued thereunder, and provide for their sale or exchange and their execution and delivery, by such officers of the municipality as shall be therein designated, and it shall be mandatory upon such officers to sell or exchange and execute and deliver such notes or bonds as so determined and provided.

N.J. Stat. § 52:27-20 Public or private sale of notes or bonds; prices

All such notes or bonds shall be sold in such manner as may be determined by resolution approved in writing by the commission, at public or private sale before or after public offering, or in exchange before or after public offering for any notes or bonds, including interest thereon, to be funded or refunded thereby, at such price or prices, computed in the manner or mode of procedure described by "Acme Tables of Bond Value" (published by Financial Publishing Company, Boston, Massachusetts), as will yield to the purchasers or the holders of the notes or bonds or interest thereon surrendered in exchange income at a rate not exceeding six per centum (6%) per annum to the maturity dates of the several notes or bonds so sold on the money paid or the face amount of notes, bonds and interest surrendered therefor. Such notes or bonds of any authorized issue or any authorized maturity may be sold or exchanged as hereinabove provided from time to time and in such blocks as may be deemed advisable. Amended by L.1941, c. 50, p. 132, s. 1.

N.J. Stat. § 52:27-21 Presumption of validity of notes and bonds

Unless a suit, action or proceeding questioning the validity of notes or bonds, purporting to be issued by virtue of any such resolution, be commenced prior to the expiration of the thirty-day period mentioned in section 52:27-18 of this title, any such notes or bonds reciting that they are issued pursuant to this chapter shall, after their issuance and delivery, if no suit relating thereto is then pending, be conclusively presumed to be fully authorized by all the laws of this state and to have been issued, sold, executed and delivered by the municipality in conformity therewith, and shall not be questioned by the municipality or any taxpayer thereof in any court, anything herein or in other statutes to the contrary notwithstanding.

N.J. Stat. § 52:27-22 Consent of commission to municipality issuing notes or bonds; limitations on municipal expenditures; claims certified

In order to conserve the financial resources of the municipality, its governing body, without the assent in writing of the commission, shall pass no ordinances or resolutions authorizing the issuance of notes or bonds of any kind or character or creating any obligation or indebtedness of the municipality, except tax anticipation or tax revenue notes or bonds for the current year. Nor shall such governing body, without like consent, include in any annual budget or tax ordinance amounts for local expenditures in excess of the like amounts for the preceding annual budget, exclusive of appropriations for the purpose of raising the principal and interest on the public debt. After an appropriation has been approved by the commission, the actual expenditure thereunder shall be made by the municipal authorities, but no claims whether under appropriations approved by the commission, or included in the annual budget or tax ordinance or otherwise, shall be passed for payment by the officers of such municipality until the auditor shall have certified that the same have been examined by him and found to be within appropriations theretofore duly made by the municipality, and that there is or will be available in an appropriate account, sufficient ready funds for such payment.

N.J. Stat. § 52:27-22.1 Scrip or tax anticipation notes or bonds; approval

No municipality of this State which is under the jurisdiction of the municipal finance commission shall hereafter issue any scrip or tax anticipation notes or bonds in payment of payrolls, claims or other obligations or indebtedness of the municipality unless the issuance of such scrip or tax anticipation notes shall be approved, in writing, by the auditor to the municipal finance commission in the same manner as warrants for other like payments are required to be approved. L.1938, c. 169, p. 379, s. 1.

N.J. Stat. § 52:27-22.2 Penalty for violation of act

Any official of any municipality who shall violate the provisions of this act in any municipality under the jurisdiction of the municipal finance commission shall be guilty of a misdemeanor and punished accordingly. L.1938, c. 169, p. 380, s. 2.

N.J. Stat. § 52:27-23 Limitation on school budget when municipality in default

Whenever a municipality in which the commission is functioning has been or shall be in default for twelve months in the payment of interest on any of its bonds or notes or other written evidence of indebtedness (except where the same is under litigation as to its validity, or where the validity thereof has been denied by formal notice given by the municipality, and no suit, action or proceeding to enforce the same has been commenced by the holder); or whenever any such municipality has been or shall be in default for six months in the payment of any part of its regular pay roll, or in the payment of any sums due from the annual tax levy to the state, county or school district, no subsequent budget or tax ordinance or appropriation for local school purposes shall include any amounts in excess of such limits as may be fixed by the commission, exclusive of appropriations for the purpose of raising the principal and interest on the public debt, and exclusive of appropriations to create a reserve fund under the provisions of section 52:27-25 of this title.

N.J. Stat. § 52:27-23.1 Authorized provisions in resolutions authorizing issuance of notes or bonds enumerated; enforcement

To the end that the principal of and interest on the notes or bonds issued hereunder may be further secured and thereby a more favorable sale or exchange effected, any resolution authorizing the issuance of notes or bonds hereunder may contain provisions which shall be a part of the contract with the holders of such notes or bonds as to: a. The amount to be included in any budget or tax ordinance or to be appropriated by or raised by taxation in the municipality in each year for debt service and for reserve or sinking funds, which amount may be expressed in dollars, percentage of total assessed valuations or both, or otherwise; b. The setting aside of reserve or sinking funds, and the amount, securing, regulation, investment, application and disposition thereof; c. The pledging, depositing or trusteeing of moneys to be applied to the payment of the principal of and interest on the notes or bonds, and the securing of such deposits; d. The pledging of taxes, special assessments and other revenues or moneys of the municipality, which are due or to become due, directly to the payment of the principal of and interest on the notes or bonds, or to reserve or sinking funds; e. The use and application of unanticipated income or surplus revenue or both of the municipality; f. Limitations effective for not exceeding ten years from the effective date of such resolution or resolutions on the amount or nature of borrowing or incurring of indebtedness by the municipality; g. The holding of lawful tax sales of property against which there may then or thereafter be outstanding delinquent taxes or assessments or other charges and the foreclosing of the right of redemption with respect to tax titles theretofore or thereafter purchased by the municipality; h. The inclusion in any budget of appropriations as reserves for uncollected taxes, and the amount, computation and disposition thereof and of the proceeds of the tax levy therefor; i. The performance by the municipality of all or any specified provisions of any law relating to the preparation, adoption, and administration of budgets and the levying of taxes in municipalities; j. Appointment of a fiscal agent by the municipality and the powers and duties thereof; k. The approval and continuance of financial and legal practices and policies theretofore established in the municipality, including the functioning of a board established pursuant to section 52:27-29.1; l. The levying of a special tax, in such amount as said resolution may provide, for the payment of the principal of and interest on the notes or bonds, which special tax shall be levied upon all the real and personal property in the municipality subject to taxation in addition to the taxes levied for all other purposes, and shall be assessed, levied and collected in the same manner and at the same time as other taxes upon real and personal property are now or shall hereafter be assessed, levied and collected, and, when collected, shall be deemed trust funds and shall be applied and paid over by the collector or other officer having the custody of the collected taxes solely to the agreed payment of the principal of and interest on the notes or bonds, or if such agreed payment shall have been made, then in such manner and for such purposes as said resolution may provide; m. The terms and conditions upon which any such resolution or any contract entered into thereby may be amended, rescinded or repealed; n. Any other or further course of conduct on the part of the municipality which may tend to improve its credit standing. Any municipality adopting a resolution containing any provision authorized hereunder shall have and possess all of the powers necessary and appropriate for the performance thereof. The provisions of any such resolution shall be enforceable by a proceeding in lieu of prerogative writ or other appropriate action or proceeding instituted by the commission or by the holder of any note or bond on his own behalf, or on behalf of all the holders of such notes or bonds, in either case in any court of competent jurisdiction whether or not there shall have been any default in the payment of the principal of or interest on any such notes or bonds. Amended by L.1938, c. 202, p. 479, s. 1; L.1939, c. 47, p. 66, s. 7; L.1953, c. 49, p. 866, s. 32.

N.J. Stat. § 52:27-23.2 Reserve or sinking funds; payment to sinking fund commission

Any resolution authorizing the issuance of notes or bonds hereunder may provide that any sums required pursuant to such resolution to be set aside by the municipality for reserve or sinking funds shall be paid to the sinking fund commission of such municipality, and all moneys so paid to such commission shall be held and applied by it only as in such resolution provided and shall not be commingled with any other moneys held by such commission. The provisions of chapter 3 of the title Municipalities and Counties (s. 40:3-1 et seq.), in so far as they relate to the creation, setting aside or maintenance of sinking funds and the investment, application and disposition thereof, shall have no application with respect to notes or bonds issued under this chapter or any reserve or sinking funds provided therefor.

N.J. Stat. § 52:27-23.3 Cancellation of notes or bonds; payment of other municipal indebtedness

Any resolution authorizing the issuance of notes or bonds hereunder may provide that the notes, bonds or other obligations of the municipality then held by the sinking fund commission thereof shall be canceled and that other property or funds in the custody of such commission shall be applied to the payment of other indebtedness of the municipality as in such resolution provided, and said commission shall cancel said notes, bonds or other obligations and apply such property or funds accordingly; but nothing herein contained shall be deemed to permit, without the consent of such holder, the impairment of any rights of the holder of any note, bond or other obligation of the municipality for the security or payment of which any such notes, bonds, obligations, property or funds shall be held.

N.J. Stat. § 52:27-24 Terms, provisions, conditions and limitations in notes or bonds; negotiability

All notes or bonds issued under this chapter may be subject to such terms of redemption, with or without premium, and contain such provisions, conditions and limitations with respect to the acceleration of the obligation to pay the principal thereof upon such default in the payment of interest on or principal of any bonds or notes, or in respect to the provisions concerning debt service and sinking fund payments, as the resolution authorizing their issuance may provide. Any notes or bonds issued under this chapter in exchange for any instrument issued under this chapter or any other law may be authorized by such resolution to contain a provision that, in case of default in payment of the principal of or interest on any such note or bond, the holder thereof shall not only have all his rights and remedies thereunder, but in addition shall be reinvested with such of the rights or remedies which he would have had were he then the owner and in possession of the instrument in exchange for which such note or bond shall have been issued as may be specified in such resolution. Such notes or bonds may contain such reference to any special covenants or provisions contained in the resolution authorizing their issuance and such other terms, conditions or provisions not inconsistent herewith deemed by the commission to give such notes or bonds a higher degree of marketability as the resolution or resolutions determining the form of the notes or bonds may provide. All notes or bonds issued under this chapter containing any one or more of such references, terms, provisions or conditions shall be deemed negotiable instruments, the provisions or limitations of any other law to the contrary notwithstanding; but nothing in this section shall be construed to impair the negotiability of any other instruments negotiable under other laws of this state.

N.J. Stat. § 52:27-25 Municipal tax to pay notes and bonds; reserve fund; withdrawals

Any municipality in which the commission is functioning may levy taxes ad valorem upon all taxable property therein for the purpose of paying the principal of or interest on any notes, bonds or other obligations or indebtedness of such municipality issued under this or any other law, except notes or bonds issued after December thirty-first, one thousand nine hundred and forty-six pursuant to this chapter for the payment of principal of or interest on which the faith and credit of the municipality shall not have been pledged by provision or recital in such notes or bonds or in the resolution or resolutions providing for the issuance of such notes or bonds, and such municipality may also provide for a reserve fund for the payment of said principal and interest, which fund shall be under the immediate jurisdiction of the sinking fund commissioners or of a financial officer of the municipality, as the commission shall approve. No money shall be withdrawn from said reserve fund or sinking fund for investment or otherwise without the approval of the commission. Amended by L.1947, c. 54, p. 189, s. 2.

N.J. Stat. § 52:27-26 Compromise or adjustment of delinquent taxes and assessments

The governing body of any municipality in which the commission is functioning may compromise and adjust the whole or any part of any special assessments or taxes delinquent to the municipality, but nothing in this section shall be construed to impair or affect in any way the existing rights and remedies of any holder of a certificate of tax sale, representing any tax title or titles to lands in such municipality sold on account of delinquent taxes or delinquent assessments, or both. No claims of the municipality for taxes or assessments, and interest thereon, in excess of five hundred dollars, shall be compromised without the assent in writing of the commission. All moneys received by the municipality by compromise or adjustment of taxes or special assessments shall, if the commission so provide, be paid only to the account of the reserve fund referred to in section 52:27-25 of this title.

N.J. Stat. § 52:27-27 Assessment, reassessment, etc., of taxable ratables; cost; employment of experts

The commission may require the municipality to cause to be made an assessment, reassessment, valuation, revaluation, appraisal or reappraisal, or any one or all of them, of the taxable ratables of the municipality as the basis for any subsequent tax levy, and the cost thereof, whether or not directed by the commission, shall at the request of the governing body, be included in the amount of indebtedness to be refunded under this chapter. Any tax duplicate based thereon shall be used for all purposes in connection with the levy, apportionment and collection of taxes. For any or all such purposes the governing body of the municipality may employ such experts as it may deem advisable.

N.J. Stat. § 52:27-28 Appeals from taxation

Notice of all appeals from taxation affecting any municipality in which the commission is functioning shall be given by the county board of taxation to the auditor employed by the commission, and the commission shall be entitled to be represented at hearings on all such appeals.

N.J. Stat. § 52:27-29 Installment payments of assessments for local improvements

Whenever, pursuant to this chapter, the commission shall function in any municipality, such municipality may with the approval in writing of such commission extend the period theretofore granted for the payment of assessments for benefits for local improvements, by granting to the owner of the property so assessed the privilege of paying in five additional equal annual installments the amount of all such assessments confirmed and due and payable, by reason of a default or otherwise, as of the date of the resolution hereinafter mentioned, and of the interest thereon and penalties and other charges relating to such assessments accrued to such date. Such action shall be taken by resolution of the governing body of the municipality describing with clearness sufficient for identification the property so affected, the amount of such assessments, interest, penalties and other charges, and the annual dates when the installments of such amount shall thereafter be due and payable. Such resolution shall not take effect until approved in writing by the commission after public notice published in a newspaper having a substantial circulation in the municipality. There need not be a separate resolution for each property or property owner.

N.J. Stat. § 52:27-29.1 Certificate of tax sale or tax title; real estate; sale, exchange, lease or other disposition

The governing body of any municipality in which the commission is or may be functioning may, upon the express consent in writing of the commission, sell, exchange or otherwise dispose of any certificate of tax sale or tax title, standing in the name of the municipality, or sell, exchange, lease or otherwise dispose of any real estate or rights or interests therein owned by the municipality and determined by the governing body to be not needed for public use. Any such sale, exchange, lease or other disposition may be authorized by resolution of the governing body and, subject to the consent of the commission as aforesaid, may be at public or private sale, through a broker, agent or otherwise, for cash or upon credit, for such consideration, and subject to such conditions and commissions, as the governing body in its discretion may determine. All moneys received by the municipality from any such sale, exchange, lease or other disposition shall, if the commission so provide, be paid only to the account of the reserve fund referred to in section 52:27-25 of this Title. The governing body of any municipality in which the commission is or may be functioning may, upon the express consent in writing of the commission, adopt an ordinance providing for the establishment of a board in the municipality to manage and effect the liquidation of assets theretofore acquired by the municipality (and accruals thereto) consisting of real estate or rights or interests therein acquired by virtue of the enforcement of taxes or special assessments and certificates of tax sale or tax titles standing in the name of the municipality. The function of said board shall be to exercise its powers and perform its duties in such fashion as to liquidate such assets as soon as reasonably possible by the realization of reasonable amounts thereon in cash. Without limitation of the foregoing, the powers and duties of said board to manage and effect such liquidation may include power to require the sale or other disposition of such assets or the compromise of sums due to the municipality in respect thereto, subject to such restrictions as such ordinance may provide. The ordinance shall set forth in particularity the powers and duties of said board and shall determine the size of the membership of the board, and shall fix the terms of office of the members of the board and their qualifications and compensation and the method of computing and paying their compensation and the expenses of the board. The ordinance may provide that the compensation of the members of the board shall be determined, in whole or in part, by the assignment judge of the Superior of the county in which the municipality is located, and it shall be the duty of said judge from time to time to make such determination in accordance with the terms of the ordinance. The members of said board may or may not be residents of the municipality and their terms of office may extend for such period as the ordinance may provide. The ordinance may provide that for all the purposes of the local budget law (R.S. 40:2-1 et seq.) said board shall constitute and be governed as a publicly-owned or operated utility or enterprise, or may provide that the compensation of the members of the board and the expenses of the board may be paid out of the proceeds of such liquidation without further budget or other appropriation or tax levy therefor. Upon the adoption of the ordinance, the clerk of the municipality shall file a certified copy thereof with the assignment judge of the Superior Court of the county in which the municipality is located, and it shall thereupon and thereafter be the duty of said judge to appoint the members of said board, and their successors from time to time, in accordance with the terms of the ordinance. It shall be the duty of the governing body and all other officers of the municipality to do and perform all such acts and things as may be required by said board in order for said board to fulfill its function in accordance with the terms of the ordinance and of this section except when, with respect to any particular such act or thing, the governing body shall adopt a resolution questioning the necessity or advisability thereof in order for said board to fulfill its function in accordance with the terms of the ordinance and of this section. Such resolution shall become of no further force and effect ten days after the adoption thereof unless the clerk of the municipality shall have filed a certified copy thereof with the assignment judge of the Superior Court of the county in which the municipality is located. Upon such filing it shall be the duty of said judge, upon such notice to the board and other interested parties as he may direct, to make a summary investigation into the facts and for that purpose he shall have the power to subpoena witnesses and call before him any officers or employees of the municipality or of the board. Said judge shall determine whether said particular act or thing required by the board is necessary or advisable in order for the board to fulfill its function in accordance with the terms of the ordinance and of this section. He shall embody his determination in an order and file the same, together with the said resolution, in the office of the Clerk of the Superior Court. Upon the filing of such order embodying an affirmative determination, the said resolution of the governing body shall be of no further force and effect, and the governing body and other officers of the municipality shall proceed to do and perform such act or thing. If his determination is in the negative the requirement of the board shall be without force or effect and neither the governing body nor any officer of the municipality shall be under any duty to do and perform such act or thing. Amended by L.1938, c. 202, p. 481, s. 2; L.1953, c. 49, p. 868, s. 33.

N.J. Stat. § 52:27-29.2 Acceptance of municipal or school district bonds in payment of tax or assessment title liens authorized; refunding bonds; tax payment certificates

Any municipality in which the commission is functioning may, with the approval of the commission, accept its own bonds and the bonds of the board of education of a coterminous school district, in payment of all or any part of the purchase price of tax title liens and assessment title liens held by such municipality or in payment of all or any part of the purchase price of real property acquired by such municipality through the foreclosure of such tax title liens and assessment title liens and may exchange such tax title liens and assessment title liens and such real property for such bonds at such times and for such prices as the governing body of such municipality shall determine, subject to the approval of the commission. Such municipalities and boards of education may issue refunding bonds in the manner now or hereafter provided in this chapter or any other law for the purpose of refunding all or any part of the balance due to the holders of the bonds presented in payment of such tax title liens and assessment title liens or such real property, and such municipalities and boards of education may also issue nontransferable, noninterest-bearing tax payment certificates in such denominations as may be determined by such municipalities and such boards of education for the purpose of refunding all or any part of the balance due to the holders of the bonds presented in payment of such tax title liens and assessment title liens or such real property, which tax payment certificates shall not be payable in cash but shall be acceptable at their face value in payment of future taxes levied by the state, county or municipality and school district for state, county, local municipal and school district purposes; provided, that such tax payment certificates shall recite on their face that they are nontransferable and noninterest-bearing and not payable in cash but acceptable at their face value only in payment of such future taxes, and provided further that the issuance of such refunding bonds and of such tax payment certificates be approved by the commission. It is the intention of this section that such municipalities and boards of education may issue both refunding bonds and tax payment certificates as herein above provided in such proportions as may be determined by them, or may issue such refunding bonds only or such tax payment certificates only, as may be determined by them, in payment of all or any part of the balance due to the holders of the bonds presented in payment of the purchase price of such tax title liens and assessment title liens or such real property. Tax payment certificates issued under this section shall be authorized and issued in accordance with the procedure for the issuance of refunding bonds, and may be in such form as shall be determined by the governing body of the municipality, and shall be signed by such officers as may be designated by such governing body. No municipality may avail itself of the authority contained in this section for the acceptance of bonds in payment of the purchase price of real property and tax title liens and assessment title liens except that the sale of such property and liens shall be an integral part of the comprehensive refunding program, which program shall have received the consent of the holders of at least eighty-five per cent of the amount of bonds outstanding.

N.J. Stat. § 52:27-30 Expenses of commission to be paid by municipality

The commission shall from time to time certify to the proper officials of the municipality the amount of the commission's expenses, which expenses shall be a legal charge upon the municipality and may be paid by the issuance of emergency notes or bonds, but if not so paid prior to the end of the fiscal year shall be included in the budget of the ensuing year.

N.J. Stat. § 52:27-31 Expenses of issuing notes or bonds and of foreclosure or perfecting title; including in debt to be funded; appropriation

The estimated expense of issuing and selling any notes or bonds under this chapter including estimated cost of printing, advertising, attorneys' fees, execution, certification, exchange, delivery, and any other cost or expense in connection with the formulation, approval, acceptance or consummation of a refinancing operation resulting in the issuance of such notes or bonds, and provision for any estimated discount to be incurred upon the sale or exchange of such notes or bonds, and provision for any estimated cost and expense, including counsel fees, of foreclosing or otherwise perfecting titles to real estate acquired at any sale or sales of real estate for delinquent taxes or special assessments, may be included by the commission in the amount of indebtedness to be funded or refunded under this chapter, or, in whole or in part, may be provided for by appropriation made by the resolution authorizing the issuance of such notes or bonds of available cash on hand. Amended by L.1941, c. 50, p. 132, s. 2; L.1947, c. 54, p. 190, s. 3.

N.J. Stat. § 52:27-32 Article inapplicable to bonds issued after June 1, 1936

This article shall not apply to bonds issued after June first, one thousand nine hundred and thirty-six, by any municipality pursuant to this chapter, nor to actions or proceedings for the enforcement of such bonds, nor to the enforcement of any judgment, decree, levy or execution for the recovery of the amount due on such bonds.

N.J. Stat. § 52:27-32.1 Enforcement of judgments, etc., against municipality stayed; necessity of court order

Whenever the commission shall function in any municipality and so long as it shall continue so to do, no judgment, levy or execution against the municipality or the property thereof for the recovery of the amount due on any bonds, notes or other obligations of the municipality, in the payment of which the municipality has defaulted, shall be enforced until otherwise directed by the Superior Court in an appropriate action or proceeding for such purpose, after notice to the commission; and the enforcement of any such judgment, levy or execution shall be stayed until otherwise directed as aforesaid. Amended by L.1953, c. 49, p. 871, s. 34.

N.J. Stat. § 52:27-33 Proceedings against municipality for assessment or collection of taxes prohibited; exceptions; remedies of holders of unpaid claims against municipality

Whenever the commission shall function in any municipality and so long as it shall continue so to do, no action or proceeding of any kind, either direct or ancillary, including a proceeding in lieu of prerogative writ, shall be brought against such municipality or any public officers for the assessment, levy or collection of taxes by or for such municipality and any and all actions or proceedings therefor shall be and they hereby are stayed; except that first, the Superior Court, after notice to the commission, may authorize one or more creditors of such municipality to bring and maintain an action or proceeding therefor in the Superior Court, which shall be brought for the benefit of themselves and all other creditors of such municipality and in which all other creditors of such municipality shall have the right to intervene and assert their claim and in which all other creditors of such municipality may, and the commission shall, be made parties in such manner and upon such notice as the court shall prescribe; and except that, second, the commission may bring and maintain an action or actions or a proceeding in lieu of prerogative writ or any other appropriate proceeding or proceedings for the assessment, levy or collection of taxes by such municipality for the payment of principal or interest of the indebtedness of the municipality found to be outstanding as provided in section 52:27-14 of this Title. Without limiting its power otherwise to direct by a proceeding in lieu of prerogative writ the assessment, levy or collection of taxes, the Superior Court, in the action or proceeding aforesaid may, to the extent which it shall deem just and equitable, afford to the holders collectively of any due and unpaid claims against a municipality any remedy which might be afforded under any other law to any individual creditor in any proceeding in lieu of prerogative writ for the assessment, levy or collection of taxes, to the same extent as if there had been an entry of judgment in their favor, issuance of execution and return thereof unsatisfied, service thereof upon public officials and performance of any and all other conditions precedent to the affording of such relief by a proceeding in lieu of prerogative writ under such other law; provided, that the court be first satisfied from proof submitted by affidavit or otherwise that the claims for the enforcement of which such remedy is sought are claims upon which a judgment could be obtained. Amended by L.1953, c. 49, p. 872, s. 35.

N.J. Stat. § 52:27-33.1 Taxes collected by municipality paid to designated banks

Whenever the commission shall function in any municipality and so long as it shall continue so to do, it may prepare and certify to the governing body of the municipality resolutions providing in substance that any and all moneys collected as taxes by the municipality over and above an amount sufficient to pay the reasonable current operating expenditures of the municipality (not including therein the principal or interest of any bonds or notes of the municipality) and such capital expenditures, if any, as may be approved by the commission as reasonably necessary to preserve the value of the taxable property within the municipality, shall be paid by the municipality to such banks or trust companies as the governing body of the municipality may designate.

N.J. Stat. § 52:27-33.2 Action in Superior Court to determine application and distribution to creditors of property or funds of municipality

Whenever the commission shall function in any municipality and so long as it shall continue to do so, no action or proceeding shall be brought or prosecuted, the purpose of which is to affect the disposition of property or funds owned or controlled by the municipality, except as provided in this chapter. If any such municipality has in its possession or under its control, or there is in the possession or under the control of the commission, any property or funds of such municipality which are or may be available for the payment of interest or principal upon any of the debts of such municipality (over and above the payment of the current operating expenses of the municipality and the maintenance of a reasonable working capital), then such municipality in its discretion may bring an action, or if directed by the commission shall do so, in the Superior Court to determine the application and distribution of such property or funds to and among the creditors of the municipality, and in any such case the court in its discretion may permit an action for relief of the same character to be made by any creditor of the municipality. In any such action all creditors of the municipality shall be made parties thereto, and any creditor may appear therein and assert his rights to receive all or any part of such property or funds. The court may proceed in the action in a summary manner or otherwise. In case any such action shall be instituted, the court may direct the municipality to make no payments from any of such moneys so available until the determination of the action or until permitted by the court. Unless and until such a direction shall be made, payments may be made by such municipality on account of principal and interest as the municipality may determine and as may be approved by the commission. Amended by L.1953, c. 49, p. 873, s. 36.

N.J. Stat. § 52:27-33.3 Court may vacate, modify or restrict statutory stay

Upon the application of any creditor made upon notice to the municipality and the commission, the Superior Court may vacate, modify or restrict any statutory stay contained in this article. Amended by L.1953, c. 49, p. 874, s. 37.

N.J. Stat. § 52:27-34 Action by creditors; plan of adjustment or composition; parties

The Superior Court may take jurisdiction of an action brought by any creditors of a municipality in which the commission shall function, where the action is instituted by the plaintiff or plaintiffs on behalf of themselves and all other creditors of the municipality, for the approval of a plan of adjustment or composition of the claims of all creditors or of a class or classes of them similarly situated. The court may proceed in the action in a summary manner or otherwise. The municipality, the commission and all creditors of the municipality shall be made parties to the action and any creditor of the municipality may appear and assert his rights. Amended by L.1953, c. 49, p. 874, s. 38.

N.J. Stat. § 52:27-36 Approval by Supreme Court justice of plan of adjustment or composition; findings

In any such action, after hearing on the plan proposed or on the plan as modified by order and if such plan as proposed or modified is approved in writing by creditors representing eighty-five per centum (85%) in amount of the indebtedness affected thereby and by the municipality and the commission, the Superior Court may authorize and approve such adjustment or composition if the court determines (1) that the municipality is unable to pay in full according to their terms the claims proposed to be adjusted or composed, and perform its public functions and preserve the value of property subject to taxation, (2) that the adjustment or composition is substantially measured by the capacity of the municipality to pay, (3) that it is in the interest of all the creditors affected thereby, and (4) that it is not detrimental to other creditors of the municipality. Amended by L.1953, c. 49, p. 875, s. 40.

N.J. Stat. § 52:27-37 Approved plan binding on all creditors; substituted obligations

The plan of adjustment so authorized and approved shall forthwith and without any further action of any kind be binding upon all the creditors included in the plan, whether or not they appear in the proceeding. In so far as said plan provides for the substitution of any new bonds, notes or other obligations of the municipality in place of any outstanding bonds, notes or other obligations, or claims then outstanding, such substitution shall be effectual from and after such date as may be fixed in such order.

N.J. Stat. § 52:27-38 Continuance of stay of proceedings against municipality; action by creditor to enforce claim restricted

After the institution of any action or proceeding provided for by this article and pending the determination thereof, the Superior Court may by order continue the stay provided by sections 52:27-32.1 and 52:27-33 of this Title. In the event that a plan shall be authorized and approved pursuant to this article the court shall retain jurisdiction of such action or proceeding and thereafter no creditor whose claim is included in such adjustment or composition shall be authorized to bring any action or proceeding of any kind or character for the enforcement of his claim except with the permission of the court and then only to recover and enforce the rights given him by the adjustment or composition. Amended by L.1953, c. 49, p. 875, s. 41.

N.J. Stat. § 52:27-39 Reduction in principal of outstanding notes or bonds prohibited

Notwithstanding any provisions of this article the commission shall not approve any adjustment or composition, or plan presented pursuant to this article, which provides for the reduction in the principal amount of any outstanding notes or bonds of the municipality.

N.J. Stat. § 52:27-39.1 State, State school or county taxes, compromise of county's claim against certain municipalities for

If a municipality in which the municipal finance commission may be or may have been functioning shall for eight years have been in arrears in the payment of the whole or any part of any taxes levied in the municipality for either State, State school or county purposes or any interest thereon, the county may in accordance with this act enter into a compromise settlement in full discharge of all claim of such county and its treasurer for any taxes for State, State school or county purposes, or any interest thereon, or for any note or bond or other receivable, due and in arrears at the date of such settlement from the municipality, together with any interest thereon, whether such taxes, interest or other receivable have been due and in arrears for more or for less than eight years. L.1946, c. 35, p. 76, s. 1.

N.J. Stat. § 52:27-39.2 Resolution of county board required; previous payment by county to State required

Such compromise settlement shall be entered into only upon authorization by resolution of the board of chosen freeholders of the county and only if prior thereto the county or its treasurer shall have paid to the State the full amount of any taxes included in such settlement levied for State or State school purposes. L.1946, c. 35, p. 77, s. 2.

N.J. Stat. § 52:27-39.3 Settlement may include what; terms; consideration

Such compromise settlement may include and be made on such terms as the board of chosen freeholders may deem fair and equitable and, without limiting the generality of the foregoing, may provide for the acceptance by the county or its treasurer in full and final discharge of the claim covered thereby of a sum in cash or of notes or bonds, or both, or of any other consideration, whether or not the face value or market value of such considerations shall equal the amount of such claim. L.1946, c. 35, p. 77, s. 3.

N.J. Stat. § 52:27-39.4 County treasurer to perform compromise settlement--disposition of consideration received

The county treasurer shall carry out and perform any such compromise settlement so authorized in accordance with its terms and provisions. Any notes or bonds or other considerations received other than cash may be sold, exchanged, renewed, refinanced or otherwise disposed of at any time or from time to time at such price or prices and upon such terms as the board of chosen freeholders may by resolution authorize, and such notes or bonds, or other obligations received in exchange, renewal or refinancing thereof, shall be enforceable by the county in accordance only with their terms and the laws governing the same. L.1946, c. 35, p. 77, s. 4.

N.J. Stat. § 52:27-39.5 Effective date; limitation of time for adoption of resolution

This act shall take effect immediately, but no compromise settlement shall be entered into under this act unless a resolution authorizing the same shall have been adopted pursuant to section two of this act within two years from the effective date of this act. L.1946, c. 35, p. 77, s. 5.

N.J. Stat. § 52:27-40 Filing of petition by political subdivision; approval of commission

Any county, municipality, school district or other political subdivision of this State, hereinafter in this article referred to as "political subdivision," shall have power to file a petition or petitions with any United States court or court in bankruptcy under an act of the Congress of the United States entitled "An act to establish a uniform system of bankruptcy throughout the United States," approved July first, one thousand eight hundred and ninety-eight, and acts amendatory thereof and supplementary thereto, as the same may be amended from time to time, hereinafter in this article referred to as the "municipal bankruptcy act," for the purpose of effecting a plan of readjustment of its debts or for the composition of its debts, which adjustment and composition are hereinafter interchangeably referred to as readjustment. Such petition or petitions shall not be so filed unless the approval of the municipal finance commission, which is hereby constituted a commission for the purposes of this article, be first had and obtained. Amended by L.1938, c. 243, p. 551, s. 1.

N.J. Stat. § 52:27-41 Ordinance or resolution of governing body to authorize filing of petition

The filing of such petition shall be authorized only by ordinance of the governing body of the political subdivision adopted by the affirmative vote of not less than two-thirds of all the members elected to such governing body, except that in the case of a county or of a school district governed by the provisions of chapter 7 of the title Education (s. 18:7-1 et seq.), such filing shall be authorized by resolution of the governing body adopted by the affirmative vote of not less than two-thirds of all the members elected to such governing body. For the purposes of this article the board of education of a school district governed by the provisions of said chapter 7 shall be deemed to be the "governing body" of such school district.

N.J. Stat. § 52:27-42 Approval by commission of readjustment plan necessary

No plan of readjustment filed with or in the proceedings upon any such petition shall be approved by the court or put into temporary effect or finally confirmed without the approval of the commission. No political subdivision shall so file any such plan which shall not have been approved by the commission nor shall any political subdivision accept any such plan as thereafter changed or modified without express authority from the commission to do so. Amended by L.1938, c. 243, p. 551, s. 2.

N.J. Stat. § 52:27-43 Commission authorized to approve petition and plan; restrictions

The commission may in its discretion give its approval in the manner provided by this article to the filing of any petition for the purpose of effecting readjustment of its debt which any political subdivision proposes to file, and of any plan of readjustment filed with or in the proceedings upon any such petition; but no such plan of readjustment shall provide for the payment of fees, compensation, reimbursement or other allowances for attorneys, agents, committees, or other representatives of creditors of the political subdivision, except subject to the express approval in writing by the commission of every such payment. Amended by L.1946, c. 31, p. 72, s. 1.

N.J. Stat. § 52:27-44 Powers of political subdivision upon confirmation of readjustment plan; issuance of bonds or notes

Upon the confirmation of any plan of readjustment approved by the commission, the political subdivision assenting to such plan of readjustment may, by ordinance in the case of a municipality, by resolution in the case of a county, and by resolution of the board of education in the case of a school district governed by the provisions of chapter seven of the Title Education (s. 18:7-1 et seq.), authorize, issue, sell and deliver such bonds, notes or other obligations and enter into such agreements and do such other acts and things as may be required of it pursuant to said plan of readjustment. Such ordinance or resolution, as the case may be, shall not take effect until approved by the commission, and shall provide for the issuance of bonds in one or more series, bearing such date or dates, maturing at such time or times, bearing interest at such rate or rates of interest, not exceeding six per centum (6%) per annum, payable at such time or times, in such denominations, in such form, either coupon or registered, carrying such registration privileges, payable in such medium of payment at such place or places, subject to such terms of redemption, with or without premium, as the commission may approve. The foregoing powers shall be deemed to be in addition to and not in substitution for any powers which such political subdivision would, except for the foregoing grant thereof, have under any other provision of law. Amended by L.1938, c. 243, p. 552, s. 3; L.1947, c. 54, p. 190, s. 4.

N.J. Stat. § 52:27-45 Request for approval of petition, plan, etc.; procedure

The approval of any petition, plan of readjustment or other papers to be filed in any United States court or court in bankruptcy, or of any ordinance or resolution shall be requested by filing in the office of the commission a certified copy of a resolution of the governing body of the political subdivision adopted by the affirmative vote of not less than two-thirds of all the members elected to such governing body, requesting such approval, together with a true and correct transcript duly certified of any proceedings relating to such petition, plan of readjustment, other papers, ordinance or resolution, and the authorization thereof, accompanied by, in the case of documents to be filed in the United States court or court in bankruptcy, the original and one certified copy of such documents, and in the case of an ordinance or resolution, two certified copies of such ordinance or resolution. The approval of the commission under this article of any petition, plan of readjustment or other papers filed or to be filed in a United States court or court in bankruptcy, shall be evidenced only by written indorsement thereof on the petition, plan of readjustment or other papers so filed and the approval of the commission under this article of any ordinance or resolution of the governing body of any political subdivision shall be evidenced only by written indorsement thereof on a certified copy of such ordinance or resolution.

N.J. Stat. § 52:27-45.1 Municipalities effecting plan for readjustment or composition of debts; powers; "court" defined

Any municipality in which the Municipal Finance Commission, continued by chapter twenty-seven of Title 52 of the Revised Statutes, may be functioning and which may have heretofore filed or shall hereafter file a petition pursuant to section 52:27-40 of the Revised Statutes, with any United States Court or court in bankruptcy for the purpose of effecting a plan of readjustment of its debts or for the composition of its debts, may, pursuant to express provisions in such plan or in such plan as changed or modified, have and exercise the powers hereinafter provided and shall thereupon be charged with the duties hereinafter provided. The term "court" as used in this act shall mean the United States Court or court in bankruptcy in which is or may be pending the proceeding begun by such petition of the municipality, or, if no such proceeding is pending in said court or if said court shall not assume to act pursuant to this act, the Superior Court. L.1939, c. 56, p. 82, s. 1. Amended by L.1953, c. 49, p. 876, s. 42.

N.J. Stat. § 52:27-45.2 Warrants for funding or refunding indebtedness; ordinance or resolution; special fund for payment of warrants; form; interest

Any such municipality may provide in any such plan or plans for the issuance of warrants for the purpose of funding or refunding all or any part of the principal of and interest on the indebtedness of such municipality including the principal of and interest on the indebtedness of such municipality to any school district coterminous with said municipality. Such warrants may be authorized by and issued, sold or exchanged pursuant to ordinance or resolution, which ordinance or resolution shall provide for the creation of a special fund or funds for the payment thereof in the manner hereinafter provided, and such warrants shall be payable solely from said fund or funds. Such warrants shall be in such form and tenor and executed in such manner and shall be dated at such time or times and shall bear interest at such rate or rates not exceeding six per centum (6%) per annum, as the council or other governing body of such municipality shall determine. Such warrants may contain a reservation of an option of redemption at such time or times upon such terms and conditions and with such premiums as the council or other governing body of such municipality may elect. Said warrants shall state upon their face that they are payable solely from such special fund, naming the same, and shall be issued in registered form only. Payment of interest on said warrants shall be by check or bank draft and suitable provisions for the registration of said warrants and the transfers of same and provisions regarding the payment of interest shall be endorsed thereon. The ordinance or resolution authorizing the issuance of any such warrants shall specify the source of revenue for the special fund therein created for the payment thereof, which shall consist of all or a specified part of the proceeds of the sale and other liquidation of real estate or rights or interests therein, acquired by the municipality by virtue of the levy, collection and enforcement of taxes and special assessments theretofore levied or confirmed and the certificates of tax sale or tax and assessment title liens standing in the name of the municipality, theretofore acquired and subsequent taxes and assessments accruing thereto (sometimes hereinafter referred to collectively as "assets" ). Such ordinance or resolution shall pledge the assets to such special fund. L.1939, c. 56, p. 83, s. 2.

N.J. Stat. § 52:27-45.3 Board for liquidation of assets; members, appointment, compensation and expenses; nature and government of board

The ordinance or resolution authorizing the issuance of any such warrants shall provide for the creation of a board for the liquidation of such assets to be known as the "Board of Liquidation for the of " (hereinafter referred to as the "board" ), and shall set forth the number of members of the board, and the members thereof shall be appointed pursuant to such ordinance or resolution upon nominations to be made in such manner as the ordinance or resolution establishing said board may provide, subject to the approval of the court to which said plan or plans has been or will be submitted for approval. The ordinance or resolution establishing said board shall fix the terms of office of the members thereof, and shall provide for the appointment of the successors to such members in the same manner. The members of said board need not be residents of the State of New Jersey. The compensation and expenses of the members of such board and the expenses of its operation shall be paid in such amounts as may from time to time be fixed and approved by the court, and such expenses and compensation shall be payable solely from the special fund created and established by said ordinance or resolution authorizing the issuance of warrants thereunder. The ordinance or resolution establishing said board may provide that for all the purposes of the local budget law (R.S. 40:2-1 et seq.) said board shall constitute and be governed as a publicly owned or operated utility or enterprise, or may provide that compensation and expenses of the members of the board and the expenses of its operations and all its other disbursements may be paid from the special fund created and established by said ordinance or resolution without further budget or other appropriation or tax levy therefor. L.1939, c. 56, p. 84, s. 3. Amended by L.1953, c. 49, p. 876, s. 43.

N.J. Stat. § 52:27-45.4 Duties of board in liquidation of assets pledged to special fund; proceeds of liquidation; cancellation of outstanding and unpaid warrants after properties and assets liquidated

It shall be the duty of any board created and established pursuant to this act and any such ordinance or resolution, to effect, manage and control the liquidation of the assets pledged to the special fund or funds pursuant to such ordinance or resolution in a speedy, efficient and economical manner. Any such board is hereby authorized to compromise, adjust or otherwise settle any certificates of tax sale, or tax and assessment title liens, or other receivables included in such assets, and may, in its discretion for and in the name of such municipality, foreclose certificates of tax sale or tax and assessment title liens in the manner provided by law for the foreclosure of such liens by the municipality and shall liquidate such properties and assets pledged to said fund or funds by sale, exchange, lease or other disposition thereof, but this act, or any action taken pursuant thereto, shall not be deemed to relieve the municipality from liability on any contract with respect to such foreclosures existing at the time of adoption of such ordinance or resolution. The proceeds of such liquidation shall be paid into such special fund or funds and shall be withdrawn therefrom solely for the purpose of paying the compensation and expenses of the board and paying or otherwise discharging in accordance with such ordinance or resolution the principal of and interest on the warrants payable therefrom until all such warrants and the interest thereon have been paid, redeemed or otherwise satisfied. Any balance remaining in said fund or funds after the expenditures for the purposes above specified may be expended as is provided in the ordinance or resolution authorizing the issuance of any such warrants. If any warrants remain outstanding and unpaid after all of the properties and assets pledged to said fund or funds have been liquidated in the manner hereinabove provided, such warrants shall be void and of no force or effect, and shall be surrendered to the municipality upon demand, for cancellation. L.1939, c. 56, p. 85, s. 4.

N.J. Stat. § 52:27-45.5 Periodic accountings by board as trustee; cooperation of council or other governing body; suspension of performance of acts

The ordinance or resolution authorizing warrants hereunder and establishing any such board shall provide for periodic accountings as trustee in the court. The council or other governing body of any municipality in which any such board has been established and created, and the corporate authorities thereof, shall do and perform all acts, deeds and things as may be required by said board in order for said board to compromise, adjust or otherwise settle any certificates of tax sale or tax and assessment title liens or other receivables pledged to any special fund or funds created hereunder, and in order to foreclose any such certificates of tax sale and tax or assessment title liens pledged to said fund or funds or in order to effectuate the sale, exchange, lease or other disposition of any of the real estate or rights or interest therein under the control and disposition of said board and pledged to said fund or funds; Provided, however, that if the governing body of such municipality shall adopt a resolution questioning the necessity or advisability of any such act, deed or thing, and a certified copy of such resolution shall have been brought before and filed with the court, the performance of such act, deed or thing shall be suspended unless and until the court shall have entered an order or judgment determining the necessity or advisability for the performance thereof in order for said board to perform its duties under section four of this act. Upon the filing of such order or judgment, the resolution of the council or other governing body shall be of no further force and effect and the said governing body and corporate authorities of said municipality shall proceed to do and perform such act, deed or thing. Any such determination by said court shall be final and binding, and the board and the governing body and the corporate authorities of such municipality shall not appeal therefrom. L.1939, c. 56, p. 86, s. 5. Amended by L.1953, c. 49, p. 877, s. 44.

N.J. Stat. § 52:27-45.6 Covenants in ordinance or resolution protecting security and rights of warrant holders

Any ordinance or resolution authorizing the issuance of warrants hereunder may contain covenants of any such municipality to protect and safeguard the security and rights of the holders of any such warrants, and without limiting the generality of the foregoing, such ordinance or resolution may contain covenants as to (1) the manner in which warrants issued thereunder may be issued or be exchanged for outstanding claims or evidences of indebtedness funded or refunded thereby and the terms and conditions upon which such warrants may become a charge upon the special fund or funds created by any such ordinance or resolution; (2) the collection, depositing, custody and disbursement of moneys or other assets coming into any special fund or funds created hereunder for the payment of warrants, including a specification of the depositaries to be designated to hold such deposits and granting to such depositaries or other banks or trust companies authority to act as fiscal agent of any such municipality for the custody of the moneys or other assets held in any special fund or funds created hereunder, and to represent holders of such warrants in the event of a default on same or in the event of a default in the performance of any duty or obligation of any such board, municipality or the corporate authorities thereof in connection therewith, with such powers and duties for the enforcement of such warrants as such ordinance or resolution may provide; (3) the deposit of collateral security or indemnity bonds to secure the proceeds of the liquidation of all moneys and assets under the control of the board, and limitations on the amount, if any, of additional warrants or other claims or obligations of whatsoever kind or nature which may be issued and payable from the special fund or funds established in the ordinance or resolution authorizing issuance of warrants hereunder; (4) limitations upon the creation of additional liens or encumbrances on the real estate or other assets to be liquidated by said board, the terms and conditions upon which the real estate and other assets under the control of the board for liquidation may be sold, exchanged, leased or otherwise disposed of, and the use or other disposition of all funds received in the process of liquidation; (5) the validity and enforceability of the certificates of tax sale, or tax and assessment title liens, and the title of the municipality to real estate or rights or interests therein standing in the name of the municipality which shall have been pledged to any special fund or funds created hereunder, and the obligation of any such municipality to replace in said fund or funds additional assets of at least equal book value in lieu of any such assets which have been declared by any court of competent jurisdiction to be illegal or unenforceable; (6) such other covenants as may be deemed necessary or desirable to insure the speedy, efficient and economical liquidation of the assets pledged to such special fund or funds and the application of the proceeds thereof to the payment of the principal of and interest on the warrants issued pursuant to such ordinance or resolution within a reasonable time and at reasonable expense. The provisions of this act and of any such ordinance or resolution shall constitute a contract with the holders of such warrants and the provisions thereof shall be enforceable by a proceeding in lieu of a prerogative writ or any other appropriate action or proceeding in any court of competent jurisdiction by the commission or by any owner or holder of such warrants on behalf of himself individually or all other owners or holders of said warrants. L.1939, c. 56, p. 87, s. 6. Amended by L.1953, c. 49, p. 878, s. 45.

N.J. Stat. § 52:27-45.7 General powers and duties of board; by-laws and rules; employees; real estate brokers; liquidation of assets

Any board created and established pursuant to this act shall have power to: (a) adopt its own by-laws and rules of procedure; appoint and remove at pleasure such assistants or assistance, agents and employees, practical, technical or otherwise, at such terms and at such expense as the judge may authorize or approve; (b) employ real estate brokers to assist in the disposing of the assets to be liquidated by the board and to pay commissions for the services of such brokers; (c) generally to control and manage the liquidation of the assets pledged to such special fund or funds in accordance with the provisions of this act and any covenants contained in any ordinance or resolution enacted or adopted pursuant hereto in connection with the issuance of warrants pursuant to this act; (d) perform such other duties not inconsistent with the provisions of this act as may be prescribed by the ordinance or resolution establishing such board. L.1939, c. 56, p. 89, s. 7.

N.J. Stat. § 52:27-45.8 Discharge of board; extension of existence; surplus in special fund

Upon the payment of all warrants issued under any ordinance or resolution adopted or enacted pursuant to the provisions of this act, together with all expenses and claims whatsoever incurred or contracted by any such board, or upon the liquidation of all of the assets pledged to any special fund or funds created by any such ordinance or resolution adopted or enacted pursuant hereto, any such board established pursuant to this act shall cease to exist upon being discharged by the court; provided, however, that any ordinance or resolution establishing such a board may extend the existence of any such board in such manner and upon such terms and conditions as any such ordinance or resolution shall provide. Any such ordinance or resolution may also provide for the collection, deposit and disbursement of the proceeds of the liquidation of assets pledged to any special fund or funds created hereunder after the payment of warrants issued pursuant thereto in such manner and upon such terms and conditions and for such purposes as any such ordinance or resolution shall provide. L.1939, c. 56, p. 90, s. 8. Amended by L.1953, c. 49, p. 880, s. 46.

N.J. Stat. § 52:27-45.9 Invalidity or illegality of ordinance or resolution; board prevented from performance of duties

Should any ordinance or resolution establishing or creating any board hereunder be declared to be invalid or illegal by any court of competent jurisdiction, or should said board be prevented for any reason from performing the powers and duties herein prescribed for the collection, enforcement and liquidation of the assets and properties pledged to any such special fund or funds, all warrants payable from said fund or funds shall nevertheless remain and be a lien against the assets and properties so pledged, and shall be and remain payable from the proceeds of such assets when and as collected by such municipality, and such municipality and the corporate authorities thereof are hereby directed in such case to proceed with the liquidation of such assets as in this act and as in the ordinance or resolution authorizing the issuance of said warrants provided, and all powers, duties and liabilities imposed on the board shall be assumed and performed by the governing body of such municipality. L.1939, c. 56, p. 90, s. 9.

N.J. Stat. § 52:27-45.10 Issuance of new warrants of different denominations at request of registered holders

Any municipality which has issued or may hereafter issue warrants, under the authority of an act entitled "An act in relation to the powers and duties of municipalities in which the Municipal Finance Commission may be functioning and supplementing chapter twenty-seven of Title 52 of the Revised Statutes," approved May sixteenth, one thousand nine hundred and thirty-nine, is hereby empowered and shall, upon the request of a registered holder of any such warrant, issue a new warrant or warrants, of like form and tenor as the warrant originally issued but of such different denomination or denominations as requested by the registered holder. L.1941, c. 62, p. 147, s. 1.

N.J. Stat. § 52:27-45.11 Execution and delivery of new warrants

A registered holder of any warrant issued by any municipality in accordance with said act desiring a warrant or warrants of different denomination or denominations shall request in writing the issuance of such new warrant or warrants, stating the denomination or denominations desired, and file such request with the chief financial officer of the municipality. When any such request is so filed, said financial officer of the municipality shall cause a warrant or warrants of like tenor and effect as those originally issued to be prepared, of the denomination or denominations requested by the registered holder of the warrant or warrants originally issued, but not exceeding in aggregate the amount of the warrants originally issued and referred to in said request. Said new warrant or warrants shall be executed in the same manner as the warrants originally issued, by the persons holding the offices of the officers who originally executed the outstanding warrants. When a new warrant or warrants have been prepared and executed, the same shall be delivered by said financial officer of the municipality to the registered holder of the warrant or warrants originally issued upon surrender of such warrants originally issued, which shall thereupon be cancelled. The municipality shall be permitted to make a reasonable charge for such services as rendered. L.1941, c. 62, p. 148, s. 2.

N.J. Stat. § 52:27-46 School districts to which applicable; resolution by commission

Whenever, pursuant to this chapter, the commission shall function in a municipality having a school district coterminous therewith which is governed by the provisions of chapter 7 of the title Education (s. 18:7-1 et seq.), the commission may from time to time prepare and certify to the board of education of such school district, in the manner and mode of procedure provided in this chapter, resolutions providing for the funding or refunding of notes or bonds or other indebtedness of such school district, and the interest thereon, which the commission shall have found after public hearing to be outstanding and unpaid and to be due or to become due. The commission may include in the amount of indebtedness to be funded or refunded the expense of issuing and selling notes or bonds hereunder, including the estimated cost of printing, advertising, attorney's fees, execution, certification, exchange and delivery.

N.J. Stat. § 52:27-47 Public hearing on resolution

Any proposed resolution providing for the issuance of notes or bonds, if such notes or bonds are payable more than one year from the date of issue, shall be certified as aforesaid only after a public hearing by the commission; but no resolution or amendment thereto determining or altering the form of notes or bonds or providing for their sale, execution or delivery shall require any public hearing before such certification.

N.J. Stat. § 52:27-48 Adoption of resolution by board of education

Such resolutions shall, on direction of the commission, be adopted by the board of education of such school district, by the vote of a majority of the members thereof, in the form certified by the commission.

N.J. Stat. § 52:27-49 No referendum; other laws inapplicable

Such resolutions and any notes or bonds authorized to be issued thereunder shall not be subject to a referendum of the legal voters of the school district or to the limitations or other provisions of any other law.

N.J. Stat. § 52:27-50 Form of notes or bonds; terms, provisions and conditions

Subject only to the limitations of this article, such resolution or resolutions supplemental thereto shall determine the terms and the form of notes or bonds to be issued thereunder. Such notes or bonds may be subject to such terms of redemption, with or without premium, and contain such provisions, conditions and limitations with respect to the acceleration of the obligation to pay the principal thereof upon such default in the payment of the interest on or principal of any bonds or notes, or in respect to the provisions concerning debt service and sinking fund payments, as the resolution authorizing their issuance may provide. Any notes or bonds issued under this article in exchange for any instrument issued under any other law may be authorized by such resolution or resolutions to contain a provision that, in case of default in payment of the principal of or interest on any such note or bond, the holder thereof shall not only have all his rights and remedies thereunder, but in addition shall be reinvested with such of the rights or remedies which he would have had were he then the owner and in possession of the instrument in exchange for which such note or bond shall have been issued as may be specified in such resolution. Such notes or bonds may contain such reference to any special covenants or provisions contained in the resolution authorizing their issuance and such other terms, provisions or conditions not inconsistent herewith as may be deemed by the commission to give such notes or bonds a higher degree of marketability as the resolution or resolutions determining the form of the notes or bonds may provide. All notes or bonds issued under this article containing any one or more of such references, terms, provisions, or conditions shall be deemed negotiable instruments, the provisions or limitations of any other law to the contrary notwithstanding; but nothing in this section shall be construed to impair the negotiability of any other instruments negotiable under other laws of this state.

N.J. Stat. § 52:27-51 Collateral agreements; provisions in resolutions as to taxation, sinking fund, pledges and limitations; enforcement

To the end that the principal of and interest on the notes or bonds issued hereunder may be further secured and thereby a more favorable sale or exchange effected, any resolution authorizing the issuance of notes or bonds hereunder may contain provisions which shall be a part of the contract with the holders of such notes or bonds as to (a) the amount to be raised by taxation in the school district in each year for debt service and for reserve or sinking funds, which amount may be expressed in dollars, percentage of total assessed valuations or both, or otherwise; (b) the setting aside of reserve or sinking funds, and the amount, source, securing, regulation, investment, application and disposition thereof; (c) the pledging, depositing or trusteeing of moneys to be applied to the payment of the principal of and interest on the notes or bonds, and the securing of such deposits; (d) the pledging of taxes and other revenues or moneys of the school district directly to the payment of the principal of and interest on the notes or bonds, or to reserve or sinking funds; (e) limitations effective for not exceeding ten years from the effective date of such resolution or resolutions on the amount or nature of borrowing or incurring of indebtedness by the school district; (f) appointment of a fiscal agent by the school district and the powers and duties thereof; (g) the levying of a special tax, in such amount as said resolution may provide, for the payment of the principal of and interest on the notes or bonds, which special tax shall be levied upon all the real and personal property in the school district subject to taxation in addition to the taxes levied for all other purposes, and shall be assessed, levied and collected in the same manner and at the same time as other taxes upon real and personal property are now or shall hereafter be assessed, levied and collected, and, when collected, shall be deemed trust funds and shall be applied and paid over by the collector or other officer having the custody of the collected taxes solely to the agreed payment of the principal of and interest on the notes or bonds, or if such agreed payment shall have been made, then in such manner and for such purposes as said resolution may provide; (h) the terms and conditions upon which such resolution or resolutions or any contract entered into thereby may be amended, rescinded or repealed; (i) any other or further course of conduct on the part of the school district which may tend to improve its credit standing. Any school district adopting a resolution containing any provision authorized hereunder shall have and possess all of the powers necessary and appropriate for the performance thereof. The provisions of any such resolution shall be enforceable by a proceeding in lieu of prerogative writ or other appropriate action or proceeding instituted by the commission or by the holder of any note or bond on his own behalf, or on behalf of all the holders of such notes or bonds, in either case in any court of competent jurisdiction whether or not there shall have been any default in the payment of the principal of or interest on any such notes or bonds. Amended by L.1939, c. 47, p. 69, s. 2; L.1953, c. 49, p. 881, s. 47.

N.J. Stat. § 52:27-51.1 Sinking fund commission; payments of reserve or sinking fund to

Any resolution authorizing the issuance of notes or bonds hereunder may provide that any sums required pursuant to such resolution to be set aside by the school district for reserve or sinking funds shall be paid to the sinking fund commission of such school district, and all moneys so paid to such commission shall be held and applied by it only as in such resolution provided and shall not be commingled with any other moneys held by such commission. The provisions of chapter 3 of the title Municipalities and Counties (s. 40:3-1 et seq.), in so far as they relate to the creation, setting aside or maintenance of sinking funds and the investment, application and disposition thereof, shall have no application with respect to notes or bonds issued under this article or any reserve or sinking funds provided therefor.

N.J. Stat. § 52:27-51.2 Release of sinking funds

Any resolution authorizing the issuance of notes or bonds hereunder may provide that the notes, bonds or other obligations of the school district then held by the sinking fund commission thereof shall be canceled and that other property or funds in the custody of such commission shall be applied to the payment of other indebtedness of the school district as in such resolution provided, and such commission shall cancel such notes, bonds or other obligations and apply such property or funds accordingly; provided, that nothing herein contained shall be deemed to permit, without the consent of such holder, the impairment of any rights of the holder of any note, bond or other obligation of the school district for the security or payment of which any such notes, bonds, obligations, property or funds shall be held.

N.J. Stat. § 52:27-52 Sale or exchange of notes or bonds

Subject only to the limitations of this article, such resolution or resolutions supplemental thereto shall provide for the sale or exchange and the execution and delivery by such officers of the school district as shall be therein designated of the notes or bonds to be issued thereunder, and it shall be mandatory upon such officers to sell or exchange and execute and deliver such notes or bonds as so determined and provided.

N.J. Stat. § 52:27-53 Conditions of sale or exchange

All such notes or bonds shall be sold at not less than par at public sale after notice setting forth the terms and conditions of sale, published in such newspaper circulating in the school district, and in such financial newspaper, as shall be designated by any such resolution, except in the following cases: a. If no bids are received at such public sale, or if all bids are rejected, any notes or bonds or part thereof may with the written assent of the commission be sold without further notice at private sale at any time within six months. b. With the approval in writing of the commission, any notes or bonds or part thereof may be exchanged for any notes or bonds, including interest thereon, of the school district issued under this or any other law. The rate of interest borne by any such notes or bonds may be higher or lower than the rate of interest borne by the notes or bonds surrendered. c. With the approval in writing of the commission, any notes or bonds may be issued directly to any creditor of the school district in absolute and unconditional payment of the indebtedness and interest thereon of such school district to such creditor, provided that notes or bonds shall not be so issued unless and until the amount due such creditor has been determined by the board of education and by the commission, nor unless and until the school district receives from such creditor a release running to the school district and if such creditor is a party plaintiff in any suit, action or proceeding pending against the school district relative to such indebtedness, a stipulation of dismissal of such suit, action or proceeding. Such release and such stipulation shall be approved as to form by counsel to the school district and by counsel to the commission. d. Any notes or bonds, or any part thereof, may be sold without any previous public offering to, and be purchased by, any sinking fund commission or the insurance or pension fund commissioners of the school district offering the bonds, or be sold to any board, commission or officers of the state, authorized by law to purchase such notes or bonds. e. Any notes or bonds payable not more than seven years from their date may be sold at private sale with the written assent of the commission.

N.J. Stat. § 52:27-54 Effect of resolutions; publication; validity; presumptions

Excepting resolutions determining or altering the form of notes or bonds or providing for their sale, execution and delivery, and resolutions amendatory thereof or supplemental thereto, such resolutions adopted by the board of education shall be published in a newspaper circulating in the school district and shall take effect immediately upon such publication. Resolutions not required to be published shall take effect immediately upon adoption by the board of education. Thirty days after taking effect all resolutions shall be conclusively presumed to have been duly and regularly adopted by the board of education, and to comply with the provisions of this and of every law; and the validity of any such resolution shall not thereafter be questioned by either a party plaintiff or a party defendant, except in a suit, action or proceeding, commenced prior to the expiration of such thirty days; and unless a suit, action or proceeding questioning the validity of notes or bonds purporting to be issued by virtue of any such resolution be commenced prior to the expiration of such thirty-day period, any such notes or bonds reciting that they are issued pursuant to this article shall, after their issuance and delivery, if no suit relating thereto is then pending, be conclusively presumed to be fully authorized by all the laws of this state and to have been issued, sold, executed and delivered by the school district in conformity therewith and shall not be questioned by the school district or any taxpayer or legal voter thereof in any court, anything herein or in any other statutes to the contrary notwithstanding.

N.J. Stat. § 52:27-55 Tax to pay notes and bonds; reserve or sinking fund

Any school district which shall have issued any notes or bonds pursuant to this article shall have the power to raise by a district tax any sum or sums for the purpose of providing for the payment of the interest thereon and the principal thereof and for the setting aside of necessary reserve or sinking funds therefor. The full faith and credit of such school district shall be deemed to have been pledged for the punctual payment of interest on and principal of all notes and bonds issued pursuant to this article.

N.J. Stat. § 52:27-56 Additional indebtedness and expenditures; assent of commission necessary

In order to conserve the financial resources of the school district, neither the legal voters nor the board of education thereof, without the assent in writing of the commission, shall issue or authorize the issuance of notes or bonds of any kind or character, or create any obligation or indebtedness of the school district, except pursuant to section 18:7-60 of the title Education. Nor shall any action taken by the legal voters of the school district be effective in so far as it purports to raise by tax in any year any sum or sums for any purpose or purposes, except to provide for the payment of the interest on or principal of any debt or obligation of such school district or for the setting aside of necessary reserve or sinking funds therefor, in excess of the sum or sums voted to be raised by tax for like purposes in the preceding year without like assent of the commission.

N.J. Stat. § 52:27-57 Default in payment of interest, salaries, etc.; limitation on expenditures

Whenever such school district, or the municipality with which such school district is coterminous, has been or shall be in default for twelve months in the payment of interest on any of its bonds or notes or other written evidence of indebtedness (except where the same is under litigation as to its validity, or where the validity thereof has been denied by formal notice given by the school district or municipality, and no suit, action or proceeding to enforce the same has been commenced by the holder); or whenever any such school district or municipality has been or shall be in default for six months in the payment of any part of its regular pay roll, or, in the case of the municipality, in the payment of any sums due from the annual tax levy to the state, county or school district, then in any event no action taken by the legal voters of the school district shall be effective in so far as it purports to raise by tax in any year any sum or sums for any purpose or purposes, except to provide for the payment of the interest on or principal of any debt or obligation of such school district or for the setting aside of necessary reserve or sinking funds therefor, in excess of such limits as may be fixed by the commission.

N.J. Stat. § 52:27-58 Auditors and assistants; expenses limited

For the purpose of enabling the commission to carry out this article, the commission shall have power to employ an auditor and such other assistants, legal, clerical or otherwise, and to fix their duties, terms of service and compensation and to incur such other expenses as it may deem necessary, but no expenses (other than expenses directly attributable to the school district such as the costs of issuing the obligations of the school district and the costs of audit) shall be incurred exceeding ten thousand dollar ($10,000.00) for any one school district in any fiscal year of such school district without the consent of a judge of the Superior Court. Amended by L.1953, c. 49, p. 882, s. 48.

N.J. Stat. § 52:27-59 Powers and duties of auditor; office

Whenever the commission shall certify to the board of education that it intends to exercise the powers conferred by this section, thereafter no claims shall be passed for payment by the board of education or other officers of the school district until the auditor of the commission shall have certified that the same have been examined by him and found to be within the amount voted to be raised by tax therefor, and that there is or will be available in an appropriate account sufficient ready funds for its payment. Furthermore, thereafter all warrants, checks or other instruments for the withdrawal or transfer of funds of the school district shall be submitted to such auditor for his counter-signature and no banking institution in which funds of the school district have theretofore been or shall thereafter be deposited shall honor warrants or checks drawn thereon unless the counter-signature of such auditor shall appear on the face of such instruments. The board of education shall provide an adequate office for such auditor, who shall have access to all books of account, records, papers and memoranda of such school district.

N.J. Stat. § 52:27-60 Expenses to be paid by school district

The commission shall from time to time certify to the board of education the amount of its expenses, which amount shall be a legal charge upon the school district payable to the commission, and may be raised by the issuance of notes by the board of education, but the amounts so certified, if remaining unpaid, and the amounts of any notes so issued shall be included by the board of education, without any authorization by the legal voters of the school district, in the next succeeding amount certified to the county board of taxation as the amount to be raised by taxation for the purposes of the school district.

N.J. Stat. § 52:27-61 Failure of school authorities to act; commission to act directly

Whenever any direction of the commission authorized under this article has not been fully performed or carried out by the board of education or other officials of the school district affected, the commission shall have power to perform directly, or cause to be performed by its agents, in the name of the school district, any act so directed by the commission under the provisions of this article, including the power to execute, sell, issue and deliver any notes or bonds directed by the commission to be issued by the school district for the funding or refunding of its indebtedness in the manner and mode of procedure provided by this chapter for the issuance of notes or bonds by a municipality. Amended by L.1947, c. 119, p. 585, s. 4; L.1948, c. 156, p. 892, s. 2.

N.J. Stat. § 52:27-62 Remedies; enforcement of judgments, etc.; bringing of actions or proceedings stayed; exceptions

Whenever the commission shall function in a municipality having a school district coterminous therewith which is governed by the provisions of chapter seven of the Title Education (s. 18:7-1 et seq.): a. No judgment, levy or execution against such school district or the property thereof for the recovery of the amount due on any bonds, notes or other obligations of the school district, in the payment of which such school district has defaulted shall be enforced until otherwise specially directed by the Superior Court in an appropriate action or proceeding for such purpose, after notice to the commission; and the enforcement of any such judgment, levy or execution shall be and it hereby is stayed until otherwise specially directed as aforesaid; b. No action or proceeding of any kind either direct or ancillary, by way of a proceeding in lieu of prerogative writ or otherwise, shall be brought against such school district, municipality, or any public officers for the assessment, levy or collection of taxes for such school district and any and all actions or proceedings therefor shall be and they hereby are stayed; except that first, the Superior Court, after notice to the commission may authorize one or more creditors of such school district to bring and maintain an action or proceeding therefor in the Superior Court, which shall be brought for the benefit of themselves and all other creditors of such school district and in which all other creditors of such school district shall have the right to intervene and assert their claim and in which all other creditors of such school district may, and such commission shall, be made parties in such manner and upon such notice as the court shall prescribe; and except that, second, the commission may bring and maintain an action or actions or a proceeding in lieu of prerogative writ or any other appropriate proceeding or proceedings for the assessment, levy or collection of taxes for such school district for the payment of principal or interest of the indebtedness of the school district found to be outstanding as provided in section 52:27-46 of this Title; without limiting its power otherwise to direct by a proceeding in lieu of prerogative writ the assessment, levy or collection of taxes, the Superior Court in the action or proceeding aforesaid may, to the extent which it shall deem just and equitable, afford to the holders collectively of any due and unpaid claims against a school district any remedy which might be afforded under any other law to any individual creditor in any such proceeding in lieu of prerogative writ for the assessment, levy or collection of taxes, to the same extent as if there had been an entry of judgment in their favor, issuance of execution and return thereof unsatisfied, service thereof upon public officials and performance of any and all other conditions precedent to the affording of such relief by a proceeding in lieu of prerogative writ under such other law; provided, that the court be first satisfied from proof submitted by affidavit or otherwise that the claims for the enforcement of which such remedy is sought are claims upon which a judgment could be obtained; c. No action or proceeding shall be brought or prosecuted, the purpose of which is to affect the disposition of property or funds owned or controlled by the school district, except as herein provided; if any such school district has in its possession or under its control, or there is in the possession or under the control of the commission, any property or funds of such school district which are or may be available for the payment of interest or principal upon any of the debts of such school district (over and above the payment of the current operating expenses of the school district and the maintenance of a reasonable working capital), then such school district in its discretion may bring an action, or if directed by the commission shall do so, in the Superior Court to determine the application and distribution of such property or funds to and among the creditors of the school district, and in any such case the court in its discretion may permit an action for relief of the same character to be made by any creditor of the school district; in any such action, the court may proceed therein in a summary manner or otherwise, and all creditors of the school district shall be made parties thereto, and any creditor may appear therein and assert his rights to receive all or any part of such property or funds; in case any such action shall be instituted, the court may direct the municipality to make no payments from any of such moneys so available until the determination of the action or until permitted by the court; unless and until such a direction shall be made, payments may be made by such municipality on account of principal and interest as the municipality may determine and as may be approved by the municipal finance commission; d. Upon the application of any creditor made upon notice to the school district and the commission, the Superior Court may vacate, modify or restrict any statutory stay contained in this article. Amended by L.1953, c. 49, p. 883, s. 49.

N.J. Stat. § 52:27-63 Plan of adjustment or composition of claims of creditors; procedure; effect

a. Whenever the commission shall function in any municipality having a school district coterminous therewith which is governed by the provisions of chapter seven of the Title Education (s. 18:7-1 et seq.), then, the Superior Court may take jurisdiction of an action brought by any creditors of such school district where the action is instituted by the plaintiff or plaintiffs on behalf of themselves and all other creditors of the school district for the approval of a plan of adjustment or composition of the claims of all creditors or of a class or classes of them similarly situated. The court may proceed in the action in a summary manner or otherwise, and the school district, the commission and all creditors of the school district shall be made parties to the action. Any creditor of the school district may appear and assert his rights. b. In any such action, after hearing on the plan proposed or on the plan as modified by order and if such plan as proposed or modified is approved in writing by creditors representing eighty-five per centum (85%) in amount of the indebtedness affected thereby and by the school district and the commission, the Superior Court may authorize and approve such adjustment or composition if the court determines (1) that the school district is unable to pay in full according to their terms the claims proposed to be adjusted or composed, and perform its public functions and preserve the value of property subject to taxation, (2) that the adjustment or composition is substantially measured by the capacity of the school district to pay, (3) that it is in the interest of all the creditors affected thereby, and (4) that it is not detrimental to other creditors of the school district or of the municipality. c. The plan of adjustment or composition so authorized and approved shall forthwith and without any further action of any kind be binding upon all the creditors included in such plan, whether or not they appear in such action, and in so far as said plan provides for the substitution of any new bonds, notes, or other obligations of the school district in place of any outstanding bonds, notes or other obligations or claims then outstanding, such substitution shall be effectual from and after such date as may be fixed by the court. d. After the institution of any action provided for by this section and pending the determination thereof, the Superior Court may continue the stay provided by section 52:27-62 of this Title. In the event that a plan shall be authorized and approved pursuant to this article, the court shall retain jurisdiction of such action and thereafter no creditor whose claim is included in such adjustment or composition shall be authorized to bring any action or proceeding of any kind or character for the enforcement of his claim except with the permission of the court and then only to recover and enforce the rights given to him by such adjustment or composition. e. Notwithstanding any provisions of this article, the commission shall not approve any adjustment or composition, or plan presented pursuant to this section, which provides for the reduction in the principal amount of any outstanding notes or bonds of the school district. Amended by L.1953, c. 49, p. 885, s. 50.

N.J. Stat. § 52:27-64 "Certified" resolutions defined; form of certificate; signing

The word "certified" as used in this chapter shall, as to resolutions prepared by the commission and certified to the governing body of a municipality, be construed to mean transmission by first-class mail of a copy of a resolution of the commission, accompanied by a certificate substantially in the following form: "The annexed resolution is hereby certified by the municipal finance commission to the (insert name of governing body of municipality) pursuant to chapter 27 of the title State Government, Departments and Officers, of the Revised Statutes (s. 52:27-1 et seq.)." Such certificate shall be signed in the name of the commission by at least a majority of its members under its common seal, and attested by its secretary.

N.J. Stat. § 52:27-65 Remedial law to meet public emergency; liberal construction

It is declared that this chapter is intended by the legislature to meet the public emergency arising from a default in the payment of municipal and school district obligations and the resulting impairment of public credit, requiring intervention by the state to provide for the payment of existing obligations in such a way as to cause the least embarrassment to property owners as taxpayers, and that this chapter is remedial in nature and the powers hereby granted shall be liberally construed.

N.J. Stat. § 52:27-66 Powers and duties severable

The powers granted and duties imposed by this chapter shall be construed to be independent and severable, and a judicial determination that one or more of such powers or duties are not constitutionally conferred or imposed shall not invalidate or affect the remainder thereof.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026