Property Tax Reform, Special Legislative Session & School Funding

Governor's Toolkit Summary - Updated November 2010
Click on More to see revised Toolkit Summary, brought current to November 2010

Toolkit Bill Summary (updated 11-15-10)

Courtesy of Princeton Public Affairs Group

Municipal & County Toolkit

SCR 103 (Oroho)/ACR 130 (O’Scanlon) (In Senate Budget and Appropriations Committee). Also similar resolution SCR 124 (Oroho/Beck) introduced in the Senate and referred to the Senate Budget and Appropriations Committee on Sept 23, 2010

This resolution proposes a constitutional amendment to place a 2.5% cap on increases in State spending (excluding state aid to municipalities and school districts, federal funding, pension payments required by the Constitution, direct property tax relief, and emergencies). The resolution allows cap banking and requires 2/3 vote of Legislature to exceed cap. (See attached comment for more detail.) (NOTE: Senator Oroho also introduced a statutory 2% state spending cap listed below.)

S-2202 (Oroho) (In Senate Budget and Appropriations Committee)

Establishes a statutory 2.0 percent cap on annual appropriations increases for certain State government spending.

S-2011 (Oroho/Beck) A-2956 (Chiusana/McHose) (In Senate State Government Committee)

This bill eliminates seniority in Civil Service and other jurisdictions for reductions in force in certain circumstances.

· The bill will permit an appointing authority (State, county, municipality) to lay off, as part of a reduction in force, individuals with more seniority in place of less senior individuals that possess essential skills necessary to meet the needs of the appointing authority.

S-2012 (Doherty/Allen)/A-2958 (Bucco/McHose) (reported from SBA unanimously; Second Reading in Senate 35-0 and Senate Amendment)

This bill allows gross income tax refunds to be credited against a taxpayer’s delinquent local property taxes in the same manner as is currently allowed for homestead property tax rebates and credits claimed by delinquent property tax taxpayers.

Current Delinquent Taxpayer Procedure

Under the bill, the tax collector of each municipality, on or before April 1 of each year, must furnish the Director of the Division of Taxation, with a list of delinquent taxpayers for the prior year and the amounts of those delinquencies.

On or before November 15, the director notifies each homestead rebate claimant, whose rebate has been withheld because of delinquency, that the amount of the rebate to which the claimant was entitled has been sent to the tax collector.

This bill, if enacted would add refund of taxes pursuant to the New Jersey Gross Income Tax Act to the current delinquent taxpayer procedure.

S-2024 (Kyrillos)/A-2953 (Peterson/McHose) (In Senate Budget and Appropriations Committee) [A3212 (Casagrande) was introduced in September 16^th but removed two weeks later]

Under the current Uniform Shared Services Consolidation Act, employment reconciliation plans are established when a local unit agrees to participate in a joint meeting or shared service agreement that will provide a service that the local unit is currently providing through its public employees.

This bill permits layoff plans as a substitute for employment reconciliation plans for joint meetings or shared service agreements under certain circumstances.

Under this bill, if a local unit requests that some or all of its employees are transferred to the local unit providing the services, the final decision as to which employees will transfer is vested solely with the local unit that will provide the services.

This bill is part of Governor Christie’s tool kit to enable municipalities to limit property tax growth.

S-2039 (Bateman)/A-2954 (Bucco) (In Senate State Government Committee) [A part of this bill is contained in similar S-2206 (Sweeney)]

This bill allows a civil service seasonal temporary appointment, currently limited to a maximum length of six months, to be changed and extended to a nine month period.

This bill allows the appointing authority in State or local service to institute a temporary layoff for economical or efficiency related reasons. A temporary layoff is defined as the closure of an en entire layoff unit for the period of one or more work days. The unpaid layoff period applies to every employee, whether they are career, senior executive or unclassified.

An employee will not be paid for furlough time (layoff periods), but if an employee accrues leave time, such as vacation, medical leave or anniversary dates, layoff periods will not affect this time. During layoff periods, employees will not be paid for that time period.

The intention of this bill is to treat each public employee in the layoff unit equally. Every employee in a layoff unit is affected by it. Seniority in a layoff unit does not matter, because each employee in a layoff unit will lose the time period set forth for the layoff without pay.

This bill amends various parts of the statutory law and supplements Title 11A of The New Jersey Statutes. It allows municipalities, counties and school districts to withdraw from Title 11A of the New Jersey Statutes, the civil service system.

S-2045 (Allen)/A-2959 (Rumana/Webber) (In Senate Community and Urban Affairs Committee. Replaced by S-2208, released from SBA unanimously on July 19, 2010, passed the Senate on August 23, 2010 by a vote of 36-0. (Sarlo/Allen) listed below. Passed in Assembly 75-0 on September 30, 2010 and received in the Senate on Second Reading on Concurrence)

· This bill allows the Council on Local Mandates to authorize certain organizations to file complaints.

· This bill would allow the New Jersey Conference of Mayors, the New Jersey State League of Municipalities, the New Jersey School Boards Association, the New Jersey Association of Counties, the Garden State Coalition of Schools, or a similar organization that represents the interests of member counties, municipalities, or local boards of education to file a complaint with the Council on Local Mandates concerning a potential unfunded mandate if so authorized by the council. Currently, only individual municipalities can do this.

S-2135 (Cardinale)/A-2955 (Munoz) (In Senate State Government Committee). S-2135 was transferred to SBA & put on the August 16, 2010 agenda for discussion only)

· This bill limits a State employee’s, firefighter’s and police officer’s right to appeal a disciplinary action taken against them.

· The bill increases the appealable disciplinary action threshold for State employees from more than five days to more than 30 working days. The right of appeal for aggregate disciplinary actions of less than five days will be eliminated.

The bill also increases the appealable disciplinary action threshold for police officers and firefighters in non-civil service municipalities to more than 30 working days. There is currently no disciplinary action threshold that must be met before an action is appealable.

S-2154 (Oroho)/A-2957 (Chiusano) (Listed for Discussion Only on 7/19/10 SBA Agenda)

· This bill shifts many of the duties, powers, and responsibilities of the Civil Service Commission from the commission to the chairperson of the commission.

Additionally, the bill:

· designates the chairperson as the principal executive and request officer of the commission; authorizes the commissioner to appoint one deputy administrator;

· authorizes the establishment of an internship program;

· requires the commissioner to recommend rules to the commission;

· requires the commissioner to act on petitions for stay, interim relief, and intervening decisional review in emergent matters between meetings of the full commission.

S-2171 (Doherty)/A-3075 (Chiusano) (Withdrawn from consideration on September 20, 2010 and replaced by S-2310 (Doherty) which was on the Senate State Government Cmte on Oct 14, 2010 for Discussion Only)

This bill implements the governor’s “Tool Kit” proposals for public employer-public employee arbitration.

The “Tool Kit” proposal adds a procedure for selecting arbitrators for both contract negotiations and grievance disputes. Under this procedure, the Public Employee Relations Commission (PERC) randomly selects three (3) arbitrators from its special panel for the disputing parties to consider. If the parties do not come up with the mutually agreed arbitrator amongst those three, within 10 days, PERC is authorized to select the arbitrator. This proposal also makes a change in current procedure for disputing local governments and their police and fire unions (interest arbitration) as they must adhere to the same process of selecting an arbitrator.

The proposal imposes a 2.0% cap on arbitration awards and collective bargaining agreements (old proposal was a 2.5% cap)

No public employer or public employee organization can enter into an agreement on economic issues (i.e. wages, salaries, hours in relation to earning, and other forms of compensation, such as paid vacation, paid holidays, medical insurance, etc.) exceeding the capped amount of 2.0%. This proposal also applies to parties involved in interest arbitration - police or fire union organization members (old proposal was a 2.5% cap)

Before an arbitration award is given, the following must be considered: 1) the impact the award would have on local property taxes; 2) the restrictions imposed on local government employers by the “cap law;” 3) comparison of public and private sector wages, benefits and conditions of employment; 4) the general public interest and welfare.

S-2174 (Doherty)/A-2951 (DiCicco/Munoz)/A-2499 (Moriarty/Barnes (In Senate State Government Committee), S-2100 (Sweeney) replaced S-2174. S-2100 on October 7, 2010 was received in the Assembly and was referred to the Assembly State Government Committee)

The purpose of this bill is to eliminate the eligibility for enrollment in any State-administered retirement system, such as the Public Employees’ Retirement system (PERS), for newly hired officers and employees, and for the continued enrollment of those who have less than 10 years of service credit in the retirement system, of the New Jersey League of Municipalities (N.J.S.A.40:48-22), The New Jersey Association of Counties, the New Jersey School Boards Association (N.J.S.A.18a:6-48), and any school board insurance group (N.J.S.A.18A:18B-3) and any county college joint insurance group (N.J.S.A.18a:64A-25.35), and county or municipal joint insurance fund (N.JS.A.40A:10-38), and any corporation designated to manage a special improvement district established by municipal ordinance (N.J.S.A.40:56-58).

Officers or employees who are enrolled in a retirement system before the bill’s effective date, have 10 or more years of service credit in the retirement system on that effective date, and who continue to serve that particular organization, association, group, fund or corporation without a break would not be affected by the bill. As a result of this bill, the entities noted above will not be considered public agencies with regard to their new officers and employees and current officers and employees with less than 10 years of pension service credit and, thus, these officers and employees will not longer be eligible for health care coverage under the State health Benefits Program.

The bill amends the PERS law (N.J.S.A.43:15a-7) to prohibit any officer or employee of a nonprofit organization that is an educational foundation, or substantially similar entity, created by or on behalf of an institution of higher education in this State for the prose of receiving donations from becoming a member of the PERS on the basis of that employment.

The bill repeals two sections of law that permit members of the Teachers’ Pension and Annuity Fund and the Public Employees’ Retirement System to continue to make contributions for service credit while on an approved leave of absence as an officer, or representative of local, county or State labor organization which represents, or is affiliated with an organization which represents, public employees. The contributions are based upon the compensation that would have been received by the member under the negotiated salary guide of the employer granting the leave had that member remained in service with that employer, including applicable normal increments and negotiated wage increases occurring during the period of the leave. The TPAF law was enacted in 1989; the PERS law was enacted in 2005.

Educational Toolkit

S-2025 (Kyrillos)/A-2961 (Handlin/Casagrande) (In Senate Education Committee). Also similar bill A-3386 (Diegan) introduced and referred to the Assembly Education Committee on October 14, 2010

This bill directs each executive county superintendent of schools to require collaboration among school districts in expanding the implementation of shared services among school districts within the county and outside of the county.

The bill also permits the executive county superintendent to require a district to enter into a shared services arrangement with another district, a municipality, the county, or other unit of local government within that county for the provision of administrative, business, purchasing, public or nonpublic pupil transportation, or other school district service if the arrangement will result in cost savings for the districts or other units of local government involved.

Further, the bill requires the executive county superintendent to review and approve all collective negotiations agreements in school districts within the county prior to the execution of those contracts in accordance with standards adopted by the Commissioner of Education.

The standards adopted by the commissioner will include, but not be limited to, a required number of work days per year for school district employees and a minimum number of hours per day of pupil contact time for teachers. The executive county superintendent may not approve a collective negotiations agreement if it fails to comply with the standards or includes salary, wages, and other forms of compensation that would cause the school district to exceed its tax levy growth limitation or prohibits the subcontracting of school district services.

S-2043 (Kyrillos)/A-2960 (DiMaio) (In Senate Labor Committee)

This bill will reinstate the ability of school boards to unilaterally impose their last best contract offers, thereby resolving a negotiations impasse.

The bill also clarifies that, in any case in which collective negotiations between an employer and a majority representative have failed to result in the parties reaching agreement on the terms of a negotiated agreement, the selection of any fact finder or super conciliator will be the sole responsibility of the New Jersey Public Employment Relations Commission (PERC), independent of and without any participation by either of the parties.

Finally, the bill prohibits any fact finder or super conciliator selected by PERC, from issuing any fact finder’s report, or, in the case of a super conciliator, any final report, recommending a collective negotiation settlement or agreement, which exceeds a total of 2.5% on economic issues including wages, salaries, hours in relation to earnings, and other forms of compensation such as paid vacation, paid holidays, health and medical insurance, and other economic benefits to employees.

S-2173 (Kyrillos)/A-2952 (Casagrande/Munoz) (Listed for Discussion Only on 7/19/10 SBA Agenda). S-2173 was replaced by S-2220 (Sarlo). S-2220 on October 25, 2010 passed the Assembly 78-0-0 (Passed both Houses).

Current Law

· Current law imposes these limits on officers and employees commencing service with an individual employer on or after May 21, 2010 and for certain high-level officers and employees who were in service on June 8, 2007. The bill repeals the five sections of law that imposed these limits in 2007 only on certain high-level officers and employees of boards of education and local governments.

Emergency Appropriations

· The bill amends a section of law that permits local units to adopt an ordinance authorizing special emergency appropriations for contractually required severance liabilities resulting from the layoff or retirement of employees by removing the condition that this occur only when the total liability is in excess of 10 per cent of the amount to be raised by taxes for municipal purposes in the fiscal year in which the layoffs or retirements take place. The bill provides that such liabilities are to be paid without interest and, at the sole discretion of the local unit, may be paid in equal annual installments over a period not to exceed 10 years.

Limitations on use of Sick Leave

· The bill imposes limits on the use of sick leave by a State, local, or board of education employee in the twelve months before retirement. Specifically, the bill prohibits the use of six or more consecutive days of accumulated sick leave, without medical necessity verified in writing by a physician, by an officer or employee in the twelve months prior to retirement in anticipation of that retirement. The employer may require the officer or employee to submit to an examination by a physician selected by the employer to verify the medical necessity. The employer must (1) impose a fine and issue a reprimand against the officer or employee found to be in violation of this prohibition, with the fine to be an amount equivalent to three times the daily rate of compensation for each day of violation, or (2) for a subsequent violation of the prohibition, deduct a number of sick leave days equivalent to the number found to have been used in violation of the prohibition from the number of unused accumulated sick leave credited on the effective date of retirement upon which supplemental compensation, if any, for the officer or employee at the time of retirement is calculated, or (3) both.

Effective Date

· The bill would not be deemed to impair the obligation of a collective negotiations agreement or individual contract of employment with relevant provisions in effect on the bill’s effective date. The bill would take effect on July 1, 2010, or if enacted after that date, immediately upon enactment.

Higher Education Toolkit

S-2026 (T. Kean)/A-2963 (Webber/Munoz) (In Senate Education Committee). Similar bill S-2338 (T. Kean)/A-3220 (Webber) introduced September 16, 2010 and October 7, 2010 (In Senate Education Committee)

· This bill exempts employees of the state colleges and universities from Civil Service.

This proposal removes classified employees of the state colleges and universities from Civil Service status and include them within each institution’s personnel system (N.J.S.A. 18A:64-6(h) and (i)).

The powers and duties of the state college boards of trustees would be amended to delete references to Civil Service so that upon recommendation by the president, the board has the power to appoint, remove, promote and transfer all employees as shall be required to carry out the purposes of the college/university and assign their duties, determine their salaries and prescribe qualifications for all positions in accordance with policies adopted by the board of trustees. Moreover, the statutory authority of the state colleges’ and universities’ boards of trustees to determine policies for the organization, administration and development of the college/university would be amended to include personnel (N.J.S.A. 18A:64-6.c).

Between 25% and 45% of the employees at each state college and university are in Civil Service status, and each institution’s board of trustees is required to assign duties, determine salaries, and prescribe qualifications for positions ―in accordance with the provisions of Title 11, Civil Service, of the revised Statutes (N.J.S.A. 18:64-6.i.), even though the State is not the employer of record for these employees and does not pay the salaries of these employees. Moreover, these employees work in an environment that is wholly different than the usual State agency, and one that is little understood by State personnel regulators. Also, this bill designates the state colleges and universities as the employer of record of their employees for the purpose of collective bargaining (C. 18A:64-21.1).

Under current law, the governor—through the Office of Employee Relations—conducts negotiations on behalf of the nine state colleges and universities with the state employees’ bargaining units, most prominently with the Council of New Jersey State College Locals - AFT - AFL-CIO, which represents the faculty. This proposed change would make the collective-bargaining laws for public higher education in New Jersey consistent. The other senior public institutions—Rutgers University, the New Jersey Institute of Technology, and the University of Medicine and Dentistry—all conduct their own negotiations. Each county college conducts its own negotiations as well.

S-2027 (T. Kean)/A-2962 (Munoz) (In Senate Education Committee)

· This bill mandates that fact-finder decisions for employees of public school districts and public institutions of higher education address (a) the impact of reductions in state and county funding, (b) the impact of the settlement on tuition rates, and (c) the benefit standards provided for State employees.

· Fact finding occurs when collective bargaining reaches impasse, and mediation procedures under the Public Employment Relations Commission (PERC) have been exhausted. Under P.L. 2003, c. 126 (C. 34:13A-31 — 34:13A-39), the state colleges and universities may not unilaterally impose their last best offer if impasses occurs.

S-2067 (T. Kean)/S-2965 (DiMaio). S-2067 was referred to SBA on August 16, 2010. Also referred to Committee was S-1998 (Ruiz). S-2067 was combined with S-1998 on August 23, 2010 and on October 25, 2010, S-1998 passed the Assembly 77-0-1 (passed both Houses).

· This bill transfer authority for administering Workers' Compensation to the state colleges and universities.

This proposal would authorize the state colleges and universities to obtain the services and insurance coverage required to manage their own workers’ compensation program.

· Currently, Treasury’s Bureau of Risk Management administers the state colleges’ and universities’ workers’ compensation claims, and the Attorney General represents the institutions before the Workers’ Compensation Court. The Bureau of Risk Management bills the institutions quarterly for money paid by the state on behalf of the institutions for administering their workers’ compensation claims, with little or no input from the institutions. Over the past five years, the state colleges’ and universities’ workers’ compensation payments have increased over 100%.

The State would benefit by allowing the state colleges and universities to maintain their own worker’s compensation program. The institutions anticipate substantial savings from more efficient operations and greater scrutiny over claims. The State would no longer need to administer the institutions’ claims, and it could devote more resources to agencies with greater risk profiles.

· New Jersey’s county colleges have administered their own workers’ compensation program for over 20 years. Other states have successfully implemented such programs for their public colleges, and these programs have successfully controlled costs and met workers’ needs.

S-2172(Bateman)/A-2964 (Webber/Munoz) (In Senate Education Committee)

The bill authorizes the state colleges and universities to establish a probationary period for faculty consistent with the needs of the institution and national practice.

The Governor’s proposal amends the provisions of the State and County College Tenure Act (N.J.S.A. 18A:60-8 through 18A:60-15) regarding tenure and career development, and expanding the authority of the institutions’ boards of trustees (N.J.S.A. 18A:64-6) to cover these matters under appropriate personnel policies.

Probationary appointments may be for a specific stated period, subject to renewal. Probationary periods are typically six years, with tenure granted in the seventh year.

Institutions would inform each person with a teaching or research appointment each year in writing of the renewal of the appointment, and of all matters relative to eligibility for the acquisition of tenure.

Faculty members will be advised, at the time of their initial appointment, of the substantive standards and procedures generally employed in decisions affecting renewal and tenure. Any special standards adopted by the faculty members’ department or school will also be transmitted. Faculty members will be advised of the time when decisions affecting renewal or tenure are ordinarily made, and will be given the opportunity to submit material believed to be helpful to an adequate consideration of their circumstances.

The faculty member will receive written notice that a probationary appointment is not to be renewed in advance of the expiration of the appointment.

Miscellaneous

S-1781(Beach)/A-1646 (Norcross) (Reported from Senate State Government Committee unanimously with promise that concerns would be addressed and October 18, 2010 Senate Amendment (33-0).

· This bill directs that one sample ballot be delivered to each residence address where at least one resident is registered to vote instead of one ballot for each registered voter at the address as is required under current law.

School/Fire District Elections:

The Governor has proposed to move school district and fire district elections to November.

S-1312 (Turner)/A-2143 (DeAngelo/Wolfe/Moriarty) is similar to the Governor’s proposal. The bill provides for the election of school board members at the November general election and eliminates the vote on school budgets except for separate proposals to spend above cap which also will occur at the general election. If, a district determines when it is preparing its budget to seek voter approval for additional funding over its budget cap, that district will submit a temporary budget to the commissioner. If the voters approve spending above the cap, then the additional spending becomes part of the permanent budget. If not, the temporary budget (the budget under cap) becomes the permanent budget.

Legislative staff asked the Governor’s Office if it would like to introduce a revised version of S-1312/A-2143 that also moved the fire district elections to November. (Fire district elections currently occur on the 3rd Saturday in February.) The Governor’s Office did not agree to that plan because it was unable to agree to eliminate budget elections for budgets under cap. Both Legislative staff and the Governor’s Office staff have not determined a way to keep the initial budget election for budgets under cap and still move the election to November due to the conflict that arises with the school district calendar. Therefore, no legislation was introduced to effectuate the Governor’s proposal. Staff has again begun to have meetings on this subject and hopes to introduced legislation soon.

Democrat Toolkit Proposals – Listed on 7/19/10 Senate Budget and Appropriations Committee Agenda:

S-2072 (Stack)/A-2082 (Cryan/Wagner/Coutinho) (Reported from SBA unanimously)

This bill permits governments and individuals to publish legal notices on an official government website instead of in a newspaper.

The bill does not eliminate the ability of an individual or a government entity to meet publication requirements through newspaper publication as set forth under current law. It also does not alter existing notice content and publication time

frame requirements.

S-2208 (Sarlo/Allen) (On September 30, 2010 passed the Assembly 75-0-0 and was received in the Senate for 2^nd Reading on Concurrence)

· This bill allows the Council on Local Mandates to authorize certain organizations to file complaints.

· This bill would implement recommendation number 21 of Governor Chris Christie’s 33-bill package of reforms aimed at solving New Jersey's property tax crisis.

S-2100 (Sweeney) S-2100 replaced S-2174 (Doherty)/A-2951 (DiCicco/Munoz)/A-2499 (Moriarty/Barnes (In Senate State Government Committee). On October 7, 2010 S-2100 was received in the Assembly and was referred to the Assembly State Government Committee

Eliminates the eligibility for enrollment in any State-administered retirement system, such as the Public Employees’ Retirement System (PERS), for newly hired officers and employees, and for the continued enrollment of those who have less than five years of service credit in the retirement system, of the New Jersey State League of Municipalities (N.J.S.A.40:48-22), the New Jersey Association of Counties, the New Jersey School Boards Association (N.J.S.A.18A:6-48), any school board insurance group (N.J.S.A.18A:18B-3), any county college joint insurance group (N.J.S.A.18A:64A-25.35), any county or municipal joint insurance fund (N.J.S.A.40A:10-38), and any corporation designated to manage a special improvement district established by municipal ordinance (N.J.S.A.40:56-68).

Eliminates the eligibility of these officers and employees for health care benefits coverage through the State Health Benefits Program or through any health care benefits plan or program provided by the State or a political subdivision of this State, as an employer, for its officers and employees. The eligibility for coverage for all current officers and employees is terminated 24 months after the bill’s effective date.

Provides that a person commencing service on or after the effective date of the bill as an officer or employee of such an organization, association, group, fund, or corporation would no longer be eligible for enrollment in a retirement system or in a health care benefits plan or program for public employees, on the basis of that service. Officers or employees who are enrolled in a retirement system or in a health care benefits plan or program before the bill’s effective date and who continue to serve that particular organization, association, group, fund or corporation without a break would not be affected by the bill except as provided.

Amends the PERS law (N.J.S.A.43:15A-7) to prohibit any officer or employee of a nonprofit organization that is an educational foundation, or substantially similar entity, created by or on behalf of an institution of higher education in this State for the purpose of receiving donations from becoming a member of the PERS on the basis of that employment.

S-2206 (Sweeney) (Listed for Discussion Only on 7/19/10 SBA Agenda. This bill contains a portion of S-2039 (Bateman))

This bill provides that a State or local appointing authority in civil service may institute a temporary layoff for economy, efficiency, or other related reasons.

A temporary layoff is defined as the closure of an entire layoff unit for one or more work days over a defined period or a staggered layoff of each employee in a layoff unit for one or more work days over a defined period.

A temporary layoff will be considered a single layoff even though the layoff of individual employees takes place on different days during the defined period.

The defined period will be set forth by the appointing authority in its temporary layoff plan. In a staggered layoff, however, the maximum period to stagger one day off is limited to 45 days.

The bill also provides that a temporary layoff may, with the approval of the chairperson of the Civil Service Commission, be subject to limited exceptions when necessary to ensure continued public health and safety, including but not limited to child welfare, law enforcement, and care for prisoners, patients, and other residents in the care or custody of State or local government.

Democrat Toolkit Proposals – Listed on 8/16/10 Senate Budget and Appropriations Committee Agenda:

S-2220 (Sarlo) replaced S-2173 (Doherty). S-2220 passed both Houses on October 25, 2010.

· This bill amends current law to make applicable for all current and future officers and employees of boards of education and local governments the limit of $15,000 for the payment of supplemental compensation at retirement for accumulated unused sick leave, and the limit on the carrying forward of vacation leave for one year only. The bill allows current officers and employees to retain any supplemental compensation for unused sick leave, or to carry forward any vacation leave, already accrued as of the bill’s effective date.

· This bill permits local units to adopt an ordinance authorizing special emergency appropriations for contractually required severance liabilities resulting from the layoff or retirement of employees by removing the condition that this occur only when the total liability is in excess of 10 per cent of the amount to be raised by taxes for municipal purposes in the fiscal year in which the layoffs or retirements take place. The bill goes on to provide that such liabilities are to be paid without interest and, at the sole discretion of the local unit, may be paid in equal annual installments over a period not to exceed 10 years.

· This bill imposes limits on the use of sick leave by a State, local, or board of education employee in the twelve months before retirement. This provision applies to employees who commence employment with an individual employer on or after the bill’s effective date. The bill prohibits the use of six or more consecutive days of accumulated sick leave, without medical necessity verified in writing by a physician, by an officer or employee in the twelve months prior to retirement in anticipation of that retirement.

· The bill provides that the employer may require the officer or employee to submit to an examination by a physician selected by the employer to verify the medical necessity. Provides that the employer must (1) impose a fine and issue a reprimand against the officer or employee found to be in violation of this prohibition, with the fine to be an amount equivalent to three times the daily rate of compensation for each day of violation, or (2) for a subsequent violation of the prohibition, deduct a number of sick leave days equivalent to the number found to have been used in violation of this prohibition from the number of unused accumulated sick leave credited on the effective date of retirement upon which supplemental compensation, if any, for the officer or employee at the time of retirement is calculated, or (3) both.

· The bill would not be deemed to impair the obligation of a collective negotiations agreement or individual contract of employment with relevant provisions in effect on the bill’s effective date.

S-1998 (Ruiz) and S-2067 (Kean) were on the August 16, 2010 SBA agenda. S-2067 was combined with S-1998 on August 23, 2010 and on October 25, 2010, S-1998 passed Assembly 77-0-1 (Passed both Houses)

This bill authorizes formation of State college risk management groups and joint liability funds. The committee substitute authorizes two or more State colleges or universities to form a State college risk management group and to participate in joint liability funds, risk management programs, and related services provided by the group, subject to certain regulatory oversight by the Commissioner of Banking. This bill modifies the current authority of the Division of Risk Management in the Department of the Treasury to allow State colleges to form their own risk management groups and joint liability funds to provide that coverage.

The substitute provides that the State college risk management group will have the authority to establish joint liability funds through the contributions of its members and to jointly purchase insurance under a master policy for participating members in the areas of property damage, liability, and workers’ compensation coverage. A State college or university, upon a resolution of its board of trustees, may elect to participate in a group.

The State college risk management group will establish bylaws to provide for, among other things:

1. operation and governance of the group;

2. procedures for the collection of contributions and payments from members;

3. the maintenance of excess insurance or reinsurance for each joint liability fund; and

4. withdrawal from the group.

The bylaws of the group must also provide for the selection of a board of trustees which will exercise governing power over the group. The board will consist of between 3 and 15 trustees, a majority of who will be employees of the member colleges or universities.

Under the substitute’s provisions, a State college risk management group, or any joint liability fund of the group, will not begin functioning until its bylaws have been approved by the Commissioner of Banking. A group must file an annual report, including a financial statement, with the Commissioner. If at any time the Commissioner determines that the group has experienced deterioration in its financial condition which adversely affects its ability to pay expected claims, the Commissioner may require the group to either increase its reserves or purchase additional excess insurance or reinsurance.

Current Law

Currently, the authority for risk management for State Colleges rests with the Division of Risk Management in the Department of the Treasury.