An Act concerning interest rates and the accrual of interest on certain unpaid water and sewer utility bills and delinquent municipal taxes, assessments, and other municipal liens and charges, amending various parts of statutory law and supplementing Title 58 of the Revised Statutes.

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

1. Section 3 of P.L.1946, c.138 (C.40:14A-3) is amended to read as follows:

3. As used in [this act] P.L.1946, c.138 (C.40:14A-1 et seq.), unless a different meaning clearly appears from the context:

(1) "Municipality" shall mean any city of any class, any borough, village, town, township, or any other municipality other than a county or a school district, and except when used in section 4 or 21 of [this act] P.L.1946, c.138 (C.40:14A-4 or 40:14A-21), any agency thereof or any two or more thereof acting jointly or any joint meeting or other agency of any two or more thereof;

(2) "County" shall mean any county of any class;

(3) "Governing body" shall mean, in the case of a county, the board of chosen freeholders, or in the case of those counties organized pursuant to the provisions of the "Optional County Charter Law," P.L.1972, c.154 (C.40:41A-1 et seq.), the board of chosen freeholders and the county executive, the county supervisor or the county manager, as appropriate, and, in the case of a municipality, the commission, council, board, or body, by whatever name it may be known, having charge of the finances of the municipality;

(4) "Person" shall mean any person, association, corporation, nation, State, or any agency or subdivision thereof, other than a county or municipality of the State or a sewerage authority;

(5) "Sewerage or water reclamation authority" shall mean a public body created pursuant to section 4 of [this act] P.L.1946, c.138 (C.40:14A-4);

(6) Subject to the exceptions provided in section 4 of [this act] P.L.1946, c.138 (C.40:14A-4), "district" shall mean the area within the territorial boundaries of the county, or of the municipality or municipalities, which created or joined in the creation of a sewerage authority;

(7) "Local unit" shall mean the county, or any municipality, which created or joined in the creation of a sewerage authority;

(8) "Sewerage system" shall mean the plants, structures, on-site waste-water systems, and other real and personal property acquired, constructed, maintained, or operated or to be acquired, constructed, maintained, or operated by a sewerage authority for the purposes of the sewerage authority, including sewers, conduits, pipe lines, mains, pumping and ventilating stations, sewage treatment or disposal systems, plants and works, connections, and outfalls, compensating reservoirs, and other plants, structures, boats, conveyances, and other real and personal property, and rights therein, and appurtenances necessary or useful and convenient for the collection, treatment, purification, or disposal in a sanitary manner of any sewage, liquid or solid wastes, night soil, or industrial wastes;

(9) "Cost" shall mean, in addition to the usual connotations thereof, the cost of acquisition or construction of all or any part of a sewerage system and of all or any property, rights, easements, privileges, agreements, and franchises deemed by the sewerage authority to be necessary or useful and convenient therefor or in connection therewith and the cost of retiring the present value of the unfunded accrued liability due and owing by a sewerage authority, as calculated by the system actuary for a date certain upon the request of a sewerage authority, for early retirement incentive benefits granted by the sewerage authority pursuant to P.L.1991, c.230 and P.L.1993, c.181, including interest or discount on bonds, cost of issuance of bonds, engineering and inspection costs and legal expenses, costs of financial, professional, and other estimates and advice, organization, administrative, operating, and other expenses of the sewerage authority prior to and during such acquisition or construction, and all such other expenses as may be necessary or incident to the financing, acquisition, construction, and completion of [said] the sewerage system or part thereof and the placing of the same in operation, and also such provision or reserves for working capital, operating, maintenance, or replacement expenses or for payment or security of principal of or interest on bonds during or after such acquisition or construction as the sewerage authority may determine, and also reimbursements to the sewerage authority or any county, municipality, or other person of any moneys theretofore expended for the purposes of the sewerage authority or to any county or municipality of any moneys theretofore expended for in connection with sanitation facilities;

(10) "Real property" shall mean lands both within and without the State, and improvements thereof or thereon, or any rights or interests therein;

(11) "Construct" and "construction" shall connote and include acts of construction, reconstruction, replacement, extension, improvement, and betterment of a sewerage system;

(12) "Industrial wastes" shall mean liquid or other wastes resulting from any processes of industry, manufacture, trade, or business or from the development of any natural resource;

(13) "Sewage" shall mean the water-carried wastes created in and carried, or to be carried, away from, or to be processed by on-site wastewater systems, residences, hotels, apartments, schools, hospitals, industrial establishments, or any other public or private building, together with such surface or ground water and industrial wastes as may be present;

(14) "On-site wastewater system" means any of several works, facilities, septic tanks, or other devices, used to collect, treat, reclaim, or dispose of wastewater or sewage on or adjacent to the property on which the wastewater or sewage is produced, or to convey such wastewater or sewage from [said] that property to such facilities as the authority may establish for its disposal;

(15) "Pollution" means the condition of water resulting from the introduction therein of substances of a kind and in quantities rendering it detrimental or immediately or potentially dangerous to the public health, or unfit for public or commercial use;

(16) "Ordinance" means a written act of the governing body of a municipality adopted and otherwise approved and published in the manner or mode of procedure prescribed for ordinances tending to obligate such municipality pecuniarily;

(17) "Resolution" means a written act of the governing body of a local unit adopted and otherwise approved in the manner or mode of procedure prescribed for resolutions tending to obligate such local unit pecuniarily;

(18) "Bonds" shall mean bonds or other obligations issued pursuant to [this act] P.L.1946, c.138 (C.40:14A-1 et seq.); [and]

(19) "Compensating reservoir" shall mean the structures, facilities, and appurtenances for the impounding, transportation, and release of water for the replenishment in periods of drought or at other necessary times of all or a part of waters in or bordering the State diverted into a sewer, sewage treatment, or sewage disposal system operated by the sewerage authority; and

(20) "Prevailing municipal bond yield" means the average estimated yield that would be offered on 20-year general obligation bonds with a composite rating of approximately "A" as reflected by the Bond Buyer 20-Bond Municipal Bond Index during the first week of the last month of the calendar year immediately preceding the calendar year in which the service charge was due; provided however, that, if the sewerage authority determines that the average estimated yield decreases by more than one percentage point from the yield previously determined, the sewerage authority shall redetermine the prevailing municipal bond yield to be that average estimated yield for subsequent calendar quarters of the calendar year in which service charges become due.

(cf: P.L.2002, c.42, s.4)

2. Section 21 of P.L.1946, c.138 (C.40:14A-21) is amended to read as follows:

21. (a) In the event that a service charge of any sewerage authority with regard to any parcel of real property shall not be paid as and when due and remains unpaid for 30 days following the date for the payment thereof, interest shall accrue and be due to the sewerage authority on the unpaid balance at [the] a rate [of 1 1/2 % per month] equal to the prevailing municipal bond yield assessed for each month or fraction thereof, compounded annually at the end of each year, from the date the service charge was originally due until [such] the date the service charge, and the interest thereon, shall be fully paid to the sewerage authority.

(b) In the event that a service charge of any sewerage authority with regard to any parcel of real property owned by any person other than the State or an agency or subdivision thereof shall not be paid as and when due, the unpaid balance thereof and all interest accruing thereon shall be a lien on such parcel. Such lien shall be superior and paramount to the interest in such parcel of any owner, lessee, tenant, mortgagee, or other person except the lien of municipal taxes and shall be on a parity with and deemed equal to the lien on such parcel of the municipality where such parcel is situate for taxes thereon due in the same year and not paid when due. Such lien shall not bind or affect a subsequent bona fide purchaser of such parcel for a valuable consideration without actual notice of such lien, unless the sewerage authority shall have filed in the office of the collector or other officer of [said] that municipality charged with the duty of enforcing municipal liens on real property a statement showing the amount and due date of such unpaid balance and identifying such parcel, which identification may be sufficiently made by reference to the assessment map of [said] that municipality. The information shown in such statement shall be included in any certificate with respect to [said] that parcel thereafter made by the official of [said] that municipality vested with the power to make official certificates of searches for municipal liens. Whenever such service charge and any subsequent service charge with regard to such parcel and all interest accrued thereon shall have been fully paid to the sewerage authority, such statement shall be promptly withdrawn or cancelled by the sewerage authority.

(c) In the event that a service charge of any sewerage authority with regard to any parcel of real property shall not be paid as and when due, the sewerage authority may, in its discretion, enter upon such parcel and cause the connection thereof leading directly or indirectly to the sewerage system to be cut and shut off until such service charge and any subsequent service charge with regard to such parcel and all interest accrued thereon shall be fully paid to the sewerage authority.

(d) In the event that a service charge of any sewerage authority with regard to any parcel of real property shall not be paid as and when due, the sewerage authority may, in accordance with section [twenty-six] 26 of [this act] P.L.1946, c.138 (C.40:14A-26), cause the supply of water to such parcel to be stopped or restricted until such service charge and any subsequent service charge with regard to such parcel and all interest accrued thereon shall be fully paid to the sewerage authority. If for any [any] reason such supply of water shall not be promptly stopped or restricted as required by section [twenty-six] 26 of [this act] P.L.1946, c.138 (C.40:14A-26), the sewerage authority may itself shut off or restrict such supply and, for that purpose, may enter on any lands, waters, or premises of any county, municipality, or other person. The supply of water to such parcel shall, notwithstanding the provisions of this subsection, be restored or increased if the [State] Department of Health, upon application of the local board of health or health officer of the municipality where such parcel is situate, shall after public hearing find and shall certify to the sewerage authority that the continuance of such stopping or restriction of the supply of water endangers the health of the public in such municipality.

(e) The collector or other officer of every municipality charged by law with the duty of enforcing municipal liens on real property shall enforce, with and as any other municipal lien on real property in such municipality, all service charges and the lien thereof shown in any statement filed with him by any sewerage authority pursuant to subsection (b) of this section, and shall pay over to the sewerage authority the sums or a pro rata share of the sums realized upon such enforcement or upon liquidation of any property acquired by the municipality by virtue of such enforcement.

(f) In the event that any service charge of a sewerage authority shall not be paid as and when due, the unpaid balance thereof and all interest accrued thereon, together with attorney's fees and costs, may be recovered by the sewerage authority in a civil action, and any lien on real property for such service charge and interest accrued thereon may be foreclosed or otherwise enforced by the sewerage authority by action or suit in equity as for the foreclosure of a mortgage on such real property.

(g) All rights and remedies granted by [this act] P.L.1946, c.138 (C.40:14A-1 et seq.) for the collection and enforcement of service charges shall be cumulative and concurrent.

(cf: P.L.1981, c.530, s.1)

3. Section 3 of P.L.1957, c.183 (C.40:14B-3) is amended to read as follows:

3. As used in [this act] P.L.1957, c.183 (C.40:14B-1 et seq.), unless a different meaning clearly appears from the context:

(1) "Municipality" shall mean any city of any class, any borough, village, town, township, or any other municipality other than a county or a school district, and except when used in section 4, 5, 6, 11, 12, 13, 42 or 45 of [this act] P.L.1957, c.183 (C.40:14B-4, 40:14B-5, 40:14B-6, 40:14B-11, 40:14B-12, 40:14B-13, 40:14B-42, or 40:14B-45), any agency thereof or any two or more thereof acting jointly or any joint meeting or other agency of any two or more thereof;

(2) "County" shall mean any county of any class;

(4) "Person" shall mean any person, association, corporation, nation, state, or any agency or subdivision thereof, other than a county or municipality of the State or a municipal authority;

(5) "Municipal authority," "authority," or "water reclamation authority" shall mean a public body created or organized pursuant to section 4, 5, or 6 of [this act] P.L.1957, c.183 (C.40:14B-4, 40:14B-5, or 40:14B-6) and shall include a municipal utilities authority created by one or more municipalities and a county utilities authority created by a county;

(6) Subject to the exceptions provided in section 10, 11, or 12 of [this act] P.L.1957, c.183 (C.40:14B-10, 40:14B-11, or 40:14B-12), "district" shall mean the area within the territorial boundaries of the county, or of the municipality or municipalities, which created or joined in or caused the creation or organization of a municipal authority;

(7) "Local unit" shall mean the county, or any municipality, which created or joined in or caused the creation or organization of a municipal authority;

(8) "Water system" shall mean the plants, structures, and other real and personal property acquired, constructed, or operated or to be acquired, constructed, or operated by a municipal authority or by any person to whom a municipal authority has extended credit for this purpose for the purposes of the municipal authority, including reservoirs, basins, dams, canals, aqueducts, standpipes, conduits, pipelines, mains, pumping stations, water distribution systems, compensating reservoirs, waterworks or sources of water supply, wells, purification or filtration plants or other plants and works, connections, rights of flowage or division, and other plants, structures, boats, conveyances, and other real and personal property, and rights therein, and appurtenances necessary or useful and convenient for the accumulation, supply, and redistribution of water;

(9) "Sewerage system" shall mean the plants, structures, on-site wastewater systems, and other real and personal property acquired, constructed, or operated or to be acquired, constructed, maintained, or operated by a municipal authority or by any person to whom a municipal authority has extended credit for this purpose for the purposes of the municipal authority, including sewers, conduits, pipelines, mains, pumping and ventilating stations, sewage treatment or disposal systems, plants and works, connections, outfalls, compensating reservoirs, and other plants, structures, boats, conveyances, and other real and personal property, and rights therein, and appurtenances necessary or useful and convenient for the collection, treatment, purification, or disposal in a sanitary manner of any sewage, liquid or solid wastes, night soil, or industrial wastes;

(10) "Utility system" shall mean a water system, solid waste system, sewerage system, or a hydroelectric system or any combination of such systems, acquired, constructed, or operated or to be acquired, constructed, or operated by a municipal authority or by any person to whom a municipal authority has extended credit for this purpose;

(11) "Cost" shall mean, in addition to the usual connotations thereof, the cost of acquisition or construction of all or any part of a utility system and of all or any property, rights, easements, privileges, agreements, and franchises deemed by the municipal authority to be necessary or useful and convenient therefor or in connection therewith and the cost of retiring the present value of the unfunded accrued liability due and owing by a municipal authority, as calculated by the system actuary for a date certain upon the request of a municipal authority, for early retirement incentive benefits granted by the municipal authority pursuant to P.L.1991, c.230 and P.L.1993, c.181, including interest or discount on bonds, cost of issuance of bonds, engineering and inspection costs and legal expenses, cost of financial, professional and other estimates and advice, organization, administrative, operating, and other expenses of the municipal authority prior to and during such acquisition or construction, and all such other expenses as may be necessary or incident to the financing, acquisition, construction and completion of [said] the utility system or part thereof and the placing of the same in operation, and also such provision or reserves for working capital, operating, maintenance, or replacement expenses or for payment or security of principal of or interest on bonds during or after such acquisition or construction as the municipal authority may determine, and also reimbursements to the municipal authority or any county, municipality, or other person of any moneys theretofore expended for the purposes of the municipal authority or to any county or municipality of any moneys theretofore expended for or in connection with water supply, solid waste, water distribution, sanitation, or hydroelectric facilities;

(12) "Real property" shall mean lands both within or without the State, and improvements thereof or thereon, or any rights or interests therein;

(13) "Construct" and "construction" shall connote and include acts of construction, reconstruction, replacement, extension, improvement, and betterment of a utility system;

(14) "Industrial wastes" shall mean liquid or other wastes resulting from any processes of industry, manufacture, trade, or business or from the development of any natural resource, and shall include any chemical wastes or hazardous wastes;

(15) "Sewage" shall mean the water-carried wastes created in and carried, or to be carried, away from, or to be processed by on-site wastewater systems, residences, hotels, apartments, schools, hospitals, industrial establishments, or any other public or private building, together with such surface or ground water and industrial wastes and leacheate as may be present;

(16) "On-site wastewater system" means any of several facilities, septic tanks or other devices, used to collect, treat, reclaim, or dispose of wastewater or sewage on or adjacent to the property on which the wastewater or sewage is produced, or to convey such wastewater or sewage from [said] that property to such facilities as the authority may establish for its disposal;

(17) "Pollution" means the condition of water resulting from the introduction therein of substances of a kind and in quantities rendering it detrimental or immediately or potentially dangerous to the public health, or unfit for public or commercial use;

(18) "Bonds" shall mean bonds or other obligations issued pursuant to [this act] P.L.1957, c.183 (C.40:14B-1 et seq.);

(19) "Service charges" shall mean water service charges, solid waste service charges, sewer service charges, hydroelectric service charges or any combination of such charges, as [said] those terms are defined in section 21 or 22 of [this act] P.L.1957, c.183 (C.40:14B-21 or 40:14B-22) or in section 7 of this [amendatory and supplementary act] P.L.1980, c.34 (C.40:14B-21.1);

(20) "Compensating reservoir" shall mean the structures, facilities, and appurtenances for the impounding, transportation, and release of water for the replenishment in periods of drought or at other necessary times of all or a part of waters in or bordering the State diverted into a utility system operated by a municipal authority;

(21) "Sewage or water reclamation authority" shall mean a public body created pursuant to the "sewerage authorities law," P.L.1946, c.138 (C.40:14A-1 et seq.) or the acts amendatory thereof or supplemental thereto;

(22) "County sewer authority" shall mean a sanitary sewer district authority created pursuant to the act entitled "An act relating to the establishment of sewerage districts in first- and second-class counties, the creation of Sanitary Sewer District Authorities by the establishing of such districts, prescribing the powers and duties of any such authority and of other public bodies in connection with the construction of sewers and sewage disposal facilities in any such district, and providing the ways and means for paying the costs of construction and operation thereof," approved April 23, 1946 (P.L.1946, c.123), or the acts amendatory thereof or supplemental thereto;

(23) "Chemical waste" shall mean a material normally generated by or used in chemical, petrochemical, plastic, pharmaceutical, biochemical, or microbiological manufacturing processes or petroleum refining processes, which has been selected for waste disposal and which is known to hydrolize, ionize, or decompose, which is soluble, burns, or oxidizes, or which may react with any of the waste materials which are introduced into the landfill, or which is buoyant on water, or which has a viscosity less than that of water or which produces a foul odor. Chemical waste may be either hazardous or nonhazardous;

(24) "Effluent" shall mean liquids which are treated in and discharged by sewage treatment plants;

(25) "Hazardous wastes" shall mean any waste or combination of waste which poses a present or potential threat to human health, living organisms, or the environment. "Hazardous waste" shall include, but not be limited to, waste material that is toxic, corrosive, irritating, sensitizing, radioactive, biologically infectious, explosive, or flammable;

(26) "Leachate" shall mean a liquid that has been in contact with solid waste and contains dissolved or suspended materials from that solid waste;

(27) "Recycling" shall mean the separation, collection, processing, or recovery of metals, glass, paper, solid waste, and other materials for reuse or for energy production and shall include resource recovery;

(28) "Sludge" shall mean any solid, semisolid, or liquid waste generated from a municipal, industrial, or other sewage treatment plant, water supply treatment plant, or air pollution control facility, or any other such waste having similar characteristics and effects[; "sludge"] . "Sludge" shall not include effluent;

(29) "Solid waste" shall mean garbage, refuse, and other discarded materials resulting from industrial, commercial, and agricultural operations, and from domestic and community activities, and shall include all other waste materials including sludge, chemical waste, hazardous wastes and liquids, except for liquids which are treated in public sewage treatment plants and except for solid animal and vegetable wastes collected by swine producers licensed by the [State] Department of Agriculture to collect, prepare, and feed such wastes to swine on their own farms;

(30) "Solid waste system" shall mean and include the plants, structures, and other real and personal property acquired, constructed, or operated or to be acquired, constructed, or operated by an authority or by any person to whom a municipal authority has extended credit for this purpose pursuant to the provisions of [this act] P.L.1957, c.183 (C.40:14B-1 et seq.), including transfer stations, incinerators, recycling facilities, including facilities for the generation, transmission, and distribution of energy derived from the processing of solid waste, sanitary landfill facilities, or other property or plants for the collection, recycling, or disposal of solid waste and all vehicles, equipment, and other real and personal property and rights thereon and appurtenances necessary or useful and convenient for the collection, recycling, or disposal of solid waste in a sanitary manner;

(31) "Hydroelectric system" shall mean the plants, structures, and other real and personal property acquired, constructed, or operated or to be acquired, constructed or operated by an authority pursuant to the provisions of [this act] P.L.1957, c.183 (C.40:14B-1 et seq.), including all that which is necessary or useful and convenient for the generation, transmission, and sale of hydroelectric power at wholesale;

(32) "Hydroelectric power" shall mean the production of electric current by the energy of moving water;

(33) "Sale of hydroelectric power at wholesale" shall mean any sale of hydroelectric power to any person for purposes of resale of such power;

(34) "Alternative electrical energy" shall mean electrical energy produced from solar, photovoltaic, wind, geothermal, or biomass technologies, provided that in the case of biomass technology, the biomass is cultivated and harvested in a sustainable manner;

(35) "Alternative electrical energy system" shall mean any system which uses alternative electrical energy to provide all or a portion of the electricity for the heating, cooling, or general electrical energy needs of a building;

(36) "Pilot county" shall mean a county of the second class having a population between 280,000 and 290,000, a population between 510,000 and 520,000, and a population between 530,000 and 540,000 according to the 2010 federal decennial census; [and]

(37) "Pilot county utilities authority" shall mean a county utilities authority in a county designated as a pilot county; and

(38) "Prevailing municipal bond yield" means the average estimated yield that would be offered on 20-year general obligation bonds with a composite rating of approximately "A" as reflected by the Bond Buyer 20-Bond Municipal Bond Index during the first week of the last month of the calendar year immediately preceding the calendar year in which the service charge was due; provided however, that, if the municipal authority determines that the average estimated yield decreases by more than one percentage point from the yield previously determined, the municipal authority shall redetermine the prevailing municipal bond yield to be that average estimated yield for subsequent calendar quarters of the
calendar year in which service charges become due.

(cf: P.L.2013, c.190, s.3)

4. Section 41 of P.L.1957, c.183 (C.40:14B-41) is amended to read as follows:

41. In the event that a service charge of any municipal authority with regard to any parcel of real property shall not be paid as and when due and remains unpaid for 30 days following the date for the payment thereof, interest shall accrue and be due to the municipal authority on the unpaid balance at [the] a rate [of 1 1/2% per month] equal to the prevailing municipal bond yield assessed for each month or fraction thereof, compounded annually at the end of each year, from the date the service charge was originally due until [such] the date the service charge, and the interest thereon, shall be fully paid to the municipal authority.

(cf: P.L.1981, c.530, s.2)

5. Section 1 of P.L.1952, c.324 (C.40:62-83.1) is amended to read as follows:

1. Any municipality which, pursuant to law, furnishes a supply of water and sewerage service to the inhabitants of another municipality, may, if prompt payment of any water or sewer rent, or charges for work done or materials furnished for such services, is not made by any such inhabitant when due, discontinue the service so furnished to any such inhabitant in arrears until such arrears with interest and penalties, as may be charged and assessed in accordance with R.S.54:4-67, shall be fully paid.

(cf: P.L.1952, c.324, s.1)

6. R.S.40:62-107 is amended to read as follows:

40:62-107. The governing body of any municipality owning its water and sewer systems and operating the same as one utility may fix a combination water and sewer rental, and in case prompt payment of [said] that combined rent is not made according to the regulations adopted by [said] that governing body cause [said] water to be shut off from such houses, tenements, buildings, or other premises so supplied and not to turn the same on again until all arrears, with interest and penalties, as may be charged and assessed in accordance with R.S.54:4-67, shall be fully paid.

(cf: R.S.40:62-107)

7. R.S.40:62-107.6 is amended to read:

40:62-107.6. a. After any municipality shall have purchased a water distribution system pursuant to [sections 40:62-107.4] R.S.40:62-107.4 and [40:62-107.5 of this title] R.S.40:62-107.5, the governing body of the municipality shall be authorized to operate the water distribution system as nearly as may be as a part of its own system, and any schedule of rates, rents, charges, and penalties which the governing body shall thereafter fix shall be applicable to water users within both municipalities, and in the collection of all rates, rents, charges, and penalties, as may be charged and assessed in accordance with R.S.54:4-67, the municipality shall have all the rights and remedies that may apply to private water companies supplying water to municipalities of this State.

b. The governing body of a municipality that has purchased a water distribution system shall establish a rate structure that provides for uniform rates, rentals, or other service charges for water supply service and fire protection systems.

The governing body shall not impose standby fees or charges for any fire protection system to a residential customer served by a water service line of two inches or less in diameter.

Nothing in this section shall preclude the governing body of a municipality that has purchased a water distribution system from requiring separate dedicated service lines for fire protection. The governing body of a municipality that has purchased a water distribution system may require that fire service lines be metered. Nothing in this section shall alter the liability for maintenance and repair of service lines which exists on the effective date of P.L.2003, c.278.

(cf: P.L.2003, c.278, s.3)

8. R.S.40:62-141 is amended to read as follows:

40:62-141. The owner of any house, tenement, building, or lot shall be liable for the payment of the price or rent as fixed by the commission for the use of water by such owner or by the occupier, and for the installation, purchase price, repair, and testing of any water meter or water meters, water service, water services, connections, appliances or parts, and renewals thereof furnished or made by the commission, in, upon, or connecting with such house, tenement, building, or lot and the interest and penalties as may be charged and assessed in accordance with R.S.54:4-67.

The price or rent so fixed, and the other costs, expenses, interest and penalties, as may be charged and assessed in accordance with R.S.54:4-67, shall be a lien upon such house, tenement, building, or lot until the same shall be paid and satisfied, and shall be enforceable by an action at law in any [competent] court of competent jurisdiction.

The commission shall notify the officers or board having charge of the collection of taxes in each municipality in which the commission shall supply water to any of the inhabitants of such municipality, that the commission is supplying water to such inhabitants, and requesting [said] those officials or board to notify all persons applying for a certificate showing municipal or other liens against property in such municipality, that the applicant must apply to the commission to ascertain the amount of water rents or other charges due to the commission, which are by law made a lien upon the premises covered by the certificate.

The commission may require payment in advance for the use or rent of water furnished by it and for any work to be done or materials to be furnished.

(cf: R.S.40:62-141)

9. R.S.40:62-142 is amended to read as follows:

40:62-142. In case prompt payment of any water rent or rents, or for work done or materials furnished, is not made when due, the water may be shut off from such real estate, and shall not be again supplied thereto until the arrears with interest and penalties, as may be charged and assessed in accordance with R.S.54:4-67, shall be fully paid.

(cf: R.S.40:62-142)

10. N.J.S.40A:26A-3 is amended to read as follows:

40A:26A-3. As used in [this act] N.J.S.40A:26A-1 et seq.:

"Bonds" means bond anticipation notes or bonds issued in accordance with the "Local Bond Law," N.J.S.40A:2-1 et seq.

"Cost" as applied to sewerage facilities or extensions or additions thereto, means the cost of acquisition or the construction including improvement, reconstruction, extension, or enlargement, the cost of all lands, property, rights, and easements acquired. The cost of demolition or removal of any buildings or structures thereon, financing charges, interest on bonds issued to finance sewerage facilities prior to and during construction, the cost of plans and specifications, surveys or estimates of costs and revenues, the cost of engineering, legal services, and any other expenses necessary or incident to determining the feasibility of construction, administrative, and other expenses as may be necessary or incident to the construction or acquisition of sewerage facilities and the financing thereof.

"Local unit" means a county or municipality.

"Prevailing municipal bond yield" means the average estimated yield that would be offered on 20-year general obligation bonds with a composite rating of approximately "A" as reflected by the Bond Buyer 20-Bond Municipal Bond Index during the first week of the last month of the calendar year immediately preceding the calendar year in which the payment was due; provided however, that, if the governing body of the local unit or each participating local unit determines that the average estimated yield decreases by more than one percentage point from the yield previously determined, the governing body of the local unit or each participating local unit shall redetermine the prevailing municipal bond yield to be that average estimated yield for subsequent calendar quarters of the calendar year in which payments become due.

"Sewerage facilities" means the plants, structures, or other real and personal property acquired, constructed, or operated, or to be financed, acquired, constructed, or operated, or any parts thereof, used for the storage, collection, reduction, reclamation, disposal, separation, or other treatment of wastewater or sewage sludge or for the final disposal of residues resulting from the treatment of wastewater, including, but not limited to, pumping and ventilating stations, treatment plants and works, connections, outfall servers, interceptors, trunk lines, and other appurtenances necessary for their use or operation.

(cf: N.J.S.40A:26A-3)

11. N.J.S.40A:26A-12 is amended to read as follows:

40A:26A-12. Rates, rentals, connection fees, or other charges levied in accordance with N.J.S.40A:26A-10 and 40A:26A-11, shall be a first lien or charge against the property benefited therefrom. If any part of the amount due and payable in rates, rentals, connection fees, or other charges remain unpaid for 30 days following the date for the payment thereof, interest upon the amount unpaid shall accrue and be due at [a] the rate [of] prescribed for interest on payments required to be [determined] made in accordance with N.J.S.40A:26A-17. The governing body or bodies of the local unit or units may authorize payment of delinquent assessments on an installment basis in accordance with R.S.54:5-19. Liens levied in accordance with this section shall be enforceable in the manner provided for real property tax liens in chapter 5 of Title 54 of the Revised Statutes.

Nothing in this section shall be construed to limit the right of a local unit or local units to discontinue service of any property for the failure to pay any amount owing within 30 days after the date the amount is due and payable, if written notice of the proposed discontinuance of service and of the reasons therefor has been given, within at least 10 days prior to the date of discontinuance, to the owner of record of the property. In the event that notice is provided by mail, the notice requirements shall be satisfied if the mailing is made to the last known address of the owner of record and is postmarked at least 10 days prior to the date of discontinuance.

(cf: N.J.S.40A:26A-12)

12. N.J.S.40A:26A-17 is amended to read as follows:

40A:26A-17. The chief fiscal officer of another government having entered into a contract pursuant to [this act] N.J.S.40A:26A-1 et seq., shall cause to be paid to the local unit the amounts of money at the times stipulated in the contract and certified by the local unit. The power and obligation to make payments in accordance with the terms of the contract shall be unlimited, and the sums necessary therefor shall be included in the annual budget of the other government, which shall be irrevocably and unconditionally obligated to levy ad valorem taxes on all taxable property therein, without limits as to the rate or amount, to the extent necessary to make payments in full as due. [Any] If any part of a payment [that] remains unpaid for 30 days following the date payment is due, [shall be assessed at] interest [charge] upon the amount unpaid shall accrue and be due at a rate [of interest at least] equal to the [monthly index for the immediately preceding month for 20 year tax exempt bond yields as compiled by the Bond Buyer or any similar index agreed to by the parties] prevailing municipal bond yield assessed for each month or fraction thereof, compounded annually at the end of each year, from the date payment was originally due until the date payment is made.

(cf: N.J.S.40A:26A-17)

13. N.J.S.40A:31-3 is amended to read as follows:

40A:31-3. As used in this act:

a. "Bonds" means bond anticipation notes or bonds issued in accordance with the "Local Bond Law," N.J.S.40A:2-1 et seq.

b. "Cost" as applied to water supply facilities or extensions or additions thereto, means the cost of acquisition or the construction, including improvement, reconstruction, extension, or enlargement, the cost of all labor materials, machinery, and equipment, the cost of all lands, property, rights, and easements acquired, the cost of demolition or removal of any buildings or structures thereon, financing charges, interest on bonds issued to finance water supply facilities prior to and during construction, the cost of plans and specifications, surveys or estimates of costs and revenues, the cost of engineering, legal services, and any other expenses necessary or incident to determining the feasibility of construction, administrative expenses and such other expenses as may be necessary or incident to the construction or acquisition of water supply facilities, and the financing thereof.

c. "Local unit" means a county or municipality.

d. "Prevailing municipal bond yield" means the average estimated yield that would be offered on 20-year general obligation bonds with a composite rating of approximately "A" as reflected by the Bond Buyer 20-Bond Municipal Bond Index during the first week of the last month of the calendar year immediately preceding the calendar year in which the payment was due; provided however, that, if the governing body of the local unit or each participating local unit determines that the average estimated yield decreases by more than one percentage point from the yield previously determined, the governing body of the local unit or each participating local unit shall redetermine the prevailing municipal bond yield to be that average estimated yield for subsequent calendar quarters of the calendar year in which payments become due.

[d] e. "Water supply facilities" means the plants, structures, or other real and personal property acquired, constructed or operated, or to be financed, acquired, constructed or operated, or any parts thereof, including reservoirs, basins, dams, canals, aqueducts, standpipes, conduits, pipelines, mains, pumping stations, water distribution systems, compensating reservoirs, waterworks, or sources of water supply, well, purification or filtration plants, or other plants or works, connections, rights of flowage or diversion, and other plants, structures, boats, conveyances and other real and personal property, or rights therein, and appurtenances necessary or useful for the accumulation, supply, or distribution of water.

(cf: N.J.S.40A:31-3)

14. N.J.S.40A:31-12 is amended to read as follows:

40A:31-12. Rates, rentals, connection fees, or other charges levied in accordance with N.J.S.40A:31-10 and 40A:31-11, shall be a first lien or charge against the property benefited therefrom. If any part of the amount due and payable in rates, rentals, connection fees, or other charges remains unpaid for 30 days following the date for the payment thereof, interest upon the amount unpaid shall accrue and be due at [a] the rate [of] prescribed for interest on payments required to be [determined] made in accordance with N.J.S.40A:31-17. The governing body or bodies of the local unit or units may authorize payment of delinquent assessments on an installment basis in accordance with R.S.54:5-19. Liens levied in accordance with this section shall be enforceable in the manner provided for real property tax liens in chapter 5 of Title 54 of the Revised Statutes.

Nothing in this section shall be construed to limit the right of a local unit or local units to discontinue service to any property for the failure to pay any amount owing within 30 days after the date the amount is due and payable, if written notice of the proposed discontinuance of service and of the reasons therefor has been given, within at least 10 days prior to the date of discontinuance, to the owner of record of the property. In the event that notice is provided by mail, the notice requirements shall be satisfied if the mailing is made to the last known address of the owner of record and is postmarked at least 10 days prior to the date of discontinuance.

(cf: N.J.S.40A:31-12)

15. N.J.S.40A:31-17 is amended to read as follows:

40A:31-17. The chief fiscal officer of another government having entered into a contract pursuant to [this act] N.J.S.40A:31-1 et seq., shall cause to be paid to the local unit such amounts of money at such times as shall be stipulated in the contract and certified by the local unit. The power and obligation to make payments in accordance with the terms of the contract shall be unlimited, and the sums necessary therefor shall be included in the annual budget of the other government, which shall be irrevocably and unconditionally obligated to levy ad valorem taxes on all taxable property therein, without limits as to rate or amount, to the extent necessary to make payments in full as due. [Any] If any part of a payment that remains unpaid for 30 days following the date payment is due, [shall be assessed an] interest [charge] upon the amount unpaid shall accrue and be due at a rate [of interest at least] equal to the [monthly index for the immediately preceding month for 20 year tax exempt bond yields as compiled by the Bond Buyer or any similar index agreed to by the parties] prevailing municipal bond yield assessed for each month or fraction thereof, compounded annually at the end of each year, from the date payment was originally due until the date payment is made.

(cf: N.J.S.40A:31-17)

16. N.J.S.40A:31-20 is amended to read as follows:

40A:31-20. A private water company or industry which shall have entered into a contract with a local unit or local units pursuant to [this act] N.J.S.40A:31-1 et seq., shall pay at such time as may be provided in the contract, the sum of money certified to it on or before the date provided for payment in the contract. Any sum of money so certified by the local unit or units shall be a lien in favor of the local unit or units on and against the property of the private water company or industry. If the sum of money or any part thereof is not paid on or before the contract payment date, [the unpaid amount shall bear] interest shall accrue and be due on the unpaid amount at the rate [to be determined] prescribed for interest on payments required to be made in accordance with [the provisions of] N.J.S.40A:31-17, until payment is complete and, the local unit or local units shall make and record, in the same manner as conveyances of interest in real property are recorded, a certificate setting forth the facts and giving notice of the existence and amount of the lien remaining unsatisfied. The lien shall have priority over all other liens theretofore or thereafter attaching, except those for federal, State, and local taxes.

(cf: N.J.S.40A:31-20)

17. R.S.54:4-67 is amended to read as follows:

54:4-67. a. The governing body of each municipality may by resolution fix the rate of discount to be allowed for the payment of taxes or assessments previous to the date on which they would become delinquent. The rate so fixed shall not exceed 6% per annum, shall be allowed only in case of payment on or before the thirtieth day previous to the date on which the taxes or assessments would become delinquent. No such discount shall apply to the purchaser of a total property tax levy pursuant to section 16 of P.L.1997, c.99 (C.54:5-113.5). The governing body may also fix the rate of interest to be charged for the nonpayment of taxes, assessments, or other municipal liens or charges, unless otherwise provided by law, on or before the date when they would become delinquent, and [may] shall provide that no interest shall be charged if payment of any installment is made within the [tenth] thirtieth calendar day following the date upon which the same became payable. The rate so fixed shall not exceed [8% per annum on the first $1,500.00 of the delinquency and 18% per annum on any amount in excess of $1,500.00, to be calculated] three percentage points above the prime rate, and shall be assessed for each month or fraction thereof, compounded annually at the end of each year, from the date the tax was payable until the date that actual payment to the tax collector is made.

b. In any year when the governing body changes the rate of interest to be charged for delinquent taxes, assessments, or other municipal charges, or to be charged for the end of the year penalty, the governing body, after adoption of a resolution changing the rate of interest, shall provide a notice to all taxpayers, prior to the date taxes are next due or with the tax bill, stating the new rate or rates to be charged and the date that the new rate or rates take effect. The notice may be separate from the tax bill. No change in the rate of interest or the end of year penalty shall take effect until the required notice has been provided in accordance with this subsection.

c. In municipalities that have sold their property tax levy pursuant to section 16 of P.L.1997, c.99 (C.54:5-113.5), the rate of interest to be charged for the nonpayment of taxes, assessments, or other municipal liens or charges shall be the same interest or delinquency rate or rates otherwise charged by the municipality, to be calculated from the date the tax was payable until the date of actual payment to the tax collector. The purchaser of the total property tax levy shall be paid only those amounts attributable to properties included in the total property tax levy purchase and actually collected by the tax collector and which amounts shall not include any delinquent interest collected by the municipal tax collector prior to the time that the total property tax levy purchaser makes the levy payment to the municipality.

"Delinquency" means the sum of all taxes and municipal charges due on a given parcel of property covering any number of quarters or years. The property shall remain delinquent, as defined herein, until such time as all unpaid taxes, including subsequent taxes and liens, together with interest thereon shall have been fully paid and satisfied. The delinquency shall remain notwithstanding the issuance of a certificate of sale pursuant to R.S.54:5-32 and R.S.54:5-46, the payment of delinquent tax by the purchaser of the total property tax levy pursuant to section 16 of P.L.1997, c.99 (C.54:5-113.5) and for the purposes of satisfying the requirements for filing any tax appeal with the county board of taxation or the State tax court. The governing body may also fix a penalty to be charged to a taxpayer with a delinquency in excess of $10,000 who fails to pay that delinquency as billed, prior to the end of the fiscal year. If any fiscal year delinquency in excess of $10,000 is paid by the holder of an outstanding tax sale certificate or a total property tax levy purchaser, the holder or purchaser, as appropriate, shall be entitled to receive the amount of the penalty as part of the amount required to redeem such certificate of sale providing the payment is made by the tax lien holder or tax levy purchaser prior to the end of the fiscal year. If the holder of the outstanding tax sale certificate or the levy purchaser, as appropriate, does not make the payment in full prior to the end of the fiscal year, then the holder or purchaser shall be entitled to a pro rata share of the delinquency penalty upon redemption, and the balance of the penalty shall inure to the benefit of the municipality. The penalty so fixed shall not exceed 6% of the amount of the delinquency with respect to each most recent fiscal year only.

"Prime rate" means the average predominant prime rate, as determined by the Board of Governors of the Federal Reserve System, quoted by commercial banks to large businesses as of December 1 of the calendar year immediately preceding the calendar year in which the tax was payable; provided however, that, if the governing body determines that the prime rate quoted by commercial banks to large businesses decreases by more than one percentage point from the rate previously determined, the governing body shall redetermine the prime rate to be that quoted prime rate for subsequent calendar quarters of the calendar year in which payments are required to be made.

(cf: P.L.1997, c.99, s.4)

18. Section 3 of P.L.1981, c.293 (C.58:1B-3) is amended to read as follows:

3. As used in this act:

a. "Authority" means the New Jersey Water Supply Authority created by [this act] P.L.1981, c.293 (C.58:1B-1 et seq.);

b. "Bonds" means bonds, notes, or other obligations issued or authorized pursuant to [this act] P.L.1981, c.293 (C.58:1B-1 et seq.);

c. "Compensating reservoir" means the structures, facilities, and appurtenances for the impounding, transportation, and release of water for the replenishment in periods of drought or at other necessary times of all or a part of waters in or bordering the State diverted into a project;

d. "Cost" as applied to a project means the cost of acquisition and construction thereof, the cost of acquisition of lands, rights-of-way, property rights, easements, and interests required by the authority for acquisition and construction, the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which buildings or structures may be moved, the cost of acquiring or constructing and equipping an office of the authority, the cost of machinery, furnishings, and equipment, financing expenses, reserves, interest prior to and during construction and for no more than [6] six months after completion of construction, engineering, expenses of research and development with respect to any project, legal expenses, plans, specifications, surveys, estimates of cost and revenues, working capital, other expenses necessary or incident to determining the feasibility or practicability of acquiring or constructing a project, administrative expense, and such other expense as may be necessary or incident to the acquisition or construction of the project;

e. "Construct" and "construction" means and includes acts of construction, reconstruction, replacement, extension, improvement, and betterment of a project;

f. "Department" means the Department of Environmental Protection;

g. "Governmental agency" means any municipality, county, or any agency thereof, the State Government and any instrumentality or subdivision thereof;

h. "Prevailing municipal bond yield" means the average estimated yield that would be offered on 20-year general obligation bonds with a composite rating of approximately "A" as reflected by the Bond Buyer 20-Bond Municipal Bond Index during the first week of the last month of the calendar year immediately preceding the calendar year in which the rent, fee, or charge was due; provided however, that, if the authority determines that the average estimated yield decreases by more than one percentage point from the yield previously determined, the authority shall redetermine the prevailing municipal bond yield to be that average estimated yield for subsequent calendar quarters of the calendar year in which rents, fees, or charges become due.

[h] i. "Project" means a water system or any part thereof;

[i] j. "Real property" means lands both within or without the State, and improvements thereof or thereon, or any rights or interests therein;

[j] k. "Revenue" means all rents, fees, and charges for water sold from, or for the use and services of any project of the authority and payments in respect of any loans or advances made to governmental agencies pursuant to [this act] P.L.1981, c.293 (C.58:1B-1 et seq.);

[k] l. "Service charges" means water service charges established or collected by the authority pursuant to [this act] P.L.1981, c.293 (C.58:1B-1 et seq.);

[l] m. "Water system" means the plants, structures, and other real and personal property financed, acquired, constructed, or operated or to be financed, acquired, constructed, or operated by the authority under [this act] P.L.1981, c.293 (C.58:1B-1 et seq.) or additions and improvements thereto, including reservoirs, basins, dams, canals, aqueducts, standpipes, conduits, pipelines, mains, pumping stations, water transmission systems, compensating reservoirs, waterworks or sources of water supply, wells, purification or filtration plants or other plants, equipment and works, connections, rights of flowage or diversion, and other plants, structures, boats, conveyances, and other real and personal property and rights therein, and appurtenances necessary or useful and convenient for the accumulation, supply, treatment, or transmission of water.

(cf: P.L.1981, c.293, s.3)

19. (New section) The rents, fees, and charges required to be paid to the authority in accordance with P.L.1981, c.293 (C.58:1B-1 et seq.) for water sold from, or for the use of services of, a water system project shall be due and required to be paid within 30 days of the billing date. If any rent, fee, or charge required to be paid to the authority in accordance with P.L.1981, c.293 (C.58:1B-1 et seq.) for water sold from, or for the use of services of, a water system project is not paid within 30 days of the billing date, interest shall accrue and be due on the unpaid amount at a rate equal to the prevailing municipal bond yield assessed for each month or fraction thereof, compounded annually at the end of each year, from the date the bill is originally payable until the actual date of payment.

20. This act shall take effect immediately and apply to all charges, rates, rents, fees, and payments and all municipal taxes, assessments, and other municipal liens and charges that become due or otherwise are first required to be paid to a sewerage authority, municipal authority, governing body or bodies of a local unit or units, municipality, or authority operating, for budgeting purposes, on a State fiscal year basis on or after July 1 next following the date of enactment and all charges, rates, rents, fees, and payments and all municipal taxes, assessments, and other municipal liens and charges that become due or otherwise are first required to be paid to a sewerage authority, municipal authority, governing body or bodies of a local unit or units, municipality, or authority operating, for budgeting purposes, on a calendar year basis on or after January 1 next following the date of enactment.

STATEMENT

The bill modifies interest rates and provides for the deferral of interest that is permitted to accrue on unpaid water and sewer service bills issued by certain public providers of water and sewer services as well as delinquent municipal taxes, assessments, and other municipal liens and charges.

The bill amends the "sewerage authorities law," P.L.1946, c.138 (C.40:14A-1 et seq.) and the "municipal and county utilities authorities law," P.L.1957, c.183 (C.40:14B-1 et seq.) to provide that the interest rate permitted to accrue on unpaid service charges due and required to be paid to a sewerage authority or a municipal authority will be equal to the prevailing municipal bond yield, and will be assessed for each month or fraction thereof, compounded annually at the end of each year, from the date the service charge was due until the date the charge is paid. The current interest rate on unpaid charges is fixed by statute at a rate of 1 1/2 percent per month, and has remained unchanged since January 1982.

The bill amends the "Municipal and County Sewerage Act," P.L.1991, c.53 (C.40A:26A-1 et seq.) and the "County and Municipal Water Supply Act," P.L.1989, c.109 (C.40A:31-1 et seq.) to provide that the interest rate permitted to accrue on unpaid rates, rentals, connection fees, or other charges due and required to be paid to a local unit or units operating a county or municipal sewerage facility or a county or municipal water supply will be equal to the prevailing municipal bond yield, and will be assessed for each month or fraction thereof, compounded annually at the end of each year, from the date the payment was due until the date the payment is made. The current interest rate on unpaid rates, rentals, connection fees, or other charges is set by statute at a rate that is at least equal to the monthly index for the immediately preceding month for 20-year tax exempt bond yields as compiled by the "Bond Buyer" or any similar index, and has remained unchanged since the laws were enacted in 1992 and 1989, respectively.

The bill amends a section of the laws concerning real property taxation, R.S.54:4-67, to provide that the interest rate permitted to accrue on delinquent municipal taxes, assessments, and other municipal liens or charges due to the governing body of a municipality will not exceed three percentage points above the prime rate, and will be assessed for each month or fraction thereof, compounded annually at the end of each year, from the date the tax was payable until the date payment is made. The current interest rate on delinquent municipal taxes, assessments, and other municipal liens or charges is fixed by statute at a rate that cannot exceed 8 percent per annum on the first $1,500 of the delinquency and that cannot exceed 18 percent per annum on any amount in excess of $1,500, and has remained unchanged since 1979.

The bill amends various sections of the laws concerning municipally owned sewer and water utilities, including section 1 of P.L.1952, c.324 (C.40:62-83.1), R.S.40:62-107, R.S.40:62-107.6, R.S.40:62-141, and R.S.40:62-142, to stipulate that interest and penalties due on rents, rates, and other service charges required to be paid to municipalities or a water or sewerage commission of a municipality will be charged and assessed as permitted for delinquent municipal taxes, assessments, and other municipal liens or charges in accordance with R.S.54:4-67. The statutes governing municipally owned sewer and water utilities do not specify the interest rate, or the penalties, permitted to accrue and be charged for unpaid on rents, rates, and other service charges.

The bill supplements the "New Jersey Water Supply Authority Act," P.L.1981, c.293 (C.58:1B-1 et seq.) to establish that the interest rate permitted to accrue on unpaid rents, fees, and charges required to be paid to the authority for water sold from, or for the use of services of, a water system project will be equal to the prevailing municipal bond yield, and will be assessed for each month or fraction thereof, compounded annually at the end of each year, from the date the bill is originally payable until the actual date of payment. Currently, interest accrues on unpaid rents, fees, and charges required to be paid to the authority at two separate rates set by regulations: the authority charges interest on unpaid payments related to the sale of water from the Raritan Basin System at a rate tied to the interest rate accruing on the authority's short-term deposits and charges interest on unpaid payments related to the sale of water from the Manasquan Reservoir Water Supply System at a rate that cannot exceed 18 percent per annum.

The bill defines "prevailing municipal bond yield" as the average estimated yield that would be offered on 20-year general obligation bonds with a composite rating of approximately "A" as reflected by the "Bond Buyer 20-Bond Municipal Bond Index" during the first week of the last month of the calendar year immediately preceding the calendar year in which the rates, rents, or sewer and water services charges were due or otherwise required to be paid. During the first week of December 2012, the average estimated yield offered on 20-year general obligation bonds with a composite rating of approximately "A" was 3.27 percent; during the first week of December 2013 that yield was 4.70 percent.

The bill defines "prime rate" as the average predominant prime rate, as determined by the Board of Governors of the Federal Reserve System, quoted by commercial banks to large businesses as of December 1 of the calendar year immediately preceding the calendar year in which the municipal tax was payable. During the first week of December 2012, the average predominant prime rate quoted by commercial banks to large businesses was 3.25 percent; during the first week of December 2013 that rate was 3.25 percent.

In addition, the bill amends the "sewerage authorities law," P.L.1946, c.138 (C.40:14A-1 et seq.), the "municipal and county utilities authorities law," P.L.1957, c.183 (C.40:14B-1 et seq.), and a section of the laws concerning real property taxation, R.S.54:4-67, and supplements the "New Jersey Water Supply Authority Act," P.L.1981, c.293 (C.58:1B-1 et seq.), to specify the period of time that must elapse before interest accrues on unpaid utility bills issued by certain public providers of water and sewer services and delinquent municipal taxes, assessments, and other municipal liens and charges. The bill provides that at least 30 days must elapse following the date the payment or charge or the municipal taxes, assessments, and other municipal liens and charges is originally due before interest on the unpaid balance is permitted to accrue.

The bill takes effect immediately and applies to all charges, rates, rents, fees, and payments and all municipal taxes, assessments, and other municipal liens and charges that become due or otherwise are first required to be paid on or after July 1 or on or after January 1 next following the date of enactment, dependent on whether the public provider of water or sewer services or the municipality operates on a State fiscal year or calendar year basis for budgetary purposes.

The purpose of this bill is to provide a more standard, consistent approach to setting and assessing interest rates on unpaid water and sewer service bills issued by certain public providers of water and sewer services as well as delinquent municipal taxes, assessments, and other municipal liens and charges that allows interest rates to rise and fall based on prevailing rates in the current marketplace.