2023 New Jersey Revised Statutes › Title 54 - Taxation › Section 54:4-66.7 - Establishment of certain charitable, spillover funds by local unit.

54:4-66.7 Establishment of certain charitable, spillover funds by local unit.
2. a. A local unit may establish by ordinance, or resolution, as appropriate, one or more charitable funds for specific public purposes of that local unit. A charitable fund shall be held in one or more bank accounts in the name of the local unit, and shall be kept separate from the other accounts of the local unit. A charitable fund shall not be administered jointly by more than one local unit. All such charitable funds, spillover funds, and the moneys deposited into such funds shall be governed by the "Governmental Unit Deposit Protection Act," P.L.1970, c.236 (C.17:9-41 et seq.) to the same extent as the establishing local unit. All moneys deposited into a charitable fund shall be expended exclusively for public purposes of the local unit that deposited such moneys in accordance with subsection d. of section 3 of P.L.2018, c.11 (C.54:4-66.8), and other applicable State law. These moneys shall be equivalent to tax revenues for the purposes of State aid formulae, local unit revenue calculations, local unit bonding capacity, and similar State or municipal computation, and shall be immediately available to the establishing local unit upon request to the fund administrator for the payment of budgeted and emergency mandatory expenses, to include debt service.
b. The ordinance or resolution establishing a charitable fund shall designate the official serving as the local unit's custodian of public funds to serve as the fund administrator. The fund administrator shall assume responsibility for the collection, administration, and distribution of donations made to the charitable fund, and shall continually track the total of all qualified donations with respect to a fiscal year. The director may promulgate regulations requiring additional or supplemental bonding for a custodian of public funds who serves as a fund administrator, except that the Commissioner of Education may promulgate such regulations as he deems necessary with respect to custodians of public funds for school districts.
c. A charitable fund shall have one or more specified public purposes. The specified public purposes shall be more limited than the general purposes of the local unit. The specified public purposes shall be described in documents and records made publicly available.
d. (1) The ordinance or resolution establishing a charitable fund shall establish an annual credit-eligible donation cap, establishing the maximum amount of credit-eligible moneys the fund may collect. The ordinance or resolution also shall limit the total amount of money a person or entity may donate through local charitable donations to a particular charitable fund or combination of charitable funds that may qualify for a local property tax credit. The ordinance or resolution establishing a charitable fund shall establish an initial annual credit-eligible donation cap, and shall set an initial annual limit on tax credit funding that shall be available as a result of local charitable donations to the particular charitable fund. The annual limit on the available local property tax credit funding shall equal 90 percent of the annual credit-eligible donation cap, or a different percentage as determined appropriate by the director. The ordinance or resolution establishing a charitable fund shall also limit the extent to which an eligible local charitable donation on behalf of a specific real property may count against the annual credit-eligible donation cap. Both the maximum amount of local property tax credit funding made available, and the annual credit-eligible donation cap, shall be established by the ordinance or resolution adopted to establish the charitable fund, but may be adjusted through subsequent ordinances or resolutions, as applicable, of the governing body of the local unit.
(2) The annual credit-eligible donation cap shall be established prior to the beginning of each fiscal year. However, with regard to any fiscal year that begins in calendar year 2018, the amount of local property tax credits that may be granted for the remainder of calendar year 2018 shall be established no later than the date on which each charitable fund begins to accept donations.
(3) The annual credit-eligible donation cap shall not be construed to limit all donations to the charitable fund. The annual credit-eligible donation cap shall only limit the amount of donations that are credit-eligible in relation to property tax payments.
(4) The annual credit-eligible donation cap for a given year shall be based upon the tax levy from the prior calendar year. The annual credit-eligible donation cap established prior to the start of the calendar year may not exceed 85 percent of the prior year budget, unless otherwise authorized by the director. Upon certification of a current-year budget tax levy, a local unit may amend a charitable fund's credit-eligible donation cap to reflect the estimate of the current year tax levy.
e. The ordinance or resolution establishing a charitable fund may establish a spillover fund, which shall hold local charitable donations contributed after the annual credit-eligible donation cap to a given fund has been reached, and local charitable donations in excess of the maximum local charitable donation amount that the local unit shall accept with respect to a specific real property and still be credit-eligible. Any spillover fund established hereunder shall be administered by the fund administrator of the charitable fund. The ordinance or resolution establishing a spillover fund shall designate approved uses for spillover funds for which uses funds shall be remitted by the spillover fund upon appropriation by the local unit's governing body. Approved uses shall include, but are not limited to the payment of debt service, funding of capital reserves and the reserve for uncollected taxes, emergency expenses, and the local unit's operating expenses. Moneys in the spillover fund shall be utilized by the local unit solely for the budget year corresponding to the year in which the taxpayer will receive the credit.
L.2018, c.11, s.2.