ASSEMBLY TELECOMMUNICATIONS AND UTILITIES COMMITTEE

STATEMENT TO

ASSEMBLY, No. 5980

STATE OF NEW JERSEY

DATED:  JANUARY 5, 2026

      The Assembly Telecommunications and Utilities Committee reports favorably Assembly Bill No. 5980.

      This bill, known as the “Citizens Fund Act,” establishes a trust fund for the conveyance of certain assets for the benefit of the public benefit plans.  Under the bill, the Citizens Fund (fund) is established as an instrumentality of the State to exercise public and essential governmental functions.  The purpose of the fund is to lessen the burdens of government by providing a fund through which a public entity may contribute, transfer, or sell its revenue-producing assets to a segregated or commingled account and share the risks and benefits of the performance of those assets to maximize the performance and long-term value of those assets and to benefit the public entity.

      The fund is required to retain, appoint, or procure a fund manager to provide overall management of the fund and may engage an administrator and other professionals in overseeing the activities of the fund.  The assets of the fund are to be maintained as a separate account segregated from all other funds of the State and the non-State public employers participating in public benefit plans.  The fund is to be legally independent and separate, regardless of its treatment for tax, accounting, reporting, securities law, or other purposes.

      The bill provides that no person is to use or authorize the use of the assets in the fund, or the investment earnings, for any purpose other than for the maximization of the value of the assets in the fund, including meeting or exceeding the level of service required to operate the asset pursuant to State and federal law and regulations for the safety of the public and the environment, for the benefit of members and retirees in the public benefit plans, and for defraying the reasonable costs of administering the fund.

      The bill further provides that the Citizens Fund is to have a fund board to be appointed by the Governor and comprised of five members with certain responsibilities, duties, and privileges outlined under the bill.  In addition, the bill establishes a fund advisory board to the fund board.  The fund advisory board is to represent each enterprise advisory board, as established pursuant to the bill for each asset or group of assets conveyed to the fund by a public entity, in order to provide the fund board with advice and information relevant to the local systems of a conveyed asset.  Under the bill, an enterprise advisory board is to be comprised of each municipality or county that is an associated public entity.  The bill prescribes certain other membership requirements, duties, and privileges for an enterprise advisory board.

      The bill permits a public entity to convey to the fund an asset held by the public entity.  The conveyance is to be governed by a transfer agreement, which is to be proposed by the fund board and approved by the public entity.  Only that portion of the conveyed asset that is net of financing costs and amounts deposited into the investment account or other distributions made to, or on behalf of the public entity will be evidenced by certificates of trust and credited to the holding account of the Common Pension Fund as provided by this bill.  Asset contributions on behalf of the public entity and the fund’s asset distributions are to be deposited in the investment account of the Common Pension Fund.

      The public benefit plans are not to be required or permitted to pay any expenses incurred in connection with the conveyance of an asset pursuant to the bill.

      The bill provides that an asset proposed for conveyance to the fund is to be valued by an independent valuation agent, as defined in the bill, and is to be revalued periodically.  The valuation agent is to issue a report representing its opinion as to the valuation of the asset in accordance with an asset conveyance.  An asset conveyance is not to be effectuated until after the report has been issued and both the fund board and the public entity accept the proposed value.  If either rejects the proposed value, the conveyance is not to be effectuated, and any written agreement for the conveyance of an asset will be void.

      The bill amends the “Water Infrastructure Protection Act” to allow a municipality with a water or wastewater asset under emergent conditions to include conveyance of the asset to the fund as an option under that law.