S4623

An Act establishing the “Unanticipated Revenue Fund,” supplementing Title 52 of the Revised Statutes, amending P.L.2023, c.159, and repealing P.L.1990, c.44.

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

1. (New section) a. There is created within the General Fund a special fund to be known as the “Unanticipated Revenue Fund.” The State Treasurer shall credit to the Unanticipated Revenue Fund, annually on or before December 30, all General Fund revenues that exceed the amount of General Fund anticipated revenue certified by the Governor upon approval of the annual appropriations act for the fiscal year immediately preceding the fiscal year, as determined pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. Moneys credited to the Unanticipated Revenue Fund may be invested in the same manner as assets of the General Fund, and any investment earnings on the Unanticipated Revenue Fund shall accrue to the Unanticipated Revenue Fund and shall be available subject to the same terms and conditions as other balances in the fund.

c. On or before January 15 of each year, the State Treasurer shall provide a report of the status of the Unanticipated Revenue Fund to the Governor and to the Legislature through the Joint Budget Oversight Committee, or its successor.

2. (New section) a. As used in this section, “anticipated revenue” means the amount of revenue estimated to be realized in a fiscal year as General Fund resources to support appropriations made, including taxes, license fees, other miscellaneous departmental revenue, and revenue transfers to the General Fund from other funds in the State Treasury, and excluding federal funds and any fund balances, whether designated, undesignated, or reserved.

b. The amount to be annually credited to the Unanticipated Revenue Fund shall be determined by the State Treasurer in the following manner:

(1) The State Treasurer shall identify the amount of General Fund anticipated revenue certified by the Governor upon approval of the annual appropriations act for the fiscal year immediately preceding the fiscal year in which a credit to the Unanticipated Revenue Fund is required.

(2) The State Treasurer shall determine, from the annual financial report of the General Fund for the fiscal year immediately preceding the fiscal year in which a credit to the Unanticipated Revenue Fund is required, the amount of revenue actually deposited in the General Fund in that fiscal year. If in any preceding fiscal year for which a determination under this subsection is to be made, there is a law enacted which will increase the revenue to the General Fund, the yield from that increase for that preceding fiscal year in which the increase is in effect shall be disregarded in determining the amount to be credited to the Unanticipated Revenue Fund.

(3) The amount of the credit to the Unanticipated Revenue Fund shall be an amount equivalent to the excess, if there be any, of the amount determined in paragraph (2) of this subsection over the amount determined in paragraph (1) of this subsection. If actual revenue collections pursuant to the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., for the fiscal year immediately preceding the fiscal year in which a credit to the Unanticipated Revenue Fund is required are less than the amount of revenue collections pursuant to that act as certified by the Governor upon approval of the annual appropriations act for that fiscal year, the amount of the credit to the Unanticipated Revenue Fund otherwise calculated pursuant to this section shall be reduced by the difference between the amount so certified and the actual collections.

c. The Governor’s annual budget message to the Legislature shall include an estimate of the amount to be credited to the Unanticipated Revenue Fund, as of July 1 of the fiscal year for which the Governor is making budget recommendations.

3. (New section) Monies in the Unanticipated Revenue Fund shall be dedicated exclusively for the provision of State one-time refundable gross income tax credits or tax rebates for State residents, subject to appropriation by the Legislature, in a manner determined and prescribed by the Legislature.

4. Section 1 of P.L.2023, c.159 (C.52:27B-46.1) is amended to read as follows:

1. a. Within 30 days following the publication of the New Jersey Annual Comprehensive Financial Report pursuant to section 37 of P.L.1944, c.112 (C.52:27B-46), the Office of the State Auditor shall annually publish a user-friendly, plain-language report that summarizes and analyzes the contents of the New Jersey Annual Comprehensive Financial Report. At a minimum, the report shall include:

(1) a summary of the State's financial condition compared to other states in the Mid-Atlantic and Northeastern regions of the United States, which summary shall include statistical comparisons based on the population and gross domestic product of each state;

(2) a summary of the State's total long-term financial liabilities, including, but not limited to, net pension obligations, post-employment benefits other than pensions including, but not limited to, health, dental, and vision care, and payments for principal and interest due on general obligation bonds and appropriations-backed contract bonds issued by independent authorities of the State, including all items comprising long-term liability as recorded in a schedule of long-term debt changes, bonded and non-bonded, in the State's annual comprehensive financial report prepared pursuant to section 37 of P.L.1944, c.112 (C.52:27B-46), which analysis shall compare the State's long-term liabilities to those of other states in the Mid-Atlantic and Northeastern regions of the United States;

(3) a summary of the State's revenue collections for the General Fund, Property Tax Relief Fund, Casino Revenue Fund, and all other budgeted State revenues, which summary shall compare the State's actual revenue collections during the five preceding fiscal years to the anticipated revenue collections for each year;

(4) a summary of the State's anticipated revenue collections for the General Fund, Property Tax Relief Fund, Casino Revenue Fund, and all other budgeted State revenues and the State's appropriations to fund State aid for education, State municipal aid, State pension liabilities, employer contributions for State healthcare benefits, the State Medicaid program, State support for hospitals, the Annual Transportation Capital Program, and programs of direct taxpayer property tax relief, which summary shall compare the State's anticipated revenue collections during the five preceding fiscal years to the State's appropriations for each of those fiscal years; and

(5) a summary of the State's unrestricted fund balance, whether designated, undesignated, or reserved, including the amounts deposited [pursuant to the "Surplus Revenue Fund,"] into the Unanticipated Revenue Fund, established pursuant to [P.L.1990, c.44 (C.52:9H-14 et seq.)] P.L. ¸ c. (C. ) (pending before the Legislature as this bill), which summary shall compare the State's unrestricted cash reserves to those of other states in the Mid-Atlantic and Northeastern regions of the United States.

b. The report required pursuant to this section may be prepared by an independent auditor selected by the Office of the State Auditor in accordance with applicable laws regarding selection of auditing services.

c. The report prepared pursuant to this section shall be transmitted to the Governor and the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1). The Legislature, Department of the Treasury, and Office of the State Auditor shall make the report publicly accessible on their Internet websites within five days of transmittal.

The first report required by this section shall be published within 30 days following the publication of the New Jersey Annual Comprehensive Financial Report that occurs at least 12 months after the effective date of P.L.2023, c.159 (C.52:27B-46.1).

d. After submission of the Governor's budget message to the Legislature pursuant to section 11 of P.L.1944, c.112 (C.52:27B-20) the State Auditor shall, on or before May 31 annually, appear before the Legislature's budget committees to present the information contained within the most recent report required pursuant to this section.

(cf: P.L.2023, c.159, s.1)

5. P.L.1990, c.44 (C.52:9H-14 through C.52:9H-23[SB1] ) is repealed.

6. This act shall take effect immediately and shall apply to State fiscal years beginning on or after the date of enactment.

STATEMENT

This bill establishes a special fund, known as the Unanticipated Revenue Fund, into which certain excess, unanticipated State revenues are to be deposited for the sole purpose of providing gross income tax credits to State residents.

The bill establishes the “Unanticipated Revenue Fund” as a special fund within the General Fund. Under the bill, the fund is required to annually be credited with all General Fund revenues that are collected in excess of the amounts anticipated in the Governor’s revenue certification. Specifically, the amount to be credited to the fund will be determined by the State Treasurer, on or before December 30 of each year, based on the difference, if any, between the anticipated revenue certified by the Governor for the annual appropriations act of the prior fiscal year and the amount of such revenues actually deposited in the General Fund in the prior fiscal year.

For the purposes of this bill, “anticipated revenue” means the amount of revenue estimated to be realized in a fiscal year as General Fund resources to support appropriations made, including taxes, license fees, other miscellaneous departmental revenue, and revenue transfers to the General Fund from other funds in the State Treasury, and excluding federal funds and any fund balances, whether designated, undesignated or reserved. Accordingly, the requirements of this bill do not apply to excess revenues collected under the gross income tax, which are deposited into the Property Tax Relief Fund, and dedicated exclusively for the purposes of property tax relief.

The bill requires that all monies credited to the Unanticipated Revenue Fund be appropriated for the provision of one-time refundable gross income tax credits or tax rebates to residents of New Jersey, subject to appropriation by the Legislature, in a manner determined by the Legislature.

Under current law, the State has a restricted reserve fund known as the “Surplus Revenue Fund.” The amount annually credited to this fund is equal to 50 percent of excess revenue realized by the State in a given fiscal year. The excess revenue is determined by the State Treasurer by calculating the difference, if any, between the anticipated revenue certified by the Governor upon approval of the annual appropriations act and the amount of revenue actually deposited in the General Fund, as described in the annual financial report, for a given fiscal year. Monies in the Surplus Revenue Fund may be used to: offset State revenue declines; meet the costs of an emergency identified by the Governor; manage general obligation bonds; administer capital projects; and reduce or offset real property taxes. This bill repeals the law establishing the Surplus Revenue Fund and removes relevant statutory references.