This bill aims to limit the diversion of funds from stormwater, water, and sewer utilities to municipal and county budgets by reducing the allowable transfer percentage. Specifically, it amends current law to decrease the maximum amount that municipalities can transfer from surplus revenue collected for utility services from five percent to three percent of the utility's annual operating costs. Similarly, the bill reduces the appropriation limit for undesignated funds or unreserved retained earnings held by authorities from five percent to three percent of the authority's annual operating costs for water and sewer purposes.

Additionally, the bill mandates that municipalities and counties provide written notice to the Division of Local Government Services in the Department of Community Affairs whenever they transfer surplus revenue from stormwater, water, or sewer utilities, or appropriate funds from a water or sewer authority. This requirement aims to enhance transparency and accountability in the management of utility funds. The bill is set to take effect immediately upon enactment.

Statutes affected:
Introduced: 40A:4-35.1, 40A:5A-12.1