This bill establishes a prohibition against displaying or flying the flags of organizations designated as terrorist by the United States Department of State on State property in New Jersey. It mandates that any State entity that allows such a flag to be displayed will face penalties, specifically the immediate loss of State or other funding, as determined by the Secretary of State and the Director of the Division of Budget and Accounting. The penalties collected will be directed to the General Fund for reallocation by the State Treasurer.

The definition of "State property" is clarified to include land and improvements owned or leased by the State, encompassing various facilities such as State offices, hospitals, parks, institutions, and schools, including colleges and universities. However, the bill allows for exceptions where such flags may be displayed for news, theatrical, historical, or educational purposes. The Secretary of State is tasked with adopting necessary rules and regulations to implement this legislation.