Bill Text: NJ S631 | 2020-2021 | Regular Session | Introduced
Bill Title: Establishes pilot program to permit use of generally accepted accounting principles in certain county and municipal annual financial statements.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Introduced - Dead) 2020-01-14 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S631 Detail]
Download: New_Jersey-2020-S631-Introduced.html
STATE OF NEW JERSEY
219th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2020 SESSION
Sponsored by:
Senator PAUL A. SARLO
District 36 (Bergen and Passaic)
Senator SAMUEL D. THOMPSON
District 12 (Burlington, Middlesex, Monmouth and Ocean)
Co-Sponsored by:
Senator Oroho
SYNOPSIS
Establishes pilot program to permit use of generally accepted accounting principles in certain county and municipal annual financial statements.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning local government accounting and supplementing chapter 5 of Title 40A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. There is established the "GAAP Reporting Pilot Program" in which the director shall permit the annual financial statements of participating local units to be completed in accordance with the generally accepted accounting principles, promulgated by the Governmental Accounting Standards Board. The director shall prescribe a form upon which the annual financial statement of a participating local unit shall be completed. The division shall also provide technical assistance to any local unit that participates in the pilot program.
b. The governing body of a pilot municipality or pilot county may apply to the director to participate in the pilot program. The pilot program shall commence after not less than six local units are approved to participate in the pilot program. The pilot program shall terminate after the submission of the report required pursuant to subsection c. of this section.
c. The director shall submit a report of its findings and recommendations concerning the pilot program to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), no later than six months following the third submission of the annual financial statement by each local unit participating in the pilot program. The report shall examine whether the interests of the State would be served by requiring every local unit to use the generally accepted accounting principles promulgated by the Governmental Accounting Standards Board.
d. The Commissioner of Community Affairs shall promulgate rules and regulations, on or before the first day of the third month next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), to effectuate the purposes of the pilot program.
e. As used in this section:
"Director" means the Director of the Division of Local Government Services in the Department of Community Affairs.
"Division" means the Division of Local Government Services in the Department of Community Affairs.
"Local unit" means a pilot municipality or pilot county.
"Pilot county" means a county having a population of not more than 150,000 persons according to the most recent federal decennial census.
"Pilot municipality" means a municipality located in a pilot county.
"Pilot program" means the "GAAP Reporting Pilot Program" established pursuant to subsection a. of this section.
2. This act shall take effect immediately.
STATEMENT
This bill establishes the "GAAP Reporting Pilot Program." The pilot program would permit the annual financial statement of participating counties and municipalities to be completed in accordance with the generally accepted accounting principles ("GAAP") promulgated by the Governmental Accounting Standards Board.
Currently, county and municipal financial statements are not required to comply with GAAP accounting standards. However, most local governments throughout the country, as well as all school districts in this State, currently follow these standards.
Under the bill, the governing body of a pilot county or pilot municipality may apply to the Director of the Division of Local Government Services in the Department of Community Affairs to participate in the pilot program. The bill defines a "pilot county" as any county having a population of not more than 150,000 people. Any municipality located within a pilot county is defined a "pilot municipality." The pilot program would begin after at least six counties and municipalities are approved to participate in the pilot program. The pilot program would operate for approximately three years.
The bill requires the director of the division to prescribe a form upon which any participating county or municipality may complete its annual financial statement using the GAAP standards. The bill also requires the division to provide technical assistance to any county or municipality that participates in the pilot program.
Within six months after each participating county and municipality has submitted its third annual financial statement using the GAAP standards, the division would be required to submit a report to the Legislature concerning the pilot program. Specifically, the report would be required to examine whether the interests of the State would be served by requiring every local unit to adopt the GAAP standards. Under the bill, the pilot program would terminate immediately following the submission of this report.
