Bill > A619

Introduced Session

This bill, the "State Bank of New Jersey Act," creates the State Bank of New Jersey. The bill authorizes the creation of a board of directors to oversee the bank and the State Treasurer or any other person in control of State funds to deposit State moneys in the bank. The bill provides that all income earned by the bank for its own account on State moneys that are deposited in or invested with the bank to the credit of the State are to be credited to and become a part of the revenues and income of the bank. The bill permits the bank to make loans subject to the limitations of the act and any rules adopted by the State Treasurer. The bill also provides that the State bank is permitted to charge the same rate of interest, provide for the same terms for a loan or extension of credit, and to exercise any other power or authority permissible to a State-chartered bank. Under the bill, the bank is required to invest State moneys in any manner that ensures appropriate cash management. The bank is prohibited from making a loan to any board member, the president, or any officer of the bank, including any immediate family member of that person, or any entity with which that person is associated or in which he has an interest. The bill also provides that the bank may: (1) Buy and sell federal funds; (2) Lease, assign, sell, exchange, transfer, convey, grant, pledge, or mortgage all real and personal property, title to which has been acquired in any manner; (3) Acquire real or personal property or property rights by purchase, lease, or the exercise of the right of eminent domain and may construct, remodel, and repair buildings; (4) Receive deposits from any public source and deposit its funds in any bank or other financial institution; (5) Perform all acts and do all things necessary, advisable, or desirable to carry out the powers expressly granted or necessarily implied in the bill through or by means of its president, officers, agents, or employees or by contracts with any person, firm, or corporation; (6) Provide loans or other assistance for transportation projects; (7) Coordinate with the Higher Education Student Assistance Authority to further access to postsecondary education, whether by loans, grants, scholarships, savings programs, or other means and shall have the authority enumerated in section 1 of P.L.1999, c.46 (C.18A:71A-9), as appropriate; (8) Purchase mortgage loans on residential real property originated by financial institutions; and (9) Provide loans or other assistance to small businesses. The bill creates a 13 member board of directors to govern the bank. The board consists of: (1) the State Treasurer, or the State Treasurer's designee, as an ex officio member; and (2) twelve members, who are residents of this State, to be appointed by the Governor with the advice and consent of the Senate, including: one person who shall have experience in bank administration; one person who shall have experience in credit union administration; one person who shall have experience in consumer financial advocacy; one person who shall have experience in public administration; two additional public members; and of the six other persons, two shall be appointed upon the recommendation of the President of the Senate, two shall be appointed upon the recommendation of the Speaker of the General Assembly, one shall be appointed upon the recommendation of the Minority Leader of the Senate, and one shall be appointed upon the recommendation of the Minority Leader of the General Assembly. The board is required to appoint a president of the bank to supervise the administrative affairs and general management and operations of the bank. The bill provides that the president of the bank is to serve at the pleasure of the board and receive such compensation as the board shall determine. With the approval of the board, the president is charged with: (1) planning, directing, coordinating, and executing the administrative functions of the bank in conformity with the policies and directives of the board; (2) employing professional and clerical staff as necessary to implement the provisions of the bill; (3) reporting to the board on all operations under the president's control and supervision; (4) preparing an annual budget and managing the administrative expenses of the bank; and (5) undertaking any other activities necessary to accomplish the purposes of the bank. The bill provides that all employees of the bank, except the president, are to be in the career service of the Civil Service. All meetings of the board are subject to the open public meetings act and, except as provided by the Commissioner of Banking and Insurance, records maintained by the bank shall be subject to the open public records act. The bill includes post-employment restrictions on members of the board or employees of the bank. Except for a secretarial or clerical employee, while serving as a member of the board or an employee of the bank, and for a period of two years immediately following such service or employment, a person, any member of his immediate family, any entity with which that person is associated or in which he has an interest, or any partner, officer, director, or employee while he is associated with that entity, shall not be employed by, a consultant to, a member of the board of directors of, affiliated with, or otherwise a representative of, any person or entity that has obtained a loan from, or has otherwise done substantial business with, the bank. The bill also provides that members of the board and the President of the State bank shall make the same financial disclosures, whether required by law, rule, regulation or Executive Oder, including an annual filing of Financial Disclosure Statements, and in the same manner, as are required of the heads of each principal department in the Executive Branch. The bill requires the board to meet regularly with the management of the bank to review the bank's operations and make recommendations to the president on the operations of the bank. The bill also provides that the State bank is exempt from the payment of all fees and all taxes levied by the State or any of its subdivisions. In addition, all deposits in the bank are guaranteed by the State and are exempt from State, county, and municipal taxes. Under the bill, the Commissioner of Banking and Insurance is required to examine the State bank in the same manner as a State-chartered financial institution and may conduct any additional investigation of the bank which may be necessary to ensure the proper operation of the bank, at the bank's cost. The commissioner shall report the examination results, and the results of any necessary investigation, to the Governor and to the Legislature. In addition, the State Auditor shall contract with an independent certified public accounting firm for an annual audit of the bank in accordance with generally accepted government auditing standards. The State Auditor is required to contract for an annual audit of the separate programs and funds administered by the bank. The auditor selected shall prepare an audit report that includes financial statements presented in accordance with the audit and accounting guide for banks and savings institutions issued by the American Institute of Certified Public Accountants. The auditor also shall prepare audited financial statements for inclusion in the comprehensive annual financial report for the State. The State Auditor may conduct performance audits of the bank, including the separate programs and funds administered by the bank. The auditor shall report the results of the audits to the Governor and to the Legislature. The bank or its separate programs and funds shall pay the costs of the audits. The bill also provides that, by December 1st of each year, the State Treasurer shall make an annual report to the Governor, and to the Legislature on the affairs of the bank. The report may include any recommendations that would improve the affairs of the bank. Additionally, immediately following the close of each calendar month, the State Treasurer shall prepare a report as to the State of the general fund, the bank, and every other fund under the State Treasurer's control. The monthly report is to be made available on the Department of the Treasury website.

AI Summary

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Shavonda Sumter (D)*, 

Introduced, Referred to Assembly Financial Institutions and Insurance Committee (on 01/09/2024)

Official Document