Bill > S2397

Introduced Session

This bill is in response to an investigative report issued by the State Commission of Investigation, dated June 30, 2015, concerning questionable contracting in online tax sales. Tax lien auctions have generated controversy in recent years because the interest rates associated with liens from unpaid residential taxes and municipal fees are exorbitant and unfairly burdensome. Concerns over improprieties in the administration of tax lien auctions--particularly with regard to online tax sales--prompted the State of New Jersey Commission of Investigation ("SCI") to investigate the integrity of the process. This bill would implement SCI's recommendations in order to reform the online tax sale system. Under the bill, the Department of Community Affairs ("DCA") would evaluate and select vendors to conduct electronic tax lien sales. The bill requires DCA to publish on its website a request for quotations from nationally recognized electronic municipal tax lien services. Vendors seeking selection would be required to disclose their corporate or other ownership and to submit other information required by DCA. After evaluating the quotations submitted by interested vendors, DCA would create a list of at least five qualified vendors from which municipalities may select a vendor to conduct online tax sales. Under the bill, a municipality may, without advertising for bids, contract with a vendor selected and approved by the Department of Community Affairs pursuant to this bill to conduct electronic tax lien sales. To contract with a municipality, a vendor must provide the municipality with a corporate disclosure form for its significant subcontractors. The bill defines "significant subcontractor" as any entity expected to receive 50 percent or more of estimated contract revenue. The bill also requires the Director of the Division of Local Government Services in the Department of Community Affairs, in consultation with the Director of the Division of Taxation to report to the Governor and the Legislature, within 90 days of the effective date, on the efficacy of online tax lien sales. The report must include:· an assessment of the pilot program established in P.L.2001, c.160 (C.54:5-19.1), including an evaluation of the performance of the lone vendor receiving approval from the department to conduct online tax sales under the pilot program;· a determination of whether tax sales should be carried out at the county level rather than the municipal level;· a determination of whether the State should adopt a mandatory minimum for which delinquencies would lead to a lien being sold at a tax sale; and· a determination of whether the State should adopt a maximum tax delinquency interest rate indexed to prevailing market rates. The bill also requires tax collectors, after completing a tax lien sale, to notify the property owner that the lien on the owner's property has been sold. The notice would be provided with a description of how the owner can pay off any outstanding debt and a clear disclosure of the consequences of the tax lien sale, including any delinquency interest or other fees the owner may incur. Lastly, the bill facilitates the establishment of electronic tax sales by eliminating the pilot program status of such sales.

Committee Categories

Shirley Turner (D)*, 

Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee (on 01/29/2024)

Official Document