An Act concerning municipal free public library capital expenses and amending R.S.40:54-12 and R.S.40:54-15.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. R.S.40:54-12 is amended to read as follows:

40:54-12. The board shall hold in trust and manage all property of the library. It may rent rooms, or, when proper, construct buildings for the use of the library, purchase books, pamphlets, documents, papers and other reading matter, hire librarians, and other necessary personnel, and fix their compensation, make proper rules and regulations for the government of the library, and generally do all things necessary and proper for the establishment and maintenance of the free public library in the municipality ; provided, however, that the establishment of any capital project after the effective date of P.L. , c. (pending before the Legislature as this bill) shall require the approval, by resolution, of the municipal governing body. Whenever a resolution is adopted by the municipal governing body approving a capital project, the board shall forward a copy of the resolution to the State Librarian. The board may also transfer to and receive from other libraries books, magazines, prints, maps and other related library materials for the purpose of augmenting the interlibrary loan service.

(cf: P.L.2001, c.137, s.54)

2. R.S.40:54-15 is amended to read as follows:

40:54-15. a. The board of trustees shall make an annual report to the chief financial officer of the municipality which shall include a statement setting forth in detail all public revenues received by the library, all State aid received by the library, all expenditures made by the library and the balance of funds available. Notwithstanding the requirements of R.S.40:54-8 pertaining to the amount required to be raised and appropriated for library purposes, the annual report shall identify excess funds that the board is required to approve and transfer to the municipality as miscellaneous revenue. The excess funds transferred shall be any amount that exceeds the sum of the amount of the audited operating expenditures of the library for the most recent available year, plus an additional 20% of those operating expenditures, excluding: (1) funds restricted for capital projects, except for funds restricted after the effective date of P.L. , c. (pending before the Legislature as this bill) for such projects which have not been approved by resolution of the municipal governing body, and grants; and (2) any devise, bequest, or donation made to establish or maintain the free public library, to be maintained as surplus. The annual report shall also include an analysis of the state and condition of the library and shall be sent to the municipal governing body and to the State Library. The State Librarian shall prescribe by regulation the form of all such reports.

b. (1) Except as limited in paragraph (2) of this subsection, the board of trustees of a municipal free library shall adopt a resolution of its intent to transfer excess funds to the municipality, as identified in its annual report pursuant to subsection a. of this section.

(2) The board of trustees of a municipal free library established after the effective date of P.L.2008, c.8 shall not adopt a resolution of intent pursuant to this subsection before the eighth budget year following its establishment.

c. Once the board of trustees has adopted a resolution of intent pursuant to subsection b. of this section, it shall forward the resolution to the State Librarian for approval, along with any other information required by the State Librarian and in accordance with procedures and forms promulgated by the State Librarian in consultation with the Director of the Division of Local Government Services in the Department of Community Affairs. The State Librarian shall approve any resolution upon a determination that all of the following provisions are met:

(1) the municipal free library will still retain a sum equal to the amount of the audited operating expenditures of the library for the most recent available year plus an additional 20% of that amount, excluding: (a) funds restricted for capital projects, except for funds restricted after the effective date of P.L. , c. (pending before the Legislature as this bill) for such projects which have not been approved by resolution of the municipal governing body, and grants; and (b) any devise, bequest, or donation made to establish or maintain the municipal free library, to be maintained as surplus;

(2) the municipality and the municipal free library are in compliance with all conditions imposed by rule or regulation promulgated by the State Librarian for per capita library aid to public libraries according to the "state library aid law," N.J.S.18A:74-1 et seq., and pertaining to appropriations for the maintenance of a municipal free library according to R.S.40:54-8 or section 2 of P.L.1959, c.155 (C.40:54-29.4) in the case of a joint free public library;

(3) there are sufficient funds remaining in the municipal free library's operating budget for the maintenance of the library for the balance of the fiscal year in which the transfer of funds to the municipality occurs; and

(4) the library board of trustees has a written plan of at least three years that reflects that the long-term funding needs of the library will be met, and that any capital expense will contribute to the provision of efficient and effective library services, and that the written plan has been approved by the State Librarian.

d. Upon approval of its resolution of intent by the State Librarian pursuant to subsection c. of this section, the board of trustees shall cause the amount of the excess funds identified in its resolution to be transferred to the municipality.

(cf: P.L.2011, c.224, s.1)

3. This act shall take effect immediately.

STATEMENT

This bill would require a municipal free public library to receive the approval of the municipal governing body before establishing any new capital project after enactment. This bill would prevent a municipal library from circumventing the requirement in current law that excess library funds be transferred to the municipality. Under current law, library funds restricted for capital projects are not considered excess funds subject to this transfer requirement. Accordingly, a municipal library may establish new capital projects to avoid having to transfer excess funds to the municipality, without significant local oversight. This bill would provide such oversight by requiring the municipal governing body to approve any new municipal library capital projects and would clarify that any funds restricted for such projects are subject to the excess funds transfer requirement if there is no municipal governing body approval.