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Bill

S 3999

Exempts creditor from paying municipal property registration fee if property is subject to automatic stay under federal Bankruptcy Code.

2024-2025 Regular Session Introduced by Paul Moriarty and 1 co-sponsor

S 3999 exempts creditors from municipal property registration fees for properties under federal bankruptcy automatic stay, reducing local government revenue.

Referred to Senate Budget and Appropriations Committee
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Bill Summary · S 3999

Legislative bill overview

S 3999 creates a financial exemption for creditors from paying municipal property registration fees when a property is subject to an automatic stay under the federal Bankruptcy Code. The automatic stay is a court-ordered halt on collection actions that occurs automatically when someone files for bankruptcy. This bill would waive the state-level registration fee that creditors normally must pay when dealing with such properties.

Why is this important

Municipal property registration fees represent a revenue stream for local governments in New Jersey. By exempting creditors during bankruptcy proceedings, the bill shifts financial burden away from creditors but potentially reduces municipal income during periods when properties are in legal limbo. This affects the balance between protecting creditors' interests in bankruptcy situations and maintaining local government funding.

Potential points of contention

  • Municipal revenue impact: Cities and counties rely on registration fees; exempting creditors during bankruptcy could reduce predictable local government revenue without identifying compensating funding sources
  • Fairness questions: Whether creditors should receive fee waivers while other parties involved in property matters still must pay, and whether this effectively subsidizes creditor costs with public resources
  • Implementation complexity: Defining and verifying automatic stay status, determining which fees apply, and preventing potential abuse of exemption claims could create administrative burdens for municipal assessors and courts

Compiled from official sources — confirm details with the bill’s official record.

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