40:14B-20.1 - Interest on deposits with municipal authorities - New Jersey Statutes

40:14B-20.1. Interest on deposits with municipal authorities
    Whenever a municipal authority requires a person to deposit an amount of money exceeding $5,000.00 for professional services employed by the municipal authority, for municipal authority inspection fees or to satisfy any performance or maintenance guarantee requirements, the money, until repaid or applied to the purposes for which it is deposited, including the person's portion of the interest earned thereon, except as otherwise provided in this section, shall continue to be the property of the person and shall be held in trust by the municipal authority.  Money deposited shall be held in escrow. The municipal authority receiving the money shall deposit it in a banking institution or savings and loan association in this State insured by an agency of the federal government, or in any other fund or depository approved for such deposits by the State, in an account bearing interest at a minimum at the rate currently paid by the institution or depository on time or savings deposits.  The municipal authority shall notify the person in writing of the name and address of the institution or depository in which the deposit is made and the  amount of the deposit.  The municipal authority shall not be required to refund an amount of interest paid on a deposit which does not exceed $100.00 for the  year.  If the amount of interest exceeds $100.00, that entire amount shall belong to the person and shall be refunded to him by the municipal authority annually or at the time the deposit is repaid or applied to the purposes for which it was deposited, as the case may be; except that the municipal authority may retain for administrative expenses a sum equivalent to no more than 33 1/3% of that entire amount, which shall be in lieu of all other administrative and custodial expenses.

   The provisions of this act shall apply only to that interest earned and paid on a deposit after the effective date of this act.

   L. 1985, c. 316, s. 1, eff. Aug. 28, 1985.