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An Overview of the Council on Local Mandates

Timothy O'Karcher, Esq.
ByTimothy Q. Karcher, Esq.
Member and former chair, New Jeresy
State Council on Local Mandates
Partenr, Proskaurer Rose LLP r)

This year marks the 16th anniversary of the “State Mandate, State Pay” Amendment to the New Jersey Constitution, and the creation of the New Jersey State Council on Local Mandates.

Since its creation in 1996, the nine-member, bipartisan Council has issued 17 formal decisions. Each one addresses the question—has the “state” issued a “mandate” to a school board, county, or municipality without providing funding to pay the cost of implementing such mandate?

If the Council determines a mandate is unfunded, and the mandate does not fall within certain enumerated exceptions (described below), then the mandate ceases to be mandatory and expires. The Council’s decisions are political, not judicial, and are not subject to judicial review.

This article provides an overview of the Council, the concept of “State Mandate, State Pay,” and the Council’s history, from its creation in 1996 to the present. While this article summarizes certain provisions of the underlying law, it is not a substitute for the full texts of the Amendment, Council Statute, and the seventeen decisions issued by the Council. Readers are encouraged to review the full text of those documents, which are available on the Council’s website, at www.state.nj.us/localmandates.

The Council’s website also contains a link to the Council’s Rules of Procedure, which explain the process for filing a Complaint with the Council and initiating a proceeding to have an unfunded mandate struck down. Recently, the Council has taken steps to make it easier to file a Complaint. The Council’s Rules of Procedure allow Complaints to be filed by e-mail.

The State Mandate, State Pay Amendment The “State Mandate, State Pay” Amendment to the New Jersey Constitution was approved by voters in the November 1995 general election, and became effective on December 7, 1995. See N.J. Const. art. VIII, § 2, ¶5 (hereinafter, the “Amendment”). (Coincidentally, 1995 also saw the enactment of the federal Unfunded Mandates Reform Act (UMRA), which was enacted to avoid imposing unfunded federal mandates on state, local, and tribal governments, or the private sector.)

a bunch of $20 bills

The New Jersey Amendment directed the state Legislature to create the Council to “resolve any dispute” regarding whether a statute, rule, or regulation imposes an “unfunded mandate” on a board of education, county, or municipality as set forth in the Amendment. Id. at ¶5(b). If the Council determines there is such an unfunded mandate, the mandate shall “cease to be mandatory in its effect and expire.” Id. at ¶5(a).

What is an Unfunded Mandate? The Amendment defines an “unfunded mandate” as “any provision of a law… rule, or regulation” enacted or effective after certain specified dates in 1996, which imposes a mandate on boards of education, counties, or municipalities but which “does not authorize resources, other than the property tax, to offset the additional direct expenditures required for [its] implementation.” Id. It is important to note that the Amendment is prospective, not retroactive. Accordingly, unfunded mandates that were in place prior to 1996 (and there are many) are not subject to review by the Council.

  While the Council may not review laws, rules, or regulations enacted prior to 1996, the definition of unfunded mandate is fairly broad. Because the definition includes “any provision” of a law, rule, or regulation, the Council is not constrained to solely look at formal rules and regulations. It has found mandates in, among other things, a memorandum directing compliance with a regulation (I/M/O Atlantic County, November 16, 2011) and a press release indicating a change in policy (I/M/O Counties of Morris, Warren, Monmouth, and Middlesex, October 31, 2006).

Six Exemptions The Amendment delineates six categories of laws, rules, or regulations that “shall not be considered unfunded mandates” even if they are otherwise mandates that are unfunded. Id. at ¶ 5(c).

The six exceptions generally protect rules or regulations that (1) are required to comply with federal laws or to meet eligibility standards for federal entitlements; (2) are imposed on both government and non-government entities in the same or substantially similar circumstances; (3) are enacted to repeal, revise, or ease an existing requirement or mandate; (4) stem from failure to comply with previously enacted laws or rules or regulations issued pursuant to a law; (5) implement the provisions of the New Jersey State Constitution; and (6) constitute laws enacted after a public hearing, held after public notice that unfunded mandates will be considered.

The Council Statue In response to the Amendment’s directive that “the Legislature shall create … a Council on Local Mandates,” the Legislature enacted the Council’s implementing legislation, known as the Council Statute, which became effective May 8, 1996. See N.J.S.A. 52:13H-1 et seq.

The Council Statute provides extensive detail regarding Council operations, organization, and qualifications to serve as a Council member, and contains several important provisions related to the role of the Council in resolving unfunded mandate disputes.

The Council is made up of nine public members appointed as follows: four members appointed by the Governor; one by the President of the Senate; one by the Speaker of the General Assembly; one by the minority leader of the Senate; one by the minority leader of the General Assembly; and one by the Chief Justice of the New Jersey Supreme Court. At present, there are no vacancies on the Council.

In 1997, the Council opened an office in Trenton and adopted a Plan of Organization, a Code of Ethics, and Rules of Procedure to govern the cases that would come before it.

The Council receives minimal funding from the state. While its initial legislative appropriation was $350,000 for 1997, the Council has always received significantly less to run its operations. For the past three years, the state has appropriated only $68,000 to fund the Council’s operations. The Council currently has a single employee, and the nine Members of the Council do not receive a salary.

To limit expenses, the Council meets telephonically and conducts the majority of its business by electronic mail.

The Decisions The Council’s seventeen decisions have further defined the structure, operations, and purpose of the Council.

After a Complaint is filed, the Council determines whether the Complaint satisfies certain threshold requirements. If it meets those requirements, the state is notified and given an opportunity to respond. In addition, any group or individual may file a request with the Council to appear as amicus curiae and the Council welcomes the participation of such parties if it will assist the Council. In addition, the League may bring a compliant on behalf of two or more municipalities.

Typically, each decision is issued after notice and a hearing, at which oral argument is heard and evidence is presented. Because of the important nature of the disputes (and the impact such disputes may have on a municipal budget), the Council strives to issue its decision shortly after the hearing. While all decisions are made solely by the Council, the Council may consult with academia and other advisors.

In one of its earliest decisions, the Council described the scope of its unique function and authority under the State Constitution:

Like a court, the Council’s deliberations begin only with the filing of a complaint. The Council considers evidence, hears testimony, and issues rulings. Although its jurisdiction is exclusive, the Council is strictly limited to a single inquiry: whether a law or rule or regulation, or provision thereof, imposes an unfunded mandate. …Although the scope of the Council’s power is more limited than that of the coordinate branches of government, within its sphere the Council is supreme, as it derives its authority directly from the New Jersey Constitution and the people.

[I/M/O Complaints filed by the Highland Park Board of Education and the Borough of Highland Park (“Highland Park I”), issued August 5, 1999, at pages 7-8]

While it is likely that the very presence of the Council serves as a deterrent to the enactment of unfunded mandates, several unfunded mandates have nevertheless been issued, and more are likely to come. The Council does not actively seek out unfunded mandates to strike down. Instead, the Council is constrained to consider only those matters placed before it by parties seeking redress.

 

First Published in New Jersey Municipalities, Volume 90, Number 4, April 2013

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