App.A:9-51.8. Satisfaction of financial obligations; guarantee of bonds by county

(a) The governing body of the municipality to the extent that the municipality may incur a financial obligation by virtue of the provisions of this act shall satisfy such obligations:

(1) By appropriating the amount necessary by an emergency appropriation adopted pursuant to the provisions of the "Local Budget Law," N.J.S. 40A:4-1 et seq.; or

(2) By the adoption of a bond ordinance pursuant to the provisions of the Local Bond Law which ordinance shall be deemed to authorize obligations within the purposes set forth in section 40A:2-7 of the New Jersey Statutes.

(b) The county in which such municipality shall be located may, with the approval of the Director of the Division of Local Government, pursuant to resolution duly adopted, by its governing body, after notice published in a manner provided for by a resolution authorizing bonds of such county pursuant to the aforesaid Local Bond Law and with or without consideration and upon such terms and conditions as may be agreed to by and between any such county and municipality, unconditionally guarantee the punctual payment of the principal of and interest on any bonds of the municipality so issued for the purposes set forth in this act. Any guaranty of bonds of the municipality made pursuant to this section shall be evidenced by endorsement thereof on such bonds executed in the name of the county and on its behalf by such official thereof as may be designated in the resolution authorizing such guaranty and such county shall thereupon and thereafter be obligated to pay the principal of and interest on said bonds in the same manner and to the same extent as in the case of bonds issued by it. Any such guaranty of bonds of a municipality may be made, and any resolution authorizing such guaranty may be adopted notwithstanding statutory or other debt limitations, including particularly any limitation or requirement under or pursuant to the said Local Bond Law but the principal amount of bonds so guaranteed shall, after their issuance, be included in the gross debt of such county for the purposes of determining the indebtedness of such county under or pursuant to said Local Bond Law.

In order to meet the obligation for payment of principal of or interest on any such bonds by virtue of such guaranty, a county is hereby authorized to borrow the funds necessary to meet such obligation and to issue such promissory note or notes therefor payable within 2 years from the date of such borrowing to the extent that funds of such county are not otherwise available for such purpose.

The municipality shall repay to the county as soon as practicable all sums paid by the county by virtue of the aforesaid bond guaranty.

L.1962, c. 48, s. 4. Amended by L.1963, c. 81, s. 16.