Reduces allowed diversion of funds from stormwater, water, and sewer purposes to municipal and county budgets; requires municipalities and counties to notify Division of Local Government Services of diversions.

This bill reduces the maximum amount that New Jersey municipalities and counties can divert from stormwater, water, and sewer utility funds to general budgets, lowering the limit from 5% to 3% of the utility's annual operating costs. It applies to funds collected by utilities (like stormwater systems) and unspent funds held by water/sewer authorities. The bill also requires local governments to provide written notice to the Division of Local Government Services whenever they transfer or appropriate these funds. This changes existing law by tightening restrictions on fund diversions while adding a notification requirement.