N.J. Stat. § App.A:3-16
Whenever any municipality shall issue after the date this act shall become effective any refunding bonds and, in order additionally to secure the payment of such refunding bonds or in connection therewith, the tax collector or other proper officer of such municipality shall be required to set aside and deposit in a trust fund a portion of each payment of taxes, computed from year to year and determined by the ratio which the amount of any separate and specific appropriation for the payment of such refunding bonds and interest thereon, due or to become due in any fiscal year, bears to the amount of taxes levied for such fiscal year, or determined in accordance with any other formula required or to be required by any act of the legislature of the state or of the governing body of such municipality or any amendments or supplements to any such act or revisions thereof, or agreed or to be agreed to by such municipality in a contract made before, after, or simultaneously with the issuance of such refunding bonds, or any amendments or supplements to any such contract or revisions thereof, and such tax collector or other proper officer of such municipality shall be so required or such municipality shall so agree to use said trust fund for no other purpose than the payment of such refunding bonds and interest thereon, then in such event such tax collector or other proper officer of such municipality shall set aside and deposit a similar portion of each payment of taxes computed and determined in the same manner for the payment of the interest on and principal of any public works bonds issued by such municipality in a similar trust fund and said trust fund shall be used for no other purpose than the payment of such interest and such principal, and irrespective of whether such public works bonds shall have been issued before, after, or simultaneously with such refunding bonds. Any such trust fund may from time to time be invested and reinvested in general obligations of the federal government or of the state of New Jersey.
N.J.S. § App.A:3-16