N.J. Stat. § 40:62-6
All rentals received under any such lease shall be applied by the municipality in the same manner as provided by law for the application of income from such plant while operated by the municipality. The proceeds from any sale shall be used for the retirement of bonds issued for the purposes of such plant, if any, or in case no such bonds are outstanding, then to the retirement of other bonds of the municipality. If no such bonds are outstanding the proceeds or any balance thereof may be used for the general purposes of the municipality. Such proceeds may, pending their use for the retirement of such bonds, be invested in bonds of the Government of the United States or bonds of the State of New Jersey or bonds or notes of such municipality.
N.J.S. § 40:62-6