1. a. Notwithstanding any other provision of law to the contrary, if a municipal court finds that a person does not have the ability to pay a penalty in full on the date of the hearing or has failed to pay a previously imposed penalty, the court may order the person to perform community service in lieu of the payment of a penalty; or, order the payment of the penalty in installments for a period of time determined by the court. If a person defaults on any payment and a municipal court finds that the defendant does not have the ability to pay, the court may:
(1) reduce the penalty, suspend the penalty, or modify the installment plan;
(2) order that credit be given against the amount owed for each day of confinement, if the court finds that the person has served jail time for the default;
(3) revoke any unpaid portion of the penalty, if the court finds that the circumstances that warranted the imposition have changed or that it would be unjust to require payment;
(4) order the person to perform community service in lieu of payment of the penalty; or
(5) impose any other alternative permitted by law in lieu of payment of the penalty.
b. For the purposes of this section, "penalty" means any fine, statutorily-mandated assessment, surcharge or other financial penalty imposed by a municipal court, except restitution or a surcharge assessed pursuant to subsection f. of section 1 of P.L.2000, c.75 (C.39:4-97.2).