Assemblyman JOHN J. BURZICHELLI
District 3 (Salem, Cumberland and Gloucester)
Assemblyman JERRY GREEN
District 22 (Middlesex, Somerset and Union)
Concerns extension of certain local government financial agreements.
CURRENT VERSION OF TEXT
An Act concerning extension of certain local government financial agreements with urban renewal entities and amending P.L.1991, c.431.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 20 of P.L.1991, c.431 is amended to read as follows:
20. a. The following are repealed:
P.L.1961, c.40 (C.40:55C-40 et al.)
P.L.1983, c.139 (C.40:55C-41.1)
P.L.1986, c.86 (C.40:55C-41.2 et al.)
P.L.1967, c.114 (C.40:55C-44.1 et al.)
P.L.1978, c.93 (C.40:55C-46.1 et al.)
P.L.1981, c.506 (C.40:55C-52.1)
P.L.1985, c.138 (C.40:55C-58.2)
P.L.1965, c.95 (C.40:55C-77 et al.)
P.L.1944, c.169 (C.55:14D-1 et al.)
P.L.1950, c.107 (C.55:14D-6.1)
P.L.1946, c.52 (C.55:14E-1 et al.)
P.L.1950, c.111 (C.55:14E-7.1)
P.L.1949, c.185 (C.55:14E-20 et al.)
P.L.1965, c.92 (C.55:14I-1 et al.)
P.L.1949, c.184 (C.55:16-1 et al.)
P.L.1950, c.21 (C.55:16-5.1)
P.L.1950, c.112 (C.55:16-8.1)
P.L.1967, c.112 (C.55:16-9.1 et al.)
P.L.1962, c.249 (C.55:16-18.1)
P.L.1950, c.69 (C.55:16-22).
b. An urban
renewal entity organized and operating under a law repealed by P.L.1991, c.431
(C.40A:20-1 et seq.) shall not be affected by that repeal. Any financial
agreement entered into and any tax exemption granted or extended, shall remain
binding upon the urban renewal entity and the municipality, subject to
modification by mutual written consent, as if the law under which it was
entered into, or granted or extended, had not been repealed by P.L.1991, c.431
(C.40A:20-1 et seq.). The provisions of section 18 of P.L.1991, c.431
(C.40A:20-18) shall apply, however, to the urban renewal entity during the
period of the financial agreement, or tax exemption, remaining on and after the
effective date of P.L.1991, c.431 (C.40A:20-1 et seq.). Any redevelopment
project undertaken by an urban renewal entity, or financial agreement or tax exemption
entered into by an urban renewal entity with a municipality, on or after the
effective date of P.L.1991, c.431 (C.40A:20-1 et seq.) shall be pursuant
to P.L.1991, c.431
(C.40A:20-1 et seq.); provided, however, that any financial agreement entered into after August 14, 1986 and before April 17, 1992 (the effective date of P.L.1991, c.431 (C.40A:20-1 et seq.)) remaining in force as of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) may be extended by the municipality and the urban renewal entity, by mutual written consent, to a term of not more than 30 years from the completion of the entire project, or to a term of not more than 35 years from the initial execution of the financial agreement between the municipality and the urban renewal entity. The extension of the agreement shall be evidenced by a new financial agreement between the municipality and the urban renewal entity which shall be in conformity with P.L.1991, c.431 (C.40A:20-1 et seq.) and shall have a term of not more than 15 years from the date of termination of the initial financial agreement.
(cf: P.L.1992, c.79, s.56)
2. This act shall take effect immediately.
This bill seeks to correct and clarify an anomaly regarding the expiration of certain financial agreements between a municipality and an urban renewal entity that were signed after August 14, 1986 pursuant to the “Urban Renewal Corporation and Association Law of 1961,” P.L.1961, c.40 (C.40:55C-40 et seq.), (hereinafter Urban Renewal Law). Financial agreements entered into under the Urban Renewal Law provided for tax exemptions for urban renewal projects and incorporated a contractual payment arrangement, referred to as a service charge, by the urban renewal entity to the municipality in lieu of taxes.
The Urban Renewal Law initially provided that a financial agreement would expire either 15 years following completion of the project or 20 years from the expiration of the agreement. Later, an amendment to the law authorized a party to a financial agreement in effect as of August 14, 1986 to apply for a 15-year extension of the agreement. Pursuant to P.L.1991, c.431, enacted on January 18, 1992 and made effective April 17, 1992, the Urban Renewal Law, was repealed and replaced by the enactment of the “Long Term Tax Exemption Law” (hereinafter LTTE). The LTTE was subsequently amended by P.L.1992, c.79 (C.40A:20-1 et seq.)
The 1992 LTTE repealer provisions created the anomaly this bill seeks to remedy. The LTTE provided that financial agreements were to be effective for a term of not more than 30 years from completion of the project (N.J.S.A.40A:20-9) or 35 years from the date of execution of the financial agreement. For financial agreements in effect as of August 14, 1986, the LTTE preserved the right under the repealed Urban Renewal Law to extend agreements that were permitted to be extended for up to 15 years.
Consequently, financial agreements executed prior to August 14, 1986 may be extended an additional 15 years beyond the initial term of the financial agreements for a total of 30 years and financial agreements executed under the LTTE on or after April 17, 1992 are subject to a term of not more than 30 years from completion of the project. Only those financial agreements executed under the Urban Renewal Law after August 14, 1986 and before April 17, 1992 were capped at a maximum 15-year term from project completion and deprived of any right of extension.
This bill will eliminate this disparate treatment by permitting parties to financial agreements, which remain in effect and which were executed pursuant to the Urban Renewal Law after August 14, 1986 but prior to April 17, 1992, to extend those agreements for an additional 15 years from the initial expiration date of the agreement, thereby providing these financial agreements with equal treatment under the law.