ASSEMBLY, No. 886
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblymen GARRETT and COLLINS
An Act concerning certain tax exemptions on real property used for conservation or recreation purposes and amending P.L.1974, c.167.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.1974, c.167 (C.54:4-3.63) is amended to read as follows:
1. The Legislature hereby finds and declares that natural open space areas for public recreation and conservation purposes are rapidly diminishing; that public funds for the acquisition and maintenance of public open space should be supplemented by private individuals and conservation organizations; and that it is therefore in the public interest to encourage the dedication of privately-owned open space to public use and enjoyment as provided for in this act.
The Legislature further finds and declares that while the dedication of privately-owned open space to public use and enjoyment is a significant governmental interest, there needs to be a balance between the tax incentives granted to encourage that dedication and the burden placed on municipalities that lose that tax revenue; and that no municipality, without its prior consent, shall be required to grant a tax exemption under this act if to do so would bring more than 50% of the total acreage of that municipality into tax exempt status.
(cf: P.L.1974, c.167, s.1)
2. Section 3 of P.L.1974, c.167 (C.54:4-3.65) is amended to read as follows:
3. Each owner of real property claiming the tax exemption provided by this act shall file the original and one copy of its initial application for certification with the Commissioner of the Department of Environmental Protection on or before August 1 of the pretax year on such forms as the commissioner shall prescribe. Such application shall include, but not be limited to, the following information: the taxing district in which the real property is located, the block and lot number of the property, a physical description of the land and improvements, a plan for the use and preservation of the property, a statement of the uses which may be made of the property by the public, a certification by the municipality in which the property is located stating the total acreage in the municipality and the amount of acreage in that municipality subject to tax exemption, excluding tax exemptions pursuant to P.L.1974, c.167 (C.54:4-3.63 et seq.), and a statement of the terms under which the public may gain access to and enjoy the use of such lands. The application shall be accompanied by documentation to establish the organization and purposes of the property owner and its entitlement to exemption from Federal income tax under Section 501(c)(3) of the Internal Revenue Code.
(cf: P.L.1974, c.167, s.3)
3. Section 4 of P.L.1974, c.167 (C.54:4-3.66) is amended to read as follows:
4. The Commissioner of the Department of Environmental Protection may certify that the real property is maintained or operated for the benefit of the public only if he finds, after a public hearing on the application has been held, that the real property for which an application for tax exemption is made is open to all on an equal basis, that the use or proposed use of the property complies with applicable zoning regulations, and that a tax exemption for such property would be in the public interest. Restrictions on the use of such real property by the public may be permitted only if the commissioner finds that they are necessary for proper maintenance and improvement of the property or that significant natural features of the land may be adversely affected by unrestricted access. The commissioner may authorize that reasonable charges may be made for entrance onto or use of such real property. The commissioner may consult with the Natural Areas Council in making a determination as to whether the granting of a certificate for the real property covered by the application would serve the public interest.
(cf: P.L.1974, c.167, s.4)
4. Section 5 of P.L.1974, c.167 (C.54:4-3.67) is amended to read as follows:
5. The Commissioner of the Department of Environmental Protection shall on or before September 15 of the pretax year certify that a property owner and the real property for which an exemption is claimed are qualified under the terms of this act and that a tax exemption would be in the public interest. The commissioner shall forthwith deliver such certification to the property owner and the tax assessor of the taxing district in which the real property is located. The commissioner may not issue a certification under this act if the granting of that certification would bring more than 50% of the acreage in a particular municipality into tax exempt status. The acreage limitation shall not affect the commissioner's power to certify any real property that is certified as of January 1, 1989 and that has continued to be certified without interruption. If the total applications for tax exemptions under this act in any one municipality, if granted, would result in more than 50% of the acreage in that municipality being tax exempt, the commissioner shall prioritize the certification applications. Priority shall be accorded real property that is certified as of January 1, 1989 and that has continued to be certified without interruption. Priority for additional properties shall be based on the public recreational benefit, the development pressures for that real property, the environmental significance of that property, and the likelihood that the public would lose its access to that property if the tax exemption is denied. Certification may be granted by the commissioner to those qualifying applications ranking highest on the priority list. Where the commissioner finds that a parcel of real property does not qualify for certification because over 50% of the acreage in the municipality where the real property is located is tax exempt, but that real property would otherwise qualify for certification, the commissioner may grant the certification upon approval, in writing, of the municipality in which the real property is located. If the tax exemption is withdrawn pursuant to section 7 of P.L.1974, c.167, (C.54:4-3.69), the owner of real property previously denied certification with the highest ranking on the priority list shall be granted certification for the remainder of the tax year, to the extent the acreage does not exceed the 50% limit.
(cf: P.L.1974, c.167, s.5)
5. This act shall take effect immediately.
STATEMENT
It is a significant governmental interest to provide the public with recreational opportunities and to promote the conservation of lands. One way the State has sought to achieve this objective is to provide property tax exemptions to certain nonpofit corporations and organizations who own land used exclusively for public recreation and conservation purposes. However, the law that allowed for this tax exemption does not take into account the burden placed on municipalities who lose the ratables. The law also does not take into account the particular recreational and conservation needs of these municipalities. This bill remedies these deficiencies in the existing law.
Specifically, this bill provides that no tax exemption will be granted to private property owners, without a municipality's consent, that would result in a municipality having over 50% of its property tax exempt. This limitation allows for a substantial amount of land to qualify for recreation or conservation tax exemptions while protecting at least one half of a municipality's tax base. This cap is essential because if a municipality is required to grant tax exemptions beyond this amount either essential governmental services will be lost or the few remaining taxpayers will have to pay higher taxes to provide these services. The bill provides that a municipality is free to allow for tax exemptions above the 50% limit.
Where applications for tax exemptions in any one municipality would result in greater than 50% tax exempt land in the municipality, the Commissioner of Environmental Protection is required to prioritize the applications. Priorities are based on recreational value, development pressures, environmental concerns, and the potential loss of public access to that land.
This bill clarifies that only those lands open to all on an equal basis, regardless of sex, qualify for the tax exemption. The bill also provides that lands will not qualify if the owner of the land restricts the public's use of the land for the owner's private use or if the use, or proposed use, of the land, would violate the municipality's zoning provisions.
Places a cap on the amount of tax exempt conservation or recreation lands that are in a municipality.