ASSEMBLY, No. 1179

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblyman DALTON

 

 

An Act concerning certain authority projects and amending and supplementing the "New Jersey educational facilities authority law" N.J.S.18:72A-1 et seq.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. N.J.S.18A:72A-3 is amended to read as follows:

    18A:72A-3. Definitions

    18A:72A-3. As used in this act, the following words and terms shall have the following meanings, unless the context indicates or requires another or different meaning or intent:

    "Authority" means the New Jersey Educational Facilities Authority created by this chapter or any board, body, commission, department or officer succeeding to the principal functions thereof or to whom the powers conferred upon the authority by this chapter shall be given by law;

    "Bond" means bonds or notes of the authority issued pursuant to this chapter;

    "Dormitory" means a housing unit with necessary and usual attendant and related facilities and equipment;

    "Educational facility" means a structure suitable for use as a dormitory, dining hall, student union, administration building, academic building, library, laboratory, research facility, classroom, athletic facility, health care facility, teaching hospital, and parking maintenance storage or utility facility and other structures or facilities related thereto or required or useful for the instruction of students or the conducting of research or the operation of an institution for higher education, and the necessary and usual attendant and related facilities and equipment, but shall not include any facility used or to be used for sectarian instruction or as a place for religious worship;

    "Effective municipal purposes tax rate" means the rate, per $100 of valuation, derived by dividing the amount to be raised for local municipal purposes for a municipality by the net valuation on which county taxes are apportioned to the municipality, as reported in column 12c and column 11, respectively, of the Abstract of Ratables and Exemptions compiled for the municipality by the Division of Taxation, in the Department of the Treasury, from the Table of Aggregates prepared pursuant to R.S.54:4-52;

    "Emerging needs program" means a program at one or more public or private institutions of higher education directed to meeting new and advanced technology needs or to supporting new academic programs in science and technology;

    "Higher education equipment" means any property consisting of, or relating to, scientific, engineering, technical, computer, communications or instructional equipment;

    "Participating college" means a public institution of higher education or private college which, pursuant to the provisions of this chapter, participates with the authority in undertaking the financing and construction or acquisition of a project;

    "Pretax year" means the calendar year immediately preceding the tax year;

    "Property" means land and improvements thereto;

    "Project" means a dormitory or an educational facility or any combination thereof;

    "Private college" means an institution for higher education other than a public college, situated within the State and which, by virtue of law or charter, is a nonprofit educational institution empowered to provide a program of education beyond the high school level;

    "Private institution of higher education" means independent colleges or universities incorporated and located in New Jersey, which by virtue of law or character or license, are nonprofit educational institutions authorized to grant academic degrees and which provide a level of education which is equivalent to the education provided by the State's public institutions of higher education as attested by the receipt of and continuation of regional accreditation by the Middle States Association of Colleges and Schools, and which are eligible to receive State aid;

    "Public institution of higher education" means Rutgers, The State University, the State colleges, the New Jersey Institute of Technology, the University of Medicine and Dentistry of New Jersey, the county colleges and any other public university or college now or hereafter established or authorized by law;

    "Qualified authority property" means property owned or otherwise held by the authority which includes: (1) projects completed and in use before, on or after the effective date of P.L. , c. (C. ) (now before the Legislature as this bill); and (2) projects initiated, or for which bonded or other indebtedness is initially incurred, or both, on and after the effective date of P.L. , c. (C. ) (now before the Legislature as this bill, whether or not completed or in use;

    "Tax year" means the calendar year for which property taxes are due and payable pursuant to chapter 4 of Title 54 of the Revised Statutes; and

    "University" means Rutgers, The State University.

(cf: P.L.1993, c.136, s.3)

 

    2. Notwithstanding the provisions of any law, rule or regulation to the contrary, the authority shall, for each local tax year beginning on and after the effective date of this act, make annual payments in lieu of taxes, in accordance with the provisions of section 3 of this amendatory and supplementary act, to each municipality in which qualified authority property is located.

 

    3. a. The amount of the payments in lieu of taxes to be made by the authority to each municipality, in which qualified authority property is located, shall be computed in each year by the tax collector for each municipality by multiplying the taxable value of the qualified authority property located within the municipality, as determined pursuant to R.S.54:4-27, for the pretax year times the effective municipal purposes tax rate for the municipality for the pretax year. The resulting amount shall be collected from the authority in two annual installments, at the same times, and in the same manner as the third and fourth quarterly installments of property taxes in the municipality, pursuant to chapter 4 of Title 54 of the Revised Statutes. Delinquent payments in lieu of property taxes shall be considered delinquent taxes for the purposes of chapters 4 and 5 of Title 54 of the Revised Statutes.

    b. The payments required by this act shall be made from operational and maintenance savings or surpluses, or from unneeded surplus amounts in reserve funds, as determined pursuant to accepted accounting procedures and approved by the authority's auditor.

 

    4. Nothing in this act shall be construed as prohibiting or abrogating any agreement between the authority and a municipality, entered into prior to on or after the effective date of this amendatory and supplementary act, for any payments in lieu of property taxes on qualified authority property which exceed the amounts that would otherwise be due pursuant to the provisions of section 3 of this amendatory and supplementary act.

 

    5. Any new series of bonds or refunding bonds issued by or on behalf of the authority, after the effective date of this amendatory and supplementary act, shall be null and void, if the bondholder agreements prohibit payments in lieu of property taxes to a municipality in which qualified authority property is located.

 

    6. This act shall take effect 60 days following enactment, and shall apply to each tax year beginning on and after that effective date.

 

 

STATEMENT

 

    This bill would require the New Jersey Educational Facilities Authority to make certain payments in lieu of property taxes to municipalities in which authority-owned property is located. Specifically, the payments would be required for property involving projects completed and in use on, before or after the bill's effect date, and property involving projects initiated on and after the bill's effective date, or for which debt is first incurred after that effective date. The restrictions are intended to prevent interference with the management of bonded indebtedness related to projects that are in progress as of the effective date.

    The method of calculating payments in lieu of taxes under this bill would be the same as the current statutory method for calculating such payments for State-owned property. The payments would be made from authority surpluses.

 

 

 

Requires payments in lieu of property taxes on certain authority property.