ASSEMBLY, No. 1599
STATE OF NEW JERSEY
INTRODUCED FEBRUARY 29, 1996
By Assemblyman CARRABALLO
An Act concerning payments in lieu of taxes for certain New Jersey Transit Corporation property and amending P.L.1979, c.150.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 16 of P.L.1979, c.150 (C.27:25-16) is amended to read as follows:
16. The exercise of the powers granted by this act shall be in all respects for the benefit of the people of the State, and since the improvement, operation, and maintenance of public transportation services by the corporation constitute the performance of essential governmental functions, neither the corporation nor any wholly owned business corporation or other entity shall be required to pay taxes or assessments upon any public transportation project or any property acquired or used under the provisions of this act, including but not limited to, sales taxes, real property taxes or assessments, corporate franchise taxes or income taxes.
Because of the special nature of such property, the leasing for private use of a part of a structure that is part of any property whose primary use is as a public transportation passenger facility and which is located within an area in need of rehabilitation, as defined in section 2 of P.L.1977, c.12 (C.54:4-3.96), shall not serve to remove the tax exemption of the corporation for the leased portion of the property, and shall not subject the lessee to taxation, the provisions of chapter 29A of Title 54 of the Revised Statutes and P.L.1949, c.177 (C.54:4-2.3 et seq.) notwithstanding.
However, any property owned by the corporation or any wholly owned business corporation or other entity shall be considered "State" property as defined in P.L.1977, c.272 (C.54:4-2.2a), and shall be subject to the in lieu tax payments provided in that act. In order that municipalities not suffer the loss of taxes by reason of the acquisition of property during 1980 by the corporation or any wholly owned business corporation or other entity under the provisions of this act, the corporation shall pay annually in two installments, May 1 and November 1, to each municipality, beginning in tax year 1981, a sum equal to the taxable value of the property, as determined for the tax year 1981, multiplied by the 1981 general tax rate for the municipality where the property is located. However, when the property owned by the corporation within a municipality comprises 10 acres or more, and that property would represent 2% or more of the municipal tax base if it were subject to taxation, the tax assessor shall file with the county board of taxation in each year, with the assessment list, a certification that the area of such property comprises 10 acres or more, and the property would represent 2% or more of the municipal tax base if it were subject to taxation. The certification shall also contain a brief description of the property and a statement of the value of the property as it is valued on the list of exempt property. The county board of taxation shall, as soon as is practicable after receiving such a certification from a municipality, estimate the sum of money which the municipality would have derived during the year as tax revenue for local purposes for such lands if those lands were not exempt from taxation, and shall forthwith certify the amount to the clerk of the municipality. The clerk of the municipality shall forward the certification to the New Jersey Transit Corporation, and the corporation shall annually pay that sum to the municipality, in two equal installments, on May 1 and November 1.
Moreover, the corporation is hereby authorized and empowered, in its discretion, to enter into a voluntary agreement or agreements with any county or municipality, whereby it will undertake to pay an additional fair and reasonable sum or sums annually in connection with any property used primarily as a public transportation passenger facility, a portion of which is leased for private use, which is located within an area in need of rehabilitation, as defined in section 2 of P.L.1977, c.12 (C.54:4-3.96).
Nothing in this subsection shall deprive any municipality of replacement revenues that it would otherwise receive pursuant to sections 19 through 24 of P.L.1966, c.139 (C.54:29A-24.1 et seq.).
(cf: P.L.1981, c.560, s.1)
2. This act shall take effect immediately.
STATEMENT
This bill increases payments in lieu of taxes for certain real property owned by the New Jersey Transit Corporation.
Specifically, the bill requires that when a property owned by the New Jersey Transit Corporation within a municipality comprises 10 acres or more, and that property would represent 2% or more of the municipal tax base if it were subject to taxation, the tax assessor must file with the county board of taxation in each year, with the assessment list, a certification that the area of such property comprises 10 acres or more, and the property would represent 2% or more of the municipal tax base if it were subject to taxation. The certification must also contain a brief description of the property and a statement of the value of the property as it is valued on the list of exempt property. The county board of taxation must, as soon as is practicable after receiving the certification, estimate the sum of money which the municipality would have derived during the year as tax revenue for local purposes for such lands if those lands were not exempt from taxation, and must certify the amount to the clerk of the municipality. The clerk of the municipality must then forward the certification to the New Jersey Transit Corporation, and the corporation must annually pay that sum to the municipality, in two equal installments, on May 1 and November 1.
The property that the New Jersey Transit Corporation owns is not taxable, and therefore the corporation currently pays to municipalities in which its property is located a payment in lieu of taxes, using information from the 1981 tax year. However, in many cases, the calculation of the in lieu payment using such old information does not provide an adequate payment to a municipality for the actual cost of the municipal services used by the property, such as police and fire protection and the cost of municipal courts. This difference is assumed by the regular municipal property taxpayers. The impact on individual municipal taxpayers is especially acute in communities where transit property represents a significant portion of the municipality. Transit property which represents 10 acres or more of the total municipal acreage, and which, if taxable, would represent 2% or more of the total municipal tax base, is significant in size and should, in fairness to the rest of the taxpaying public, shoulder a more representative amount of the cost of municipal services.
The provisions of this bill are intended to fairly and adequately compensate such municipalities for the cost of all municipal services provided by municipalities to such New Jersey Transit Corporation facilities.
Increases payments in lieu of taxes for certain real property owned by the New Jersey Transit Corporation.