ASSEMBLY, No. 1663
STATE OF NEW JERSEY
INTRODUCED MARCH 4, 1996
By Assemblymen STANLEY, CHARLES, Brown, Doria, Jones, Caraballo, Romano, Assemblywomen Gill, Quigley, Assemblymen Impreveduto and Garcia
An Act providing for payments in lieu of full property taxes for certain municipal property and supplementing Title 54 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"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;
"Pretax year" means the calendar year immediately preceding the tax year;
"Qualified municipal property" means property located within the territorial boundaries of a municipality which: (1) is owned by another municipality, (2) is a public water supply or is used to protect a public water supply, and (3) is subject to the provisions of section 1 of P.L.1988, c.163, as amended by P.L.1990, c.19, but shall not include property qualified for payments in lieu of taxes pursuant to P.L.1977, c.222 (C.54:4-2a et seq.); and
"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.
2. a. Commencing with the first tax year for which the provisions of this act are applicable, the tax assessor of a municipality may apply to the Commissioner of the Department of Environmental Protection for certification of property as qualified municipal property. The commissioner's certification or denial of certification shall be issued within 60 days of receipt of an application for certification, and shall be considered the final agency act thereon for the purposes of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), and shall be subject only to judicial review as provided in the Rules of Court.
b. Upon receipt of certification pursuant to subsection a. of this section, the municipal tax assessor for the municipality that constitutes the taxing district in which qualified municipal property is located shall determine the assessed value of the qualified municipal property, notwithstanding the provisions of P.L.1988, c.163, as amended by P.L.1990, c.19. The assessed value shall be forwarded to the commissioner, who shall calculate the amount of the payment in lieu of full property taxes for the municipality by multiplying the assessed value of qualified municipal property in that municipality by the effective municipal purposes tax rate for that municipality for the pretax year. Such amount shall be reduced by the amount of any property taxes paid on the qualified municipal property during the pretax year. Such amount shall be certified to the State Treasurer, and shall be in addition to any payment due each qualified municipality pursuant to P.L.1977, c.272 (C.54:4-2.2a. et seq.).
c. The amounts due and payable pursuant to this section shall be paid by the State Treasurer at the same time and in the same manner as provided in section 9 of P.L.1977, c.272 (C.54:4-2.2i).
3. The provisions of P.L. , c. (C. ) (now before the Legislature as this bill) shall not apply in the case of a conveyance of qualified municipal property if the conveyance results in a use other than the protection of a public water supply.
4. 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 provide for State payment in lieu of full property taxes to municipalities wherein there is located property owned by another municipality that is either a water supply or serves the purpose of protecting a water supply for the other municipality. Pursuant to section 1 of P.L.1988, c.163, as amended by P.L.1990, c.19, a municipality, municipal utilities authority or public utility is prohibited, except under limited conditions, from conveying any land used for the purpose of protecting a public water supply. In practical terms, this land is virtually off-limits to development.
In certain instances, and as a result of Tax Court and Appellate Court decisions, municipal tax assessments of such property have been adjusted downward based on the development restrictions imposed under those State laws, resulting in property tax collections that are much lower than would otherwise be the case if the land were developed or otherwise not subject to a development moratorium. Although there are sound environmental policy justifications for restricting development in watershed areas, the State's moratorium has produced inequities for both the host municipality, which is subject to reduced tax revenues, and the municipal owner of the watershed land, which must continually litigate to obtain a fair assessment of land value in light of the moratorium.
The bill would establish a process for eligible municipalities to apply to the Department of Environmental Protection for State payments in lieu of full property taxes for the amount of the difference between what the host municipality receives from the other municipality (i.e., reduced property taxes) and what the municipality would receive if the property were not subject to State development restrictions.
Provides for payments in lieu of full property taxes for certain municipalities.