[Passed Both Houses]

[First Reprint]

ASSEMBLY, No. 2824

STATE OF NEW JERSEY

INTRODUCED MARCH 13, 1997

By Assemblymen DiGAETANO, KRAMER, Bagger, Bucco, Assemblywoman Wright, Assemblyman Augustine, Assemblywomen Murphy, Heck, Assemblyman DeCroce, Assemblywomen Quigley, Buono, Assemblyman Suliga, Senators Inverso, Bubba, Kyrillos, Matheussen, Sinagra, Kosco and Scott

An Act replacing the method of distributing certain funds to municipalities from the taxation by the State of gas and electric public utilities and certain telecommunications companies, and of sales of electricity, natural gas and energy transportation service, establishing the "Energy Tax Receipts Property Tax Relief Fund," and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 52 of the Revised Statutes.

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

    1. This act shall be known and may be cited as the "Energy Tax Receipts Property Tax Relief Act."

    2. a. Commencing July 1, 1997 there is established the "Energy Tax Receipts Property Tax Relief Fund" as a special dedicated fund in the State Treasury into which there shall be credited annually, commencing in State fiscal year 1998, the sum of ¹[$730,000,000] $740,000,000 or the amount determined pursuant to subsection e. of this section¹ from the following: net payments under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) from sales and use of energy or utility services, net payments under the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq.) from gas, electric, and gas and electric public utilities, whether municipal or otherwise, that were subject to tax pursuant to the provisions of P.L.1940, c.5 (C.54:30A-49 et seq.) prior to January 1, 1998, net payments under the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq.) from telecommunications public utilities that were subject to tax pursuant to the provisions of P.L.1940, c.4 (C.54:30A-16 et seq.) as of April 1, 1997, net payments under P.L.1940, c.5 (C.54:30A-49 et seq.) from sewerage and water corporations, net payments under the "Transitional Energy Facility Assessment Act," P.L. , c. (C.        ) (now pending before the Legislature as sections 36 through 49 of Senate Bill No.31 of 1997 or Assembly Bill No. 2825 of 1997), and such sums from the General Fund as may be necessary to provide that the annual amount credited to the fund shall equal ¹[$730,000,000] $740,000,000 or the amount determined pursuant to subsection e. of this section¹ .

    b. Notwithstanding the provisions of P.L.1940, c.4 (C.54:30A-16 et seq.), P.L.1940, c.5 (C.54:30A-49 et seq.) and any other provision of law concerning the apportionment and distribution by the State of taxes paid by public utilities,

    (1) There shall be paid during the State fiscal year 1998 and during each fiscal year thereafter from the "Energy Tax Receipts Property Tax Relief Fund" to the municipalities of the State the sum of ¹[$730,000,000] $740,000,000 or the amount determined pursuant to subsection e. of this section¹ .

    (2) A portion of the ¹[$730,000,000] $740,000,000 or the amount determined pursuant to subsection e. of this section¹ shall be allocated in a manner that provides that each municipality shall receive an amount not less than the largest annual amount received or to be received by the municipality from:

    (a) the distribution of $685,000,000 from the proceeds of the public utilities franchise and gross receipts taxes under P.L.1940, c.4 (C.54:30A-16 et seq.) and P.L.1940, c.5 (C.54:30A-49 et seq.) in calendar year 1994, 1995 or 1996; or

    (b) the distribution of $685,000,000 ¹[,]¹ from the proceeds of the public utilities franchise and gross receipts taxes under P.L.1940, c.4 (C.54:30A-16 et seq.) and P.L.1940, c.5 (C.54:30A-49 et seq.) or from taxes and assessments collected in replacement of such taxes as released by the Division of Local Government Services in the Department of Community Affairs as fiscal year 1998 estimated franchise and gross receipts taxes State aid distributions by municipality prior to the certification of apportionment of such funds by the Director of the Division of Taxation ¹and the amounts required pursuant to subsection d. of this section¹.

    ¹(3) A portion of the $740,000,000 or the amount determined pursuant to subsection e. of this section shall be allocated in a manner that provides that each municipality shall receive an amount equal to the difference, if any, between the amount it received pursuant to paragraph (2) of this subsection and the sum of the amounts that the municipality received pursuant to the certification made in the 1997 calendar year released by the Division of Local Government Services in the Department of Community Affairs as the fiscal year 1998 estimated franchise and gross receipts taxes State aid distribution of $685,000,000 and the certification of the 1997 fiscal year distribution of $45,000,000.

    (4) The portion of the $740,000,000 or the amount determined pursuant to subsection e. of this section remaining after the allocations pursuant to paragraphs (2) and (3) of this subsection shall be distributed in proportion to the amounts distributed pursuant to paragraph (2) of this subsection.¹

    c. ¹(1)¹ The funds distributed pursuant to ¹[paragraph] paragraphs¹ (2) ¹and (4)¹ of subsection b. of this section shall be distributed ¹annually¹ to municipalities on the following schedule: July 15, 35% of the total amount due; August 1, 10% of the total amount due; September 1, 30% of the total amount due; October 1, 15% of the total amount due; November 1, 5% of the total amount due; and December 1, 5% of the total amount due.

    ¹(2) The funds distributed pursuant to paragraph (3) of subsection b. of this section shall be distributed annually to municipalities on or before June 30.

    d. The allocation set forth in paragraph (2) of subsection b. of this section shall be adjusted to increase each appropriate municipal distribution by the amount necessary to:

    (1) make corrections to apportionment valuations or distribution values made by the Director of the Division of Taxation in the Department of the Treasury pursuant to R.S.54:30-2 and

    (2) correct equitable distortions, as determined by the State Treasurer, resulting from the application of section 2 of P.L.1980, c.10 (C. 54:30A-24.1) and section 4 of P.L.1980, c.11 (C. 54:30A-61.1).

    The director shall report to the Legislature, on or before July 15, 1997, the amount and distribution of the corrections pursuant to paragraphs (1) and (2) of this subsection.

    e. The amount credited to the "Energy Tax Receipts Property Tax Relief Fund" shall be $745,000,000 for State fiscal year 1999, $750,000,000 for each of State fiscal years 2000 and 2001, and $755,000,000 for State fiscal year 2002 and each fiscal year thereafter.

    f. Notwithstanding any other provision of this section or any other provision of law to the contrary, if any municipality paid a county for an amount for county purposes from the amount it received from its apportionment of taxes according to the limitations on the municipalities apportionment under section 4 of P.L.1980, c.11 (C.54:30A-61.1), the highest amount of that payment during calendar year 1994, 1995, and 1996 shall be paid annually directly to that county by the State Treasurer and be deducted from that municipality's distribution otherwise determined pursuant to paragraph (2) of subsection b. of this section.¹

    ¹3. If, in any State fiscal year, net payments under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) from sales and use of energy or utility services, net payments under the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq.) from gas, electric, and gas and electric public utilities, whether municipal or otherwise, that were subject to tax pursuant to the provisions of P.L.1940, c.5 (C.54:30A-49 et seq.) prior to January 1, 1998, net payments under the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq.) from telecommunications public utilities that were subject to tax pursuant to the provisions of P.L.1940, c.4 (C.54:30A-16 et seq.) as of April 1, 1997, net payments under P.L.1940, c.5 (C.54:30A-49 et seq.) from sewerage and water corporations, net payments under the "Transitional Energy Facility Assessment Act," P.L. , c. (C.        ) (now pending before the Legislature as sections 36 through 49 of Senate Bill No. 31 of 1997 or Assembly Bill No. 2825 of 1997) exceed $1,425,000,000, 75% of that amount of net payments in excess of $1,425,000,000 shall be credited to the "Energy Tax Receipts Property Tax Relief Fund" in addition to the amount credited pursuant to section 2 of P.L. , c. (C. )(now pending before the Legislature as this bill), for distribution to municipalities as additional aid.¹

    ¹[3.] 4.¹ a. The annual appropriations act for each State fiscal year commencing with fiscal year 1998 shall appropriate and distribute during the fiscal year an amount not less than ¹[$730,000,000] $740,000,000 or the amount determined pursuant to subsection e. of section 2 of P.L. , c. (C. )(now pending before the Legislature as this bill)¹ from the "Energy Tax Receipts Property Tax Relief Fund" pursuant to the provisions of section 2 of P.L. , c. (C. ) (now pending before the Legislature as this bill), for the purposes of that fund.

    b. If the provisions of subsection a. of this section are not met on the effective date of an annual appropriations act for the State fiscal year, or if an amendment or supplement to an annual appropriations act for the State fiscal year should violate the provisions of subsection a. of this section, the Director of the Division of Budget and Accounting in the Department of the Treasury shall, not later than five days after the enactment of the annual appropriations act, or an amendment or supplement thereto, that violates the provisions of subsection a. of this section, certify to the Director of the Division of Taxation that the requirements of subsection a. of this section have not been met.

    c. The Director of the Division of Taxation shall, no later than five days after certification by the Director of the Division of Budget and Accounting in the Department of the Treasury pursuant to subsection b. of this section that the provisions of subsection a. of this section have not been met or have been violated by an amendment or supplement to the annual appropriations act, notify all taxpayers that have filed a return under the Corporation Business Tax (1946), P.L.1945, c.162 (C.54:10A-1 et seq.) during the previous calendar year, other than taxpayers that are gas, electric, and gas and electric, or telecommunications public utilities as defined pursuant to subsection (q) of section 4 of P.L.1945, c.162 (C.54:10A-4) pursuant to the amendment to that section 4 made in section 2 of P.L. , c. (now pending before the Legislature as Senate Bill No. 31 of 1997 or Assembly No. 2825 of 1997), that the taxpayer shall have no liability pursuant to the provisions of P.L.1945, c.162 for any corporation business tax for the taxpayer's current privilege period, notwithstanding any other provision of law to the contrary.

    ¹[4.]5.¹ Notwithstanding the provisions of P.L.1945, c.162 (C.54:10A-1 et seq.) or any other law to the contrary, for a privilege period of a taxpayer, other than a taxpayer that is a gas, electric, and gas and electric, or telecommunications public utility as defined pursuant to subsection (q) of section 4 of P.L.1945, c.162 (C.54:10A-4) pursuant to the amendment to that section 4 made in section 2 of P.L. , c. (now pending before the Legislature as Senate Bill No. 31 of 1997 or Assembly Bill No. 2825 of 1997), in which the taxpayer would otherwise have had a tax liability or minimum tax due under P.L.1945, c.162, during which privilege period the Director of the Division of Budget and Accounting in the Department of the Treasury makes a certification that the provisions of subsection a. of section ¹[3] 4.¹ of P.L.    , c. (C. )(now pending before the Legislature as this bill) have not been met or have been violated by an amendment or supplement to the annual appropriations act, there shall be no liability pursuant to the provisions of P.L.1945, c.162 for any such taxpayer's current privilege period.

    ¹[5.] 6.¹ This act shall take effect immediately but shall remain inoperative until July 1, 1997.

The "Energy Tax Receipts Property Tax Relief Act;" replaces method of distributing certain funds guaranteed to municipalities from the State's taxation of energy and telecommunications.