ASSEMBLY LOCAL GOVERNMENT COMMITTEE
ASSEMBLY, No. 2824
STATE OF NEW JERSEY
DATED: JUNE 9, 1997
The Assembly Local Government Committee reports favorably Assembly Bill No. 2824.
Assembly Bill No. 2824 revises 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. The State's current taxation of energy and certain telecommunications providers is anticipated to be revised under a companion bill that will preserve certain revenues for distribution to municipalities under a transition to competitive markets in energy and telecommunications that is to be implemented in this State. This bill will effectively guarantee to municipalities an annual State aid distribution of at least $730,000,000 from revenues from the taxes that will replace the public utilities franchise and gross receipts taxes and unit-based energy taxes.
The bill requires that these replacement revenues be credited to the "Energy Tax Receipts Property Tax Relief Fund," to be established in the State Treasury as a special dedicated fund. Of the $730,000,000, a portion approximating $700,000,000 will be allocated annually to provide each municipality with an amount not less than the largest annual amount it received from the distribution of $685,000,000 from the proceeds of the public utilities franchise and gross receipts taxes and unit-based energy 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 initially proposed for distribution in 1997. The $700,000,000 figure represents the total of the highest distributions paid to each municipality during those three calendar years or proposed to be paid in 1997, thereby guaranteeing that municipalities will not receive less than the highest amount received during that period. If the appropriation and distributions are not made by the State in this manner the State will forfeit the collection of corporation business tax liabilities from all corporate taxpayers that are not public utilities for that tax year.