A2968

ASSEMBLY, No. 2968

STATE OF NEW JERSEY

INTRODUCED MAY 12, 1997

By Assemblymen ASSELTA, GIBSON, Augustine and Bagger

An Act authorizing municipalities to establish downtown business improvement zones under certain circumstances and supplementing P.L.1972, c.134 (C.40:56-65 et seq.).

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

1. As used in this act:

"Administering entity" means any entity designated by a municipality pursuant to P.L.1972, c.134 (C.40:56-65 et seq.) to administer a special improvement district established pursuant to P.L.1972, c.134 (C.40:56-65 et seq.).

"Downtown business improvement zone" or "zone" means a zone designated by a municipality, by ordinance, pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) in order to promote the economic revitalization of the municipality through the encouragement of business improvement within the downtown area.

"Downtown business improvement fund" or "fund" means that fund established by the State Treasurer pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) into which shall be deposited those revenues received from the taxation of retail sales within a zone, as specified pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).

"Eligible services" means any service which by law may be performed by a municipality or administering entity, as the case may be, including but not limited to, generic marketing administration, business retention and business recruitment services and the acquisition by purchase or lease of any equipment reasonably necessary to accomplish the foregoing; provided, however, that eligible services shall not include any marketing of any individual business nor shall it include any service performed by the municipality for all properties within and without a downtown business improvement zone.

"Project" means the purchasing, leasing, condemning, or otherwise acquiring of land or other property, or an interest therein, in the downtown business improvement zone or as necessary for a right-of-way or other easement to or from the zone; the relocating and moving of persons displaced by the acquisition of land or property; the rehabilitation and redevelopment of land or property, including demolition, clearance, removal, relocation, renovation, alteration, construction, reconstruction, installation or repair of land or a building, street, highway, alley, utility, service or other structure or improvement; the acquisition, construction, reconstruction, rehabilitation, or installation of parking and other public facilities and improvements, except buildings and facilities for the general conduct of government and schools; and the costs associated therewith including the costs of an administrative appraisal, economic and environmental analyses or engineering, planning, design, architectural, surveying or other professional services necessary to effectuate the project.

2. With the exception of a municipality in which an urban enterprise zone has been designated, any municipality which has adopted or adopts an ordinance authorizing the establishment of a special improvement district pursuant to section 7 of P.L.1972, c.134 (C.40:56-71) may, by ordinance, designate all or any portion of that district which contains primarily businesses providing retail goods and services as a "downtown business improvement zone." Any municipality which so establishes a downtown business improvement zone may authorize an administering entity to receive funds generated in the zone pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) in order to manage public improvement within the zone and otherwise carry out the functions and responsibilities set forth herein. In addition, a municipality which has not adopted or is not eligible to adopt an ordinance authorizing the establishment of a special improvement district pursuant to section 7 of P.L.1972, c.134 (C.40:56-71) may, by ordinance, designate all or any portion of the municipality which contains primarily businesses providing retail goods and services as a "downtown business improvement zone" if the municipality has located within its borders an abandoned or closed underground or surface commercial mine or quarry.

Within 10 business days of the adoption of an ordinance pursuant to this section, the municipal clerk shall forward a copy of the ordinance to the Director of the Division of Taxation in the Department of the Treasury and to the Director of the Division of Local Government Services in the Department of Community Affairs.

3. Notwithstanding any provisions of law to the contrary, all revenues received pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) from the taxation of retail sales of tangible personal property and services originating from and delivered from business locations in a downtown business improvement zone shall be deposited immediately upon collection by the Department of the Treasury, as follows:

a. In the first five-year period following adoption by the municipality of an ordinance establishing the downtown business improvement zone, 1/6 of all revenues received from the taxation of retail sales in the zone, but not more than $100,000 per year, shall be deposited in the downtown business improvement fund created pursuant to section 4 of P.L. , c. (C. ( pending before the Legislature as this bill), and the balance shall be deposited in the General Fund;

b. In the second five-year period following adoption by the municipality of an ordinance establishing the downtown business improvement zone, 2/18 of all revenues received from the taxation of retail sales in the zone, but not more than $50,000 per year, shall be deposited in the downtown business improvement fund, and the balance shall be deposited in the General Fund;

c. In the third five-year period following adoption by the municipality of an ordinance establishing the downtown business improvement zone, 1/18 of all revenues from the taxation of retail sales in the zone, but not more than $25,000 per year, shall be deposited in the downtown business improvement fund, and the balance shall be deposited in the General Fund;

d. Thereafter, all revenues received from the taxation of retail sales in the zone shall be deposited in the General Fund.

The revenues required to be deposited in the downtown business improvement fund under this section shall be used for the purposes of that fund and for the uses prescribed in section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill), subject to annual appropriations being made for those purposes and uses.

4. There is created a downtown business improvement fund to be held by the State Treasurer, which shall be the repository for all moneys required to be deposited therein under section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) or moneys appropriated annually to the fund. All moneys deposited in the fund shall be held and disbursed in the amounts necessary to fulfill the purposes of this act and subject to the requirements prescribed in this act . The State Treasurer may invest and reinvest any moneys in the fund, or any portion thereof, in legal obligations of the United States or of the State or of any political subdivision thereof. Any income from, interest on, or increment to moneys so invested or reinvested shall be included in the fund.

5. The State Treasurer shall maintain separate accounts for each downtown business improvement zone designated under this act, and shall credit to each account an amount of the moneys deposited in the fund equal to the amount of revenues collected from the taxation of retail sales made in the zone, as provided in section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), and appropriated to the downtown business improvement zone, or that amount of moneys appropriated to the fund and required to be credited to the downtown business improvement fund account of the municipality which created the downtown business improvement zone.

The State Treasurer shall promulgate such rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as are necessary to govern the administration of the fund for the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill)

6. a. The downtown business improvement fund shall be used for the purpose of assisting municipalities which establish downtown business improvement zones and administering entities, if any, which manage such zones in undertaking public improvements and in providing eligible services to the zone.

b. The governing body of a municipality in which a zone is designated and an administering entity, if any, which manages that zone, by resolution, may propose to undertake a project for the public improvement of the zone or to provide eligible services to the zone, and to fund that project or those eligible services from moneys deposited in the downtown business improvement fund and credited to the account maintained by the State Treasurer for that zone.

Nothing herein or in P.L.1972, c.134 (C.40:56-65 et seq.) shall be construed to prohibit a governing body of a municipality and an administering entity, if any, from utilizing those moneys raised through the imposition of a special assessment pursuant to P.L.1972, c.134 (C.40:56-65 et seq.) toward the municipality's or administering entity's share of the annual payments for any project or eligible service, as required pursuant to section 7 of P.L. , c. (C. )(pending before the Legislature as this bill).

The proposal so adopted by the municipality and the administering entity, if any, shall set forth a plan for the project or for eligible services and shall include:

(1) A description of the proposed project or of the eligible services to be provided;

(2) An estimate of the total project costs, or of the total costs of eligible services, and an estimate of the amounts of funding necessary annually from the account;

(3) A statement of any other revenue sources to be used to finance the project or to fund the cost of eligible services;

(4) A statement of the time necessary to complete the project, or of the time during which the eligible services are to be maintained; and

(5) A statement of the manner in which the proposed project or the eligible services further the municipality's policy and intentions for addressing the economic conditions existing in the zone.

7. Upon adoption by the governing body of the municipality and by the administering entity, if any, the proposal shall be sent to the Department of Community Affairs, Division of Housing and Community Development for its evaluation and approval. The Department of Community Affairs shall approve the proposal if it shall find:

a. In the case of a project, that the proposed project furthers the policy and intentions behind the establishment of the zone; that the municipality and the administering entity, if any, shall annually appropriate for the project an amount of not less than 50% of the amount of the annual payments for the project; that the estimated annual payments for the proposed project from the downtown business improvement fund account are not likely to result in a deficit in that account; and that the estimated annual payments for the proposed project from the downtown business improvement fund account shall not be used for administrative purposes; and

b. In the case of funding for eligible services, that the proposal furthers the policy and intentions behind the establishment of the zone; that the municipality has furnished satisfactory assurances that the proposed services or equipment shall augment or upgrade services in the zone, and shall not be used in other areas of the municipality; that the municipality and the administering entity, if any, shall annually appropriate for the eligible services an amount of not less than 50% of the amount of the annual payments for those services and that the estimated annual payments for the eligible services from the account to which the proposal pertains are not likely to result in a deficit in that account.

8. The Department of Community Affairs shall approve the proposal if it meets the standards established in section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill). Upon approval, the department shall annually, upon its receipt of a written statement from the governing body of the municipality or the administering entity, if any, certify to the State Treasurer the amount to be paid in that year from the account in the downtown business improvement fund with respect to each project or eligible services approved. The department may, at any time, revoke its approval of a project or for funding eligible services if it finds that the annual payments made from the fund are not being used as required by this act.

9. Upon certification by the Department of Community Affairs of the amount to be paid to a municipality or the administering entity, if any, with respect to any project or eligible services, the State Treasurer shall pay to the municipality or the administering entity, if any and if the entity is so designated to receive the funds, that amount approved by the Commissioner of Community Affairs within the limits of the amounts credited to the downtown business improvement account of the municipality.

10. This act shall take effect on the 60th day next following enactment.

STATEMENT

This bill authorizes any municipality that has established a special improvement district (pursuant to section 7 of P.L.1972, c.134; C.40:56-71) or a municipality with an abandoned or closed under ground or surface mine or quarry to designate an area primarily composed of retail businesses or services as a "downtown business improvement zone." This bill will not apply to municipalities in which an urban enterprise zone has been designated,

Within a downtown business improvement zone, the municipality would receive a declining share of certain sales tax proceeds over a 15-year period. In the first five years following designation of the zone, 1/6 of all sales tax revenues generated from sales and services originating from and delivered from within the zone, but not more than $100,000 per year, would be set aside in a special zone fund to be used for projects or increased services to further public improvement within the zone. In the second five-year period, 2/18 of such sales tax revenues, but not more than $50,000 per year, would be directed into the special fund, and in the third five-year period, 1/18 of such sales tax revenues, but not more than $25,000 per year, would be directed into the special fund. Those funds not collected for the special fund would continue to be deposited into the General Fund.

The State Treasurer would be the repository for all moneys collected for deposit into the downtown business improvement fund. In order to receive funding for projects or services out of the fund, the governing body of any municipality that has created a zone, and an administering entity, if any, which manages it, would be required to develop a proposal outlining a plan for a project or eligible services. The bill sets forth five requirements for a proposal, which include a description of the proposed project or services, an estimate of the total costs of the project or services, and a statement of other revenue sources to be used to finance the project or services.

Upon adoption of the proposal by the governing body and the administering entity, if any, the proposal would be sent to the Division of Housing and Community Development at the Department of Community Affairs for evaluation and approval. The bill sets forth the criteria that the department is to use to evaluate such proposals.

The services and projects provided for under the bill range from general marketing, business retention and recruitment services to a wide variety of capital improvements to make a zone more attractive and accessible.

Authorizes municipalities to establish downtown business improvement zones and sharing of retail sales tax proceeds therein.