SENATE, No. 113
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Senators CIESLA and MATHEUSSEN
An Act consolidating the distribution of certain State aid for municipalities into an annual block grant program, supplementing Title 52 of the Revised Statutes, amending P.L.1976, c.68 and repealing parts of statutory law.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) This act shall be known and may be cited as the "Municipal Aid Consolidation Block Grant Act."
2. (New section) a. The Director of the Division of Local Government Services in the Department of Community Affairs shall annually distribute State aid to a municipality that received State aid for calendar years 1991, 1992, 1993 or 1994 pursuant to any of the following acts and programs:
(1) Business personal property tax replacement program, P.L.1966, c.135 (C.54:11D-1 et seq.);
(2) Class II railroad property aid program, sections 19 through 24 of P.L.1966, c.139 (C.54:29A-24.1 et seq.);
(3) State aid to densely populated municipalities program, P.L.1990, c.85 (C.52:27D-384 et seq.);
(4) Aid to depressed rural centers program, P.L.1977, c.260 (C.52:27D-162 et seq.);
(5) Legislative Initiative Municipal Block Grant Program appropriation distributed by the Department of Community Affairs pursuant to P.L.1994, c.67 and P.L.1994, c.68;
(6) Payments to municipalities to replace franchise tax on certain telecommunications carriers program, subsection b. of section 5 of P.L.1989, c.2 (C.54:30A-24.2);
(7) "Safe and Clean Neighborhoods Act of 1979," P.L.1979, c.118 (C.52:27D-118.1 et seq.);
(8) Supplementary aid for fire services program, P.L.1985, c.295 (C.52:27D-118.17 et seq.);
(9) Safe and clean neighborhoods program: expanded police services, P.L.1985, c.170 (C.52:27D-118.11 et seq.);
(10) "Supplemental Municipal Property Tax Relief Act" - Additional Municipal Aid appropriations;
(11) "Supplemental Municipal Property Tax Relief Act" - formula aid program, section 5 of P.L.1991, c.63 (C.52:27D-118.34; and "Supplemental Municipal Property Tax Relief Act" - Hold Harmless Formula Aid appropriations; or
(12) Municipal urban aid program, P.L.1978, c.14 (C.52:27D-178 et seq.) in an amount equal to the largest annual total amount received by that municipality for these aid programs for either calendar year 1991, 1992, 1993 or 1994;
b. Provided however, that the amount for paragraph (11) of subsection a. of this section for calendar year 1994 shall include the amount of the Health Insurance Premium Rebate Offset and Savings from Pension Fund Changes used to reduce the payment of certain municipal aid pursuant to P.L.1994, c.67, the fiscal year 1995 annual appropriations act; and,
c. Provided further, however, that for paragraph (8) of subsection a. of this section, the amount of aid received by a municipality shall include amounts apportioned to a municipality and paid to a fire district in such municipality.
3. (New section) The Legislature shall annually appropriate the amount necessary to fund the municipal aid consolidation block grants to be distributed pursuant to section 2 of P.L....., c..... (C....) (Now pending before the Legislature as this bill).
4. (New section) Aid distributed to a municipality pursuant to section 2 of P.L....., c..... (C....) (Now pending before the Legislature as this bill), may be anticipated in any amount up to the maximum amount of that aid to be distributed to the municipality in compliance with the "Local Budget Law," N.J.S.40A:4-1 et seq.
5. (New section) On or before July 15 annually, and after enactment of the annual State appropriations act, the Director of the Division of Local Government Services in the Department of Community Affairs shall certify to each municipality eligible for a municipal aid consolidation block grant the amount of the block grant to be paid to the municipality and the actual dates that payments of the block grant amount will be made. The amount of the municipal aid consolidation block grant to be paid to each municipality shall be distributed in six equal monthly payments on or before the 30th day of the month in each of the last six months of the calendar year. The division shall, in so far as may be practicable, make the payments by means of electronic funds transfer to such depository as each municipality shall designate subject to such electronic funds transfer requirements as shall be prescribed by the director.
6. (New section) No appeal or review may be taken by any person or any municipality with respect to any of the provisions of this act except in the case of an arithmetical or typographical error in the calculation of the distribution of aid hereunder.
7. (New section) Notwithstanding the provisions of any law to the contrary, a municipality shall appropriate and pay to a fire district responsible for providing fire protection in the municipality an amount equal to the amount paid to that fire district pursuant to P.L.1985, c.295 (C.52:27D-118.17 et seq.), during the calendar year used to determine total aid pursuant to section 2 of P.L....., c..... (C....) (Now pending before the Legislature as this bill).
8. Section 2 of P.L.1976, c.68 (C.40A:4-45.2) is amended to read as follows:
2. Beginning with the tax year 1991 municipalities, other than those having a municipal purposes tax rate of $0.10 or less per $100.00, and counties shall be prohibited from increasing their final appropriations by more than 5% or the index rate, whichever is less, over the previous year, except within the provisions set forth hereunder.
For the purpose of this section, in computing its final appropriations for the previous year, a municipality or county shall include, as part of its final appropriations:
a. Amounts of revenue generated by an increase in its valuations based solely on applying the preceding year's local purposes tax rate of the municipality to the assessed value of new construction or improvements, or on applying the preceding year's county tax rate to the apportionment valuation of new construction or improvements, as may be appropriate;
b. (Deleted by amendment, P.L.1990, c.89.)
c. Amounts approved by referendum, pursuant to section 1 of P.L.1979, c.268 (C.40A:4-45.3a) and section 2 of P.L.1983, c.312 (C.40A:4-45.19);
d. (Deleted by amendment, P.L.1990, c.89.)
e. Expenditures for the assumption of any service or function of a local public utility, a local public authority, or a special purposes district, as approved by the Local Finance Board pursuant to section 3 of P.L.1983, c.49 (C.40A:4-45.13);
f. Any amounts expended to offset the revenue or matching funds provided in the calendar year prior to the first year in which a municipal aid consolidated block grant is received under an aid program repealed by P.L. ...., c. .... (C. ...) (Now pending before the Legislature as this bill).
For the 1991 local budget year, the final appropriations from the prior year shall be the total appropriations for the 1990 budget year. In each local budget year in which any service, function, or portion thereof, is transferred to, or assumed by, the State or federal government from a municipal government, the municipality shall deduct from its final appropriations upon which its permissible expenditures are calculated the amount which the municipality expended for that service or function during the last full budget year, or portion thereof, throughout which the service or function so transferred was funded from appropriations in the municipal budget.
In each budget year subsequent to 1990, whenever any municipality shall have transferred to any local public utility, any local public authority or any special purposes district, during the immediately preceding budget year, or at any time during the current budget year prior to the final adoption of the budget, any service or function funded during the immediately preceding budget year, either partially or wholly, from appropriations in the municipal budget, the municipality shall deduct from its final appropriations upon which its permissible expenditures are calculated pursuant to this section the amount which the municipality expended for that service or function during the last full budget year throughout which the service or function so transferred was funded from appropriations in the municipal budget.
(cf: P.L.1990, c.89, s.1)
9. (New section) For the purposes of the "Special Municipal Aid Act," P.L.1987, c.75 (C.52:27D-118.24 et seq.), and any other law referring to a "qualifying municipality" pursuant to section 1 of P.L.1978, c.14 (C.52:27D-178), a municipality which is qualified to receive assistance under P.L.1978, c.14, or an urban aid municipality, unless the context clearly indicates otherwise, such reference shall mean a qualifying municipality as defined in this section, where:
"ADC children" means the number of children between the ages of five and 17 years in the municipality enrolled in the Aid to Dependent Children Program, as made available by the Division of Family Development in the Department of Human Services for the base year in the publication "State of New Jersey, ADC Data Needed to Implement Public Law 89-10, the Elementary and Secondary Education Act of 1965."
"Base year" means the second year preceding the last annual apportionment of State aid pursuant to P.L.1978, c.14 (C.52:27D-178 et seq.).
"Director" means the Director of the Division of Local Government Services in the Department of Community Affairs.
"Equalization ratio" means the ratio of assessed value to true value of real property as published in the Certification of Table of Equalized Valuations̓by the Director of the Division of Taxation for the base year pursuant to P.L.1954, c.86, s.1 (C.54:1-35.1).
"Equalized tax rate" means the general tax rate multiplied by the equalization ratio.
"Equalized valuation" means net valuation taxable divided by the equalization ratio.
"General tax rate" means the tax rate for local taxing purposes as defined in R.S.54:4-52 and as expressed in column 7 of the Table of Aggregates for the base year.
"Municipal equalized valuation per capita" means a municipality's equalized valuation divided by the population of the municipality.
"Net valuation taxable" means the total value of property on which the general tax rate is computed as expressed in column 6 of the Table of Aggregates̓pursuant to R.S.54:4-52 for the base year.
"Population" means the official population count of the State of New Jersey for the base year as reported by the New Jersey Department of Labor, Office of Demographic and Economic Analysis.
"Publicly financed housing" means any dwelling unit constructed and operated under any of the following Federal and State housing programs:
(a) Any dwelling unit constructed under grants or mortgage financing of the New Jersey Housing Finance Agency.
(b) Any dwelling unit constructed under the following sections of the National Housing Act (Pub.L. 73-479) as amended and supplemented: section 221(d)(3) as added to by the Housing Act of 1961 (Pub.L. 87-70) and as subsequently amended; section 236 as added to by the Housing and Urban Development Act of 1968 (Pub.L. 90-448) and as subsequently amended; section 202, Housing Act of 1959 (Pub.L. 86-372) and as subsequently amended; section 221-H, as added by the Demonstration Cities and Metropolitan Development Act of 1966 (Pub.L. 89-754) and as subsequently amended.
(c) Any dwelling unit constructed or operated under the United States Housing Act of 1937 (Pub.L. 75-412) and as subsequently added to and amended.
"Qualifying municipality" means a municipality in which:
The number of ADC children exceeds 250, except when the municipality's population exceeds 20,000 with a density exceeding 7,000 per square mile and the municipality's equalized valuation per capita is less than the State equalized valuation per capita by $4,500 or more, and
There exists, in the case of a municipality with a population exceeding 15,000, publicly financed housing, and
The municipality's equalized tax rate exceeds the State equalized tax rate, or the municipality's equalized valuation per capita is less than the State equalized valuation per capita by $2,000 or more and its population exceeds 25,000, and
The municipality's equalized valuation per capita is less than the State equalized valuation per capita or the municipality's equalized tax rate exceeds the State equalized tax rate by $0.75 or more.
"State equalized tax rate" means the sum of the total levies on which the tax rates for all the municipalities of the State are computed divided by the sum of the equalized valuations of all the municipalities of the State for the base year.
"State equalized valuation per capita" means the sum of the equalized valuations of all the municipalities of the State divided by the population of the State.
10. The following are repealed:
Sections 1 through 9 of P.L.1966, c.135 (C.54:11D-1 through 54:11D-9);
Sections 19 through 24 of P.L.1966, c.139 (C.54:29A-24.1 through 54:29A-24.6);
Sections 1 through 11 of P.L.1990, c.85 (C.52:27D-384 through 52:27D-394);
Sections 1 through 8 of P.L.1977, c.260 (C.52:27D-162 through 52:27D-169);
Section 5 of P.L.1989, c.2 (C.54:30A-24.2);
Sections 1 through 10 of P.L.1979, c.118 (C.52:27D-118.1 through 52:27D-118.10);
Sections 1 through 6 of P.L.1985, c.170 (C.52:27D-118.11 through 52:27D-118.16);
Sections 1 through 7 of P.L.1985, c.295 (C.52:27D-118.17 through 52:27D-118.23);
Section 3 of P.L.1991, c.63 (C.52:27D-118.34); and
Sections 1 through 4 of P.L.1978, c.14 (C.52:27D-178 through 52:27D-181);
11. This act shall take effect July 1, 1995, and shall apply to State aid payments made on and after that date.
STATEMENT
This bill, which implements a recommendation of the Senate Bipartisan Task Force on Municipal Aid Reform, consolidates twelve State aid programs and holds each municipality that received aid under any of those programs during calendar years 1991, 1992, 1993 or 1994 harmless against loss in the amount of annual State aid it will receive under the new replacement program designated the Municipal Aid Consolidation Block Grant Act. Each municipality that received State aid during calendar years 1991, 1992, 1993 or 1994 from any of the consolidated aid programs will receive an annual block grant distribution in an amount equal to the largest annual total amount received for those calendar years by that municipality for the consolidated programs. The aid programs being consolidated have either had stable distributions for a number of years, have experienced minimal changes in amounts distributed among municipalities from year to year, or are block grants themselves. The State aid programs included for consolidation and the total amounts distributed in calendar year 1994 are as follows:
Business Personal Property Tax
Replacement program 158,703,834
Class II Railroad Property 809,000
Densely Populated Municipalities 25,000,000
Depressed Rural Centers 518,000
Legislative Initiative Municipal Block
Grant-Per Capita Aid 33,000,000
Payments to Replace Telecommunications Tax 6,500,000
Safe and Clean Neighborhoods 26,352,724
Supplemental Safe and Clean-Fire Services 8,000,000
Supplemental Safe and Clean-Expanded Police 24,537,269
SMPTR-Additional Urban Aid 25,000,000
SMPTR-Formula and Hold Harmless Aid 314,179,566
Municipal (Urban) Aid 40,728,053
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Total Aid Distributed CY 1994 $663,328,446
No municipality will lose State aid under the new Municipal Aid Consolidation Block Grant Act. The distribution of $663,437,369 under this program will be $108,923 more than was distributed under all the consolidated aid programs in calendar year 1994. However, the administrative savings that will be gained from consolidating these programs, many of which require municipal applications and review by either the Division of Local Government Services in the Department of Community Affairs or the Department of the Treasury, will at least offset the additional aid distribution.
Under this bill, each municipality will be able to anticipate stable funding, maintain a single budgetary account rather than twelve accounts, file no applications with the State in order to receive these funds, and decide locally how best to use these block grant funds.
"Municipal Aid Consolidation Block Grant Act."