SENATE, No. 416

 

STATE OF NEW JERSEY

 

INTRODUCED JANUARY 18, 1996

 

 

By Senators LaROSSA and INVERSO

 

 

An Act concerning payments in lieu of taxes by certain State authorities 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:

    a. "Bond or note" means any bond or note issued by a State authority that is outstanding and unpaid on the effective date of this act;

    b. "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;

    c. "Pretax year" means the calendar year immediately preceding the tax year;

    d. "Qualified State property" means property subject to payments in lieu of property taxes pursuant to the provisions of P.L.1977, c.272 (C.54:4-2.2a et seq.);

    e. "Qualified authority property" means qualified State property acquired in one or more transactions by a State authority, within a municipality, on and after January 1, 1991, or other property of the authority which is exempt from all taxes and special assessments of the State or any political subdivision thereof;

    f. "State authority" means a body, public and corporate, created by law, which law provides that the public body so created has at least the power to:

    (1) sue and be sued;

    (2) acquire and hold real or personal property for its purposes; and

    (3) provide for and secure the payment of its bonds or other obligations, or impose charges for the use of its facilities, or any combination thereof; and

    g. "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 State authority shall, for each local tax year beginning on and after the effective date of this act, make annual payments in lieu of taxes, in accordance with the provisions of section 3 of this act, to each municipality in which qualified authority property is located. The payments in lieu of taxes required by this section shall not apply to:

    a. a State authority that is subject to the provisions of existing bondholder agreements in its bonds or notes which prohibit payments in lieu of taxes to municipalities; or

    b. a State authority that is subject to an agreement entered into with a municipality which provides for payments in lieu of taxes to a municipality in an amount which exceeds the amount that would otherwise be due pursuant to the provisions of section 3 of this act.

 

    3. The amount of the payments in lieu of taxes to be made by a State authority to each municipality, in which qualified authority property is located, shall be computed in each year by the tax collector for each municipality by multiplying the taxable value of the qualified authority property located within the municipality, as determined pursuant to section 3 of P.L.1977, c.272 (C.54:4-2.2c) or R.S.54:4-27, as appropriate, for the pretax year times the effective municipal purposes tax rate for the municipality for the pretax year. The resulting amount shall be collected from the pertinent authority in two annual installments, at the same times, and in the same manner as the third and fourth quarterly installments of property taxes in the municipality, pursuant to chapter 4 of Title 54 of the Revised Statutes. Delinquent payments in lieu of property taxes shall be considered delinquent taxes for the purposes of chapters 4 and 5 of Title 54 of the Revised Statutes.

 

    4. Nothing in this act shall be construed as abrogating or requiring the abrogation of any agreement between a State authority and a municipality, entered into on or prior to the effective date of this act, for any payments in lieu of property taxes on qualified authority property which exceed the amounts that would otherwise be due pursuant to the provisions of section 3 of this act; nor shall this act be construed as prohibiting such agreements on and after the effective date of this act.

 

    5. Any new series of bonds or refunding bonds issued by or on behalf of a State authority, after the effective date of this act, shall be null and void, if the bondholder agreements prohibit payments in lieu of property taxes to a municipality in which qualified authority property is located.

 

    6. 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 provides that a State authority shall make payments in lieu of property taxes, in accordance with section 3 of the bill, for State-owned property acquired by the authority or other tax-exempt authority property, for each local tax year beginning on or after the effective date of the bill, unless: (1) the authority's bondholder agreements in currently outstanding and unpaid bonds or notes prohibit such payments; or (2) the authority is subject to agreements which require payments in lieu of taxes exceeding the amount which would otherwise be due under section 3 of this bill.

    This bill further provides that it shall not be construed to abrogate any agreements entered into on or before the effective date of the bill, between a State authority and a municipality, to make payments in lieu of property taxes on qualified authority property which exceed the amounts which would otherwise be due under section 3 of this bill. The bill also permits such agreements on and after the effective date of this bill.

    The bill also provides that any new or refunded bonds of a State authority shall be declared null and void if the bondholder agreements prohibit payments in lieu of property taxes to municipalities in which qualified authority property is located.

 

 

                             

 

Requires State authorities to make payments in lieu of taxes to municipalities where qualified authority property is located.