SENATE TRANSPORTATION COMMITTEE

STATEMENT TO

SENATE, No. 437

with committee amendments

STATE OF NEW JERSEY

DATED: FEBRUARY 22, 1996

      The Senate Transportation Committee favorably reports Senate Bill No. 437 with committee amendments.

      This amended bill increases payments in lieu of taxes for certain real property owned by the New Jersey Transit Corporation.

      Specifically, the bill requires that when a property owned by the New Jersey Transit Corporation within a municipality comprises 10 acres or more, and that property would represent 2% or more of the municipal tax base if it were subject to taxation, the tax assessor must file with the county board of taxation in each year, with the assessment list, a certification that the area of such property comprises 10 acres or more, and the property would represent 2% or more of the municipal tax base if it were subject to taxation. The certification must also contain a brief description of the property and a statement of the value of the property as it is valued on the list of exempt property. The county board of taxation must, as soon as is practicable after receiving the certification, estimate the sum of money which the municipality would have derived during the year as tax revenue for local purposes for such property if such property were not exempt from taxation, and must certify the amount to the clerk of the municipality. The clerk of the municipality must then forward the certification to the New Jersey Transit Corporation, and the corporation must annually pay that sum to the municipality, in two equal installments, on May 1 and November 1.

      The property that the New Jersey Transit Corporation owns is not taxable, and therefore the corporation currently pays to municipalities in which its property is located a payment in lieu of taxes, using information from the 1981 tax year. However, in many cases, the calculation of the in lieu payment using such old information does not provide an adequate payment to a municipality for the actual cost of the municipal services used by the property, such as police and fire protection and the cost of municipal courts. This difference is assumed by the regular municipal property taxpayers. The impact on individual municipal taxpayers is especially acute in communities where transit property represents a significant portion of the municipality. Transit property which represents 10 acres or more of the total municipal acreage, and which, if taxable, would represent 2% or more of the total municipal tax base, is significant in size. The provisions of this amended bill would require the New Jersey Transit Corporation to pay an additional amount to the local community more in line with the value of the property and would serve to defray the costs of all municipal services by the municipality to the New Jersey Transit Corporation facilities falling under the provisions of this bill.

      The committee amended the bill by providing that "property" rather than "lands" would be used by the county board of taxation to certify the amount due, thereby making that provision consistent with the rest of the bill.