SENATE, No. 1279

STATE OF NEW JERSEY

INTRODUCED JUNE 3, 1996

By Senator KENNY

An Act appropriating certain public utility taxes for a supplemental distribution to municipalities during fiscal year 1996, amending P.L.1995, 164.

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

    1. The following provision in section 1 of P.L.1995, c.164, the Fiscal Year 1996 annual appropriations act, is amended to read as follows:

STATE AID

 82 DEPARTMENT OF TREASURY

70 Government Direction, Management and Control

75 State Subsidies and Financial Aid -- State Aid

Notwithstanding the provisions of section 2 of P.L.1980, c.10 (C.54:30A-24.1), section 4 of P.L.1980, c.11 (C.54:30A-61.1), section 27 of P.L.1991, c.184 (C.54:30A-24.4), and section 28 of P.L.1991, c.184 (C.54:30A-61.4), the payments to municipalities from the proceeds of the public utilities franchise and gross receipts taxes during fiscal year 1996 shall be $685,000,000 and shall be distributed in the same amounts to the same municipalities as received such payments in calendar year 1994 pursuant to the 1995 annual appropriations law, P.L.1994, c.67; provided however, that amounts collected in excess of amounts distributed shall be anticipated as revenue for general State purposes.

Notwithstanding any provision of law to the contrary, the payments to municipalities from the proceeds of the public utilities franchise and gross receipts taxes shall be distributed on the following schedule: July 15, 35% of the total amount due; August 1, 10% of the total amount due; September 1, 30% of the total amount due; October 1, 15% of the total amount due; November 1, 5% of the total amount due; and December 1, 5% of the total amount due.

[Based upon the State's fiscal circumstances in May, 1996, amounts] Amounts collected in excess of $960,000,000 from Public Utility Gross Receipts and Franchise Taxes (combined) for fiscal year 1996 [may be distributed to municipalities; provided that such amounts collected in excess of $960,000,000 shall not be anticipated as municipal revenue for the purposes of the "Local Budget Law", P.L.1960, c.169 (C.40A:4-1 et seq.)] are appropriated as supplementary payments to municipalities and shall be distributed on or before June 30, 1996 in proportion to the amount of the payment each municipality received during Fiscal Year 1996 from the $685,000,000 distribution. A supplementary payment shall be used solely and exclusively by each municipality for the purpose of reducing the amount the municipality is required to raise by local property tax levy for municipal purposes. If the amount of the supplementary payment exceeds the amount required to be raised by local property tax levy for municipal purposes, the balance of the supplementary payment shall be used to reduce the amount the municipality is required to raise for county purposes, notwithstanding the provisions of law to the contrary. Notwithstanding any provisions of the "Local Budget Law," N.J.S.40A:4-1 et seq., each municipality may anticipate the receipt of the amount of supplementary payment as shall be certified to it by the Director of the Division of Taxation in the Department of the Treasury and shall file any amendment or correction in its local budget as may be required to properly reflect that payment. The Director of the Division of Taxation shall provide the Director of the Division of Local Government Services in the Department of Community Affairs with a list of the certified supplementary payments for all affected municipalities. The Director of the Division of Local Government Services in the Department of Community Affairs shall certify that each municipality has complied with the requirements set forth herein concerning the use of the supplementary payments.

(cf: P.L.1995, c.164, s.1)

    2. This act shall take effect immediately.

STATEMENT

    This bill requires the State to make an additional distribution of public utilities gross receipts and franchise taxes revenue during Fiscal Year 1996. The amount of the distribution is equal to the amount by which collections of these taxes have exceeded the State anticipated retention of $275 million plus the $685 million previously apportioned for distribution to municipalities during Fiscal Year 1996. In statements to the Senate Budget and Appropriations Committee and the Assembly Appropriations Committee on April 2, and May 22, 1996, the State Treasurer indicated that the State estimates this amount to be $45 million.

    The distribution of the additional collections is to be made in proportion to the municipal distributions made from the $685,000,000 apportioned and paid earlier in the fiscal year. The supplementary distribution is required to be used by the recipient municipalities to reduce the local municipal property tax levy, which shall be reflected as a change in the municipal budget. The distribution method is identical to the method used to distribute the fiscal year 1995 supplementary distribution.

Appropriates FY1996 public utilities gross receipts and franchise taxes in excess of $960,000,000.