[First Reprint]

SENATE, No. 1683

STATE OF NEW JERSEY

INTRODUCED NOVEMBER 7, 1996

By Senators CAFIERO, GORMLEY, DiFrancesco, O'Connor, Lynch and Adler

An Act concerning the imposition of certain taxes on retail receipts for the funding of the projects of certain tourism improvement and development authorities, amending P.L.1992, c.165 and supplementing P.L.1966, c.30.

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

    1. Section 4 of P.L.1992, c.165 (C.40:54D-4) is amended to read as follows:

    4. a. Two or more contiguous municipalities located in a county of the sixth class may, by ordinances of a substantially similar nature, create a tourism improvement and development district for the purpose of increasing public revenue and to levy taxes upon predominantly tourism related retail receipts at a rate not to exceed [2 percent] five percent, until certification by the director pursuant to subsection e. of section 9 of P.L.1992, c.165 (C.40:54D-9), and thereafter at a rate not to exceed 4 percent, and to devote the proceeds therefrom for the purposes herein described. For the same purposes, the ordinances establishing the district shall also provide for the imposition of tourism development fees authorized pursuant to section 15 of this act, P.L.1992, c.165 (C.40:54D-15). The taxes on predominantly tourism related retail receipts and tourism development fees so imposed shall be uniform throughout the district.

    b. Notwithstanding any other law to the contrary, ordinances so adopted shall not be subject to referenda, and shall not be altered or repealed, except by mutual action of all such municipalities. Each municipality which enters into the creation of the district shall covenant that the ordinance shall not be altered or repealed in such manner as to affect any bonds or other obligations pertaining to projects within the district which are outstanding.

    c. The district shall comprise all territory within the boundaries of the municipalities which create or enter into the district.

    d. A contiguous municipality located in a county of the sixth class may, by such an ordinance, and with the mutual consent of the governing bodies of the municipalities which created the district, enter into the district so created after the date of the district's creation.

    e. A copy of an ordinance adopted pursuant to this section shall be transmitted upon adoption or amendment to the State Treasurer. An ordinance so adopted or any amendment thereto shall provide that the retail receipts tax provisions of the ordinance or any amendment to the retail receipts tax provisions shall take effect on the first day of the first full month occurring 90 days after the date of transmittal to the State Treasurer.

(cf: P.L.1992, c.165, s.4)

    2. Section 9 of P.L.1992, c.165 (C.40:54D-9) is amended to read as follows:

    9. a. A vendor required to collect the tax upon predominantly tourism related retail receipts imposed pursuant to this act shall on or before the dates required pursuant to section 17 of P.L.1966, c.30 (C.54:32B-17), forward to the director the tax collected in the preceding month and make and file a return for the preceding month with the director on any form and containing any information as the Director of the Division of Taxation in the Department of the Treasury shall prescribe by rule or regulation as necessary to determine liability for the tax in the preceding month during which the person was required to collect the tax.

    b. The director may permit or require returns to be made covering other periods and upon any dates as the director may specify. In addition, the director may require payments of tax liability at any intervals and based upon any classifications as the director may designate. In prescribing any other periods to be covered by the return or intervals or classifications for payment of tax liability, the director may take into account the dollar volume of tax involved as well as the need for ensuring the prompt and orderly collection of the tax imposed.

    c. The director may require amended returns to be filed within 20 days after notice and to contain the information specified in the notice.

    d. The director shall inform the authority for each month in which this tax is collected and returns made of the amount so collected in each month.

    e. From the date that substantially similar amendments to municipal ordinances to increase the tax rate pursuant to P.L. , c. (C. ) (now pending before the Legislature as this bill), take effect in all municipalities in the district, the director shall maintain a running total of the amounts collected under the tax until such month as 20 percent of the amount collected under the increased tax rate equals the total amount collected under the tax during the time the tax was levied at a 2 percent rate pursuant to P.L.1992, c.165 (C.40:54D-1 et seq.). The director shall, within 10 days of the receipt of that amount of tax collected, certify to the governing body of each municipality in the district that such amount has been collected.

(cf: P.L.1992, c.165, s.9)

    ¹3. Section 14 of P.L.1992, c.165 (C. 40:54D-14) is amended to read as follows:

    14. a. Until such time as the conditions set forth in subsection b. of this section are met, the revenues deposited by the State Treasurer in the fund shall be applied for the purposes of financing the provision, advertising, promotion, improvement and operation of the tourism project within the district, and the acquisition, maintenance, operation and support of the tourism project designated by the authority authorized to undertake those activities pursuant to section 18 of this act, P.L.1992, c.165 (C.40:54D-18); provided however, that all funds derived from taxes upon predominantly tourism related retail receipts, to the extent that the revenues are derived from taxes imposed at rates in excess of 2 percent, shall be used solely for the costs of capital construction or for the issuance of bonds for the acquisition, construction, maintenance and operation of a capital construction project and the payment of interest and principal on such bonds.

    b. Commencing on that date which is the later of (1) July 1, 1993, or (2) six months prior to the first date on which any payment of principal or interest on any bonds or notes issued for, or any payment of rent under any lease entered into by the authority in connection with the acquisition, construction, reconstruction, maintenance, operation or support of a convention center facility or other tourism project to accomplish the purposes of the authority as set forth in section 21 of this act, P.L.1992, c.165 (C.40:54D-21), are required to be made from the revenues collected pursuant to section 4 of this act, P.L.1992, c.165 (C.40:54D-4), the revenues thereafter retained by the State Treasurer pursuant to section 12 of this act, P.L.1992, c.165 (C.40:54D-12), shall be applied exclusively in accordance with the provisions of the resolution or resolutions authorizing the issuance of bonds by the authority for that tourism project, to the payment of principal of and interest on bonds so issued, the maintenance of necessary reserves and the allocation of monies for future debt service payments. On that date which is the later date determined pursuant to paragraph 1 or 2 of this subsection, all monies then accumulated in the fund shall be removed by the State Treasurer and the proceeds, with the interest thereon, shall be used for any of the purposes set forth in subsection a. of this section.

    c. At the end of any full calendar year occurring after the date which is the later date determined pursuant to paragraph 1 or 2 of subsection b. of this section and after all payments coming due during that calendar year of principal and interest on authority bonds or notes issued for a tourism project have been made, and all obligations to the holders of those bonds have been met, including the maintenance of necessary reserves and the allocation of monies for future debt service payments, any balance remaining in the fund in that calendar year shall be applied to any deficiency between the operating expense budget and the anticipated operating revenues available for the following fiscal year to the entity operating the tourism project.

    d. At the end of each full calendar year occurring after the date which is the later date determined pursuant to paragraph 1 or 2 of subsection b. of this section and after all payments for that year have been made from the fund pursuant to subsections b. and c. of this section, any monies remaining in the fund in that calendar year shall be used for the purposes set forth in subsection a. of this section.

    e. Pending application to the purposes for which monies deposited in the fund may be used, the monies in the fund shall be invested by the State Treasurer pursuant to applicable regulations prescribed for the investment of State monies. Any income received from these investments shall be added to the fund from which earned, and used only for the purposes of the fund.¹

(cf: P.L.1992, c.165, s.14)

    ¹[3.] 4.¹ (New section) Receipts from sales of tangible personal property and services subject to a tax on predominantly tourism related retail receipts authorized by municipal ordinances which were adopted pursuant to P.L.1992, c.165 (C.40:54D-1 et seq.) are exempt from the tax rate imposed under the “Sales and Use Tax Act” to the extent that the tax rate imposed by the ordinances exceeds 2%.

    ¹[4.] 5.¹ This act shall take effect immediately.

Increases local share of State and local taxes on tourism related retail receipts in certain tourism improvement and development districts.