[Second Reprint]

SENATE, No. 1843

STATE OF NEW JERSEY

INTRODUCED JANUARY 29, 1997

By Senators SCOTT and Bark

An Act authorizing municipalities to establish downtown business improvement zones under certain circumstances and supplementing ²[chapter 27D of Title 52 of the Revised Statutes] P.L.1972, c.134 (C.40:56-65 et seq.)².

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

    1. As used in this act:

    ²"Administering entity" means any entity designated by a municipality pursuant to P.L.1972, c.134 (C.40:56-65 et seq.) to administer a special improvement district established pursuant to P.L.1972, c.134 (C.40:56-65 et seq.).²

    "Downtown business improvement zone" or "zone" means a zone ¹[established] designated¹ by a municipality, by ordinance, pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) in order to promote the economic revitalization of the municipality through the encouragement of business improvement within the downtown area.

    "Downtown business improvement fund" or "fund" means that fund established by the State Treasurer pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) into which shall be deposited those revenues ¹received¹ from ¹the taxation of¹ retail sales ¹[collected]¹ within a zone, as specified pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).

    "Eligible services" means any service which by law may be performed by a ²[district management corporation] municipality or administering entity, as the case may be², including but not limited²[,]² to² ,² generic marketing administration, business retention and business recruitment services and the acquisition by purchase or lease of any equipment reasonably necessary to accomplish the foregoing; provided, however, that eligible services shall not include any marketing of any individual business nor shall it include any service performed by the municipality for all properties within and without ²[of]² a downtown business improvement zone.

    "Project" means the purchasing, leasing, condemning, or otherwise acquiring of land or other property, or an interest therein, in the downtown business improvement zone or as necessary for a right-of-way or other easement to or from the zone²[,] ;² the relocating and moving of persons displaced by the acquisition of land or property; the rehabilitation and redevelopment of land or property, including demolition, clearance, removal, relocation, renovation, alteration, construction, reconstruction, installation or repair of land or a building, street, highway, alley, utility, service or other structure or improvement; the acquisition, construction, reconstruction, rehabilitation, or installation of parking and other public facilities and improvements, except buildings and facilities for the general conduct of government and schools; and the costs associated therewith including the costs of an administrative appraisal, economic and environmental analyses or engineering, planning, design, architectural, surveying or other professional services necessary to effectuate the project.

    2. ¹[Any] With the exception of a municipality in which an urban enterprise zone has been designated, any¹ municipality which has adopted ² or adopts² an ordinance authorizing the establishment of a special improvement district pursuant to section 7 of P.L.1972, c.134 (C.40:56-71) may, by ordinance, designate all or any portion of that district which contains ²[a significant number of] primarily ² businesses providing retail goods and services as a "downtown business improvement zone." Any municipality which so establishes a downtown business improvement zone may authorize ²[a district management corporation established pursuant to municipal ordinance or incorporated pursuant to Title 15A of the New Jersey Statutes] an administering entity² to receive funds generated in the zone pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) in order to manage public improvement within the zone and otherwise carry out the functions and responsibilities set forth herein. ²In addition, a municipality which has not adopted or is not eligible to adopt an ordinance authorizing the establishment of a special improvement district pursuant to section 7 of P.L.1972, c.134 (C.40:56-71) may, by ordinance, designate all or any portion of the municipality which contains primarily businesses providing retail goods and services as a "downtown business improvement zone" if the municipality has located within its borders an abadoned or closed underground or surface commercial mine or quarry.²

    ¹Within 10 business days of the adoption of an ordinance pursuant to this section, the municipal clerk shall forward a copy of the ordinance to the Director of the Division of Taxation in the Department of the Treasury and to the Director of the Division of Local Government Services in the Department of Community Affairs.¹

    3. Notwithstanding any provisions of law to the contrary, all revenues received pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) from the taxation of retail sales ²of tangible personal property and services originating from and delivered² from business locations in a downtown business improvement zone shall be deposited immediately upon collection by the Department of the Treasury, as follows:

    a. In the first five-year period following adoption by the municipality of an ordinance establishing the downtown business improvement zone, 1/6 of all revenues received from the taxation of retail sales in the zone, but not more than $100,000 ¹per year¹, shall be deposited in the downtown business improvement fund created pursuant to section 4 of P.L. , c. (C. ( pending before the Legislature as this bill), and the balance shall be deposited in the General Fund;

    b. In the second five-year period following adoption by the municipality of an ordinance establishing the downtown business improvement zone, 2/18 of all revenues received from the taxation of retail sales in the zone, but not more than $50,000 ¹per year¹, shall be deposited in the downtown business improvement fund, and the balance shall be deposited in the General Fund;

    c. In the third five-year period following adoption by the municipality of an ordinance establishing the downtown business improvement zone, 1/18 of all revenues from the taxation of retail sales in the zone, but not more than $25,000 ¹per year¹, shall be deposited in the downtown business improvement fund, and the balance shall be deposited in the General Fund;

    d. ²[In the fourth five-year period following adoption by the municipality of an ordinance establishing the downtown business improvement zone, and thereafter] Thereafter², all revenues received from the taxation of retail sales in the zone shall be deposited in the General Fund.

    The revenues required to be deposited in the downtown business improvement fund under this section shall be used for the purposes of that fund and for the uses prescribed in section 6 of P.L. , c. (C.       ) (pending before the Legislature as this bill), subject to annual appropriations being made for those purposes and uses.

    4. There is created a downtown business improvement fund to be held by the State Treasurer, which shall be the repository for all moneys required to be deposited therein under section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) or moneys appropriated annually to the fund. All moneys deposited in the fund shall be held and disbursed in the amounts necessary to fulfill the purposes of this ²[section] act² and subject to the requirements ²[hereinafter]² prescribed ² in this act² . The State Treasurer may invest and reinvest any moneys in the fund, or any portion thereof, in legal obligations of the United States or of the State or of any political subdivision thereof. Any income from, interest on, or increment to moneys so invested or reinvested shall be included in the fund.

    5. The State Treasurer shall maintain separate accounts for each downtown business improvement zone designated under this act, and shall credit to each account an amount of the moneys deposited in the fund equal to the amount of revenues collected from the taxation of retail sales made in the zone, as provided in section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) ²,² and appropriated to the downtown business improvement zone ²,² or that amount of moneys appropriated to the fund and required to be credited to the downtown business improvement fund account of the municipality which created the downtown business improvement zone.

    The State Treasurer shall promulgate such rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as are necessary to govern the administration of the fund for the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill)

    6. a. The downtown business improvement fund shall be used for the purpose of assisting municipalities which establish downtown business improvement zones and ²[district management corporations] administering entities, if any,² which manage such zones in undertaking public improvements and in providing eligible services to the zone.

    b. The governing body of a municipality in which a zone is designated ²[or a district management corporation] and an administering entity, if any, ² which manages that zone ²[, as the case may be]² , by resolution, may propose to undertake a project for the public improvement of the zone or to provide eligible services to the zone, and to fund that project or those eligible services from moneys deposited in the downtown business improvement fund and credited to the account maintained by the State Treasurer for that zone.

    ²Nothing herein or in P.L.1972, c.134 (C.40:56-65 et seq.) shall be construed to prohibit a governing body of a municipality and an administering entity, if any, from utilizing those moneys raised through the imposition of a special assessment pursuant to P.L.1972, c.134 (C.40:56-65 et seq.) toward the municipality's or administering entity's share of the annual payments for any project or eligible service, as required pursuant to section 7 of P.L. , c. (C. )(pending before the Legislature as this bill).²

    The proposal so adopted ²by the municipality and the administering entity, if any,² shall set forth a plan for the project or for eligible services and shall include:

    (1) A description of the proposed project or of the eligible services to be provided;

    (2) An estimate of the total project costs, or of the total costs of eligible services, and an estimate of the amounts of funding necessary annually from the account;

    (3) A statement of any other revenue sources to be used to finance the project or to fund the cost of eligible services;

    (4) A statement of the time necessary to complete the project, or of the time during which the eligible services are to be maintained; and

    (5) A statement of the manner in which the proposed project or the eligible services further the municipality's policy and intentions for addressing the economic conditions existing in the zone.

    7. Upon adoption by the governing body of the municipality and by the ²[district management corporation] administering entity, if any,² , the proposal shall be sent to the Department of Community Affairs, Division of Housing and Community Development for its evaluation and approval. The Department of Community Affairs shall approve the proposal if it shall find:

    a. In the case of a project, that the proposed project furthers the policy and intentions behind the establishment of the zone; that the municipality ¹[or] and^{1 2}[district management corporation] the administering entity , if any,² shall ²[together]² annually appropriate for the project an amount of not less than 50% of the amount of the annual payments for the project; ¹[and]¹ that the estimated annual payments for the proposed project from the downtown business improvement fund account are not likely to result in a deficit in that account; ¹and that the estimated annual payments for the proposed project from the downtown business improvement fund account shall not be used for administrative purposes;¹ and

    b. In the case of funding for eligible services, that the proposal furthers the policy and intentions behind the establishment of the zone; that the municipality has furnished satisfactory assurances that the proposed services or equipment shall augment or upgrade services in the zone, and shall not be used in other areas of the municipality; that the municipality ²[or district management corporation] and the administering entity, if any,² shall ²[ together]² annually appropriate for the eligible services an amount of not less than 50% of the amount of the annual payments for those services and that the estimated annual payments for the eligible services from the account to which the proposal pertains are not likely to result in a deficit in that account.

    8. The Department of Community Affairs shall approve the proposal if it meets the standards established in section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill). Upon approval, the department shall annually, upon its receipt of a written statement from the governing body of the municipality or the ²[district management corporation] administering entity, if any,² certify to the State Treasurer the amount to be paid in that year from the account in the downtown business improvement fund with respect to each project or eligible ²[municipal]² services approved. The department may, at any time, revoke its approval of a project or for funding eligible ²[municipal]² services if it finds that the annual payments made from the fund are not being used as required by this ²[section] act².

    9. Upon certification by the Department of Community Affairs of the amount to be paid to a municipality ²or the administering entity, if any,² with respect to any project or ²[increase in]² eligible ²[municipal]² services, the State Treasurer shall pay to the municipality ²or the administering entity, if any and if the entity is so designated to recieve the funds,² that amount approved by the Commissioner of Community Affairs within the limits of the amounts credited to the downtown business improvement account of the municipality.

    10. This act shall take effect on the 60th day next following enactment ²[¹and shall apply to each State fiscal year beginning on and after July 1, 1997¹]².

Authorizes municipalities to establish downtown business improvement zones and sharing of retail sales tax proceeds therein.