New Jersey-2024-A2699-Introduced

An Act providing State aid to certain municipalities located in whole or in part in the Highlands preservation area, supplementing chapter 1 of Title 54 of the Revised Statutes, and repealing section 19 of P.L.2004, c.120.

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

1. (New section) a. As used in this section:

"Base year" means the 2023 tax year;

"Current tax year" means the most recent year for which a report is filed pursuant to subsection c. of this section;

"Highlands preservation area" means the preservation area of the Highlands Region designated by subsection b. of section 7 of P.L.2004, c.120 (C.13:20-7);

"Highlands Region" means the region so designated by subsection a. of section 7 of P.L.2004, c.120 (C13:20-7);

"Qualified municipality" means any municipality located entirely in the Highlands preservation area; or a municipality wherein, of the total municipal land area that is located in the Highlands Region, at least 60 percent of that land is located in the Highlands preservation area; and which has conformed its municipal master plan and development regulations to the Highlands regional master plan pursuant to section 14 of P.L.2004, c.120 (C.13:20-14);

"Tax rate" means that portion of the effective property tax rate for the current tax year which reflects local taxes to be raised for district school purposes and local municipal purposes, calculated by dividing the total of column 12, section C by net valuation on which county taxes are apportioned in column 11, both as reflected in the Abstract of Ratables for the current tax year, and expressed as a rate per $100 of true value;

"True value of vacant land" or "true value" means the aggregate assessed value of vacant land divided by the average ratio of assessed-to-true value of real property (commonly known as the equalization rate) promulgated by the Director of the Division of Taxation in the Department of the Treasury and published in the table of equalized valuation; and

"Valuation base" means the change in the aggregate true value of vacant land directly attributable to the implementation of the "Highlands Water Protection and Planning Act," P.L.2004, c.120 (C.13:20-1 et al.) in a qualified municipality when comparing the current tax year to the base year.

b. (1) Within 120 days next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the Director of the Division of Taxation in the Department of the Treasury shall establish procedures for determining the valuation base of a qualified municipality, whether fiscal stress has been caused by the implementation of the "Highlands Water Protection and Planning Act," P.L.2004, c.120 (C.13:20-1 et al.) in a qualified municipality, and the amount due to a qualified municipality to compensate for a decline in the aggregate true value of vacant land directly attributable to the implementation of the "Highlands Water Protection and Planning Act."

(2) The "Highlands Preservation Area Municipal Property Tax Relief Fund" is established in the General Fund as a special nonlapsing fund for the purpose of providing State aid to qualified municipalities pursuant to this section. There shall be credited each State fiscal year from the "Highlands Protection Fund" to the "Highlands Preservation Area Municipal Property Tax Relief Fund" such sums as shall be necessary to provide State aid to qualified municipalities pursuant to this section. Every qualified municipality shall be eligible for a distribution from the fund pursuant to the provisions of this section.

c. The assessor of every qualified municipality shall certify to the county board of taxation on a form to be prescribed by the Director of the Division of Taxation, and on or before December 1 annually, a report of the assessed value of each parcel of vacant land in the base year and the change in the assessed value of each such parcel in the current tax year attributable to successful appeals of assessed values of vacant land to the county board of taxation pursuant to R.S.54:3-21 et seq. or attributable to a revaluation approved by the director and implemented or a reassessment approved by the county board of taxation. If a judgment or an appeal is overturned or modified, upon a final judgment an appropriate adjustment shall be made by the director in the payment of the entitlement due next following the judgment.

d. Upon receipt of reports filed pursuant to subsection c. of this section and using procedures developed by the Director of the Division of Taxation pursuant to paragraph (1) of subsection b. of this section, the county tax administrator shall compute and certify to the director on or before December 20 of each year, in such manner as to identify for each qualified municipality the aggregate decline, if any, in the true value of vacant land, comparing the current tax year to the base year. The aggregate changes so identified for each qualified municipality shall constitute its valuation base for purposes of this section.

The Director of the Division of Taxation shall, on or before January 10 of each year, provide the county tax administrator of each county in which a qualified municipality is located with all relevant information collected pursuant to the provisions of this section and any other information deemed necessary by the county tax administrator to determine the valuation base.

Upon receipt of the information, the county tax administrator shall make a final determination of the valuation base of each qualified municipality; calculate the amount due to a qualified municipality in accordance with the procedures developed pursuant to subsection a. of this section, to compensate for a decline, if any, by multiplying its valuation base by its tax rate; and certify to the director and the State Treasurer, on or before February 1 of each year, that amount to which each qualified municipality is entitled.

e. The State Treasurer shall certify to each qualified municipality, on or before February 15, its State aid amount. A copy of the certified amounts shall be forwarded to the Director of the Division of Local Government Services in the Department of Community Affairs.

f. The State Treasurer, upon warrant of the Director of the Division of Budget and Accounting in the Department of the Treasury, shall pay to each qualified municipality its entitlement as State aid from the sums available in the "Highlands Preservation Area Municipal Property Tax Relief Fund" in two equal installments pursuant to a schedule prescribed by the Division of Local Government Services.

If the amount available in the "Highlands Preservation Area Municipal Property Tax Relief Fund" in any year is insufficient to pay the full amount to which each qualified municipality is entitled pursuant to this section, the payments shall be made from the Property Tax Relief Fund.

g. Any municipality receiving a certification from the State Treasurer pursuant to subsection e. of this section shall anticipate such sums in its annual budget or any amendments or supplements thereto as a direct offset to the amount to be raised by taxation.

h. The Director of the Division of Taxation in reviewing the reports filed pursuant to subsection c. of this section may make such changes therein as the director deems necessary to ensure that the reports accurately reflect the change in the assessed value of vacant land.

i. The Director of the Division of Local Government Services shall make such changes in the budget of any qualified municipality to ensure that all sums received pursuant to this section are utilized as a direct offset to the amount to be raised by taxation and shall make such changes therein as the director deems necessary to ensure that the offset occurs.

j. Any sum received by a qualified municipality pursuant to this section shall not be considered as an exception or exemption under P.L.1976, c.68 (C.40A:4-45.1 et seq.).

k. Notwithstanding the provisions of the "Local Budget Law" (N.J.S.40A:4-1 et seq.), a qualified municipality which is due a property tax stabilization payment pursuant to this section may anticipate the amount of the entitlement in its annual budget for the year in which the payment is made.

l. The Director of the Division of Taxation and the Director of the Division of Local Government Services shall each adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), such rules and regulations as may be necessary to implement the provisions of this section.

2. (New section) There shall be appropriated in each State fiscal year from the "Highlands Preservation Area Municipal Property Tax Relief Fund" in the General Fund an amount as shall be determined by the Director of the Division of Budget and Accounting in the Department of the Treasury that is required to be distributed as State aid to each qualified municipality pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

3. Section 21 of P.L.2004, c.120 (C.13:20-19) is amended to read as follows:

21. a. There is created in the Department of the Treasury a special non-lapsing fund to be known as the "Highlands Protection Fund." The monies in the fund are dedicated and shall be used only to carry out the purposes enumerated in subsection b. of this section. The fund shall be credited with all revenues collected and deposited in the fund pursuant to section 4 of P.L.1968, c.49 (C.46:15-8), all interest and other income received from the investment of monies in the fund, and any monies which, from time to time, may otherwise become available for the purposes of the fund. Pending the use thereof pursuant to the provisions of subsection b. of this section, the monies deposited in the fund shall be held in interest-bearing accounts in public depositories, as defined pursuant to section 1 of P.L.1970, c.236 (C.17:9-41), and may be invested or reinvested in such securities as are approved by the State Treasurer. Interest or other income earned on monies deposited into the fund shall be credited to the fund for use as set forth in subsection b. of this section for other monies in the fund.

b. Monies deposited in the "Highlands Protection Fund" shall be used only for:

(1) [payments to the "Highlands Municipal Property Tax Stabilization Fund" established pursuant to subsection b. of section 19 of this act in such amounts as are necessary to provide property tax stabilization aid pursuant to that section;] (Deleted by amendment, P.L. , c. )

(2) payments of watershed moratorium offset aid pursuant to section 1 of P.L.1999, c. 225 (C.58:29-8);

(3) the making of grants by the Highlands Water Protection and Planning Council pursuant to sections 13 and 18 of this act; [and]

(4) allocations to the Pinelands Property Tax Assistance Fund established pursuant to section 20 of this act; and

(5) payments to the "Highlands Preservation Area Municipal Property Tax Relief Fund" established pursuant to subsection b. of section 1 of P.L. , c. (C. ) (pending before the Legislature

as this bill).

(cf: P.L.2004, c.120, s.21)

4. Section 19 of P.L.2004, c.120 (C.54:1-85) is repealed.

5. This act shall take effect immediately.

STATEMENT

This bill would require the distribution of State aid to municipalities located in whole, or in part, in the Highlands preservation area of the Highlands Region.

The Highlands Region was designated in the "Highlands Water Protection and Planning Act," P.L.2004, c.120 (C.13:20-1 et al.), which controls and limits, as appropriate, development in the New Jersey Highlands, an essential source of drinking water for one-half of the State's population, covering portions of 88 municipalities in seven counties, through a regional approach to land use planning and more stringent environmental standards. The Highlands Region consists of a planning area and a preservation area. The law designated a preservation area of the New Jersey Highlands to be subject to stringent standards governing major development.

As part of the "Highlands Water and Planning Protection Act," the Legislature included a 10-year State aid program to municipalities located in whole or in part in the Highlands preservation area, to provide these municipalities with funds for the vacant land that was subject to development restrictions. Due to State budgetary restrictions, the FY 2010 Appropriations Act was the last State budget that provided this aid. However, the land in the preservation area is still subject to the permanent development restrictions enacted in the "Highlands Water Protection and Planning Act," and therefore, municipalities located in the preservation area have little ability to approve development projects that will provide property tax relief to property taxpayers. This bill is intended to provide a new, permanent State program to provide property tax relief to the taxpayers in those municipalities located in whole, or in part, in the preservation of the Highlands.

This bill would establish the "Highlands Preservation Area Municipal Property Tax Relief Fund" in the General Fund as a special nonlapsing fund for the purpose of providing State aid to qualified municipalities pursuant to the bill. In each State fiscal year, the bill requires that there be credited from the "Highlands Protection Fund" to the "Highlands Preservation Area Municipal Property Tax Relief Fund" such sums as shall be necessary to provide State aid to qualified municipalities. A "qualified municipality" under the bill would be a municipality located entirely in the Highlands preservation area; or a municipality wherein, of the total municipal land area that is located in the Highlands Region, at least 60 percent of that land is located in the Highlands preservation area; and which has conformed its municipal master plan and development regulations to the Highlands regional master plan pursuant to the "Highlands Water and Planning Protection Act." Under the bill, every qualified municipality would be eligible for a distribution from the fund.

The bill would set property tax year 2023 (calendar year 2023) as the base year for the calculation of the State aid to be provided under the bill. The bill would require the assessor of every qualified municipality to certify to the county tax board on or before December 1 annually, a report of the assessed value of each parcel of vacant land in the base year and the change in the assessed value of each such parcel in the current tax year attributable to successful appeals of assessed values of vacant land to the county tax board, or attributable to a revaluation approved by the director and implemented or a reassessment approved by the county board of taxation. Upon receipt of these reports, the county tax board would compute and certify to the director on or before December 20 of each year, in such manner as to identify for each qualified municipality the aggregate decline, if any, in the true value of vacant land, comparing the current tax year to the base year. The aggregate changes identified for each qualified municipality would constitute its valuation base.

The State Treasurer would certify to each qualified municipality, on or before February 15, its property tax stabilization amount, and the State Treasurer would pay to each qualified municipality its State aid in two equal installments, pursuant to a schedule prescribed by the Division of Local Government Services in the Department of Community Affairs. The bill would require that, in the event the amount available in the "Highlands Preservation Area Municipal Property Tax Relief Fund" in any year is insufficient to pay the full amount to which each qualified municipality is entitled, the payments would be made from the Property Tax Relief Fund.