New Jersey-2022-A3010-Introduced

An Act establishing the "New Jersey Racetrack Growth and Development Fund" on behalf of eligible lessees of the New Jersey Sports and Exposition Authority, supplementing Title 52 of the Revised Statutes.

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

1. As used in sections 1 through 10 of this act:

"Agricultural experiment station" means the New Jersey Agricultural Experiment Station at Rutgers, the State University.

"Authority" means the New Jersey Sports and Exposition Authority.

"Director" means the Director of the Division of Taxation in the Department of the Treasury.

"Eligible lessee" means a person that:

leases a qualified racetrack facility;

is permitted, by the racing commission, to hold or conduct horse race meetings at the qualified racetrack facility; and

satisfies any other criteria that may be prescribed by the State Treasurer.

"Fund" means the "New Jersey Racetrack Growth and Development Fund" established by section 2 of this act.

"Ground rent" means the amount paid to the authority by an eligible lessee at fixed or predetermined intervals for the eligible lessee's right to lease, develop, and utilize a qualified racetrack facility.

"Horse race meeting of national interest" means a horse race meeting held or conducted within this State that garners national media attention, which horse race meeting shall include but shall not be limited to the Hambletonian, the Haskell, the National Breeder's Cup, and the National Breeders Crown races.

"Qualified racetrack facility" means the physical track, and any ground, enclosure, or other facility contiguous to the track, that is owned by the authority on the effective date of this act and used by an eligible lessee to hold or conduct horse race meetings permitted by the racing commission.

"Racing commission" means the New Jersey Racing Commission established by section 1 of P.L.1940, c.17 (C.5:5-22).

"Tax dedication period" means the period on or after July 1, 2022 but before July 1, 2033.

2. a. There is established in the Department of the Treasury a special, non-lapsing fund to be known as the "New Jersey Racetrack Growth and Development Fund."

b. The fund shall be administered by the State Treasurer, and shall be the repository for money credited to the fund by the director pursuant to sections 3, 4, and 5 of this act.

c. The Legislature shall appropriate annually, in each State fiscal year beginning on or after July 1, 2023 but before July 1, 2034, all money credited to the fund by the director, and any income derived from the investment of money credited to the fund, to the Department of the Treasury.

d. The State Treasurer shall use money appropriated from the fund to make the following payments, subject to the following priorities, during the State fiscal year in which the appropriation is made:

(1) lease reduction payments to the authority pursuant to section 6 of this act, shall be given first priority;

(2) racetrack growth and development funding payments to the racing commission pursuant to section 7 of this act, shall be given second priority; and

(3) equine research payments to the agricultural experiment station pursuant to section 8 of this act, shall be given third priority.

3. Notwithstanding the provisions of any law to the contrary, an amount equal to 50 percent of the tax collected pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), from sales of or charges for the following at or on the grounds of a qualified racetrack facility during the tax dedication period shall be credited to the fund, by the director, within 10 calendar days of the date the tax attributable to eligible sales and charges is paid to the director:

a. tangible personal property, except motor vehicles, aircraft, boats and other vessels, energy, alcoholic beverages, and tobacco, subject to taxation pursuant to subsection (a) of section 3 of P.L.1966, c.30 (C.54:32B-3);

b. services subject to taxation pursuant to paragraph (1), (2), (3), and (4) of subsection (b) of section 3 of P.L.1966, c.30 (C.54:32B-3);

c. prepared food subject to taxation pursuant to paragraph (1) of subsection (c) of section 3 of P.L.1966, c.30 (C.54:32B-3);

d. food and beverages subject to taxation pursuant to paragraph (2) of subsection (c) of section 3 of P.L.1966, c. 30 (C.54:32B-3);

e. admission charges subject to taxation pursuant to paragraph (1) of subsection (e) of section 3 of P.L.1966, c.30 (C.54:32B-3);

f. charges of a roof garden, cabaret, or other similar place subject to taxation pursuant to paragraph (2) of subsection (e) of section 3 of P.L.1966, c.30 (C.54:32B-3); and

g. motor vehicle parking charges subject to taxation pursuant to subsection (i) of section 3 of P.L.1966, c.30 (C.54:32B-3).

4. Notwithstanding the provisions of any law to the contrary, an amount equal to 50 percent of the tax collected pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), from sales of or charges for the following to an eligible lessee during the tax dedication period for use or consumption directly and exclusively in the conduct or operation of a qualified racetrack facility shall be credited to the fund, by the director, within 10 calendar days of the date the tax attributable to eligible sales and charges is paid to the director:

b. specified digital products subject to taxation pursuant to subsection (a) of section 3 of P.L.1966, c.30 (C.54:32B-3);

c. services subject to taxation pursuant to paragraph (1), (2), (3), and (4) of subsection (b) of section 3 of P.L.1966, c.30 (C.54:32B-3);

d. mail processing services subject to taxation pursuant to paragraph (5) of subsection (b) of section 3 of P.L.1966, c.30 (C.54:32B-3);

e. investigation and security services subject to taxation pursuant to paragraph (11) of subsection (b) of section 3 of P.L.1966, c.30 (C.54:32B-3);

f. information services subject to taxation pursuant to paragraph (12) of subsection (b) of section 3 of P.L.1966, c.30 (C.54:32B-3);

g. telephone answering services subject to taxation pursuant to paragraph (14) of subsection (b) of section 3 of P.L.1966, c.30 (C.54:32B-3);

h. radio subscription services subject to taxation pursuant to paragraph (15) of subsection (b) of section 3 of P.L.1966, c.30 (C.54:32B-3);

i. prepared food subject to taxation pursuant to paragraph (1) of subsection (c) of section 3 of P.L.1966, c.30 (C.54:32B-3); and

j. intrastate, interstate, and international telecommunications services and ancillary services subject to taxation pursuant to paragraph (1) of subsection (f) of P.L.1966, c.30 (C.54:32B-3).

5. Notwithstanding the provisions of any law to the contrary, an amount equal to 50 percent of the tax collected pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), from sales of or charges for the following to a contractor or repairman during the tax dedication period for the direct and exclusive use in erecting structures or building on or otherwise improving, altering, or repairing real property at or on the grounds of a qualified racetrack facility shall be credited to the fund, by the director, within 10 calendar days of the date the tax attributable to eligible sales and charges is paid to the director:

a. materials and supplies subject to taxation pursuant to subsection (a) of section 3 of P.L.1966, c.30 (C.54:32B-3); and

b. services subject to taxation pursuant to paragraph (1), (2), (3), and (4) of subsection (b) of section 3 of P.L.1966, c.30 (C.54:32B-3).

6. a. The State Treasurer shall make annually, in each State fiscal year beginning on or after July 1, 2023 but before July 1, 2034, lease reduction payments to the authority from money appropriated from the fund for the purpose of reducing the ground rent that is due and required to be paid to the authority by eligible lessees.

b. The amount of each payment made to the authority by the State Treasurer on behalf of an eligible lessee during a State fiscal year shall be equal to the lesser of:

(1) 50 percent of the ground rent that is due and required to be paid to the authority by the eligible lessee during the State fiscal year in which the payment is made; or

(2) the amount credited to the fund by the director from sales and charges attributable to the eligible lessee during the State fiscal year immediately preceding the State fiscal year in which the payment is made.

c. The total amount of all payments made to the authority by the State Treasurer on behalf of eligible lessees during a State fiscal year shall not exceed 90 percent of the amount appropriated from the fund during the State fiscal year in which the payment is made. An eligible lessee shall not receive the benefit of a payment allowed pursuant to this section unless the eligible lessee has made and filed an annual application for payment that has been reviewed and approved by the State Treasurer. The State Treasurer shall not make a payment to the authority on behalf of an eligible lessee for the amount of any ground rent that was due, or that may be due, and required to be paid in a State fiscal year that precedes, or that follows, the State fiscal year in which the payment is made.

d. The State Treasurer shall make payments to the authority on behalf of eligible lessees at the times, and in the amounts, that the State Treasurer determines to be necessary and appropriate to effectuate the purposes of this section.

7. a. The State Treasurer shall make annually, in each State fiscal year beginning on or after July 1, 2023 but before July 1, 2034, racetrack growth and development funding payments to the racing commission from money appropriated from the fund for the purpose of awarding grants to eligible lessees to support the growth and development of a sustainable horse racing industry within this State by attracting and retaining horse race meetings of national interest.

b. The amount of each payment made to the racing commission by the State Treasurer during a State fiscal year shall be equal to the amount determined collectively, by each eligible lessee, to be used to support the growth and development of a sustainable horse racing industry within this State by attracting and retaining horse race meetings of national interest from amounts appropriated from the fund during the fiscal year that remain available after all lease reduction payments have been made to the authority pursuant to section 6 of this act.

c. The total amount of all payments made to the racing commission by the State Treasurer during a State fiscal year shall not exceed 75 percent of the amounts appropriated from the fund during the State fiscal year that remain available after all lease reduction payments have been made to the authority pursuant to section 6 of this act. The racing commission shall not receive the benefit of a payment allowed pursuant to this section unless the eligible lessees have, collectively, made and filed an annual application for payment that has been reviewed and approved by the State Treasurer. The State Treasurer shall not make a payment to the racing commission that will be used for a horse race meeting of national interest that was held, or that will be held, in a State fiscal year that precedes, or that follows, the State fiscal year in which the payment is made.

d. The State Treasurer shall make payments to the racing commission at the times, and in the amounts, that the State Treasurer determines to be necessary and appropriate to effectuate the purposes of this section.

8. a. The State Treasurer shall make annually, in each State fiscal year beginning on or after July 1, 2023 but before July 1, 2034, equine research payments to the agricultural experiment station from money appropriated from the fund for the purpose of supporting the research and educational activities of the Rutgers Equine Science Center.

b. The amount of each payment made to the agricultural experiment station by the State Treasurer during a State fiscal year shall be equal to the amount determined collectively, by each eligible lessee, to be used to support the research and educational activities of the Rutgers Equine Science Center from amounts appropriated from the fund during the fiscal year that remain available after all lease reduction payments have been made to the authority pursuant to section 6 of this act and all racetrack growth and development funding payments have been made to the racing commission pursuant to section 7 of this act.

c. The total amount of all payments made to the agricultural experiment station by the State Treasurer during a State fiscal year shall not exceed 75 percent of the amounts appropriated from the fund during the State fiscal year that remain available after all lease reduction payments have been made to the authority pursuant to section 6 of this act. The agricultural experiment station shall not receive the benefit of a payment allowed pursuant to this section unless the eligible lessees have, collectively, made and filed an annual application for payment that has been reviewed and approved by the State Treasurer. The State Treasurer shall not make a payment to the agricultural experiment station to support research and educational activities of the Rutgers Equine Science Center that were conducted, or that will be conducted, in a State fiscal year that precedes, or that follows, the State fiscal year in which the payment is made.

d. The State Treasurer shall make payments to the agricultural experiment station at the times, and in the amounts, that the State Treasurer determines to be necessary and appropriate to effectuate the purposes of this section.

9. a. The State Treasurer shall make annually, on or before September 1 of each year following a State fiscal year in which a payment is made from money appropriated from the fund, a report regarding the implementation and administration of the fund.

b. The report shall, at a minimum, provide a statement detailing:

(1) the amount credited to the fund by the director pursuant to sections 3, 4, and 5 of this act during each of the two State fiscal years immediately preceding the State fiscal year in which the report is required to be made;

(2) the amount appropriated from the fund to the Department of the Treasury pursuant to section 2 of this act during the State fiscal year immediately preceding the State fiscal year in which the report is required to be made;

(3) the date and the amount of each lease reduction payment made to the authority pursuant to section 6 of this act during the State fiscal year immediately preceding the State fiscal year in which the report is required to be made;

(4) the date and the amount of each racetrack growth and development funding payment made to the racing commission pursuant to section 7 of this act during the State fiscal year immediately preceding the State fiscal year in which the report is required to be made; and

(5) the date and the amount of each equine research payment made to the agricultural experiment station pursuant to section 8 of this act during the State fiscal year immediately preceding the State fiscal year in which the report is required to be made.

c. The State Treasurer shall publish the report online through a link prominently displayed on the Department of the Treasury's Internet website, and shall transmit a copy of the report to the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), within five calendar days of the date the report is required to be made.

10. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the State Treasurer and the director may adopt immediately upon filing with the Office of Administrative Law such rules and regulations as the State Treasurer or the director determines to be necessary to effectuate the purposes of this act, which rules and regulation shall be effective for a period not exceeding 360 days following the effective date of this act and may thereafter be amended, adopted, or readopted by the State Treasurer or the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).

11. This act shall take effect immediately.

STATEMENT

This bill establishes the "New Jersey Racetrack Growth and Development Fund," and requires money appropriated from the fund to be used to make payments to certain entities on behalf of eligible lessees of the New Jersey Sports and Exposition Authority to support the growth and development of a sustainable horse racing industry within this State.

Under the bill, the "New Jersey Racetrack Growth and Development Fund" is established as a special, non-lapsing fund within the Department of the Treasury. The bill requires the State Treasurer to administer the fund, and provides for the fund to be used as a repository for certain amounts credited to the fund.

The bill requires the Director of the Division of Taxation to credit to the fund an amount equal to 50 percent of the sales and use tax collected from certain sales of and charges for eligible goods and services that are made or rendered during the tax dedication period (on or after July 1, 2022 but before July 1, 2033). The bill provides that these sales and charges of goods and services include:

(1) tangible personal property (including "claimed" racehorses), prepared foods (including concessions), admission charges, charges for parking motor vehicles, and certain enumerated services, provided such sales or charges are made or rendered at or on the grounds of a qualified racetrack facility;

(2) tangible personal property, specified digital products, and certain enumerated services, provided such sales and charges are made or rendered to an eligible lessee and used or consumed directly and exclusively in the conduct or operation of a qualified racetrack facility; and

(3) materials, supplies, and certain enumerated services, provided such sales and charges are made or rendered to a contractor or repairman for the direct and exclusive use in erecting structures or building on or otherwise improving, altering, or repairing real property at or on the grounds of a qualified racetrack facility.

The bill requires the Legislature to appropriate annually, in each State fiscal year beginning on or after July 1, 2023 but before July 1, 2034, all amounts credited to the fund by the Director of the Division of Taxation, together with any income derived from the investment of money credited to the fund, to the Department of the Treasury. The bill requires the State Treasurer to use money appropriated from the fund to make the following payments, subject to the following priorities, during the State fiscal year in which the appropriation is made:

(1) lease reduction payments to the New Jersey Sports and Exposition Authority to reduce the ground rent due and required to be paid to the authority by eligible lessees, will be given first priority;

(2) racetrack growth and development funding payments to the New Jersey Racing Commission for the purpose of awarding grants to eligible lessees to support the growth and development of a sustainable horse racing industry within the State by attracting and retaining horse race meetings of national interest, will be given second priority; and

(3) equine research payments to the New Jersey Agricultural Experiment Station at Rutgers, the State University for the purpose of supporting research and educational activities of the Rutgers Equine Science Center, will be given third priority.

The bill provides that each lease reduction payment made to the authority on behalf of an eligible lessee will be equal to the lesser of: 50 percent of the ground rent due and required to be paid to the authority by the eligible lessee during the State fiscal year in which the payment is made; or the amount credited to the fund from sales and charges attributable to the eligible lessee during the State fiscal year immediately preceding the State fiscal year in which the payment is made. The bill provides that the total amount of all payments made to the authority on behalf of eligible lessees during a State fiscal year will not exceed 90 percent of the total amount appropriated from the fund during the State fiscal year in which the payment is made.

The bill provides that each racetrack growth and development funding payment made to the racing commission will be equal to the amount determined collectively, by eligible lessees, to be used to support the growth and development of a sustainable horse racing industry within this State by attracting and retaining horse race meetings of national interest from appropriated amounts that remain available after all lease reduction payments have been made to the authority. The bill provides that the total amount of all payments made to the racing commission during a State fiscal year will not exceed 75 percent of the appropriated amounts that remain available after all lease reduction payments have been made.

The bill provides that each equine research payment made to the agricultural experiment station during a State fiscal year will be equal to the amount determined collectively, by eligible lessees, to be used to support research and educational activities of the Rutgers Equine Science Center from appropriated amounts that remain available after all lease reduction payments have been made to the authority and all racetrack growth and development funding payments have been made to the racing commission. The bill provides that the total amount of all payments made to the agricultural experiment station during a State fiscal year will not exceed 75 percent of the appropriated amounts that remain available after all lease reduction payments have been made.

The bill requires the State Treasurer to make an annual report regarding the implementation and administration of the fund. The bill requires the report to be published online through a link prominently displayed on the Department of the Treasury's Internet website, and a copy of the report to be transmitted to the Legislature.

The bill authorizes the State Treasurer and the Director of the Division of Taxation to adopt rules and regulations necessary to effectuate the purposes of the bill, and permits the immediate filing of those rules and regulations with the Office of Administrative Law, effective for a period not to exceed 360 days following the bill's effective date.

The bill takes effect immediately upon enactment.