Bill Text: NJ A3367 | 2014-2015 | Regular Session | Introduced
Bill Title: Requires county boards of taxation to order revaluation of real property in municipalities when necessary.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-06-09 - Introduced, Referred to Assembly State and Local Government Committee [A3367 Detail]
Download: New_Jersey-2014-A3367-Introduced.html
Sponsored by:
Assemblyman GILBERT "WHIP" L. WILSON
District 5 (Camden and Gloucester)
SYNOPSIS
Requires county boards of taxation to order revaluation of real property in municipalities when necessary.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the revaluation of real property, amending P.L.2007, c.62 and supplementing chapter 1 of Title 54 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 9 of P.L.2007, c.62 (C.40A:4-45.44) is amended to read as follows:
9. For the purposes of sections 9 through 13 of P.L.2007, c.62 (C.40A:4-45.44 through C.40A:4-45.47 and C.40A:4-45.3e):
"Adjusted tax levy" means an amount not greater than the amount to be raised by taxation of the previous fiscal year, less any [waivers from a prior fiscal year required to be deducted by the Local Finance Board pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46),] amount added in the previous fiscal year pursuant to paragraph (5) of subsection b. of section 10 of P.L.2007, c.62 for the preparation and execution of a complete program of revaluation of real property in a municipality when a revaluation is ordered by the county board of taxation, that result multiplied by 1.02, to which the sum of exclusions defined in subsection b. of section 10 of P.L.2007, c.62 (C.40A:4-45.45) shall be added.
"Amount to be raised by taxation" means the property tax levy set in the annual budget of a local unit.
"Local unit" means a municipality, county, fire district, or solid waste collection district, but shall not include a municipality that had a municipal purposes tax rate of $0.10 or less per $100 for the previous tax year.
"New ratables" means the product of the taxable value of any new construction or improvements times the tax rate of a local unit for its previous tax year.
(cf: P.L.2010, c.44, s.8)
2 Section 10 of P.L.2007, c.62 (C.40A:4-45.45) is amended to read as follows:
10. a. (1) In the preparation of its budget the amount to be raised by taxation by a local unit shall not exceed, except as provided in paragraph (2) of this subsection, the sum of new ratables, the adjusted tax levy, and the total of waivers approved pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46); provided, however, that in the case of a county, the amount to be raised by taxation shall not exceed the amount permitted by section 4 of P.L.1976, c.68 (C.40A:4-45.4).
(2) A local unit that has not been granted approval for a waiver pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46), may add to its adjusted tax levy in any one of the next three succeeding years, the amount of the difference between the maximum allowable amount to be raised by taxation or county purposes tax, as applicable, for the current local budget year pursuant to paragraph (1) of this subsection and the actual amount to be raised by taxation or county purposes tax, as applicable, for the current local budget year.
b. The following exclusions shall be added to the calculation of the adjusted tax levy:
(1) increases in amounts required to be raised by taxation for capital expenditures, including debt service as defined by law;
(2) increases in pension contributions and accrued liability for pension contributions in excess of 2.0%;
(3) increases in health care costs equal to that portion of the actual increase in total health care costs for the budget year that is in excess of 2.0% of the total health care costs in the prior year, but is not in excess of the product of the total health care costs in the prior year and the average percentage increase of the State Health Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), as annually determined by the Division of Pensions and Benefits in the Department of the Treasury;
(4) [and] extraordinary costs incurred by a local unit directly related to a declared emergency, as defined by regulation promulgated by the Commissioner of [the Department of] Community Affairs, in consultation with the Commissioner of Education, as appropriate; and
(5) amounts required for the preparation and execution of a complete program of revaluation of real property in a municipality when a revaluation is ordered by the county board of taxation.
If there are no exclusions, then the amount of the difference shall reduce the adjusted tax levy by that amount. Any cancelled or unexpended appropriation for any exclusion pursuant to this subsection [or waiver pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46),] also shall be deducted from the sum of the exclusions listed in this subsection or directly reduce the adjusted tax levy if there are no exclusions.
(cf: P.L.2010, c.44, s.9)
3. (New section) a. The Legislature finds and declares that:
Article VIII, Section I, paragraph 1(a) of the New Jersey Constitution requires that all real property in the State shall be assessed for property taxation according to the same standard of value. State law sets that standard as the "true value" of real property, which is understood to be the market value of real property.
The "true value" of real property is determined through a municipal-wide revaluation, where professional assessors inspect properties, review sales records, and determine the value of real property for property taxation purposes.
Some municipalities wait many years between revaluations, which effectively renders the values of parcels of real property in those municipalities not reflective of their true value.
As property values rise and fall in municipalities, individual properties in those municipalities may be assessed at an amount in excess of their true value, or may be assessed at an amount under their true value. This results in property taxpayers in many cases paying more, or less, in property taxes than would be due and owing thereon if real property assessments represented their true value.
This swing in value violates the provisions of Article VIII, Section I, paragraph 1(a) of the New Jersey Constitution requiring real property assessment to be assessed for property taxation according to the same standard of value, and also violates State law requiring real property assessments to reflect the true value of real property.
It is therefore imperative that State law require that real property assessments must be reviewed and revised as may be necessary through the revaluation process as that process is necessary in each municipality in the State.
b. In accordance with the provisions of statutory law and with any rule or regulation promulgated pursuant thereto, a county board of taxation shall compel the implementation of a revaluation of real property that has been performed in any municipality in the county at such time that the county board of taxation determines the need for a revaluation in the municipality.
A municipality wherein the general coefficient of deviation is greater than 15% shall be analyzed by the county board of taxation to determine if a revaluation of the real property in the municipality is necessary and appropriate. Such a determination shall be based on criteria set forth in regulations promulgated by the State treasurer and the Director of the Division of Taxation in the Department of Treasury pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
If a municipality fails to comply with a revaluation ordered by the county board of taxation in a timely manner, the county board of taxation shall cause the revaluation to be performed at the municipality's cost. The cost of a revaluation shall be directly billed to the municipality, in addition to the apportionment valuation, through the adjustment of the county levy for that municipality pursuant to R.S.54:4-48 and R.S.54:4-49. A municipality that refuses to perform and implement the revaluation required by the county board of taxation shall forfeit all State aid to which it may be entitled for the duration of its refusal to perform or implement the revaluation. When a municipality has issued qualified bonds pursuant to the "Municipal Qualified Bond Act," P.L.1976, c.38, the amount of State aid forfeited shall be the amount remaining after the State Treasurer has withheld of any amounts necessary for the payment of debt service on such qualified bonds.
A municipality feeling aggrieved by a decision of the county board of taxation to cause the revaluation to be performed at the municipality's cost may file an appeal of that decision of the county board of taxation to the Tax Court within 45 days of the approval by the Director of the Division of Taxation of the county tax board's order requiring the revaluation.
4. The Director of the Division of Taxation shall promulgate rules and regulations sufficient to effectuate the provisions of this act pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) not later than the 120th day next following enactment of this act.
5. This act shall take effect immediately.
STATEMENT
This bill would address circumstances where municipalities refuse to perform, and implement, a municipal-wide revaluation of real property.
Under the bill, a county board of taxation could compel the implementation of a revaluation of real property in any municipality in the county when the county board of taxation determines the need for a revaluation.
Under the provisions of the bill, a municipality wherein the general coefficient of deviation is greater than 15% shall be analyzed by the county board of taxation to determine if a revaluation is necessary and appropriate. The determination must be based on criteria set forth in regulations promulgated by the State Treasurer and the Director of the Division of Taxation.
If a municipality does not comply with a revaluation ordered by the county board of taxation in a timely manner, the board would cause the revaluation to be performed at the municipality's cost. The cost of a revaluation would be directly billed to the municipality, in addition to the apportionment valuation, through the adjustment of the county levy for that municipality pursuant to R.S.54:4-48 and R.S.54:4-49. A municipality that refuses to perform and implement a revaluation required by the county board of taxation would forfeit all State aid to which it may be entitled for the duration of its refusal to perform or implement the revaluation.
The bill would also create an exclusion from the property tax levy cap for amounts required for the preparation and execution of a revaluation of real property in a municipality when the revaluation is ordered by the county board of taxation. The exclusion would not be part of the municipality's adjusted tax levy in the following year.
