Bill Text: NJ S1112 | 2012-2013 | Regular Session | Introduced
Bill Title: Provides tax relief for certain non-residential property owners and tenants in consolidated municipalities.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2012-01-23 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S1112 Detail]
Download: New_Jersey-2012-S1112-Introduced.html
Sponsored by:
Senator ROBERT M. GORDON
District 38 (Bergen and Passaic)
SYNOPSIS
Provides tax relief for certain non-residential property owners and tenants in consolidated municipalities.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning property assessments in consolidated municipalities and amending P.L.2007, c.63.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 28 of P.L.2007, c.63 (C.40A:65-28) is amended to read as follows:
28. a. If a revaluation of property for the consolidated municipality is not implemented for the first local budget year of the consolidated municipality, then the assessments on the properties owned by the taxpayers of the former municipalities shall be equalized for the apportionment of taxes for the consolidated municipality, in the same manner as assessments are equalized for the apportionment of county taxes.
b. The owners of any residential property or any non-residential property that is vacant and for which an application for development is complete pursuant to section 5 of P.L.1984, c.20 (C.40:55-10.3) or section 12 of P.L.1968, c.404 (C.13:17-13) and the regulations promulgated pursuant thereto or is either non-vacant or improved, and any residential or non-residential tenants of any municipality consolidated under sections 1 to 37 of P.L.2007, c.63 (C.40A:65-1 et al.), or the "Municipal Consolidation Act," P.L.1977, c.435 (C.40:43-66.35 et al.), who experience a municipal or school district purposes real property tax increase in the first tax year following the municipal consolidation shall be entitled to annual property tax relief until such time as they sell or transfer their home or property or no longer reside or occupy as tenants in the rental unit or non-residential space they occupied just prior to the municipal consolidation. In the case of the owner of residential property or of non-residential property that is vacant and for which an application for development is complete pursuant to section 5 of P.L.1984, c.20 (C.40:55D-10.3) or section 12 of P.L.1968, c.404 (C.13:17-13) and the regulations promulgated pursuant thereto or is either non-vacant or improved, the property tax relief shall be reflected as a credit on the property tax bill equal to the difference between the municipal and school district purposes real property tax payable by the taxpayer for the tax year, adjusted annually in proportion to the increase or decrease in the consumer price index for all urban consumers in the nearest metropolitan statistical area as reported by the United States Department of Labor, subject to any adjustment as determined necessary by the Director of the Division of Local Government Services in the Department of Community Affairs to reflect operating budgets for a normal pre-consolidated fiscal year, and the municipal and school district purposes real property tax billed to that taxpayer for the tax year during which the consolidation is effectuated, as may be adjusted by the Director of the Division of Local Government Services in the Department of Community Affairs to reflect normal post-consolidation operating budgets for the municipalities and school districts. In the case of a residential tenant, the tax credit applied to an apartment property shall be distributed to eligible tenants pursuant to the provisions of the "Tenants' Property Tax Rebate Act," P.L.1976, c.63 (C.54:4-6.2 et seq.) and this section. In the case of a non-residential tenant, the tax credit applied to a commercial or industrial property shall be distributed to the tenant in a manner similar to the distribution of the tax credit to a residential tenant, in accordance with rules and regulations promulgated by the director for this purpose. The total of all such relief in the municipality shall be paid by the State to the municipality on a schedule determined by the Local Finance Board. For the purpose of this subsection, a "normal" budget year shall be one that, in the determination of the director, does not reflect expenses made in anticipation of, or in implementation of, a municipal consolidation.
(cf: P.L.2007, c.63, s.28)
2. This act shall take effect immediately.
STATEMENT
This bill provides that the owners of any productive non-residential property shall be granted tax relief to the same extent as tax relief is granted to the owners of residential property following municipal consolidation.
Specifically, the bill would grant property tax relief to the owner of, or tenants operating, non-residential property within any municipality that is consolidated under sections 1 to 37 of P.L.2007, c.63 (C.40A:65-1 et al.), or the "Municipal Consolidation Act," P.L.1977, c.435 (C.40:43-66.35 et al.), including non-residential property that is vacant and for which an application for development is deemed complete pursuant to section 5 of P.L.1984, c.20 (C.40:55-10.3) or has been reviewed by the New Jersey Meadowland Commission..
The property tax relief would be reflected as an adjustment appearing on the tax bill in an amount equal to the difference between the taxes assessed on the property by the consolidated municipality and the taxes assessed for the tax year prior to the consolidation, adjusted annually in proportion to the increase or decrease in the consumer price index for all urban consumers in the nearest metropolitan statistical area as reported by the United States Department of Labor, subject to any adjustment as determined necessary and equitable by the Director of the Division of Local Government Services in the Department of Community Affairs to account for reductions in vacancy rates or other factors.
The bill requires the tax credit to be distributed to a non- residential tenant in a manner similar to the distribution of the tax credit to a residential tenant. Information provided to the Senate Budget and Appropriations Committee in December 2010 indicates that the enactment of this bill may result in an indeterminate potential increase in State expenditures because the State is required to fund the total cost of all property tax credits granted by the municipality. The consolidated municipality would forego a finite amount of revenue only if the State refuses to appropriate any or all of the tax credits authorized by the bill.
Following municipal consolidation, property taxes in a consolidated municipality may increase, burdening both small and large businesses. This legislation would mitigate the fiscal shock created by an increase in tax rates, and eliminate an obstacle to municipal consolidation in New Jersey. No property tax relief would be afforded to the owners of vacant non-residential property.
