S2933

An Act concerning the Highlands Municipal Property Tax Stabilization program, and amending P.L.2004, c.120.

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

1. 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] P.L.2004, c.120 (C.54:1-85) in such amounts as are necessary to provide property tax stabilization aid pursuant to that section;

(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] section 13 of P.L.2004, c.120 (C.13:20-13) and section 18 of P.L.2004, c.120 (C.13:20-18) ; and

(4) allocations to the Pinelands Property Tax Assistance Fund established pursuant to section 20 of [this act] P.L.2004, c.120 (C.54:1-84) .

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

2. Section 19 of P.L.2004, c.120 (C.54:1-85) is amended to read as follows:

19. a. (1) There is established in the Department of the Treasury the "Highlands [Municipal] Property Tax Stabilization Board," which shall consist of three members to be appointed by the Governor, who shall be recognized experts in the field of taxation. Members of the board may also be members of the Highlands Water

Protection and Planning Council established pursuant to section 4 of P.L.2004, c.120 (C.13:20-4).

(2) Within 120 days after the date of enactment of P.L.2004, c.120 (C.13:20-1 et al.), the board, in consultation with the Highlands Water Protection and Planning Council, 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 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."

b. The "Highlands [Municipal] Property Tax Stabilization Fund" is established in the General Fund as a special nonlapsing fund for the purpose of providing State aid to property taxpayers in qualified municipalities pursuant to this section. There shall be credited each State fiscal year from the "Highlands Protection Fund" created pursuant to section 21 of P.L.2004, c.120 (C.13:20-19) to the Highlands [Municipal] Property Tax Stabilization Fund such sums as shall be necessary to provide State aid to reduce property taxes to residents in 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 tax board on a form to be prescribed by the Director of the Division of Taxation in the Department of the Treasury, 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 tax board 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 tax 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. (1) Upon receipt of reports filed pursuant to subsection c. of this section and using procedures developed by the board pursuant to subsection a. of this section, the county tax board 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.

(2) The Director of the Division of Taxation shall, on or before January 10 of each year, provide the board with all relevant information collected pursuant to the provisions of this section and any other information deemed necessary by the board to determine the valuation base.

(3) Upon receipt of the information, the board shall make a final determination on the valuation base of each qualified municipality; calculate the amount due to compensate property taxpayers in 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. Upon receipt of the certification by the board, the State Treasurer shall certify to each qualified municipality, on or before February 15, its property tax stabilization amount for the purposes of subsection f. of this section . 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. (1) [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 Municipal Property Tax Stabilization Fund" in two equal installments pursuant to a schedule prescribed by the Division of Local Government Services.] A Highlands Property Tax Stabilization Credit, paid from the sums available in the “Highlands Property Tax Stabilization Fund,” shall be applied to each real property line item each year as follows:

(a) The Director of the Division of Taxation and the State Treasurer shall certify to each county tax board, the Director of the Division of Budget and Accounting, the Legislative Budget and Finance Officer, and the Senate President and the Speaker of the General Assembly, by May 1 of each year, the amount of Highlands Property Tax Stabilization Aid due to each county and taxing district for that tax year.

(b) When the table of aggregates prepared pursuant to R.S.54:4-52 for each municipality is prepared, a tax credit rate shall be calculated using the calculation of total Highlands Property Tax Stabilization Aid divided by the total taxable value of all property.

(c) The tax credit rate shall be multiplied by the taxable value for each taxable line item, the product of which shall be deducted from the total taxes due, before deductions, on each line item for the tax year. The tax credit rate and amount of the Highlands Property Tax Stabilization Credit shall be displayed on the tax bill.

(d) In the event that the tax credit rate is less than $0.005 per $100 of taxable value, the municipal chief financial officer shall reserve the funds until such time as the addition of subsequent tax credits exceed that threshold.

(e) The State Treasurer also shall reimburse each qualified municipality and county tax board from the sums available in the "Highlands Property Tax Stabilization Fund" for any costs, including but not limited to attorney fees and personnel costs, incurred in conducting reassessments and revaluations, and in processing, administering, and defending successful and unsuccessful appeals of assessed values for vacant land in accordance with this section.

(2) If the amount available in the "Highlands [Municipal] Property Tax Stabilization Fund" in any year is insufficient to pay the full amount [to which each qualified municipality is entitled] due pursuant to this [section] subsection , the payments shall be made on a pro rata basis.

(3) [Notwithstanding any provisions of this section to the contrary, in the sixth, seventh, eighth, ninth, and tenth years of the State aid program created by this section, a qualified municipality shall be entitled to receive, respectively, 90%, 70%, 50%, 30%, and 10% of the sum it otherwise would have been paid pursuant to this subsection, and thereafter the program shall expire.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

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 State Treasurer may deduct from the State aid a municipality would otherwise receive pursuant to this section an amount equivalent to that portion of any sums received by a municipality pursuant to section 1 of P.L.1999, c.225 (C.58:29-8) that the State Treasurer, in consultation with the Director of the Division of Local Government Services, determines to be duplicative of any State aid received pursuant to this section.

m. 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.

n. As used in this section:

"Base year" means the calendar year 2003;

"Board" means the Highlands [Municipal] Property Tax Stabilization Board established pursuant to subsection a. of this section;

"County tax board" means a county board of taxation;

"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);

"Qualified municipality" means any municipality located wholly or partially in the Highlands preservation area [, provided however, that after the adoption of the Highlands regional master plan by the Highlands Water Protection and Planning Council pursuant to section 8 of P.L.2004, c.120 (C.13:20-8), qualified municipality shall mean only a municipality that 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.

o. [This section shall expire July 1 next following one year after the date the last State aid payment is made to a qualified municipality in the tenth year as provided pursuant to paragraph (3) of subsection f. of this section.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

(cf: P.L.2004, c.120, s.19)

3. This act shall take effect immediately.

STATEMENT

This bill would revise the Highlands Property Tax Stabilization Program to require that the distribution of the stabilization aid reflect all elements of the property tax bill. The bill would provide that the tax credit rate shall be multiplied by the taxable value for each taxable line item, the product of which shall be deducted from the total taxes due, before deductions, on each line item for the tax year. The tax credit rate and amount of the Highlands Property Tax Stabilization Credit would be displayed on the tax bill.