A2131

An Act concerning Energy Tax Receipts Property Tax Relief Aid and amending P.L.1997, c.167.

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

1. Section 4 of P.L.1997, c.167 (C.52:27D-441) is amended to read as follows:

4. a. The annual appropriations act for each State fiscal year commencing with fiscal year 1998 shall appropriate and distribute during the fiscal year an amount not less than $740,000,000 or the amount determined pursuant to subsection e. of section 2 of P.L.1997, c.167 (C.52:27D-439)from the "Energy Tax Receipts Property Tax Relief Fund" pursuant to the provisions of section 2 of P.L.1997, c.167 (C.52:27D-439), for the purposes of that fund; provided, however, that no municipality that received aid in State Fiscal Year 2010 shall receive a lesser amount in any subsequent fiscal year.

b. If the provisions of subsection a. of this section are not met on the effective date of an annual appropriations act for the State fiscal year, or if an amendment or supplement to an annual appropriations act for the State fiscal year should violate the provisions of subsection a. of this section, the Director of the Division of Budget and Accounting in the Department of the Treasury shall, not later than five days after the enactment of the annual appropriations act, or an amendment or supplement thereto, that violates the provisions of subsection a. of this section, certify to the Director of the Division of Taxation that the requirements of subsection a. of this section have not been met.

c. The Director of the Division of Taxation shall, no later than five days after certification by the Director of the Division of Budget and Accounting in the Department of the Treasury pursuant to subsection b. of this section that the provisions of subsection a. of this section have not been met or have been violated by an amendment or supplement to the annual appropriations act, notify all taxpayers that have filed a return under the Corporation Business Tax (1946), P.L.1945, c.162 (C.54:10A-1 et seq.) during the previous calendar year, other than taxpayers that are gas, electric, and gas and electric, or telecommunications public utilities as defined pursuant to subsection (q) of section 4 of P.L.1945, c.162 (C.54:10A-4) pursuant to the amendment to that section 4 made in section 2 of P.L.1997, c.162, that the taxpayer shall have no liability pursuant to the provisions of P.L.1945, c.162 for any corporation business tax for the taxpayer's current privilege period,
notwithstanding any other provision of law to the contrary.

(cf: P.L.1997, c.167, s.4)

2. This act shall take effect immediately, and shall first be applicable to State Fiscal Year 2012.

STATEMENT

This bill amends P.L.1997, c.167 the “Energy Tax Receipts Property Tax Relief Act,” (C.52:27D-438 et seq.) in order to provide each municipality with a minimum level of Energy Tax Receipts (ETR) Property Tax Relief Aid. The minimum amount of ETR Aid would be equal to the amount of ETR Aid distributed to each municipality in State Fiscal Year 2010. If the appropriation and distributions are not made by the State, the State will forfeit the collection of corporation business tax liabilities from all corporate taxpayers that are not public utilities for that tax year.

In 1997, the State created the “Energy Tax Receipts Property Tax Relief Fund” as a dedicated fund to replace Gross Receipts and Franchise Tax. Certain revenues generated by the Corporation Business Tax, Sales and Use Tax and the Transitional Energy Facilities Assessment are deposited into the fund and distributed to municipalities as a means of reducing the municipal property tax levy. It is the sponsor’s intent to prevent the State from reducing allocations of ETR Aid to individual municipalities because municipalities are not permitted to to levy property taxes on energy and telecommunications property. ETR Aid is provided to municipalities as a replacement for property tax revenues that they are no longer authorized to collect.

Although there has not been a reduction in the total amount of ETR Aid distributed to all municipalities, the formulas used to determinate municipal aid reductions in Fiscal Year 2011 and fund mandatory inflation increases to ETR Aid in Fiscal Year 2012 did result in a lower ETR Aid distribution for many municipalities.