A3881

An Act exempting nonprofit vocational training schools from property taxation, and amending and supplementing chapter 4 of Title 54 of the Revised Statutes.

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

1. (New section) The Legislature finds and declares that:

a. Important benefits flow to the public when high-quality vocational training institutions are maintained and made widely-available;

b. Vocational training schools alleviate much of the cost of publicly-financed job training, and make important contributions to the State economy and employment of State residents;

c. When offered by nonprofit organizations, vocational-training schools allow individuals to affordably pursue a trade, when they might not otherwise be able to do so;

d. Even those who never take vocational training courses themselves benefit from their availability through the large pool of skilled tradespersons that the courses produce; and

e. It is necessary and in the public interest for the Legislature to amend R.S.54:4-3.6 to specify that, like other schools, nonprofit vocational training schools that offer bona fide courses which further the public good should benefit from property tax-exempt status.

2. R.S.54:4-3.6 is amended to read as follows:

54:4-3.6. The following property shall be exempt from taxation under this chapter: all buildings actually used for colleges, schools, academies or seminaries, provided that if any portion of such buildings are leased to profit-making organizations or otherwise used for purposes which are not themselves exempt from taxation, said portion shall be subject to taxation and the remaining portion only shall be exempt; all buildings actually used for historical societies, associations or exhibitions, when owned by the State, county or any political subdivision thereof or when located on land owned by an educational institution which derives its primary support from State revenue; all buildings actually and exclusively used for public libraries, asylum or schools for adults and children with intellectual disabilities; all buildings used exclusively by any association or corporation formed for the purpose and actually engaged in the work of preventing cruelty to animals; all buildings actually and exclusively used and owned by volunteer first-aid squads, which squads are or shall be incorporated as associations not for pecuniary profit; all buildings actually used in the work of associations and corporations organized exclusively for the moral and mental improvement of men, women and children, provided that if any portion of a building used for that purpose is leased to profit-making organizations or is otherwise used for purposes which are not themselves exempt from taxation, that portion shall be subject to taxation and the remaining portion only shall be exempt; all buildings actually used in the work of associations and corporations organized exclusively for religious purposes, including religious worship, or charitable purposes, provided that if any portion of a building used for that purpose is leased to a profit-making organization or is otherwise used for purposes which are not themselves exempt from taxation, that portion shall be subject to taxation and the remaining portion shall be exempt from taxation, and provided further that if any portion of a building is used for a different exempt use by an exempt entity, that portion shall also be exempt from taxation; all buildings actually used in the work of associations and corporations organized exclusively for hospital purposes, provided that if any portion of a building used for hospital purposes is leased to profit-making organizations or otherwise used for purposes which are not themselves exempt from taxation, that portion shall be subject to taxation and the remaining portion only shall be exempt; all buildings owned or held by an association or corporation created for the purpose of holding the title to such buildings as are actually and exclusively used in the work of two or more associations or corporations organized exclusively for the moral and mental improvement of men, women and children; all buildings owned by a corporation created under or otherwise subject to the provisions of Title 15 of the Revised Statutes or Title 15A of the New Jersey Statutes and actually and exclusively used in the work of one or more associations or corporations organized exclusively for charitable or religious purposes, which associations or corporations may or may not pay rent for the use of the premises or the portions of the premises used by them; the buildings, not exceeding two, actually occupied as a parsonage by the officiating clergymen of any religious corporation of this State, together with the accessory buildings located on the same premises; the land whereon any of the buildings hereinbefore mentioned are erected, and which may be necessary for the fair enjoyment thereof, and which is devoted to the purposes above mentioned and to no other purpose and does not exceed five acres in extent; the furniture and personal property in said buildings if used in and devoted to the purposes above mentioned; all property owned and used by any nonprofit corporation in connection with its curriculum, work, care, treatment and study of men, women, or children with intellectual disabilities shall also be exempt from taxation, provided that such corporation conducts and maintains research or professional training facilities for the care and training of men, women, or children with intellectual disabilities; provided, in case of all the foregoing, the buildings, or the lands on which they stand, or the associations, corporations or institutions using and occupying them as aforesaid, are not conducted for profit, except that the exemption of the buildings and lands used for charitable, benevolent or religious purposes shall extend to cases where the charitable, benevolent or religious work therein carried on is supported partly by fees and charges received from or on behalf of beneficiaries using or occupying the buildings; provided the building is wholly controlled by and the entire income therefrom is used for said charitable, benevolent or religious purposes; and any tract of land purchased pursuant to subsection (n) of section 21 of P.L.1971, c.199 (C.40A:12-21), and located within a municipality, actually used for the cultivation and sale of fresh fruits and vegetables and owned by a duly incorporated nonprofit organization or association which includes among its principal purposes the cultivation and sale of fresh fruits and vegetables, other than a political, partisan, sectarian, denominational or religious organization or association. The foregoing exemption shall apply only where the association, corporation or institution claiming the exemption owns the property in question and is incorporated or organized under the laws of this State and authorized to carry out the purposes on account of which the exemption is claimed or where an educational institution, as provided herein, has leased said property to a historical society or association or to a corporation organized for such purposes and created under or otherwise subject to the provisions of Title 15 of the Revised Statutes or Title 15A of the New Jersey Statutes.

As used in this section ["hospital] :

"Hospital purposes" includes health care facilities for the elderly, such as nursing homes; residential health care facilities; assisted living residences; facilities with a Class C license pursuant to P.L.1979, c.496 (C.55:13B-1 et al.), the "Rooming and Boarding House Act of 1979"; similar facilities that provide medical, nursing or personal care services to their residents; and that portion of the central administrative or service facility of a continuing care retirement community that is reasonably allocable as a health care facility for the elderly;

"Profit-making organization" does not include an organization that operates an institution of instruction for a particular skill or field, if the organization is exempt from federal income taxes under section 501(c) of the federal Internal Revenue Code (26 U.S.C.s. 501(c)); and

"School" includes an institution of instruction for a particular skill or field, so long as courses or educational programs offered by the institution are either approved by the Training Evaluation Unit in the Department of Labor and Workforce Development, or meet other criteria designated by the Commissioner of Labor and Workforce Development as sufficient to satisfy minimum educational standards.

(cf: P.L.2011, c.171, s.4)

3. The Commissioner of Labor and Workforce Development may adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to guide the approval of courses or educational programs for property tax exemption purposes under R.S.54:4-3.6.

4. This act shall take effect immediately, but shall remain inoperative until the beginning of the first tax year next following enactment.

STATEMENT

In Carpenters Apprentice Training and Education Fund v. Borough of Kenilworth, 147 N.J. 171, the Supreme Court interpreted that the Legislature never intended that a property tax exemption offered to nonprofit schools, pursuant to R.S.54:4-3.6, should benefit vocational schools. This bill intends to adjust this interpretation so that certain vocational schools are exempt from property taxes.

The Legislature recognizes the important benefits that stream to the public through the availability of quality vocational training. Vocational training schools alleviate much of the cost of publicly-financed job training, and make important contributions to the State economy, along with the employment of State residents. Trade schools, when offered by nonprofit organizations, allow individuals to affordably pursue a trade, when they might not otherwise be able to do so. Furthermore, even those who never take vocational training courses themselves benefit from their availability through the large pool of skilled tradespersons that the courses produce.

This bill provides that the property tax exemption provided to nonprofit schools under R.S.54:4-3.6, should include institutions that offer instruction for a particular skill or field, commonly-known as vocational schools. The exemption would be available so long as courses or educational programs offered by the institutions are either approved by the Training Evaluation Unit in the Department of Labor and Workforce Development, or meet other criteria designated by the Commissioner of Labor and Workforce Development as sufficient to satisfy minimum educational standards. The bill further provides that a vocational school should not be considered for-profit if its operator is exempt from federal income taxes under 26 U.S.C.501(c).