STATE OF NEW JERSEY
222nd LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblyman JAY WEBBER
District 26 (Morris and Passaic)
Co-Sponsored by:
Assemblyman Bergen, Assemblywoman Fantasia and Assemblyman Inganamort
SYNOPSIS
Requires taxation as real property of improvements on publicly owned real property used for purpose and protection of public water supply.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning the taxation of improvements on publicly owned real property used for the purpose and protection of a public water supply and amending R.S.54:4-3.3 and P.L.1957, c.183.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. R.S.54:4-3.3 is amended to read as follows:
54:4-3.3. Except as otherwise provided by article 1 of this chapter (s.54:4-1 et seq.) and P.L.2009, c.6 (C.54:4-3.6f et seq.), the property of the State of New Jersey; and the property of the respective counties and municipalities, and their agencies and authorities, school districts, and other taxing districts used for public purposes, which public purposes include the use for stadiums and arenas, or for the preservation or exhibit of historical data, records or property; school district property which is leased to a nonprofit organization which is exempt from taxation under R.S.54:4-3.6, for use by that organization in its exempt functions; school district property which is leased to another board of education or governmental agency; and property acquired by any municipality through tax title foreclosure or by deed in lieu of foreclosure, if not used for private purpose, shall be exempt from taxation under this chapter, but this exemption shall not include real property bought in for debts or on foreclosure of mortgages given to secure loans out of public funds or out of money in court, which property shall be taxed unless devoted to public use. The lands of counties, municipalities, and other municipal and public agencies of this State used for the purpose and for the protection of a public water supply shall be subject to taxation by the respective taxing districts where situated, at the taxable value thereof, [without regard to] including any buildings, dams or other structures, or other improvements thereon, in the same manner and to the same extent as the lands of private persons, but all other property so used shall be exempt from taxation. Property, the title to which is in the Morris Canal and Banking Company, in trust for the State, shall, so long as the title is so vested, be deemed to be the property of the State within the meaning of any tax law.
(cf: P.L.2016, c.65, s.2)
2. Section 63 of P.L.1957, c.183 (C.40:14B-63) is amended to read as follows:
63. Every utility system and all other property of a municipal authority are hereby declared to be public property of a political subdivision of the State and devoted to an essential public and governmental function and purpose and, [other than] with the exception of lands and improvements thereon used for the purpose and for the protection of a public water supply, including buildings dams and other structures, that are subject to assessment and taxation pursuant to [Revised Statutes 54:4-3.3] R.S.54:4-3.3, shall be exempt from all taxes and special assessments of the State or any subdivision thereof. All bonds are hereby declared to be issued by a political subdivision of this State and for an essential public and governmental purpose and to be a public instrumentality and such bonds, and the interest thereon and the income therefrom, and all service charges, funds, revenues and other moneys pledged or available to pay or secure the payment of such bonds, or interest thereon, shall at all times be exempt from taxation except for transfer, inheritance and estate taxes and taxes on transfers by or in contemplation of death.
(cf: P.L.1968, c.328, s.1)
3. This act shall take effect immediately.
STATEMENT
This bill would subject improvements, including buildings, dams, or other structures, located on land owned by counties, municipalities, and other municipal and public agencies of the State used for the purpose and for the protection of a public water supply, to taxation as real property by the municipality in which those improvements are located.
The purpose of the bill is to provide property tax relief to municipalities in which publicly owned watershed land is located. Under current law, the land itself is subject to property taxation, but buildings or other improvements are not. However, improvements on privately owned watershed property are subject to property taxation. This bill would allow municipalities in which publicly owned watershed property is located to tax improvements thereon in the same manner as improvements on privately owned watershed land are taxed.