A6135

An Act concerning certain payments in lieu of taxes and amending P.L.1999, c.152.

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

1. Section 29 of P.L.1999, c.152 (C.13:8C-29) is amended to read as follows:

29. a. (1) (a) To the end that municipalities may not suffer a loss of taxes by reason of the acquisition and ownership by the State of lands in fee simple for recreation and conservation purposes, or the acquisition and ownership by qualifying tax exempt nonprofit organizations of lands in fee simple for recreation and conservation purposes that become certified exempt from property taxes pursuant to P.L.1974, c.167 (C.54:4-3.63 et seq.) or similar laws, using constitutionally dedicated moneys in whole or in part, the State shall pay annually on October 1 to each municipality in which lands are so acquired and owned, for a period of 13 years following an acquisition the following amounts: in the first year a sum of money equal to the tax last assessed and last paid by the taxpayer upon this land and the improvements thereon for the taxable year immediately prior to the time of its acquisition and thereafter the following percentages of the amount paid in the first year: second year, 92[%] percent; third year, 84[%] percent; fourth year, 76[%] percent; fifth year, 68[%] percent; sixth year, 60[%] percent; seventh year, 52[%] percent; eighth year, 44[%] percent; ninth year, 36[%] percent; 10th year, 28[%] percent; 11th year, 20[%] percent; 12th year, 12[%] percent; 13th year, 4[%] percent.

(b) Notwithstanding the provisions of subparagraph (a) of this paragraph to the contrary, any payment made pursuant to that subparagraph shall be not less than the amount that would be paid as provided pursuant to paragraph (2) of this subsection.

(2) After the 13th year, or sooner as provided pursuant to subparagraph (b) of paragraph (1) of this subsection, the State shall pay annually on October 1 to each municipality in which lands are so acquired and owned the following amounts: [$2] $3 per acre of lands so acquired and owned for any municipality for which all lands owned in fee simple by the State or by a qualifying tax exempt nonprofit organization for recreation and conservation purposes constitute less than 20[%] percent of the total land area of the municipality; [$5] $7.50 per acre of lands so acquired and owned for any municipality for which all lands owned in fee simple by the State or by a qualifying tax exempt nonprofit organization for recreation and conservation purposes constitute at least 20[%] percent but less than 40[%] percent of the total land area of the municipality; [$10] $15 per acre of lands so acquired and owned for any municipality for which all lands owned in fee simple by the State or by a qualifying tax exempt nonprofit organization for recreation and conservation purposes constitute at least 40[%] percent but less than 60[%] percent of the total land area of the municipality; and [$20] $40 per acre of lands so acquired and owned for any municipality for which all lands owned in fee simple by the State or by a qualifying tax exempt nonprofit organization for recreation and conservation purposes constitute at least 60[%] percent of the total land area of the municipality.

b. In the event that land acquired by the State, a local government unit, a qualifying tax exempt nonprofit organization, or the Palisades Interstate Park Commission for recreation and conservation purposes was assessed at an agricultural and horticultural use valuation in accordance with provisions of the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) at the time of its acquisition by the State, local government unit, qualifying tax exempt nonprofit organization, or the Palisades Interstate Park Commission, no roll-back tax pursuant to section 8 of P.L.1964, c.48 (C.54:4-23.8) shall be imposed as to this land nor shall this roll-back tax be applicable in determining the annual payments to be made pursuant to subsection a. of this section by the State to the municipality in which this land is located.

c. Any payments made by the State pursuant to this section shall be paid from the General Fund but not from constitutionally dedicated moneys.

d. All sums of money received by the respective municipalities as compensation for loss of tax revenue pursuant to this section shall be applied to the same purposes as is the tax revenue from the assessment and collection of taxes on real property of these municipalities, and to accomplish this end the sums shall be apportioned in the same manner as the general tax rate of the municipality for the tax year preceding the year of receipt.

e. For the purposes of this section, lands owned in fee simple by the State for recreation and conservation purposes shall mean State parks and forests, as defined pursuant to section 3 of P.L.1983, c.324 (C.13:1L-3), State wildlife management areas, and any other lands owned in fee simple by the State and administered by the Department of Environmental Protection for recreation and conservation purposes.

(cf: P.L.2001, c.312, s.2)

2. Section 30 of P.L.1999, c.152 (C.13:8C-30) is amended to read as follows:

30. a. With respect to lands acquired using any funding source other than constitutionally dedicated moneys, whether prior to the date of enactment of [this act] P.L.1999, c.152 (C.13:8C-1 et seq.) or thereafter, and owned in fee simple by the State or by a qualifying tax exempt nonprofit organization, and which lands are permanently preserved for recreation and conservation purposes, the State shall pay annually on October 1 to each municipality in which those lands are located the following amounts: [$2] $3 per acre of lands so acquired and owned for any municipality for which all lands owned in fee simple by the State or by a qualifying tax exempt nonprofit organization for recreation and conservation purposes constitute less than 20[%] percent of the total land area of the municipality; [$5] $7.50 per acre of lands so acquired and owned for any municipality for which all lands owned in fee simple by the State or by a qualifying tax exempt nonprofit organization for recreation and conservation purposes constitute at least 20[%] percent but less than 40[%] percent of the total land area of the municipality; [$10] $15 per acre of lands so acquired and owned for any municipality for which all lands owned in fee simple by the State or by a qualifying tax exempt nonprofit organization for recreation and conservation purposes constitute at least 40[%] percent but less than 60[%] percent of the total land area of the municipality, and [$20] $40 per acre of lands so acquired and owned for any municipality for which all lands owned in fee simple by the State or by a qualifying tax exempt nonprofit organization for recreation and conservation purposes constitute at least 60[%] percent of the total land area of the municipality.

b. In the event payments in lieu of taxes are due and payable from the State on those lands pursuant to another law, and those payments, if made by the State, would exceed those that would be paid pursuant to this section, the payments shall be made in accordance with the other law. In no case shall payments be made to a municipality in compliance with both this section and any other applicable law.

c. Any payments made by the State pursuant to this section shall be paid from the General Fund but not from constitutionally dedicated moneys.

(cf: P.L.1999, c.152, s.30)

3. This act shall take effect immediately.

STATEMENT

This bill would increase the amounts of certain payments in lieu of taxes (PILOTs) paid for lands owned by the State or a nonprofit organization and preserved for recreation and conservation purposes (open space lands).

Current law requires that the State pay a certain amount annually to municipalities, in proportion to the acreage of open space lands in the municipality. Section 29 of P.L.1999, c.152 (C.13:8C-29) applies to lands that are acquired using constitutionally dedicated corporation business tax (CBT) revenues, and requires that, beginning 13 years after the land was acquired, the State pay:

(1) $2 per acre to municipalities that are comprised of less than 20 percent open space lands;

(2) $5 per acre to municipalities that are comprised of between 20 percent and 40 percent open space lands;

(3) $10 per acre to municipalities that are comprised of between 40 percent and 60 percent open space lands; and

(4) $20 per acre to municipalities that are comprised of 60 percent open space lands or greater.

Section 30 of P.L.1999, c.152 (C.13:8C-30) applies to open space lands that were not acquired using dedicated CBT funding. It establishes the same formula for PILOTs, but applies the formula regardless of when the land was acquired.

This bill would increase the per-acre amounts in the formulas in both sections of law to the following:

(1) $3 per acre to municipalities that are comprised of less than 20 percent open space lands;

(2) $7.50 per acre to municipalities that are comprised of between 20 percent and 40 percent open space lands;

(3) $15 per acre to municipalities that are comprised of between 40 percent and 60 percent open space lands; and

(4) $40 per acre to municipalities that are comprised of 60 percent open space lands or greater.