LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 3519
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JULY 3, 2024
SUMMARY
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Synopsis: |
Provides monies for EDA to purchase certain properties from NJT to maximize development potential; appropriates $65 million. |
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Type of Impact: |
One-time State expenditure increase. |
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Agencies Affected: |
New Jersey Economic Development Authority, New Jersey Transit Corporation, Department of the Treasury. |
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Fiscal Impact |
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One-Time State Expenditure Increase |
$100 million |
· The Office of Legislative Services (OLS) finds that the bill would result in a one-time State expenditure increase of $100 million for the Economic Development Authority to purchase and develop certain New Jersey Transit Corporation properties. Funding is provided from a General Fund appropriation not to exceed $65 million and at least $35 million from the authority’s economic growth account.
· The bill may result in indeterminate future State and local revenue impacts, depending on the development and use of the acquired properties.
BILL DESCRIPTION
This bill provides funding for the New Jersey Economic Development Authority to purchase properties from the New Jersey Transit Corporation that the authority identifies as suitable for development, rehabilitation, and leasing opportunities to maximize their development potential. The bill requires the authority to use at least $35 million from its economic growth account for purchasing and developing New Jersey Transit properties and appropriates an amount not to exceed $65 million from the General Fund to the authority for purchasing New Jersey Transit properties. It requires the authority to purchase properties based on appraisals of their highest and best use value and mandates that New Jersey Transit maintain a participation interest in sold properties, receiving at least 33% of proceeds above the appraised value if a property is sold, or at least 33% of lease proceeds if a property is leased. The bill also establishes a notification and presentation process involving the Joint Budget Oversight Committee before property purchases and development actions.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that the bill would result in a one-time State expenditure increase of $100 million for the Economic Development Authority to purchase and develop certain New Jersey Transit properties. Funding is provided from a General Fund appropriation not to exceed $65 million and at least $35 million from the authority’s economic growth account. The full $100 million may not be expended if suitable properties are not identified or if their purchase prices are lower than anticipated and the full $65 million appropriation is not required.
The bill may result in indeterminate future State and local revenue impacts, including potential revenue gains from the authority’s development, sale, or lease of acquired properties, possible increased tax revenues if properties are developed for commercial or residential use, and potential opportunity costs from alternative uses of the funds or properties. The magnitude and timing of these impacts would depend on the specific properties acquired, their development plans, and market conditions.
The authority and New Jersey Transit may incur some additional administrative costs to implement the property identification, appraisal, and transfer processes outlined in the bill. These costs are likely to be absorbed within existing resources.
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Section: |
Revenue, Finance, and Appropriations |
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Analyst: |
Assistant Fiscal Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).