SENATE COMMUNITY AND URBAN AFFAIRS COMMITTEE

STATEMENT TO

SENATE, No. 4069

with committee amendments

STATE OF NEW JERSEY

DATED:  MAY 12, 2025

      The Senate Community and Urban Affairs Committee reports favorably and with committee amendments, Senate Bill No. 4069.

      As amended, this bill encourages municipal governing bodies to give greater consideration to the costs and benefits likely to flow from their approval of a financial agreement that awards a long term tax exemption to an urban renewal entity.  Additionally, the bill would require municipalities to provide information to certain county government officials when entering into tax agreements awarding a five-year tax exemption or abatement.  The bill would also require the Department of Community Affairs (DCA) to create and maintain a database on its Internet website that displays information about long term tax exemptions that have been awarded by municipalities. 

      The bill requires an urban renewal entity’s application for a long term property tax exemption to contain a cost-benefit analysis of the project’s impact on the finances of the municipality, county, school district, and other taxing districts, within which the project is located.  Under the bill, the mayor or other chief executive officer of the municipality is required to produce an independent cost-benefit analysis, and is required to submit both cost-benefit analyses to the municipal governing body at the time of submission of the urban renewal entity’s application to the municipal governing body for the governing body’s approval or disapproval of the application.  The bill also requires a municipal governing body to include specific findings in a resolution approving or disapproving an application for a long term property tax exemption, which address the net impact of the project on the finances of the affected local governments, including the municipality, county, and school district.

      This bill requires municipalities to consider and evaluate whether an investment in a redevelopment project through the grant of a long term property tax exemption will generate satisfactory revenue returns to the municipality, as well as the financial impacts to counties, school districts, and other local governments.  Under the bill, the cost-benefit analyses and financial impact findings required for grants of long term property tax exemptions would have to be published on the Internet website of the granting municipality, excluding project specific information deemed to be proprietary by the parties involved.  If the municipality does not have a website, this information would have to be provided for public inspection on the Internet website of DCA.  This bill would also require the cost-benefit analyses and findings to be part of the public record.  The cost-benefit analysis would not be required for an inclusionary development, as defined pursuant to subsection f. of section 4 of P.L.1985, c.222 (C.52:27D-304), that is part of a municipality’s compliance certification or a pending request for a compliance certification pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.).

      The bill requires municipalities that grant new long term property tax exemptions to provide pertinent information about each approved project to DCA.  The bill directs DCA to publish that information, along with existing long term property tax exemption information retrieved from plain language budget summaries submitted to DCA, in a database, sorted by municipality, on its Internet website.

      Finally, the bill amends the "Five-Year Exemption and Abatement Law" to require a municipality to forward a copy of a tax agreement  awarding a five-year property tax exemption or abatement to the chief financial officer of the county and the county counsel, within 10 days of execution of the agreement.  The bill also requires a municipal governing body to provide those county officials with the annual report of the total amount of real property taxes exempted and the total amount abated within the municipality.  Current law requires municipalities to annually report this information to certain State government officials.

COMMITTEE AMENDMENTS:

      The committee amended the bill to provide that the cost-benefit analysis would not be required for an inclusionary development, as defined pursuant to subsection f. of section 4 of P.L.1985, c.222 (C.52:27D-304), that is part of a municipality’s compliance certification or a pending request for a compliance certification pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.).