S4577

An Act requiring a study of the use of tax abatements and exemptions by municipalities for redevelopment and rehabilitation.

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

1. a. The Commissioner of Community Affairs, in consultation with the Director of the Division of Taxation in the Department of the Treasury, shall conduct a study on the prevalence and use of financial agreements by municipalities to allow redevelopers to make scheduled payments in lieu of taxation as a tool to stimulate redevelopment and rehabilitation of blighted and other areas.

b. The purpose of the study established pursuant to subsection a. of this section shall be to identify and examine the impact of the use of the redevelopment and rehabilitation tools authorized under the "Long Term Tax Exemption Law," P.L.1991, c.431 (C.40A:20-1 et seq.) and the "Five-Year Exemption and Abatement Law," P.L.1991, c.441 (C.40A:21-1 et seq.) for the revitalization of areas in need of redevelopment or rehabilitation. The study shall, pertaining to the State fiscal year in progress on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and the prior five State fiscal years, examine and generate information on, but not limited to:

(1) the total number of financial agreements that municipalities have entered into;

(2) the length of the term of each financial agreement;

(3) the amount of tax revenue exempted or abated by each financial agreement;

(4) the amount of revenue derived from payments in lieu of taxation for each financial agreement;

(5) a description or summary of the proposed or completed redevelopment and rehabilitation resulting from each financial agreement; and

(6) the list of the parties of the financial agreement for each tax abatement.

c. The governing body of a municipality shall submit any information requested for the study enumerated in subsection b. of this section to the Department of Community Affairs, in a manner and on such forms as determined by the commissioner.

d. Within one year of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the commissioner, in consultation with the director, shall submit a written report to the Governor, and the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), setting forth the results of the study and any recommendations for policy or legislative action to increase efficiency and effectiveness while preserving local autonomy to the greatest extent possible. The commissioner shall publish the report on the Internet website of the Department Commissioner of Community Affairs.

2. This act shall take effect immediately.

STATEMENT

This bill requires the Commissioner of Community Affairs, in consultation with the Director of the Division of Taxation in the Department of the Treasury, to study and report on the use of financial agreements by municipalities to allow redevelopers to make scheduled payments in lieu of taxation as a tool to stimulate the redevelopment and rehabilitation of blighted and other areas.

The purpose of the study and report is to identify and examine the impact of the use of the redevelopment and rehabilitation tools authorized under the "Long Term Tax Exemption Law," P.L.1991, c.431 (C.40A:20-1 et seq.) and the "Five-Year Exemption and Abatement Law," P.L.1991, c.441 (C.40A:21-1 et seq.) for the revitalization of areas in need of redevelopment or rehabilitation. The study, at a minimum, is required to examine and generate information, as provided in the bill, on:

· the total number of financial agreements that municipalities have entered into;

· the length of the term of each financial agreement;

· the amount of tax revenue exempted or abated by each financial agreement;

· the amount of revenue derived from payments in lieu of taxation for each financial agreement;

· a description or summary of the proposed or completed redevelopment and rehabilitation resulting from each financial agreement; and

· the list of the parties of the financial agreement for the tax abatement.

The bill requires the governing body of a municipality to submit any information requested for the study to the Department of Community Affairs, in a manner and on such forms as determined by the commissioner.

Under the bill, the commissioner, in consultation with the director, within one year of the effective date of the bill, in is to submit a written report to the Governor, and the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), setting forth the results of the study and any recommendations for policy or legislative action to increase efficiency and effectiveness while preserving local autonomy to the greatest extent possible.