A4055

An Act establishing a commission to study the assessment and taxation of residential real property and supplementing Title 52 of the New Jersey Statutes.

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

1. The Legislature finds and declares:

a. The property tax burden in this State has become untenable for families, senior citizens, first-time homeowners, and renters, and it is past time for this burden to be lifted from the backs of New Jersey’s residents.

b. On August 20, 2024, the Tax Foundation published an article by Audrey Yushkov titled “Property Taxes by State and County, 2024.” This article notes that of the 15 counties in the United States with the highest median property tax payments (exceeding $10,000), seven of those counties are located in New Jersey: Bergen, Essex, Hunterdon, Morris, Passaic, Somerset, and Union.

c. That article also noted that in calendar year 2022, New Jersey had the highest effective tax rate on owner-occupied property in the nation.

d. In 2024, for the first time in New Jersey history, the average property tax bill was more than $10,000.

e. Combined with other cost drivers, including utilities and insurance, living in New Jersey has become financially hazardous to the health and well-being of the State’s property taxpayers.

f. Because this situation has taken decades to occur, it will take a thoughtful and meaningful process to develop solutions to these problems. Therefore, a commission to study the property tax burden of homeowners and develop solutions to lower residential property taxes is necessary and appropriate.

2. a. There is hereby established a commission in, but not of, the Department of the Treasury, to be known as the “New Jersey Commission to Reform the Assessment and Taxation of Residential Real Property.”

b. (1) The commission shall examine the property tax system in New Jersey in its entirety, including but not limited to the assessment and collection of property taxes, the funding of county government, municipal government, school districts, and fire districts in the State, and shall identify ways in which the system can be revised and improved in order to reduce the property tax burden on residential real property owners in the State.

(2) The commission shall recommend such amendments to the New Jersey Constitution and revisions to statutory law, as necessary, to: eliminate inequities in the current system of property taxation regarding the assessment of residential real property; ensure greater uniformity in the application of property taxes on residential real property; reduce residential property taxes as an overall share of local revenue; lessen the dependence of local government on residential property taxes; and establish alternative means to permanently and reliably fund local government services, including education funding.

(3) As part of its study, the commission may: examine the functions, duties, operations, and programs of local units of government; review statutes, regulations, ordinances, resolutions, opinions, orders, and agreements that govern the imposition, assessment, and collection of property taxes; and recommend exemptions, deductions, and other benefits that reduce or offset a taxpayer’s property tax liability. The commission shall also study and analyze property tax assessment and collection mechanisms in other states, and shall evaluate systems of property tax reform that have been proposed or implemented in other states.

c. The commission shall issue a final report of its findings, conclusions, and recommendations no later than 18 months following its organization. The final report shall be submitted to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1). The commission’s final report shall identify any pending legislation that the commission recommends for adoption by the Legislature, as well as any changes to the New Jersey Constitution for submission to the voters in addition to such other recommendations as the commission deems necessary. The commission’s final report shall be made available to the public electronically, through a link prominently displayed on the official website of the Department of the Treasury.

d. The commission shall expire 30 days following the date of the issuance of its final report.

3. a. The commission shall consist of 11 voting members as follows:

(1) the State Treasurer, ex officio, or the State Treasurer’s designee;

(2) one public member appointed by the President of the Senate;

(3) one public member appointed by the Speaker of the General Assembly;

(4) one public member appointed by the Senate Minority Leader;

(5) one public member appointed by the Assembly Minority Leader; and

(6) six public members appointed by the Governor, of whom at least two members shall reside in each of the northern, central, and southern regions of the State, respectively, and at least one member shall reside in an urban area, a suburban area of the State, and a rural area of the State, respectively.

b. When appointing public members, the appointing authority shall select professionals who have knowledge, expertise, and practical experience in county and municipal government, economic analysis, governmental finance and fiscal management, real property assessment and valuation, and the implementation, practice, administration, and regulation of property tax policy. No public member shall be a nominee for, or hold, an elective office.

c. Public members of the commission shall serve until the commission issues its final annual report to the Governor and the Legislature. Any vacancy in the membership of the commission shall be filled in the same manner as the original appointment was made. Any member of the commission may be removed for cause by the appropriate appointing authority. The members shall serve without compensation but shall be reimbursed for necessary expenses incurred in the performance of their duties, subject to the availability of funds therefor.

4. a. The commission shall organize as soon as practicable following the appointment of its members to elect a chairperson and to select a secretary, who need not be a member of the commission. The presence of six members of the commission shall constitute a quorum. The commission may conduct business without a quorum, but may only vote on recommendations when a quorum is present. The commission may adopt rules of procedure and operation in furtherance of its responsibilities. The commission may meet at the call of its chairperson at the times and in the places it may deem appropriate and necessary to fulfill its duties, and may conduct public hearings at such place or places as it may designate.

b. The commission may divide itself into such subcommittees and task forces as may be appropriate, which subcommittees and task forces may include persons other than members of the commission, such as academicians, government officers, representatives of business, or other professionals and may enter into such cooperative agreements as it deems necessary to accomplish its purposes. Persons serving on task forces who are not members of the commission shall serve at the appointment of the chairperson and shall be non-voting participants in the task forces. The commission may receive reports and testimony from independent experts, other qualified individuals, and members of the general public.

5. a. The commission shall be entitled to appoint an executive director and a staff, and the commission may call to its assistance and avail itself of the services or employees of any State, county, or municipal department, board, bureau, commission or agency or authority as it may require and as may be available for its purposes, and to employ counsel and contract for professional and consulting services, and employ stenographic and clerical assistants, and incur traveling and other miscellaneous expenses as it may deem necessary, in order to perform its duties, and as may be within the limits of funds appropriated or otherwise made available for its purposes.

b. The staff of the commission shall be within the unclassified service of the State, and their compensation shall be determined by the commission within the limitations of funds appropriated or otherwise made available for its purposes.

c. The commission may make use of existing studies, surveys, data, and other materials in the possession of any State agency or authority, and such materials in the possession of any county, municipality, or political subdivision of the State, other than the records and files of the Director of the Division of Taxation that are confidential under R.S.54:50-8. Each state agency, authority, county, municipality, and political subdivision of the State shall make any information and materials available to the commission as it may require to perform its responsibilities under this act.

6. This act shall take effect immediately.

STATEMENT

This bill establishes a commission in, but not of, the Department of the Treasury, to be known as the “New Jersey Commission to Reform the Assessment and Taxation of Residential Real Property,” to examine the property tax system in New Jersey in its entirety and identify ways in which the system can be revised and improved in order to reduce the property tax burden on New Jersey residents who own residential real property.

The bill directs the commission to recommend such amendments to the New Jersey Constitution and revisions to statutory law as may be necessary to: eliminate inequities in the current system of property taxation regarding the assessment of residential real property; ensure greater uniformity in the application of property taxes on residential real property; reduce residential property taxes as an overall share of local revenue; lessen the dependence of local government on residential property taxes; and establish alternative sources of revenue to permanently and reliably fund local government services, including education funding.

The commission would include 11 voting members, appointed as follows: (1) the State Treasurer, ex officio, or the State Treasurer’s designee; (2) one public member appointed by the President of the Senate; (3) one public member appointed by the Speaker of the General Assembly; (4) one public member appointed by the Senate Minority Leader; (5) one public member appointed by the Assembly Minority Leader; and (6) six public members appointed by the Governor, of whom at least two members reside in each of the northern, central, and southern regions of the State, and at least one member resides in an urban area, suburban area, and rural area of the State, respectively. The bill requires each public member to have knowledge, expertise, and practical experience in county and municipal government, economic analysis, governmental finance and fiscal management, real property assessment and valuation, and the implementation, practice, administration, and regulation of property tax policy. A public member may not be a nominee for, or hold, an elective office.

The bill requires the commission to issue a final report of its findings, conclusions, and recommendations no later than 18 months following its organization, and provides that the commission would expire 30 days following the date of the issuance of that report. The report is to be made available to the public electronically, through a link prominently displayed on the official website of the Department of the Treasury.