Township of South Harrison, NJ Article III Commercial and Industrial Improvements Exemption

[Adopted 3-11-1998 by Ord. No. 0-98-01]

§ 127-8 Agreements for tax phase-in exemptions.

The Township Committee may enter into agreements with applicants for tax phase-in exemptions and abatements for new construction of commercial and industrial structures, pursuant to the provisions of P.L. 1991, c. 441 (N.J.S.A. 40A:21-1), for periods of five years. For the purposes of this article for tax exemption and abatement, any building or structure that meets the definitions of "commercial or industrial structure" in N.J.S.A. 40A:21-3 and other requirements set forth in this article shall qualify for tax exemption and abatement even though it is described or considered an agricultural or farm building or structure under Chapter 90, Land Use and Development, or for purposes of the New Jersey Uniform Construction Code.[1]

[1] Editor's Note: See Ch. 55, Construction Codes, Uniform.

§ 127-9 Procedures for agreements.

The following procedures shall govern agreements for tax exemption and abatement entered into by the Township Committee and applicants.

A. Tax exemption and abatement. Exemptions and abatements from local real property taxes for new construction of commercial or industrial structures may be granted on a tax phase-in basis pursuant to N.J.S.A. 40:A:21-10c for a five-year period, if authorized on an individual basis after review, evaluation and approval of each application by the Township Committee after proper application has been made. Application shall be upon the form prescribed by the Director of the Division of Taxation in the Department of the Treasury.

B. Construction. Applicants for tax exemption and abatement for construction of new industrial or commercial structures shall provide the Township Committee with an application upon the form prescribed by the Director of Taxation in the Department of the Treasury, and shall in addition to the information requested on such form, set forth in the application:

(1) A general description of the construction for which exemption or abatement is sought;

(2) A legal description of all real estate necessary for the construction;

(3) Plans, drawings and other documents as may be required by the Township Committee to demonstrate the structure and design of the construction;

(4) A description of the number, classes and types of employees to be employed at the construction site within two years of completion of the construction;

(5) A statement of the reasons for seeking tax exemption and abatement on the construction, and a description of the benefits to be realized by the applicant if tax agreement is granted;

(6) Estimates of the cost of completing the construction;

(7) A statement showing the real property taxes currently being assessed at the construction site; estimated tax payments that would be made annually by the applicant on the construction during the period of the tax agreement; and estimated tax payments that would be made by the applicant on the construction during the first full year following the termination of the tax agreement;

(8) A description of any lease agreement, between the applicant and proposed users of the construction, and a history and description of the users' businesses; and

(9) Such other pertinent information as the Township Committee may require.

C. Tax agreements.

(1) Applications for tax agreements must be filed with the tax Assessor within 30 days, including Saturdays and Sundays, following the completion of the construction, in order to be eligible for tax exemption and abatement thereon. The following procedures, which are in accordance with N.J.S.A. 40A:21-10 through 40A:21-13 shall govern tax agreements between the Township of South Harrison and developers for the exemption and abatement of real property taxes. All tax agreements shall be applied for and granted on a project basis.

(a) Upon approval of an ordinance authorizing an agreement for tax exemption and abatement for a particular project, the Township Committee shall enter into a written agreement with the applicant for the exemption of local real property taxes. The agreement shall provide for the applicant to pay to the Township of South Harrison in lieu, of full property tax payments an amount annually to be computed by using the tax phase-in basis formula pursuant to Subsection c of N.J.S.A. 40A-21-10. To wit:

[1] In the first full tax year after completion, no payment in lieu of taxes otherwise due;

[2] In the second tax year, an amount not less than 20% of taxes otherwise due;

[3] In the third tax year, an amount not less than 40% of taxes otherwise due;

[4] In the fourth tax year, an amount not less than 60% of taxes otherwise due;

[5] In the fifth tax year, an amount not less than 80% of taxes otherwise due.

(b) All tax agreements hereunder shall be in effect for no more than five full tax years next following the date of completion of the construction.

(c) All projects subject to tax agreement hereunder shall be subject to all applicable federal, state and local laws and regulations on pollution control, worker safety, discrimination in employment, housing provision, zoning, planning and building code requirements.

(2) That percentage which the payment in lieu of taxes for a property bears to the property tax which would have been paid had an exemption not been granted for the property under the agreement shall be applied to the valuation of the property to determine the reduced valuation of the property to be included in the valuation of the municipality for determining equalization for county tax apportionment and school aid during the term of the tax agreements covering the properties, and at the termination of an agreement for a property the reduced valuation procedure required under this section shall no longer apply.

(3) Within 30 days after the execution of a tax agreement, the Township of South Harrison shall forward a copy of the agreement to the Director of the Division of Local Government Services in the Department of Community Affairs.

(4) If during any tax year prior to the termination of the tax agreement, the property owner ceases to operate or disposes of the property, or fails to meet the conditions for qualifying, then the tax which would have otherwise been payable for each tax year shall become due and payable from the property owner as if no exemption and abatement had been granted. The Township Committee shall notify the property owner and Tax Collector forthwith, and the Tax Collector shall within 15 days thereof notify the owner of the property of the amount of taxes due.

(5) However, with respect to the disposal of the property, where it is determined that the new owner of the property will continue to use the property pursuant to the conditions which qualified the property, no tax shall be due, the exemption shall continue, and the agreement shall remain in effect.

(6) At the termination of a tax agreement, a project shall be subject to all applicable real property taxes as provided by state law and regulation and local ordinance, but nothing herein shall prohibit a project, at the termination of an agreement, from qualifying for and receiving the full benefits of any other tax preferences provided by law.

(7) The Assessor shall determine, on October 1 of the year following the date of the completion of an improvement or construction the true taxable value thereof. Except for projects subject to tax agreement, the amount of tax to be paid for the first full tax year following completion shall be based on the assessed valuation of the property for the previous year, minus the amount of the abatement, if any, allowed pursuant to P.L. 1991, c. 441, plus any portion of the assessed valuation of the improvement or construction not allowed an exemption pursuant to P.L. 1991, c. 441. Subject to the provisions of the adopting ordinance, the property shall continue to be treated in the appropriate manner for each of the five full tax years subsequent to the original determination by the Assessor.

(8) Additional construction, completed on a property granted a previous exemption pursuant to this article during the period in which such previous exemption or abatement is in effect, shall be qualified for an exemption or abatement, just as if such property had not received a previous exemption or abatement. In such case, the additional construction shall be considered as separate for the purposes of calculating exemptions and abatements pursuant to this article.

(9) No exemption or abatement shall be granted, or tax agreement entered into, pursuant to this article with respect to any property far which property taxes are delinquent or remain unpaid, or for which penalties for nonpayment of taxes are due.