[Amended 12-16-2008 by Ord. No. 35-2008; 3-5-2019 by Ord. No. 14-2019]
A.
The New Jersey Constitution authorizes the state legislature
to enact general laws under which municipalities may adopt ordinances
granting exemptions or abatements from taxation on buildings and structures
in areas declared in need of rehabilitation in accordance with statutory
criteria, within such municipalities and to the land comprising the
premises upon which such buildings or structures are erected and which
is necessary for the fair enjoyment thereof. Such exemptions shall
be for limited periods of time as specified by law, but not in excess
of five years. See Article 8, Section 1, paragraph 6.
B.
This article is enacted pursuant to the Five-Year
Exemption and Abatement Law, N.J.S.A. 40A:21-1 et seq. (hereinafter
referred to as the "Act"). This article is also enacted pursuant to
the New Jersey Urban Enterprise Zones Act, N.J.S.A. 52:27H-60 et seq.
and N.J.S.A. 40A:12A-5g of the Local Redevelopment and Housing Law.
The governing body of the municipality finds
and declares that there are areas within the municipality which are
in need of rehabilitation by private enterprise. The governing body
further finds and declares that tax incentives are useful economic
stimulants to promote the construction and rehabilitation of commercial
and industrial structures in areas threatened with economic and social
decline. It is the intent and purpose of this article to permit the
municipality the greatest flexibility possible within the constitutional
limitations to address problems of deterioration and decay.
As used in this article, the following terms
shall have the following meanings as set forth in the Act.
That portion of the assessed value of a property, as it existed
prior to construction, improvement or conversion of a building or
structure thereon, which is exempted from taxation pursuant to the
Act.
A duration of time comprising 365 days, or 366 days when
the included month of February has 29 days, that commences on the
date that an exemption or abatement for a project becomes effective
pursuant to § 16 of P.L. 1991, c. 441 (N.J.S.A. 40A:21-16).
A portion or all of a municipality which has been determined
to be an area in need of rehabilitation or redevelopment pursuant
to the Local Redevelopment and Housing Law, P.L. 1992, c. 79 (N.J.S.A.
40A:12A-1 et seq.), a blighted area as determined pursuant to the
Blighted Areas Act, P.L. 1949, c. 187 (N.J.S.A. 40:55-21.1 et seq.[1]), or which has been determined to be in need of rehabilitation
pursuant to P.L. 1975, c. 104 (N.J.S.A. 54:4-3.72 et seq.[2]), P.L. 1977, c. 12 (N.J.S.A. 54:4-3.95 et seq.[3]), or P.L. 1979, c. 233 (N.J.S.A. 54:4-3.121 et seq.[4]).
The officer of a taxing district charged with the duty of
assessing real property for the purpose of general taxation.
A structure, or part thereof, used for the manufacturing,
processing or assembling of material or manufactured products, or
for research, office, industrial, commercial, retail, recreational,
hotel or motel facilities, or warehousing purposes, or for any combination
thereof, which the governing body determines will tend to maintain
or provide gainful employment within the municipality, assist in the
economic development of the municipality, maintain or increase the
tax base of the municipality, and maintain or diversify and expand
commerce within the municipality. It shall not include any structure,
or part thereof, used or to be used by any business relocated from
another qualifying municipality unless: the total square footage of
the floor area of the structure, or part thereof, used or to be used
by the business at the new site, together with the total square footage
of the land used or to be used by the business, exceeds the total
square footage of that utilized by the business at its current site
of operations by at least 10%; and the property that the business
is relocating to has been the subject of a remedial action plan costing
in excess of $250,000 performed pursuant to an administrative consent
order entered into pursuant to authority vested in the Commissioner
of Environmental Protection under. P.L. 1970, c. 33 (N.J.S.A. 13:1D-1
et seq.), the Water Pollution Control Act, P.L. 1977, c. 74 (N.J.S.A.
58:10A-1 et seq.), the Solid Waste Management Act, P.L. 1970, c. 39
(N.J.S.A. 13:1E-1 et seq.), and the Spill Compensation and Control
Act, P.L. 1976, c. 141 (N.J.S.A. 58:10-23.11 et seq.).
Substantially ready for the intended use for which a building
or structure is constructed, improved or converted.
The provision of a new dwelling, multiple-dwelling or commercial
or industrial structure, or the enlargement of the volume of an existing
multiple-dwelling or commercial or industrial structure by more than
30%, but shall not mean the conversion of an existing building or
structure to another use.
That portion of the Assessor's full and true value of any
improvement, conversion, alteration or construction not regarded as
increasing the taxable value of a property pursuant to the Act.
A modernization, rehabilitation, renovation, alteration or
repair which produces a physical change in an existing building or
structure that improves the safety, sanitation, decency or attractiveness
of the building or structure as a place for human habitation or work,
and which does not change its permitted use. In the case of a multiple
dwelling, it includes only improvements which affect common areas
or elements or three or more dwelling units within the multiple dwelling.
In the case of a multiple-dwelling or commercial or industrial structure,
it shall not include ordinary painting, repairs and replacement of
maintenance items, or an enlargement of the volume of an existing
structure by more than 30%. In no case shall it include the repair
of fire or other damage to a property for which payment of a claim
was received by any person from an insurance company at any time during
the three-year period immediately preceding the filing of an application
pursuant to the Act.
The construction, improvement or conversion of a structure
in an area in need of rehabilitation that would qualify for an exemption,
or an exemption and abatement, pursuant to P.L. 1991, c. 441 (N.J.S.A.
40A:21-1 et seq.).
[1]
Editor's Note: N.J.S.A. 40:55-21.1 to 40:55-21.14
were repealed by L. 1992, c. 79, § 59. See now N.J.S.A.
40A:12A-1 et seq.
[2]
Editor's Note: N.J.S.A. 54:4-3.72 to 54:4-3.78
were repealed by L. 1991, c. 441, § 22, effective 1-18-1992.
See now N.J.S.A. 40A:21-1 et seq.
[3]
Editor's Note: N.J.S.A. 54:4-3.95 to 54:4-3.112
were repealed by L. 1991, c. 441 § 22, effective 1-18-1992.
See now N.J.S.A. 40A:21-1 et seq.
[4]
Editor's Note: N.J.S.A. 54:4-3.121 to 54:4-3.129
were repealed by L. 1991, c. 441 § 22, effective 1-18-1992.
See now N.J.S.A. 40A:21-1 et seq.
A.
An ordinance adopted pursuant to the Act may be amended
from time to time. An amendment to an ordinance shall not affect any
exemption, abatement or tax agreement previously granted and in force
prior to the amendment.
B.
Application for exemptions and abatements from taxation
may be filed pursuant to an ordinance so adopted to take initial effect
in the tax year in which the ordinance is adopted, and for tax years
thereafter as set forth in the Act, but no application for exemptions
or abatements shall be filed in the 11th tax year, or any tax year
thereafter, unless the ordinance is readopted by the governing body
pursuant to the Act.
A.
The areas within the municipality located within the
Urban Enterprise Zone, as amended from time to time, are areas in
need of rehabilitation. Application for exemptions and abatements
from taxation may be filed with the Assessor of the municipality for
eligible projects located within the Urban Enterprise Zone.
B.
The areas within the municipality located within the
Center City Redevelopment Area, as amended from time to time, are
areas in need of rehabilitation. Application for exemptions and abatements
from taxation may be filed with the Assessor of the municipality for
eligible projects located within the Center City Redevelopment Area.
A.
This article provides for the exemption from taxation
of improvements to commercial and industrial structures. In determining
the value of real property, the municipality shall regard up to the
Assessor's full and true value of the improvements as not increasing
the value of the property for a period of five years, notwithstanding
that the value of the property to which the improvements are made
is increased thereby. During the exemption period, the assessment
on the property shall not be less than the assessment thereon existing
immediately prior to the improvements, unless there is damage to the
structure through action of the elements sufficient to warrant a reduction.
B.
Exemptions for commercial and industrial improvements
shall be authorized on an individual basis after review, evaluation
and approval of each application by the governing body of the municipality.
Applicants for exemptions or abatements from
taxation for new construction of commercial or industrial structures
shall provide the municipality with an application setting forth the
following information:
A.
A general description of a project for which exemption
and abatement is sought;
B.
A legal description of all real estate necessary for
the project;
C.
Plans and drawings which illustrate the general design
of the project and all the structures to be constructed;
D.
The total number of full-time and part-time employees
employed at the subject property prior to the new construction. A
description of the number, classes and type of employees to be employed
at the project site within two years of the completion of the project;
E.
A statement of the reasons for seeking tax exemption
and abatement on the project, and a description of the benefits to
be realized by the applicant if a tax agreement is granted;
F.
Estimates of the cost of completing such project;
G.
A statement showing the real property taxes currently
being assessed at the project site, estimated tax payments that would
be made annually by the applicant on the project during the period
of the agreement and estimated tax payments that would be made by
the applicant on the project during the first full year following
the termination of the tax agreement;
H.
If the project is a commercial or industrial structure,
a description of any lease agreements between the applicant and proposed
users of the project, and a history and description of the users'
businesses.
All tax agreements shall be applied for and
granted on a project basis in accordance with the following procedures:
A.
All applications for exemptions and abatements from
taxation shall be reviewed by the Assessor of the municipality to
insure that they were filed in a timely manner, are complete and comply
with the applicable state law and municipal law. The Assessor shall
thereafter refer the application, along with a tax agreement and ordinance,
to the governing body of the municipality for its review, evaluation
and approval.
B.
The Standard Form Five-Year Tax Agreement is hereby
approved. All tax agreements shall be approved using only the standard
form with the individual application for exemption and abatement from
taxation attached as an exhibit to the agreement.
C.
The governing body of the municipality must review
and evaluate all applications for exemptions or abatements from taxation
before approving them.
D.
No exemption or abatement for a commercial or industrial
improvement shall be granted until the application and tax agreement
is approved by ordinance of the governing body of the municipality.
The adopting ordinance shall include the following findings and determinations:
(1)
The project is a commercial or industrial project
which is eligible for exemption or abatement from taxation.
(2)
The project will maintain or provide gainful employment
within the municipality.
(3)
The project will assist in the economic development
of the municipality.
(4)
The project will maintain or increase the tax ratable
base of the municipality.
(5)
The project will maintain or diversify and expand
commerce within the municipality.
(6)
The economic benefits derived from the project outweigh
any negative effects associated with granting the exemption or abatement
from taxation.
The tax agreement shall provide for the applicant
to pay to the municipality, in lieu of full property tax payments,
an amount annually based on the tax phase-in approach, which shall
be an amount equal to a percentage of taxes otherwise due according
to the following schedule:
A.
In the first full year after completion, no payment
in lieu of taxes otherwise due.
B.
In the second full year after completion, an amount
not less than 20% of the taxes otherwise due.
C.
In the third full year after completion, an amount
not less than 40% of taxes otherwise due.
D.
In the fourth full year after completion, an amount
not less than 60% of taxes otherwise due.
E.
In the fifth full year after completion, an amount
not less than 80% of taxes otherwise due.
A.
All tax agreements entered into by the municipality
pursuant to the Act shall be in effect for no more than the five full
calendar years next following the date of completion of the project.
B.
All projects subject to a tax agreement as provided
herein shall be subject to all applicable federal, state and local
laws and regulations on pollution control, worker safety, discrimination
in employment, housing provisions, zoning, planning and building code
requirements.
C.
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 and abatement 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 the
Act shall no longer apply.
D.
Within 30 days after the execution of a tax agreement,
the City Clerk shall forward a copy of the agreement to the Director
of the Division of Local Government Services in the Department of
Community Affairs.
A.
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 Assessor of the municipality shall
notify the property owner and the tax collector forthwith. The tax
collector shall, within 15 days thereof, notify the owner of the property
of the amount of taxes due.
B.
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 and the abatement shall
continue, and the agreement shall remain in effect.
C.
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.
The Assessor shall determine, on October 1 of
the year following the date of the completion of an improvement, conversion
or construction, the true taxable value thereof. Except for projects
subject to a tax agreement pursuant to the Act and this article, the
amount of tax to be paid for the tax year in which the project is
completed shall be based on the following:
A.
The assessed valuation of the property for the current
tax year, minus the amount of the abatement, if any, allowed pursuant
to the Act and prorated, plus any portion of the assessed valuation
of the improvement, conversion or construction not allowed an exemption
pursuant to the Act, also prorated.
B.
Subject to the provisions of the adopting ordinance,
the property shall continue to be treated in the appropriate manner
for each of the four tax years subsequent to the original determination
by the Assessor and shall be prorated for the final tax year in which
the exemption or abatement expires.
A.
This article also provides that an additional improvement,
conversion or construction completed on a property granted a previous
exemption or abatement pursuant to the Act during the period in which
such previous exemption or abatement is in effect shall be qualified
for an exemption, or exemption and abatement, just as if such property
had not received a previous exemption or abatement.
B.
In such case, the additional improvement, conversion
or construction shall be considered as separate for the purposes of
calculating exemptions and abatements, pursuant to the Act, except
that the assessed value of any previous improvement, conversion or
construction shall be added to the assessed valuation as it was prior
to that improvement, conversion alteration or construction for the
purpose of determining the assessed valuation of the property from
which any additional abatement is to be subtracted.
A.
No exemption or abatement shall be granted, or tax
agreement entered into, pursuant to the Act with respect to any property
for which property taxes are delinquent or remain unpaid. The existence
of a tax installment agreement shall not make the property eligible.
B.
Residential dwellings and multiple dwellings are not
eligible for exemption or abatement from taxation for the improvements,
conversion alteration or construction pursuant to this article.
A.
No exemption or abatement shall be granted pursuant
to the Act except upon written application filed with and approved
by the Assessor of the taxing district wherein the improvement, conversion
alteration or construction is made.
B.
Every application shall be on a form prescribed by
the Director of the Division of Taxation in the Department of the
Treasury and provided for the use of claimants by the governing body
of the municipality constituting the taxing district and shall be
filed with the Assessor within 30 days, including Saturdays and Sundays,
following the completion of the improvement, conversion alteration
or construction.
C.
Every application for exemption, or exemption and
abatement, within a municipality adopting the provisions of the Act
which is filed within the time specified shall be approved and allowed
by the Assessor to the degree that the application is consistent with
the provisions of the adopting ordinance or the tax agreement, provided
that the improvement, conversion alteration or construction for which
the application is made qualifies as an improvement, a conversion
alteration or construction pursuant to the provisions of the Act and
the tax agreement, if any.
D.
In the absence of a tax agreement to the contrary,
the granting of an exemption, or exemption and abatement, shall relate
back to, and take effect as of, the date of completion of the project,
or portion or stage of the project for which the exemption, or exemption
and abatement, is granted. It shall continue for five annual periods
from that date. The grant of the exemption, or exemption and abatement,
or tax agreement shall be recorded and made a permanent part of the
official tax records of the taxing district, which record shall contain
a notice of the termination date thereof.
