[HISTORY: Adopted by the Township Council of the Township of Jefferson as indicated in article histories. Amendments noted where applicable.]
Article I Five-Year Real Property Tax Exemption and Abatement
[Adopted 4-15-2009 by Ord. No. 11-09]
The definitions contained in N.J.S.A. 40A:21-3 are incorporated herein by reference as if set forth at length. As used in this article, words shall have the meanings as so defined unless a different meaning is expressed.
- MIXED USE STRUCTURE
- A structure with two or more different uses, such as, but not limited to, residential, commercial, or industrial.
The Township Council hereby authorizes the implementation and utilization of tax exemption and abatement in accordance with Article VIII, Section I, Paragraph 6, of the New Jersey Constitution and establishes the eligibility of multiple dwellings, mixed use structures, commercial and industrial structures for five-year tax exemptions and abatements as authorized by N.J.S.A. 40A:21-1, in the Township to the extent any specific redevelopment area shall qualify pursuant to state law and as set forth herein.
Improvements costing greater than $5,000 to multiple dwellings are eligible for tax exemption. The Assessor's full and true value of the improvements shall be regarded as not increasing the value of the property for a period of five years commencing with the completion of an improvement 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 existing thereon immediately prior to the improvement unless there is damage to the multiple dwelling through action of the elements sufficient to warrant a reduction. As used in this section, "improvements" shall not be construed to include an increase in the number of dwelling units nor the reduction of the total number of dwelling units to less than three.
Improvements costing greater than $5,000 to mixed use, commercial and industrial structures are eligible for tax exemption for a period of five years commencing with the completion of an improvement. The Assessor's full and true value of the improvements shall be regarded as not increasing the value of the property notwithstanding that the value of the property to which the improvement is made is increased thereby. During the exemption period, the assessment on the property shall not be less than the assessment existing thereon immediately prior to the improvements, unless there is damage to the structure through action of the elements sufficient to warrant a reduction.
Construction of new mixed use, commercial and industrial structures shall be eligible for tax exemption and/or tax abatement commencing with completion of the project. Any such exemption and abatement shall be subject to the owner and the Township of Jefferson entering into a tax agreement pursuant to the provisions of N.J.S.A. 40A:21-10.
The applicant, property owner, shall furnish to the Township of Jefferson all the information required by N.J.S.A. 40A:21-9. In addition, every applicant shall file the application form prescribed by the Director of the New Jersey Division of Taxation in the Department of Treasury with the Tax Assessor, as a condition to approval, within 30 days, including Saturdays and Sundays, following the completion of the improvement. Every application for exemption or exemption and abatement so filed shall be approved and allowed by the Assessor to the degree that the application is consistent with the provisions of this article, provided that the improvement for which the application is made qualifies as such, pursuant to the provisions of this article, and the aforesaid, duly executed tax agreement. The granting of an exemption and/or abatement and tax agreement, if appropriate, 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.
No tax exemption shall be granted pursuant to this article unless approved by resolution of the Township Council on an individual, or case-by-case, basis after a financial analysis of the benefit of the tax agreement and review and approval of each application for compliance with the terms of this article.
The tax agreement shall provide that the applicant shall pay to the Township of Jefferson in lieu of full property tax payments an amount annually to be computed by one, but in no case a combination, of the three formulas set forth in N.J.S.A.40A:21-10, also known as the "cost", "gross revenue," or "tax phase in" basis of providing for the payment in lieu of taxes. The following are the three formulae which may be incorporated in said tax agreement.
Cost basis. The tax agreement may provide for the applicant to pay to the municipality in lieu of full property tax payments an amount equal to 2% of the cost of the project. For the purposes of the tax agreement, "the cost of the project" means only the cost or fair market value of direct labor and all materials used in the construction, expansion, or rehabilitation of all buildings, structures, and facilities at the project site, including the costs, if any, of land acquisition and land preparation, provision of access roads, utilities, drainage facilities, and parking facilities, together with architectural, engineering, legal, surveying, testing, and contractors' fees associated with the project; which the applicant, property owner, shall cause to be certified and verified to the governing body by an independent and qualified architect, following the completion of the project.
Gross revenue basis. The tax agreement may provide for the applicant to pay to the Township in lieu of full property tax payments an amount annually equal to 15% of the annual gross revenues from the project. For the purposes of the agreement, "annual gross revenues" means the total annual gross rental and other income payable to the owner of the project from the project. If in any leasing, any real estate taxes or assessments on property included in the project, any premiums for fire or other insurance on or concerning property included in the project, or any operating or maintenance expenses ordinarily paid by the landlord, are to be paid by the tenant, then those payments shall be computed and deemed to be part of the rent and shall be included in the annual gross revenue. The tax agreement shall establish the method of computing the revenues and may establish a method of arbitration by which either the landlord or tenant may dispute the amount of payments so included in the annual gross revenue.
Tax phase-in basis. The tax agreement may provide for the applicant to pay to the Township in lieu of full property tax payments an amount equal to a percentage of taxes otherwise due, according to the following schedule:
In the first full year after completion, no payment in lieu of taxes otherwise due;
In the second full year after completion, an amount not less than 20% of taxes otherwise due;
In the third full year after completion, an amount not less than 40% of taxes otherwise due;
In the fourth full year after completion, an amount not less than 60% of taxes otherwise due;
In the fifth full year after completion, an amount not less than 80% of taxes otherwise due.
An additional improvement or construction, completed on a property granted a previous exemption or abatement during the period in which such previous exemption or abatement is in effect, shall be qualified for an exemption and/or abatement, just as if such property had not received a previous exemption or abatement. In such case, the additional improvement or construction shall be considered as separate for the purposes of calculating exemptions and abatements, except that the assessed value of any previous improvement or construction shall be added to the assessed valuation as it was prior to that improvement or construction for the purpose of determining the assessed valuation of the property from which any additional abatement is to be subtracted.
Every application for exemption or abatement and every exemption and abatement granted shall be subject to all the provisions of N.J.S.A. 40A:21-1, et seq.
All tax agreements entered into pursuant to this article shall provide that the applicant is subject to all federal, state and local laws and ordinances.
If during any tax year prior to the termination of the tax abatement or exemption agreement, the applicant ceases to operate or disposes of the property or otherwise fails to meet the conditions of eligibility, the tax otherwise due if there had been no abatement or exemption shall become due and payable by the property owner. The Tax Assessor shall notify the property owner and the Tax Collector forthwith, and the Tax Collector shall within 15 days thereof notify the owner of the property of the amount of taxes due. However, with respect to sale or other disposal of the property which it is determined that the new owner of the property will continue to use the property pursuant to the conditions which were set forth in the tax abatement or exemption agreement, the tax agreement including any exemption and/or or abatement shall continue.
In the event of default by the applicant, property owner, including but not limited to the failure to make timely tax or in lieu of tax payments to the Township of Jefferson, the municipality shall notify the applicant, in writing, of said default. The applicant shall have 30 days to cure any default. Following the thirty-day cure period, the Township shall have the right to proceed against the property pursuant to the In Rem Tax Foreclosure Act, N.J.S.A. 54:4-1, et seq. and/or may cancel the financial agreement upon 30 days' notice to the applicant.
At the termination of a tax abatement or tax agreement, a project shall be subject to all applicable real property taxes as provided by state law and local ordinance.
No application for tax exemption or abatement shall be accepted by the Township unless accompanied by full payment of the required application fee. Such fees shall be based on the estimated total project cost as set forth in a schedule on file with the Office of the Township Clerk. The Township shall verify the estimated total project cost as being reasonable. These fees shall be received as compensation for the financial analysis and other professional review and related work performed by the Township's consultants, departments and agencies. Said fees, or a portion thereof, may be refunded to the applicant, if such provision is made part of the tax agreement.
Application Fee Schedule. The following fees are based on the estimated cost of the improvement:
Cost of Improvement
$5,000 up to $50,000
$50,001 to $150,000-
$150,001 to $300,000
$300,001 to $500,000
$500,001 and above
$1,750 plus $1,000 for each $500,000 of additional improvement costs; example, an applicant estimating improvement costs of $1,000,001, and up to $1,500,000 shall pay a fee of $2,750
The Township Clerk shall forward a certified copy of this ordinance to the State of New Jersey Department of Community Affairs.
Editor's Note: The words "this ordinance" refer to Ord. No. 11-09.
No tax abatements and/or exemptions shall be granted for any property for which property taxes or any other municipal charges are delinquent or remain unpaid or for which penalties for nonpayment are due for a period of at least one year, or for any property not being used in conformance with local, state or federal law or ordinance.
Appeal of any determination made by the Township of Jefferson Tax Assessor under the terms of this article shall be made to the Hudson County Board of Taxation.
Where consistent with the context in which used in this article, words importing the singular shall include the plural; words importing the plural shall include the singular; and, words importing one gender shall include all other genders.
Should any provision of this article be inconsistent with the provisions of any prior ordinance(s), the inconsistent provisions of such prior ordinances are hereby repealed, but only to the extent of the inconsistencies.
In the event that any provision of this article or the application thereof to any person or circumstance is declared invalid by a court of competent jurisdiction, such declaration of invalidity shall not affect any other provision or application of this article which may be given effect, and, to realize this intent, the provisions and applications of this article are declared to be severable.
Captions contained in this article have been inserted only for the purpose of facilitating reference to the various sections, and are not intended and shall not be utilized to construe the intent and meaning of the text of any specific section.