[Adopted by Ord. No. 1992-17 (Sec. 17-2 of the 1987 Revised General Ordinances)]
This article shall be known as the "Five-Year Exemption and
Abatement Law for Commercial and Industrial Structures."
The purpose of this article is to establish procedures whereby
qualified individuals and corporations may avail themselves of the
property tax exemptions and abatements which the Borough of Red Bank
is permitted by law to grant pursuant to Chapter 441, Laws of New
Jersey, 1991.[1]
[1]
Editor's Note: See N.J.S.A. 40A:21-1 et seq.
The specific area covered by this article is all properties
within the Borough of Red Bank fronting on Shrewsbury Avenue beginning
at Newman Springs Road and going northerly to the railroad line now
or formerly Consolidated Rail Corporation. It is the desire and intent
of this article to promote the construction and rehabilitation of
structures in this area and to combat economic decline.
Terms as used in this article shall have the meaning provided
below:
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 this
Act.[1]
That area on Shrewsbury Avenue designated in § 628-8 of this article which has been determined to be an area in need of rehabilitation or redevelopment pursuant to law in which a significant portion of residential, commercial and industrial structures are in a deteriorated or substandard condition; there exists a continuing pattern of property tax arrearage and vacant or underutilized properties; and, where a program of rehabilitation, improvement, and new in-fill construction will prevent further deterioration and promote the overall development of the municipality.
The officer of the Borough of Red Bank 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 used 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 Borough; assist in the economic development
of the Borough; maintain or increase the tax base of the Borough;
and maintain or diversify and expand commerce within the Borough.
It shall not include any structure or part thereof used or to be used
by any business relocated from another qualifying municipality.
Substantially ready for the intended use for which a building
or structure is constructed, improved or converted.
The provision of a new 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.
The alteration or renovation of a building or structure in
such manner as to convert the building or structure from its previous
use to use as a commercial or industrial structure.
Only the cost or fair market value of direct labor and materials
used in improving, converting or constructing a building or structure,
including any architectural, engineering, and contractor's fees
associated therewith, as the owner of the property shall cause to
be certified to the governing body by an independent and qualified
architect, following the completion of the project.
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 this 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 place for work. In the case of a 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 this Act.
[1]
Editor's Note: The Act, referred to herein, is P.L. 1991,
Chapter 441.
A.
With regard to exemption from taxation of improvements to commercial
or industrial structures, the municipality shall regard, in determining
the value of real property, 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.
Grants of exemptions for commercial and industrial improvements will
be authorized on an individual basis by the governing body after review,
the valuation and approval of each application. All tax agreements
shall be applied for and granted on a per-project basis.
With regard to tax exemption and abatement for new construction
of commercial or industrial structures, all applicants shall provide
the governing body with an application setting forth:
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, drawings and other documents as may be required by the governing
body to demonstrate the structure and design of the project;
D.
A description of the number, classes and type of employees to be
employed at the project site within two years of 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:
(1)
The
real property taxes currently being assessed at the project site;
(2)
Estimated
tax payments that would be made annually by the applicant on the project
during the period of the agreement; and
(3)
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.
A description of any lease agreements between the applicant and proposed
users of the commercial or industrial project, and a history and description
of the users' businesses;
I.
Such other pertinent information as the governing body may require.
On approval of the governing body of a tax agreement for a particular
project, the governing body may enter into a written agreement with
the applicant for the exemption and abatement of local real property
taxes. The agreement shall provide for the applicant to pay to the
municipality in lieu of full property tax payments an amount annually
to be computed by the tax phase-in basis formula, as follows:
A.
Tax phase-in basis. The agreement may provide for the applicant to
pay to the municipality in lieu of full property tax payments an amount
equal to a percentage of taxes otherwise due, according to the following
schedule:
(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 year, an amount not less than 80% of taxes otherwise
due.
A.
All tax agreements entered into under this article shall be in effect
for no more than five full tax years following the date of completion
of the project.
B.
All projects subject to 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 provision, 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 be included in
the valuation of the municipality for determining equalization for
county tax apportionment and school aid during the term of the tax
agreement for a property. The reduced valuation procedure required
under this article shall no longer apply.
D.
Within 30 days after the execution of a tax agreement, the Borough
Clerk shall forward a copy of the agreement to the Director of the
Division of Local Government Services and the Department of Community
Affairs and to such other officials or agencies that the governing
body may direct.
A.
Meeting of conditions by property owner.
(1)
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 governing body 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.
(2)
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.
B.
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 Borough 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 tax agreement, pursuant to this article, 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 this article, plus any portion of the assessed valuation of the
improvement, conversion or construction not allowed an exemption pursuant
to this article. The property owner shall continue to be treated in
the appropriate manner under the terms of this article and the tax
agreement, if any, for each of the five full tax years subsequent
to the original determination by the Borough Assessor.
Any additional improvement, conversion or construction, completed
on a property granted a previous exemption or abatement pursuant to
this article 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. In such case, the additional improvement,
conversion or construction shall be considered as separate for the
purposes of calculating exemptions and abatements pursuant to this
article, 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.
No exemption or abatement shall be granted, or tax agreement
entered into, pursuant to this article with respect to any property
for which property taxes are delinquent or remain unpaid, or for which
penalties for nonpayment of taxes are due.
A.
No exemption or abatement shall be granted pursuant to this article
except upon written application therefor 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 Borough of Red Bank, and shall be
filed with the Borough Assessor within 30 days, including Saturdays
and Sundays, following the completion of the improvement, conversion
alteration or construction. Every application for exemption, or exemption
and abatement, 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 qualified as an improvement,
a conversion alteration or construction pursuant to the provisions
of this article and the tax agreement, if any. The granting of an
exemption, or exemption and abatement, or tax agreement shall be recorded
and made a permanent part of the official tax records of the Borough,
which record shall contain a notice of the termination date thereof.
The exemption and abatement of real property taxes pursuant
to this article shall apply to property taxes levied for municipal
purposes, school purposes, county government purposes and for the
purposes of funding any other property tax exemptions or abatements.
The Borough Tax Collector shall include a notice describing
the exemption program or exemption and abatement program provided
for by this article and the application procedure therefor, in the
mailing of annual property bills to each owner of a building or structure
located in the area in which exemptions, or exemptions and abatements,
may be allowed pursuant to this article during the first year following
adoption of the article.
A.
The Tax Assessor shall report, on or before September 1 of each year,
to the Mayor and Council as to the total amount of real property taxes
exempted and the total amount abated within the Borough in the current
tax year under this article.
B.
The report shall state, for the current tax year, the total amount
of payments made in lieu of taxes according to the formula utilized
by the Borough and the difference between that total amount and the
total amount of real property taxes which would have been paid on
the project had the tax agreement not been in effect.
No exemption or abatement granted by any prior ordinance or
law shall be affected or terminated by this article, but shall remain
in effect for the time and under the terms granted as if the ordinance
had not been superseded or repealed.
This article shall take effect immediately, and exemptions and
abatements may be granted, and tax agreements entered into, for the
first full tax year commencing after enactment and for tax years thereafter.
