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  • NJ A391
  • Requires certain energy tax receipts to be paid directly to municipalities.
Introduced
(1/27/2016)
In Committee
(1/27/2016)
Crossed OverPassedSignedDead/Failed/Vetoed
2016-2017 Regular Session
This bill changes the manner in which energy tax receipts are distributed to municipalities. Under current law, energy tax receipts are all collected by the State. Often, through the annual appropriations act, the State retains a portion of the energy tax receipts that are directed to be distributed to municipalities under statutory law. This bill requires, commencing with State fiscal year 2014, that the State Treasurer make the calculation of the amounts due to municipalities pursuant to statutory law, adjusting for inflation, and that payments be made directly to the municipalities by the energy taxpayers. In State fiscal year 2014, the amount to be apportioned to, and collected by, the municipalities will be $1,108,115,000. That represents the amount required to be distributed to municipalities under the statutory provisions of the "Energy Tax Receipts Property Tax Relief Act," N.J.S.A.52:27D-438 et seq., including annual increases for inflation. The State Treasurer will make this apportionment and advise each energy taxpayer of the amounts to be remitted directly to each municipality, based on the existing statutory apportionment method, and advise each municipality of the amounts due. This bill also requires the State to distribute to each municipality an amount equal to the difference between its total payment of Consolidated Municipal Property Tax Relief Aid (CMPTRA) and Energy Tax Receipts Property Tax Relief Aid (ETR Aid) in Fiscal Year 2008 and Fiscal Year 2012. This additional State aid will restore approximately $331 million in reductions to CMPTRA and ETR Aid that were made due to State budget constraints in Fiscal Years 2009, 2010, and 2011. The bill also modifies the existing Energy Tax Receipts Property Tax Relief Act "poison pill" protection because the aid which had been distributed by the State will be directly paid by the energy taxpayers and to ensure that each municipality receives its share of energy tax receipts in an amount equal to the difference between its total payment of Consolidated Municipal Property Tax Relief Aid and Energy Tax Receipts Property Tax Relief Aid in Fiscal Year 2008 and Fiscal Year 2012. The bill also phases in the distribution of additional Energy Tax Receipts Property Tax Relief Aid to municipalities over a period of five fiscal years. Beginning in the fifth fiscal year, energy taxes would be paid directly to municipalities. Municipalities will be permitted to use the additional State aid to reduce the amounts they are required to raise by local property tax levy for municipal purposes, to reduce municipal debt, rehire police officers and firefighters laid off in the previous four fiscal years, and for extraordinary costs related to an emergency declared by the President of the United States or the Governor. The bill also provides an exception for municipalities that issue bonds pursuant to the "Municipal Qualified Bond Act." To assist municipalities in issuing bonds, that act allows municipalities to have various resources including State Aid held by the State Treasurer, who pays the amounts due under the bonds directly to the paying agent. So that this program can continue effectively, the amendments make an exception to the general rule that Energy Tax Relief will be paid directly to municipalities. For a municipality that issues or has outstanding bonds under the act, the energy taxpayers will make payment to the State Treasurer, who will distribute any overage to the municipality. The purpose of this legislation is to ensure that municipalities are able to collect the amounts of energy tax receipts that they were originally promised when the State revised the collection and distribution process in 1997. This bill does not change the requirement under current law that amounts received by a municipality in excess of the amounts received in State Fiscal Year 2002 must be used for property tax relief.
Not specified
Introduced, Referred to Assembly State and Local Government Committee  (on 1/27/2016)
 
 
Date Chamber Action Description
1/27/2016 A Introduced, Referred to Assembly State and Local Government Committee
Date Motion Yea Nay Other
None specified