Bill > S2113

Introduced Session

This bill would alleviate the property tax impact of the departure of a major business ratable from a municipality. It is intended to protect property taxpayers from property tax increases or significant service disruptions, or both, likely to result from the sudden loss of a major ratable that pays a significant portion of the local property tax levy. This bill would codify into permanent State law a language provision in the State FY 2015 appropriations act that addresses a municipality's loss of a large property tax ratable. Under this bill, a portion of any aid provided through the Transitional Aid to Localities program may be allocated by the Director of the Division of Local Government Services to provide short-term financial assistance to a local government unit that is determined by the director to be experiencing financial distress caused by the destruction or loss of a major local business ratable. "Major local business ratable" is defined in the bill as one or more related parcels of property owned by a single business entity, classified as commercial or industrial, which comprised the largest assessed valuation of any one or more line items of taxable property in a municipality; which generated an annual payment in lieu of property tax in excess of 10% of the total municipal levy; or which is otherwise determined by the director to be of such significance to a municipality that its destruction or loss has resulted in financial distress. The bill provides that the director may direct that part of any allocation of aid under the Transitional Aid to Localities program shall be paid to an affected school district or county, or to both, in the same manner as if the award of this aid was raised as revenue from the municipal tax levy. A local government unit determined to be experiencing financial distress because of the loss or destruction of a major local business ratable would not be required to be subject to any additional conditions, requirements, orders, or other operational efficiency or oversight measures, except as the director deems to be appropriate. The provisions of this bill are intended to provide assistance to municipalities such as Montvale, in Bergen County, where a large property, most recently the headquarters of Barr Laboratories, Inc., is anticipated to be sold in the near future to Memorial Sloan Kettering Cancer Center, and used as a regional cancer center. This new use of the property will likely render a large portion of it exempt from property taxes, and consequently, there will be a negative impact on Montvale's municipal property tax levy, which is the amount of money raised by property taxation to fund municipal purposes. Under this bill, any affected local unit of government would be able to apply to the Director of the Division of Local Government Services in the Department of Community Affairs for financial assistance under the Transitional Aid to Localities program in order to mitigate the effect of the loss of a major property tax ratable on the local unit's remaining taxpayers.

AI Summary

Committee Categories

Holly Schepisi (R)*, 

Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee (on 01/09/2024)

Official Document