Bill > S644

Introduced Session

This bill, designated as the "Atlantic City Urban Enterprise Zone and Property Tax Relief Act," authorizes the creation of an urban enterprise zone (zone) in the city of Atlantic City for a one-time term of 10 years. The zone authorized under this bill would be the 33rd zone created under the Urban Enterprise Zone program, which was first authorized in 1983. The additional zone authorized pursuant to this bill is required to be designated within 90 days of the date of the submittal of an application and zone development plan by the municipality. Qualifying retail businesses in the additional zone to be designated pursuant to the criteria for priority consideration set forth in the bill would be entitled to collect sales and use tax reduced to the extent of 50 percent of the sales and use tax (SUT). A business operating as a casino is not eligible for the benefits of an eligible business under the UEZ program but a business operating on casino property not owned by a casino business may be eligible if it otherwise meets the criteria for business eligibility. During the first five years, all of the SUT revenues collected are to be appropriated for use by Atlantic City and during the second final five years, 66.5 percent of the SUT revenues collected are to be appropriated for use by Atlantic City. These revenues are to be used by Atlantic City to provide local property tax relief. This bill is meant to address the negative economic conditions experienced by Atlantic City over the past two years or more as the city transitions from a casino gaming destination to a general-interest tourist destination. So far in 2014, 8,000 workers lost their jobs in the casino industry due to the closings of Atlantic Club, Revel, Showboat and Trump Plaza. During this time, the ratable base in Atlantic City declined by almost $3 billion due to property tax appeals by casinos resulting in more than $350 million in refunds or tax credits. As a result, property taxes have increased by 53 percent. In 2014, Atlantic City residents are expected to incur a 47 percent tax increase - 65 cents per $100 of assessed value - because of decreased property values. This comes after Atlantic City residents incurred a 22 percent tax increase in 2013. In 2006, the then dozen casinos were 81 percent of the city's ratable base; in 2013, they were 61 percent.

AI Summary

Committee Categories

Jim Beach (D)*,  Chris Brown (R)*, 

Reviewed by the Sales Tax Review Commission Recomment to not enact (on 03/28/2018)