Provides for direct property tax relief from Highlands Property Tax Stabilization Fund.

A144

ASSEMBLY, No. 144

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman DAWN FANTASIA

District 24 (Morris, Sussex and Warren)

Assemblyman MICHAEL INGANAMORT

District 24 (Morris, Sussex and Warren)

Co-Sponsored by:

Assemblywoman Dunn

SYNOPSIS

���� Provides for direct property tax relief from
Highlands Property Tax Stabilization Fund.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning the Highlands Municipal Property Tax Stabilization program, and
amending P.L.2004, c.120.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 21 of P.L.2004,
c.120 (C.13:20-19) is amended to read as follows:

���� 21.� a.� There is created in
the Department of the Treasury a special non-lapsing fund to be known as the
"Highlands Protection Fund."� The monies in the fund are dedicated
and shall be used only to carry out the purposes enumerated in subsection b. of
this section.� The fund shall be credited with all revenues collected and
deposited in the fund pursuant to section 4 of P.L.1968, c.49 (C.46:15-8), all
interest and other income received from the investment of monies in the fund,
and any monies which, from time to time, may otherwise become available for the
purposes of the fund.� Pending the use thereof pursuant to the provisions of
subsection b. of this section, the monies deposited in the fund shall be held
in interest-bearing accounts in public depositories, as defined pursuant to
section 1 of P.L.1970, c.236 (C.17:9-41), and may be invested or reinvested in
such securities as are approved by the State Treasurer.� Interest or other
income earned on monies deposited into the fund shall be credited to the fund for
use as set forth in subsection b. of this section for other monies in the fund.

���� b.��� Monies deposited in the
"Highlands Protection Fund" shall be used only for:

���� (1)�� payments to the
"Highlands
[
Municipal
]
Property Tax
Stabilization Fund" established pursuant to subsection b. of section 19 of

[
this
act
]

P.L.2004,
c.120 (C.54:1-85)
in such amounts as are necessary to provide property tax
stabilization aid pursuant to that section;

���� (2)�� payments of watershed
moratorium offset aid pursuant to section 1 of P.L.1999, c.225 (C.58:29-8);

���� (3)�� the making of grants by
the Highlands Water Protection and Planning Council pursuant to sections 13 and
18 of
[
this
act
]

P.L.2004,
c.120 (C.13:20-13 and C.13:20-18)
; and

���� (4)�� allocations to the
Pinelands Property Tax Assistance Fund established pursuant to section 20 of
[
this act
]

P.L.2004,
c.120 (C.54:1-84)
.

(cf: P.L.2004, c.120, s.21)

���� 2.��� Section 19 of P.L.2004,
c.120 (C.54:1-85) is amended to read as follows:

���� 19.� a.�� (1)���� There is
established in the Department of the Treasury the "Highlands
[
Municipal
]
Property Tax
Stabilization Board," which shall consist of three members to be appointed
by the Governor, who shall be recognized experts in the field of taxation.�
Members of the board may also be members of the Highlands Water Protection and
Planning Council established pursuant to section 4 of P.L.2004, c.120
(C.13:20-4).

���� (2)�� Within 120 days after
the date of enactment of P.L.2004, c.120 (C.13:20-1 et al.), the board, in
consultation with the Highlands Water Protection and Planning Council, shall
establish procedures for determining the valuation base of a qualified
municipality, whether fiscal stress has been caused by the implementation of
the "Highlands Water Protection and Planning Act," P.L.2004, c.120
(C.13:20-1 et al.) in a qualified municipality, and the amount due a qualified
municipality to compensate for a decline in the aggregate true value of vacant
land directly attributable to the implementation of the "Highlands Water
Protection and Planning Act."

���� b.��� The "Highlands

[
Municipal
]
Property Tax
Stabilization Fund" is established in the General Fund as a special
nonlapsing fund for the purpose of providing State aid to
property taxpayers
in
qualified municipalities pursuant to this section.� There shall be
credited each State fiscal year from the "Highlands Protection Fund"
created pursuant to section 21 of P.L.2004, c.120 (C.13:20-19) to the Highlands

[
Municipal
]
Property Tax
Stabilization Fund such sums as shall be necessary to provide State aid to
reduce
property taxes to residents in
qualified municipalities pursuant to this
section.� Every qualified municipality shall be eligible for a distribution
from the fund pursuant to the provisions of this section.

���� c.���� The assessor of every
qualified municipality shall certify to the county tax board on a form to be
prescribed by the Director of the Division of Taxation in the Department of the
Treasury, and on or before December 1 annually, a report of the assessed value
of each parcel of vacant land in the base year and the change in the assessed
value of each such parcel in the current tax year attributable to successful
appeals of assessed values of vacant land to the county tax board pursuant to
R.S.54:3-21 et seq. or attributable to a revaluation approved by the director
and implemented or a reassessment approved by the county
tax
board
[
of taxation
]
.� If a
judgment or an appeal is overturned or modified, upon a final judgment an
appropriate adjustment shall be made by the director in the payment of the
entitlement due next following the judgment.

���� d.��� (1)� Upon receipt of
reports filed pursuant to subsection c. of this section and using procedures
developed by the board pursuant to subsection a. of this section, the county
tax board shall compute and certify to the director on or before December 20 of
each year, in such manner as to identify for each qualified municipality the
aggregate decline, if any, in the true value of vacant land, comparing the
current tax year to the base year.� The aggregate changes so identified for
each qualified municipality shall constitute its valuation base for purposes of
this section.

���� (2)�� The Director of the
Division of Taxation shall, on or before January 10 of each year, provide the
board with all relevant information collected pursuant to the provisions of
this section and any other information deemed necessary by the board to
determine the valuation base.

���� (3)�� Upon receipt of the
information, the board shall make a final determination on the valuation base
of each qualified municipality; calculate the amount due
to compensate
property taxpayers in
a qualified municipality, in accordance with the
procedures developed pursuant to subsection a. of this section,
[
to compensate
]
for a
decline, if any, by multiplying its valuation base by its tax rate; and certify
to the director and the State Treasurer, on or before February 1 of each year,
that amount to which each qualified municipality is entitled.

���� e.���� Upon receipt of the
certification by the board, the State Treasurer shall certify to each qualified
municipality, on or before February 15, its property tax stabilization amount
for
the purposes of subsection f. of this section
.� A copy of the certified
amounts shall be forwarded to the Director of the Division of Local Government
Services in the Department of Community Affairs.

���� f.���� (1)
[
The State
Treasurer, upon warrant of the Director of the Division of Budget and
Accounting in the Department of the Treasury, shall pay to each qualified
municipality its entitlement as State aid from the sums available in the
"Highlands Municipal Property Tax Stabilization Fund" in two equal
installments pursuant to a schedule prescribed by the Division of Local
Government Services.
]
�

A Highlands Property Tax Stabilization Credit, paid from the sums available
in the �Highlands Property Tax Stabilization Fund,� shall be applied to each
real property line item each year as follows:

����
(a)�� The Director of the
Division of Taxation and the State Treasurer shall certify to each county tax board,
the Director of the Division of Budget and Accounting, the Legislative Budget
and Finance Officer, and the Senate President and the Speaker of the General
Assembly, by May 1 of each year, the amount of Highlands Property Tax
Stabilization Aid due to each county and taxing district for that tax year.

����
(b)�� When the table of
aggregates prepared pursuant to R.S.54:4-52 for each municipality is prepared,
a tax credit rate shall be calculated using the calculation of total Highlands Property Tax Stabilization Aid divided by the total taxable value of all
property.

����
(c)�� The tax credit rate
shall be multiplied by the taxable value for each taxable line item, the
product of which shall be deducted from the total taxes due, before deductions,
on each line item for the tax year.� The tax credit rate and amount of the Highlands Property Tax Stabilization Credit shall be displayed on the tax bill.

����
(d)�� In the event that the
tax credit rate is less than $0.005 per $100 of taxable value, the municipal
chief financial officer shall reserve the funds until such time as the addition
of subsequent tax credits exceed that threshold.

����
(e)�� The State Treasurer also
shall reimburse each qualified municipality and county tax board from the sums
available in the "Highlands Property Tax Stabilization Fund" for any
costs, including but not limited to attorney fees and personnel costs, incurred
in conducting reassessments and revaluations, and in processing, administering,
and defending successful and unsuccessful appeals of assessed values for vacant
land in accordance with this section.

���� (2)�� If the amount available
in the "Highlands
[
Municipal
]
Property Tax
Stabilization Fund" in any year is insufficient to pay the full amount
[
to which each
qualified municipality is entitled
]

due
pursuant to this
[
section
]

subsection
,
the payments shall be made on a pro rata basis.

���� (3)��
[
Notwithstanding
any provisions of this section to the contrary, in the sixth, seventh, eighth,
ninth, and tenth years of the State aid program created by this section, a
qualified municipality shall be entitled to receive, respectively, 90%, 70%,
50%, 30%, and 10% of the sum it otherwise would have been paid pursuant to this
subsection, and thereafter the program shall expire.
]

(Deleted by amendment,
P.L.��� , c.��� ) (pending before the Legislature as this bill).

���� g.��� Any municipality
receiving a certification from the State Treasurer pursuant to subsection e. of
this section shall anticipate such sums in its annual budget or any amendments
or supplements thereto as a direct offset to the amount to be raised by taxation.

���� h.��� The Director of the
Division of Taxation in reviewing the reports filed pursuant to subsection c.
of this section may make such changes therein as the director deems necessary
to ensure that the reports accurately reflect the change in the assessed value
of vacant land.

���� i.���� The Director of the
Division of Local Government Services shall make such changes in the budget of
any qualified municipality to ensure that all sums received pursuant to this
section are utilized as a direct offset to the amount to be raised by taxation
and shall make such changes therein as the director deems necessary to ensure
that the offset occurs.

���� j.���� Any sum received by a
qualified municipality pursuant to this section shall not be considered as an
exception or exemption under P.L.1976, c.68 (C.40A:4-45.1 et seq.).

���� k.��� Notwithstanding the
provisions of the "Local Budget Law"� (N.J.S.40A:4-1 et seq.), a
qualified municipality which is due a property tax stabilization payment
pursuant to this section may anticipate the amount of the entitlement in its
annual budget for the year in which the payment is made.

���� l.���� The State Treasurer may
deduct from the State aid a municipality would otherwise receive pursuant to
this section an amount equivalent to that portion of any sums received by a
municipality pursuant to section 1 of P.L.1999, c.225 (C.58:29-8) that the State
Treasurer, in consultation with the Director of the Division of Local
Government Services, determines to be duplicative of any State aid received
pursuant to this section.

���� m.�� The Director of the
Division of Taxation and the Director of the Division of Local Government
Services shall each adopt, pursuant to the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.), such rules and regulations as
may be necessary to implement the provisions of this section.

���� n.��� As used in this section:

���� "Base year" means
the calendar year 2003;

���� "Board" means the Highlands

[
Municipal
]
Property Tax
Stabilization Board established pursuant to subsection a. of this section;

����
"County tax
board" means a county board of taxation;

���� "Current tax year"
means the most recent year for which a report is filed pursuant to subsection
c. of this section;

���� "Highlands preservation
area" means the preservation area of the Highlands Region designated by
subsection b. of section 7 of P.L.2004, c.120 (C.13:20-7);

���� "Qualified
municipality" means any municipality located wholly or partially in the
Highlands preservation area
[
,
provided however, that after the adoption of the Highlands regional master plan
by the Highlands Water Protection and Planning Council pursuant to section 8 of
P.L.2004, c.120 (C.13:20-8), qualified municipality shall mean only a
municipality that has conformed its municipal master plan and development
regulations to the Highlands regional master plan pursuant to section 14 of
P.L.2004, c.120 (C.13:20-14)
]
;

���� "Tax rate" means
that portion of the effective property tax rate for the current tax year which
reflects local taxes to be raised for district school purposes and local
municipal purposes, calculated by dividing the total of column 12, section C by
net valuation on which county taxes are apportioned in column 11, both as
reflected in the Abstract of Ratables for the current tax year, and expressed
as a rate per $100 of true value;

���� "True value of vacant
land" or "true value" means the aggregate assessed value of
vacant land divided by the average ratio of assessed-to-true value of real
property (commonly known as the equalization rate) promulgated by the Director
of the Division of Taxation in the Department of the Treasury and published in
the table of equalized valuation; and

���� "Valuation base"
means the change in the aggregate true value of vacant land directly
attributable to the implementation of the� "Highlands Water Protection and
Planning Act," P.L.2004, c.120 (C.13:20-1 et al.) in a qualified municipality
when comparing the current tax year to the base year.

���� o.���
[
This section
shall expire July 1 next following one year after the date the last State aid
payment is made to a qualified municipality in the tenth year as provided
pursuant to paragraph (3) of subsection f. of this section.
]

(Deleted
by amendment, P.L. , c. ) (pending
before the Legislature as this bill).

(cf: P.L.2004, c.120, s.19)

���� 3.��� This act shall take
effect immediately.

STATEMENT

���� This bill would revise the
Highlands Property Tax Stabilization Program to require that the distribution
of the stabilization aid reflect all elements of the property tax bill.� The
bill would provide that the tax credit rate shall be multiplied by the taxable
value for each taxable line item, the product of which shall be deducted from
the total taxes due, before deductions, on each line item for the tax year.�
The tax credit rate and amount of the Highlands Property Tax Stabilization
Credit would be displayed on the tax bill.