Requires municipalities to share certain payments received in lieu of property taxes with school districts; informs counties and school districts of application for property tax exemption.

A4953

ASSEMBLY, No. 4953

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 7, 2026

Sponsored by:

Assemblyman� VINCENT M. "VINNIE" KEARNEY

District 21 (Middlesex, Morris, Somerset and Union)

SYNOPSIS

���� Requires municipalities to share certain payments
received in lieu of property taxes with school districts; informs counties and
school districts of application for property tax exemption.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning long-term tax exemptions and amending
P.L.1991, c.431.

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

���� 1.��� Section 3 of P.L.1991,
c.431 (C.40A:20-3) is amended to read as follows:

���� 3.��� As used in P.L.1991,
c.431 (C.40A:20-1 et seq.):

���� a.���� "Gross
revenue" means annual gross revenue or gross shelter rent or annual gross
rents, as appropriate, and other income, for each urban renewal entity
designated pursuant to P.L.1991, c.431 (C.40A:20-1 et seq.).� The financial
agreement shall establish the method of computing gross revenue for the entity,
and the method of determining insurance, operating and maintenance expenses
paid by a tenant which are ordinarily paid by a landlord, which shall be
included in the gross revenue; provided, however, that any federal funds
received, whether directly or in the form of rental subsidies paid to tenants,
by a nonprofit corporation that is the sponsor of a qualified subsidized
housing project, shall not be included in the gross revenue of the project for
purposes of computing the annual
[
services
]

service

charge for
[
municipal
]

public

services supplied to the project; and provided further that any gain realized
by the urban renewal entity on the sale of any unit in fee simple, whether or
not taxable under federal or State law, shall not be included in computing
gross revenue.

���� b.��� "Limited-dividend
entity" means an urban renewal entity incorporated pursuant to Title 14A
of the New Jersey Statutes, or established pursuant to Title 42 of the Revised
Statutes, for which the profits and the entity are limited as follows.� The
allowable net profits of the entity shall be determined by applying the
allowable profit rate to each total project unit cost, if the project is
undertaken in units, or the total project cost, if the project is not
undertaken in units, and all capital costs, determined in accordance with
generally accepted accounting principles, of any other entity whose revenue is
included in the computation of excess profits, for the period commencing on the
date on which the construction of the unit or project is completed, and
terminating at the close of the fiscal year of the entity preceding the date on
which the computation is made, where:�

���� "Allowable profit
rate" means the greater of 12% or the percentage per annum arrived at by
adding 1 1/4% to the annual interest percentage rate payable on the entity's
initial permanent mortgage financing.� If the initial permanent mortgage is insured
or guaranteed by a governmental agency, the mortgage insurance premium or
similar charge, if payable on a per annum basis, shall be considered as
interest for this purpose.� If there is no permanent mortgage financing the
allowable profit rate shall be the greater of 12% or the percentage per annum
arrived at by adding 1 1/4% per annum to the interest rate per annum which the
municipality determines to be the prevailing rate on mortgage financing on
comparable improvements in the county.�

���� c.���� "Net profit"
means the gross revenues of the urban renewal entity less all operating and
non-operating expenses of the entity, all determined in accordance with
generally accepted accounting principles, but:�

���� (1)�� there shall be included
in expenses: (a) all annual service charges paid pursuant to section 12 of
P.L.1991, c.431 (C.40A:20-12); (b) all payments to the municipality of excess
profits pursuant to section 15 or 16 of P.L.1991, c.431 (C.40A:20-15 or 40A:20-16);
(c) an annual amount sufficient to amortize the total project cost and all
capital costs determined in accordance with generally accepted accounting
principles, of any other entity whose revenue is included in the computation of
excess profits, over the term of the abatement as set forth in the financial
agreement; (d) all reasonable annual operating expenses of the urban renewal
entity and any other entity whose revenue is included in the computation of
excess profits, including the cost of all management fees, brokerage
commissions, insurance premiums, all taxes or service charges paid, legal,
accounting, or other professional service fees, utilities, building maintenance
costs, building and office supplies, and payments into repair or maintenance reserve
accounts; (e) all payments of rent including, but not limited to, ground rent
by the urban renewal entity;
and
(f) all debt service;

���� (2)�� there shall not be
included in expenses either depreciation or obsolescence, interest on debt,
except interest which is part of debt service, income taxes, or salaries,
bonuses or other compensation paid, directly or indirectly to directors,
officers and stockholders of the entity, or officers, partners or other persons
holding any proprietary ownership interest in the entity.

���� The urban renewal entity shall
provide to the municipality an annual audited statement which clearly
identifies the calculation of net profit for the urban renewal entity during
the previous year.� The annual audited statement shall be prepared by a certified
public accountant and shall be submitted to the municipality within 90 days of
the close of the fiscal year.

���� d.��� "Nonprofit
entity" means an urban renewal entity incorporated pursuant to Title 15A
of the New Jersey Statutes for which no part of its net profits inures to the
benefit of its members.

���� e.���� "Project"
means any work or undertaking pursuant to a redevelopment plan adopted pursuant
to the "Local Redevelopment and Housing Law," P.L.1992, c.79
(C.40A:12A-1 et al.), which has as its purpose the redevelopment of all or any
part of a redevelopment area including any industrial, commercial, residential
or other use, and may include any buildings, land, including demolition,
clearance or removal of buildings from land, equipment, facilities, or other
real or personal properties which are necessary, convenient, or desirable
appurtenances, such as, but not limited to, streets, sewers, utilities, parks,
site preparation, landscaping, and administrative, community, health,
recreational, educational and welfare facilities, and zero-emission vehicle
fueling and charging infrastructure.

���� f.���� "Redevelopment
area" means an area determined to be in need of redevelopment and for
which a redevelopment plan has been adopted by a municipality pursuant to the
"Local Redevelopment and Housing Law," P.L.1992, c.79 (C.40A:12A-1 et
al.).�

���� g.��� "Urban renewal
entity" means a limited-dividend entity, the New Jersey Economic
Development Authority or a nonprofit entity which enters into a financial
agreement pursuant to P.L.1991, c.431 (C.40A:20-1 et seq.) with a municipality
to undertake a project pursuant to a redevelopment plan for the redevelopment
of all or any part of a redevelopment area, or a project necessary, useful, or
convenient for the relocation of residents displaced or to be displaced by the
redevelopment of all or any part of one or more redevelopment areas, or a low
and moderate income housing project.

���� h.��� "Total project unit
cost" or "total project cost" means the aggregate of the
following items as related to a unit of a project, if the project is undertaken
in units, or to the total project, if the project is not undertaken in units,
all of which as limited by, and approved as part of the financial agreement:
(1) cost of the land and improvements to the entity, whether acquired from a
private or a public owner, with cost in the case of leasehold interests to be
computed by capitalizing the aggregate rental at a rate provided in the
financial agreement; (2) architect, engineer
,
and attorney fees, paid or
payable by the entity in connection with the planning, construction
,
and
financing of the project; (3) surveying and testing charges in connection
therewith; (4) actual construction costs which the entity shall cause to be
certified and verified to the municipality and the municipal governing body by
an independent and qualified architect, including the cost of any preparation
of the site undertaken at the entity's expense; (5) insurance, interest
,

and finance costs during construction; (6) costs of obtaining initial permanent
financing; (7) commissions and other expenses paid or payable in connection
with initial leasing; (8) real estate taxes and assessments during the
construction period; (9) a developer's overhead based on a percentage of actual
construction costs, to be computed at not more than the following schedule:

����������� $500,000 or less� -���������������������������� 10%

����������� $500,000 through
$1,000,000���� -��� $50,000 plus 8% on excess above $500,000

����������� $1,000,001 through
$2,000,000�� -�� $90,000 plus 7% on excess above $1,000,000

����������� $2,000,001 through
$3,500,000�� - � $160,000 plus 5.6667% on excess above $2,000,000

����������� $3,500,001 through
$5,500,000�� -�� $245,000 plus 4.25% on excess above $3,500,000

����������� $5,500,001 through
$10,000,000� -� $330,000 plus 3.7778% on excess above $5,500,000

����������� over $10,000,000��� - ����������� 5%

���� If the project includes units
in fee simple, with respect to those units, "total project cost"
shall mean the sales price of the individual housing unit which shall be the
most recent true consideration paid for a deed to the unit in fee simple in a
bona fide arm's length sales transaction, but not less than the assessed
valuation of the unit in fee simple assessed at 100 percent of true value.

���� If the financial agreement so
provides, there shall be excluded from the total project cost: (1) actual costs
incurred by the entity and certified to the municipality by an independent and
qualified architect or engineer which are associated with site remediation and
cleanup of environmentally hazardous materials or contaminants in accordance
with State or federal law; and (2) any extraordinary costs incurred by the
entity and certified to the chief financial officer of the municipality by an
independent certified public accountant in order to alleviate blight conditions
within the area in need of redevelopment including, but not limited to, the
cost of demolishing structures considered by the entity to be an impediment to
the proposed redevelopment of the property, costs associated with the
relocation or removal of public utility facilities as defined pursuant to
section 10 of P.L.1992, c.79 (C.40A:12A-10) considered necessary in order to
implement the redevelopment plan, costs associated with the relocation of
residents or businesses displaced or to be displaced by the proposed
redevelopment, and the clearing of title to properties within the area in need
of redevelopment in order to facilitate redevelopment.

���� i.���� "Housing
project" means any work or undertaking to provide decent, safe, and
sanitary dwellings for families in need of housing; the undertaking may include
any buildings, land (including demolition, clearance or removal of buildings
from land), equipment, facilities, or other real or personal properties or
interests therein which are necessary, convenient
,
or desirable
appurtenances of the undertaking, such as, but not limited to, streets, sewers,
water, utilities, parks
,
site preparation
,
landscaping, and
administrative, community, health, recreational, educational, welfare,
commercial, or other facilities, or to provide any part or combination of the
foregoing.

���� j.���� "Redevelopment
relocation housing project" means a housing project which is necessary,
useful or convenient for the relocation of residents displaced by redevelopment
of all or any part of one or more redevelopment areas.

���� k.��� "Low and moderate
income housing project" means a housing project which is occupied, or is
to be occupied, exclusively by households whose incomes do not exceed income
limitations established pursuant to any State or federal housing program.

���� l.���� "Qualified
subsidized housing project" means a low and moderate income housing
project owned by a nonprofit corporation organized under the provisions of
Title 15A of the New Jersey Statutes for the purpose of developing,
constructing and operating rental housing for senior citizens under section 202
of Pub.L. 86-372 (12 U.S.C. s.1701q) or rental housing for persons with
disabilities under section 811 of Pub.L. 101-625 (42 U.S.C. s.8013), or under
any other federal program that the Commissioner of Community Affairs by rule
may determine to be of a similar nature and purpose.

���� m.�� "Debt service"
means the amount required to make annual payments of principal and interest or
the equivalent thereof on any construction mortgage, permanent mortgage
,

or other financing including returns on institutional equity financing and
market rate related party debt for a project for a period equal to the term of
the tax exemption granted by a financial agreement.

���� n.��� "Zero-emission
vehicle" means a vehicle certified as a zero emission vehicle pursuant to
the California Air Resources Board zero emission vehicle standards for the
applicable model year, including but not limited to, battery electric-powered
vehicles and hydrogen fuel cell vehicles.

���� o.��� "Zero-emission
vehicle fueling and charging infrastructure" means infrastructure to
charge or fuel zero-emission vehicles, including but not limited to, public
electric vehicle charging stations and public hydrogen fueling stations.

����
p.��� "Chief executive
officer of the county" means the county executive, county manager, county
supervisor, or president of the board of county commissioners, as appropriate
to the form of government of a county.

(cf: P.L.2021, c.168, s.4)

���� 2.��� Section 8 of P.L.1991,
c.431 (C.40A:20-8) is amended to read as follows:

���� 8.��� Every urban renewal
entity qualifying under
[
this
act
]

P.L.1991,
c.431 (C.40A:20-1 et seq.)
, before proceeding with any projects, shall make
written application to the municipality for approval thereof
, and shall
provide copies of the application, for informational purposes, to the board of county
commissioners and the chief executive officer of the county within which the
municipality is located, and to the board of education and superintendent of any
school district, including a regional school district, that is coextensive with
the municipality, or of which the municipality is a constituent
.� The
application shall be in a form, and shall certify to those facts and data, as
shall be required by the municipality, and shall include but not be limited
to:�

���� a.���� A general statement of
the nature of the proposed project, that the undertaking conforms to all
applicable municipal ordinances, and that the project accords with the
redevelopment plan and master plan of the municipality, or, in the case of a
redevelopment relocation housing project, provides for the relocation of
residents displaced or to be displaced from a redevelopment area, or, in the
case of a low and moderate income housing project, the housing units are
restricted to occupation by low and moderate income households.�

���� b.��� A description of the
proposed project outlining the area included and a description of each unit
thereof if the project is to be undertaken in units and setting forth
architectural and site plans as required.�

���� c.���� A statement prepared by
a qualified architect or engineer of the estimated cost of the proposed project
in the detail required, including the estimated cost of each unit to be
undertaken.�

���� d.��� The source, method and
amount of money to be subscribed through the investment of private capital,
setting forth the amount of stock or other securities to be issued therefor or
the extent of capital invested and the proprietary or ownership interest obtained
in consideration therefor.�

���� e.���� A fiscal plan for the
project outlining a schedule of annual gross revenue, the estimated
expenditures for operation and maintenance, payments for interest, amortization
of debt and reserves, and payments
[
to
the municipality
]

in lieu of taxes
to be made pursuant to a financial agreement to be
entered into with the municipality.�

���� f.�� A proposed financial
agreement conforming to the provisions of section 9 of
[
this act
]

P.L.1991,
c.431 (C.40A:20-9)
.�

���� The application shall be
addressed and submitted to the mayor or other chief executive officer of the
municipality.� The mayor or other chief executive officer shall, within 60 days
of
[
his
]
receipt of
the application thereafter, submit the application with
[
his
]

recommendations to the municipal governing body.�
[
The
]

Simultaneously therewith, the
mayor or other chief executive officer of the municipality shall submit copies
of any recommendations to the board of county commissioners and the chief
executive officer of the county within which the municipality is located and to
the board of education and superintendent of any school district, including a
regional school district, that is coextensive with the municipality, or of
which the municipality is a constituent.� Representatives of the county and
school district or districts may submit recommendations to the municipal
governing body within 10 days after the date of submittal of the
recommendations of the mayor or chief executive officer of the municipality.�
After affording representatives of the county and school district, or
districts, a 10-day period to review the proposed project and the
recommendations of the mayor or chief executive officer of the municipality,
and after giving due consideration to the recommendations submitted by all
interested parties, the municipal
governing body shall by resolution
approve or disapprove the application, but in the event of disapproval, changes
may be suggested to secure approval. An application may be revised and
resubmitted.�

(cf: P.L.1991, c.431, s.8)

���� 3.��� Section 9 of P.L.1991,
c.431 (C.40A:20-9) is amended to read as follows:

���� 9.��� Every approved project
shall be evidenced by a financial agreement between the municipality and the
urban renewal entity.� The agreement shall be prepared by the entity and
submitted as a separate part of its application for project approval.� The
agreement shall not take effect until approved by ordinance of the
municipality.� The municipality shall notify the chief financial officer of the
county and the clerk to the board of county commissioners of the county within
which the municipality is located of the date, time, and place of the public
hearing required to be held prior to the passage of the ordinance.� Any
amendments or modifications of the agreement made thereafter shall be by mutual
consent of the municipality and the urban renewal entity and shall be subject
to approval by ordinance of the municipal governing body upon recommendation of
the mayor or other chief executive officer of the municipality prior to taking
effect.�

���� The financial agreement shall
be in the form of a contract requiring full performance within 30 years from
the date of completion of the project and shall include the following:�

���� a.���� That the profits of or
dividends payable by the urban renewal entity shall be limited according to
terms appropriate for the type of entity in conformance with the provisions of
P.L.1991, c.431 (C.40A:20-1 et seq.).

���� b.��� That all improvements
and land, to the extent authorized pursuant to section 12 of P.L.1991, c.431
(C.40A:20-12), in the project to be constructed or acquired by the urban
renewal entity shall be exempt from taxation as provided in P.L.1991, c.431
(C.40A:20-1 et seq.).

���� c.���� That the urban renewal
entity shall make payments for
[
municipal
]

public

services as provided in P.L.1991, c.431 (C.40A:20-1 et seq.).

���� d.��� That the urban renewal
entity shall submit annually, within 90 days after the close of its fiscal
year, its auditor's reports to the mayor and governing body of the municipality
,
in which the urban renewal entity shall certify to the mayor and the governing
body of the municipality the number of school-age children residing in the
approved project who are attending a public school
.

���� e.���� That the urban renewal
entity shall, upon request, permit inspection of property, equipment,
buildings, and other facilities of the entity, and also permit examination and
audit of its books, contracts, records, documents, and papers by authorized
representatives of the municipality or the State.�

���� f.���� That in the event of
any dispute between the parties matters in controversy shall be resolved by
arbitration in the manner provided in the financial agreement.�

���� g.��� That operation under the
financial agreement shall be terminable by the urban renewal entity in the
manner provided by P.L.1991, c.431 (C.40A:20-1 et seq.).

���� h.��� That the urban renewal
entity shall at all times prior to the expiration or other termination of the
financial agreement remain bound by the provisions of P.L.1991, c.431
(C.40A:20-1 et seq.).

���� The financial agreement shall
contain detailed representations and covenants by the urban renewal entity as
to the manner in which it proposes to use, manage, or operate the project.� The
financial agreement shall further set forth the method for computing gross
revenue for the urban renewal entity, the method of determining insurance,
operating
,
and maintenance expenses paid by a tenant which are
ordinarily paid by a landlord, the plans for financing the project, including
the estimated total project cost, the amortization rate on the total project
cost, the source of funds, the interest rates to be paid on the construction
financing, the source and amount of paid-in capital, the terms of mortgage
amortization or payment of principal on any mortgage, a good faith projection
of initial sales prices of any condominium units and expenses to be incurred in
promoting and consummating such sales, and the rental schedules and lease terms
to be used in the project.� Any financial agreement may allow the municipality
to levy an annual administrative fee, not to exceed two percent of the annual
service charge
for public services
.

(cf: P.L.2025, c.91, s.1)

���� 4.� Section 12 of P.L.1991,
c.431 (C.40A:20-12) is amended to read as follows:

���� 12.� The rehabilitation or
improvements made in the development or redevelopment of a redevelopment area
or area appurtenant thereto or for a redevelopment relocation housing project,
pursuant to P.L.1991, c.431 (C.40A:20-1 et seq.), shall be exempt from taxation
for a limited period as hereinafter provided.� When housing is to be
constructed, acquired
,
or rehabilitated by an urban renewal entity, the
land upon which that housing is situated shall be exempt from taxation for a
limited period as hereinafter provided.� The exemption shall be allowed when
the clerk of the municipality wherein the property is situated shall certify to
the municipal tax assessor that a financial agreement with an urban renewal
entity for the development or the redevelopment of the property, or the
provision of a redevelopment relocation housing project, or the provision of a
low- and moderate-income housing project has been entered into and is in effect
as required by P.L.1991, c.431 (C.40A:20-1 et seq.).

���� Delivery by the municipal
clerk to the municipal tax assessor of a certified copy of the ordinance of the
governing body approving the tax exemption and financial agreement with the
urban renewal entity shall constitute the required certification.� For each
exemption granted pursuant to P.L.2003, c.125 (C.40A:12A-4.1 et al.), upon
certification as required hereunder, the tax assessor shall implement the
exemption and continue to enforce that exemption without further certification
by the clerk until the expiration of the entitlement to exemption by the terms
of the financial agreement or until the tax assessor has been duly notified by
the clerk that the exemption has been terminated.

���� Within 10 calendar days
following the later of the effective date of an ordinance following its final
adoption by the governing body approving the tax exemption or the execution of
the financial agreement by the urban renewal entity, the municipal clerk shall
transmit a certified copy of the ordinance and financial agreement to the chief
financial officer of the county and to the county counsel
of the county
within which the municipality is located, and to the board of education and the
superintendent of any school district coextensive with the municipality or of
which the municipality is a constituent, including a regional school district,

for informational purposes.

���� Whenever an exemption status
changes during a tax year, the procedure for the apportionment of the taxes for
the year shall be the same as in the case of other changes in tax exemption
status during the tax year.� Tax exemptions granted pursuant to P.L.2003, c.125
(C.40A:12A-4.1 et al.) represent long term financial agreements between the
municipality and the urban renewal entity and as such constitute a single
continuing exemption from local property taxation for the duration of the
financial agreement.� The validity of a financial agreement or any exemption
granted pursuant thereto may be challenged only by filing an action in lieu of
prerogative writ within 20 days from the publication of a notice of the
adoption of an ordinance by the governing body granting the exemption and
approving the financial agreement.� Such notice shall be published in a
newspaper of general circulation in the municipality and in a newspaper of
general circulation in the county if different from the municipal newspaper.

���� a.���� The financial agreement
shall specify the duration of the exemption for urban renewal entities in
accordance with the parameters of either paragraph (1) or paragraph (2) of this
subsection:

���� (1)�� the financial agreement
may specify a duration of not more than 30 years from the completion of the
entire project, or unit of the project if the project is undertaken in units,
or not more than 35 years from the execution of the financial agreement between
the municipality and the urban renewal entity; or

���� (2)�� for each project
undertaken pursuant to a redevelopment agreement which allows the redeveloper
to undertake two or more projects sequentially, the financial agreement may
specify a duration of not more than 30 years from the completion of a project,
or unit of the project if the project is undertaken in units, or not more than
50 years from the execution of the first financial agreement implementing a
project under the redevelopment agreement.� As used in this subsection,
"redevelopment agreement" means an agreement entered into pursuant to
subsection f. of section 8 of P.L.1992, c.79 (C.40A:12A-8) between a
municipality or redevelopment entity and a redeveloper.

���� A financial agreement may
provide for an exemption period of less than 30 years from the completion of
the entire project, less than 35 years from the execution of the financial
agreement, or less than 50 years from the execution of the first financial agreement
implementing a project under the redevelopment agreement.� Nothing in this
subsection shall be construed as requiring a financial agreement for a project
undertaken pursuant to a redevelopment agreement which allows the redeveloper
to undertake two or more projects sequentially to specify a duration within the
parameters of paragraph (2) of this subsection.

���� b.��� During the term of any
exemption, in lieu of any taxes to be paid on the buildings and improvements of
the project and, to the extent authorized pursuant to this section, on the
land, the urban renewal entity shall make payment to the municipality of an annual
service charge
[
,
which
]

for public services.� The municipality
shall remit a portion of that
revenue to the county
, and to the school district or districts,
as
provided hereinafter.� In addition, the municipality may assess an
administrative fee, not to exceed two percent of the annual service charge, for
the processing of the application.� The annual service charge for
[
municipal
]

public

services supplied to the project to be paid by the urban renewal entity for any
period of exemption, shall be determined as follows:

���� (1)�� An annual amount equal
to a percentage determined pursuant to this subsection and section 11 of
P.L.1991, c.431 (C.40A:20-11), of the annual gross revenue from each unit of
the project, if the project is undertaken in units, or from the total project,
if the project is not undertaken in units.� The percentage of the annual gross
revenue shall not be more than 15 percent in the case of a low- and
moderate-income housing project, nor less than 10 percent in the case of all
other projects.

���� At the option of the
municipality, or where because of the nature of the development, ownership,
use, or occupancy of the project or any unit thereof, if the project is to be
undertaken in units, the total annual gross rental or gross shelter rent or annual
gross revenue cannot be reasonably ascertained, the governing body shall
provide in the financial agreement that the annual service charge shall be a
sum equal to a percentage determined pursuant to this subsection and section 11
of P.L.1991, c.431 (C.40A:20-11), of the total project cost or total project
unit cost determined pursuant to P.L.1991, c.431 (C.40A:20-1 et seq.)
calculated from the first day of the month following the substantial completion
of the project or any unit thereof, if the project is undertaken in units.� The
percentage of the total project cost or total project unit cost shall not be
more than two percent in the case of a low- and moderate-income housing project
and shall not be less than two percent in the case of all other projects.

���� (2)�� In either case, the
financial agreement shall establish a schedule of annual service charges to be
paid over the term of the exemption period, which shall be in stages as
follows:

���� (a)�� For the first stage of
the exemption period, which shall commence with the date of completion of the
unit or of the project, as the case may be, and continue for a time of not less
than six years nor more than 15 years, as specified in the financial agreement,
the urban renewal entity shall pay the municipality an annual service charge
for
[
municipal
]

public

services supplied to the project in an annual amount equal to the amount
determined pursuant to paragraph (1) of this subsection and section 11 of
P.L.1991, c.431 (C.40A:20-11).� For the remainder of the period of the
exemption, if any, the annual service charge shall be determined as follows:

���� (b)�� For the second stage of
the exemption period, which shall not be less than one year nor more than six
years, as specified in the financial agreement, an amount equal to either the
amount determined pursuant to paragraph (1) of this subsection and section 11
of P.L.1991, c.431 (C.40A:20-11), or 20 percent of the amount of taxes
otherwise due on the value of the land and improvements, whichever shall be
greater;

���� (c)�� For the third stage of
the exemption period, which shall not be less than one year nor more than six
years, as specified in the financial agreement, an amount equal to either the
amount determined pursuant to paragraph (1) of this subsection and section 11
of P.L.1991, c.431 (C.40A:20-11), or 40 percent of the amount of taxes
otherwise due on the value of the land and improvements, whichever shall be
greater;

���� (d)�� For the fourth stage of
the exemption period, which shall not be less than one year nor more than six
years, as specified in the financial agreement, an amount equal to either the
amount determined pursuant to paragraph (1) of this subsection and section 11
of P.L.1991, c.431 (C.40A:20-11), or 60 percent of the amount of taxes
otherwise due on the value of the land and improvements, whichever shall be
greater; and

���� (e)�� For the final stage of
the exemption period, the duration of which shall not be less than one year and
shall be specified in the financial agreement, an amount equal to either the
amount determined pursuant to paragraph (1) of this subsection and section 11
of P.L.1991, c.431 (C.40A:20-11), or 80 percent of the amount of taxes
otherwise due on the value of the land and improvements, whichever shall be
greater.

���� If the financial agreement
provides for an exemption period of less than 30 years from the completion of
the entire project, less than 35 years from the execution of the financial
agreement, or less than 50 years from the execution of the first financial
agreement implementing a project under the redevelopment agreement, the
financial agreement shall set forth a schedule of annual service charges for
the exemption period which shall be based upon the minimum service charges and
staged adjustments set forth in this section.

���� The annual service charge
shall be paid to the municipality on a quarterly basis in a manner consistent
with the municipality's tax collection schedule.

���� Each municipality which enters
into a financial agreement on or after the effective date of P.L.2003, c.125
(C.40A:12A-4.1 et al.) shall remit five percent of the annual service charge
collected by the municipality to the county in accordance with the provisions
of R.S.54:4-74.� If the five percent remittance due to the county is not paid
when due, the unpaid balance thereof and interest, at the rate of one percent
per month accrued thereon, together with attorneys' fees and court costs, may
be recovered by the county from the municipality in an action filed in a court
of competent jurisdiction.� A municipal finance officer certificate may be
subject to revocation or suspension pursuant to section 7 of P.L.1988, c.110
(C.40A:9-140.12) for willful or intentional failure, neglect, or refusal to
comply with this section.� If the municipality enters into a contract with a
board of education pursuant to section 7 of P.L.2023, c.311 (C.18A:7G-15.1a),
the municipality shall also remit to the board of education such amounts as may
be required under the contract.

����
Each municipality which
enters into a financial agreement on or after the effective date of P.L.��� ,
c.��� (pending before the Legislature as this bill), shall remit a percentage
of the annual service charge to the school district or districts, including
regional school districts, immediately upon receipt of that service charge.�
The amount of the annual service charge to be remitted to the school district
or districts, including regional school districts, related to the financial
agreement entered into on or after the effective date of P.L.��� , c.���
(pending before the Legislature as this bill) shall be the amount calculated by
multiplying the number of school-age children who are attending public school
in the municipality or in a regional school district that serves the
municipality and who are residing in the approved project as certified by the
urban renewal entity in the annual auditor�s report to the mayor and governing
body of the municipality, by the school district�s budgetary cost per pupil
included in the "user-friendly" plain language budget summary
pursuant to section 2 of P.L.2007, c.53 (C.18A:22-8a).

���� Against the annual service
charge, the urban renewal entity shall be entitled to credit for the amount,
without interest, of the real estate taxes on land paid by it in the last four
preceding quarterly installments.

���� Notwithstanding the provisions
of this section or of the financial agreement, the minimum annual service
charge shall be the amount of the total taxes levied against all real property
in the area covered by the project in the last full tax year in which the area
was subject to taxation, and the minimum annual service charge shall be paid in
each year in which the annual service charge calculated pursuant to this
section or the financial agreement would be less than the minimum annual
service charge.

���� c.���� All exemptions granted
pursuant to the provisions of P.L.1991, c.431 (C.40A:20-1 et seq.) shall
terminate at the time prescribed in the financial agreement.

���� Upon the termination of the
exemption granted pursuant to the provisions of P.L.1991, c.431 (C.40A:20-1 et
seq.), the project, all affected parcels, land, and all improvements made
thereto shall be assessed and subject to taxation as are other taxable properties
in the municipality.� After the date of termination, all restrictions and
limitations upon the urban renewal entity shall terminate and be at an end upon
the entity's rendering its final accounting to and with the municipality.

(cf: P.L.2025, c.91, s.2)

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

STATEMENT

���� This bill provides counties
and school districts with notice that a municipality is considering granting
long term tax exemptions, and requires municipalities to share amounts received
by urban renewal entities in lieu of property taxes with school districts,
including regional school districts.

���� Under the bill, urban renewal
entities are required to provide counties and school districts with copies of
applications for long term tax exemptions.� Mayors are required to provide
counties and school districts with copies of the recommendations mayors submit
to municipal governing bodies with regard to applications from urban renewal
entities.� Municipal governing bodies are to provide counties and school
districts with a 10-day period to review mayoral recommendations, within which
period counties and school districts are allowed to submit their own
recommendations.� When determining whether to approve an application, a
municipal governing body is required to give due consideration to the concerns
of counties and school districts.

���� The bill also requires
municipalities to provide a portion of the amounts received in lieu of property
taxation from urban renewal entities to the school district or districts that
serve the municipality, including a regional school district.� A municipality
that receives a payment in lieu of taxation from an urban renewal entity is
required to distribute a portion of the amount received, immediately upon
receipt, to the school district or districts, including regional school
districts, as specified in the bill.

���� Under current law, a
municipality must provide five percent of the payment in lieu of taxes to the
county.