Requires nonpublic secondary schools, independent institutions of higher education, and State to make payment to school districts for educational costs of students residing in tax-exempt housing upon adoption of resolution by municipal governing body.

A5131

ASSEMBLY, No. 5131

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 28, 2026

Sponsored by:

Assemblywoman� DAWN FANTASIA

District 24 (Morris, Sussex and Warren)

Co-Sponsored by:

Assemblymen Inganamort and Auth

SYNOPSIS

���� Requires nonpublic secondary schools, independent
institutions of higher education, and State to make payment to school districts
for educational costs of students residing in tax-exempt housing upon adoption
of resolution by municipal governing body.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning the educational costs of students
residing on certain tax-exempt property, amending P.L.2007, c.62, and
supplementing Title 18A of the New Jersey Statutes and Title 52 of the Revised
Statutes.

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

���� 1.��� (New section)� a.� Upon
adoption of a resolution by the governing body or bodies of the municipality or
municipalities constituting a school district, and notwithstanding any
provision of law or regulation to the contrary, a nonpublic school located in the
State that offers an educational program for students in grades nine through 12
or in any one or more of those grade levels, shall be required to annually make
a payment for any student who resides in a tax-exempt facility located on
property owned by the nonpublic school and who is enrolled in a public school
district.� The amount of the payment shall equal the district's per pupil general
fund tax levy amount for the budget year which shall be calculated by dividing
the general fund tax levy by the resident enrollment.

���� b.��� Annually, by November 1
of each budget year, the board of education shall notify the nonpublic school
of the number of resident students enrolled in the school district who reside
in a tax-exempt facility owned by the nonpublic school on the last school day
prior to October 16 of the current school year.� The board shall also notify
the nonpublic school of the per pupil general fund tax levy amount for the
budget year and the total payment owed by the nonpublic school.� The nonpublic
school shall forward payment to the board of education within 60 days of
receipt of the notice of the required payment.

���� 2.��� (New section)� a.� Upon
adoption of a resolution by the governing body or bodies of the municipality or
municipalities constituting a school district, and notwithstanding any
provision of law or regulation to the contrary, an independent institution of
higher education located in the State shall annually make a payment for any
student who resides in a tax-exempt facility located on property owned by the
independent institution of higher education and who is enrolled in a public
school district.� The amount of the payment shall equal the district's per
pupil general fund tax levy amount for the budget year which shall be
calculated by dividing the general fund tax levy by the resident enrollment.

���� b.��� Annually, by November 1
of each budget year, the board of education shall notify the independent
institution of higher education of the number of resident students enrolled in
the school district who reside in a tax-exempt facility owned by the
independent institution of higher education on the last school day prior to
October 16 of the current school year.� The board shall also notify the
independent institution of higher education of the per pupil general fund tax
levy amount for the budget year and the total payment owed by the independent
institution of higher education.� The independent institution of higher
education shall forward payment to the board of education within 60 days of
receipt of the notice of the required payment.

���� 3.� (New section) a.� Upon
adoption of a resolution by the governing body or bodies of the municipality or
municipalities constituting a school district, and notwithstanding any
provision of law or regulation to the contrary, the Department of the Treasury
shall annually make a payment for any student who resides in a tax-exempt
facility located on property owned by the State and who is enrolled in a public
school district.� The amount of the payment shall equal the district's per
pupil general fund tax levy amount for the budget year which shall be
calculated by dividing the general fund tax levy by the resident enrollment.

���� b.��� Annually, by November 1
of each budget year, the board of education shall notify the Department of the
Treasury of the number of resident students enrolled in the school district who
reside in a tax-exempt facility owned by the State on the last school day prior
to October 16 of the current school year.� The board shall also notify the department
of the per pupil general fund tax levy amount for the budget year and the total
payment owed by the department.� The department shall forward payment to the
board of education within 60 days of receipt of the notice of the required
payment.

���� 4.��� Section 3 of P.L.2007,
c.62 (C.18A:7F-38) is amended to read as follows:

����� 3.
a. Notwithstanding the provisions of any other law to the contrary, a school
district shall not adopt a budget pursuant to sections 5 and 6 of P.L.1996,
c.138 (C.18A:7F-5 and 18A:7F-6) with an increase in its adjusted tax levy that
exceeds, except as provided in subsection e. of section 4 of P.L.2007, c.62
(C.18A:7F-39), the tax levy growth limitation calculated as follows: the sum of
the prebudget year adjusted tax levy and the adjustment for increases in
enrollment multiplied by 2.0 percent, and adjustments for an increase in health
care costs, increases in amounts for certain normal and accrued liability
pension contributions set forth in sections 1 and 2 of P.L.2009, c.19 amending
section 24 of P.L.1954, c.84 (C.43:15A-24) and section 15 of P.L.1944, c.255
(C.43:16A-15) for the year set forth in those sections, in the case of an SDA
district as defined pursuant to section 3 of P.L.2000, c.72 (C.18A:7G-3),
during the 2018-2019 through the 2024-2025 school years, increases to raise a
general fund tax levy to an amount that does not exceed its local share, and,
in the case of a school district first receiving preschool education aid in the
2025-2026, 2026-2027, or 2027-2028 school years and participating in the pilot
program established by the commissioner pursuant to subsection h. of section 12
of P.L.2007, c.260 (C.18A:7F-54), increases to raise a general fund tax levy
for the local share of preschool education costs
, less any payment
received in the prebudget year from a nonpublic secondary school, an independent
institution of higher education, or the Department of the Treasury pursuant to
sections 1, 2, or 3 of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill)
.

����� b.
(1) The allowable adjustment for increases in enrollment authorized pursuant to
subsection a. of this section shall equal the per pupil prebudget year adjusted
tax levy multiplied by EP, where EP equals the sum of:

����� (a)� 0.50
for each unit of weighted resident enrollment that constitutes an increase from
the prebudget year over 1%, but not more than 2.5%;

����� (b)� 0.75
for each unit of weighted resident enrollment that constitutes an increase from
the prebudget year over 2.5%, but not more than 4%; and

����� (c)� 1.00
for each unit of weighted resident enrollment that constitutes an increase from
the prebudget year over 4%.

����� (2)� A
school district may request approval from the commissioner to calculate EP
equal to 1.00 for any increase in weighted resident enrollment if it can
demonstrate that the calculation pursuant to paragraph (1) of this subsection
would result in an average class size that exceeds 10% above the facilities
efficiency standards established pursuant to P.L.2000, c.72 (C.18A:7G-1 et
al.).

����� c.�� (Deleted
by amendment, P.L.2010, c.44)

����� d.
(1) The allowable adjustment for increases in health care costs authorized
pursuant to subsection a. of this section shall equal that portion of the
actual increase in total health care costs for the budget year, less any
withdrawals from the current expense emergency reserve account for increases in
total health care costs, that exceeds 2.0 percent of the total health care
costs in the prebudget year, but that is not in excess of the product of the
total health care costs in the prebudget year multiplied by the average
percentage increase of the State Health Benefits Program, P.L.1961, c.49
(C.52:14-17.25 et seq.), as annually determined by the Division of Pensions and
Benefits in the Department of the Treasury.

����� (2)� The
allowable adjustment for increases in the amount of normal and accrued
liability pension contributions authorized pursuant to subsection a. of this
section shall equal that portion of the actual increase in total normal and
accrued liability pension contributions for the budget year that exceeds 2.0
percent of the total normal and accrued liability pension contributions in the
prebudget year.

����� (3)� In
the case of an SDA district, as defined pursuant to section 3 of P.L.2000, c.72
(C.18A:7G-3), in which the prebudget year adjusted tax levy is less than the
school district's prebudget year local share as calculated pursuant to section
10 of P.L.2007, c.260 (C.18A:7F-52), the allowable adjustment for increases to
raise a tax levy that does not exceed the school district's local share shall
equal the difference between the prebudget year adjusted tax levy and the
prebudget year local share.

����� (4)�
In the case of a school district first receiving preschool education aid in the
2025-2026, 2026-2027, or 2027-2028 school years and participating in the pilot
program established by the commissioner pursuant to subsection h. of section 12
of P.L.2007, c.260 (C.18A:7F-54), the allowable adjustment for increases to
raise a general fund tax levy for the local share of preschool education costs
shall be equal to the actual increase required to provide preschool education
under the pilot program less State aid provided pursuant to subsection h. of
section 12 of P.L.2007, c.260 (C.18A:7F-54).

����� A
school district first receiving preschool education aid in the 2025-2026 school
year and participating in the pilot program established by the commissioner
pursuant to subsection h. of section 12 of P.L.2007, c.260 (C.18A:7F-54) may,
prior to the delivery of tax bills pursuant to R.S.54:4-64, recertify to the
county board of taxation the sum to be raised in the district during the
ensuing school year if the change in the amount to be raised is equal to the
district�s local share of preschool education costs for that school year.

����� e.�� (Deleted
by amendment, P.L.2010, c.44)

����� f.��� The
adjusted tax levy shall be increased or decreased accordingly whenever the
responsibility and associated cost of a school district activity is transferred
to another school district or governmental entity.

(cf:
P.L.2025, c.100, s.3)

���� 5.��� This act shall take
effect immediately and shall first apply to the first full school year
beginning after enactment.

STATEMENT

���� This bill would require, upon
adoption of a resolution by the governing body or bodies of a municipality or
municipalities constituting a school district, a nonpublic secondary school, an
independent institution of higher education, or the Department of the Treasury
to annually make a payment for any student who resides in a tax-exempt facility
located on property owned by the nonpublic school, independent institution of
higher education, or the State and is enrolled in a public school district.�
The amount of the payment will equal the district's per pupil general fund tax
levy amount for the budget year.

���� Under the bill's provisions,
annually by November 1 of the budget year, a board of education would notify
the nonpublic school, independent college or university, or the Department of the
Treasury of the number of resident students enrolled in the school district who
reside in a tax-exempt facility owned by the nonpublic school, independent
institution of higher education, or the State, the per pupil general fund tax
levy amount, and the total payment owed.� The payment must be forwarded to the
board of education within 60 days of receipt of the notice of the required
payment.� The recipient district�s tax levy growth cap for the subsequent
school year will be reduced by the amount of the total payment received under
this bill, thus ensuring that the additional revenue is used to reduce property
taxes.