Bill Text: NJ A3896 | 2014-2015 | Regular Session | Introduced
Bill Title: Changes State assistance to urban enterprise zones over seven years by increasing reduced sales tax in enterprise zones and dedicating increase to zone municipalities.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2015-05-27 - Reviewed by the Sales Tax Review Commission Recommend to not enact [A3896 Detail]
Download: New_Jersey-2014-A3896-Introduced.html
Sponsored by:
Assemblyman SEAN T. KEAN
District 30 (Monmouth and Ocean)
Assemblyman DAVID P. RIBLE
District 30 (Monmouth and Ocean)
SYNOPSIS
Changes State assistance to urban enterprise zones over seven years by increasing reduced sales tax in enterprise zones and dedicating increase to zone municipalities.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning urban enterprise zones and amending various parts of the statutory law and supplementing P.L.1983, c.303 (C.52:27H-60 et al.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.1983, c.303 (C.52:27H-62) is amended to read as follows:
3. As used in [this act] P.L.1983, c.303 (C.52:27H-60 et al.):
a. "Enterprise zone" or "zone" means an urban enterprise zone designated by the authority pursuant to [this act] P.L.1983, c.303 (C.52:27H-60 et al.);
b. "Authority" means the New Jersey Urban Enterprise Zone Authority created by [this act] P.L.1983, c.303 (C.52:27H-60 et al.);
c. "Qualified business" means any entity authorized to do business in the State of New Jersey which, at the time of designation as an enterprise zone or a UEZ-impacted business district, is engaged in the active conduct of a trade or business in that zone or district; or an entity which, after that designation but during the designation period, becomes newly engaged in the active conduct of a trade or business in that zone or district and has at least [25%] 25 percent of its full-time employees employed at a business location in the zone or district, meeting one or more of the following criteria:
(1) Residents within the zone, the district, within another zone, or within a qualifying municipality; or
(2) Unemployed for at least six months prior to being hired and residing in New Jersey, and recipients of New Jersey public assistance programs for at least six months prior to being hired, or either of the aforesaid; or
(3) Determined to be low income individuals pursuant to the Workforce Investment Act of 1998, Pub.L.105-220 [(29 U.S.C. s.2811)] (29 U.S.C. s.2801);
Approval as a qualified business shall be conditional upon meeting all outstanding tax obligations, and may be withdrawn by the authority if a business is continually delinquent in meeting its tax obligations;
d. "Qualifying
municipality" means any municipality in which there was, in the last full
calendar year immediately preceding the year in which application for
enterprise zone designation is submitted pursuant to section 14 of P.L.1983,
c.303 (C.52:27H-73), an annual average of at least 2,000 unemployed persons,
and in
which the municipal average annual unemployment rate for that year exceeded the
State average annual unemployment rate; except that any municipality which
qualifies for State aid pursuant to P.L.1978, c.14 (C.52:27D-178 et seq.) shall
qualify if its municipal average annual unemployment rate for that year exceeded
the State average annual unemployment rate. The annual average of unemployed
persons and the average annual unemployment rates shall be estimated for the
relevant calendar year by the [Office
of Labor Planning and Analysis of the]
State Department of Labor and Workforce Development. In addition to those
municipalities that qualify pursuant to the criteria set forth above, that
municipality accorded priority designation pursuant to subsection e. of section
7 of P.L.1983, c.303 (C.52:27H-66), those municipalities set forth in
paragraph (7), paragraph (8) of section 3 of P.L.1995, c.382 (C.52:27H-66.1),
and paragraph (9) of section 3 of P.L.1995, c.382 [as amended by section 3 of P.L.2004, c.75
(C.52:27H-66.1)],
and the municipalities in which the three additional enterprise zones,
including the joint enterprise zone, are to be designated pursuant to criteria
according priority consideration for designation of the zones pursuant to
section 12 of P.L.2001, c.347 (C.52:27H-66.7) shall be deemed qualifying
municipalities;
e. "Public assistance" means income maintenance funds administered by the Department of Human Services or by a county welfare agency;
f. "Zone development corporation" means a nonprofit corporation or association created or designated by the governing body of a qualifying municipality to formulate and propose a preliminary zone development plan pursuant to section 9 of P.L.1983, c.303 (C.52:27H-68) and to prepare, monitor, administer and implement the zone development plan;
g. "Zone development plan" means a plan adopted by the governing body of a qualifying municipality for the development of an enterprise zone therein, and for the direction and coordination of activities of the municipality, zone businesses, and community organizations within the enterprise zone toward the economic betterment of the residents of the zone and the municipality;
h. "Zone neighborhood association" means a corporation or association of persons who either are residents of, or have their principal place of employment in, a municipality in which an enterprise zone has been designated pursuant to [this act] P.L.1983, c.303 (C.52:27H-60 et al.); which is organized under the provisions of Title 15 of the Revised Statutes or Title 15A of the New Jersey Statutes; and which has for its principal purpose the encouragement and support of community activities within, or on behalf of, the zone so as to (1) stimulate economic activity, (2) increase or preserve residential amenities, or (3) otherwise encourage community cooperation in achieving the goals of the zone development plan;
i. "Enterprise zone assistance fund" or "assistance fund" means the fund created by section 29 of P.L.1983, c.303 (C.52:27H-88); [and]
j. "UEZ-impacted business district" or "district" means an economically-distressed business district classified by the authority as having been negatively impacted by two or more adjacent urban enterprise zones in which [50% less] the sales tax is collected pursuant to section 21 of P.L.1983, c.303 (C.52:27H-80) and section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill);
k. "Director" means the Director of the Division of Taxation in the Department of the Treasury; and
l. "State Treasurer" means the Treasurer of the State of New Jersey.
(cf: P.L.2006, c.34, s.3)
2. Section 6 of P.L.1983, c.303 (C.52:27H-65) is amended to read as follows:
6. It shall be the duty of the authority to:
a. Promulgate criteria for the designation of zones pursuant to the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et al.);
b. Receive and evaluate applications of municipalities for the designation of zones;
c. Enter into discussions with applying municipalities regarding zone development proposals;
d. Act as agent of the State with respect to zone development plans, and in determining the State-furnished components to be included in those plans;
e. Designate zones in accordance with the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et al.) and promulgate rules and regulations necessary to carry out its duties under [this act] P.L.1983, c.303 (C.52:27H-60 et al.);
f. Exercise continuing review and supervision of the implementation of zone development plans;
g. Receive and evaluate proposals of qualifying municipalities in which enterprise zones are designated for funding of projects and increased eligible municipal services from the enterprise zone assistance fund as shall be used for the purposes of that fund and for the uses prescribed in section 29 of P.L.1983, c.303 (C.52:27H-88) and section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill), and to certify annually to the State Treasurer amounts to be paid from the enterprise zone assistance fund to support approved projects and increased eligible municipal services in designated enterprise zones;
h. Assist and represent qualifying municipalities in any negotiations with, or proceedings before, other agencies of State Government or of the federal government, to secure necessary or appropriate assistance, support, and cooperation of those agencies in the implementation of zone development plans in accordance with the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et al.) and any other applicable State or federal law;
i. Upon request, assist agencies of municipal government in gathering, compiling, and organizing data to support an application for designation of a zone, and in identifying and coordinating the elements of a zone development proposal suitable for the zone sought to be designated;
j. Provide assistance to State and local government agencies relating to application for the security of permits, licenses, and other regulatory approvals required by those agencies, to assure consideration and expeditious handling of regulatory requirements of any [zone] qualified business, zone business association, or zone neighborhood association [; regulatory]. Regulatory agencies of the State and its agencies and instrumentalities may agree to any simplification, consolidation, or other liberalization of procedural requirements which may be requested by the authority and which is not inconsistent with provisions of law;
k. Assist the State in applying to, or entering into negotiations or agreements with, the federal government, for federal enterprise zone designations; and
l. Exercise continuing review of the implementation of [this act] P.L.1983, c.303 (C.52:27H-60 et al.), and to report annually to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature on the effectiveness of enterprise zones in addressing the conditions cited in [this act] P.L.1983, c.303 (C.52:27H-60 et al.), including any recommendations for legislation to improve the effectiveness of operation of those zones. The report shall be submitted one year from the effective date of [this act] P.L.1983, c.303 (C.52:27H-60 et al.), and annually thereafter.
(cf: P.L.1983, c.303, s.6)
3. Section 7 of P.L.1983, c.303 (C.52:27H-66) is amended to read as follows:
7. The authority shall designate enterprise zones from among those areas of qualifying municipalities determined to be eligible pursuant to P.L.1983, s.303 (C.52:27H-60 et al.). No more than 32 enterprise zones shall be in effect at any one time. No more than one enterprise zone shall be designated in any one municipality. Except as otherwise provided by section 11 of P.L.2001, c.347 (C.52:27H-66.6), any designation granted shall be for a period of 20 years, beginning with the year in which a zone is eligible for an exemption to the extent of [50%] 50 percent of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), and shall not be renewed at the end of that period. In designating enterprise zones, the authority shall seek to avoid excessive geographic concentration of zones in any particular region of the State. At least six of the 10 additional enterprise zones authorized pursuant to this section [3 of P.L.1993, c.367] shall be located in counties in which enterprise zones have not previously been designated and shall be designated within 90 days of the date of the submittal of an application and zone development plan. The authority shall accept applications within 90 days of the effective date of P.L.1993, c.367 (C.52:27H-65.1 et al.). Notwithstanding the provisions of P.L.1983, c.303 (C.52:27H-60 et seq.) to the contrary, a qualified business in any of the six additional enterprise zones to be designated by the authority pursuant to the criteria for priority consideration in this section shall be entitled to an exemption to the extent [of 50%] provided in section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The following criteria shall be utilized in according priority consideration for designation of these zones by the authority:
a. One zone shall be located in a county of the second class with a population greater than 595,000 and less than 675,000 according to the latest federal decennial census and shall be located in the qualifying municipality in that county with the highest annual average number of unemployed persons and the highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development;
b. Two zones shall be located in a county of the second class with a population greater than 445,000 and less than 455,000 according to the latest federal decennial census, one of which shall be located in the qualifying municipality in that county with the highest annual average number of unemployed persons and the highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development, and one of which shall be located in the qualifying municipality in that county with the second highest annual average number of unemployed persons and the second highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development;
c. One zone shall be located in a county of the third class with a population greater than 84,000 and less than 92,000 according to the latest federal decennial census and shall be located in the qualifying municipality in that county with the highest annual average number of unemployed persons and the highest average annual unemployment rate for the 1992 calendar year according to the estimate by the State Department of Labor and Workforce Development;
d. One zone shall be located within two noncontiguous qualifying municipalities but comprised of not more than two noncontiguous areas each having a continuous border, if:
(1) both municipalities are located in the same county which shall be a county of the fifth class with a population greater than 500,000 and less than 555,000 according to the latest federal decennial census;
(2) the two municipalities submit a joint application and zone development plan; and
(3) each of the municipalities has a population greater than 16,000 and less than 30,000 and a population density of more than 5,000 persons per square mile, according to the latest federal decennial census; and
e. One zone shall be located within a municipality having a population greater than 38,000 and less than 46,000 according to the latest federal decennial census if the municipality is located within a county of the fifth class with a population greater than 340,000 and less than 440,000 according to the latest federal decennial census.
(cf: P.L.2004, c.75, s.2)
4. Section 3 of P.L.2001, c.347 (C.52:27H-66.2) is amended to read as follows:
3. The authority shall designate a classification known as a "UEZ-impacted business district" for a municipality which can demonstrate to the authority that its business district is economically distressed and is being negatively impacted by the presence of two or more adjacent enterprise zones in which [50% less] the sales tax is collected [pursuant to] in accordance with section [21 of P.L. 1983, c. 303 (C.52:27H-80)] 9 of P.L. , c. (C. ) (pending before the Legislature as this bill).
(cf: P.L.2001, c.347, s.3)
5. Section 5 of P.L.2001, c.347 (C.52:27H-66.4) is amended to read as follows:
5. a. A qualified business within a UEZ-impacted business district authorized pursuant to section 3 of P.L.2001, c.347 (C.52:27H-66.2) shall be entitled to an exemption to the extent [of 50%] provided in section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) from the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) in accordance with [section 21 of the "New Jersey Urban Enterprise Zones Act," P.L.1983, c.303 (C.52:27H-80)], to the same extent as that granted to qualified businesses in the adjacent enterprise zones, provided that the qualified business applies to the Director of the Division of Taxation in the Department of the Treasury for certification pursuant to section 21 of P.L.1983, c.303 (C.52:27H-80), meets the eligibility criteria of section 27 of P.L.1983, c.303 (C.52:27H-86), and satisfies the annual certification requirements of section 28 of P.L.1983, c.303 (C.52:27H-87).
b. The reduced rate revenues authorized by [this section] section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) and received from the taxation of retail sales made by qualified businesses in the UEZ-impacted business district shall be deposited in the General Fund and not allocated in accordance with section [21 of the "New Jersey Urban Enterprise Zones Act," P.L.1983, c.303 (C.52:27H-80)] 9 of P.L. , c. (C. ) (pending before the Legislature as this bill), to the enterprise zone assistance fund.
c. Other than the reduction in sales tax rate provided to qualified businesses pursuant to [this section] section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill), [no] tax credits, incentives, programs, or other benefits of the "New Jersey Urban Enterprise Zones Act," P.L.1983, c.303 (C.52:27H-60 et seq.), shall not be available to businesses in the district as a result of a UEZ-impacted business district designation.
(cf: P.L.2001, c.347, s.5)
6. Section 11 of P.L.2001, c.347 (C.52:27H-66.6) is amended to read as follows:
11. a. Notwithstanding the provisions of any law, rule, regulation or order to the contrary, the designation of an enterprise zone by the authority pursuant to P.L.1983, c.303 [(C.52:27H-60 et seq.)] (C.52:27H-60 et al.), which is located in a municipality in which the annual average of unemployed persons is equal to or greater than 2,000, or the municipal average annual unemployment rate exceeds the State average annual unemployment rate, or an enterprise zone which is located in a municipality contiguous to a municipality in which an enterprise zone is designated pursuant to P.L.1983, c.303 [(C.52:27H-60 et seq.)] (C.52:27H-60 et al.) and in which the annual average of unemployed persons is equal to or greater than 2,000 or the municipal average annual unemployment rate exceeds the State average annual unemployment rate, shall, following the expiration of the third five-year period during which the State shall have collected reduced rate revenues within the zone as provided in subsection c. of section 21 of P.L.1983, c.303 (C.52:27H-80), be extended by the authority, on a one-time basis, for a period of 16 years, within 90 days after the effective date of P.L.2001, c.347 (C.52:27H-66.2 et al.), or within 90 days after the expiration of that third five-year period, whichever is later.
b. During the 90-day period provided for in subsection a. of this section, the authority shall notify all qualified businesses in the enterprise zone that the benefits authorized by sections 16 through 20 of P.L.1983, c.303 (C.52:27H-75 through C.52:27H-79) shall be extended to qualified businesses in the enterprise zone commencing with the designation of the extended enterprise zone and continuing as long as a zone retains its designation as an extended enterprise zone.
c. [Notwithstanding any other provisions of any law, rule or regulation to the contrary, 90 days after the expiration of the period provided for in subsection c. of section 21 of P.L.1983, c.303 (C.52:27H-80), except as provided in subsection b. of section 6 of P.L.1996, c.124 (C.13:1E-116.6) and, and after first depositing 10 percent of the gross amount of all revenues received from the taxation of retail sales made by certified vendors from business locations in an extended enterprise zone designated pursuant to subsection a. of this section, to which this exemption shall apply into the account created in the name of the authority in the enterprise zone assistance fund pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88), the remaining 90 percent shall be deposited immediately upon collection by the Department of the Treasury, as follows:
(1) In the first five-year period, during which the State shall have collected reduced rate revenues within the extended enterprise zone, all such revenues shall be deposited in the enterprise zone assistance fund created pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88);
(2) In the second five-year period during which the State shall have collected reduced rate revenues within the extended enterprise zone, 66 2/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 33 1/3% shall be deposited in the General Fund;
(3) In the third five-year period during which the State shall have collected reduced rate revenues within the extended enterprise zone, 33 1/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 66 2/3% shall be deposited in the General Fund;
(4) In the final year during which the State shall have collected reduced rate revenues within the extended enterprise zone, but not to exceed the life of the enterprise zone, all those revenues shall be deposited in the General Fund.
The revenues required to be deposited in the enterprise zone assistance fund under this section shall be used for the purposes of that fund and for the uses prescribed in section 29 of P.L.1983, c.303 (C.52:27H-88), subject to annual appropriations being made for those purposes and uses.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
d. [The designation as an extended enterprise zone pursuant to this section shall terminate if the authority determines that the municipality in which the zone is located fails to meet the criteria of subsection a. of this section for three consecutive years. Any enterprise zone which loses its designation as an extended enterprise zone pursuant to this subsection shall be eligible to re-apply to the authority for designation as an extended enterprise zone pursuant to the provisions of P.L.1983, c.303 (C.52:27H-60 et seq.). If the authority approves its application, an urban enterprise zone designation may be extended to the applicant in accordance with the schedules set forth in P.L.1983, c.303 (C.52:27H-60 et seq.), beginning at the point where the enterprise zone was located on such schedules on the effective date of P.L.2001, c.347 (C.52:27H-66.2 et al.).] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
(cf: P.L.2001, c.347, s.11)
7. Section 21 of P.L.1983, c.303 (C.52:27H-80) is amended to read as follows:
21. Receipts of retail sales, except retail sales of motor vehicles, of alcoholic beverages as defined in the "Alcoholic Beverage Tax Law," R.S.54:41-1 et seq., of cigarettes as defined in the "Cigarette Tax Act," P.L.1948, c.65 (C.54:40A-1 et seq.), of manufacturing machinery, equipment or apparatus, and of energy, made by a certified seller from a place of business owned or leased and regularly operated by the seller for the purpose of making retail sales, and located in a designated enterprise zone established pursuant to the "New Jersey Urban Enterprise Zones Act," P.L.1983, c.303 (C.52:27H-60 et al.) , or a UEZ-impacted business district established pursuant to section 3 of P.L.2001, c.347 (C.52:27H-66.2), are exempt to the extent [of 50%] provided in section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) and section 5 of P.L.2001, c.347 (C.52:27H-66.4), as appropriate, from the percentage of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
Any seller, which is a qualified business having a place of business located in a designated enterprise zone or in a designated UEZ-impacted business district, may apply to the Director of the Division of Taxation in the Department of the Treasury for certification pursuant to this section. The director shall certify a seller if the director shall find that the seller owns or leases and regularly operates a place of business located in the designated enterprise zone or in the designated UEZ-impacted business district for the purpose of making retail sales, that items are regularly exhibited and offered for retail sale at that location, and that the place of business is not utilized primarily for the purpose of catalogue or mail order sales. The certification under this section shall remain in effect during the time the business retains its status as a qualified business meeting the eligibility criteria of section 27 of P.L.1983, c.303 (C.52:27H-86). However, the director may, at any time, revoke a certification granted pursuant to this section if the director shall determine that the seller no longer complies with the provisions of this section.
Notwithstanding the provisions of [this act] P.L.1983, c.303 (C.52:27H-60 et al.) to the contrary, except as may otherwise be provided by section 7 of P.L.1983, c.303 (C.52:27H-66), the authority may, in its discretion, determine if the provisions of this section shall apply to any enterprise zone designated after the effective date of P.L.1985, c.142 (C.52:27H-66 et al.); provided, however, that the authority may make [such a] this determination only where the authority finds that the award of an exemption of [50 percent] a percentage of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) in accordance with section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) will not have any adverse economic impact upon any other urban enterprise zone.
[Notwithstanding any other provisions of law to the contrary, except as provided in subsection b. of section 6 of P.L.1996, c.124 (C.13:1E-116.6), after first depositing 10 percent of the gross amount of all revenues received from the taxation of retail sales made by certified sellers from business locations in designated enterprise zones to which this exemption shall apply into the account created in the name of the authority in the enterprise zone assistance fund pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88), the remaining 90 percent shall be deposited immediately upon collection by the Department of the Treasury, as follows:]
a. [In the first five-year period during which the State shall have collected reduced rate revenues within an enterprise zone, all such revenues shall be deposited in the enterprise zone assistance fund created pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88);] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
b. [In the second five-year period during which the State shall have collected reduced rate revenues within an enterprise zone, 66 2/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 33 1/3% shall be deposited in the General Fund;] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
c. [In the third five-year period during which the State shall have collected reduced rate revenues within an enterprise zone, 33 1/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 66 2/3% shall be deposited in the General Fund;] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
d. [In the final five-year period during which the State shall have collected reduced rate revenues within an enterprise zone, but not to exceed the life of the enterprise zone, all those revenues shall be deposited in the General Fund.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
[Commencing on the effective date of P.L.1993, c.144, all revenues in any enterprise zone to which the provisions of this section have been extended prior to the enactment of P.L.1993, c.144 shall be deposited into the enterprise zone assistance fund until there shall have been deposited all revenues into that fund for a total of five full years, as set forth in subsection a. of this section. The State Treasurer then shall proceed to deposit funds into the enterprise zone assistance fund according to the schedule set forth in subsections b. through d. of this section, beginning at the point where the enterprise zone was located on that schedule on the effective date of P.L.1993, c.144. No enterprise zone shall receive the deposit benefit granted by any one subsection of this section for more than five cumulative years.
The revenues required to be deposited in the enterprise zone assistance fund under this section shall be used for the purposes of that fund and for the uses prescribed in section 29 of P.L.1983, c.303 (C.52:27H-88), subject to annual appropriations being made for those purposes and uses.]
(cf: P.L.2011, c.49, s.15)
8. Section 29 of P.L.1983, c.303 (C.52:27H-88) is amended to read as follows:
29. a. (1) There is created an enterprise zone assistance fund to be held by the State Treasurer, which shall be the repository for all moneys required to be deposited therein [under] in accordance with section [21 of P.L.1983, c.303 (C.52:27H-80)] 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) or moneys appropriated annually to the assistance fund. All moneys deposited in the assistance fund shall be held and disbursed in the amounts necessary to fulfill the purposes of this section and subject to the requirements hereinafter prescribed. The State Treasurer may invest and reinvest any moneys in the assistance fund, or any portion thereof, in legal obligations of the United States or of the State or of any political subdivision thereof. Any income from, interest on, or increment to moneys so invested or reinvested shall be included in the assistance fund.
(2) The State Treasurer shall maintain separate accounts for each enterprise zone designated under P.L.1983, c.303 (C.52:27H-60 et al.), and one in the authority's name for the administration of the Urban Enterprise Zone program. The State Treasurer shall credit to each account an amount of the moneys deposited in the assistance fund equal to the amount of revenues collected from the taxation of retail sales made in the zone and appropriated to the enterprise zone assistance fund, or that amount of moneys appropriated to the assistance fund and required to be credited to the enterprise zone account of the qualifying municipality [pursuant to] in accordance with section [21 of P.L.1983, c.303 (C.52:27H-80)] 9 of P.L. , c. (C. ) (pending before the Legislature as this bill).
(3) The State Treasurer shall promulgate the rules and regulations necessary to govern the administration of the assistance fund for the purposes of this section, which shall include, but not be limited to, regulations requiring the establishment of separate bank accounts for funds credited to the enterprise zone account of each qualifying municipality from the enterprise zone assistance fund, commonly known as "first generation funds," and funds generated from the repayments of loans to individuals and businesses from the enterprise zone account of each qualifying municipality and the proceeds from the sale of properties and equipment acquired through the enterprise zone program, commonly known as "second generation funds," and the review, compilation, and monitoring of second generation fund quarterly reports submitted by each enterprise zone.
(4) Any individual, including an individual who is not directly employed by a qualifying municipality, with the authority to administer, allocate or approve the use of enterprise zone assistance funds is subject to the "Local Government Ethics Law," P.L.1991, c.29 (C.40A:9-22.1 et seq.), unless the individual is a State employee or a special State officer.
b. The enterprise zone assistance fund shall be used for the purpose of assisting qualifying municipalities in which enterprise zones are designated in undertaking public improvements, economic development projects, and in upgrading eligible municipal services in designated enterprise zones in accordance with section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. The governing body of a qualifying municipality in which an enterprise zone is designated and the zone development corporation created or designated by the qualifying municipality for that enterprise zone may, by resolution jointly adopted after public hearing, propose to undertake a project for the public improvement of the enterprise zone or to increase eligible municipal services in the enterprise zone, and to fund that project or increase in eligible municipal services from moneys deposited in the enterprise zone assistance fund and credited to the account maintained by the State Treasurer for the enterprise zone.
The proposal so adopted shall set forth a plan for the project or for the increase in eligible municipal services and shall include:
(1) A description of the proposed project or of the municipal services to be increased;
(2) An estimate of the total project costs, or of the total costs of increasing the municipal services, and an estimate of the amounts of funding necessary annually from the enterprise zone account;
(3) A statement of any other revenue sources to be used to finance the project or to fund the increase in eligible municipal services;
(4) A statement of the time necessary to complete the project, or of the time during which the increased municipal services are to be maintained;
(5) A statement of the manner in which the proposed project or increase in municipal services furthers the municipality's policy and intentions for addressing the economic and social conditions existing in the area of the enterprise zone as set forth in the zone development plan approved by the authority; and
(6) A description of the financial and programmatic controls and reporting mechanisms to be used to guarantee that the funds will be spent in accordance with the plan and that the project or increased municipal service will accomplish its purpose.
As used in this section, "project" means an activity funded by the enterprise zone assistance fund through the [qualified] qualifying municipality and implemented by the zone development corporation, including the purchasing, leasing, condemning, or otherwise acquiring of land or other property, or an interest therein, in the enterprise zone or as necessary for a right-of-way or other easement to or from the enterprise zone; the relocating and moving of persons or businesses displaced by the acquisition of land or property; the rehabilitation and redevelopment of land or property, including demolition, clearance, removal, relocation, renovation, alteration, construction, reconstruction, installation, or repair of land or a building, street, highway, alley, utility, service, or other structure or improvement which will lead to increased economic activity within the enterprise zone; the purchase and installation of closed circuit television surveillance systems or other related equipment and those expenses associated with homeland security and domestic preparedness; the acquisition, construction, reconstruction, rehabilitation, or installation of public facilities and improvements, except buildings and facilities for the general conduct of government and schools; the establishment of revolving loan or grant programs for qualified businesses in the enterprise zone to encourage private investment and job creation, matching grant programs for the establishment or operation of pedestrian malls, special improvement districts and tax increment districts, or other appropriate entity; marketing, advertising, and special event activities that will lead to increased economic activity or encourage private investment and job creation in the enterprise zone, but not including the expenditures therefor which are required to be reported pursuant to "The New Jersey Campaign Contributions and Expenditures Reporting Act," P.L.1973, c.83 (C.19:44A-1 et al.) and the costs associated therewith including the costs of an administrative appraisal, economic and environmental analyses, environmental remediation, engineering, planning, design, architectural, surveying, or other professional or managerial services.
As used in this section, "eligible municipal services" means the hiring of additional [policemen or firemen] police officers or firefighters assigned duties in the enterprise zone, or the purchasing or leasing of additional police or fire vehicles, equipment, or apparatus to be used for the provision of augmented or upgraded public safety services in the enterprise zone and its immediate vicinities.
d. Upon adoption by the governing body of the qualifying municipality and by the zone development corporation, the proposal shall be sent to the authority for its evaluation and approval. The authority shall approve the proposal if it shall find:
(1) In the case of a project, that the proposed project furthers the policy and intentions of the zone development plan approved by the authority, and that the estimated annual payments for the project from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account;
(2) In the case of an increase in eligible municipal services, that the proposal furthers the policy and intentions of the zone development plan approved by the authority; that the qualifying municipality has furnished satisfactory assurances that the additional [policemen or firemen] police officers or firefighters to be hired, or the additional vehicles, equipment, or apparatus to be purchased or leased, shall be used to augment or upgrade public safety in the enterprise zone, and shall not be used in other areas of the qualifying municipality; that the qualifying municipality shall annually appropriate for the increased eligible municipal services an amount equal to [20%] 20 percent of the amount of annual payments for the eligible municipal services from the enterprise zone account and shall not request for the increased eligible municipal services an amount equal to more than [35%] 35 percent of the amount of annual payments into the enterprise zone account, unless the municipality and the authority have entered into an agreement or agreements to the contrary prior to July 1, 1992; and that the estimated annual payments for the eligible municipal services from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account.
e. If the authority shall approve the proposal, it shall annually, upon its receipt of a written statement from the governing body of the qualifying municipality and the zone development corporation, certify to the State Treasurer the amount to be paid in that year from the enterprise zone account in the enterprise zone assistance fund with respect to each project or increase in eligible municipal services approved. The authority may at any time revoke its approval of a project or an increase in eligible municipal services if it finds that the annual payments made from the enterprise zone assistance fund are not being used as required by this section.
f. Upon certification by the authority of the annual amount to be paid to a qualifying enterprise zone with respect to any project or increase in eligible municipal services, the State Treasurer shall pay in each year to the qualifying municipality from the amounts deposited in the enterprise zone assistance fund the amount so certified, within the limits of the amounts credited to the enterprise zone account of the qualifying municipality.
g. An amount not to exceed one-third of the amount deposited in the account created in the name of the authority in the enterprise zone assistance fund, pursuant to subsection a. of this section, shall be used by the authority for the coordination and administration of the program throughout the State, including, but not limited to, costs for personnel, operating expenses, and marketing. The balance of the remaining amount shall be distributed to qualifying municipalities in proportion to each municipality's contribution to the enterprise zone assistance fund for the coordination and administration of the program within the qualifying municipality, including but not limited to costs for personnel, operating expenses, and marketing.
(cf: P.L.2009, c.25, s.1)
9. (New section) a. During Fiscal Year 2016, the receipts of all retail sales of goods not exempted from the provisions of section 21 of P.L.1983, c.303 (C.52:27H-80) from a seller who is certified by the director pursuant to that section, shall be taxed at the rate of four percent and collected in a manner consistent with the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The revenues derived from the sales tax collected from those retail sales shall be divided as follows: (1) the General Fund of the State of New Jersey shall receive 87.5 percent; and (2) the remaining 12.5 percent shall be deposited into the separate accounts maintained within the enterprise zone assistance fund for the applicable qualifying municipality's enterprise zone trust fund account in a manner consistent with the purposes and administration of the enterprise zone assistance fund. In a manner consistent with the provisions of subsection c. of section 29 of P.L.1983, c.303 (C.52:27H-88), during Fiscal Year 2016, no less than 10 percent of the monies available in a qualifying municipality's enterprise zone trust fund account shall be appropriated to finance a project undertaken for the public improvement of the enterprise zone.
b. During Fiscal Year 2017, the receipts of all retail sales of goods not exempted from the provisions of section 21 of P.L.1983, c.303 (C.52:27H-80) from a seller who is certified by the director pursuant to that section, shall be taxed at the rate of 4.5 percent and collected in a manner consistent with the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The revenues derived from the sales tax collected from those retail sales shall be divided as follows: (1) the General Fund of the State of New Jersey shall receive 77.78 percent; and (2) the remaining 22.22 percent shall be deposited into the separate accounts maintained within the enterprise zone assistance fund for the applicable qualifying municipality's enterprise zone trust fund account in a manner consistent with the purposes and administration of the enterprise zone assistance fund. In a manner consistent with the provisions of subsection c. of section 29 of P.L.1983, c.303 (C.52:27H-88), during Fiscal Year 2017, no less than 20 percent of the monies available in a qualifying municipality's enterprise zone trust fund account shall be appropriated to finance a project undertaken for the public improvement of the enterprise zone.
c. During Fiscal Year 2018, the receipts of all retail sales of goods not exempted from the provisions of section 21 of P.L.1983, c.303 (C.52:27H-80) from a seller who is certified by the director pursuant to that section, shall be taxed at the rate of five percent and collected in a manner consistent with the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The revenues derived from the sales tax collected from those retail sales shall be divided as follows: (1) the General Fund of the State of New Jersey shall receive 70 percent; and (2) the remaining 30 percent shall be deposited into the separate accounts maintained within the enterprise zone assistance fund for the applicable qualifying municipality's enterprise zone trust fund account in a manner consistent with the purposes and administration of the enterprise zone assistance fund. In a manner consistent with the provisions of subsection c. of section 29 of P.L.1983, c.303 (C.52:27H-88), during Fiscal Year 2018, no less than 30 percent of the monies available in a qualifying municipality's enterprise zone trust fund account shall be appropriated to finance a project undertaken for the public improvement of the enterprise zone.
d. During Fiscal Year 2019, the receipts of all retail sales of goods not exempted from the provisions of section 21 of P.L.1983, c.303 (C.52:27H-80) from a seller who is certified by the director pursuant to that section, shall be taxed at the rate of 5.5 percent and collected in a manner consistent with the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The revenues derived from the sales tax collected from those retail sales shall be divided as follows: (1) the General Fund of the State of New Jersey shall receive 63.64 percent; and (2) the remaining 36.36 percent shall be deposited into the separate accounts maintained within the enterprise zone assistance fund for the applicable qualifying municipality's enterprise zone trust fund account in a manner consistent with the purposes and administration of the enterprise zone assistance fund. In a manner consistent with the provisions of subsection c. of section 29 of P.L.1983, c.303 (C.52:27H-88), during Fiscal Year 2019 and thereafter, no less than 40 percent of the monies available in a qualifying municipality's enterprise zone trust fund account shall be appropriated to finance a project undertaken for the public improvement of the enterprise zone.
e. During Fiscal Year 2020, the receipts of all retail sales of goods not exempted from the provisions of section 21 of P.L.1983, c.303 (C.52:27H-80) from a seller who is certified by the director pursuant to that section, shall be taxed at the rate of six percent and collected in a manner consistent with the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The revenues derived from the sales tax collected from those retail sales shall be divided as follows: (1) the General Fund of the State of New Jersey shall receive 58.33 percent; and (2) the remaining 41.67 percent shall be deposited into the separate accounts maintained within the enterprise zone assistance fund for the applicable qualifying municipality's enterprise zone trust fund account in a manner consistent with the purposes and administration of the enterprise zone assistance fund.
f. During Fiscal Year 2021, the receipts of all retail sales of goods not exempted from the provisions of section 21 of P.L.1983, c.303 (C.52:27H-80) from a seller who is certified by the director pursuant to that section, shall be taxed at the rate of 6.5 percent and collected in a manner consistent with the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The revenues derived from the sales tax collected from those retail sales shall be divided as follows: (1) the General Fund of the State of New Jersey shall receive 53.35 percent; and (2) the remaining 46.65 percent shall be deposited into the separate accounts maintained within the enterprise zone assistance fund for the applicable qualifying municipality's enterprise zone trust fund account in a manner consistent with the purposes and administration of the enterprise zone assistance fund.
g. During Fiscal Year 2022, the receipts of all retail sales of goods not exempted from the provisions of section 21 of P.L.1983, c.303 (C.52:27H-80) from a seller who is certified by the director pursuant to that section, shall be taxed at the rate of seven percent and collected in a manner consistent with the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The revenues derived from the sales tax collected from those retail sales shall be divided as follows: (1) the General Fund of the State of New Jersey shall receive 50 percent; and (2) the remaining 50 percent shall be deposited into the separate accounts maintained within the enterprise zone assistance fund for the applicable qualifying municipality's enterprise zone trust fund account in a manner consistent with the purposes and administration of the enterprise zone assistance fund.
h. During Fiscal Year 2023 and thereafter, the receipts of all retail sales of goods not exempted from the provisions of section 21 of P.L.1983, c.303 (C.52:27H-80) from a seller who is certified by the director as pursuant to that section, shall be taxed at the rate of seven percent and collected in a manner consistent with the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) and all of the revenues derived from the sales tax collected from those retail sales shall be deposited in the General Fund.
10. Section 5 of P.L.2007, c.30 (C.34:1B-194) is amended to read as follows:
5. The governing body of a municipality that establishes a sports and entertainment district may, as part of the ordinance establishing the district: impose one or more of the taxes enumerated in subsection a. of this section; dedicate some or all of those taxes; and dedicate some or all of the taxes enumerated in subsection b. of this section solely for the purposes of financing the project costs of a sports and entertainment facility for the life of the project, as appropriate, except that none of the taxes enumerated in subsection a. or b. of this section shall be imposed or dedicated for a period of more than 30 years.
a. The municipality may, by ordinance, impose any or all of the following:
(1) a tax at the rate of [2%] two percent on the receipts from every sale within the district of tangible personal property subject to taxation pursuant to subsection (a) of section 3 of P.L.1966, c.30 (C.54:32B-3);
(2) a tax at the rate of [2%] two percent on the receipts from every sale within the district of food and drink subject to taxation pursuant to subsection (c) of section 3 of P.L.1966, c.30 (C.54:32B-3);
(3) a tax at the rate of [2%] two percent on charges of rent for every occupancy of a room or rooms in a hotel located within the district and subject to taxation pursuant to subsection (d) of section 3 of P.L.1966, c.30 (C.54:32B-3); or
(4) a tax at the rate of [2%] two percent on the admission charge to a place of amusement within the district and subject to taxation pursuant to subsection (e) of section 3 of P.L.1966, c.30 (C.54:32B-3).
b. The municipality may dedicate, by ordinance, any hotel and motel occupancy tax revenues collected within the district that the municipality is authorized to impose pursuant to section 3 of P.L.2003, c.114 (C.40:48F-1) and, at the discretion of the municipality, an additional charge of [2%] two percent.
c. A tax imposed under subsection a. of this section shall be in addition to any other tax or fee imposed pursuant to statute or local ordinance or resolution by any governmental entity upon the same transaction.
d. A copy of an ordinance adopted pursuant to section 4 of P.L.2007, c.30 (C.34:1B-193) shall be transmitted upon adoption or amendment thereof to the State Treasurer. An ordinance so adopted or any amendment thereto shall provide that the tax provisions of the ordinance or any amendment to the tax provisions shall take effect on the first day of the first full month occurring 90 days after the date of transmittal to the State Treasurer.
e. A municipality that creates a district pursuant to section 4 of P.L.2007, c.30 (C.34:1B-193), which overlaps, in whole or in part, with an urban enterprise zone in which the receipts of certain sales are exempt to the extent [of 50%] provided in section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), [pursuant to section 21 of P.L.1983, c.303 (C.52:27H-80),] shall continue to administer those sales tax revenues collected within the designated urban enterprise zone as otherwise provided pursuant to P.L.1983, c.303 [(C.52:27H-60 et seq.)] (C.52:27H-60 et al.).
(cf: P.L.2007, c.30, s.5)
11. Section 4 of P.L.1995, c.173, s.4 (C.40A:12A-53) is amended to read as follows:
4. a. A municipality that has created a district pursuant to section 3 of P.L.1995, c.173 (C.40A:12A-52), in which there is an area designated as an urban enterprise zone in which the receipts of certain sales are exempt to the extent [of 50%] provided in section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), [pursuant to section 21 of P.L.1983, c.303 (C.52:27H-80),] may for the purpose of increasing public revenue adopt an ordinance to levy and collect, within the district, a franchise assessment not to exceed three percent of gross receipts and to devote the proceeds from those assessments to municipal purposes as provided in this section.
b. The rate of the franchise assessment shall be uniform throughout the district. The franchise assessment shall apply only within the territorial limits of the district and shall be in addition to any other assessments, taxes, and excises.
c. The ordinance shall be a valid and binding ordinance of the municipality. The ordinance shall continue in force and effect until repealed by the governing body. The municipality may also provide and covenant by ordinance that the ordinance authorizing the franchise assessment will not be amended so as to repeal or reduce the franchise assessment while bonds issued pursuant to P.L.1995, c.173 (C.40A:12A-50 et seq.) and [this amendatory and supplementary act,] P.L.1996, c.73 (C.40A:12A-50a et al.) are outstanding, unless the resolution authorizing the bonds shall provide otherwise. [Such] The covenant shall constitute a valid and legally binding contract between the municipality and bondholders.
d. [No] A franchise assessment shall not be imposed on gross receipts which the municipality or the State is prohibited from taxing under New Jersey law, or the Constitution and laws of the United States of America.
e. Upon adoption, the municipal clerk shall immediately transmit a copy of the ordinance to the Director of the Division of Local Government Services in the Department of Community Affairs and to the Director of the Division of Taxation in the Department of the Treasury. Every ordinance levying a franchise assessment pursuant to this section shall provide for reporting assessments due and for the collection thereof, and all franchise assessments pursuant to [such an] that ordinance shall be remitted to the chief financial officer of the municipality. An ordinance levying a franchise assessment shall take effect only on the first day of any month in any year. The ordinance shall provide for the allocation and distribution of the proceeds of the franchise assessments collected; provided, however, that only [such] sums as are retained by the municipality pursuant to the ordinance shall be included in the general funds of the municipality and all other franchise assessment proceeds shall be held in trust for the payment or reimbursement of costs or obligations incurred for the purposes of the district.
f. The ordinance shall set forth the person or persons subject to the franchise assessment payment and collection procedures, and any other matters deemed relevant by the municipality with the municipality having discretion as to the mechanism to be utilized. The ordinance shall also contain findings that the imposition of the franchise assessment is necessary because of the substantial risks undertaken to develop a landfill reclamation improvement district, and to offset loss of revenues by the municipality because of its assignment of payments in lieu of taxes.
g. The ordinance shall provide for the collection of the franchise assessment by an officer of the municipality who shall be designated in the ordinance; shall provide methods for enforcement; and may provide penalties for the violation of any of the provisions of the ordinance.
h. All revenues collected under the ordinance and retained by the municipality pursuant to this section shall be deposited in the general fund of the municipality and may be used for general municipal purposes, including the payment of salaries, construction, reconstruction, maintenance, and repair of municipal buildings, installations and properties, and for [such] other purposes as may be provided by existing ordinances or ordinances hereafter enacted for general municipal purposes.
(cf: P.L.1996, c.73, s.5)
12. This act shall take effect immediately, but shall remain inoperative until July 1, 2015.
STATEMENT
This bill increases financial assistance to urban enterprise zones (UEZs) over a seven-year period, by dedicating from the beginning of Fiscal Year 2016 to the end of Fiscal Year 2022, one half of one penny for every dollar of sales tax revenues, as increased annually, in the sales tax of goods and services in UEZs subject to the tax, to the accounts held in the Urban Enterprise Zone Assistance Fund (UEZ Assistance Fund) in the name of the respective municipalities having UEZs. The bill ends all UEZ Assistance fund appropriations to UEZs at the end of the seven-year period and thereafter dedicates all sales tax collection revenues in UEZs to the General Fund. In doing so, the bill deletes the schedule of financial assistance to UEZs and municipalities having UEZs as provided in current law but continues the 20-year original designation period as well as the one-time 16-year extension period for qualified UEZs. The bill increases the sales tax in UEZs from 3.5 percent to seven percent over the seven-year period to provide funding to UEZs from the UEZ Assistance Fund.
The bill requires UEZs to contribute an increasing percentage from at least 10 percent in Fiscal Year 2016, to at least 40 percent in Fiscal Year 2020 and thereafter, of UEZ funds to be spent on eligible capital projects and public improvements in UEZs and grant and loan programs for qualified UEZ businesses.
Further, under the same designation period as for UEZs, the bill increases the amount of the reduced sales tax collected by qualified businesses located in UEZ-impacted business districts.
