Sponsored by:

Assemblyman GILBERT "WHIP" L. WILSON

District 5 (Camden and Gloucester)

SYNOPSIS

Authorizes payment in lieu of taxes for tax exempt institution of higher education property if 25 percent of property of municipality is tax exempt and 12.5 percent is institution's property.

CURRENT VERSION OF TEXT

Introduced Pending Technical Review by Legislative Counsel

An Act concerning payments in lieu of taxation for property owned by an institution of higher education and supplementing chapter 4 of Title 54 of the Revised Statutes.

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

1. a. Nowithstanding any law, rule or regulation to the contrary, including, but not limited to, R.S.54:4-3.3 and R.S.54:4-3.6, a payment in lieu of taxes shall be made with respect to real property owned by an institution of higher education within a municipality where the assessed valuation of all property exempt from taxation represents more than 25 percent of the assessed valuation of all property in the municipality, and the property owned by the institution of higher education represents more than 12.5 percent of the assessed valuation of all property in the municipality.

b. In the event that the municipal assessor determines that a conditions in described subsection a. exist, the assessor shall notify the institution of higher education owning property representing more than 12.5 percent of the assessed value of all property in the municipality. The assessor shall notify the institution of higher education, prior to the date of adoption of its institutional budget, of the assessment for the particular tax year. The tax collector shall bill the institution for the payment in lieu of taxes at the same time that property tax bills are sent. They payment in lieu of taxes shall be payable quarterly in equal installments at the same time that property tax bills are due. Delinquent payments in lieu of taxes shall be considered delinquent taxes for the purposes of chapters 4 and 5 of Title 54 of the Revised Statutes.

c. The payment in lieu of taxes shall be in an amount equal to the local municipal purposes tax rate of the respective municipality multiplied by the value of the exempt property as if it was assessed for property taxation purposes.

2. This act shall take effect immediately.

STATEMENT

This bill requires an institution of higher education to make a payment in lieu of taxes if the institution represents a large share of the assessed valuation of a municipality containing a large proportion of tax exempt property.

Pursuant to N.J.S.A.54:4-3.3 and N.J.S.A.54:4-3.6, the property of an institution of higher education may be exempt from property taxation. Under the bill, a payment in lieu could be imposed if the property owned by an institution of higher education represents more than 12.5 percent of the assessed valuation of all property in a municipality in which one-quarter of all assessed property is tax exempt. This legislation would require a payment in lieu of taxes in the amount of the local municipal purposes tax that would be due on the property if it were not tax exempt. It is the sponsor's understanding that any payment shall be made in addition to taxes paid for any portion of the institution leased by profit-making persons or organizations, or used for non-tax-exempt purposes.