An Act concerning the location and taxation of certain off-track wagering facilities and amending P.L.2001, c.199 and P.L.2011, c.26.

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

1. Section 2 of P.L.2001, c.199 (C.5:5-128) is amended to read as follows:

2. The Legislature finds and declares that:

a. The horse racing industry is economically important to this State, and the general welfare of the people of the State will be promoted by the advancement of horse racing and related projects and facilities in the State.

b. It is the intent of the Legislature, by authorizing off-track wagering and account wagering in this State, to promote the economic future of the horse racing industry in this State, to foster the potential for increased commerce, employment and recreational opportunities in this State, to preserve the State's open spaces, to preserve and enhance the overall economic well-being of the horse racing and horse breeding industries, and to generate greater interest in the horse racing industry and the sport of horse racing in New Jersey.

c. It is the further intent of the Legislature that facilities offering off-track wagering opportunities to the public also offer other amenities such as quality dining and handicapping facilities and that, in doing so, these facilities strive to be of the highest quality in the country.

d. The Legislature has determined that the New Jersey Racing Commission is best suited to oversee, license and regulate off-track wagering and account wagering in the State, and that the New Jersey Sports and Exposition Authority, by virtue of its experience in the operation of parimutuel wagering facilities and other entertainment-related projects in this State, is particularly well-suited to ensure the fiscal soundness and technical reliability of an account wagering system, and to be licensed, along with other well-suited entities, as off-track wagering licensees pursuant to the terms of this act.

e. In establishing off-track wagering facilities, the authority and other licensees will not be performing an essential government function but rather an essentially private business function. Numerous municipalities, residents and businesses will be impacted by the establishment of off-track wagering facilities throughout the State. A municipality having an off-track wagering facility sited within its boundaries is therefore entitled to receive an appropriate level of property tax for municipal services. Fundamental fairness dictates that an off-track wagering facility, even if owned and not leased by the authority, be subject to local property tax requirements. Fundamental fairness also dictates that a municipality be empowered to deny the siting of an off-track wagering facility within its boundaries.

f. By regulation of the Division of Alcoholic Beverage Control, there exist special licenses that permit the sale of alcoholic beverages on public property. These special licenses are typically available to the authority. Because the establishment of off-track wagering facilities is, in reality, essentially a private business function and not an essential government function a private holder of a Class C plenary retail consumption license is given priority to provide alcoholic beverages at an off-track wagering facility. However, many municipalities in New Jersey do not have a sufficient number of liquor licenses or licensees who are available. Therefore, in order to ensure the establishment of an off-track wagering facility when a license or a private holder of a plenary retail consumption license is not available, it is necessary in this act to allow for the issuance of a special concessionaire permit to the authority, and a special license to other off-track wagering licensees, under certain limited circumstances.

(cf: P.L.2011, c.26, s.1)

2. Section 5 of P.L.2001, c.199 (C.5:5-131) is amended to read as follows:

5. a. At the time of filing an application for an off-track wagering license, the applicant shall submit to the commission a non-refundable filing fee in an amount established by regulation by the commission, and a certification in a form prescribed by the commission which specifies, but is not limited to, the following information:

(1) a plan depicting the proposed facility and improvements thereon, including information about the size, seating capacity, parking and services to be provided at the facility;

(2) the location of the proposed facility, and relevant demographic or other information concerning the municipality and surrounding area where the proposed facility is to be located;

(3) the number of permanent and part-time jobs expected to be created at the proposed facility, and gross revenues expected to be generated by the facility;

(4) the fire evacuation plan for the proposed facility;

(5) the type of food and beverages available, which shall include the provision of first-class dining facilities; and

(6) such other information as the commission may require.

b. The applicant shall file a separate application and certification for each proposed off-track wagering facility.

c. The commission shall charge each off-track wagering licensee an annual fee in connection with the renewal of the off-track wagering license, and shall establish by regulation procedures and conditions for renewal of licenses issued under this act. The amount of the annual license renewal fee shall be used by the commission to cover commission expenses associated with implementation of the provisions of this act, P.L.2001, c.199, and shall reasonably reflect those costs.

d. The commission shall by regulation establish the maximum hours of operation of off-track wagering facilities.

e. (1) Notwithstanding R.S.33:1-42, priority for the service of alcoholic beverages for on-premise consumption at an off-track wagering facility shall be given to a Class C plenary retail consumption licensee, by an agreement or contract with the off-track wagering licensee, pursuant to the provisions of R.S.33:1-1 et seq. in accordance with such procedures as established by statute and by regulation of the Division of Alcoholic Beverage Control. When a Class C plenary retail consumption license or licensee is available in the municipality, the authority shall not hold a license to provide alcoholic beverages at an off-track wagering facility. However, when a Class C plenary retail consumption licensee or license is not available in the municipality, the Director of the Division of Alcoholic Beverage Control shall issue a special concessionaire permit to the authority for the provision of alcoholic beverages at the off-track wagering facility and, if the off-track wagering license is held by an off-track wagering licensee other than the authority, the director may issue a non-transferable special license to provide alcoholic beverages at the off-track wagering facility pursuant to paragraph (2) of this subsection.

(2) The Director of the Division of Alcoholic Beverage Control may issue one special license to an individual, corporation, or other type of legal entity to serve alcoholic beverages at an off-track wagering facility located in the municipality where a Class C plenary retail consumption licensee was not available to provide alcoholic beverages at the off-track wagering facility pursuant to paragraph (1) of this subsection. The license shall authorize the sale of alcoholic beverages for immediate consumption on the premises of the off-track wagering facility. The director may issue not more than 15 licenses pursuant to this paragraph. Furthermore, licenses issued pursuant to this paragraph shall be subject to the following requirements:

(a) No person who would fail to qualify as a licensee under Title 33 of the Revised Statutes shall be permitted to hold an interest in a special license under the provisions of this paragraph;

(b) Licenses shall be subject to the provisions of Title 33 of the Revised Statutes and rules and regulations promulgated by the director, to the extent those provisions are not inconsistent with the provisions of this act;

(d) Application for the initial issuance and renewal of each license shall be made to the director on an annual basis. The fee for the initial issuance of the license shall be the average sale price for the three most recent sales of plenary retail consumption licenses in the municipality where the license is being issued during the preceding five years. If the off-track wagering facility is located within the boundaries of two or more municipalities, the highest average sale price of the two or more municipalities shall be used. If less than three plenary retail consumption licenses have been sold in the municipality or municipalities, as the case may be, within the previous five years, the director shall obtain an appraisal, at the applicant's expense, to determine the appropriate fee for the license. The appraisal process shall include an examination of previous transactions in the municipality or municipalities, as the case may be, and shall reflect what a willing buyer, under no pressure to buy, would pay a willing seller, under no pressure to sell, for a plenary retail consumption license in that municipality or municipalities, as the case may be. One half of the amount of the application fee for the initial issuance of the license shall be paid upon the issuance of the license and the other half of that amount shall be paid one year later. The director shall establish an annual fee for the license which shall not exceed the fee which may be imposed by a municipality for a plenary retail consumption license pursuant to R.S.33:1-12, a portion of which shall be paid by the director to the New Jersey Racing Commission for the funding of horse breeding incentive programs;

(e) The fee for the initial issuance of the license shall be distributed in the following manner:

(i) Twenty-five percent shall be paid to the municipality where the off-track wagering facility is located and if the off-track wagering facility is located within the boundaries of two or more municipalities, the fee shall be divided equally among those municipalities;

(ii) Twenty-five percent shall be paid to the Director of the Division of Alcoholic Beverage Control;

(iii) Fifty percent shall be paid to the New Jersey Racing Commission for the funding of horse breeding incentive programs;

(f) The individual corporation or entity holding the license shall not be entitled to sell a license issued pursuant to this paragraph, and the license shall expire upon the closure of the off-track wagering facility;

(g) The director shall not issue a special concessionaire permit for any off-track wagering facility or premises which is eligible to obtain a license to serve alcoholic beverages under the provisions of this paragraph; and

(h) Pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), the director shall adopt rules and regulations to effectuate the purposes of this paragraph.

(3) Nothing in this subsection shall be construed to allow the Director of the Division of Alcoholic Beverage Control to issue a special concessionaire permit or a special license described in paragraph (2) of this subsection to the authority pursuant to this act, P.L.2001, c.199, or to issue a special license to any individual, corporation, or other type of legal entity to serve alcoholic beverages in a municipality that prohibits the retail sale of alcoholic beverages within its boundaries.

f. Persons under the age of 18 years shall not be permitted in any off-track wagering facility, except in dining areas if accompanied by a parent or guardian.

g. The commission shall by regulation establish minimum standards for off-track wagering facilities and timelines for their establishment and completion, including, but not limited to, standards for quality, size, seating capacity, the provision of first-class dining facilities, parking and services to be provided, as well as expected dates of construction, renovations and opening. The failure of an off-track wagering licensee to meet these standards shall be sufficient cause for the commission to revoke, suspend or refuse to renew a license pursuant to the provisions of section 8 of P.L.2001, c.199 (C.5:5-134).

h. [Notwithstanding the provisions of any law, rule, or regulation to the contrary, an off-track wagering facility shall be a permitted use in all commercial and industrial districts of a municipality] The applicant, in lieu of obtaining municipal zoning and planning approvals that may otherwise be required in connection with the off-track wagering facility, shall submit a written notice of its intention to site an off-track wagering facility to the governing body of the municipality within which the facility would be sited. The notice shall identify the proposed site of the facility by street address, if any, or by reference to lot and block numbers as shown on the current tax duplicate in the municipal tax assessor's offices. Within 45 days of its receipt of the applicant's notice of intention, the municipal governing body may disapprove of the proposed site of an off-track wagering facility by adopting a resolution which shall be valid and binding upon the applicant and the commission upon delivery of a duly certified copy of the resolution to the applicant and the commission. Whenever a municipality determines to consider a resolution disapproving a proposed off-track wagering facility, the applicant shall be given an opportunity to offer a public presentation of the proposed facility prior to consideration of the resolution. A resolution disapproving a proposed off-track wagering facility shall state the reasons for disapproval.

In the event the governing body shall not adopt such a resolution, the applicant may seek a license for an off-track wagering facility in that municipality and the commission may grant the applicant the license provided that:

(1) the proposed off-track wagering facility site is not in an area zoned residential;

(2) the applicant has submitted its plans to the municipal planning board, and complied with the provisions of section 22 of P.L.1975, c.291 (C.40:55D-31); and

(3) the applicant has made reasonable efforts to address the reasonable concerns expressed by the municipal planning board.

i. In evaluating an application for an off-track wagering license, the commission shall consider the proximity of the applicant's proposed site to other planned or existing off-track wagering facilities and to racetracks in this State. If, in the opinion of the commission, the establishment of the facility at its proposed location would be inimical to the interests of another planned or established off-track wagering facility, or to a State racetrack, the commission shall require the applicant to consider alternative sites for the proposed facility.

(cf: P.L.2011, c.26, s.4)

3. Section 7 of P.L.2011, c.26 (C.5:5-151.1) is amended to read as follows:

7. Notwithstanding any other law, rule, or regulation to the contrary:

(1) when the authority is the owner of the land, building, and premises where an off-track wagering facility is operated pursuant to an initial off-track wagering facility license issued after the effective date of [P.L.2011, c.26] P.L. , c. (pending before the Legislature as this bill), the authority shall pay to the municipality where the facility is located [a payment in-lieu-of taxes for the first five years of operation of the off-track wagering facility, which payment amount shall be determined upon agreement with the municipality, and shall pay] regular property tax payments beginning on the [sixth] first year of operation and thereafter; and

(2) [when a private off-track wagering licensee is the owner of the land, building, and premises where an off-track wagering facility is operated pursuant to an initial off-track wagering facility license issued after the effective date of P.L.2011, c.26, the private off-track wagering licensee shall be eligible to receive a five-year tax exemption, or abatement, or both, when located in an area in need of rehabilitation as defined under the "Five-Year Exemption and Abatement Law," P.L.1991, c.441 (C.40A:21-1 et seq.), except that the private off-track wagering licensee shall pay to the municipality where the facility is located a payment in-lieu-of taxes for the first five years of operation of the off-track wagering facility, which payment amount shall be less than the amount of regular property tax payments as determined upon agreement with the municipality pursuant to section 10 of P.L.1991, c.441 (C.40A:21-10), and shall pay regular property tax payments beginning on the sixth year and thereafter] (Deleted by amendment, P.L. , c. ).

(cf: P.L.2011, c.26, s.7)

4. This act shall take effect immediately.

STATEMENT

This bill amends the "Off-Track and Account Wagering Act," P.L.2001, c.199 (C.5:5-127 et seq.), to restore the ability of municipalities to reject a proposed off-track wagering facility within their boundaries, and to remove the five-year tax exemption, abatement, or payment in-lieu-of taxes for privately-operated off-track wagering facilities.

Under the bill, an off-track wagering facility applicant would be required to notify in writing the governing body of the municipality of its intention to site a facility within its boundaries. The notice must identify the proposed site of the facility by street address, if any, or by reference to lot and block numbers as shown on the current tax duplicate in the municipal tax assessor's offices. Within 45 days of its receipt of the applicant's notice of intention, the municipal governing body may disapprove of the proposed facility site by adopting a resolution rejecting the facility, which would be considered valid and binding upon the applicant and the commission upon delivery of a duly certified copy of the resolution to the applicant and the commission. Whenever a municipality determines to consider a resolution disapproving a proposed off-track wagering facility, the applicant would be given an opportunity to offer a public presentation of the proposed facility prior to consideration of the resolution. A resolution disapproving a proposed off-track wagering facility must state the reasons for disapproval. However, if the governing body does not adopt a resolution rejecting the facility, the applicant may seek a license for an off-track wagering facility in that municipality, and the commission may grant the applicant the license provided that: (1) the proposed off-track wagering facility site is not in an area zoned residential; (2) the applicant has submitted its plans to the municipal planning board, and complied with the provisions of section 22 of P.L.1975, c.291 (C.40:55D-31); and (3) the applicant has made reasonable efforts to address the reasonable concerns expressed by the municipal planning board.

The bill also removes the ability of an off-track wagering facility licensee to qualify for a reduction in its property tax payment to the municipality under a five-year tax exemption, abatement, or payment in-lieu-of taxes, as appropriate. Under current law, when the authority is the owner of the land, building, and premises where an off-track wagering facility is operated pursuant to an initial off-track wagering facility license, the authority is required to pay to the municipality where the facility is located a payment in-lieu-of taxes for the first five years of operation of the off-track wagering facility, which payment amount must be determined upon agreement with the municipality, and must pay regular property tax payments beginning on the sixth year and thereafter. In addition, under current law, when a private off-track wagering facility licensee is the owner of the land, building, and premises where an off-track wagering facility is operated, that licensee is eligible to receive a five-year tax exemption, or abatement, or both, when located in an area in need of rehabilitation as defined under the "Five-Year Exemption and Abatement Law," P.L.1991, c.441 (C.40A:21-1 et seq.). The private off-track wagering licensee is required to pay to the municipality where the facility is located a payment in-lieu-of taxes for the first five years of operation of the off-track wagering facility, which payment amount must be less than the amount of regular property tax payments as determined upon an agreement with the municipality, and must pay regular property tax payments beginning on the sixth year and thereafter. This bill would require both the authority and private off-track wagering facility licensees who establish facilities following the bill's effective date to pay regular property tax payments to the municipality from the first year of operation of the facility and each year thereafter.