This bill allows municipalities that host State prisons or correctional facilities to generate additional revenue through payments in lieu of taxes (PILOT) and employer payroll taxes. It clarifies that State prisons are considered "State property" and thus subject to PILOT payments, which are calculated based on the facility's maximum inmate capacity at a rate of $2.50 per day. The State is required to make these payments quarterly, coinciding with property tax due dates, and municipalities must allocate these funds for municipal and school purposes. Additionally, municipalities are mandated to transfer the school portion of the collected payments to the appropriate school district.

Furthermore, the bill empowers municipalities to impose an employer payroll tax of up to one percent on the payroll of employees working within the State prison or correctional facility. The revenue generated from this tax, like the PILOT payments, must also be budgeted for municipal and school purposes. The bill aims to ensure that municipalities are compensated for the services they provide to these facilities, addressing the financial impact of hosting tax-exempt State properties.

Statutes affected:
Introduced: 54:4-2.2