STATE OF NEW JERSEY
219th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2020 SESSION
Sponsored by:
Assemblyman VINCENT MAZZEO
District 2 (Atlantic)
SYNOPSIS
Establishes "Atlantic City Growth Tax Credit Program" to grant tax credits to promote the development of non-rental housing in Atlantic City.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning incentives to build new housing in Atlantic City and supplementing P.L.1983, c.530 (C.55:14K-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be referred to as the "Atlantic City Growth Tax Credit Program."
2. The Legislature finds and declares:
a. The City of Atlantic City was recognized as a unique area in New Jersey when casino gaming was authorized by a Statewide public question approved in 1976.
b. For several decades casino gaming flourished in Atlantic City and supported much of the city's economy and property tax base.
c. With the development of casino gaming competition from every nearby state, the revenues from Atlantic City casino gaming began falling in 2007, resulting in a rapid devaluation of casino gaming property.
d. The devaluation of casino properties resulted in lower assessments for property tax purposes, thereby shifting the municipal property tax burden onto other Atlantic City property taxpayers and the county property tax burden onto other Atlantic County municipalities.
e. Nearly three-quarters of the residents of Atlantic City are tenants, meaning that the population of homeowners is relatively small.
f. The shifting of the property tax burden from the gaming and other commercial sector onto the residential sector causes a substantial hardship especially for homeowners.
g. One way to ameliorate the burden of rapidly rising property taxes on homeowners is to expand the pool of residential property taxpayers.
h. Atlantic City is plagued by an abundance of abandoned and vacant properties on which little or no property taxes are collected.
i. It is a worthwhile goal to increase home ownership in Atlantic City to a level where at least half of residents are homeowners.
j. The New Jersey Housing and Mortgage Finance Agency, under subsection t. of section 5 of P.L.1983, c.530 (C.55:14K-5) has been specifically charged with assessing and addressing the housing needs in Atlantic City when planning its programs.
k. It is in the public interest to reverse the erosion of Atlantic City's residential property tax base by providing incentives to private developers in order to encourage the construction of housing that will attract new homeowners to Atlantic City and thereby increase its residential property tax base.
3. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Agency" means the New Jersey Housing and Mortgage Finance Agency.
"Allowed costs" means eligible developers costs for land acquisition, demolition, and capital improvements to build an eligible project in the City of Atlantic City, as reviewed and approved by the agency.
"Credit" means the tax credit against business or income taxes permitted under the "Atlantic City Growth Tax Credit Program." "Director" means the Director of the Division of Taxation in the Department of the Treasury.
"Eligible developer" means a developer intending to build an eligible project within the boundaries of the City of Atlantic City.
"Eligible project" means a project to be located within a single neighborhood within the boundaries of the City of Atlantic City and (1) consisting of, or including at least, eight newly constructed units, contiguous or otherwise, of residential housing, which may be single-family homes, townhouses, condominiums, duplexes, or any combination thereof; (2) that is at least 80 percent owner-occupied with no more than 20 percent of the housing units leased as market-rate rental housing; (3) that is no more than eight stories in height; and (4) for which an eligible developer controls, or has contracted to control, all of the property within the project prior to applying for a tax credit under section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
4. a. The New Jersey Housing and Mortgage Finance Agency, in cooperation with the Director of the Division of Taxation in the Department of the Treasury, shall establish the "Atlantic City Growth Tax Credit Program" for the purpose of providing eligible developers with a tax credit equal to 50 percent of the eligible developer's allowed costs for land acquisition, demolition, and capital improvements to build eligible projects in the City of Atlantic City.
b. (1) An eligible developer shall apply for a tax credit for allowed costs related to an eligible project on forms promulgated by the agency.
(2) The agency shall review an application and shall approve it if it finds that the developer and project are eligible under P.L. , c. (C. ) (pending before the Legislature as this bill). The agency may require an eligible developer to submit additional information that it deems necessary for its determination.
c. (1) (a) Upon the completion of an eligible project, an eligible developer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) or the New Jersey Gross Income Tax Act, N.J.S.54A:1-1 et seq., as applicable in an amount equal to 50 percent of the eligible developer's allowed costs paid or incurred for land acquisition, demolition, and capital improvements to build eligible projects in the City of Atlantic City during the privilege period or taxable year. Any unused credit may be carried forward for use in any of the next five privilege periods or taxable years following the privilege period or taxable year for which the credit is initially allowed. Credits shall be transferable in accordance with regulations adopted by the Division of Taxation in the Department of the Treasury pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill) provided, however, that no credits shall be sold or transferred until a project is completed.
(b) The total tax credits awarded to an eligible developer under this section shall be in an amount equal to 50 percent of the eligible developer's allowed costs paid or incurred for land acquisition, demolition and, capital improvements to build eligible projects in the City of Atlantic City during the privilege period or taxable year.