| P.L.1991, c.431 with final retroactive amendments | | | | property to which a qualified municipality (a municipality |
| effective August 5, 1992 consolidated, into one more | | | | with "areas in need of rehabilitation") could grant a |
| flexible law, the various long term tax exemption laws | | | | partial exemption and abatement for a five-year |
| under which municipalities may agree with private | | | | period.These property types included:Homeowner |
| entities to undertake redevelopment projects in return | | | | improvements (including additions and enlargements) |
| for tax exemptions.P.L.1991, c.441, effective for the first | | | | made to one-unit or two-unit residential dwellings that |
| full tax year commencing after its January 18, 1992 | | | | were more than 20 years old. As determined by |
| enactment, consolidated the various five-year tax | | | | ordinance the first $4,000, $10,000 or $15,000 of |
| abatement and exemption laws into one, more | | | | increased value due to improvement on each unit |
| standardized law to govern all tax abatements and | | | | could be exempted from taxation (see N.J.S.A. |
| exemption regardless of the type of structure.Long | | | | 54:4-3.72 to 3.79).Commercial and industrial |
| Term Tax Exemption LawPrior to 1993, which was | | | | improvements and construction projects (with less |
| the first full year of operation governed by the new | | | | than a 30% increase in building volume) could have the |
| Long Term Tax Exemption Law, under the provisions | | | | full assessed value of the improvement exempted |
| of N.J.S.A.40:55C-40, the "Urban Renewal Corporation | | | | with payments in-lieu of taxes made at 2%of project |
| and Association Law of 1961," commonly known as | | | | cost or 15% of annual gross revenues or an in-lieu of |
| the Fox-Lance Act, a qualified municipality (a | | | | tax payment phased-in. (see N.J.S.A. 54:4-3.94to |
| municipality with "areas in need of rehabilitation") could | | | | 3.112).Multiple dwelling improvements or conversion of |
| abate from 15 to 20 years the taxes on newly | | | | other types of structures to multiple dwellings could |
| constructed industrial, commercial, cultural, or residential | | | | have up to 30% of the full value of the improvement |
| projects of a corporation, with profits in excess of the | | | | or conversion alteration exempted. No in-lieu of tax |
| limited profits returned to the municipality, or from 30 to | | | | payment was required (see N.J.S.A. 54:4-3.121 to |
| 35 years for condominium projects. Condominium | | | | 3.129).Commencing in 1993 the provisions of N.J.S.A. |
| projects were given 30 to 35 years in order to provide | | | | 40A:21-1 et seq., the "Five-Year Exemption and |
| a realistic period for permanent financing. Also, prior to | | | | Abatement Law," which consolidated all provisions of |
| 1993 under the provisions of N.J.S.A.55:16-1 et seq., the | | | | the previous five-year abatement statutes, permitted a |
| "Limited-Dividend Nonprofit Housing Corporation or | | | | qualified municipality to grant partial exemptions and |
| Association Law," a qualified municipality could abate | | | | abatements on residential dwellings, non-residential |
| for up to 50 years the taxes on newly constructed | | | | structures and multiple dwellings in the same way the |
| housing. Further, under N.J.S.A.55:14I-1 et seq., a qualified | | | | pre 1993 law did, with the following notable exceptions |
| municipality could abate for up to 50 years the taxes | | | | made to the new law:A new, single definition of "areas |
| on newly constructed senior housing. Lastly, prior to | | | | in need of rehabilitation" was established to govern all |
| 1993, under the provisions of N.J.S.A.40:55C-77, the | | | | exemptions and abatements which, if chosen, could |
| "Urban Renewal Nonprofit Corporation Law of 1965," | | | | enable an entire municipality to be designated as an |
| basically the same types of properties and projects as | | | | area in need of rehabilitation (thus permitting new |
| the Fox-Lance Act could be abated for 20 to 25 | | | | structures to facilitate infill construction).The new |
| years with all profits being returned to the municipality. | | | | five-year law also permitted, for the first time, tax |
| In all cases under these property tax exemption laws | | | | abatements and exemptions for new construction of |
| in-lieu of tax payments were required.Commencing in | | | | single family and multi-family dwelling units and |
| 1993 the provisions of N.J.S.A.40A:20-1 et seq. | | | | non-residential structures rather than just |
| permitted a qualified municipality to abate the taxes on | | | | improvements or enlargements to such properties.The |
| properties and projects in the same way the pre 1993 | | | | new law also increased the allowable maximum tax |
| law did with the following notable exceptions:A new, | | | | exemptions for the value added by an improvement |
| flexible in-lieu of tax formula was established with a | | | | from $4,000, $10,000, and $15,000 to $5,000, $15,000 |
| phasing-in of payments in-lieu of taxes to occur under | | | | and $25,000, respectively, as the municipal ordinance |
| both the percent of gross rental formula and the | | | | may specify.Biography: Gerald 'Jerry' Dowgin "The |
| percent of total project cost formula.The formulas for | | | | Property Tax Doctor" and the author of the |
| computing payment in-lieu of taxes for both office | | | | Homeowner's Assessment Review Guide ( a former |
| projects and housing projects were changed. The | | | | tax assessor worked in the field of public finance at |
| minimum annual service charge for office buildings was | | | | the State and local levels in New Jersey for more than |
| reduced from 15 to 10 percent of the annual gross | | | | three decades until his retirement in 2001. As a |
| revenues of the project or units of the project. | | | | Supervising Tax Analyst in the Office of Research |
| Municipalities retained the option of computing the | | | | and Statistics in the Division of Taxation in the New |
| payment in-lieu of taxes at no less than 2 percent of | | | | Jersey Department of Treasury he worked principally |
| the total project cost or total project units cost. For | | | | on local property tax issues. Then he joined the Office |
| housing projects the annual service charge was | | | | of Legislative Services (OLS) in 1983 and served as |
| changed from a minimum of 15 percent to a maximum | | | | the Secretary to the New Jersey Property Tax |
| of 15 percent of annual gross revenue of the project | | | | Assessment Study Commission for four years. While |
| or from a minimum 2 percent to a maximum 2 percent | | | | working in the OLS, Local Government Section he |
| of the total project cost or total project unit cost.The | | | | researched, drafted, and estimated the cost of the |
| payment in-lieu of tax formulas remains basically | | | | Senior Property Tax Freeze Bill which was signed |
| unchanged for all other types of industrial, commercial | | | | onto law and worked on legislation that became law |
| or cultural projects.Five-Year Exemption and | | | | that virtually stopped the tax assessment practice of |
| Abatement LawPrior to 1993, which was the first full | | | | "Spot Assessments" in New Jersey that had treated |
| year of operation under the new Five-Year Exemption | | | | many property taxpayers unfairly. |
| and Abatement Law, there were three types of | | | | |