N.J. Stat. tit. 40, ch. 48H

in effect

N.J. Stat. § 40:48H-1 Tax on motor vehicle rentals to finance redevelopment activities.

19. The Legislature finds that there exist in certain municipalities certain industrial, port, and airport areas which warrant redevelopment but do not presently generate adequate funding sources with which to stimulate such activities. As a result, municipal revenues derived from other areas in the municipality have for many years been diverted to such areas in order to induce redevelopment at such locations. In addition, the worldwide financial credit crisis has created an environment in which private financial activity in certain cities has been curtailed, resulting in decreased revenue collections that have necessitated severe cuts in local budgets for services. The Legislature declares that it is therefore an appropriate and necessary public purpose to provide a new source of funding, derived from a tax on the rental of motor vehicles within designated industrial zones, to finance various redevelopment activities occurring within those municipalities. L.2009, c.90, s.19.

N.J. Stat. § 40:48H-2 Municipalities permitted to impose tax on rental of motor vehicles; definitions.

20. a. A municipality having a population in excess of 100,000 and within which is located a commercial airport which provides for a minimum of 10 regularly scheduled commercial airplane flights per day, or a municipality in which any portion of such an airport is located, by ordinance, may impose a tax on the rental of motor vehicles on such rental transactions that occur within a designated industrial zone of the municipality. Such tax shall be imposed on the person, corporation, or other legal entity that is permitted the use of a motor vehicle that it does not own for a period of time that is less than one year, in exchange for the payment of a fee, and shall be collected on behalf of the municipality by the person collecting such rental fee, in accordance with such procedures as shall be established in the ordinance imposing the tax. The local motor vehicle rental tax rate imposed under an ordinance adopted pursuant to this section shall not exceed five percent of the total amount of the fee charged for the rental of the motor vehicle, excluding any taxes and surcharges. After the adoption of an ordinance, a municipality may subsequently amend the ordinance from time to time to adjust the boundaries of the industrial zone or, subject to the provisions of section 26 of P.L.2009, c.90 (C.40:48H-8), to modify the tax rate; however, the modified rate shall not exceed five percent of the total amount of the fee charged for the rental of the motor vehicle, excluding any taxes and surcharges. An ordinance establishing a local motor vehicle rental tax, or modifying the rate of that tax, shall take effect on the first day of the month immediately following the date on which the ordinance becomes legally in force and effect. b. As used in this section: "Eligible purposes" means (1) the payment or reimbursement of costs of any "redevelopment project" or other undertaking in furtherance of a "redevelopment plan" in any "area in need of redevelopment" or "area in need of rehabilitation" within the municipality (including, but not limited to, redevelopment projects and undertakings located within the industrial zone), as such terms are defined in the "Local Redevelopment and Housing Law", P.L.1992, c.79 (C.40A:12A-1 et al.), (2) the making of municipal subsidies or contributions as authorized by P.L.1992, c.79, (3) the payment or reimbursement, within or relating to any urban enterprise zone located within the municipality, of such costs as are enumerated in the definition of "project" as contained in subsection c. of section 29 of P.L.1983, c.303 (C.52:27H-88), without reference to the zone assistance fund or the zone development corporation, (4) the payment of bonds issued for any of the foregoing purposes, (5) planning, evaluation, negotiation, and other preliminary expenses relating to any of the foregoing purposes, and (6) costs of administration and enforcement, including costs and expenses of the municipality incurred in collecting the tax. "Industrial zone" means such portion or portions of the municipality, which may be identified by reference to zoning districts, census tracks, or both, not exceeding in the aggregate 50 percent of the territory of the municipality, as is determined by the municipality to be an area having, or intended to have, predominantly industrial, port, airport, and related uses. "Motor vehicle" means any automobile, truck, van, bus, or similar conveyance that is intended primarily for passenger (as distinct from cargo) use, and meeting the requirements of the State for operation on public roads. "Rental of motor vehicle" means any contract or agreement by which a person, corporation, or other legal entity is permitted the use of a motor vehicle that it does not own for a period of time that is less than one year in exchange for the payment of a fee. A rental transaction is deemed to occur at the location at which such person, corporation, or other legal entity takes possession of the motor vehicle. "Rental tax account" means the dedicated trust account established by a municipality pursuant to subsection c. of this section. "Tax proceeds" means amounts collected pursuant to any tax imposed pursuant to sections 19 through 27 of P.L.2009, c.90 (C.40:48H-1 et seq.). c. The Director of the Division of Taxation in the Department of the Treasury may require, by regulation, that all taxes collected pursuant to sections 19 through 27 of P.L.2009, c.90 (C.40:48H-1 et seq.) be collected in the same manner as surcharges are collected under section 28 of P.L.2009, c.90 (C.40:48G-2). Except as provided hereinafter, revenues that are collected and distributed back to the municipality shall be deposited into a trust account established by the municipality and dedicated exclusively to the purpose of funding one or more eligible purposes. Revenues that are collected during tax years 2015 through 2017 for distribution back to a municipality having a population in excess of 270,000, according to the 2010 federal decennial census, may be deposited into the current fund of that municipality and may, to the extent not already allocated for eligible purposes, be used to reduce the appropriation for "cash deficit of preceding year" pursuant to N.J.S.40A:4-42, or to address its operational deficit identified at the beginning of the local budget year or through the annual financial statement. In tax year 2018 and thereafter, up to 50 percent of the revenues annually collected may be deposited into the current fund and used to reduce the appropriation for "cash deficit for preceding year" or to address its operational deficit, and the remainder shall be deposited into the municipality's trust account for eligible purposes. In the case of any assignment pursuant to section 23 of P.L.2009, c.90 (C.40:48H-5), the terms of such assignment shall include the agreement of the municipality to enforce collection of the taxes in such manner as provided therein, and may provide for direct payment of all or a portion of the tax proceeds to a bond trustee. In addition to tax proceeds, there shall be deposited into the rental tax account such other moneys as may, from time to time, be directed by law to be deposited therein. L.2009, c.90, s.20; amended 2015, c.171.

N.J. Stat. § 40:48H-3 Tax proceeds anticipated as dedicated revenues; appropriation.

21. a. All tax proceeds required to be collected by the municipality pursuant to sections 19 through 27 of P.L.2009, c.90 (C.40:48H-1 et seq.) shall be anticipated as dedicated revenues and appropriated to such dedicated purposes in the municipal budget pursuant to N.J.S.40A:4-39. b. Except to the extent tax proceeds are assigned to a bond trustee pursuant to section 23 of P.L.2009, c.90 (C.40:48H-5), all tax proceeds shall, promptly upon receipt by the chief financial officer, be deposited into the rental tax account. There may also be deposited into the rental tax account, or with the bond trustee, such additional amounts as may from time to time be appropriated for such purpose by the municipality, and the proceeds of any bonds issued pursuant to P.L.2009, c.90 (C.52:27D-489a et al.) may also be deposited into the rental tax account. L.2009, c.90, s.21.

N.J. Stat. § 40:48H-4 Noncompliance; disorderly person.

22. a. Any person having the obligation to collect any tax imposed under sections 19 through 27 of P.L.2009, c.90 (C.40:48H-1 et seq.) who fails, neglects, or refuses to make any report required by the Director of the Division of Taxation in the Department of the Treasury or by an ordinance adopted pursuant to sections 19 through 27 of P.L.2009, c.90 (C.40:48H-1 et seq.), any such person who refuses to permit an officer or agent designed by the director or by the municipality to examine his books, records, and papers, and any such person who knowingly makes any incomplete, false, or fraudulent report, or who attempts to do anything whatsoever to avoid the full disclosure of the amount due under the ordinance to avoid the payment of the whole or any part thereof, is a disorderly person. b. The failure of any person to receive or procure the forms required for making reports required by the director or by an ordinance adopted pursuant to section 20 of P.L.2009, c.90 (C.40:48H-2) shall not excuse him from making those reports. L.2009, c.90, s.22.

N.J. Stat. § 40:48H-5 Assignment of proceeds to trustee.

23. An ordinance imposing a tax pursuant to sections 19 through 27 of P.L.2009, c.90 (C.40:48H-1 et seq.) may authorize the municipality to assign all or any portion or percentage of the proceeds thereof directly to the trustee for any bonds issued pursuant to section 24 of P.L.2009, c.90 (C.40:48H-6), as payment or security for the bonds. Notwithstanding any law to the contrary, the assignment shall be an absolute assignment of all of the municipality's right, title and interest in the tax proceeds, or portion or percentage thereof. Tax proceeds assigned to the trustee pursuant to this section shall be paid directly by the municipality's chief financial officer to the trustee, and accordingly such assigned tax proceeds shall not be included in the general funds of the municipality, nor shall they be subject to any laws regarding the receipt, deposit, investment, or appropriation of public funds; and they shall retain such status notwithstanding enforcement of the payment by the municipality or assignee. L.2009, c.90, s.23.

N.J. Stat. § 40:48H-6 Issuance of bonds.

24. a. A municipality that has imposed a tax pursuant to section 20 of P.L.2009, c.90 (C.40:48H-2) may issue bonds to finance eligible purposes listed in subsection b. of section 20 of P.L.2009, c.90 (C.40:48H-2), in accordance with provisions governing the issuance of bonds under the "Local Redevelopment and Housing Law," P.L.1992, c.79 (C.40A:12A-1 et al.). A resolution authorizing such bonds shall either identify a particular eligible purpose or purposes toward which the bond proceeds shall be applied and the respective amounts allocable to each such eligible purpose, or may provide that such bond proceeds may be applied to all of the eligible purposes described in subsection b. of section 20 of P.L.2009, c.90 (C.40:48H-2). Bond proceeds shall be deposited in the rental tax account as provided in subsection c. of section 20 of P.L.2009, c.90 (C.40:48H-2). Any bond authorization issued under this section shall be subject to the approval of the Local Finance Board. b. Notwithstanding the provisions of subsection g. of section 37 of P.L.1992, c.79 (C.40A:12A-37), the bonds issued pursuant to this section shall be issued as non-recourse obligations, and unless otherwise provided for by separate action of the municipality to guarantee such bonds or otherwise provide for a pledge of the municipality's full faith and credit, shall not, except for such action, be considered to be direct and general obligations of the municipality, and, absent such action, the municipality shall not be obligated to levy and collect a property tax sufficient in an amount to pay the principal and interest on the bonds when the same become due and payable. The provisions of the "Local Government Supervision Act (1947)," P.L.1947, c.151 (C.52:27BB-1 et seq.) shall not apply to any bonds issued or authorized pursuant to this section and those bonds shall not be considered gross debt of the municipality on any debt statement filed in accordance with the "Local Bond Law," N.J.S.40A:2-1 et seq., and the provisions of chapter 27 of Title 52 of the Revised Statutes shall not apply to such bonds. c. The expenditure of the proceeds from the sale of the bonds shall not require compliance with public bidding laws, including the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.), or any other statute under which an entity other than the municipality, or any other public entity otherwise subject to such law, shall undertake the economic development costs. The use of these funds shall be subject to public accountability and oversight by the municipality. d. In order to provide additional security to bonds issued under this section, the municipality may provide for an extension of the municipality's full faith and credit. To the extent that the municipality provides for a full faith and credit guaranty of any bonds, but determines not to authorize the issuance of bonds or notes to provide the funding source thereof, it may do so by resolution approved by a majority of the full governing body. To the extent that bonds or notes are authorized to fund such guaranty, such bonds or notes shall be authorized pursuant to the provisions of the "Local Bond Law," N.J.S.40A:2-1 et seq., and shall be deductible from the gross debt of the municipality until such time as bonds or notes are actually issued, and only up to the amount actually issued, to fund such guaranty. L.2009, c.90, s.24.

N.J. Stat. § 40:48H-7 Bond proceeds, certain, exempt from taxation.

25. All bonds issued pursuant to section 24 of P.L.2009, c.90 (C.40:48H-6) are hereby declared to be issued by a political subdivision of this State and for an essential public and governmental purpose and the bonds, and the interest thereon and the income therefrom, and all facility charges, funds, revenues, and other moneys pledged or available to pay or secure the payment of the bonds, or interest thereon, shall at all times be exempt from taxation except for transfer inheritance and estate taxes. L.2009, c.90, s.25.

N.J. Stat. § 40:48H-8 Covenant of State with bondholders.

26. The State of New Jersey does hereby pledge to, and covenant and agree with, the holders of any bonds issued pursuant to section 24 of P.L.2009, c.90 (C.40:48H-6) that the State will not limit or alter the terms of any agreement, ordinance, or resolution made in connection with the security for, and the issuance and sale of, any bonds, so as to in any way impair the rights or remedies of such holders, and will not modify in any way the exemption from taxation provided for in section 25 of P.L.2009, c.90 (C.40:48H-7) until the bonds, together with interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged. L.2009, c.90, s.26.

N.J. Stat. § 40:48H-9 Bonds, notes, obligations presumed fully authorized.

27. After issuance, pursuant to sections 19 through 26 of P.L.2009, c.90 (C.40:48H-1 et seq.), all bonds, notes, or other obligations shall be conclusively presumed to be fully authorized and issued by all courts and officers of this State, and any person shall be estopped from questioning their sale, execution, or delivery. L.2009, c.90, s.27.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026