[HISTORY: Adopted by the Township Committee
of the Township of Deerfield as indicated in article histories. Amendments
noted where applicable.]
[Adopted 3-15-2023 by Ord. No. 2023-1[1]]
As used in this article, the following terms shall have the
meanings indicated:
That portion of the assessed value of a property as it existed
prior to construction, improvement or conversion of a building or
structure thereon, which is exempted from taxation pursuant to this
article.
The officer of the Township of Deerfield charged with the
duty of assessing real property for the purposes of general taxation.
A structure or part thereof used for the manufacturing, processing
or assembling of material or manufactured products, or for research,
office, industrial, commercial, retail, recreational, hotel or motel
facilities, or warehousing purposes, or for any combination thereof,
which the governing body determines will tend to maintain or provide
gainful employment within the municipality, assist in the economic
development of the municipality, maintain or increase the tax base
of the municipality and maintain or diversify and expand commerce
within the municipality. It shall not include any structure or part
thereof used or to be used by any business relocated from another
qualifying municipality unless: the total square footage of the floor
area of the structure or part thereof used or to be used by the business
at the new site together with the total square footage of the land
used or to be used by the business at the new site exceeds the total
square footage of that utilized by the business at its current site
of operations by at least 10%; and the property that the business
is relocating to has been the subject of a remedial action plan costing
in excess of $250,000 performed pursuant to an administrative consent
order entered into pursuant to authority vested in the Commissioner
of Environmental Protection under P.L. 1970, c. 33 (N.J.S.A. 13:1D-1
et seq.), the Water Pollution Control Act, P.L. 1977, c. 74 (N.J.S.A.
58:10A-1 et seq.), the Solid Waste Management Act, P.L. 1970, c. 39
(N.J.S.A. 13:1E-1 et seq.), and the Spill Compensation and Control
Act, P.L. 1976, c. 141 (N.J.S.A. 58:10-23.11 et seq.).
Substantially ready for the intended use for which a building
or structure is constructed, improved or converted.
The provision of a commercial or industrial structure, or
the enlargement of the volume of an existing commercial or industrial
structure by more than 30%, but shall not mean the conversion of an
existing building or structure to another use.
That portion of the assessor's full and true value of
any improvement, conversion, alteration, or construction not regarded
as increasing the taxable value of a property pursuant to this article.
A modernization, rehabilitation, renovation, alteration,
or repair which produces a physical change in an existing building
or structure that improves the safety, sanitation, decency or attractiveness
of the building or structure as a place for human habitation and which
does not change its permitted use. In the case of a commercial or
industrial structure, it shall not include ordinary painting, repairs
or replacement of maintenance items, or any enlargement of the volume
of an existing structure by more than 30%. In no case shall it include
the repair of fire or other damage to a property for which payment
of a claim was received by any person from an insurance company at
any time during the three-year period immediately preceding the filing
of an application pursuant to this article.
Exemptions from taxation for improvements to commercial or industrial
structures may be granted upon review, evaluation and approval of
each application on an individual basis by the Township Committee.
In determining the value of real property, the Township of Deerfield
shall regard up to the assessor's full and true value of the
improvement as not increasing the value of the property for a period
of five years, notwithstanding that the value of the property to which
the improvements are made is increased thereby. During the exemption
period, the assessment on the property shall not be less than the
assessment thereon existing immediately prior to the improvements,
unless there is damage to the structure through action of the elements
sufficient to warrant a reduction.
Abatements from taxation for construction of commercial or industrial
structures may be granted upon review, evaluation and approval of
each application on an individual basis by the governing body and
upon execution of an agreement which shall be entered into between
the Township and a developer in accordance with the procedures set
forth in this article.
Applicants for tax exemption or tax abatement for new construction
of commercial or industrial structures shall provide the governing
body with an application setting forth:
A.Â
A general description of a project for which exemption or abatement
is sought;
B.Â
A legal description of all real estate necessary for the project;
C.Â
Plans, drawings and other documents as may be required by the governing
body to demonstrate the structure and design of the project;
D.Â
A description of the number, classes and type of employees to be
employed at the project site within two years of completion of the
project;
E.Â
A statement of the reasons for seeking tax exemption or abatement
on the project, and a description of the benefits to be realized by
the applicant if a tax agreement is granted;
F.Â
Estimates of the cost of completing such project;
G.Â
A statement showing:
(1)Â
The real property taxes currently being assessed at the project site;
(2)Â
Estimated tax payments that would be made annually by the applicant
on the project during the period of the agreement; and
(3)Â
Estimated tax payments that would be made by the applicant on the
project during the first full year following the termination of the
tax agreement;
H.Â
A description of any lease agreement between the applicant and the
proposed users of the project and a history and description of the
users' business; and
I.Â
Such other pertinent information as the governing body may require.
Upon adoption of this article, which authorizes a tax agreement
or agreements for a particular project or projects, and upon review
and recommendation from the Tax Assessor, the Township Committee may
enter into written agreements with applicants for the exemption and
abatement of local real property taxes. An agreement shall provide
for the applicant to pay to the municipality in lieu of full property
tax payments an amount annually to be computed by one, but in no case
a combination, of the following formulas:
A.Â
Cost basis. The agreement may provide for the applicant to pay to
the municipality in lieu of full property tax payments an amount equal
to 2% of the cost of the project. For the purposes of the agreement,
"the cost of the project," means only the cost or fair market value
of direct labor and all materials used in the construction, expansion,
or rehabilitation of all buildings, structures and facilities at the
project site, including the costs, if any, of land acquisition and
land preparation, provision of access roads, utilities, drainage facilities,
and parking facilities, together with architectural, engineering,
legal, surveying, testing, and contractors' fees associated with
the project; which the applicant shall cause to be certified and verified
to the governing body by an independent and qualified architect, following
the completion of the project.
B.Â
Gross revenue basis. The agreement may provide for the applicant
to pay to the municipality in lieu of full property tax payments an
amount annually equal to 15% of the annual gross revenues from the
project. For the purposes of the agreement, "annual gross revenues"
means the total annual gross rental and other income payable to the
owner of the project from the project. If, in any leasing, any real
estate taxes or assessments on property included in the project, any
premiums for fire or other insurance on or concerning property included
in the project, or any operating or maintenance expenses ordinarily
paid by the landlord, are to be paid by the tenant, then those payments
shall be computed and deemed to be part of the rent and shall be included
in the annual gross revenue. The tax agreement shall establish the
method of computing the revenues and may establish a method of arbitration
by which either the landlord or tenant may dispute the amount of payments
so included in the annual gross revenue.
C.Â
Tax phase-in basis. The agreement may provide for the applicant to
pay to the municipality in lieu of full property tax payments an amount
equal to a percentage of taxes otherwise due, according to the following
schedule:
(1)Â
In the first full year after completion, no payment in lieu of taxes
otherwise due;
(2)Â
In the second full year after completion, an amount not less than
20% of taxes otherwise due;
(3)Â
In the third full year after completion, an amount not less than
40% of taxes otherwise due;
(4)Â
In the fourth full year after completion, an amount not less than
60% of taxes otherwise due;
(5)Â
In the fifth full year after completion, an amount not less than
80% of taxes otherwise due.
A.Â
All tax exemption and tax abatement agreements entered into pursuant
to this article shall be in effect for no more than five full years
next following the date of completion of the project;
B.Â
All projects subject to tax agreement as provided herein shall be
subject to all applicable federal, state and local laws and regulations
on pollution control, worker safety, discrimination in employment,
housing provision, zoning, planning and building code requirements;
C.Â
That percentage which the payment in lieu of taxes for a property
bears to the property tax which would have been paid had an exemption
or an abatement not been granted for the property under the agreement
shall be applied to the valuation of the property to determine the
reduced valuation of the property to be included in the valuation
of the municipality for determining equalization for county tax apportionment
and school aid during the term of the tax agreements covering the
properties; and at the termination of an agreement for a property
the reduced valuation procedure under this section shall no longer
apply;
D.Â
Within 30 days after the execution of a tax agreement, the Township
Clerk shall forward a copy of the agreement to the Director of the
Division of Local Government Services in the Department of Community
Affairs.
A.Â
If during any tax year prior to the termination of the tax agreement,
the property owner ceases to operate or disposes of the property,
or fails to meet the conditions for qualifying, then the tax which
would have otherwise been payable for each tax year shall become due
and payable from the property owner as if no exemption and abatement
had been granted. The governing body of the municipality shall notify
the property owner and tax collector forthwith and the tax collector
shall within 15 days thereof notify the owner of the property of the
amount of taxes due. However, with respect to the disposal of the
property, where it is determined that the new owner of the property
will continue to use the property pursuant to the conditions which
qualified the property, no tax shall be due, the exemption and the
abatement shall continue, and the agreement shall remain in effect.
B.Â
At the termination of a tax agreement, a project shall be subject
to all applicable real property taxes as provided by State law and
regulation and local ordinance; but nothing herein shall prohibit
a project, at the termination of an agreement, from qualifying for
and receiving the full benefits of any other tax preferences provided
by law.
The assessor shall determine, on October 1 of the year following
the date of the completion of an improvement or construction, the
true taxable value thereof. Except for projects subject to tax agreement
as provided herein, the amount of tax to be paid for the first full
tax year following completion shall be based on the assessed valuation
of the property for the previous year, minus the amount of the abatement,
if any, plus any portion of the assessed valuation of the improvement,
conversion or construction not allowed an exemption pursuant to this
article. The property shall continue to be treated in the appropriate
manner for each of the four tax years subsequent to the original determination
by the assessor and shall be pro rated for the final tax year in which
the exemption or abatement expires.
No exemption or abatement shall be granted pursuant to this
article with respect to any property for which property taxes are
delinquent or remain unpaid, or for which penalties for nonpayment
of taxes are due.
No exemption or abatement shall be granted pursuant to this
article except upon written application therefor filed with and approved
by the Tax Assessor. Every application shall be on a form prescribed
by the Director of the Division of Taxation in the Department of the
Treasury, and provided for the use of claimants by the Township of
Deerfield, and shall be filed with the Assessor within 30 days, including
Saturdays and Sundays, following the completion of the improvement,
conversion or construction. Every application for exemption or abatement
which is filed in the time specified shall be approved and allowed
by the assessor to the degree that the application is consistent with
the provisions of this article, provided that the improvement, conversion
or construction for which the application is made qualifies as an
improvement, a conversion, alteration or construction pursuant to
the provisions of N.J.S.A. 40A:21-1 et seq. The granting of an exemption,
or exemption and abatement, shall relate back to, and take effect
as of, the date of completion of the project, or portion or stage
of the project for which the exemption, or exemption and abatement,
is granted, and shall continue for five annual periods from that date.
The grant of an exemption, or exemption and abatement, or tax agreement
shall be recorded and made a permanent part of the official tax records
of the Township of Deerfield, which record shall contain a notice
of termination date thereof.
Ordinance No. 1991-7 (Chapter 108 of the Municipal Code of the Township of Deerfield) and all amendments thereto are hereby repealed. However, no exemption or abatement granted pursuant to said ordinance, as amended, shall be affected or terminated by virtue of this repeal, but shall remain in effect for the time and under the terms granted as if the ordinance authorizing the exemption or abatement had not been so repealed.
Pursuant to N.J.S.A.40A:21-4, this article shall take initial
effect in the tax year in which this article is adopted, and for tax
years thereafter.
Pursuant to N.J.S.A. 40A:21-20, notice of the adoption of this
article shall be included in the mailing of annual property tax bills
to each owner of property located in the Township of Deerfield during
the first year following adoption of this article.
The Township Clerk is hereby authorized and directed to forward
a certified copy of this article to the State of New Jersey, Department
of Community Affairs, upon adoption.
