Assembly, No. 3614 state of new jersey 217th legislature

INTRODUCED APRIL 7, 2016

Sponsored by:

Assemblyman VINCENT PRIETO

District 32 (Bergen and Hudson)

SYNOPSIS

Establishes “Atlantic City Plan for Implementing Economic Recovery Act”; exempts casino gaming property from local taxation and establishes payment in lieu of taxation; creates Atlantic City Planning Committee.

CURRENT VERSION OF TEXT

As introduced.

a. Atlantic City is in the midst of an extraordinary financial crisis owing to its unique status as the sole municipality in which casino gaming has been authorized in the State, and the sudden, rapid proliferation of casino gaming in the region which has had a severely destabilizing impact on the finances and economy of Atlantic City.

b. Casino gaming was authorized in Atlantic City in 1976, following the adoption by the voters of an amendment to the New Jersey Constitution (Article IV, Section VII, paragraph 2, subparagraph D).

c. Over the course of the following decades, casinos grew and profited in Atlantic City, due in large part to the fact that Atlantic City was the only location in the region in which casino gaming was available.

d. In recent years, however, other states in the region, particularly Pennsylvania and New York, began to authorize more and more casino gaming, which took a very substantial portion of the regional casino gaming market away from Atlantic City.

e. The regional competition in casino gaming has had a deleterious effect on Atlantic City, resulting in the closure of four casino gaming properties, which represented one-third of the number of casinos operating in Atlantic City in 2013; the sharp decline in the value of the remaining casino gaming properties, which led to successful appeals of the assessments on those properties requiring hundreds of millions of dollars in property tax refunds; and a sharp increase in the local unemployment rate, which remains stubbornly well above the averages of the State, the region, and the United States.

f. All told, the property tax base of Atlantic City has declined by more than 50 percent in the past five years, driven almost exclusively by the reductions in casino gaming property values, placing a disastrous strain on Atlantic City’s budget through the greater liabilities for casino gaming property tax appeal refunds and lower property tax revenues generated by casino gaming properties based on current values.

g. As the reduced casino gaming property values have resulted in casinos paying less in property taxes, the property tax burden for all other Atlantic City and Atlantic County residents and businesses has increased, placing even greater pressure on a community that is already deeply struggling.

h. The Legislature and the Executive branch have attempted to turn around the finances and economy of Atlantic City through a variety of actions taken in recent years.

i. In 2010, Atlantic City was placed under State supervision pursuant to the “Local Government Supervision Act (1947),” P.L.1947, c.151 (C.52:27BB-1 et seq.), which provided the State, along with numerous other powers, the authority to approve or disapprove of collective negotiations agreements.

j. In 2011, the Atlantic City Tourism District was established, and the State, through the Casino Reinvestment Development Authority, was provided broad local powers within the portion of Atlantic City constituting the tourism district.

k. In 2015, the State provided transitional aid to Atlantic City, which authorized the State to impose oversight and operational efficiency measures as conditions according to a memorandum of understanding, and the State appointed an emergency monitor to develop a plan for remedying Atlantic City’s finances.

l. Nonetheless, Atlantic City’s financial crisis has only deepened and presently, Atlantic City is no longer able to meet all of its financial obligations, and may need to shut down certain municipal operations and services for extended periods of time.

m. While the State possesses additional powers under current law that may be exercised to improve the dire situation in Atlantic City, in light of the extraordinary depth of the financial problems now plaguing Atlantic City, it is apparent that further reforms and remedial actions are necessary to resolve the crisis in Atlantic City.

n. First, to ensure sustainable local financial support for Atlantic City and to ensure that the burden of providing this support is equitably distributed, casinos should be required to make predictable minimum payments to Atlantic City that represent a fair share of local government expenses and that take into account the unique costs casino gaming properties place on local government.

o. Secondly, to ensure sustainable budgeting in Atlantic City that takes into account the new realities of casino gaming in Atlantic City, a financial plan should be established that provides specific benchmarks, which if not met within the next two years would trigger the availability of increasing levels of financial intervention.

p. Additionally, the Legislature intends to request in the budget process that $10,000,000 is appropriated for economic development projects in Atlantic City and that $8,000,000 is appropriated for funding for the promotion, marketing, and advertising of Atlantic City. It is the intent of the Legislature that any amounts so appropriated to Atlantic City shall not impact, reduce, or otherwise affect the amount appropriated to Atlantic City under the Transitional Aid to Localities program.

q. In recognition of the importance of local self-governance to democracy and to ensure that the voices of Atlantic City’s residents are represented, the development and implementation of the financial plan for Atlantic City should be exercised by a committee consisting of both State and Atlantic City officials.

r. Therefore, it is altogether fitting and proper, in light of Atlantic City’s unique circumstance as a former regional casino gaming monopoly that has transitioned to one member of a highly populated regional casino gaming industry and the unique nature of casino gaming, which is already subject to its own class of special regulations and which presents unique burdens to local communities, that Atlantic City and the casino gaming properties located therein, be treated as special cases subject, according to general law, to special provisions for local taxation and financial intervention to restore Atlantic City to a sound financial condition.
3. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

“Base amount” means the amount of the payment in lieu of taxes as determined by paragraph (3) of subsection b. of section 4 of P.L. c. (C. ) (pending before the Legislature as this bill);

“Casino gaming property” means one or more parcels of real property located in Atlantic City, and any adjacent property utilized in connection with such property, upon which there is located a facility licensed to be used for casino gaming in 2014 or thereafter, whether or not in actual operation, which has more than 500 guest hotel rooms, and is not subject to recorded covenants prohibiting casino gaming; provided, however, casino gaming property shall not mean any new improvement developed on a casino gaming property that is made outside of the perimeter footprint of any improvement existing as of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and any real property, not formerly qualified as casino gaming property, acquired after such date by an owner of casino gaming property, shall not be exempt from local property taxation in any tax year and shall be subject to local property taxation annually at Atlantic City’s general property tax rate;

“Commissioner” means the Commissioner of Community Affairs;

“Division” means the Division of Gaming Enforcement in the Department of Law and Public Safety;

“Governing body” means the municipal council and mayor of Atlantic City;

“Gross gaming revenue” (GGR) means the total amount of revenue raised through casino gaming from all of the casino gaming properties located in Atlantic City as determined by the division; and

“Planning committee” means the Atlantic City Planning Committee established pursuant to section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. The commission shall consist of seven members:

A member of the public, appointed by the Governor, who shall be the chairperson of the commission;

The Commissioner of Community Affairs or the commissioner’s designee;

The Atlantic City Mayor or the mayor’s designee;

The Atlantic County Executive or the county executive’s designee;

A representative of the casino industry, appointed by the Governor;

A representative of a casino employees’ union, appointed by the Governor upon the recommendation of the President of the Senate; and

A representative of the business community of Atlantic City appointed by the Governor upon recommendation of the Speaker of the General Assembly. This member shall not be an executive or an employee of any of the casinos in Atlantic City. This member shall be appointed from, and shall represent, on the commission, the interests of the non-gaming business interests in the city.

c. The commission shall issue its findings and recommendations in writing not later than July 1, 2025 to the Governor, and to the President of the Senate and the Speaker of the General Assembly pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).

10. (New section) a. There is established in, but not of, the Department of Community Affairs, an “Atlantic City Planning Committee,” to consist of the following five members: The Commissioner of Community Affairs, the Director of Local Government Services, the State Treasurer, the Mayor of Atlantic City, and the Atlantic City Council President. Each department, office, division, and agency of this State shall, to the extent not inconsistent with law, cooperate fully with the planning committee within the limits of its statutory authority and furnish the planning committee with such assistance on as timely a basis as is necessary to accomplish the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. Each member may designate a representative to attend meetings of the planning committee, and each designee may lawfully vote and otherwise act on behalf of the member who designated that individual to serve as a designee; provided, however, no designee shall vote on the adoption of the five-year financial plan or any subsequent modification thereto.

c. The planning committee shall organize as soon as practicable after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and shall select a secretary who need not be a member of the planning committee. The presence of three members of the planning committee shall constitute a quorum. The planning committee may conduct business without a quorum, but may only vote or take other official action when a quorum is present. The Department of Community Affairs shall provide staff support to the planning committee.

d. All planning committee members shall serve without compensation, but shall be eligible for reimbursement of necessary and reasonable expenses incurred in the performance of their official duties within the limits of funds appropriated or otherwise made available to the planning committee for its purposes. Unless other funds are appropriated or otherwise made available for use by the planning committee, the operational expenses of the planning committee shall be paid by the Department of Community Affairs.

e. The planning committee shall be subject to the provisions of the "Senator Byron M. Baer Open Public Meetings Act," P.L.1975, c.231 (C.10:4-6 et seq.).

(1) controlling litigation and Atlantic City’s legal affairs, including, but not limited to, suing in the municipality’s corporate name; prosecuting, defending, and resolving litigation, arbitration, disputes, and controversies; and retaining and directing municipal corporation counsel and other special counsel as the planning committee may deem appropriate;

(2) retaining any professionals on behalf of Atlantic City, and directing the work of professionals or any professionals previously retained by Atlantic City, in accordance with either the “Local Public Contracts Law,” P.L.1971, c.198 (C.40A:11-1 et seq.) or procurement laws applicable to the State, at the discretion of the planning committee;

(3) retaining bond counsel, adopting bond ordinances to the extent necessary, making appropriate bond applications, and taking any other steps necessary to restructure and adjust debt, on behalf of Atlantic City;

(4) negotiating and executing any contracts, agreements, or other documents on behalf of Atlantic City, except for employment contracts and collective negotiations agreements, as may be necessary or appropriate to effectuate any of the actions or steps specifically identified in P.L. , c. (C. ) (pending before the Legislature as this bill) or that may otherwise, in the discretion of the planning committee, help stabilize the finances, restructure the debts, or assist with the financial rehabilitation and recovery of Atlantic City; and

(5) procuring any goods, services, commodities, information technology, software, hardware, or other items on behalf of Atlantic City, in accordance with either the “Local Public Contracts Law,” P.L.1971, c.198 (C.40A:11-1 et seq.), or procurement laws applicable to the State, at the discretion of the planning committee.

b. On the first day of the twelfth month next following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), and at the same time each year thereafter, the planning committee shall issue a report indicating whether the planning committee believes the fiscal benchmarks in the five-year plan have been substantially met. The report shall be submitted to a special master, appointed by the Chief Justice, for approval or rejection within 60 days of submission. At the same time, copies of the report, for informational purposes, shall be submitted to the Governor, and to the President of the Senate and the Speaker of the General Assembly pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1). If the special master approves a report that determines Atlantic City has not substantially reached the benchmarks established by the planning committee, the provisions of subsection c. and d. of this section, as appropriate, shall take effect.

c. If Atlantic City has not substantially satisfied the planning committee’s benchmarks after the first 12-month period established in the five-year financial plan, as determined pursuant to subsection b. of this section, the planning committee’s powers shall expand to include the following:

(1) dissolving, terminating, transferring, abolishing, or otherwise disposing of any municipal authority, board, commission, or department, or any function thereof, except for departments and functions directly related to public safety and emergency services. Any action under this paragraph shall include adequate provisions for the payment of the creditors or obligees of the entity to be impacted, unless otherwise permitted by law. The powers granted pursuant to this paragraph shall include the power to take any steps required of the governing body under applicable laws, including but not limited to the “municipal and county utilities authorities law,” P.L.1957, c.183 (C.40:14B-1 et seq.), the “Local Authorities Fiscal Control Law,” P.L.1983, c.313 (C.40A:5A-1 et seq.) the “Water Infrastructure Protection Act,” P.L.2015, c.18 (C.58:30-1 et seq.), the “Local Redevelopment and Housing Law,” P.L.1992, c.79 (C.40A:12A-1 et seq.), and the “Municipal Land Use Law,” P.L.1975, c.291 (C.40:55D-1 et seq.);

(2) vetoing the minutes of the governing body of Atlantic City, any board, commission, or department of Atlantic City, and any independent board or authority in Atlantic City, including, but not limited to, the housing authority, parking authority, redevelopment authority, planning board, and zoning board of adjustment. A true copy of the minutes of every meeting of the governing body and any board, commission, department, or independent board, or authority shall be delivered forthwith, by and under the certification of the secretary thereof, to the planning committee. No action taken at the meeting shall have force or effect until 15 business days after a copy of the minutes have been so delivered to the planning committee, unless during this 15-day period the planning committee shall approve in writing the minutes or any part thereof, in which case the action shall become effective upon approval. If, within that 15-day period, the planning committee returns a copy of the minutes with a veto of any action taken by the governing body, board, commission, department, or independent board or authority, or any member thereof at the meeting, the action shall be null and void and of no effect. The planning committee may approve all or part of the actions taken at a meeting; and

(3) selling, conveying, leasing, monetizing, or otherwise disposing of any interest in any municipally-owned assets, including but not limited to, any water, sewer, wastewater, and storm water infrastructure, equipment or facilities, services, and in any real property, including any improvements thereon; provided, however, the planning committee shall first prepare a report, including recommendations regarding an asset transaction and a cost-benefit analysis of the proposed asset transaction, including both the short-term and long-term effects on Atlantic City. The planning committee shall have a financial review of that report performed by an independent auditing firm or registered municipal accountant of New Jersey. If the auditor or municipal accountant finds that the methodology used in the report’s cost benefit analysis of the proposed asset transaction was proper, then the report shall be submitted to the Governor for final approval or disapproval. An asset transaction pursuant to this paragraph shall not be completed unless finally approved by the Governor.

d. If Atlantic City has not substantially satisfied the planning committee’s benchmarks for the second 12-month period established in the five-year financial plan, as determined pursuant to subsection b. of this section, the planning committee’s powers shall expand to include the following:

(1) amending or terminating any existing contracts or agreements, which shall not include bonds, notes, indentures, or other similar financing instruments and documents to which the municipality is a party, in accordance with the terms thereof; or unilaterally amending or terminating any contracts or agreements which shall not include bonds, notes, indentures, or other similar financing instruments and documents to which the municipality is a party, provided that the planning committee determines that the unilateral termination or amendment is reasonable and directly related to stabilizing the finances or assisting with the fiscal rehabilitation and recovery of Atlantic City;

(2) unilaterally modifying, amending, or terminating any collective negotiations agreements, except those related to school districts, to which the municipality is a party, or unilaterally modifying, amending, or terminating the terms and conditions of employment during the term of any applicable collective negotiations agreement, or both, provided that the planning committee determines that the modifications, amendments, or terminations are reasonable and directly related to stabilizing the finances or assisting with the fiscal rehabilitation and recovery of Atlantic City;

(3) acting as the sole agent in collective negotiations on behalf of Atlantic City;

(4) with respect to any expired collective negotiations agreement to which Atlantic City is a party, unilaterally modifying wages, hours, or any other terms and conditions of employment upon the planning committee’s determination that those modifications are reasonable and directly related to stabilizing the finances or assisting with the fiscal rehabilitation and recovery of Atlantic City;

(5) unilaterally abolishing any non-elected municipal positions in Atlantic City at any time. All of the functions, powers, and duties of abolished positions shall be exercised or delegated by the planning committee. The provisions of Title 11A, Civil Service shall not apply to any employment action under this paragraph;

(6) entering into any agreement with Atlantic County, any of the other municipalities located in that county, or any instrumentality of the State to share or consolidate municipal services pursuant to any law applicable to consolidation or sharing of services, including, without limitation, the “Uniform Shared Services and Consolidation Act,” P.L.2007, c.63 (C.40A:65-1 et al.) and P.L.2015, c.279 (C.40A:14-90.1 et seq.);

(7) exercising on behalf of Atlantic City any authority granted to a municipality pursuant to the “Local Redevelopment and Housing Law,” P.L.1992, c.79 (C.40A:12A-1 et al.) when the planning committee deems it necessary or appropriate to help stabilize the finances, restructure the debts, or assist with the financial rehabilitation and recovery of Atlantic City;

(8) exercising on behalf of Atlantic City any authority granted to a municipality pursuant to the “Redevelopment Area Bond Financing Law,” P.L.2001, c.310 (C.40A:12A-64 et seq.) when the planning committee deems it necessary or appropriate to help stabilize the finances, restructure the debts, or assist with the financial rehabilitation and recovery of Atlantic City; and

(9) exercising on behalf of Atlantic City any authority granted to a municipality pursuant to the “Long Term Tax Exemption Law,” P.L.1991, c.431 (C.40A:20-1 et seq.) when the planning committee deems it necessary or appropriate to help stabilize the finances, restructure the debts, or assist with the financial rehabilitation and recovery of Atlantic City.
12. (New section) If any power provided to the planning committee pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) conflicts with the powers of the governing body under other law, the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) shall control. Unless explicitly stated otherwise, nothing in P.L. , c. (C. ) (pending before the Legislature as this bill) shall be construed to impact the authority of the Local Finance Board under the "Local Government Supervision Act (1947)," P.L.1947, c.151 (C.52:27BB-1 et seq.).
13. Section 1 of P.L.2004, c. 87 (C.40A:5A-12.1) is amended to read as follows:

1. To the extent there is available an undesignated fund balance or unreserved retained earnings held by an authority that is subject to the provisions of the "Local Authorities Fiscal Control Law," P.L.1983, c.313 (C.40A:5A-1 et seq.), excluding a fire district, a regional authority or a housing authority, an amount in that undesignated fund balance or unreserved retained earnings, not to exceed 5% of the annual costs of operation of the authority may be appropriated for use in the local budget of the municipality or county that created the authority unless otherwise restricted by bond covenants. An amount exceeding 5% of the annual costs of operation of the authority may be appropriated for use in the local budget of a municipality subject to the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).

(cf: P.L.2004, c.87, s.1)
14. R.S.54:5-6 is amended to read as follows:

54:5-6. Taxes on lands and payments in lieu of property taxes pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be a continuous lien on the land on which they are assessed and all subsequent taxes, or payments in lieu of property taxes pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), as appropriate, interest, penalties and costs of collection which thereafter fall due or accrue shall be added to and be a part of such initial lien.

(cf: P.L.1994, c.32, s.5)
15. Section 1 of P.L.2011, c.18 (C.5:12-218) is amended to read as follows:

1. As used in P.L.2011, c.18 (C.5:12-218 et al.):

"Atlantic City" or "city" means the City of Atlantic City, Atlantic County.

"Atlantic City convention center project" or "convention center project" means the project authorized by paragraph (9) of subsection a. of section 6 of P.L.1971, c.137 (C.5:10-6).

"Atlantic City Tourism District" or "tourism district" means the district within Atlantic City established pursuant to section 5 of P.L.2011, c.18 (C.5:12-219).

"Authority" means the Casino Reinvestment Development Authority established pursuant to section 5 of P.L.1984, c.218 (C.5:12-153).

"Convention center authority" means the Atlantic City Convention and Visitors Authority established pursuant to section 3 of P.L.1981, c.459 (C.52:27H-31).

"Convention Center Division" or "division" means the division created pursuant to paragraph (1) of subsection b. of section 12 of P.L.2011, c.18 (C.5:12-226) to exist within the authority as a division of the authority.