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Impact of New Jerseys Newest Cleanup Law on Economic Development

On July 9, 2012 Governor Christie signed into law S-1460. Not widely publicized, this law requires industrial properties that are subject to a federal or state cleanup order to hand over property tax refunds to the New Jersey Department of Environmental Protection (NJDEP) to assure that cleanup obligations will be met.  Specifically, if there is an ongoing cleanup at vacant or underutilized industrial site, and a tax court orders a property tax refund for that site, then the municipality is required to forward that refund to NJDEP.  The law does not define “industrial site" nor does it define "underutilized" property.

S-1460’s second provision allows a municipality to assess an annual charge for clean-up of vacant or underutilized industrial properties that are subject to an administrative order or enforcement action. This provision does not say anythingabout the property having to be benefitting from a tax appeal. The amount charged cannot exceed the difference between the taxes paid on the property during the last year of full industrial operation and the property taxes paid on the property during the current year. That difference is deposited with NJDEP and credited against the property owner's cleanup liability. There is an exemption if the site has established a remediation trust fund.

You need to evaluate whether any of the provisions of S-1460 applies to you and your projects and what the possible financial implication will be, especially if you considering a property tax appeal.

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