New Jersey § 52:27bbbb-19

§ 52:27bbbb-19.

The Legislature finds and declares: a. The “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ), was enacted on May 27, 2016, to address a dire financial circumstance that affected

casino gaming properties in Atlantic City, and the finances of the city itself. Competition from other states in New Jersey's region had siphoned off many of the

out-of-State and foreign gamblers who had frequented the casino gaming properties

in Atlantic City for many years. The regional competition in casino gaming had a deleterious effect on Atlantic City

in several ways, including an increase in unemployment due to the closing of four

casino properties out of the 12 that had been operating in the city; a strain on

Atlantic City's municipal budget due to property tax refunds required by successful

assessment appeals of casino gaming properties in the years immediately prior to the

enactment of that law; and an increased property tax burden on Atlantic City and

Atlantic County residents based on the decreasing value of the remaining casino gaming

properties. b. The Legislature responded to this dire financial circumstance by devising a 10-year

payment in lieu of property tax (PILOT) program that avoided costly property tax assessment

appeals for the operators of casino gaming properties and Atlantic City, and that

provided an annual mandatory minimum property tax-related payment to Atlantic City

by the casino gaming properties, payments that Atlantic City is able to rely upon

each year to support its municipal budget. This annual PILOT payment was first implemented in calendar year 2017, and is to

end at the end of calendar year 2026. The operation of the “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ) has stabilized the finances of each individual casino gaming property as well as

the finances of Atlantic City. c. The Legislature notes, with interest and approval, the stabilizing effect that

the “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ) has had on the finances of the Atlantic City and the casino gaming industry during

the first five years of the law. The Legislature also notes that two additional casino gaming properties have opened

in Atlantic City since the enactment of the “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ), and that Atlantic City's overall financial condition is more stable since the casino

gaming properties began making PILOT payments. This financial stability benefits the casinos, their employees, property taxpayers

in Atlantic City, and all New Jersey residents. d. The Legislature finds that this financial stability achieved between the casino

gaming properties and Atlantic City may be adversely impacted by certain provisions

in the current version of the “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ). As part of the agreement that led to the enactment of that law, it was determined

that each casino gaming property would not pay more in the annual PILOT payments than

it paid in property taxes in 2015. This provision was made in order to incentivize the casino gaming properties to

enter into the PILOT agreement, which was critical to achieving financial stability

for both the casino gaming properties and ensuring Atlantic City's ability to anticipate

the amount of PILOT funds they would receive from the casino gaming properties. Separately, the investment alternative tax (IAT) levied on the casinos, which had

historically funded the Casino Reinvestment Development Authority, was to be paid

instead to Atlantic City for the purposes of paying down the city's debt. The “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ), provided that if, in any year, a casino gaming property's PILOT payment exceeded

its 2015 property tax bill, it would receive a “credit” against its IAT obligation. This crediting mechanism only extends through calendar year 2021, so beginning in

calendar year 2022, current law will require each casino operator in Atlantic City

to pay their full PILOT and IAT obligations. e. The Legislature is concerned that, due to the State's public health emergency declared

in response to the COVID-19 pandemic, which negatively impacted tourism in Atlantic

City by restricting the public's right to travel; closing casino gaming properties

for months on end and then allowing them to open only partially for another extended

period of time; and closing other businesses that would have been visited by tourists

to the city for months as well; requiring each casino gaming property to make an

annual PILOT payment, as calculated under the current version of the “Casino Property

Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ), and also satisfy its full IAT obligations for calendar years 2022 through 2026

may create financial difficulties for those gaming properties. Similarly, the Legislature is also concerned with the impact on the casino gaming

properties in Atlantic City of the total amount of the PILOT payments, as calculated

under the current version of the “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ), owed by those casino gaming properties, as well as the current manner of determining

each individual casino gaming property's PILOT payment responsibility, due to all

of the issues experienced in Atlantic City resulting from the public health emergency. The Legislature is concerned that the impact of all of the public health emergency

limitations on Atlantic City's casino gaming properties will affect the finances of

those casinos for the foreseeable future, and thereby impact their ability to pay

the required PILOT payments to the city and impact their ability to contribute to

the quality of life of the State's senior and disabled residents who rely on casino

revenue deposited into the Casino Revenue Fund to fund programs that reduce property

taxes as well as utility assistance programs benefiting those residents. f. Therefore, the Legislature declares that it is a compelling public purpose for

the State to establish appropriate alternative obligations for the final five years

of the “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ), in order to: (1) adjust policies to reflect the operations of existing casino

gaming properties and to compensate for the impacts that the public health emergency,

declared in response to the COVID-19 pandemic, has had and will continue to have on

in-person and internet gaming, (2) lessen the financial impact of the end of the IAT

crediting mechanism at the end of 2021 on the casino gaming properties, and (3) ensure

that Atlantic City continues to receive sufficient PILOT payments and IAT payments

to fund its municipal budget. The Legislature further declares that such an alternative is in the best interest

of the casino gaming industry which serves as a vital part of the economy of the State,

in the best interests of Atlantic City, and in the best interests of the State's senior

and disabled residents who rely on casino revenue deposited into the Casino Revenue

Fund to fund programs that reduce property taxes as well as rentals, telephone, gas,

electric, and utility charges for those populations. The Legislature further declares that it is in the best interests of the casino

gaming industry to revise the calculation of the PILOT payment each casino is required

to pay under the “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ) in order to lessen the impact of these payments on the casino's finances during

and after the public health emergency declared in response to the COVID-19 pandemic. g. As the Legislature is empowered by the provisions of Article VIII, Section I, paragraph 2 of the New Jersey Constitution to grant property tax exemptions by general law, and the Legislature exercised this

authority in 2016 through enacting the “Casino Property Tax Stabilization Act,” P.L.2016, c. 5 ( C.52:27BBBB-18 et seq. ) to create the 10-year PILOT program that began in 2017, the Legislature also has

the authority, by law, to revise that PILOT program to thereby address the impact

of the expiration of the IAT credit mechanism and its effects on the casino gaming

industry in the State, as well as the amount, and calculation, of the PILOT payments

required to be paid to Atlantic City by the casino gaming properties in Atlantic City. h. The Legislature has also determined to address in this act other matters related

to the continued successful operation of New Jersey's casino gaming properties by

ensuring: (1) that the casino gaming properties dedicate sufficient sources of revenue

to provide for necessary capital improvements, and (2) that the City of Atlantic City

also has adequate funds available to it for capital improvements and other needed

quality of life expenditures.