New Jersey § 52:27bbbb-19

§ 52:27bbbb-19.

The Legislature finds and declares that: a. In 1976, the voters of the State approved an amendment to the New Jersey Constitution (Article IV, Section VII, paragraph 2 , subparagraph D), which authorized casino gaming in Atlantic City. b. For over 30 years, casinos grew and profited in the City of Atlantic City, until

competition from other states in our region, particularly Pennsylvania, siphoned off

much of the out-of-State and foreign gamblers who had frequented Atlantic City casinos

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

City in several ways, including: an increase in unemployment due to the recent closing

of four casino properties, representing fully one-third of the number of casinos operating

in Atlantic City in 2013; a strain on Atlantic City's municipal budget due to property

tax refunds required by successful assessment appeals of casino gaming properties;

and an increased property tax burden on Atlantic City and Atlantic County residents

based on the decreasing value of casino gaming properties. d. In the “New Jersey Economic Opportunity Act of 2013,” P.L.2013, c. 161 ( C.52:27D-489p et al.), the four New Jersey cities with the lowest median family income based on

the 2009 American Community Survey from the United States Census (Table 708. Household, Family, and Per Capita Income and Individuals, and Families Below Poverty

Level by City: 2009) were designated as Garden State Growth Zones and were declared

blighted areas and areas in need of rehabilitation; provided, however, that the declaration

alone could not be used to allow any property to be taken or acquired. e. The Legislature has previously recognized the extraordinary situation in Atlantic

City, by designating a municipality which contains a tourism district as established

pursuant to section 5 of P.L.2011, c. 18 ( C.5:12-219 ) and regulated by the Casino Reinvestment Development Authority as a Garden State

Growth Zone for purposes of incentive programs administered by the New Jersey Economic

Development Authority in P.L.2014, c. 63 ( C.34:1B-251 et al.). f. Consistent with the Legislature's acts with respect to the other Garden State Growth

Zones, a municipality which contains a tourism district as established pursuant to

section 5 of P.L.2011, c. 18 ( C.5:12-219 ) and is regulated by the Casino Reinvestment Development Authority is hereby declared

a blighted area and area in need of redevelopment; provided, however, that this declaration

alone shall not be used to allow any property to be taken or acquired. g. The accurate assessment of casino gaming properties is especially difficult because

they are unique properties and their year-to-year value is greatly influenced by the

performance of casino gaming properties in other nearby states and by extreme weather

events like Super Storm Sandy. h. It is appropriate for the Legislature to address the extraordinary situation in

Atlantic City by devising a program that avoids costly assessment appeals for both

the casino operators and Atlantic City, and that provides a certain mandatory minimum

property-tax related payment by casino properties that Atlantic City can rely upon

each year. i. Article VIII, Section I, paragraph 2 of the New Jersey Constitution empowers the Legislature to grant property tax exemptions by general law. j. It is constitutional to classify Atlantic City, the only municipality wherein casino

gaming is authorized, as a special class unto itself for economic purposes related

to casino gaming. Courts have routinely concluded that the Legislature has the ability to address

the concerns of Atlantic City and the casino industry separately from other local

entities and industries due to the unique role casino gambling plays in Atlantic City

and the State. The fact that, even though almost 40 years have passed since the approval of casino

gambling in New Jersey, Atlantic City remains the only municipality wherein casino

gaming is authorized, proves that its unique classification continues to allow the

Legislature to treat it as a special case under State law, and permits changes to

the casino “experiment” in Atlantic City. k. Casino gaming properties represent a unique classification of property that can

be exempted from normal property taxation by general law, in favor of a certain guaranteed

mandatory minimum payment in lieu of property taxes when it is primarily in the public

interest to do so. l . In the interest of the revitalization of Atlantic City and the continuation of the

casino industry and its associated economic benefits to the State, it is reasonable

that the Legislature, in seeking to revitalize the city, should choose to experiment

with a payment in lieu of property tax mechanism to address the issues of persistent

property tax appeals and the damage that those appeals, together with declining casino

property values, have wrought on the tax bases of both Atlantic City and Atlantic

County. m. It is a primary public purpose to grant casino gaming properties an exemption from

normal property taxation for a limited period of time, in exchange for a guaranteed

mandatory minimum payment in lieu of property taxes, because Atlantic City will be

able to depend on a certain level of revenue from casino gaming properties each year,

making the local property tax rate and need for State aid less volatile; casino revenue

supports many social programs, such as property tax relief for seniors, medical assistance,

housing for disabled residents, transportation assistance, and other social services

programs for elderly and disabled New Jerseyans; casinos provide a unique recreational

experience to the residents of New Jersey within the State; and because, with a long-term

predictable payment in lieu of property tax liability, casino gaming properties will

know how much of their income will be required to pay their obligation to Atlantic

City, Atlantic County, and the Atlantic City School District. This ability to depend on a stable payment in lieu of property tax obligation will

in turn help to stabilize the casino business models and the workforce required to

run those business models, and the casino gaming properties will be better able to

compete with out-of-State casino gaming properties in the region to preserve, and

perhaps grow, the many benefits that casino gaming has brought to the State, and more

particularly, to the Atlantic City region. n. It is also a primary public purpose to stabilize the casino industry for the benefit

of the casino employee workforce, many of whom have worked in the casinos since the

first casino opened over 30 years ago. It is anticipated that the financial stability granted to the casino gaming properties

by a guaranteed mandatory minimum payment in lieu of property taxes for a 10-year

period will greatly enhance the ability of the casino gaming properties to adapt their

business models to the changes in the regional casino gaming market, which will in

turn allow them to remain open for business and to pay their employees good wages

and benefits, including health care and pension benefits, for many years to come. o . This plan to provide a guaranteed minimum in lieu of property tax payment for 10

years, and ending casino property tax appeal litigation would provide some economic

stabilization to Atlantic City and allow it time to plan for its future, which it

cannot do if it descends further into an economic free-fall. p. The public purpose of a property tax exemption and payment in lieu of property

tax program for casino gaming properties seems evident without examining the specific

local, regional, and Statewide economic benefits of the continued success of the casino

industry and the general economic viability of Atlantic City. Arguably, the local, regional, and State economies could be bolstered by such a

property tax exemption and, thus, be seen by a court as a primary public purpose furthered

by the legislation. The exemption of casino property from property taxation is a proper exercise of

the Legislature's power to grant property tax exemptions by general law, since Atlantic

City casinos are a unique classification which does not exclude any similar properties

in the State. Such an exemption primarily furthers several public purposes, while providing an

incidental benefit to casino properties. q. 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 the City of Atlantic

City. Any amount so appropriated to Atlantic City shall not impact, reduce, or otherwise

affect the amount appropriated for Transitional Aid to Localities.