2021 New Jersey Revised Statutes
Title 52 - State Government, Departments and Officers
Section 52:27BBBB-19.1 - Findings, declarations relative to casino gaming properties.
52:27BBBB-19.1 Findings, declarations relative to casino gaming properties.
1. 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.
L. 2021, c.315, s.1.
