The New Jersey legislature recently made changes to the law that may have a significant impact on industrial property that is environmentally contaminated. The law requires a municipality to pay any property tax refund ordered by the Tax Court or a County Board of Taxation to the Commissioner of Environmental Protection for required site remediation when the property under appeal is an industrial property that has is “currently vacant or underutilized” and that is subject to any federal or State court order, or administrative action or order, for environmental remediation. Under the statute, within 30 days after completion of the site remediation, the Commissioner must return any remaining balance of the refund to the property owner and, if the balance is not timely returned, interest accrues. The new law applies to any property tax refunds that are not disbursed to the taxpayer prior to July 9, 2012.
Under the law, a municipality is also allowed to assess an annual charge on contaminated industrial property that “becomes vacant or underutilized” to help ensure the expedient remediation of that site. The annual charge collected by the municipality must be deposited with the Commissioner of Environmental Protection and credited against the property owner's remediation liability. Unpaid charges shall be reduced to a lien on the property and may be collected in the same manner as a tax lien. The law excludes property for which a remediation trust fund has been established.
The statutes leaves the question of what constitutes an “underutilized property” open for judicial determination. A court dealing with this issue may look to the Pan Chemical Corp. v. Hawthorne Borough, 404 N.J.Super. 401 (App.Div. 2009). In Pan Chemical, the court held that it could not take into account contamination in evaluating the property unless the Industrial Site Remediation Act (“ISRA”) was triggered. For a discussion of Pan Chemical, click here.
The statute also demonstrates the importance of obtaining counsel to litigate a tax appeal for industrial property. Particularly, when the property may be subject to the new law. If you are considering filing an appeal for industrial or commercial property, do not hesitate to contact Marshall Kizner at (609) 219-7449.
Marshall Kizner is an Associate in Stark & Stark's Lawrenceville, New Jersey office concentrating in Bankruptcy & Creditors Rights. For questions, or additional information, please contact Mr. Kizner.