52:27BBBB-20 Definitions relative to stabilization of finances of a municipality in which casino gaming is authorized.
3. a. As used in P.L.2016, c.5 (C.52:27BBBB-18 et al.):
"Atlantic City" means the City of Atlantic City, in Atlantic County;
"Base amount" means, for calendar years 2018 through 2021, the amount of the payment in lieu of taxes as determined by subparagraph (d) of paragraph (3) of subsection c. of this section; and for calendar years 2022 through 2026, the amount of the payment in lieu of taxes as determined by subparagraphs (e) through (h) of paragraph (3) of subsection c. of this section;
"Casino gaming property" means one or more parcels of real property located in Atlantic City, and any adjacent property utilized in connection with such property, upon which there is located a facility licensed to be used for casino gaming in 2014 or thereafter, whether or not in actual operation, which has more than 500 guest hotel rooms, and is not subject to recorded covenants prohibiting casino gaming;
"Clean and Safe Fund" means the Clean and Safe Fund established pursuant to section 7 of P.L.2021, c.315 (C.52:27BBBB-27);
"Division" means the Division of Gaming Enforcement in the Department of Law and Public Safety;
"Gross gaming revenue" (GGR) means the total amount of revenue raised through casino gaming, including revenue from sports pool operations, from all of the casino gaming properties located in Atlantic City as determined by the division for calendar years 2014 through 2020. For the purpose of determining the amount of the payment in lieu of taxes pursuant to this section, gross gaming revenue shall not include revenue derived from Internet casino gaming and Internet sports wagering during calendar years 2021 through 2026 as determined by the division;
"Infrastructure Fund" means the Infrastructure Fund established pursuant to section 8 of P.L.2021, c.315 (C.52:27BBBB-28);
"Local Finance Board" means the Local Finance Board in the Division of Local Government Services in the Department of Community Affairs; and
"Treasury" means the Department of the Treasury.
b. Beginning with calendar year 2017, and for the next succeeding nine calendar years, casino gaming properties located in Atlantic City shall be exempt from local property taxation on real property and improvements, including accessory hotels, conference centers, parking garages, and other appurtenant facilities, except that any new improvement developed on a casino gaming property that is made outside of the perimeter footprint of any improvement existing as of the effective date of this act and any real property, not formerly qualified as casino gaming property, acquired after such date by an owner of casino gaming property shall not be exempt from local property taxation in any calendar year and shall be subject to local property taxation annually at Atlantic City's general property tax rate. The provisions of this section shall not apply to any casino property that operates under a small scale casino facility license or a staged casino facility license pursuant to section 1 of P.L.2010, c.115 (C.5:12-80.1).
c. (1) In exchange for the property tax exemption granted in subsection b. of this section, each owner of each casino gaming property shall sign a 10-year financial agreement with Atlantic City for each casino gaming property based upon the provisions of P.L.2016, c.5 (C.52:27BBBB-18 et al.) for calendar years 2017 through 2021, which financial agreement shall be amended and continued to reflect and incorporate the amendatory and supplemental provisions of P.L.2021, c.315 (C.52:27BBBB-19.1 et al.) for calendar years 2022 through 2026, promising to make quarterly payments to the city of its allocated portion of the annual amount of the payment in lieu of taxes as determined by this section. The continuation of the agreement for calendar years 2022 through 2026 is also provided in exchange for the prescribed uses of excess amounts of a casino gaming property's investment alternative tax, as described in subsection b. of section 9 of P.L.2016, c.5 (C.52:27BBBB-25). The owner of each casino gaming property shall be responsible for the payments allocated to that property and shall be subject to the lien provisions of R.S.54:5-6 and the interest for delinquency provisions of R.S.54:4-67 if those payments are not made.
(2) Any new owner of a casino gaming property following the effective date of P.L.2016, c.5 (C.52:27BBBB-18 et al.) shall immediately become responsible for signing the financial agreement with Atlantic City promising to make payments consistent with this section.
(3) (a) The total amount of the payment in lieu of property taxes owed to Atlantic City for calendar year 2017 shall be $120 million. To the extent that any owner of a casino gaming property has paid property taxes for calendar year 2017 prior to the date P.L.2016, c.5 (C.52:27BBBB-18 et al.) becomes operative, the amount of property taxes so paid shall be credited toward that owner's allocated share of the $120 million total payment in lieu of property taxes.
(b) For calendar years 2018, 2019, 2020, and 2021, the amount of the payment in lieu of property taxes owed to Atlantic City shall increase by two percent per year in every year in which there is no upward adjustment to the base amount of the payment in lieu of taxes from the previous calendar year as determined by subparagraph (d) of this paragraph.
(c) For calendar years 2018, 2019, 2020, and 2021, the total amount of the payment in lieu of property taxes owed to Atlantic City shall be the base amount as determined by subparagraph (d) of this paragraph and the total amount of the annual increases to date as determined by subparagraph (b) of this paragraph.
(d) For calendar years 2018, 2019, 2020, and 2021, the base amount of the payment in lieu of taxes shall be determined as follows:
If the amount of the GGR in the preceding calendar year is between $3.4 billion and $3.8 billion, the base amount shall be $165 million, or in the case of an upward adjustment, $15 million more than the PILOT in the previous year, whichever is greater;
If the amount of the GGR in the preceding calendar year is between $3.0 billion and $3.4 billion, the base amount shall be $150 million, or in the case of an upward adjustment, $20 million more than the PILOT in the previous year, whichever is greater;
If the amount of the GGR in the preceding calendar year is between $2.6 billion and $3.0 billion, the base amount shall be $130 million, or in the case of an upward adjustment, $10 million more than the PILOT in the previous year, whichever is greater;
If the amount of the GGR in the preceding calendar year is between $2.2 billion and $2.6 billion, the base amount shall be $120 million, or in the case of an upward adjustment, $10 million more than the PILOT in the previous year, whichever is greater;
If the amount of the GGR in the preceding calendar year is between $1.8 billion and $2.2 billion and the aggregate gross revenues from all of the casino gaming properties located in Atlantic City from all revenue streams, excluding GGR, have not increased compared to the prior calendar year by more than the amount by which GGR is less than $2.2 billion, as determined by the division, the base amount shall be $110 million, or in the case of an upward adjustment, $20 million more than the PILOT in the previous year, whichever is greater;
If the amount of the GGR in the preceding calendar year is $1.8 billion or less and the aggregate gross revenue from all of the casino gaming properties located in Atlantic City from all revenue streams, excluding GGR have not increased compared to the prior calendar year by more than the amount by which GGR is less than $1.8 billion as determined by the division, the base amount shall be $90 million.
(e) The total amount of the payment in lieu of property taxes owed to Atlantic City for calendar year 2022 shall be $110 million.
(f) For calendar years 2023, 2024, 2025, and 2026, in any calendar year in which there is not an upward or a downward adjustment to the base amount of the payment in lieu of property taxes owed to Atlantic City pursuant to subparagraph (h) of this paragraph, the total amount of the payment in lieu of property taxes owed to Atlantic City for the calendar year shall increase by two percent from the preceding year.
(g) For calendar years 2023, 2024, 2025, and 2026, the total amount of the payment in lieu of property taxes owed to Atlantic City shall be the base amount as determined by subparagraph (h) of this paragraph and the total amount of the annual increases to date as determined by subparagraph (f) of this paragraph.
(h) For calendar years 2023, 2024, 2025, and 2026, the base amount of the payment in lieu of taxes (PILOT) shall be determined as follows:
If the amount of the GGR in the preceding calendar year is less than $2.3 billion, the base amount shall be $100 million, or in the case of a downward adjustment, $10 million less than the PILOT in the previous year, whichever amount is greater;
If the amount of the GGR in the preceding calendar year is between $2.3 billion and $2.9 billion, the base amount shall be $110 million, or in the case of an upward adjustment, $10 million more than the PILOT in the previous year and in the case of a downward adjustment, $10 million less than the PILOT in the previous year, whichever amount is greater; and
If the amount of the GGR in the preceding calendar year is greater than $2.9 billion, the base amount shall be $120 million, or in the case of an upward adjustment, $10 million more than the PILOT in the previous year, whichever amount is greater.
(4) The amount of the payment in lieu of property taxes owed pursuant to this subsection shall be calculated annually each calendar year for each casino gaming property using a formula implemented by the Local Finance Board, in consultation with the division, using the following criteria:
The geographic footprint of the real property, expressed in acres, owned by each casino gaming property;
The number of hotel guest rooms in each casino gaming property; and
The gross gaming revenue of the casino in each casino gaming property from the prior calendar year.
Each of these three criteria shall bear equal weight in the formula implemented by the Local Finance Board, in consultation with the division, pursuant to this paragraph.
(5) If the formula set forth in paragraph (4) of this subsection results in any individual casino gaming property being allocated an amount that is in excess of the total real property taxes due and payable by the casino gaming property in calendar year 2015, then, in calendar years 2017, 2018, 2019, 2020, and 2021, that casino gaming property shall receive a credit against the obligation of the operator of that property under paragraph (2) of subsection a. of section 3 of P.L.1984, c.218 (C.5:12-144.1) in the amount of such excess. If, after that credit against the obligation of the operator of that property under paragraph (2) of subsection a. of section 3 of P.L.1984, c.218 (C.5:12-144.1), that casino gaming property would still be liable for a payment in lieu of property taxes in excess of the total real property taxes due and payable by the casino gaming property in calendar year 2015, the casino gaming property shall not be required to make any additional payment in lieu of property tax payment. Instead, any additional amount that would have been owed by that casino gaming property shall be added, by proportional share, to the payment in lieu of property taxes to be paid by every other casino gaming property in order to provide Atlantic City the total amount of the payment in lieu of property taxes due and owing for that calendar year, provided that no individual casino gaming property shall be allocated an amount that is less than the total real property taxes due and payable by the casino gaming property in calendar year 2015.
(6) Beginning in calendar year 2022, an individual casino gaming property shall no longer be allowed a credit against the obligation of the operator of that property under paragraph (2) of subsection a. of section 3 of P.L.1984, c.218 (C.5:12-144.1) in the amount that the payment in lieu of property taxes owed is in excess of the total real property taxes due and payable by the casino gaming property in calendar year 2015, as allowed under paragraph (5) of this subsection for calendar years 2017, 2018, 2019, 2020, and 2021; provided, however, any increase in the net liability of an individual casino gaming property resulting from the elimination of the credit allowed under paragraph (5) of this subsection shall not exceed: 25 percent for calendar year 2022; 50 percent for calendar year 2023; and 75 percent for calendar year 2024. Any amount that would be owed by a casino gaming property in excess of the limits applied for calendar years 2022 through 2024 under this paragraph shall be added, by proportional share, and pursuant to the methodology developed by the division, to the payment in lieu of property taxes to be paid by every other casino gaming property.
(7) Notwithstanding the provisions of paragraph (6) of this subsection to the contrary, for an individual casino gaming property with less than 1,000 rooms, the increased net liability of such individual casino gaming property resulting from the elimination of the credit allowed under paragraph (5) of this subsection shall not exceed 50 percent between calendar years 2022 and 2026 with that 50 percent increase phased in at 25 percent for calendar year 2022, 50 percent for calendar year 2023, and 75 percent for calendar year 2024. Any amount that would be owed to such individual casino gaming property in excess of the limits applied for calendar years 2022 through 2026 under this paragraph shall be credited against the obligation of the operator of the property under paragraph (2) of subsection a. of section 3 of P.L.1984, c.218 (C.5:12-144.1).
(8) If the formula set forth in paragraph (4) of this subsection results in any individual casino gaming property not receiving the lower payment that is due that casino gaming property shall still be liable for its proportional share of the payment in lieu of property taxes determined pursuant to paragraph (6) of this subsection; provided, however, if the liability of the casino gaming property determined pursuant to the formula set forth in paragraph (4) of this subsection does not result in 50 percent of the savings due for 2022, 75 percent of the savings due for 2023, or 100 percent of the savings due for 2024, 2025, and 2026, that property shall be allowed a credit against the obligation of the operator of that property under paragraph (2) of subsection a. of section 3 of P.L.1984, c.218 (C.5:12-144.1) in an amount that will result in the savings of the individual casino gaming property equaling 50 percent for 2022, 75 percent for 2023, and 100 percent for 2024, 2025, and 2026. The total credits allowed against the obligation of the operator of a casino gaming property under paragraph (2) of subsection a. of section 3 of P.L.1984, c.218 (C.5:12-144.1) for all casino gaming properties in this category shall be distributed on a pro rata basis based upon the calculated payment in lieu of property taxes payment obligation.
(9) Notwithstanding the provisions of paragraph (6) of this subsection to the contrary, for an individual casino gaming property with more than 1,000 rooms, the increased net liability of such individual casino gaming property resulting from the elimination of the credit allowed under paragraph (5) of this subsection shall be no more than 90 percent, which shall be achieved by providing a credit against the obligation of the operator of a casino gaming property under paragraph (2) of subsection a. of section 3 of P.L.1984, c.218 (C.5:12-144.1) equivalent to 65 percent of the dollar value increase in that property's payment in lieu of property tax obligation each year, or such percentage in any year that limits the increase to 90 percent.
(10) The calculations in paragraphs (6) through (9) of this subsection shall be performed before the application of the two percent annual increase required under subparagraph (f) of paragraph (3) of this subsection. Thus, the final payment in lieu tax obligation and any credit against the obligation of the operator of a casino gaming property under paragraph (2) of subsection a. of section 3 of P.L.1984, c.218 (C.5:12-144.1) shall incorporate the two percent annual increase pursuant to the methodology developed by the division.
d. If a new casino gaming property becomes subject to the provisions of this subsection, then the new casino gaming property shall enter a financial agreement with Atlantic City to set its payment in lieu of taxes. A new casino gaming property shall pay its regular and conventional tax obligation as billed for the remainder of the calendar year in which it first qualifies as a casino gaming property. If an existing casino gaming property ceases to qualify as a casino gaming property, then the total amount of the payment in lieu of property taxes owed to Atlantic City pursuant to subparagraphs (e) through (h) of paragraph (3) of subsection c. of this section shall be decreased in the calendar year following the year in which the existing casino gaming property ceases to qualify as a casino gaming property by the payment in lieu of property taxes allocated to such casino gaming property pursuant to paragraph (4) of subsection c. of this section in the year in which such casino gaming property ceases to qualify as a casino gaming property. Any decrease to the total amount of the payment in lieu of taxes owed to Atlantic City precipitated by a casino gaming property no longer qualifying as a casino gaming property shall not take effect until the calendar year following the calendar year in which such casino gaming property ceases to qualify as a casino gaming property.
The payment in lieu of property taxes owed by a casino gaming property pursuant to this section shall be adjusted in each subsequent calendar year to reflect when any existing casino gaming properties no longer qualify as casino gaming properties.
e. The provisions of R.S.54:5-6 shall apply to any amount required to be paid under this section, and the municipality shall have the same rights against any casino gaming property for such unpaid amounts relating to that property as if such amounts were unpaid property taxes.
L.2016, c.5, s.3; amended 2018, c.33, s.14; 2021, c.315, s.3.