An Act blocking beach fees in shore municipalities accepting certain government provided beach replenishment funding and dedicating two percent of taxable receipts under the sales and use tax collected in the shore municipalities to the shore municipalities, amending P.L.1955, c.49 and supplementing chapter 61 of Title 40 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.1955, c.49 (C.40:61-22.20) is amended to read as follows:

1. a. The governing body of any municipality bordering on the Atlantic Ocean, tidal water bays or rivers which owns or shall acquire, by any deed of dedication or otherwise, lands bordering on the ocean, tidal water bays or rivers, or easement rights therein, for a place of resort for public health and recreation and for other public purposes shall have the exclusive control, government and care thereof and of any boardwalk, bathing and recreational facilities, safeguards and equipment, now or hereafter constructed or provided thereon, and may, by ordinance, make and enforce rules and regulations for the government and policing of such lands, boardwalk, bathing facilities, safeguards and equipment; provided, that such power of control, government, care and policing shall not be construed in any manner to exclude or interfere with the operation of any State law or authority with respect to such lands, property and facilities. [Any] Except as provided in subsection d. of this section, any such municipality may, in order to provide funds to improve, maintain and police the same and to protect the same from erosion, encroachment and damage by sea or otherwise, and to provide facilities and safeguards for public bathing and recreation, including the employment of lifeguards, by ordinance, make and enforce rules and regulations for the government, use, maintenance and policing thereof and provide for the charging and collecting of reasonable fees for the registration of persons using said lands and bathing facilities, for access to the beach and bathing and recreational grounds so provided and for the use of the bathing and recreational facilities, but no such fees shall be charged or collected from children under the age of 12 years.

b. A municipality may by ordinance provide that no fees, or reduced fees, shall be charged to:

(1) persons 65 or more years of age;

(2) persons who meet the disability criteria for disability benefits under Title II of the federal Social Security Act (42 U.S.C. s.401 et seq.);

(3) persons in active military service in any of the Armed Forces of the United States and to their spouse or dependent children over the age of 12 years; and

(4) persons who are active members of the New Jersey National Guard who have completed Initial Active Duty Training and to their spouse or dependent children over the age of 12 years. As used in this paragraph, "Initial Active Duty Training" means Basic Military Training, for members of the New Jersey Air National Guard, and Basic Combat Training and Advanced Individual Training, for members of the New Jersey Army National Guard.

c. A municipality providing for no fees or reduced fees pursuant to paragraph (3) or (4) of subsection b. of this section shall track, in a manner deemed appropriate by the governing body of the municipality, the number of persons who qualify under the provisions of those paragraphs.

d. (1) On or after November 1, 2012, any municipality that accepts federal or State grants or aid for the purpose of replenishing storm-damaged beaches shall not adopt or enforce ordinances to collect fees pursuant to subsection a. of this section.

(2) Every municipality that accepts federal or State grants or aid for the purpose of replenishing storm-damaged beaches shall be required to provide free public toilet facilities for persons using the beach during the period of time from Memorial Day weekend through Labor Day weekend.

(3) If the Director of the Division of Local Government Services in the Department of Community Affairs determines that a municipality is not complying with the provisions of this subsection, the director shall not approve the budget of that municipality, as required by N.J.S.40A:4-78, until the budget is properly amended, and may subject the members of the governing body to the penalty provisions of section 52 of P.L.1947, c.151 (C.52:27BB-52).

(cf: P.L.2011, c.75, s.1)

2. (New section) a. There is established in the General Fund a special fund to be known as "The Shore Municipalities' Sales and Use Tax Collection Fund." An amount equal to the revenue derived from a tax rate imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), of two percent in shore municipalities shall be monthly credited from the General Fund to "The Shore Municipalities' Sales and Use Tax Collection Fund."

b. (1) For purposes of determining the amount of sales and use tax revenue attributable to the imposition of the sales and use tax in a shore municipality, the Director of the Division of Taxation shall base the determination on the place of business from which a unit of sales and use tax revenue is reported.

(2) The director may provide for an alternative method of determining the amount of sales and use tax revenue attributable to the imposition of the sales and use tax in a shore municipality if a unit of sales and use tax revenue is attributable to the imposition of the sales and use tax upon a taxable transaction that:

(a) is not associated with a place of business; or

(b) is attributable to a line of business for which the place of business attribution method does not accurately reflect the origin of a unit of sales and use tax revenue.

c. The Legislature shall annually appropriate all monies credited to "The Shore Municipalities' Sales and Use Tax Collection Fund" for distribution to shore municipalities. The Legislature's annual appropriation of "The Shore Municipalities' Sales and Use Tax Collection Fund" balance shall be distributed on a monthly basis wherein distributions of reported collections occur no later than the twentieth day of the month following the due date of the report. The monthly distribution shall provide each shore municipality with an amount equal to the sales and use tax revenue deposited in "The Shore Municipalities' Sales and Use Tax Collection Fund" that is attributable to the imposition of the sales and use tax in that shore municipality from the most recently reported sales and use tax period that precedes the date of distribution. For purposes of determining the amount of the distribution for a shore municipality the Director of the Division of Budget and Accounting shall rely on the Director of the Division of Taxation's method of determining the amount of sales and use tax revenue attributable to the imposition of the sales and use tax in a shore municipality pursuant to subsection b. of this section.

d. As used in this section:

"Shore municipalities" mean municipalities with governing bodies authorized to make and enforce rules and regulations by ordinance pursuant to section 1 of P.L.1955, c.49 (C.40:61-22.20), concerning municipal authority to regulate beaches.

3. This act shall take effect immediately and section 2 shall apply to State fiscal years beginning on or after the date of enactment.

STATEMENT

This bill blocks beach fees in shore municipalities accepting certain government provided beach replenishment funding and dedicates two percent of taxable receipts collected under the sales and use tax in the shore municipalities to the shore municipalities of origin. The purpose of this bill is twofold: (i) open beaches that are supported by public funding to the public; and (ii) to supplant shore municipalities beach fee revenue streams with sales and use tax revenue attributable to shore related commerce.

The bill prevents shore municipalities that accept federal or State aid to replenish beaches damaged by storms from collecting beach fees. The bill's beach fee prohibition applies to fees imposed through the sale of beach tags or otherwise. From a technical perspective, the bill blocks the enforceability and adoption of municipal beach fee ordinances.

The bill also requires shore municipalities that accept federal or State aid to replenish beaches damaged by storms to provide free restroom access for beach goers from Memorial Day weekend through Labor Day weekend.

The bill includes penalty provisions for municipalities that violate the restrictions on beach fees and restroom access. The bill requires the Director of the Division of Local Government Services to disapprove of a municipal budget that violates the bill's beach fee and restroom access requirements until revised accordingly. The bill also grants the director discretionary authority to apply N.J.S.A.52:27BB-52 penalties to noncompliant municipal governing body members, which penalties include fines, jail time, and office forfeiture.

To supplant the loss of revenue from the beach fee prohibition, the bill calls upon the Legislature to annually appropriate two percent of the taxable receipts collected under the sales and use tax in shore municipalities back to those shore municipalities. The bill establishes "The Shore Municipalities' Sales and Use Tax Collection Fund," which is where the two percent of the taxable receipts from shore municipalities is to be credited. The bill calls for the distribution of funds to shore municipalities to occur on a monthly basis wherein distributions follow collections by one month.

The bill's method of determining the municipality of origin associated with sales and use tax revenue is based on the registered place of business associated with a sales and use tax return report. However, the bill does allow the Director of the Division of Taxation to devise other methods of determining the municipality of origin for sales and use tax revenue where the place of business method is inaccurate due to the absence of a place of business or the nature of the underlying line of business associated with the transaction.

The bill takes effect immediately, except that the provisions calling upon the Legislature to appropriate two percent of the taxable receipts collected under the sales and use tax in shore municipalities back to those shore municipalities applies to State fiscal years beginning on or after the date of enactment.