State aid shall be appropriated and paid annually to each municipality in which railroad property is located in an amount equal to base tax revenue, subject to the following adjustments, except that no State aid shall be appropriated or paid to any municipality where the base tax revenue, as adjusted, is less than $1,000.00:

(a) If additional Class II property, as defined in this act, in a municipality is placed in railroad use after the base year, the base tax revenue shall be increased by an amount equal to the product of the assessed value of such additional property as of the base year times the base tax rate.

(b) If any real property in a municipality is withdrawn from railroad use after the base year, the base tax revenue shall be reduced by an amount equal to the product of the assessed value of such property in the base year times the base tax rate;

(1) Provided, however, that with respect to real property withdrawn from railroad use during 1976:

(A) Such reduction shall not become effective for the year 1977, and

(B) That if a municipality files with the State Treasurer and a copy thereof with the appropriate county board of taxation within 15 days after the effective date of this act a written request for a continuance of State aid payments for such property (or a part thereof) for the year 1978:

(i) Such reduction (and in the case of a request for extended State aid payments for only a portion of the property, such proportionate reduction) shall not become effective until the year 1979, or until such property is sold or conveyed for other than railroad use, whichever comes sooner;

(ii) The municipality shall be obligated to pay to the State Treasurer within 60 days of the receipt thereof any and all payments made by or on behalf of the taxpayer, a trustee of the taxpayer, or any other representative of the taxpayer, for taxes which the municipality assessed on such real property for the tax year 1978 for which extended State aid payments have been requested;

(iii) The State shall be entitled, but not required, to negotiate, litigate, or settle the municipality’s real property tax claim described in subsection (b)(1)(B)(ii) of this section, with whatever assistance the State requires from the municipality in such negotiation, litigation, or settlement; and

(iv) In the event the State collects a greater amount of money under subsection (b)(1)(B)(ii) or (b)(1)(B)(iii) of this section than it paid to a municipality in extended State aid payments for the tax year 1978, the State Treasurer shall within 60 days return the excess payment to the municipality.

(2) Provided further, however, that with respect to real property withdrawn from railroad use during 1977 and thereafter, that if a municipality files with the State Treasurer and a copy thereof with the appropriate county board of taxation, a written request for a 2 year continuance of State aid payments for such real property (or a part thereof) on or before February 1 of the year following the initial notification by the Director of the Division of Taxation that such property has been withdrawn from railroad use or within 15 days after the effective date of this act, whichever comes later:

(A) Such reduction (and in the case of a request for extended State aid payments for only a portion of the property, such proportionate reduction) shall not become effective for 2 tax years following the year of initial notification to the municipality by the Director of the Division of Taxation that such real property is withdrawn from railroad use, or until such property is sold or conveyed for other than railroad use, whichever comes sooner;

(B) The municipality shall be obligated to pay to the State Treasurer within 60 days of the filing of the written request for extended State aid payments, or within 60 days of the receipt thereof, any and all payments made by or on behalf of the taxpayer, a trustee of the taxpayer, or any other representative of the taxpayer, for taxes which the municipality assessed on such real property for the tax years for which extended State aid payments were made;

(C) The State shall be entitled, but not required, to negotiate, litigate, or settle the municipality’s real property tax claim described in subsection (b)(2)(B) of this section, with whatever assistance the State requires from the municipality in such negotiation, litigation, or settlement; and

(D) In the event the State collects a greater amount of money under subsection (b)(2)(B) or (b)(2)(C) of this proviso that it paid to a municipality in extended State aid payment for a given tax year, the State Treasurer shall within 60 days return the excess payment to the municipality.

(c) For the year 1967 the amount of State aid payable to each municipality shall be increased by an amount equal to the difference between the railroad tax revenue derived by such municipality for the year 1965 and the base tax revenue for such municipality. For each year thereafter, such increase shall be reduced by 10% until such time as the aforesaid difference is eliminated; provided, however, if any real property in a municipality is placed in or withdrawn from railroad use after 1967, the annual increase provided in this subsection (c) shall be adjusted to reflect any such additions or withdrawals.

(d) The authorities of any taxing district desiring to contest the validity or amount of the assessment on any such additions or withdrawals may appeal to the tax court in the manner provided in sections 31 and 32 of P.L. 1941, c. 291 (C. 54:29A-31 and C. 54:29A-32).

For the purposes of this section, real property shall be deemed to be in railroad use if such property is used for the transportation of persons or freight by a railroad, regardless of the ownership or possession of the real property.

L.1966, c. 139, s. 21, eff. June 17, 1966. Amended by L.1977, c. 283, s. 1; L.1978, c. 16, s. 1; L.1979, c. 95, s. 1; L.1983, c. 36, s. 28, eff. Jan. 26, 1983.