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June 11, 2008

I.  A-1645/S-770 - Mandatory Appointment of Qualified Purchasing Agent
II.  SCS for S-241/394/1098 and 710 - Property Tax Exemption for Renewal Energy Systems




Dear Mayor:

I.  A-1645/S-770, Mandatory Appointment of Qualified Purchasing Agent

Please see the enclosed letter from Commissioner Doria to the sponsors of QPA legislation.

The Commissioner’s letter further confirms our testimony and statement regarding the unfunded mandates contained in the legislation.

Again, I would ask you to personally contact your Assembly and Senate representative and the Governor’s office to impress upon them the daunting economic challenges you are facing in your attempt to do more with less. These challenges do not involve any perceived crisis in purchasing procedures that would warrant changing an existing local option to mandate you appoint a QPA.

A-1645/S-770 overrides your discretion and places an unfunded mandate upon municipalities through the burden of training costs and ultimately the salary increases that will follow. This is not in the best interest of property taxpayers.

II.        SCS for S-241/394/1098 and 710 - Property Tax Exemption for Renewal Energy Systems

Tomorrow, the full Senate will consider a set of bills which exempt certain renewable energy systems from real property taxation.

The renewal energy system is equipment installed on a building—whether residential, commercial, industrial or mixed use—as an accessory use that produces general energy needs for that building.  It is important to understand the structures to which this tax exemption applies. These are not just residential houses, but also warehouses, shopping centers, etc.

It is our understanding from reading this substitute that once the local unit certifies the property as a renewable energy system, local discretion stops there as the property is then automatically exempted from property taxation under Title 54. The local unit in effect, has no further discretion regarding the property tax exemption.

This mandatory exemption results in tax consequences for local units.  It reduces the municipal tax base and shifts the burden onto other property taxpayers in the municipality through higher tax rates.  It is an indirect subsidy that can only be supported through State reimbursement to municipalities.

Therefore, the League opposes Senate Committee Substitute for S-241/398/1098/710 and urges you to also express opposition to your Senate and Assembly representatives.  Please urge them to consider the bill’s impact during these tight budgetary times.

For further information on either communication, please contact Helen Yeldell at (609) 695-3481 ext. 112.

Thank You.

Very truly yours,

William G. Dressel, Jr.
Executive Director


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