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A202
ASSEMBLY, No. 202
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblywoman DAWN FANTASIA
District 24 (Morris, Sussex and Warren)
SYNOPSIS
���� Repeals "Statewide Non-Residential Development
Fee Act."
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act
concerning the �Statewide Non-Residential
Development Fee Act,� amending P.L.1985, c.222, P.L.2008, c.46, and repealing
various parts of the statutory law.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� Section 20 of P.L.1985,
c.222 (C.52:27D-320) is amended to read as follows:
���� 20.� There is established in
the Department of Community Affairs a separate trust fund, to be used for the
exclusive purposes as provided in this section, and which shall be known as the
"New Jersey Affordable Housing Trust Fund." �The fund shall be a
non-lapsing, revolving trust fund, and all monies deposited or received for
purposes of the fund shall be accounted for separately, by source and amount,
and remain in the fund until appropriated for such purposes. �The fund shall be
the repository of all State funds appropriated for affordable housing purposes,
including, but not limited to, the proceeds from the receipts of the additional
fee collected pursuant to paragraph (2) of subsection a. of section 3 of
P.L.1968, c.49 (C.46:15-7), proceeds from available receipts of the Statewide
non-residential development fees collected
[
pursuant
]
prior
to
[
section
35 of P.L.2008, c.46 (C.40:55D-8.4)
]
the date of enactment of P.L.��� , c.��� (pending before the Legislature as
this bill)
, monies lapsing or reverting from municipal development trust
funds, or other monies as may be dedicated, earmarked, or appropriated by the
Legislature for the purposes of the fund. �All references in any law, order,
rule, regulation, contract, loan, document, or otherwise, to the
"Neighborhood Preservation Nonlapsing Revolving Fund" shall mean the
"New Jersey Affordable Housing Trust Fund." The department shall
be permitted to utilize annually up to 7.5 percent of the monies available in
the fund for the payment of any necessary administrative costs related to the
administration of the "Fair Housing Act," P.L.1985, c.222
(C.52:27D-301 et al.), or any costs related to administration of P.L.2008, c.46
(C.52:27D-329.1 et al.).
���� a.���� Except as permitted
pursuant to subsection g. of this section,
[
and
by section 41 of P.L.2009, c.90 (C.52:27D-320.1),
]
the commissioner shall award
grants or loans from this fund for housing projects and programs in
municipalities whose housing elements have
obtained compliance
certification pursuant to section 3 of P.L.2024, c.2 (C.52:27D-304.1 et al.),
or in municipalities receiving State aid pursuant to P.L.1978, c.14
(C.52:27D-178 et seq.)
.
���� Of those monies deposited into
the "New Jersey Affordable Housing Trust Fund" that are derived from
municipal development fee trust funds, or from available collections of
Statewide non-residential development fees
collected prior to the date of
enactment of P.L.��� , c.��� (pending before the Legislature as this bill)
,
a priority for funding shall be established for projects in municipalities that
have
received compliance certification.
���� Programs and projects in any
municipality shall be funded only after receipt by the commissioner of a
written statement in support of the program or project from the municipal
governing body.
���� b.��� The commissioner shall
establish rules and regulations governing the qualifications of applicants, the
application procedures, and the criteria for awarding grants and loans and the
standards for establishing the amount, terms, and conditions of each grant or
loan.
���� c.���� For any period which
the commissioner may approve, the commissioner may assist affordable housing
programs that are located in municipalities
that have a pending request
for compliance certification; provided that the affordable housing program will
meet all or part of a municipal
low- and moderate-income housing
obligation.
���� d.��� Amounts deposited in the
"New Jersey Affordable Housing Trust Fund" shall be targeted to
regions based on the region's percentage of the State's low- and
moderate-income housing need as determined
pursuant to the low- and
moderate-income household growth over the prior 10 years, as calculated
pursuant to section 6 of P.L.2024, c.2 (C.52:27D-304.1 et al.).� Amounts in the
fund shall be applied for the following purposes in designated neighborhoods:
���� (1)�� Rehabilitation of
substandard housing units occupied or to be occupied by
low- and
moderate-income households;
���� (2)�� Creation of accessory
dwelling units to be occupied by
low- and moderate-income households;
���� (3)�� Conversion of
non-residential space to residential purposes; provided a substantial
percentage of the resulting housing units are to be occupied by low- and
moderate-income households;
���� (4)�� Acquisition of real
property, demolition and removal of buildings, or construction of new housing
that will be occupied by low- and moderate-income households, or any
combination thereof;
���� (5)�� Grants of assistance to
eligible municipalities for costs of necessary studies, surveys, plans, and
permits; engineering, architectural, and other technical services; costs of
land acquisition and any buildings thereon; and costs of site preparation, demolition,
and infrastructure development for projects undertaken pursuant to an approved
regional contribution agreement;
���� (6)�� Assistance to a local
housing authority, nonprofit or limited dividend housing corporation, or
association or a qualified entity acting as a receiver under P.L.2003, c.295
(C.2A:42-114 et al.) for rehabilitation or restoration of housing units which
it administers which: (a) are unusable or in a serious state of disrepair; (b)
can be restored in an economically feasible and sound manner; and (c) can be
retained in a safe, decent, and sanitary manner, upon completion of
rehabilitation or restoration; and
���� (7)�� Other housing programs
for low- and moderate-income housing, including, without limitation, (a)
infrastructure projects directly facilitating the construction of low- and
moderate-income housing not to exceed a reasonable percentage of the
construction costs of the low- and moderate-income housing to be provided
and (b) alteration of dwelling units occupied or to be occupied by households
of low- or moderate-income and the common areas of the premises in which
they are located in order to make them accessible to persons with disabilities.
���� e.���� Any grant or loan
agreement entered into pursuant to this section shall incorporate contractual
guarantees and procedures by which the division shall ensure that any unit of
housing provided for low- and moderate-income households shall continue to be
occupied by low- and moderate-income households for
a period that
conforms to the requirements of subsection f. of section 21 of P.L.1985, c.222
(C.52:27D-321) following the award of the loan or grant, except that the
division may approve a guarantee for a period of less duration where necessary
to ensure project feasibility.
���� f.���� Notwithstanding the
provisions of any other law, rule, or regulation to the contrary, in making
grants or loans under this section, the department shall not require that
tenants be certified as
low- or moderate-income or that contractual
guarantees or deed restrictions be in place to ensure continued
low- and
moderate-income occupancy as a condition of providing housing assistance
from any program administered by the department, when that assistance is
provided for a project of moderate rehabilitation if the project: (1) contains
30 or fewer rental units; and (2) is located in a census tract in which the
median household income is 60 percent or less of the median income for the
housing region in which the census tract is located, as determined for a three
person household by the department in accordance with the latest federal
decennial census. A list of eligible census tracts shall be maintained by the
department and shall be adjusted upon publication of median income figures by
census tract after each federal decennial census.
���� g.��� In addition to other
grants or loans awarded pursuant to this section, and without regard to any
limitations on such grants or loans for any other purposes herein imposed, the
commissioner shall annually allocate such amounts as may be necessary in the commissioner's
discretion, and in accordance with section 3 of P.L.2004, c.140
(C.52:27D-287.3), to fund rental assistance grants under the program created
pursuant to P.L.2004, c.140 (C.52:27D-287.1 et al.).� Such rental assistance
grants shall be deemed necessary and authorized pursuant to P.L.1985, c.222
(C.52:27D-301 et al.), in order to meet the housing needs of certain low-income
households who may not be eligible to occupy other housing produced pursuant to
P.L.1985, c.222 (C.52:27D-301 et al.).
���� h.��� The department and the
State Treasurer shall submit the "New Jersey Affordable Housing Trust
Fund" for an audit annually by the State Auditor or State Comptroller, at
the discretion of the Treasurer. In addition, the department shall prepare
an annual report for each fiscal year, and submit it by November 30th of each
year to the Governor and the Legislature, and the Joint Committee on Housing
Affordability, or its successor, and post the information to its Internet
website, of all activity of the fund, including details of the grants and loans
by number of units, number and income ranges of recipients of grants or loans,
location of the housing renovated or constructed using monies from the fund,
the number of units upon which affordability controls were placed, and the
length of those controls. �The report also shall include details pertaining to
those monies allocated from the fund for use by the State rental assistance
program pursuant to section 3 of P.L.2004, c.140 (C.52:27D-287.3) and
subsection g. of this section.
���� i.����
[
The
commissioner may award or grant the amount of any appropriation deposited in
the "New Jersey Affordable Housing Trust Fund" pursuant to section 41
of P.L.2009, c.90 (C.52:27D-320.1) to municipalities pursuant to the provisions
of section 39 of P.L.2009, c.90 (C.40:55D-8.8).
]
(Deleted by amendment, P.L.��� ,
c.��� (pending before the Legislature as this bill)
(cf: P.L.2024, c.2, s.26)
���� 2.��� Section 8 of P.L.2008,
c.46 (C.52:27D-329.2) is amended to read as follows:
���� 8.��� a.� (1)� A municipality
that is in the process of seeking compliance certification, has obtained
compliance certification, is a qualified urban aid municipality, as
determined pursuant to paragraph (1) of subsection c. of section 7 of P.L.2024,
c.2 (C.52:27D-304.1 et al.), or that has been so authorized by a court of
competent jurisdiction, and which has adopted a municipal development fee
ordinance shall be authorized to impose and collect development fees from
developers of residential property, in accordance with rules promulgated by the
department. �Each amount collected shall be deposited and shall be accounted
for separately, by payer and date of deposit.
���� (2)�� No later than 180 days
following the enactment of P.L.2024, c.2 (C.52:27D-304.1 et al.), any
municipality that is or has been authorized to impose and collect development
fees from developers of residential property, or payments in lieu of
constructing affordable housing, shall provide the Department of Community
Affairs with a detailed accounting of all such fees that have been collected
and expended since the inception of the municipal authorization to collect the
fees.
���� (3)�� Beginning with the year
after the enactment of P.L.2024, c.2 (C.52:27D-304.1 et al.), by February
[
15
]
15th
,
every municipality that is or has been authorized to impose and collect
development fees from developers of residential property, or payments in lieu
of constructing affordable housing, shall provide the Department of Community
Affairs with a detailed accounting of all such fees that have been collected
and expended the previous year.
���� (4)�� A municipality may not
spend or commit to spend any affordable housing development fees, including
Statewide non-residential fees collected and deposited into the municipal
affordable housing trust fund
collected prior to the date of enactment of
P.L.��� , c.��� (pending before the Legislature as this bill)
, without
first obtaining the approval of the expenditure as part of its compliance
certification or by the department.� A municipality shall include in its
housing element and fair share plan adopted pursuant to section 3 of P.L.2024,
c.2 (C.52:27D-304.1 et al.) a spending plan for current funds in the municipal
affordable housing trust fund and projected funds through the current round. �Review
of that spending plan for consistency with applicable law and the
municipality�s Housing Element and Fair Share Plan shall be part of the process
specified in section 3 of P.L.2024, c.2 (C.52:27D-304.1 et al.).� The
department shall promulgate updated regulations no later than nine months
following the effective date of P.L.2024, c.2 (C.52:27D-304.1 et al.) regarding
the establishment, administration, reporting, and enforcement of the
expenditure of affordable housing development fees by municipalities, which
shall include establishing an expedited process for approving spending plan
expenditures for emergent opportunities to create affordable housing after a
municipality has obtained compliance certification and procedures for
monitoring the collection and expenditure of trust funds.� The department shall
develop and publish on the department�s Internet website a detailed summary of
the municipal affordable housing trust fund expenditures for each municipality,
and shall update each summary on an annual basis.� As part of the regulations
adopted pursuant to this section and section 10 of P.L.2008, c.46
(C.52:27D-329.4), the department shall adopt reporting requirements applicable
to municipal affordable housing trust funds to facilitate fulfillment of the
department�s obligations pursuant to this section.� Municipalities may continue
to rely on regulations on development fees and spending plans previously
adopted by the council until new rules and regulations are adopted by the
department.� The department shall have jurisdiction regarding the enforcement
of these regulations, provided that any municipality which is not in compliance
with the regulations adopted by the department may be subject to forfeiture of
any or all funds remaining within its municipal trust fund.� Any funds so
forfeited shall be deposited into the "New Jersey Affordable Housing Trust
Fund" established pursuant to section 20 of P.L.1985, c.222
(C.52:27D-320).
���� b.��� A municipality shall
deposit all fees collected, whether or not such collections were derived from
fees imposed upon non-residential or residential construction into a trust fund
dedicated to those purposes as required under this section, and such additional
purposes as may be approved by the department.
���� c.���� (1)� A municipality,
other than a qualified urban aid municipality, as determined pursuant to
paragraph (1) of subsection c. of section 7 of P.L.2024, c.2 (C.52:27D-304.1 et
al.), may only spend development fees for an activity approved by the
department to address the municipal fair share obligation, or approved as part
of compliance certification.
���� (2)�� Municipal development
trust funds shall not be expended unless the municipality has immunity from
exclusionary zoning
litigation at the time of the
expenditure, or said municipality has previously collected such funds while
under the protection of presumptive validity or immunity from exclusionary
zoning litigation and in accordance with an approved spending plan.� However,
municipal development trust funds may be expended by a municipality if the
municipality is a qualified urban aid municipality, as determined pursuant to
paragraph (1) of subsection c. of section 7 of P.L.2024, c.2 (C.52:27D-304.1 et
al.), with a development fee ordinance and spending plan approved by the
department or a court of competent jurisdiction, regardless of whether this
approval occurs prior to or subsequent to the effective date of P.L.2024, c.2
(C.52:27D-304.1 et al.).� Municipal development fee trust funds
shall
not be expended:
���� (a)�� to reimburse
municipalities for activities which occurred prior to the authorization of a
municipality to collect development fees; or
���� (b)�� (i)� on administrative
costs, attorney fees or court costs to obtain a judgment of repose; (ii) to
contest a determination of the municipality�s fair share obligation; or (iii)
on costs of any challenger in connection to a challenge to the municipality�s
obligation, housing element, or fair share plan.
���� (3)�� A municipality shall set
aside a portion of its development fee trust fund for the purpose of providing
affordability assistance to low- and moderate-income households in affordable
units included in a municipal fair share plan, in accordance with rules of the
department.
���� (a)�� Affordability assistance
programs may include down payment assistance, security deposit assistance, low
interest loans, common maintenance expenses for units located in condominiums,
rental assistance, and any other program authorized by the department.
���� (b)�� Affordability assistance
to households earning 30 percent or less of median income may include buying
down the cost of low-income units in a municipal fair share plan to make them
affordable to households earning 30 percent or less of median income.� The use
of development fees in this manner shall not entitle a municipality to bonus
credits except as may otherwise be allowed by applicable precedent.
���� (4)�� A municipality may
contract with a private or public entity to administer any part of its housing
element and fair share plan, including the requirement for affordability
assistance, or any program or activity for which the municipality expends
development fee proceeds, in accordance with rules of the department.
���� (5)�� Not more than 20 percent
of the revenues collected from development fees shall be expended on
administration, in accordance with rules of the department.� Such
administration may include expending a portion of its affordable housing trust
fund on actions and efforts reasonably related to the determination of its fair
share obligation and the development of its housing element and fair share plan
pursuant to paragraphs (1) and (2) of subsection f. of section 3 of P.L.2024,
c.2 (C.52:27D-304.1 et al.), and for expenses that are reasonably necessary for
compliance with the processes of the program, including but not limited to, the
costs to the municipality of resolving a challenge under the program.
���� d.��� The department shall
establish a time by which all development fees collected within a calendar year
shall be expended; provided, however, that all fees shall be committed for
expenditure within four years from the date of collection. A municipality
that fails to commit to expend the balance required in the development fee
trust fund by the time set forth in this section shall be required by the
council to transfer the remaining unspent balance at the end of the four-year
period to the "New Jersey Affordable Housing Trust Fund," established
pursuant to section 20 of P.L.1985, c.222 (C.52:27D-320), as amended by
P.L.2008, c.46 (C.52:27D-329.1 et al.), to be used in the housing region of the
transferring municipality for the authorized purposes of that fund.
���� e.���� Notwithstanding any
provision of this section, or regulations of the department, a municipality
shall not collect a development fee from a developer whenever that developer is
providing for the construction of affordable units, either on-site or elsewhere
within the municipality.
����
[
This section shall not apply to
the collection of a Statewide development fee imposed upon non-residential
development pursuant to sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1
through C.40:55D-8.7) by the State Treasurer, when such collection is not
authorized to be retained by a municipality.
]
(cf: P.L.2024, c.2, s.30)
���� 3.��� The following sections
are repealed:
���� Sections 32 through 38 of
P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7);
���� Section 39 of P.L.2009, c.90
(C.40:55D-8.8);
���� Section 41 of P.L.2009, c.90
(C.52:27D-320.1); and
���� Section 14 of P.L.2008, c.46
(C.52:27D-329.8).
���� 4.��� This act shall take
effect immediately.
STATEMENT
���� This bill repeals the
�Statewide Non-Residential Development Fee Act,� enacted as sections 32 through
38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7), which established a
Statewide non-residential development fee charged by all municipalities for
non-residential construction or improvements, at a rate of two and one-half
percent of the equalized assessed value of land and improvements for all new
non-residential construction on unimproved lots, and at a rate of two and
one-half percent of the increase in equalized assessed value for additions to
existing structures to be used for non-residential purposes.
���� The bill also repeals and
amends several statutes that reference the �Statewide Non-Residential
Development Fee Act.��