Authorizes municipal assessment of development impact fees following State guidelines and makes an appropriation.

S3227

SENATE, No. 3227

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 2, 2026

Sponsored by:

Senator� SHIRLEY K. TURNER

District 15 (Hunterdon and Mercer)

Co-Sponsored by:

Senator Greenstein

SYNOPSIS

���� Authorizes municipal assessment of development impact
fees following State guidelines and makes an appropriation.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

authorizing the assessment of development impact fees, amending and
supplementing P.L.1975, c.291, supplementing P.L.1975, c.212 (C.18A:7A-1 et
seq.), amending P.L.1975, c.217, and making an appropriation.

����
Be It Enacted

by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� (New section)� Sections
1, 2, 6 through 9, 11, 14 through 16 and 19 through 22 shall be known and may
be cited as the "Municipal Development Impact Fee Authorization Act."

���� 2.��� (New section)� The
Legislature finds and declares that:

���� a.���� Over the past number of
years, the State of New Jersey has experienced unprecedented economic growth
which has resulted in substantial building and development activity throughout
the State;

���� b.��� While the building boom
of the 1980's was a positive phenomenon to the extent that it was associated
with the growth of jobs and a higher standard of living, the rapid rate of
development in those years also created major public policy challenges, in particular,
upgrading the existing infrastructure to support that growth and allow for
future development;

���� c.���� Of the considerable
impacts associated with new development, the burden it places on an older, and
often inadequate infrastructure is one which the Legislature views with
particular concern in light of the potential dangers associated with
deteriorating water supply facilities and sewer systems and the pressure which
that development places on a long-neglected road network which already handles
dangerously high levels of traffic;

���� d.��� The burden placed on
older and often inadequate public school facilities is also one which the
Legislature views with particular concern.� The increased number of students
generated by new development has a considerable impact on the ability of local
school districts to provide a thorough and efficient education for their
students; and

���� e.���� It is therefore a valid
public policy of the State and in the public interest that municipalities be
enabled to levy impact fees on new development in order to make those
improvements in the local infrastructure or to build new or expand existing
school facilities which are necessary to accommodate the new development.

���� 3.��� Section 3 of P.L.1975,
c.291 (C.40:55D-3) is amended to read as follows:

���� 3.��� For the purposes of this
act, unless the context clearly indicates a different meaning:

���� The term "shall"
indicates a mandatory requirement, and the term "may" indicates a
permissive action.

���� "Administrative
officer" means the clerk of the municipality, unless a different municipal
official or officials are designated by ordinance or statute.

���� "Agricultural
restriction" means an "agricultural deed restriction for farmland
preservation purposes" as defined in section 3 of P.L.1983, c.32
(C.4:1C-13).

���� "Agricultural land"
means "farmland" as defined pursuant to section 3 of P.L.1999, c.152
(C.13:8C-3).

���� "Applicant" means a
developer submitting an application for development.

���� "Application for
development" means the application form and all accompanying documents
required by ordinance for approval of a subdivision plat, site plan, planned
development, cluster development, conditional use, zoning variance or direction
of the issuance of a permit pursuant to section 25 or section 27 of P.L.1975,
c.291 (C.40:55D-34 or C.40:55D-36).

���� "Approving
authority" means the planning board of the municipality, unless a
different agency is designated by ordinance when acting pursuant to the
authority of P.L.1975, c.291 (C.40:55D-1 et seq.).

���� "Board of
adjustment" means the board established pursuant to section 56 of
P.L.1975, c.291 (C.40:55D-69).

���� "Building" means a
combination of materials to form a construction adapted to permanent,
temporary, or continuous occupancy and having a roof.

���� "Cable television
company" means a cable television company as defined pursuant to section 3
of P.L.1972, c.186 (C.48:5A-3).

���� "Capital
improvement" means
[
a
governmental acquisition of real property or major construction project
]

any
facility for the provision of public services with a life expectancy of five or
more years, owned and operated or leased and operated by or on behalf of the
State or a political subdivision thereof
.

���� "Circulation" means
systems, structures and physical improvements for the movement of people,
goods, water, air, sewage or power by such means as streets, highways,
railways, waterways, towers, airways, pipes and conduits, and the handling of people
and goods by such means as terminals, stations, warehouses, and other storage
buildings or transshipment points.

���� "Cluster
development" means a contiguous cluster or noncontiguous cluster that is
not a planned development.

����
"Commission"
means the Development Impact Fee Review and Advisory Commission established
pursuant to section 19 of
P.L. , c. (C. ) (pending
before the Legislature as this bill).

���� "Common open space"
means an open space area within or related to a site designated as a
development, and designed and intended for the use or enjoyment of residents
and owners of the development. Common open space may contain such complementary
structures and improvements as are necessary and appropriate for the use or
enjoyment of residents and owners of the development.

���� "Conditional use"
means a use permitted in a particular zoning district only upon a showing that
such use in a specified location will comply with the conditions and standards
for the location or operation of such use as contained in the zoning ordinance,
and upon the issuance of an authorization therefor by the planning board.

���� "Conservation
restriction" means a "conservation restriction" as defined in
section 2 of P.L.1979, c.378 (C.13:8B-2).

���� "Contiguous cluster"
means a contiguous area to be developed as a single entity according to a plan
containing a section or sections to be developed for residential purposes,
nonresidential purposes, or a combination thereof, at a greater concentration
of density or intensity of land use than authorized within the section or
sections under conventional development, in exchange for the permanent
preservation of another section or other sections of the area as common or
public open space, or for historic or agricultural purposes, or a combination
thereof.

���� "Conventional" means
development other than cluster development or planned development.

���� "County agriculture
development board" or "CADB" means a county agriculture
development board established by a county pursuant to the provisions of section
7 of P.L.1983, c.32

(C.4:1C-14).

���� "County master plan"
means a composite of the master plan for the physical development of the county
in which the municipality is located, with the accompanying maps, plats, charts
and descriptive and explanatory matter adopted by the county planning board
pursuant to R.S.40:27-2 and R.S.40:27-4.

���� "County planning
board" means the county planning board, as defined in section 1 of
P.L.1968, c.285 (C.40:27-6.1), of the county in which the land or development
is located.

(cf: P.L.2013, c.106, s.2)

���� 4.��� Section 3.1 of P.L.1975,
c.291 (C.40:55D-4) is amended to read as follows:

���� 3.1. "Days" means
calendar days.

���� "Density" means the
permitted number of dwelling units per gross area of land that is the subject
of an application for development, including noncontiguous land, if authorized
by municipal ordinance or by a planned development.

���� "Developer" means
the legal or beneficial owner or owners of a lot or of any land proposed to be
included in a proposed development, including the holder of an option or
contract to purchase, or other person having an enforceable proprietary interest
in such land.

���� "Development" means
the division of a parcel of land into two or more parcels, the construction,
reconstruction, conversion, structural alteration, relocation or enlargement of
any building or other structure, or of any mining excavation or landfill, and
any use or change in the use of any building or other structure, or land or
extension of use of land, for which permission may be required pursuant to
P.L.1975, c.291 (C.40:55D-1 et seq.).

���� "Development
potential" means the maximum number of dwelling units or square feet of
nonresidential floor area that may be constructed on a specified lot or in a
specified zone under the master plan and land use regulations in effect on the
date of the adoption of the development transfer ordinance or on the date of
the adoption of the ordinance authorizing noncontiguous cluster, and in
accordance with recognized environmental constraints.

���� "Development
regulation" means a zoning ordinance, subdivision ordinance, site plan
ordinance, official map ordinance or other municipal regulation of the use and
development of land, or amendment thereto adopted and filed pursuant to
P.L.1975, c.291 (C.40:55D-1 et seq.).

���� "Development
restriction" means an agricultural restriction, a conservation
restriction, or a historic preservation restriction.

���� "Development
transfer" or "development potential transfer" means the
conveyance of development potential, or the permission for development, from
one or more lots to one or more other lots by deed, easement, or other means as
authorized by ordinance.

���� "Development transfer
bank" means a development transfer bank established pursuant to section 22
of P.L.2004, c.2 (C.40:55D-158) or the State TDR Bank.

���� "Drainage" means the
removal of surface water or groundwater from land by drains, grading or other
means and includes control of runoff during and after construction or
development to minimize erosion and sedimentation, to assure the adequacy of
existing and proposed culverts and bridges, to induce water recharge into the
ground where practical, to lessen nonpoint pollution, to maintain the integrity
of stream channels for their biological functions as well as for drainage, and
the means necessary for water supply preservation or prevention or alleviation
of flooding.

���� "Electric vehicle supply
equipment" or "electric vehicle service equipment" or
"EVSE" means the equipment, including the cables, cords, conductors,
connectors, couplers, enclosures, attachment plugs, power outlets, power electronics,
transformer, switchgear, switches and controls, network interfaces, and point
of sale equipment and associated apparatus designed and used for the purpose of
transferring energy from the electric supply system to a plug-in electric
vehicle.� "EVSE" may deliver either alternating current or,
consistent with fast charging equipment standards, direct current electricity.�
"EVSE" is synonymous with "electric vehicle charging
station."�

���� "Environmental
commission" means a municipal advisory body created pursuant to P.L.1968,
c.245 (C.40:56A-1 et seq.).

���� "Erosion" means the
detachment and movement of soil or rock fragments by water, wind, ice and
gravity.

����
"Facility
expansion" means the expansion of the capacity of an existing capital
improvement in order that the improvement may serve new development.

���� "Final approval"
means the official action of the planning board taken on a preliminarily
approved major subdivision or site plan, after all conditions, engineering
plans and other requirements have been completed or fulfilled and the required improvements
have been installed or guarantees properly posted for their completion, or
approval conditioned upon the posting of such guarantees.

���� "Floor area ratio"
means the sum of the area of all floors of buildings or structures compared to
the total area of land that is the subject of an application for development,
including noncontiguous land, if authorized by municipal ordinance or by a
planned development.

���� "General development
plan" means a comprehensive plan for the development of a planned
development, as provided in section 4 of P.L.1987, c.129 (C.40:55D-45.2).

���� "Governing body"
means the chief legislative body of the municipality.� In municipalities having
a board of public works, "governing body" means such board.

���� "Historic district"
means one or more historic sites and intervening or surrounding property
significantly affecting or affected by the quality and character of the
historic site or sites.

���� "Historic preservation
restriction" means a "historic preservation restriction" as
defined in section 2 of P.L.1979, c.378 (C.13:8B-2).

���� "Historic site"
means any real property, man-made structure, natural object or configuration or
any portion or group of the foregoing of historical, archeological, cultural,
scenic or architectural significance.

����
"Impact fee"
means cash or in-kind payments required to be paid by a developer as a
condition for approval of a� major subdivision or major site plan for the
developer's proportional share of the cost of providing new or expanded
reasonable and necessary capital improvements located outside the property
limits of the subdivision or development but reasonably related to the
subdivision or development based upon the need for the improvement created by,
and the benefits conferred upon, the subdivision or development, based on fair
and reasonable standards provided to municipalities by the commission as part
of the technical assistance required pursuant to subsection a. of section 19 of
P.L.����� , c.����� (C.������� ) (pending before the Legislature as this bill).

����
"Individual unit of
development" means a dwelling unit in the case of a residential
development, a square foot in the case of a non-residential development or any
other standard employed by a municipality for different categories of
development as a basis upon which to establish a service unit.

���� "Inherently beneficial
use" means a use which is universally considered of value to the community
because it fundamentally serves the public good and promotes the general
welfare.� Such a use includes, but is not limited to, a hospital, school, child
care center, group home, or a wind, solar or photovoltaic energy facility or
structure.

���� "Instrument" means
the easement, credit, or other deed restriction used to record a development
transfer.

���� "Interested party"
means: (a) in a criminal or quasi-criminal proceeding, any citizen of the State
of New Jersey; and (b) in the case of a civil proceeding in any court or in an
administrative proceeding before a municipal agency, any person, whether
residing within or without the municipality, whose right to use, acquire, or
enjoy property is or may be affected by any action taken under P.L.1975, c.291
(C.40:55D-1 et seq.), or whose rights to use, acquire, or enjoy property under
P.L.1975, c.291 (C.40:55D-1 et seq.), or under any other law of this State or
of the United States have been denied, violated or infringed by an action or a
failure to act under P.L.1975, c.291 (C.40:55D-1 et seq.).

���� "Land" includes
improvements and fixtures on, above or below the surface.

���� "Local utility"
means any sewerage authority created pursuant to the "sewerage authorities
law," P.L.1946, c.138 (C.40:14A-1 et seq.); any utilities authority
created pursuant to the "municipal and county utilities authorities law,"
P.L.1957, c.183 (C.40:14B-1 et seq.); or any utility, authority, commission,
special district or other corporate entity not regulated by the Board of
Regulatory Commissioners under Title 48 of the Revised Statutes that provides
gas, electricity, heat, power, water or sewer service to a municipality or the
residents thereof.

���� "Lot" means a
designated parcel, tract or area of land established by a plat or otherwise, as
permitted by law and to be used, developed or built upon as a unit.

(cf: P.L.2021, c.171, s.5)

���� 5.��� Section 3.4 of P.L.1975,
c.291 (C.40:55D-7) is amended to read as follows:

���� 3.4. "Sedimentation"
means the deposition of soil that has been transported from its site of origin
by water, ice, wind, gravity or other natural means as a product of erosion.

���� "Sending zone" means
an area or areas designated in a master plan and zoning ordinance, adopted
pursuant to P.L.1975, c.291 (C.40:55D-1 et seq.), within which development may
be restricted and which is otherwise consistent with the provisions of section
8 of P.L.2004, c.2 (C.40:55D-144).

����
"Service area"
means that area to be served by the capital improvement or facility expansion
as designated in the capital improvement program adopted by a municipality
under section 11 of P.L.���� , c.��� (C.������� ) (pending before the Legislature
as this bill).

����
"Service unit"
means a standardized measure of consumption, use, generation or discharge
attributable to an individual unit of development calculated in accordance with
generally accepted engineering or planning standards for a particular category
of capital improvements or facility expansions.

���� "Site plan" means a
development plan of one or more lots on which is shown (1) the existing and
proposed conditions of the lot, including but not necessarily limited to
topography, vegetation, drainage, flood plains, marshes and waterways, (2) the
location of all existing and proposed buildings, drives, parking spaces,
walkways, means of ingress and egress, drainage facilities, utility services,
landscaping, structures and signs, lighting, screening devices, and (3) any
other information that may be reasonably required in order to make an informed
determination pursuant to an ordinance requiring review and approval of site
plans by the planning board adopted pursuant to article 6 of
[
this act
]

P.L.1975,
c.291 (C.40:55D-1 et seq.)
.

���� "Standards of
performance" means standards (1) adopted by ordinance pursuant to
subsection
[
52d.
]

d. of
section 52 of P.L.1975, c.291 (C.40:55D-65)
regulating noise levels, glare,
earthborn or sonic vibrations, heat, electronic or atomic radiation, noxious
odors, toxic matters, explosive and inflammable matters, smoke and airborne
particles, waste discharge, screening of unsightly objects or conditions and
such other similar matters as may be reasonably required by the municipality or
(2) required by applicable federal or State laws or municipal ordinances.

���� "State Transfer of
Development Rights Bank," or "State TDR Bank," means the bank
established pursuant to section 3 of P.L.1993, c.339 (C.4:1C-51).

���� "Street" means any
street, avenue, boulevard, road, parkway, viaduct, drive or other way (1) which
is an existing State, county or municipal roadway, or (2) which is shown upon a
plat heretofore approved pursuant to law, or (3) which is approved by official
action as provided by this act, or (4) which is shown on a plat duly filed and
recorded in the office of the county recording officer prior to the appointment
of a planning board and the grant to such board of the power to review plats;
and includes the land between the street lines, whether improved or unimproved,
and may comprise pavement, shoulders, gutters, curbs, sidewalks, parking areas
and other areas within the street lines.

���� "Structure" means a
combination of materials to form a construction for occupancy, use or
ornamentation whether installed on, above, or below the surface of a parcel of
land.

���� "Subdivision" means
the division of a lot, tract or parcel of land into two or more lots, tracts,
parcels or other divisions of land for sale or development.� The following
shall not be considered subdivisions within the meaning of this act, if no new
streets are created: (1) divisions of land found by the planning board or
subdivision committee thereof appointed by the chairman to be for agricultural
purposes where all resulting parcels are 5 acres or larger in size, (2)
divisions of property by testamentary or intestate provisions, (3) divisions of
property upon court order, including but not limited to judgments of
foreclosure, (4) consolidation of existing lots by deed or other recorded
instrument and (5) the conveyance of one or more adjoining lots, tracts or
parcels of land, owned by the same person or persons and all of which are found
and certified by the administrative officer to conform to the requirements of
the municipal development regulations and are shown and designated as separate
lots, tracts or parcels on the tax map or atlas of the municipality.� The term
"subdivision" shall also include the term "resubdivision."

���� "Transcript" means a
typed or printed verbatim record of the proceedings or reproduction thereof.

���� "Variance" means
permission to depart from the literal requirements of a zoning ordinance
pursuant to sections 47
[
and
]
,

subsections
[
29.2b.,
57c. and 57d.
]

b. of section 29.2, and subsections c. and d. of section 57
of
[
this act
]

P.L.1975,
c.291 (C.40:55D-60, 40:55D-40 and 40:55D-70)
.

���� "Wind, solar or
photovoltaic energy facility or structure" means a facility or structure
for the purpose of supplying electrical energy produced from wind, solar, or
photovoltaic technologies, whether such facility or structure is a principal use,
a part of the principal use, or an accessory use or structure.

���� "Zoning permit"
means a document signed by the administrative officer (1) which is required by
ordinance as a condition precedent to the commencement of a use or the
erection, construction, reconstruction, alteration, conversion or installation
of a structure or building and (2) which acknowledges that such use, structure
or building complies with the provisions of the municipal zoning ordinance or
variance therefrom duly authorized by a municipal agency pursuant to sections
47 and 57 of
[
this
act
]

P.L.1975,
c.291 (C.40:55D-60 and 40:55-70)
.

(cf: PL.2009, c.146, s.2)

���� 6.��� (New section)� a.� The
governing body of a municipality wherein the planning board has adopted a
master plan pursuant to section 19 of P.L.1975, c.291 (C.40:55D-28) and a
capital improvement program pursuant to section 11 of P.L.� , c.� (C.��� )
(pending before the Legislature as this bill) may adopt an ordinance
establishing an impact fee.

���� An impact fee ordinance
adopted pursuant to this section may apply to all major site plans or
subdivisions submitted within the municipality.� Alternatively, any
municipality may include within its ordinance a threshold limiting the
assessment of an impact fee to developments of above a certain size.

���� Any impact fee ordinance
adopted pursuant to this section shall include detailed standards and
guidelines regarding:� (1) the definition of a service unit, including specific
measures of consumption, use, generation or discharge attributable to particular
land uses, densities and characteristics of development; and (2) the specific
purposes for which the impact fee revenues may be expended.

���� An impact fee ordinance shall
also include a delineation of service areas for each capital improvement whose
upgrading or expansion is to be funded out of impact fee revenues and a fee
schedule which clearly sets forth the amount of the fee to be charged for each
service unit.

���� In addition, the impact fee
ordinance shall include a methodology for calculating a credit to be allowed as
an offset against the impact fee otherwise payable to reflect that portion of
the property taxes on the proposed development which is attributable to net
debt service and capital outlay, as the case may be, committed prior to the
submission of the application for preliminary approval toward financing capital
improvements or facility expansions.

���� b.��� An impact fee may be
imposed by a municipality under this section in order to generate revenue for
funding or recouping the costs of new capital improvements or facility
expansions necessitated by new development.� Improvements and expansions for
which an impact fee is to be imposed shall bear a reasonable relationship to
needs created by the new development.� An impact fee authorized under this
section may include contributions for:� any transportation improvement
necessitated by a new development in a county which is not covered by a
transportation development district created pursuant to the "New Jersey
Transportation Development District Act of 1989," P.L.1989, c.100
(C.27:1C-1 et al.); water treatment and distribution; wastewater treatment and
sewerage; flood control and stormwater management; municipal parks and
recreation facilities; public safety and related facilities; and educational
facilities necessitated by residential development; provided, however, that a
municipality may levy an impact fee for any of the above areas only if it has
previously adopted the appropriate plan element or elements set forth in
paragraphs (3) through (16) of subsection b. of section 19 of P.L.1975, c.291
(C.40:55D-28) in order to justify the projections of need for the capital
improvement or facility expansion outlined in the capital improvement program;
and provided further that any impact fee imposed to finance educational
facilities be based upon a long-range facilities plan approved by the
Commissioner of Education pursuant to law or regulation.

���� No municipal impact fee
ordinance shall take effect unless it has been� certified� pursuant to
subsection b. of section 19 of P.L. , c. (C. ) (pending
before the Legislature as this bill).� A municipality shall not submit an
ordinance to the commission for certification until 150 days� have� elapsed
following� the� enactment of� P.L.��� , c.��� (C.� ������) (pending before the
Legislature as this bill).

���� For the purposes of P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill), sewer or
water connection fees, charges or assessments by a municipal or county
utilities authority or municipal water or sewer department shall be considered
an impact fee and shall be governed by those laws which authorize the
assessment of those fees.� No other charges may be assessed hereunder to
finance any capital improvements otherwise authorized under the �sewerage
authorities law,� P.L.1946, c.138 (C.40:14A-1 et seq.), the �municipal and
county utilities authorities law,� P.L.1957, c.183 (C.40:14B-1 et seq.), the
�Municipal and County Sewerage Act,� (N.J.S.40A:26A-1 et seq.) or the �County
and Municipal Water Supply Act,� (N.J.S.40A:31-1 et seq.).

���� c.���� No impact fee shall be
assessed against� any low income housing or moderate income housing as defined
under P.L.1985, c.222 (C.52:27D-301 et al.) or within any environmental
opportunity zone established pursuant to section 4 of P.L.1995, c.413
(C.54:4-3.153).� In the case of low income housing or moderate income housing
situated within an inclusionary development, an impact fee may be assessed
against the market priced units within the inclusionary development; however,
the fees which would otherwise be assessed against the low or moderate income
units, as the case may be, shall not be passed along to the purchasers of
market priced units.

���� d.��� An impact fee levied by
a municipality may be used to fund amortized or lump-sum charges incurred by
the municipality, capital recovery fees and contributions in aid of
construction.� Projected interest charges and other finance costs may be
included in determining the amount of impact fees only if the impact fees are
used for the payment of principal and interest on obligations issued by or on
behalf of the municipality to finance the capital improvements or facility
expansions identified in the capital improvement program adopted pursuant to
section 11 of P.L. , c. (C. ) (pending
before the Legislature as this bill) and are not used to reimburse bond funds
expended for facilities not identified in the capital improvement program or
for any other purpose.

���� If the municipality determines
that there will be any interest or other charges incurred by, or to be incurred
by, the municipality in constructing any capital improvement or facility
expansion prior to receiving payment of any impact fee assessed against a
developer, then the municipality may charge or factor into the calculation of
the impact fee the interest or other charges, provided, however, that all of
the interest, other charges and the developer's impact fee payment for capital
improvements or facility expansion shall not exceed 120% of the cost of the
capital improvement or facility expansion being borne by the developer.

���� e.���� An ordinance� adopted�
in� accordance� with�
P.L. , c. (C. �
) (pending before the Legislature as this bill)
shall provide for the
assessment of impact fees at the time of preliminary development approval.�
Impact fees shall be paid on a per-unit basis as follows:� 50% prior to
receiving a construction permit for a given unit pursuant to section 12 of
P.L.1975, c.217 (C.52:27D-130) and the remaining 50% prior to receiving a
certificate of occupancy for a given unit pursuant to section 15 of P.L.1975,
c.217 (C.52:27D-133).

���� f.���� Each municipality which
assesses an impact fee pursuant to an ordinance adopted and certified pursuant
to P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill)
shall prepare and submit a report to the commission January 31 next following
the adoption of the ordinance and every 12 months thereafter on a form adopted
and circulated by the commission, listing each development which has been
assessed an impact fee, the types of capital improvements or facility
expansions for which a fee has been assessed, the amount of the fee, and in the
event that the capital improvements or facility expansions for which a fee has
been assessed have been financed through the issuance of bonds, lease-purchase
agreements or other financing mechanisms, the method of financing employed in
connection with all of the capital improvements or facility expansions for
which the fee has been assessed.

���� Failure to report within 30
days of the deadline for reporting on the part of a municipality which has
adopted an impact fee ordinance which has been certified by the commission
shall mean that the impact fee ordinance is no longer certified and that it shall
remain uncertified until the municipality reports to the commission as required
pursuant to this subsection.� If the ordinance is amended following its
invalidation pursuant to this subsection, the municipality shall be required to
recommence the certification process with the amended ordinance.

��
7.��� (New
section)� a.� No impact fee imposed by a municipality shall be in an amount
exceeding the development's proportional share of the current reasonable cost
of constructing the capital improvement or facility expansion for which the fee
is being assessed.� Any impact fee revenue that is not applied immediately to
the purpose for which it was collected shall be deposited in a banking
institution or savings and loan association in this State insured by an agency
of the federal� government, or in any other fund or depository approved for
such deposits by the State, in a special infrastructure trust fund bearing
interest at minimum rate currently paid by the institution or depository on
time or savings deposits.� Impact fees shall be segregated and designated
according to the capital improvements for which those fees were assessed.�
Impact fees shall not be deemed to be general revenues of the municipality.

���� Any impact fee revenue
collected shall be expended within the period anticipated in the ordinance
enacting the impact fee, but in no case shall the municipality maintain
unexpended impact fees for more than eight years after the date of collection
of the final payment for any development, except as provided in section 9 of
P.L.� ��, c.� ��(C. �������) (pending before the Legislature as this bill),
unless construction has already begun on the capital improvement or facility
expansion for which the impact fees were collected.

���� b.��� Upon receipt by the
governing body, impact fees for public school facilities shall be segregated in
a separate municipal account to be transferred upon request of the school board
to the school district's capital reserve or debt service account.

���� c.���� Any impact fee revenue
not expended, as provided in subsection a. of this section, shall be returned,
with interest, to the person or entity who made payment or to the heirs,
successors or assigns of such person upon the request of that person or his heirs,
successor or assigns.� Any person or entity making a claim for the return of
unexpended impact fee revenue shall provide documentation to the municipality
to sufficiently substantiate the claim of the person or entity to the refund.�
Documentation may include, but shall not be limited to, a recital in the deed
of conveyance indicating the person or entity that paid the fee or a copy of a
fully-executed real estate settlement statement indicating the person or entity
that paid the fee.

���� 8.��� (New section)� No impact
fee shall be assessed for:

���� a.���� The construction,
acquisition, improvement or expansion of public facilities or assets other than
capital improvements or facility expansions which are included in the capital
improvement program adopted pursuant to section 20 of P.L.1975, c.291 (C.40:55D-29)
or section 11 of P.L.��� , c.��� (C.������ ) (pending before the Legislature as
this bill).

���� b.��� The repair, operation or
maintenance of existing or new capital improvements or facility expansions.

���� c.���� The upgrading,
expansion or replacement of existing capital improvements or capital facilities
to serve existing development including, but not limited to, those actions
which are necessitated by changes in performance or regulatory standards
whether or not those changes are needed in order to meet more stringent safety,
environmental or regulatory standards.

���� d.��� Costs associated with
the construction of administrative office facilities which are greater in scope
than necessary as an integral part of capital facilities authorized pursuant to
P.L. , c. (C. ) (pending
before the Legislature as this bill).

���� e.���� The upgrading,
construction, expansion or replacement of existing capital improvements to
provide better service to existing development or to provide service due to
levels of demand attributable to users originating from and terminating at
places or uses which are not situated within the service area of the capital
improvement being used.

���� f.���� The administrative and
operating costs of the municipality.

���� g.��� Except as otherwise
provided by P.L.� ��, c. ���(C.��� ����) (pending before the Legislature as
this bill), the payment of principal and interest or other finance charges on
bonds or other indebtedness.

���� h.��� The financing of any
capital improvements not explicitly authorized by P.L.���� , c.������ (C.������
) (pending before the Legislature as this bill).

���� 9.��� (New section)� a.�
Notwithstanding the provisions of subsection a. of section 7� of P.L.��� ,
c.��� (C.������ ) (pending before the Legislature as this bill) to the
contrary, a municipality may finance capital improvements within service areas
and collect impact fees to fund debt service payments for a period in excess of
eight years after the date of collection of the final payment.

���� b.��� A developer and the
municipal governing body, upon mutual agreement, may pro rate impact fees for
debt service payments within service areas.� In the event that debt service
payments are pro rated, payments shall be collected as the developments are
connected into the capital improvements for which the impact fees have been
imposed.

���� c.���� With the consent of the
municipal governing body, a developer may construct required capital
improvements in lieu of paying all or any portion of the impact fee otherwise
assessed against the developer.

���� d.��� In the event that a
developer or his successor experiences unforeseen delays in completion of the
development which is the subject of an impact fee assessment, the eight year
limit on municipal expenditure of the impact fee moneys may be extended for the
length of the delay, with the approval of the municipal governing body, which
approval shall not be unreasonably withheld.

���� 10.� Section 20 of P.L.1975,
c.291 (C.40:55D-29) is amended to read as follows:

���� 20.� a.� The governing body
of
any municipality which does not authorize the preparation of a program of
municipal capital improvements for the purposes of adopting an impact fee
ordinance pursuant to section 6 of P.L.� ��, c.��� (C.� ������) (pending before
the Legislature as this bill)
may authorize the planning board from time to
time to prepare a program of municipal capital improvement projects projected
over a term of at least 6 years, and amendments thereto.� Such program may
encompass major projects being currently undertaken or future projects to be
undertaken, with federal, State, county and other public funds or under
federal, State or county supervision.� The first year of such program shall,
upon adoption by the governing body, constitute the capital budget of the
municipality as required by N.J.S.40A:4-43 et seq.� The program shall classify
projects in regard to the urgency and need for realization, and shall recommend
a time sequence for their implementation.� The program may also contain the
estimated cost of each project and indicate probable operating and maintenance
costs and probable revenues, if any, as well as existing sources of funds or
the need for additional sources of funds for the implementation and operation
of each project. The program shall, as far as possible, be based on existing
information in the possession of the departments and agencies of the
municipality and shall take into account public facility needs indicated by the
prospective development shown in the master plan of the municipality or as permitted
by other municipal land use controls.

���� In preparing the program, the
planning board shall confer, in a manner deemed appropriate by the board, with
the mayor, the chief fiscal officer, other municipal officials and agencies,
and the school board or boards.

���� Any such program shall include
an estimate of the displacement of persons and establishments caused by each
recommended project.

���� b.��� In addition to any of
the requirements in subsection a. of this section, whenever the planning board
is authorized and directed to prepare a capital improvements program, every
municipal department, authority or agency shall, upon request of the planning
board, transmit to said board a statement of all capital projects proposed to
be undertaken by such municipal department, authority or agency, during the
term of the program, for study, advice and recommendation by the planning
board.

���� c.���� In addition to all of
the other requirements of this section, any municipality that intends to
provide for the transfer of development within its jurisdiction pursuant to
section 3 of P.L.2004, c.2 (C.40:55D-139) shall include within its capital
improvement program provision for those capital projects to be undertaken in
the receiving zone or zones required as a condition for adopting a development
transfer ordinance pursuant to subsection b. of section 4 of P.L.2004, c.2
(C.40:55D-140).

(cf: P.L.2004, c.2, s.38)

��
11.� (New
section)� Prior to the adoption by the municipal governing body of an impact
fee ordinance authorized pursuant to section 6 of P.L.��� , c.��� (C.������ )
(pending before the Legislature as this bill), the planning board shall have
prepared, and the governing body shall have adopted a program of municipal
capital improvement projects projected over a term of six years and amendments
thereto pursuant to section 20 of P.L.1975, c.291 (C.40:55D-29).� The governing
body shall adopt the capital improvement program in accordance with the
provisions of section 21 of P.L.1975, c.291 (C.40:55D-30).� The capital
improvement program shall be consistent with the municipal master plan and, for
land in the Pinelands Area, with the Pinelands Comprehensive Management Plan
adopted by the Pinelands Commission pursuant to P.L.1979, c.111 (C.13:18A-1 et
seq.). In addition to those provisions of the capital improvement program set
forth in section 20 of P.L.1975, c.291 (C.40:55D-29), a� program which serves
as the basis for the imposition of an impact fee by a municipality pursuant to
this section shall include:

���� a.���� a description of� those
capital improvements for which an impact fee is to be assessed pursuant to
section

6 of P.L.� , c.�� (C.� ) pending before
the Legislature as this bill), a map or maps depicting the service area of each
such improvement and the costs to improve or replace those improvements in
order to meet prospective demand or stricter safety, environmental or
regulatory standards;

���� b.��� a description of future
need for such capital improvements and facility expansions based on the master
plan adopted pursuant to section 19 of P.L.1975, c.291 (C.40:55D-28) , for
which an impact fee is to be assessed pursuant to section 6 of P.L. , c. (C. )
(pending before the Legislature as this bill);

���� c.���� a projection of the
total number of service units which will result from� new� development�
anticipated� in� the� master plan , for which an impact fee� is� to� be�
assessed pursuant� to section� 6

�of� P.L.���
,c. ���(C.����� ��) (pending before the Legislature as this bill); and

���� d.��� a schedule establishing
a specific level of quantity of use, consumption, generation or discharge of a
service unit for each category of capital improvement or expansion, for which
an impact fee is to be assessed pursuant to section 6 of P.L.���� , c.� ��(C.��
�����) (pending before the Legislature as this bill).

���� 12.� Section 6 of P.L.1975,
c.291 (C.40:55D-10) is amended to read as follows:

���� 6.��� Hearings.� a.� The
municipal agency shall hold a hearing on each application for development,
adoption, revision or amendment of the master plan,
and the capital
improvement program adopted pursuant to section 11 of P.L.��� , c.��� (C.���� ���)
(pending before the Legislature as this bill),
each application for
approval of an outdoor advertising sign submitted to the municipal agency as
required pursuant to an ordinance adopted under subsection g. of section 29.1
of P.L.1975, c.291 (C.40:55D-39) or any review undertaken by a planning board pursuant
to section 22 of P.L.1975, c.291 (C.40:55D-31).

���� b.��� The municipal agency
shall make the rules governing such hearings. Any maps and documents for which
approval is sought at a hearing shall be on file and available for public
inspection at least 10 days before the date of the hearing, during normal
business hours in the office of the administrative officer.� The applicant may
produce other documents, records, or testimony at the hearing to substantiate
or clarify or supplement the previously filed maps and documents.

���� c.���� The officer presiding
at the hearing or such person as he may designate shall have power to
administer oaths and issue subpoenas to compel the attendance of witnesses and
the production of relevant evidence, including witnesses and documents
presented by the parties, and the provisions of the "County and Municipal
Investigations Law," P.L.1953, c.38 (C.2A:67A-1 et seq.) shall apply.

���� d.��� The testimony of all
witnesses relating to an application for development shall be taken under oath
or affirmation by the presiding officer, and the right of cross-examination
shall be permitted to all interested parties through their attorneys, if represented,
or directly, if not represented, subject to the discretion of the presiding
officer and to reasonable limitations as to time and number of witnesses.

���� e.���� Technical rules of
evidence shall not be applicable to the hearing, but the agency may exclude
irrelevant, immaterial or unduly repetitious evidence.

���� f.���� The municipal agency
shall provide for the verbatim recording of the proceedings by either
stenographer, mechanical or electronic means.� The municipal agency shall
furnish a transcript, or duplicate recording in lieu thereof, on request to any
interested party at his expense; provided that the governing body may provide
by ordinance for the municipality to assume the expense of any transcripts
necessary for appeal to the governing body, pursuant to section 8 of
[
this act
]

P.L.1975,
c.291 (C.40:55D-17)
, of decisions by the zoning board of adjustment
pursuant to subsection
[
57d.
]

d. of
section 57
of
[
this
act
]

P.L.1975,
c.291 (C.40:55D-70)
, up to a maximum amount as specified by the ordinance.

���� The municipal agency, in
furnishing a transcript or tape of the proceedings to an interested party at
his expense, shall not charge such interested party more than the actual cost
of preparing the transcript or tape.� Transcripts shall be certified in writing
by the transcriber to be accurate.

���� g.��� The municipal agency
shall include findings of fact and conclusions based thereon in each decision
on any application for development and shall reduce the decision to writing.�
The municipal agency shall provide the findings and conclusions through:

���� (1)�� A resolution adopted at
a meeting held within the time period provided in the act for action by the
municipal agency on the application for development; or

���� (2)�� A memorializing
resolution adopted at a meeting held not later than 45 days after the date of
the meeting at which the municipal agency voted to grant or deny approval.�
Only the members of the municipal agency who voted for the action taken may
vote on the memorializing resolution, and the vote of a majority of such
members present at the meeting at which the resolution is presented for
adoption shall be sufficient to adopt the resolution.� If only one member who
voted for the action attends the meeting at which the resolution is presented
for adoption, the resolution may be adopted upon the vote of that member.� An
action pursuant to section 5 of
[
the
act
]

P.L.1975,
c.291
(C.40:55D-9) (resulting from the failure of a motion to approve an
application) shall be memorialized by resolution as provided above, with those
members voting against the motion for approval being the members eligible to
vote on the memorializing resolution.� The vote on any such resolution shall be
deemed to be a memorialization of the action of the municipal agency and not to
be an action of the municipal agency; however, the date of the adoption of the
resolution shall constitute the date of the decision for purposes of the
mailings, filings and publications required by subsections h. and i. of this
section
[
(C.40:55D-10)
]
.� If the
municipal agency fails to adopt a resolution or memorializing resolution as
hereinabove specified, any interested party may apply to the Superior Court in
a summary manner for an order compelling the municipal agency to reduce its
findings and conclusions to writing within a stated time, and the cost of the
application, including attorney's fees, shall be assessed against the
municipality.

���� h.��� A copy of the decision
shall be mailed by the municipal agency within 10 days of the date of decision
to the applicant or, if represented, then to his attorney, without separate
charge, and to all who request a copy of the decision, for a reasonable fee.� A
copy of the decision shall also be filed by the municipal agency in the office
of the administrative officer.� The administrative officer shall make a copy of
such filed decision available to any interested party for a reasonable fee and
available for public inspection at his office during reasonable hours.

���� i.���� A brief notice of the
decision shall be published in the official newspaper of the municipality, if
there be one, or in a newspaper of general circulation in the municipality.�
Such publication shall be arranged by the applicant unless a particular municipal
officer is so designated by ordinance; provided that nothing contained in this
act shall be construed as preventing the applicant from arranging such
publication if he so desires.� The municipality may make a reasonable charge
for its publication.� The period of time in which an appeal of the decision may
be made shall run from the first publication of the decision, whether arranged
by the municipality or the applicant.

(cf: P.L.2004, c.42, s.5)

���� 13.� Section 30 of P.L.1975,
c.291, (C.40:55D-42) is amended to read as follows:

���� 30.� Contribution for
off-tract water, sewer, drainage, and� street improvements.� The governing body
may by ordinance adopt regulations requiring a developer, as a condition for
approval of a subdivision or site plan, to pay the pro-rata share of the cost
of providing only reasonable and necessary street improvements and water,
sewerage and drainage facilities, and easements therefor, located off-tract but
necessitated or required by construction or improvements within such
subdivision or development.� Such regulations shall be based on circulation and
comprehensive utility service plans pursuant to subsections 19b.(4) and 19b.(5)
of
[
this act
]

P.L.1975,
c.291 (C.40:55D-28)
, respectively, and shall establish fair and reasonable
standards to determine the proportionate or pro-rata amount of the cost of such
facilities that shall be borne by each developer or owner within a related and
common area, which standards shall not be altered subsequent to preliminary
approval.� Where a developer pays the amount determined as his pro-rata share
under protest he shall institute legal action within one year of such payment
in order to preserve the right to a judicial determination as to the fairness
and reasonableness of such amount.

����
A governing body that has
adopted an ordinance under this section may also adopt an ordinance assessing
an impact fee pursuant to section 6 of P.L.��� , c.��� (C.����� )(pending
before the Legislature as this bill) and continue to require a developer to make
contributions for off-tract water, sewer, drainage and street improvements
pursuant to the provisions of this section.

(cf: P.L.1998, c.95, s.8)

���� 14.� (New section)� a.� The
governing bodies of two or more municipalities may, by substantially similar
ordinances duly adopted by each governing body within six calendar months after
the adoption of the first such ordinance after notice and hearing as herein
required, enter into a joint agreement providing for the assessment of impact
fees for development impacts which are generated in one municipality by a
development situated in another municipality which is a party to the agreement,
as provided hereunder.

���� b.��� The ordinance shall
follow the standards and guidelines set forth in sections 6 through 9 of P.L. ���,
c.� ��(C.�� �����) (pending before the Legislature as this bill).� The
municipalities which are a party to the agreement may jointly impose an impact
fee for any or all of the expenditure� areas� set forth� in subsection b. of�
section 6 of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill), so long as the rationale for the impact� fee to be administered
across municipal lines is appropriately set forth in the capital improvement
plans of the municipalities which are a party to the agreement and is supported
by the provisions of their respective master plans.

���� The ordinance shall also set
forth the administrative process through which impact fees are to be jointly
assessed and collected.

���� c.���� In the case of a
sending-receiving relationship established between school districts pursuant to
N.J.S.18A:38-8, any costs to the receiving district that may be associated with
an educational facilities capital improvement required as a result of development
in either the sending or receiving district may be funded or recouped through
the imposition of a joint impact fee adopted pursuant to this section and the
tuition charged by the receiving district shall not include any expenditures in
the amount of the impact fee associated with the capital improvement.� In no
case shall the� total of the impact fee and the State aid available to the
receiving district to fund the educational facilities capital improvement
exceed the cost of that improvement.

���� 15.� (New section)� A
developer may pay an impact fee under protest in order to obtain development
approval.� If a developer pays the amount determined by a municipality as the
developer's impact fee under protest, the developer shall initiate an appeal
pursuant to section 16 of P.L.��� , c.��� (C. �������) (pending before the
Legislature as this bill) within 60 days of the payment in order to preserve
the right to a� determination whether the required payment violates the
standards of P.L.��� , c.��� (C.��� ����) (pending before the Legislature as
this bill).

���� 16.� (New section)� A
developer may appeal an impact fee assessed pursuant to P.L.��� , c.��� (C.� ������)
(pending before the Legislature as this bill), which appeal shall be deemed to
be a contested case and shall be submitted to the Office of Administrative Law
for a hearing by an Administrative Law Judge in accordance with sections 9 and
10 of P.L.1968, c.410 (C.52:14B-9 and 52:14B-10), except that the
Administrative Law Judge's decision shall have the effect of a final agency
action and any appeal of that decision shall be made directly to the Appellate
Division of the Superior Court.

���� 17.� Section 12 of P.L.1975,
c.217 (C.52:27D-130) is amended to read as follows:

���� 12.� Except as otherwise
provided by this act or in the code, before construction or alteration of any
building or structure, the owner, or his agent, engineer or architect, shall
submit an application in writing, including signed and sealed drawings and specifications,
to the enforcing agency as defined in this act.� When an enforcing agency
begins to participate in the "Electronic Permit Processing Review
System," pursuant to section 1 of P.L.2021, c.70 (C.52:27D-124.4), the
owner, or his agent, engineer or architect, may submit applications and
scheduling requests electronically.� The application shall be in accordance
with regulations established by the commissioner and on a form or in a format
prescribed by the commissioner and shall be accompanied by payment of the fee
to be established by the municipal governing body by ordinance in accordance
with standards established by the commissioner.�
In addition, if
appropriate, the application shall include proof, by the owner, that 50 percent
of the amount assessed as an impact fee pursuant to section 6 of P.L. ���, c.� ��(C.�
������) (pending before the Legislature as this bill) has been paid to the
municipality in which the structure is situated, prior to the issuance of a
construction permit.
� The application for a construction permit shall be
filed with the enforcing agency and shall be a public record; and no
application for a construction permit shall be removed from the custody of the
enforcing agency after a construction permit has been issued.� Nothing contained
in this paragraph shall be interpreted as preventing the imposition of
requirements in the code, for additional permits for particular kinds of work,
including but not limited to plumbing, electrical, elevator, fire prevention
equipment or boiler installation or repair work, or in other defined
situations.�

���� Upon the transfer of ownership
of property that is the subject of a construction permit, and prior to
beginning or continuing work authorized by the construction permit, the new
owner shall file with the enforcing agency an application for a permit update
to notify the enforcing agency of the name and address of the new owner and of
all other changes to information previously submitted to the enforcing agency.�
If the municipality has adopted an ordinance requiring a successor developer to
furnish a replacement performance guarantee, and a performance guarantee has
previously been furnished in favor of the municipality to assure the
installation of on-tract improvements on the property that is the subject of an
application for a permit update for the purpose of notifying the enforcing
agency of the name and address of a new owner, the enforcing agency shall not
approve the application for a permit update until it receives notification from
the governing body or its designee that the new owner has furnished an adequate
replacement performance guarantee.

���� No permit shall be issued for
a public school facility unless the final plans and specifications have been
first approved by the Bureau of Facility Planning Services in the Department of
Education or a municipal code official who is appropriately licensed by the
Commissioner of Community Affairs for the type and level of plans being
reviewed. Approval by the Bureau of Facility Planning Services in the
Department of Education shall only be required when a review for educational
adequacy is necessary.� Requirements determining when a review for educational
adequacy is necessary shall be established jointly by the Department of
Community Affairs and the Department of Education.� The standards shall
thereafter be adopted as part of the Uniform Construction Code regulations by
the Department of Community Affairs.� After the final plans and specifications
have been approved for educational adequacy by the Bureau of Facility Planning
Services in the Department of Education, a local board of education may submit
the final plans and specifications for code approval to either the Bureau of
Facility Planning Services in the Department of Education or a municipal code
official who is appropriately licensed by the Commissioner of Community Affairs
for the type and level of plans being reviewed. The Bureau of Facility Planning
Services in the Department of Education when approving final plans and
specifications shall be responsible for insuring that the final plans and
specifications conform to the requirements of the code as well as for insuring
that they provide for an educationally adequate facility.� In carrying out its
responsibility pursuant to the provisions of this section the Department of
Education shall employ persons licensed by the Commissioner of Community Affairs
for the type and level of plans being reviewed.

(cf: P.L.2021, c.70, s.4)

���� 18.� Section 15 of P.L.1975,
c.217 (C.52:27D-133) is amended to read as follows:

���� 15.� No building or structure
hereafter constructed shall be used or occupied in whole or in part until a
certificate of occupancy shall have been issued by the enforcing agency.� No
building or structure hereafter altered, in whole or in part, shall be used or
occupied until such a certificate has been issued, except that any use or
occupancy in an already existing building or structure that was not
discontinued during its alteration may be continued in the preexisting
structure for 30 days after the completion of the alteration without the
issuance of a certificate of occupancy.� A certificate of occupancy shall be
issued by the enforcing agency when all of the work covered by a construction
permit shall have been completed in accordance with the permit, the code, and
other applicable laws and ordinances
and, if appropriate upon, proof that
the remaining 50 percent of the impact fee imposed pursuant to P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill) has been paid to the
appropriate municipality by the developer
.� In the case of any new home
subject to sales surcharge pursuant to P.L.1991, c.202 (C.46:3B-13 et al.) a
certificate of occupancy shall not be issued except after presentation of a
receipt, or verified duplicate thereof, from the Department of Community
Affairs evidencing the payment of the surcharge.� On request of a holder of a
construction permit, the appropriate enforcing agency may issue a temporary
certificate of occupancy for a building or structure, or part thereof, before
the entire work covered by the construction permit has been completed, if the
part or parts of the building or structure to be covered by the certificate may
be occupied prior to completion of all work in accordance with the permit, the
code, and other applicable laws and ordinances, without endangering the health
and safety of the occupants or users.� When a building or structure is entitled
thereto, the enforcing agency shall issue a certificate of occupancy within 10
business days after receipt of a written application therefor in accordance
with regulations� established by the commissioner on a form prescribed by the
commissioner accompanied by payment of a fee to be established by the municipal
governing body by ordinance in accordance with standards established by the
commissioner.� The certificate of occupancy shall certify that the building or
structure has been constructed in accordance with the provisions of the
construction permit, the code, and other applicable laws and ordinances.

(cf: P.L.1991, c.202, s.8)

���� 19.� (New section)� a.� The
Commissioner of Community Affairs shall provide technical assistance to
municipalities to aid them in adopting impact fee ordinances authorized
pursuant to section 6 of� P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill) and shall also establish a permanent Development
Impact Fee Review and Advisory Commission to provide ongoing technical
assistance in connection with the tasks set forth below and from time to time
evaluate the implementation of the various impact fee ordinances adopted by�
municipalities pursuant to P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill).

���� The first responsibility of
the commission following the enactment of P.L.��� , c.��� (C. �������) (pending
before the Legislature as this bill) shall be the preparation and dissemination
of model ordinances to every municipality, every member of the Legislature and
the Governor.� In addition, the technical assistance shall consist of:� the provision
of advice and assistance regarding the drafting of impact fee ordinances; the
development of formulas and uniform methods for the calculation of impact fees,
including the definition of service units; the establishment of fee guidelines,
including regional differentials in providing capital facilities throughout the
State, for which impact fees may be assessed; advice relating to the
preparation of plan elements and capital improvement programs related to impact
fee uses; and any other assistance that is consistent with the purposes of P.L.���
, c.��� (C.������� ) (pending before the Legislature as this bill).� The
commission shall also draft and recommend standards for the development of
capital improvement programs to assist planning boards in the preparation, and
governing bodies in the adoption, of such programs pursuant to section 11 of P.L.���
, c.��� (C.������� ) (pending before the Legislature as this bill).� The
Commissioner of Education shall provide assistance to the Commissioner of
Community Affairs in the development of formulas and methods for the
calculation of impact fees imposed to finance educational facilities.

���� The commission shall organize
within 60 days following the date of enactment of P.L.�� �, c.�� �(C. �������)
(pending before the Legislature as this bill) and shall thereafter meet at
least monthly to provide� technical assistance to municipalities as required
pursuant to this subsection and to review for certification the municipal
ordinances submitted to it pursuant to subsection b. of this section.� The
commissioner shall assign such staff support as may be needed by the
commission� in order for it to discharge its duties.

���� Meetings of the commission
shall be conducted in accordance with the� provisions of the� "Senator
Byron M. Baer Open Public Meetings Act," P.L.1975, c.231 (C.10:4-6 et
seq.).

���� b.��� The Development Impact
Fee Review and Advisory Commission shall, within 90 days of the submission of
an ordinance for certification, or within such further time as may be consented
to by the municipality issue its determination.� In the event that the commission
does not certify the ordinance within said period, the ordinance shall be
deemed certified upon the expiration of the 90 day period or such extended
period of time as may be consented to by the municipality for purposes of the
taking effect of the ordinance unless the commission shall have notified the
municipal clerk of any deficiency in the ordinance which requires further
modification of the ordinance on the part of the municipality.

���� Should the commission
determine not to certify the proposed ordinance as submitted and issue a
deficiency notice to the municipality, the commission shall retain jurisdiction
and allow a reasonable period of time within which the municipality shall be permitted
to cure any deficiency.

���� If the municipality elects to
address the alleged deficiency, then the time frame provided for herein within
which the commission must act on certification shall be extended so as to
permit resubmittal of the ordinance to the commission.�

���� If the municipality upon
receipt of a notice of deficiency disagrees with the determination of the
commission, then this shall be deemed a final decision by an administrative
agency and the municipality shall have the right to appeal the determination as
provided for by law.

���� If the municipality disagrees
with the determination of the commission or elects not to address any alleged
deficiency identified by the commission, the municipality shall not impose an
impact fee.� If a municipality elects to appeal a decision of the commission,
it shall� not impose an impact fee pending the outcome of the appeal.

���� The commission shall be guided
in its determination by the reasonableness of the fee, the adherence of the
ordinance to the provisions of the model ordinances issued by the commission,
the formulas and uniform methods for the calculation of impact fees, fee
guidelines and other standards and guidelines developed by the commission to
assist municipalities in developing impact fee ordinances, and the relationship
of the ordinance to the master plan, capital improvement program and�
long-range facilities plan adopted by the municipality or school board, as the
case may be, and submitted along with the ordinance as the justification for
the impact fee assessment.

���� c.���� The Development Impact
Fee Review and Advisory Commission established pursuant to subsection a. of
this section shall consist of 15 members, all of whom shall be voting members,
as follows: the Commissioner of Community Affairs or the commissioner's designee
who shall serve as the commission chair and the Commissioner of Education or
the commissioner's designee.� The remaining 13 members shall be appointed by
the Governor, with the advice and consent of the Senate, within 30 days
following the submission of three names for each appointment by each of the
following organizations, each of which shall consider the need for political
and geographical balance in the appointment by the Governor of commission
members, as follows: one member representing the New Jersey State League of
Municipalities; one member representing the New Jersey School Boards
Association; one member representing the New Jersey Association of School
Business Officials; one member representing the New Jersey Planning Officials;
two members representing the New Jersey Builders Association; one member
representing the New Jersey chapter of the National Association of Industrial
and Office Properties; one member representing the New Jersey Society of
Municipal Engineers; one member representing the New Jersey Society of
Professional Engineers; one member of the New Jersey Institute of Local
Government Attorneys; and one member of the� New Jersey State Bar Association.�
In addition, two public members shall be appointed who shall be residents of the
State and who shall not be employed by any level of government, the development
industry or an affiliate thereof.

���� Not more than seven of the 13
public members shall be members of the same political party.� To the greatest
extent practicable, the membership shall be balanced geographically.

���� Commission members appointed
by the Governor shall serve for a three year term, except that of the members
first appointed, six shall serve for a term of three years, five shall serve
for a term of two years, and two� shall serve for a term of one year.�� Members
first appointed shall draw lots to determine the length of their term, except
that the initial terms of the members representing the New Jersey Builders
Association shall be staggered.� Members shall be eligible for reappointment.

���� Members who are not government
employees shall receive reasonable compensation on a per diem basis in an
amount to be determined by the commissioner, and shall be reimbursed for
necessary expenses actually incurred in the performance of their duties.

���� A majority of the membership
of the commission shall constitute a quorum except that no action may be taken
by the commission except upon the affirmative vote of a majority of the total
membership of the commission.

���� 20.� (New section)� The
Commissioner of Education shall provide assistance to the Development Impact
Fee Review and Advisory Commission established pursuant to subsection b. of
section 19 of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill) in developing guidelines to assist municipalities in the calculation
of impact fee assessments for educational facilities.

���� 21.� (New section)� a.�
Commencing on March 31st next following the promulgation of the first model
ordinance and every twelve months thereafter, the commission shall issue a
report which it shall circulate to the Governor and every member of the
Legislature regarding the certification of impact fee ordinances.�
Specifically, the report shall include the number of ordinances submitted for
certification, which of those ordinances are accepted for certification, the
types of capital improvements for which impact fees are being assessed, a
listing of the applications which are subject to the impact fee assessment in
each municipality and the amount of the assessment on each development, a
listing of those deficiency notices issued by the commission pursuant to subsection
b. of section 19 of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill) and the reasons for those determinations, and any
appeals of commission determinations which have been filed by municipalities,
as authorized pursuant thereto.

���� b.��� While it is the
Legislature's intent to assist municipalities in addressing the capital
improvement needs associated with new development, the Legislature is cognizant
of the importance of the homebuilding industry to the creation of jobs and the
provision of affordable housing in the growth areas of the State.� If the
Legislature finds that the impact fees being assessed by municipalities are
onerous and create unreasonable upward pressure on the price of new housing in
municipalities that assess impact fees, the Legislature may be compelled to
impose limitations on those fees which may be assessed by municipalities in
subsequent enactments.

���� 22.� (New section)� a.� Any
application for development which has received preliminary approval prior to
the adoption of an ordinance pursuant to section 6 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill) shall not be subject
to the provisions of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill).

���� b.��� Any contract which has
been entered into or any conditions of development approval which have been
agreed to by a developer and approving authority prior to the effective date of
P.L. , c. (C. ) (pending
before the Legislature as this bill), evidenced by written documentation
attesting to the signed contract or agreement or by a memorializing resolution
formalizing the� approval, shall not be invalidated by any provision of P.L. , c. (C. ) (pending
before the Legislature as this bill), shall not be subject to review under the
provisions of any ordinance which is adopted pursuant to section 6 of P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill), and shall not
be subject to appeal pursuant to P.L.��� , c.��� (C.������� ) (pending before
the Legislature as this bill).

���� c.���� Any� contract which has
been entered into or any conditions of development approval which have been
agreed to by a developer and approving authority prior to the effective date of
P.L. , c. (C. )
(pending before the Legislature as this bill), evidenced by written
documentation attesting to the signed contract or agreement or by a
memorializing resolution formalizing the approval, shall not be invalidated on
the basis of noncompliance with the provisions of section 30 of P.L.1975, c.291
(C.40:55D-42), P.L.1989, c.100 (C.27:1C-1 et al.), P.L.1985, c.222
(C.52:27D-301 et al.), or any other law which authorizes the assessment of
development fees.

���� 23.� There is hereby
appropriated to the Department of Community Affairs from the General Fund the
sum of $250,000 to cover the costs of staffing the Development Impact Review
and Advisory Commission.

���� 24.� This act shall take
effect immediately.

STATEMENT

���� This bill, known as the
"Municipal Development Impact Fee Authorization Act," would allow
municipalities to impose an impact fee on developers under certain
circumstances.

���� A municipality which imposes
an impact fee must do so by an ordinance which sets forth detailed standards
and guidelines regarding the definition of a service unit and the specific
purposes for which the impact fee revenues may be expended.� The impact fee
ordinance shall also contain a delineation of service areas for each capital
improvement and a fee schedule which clearly sets forth the amount of the fee
to be charged for each service unit.

���� Municipalities may impose an
impact fee to cover a broad range of expenditure areas, including any
transportation improvement necessitated by new development in a county not
covered by a transportation development district created pursuant to the
"New Jersey Transportation Development District Act of 1989," water
treatment and distribution, wastewater treatment and sewerage, flood control
and stormwater management, educational facilities, municipal parks and
recreation facilities, public safety and related facilities.� The bill exempts
low and moderate income housing units as defined under P.L.1985, c.222
(C.52:27D-301 et al.) from the assessment of impact fees and prohibits the
internal subsidy within inclusionary developments which would otherwise see purchasers
of market-priced units absorb the impact fees forgiven on their affordable
counterparts.

���� Capital improvements and
facility expansion for which an impact fee is imposed must bear a reasonable
relationship to needs created by the new development.� A municipality may adopt
such an impact fee ordinance only if it has previously adopted a capital
improvement program and has a valid master plan in place.� The capital
improvement program referred to here is more detailed than that which is
currently authorized under section 20 of the "Municipal Land Use
Law," P.L.1975, c.291 (C.40:55D-29).� An impact fee imposed to finance
educational facilities shall be based upon a long-term facilities plan approved
by the Commissioner of Education.

���� Municipalities which choose
not to implement an impact fee ordinance under this bill may continue to
prepare the less comprehensive capital improvement program currently authorized
under the "Municipal Land Use Law."� Similarly, those municipalities
may continue to levy a fee for off-tract improvements authorized under section
30 of P.L.1975, c.291 (C.40:55D-42).

���� The bill sets forth terms and
conditions under which municipalities may assess and hold onto impact fee
revenues.� Fifty percent of the amount assessed as an impact fee shall be paid
prior to the issuance of a construction permit and the remainder, prior to the
issuance of the certificate of occupancy.� No impact fee imposed by a
municipality shall exceed the development's proportional share of the current
reasonable cost of constructing the capital improvement or facility expansion
for which the fee is being assessed.� In no case shall the municipality
maintain unexpended impact fees for more than eight years after the date of
collection of the final payment for any development, unless construction has
already begun on the capital improvement of facility expansion for which the
impact fees were collected.

���� The bill provides for an
appeal of an impact fee assessment to an administrative law judge under the
"Administrative Procedure Act" as a contested case; unlike decisions
of contested cases under the APA, however, decisions of an administrative law
judge in these cases would be final and would be appealable directly to the
Appellate Division of Superior Court.

���� The bill establishes a
permanent 15 member Development Impact Fee Review and Advisory Commission
(DIFRAC) in the Department of Community Affairs to provide ongoing technical
assistance to municipalities in adopting impact fee ordinances and to evaluate
the implementation of those ordinances.� The first responsibility of DIFRAC
shall be the preparation and dissemination of model ordinance. All municipal
development impact fee ordinances must be certified by DIFRAC as to their
conformity with law and the standards adopted by the commission.