S1045

An Act requiring annual compensation for certain municipalities that commit to providing affordable housing and supplementing P.L.1985, c.222 (C.52:27D-301 et al.).

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

1. a. The Legislature finds and declares that:

(1) The processes established by the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), as revised pursuant to P.L.2024, c.2 (C.52:27D-304.1 et al.), place a substantial unfunded financial burden on the State’s municipalities;

(2) The maintenance and, as necessary, expansion of local roads, schools, water utility services, and other infrastructure needs, is increasingly challenging for many municipalities as a result of these statutes;

(3) These infrastructure costs, along with the costs of planning services, and other costs necessary for compliance with these statutes, may be more extensive than can fully be addressed through the "New Jersey Affordable Housing Trust Fund," or municipal affordable housing trust funds; and

(4) Considering these extensive financial burdens that are being shouldered by municipalities that comply with the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), as revised pursuant to P.L.2024, c.2 (C.52:27D-304.1 et al.), it is imperative for the Legislature to provide financial relief to these municipalities.

b. The State Treasurer shall, over the period each 10-year round of affordable housing obligations beginning with the fourth round, provide $75,000 to the Local Infrastructure and Planning Fund of a municipality, established pursuant to subsection c. of this section, for each unit of low- or moderate-income housing that a municipality has committed to, based on a housing element and fair share plan that has obtained compliance certification for the current round of affordable housing obligations, pursuant to section 3 of P.L.2024, c.2 (C.52:27D-304.1). The total sum of all payments owed to a municipality for a 10-year round of affordable housing obligations pursuant to this subsection, shall be divided by 10, and the State Treasurer shall provide the amount of the resulting quotient, each year, to that municipality’s Local Infrastructure and Planning Fund beginning in the first full calendar year of a round of affordable housing obligations and each of the nine subsequent calendar years. If a municipality initially obtains compliance certification later than the first year of the 10-year round of affordable housing obligations, the total sum of all payments otherwise owed to a municipality pursuant to this subsection shall be divided by the number of years remaining in that 10-year round and the resulting quotient shall be provided to a municipality in accordance with the rules and regulations adopted by the State Treasurer pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

c. A municipality that has obtained compliance certification pursuant to section 3 of P.L.2024, c.2 (C.52:27D-304.1) shall establish a Local Infrastructure and Planning Fund, to be kept separate and apart from all other municipal funds, for the purpose of depositing and maintaining monies received from the State Treasurer pursuant to subsection b. of this section. A municipality may expend or commit monies in the Local Infrastructure and Planning Fund on planning services, attorney’s fees, and court costs related to compliance with P.L.1985, c.222 (C.52:27D-301 et al.). A municipality may also expend monies in the Local Infrastructure and Planning Fund on operational costs, capital costs, or both, for local infrastructure that may be affected by the construction of affordable housing, including, but not limited to:

(1) buildings and structures, such as schools; fire houses; police stations; recreation centers; public works garages; and water and sewer treatment and pumping facilities;

(2) transportation facilities, such as bus stations and parking facilities; and

(3) sidewalks, streets, roads, and ramps.

d. A municipality may, as provided for in an agreement, transfer monies committed pursuant to subsection c. of this section to other local units or local authorities with operations in the municipality as necessary to finance qualifying expenditures by the receiving local unit.

2. The State Treasurer shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill). If P.L. , c. (C. ) (pending before the Legislature as this bill) is enacted after the first full year of the fourth round of affordable housing obligations, the rules and regulations of the State Treasurer shall establish a method for providing the payments owed pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) over a more concentrated timeline than the timeline otherwise required.

3. This act shall take effect immediately.

STATEMENT

This bill requires the State Treasurer to annually compensate certain municipalities for costs related to low- and moderate-income housing units that the municipalities commit to providing.

The needs of local roads, schools, water utility services, and other infrastructure, are increasingly challenging for many municipalities as a result of the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), as revised by the recent enactment of additional legislation, P.L.2024, c.2 (C.52:27D-304.1 et al.). These infrastructure costs, along with the costs of planning services, and other costs necessary for compliance with these statutes, may be more extensive than can fully be addressed through the "New Jersey Affordable Housing Trust Fund," or municipal affordable housing trust funds. This bill is intended to respond to the extensive unfunded financial burdens that are being shouldered by municipalities.

The bill directs the State Treasurer to provide $75,000 to the Local Infrastructure and Planning Fund of a municipality for each unit of low- or moderate-income housing that the municipality commits to, as reflected in the municipality’s housing element and fair share plan. The payment is to be provided to municipalities that have obtained certification for the current round of affordable housing obligations. The total sum of all $75,000 payments owed to a municipality for a 10-year round of affordable housing obligations, is to be divided by 10, and provided in equal amounts, each year, to each municipality’s Local Infrastructure and Planning Fund beginning in the first full calendar year of a round of affordable housing obligations, meaning 2026 for the upcoming fourth round. If a municipality initially obtains compliance certification later than the first year of the 10-year round of affordable housing obligations, the bill requires that the total sum of all $75,000 payments owed to a municipality pursuant to the bill are to be concentrated and provided to a municipality in accordance with rules and regulations adopted by the State Treasurer.

The bill provides that a municipality that obtains compliance certification for its housing element and fair share plan, is to establish a Local Infrastructure and Planning Fund, to be kept separate from other municipal funds, for the purpose of depositing and maintaining monies received for the purposes of this bill. The bill permits a municipality to expend monies in the Local Infrastructure and Planning Fund on planning services, attorney’s fees, and court costs related to compliance with "Fair Housing Act." The bill also permits a municipality to expend monies in the Local Infrastructure and Planning Fund on operational and capital costs for local infrastructure that may be affected by the construction of affordable housing, including school, transportation, and water infrastructure.

The bill directs the State Treasurer to adopt rules and regulations to effectuate the purposes of the bill. The bill takes effect immediately upon enactment.