A3994

ASSEMBLY, No. 3994

STATE OF NEW JERSEY

209th LEGISLATURE

INTRODUCED NOVEMBER 29, 2001

Sponsored by:

Assemblywoman CONNIE MYERS

District 23 (Warren, Hunterdon and Mercer)

Assemblyman JOHN V. KELLY

District 36 (Bergen, Essex and Passaic)

Co-Sponsored by:

Assemblywoman Farragher, Assemblymen Gregg, Garrett, Assemblywoman Vandervalk, Assemblymen Thompson, Corodemus, Cottrell, Holzapfel, Moran, Zecker, Arnone, Munoz, Kean, Merkt, Carroll, Felice, LeFevre, Bateman, Biondi, Gibson, Talarico, Lance, Assemblywoman Heck and Assemblyman Bagger

SYNOPSIS

Modifies Fair Housing Act and State Planning Act to assist in provision of affordable housing.

CURRENT VERSION OF TEXT

As introduced.

(Sponsorship Updated As Of: 12/11/2001)

An Act concerning affordable housing and amending various parts of the statutory law 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. (New section) a. The Legislature finds in P.L. , c. (C. ) (now before the Legislature as this bill) that the State must increase its assistance to municipalities in meeting their fair share obligations, because the enormous costs and impacts on a municipality of providing affordable housing through land use regulations are so burdensome that they have become, in many instances, a bar to providing realistic opportunities for affordable housing.

b. The Legislature affirms the initial finding that municipalities must provide a reasonable opportunity for a variety and choice of housing to meet the needs of low and moderate income households. New Jersey is a very desirable place to live and work, owing in part to its prime location in the Northeast corridor as well as its unique mix of natural resources, including farmlands, mountains, and ocean frontage. New Jersey is also the most densely populated State. The potential demand for housing for everyone desiring to live here is great. Attempting to meet such demand without balancing it with other important State goals, such as historical preservation, preserving environmentally sensitive lands, and the industry of agriculture would severely impact the quality of life in New Jersey.

c. The Legislature notes that the method of comprehensive planning envisioned under the original act wherein municipal officials determined the initial municipal fair share was never followed in practice. Therefore, it is necessary to provide reasonable fair share guidelines and standards for the Council on Affordable Housing to follow in making these determinations.

d. Furthermore, the Legislature finds federal subsidies have increased dramatically over the last 16 years. Coupled with State and municipal resources, a great deal of financial resources have been expended on the provision of affordable housing, with no corresponding effort by the State to require an accounting of these expenditures or to track the housing units produced as a result of them. Therefore, it is the intent of P.L. , c. (C. )(now before the Legislature as this bill) to require such accountability, and to provide the assistance that municipalities must have in meeting their constitutional obligation, as well as promoting sound land use planning principles.

2. Section 4 of P.L.1985, c.222 (C.52:27D-304) is amended to read as follows:

4. As used in this act:

a. "Council" means the Council on Affordable Housing established in this act, which shall have primary jurisdiction for the administration of housing obligations in accordance with sound regional planning considerations in this State.

b. "Housing region" means [a geographic area of not less than two nor more than four contiguous, whole counties which exhibit significant social, economic and income similarities, and which constitute to the greatest extent practicable the primary metropolitan statistical areas as last defined by the United States Census Bureau prior to the effective date of this act] each individual county within the State.

c. "Low income housing" means housing affordable according to federal Department of Housing and Urban Development or other recognized standards for home ownership and rental costs and occupied or reserved for occupancy by households with a gross household income equal to 50% or less of the median gross household income for households of the same size within the housing region in which the housing is located.

d. "Moderate income housing" means housing affordable according to federal Department of Housing and Urban Development or other recognized standards for home ownership and rental costs and occupied or reserved for occupancy by households with a gross household income equal to more than 50% but less than 80% of the median gross household income for households of the same size within the housing region in which the housing is located.

e. "Resolution of participation" means a resolution adopted by a municipality in which the municipality chooses to prepare a fair share plan and housing element in accordance with this act.

f. "Inclusionary development" means a residential housing development in which a [substantial] percentage of the housing units are provided for a reasonable income range of low and moderate income households.

g. "Conversion" means the conversion of existing commercial, industrial, or residential structures for low and moderate income housing purposes where a [substantial] percentage of the housing units are provided for [a reasonable income range of] low and moderate income households.

h. "Development" means any development for which permission may be required pursuant to the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).

i. "Agency" means the New Jersey Mortgage and Housing Finance Agency established by P.L.1983, c.530 (C.55:14K-1 et seq.).

j. "Prospective need" means a projection of housing needs based on development and growth which is reasonably likely to occur in [a region or] a municipality [, as the case may be,] as a result of [actual determination of public and private entities. In determining prospective need, consideration shall be given to] approvals of development applications, real property transfers and [economic projections prepared by the State Planning Commission established by sections 1 through 12 of P.L.1985, c.398 (C.52:18A-196 et seq.)] contents of the municipal master plan.

(cf: P.L.1985, c.222, s.4)

3. Section 5 of P.L.1985, c.222 (C.52:27D-305) is amended to read as follows:

5. a. There is established in, but not of, the Department of Community Affairs a Council on Affordable Housing to consist of 11 members appointed by the Governor with the advice and consent of the Senate, of whom four shall be elected officials representing the interests of local government[,]; at least one of whom shall be representative of an urban municipality having a population in excess of 40,000 persons and a population density in excess of 3,000 persons per square mile, and at least one of whom shall be representative of a municipality having a population of 40,000 persons or less and a population density of 3,000 persons per square mile or less, and at least one of whom shall be representative of a rural municipality having a population of 10,000 or less and a population density of 500 persons per square mile or less, and no more than one of whom may be a representative of the interests of county government; three shall represent the interests of households in need of low and moderate housing, one of whom shall represent the interests of the nonprofit builders of low and moderate income housing, and shall have an expertise in land use practices and housing issues, one of whom shall be the Commissioner of Community Affairs, ex officio, or his or her designee, who shall serve as chairperson and one of whom shall be the executive director of the agency, serving ex officio; one shall represent the interests of the for-profit builders of market rate homes, and shall have an expertise in land use practices and housing issues; and three shall represent the public interest. Not more than six of the 11 shall be members of the same political party. The membership shall be balanced to the greatest extent practicable among the various housing regions of the State.

b. The members shall serve for terms of six years, except that of the members first appointed, two shall serve for terms of four years, three for terms of five years, and three for terms of six years. All members shall serve until their respective successors are appointed and shall have qualified. Notwithstanding the above, a member appointed to represent the interests of local government shall serve only such length of the term for which appointed as the member continues to hold elected local office, except that the term of a member so appointed shall not become vacant until 60 days after the member ceases to hold that elected office. Vacancies shall be filled in the same manner as the original appointments, but for the remainders of the unexpired terms only.

c. The members, excluding the executive director of the agency and the Commissioner of Community Affairs, shall be compensated at the rate of $150.00 for each six-hour day, or prorated portion thereof for more or less than six hours, spent in attendance at meetings and consultations and all members shall be eligible for reimbursement for necessary expenses incurred in connection with the discharge of their duties.

d. The Governor shall nominate the members within 30 days of the effective date of this act and shall designate a member to serve as chairman throughout the member's term of office and until his successor shall have been appointed and qualified.

e. Any member may be removed from office for misconduct in office, willful neglect of duty, or other conduct evidencing unfitness for the office, or for incompetence. A proceeding for removal may be instituted by the Attorney General in the Superior Court. A member or employee of the council shall automatically forfeit his office or employment upon conviction of any crime. Any member or employee of the council shall be subject to the duty to appear and testify and to removal from his office or employment in accordance with the provisions of P.L.1970, c.72 (C.2A:81-17.2a et seq.).

(cf: P.L.1995, c.83, s.1)

4. Section 7 of P.L.1985, c.222 (C.52:27D-307) is amended to read as follows:

7. It shall be the duty of the council, seven months after the confirmation of the last member initially appointed to the council, or January 1, 1986, whichever is earlier, and from time to time thereafter, to[:

a. Determine housing regions of the State;

b. Estimate the present and prospective need for low and moderate income housing at the State and regional levels;

c. Adopt criteria and guidelines for

(1) Municipal determination of its present and prospective fair share of the housing need in a given region.] determine municipal fair share. Fair share shall include:

a. A determination of present need , which shall be determined by counting the number of substandard housing units within a municipality according to the latest federal decennial census;

b. A determination of prospective need, which shall be determined by calculating the percentage of homes that must be affordable in a municipality when growth occurs after the effective date of P.L. , c. (C. )(now before the Legislature as this bill). In determining this percentage, the council shall examine a municipality's housing element with particular regard to access to employment opportunities. The council may also use reports from the Department of Labor and the census in assessing employment opportunities. The percentage of affordable housing need shall be relative to the degree of growth. The council may issue tables and sliding scales that may be utilized by a municipality to estimate the impacts of growth upon its obligation.

Municipal fair share shall be determined after crediting on a one-to-one basis each current unit of low and moderate income housing [of adequate standard], including any such housing constructed or acquired as part of a housing program specifically intended to provide housing for low and moderate income households. Notwithstanding any other law to the contrary, a municipality shall be entitled to a credit for a unit if [it demonstrates that (a) the municipality issued a certificate of occupancy for the unit, which was either newly constructed or rehabilitated between April 1, 1980 and December 15, 1986; (b) a construction code official certifies, based upon a visual exterior survey, that the unit is in compliance with pertinent construction code standards with respect to structural elements, roofing, siding, doors and windows; (c) the household occupying the unit certifies in writing, under penalty of perjury, that it receives no greater income than that established pursuant to section 4 of P.L.1985, c.222 (C.52:27D-304) to qualify for moderate income housing; and (d)] the unit for which credit is sought is affordable to low and moderate income households under the standards established by the council [at the time of filing of the petition for substantive certification]. [It shall be sufficient if the certification required in subparagraph (c) is signed by one member of the household. A certification submitted pursuant to this paragraph shall be reviewable only by the council or its staff and shall not be a public record;]

Nothing in P.L.1995, c.81 shall affect the validity of substantive certification granted by the council prior to November 21, 1994, or to a judgment of compliance entered by any court of competent jurisdiction prior to that date. Additionally, any municipality that received substantive certification or a judgment of compliance prior to November 21, 1994 and filed a motion prior to November 21, 1994 to amend substantive certification or a judgment of compliance for the purpose of obtaining credits, shall be entitled to a determination of its right to credits pursuant to the standards established by the Legislature prior to P.L.1995, c.81. Any municipality that filed a motion prior to November 21, 1994 for the purpose of obtaining credits, which motion was supported by the results of a completed survey performed pursuant to council rules, shall be entitled to a determination of its right to credits pursuant to the standards established by the Legislature prior to P.L.1995, c.81;

[(2)]c. Municipal [adjustment of the present and prospective] fair share shall be based upon available vacant and developable land, infrastructure considerations or environmental or historic preservation factors [and adjustments shall be made whenever] . Developments providing affordable housing shall not be mandated where ;

[(a) (1) The preservation of historically or important architecture and sites and their environs or environmentally sensitive lands may be jeopardized,

[(b)] (2) The established pattern of development in the community would be drastically altered,

[(c) Adequate land for recreational, conservation or agricultural and farmland preservation purposes would not be provided,

(d) Adequate open space would not be provided,

(e) The pattern of development is contrary to the planning designations in the State Development and Redevelopment Plan prepared pursuant to sections 1 through 12 of P.L.1985, c.398 (C.52:18A-196 et seq.),

(f)] (3) Vacant and developable land is not available in the municipality[, and]. For the purposes of this section, "vacant and developable land" shall not mean agricultural land that is under farmland assessment, or

[(g) Adequate public] (4) Public facilities and infrastructure capacities are not [available, or would result in costs prohibitive to the public if provided; and

(3) (Deleted by amendment, P.L.1993, c.31)

d. Provide population and household projections for the State and housing regions;

e. In its discretion, place a] present;

A limit [,] may be placed, based on a percentage of existing housing stock in a municipality and any other criteria including employment opportunities which the council deems appropriate, upon the aggregate number of units which may be allocated to a municipality as its fair share of the region's present and prospective need for low and moderate income housing. No municipality shall be required to address a fair share beyond 1,000 units within six years from the grant of substantive certification, unless it is demonstrated, following objection by an interested party and an evidentiary hearing, based upon the facts and circumstances of the affected municipality that it is likely that the municipality through its zoning powers could create a realistic opportunity for more than 1,000 low and moderate income units within that six-year period. For the purposes of this section, the facts and circumstances which shall determine whether a municipality's fair share shall exceed 1,000 units, as provided above, shall be a finding that the municipality has issued more than 5,000 certificates of occupancy for residential units in the six-year period preceding the petition for substantive certification in connection with which the objection was filed.

For the purpose of crediting low and moderate income housing units in order to arrive at a determination of present and prospective fair share, [as set forth in paragraph (1) of subsection c. of this section,] housing units comprised in a community residence for the developmentally disabled, as defined in section 2 of P.L.1977, c.448 (C.30:11B-2), shall be fully credited pursuant to rules promulgated or to be promulgated by the council, to the extent that the units are affordable to persons of low and moderate income and are available to the general public.

[In carrying out the above duties, including, but not limited to, present and prospective need estimations the council shall give appropriate weight to pertinent research studies, government reports, decisions of other branches of government, implementation of the State Development and Redevelopment Plan prepared pursuant to sections 1 through 12 of P.L.1985, c.398 (C.52:18A-196 et seq.) and public comment. To assist the council, the State Planning Commission established under that act shall provide the council annually with economic growth, development and decline projections for each housing region for the next six years. The council shall develop procedures for periodically adjusting regional need based upon the low and moderate income housing that is provided in the region through any federal, State, municipal or private housing program.]

(cf: P.L.1995, c.344, s.1)

5. Section 11 of P.L.1985, c.222 (C.52:27D-311) is amended to read as follows:

11. a. In adopting its housing element, the municipality may provide for its fair share of low and moderate income housing by means of any technique or combination of techniques which provide a realistic opportunity for the provision of the fair share. The housing element shall contain an analysis demonstrating that it will provide such a realistic opportunity, and the municipality shall establish that its land use and other relevant ordinances have been revised to incorporate the provisions for low and moderate income housing. In preparing the housing element, the municipality shall consider the following techniques for providing low and moderate income housing within the municipality, as well as such other techniques as may be published by the council or proposed by the municipality:

(1) Rezoning for densities necessary to assure the economic viability of any inclusionary developments, either through mandatory set-asides or density bonuses, as may be necessary to meet all or part of the municipality's fair share;

(2) Determination of the total residential zoning necessary to assure that the municipality's fair share is achieved;

(3) [Determination of measures that the municipality will take to assure that low and moderate income units remain affordable to low and moderate income households for an appropriate period of not less than six years] Deleted by amendment, P.L. , c. (C. )(now before the Legislature as this bill);

(4) [A plan for infrastructure expansion and rehabilitation if necessary to assure the achievement of the municipality's fair share of low and moderate income housing] Deleted by amendment, P.L. , c. (C. )(now before the Legislature as this bill);

(5) Donation or use of municipally owned land or land condemned by the municipality for purposes of providing low and moderate income housing;

(6) Tax abatements for purposes of providing low and moderate income housing;

(7) Utilization of funds obtained from any State or federal subsidy toward the construction of low and moderate income housing;

(8) Utilization of municipally generated funds toward the construction of low and moderate income housing; and

(9) The purchase of privately owned real property used for residential purposes at the value of all liens secured by the property, excluding any tax liens, notwithstanding that the total amount of debt secured by liens exceeds the appraised value of the property, pursuant to regulations promulgated by the Commissioner of Community Affairs pursuant to subsection b. of section 41 of P.L.2000, c.126 (C.52:27D-311.2).

b. The municipality may provide for a phasing schedule for the achievement of its fair share of low and moderate income housing.

c. The municipality may propose that a portion of its fair share be met through a regional contribution agreement. The housing element shall demonstrate, however, the manner in which that portion will be provided within the municipality if the regional contribution agreement is not entered into. The municipality shall provide a statement of its reasons for the proposal.

d. Nothing in this act shall require a municipality to raise or expend municipal revenues in order to provide low and moderate income housing.

e. When a municipality's housing element includes the provision of rental housing units in a community residence for the developmentally disabled, as defined in section 2 of P.L.1977, c.448 (C.30:11B-2), which will be affordable to persons of low and moderate income, and for which adequate measures to retain such affordability pursuant to paragraph (3) of subsection a. of this section are included in the housing element, those housing units shall be fully credited as permitted under the rules of the council towards the fulfillment of the municipality's fair share of low and moderate income housing.

f. It having been determined by the Legislature that the provision of housing under this act is a public purpose, a municipality or municipalities may utilize public monies to make donations, grants or loans of public funds for the rehabilitation of deficient housing units and the provision of new or substantially rehabilitated housing for low and moderate income persons, providing that any private advantage is incidental.

g. Occupancy preference of affordable housing units shall be permitted under P.L.1985, c.222 (C.52:27D-301 et al.), provided that any such preference is limited to residents residing or working within the housing region in which the affordable housing is located.

(cf: P.L.2000, c.126, s.30)

6. Section 14 of P.L.1985, c.222 (C.52:27D-314) is amended to read as follows:

14. Unless an objection to the substantive certification is filed with the council by any person within 45 days of the publication of the notice of the municipality's petition, the council shall review the petition and shall issue a substantive certification if it shall find that:

a. The municipality's fair share plan is consistent with the rules and criteria adopted by the council and not inconsistent with achievement of the low and moderate income housing needs of the municipality or region [as adjusted pursuant to the council's criteria and guidelines adopted pursuant to subsection c. of section 7 of this act]; and

b. The combination of the elimination of unnecessary housing cost-generating features from the municipal land use ordinances and regulations, and the affirmative measures in the housing element and implementation plan make the achievement of the municipality's fair share of low and moderate income housing realistically possible after allowing for the implementation of any regional contribution agreement approved by the council.

In conducting its review, the council may meet with the municipality and may deny the petition or condition its certification upon changes in the element or ordinances. Any denial or conditions for approval shall be in writing and shall set forth the reasons for the denial or conditions. If, within 60 days of the council's denial or conditional approval, the municipality refiles its petition with changes satisfactory to the council, the council shall issue a substantive certification.

Once substantive certification is granted, the municipality shall have 45 days in which to adopt its fair share housing ordinance approved by the council.

(cf: P.L.1985, c.222, s.14)

7. Section 4 of P.L.1975, c.176 (C.46:15-10.1) is amended to read as follows:

4. a. The following transfers of title to real property shall be exempt from payment of $1.25 per $500.00 of consideration or fractional part thereof of the fee imposed upon grantors by this act:

(1) The sale of any one- or two-family residential premises which are owned and occupied by a senior citizen, blind person, or disabled person who is the seller in such transaction; provided, however, that except in the instance of a husband and wife no exemption shall be allowed if the property being sold is jointly owned and one or more of the owners is not a senior citizen, blind person, or disabled person. (2) The sale of low and moderate income housing.

b. Transfers of title to real property upon which there is new construction shall be exempt from payment of $1.00 for each $500.00 or fractional part thereof not in excess of $150,000.00, provided that the amount of consideration recited in the deed is not greater than $300,000; otherwise no exemption shall be granted under this subsection.

c. The director shall promulgate rules, regulations and forms of certification or otherwise necessary to carry out the provisions of this section. No transfer shall be eligible for more than one exemption under this section. All fees collected on transfers subject to exemption under subsection a. of this section shall be remitted to the county treasurer for the use of the county. An amount equal to 66 2/3% of the proceeds from the fee imposed upon the consideration not in excess of $150,000.00 for transfers of real property upon which there is new construction, and an amount equal to 20% of the proceeds of the $2.50 fee imposed upon each $500.00 of consideration or fractional part thereof in excess of $150,000.00 for transfers of real property upon which there is new construction, shall be remitted to the county treasurer for the use of the county.

d. The balance of the fees collected on transfers subject to exemption under subsection b. of this section shall be remitted to the State Treasurer and shall be credited to the Neighborhood Preservation Nonlapsing Revolving Fund established pursuant to P.L.1985, c.222 (C.52:27D-301 et al.), to be spent in the manner established under section 20 thereof (C.52:27D-320).

e. Subsections a. through d. of this section shall be without effect on and after the tenth day following a certification by the Director of the Division of Budget and Accounting in the Department of the Treasury pursuant to subsection b. of section 2 of P.L.1992, c.148 (C.46:15-10.2).

(cf: P.L.1992, c.148, s.5)

8. Section 4 of P.L.1968, c.49 (C.46:15-8) is amended to read as follows:

4. a. The proceeds of the fees collected by the county recording officer, as authorized by this act, shall be accounted for and remitted to the county treasurer. An amount equal to 28.6% of the proceeds from the first $1.75 for each $500.00 of consideration or fractional part thereof recited in the deed so collected shall be retained by the county treasurer for the use of the county and the balance shall be paid to the State Treasurer for the use of the State; provided however, that on and after the tenth day following a certification by the Director of the Division of Budget and Accounting in the Department of the Treasury pursuant to subsection b. of section 2 of P.L.1992, c.148 (C.46:15-10.2), 100.0% of the proceeds from the first $0.50 for each $500.00 of consideration or fractional part thereof recited in the deed so collected shall be retained by the county treasurer for the use of the county and no amount shall be paid to the State Treasurer for the use of the State. Payments shall be made to the State Treasurer on the tenth day of each month following the month of collection. Amounts, not in excess of $25,000,000, paid during the State fiscal year to the State Treasurer from the payment of fees collected by the county recording officer other than the additional fee of $0.75 for each $500.00 of consideration or fractional part thereof recited in the deed in excess of $150,000.00 shall be credited to the "Shore Protection Fund" created pursuant to section 1 of P.L.1992, c.148 (C.13:19-16.1), in the manner established under that section. All amounts paid to the State Treasurer in payment of the additional fee of $0.75 for each $500.00 of consideration or fractional part thereof recited in the deed in excess of $150,000.00 shall be credited to the Neighborhood Preservation Nonlapsing Revolving Fund established pursuant to P.L.1985, c.222 (C.52:27D-301 et al.), in the manner established under section 20 thereof (C.52:27D-320).

b. Beginning on the first day of the third month next following enactment of P.L. , c. (C. )(now before the Legislature as this bill), the county recording officer shall keep a record for the calendar year of the number of residential housing units, by municipality, listed on deeds recorded which receive an exemption from the imposition of realty transfer fees as affordable housing pursuant to this section, and a record of the number of properties, by municipality, for which deeds are recorded which reflect transfers of title to real property upon which there is new construction, residential or otherwise, and the consideration recited in each deed. The record shall be transmitted annually to the Council on Affordable Housing.

(cf: P.L.1999, c.71, s.1)

9. Section 20 of P.L.1985, c.222 (C.52:27D-320) is amended to read as follows:

20. The Neighborhood Preservation Program within the Department of Community Affairs' Division of Housing and Development, established pursuant to the Commissioner of the Department of Community Affairs' authority under section 8 of P.L.1975, c.248 (C.52:27D-149), shall establish a separate Neighborhood Preservation Nonlapsing Revolving Fund for monies [appropriated by section 33 of this act] designated for deposit by P.L.1968, c.49 or any other statute, or account transfer or through an appropriation by the Legislature for deposit into the fund.

a. [The commissioner shall award grants or loans from this fund for housing projects and programs in municipalities whose housing elements have received substantive certification from the council, in municipalities receiving State aid pursuant to P.L.1978, c.14 (C.52:27D-178 et seq.), in municipalities subject to builder's remedy as defined in section 28 of P.L.1985, c.222 (C.52:27D-328) or in receiving municipalities in cases where the council approved a regional contribution agreement and a project plan developed by the receiving municipality. 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.] (Deleted by amendment, P.L. , c. (C. )(now before the Legislature as this bill).

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. [During the first 12 months from the effective date of this act and for any additional period which the council may approve, the commissioner may assist affordable housing programs which are not located in municipalities whose housing elements have been granted substantive certification or which are not in furtherance of a regional contribution agreement; provided that the affordable housing program will meet all or part of a municipal low and moderate income housing obligation.] The commissioner shall send a notification to every municipality upon the award of any State or federal monies being utilized to provide affordable housing within that municipality; a copy of such notification shall also be sent to the council. Each municipality receiving such a notice shall receive credit against its fair share for those units funded. In addition, the commissioner shall annually report to the Legislature and the Governor the total of all funds granted or administered through any State agency for affordable housing. The report shall list the project, the location, and the amount of units constructed or rehabilitated and the credits given to the municipality in which the housing is located.

d. Amounts [deposited in] expended from the Neighborhood Preservation Fund shall be targeted to [regions based on the region's percentage of the State's] low and moderate income housing need [as determined by the council] ,giving priority to municipalities with a present need that exceeds the regional average. 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 apartments to be occupied by low and moderate income households;

(3) Conversion of nonresidential 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 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 handicapped persons. e. Any grant or loan agreement entered into pursuant to this section shall incorporate contractual guarantees and procedures by which the division will 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 [at least 20 years following the award of the loan or grant, except that the division may approve a guarantee for a period of less than 20 years where necessary to ensure project feasibility] a period of time consistent with the law establishing affordability controls.

(cf: P.L.1995, c.83, s.3)

10. Section 21 of P.L.1985, c.222 (C.52:27D-321) is amended to read as follows:

21. The agency shall establish affordable housing programs to assist municipalities in meeting the obligation of developing communities to provide low and moderate income housing. The agency shall be authorized to utilize funds from the Neighborhood Preservation Nonlapsing Revolving Fund pursuant to section 20 of P.L.1985, c.222 (C.52:27D-320) for the purposes of providing the programs for affordable housing established pursuant to this section, in consultation with the commissioner. The agency shall utilize all funds available to the maximum extent possible to help municipalities meet their affordable housing obligation pursuant to P.L.1985, c.222 (C.52:27D-301 et al.).

The New Jersey Housing and Mortgage Finance Agency shall provide municipal affordable housing assistance. The agency shall provide technical and financial assistance to a requesting municipality in meeting its affordable housing obligation, and shall coordinate its efforts with the Council on Affordable Housing and the Department of Community Affairs.

The agency shall provide information to a municipality concerning the various funding sources available, including, but not limited to, State, federal, local or private lending programs for affordable housing, including information on housing sponsors seeking to build in a municipality or grants available to municipalities, and shall provide assistance to guide a municipality through the funding application process.

a. Of the bond authority allocated to it under section 24 of P.L.1983, c.530 (C.55:14K-24) the agency [will] shall allocate[, for a reasonable period of time established by its board,] no less than [25%] 100% to be used in conjunction with housing to be constructed or rehabilitated with assistance under this act.

b. [The agency shall to the extent of available funds, award assistance to affordable housing programs located in municipalities whose housing elements have received substantive certification from the council, or which have been subject to a builder's remedy or which are in furtherance of a regional contribution agreement approved by the council. During the first 12 months from the effective date of this act and for any additional period which the council may approve, the agency may assist affordable housing programs which are not located in municipalities whose housing elements have been granted substantive certification or which are not in furtherance of a regional contribution agreement; provided the affordable housing program will meet all or in part a municipal low and moderate income housing obligation]. (Deleted by amendment, P.L. , c. (C. )(now before the Legislature as this bill).

c. Assistance provided pursuant to this section may take the form of grants or awards to municipalities, prospective home purchasers, housing sponsors as defined in P.L.1983, c.530 (C.55:14K-1 et seq.), or as contributions to the issuance of mortgage revenue bonds or multi-family housing development bonds which have the effect of achieving the goal of producing affordable housing.

d. Affordable housing programs which may be financed or assisted under this provision may include, but are not limited to:

(1) Assistance for home purchase and improvement including interest rate assistance, down payment and closing cost assistance, and direct grants for principal reduction;

(2) Rental programs including loans or grants for developments containing low and moderate income housing, moderate rehabilitation of existing rental housing, congregate care and retirement facilities;

(3) Financial assistance for the conversion of nonresidential space to residences;

(4) Other housing programs for low and moderate income housing, including infrastructure projects directly facilitating the construction of low and moderate income housing; and

(5) Grants or loans to municipalities, housing sponsors and community organizations to encourage development of innovative approaches to affordable housing, including:

(a) Such advisory, consultative, training and educational services as will assist in the planning, construction, rehabilitation and operation of housing; and

(b) Encouraging research in and demonstration projects to develop new and better techniques and methods for increasing the supply, types and financing of housing and housing projects in the State.

e. The agency shall establish procedures and guidelines governing the qualifications of applicants, the application procedures and the criteria for awarding grants and loans for affordable housing programs and the standards for establishing the amount, terms and conditions of each grant or loan.

f. In consultation with the council, the agency shall establish requirements and controls to insure the maintenance of housing assisted under this act as affordable to low and moderate income households for a period [of not less than 20 years; provided that the agency may establish a shorter period upon a determination that the economic feasibility of the program is jeopardized by the requirement and the public purpose served by the program outweighs the shorter period] consistent with law establishing affordability controls. The controls may include, among others, requirements for recapture of assistance provided pursuant to this act or restrictions on return on equity in the event of failure to meet the requirements of the program. With respect to rental housing financed by the agency pursuant to this act or otherwise which promotes the provision or maintenance of low and moderate income housing, the agency may waive restrictions on return on equity required pursuant to P.L.1983, c.530 (C.55:14K-1 et seq.) which is gained through the sale of the property or of any interest in the property or sale of any interest in the housing sponsor.

g. The agency may establish affordable housing programs through the use or establishment of subsidiary corporations or development corporations as provided in P.L.1983, c.530 (C.55:14K-1 et seq.). The subsidiary corporations or development corporations shall be eligible to receive funds provided under this act for any permitted purpose.

(cf: P.L.1985, c.222, s.21)

11. Section 25 of P.L.1985, c.222 (C.52:27D-325 is amended to read as follows:

25. Notwithstanding any other law to the contrary, a municipality may purchase, lease or acquire by gift or through the exercise of eminent domain, real property and any estate or interest therein, which the municipal governing body determines necessary or useful for the construction or rehabilitation of low and moderate income housing or conversion to low and moderate income housing.

The municipality may provide for the acquisition, construction and maintenance of buildings, structures or other improvements necessary or useful for the provision of low and moderate income housing, and may provide for the reconstruction, conversion or rehabilitation of those improvements in such manner as may be necessary or useful for those purposes.

Notwithstanding the provisions of any other law regarding the conveyance, sale or lease of real property by municipalities, the municipal governing body may, by resolution, authorize the private sale and conveyance or lease of a housing unit or units acquired or constructed pursuant to this section, where the sale, conveyance or lease is to a low or moderate income household or nonprofit entity and contains a contractual guarantee that the housing unit will [remain available to low and moderate income households for a period of at least 30 years] be subject to affordability controls established under law.

(cf: P.L.1990, c.109, s.1)

12. Section 1 of P.L.1985, c.398 (C.52:18A-196) is amended to read as follows:

The Legislature finds and declares that:

a. New Jersey, the nation's most densely populated State, requires sound and integrated Statewide planning and the coordination of Statewide planning with local and regional planning in order to conserve its natural resources, revitalize its urban centers, protect the quality of its environment, and provide needed housing and adequate public services at a reasonable cost while promoting beneficial economic growth, development and renewal;

b. Significant economies, efficiencies and savings in the development process would be realized by private sector enterprise and by public sector development agencies if the several levels of government would cooperate in the preparation of and adherence to sound and integrated plans;

c. It is of urgent importance that the State Development Guide Plan be replaced by a State Development and Redevelopment Plan designed for use as a tool for assessing suitable locations for infrastructure, housing, economic growth and conservation;

d. It is in the public interest to encourage development, redevelopment and economic growth in locations that are well situated with respect to present or anticipated public services and facilities, giving appropriate priority to the redevelopment, repair, rehabilitation or replacement of existing facilities and to discourage development where it may impair or destroy natural resources or environmental qualities that are vital to the health and well-being of the present and future citizens of this State;

e. A cooperative planning process that involves the full participation of State, county and local governments as well as other public and private sector interests will enhance prudent and rational development, redevelopment and conservation policies and the formulation of sound and consistent regional plans and planning criteria;

f. Since the overwhelming majority of New Jersey land use planning and development review occurs at the local level, it is important to provide local governments in this State with the technical resources and guidance necessary to assist them in developing land use plans and procedures which are based on sound planning information and practice, and to facilitate the development of local plans which are consistent with State plans and programs;

g. An increasing concentration of the poor and minorities in older urban areas jeopardizes the future well-being of this State, and a sound and comprehensive planning process will facilitate the provision of equal social and economic opportunity so that all of New Jersey's citizens can benefit from growth, development and redevelopment;

h. An adequate response to judicial mandates respecting housing for low-and moderate-income persons requires sound planning to prevent sprawl and to promote suitable use of land; and

i. These purposes can be best achieved through the establishment of a State planning commission consisting of representatives from [the executive and legislative branches of] State government, local government, the general public and the planning community.

(cf: P.L.1985, c.398, s.1)

13. Section 2 of P.L.1985, c.398 (C.52:18A-197) is amended to read as follows:

2. There is established in the Department of [the Treasury] Community Affairs a State Planning Commission, to consist of 17 members to be appointed as follows:

a. The State Treasurer and four other cabinet members to be appointed by and serve at the pleasure of the Governor. Each cabinet member serving on the commission may be represented by an official designee, whose name shall be filed with the commission. All other members of the cabinet, or their designees, shall be entitled to receive notice of and attend meetings of the commission and, upon request, receive all official documents of the commission;

b. Two other members of the executive branch of State government to be appointed by and serve at the pleasure of the Governor;

c. Four persons, not more than two of whom shall be members of the same political party, who shall represent municipal and county governments, and at least one of whom shall represent the interest of urban areas and at least one of whom shall represent the interest of rural areas, to be appointed by the Governor with the advice and consent of the Senate for terms of four years and until their respective successors are appointed and qualified, except that the first four appointments shall be for terms of one, two, three and four years, respectively. In making these appointments, the Governor shall give consideration to the recommendations of the New Jersey League of Municipalities, the New Jersey Conference of Mayors, the New Jersey Association of Counties, the County Boards of Agriculture, and the New Jersey Federation of Planning Officials;

d. Six public members, not more than three of whom shall be of the same political party, and of whom at least one shall be a professional planner, to be appointed by the Governor with the advice and consent of the Senate for terms of four years and until their respective successors are appointed and qualified, except that of the first six appointments, one shall be for a term of one year, one for a term of two years, two for a term of three years and two for a term of four years.

Vacancies in the membership of the commission shall be filled for the unexpired terms only in the same manner as the original appointments were made. Members shall receive no compensation for their services but shall be entitled to reimbursement for expenses incurred in the performance of their official duties.

Members of the commission shall be subject to the provisions of the "New Jersey Conflicts of Interest Law," P.L.1971, c.182 (C.52:13D-12 et seq.).

(cf: P.L.1985, c. 398, s.2)

14. Section 4 of P.L.1985, c.398 (C.52:18A-199) is amended to read as follows:

4. The commission shall:

a. Prepare and adopt within 36 months after the enactment of [this act] P.L.1985, c.225 (C.52:18A-199 et seq.), and revise and readopt at least every [three] six years thereafter, the State Development and Redevelopment Plan, which shall provide a coordinated, integrated and comprehensive plan for the growth, development, renewal and conservation of the State and its regions and which shall identify areas for growth, agriculture, open space conservation and other appropriate designations;

b. [Prepare and adopt as part of the plan a long-term Infrastructure Needs Assessment, which shall provide information on present and prospective conditions, needs and costs with regard to State, county and municipal capital facilities, including water, sewerage, transportation, solid waste, drainage, flood protection, shore protection and related capital facilities] (Deleted by amendment, P.L. , c. (C. )(now before the Legislature as this bill);

c. Develop and promote procedures to facilitate cooperation and coordination among State agencies and local governments with regard to the development of plans, programs and policies which affect land use, environmental, capital and economic development issues;

d. Provide technical assistance to local governments in order to encourage the use of the most effective and efficient planning and development review data, tools and procedures;

e. Periodically review State and local government planning procedures and relationships and recommend to the Governor and the Legislature administrative or legislative action to promote a more efficient and effective planning process; and

f. [Review any bill introduced in either house of the Legislature which appropriates funds for a capital project and may study the necessity, desirability and relative priority of the appropriation by reference to the State Development and Redevelopment Plan, and may make recommendations to the Legislature and to the Governor concerning the bill; and] (Deleted by amendment, P.L. , c. (C. )(now before the Legislature as this bill)

g. Take all actions necessary and proper to carry out the provisions of this act.

(cf: P.L.1987, c.308, s.1)

15. Section 5 of P.L.1984, c.398 (C.52:18A-200) is amended to read as follows:

5. The State Development and Redevelopment Plan shall be designed to represent a balance of development and conservation objectives best suited to meet the needs of the State. The plan shall:

a. [Protect] Identify areas to be preserved to protect the natural resources and qualities of the State, including, but not limited to, agricultural development areas, fresh and saltwater wetlands, flood plains, stream corridors, aquifer recharge areas, steep slopes, areas of unique flora and fauna, and areas with scenic, historic, cultural and recreational values;

b. [Promote] Identify areas to promote development and redevelopment in a manner consistent with sound planning and where infrastructure can be provided at private expense or with reasonable expenditures of public funds. This should not be construed to give preferential treatment to new construction nor shall any one type of development model, such as center designation, be required to the exclusion of alternative patterns of development, in a particular planning area;

c. Consider input from State, county and municipal entities concerning their land use, environmental, capital and economic development plans, including to the extent practicable any State plans concerning natural resources or infrastructure elements;

d. Identify areas for growth, limited growth, agriculture, open space conservation and other appropriate designations that the commission may deem necessary;

e. Incorporate a reference guide of technical planning standards and guidelines used in the preparation of the plan; and

f. [Coordinate planning activities and establish Statewide planning objectives in the following areas] Consider planning objectives established by the Legislature and State agencies concerning : land use, housing, economic development, transportation, natural resource conservation, agriculture and farmland retention, recreation, urban and suburban redevelopment, historic preservation, public facilities and services, and intergovernmental coordination.

(cf: P.L.1985, c.398, s.5)

16. Section 6 of P.L.1984, c.398 (C.52:18A-201) is amended to read as follows:

6. a. There is established in the Department of [the Treasury] Community Affairs the Office of State Planning. The director of the office shall be appointed by and serve at the pleasure of the Governor. The director shall supervise and direct the activities of the office and shall serve as the secretary and principal executive officer of the State Planning Commission.

b. The Office of State Planning shall assist the commission in the performance of its duties and shall:

(1) Publish an annual report on the status of the State Development and Redevelopment Plan which shall describe the progress towards achieving the goals of the plan, the degree of consistency achieved among municipal, county and State plans [, the capital needs of the State, and progress towards providing housing where such need is indicated];

(2) Provide planning service to other agencies or instrumentalities of State government, review the plans prepared by them, and coordinate planning to avoid or mitigate conflicts between plans;

(3) Provide advice and assistance to county and local planning units;

(4) Review and comment on the plans of interstate agencies where the plans affect this State;

(5) Compile quantitative current estimates and Statewide forecasts for population, employment, housing and land needs for development and redevelopment; and

(6) Prepare and submit to the State Planning Commission, as an aid in the preparation of the State Development and Redevelopment Plan, alternate growth and development strategies which are likely to produce favorable economic, environmental and social results.

c. The director shall ensure that the responsibilities and duties of the commission are fulfilled, and shall represent the commission and promote its activities before government agencies, public and private interest groups and the general public, and shall undertake or direct such other activities as the commission shall direct or as may be necessary to carry out the purposes of this act.

d. With the consent of the commission, the director shall assign to the commission from the staff of the office at least two full-time planners, a full-time liaison to local and county governments, and such other staff, clerical, stenographic and expert assistance as he shall deem necessary for the fulfillment of the commission's responsibilities and duties.

(cf: P.L.1985, c.398, s.6)

17. Section 7 of P.L.1984, c.398 (C.52:18A-202) is amended to read as follows:

7. a. In preparing, maintaining and revising the State Development and Redevelopment Plan, the commission shall solicit and give due consideration to the plans, comments and advice of each county and municipality, State agencies designated by the commission and other local and regional entities. Prior to the adoption of each plan, the commission shall prepare and distribute a preliminary plan to each county planning board, municipal planning board and other requesting parties, including State agencies and metropolitan planning organizations. Not less than 45 nor more than 90 days thereafter, the commission shall conduct a joint public informational meeting with each county planning board in each county for the purpose of providing information on the plan, responding to inquiries concerning the plan, and receiving informal comments and recommendations from county and municipal planning boards, local public officials and other interested parties.

b. The commission shall negotiate plan cross-acceptance with each county planning board, which shall solicit and receive any findings, recommendations and objections concerning the plan from local planning bodies. Each county planning board shall negotiate plan cross-acceptance among the local planning bodies within the county, unless it shall notify the commission in writing within 45 days of the receipt of the preliminary plan that it waives this responsibility, in which case the commission shall designate an appropriate entity, or itself, to assume this responsibility. Each board or designated entity shall, within ten months of receipt of the preliminary plan, file with the commission a formal report of findings, recommendations and objections concerning the plan, including a description of the degree of consistency and any remaining inconsistency between the preliminary plan and county and municipal plans. [In any event, should any municipality's plan remain inconsistent with the State Development and Redevelopment Plan after the completion of the cross-acceptance process, the municipality may file its own report with the State Planning Commission, notwithstanding the fact that the County Planning Board has filed its report with the State Planning Commission] The report shall include a resolution from the governing body of each municipality in the county stating its concurrence with or objections to the report. If a resolution is not received from a municipality within 90 days of a request, then concurrence with the report will be assumed.

The term cross-acceptance means a process of comparison of planning policies among governmental levels with the purpose of attaining compatibility between local, county and State plans. The process is designed to result in a written statement specifying areas of agreement or disagreement and areas requiring modification by parties to the cross-acceptance.

The commission shall engage in a mediation and review process if a request for mediation and review is made pursuant to this section.

If the mediation is successful, the commission shall issue an order directing modification of the plan in accordance with the mediation.

If the mediation efforts are unsuccessful, the matter shall be transferred to the Office of Administrative Law as a contested case as defined in the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

The Office of Administrative Law shall expedite its hearing process as much as practicable by promptly assigning an administrative law judge to the matter; promptly scheduling an evidentiary hearing; expeditiously conducting and concluding the evidentiary hearing; limiting the time allotted for briefs, proposed findings of fact, conclusions of law, forms of order or other disposition, or other supplemental material; and the prompt preparation of the initial decision. A written transcript of all oral testimony and copies of all exhibits introduced into evidence shall be submitted to the commission by the Office of Administrative Law simultaneously with a copy of the initial decision. The evidentiary hearings shall be concluded and the initial decision issued no later than 90 days after the transmittal of the matter as a contested case to the Office of Administrative Law by the commission, unless the time is extended by the Director of the Office of Administrative Law for good cause shown.

c. Upon consideration of the formal reports of the county planning boards, the commission shall prepare and distribute a final plan to county and municipal planning boards and other interested parties. [The commission shall conduct not less than six public hearings in different locations throughout the State for the purpose of receiving comments on the final plan. The commission shall give at least 30 days' public notice of each hearing in advertisements in at least two newspapers which circulate in the area served by the hearing and at least 30 days' notice to the governing body and planning board of each county and municipality in the area served by the hearing.]

d. [Taking full account of the testimony presented at the public hearings, the commission shall make revisions in the plan as it deems necessary and appropriate and adopt the final plan by a majority vote of its authorized membership no later than 60 days after the final public hearing] If a municipal planning board desires changes in the adopted plan, it shall petition the Commission for consideration and a hearing. If the Commission rejects the changes requested, the municipality may appeal to the Office of Administrative Law .

(cf: P.L.1998, c.109, s.1)

18. The Department of Community Affairs, the State Planning Commission, the New Jersey Housing and Mortgage Finance Agency and the Council on Affordable Housing shall modify within 90 days any regulation or methodology which is not in conformance with the provisions of P.L. , c. (C. )(now before the Legislature as this bill).

19. Sections 1 through 6 of P.L.1991, c.479 (C.52:27D-307.1

to 52:27D-307.5) are repealed.

20. This act shall take effect immediately.

STATEMENT

This bill is based on the recommendations of the Assembly Task Force to Study The "Fair Housing Act" and the "State Planning Act," which was established pursuant to Assembly Resolution 158 of 2000, which bill was filed with the Secretary of State on December 12, 2000. The task force was formed to conduct a review the implementation and impact of the "Fair Housing Act" and the "State Planning Act," since no comprehensive legislative review had been undertaken during the 15 years subsequent to the passage of those acts.

The intent of this bill is make those changes to the "Fair Housing Act" and the "State Planning Act" which will facilitate the process for a municipality to meet its constitutional obligation as enunciated by the New Jersey Supreme Court under the Mount Laurel decisions, and which will coordinate the various fiscal policies of the State in providing for affordable housing.

The bill directs the New Jersey Housing and Mortgage Finance Agency (HMFA) to coordinate affordable housing financing programs with COAH, and to assist municipalities seeking financing for affordable housing. The bill would change the housing regions from the six regions currently in effect to each county as a separate housing region. The bill would permit occupancy preferences for residents who work or live in the county to occupy affordable housing built or rehabilitated in the county.

The bill creates some additional funding for affordable housing, and creates responsibility for State agencies to coordinate funding programs and assist municipalities in receiving credit for the affordable housing built or rehabilitated. The bill does not increase the realty transfer fee, but instead modifies the current exemption of $1.00 per $500 value of consideration recited in the deed not in excess of $150,000 for transfers of real property upon which there is new construction to not apply if the housing costs more than $300,000. Sales of new construction for $300,000 or less and sales of new affordable housing would retain the exemption currently under in the law.

The bill also creates new responsibilities for the county recording officer to track affordable housing and new construction. The county recording officer currently records exemptions from realty transfer fees for affordable housing and new construction; therefore the bill is merely requiring reporting of this information. The additional funds the county will receive from previously-exempted new construction should offset any costs associated with these new duties.

The bill also permits the HMFA to utilize the monies in the Neighborhood Preservation Nonlapsing Revolving Fund (NPF) established pursuant to P.L.1985, c.222 (C.52:27D-301 et al.) for new programs and established programs under section 21 of the "Fair Housing Act," in consultation with the commissioner.

The State Planning Act is also amended to require the State Plan to be readopted every six years, in line with housing cycles and the municipal master plan. In addition, the act is amended to require a rural representative on the State Planning Commission, and to require a mediation process as part of the cross-acceptance procedure, similar to that utilized by the Council on Affordable Housing in reviewing substantive certifications.