[First Reprint]

SENATE, No. 2505

STATE OF NEW JERSEY

213th LEGISLATURE

 

INTRODUCED JANUARY 26, 2009

 


 

Sponsored by:

Senator DANA L. REDD

District 5 (Camden and Gloucester)

Senator JEFF VAN DREW

District 1 (Cape May, Atlantic and Cumberland)

 

Co-Sponsored by:

Senators Sweeney, Rice, Madden and Ciesla

 

 

 

 

SYNOPSIS

     Establishes “Smart Housing Incentives Act.”

 

CURRENT VERSION OF TEXT

     As reported by the Senate Community and Urban Affairs Committee on May 18, 2009, with amendments.

  


An Act establishing the “Smart Housing Incentives Act” and supplementing chapter 27D of Title 52 of the Revised Statutes 1and amending P.L.1983, c.3031.

 

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

 

     1.    (New section) This act shall be known and may be cited as the “Smart Housing Incentives Act.”

 

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

     a.  The cost of housing in New Jersey has risen to where housing is no longer affordable for a significant number of the State’s residents, resulting in substantial hardship to large numbers of families and individuals at many income levels, including those with low, moderate and middle incomes, and contributing to the growing outmigration of working households from New Jersey.

     b.  The shortage of opportunities for both homeownership and rental housing affordable to workers, families and young professionals threatens the State’s economy by discouraging businesses from remaining in or moving to New Jersey.

     c.  Among the factors contributing to the high cost of housing in New Jersey is the scarcity of land zoned for housing types that are currently under-represented in housing production, including modest single family houses on small lots, semi-detached and town houses, and multifamily housing.

     d.  In order to mitigate the high cost of housing, there is a need to encourage greater production of those cost and energy-efficient housing types which reflect the consumer preferences of many households, including young people and empty-nesters, and which are under-represented in recent housing production in New Jersey.

     e.  Despite numerous legislative enactments and the efforts of the Council on Affordable Housing and the State Planning Commission, a continuing need remains to provide a greater variety and choice of housing to people of all income levels, but in particular for low and moderate income households, and to direct such housing to appropriate locations based on comprehensive land use planning, as set forth in the landmark decision by the New Jersey Supreme Court in Southern Burlington County NAACP v. Mount Laurel.

     f.  Unless properly located and designed consistent with sound planning principles,  housing construction will continue to sprawl, undermining the vitality of New Jersey’s natural environment,
including its open space and farmland, wildlife habitat, clean water, and clean air.

     g.  By undertaking sound planning and establishing sound standards for location, density, energy efficiency, 1[water conservation,]1 and pedestrian circulation in new housing development and mixed-use development, it is possible to ensure that new developments and redevelopment will 1[be environmentally sustainable,] have reduced environmental impacts, be1 affordable to maintain, and support healthy lifestyles.

     h.  High-quality design and site planning, which can be fostered through inclusion of carefully-drafted design standards into municipal land use ordinances, are essential to ensure that a housing and mixed-use development best serves both the needs of its residents and the community as a whole, by ensuring that it is visually attractive, adds value to surrounding neighborhoods, and increases residents’ quality of life by fostering social interaction, safety, and reducing commuting times.

     i.  Compact housing and mixed-use development 1that meets standards for density, location, and energy-efficient construction,1 results in a more energy-efficient development pattern and fosters less energy use by the residents of such developments, both for heating and cooling and for transportation, thus furthering attainment of the State’s targets for greenhouse gas emissions reduction.

     j.  An increase in the number of opportunities to develop at higher densities in appropriate locations can 1[reduce the pressure for development in other, less suitable, locations and thereby further the State’s objectives of reducing sprawl and fostering smart growth, especially where complemented by efforts to preserve and protect natural resources] channel growth pressure into suitable places with infrastructure and provides one of the necessary and complementary tools for sprawl reduction.  Redevelopment projects in appropriate locations provide especially favorable alternatives to sprawl development1.

     k.  Compact  housing and mixed-use development and redevelopment will foster use of public transportation and further the efficient expansion of public transit systems, as well as encourage pedestrianism and bicycle use.

     l.  1[The cost of housing is often increased by unpredictable and lengthy permit review processes at the State level.  For compact housing and mixed-use development projects that address multiple state objectives, an agreement between the State agencies that regulate residential development projects, including the Departments of Community Affairs, Transportation, and Environmental Protection, can help ensure coordinated and more timely permit review.

     m.]1  In light of these benefits of concentrated and compact development, the Legislature finds that a program of incentives to encourage municipal rezoning for higher density, mixed-income residential development and redevelopment offers significant potential to provide meaningful benefits to the economic, environmental and social sustainability and quality of life for the people of the State of New Jersey.

 

     3.    (New section) As used in P.L.    , c.    (C.      ) (pending before the Legislature as this bill):

     “Basic zoning” means a body of zoning provisions and requirements that represent the sole use and standards for a particular area permitted under the land use ordinance of a municipality.

     “Brownfield” means “brownfield” as defined under subsection d. of section 5 of P.L.1997, c.278 (C.58:10B-23).

     “Commission” means the State Housing Commission established pursuant to section 24 of P.L.2008, c.46 (C.52:27D-329.13).

     “Commissioner” means the Commissioner of Community Affairs.

     “Commuter parking space” means a parking space located in close proximity to a public transit facility designed primarily for use by individuals using that transit facility for commuting purposes.

     “Council” means the Council on Affordable Housing established pursuant to section 5 of P.L.1985, c.222 (C.52:27D-305).

     “Department” means the Department of Community Affairs.

     “Developer fee” means the fee required under subsection a. of section 18 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill).

     “Energy Star” means the joint program of the United States Environmental Protection Agency and the United States Department of Energy known by that name and providing for the certification of energy-efficient products and practices.

     “Greyfields” means sites containing industrial or commercial facilities exhibiting signs of abandonment or underutilization in areas of existing infrastructure, but without exhibiting evidence of actual or potential environmental contamination. For purposes of this act, underutilization means that at least 50 percent of the square footage of the structures on any such site have not been occupied for a period of at least one year prior to the designation of the site as all or part of a smart housing zone.

     “Green investment” means any municipal expenditure for the purpose of protecting or enhancing the natural environment of the municipality, including but not limited to protection of open space through acquisition, remediation, restoration, or improvement; improvements to parks and other public open spaces; and actions to reduce greenhouse gas emissions through energy efficiency, renewable energy, or other programs that result in a measurable reduction in the emission of greenhouse gases or a measurable reduction in energy demand.

     "Low income housing" means "low income housing" as defined under subsection c. of section 4 of P.L.1985, c.222 (C.52:27D-304) and regulations adopted thereunder.

     “Middle income housing” means housing affordable to households earning between 80 percent and 120 percent of the area median income, according to the Council on Affordable Housing’s annual determination of median income for each housing region, adjusted by household size.

     “Moderate income housing” means “moderate income housing” as defined under subsection c. of section 4 of P.L.1985, c.222 (C.52:27D-304) and regulations adopted thereunder.

     “Net new zoned units” means the difference between the total number of residential units permitted within a smart housing zone and the number of residential units permitted within the same area under prior zoning 1, and the total number of residential units permitted within a smart housing zone if prior zoning for the same area did not permit residential uses1 .

     “Overlay zone” means a body of zoning provisions or requirements which are permitted as of right for a particular area in addition to other uses and standards that may also be permitted for the same area under the land use ordinance of the municipality.

     “Prior zoning” means the zoning of an area immediately prior to the establishment of a smart housing zone or the zoning in effect for that area on the effective date of P.L.     c.     (C.    ) (pending before the Legislature as this bill), whichever allows for the development of a greater number of dwelling units.

     “Public transit facility” means an active station, terminal, transfer location, or multi-modal transit hub of rail, bus, ferry transit, or combination thereof, containing fixed platforms, off-street loading areas, or on-street transfer areas, as well as other improvements, including, but not limited to, permanent passenger facilities such as waiting and sitting areas, ticket machines, and transit information displays for the use of riders on the public transit system.  On-street single bus stops are not included in this definition.

     “Residential density” means “residential density” as defined under section 3.3 of P.L.1975, c.291 (C.40:55D-6).

      “Sewer service area” means an area in which sewer service may be provided in accordance with the water quality management planning rules, N.J.A.C.7:15-1.1 et seq., adopted by the Department of Environmental Protection pursuant to the "Water Pollution Control Act," P.L.1977, c.74 (C.58:10A-1 et seq.), the "Water Quality Planning Act," P.L.1977, c.75 (C.58:11A-1 et seq.), and any other applicable laws.

     “Smart housing zone” means an area established by municipal ordinance and approved by the department as a smart housing zone pursuant to section 10 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill).

     “Transit-oriented development area” means an area of high-density concentrated mixed-use development, including residential development, within a one-half mile radius of a public transit facility, planned and designed to take advantage of the proximity of the public transit facility, or any area planned for such development by the municipality, and shall include any transit village designated by the Transit Village Task Force.

     “Urban center” means a municipality containing an area that has been designated as an urban center in the State Development and Redevelopment Plan adopted by the State Planning Commission pursuant to P.L.1985, c.398 (C.52:18A-196 et seq.).

     1“Wastewater treatment facility” means a plant or other facility used for the treatment of wastewater from a surrounding area, not to include individual subsurface sewage disposal systems.1

 

     4.    (New section) The governing body of a municipality may apply to the Department of Community Affairs for the establishment of a smart housing zone in accordance with procedures set forth in section 10 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill) and regulations adopted pursuant thereto.  The governing body of a municipality interested in investigating whether to establish a smart housing zone may apply to the department for a smart housing zone planning and visioning grant pursuant to section 12 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill) and regulations adopted pursuant thereto. 1[A] The department shall establish requirements for a1 preliminary application for the establishment of a smart housing zone 1[shall include] including, but not limited to1:

     a.  Proofs sufficient to document that the proposed smart housing zone satisfies the requirements for locating a zone under section 5 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill), including maps showing existing land uses in the proposed zone and the surrounding area.

     b.  A copy of the draft proposed ordinance establishing the smart housing zone, complying with section 6 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill).

     c.  Documentation and maps showing all relevant development conditions and constraints, including dedicated open space, floodplains, steep slopes, stream corridors, wetlands, and threatened and endangered species habitat, affecting the proposed smart housing zone, including a site analysis demonstrating that the number of net new zoned units for which incentives are sought can realistically be accommodated in the proposed zone.

     d.  Documentation showing the availability of infrastructure necessary for the development planned for the proposed smart housing zone, including adequate roads, sewerage facilities, water supply and drainage infrastructure, and water and wastewater treatment capacity, or a commitment to provide infrastructure necessary to allow development of the area to proceed in a timely fashion.

     e.  Evidence that the number and type of dwelling units proposed for the smart housing zone can be produced in a timely fashion and is realistic in light of market demand in the housing region and market conditions within the municipality.

     f.  A description of the anticipated build-out of the zone.

 

     5.    (New section) a.  A smart housing zone shall be located in a geographic area in which an appropriate scale of growth, in the form of construction of significant additional housing and mixed-use development, is considered important and desirable, as determined pursuant to:

     (1) the "State Planning Act," P.L.1985, c.398 (C.52:18A-196 et al.);

     (2) the "Pinelands Protection Act," P.L.1979, c.111 (C.13:18A-1 et seq.);

     (3) the "Highlands Water Protection and Planning Act," P.L.2004, c.120 (C.13:20-1 et al.); or

     (4) the "Hackensack Meadowlands Reclamation and Development Act," P.L.1968, c.404 (C.13:17-1 et seq.),

     or regulations adopted pursuant to the acts referenced in this subsection, either in effect on the effective date of P.L.    , c.    (C.    ) (pending before the Legislature as this bill) or on the date the application is received.

     b.  A smart housing zone shall be located in either an approved sewer service area, or in a location with existing on-site connections to a wastewater treatment 1[system] facility1.

     c.  A smart housing zone shall satisfy at least one of the following additional criteria:

     (1) A majority of a smart housing zone shall be located within a one-half mile radius of an existing public transit facility, or a planned public transit facility for which construction funds have been formally committed by the New Jersey Department of Transportation or New Jersey Transit in the first four years of either agency’s adopted capital program; provided, however, that the commissioner may approve an application for a smart housing zone that is located within a three-quarter mile radius of a public transit facility if the commissioner determines that the pedestrian connections and other connections between the smart housing zone and the public transit facility are particularly strong and likely to be highly utilized; or

     (2) A majority of a smart housing zone shall be located within an area of concentrated development, including village, town, and urban centers as shown on the State Plan Policy Map prepared by the State Planning Commission pursuant to P.L.1985, c.398 (C.52:18A-196 et seq.), and other existing largely-developed areas characterized by mixed use and medium-to-high density of development; or

     (3) A smart housing zone shall be located within an area identified by the municipal master plan or master plan re-examination report, as appropriate, for increased density, either through residential or mixed-use development; or

     (4) A smart housing zone shall contain one or more brownfield or greyfields sites.

 

     6.    (New section) a.  A municipality may establish a smart housing zone 1[by adopting a land-use ordinance]1, subject to the approval of the Department of Community Affairs pursuant to section 10 of P.L.    , c.    (C.   ) (pending before the Legislature as this bill), 1by adopting a land-use ordinance1 containing the following:

     (1)  Provisions satisfying the minimum standards for residential density set forth in section 7 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill).

     (2)  Provisions requiring that 1[the combined total number of low income housing units, moderate income housing units and middle income housing units to be constructed in the smart housing zone shall comprise]1 at least 1[30%] 10%1 of the total number of housing units to be constructed in the zone 1shall be middle income housing units.  The provisions may require the construction of middle income housing units exceeding those required pursuant to this section provided that the increased affordability thresholds shall not unduly restrict opportunities for development1.  The initial occupants of middle income units shall be restricted to income-eligible tenants and owners.

     (3)  Provisions requiring that all low income housing units and moderate income housing units required pursuant to the regulations of the Council on Affordable Housing as a result of development in the smart housing zone shall be constructed within the zone.  1The provisions may require the construction of low income housing units and moderate income housing units exceeding those required pursuant to the regulations of the Council on Affordable Housing, provided that the establishment of increased affordability thresholds shall not unduly restrict opportunities for development.1

     (4) Provisions requiring the development of ground floor retail, service or similar commercial facilities along the frontage of any street of strong commercial character in a downtown area or transit-oriented development area, unless 1the department determines such development to be1 infeasible 1or inappropriate1 due to site or other considerations,

     (5) Provisions requiring all streets and pedestrian pathways through a smart housing zone to be fully accessible to the general public, and all developments in a smart housing zone to be connected to the surrounding street network in order to promote pedestrian circulation within the zone and to and from locations outside the zone.

     (6) Provisions requiring all residential units in a smart housing zone to satisfy energy efficiency standards under the New Jersey 1[Home Performance with]1 Energy Star 1Homes1 program or the code promulgated pursuant to the “State Uniform Construction Code Act,” P.L.1975, c.217 (C.52:27D-119 et seq.), whichever promotes greater energy efficiency.

     (7) 1[Provisions requiring all residential units in a smart housing zone to satisfy the standards and practices for efficient water use and conservation in accordance with regulations promulgated pursuant to section 16 of P.L.     , c.    (C.    ) (pending before the Legislature as this bill).

     (8)]1 Provisions ensuring that no more than 25% of the number of dwelling units to be constructed in a smart housing zone are restricted for occupancy on the basis of the age of an occupant.

     b.  The land use ordinance establishing a smart housing zone may take the form of basic zoning or an overlay zone, but must permit the zone as an as-of-right use and may not impose any regulatory or other requirement on development within the zone that is not imposed on other permitted uses in that area.

 

     7.    (New section) a.  A land use ordinance establishing a smart housing zone shall 1[provide] require a1 minimum residential density 1[requirements]1 within the zone that 1[are] is1 equal to or greater than 1the greatest of the following1:

     (1) 25% above the minimum residential density requirements set forth in the prior zoning of the area,

     (2) 25% above the minimum presumptive density applicable to the area according to 1the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), and the1 rules and regulations adopted by the Council on Affordable Housing 1pursuant thereto1, and

     (3) the following minimum density requirements:

     (a) smart housing zones in central business districts or transit-oriented development areas of urban centers shall have a minimum residential density of 50 dwelling units per acre.

     (b) smart housing zones outside of central business districts or transit-oriented development areas, but within urban centers, shall have a minimum residential density of no less than the average residential density in the surrounding area, or the standards set forth in subparagraph (d) of this paragraph, whichever is greater.

     (c) smart housing zones in central business districts or transit-oriented development areas that are not within urban centers shall have a minimum residential density of 25 dwelling units per acre.

     (d) smart housing zones outside of central business districts or transit-oriented development areas and not within urban centers shall have a minimum residential density of no less than:

     (i) 8 dwelling units per acre for single-family detached units,

     (ii) 10 dwelling units per acre for duplex, twin or townhouse units, and

     (iii) 20 dwelling units per acre for multifamily units.

     b.  For the purposes of this section, “central business district” means the traditional retail and office core of a municipality characterized by a predominance of non-residential land uses and development densities typically higher than in the rest of the municipality.

     c.  A land use ordinance establishing a smart housing zone may set forth a lower minimum density requirement than required pursuant to subsection a. of this section if that minimum density is set forth in the department approval of the application to establish the zone pursuant to section 10 of P.L.    , c.    (C.      ) (pending before the Legislature as this bill).

 

     8.    (New section) A land use ordinance establishing a smart housing zone may contain the following:

     a.  Provisions allowing for mixed-use development as long as minimum residential density requirements are satisfied.

     b.  Provisions setting forth 1[site plan and]1 design standards 1[, including, but not limited to, provisions governing building scale and proportion; site coverage; street and sidewalk alignment, width, and grade; building locations; doorways and garage entrances; treatment of natural, historical or environmental features; designation, location and design of open spaces; signage; design of buffers with adjacent properties] to ensure that construction within the zone fosters pedestrian activity, social interaction, a sense of safety, strengthens community character, and is complementary to adjacent and neighboring buildings, structures, open spaces, and streets1. Design standards may not be so restrictive that they unduly restrict development, reduce the number of units that can realistically be accommodated in the area relative to the facial provisions of the land use regulations, or potentially impair the ability of the developer to provide the required low income housing, moderate income housing and middle income housing in an economically feasible manner.

     c.  Provisions allowing for reductions to the number of parking spaces otherwise required and provisions allowing for shared parking; however, any provision allowing for the reduction of preexisting surface commuter parking spaces in a transit-oriented development area shall require the creation of a similar number of new commuter parking spaces in a parking structure, and shall not result in a net loss in the number of commuter parking spaces without the prior written approval of New Jersey Transit.

     1d. Such other provisions which are consistent with the language and purpose of the “Smart Housing Incentives Act” as the commissioner may authorize by regulations adopted pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).1

 

     9.    (New section) All projects undertaken in a smart housing zone shall be subject to the requirements of section 4 of P.L.1970, c.268 (C.13:1B-15.131), concerning historic places, as if the project is being undertaken by the State, a county, municipality, or an agency or instrumentality of any thereof.

 

     10.  (New section) a.  There is established in the Department of Community Affairs the “Smart Housing Incentives Program” under which the department shall review and may approve applications submitted by municipalities for the establishment of smart housing zones. Approval of a smart housing zone shall entitle a municipality that establishes a zone to the right to receive incentive payment grants in accordance with the provisions of section 11 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill) and regulations adopted by the department.  Approval of a smart housing zone shall establish the requirement for a developer to pay a developer's fee for each net new zoned unit of middle income and market-rate housing that the developer constructs in the smart housing zone in accordance with the provisions of section 18 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill) and regulations adopted by the department.

     b. (New section) 1[The department] Within 120 days of enactment of P.L.    , c.    (C.    ) (pending before the Legislature as this bill), the commissioner1 shall promulgate 1[procedures] regulations1 governing the review and approval of applications submitted by municipalities for establishment of smart housing zones, including criteria for determining whether an application is complete.  The procedures shall provide for the submission of a preliminary application, in accordance with the requirements of section 4 of P.L.    c.    (C.    ) (pending before the Legislature as this bill) and other criteria determined appropriate by the department.

     1[c.  Within 90 days of receipt of a complete preliminary application, the department shall either approve the preliminary application, conditionally approve the preliminary application, or reject the preliminary application.  If the department rejects the preliminary application or conditionally approves the preliminary application, it shall provide the municipality with a complete written explanation of the reasons for rejection or the conditions for approval.  A municipality may resubmit a rejected preliminary application by addressing any deficiencies in a prior application.

     d.]1  The procedures shall allow a municipality that has received preliminary approval to submit a final application to the department, together with proof of adoption of the proposed ordinance and any other required action or amendment to the proposed ordinance that the department may have required as a condition of final approval.  The department shall 1[issue an approval or rejection of a final application within 60 days of submission of a complete final application] establish procedures for prompt review of both preliminary and final applications, whereby it shall approve the application, approve the application with changes, or reject the application within 90 days1.  If the department rejects the 1[final]1 application, it shall provide the municipality with a complete written explanation of the reasons for rejection.

     1c.  The department shall send a copy of every application to the Department of Environmental Protection, the Department of Transportation, and the Office of Smart Growth, which shall have the opportunity, within 10 days, to notify the department of any significant regulatory or planning issues regarding development within the proposed smart housing zone.

     d.  The department shall not approve an application for a smart housing zone if, prior to the date of submission of a preliminary application, the residential density requirements for the area comprising the proposed zone satisfied the minimum residential density requirements set forth in section 7 of P.L.  , c. (C.     ) (pending before the Legislature as this bill).1

     e.  The department may approve an application setting forth a lower minimum residential density requirement than required under subsection a. of section 7 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill), if the department finds that the municipality demonstrated that the required density is not realistically achievable due to environmental considerations or other constraints rendering a significant part of the proposed smart housing zone inappropriate for development.

     f.  The department may establish criteria and adopt procedures to rank pending applications according to priority criteria in the event the costs associated with all pending applications exceeds, or is likely to exceed, the amount of available funds.

     g.  The department shall impose as a condition of approval of every final application that the municipality 1annually1 submit to the department 1[an annual] a1 report 1[.  An annual report shall include information on any] briefly describing the status of1 applications for development, approvals, or construction of developments within the smart housing zone, and documentation of the manner in which the municipality has expended any incentive payments received for green investments.

     h.  The department shall 1have the authority to1 promulgate rules, regulations and procedures pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), within 90 days of enactment of P.L.    , c.    (C.    ) (pending before the Legislature as this bill), as may be necessary for the efficient and effective implementation of this act.

 

     11.  (New section) a.  The department shall develop procedures and timeframes ensuring the proper disbursement of incentive payment grants to each municipality that establishes a smart housing zone in accordance with the following amounts:

     (1)  An initial incentive payment of $1,000 per net new zoned unit.

     (2)  A subsequent incentive payment of $4,000 per net new zoned unit for which a certificate of occupancy is issued.

     b.  A municipality shall not be eligible to receive incentive payment grants for more than 500 net new zoned units within the first five years following the effective date of P.L.    , c.    (C.    ) (pending before the Legislature as this bill).

     c.  (1) A municipality that has received an initial incentive payment pursuant to subsection a. of this section shall not repeal or modify the ordinance establishing the smart housing zone without the prior written approval of the department.

     (2) A municipality that repeals or modifies an ordinance establishing a smart housing zone without receiving prior written approval of the department shall be required to return an amount equivalent to all incentive payments received, unless the department determines that the modifications do not reduce the number of net new zoned units or impose any additional burdens on development in the zone.

     d.  A municipality may appropriate and expend incentive payment grant revenues for services and capital expenditures reasonably related to additional residents, including but not limited to parks, public libraries, or other facilities; or operating expenditures, such as incremental police, fire, or public works services; provided, however, that at least half of the incentive payments received by a municipality shall be used for green investments.

 

     12.  (New section) a. The 1[Department of Community Affairs may award smart housing zone planning and visioning grants to municipalities, but shall not expend more than a total amount of $1 million annually for that purpose. Funds for planning and visioning grants shall be transferred to a “planning and visioning grant fund,” to be established by the department, by the following departments and agencies in the following amounts, unless the departments and agencies agree to a different apportionment.

     (1) the Department of Community Affairs Smart Futures grant program in the amount of $350,000;

     (2) the Department of Transportation and New Jersey Transit programs with funds for planning in transit-oriented development areas including the Transit Village program in the amount of $325,000; and

     (3)]  governing body of a municipality may seek funds for planning and visioning grants for a prospective smart housing zone from1 the Department of Environmental Protection’s share of the Global Warming Solutions Fund that is allocated to promote local government efforts to reduce greenhouse gas emissions 1[in the amount of $325,000] .  The governing body of a municipality in which an urban enterprise zone is located may apply to the Urban Enterprise Zone Authority to fund planning and visioning for a prospective smart housing zone from moneys deposited in the enterprise zone assistance fund and credited to the account maintained by the State Treasurer for the enterprise zone.

     (1) The Department of Environmental Protection shall set aside a minimum of 5% of funds from the Global Warming Solutions Fund Local Government Greenhouse Gas Reduction Program for the purpose of providing planning and visioning grants to municipalities pursuing a prospective smart housing zone.  These funds will be allocated through, and be consistent with, requirements of the Department of Environmental Protection Local Government Greenhouse Gas Reduction Program.  Changing the State's land use and development patterns is an important way to reduce energy demand and the emission of greenhouse gases.  Land use planning that quantifies the anticipated reductions in energy demand and greenhouse gas emissions of new land use patterns and policies is a necessary and integral first step toward the development of land use patterns and policies that will result in the measurable reduction of the emission of greenhouse gases or a measurable reduction in energy demand.  As such, this type of land use planning is eligible for funding under the Global Warming Solutions Fund, and other similarly dedicated sources of funds.

     (2)  The Urban Enterprise Zone Authority shall evaluate and approve proposals to fund planning and visioning for a prospective smart housing zone, in accordance with the evaluation and approval process and criteria set forth in section 29 of P.L.1983, c.393 (C.52:27H-88)1

     b.  1[The Department of Community Affairs shall establish application and eligibility requirements for smart housing zone planning and visioning grants, however, no] No1 grant shall be awarded to a municipality unless it can demonstrate that the area of a prospective smart housing zone for which a planning and visioning grant is sought meets the criteria governing the location of smart housing zones set forth in section 5 of P.L.    , c.     (C.     ) (pending before the Legislature as this bill).

     c.  Planning and visioning activities conducted with funds provided 1[by the department]1 under this section shall incorporate opportunities for meaningful participation by residents of the municipality and of the immediate neighborhood or area in which the proposed smart housing zone is to be located, including but not limited to public meetings, design workshops and other participatory planning activities.

     d.  As a condition of receiving a planning and visioning grant, a municipality shall submit to the 1[department] funding agency1 , within such time frame as the 1[department] funding agency1 establishes, a report setting forth the findings and conclusions of the municipality’s planning and visioning activity, including the elements necessary for submitting a preliminary application  for a smart housing zone, or the reasons that the municipality has determined to not establish a smart housing zone.

 

     13.  (New section) a.  A municipality that establishes a smart housing zone and an applicant of a development within a smart housing zone, as appropriate, shall 1[be entitled to priority] receive favorable consideration for1 assistance under the following programs:

     (1) Housing and planning assistance programs of the Department of Community Affairs, including, but not limited to, the New Jersey Affordable Housing Trust Fund,

     (2) All programs of local assistance of the Department of Transportation, including municipal aid, discretionary aid, Transportation Enhancement program, Centers of Place program, and the Transit Village program,

     (3) Financing programs of the New Jersey Environmental Infrastructure Trust, created pursuant to section 4 of P.L.1985, c.334 (C.58:11B-4),

     (4) Federal Low Income Housing Tax Credit allocations by the New Jersey Housing and Mortgage Finance Agency,

     (5) The Green Acres program of the Department of Environmental Protection,

     (6) The Farmland Preservation program of the Department of Agriculture, and

     (7) The Wastewater Management Plans under the Water Quality Management Planning rules of the Department of Environmental Protection 1;

     (8) Any programs at the Department of Environmental Protection or the Department of Transportation to prioritize permit processing for development projects that further the State’s goals and objectives1  .

     b.  1[The departments and agencies responsible for administering the programs identified in subsection a. of this section shall afford applicants and municipalities priorities consistent with subsection a. of this section and with other statutes and regulations.  They shall promulgate rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to accomplish this purpose.

     c. ]1 The Department of Community Affairs shall establish on its official website a central repository of information designed to provide information 1[on the priorities offered pursuant] relative to programmatic provisions offered pursuant1 to the requirements of this section 1[ , including links to all rules and regulations adopted pursuant to subsection b. of this section,]1 and shall distribute to each municipality, at the time it receives approval of a final application to establish a smart housing zone, information concerning the 1[priorities] programmatic provisions1 offered pursuant to the requirements of this section.

     1[d.] c.1  The Board of Public Utilities shall amend the rules governing the Smart Growth Infrastructure Investment Program, N.J.A.C.14:3-8.12, to provide that a smart housing zone shall be deemed eligible for benefits under that program.

 

     14.  (New section) The commissioner shall develop an administrative process affording a due process to render determinations as to whether actions of a municipality are inconsistent with the intent and purpose of P.L.    , c.    (C.    ) (pending before the Legislature as this bill) or inconsistent with the municipal ordinance establishing a smart housing zone.  If the commissioner finds and determines that the actions of a municipality are inconsistent with the intent and purpose of P.L.    , c.    (C.    ) (pending before the Legislature as this bill), the commissioner shall notify the municipality of the commissioner’s findings, specify actions the municipality may take to address those findings, and afford the municipality an appropriate period of time to take action.  If a municipality does not take such action, or institute an appeal to a court of law, within the time afforded, the municipality shall forfeit the right to receive incentive payments under section 11 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill), be required to return all incentive payments received prior thereto and lose any priority for any pending application for any grant or other approval sought pursuant to section 13 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill).

 

     15.  (New section) a. The State Housing Commission shall include in the Annual Strategic Housing Plan required by section 27 of P.L.2008, c.46 (C.52:27D-329.16), an inventory of planned and projected activities within smart housing zones and its findings and recommendations after reviewing the report submitted by the department pursuant to subsection c. of this section.

     b.  The Department of Community Affairs shall review the “Smart Housing Incentives Program” on an annual basis with interested parties, including developers, municipal officials, planners, environmentalists, and housing advocates.

     c.  The department shall prepare and submit to the commission and the Legislature an annual report on the “Smart Housing Incentives Program,” which shall include but not be limited to information about applications received, incentives awarded, payments and transfers to "The Smart Housing Fund," and the number, type and other features of residential dwelling units provided for, approved, and constructed under the program.  The report shall include information and recommendations for changes to the program proposed at the annual review required under subsection b. of this section.  The report shall be available on the department's web site.

     d.  The commission, in consultation with the department, shall 1[prepared] prepare1 and submit to the Legislature a detailed report evaluating the “Smart Housing Incentives Program,” within three years of the effective date of P.L.    , c.   (C.    ) (pending before the Legislature as this bill).  The report shall include the commission’s recommendations for changes to the program that it deems appropriate to improve the effectiveness of the program.

 

     1[16.  The Department of Community Affairs, in consultation with the Department of Environmental Protection and the Board of Public Utilities, shall promulgate regulations establishing standards and practices for efficient residential water use and conservation.]1

 

     116.  Section 29 of P.L.1983, c.303 (C.52:27H-88) is amended to read as follows:

     29. a. There is created an enterprise zone assistance fund to be held by the State Treasurer, which shall be the repository for all moneys required to be deposited therein under section 21 of P.L.1983, c.303 (C.52:27H-80) or moneys appropriated annually to the fund.  All moneys deposited in the fund shall be held and disbursed in the amounts necessary to fulfill the purposes of this section and subject to the requirements hereinafter prescribed.  The State Treasurer may invest and reinvest any moneys in the fund, or any portion thereof, in legal obligations of the United States or of the State or of any political subdivision thereof.  Any income from, interest on, or increment to moneys so invested or reinvested shall be included in the fund.

     The State Treasurer shall maintain separate accounts for each enterprise zone designated under P.L.1983, c.303 (C.52:27H-60 et al.), and one in the authority's name for the administration of the Urban Enterprise Zone program.  The State Treasurer shall credit to each account an amount of the moneys deposited in the fund equal to the amount of revenues collected from the taxation of retail sales made in the zone and appropriated to the enterprise zone assistance fund, or that amount of moneys appropriated to the fund and required to be credited to the enterprise zone account of the qualifying municipality pursuant to section 21 of P.L.1983, c.303 (C.52:27H-80).

     The State Treasurer shall promulgate the rules and regulations necessary to govern the administration of the fund for the purposes of this section, which shall include, but not be limited to, regulations requiring the establishment of separate bank accounts for funds credited to the enterprise zone account of each municipality from the enterprise zone assistance fund, commonly known as "first generation funds," and funds generated from the repayments of loans to individuals and businesses from the enterprise zone account of each municipality and the proceeds from the sale of properties and equipment acquired through the enterprise zone program, commonly known as "second generation funds," and the review, compilation, and monitoring of second generation fund quarterly reports submitted by each enterprise zone.

     Any individual, including an individual who is not directly employed by a municipality, with the authority to administer, allocate or approve the use of zone assistance funds is subject to the "Local Government Ethics Law," P.L.1991, c.29 (C.40A:9-22.1 et seq.), unless the individual is a State employee or a special State officer.

     b.    The enterprise zone assistance fund shall be used for the purpose of assisting qualifying municipalities in which enterprise zones are designated in undertaking public improvements, economic development projects , planning and visioning of smart housing zones pursuant to section 11 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill), and in upgrading eligible municipal services in designated enterprise zones.

     c.     The governing body of a qualifying municipality in which an enterprise zone is designated and the zone development corporation created or designated by the municipality for that enterprise zone may, by resolution jointly adopted after public hearing, propose to undertake a project for the public improvement of the enterprise zone , planning and visioning of smart housing zones, or to increase eligible municipal services in the enterprise zone, and to fund that project or increase in eligible municipal services from moneys deposited in the enterprise zone assistance fund and credited to the account maintained by the State Treasurer for the enterprise zone.

     The proposal so adopted shall set forth a plan for the project or for the increase in eligible municipal services and shall include:

     (1)   A description of the proposed project or of the municipal services to be increased;

     (2)   An estimate of the total project costs, or of the total costs of increasing the municipal services, and an estimate of the amounts of funding necessary annually from the enterprise zone account;

     (3)   A statement of any other revenue sources to be used to finance the project or to fund the increase in eligible municipal services;

     (4)   A statement of the time necessary to complete the project, or of the time during which the increased municipal services are to be maintained;

     (5)   A statement of the manner in which the proposed project or increase in municipal services furthers the municipality's policy and intentions for addressing the economic and social conditions existing in the area of the enterprise zone as set forth in the zone development plan approved by the authority; and

     (6)   A description of the financial and programmatic controls and reporting mechanisms to be used to guarantee that the funds will be spent in accordance with the plan and that the project or increased municipal service will accomplish its purpose.

     As used in this section, "project" means an activity funded by the zone assistance fund through the qualified municipality and implemented by the zone development corporation, including the purchasing, leasing, condemning, or otherwise acquiring of land or other property, or an interest therein, in the enterprise zone or as necessary for a right-of-way or other easement to or from the enterprise zone; the relocating and moving of persons or businesses displaced by the acquisition of land or property; the rehabilitation and redevelopment of land or property, including demolition, clearance, removal, relocation, renovation, alteration, construction, reconstruction, installation or repair of land or a building, street, highway, alley, utility, service or other structure or improvement which will lead to increased economic activity within the zone; the purchase and installation of closed circuit television surveillance systems or other related equipment and those expenses associated with homeland security and domestic preparedness; the acquisition, construction, reconstruction, rehabilitation, or installation of public facilities and improvements, except buildings and facilities for the general conduct of government and schools; the establishment of revolving loan or grant programs for qualified businesses in the zone to encourage private investment and job creation, matching grant programs for the establishment or operation of pedestrian malls, special improvement districts and tax increment districts, or other appropriate entity; marketing, advertising and special event activities that will lead to increased economic activity or encourage private investment and job creation in the zone, but not including the expenditures therefor which are required to be reported pursuant to "The New Jersey Campaign Contributions and Expenditures Reporting Act," P.L.1973, c.83 (C.19:44A-1 et al.) and the costs associated therewith including the costs of an administrative appraisal, economic and environmental analyses, environmental remediation, engineering, planning, design, architectural, surveying or other professional or managerial services.

     As used in this section, "eligible municipal services" means the hiring of additional policemen or firemen assigned duties in the enterprise zone, or the purchasing or leasing of additional police or fire vehicles, equipment or apparatus to be used for the provision of augmented or upgraded public safety services in the enterprise zone and its immediate vicinities.

     d.    Upon adoption by the governing body of the qualifying municipality and by the zone development corporation, the proposal shall be sent to the authority for its evaluation and approval.  The authority shall approve the proposal if it shall find:

     (1)   In the case of a project, that the proposed project furthers the policy and intentions of the zone development plan approved by the authority, and that the estimated annual payments for the project from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account;

     (2)   In the case of an increase in eligible municipal services, that the proposal furthers the policy and intentions of the zone development plan approved by the authority; that the qualifying municipality has furnished satisfactory assurances that the additional policemen or firemen to be hired, or the additional vehicles, equipment or apparatus to be purchased or leased, shall be used to augment or upgrade public safety in the enterprise zone, and shall not be used in other areas of the municipality; that the qualifying municipality shall annually appropriate for the increased eligible municipal services an amount equal to 20% of the amount of annual payments for the eligible municipal services from the enterprise zone account and shall not request for the increased eligible municipal services an amount equal to more than 35% of the amount of annual payments into the enterprise zone account, unless the municipality and the authority have entered into an agreement or agreements to the contrary prior to July 1, 1992; and that the estimated annual payments for the eligible municipal services from the enterprise zone account to which the proposal pertains are not likely to result in a deficit in that account;

     (3)  In the case of a proposal to fund the planning and visioning of a smart housing zone, that the establishment of a smart housing zone furthers the policy and intentions of the zone development plan approved by the authority, and that the estimated payment for the planning and visioning from the enterprise zone account to which the proposal pertains is not likely to result in a deficit in that account.

     e.     If the authority shall approve the proposal, it shall annually, upon its receipt of a written statement from the governing body of the qualifying municipality and the zone development corporation, certify to the State Treasurer the amount to be paid in that year from the enterprise zone account in the enterprise zone assistance fund with respect to each project or increase in eligible municipal services approved.  The authority may at any time revoke its approval of a project or an increase in eligible municipal services if it finds that the annual payments made from the enterprise zone assistance fund are not being used as required by this section.

     f.     Upon certification by the authority of the annual amount to be paid to a qualifying zone with respect to any project or increase in eligible municipal services, the State Treasurer shall pay in each year to the qualifying municipality from the amounts deposited in the enterprise zone assistance fund the amount so certified, within the limits of the amounts credited to the enterprise zone account of the qualifying municipality.

     g.     An amount not to exceed one-third of the amount deposited in the account created in the name of the authority in the enterprise zone assistance fund shall be used by the authority for the coordination and administration of the program throughout the State, including but not limited to costs for personnel, operating expenses and marketing.  The balance of the remaining amount shall be distributed to qualifying municipalities in proportion to each municipality's contribution to the enterprise zone assistance fund for the coordination and administration of the program within the municipality, including but not limited to costs for personnel, operating expenses and marketing.1

(cf: P.L. 2009, c.25, s.1)

 

     17.  (New section) a.  Within 1[90] 1801 days of enactment of P.L.   , c.     (C.      ) (pending before the Legislature as this bill), the Site Improvement Advisory Board shall prepare and submit to the commissioner recommendations for amendments to the Statewide site improvement standards for residential development specific to smart housing zones in order to further the purposes of this act, and shall provide for the flexibility needed for the compact, pedestrian-friendly nature of smart housing zones without compromising environmental outcomes.

     b.  The commissioner shall review the recommendations submitted by the board and, within 1[120] 2101 days of enactment of P.L.    , c.    (C.      ) (pending before the Legislature as this bill), shall establish, by regulation adopted pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), amendments to the Statewide site improvement standards specific to smart housing zones that are substantially consistent with the board’s recommendations unless, in the commissioner's judgment, a standard would result in a danger to the public health or safety.

     c.  Until such time as the Statewide site improvement standards are amended, as described in subsection b. of this section, the commissioner, the Site Improvement Advisory Board and the technical subcommittee thereof, and municipal agencies shall give favorable consideration to appropriate exceptions for development in smart housing zones as may be required to meet the purposes of this act.

 

     18.  (New section) There is established in the Department of Community Affairs a separate dedicated fund, to be used to make incentive payment grants to municipalities that have established smart housing zones, as provided for in section 11 of P.L.    , c.    (C.    ) (pending before the Legislature as this bill), and which shall be known as the "Smart Housing Fund.”  The fund shall be a non-lapsing, revolving fund, and all monies deposited or received for purposes of the fund shall be accounted for separately, by source and amount, and remain in the fund until appropriated for such purposes.

     a.  Developers of middle income and market-rate housing units in a smart housing zone shall pay a developer fee to the "Smart Housing Fund” in the amount of $4,000 for every net new zoned middle income or market rate unit as a condition precedent to the issuance of a certificate of occupancy for any such unit.

     b.  In addition to other grants and loans awarded pursuant to section 20 of P.L.1985, c.222 (C.52:27D-320), and without regard to any limitations on grants or loans under that section, the Commissioner of Community Affairs shall transfer amounts from the "New Jersey Affordable Housing Trust Fund" to the "Smart Housing Fund" that the commissioner determines to be necessary to allow for the timely disbursement of incentive payment grants to municipalities that have established smart housing zones.  This determination shall ensure that amounts are transferred sufficient to cover the difference between the amounts deposited into the "Smart Housing Fund" by developers pursuant to subsection a. of this section and the amount to be required to be paid to a municipality as an incentive payment grant.  Such amounts transferred shall be deemed to represent assistance to municipalities necessary to accommodate costs associated with the production of new low income housing units and moderate income housing units. Consistent with provisions for the "New Jersey Affordable Housing Trust Fund" in subsection c. of section 20 of P.L.1985, c.222 as amended by section 17 of P.L.2008, c.46 (C.52:27D-320), the council shall authorize the commissioner to provide this assistance to municipalities with approved smart housing zones for the duration of the "Smart Housing Incentives Program."

     c.  Within 12 months after enactment of P.L.    , c.    (C.      ) (pending before the Legislature as this bill), and every year thereafter, the commissioner shall transfer $3 million from the "New Jersey Affordable Housing Trust Fund" to the "Smart Housing Fund" to cover the obligation to make grants for low income housing units and moderate income housing units in smart housing zones.  The commissioner may transfer additional monies into the "Smart Housing Fund" if needed to meet these purposes.

     d.  In the event that a temporary shortfall is anticipated for the "Smart Housing Fund" due to the timing of incentive payments relative to anticipated incoming funds, the commissioner may transfer money into the fund on a temporary basis from any source at his discretion.

     e.  Starting three years after the effective date of P.L.    , c.    (C.      ) (pending before the Legislature as this bill), if the balance in the "Smart Housing Fund" exceeds the amount needed to cover the State’s obligation to make zoning and construction incentive payments to municipalities that have established smart housing zones by more than $3 million, the commissioner may defer the annual $3 million transfer until the following year.

     f.  Any interest earned on monies in the "Smart Housing Fund" shall accrue to the fund.

     g.  The department and the State Treasurer shall submit the "Smart Housing Fund" for an audit annually by the State Auditor or State Comptroller, at the discretion of the State Treasurer.  In addition, the department shall prepare an annual report for each fiscal year, and submit it by November 30th of each year to the Governor and the Legislature, and post the information to its web site, of all activity of the fund.

 

     19.  This bill shall take effect immediately.