A582

An Act concerning relocation assistance for certain displaced persons and amending and supplementing P.L.1971, c.362.

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

1. Section 4 of P.L.1971, c.362 (C.20:4-4) is amended to read as follows.

4. a. If a taking agency acquires real property for public use, it shall make fair and reasonable relocation payments to displaced persons and businesses as required by this act, for:

(1) actual reasonable expenses in moving himself, his family, business, farm operation, or other personal property;

(2) actual direct losses of tangible personal property as a result of moving or discontinuing a business or farm operation, but not to exceed an amount equal to the reasonable expenses that would have been required to relocate such property, as determined by the taking agency; and

(3) actual reasonable expenses in searching for a replacement business or farm.

b. Any displaced person eligible for payments under subsection a. of this section who is displaced from a dwelling and who elects to accept the payments authorized by this subsection in lieu of the payments authorized by subsection a. of this section may receive a moving expense allowance, determined according to a schedule established by the taking agency, not [to exceed $300.00] less than $1,000, and a dislocation allowance of [$200.00] not less than $800; provided, however, that on the first day of the 12th month next following enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), and annually thereafter, the minimum moving expense and dislocation allowance shall be adjusted in accordance with section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).

c. Any displaced person eligible for payments under subsection a. of this section who is displaced from his place of business or from his farm operation and who elects to accept the payment authorized by this subsection in lieu of the payment authorized by subsection a. of this section, may receive a fixed payment in an amount equal to the average annual net earnings of the business or farm operation, except that such payment shall not be less than [$2,500.00 nor more than] $10,000.00; provided, however, that on the first day of the 12th month next following enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), and annually thereafter, the minimum average annual net earnings payment allowed under this subsection shall be adjusted in accordance with section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill). In the case of a business no payment shall be made under this subsection unless the taking agency is satisfied that the business (1) cannot be relocated without a substantial loss of its existing patronage, and (2) is not a part of a commercial enterprise having at least one other establishment not being acquired by the taking agency, which is engaged in the same or similar business. For purposes of this subsection, the term "average annual net earnings," means 1/2 of any net earnings of the business or farm operation, before Federal, State, and local income taxes, during the 2 taxable years immediately preceding the taxable year in which such business or farm operation moves from the real property acquired for such project, or during such other period as such agency determines to be more equitable for establishing such earnings, and includes any compensation paid by the business or farm operation to the owner, his spouse, or his dependents during such period.

(cf: P.L.1971, c.362, s.4)

2. Section 5 of P.L.1971, c.362 (C.20:4-5) is amended to read as follows:

5. a. In addition to payments otherwise authorized by this act, the taking agency shall make an additional payment of not [in excess of $15,000.00] less than $100,000 to any displaced person who is displaced from a dwelling actually owned and occupied by such displaced person for not less than 180 days prior to the initiation of negotiations for the acquisition of the property. Only one additional payment shall be made pursuant to this subsection with regard to a dwelling, regardless of the number of owners who are displaced from that dwelling. Such additional payment shall include the following elements:

(1) The amount, if any, which when added to the acquisition cost of the dwelling acquired, equals the reasonable cost of a comparable replacement dwelling which is a decent, safe, and sanitary dwelling adequate to accommodate such displaced person, reasonably accessible to public services and places of employment and available on the private market. All determinations required to carry out this subparagraph shall be determined by regulations issued pursuant to section 10 of [this act] P.L.1971, c.362 (C.20:4-10).

(2) The amount, if any, which will compensate such displaced person for any increased interest costs which such person is required to pay for financing the acquisition of any such comparable replacement dwelling. Such amount shall be paid only if the dwelling acquired was encumbered by a bona fide mortgage which was a valid lien on such dwelling for not less than 180 days prior to the initiation of negotiations for the acquisition of such dwelling. Such amount shall be equal to the excess in the aggregate interest and other debt service costs of that amount of the principal of the mortgage on the replacement dwelling which is equal to the unpaid balance of the mortgage on the acquired dwelling, over the remainder term of the mortgage on the acquired dwelling, reduced to discounted present value. The discount rate shall be determined by regulations issued pursuant to section 10 of [this act] P.L.1971, c.362 (C.20:4-10).

(3) Reasonable expenses incurred by such displaced person for evidence of title, recording fees, and other closing costs incident to the purchase of the replacement dwelling, but not including prepaid expenses.

(4) Penalty costs for prepayment of any mortgage entered into in good faith encumbering such real property if such mortgage is on record or has been filed for record as provided by law on the date of approval by taking agency of the location of such project.

(5) The pro rata portion of real property taxes payable during the calendar year in which the property was acquired which are allocable to the period of the year subsequent to the date of vesting of title in the taking agency, or the effective date of the possession of such real property by the taking agency, whichever is earlier.

b. The additional payment authorized by this section shall be made only to such a displaced person who purchases and occupies a replacement dwelling which is decent, safe, and sanitary not later than the end of the one year period beginning on the date on which he receives final payment of all costs of the acquired dwelling, or on the date on which he moves from the acquired dwelling, whichever is the later date.

(cf: P.L.1971, c.362, s.5)

3. (New section) Beginning on the first day of the 12th month next following enactment of P.L. , c. (pending before the Legislature as this bill) all payment amounts set forth in sections 4 and 5 of P.L.1971, c.362 (C.20:4-4 and C.20:4-5), as amended by P.L. , c. (C. ) (pending before the Legislature as this bill), shall be adjusted annually on the basis of the Consumer Price Index for All Urban Consumers (CPI-U), U. S. City Average, published by the United States Department of Labor, Bureau of Labor Statistics, using the last published index figure as of the date of displacement as the numerator and the index figure for the month in which P.L. , c. (C. ) (pending before the Legislature as this bill) becomes effective as the denominator.

4. This act shall take effective immediately.

STATEMENT

This bill adjusts relocation assistance amounts that are required to be paid to property owners displaced when their property is taken by eminent domain. The current law contains maximum amounts that may be paid for relocation assistance and additional compensation. This bill would establish minimum amounts that must be paid for relocation assistance and additional compensation when property is taken by eminent domain. The bill changes the current relocation assistance maximum of $300 to a minimum of $1,000 and changes the current dislocation allowance maximum of $200 to a minimum allowance of $800. These amounts would be adjusted annually for increases to the Consumer Price Index for All Urban Consumers (CPI-U). The bill further adjusts the additional payments made to homeowners who are displaced by eminent domain by replacing the current $15,000 maximum payment with a $100,000 minimum payment. The intent of this minimum payment is to compensate homeowners for lost opportunity for appreciation of their homes that they might receive but for their forced relocation from the home.