[First Reprint]

ASSEMBLY, No. 1074

STATE OF NEW JERSEY

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman CORODEMUS

An Act concerning the sale of real property by the State of New Jersey to nonprofit entities for the construction of low and moderate income housing and supplementing chapter 31 of Title 52 of the New Jersey Statutes.

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

    1. The Legislature finds and declares that there is an urgent need to provide better housing conditions for the low and moderate income population of the State, and that efforts to meet that need represent a public purpose which can be furthered by making available in a timely fashion and at nominal cost suitable State lands not required by the State of New Jersey for other purposes.

    2. For the purposes of this act the following terms shall have the following meaning:

    "Commissioner" means the Commissioner of Community Affairs.

    "Construction" includes the rehabilitation, renovation or repair of existing residential property, and the conversion to residential use of structures designed or employed for other purposes, as well as new construction.

    "Department" means the Department of Community Affairs.

    "Low and Moderate Income Housing Project" means a housing development in which at least one-third of the dwelling units are set aside for purchase or rental by low and moderate income households for a minimum duration of 30 years.

    "Qualified nonprofit housing development entity" means any corporation or association of persons organized under Title 15A of the New Jersey Statutes, having for its principal purpose, or as a purpose ancillary to its principal purpose, the improvement of realistic opportunities for low income and moderate income housing, as defined pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), being within the description of section 501(c)(3) of the United States Internal Revenue Code (26 U.S.C.A. §501(c)(3), having been determined by the agency to be a bona fide organization not under the effective control of any for-profit organization or governmental entity, and appearing capable, by virtue of past activities, qualifications of staff or board, or other features, of furthering the purposes of this act.

    3. a. Notwithstanding any law or regulation to the contrary, the State Treasurer shall regularly provide the commissioner with a list of all real property, including both buildings and vacant land, owned by the State, including but not limited to property of that description that has escheated to the State, that has been declared surplus and no longer needed for State use.

    b. The commissioner shall review the location and characteristics of all such property and ¹,after consultation with any State agency with regulatory jurisdiction over the property, including, but not limited to, the Department of Environmental Protection and Energy, the Pinelands Commission and the Hackensack Meadowlands Development Commission,¹ determine which are suitable for the construction of low and moderate income housing.

    c. The commissioner may request that any property that is determined to be suitable for the construction of low and moderate income housing be dedicated for use by the department to be held for sale or lease under the provisions of this act.

    d. The State Treasurer shall dedicate any such property to the department immediately upon request, except where the State Treasurer determines that the requested property is needed for a competing important public purpose, or in cases where such property was purchased using federal, Transportation Trust Fund or bond funds, in which case the State Treasurer shall notify the commissioner in writing no less than 60 days after receipt of such request.

    4. a. The department shall at regular intervals publish and disseminate a list of properties held for sale or lease under the provisions of this act.

    b. Any qualified nonprofit housing development entity, for itself or on behalf of a joint venture, partnership or other arrangement as described in paragraph 4 of subsection g. of section 4 of this act, may submit a proposal to the department for purchase of any property on the list for the purpose of constructing a low and moderate income housing project, setting forth the nature of the project to be constructed, the housing needs that would thereby be met, its qualifications for undertaking the proposed project, and the terms on which it proposes to purchase or lease the subject property.

    c. The department may, with the approval of the State Treasurer, arrange for the sale or lease any property held under the provisions of this act directly to a qualified nonprofit housing development entity that has submitted a proposal for purchase of any such property, after:

    (i) The department makes written findings that (a) the proposed project would significantly improve the housing conditions of low and moderate income households; (b) the entity proposing the project is qualified to undertake the project; (c) the project is financially feasible and realistic; (d) any reduction of the proposed sale price or lease rental below fair market value, as authorized in subsection d. of this section is needed in order to enhance the financial feasibility of the project; and (e) the terms of sale are reasonable and consistent with ensuring the financial feasibility of project.

    (ii) The department publishes a notice of the proposed sale summarizing the above findings in a daily newspaper of general circulation in the area in which the subject property is located; and

    (iii) The department holds a public hearing on the proposed sale, which shall be chaired by the commissioner or his designee, the time and place of which shall be advertised at least two weeks prior to the date of the hearing.

    d. Notwithstanding the provisions of any other law, the department may establish the selling price or lease amount at the lowest level, including sales for a nominal consideration, consistent with the financial feasibility of the project ,except that the selling price shall include repayment of Transportation Trust Funds, federal funds or other bonds used for the purchasing of the land together with any interest, required of the State to be reimbursed .

    e. The department may accept such terms of sale or lease as are reasonable and necessary to ensure the financial feasibility of the project, including provisions for deferred payment and subordinated debt, and may accept such mortgages and notes from purchasers as it deems appropriate to protect the State's interest in the property, however, the amount and the terms of the consideration agreed upon for the sale of the property must be sufficient to make immediate reimbursement to the federal government, the Transportation Trust Fund or any other trust or bond fund in an amount not less than the sum originally expended from that respective source of funding for the purchase of the property by the State, unless that source of funding waives any right to reimbursement. Similarly, the terms of any lease of a property must be sufficient to satisfy any obligation of reimbursement owed to the original source of funding by the State. It shall be the obligation of the department to ascertain what amount is required to be repaid to the original source of funding and transfer that amount to the Treasurer immediately upon receipt from the buyer. The Treasurer shall ensure that the original source of funding is properly and immediately reimbursed unless that source of funding waives any right to reimbursement .

    f. In any sale of property under this section, the department shall incorporate provisions to ensure that, in the event that the purchaser is unable successfully to initiate construction of the project within a reasonable period, as determined by the department, ownership of the property will return to the State.

    g. In the event that the department receives two competing proposals from qualified nonprofit housing development entities for the same parcel, the department shall evaluate the two proposals on the basis of the following criteria: (1) the comparative degrees to which the proposed projects would significantly improve the housing conditions of low and moderate income households; (2) the comparative extent and quality of the resources and capabilities of the proposing entities for designing and implementing their respective proposals; (3) the comparative practicability and financial feasibility of the respective proposals; (4) the comparative extent and soundness of the arrangements, in the form of partnerships, joint ventures or other formal relationships, entered into by the respective proposers for amplifying their resources through the support, cooperation or financial backing of other private organizations, including for-profit developers, and community-based groups. The terms or price offered in the competing proposals shall not be considered a factor in selecting the entity to be offered the property.

    5. Within six months of the effective date of this act the department shall promulgate administrative regulations, including regulations for the certification by the commissioner of qualified nonprofit housing development entities, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate the purposes of this act.

    6. This act shall take effect immediately.

Authorizes sale or lease of unneeded State property to nonprofit developers of low and moderate income housing.