ASSEMBLY, No. 1200
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblyman DALTON
An Act to require the conducting of certain studies and evaluations concerning potential regulatory takings, and amending and supplementing P.L.1968, c.410 (C.52:14B-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) The Legislature finds and declares that in order to protect the public health, safety, and welfare and to preserve the environment, it is often necessary for the State to enact laws regulating or otherwise affecting the use of private property; that although some minor loss in property value is occasionally experienced by certain property owners due to environmental and land use laws, such losses do not rise to the level of an unconstitutional taking of private property without just compensation; that nevertheless there are other occasions when such losses are substantial yet not constitutionally compensable according to rulings of the federal and State courts; that even though the State may not be required by law to provide compensation in those cases, it may be fair and right for the State to do so; that there is a growing national trend for federal and State governments to be more sensitive to the rights of private property owners and to consider providing such compensation, but the full economic impact of taking such a course of action is largely unknown; and that, therefore, it is important for the State to conduct the necessary studies to evaluate the economic costs, and the various possible methods and procedures that could be utilized for implementation, of a program to compensate any owner of real property whose use of all or any portion of that property has been limited by State action pursuant to certain environmental or land use laws that diminishes the fair market value of the entire property by, for example, an amount of 40% or more; and that it is important for the State to establish procedures to help minimize the possibility of State agencies adopting rules and regulations that may cause an unconstitutional taking of private property without just compensation.
2. (New section) As used in sections 1 through 6 of this act:
"Department" means the Department of Environmental Protection;
"Environmental land use law" means R.S.12:5-1 et seq.; "The Wetlands Act of 1970," P.L.1970, c.272 (C.13:9A-1 et seq.); the "Freshwater Wetlands Protection Act," P.L.1987, c.156 (C.13:9B-1 et seq.), but only with respect to those standards and requirements thereof that exceed standards and requirements imposed by any federal law, or any rule or regulation adopted pursuant thereto, pertaining to freshwater wetlands, including but not limited to the "Federal Water Pollution Control Act" (33 U.S.C. §1251 et seq.) and any amendment or supplement thereto; the "Coastal Area Facility Review Act," P.L.1973, c.185 (C.13:19-1 et seq.); and the "Flood Hazard Area Control Act," P.L.1962, c.19 (C.58:16A-50 et seq.);
"Fair market value" means the most probable price at which real property would be sold, in a competitive and open market under all conditions requisite to a fair sale, between a willing buyer and a willing seller, neither of whom is under any compulsion to buy or sell and both having reasonable knowledge of relevant facts, at the time the State action occurs;
"Property" or "real property" means privately owned land, or any right, easement, or other interest therein, and all structures located thereon;
"State action" means enactment of a law, adoption of a rule or regulation pursuant to law, an administrative application or interpretation by a State agency of such a rule or regulation, or an action of a State agency to grant, deny, modify, suspend, or revoke a license, permit, certificate, approval, registration, or other form of permission required by law; and
"State agency" means the Department of Environmental Protection, the Pinelands Commission, or the Hackensack Meadowlands Development Commission.
3. (New section) a. The Department of Environmental Protection shall conduct a study to evaluate the economic costs, and the various possible methods and procedures that could be utilized for implementation, of a program to compensate any owner of real property whose use of all or any portion of that property has been limited by State action pursuant to an environmental land use law that, either singly or in combination with State action taken pursuant to other environmental land use laws, diminishes the fair market value of the entire property by 40% or more. The study shall also include: a review of the impact of the department's rules and regulations adopted pursuant to each environmental land use law upon the fair market value of real property in the State; an estimate of the number of properties subject to environmental land use laws and State action taken pursuant thereto that may qualify for such a compensation program; an assessment of the potential total loss in fair market value of real property in the State because of State action taken pursuant to each environmental land use law; and an evaluation of the effect of the size of a parcel upon the relative loss in fair market value of real property attributable to State action taken pursuant to an environmental land use law.
The department may expand the study to include environmental laws under its jurisdiction that affect land use other than those defined in section 2 of this act.
b. The Pinelands Commission shall conduct a study to evaluate the economic costs, and the various possible methods and procedures that could be utilized for implementation, of a program to compensate any owner of real property in the pinelands area whose use of all or any portion of that property has been limited by State action pursuant to the "Pinelands Protection Act," P.L.1979, c.111 (C.13:18A-1 et seq.) that diminishes the fair market value of the entire property by 40% or more. The study shall also include: a review of the impact of the Pinelands Comprehensive Management Plan and the commission's rules and regulations adopted pursuant to the "Pinelands Protection Act," and any land use decisions made by the commission pursuant thereto, upon the fair market value of real property in the pinelands area; an estimate of the number of properties subject to the "Pinelands Protection Act" and State action taken pursuant thereto that may qualify for such a compensation program; an assessment of the potential total loss in fair market value of real property in the pinelands area because of State action taken pursuant to the "Pinelands Protection Act"; and an evaluation of the effect of the size of a parcel upon the relative loss in fair market value of real property in the pinelands area attributable to State action taken pursuant to the "Pinelands Protection Act."
c. The Hackensack Meadowlands Development Commission shall conduct a study to evaluate the economic costs, and the various possible methods and procedures that could be utilized for implementation, of a program to compensate any owner of real property in the Hackensack Meadowlands District whose use of all or any portion of that property has been limited by State action pursuant to the "Hackensack Meadowlands Reclamation and Development Act," P.L.1968, c.404 (C.13:17-1 et seq.) that diminishes the fair market value of the entire property by 40% or more. The study shall also include: a review of the impact of the commission's master plan and rules and regulations adopted pursuant to the "Hackensack Meadowlands Reclamation and Development Act," and any land use decisions made by the commission pursuant thereto, upon the fair market value of real property in the Hackensack Meadowlands District; an estimate of the number of properties subject to the "Hackensack Meadowlands Reclamation and Development Act" and State action taken pursuant thereto that may qualify for such a compensation program; an assessment of the potential total loss in fair market value of real property in the Hackensack Meadowlands District because of State action taken pursuant to the "Hackensack Meadowlands Reclamation and Development Act"; and an evaluation of the effect of the size of a parcel upon the relative loss in fair market value of real property in the Hackensack Meadowlands District attributable to State action taken pursuant to the "Hackensack Meadowlands Reclamation and Development Act."
d. For the purposes of this section, the use of real property shall be deemed "limited" if a particular legal right to use that property no longer exists because of the State action.
4. (New section) The department, the Pinelands Commission, and the Hackensack Meadowlands Development Commission each shall be entitled to call to its assistance and avail itself of the services of such employees of any State, county, or municipal department, authority, board, bureau, commission, agency, or entity, or of Rutgers, The State University or any other public institution of higher education in the State, as it may require and as may be available to it for the purpose of carrying out its duties under this act.
5. (New section) The department, the Pinelands Commission, and the Hackensack Meadowlands Development Commission shall each report their findings and conclusions based upon the respective studies, and any recommendations for legislative or administrative action, to the Governor and the Legislature within one year of the effective date of this act. Copies of the reports shall be made available to the public at the cost of reproduction. In the interest of efficiency and to save costs, the department, the Pinelands Commission, and the Hackensack Meadowlands Development Commission may agree to consolidate their respective reports into one document.
6. (New section) Nothing in this act shall be construed to apply to the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).
7. (New section) The Attorney General shall establish guidelines that shall be used by State agencies in their evaluation of rules prior to their adoption, amendment, or repeal to assess the potential of a rule to constitute a taking of real property. The guidelines shall be based upon the most current law as articulated by the United States Supreme Court and the New Jersey Supreme Court. The Attorney General shall review and, if necessary, update the guidelines on an annual basis.
As used in this section, "State agency" means each of the principal departments in the executive branch of the State government, and all boards, divisions, commissions, agencies, councils, authorities, offices, or officers with any such department authorized to grant, deny, modify, suspend, or revoke a license, permit, certificate, approval, registration, or other form of permission required by law, other than a license or certificate issued to an individual for the practice of a profession or occupation; and "taking" means the taking of real property for public use that would require compensation pursuant to the United States Constitution or the New Jersey Constitution.
8. Section 4 of P.L.1968, c.410 (C.52:14B-4) is amended to read as follows:
4. (a) Prior to the adoption, amendment, or repeal of any rule, except as may be otherwise provided, the agency shall:
(1) Give at least 30 days' notice of its intended action. The notice shall include a statement of either the terms or substance of the intended action or a description of the subjects and issues involved, and the time when, the place where, and the manner in which interested persons may present their views thereon. The notice shall be mailed to all persons who have made timely requests of the agency for advance notice of its rule-making proceedings and in addition to other public notice required by law shall be published in the New Jersey Register and shall be filed with the President of the Senate and the Speaker of the General Assembly. The notice shall be additionally publicized in such manner as the agency deems most appropriate in order to inform those persons most likely to be affected by or interested in the intended action. Methods that may be employed include publication of the notice in newspapers of general circulation or in trade, industry, governmental or professional publications, distribution of press releases to the news media and posting of notices in appropriate locations;
(2) Prepare for public distribution at the time the notice appears in the Register a statement setting forth a summary of the proposed rule, a clear and concise explanation of the purpose and effect of the rule, the specific legal authority under which its adoption is authorized, a description of the expected socio-economic impact of the rule, [and] a regulatory flexibility analysis, or the statement of finding that a regulatory flexibility analysis is not required, as provided in section 4 of P.L.1986, c.169 (C.52:14B-19) , and an evaluation of the rule for its potential to result in a taking of private property for public use without just compensation, based upon guidelines established therefor by the Attorney General pursuant to section 7 of P.L. , c. (C. ) (now before the Legislature as this bill) ;
(3) Afford all interested persons reasonable opportunity to submit data, views, or arguments, orally or in writing. The agency shall consider fully all written and oral submissions respecting the proposed rule.
The agency shall conduct a public hearing on the proposed rule at the request of a committee of the Legislature, or a governmental agency or subdivision, provided such request is made to the agency within 15 days following publication of the proposed rule in the Register. The agency shall provide at least 15 days' notice of such hearing, which shall be conducted in accordance with the provisions of subsection (g) of this section;
(4) Prepare for public distribution a report listing all parties offering written or oral submissions concerning the rule, summarizing the content of the submissions and providing the agency's response to the data, views and arguments contained in the submissions.
(b) A rule prescribing the organization of an agency may be adopted at any time without prior notice or hearing. Such rules shall be effective upon filing in accordance with section 5 of this act or upon any later date specified by the agency.
(c) If an agency finds that an imminent peril to the public health, safety, or welfare requires adoption of a rule upon fewer than 30 days' notice and states in writing its reasons for that finding, and the Governor concurs in writing that an imminent peril exists, it may proceed without prior notice or hearing, or upon any abbreviated notice and hearing that it finds practicable, to adopt the rule. The rule shall be effective for a period of not more than 60 days unless each house of the Legislature passes a resolution concurring in its extension for a period of not more than 60 additional days. The rule shall not be effective for more than 120 days unless repromulgated in accordance with normal rule-making procedures.
(d) No rule hereafter adopted is valid unless adopted in substantial compliance with this act. A proceeding to contest any rule on the ground of noncompliance with the procedural requirements of this act shall be commenced within one year from the effective date of the rule.
(e) An agency may file a notice of intent with respect to a proposed rule-making proceeding with the Office of Administrative Law, for publication in the New Jersey Register at any time prior to the formal notice of action required in subsection (a) of this section. The notice shall be for the purpose of eliciting the views of interested parties on an action prior to the filing of a formal rule proposal. An agency may use informal conferences and consultations as means of obtaining the viewpoints and advice of interested persons with respect to contemplated rule-making. An agency may also appoint committees of experts or interested persons or representatives of the general public to advise it with respect to any contemplated rule-making.
(f) An interested person may petition an agency to promulgate, amend or repeal any rule. Each agency shall prescribe the form for the petition and the procedure for the submission, consideration and disposition of the petition. The petition shall state clearly and concisely:
(1) The substance or nature of the rule-making which is requested;
(2) The reasons for the request and the petitioner's interest in the request;
(3) References to the authority of the agency to take the requested action.
Within 30 days following receipt of any such petition, the agency shall either deny the petition, giving a written statement of its reasons, or shall proceed to act on the petition, which action may include the initiation of a formal rule-making proceeding. Upon the receipt of the petition, the agency shall file a notice stating the name of the petitioner and the nature of the request with the Office of Administrative Law for publication in the New Jersey Register. Notice of formal agency action on such petition shall also be filed with the division for publication in the Register.
(g) All public hearings shall be conducted by a hearing officer, who may be an official of the agency, a member of its staff, a person on assignment from another agency, a person from the Office of Administrative Law assigned pursuant to subsection o. of section 5 of P.L.1978, c.67 (C.52:14F-5o.) or an independent contractor. The hearing officer shall have the responsibility to make recommendations to the agency regarding the adoption, amendment or repeal of a rule. These recommendations shall be made public. At the beginning of each hearing, or series of hearings, the agency, if it has made a proposal, shall present a summary of the factual information on which its proposal is based, and shall respond to questions posed by any interested party. Hearings shall be conducted at such times and in locations which shall afford interested parties the opportunity to attend. A verbatim transcript of each hearing shall be maintained, and copies of the transcript shall be available to the public at no more than the actual cost.
(cf: P.L.1986, c.169, s.7)
9. This act shall take effect immediately.
STATEMENT
This bill would require the Department of Environmental Protection to conduct a study to evaluate the economic costs, and the various possible methods and procedures that could be utilized for implementation, of a program to compensate any owner of real property whose use of all or any portion of that property has been limited by State action pursuant to an environmental land use law that, either singly or in combination with State action taken pursuant to other environmental land use laws, diminishes the fair market value of the entire property by 40% or more. Under the bill, "environmental land use law" is defined to mean: R.S.12:5-1 et seq.; "The Wetlands Act of 1970"; the "Freshwater Wetlands Protection Act," but only with respect to those standards and requirements thereof that exceed standards and requirements imposed by any federal law, or any rule or regulation adopted pursuant thereto, pertaining to freshwater wetlands, including but not limited to the "Federal Water Pollution Control Act" and any amendment or supplement thereto; the "Coastal Area Facility Review Act"; and the "Flood Hazard Area Control Act." The department would be authorized to expand the study to include environmental laws under its jurisdiction that affect land use other than those defined in the bill.
The bill would also require the Pinelands Commission to conduct a similar study with respect to the "Pinelands Protection Act" and the Hackensack Meadowlands Development Commission to do so with respect to the "Hackensack Meadowlands Reclamation and Development Act."
All three studies would be required to be completed and submitted to the Governor and the Legislature within one year of the effective date of the bill.
This bill would also require that the notice of the adoption, amendment, or repeal of any administrative rule include an evaluation of the rule's potential to constitute a taking of real property in violation of the federal and State constitutional provisions that prohibit the taking of private property for public use without just compensation. The bill would require that the Attorney General establish guidelines for the review of administrative rules that conform to the law regarding "takings" as articulated in the most current United States Supreme Court and Supreme Court of New Jersey opinions.
Requires various State studies and evaluations concerning potential regulatory takings.