S1761

SENATE, No. 1761

STATE OF NEW JERSEY

INTRODUCED DECEMBER 19, 1996

By Senators SCHLUTER, PALAIA, Connors, Bennett, Kyrillos, McNamara and Casey

An Act concerning the provision of affordable housing in the State, supplementing and amending P.L.1985, c.222 (52:27D-301 et al), and supplementing P.L.1990, c.61 (C.54:4-8.57 et seq.) and chapter 2 of Title 40A of the New Jersey Statutes.

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

1. (New section) Sections 1 through 11 of P.L. , c. (pending before the Legislature as this bill) shall be known and may be cited as the "Fair Housing Act II."

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

a. It is both appropriate and timely for the Legislature to review, more than a decade following the enactment of the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), the impact of that law upon land development in the State and its success in meeting the goals enumerated by the New Jersey Supreme Court in the Mount Laurel cases.

b. Pursuant to regulations promulgated by the Council on Affordable Housing, regional housing need has been allocated to rural areas, inducing growth in rural municipalities, in conflict with the State Development and Redevelopment Plan. As a result, rural communities no longer have the necessary control over land use policies and development patterns to enable them to maintain open space and to preserve farmland and environmentally sensitive areas.

c. Municipalities often have unique needs, such as providing adequate housing for a large senior citizen population, preserving open space, or providing for infrastructure needs in a rapidly developing area, which shape both the determination of a realistic fair share housing goal and the ability to meet that fair share goal. Therefore, it is appropriate that the Legislature direct a new process for determining municipal fair share in accordance with municipal needs and abilities and in concert with other Statewide policy goals.

d. There is a need, therefore, to revise current law to provide a coordinated approach based on sound land use planning to promote the protection of farmland and environmentally sensitive areas, to encourage development in accordance with the State Development and Redevelopment Plan, to allow municipalities to meet their unique housing needs and to provide realistic affordable housing opportunities for all citizens of the State.

3. (New section) a. Any municipality, including a municipality which has not submitted a housing element and fair share plan for substantive certification by the council prior to the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), may submit an affordable housing plan to the council in accordance with the provisions and purposes of P.L. , c. (C. )(pending before the Legislature as this bill).

(1) In the case of a municipality which has submitted a housing element or fair share plan applicable during the period set forth in section 4 of P.L. , c. (C. )(pending before the Legislature as this bill), this affordable housing plan may include a modification of the municipality's determination of its present and prospective fair share of housing need, a description of any specific planning goals of the municipality, such as land preservation or development or satisfying the housing needs of a specific segment of the population within the region such as senior citizens, and shall describe the methods anticipated to be employed by the municipality in reaching these goals.

(2) In the case of a municipality which has not submitted a housing element or fair share plan applicable during the period set forth in section 4 of P.L. , c. (C. )(pending before the Legislature as this bill), this affordable housing plan may include a determination of the municipality's present and prospective fair share of housing need, a description of any specific planning goals of the municipality, such as land preservation or development or satisfying the housing needs of a specific segment of the population within the region such as senior citizens, and shall describe the methods anticipated to be employed by the municipality in reaching these goals. Submission of an affordable housing plan pursuant to this paragraph shall be accompanied by a duly adopted resolution of participation, which shall serve to notify the council of the municipality's intent to submit its fair share housing plan to the council pursuant to section 9 of P.L.1985, c.222 (C.52:27D-309).

The methods employed by the municipality in reaching its affordable housing goals may include inclusionary zoning the provision of, accessory apartments, units in community residences for the developmentally disabled, housing rehabilitation, regional contribution agreements, buying down or writing down proposals, or any other methods which shall be approved by the council pursuant to P.L. , c. (C. )(pending before the Legislature as this bill). Plans shall be accompanied by documentation of any official action taken by the municipality, and any correspondence from those local or State agencies which may have been consulted. Municipalities may submit their plans in conjunction with other municipalities which have common or complimentary goals.

b. Any affordable housing plan submitted to the council pursuant to subsection a. of this section shall be reviewed by the council within 90 days of its submission. The council may request more detailed information regarding a plan submitted, and shall meet with members of the municipal governing body or the planning board, as appropriate, to discuss and negotiate the details of the plan. Within 270 days of the submission of the plan, the council shall adjust the fair share housing obligation of the municipality determined by the council pursuant to regulation in accordance with the negotiated plan, if the council determines that the plan will provide a reasonable opportunity for affordable housing goals to be met in accordance with the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill). Any adjustment made by the council in the fair share housing obligation of any municipality pursuant to this section shall not be reallocated to any other municipality in the region or in the State.

(1) The council may request a municipality seeking to preserve land to submit detailed plans regarding any proposed purchase of agricultural or environmentally sensitive lands, development rights, or any proposed transfer of development rights, including a map of properties for which purchase or development rights are sought or will be sought during the current housing cycle.

(2) The council may request a municipality seeking to encourage growth and development to submit detailed plans setting forth the proposed land uses, anticipated extent and intensity of development and redevelopment including the construction or rehabilitation of housing, commercial or industrial development or redevelopment and the infrastructure necessary to support that development, including but not limited to, wastewater treatment facilities, roads, schools, and transportation facilities.

c. In order to maintain approval of its housing element and fair share plan for any housing cycle which commences after the effective date of P.L. , c. (C. )(now pending before the Legislature as this bill), a municipality shall submit a new affordable housing plan in accordance with P.L. , c. (C. )(now pending before the Legislature as this bill).

4. (New section) Notwithstanding any provisions of P.L.1985, c.222 (C.52:27D-301 et al.) or rule or regulation adopted pursuant thereto to the contrary, any estimate of present and prospective need for low and moderate income housing which is applicable on the effective date of this act shall cover the period commencing in 1997 and expiring on December 31, 2001. Thereafter, each estimate of present and prospective need for the purposes of the "Fair Housing Act," P.L.1985, c.222 (C.52:270-301 et al.) shall cover a period of 10 years.

5. (New section) Notwithstanding any law to the contrary, a municipality shall not be eligible for any State discretionary grants or funds unless it has submitted an affordable housing plan in accordance with the provisions of P.L. , c. (C. )(pending before the Legislature as this bill). These funds shall include, but not be limited to, transportation funds, historic preservation funds, Green Acres open space funds, wastewater treatment trust funds, and farmland preservation funds.

6. (New section) A municipality may propose to meet a portion of its fair share housing obligation through writing down or buying down the cost of previously owned market rate units and offering those units in sound condition at affordable prices to low and moderate income households, in accordance with regulations promulgated by the council.

7. (New section) a. A municipality may authorize, by ordinance, a homestead property tax rebate pursuant to the "Homestead Property Tax Rebate Act of 1990," P.L.1990, c.61 (C.54:4-8.57 et seq.), or this section, for low-income senior citizens or disabled residents who are eligible for deductions pursuant to P.L.1963, c.172 (C.54:4-8.40). Any property tax rebate so authorized shall be in addition to any rebate for which such a resident may otherwise be eligible under P.L.1990, c.61 (C.54:4-8.57 et seq.), and shall be authorized only if the dwelling house which is subject to the property tax rebate is included in the municipality's fair share housing plan and is recognized by the council as fulfilling a portion of the municipality's fair share housing obligation in accordance with regulations promulgated by the council.

b. Notwithstanding the provisions of section 6 of P.L.1990, c.61 (C.54:4-8.62), applicants for a property tax rebate pursuant to this section shall apply to the municipality, and shall meet all requirements, including eligibility, as shall be established by the council. The rebate shall be allowed in accordance with those regulations.

8. (New section) A municipality may propose to meet a portion of its fair share housing obligation through the offering of a homestead property tax rebate pursuant to section 7 of P.L. , c. (C. )(now pending before the Legislature as this bill) in accordance with regulations which shall be promulgated by the Council on Affordable Housing pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

9. (New section) Notwithstanding any law or regulation to the contrary, a municipality may set aside a limited portion of housing units to fulfill its fair share housing obligation for occupancy by persons who work in the municipality; provided, however, that this set aside may not exceed 25 percent of the municipality's total obligation.

10. (New section) Notwithstanding the provisions of N.J.S.40A:2-22, or any other law to the contrary, a municipality shall determine the period of usefulness of any project or undertaking involving the construction of low and moderate income housing in order to fulfill a fair share housing obligation pursuant to P.L.1985, c.222 (C.52:27D-301 et al.) or the "Fair Housing Act II," P.L. , c. (C. ) (now pending before the Legislature as this bill) computed from the date of any bonds issued to fund the construction thereof, which period shall be no greater than 20 years. This period of usefulness shall apply regardless of whether the housing is constructed by a municipality or provided as part of a regional contribution agreement pursuant to P.L.1985, c.222 (C.52:27D-301 et al.).

11. (New section) Any limitation by the council on the number of affordable housing units which may be restricted to occupancy by senior citizens shall be waived upon documentation by a municipality that the need for housing in the municipality for low and moderate income households comprised of senior citizens exceeds the limitation set by the council.

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

4. As used in this act:

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

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

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

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

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

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

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

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

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

j. "Prospective need" means a projection of housing needs based on development and growth which [is reasonably likely to occur] has recently occurred in a region or a municipality, as the case may be, as a result of actual determination of public and private entities. In determining prospective need, consideration shall be given to historic population data and indices of growth pursuant to regulations promulgated by the council, including, but not limited to, housing stock, the availability of jobs, the existence of infrastructure, approvals of development applications, real property transfers and economic projections prepared by the State Planning Commission established by sections 1 through 12 of P.L.1985, c.398 (C.52:18A-196 et seq.). Regional or municipal per capita or median income shall not be a factor in determining prospective need.

k. "Affordable housing plan" shall mean a plan submitted to the council in accordance with the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).

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

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

5. a. There is established in, but not of, the Department of Community Affairs a Council on Affordable Housing to consist of [11] 13 members appointed by the Governor with the advice and consent of the Senate, of whom [four]five shall be elected officials representing the interests of local government, at least one of whom shall be representative of an urban municipality having a population in excess of 40,000 persons and a population density in excess of 3,000 persons per square mile, at least one of whom shall be representative of a municipality having a population of 40,000 persons or less and a population density of 3,000 persons per square mile or less, at least one of whom shall be representative of a rural municipality, and no more than one of whom may be a representative of the interests of county government; three shall represent the interests of households in need of low and moderate housing, one of whom shall represent the interests of the nonprofit builders of low and moderate income housing, and shall have an expertise in land use practices and housing issues, one of whom shall be the Commissioner of Community Affairs, ex officio, or his or her designee, who shall serve as chairperson and one of whom shall be the executive director of the agency, serving ex officio; one shall represent the interests of the for-profit builders of market rate homes, and shall have an expertise in land use practices and housing issues; and [three]four shall represent the public interest. Not more than [six]seven of the [11] 13 shall be members of the same political party. The membership shall be balanced to the greatest extent practicable among the various [housing regions] counties of the State.

b. The members shall serve for terms of [six]10 years, except that of the members first appointed, two shall serve for terms of four years, three for terms of five years, and three for terms of six years. Both members appointed pursuant to subsection a. of this section, as amended by P.L. c. (C. ) (now pending before the Legislature as this bill) shall be appointed for a term of 10 years. All members shall serve until their respective successors are appointed and shall have qualified. Notwithstanding the above, a member appointed to represent the interests of local government shall serve only such length of the term for which appointed as the member continues to hold elected local office, except that the term of a member so appointed shall not become vacant until 60 days after the member ceases to hold that elected office. Vacancies shall be filled in the same manner as the original appointments, but for the remainders of the unexpired terms only.

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

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

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

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

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

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

a. Determine housing regions of the State;

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

c. Adopt criteria and guidelines for:

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

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

(2) Municipal adjustment of the present and prospective fair share based upon available vacant and developable land, infrastructure considerations or environmental or historic preservation factors and [adjustments] decreases in the fair share shall be made whenever:

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

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

(c) Adequate land for recreational, conservation or agricultural and farmland preservation purposes would not be provided in accordance with the plan filed pursuant to P.L. , c (C. )(now pending before the Legislature as this bill),

(d) Adequate open space would not be provided,

(e) The area considered by the council to be developable, if developed, would result in a pattern of development [is]contrary to the planning designations in the State Development and Redevelopment Plan prepared pursuant to sections 1 through 12 of P.L.1985, c.398 (C.52:18A-196 et seq.),

(f) Vacant and developable land is not available in the municipality, or the data relied upon by the council in determining available vacant land is demonstrated by the municipality not to be reliable, [and]

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

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

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

e. In its discretion, place a limit, based on a percentage of existing housing stock in a municipality and any other criteria including employment opportunities which the council deems appropriate, upon the aggregate number of units which may be allocated to a municipality as its fair share of the region's present and prospective need for low and moderate income housing. No municipality shall be required to address a fair share beyond 1,000 units within [six] 10 years from the grant of substantive certification, unless it is demonstrated, following objection by an interested party and an evidentiary hearing, based upon the facts and circumstances of the affected municipality that it is likely that the municipality through its zoning powers could create a realistic opportunity for more than 1,000 low and moderate income units within that [six-year] 10-year period. For the purposes of this section, the facts and circumstances which shall determine whether a municipality's fair share shall exceed 1,000 units, as provided above, shall be a finding that the municipality has issued more than 5,000 certificates of occupancy for residential units in the [six-year] 10-year period preceding the petition for substantive certification in connection with which the objection was filed.

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

In carrying out the above duties, including, but not limited to, present and prospective need estimations the council shall give appropriate weight to pertinent research studies, government reports, decisions of other branches of government, implementation of the State Development and Redevelopment Plan prepared pursuant to sections 1 through 12 of P.L.1985, c.398 (C.52:18A-196 et seq.) and public comment. To assist the council, the State Planning Commission established under that act shall provide the council annually with economic growth, development and decline projections for each housing region for the next [six] 10 years. The council shall develop procedures for periodically adjusting regional need based upon the low and moderate income housing that is provided in the region through any federal, State, municipal or private housing program.

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

15. Section 10 of P.L.1985, c.222 (C.52:27D-310) is amended to read as follows:

10. A municipality's housing element shall be designed to achieve the goal of access to affordable housing to meet present and prospective housing needs, with particular attention to low and moderate income housing, and shall contain at least:

a. An inventory of the municipality's housing stock by age, condition, purchase or rental value, occupancy characteristics, and type, including the number of units affordable to low and moderate income households and substandard housing capable of being rehabilitated, and in conducting this inventory the municipality shall have access, on a confidential basis for the sole purpose of conducting the inventory, to all necessary property tax assessment records and information in the assessor's office, including but not limited to the property record cards;

b. A projection of the municipality's housing stock, including the probable future construction of low and moderate income housing, for the next [six]10 years, taking into account, but not necessarily limited to, construction permits issued, approvals of applications for development and probable residential development of lands;

c. An analysis of the municipality's demographic characteristics, including but not necessarily limited to, household size, income level and age;

d. An analysis of the existing and probable future employment characteristics of the municipality;

e. A determination of the municipality's present and prospective fair share for low and moderate income housing and its capacity to accommodate its present and prospective housing needs, including its fair share for low and moderate income housing; and

f. A consideration of the lands that are most appropriate for construction of low and moderate income housing and of the existing structures most appropriate for conversion to, or rehabilitation for, low and moderate income housing, including a consideration of lands of developers who have expressed a commitment to provide low and moderate income housing.

(cf: P.L.1985, c.222, s.10)

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

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

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

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

(3) Determination of measures that the municipality will take to assure that low and moderate income units remain affordable to low and moderate income households for an appropriate period of not less than [six]10 years;

(4) A plan for infrastructure expansion and rehabilitation if necessary to assure the achievement of the municipality's fair share of low and moderate income housing;

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

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

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

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

b. The municipality may provide for a phasing schedule for the achievement of its fair share of low and moderate income housing which is not inconsistent with section 23 of this act.

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

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

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

(cf: P.L.1995, c.344, s.2)

17. Section 12 of P.L.1985, c.222 (C.52:27D-312) is amended to read as follows:

12. a. A municipality may propose the transfer of up to 50% of its fair share to another municipality within its housing region , or within an adjacent region, by means of a contractual agreement into which two municipalities voluntarily enter. A municipality may also propose a transfer by contracting with the agency or another governmental entity designated by the council if the council determines that the municipality has exhausted all possibilities within its housing region or adjacent regions. A municipality proposing to transfer to another municipality, whether directly or by means of a contract with the agency or another governmental entity designated by the council, shall provide the council with the housing element and statement required under subsection c. of section 11 of P.L.1985, c.222 (C.52:27D-311), and shall request the council to determine a match with a municipality filing a statement of intent pursuant to subsection e. of this section. Except as provided in subsection b. of this section, the agreement may be entered into upon obtaining substantive certification under section 14 of P.L.1985, c.222 (C.52:27D-314), or anytime thereafter. The regional contribution agreement entered into shall specify how the housing shall be provided by the second municipality, hereinafter the receiving municipality, and the amount of contributions to be made by the first municipality, hereinafter the sending municipality.

b. A municipality which is a defendant in an exclusionary zoning suit and which has not obtained substantive certification pursuant to this act may request the court to be permitted to fulfill a portion of its fair share by entering into a regional contribution agreement. If the court believes the request to be reasonable, the court shall request the council to review the proposed agreement and to determine a match with a receiving municipality or municipalities pursuant to this section. The court may establish time limitations for the council's review, and shall retain jurisdiction over the matter during the period of council review. If the court determines that the agreement provides a realistic opportunity for the provision of low and moderate income housing within the housing region, it shall provide the sending municipality a credit against its fair share for housing to be provided through the agreement in the manner provided in this section.

The agreement shall be entered into prior to the entry of a final judgment in the litigation. In cases in which a final judgment was entered prior to the date this act takes effect and in which an appeal is pending, a municipality may request consideration of a regional

contribution agreement; provided that it is entered into within 120 days after this act takes effect. In a case in which a final judgment has been entered, the court shall consider whether or not the agreement constitutes an expeditious means of providing part of the fair share.

c. Regional contribution agreements shall be approved by the council, after review by the county planning board or agency of the county in which the receiving municipality is located. The council shall determine whether or not the agreement provides a realistic opportunity for the provision of low and moderate income housing within convenient access to employment opportunities. The council shall refer the agreement to the county planning board or agency which shall review whether or not the transfer agreement is in accordance with sound, comprehensive regional planning. In its review, the county planning board or agency shall consider the master plan and zoning ordinance of the sending and receiving municipalities, its own county master plan, and the State development and redevelopment plan. In the event that there is no county planning board or agency in the county in which the receiving municipality is located, the council shall also determine whether or not the agreement is in accordance with sound, comprehensive regional planning. After it has been determined that the agreement provides a realistic opportunity for low and moderate income housing within convenient access to employment opportunities, and that the agreement is consistent with sound, comprehensive regional planning, the council shall approve the regional contribution agreement by resolution. All determinations of a county planning board or agency shall be in writing and shall be made within such time limits as the council may prescribe, beyond which the council shall make those determinations and no fee shall be paid to the county planning board or agency pursuant to this subsection.

d. In approving a regional contribution agreement, the council shall set forth in its resolution a schedule of the contributions to be appropriated annually by the sending municipality. A copy of the adopted resolution shall be filed promptly with the Director of the Division of Local Government Services in the Department of Community Affairs, and the director shall thereafter not approve an annual budget of a sending municipality if it does not include appropriations necessary to meet the terms of the resolution. Amounts appropriated by a sending municipality for a regional contribution agreement pursuant to this section are exempt from the limitations or increases in final appropriations imposed under P.L.1976, c.68 (C.40A:4-45.1 et seq.).

e. The council shall maintain current lists of municipalities which have stated an intent to enter into regional contribution agreements as receiving municipalities, and shall establish procedures for filing statements of intent with the council. No receiving municipality shall be required to accept a greater number of low and moderate income units through an agreement than it has expressed a willingness to accept in its statement, but the number stated shall not be less than a reasonable minimum number of units, not to exceed 100, as established by the council. The council shall require a project plan from a receiving municipality prior to the entering into of the agreement, and shall submit the project plan to the agency for its review as to the feasibility of the plan prior to the council's approval of the agreement. The agency may recommend and the council may approve as part of the project plan a provision that the time limitations for contractual guarantees or resale controls for low and moderate income units included in the project shall be less than 30 years, if it is determined that modification is necessary to assure the economic viability of the project.

f. The council shall establish guidelines for the duration and amount of contributions in regional contribution agreements. In doing so, the council shall give substantial consideration to the average of: (1) the median amount required to rehabilitate a low and moderate income unit up to code enforcement standards; (2) the average internal subsidization required for a developer to provide a low income housing unit in an inclusionary development; (3) the average internal subsidization required for a developer to provide a moderate income housing unit in an inclusionary development. Contributions may be prorated in municipal appropriations occurring over a period not to exceed six years and may include an amount agreed upon to compensate or partially compensate the receiving municipality for infrastructure or other costs generated to the receiving municipality by the development. Appropriations shall be made and paid directly to the receiving municipality or municipalities or to the agency or other governmental entity designated by the council, as the case may be.

g. The council shall require receiving municipalities to file annual reports with the agency setting forth the progress in implementing a project funded under a regional contribution agreement, and the agency shall provide the council with its evaluation of each report. The council shall take such actions as may be necessary to enforce a regional contribution agreement with respect to the timely implementation of the project by the receiving municipality.

(cf: P.L.1995, c.83, s.2)

18. Section 13 of P.L.1985, c.222 (C.52:27D-313) is amended to read as follows:

13. a. A municipality which has filed a housing element may, at any time during a two-year period following the filing of the housing element, petition the council for a substantive certification of its element and ordinances or institute an action for declaratory judgment granting it [six-year]ten year repose in the Superior Court. The municipality shall publish notice of its petition in a newspaper of general circulation within the municipality and county and shall make available to the public information on the element and ordinances in accordance with such procedures as the council shall establish. The council shall also establish a procedure for providing public notice of each petition which it receives.

b. Notwithstanding the provisions of subsection a. of this section, a municipality which filed a housing element prior to the effective date of this 1990 amendatory act, shall be permitted to petition for substantive certification at any time within two years following that filing, or within one year following the effective date of this 1990 amendatory act, whichever shall result in permitting the municipality the longer period of time within which to petition.

(cf: P.L.1990, c.121, s.1)

19. Nothing in P.L. , c. (C. ) (pending before the Legislature as this bill) shall be construed to require an increase in the fair share housing obligation of any municipality that submitted a housing element or fair share plan for substantive certification by the council prior to the effective date of P.L. , c. (pending before the Legislature as this bill).

20. This act shall take effect immediately.

STATEMENT

This bill, entitled the "Fair Housing Act II," modifies and supplements the original "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.) for several purposes. One purpose is to provide a method for local governments to preserve open space and farmland under the "Fair Housing Act," a concept that was embraced by the New Jersey Supreme Court in its Mount Laurel decisions, but was not provided for in the legislative response to those cases. Another purpose of the bill is to coordinate State development policy by requiring that affordable housing efforts be made in conjunction with the provisions of the State Development and Redevelopment Plan. Municipalities may submit to the Council on Affordable Housing (COAH) an affordable housing plan, in which the municipality will calculate its proposed housing obligation, along with goals which the municipality may have, such as preservation or development, and the proposed methods to meet those goals. Joint municipal plans with common or complimentary goals may be submitted. After a negotiation process, COAH would adjust the housing obligation assigned to a municipality based on the new plan. The bill directs that any adjustment made in a municipal fair share number pursuant to the bill shall not be reallocated to another municipality. Municipalities not submitting plans to COAH under the bill would not be eligible for any State discretionary funds or grants.

COAH is directed to approve more flexible methods by which a municipality may meet its housing obligation, such as a special property tax rebate for low income senior citizens and disabled residents. In addition, the term for bonds is directed to be as long as 20 years, which is intended to override the court's decision in AQN Associates, Inc. v. Township of Florence which determined that the term be for only six years. The longer bonding term will help some municipalities in financing affordable housing projects. COAH is required to waive any limitation on the number of affordable housing units that may be restricted for senior citizen occupancy if a municipality can demonstrate that it has a greater need than that limit would allow. In addition, regional contribution agreements would be permitted between municipalities in adjacent regions.

Under the bill, the current housing cycle would be extended to December 31, 2001. After that date, the cycle would be 10 years instead of the current six year cycle. The bill also adds two additional members to the Council on Affordable Housing. One member would be an elected representative of a rural community, and the other would be a public member, bringing the total number of members to 13.

The prospective need portion of fair share under the bill's provisions would be based on recently occurring development, and may no longer be based on municipal or regional income levels. This change will allow an adjustment of the fair share for those municipalities which have submitted an affordable housing plan which seeks to preserve farmland, open space and environmentally sensitive areas, and will help assure that development occurs in accordance with the provisions of the State Development and Redevelopment Plan.

Designated the "Fair Housing Act II."