S3022

An Act creating a program of emergency assistance for landlords and tenants, supplementing chapter 8 of Title 46 of the Revised Statutes, and making an appropriation.

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

1. This act shall be known and may be cited as the “Emergency Tenant and Landlord Assistance Act.”

2. The Legislature finds and declares that:

a. The coronavirus pandemic and the measures taken to end it have resulted in widespread unemployment and lost income to large numbers of New Jersey tenants, particularly those of low and moderate income;

b. Unemployment and loss of income has rendered many tenants throughout New Jersey unable to pay rent in whole or in part, placing them at potential risk of eviction upon the end of the current eviction moratorium;

c. Eviction has been shown to have serious deleterious effects on the stability and health conditions of families, the educational performance of children, and the stability of the neighborhoods in which they live;

d. Loss of rental income has placed many landlords, particularly small “mom and pop” landlords, at risk of being unable to meet financial obligations;

e. If not addressed, sustained loss of rental income could lead many landlords to defer repairs, reduce maintenance, and potentially abandon their properties, all of which will have serious deleterious effects both on families living in their properties and the neighborhoods in which they are situated; and

f. The State of New Jersey has a compelling interest in preventing evictions as well as property deterioration and abandonment arising from the temporary loss of tenant and landlord income during the time of the coronavirus pandemic.

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

“Area median income” means the most recently adopted United States Department of Housing and Urban Development median income figure for the geographic area in which the rental unit is located.

“Assistance” means compensation for unpaid rent, provided by the program established pursuant to section 4 of P.L. c. (C. ) (pending before the Legislature as this bill).

“Assistance period” means the six month period beginning April 1, 2020 and ending September 30, 2020, or if the eviction moratorium extends beyond October 1, 2020, the period ending in the last full month prior to the end of the eviction moratorium or December 31, 2020, whichever is later.

“Children” means individuals under the age of 18,whether or not related by blood to the head of the household for which the rental unit is the regular and permanent domicile of the head of the household.

“Department” means the Department of Community Affairs.

“Eligible landlord” means any landlord who meets the criteria set forth in subsections a. or b. of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).

“Eviction moratorium” means Executive Order No. 106 of 2020 and includes all of the restrictions on eviction procedures established therein.

“Household income” means the gross income of a tenant household for calendar year 2019, or for January 1, 2020 through June 30, 2020 multiplied by two, whichever is lower.

“Other landlord” means a landlord who is not a small landlord.

“Program” means the Emergency Tenant and Landlord Assistance Program established by section 4 of P.L , c. (C. ) (pending before the Legislature as this bill).

“Rental unit” means a dwelling unit owned by a landlord and occupied by a tenant which is the subject of an application for assistance or a tax credit pursuant to P.L , c,. (C. ) (pending before the Legislature as this bill).

“Small landlord” means a landlord whose principal domicile is in the State of New Jersey and who, together with immediate family members, partners, or other related entities, owns no more than 50 rental units in the State.

“Tax credit” means the tax credit established pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill).

4. a. There is established in the Department of Community Affairs the “Emergency Tenant and Landlord Assistance Program,” to provide payments to make up for the portion of unpaid rent that the landlord’s tenant did not pay, and that was due during the assistance period.

b. The program shall begin accepting applications no later than the 15th day of the final month in which the eviction moratorium is in effect.

c. The department shall prepare all application forms, application guidelines, and informational materials necessary for eligible landlords to complete an application, and shall post materials on its website at least 30 days prior to the date on which applications shall be accepted.

5. a. A landlord may apply for assistance pursuant to the provisions of this section for any rental unit owned by that landlord for which (1) the tenant household had an household income below 80 percent of the area median income; and (2) some or all of the rent normally due for any or all of the assistance period remains unpaid on the date of application.

b. Any landlord who is eligible, but does not receive assistance pursuant to subsection a. of this section, due to a lack of funding or for another reason, may claim a tax credit pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill) for any rental unit owned by that landlord for which (1) the tenant household had an household income below 80 percent of the area median income; and (2) some or all of the rent normally due for any or all of the assistance period remains unpaid on the date of application.

c. A landlord shall not submit an application for assistance, or claim a tax credit pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill), for any rental unit for which the rent is subsidized by any federal or State rental assistance program, except that landlords may submit applications for assistance or a tax credit for rental units in projects financed through the Low Income Housing Tax Credit, where no other project-based or tenant-based assistance is provided to that unit.

d. The application shall set forth the total amount of rent due for the rental unit as set forth in the lease or other document, the amount paid by the tenant or third parties, if any, and the amount unpaid.

e. The application shall provide documentation of the landlord’s status as a small landlord, if applicable.

f. An application shall be accompanied by a form completed by the tenant of the rental unit endorsing the application, which shall include (1) the number of occupants of the unit, and whether there are any children, (2) a sworn statement of the tenant household’s income; and (3) a sworn statement that the tenant’s income, expenses, or livelihood were adversely affected by the coronavirus pandemic and associated emergency measures.

g. If the tenant of a rental unit is unwilling to complete the form required in subsection f. of this section notwithstanding diligent effort by the landlord, the landlord may attach to the application a certification in such form as shall be determined by the department setting forth (1) the landlord’s efforts to obtain tenant endorsement; (2) the household income of the tenant, to the best of the landlord’s knowledge; and (3) the number of occupants in the rental unit and whether the tenant household residing in the rental unit includes children.

h. No fee shall be charged for application to the program.

6. Applications shall be approved and assistance provided according to the following priority ranking, subject to the provisions of section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill):

a. First priority: small landlords renting to households with incomes below 30 percent of the area median income with children in the home;

b. Second priority: small landlords renting to other households with incomes below 30 percent of the area median income;

c. Third priority: small landlords renting to households with incomes between 30 percent and 50 percent of the area median income with children in the home;

d. Fourth priority: small landlords renting to other households with incomes between 30 percent and 50 percent of the area median income;

e. Fifth priority: small landlords renting to households with incomes between 50 percent and 80 percent of the area median income with children in the home;

f. Sixth priority: small landlords renting to other households with incomes between 50 percent and 80 percent of the area median income; and

g. Seventh priority: other landlords renting to households with incomes below 80 percent of the area median income.

7. a. A landlord receiving assistance or a tax credit shall accept up to 100 percent of the amount of rent due for the rental unit during the assistance period as full settlement of all arrears for the assistance period, and shall agree to waive any unpaid balance that is compensated through the assistance or tax credit, as well as any late or other fees charged as a result of nonpayment of rent during that period even though these fees are not compensated through the assistance or tax credit.

b. In giving priority to applications received under the program within each priority category established in section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill), the department shall rank all applicants by financial need to the extent that this prioritization is administratively feasible.

8. a. For the purposes of the “Corporation Business Tax Act,” P.L.1945, c.162 (C.54:10A-1 et seq.) and the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., a landlord who meets the criteria of subsection b. of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill), who is a taxpayer under the provisions of either tax and who is unable to obtain assistance pursuant to subsection a. of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall be allowed to claim a credit against their tax liability in the amount of assistance for which they are eligible under section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. In the event that the credit to which any eligible landlord is entitled exceeds their tax liability for the year in which they are entitled to claim the credit, the excess balance may be carried over for a maximum of five years.

c. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed shall be as prescribed by the Director of the Division of Taxation.

d. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer’s share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer’s taxable year.

A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly, but the amount of credit of a taxpayer in respect of a pro rata share of S corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S corporation that is equal to the taxpayer’s share, whether or not distributed, of the total pro-rata share of S corporation income of the New Jersey S corporation for its privilege period ending within or with the taxpayer’s taxable year.

e. The Director of the Division of Taxation in the Department of the Treasury shall prepare and disseminate all forms and instructions necessary to effectuate the provisions of this section.

f. The Director of the Division of Taxation in the Department of the Treasury is authorized to issue rules necessary to effectuate the provisions of this section.

9. A landlord receiving assistance, or a tax credit pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall not increase the rent on the rental unit for a period of two years following the end of the eviction moratorium.

10. A landlord receiving assistance, or a tax credit pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall not initiate an eviction proceeding, or complete a previously-initiated eviction proceeding, for any unpaid rent balances owed by the tenant for rent due prior to October 1, 2020, whenever the unpaid balance was incurred.

11. a. A landlord initiating an eviction proceeding subsequent to the end of the eviction moratorium and the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) shall provide documentation on a form to be prepared and adopted by the Administrative Office of the Courts that the landlord is not an eligible landlord, and that the eviction filing is not barred by any other provision of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. An eligible landlord who has submitted an application for assistance, or a tax credit pursuant to section 8 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall not file a motion of eviction during the pendency of that application.

12. There is appropriated from funds provided to the State by the United States government under the “Coronavirus Aid, Relief, and Economic Security Act,” Pub. Law 116-136, to the Department of Community Affairs the sum of $300,000,000 for assistance under this program, of which no more than $1,500,000 may be used by the department to defray the administrative costs of the program. If $300,000,000 is not available through the “Coronavirus Aid, Relief, and Economic Security Act,” Pub. Law 116-136, then the remainder of this amount shall be appropriated from other federal funding for coronavirus relief as it becomes available.

13. This act shall take effect immediately.

STATEMENT

This bill would establish the “Emergency Tenant and Landlord Assistance Program” as a program in the Department of Community Affairs (“DCA”). The bill would allow eligible landlords to apply for assistance, in the form of financial compensation, or for a tax credit, to partially replace rent unpaid during an “assistance period” in the time of the Coronavirus pandemic. The bill defines the assistance period as the six month period beginning April 1, 2020 and ending September 30, 2020, or if the eviction moratorium extends beyond October 4, 2020, then the term means the period ending in the last full month prior to the end of the moratorium or December 31, 2020, whichever is earlier.

The bill authorizes a landlord to apply for assistance in the form of financial compensation for any rental unit owned by that landlord if (1) the tenant household has a household income below 80 percent of the area median income; and (2) some or all of the rent normally due for any or all of the assistance period remains unpaid on the date of application. Any landlord not receiving assistance in the form of financial compensation may receive a tax credit instead for any rental unit owned by that landlord for which (1) the tenant household had an household income below 80 percent of the area median income; and (2) some or all of the rent normally due during the assistance period remains unpaid on the date of application.

The bill prohibits a landlord from submitting an application for assistance or a tax credit for any rental unit for which the rent is subsidized by any federal or State rental assistance program. However, landlords may submit applications for assistance or a tax credit for rental units in projects financed through the Low Income Housing Tax Credit, where no other project-based or tenant-based assistance is provided to that unit.

The bill directs that applications should set forth the total amount of rent due for the rental unit as set forth in the lease or other document, the amount paid by the tenant or third parties, if any, and the amount unpaid. As applicable, the application would be required to provide documentation of the landlord’s status as a “small landlord,” meaning that the landlord, together with immediate family members, partners, or other related entities, owns no more than 50 rental units in New Jersey.

The bill would require an application to be accompanied by a form completed by the tenant of the rental unit endorsing the application, and including (1) the number of occupants of the unit, and whether there are any children, (2) a sworn statement of the tenant household’s income; and (3) a sworn statement that the tenant’s income, expenses, or livelihood were adversely affected by the COVID-19 pandemic and associated emergency measures. If the tenant is unwilling to complete the form despite a diligent effort by the landlord, the landlord may attach to the application a certification setting forth (1) the landlord’s efforts to obtain tenant endorsement; (2) the household income of the tenant, to the best of the landlord’s knowledge; an (3) the number of occupants in the rental unit and whether the tenant household residing in the rental unit includes children. The bill prohibits a fee from being charged for application to the program.

The bill requires that applications for assistance in the form of financial compensation would be approved according to the following priority ranking:

· First priority: small landlords renting to households with incomes below 30 percent of the area median income with children in the home;

· Second priority: small landlords renting to other households with incomes below 30 percent of the area median income;

· Third priority: small landlords renting to households with incomes between 30 percent and 50 percent of the area median income with children in the home;

· Fourth priority: small landlords renting to other households with incomes between 30 percent and 50 percent of the area median income;

· Fifth priority: small landlords renting to households with incomes between 50 percent and 80 percent of the area median income with children in the home;

· Sixth priority: small landlords renting to other households with incomes between 50 percent and 80 percent of the area median income; and

· Seventh priority: other landlords renting to households with incomes below 80 percent of the area median income.

A landlord applying for assistance or for a tax credit would be required to accept up to 100 percent of the amount of rent due for the rental unit during the assistance period as full settlement of all arrears for the assistance period, and agree to waive any uncompensated balance as well as any late or other fees charged as a result of nonpayment of rent during that period. The applicant landlord would also have to specify the minimum percentage of the total rent they will accept as full settlement of all arrears for the assistance period, which would, in conjunction with any rent paid by the tenant, in no event exceed 100 percent of the total amount of rent due.

In giving priority to applications received under the program, within each priority category, as listed above, the DCA would rank all applicants by the percentage of the total rent that they will accept as full settlement of all arrears for the assistance period, and give priority to applicants specifying the lowest percentage of the total rent that they will accept as full settlement of all arrears.

If a landlord is unable to obtain assistance in the form of financial compensation despite meeting the applicable prerequisites, this bill would allow the landlord to claim a credit against their tax liability under the “Corporation Business Tax Act,” or the “New Jersey Gross Income Tax Act,” in an amount corresponding to the amount of financial compensation assistance for which they are eligible but unable to obtain. In the event that the credit to which an eligible landlord is entitled exceeds their tax liability, the excess balance may be carried over for a maximum of five years.

All eligible landlords under the program, including landlords receiving assistance in the form of financial assistance, landlords receiving tax credits, would be prohibited from initiating an eviction proceeding, or completing a previously-initiated eviction proceeding, for any unpaid rent balances owed by the tenant for rent due prior to October 1, 2020, whenever the unpaid balance was incurred. A landlord initiating an eviction proceeding subsequent to the end of the eviction moratorium and the enactment of the bill would be required to provide documentation that the landlord is not an eligible landlord, and that the eviction filing is not barred by any provision of this bill.

Landlords receiving assistance in the form of financial compensation or tax credits under the bill would additionally be prohibited from increasing rent on the associated units for two years following the end of the eviction moratorium.

Finally, the bill would appropriate $300,000,000 from the funds provided to the State by the United States government under the “Coronavirus Aid, Relief, and Economic Security (“CARES”) Act” to the Department of Community Affairs for assistance under the program established by the bill, of which no more than $1,500,000 would be used by the DCA to defray the administrative costs of the program. However, if $300,000,000 is not available through the CARES Act, then the remainder of this amount shall be appropriated from other federal funding for coronavirus relief as it becomes available.