Legislature Contemplates Extension of Moratorium on Statewide Non-Residential Development Fee

At the end of last week, the New Jersey State Senate (“Senate”) introduced Bill S3116 that proposes to continue the moratorium on the statewide non-residential development fee (the “Fee”) that expired on July 1, 2013. Since July 1, 2013, developers and land use attorneys have been in a state of flux with regard to whether the fee applies to development projects. If passed, this legislation would extend the moratorium to December 31, 2014.

The Fee was originally created in July 2008 to establish a statewide uniform system for the collection of development fees to fund the creation of affordable housing. Under Bill S3116 , any developer that received site plan approval prior to January 1, 2015 (provided that a construction permit has been issued by the local enforcing agency prior to July 1, 2016), would not be required to pay the Fee. Bill S3116 also exempts site plan approvals obtained during the gap period between July 1, 2013, through the effective date of the new legislation (if passed).

S3116 has a companion bill in the New Jersey State Assembly (“Assembly”) under bill number A4457. Although just introduced in the Senate, the Assembly companion bill already received a favorable vote from the Assembly Appropriations Committee on December 12, 2013.

Both bills also permit a developer who may have paid the fee subsequent to June 30, 2013 (the initial expiration of the moratorium), to apply for a refund from the municipality. A developer is eligible for a refund provided that the municipality has not already expended the funds on an affordable housing project and that there are no other impositions within the proposed bills that prohibit a return of the fee to the developer. Should this legislation go into effect, a developer will have 120 days from the effective date of the legislation to apply for a refund with the municipality.

Developers and land use attorneys should pay close attention to whether this piece of legislation passes between now and the end of the current legislative session, which ends within the next 30 days.