Permit Extension Act of 2020 Alters Timing for Applications for Development, and Extends Certain Existing Approvals During COVID-19 Public Health Emergency

On July 1, 2020, Governor Murphy signed the Permit Extension Act of 2020, enacted as P.L. 2020, c. 53, a stand-alone piece of legislation modifying timelines for review of applications for development before the land use boards of the State of New Jersey and tolling existing development approvals that have been adversely affected by the COVID-19 public health emergency.

This legislation ends a saga that saw the proposal of an amendment to the Permit Extension Act of 2008, which was enacted following the Great Recession; a conditional veto of that legislation; and the concurrence of both houses of the New Jersey legislature with the language of the conditional veto message. This new law will provide significant help to developers throughout New Jersey who were forced, whether by governmental order or economic infeasibility, to put projects on hold during the course of the present public health emergency. However, there are potential pitfalls of which developers should be aware, as set forth below, including a requirement that all state-level permits that developers wish to have extended be registered. The Permit Extension Act of 2020 provides as follows:

Scope: Much like the original Permit Extension Act, this law serves to extend a wide variety of permits, including, but not limited to, soil conservation district approvals, waterfront development permits, wetlands permits, CAFRA permits and center designations, septic approvals, municipal utility authority approvals, county and municipal planning board approvals, and a host of other municipal, county, regional, or state approvals or permits granted under state law, rule, or regulation. Noteworthy is the elimination of the exclusion of permits in environmentally sensitive areas, so now all permits, regardless of their location, may be extended unless another exclusion applies.

The following remain excluded from extension:

  • All federal permits, which include all permits issued by any agency that is delegated authority under federal regulatory schemes, which would include many NJDEP permits related to remediation or wetlands issues.
  • Pinelands approvals where the extension would violate federal law or a state rule requiring federal approval.
  • Permits and approval from NJDOT pursuant to Title 27 or under general authority of state law, with the exception of right of way permits.
  • Permits and approvals under the Flood Hazard Area Control Act, except where work has commenced on the improvements, buildings, or structures on the site, or where the permit authorizes work on property owned by any governmental entity.
  • Coastal center designations under CAFRA.
  • Permits and approvals within the preservation area of the Highlands.
  • Any permit or approval within the Highlands Planning Area, where the municipality has secured plan conformance approval and adopted the master plan element, land use ordinance, or an environmental resource inventory, unless such permit approval is within a designated Highlands center.

Extension Period: For all permits subject to the Permit Extension Act of 2020 that were in effect as of March 9, 2020 – the date on which the Governor first declared a public health emergency per Executive Order No. 103 – the extension period will run from March 9, 2020 to the date on which the Governor terminates the declaration of a public health emergency. Under the Emergency Health Powers Act, N.J.S.A. 26:13-1 et seq., the Governor must renew the declaration on a monthly basis, so paying close attention to the Governor’s issuance of executive orders will be necessary for the foreseeable future. Given the uncertainties surrounding the length of the COVID-19 public health emergency, this legislation provides for an extension of time of “at least six months beyond the conclusion of the COVID-19 extension period.” Language extending permits for twelve months for those construction projects deemed essential under the Governor’s Executive Order No. 122 was removed as part of the conditional veto.

The language of the Permit Extension Act of 2020 is fundamentally different from that of the original Permit Extension Act, which previously provided that permits would be extended no more than six months beyond the conclusion of the extension period. N.J.S.A. 40:55D-136.4(a)(1). Additionally, the Permit Extension Act of 2020 includes language that provides that nothing should be “construed to reduce the time period of any approval in existence as of March 9, 2020.” This difference in statutory language, teamed with the language extending permits for “at least” six months beyond the COVID-19 extension period, may suggest that this version of the Permit Extension Act is intended to truly toll approvals, rather than simply extend their expiration dates, and leaves open the opportunity for further extensions where same may be provided by statute. The statutory language under the Permit Extension Act has always used the terms “extension period” and “tolling” interchangeably, which has caused confusion in its application, as well as confusion in the practical result. This change in language and its practical effects will require further analysis and guidance from agencies.

Municipal Approval Periods: In a significant change, the Permit Extension Act of 2020 also modifies the time periods for action on applications for development under the Municipal Land Use Law in three material ways. For those developers that have submitted applications during the extension period, pay particular attention to the language of the statute, which seems unintentionally to actually create an expedited review period for such applications for development:

  • Completeness Determinations: Under N.J.S.A. 40:55D-10.3, a municipal agency must make a determination of completeness within 45 days of submission of an application for development. The Permit Extension Act of 2020 extends that period for all pending applications for development to either (a) 120 days from March 9, 2020 [July 7, 2020], or (b) 60 days after submission to the municipal agency, whichever is later.
  • Extensions of Time for Action on Pending Applications: For applications pending before municipal agencies as of March 9, 2020, regardless of whether such applications had been deemed complete, the time periods for action on that application under the Municipal Land Use Law have been extended by 120 days.

Extensions of Time for Action on Applications Submitted during Extension Period: For applications submitted during the extension period, the Permit Extension Act of 2020 as signed has a substantial drafting error. Instead of extending the period for municipal action, as presumably was intended, the law requires that any application pending during the extension period must be granted or denied by either (a) 120 days from March 9, 2020 [July 7, 2020], or (b) 60 days after a determination of completeness by the municipal agency, whichever is later. For some applications, such as site plan applications involving more than 10 acres or 10 dwelling units (ordinarily 95 days), subdivision of more than 10 lots (ordinarily 95 days), conditional uses (ordinarily 95 days) and variances (ordinarily 120 days), this appears to shorten to 60 days the time period in which a decision must be made.

Registration of (All?) Permits: All state agencies shall, within 30 days of July 1, 2020, place a notice in the New Jersey Register tolling approvals consistent with the Permit Extension Act of 2020. This same mechanism existed under the Permit Extension Act of 2008. See N.J.S.A. 40:55D-136.5. However, a significant change is that any approval subject to the tolling period must now be registered with the “department,” which we assume is meant to be the applicable state agency or department that issued it, within 30 days of the notice in the New Jersey Register. Notably, “the running period of any approval not registered pursuant to this section shall not be suspended for the COVID-19 extension period.” This puts a substantial burden on the developer to affirmatively register with the respective departments all permits for which tolling is requested, following the publication of the respective notices. The list of approvals for which developers are registered will be posted on the website of the respective departments within 14 days of receipt of the registration. Monitoring these websites will be vitally necessary to confirm that any permits submitted for registration are actually registered, and leave time to adequately challenge any failure to include certain permits and protect the tolling periods thereof.

This legislation is certainly necessary and provides significant relief to the development community. However, the imposition of significant requirements, including registration of permits, presents a need for focus and consideration of developers on assuring that all necessary permits are properly positioned to secure extensions.

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