Trenton, New Jersey. A recently proposed measure would provide a statewide framework for New Jersey towns to impose and utilize impact fees on real estate developments in order to finance growth-driven infrastructure upgrades.
The New Jersey Impact Fee Act is a piece of legislation that would replace the Municipal Land Use Law’s existing jurisdiction for municipalities. Based on current, localized data about population growth, transportation, school enrollment, emergency services, and construction expenses, it enables cities to enact ordinances charging developers fees.
The measure would mandate that before imposing a new or higher impact charge, municipalities must provide at least ninety days’ notice. The impact fee amount cannot be altered after a developer has obtained preliminary approval for a project. According to the law, any fees must be commensurate with the anticipated strain the development will have on the community’s infrastructure.
The language of the law states that an impact charge must be reasonable and proportionate to the increased impact caused by the development.
Data-driven fee structure with restrictions on modifications after approval
When developers contribute land, infrastructure, or facilities that support the same infrastructure that the impact fee would pay, municipalities would be required to credit those contributions against the impact charge.
Municipalities and educational districts that have formed partnerships, such as sending-receiving agreements or shared services, could split the collected fees. Furthermore, if a development is located in an eligible jurisdiction, any fee credit obtained there may be transferred to another.
When money is raised for school facility upgrades, it must be deposited in a special municipal account and then moved, upon request, to the capital reserve account of the school district. Additionally, the bill permits waivers or exemptions for initiatives that benefit the public proportionately.
The municipality would have the responsibility of proving, by a preponderance of the evidence, that its actions are in compliance with the bill’s standards in disputes involving fees or refused credits.
Among the requirements for oversight and openness were
According to the law, municipalities must submit an annual report to the Commissioner of Community Affairs that includes a thorough breakdown of all impact fees received and used. The public must be able to access these reports on the department’s official website.
By the first day of the fifth month after enactment, the Department of Community Affairs must adopt rules to put the act into effect. On that date, the bill would become operative.
