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GFOA of NJ Legislative Update: 01/30/17

Friday, February 3, 2017   (0 Comments)
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Assembly Commerce and Economic Development

A2743: Authorizes municipality to provide for imposition and collection of special assessment to secure developer's recovery of cost of certain improvements in connection with redevelopment project.

This bill authorizes municipalities to impose special assessments on the owners of certain “development projects” to secure payment of the cost of various improvements related to the project for the benefit of the developer undertaking those improvements. The “development projects” covered under the bill are (1) projects for which an economic redevelopment and growth grant incentive has been approved under the “New Jersey Economic Stimulus Act of 2009” (2) redevelopment projects under the “Local Redevelopment and Housing Law and (3) two or more contiguous projects in either or both of the previous categories.  The improvements, the cost of which may be secured by the special assessment, include demolition of existing structures, site preparation, environmental remediation, installation of utilities, construction of sidewalks and roadways, development of parks or open space, and such off-site improvements as may be required by the municipality in connection with the development of the project.

The bill provides that the owners of a development project may submit to the municipality in which the project is located a request that a “lead developer” undertake any of the aforementioned kinds of improvements in connection with the development project.  The request would include the agreement of the designated lead developer to undertake the improvement on behalf of the owners and the agreement of each owner to pay a share of the cost of the improvement in proportion to the benefits therefrom that would accrue to that owner.  The municipality is authorized under the bill to agree with the lead developer and owners (1) to the undertaking of the improvement, and (2) that a special assessment may be imposed against each owner for that owner’s allocable portion of the cost.

Under the bill, the governing body of the municipality could then adopt an ordinance providing for the improvement to be undertaken and for the assessment of costs “as evidenced by the agreement.”  The ordinance is to require that the special assessment payments be payable in yearly installments over a period, not to exceed 30 years, beginning on or after the date on which the improvements are completed, and is to provide that the special assessment shall constitute an “automatic, enforceable, and perfected municipal lien.”  Either the municipality or the lead developer is to record both the ordinance and a copy of the special assessment agreement.

The municipality is to assign to the lead developer its right to payments of the special assessment and any remedies it may have under the assessment agreement, including the right to collect the payments and, in the event of delinquency in making a payment, to enforce the lien through sale, under the “tax sale law” of the property to which the lien attaches.  Assessment payments that a municipality has assigned to a lead developer shall not be included in the general funds of the municipality or be subject to laws regarding the investment or appropriation of public funds; they shall not be subject to laws relating to public contracting or be considered as “financial assistance”.

The bill allows a lead developer with the consent of the municipality and other owners , to pledge, as security for a loan of bond, the lead developer’s rights in the special assessment agreement and the assigned special assessment payment.  The bill expands the powers of county improvement authorities to allow them to provide loans to lead developers in connection with special assessment development improvements.

Upon completion of the special assessment development improvement, the lead developer is to certify to the municipality the improvement is completed and the amount of actual cost, together with an allocation of the amount to be assessed against the owners, which amount shall be lesser of the actual cost so certified or the cost as provided in the ordinance and special assessment agreement. The municipality shall thereupon notify each owner of the actual amount to be assessed against that owner.

The bill was reported out of Assembly Committee, 2nd reading.

A2740: Authorizes issuance of bonds secured by pledge of Economic Redevelopment and Growth Grant proceeds and municipal lien and imposition of special assessment to further secure bonds.

The Economic Redevelopment and Growth (ERG) Grant Program, provides economic incentives to developers of qualified projects by granting developers certain incremental increases in tax revenues related to their development projects. This committee substitute would supplement the ERG program by broadening the mechanisms available to finance the “up-front” costs of certain ERG development projects.

The committee substitute is modeled after the “Redevelopment Area Bond Financing Law,” sections 1 through 10 of P.L.2001. The committee substitute would allow a municipality, either directly or through application to the New Jersey Economic Development Authority or similar public instrumentality of the State, to issue bonds for projects that have been awarded incentive grants under the ERG program. These bonds would be secured by a pledge of the ERG incentive grant payments, and further secured by municipal liens, special assessments, or both, on property benefitting from the improvements.

The bill was reported as an Assembly Committee Substitute and referred to Assembly Appropriations Committee.

Senate Budget and Appropriations

S2468: Directs DEP to adopt standards for drinking water contaminants based upon recommendations of Drinking Water Quality Institute.

 This committee substitute would establish a procedure for the adoption of standards for hazardous drinking water contaminants. The committee substitute would direct the Department of Environmental Protection (DEP) to adopt standards for 16 hazardous drinking water contaminants, based upon recommendations of the Drinking Water Quality Institute (DWQI) that have already been made, and would require the DEP to use the same process for any future recommendation of the DWQI. 

After considering the recommendations for maximum contaminant levels of the DWQI, the commissioner would be required to propose rules and regulations pursuant to the “Administrative Procedure Act,” to establish maximum contaminant levels for those contaminants.  If the maximum contaminant levels proposed by the DEP differ from the recommendations made by the Drinking Water Quality Institute, the committee substitute directs the commissioner to detail the reasons for the deviation from those recommendations in the rule proposal.

In the case of the 16 contaminants for which DWQI has already made recommendations, the commissioner would be required to propose the rules and regulations no more than 60 days after the date of enactment of the bill.  In the case of new recommendations, the commissioner would be required to propose the rules and regulations no more than 60 days after a recommendation is transmitted from DWQI.

The committee substitute requires that the proposed rules and regulations be adopted pursuant to the “Administrative Procedure Act” no more than 180 days after the publication of the proposal.  The committee substitute also provides that if the commissioner fails to adopt maximum contaminant levels within the required time period, then the standards as recommended by the DWQI would be required to be adopted within 240 days after the date of enactment of the committee substitute, or within 240 days after the date of the transmission of the Drinking Water Quality Institute’s recommendations for any other contaminant.

The committee substitute would also require that the DWQI study the issue of perfluorinated compounds in drinking water, including perfluorooctanoic acid and perfluorooctane sulfonic acid, and recommend to the Department of Environmental Protection maximum contaminant levels for perfluorinated compounds in drinking water.  DEP would be required to adopt maximum contaminant levels for these compounds pursuant to the process described above.

Senate Budget and Appropriations Chairman, Paul Sarlo, stated he would hold the bill until 02/27/16, at which time he would re-post it.

Senate Environment and Energy

S2834: The "Water Quality Accountability Act"; imposes certain testing, reporting, management, and infrastructure investment requirements on water purveyors.

This bill, to be known as the “Water Quality Accountability Act,” is intended to enhance the reliability and safety of the State’s drinking water.  The bill would apply to all water purveyors. 

The bill would establish specific standards for the testing of fire hydrants.  The standards are modeled on requirements currently established in regulations by the Board of Public Utilities (BPU) applicable to those water purveyors regulated by the BPU.  Under this bill, the requirements would apply to all water purveyors. The bill would also require, as applicable, the responsible corporate officer of the public water system (if privately held), executive director (if an authority), or mayor or chief executive officer of the municipality (if municipally owned) to certify in writing each year that certain requirements set forth in the bill are met.

Lastly, this bill would require, beginning no later than one year after the bill is enacted into law, every water purveyor to implement an asset management plan designed to inspect, maintain, repair, and renew its infrastructure consistent with industry standard best practices, such as those used by the BPU and recommended by the American Water Works Association.  The asset management plan would include:  a water main renewal program designed to achieve a 150-year replacement cycle, or other appropriate replacement cycle as determined by a detailed engineering analysis of the asset condition and estimated service lives of the water mains serving the public water system; and a water supply and treatment program designed to inspect, maintain, repair, renew, and upgrade wells, intakes, pumps, and treatment facilities in accordance with all federal and State regulations, industry standards, and any mitigation plan that may be required pursuant to the bill.  Each water purveyor would be required to dedicate funds on an annual basis to address and remediate the highest priority projects as determined by its asset management plan.  The asset management plans and system condition reports would be certified to by the public water system’s licensed operator or professional engineer and the responsible corporate officer of the public water system (if privately held), executive director (if an authority), or mayor or chief executive officer of the municipality (if municipally owned), as applicable.  Each water purveyor would be required to annually submit a report to the DEP and the BPU, if applicable, identifying the infrastructure improvements to be undertaken in the coming year and the cost of those improvements, as well as identifying the infrastructure improvements completed in the past year and the cost of those improvements.  A municipal water department or municipal water authority would also be required to submit this report to the Division of Local Government Services in the Department of Community Affairs.

 This bill would establish a proactive policy concerning certain testing, reporting, management, and infrastructure investment requirements for water purveyors in order to enhance the reliability and safety of the State’s drinking water systems. 

Upon the sponsor’s request, Senate President Steve Sweeney, the bill was for discussion only.

S2873: Requires municipal land use plan element of master plan to address smart growth, storm resiliency, and environmental sustainability issues.

This bill requires that the land use element of a municipal master plan include a statement of strategy concerning:  smart growth, including consideration of potential locations for the installation of electric vehicle charging stations; storm resiliency with respect to energy supply, flood-prone areas, and environmental infrastructure; and environmental sustainability. These issues are of special importance to New Jersey, as the State is among the most ecologically diverse and densely populated states in the country.  The land use element of the municipal master plan is adopted by local boards intimately involved with local land use issues.  These boards are uniquely situated to consider and adopt a local strategy designed to address these issues in a practical and effective manner.

The New Jersey League of Municipalities (NJLOM) opposed the bill, citing the bill would mandate municipalities to include additional elements into their mast plan. Additionally, the league stated the bill would reduce municipal flexibility and asked if optional elements of the master plan would better accomplish aims of the bill. The NJLOM noted they would be willing to work with the committee on amendments.

The bill was reported out of committee.


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