DRAFT—FOR DISCUSSION PURPOSES ONLY (4/14/08)

LEAGUE OF MUNICIPALITIES
LEGISLATIVE ANALYSIS

BILL NUMBER(S):  A-500  
SPONSOR(S):  Roberts, Watson-Coleman, Green, Giblin, Coutinho

STATUS: 
Assembly Housing and Local Government Committee.

LEGISLATIVE HISTORY
Introduced March 13, 2008; assigned to the Assembly Housing and Local Government Committee.     

As of this date, there is no Senate companion.

SYNOPSIS:
Revises laws concerning the provisions of affordable housing.

FISCAL IMPACT ON MUNICIPALITIES:  TBD

LEAGUE POSITION:  Under Review; referred to League Committees. 
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I. PROVISIONS OF LEGISLATION:

A. Amendments to existing laws

Amends PL 1992, c.79 (NJSA 40A:12A-1 et seq), the “Local Redevelopment and Housing Law ."  adding the term “Comparable affordable replacement housing:”

“…housing offered to households being displaced as a result of a redevelopment project, that is affordable to that household based on its income under the guidelines established by the Council on Affordable Housing in the Department of Community Affairs for maximum affordable sales prices or maximum fair market rents, and that is comparable to the household’s dwelling in the redevelopment area with respect to size and amenities of the dwelling unit, the quality of neighborhood, and the level of public services and facilities offered by the municipality in which the redevelopment area is located.”
(See Section 1, page 2.)

Amends the “Local Redevelopment and Housing Law,” (40A:12A-7), as follows:
6)  As of the date of the adoption of the resolution finding the area to be in need of redevelopment, an inventory of all housing units affordable to low and moderate income households, as defined pursuant to section 4 of P.L.1985, c.222 (C.52:27D-304), that are to be removed as a result of implementation of the redevelopment plan, whether as a result of subsidies or market conditions, listed by affordability level, number of bedrooms, and tenure.
     (7)  A plan for the provision, through new construction or substantial rehabilitation of one comparable, affordable replacement housing unit for each affordable housing unit that is identified as to be removed as a result of implementation of the redevelopment plan.  Displaced residents of housing units provided under any State or federal housing subsidy program, or pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), provided they are deemed to be eligible, shall have first priority for those replacement units provided under the plan; provided that any such replacement unit shall not be counted toward the municipal obligation under the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), if the housing unit which is removed had previously been credited toward satisfying the municipal fair share obligation.  To the extent reasonably feasible, replacement housing shall be provided within or in close proximity to the redevelopment area.  A municipality shall report annually to the Department of Community Affairs on its progress in implementing the plan for provision of comparable, affordable replacement housing required pursuant to this section.

Amends Section 4 of PL 1968, c. 410 (NJSA 52:14B-1), the “Administrative Procedures Act” to require a “housing impact statement” and a “smart growth development impact statement” when State agencies. 
See Section 3 of A-500, page 7.

 Section 2 of PL 1985, c.222 (NJSA 52: 27D-302), “the Fair Housing Act” is amended, as follows:
a.  Adds workforce house as a category covered by the Act.
See Section 4(c) of A-500, page 11;

 “…to create a new program to foster the rehabilitation of existing, but substandard, housing.”

This program would replace regional contribution agreements (RCAs), which are later outlawed by A-500.
See Section 4(f) of A-500, page 12.

Reinforces the Legislature’s oversight and obligations under the Act.
See Section 4(i) of A-500, page 12.

Bans the use of RCAs as a COAH compliance mechanism.
See Section 4(j) of A-500, page 12-13.

Section 4 of PL 1985, c.222 of  “the Fair Housing Act” is amended, as follows:

Adds “middle income housing” as a category under the definition of “Conversion;”
See Section 5(g) of A-500, page 13.

Adds definitions of “middle income housing” and “Very low income housing.”
See Section 5(m)and (n) of A-500, page 14.

Section 7 of PL 1985, c.222 of  “the Fair Housing Act” is amended, as follows:

In addition to calculating the need for low and moderate income housing (less than 80% of median income,) COAH will now be required to determine the housing need for middle income housing, defined as between 80% and 110% of median income.
See Section 6(b) of A-500, page 15.

“In order to avoid dilution of the constitutional obligation to provide housing affordable to households with a gross household income less than 80% of the median gross household income, under no circumstance, including but not limited to credits for housing constructed or rehabilitated between April 1, 1980 and December 15, 1986 and secondary sources such as filtering, shall the Council credit housing affordable to households with a gross household income equal to more than 80% but less than 110% of the median gross household income for households of the same size within the housing region in which the housing is located against the present and prospective fair share of the housing need in a given region calculated based on households with a gross household income less than 80% of the median gross household income for households of the same size within the housing region in which the housing is located;”
See Section 6(c)(1) of A-500, page 15-16.

No municipality shall be required to address a fair share of housing units affordable to households with a gross household income of less than 80% of the median gross household income beyond 1,000 units within ten years from the grant of substantive certification, unless it is demonstrated, following objection by an interested party and an evidentiary hearing, based upon the facts and circumstances of the affected municipality that it is likely that the municipality through its zoning powers could create a realistic opportunity for more than 1,000 [low and moderate] housing units affordable to households with a gross household income of less than 80% of the median gross household income units within that ten-year period.  For the purposes of this section, the facts and circumstances which shall determine whether a municipality's fair share shall exceed 1,000 units, as provided above, shall be a finding that the municipality has issued more than 5,000 certificates of occupancy for residential units in the ten-year period preceding the petition for substantive certification in connection with which the objection was filed.

The council, with respect to any municipality seeking substantive certification, shall require that a minimum number of housing units be reserved for occupancy by low and moderate or middle income households, or such percentage as may be consistent with the rules of the council regarding the percentage to be reserved relative to the density of development, for any residential development resulting from a zoning change made to a non-residentially-zoned property changing it from or to residential use within the 12-month period preceding or succeeding the filing of the application for residential development.

 The requirements of P.L.        , c.      (C.       ) (pending before the Legislature as this bill) for the calculation and crediting of affordable housing needs for middle income households shall be phased in proportionally over a five-year period, such that on the first day of the 61st month next following enactment of P.L.         , c.      (C.       ) (pending before the Legislature as this bill), the housing needs of middle income households will be fully addressed under the “Fair Housing Act,” P.L.1985, c.222 (C.52:27D-301 et al.).  Affordability controls for middle income housing shall not extend beyond a ten-year period, and any rules of the council requiring a percentage of resale profit return to the municipality upon resale of a housing unit after the expiration of any affordability controls shall not be applied to housing reserved for middle income households.

B. New Law
Section 7 through 15 (pages 18—23) is new law.

1.         Section 7 requires COAH to review the municipal plans every three years, to assure that “at least 25 percent of the housing units made available…will be reserved for occupancy by very low income households…”
See A-500, Section 7 (page 18)

Section 8 authorizes municipalities which have COAH substantive certification or a court approved plan to collect developer fees.  
See A-500, Section 8(a), page 19.

Such fees can only be used activities approved by the council to address fair share obligations.
See A-500, Section 8(c)(1), page 19.

Such fees cannot be used to reimburse municipalities for activities before the authorization of these development fees.
See A-500, Section 8(c)(2), page 19.

A municipality is authorized to set aside a portion of its development fee trust fund to provide affordability assistance to low and moderate income households, such as down payment assistance, low interest loans, common maintenance expenses for condos, rental assistance and any other program authorized by COAH.
See A-500, Section 8(c)(3)(a) and (b), page 19.

Municipalities are authorized to contract with a private or public entity to administer any part of its housing element. 
See A-500, Section 8(c)(4), page 19.

Not more than 20% of the revenues collected from development fees can be spent on administrative costs.
See A-500, Section 8(c)(5), page 19.

COAH “…shall establish a time by which all development fees collected within a calendar year shall be expended…”  All fees will be required to be spent within 4 years or shall be forfeited to the State.
See A-500, Section 8(d), pagse 19, 20.

A municipality cannot collect a development fee from a developer who is providing for the construction of affordable units, either on-site or elsewhere in the municipality. 

Section 8 of A-500 does not apply to the collection of the statewide commercial development fee, authorized by….
See A-500, Section 8(e), page 20.

Section 9 enables COAH to authorize municipalities to collect “payments-in-lieu” of construction, for the sole purpose of construction of new units or substantial rehabilitation.

A municipality cannot charge both a payment-in-lieu and a development fee (as authorized by Section 8) for the same development.
See A-500, Section 9(a), page 20.

A municipality that is unable to construct new affordable housing because of a lack of available land resources, or that does not have available substandard housing to rehabilitate, shall be required to transfer any unexpended revenue to the “Affordable Housing Trust Fund,” created later (Section 20) by A-500, for for use within the same housing retgions. 
See A-500, Section 9(b), pages 20, 21.

Section 10 requires COAH to publish “on a regular basis” and post on its website an up-to-date municipal status report, including the number of housing units constructed, construction starts, COs granted, rental units maintained and the number of housing units transferred or sold within the previous 12 months.

Municipalities will be required by COAH to provide in “a standardized electronic media format” the details of their fair share plan.
See A-500, Section 10, page 21.

Section 11 titles Section 11 through 14 of A-500 as the “Housing and Rehabilitation and Assistance Program Act.”
See A-500, Section 11, page 21.

Section 12 bans regional contribution agreements.
See A-500, Section 12(a), page 21.

RCAs pending approval are also banned.
The Legislature states its intention to earmark funding for housing rehabilitation, primarily in urban areas. 

The Legislature also identifies the need to provide funding to municipalities to create additional incentives and assistance for the production of affordable housing.
See A-500, Section 12, page 21.

Section 13 creates a “Housing Rehabilitation Program” and “Housing Rehabilitation Assistance Fund”  to assist  “…certain municipalities in the provision of housing through the rehabilitation of existing buildings.”
See A-500, Section 13(a)(b), page 22.

The DCA is charged with creating a 5-year strategic plan to identify and estimate the number of substandard housing units in the State, and to develop strategies to assist municipalities in rehabilitation programs.
See A-500, Section 13(c)(1) and (2).

The DCA Commissioner is authorized to award housing rehabilitation grants to a municipality that qualities for under aid under PL 1978, c.14 (NJSA 52:27D-178) (i.e., “Urban Aid”) 

DCA is to promulgate regulations giving municipalities “broad discretion” in developing a housing rehabilitation program.     The DCA can require the return of a grant if it determines the municipality is not rehabilitating housing according to its plan or regulations. 
See A-500, Section 13(d) and (e), page 22.

Section 14 appropriates $20 million for the “Housing Rehabilitation Assistance Fund” from the revenues generated by the realty transfer fee, PL 1968, c49, NJSA 46:15-8.

If the Legislature fails to appropriate funding as referenced above, it is to subsequently appropriate $20 million from the general fund for the same.

COMMENT:  This funding is not guaranteed in any particular year.

 C. Amendments to Existing Law
Sections 15—18 amend existing law.  

Section 15 amends Section 4 of PL 1968, c.49 (NJSA 46:15-8) to remit $20 million from the realty transfer fee.     No monies will be credited to the “Housing Rehabilitation Assistance Fund” until after $25 million is credited to the “Shore Protection Fund.”
See A-500, Section 15(c)(3), page 24.

Section 16 amends Section 11 of the Fair Housing Act, (NJSA 52:27D-311) adding the newly defined category of “middle income” and requiring that when requiring inclusionary developments, a municipality is to offer incentives to the developer, such as increased densities and reduced costs.
See A-500, Section 16 (a), (a)(1), (a)(3) and (h), page 26.

Section 17 amend Section 12 of the Fair Housing Act (NJSA 52:27D-312) to effectively invalidate any RCAs approved after June 1, 2006.  
See A-500, Section 17, pages 27,29.
Comment:  This section seems self-contradictory. 

Section 18 amends Section 20 of the Fair Housing Act (NJSA 52:27D-320) to dissolve the existing and replace it with the “New Jersey Affordable Housing Trust Fund.”    The new fund, which is to be a non-lapsing, revolving fund will be the repository of all State funds appropriated for affordable housing.    The revenues for this new fund will be generated from:
The realty transfer fee (See Section 15 of A-500);
The new, 2.5% commercial development fee (See Section 36 of A-500);
Monies from local trust funds forfeited to the State (See Section x of A-500);
Any other revenues dedicated for these purposes. 
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D. New Law
Section 19 (page 32)forward is new law.

Section 19 requires that for new construction under the jurisdiction of a regional planning entity, including the Meadowlands, Highlands and Pinelands, 20% shall be reserved for low, moderate or middle income households.
See A-500, Section 19(a), page 32.

Section 19 also requires that any developer of a project consisting of new units that receives any state funding, such as transit villages, shall be required to reserve 20% for low, moderate or middle income households.    This requirement is waived if the municipality has received COAH substantive certification or a judgment of repose or compliance by a Court, and such a set-aside is not required by the plan.
See A-500, Section 19(b), page 33.

Section 20 regards low-income tax credits. 

Section 21 requires HMFA to publish and post on its website an annual report.
See A-500, Section 21, page 33.

Section 22 designates Sections 22 through 31 as the “Strategic Housing Plan Act.”
See A-500, Section 22, page 33.

Section 23 outlines the needs and goals of the Strategic Housing Plan Act.
See A-500, Section 23, pages 33-34.

Section 24 defines terms for the Strategic Housing Plan Act.
See S-500, Section 24, pages 34-35.

Section 25 creates the “State Housing Commission,” allocated within the Department of Community Affairs.    The Commission will consist of 13 public members, and the following as non-voting, ex-officio members:
Commissioner, Community Affairs
Commissioner, Environmental Protection
Commissioner, Human Services
Commissioner, Transportation
Commissioner, Education
Chair, State Planning Commission
State Treasurer.

Of the 13 public members, 11 will be appointed by the Governor, as follows:

• 4 will be individuals with expertise in housing preservation, development and management, and do not hold public office or public employment.  One of these individuals shall be particular expertise in addressing the needs of the homeless;
• 2 will be individuals with expertise in urban revitalization and redevelopment, and do not hold public office.
• 2 will be local elected officials; one from a municipality with a population over 50,000;
• 2 will be individuals with expertise in representing the needs of the low, moderate and middle incomed, and do not hold public office;
• 1 will be an individual with expertise in planning and land use, and who does not hold public office.

The remaining public members shall not hold public office or public employment, and one shall be appointed by the Speaker of the General Assembly and one by the State Senate President.

The position of Senior Deputy Commissioner for Housing will be established with DCA, and this person will serve as executive secretary of the new Commission.

The duties of the commission shall be to:

• Provide guidance and direction to State agencies in respect to how their policies interact with housing;
• Prepare and adopt the annual strategic housing plan;
• Conduct public hearings and other outreach to allow for public input into the housing plan;
• Gather and disseminate information on housing needs for the Commission and public.

Section 26 requires the Department of Community Affairs to provide staff resources for the new commission.

Section 27 creates a interdepartmental unit working group to support the activities of the new commission, including representatives from the Departments of Community Affairs, Human Services, Children and Families, Health and Senior Services, Education, Environmental Protection, Public Advocate, Transportation and Treasury, as well as the following agencies: Council on Affordable Housing (COAH); Housing and Mortgage Finance Agency (HMFA); Office of Smart Growth (OSG); Highlands Council; Meadowlands Commission; and Pinelands Commission.

Section 28 requires the annual strategic housing plan, referenced in earlier sections,  with the following objectives:

• To ensure that quality housing for people of all income levels is made available throughout the State of New Jersey.
• To overcome the shortage of housing affordable to low, moderate, and middle income households, in order to ensure the viability of New Jersey’s communities and maintain the State’s economic strength.
• To meet the need for safe and accessible affordable housing and supportive services for people with disabilities.
• To foster a full range of quality housing choices for people of diverse incomes through mixed income development in urban areas and in locations appropriate for growth, including transit hubs and corridors, and areas of job concentration.
• To address the needs of communities that have been historically underserved and segregated due to barriers and trends in the housing market, and frame strategies to address the needs of those communities.
• To facilitate the preservation of existing affordable rental housing, including both subsidized and private market rental housing.
• To further the preservation of low and moderate income and middle income homeownership, including strategies to protect lower income homeowners from the loss of their homes through foreclosure. 

The strategic housing plan shall take into consideration the needs of the following populations:

• Households earning below 50% of the area median income, with particular emphasis on households earning less than 30% of the area median income;
• Low income senior citizens of 62 years of age or older;
• Low income persons with disabilities, including but not limited to physical disability, developmental disability, mental illness, co-occurring mental illness and substance abuse disorder, and HIV/AIDS;
• Homeless persons and families, and persons deemed at high risk of homelessness;
• Low and moderate income and middle income households unable to find housing near work or transportation;
• Low and moderate income and middle income persons and families in existing affordable housing that is at risk of becoming unaffordable or being lost for any reason;
• Any other part of the population that the commission finds to have significant housing needs, either statewide or in particular areas of the State.

 The plan shall include the following:

• The identification of all funds which any agency or department of the State controls and uses for housing construction, rehabilitation, preservation, operating or rental subsides and supportive services, including bond proceeds, the allocation of federal Low Income Housing Tax Credits, and the use of administrative funds by the agency or the department;
• Goals for the number and type of housing units to be constructed, rehabilitated, or preserved each year for the underserved populations identified in subsection b. of this section, taking into account realistic assessments of financial resources and delivery capacity;
• Specific recommendations for the manner in which all funds identified in paragraph (1) of this subsection should be prioritized and used, either through new construction, rehabilitation, preservation, rental subsidies, or other activities, to address the needs of the underserved populations set forth in subsection b. of this section;
• Specific actions needed to ensure the integrated use of State government resources that can be used to create or preserve affordable housing, provide supportive services, facilitate the use of housing for urban revitalization, and prevent homelessness, including an identification of the specific agencies and programs responsible for each action;
• An assessment of the State’s performance during the preceding year;
• Recommendations for changes to any program or use of funds which the State controls available for land use planning, housing construction, rehabilitation, preservation, operating or rental subsides and supportive services, including both procedural and substantive changes, and the specific agencies responsible for each change;
• Recommendations for State and local actions to promote the creation and preservation of subsidized affordable and market-rate housing by private sector, non-profit, and government agencies, with particular reference to changes to programs, regulations, and other activities that impede such activities;
• Recommendations for State and local actions for programs and strategies through which the provision of affordable and mixed-income housing can better further citywide and neighborhood revitalization in the State’s urban areas; and
• Identification of strategies that local government can take to create or preserve affordable housing, including specific recommendations for the use of monies collected through developer fees in local housing development trust funds.

Section 29 requires a draft plan be ready by October 1 of each year, and the final plan be ready by January 1.     

Section 30 requires the DCA to create an “Annual Housing Performance Report.”   The report is to include the following:
All housing units constructed, rehabilitated, or preserved in which funds controlled by any agency of the State were utilized, including the      number of units by:
(a)Location;
(b)  Affordability and income ranges of occupants;
(c)  Target population; i.e., small family, large family, senior citizens, people with disabilities;
(d)  Type of housing, including ownership, rental, and other forms of tenure; physical type such as single family or multifamily; and whether the unit was newly constructed, rehabilitated, or preserved; and
                        (e)  The amount and source of all State-controlled funds used.
All bond issuance activity by the agency, including interest rates and the use of bond proceeds.
All other activities, including financial support, technical assistance, or other support conducted by the State to further affordable housing.
Municipal performance pursuant to the “Fair Housing Act,” P.L.1985, c.222 (C.52:27D-301 et al.), including the number of units listed for the distinct populations as enumerated in subsection b. of section 28 of P.L.         , c.      (C.       ) (pending before the Legislature as this bill), and the monies collected and the use of all developer fee proceeds deposited into municipal housing trust funds.
For every report issued subsequent to the end of the first year for which a plan has been prepared pursuant to sections 28 and 29 of P.L.         , c.      (C.       ) (pending before the Legislature as this bill) :
(a)  A comparison between the goals, strategies, and priorities set forth in the plan and the outcomes of programs and strategies carried out by the State during the year, and a statement of the reasons for any differences between the plan and the State’s programs and strategies; and
(b)  A description of the manner in which the State has addressed the recommendations, if any, for procedural or substantive changes to any State program or activity set forth in the plan. 
Statistical appendices providing information on individual projects and funding allocations.

Section 31 creates the position of Senior Deputy Commissioner for Housing with the DCA.

Section 32 requires state agencies to issue a “housing affordability impact analysis” and a “smart growth development impact analysis.”

Section 33 identifies Section 33 through Section 39 of the bill as the “Statewide Non-residential Development Fee Act.”

Section 34 outlines the authority, purposed and need for a statewide non-residential (i.e. commercial) development fee.

Section 35 defines terms for the new development fee act.

Section 36 authorizes a statewide non-residential development fee of 2.5% of either:

• the equalized assessed value of the land and improvements for all new non-residential construction on an unimproved lot or lots;
• the increase in equalized assessed value, of the reconstruction of or additions to existing structures to be used for non-residential purposes.

Subsection b provides a listing of exemptions, from the new fee (provided the properties maintain their tax status), including construction on property used by places of worship, property used for educational purposes as well parking lots and structures and any non-residential development which is an amenity for the public such as recreational facilities, community center and seniors center. 

Subsection c(1) directs the revenues form the new fee to the New Jersey Affordable Housing Trust Fund.

Subsection c(2) directs that revenues generated from a municipality that has a “status of compliance” with the Fair Housing Act.

Subsection e states,
e.  The construction official responsible for the issuance of a building permit shall notify the local tax assessor of the issuance of the first building permit for a development which may be subject to a non-residential development fee.  Within 90 days of receipt of that notice, the municipal tax assessor, based on the plans filed, shall provide an estimate of the equalized assessed value of the non-residential development.  The construction official responsible for the issuance of a final certificate of occupancy shall notify the local assessor of any and all requests for the scheduling of a final inspection on property which may be subject to a non-residential development fee.  Within 10 business days of a request for the scheduling of a final inspection, the municipal assessor shall confirm or modify the previously estimated equalized assessed value of the improvements of the non-residential development in accordance with the regulations adopted by the Treasurer pursuant to P.L.1971, c.424 (C.54:1-35.35); calculate the non-residential development fee pursuant to sections 33 through 39 of P.L.       , c.   (C.             ) (pending before the Legislature as this bill); and thereafter notify the developer of the amount of the non-residential development fee.  Should the municipality fail to determine or notify the developer of the amount of the non-residential development fee within 10 business days of the request for final inspection, the developer may estimate the amount due and pay that estimated amount consistent with the dispute process set forth in subsection b. of section 38 of P.L.       , c.   (C.             ) (pending before the Legislature as this bill).  Upon tender of the estimated non-residential development fee, provided the developer is in full compliance with all other applicable laws, the municipality shall issue a final certificate of occupancy for the subject property.  Failure of the municipality to comply with the timeframes or procedures set forth in this subsection may subject it to penalties to be imposed by the commissioner;  any penalties so imposed shall be deposited into the New Jersey Affordable Housing Trust Fund established pursuant to section 20 of P.L.1985, c.222 (C.52:27D-320).

Subsection f states that any municipality not in compliance with the Fair Housing Act forfeits the revenues from the new fee to the new affordable housing trust fund. 

Subsection g refers to “urban aid municipalities.”    These municipalities “…  “may impose, collect, or spend development and non-residential development fees by filing a development fee ordinance and spending plan, and requesting approval by the council.  Such municipalities shall be permitted to develop separate spending plans, which plans may provide for housing rehabilitation, new construction of housing or schools, repair or enhancement of infrastructure, grants to redevelopment projects, job training, construction of day care centers, or any activity which the governing body of the municipality believes will provide economic stability and sustainable neighborhoods.”

Section 37 authorizes DCA to promulgate regulations to administer the new fee.

Section 38 includes additional exemptions from the new fee, including development applications deemed complete and non-residential property for which a construction permit has been issued prior to the effective date of A-500.

Subsection b allows developers to challenge the imposition of the new fee by submitting a challenge to the DCA Commissioner.

Subsection c states,
“     c.  Whenever non-residential development is situated on real property that has been previously developed with a building, structure, or other improvement, the non-residential development fee shall be equal to two and a half (2.5) percent of the equalized assessed value of the land and improvements on the property where the non-residential development is situated at the time the final certificate of occupancy is issued less, the equalized assessed value of the land and improvements on the property where the non-residential development is situated, as determined by the tax assessor of the municipality at the time the developer or owner first sought approval for a construction permit pursuant to the State Uniform Construction Code, or approval under the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).   If the calculation required under this section results in a negative number, the non-residential development fee shall be zero.
Whenever a developer of non-residential development has made or committed itself to make a financial or other contribution relating to the provision of housing affordable to low and moderate income and middle income households prior to the enactment of P.L.     , c.     (C.     ) (pending before the Legislature as this bill), the non-residential development fee shall be reduced by the amount of the financial contribution and the fair market value of any other contribution made by or committed to be made by the developer.  For purposes of this section, a developer is considered to have made or committed itself to make a financial or other contribution, if and only if:  (1) the contribution has been transferred, including but not limited to when the funds have already been received by the municipality; (2) the developer has obligated itself to make a contribution as set forth in a written agreement with the municipality, such as a developer’s agreement; or (3) the developer’s obligation to make a contribution is set forth as a condition in a land use approval issued by a municipal land use agency pursuant to the "Municipal Land Use Law," P.L.1975, c.291 (C. 40:55D-1 et seq.)

Subsection d states that no municipality is required to return any contribution made by a non-residential developer before the effective date of the legislation, unless the developer receives an amended, modified or new land use approval, in which case the municipality must return the contribution.  

Subsection e states that the legislation shall not affect the method or timing of assessing real property for property taxation purposes. 

Section 39 invalidates provisions in local ordinances which imposes a fee for the development of affordable housing upon a developer of non-residential property, including any and all development fee ordinances, or provisions which impose an obligation relating to the provisions of housing for low, moderate and middle income households, or payments-in-lieu of building as a condition of non-residential development.