January 6, 2006
Re:		Legislative Developments

 

 

 

Municipal Clerk:  Please distribute to Mayor and Governing Body members.   ____________________________________________________________________________

 

 

On Thursday, January 5, 2006, Acting Governor Codey signed into law two measures of significant importance to municipalities.

 

I. Pay-to-Play 

A-3013 (S-1987) allows municipalities, counties and school boards to enact stronger pay-to-play bans and protects the pay-to-play ordinances that have been adopted by several municipalities.  The League strongly supported this legislation which was needed to protect the pay-to-play ordinances enacted in over 60 municipalities from being pre-empted by statewide legislation that took effect on January 1st.

 

Any municipal pay-to-play ordinance will be required to be filed with the New Jersey Secretary of State.  That requirement is intended to provide a central location where businesses or citizens can determine whether there is a municipal pay-to-play ordinance and the requirements for compliance with the local pay-to-play standards.

 

The legislation, which takes effect immediately, also includes important new disclosure requirements on all local government contracts with a potential value of $17,500 or more. 

 

There is some confusion about the impact of the legislation on contracts being awarded as municipalities reorganize.  The statute requires that “Not later than 10 days prior to entering into an contract having an anticipated value in excess of $17,500, except for a contract that is required by law to be publicly advertised for bids … any business entity bidding thereon or negotiating therefore [shall] submit along with its bid or price quote, a list of political contributions … that are required to be reported by the recipient … and that were made by the business entity during the preceding 12 month period, along with the date and amount of each contribution and the name of the recipient of each contribution …”

 

That applies to all contributions over $300, the level at which contributions must be reported by recipients on their ELEC reports.

 

There is no exemption from the reporting requirement simply because a large business entity does not have anyone with more than a 10% interest in the entity.  The legislation requires that all contributions by principals, partners, officers or directors of the business entity or their spouses must be reported:

 

When a business entity is other than a natural person, a contribution by: all principals, partners, officers, or directors of the business entity or their spouses; any subsidiaries directly or indirectly controlled by the business entity; or any political organization organized under section 527 of the Internal Revenue Code that is directly or indirectly controlled by the business entity, other than a candidate committee, election fund, or political party committee, shall be deemed to be a contribution by the business entity

 

Municipal officials should consult with their municipal attorney to determine the impact of the legislation and the reporting requirements on contracts being awarded by the municipality.  Additionally, municipalities that are awarding contracts at their reorganization meetings, where the disclosure requirement was not known sufficiently in advance of the meeting for literal compliance with the “10 days” requirement, may wish to have the business entity file a disclosure certification as soon as possible to demonstrate substantial compliance with the new law.

 

It is our understanding that the Department of Community Affairs will be issuing a Local Finance Notice within the next few days with some guidance on the new legislation.

 

II. Penalties for Municipal Ordinance Violations

A-3732 was signed into law by the Governor and takes effect immediately. The legislation, now identified as PL 2006, c 269, increases the authorized maximum penalty for an ordinance violation to $2,000.  The bill changed the statutory provisions setting the maximum, so that it is applicable in all municipalities. In order to implement the higher limit, the municipality needs to enact an ordinance setting the new maximum.  The statute also provides that where a fine in excess of $1250 is sought to be imposed for a housing violation or for a zoning violation, the owner shall be provided a 30-day period in which the owner has an opportunity to cure or abate the condition and the owner shall have an opportunity for a hearing before the court.  After the 30-day period the higher fine may be imposed if a court has not determined that the abatement has been substantially completed.  Again, municipalities should consult with their municipal attorney regarding the implementation of this new legislation.

III. “Adaptability” for affordable housing for the elderly and disabled.—A-3892/S-2696

Legislation requiring that all affordable housing built as part of a municipality’s “growth share” plan be adaptable for conversion to use by the disabled and elderly has flown through the legislature during the lame duck and is poised for votes in both the State Senate and the General Assembly on Monday, January 9th.   

The League originally opposed this legislation when it was introduced for a number of reasons, including the financial impact it would have on non-profit developers and for a number of technical inconsistencies in the bill regarding COAH certification.     The League Legislative Committee and our Affordable Housing committee expressed support for the underlying policy goal, and charged staff with seeking amendments to address our concerns with the bill.

As the legislation has progressed, it has been the subject of significant amendments.   Originally the legislation required all affordable housing units be “accessible” for use by the disabled and the elderly.     This has now been changed so that units are to be “adaptable” for conversion if necessary. 

The legislation also required compliance with the bill’s provisions upon filing a plan with COAH.   The League pointed out to sponsors that this was impractical, since COAH compliance is achieved over the course of the plan and not at submission.    

As a result, additional and significant amendments were made to the bill yesterday addressing these and some other technical concerns that we believe have improved the bill.    Both bills are scheduled for floor votes on Monday. 

IV.  A-4601---“Interest Rate Protection Act”

Yesterday, legislation was introduced and set on the agenda for the Assembly Appropriations committee designed to permit investment in derivative products.   Derivatives are risky investments and the League asked the Committee to hold consideration of the bill so we can fully review the legislation and provide input to the sponsor.      We appreciate that the sponsor and Committee agreed, and the bill was held.    

V. S-1926/A-3730, “New Jersey Smoke-Free Air Act"

Legislation requiring indoor public places and workplaces, including restaurants and bars, to be smoke free, with the exception of cigar bars or lounges, tobacco retail establishments and casinos passed an Assembly committee on Thursday and is poised for a vote on Monday.   It has already passed the State Senate.   The measure calls for penalties of $250 for a first-offense smoking violation; $500 for a second offense and $1,000 for each subsequent offense.

The League has always recognized the laudable intent of A-3730.  We have expressed reservations centered on a state-mandate and provision for State assumption of enforcement obligations.   Based on additional information provided to us and requests from some member municipalities to re-visit our position, the League provided no testimony or comment on the bill yesterday.

In the unlikely event the bill does not pass the Assembly on Monday, the League Legislative committee will reconsider the bill at its next meeting. 

VI. A-559/S-206, Commercial activities on preserved farmland

Legislation allowing commercial nonagricultural activities to occur on preserved farmland under certain circumstances was amended and released by an Assembly Committee yesterday.    It is scheduled for a floor vote on Monday.   Its Senate companion, S-206, previously passed the Senate, but it now posted for another Senate vote for concurrence.

The League opposed this legislation since it undermines the purposes of taxpayer-funded preservation programs.  In these circumstances, the development rights have been sold in order to preserve the farmland.   We believe this ability to “double dip” runs contrary to the spirit of preservation and the concepts of sound planning. 

 

While the bill does allow for local zoning approval, it is impossible for a local land use board and local governing body to anticipate every potential use in a zoned district, let alone on a particular piece of property.  Furthermore, current law already allows certain commercial activities .  We believe this expansion runs the risk of undermining New Jersey’s hugely successful farmland preservation efforts.  

 

The intent of the legislation is intended to remedy what some farmers see as an inequity in the law.  Farmers who entered early into the state preservation program were not afforded to the opportunity to exclude a portion of their farms for commercial use, an option now available.    

 

Yesterday’s amendments provide some safeguards, and the bill requires local zoning approvals.    The amendments also address the circumstances under which cellular towers (personal wireless services) may be allowed on the farmland.   

 

We have the Assembly committee amendments under review.