Bill Text: NJ A2035 | 2010-2011 | Regular Session | Introduced
Bill Title: Increases threshold amount at which MLUL escrow deposits must be deposited in interest bearing accounts.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-02-08 - Introduced, Referred to Assembly Housing and Local Government Committee [A2035 Detail]
Download: New_Jersey-2010-A2035-Introduced.html
Sponsored by:
Assemblyman ALEX DECROCE
District 26 (Morris and Passaic)
SYNOPSIS
Increases threshold amount at which MLUL escrow deposits must be deposited in interest bearing accounts.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning escrow deposits under the Municipal Land Use Law and amending P.L.1985, c.315.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.1985, c.315 (C.40:55D-53.1) is amended to read as follows:
1. Whenever an amount of money in excess of [$5,000.00] $10,000 shall be deposited by an applicant with a municipality for professional services employed by the municipality to review applications for development, for municipal inspection fees in accordance with subsection h. of section 41 of P.L.1975, c.291 (C. 40:55D-53) or to satisfy the guarantee requirements of subsection a. of section 41 of P.L.1975, c.291 (C. 40:55D-53), the money, until repaid or applied to the purposes for which it is deposited, including the applicant's portion of the interest earned thereon, except as otherwise provided in this section, shall continue to be the property of the applicant and shall be held in trust by the municipality. Money deposited shall be held in escrow. The municipality receiving the money shall deposit it in a banking institution or savings and loan association in this State insured by an agency of the federal government, or in any other fund or depository approved for such deposits by the State, in an account bearing interest at the minimum rate currently paid by the institution or depository on time or savings deposits. The municipality shall notify the applicant in writing of the name and address of the institution or depository in which the deposit is made and the amount of the deposit. The municipality shall not be required to refund an amount of interest paid on a deposit which does not exceed $100.00 for the year. If the amount of interest exceeds $100.00, that entire amount shall belong to the applicant and shall be refunded to him by the municipality annually or at the time the deposit is repaid or applied to the purposes for which it was deposited, as the case may be; except that the municipality may retain for administrative expenses a sum equivalent to no more than 33 1/3% of that entire amount, which shall be in lieu of all other administrative and custodial expenses.
The provisions of this act shall apply only to that interest earned and paid on a deposit after the effective date of this act.
(cf: P.L.1985, c.315, s.1)
2. This act shall take effect immediately.
STATEMENT
Currently, the "Municipal Land Use Law" provides that whenever an applicant deposits more than $5,000 with a municipality to cover the costs of the municipal professionals' review of the application, municipal inspection fees and guarantee requirements, the amount must be held in escrow in an interest bearing account. Because of the excessive administrative burden this places on municipalities, this bill would increase from $5,000 to $10,000 the threshold amount that must be deposited by an applicant before the amount must be held in escrow in an interest bearing account.
