Bill Text: NJ A2789 | 2024-2025 | Regular Session | Introduced
Bill Title: Establishes four-year "Rent for Credit Pilot Program" in Department of Community Affairs.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly Housing Committee [A2789 Detail]
Download: New_Jersey-2024-A2789-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblyman LOUIS D. GREENWALD
District 6 (Burlington and Camden)
SYNOPSIS
Establishes four-year "Rent for Credit Pilot Program" in Department of Community Affairs.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning credit reports and supplementing Title 56 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Consumer reporting agency" means the same as that term is defined in section 3 of P.L.1997, c.172 (C.56:11-30).
"Department" means the Department of Community Affairs.
"Dwelling unit" means a room or connected rooms within a residential structure forming a self-contained area within that structure and adapted to provide permanent living accommodations for a person or family, including the availability of heat, electricity, water, and necessary equipment for the culinary and sanitary requirements of a household of the size for which it is intended.
"Financial education course" means an educational course that provides information about the importance of building and maintaining good credit. "Financial education course" includes courses offered by or through a local bank, a nonprofit organization, the department, local municipal agencies, or any third party under contract with any such entity.
"Landlord" means a person or entity who owns or purports to own a building where there is rented or offered for rent dwelling units under either a written or oral lease and who receives State or federal funding to subsidize dwelling units.
"Pilot program" means the "Rent for Credit Pilot Program" administered by the department, as described in subsection a. of section 2 of this act.
"Rent payment information" means information concerning a participant tenant's timely payment of rent, untimely payment of rent, or nonpayment of rent. "Rent payment information" does not include information concerning a tenant's payment or nonpayment of any fees.
2. a. There is established within the Department of Community Affairs a four-year "Rent for Credit Pilot Program" that shall be administered over a period of four consecutive fiscal years. The purpose of the pilot program shall be to enable low-income tenants that rent a subsidized dwelling unit to generate and build credit without taking on an unsustainable debt burden by allowing tenants to report rent payments to consumer reporting agencies.
b. A landlord renting or offering for rent a dwelling unit, that volunteers to participate in the pilot program, shall agree in writing to:
(1) comply with the rules promulgated by the department pursuant to section 3 of this act; and
(2) provide information, to the extent practicable, to the department concerning the execution of the program for the purpose of the report in section 4 of this act.
c. A participating landlord shall provide information to tenants on the details of the pilot program.
d. If a tenant elects to participate in the pilot program, the landlord may require that the tenant pay a monthly fee of $10 or a fee to cover the cost of reporting the tenant's rent payment information, whichever is less. If a tenant who elects to participate in the pilot program fails to pay the monthly fee required by the landlord, nonpayment of the fee shall not:
(1) establish a cause for removal of the tenant from the dwelling unit pursuant to P.L.1974, c.49 (C.2A:18-61.1); or
(2) provide the landlord with justification to deduct the fee from the tenant's security deposit.
If the monthly fee remains unpaid for more than 30 days, the landlord shall cease to report the participating tenant's rental payments.
e. The department and the Housing and Mortgage Financing Agency shall provide information to non-participating landlords about the program and encourage participation in the program.
3. The department shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations that include and accomplish the following:
a. provide a list of eligible credit reporting agencies that a landlord may use to report a tenant's rental payment information;
b. approve a software vendor that provides an operational program for a landlord to transmit reports of a tenant's payment or nonpayment of rent to a credit reporting agency;
c. ensure that each landlord reports rent payment information concerning a tenant's payment or nonpayment of rent after the date upon which the tenant elected to participate in the pilot program; and
d. establish a standard form for a tenant to use to elect to participate or cease to participate in the pilot program. The standard form shall be distributed to tenants by the tenant's landlord and shall include the following:
(1) a statement that the tenant's participation in the pilot program is voluntary and that a tenant may cease participating in the pilot program at any time and for any reason by providing notice to the tenant's landlord;
(2) information on the positive and negative effects of credit reporting on an individual's credit standing;
(3) a department website
address where a tenant may view information concerning financial literacy;
(4) a statement that all of a participating tenant's rent payments shall be reported, regardless of whether the payments are timely, late, or missed, and that reporting may commence within 30 days after the tenant elects to participate in the pilot program;
(5) a statement that if a tenant elects to cease participating in the pilot program, the tenant shall not resume participation for six months;
(6) a statement that a participating tenant may be subject to a monthly credit reporting fee established by the landlord that shall not exceed $10, and that nonpayment of the fee after 30 days shall serve as notice to the landlord of the tenant's decision to cease participating in the pilot program;
(7) instructions describing how to cease participating in the pilot program; and
(8) a signature block for the tenant to sign and date the form.
4. a. On or before February 1 of the pilot program's second fiscal year, the department shall conduct a review of the cumulative effectiveness of the pilot program. The review shall include, but not be limited to:
(1) the number of landlords participating in the pilot program;
(2) the number of participating tenants, including the number who ceased participating in the pilot program;
(3) the demographics of participating tenants, including race, ethnicity, gender, income, and age, as may be voluntarily provided by participant tenants;
(4) the cost of administering the pilot program;
(5) the number of residential properties offered by each landlord involved in the pilot program;
(6) the city and county of each property offered by the landlords involved in the pilot program;
(7) a short narrative of the challenges faced by landlords and participating tenants during the pilot program;
(8) an assessment of how the pilot program, in aggregate, positively or negatively affected participating tenants' credit; and
(9) a recommendation from the department concerning the continuation of the pilot program.
b. The department shall compile a report based upon the review required pursuant to subsection a. of this section and shall submit the report to the Governor and, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature.
5. This act shall take
effect on the first day of the sixth month next following the date of
enactment, except that the Commissioner of the Department of Community Affairs
may take any anticipatory administrative action in advance as shall be
necessary for the implementation of the act.
STATEMENT
This bill requires the Department of Community Affairs to establish a "Rent for Credit Pilot Program" ("pilot program") for low-income tenants. The purpose of the pilot program is to enable low-income tenants that rent a subsidized dwelling unit to generate and build credit without taking on an unsustainable debt burden by allowing tenants to report rent payments to consumer reporting agencies.
Under the bill, a landlord may volunteer to participate in the pilot program. If a landlord participates, information is to be provided to tenants detailing the "Rent for Credit Pilot Program."
Landlords involved with the pilot program will be required to agree in writing to:
(1) comply with the rules promulgated by the department pursuant the bill; and
(2) provide information, to the extent practicable, to the department concerning the execution of the program for the purpose of the report in section 4 of the bill.
The bill further provides that if a tenant elects to participate in the pilot program, the landlord may require that the tenant pay a monthly fee of $10 or a fee to cover the cost of reporting the tenant's rent payment information, whichever is less. If a tenant fails to pay the monthly fee required by the landlord, nonpayment of the fee will not:
(1) establish a cause for removal of the participant tenant from the dwelling unit; or
(2) provide the landlord with justification to deduct the fee from the participant tenant's security deposit.
If the monthly fee remains unpaid for more than 30 days, the landlord will cease to report the participating tenant's rental payments.
Additionally, the department will be required to adopt rules and regulations under the Administrative Procedure Act that include and accomplish the following:
(1) provide a list of eligible credit reporting agencies that a landlord may use to report a tenant's rental payment information;
(2) approve a software vendor that will develop a program for a landlord to transmit reports of a tenant's payment or nonpayment of rent to a credit reporting agency;
(3) ensure that each landlord reports rent payment information concerning a tenant's payment or nonpayment of rent after the date upon which the tenant elected to participate in the pilot program; and
(4) establish a standard form for a tenant to use to elect to participate--or cease to participate--in the pilot program. The standard form will be distributed to tenants by the tenant's landlord and will include the following:
(a) a statement that the tenant's participation in the pilot program is voluntary and that a tenant may cease participating in the pilot program at any time and for any reason by providing notice to the participant tenant's landlord;
(b) information on the positive and negative effects of credit reporting on an individual's credit standing;
(c) a department website address where a tenant may view information concerning financial literacy;
(d) a statement that all of participant participating tenant's rent payments may be reported, regardless of whether the payments are timely, late, or missed, and that reporting may commence within 30 days after the tenant elects to participate in the pilot program;
(e) a statement that if a tenant elects to cease participating in the pilot program, the tenant may not resume participating in the pilot program for at least 6 months;
(f) a statement that a participating tenant may be subject to a monthly credit reporting fee established by the landlord that shall not exceed $10, and that nonpayment of the fee after 30 days will serve as notice to the landlord of the tenant's decision to cease participating in the pilot program;
(g) instructions describing how to elect to cease participating in the pilot program; and
(h) a signature block where the tenant may sign and date the form.
Finally, the bill provides that the department will be required to conduct a review of the cumulative effectiveness of the pilot program on or before February 1 of the program's second fiscal year. The review will include, but not be limited to:
(1) the number of landlords participating in the pilot program;
(2) the number of participating tenants, including the number of those who ceased participating in the pilot program;
(3) the demographics of participating tenants, including race, ethnicity, gender, income, and age, as may be voluntarily provided by participant tenants;
(4) the cost of administering the pilot program;
(5) the number of residential properties offered by each landlord;
(6) the city and county of each property offered by the landlords involved in the pilot program;
(7) a short narrative of the challenges faced by landlords and participating tenants during the pilot program;
(8) an assessment of how the pilot program, in aggregate, positively or negatively affected participating tenants' credit; and
(9) a recommendation from the department concerning the continuation of the pilot program.
Once the review is completed, the department will be required to compile a report based upon the review's conclusions and submit the report to the Governor and the Legislature.
