Bill Text: NJ S3116 | 2022-2023 | Regular Session | Introduced


Bill Title: Concerns affordable housing requirements and incentivizes development of single family housing with tax credits for developers.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-10-03 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S3116 Detail]

Download: New_Jersey-2022-S3116-Introduced.html

SENATE, No. 3116

STATE OF NEW JERSEY

220th LEGISLATURE

 

INTRODUCED OCTOBER 3, 2022

 


 

Sponsored by:

Senator  JOSEPH P. CRYAN

District 20 (Union)

 

 

 

 

SYNOPSIS

     Concerns affordable housing requirements and incentivizes development of single family housing with tax credits for developers.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning affordable housing by requiring reservation of affordable units in certain new construction and incentivizing the development of single family housing with developer tax credits, and amending and supplementing various parts of the statutory law.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.  (New section)  Sections 1 through 5 of P.L.    , c.    (C.        through        ) (pending before the Legislature as this bill) shall be known and may be cited as the "Affordable Single Family Homes Incentive Program Act."

 

     2.  (New section)  As used in sections 1 through 5 of P.L.    , c.    (C.        through        ) (pending before the Legislature as this bill):

     "Agency" means the New Jersey Housing and Mortgage Finance Agency established pursuant to P.L.1983, c.530 (C.55:14K-1 et seq.).

     "Authority" means the New Jersey Economic Development Authority established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4).

     "Board" means the Board of the New Jersey Economic Development Authority, established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4).

     "Developer" means any person that enters or proposes to enter into a development agreement with the authority pursuant to the provisions of section 4 of P.L.    , c.    (C.         ) (pending before the Legislature as this bill).

     "Development agreement" means an agreement between the authority and a developer under which the developer agrees to perform any work or undertaking necessary for the construction of a single family residential development project.

     "Project financing gap" means the part of the total construction cost, including reasonable and appropriate return on investment, that remains to be financed after all other sources of capital have been accounted for, including, but not limited to, developer contributed capital, which shall not be less than 20 percent of the total construction cost, and investor or financial entity capital or loans for which the developer, after making all good faith efforts to raise additional capital, certifies that additional capital cannot be raised from other sources.

     "Single family home" means a dwelling unit in a residential building consisting of one to four dwelling units, including dwelling units that are fully detached, semi-detached, row houses, duplexes, quadruplexes, and townhouses.

     "Single family residential development project" or "project" means a specific development project to construct new single family homes in accordance with section 18 of P.L.2008, c.46 (C.52:27D-329.9) or section 6 of P.L.    , c.    (C.       ) (pending before the legislature as this bill).

 

     3.  (New section)  a.  (1)  The Affordable Single Family Homes Incentive Program is established as a program under the jurisdiction of the New Jersey Economic Development Authority.  The purpose of the program is to compensate developers of single family residential development projects that are developed in accordance with section 18 of P.L.2008, c.46 (C.52:27D-329.9) or section 6 of P.L.    , c.    (C.       ) (pending before the legislature as this bill). 

     (2)  To implement this purpose, the authority shall issue tax credits to developers in amounts not to exceed the value of developer's project financing gap for the project.  The authority shall award a developer of a project, who enters into a development agreement pursuant to section 4 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5.  A developer shall apply the credit awarded against the developer's liability for the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 for the privilege period during which the authority awards the developer a tax credit pursuant to subsection a. of this section.  A developer may carry forward an unused credit, if necessary, for use in the seven privilege periods next following the privilege period for which the credit is awarded.

     (3)  The total value of tax credits approved by the authority shall not exceed the limitations set forth in section 98 of P.L.2020, c.156 (C.34:1B-362).  For the purpose of determining the aggregate value of tax credits approved in a fiscal year, a tax credit shall be deemed to have been approved at the time the authority approves an application for an award of a tax credit. 

     (4)  If the authority approves less than the total amount of tax credits authorized pursuant to this section in a fiscal year, the remaining amount, plus any amounts remaining from previous fiscal years, shall be added to the limit of subsequent fiscal years until that amount of tax credits are claimed or allowed.  Any unapproved, uncertified, or recaptured portion of tax credits during any fiscal year may be carried over and reallocated in succeeding years.

     b.  A developer may seek a tax credit for a single family residential development project as described in subsection a. of this section in a form and manner prescribed in regulations adopted by the authority, in consultation with the New Jersey Housing and Mortgage Finance Agency, pursuant to the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

     c.  A single family residential development project shall be eligible for a tax credit only if the developer demonstrates to the authority and the agency at the time of application that:

     (1)  the developer is constructing single family homes in accordance with section 18 of P.L.2008, c.46 (C.52:27D-329.9) or section 6 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill);

     (2)  except as provided in subsection d. of this section, the developer has not commenced any construction at the site of the single family residential development project, except for preliminary assessments and investigations, prior to applying for a tax credit pursuant to this section, but intends to begin construction and development of the site immediately upon approval of the tax credit;

     (3)  without the tax credit, the single family residential development project with affordable elements is not economically feasible;

     (4)  a project financing gap exists;

     (5)  the developer has obtained and submitted to the authority a letter evidencing support for the single family residential development project from the governing body of the municipality in which the single family residential development project is located; and

     (6)  each worker employed to perform construction work at the single family residential development project shall be paid not less than the prevailing wage rate for the worker's craft or trade, as determined by the Commissioner of Labor and Workforce Development pursuant to P.L.1963, c.150 (C.34:11-56.25 et seq.).  The prevailing wage requirements shall apply for construction work through the completion of the single family residential development project. 

     d.  A developer who has commenced construction at the site and who could not reasonably have known the full extent of the site workload prior to commencing the construction may still apply for a tax credit under the program, if the developer certifies to the authority, under the penalty of perjury, that the developer cannot reasonably finish the construction of the single family residential development project absent the tax credit.

     e.  (1)  Prior to approval of an application, the authority shall confirm with the Department of Labor and Workforce Development, the Department of Environmental Protection, and the Department of the Treasury whether the developer is in substantial good standing with the respective department, or has entered into an agreement with the respective department that includes a practical corrective action plan for the developer.  The authority may also contract with an independent third party to perform a background check on the developer.  The developer shall certify that any contractors or subcontractors that perform work at the single family residential development project: (a) are registered as required by "The Public Works Contractor Registration Act," P.L.1999, c.238 (C.34:11-56.48 et seq.); (b) have not been debarred by the Department of Labor and Workforce Development from engaging in or bidding on Public Works Contracts in New Jersey, and (c) possess a tax clearance certificate issued by the Division of Taxation in the Department of the Treasury.  Provided that the developer is in substantial good standing with the Department of Labor and Workforce Development, the Department of Environmental Protection, and the Department of the Treasury, or has entered into such an agreement, following approval of an application by the board, the authority shall enter into a development agreement with the developer, as provided for in section 4 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill). 

     (2)   The authority, in consultation with the agency, may impose additional requirements upon an applicant through rule or regulation adopted pursuant to the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), if the authority or the agency determines the additional requirements to be necessary and appropriate to effectuate the purposes of P.L.    , c.    (C.        ) (pending before the Legislature as this bill).

     f.  The authority, in consultation with the agency, shall conduct a review of the applications through a competitive application process whereby the authority and the agency shall evaluate all applications submitted by a date certain, as if all received applications were submitted on that date.  In addition to the eligibility criteria set forth in subsection c. of this section, the authority, in consultation with the agency, may consider additional factors that may include, but shall not be limited to: the economic feasibility of the single family residential development project; the benefit of the single family residential development project to the community in which the single family residential development project is located; affordable housing need in the community in which the single family residential housing project is located; and, if the developer has a board of directors, the extent to which that board of directors is diverse and representative of the community in which the single family residential development project is located.  The authority, in consultation with the agency, shall submit applications that comply with the eligibility criteria set forth in this section, fulfill the additional factors considered by the authority pursuant to this subsection, satisfy the submission requirements, and provide adequate information for the subject application, to the board for final approval.

     g.  If the authority determines that a developer made a material misrepresentation on the developer's application, the developer shall forfeit all tax credits awarded under the program.

     h.  If circumstances require a developer to amend its application to the authority, then the developer, or an authorized agent of the developer, shall certify to the authority that the information provided in its amended application is true, under the penalty of perjury.

 

     4.  (New section)  a.  Following approval of an application by the board, but prior to the start of any construction at the site of the single family residential development project, except activities disclosed at the time of approval, the authority shall enter into a development agreement with the developer.  The chief executive officer of the authority shall negotiate the terms and conditions of the development agreement on behalf of the State.

     b.    The development agreement shall specify the amount of the tax credit to be awarded to the developer, the date on which the developer shall complete the construction, and the projected project cost.  The development agreement shall require the developer to submit progress reports to the authority and to the agency every six months pursuant to subsection f. of this section. 

     c.  The authority shall not enter into a development agreement with a developer unless:

     (1)   the development project complies with the authority's affirmative action requirements, adopted pursuant to section 4 of P.L.1979, c.303 (C.34:1B-5.4); and

     (2)   the developer pays each worker employed to perform construction work at the single family residential development project not less than the prevailing wage rate in accordance with the requirements of paragraph (6) of subsection c. of section 3 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill) for the worker's craft or trade, as determined by the Commissioner of Labor and Workforce Development pursuant to P.L.1963, c.150 (C.34:11-56.25 et seq.).

     d.    A developer may seek a revision to the development agreement if the developer cannot complete the construction on or before the date set forth in the development agreement.  A developer's ability to change the date on which the developer shall complete the construction shall be subject to the availability of tax credits in the year of the revised date of completion.

     e.  The development agreement shall include a provision allowing the authority to recapture the tax credits for any year in which the Department of Environmental Protection, the Department of Labor and Workforce Development, or the Department of the Treasury that advises the authority that the developer is not in substantial good standing with the respective department, or the developer has not entered into an agreement with the respective department that includes a practical corrective action plan for the developer.  The development agreement shall also include a provision allowing the authority to recapture the tax credits for any year in which the developer fails to confirm that each contractor or subcontractor performing work at the single family residential development project: (1) is registered as required by "The Public Works Contractor Registration Act," P.L.1999, c.238 (C.34:11-56.48 et seq.); (2) has not been debarred by the Department of Labor and Workforce Development from engaging in or bidding on Public Works Contracts in New Jersey; and (3) possesses a tax clearance certificate issued by the Division of Taxation in the Department of the Treasury.  The development agreement shall also require a developer to engage in on-site consultations with the Division of Workplace Safety and Health in the Department of Health.

     f.  Commencing with the date six months following the date the authority and a developer execute a development agreement and every six months thereafter until completion of the project, the developer shall submit an update of the status of the single family residential development project to the authority and to the agency.  Unless the authority determines that extenuating circumstances exist, the authority's approval of a tax credit shall expire if the authority, the agency, or both, do not timely receive the status update required under this section.  The authority may rescind an award of tax credits under the program if a single family residential development project fails to advance in accordance with the development agreement.

 

     5.  (New section)  a.  Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the chief executive officer of the authority, in consultation with the director of the agency, may adopt, immediately upon filing with the Office of Administrative Law, regulations that the chief executive officer and director deem necessary to implement the provisions of sections 1 through 5 of P.L.    , c.    (C.        through        ) (pending before the Legislature as this bill), which regulations shall be effective for a period not to exceed 360 days from the date of the filing.  The chief executive officer, in consultation with the director, shall thereafter amend, adopt, or readopt the regulations in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).  The rules shall require annual reporting by developers that receive tax credits pursuant to the Affordable Single Family Homes Incentive Program, in addition to the regular progress updates.  As part of the authority's review of the annual reports required from a developer, the authority shall confirm with the Department of Labor and Workforce Development, the Department of Environmental Protection, and the Department of the Treasury that the developer is in substantial good standing with the respective department, or has entered into an agreement with the respective department that includes a practical corrective action plan.

     b.  The regulations shall further require a developer to certify that any contractors or subcontractors performing work at the single family residential development project:

     (1)  are registered as required by "The Public Works Contractor Registration Act," P.L.1999, c.238 (C.34:11-56.48 et seq.);

     (2)  have not been debarred by the Department of Labor and Workforce Development from engaging in or bidding on Public Works Contracts in New Jersey; and

     (3)  possess a tax clearance certificate issued by the Division of Taxation in the Department of the Treasury. 

     c.  The rules and regulations adopted pursuant to this section shall also include a provision to require that, in any year in which the developer is not in substantial good standing with the Department of Labor and Workforce Development, the Department of Environmental Protection, or the Department of the Treasury, the developer may forfeit all tax credits awarded in that year, and to allow the authority to extend, in individual cases, the deadline for any annual reporting requirement established pursuant to this section.

 

     6.  (New section)  a.  A developer of a project consisting of 20 or more newly-constructed residential units shall be required to reserve at least 20 percent of the residential units constructed for occupancy by low or moderate income households, as those terms are defined in section 4 of P.L.1985, c.222 (C.52:27D-304), subject to affordability controls pursuant to:

     (1)  project-based federal rental assistance, authorized pursuant to section 8 of the United States Housing Act of 1937 (42 U.S.C. s.1437f), or other federal or State project-based assistance;

     (2)  the Uniform Housing Affordability Controls promulgated by the New Jersey Housing and Mortgage Finance Agency; or

     (3)  the rent and income limits established by the federal Low Income Housing Tax Credit program pursuant to section 42 of the Internal Revenue Code (26 U.S.C. s.42).

     b.  The provisions of this section shall not apply if the municipality in which the property is located has received a judgment of repose or a judgment of compliance by the court, and such a reservation is not required under the approved affordable housing plan, or the municipality has received substantive certification from the council, or the municipality has petitioned for substantive certification or a judgment of repose or a judgment of compliance within one year prior to the effective date of P.L.    , c.    (C.        ) (pending before the Legislature as this bill) and such petition has not been dismissed or otherwise determined to be invalid.

 

     7.  Section 18 of P.L.2008, c.46 (C.52:27D-329.9) is amended to read as follows:

     18.  a.  [Notwithstanding any rules of the council to the contrary, for developments consisting of newly-constructed residential units located, or to be located, within the jurisdiction of any regional planning entity required to adopt a master plan or comprehensive management plan pursuant to statutory law, including the New Jersey Meadowlands Commission pursuant to subsection (i) of section 6 of P.L.1968, c.404 (C.13:17-6), the Pinelands Commission pursuant to section 7 of the "Pinelands Protection Act," P.L.1979, c.111 (C.13:18A-8), the Fort Monmouth Economic Revitalization Planning Authority pursuant to section 5 of P.L.2006, c.16 (C.52:27I-5), or its successor, and the Highlands Water Protection and Planning Council pursuant to section 11 of P.L.2004, c.120 (C.13:20-11), but excluding joint planning boards formed pursuant to section 64 of P.L.1975, c.291 (C.40:55D-77), there shall be required to be reserved for occupancy by low or moderate income households at least 20 percent of the residential units constructed, to the extent this is economically feasible.]  (Deleted by amendment, P.L.    , c.    ) (pending before the Legislature as this bill)

     b.  (1) Subject to the provisions of subsection d. of this section, a developer of a project consisting of newly-constructed residential units being financed in whole or in part with State funds, including, but not limited to, transit villages designated by the Department of Transportation [and] , units constructed on State-owned property, and with tax credits granted pursuant to sections 3 through 5 of P.L.    , c.    (C.       through        ) (pending before the Legislature as this bill), shall be required to reserve at least 20 percent of the residential units constructed for occupancy by low or moderate income households, as those terms are defined in section 4 of P.L.1985, c.222 (C.52:27D-304), [with affordability controls as required under the rules of the council, unless] subject to affordability controls pursuant to:

     (a)  project-based federal rental assistance, authorized pursuant to section 8 of the United States Housing Act of 1937 (42 U.S.C. s.1437f), or other federal or State project-based assistance;

     (b)  the Uniform Housing Affordability Controls promulgated by the New Jersey Housing and Mortgage Finance Agency; or

     (c)  the rent and income limits established by the federal Low Income Housing Tax Credit program pursuant to section 42 of the Internal Revenue Code (26 U.S.C. s.42).

     (2)  The provisions of this section shall not apply if the municipality in which the property is located has received [substantive certification from the council and such a reservation is not required under the approved affordable housing plan, or the municipality has been given] a judgment of repose or a judgment of compliance by the court, and such a reservation is not required under the approved affordable housing plan, or the municipality has received substantive certification from the council, or the municipality has petitioned for substantive certification or a judgment of repose or a judgment of compliance within one year prior to the effective date of P.L.    , c.    (C.        ) (pending before the Legislature as this bill) and such petition has not been dismissed or otherwise determined to be invalid.

     c.  [(1)  The Legislature recognizes that regional planning entities are appropriately positioned to take a broader role in the planning and provision of affordable housing based on regional planning considerations.  In recognition of the value of sound regional planning, including the desire to foster economic growth, create a variety and choice of housing near public transportation, protect critical environmental resources, including farmland and open space preservation, and maximize the use of existing infrastructure, there is created a new program to foster regional planning entities.

     (2)   The regional planning entities identified in subsection a. of this section shall identify and coordinate regional affordable housing opportunities in cooperation with municipalities in areas with convenient access to infrastructure, employment opportunities, and public transportation.  Coordination of affordable housing opportunities may include methods to regionally provide housing in line with regional concerns, such as transit needs or opportunities, environmental concerns, or such other factors as the council may permit; provided, however, that such provision by such a regional entity may not result in more than a 50 percent change in the fair share obligation of any municipality; provided that this limitation shall not apply to affordable housing units directly attributable to development by the New Jersey Sports and Exposition Authority within the New Jersey Meadowlands District.

     (3)   In addition to the entities identified in subsection a. of this section, the Casino Reinvestment Development Authority, in conjunction with the Atlantic County Planning Board, shall identify and coordinate regional affordable housing opportunities directly attributable to Atlantic City casino development, which may be provided anywhere within Atlantic County, subject to the restrictions of paragraph (4) of this subsection.

     (4)   The coordination of affordable housing opportunities by regional entities as identified in this section shall not include activities which would provide housing units to be located in those municipalities that are eligible to receive aid under the "Special Municipal Aid Act," P.L.1987, c.75 (C.52:27D-118.24 et seq.), or are coextensive with a school district which qualified for designation as a "special needs district" pursuant to the "Quality Education Act of 1990," P.L.1990, c.52 (C.18A:7D-1 et al.), or at any time in the last 10 years have been qualified to receive assistance under P.L.1978, c.14 (C.52:27D-178 et seq.) and that fall within the jurisdiction of any of the regional entities specified in subsection a. of this section.]  (Deleted by amendment, P.L.    , c.    ) (pending before the Legislature as this bill)

     d.    Notwithstanding the provisions of subsection b. of this section, or any other law or regulation to the contrary, for purposes of mixed use projects or qualified residential projects in which a business receives a tax credit pursuant to P.L.2007, c.346 (C.34:1B-207 et seq.) or a tax credit pursuant to section 35 of P.L.2009, c.90 (C.34:1B-209.3), or both, an "eligible municipality," as defined in section 2 of P.L.2007, c.346 (C.34:1B-208), shall have the option of deciding the percentage of newly-constructed residential units within the project, up to 20 percent of the total, required to be reserved for occupancy by low or moderate income households.  For a mixed use project or a qualified residential project that has received preliminary or final site plan approval prior to the effective date of P.L.2011, c.89, the percentage shall be deemed to be the percentage, if any, of units required to be reserved for low or moderate income households in accordance with the terms and conditions of such approval.

(cf: P.L.2011, c.89, s.5)

 

     8.  Section 98 of P.L.2020, c.156 (C.34:1B-362) is amended to read as follows:

     98.  a.  The combined value of all tax credits awarded under the "Historic Property Reinvestment Act," sections 1 through 8 of P.L.2020, c.156 (C.34:1B-269 through C.34:1B-276); the "Brownfield Redevelopment Incentive Program Act," sections 9 through 19 of P.L.2020, c.156 (C.34:1B-277 through C.34:1B-287); the "New Jersey Innovation Evergreen Act," sections 20 through 34 of P.L.2020, c.156 (C.34:1B-288 through C.34:1B-302); the "Food Desert Relief Act," sections 35 through 42 of P.L.2020, c.156 (C.34:1B-303 through C.34:1B-310); the "New Jersey Community-Anchored Development Act," sections 43 through 53 of P.L.2020, c.156 (C.34:1B-311 through C.34:1B-321); the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through C.34:1B-335); the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.); [and] section 6 of P.L.2010, c.57 (C.34:1B-209.4); and the "Affordable Single Family Homes Incentive Program Act," sections 1 through 5 of P.L.    , c.    (C.        through       ) (pending before the Legislature as this bill) shall not exceed an overall cap of $11.5 billion over a seven-year period, subject to the conditions and limitations set forth in this section.  Of this $11.5 billion, $2.5 billion shall be reserved for transformative projects approved under the Aspire Program.

     b.    (1) The total value of tax credits awarded under any constituent program of the "New Jersey Economic Recovery Act of 2020," P.L.2020, c.156 (C.34:1B-269 et al.) shall be subject to the following annual limitations, except as otherwise provided in subsection c. of this section:

     (a)   for tax credits awarded under the "Historic Property Reinvestment Act," sections 1 through 8 of P.L.2020, c.156 (C.34:1B-269 through C.34:1B-276), the total value of tax credits annually awarded during each of the first six years of the seven-year period shall not exceed $50 million;

     (b)   for tax credits awarded under the "Brownfield Redevelopment Incentive Program Act," sections 9 through 19 of P.L.2020, c.156 (C.34:1B-277 through C.34:1B-287), the total value of tax credits annually awarded during each of the first six years of the seven-year period shall not exceed $50 million;

     (c)   for tax credits awarded under the "New Jersey Innovation Evergreen Act," sections 20 through 34 of P.L.2020, c.156 (C.34:1B-288 through C.34:1B-302), the total value of tax credits annually awarded during each of the first six years of the seven-year period shall not exceed $60 million and the total value of tax credits awarded over the entirety of the seven-year program shall not exceed $300,000,000;

     (d)   for tax credits awarded under the "Food Desert Relief Act," sections 35 through 42 of P.L.2020, c.156 (C.34:1B-303 through C.34:1B-310), the total value of tax credits annually awarded during each of the first six years of the seven-year period shall not exceed $40 million;

     (e)   for tax credits awarded under the "New Jersey Community-Anchored Development Act," sections 43 through 53 of P.L.2020, c.156 (C.34:1B-311 through C.34:1B-321), the total value of tax credits annually awarded during each of the first six years of the seven-year period shall not exceed $200 million, except that during each of the first six years of the seven-year period, the authority shall annually award tax credits valuing no greater than $130 million for projects located in the 13 northern counties of the State, and the authority shall annually award tax credits valuing no greater than $70 million for projects located in the eight southern counties of the State.  If during any of the first six years of the seven-year period, the authority awards tax credits in an amount less than the annual limitation for projects located in northern counties or southern counties, as applicable, the uncommitted portion of the annual limitation shall be available to be deployed by the authority in a subsequent year, provided that the uncommitted portion of tax credits shall be awarded for projects located in the applicable geographic area, except that (i) after the completion of the third year of the seven-year period, the authority may deploy 50 percent of the uncommitted portion of tax credits from any previous year without consideration to the county in which a project is located; and (ii) after the completion of the sixth year of the seven-year period, the authority may deploy all available tax credits, including the uncommitted portion of the annual limitation for any previous year, without consideration to the county in which a project is located;

     (f)   for tax credits awarded under the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through C.34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), not including tax credits awarded for transformative projects, the total value of tax credits annually awarded during each of the first six years of the seven-year period shall not exceed $1.1 billion.  If the authority awards tax credits in an amount less than the annual limitation, then the uncommitted portion of the annual limitation shall be made available for qualified offshore wind projects awarded under section 6 of P.L.2010, c.57 (C.34:1B-209.4), pursuant to subparagraph (h) of this paragraph, or New Jersey studio partners and New Jersey film-lease partners awarded under sections 1 and 2 of P.L.2018, c.56 (C.54:10A-5.39b and C.54A:4-12b), pursuant to subparagraph (i) of this paragraph.  During each of the first six years of the seven-year period, the authority shall annually award tax credits valuing no greater than $715 million for projects located in the northern counties of the State, and the authority shall annually award tax credits valuing no greater than $385 million for projects located in the southern counties of the State under the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through C.34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.).  If during any of the first six years of the seven-year period, the authority awards tax credits under the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through C.34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), in an amount less than the annual limitation for projects located in northern counties or southern counties, as applicable, the uncommitted portion of the annual limitation shall be available to be deployed by the authority in a subsequent year, provided that the uncommitted portion of tax credits shall be awarded for projects located in the applicable geographic area, except that (i) after the completion of the third year of the seven-year period, the authority may deploy 50 percent of the uncommitted portion of tax credits for any previous year without consideration to the county in which a project is located; and (ii) after the completion of the sixth year of the seven-year period, the authority may deploy all available tax credits, including the uncommitted portion of the annual limitation for any previous year, without consideration to the county in which a project is located;

     (g)   for tax credits awarded for transformative projects under the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through C.34:1B-335), the total value of tax credits awarded during the seven-year period shall not exceed $2.5 billion.  The total value of tax credits awarded for transformative projects in a given year shall not be subject to an annual limitation, except that the total value of tax credits awarded to any transformative project shall not exceed $350 million;

     (h)   from the tax credits made available, pursuant to subparagraph (f) of this paragraph, to the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through C.34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), not including tax credits awarded for transformative projects, an amount not to exceed $350,000,000 shall be made available for qualified offshore wind projects awarded a credit pursuant to section 6 of P.L.2010, c.57 (C.34:1B-209.4) during the first three years of the seven-year period; and

     (i)    beginning in fiscal year 2025, from the tax credits made available, pursuant to subparagraph (f) of this paragraph, to the "New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through C.34:1B-335), and the "Emerge Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), not including tax credits awarded for transformative projects, additional amounts shall be made available for New Jersey studio partners and New Jersey film-lease partners pursuant to sections 1 and 2 of P.L.2018, c.56 (C.54:10A-5.39b and C.54A:4-12b); and

     (j)  for tax credits awarded for projects under the "Affordable Single Family Homes Incentive Program Act," sections 1 through 5 of P.L.    , c.    (C.        through        ) (pending before the Legislature as this bill), the total value of tax credits annually awarded during each year of the seven-year period described in subsection a. of this section, following the enactment of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), shall not exceed $50 million.

     (2)   The authority may in any given year determine that it is in the State's interest to approve an amount of tax credits in excess of the annual limitations set forth in paragraph (1) of this subsection, but in no event more than $200,000,000 in excess of the annual limitation, upon a determination by the authority board that such increase is warranted based on specific criteria that may include:

     (i) the increased demand for opportunities to create or retain employment and investment in the State as indicated by the volume of project applications and the amount of tax credits being sought by those applications;

     (ii) the need to protect the State's economic position in the event of an economic downturn;

     (iii) the quality of project applications and the net economic benefit to the State and municipalities associated with those applications;

     (iv) opportunities for project applications to strengthen or protect the competitiveness of the state under the prevailing market conditions;

     (v) enhanced access to employment and investment for underserved populations in distressed municipalities and qualified incentives tracts;

     (vi) increased investment and employment in high-growth technology sectors and in projects that entail collaboration with education institutions in the State;

     (vii) increased development proximate to mass transit facilities;

     (viii) any other factor deemed relevant by the authority.

     c.     In the event that the authority in any year approves projects for tax credits in an amount less than the annual limitations set forth in paragraph (1) of subsection b. of this section, then the uncommitted portion of the annual limitation shall be available to be deployed by the authority in future years for projects under the same program; provided however, that in no event shall the aggregate amount of tax credits approved be in excess of the overall cap of $11.5 billion, and in no event shall the uncommitted portion of the annual limitation for any previous year be deployed after the conclusion of the seven-year period.

(cf: P.L.2021, c.367, s.4)

 

     9.  This act shall take effect immediately.

 

 

STATEMENT

 

     This bill concerns affordable housing requirements and incentivizes the development of single family housing with tax credits for developers.

     The bill establishes the "Affordable Single Family Homes Incentive Program" to provide tax credits, as described in the bill, for developers who seek to begin a single family residential development project.  The bill tasks the New Jersey Economic Development Authority and the New Jersey Housing and Mortgage Finance Agency with adopting regulations to effectuate the provisions of the bill.

     A single family residential development project would be eligible for a tax credit, in an amount equal to the project financing gap for the project, only if the developer demonstrates to the authority and the agency at the time of application that:

     (1)  the developer is constructing single family homes in accordance with certain affordable housing requirements;

     (2)  the developer has not commenced any construction at the site of the single family residential development project, except for preliminary assessments and investigations, prior to applying for a tax credit, but intends to begin construction and development of the site immediately upon approval of the tax credit;

     (3)  without the tax credit, the single family residential development project with affordable elements is not economically feasible;

     (4)  a project financing gap exists;

     (5)  the developer has obtained and submitted to the authority a letter evidencing support for the single family residential development project from the governing body of the municipality in which the single family residential development project is located; and

     (6)  each worker employed to perform construction at the single family residential development project will be paid not less than the prevailing wage rate for the worker's craft or trade, as determined by the Commissioner of Labor and Workforce Development pursuant to N.J.S.A.34:11-56.25 et seq. 

     The bill requires the authority to enter into a development agreement with the developer before construction begins on a single family residential development project.  A development agreement would be required to specify the amount of the tax credit to be awarded to the developer, the date on which the developer shall complete the construction, and the projected project cost.  A development agreement would also include a provision allowing the authority to recapture the tax credits in certain circumstances.  A developer would also be required to submit progress reports to the authority and to the agency every six months. 

     The bill limits the tax credits to be awarded through the "Affordable Single Family Homes Incentive Program Act" to $50 million per year for a limited period. 

     The bill also requires that developers of projects consisting of newly-constructed residential units, being financed in whole or in part with State funds, are to reserve at least 20 percent of the residential units constructed for occupancy by low or moderate income households.  The bill also requires that developers of any project consisting of 20 or more newly-constructed residential units are to reserve at least 20 percent of the residential units constructed for occupancy by low or moderate income households.  The bill provides exceptions for projects located in a municipality which has received a judgment of repose or a judgment of compliance by the court, and such a reservation is not required under the approved affordable housing plan, or the municipality had received substantive certification from the council, or the municipality has petitioned for substantive certification, or a judgment of compliance or repose, within one year prior to the effective date of the bill. 

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