A 4524

ASSEMBLY, No. 4524
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED MARCH 9, 2026
Sponsored by:
Assemblyman� CHIGOZIE U. ONYEMA
District 28 (Essex and Union)
Assemblywoman� SHAMA A. HAIDER
District 37 (Bergen)
Co-Sponsored by:
Assemblyman Kearney and Assemblywoman Brennan
SYNOPSIS
���� "Protection of Homeownership and Limiting
Institutional Investor Acquisition Act"; imposes limitations and
establishes certain incentives and disincentives concerning acquisition of
single-family residences.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act promoting family homeownership, including
through restrictions, assistance, and tax incentives and disincentives related
to single-family residences, and supplementing and amending various parts of
the statutory law.
���� Be It
Enacted by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� (New
section)� P.L.��� , c.��� (C.������� ) (pending before the Legislature as this
bill) shall be known and may be cited as the "Protection of Homeownership
and Limiting Institutional Investor Acquisition Act."
���� 2.��� (New
section)� The Legislature finds and declares that:
���� a.���� The
Great Recession of 2008-2009 and the COVID-19 pandemic contributed to
fundamental changes in the real estate market and facilitated a dramatic
transfer of wealth from low-, moderate-, and middle-income households to the
wealthy, due in substantial part to the surge of institutional investors in the
residential real estate market that purchase and convert substantial numbers of
single-family homes into rental properties;
���� b.��� Single-family
homes purchased by institutional investors may be completely taken off the
market for individual homebuyers, leading to the concentration of single-family
homes, capital, and market power in the hands of large institutional investors;
���� c.���� Institutional
investors thereby cripple the ability of individual homebuyers to compete with
and purchase single-family homes, since institutional investors have a ready
supply of capital, high liquidity, and significant bargaining power compared to
individual homebuyers;
���� d.��� Homeownership,
which commonly begins with the purchase of a small- or moderate-sized
single-family home, or starter home, is essential for building wealth and for
retirement, including through equity, tax deduction incentives, and capital
gains exclusions on sales, and therefore provides for generational wealth;
���� e.���� The
influx of institutional investors in the real estate market has contributed to
the increase in the cost of living, which has skyrocketed since 2008, making
the American dream of homeownership unattainable for many;
���� f.���� While
an October 2022 study, entitled "Buying
New Jersey: The Rise of Institutional Ownership of Residential Properties," produced by the Office of Policy and
External Affairs in the Department of Community Affairs, observed that
approximately six percent of residential properties were institutionally owned
as of 2020, institutional investors wield a tremendous amount of market power
at significantly lower market shares;
���� g.� The unique structure of
the housing market enables institutional investors, through their purchasing
behavior, to manipulate both supply and demand in the markets for single-family
home sales and single-family home rentals;
���� h.��� To account for the gross
imbalance in market power between institutional investors and individual
homebuyers in New Jersey, it is critical for legislative responses to not only
place reasonable restrictions on the ability of institutional investors to dominate
the residential real estate market, but also to increase the power of
individual homebuyers to compete with institutional investors; and
���� i.���� Therefore, it is
necessary and proper for the Legislature to place reasonable restrictions on
institutional investors related to the purchase of single-family homes; impose
tax incentives and disincentives on certain acquisitions by institutional
investors to help stabilize homeownership opportunities for New Jersey
families; provide additional down payment assistance for individual homebuyers
for the purchase of starter homes; expedite the production of single-family and
starter homes by reducing certain statutory and regulatory impediments; provide
tax incentives for the development of single-family and starter homes; and
enable individual New Jersey homebuyers to claim certain gross income tax
deductions.
���� 3.��� (New section)� As used
in sections 3 and 4 of P.L.��� , c.��� (C.������� and������� ) (pending before
the Legislature as this bill):
���� "Affordable housing"
means an inclusionary development, as defined pursuant to subsection f. of
section 4 of P.L.1985, c.222 (C.52:27D-304), and other low- and moderate-income
housing.
���� "Beneficial owner"
means, with respect to an entity, an individual who, directly or indirectly,
through any contract, arrangement, understanding, relationship, or otherwise,
exercises substantial control over the entity, or in aggregate owns or
controls, along with ownership or control by family members within the third
degree of consanguinity of the individual, through affiliated entities, or
investment vehicles, not less than 10 percent of the ownership interests of the
entity.� "Beneficial owner" shall not include:
���� (1)�� a minor;
���� (2)�� an individual acting as
a nominee, intermediary, custodian, or agent on behalf of another individual;
���� (3)�� an individual acting
solely as an employee of a corporation, limited liability company, or other
similar entity and whose control over or economic benefits from such entity is
derived solely from the employment status of the person;
���� (4)�� an individual whose only
interest in a corporation, limited liability company, or other similar entity
is through a right of inheritance; or
���� (5)�� a creditor of a
corporation, limited liability company, or other similar entity.
���� "Commissioner" means
the Commissioner of Community Affairs.
����� "Condominium"
the form of real property ownership provided for under the "Condominium
Act," P.L.1969, c.257 (C.46:8B-1 et seq.).
����� "Cooperative"
means a housing corporation or association which entitles the holder of a share
or membership interest thereof to possess and occupy for dwelling purposes a
house, apartment, or other structure owned or leased by said corporation or
association, or to lease or purchase a dwelling constructed or to be
constructed by said corporation or association.
���� "Family limited liability
company" means a limited liability company:
���� (1)�� that has no more than
five members;
���� (2)�� whose membership
satisfies the following criteria:
���� (a)�� each member is an
individual or a family trust; and
���� (b)�� each member who is an
individual is related to each of the other members who are individuals, within
and including the third degree of consanguinity or affinity; and
���� (3)�� whose revenue is paid
directly from one member to another.
���� "Family trust"
means:
���� (1)�� a trust in which a
majority of the beneficiaries are individuals who are related to each other
within and including the third degree of consanguinity or affinity; and where
each beneficiary is an individual or an organization described pursuant to
section 170(c)(2) of the Internal Revenue Code (26 U.S.C. s.170(c)(2));
���� (2)�� a charitable remainder
annuity trust or a charitable remainder unitrust, as those terms are defined
pursuant to section 664 of the Internal Revenue Code (26 U.S.C. s.664); or
���� (3)�� a charitable lead trust.
���� "Institutional
investor":
���� (1)�� means a person or entity
that pools capital to purchase securities, real property, and other investment
assets or originates loans, including institutional investors in the form of:
���� (a)�� a partnership,
corporation, limited liability company, or trust;
���� (b)�� an affiliate,
subsidiary, or holding company of a partnership, corporation, limited liability
company, or trust;
���� (c)�� a beneficial owner of a
partnership, corporation, limited liability company, or trust; or
���� (d)�� a beneficial owner of an
affiliate, subsidiary, or holding company of a partnership, corporation,
limited liability company, or trust; and
���� (2)�� shall not mean:
���� (a)�� a nonprofit corporation
organized for the exclusive purpose of acquiring a single-family home that is,
or is to be, used for the development and provision of affordable housing;
���� (b)�� a family trust; or
���� (c)�� a family limited
liability company.
"Low-income housing"
means the same as the term is defined pursuant to subsection c. of section 4 of
P.L.1985, c.222 (C.52:27D-304).
���� "Minor" means a
person under the age of 18 years.
���� "Moderate-income
housing" means the same as the term is defined pursuant to subsection d.
of section 4 of P.L.1985, c.222 (C.52:27D-304).
���� "On the market and
available for purchase" means the status of real property, on which real
property there is constructed or is to be constructed, a single-family home:
���� (1)�� which real property is
listed by a real estate agent or other similar real estate professional, or the
seller of the real property, on a multiple listing service, or other similar
database, for which, if the seller has chosen to use a real estate agent or
other similar real estate professional, the seller has signed a contract with
the real estate agent or other similar real estate professional for the real
estate agent or other similar real estate professional to advertise the real
property to potential buyers; and
���� (2)�� for which the seller is
accepting bids or offers for the purchase of the real property, and which
listing is easily accessible by the public and active, active with contract,
pending, contingent, or back on the market.
���� "Real estate agent"
means a real estate broker, broker salesperson, sales person, or real estate
salesperson licensed with a referral company� pursuant to R.S.45:15-1 et seq.
���� "Single-family home"
means a residential property and any ownership interest of a residential
property, consisting of one to four dwelling units.� A "single-family
home" shall include a townhome, townhouse, condominium
unit, or cooperative unit.
���� "Small institutional
investor" means an institutional investor that, in the aggregate through
any combination of the institutional investor�s partnerships, corporations,
limited liability companies, beneficial owners, or trusts; or affiliates, subsidiaries,
or holding companies of a partnership, corporation, limited liability company,
beneficial owner, or trust, owns 20 or fewer single-family homes.
���� "Townhome" or
"townhouse" means a single-family dwelling unit, constructed in a
group of three or more attached units in which each unit extends from
foundation to the roof and has a yard or public way on not less than two sides.
���� 4.��� (New section)� a.� An
institutional investor shall not contact the owner of a single-family home, or
the agent of that owner, with respect to that single-family home, during the
first 45 days that the single-family home is on the market and available for
purchase.� An institutional investor shall not place a bid on or purchase,
directly or indirectly, or through any combination of the institutional
investor�s constituent persons or entities, a single-family home in this State
during the first 45 days that the single-family home is on the market and
available for purchase.� An institutional investor shall not lease a
single-family home acquired or purchased by the institutional investor for a
period of five years following the date of acquisition or purchase.
���� b.��� An institutional
investor that purchases, owns, or acquires a single-family home prior to the
first day that a single-family home is on the market and available for
purchase, or after the first 45 days that a single-family home is on the market
and available for purchase shall be subject to the provisions of section 6 of
P.L.    , c.    (C.        ) (pending
before the Legislature as this bill).
���� c.���� Except as provided in
subsection d. of this section, the provisions of sections 1 through 4 of
P.L.��� , c.��� (C.����� through���� ) (pending before the Legislature as this
bill) shall not apply to:
���� (1)�� a tax exempt nonprofit
organization that is described in section 501(c) of the Internal Revenue Code
(26 U.S.C. s.501(c)) and exempt from federal taxation pursuant to section
501(a) of the Internal Revenue Code (26 U.S.C. s.501(a)), which purchased a single-family
home or homes for the exclusive purpose of providing, and which serve to
provide, affordable housing in this State;
���� (2)�� a small institutional
investor;
���� (3)�� a financial institution,
including a credit union, or an institutional investor, as a direct result of
any foreclosure, or a secured transaction pursuant to the "Uniform
Commercial Code - Secured Transactions," N.J.S.12A:9-101 et seq.;
���� (4)�� an institutional
investor, which, as a condemnor, as the term is defined pursuant to subsection
(b) of section 2 of P.L.1971, c.361 (C.20:3-2), places a bid on, acquires, or
purchases a single-family home pursuant to the "Eminent Domain Act of
1971," P.L.1971, c.361 (C.20:3-1 et seq.);
���� (5)�� a governmental
authority; or
���� (6)�� such other institutional
investors that the commissioner, in consultation with the Director of the
Division of Consumer Affairs in the Department of Law and Public Safety,
determines to be necessary to effectuate the provisions of sections 1 through 4
of P.L.��� , c.��� (C.������� through������� ) (pending before the Legislature
as this bill), in the public interest, and necessary to preserve the quantity
of single-family homes in this State.� An institutional investor, subject to an
exemption pursuant to this paragraph, shall provide additional information that
the commissioner determines to be necessary for the institutional investor to
qualify for an exemption pursuant to this paragraph and that effectuates the
purposes of sections 1 through 4 of P.L.��� , c.�� (C.�� through������ )
(pending before the Legislature as this bill).
���� d.��� Notwithstanding the
provisions of subsection c. of this section to the contrary, an institutional
investor shall submit to the commissioner, on a form established by the
Department of Community Affairs, in consultation with the Division of Consumer
Affairs in the Department of Law and Public Safety, and published by the
Department of Community Affairs on the department�s Internet website, for every
taxable year by April 15 annually, and within 60 days of the effective date of
sections 1 through 6 of P.L.    , c.    (C.        through        )
(pending before the Legislature as this bill) if April 15 is not less than 90
days subsequent to the effective date of sections 1 through 6 of P.L.��� ,
c.��� (C.������� through������� ) (pending before the Legislature as this
bill), a report containing the information required pursuant to this
subsection, and such other information as required by the rules and regulations
promulgated by the commissioner pursuant to subsection g. of this section,
which information shall include but not be limited to, the number of
single-family homes that, in the aggregate or through any combination of the
institutional investor�s constituent persons or entities, the institutional
investor bid on or purchased within the previous taxable year.
���� e.���� A person or entity,
including a small institutional investor, in the county or vicinage in which
the single-family home is located, may file a complaint in the Superior Court
of New Jersey, Law Division, against an institutional investor that violates subsection
a. of this section.� If the court finds the institutional investor violated
subsection a. of this section, the institutional investor shall alienate the
single-family home within six months of the court�s determination, and any
profit received shall be payable to the Attorney General.� In addition, an
amount equal to the profit received shall also be paid to, and proportionately
divided amongst, any person or entity, including a small institutional
investor, adversely and directly affected by a violation, which shall be
construed liberally, who files a complaint in the Superior Court of New Jersey,
Law Division in the county or vicinage in which the single-family home is
located within 24 months of the date that the violation occurred.
���� f.���� (1)� It shall be an
unlawful practice, pursuant to and in violation of the New Jersey consumer
fraud act, P.L.1960, c.39 (C.56:8-1 et seq.), for an institutional investor to
place a bid on or purchase a single-family home in violation of subsection a.
of this section.
���� (2)�� An institutional
investor that violates subsection a. of this section shall be liable to a civil
penalty per violation as provided for in this paragraph, plus fees and
expenses, as follows:
���� (a)�� An institutional
investor that violates subsection a. of this section shall be liable to a civil
penalty of $20,000, or $60,000 if the court finds the institutional investor
willfully violated this section, which shall be collected in a civil action by
a summary proceeding pursuant to the "Penalty Enforcement Law of
1999," P.L.1999, c.274 (C.2A:58-10 et seq.).� The Superior Court, Law
Division in the county or vicinage in which the single-family home is located
shall have jurisdiction over the proceedings.� Process shall be in the nature
of a summons or a warrant, and shall issue upon the complaint of the Attorney
General.
���� (b)�� Notwithstanding a
penalty collected pursuant to subparagraph (a) of this paragraph, an
institutional investor that violates subsection a. of this section shall be
subject to a complaint at the discretion of any person or entity, including a
small institutional investor, directly and adversely affected by a violation,
which shall be construed liberally, if the directly and adversely affected
person or entity files a complaint with the Superior Court of New Jersey, Law
Division in the county or vicinage in which the single-family home is located
within 24 months of the date that the violation occurred.� The complainant
shall be permitted to recover: a civil penalty of $20,000, or $60,000 if the
court finds the institutional investor willfully violated this section, which
shall be proportionately divided amongst any person or entity, including a
small institutional investor, directly and adversely affected by a violation;
reasonable attorney�s fees; court costs; expenses for expert witnesses; and
other related fees and expenses incurred in proving a violation of subsection
a. of this section.
���� g.��� Notwithstanding the
provisions of subsections e. and f. of this section, a court that receives a
complaint against an institutional investor for violation of this section shall
send administrative notice of the pending action to the institutional investor,
which shall have 60 days from the receipt of the notice to cure the alleged
violation.� If the institutional investor fails to cure, or take substantial
steps to cure, the alleged violation within the 60-day time period, the
penalties in subsections e. and f. of this section shall apply.
���� h.��� The Commissioner of
Community Affairs shall, in consultation with the Director of the Division of
Consumer Affairs in the Department of Law and Public Safety and the Director of
the Division of Taxation in the Department of the Treasury, and in accordance
with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1
et seq.), adopt rules and regulations to implement the provisions of sections 1
through 4 of P.L.��� , c.��� (C.������� through������� ) (pending before the
Legislature as this bill).� The rules and regulations adopted pursuant to this
subsection shall additionally specify the ownership and control structures that
shall identify an individual as a beneficial owner, which shall include any
individual who is an ultimate beneficial owner and any individual who in
aggregate, along with ownership or control by family members within the third
degree of consanguinity of the individual, or through affiliated entities or
investment vehicles, owns or controls not less than 10 percent of the ownership
interests of the entity.
���� i.���� Nothing in this section
shall be construed to mean that a private cause of action shall have primacy
over public administrative action.
���� j.���� A real estate agent
shall not be liable for information that is required to be disclosed by a
seller or buyer pursuant to this section and was not provided to the real
estate agent.
���� k.��� This section shall
expire on the first day of the sixth year following the date of enactment.�
Within six months of the date of expiration, the Commissioner of Community
Affairs, in collaboration with any public institution of high education as
determined by the commissioner, shall publish a report on its Internet website
assessing the affects the provisions of this section on the housing market in
this State, including, but not limited to, single-family home prices,
inventory, rental outcomes, rehabilitation activity, tax revenue use pursuant
to section 6 of
P.L.     ,c.    (C.       ),
and details concerning the evaluation metrics and methodology used in
generating the report.
���� 5.��� (New section)� As used
in sections 5 and 6 of
P.L.    , c.    (C.        and        ) (pending
before the Legislature as this bill):
���� "Affordable housing"
means an inclusionary development, as defined pursuant to subsection f. of
section 4 of P.L.1985, c.222 (C.52:27D-304), and other low- and moderate-income
housing.
���� "Agency" means the
New Jersey Housing and Mortgage Finance Agency.
���� "Beneficial owner"
means, with respect to an entity, an individual who, directly or indirectly,
through any contract, arrangement, understanding, relationship, or otherwise,
exercises substantial control over the entity, or in aggregate owns or
controls, along with ownership or control by family members within the third
degree of consanguinity of the individual, through affiliated entities, or
investment vehicles, not less than 10 percent of the ownership interests of the
entity.� "Beneficial owner" shall not include:
���� (1)�� a minor;
���� (2)�� an individual acting as
a nominee, intermediary, custodian, or agent on behalf of another individual;
���� (3)�� an individual acting
solely as an employee of a corporation, limited liability company, or other
similar entity and whose control over or economic benefits from such entity is
derived solely from the employment status of the person;
���� (4)�� an individual whose only
interest in a corporation, limited liability company, or other similar entity
is through a right of inheritance; or
���� (5)�� a creditor of a
corporation, limited liability company, or other similar entity.
���� "Consumer Price
Index" means the Consumer Price Index for All Urban Consumers, as reported
by the United States Department of Labor, shown as an average index for the New
York-Northern New Jersey-Long Island region and the Philadelphia-Wilmington-Trenton
region combined.
���� "Director" means the
Director of the Division of Taxation in the Department of the Treasury.
���� "Family limited liability
company" means a limited liability company:
���� (1)�� that has no more than
five members;
���� (2)�� whose membership
satisfies the following criteria:
���� (a)�� each member is an
individual or a family trust; and
���� (b)�� each member who is an
individual is related to each of the other members who are individuals, within
and including the third degree of consanguinity or affinity; and
���� (3)�� whose revenue is paid
directly from one member to another.
���� "Family trust"
means:
���� (1)�� a trust in which a
majority of the beneficiaries are individuals who are related to each other
within and including the third degree of consanguinity or affinity; and where
each beneficiary is an individual or an organization described pursuant to
section 170(c)(2) of the Internal Revenue Code (26 U.S.C. s.170(c)(2));
���� (2)�� a charitable remainder
annuity trust or a charitable remainder unitrust, as those terms are defined
pursuant to section 664 of the Internal Revenue Code (26 U.S.C. s.664); or
���� (3)�� a charitable lead trust.
���� "Institutional
investor":
���� (1)�� means a person or entity
that pools capital to purchase securities, real property, and other investment
assets or originates loans, including institutional investors in the form of:
���� (a)�� a partnership,
corporation, limited liability company, or trust;
���� (b)�� an affiliate,
subsidiary, or holding company of a partnership, corporation, limited liability
company, or trust;
���� (c)�� a beneficial owner of a
partnership, corporation, limited liability company, or trust; or
���� (d)�� a beneficial owner of an
affiliate, subsidiary, or holding company of a partnership, corporation,
limited liability company, or trust; and
���� (2)�� shall not mean:
���� (a)�� a nonprofit corporation
organized for the exclusive purpose of acquiring a single-family home that is,
or is to be, used for the development and provision of affordable housing;
���� (b)�� a family trust; or
���� (c)�� a family limited
liability company.
���� "Low-income housing"
means the same as the term is defined pursuant to subsection c. of section 4 of
P.L.1985, c.222 (C.52:27D-304).
���� "Minor" means a
person under the age of 18 years.
���� "Moderate-income
housing" means the same as the term is defined pursuant to subsection d.
of section 4 of P.L.1985, c.222 (C.52:27D-304).
���� "Single-family home"
means a residential property and any ownership interest of a residential
property, consisting of one to four dwelling units.� A "single-family
home" shall include a townhome or townhouse.
���� "Small institutional
investor" means an institutional investor that, in the aggregate through
any combination of the institutional investor�s partnerships, corporations,
limited liability companies, beneficial owners, or trusts; or affiliates, subsidiaries,
or holding companies of a partnership, corporation, limited liability company,
beneficial owner, or trust, owns 20 or fewer single-family homes.
���� "Townhome" or
"townhouse" means a single-family dwelling unit, constructed in a
group of three or more attached units in which each unit extends from
foundation to the roof and has a yard or public way on not less than two sides.
���� 6.��� (New section) a. �On or
after the effective date of sections 1 through 6 of P.L.�� �, c.�� �(C.������� through�������
) (pending before the Legislature as this bill), there shall be imposed an
annual State tax on an institutional investor that purchases, owns, or acquires
a single-family home in an amount equal to the sum of:
���� (1)�� $2,000 per unit per year
on the first 25 single-family homes owned by the institutional investor as of
the last day of the tax year;
���� (2)�� $10,000 per unit per
year on the next 26 through 250 single-family homes owned by the institutional
investor as of the last day of the tax year; and
���� (3)�� $25,000 per unit per
year on each single-family home numbering at least 251 and above owned by the
institutional investor as of the last day of the tax year.
���� b.��� The tax year liability
for the tax imposed pursuant to this section shall be reported and paid by an
institutional investor on or before the first day of the first calendar quarter
after the end of a tax year in a manner prescribed by the Director of the
Division of Taxation in the Department of the Treasury. �The director shall
collect and administer the tax imposed pursuant to this section, which shall be
governed by the provisions of the State Uniform Tax Procedure Law, R.S.54:48-1
et seq.
���� c.���� (1)� Notwithstanding
the provisions of subsection e. of this section to the contrary, the director
shall require an institutional investor to report information that the director
deems necessary and appropriate to carry out the purposes of this section,
which shall include the names and addresses of each beneficial owner, including
the ultimate beneficial owner, and each parent entity of the institutional
investor.� The director may use county deed records, business registration
information filed with the Division of Revenue in the Department of the
Treasury, and any other information available to confirm the veracity of the
report required pursuant to this subsection.
���� (2)�� A person who fails to
timely report information that the director requires pursuant to this
subsection or who fails to include complete and accurate information shall be
subject to interest and penalties that are provided for under the provisions of
the State Uniform Tax Procedure Law, R.S.54:48-1 et seq., and an additional
penalty of $20,000 per report. �The director may waive penalties and interest
if the person demonstrates to the director by clear and convincing evidence
that the failure is not due to willful neglect.
���� (3)�� Every contract of sale
of real property from an institutional investor shall include a certification
by the purchaser or transferee that states:
���� (a)�� The name and address of
the purchaser or transferee; and
���� (b)�� That the purchaser or
transferee shall be subject to the penalties imposed under paragraph (2) of
this subsection for any false certification.
���� d.��� The State tax revenue
collected pursuant to this section, and any penalties and interest collected
thereon, shall be annually credited by the State Treasurer to the New Jersey
Housing and Mortgage Finance Agency to establish new programs or supplement existing
programs that award grants to provide down payment assistance to families
purchasing single-family homes within the State. �Grants awarded pursuant to
this subsection by the agency shall give priority to households seeking
assistance to purchase any single-family home that is sold or transferred by an
institutional investor.� The agency shall annually publish on its Internet
website the amount of State tax revenue collected pursuant to this section,
adjusted for the annual percentage change in the Consumer Price Index,
contributed to any down payment assistance program administered by the State.
���� e.���� Except as provided in
subsection c. of this section, the provisions of sections 5 and 6 of P.L.�� �,
c.�� �(C.������� and������� ) (pending before the Legislature as this bill)
shall not apply to:
���� (1)�� a tax exempt nonprofit
organization that is described in section 501(c) of the Internal Revenue Code
(26 U.S.C. s.501(c)) and exempt from federal taxation pursuant to section
501(a) of the Internal Revenue Code (26 U.S.C. s.501(a)), which purchased a single-family
home or homes for the exclusive purpose of providing, and which serve to
provide, affordable housing in this State;
���� (2)�� a small institutional
investor;
���� (3)�� a financial institution,
including a credit union, or an institutional investor, as a direct result of
any foreclosure, or a secured transaction pursuant to the "Uniform
Commercial Code - Secured Transactions," N.J.S.12A:9-101 et seq.;
���� (4)�� an institutional
investor, which, as a condemnor, as the term is defined pursuant to subsection
(b) of section 2 of P.L.1971, c.361 (C.20:3-2), places a bid on, acquires, or
purchases a single-family home pursuant to the "Eminent Domain Act of
1971," P.L.1971, c.361 (C.20:3-1 et seq.);
���� (5)�� a governmental
authority;
���� (6)�� an institutional
investor that uses capital to rehabilitate and stabilize vacant and distressed
single-family homes, as determined by the commissioner, and files a binding
rehabilitation plan, through escrowed funds or a performance bond, with the
director that the rehabilitation shall be completed within 12 months from the
date of purchase and shall meet standards of habitability determined by the
commissioner, which shall include, but not be limited to, compliance with the
"State Uniform Construction Code Act,"� P.L.1975,� c. 217 (C.
52:27D-119 et seq.).� Upon completion, the commissioner shall inspect the
project and issue a certificate of completion if the project meets the
requirements of this paragraph; however, if the commissioner determines the
project is not in compliance, the director shall issue a monetary penalty
against the institutional investor in an amount determined by the director; or
���� (7)�� such other institutional
investors that the director, in consultation with the Director of the Division
of Consumer Affairs in the Department of Law and Public Safety, determines to
be: necessary to effectuate the provisions of sections 5 and 6 of P.L.��� , c.���
(C.������� and������� ) (pending before the Legislature as this bill), in the
public interest, and necessary to preserve the quantity of single-family homes
in this State. �An institutional investor, subject to an exemption pursuant to
this paragraph, shall provide additional information that the director
determines to be necessary for the institutional investor to qualify for an
exemption pursuant to this paragraph and that effectuates the purposes of
sections 5 and 6 of P.L.��� , c.��� (C.������� and������� ) (pending before the
Legislature as this bill).
���� f.���� The Director of the
Division of Taxation in the Department of the Treasury shall, in
consultation with the Director of the Division of Consumer Affairs in the
Department of Law and Public Safety and the Commissioner of Community Affairs,
and in accordance with the "Administrative Procedure Act," P.L.1968,
c.410 (C.52:14B-1 et seq.), adopt rules and regulations to implement the
provisions of sections 5 and 6 of P.L.�� �, c.�� �(C.������� and������ )
(pending before the Legislature as this bill).
���� g.��� This section shall
expire on the first day of the sixth year following the date of enactment.�
Within six months of the date of expiration, the Director of the Division of
Taxation in the Department of the Treasury, in collaboration with the
Commissioner of Community Affairs, shall publish a report on its Internet
website assessing the affects the provisions of this section on the housing
market in this State, including, but not limited to, single-family home prices,
inventory, rental outcomes, rehabilitation activity, tax revenue use pursuant
to this section, and details concerning the evaluation metrics and methodology
used in generating the report.
���� 7.��� Section
3 of P.L.2023, c.78 (C.52:27D-161.1) is amended to read as follows:
���� 3.� a.� There is established
in the Department of Community Affairs a Resilient Home Construction [Pilot] Program for
the purpose of providing funding for developers to rehabilitate existing homes
and construct new affordable homes for sale.
���� b.� As part of the [pilot program] Resilient
Home Construction Program, the department shall develop an application
process and promulgate criteria that enables a developer to qualify for funding
for the rehabilitation or construction of homes for sale.� Among such other
criteria as the department deems necessary, the department shall require that:
���� (1)� the homes rehabilitated
or constructed for sale are not located in the 500-year floodplain or the
inland or coastal climate adjusted floodplain, as defined by Department of
Environmental Protection;
���� (2)� the homes rehabilitated
or constructed are to be sold to households with a gross household income not
to exceed 120 percent of the median gross household income for households of
the same size within the housing region in which the housing is located;
���� (3)� the prospective homebuyer
is a renter that has been impacted by a storm or natural disaster that has
prompted the governor to declare a state of emergency; or a first-time
homebuyer, including a first-time homebuyer receiving financial assistance from
the agency;
���� (4)� the developer include a
purchase discount on the home sale price, as established in accordance with
criteria developed by the department; [and]
���� (5)� the homes for sale
contain a minimum period of affordability as determined by the department ;
and
���� (6)�� a portion of the
funding shall be allocated toward the production of starter homes and
affordable starter homes, as defined pursuant to section 1 of P.L.2023, c.78
(C.55:14K-104), with the assistance of specialized nonprofit organizations.
���� c.���� Funding to successful [pilot program] Resilient
Home Construction Program applicants shall be provided in a manner
determined by the department and pursuant to an agreement between the
department and a successful [pilot] program
applicant, and shall be conditioned upon compliance with the provisions of such
an agreement as determined by the department.
���� d.��� As part of the [pilot program] Resilient
Home Construction Program, the department shall permit local government
entities to apply for funding to provide to developers to rehabilitate existing
homes and construct new, affordable homes for sale, so long as: (1) the
application process and criteria imposed by the local government entity on
developers is the same as the criteria developed pursuant to subsection b. of
this section; (2) the local government entity and the developer enter into an
agreement subject to the same requirements as an agreement pursuant to
subsection c. of this section; and that funding to the local government entity
is conditioned upon compliance with the provisions of an agreement as
determined by the department.
���� e.���� In addition to the
funding provided to developers pursuant to the [pilot program] Resilient
Home Construction Program, the department may establish incentives to
encourage homebuyers to remain in the homes developed pursuant to [this pilot] the
program, including through the provision of down payment assistance as a
zero-interest forgivable loan for homebuyers who are not eligible or do not
qualify for down payment assistance through other State programs including the
program established pursuant to section 2 of P.L.2023, c.78 (C.55:14K-105).
���� f.���� For the purpose of
determining the amount of purchase discount, provided pursuant to paragraph (4)
of subsection b. of this section, the department shall establish a sale price,
pursuant to an appraisal conducted by a professional appraiser hired by the department.
(cf: P.L.2023, c.78, s.3)
���� 8.��� Section 4 of P.L.2023,
c.78 (C.52:27D-161.2) is amended to read as follows:
���� 4.� Notwithstanding the
limitations established in section 1 of P.L.2011, c.215 (C.52:14B-3a) on the
use of regulatory guidance documents, the commissioner may promulgate
application and eligibility criteria and guidelines regarding the [pilot program] Resilient
Home Construction Program through regulatory guidance documents as defined
in subsection d. of section 1 of P.L.2011, c.215 (C.52:14B-3a).
(cf: P.L.2023, c.78, s.4)
���� 9.��� Section 1 of P.L.2023,
c.78 (C.55:14K-104) is amended to read as follows:
���� 1.� As used in P.L.2023, c.78
(C.55:14K-104 et al.):
���� "Affordable starter
home" means a starter home that is 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).
���� "Agency" means the
New Jersey Housing and Mortgage Finance Agency established pursuant to section
4 of P.L.1983, c.530 (C.55:14K-4).
���� "Commissioner" means
the Commissioner of Community Affairs.
���� "Department" means
the Department of Community Affairs.
���� "Down payment
assistance" or "assistance" means financial assistance for
first-time homebuyers to acquire single-family housing for principal residence
through the loan program.
���� "Executive director"
means the Executive Director of the New Jersey Housing and Mortgage Finance
Agency.
���� "First-generation
homebuyer" means a first-time homebuyer, who is:
���� a.� an individual:
���� (1)� whose parents or legal
guardians do not have any present ownership interest in any residential real
property in any state or territory of the United States, or outside of the
United States; and
���� (2)� whose spouse or domestic
partner has not, during the three-year period ending upon acquisition of the
eligible home to be acquired using such assistance, had any present ownership
interest in any residential real property used as their principal residence in
any state or territory of the United States, or outside of the United States;
or
���� b.� an individual who has at
any time been placed in foster care in the State, was an emancipated youth, or
was designated as a homeless, unaccompanied youth pursuant to the
"McKinney-Vento Homeless Assistance Act," as described in 42 U.S.C.
s.11434a.
���� "First-time
homebuyer" means a homebuyer who, in accordance with guidelines adopted by
the agency, is utilizing a mortgage product offered by the agency through an
agency homebuyer program to purchase single-family housing, and has a gross
household income that does not exceed a limitation determined by the agency.
���� "Loan program" means
the zero-interest, forgivable loan program established pursuant to section 2 of
P.L.2023, c.78 (C.55:14K-105).
���� "Principal
residence" means a homestead that is actually and continually occupied as
the permanent residence of a household, as distinguished from a vacation home,
real property owned and rented or offered for rent by the household, or other
secondary real property holdings.
���� "Single-family
housing" means a one- to four-family residence, a condominium unit, a
cooperative unit, a combination of a manufactured housing and lot, or a
manufactured housing lot.
���� "Starter home"
means a unit of single-family housing that consists of not more than 1,800
square feet of floor area.
(cf: P.L.2024, c.23, s.1)
���� 10.� Section 2 of P.L.2023,
c.78 (C.55:14K-105) is amended to read as follows:
���� 2.� a.� (1)� There is
established in the agency a zero-interest, forgivable loan program to provide
down payment assistance for first-time homebuyers to achieve homeownership.�
The loan program shall provide down payment assistance to defray the costs
associated with acquiring single-family housing for principal residence, as
provided for in subsection b. of this section.� A first-time homebuyer shall
commit to use the home as their principal residence for five years following
the purchase of the home, and for these five years retain the first mortgage
product offered by the agency through an agency homebuyer program.� The agency
shall forgive the down payment assistance loan, provided that the five-year
commitment is satisfied and the first-time homebuyer meets the other
requirements established pursuant to subsection c. of this section.
���� (2)�� A portion of the
funding for the loan program shall be allocated to provide down payment
assistance for first-time homebuyers to purchase starter homes and affordable
starter homes.�
���� b.��� (1)� The down payment
assistance provided pursuant to this section shall be in the form of a
zero-interest, forgivable loan award.� The loan award shall be in an amount not
to exceed $20,000.� The agency shall be authorized to provide an additional
zero-interest, forgivable loan award of up to $5,000 if the first-time
homebuyer provides matching down payment funds in an amount to be determined by
the executive director.�
���� (2)� In addition to a loan
award that may be provided pursuant to paragraph (1) of this subsection, a
first-generation homebuyer shall be eligible for a zero-interest, forgivable
loan award of an additional award amount of not less than $7,000 and not more
than $10,000 to be used for down payment assistance.
���� (3)�� Each first-time
homebuyer who receives down payment assistance through the loan program shall,
prior to the award of down payment assistance, complete a homebuyer counseling
course, as directed by the agency pursuant to subsection c. of this section.�
The homebuyer counseling course may include, but not be limited to, coursework
concerning:
���� (a)� the maintenance of
housing costs, including methods for budgeting mortgage payments, utility
charges, property taxes, and any other applicable housing cost;
���� (b)� the basics of home
finance, property taxes, home warranties, and home inspection;
���� (c)� the legal components of
finalizing a home purchase; and
���� (d)� the process of finding an
appropriate house, including how to search real estate listings through a real
estate agent or other sources.
���� c.� The executive director
shall develop program guidelines to effectuate, administer, and accomplish the
purposes of the loan program.� The guidelines shall, at a minimum, set forth
the requirements for application submissions, the criteria for application
selections, the eligible uses of down payment assistance, eligibility as a
first-time or first-generation homebuyer, and the curriculum and provision of
the homebuyer counseling course.
���� d.� The agency shall permit an
individual to establish eligibility for the loan program as a first-generation
homebuyer via self-attestation, under penalty of perjury.� However, nothing in
this subsection shall preclude the agency from establishing measures to
identify and deter fraudulent attestations.� If it is established that an
individual has received assistance as a result of a fraudulent attestation, the
individual shall reimburse the agency for the assistance.
���� e.� A down payment assistance
loan shall be recoverable as a lien on the real property that the loan is used
to purchase, and shall have the priority of a mortgage lien.
���� f.� The annual appropriations
act for State fiscal year 2027 shall include an appropriation from the General
Fund to the loan program, and the annual appropriations acts following State
fiscal year 2027 shall appropriate not less than $25 million from the General
Fund to the Community Investment Fund in the agency, established
pursuant to section 11 of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill), [during] each State
fiscal year [in
which the loan program remains in operation,]
to effectuate the purposes of the loan program, and defray the costs associated
with administering the loan program, except that the agency shall retain not
more than five percent of the annual appropriation for administrative costs.�
Of the total amount of down payment assistance funding awarded each State fiscal
year through the loan program, no less than 50 percent shall be awarded to
first-generation homebuyers, unless the agency determines that 50 percent of
the down payment assistance funding cannot be awarded to first-generation
homebuyers, because too few first-generation homebuyers have applied for the
loan program, in which case, more than 50 percent of the funding shall be
awarded to first-time homebuyers who are not first-generation homebuyers.
���� g.� No later than the 730th
day next following the effective date of P.L.2023, c.78 (C.55:14K-104 et al.),
the agency shall prepare and submit a report to the Governor and, pursuant to
section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature.� The report
shall analyze the efficacy of the loan program.� The report shall provide an
overview of the total amount of down payment assistance provided by the agency,
with information by census tract on the race and ethnicity of the recipients of
assistance. �The report also shall analyze:
���� (1)� the impact of the down
payment assistance on the total housing costs of the recipients of such
assistance;
���� (2)� the impact of the
additional loan award for first-generation homebuyers provided pursuant to
paragraph (2) of subsection b. of this section, and the other components of the
loan program, on first-generation homeownership; and
���� (3)� any other information
determined by the agency to be relevant to the costs and benefits of the loan
program.
(cf: P.L.2024, c.23, s.2)
���� 11.� (New section)� a.� There
is created a special fund in the New Jersey Housing and Mortgage Finance
Agency, which shall be known as the "Community Investment Fund," and
shall be administered by the agency as a revolving fund for carrying out the purposes
of the loan program established pursuant to section 2 of P.L.2023, c.78
(C.55:14K-105).�
���� b.��� Moneys to be deposited
into the Community Investment Fund shall include, but shall not be limited to:
���� (1)� all moneys appropriated
and made available pursuant to subsection f of section 2 of P.L.2023, c.78
(C.55:14K-105), and otherwise made available by the Legislature for inclusion
therein;
���� (2)� any other moneys made
available to the agency from any source or sources, which the executive
director shall determine to use for the purposes authorized by the loan
program; and
���� (3)� moneys earned through
investment pursuant to subsection c. of this section.
���� c.���� Any moneys held in the
Community Investment Fund that are not able to be disbursed immediately may be
invested and reinvested.
���� d.��� A portion of the funds
expended from the Community Investment Fund for the purposes of the loan
program shall be used for the purpose of providing down payment assistance for
first-time homebuyers to purchase starter homes and affordable starter homes under
P.L.2023, c.78 (C.55:14K-104 et al.).
���� 12.� Section
6 of P.L.1975, c.291 (C.40:55D-10) is amended to read as follows:
���� 6.�
Hearings.� a.� The municipal agency shall hold a hearing on each application
for development, adoption, revision or amendment of the master plan, each
application for approval of an outdoor advertising sign submitted to the
municipal agency as required pursuant to an ordinance adopted under subsection
g. of section 29.1 of P.L.1975, c.291 (C.40:55D-39) or any review undertaken by
a planning board pursuant to section 22 of P.L.1975, c.291 (C.40:55D-31).
���� b.��� The
municipal agency shall make the rules governing such hearings.� Any maps and
documents for which approval is sought at a hearing shall be on file and
available for public inspection at least 10 days before the date of the
hearing, during normal business hours in the office of the administrative
officer.� The applicant may produce other documents, records, or testimony at
the hearing to substantiate or clarify or supplement the previously filed maps
and documents.
���� c.���� The
officer presiding at the hearing or such person as he may designate shall have
power to administer oaths and issue subpoenas to compel the attendance of
witnesses and the production of relevant evidence, including witnesses and
documents presented by the parties, and the provisions of the "County and
Municipal Investigations Law," P.L.1953, c.38 (C.2A:67A-1 et seq.) shall
apply.
���� d.��� The
testimony of all witnesses relating to an application for development shall be
taken under oath or affirmation by the presiding officer, and the right of
cross-examination shall be permitted to all interested parties through their
attorneys, if represented, or directly, if not represented, subject to the
discretion of the presiding officer and to reasonable limitations as to time
and number of witnesses.
���� e.���� Technical
rules of evidence shall not be applicable to the hearing, but the agency may
exclude irrelevant, immaterial or unduly repetitious evidence.
���� f.���� The
municipal agency shall provide for the verbatim recording of the proceedings by
either stenographer, mechanical or electronic means.� The municipal agency
shall furnish a transcript, or duplicate recording in lieu thereof, on request
to any interested party at his expense; provided that the governing body may
provide by ordinance for the municipality to assume the expense of any
transcripts necessary for appeal to the governing body, pursuant to section 8
of [this act] P.L.1975, c.291 (C.40:55D-17), of decisions
by the zoning board of adjustment pursuant to subsection [57d. of this act]
d. of section 57 of P.L.1975, c.291 (C.40:55D-70), up to a maximum
amount as specified by the ordinance.
���� The
municipal agency, in furnishing a transcript or tape of the proceedings to an
interested party at his expense, shall not charge such interested party more
than the actual cost of preparing the transcript or tape.� Transcripts shall be
certified in writing by the transcriber to be accurate.
���� g.��� The
municipal agency shall include findings of fact and conclusions based thereon
in each decision on any application for development and shall reduce the
decision to writing.� The municipal agency shall provide the findings and
conclusions through:
���� (1)�� A
resolution adopted at a meeting held within the time period provided in the act
for action by the municipal agency on the application for development; or
���� (2)�� A
memorializing resolution adopted at a meeting held not later than 45 days,
or 30 days for an application for development, for which at least 40 percent of
the units to be developed, 40 percent of the lots on which residential
dwellings are to be constructed, or 40 percent of the total acreage, is to be
used for the construction and development of a starter home, as defined
pursuant to section 1 of P.L.2023, c.78 (C.55:14K-104), after
the date of the meeting at which the municipal agency voted to grant or deny
approval.� Only the members of the municipal agency who voted for the action
taken may vote on the memorializing resolution, and the vote of a majority of
such members present at the meeting at which the resolution is presented for
adoption shall be sufficient to adopt the resolution.� If only one member who
voted for the action attends the meeting at which the resolution is presented
for adoption, the resolution may be adopted upon the vote of that member.� An
action pursuant to section 5 of [the act] P.L.1975, c.291 (C.40:55D-9) (resulting from
the failure of a motion to approve an application) shall be memorialized by
resolution as provided above, with those members voting against the motion for
approval being the members eligible to vote on the memorializing resolution.�
The vote on any such resolution shall be deemed to be a memorialization of the
action of the municipal agency and not to be an action of the municipal agency;
however, the date of the adoption of the resolution shall constitute the date
of the decision for purposes of the mailings, filings and publications required
by subsections h. and i. of this section [(C.40:55D-10)].� If the municipal agency fails to adopt a
resolution or memorializing resolution as hereinabove specified, any interested
party may apply to the Superior Court in a summary manner for an order
compelling the municipal agency to reduce its findings and conclusions to
writing within a stated time, and the cost of the application, including
attorney's fees, shall be assessed against the municipality.
���� h.��� A
copy of the decision shall be mailed by the municipal agency within 10 days of
the date of decision to the applicant or, if represented, then to his attorney,
without separate charge, and to all who request a copy of the decision, for a
reasonable fee.� A copy of the decision shall also be filed by the municipal
agency in the office of the administrative officer.� The administrative officer
shall make a copy of such filed decision available to any interested party for
a reasonable fee and available for public inspection at his office during
reasonable hours
���� i.���� A
brief notice of the decision shall be published in the official newspaper of
the municipality, if there be one, or in a newspaper of general circulation in
the municipality.� Such publication shall be arranged by the applicant unless a
particular municipal officer is so designated by ordinance; provided that
nothing contained in [this act] P.L.1975, c.291 (C.40:55D-1 et seq.) shall
be construed as preventing the applicant from arranging such publication if he
so desires.� The municipality may make a reasonable charge for its
publication.� The period of time in which an appeal of the decision may be made
shall run from the first publication of the decision, whether arranged by the
municipality or the applicant.
(cf:
P.L.2004, c.42, s.5)
���� 13.� Section
34 of P.L.1975, c.291 (C.40:55D-46) is amended to read as follows:
���� a.�
An ordinance requiring site plan review and approval shall require that the
developer submit to the administrative officer a site plan and such other
information as is reasonably necessary to make an informed decision as to
whether the requirements necessary for preliminary site plan approval have been
met.� The site plan and any engineering documents to be submitted shall be
required in tentative form for discussion purposes for preliminary approval.�
If any architectural plans are required to be submitted for site plan approval,
the preliminary plans and elevations shall be sufficient.
���� b.�
If the planning board required any substantial amendment in the layout of
improvements proposed by the developer that have been the subject of a hearing,
an amended application for development shall be submitted and proceeded upon,
as in the case of the original application for development.� The planning board
shall, if the proposed development complies with the ordinance and [this act] P.L.1975, c.291 (C.40:55D-1 et seq.), grant
preliminary site plan approval.�
���� c.�
Upon the submission to the administrative officer of a complete application for
a site plan which involves 10 acres of land or less, and 10 dwelling units or
less, the planning board shall grant or deny preliminary approval within 45
days, or 30 days for such an application, for which at least 40 percent of
the units to be developed, 40 percent of the lots on which residential
dwellings are to be constructed, or 40 percent of the total acreage, is to be
used for the construction and development of a starter home, as defined
pursuant to section 1 of P.L.2023, c.78 (C.55:14K-104), of the
date of such submission or within such further time as may be consented to by
the developer.� Upon the submission of a complete application for a site plan which
involves more than 10 acres, or more than 10 dwelling units, the planning board
shall grant or deny preliminary approval within 95 days, or 60 days for such
an application, for which at least 40 percent of the units to be developed, 40
percent of the lots on which residential dwellings are to be constructed, or 40
percent of the total acreage, is to be used for the construction and development
of a starter home, as defined pursuant to section 1 of P.L.2023,
c.78 (C.55:14K-104), of the date of such submission or within such
further time as may be consented to by the developer.� Otherwise, the planning
board shall be deemed to have granted preliminary approval of the site plan.
(cf:
P.L.1984, c.20, s.8)
���� 14.� Section
14 of P.L.1979, c.216 (C.40:55D-46.1) is amended to read as follows:
���� 14.�
An ordinance requiring, pursuant to section 7.1 of P.L.1975, c.291
(C.40:55D-12), notice of hearings on applications for development for
conventional site plans, may authorize the planning board to waive notice and
public hearing for an application for development, if the planning board or
site plan subcommittee of the board appointed by the chairman finds that the
application for development conforms to the definition of "minor site
plan." Minor site plan approval shall be deemed to be final approval of
the site plan by the board, provided that the board or said subcommittee may
condition such approval on terms ensuring the provision of improvements
pursuant to sections 29, 29.1, 29.3 and 41 of P.L.1975, c.291 (C.40:55D-38,
40:55D-39, 40:55D-41 and 40:55D-53).�
���� a.�
Minor site plan approval shall be granted or denied within 45 days of the date
of submission of a complete application to the administrative officer, within
30 days for such an application, for which at least 40 percent of the units to
be developed, 40 percent of the lots on which residential dwellings are to be
constructed, or 40 percent of the total acreage, is to be used for the
construction and development of a starter home, as defined pursuant to section
1 of P.L.2023, c.78 (C.55:14K-104), or within such further time as may be consented to
by the applicant.� Failure of the planning board to act within the period
prescribed shall constitute minor site plan approval.�
���� b.�
Whenever review or approval of the application by the county planning board is
required by section 8 of P.L.1968, c.285 (C.40:27-6.6), the municipal planning
board shall condition any approval that it grants upon timely receipt of a
favorable report on the application by the county planning board or approval by
the county planning board by its failure to report thereon within the required
time period.�
���� c.�
The zoning requirements and general terms and conditions, whether conditional
or otherwise, upon which minor site plan approval was granted, shall not be
changed for a period of two years after the date of minor site plan approval.�
The planning board shall grant an extension of this period for a period
determined by the board but not exceeding one year from what would otherwise be
the expiration date, if the developer proves to the reasonable satisfaction of
the board that the developer was barred or prevented, directly or indirectly,
from proceeding with the development because of delays in obtaining legally
required approvals from other governmental entities and that the developer
applied promptly for and diligently pursued the approvals.� A developer shall
apply for this extension before: (1) what would otherwise be the expiration
date, or (2) the 91st day after the date on which the developer receives the
last of the legally required approvals from the other governmental entities,
whichever occurs later.�
(cf:
P.L.1991, c.256, s.8)
���� 15.� Section
36 of P.L.1975, c.291 (C.40:55D-48) is amended to read as follows:
���� a.���� An
ordinance requiring subdivision approval by the planning board shall require
that the developer submit to the administrative officer a plat and such other
information as is reasonably necessary to make an informed decision as to
whether the requirements necessary for preliminary approval have been met;
provided that minor subdivisions pursuant to section 35 of [this act] P.L.1975, c.291 (C.40:55D-47) shall not be
subject to this section.� The plat and any other engineering documents to be
submitted shall be required in tentative form for discussion purposes for
preliminary approval.
���� b.��� If
the planning board required any substantial amendment in the layout of
improvements proposed by the developer that have been the subject of a hearing,
an amended application shall be submitted and proceeded upon, as in the case of
the original application for development.� The planning board shall, if the
proposed subdivision complies with the ordinance and [this act] P.L.1975, c.291 (C.40:55D-1 et seq.), grant
preliminary approval to the subdivision.
���� c.���� Upon
the submission to the administrative officer of a complete application for a
subdivision of 10 or fewer lots, the planning board shall grant or deny
preliminary approval within 45 days, or 30 days for a complete application
for a subdivision of 10 or fewer lots for which at least 40 percent of the
units to be developed, 40 percent of the lots on which residential dwellings
are to be constructed, or 40 percent of the total acreage, is to be used for
the construction and development of a starter home, as defined pursuant to section
1 of P.L.2023, c.78 (C.55:14K-104), of the date of such submission or within such
further time as may be consented to by the developer.� Upon the submission of a
complete application for a subdivision of more than 10 lots, the planning board
shall grant or deny preliminary approval within 95 days, or 60 days for a
complete application for a subdivision of more than 10 lots for which at least
40 percent of the units to be developed, 40 percent of the lots on which
residential dwellings are to be constructed, or 40 percent of the total
acreage, is to be used for the construction and development of a starter home,
as defined pursuant to section 1 of P.L.2023, c.78 (C.55:14K-104), of the
date of such submission or within such further time as may be consented to by
the developer.� Otherwise, the planning board shall be deemed to have granted
preliminary approval to the subdivision.
(cf:
P.L.1984, c.20, s.9)
���� 16.� Section 14 of P.L.1975,
c.217 (C.52:27D-132) is amended to read as follows:
���� 14.� a.� The enforcing agency
shall periodically inspect all construction undertaken pursuant to a
construction permit issued by it to ensure that the construction or alteration
is performed in accordance with the conditions of the construction permit and
consistent with the requirements of the code and any ordinance implementing
said code.
���� b.��� The owner of any
premises upon which a building or structure is being constructed shall be
deemed to have consented to the inspection by the enforcing agency and the
department of the entire premises and of any and all construction being
performed on it until a certificate of occupancy has been issued.� An
inspector, or team of inspectors, on presentation of proper credentials, shall
have the right to enter and inspect such premises, and any and all construction
thereon, for purposes of ensuring compliance with the provisions of the
applicable construction permit, the code, and other applicable laws and
regulations.� All inspections pursuant to P.L.1975, c.217 (C.52:27D-119 et
seq.) shall be between the hours of 9 a.m. and 5 p.m. on business days or at another
time that has been agreed upon by the owner and the relevant inspecting entity,
whether the enforcing agency, department, or private on-site inspection agency,
or when construction is actually being undertaken, provided, however, that
inspections may be conducted at other times if the enforcing agency has
reasonable cause to believe that an immediate danger to life, limb, or property
exists or if permission is given by an owner or the owner's agent, architect,
engineer, or builder.� No person shall accompany an inspector or team of
inspectors on any inspection pursuant to P.L.1975, c.217 (C.52:27D-119 et
seq.), unless the person's presence is necessary for the enforcement of
P.L.1975, c.217 (C.52:27D-119 et seq.), or the code or unless consent is given
by an owner or the owner's agent, architect, engineer, or builder.
���� c.���� If the construction of
a structure or building is being undertaken contrary to the provisions of a
construction permit, P.L.1975, c.217 (C.52:27D-119 et seq.), the code, or other
applicable laws or ordinances, the enforcing agency may issue a stop construction
order in writing which shall state the conditions upon which construction may
be resumed and which shall be given to the owner or the holder of the
construction permit or to the person performing the construction.� If the
person doing the construction is not known, or cannot be located with
reasonable effort, the notice may be delivered to the person in charge of, or
apparently in charge of, the construction.� No person shall continue, or cause
or allow to be continued, the construction of a building or structure in
violation of a stop construction order, except with the permission of the
enforcing agency to abate a dangerous condition or remove a violation, or
except by court order.� If an order to stop construction is not obeyed, the
enforcing agency may apply to the appropriate court as otherwise established by
law for an order enjoining the violation of the stop construction order.� The
remedy for violation of such an order provided in this subsection shall be in
addition to, and not in limitation of, any other remedies provided by law or
ordinance.�
���� d.��� When an inspector or
team of inspectors finds a violation of the provisions of a construction
permit, the code, or other applicable laws and regulations at an owner-occupied
single-family residence, and issues a notice of violation and an order to
terminate the violation, the enforcing agency shall require the same inspector
or team of inspectors who found the violation to undertake any subsequent
reinspection thereof at the premises.� When the same inspector or team of
inspectors cannot be assigned to undertake the reinspection, the enforcing
agency may assign an available inspector, provided the scope of the
reinspection shall be limited to the violation for which the reinspection is
required.� The requirements of this subsection shall not apply to violations of
the plumbing or electrical subcodes, to fire safety code violations, or to any
violation of any other subcode that the Department of Community Affairs
determines to be a health or safety violation.� Nothing in this subsection
shall be construed to infringe upon the right of a property owner to request a
different inspector, team of inspectors, or supervisor, to perform any required
reinspection.
���� e.���� The owner, agent, or
other responsible person in charge of work shall notify the enforcing agency
when the work is ready for any required inspection under the code.� This notice
shall be given in writing at least 24 hours prior to the date and time requested
for the inspection.� The enforcing agency shall perform an inspection within
three business days of the date for which the inspection is requested.� The
owner, agent, or other responsible person in charge of work may provide oral
notice for inspections of minor work projects, as defined by the code.�
���� (1)�� The owner, agent, or
other responsible person in charge of work shall be present and prepared at the
time of any inspection that has been scheduled upon the owner, agent, or other
responsible person's request.� A failure by the owner, agent, or other responsible
person in charge of work to be present and prepared for inspection shall be
considered a failed inspection.
���� (2)�� If the enforcing agency
is unable to perform a requested inspection within three business days of the
date for which the inspection is requested, or during the time window set
pursuant to paragraph (5) of this subsection, the enforcing agency shall inform
the owner, agent, or other responsible person in charge of work in writing
within 24 hours of receiving the request that it is unable to perform the
inspection within three business days and no less than 24 hours prior to the
start of the four-hour time window set pursuant to paragraph (5) of this
subsection if it is unable to perform the inspection during that window, at
which time the enforcing agency and the owner, agent, or other responsible
person in charge of work may agree to a different date and time for
inspection.� The enforcing agency shall commit the agreed upon inspection date
to writing and provide a copy to the owner, agent, or other responsible person
in charge of work.
���� (3)�� If the enforcing agency
is unable to perform the requested inspection within three business days of the
date for which the inspection is requested and the enforcing agency and the
owner, agent, or responsible person in charge of work are unable to come to an
agreement pursuant to paragraph (2) of this subsection, the owner, agent, or
other responsible person in charge of work may choose to contract with a
private on-site inspection agency authorized by the department to conduct
on-site inspections pursuant to [paragraph] subsection
i. of section 6 of P.L.1975, c.217 (C.52:27D-124) to perform the requested
inspection or inspections.
���� (a)�� The owner, agent, or
other responsible person in charge of work shall notify the enforcing agency in
writing of any choice to utilize an authorized private on-site inspection
agency to conduct the requested inspection or inspections.
���� (b)�� The owner, agent, or
other responsible person in charge of work may elect to utilize the private
on-site inspection agency to conduct all subsequent associated inspections.� In
the event of a project with multiple units in one building, this provision shall
apply to the specific unit or units affected by the inspection delay.
���� (c)�� The use of a private
on-site inspection agency by an owner, agent, or other responsible person for
on-site inspections shall be subject to the conflict-of-interest provisions in
the code.� In addition to those requirements, no private on-site inspection agency
shall perform an inspection for any owner, agent, or other responsible person
in charge of work, if an owner, agent, or other responsible person is currently
employed by or affiliated with any individual affiliated with the private
on-site inspection agency or has employed or was associated with an individual
affiliated with the private on-site inspection agency within a timeframe
established by the commissioner by regulation.
���� (d)�� The enforcing agency
shall, if warranted, provide a fee reconciliation to the owner for an
inspection completed by a private on-site inspection agency as a result of a
missed inspection.� The enforcing agency shall perform the reconciliation at
the conclusion of the project.� This reconciliation shall be based on the fees
already paid less administrative costs for the enforcing agency and shall not
exceed the amount already paid for the project, nor shall it exceed the amount
that the enforcing agency is authorized to impose for inspections, and shall
take into account the administrative costs of the enforcing agency.
���� (4)�� If the owner, agent, or
other responsible person in charge of work believes an enforcing agency has
demonstrated a repeated inability to conduct inspections for a construction
project within the timelines required by this section, as established by the commissioner
by regulation, the owner, agent, or other responsible person in charge of work
may notify the department in writing to request authorization to utilize an
authorized private on-site inspection agency.� Within 15 business days of
receiving a notification under this paragraph, the department shall determine
whether the enforcing agency has demonstrated repeated inability and, if the
department determines, shall authorize the owner, agent, or other responsible
person in charge of work to utilize an authorized private on-site inspection
agency for all or a portion of the necessary inspections for the remainder of
the project.
���� (5)�� The enforcing agency
shall notify, in writing, within 24 hours of receiving a request for an
inspection, and not later than 24 hours prior to the start of a time window set
for an inspection, the owner, agent, or other responsible person in charge of
work of the four-hour time window, during which the enforcing agency will
conduct the inspection.� The owner, agent, or other responsible person in
charge of work may file on the department�s Internet website a complaint
against a local enforcing agency for violations of this paragraph.
Municipalities in which the Department of Community Affairs acts as the local
enforcing agency, and projects in which the Department is the sole enforcing
agency, shall not be subject to the provisions of this paragraph.�
���� f.���� Each enforcing agency
shall establish a process for ensuring inspections are performed within three
business days of a requested inspection date, as required by subsection e. of
this section, and that the applicable enforcing agency performs the inspection
within the� four-hour time window set pursuant to paragraph (5) of subsection
e. of this section or that notice is provided pursuant to paragraph (2) of
subsection e. of this section.� Authorized processes include, but are not
limited to, the use of supplemental shared services agreements with other
municipalities or enforcing agencies and the use of contracted private on-site
inspection agencies, including supplemental private on-site inspection
agencies.
���� g. (1) At timeframes
established by the commissioner by regulation, adopted in accordance with the
"Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.),
the municipal construction official shall submit an annual report detailing
compliance with the code.� The report shall include, at a minimum, information
related to the staffing, staff titles, and expenses of the enforcing agency, in
addition to any other information required by the commissioner.� The annual
report shall take into account projected work and agency resource needs for the
next budget year.
���� (2)�� A municipality that
enters into a contract for supplemental services pursuant to subsection f. of
this section shall provide a copy of the contract to the department upon
entering into the contract.
���� (3)�� The information required
by paragraphs (1) and (2) of this subsection, in addition to the inspection
log, the municipal monthly activity reports, and the fee schedule, shall be
maintained by the municipal construction official or enforcing agency, and the
municipal construction official or enforcing agency shall make the information
and documents described in this paragraph available to the department upon
request.
���� (4)�� The department may
utilize the information provided pursuant to this subsection to determine
appropriate staffing levels for the enforcing agency.� If the department
determines that an enforcing agency has not maintained appropriate staffing
levels, the department may require the municipality to take corrective actions
to ensure that the enforcing agency's staffing needs are met.
���� (5)�� The department may take
corrective action, including the issuance of penalties, pursuant to subsection
k. of section 6 of P.L.1975, c.217 (C.52:27D-124), if an enforcing agency fails
to maintain or provide the information required by this subsection or maintain
appropriate staffing levels, as determined by the department pursuant to
paragraph (4) of this subsection.
���� h.��� If an enforcing agency
is unable to meet its obligations under P.L.1975, c.217 (C.52:27D-119 et seq.),
the enforcing agency shall promptly notify the department within 15 business
days.� The department may take corrective action, including the issuance of
penalties, pursuant to subsection k. of section 6 of P.L.1975, c.217
(C.52:27D-124) if an enforcing agency fails to meet its obligations under
P.L.1975, c.217 (C.52:27D-119 et seq.).
���� i.���� Notwithstanding any
provision of subsection e. of this section to the contrary, the owner, agent,
or other responsible person in charge of work, for an inspection of any work
related to the construction or development of a starter home, as defined pursuant
to section 1 of P.L.2023, c.78 (C.55:14K-104), may elect to contract with and
utilize a private on-site inspection agency authorized by the department to
conduct on-site inspections pursuant to subsection i. of section 6 of P.L.1975,
c.217 (C.52:27D-124) to perform any requested inspection or inspections related
to the construction or development of a starter home, as defined pursuant to section
1 of P.L.2023, c.78 (C.55:14K-104), regardless of whether the enforcing agency
is able to perform a requested inspection within three business days of the
date for which the inspection is requested.
(cf: P.L.2025, c.173, s.1)
���� 17.� (New section)� a.� The
Department of Banking and Insurance, in consultation with the New Jersey
Housing and Mortgage Finance Agency and the Department of Community Affairs,
shall publish and disseminate a buyer�s guide for individuals who are
purchasing a home.� The guide shall contain a brief description of all
essential topics, including, but not limited to, mortgages, homeowner�s
insurance, and budgeting for the expenses associated with homeownership.
���� b.� The buyer�s guide shall be
written in plain language, and shall be available on the Internet website of
the Department of Banking and Insurance.
���� 18.� (New section)� a.� The
Department of Banking and Insurance, in consultation with the New Jersey
Housing and
Mortgage Finance Agency and the Department of Community Affairs, shall
undertake a public awareness campaign concerning the impacts of institutional
investment in the State housing market and to promote resources available for
homebuyers.� The campaign shall inform resident homeowners and potential
homeowners of:
���� (1)�� the buyer�s guide
published pursuant to section 17 of P.L.    , c.    (C.        )
(pending before the Legislature as this bill);
���� (2)�� the various property tax
credits, deductions, and exemptions available in the State;
���� (3)�� the impacts of
institutional investment on the State housing market, and the various practices
prohibited and regulated by P.L.    , c.    (C.        )
(pending before the Legislature as this bill); and
���� (4)�� any other information
the Department of Banking and Insurance finds relevant to the impacts of
institutional investment, or resources available for homebuyers.
���� b.��� The public awareness
campaign shall be culturally-sensitive, Statewide, and shall engage with local
media to disseminate its information.
���� c.���� The Commissioner of
Banking and Insurance, in consultation with the Commissioner of Community
Affairs, shall, in accordance with the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as
necessary to implement the provisions of sections 17 and 18 of P.L.    , c.    (C.        and        )
(pending before the Legislature as this bill).
���� 19.� (New
section)� As used in sections 19 through 22 of P.L.    , c.    (C.        through������� ) (pending before the
Legislature as this bill):
���� "Down payment"
means the amount of the initial payment paid by a first-time home buyer for a
portion of the purchase price of a single-family residence, which amount is
paid to the seller of the residence upon execution of the sale of the property.
���� "Eligible lender"
means a mortgage company, savings and loan institution, or other financial
institution organized under the laws of this State; a national bank or federal
credit union organized under the laws of the United States; or a lender
approved by the New Jersey Housing and Mortgage Finance Agency.
���� "First-time home buyer"
means a resident taxpayer who has not owned a residential real property as the
taxpayer�s principal residence prior to the purchase of the single family
residence for which a tax deduction is claimed.
���� "Interest" means "qualified residence interest," as defined in section 163 of the
Internal Revenue Code (26 U.S.C. s.163).
���� "Mortgage" means
a mortgage or security interest in which the security is a single-family
residence that is occupied, or is to be occupied, by the debtor, who is a
natural person or a member of the debtor's immediate family, as that person's
residence.
���� "Mortgage insurance"
means an insurance policy that protects the lender, or titleholder, if the
borrower defaults on their mortgage.
���� "Single-family residence"
means a residential property consisting of one to four dwelling units that is
to be occupied as the principal residence of the owner of the property.
���� 20.� (New section)� a.� A
resident taxpayer that is a first-time home buyer of a single-family residence
located in this State shall be allowed a deduction from the taxpayer�s gross
income for the taxable year in the amount paid by the taxpayer as a down payment
for the purchase of the single-family residence during the taxable year.
���� b.��� To claim the deduction
allowed pursuant to this section, the taxpayer shall attach documentation to
any return which the taxpayer is required to file under N.J.S.54A:1-1 et seq.,
in a form and manner prescribed by the director, substantiating the down payment
paid by the taxpayer during the taxable year.
���� 21.� (New section)� a.� A
resident taxpayer that is a first-time home buyer of a single-family residence
located in this State shall be allowed a deduction from the taxpayer�s gross
income for the taxable year in the amount paid by the taxpayer to an eligible
lender for mortgage interest payments during the taxable year, up to the
amounts allowable pursuant to subsection (h) of section 163 of the Internal
Revenue Code (26 U.S.C. s.163(h)).
���� b.��� To claim the deduction
allowed pursuant to this section, the taxpayer shall attach documentation to
any return which the taxpayer is required to file under N.J.S.54A:1-1 et seq.,
in a form and manner prescribed by the director, substantiating the mortgage
interest payments made by the taxpayer to an eligible lender during the taxable
year.
���� 22.� (New section)� a.� A
resident taxpayer that is a first-time home buyer shall be allowed a deduction
from the taxpayer�s gross income for the taxable year in the amount paid by the
taxpayer to an eligible lender for mortgage insurance payments during the taxable
year, up to $3,000.
���� b.��� To claim the deduction
allowed pursuant to this section, the taxpayer shall attach documentation to
any return which the taxpayer is required to file under N.J.S.54A:1-1 et seq.,
in a form and manner prescribed by the director, demonstrating:
���� (1)�� that the taxpayer was
unable to make a down payment of at least 20 percent of the purchase price of
the single-family residence;
���� (2)�� that the eligible lender
required the taxpayer to purchase mortgage insurance as a condition for
securing a mortgage; and
���� (3)�� the actual amount of
mortgage insurance payments paid by the taxpayer during the taxable year.
���� c.���� The Director of the
Division of Taxation in the Department of the Treasury shall adopt rules and
regulations, pursuant to the "Administrative
Procedure Act," P.L.1968, c.410
(C.52:14B-1 et seq.), that are necessary to effectuate the provisions of
sections 19 through 22 of P.L.��� , c.��� (C.������� through������� ) (pending before the Legislature as this bill).
���� 23.� (New section)� a.� As
used in this section:
���� "Controlled group"
means one or more chains of corporations connected through stock ownership with
a common parent corporation if stock possessing at least 50 percent of the
voting power of all classes of stock of each of the corporations is owned
directly or indirectly by one or more of the corporations; and the common
parent owns directly stock possessing at least 50 percent of the voting power
of all classes of stock of at least one of the other corporations.
���� "Covered taxpayer"
means a taxpayer, including, but not limited to, a combined group or a
controlled group of corporations that owns more than 20 single-family
residences in this State during the privilege period.� "Covered taxpayer"
shall not include a mortgage note holder that owns a single-family residence
through foreclosure; a taxpayer primarily engaged in the construction or
rehabilitation of single-family residences; or a taxpayer that owns federally
subsidized housing.
���� "Own" means, with
respect to a single-family residence, having a direct majority ownership in the
single-family residence, regardless of the percentage of that ownership
interest.
���� "Single-family residence"
means a residential property consisting of one to four dwelling units.
���� b.��� For purposes of
computing the entire net income of a covered taxpayer under P.L.1945, c.162
(C.54:10A-1 et seq.), the covered taxpayer shall add back the amounts of the
following deductions, if claimed for federal income tax purposes, in connection
with each single family residence owned by the covered taxpayer during the
privilege period:
���� (1)�� the deduction for
interest paid or accrued on indebtedness allowed pursuant to section 163 of the
federal Internal Revenue Code of 1986, 26 U.S.C. s.163; and
���� (2)�� the deduction for
depreciation allowed pursuant to section 167 of the Internal Revenue Code (26
U.S.C. s.167), and no deduction shall be allowed pursuant to paragraph (12) of
subsection (k) of section 4 of P.L.1945, c.162 (C.54:10A-4) in relation to a single-family
residence.
���� c.���� Nothing in this section
shall be construed to limit or negate the director�s authority to make
adjustments under paragraph (3) of subsection (k) of section 4 of P.L.1945,
c.162 (C.54:10A-4), section 8 of P.L.1945, c.162 (C.54:10A-8), or section 10 of
P.L.1945, c.162 (C.54:10A-10).
���� 24.� (New section)� a.� As
used in this section:
���� "Covered taxpayer"
means any taxpayer that is a pass-through entity that owns more than 20
single-family residences in this State.� "Covered
taxpayer" shall not include a
mortgage note holder that owns a single-family residence through foreclosure, a
person primarily engaged in the construction or rehabilitation of single-family
residences, or a person who owns federally subsidized housing.
���� "Own" means, with
respect to a single-family residence, having a direct majority ownership in the
single-family residence, regardless of the percentage of that ownership
interest.
���� "Pass-through entity"
means a sole proprietorship, a partnership, an S corporation, or a limited
liability company, with at least one member who is liable for tax on
distributive proceeds pursuant to the "New
Jersey Gross Income Tax Act,"
N.J.S.54A:1-1 et seq. in a taxable year.
���� "Single-family residence"
means a residential property consisting of one to four dwelling units.
���� b.��� Notwithstanding any
other provision of law to the contrary, for purposes of determining the amount
of a category of income pursuant to N.J.S.54A:5-1 that is net of expenses, a
covered taxpayer shall not be allowed to claim the following deductions or expenses,
as applicable, in connection with a single family residence owned by the
covered taxpayer during the taxable year:
���� (1)�� the depreciation
deduction otherwise allowed under section 26 of P.L.2004, c.65 (C.54A:5-1.2) or
section 2 of P.L.2024, c.1 (C.54A:5-1.2a); and
���� (2)�� any business interest
expenses incurred in relation to a single-family residence.
���� c.���� The Director of the
Division of Taxation in the Department of the Treasury shall adopt rules and
regulations, pursuant to the "Administrative
Procedure Act," P.L.1968, c.410
(C.52:14B-1 et seq.), that are necessary to effectuate the provisions of
sections 23 and 24 of P.L.��� , c.��� (C.������� and������� ) (pending before
the Legislature as this bill).
���� 25.� (New section) As used in
sections 25 through 28 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 by section 4 of
P.L.1974, c.80 (C.34:1B-4).
���� "Commissioner" means
the Commissioner of Community Affairs.
����� "Condominium"
means the form of real property ownership provided for under the
"Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.).
���� "Cooperative" means
a housing corporation or association which entitles the holder of a share or
membership interest thereof to possess and occupy for dwelling purposes a
house, apartment or other unit of housing owned or leased by the corporation or
association, or to lease or purchase a unit of housing constructed or to be
constructed by the corporation or association.
���� "Developer" means a
person who enters or proposes to enter into an incentive agreement award
pursuant to the provisions of section 27 of P.L.    ,
c.    (C.        )
(pending before the Legislature as this bill).
���� "Director" means the
Director of the Division of Taxation in the Department of the Treasury.
���� "Executive director"
means the Executive Director of the New Jersey Housing and Mortgage Finance
Agency.
���� "Eligibility period"
means the period, as specified in an incentive award agreement, during which a
developer may claim a tax credit under the program, as such period shall be
determined by the authority pursuant to section 27 of P.L.    ,
c.     (C.        )
(pending before the Legislature as this bill).
���� "Eligible project"
means a construction project or rehabilitation project undertaken in the State
by an eligible taxpayer that primarily includes the construction or
rehabilitation of one or more starter homes.  An eligible project may involve
construction or improvement upon lands, buildings, improvements, or real and
personal property, or any interest therein, including lands under water,
riparian rights, space rights, and air rights, acquired, owned, developed or
redeveloped, constructed, reconstructed, rehabilitated, or improved.
���� "Incentive award"
means an award of tax credits to reimburse a developer for the portion of the
eligible costs incurred for an eligible project.
���� "Incentive award
agreement" means the contract executed between a developer and the
authority pursuant to section 27 of P.L.    ,
c.    (C.        )
(pending before the Legislature as this bill), which sets forth the terms and
conditions under which the developer may receive the incentive awards
authorized pursuant to the program.
���� "Program" means
Starter Home Development Incentive Program established pursuant to section 26
of P.L.    ,
c.    (C.        )
(pending before the Legislature as this bill).
���� "Project cost" or
"eligible project cost" means the costs to complete the development
of an eligible project, which costs are eligible for subsidy pursuant to the
federal Low Income Housing Tax Credit Program administered by the agency, and
which costs are incurred by a developer before the issuance of a permanent
certificate of occupancy for the eligible project, or before such other time
specified by the authority.
���� "Single-family
housing" means a one- to four-family residence, a condominium unit, or a
cooperative unit.
���� "Starter home" means
a unit of single-family housing that consists of not more than 1,800 square
feet of floor area.
���� 26.� (New section)� a.� There
is established the Starter Home Development Incentive Program, to be
administered by the New Jersey Economic Development Authority, to encourage the
construction of new starter homes through the provision of incentive awards to
the developers of eligible projects.� The authority may approve the award of
tax credits to an eligible developer upon application of the developer and
following the payment of fees.
���� b.��� To be eligible for tax
credits under the program, a developer shall demonstrate to the authority at
the time of application that:
���� (1)�� the developer will
undertake an eligible project;
���� (2)�� without the incentive
award, the eligible project is not economically feasible;
���� (3)�� the eligible project
will comply with minimum environmental and sustainability standards;
���� (4)�� the eligible project
will comply with the authority�s affirmative action requirements, adopted
pursuant to section 4 of P.L.1979, c.303 (C.34:1B-5.4); and
���� (5)�� any other information
that the authority deems necessary.
���� c.���� (1)� A developer
seeking an incentive award for an eligible project shall submit an application
to the authority in a form and manner prescribed by the authority.
���� (2)�� In addition to any other
information that the authority may deem appropriate, the application shall
require the applicant to submit information:
���� (a)�� demonstrating that the
developer meets the eligibility criteria established pursuant to subsection b.
of this section; and
���� (b)�� outlining any proposed
project costs to be undertaken by the developer
���� (3)�� The authority shall
review and approve applications submitted pursuant to this section on a rolling
basis.� In reviewing applications, the authority may give preference to
qualified applicants based on any considerations that the authority deems
appropriate.
���� 27.� (New section)� a.�
Following the approval of an application submitted pursuant to section 26 of
P.L.    ,
c.    (C.        )
(pending before the Legislature as this bill), the authority shall enter into
an incentive award agreement with the developer of an eligible project.� The
chief executive officer of the authority shall negotiate the terms and
conditions of the incentive award agreement.
���� b.��� An incentive award
agreement shall specify the amount of the incentive award that shall be awarded
to the developer and the duration of the eligibility period.� The incentive
award agreement shall provide an estimated date of completion and include a
requirement for periodic progress reports, including the submittal of executed
financing commitments and documents that evidence site control, provided,
however, that the developer may sell one or more buildings during the
eligibility period, subject to such rules and regulations as may be adopted by
the authority.� If the authority does not receive periodic progress reports, or
if the progress reports demonstrate unsatisfactory progress, then the authority
may rescind the incentive award.� If the authority rescinds an incentive award
in the same calendar year in which the authority approved the incentive award,
then the authority may assign the incentive award to another applicant.
���� c.���� (1)� A developer shall
submit, prior to the first disbursement of tax credits pursuant to the
incentive award agreement, but no later than six months following project
completion, satisfactory evidence of actual project costs, as certified by a
certified public accountant, and evidence of a temporary certificate of
occupancy, or other event evidencing project completion that begins the
eligibility period indicated in the incentive award agreement.� The developer,
or an authorized agent of the developer, shall certify that the information
provided pursuant to this subsection is true, under the penalty of perjury.�
Claims, records, or statements submitted by a developer to the authority in
order to receive tax credits shall not be considered claims, records, or
statements made in connection with State tax laws.
���� (2)�� The incentive award
agreement shall include a provision allowing the authority to extend, in
individual cases, the deadline for any annual reporting or certification
requirement.
���� 28.� (New section)� a.� In
accordance with an incentive award agreement, beginning upon the receipts of
occupancy permits for all single family housing units within the eligible
project, or upon any other event evidencing project completion as set forth in
the incentive award agreement, a developer shall be allowed a total tax credit
not to exceed:
���� (1)�� 20 percent of the
eligible project costs if the eligible project includes less than 10 starter
homes; or
���� (2)�� 30 percent of the
eligible project costs if the eligible project includes 10 or more starter
homes.
���� b.��� A developer that enters
an incentive award agreement pursuant to section 27 of
P.L.    ,
c.    (C.        )
(pending before the Legislature as this bill) shall submit annually, commencing
in the year in which the incentive award is issued and for the remainder of the
eligibility period, a report indicating whether the developer is aware of any
condition, event, or act that would cause the developer not to be in compliance
with the incentive award agreement or the provisions of sections 25 through 28
of P.L.    , c.    (C.     through     )
(pending before the Legislature as this bill) and any additional reporting
requirements contained in the incentive award agreement or tax credit
certificate.� The developer, or an authorized agent of the developer, shall
certify that the information provided pursuant to this subsection is true, under
the penalty of perjury.
���� c.���� (1)� Upon receipt and
review of each report submitted during the eligibility period, the authority
shall provide to the developer and the director a certificate of compliance
indicating the amount of tax credits that the developer may apply against the
developer's tax liability.� Notwithstanding any provision of law or regulation
to the contrary, the authority shall not require the developer to include a
permanent certificate of occupancy in the first annual report, but the
developer shall include the permanent certificate of occupancy in the next
annual report after the developer receives the permanent certificate of
occupancy.� Subject to forfeiture, reduction, or other action for failure to
comply with a program requirement, within 120 days after the authority
preliminarily determines that an annual report is complete, the authority shall
either: �(a) approve the annual report and notify the director that the
authority has approved the report and that the director is to issue the tax
credit certificate; or (b) request more information from the developer to
finalize the approval. �If the authority fails to act within 120 days from its
preliminary determination that the annual report is complete, the annual report
shall be deemed approved by the authority, and the developer shall be entitled
to receive its tax credit certificate.
���� (2)�� Upon receipt by the
director of the certificate of compliance, the director shall allow the
developer 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,
which credit may be first applied in the tax period for which it was issued, in
the tax period in which it was issued, or in a successive tax period, as
authorized in this paragraph, without the need to amend the tax return for the
tax period for which the credit was issued, subject to the carry-forward
provision in this section.� Notwithstanding the foregoing, no more than the
amount of tax credits equal to the total credit amount divided by the duration
of the eligibility period, in years, may be taken in any tax period.� A
developer may carry forward an unused credit resulting from the limitations of
this subsection, if necessary, for use in the seven privilege periods next
following the privilege period for which the credits are issued.
���� (3)�� The director shall
prescribe the order of priority of the application of the credit allowed under
this section and any other credits allowed by law against the tax imposed under
section 5 of P.L.1945, c.162 (C.54:10A-5).� The amount of the credit applied
under this section against the tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) for a privilege period, together with any other credits
allowed by law, shall not reduce the tax liability to an amount less than the
statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162
(C.54:10A-5).
���� d.��� (1) �A developer may
apply to the director and the chief executive officer of the authority for a
tax credit transfer certificate, covering one or more years, in lieu of the
developer being allowed any amount of the credit against the tax liability of
the developer.� Subject to the forfeiture, reduction, or other action for
failure to comply with a program requirement, within 120 days after the
authority preliminarily determines that an application is complete, the
authority shall either: (a) approve the application and notify the director
that the authority has approved the application and that the director is to
issue the tax credit transfer certificate; or (b) request more information from
the developer to finalize the approval.� If the authority fails to act within
120 days from its preliminary determination that the application is complete,
the application shall be deemed approved by the authority, and the developer
shall be entitled to receive its tax credit transfer certificate.�
���� (2)�� The tax credit transfer
certificate, upon receipt thereof by the developer from the director and the
chief executive officer of the authority, may be sold or assigned, in full or
in part in an amount not less than $25,000, in the tax period during which the
developer receives the tax credit transfer certificate from the director, to
another person, who may apply the credit against a tax liability 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.� The certificate provided to the developer shall include a
statement waiving the developer's right to claim the amount of the credit that
the developer has elected to sell or assign against the developer's tax
liability.
���� e.���� (1)� The developer
shall not sell or assign, including a collateral assignment, a tax credit
transfer certificate allowed under this section for consideration received by
the developer of less than 85 percent of the transferred credit amount before
considering any further discounting to present value which shall be permitted.�
The tax credit transfer certificate issued to a developer by the director shall
be subject to any limitations and conditions imposed on the application of
State tax credits pursuant to sections 25 through 28 of
P.L.    , c.    (C.        through�������
) (pending before the Legislature as this bill) and any other terms and
conditions that the director may prescribe, provided, however, that the holder
of a tax credit certificate may transfer all or part of the tax credit amount,
on or after the date of issuance of the tax credit transfer certificate, for
use by the transferee in the tax period for which it was issued, in the tax
period in which it was issued, or in any of the next three successive tax
periods.� The tax certificate holder or transferee may first use the credit
against tax liabilities in the tax period in which it was issued or in a
succeeding tax period, as authorized in this subsection, without the need to
amend the tax return for the tax period for which the credit was issued,
subject to the provisions of this section.� A transferee may carry forward an
unused credit for use in any of the next five successive tax periods, and the
unused credit shall expire thereafter.� Notwithstanding any provision of this
section to the contrary, the amount of tax credits that may be claimed by the
transferee in any tax period shall not exceed the total tax credit amount
divided by the duration of the eligibility period in years.
���� (2)�� A purchaser or assignee
of a tax credit transfer certificate pursuant to this section shall not make
any subsequent transfers, assignments, or sales of the tax credit transfer
certificate.
���� (3)�� The authority shall
publish on its Internet website the following information concerning each tax
credit transfer certificate approved by the authority and the director pursuant
to this section:
���� (a)�� the name of the
transferor;
���� (b)�� the name of the
transferee;
���� (c)�� the value of the tax
credit transfer certificate; and
���� (d)�� the consideration
received by the transferor.
���� f.���� 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 executive director and the commissioner,
shall adopt, immediately, upon filing with the Office of Administrative Law,
such rules and regulations as the chief executive officer deems necessary to
implement the provisions of sections 25 through 28 of
P.L.    , c.    (C.        through��������
) (pending before the Legislature as this bill), which rules and regulations
shall be effective for a period not to exceed 365 days after the date of the
filing.� Before the expiration of the rules and regulations, the chief
executive officer, in consultation with the executive director and the
commissioner, shall amend, adopt, or readopt the rules and regulations in
accordance with the requirements of the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
���� 29.� a.� Sections 1 through 6 of P.L.��� , c.���
(C.������� through������� ) (pending
before the Legislature as this bill) shall
take effect on the first day of the sixth month next following the date of
enactment, and shall apply to all bids placed and contracts for the purchase of
a single-family home executed, or a single-family home owned or acquired, on or
after the effective date of sections 1 through 6 of P.L.    , c.    (C.        through        )
(pending before the Legislature as this bill), except that:
���� (1)�� sections
5 and 6 of P.L.��� , c.��� (C.������� and������� ) (pending before the Legislature as this bill) shall apply to the tax
year beginning on or after January 1 next following the date of enactment; and
���� (2)�� the
Commissioner of Community Affairs, the Director of the Division of
Taxation in the Department of the Treasury,
and the Director the Division of Consumer Affairs in the Department of Law and
Public Safety shall take anticipatory action necessary to effectuate the
provisions of sections 1 through 6 of P.L.��� , c.��� (C.���� through�� ) (pending before the Legislature
as this bill).
���� b.��� Sections 7 through 16 of P.L.��� , c.��� (C.������� through������� )
(pending before the Legislature as this bill) shall take effect immediately.
���� c.���� Sections
17 and 18 of P.L.��� , c.��� (C.������� and������� ) (pending before the
Legislature as this bill) shall take effect on the first day of the fourth
month next following the date of enactment, except that the Commissioner of
Banking and Insurance and the Commissioner of Community Affairs shall take
anticipatory action necessary to effectuate the provisions of sections 17 and
18 of P.L.    , c.    (C.        and        )
(pending before the Legislature as this bill).
���� d.��� Sections 19 through 22 of P.L.��� , c.��� (C.������� through������� ) (pending before the
Legislature as this bill) shall take effect immediately, and shall apply to
taxable years beginning on or after January 1 of the year next following
enactment.
���� e.���� Sections 23 and 24 of
P.L.��� , c.��� (C.������� and������� ) (pending before the Legislature as this
bill) shall take effect immediately, and shall apply to privilege periods and
taxable years beginning on or after the January 1 next following the date of
enactment.
���� f.���� Sections 25 through 28
of P.L.��� , c.��� (C.������� through������� ) (pending before the Legislature
as this bill) shall take effect immediately.
STATEMENT
����� This bill, entitled the "Protection of
Homeownership and Limiting Institutional Investor Acquisition Act": (1)
restricts institutional investor acquisition of single-family homes and imposes
certain tax penalties on acquisition of single-family homes by institutional
investors; (2) provides down payment assistance and funding for certain
homebuyers and developers for the purchase and development of starter homes;
(3) reduces the timeframe for the approval of development applications to
certain municipal government entities, and expedites starter home inspections;
(4) requires the creation of a buyer�s home purchasing guide and establishment
of a public awareness campaign concerning the impact of institutional investors
on the housing market; (5) permits resident taxpayers who are first-time
homebuyers to claim certain gross income tax deductions; and (6) establishes
the "Starter Home Development Incentive Program" within the New
Jersey Economic Development Authority.
Restrictions on Institutional Investor Acquisition of
Single-Family Homes and Imposition of Certain Tax Penalties:
����� Sections 3 through 6 of the bill prohibit certain
institutional investors from placing a bid on or purchasing a single-family
home, as defined in the bill, during the first 45 days that the home is
available, and subject an institutional investor who owns or acquires a
single-family home to certain taxes.
����� Specifically, the bill prohibits an institutional
investor, as defined in the bill, from contacting the owner of a single-family
home, or the owner�s agent, with respect to the single-family home, or
soliciting, placing a bid on, or inducing an offer for, a single-family home
during the first 45 days that the single-family home is "on the market and
available for purchase," as the term is defined in the bill.� To
discourage circumvention of the bill by institutional investors, the bill
provides that an institutional investor that places a bid on, acquires, or
purchases a single-family home outside of the 45-day period set forth in the
bill is to be subject to an annual State tax in an amount equal to the sum of
certain calculations provided in the bill according to the number of
single-family homes owned by the institutional investor.� The State tax revenue
collected through the tax is to be credited to the New Jersey Housing and
Mortgage Finance Agency (HMFA) to establish new programs or supplement existing
programs that award grants to provide down payment assistance to families
purchasing single-family homes in the State.� The HMFA is to annually publish
on its Internet website the amount of State tax revenue collected pursuant to
the bill.� The bill authorizes the Director of the Division of Taxation
(director) and the Commissioner of Community Affairs (commissioner) to require
institutional investors to report certain information provided in the bill.�
The bill also prohibits an institutional investor from leasing a single-family
home acquired or purchased by the institutional investor for a period of five
years following the date of acquisition or purchase.
����� The bill is not to apply to certain nonprofit
organizations; small institutional investors, as defined in the bill; financial
institutions owning or acquiring a single-family home through foreclosure or
through a secured transaction; institutional investors acting as condemnors;
governmental authorities; an institutional investor that uses capital to
rehabilitate vacant and distressed single-family homes, dependent on certain
conditions; or other institutional investors excepted from the requirements of
the bill by the commissioner.
����� A person or entity, including a small institutional
investor, in the county or vicinage in which the single-family home is located,
may file a complaint in the Superior Court of New Jersey, Law Division, against
an institutional investor that violates the bill.� If the court finds the
institutional investor did violate the bill, the institutional investor is to
alienate the single-family home within six months of the court�s determination,
and any profit received shall be payable to the Attorney General.� In addition,
an amount equal to the profit received is to also be paid to, and
proportionately divided amongst, any person or entity, including a small
institutional investor, adversely and directly affected by a violation, which
is to be construed liberally, who files a complaint in the Superior Court of
New Jersey, Law Division in the county or vicinage in which the single-family
home is located within 24 months of the date that the violation occurred.
����� A violation of the bill is to also constitute an
unlawful practice in violation of the New Jersey consumer fraud act.� Further,
notwithstanding a penalty collected by the Attorney General pursuant to the
bill, the bill permits any person or entity directly and adversely affected by
a violation to file a complaint against an institutional investor in violation
of section 4 of the bill.  The complainant is to be permitted to recover
$20,000, or $60,000 if the court finds the institutional investor willfully violated
section 4 of the bill, which is required to be proportionately divided amongst
any person or entity, including a small institutional investor, directly and
adversely affected by a violation who files a complaint within 24 months of the
date that the violation occurred, in addition to certain fees and expenses
incurred in proving a violation of the bill.
����� The bill provides that a court that receives a
complaint against an institutional investor for violation of the bill is to
send administrative notice of the pending action to the institutional investor,
who is to have 60 days from the receipt of the notice to cure the alleged
violation.� If the institutional investor fails to cure, or take substantial
steps to cure, the alleged violation within the 60-day time period, the
penalties in the bill are to apply.
����� This portion of the bill would take effect on the
first day of the sixth month next following the date of enactment, and sections
5 and 6 of the bill would apply to the tax year beginning on or after January 1
following the date of enactment.� This portion of the bill is to expire on the
first day of the sixth year following the date of enactment.� The commissioner
and the director are to issue reports on the effectiveness of the provisions of
these sections and these reports are to be published on their respective
Internet websites.
Down Payment Assistance, Developer Funding, and the
Community Investment Fund:
����� Sections 7 through 11 of the bill provide down
payment assistance and developer funding for the purchase and development of
starter homes and affordable starter homes.
����� The bill modifies a down payment assistance loan
program (loan program), established for the benefit of first-time homebuyers
pursuant to a recently enacted statute, P.L.2023, c.78 (C.55:14K-104 et seq.).�
The bill also modifies the Resilient Home Construction Pilot Program
(construction program), established to provide funding for developers to
rehabilitate existing homes and construct new affordable homes for sale,
changing it from a pilot program to a permanent program in the HMFA.  The
bill ensures that a portion of the funding for the loan program and
construction program, respectively, is to be allocated to provide down payment
assistance for first-time homebuyers to purchase starter homes and affordable
starter homes, and funding for developers to construct starter homes and
affordable starter homes, as those terms are defined in the bill by size and
formal price control.
����� In addition to the loan awards already offered
through the loan program, the bill authorizes the HMFA to provide an additional
zero-interest, forgivable loan award of up to $5,000 if the first-time
homebuyer provides matching down payment funds in an amount to be determined by
the Executive Director of the HMFA.
����� The bill also establishes a revolving fund in the
HMFA, to be known as the Community Investment Fund, for carrying out the
purposes of the loan program (fund), and permits moneys held in the fund that
are not able to be disbursed immediately to be invested and reinvested.
The bill requires that a portion of the money expended from the fund for the
loan program be used for down payment assistance for first-time homebuyers to
purchase starter homes and affordable starter homes.
����� Sections 7 through 11 of the bill would take effect
immediately.
Shortened Timeframe for Land Use Applications for
Development and Expedited Inspections for Starter Homes:
����� Sections 12 through 16 of the bill reduce certain
allowed timeframes under the "Municipal Land Use Law," P.L.1975,
c.291 (C.40:55D-1 et seq.) related to the approval of an application for
development, an application for certain site plans, or for an application for
certain subdivisions, if at least 40 percent of the units to be developed,
total acreage, or lots on which residential dwellings are constructed, are to
be used for starter homes.
����� Further, for the inspection of any work related to
the construction or development of a starter home, the bill permits an owner,
agent, or other responsible person in charge of work to contract with and
utilize a private on-site inspection agency authorized by the department to
conduct on-site inspections, and further permits the private on-site inspection
agency to perform any requested inspections related to the development of a
starter home, regardless of whether the enforcing agency is able to perform a
requested inspection within three business days of the date for which the
inspection is requested.� Sections 12 through 16 of the bill would take effect
immediately.
Buyer�s Home Purchasing Guide and Institutional Investment
Impacts Public Awareness Campaign:
����� Sections 17 and 18 of the bill require the Department
of Banking and Insurance, in consultation with the HMFA and the Department of
Community Affairs, to:
����� (1)� publish and disseminate a buyer�s guide for
individuals who are purchasing a home; and
����� (2)� undertake a public awareness campaign concerning
the impacts of institutional investment in the State housing market and to
promote resources available for homebuyers.
����� Sections 17 and 18 of the bill would take effect
immediately.
Tax Incentives for Individual Homebuyers:
����� Sections 19 through 22 of the bill permit resident
taxpayers of this State who are first-time home buyers to claim a gross income
tax deduction for certain expenses.
����� Specifically, the bill allows a resident taxpayer who
is a first-time home buyer, as defined in the bill, to claim a gross income tax
deduction for the amount paid by the taxpayer as a down payment for the
purchase of a single-family residence during the taxable year.  The bill
also allows a first-time home buyer to claim a gross income tax deduction for
the amount of mortgage interest paid by the taxpayer to an eligible lender
during the taxable year, up to amounts allowable under the federal Internal Revenue
Code, on a single-family residence that is purchased and occupied as the
owner�s primary residence.  If applicable, a first-time home buyer would
also be allowed to claim a gross income tax deduction for any mortgage
insurance payments paid by the taxpayer during the taxable year, up to
$3,000.
����� Sections 19 through 22 of the bill would take effect
immediately, and apply to taxable years beginning on or after January 1 of the
year next following enactment.
Tax Disincentives for Business Entities Owning
Single-Family Residences:
����� Sections 23 and 24 of the bill prohibit certain
business entities from claiming deductions or expenses under the corporation
business tax and gross income tax for depreciation allowances and business
interest expenses related to single family residences owned by the business.
����� Under the bill, a corporation business taxpayer that
owns more than 20 single-family residences, as defined in the bill, during the
privilege period would be required to include the amounts of certain deductions
specified in the bill, if claimed for federal income tax purposes in connection
with a single-family residence owned by the taxpayer, to the taxpayer�s entire
net income for the privilege period.  The bill also prohibits the taxpayer
from claiming a deduction for depreciation in relation to single-family
residence ownership.
����� Additionally, business interest expenses and
depreciation deductions related to single family residences owned by certain
pass-through business entities, which own more than 20 single-family
residences, are not to be included in the calculation of the various categories
of business income, which are calculated net of expenses.  As a result,
the taxable income generated by these business entities would not be reduced
based on these expenses and deductions.
����� Sections 23 and 24 of the bill would take effect
immediately, and apply to privilege periods and taxable years beginning on or
after the January 1 following the date of enactment.
Starter Home Development Incentive Program:
����� Sections 25 through 28 of the bill establish the
"Starter Home Development Incentive Program" (incentive program)
within the New Jersey Economic Development Authority (EDA).
����� The purpose of the incentive program is to attract
developer investment in the development of starter homes in the State.
Under the bill, "starter home" means a unit of single-family housing
that consists of not more than 1,800 square feet of floor area.� The bill
defines a "single-family home" as a one- to four-family residence, a
condominium unit, or a cooperative unit.
����� Under the program, the EDA would provide tax credits
to eligible developers, following the approval of an application by the EDA.�
Eligible projects would include projects that primarily include the
construction or rehabilitation of one or more starter homes.  Under the
bill, projects that include at least 10 starter homes would receive a tax
credit in the amount of 30 percent of the developer�s eligible project costs,
whereas projects that include less than 10 starter homes would receive a tax
credit in the amount of 20 percent of the developer�s eligible project
costs.  Under the bill, "eligible project costs" means the costs
to complete the development of an eligible project, which costs are eligible
for subsidy pursuant to the federal Low Income Housing Tax Credit Program, and
which costs are incurred by a developer before the issuance of a permanent
certificate of occupancy for the eligible project, or before such other time
specified by the EDA.
����� The bill provides that an eligible developer that
executes an incentive award agreement with the EDA may receive tax credits as
authorized under the agreement, subject to the approval of annual compliance
reports submitted by the developer to the EDA.
����� After issuance of the certificate of compliance by
the EDA, the taxpayer would be permitted to claim the tax credit.  Any
amount of tax credit that cannot be used on a tax period may be carried forward
for use in the seven tax periods following the period for which the credit was
issued.� The bill also allows a taxpayer to apply for a tax credit transfer
certificate so that all or part of the credit awarded may be sold or assigned
to a third-party purchaser, as provided for in the bill.
����� Sections 25 through 28 of the bill would take effect
immediately.