Policy Watch – September 2019
Courtenay Mercer, PP, AICP
Executive Director, Downtown New Jersey
September 6, 2019
Downtown New Jersey acts as an advocate for downtown commercial districts in New Jersey, tracking legislative, regulatory, and policy issues that can affect the success of the state’s downtowns and then informing and educating members on these issues. Since our last Policy Watch, there has been movement on a few bills impacting downtowns:
- Little has changed in the impasse over tax incentives, which expired at the end of the fiscal year. Efforts to extend the credits were conditionally vetoed by Governor Murphy, who is still pushing for his tax incentive package – including NJ Forward, NJ Aspire, a Historic Tax Incentive Program, and an Innovation Evergreen Fund. Meanwhile, the Senate Select Committee on Economic Growth Strategies is holding hearings to evaluate the effectiveness of the programs, and New Jersey Policy Perspective issued a report on September 18th questioning the benefits of past programs and recommending 10 key reforms.
- Also mired in conflict is legislation seeking to legalize or decriminalize recreational marijuana use. Bills sit is in limbo pending continued disagreements between the Governor’s office and the legislature over expungements of past offenses. While debate continues over recreational use, the industry is moving forward under existing medical marijuana law. Want to learn more about all things marijuana? Check out the resources available from NJ Cannabis Insider, and/or attend their all-day, multi-track event on October 2, 2019.
- A bill permitting municipal land banking passed both houses and was approved by the Governor as P.L. 2019, c. 159 on July 10, 2019.
- A bill specifying vacant shopping malls and office parks as eligible for designation as areas in need of redevelopment passed both houses and was approved by the Governor as P.L. 2019, c.299 on August 9, 2019.
- The Assembly version of the bill (A1478) reducing the number of seats required for a theater to be eligible to apply for a special license to serve alcoholic beverages on the premises was reported out of the Assembly Law and Public Safety Committee on June 13, 2019.
- The Senate bill (S59) requiring that a municipality remit a portion of its annual service charge revenue to its school district(s) was reported out of the Senate Community and Urban Affairs Committee and referred to the Budget and Appropriations Committee on May 13, 2019.
Below is all the legislation we have been watching that could impact downtowns. Highlighted text represents adopted laws.
Potentially Impacting Downtown Management
P.L.2019, c.121 (S731 & A1810): Regulates operation of low-speed electric bicycles and low-speed electric scooters.
The legislation permits the operation of low-speed electric bicycles on streets, highways, sidewalks, and bicycle paths. An operator of a low-speed electric bicycle is not required to register the low-speed electric bicycle, furnish proof of insurance, or have a driver’s license. The bill further provides that all statutes, rules, and regulations that are applicable to bicycles are to apply to low-speed electric bicycles. The bill passed both houses and was approved by the Governor as P.L.2019, c.121.
Related Article:
You’re about to see a lot more electric scooters in New Jersey, thanks to a new law – NorthJersey.com
Low-Speed Electric Bikes Get Go-Ahead from NJ Lawmakers – NJ Spotlight
A4497 & S2703: “New Jersey Cannabis Regulatory and Expungement Aid Modernization Act”;
The legislation legalizes personal use cannabis for adults, creates Cannabis Regulatory Commission to regulate personal use and medical cannabis, and provides expungement relief for certain past marijuana offenses. Both the Senate and Assembly reported draft cannabis legislation out of committee favorably in late November 2018, and then again remitted substitute bills out of committee on March 18, 2019. The bill is in limbo pending continued negotiations between the Governor’s office and the legislature. At this point, it appears that the legalization of marijuana will be decided as a ballot referendum in the November 2020 election.
Related Article:
Legal weed bill for N.J. may be revived later this year. ‘We’ll make one more run at it.’ – NJ.com
NJ marijuana legalization: Steve Sweeney on legal weed vote, ballot question – Asbury Park Press
S521 & A4378: Requires NJ State Council on Arts to establish “Artist District” designation and select certain municipalities or areas within municipalities for such designation.
The legislation requires the NJ State Council on Arts to establish rules and process by which a municipality can designate an Arts District. The general benefit of enhanced marketing opportunities are cited in the legislation, but specific benefits are not. The bill passed the Senate on October 29, 2018. The companion bill was introduced in the Assembly and referred to the Tourism, Gaming and the Arts Committee and was reported out of the committee with amendments on February 7, 2019.
S410 & A2201: Concerns baked goods sold at farm markets.
The legislation allows producers to sell their freshly-baked products at farm markets in wrapped or covered containers without being weighed. The bill passed the Senate on June 21, 2018. A companion bill was introduced in the Assembly and referred to the Agriculture and Natural Resources Committee and was reported out of committee on January 24, 2019.
S81: Requires retail food establishments to donate surplus unused baked goods and surplus canned and packaged goods close to retail sale date to local nonprofits and charities.
The legislation requires that retail food establishments donate surplus unused baked goods and surplus canned and packaged goods close to the retail sale date to local nonprofits and charities. This bill would apply to any operation that stores, prepares packages, serves, vends, or otherwise provides food for human consumption, and includes restaurants, catering operations that provide food directly to consumers, markets, vending locations, and institutions. The bill was reported out of the Senate Health, Human Services and Senior Citizens Committee on June 3, 2019. A companion bill has not been introduced in the Assembly.
A4700 & S3233: “Food Desert Elimination Act”; provides incentives to supermarkets and grocery stores that locate in “food deserts.”
The legislation provides a state tax credit equal to property taxes for the first super market or grocery to open in a designated food dessert. The bill was introduced in the Assembly in October 2018, and quickly moved through committee to passage by the full Assembly on December 17, 2018. A Senate companion bill was referred to the Health, Human Services and Senior Citizens Committee on November 26, 2018.
A1104 & S1311: Creates “Economic Gardening Program” in Department of State to provide customized services to certain businesses.
The legislation directs the Business Action Center to establish a program to provide personalized counseling or management consulting assistance to existing small businesses that qualify as “second-stage growth businesses.” The bill was introduced in the Assembly and referred to the Commerce and Economic Development Committee, who reported the bill out favorably and referred it to the Appropriations Committee on December 3, 2018. A bill was introduced in the Senate and referred to the Economic Growth Committee, who reported the bill out favorably and referred it to the Budget and Appropriations Committee on February 22, 2018.
A4985: Concerns parking reserved for charging plug-in electric vehicles.
The bill adds parking spaces designated for electric vehicle charging to the list of places an operator of a motor vehicle can be prohibited from parking in certain circumstances. The bill was introduced in the Assembly and referred to the Transportation and Independent Authorities Committee on February 7, 2019.
A5070 & S3507: Authorizes certain municipalities to impose parking taxes to fund projects to improve pedestrian access to mass transit.
The legislation allows municipalities with a population over 100,000 to impose a parking tax of three and a half percent to fund projects that improve pedestrian access to mass transit stations. The bill passed the Assembly on February 25, 2019 and referred to the Senate Community and Urban Affairs Committee on March 4, 2019. A Senate committee hearing has not been scheduled.
Redevelopment – Financial
PL. 2018, C97 (A2041 & S1840): “Economic Redevelopment and Growth Grant Bond Financing Act,” authorizing issuance of bonds secured by pledge of Economic Redevelopment and Growth Grant proceeds, municipal liens, and special assessment; expands “Redevelopment Area Bond Financing Law;” extends time to complete certain projects under “Long Term Tax Exemption Law.”
The legislation authorizes municipalities to raise cash to assist private development by issuing bonds backed by Economic Development Authority tax incentives. The bill passed both houses and was approved by the Governor as PL. 2018, C97.
Related Articles:
NJ Modernizes Its Redevelopment Bond Financing Laws – New Jersey Law Journal
Push to give towns more power to entice developers with special bonds – NJ Spotlight
EDITORIAL: No debt, no problem? Maybe – My Central Jersey
P.L. 2019, c. 159 (S1214 & A3797): Permits municipal land banking in conjunction with online property database development.
The legislation enables the establishment of land banking agreements, which authorize a land banking entity to hold, maintain, sell, lease, or convey municipal property that is not needed for a public purpose. The bill passed both houses and was approved by the Governor as P.L. 2019, c. 159 on July 10, 2019.
Related Article:
Newark Mayor Says ‘Land Banking’ Is Powerful Way To Fight Blight – Patch.com
A1311: & S2031: “Historic Property Reinvestment Act”; provides credits against certain taxes for certain costs of rehabilitating historic properties.
The legislation authorizes an income tax credit for a portion of the rehabilitation costs of qualified historic owner-occupied residential and commercial properties. DNJ made statements in support of a historic preservation tax credit in its January 5, 2018 Memo to the Murphy Transition Team. A prior version of this bill was passed out of the Legislature with bipartisan support but vetoed by then Governor Christie. This bill was introduced in the Assembly and referred to the Agriculture and Natural Resources Committee on January 9, 2018. A companion bill was introduced in the Senate and referred to the State Government, Wagering, Tourism & Historic Preservation Committee and a substitute bill was reported out favorably and referred to the Senate Budget and Appropriations Committee on October 18, 2018. Read DNJ testimony from the October 18th committee meeting.
The Governor’s office has proposed an alternative historic tax credit program as part of a broader economic tax incentive package to replace expiring Economic Development Authority programs. Legislation reflecting the administration’s proposal has not yet been introduced in the legislature.
A2926 & S2483: “New Jersey Transit Villages Act.”
The legislation encourages municipalities to promote intensive mixed-use development within close proximity to mass transit by amending the MLUL (NJAC 40:55D-et al) to allow for the creation of a transit village plan, and prioritizing existing funding to and creating a grant program for projects within designated transit village zones. The Assembly bill was reported out of the Commerce and Economic Development Committee with amendment on February 1, 2018, and was referred to the Assembly Appropriations Committee on September 13, 2018. A companion bill was reported out of the Senate Economic Growth Committee and referred to the Budget and Appropriations Committee on June 17, 2019.
A2441 & S3532: Establishes Main Street Economic Growth Program to encourage business development in small, highly developed municipalities.
The legislation authorizes corporate business tax and gross income tax credits, as well as loans and technical assistance to businesses within a “Main Street area” as designated by a municipality with a population under 11,000 and is 70% developed. The Assembly bill was reported and referred to the Appropriations Committee on March 5, 2018. A Senate companion bill was introduced and referred to the Economic Growth Committee on March 4, 2019.
A1183 & S2256: Establishes Main Street Assistance Program to encourage business development in small municipalities.
The legislation authorizes corporate business tax and gross income tax credits, as well as loans and technical assistance to businesses in Main Street areas within small municipalities, which are defined as having a population under 20,000 and is over 75 percent developed. The bill was introduced in the Assembly and referred to the Commerce and Economic Development Committee on January 9, 2018. A companion bill passed in the Senate on March 25, 2019.
A2561 & S2234: Allows corporation business tax credits as incentives for redevelopment of distressed shopping centers.
The legislation establishes a program to certify taxpayers that make retail investments to redevelop partially or completely vacant shopping centers in New Jersey as eligible to receive a corporation business tax credit of up to $15,000, but not exceeding the amount of 50 percent of corporation business tax owed by the taxpayer. The bill was introduced in the Assembly and referred to the Commerce and Economic Development Committee on February 1, 2018. A companion bill was introduced in the Senate and referred to the Economic Growth Committee on March 8, 2018.
S867 & A3691: Imposes prevailing wage for public work on properties receiving tax abatements or exemptions.
The legislation imposes a prevailing wage on any project receiving tax incentives. DNJ made statements on a prior version of this bill in a December 8, 2017 article, and its January 5, 2018 Memo to the Murphy Transition Team. The bill passed both houses on May 30, 2019, and now awaits the Governor’s review.
S59: Requires municipalities to share certain payments received in lieu of property taxes with school districts; informs counties and school districts of application for property tax exemption.
The legislation requires that a municipality remit a portion of its annual service charge revenue to its school district(s) in an amount calculated by multiplying the number of schoolchildren in the approved project by the average budgetary cost per pupil in the district. See DNJ statements on this bill in a January 5, 2018 Memo to the Murphy Transition Team and May 17, 2019 Article. The bill was reported out of the Senate Community and Urban Affairs Committee and referred to the Budget and Appropriations Committee on May 13, 2019.
A345 & S1701: Requires cost-benefit analyses and local government financial impact findings for approval of long term property tax exemption.
The legislation requires both the applicant for a long-term property tax exemption and the municipality to conduct a cost-benefit analysis of the project’s impact on the finances on affected governments. The Senate bill was reported from the Senate Community and Urban Affairs Committee and referred to the Budget and Appropriations Committee on May 13, 2019.
A3536 & S1837:Establishes Emerging Technology Urban Grant Program in EDA; appropriates $20 million.
This legislation establishes the Emerging Technology Urban Grant Program to award grants to qualifying emerging technology businesses to encourage the businesses to locate in one of three urban technology zones to acquire cloud computing services that will facilitate the businesses to grow and create full-time employment. The bill was introduced in the Senate and referred to the Economic Growth Committee on February 8, 2018. A companion bill was introduced in the Assembly and referred to the Science, Innovation and Technology Committee on March 5, 2018.
Redevelopment – General
PL. 2018, C74 (S1247 & A2779): Authorizes certain local government utilities to impose additional connection fees; requires certain new credits and reductions for these fees.
The legislation allows new connection fees to be imposed for an addition, alteration, or change in use to certain connected properties. The legislation also requires credits if the reconnection does not require any new physical connection, does not increase the nature or size of the service or the number of services units, or does not expand the use of the utility system. Finally, the legislation provides fee reductions to all affordable housing, including affordable housing units in inclusionary projects. The bill passed both houses and was approved by the Governor as PL. 2018, C74.
P.L. 2019, c.299 (A1700 & S1583): Specifies vacant shopping malls and office parks as eligible for designation as areas in need of redevelopment.
The legislation expands the conditions under which an area in need of redevelopment can be delineated to include “[a]eas with buildings used, or previously used, as a shopping mall, shopping plaza, or professional office park, which buildings have been vacant or partially vacant with less than 50% occupancy, for a period of at least one year.” The bill passed both houses and was approved by the Governor as P.L. 2019, c.299 on August 9, 2019.
S1155 & A5084: Requires registration of certain vacant and abandoned properties with municipalities and provides enforcement tools related to maintenance of these properties.
The legislation requires the responsible party for a vacant and abandoned property to register the property with the municipality in which the property is located and would provide enforcement tools related to the maintenance of these properties. The bill was reported out of the Senate Community and Urban Affairs Committee and referred to the Appropriations Committee on March 4, 2019. The Assembly companion bill passed out of committee on June 6, 2016, but has not been posted for floor discussion.
A135 & S1261: Establishes fire safety standards and protocols for certain light frame residential construction; requires placards identifying primary structural systems of buildings.
The legislation establishes a number of fire safety standards for light frame construction of new multiple dwellings, hotels, and 18 rooming and boarding houses with more than two dwelling or sleeping units. The bill was introduced in the Assembly and referred to the Housing and Community Development Committee on January 9, 2018. A companion bill was introduced and referred to the Senate Community and Urban Affairs Committee on January 25, 2018. The bill was transferred to the Senate Budget and Appropriations Committee and reported out with amendments on December 10, 2018.
A3075 & S597: Encourages development of public electric vehicle charging infrastructure in redevelopment projects.
The legislation adds definitions of electric vehicle charging stations (EVCS), authorizes EVCS to be included in redevelopment plans and projects, and allows municipalities to use redevelopment funding streams to build public EVCS. The bill was introduced in the Assembly and referred to Commerce and Economic Development Committee who reported it out with amendments on September 13, 2018. The Assembly passed the bill with further amendments on January 31, 2019; and referred it to the Senate Environment and Energy Committee as amended on February 7, 2019.
A4610 & S3482: Permits municipalities to require registration of vacant and abandoned properties and use registration fee proceeds to maintain these properties.
The legislation clarifies the authority of municipalities to require registration of vacant and abandoned properties. It further allows municipalities to impose escalating fees on said property, the proceeds of which may be used to maintain the same. The bill was introduced in the Assembly and referred to the Housing and Community Development Committee on October 18, 2018. A companion bill was introduced in the Senate and refereed to the Community and Urban Affairs Committee on February 14, 2019.
Liquor Licenses
A1318 & S2219: Permits municipalities to issue retail liquor licenses for use in certain historic taverns.
The legislation authorizes municipalities to issue permits to sell alcoholic beverages for on-premise consumption in abandoned historic taverns. The bill passed in the Assembly on May 24, 2018. A companion bill was introduced and referred to the Senate Community and Urban Affairs Committee on March 8, 2018.
A3921 & S2580: Permits sale of certain alcoholic beverages and related products at seasonal farm markets.
The legislation authorizes the Director of the Division of Alcoholic Beverage Control to issue a daily or annual permit to the holder of a limited brewery license, restricted brewery license, craft distillery license, plenary winery license, farm winery license, or cidery and meadery license to sell the licensee’s products at a seasonal farm market for consumption off the premises. The bill passed in the Assembly on May 24, 2018. A companion bill was introduced and referred to the Senate Economic Growth Committee on May 14, 2018.
Bill A1029 & S2168: Allows municipality to issue permits to sell alcoholic beverages in residential redevelopment areas.
This legislation allows for the issuance of permits to sell alcoholic beverages within the redevelopment district of certain municipalities that have adopted a Smart Growth Redevelopment Plan. The bill passed the Assembly on June 7, 2018. A companion bill was introduced in the Senate and referred to Law and Public Safety Committee on March 5, 2018.
Related Article:
Bill to allow more liquor permits in Hackensack passes the Assembly – NorthJersey.com
A2011 & S1199: Permits municipalities to hold certain inactive liquor licenses reserved for smart growth developments for an additional five years.
The legislation allows a municipality that acquired an inactive plenary retail consumption license that remains inactive on the bill’s effective date to maintain that license in an inactive status for up to five additional years. The bill was reported out of the Assembly Oversight, Reform and Federal Relations Committee with Amendments on February 8, 2018. A companion bill was introduced in the Senate and referred to Senate Law and Public Safety Committee on January 25, 2018.
A1505: Creates new liquor licenses for certain restaurants and permits the issuance of additional liquor licenses; provides tax credit under corporate business tax and gross income tax for fair market value of certain alcoholic beverage licenses.
The legislation allows municipalities to issue restricted restaurant, and beer and wine licenses for use in connection with restaurants that occupy a minimum square footage of 1,500 and a maximum square footage of 6,000 and maintain a full-service kitchen with a minimum square footage of 500. The bill was introduced in the Assembly and referred to the Oversight, Reform and Federal Relations Committee on January 9, 2018. A Senate companion bill has not been introduced.
A1478 & S1648 : Permits theaters with 100 seats or more to apply for liquor license.
This legislation reduces from 1,000 to 100 the number of seats required for a theater to be eligible to apply for a special license to serve alcoholic beverages on the premises. The Assembly bill was transferred out of the Oversight, Reform and Federal Relations Committee to the Law and Public Safety Committee, where it was reported out on June 13, 2019. A floor discussion has not been scheduled. A companion bill was introduced in the Senate and referred to the Law and Public Safety Committee on February 5, 2018.
A2008: Provides for transfer and sale of inactive liquor licenses for use in qualifying smart growth municipalities.
The legislation repeals sections P.L.2007, c.351 (C.33:1-24.1 and 33:1-24.2) which permits special permits for the service of alcoholic beverages in smart growth development projects; and allows for the purchase of inactive plenary retail consumption licenses private interests. The bill was introduced in the Assembly and referred to the Oversight, Reform and Federal Relations Committee on January 9, 2018. A Senate companion bill has not been introduced.
S3454 & A5030: Allows certain qualifying projects to sell alcoholic beverages.
The legislation authorizes municipalities to issue two special permits for alcohol consumption to historic buildings in qualifying redevelopment project areas. The bill was introduced in the Senate and referred to the Law and Public Safety Committee on February 7, 2019. A companion bill was introduced in the Assembly and referred to Law and Public Safety Committee on February 7, 2019.
Urban Enterprise Zone
PL. 2018, C19 (formerly S846 & A3549): Reinstates and extends duration of certain UEZs; requires DCA to study UEZ program and report recommendations to the Legislature.
The legislation reinstates expired UEZs until December 31, 2023; and extends the term of those UEZs that expire prior to that date. It also requires the Department of Community Affairs (DCA) to study the UEZ program and to submit to the Legislature a report and recommendations. The bill passed both houses and was approved by the Governor as PL. 2018, C19.
Related Article:
Phil Murphy agrees to reduced sales tax in these 5 N.J. cities – NJ.com
A2982 & S2367: Allows certain municipalities to establish lower property tax rate on improvements than land and eliminates urban enterprise zone program.
The legislation eliminates the Urban Enterprise Zones (UEZ), but allows former UEZs to employ a land-based property tax system, which is defined in the legislation as a property tax system under which taxable improvements are taxed at a lower rate than taxable land. Other municipalities may apply to the Division of Taxation to adopt a similar measure. The bill was introduced in the Assembly and referred to the Commerce and Economic Development Committee on February 8, 2018. A companion bill was introduced and referred to the Senate Community and Urban Affairs Committee on April 5, 2018.
