LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 4468
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JANUARY 21, 2025
SUMMARY
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Synopsis: |
Replaces certain fixed interest rate award in eminent domain cases with interest rate based on just compensation awards. |
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Type of Impact: |
Periodic expenditure impact on the State and local government entities. |
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Agencies Affected: |
State and local entities that use power of eminent domain; the Judiciary. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
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Periodic State Expenditure Impact |
Indeterminate |
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Periodic Local Expenditure Impact |
Indeterminate |
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· The Office of Legislative Services (OLS) concludes that the bill will have an indeterminate impact on the expenditures of any State or local government entity that uses the power of eminent domain. The fiscal impact may be positive or negative and the number of eminent domain cases a State or local government entity may engage in and the principal of each just compensation award are unknown. Therefore, the fiscal impact is indeterminate.
· The OLS further finds that the bill would result in an indeterminate increase in administrative costs to the Judiciary from its new responsibility to determine an interest rate in accordance with the provisions of the bill.
BILL DESCRIPTION
This bill would replace the fixed interest rate award in eminent domain cases with an interest rate based on just compensation awards.
Under current law, interest rate awards in certain
eminent domain cases are either (1) fixed at six percent or (2) set at an
applicable “legal rate.” The bill eliminates those fixed rates and provides
that the interest will be fixed and determined by the court in a summary manner
after final determination of compensation.
Under the bill, in making its determination, the court may consider any relevant factors, including:
(1) prevailing commercial interest rates;
(2) the prime rate or rates;
(3) the applicable legal rates of interest; and
(4) an appropriate interest rate on a just compensation award that justly indemnifies the condemnee for the loss of the use of the compensation to which the condemnee was entitled.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill will have an indeterminate impact on the expenditures of any State or local government entity that uses the power of eminent domain. Under current law, interest rate awards in certain eminent domain cases are either (1) fixed at six percent or (2) set at an applicable “legal rate.” The bill eliminates these fixed rates and requires the court to determine a fixed interest rate based on certain factors. The interest rate determined by the court may be higher or lower than the fixed rate awarded under current law. Therefore, the fiscal impact may be an increase or a decrease in expenditures. The OLS is unable to estimate the number of eminent domain cases that State and local government entities are involved in or the principal of each just compensation award. Therefore, the fiscal impact is indeterminate.
The OLS further finds that the bill would result in an indeterminate increase in administrative costs to the Judiciary from its new responsibility to determine an interest rate in accordance with the provisions of the bill.
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Section: |
Local Government |
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Analyst: |
Assistant Fiscal Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).