ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 4468

STATE OF NEW JERSEY

DATED:  FEBRUARY 20, 2025

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 4468.

      As reported, this bill replaces 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 6 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 but not limited to:

      (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 IMPACT:

      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. 

      The Office of Legislative Services 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.