LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 5424
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: MAY 16, 2025
SUMMARY
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Synopsis: |
Promotes housing availability and prevents speculation by imposing fee for institutional ownership of certain unproductive residential property. |
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Type of Impact: |
Increase in annual State expenditures and revenues. |
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Agencies Affected: |
Department of Community Affairs; Department of Law and Public Safety; the Judiciary. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
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Annual State Expenditure Increase |
Indeterminate |
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Annual State Revenue Increase |
Indeterminate |
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· The Office of Legislative Services (OLS) concludes that the bill would result in an indeterminate upfront increase in State costs from the requirement that the Department of Community Affairs, in consultation with the Division of Consumer Affairs, adopt rules and regulations and establish a form for institutional investors to utilize when submitting their annual report.
· The OLS finds that the bill would result in an indeterminate increase in annual State expenditures from the cost to the Office of the Attorney General of enforcing the bill’s provisions regarding the reporting requirements of institutional investors, and the additional administrative cost to the Superior Court from civil actions brought for failing to submit the required report.
· The OLS further finds that the bill would result in an increase in annual State revenue due to the fee imposed on certain institutional investors and from fines paid by any of these investors found violating the bill’s reporting requirements. The OLS is unable to calculate how many institutional investors would be required to pay the fee, and in what amount, or any fines to arrive at a revenue estimate.
BILL DESCRIPTION
This bill would impose a fee for institutional ownership of certain unproductive residential property and require reporting by institutional investors to the Department of Community Affairs.
The bill imposes a fee on certain institutional investors in an amount equal to the product of $30,000 and the number of subject properties in which they have an ownership interest. Subject property means real property that is zoned for residential use that is abandoned or vacant and has not maintained a continuous or seasonal occupancy for certain time periods specified in the bill.
The bill additionally requires an institutional investor to submit an annual report to the department. An institutional investor that fails to provide the required information would be subject to a civil penalty of $500 for a first offense and $1,000 for a second or subsequent offense, with jurisdiction given to the Superior Court in the county or vicinage where the majority of the real property is owned or acquired by the institutional investor. Process would be in the nature of a summons or a warrant, and would issue upon the complaint of the Office of the Attorney General. Each day that the report is not submitted constitutes a separate and distinct offense.
The bill requires the Department of Community Affairs, in consultation with the Division of Consumer Affairs, to adopt rules and regulations to implement the provisions of the bill.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill would result in an indeterminate upfront increase in State costs from the requirement that the Department of Community Affairs, in consultation with the Division of Consumer Affairs, adopt rules and regulations and establish a form for institutional investors to utilize when submitting their annual report. This cost would likely be absorbed in the department’s current operating budget using existing resources.
The OLS finds that the bill would result in an indeterminate increase in annual State expenditures from the cost to the Office of the Attorney General of enforcing the bill’s provisions regarding the reporting requirements of institutional investors, and the additional administrative cost to the Superior Court from civil actions brought for failing to submit the required report. The OLS lacks the informational basis to determine how many complaints would occur under the bill in a given year to estimate the cost impact to the Department of Law and Public Safety and the Judiciary.
The OLS further finds that the bill would result in an increase in annual State revenue due to the fee imposed on certain institutional investors. The OLS is unable to calculate how many institutional investors would be required to pay the fee or the amount of the fee paid by each institutional investor in a given year; therefore, the amount of the increase in annual State revenue is indeterminate.
The bill establishes a penalty of $500 for a first offense and $1,000 for a second and subsequent offense for an institutional investor that fails to submit the annual report. The number of violations that may occur is unknown; therefore, the amount of the State revenue generated by this penalty is indeterminate.
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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.).