SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE COMMITTEE SUBSTITUTE FOR

SENATE, Nos. 4071 and 3155

STATE OF NEW JERSEY

DATED:  JUNE 26, 2025

      The Senate Budget and Appropriations Committee reports favorably a Senate Committee Substitute for Senate Bill Nos. 4071 and 3155.

      This substitute bill reallocates $500 million in tax credits to the New Jersey Housing and Mortgage Finance Agency (HMFA) for sale through a competitive tax credit auction.  Of this tax credit reallocation, $200 million are to be reallocated from the "Brownfields Redevelopment Incentive Program Act."  Once this initial allocation is exhausted, $300 million are to be made available from the "New Jersey Aspire Program Act" and "Emerge Program Act."

      Under this bill, $500 million in tax credits are to be transferred from these programs to the HMFA to support the development of certain housing development projects in the State.  Specifically, the proceeds would support the creation of middle-income workforce housing programs administered by the HMFA and low- and moderate-income housing.  The bill specifies that the tax credits reallocated to the HMFA are not subject to any requirements or conditions originally imposed on the tax credits under the “New Jersey Economic Recovery Act of 2020.”

      Specifically, this bill requires the HMFA to sell up to $500 million in tax credits through a competitive auction process.  Under the bill, these auctions are to be conducted in a manner consistent with the auctions held by the New Jersey Economic Development Authority (EDA) under the New Jersey Innovation Evergreen Program, as determined by the HMFA.  The bill provides that the tax credits may not be sold for a consideration less than 80 percent of the tax credit amount, and no more than $100 million in tax credits may be sold at auction annually.  The bill provides that certain of these tax credits may be sold or transferred by the recipient, subject to certain restrictions specified in this bill.  Additionally, the bill requires that the HMFA be permitted to join or be added to any contracts the EDA has used for its auctions, and allows HMFA certain exceptions to auction processes and purchaser requirements.

      The bill requires HMFA to use 50 percent of the proceeds of tax credit auctions to provide financial assistance to create middle-income workforce housing, which may include new construction or the rehabilitation or construction of residential units within multiple dwellings.  The bill defines “middle-income workforce housing” to mean housing that is affordable according to federal Department of Housing and Urban Development or other recognized standards for home ownership and rental costs and occupied or reserved for occupancy by households with a gross household income of 80 percent or more, but not exceeding 120 percent, of the median gross household income for households of the same size within the housing region in which the housing is located.  The bill also requires 50 percent of tax credit proceeds to be used for the creation of low- and moderate-income housing toward the fulfillment of a municipality’s current or prior round fair share affordable housing obligation pursuant to the "Fair Housing Act," (FHA) P.L.1985, c.222 (C.52:27D-301 et al.). 

      The bill provides that the 50 percent set aside requirements, for middle-income workforce housing and low- and moderate-income housing, are to remain in effect until the end of the calendar year, beginning with 2025, during which the tax credit monies have been made available and deposited with HMFA for the purposes of the bill.  If any funds deposited with HMFA remain unreserved for qualified projects subject to the set asides after December 31 of the year when the monies are deposited, the set aside is to no longer apply to those funds, which may then be used for any qualified project, either middle-income workforce housing or low- and moderate-income housing, as determined by HMFA.

      The bill requires that, in the distribution of proceeds to create low- and moderate-income housing, an application for development is to be prioritized if located in a “distressed older suburban municipality,” as defined in the bill.

      The bill directs HMFA to promptly and actively promote the middle-income workforce housing component of the bill to ensure that a substantial range of potential applicants are made aware of the program.

      The bill requires the HMFA to promulgate guidelines for a housing program to govern the application and award processes for projects seeking funds under the provisions of this bill.

      As reported by the committee, the Senate Committee Substitute for Senate Bill Nos. 4071 and 3155 is identical to Assembly Bill No. 3128 (1R), as was amended and reported by the committee on this date.

FISCAL IMPACT:

      Fiscal information for this bill is currently unavailable.