S4850

An Act concerning the acquisition of real property by municipalities through eminent domain, amending P.L.1971, c.199, and supplementing P.L.1971, c.361 (C.20:3-1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 5 of P.L.1971, c.199 (C.40A:12-5) is amended to read as follows:

5. [(a)] a. Any county, by resolution, or any municipality, by ordinance, may provide for the acquisition of any real property, capital improvement, or personal property:

(1) [By] by purchase, gift, devise, lease, exchange, condemnation, or installment purchase agreement;

(2) [Subject] subject to lawful conditions, restrictions, or limitations as to its use by the county or municipality, provided the governing body accepts such lawful conditions, restrictions, or limitations. When any county or municipality shall have acquired any real property, capital improvement, or personal property upon any lawful condition, restriction, or limitation, it is hereby authorized to take such steps as may be necessary and proper to the compliance by the county or municipality with such lawful conditions, restrictions, or limitations; and

(3) [Whether] whether the acquisition of any real property is by lease, purchase, installment purchase agreement, or exchange, the governing body may require the construction or repair of any capital improvement as a condition of acquisition.

[(b) ] b. To the extent that the acquisition is by an installment purchase agreement, the obligation of the county or municipality shall be valid and binding for the term thereof which shall not be greater than 40 years and shall not be otherwise subject to annual appropriation, and the authorization of such obligation shall not be subject to any of the provisions of the "Local Bond Law," (N.J.S.40A:2-1 et seq.), except that:

(1) the repayment schedule of the principal shall be consistent with the requirements of N.J.S.40A:2-26 et seq., unless otherwise approved by the Local Finance Board within the Division of Local Government Services in the Department of Community Affairs[,] ;

(2) a supplemental debt statement reflecting the principal sum of the installment purchase agreement shall be filed consistent with the provisions of N.J.S.40A:2-10; and

(3) to the extent that such supplemental debt statement reflects debt in excess of the debt limitations imposed on counties or municipalities, as appropriate, by N.J.S.40A:2-6 and not otherwise within the exceptions contained in N.J.S.40A:2-7, the county or municipality must obtain the approval of the Local Finance Board.

[(c)] c. Any county or municipality having acquired any real property, capital improvement, or personal property or any real estate or interest therein, which acquisition or estate or interest shall have become unsuited or inconvenient for the use for which it was acquired, may, at any time convert a portion or the whole thereof to any other public use unless otherwise provided by law or by the terms of acquisition.

[(d)] d. Whenever the governing body of any county or municipality to which there has been conveyed any real property, capital improvement, or personal property subject to such lawful conditions, restrictions, or limitations shall by ordinance, in the case of a municipality, and by resolution, in the case of a county, determine that [said] the real property, capital improvement, or personal property can no longer be used advantageously for the purposes for which the same were acquired by the county or municipality, [said] the county or municipality may, by ordinance or resolution, authorize the sale or exchange pursuant to section 13 of [this act] P.L.1971, c.199 (C.40A:12-13) of the interest of the county or municipality in [said] the real property, capital improvement, or personal property.

Whenever the county or municipality, by resolution or ordinance, as the case may be, determines that property, which has been acquired by purchase, gift, devise, lease, exchange or otherwise for a nominal or no consideration for a specific purpose, or subject to lawful conditions, restrictions, or limitations as to its use, can no longer be used for the purposes for which acquired, it may offer or reconvey [said] the property to the original grantor or [his] the grantor’s heirs for a similar or no consideration, prior to other disposition pursuant to section 13 of [this act] P.L.1971, c.199 (C.40A:12-13).

e. Notwithstanding the provisions of P.L.1971, c.199 (C.40A:12-1 et seq.) to the contrary, a municipality, by ordinance, shall provide within the text of the ordinance, the explicit particular use intended for any real property, capital improvement, or personal property within its jurisdiction to be acquired under the "Eminent Domain Act of 1971," P.L.1971, c.361 (C.20:3-1 et seq.).

(cf: P.L.1992, c.157, s.5)

2. (New section) Notwithstanding any provision of any other law, rule, or regulation to the contrary, whenever any condemnor, as defined in section 2 of P.L.1971, c.361 (C.20:3-2) that is a municipality seeks to acquire property by condemnation, the ordinance authorizing the action shall specify the exact public use or uses for which the property is being acquired. Any ordinance stating only that the acquisition is for a public use or purpose, without a specified use or purpose, shall not satisfy the requirements of P.L. , c. (C. ) (pending before the Legislature as this bill).

3. This act shall take effect immediately.

STATEMENT

This bill requires municipalities to specify, in any ordinance implementing the use of eminent domain, the explicit particular use intended for that property. The requirement, under the "Local Lands and Buildings Law," P.L.1971, c.199 (C.40A:12-1 et seq.), is to apply to acquisition of any real property, capital improvement, or personal property within its jurisdiction to be acquired under the "Eminent Domain Act of 1971," P.L.1971, c.361 (C.20:3-1 et seq.).

The bill also supplements the "Eminent Domain Act of 1971" to specify that when any condemnor that is a municipality seeks to acquire property by condemnation, the ordinance authorizing the action is to specify the exact public use or uses for which the property is being acquired.

In Borough of Seaside Park v. Shree Jyoti, LLC, Docket No. A-2-25, decided on August 10, 2026, the New Jersey Supreme Court ruled 6-1 that municipalities do not have to state a specific public use or purpose in an ordinance when starting a condemnation action because such a requirement is not specified under current law. This bill amends current law to require municipalities to specify in any ordinance implementing eminent domain the particular use intended for that property.

The bill also makes technical corrections.