N.J. Admin. Code § 7:38-6.8

Current through Register Vol. 56, No. 11, June 3, 2024

Section 7:38-6.8 - Waiver to avoid the taking of property without just compensation

(a) In accordance with N.J.S.A. 13:20-33b, the Department may, on a case by case basis, waive any requirement for an HPAA if necessary to avoid the taking of property without just compensation.

(b) A waiver under this section shall apply only after the Department determines that the proposed development does not meet all the requirements in this chapter as strictly applied, all the applicant's administrative and legal challenges to that determination as set forth in (b)1 below have concluded, and the HPAA applicant meets the requirements in (g) below.

1. An applicant may challenge any Department HPAA decision under the rules as strictly applied if the applicant disputes the Department's findings of facts or application of the rules to those facts. Following an administrative hearing, the Commissioner shall issue a Final Decision approving or denying a HPAA under the rules as strictly applied. The applicant may appeal a Final Decision which denies the HPAA or approves it with conditions to the Appellate Division of Superior Court. If a court finds that the applicant is not entitled to an HPAA under the rules as strictly applied, the Department shall review and decide the applicant's request for a waiver to avoid a taking of property. The applicant may challenge the Department's final agency action on the waiver application after any hearing in the OAL.

(c) In determining whether to waive any requirement of this chapter to avoid an alleged taking of property without just compensation, the Department shall consider:

1. The investments the property owner made in the property as a whole on which regulated activities are proposed and whether the investments were reasonable, in accordance with (d) below;

2. The minimum viable and economically beneficial use of the property as a whole, in accordance with (e) below; and

3. The environmental impacts of the minimum viable and economically beneficial use for the property as a whole, and the consistency of these impacts with the goals of the Highlands Act, in accordance with (f) below.

(d) In determining whether the property owner's investments in the property as a whole were reasonable, the Department shall consider:

1. Conditions at the time of the investment. That is, the investment shall have been made in pursuit of development that would likely have been legally and practically possible on the property as a whole, considering all constraints existing and reasonably ascertainable at the time of the investment. For example, if a property owner bought property containing freshwater wetlands regulated under N.J.A.C. 7:7A, it would not be reasonable for that owner to assume that the property could be developed without constraints. In determining conditions at the time of the investment, the Department shall consider, at a minimum, the following:

i. Existing zoning and other regulatory requirements and conditions;

ii. Historic landmarks or other historic or cultural resources on the property that would be adversely impacted by the proposed development;

iii. The likelihood the proposed development could obtain other necessary approvals such as wastewater treatment approvals or approvals from other local, State or Federal agencies;

iv. Terrain and other site conditions, and/or environmental constraints, which could affect the potential uses of the property as a whole;

v. The existence of, or likelihood of obtaining, services to the property such as sewers or electricity; and

vi. Compatibility with and adverse effects upon land uses located on adjacent properties and in the area where the property is located;

2. Costs actually incurred by the property owner in pursuit of development of the property as a whole that were reasonable in amount, related to the development, and unavoidable. For example, if the property owner began construction without the necessary permits or approvals, the owner's costs defending a prosecution or enforcement action for this violation or the payment of fines and penalties would not constitute reasonable investment costs; and

3. Any other factor affecting the property or the property owner, which is related to the reasonableness of the investments claimed and/or the proposed use of the property.

(e) In assessing the minimum beneficial economically viable use of the property as a whole, a use shall not be excluded from consideration merely because it does not result in a profit, reduces the marketability of the property as a whole, or does not allow the property owner to recoup all investments identified under (c) above.

(f) In determining the environmental impacts of the minimum beneficial economically viable use of the property as a whole and the consistency of those impacts with the goals of the Highlands Act under (c) above, the Department shall evaluate whether the use would, to the maximum extent possible:

1. Have a de minimis impact on water resources and would not cause or contribute to a significant degradation of surface or groundwaters. In making this determination, the Department shall consider the extent of any impacts on water resources resulting from the proposed major Highlands development, including, but not limited to, the regenerative capacity of aquifers or other surface or groundwater supplies, increases in stormwater generated, increases in impervious surface, increases in stormwater pollutant loading, changes in land use and changes in vegetative cover;

2. Cause the minimum feasible interference with the natural functioning of animal, plant, and other natural resources at the site and within the surrounding area, and the minimum feasible individual and cumulative adverse impacts to the environment both onsite and offsite of the proposed major Highlands development;

3. Result in the minimum feasible alteration or impairment of the aquatic ecosystem including existing contours, vegetation, fish and wildlife resources, and aquatic circulation of a freshwater wetland;

4. Not jeopardize the continued existence of species listed pursuant to the Endangered and Nongame Species Conservation Act, 23:2A-1 et seq. or the Endangered Plant Species List Act, 13:1B-15.1 51 et seq., or which appear on the Federal endangered or threatened species list, and will not result in the likelihood of the destruction or adverse modification of habitat for any rare, threatened or endangered species of animal or plant;

5. Not be located or constructed so as to endanger human life or property or otherwise impair public health, safety or welfare;

6. Result in the minimum practicable degradation of unique or irreplaceable land types, historical or archeological areas, and existing public scenic attributes at the site and within the surrounding area; and

7. Meet all other applicable Department standards, rules, and regulations and State and Federal laws.

(g) An applicant for an HPAA may request that the Department waive a requirement of this chapter under (a) above only after the Department has rendered a decision on an HPAA application under the rules as strictly applied, all legal challenges to the decision that the applicant chooses to bring have concluded pursuant to (b)1, above, and the applicant satisfactorily demonstrates the following to the Department:

1. No alternative to the proposed major Highlands development exists;

2. That the applicant has made a good faith effort to transfer development rights for the subject site pursuant to 13:20-13, and has not obtained a commitment from the Highlands Council or a receiving zone municipality to purchase said development rights;

3. The property has been offered for sale at an amount no greater than the specific fair market value to all property owners within 200 feet of the property as a whole, and to the land conservancies, environmental organizations, and the Highlands Council and all other government agencies on a list provided by the Department, at an amount determined in compliance with N.J.S.A. 13:8C-26j or 13:8C-38j, as applicable by letter sent by certified mail, return receipt requested, using the form provided by the Department, disclosing the location of all Highlands resource areas on the property and stating that an application for a waiver of the requirements of this chapter to permit development on the property has been filed and enclosing a copy of a fair market value appraisal, that was performed by a State-licensed appraiser and that assumed that the minimum beneficial economically viable use of the property is allowable under local law; and

4. That no reasonable offer based upon the minimum beneficial, economically viable use for the property has been received;

i. Documentation for (g)3 and 4 above shall include the following:

(1) A copy of each letter that the applicant sent under this subsection;

(2) All responses received. Each response shall be submitted to the Department within 15 days after the applicant's receipt of the response;

(3) A list of the names and addresses of all owners of real property within 200 feet of the property as a whole, as certified by the municipality, including owners of easements as shown on the tax duplicate;

(4) Receipts indicating the letters were sent by certified mail; and

(5) A copy of the fair market value appraisal required under (g)3 above.

(h) After consideration of the information required in (g) above, the Department shall not approve a waiver under this section if an applicant has refused a fair market value offer to purchase the property for which the waiver is sought or if there is an alternative to the proposed project that constitutes a minimum beneficial economically viable use for the property.

(i) Upon written notice from the Department advising a person that the conditions in (g) have been satisfied, the person may request a waiver under this section in accordance with N.J.A.C. 7:38-9.

(j) The Department shall complete a written analysis of the factors it considers under (c) above, which shall incorporate its decision on the request for a waiver under this section no later than 180 days from the Department's receipt of a complete request under (h) above.

(k) An HPAA with a waiver to avoid a taking of property without just compensation shall:

1. Allow only the minimum relief necessary to enable the property owner to realize the minimum beneficial economically viable use of the property as a whole, designed and built in a manner that will conserve the resources of the Highlands to the maximum extent possible; and

2. Ensure that any part of the property that the Department does not allow to be developed is protected from future development by a recorded conservation restriction containing those terms deemed necessary by the Department to preserve the undeveloped property and the mitigation plantings thereon, if any.

N.J. Admin. Code § 7:38-6.8

Amended by R.2006 d.420, effective 12/4/2006.
See: 37 N.J.R. 4767(a), 38 N.J.R. 5011(a).
In the introductory paragraph of (b), inserted ", all the applicant's administrative and legal challenges to that determination as set forth in (b)1 below have concluded,"; added (b)1; in (g), inserted ", all legal challenges to the decision that the applicant chooses to bring have concluded pursuant to (b)1, above,"; in (g)3, substituted "an amount no greater than" for "or below", and inserted "and" following "property as a whole", and inserted "at an amount determined in compliance with N.J.S.A. 13:8C-26j or 13:8C-38j, as applicable"; in (g)4i(4), inserted "and" at the end; in (g)4i(5), substituted a period for "; and"; and deleted (g)4i(6).