Legislature Approves One-Year Extension of New Jersey’s Permit Extension Act

Our recent blog noted that New Jersey’s Permit Extension Act (“PEA”) was to sunset at the end of this year unless a further extension was enacted into law. On Thursday, December 18, both the Assembly and the Senate voted to approve a one year extension of the PEA. The legislation now awaits action by the Governor.

New Jersey’s Permit Extension Act (“PEA”) was initially enacted in 2008 in response to “the crisis in the real estate finance sector of the economy.” The purpose of the PEA was to toll through the end of 2012, expiration of various approvals necessary for development. The PEA was later amended in 2012, due to the then “current national recession,” to extend the tolling of the expiration of those approvals until December 31, 2014. Unless the Legislature approves a further extension, the PEA will sunset at the end of this year, posing a problem for projects which have not yet started construction, because their approvals may expire.

The PEA provides for tolling of any “approval,” as defined in the statute, which is or was in existence during the extension period (January 1, 2007 through December 31, 2014). Although there are important exceptions, most subdivision, site plan and variance approvals granted pursuant to the Municipal Land Use Law are encompassed within covered “approvals,” as are many approvals granted by the New Jersey Department of Environmental Protection (NJDEP), New Jersey Meadowlands Commission (NJMC), Delaware and Raritan Canal Commission, New Jersey Pinelands Commission, and various other agencies.

The pending legislation, which originally provided for a two year extension but was revised in committee to provide for only a one year extension, would extend the tolling provided by the PEA, based on the “most recent national recession,” by redefining the “extension period” to conclude on December 31, 2015, and hence toll the running of the period of approval through that date. As is now the case, the legislation provides that the PEA could not extend an approval for more than six months beyond the conclusion of the extension period, i.e., through June 30, 2016, and could not shorten the duration that any approval would have had absent the PEA. The legislation, A-3815 which was substituted for S-2551, was approved by a vote of 66-1-8 in the Assembly, and by a vote of 31-5 in the Senate.

If the Governor extends the law by signing this legislation, projects with permits set to expire will gain another year in which to move forward.

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