Bill > S3233

Introduced Session

This bill would modify the requirements for furnishing performance and maintenance guarantees under the "Municipal Land Use Law." Performance and maintenance guarantees ensure that improvements required to be made by a developer under a development approval are completed and maintained. Under current law, a municipality may require a developer to post performance guarantees to ensure that certain types of improvements are completed. This may include improvements that are not being dedicated to a public entity. Under the bill, a municipality would only be able to require developers to post performance guarantees that cover improvements being dedicated to a public entity. The one exception to this is that a municipality may require a performance guarantee for privately-owned perimeter buffer landscaping. The bill allows a developer to opt to post a separate performance guarantee for this item. In addition, the bill eliminates the following types of improvements from the list of improvements that may be subject to a performance guarantee requirement under current law: culverts, storm sewers, erosion control and sedimentation control devices, other on-site improvements, and landscaping. The bill also modifies the description of some of the types of improvements that may currently be subject to a performance guarantee requirement. The bill authorizes municipalities to require two additional types of guarantees: a "temporary certificate of occupancy bond," and a "safety and stabilization bond." Under the bill, if a developer seeks a temporary certificate of occupancy for a development, unit, building, or phase of development, a municipality may require the developer to furnish a "temporary certificate of occupancy bond" in favor of the municipality in an amount equal to 120% of the cost of installation of improvements which remain to be completed and which are required to be completed prior to the issuance of the permanent certificate of occupancy. Upon posting a "temporary certificate of occupancy bond," all sums remaining under a performance guarantee would be released because the new bond would adequately ensure completion of the improvements. The bill would authorize a municipality to require a developer to furnish a "safety and stabilization bond," which would provide the municipality a source of funding to return property to a safe and stable condition or to implement measures to protect the public from access to an unsafe or unstable condition. A municipality could claim payment under this bond if a developer ceases all work on the development for at least 60 consecutive days and does not recommence work within 30 days after the municipality notifies the developer of the municipality's intent to claim payment under the bond. The bill specifies the manner of calculating the amount of a "safety and stabilization bond." The bill also modifies provisions of law that control the posting of maintenance guarantees. Under current law, a municipality may require a developer to provide a maintenance guarantee for a period of two years after the completion and acceptance of an improvement in an amount not to exceed 15% of the cost of the improvement. Under the bill, a municipality may require a developer to provide a maintenance guarantee for: improvements that were the subject of a performance guarantee, and specific private stormwater management specific improvements. The bill changes the current requirements concerning a developer's responsibility to pay fees to cover the municipal engineer's inspection of improvements completed by the developer. Under the bill, a developer will be required to reimburse a municipality for reasonable inspection fees paid to the municipal engineer for the inspection of improvements. A municipality may require a developer to post in escrow for this purpose an amount not to exceed 5% of the cost of: bonded improvements that are subject to a performance guarantee, and private site improvements that are not subject to a performance guarantee. The bill also deletes from current law a provision that prohibits a municipal engineer from performing an inspection if there are insufficient funds to pay for those inspections. The bill authorizes a municipality that determines there are insufficient funds in escrow to cover the cost of additional required inspections to require the developer to deposit additional funds in escrow provided that the municipality delivers to the developer a written inspection escrow deposit request, specifying details about the additional required inspections.

AI Summary

Committee Categories

Robert Andrews (D)*,  Gordon Johnson (D)*,  Steven Oroho (R)*,  Eliana Pintor Marin (D)*,  Jeff Van Drew (R)*,  Benjie Wimberly (D)*,  John Wisniewski (D)*, 

Passed Senate (Passed Both Houses) (37-0) (on 01/08/2018)