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Highlands Act Update

 

On August 10, 2004, Governor James McGreevey signed the Highlands Water Protection and Planning Act, P.L. 2004, ch. 120 (the “Act”), a law that will dramatically affect development of nearly 800,000 acres in 88 municipalities in seven counties in northwestern New Jersey. Enactment of the “Highlands Bill” was anticipated and its contents were addressed at length in the Spring 2004 edition of Exhibit A.

 

For the development community and for owners of property within the preservation area portion of the Highlands Region, the more important date is March 29, 2004, the date on which the Highlands Bill was introduced in the Senate. Major Highlands projects, defined as those with one-quarter acre or more of impervious surface or one acre or more of land disturbance, are exempt from the Highlands Act provisions, provided the project meets all of the grandfather criteria set forth in Section 28 of the Act as of March 29, 2004. To be exempt, a major Highlands development within the preservation area must have a building permit or a municipal subdivision and/or site plan approval plus, if applicable, a Water Supply Management Act permit, a water extension permit, a Realty Improvement Sewerage and Facilities Act approval, or a treatment works approval. If none of the enumerated Department of Environmental Protection (“DEP”) permits is required for the project, the project must also have, again if applicable, a DEP wetlands or stream encroachment permit or approval in order to be grandfathered. Exemption pursuant to the Highlands Act’s grandfather provision ends with the expiration of any qualifying permit or approval or, in any event, if construction is not commenced within three years of the effective date of the Act.

 

While an appointed Highlands Water Protection and Planning Council will develop a regional Master Plan for the Highlands, the DEP is charged with the immediate implementation of the Act. On July 28, 2004, DEP Commissioner Bradley Campbell wrote to the mayor of each Highlands municipality advising of the expected enactment of the Act and requested that a list, by lot, block and address, of properties receiving approval after March 29 be sent to the Assistant Commissioner of DEP’s Division of Compliance and Enforcement.

 

The DEP’s Land Use Regulation Program will be the centralized Highlands permitting agency and has developed Highlands preservation area application forms available at www.state.nj.us. dep/landuse. Any application must include a Highlands applicability determination/water quality management plan consistency determination from DEP’s Division of Watershed Planning. The consistency application form is available at www.state.nj.us.dep/highlands.

The impact on the planning area portion of the Highlands Region is less certain. The Highlands Council must adopt a master plan for the entire Highlands Region. The master plan must identify preservation area transfer of development rights (TDR) sending zones. Highlands Region municipalities may “voluntarily” designate TDR receiving zones in planning areas. The incentive for planning area TDR participation and zoning consistent with the master plan is future state funding. The Office of Smart Growth is charged with coordination of state infrastructure investment and financial assistance with the objectives of the Highlands regional master plan. Municipalities that establish voluntary receiving zones will be entitled to planning grants, may impose impact fees, and will receive priority status for state capital and infrastructure programs. The obvious implication is that those Highlands Region municipalities that fail to establish planning area TDR receiving areas will be denied state funding.

 

Highlands Region regulation will become more predictable when DEP adopts Highlands permit regulations, mandated within nine months of the Act’s effective date, and the Highlands Water Protection and Planning Council, within eighteen months, adopts a regional master plan. Thereafter, all Highlands Region counties and municipalities must submit consistent master plan revisions and preservation area ordinances and regulations for Council ratification.