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Highlands
Water Protection and Planning Act Implications
for Highlands Region Municipalities The
Highlands Water Protection and Planning Act (Highlands Act) was signed
by Governor McGreevey in August 2004.
This paper summarizes the key aspects of the Highlands Act with
regard to municipal planning, zoning and development review.
The purpose of this summary is to help Raritan Highlands
municipalities understand the direct impacts of the Highlands Act on
them. It is not a political
or policy analysis, and does not focus on or summarize in detail the
financial (e.g., payment in lieu of taxes, or PILOT), technical or
administrative aspects of the bill, nor the non-Highlands provisions.
The formal map of the Highlands Preservation Area boundaries
described in the act (PL2004, c.120) is available from www.nj.gov/dep/highlands/.
This summary
has the following sections: §
General
Summary
§
NJDEP
Controls in the Preservation Area
§
Regional
Master Plan
o
Components
of the Regional Master Plan o
Development
and Adoption Procedures o
Transfer
of Development Rights o
Local
Conformance Requirements
§
Highlands
Council Development Reviews
§
Exemptions
from Development Review
§
Highlands
Funding
General
Summary
The
Highlands Act establishes the Highlands Region (the entirety of
88 municipalities, including areas that are outside of the Highlands
Province defined geologically), which is split into the Preservation
Area and the Planning Area.
The Preservation Area is subject to stricter controls on new
development administered by the NJ Department of Environmental
Protection (NJDEP), and is also subject to mandatory municipal
compliance with a regional master plan developed and adopted by
the Highlands Water Protection and Planning Council (Highlands
Council). The new NJDEP
controls do not apply to the Planning Area.
The Planning Area will be addressed by the regional master plan
also, but municipal compliance is voluntary; the Highlands Act provides
incentives for such compliance. The
Highlands Council is a 15 member body appointed by the Governor with
advice and consent of the Senate, serving without compensation.
Among the members must be: elected officials of Highlands
counties (3) and Highlands municipalities (5); and State residents (7)
with expertise in a variety of specialties.
The Highlands Council has the power to hire staff and outside
experts, develop a regional master plan, advise NJDEP on Highlands water
resource regulations, identify environmental and farmland preservation
priorities within the Preservation Area, designated critical areas in
the Planning Area, review most types of developments in the Preservation
Area and government projects in both areas, and help support development
of Transfer of Development Rights (TDR) programs by Highlands
municipalities. The
Governor has veto power of Highlands Council actions, through its
minutes. The
Highlands Act includes some measures that affect Highlands
municipalities but cannot be affected by them.
For instance, there are provisions allowing agricultural
operations to increase the impervious cover on their properties for
agricultural purposes, subject to the development of farm conservation
plans with Soil Conservation District approval, or (for higher levels) a
resource management systems plan with District and NJDEP approval
(Section 31). NJDEP
Controls in the Preservation Area (Sections 32 through 37, 42)
While
the regional master plan will be a major undertaking that involves
Highlands municipalities, the first impacts of this law will be within
the Preservation Area. NJDEP
must combine its reviews into a Highlands Preservation Area Approval
that incorporates existing permit requirements and Highlands Act
requirements. There are two
phases: immediate
requirements, and rule-based requirements (within 270 days).
The Highlands Act includes some Exemptions From Development
Review (see below). The
most critical provisions are: ·
Stream Buffers
– Both phases include a 300 foot buffer along all Highlands streams in
the Preservation Area, regardless of Category 1 status from the Surface
Water Quality Standards, except for linear development (e.g., roads)
that lacks a feasible alternative. ·
Surface Water
Quality – Both
phases include a mandatory nondegradation policy for all new or expanded
point source discharges (except water supply treatment facilities, which
must minimize impacts) regardless of Category 1 status.
In addition, Category 1 antidegradation provisions from the
Surface Water Quality Standards and the Stormwater Management Rules
apply to all Highlands open waters regardless of current NJDEP
classifications. ·
Water
Allocation – Both
phases reduce the threshold for NJDEP permitting from 100,000 gallons
per day to 50,000. New or
increased withdrawals regulated by NJDEP must mitigate consumptive
losses if the use is more than 50% consumptive (e.g., most irrigation
uses). All new or increased
withdrawals must maximize water conservation. ·
Flood Hazard
Areas – Both
phases reduce the allowable net fill from 20% to zero, comparable to
existing regulations in the Central Passaic Basin.
As such, the total flood storage capacity of any flood plain may
not be reduced. ·
Impervious
Surfaces – The law
allows a maximum of 3% impervious surface for each existing lot
(immediate requirement) or “of the land area” (rule requirement).
The two provisions are different but the implication is not
clear. In both cases, open
waters are excluded from the lot size for calculations. ·
Steep Slopes
– Both phases prohibit development on slopes in excess of 20% except
for linear development that lacks a feasible alternative.
The rule phase must also include standards for development on
slopes of 10% to 20%. ·
Upland
Forested Areas –
Both phases prohibit development in such areas, except that limited
losses around buildings and driveways may be approved if unavoidable and
all other Highlands requirements would otherwise be met. ·
Septic Systems
– The rule phase (but not the immediate requirements) must include
density standards regarding septic systems, to prevent water quality
degradation. This provision
is essentially a nondegradation policy for ground water. ·
Public Water
Supply Systems –
The rule phase must limit or prohibit new or extended public water
supply systems, except where needed to protect public health and safety. ·
Sewer Service
Areas – If an
approved sewer service area has no constructed wastewater collection
facilities and such facilities are not necessary to serve development
that is exempt from the Act, the sewer service area approval is revoked. To
approval a permit, NJDEP must find that narrative standards are met for
de minimus impacts on water and other natural resources, human life or
property, and other factors. These
approvals, as with current development reviews by NJDEP, are in
addition to municipal and county reviews.
NJDEP is given significant enforcement powers, including new
administrative penalties and the power to request injunctive relief and
compensatory damages in the courts. The
NJDEP regulations have significant implications beyond project review.
The Highlands regional master plan “…shall be based upon,
comply with, and implement the environmental standards adopted by the
Department of Environmental Protection…” within the Preservation
Area (Section 12). As such,
the Highlands Act intends that the NJDEP rules will become a major
driving force behind the regional master plan in the Preservation Area;
these rules will not apply to the Planning Area. Regional
Master Plan (Sections 10 through 12)
The
Highlands Council is responsible for developing the regional master
plan. Despite the many
regulatory provisions mandated for NJDEP implementation in the
Preservation Area, the regional master plan has critical applications in
both the Planning Area and the Preservation Area.
The Highlands Act includes goals for each area, with many being
the same (e.g., “protect, restore and enhance the quality and quantity
of surface and ground waters therein” is used for both areas).
There is more emphasis on preservation of large, contiguous areas
and resources in the Preservation Area, but the Planning Area goals
include preservation of environmentally sensitive lands and farmland.
One goal exclusive to the Planning Area relates to having a
“…sound, balanced transportation system that is consistent with
smart growth strategies…” Extensive
consultation is required in an 18-month schedule. Components
of the Regional Master Plan
– The most critical
mandatory components of the plan are the following: ·
Resource
Assessment –
Assesses various natural, farmland and recreational resources of the
region, and determines the amount and type of human development and
activity that the Highlands ecosystem and its components can sustain. ·
Financial
Component –
Details the costs of implementing the regional master plan including tax
stabilization, PILOT, planning grants and other local aid, land
preservation, administrative costs, etc., including a cash flow
statement and revenue sources. ·
Government and
Public Input Component
– Mandates methods to maximize local government and public input into
the Highlands Council operations. ·
Coordination
and Consistency Component
– Details methods for coordinating local, State and federal programs
and policies with the regional master plan, including the management of
water and land resources by governmental and nongovernmental entities. ·
Transportation
Component –
Details an approach to preserve transportation systems, address all
federally mandated programs, and attain the Planning Area transportation
goal. The Highlands Council
must review and approved transportation projects and programs prior to
their inclusion in the regional master plan. ·
Smart Growth
Component –
Assesses opportunities for Planning Area growth, TDR and redevelopment,
based on: a land use capability map; redevelopment opportunities;
undeveloped areas in the Planning Area that are not constrained by
environmental limitations or prime agriculture but are near existing
development and infrastructure; infrastructure limitations and available
capacities; potential voluntary TDR receiving zones and infrastructure
needs; model minimum standards for planning and development regulations;
special critical environmental areas; and redevelopment areas.
This component will essentially determine which parts of the
Planning Area are environmentally constrained and should be preserved,
which are constrained by infrastructure limitations, and which are
appropriate for development with existing infrastructure, development
with new infrastructure, or redevelopment (with growth areas by
inference being related to the use of TDR and center-based development).
·
Preservation
Area Land Use Capability Component
– Requires a map and policies for planning and managing the
development and use of land, in compliance with the NJDEP Highlands
rules. ·
Preservation
Zone Element –
Identifies parts of the Preservation Area where no development should
occur, as a focus for land acquisition and TDR. ·
Minimum
Preservation Area Standards for Municipalities and Counties
– Requires additional local measures regarding land development such
as standards for minimum lot sizes, stream setbacks, steep slopes,
maximum population densities, and regulated or prohibited land uses. Development
and Adoption Procedures (Sections 8 and 9) –
The Highlands Council has 18 months from its first meeting to adopt the
regional master plan and must readopt it every 6 years.
The planning process includes mandates for extensive consultation
with municipal and county governments, a variety of State agencies
(including the State Planning Commission) and public interests.
The Highlands Act mandates that the Highlands Council review all
existing Highlands studies and relevant governmental plans in developing
the regional master plan. The
Highlands Council may work with municipalities to identify areas
appropriate for redevelopment within the Preservation Area, for existing
brownfields or highly impervious areas.
“Right to Farm” requirements must be respected.
The regional master plan must include recommended TDR receiving
areas in the Planning Area along with a capacity analysis for each
receiving area. Following
adoption, the regional master plan goes to the State Planning Commission
for “plan endorsement” regarding the Planning Area components. Transfer
of Development Rights (Section 13)
– This approach to
shifting growth from environmentally sensitive areas (“sending
areas”) to growth-compatible areas (“receiving zones”)
was recently authorized Statewide by a separate law.
The Highlands Council is given 18 months from enactment (rather
than from their first meeting, as for the regional master plan) to
identify “sending areas” for development rights in the Preservation
Area and “receiving zones” in the Planning Area.
The information developed for the regional master plan is to be
used to identify these areas, though they probably will precede actual
adoption of the regional master plan.
The Highlands Act especially emphasizes the smart growth
component, discussed above, with regard to defining “receiving
zones” for development rights. The
Office of Smart Growth must establish a TDR pilot project within
Highlands Region municipalities prior to the Highlands Council
establishing its TDR program. The
“sending areas” will be located within special “preservation
zones” identified by the Highlands Council within the Preservation
Area, where no development would occur.
TDR credits from those areas can be bought or sold, including to
public agencies. The
Highlands Council will establish the minimum value of TDR credits in
public purchases using land values from before the new NJDEP
restrictions for the Highlands are in place. The
receiving zones must “constitute four percent of the land area
of the Planning Area, to the extent that the goal is compatible with
the amount and type of human development and activity that would not
compromise the integrity of the ecosystem of the planning area”
(emphasis added). As the
“receiving zones” are in the Planning Area, their use by
municipalities is voluntary. The
Highlands Act provides incentives to encourage implementation.
The Highlands Council is to: develop model ordinances; provide
planning assistance; perform any TDR-related real estate analysis;
provide “enhanced planning grants” up to $250,000 for a municipality
that has conformed to the regional master plan and implements eligible
TDR “receiving zones” (i.e., with densities of five units per acre
or more); and provide grants to amend municipal ordinances for TDR.
Further, municipalities with approved “receiving zones” may
impose impact fees (not allowed elsewhere), receive Highlands Council
legal support in court challenges, receive priority status for
infrastructure funding, etc. These
incentives (except for legal representation and infrastructure financing
priority) also apply within the seven Highlands counties to any
non-Highlands municipalities that establish “receiving zones” for
Highlands TDR. Local
Conformance Requirements (Section 14)
– The Highlands
Council will set a schedule of 9 to 15 months for Preservation Area
municipalities and counties to submit modified master plans and
development regulations that comply with the regional master plan.
The Highlands Council may implement and enforce the regional
master plan and its development standards if a Preservation Area
municipality or county does not, and may revoke conformance approval in
reaction to municipal or county actions that are inconsistent with the
regional master plan. A
municipality or county may adopt more stringent requirements than those
in the regional master plan, and the mandate does not apply to any
portion of a municipality within the Planning Area.
Municipalities and counties that are deemed in conformance will
also be deemed to have “endorsed plans” under the State Development
and Redevelopment Plan, and will qualify for any State aid available
under that program. The
Highlands Council will also provide technical assistance and financial
assistance, using the Highlands Protection Fund.
Finally, the Highlands Council will provide legal representation
to conforming counties and municipalities when they are sued in court
for an action related to implementation of the regional master plan
(Section 22). The courts,
in turn, are required to give conforming plans and development decisions
“extraordinary deference;” plaintiffs have the full burden of proof
“by clear and convincing evidence” (Section 24). The
“Opt In” Provision (Section 15)
– Any municipality
partially or entirely within the Planning Area may voluntarily petition
the Highlands Council to certify the municipality’s master plan and
development ordinance as being in conformance with (or more stringent
than) the regional master plan for the Planning Area.
Conformance approval by the Highlands Council makes available the
same incentives as in the Preservation Area, but the municipality can be
required to repay a pro-rata share of those incentives if it later loses
(upon review) or drops conformance approval.
Counties may also use the “opt in” provisions; requirements
for periodic review and pro-rata reimbursement apparently do not apply
to counties. Highlands
Council Development Reviews (Sections
16 and 17, Section 30) Highlands
Council review of development activities – private or public – is
triggered by the amount of new impervious surface or land disturbance
involved in an application. The
Highlands Council has authority to review government projects
(capital or other) anywhere in the Highlands Region (Section 16).
Routine maintenance, operations, rehabilitation, etc., of public
facilities are not included unless new capacity is being added.
The Highlands Council has veto power over such projects in the
Preservation Area, thought the head of a State entity may override that
veto by providing a written finding to the Governor and Highlands
Council that the project is a public necessity.
Within the Planning Area, the results of a review by the
Highlands Council are non-binding.
In both areas, the threshold is one acre of new impervious
surface or two acres of new land disturbance (individual or cumulative). The
Highlands Council may review private developments in the
Preservation Area (but not the Planning Area) once the regional master
plan has been adopted; the review occurs after local approvals are
given, not before (Section 17). The
thresholds are more stringent (one-quarter acre impervious cover or one
acre land disturbance) until the municipality is deemed in conformance
with the regional master plan, at which point the one acre/two acres
threshold is used. The
Highlands Council has strong override authorities in the Preservation
Area regarding any non-conforming decisions. Exemptions
from Development Review
The
Highlands Act exempts a wide variety of private developments from
Highlands Council review, NJDEP review and the regional master plan
(Section 30). These
exemptions include single family dwellings for a person who owned the
land as of 17 May 2004, or for any person if the project is below the
impervious cover/disturbance thresholds; larger developments that had
preliminary or final subdivision, site plan approval or construction
permits plus at least one NJDEP permit or certification approval (if any
are needed); reconstruction in basically the same building footprint;
improvements to existing homes, religious facilities and public
facilities; transportation work that does not increase through-capacity
travel lanes; existing mining and recycling facilities; public
infrastructure projects approved by referendum before 1 January 2005;
federal installations; and affordable housing projects approved by
Superior Court (for three years after receiving final municipal
approvals). Highlands
Funding
The Highlands Act establishes of guides several types of funding. Two involve PILOT for municipalities with large public land holdings affected by the watershed moratorium (Section 82), and tax stabilization for municipal fiscal stress due to the Highlands Act (Section 19). Section 61 allocates $12 million per year for 10 years and $5 million per year after that to the Highlands Protection Fund. This fund covers the tax stabilization and PILOT programs, and grants for two types of municipal costs: of bringing plans and ordinances into conformance; and for TDR efforts by conforming municipalities (Section 21). Funding for operations of the Highlands Council are not included in the bill, and apparently will be contained within the General Revenue Budget of New Jersey. Also, the Highlands Act sets up a special approach through the Garden State Preservation Trust for open space acquisition (Section 53) and farmland preservation (Section 54), with the Highlands Council providing input on priorities. Priority will be given to municipalities that are in conformance with the regional master plan. Land valuations must use both the zoning and NJDEP regulations as of 1 January 2004 and at the time of acquisition, with the higher value being used as the basis of negotiation with a landowner unless the landowner agrees to a lower valuation. Submitted by Daniel J. Van Abs, PhD, PP/AICP, New Jersey Water Supply Authority |
