## Facts

- Bernards Township experienced rapid development and commissioned a comprehensive traffic study projecting current and future roadway needs.
- The Township adopted a Transportation Management Plan and incorporated it into the circulation element of its master plan.
- The plan contemplated extensive roadway and related improvements across the Township over roughly twenty years, estimated to cost about \$20 million.
- The Township enacted Ordinance 672, requiring all developers receiving subdivision or site plan approval to pay a formula-based pro rata share toward the Township’s long-term, township-wide road-improvement program.
- Builders’ associations and a developer challenged the ordinance as exceeding municipal authority under the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-42.
- The Law Division invalidated the challenged portion of the ordinance; the Appellate Division affirmed.

## Issues

1. Whether N.J.S.A. 40:55D-42 authorizes a municipality to require developers, as a condition of approval, to fund a pro rata share of a long-term, township-wide road-improvement program rather than specific off-tract improvements necessitated by a particular development.

## Decision

- The Supreme Court of New Jersey affirmed the Appellate Division.
- The Court held invalid the portion of Ordinance 672 requiring developers to pay a pro rata share of the Township’s long-term, \$20 million road-improvement plan.
- The Court limited its analysis to the scope of statutory authority under N.J.S.A. 40:55D-42, not constitutional takings doctrine.
- The ordinance was ultra vires because it functioned as a general impact-fee program beyond what the MLUL permits.

## Legal Principles

- Municipal authority to impose developer exactions must be grounded in a clear statutory grant; deference to ordinances cannot expand municipal power beyond enabling legislation.
- N.J.S.A. 40:55D-42 permits off-tract contributions only for “reasonable and necessary” street improvements and certain utility and drainage facilities that are necessitated by, and sufficiently related to, the particular development.
- A municipality may require a developer to pay a pro rata share of the cost of specific off-tract improvements tied to the development’s impact, but may not charge developers to fund a generalized, long-range, township-wide capital road program absent legislative authorization.
- The MLUL does not, by itself, authorize a municipality to create a comprehensive road impact-fee system through an ordinance framed as an off-tract contribution requirement.

## Conclusion

The court invalidated Bernards Township’s attempt to finance a township-wide, long-term road program through mandatory, formula-based developer exactions, holding that N.J.S.A. 40:55D-42 authorizes only development-related, reasonable, and necessary off-tract contributions for specific improvements, not a general road impact-fee scheme.


N.J. Builders Ass'n v. Bernards Twp., 108 N.J. 223, 528 A.2d 555 (N.J. 1987)