On appeal from the Highlands Water Protection and Planning Council.
The opinion of the court was delivered by: Skillman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Yannotti, Skillman and Roe.
The opinion of the court was delivered by SKILLMAN, J.A.D. (retired and temporarily assigned on recall).
The primary issue presented by this appeal is whether the transfer of development rights (TDR) program that the Highlands Water Protection and Planning Act (the Highlands Act), N.J.S.A. 13:20-1 to -35, requires the Highlands Water Protection and Planning Council (Council) to adopt must conform with the provisions of the State Transfer of Development Rights Act (State TDR Act), N.J.S.A. 40:55D-137 to -163. We conclude that the Highlands Act authorizes the Council to adopt a TDR program for the Highlands Region that does not strictly conform with the provisions of the State TDR Act. We also conclude that the TDR program the Council adopted as part of the regional master plan (RMP) for the Highlands Region conforms with the provisions of the Highlands Act governing adoption of a TDR program.
On July 17, 2008, the Council adopted the RMP for the Highlands Region. The RMP incorporated the "Highlands Transfer of Development Rights Technical Report," a forty-page document with more than one hundred pages of supporting documentation, which established a complex TDR program for the Highlands Region. As we explained in OFP, L.L.C. v. State, 395 N.J. Super. 571, 588-89 (App. Div. 2007), aff'd o.b., 197 N.J. 418 (2008):
A TDR program is a land use tool that permits a public agency to use market forces to encourage the transfer of development potential from areas the agency wants to preserve (sending zones) to areas that are more appropriate for growth (receiving zones). Landowners in sending zones may obtain compensation in the form of TDR credits for restricting development on their properties. Payment for this lost development potential comes from purchasers who buy TDR credits, which then entitle the purchasers to build in a receiving zone at a greater density than permitted by the underlying zoning.
On September 5, 2008, the RMP and the TDR program it incorporated became effective upon its acceptance by the Governor.
Appellants, who are owners of land in the preservation area of the Highlands Region, filed this appeal challenging the validity of the RMP on the ground that the TDR program, which is a required component of the RMP, N.J.S.A. 13:20-8(a); N.J.S.A. 13:20-11(a)(6), does not conform with applicable provisions of the Highlands Act. Appellants argue that the Highlands Act incorporates the standards for a TDR program set forth in the State TDR Act, which include that "[a] receiving zone . . . shall be at least sufficient to accommodate all of the development potential of the sending zone," N.J.S.A. 40:55D-145(a); that "[t]he development potential of the receiving zone shall be realistically achievable," N.J.S.A. 40:55D-145(b); and that "[a]ll infrastructure necessary to support the development of the receiving zone . . . shall either exist or be ...