Establishes certain State funding preferences for municipalities that enhance opportunities to develop housing.

A new section establishes that all provisions of the bill expire five years from the date of enactment, and requires the Commissioners of Community Affairs and Transportation to submit a report to the Legislature and Governor no later than four years after enactment recommending whether to continue or propose new priorities.

The preference for municipalities that amend their plans was changed from applying to 'State aid' generally to 'financial assistance competitively awarded by the State,' with specific exclusions for fair share housing programs, shared services/consolidation programs, multi-municipality joint applications, and programs open to non-municipal entities. Transitional Aid to Localities funds are explicitly excluded.

A new section requires DCA to publish on its website a list of qualifying municipalities ordered in three tier categories based on the impact and amount of changes relative to planning areas, updated quarterly. All State agencies awarding competitively-awarded financial assistance must use this list to establish award preferences.

A new section (Section 11) was added detailing the special reexamination process, listing ten specific housing strategies: accessory dwelling units, two-unit dwellings, three-unit dwellings, eliminating/reducing off-street parking requirements, eliminating/reducing minimum lot size, manufactured housing in single-unit zones, multi-unit or mixed-use in commercial zones, multi-unit on at least 10 percent of developable land, higher density near transit stops, and eliminating/reducing minimum dwelling unit size requirements.

New reporting requirements were added: planning boards must send reports to the Division of Local Planning Services, Office of Planning Advocacy, and county planning board; notice must be sent to registered military facility commanders and adjoining municipal clerks; and municipalities must transmit revised ordinances to DCA within 45 business days of adoption.

DCA is now required to adopt rules specifying: types and number of housing strategies appropriate based on planning region per the State Development and Redevelopment Plan; a range of values for the financial assistance preference based on additional units permitted and strategies adopted; and a housing siting and best practices guide (replacing the earlier 'model ordinance provisions in the form of templates').

New definitions were added for 'Department,' 'Grant or other type of competitively-awarded financial assistance,' and 'State agency.' The definition of competitively-awarded financial assistance includes but is not limited to the Neighborhood Preservation Program.

The eligibility standard changed from municipalities that 'thereby increased the number of housing units permitted for development' to those that 'reasonably increased the rate of housing units permitted for development.' This applies across all incentive provisions including transportation funds and school aid percentage increases.

A new section amending C.18A:7G-13 was added providing that the State share for school facilities projects may be increased by no more than 10 percent for municipalities that have amended their plans, subject to availability of new funding through State or federal appropriations or voter-approved school construction bonds. It also establishes financing authority responsibilities, agreement requirements, maintenance reserve fund requirements, and SDA district eligibility/capacity determinations.

The one-time grant provision (C.18A:7G-15) was modified to add that the 10 percent district aid percentage increase is subject to availability of new funding through State or federal appropriations or voter-approved bonds, and that the resulting district aid percentage shall not be less than 44 percent.

The Transportation Trust Fund preference was changed from being 'within the schedule of all other criteria for prioritization' to being 'in conformance with the criteria established by the Department of Community Affairs pursuant to section 2,' making DCA the central authority for setting the standard.