The function of the State Transfer of Development Rights Bank is to support development potential transfers in municipalities that have adopted development transfer ordinances. Transfer of development rights banks function as a clearinghouse to connect credit sellers and purchasers and can be used as a buyer or seller of last resort when credit holders are otherwise unable to transfer them. As TDR is market-based, the actions of the bank must not impede private market transactions.

In New Jersey, municipalities that have established development transfer ordinances may use the State TDR Bank, establish their own transfer of development rights bank or use a county managed bank, if available, to facilitate transfers within their jurisdiction.

State Transfer of Development Rights Bank Act