Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
Senator VIN GOPAL
District 11 (Monmouth)
Senator LINDA R. GREENSTEIN
District 14 (Mercer and Middlesex)
Co-Sponsored by:
Senators Lagana, Pou, Ruiz and Turner
SYNOPSIS
Requires public community water systems to inventory and replace lead service lines within 10 years; provides for recoupment of costs by investor-owned public water systems.
CURRENT VERSION OF TEXT
As reported by the Senate Budget and Appropriations Committee on June 17, 2021, with amendments.
An Act concerning the replacement of lead service lines and supplementing Title 58 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds that the presence of lead in drinking water represents a threat to the public health, especially the health and development of New Jersey’s children; that pipes containing lead that connect water mains to homes and other buildings, often called lead service lines, are a primary source of lead in drinking water; and that, due in part to the age of New Jersey’s housing, there does not exist a full and complete inventory of all lead service lines in the State.
The Legislature therefore declares that public water systems should fully inventory all service lines and gradually replace all lead services lines, portions of which may exist on private property; and that, given the risk to public health and the resulting social costs that lead exposure imposes upon society as a whole, it is in the public interest that each public water system be obligated to replace lead service lines, including those that exist on private property, and be authorized to recoup the costs of lead service line replacements from all subscribers of the public water system.
2. As used in this act:
“Board” means the Board of Public Utilities or any successor agency.
1“Customer” means a property owner or lessee who receives, and is required to pay, a water utility bill for water being supplied to the property.
“Distributed System Improvement Charge” means a surcharge that is imposed by an investor-owned public community water system on its customers, with the approval of the board, to enable the system to recoup the costs of non-revenue producing infrastructure improvements outside the context of a base rate case.1
“Gooseneck, pigtail, or connector” means the short section of flexible piping, usually one to two feet long, which is used to connect rigid sections of service line piping.
1“Government-owned public community water system” means a public community water system established, pursuant to law, by a political subdivision of this State or an agency or instrumentality of one or more thereof.1
“Investor-owned
public 1community1 water system” means a public 1community1 water system that is a public utility, as defined
in
R.S.48:2-13, and which is subject to the jurisdiction of the board pursuant to Title 48 of the Revised Statutes.
“Lead service line” means a 1[service line] water supply connection1 that is made of, or lined with, 1[materials containing] a material consisting of1 lead 1, and which connects a water main to a building inlet1. 1["Lead service line" shall include a] A1 lead 1pigtail, lead1 gooseneck, 1[pigtail,]1 or 1[connector] other lead fitting shall be considered to be a lead service line1, regardless of the composition of the 1[rigid sections of]1 service line 1or other portions of1 piping to which 1[they are] such piece is1 attached. 1["Lead service line" shall also include a] A galvanized1 service line 1[composed of galvanized steel] shall be considered to be a lead service line. A lead service line may be owned by the public community water system, a property owner, or both1.
1“Non-paying consumer” means the lessee or primary occupant of institutional, commercial, or residential space in a system’s service area, who does not receive, and is not required to pay, a water utility bill for water supplied to the property.
“Off-site owner” means the owner of residential, commercial, or institutional property located within the service area of a public community water system, who resides at another property, outside the service area, and who does not receive, and is not required to pay, a water utility bill for water being supplied to the owner’s property in the service area.1
“Partial replacement” means the act of replacing any service line component without replacing the entire service line.
1“Property owner” means the owner of residential, commercial, or educational institution property located within the service area of a public community water system.1
“Property1-1owner side” means the portion of a service line 1that is1 owned by a property owner.
“Public 1community1 water system” 1or “system”1 means a 1public water1 system 1[for the provision to the public of water for human consumption through pipes or other constructed conveyances, if the system] or the owner of a public water system, as that term is defined by section 3 of P.L.1977, c.224 (C.58:12A-3), which system either:1 has at least 15 service connections 1that are used by year-round residents;1 or regularly serves 1[an average of]1 at least 25 1[individuals daily at least 60 days out of the year] year-round residents1. "Public 1community1 water system" 1[shall include: (1) any collection, treatment, storage and distribution facilities under control of the operator of the system and used primarily in connection with the system; and (2) any collection or pre-treatment storage facilities not under control of the operator which are used primarily in connection with the system. "Public water system" shall also include the operator of the system. "Public water system" shall not include transient, non-community systems] includes an investor-owned public community water system1.
1[“Public water system side” means the portion of a service line owned by a public water system.]1
“Service line” means any piping, tubing, and fittings connecting a water main to a building that serves a customer of a public water system. “Service line” 1[shall include] includes1 the property1-1owner side and the 1[public water]1 system side of a service line.
1“System side” means the portion of a service line that is owned by a public community water system.1
3. a. Each public 1community1 water system in the State shall develop a service line inventory1,1 in accordance with the requirements of this section, in order to determine the existence or absence of a lead service line at each service connection in its service area. The service line inventory shall include information about service line locations and the composition of service lines at each location. The department may prescribe data management means and methods to provide for the receipt of uniform submissions of the service line inventory by public 1community1 water systems.
b. No later than 1[30] 601 days after the effective date of this act, a public 1community1 water system shall compile and submit1,1 to the department1,1 an initial count 1[of] showing1 the number of lead service lines and the number of service lines of unknown composition that are known to be present in the 1system’s1 service area 1[of the public water system], as well as the number of lead service lines that are to be replaced annually, based on the replacement rate established pursuant to paragraph (1) of subsection b. of section 5 of this act1 .
c. No later than six months after the effective date of this act, a public 1community1 water system shall submit to the department an initial service line inventory. The inventory shall include:
(1) the locations of 1all1 identified lead service lines;
(2) an indication 1[of] as to1 whether 1[the] each1 identified lead service 1[lines are] line is1 completely composed of lead or otherwise 1[meet] meets1 the definition of 1a1 lead service line;
(3) the 1[locations] location1 of 1each1 service 1[lines] line that is1 suspected to be lead;
(4) for each identified and suspected lead service line, 1an indication as to1 whether the line is owned by the public 1community1 water system, 1the1 property owner, or both;
(5) the locations and compositions of 1all1 non-lead service lines; and
(6) a separate 1[category] list1 identifying all service lines of unknown composition.
1d.1 The public 1community1 water system shall use historical building records and other available information, including data from the American Water Works Association or other industry research groups, to determine the likelihood of the presence of lead service lines in all portions of its service area1, as provided by this section1.
1[After] e. Following1 the submission of the initial service line inventory 1pursuant to subsection c. of this section1, each public 1community1 water system in the State shall continue the inventory process and utilize every reasonable method available to locate all lead service lines within its service area. This process shall include, but shall not be limited to1[,]:
(1)1 visual inspection during planned maintenance, meter replacement, and main replacement projects1[,];1 and
1(2) the solicitation and receipt of comments, complaints, and other1 input 1[that the public water system requests]1 from 1[its]1 customers 1and non-paying consumers in the service area1.
1[d.] f. (1)1 No later than one year after the effective date of this act, a public 1community1 water system shall submit1,1 to the department1,1 an updated inventory of 1service lines in1 its service 1[territory that meets the requirements of] area. The updated inventory shall contain the information required by1 subsection c. of this section1[. The updated inventory shall also contain the following information], and shall additionally include1:
1[(1)] (a) for each service line suspected of containing lead,1 supporting information detailing the 1[reasoning behind the identification of] the reasons why1 each 1such1 service line 1[identified as being suspected of containing] is believed to contain1 lead; and
1[(2)] (b)1 for each service line identified as being of unknown composition, a description detailing the steps undertaken to determine 1[if] whether1 the line contains lead.
1(2)1 The public 1community1 water system shall keep the department informed of its progress pursuant to this subsection 1[and shall continue to adhere], through the annual reports submitted pursuant1 to the provisions of section 7 of this act. If a public 1community1 water system exhausts all other methods of identifying a service line, including the use of new technologies that become available, the department may require excavation1,1 as necessary, to identify the service line.
1[e.] g.1 Beginning two years after the effective date of this act, 1and until such time as all lead service lines have been replaced in accordance with this act,1 a public 1community1 water system shall annually submit to the department:
(1) an updated service line inventory that meets the requirements of 1[subsections c. and d.] subsection f.1 of this section; and
(2) a 1[certification] statement certifying1 that the public 1community1 water system is in compliance with the provisions of this act.
1[f.] h.1 A public 1community1 water system shall provide its most recent service line inventory, upon request and at no cost, to appropriate State officials or to the local government officials of a municipality served by the public 1community1 water system. A public 1community1 water system 1[that serves more than 3,300 customers]1 shall make its most recent service line inventory available on its Internet website. 1For public community water systems serving fewer than 3,300 customers, whenever an Internet website is not available, the public community water system shall make its most recent service line inventory available in another publicly accessible location.1
4. a. No later than 30 days after submitting an initial service line inventory to the department pursuant to subsection c. of section 3 of this act, and periodically thereafter as the department may require, a public 1community1 water system shall send, to each 1[property owner and]1 customer 1and non-paying consumer1 served by a lead service line 1[or service line of unknown composition] in the service area, and to any off-site owner of property served by a lead service line in the service area1, written notice of the composition of the service line. 1[The public water system shall determine if a landlord-tenant relationship exists at the premises being notified. The public water system shall determine the names and addresses of each tenant, in order to provide the notice, by methods that shall include, but not be limited to, mailings to landlords requesting a list of tenants. The utility shall provide copies of the notice to each head of household tenant. The]
b. A1 notice 1provided pursuant to this section1 shall 1:
(1)1 be sent1,1 by certified mail, 1[in a separate mailing] to each residential, commercial, or institutional address affected by the known lead service line and addressed to the primary resident or commercial or institutional occupant thereof, as appropriate. Notice shall be sent to all affected addresses, as provided in this paragraph, regardless of whether the resident or occupant is a system customer or is a non-paying consumer;
(2) be sent, by certified mail, to each off-site owner of property affected by the known lead service line and addressed to the property owner’s last known address, as determined through the review of local property tax and other available records;
(3) be included in a mailing that is separate and distinct1 from 1[the] the water1 bill 1that is issued for the property1. The 1[notice shall be in a form and manner as determined by the department, and shall] notice shall contain large, easily readable text and be presented on distinctly colored paper or other paper that is easily distinguishable from the water billing statement; and
(4)1 include, 1[but not be limited to: information about] at a minimum: (a) a list of the lead service lines that are being used to serve the customer or non-paying consumer; (b) information describing1 the sources of lead in drinking water, including lead service lines and household plumbing; 1(c) a description of1 the health effects of lead exposure; and 1(d) the1 steps 1that system1 customers 1and non-paying consumers in the service area1 can take to reduce their exposure to lead in drinking water.
1[In the case] c. If the recipient of notice provided pursuant to this section is the owner or operator1 of 1[a] an apartment building, group home, or other1 multi-family 1or multi-unit1 dwelling, 1[until the lead service line has been replaced or identified as a non-lead service line, the landlord] such owner or operator shall provide a hard copy of the notice to each existing resident of the multi-family or multi-unit dwelling and1 shall 1additionally1 post 1a copy of1 the notice in a conspicuous location in a common area of the dwelling. The 1[landlord] owner or operator1 shall also inform each new 1[tenant of] resident of the multi-family or multi-unit dwelling, prior to their residence, about1 the existence of the lead service line 1[or service line of unknown composition],1 and 1shall1 provide each new 1[tenant] resident1 with a 1hard1 copy of the notice 1received pursuant to this section, upon the commencement of their residence. A notice posted in a common area of a multi-family or multi-unit dwelling, pursuant to this subsection, may be removed only after all of the lead service lines identified in the notice have been replaced and determined to be non-lead service lines1.
1[b.] d.1 If a public 1community1 water system serves a municipality in which the primary language of 10 percent or more of the residents is a language other than English, the public 1community1 water system shall provide the notice required pursuant to subsection a. of this section in both English and the other language 1[to the applicable property owners and customers in that municipality] spoken by residents1.
5. a. No later than 12 months after the effective date of this act, each public 1community1 water system shall submit1,1 to the department1,1 an initial plan for replacing all lead service lines within its service area. The plan shall be 1annually1 updated 1[annually and made] to be1 consistent with the annual updates to the 1[public water]1 system’s service line inventory1, which are1 required pursuant to section 3 of this act, 1and shall remain in effect1 until all lead services lines within the 1[public water]1 system's service area have been 1identified and1 replaced.
b. Each lead service line replacement plan and annual update thereto shall1:
(1)1 provide for the 1average1 annual replacement of at least 1[seven] 101 percent of all lead service lines 1that were known to, and1 identified by1,1 the public 1community1 water system on the date it 1[submits] submitted1 its initial 1service line replacement1 plan to the department 1[. In addition, each plan and update thereto shall], pursuant to subsection a. of this section;
(2)1 provide for the replacement of all lead service lines within the 1system’s1 service area 1[of the public water system],1 no later than 1[20] 101 years after the effective date of this act, regardless of whether the lines 1[are] were1 known or unknown 1[on the date] to1 the public 1community1 water system 1[submits] on the date that it submitted1 its initial plan to the department 1[. The department may require additional] pursuant to subsection a. of this section. Each public community water system in the State shall be encouraged to complete the replacement of all lead service lines in its service area within 10 years after the effective date of this act, as provided in the system’s lead service line replacement plan; however, notwithstanding the provisions of this paragraph to the contrary, the public community water system shall be authorized to continue lead service line replacement activities for a maximum period of 15 years if necessary to enable the system to fully comply with the provisions of this act;
(3) include a plan for notifying consumers of health effects and steps they may take to reduce their exposure to lead before and after any lead service line replacement; and
(4) include any other1 information1[, as it deems appropriate, to be included in each lead service line replacement plan and annual update thereto] or certifications required by the department1.
c. 1[A] (1) Except during an emergency, such as a water main or service line break, or during a water main replacement, a1 public 1community1 water system shall not1[, except during emergencies such as a water main or service line break,]1 conduct a partial replacement of a lead service line 1[, and] . In all instances,1 the public 1community1 water system shall make a good faith effort to replace the entire lead service line 1and shall conduct a partial replacement only as a last resort1 . A partial replacement of a lead service line shall not count toward the public 1community1 water system's replacement requirements pursuant to subsection b. of this section.
1(2) A public community water system shall not suspend the water service of a customer solely because of a denial of access to the property owner-side of a lead service line for the replacement of a lead service line pursuant to this act.1
d. 1(1)1 A public 1community1 water system may apply for, and the department may approve, a reasonable extension of any target or deadline set forth in this section 1[, provided that] if1 the public 1community1 water system demonstrates to the department that the extension is necessary to meet a service reliability demand or public health need, not related to lead abatement, within the system.
1[e. In the event of fiscal distress, a municipally owned] (2) A government entity that owns a1 public 1community1 water system may apply for1,1 and the department, in consultation with Division of Local Government Services in the Department of Community Affairs, may approve1,1 a reasonable extension of any target or deadline set forth in this section 1if the government-owned system demonstrates to the department that the extension is necessary because the system or the municipality is experiencing financial distress.
e. Notwithstanding the provisions of R.S.40:56-1 to the contrary, any costs incurred by a government-owned public community water system to assess or replace a lead service line pursuant to this act, excluding any portion funded by grants or other subsidies, may be borne by all of the customers of the government-owned public water system or may be assessed to a property of a property owner in the same manner as provided for the assessment of local improvements, pursuant to R.S.40:56-1 et seq., upon notice to the Director of the Division of Local Government Services in the Department of Community Affairs1.
6. a. 1[An investor-owned public water system may recoup the costs of lead service line replacements from its customers, subject to the provisions of this section. A proposal to recoup the costs of lead service line replacements shall be considered in the context of the investor-owned public water system’s next general rate case proceeding, initiated after the effective date of this act, during which the board shall consider the rate impacts of the proposed lead service line replacement plan prior to approving the proposal.] Notwithstanding the provisions of any law, rule, regulation, or order to the contrary, 100 percent of the costs associated with undertaking and funding the replacement of lead service lines pursuant to this act, excluding any portion funded by grants or other subsidies, shall be borne by all of the customers, in the State, of an investor-owned public community water system and shall be included in the investor-owned public community water system’s rate base or otherwise be recoverable from the system’s customers, in a manner determined by the board. In making a determination under this subsection, the board shall stipulate that:
(1) the proportionate share of project costs for the replacement of the system side of a lead service line may be incorporated into the rate base as capital assets of the investor-owned public community water system or may be recovered through the use of a Distributed System Improvement Charge as allowed under existing law; and
(2) the proportionate share of project costs for the replacement of the property-owner side of a lead service line, including the investor-owned public community water system's embedded cost of debt, as authorized in its most recent base rate case, shall be treated as an operation and maintenance cost, with no cost of equity additive. Costs for the replacement of property-owner side lead service lines incurred since the investor-owned public community water system’s last base rate case and incurred until all property-owner side lead service lines have been eliminated from the investor-owned public community water system shall be recoverable on a semi-annual basis through a separate lead service line expense surcharge and not imbedded into base rates.
b.1 In order to recoup the costs of lead service line replacements from its customers, 1as provided by subsection a. of this section,1 an investor-owned public 1community1 water system shall submit 1[the] to the board, for approval at its next general rate case proceeding, a petition that includes a1 proposal 1[within a petition to the board that addresses] for cost recoupment. The proposal shall contain1 the following 1information1:
(1) the estimated total cost to replace both the property1-1owner 1[sides] side1 and 1[public water] the1 system 1[sides] side1 of all lead service lines 1that lie1 within, or 1are1 connected to, the 1[investor-owned public water]1 system's service area1, including, but not limited to, the estimated total cost to evaluate service lines of unknown composition and to replace both the property-owner side and system side of any such lines that are determined to be lead service lines,1 and an estimated range for the annual cost to be incurred by the system under the system's current lead service line replacement plan;
(2) 1[a quantification of the shareholder contribution to be made in order to meet the requirements of this act;
(3)]1 the availability of grants or low interest loans and whether the investor-owned public 1community1 water system plans to use available grants or low interest loans to help the system finance or reduce lead service line replacement costs, including a detailed description of any efforts made by the system to secure such financing;
1[(4)] (3)1 the investor-owned public 1community1 water system’s proposed rate treatment of the replacement costs, including:
(a) any proposed deferred accounting treatment of the costs;
(b) the proposed rate base treatment of the costs 1, and whether and how the system is planning to effectuate system side cost recoupment through the use of a Distributed System Improvement Charge or alternate recoupment methodology approved by the board1;
(c) the proposed operations and maintenance expense treatment of the costs; and
(d) the average monthly residential bill impact of the proposed rate treatment of the costs;
1[(5)] (4)1 a description of how the replacement of lead service lines will be accomplished in conjunction with other replacement projects in the 1[investor-owned public water]1 system's service area;
1[(6)] (5)1 the estimated savings1,1 per lead service line1, that will be1 achieved by 1requiring1 the investor-owned public 1community1 water system 1[replacing], and not the1 property owner1, to replace the property-owner1 sides of lead service lines 1[instead of the property owner] in the service area1; and
1[(7)] (6)1 the 1[investor-owned public water system's proposal for] means and methods that will be used by the system to1:
(a) 1[communicating the system's] inform all system customers and non-paying consumers in the system’s service area about the system’s lead service line replacement1 plan 1[to replace a lead service line to a property owner and customer]1; and
(b) 1[documenting a property owner's or] document each1 customer's consent1,1 or lack of consent1,1 to the replacement of a lead service line.
1[b.] c.1 Before an investor-owned public 1community1 water system may 1be authorized by the board to1 recoup the costs of lead service line replacements from its customers1,1 pursuant to 1[subsection a. of]1 this section, the board shall ensure that the department has 1[approved] received1 the 1[investor-owned public water]1 system's 1[plan for the replacement of the lead service lines required pursuant to section 5 of this act] inventory, as required by section 3 of this act1.
7. No later than December 31 of each year, a public 1community1 water system shall submit to the department, in a form and manner to be determined by the department, a report detailing the public 1community1 water system’s progress in replacing lead service lines pursuant to this act. A public 1community1 water system 1[that serves more than 3,300 customers]1 shall make its report available on its Internet website. 1If an Internet website is not available, the public community water system shall make its report available in another publicly accessible location.1 If the department determines, based on the information provided by the public 1community1 water system 1pursuant to this section1, that the 1[public water]1 system has completed the replacement of all lead service lines within the 1[public water]1 system’s service area, the 1[public water]1 system shall no longer be required to submit a report pursuant to this section.
8. a. The Department of Environmental Protection may adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations necessary to implement the provisions of this act.
b. The Board of Public Utilities may adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations necessary to implement the provisions of this act.
1c. The Department of Environmental Protection and the Board of Public Utilities shall consult with one another and with the Division of Local Government Services in the Department of Community Affairs when adopting rules and regulations pursuant to this section.1
9. This act shall take effect immediately.