ASSEMBLY AGRICULTURE AND WASTE MANAGEMENT COMMITTEE
STATEMENT TO
ASSEMBLY COMMITTEE SUBSTITUTE FOR
ASSEMBLY, No. 50
STATE OF NEW JERSEY
DATED: JUNE 12, 1997
The Assembly Agriculture and Waste Management Committee favorably reports an Assembly Committee Substitute for Assembly Bill No. 50.
In response to the May 1, 1997 Atlantic Coast decision, in which the U.S. Court of Appeals affirmed the U.S. District Court's findings that New Jersey's solid waste management system is unconstitutional insofar as it discriminates against out-of-state solid waste disposal facilities, the Assembly Committee Substitute for Assembly Bill No. 50 would revise the solid waste management statutes and provide a mechanism for the recovery of the environmental investment costs incurred by public authorities and counties in implementing State-mandated district solid waste management plans. The bill would make numerous changes to existing law so that the statutes conform to the new solid waste management system established under the bill.
The Recovery of Environmental Investment Costs
The bill authorizes every public authority and county to establish and implement a system to calculate, charge and collect environmental investment charges (EIC's) as may be necessary to recover the environmental investment costs incurred by the public authority or county.
"Environmental investment costs" are any expenses of a public authority or county related to: (1) the planning, acquisition or construction of solid waste facilities, including debt service on bonds and refinancing bonds issued prior to the bill's effective date to finance solid waste facilities, including abandoned or canceled solid waste facility projects; (2) the fulfillment of interdistrict agreements or lawfully executed solid waste disposal contracts; (3) the establishment and implementation of solid waste management programs adopted prior to the bill's effective date; (4) the payment of solid waste taxes or other payments mandated by State law, rule, directive or order; or (5) the payment of host municipality benefits.
"Environmental investment costs" do not include the debt service on the unexpended balance of bonds or refinancing bonds authorized but not expended prior to the bill's effective date.
EIC's may be collected by a public authority, or county that has assumed responsibility for the collection of EIC's, as follows: (1) as a portion of the tipping fee charged to users for solid waste disposal at the district solid waste facility; (2) as a separate bill to all previous users of the district solid waste facility; (3) as a separate bill to the constituent municipality or county for inclusion as an item in the municipal budget or county budget, or any combination thereof, for the payment of environmental investment costs; or (4) in any other manner reasonably established by the public authority or county.
A "district solid waste facility" is the solid waste facility that is designated by a public authority or county in its adopted district solid waste management plan as approved by the Department of Environmental Protection (DEP) prior to the bill's effective date as the solid waste landfill, incinerator or transfer station to which solid waste generated within the county is transported for final disposal, or transfer for transportation to an offsite solid waste facility or designated out-of-state disposal site for disposal, as appropriate.
A public authority or county may collect EIC's from every responsible solid waste generator included within its jurisdiction, regardless of whether a particular responsible solid waste generator utilizes the district solid waste facility for solid waste disposal, through the implementation of a unit charge based upon: (1) the average annual amount of solid waste generated by a particular responsible solid waste generator, as measured in tons or cubic yards, during the previous five years; (2) the average annual amount of solid waste accepted for disposal at the district solid waste facility from a particular responsible solid waste generator, as measured in tons or cubic yards, during the previous five years; or (3) any other criteria reasonably established by the public authority or county.
A "responsible solid waste generator" is defined as any property owner, tenant or occupant of any single-family residential dwelling or multi-family multiple dwelling, or the owner, tenant or occupant of any industrial, commercial or institutional building or structure located within the boundaries of any municipality, who generates solid waste at those premises.
A public authority or county may also collect EIC's from every constituent municipality that utilizes or has previously utilized the district solid waste facility, through the implementation of an assessment against constituent municipalities based upon: (1) the average annual aggregate amount of solid waste generated within the boundaries of a particular constituent municipality from all sources of generation, as measured in tons or cubic yards, during the previous five years; (2) the average annual amount of solid waste accepted for disposal at the district solid waste facility from all sources of generation within the boundaries of a particular constituent municipality, as measured in tons or cubic yards, during the previous five years; or (3) any other criteria reasonably established by the public authority or county.
A public authority may collect EIC's from the governing body of the county within which the district solid waste facility is located, through the implementation of an assessment by the public authority against the host county based upon: (1) the average annual aggregate amount of solid waste generated within the boundaries of the county from all sources of generation, as measured in tons or cubic yards, during the previous five years; (2) the average annual amount of solid waste accepted for disposal at the district solid waste facility from all sources of generation within the boundaries of the county, as measured in tons or cubic yards, during the previous five years; or (3) any other criteria reasonably established by the public authority.
For the purposes of calculating EIC's, "solid waste" refers to any nonhazardous solid waste derived from all sources of generation within a county or municipality, including Type 10 Municipal (commercial, household or institutional); Type 13 Bulky waste; Type 13C Construction and demolition waste; Type 23 Vegetative waste; Type 25 Animal and food processing wastes; and Type 27 Dry industrial waste, all as identified and defined in rules and regulations adopted by the DEP pursuant to the "Solid Waste Management Act," P.L.1970, c.39 (C.13:1E-1 et seq.). One exception is that "Type 27 Dry industrial waste" would not include the residue from the operations of a scrap metal shredding facility.
Any public authority or county that intends to establish a system for the collection of EIC's must hold a public hearing thereon at least 20 days after notice of the proposed system has been mailed to the clerk of each constituent municipality within the host county and after publication of the notice of the proposed system and the time and place of the public hearing in at least two newspapers of general circulation within the host county. The publication must include notice of the date, time and place of the public hearing, notice of the place at which written summaries of the proposed system will be available for public inspection, and the times during which such inspection will be permitted.
At the public hearing, the public authority or county would be required to explain the proposed billing mechanism for the collection of EIC's and must answer questions raised by prospective payers, including responsible solid waste generators, constituent municipalities and other interested parties. During the public hearing, the public authority or county must identify and explain the environmental investment costs to be recovered through the imposition and collection of EIC's.
The public authority or county would be required to produce a verbatim record of the public hearing. The record of the public hearing must be kept open for a period of seven days following the conclusion of the hearing, during which time interested parties may submit written statements to be included in the hearing report. The public authority or county must also prepare a written hearing report, which would include a written summary of the proposed system, the verbatim record of the public hearing, written statements submitted by interested parties, and a statement prepared by the public authority or county summarizing the major issues raised at the public hearing and the public authority's or county governing body's specific responses to those issues. The public authority or county must make copies of the hearing report available to interested parties, upon request, at a cost not to exceed the actual cost of printing or copying.
Further, the governing body of a public authority or county that intends to establish a system for the collection of EIC's must adopt an ordinance or a resolution, as appropriate, establishing the proposed system. The ordinance or resolution may be introduced at the first meeting of the governing body of the public authority or county held after the public hearing on the proposed system, and shall acknowledge that the law requires a public hearing to be held prior to the implementation of the system.
Every public authority, or county that has assumed responsibility for the collection of EIC's, must submit a report to the Local Finance Board in the Department of Community Affairs related to the environmental investment costs of the public authority or county within six months of the bill's effective date and at least once every twelve months thereafter. The report would summarize individual schedules of outstanding debt related to the environmental investment costs incurred by the public authority or county, including the status of: installment requirements for the payment of interest and principal on bonds; plans to refund or refinance bonds; an updated environmental investment cost recovery analysis; and proposed debt service coverage options.
The governing body of any constituent municipality may negotiate an agreement with the public authority or county on the preferred billing mechanism for the collection of EIC's, or establish and implement a separate billing mechanism for the collection of EIC's, including as an assessment on all taxable property within the municipality and collected as a separate item on the municipal tax bill. To the maximum extent practicable, the governing body of the constituent municipality and the public authority or county must employ a standardized billing mechanism.
Responsibilities of Municipalities
The bill would affirm the long-standing right of municipalities, at their discretion, to provide for the collection or disposal of all, or any portion of, the nonhazardous solid waste generated within their municipal boundaries. Any municipal governing body that prefers to delegate responsibility for regular (weekly) solid waste collection service to the private sector may permit responsible solid waste generators to contract with solid waste collectors on an individual basis.
A municipal governing body may establish and operate a municipal service system or establish a municipal contract system for solid waste collection by entering into a contract for regular solid waste collection service with a solid waste collector pursuant to the provisions of the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.). Any municipal service system or municipal contract system established by a municipal governing body must provide regular solid waste collection service to all single-family residential households and may provide such service to multi-family residential households within the municipality. In the case of any other source of generation, responsible solid waste generators may be furnished regular solid waste collection service by the municipal governing body, allowed to contract with solid waste collectors for regular solid waste collection service on an individual basis, or permitted to directly transport the solid waste generated at their premises for disposal at a specified solid waste facility or designated out-of-state disposal site.
A municipal governing body may: (1) enter into a municipal solid waste services agreement with any private firm, public authority or county for the use of a district solid waste facility for the disposal of solid waste generated within its municipal boundaries pursuant to the provisions of the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.); (2) enter into a contract for solid waste disposal with any person lawfully providing solid waste disposal service pursuant to the provisions of the "Local Public Contracts Law"; (3) permit responsible solid waste generators not covered under the provisions of a municipal solid waste services agreement, or a solid waste disposal contract, as the case may be, to contract with any person lawfully providing solid waste disposal service on an individual basis; (4) allow responsible solid waste generators to directly transport the solid waste generated at their premises for disposal at a specified solid waste facility or designated out-of-state disposal site; or (5) any combination thereof.
After negotiating a municipal solid waste services agreement, but prior to its implementation, the municipal governing body must notify all responsible solid waste generators within the municipality of the provisions of the agreement. The municipal governing body may fulfill the notification requirement by placing an advertisement in a newspaper circulating in the municipality, posting a notice in public, including a notice with other official notifications periodically mailed to local taxpayers, or any combination thereof, as the municipal governing body deems necessary and appropriate. The municipal solid waste services agreement would take effect 20 days thereafter.
A municipal governing body that has negotiated a municipal solid waste services agreement must submit a copy of the agreement to the DEP for public inspection. The Commissioner of DEP would maintain on file for public inspection copies of any municipal solid waste services agreement received by the DEP, and the DEP must provide a copy to any person upon request at a cost not to exceed the cost of reproduction.
Any municipal solid waste services agreement may include a provision authorizing the person, public authority or county to calculate, charge and collect differential solid waste charges for the solid waste accepted for disposal at the district solid waste facility from the constituent municipality, provided that the differential solid waste charges are to be calculated, charged and collected from the constituent municipality in lieu of the payment of EIC's.
As a condition of a municipal solid waste collection contract, a municipal governing body that has negotiated a municipal solid waste services agreement may require the solid waste collector to utilize the district solid waste facility that has been selected by the municipality for the disposal of solid waste generated within its municipal boundaries.
Similarly, as a condition of a contract for regular solid waste collection service, a municipal governing body that has entered into an out-of-state disposal contract may require the solid waste collector to utilize the designated out-of-state disposal site that has been selected by the municipality under the provisions of the solid waste disposal contract.
The bill would also affirm the right of municipal governing bodies to grant or withhold consent to solid waste collectors seeking to engage in private solid waste collection activities within their jurisdictions. In this regard, a municipal governing body may establish and charge reasonable fees in connection with permitting solid waste collectors to engage in private solid waste collection services within its municipal boundaries, provided that any fees to be charged for such municipal consent could only reflect the governing body's administrative costs.
Any municipal governing body that permits solid waste collectors to engage in private solid waste collection services within its municipal boundaries must submit, at least once every twelve months, a report to the DEP related to the identity of every person engaging in solid waste collection activities within the municipality.
As a condition of municipal consent to engage in private solid waste collection within its municipal boundaries, a municipal governing body may require any solid waste collector providing regular solid waste collection service to responsible solid waste generators on an individual basis to: (1) assist the municipal governing body in the collection of EIC's; or (2) transport every truckload of solid waste originating within the municipality to the district solid waste facility for weighing and inspection, provided that the solid waste collector is not utilizing that district solid waste facility for solid waste disposal and the public authority or county has requested the municipal governing body to do so, prior to transporting the load to the out-of-county solid waste facility or designated out-of-state disposal site to be utilized by the solid waste collector for solid waste disposal. The latter requirement is intended to assist a public authority or host county in determining the aggregate amount of solid waste disposed of from all sources of generation within constituent municipalities for the purposes of calculating, charging and collecting EIC's.
Responsibilities of Counties and Public Authorities
Under the bill, the statutory responsibility for district (countywide) solid waste management planning as set forth in the "Solid Waste Management Act," P.L.1970, c.39 (C.13:1E-1 et seq.) is retained by the counties (or public authorities that have been designated as the agency responsible for implementing the district solid waste management plan). However, the current (and now unconstitutional) system whereby a county or public authority could compel constituent municipalities and local haulers to utilize the district solid waste facility under the State's waste flow orders is replaced by a voluntary, market-based system. Under the bill, only constituent municipalities that have voluntarily negotiated municipal solid waste services agreements (or responsible solid waste generators or solid waste collectors who have independently made similar contractual arrangements) would regularly utilize district solid waste facilities.
The "Solid Waste Management Act" is amended to clarify and emphasize that the district solid waste management plans must be revised so that they do not discriminate against the use of out-of-state disposal sites. In so doing, the revised district plans may also encourage the maximum practicable use of all existing district solid waste facilities for the disposal of locally-generated solid waste.
The district solid waste management plans must be revised to provide for county or municipal solid waste disposal strategies which include the use of: (1) the district solid waste facility located within the county; (2) a district solid waste facility located in another county; (3) any other solid waste facility located within the county; (4) any other solid waste facility located outside of the county; or (5) a designated out-of-state disposal site which is permitted by the appropriate state regulatory agency having jurisdiction over solid waste management to accept solid waste for disposal and in compliance with all relevant Federal or state laws, rules or regulations.
The "Solid Waste Management Act" is further amended to prohibit the Commissioner of DEP from rejecting or requiring the modification of any district solid waste management plan amendment providing for the long-term use of a designated out-of-state disposal site for the disposal of solid waste generated within the county solely on the grounds that the designated disposal site is located out-of-state. This provision addresses the State's current so-called "self-sufficiency" policy, whereby historically DEP has required every county to be self-sufficient with respect to the availability of long-term (10 years or more) solid waste disposal capacity within its borders, which has also been held to be unconstitutional.
Other amendments to existing law strengthen the landfill closure requirements of existing statutory law by providing that every owner or operator of a sanitary landfill facility has a continuing responsibility to ensure that the rates or charges received at the sanitary landfill facility will provide sufficient revenues for the closure and post-closure costs likely to be incurred by the sanitary landfill facility. Every owner or operator of a sanitary landfill facility must submit a closure plan prepared in accordance with all relevant rules and regulations to the DEP for approval. In order to ensure the integrity of financial planning for closure, every owner or operator of a sanitary landfill facility must submit a financial plan addressing all aspects of closure to the DEP for approval. After a hearing held pursuant to the "Administrative Procedure Act," the DEP may revoke or suspend the registration issued to the owner or operator of any sanitary landfill facility who has refused or failed to ensure that sufficient funds are available for the closure and post-closure costs of the sanitary landfill facility as provided in the bill.
Any municipal solid waste services agreement entered into between a municipality and a private firm, public authority or county for the use of a district solid waste facility must include provisions concerning the solid waste disposal charges received at the facility, including any portion of the charges allocated for EIC's, and may include arrangements for the provision of optional solid waste services by the public authority or county, including the collection, processing, disposition or marketing of designated recyclable materials under the State's mandatory recycling law, or a district household hazardous waste management program.
A public authority or county must provide public notice of any renegotiation of a "McEnroe Act" contract (for the provision of resource recovery services) previously awarded to a qualified vendor pursuant to the provisions of P.L.1985, c.38 (C.13:1E-136 et al.). Upon the renegotiation of a "McEnroe Act" contract, but prior to its implementation, the public authority or county must notify all responsible solid waste generators within the boundaries of each county to be served under the terms and conditions of the renegotiated contract.
Any public authority or county that has renegotiated a "McEnroe Act" contract must submit a copy of the contract or agreement to the DEP for public inspection. The Commissioner of DEP must maintain on file in the department for public inspection copies of any renegotiated "McEnroe Act" contract received by the DEP. The DEP would provide a copy to any person upon request at a cost not to exceed the cost of reproduction.
Any person, public authority or county that entered into an interdistrict agreement with another public authority or county for the shared use of a district solid waste facility prior to the bill's effective date may provide for a reduction of the solid waste charges due and payable under the terms and conditions of the interdistrict agreement for the out-of-county solid waste accepted for disposal at the district solid waste facility from the sending public authority or county whenever the sending public authority or county agrees to the payment of EIC's on a voluntary basis.
The bill further authorizes any public authority or county to establish and implement a program for the inspection of all solid waste collection activities or solid waste disposal operations and a program to enforce the provisions of the system established for the collection of EIC's, or the provisions of any interdistrict agreements, contracts or instruments executed in connection with the implementation of a district solid waste management plan or use of any district solid waste facility.
Every public authority or county is also authorized to exercise the enforcement powers conferred on local boards of health or county health departments pursuant to the provisions of the "County Environmental Health Act," P.L.1977, c.443 (C.26:3A2-21 et seq.) and section 9 of P.L.1970, c.39 (C.13:1E-9), and may exercise these powers directly in the manner provided by these acts to local boards of health or county health departments, for the purposes of enforcing the system established for the collection of EIC's.
Deregulation of Solid Waste Disposal Charges
The tipping fees at most of the solid waste facilities developed by counties or public authorities in New Jersey are expensive relative to out-of-state disposal facilities. In order to compete successfully with out-of-state solid waste disposal facilities for the required volumes of municipal solid waste, public authorities or counties that operate solid waste facilities must offer disposal services to current and future users at the least possible cost. In order to remain competitive and financially viable in the emerging free market solid waste management system, while continuing to fulfill existing "put or pay" contractual obligations, counties and public authorities must have the requisite flexibility and unambiguous legal authority to lower the tipping fees at their solid waste facilities virtually at will. In this respect, the existing system of public utility-style rate regulation of the tipping fees that may be charged at New Jersey's solid waste facilities is ill-suited. To remedy this problem, the bill provides for the immediate deregulation of all solid waste disposal tipping fees in the State.
Although the DEP would no longer regulate the tipping fees charged at solid waste facilities, the DEP would continue to exercise supervision and regulatory scrutiny over the public utility aspects of both solid waste collection and solid waste disposal. In this regard, any person engaging in solid waste collection or solid waste disposal activities must still have a valid certificate of public convenience and necessity issued by the DEP. Further, every person engaging in the business of solid waste collection or solid waste disposal must continue to pay an annual assessment to the DEP to enable the department to perform its statutory duties under P.L.1970, c.40 (C.48:13A-1 et seq.) and other parts of Title 48 with respect to supervising the solid waste industry.
Miscellaneous Provisions
Amendments to the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.) provide that municipal solid waste collection contracts and contracts for the collection or disposition of recyclable material may not exceed five years, while contracts for solid waste disposal services may be entered into for up to twenty years.
The bill authorizes the governing body of any county to negotiate with the owner or operator of a district solid waste facility pursuant to the provisions of the "Local Lands and Buildings Law," P.L.1971, c.199 (C.40A:12-1 et seq.) for the purchase of an interest in real property and acquisition thereby of so-called "air rights" for the disposal of solid waste generated within the boundaries of the county for a period not to exceed 20 years.