ASSEMBLY, No. 717
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblyman R. SMITH
An Act concerning water resources and water quality, establishing a New Jersey Clean Water Trust Fund, imposing a tax on water consumption, and supplementing Title 58 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known, and may be cited, as the "New Jersey Clean Water Trust Fund Act."
2. The Legislature finds and declares that New Jersey, already the most densely populated and highly industrialized state in the nation, continues to experience deterioration of its water resources; that such resources, by virtue of their capacity to sustain substantial reserves of potable water, afford flood protection, serve as habitat for countless animal, bird, and plant species, purify the air, provide recreational opportunities, and otherwise promote the environment necessary for a high quality of life, and constitute not only an invaluable and irreplaceable asset to the present citizens of New Jersey, but also, a trust for future generations; that as the steward of that trust, it is incumbent upon the State to commit itself to the preservation in perpetuity of those resources indispensable to the continued supply of clean water and to the health and welfare of its citizens.
The Legislature further finds that New Jersey is eligible to receive more than $1 billion in federal funds for water resources projects authorized pursuant to the "Water Resources Development Act of 1986," Pub.L.99-662; that these projects would provide for the restoration, maintenance, and protection of harbors, inlets, channels, stream banks, lakes, and shorelines through the implementation of harbor, flood control, shoreline protection, and water resources conservation projects; that the State will lose these federal funds if it fails to provide matching funds; and that New Jersey does not have a stable source of funding with which to gain access to the federal monies.
The Legislature therefore determines that a commitment to the preservation and improvement of the State's natural resources requires the adoption of a mechanism, supported by a substantial and stable source of revenue, to protect and purchase open space, watersheds, and wetlands areas, the loss or contamination of which would jeopardize the continued supply of clean water to New Jersey's citizens; provide matching funds for federally authorized projects that will enhance the economic vitality of the State and protect its citizens from natural disasters; that the State must also commit itself to the restoration of lakes and reservoirs, the establishment of new water impoundments, the interconnection of existing water supply systems, the extension of water supplies into areas with polluted groundwater supplies, the repair and restoration of dams, the prevention of salt water intrusion, flood control, shoreline protection, harbor development, and the enforcement of all laws, rules, and regulations therefor.
3. For the purposes of this act:
"Commissioner" means the Commissioner of Environmental Protection;
"Department" means the Department of Environmental Protection;
"Director" means the Director of the Division of Taxation in the Department of the Treasury;
"Fund" means the New Jersey Clean Water Trust Fund established pursuant to section 4 of this act;
"Local government unit" means a municipality, county, or other political subdivision of this State authorized to administer, protect, develop, and maintain water resources and water quality, or any agency thereof, the primary purpose of which is to administer, protect, develop, and maintain water resources and water quality;
"Taxpayer" means any person required to pay the tax imposed pursuant to sections 7 or 8 of this act, as appropriate;
"Tax period" means every calendar quarter, or any other period as may be prescribed by rule or regulation adopted by the Director of the Division of Taxation, on the basis of which any taxpayer is required to report to the director pursuant to the provisions of section 7 of this act;
"Water resources and water quality projects" mean projects to accomplish the purposes set forth in section 6 of this act.
4. a. There is established in the Department of Environmental Protection a special non-lapsing fund, to be known as the New Jersey Clean Water Trust Fund. Proceeds in the fund shall be used for State water resources and water quality projects and to provide grants and low-interest loans to assist local government units in funding water resources and water quality projects. The fund shall be administered by the department and shall be credited with all revenue collected pursuant to sections 7 and 8 of this act, all interest received on moneys in the fund, and all sums received as repayment of principal and interest on outstanding loans made from the fund.
b. The department may make and contract to make low-interest loans to local government units in accordance with and subject to the provisions of this act to finance the cost of water resources and water quality projects that the local government unit may lawfully undertake or acquire and for which the local government unit is authorized by law to borrow money. The loans may be made subject to those terms and conditions as the department shall determine to be consistent with the purposes thereof. Each loan and the terms and conditions thereof shall be subject to approval by the State Treasurer, and the department shall make available to the State Treasurer all information, statistical data, and reports of independent consultants or experts as the State Treasurer deems necessary in order to evaluate the loan.
c. To be eligible for a grant pursuant to this act, a local government unit shall demonstrate the ability to match the grant requested by generating funds in ratios specified by the department. Moneys raised for projects meeting the eligibility requirements of section 6 of this act, up to three years prior to the enactment of this act, may be eligible for State assistance under the provisions of the above mentioned matching format, but under no circumstances may funds generated prior to that time qualify for a grant under the provisions of this act.
d. Commencement of the work on any project funded pursuant to this act shall begin within two years of the effective date of the appropriation therefor or the funds that are awarded shall lapse into the fund established pursuant to this section.
5. On or before May 15 of each year, the department shall submit to the Legislature a financial plan designed to implement the financing of the projects on the project priority list approved pursuant to section 6 of this act. The financial plan shall contain an enumeration of the projects for which the department intends to provide funds and the terms and conditions of any loans or grants associated therewith, the aniticipated rate of interest per annum and repayment schedule for any loans. The financial plan shall also set forth the a complete operating and financial statement covering its proposed operations during the forthcoming fiscal year, and shall summarize the status of each project for which grants or loans have been made, and shall describe any major impediments to the accomplishment of the planned projects.
6. a. Moneys in the fund shall be used for the following purposes and no others:
(1) protection of existing water supplies through the acquisition of watershed and wetlands areas;
(2) maintenance of existing public open space, the lack of which would negatively impact water supplies;
(3) restoration of lakes and reservoirs;
(4) establishment of new water impoundments, interconnection of existing water supplies, and the extension of water supplies to areas with contaminated ground water supplies;
(5) flood control, including dam restoration and repair;
(6) prevention of salt water intrusion;
(7) enforcement of P.L.1977, c.74 (C.58:10A-1 et seq.) and all rules and regulations adopted pursuant thereto; and
(8) to provide the State share to match federal funds for projects authorized pursuant to the federal "Water Resources Development Act of 1986."
b. On or before January 15 of each fiscal year, the commissioner shall prepare and submit to the Legislature for approval a project priority list recommending the water resources and water quality projects to be funded for the upcoming fiscal year. The list shall include a description of each project, its purpose, impact, cost, and construction schedule.
c. No expenditure from the fund shall be made except by an appropriation made pursuant to law and in accordance with project priority lists developed by the department. Each such appropriation act shall clearly set forth all terms and conditions governing the expenditure of the appropriation, shall identify the specific project or projects for which the appropriation is made, and may provide such sums as may be necessary to cover the costs associated with the administration thereof.
7. a. There is imposed upon every person who holds a permit to divert water pursuant to the "Water Supply Management Act," P.L.1981, c.262 (C.58:1A-1 et seq.) a tax of $0.10 per thousand gallons of water diverted, on or after the first day of the first full fiscal quarter following enactment of P.L.199 , c. (C )(now before the Legislature as this bill), and quarterly thereafter. This subsection shall not apply to persons diverting water primarily for use on land in the farmland preservation program established pursuant to P.L.1983, c.32 (C.4:1C-12 et seq.).
b. (1) Every taxpayer shall, on or before the 20th day of the month following the close of each tax period, render a return under oath to the Director of the Division of Taxation, on such forms as may be prescribed by the director, indicating the number of gallons of water diverted, and at that time shall pay the full amount due.
(2) Every taxpayer shall, within 30 days of the effective date of this act, register with the director on forms prescribed by the director.
c. If a return required by this act is not filed, or if a return when filed is incorrect or insufficient in the opinion of the director, the amount due shall be determined by the director from such information as may be available. Notice of the determination shall be given to the taxpayer. The determination shall finally and irrevocably fix the amount due, unless the person on whom it is imposed, within 30 days after receiving notice of such determination, shall apply to the director for a hearing, or unless the director on his own motion shall redetermine the same. After the hearing the director shall give notice of his determination to the person on whom the tax is imposed.
d. Any taxpayer who fails to file a return when due or to pay any tax when it becomes due, as herein provided, shall be subject to such penalties and interest as provided in the State Tax Uniform Procedure Law, R.S.54:48-1 et seq. If the Division of Taxation determines that the failure to comply with any provision of this section was excusable under the circumstances, it may remit that part or all of the penalty as shall be appropriate under the circumstances.
e. The director shall deposit all revenues collected pursuant to this section in the New Jersey Clean Water Trust Fund created pursuant to section 4 of this act.
f. In addition to the other powers granted to the director in this section, the director is authorized:
(1) To delegate to any officer or employee of his division those of his powers and duties as the director deems necessary to carry out efficiently the provisions of this section, and the person to whom the power has been delegated shall possess and may exercise all of these powers and perform all of the duties delegated by the director;
(2) To prescribe and distribute all necessary forms for the implementation of this section.
g. The tax imposed by this section shall be governed in all respects by the provisions of the State Tax Uniform Procedure Law, R.S.54:48-1 et seq., except only to the extent that a specific provision of this section may be in conflict therewith.
8. Every commercial and industrial property taxpayer who takes or impounds water from a river, stream, lake, pond, aquifer, well, or underground source or other waterbody, whether or not the water is returned thereto, consumed, made to flow into another stream or basin, or discharged elsewhere, but who is not required to apply for a water diversion permit pursuant to P.L.1981, c.262, shall submit to the tax collector of the municipality wherein it is located, with its quarterly tax return, an estimate of the number of gallons of water it has taken or impounded, and shall pay to the tax collector of that municipality an amount equal to $0.10 for each thousand gallons. The tax collector shall forward all revenues so collected to the Director of the Division of Taxation for deposit in the New Jersey Clean Water Trust Fund. This section does not apply to waters taken or impounded primarily
for use on lands in the farmland preservation program pursuant to P.L.1983, c.32 (C.4:1C-12 et seq.).
9. The department and the director shall, as appropriate, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations to effectuate the purposes of this act.
10. This act shall take effect 60 days following enactment.
STATEMENT
This measure would establish a New Jersey Clean Water Trust Fund, to be administered by the Department of Environmental Protection. Monies in the fund would be derived from a tax on water consumption equal to 10 cents per thousand gallons. A tax of 1 cent is already imposed pursuant to the State's "Safe Drinking Water Act" but only applies to public water systems. The tax imposed pursuant to this bill would extend to other water users, such as industrial and commercial establishments. Farmers would be exempt under this bill. The bill would raise an estimated $214 million per year.
The monies in the New Jersey Clean Water Trust Fund would be used by the State to provide loans and grants to municipalities, counties, and authorities for water resources and water quality projects. Projects which protect existing water supplies through the acquisition of watershed and wetlands areas; maintain existing public open space; restore lakes and reservoirs; establish new water impoundments, interconnect existing water supplies, and extend water supplies to areas with contaminated ground water; control flooding, including the restoration and repairs of dams; prevent salt water intrusion; enforce rules and regulations adopted pursuant to the New Jersey "Water Pollution Control Act"; and provide the State match for federal projects funded pursuant to the "Water Resources Development Act" would be eligible for funding pursuant to this bill.
Some of these activities have been undertaken over the years; however, funds for them have been exhausted. This bill would provide a stable and continuous source of funding for natural resource projects designed to protect the State's water resources and thereby the quality of the State's water supplies.
The "New Jersey Clean Water Trust Fund Act."