ASSEMBLY, No. 771
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblywoman BUONO
An Act concerning underground storage tanks, supplementing Title 58 of the Revised Statutes, and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Authority" means the New Jersey Economic Development Authority established pursuant to P.L.1974, c.80 (C.34:1B-1 et seq.).
"Closure" means the permanent elimination from service of any underground storage tank by removal or abandonment in place.
"Commissioner" means the Commissioner of Environmental Protection.
"Department" means the Department of Environmental Protection.
"Discharge" means an intentional or unintentional action or omission resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, or dumping or a hazardous substance onto the land or into the waters of the State.
"Eligible project costs" means the reasonable costs for work or services required to effectuate closure, or remediation an upgrade, which work or services are eligible for payment from the fund.
"Facility" means one or more underground storage tanks under single ownership at a common site.
"Fund" means the Underground Storage Tank Closure, Upgrade and Remediation Fund created pursuant to section 2 of this act.
"Hazardous substances" means hazardous substances as defined pursuant to section 2 of P.L.1986, c.102 (C.58:10A-22).
"Operator" means any person in control of, or having responsibility for, the daily operation of a facility.
"Owner" means any person who owns a facility whether or not there are any operational underground storage tanks at the facility.
"Underground storage tank" means a tank of any size, including appurtenant pipes, lines, fixtures, and other related equipment, that normally and primarily stores hazardous substances, the volume of which, including the volume of the appurtenant pipes, lines, fixtures and other related equipment, is 10% or more below the ground. "Underground storage tank" does not include:
(1) Septic tanks installed in compliance with regulations adopted by the department pursuant to "The Realty Improvement Sewerage and Facilities Act (1954)," P.L.1954, c.199 (C.58:11-23 et seq.);
(2) Pipelines, including gathering lines, regulated under the "Natural Gas Pipeline Safety Act of 1968," Pub.L.90-481 (49 U.S.C. §1671 et seq.), the "Hazardous Liquid Pipeline Safety Act of 1979," Pub.L.96-129 (49 U.S.C. §2001 et seq.), or intrastate pipelines regulated under State law;
(3) Surface impoundments, pits, ponds, or lagoons, operated in compliance with regulations adopted by the department pursuant to the "Water Pollution Control Act," P.L.1977, c.74 (C.58:10A-1 et seq.);
(4) Stormwater or wastewater collection systems operated in compliance with regulations adopted by the department pursuant to the "Water Pollution Control Act";
(5) Liquid traps or associated gathering lines directly related to oil or gas production and gathering operations;
(6) Tanks situated in an underground area, including, but not limited to, basements, cellars, mines, drift shafts, or tunnels, if the storage tank is situated upon or above the surface of the floor, or storage tanks located below the surface of the ground which are equipped with secondary containment and are uncovered so as to allow visual inspection of the exterior of the tank; and
(7) Any pipes, lines, fixtures, or other equipment connected to any tank exempted from the provisions of this act pursuant to paragraphs (1) through (6) above.
"Remediation" means all necessary actions to investigate and clean up any known, suspected, or threatened discharge of a hazardous substance pursuant to rules and regulations of the department.
"Upgrade" means the replacement of an underground storage tank, or the improvement of an underground storage tank, designed to meet the construction, installation, and operation standards for new and existing underground storage tanks as provide for in P.L.1986, c.102 (C.58:10A-21 et seq.).
2. a. There is created in the New Jersey Economic Development Authority a special nonlapsing fund to be known as the "Underground Storage Tank Closure, Upgrade and Remediation Fund." The fund shall be administered by the authority and shall be the depository for:
(1) such moneys as are appropriated by the Legislature;
(2) sums received as repayment of principal and interest on outstanding loans made from the fund;
(3) all non-refundable application fees collected pursuant to section 3 of P.L. , c. (C. )(pending in the Legislature as this bill); and
(4) any return on investment of moneys deposited in the fund.
b. Moneys in the fund shall be allocated and used to provide loan guarantees to owners or operators of underground storage tanks which are required to meet the upgrade standards for underground storage tanks established pursuant to 42 U.S.C. §6991 et seq., or P.L.1986, c.102 (C.58:10A-21 et seq.), to close an underground storage tank, or to perform a remediation where a hazardous substance has been discharged, is suspected of having been discharged, or is threatening to be discharged, from an underground storage tank. Loan guarantees shall be made in accordance with criteria and other requirements adopted by the authority pursuant to sections 3 and 4 of P.L. , c. (C. ) (pending in the Legislature as this bill).
c. The authority may use moneys in the fund for actual costs incurred in administering the fund, except that the amount of moneys from the fund that may be used for actual costs incurred in administering the fund shall not exceed in any fiscal year 3% of the total dollar amount set aside in reserve for the purpose of loan guarantees by the fund in that year. The 3% shall be in addition to such other moneys as may be appropriated for the administration of the fund by the Legislature.
3. a. The authority may use moneys in the fund to provide loan guarantees for up to 100% of eligible project costs, as determined by the authority, based upon the lowest responsible bid.
b. A qualified applicant for a loan guarantee from the fund shall be awarded a loan guarantee by the authority upon the availability of sufficient moneys in the fund. Priority rankings shall be based upon the date an application for a loan guarantee is filed with the authority. If a loan guarantee application is determined to be incomplete by the authority, an applicant shall have 30 days from the date of receipt of written notification of incompleteness to file such additional information as may be required by the authority for a completed application. If an applicant fails to file the additional information within the 30 days, the filing date for that application shall be the date that such additional information is received by the authority. An application shall be deemed complete when all the information required by the authority and a non-refundable application fee paid in full is received by the authority. The authority shall adopt an application fee schedule based upon the loan guarantee amount requested by an applicant, with the amount of the fee not to be less than $250 nor more than $750, except that if an application is withdrawn by an applicant, the authority shall refund a portion of the fee after deducting therefrom the actual costs incurred by the authority in processing the application up to the time of the withdrawal.
c. An applicant shall have 90 days from receipt of notice of approval of a loan guarantee application to submit to the authority an executed contract for the closure, upgrade, or remediation that is consistent with the terms and conditions of the loan guarantee. Failure to submit an executed contract within the allotted time, without good cause, may result in an alteration of an applicant's priority ranking.
d. (1) Notwithstanding the priority ranking requirements of subsection b. of this section, the authority may accord a preferential ranking to a completed application of an applicant who has not previously received a loan guarantee from the fund over an applicant who has previously received a loan guarantee from the fund, whenever the authority determines that fund assets for the fiscal year are insufficient to guarantee all qualified applications.
(2) Notwithstanding the priority ranking requirement of subsection b. of this section, the authority may accord a preferential ranking to a completed application for an applicant for the eligible project costs that involves an emergency situation, as defined by the authority, that requires immediate action in response to a known, suspected, or threatened discharge from an underground storage tank.
e. No loan shall be guaranteed for an owner or operator of a facility:
(1) unless the facility is properly registered with the department pursuant to section 3 of P.L.1986, c.102 (C.58:10A-23), as applicable, and all fees or penalties due and payable on the facility to the department have been paid, or the nature or amount of the fee or penalty is contested in accordance with law; or
(2) if the owner or operator knowingly provides false information or withholds information that would materially affect the issuance of a loan guarantee or the terms and conditions of a loan guarantee.
f. If a remediation of a release of a hazardous substance from a facility for which an application for a loan guarantee is made is required on- or off-site of that facility, the guarantee of the loan by the fund for that facility shall be conditional upon commencement of the remediation within the time prescribed and in accordance with the rules and regulations of the department.
4. a. The authority shall adopt rules and regulations to:
(1) prescribe the application forms for loan guarantees and the procedures for filing such forms;
(2) require an operator who is applying for a loan guarantee who is not the owner of an eligible facility to provide a copy of the contractual relations between the operator and the owner, and certification that the owner approves the upgrade for which a loan guarantee is sought;
(3) if the applicant is an owner who is not the operator, require the owner to provide a copy of the contractual relations between the owner and the operator;
(4) require an applicant:
(a) to submit documentation or other information on the nature and scope of the work to be performed, cost estimates thereon, and, as available, proofs of the actual costs of all work performed; and
(b) require the applicant to demonstrate an ability to repay the amount of the loan and to provide adequate collateral to secure the amount of a loan;
(5) require loan moneys to be used only for the purposes for which the loan is made, and prohibit the assignment or encumbrance of a loan or loan payment;
(6) require a loan guarantee recipient to provide to the department, as necessary or upon request, (a) evidence that (i) loan moneys are being spent for the purposes for which the loan is made, and (ii) the owner or operator is adhering to all of the terms and conditions of the loan guarantee, (b) entry at reasonable times to the facility or facility site for which the loan guarantee is made, to determine compliance with the terms and conditions of the loan and loan guarantee, and (c) documentation concerning anticipated and actual costs;
(7) require that any remediation being undertaken due to discharge of a hazardous substance from an underground storage tank be completed in conformance with rules and regulations of the department;
(8) require an applicant to represent that during the life of the loan guarantee, the applicant will comply with all laws, and pay all required taxes, other governmental assessments, or other payments owing on the facility for which application is made, or on the loan collateral; and
(9) adopt such other requirements as may be deemed necessary to carry out the legislative purposes of the upgrade fund.
b. Information submitted as part of an application for a loan guarantee shall be a public record subject to the provisions of P.L.1963, c.73 (C.47:1A-1 et seq.). An applicant may, however, request the department to maintain the confidentiality of any information relating to the personal or business finances of the applicant.
c. In establishing requirements for applications for loan guarantees, the authority:
(1) may not impose conditions that interfere with the everyday normal operations of a loan guarantee recipient's business activities, except to the extent necessary to prevent intentional actions designed to avoid repayment of the loan, or that significantly affect the value of the loan collateral;
(2) shall strive to minimize the complexity and costs to applicants or recipients of compliance with such requirements; and
(3) shall expeditiously process all applications in accordance with a schedule established by the authority for the review thereof and the taking of final action, which schedule shall reflect the complexity of an application.
5. The department shall not take any enforcement action pursuant to section 12 of P.L.1986, c.102 (C.58:10A-32) for failure to upgrade, close or remediate an underground storage tank pursuant to P.L.1986, c.102 (C.58:10A-1 et seq.), against the owner or operator of that tank if the owner or operator had submitted an application for a loan guarantee from the fund prior to the date upon which the upgrade, closure, or remediation was required to be completed, the authority has not yet acted on the application as of that date, and the owner or operator agrees to enter into a consent agreement with the department to comply with the upgrade, closure, and remediation requirements of that act upon approval of the loan guarantee by the authority, or if the guarantee is denied, within 90 days after the denial.
6. a. Loans guarantees from the fund may only be made to persons who cannot otherwise finance the cost an upgrade, closure, or remediation because of economic hardship. Economic hardship shall be determined on the basis of the applicant's ability to obtain a loan or otherwise finance the cost of the remediation, which shall be based, among other things, upon the applicant's gross receipts and financial reserves and a demonstration that the applicant is unable to obtain a loan from institutional lenders. Loan guarantees made pursuant to P.L. ,c. (C ) (pending in the Legislature as this bill) may be made only for that amount of the eligible project costs of the remediation for which the owner or operator cannot otherwise finance.
b. The date of occurrence of a discharge shall not affect eligibility for a loan guarantee from fund; but no loan guarantee shall be made from the fund for the otherwise eligible project costs or parts thereof, completed prior to the effective date of P.L. , c. (C. ) (pending in the Legislature as this bill), or required to be completed prior to the effective date of that act pursuant to an order by, or a consent agreement entered into with, the department.
c. No loan guarantee may be made from the fund for an upgrade, closure, or remediation if a previous loan guarantee from the fund had been made for that purpose for that underground storage tank. No loan guarantee may be made from the fund for the remediation of a discharge from an underground storage tank if the initiation of the discharge occured subsequent to the upgrade of that tank.
7. The authority shall provide a joint application filing, review and approval procedure whereby a person who is eligible for a loan or grant from the Underground Storage Tank Closure, Upgrade and Remediation Fund created pursuant to section 2 of P.L. , c. (C. )(pending in the Legislature as this bill) and who is eligible for financial assistance from the hazardous discharge site remediation fund created pursuant to section 26 of P.L.1993, c.139 (C.58:10B-4) may file one application for both funds and receive a joint response from the authority that approves or disapproves the application from one or both funds.
8. a. Nothing in sections 1 through 7 of P.L. , c. (C. )(pending in the Legislature as this bill) shall be construed to:
(1) impose any liability on the State or the authority for any application made to, or approved from, the fund and the extent of the State's or authority's responsibility, if any, be limited to the amount of otherwise unobligated moneys available in the fund; or
(2) impose any liability on the State or the authority for the quality of any work performed pursuant to an upgrade, closure or remediation.
b. Nothing in sections 1 through 7 of P.L. , c. (C. )(pending in the Legislature as this bill) shall be construed to alter any obligation of an owner or operator of a facility to comply in a timely manner with all lawful requirements relating to the facility.
9. Within 120 days of the effective date of this act, the New Jersey Economic Development Authority shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), appropriate rules and regulations for the administration of the fund.
10. Within 120 days of the effective date of this act, the Department of Environmental Protection shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), appropriate rules and regulations to effectuate the purposes of this act.
11. a. The authority and the department shall present a joint annual report to the President of the Senate and the Speaker of the General Assembly and to the chairmen and members of the Assembly Environment Committee and the Senate Environment Committee, or their successors, on the status of the loan guarantee program. The annual report shall include:
(1) a statement on receipts and expenditures for the fund;
(2) the number of loan guarantee applications received and the actions taken on the applications;
(3) the number and amounts of loan guarantees approved;
(4) the identity and location of the facilities receiving the loan guarantees;
(5) an assessment of the adequacy of current funding levels in meeting the statutory objectives of the fund;
(6) an accounting of expenses incurred by the authority in administering the fund; and
(7) such other information, including any legislative or administrative recommendations for program changes, as the authority may deem appropriate or useful.
b. The annual report shall be made not later than March 1 of each year. The first biennial report shall also contain a needs survey, which shall estimate the scope and projected costs of all potentially eligible remediation applications for loan guarantees from the fund, and an assessment and recommendations.
12. There is appropriated from the General Fund to the Underground Storage Tank Closure, Upgrade and Remediation Fund established pursuant to section 2 of P.L. , c. (C. )(pending in the Legislature as this bill) the sum of $10,000,000.
13. This act shall take effect immediately.
STATEMENT
This bill would appropriate $10 million from the General Fund to the Underground Storage Tank Closure, Upgrade and Remediation Fund established under this bill.
Moneys in the fund would be utilized exclusively by the New Jersey Economic Development Authority to provide loan guarantees to owners or operators of underground storage tanks which are required to meet the upgrade standards for underground storage tanks established pursuant to federal or State law to close an underground storage tank, or to perform a remediation where a hazardous substance has been discharged, is suspected of having been discharged, or is threatening to be discharged, from an underground storage tank.
Loan guarantees would be made in accordance with criteria and other requirements adopted by the authority under the bill.
The authority may use moneys in the fund to provide loan guarantees for up to 100% of eligible project costs, as determined by the authority, based upon the lowest responsible bid.
A qualified applicant for a loan guarantee from the fund would be awarded a loan guarantee by the authority upon the availability of sufficient moneys in the fund. Priority rankings would be based upon the date an application for a loan guarantee is filed with the authority.
"Underground Storage Tank Closure, Upgrade and Remediation Act."