ASSEMBLY AGRICULTURE AND WASTE MANAGEMENT COMMITTEE

STATEMENT TO

ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, No. 882

STATE OF NEW JERSEY

DATED: JUNE 20, 1996

      The Assembly Agriculture and Waste Management Committee favorably reports an Assembly Committee Substitute for Assembly Bill No. 882.

      The Assembly Committee Substitute for Assembly Bill No. 882 provides for the remediation and redevelopment of municipal solid waste landfill sites under the terms and conditions of a redevelopment agreement negotiated by a developer and the State.

      The substitute bill provides that under a redevelopment agreement, an eligible developer who closes and remediates the site of a former municipal solid waste landfill would be eligible for reimbursement of 75 percent of the costs of closure and remediation of the municipal solid waste landfill after the site is redeveloped, from payments derived from one-half of the sales tax collected on non-exempt sales generated from any business located on the site.

      The developer would negotiate with the Commissioner of the Department of Commerce and Economic Development, in consultation with the State Treasurer, over the terms and conditions of the redevelopment agreement. Under the redevelopment agreement, the developer would undertake the environmentally sound and proper closure and remediation of the municipal solid waste landfill and the State would agree that the developer is eligible for reimbursement of 75 percent of the costs of closure and remediation of the municipal solid waste landfill site.

      To receive the reimbursement, a developer must submit an application, in writing, to the Director of the Division of Taxation for review and certification after the project is complete. The director would review the request for certification on a timely basis. The substitute bill would require the director to certify a developer to be eligible for the reimbursement if: (1) a place of business is located in the area subject to the redevelopment agreement for the purpose of making retail sales; (2) non-exempt items are regularly exhibited and offered for retail sale at that location; (3) the place of business is not utilized primarily for the purpose of catalogue or mail order sales; and (4) the developer has entered into a memorandum of agreement with the Commissioner of Environmental Protection for the sound and proper closure and remediation of the municipal solid waste landfill located on the site of the redevelopment project and is in compliance with the memorandum of agreement.

      The substitute bill would create in the Department of Treasury, a special fund to be known as the Municipal Landfill Closure and Remediation Fund, and would provide that upon approval of the certification for reimbursement by the director, a special account be created for that developer. The fund would be credited with one half of all taxes due and payable pursuant to the "Sales and Use Tax Act" by any person required to collect the tax at the site of the redevelopment project. Those funds would be used to reimburse the developer. The reimbursement authorized under the substitute bill would continue until the developer recovers 75 percent of the actual and reasonable costs of closure and remediation incurred by the developer.

      The substitute bill would also: (1) exclude from reimbursable costs the costs incurred in financing the closure and remediation; and (2) clarify that the provisions of the bill apply in urban enterprise zones so that one-half of the sales tax collected at the site of a former municipal solid waste landfill located in an urban enterprise zone would be deposited into the Municipal Landfill Closure and Remediation Fund and the other half would be deposited into the enterprise zone assistance fund as provided in P.L.1983, c.303 (C.52:27H-60 et seq.).

      The definition of "municipal solid waste landfill" is a version of the definition used in the federal "Resource Conservation and Recovery Act" (RCRA) which has been modified to utilize current New Jersey definitions. To be eligible for inclusion under the bill, a municipal solid waste landfill must have received for disposal household solid waste and either commercial solid waste, industrial solid waste or hazardous waste material that was received prior to the effective date of the federal RCRA program regulating hazardous waste disposal. The Department of Environmental Protection has listed a universe of 314 landfills located in every county in the State that meet these criteria.

      In favorably reporting this substitute bill, it is the Committee's understanding that no closure activity or remediation as may be required by the Department of Environmental Protection to ensure the environmentally sound and proper closure and remediation of a municipal solid waste landfill located in any portion of the Pinelands area shall be inconsistent with the provisions of section 502 of the federal "National Parks and Recreation Act of 1978" (PL 95-625), the "Pinelands Protection Act," P.L.1979, c.111 (C.13:18A-1 et seq.), or the comprehensive management plan prepared and adopted by the Pinelands Commission pursuant thereto.

      The Assembly Committee Substitute for Assembly Bill No. 882 is identical to Senate Bill No. 294 (1R).

MINORITY STATEMENT

Submitted by: Assemblyman Impreveduto and Assemblywoman Gill

      While there is a need to provide a mechanism for the proper closure and remediation of municipal solid waste landfills and the goals of this bill are laudable, we have several objections to the provisions in this legislation. Primarily, in our view, the bill’s financial subsidy, through a sales tax refund, for developers that close and remediate landfills as part of commercial retail projects is problematic.

      Any contaminated site remediation project will be based on its economic value. Since this bill will refund up to 75 percent of the developer’s remediation costs for a retail development project on these sites, this bill provides no incentive for equally desirable non-retail landfill reclamation projects. Because many of the urban municipal landfills would be ideal locations for office space, light industrial and commercial warehouse use, this bill offers no help to reclaim urban landfills for these purposes.

      Equally important, because this bill applies to all landfills, regardless of their need for an economic subsidy to make these site financially viable for redevelopment, this bill will place public subsidies where they are unneeded. Indeed, if this bill were truly designed to provide public support for landfill remediation projects that the private sector deems financially unviable, the sponsors would have limited this bill’s application to urban landfills or, at the very least, only applied the refund to those landfills where the cleanup costs exceeds the value of the property. Without such qualification, it is our view that this bill will undermine other municipal landfill reclamation programs that are directly aimed at promoting urban landfill closure and redevelopment projects through financial incentives.

      Another serious issue raised by the provisions of this bill is the lack of direct economic recovery for the municipalities that own these landfills. Under this legislation, the developer, regardless of purchase price, is entitled to recover 75 percent of the cleanup costs. Since this bill is not prospective in its application, this bill would provide a significant financial windfall for any developer that purchased a municipal landfill site for future development at a nominal price. The other problem with this bill as it relates to municipalities is the lack of a public bidding requirement for these landfill sites given the financial subsidies to developers under this legislation. Should this bill become law, the financial incentives created by this legislation will automatically make municipal landfill sites inherently more valuable. This legislation should have a mechanism, through a public bidding process, to ensure that the municipality receives the largest economic value for these sites. Indeed, we find it disconcerting that the sponsors ignored the Department of Environmental Protection Commissioners’s statement in committee that any municipal landfill site that has value in excess of the cleanup costs should be subject to a public bidding process.

      It should be noted that the only known improperly closed municipal landfill site that a developer has purchased and would be eligible for the remediation rebate under this bill is the “H Tract” site in Atlantic City. The developer of this site has publicly stated that he is willing to assume the clean-up responsibility for this site, is not seeking any state reimbursement for these costs and purchased this property outside of a public bidding process. For these reasons, we believe that this bill should require a public bidding process for these sites and limit it applicability prospectively after the date of enactment.

      Finally, the lack of any review of the fiscal impact on the state of this bill by the appropriations committees in either the Assembly or Senate is irresponsible and directly contrary to the notion of a deliberative process.

      For the above stated reasons, we note our objections to this bill in this statement.