ASSEMBLY, No. 2627

 

STATE OF NEW JERSEY

 

INTRODUCED JANUARY 9, 1997

 

 

By Assemblywoman MYERS

 

 

An Act authorizing the creation of a debt of the State of New Jersey by the issuance of bonds of the State in the aggregate principal amount of $200,000,000 for the purpose of providing grants to counties and public authorities for the payment of stranded investment costs associated with the construction and operation of resource recovery facilities; providing the ways and means to pay and discharge the principal of and interest on the bonds; providing for the submission of this act to the people at a general election; and making an appropriation therefor.

 

    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 "Resource Recovery Facility Stranded Investment Cost Recovery Bond Act."

 

    2. The Legislature finds and declares that in response to the need to protect and enhance the quality of the State's environment, and to provide for the environmentally-sound disposal of solid waste, the Legislature in 1970 made a determination that these goals would be best achieved through the development of a comprehensive Statewide solid waste management strategy; that in furtherance of these environmental goals and policies, and to provide for a regulatory framework for the implementation thereof on a Statewide basis, the Legislature enacted the "Solid Waste Management Act," P.L.1970, c.39 (C.13:1E-1 et seq.), which designated every county and the Hackensack Meadowlands District as a solid waste management district for planning and implementation purposes and required each county, or a public authority designated by the governing body of the county, to develop, adopt and implement a district solid waste management plan for disposal of solid waste generated within its geographic boundaries.

    The Legislature further finds and declares that in furtherance of this State mandate, each county or public authority has entered into contracts, acquired real and personal property, incurred administrative and other operating expenses, and issued debt obligations, and the Department of Environmental Protection has issued waste flow orders directing constituent municipalities and local haulers to designated in-county solid waste facilities for processing or disposal, all in the service of district solid waste management plan implementation.

    The Legislature further finds and declares that the ability of each county or public authority to fulfill its lawful responsibilities with respect to district solid waste management plan implementation, including the ability to raise revenues sufficient to provide funds for payment of the costs of developing self-sufficient solid waste management systems, has been predicated on its legal authority to direct the flow of solid waste generated within the geographic boundaries of the county to designated solid waste facilities, thereby ensuring the economic viability of these facilities; and that waste flow control by counties and public authorities has been supported by statute, rules and regulations adopted by the Department of Environmental Protection, and franchises awarded by the Board of Public Utilities.

    The Legislature further finds and declares that in the case of C & A Carbone, Inc. v. Town of Clarkstown, N.Y. the U.S. Supreme Court has held that, without unambiguous congressional authorization, a state or local government's designation of the destination to which haulers must transport solid waste for processing or disposal is a violation of the Commerce Clause of the U.S. Constitution; that the Carbone decision has been reaffirmed by the Atlantic Coast Demolition & Recycling, Inc., et al. v. Board of Chosen Freeholders of Atlantic County et al. decision, which held that New Jersey's solid waste management system, including the Department of Environmental Protection's waste flow rules, interferes with interstate commerce, and that the State cannot direct municipalities or haulers to designated solid waste facilities in New Jersey due to the unconstitutional nature of New Jersey's solid waste management system, including the waste flow rules; and that the Atlantic Coast ruling on July 15, 1996 gives the State, counties and public authorities two years to implement a constitutionally acceptable system for solid waste management.

    The Legislature further finds and declares that counties and public authorities must be able, under all circumstances, to collect revenues sufficient to recover the environmental investment costs incurred in developing and implementing State-mandated district solid waste management plans through the construction and operation of capital-intensive resource recovery facilities for the environmentally-sound incineration of municipal solid waste.

    The Legislature therefore determines that it is the public policy of the State of New Jersey to furnish financial assistance to counties and public authorities for the payment of stranded investment costs by means of a grant program hereinafter established therefor.

 

    3. As used in this act:

    "Bonds" mean the bonds authorized to be issued, or issued, under this act;

    "Commission" means the New Jersey Commission on Capital Budgeting and Planning;

    "Commissioner" means the Commissioner of Environmental Protection;

    "Construct" and "construction" mean, in addition to the usual meanings thereof, the designing, engineering, financing, extension, repair, remodeling, or rehabilitation, or any combination thereof, of a resource recovery facility or any component part thereof;

    "Cost" means the expenses incurred in connection with: the execution of any agreements and franchises deemed by the department to be necessary or useful and convenient in connection with any grant authorized by this act; the procurement of engineering, inspection, planning, legal, financial, or other professional services, including the services of a bond registrar or an authenticating agent; the issuance of bonds, or any interest or discount thereon; the administrative, organizational, operating, or other expenses incident to the awarding of any grant authorized by this act; the establishment of a reserve fund or funds for working capital, operating, maintenance, or replacement expenses and for the payment or security of principal or interest on bonds, as the Director of the Division of Budget and Accounting in the Department of the Treasury may determine; and reimbursement to any fund of the State of moneys which may have been transferred or advanced therefrom to any fund created by this act, or of any moneys which may have been expended therefrom for, or in connection with, any grant authorized by this act; except that, in connection with stranded investments, "cost" means, in addition to the aforementioned connotations thereof, any expenses related to the planning, acquisition, construction, operation and maintenance of resource recovery facilities, including debt service on bonds issued by public authorities to finance resource recovery facilities;

    "Department" means the New Jersey Department of Environmental Protection or any agency or department successor to its power and responsibilities;

    "Government securities" means any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any federal agency, to the extent those obligations are unconditionally guaranteed by the United States of America, and any certificates or any other evidences of an ownership interest in those obligations of, or unconditionally guaranteed by, the United States of America or in specified portions which may consist of the principal of, or the interest on, those obligations;

    "Public authority" means any municipal or county utilities authority created pursuant to the "municipal and county utilities authorities law," P.L.1957, c.183 (C.40:14B-1 et seq.); county improvement authority created pursuant to the "county improvement authorities law," P.L.1960, c.183 (C.40:37A-44 et seq.); pollution control financing authority created pursuant to the "New Jersey Pollution Control Financing Law," P.L.1973, c.376 (C.40:37C-1 et seq.), or any other public body corporate and politic created for solid waste management purposes in any county, pursuant to the provisions of any law;

    "Resource recovery facility" means a solid waste facility constructed and operated for the incineration of solid waste for energy production and the recovery of metals and other materials for reuse; or a mechanized composting facility, or any other facility constructed or operated for the collection, separation, recycling, and recovery of metals, glass, paper, and other materials for reuse or for energy production, and which is identified and included in a district solid waste management plan pursuant to the provisions of the "Solid Waste Management Act," P.L.1970, c.39 (C.13:1E-1 et seq.);

    "Stranded investment costs" means the cost of stranded investments;

    "Stranded investments" means any resource recovery facility acquired, constructed or operated or to be acquired, constructed or operated by, or on behalf of, any person, public authority or county for, or with respect to, the implementation of a district solid waste management plan required pursuant to the provisions of the "Solid Waste Management Act," P.L.1970, c.39 (C.13:1E-1 et seq.) or any other act, which resource recovery facility has been financed, in whole or in part, through a zero interest State loan made from the "Resource Recovery and Solid Waste Disposal Facility Fund" established pursuant to section 14 of P.L.1985, c.330.

 

    4. The commissioner shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968 c.410 (C.52:14B-1 et seq.), rules and regulations necessary to implement the provisions of this act. The commissioner shall review and consider the findings and recommendations of the commission in the administration of the provisions of this act.

 

    5. a. Bonds of the State of New Jersey are authorized to be issued in the aggregate principal amount of $200,000,000 for the purpose of providing grants to counties and public authorities for the payment of stranded investment costs associated with the construction and operation of resource recovery facilities.

    b. Procedures for the review and approval of, and eligibility criteria for the awarding of grants shall be established by the commissioner pursuant to section 23 of this act.


    6. The bonds authorized under this act shall be serial bonds, term bonds, or a combination thereof, and shall be known as "Resource Recovery Facility Stranded Investment Cost Recovery Bonds." They shall be issued from time to time as the issuing officials herein named shall determine and may be issued in coupon form, fully-registered form or book-entry form. The bonds may be subject to redemption prior to maturity and shall mature and be paid not later than 35 years from the respective dates of their issuance.

 

    7. The Governor, the State Treasurer and the Director of the Division of Budget and Accounting in the Department of the Treasury, or any two of these officials, herein referred to as "the issuing officials," are authorized to carry out the provisions of this act relating to the issuance of bonds, and shall determine all matters in connection therewith, subject to the provisions of this act. If an issuing official is absent from the State or incapable of acting for any reason, the powers and duties of that issuing official shall be exercised and performed by the person authorized by law to act in an official capacity in the place of that issuing official.

 

    8. Bonds issued in accordance with the provisions of this act shall be a direct obligation of the State of New Jersey, and the faith and credit of the State are pledged for the payment of the interest and redemption premium thereon, if any, when due, and for the payment of the principal thereof at maturity or earlier redemption date. The principal of and interest on the bonds shall be exempt from taxation by the State or by any county, municipality or other taxing district of the State.

 

    9. The bonds shall be signed in the name of the State by means of the manual or facsimile signature of the Governor under the Great Seal of the State, which seal may be by facsimile or by way of any other form of reproduction on the bonds, and attested by the manual or facsimile signature of the Secretary of State, or an Assistant Secretary of State, and shall be countersigned by the facsimile signature of the Director of the Division of Budget and Accounting in the Department of the Treasury and may be manually authenticated by an authenticating agent or bond registrar, as the issuing official shall determine. Interest coupons, if any, attached to the bonds shall be signed by the facsimile signature of the Director of the Division of Budget and Accounting in the Department of the Treasury. The bonds may be issued notwithstanding that an official signing them or whose manual or facsimile signature appears on the bonds or coupons has ceased to hold office at the time of issuance, or at the time of the delivery of the bonds to the purchaser thereof.


    10. a. The bonds shall recite that they are issued for the purposes set forth in section 5 of this act, that they are issued pursuant to this act, that this act was submitted to the people of the State at the general election held in the month of November, 1997, and that this act was approved by a majority of the legally qualified voters of the State voting thereon at the election. This recital shall be conclusive evidence of the authority of the State to issue the bonds and their validity. Any bonds containing this recital shall, in any suit, action or proceeding involving their validity, be conclusively deemed to be fully authorized by this act and to have been issued, sold, executed and delivered in conformity herewith and with all other provisions of laws applicable hereto, and shall be incontestable for any cause.

    b. The bonds shall be issued in those denominations and in the form or forms, whether coupon, fully-registered or book-entry, and with or without provisions for interchangeability thereof, as may be determined by the issuing officials.

 

    11. When the bonds are issued from time to time, the bonds of each issue shall constitute a separate series to be designated by the issuing officials. Each series of bonds shall bear such rate or rates of interest as may be determined by the issuing officials, which interest shall be payable semiannually; except that the first and last interest periods may be longer or shorter, in order that intervening semiannual payments may be at convenient dates.

 

    12. The bonds shall be issued and sold at the price or prices and under the terms, conditions and regulations as the issuing officials may prescribe, after notice of the sale, published at least once in at least three newspapers published in this State, and at least once in a publication carrying municipal bond notices and devoted primarily to financial news, published in this State or in the city of New York, the first notice to appear at least five days prior to the day of bidding. The notice of sale may contain a provision to the effect that any bid in pursuance thereof may be rejected. In the event of rejection or failure to receive any acceptable bid, the issuing officials, at any time within 60 days from the date of the advertised sale, may sell the bonds at a private sale at such price or prices under the terms and conditions as the issuing officials may prescribe. The issuing officials may sell all or part of the bonds of any series as issued to any State fund or to the federal government or any agency thereof, at a private sale, without advertisement.

 

    13. Until permanent bonds are prepared, the issuing officials may issue temporary bonds in the form and with those privileges as to their registration and exchange for permanent bonds as may be determined by the issuing officials.

 

    14. The proceeds from the sale of bonds used to provide grants to counties and public authorities for the payment of stranded investment costs associated with the construction and operation of resource recovery facilities shall be paid to the State Treasurer and be held by the State Treasurer in a separate fund, and be deposited in such depositories as may be selected by the State Treasurer to the credit of the fund, which fund shall be known as the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund."

 

    15. a. The moneys in the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund" are specifically dedicated and shall be applied to the cost of grants to counties and public authorities for the payment of stranded investment costs associated with the construction and operation of resource recovery facilities as set forth in section 5 of this act. However, no moneys in the fund shall be expended for those purposes, except as otherwise authorized by this act, without the specific appropriation thereof by the Legislature, but bonds may be issued as herein provided, notwithstanding that the Legislature shall not have then adopted an act making a specific appropriation of any of the moneys. Any act appropriating moneys from the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund" shall identify the county or public authority to be awarded a grant by the moneys.

    b. At any time prior to the issuance and sale of bonds under this act, the State Treasurer is authorized to transfer from any available moneys in any fund of the treasury of the State to the credit of the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund" those sums as the State Treasurer may deem necessary. The sums so transferred shall be returned to the same fund of the treasury of the State by the State Treasurer from the proceeds of the sale of the first issue of bonds.

    c. Pending their application to the purposes provided in this act, the moneys in the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund" may be invested and reinvested as are other trust funds in the custody of the State Treasurer, in the manner provided by law. Net earnings received from the investment or deposit of moneys in the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund" shall be paid into the General Fund.

 

    16. If any coupon bond, coupon or registered bond is lost, mutilated or destroyed, a new bond or coupon shall be executed and delivered of like tenor, in substitution for the lost, mutilated or destroyed bond or coupon, upon the owner furnishing to the issuing officials evidence satisfactory to them of the loss, mutilation or destruction of the bond or coupon, the ownership thereof, and


security, indemnity and reimbursement for expenses connected therewith, as the issuing officials may require.

 

    17. The accrued interest, if any, received upon the sale of the bonds shall be applied to the discharge of a like amount of interest upon the bonds when due. Any expense incurred by the issuing officials for advertising, engraving, printing, clerical, authenticating, registering, legal or other services necessary to carry out the duties imposed upon them by the provisions of this act shall be paid from the proceeds of the sale of the bonds by the State Treasurer, upon the warrant of the Director of the Division of Budget and Accounting in the Department of the Treasury, in the same manner as other obligations of the State are paid.

 

    18. Bonds of each series issued hereunder shall mature, including any sinking fund redemptions, not later than the 35th year from the date of issue of that series, and in amounts as shall be determined by the issuing officials. The issuing officials may reserve to the State by appropriate provision in the bonds of any series the power to redeem any of the bonds prior to maturity at the price or prices and upon the terms and conditions as may be provided in the bonds.

 

    19. Any bond or bonds issued hereunder which are subject to refinancing pursuant to the "Refunding Bond Act of 1985," P.L.1985, c.74 as amended by P.L.1992, c.182 (C.49:2B-1 et seq.), shall no longer be deemed to be outstanding, shall no longer constitute a direct obligation of the State of New Jersey, and the faith and credit of the State shall no longer be pledged to the payment of the principal of, redemption premium, if any, and interest on the bonds, and the bonds shall be secured solely by and payable solely from moneys and government securities deposited in trust with one or more trustees or escrow agents, which trustees and escrow agents shall be trust companies or national or state banks having powers of a trust company, located either within or without the State, as provided herein, whenever there shall be deposited in trust with the trustees or escrow agents, as provided herein, either moneys or government securities, including government securities issued or held in book-entry form on the books of the Department of Treasury of the United States, the principal of and interest on which when due will provide money which, together with the moneys, if any, deposited with the trustees or escrow agents at the same time, shall be sufficient to pay when due the principal of, redemption premium, if any, and interest due and to become due on the bonds on or prior to the redemption date or maturity date thereof, as the case may be; provided the government securities shall not be subject to redemption prior to their maturity other than at the option of the holder thereof. The State of New Jersey hereby covenants with the holders of any bonds for which government securities or moneys shall have been deposited in trust with the trustees or escrow agents as provided in this section that, except as otherwise provided in this section, neither the government securities nor moneys so deposited with the trustees or escrow agents shall be withdrawn or used by the State for any purpose other than, and shall be held in trust for, the payment of the principal of, redemption premium, if any, and interest to become due on the bonds; provided that any cash received from the principal or interest payments on the government securities deposited with the trustees or escrow agents, to the extent the cash will not be required at any time for that purpose, shall be paid over the to State, as received by the trustees or escrow agents, free and clear of any trust, lien, pledge or assignment securing the bonds; and to the extent the cash will be required for that purpose at a later date, shall, to the extent practicable and legally permissible, be reinvested in government securities maturing at times and in amounts sufficient to pay when due the principal of, redemption premium, if any, and interest to become due on the bonds on and prior to the redemption date or maturity date thereof, as the case may be, and interest earned from the reinvestments shall be paid over to the State, as received by the trustees or escrow agents, free and clear of any trust, lien or pledge securing the bonds. Notwithstanding anything to the contrary contained herein: a. the trustees or escrow agents shall, if so directed by the issuing officials, apply moneys on deposit with the trustees or escrow agents pursuant to the provisions of this section, and redeem or sell government securities so deposited with the trustees or escrow agents, and apply the proceeds thereof to (1) the purchase of the bonds which were refinanced by the deposit with the trustees or escrow agents of the moneys and government securities and immediately thereafter cancel all bonds so purchased, or (2) the purchase of different government securities; provided however, that the moneys and government securities on deposit with the trustees or escrow agents after the purchase and cancellation of the bonds or the purchase of different government securities shall be sufficient to pay when due the principal of, redemption premium, if any, and interest on all other bonds in respect of which the moneys and government securities were deposited with the trustees or escrow agents on or prior to the redemption date or maturity date thereof, as the case may be; and b. in the event that on any date, as a result of any purchases and cancellations of bonds or any purchases of different government securities, as provided in this sentence, the total amount of moneys and government securities remaining on deposit with the trustees or escrow agents is in excess of the total amount which would have been required to be deposited with the trustees or escrow agents on that date in respect of the remaining bonds for which the deposit was made in order to pay when due the principal of, redemption premium, if any, and interest on the remaining bonds, the trustees or escrow agents shall, if so directed by the issuing officials, pay the amount of the excess to the State, free and clear of any trust, lien, pledge or assignment securing the refunding bonds.

 

    20. Refunding bonds issued pursuant to P.L.1985, c.74 as amended by P.L.1992, c.182 (C.49:2B-1 et seq.) may be consolidated with bonds issued pursuant to section 5 of this act or with bonds issued pursuant to any other act for purposes of sale.

 

    21. To provide funds to meet the interest and principal payment requirements for the bonds and refunding bonds issued under this act and outstanding, there is appropriated in the order following:

    a. Revenue derived from the collection of taxes under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), or so much thereof as may be required; and

    b. If, at any time, funds necessary to meet the interest, redemption premium, if any, and principal payments on outstanding bonds issued under this act are insufficient or not available, there shall be assessed, levied and collected annually in each of the municipalities of the counties of this State, a tax on the real and personal property upon which municipal taxes are or shall be assessed, levied and collected, sufficient to meet the interest on all outstanding bonds issued hereunder and on the bonds proposed to be issued under this act in the calendar year in which the tax is to be raised and for the payment of bonds falling due in the year following the year for which the tax is levied. The tax shall be assessed, levied and collected in the same manner and at the same time as are other taxes upon real and personal property. The governing body of each municipality shall cause to be paid to the county treasurer of the county in which the municipality is located, on or before December 15 in each year, the amount of tax herein directed to be assessed and levied, and the county treasurer shall pay the amount of the tax to the State Treasurer on or before December 20 in each year.

    If on or before December 31 in any year, the issuing officials, by resolution, determine that there are moneys in the General Fund beyond the needs of the State, sufficient to pay the principal of bonds falling due and all interest and redemption premium, if any, payable in the ensuing calendar year, the issuing officials shall file the resolution in the office of the State Treasurer, whereupon the State Treasurer shall transfer the moneys to a separate fund to be designated by the State Treasurer, and shall pay the principal, redemption premium, if any, and interest out of that fund as the same shall become due and payable, and the other sources of payment of the principal, redemption premium, if any, and interest provided for in this section shall not then be available, and the receipts for the year from the tax specified in subsection a. of this section shall be considered and treated as part of the General Fund, available for general purposes.

 

    22. Should the State Treasurer, by December 31 of any year, deem it necessary, because of the insufficiency of funds collected from the sources of revenues as provided in this act, to meet the interest and principal payments for the year after the ensuing year, then the State Treasurer shall certify to the Director of the Division of Budget and Accounting in the Department of the Treasury the amount necessary to be raised by taxation for those purposes, the same to be assessed, levied and collected for and in the ensuring calendar year. The director shall, on or before March 1 following, calculate the amount in dollars to be assessed, levied and collected in each county as herein set forth. This calculation shall be based upon the corrected assessed valuation of each county for the year preceding the year in which the tax is to be assessed, but the tax shall be assessed, levied and collected upon the assessed valuation of the year in which the tax is assessed and levied. The director shall certify the amount to the county board of taxation and the treasurer of each county. The county board of taxation shall include the proper amount in the current tax levy of the several taxing districts of the county in proportion to the ratables as ascertained for the current year.

 

    23. (New section) a. The commissioner shall for each fiscal year develop a priority system for providing grants to assist counties and public authorities in the payment of stranded investment costs and shall establish the ranking criteria and funding policies therefor. The commissioner shall set forth a priority list for funding for each fiscal year and shall include the aggregate amount of funds to be authorized for these purposes. Eligibility of a county or public authority for a grant to be included on the priority list shall be determined in accordance with the provisions of subsection b. of this section. The priority list shall include an explanation of the manner in which priorities were established. The priority system and priority list for the ensuing fiscal year shall be submitted to the Legislature on or before January 15 of each year.

    b. In order to be eligible for a grant, a county or public authority shall prepare a plan to reduce the solid waste charges received at the resource recovery facility for solid waste disposal. The plan shall include, but not necessarily be limited to, provisions concerning:

    (1) the assumption by the governing body of the county of some or all of the administrative costs of implementing its district solid waste management plan;

    (2) the proper delegation to municipalities of the costs of certain county solid waste services, including, but not limited to, recycling or household hazardous waste management, which are currently part of the solid waste charges received at the resource recovery facility for solid waste disposal;

    (3) the refinancing of debt to reduce the solid waste charges received at the resource recovery facility for solid waste disposal;

    (4) any other arrangements as may be necessary to reduce the solid waste charges received at the resource recovery facility for solid waste disposal; or

    (5) the prudent application of grant moneys to the plan prepared by the county or public authority to ensure the long-term competitiveness of the resource recovery facility as well as the payment of debt service obligations.

    No moneys shall be expended for grants during a fiscal year for any county or public authority unless the expenditure is authorized pursuant to an appropriations act.

    c. As part of the annual submission required by this section, the department shall provide a financial accounting of all expenditures made in the preceding year, and of all administrative expenses incurred by the department in administering the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund."

 

    24. For the purpose of complying with the provisions of the State Constitution, this act shall be submitted to the people at the general election next occurring at least 70 days after enactment. To inform the people of the contents of this act, it shall be the duty of the Secretary of State, after this section takes effect, and at least 60 days prior to the election, to cause this act to be published at least once in one or more newspapers of each county, if any newspapers be published therein and to notify the clerk of each county of this State of the passage of this act; and the clerks respectively, in accordance with the instructions of the Secretary of State, shall have printed on each of the ballots the following:

    If you approve of the act entitled below, make a cross (x), plus (+), or check (•) mark in the square opposite the word "Yes."

    If you disapprove of the act entitled below, make a cross (x), plus (+), or check (•) mark in the square opposite the word "No."

    If voting machines are used, a vote of "Yes" or "No" shall be equivalent to these markings respectively.




 

 

RESOURCE RECOVERY FACILITY STRANDED INVESTMENT COST RECOVERY BOND ISSUE












 

YES

Shall the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Act," which authorizes the State to issue bonds in the amount of $200,000,000 for the purpose of providing grants to counties and public authorities for the payment of stranded investment costs associated with the construction and operation of resource recovery facilities and providing the ways and means to pay the interest on the debt and also to pay and discharge the principal thereof, be approved?

 

 

INTERPRETIVE STATEMENT





























 

NO

Approval of this act would authorize the sale of $200,000,000 in State general obligation bonds to be used for the purpose of providing grants to counties and public authorities for the payment of stranded investment costs resulting from the construction and operation of resource recovery facilities.

Resource recovery facilities are expensive to construct and operate, and a significant public debt resulted. The fees and charges received at these facilities were calculated to pay off this debt, and when the State was able to direct solid waste generated within county borders to a county facility, the debt payment through the fees and charges was secure. But, the United States Supreme Court has ruled that state and local governments cannot require the use of in-state facilities to dispose of local solid waste. Now resource recovery facilities cannot compete with less expensive out-of-state solid waste disposal facilities. This places the large public investment in resource recovery facilities at risk. These bond funds would help counties and public authorities meet a portion of the debt that would be borne by users of resource recovery facilities, thus improving the financial situation of these facilities while protecting the public funds already invested in them.

    The fact and date of the approval or passage of this act, as the case may be, may be inserted in the appropriate place after the title in the ballot. No other requirements of law of any kind or character as to notice or procedure, except as herein provided, need be adhered to.

    The votes so cast for and against the approval of this act, by ballot or voting machine, shall be counted and the result thereof returned by the election officer, and a canvass of the election had in the same manner as is provided for by law in the case of the election of a Governor, and the approval or disapproval of this act so determined shall be declared in the same manner as the result of an election for a Governor, and if there is a majority of all the votes cast for and against it at the election in favor of the approval of this act, then all the provisions of this act not made effective theretofore shall take effect forthwith.

 

    25. There is appropriated the sum of $5,000 to the Department of State for expenses in connection with the publication of notice pursuant to section 24 of this act.

 

    26. The commissioner shall submit to the State Treasurer and the commission with the department's annual budget request a plan for the expenditure of funds from the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund" for the upcoming fiscal year. This plan shall include the following information: a performance evaluation of the expenditures made from the funds to date; a description of programs planned during the upcoming fiscal year; a copy of the regulations in force governing the operation of programs that are financed, in part or in whole, by funds from the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund;" and an estimate of expenditures for the upcoming fiscal year.

 

    27. Immediately following the submission to the Legislature of the Governor's annual budget message, the commissioner shall submit to the Senate Environment Committee and the Assembly Agriculture and Waste Management Committee, or their designated successors, and to the Joint Budget Oversight Committee, or its successor, a copy of the plan called for under section 26 of this act, together with such changes therein as may have been required by the Governor's budget message.

 

    28. All appropriations from the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund" shall be made to a specific county or public authority, and any transfer of any funds so appropriated shall require the approval of the Joint Budget Oversight Committee, or its successor.

 

    29. This section and sections 24 and 25 of this act shall take effect immediately and the remainder of this act shall take effect as and when provided in section 24.

 

 

STATEMENT

 

    This bill, entitled the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Act," authorizes the issuance of $200 million in State general obligation bonds for the purpose of providing grants to counties and public authorities for the payment of stranded investment costs associated with the construction and operation of resource recovery facilities.

    On May 16, 1994, the U.S. Supreme Court, in its first-ever waste flow control case, Carbone v. Town of Clarkstown, held that, without unambiguous congressional authorization, a state or local government's regulation of where haulers must transport solid waste for processing or disposal is a violation of the Commerce Clause of the U.S. Constitution. The Carbone decision has been reaffirmed by the Atlantic Coast Demolition & Recycling, Inc., et al. v. Board of Chosen Freeholders of Atlantic County et al. decision, which held that New Jersey's solid waste management system, including the Department of Environmental Protection's waste flow rules, interferes with interstate commerce, and that the State cannot direct municipalities or haulers to designated solid waste facilities in New Jersey due to the unconstitutional nature of New Jersey's solid waste management system, including the waste flow rules; and that the Atlantic Coast ruling on July 15, 1996 gives the State, counties and public authorities two years to implement a constitutionally acceptable system for solid waste management. Consequently, all operating and proposed resource recovery facilities in New Jersey have lost the guaranteed waste flows that ensure the economic viability of these solid waste incinerators, and the counties and public authorities that have financed these so-called "stranded investments," primarily through revenue bonds, together with interest-free State loans from the "Resource Recovery and Solid Waste Disposal Facility Fund," established pursuant to the "Resource Recovery and Solid Waste Disposal Facility Bond Act of 1985," (P.L.1985, c.330), now face financial disaster.

    In response to this crisis, and in view of the State's role in mandating the development of these facilities, it is imperative that the State provide financial assistance to counties and public authorities for the payment of stranded investment costs by means of a grant program utilizing bond moneys authorized pursuant to this act.

    A companion measure, Assembly Bill No. of 1996, would revise the "Resource Recovery and Solid Waste Disposal Facility Bond Act of 1985," (P.L.1985, c.330) to authorize the Department of Environmental Protection to use bond moneys in the "Resource Recovery and Solid Waste Disposal Facility Fund" established therein for grants to counties and public authorities to assist these local governments in the payment of stranded investment costs associated with the development of State-mandated resource recovery facilities. Approximately $65 million in bond moneys are available from repayments of certain loans, canceled resource recovery facility projects, and cash earned from the investment of amounts in the "Resource Recovery and Solid Waste Disposal Facility Fund."

    If approved by the voters, the $65 million in the "Resource Recovery and Solid Waste Disposal Facility Fund," and the $200 million to be deposited in the "Resource Recovery Facility Stranded Investment Cost Recovery Bond Fund" proposed under this bill would be used for the purpose of providing $265 million for grants to counties and public authorities that have incurred bonded indebtedness in developing resource recovery facilities, all of which have been financed, in part, from interest-free loan moneys provided to these local governments under the "Resource Recovery and Solid Waste Disposal Facility Bond Act of 1985," P.L.1985, c.330. The grant program would be administered by the Department of Environmental Protection. It is proposed that the Department be permitted to cover its administrative costs out of bond moneys, if the Legislature appropriates the moneys each year.

    In order to qualify for a grant, a county or public authority must prepare a plan to reduce the solid waste charges ("tipping fees") received at the resource recovery facility for solid waste disposal. The plan must include, but not necessarily be limited to, provisions concerning: (1) the assumption by the governing body of the county of some or all of the administrative costs of implementing its district solid waste management plan; (2) the proper delegation to municipalities of the costs of certain county solid waste services, including, but not limited to, recycling or household hazardous waste management, which are currently part of the solid waste charges received at the resource recovery facility for solid waste disposal; (3) the refinancing of debt to reduce the solid waste charges received at the resource recovery facility for solid waste disposal; (4) any other arrangements as may be necessary to reduce the solid waste charges received at the resource recovery facility for solid waste disposal; or (5) the prudent application of grant moneys to the plan prepared by the county or public authority to ensure the long-term competitiveness of the resource recovery facility as well as the payment of debt service obligations.

    The bill provides that the bond act is to be submitted to the people for approval at the general election to be held at least 70 days after enactment and appropriates $5,000 to the Department of State for expenses in onnection with the publication of the public question.


                             

 

"Resource Recovery Facility Stranded Investment Cost Recovery Bond Act," authorizes bonds for $200 million and appropriates $5000.