ASSEMBLY, No. 2649

 

STATE OF NEW JERSEY

 

INTRODUCED JANUARY 9, 1997

 

 

By Assemblyman CORODEMUS

 

 

An Act concerning the upgrade, remediation, and closure of certain underground storage tanks, supplementing Title 58 of the Revised statutes, repealing sections 17 and 18 of P.L.1986, c.102, and making an appropriation.

 

    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 "Underground Storage Tank Finance Act."

 

    2. As used in this act:

    "Applicant" means a person who files an application for financial assistance from the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund for payment of eligible project costs of a remediation due to a discharge of petroleum from a petroleum underground storage tank and for payment of eligible project costs of an upgrade or closure of a regulated tank;

    "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 proper closure or removal of a petroleum underground storage tank necessary to meet all regulatory requirements of federal, State, or local law:

    "Commissioner" means the Commissioner of Environmental Protection;

    "Department" means the Department of Environmental Protection;

    "Discharge" means the intentional or unintentional release by any means of petroleum from a petroleum underground storage tank into the environment;

    "Eligible owner or operator" means any owner or operator who owns or operates less than 25 petroleum underground storage tanks in New Jersey, who has a net worth of less than $10,000,000 and who demonstrates to the satisfaction of the authority, the inability to qualify for and obtain a commercial loan for all or part of the eligible project costs;

    "Eligible project costs" means the reasonable costs for equipment, work or services required to effectuate a remediation, an upgrade, or a closure which equipment, work or services are eligible for payment from the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund. In the case of an upgrade or closure of a regulated tank, eligible project costs shall be limited to the cost of the minimal effective system necessary to meet all the regulatory requirements of federal and State law. The limitation of eligible project costs to the minimal effective system shall not be construed to deem ineligible those project costs expended to replace a regulated tank rather than to improve the regulated tank. An owner or operator may perform an upgrade or a closure beyond the minimal effective system in which case the eligible project costs that may be awarded from the fund as financial assistance shall be that amount that would represent the cost of a minimal effective system. Eligible project costs shall include the cost of a preliminary assessment and site investigation, even if performed prior to the award of financial assistance from the fund if the preliminary assessment and site investigation were performed after the effective date of P.L. , c. (now before the Legislature as this bill);

    "Facility" means one or more operational or nonoperational petroleum underground storage tanks under single ownership at a common site;

    "Financial assistance" means a grant or loan or a combination of both that may be awarded by the authority from the fund to an eligible owner or operator as provided in section 5 of P.L. , c. (C. )(now before the Legislature as this bill);

    "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;

    "Person" means any individual, partnership, corporation, society, association, consortium, joint venture, commercial entity, or public entity, but does not include the State or any of its departments, agencies or authorities;

    "Petroleum" means all hydrocarbons which are liquid at one atmosphere pressure (760 millimeters or 29.92 inches Hg) and temperatures between -20̊F and 120̊F (-29̊C and 49̊C), and all hydrocarbons which are discharged in a liquid state at or nearly at atmospheric pressure at temperatures in excess of 120̊F (49̊C) including, but not limited to, gasoline, kerosene, fuel oil, oil sludge, oil refuse, oil mixed with other wastes, crude oil, and purified hydrocarbons that have been refined, re-refined, or otherwise processed for the purpose of being burned as a fuel to produce heat or usable energy or which is suitable for use as a motor fuel or lubricant in the operation or maintenance of an engine;

    "Petroleum Underground Storage Tank Remediation, Upgrade and Closure Fund" or "fund" means the fund established pursuant to section 3 of P.L. , c. (C. ) (now before the Legislature as this bill);

    "Petroleum underground storage tank" means a tank of any size, including appurtenant pipes, lines, fixtures, and other related equipment, that normally and primarily stores petroleum, the volume of which, including the volume of the appurtenant pipes, lines, fixtures and other related equipment, is 10% or more below the ground. "Petroleum underground storage tank" does not include:

    (1) Septic tanks installed or regulated pursuant to 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.) or "The Water Pollution Control Act," P.L.1977, c.74 (C.58:10A-1 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 or regulated pursuant to regulations adopted by the department pursuant to the "Water Pollution Control Act," P.L.1977, c.74 (C.58:10A-1 et seq.);

    (4) Storm water or wastewater collection systems operated or regulated pursuant to 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 definition pursuant to paragraphs (1) through (6) above;

    "Public entity" means any county, municipality, or public school district, but shall not include any authority created by those entities;

    "Regulated tank" means a petroleum underground storage tank that is required to be upgraded pursuant to P.L.1986, c.102 (C.58:10A-21 et seq.) or 42 U.S.C.§6991 et seq.;

    "Remediation" means all necessary actions to investigate and clean up any known, suspected, or threatened discharge of petroleum, including, as necessary, the preliminary assessment, site investigation, remedial investigation, and remedial action, as those terms are defined in section 23 of P.L.1993, c.139 (C.58:10B-1);

    "Upgrade" means the replacement of a regulated tank, the installation of secondary containment, monitoring systems, release detection systems, corrosion protection, spill prevention, or overfill prevention therefor, or any other necessary improvement to the regulated tank in order to meet the standards for regulated tanks adopted pursuant to section 5 of P.L.1986, c.102 (C.58:10A-25) and 42 U.S.C.§6991 et seq.

 

    3. a. The Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund is established in the authority as a special, revolving fund. The fund shall be administered by the authority and shall be credited with:

    (1) such moneys as are appropriated by the Legislature;

    (2) sums received as repayment of principal and interest on outstanding loans made from the State Underground Storage Tank Improvement Fund established pursuant to P.L.1986, c.102 (C.58:10A-21 et seq.);

    (3) such monies as are appropriated pursuant to section 21 of P.L.     , c. (C. )(pending in the Legislature as this bill);

    (4) all non-refundable application fees collected pursuant to section 6 of P.L. , c. (C. )(now before the Legislature as this bill);

    (5) sums received as repayment of principal and interest on outstanding loans made from the fund;

    (6) any monies recovered by the authority pursuant to sections 14 and 15 of P.L. , c. (C. )(now before the Legislature as this bill);

    (7) any return on investment of monies deposited in the fund;

    (8) any monies recovered through liens pursuant to section 10 or 16 of P.L. , c. (C. )(now before the Legislature as this bill); and

    (9) payments of the annual surcharge imposed pursuant to section 18 of P.L. , c. (C. )(now before the Legislature as this bill).

    b. Monies in the fund shall be used by the authority solely for providing financial assistance pursuant to section 4 of P.L. , c. (C.    )(now before the Legislature as this bill) except that the authority may use application fees collected pursuant to section 6 of P.L. , c. (C. ), moneys recovered by the authority pursuant to sections 14 and 15 of P.L. , c. (C. ), and payments of the annual surcharge imposed pursuant to section 18 of P.L. , c. (C. ) for actual costs incurred in administering the fund, and for costs of any action to recover monies owing to the fund.

 

    4. a. Monies in the fund shall be allocated and used to provide financial assistance only to (1) eligible owners or operators of regulated tanks in this State in order to finance the eligible project costs of the upgrade or closure of those regulated tanks as may be required pursuant to 42 U.S.C.§6991 et seq. or P.L.1986, c.102 (C.58:10A-21 et seq.); and (2) eligible owners and operators of petroleum underground storage tanks in this State in order to finance the eligible project costs of remediations that are necessary due to the discharge of petroleum from one or more of those petroleum underground storage tanks. Priority for the issuance of financial assistance from the fund, and the terms and conditions of that financial assistance, shall be based upon the criteria set forth in this section.

    b. Upon a determination that an application for financial assistance meets all established criteria for the award of financial assistance from the fund, the authority shall approve the application. Prior to December 22, 1998, the authority may approve only those applications given priority pursuant to paragraph (1) of this subsection or pursuant to subsection c. of this section, but the authority may receive, file, and deem complete any application for financial assistance its receives prior to that date.

    Upon the authority's approval of an application for financial assistance, the authority shall award financial assistance to an applicant upon the availability of sufficient monies in the fund. When monies in the fund are not sufficient at any point in time to fully fund all applications for financial assistance that have been approved by the authority, the authority shall award financial assistance to approved applicants, notwithstanding the date of approval of the application, in the following order of priority:

    (1) Upgrades of regulated tanks required to be upgraded pursuant to 42 U.S.C.§6991 et seq., and including any necessary remediation at the site of the regulated tank, shall be given first priority;

    (2) Upgrades of regulated tanks required to be upgraded pursuant to P.L.1986, c.102 (C.58:10A-21 et seq.), but not pursuant to 42 U.S.C.§6991 et seq., and including any necessary remediation at the site of the regulated tank, shall be given second priority;

    (3) Any necessary remediations at the sites of petroleum underground storage tanks other than those given priority pursuant to paragraphs (1) or (2) of this subsection shall be given third priority;

    (4) Closure of any regulated tank shall be given last priority.

    c. Notwithstanding the priority for the award of financial assistance set forth in subsection b. of this section, whenever there has been a discharge, and the discharge poses an imminent and significant threat to a drinking water source, to human health, or to a sensitive or significant ecological area, an approved application for the award of financial assistance for the remediation and upgrade or closure, if necessary, shall be given priority over all other applications for financial assistance.

    d. The priority ranking of applicants within any priority category enumerated in paragraphs (1), (2), (3), and (4) of subsection b. and in subsection c. of this section shall be based upon the date an application for financial assistance is filed with the authority as determined pursuant to section 6 of P.L. , c. (C. )(now before the Legislature as this bill).

    e. Whenever a facility consists of petroleum underground storage tanks from more than one priority category as enumerated in paragraphs (1) through (4) of subsection b. of this section, all the petroleum underground storage tanks at that facility shall be accorded the priority that would be accorded the highest priority petroleum underground storage tank at that facility.

 

    5. a. The authority may award financial assistance from the fund to an eligible owner or operator in the form of a loan or a conditional hardship grant as provided in this section. An award of financial assistance, either as a loan or a grant, or a combination of both, shall, upon application therefore, be for 100% of the eligible project costs. However, an award of financial assistance that any applicant may receive from the fund for an upgrade, remediation, or closure, or any combination thereof, for any one facility, may not exceed $1,000,000.

    b. A public entity applying for financial assistance from the fund may only be awarded financial assistance in the form of an interest free loan.

    c. An applicant, other than a public entity, may apply for and receive a conditional hardship grant as provided in paragraph (1) of this subsection, or a loan for an upgrade, closure, or remediation as provided in paragraph (2) of this subsection. Financial assistance awarded an applicant pursuant to this subsection may consist entirely of a conditional hardship grant, a loan for an upgrade, or loan for a closure, or a loan for a remediation, or any combination thereof, except that the total amount of the award of financial assistance shall be subject to the per facility dollar limitation enumerated in subsection a. of this section. Notwithstanding any other provision of this subsection to the contrary, no tax exempt, nonprofit organization, corporation, or association shall be awarded a conditional hardship grant pursuant to paragraph (1) of this subsection.

    (1) A conditional hardship grant for eligible project costs of an upgrade, closure or remediation shall be awarded by the authority based upon a finding of eligibility and financial hardship and upon a finding that the applicant is an eligible owner or operator.

    In order to be eligible for a conditional hardship grant, the applicant shall have owned or operated the subject petroleum underground storage tank as of December 1, 1996 and continually thereafter or shall have inherited the property from a person who owned or operated the facility as of that date. No applicant shall be eligible for a conditional hardship grant if the applicant has a taxable income of more than $100,000 or a net worth, exclusive of the applicant's primary residence, of over $100,000.

    A finding of financial hardship by the authority shall be based upon a determination that an applicant cannot reasonably be expected to repay all or a portion of the eligible project costs if the financial assistance were to be awarded as a loan. The amount of an award of a conditional hardship grant shall be the amount of that portion of the eligible project costs the authority determines the applicant cannot reasonably be expected to repay.

    In making a finding of financial hardship for an application for the upgrade, closure, or remediation of a petroleum underground storage tank, where the petroleum underground storage tank is a part of the business property of the owner, the authority shall base its finding upon the cash flow of the applicant's business, whether or not any part of the applicant's business is related to the ownership or operation of that petroleum underground storage tank. In making a finding of financial hardship for an application for the upgrade or remediation of a petroleum underground storage tank, where the petroleum underground storage tank is not a part of the business property of the owner, the authority shall base its finding upon the applicant's taxable income in the year prior to the date of the application being submitted.

    If the authority awards a conditional hardship grant in combination with a loan pursuant to this subsection, the authority shall release to the applicant the loan monies prior to the release of the conditional hardship grant monies.

    Conditional hardship grants awarded to an applicant shall be subject to the lien provisions enumerated in section 16 of P.L. , c. (C. ) (now before the Legislature as this bill).

    (2) A loan for the eligible project costs of an upgrade, closure, and remediation shall be awarded by the authority only upon a finding that the applicant is able to repay the amount of the loan and that the applicant is an eligible owner or operator.

    In making a finding of an applicant's ability to repay a loan for the upgrade, closure, and remediation of a regulated tank, or for the remediation of a discharge from a petroleum underground storage tank, the authority shall base its finding, as applicable, upon the cash flow of the applicant's business, the applicant's taxable income and the applicant's personal and business assets, except that the authority may not consider the applicant's primary residence as collateral, except that the authority may consider the applicant's primary residence as collateral with the permission of the applicant or where the subject petroleum underground storage tank or regulated tank is located at the primary residence.

    d. The authority shall, where applicable, require an applicant applying for financial assistance from the fund to submit to the authority the financial statements of the applicant's business for three years prior to the date of the application, the most recent interim financial statement for the year of the application, the applicant's federal income tax returns, or other relevant documentation.

    e. Nothing in this section is intended to alter the priority or criteria for awarding financial assistance established pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill.

    f. An eligible owner or operator may only be awarded that amount of financial assistance for which the applicant demonstrates he could not qualify for and obtain as a commercial loan.

 

    6. An eligible owner or operator seeking financial assistance from the fund shall file an application on a form to be developed by the authority. The application form shall be submitted with the application fee. The application fee per facility for residential petroleum underground storage tanks shall be $250. The application fee per facility for nonresidential petroleum underground storage tanks shall be $500 for facilities with up to six tanks, and $1,000 for facilities with seven or more tanks.

    The authority shall adopt rules and regulations listing the filing requirements for a complete application for financial assistance. If a financial assistance 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. If the additional information is filed within the 30 days and is satisfactory to the authority, the filing date for that application shall be the initial date of application with the authority. Notwithstanding the above, if a completed application has been submitted and the applicant fails to submit the filing fee, then the filing date for the application shall not be established until the date on which the authority receives the application fee.

    An applicant shall have 120 days from receipt of notice of approval of a financial assistance award to submit to the authority an executed contract for the upgrade, closure, or remediation, or all three, as the case may be, that is consistent with the terms and conditions of the financial assistance approval. Failure to submit an executed contract within the allotted time, without good cause, may result in an alteration of an applicant's priority ranking.

 

    7. a. The authority shall award financial assistance to an owner or operator of a facility only if the facility is properly registered with the department pursuant to section 3 of P.L.1986, c.102 (C.58:10A-23), where applicable, and if all fees or penalties due and payable on the facility to the department pursuant to P.L.1986, c.102 have either been paid or the nature or the amount of the fee or penalty is being contested in accordance with law.

    b. The authority may deny an application for financial assistance, and any award of financial assistance may be recoverable by the authority, upon a finding that:

    (1) in the case of financial assistance awarded for a remediation, the discharge was proximately caused by the applicant's knowing conduct;

    (2) in the case of financial assistance awarded for a remediation, the discharge was proximately caused or exacerbated by knowing conduct by the applicant with regard to any lawful requirement applicable to petroleum underground storage tanks intended to prevent, or to facilitate the early detection of, the discharge;

    (3) the applicant failed to commence or complete a remediation, closure, or an upgrade for which an award of financial assistance was made within the time prescribed in an administrative order, an administrative consent agreement, a memorandum of agreement, or a court order; or

    (4) the applicant provided false information or withheld information on a loan or grant application, or other relevant information required to be submitted to the authority, on any matter that would otherwise render the applicant ineligible for financial assistance from the fund, that would alter the priority of the applicant to receive financial assistance from the fund, that resulted in the applicant receiving a larger grant award than the applicant would otherwise be eligible, or that resulted in payments from the fund in excess of the actual eligible project costs incurred by the applicant or the amount to which the applicant is legally eligible.

    Nothing in this subsection shall be construed to require the authority to undertake an investigation or make any findings concerning the conduct described in this subsection.

    c. An application for financial assistance from the fund for an upgrade or closure of a regulated tank shall include all regulated tanks at the facility for which the applicant is seeking financial assistance. Once financial assistance for an upgrade, closure or a remediation is awarded for a facility, no additional award of financial assistance may be made for that facility. An application for financial assistance for an upgrade or closure of a regulated tank shall be conditioned upon the applicant entering into an agreement with the department to perform, at the time of the upgrade or closure, any remediation necessary as a result of a discharge from the regulated tank and commencement of the remediation within the time prescribed and in accordance with the rules and regulations of the department.

    d. No financial assistance shall be awarded for any regulated tank to meet the upgrade or closure requirements pursuant to 42 U.S.C. §6991 et seq. or P.L.1986, c.102 (C.58:10A-21 et seq.), or for the remediation of a discharge from any such regulated tank unless the application is filed with the authority prior to January 1, 1999 and the application is complete and the application fee is received by February 1, 1999.

    e. The date of occurrence of a discharge shall not affect eligibility for financial assistance from the fund. Except for a preliminary assessment or a site investigation performed after the effective date of P.L. , c. (C. ) (now before the legislature as this bill), and except as provided in subsection g. of this section, no award of financial assistance shall be made from the fund for the otherwise eligible project costs of a remediation, closure, or an upgrade, or parts thereof, completed prior to an award of financial assistance from the fund.

    f. No financial assistance may be awarded from the fund for the remediation of a discharge from a petroleum underground storage tank if financial assistance from the Hazardous Discharge Site Remediation Fund established pursuant to section 26 of P.L.1993, c.139 (C.58:10B-4) has previously been made for a remediation at that site as a result of a discharge from that petroleum underground storage tank. No financial assistance may be awarded from the fund for the remediation of a discharge from a petroleum underground storage tank if the discharge began subsequent to the completion of an upgrade of that petroleum underground storage tank, which upgrade was intended to meet all applicable upgrade regulations of the department, no matter when the upgrade was performed.

    g. Notwithstanding any provision of P.L. , c. (C. )(now before the Legislature as this bill), where an eligible owner or operator has filed an application for financial assistance from the fund, and there are either insufficient monies in the fund or the authority has not yet acted upon the application or awarded the financial assistance, the eligible owner or operator may expend its own funds for the upgrade, closure, or remediation, and upon approval of the application, the authority shall award the financial assistance as a reimbursement of the monies expended for eligible project costs.

 

    8. a. The authority shall adopt, pursuant to the Administrative Procedure Act, P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations to:

    (1) prescribe the application forms for financial assistance and the procedures for filing such forms;

    (2) require an operator who is applying for financial assistance who is not the owner of the facility to provide a copy of the contractual relations between the operator and the owner, a certification that the owner approves the upgrade, closure, or remediation for which financial assistance is sought and a certification that the owner consents to a lien being placed upon the real property at which the facility is located;

    (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 solicit at least three bids on the upgrade, closure and the remediation prior to entering into any contract to have any work performed;

    (b) 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;

    (c) to demonstrate, where applicable, an ability to repay the amount of any loan and to provide adequate collateral to secure the amount of a loan;

    (d) to submit a certification that the applicant has not engaged in any of the conduct described in subsection b. of section 6 of P.L. , c. (C. )(now before the Legislature as this bill);

    (e) to submit a certification that any upgrade, closure, and remediation being undertaken will be or was completed or was in conformance with rules and regulations of the department;

    (f) to submit documentation concerning anticipated and actual upgrade and remediation costs; and

    (g) to submit documentation and a certification that the applicant was unable to qualify for and obtain a commercial loan for all or part of the eligible project costs;

    (5) require any financial assistance awarded to be used only for the purposes for which the award is made; and

    (6) adopt such other requirements as may be deemed necessary to carry out its responsibilities pursuant to this act.

    b. Information submitted as part of an application that results in the award of a grant from the fund shall be a public record subject to the provisions of P.L.1963, c.73 (C.47:1A-1 et seq.). Information submitted as part of an application that results solely in the award of a loan from the fund shall not be a public record subject to the provisions of P.L.1963, c.73 (C.47:1A-1 et seq.).

    c. The authority may file a lien on real property of the applicant other than the property at which the subject facility is located to secure a loan, except that such a filing shall be subject to the restrictions on the use of the applicant's primary residence as collateral, as provided in section 5 of P.L. c. , (C. )(now before the Legislature as this bill). Liens filed pursuant to this subsection shall not affect any valid lien, right or interest in the real property filed in accordance with established procedure prior to the filing of this notice of lien.

    d. In establishing requirements for applications for financial assistance, the authority:

    (1) may not impose conditions that interfere with the everyday normal operations of a financial assistance recipient's business activities, except to the extent necessary to prevent intentional actions designed to avoid repayment of any loan, or that significantly diminish the value of any loan collateral;

    (2) shall strive to minimize the complexity and costs to applicants or recipients of compliance with such requirements;

    (3) may not require as collateral for any loan, except with the applicant's consent, the primary residence of the applicant, except that this paragraph shall not apply to a loan issued from the fund for the eligible project costs for a petroleum underground storage tank at the site of the primary residence; and

    (4) 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.

 

    9. The department and the Office of the Attorney General may not take any enforcement action pursuant to section 12 of P.L.1986, c.102 (C.58:10A-32) against the owner or operator of a regulated tank for failure to upgrade or close a regulated tank or for failure to maintain evidence of financial responsibility pursuant to section 5 of P.L.1986, c.102 (C.58:10A-25), if the owner or operator, (1) has submitted an application for financial assistance from the fund prior to the date upon which the upgrade or closure is required by law to be completed, (2) the authority has not yet acted on the application as of that date, (3) the owner or operator agrees to enter into a consent agreement or a memorandum of agreement with the department to comply with the upgrade, closure, remediation, and financial responsibility requirements, and (4) the owner or operator complies with the provisions of the consent agreement or the memorandum of agreement.

 

    10. a. All loans awarded from the fund shall be for a term not to exceed ten years. Except as provided in subsection b. of section 5 of P.L. , c. (C. )(now before the Legislature as this bill), all loans shall be at a rate between two percent and the Federal Discount Rate at the time of approval, or at the time of loan closing if the discount rate is lower at that time. The authority shall determine the interest rate to be imposed based on the applicant’s ability to repay the loan.

    b. Upon the sale of the facility for which the loan was made, the unpaid balance of the loan shall become immediately payable in full. Upon the sale of a facility for which a conditional hardship grant was made pursuant to section 5 of P.L. , c. (C )(now before the Legislature as this bill), that amount of the conditional hardship grant that must be repaid, as calculated pursuant to section 16 of P.L. , c. (C. )(now pending before the Legislature as this bill), shall become immediately payable in full.

    11. Notwithstanding any other provision of P.L. , c. (C. ) (now before the Legislature as this bill), if an owner or operator maintains environmental liability or other insurance coverage for the remediation of a discharge, the insurance coverage shall be the primary coverage for the costs of a remediation. Eligible owners and operators may apply for financial assistance from the fund for any excess thereof, including any deductible, up to the per facility monetary limits set forth in section 5 of P.L. , c. (C. )(now before the Legislature as this bill). An eligible owner or operator shall file a notice of a claim with its insurance carrier prior to filing an application for financial assistance from the fund. The notice of claim shall list the fund as a beneficiary of the claim to the extent of an award of financial assistance is made from the fund. As a condition of receiving an award of financial assistance from the fund, the eligible owner or operator shall agree to diligently pursue the claim against its insurance carrier.

 

    12. The authority and the department may enter into a memorandum of agreement whereby any of the powers or responsibilities that the authority may exercise pursuant to P.L. , c.   (C. )(now before the Legislature as this bill), may be exercised by the department. The authority may require an applicant for financial assistance to enter into an agreement with the department prior to an application being deemed complete, which agreement shall provide that any upgrade, closure, or remediation will be performed pursuant to rules and regulations of the department. Any agreement, review of documents, or other powers to be exercised by the department pursuant to this section must be completed by the department within 30 days of the application being submitted to the department. Pursuant to the memorandum of agreement, the authority and the department may provide that any of the monies in the fund that may be used for administrative expenses by the authority pursuant to section 3 of P.L. , c. (C. )(now before the Legislature as this bill), may be used by the department in carrying out its responsibilities under this section.

 

    13. The authority shall establish a joint application filing, review and approval procedure whereby a person who is eligible for financial assistance from the fund, created pursuant to section 3 of P.L. , c. (C. )(now before 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 financial assistance from both funds and receive a joint response from the authority that approves or disapproves the application in whole or in part.


    14. a. Payment of any grant from the fund, or of a loan from the fund where the loan is in default and is uncollectible, for any costs relating to a remediation, shall be conditioned upon the authority being subrogated to all of the rights of an owner or operator against any insurance carrier, against any previous owner or operator of the facility where the previous owner or operator engaged in any conduct identified in paragraphs (1) or (2) of subsection b. of section 7 of P.L.     , c. (C. ) (now before the Legislature as this bill), and against any other person liable for the discharge pursuant to subsection c. of section 8 of P.L.1976, c.141 (C.58:10-23.11g), for the costs of the remediation necessitated by the discharge. In an action by the authority to enforce a right of subrogation, the authority shall be entitled to invoke all the rights and defenses available to the grant or loan recipient if the action had been brought by the grant or loan recipient against such other person. Nothing in this subsection shall be construed to affect or limit any right that an owner or operator of a petroleum underground storage tank may have under statutory or common law against any other person concerning a discharge of petroleum from that tank.

    b. The authority may seek to recover any financial assistance or that part of an award of financial assistance that exceeds the eligible project costs or that was obtained as a result of conduct described in paragraph (4) of subsection b. of section 7 of P.L. , c. (C. )(now before the Legislature as this bill). If the authority is the prevailing party in an action to recover financial assistance payments made from the fund, the authority shall be entitled to all investigative and legal costs incurred by the authority in bringing and prosecuting the action, as well as interest charges which shall accrue as of the date such payments were made from the fund, unless the court makes a finding of a lack of intent to defraud the fund. The rate of interest shall be the interest rate for judgments established pursuant to the Rules Governing the Courts of the State of New Jersey.

 

    15. a. A person who purposely, knowingly, recklessly, or negligently provides false documents or false information to the authority or to the department, or withholds documents or information, in relation to an application for financial assistance from the fund or in relation to documents or information that may be required as a condition of receiving an award of financial assistance from the fund, shall be subject to a civil penalty not to exceed $50,000. Any penalty incurred under this subsection may be recovered with costs in a summary proceeding pursuant to "the penalty enforcement law," N.J.S.2A:58-1 et seq. in the Superior Court.

    b. (1) The authority may commence a civil action in Superior Court to recover any financial assistance awarded to an applicant from the fund if financial assistance was obtained, in whole or in part, as the result of providing false documents or false information to the authority or to the department or by withholding documents or information from the authority or the department. The action to recover money awarded by the authority may be combined with any action to impose penalties provided for in subsection a. of this section.

    (2) The authority may commence a civil action in Superior Court to recover any financial assistance awarded as a loan where the recipient of the loan has not made loan repayments in accordance with the loan agreement, where any condition or provision of the loan agreement has been violated by the loan recipient, or to enforce any lien filed pursuant to the issuance of financial assistance.

    c. (1) A person who purposely or knowingly provides false documents or false information to the authority or to the department, or withholds documents or information, in relation to an application for financial assistance from the fund or in relation to documents or information that may be required as a condition of receiving an award of financial assistance from the fund, with the intent to alter the applicant's eligibility for financial assistance from the fund, alter the priority of the applicant's application to receive financial assistance from the fund, cause the applicant to receive a larger grant award than the applicant would otherwise be eligible for, or obtain financial assistance from the fund in excess of the eligible project costs, shall be guilty of a crime of the third degree.

    (2) A person who recklessly provides false documents or false information to the authority or to the department, or withholds documents or information, in relation to an application for financial assistance from the fund or in relation to documents or information that may be required as a condition of receiving an award of financial assistance from the fund, with the intent to alter the applicant's eligibility for financial assistance from the fund, alter the priority of the applicant's application to receive financial assistance from the fund, cause the applicant to receive a larger grant award than the applicant would otherwise be eligible for, or obtain financial assistance from the fund in excess of the eligible project costs, shall be guilty of a crime of the fourth degree.

 

    16. a. In addition to any other financial assistance requirements imposed by the authority pursuant to P.L. , c. (C. )(now before the Legislature as this bill), any award of financial assistance from the fund shall constitute, in each instance, a debt of the applicant to the fund. The debt shall constitute a lien on the real property at which the subject facility is located. The lien shall be in the amount of the financial assistance awarded the applicant. The lien shall attach when a notice of lien, incorporating a description of the real property on which the subject facility is located and an identification of the amount of the financial assurance awarded, is duly filed with the clerk of the Superior Court. The clerk shall promptly enter upon the civil judgment or order docket the name and address of the applicant, the address of the real property on which the subject facility is located, and the amount of the lien as set forth in the notice of lien. Upon entry by the clerk, the lien shall attach to the real property on which the subject facility is located, whether or not the applicant is insolvent.

    Where financial assistance from the fund is awarded as a combination of a loan and a grant, separate liens for the loan and the grant shall be filed. No lien shall be placed on any real property of an applicant based on a conditional hardship grant awarded pursuant to paragraph (1) of subsection c. of section 5 of P.L. , c. (C. )(now before the Legislature as this bill), for a remediation necessitated by a discharge from a petroleum underground storage tank used to store heating oil at the applicant's primary residence.

    b. A lien that is filed on real property pursuant to a loan shall be removed upon repayment of the loan.

    c. The lien that is filed on real property pursuant to a conditional hardship grant shall be removed upon repayment of the amount of the grant that is unsatisfied or upon the end of a 15 year period in which the site for which the financial assistance was awarded continued to be operated in substantially the same manner as it was operated at the time of the award of financial assistance. The period of operation need not run consecutively. Beginning with the 11th year of operating in substantially the same manner, 20% of the conditional hardship grant shall be deemed satisfied with an additional 20% to be satisfied each year until the entire amount of the conditional hardship grant is satisfied at the end of the 15 year period. The owner or operator of the facility claiming to have satisfied a conditional hardship grant due to the 15 year period of operation, shall submit a certification of this fact to the authority. Upon repayment of the unsatisfied grant award or upon submittal of this certification, unless the authority has made a finding that the certification is not correct, the authority shall remove the lien from the property.

    Where real property for which a conditional hardship grant was awarded is not being operated in substantially the same manner, the 15 year period to satisfy the lien shall be tolled. If at any time prior to the satisfaction of the lien the property is developed or operated, or proposed for development or operation, for a purpose that is not substantially the same as its operation at the time of the award of the conditional hardship grant, the grant recipient shall so certify to the authority upon the change in operation. Upon receipt of this certification, the authority shall determine, based upon the new operation of the property if the financial assistance shall continue as a conditional hardship grant or if it shall be converted into a loan. In making this determination, the authority shall base its decision on the financial hardship factors used in determining the original eligibility for the conditional hardship grant.

    The authority may take whatever enforcement actions it deems necessary to verify the operation of any property for which a conditional hardship grant was made.

    d. The provisions of this section do not apply to any real property of an applicant who is a public entity.

 

    17. a. Within 180 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.), rules and regulations for the administration of the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund and the issuance of financial assistance therefrom as necessary to implement this act.

    b. Within 180 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.), rules and regulations for the administration of the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund and the issuance of financial assistance therefrom as necessary to implement this act.

 

    18. There is imposed upon the owner or operator of a facility who is required to maintain evidence of financial responsibility pursuant to section 5 of P.L.1986, c.102 (C.58:10A-25) or pursuant to 42 U.S.C. §6991 et seq., and any regulations adopted pursuant thereto, and who does not maintain that evidence of financial responsibility, an annual surcharge. The annual surcharge shall be $1,500 for facilities with one or two petroleum underground storage tanks, $3,500 for facilities with three to six petroleum underground storage tanks, and $6,000 for facilities with seven or more petroleum underground storage tanks. The owner or operator shall pay this surcharge to the authority for deposit into the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund.

    Nothing in this section shall be construed to negate the requirement of an owner or operator of a facility to maintain evidence of financial responsibility as may be required pursuant to section 5 of P.L.1986, c.102 (C.58:10A-25) or pursuant to 42 U.S.C.§6991 et seq.

    The New Jersey Economic Development Authority, in consultation with the Department of Environmental Protection shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations imposing the surcharge.

 

    19. a. The New Jersey Economic Development Authority and the Department of Environmental Protection shall present a joint annual report to the presiding officers of the two houses of the Legislature and to the chairmen and members of the Assembly Agriculture and Waste Management Committee and the Senate Environment Committee, or their successors, on the status of the financial assistance program, which shall include: a statement on receipts and expenditures for the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund; the number of applications for financial assistance received and the actions taken on the applications; the amount of financial assistance awarded as loans or as grants for both public entities and other applicants; the identity and location of the facilities receiving the financial assistance; an assessment of the adequacy of current funding levels in meeting the statutory objectives of the fund; an accounting of expenses incurred by the authority in administering the fund; and such other information, including any legislative or administrative recommendations for program changes, as the authority and the department may deem appropriate or useful. The annual reports shall be made not later than March 1 of each year beginning one year following the effective date of this act. The first report shall also contain a needs survey, which shall estimate the scope and projected costs of all potentially eligible remediation applications for financial assistance from the fund.

 

    20. Nothing in 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 claims made to, or approved from, the Petroleum Underground Storage Tank Remediation, and Closure Upgrade Fund, and the extent of the State's or authority's responsibility for the payment or reimbursement of an approved application shall be limited to the amount of otherwise unobligated moneys available in the fund;

    (2) impose any liability on the State or the authority for the quality of any work performed pursuant to a remediation, closure or an upgrade for which financial assistance is made; or

    (3) alter any obligation of an owner or operator of a facility, who is eligible for financial assistance from the fund, to comply in a timely manner with all lawful requirements relating to the facility.

 

    21. There is appropriated from the special account in the General Fund created pursuant to Article VIII, Section II, paragraph 6 of the New Jersey Constitution $8,000,000 to the New Jersey Economic Development Authority which shall be deposited into the Petroleum Underground Storage Tank Remediation, Upgrade and Closure Fund, established pursuant to section 3 of P.L. , c. (C. ) (pending in the Legislature as this bill), for use for any of the purposes for which that fund has been established. Expenditures of moneys in the fund shall be subject to the conditions set forth in Article VIII, Section II, paragraph 6 of the New Jersey Constitution and the provisions in P.L. , c. (C. ) (now before the Legislature as this bill).

 

    22. Any person who has owned or operated an underground storage tank as defined pursuant to section 2 of P.L.1986, c.102 (C.58:10A-22) who has not registered that tank pursuant to the provisions of P.L.1986, c.102 (C.58:10A-21 et seq.), shall not be subject to a civil penalty for the failure to register that underground storage tank if the person, within one year of the effective date of this act, registers the tank pursuant to P.L.1986, c.102. The department may require that person to pay any registration fees that would have been paid had the underground storage tank been registered in accordance with law.

 

    23. Sections 17 and 18 of P.L.1986, c.102 (C.58:10A-36 and C.58:10A-37) are repealed, except that in order to assure the uninterrupted funding of loans for regulated tank upgrades pending the adoption of rules and regulations pursuant to section 17 of P.L. , c.    , (C. )(pending in the Legislature as this bill), rules and regulations adopted pursuant to section 17 of P.L.1986, c.102 (C.58:10A-37) that are in effect on the effective date of P.L. , c. (C. )(pending in the Legislature as this bill), shall continue in force until the adoption of rules and regulations by the authority pursuant to section 17 of P.L. , c. (C. )(now before the Legislature as this bill). The repayment of any outstanding loans made from the State Underground Storage Tank Improvement Fund shall be made to the New Jersey Economic Development Authority for deposit into the Petroleum Underground Storage Tank Remediation, and Closure Upgrade Fund. Any monies in the State Underground Storage Tank Improvement Fund is transferred to the New Jersey Economic Development Authority for deposit into the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund.

 

    24. Prior to July 1, 1997, or within six months of an underground storage tank being upgraded and the site remediated as required pursuant to P.L.1986, c.102 (C.58:10A-21 et seq.), whichever is later, the owner or operator of that underground storage tank shall submit to the department evidence of financial responsibility for taking corrective action and compensating third parties as is required pursuant to section 5 of P.L.1986, c.102 (C.58:10A-25) or pursuant to 42 U.S.C.§6991 et seq. After a regulated tank is upgraded, the New Jersey Spill Compensation Fund, created pursuant to the "Spill Compensation and Control Act," P.L.1976, c.141 (C.58:10-23.11 et seq.) shall no longer serve as the evidence of financial responsibility for the regulated tank.

 

    25. There is appropriated from the General Fund to the New Jersey Economic Development Authority the sum of $50,000 for the adoption of rules and regulations for administering the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund, established pursuant to section 3 of P.L. , c. (C. ). The authority shall transfer such sums from this appropriation to the Department of Environmental Protection as the authority and the department deem necessary to allow the department to adopt rules and regulations as necessary pursuant to this act. Upon sufficient monies being deposited into the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund that may be used for these purposes, the authority shall reimburse the General Fund the amount of this appropriation.

 

    26. This act shall take effect immediately, but sections 4 through 20 of this act shall remain inoperative until the adoption of appropriate rules and regulations therefor. Upon the effective date of this act, the New Jersey Economic Development Authority, the Department of Environmental Protection, and the Department of the Treasury may take such actions as necessary to carry out the purposes of this act.

 

 

STATEMENT

 

    This bill, the "Underground Storage Tank Finance Act," implements the policy adopted by the public when it overwhelmingly voted to amend the State Constitution to dedicate moneys to underground storage tank upgrades, closures, and remediations.

    This bill appropriates the first of the dedicated moneys, $8 million, to the newly created Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund. The fund, to be administered by the New Jersey Economic Development Authority, would be used to give loans and grants to eligible owners and operators for the upgrade or closure of underground storage tanks or for remediations of discharges therefrom. Eligible owners and operators must have fewer than 25 tanks, have a net worth of less than $10 million, and be unable to obtain a commercial loan.

    Strict criteria is established to obtain a hardship grant including a demonstration of an inability to pay a loan. Grant recipient must stay in business for 15 years or a portion of the grant must be repaid. Loans will be given only if a person can repay the loan. The interest on loans to governmental entities will be at zero percent and will be set at low levels for all others. Loans or grants for upgrades and closures will only be made for regulated tanks.

    The bill gives funding priority to 1) environmental need; 2) federally regulated tanks; 3) State regulated tanks; 4) remediations; and 5) closures. The bill prevents enforcement actions from being taken for failure to upgrade if a person applies for financial assistance and is waiting for it to be provided. The bill also requires all upgraded tanks to obtain evidence of financial responsibility, requires all tanks that do not have such evidence to pay a surcharge, and provides that the New Jersey Spill Compensation Fund will not serve as such evidence once a tank has been upgraded.

 

 

 

Creates New Jersey Underground Storage Tank Remediation, Upgrade, and Closure Fund; makes an appropriation.