ASSEMBLY, No. 2837

 

STATE OF NEW JERSEY

 

INTRODUCED MARCH 20, 1997

 

 

By Assemblywoman MYERS and Assemblyman AUGUSTINE

 

 

An Act concerning stranded investment costs, and making an appropriation.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. The Legislature finds and declares that in response to the need to provide for the environmentally-sound and proper disposal of solid waste, the Legislature enacted the "Solid Waste Management Act," P.L.1970, c.39 (C.13:1E-1 et seq.), which required each county, or a public authority designated by the governing body of the county, to adopt and implement a district solid waste management plan for the 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 requiring constituent municipalities and local haulers to use designated in-county solid waste facilities for solid waste processing or disposal, all in furtherance 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 from that date 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 stranded investment costs incurred in developing costly solid waste facilities for the purposes of implementing State-mandated district solid waste management plans.

    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 and loan program hereinafter established therefor.

 

    2. As used in this act:

    "Cost" means, in addition to the usual connotation thereof, any expenses related to the planning, acquisition, or construction of solid waste facilities, including the principal on bonds issued to finance the construction of solid waste facilities.

    "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.

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

    "Stranded investments" means any solid waste 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.

 

    3. a. The commissioner shall for each fiscal year develop a priority list for providing grants or loans to assist counties and public authorities in the payment of stranded investment costs in accordance with the priorities hereinafter established. The commissioner shall prioritize funding to counties and public authorities according to per capita stranded investment cost in the county, giving highest priority for funding to the county or public authority with the greatest per capita stranded investment cost in the State.

    b. 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 or loan to be included on the priority list shall be determined in accordance with the provisions of subsection a. and subsection c. of this section.

    c. In order to be eligible for funding pursuant to this section, a county or public authority shall prepare, and submit to the department within six months of the effective date of P.L. , c. (pending in the Legislature as this bill) and annually thereafter, a plan to reduce the solid waste charges received at the solid waste 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 solid waste facility for solid waste disposal;

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

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

    (5) the prudent application of grant or loan moneys to the plan prepared by the county or public authority to ensure the long-term competitiveness of the solid waste facility as well as the payment of principal on bonded indebtedness.

    The plan shall include an explanation of any particular circumstances that impede the ability of the county or public authority to reduce the solid waste charges received at the solid waste facility for solid waste disposal without creating an undue fiscal burden on taxpayers or ratepayers.

    The plan shall also include a report related to stranded investments of the public authority or county. The report shall summarize individual schedules of outstanding debt related to the stranded investment costs incurred by the public authority or county, including the status of: installment requirements for the payment of interest and principal on bonds; plans to refund or refinance bonds; an updated stranded investment cost recovery analysis; and proposed debt service coverage options.

 

    4. a. There is created in the Department of Community Affairs a nonlapsing, revolving fund entitled the "Solid Waste Stranded Investment Cost Recovery Fund." This fund shall be the depository for any appropriations, grants or other moneys that may be made available to carry out the purposes of this act. Interest earned on these deposits shall accrue to the fund.

    b. Moneys deposited in the fund shall be used exclusively for grants and interest-free loans to assist counties and public authorities in the payment of stranded investment costs as provided in section 3 of this act.

 

    5. There is appropriated from the General Fund to the Department of Community Affairs the sum of $20,000,000 for grants and loans to counties and public authorities to assist in the payment of stranded investment costs.

 

    6. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill would establish a grant and loan program to assist counties and public authorities in the payment of stranded investment costs. The commissioner shall prioritize funding to counties and public authorities according to per capita stranded investment cost in the county, giving highest priority for funding to the county or public authority with the greatest per capita stranded investment cost in the State.

    In order to qualify for funding, a county or public authority must prepare, and submit to the Department of Community Affairs, a plan to reduce the solid waste charges ("tipping fees") received at the solid waste 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 solid waste facility for solid waste disposal; (3) the refinancing of debt to reduce the solid waste charges received at the solid waste facility for solid waste disposal; (4) any other arrangements as may be necessary to reduce the solid waste charges received at the solid waste facility for solid waste disposal; or (5) the prudent application of grant or loan 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 principal on bonded indebtedness. The plan shall also include a report related to stranded investments of the public authority or county.

    The bill would appropriate $20 million to the Department of Community Affairs for the grant and loan program.

 

 

                             

Provides grants and loans to certain counties and public authorities to offset solid waste stranded investment costs; appropriates $20 million.