SENATE, No. 868

 

STATE OF NEW JERSEY

 

INTRODUCED FEBRUARY 26, 1996

 

 

By Senator McGREEVEY

 

 

An Act concerning certain public utility property subject to closure, supplementing P.L.1940, c.5 (C.54:30A-58), and amending P.L.1983, c.330.

 

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

 

    1. a. Notwithstanding the provisions of section 10 of P.L.1940, c.5 (C.54:30A-58) or any other provision of law to the contrary, for the purpose of apportioning public utility taxes, the unit value of an electric generating station included in the scheduled property of a public utility subject to closure shall be proportionately reduced during the four years after the closure of that scheduled property, based upon the generating capacity of the property in the year preceding the closure.

    b. Notwithstanding the provisions of section 10 of P.L.1940, c.5 (C.54:30A-58) or any other provision of law to the contrary, for the purpose of apportioning public utility taxes, the unit value of a gas manufacturing plant included in the scheduled property of a public utility subject to closure shall be proportionately reduced during the four years after the closure of that scheduled property, based upon the generating capacity of the property in the year preceding the closure.

 

    2. Section 3 of P.L.1983, c.330 (C.13:1K-8) is amended to read as follows:

    3. As used in this act:

    "Remedial action workplan" means a plan for the remedial action to be undertaken at an industrial establishment, or at any area to which a discharge originating at the industrial establishment is migrating or has migrated; a description of the remedial action to be used to remediate the industrial establishment; a time schedule and cost estimate of the implementation of the remedial action; and any other relevant information the department deems necessary;

    "Closing operations" means:

    (1) the cessation of operations resulting in at least a 90 percent reduction in the total value of the product output from the entire industrial establishment, as measured on a constant, annual date-specific basis, within any five year period, or, for industrial establishments for which the product output is undefined, a 90 percent reduction in the number of employees or a 90 percent reduction in the area of operations of an industrial establishment within any five year period; provided, however, the department may approve a waiver of the provisions of this paragraph for any owner or operator who, upon application and review, evidences a good faith effort to maintain and expand product output, the number of employees, or area of operations of the affected industrial establishment; except that for any electric generating station or gas manufacturing plant owned by a public utility, the reduction in product output, number of employees or area of operations shall be measured over a one year period;

    (2) any temporary cessation of operations of an industrial establishment for a period of not less than two years; except that for any electric generating station or gas manufacturing plant owned by a public utility, any temporary cessation of operations for a period of not less than one year;

    (3) any judicial proceeding or final agency action through which an industrial establishment becomes nonoperational for health or safety reasons;

    (4) the initiation of bankruptcy proceedings pursuant to Chapter 7 of the federal Bankruptcy Code, 11 U.S.C.{701) et seq. or the filing of a plan of reorganization that provides for a liquidation pursuant to Chapter 11 of the federal Bankruptcy Code, 11 U.S.C.{1101) et seq.;     (5) any change in operations of an industrial establishment that changes the industrial establishment's Standard Industrial Classification number to one that is not subject to this act; or

    (6) the termination of a lease unless there is no disruption in operations of the industrial establishment, or the assignment of a lease;              "Transferring ownership or operations" means:

    (1) any transaction or proceeding through which an industrial establishment undergoes a change in ownership;

    (2) the sale or transfer of more than 50% of the assets of an industrial establishment within any five year period, as measured on a constant, annual date-specific basis;

    (3) the execution of a lease for a period of 99 years or longer for an industrial establishment; or

    (4) the dissolution of an entity that is an owner or operator or an indirect owner of an industrial establishment, except for any dissolution of an indirect owner of an industrial establishment whose assets would have been unavailable for the remediation of the industrial establishment if the dissolution had not occurred;

    "Change in ownership" means:

    (1) the sale or transfer of the business of an industrial establishment or any of its real property;

    (2) the sale or transfer of stock in a corporation resulting in a merger or consolidation involving the direct owner or operator or indirect owner of the industrial establishment;

    (3) the sale or transfer of stock in a corporation, or the transfer of a partnership interest, resulting in a change in the person holding the controlling interest in the direct owner or operator or indirect owner of an industrial establishment;

    (4) the sale or transfer of title to an industrial establishment or the real property of an industrial establishment by exercising an option to purchase; or

    (5) the sale or transfer of a partnership interest in a partnership that owns or operates an industrial establishment, that would reduce, by 10% or more, the assets available for remediation of the industrial establishment;

    "Change in ownership" shall not include:

    (1) a corporate reorganization not substantially affecting the ownership of the industrial establishment;

    (2) a transaction or series of transactions involving the transfer of stock, assets or both, among corporations under common ownership, if the transaction or transactions will not result in the diminution of the net worth of the corporation that directly owns or operates the industrial establishment by more than 10%, or if an equal or greater amount in assets is available for the remediation of the industrial establishment before and after the transaction or transactions;

    (3) a transaction or series of transactions involving the transfer of stock, assets or both, resulting in the merger or de facto merger or consolidation of the indirect owner with another entity, or in a change in the person holding the controlling interest of the indirect owner of an industrial establishment, when the indirect owner's assets would have been unavailable for cleanup if the transaction or transactions had not occurred;

    (4) a transfer where the transferor is the sibling, spouse, child, parent, grandparent, child of a sibling, or sibling of a parent of the transferee;

    (5) a transfer to confirm or correct any deficiencies in the recorded title of an industrial establishment;

    (6) a transfer to release a contingent or reversionary interest except for any transfer of a lessor's reversionary interest in leased real property;

    (7) a transfer of an industrial establishment by devise or intestate succession;

    (8) the granting or termination of an easement or a license to any portion of an industrial establishment;

    (9) the sale or transfer of real property pursuant to a condemnation proceeding initiated pursuant to the "Eminent Domain Act of 1971," P.L.1971, c.361 (C.20:3-1 et seq.);

    (10) execution, delivery and filing or recording of any mortgage, security interest, collateral assignment or other lien on real or personal property; or

    (11) any transfer of personal property pursuant to a valid security agreement, collateral assignment or other lien, including, but not limited to, seizure or replevin of such personal property which transfer is for the purpose of implementing the secured party's rights in the personal property which is the collateral.

    "Department" means the Department of Environmental Protection and Energy;

    "Hazardous substances" means those elements and compounds, including petroleum products, which are defined as such by the department, after public hearing, and which shall be consistent to the maximum extent possible with, and which shall include, the list of hazardous substances adopted by the Environmental Protection Agency pursuant to Section 311 of the "Federal Water Pollution Control Act Amendments of 1972" (33 U.S.C.{1321) and the list of toxic pollutants designated by Congress or the Environmental Protection Agency pursuant to Section 307 of that act (33 U.S.C.{1317); except that sewage and sewage sludge shall not be considered as hazardous substances for the purposes of this act;

    "Hazardous waste" shall have the same meaning as provided in section 1 of P.L.1976, c.99 (C.13:1E-38);

    "Industrial establishment" means any place of business engaged in operations which involve the generation, manufacture, refining, transportation, treatment, storage, handling, or disposal of hazardous substances or hazardous wastes on-site, above or below ground, having a Standard Industrial Classification number within 22-39 inclusive, 46-49 inclusive, 51 or 76 as designated in the Standard Industrial Classifications Manual prepared by the Office of Management and Budget in the Executive Office of the President of the United States. Those facilities or parts of facilities subject to operational closure and post-closure maintenance requirements pursuant to the "Solid Waste Management Act," P.L.1970, c.39 (C.13:1E-1 et seq.), the "Major Hazardous Waste Facilities Siting Act," P.L.1981, c.279 (C.13:1E-49 et seq.) or the "Solid Waste Disposal Act" (42 U.S.C.{6901 et seq.), or any establishment engaged in the production or distribution of agricultural commodities, shall not be considered industrial establishments for the purposes of this act. The department may, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), exempt certain sub-groups or classes of operations within those sub-groups within the Standard Industrial Classification major group numbers listed in this subsection upon a finding that the operation of the industrial establishment does not pose a risk to public health and safety;

    "Negative declaration" means a written declaration, submitted by the owner or operator of an industrial establishment or other person assuming responsibility for the remediation under paragraph (3) of subsection b. of section 4 of P.L.1983, c.330 to the department, certifying that there has been no discharge of hazardous substances or hazardous wastes on the site, or that any such discharge on the site or discharge that has migrated or is migrating from the site has been remediated in accordance with procedures approved by the department and in accordance with any applicable remediation regulations;

    "Discharge" means an intentional or unintentional action or omission resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, or dumping of a hazardous substance or hazardous waste into the waters or onto the lands of the State;

    "No further action letter" means a written determination by the department that, based upon an evaluation of the historical use of the industrial establishment and the property, or of an area of concern or areas of concern, as applicable, and any other investigation or action the department deems necessary, there are no discharged hazardous substances or hazardous wastes present at the site of the industrial establishment, at the area of concern or areas of concern, or at any other site to which discharged hazardous substances or hazardous wastes originating at the industrial establishment have migrated, and that any discharged hazardous substances or hazardous wastes present at the industrial establishment or that have migrated from the site have been remediated in accordance with applicable remediation regulations;

    "Indirect owner" means any person who holds a controlling interest in a direct owner or operator, holds a controlling interest in another indirect owner, or holds an interest in a partnership which is an indirect owner or a direct owner or operator, of an industrial establishment;

    "Direct owner or operator" means any person that directly owns or operates an industrial establishment. A holder of a mortgage or other security interest in the industrial establishment shall not be deemed to be a direct owner or operator of the industrial establishment unless or until it loses its exemption under P.L.1993, c.112 (C.58:10-23.11g4 et al.) or obtains title to the industrial establishment by deed of foreclosure, by other deed, or by court order or other process;

    "Area of concern" means any location where hazardous substances or hazardous wastes are or were known or suspected to have been discharged, generated, manufactured, refined, transported, stored, handled, treated, or disposed, or where hazardous substances or hazardous wastes have or may have migrated;

    "Remediation standards" means the combination of numeric and narrative standards to which hazardous substances or hazardous wastes must be investigated or remediated as established by the department pursuant to section 35 of P.L.1993, c.139 (C.58:10B-12);     "Owner" means any person who owns the real property of an industrial establishment or who owns the industrial establishment. A holder of a mortgage or other security interest in the industrial establishment shall not be deemed to be an owner of the industrial establishment unless or until it loses its exemption under P.L.1993, c.112 (C.58:10-23.11g4 et al.) or obtains title to the industrial establishment by deed of foreclosure, by other deed, or by court order or other process;

    "Operator" means any person, including users, tenants, or occupants, having and exercising direct actual control of the operations of an industrial establishment. A holder of a mortgage or other security interest in the industrial establishment shall not be deemed to be an operator of the industrial establishment unless or until it loses its exemption under P.L.1993, c.112 (C.58:10-23.11g4 et al.) or obtains title to the industrial establishment by deed of foreclosure, by other deed, or by court order or other process;

    "Preliminary assessment" means the first phase in the process of identifying areas of concern and determining whether hazardous substances or hazardous wastes are or were present at an industrial establishment or have migrated or are migrating from the industrial establishment, and shall include the initial search for and evaluation of, existing site specific operational and environmental information, both current and historic, to determine if further investigation concerning the documented, alleged, suspected or latent discharge of any hazardous substance or hazardous waste is required. The evaluation of historic information shall be conducted from 1932 to the present, except that the department may require the search for and evaluation of additional information relating to ownership and use of the site prior to 1932 if such information is available through diligent inquiry of public records;

    "Remediation" or "remediate" means all necessary actions to investigate and clean up any known, suspected, or threatened discharge of hazardous substances or hazardous wastes, including, as necessary, the preliminary assessment, site investigation, remedial investigation, and remedial action;

    "Remedial action" means those actions taken at an industrial establishment or offsite of an industrial establishment if hazardous substances or hazardous wastes have migrated or are migrating therefrom, as may be required by the department to protect public health, safety, and the environment. These actions may include the removal, treatment, containment, transportation, securing, or other engineering measures, whether of a permanent nature or otherwise, designed to ensure that any discharged hazardous substances or hazardous wastes at the site or that have migrated or are migrating from the site, are remediated in compliance with the applicable remediation standards;

    "Remedial investigation" means a process to determine the nature and extent of a discharge of hazardous substances or hazardous wastes at an industrial establishment or a discharge of hazardous substances or hazardous wastes that have migrated or are migrating from the site and the problems presented by a discharge, and may include data collection, site characterization, sampling, monitoring, and the gathering of any other sufficient and relevant information necessary to determine the necessity for remedial action and to support the evaluation of remedial actions if necessary;

    "Site investigation" means the collection and evaluation of data adequate to determine whether or not discharged hazardous substances or hazardous wastes exist at the industrial establishment or have migrated or are migrating from the site at levels in excess of the applicable remediation standards. A site investigation shall be developed based upon the information collected pursuant to the preliminary assessment.

(cf: P.L.1993, c.39, s.3)

 

    3. This act shall take effect immediately.

 

 

STATEMENT

 

    Under current law, when an electric generating station or a gas manufacturing plant closes, the municipality where the utility is located incurs an immediate elimination of public utility tax allocation payments. For many municipalities this abrupt reduction in allocation payments causes an undue hardship.

    This bill would phase out these payments over five years by proportionately reducing the value of the utility's closed property. This will ensure a gradual reduction in the allocation of payments to the affected municipality.

    The bill would also amend the definition of "closing operations" in the "Industrial Site Recovery Act," P.L.1983, c.330 (C.13:1K-6 et seq.) to measure the period in which a closing takes place over a one year period rather than a five year period for public utility owned electric generating stations and gas manufacturing plants. Therefore, upon a 90 percent reduction in product output, or if applicable, a 90% reduction in the number of employees or area of operations, measured over a one year period, a public utility would be required to remediate an electric generating station or gas manufacturing plant.


                               

 

Phases out the public utility tax apportionment value of electric generating stations and gas manufacturing plants subject to closure; makes certain changes to ISRA with regard to such closures.