A4770

An Act concerning watershed moratorium offset aid and amending various sections of the statutory law.

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

1. Section 4 of P.L.2025, c.36 (C.13:20-19.1) is amended to read as follows:

4. a. Funds shall be distributed each State fiscal year from the “Highlands Protection Fund” created pursuant to section 21 of P.L.2004, c.120 (C.13:20-19) , the “Global Warming Solutions Fund” created pursuant to section 6 of P.L.2007, c.340 (C.26:2C-50), or the “Watershed Management Fund,” created pursuant to section 4 of P.L.1997, c.261 (C.58:29-4), to each municipality within the Highlands Region that does not receive watershed moratorium offset aid pursuant to section 1 of P.L.1999, c.225 (C.58:29-8), but hosts watershed lands for those watershed lands, as determined by the Highlands Water Protection and Planning Council, in amounts equal to the per acre rate provided for watershed moratorium offset aid.

b. The State Treasurer shall include in its annual budget request to the Governor the moneys necessary to distribute funds to those municipalities eligible for watershed property municipal aid pursuant to subsection a. of this section. The Legislature shall appropriate the necessary funds to the department for this purpose.

c. A municipality shall utilize at least 25 percent of any funds received pursuant to this section for school funding purposes.

(cf: P.L.2025, c.36, s.4)

2. Section 7 of P.L.2007, c.340 (C.26:2C-51) is amended to read as follows:

7. a. The agencies administering programs established pursuant to this section shall maximize coordination in the administration of the programs to avoid overlap between the uses of the fund prescribed in this section.

b. Moneys in the fund, after appropriation annually for payment of administrative costs authorized pursuant to subsection c. of this section, shall be annually appropriated and used for the following purposes:

(1) Sixty percent shall be allocated to the New Jersey Economic Development Authority to provide grants and other forms of financial assistance to commercial, institutional, and industrial entities to support end-use energy efficiency projects and new, efficient electric generation facilities that are state of the art, as determined by the department, including but not limited to energy efficiency and renewable energy applications, to develop combined heat and power production and other high efficiency electric generation facilities, to stimulate or reward investment in the development of innovative carbon emissions abatement technologies with significant carbon emissions reduction or avoidance potential, to develop qualified offshore wind projects pursuant to section 3 of P.L.2010, c.57 (C.48:3-87.1), and to provide financial assistance to manufacturers of equipment associated with qualified offshore wind projects. The authority, in consultation with the board and the department, shall determine: (a) the appropriate level of grants or other forms of financial assistance to be awarded to individual commercial, institutional, and industrial sectors and to individual projects within each of these sectors; (b) the evaluation criteria for selecting projects to be awarded grants or other forms of financial assistance, which criteria shall include the ability of the project to result in a measurable reduction of the emission of greenhouse gases or a measurable reduction in energy demand, provided, however, that neither the development of a new combined heat and power production facility, nor an increase in the electrical and thermal output of an existing combined heat and power production facility, shall be subject to the requirement to demonstrate such a measurable reduction; and (c) the process by which grants or other forms of financial assistance can be applied for and awarded including, if applicable, the payment terms and conditions for authority investments in certain projects with commercial viability;

(2) Twenty percent shall be allocated to the board to support programs that are designed to reduce electricity demand or costs to electricity customers in the low-income and moderate-income residential sector with a focus on urban areas, including efforts to address heat island effect and reduce impacts on ratepayers attributable to the implementation of P.L.2007, c.340 (C.26:2C-45 et al.) or to support the light duty plug-in electric vehicle incentive program and the incentive program for in-home electric vehicle service equipment established pursuant to sections 4 and 6 of P.L.2019, c.362 (C.48:25-4 and C.48:25-6). For the purposes of this paragraph, the board, in consultation with the authority and the department, shall determine the types of programs to be supported and the mechanism by which to quantify benefits to ensure that the supported programs result in a measurable reduction in energy demand or accomplishment of the plug-in electric vehicle goals established pursuant to section 3 of P.L.2019, c.362 (C.48:25-3);

(3) Ten percent shall be allocated to the department to support programs designed to promote local government efforts to plan, develop and implement measures to reduce greenhouse gas emissions, including but not limited to technical assistance to local governments, and the awarding of grants and other forms of assistance to local governments to conduct and implement energy efficiency, renewable energy, and distributed energy programs and land use planning where the grant or assistance results in a measurable reduction of the emission of greenhouse gases or a measurable reduction in energy demand. For the purpose of conducting any program pursuant to this paragraph, the department, in consultation with the authority and the board, shall determine: (a) the appropriate level of grants or other forms of financial assistance to be awarded to local governments; (b) the evaluation criteria for selecting projects to be awarded grants or other forms of financial assistance; (c) the process by which grants or other forms of financial assistance can be applied for and awarded; and (d) a mechanism by which to quantify benefits; and

(4) Ten percent shall be allocated to the department to support programs that enhance the stewardship and restoration of the State’s forests and tidal marshes that provide important opportunities to sequester or reduce greenhouse gases , and to finance the payment of watershed moratorium offset aid pursuant to section 1 of P.L.1999, c.225 (C.58:29-8) or watershed property municipal aid pursuant to section 4 of P.L.2025, c.36 (C.13:20-19.1).

c. (1) The department may use up to four percent of the total amount in the fund each year to pay for administrative costs justifiable and approved in the annual budget process, incurred by the department in administering the provisions of P.L.2007, c.340 (C.26:2C-45 et al.) and in administering programs to reduce the emissions of greenhouse gases including any obligations that may arise under subsection a. of section 11 of P.L.2007, c.340 (C.26:2C-55).

(2) The board may use up to two percent of the total amount in the fund each year to pay for administrative costs justifiable and approved in the annual budget process, incurred by the board in administering the provisions of P.L.2007, c.340 (C.26:2C-45 et al.) and in administering programs to reduce the emissions of greenhouse gases including any obligations that may arise under subsection a. of section 11 of P.L.2007, c.340 (C.26:2C-55).

(3) The New Jersey Economic Development Authority may use up to two percent of the total amount in the fund each year to pay for administrative costs justifiable and approved in the annual budget process, incurred by the authority in administering the provisions of P.L.2007, c.340 (C.26:2C-45 et al.) and in administering programs to reduce the emissions of greenhouse gases.

d. The State Comptroller shall conduct or supervise independent audit and fiscal oversight functions of the fund and its uses.

(cf: P.L.2019, c.362, s.12)

3. Section 4 of P.L.1968, c.49 (C.46:15-8) is amended to read as follows:

4. a. The proceeds of the fees collected by the county recording officer, as authorized by P.L.1968, c.49 (C.46:15-5 et seq.), shall be accounted for and remitted to the county treasurer.

b. (1) The county portion of the basic fee collected pursuant to paragraph (1) of subsection a. of section 3 of P.L.1968, c.49 (C.46:15-7) shall be retained by the county treasurer for the use of the county.

(2) The State portion of the basic fee, the additional fee, and the general purpose fee shall be paid to the State Treasurer for the use of the State. Payments shall be made to the State Treasurer on the tenth day of each month following the month of collection.

c. (1) Amounts, not in excess of $25,000,000, paid during the State fiscal year to the State Treasurer from the payment of the State portion of the basic fee shall be credited to the “Shore Protection Fund” created pursuant to section 1 of P.L.1992, c.148 (C.13:19-16.1), in the manner established under that section.

(2) In addition to the amounts credited to the “Shore Protection Fund” pursuant to paragraph (1) of this subsection, amounts equal to $12,000,000 [in each of the first 10 years after the date of enactment of the “Highlands Water Protection and Planning Act,” P.L.2004, c.120 (C.13:20-1 et al.) and to $5,000,000 in each year thereafter] , paid during the State fiscal year to the State Treasurer from the payment of fees collected by the county recording officer other than the additional fee of $0.75 for each $500 of consideration or fractional part thereof recited in the deed in excess of $150,000 shall be credited to the “Highlands Protection Fund” created pursuant to section 21 of P.L.2004, c.120 (C.13:20-19), in the manner established under that section. No monies shall be credited to the “Highlands Protection Fund” pursuant to this paragraph until and unless the full amount of $25,000,000 has first been credited to the “Shore Protection Fund” pursuant to paragraph (1) of this subsection.

(3) In addition to the amounts credited pursuant to paragraphs (1) and (2) of this subsection, commencing with the first State fiscal year next following the enactment of P.L.2021, c.126, an amount equal to $20,000,000 shall annually be credited to the Special Needs Housing Trust Fund, created pursuant to section 1 of P.L.2005, c.163 (C.34:1B-21.25a), in the manner established under that section.

d. All amounts paid to the State Treasurer from the payment of the additional fee shall be credited to the Neighborhood Preservation Nonlapsing Revolving Fund established pursuant to P.L.1985, c.222 (C.52:27D-301 et al.), in the manner established under section 20 thereof (C.52:27D-320).

(cf: P.L.2021, c.126, s.1)

4. Section 4 of P.L.1997, c.261 (C.58:29-4) is amended to read as follows:

4. The “Watershed Management Fund,” hereinafter referred to as the “fund,” is hereby established as a nonlapsing, revolving fund in the Department of Environmental Protection. The fund shall be credited annually with [all monies appropriated] an amount equal to five percent of the six percent of the revenue annually derived from the tax imposed pursuant to the “Corporation Business Tax Act (1945),” P.L.1945, c.162 (C.54:10A-1 et seq.), as amended and supplemented, or any other State law of similar effect, dedicated to paying or financing the cost of water quality point and nonpoint source pollution monitoring, watershed based water resource planning and management, and nonpoint source pollution prevention projects, pursuant to the requirements of Article VIII, Section II, paragraph 6, subparagraph (a) of the New Jersey Constitution. Any interest that accrues on monies in the fund shall be credited to the fund.

(cf: P.L.1997, c.261, s.4)

5. Section 5 of P.L.1997, c.261 (C.58:29-5) is amended to read as follows:

5. Monies in the fund shall be used only for the following purposes:

a. The development and adoption of a priority list of water quality limited waterbodies pursuant to the requirements of section 303(d)(1)(A) of the Federal Act (33 U.S.C. s.1313);

b. The monitoring and assessment of all State waters pursuant to the requirements of section 305(b) of the Federal Act (33 U.S.C. s.1315);

c. The delineation of watershed management areas and stream segments;

d. The identification of potential causes of the use impairment or water quality standard violations related to waterbodies on the priority list required pursuant to sections 303(d)(1)(A) and 305(b) of the Federal Act by means of assessment of reliable data, including, but not necessarily limited to, identification of point sources, nonpoint sources, habitat degradation, and hydrologic changes. This identification shall include a broad-based intensive survey monitoring program that shall supplement the existing chemical, biological and toxics-in-biota monitoring networks, and that shall intensively sample watersheds or segments of watersheds on a periodic basis and establish a detailed watershed-wide assessment process. The number of monitoring sites within a watershed shall be determined by existing water quality, land uses, known and potential pollution sources, and the amount of available historical data. The supplemental survey monitoring program, shall be designed to provide:

(1) a detailed profile of water quality over specified time periods;

(2) an identification and detailed profile of both point and nonpoint pollution sources;

(3) a quantification of pollutant loadings and pollution impacts on receiving waters from both point and nonpoint sources; and

(4) water quality modeling based upon amounts of point and nonpoint sources of pollution and land use;

e. The development of total maximum daily loads and water quality-based effluent limitations for water quality limited waterbodies, as required pursuant to section 303(d)(1)(C) of the Federal Act, and any rules or regulations adopted pursuant thereto;

f. The development and presentation of data on the department’s Geographic Information System (GIS);

g. The development and adoption of pollution prevention best management practices to control point and nonpoint sources of pollution;

h. The characterization of land use and land cover in each watershed;

i. The development and adoption of a watershed management plan;

j. The development and planning by the department of a watershed management program and the integration of the department’s rules and regulations with the program; [and]

k. The development and implementation of a watershed protection loan and grant program, as described pursuant to section 6 of [this act] P.L.1997, c.261 (C.58:29-6); and

l. The payment of watershed moratorium offset aid pursuant to section 1 of P.L.1999, c.225 (C.58:29-8) or watershed property municipal aid pursuant to section 4 of P.L.2025, c.36 (C.13:20-19.1).

(cf: P.L.1997, c.261, s.5)

6. Section 1 of P.L.1999, c.225 (C.58:29-8) is amended to read as follows:

1. a. No municipality, municipal utilities authority, or public utility shall convey any land utilized for the purpose of the protection of a public water supply. The provisions of this subsection shall not apply to land utilized for the purpose of the protection of a public water supply if the land is otherwise subject to regulation pursuant to the “Pineland Protection Act,” P.L.1979, c.111 (C.13:18A-1 et seq.), or the “Coastal Area Facility Review Act,” P.L.1973, c.185 (13:19-1).

b. There shall be appropriated each State fiscal year from the “Highlands Protection Fund” created pursuant to section 19 of P.L.2004, c.120 (C.54:1-85) , the “Global Warming Solutions Fund” created pursuant to section 6 of P.L.2007, c.340 (C.26:2C-50), or the “Watershed Management Fund,” created pursuant to section 4 of P.L.1997, c.261 (C.58:29-4), to each municipality within which any lands subject to the moratorium on the conveyance of watershed lands imposed pursuant to [section 1 of P.L.1988, c.163, as amended by section 1 of P.L.1990, c.19] subsection a. of this section, are located an amount of [$47] at least $94 per acre of such lands located within the municipality. [Notwithstanding the provisions of this section to the contrary, the per acre amount of watershed moratorium offset aid prescribed by this section shall be adjusted annually in direct proportion to the increase or decrease in the Consumer Price Index for all urban consumers in the New York City area as reported by the United States Department of Labor. The adjustment shall become effective on July 1 of the year in which the adjustment is made.] The Department of Environmental Protection shall establish a formula to provide for periodic increases in the per-acre rate of funds distributed pursuant to this subsection, which formula shall, at a minimum, increase the rate to account for any increases in the for all urban consumers in the New York City area as reported by the United States Department of Labor.

c. A municipality shall utilize at least 25 percent of any funds received pursuant to this section for school funding purposes.

d. No later than one year after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the Department of Environmental Protection shall, in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations to implement the provisions of this section. The rules and regulations shall include a delineation of the lands covered under this section and a formula to provide for periodic increases in the per-acre amount paid to municipalities in watershed moratorium offset aid.

(cf: P.L.2004, c.120, s.82)

7. Section 3 of P.L.1999, c.225 is amended to read as follows:

3. This act shall take effect July 1, 1999 [and shall expire (1) on the repeal by law of section 1 of P.L.1988, c.163 and section 1 of P.L.1990, c. 19, or (2) upon termination of the watershed land conveyance moratorium imposed pursuant to section 1 of P.L.1988, c.163 and section 1 of P.L.1990, c. 19, by a final, unappealed order of a court of competent jurisdiction, whichever is sooner] .

8. Section 1 of P.L.1988, c.163 is repealed.

9. This act shall take effect immediately.

STATEMENT

This bill would increase the amounts of aid payments that are required to be made to certain municipalities that host watershed land, as well as certain municipalities in the Highlands region (colloquially known as watershed moratorium offset aid and watershed property municipal aid, respectively). The bill would also increase the amount that is required to be annually appropriated to the “Highlands Protection Fund” from realty transfer fee revenues.

Specifically, the bill would increase the per-acre rate of watershed moratorium offset aid and watershed property municipal aid from $47 per acre to $94 per acre. The bill would also direct the Department of Environmental Protection to adopt rules and regulations to implement the watershed moratorium offset aid program. The rule and regulations would be required to include a delineation of the lands covered by the program and a formula to provide for periodic increases in the per-acre amount paid to municipalities in watershed moratorium offset aid. The bill would also codify the watershed moratorium, which prohibits municipalities, municipal utilities authorities, and public utilities from conveying any land utilized for the purpose of the protection of a public water supply, in the “Watershed Protection and Management Act of 1997,” P.L.1997, c.261 (C.58:29-1 et seq.). Under current law, the watershed moratorium exists only in an uncodified, temporary statute.

The bill would also increase the amount that is to be annually credited to the “Highland Protection Fund” from realty transfer fee revenues from $5 million per year to $12 million per year. These funds are used to finance the payment of watershed moratorium offset aid, among other things. In addition, the bill would authorize the use of moneys in the “Global Warming Response Fund,” which houses revenues from the Regional Greenhouse Gas Initiative (RGGI), and the “Watershed Management Fund,” which houses corporation business tax (CBT) revenues dedicated to groundwater quality protection purposes, to finance watershed moratorium offset aid.

Finally, the bill would require municipalities to utilize at least 25 percent of any watershed moratorium offset aid they receive for school funding purposes.