On March 18, 2019, New Jersey Governor Phil Murphy signed legislation authorizing municipalities (and other public entities) to establish utilities for the creation and management of stormwater infrastructure. The legislation, S1073, also known as the Clean Stormwater and Flood Reduction Act (the “Act”), provides that a governing body of a county or municipality may create a stormwater utility “for the purposes of acquiring, constructing, improving, maintaining, and operating stormwater management systems.” The Act also allows municipalities and counties that have established sewerage authorities to request that the authority create a stormwater utility, so that the functions of the utility would be managed by the existing authority rather than the municipality(ies) or county directly. Perhaps most importantly, the Act authorizes stormwater utilities to “charge and collect reasonable fees and other charges” to recoup the costs incurred by the utility in performing stormwater management in the subject locality. Under the Act, charges may be assessed against the owner or occupant, or both, of any real property from which stormwater enters a stormwater management system. The Act also includes provisions allowing municipalities, etc. that establish stormwater utilities to issue bonds to fund stormwater management systems, and imposes reporting requirements on utilities and rulemaking obligations on the New Jersey Department of Environmental Protection.
The passage and signing of the Act was not without controversy. Business groups have derided the Act as a “rain tax” that will only serve as a financial burden to New Jersey residents. Environmental groups, on the other hand, have lauded the Act as an important step towards curbing pollution that results from stormwater runoff. Stormwater runoff and other causes of nonpoint source pollution are a leading cause of water quality problems.
Whether or not local entities will choose to establish stormwater utilities, and what the resulting rates imposed on property owners will look like, is yet to be seen. The environmental attorneys at Gibbons P.C. will continue to monitor developments as the Act is implemented and are well prepared to address any resulting issues that may impact businesses and residents in New Jersey.