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Legislature Poised to Authorize Creation of Stormwater Utilities: What You Need to Know

Aging infrastructure, rising sea levels, polluted stormwater runoff, and the impact of more intense weather events have created an urgent need for New Jersey to address its stormwater infrastructure. The New Jersey Legislature is actively confronting the issue through the introduction of the Clean Stormwater and Flood Reduction Act ("Act"), which authorizes the creation of stormwater utilities. The Act was passed by the Senate and likely will be voted on by the Assembly later this year, sending it to the Governor's desk. 

New stormwater utilities will be vested with the power to plan for, invest in, and manage their areas’ stormwater infrastructure, joining the 40 states and 1,500 municipalities throughout the country that operate stormwater utilities. Presently, stormwater management within the State relies on a patchwork of arrangements that evolved over the years from state, county, and local site planning requirements and federal obligations to reduce stormwater pollutant discharges under the Federal Clean Water Act. Under the Act, stormwater utilities will have the authority to assess fees for a property’s direct and indirect discharge to the stormwater infrastructure under its management. These fees will be based on "fair and equitable approximation of the proportionate contribution of stormwater runoff from a real property" and may be offset or reduced by the use of best management practices and green infrastructure. In addition, the stormwater utility will be permitted to use the fees collected for, among other things, (a) operation and maintenance of its stormwater system, (b) capital expenditures in stormwater infrastructure, (c) development and maintenance of an asset management plan, (d) monitoring, inspection, and enforcement activities, and (e) pollution prevention and control. The stormwater utility also will be authorized to enter into contracts and issue bonds, notes, and other debt obligations.    

The Act is flexible, allowing the powers and duties of the new utility to sit within one of several existing bodies, including municipal or county sewage authorities, municipal or county utility authorities, county improvement authorities, a separately created municipal or county stormwater utility, or in a shared services agreement between municipalities. The Act directs the New Jersey Department of Environmental Protection ("DEP") to draft and adopt regulations and technical guidance within 18 months as necessary to implement the provisions of the Act. Additionally, the Act requires that a portion of fees collected be remitted back to the state to be placed in a Clean Stormwater and Flood Reduction Fund as dedicated funding for DEP’s "planning, implementation, and coordination activities related to stormwater utilities within the State." 

If enacted, the Act would be a positive step toward addressing an emergent problem that has been long in the making. If your organization may be charged with evaluating the options presented by the Act and creating a stormwater utility, then it is time to start preparing by evaluating your stormwater infrastructure, the needs of your constituents or customers, and the investments necessary for future growth.

The content of this post is for informational purposes only and should not be construed as legal advice or legal opinion. You should consult a lawyer concerning your specific situation and any specific legal question you may have.

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