Discussion Points. Department of Environmental Protection FY

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1 Discussion Points 1. The northwest corner of the State has a robust black bear population, and bears have been sighted in all 21 counties of the State. For the past eight years, a hunting season or seasons has been part of the overall strategy to manage the bear population. The Murphy Administration has already indicated that it plans to review the State s black bear management plan, with an eye toward backing away from using hunting as one of the population control options in favor of making even greater use of nonlethal methods. Question: What nonlethal methods for controlling the black bear population does the department prefer and how effective will they likely be? How much will they cost to implement and how will they be funded? Answer: The Department is reviewing its current Comprehensive Black Bear Management Policy, which relies on a number of non-lethal control methods including education, research, control of human derived food, response to problem bears, and population control as well as sport hunting to control the bear population. The Policy provides for continued monitoring of alternative population control measures. One of the alternative measures the Department continues to consider is fertility control. However, a recent literature review of fertility control conducted by the DEP Division of Science and Research, as well as a final report received from Stockton University, indicated that population control of bears through fertility controls on a statewide level is currently not feasible. The Department is committed to continuing to monitor alternative control methods as part of our comprehensive black bear management policy, including convening a scientific panel to review the two literature reviews referenced above and further investigating nonlethal options. 2. In 2004, the Highlands Water Protection and Planning Act was enacted into law. The national Highlands Region has been recognized as a landscape of special significance by the United States Forest Service and is designated as a Special Resource Area in the State Development and Redevelopment Plan. The State portion of the national Highlands Region is nearly 800,000 acres, or about 1,250 square miles, covering portions of 88 municipalities in seven counties. The New Jersey Highlands is an essential source of drinking water, providing clean and plentiful drinking water for one-half of the State's population, including communities beyond the New Jersey Highlands, from only 13 percent of the State's land area. The Highlands Water Protection and Planning Act promised landowners in the Highlands preservation area that they would be properly and fully compensated for the loss in property values they suffered as a result of the Act. Yet over the last 14 years the State has not met this commitment in full. Question: How much funding has been spent by the State and other entities to compensate for property value loss? What percentage and how many acres in the Highlands Preservation area have been preserved? How much funding is still needed to provide full compensation for property value loss? 1

2 Answer: See Attachment to Question #2 for summary chart provided by the Department of Treasury. Since August 10, 2004 the DEP has spent nearly $168 Million to acquire 28,389 acres in the Highlands. Local governments and nonprofit organizations have used $102 Million in Green Acres funding to preserve 11,626 acres. In addition, the Highlands Council undertakes its own acquisition/funding initiatives. According to reports on the Highland Council s website, approximately 312,217 acres of the Highlands Region, or 36%, is currently preserved (9,441 parcels). This includes 207,200 acres (4,432 parcels) in the Preservation Area, and 105,017 acres (5,009 parcels) in the Planning Area. We do not have a number for total value in the Highlands, but DEP has received 246 offers from landowners to sell their land, with an asking price of $144 Million. These are not appraised values. 3. Significant portions of New Jersey s drinking water infrastructure are rapidly approaching the end of its useful life. Failure to replace old pipes will result in an unreliable supply of safe drinking water, increased service interruptions, more frequent and costly emergency repairs, insufficient water flow and pressure, and a lack of sufficient water infrastructure to support local and State economic growth. This problem is particularly acute for the State s urban areas, and for smaller water systems that have difficulty raising revenue to fund costly infrastructure projects. The U.S. Environmental Protection Agency and the American Water Works Association have estimated that the costs of addressing this problem in New Jersey will be in the billions of dollars. Recently, the Joint Legislative Task Force on Drinking Water Infrastructure released its comprehensive report on this very critical issue in the State. The report also delved into several related issues, such as storm water management, combined sewer overflows, maintaining an inventory of lead service lines, and conducting annual water loss audit reports. One proposal in the report would require the department to adopt regulations concerning water loss audits and after reviewing the annual water loss audits submitted by water purveyors, to adopt regulations prescribing a specific level of yearly improvement for future water loss audit reports. Last year the department indicated that it believed all water systems, not just those owned by local government units, should make long-term investments in their water infrastructure and the department was working to assure that all public water systems have asset management programs through the following mechanisms: (1) Phased Approach of Regulatory Requirements; (2) Principal Forgiveness for Financing Asset Management Program Development and Asset Management Plans / Condition of State Financial Support via Environmental Infrastructure Trust; (3) Condition of Compliance and Enforcement Terms; and (4) Partnerships with non-governmental organizations and Industry Associations and Water System Operators. 2

3 Question: What is the status of the department s efforts to ensure that all public water systems have asset management programs? Answer: In 2014, the Department organized an Asset Management industry workgroup, comprised of representatives of drinking water and wastewater utilities, with the goal of advancing asset management in the water sectors. In conjunction with the workgroup, the Department performed an asset management baseline assessment through a voluntary survey of the drinking water and wastewater sector. After the passage of the Water Quality Accountability Act (WQAA), the Department began communicating with stakeholders, and discussed its requirements with the regulated public water systems (those with 500 service connections or more). The Department also created a website specific to the WQAA. The Department is on track to initiate rule-making regarding the WQAA. In the absence of regulations, the Department has begun reaching out to the systems prior to all the WQAA milestones to assist with compliance and to discuss the availability of potential funding. The New Jersey Environmental Infrastructure Financing Program, administered by the Department and the New Jersey Infrastructure Bank (formerly the Environmental Infrastructure Trust), provides low-cost financing for environmental infrastructure projects with the goal of enhancing and protecting groundwater and surface water resources, and ensuring the safety of drinking water. Asset management plan costs can be financed for certain systems through the EIFP, and some of these costs can be covered with principal forgiveness loans for projects. Through the State Revolving Fund (SRF), the Department also provides incentivized financing for the development of asset management plans and programs. As a requirement of all SRF loan agreements, the Executive Officer of the water utility and a licensed engineer must certify that there is an asset management plan in place (or under-development) for the funded project and components. Although the question is focused on drinking water, as the Legislative Task Force pointed to, there are similar issues experienced in other portions of the State s water infrastructure including wastewater and stormwater. The Department has begun to require asset management planning as a permit condition in the wastewater sector, beginning with 25 combined sewer overflow permits. The Department is also promoting asset management in the stormwater sector though the creation of a mobile phone application for municipalities to use for free to inventory their stormwater infrastructure, inventorying being an important step towards asset management. Question: What does the department estimate the annual costs would be to adopt and implement regulations requiring annual water loss audits for all public water purveyors, which would require the department to annually review and establish improvement levels for future water loss audits? Does the department expect to hire additional personnel if water loss audits are required? If so, how many, and at what annual cost? Answer: This is another area that the Legislative Task Force explored and made note of. In response, the Department expects to have similar costs for developing such a program as those that were incurred by the state of Georgia, which requires water loss audits for 250 public water systems. According to the NRDC, Georgia received roughly $1.9 million in 3

4 Drinking Water State Revolving Fund (DWSRF) monies, along with pro-bono assistance from professional associations to develop a training manual, provide data validation, and establish advanced leak detection and water meter testing. The Department would require a total of 8 additional Full Time Employees to review and establish improvement levels for water loss audits for systems serving greater than 3,300. This would cost an estimated $750,000 annually. Question: Does the department believe a new source of State revenue is needed to help distressed municipalities and smaller water systems address these problems? If so, where could the department obtain such funding? Does the department anticipate receiving monies through the budget process? If not, why not? Answer: The Department does not currently have sufficient funding for these problems and believes that more dollars are needed to address the challenges faced by both distressed and smaller systems. Such systems have difficulty obtaining loans through the EIFP due to a lack of creditworthiness or due to a lack of technical expertise. Troubled systems can lack sufficient capacity to adequately operate their systems as they are, let alone invest money back into the system for future needs. Therefore, to address these needs, more grants and funding for water systems is needed. Although the Federal government approved increases to DWSRF and to small and disadvantaged communities grants as part of the FY2018 Federal Omnibus Spending Bill, funding from the Federal level is not sufficient to cover all of New Jersey s needs. Question: What is the department s highest priority to ensure the long-term viability of the public water systems in the State? What other initiatives outlined in the report does the department support? Please explain. Answer: The Department s highest immediate priority is to ensure that failing systems receive the proper oversight and support to ensure the proper operation and maintenance of water systems and delivery of water that meets drinking water standards. Because current permanent staffing levels are not sufficient to perform core responsibilities to ensure the proper quality and quantity of New Jersey s drinking water, the Department has been employing a significant number of hourly and temporary employees to execute its mission with respect to drinking water. To ensure long-term viability of New Jersey s public water systems, the Department supports many of the recommendations in the Joint Legislative Task Force Report, beginning with the implementation of asset management requirements. The Department notes that these recommendations, in most cases, require additional staff and resources, as well as funding for water infrastructure. 4

5 4. The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory market-based program in the United States to reduce carbon dioxide emissions from the power sector. In January, the Governor issued an executive order directing New Jersey to begin negotiations with current RGGI member states to determine how to best re-enter RGGI. Under the executive order the department was required to initiate the administrative rulemaking process for promulgating regulations for the administration of New Jersey s full participation in RGGI. The department is also required to create guidelines for the allocation of funds realized by the State as a result of New Jersey s participation in RGGI. According to the executive order, these guidelines will ensure that funds are allocated to projects that will serve communities that are disproportionately impacted by the effects of environmental degradation and climate change, and which will alleviate the negative effects on human health and the environment. Supplementary budget information forecasts $5.75 million in FY 2019 revenues to the Global Warming Solutions fund, where revenues from RGGI participation are deposited. Question: When does the department believe the negotiations will be complete and the State will officially re-enter RGGI? Answer: The Department has estimated that rule making will take approximately 12 months to complete once it has successfully negotiated its CO2 emissions allocation with the other RGGI states. The Department is in the initial stages of negotiations with the current nine RGGI States regarding New Jersey s CO2 allocation. The process is ongoing and continues to be a top priority of the Department, as final CO2 allocation is a prerequisite for New Jersey to re-enter RGGI. RGGI revenues are now expected to materialize in FY Question: How does the department plan on allocating the funds realized by the State as a result of New Jersey s participation in RGGI? Answer: Once New Jersey successfully enters RGGI, the Department, the Economic Development Authority (EDA) and the Board of Public Utilities (BPU) will coordinate efforts to administer the programs and projects. After finalizing the necessary regulations, funds will be distributed through the development of a spending plan that identifies programs and projects in proportions mandated by the Global Warming Solutions Fund (GWSF) legislation (EDA 60%; BPU 20%; Department 20%). All programs and projects identified in the strategic plan must be consistent with the mandates of the GWSF legislation and Executive Order No. 7. The Department plans to allocate its twenty percent portion in two areas based on statutory requirements under GWSF: Ten percent of the auction proceeds will support and develop grant programs designed to promote local government efforts to reduce greenhouse gas emissions. These grants will reduce GHGs and energy demand through the implementation of energy efficiency, renewable energy, and distributed energy projects and land use planning. The Department will also allocate ten percent of auction proceeds to support programs that enhance the stewardship and restoration of the State s forests and tidal marshes providing important opportunities to sequester or reduce greenhouse gases. Additionally, the Department may use up to four percent of the total amount in the fund each year to pay for administrative costs, incurred by the department in administering the provisions of the GWSF legislation. 5

6 5. As amended by the voters of the State on November 4, 2014, the State Constitution dedicates four percent of Corporation Business Tax (CBT) revenues for open space, farmland and historic preservation, water programs, public and private site remediation, and underground storage tank programs for FY 2016 through FY 2019, and further increases this annual dedication to six percent commencing in FY Specifically with regard to open space, farmland, and historic preservation, for FY 2016 through FY 2019, of the four percent Corporation Business Tax dedication, the State Constitution dedicates annually 71 percent for open space, farmland, and historic preservation purposes. The Preserve New Jersey Act, P.L.2016, c.12 (N.J.S.A.13:8C-43 et seq.) implements, for State FY 2017 through FY 2019, the constitutional dedication of CBT revenues for open space, farmland, and historic preservation revenues. The Preserve New Jersey Act provides, for FY 2016 through FY 2019, 60 percent of the dedicated CBT revenues are allocated each year for the Green Acres program: 55 percent would be used for State open space acquisition and development projects; 38 percent would be used for grants and loans to fund local government open space acquisition and development projects; and 7 percent would be used for grants to fund open space acquisition and development projects undertaken by qualifying tax exempt nonprofit organizations. Of the funding for State open space acquisition and development projects: 50 percent would be used for acquisition projects and 50 percent would be used for development projects. Further, of the funding for State open space development projects, up to 22 percent would be used for stewardship activities undertaken on lands administered by the Division of Fish and Wildlife and up to 22 percent would be used for stewardship activities undertaken on lands administered by the Division of Parks and Forestry. In 2017, four appropriation acts, chapter 66, 146, 147, and 148, were enacted appropriating funds from these constitutionally dedicated CBT revenues to the department for: State acquisition of lands for recreation and conservation purposes, including Blue Acres projects, and capital and park development projects; local government open space acquisition and park development projects; and grants to certain nonprofit entities to acquire or develop lands for recreation and conservation purposes. Question: Please provide a breakdown of the department s use of the appropriated funds for State capital and park development projects. For each project, please provide its location and cost. Please identify the stewardship activities undertaken on lands administered by the Division of Fish and Wildlife and the stewardship activities undertaken on lands administered by the Division of Parks and Forestry, as well as the cost for each of the identified stewardship activities. For each activity, please identify the location and cost. Answer: See Attachment to Question #5 for list of State capital and park development projects. 6

7 Question: When does the department anticipate presenting a future funding request to the Garden State Preservation Trust for State Green Acres projects, including Blue Acres projects, and capital and park development projects? When does the department anticipate having another funding round for local government and nonprofit organizations? Answer: The Department anticipates presenting funding recommendations to the Garden State Preservation Trust in 2018 for State Acquisition, Blue Acres, and capital/park development projects. We plan to invite applications from local governments and nonprofits at the end of this year, with an early 2019 application deadline at the latest. Question: Does the department have any recommendations for legislative changes to the Preserve New Jersey Act or for future legislation addressing the constitutional dedication of CBT revenues beyond FY 2019? Answer: DEP is currently reviewing the effects of the allocation restrictions provided by the Preserve New Jersey Act and will advise the Legislature at a future time if it concludes that changes would be in the public interest. DEP suggests minor language changes as described below to the method of distributing the revenue generated from leases or conveyances of DEP lands to provide more flexibility in allocating revenue to parks where the need is greatest. EXISTING LANGUAGE: - C.13:8C-47 Deposit of amount credited. 5b. In State fiscal year 2017 through and including State fiscal year 2019, of the amount credited by the State Treasurer to the Preserve New Jersey Fund Account pursuant to paragraph (2) of subsection a. of section 4 of this act, each State park, forest, or wildlife management area shall receive an amount equal to the amount of revenue annually derived from leases or conveyances of lands at that State park, forest, or wildlife management area, as appropriate, to be used for recreation and conservation purposes at that State park, forest, or wildlife management area. For purposes of budgeting and administrative oversight, the DEP should be permitted to pool this revenue at the Division level, thereby allowing the Divisions of Parks & Forestry and Fish & Wildlife to target and prioritize their fiscal resources. To that end, the following statutory change is proposed. SUGGESTED CHANGE: 5b. In State fiscal year 2017 through and including State fiscal year 2019, of the amount credited by the State Treasurer to the Preserve New Jersey Fund Account pursuant to paragraph (2) of subsection a. of section 4 of this act, (1) the Division of Parks and Forestry shall receive an amount equal to the amount of revenue annually derived from leases, licenses, concessions and non-fee conveyances of lands at all State parks and forests and (2) the Division of Fish and Wildlife shall receive an amount equal to the amount of revenue 7

8 annually derived from leases, license, concessions and non-fee conveyances of lands at all State wildlife management areas, as appropriate, to be used for recreation and conservation purposes related to the lands under the control of such Divisions. In addition, the Department is evaluating whether changes to the Preserve NJ Act would allow us to more efficiently meet our mission when faced with a smaller staff. However, these changes would be operational and not budget-related. 6. Last year Volkswagen reached settlement agreements over use of its software to cheat on emissions tests. Press reports indicate that the State settlement agreement with Volkswagen was for $69 million. This is separate from the State s share of the settlement between the United States Environmental Protection Agency (EPA) and Volkswagen which is $72.2 million. The Treasury has established the Volkswagen Mitigation Fund, but as yet there is no revenue collected and no expenditures reported in the fund. According to the department website, one of the federal settlement agreements identifies nine source categories that are eligible for mitigation projects that reduce NOx emissions. The Mitigation Trust Fund Agreement approved by the federal court limits use of funds to the following categories of projects: (1) Class 8 Local Freight Trucks and Port Drayage Trucks; (2) Class 4-8 School Bus, Shuttle Bus or Transit Bus; (3) Freight Switchers; (4) Ferries or Tugs; (5) Ocean Going Vessels; (6) Class 4-7 Local Freight Trucks; (7) Airport Ground Support Equipment; (8) Forklifts and Port Cargo Handling Equipment; (9) Acquisition, installation, operation and maintenance of light duty electric vehicle supply equipment (also known as electric vehicle charging stations) and light duty hydrogen fuel cell vehicle supply equipment. In addition, last year, the department solicited project proposals for how to spend the funds. Last year, the department informed the Legislature that, in order to receive funding, states must submit a beneficiary certification and designate a lead agency no later than 60 days after the Trust Effective Date, the date when the United States, Volkswagen, and the Wilmington Trust execute the form of Trust Agreement approved by the federal court. If the State determines to become a beneficiary and the trustee determines the State qualifies, the State must then submit and make publicly available a Beneficiary Mitigation Plan. On the department s website it indicates that New Jersey s Draft Beneficiary Mitigation Plan will summarize how the State proposes to use the mitigation funds allocated to it under the federal Volkswagen Settlement. As a potential beneficiary of the Trust, New Jersey issued a solicitation for project ideas to ensure that a broad range of project ideas is considered. By the deadline of January 31, 2018, a total of 116 projects were submitted for a total of $389,929,214. Of the total projects submitted, only two were ineligible. Question: How much of the federal settlement money will be allocated for each of the project categories? Can the department provide any updates on when settlements payments will be received and exactly how those moneys are being used or how they will be used? Will the department be selecting projects to fund from the list of project 8

9 proposals that is currently on the department s website? Have any funds been currently committed to any specific use? Answer: Up to 15% of the total allocation can be spent on electric vehicle charging and hydrogen fueling infrastructure and the remaining 85% can be spent on eligible projects that reduce NOx emissions; there are nine source categories that are eligible for mitigation projects, including but not limited to light, medium, and heavy duty vehicles. The deadline to spend the money is NJDEP can request disbursements from the Trustee as follows: $24 million the first year; $24 million the second year; and $24 million the third year. However, each funding disbursement request submitted to the Trustee must be associated with a specific project and include information on the project s air quality benefits, cost sharing, budget, implementation milestones, and financial audit procedures, among other things; NJDEP cannot request a lump sum disbursement of $24 million. Before it can request funding for projects, NJDEP must develop a Beneficiary Mitigation Plan that outlines a high level vision for spending the money. The Plan must include: Overall goal for use of the funds; Categories of projects NJDEP intends to fund and preliminary assessment of percentage of funds for each; Description of how NJDEP will consider impact on EJ communities; General description of expected range of emission benefits; and Process by which NJDEP will seek and consider public input on the Plan. DEP is working with the Governor s Office to determine the process for selecting projects. This process includes evaluating the proposals and developing project scoring/weighting criteria aimed at cost effective, technically feasible projects that benefit large populations, with a particular focus on EJ communities. Question: Has the department submitted a Beneficiary Mitigation Plan? Are there any other actions the State must take to obtain any remaining federal settlement money? If so, please describe what they are and any deadlines associated with them. Are there any obstacles to receiving the settlement money? If so, please explain. Has the State missed any deadline to obtain any of the settlement money? Answer: No, NJDEP has not drafted a Beneficiary Mitigation Plan yet. NJDEP is currently working with the Governor s Office to finalize a Beneficiary Mitigation Plan. The steps to obtain the money are explained in the answer to preceding question. There are no obstacles to receiving the settlement money, however there are specific requirements that must be met, per the consent decree. The state has not missed any deadlines to obtain any of the settlement money. 9

10 Question: In October 2017, New Jersey reached a separate settlement agreement, totaling $69 million, with Volkswagen for violations of State law. How does the department plan to spend this money? Has the department sought, or will it be seeking, input on how to spend the money? What requirements and restrictions does the settlement agreement impose on how the money can be spent? Answer: The settlement was negotiated by the Attorney General s office for violations of the Air Pollution Control Act and the Consumer Fraud Protection Act. The $69 million penalty was directed to the General Fund, consistent with the disposition of all penalty receipts. 7. P.L.2016, c.87, signed into law on January 9, 2017, amended the Electronic Waste Management Act to revise the State s electronic waste management laws. The collection and disposal of electronic waste has become an important environmental issue in the technology age. The law requires each manufacturer of covered electronic devices to provide for the collection, transportation, and recycling of its market share in weight of all covered electronic devices collected in a program year. The law also requires every authorized recycler that does not hold a permit from the DEP as a class D recycling center to register with the department and pay an annual $15,000 registration fee. The fee will be used by the department to cover the costs of the development, implementation, and review of recordkeeping and data systems required of authorized recyclers, technical advice provided by the department to authorized recyclers, the review and analysis of reports required to be submitted by authorized recyclers, monitoring the disposition of recyclable materials recovered during the recycling of covered electronic devices, and any other technical analysis performed by the DEP pursuant to the act. The law also allows the department to assess a per-pound fee of $0.50 multiplied by a manufacturer s market share in weight obligation for a manufacturer that fails to collect, transport, and recycle covered electronic devices under the law. The law repealed an annual fee of $5,000 required to be paid each January 1 from manufacturers of televisions selling 100 or more televisions in the State. The law further allows the department to establish a Statewide standard program to collect, transport, and recycle covered electronic devices, and enter into contracts for the services required for the proper collection, transportation, and recycling of covered electronic devices. If a Statewide standard program is established, then any manufacturer with a market share of 10 percent or less must fulfill its recycling obligation by participating in the Statewide standard program. A manufacturer, or group of manufacturers, to whom the department provides a market share of greater than 10 percent may participate in the Statewide standard program, if one is established, or may submit its own plan for approval. The bill also establishes the Electronic Waste Management Fund. All program revenues and penalties would be deposited in the fund for administration and enforcement and other costs of the program. 10

11 According to the department s website, the department has developed an implementation plan for the State s revised electronic waste program under the requirements of the new law. Question: What is the current status of the electronic waste recycling program? What is the department's plan for implementing the law? When does the department plan on releasing the implementation plan developed by the department? Are local governments still subsidizing the collection of electronic waste? If so, how much are they spending? Answer: When the revised law was enacted in 2017, the effective dates in that law were established for Because the effective dates had already passed and the program year had already begun, DEP adopted a phased implementation approach similar to that of the 2008 Statute. The final 2017 collection obligations had already been issued in October 2016 and manufacturers had already contracted with collection sites for the 2017 program year. Full implementation began January 1, Implementation plan information has been made available at: July 10, 2017 Electronic Waste January 9, 2017 Amendments Implementation Information Session which was offered live and via webinar. o Webinar was recorded and posted online at The invitation to the Information Session, that outlined the implementation process dated June 27, o Posted online at Frequently Asked Questions dated August 1, o posted at Local Government Units (LGUs) included in manufacturer collection plans are not paying for e-waste recycling. Local Government Units that choose to collect CEDs but are not included in manufacturer collection plans are only required to report weight collected via semi-annual reports but are not required to report costs. The Department connects LGUs with manufacturers and authorized recyclers to encourage manufacturer collection plan inclusion. Question: How many authorized recyclers have registered with the department? How many authorized recyclers still have to register with the department? Answer: In both 2017 and 2018, 11 out-of-state authorized recyclers registered with the Department. The Department is only aware of one outstanding out-of-state authorized recycler who may register and pay the corresponding fee. In New Jersey, there are also nine Class D Recycling facilities that are permitted to accept consumer electronics, including CEDs, and are authorized recyclers but not subject to the registration requirements of the EWMA. 11

12 Question: Have all manufacturers provided an annual plan to the department? If not, why not? Have any manufacturers submitted a plan to be administered by a group plan administrator? If so, how many? Have operators of collection locations reported to the department on a semi-annual basis? If not, why not? Has the department determined if there are a sufficient number of locations for electronics collection in each county in the State? If not, why not? Answer: For 2018, all but two manufacturers have submitted manufacturer collection plans, which in spite of the Department s continued compliance assistance efforts, is for reasons not known to the Department. They have been referred to the Compliance and Enforcement Program for enforcement action. A total of 38 manufacturers have submitted plans to be administered by a group plan administrator. Because this is the first year that semi-annual reports are required, not all collection sites have reported. o The Department continues to conduct outreach to collection site locations included in manufacturers plans that have not submitted semi-annual reports to advise them of the requirement to submit semi-annual reports. o The Department continues to conduct outreach to LGUs to identify those that operate collections sites not in manufacturers plans and to advise them of the requirement to submit semi-annual reports. The Department evaluated the collection sites proposed in the manufacturers collection plans and through a significant compliance assistance effort has approved a collection site network that ensures that sufficient numbers and locations of electronics collection opportunities are available in each county throughout the State. Question: Does the department still believe it is not necessary to establish a Statewide standard program? What is the basis for this conclusion? Answer: The Department is currently implementing the revised law and at this time does not believe it is necessary at this time to establish a statewide standard plan based on the following: The Department has received feedback from NJ County Recycling Coordinators, who have local knowledge of their county s needs in assessing and determining that the approved collection system is sufficient. County feedback indicates that the current collection network is sufficient. The Department has determined the currently approved and operating collection system is sufficient to provide adequate and convenient e-waste collection opportunities for consumers at this time. The current process is fulfilling the intent of the legislation. Question: Has the department been collecting all fees authorized to be assessed under the act? If so, please provide a breakdown of the fees collected by category and amount. If not, why not? 12

13 Answer: The Department has collected the following registration fees for 2018: o Manufacturer Registration Fees Received, to date = $240,000. o Two manufacturers have not paid the 2018 registration fee and have been referred to the Compliance and Enforcement Program. o Authorized Recycler Registration Fees Received, to date = $165,000. o One additional authorized recycler is expected to register and pay the registration fee. 8. The State holds the natural resources of New Jersey in trust for the benefit of its citizens. The department s stated goal in implementing the State's natural resource restoration program is to redress the injuries resulting from hazardous discharges to natural resources and the ecological and economic services they provide, through the restoration of those natural resources and compensation for the economic and ecological losses to the citizens of New Jersey. Statutory and common law provide the department with the authority to investigate and require the restoration of injured natural resources. Last year the department provided a list of 10 court-filed actions containing natural resource damage claims, one of which was a settlement regarding ExxonMobil facilities in Union and Hudson counties. Voters approved a constitutional amendment in November 2017 dedicating all State revenue annually derived from settlements and judicial and administrative awards relating to natural resource damages in connection with claims based on environmental contamination to repair, restore, or replace damaged or lost natural resources of the State, or permanently protect the natural resources of the State, or for paying the legal or other costs incurred by the State to pursue settlements and judicial and administrative awards relating to natural resource damages. These revenues are to be credited to a special account in the General Fund, for appropriation from time to time by the Legislature. The first priority for the use of these revenues is in the immediate area in which the damage to the natural resources occurred in connection with the claim for which the moneys were recovered. If no reasonable project is available to satisfy this first priority, or if there are moneys available after satisfying the first priority for their use, the second priority is use in the same water region in which the damage to the natural resources occurred in connection with the claim for which the moneys were recovered. If no reasonable project is available to satisfy the first or second priority, or there are moneys available after satisfying the first or second priority for their use, the moneys may be used without geographic constraints. Up to 10 percent of the moneys appropriated pursuant to this paragraph may be expended for administrative costs of the State or its departments, agencies, or authorities incurred in utilizing these revenues. The FY 2019 Budget estimates that $64.4 million will be credited to the special General Fund account in FY 2018, but projects that no revenues will be credited in FY The State fiscal system indicates that $32 million has been credited as of the end of March 2018, and that none of those revenues have been spent of committed. Question: Please provide an update on the 10 court-filed actions containing natural resource damage claims from FY 2016 through FY 2018, including damage figures, if available. 13

14 Answer: UPDATE ON THE 10 COURT-FILED ACTIONS CONTAINING NATURAL RESOURCE DAMAGE CLAIMS Case County Defendants Status Exxon Bayway Union Exxon Hudson Bayonne ExxonMobil Exxon ST Gloucester Services MTBE Litigation Statewide Multiple oil company defendants Settlement Damages in FY 2018 Anticipated Damages in FY 2019 Settled On appeal $225 million 1 Partial settlement $164,650,458 $32,387,419 2 Hercules Middlesex Hercules Inc. Settlement Being Negotiated Malouf Ford Middlesex Malouf Ford, Settlement Inc., and Paul Being Sansone Negotiated Omega Drive Groundwater Contamination Area Sussex Bob Baldwin s Transportation Inc., et al. Penetone Corp. Bergen Penetone Corp., et al. Pine Lake Park Ocean Robert E. Johnson, Thomas Nicol Settlement Being Negotiated Settled final Settled $400,000 3 Approx. $250,000 plus 2.27 acres of land or $30,000 if certain conditions are not met Sayreville Landfill III Superfund Site Middlesex Novartis, Curtiss Wright, et al. Settlement Being Finalized conservation easement on acres of land; $22,989 for NRDA; 1 Exxon settlement amount of $225 million (plus interest) anticipated to be released to the State in FY 2019 if DEP prevails in all appeals. Settlement was for the Union, Hudson, and Gloucester sites, and many additional sites not specifically identified on the chart above. 2 Department received $150,457 from Lyondell, $64 million from Sunoco, $32 million from BP and $68.5 million from Shell. The Department now anticipates receiving $32,387, from BP at the beginning of FY19 rather than in FY18 3 Estimated 14

15 Question: Please provide a list of all new unsettled or unresolved environmental contamination cases or administrative actions in which the State has asserted in court hearings, arguments, or documents, or in administrative hearings, public records, or public documents, a claim for Natural Resource Damages (NRD) and Natural Resource Restoration Costs (NRRC). For each such case or other action, please provide the names of the parties, the amounts in NRD and NRRC asserted by the State, the county and municipality in which the contamination at issue occurred, damage figures, and, if applicable, the name of the contaminated facility or property. Site Name American Cyanamid Raritan Bay Slag Superfund Site Sayreville Landfill Municipality and County Bridgewater, Somerset Sayreville and Old Bridge, Middlesex Sayreville, Middlesex Defendants Wyeth Holdings NL Industries, Inc. Carbide Graphite, et al. DEP has not listed NRD amounts or damage figures because DEP has not asserted specific NRD amounts or damages in the above-noted actions. The Attorney General s Office continues to pursue NRD and cost recovery cases already filed and is working with the DEP to evaluate new cases for possible suit. Question: Please list the specific NRD and NRRC settlements or actions that resulted in revenue received in FY 2017 and FY 2018 as of April 1, 2018, and are expected to result in revenue by the close of FY For each specific result, please describe the fund/account to which the revenues were/will be credited, the location of the environmental or natural resource damage that led to the action, and the actual or intended use of the revenue, including any spending plan and timetable. Is the department certain that that none of the listed actions will result in State revenue during FY 2019? Answer: See Attachment to Question #8 for revenue received in FY 2017 and FY As indicated in the footnote above it is now expected that the remaining MTBE-BP payment will be received in FY 2019 rather than FY Question: With respect to constitutionally dedicated revenues, how does the department intend to involve the Legislature in the appropriation of revenues for specific uses, as the Constitution provides? Is there existing statutory authority that the department intends to proceed from in spending these revenues? Answer: The Department plans to seek legislative appropriation periodically to expend funds derived from natural resources damage recoveries, in accordance with the prioritization system set forth in Article 8, Section 2 of the Constitution and the terms of the court orders covering the expenditure of such funds. 15

16 Question: If the ExxonMobil appeal is resolved in the State s favor, does the department consider the settlement payment to be constitutionally dedicated? If not, how does the department foresee the revenue being credited and allocated if collected in FY 2019? Answer: The Department defers to the AG s Office and to OMB on this question. 9. The Oyster Creek nuclear generation station is owned and operated by Exelon Corporation. On December 9, 2010, Exelon entered into an administrative consent order with the State to terminate operations at the Oyster Creek nuclear generation station and the decommissioning is scheduled to begin by December 31, The process is overseen by the U.S. Nuclear Regulatory Commission (NRC) which generally requires decommissioning to take place within 60 years after the closing of any plant. The Oyster Creek Safety Advisory Panel was created by the department in May 2011 through an administrative order to assist the department with oversight of the safe operation and decommissioning of the Oyster Creek nuclear generating station. The department is the lead State agency for accident assessment, with knowledge and expertise of nuclear operations, radiation monitoring and analysis, and compliance with requirements issued by the NRC. Although the State relies on the NRC as the authority to ensure the safety of Oyster Creek operations and decommissioning, the advisory panel was formed as an additional oversight to further ensure the safety of operations at Oyster Creek and full compliance with the consent order of December The advisory panel includes the Commissioner of Environmental Protection, the Director of the New Jersey Office of Homeland Security and Preparedness (OHSP), and an independent expert in nuclear safety. The department will also continue its Environmental Surveillance and Monitoring Program (ESMP) throughout the entire decommissioning process, and beyond, to ensure that people and the environment are not exposed to unsafe radiation. The decommissioning is largely funded by the owners of the nuclear plant, and Exelon estimated that it will have approximately $960.5 million in its decommissioning trust fund by November 2019, and that this amount is sufficient to cover the costs of its decommissioning plans. Question: What is the current total amount the department has spent on its ESMP program in relation to Oyster Creek? How much does the department expect to spend on the ESMP program during the decommissioning process, on an annual basis? Do these costs qualify for reimbursement from the decommissioning trust fund? Since department staffing has been reduced over the years, will there be adequate staff available to operate the ESMP program? Answer: The total annual cost (based on Fiscal Year 17 ) of the ESMP program related to the Oyster Creek Nuclear Generating Station (OCNGS) is $176,000 annually for vendor support, equipment and calibration. State FTE costs are not included in this estimate. A breakdown of vendor, equipment and calibration costs is as follows: 16

17 Field Maintenance Contract (DR DAS) for offsite Continuous Radiological Environmental Sampling Telemetry System and Environmental Monitoring Program (TLD Program) = $80,000 Radiological Environmental Laboratory contract= $56,000 CREST Equipment and Calibration expenditures= $25,000 Radiological Environmental Monitoring Program expenditures (includes calibrations and supplies)= $15,000 The DEP provides staff to support the Environmental Sampling and Monitoring Program to maintain the contracts, evaluate and assess data, prepare reports and support CREST system maintenance and oversight. The BNE estimates that 2.5 FTEs are dedicated to the ESMP. The average annual cost per FTE, including fringe and indirect costs is approximately $164,000 for a total of $410,000. The total estimated cost per year for ESMP is $586,000. Initially, the Department anticipates similar expenditures ($586,000 annually) for environmental sampling during decommissioning. As the site decommissioning progresses and spent nuclear fuel is moved from the spent fuel pool into dry cask storage, environmental monitoring will be lessened to reflect the reduced potential offsite impacts at that stage of decommissioning. Actual costs of environmental sampling is not able to be estimated at this time since the decommissioning plan has not yet been submitted. The extent of environmental sampling is also dependent on the results of site characterization regarding the extent of radiological contamination. The Department will closely monitor and report on these dynamics as they unfold. Ultimately, the NRC must approve all expenditures from the decommissioning fund as permitted under NRC regulations. According to published NRC guidelines pertaining to decommissioning expenditures, it appears that these costs are eligible for reimbursement from the trust fund. The Bureau of Nuclear Engineering has established contracts with outside contractors to perform field maintenance of the environmental sampling equipment. Continued support from Treasury is needed to maintain these contracted services throughout the decommissioning of the OCNGS in order to maintain an adequate environmental surveillance program. Additional onsite sampling of soil, groundwater and surface water will be necessary once decommissioning of equipment and buildings commences. An additional FTE will be necessary to adequately address the increased sampling, reporting and administrative duties associated with this increased workload. Question: Are there any additional responsibilities for the department in the decommissioning of Oyster Creek? What are the costs to the department for those responsibilities? Do these costs qualify for reimbursement from the decommissioning trust fund? 17

18 Answer: Yes. In addition to the increased sampling and reporting responsibilities mentioned above, Nuclear Engineering staff will be tasked with: (1) Review of Exelon s onsite radiological surveys / site characterization, (2) Review of Exelon s proposed changes to the site s Offsite Dose Calculation Manual (including the licensee s proposed Radiological Monitoring Program (REMP) and Effluent Pathway analysis/sampling), (3) Review of the Post-Shutdown Decommissioning Activities Report (PSDAR), (4) Participation in decommissioning inspections germane to radiological effluents, environmental monitoring, and groundwater protection, (5) Participation in Emergency Planning exercises for potential decommissioning accident scenarios, and (6) Review of the site s Final Status Survey. This new work is in addition to the Department s independent sampling and analysis of environmental samples. The BNE estimates the additional activities related to the decommissioning of the OCNGS to take one full time equivalent (1.0 FTE). The costs associated with these responsibilities would be $164,000 (the average annual BNE employee salary, including fringe and indirect). Ultimately, the NRC must approve all expenditures from the decommissioning fund as permitted under NRC regulations. According to published NRC guidelines pertaining to decommissioning expenditures, it appears that these costs are eligible for reimbursement from the trust fund. Question: Would the department be responsible for any costs for decommissioning, now or in the future, if Exelon cannot provide enough funds for the entire decommissioning process? Answer: No, the department will not be responsible for any costs for decommissioning. NRC Regulations at 10CFR50.75 (f) (1) requires each power reactor licensee must provide a report to the NRC every two years on the status of its decommissioning funding. If, at any time, the NRC determines that unacceptable levels of decommissioning funding assurance exist, the NRC will determine a remedial course of action for any licensee on a case-bycase basis. 10. The Superstorm Sandy Blue Acres Buyout Program purchases flood-prone properties. Last year the department indicated that it had spent $159 million of the $300 million in federal disaster recovery funds, and that 586 properties had been acquired and 453 properties were demolished. Last year the department indicated that the Superstorm Sandy Blue Acres Buyout Program had an outstanding demand and listed several pending projects that were in need of funding. Question: Please provide an update on the progress of the department s Superstorm Sandy Blue Acres Buyout Program. Please provide an updated list of the total number of properties acquired and properties demolished, identified by municipality. Please provide the amount spent to date and projected to be spent, and an updated number of properties anticipated to be acquired through the end of the program. Answer: See Attachment to Question #10. 18

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