Towns and counties will have the power to impose fees on property owners to pay for upgrades to antiquated stormwater systems based on how much they contribute to runoff, under a bill signed into law Monday by Gov. Phil Murphy.

Call a "rain tax" by opponents and "flood defense" by supporters, the measure does not impose a wide-ranging tax on a community. But it allows towns and counties to target properties where stormwater easily washes off — a leading cause of local flooding and high levels of pollution in the state's waterways.

The most likely properties to be affected would be large malls and office parks with expansive parking lots.

The bill, S-1073, lets municipalities and counties create their own local stormwater utility that could then charge property owners a fee based on "a fair and equitable approximation" of how much runoff is generated from their property.

Supporters say the law will help restore health to lakes and bays and bring relief to flood-prone communities.

Opponents say the law is too vague and could allow for uneven enforcement on a business community they say is already overtaxed.

How bad is the problem?

New Jersey's rivers, streams and bays are in better shape than they were two generations ago, when the federal Clean Water Act was in its infancy.

But they're still recovering. Consider:

15 percent of the state's waterways can support full aquatic life.

25 percent can be used fully for recreation.

35 percent can support drinking water supplies.

One of the biggest problems is that sewage from dozens of communities in North and Central Jersey routinely mixes with stormwater and pours into waterways during heavy rainstorms from antiquated combined sewage outfalls. As much as 23 billion gallons of water tainted with sewage drains into the Hudson, Hackensack, Passaic, Raritan and Elizabeth rivers each year.

And flooding is a chronic problem in many areas of New Jersey, from the Shore to the Passaic River Basin and elsewhere. The state had the fifth-most flood insurance policies in the U.S. in 2017, with 226,588, according to the Insurance Information Institute.

Climate change continues to present problems for New Jersey's aging infrastructure. The state was pummeled with more precipitation in 2018 than in any other year since record keeping began in 1895.

Who is going to pay?

In order to be charged, a property owner has to reside in a town or county that establishes a stormwater utility.

Even supporters like the New Jersey League of Municipalities say they expect only the most flood-prone communities to join.

"I could see a couple of dozen [municipalities] popping up across the state with this, but not much more," said Mike Cerra, assistant executive director of the League. "You'll see interest from major urban areas where flooding and runoff are facts of life."

Several officials in North Jerflood prone towns said Tuesday they still need to analyze the law before deciding whether it fit their community.

The law exempts only farms and commercial gardens from fees, even though agriculture runoff from fields generates significant pollution, such as nitrates from fertilizer.

That means every other property owner could be subject to fees, including single-family homeowners, condo complexes and other residential properties.

But the law gives towns and counties great discretion to determine who pays and how much.

Assemblyman John McKeon, D-Essex, a sponsor of the measure, said the law is intended to put the burden on large commercial developments with impervious surfaces like concrete and asphalt.

"When you have something like a Walmart with a mega parking lot, that's a lot more runoff than the average person's driveway," he said. "This is not something in the realm of a property tax in terms of impact. If anything it's more like a sewer fee, and it's up to the town to determine if they want their residents to pay for it."

Property owners could get their fees reduced by installing "rain barrels, rain gardens and other naturally based systems that absorb water like a sponge," said Ed Potosnak, director of the New Jersey League of Conservation Voters. "So folks are empowered to lower any fees."

The New Jersey Business & Industry Association says the law could affect anyone, especially some of the largest property tax payers in a community.

Opponents of the law, like Sen. Tom Kean Jr., R-Union, say it also creates another layer of government with little oversight and direction.

"This law will be extremely difficult to administer," said Ray Cantor, a vice president for the business association and former Department of Environmental Protection assistant commissioner.

"It will require an analysis of each property in a town, credits for existing facilities, and credits for how well you maintain a facility," he said. "There is no certainty on how much can be collected and no stated appeals process."

Where will the money go?

The vast majority of funds — 90 to 95 percent — can be used only on local stormwater systems for upgrades such as replacing pipes, maintaining catch basins or creating rain gardens to absorb water.

The utility would have to send 5 percent of its fees — no more than $50,000 — to the Clean Stormwater and Flood Reduction Fund. It could be used only for stormwater management such as water quality monitoring and projects to reduce water pollution.

The law permits counties and municipalities to divert up to 5 percent of the annual costs of operation of the stormwater utility to the local budget.

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