Increases amounts of aid paid to certain municipalities that host watershed lands; increases amount annually appropriated to "Highlands Protection Fund" from realty transfer fee revenues.

A4770

ASSEMBLY, No. 4770

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 19, 2026

Sponsored by:

Assemblywoman� AURA K. DUNN

District 25 (Morris and Passaic)

Co-Sponsored by:

Assemblymen Inganamort, Scharfenberger and Assemblywoman
Fantasia

SYNOPSIS

���� Increases amounts of aid paid to certain
municipalities that host watershed lands; increases amount annually
appropriated to �Highlands Protection Fund� from realty transfer fee revenues.

CURRENT VERSION OF TEXT

���� As introduced.

��

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.