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McKeon, Schaer, Prieto, Quijano & Wimberly Bill to Limit Use of Environmental Settlement Funds Heads to Gov’s Desk

Bill stems from Christie administration’s decision to settle with Exxon for $225 million despite asking for $8.9 billion in damages; decision has raised questions about motive

(TRENTON) – Legislation sponsored by Assembly Democrats John McKeon, Gary Schaer, Speaker Vincent Prieto, Annette Quijano and Benjie Wimberly to ensure that moneys received as part of an environmental violation lawsuit is used to fix the damage created by the infraction received final legislative approval Thursday and now heads to the governor’s desk.

The bill is in response to Gov. Christie’s decision to settle with Exxon Mobil for a fraction of what the state asked for in damages for contamination and loss of use of more than 1,500 acres of wetlands, marshes, meadows and waters in northern New Jersey. The decision has been chastised and many critics have accused the governor of quietly settling to use the money to balance the budget.

The bill (A-4281/S-2791) would amend the FY2015 budget to provide that one-half of all amounts of environmental lawsuit recoveries received by the state, in excess of $50 million, are deposited into the Hazardous Discharge Site Cleanup Fund and are appropriated for the direct and indirect costs of remediation, restoration and clean up.

“Current law allows the administration to use most of the Exxon settlement money to balance the budget. Residents have been terribly shortchanged by this settlement. Using these funds as a short-term budget fix adds insult to injury,” said Mckeon (D-Essex/Morris). “This bill amends the law so that the bulk of monies received from environmental lawsuits are reserved for damage restoration.”

“If the decision to settle with Exxon for less was not bad enough, now we have to contend with the possibility that the majority of the funds will not be used to repair the damage caused,” said Schaer (D-Bergen/Passaic). “This sends a terrible message to the communities affected. We must be proactive in identifying new revenue sources, but not at the expense of our residents and our natural resources.”

“The damage caused by Exxon was extensive. Diverting the bulk of the settlement sum, which barely covers the extent of the damage, to plug holes in the budget is disingenuous and irresponsible,” said Speaker Prieto (D-Bergen/Hudson). “This change to the law ensures that most of the money received by the state as part of any environmental lawsuit is used for its intended purpose.”

“The settlement reached by the state leaves more questions than answers. This was decades’ worth of contamination. To use most of the settlement money for purposes other than repairing the damage sends the wrong message about our commitment to protecting our natural resources,” said Quijano (D-Union). “This bill rectifies this misstep by securing most of these funds for cleanup efforts.”

“To pursue legal action for environmental damage and then turn around and use monies received as a result of that legal action for something other than restoration is wrong,” said Wimberly (D-Bergen/Passaic). “If we are going to hold these companies accountable for polluting our natural resources, we cannot disregard our responsibility to restore these resources as best as possible.”
These appropriated funds would also to be available to cover consulting, expert, and legal service expenses incurred in pursuing claims for damages and grants to local governments and nonprofit organizations to further implement restoration activities of the Office of Natural Resource Restoration in the Department of Environmental Protection. Without the enactment of this bill, all amounts of natural resource recoveries and associated damages recovered by the state in excess of $50 million during this fiscal year would be deposited in the State General Fund as general state revenue.

The bill was approved 43-30-1 by the Assembly, and 23-14 by the Senate earlier this month.