McKeon, Schaer & Speaker Prieto Bill to Limit Use of Environmental Settlement Funds Clears Assembly Panel

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 Assemblymen John McKeon, Gary Schaer and Speaker Vincent Prieto to ensure that moneys received as part of an environmental violation lawsuit is used to fix the damage created by the infraction was released Monday by an Assembly committee.

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) 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.”

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 released by the Assembly Budget Committee.