S3601

An Act concerning Lake Hopatcong and its watershed, and supplementing Title 54A of the New Jersey Statutes and Title 58 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. Within 90 days after the effective date of this act, the Department of Environmental Protection shall study the feasibility of extending sewer service in the area surrounding Lake Hopatcong and its watershed and make a determination as to whether the expansion of sewer service in the watershed would result in a significant improvement to the water quality of Lake Hopatcong.

b. In conducting the study and making the determination required pursuant to this section, the department shall:

(1) consider whether expansion of sewer service in the area surrounding Lake Hopatcong and its watershed would comply with the applicable provisions of the “Water Pollution Control Act,” P.L.1977, c.74 (C.58:10A-1 et seq.), and the “Water Quality Planning Act,” P.L.1977, c.75 (C.58:11A-1 et seq.);

(2) determine the cost and availability of financial assistance from the State for the expansion of sewer service; and

(3) consult with the governing body of each of the municipalities in the affected area and the Lake Hopatcong Commission created pursuant to section 3 of P.L.2000, c.175 (C.58:4B-3).

c. If the Department of Environmental Protection determines that the extension of sewer service in the area surrounding Lake Hopatcong and its watershed will not result in a significant improvement to the water quality of the lake or is otherwise not appropriate, the commissioner shall:

(1) notify the State Treasurer and the Director of the Division of Taxation of the decision;

(2) provide a delineation to the Director of the Division of Taxation of the geographic area encompassing Lake Hopatcong and its watershed in which properties eligible for the tax dedication provided pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) are located; and

(3) conduct a public education campaign to notify the municipalities and residents of the availability of the tax deduction provided pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), which shall include, but not be limited to, notifying the governing body and local health department of each municipality with property located within the area delineated pursuant to paragraph (2) of this subsection of the availability of the tax deduction and the types of septic system maintenance eligible. This information shall also be posted in a prominent location on the department’s website.

2. a. Commencing in the taxable year beginning on or after the January 1 next following notification by the Commissioner of Environmental Protection to the State Treasurer and the Director of the Division of Taxation pursuant to subsection c. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed to deduct from the taxpayer’s gross income an amount equal to one-half the amount paid by the taxpayer during the taxable year for maintenance of a septic system located within the area delineated pursuant to paragraph (2) of subsection c. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

In the case of married individuals who file separately, each individual shall be permitted to claim one-half of the deduction allowed pursuant to this section for amounts paid in connection with a primary residence occupied by both individuals during the taxable year.

b. To be eligible for the deduction pursuant to subsection a. of this section, a taxpayer shall submit to the director a receipt of work done and amounts paid for septic system maintenance. The receipt shall include sufficient detail to indicate the work was conducted in compliance with rules and regulations governing the repair and operation of individual septic systems adopted by the Department of Environmental Protection pursuant to the “The Realty Improvement Sewerage and Facilities Act (1954),” P.L.1954, c.199 (C.58:11-23 et seq.) and the “Water Pollution Control Act,” P.L.1977, c.74 (C.58:10A-1 et seq.).

c. The director, in consultation with the Commissioner of Environmental Protection, shall adopt standards by which taxpayers shall document proof of eligibility for the deduction.

3. This act shall take effect immediately.

STATEMENT

This bill would require the Department of Environmental Protection (DEP) to evaluate extending sewer service in areas surrounding Lake Hopatcong and its watershed. If the DEP determines installation of sewer service would not significantly improve water quality of the lake or is otherwise not feasible, this bill would provide a gross income tax deduction for one-half of the cost of the maintenance of a septic system performed at a taxpayer’s primary residence located in an area that may impact Lake Hopatcong and its watershed.

Specifically, this bill would require the DEP, within 90 days after the date the bill is enacted into law, to study the feasibility of extending sewer service in the area surrounding Lake Hopatcong and its watershed and make a determination as to whether the expansion of sewer service in the watershed would result in a significant improvement to the water quality of Lake Hopatcong. The bill directs the DEP to consult with the appropriate local governing bodies and the Lake Hopatcong Commission in conducting the study and making the determination required by the bill.

If the DEP determines that installation of sewer service is not feasible or would not result in a significant improvement to the water quality of Lake Hopatcong, the DEP Commissioner would notify the Director of the Division of Taxation of the finding. A homeowner would then be eligible for a gross income tax deduction for one-half of the cost of performing maintenance of a septic system at the taxpayer’s primary residence located within the watershed.

The bill would require the DEP Commissioner to delineate the geographic area encompassing Lake Hopatcong and its watershed in which properties eligible for the tax dedication are located.

To be eligible for the deduction, the bill would require a taxpayer to submit a receipt of work done and amounts paid for septic system maintenance. In addition, the bill would require the Director of the Division of Taxation, in consultation with the DEP Commissioner, to adopt standards by which taxpayers would demonstrate that they qualify for the tax deduction.

In the early summer of 2019, the DEP detected cyanobacteria, a form of harmful algal bloom, in Lake Hopatcong and subsequently advised against making any contact with the water. Exposure to these harmful algal blooms can cause a range of health effects, including rashes, allergy-like reactions, flu-like symptoms, gastroenteritis, respiratory irritation, skin rashes, and eye irritation. A major contributor to harmful algal blooms is excessive nutrient loading in the water caused by runoff into Lake Hopatcong. Primary sources of nutrients include septic systems, lawn fertilizers, and animal wastes. In a press release issued in July 2019, the DEP urged property owners in the area to, among other things, have a wastewater professional perform a comprehensive evaluation of their septic system and fix any issues and have septic systems pumped out if this hasn’t been done for three to five years.