LEGISLATIVE FISCAL ESTIMATE

SENATE COMMITTEE SUBSTITUTE FOR

SENATE, No. 3398

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: AUGUST 12, 2025

 

 

SUMMARY

 

Synopsis:

"Packaging and Paper Product Stewardship Act."

Type of Impact:

Annual State and local expenditure and revenue increases.

Agencies Affected:

Department of Environmental Protection; Department of Treasury; Department of Health; Local Governments.

 

Office of Legislative Services Estimate

 

Annual Fiscal Impact

Years 1 through 4

Year 5 and Thereafter

State Cost Increase

$900,000 - $1,200,000

Up to $120.0 million

State Revenue Increase

Indeterminate

Up to $120.0 million

Local Cost Increase

Indeterminate

Indeterminate

Local Revenue Increase

Indeterminate

Indeterminate

 

 

·         The Office of Legislative Services (OLS) estimates that the bill would necessitate six to eight additional full-time equivalent employees in the Department of Environmental Protection at an annual cost of $900,000 to $1.2 million.  The new employees would staff the Office of Plastics and Packaging Management, enforce the bill’s provisions, review stewardship plans, and administer grants, among other responsibilities.

 

·         The OLS finds the bill’s annual surcharge on producers of packaging products will result in an annual State revenue increase of up to $120.0 million, beginning in approximately the fifth year after the bill’s enactment.  The OLS estimates there will also be State revenue increases from penalties collected for violations of the bill’s provisions, but cannot predict the frequency of violations nor the ensuing penalty collections.

 

·         All revenues collected under the bill will be deposited into the Packaging and Paper Reduction and Recycling Fund and used to provide grants or low-interest loans for efforts identified in a Statewide needs assessment, administer and enforce the provisions of the bill, and otherwise implement product stewardship plans.

·         Local governments may experience expenditure increases as producer responsibility organizations develop needs assessments in collaboration with these local entities.  Local governments may also experience revenue increases to the extent they receive grants and loans from the Department of Environmental Protection.

 

 

BILL DESCRIPTION

 

      The bill would require the Department of Environmental Protection to oversee a new Statewide solid waste reduction and recycling augmentation system, which would require producers of packaging and paper products to develop and implement stewardship plans to manage their product waste either independently or through nonprofit producer responsibility organizations.  The bill would require that by 2034 all packaging products covered by the bill are either compostable or recyclable and that by 2036 at least 65 percent of packaging products in the State is recycled. 

      Specifically, the bill would create an Office of Plastics and Packaging Management to oversee the implementation of the legislation and related laws, establish the Toxic Packaging Task Force to recommend additional chemicals to regulate under the Toxic Packaging Reduction Act, and modify the membership of, and add several duties to, the existing Advisory Council on Solid Waste Management.  Violations of the bill would result in civil administrative penalties ranging from $5,000 to $10,000 for each violation, with each day of violation considered a separate offense. 

      The newly established nonprofit producer responsibility organizations would on behalf of their members develop and administer joint product stewardship plans and prepare, within two years after the bill's enactment, a needs assessment of the State's existing recycling and solid waste regulations and infrastructure with regards to paper and packaging products.  The needs assessment would be updated at least every five years, as determined by the Department of Environmental Protection.  The assessment would be developed in collaboration with local governments, recycling service providers, and processors.   

      Beginning 30 months after completion of the Statewide needs assessment, each producer responsibility organization and any producers not participating in an organization would be required to pay an annual surcharge assessed by the Division of Taxation, which would be deposited into the new Packaging and Paper Reduction and Recycling Fund in the Department of the Treasury.  The total Statewide surcharge would be the amount determined to be needed during the following fiscal year, up to $120 million, to administer and enforce the bill and improve the State's recycling and solid waste system through the issuance of grants and low-interest loans.   

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes the bill would result in annual State and local government expenditure and revenue increases.

Administrative Cost:  Based on a cost estimate for similar legislation in the State of Washington, the OLS estimates that the bill would necessitate six to eight additional full-time equivalent employees in the Department of Environmental Protection at an annual cost of $900,000 to $1.2 million.  The OLS assumes an annual cost of $150,000 per new employee.  The new employees would staff the Office of Plastics and Packaging Management, which would include an Inspector General; enforce the bill’s provisions; review stewardship plans to be prepared by nonprofit producer responsibility organizations; and administer grants, among other responsibilities. 

 

Packaging and Paper Reduction and Recycling Fund:  The bill establishes a Packaging and Paper Reduction and Recycling Fund to be the repository of all surcharges, interest, penalties, and other amounts collected under the bill.  Beginning two and a half years after completion of the Statewide needs assessment, each producer responsibility organization and any producers not participating in an organization would be required to pay an annual surcharge assessed by the Division of Taxation, which would reflect the amount determined to be needed during the following fiscal year to administer and enforce the bill's provisions and improve the State's recycling and solid waste system, up to $120.0 million.  The OLS finds this would result in a State revenue increase of up to $120.0 million, beginning in approximately the fifth year after the bill’s enactment.  The OLS lacks the empirical basis to provide a more precise estimate in part because decisions regarding grant awards to enhance the recycling system would be discretionary.  

      The fund would also receive indeterminate revenues from civil administrative penalties collected for violations of the bill.  These penalties would be between $5,000 and $10,000 for each violation, with each day of violation considered a separate offense.  The fund would receive additional penalties of up to $7,500 per day for violations relating to substances that would now be prohibited under the Toxic Packaging Reduction Act.

Packaging and Paper Reduction and Recycling Fund balances may only be used to:

·         to improve the State's recycling and solid waste system, as identified in the Statewide needs assessment, in the form of grants or low-interest loans issued by the Department of Environmental Protection;

·         administer and enforce the provisions of the bill; or

·         otherwise implement an approved stewardship plan.

 

Local Governments: Local governments may experience expenditure increases as producer responsibility organizations develop needs assessments in collaboration with these local entities.  As consumers of goods, local and State entities may experience expenditure increases if the bill results in higher packaging costs.  For local government entities that provide trash and recycling services, there may be savings if the bill results in solid waste reductions and potential cost increases if the bill results in additional recyclable materials being collected.     

      Local governments may also experience revenue increases to the extent they receive grants and loans from the Department of Environmental Protection.

 

 

Section:

Environment, Agriculture, Energy, and Natural Resources

Analyst:

Anna Heckler

Assistant Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).