A3735 ACS

An Act concerning revenues to support climate change adaptation projects and supplementing Title 26 of the Revised Statutes.

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

1. This act shall be known and may be cited as the “Polluters Pay to Make New Jersey More Affordable Act.”

2. a. The Legislature finds and declares that:

(1) climate change, driven chiefly by the combustion of fossil fuels, is an immediate and grave threat to the State’s communities, environment, and economy. Its irreversible consequences already confronting the State include rising sea levels, increasing average temperatures, more frequent and severe extreme-weather events, flooding, heat waves, toxic algal blooms, and other climate-related hazards;

(2) preserving the State’s quality of life, particularly for today’s youth, who will bear the brunt of climate impacts over their lifetimes, constitutes one of the State’s greatest challenges for the next three decades and will require a shared sense of purpose, substantial new or upgraded infrastructure, and dependable revenue sources;

(3) the New Jersey Spill Compensation Fund already embodies the principle that entities responsible for environmental harm must finance its remediation, yet no analogous mechanism exists to address atmospheric pollution caused by the buildup of greenhouse gases;

(4) decades of peer-reviewed research now make it possible to quantify, with high confidence, the proportion of historic greenhouse-gas emissions attributable to the extraction of fossil fuels by individual companies over the past 50 years and longer, enabling assignment of proportional responsibility, with data regarding emissions attributable to the extraction of fossil fuels being widely available and administratively straightforward to use;

(5) the Legislature therefore intends to establish a Climate Adaptation, Resiliency, and Affordability Program that will require companies with significant historic contributions to greenhouse-gas emissions to bear a share of the cost of infrastructure investments and other adaptation measures necessary to protect State residents, businesses, and natural resources;

(6) while the Legislature is not making any findings of negligence or wrongdoing, or seeking to punish covered companies, it is in the best judgment of the Legislature to establish that the covered companies are strictly liable for monetary contributions to address the harm that has been caused and to require covered companies to contribute, because the emissions associated with the use of their products contributed to climate change;

(7) program payments will support a range of resiliency projects that address the impacts of climate change, such as: coastal-wetland restoration; storm-water and drainage upgrades; energy-efficient cooling systems in public and private buildings, including schools and public housing; public-health initiatives targeting climate-related hazards; and emergency responses to extreme-weather events;

(8) based on credible research from government agencies, universities, and respected research organizations, New Jersey residents and businesses have been paying billions of dollars to address the impact of climate change, from more severe flooding to heat waves and wildfires. The cited cost studies are a small fraction of the costs New Jerseyans have already paid and will pay to adapt to climate change, for example: (a) according to a Rutgers University and Stevens Institute of Technology report, climate change caused approximately 13 percent ($8.1 billion) of the $62.7 billion in losses incurred by New York, New Jersey, and Connecticut from Superstorm Sandy; (b) from 2011 to 2024, New Jersey has the fifth highest per capita spending on climate disasters in the nation with every county experiencing at least five disasters; (c) according to peer-reviewed research, the impact of severe heat alone cost over $108 billion in reduction of New Jersey’s Gross Domestic Product (GDP) between 1991-2022; and (d) according to a report by the Rhodium Group and co-authored by Rutgers University, University of California, Berkeley, and the University of Chicago, the estimated average annual loss to New Jersey from hurricane-related wind and flood damage today is likely $670 million to $1.3 billion higher than it would have been if sea levels and hurricane activity in the 1980s remained constant;

(9) in its September 2025 report entitled “The Economic Risks of Climate Change in New Jersey,” the Department of Environmental Protection (DEP) finds that climate change poses systemic economic risks to the State, damaging infrastructure and housing markets, threatening tourism and other key industries, and increasing costs while eroding municipal tax bases;

(10) a first-of-its-kind report mandated by the Minnesota Legislature and released by the Minnesota Pollution Control Agency in March 2026 found that the quantified impacts of climate change in Minnesota, without further adaptation investment, would be $17 to $22 billion per year by around 2050. New Jersey has over 3.5 million more people than Minnesota and the State’s economy is approximately 40 percent larger;

(11) State and federal agencies have already identified tens of billions in climate adaptation projects, for example: (a) the DEP publicly identified over $15.3 billion in new climate adaptation projects for just 11 of New Jersey’s 564 municipalities; (b) the North Jersey Transportation Planning Authority has identified over $3 billion in prioritized climate resiliency projects; (c) a U.S. Army Corps of Engineers (USACE) back-bay coastal resilience plan, for just a portion of the New Jersey shore, proposed the elevation of approximately 6,400 homes and flood-proofing of 279 critical facilities at an estimated cost of $7.6 billion; and (d) a 2022 draft USACE report studied the metropolitan New York City, lower New York, Long Island, and northern New Jersey shoreline and proposed a $52.7 billion plan to comprehensively address the region’s coastal storm risk, including the construction of sea walls. These projects represent a small fraction of the costs of needed climate adaptation projects and primarily include projects focused on flood prevention, but New Jersey will also need climate adaptation projects that address severe heat, wildfires, drought, public health risks, and many other climate impacts;

(12) the State, universities, and research organizations have identified hundreds of billions of dollars of potential climate change impacts, including a 2025 Rutgers University report documenting that over 699,000 properties, valued at $273.9 billion, are at risk of flooding. Homes make up the largest percentage of these properties, as well as 31,907 commercial and industrial properties, 4,235 farms, 2,997 apartments, 2,374 church and charitable organization properties, and 942 school properties. By 2050, more than $435.9 billion in current property value Statewide will be exposed to high flood risk, according to a 2025 analysis by Rebuild by Design;

(13) it is time for the covered companies to pay their fair share of climate adaptation costs. Just three of the largest domestic oil and gas producers had combined 2023 profits of $85.6 billion. In 2023, during a downturn in crude oil prices, ExxonMobil, Chevron, Shell, BP, and TotalEnergies still spent over $114 billion on stock buybacks and dividends. Scientific analyses attribute more than 70 percent of post-1988 global greenhouse-gas emissions to the world’s 100 largest fossil-fuel companies, underscoring their elevated responsibility;

(14) based on anticipated climate adaptation costs, the Legislature declares that responsible parties shall be strictly liable to the State for a proportionate share of funds needed for climate adaptation projects, in the total amount of $50 billion. This assessment represents only a fraction of the State’s anticipated adaptation costs while remaining modest relative to industry capacity;

(15) the program will cover emissions associated with the responsible parties’ fossil fuel extraction from 1995 through 2024, a period during which the science of climate change was well established, including the role of “man-made” greenhouse gas emissions, and robust data exist to allocate proportional responsibility;

(16) the program will be remedial in nature, seek compensation for harm arising from past pollution to fund adaptation needs, is not regulatory or punitive, and is not intended to intrude upon areas where federal law preempts State authority; and

(17) the program would not provide any State entity additional authority to regulate greenhouse gas emissions or other pollutants, regulate energy production, or to raise other revenue or create any new surcharges on energy consumers or small businesses, beyond an assessment of covered companies.

b. The Legislature therefore determines that it is in the public interest to establish a cost-recovery mechanism that shifts a fair share of adaptation expenses from State taxpayers to the entities whose products have contributed to climate change. The Legislature also determines that the State is exercising its proprietary interest as a market participant both in establishing the cost-recovery system and in setting standards for the use of funds collected through the cost-recovery mechanism.

3. As used in this act:

“Carbon dioxide equivalent” means the amount of carbon dioxide by mass that would produce the same global warming impact as a given mass of another greenhouse gas over an integrated 20-year time frame after emission.

“Climate change adaptation project” means a project designed to respond to, avoid, moderate, repair, or adapt to negative impacts caused by climate change and to assist human and natural communities, households, and businesses to prepare for future climate-change-driven disruptions, while maximizing environmental protections. “Climate change adaptation projects” include, but are not limited to: (1) flood protection projects; (2) home buyouts; (3) upgrades of stormwater drainage systems; (4) defensive upgrades to roads, bridges, railroads, and transit systems; (5) preparation for, and recovery from, extreme weather events; (6) preventive health care programs and providing physical or mental care to treat illness or injury caused by the effects of climate change; (7) relocation, elevation, or retrofits of sewage treatment plants and other infrastructure vulnerable to flooding; (8) outdoor tree planting; (9) upgrades and retrofits in public and private buildings, such as schools and public, affordable, and workforce housing, including, but not limited to, energy‑efficient cooling and ventilation systems designed to address more frequent heat waves and wildfire smoke; (10) distributed renewables and energy storage to improve resiliency; improvements to energy and grid infrastructure that enhance (11) reliability and resilience or reduce system vulnerabilities and peak load; (12) projects to respond to toxic algae blooms, loss of agricultural topsoil, crop loss, food insecurity, and other climate-driven ecosystem threats to clean water, safe and plentiful drinking water, wetlands, forests, farms, fisheries, and food systems, including community food resilience and emergency food distribution capacity; and (13) workforce development programs necessary to implement other climate change adaptation projects, including apprenticeship, pre-apprenticeship, and training programs.

“Coal” means bituminous coal, anthracite coal, and lignite.

“Commissioner” means the Commissioner of Environmental Protection.

“Controlled group” means two or more entities treated as a single employer pursuant to: (1) 26 U.S.C. s.52(a) or (b), without regard to 26 U.S.C. s.1563(b)(2)(C); or (2) 26 U.S.C. s.414(m) or (o).

“Cost recovery demand” means a charge imposed upon a responsible party for cost recovery payments under the Climate Adaptation, Resiliency, and Affordability Program established pursuant to section 5 of this act for payment into the Climate Adaptation, Resiliency, and Affordability Fund established pursuant to section 16 of this act.

“Covered greenhouse gas emissions” means, with respect to any entity, the total quantity of greenhouse gas emissions, expressed in metric tons of carbon dioxide equivalent, attributable to the total amount of fossil fuels extracted by that entity during the covered period. “Covered greenhouse gas emissions” includes those emissions attributable to all fossil fuel extraction worldwide by an entity, and are not limited to greenhouse gas emissions within the State.

“Covered period” means the time period beginning on January 1, 1995 and ending on December 31, 2024.

“Crude oil” means oil or petroleum of any kind and in any form, including bitumen, oil sands, heavy oil, conventional and unconventional oil, shale oil, natural gas liquids, condensates, and related fossil fuels.

“Department” means the Department of Environmental Protection.

“Entity” means any individual, trustee, agent, partnership, association, corporation, company, municipality, political subdivision, or other legal organization, including a foreign nation, that holds or held an ownership interest in a fossil fuel business during the covered period.

“Fossil fuel” means coal, crude oil, and fuel gases.

“Fossil fuel business” means a business engaging in the extraction of fossil fuels.

“Fuel gas” means methane, natural gas, and liquefied natural gas.

“Greenhouse gas” means the same as the term is defined in section 3 of P.L.2007, c.112 (C.26:2C-39).

“Hazard mitigation plan” means the same as the term is defined in section 1 of P.L.2023, c.313 (App.A:9-43.7a).

“Labor harmony agreement” means an agreement between an employer who benefits from a grant provided under the Climate Adaptation, Resiliency, and Affordability Program and has employees at one or more facilities for which work was funded, in whole or in part, by the grant, and one or more labor organizations that represent employees in the economic sector of the facility. ‘A labor harmony agreement shall require, for the duration of the agreement: (1) that any participating labor organization and its members agree to refrain from picketing, work stoppages, boycotts, or other economic interference against the business; and (2) that the employer (a) agrees to maintain a neutral posture with respect to efforts of any labor organization to represent employees at the facility or facilities, (b) agrees to permit the labor organization to have access to the employees, and (c) agrees to guarantee to the labor organization the right to obtain recognition as the exclusive collective bargaining representatives of the employees by demonstrating to the New Jersey State Board of Mediation, Division of Private Employment Dispute Settlement, or a mutually agreed-upon, neutral, third-party, that a majority of the employees have shown their preference for the labor organization to be their representative by signing authorization cards indicating that preference. A labor organization included in a “labor harmony agreement” shall be from a list of labor organizations which have requested to be on the list and which the Commissioner of Labor and Workforce Development has determined represent employees in the economic sector or sectors of facilities receiving grants from the fund.

“Notice of cost recovery demand” means the written communication from the department informing a responsible party of the amount of the cost recovery demand payable into the Climate Adaptation, Resiliency, and Affordability Fund established pursuant to section 16 of this act.

“Overburdened community” means the same as the term is defined in section 2 of P.L.2020, c.92 (C.13:1D-158).

“Public entity” means the State, a county, a municipality, a municipal or county authority, or any commission or other political subdivision of the State.

“Qualifying expenditure” means an authorized payment from one of the funds established pursuant to section 16 of this act to pay for: (1) a climate change adaptation project, including its operation, monitoring, and maintenance; or (2) reasonable administrative expenses.

“Responsible party” means an entity or a successor in interest to an entity that during any part of the covered period was engaged in the trade or business of extracting fossil fuel and to which the department has determined more than one billion metric tons of covered greenhouse gas emissions are attributable, except that “responsible party” shall not include any entity that lacks sufficient connection with the State to satisfy the nexus requirements of the United States Constitution.

“Trust” means the New Jersey Climate Adaptation, Resiliency, and Affordability Trust established pursuant to section 7 of this act.

4. a. No later than six months after the effective date of this act, the Commissioner of Environmental Protection shall submit to the Senate Environment and Energy Committee and the Assembly Environment and Solid Waste Committee, or their successor committees, an assessment of the covered greenhouse gas emissions attributable to each responsible party.

b. Each responsible party shall make payments to the State according to its proportional contribution to the total covered greenhouse gas emissions attributable to responsible parties, as determined by the commissioner pursuant to subsection a. of this section. A responsible party shall be strictly liable, without regard to fault, for a share of the cost recovery amount, which shall be used for the costs of climate change adaptation projects, including their operation and maintenance, in the total amount of $50 billion.

c. Responsible parties that are entities in a controlled group shall be treated as a single entity for identification purposes, but shall be jointly and severally liable for the payment of any cost recovery demand owed by any entity in the controlled group.

d. If a responsible party owns a minority interest of 10 percent or more in another entity, the responsible party’s applicable share of covered greenhouse gas emissions shall be increased by the applicable share of covered greenhouse gas emissions for the entity in which the responsible party holds a minority interest multiplied by the percentage of the minority interest held by the responsible party.

e. In determining the amount of covered greenhouse gas emissions attributable to any entity, the department may:

(1) require an entity to provide information to the department related to past practices, production, extraction, emissions, or other historical information about the entity necessary or appropriate to enable the department to determine whether such entity is a responsible party and, if so, the amount of such responsible party’s covered greenhouse gas emissions;

(2) apply consistent emissions factors, consistent with the provisions of the “Global Warming Response Act,” P.L.2007, c.112 (C.26:2C-37 et seq.), to convert extraction data into greenhouse gas emissions; and

(3) utilize any pertinent financial information provided by the entity to the Department of the Treasury. Implementing the provisions of this section shall constitute the performance of official duties for the purposes of R.S.54:50-8.

f. Prior to the issuance of any final cost recovery demand pursuant to this act, the department shall publish on its Internet website a plain-language summary of the methodology, emissions factors, and publicly available data sources used to determine proportional responsibility under this section. The publication of this information shall be for transparency purposes only and shall not alter, expand, or otherwise affect the authority of the department to make determinations pursuant to this act.

5. a. There is established the Climate Adaptation, Resiliency, and Affordability Program in the Department of Environmental Protection. The purposes of the program shall be to:

(1) secure payments from responsible parties;

(2) impose cost recovery demands on responsible parties and issue

notices of cost recovery demands;

(3) accept and collect payment from responsible parties; and

(4) oversee, in collaboration with the New Jersey Climate Adaptation, Resiliency, and Affordability Trust, the dispersal of funds to implement climate change adaptation projects pursuant to section 16 of this act.

b. The department shall issue the cost recovery demands required under this section no later than six months following the adoption of the rules and regulations required under section 20 of this act.

c. (1) Except as provided in paragraph (2) of this subsection, a responsible party shall pay the cost recovery demand amount in full no later than six months following the department’s issuance of the cost recovery demand.

(2) A responsible party may elect to pay the cost recovery demand amount in 20 annual installments, provided that:

(a) the first installment shall be paid no later than six months following the department’s issuance of the cost recovery demand and shall be equal to five percent of the total cost recovery demand amount;

(b) each subsequent installment shall be paid one year from the initial payment each subsequent year and shall be equal to five percent of the total cost recovery demand amount. The commissioner shall adjust the amount of a subsequent installment payment to reflect increases or decreases in the Consumer Price Index;

(c) the unpaid balance of all remaining installments shall become due immediately if the responsible party fails to pay any installment in a timely manner, if there is a liquidation or sale of all, or substantially all, the assets of the responsible party, or if the responsible party ceases to do business; and

(d) in the case of a sale of all, or substantially all, the assets of a responsible party, the remaining installments shall not become due immediately if the buyer enters into an agreement with the department under which the buyer assumes liability for the remaining installments due under this section in the same manner as if the buyer were the responsible party.

d. The department shall deposit cost recovery payments into the Climate Adaptation, Resiliency, and Affordability Fund established by section 16 of this act.

e. A responsible party shall not assign any part of its obligation to satisfy a cost recovery demand to a non-responsible party, nor assert any claim for reimbursement or coverage for a cost recovery demand against a non-responsible party.

f. The department shall publish all information, requests for proposals, application forms, procedures, and guidelines related to the Climate Adaptation, Resiliency, and Affordability Program on its Internet website and in a manner that is accessible to the public and all potential recipients.

6. a. The department shall establish a process by which a responsible party may file a request for reconsideration of its cost recovery demand with the department within 60 days following service of the notice of cost recovery demand if within the United States, and within 90 days following such service outside the United States, and in doing so shall exhaust administrative remedies.

b. A request for reconsideration shall state the grounds for the request and include supporting documentation, which may include, but is not limited to, documentation of the party’s covered greenhouse gas emissions and the party’s contacts with the State.

c. The department shall consider each request for reconsideration received pursuant to this section, and shall determine whether the requester establishes to the satisfaction of the department that a portion of the requester’s cost recovery demand amount was attributable to another responsible party, or an entity that is a successor in interest to the responsible party, and whether the notices of cost recovery demand should be updated. If the department determines that the notices of cost recovery demand should be updated, the department shall issue updated notices of cost recovery demand, which shall include a statement of the grounds of the department’s determination, within 60 days following the expiration of all periods for submitting a request for reconsideration under this section.

d. If a notice of cost recovery demand issued pursuant to subsection c. of this section results in a new responsible party receiving a notice of cost recovery demand that was not issued a notice of cost recovery demand by the date required by subsection b. of section 5 of this act, then, in the same manner as set forth in subsections a. through c. of this section, the responsible party shall have 60 days from service within the United States, and 90 days from service outside the United States, to file a request for reconsideration, which filing shall exhaust the responsible party’s administrative remedies, and the department shall consider such request for reconsideration and issue updated notices of cost recovery demand, if applicable, in the manner contemplated by subsection c. of this section.

e. If any updating of notices of cost recovery demand pursuant to subsection c. of this section results in a new responsible party that was not previously issued a cost recovery demand, such new responsible party shall also be given the opportunity to file a request for reconsideration in the same manner as set forth in subsection d. of this section, and the process shall continue until no new responsible party results from issuance of notices of cost recovery demand.

f. If the processes in this section result in issuances of notices of cost recovery demand after the applicable payment date, then the applicable payment date shall be the date which is 30 days after the final issuance of notices of cost recovery demand.

7. a. There is established in but not of the Department of the Treasury a public body corporate and politic, with corporate succession, to be known as the New Jersey Climate Adaptation, Resiliency, and Affordability Trust. For the purpose of complying with the provisions of Article V, Section IV, paragraph 1 of the New Jersey Constitution, the trust is allocated within the Department of the Treasury, but notwithstanding that allocation, the trust shall be independent of any supervision or control by that department or by any board or officer thereof. The trust is constituted as an instrumentality of the State, exercising public and essential governmental functions, no part of whose revenues shall accrue to the benefit of any individual, and the exercise by the trust of the powers conferred by this act shall be deemed and held to be an essential governmental function of the State.

b. The trust shall consist of nine voting members as follows: the Commissioner of Environmental Protection, the Commissioner of Transportation, the President of the Board of Public Utilities, and the State Treasurer, who shall be members ex officio; and five public members, one of whom shall be appointed by the Governor, two of whom shall be appointed by the President of the Senate and of those two so appointed no more than one shall be from the same political party, and two of whom shall be appointed by the Speaker of the General Assembly and of those two so appointed no more than one shall be from the same political party. The public member appointed by the Governor shall serve a term of five years. Each public member appointed by the President of the Senate shall serve a term of five years, except of those first appointed, one shall serve a term of three years and the other a term of two years. Each public member appointed by the Speaker of the General Assembly shall serve a term of five years, except of those first appointed, one shall serve a term of three years and the other a term of two years.

c. No person holding elective public office shall be eligible to be a member of the trust.

d. Each public member shall hold office for the term of the member’s appointment and until the member’s successor shall have been appointed and qualified. A public member shall be eligible for reappointment. Any vacancy in a public membership occurring other than by expiration of term shall be filled in the same manner as the original appointment but for the unexpired term only.

e. Any public member may be removed from office by the appointing authority, for cause, after a public hearing, and may be suspended by the appointing authority pending the completion of the hearing. All members before entering upon their duties shall take and subscribe an oath to perform the duties of their office faithfully, impartially, and justly to the best of their ability. A record of each oath shall be filed in the Office of the Secretary of State.

f. The first chairperson of the trust shall be the public member first appointed by the Governor. At the first meeting of the trust held in each subsequent year, the members shall elect one of the public members to serve as chairperson of the trust in a manner that ensures that the chair rotates annually among at least one of the appointees of the President of the Senate, at least one of the appointees of the Speaker of the General Assembly, and the appointee of the Governor.

g. The trust shall not be deemed to be constituted and shall not take action or adopt motions or resolutions until all five authorized public members shall have been appointed and qualified in the manner provided in this section. The members shall annually elect one of the public members as vice chairperson. The members shall elect a secretary and a treasurer, who need not be members, and the same person may be elected to serve as both secretary and treasurer. The powers of the trust shall be vested in the members thereof in office from time to time and five members of the trust shall constitute a quorum at any meeting thereof. Action may be taken and motions and resolutions adopted by the trust at any meeting thereof by the affirmative vote of a majority of the full membership of the trust. No vacancy in the membership of the trust shall impair the right of a quorum of the members to exercise all the powers and perform all the duties of the trust. The trust shall in all respects comply with the provisions of the “Senator Byron M. Baer Open Public Meetings Act,” P.L.1975, c.231 (C.10:4-6 et seq.).

h. Each member of the trust shall receive compensation in the amount of $250 per day for each day that the public member attends a meeting of the trust, unless otherwise prohibited by law. Ex officio members of the trust shall serve without compensation. All members shall be reimbursed for actual expenses necessarily incurred in the discharge of their duties. Notwithstanding the provisions of any other law, no member shall be deemed to have forfeited nor shall the member forfeit the member’s office or employment or any benefits or emoluments thereof by reason of the member’s acceptance of the office of ex officio member of the trust or the member’s services therein.

i. Each ex officio member may designate an employee of the member's department or agency to represent the member at meetings of the trust. All designees may lawfully vote and otherwise act on behalf of the member for whom they constitute the designee. The designation shall be in writing delivered to the trust and shall continue in effect until revoked or amended in writing delivered to the trust.

j. A true copy of the minutes of every meeting of the trust shall be delivered forthwith by and under the certification of the secretary thereof to the Governor. No action taken at the meeting by the trust shall have force or effect until 15 days after the copy of the minutes shall have been so delivered, unless during this 15-day period the Governor shall approve in writing the minutes or any part thereof, in which case the action shall become effective upon approval. If, within that 15-day period, the Governor returns a copy of the minutes with the Governor’s veto of any action taken by the trust or any member thereof at the meeting, the action shall be null and void and of no effect. Notwithstanding the foregoing, if the last day of the 15-day period shall be a Saturday, Sunday, or legal holiday, then the 15-day period shall be deemed extended to the next following business day. The powers conferred in this subsection upon the Governor shall be exercised with due regard for the rights of the holders of bonds, notes, or other obligations of the trust at any time outstanding, and nothing in, or done pursuant to, this subsection shall in any way limit, restrict, or alter the obligation or powers of the trust or any representative or officer of the trust to carry out and perform in every detail each and every covenant, agreement, or contract at any time made or entered into by or on behalf of the trust with respect to its bonds, notes, or other obligations or for the benefit, protection, or security of the holders thereof.

k. The trust shall continue in existence until dissolved by act of the Legislature. However, any dissolution of this trust shall be on condition that the trust has no debts, contractual duties, or obligations outstanding, or that provision has been made for the payment, discharge, or retirement of these debts, contractual duties, or obligations. Upon any dissolution of the trust, all property, rights, funds. and assets thereof shall pass to and become vested in the State.

8. a. It shall be the purpose of the New Jersey Climate Adaptation, Resiliency, and Affordability Trust, established pursuant to this act, to:

(1) oversee the provision of funding from the Department of Environmental Protection, Department of Transportation, Board of Public Utilities, Department of Health, Department of Education, Department of Agriculture, Department of Community Affairs, and Department of Labor and Workforce Development for all, or a portion of, the cost of climate change adaptation projects undertaken by grant recipients under the Climate Adaptation, Resiliency, and Affordability Program and in accordance with the purposes and procedures established pursuant to this act; and

(2) perform such other duties and responsibilities as authorized pursuant to this act or any other law.

b. In addition to all other powers granted to the trust in this act, the trust shall have power:

(1) to sue and be sued;

(2) to have an official seal and alter it at the trust’s pleasure;

(3) to make and alter bylaws for its organization and internal management and rules and regulations for the conduct of its affairs and business;

(4) to maintain an office at a place or places within the State as it may determine, and acquire, own, lease as lessee or lessor, hold, use, sell, transfer, or dispose of real or personal property for that purpose;

(5) to acquire, hold, use and dispose of its income, revenues, funds and moneys;

(6) to borrow money and to issue its bonds, notes or other obligations and to secure them by its revenues or other funds and otherwise to provide for and secure the payment thereof and to provide for the rights of the holders thereof and to provide for the refunding thereof, all as provided in this act;

(7) to issue subordinated indebtedness and to enter into any revolving credit agreement, agreement establishing a line of credit or letter of credit, reimbursement agreement, interest rate exchange agreement, insurance contract, surety bond, commitment to purchase or sell bonds, notes, or other obligations, purchase or sale agreement, or commitments or other contracts or agreements, and other security agreements as approved by the trust in connection with the issuance of bonds, notes, or other obligations;

(8) subject to any agreement with the holders of bonds, notes, or other obligations, to invest moneys of the trust not required for immediate use, including proceeds from the sale of any bonds, notes, or other obligations, in obligations, securities, and other investments as the trust shall deem prudent;

(9) subject to any agreement with the holders of bonds, notes, or other obligations, to invest moneys of the trust not required for immediate use, including proceeds from the sale of any bonds, notes, or other obligations, in obligations, securities and other investments as the trust shall deem prudent;

(10) for its sole purpose as established in this section, to appoint and employ an executive director and such additional officers, who need not be members of the trust, and such other personnel and staff as it may require, at an annual expense not to exceed $250,000, all without regard to the provisions of Title 11A, Civil Service, of the New Jersey Statutes;

(11) to do and perform any acts and things authorized by this act under, through, or by means of its officers, agents, or employees or by contract with any person, firm, or corporation or any public body;

(12) to procure insurance against any losses in connection with its property, operations, assets, or obligations in amounts and from insurers as it deems desirable;

(13) to adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) such rules and regulations as it deems necessary to effectuate the purposes of the trust;

(14) to make and enter into any and all contracts and agreements which the trust determines are necessary, incidental, convenient or desirable to the performance of its duties and the execution of its powers under this act;

(15) to accept and use any funds appropriated and paid by the State to the trust, including, without limitation, appropriations and payments from the Climate Adaptation, Resiliency, and Affordability Fund established pursuant to section 16 of this act, for the purposes for which the appropriations and payments are made;

(16) to apply for, and receive and accept, appropriations or grants of property, money, services, or reimbursements for money previously spent and other assistance offered or made available to it by or from any person, government agency, public authority, or any public or private entity whatever for any lawful corporate purpose of the trust, including, without limitation, grants, appropriations, or reimbursements from the federal government, and to apply and negotiate for these upon such terms and conditions as may be required by any person, government agency, authority, or entity as the trust may determine to be necessary, convenient, or desirable, provided that all such moneys, grants, appropriations, and reimbursements so received and accepted shall be subject to appropriation by law pursuant to the procedures established by this act; and

(17) to do any and all things necessary, incidental, convenient, or desirable to carry out its purposes and exercise the powers given and granted in this act.

9. a. The trust shall have the power and is hereby authorized to issue its bonds, notes, or other obligations in principal amounts as determined by the trust to be necessary to provide for any of its corporate purposes, including the payment, funding, or refunding of the principal of, or interest on, or redemption premiums, if any, on bonds, notes, or other obligations issued by it, whether the bonds, notes, obligations or interest to be funded or refunded have or have not become due; and to provide for the security thereof and for the establishment or increase of reserves to secure or to pay the bonds, notes, or other obligations or interest thereon and all other reserves and all costs or expenses of the trust incident to and necessary or convenient to carry out its corporate purposes and powers. In addition to its bonds, notes, and other obligations, the trust shall have the power to issue subordinated indebtedness, which shall be subordinate in lien to the lien of any or all of its bonds, notes, or other obligations as the trust may determine. No resolution or other action of the trust providing for the issuance of bonds, refunding bonds, notes, or other obligations shall be adopted or otherwise made effective by the trust without the prior approval in writing of the Governor and the State Treasurer.

b. Except as may be otherwise expressly provided in this act or by the trust, every issue of bonds, notes, or other obligations shall be general obligations payable out of any revenues or funds of the trust, subject only to any agreements with the holders of particular bonds, notes, or other obligations pledging any particular revenues or funds. The trust may provide the security and payment provisions for its bonds, notes, or other obligations as it may determine, including, without limiting the generality of the foregoing, bonds, notes, or other obligations as to which the principal and interest are payable from and secured by all or any portion of the revenues of and payments to the trust, and other moneys or funds as the trust shall determine. The trust may also enter into bank loan agreements, lines of credit, and other security agreements as authorized pursuant to paragraph (7) of subsection b. of section 8 of this act and obtain for, or on its behalf, letters of credit in each case for the purpose of securing its bonds, notes, or other obligations or to provide direct payment of any costs which the trust is authorized to pay by this act and to secure repayment of any borrowings under the loan agreement, line of credit, letter of credit, or other security agreement by its bonds, notes, or other obligations or the proceeds thereof or by any or all of the revenues of and payments to the trust or by any appropriation, grant, or reimbursement to be received by the trust and other moneys or funds as the trust shall determine.

c. Whether or not the bonds and notes are of the form and character as to be negotiable instruments under the terms of Title 12A, Commercial Transactions, of the New Jersey Statutes, the bonds and notes are hereby made negotiable instruments within the meaning of, and for all the purposes of, Title 12A.

d. Bonds or notes of the trust shall be authorized by a resolution or resolutions of the trust and may be issued in one or more series and shall bear the date, or dates, mature at the time or times, bear interest at the rate or rates of interest per annum, be in the denomination or denominations, be in the form, carry the conversion or registration privileges, have the rank or priority, be executed in the manner, be payable from the sources, in the medium of payment, at the place or places within or outside of the State, and be subject to the terms of redemption, with or without premium, as the resolution or resolutions may provide. Bonds or notes may be further secured by a trust indenture between the trust and a corporate trustee within or outside of the State. All other obligations of the trust shall be authorized by resolution containing terms and conditions as the trust shall determine.

e. Bonds, notes, or other obligations of the trust may be sold at public or private sale at a price or prices and in a manner as the trust shall determine, either on a negotiated or on a competitive basis.

f. Bonds or notes may be issued and other obligations incurred under the provisions of this section without obtaining the consent of any department, division, commission, board, bureau or agency of the State, other than the approval as required by subsection a. of this section, and without any other proceedings or the happening of any other conditions or other things than those proceedings, conditions or things which are specifically required by this act.

g. Bonds, notes, and other obligations of the trust issued or incurred under the provisions of this act shall not be in any way a debt or liability of the State or of any political subdivision thereof and shall not create or constitute any indebtedness, liability, or obligation of the State or of any political subdivision or be or constitute a pledge of the faith and credit of the State or of any political subdivision but all bonds, notes, and obligations, unless funded or refunded by bonds, notes, or other obligations of the trust, shall be payable solely from revenues or funds pledged or available for their payment as authorized in this act. Each bond, note, or other obligation shall contain on its face a statement to the effect that the trust is obligated to pay the principal thereof, redemption premium, if any, or the interest thereon only from revenues or funds of the trust and that neither the State nor any political subdivision thereof is obligated to pay the principal thereof, redemption premium, if any, or interest thereon and that neither the faith and credit nor the taxing power of the State or any political subdivision thereof is pledged to the payment of the principal of, redemption premium, if any, or the interest on the bonds, notes, or other obligations. For the purposes of this subsection, “political subdivision” does not include the trust.

h. All expenses incurred in carrying out the provisions of this act shall be payable solely from the revenues or funds provided or to be provided under or pursuant to the provisions of this act and nothing in this act shall be construed to authorize the trust to incur any indebtedness or liability on behalf of or payable by the State or any political subdivision thereof.

i. Prior to 10 years after the effective date of this act, the aggregate principal amount of bonds, notes, or other obligations, including subordinated indebtedness, of the trust shall not exceed $50,000,000,000; except that this limitation shall not include any bonds, notes or other obligations, including subordinated indebtedness, of the trust issued for refunding purposes in accordance with the provisions of this section, and any bonds, notes or other obligations of the trust issued to fund the costs of issuance of its bonds, notes, or other obligations. After 10 years after the effective date of this act, the trust may issue only refunding bonds in any amount subject to subsections j. through n. of this section. The trust shall not issue bonds, notes, or other obligations in any State fiscal year in excess of $16,000,000,000, except that if that permitted amount of bonds, notes or other obligations, or any portion thereof, is not issued in a State fiscal year it may be issued in a subsequent State fiscal year. Any increase in this limitation shall only occur if so provided for by law. The limitations specified in this subsection shall apply only to bonds, notes, or other obligations of the trust that are payable from, or secured by, amounts on deposit in the Climate Adaptation, Resiliency, and Affordability Fund established pursuant to section 16 of this act.

j. Upon the decision by the trust to issue refunding bonds pursuant to this section, and prior to the sale of those bonds, the trust shall transmit to the Joint Budget Oversight Committee, or its successor, a report that a decision has been made, reciting the basis on which the decision was made, including an estimate of the debt service savings to be achieved and the calculations upon which the trust relied when making the decision to issue refunding bonds. The report shall also disclose the intent of the trust to issue and sell the refunding bonds at public or private sale and the reasons therefor.

k. The Joint Budget Oversight Committee, or its successor, shall have authority to approve or disapprove the sale of refunding bonds as included in each report submitted in accordance with subsection j. of this section. The Joint Budget Oversight Committee, or its successor, shall approve or disapprove the sale of refunding bonds within 10 business days after physical receipt of the report. The Joint Budget Oversight Committee, or its successor, shall notify the trust in writing of the approval or disapproval as expeditiously as possible.

l. No refunding bonds shall be issued unless the report has been submitted to and approved by the Joint Budget Oversight Committee, or its successor, as set forth in subsection k. of this section.

m. Within 30 days after the sale of the refunding bonds, the trust shall notify the Joint Budget Oversight Committee, or its successor, of the result of that sale, including the prices, terms, conditions, and regulations concerning the refunding bonds, and the actual amount of debt service savings to be realized as a result of the sale of refunding bonds.

n. The Joint Budget Oversight Committee, or its successor, shall, however, review all information and reports submitted in accordance with this section and may, on its own initiative, make observations and recommendations to the trust or to the Legislature, or both, as it deems appropriate.

10. a. In any resolution of the trust authorizing or relating to the issuance of any bonds, notes, or other obligations or in any indenture securing the bonds, notes, or other obligations, the trust, in order to secure the payment of the bonds, notes, or other obligations and in addition to its other powers, shall have the power by provisions therein, which shall constitute covenants by the trust and contracts with the holders of the bonds, notes, or other obligations, to:

(1) pledge all or any part of its revenues or receipts to which its right then exists or may thereafter come into existence and other moneys or funds as the trust shall determine and the moneys derived therefrom, and the proceeds of any bonds, notes, or other obligations;

(2) pledge any agreement, including a grant, agreement or contract with the federal government, the revenues or payments thereunder and the proceeds thereof;

(3) covenant against pledging all or any part of its revenues or receipts or its agreements and the revenues derived thereunder or the proceeds thereof and other moneys or funds as the trust shall determine and the moneys derived therefrom or against permitting or suffering any lien on any of the foregoing;

(4) covenant with respect to limitations on any right to sell, lease, or otherwise dispose of any property of any kind;

(5) covenant as to any bonds, notes, and other obligations to be issued, the limitations, terms, and conditions thereof, and the custody, application, investment, and disposition of the proceeds thereof;

(6) covenant as to the issuance of additional bonds, notes, or other obligations or as to limitations on the issuance of additional bonds, notes, or other obligations and on the incurring of other debts by it;

(7) covenant as to the payment of the principal of, or interest on, the bonds, notes, or other obligations, as to the sources and methods of payment, as to the rank or priority of any bonds, notes, or obligations with respect to any lien or security, or as to the acceleration of the maturity of any bonds, notes, or obligations;

(8) provide for the replacement of lost, stolen, destroyed, or mutilated bonds, notes, or other obligations;

(9) covenant against extending the time for the payment of bonds, notes, or other obligations or interest thereon;

(10) covenant as to the redemption of bonds, notes, or other obligations and privileges of exchange thereof for other bonds, notes, or other obligations of the trust;

(11) covenant to create or authorize the creation of special funds or moneys to be held in pledge or otherwise for payment or redemption of bonds, notes, or other obligations, reserves, or other purposes and as to the use, investment, and disposition of the moneys held in the funds;

(12) establish the procedure, if any, by which the terms of any contract or covenant with, or for the benefit of, the holders of bonds, notes, or other obligations may be amended or abrogated, the amount of bonds, notes, or other obligations the holders of which must consent thereto, and the manner in which the consent may be given;

(13) provide for the release of property, agreements, revenues, or receipts from any pledge;

(14) reserve rights and powers in, or the right to dispose of, property which is subject to a pledge;

(15) provide for the rights, liabilities, powers, and duties arising upon the breach of any covenant, condition, or obligation;

(16) prescribe the events of default and the terms and conditions upon which any or all of the bonds, notes, or other obligations of the trust shall become, or may be declared, due and payable before maturity and the terms and conditions upon which any declaration and its consequences may be waived;

(17) vest in a trustee or trustees within or outside of the State such property, rights, powers, and duties in trust as the trust may determine, and to limit the rights, duties and powers of that trustee or trustees;

(18) execute all bills of sale, conveyances, deeds of trust, and other instruments necessary or convenient in the exercise of its powers or in the performance of its covenants or duties;

(19) pay the costs or expenses incident to the enforcement of the bonds, notes, or other obligations or of the provisions of the resolution or of any covenant or agreement of the trust with the holders of its bonds, notes, or other obligations;

(20) limit the rights of the holders of any bonds, notes, or other obligations to enforce any pledge or covenant securing the bonds, notes, or other obligations; and

(21) make covenants, in addition to the covenants expressly authorized in this subsection, of like or different character, and to make covenants to do or refrain from doing acts and things as may be necessary, convenient, or desirable, in order to better secure bonds, notes, or other obligations or which in the absolute discretion of the trust will tend to make bonds, notes, or other obligations more marketable, notwithstanding that the covenants, acts, or things may not be enumerated herein.

b. Any pledge of revenues, moneys, funds, or other property made by the trust shall be valid and binding from the time when the pledge is made. The revenues, moneys, funds. or other property so pledged and thereafter received by the trust shall immediately be subject to the lien of the pledge without any physical delivery thereof or further act, and the lien of any pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the trust, irrespective of whether the parties have notice thereof. Neither the resolution nor any other instrument by which a pledge of revenues, moneys, or funds is created need be filed or recorded, except in the records of the trust.

c. Neither the members of the trust nor any person executing bonds, notes or other obligations issued pursuant to this act shall be liable personally on the bonds, notes or other obligations by reason of the issuance thereof.

d. The trust may establish reserves, funds or accounts as may be, in its discretion, necessary or desirable to further the accomplishment of the purposes of the trust or to comply with the provisions of any agreement made by, or any resolution of, the trust.

11. The State does hereby pledge to and covenant and agree with the holders of any bonds, notes, or other obligations issued or incurred pursuant to the authorization of this act that the State will not limit or alter the rights or powers hereby vested in the trust in any way that would jeopardize the interest of the holders of the bonds, notes, or other obligations or inhibit or prevent performance or fulfillment by the trust of the terms of any agreement made with the holders of the bonds, notes, or other obligations, or prevent the trust from obtaining sufficient revenues which, together with other available funds, shall be sufficient to meet all expenses of the trust and fulfill the terms of any agreement made with the holders of the bonds, notes, or other obligations, together with interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceedings by or on behalf of the holders, as provided in any agreement provided for in this act, until the bonds, notes, or other obligations, together with interest thereon, are fully met and discharged or provided for. The failure of the State to appropriate moneys for any purpose of this act shall not be deemed or construed to be a violation of this section.

12. The State and all public officers, governmental units, and agencies thereof, all banks, trust companies, savings banks, and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations, and other persons carrying on an insurance business, and all executors, administrators, guardians, trustees, and other fiduciaries may legally invest any sinking funds, moneys, or other funds belonging to them or within their control in any bonds, notes, or other obligations issued pursuant to this act, and the bonds, notes, or other obligations shall be authorized security for any and all public deposits.

13. All property of the trust is declared to be public property devoted to an essential public and governmental function and purpose and shall be exempt from all taxes and special assessments of the State or any political subdivision thereof. All bonds, notes, or other obligations issued pursuant to this act are hereby declared to be issued by a body corporate and politic of the State and for an essential public and governmental purpose and the bonds, notes, and other obligations, and the interest thereon and the income therefrom, and all funds, revenues, income and other moneys received, or to be received, by the trust and pledged or available to pay or secure the payment of the bonds, notes, and other obligations, or interest thereon, shall at all times be exempt from taxation, except for transfer inheritance and estate taxes.

14. a. On or before the first day of September in each year, commencing with the calendar year after the effective date of this act, the trust shall make an annual report of its activities for the preceding State fiscal year to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, in addition to responding to other requests made by the Legislature from time to time. The report shall set forth a complete operating and financial statement covering its operations during the year.

b. (1) On or before the first day of September in every fifth year, commencing with the calendar year after the effective date of this act, the trust shall, in consultation with the Department of Environmental Protection, the Department of the Treasury, the Department of Transportation, the Board of Public Utilities, the Department of Health, the Department of Education, the Department of Agriculture, the Department of Community Affairs, and the Department of Labor and Workforce Development, develop and submit to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, a Climate Adaptation Master Plan, which provides a strategy for the State to respond to the deleterious effects of climate change on 20-year time horizon.

(2) The Climate Adaptation Master Plan shall be developed using public input and a stakeholder engagement process, including, but not limited to, engagement with labor organizations, trade organizations, local governments, environmental organizations, environmental justice organizations, business organizations, transportation organizations, health organizations, education organizations and agriculture organizations.

(3) The trust shall hold at least four public hearings during the process of formulating each Climate Adaptation Master Plan, one of which shall be in the northern region of the State, one of which shall be in the central region of the State, one of which shall be in the southern region of the State, and one of which shall be in the coastal region of the State. As used in this paragraph: “northern region” means the counties of Bergen, Essex, Hudson, Morris, Passaic, Sussex, and Warren; “central region” means the counties of Hunterdon, Mercer, Middlesex, Somerset, and Union; “southern region” means the counties of Burlington, Camden, Cumberland, Gloucester, and Salem; and “coastal region” means the counties of Atlantic, Cape May, Monmouth, and Ocean.

(4) The Climate Adaptation Master Plan shall include a Statewide risk assessment, which informs local governments and State agencies about the likely deleterious effects of climate change on the 20-year time horizon.

(5) The Climate Adaptation Master Plan shall be consistent with any State hazard mitigation plan and the latest climate change projections developed by the Department of Environmental Protection.

c. The trust shall cause an audit of its books and accounts to be made at least once in each year by certified public accountants and the cost thereof shall be considered an expense of the trust and a copy thereof shall be filed with the Director of the Division of Budget and Accounting in the Department of the Treasury. Notwithstanding the provisions of any law to the contrary, the State Auditor, or the State Auditor’s legally authorized representative, may examine the accounts and books of the trust.

15. All officers, departments, boards, agencies, divisions, and commissions of the State are hereby authorized and empowered to render any and all services to the trust as may be within the area of their respective governmental functions as fixed or established by law, and as may be requested by the trust. Insofar as possible, the cost and expense of any services shall be met and provided for by those officers, departments, boards, agencies, divisions, and commissions.

16. a. There is established in the Department of the Treasury a special, nonlapsing fund to be known as the “Climate Adaptation, Resiliency, and Affordability Fund.” Moneys in the fund shall be held separately and be dedicated solely for the purposes of this act.

b. The Climate Adaptation, Resiliency, and Affordability Fund shall be credited with:

(1) cost recovery payments distributed to the fund pursuant to section 5 of this act;

(2) the proceeds of any bond issuance carried out by the trust pursuant to sections 9 through 12 of this act;

(3) any other moneys appropriated by the Legislature or otherwise made available to the fund for the purposes of this act;

(4) other gifts, donations, or other moneys received from any source, public or private, dedicated for deposit into the fund and approved by the State Treasurer; and

(5) any interest earnings or other investment income earned or received on the moneys in the fund.

c. (1) There is established in the Department of Transportation a special nonlapsing fund to be known as the “Resilient Transportation and NJ Transit Fund.” Each year, the State Treasurer shall deposit 25 percent of the available moneys in the “Climate Adaptation, Resiliency, and Affordability Fund” into the “Resilient Transportation and NJ Transit Fund” established pursuant to this paragraph. The Department of Transportation shall submit to the trust, twice per year, a list of recommended climate change adaptation projects to be funded using moneys in the “Resilient Transportation and NJ Transit Fund.” At least 50 percent of funds distributed each year pursuant to this paragraph shall be used to support public transportation projects in collaboration with the New Jersey Transit Corporation.

(2) There is established in the Board of Public Utilities a special nonlapsing fund to be known as the “Resilient Electric Grid Improvement Fund.” Each year, the State Treasurer shall deposit 25 percent of the available moneys in the “Climate Adaptation, Resiliency, and Affordability Fund” into the “Resilient Electric Grid Improvement Fund” established pursuant to this paragraph. The Board of Public Utilities shall submit to the trust, twice per year, a list of recommended climate change adaptation projects to be funded using moneys in the “Resilient Electric Grid Improvement Fund.”

(3) There is established in the Department of Environmental Protection a special nonlapsing fund to be known as the “Climate Adaptation Fund.” Each year, the State Treasurer shall deposit 25 percent of the available moneys in the “Climate Adaptation, Resiliency, and Affordability Fund” into the “Climate Adaptation Fund” established pursuant to this paragraph. The Department of Environmental Protection shall submit to the trust, twice per year, a list of recommended climate change adaptation projects to be funded using moneys in the “Climate Adaptation Fund.”

(4) There is established in the Department of Health a special nonlapsing fund to be known as the “Climate Health Fund.” Each year, the State Treasurer shall deposit five percent of the available moneys in the “Climate Adaptation, Resiliency, and Affordability Fund” into the “Climate Health Fund” established pursuant to this paragraph. The Department of Health shall submit to the trust, twice per year, a list of recommended climate change adaptation projects to be funded using moneys in the “Climate Health Fund.”

(5) There is established in the Department of Education a special nonlapsing fund to be known as the “Resilient School Fund.” Each year, the State Treasurer shall deposit five percent of the available moneys in the “Climate Adaptation, Resiliency, and Affordability Fund” into the “Resilient School Fund” established pursuant to this paragraph. The Department of Education shall submit to the trust, twice per year, a list of recommended climate change adaptation projects to be funded using moneys in the “Resilient School Fund.”

(6) There are established in the Department of Agriculture two special nonlapsing funds, to be known as the “Fund for a Resilient Garden State,” for use in supporting agricultural resiliency projects, and the “Climate and Food Security Fund,” for use in supporting projects aimed at reducing food insecurity and promoting resiliency in food distribution. Each year, the State Treasurer shall deposit 2.5 percent of the available moneys in the “Climate Adaptation, Resiliency, and Affordability Fund” into the “Fund for a Resilient Garden State” and 2.5 percent into the “Climate and Food Security Fund.” The Department of Agriculture shall submit to the trust, twice per year, a list of recommended climate change adaptation projects to be funded using moneys in the funds established pursuant to this paragraph.

(7) There is established in the Department of Labor and Workforce Development a special nonlapsing fund to be known as the “Climate Workforce Development Fund.” Each year, the State Treasurer shall deposit five percent of the available moneys in the “Climate Adaptation, Resiliency, and Affordability Fund” into the “Climate Workforce Development Fund” established pursuant to this paragraph. The Department of Labor and Workforce Development shall submit to the trust, twice per year, a list of recommended climate change adaptation projects to be funded using moneys in the “Climate Workforce Development Fund.”

(8) There is established in the Department of Community Affairs a special nonlapsing fund to be known as the “Climate Housing Resilience Fund.” Each year, the State Treasurer shall deposit five percent of the available moneys in the “Climate Adaptation, Resiliency, and Affordability Fund” into the “Climate Housing Resilience Fund” established pursuant to this paragraph. The Department of Community Affairs shall submit to the trust, twice per year, a list of recommended climate change adaptation projects to be funded using moneys in the “Climate Housing Resilience Fund.”

d. All moneys appropriated or otherwise made available to a fund established pursuant to this section shall be dedicated for the purposes of the fund. Pending use, moneys in the fund may be invested and reinvested in the same manner as other moneys of the department in the manner provided by law. All earnings received from the investment or deposit of such moneys shall be paid into and become a part of the fund and be available for use pursuant to this act.

e. (1) The trust shall for each fiscal year develop a priority system for the ranking of climate change adaptation projects submitted to it by State agencies pursuant to this section, to be financed through the Climate Adaptation, Resiliency, and Affordability Program. The priority system shall evaluate projects based on their ability to assess, reduce, and manage risks caused by climate change, including, but not limited to, sea-level rise, flooding, and extreme heat. The priority system shall prioritize projects that include robust community engagement, a cost-benefit analysis, or measures designed to protect vulnerable populations.

(2) At least 51 percent of grant funds issued under the Climate Adaptation, Resiliency, and Affordability Program shall be awarded to projects that provide environmental or other benefits to overburdened communities.

(3) At least five percent of grant funds under the Climate Adaptation, Resiliency, and Affordability Program shall be awarded to local government entities.

f. (1) The trust, in consultation with the Department of Environmental Protection, shall set forth a Climate Adaptation, Resiliency, and Affordability Program Project Priority List for funding for each fiscal year and shall include: (a) the aggregate amount of funds to be authorized for these purposes; (b) a description of each climate change adaptation project; and (c) an explanation of the manner in which projects are ranked. A draft project priority list for the ensuing fiscal year shall be submitted to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1) on or before January 15 of each year. The Legislature shall hold a public hearing on the draft project priority list on or before February 15 of each year. The trust shall submit, to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), a final project priority list for the ensuing fiscal year on or before March 1 of each year. The trust shall include a statement with the final priority list, which explains how the list is consistent with the Climate Adaptation Master Plan and the provisions of this act. The Senate Secretary and the Clerk of the General Assembly shall cause the date of submission to be entered upon the Senate Journal and the Minutes of the General Assembly, respectively.

(2) Any climate change adaptation project not identified by project sponsor, municipality, and county in the project priority list pursuant to paragraph (1) of this subsection shall not be eligible for a grant from any fund established pursuant to section 16 of this act. The trust may revise or supplement the project priority list no more than four times during the fiscal year and shall submit the revised list to the Legislature when the revisions are made. No funds may be disbursed pursuant to this subsection for climate change adaptation project activities prior to certification in writing, from the State agency that recommended the project, to the State Treasurer, that the project activities satisfy the provisions of this act.

g. On or before May 15 of each year, the Legislature shall introduce in each House, in the form of legislative appropriations bills, the final Climate Adaptation, Resiliency, and Affordability Program Project Priority List, which shall be referred to the Senate Environment and Energy Committee and the Assembly Environment and Solid Waste Committee, or their successors, for their respective consideration. The Senate Environment and Energy Committee and the Assembly Environment and Solid Waste Committee shall, either individually or jointly, consider the legislation containing the Climate Adaptation, Resiliency, and Affordability Program Project Priority List, and shall report the legislation, together with any modifications, out of committee for consideration by each House of the Legislature. On or before July 1 of each year, the Legislature and Governor shall approve an appropriations act containing the Climate Adaptation, Resiliency, and Affordability Program Project Priority List, which act shall include the authorization of an aggregate amount of funds to be expended for grants for climate change adaptation projects, including the individual amounts therefor, on the list. The appropriations act may include administrative expenses, to cover the costs of any State agency involved in the implementation of the Climate Adaptation, Resiliency, and Affordability Program, so long as the administrative expenses do not exceed five percent of the total appropriation.

h. A State agency shall not expend any funds during a fiscal year for any climate change adaptation project unless the expenditure is authorized pursuant to an appropriations act of the current or three immediate preceding fiscal years as provided in the provisions of this section, or as otherwise set forth in an appropriations act. Any funds appropriated but not expended three years after the date of the first appropriation shall be returned to the “Climate Adaptation, Resiliency, and Affordability Fund” and the project to which they were appropriated shall be ineligible to apply to the Climate Adaptation, Resiliency, and Affordability Program for a period of one year.

17. a. Any State agency, when determining which projects to provide to the trust for consideration pursuant to section 16 of this act, and any public entity, when considering and issuing permits, licenses, regulations, contracts, or other administrative approvals and decisions necessary for the implementation of projects funded in whole, or in part, through the Climate Adaptation, Resiliency, and Affordability Program, shall apply the following standards:

(1) for any construction work, all employees of any contractors or subcontractors shall be paid the prevailing wage, as determined by the Commissioner of Labor and Workforce Development pursuant to P.L.1963, c.150 (C.34:11-56.25 et seq.) and, for any building service and maintenance work shall be paid the prevailing wage, as determined by the Commissioner of Labor and Workforce Development pursuant to P.L.2005, c.379 (C.34:11-56.58 et seq.). Whenever a recipient of moneys from the Climate Adaptation, Resiliency, and Affordability Fund contracts building service work or operations and maintenance work to a building service contractor, the contractor shall be held to the same obligations with respect to prevailing wages as the recipient. The recipient shall include terms establishing this obligation within any contract signed with a contractor;

(2) any climate change adaptation project that receives at least $5 million through the Climate Adaptation, Resiliency, and Affordability Program may be developed and constructed pursuant to a project labor agreement, in the manner provided by P.L.2002, c.44 (C.52:38-1 et seq.), and any employer who benefits from a grant from the fund and has employees at one or more facilities for which work was funded, in whole or in part, by the grant, shall enter into a labor harmony agreement with one or more labor organizations which represent employees in the economic sector of the facility and the agreement shall remain in effect as long as the fund has a proprietary interest in the project, except not longer than three years;

(3) to the extent practicable, contractors and subcontractors shall participate in apprenticeship programs, workforce training programs, and programs that provide for the recruitment of local or disadvantaged workers; and

(4) all manufactured products or materials used in construction, renovation or maintenance shall be produced or made in whole, or in substantial part, in the United States.

b. The Department of Labor and Workforce Development shall establish labor compliance standards applicable to projects funded under this act. The department may audit projects and enforce compliance with the standards, including the suspension of funding for violations.

c. The State shall apply the standards enumerated in subsections a. and b. of this section to any project that is fully or partially funded by grants under the Climate Adaptation, Resiliency, and Affordability Program to further the State’s proprietary interest as a market participant in the project.

d. Notwithstanding any provision of this section to the contrary, all rights or benefits, including terms and conditions of employment, and protection of civil service and collective bargaining status of all existing public employees shall be preserved and protected. Nothing in this section shall result in the:

(1) displacement of any currently employed worker or loss of position, including partial displacement such as a reduction in the hours of non-overtime work, wages, or employment benefits;

(2) impairment of existing collective bargaining agreements;

(3) transfer of existing duties and functions related to maintenance and operations currently performed by existing employees of authorized entities to a contracting entity; or

(4) transfer of future duties and functions ordinarily performed by employees of authorized entities to a contracting entity.

18. a. Nothing in this act shall be construed to supersede or diminish in any way existing remedies available to a person or the State at common law or under statute.

b. Nothing in this act shall be construed to preempt, displace, restrict, or limit in any way any other claim or remedy available to a person.

c. Nothing in this act shall be construed to provide the Department of Environmental Protection or any other State agency any additional authority to regulate greenhouse gas emissions or other pollutants, regulate energy production, or to collect any additional surcharges or fees from residents or businesses, other than the cost recovery payments authorized pursuant to subsection b. of section 4 of this act.

d. Nothing in this act shall be construed to authorize a responsible party to impose a surcharge, fee, or other direct charge on residential consumers or small businesses for the purpose of recovering any cost recovery payment made pursuant to this act.

19. a. On or before January 1st of the second calendar year following the date of enactment of this act, and annually thereafter on or before September 30th, the department shall publish an evaluation of the Climate Adaptation, Resiliency, and Affordability Program. The purpose of the evaluation shall be to determine the effectiveness of the program in achieving the purposes enumerated in subsection a. of section 5 of this act. Each evaluation shall be published and maintained on the department’s Internet website and reported to the Governor and the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).

b. The evaluation shall include, but not be limited to:

(1) a list of all responsible parties and their respective cost recovery demands, as well as any changes to an entity’s status as a responsible party during the preceding program year;

(2) an accounting of all cost recovery demands made to responsible parties, actual moneys collected, and penalties or other collection measures taken during the preceding program year;

(3) an accounting of all expenditures from the Climate Adaptation, Resiliency, and Affordability Fund, including, at a minimum, a separate accounting of:

(a) expenditures that benefit overburdened communities;

(b) expenditures used for grant programs for municipalities, community organizations, or other nonprofit organizations; and

(4) a review of the status of climate change adaptation projects funded through the program, including the number of projects that have been completed, and a description of any projects that have been identified but not yet funded;

(5) a summary of the geographic distribution of climate change adaptation projects; and

(6) an identification of future spending needs.

20. No later than one year after the effective date of this act, the Department of Environmental Protection, the Department of the Treasury, the Department of Transportation, the Board of Public Utilities, the Department of Health, the Department of Education, the Department of Agriculture, the Department of Community Affairs, and the Department of Labor and Workforce Development shall, in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement the provisions of this act.

21. This act shall take effect immediately.