Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Will Your New Jersey Business Soon Be Charged a Rain Tax?

Author: Daniel T. McKillop

Date: February 7, 2019

Key Contacts

Back

Senate Bill 1073 Has Reached the Desk of Gov. Phil Murphy, Which Would Allow New Jersey Municipalities to Charge Property Owners a Rain Tax

Senate Bill 1073 has reached the desk of Gov. Phil Murphy that would allow New Jersey municipalities to establish local stormwater utilities, which could then charge property owners a fee based on “a fair and equitable approximation” of how much runoff is generated from their property. 

While former Gov. Chris Christie vetoed similar legislation in the past, the odds of enactment are far better under Gov. Murphy. The New Jersey Department of Environmental Protection (NJDEP) also publicly supports the legislation. 

New Jersey Stormwater Utility Legislation

Under Senate Bill No. 1073, the governing body of any county or municipality could approve a resolution or ordinance that establishes a stormwater utility for the purposes of acquiring, constructing, improving, maintaining, and operating stormwater management systems. Similarly, the governing body or bodies of one or more municipalities that have established a municipal sewerage authority or utilities authority could request that the authority establish a stormwater utility.

Local governments that establish a stormwater utility would be authorized to charge and collect reasonable fees and other charges to recover the utility’s costs for stormwater management. Under the proposed bill, these fees and other charges would be collected from the owner or occupant (or both) of any real property from which originates stormwater runoff which enters the stormwater management system or the waters of the State. 

Senate Bill 1073 provides that any stormwater management fee would be based on a “fair and equitable approximation of the proportionate contribution of stormwater from a real property.” The bill provides that municipalities that establish stormwater utilities must issue credits in certain circumstances, including a partial fee reduction in the form of a credit for any property that maintains and operates a stormwater management system that complies with the State and local stormwater management standards that were in place at the time the system was approved.

Under the legislation, the owner of a stormwater management system that complies with stormwater management standards that were in place at the time the system was approved may retain ownership of the system or may offer to dedicate it to the county, municipality, or authority. However, an owner who dedicates a system would still be liable for paying any applicable utility fees imposed under the bill.

Municipalities would also be required to provide a credit for any property that has installed and is operating and maintaining current stormwater best management practices that reduce, retain, or treat stormwater onsite.  An additional credit would be required for any property which has installed and is operating and maintaining green infrastructure onsite. Notably, Senate Bill 1073 specifies that the credit for installing and operating stormwater best management practices applies only if current best management practices are used.

With respect to enforcement, the proposed stormwater utility bill  provides counties, municipalities, and authorities with several enforcement mechanisms, which are similar to the enforcement mechanisms that currently exist for water and sewer utilities. Specifically, interest would accrue on the unpaid fees and other charges; the unpaid balance and any accrued interest would constitute a lien on the parcel which would be enforced in the same manner as delinquent property taxes and municipal charges; and the unpaid balance and any accrued interest could be recovered in a civil action, along with attorney’s fees.

While most agree that New Jersey needs to better address stormwater runoff, critics of Senate Bill 1073 maintain that its proposed solution amounts to a “rain tax” on businesses that are often already doing their part to curb runoff. They further maintain that local cities and towns would have too much discretion in determining what fees to impose.

“For many businesses, the fees authorized in this bill would amount to double taxation,” NJBIA Vice President of Government Affairs Tony Bawidamann said. “Companies would be assessed a fee by a local stormwater authority, even if they already have a [stormwater] permit. Furthermore, there is no guarantee that these fees will be used for their intended purposes.”

What’s Next?

The New Jersey Legislature passed the bill on January 31, 2019. Gov. Phil Murphy has up to 45 days (this Sunday) to sign or reject the bill. If no action is taken by then, the bill becomes law. Provided Gov. Murphy does sign it into law, the NJDEP would then draft the regulations needed to implement it, which may take time. The next step would be for local municipalities to determine whether to create stormwater utilities. Given the importance of this issue for New Jersey businesses, the attorneys of the Environmental and Land Use Law practice group at Scarinci Hollenbeck will keep you posted on any updates.

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
New York NDA Requirements for Businesses post image

New York NDA Requirements for Businesses

Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]

Author: Dan Brecher

Link to post with title - "New York NDA Requirements for Businesses"
New Jersey Will Contest Grounds Explained post image

New Jersey Will Contest Grounds Explained

How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]

Author: Marc J. Comer

Link to post with title - "New Jersey Will Contest Grounds Explained"
Legal Issues Before Bringing on Investors post image

Legal Issues Before Bringing on Investors

Bringing on outside investors can provide the capital and strategic support a business needs to grow. However, raising capital also introduces important legal, financial, and operational considerations. Before bringing on investors, businesses should address key legal issues to reduce risk, streamline investor due diligence, and position the company for long-term success. Early preparation signals that […]

Author: Dan Brecher

Link to post with title - "Legal Issues Before Bringing on Investors"
SECURE 2.0 RMD Planning Strategies post image

SECURE 2.0 RMD Planning Strategies

How the Updated Law Shapes Retirement and Estate Planning The SECURE 2.0 Act of 2022 materially reshapes the required minimum distribution (RMD) landscape, extending tax deferral opportunities while accelerating distribution requirements for many beneficiaries. For high-net-worth individuals and families, these changes are not merely technical. They require a reassessment of retirement income strategies, beneficiary planning, […]

Author: Marc J. Comer

Link to post with title - "SECURE 2.0 RMD Planning Strategies"
Buying Commercial Property in New Jersey: Legal Guide for Small Businesses post image

Buying Commercial Property in New Jersey: Legal Guide for Small Businesses

Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]

Author: Robert L. Baker, Jr.

Link to post with title - "Buying Commercial Property in New Jersey: Legal Guide for Small Businesses"
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities post image

The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities

On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]

Author: Dan Brecher

Link to post with title - "The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!