New Jersey-2014-S383-Introduced

An Act requiring water utilities to cover costs related to flooding damage under certain circumstances and supplementing Title 58 of the Revised Statutes.

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

1. As used in this act:

"Adverse flooding event" means a flood resulting from a failure of a water utility's facilities or water delivery system, including, but not limited to, a water main break, leak, or other similar occurrence, located on the facilities, pipe, or conduit system used for conveying water that is owned, controlled, or operated by a water utility which results in damage to real or personal property, provided that: (1) there is not evidence to show that such break, leak, or occurrence was proximately caused by damage resulting from a major catastrophic event, and (2) the break, leak, or occurrence results in damage to property which is not located in a Special Flood Hazard Area, as identified by the Federal Emergency Management Agency, and which is not subject to federal flood insurance purchase requirements under the provisions of section 339.3 of title 12, Code of Federal Regulations, or any other federal law, rule, or regulation.

"Compensation" means payment for damages intended to make good the loss of an injured party, and no more. The term does not include nominal, exemplary, or punitive damages.

"Major catastrophic event" means a natural or humanly caused occurrence arising from conditions beyond the control of the utility, such as (1) an act of war, terrorism, or sabotage, or (2) a natural event such as an earthquake, thunderstorm, tornado, hurricane, flood, heat wave, or snow and ice storm, which results in the declaration of a state of emergency or disaster by the State or by the federal government.

"Water utility" means any (1) public utility as defined under R.S.48:2-13 that provides water for human consumption; (2) any municipal or county utilities authority created pursuant to the "municipal and county utilities authorities law," P.L.1957, c.183 (C.40:14B-1 et seq.) that provides water for human consumption; or (3) any other person, public or private, or entity who owns or operates any plant, equipment, or property in connection with the provision of potable water service.

2. a. Notwithstanding any provision of the "New Jersey Tort Claims Act," (N.J.S.59:1-1 et seq.), or any other law, rule, regulation, or order, to the contrary, a water utility shall be strictly liable, without regard to fault, for compensation for cleanup and removal costs and for compensation for all direct and indirect damages no matter by whom sustained, including, but not limited to:

(1) The cost of restoring, repairing, or replacing any real or personal property damaged or destroyed by an adverse flooding event;

(2) Any income lost from the time such property is damaged to the time such property is restored, repaired, or replaced, and any reduction in value of such property caused by such adverse flooding event by comparison with its value prior thereto;

(3) Impairment of earning capacity due to damage to real or personal property, provided that such loss or impairment exceeds 10 percent of the amount which plaintiff derives, based upon income or business records, exclusive of other sources of income, from activities related to the particular real or personal property damaged or destroyed by such adverse flooding event during the time frame for which the action is filed;

(4) Loss of tax revenue by the State or local governments for a period of one year due to damage to real or personal property proximately resulting from an adverse flooding event; and
(5) Interest on loans obtained or other obligations incurred by a claimant for the purpose of ameliorating the adverse effects of an adverse flooding event.

b. Nothing in this section shall be construed to extend or negate the right of any person to bring an action for compensation that may exist under any other act or under common law.

c. A water utility shall not be liable for damages pursuant to this section for damages to property which is located in a Special Flood Hazard Area, as identified by the Federal Emergency Management Agency, and which is not subject to federal flood insurance purchase requirements of section 339.3 of title 12, Code of Federal Regulations, or any other federal law, rule, or regulation.

d. In addition to any other defenses provided under this section, an act or omission caused solely by war, sabotage, or a major catastrophic event, or a combination thereof, shall be the only defenses which may be raised by any water utility responsible for an adverse flooding event in any action arising under the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).

3. This act shall take effect immediately.

STATEMENT

This bill provides that water utilities, including both public and private potable water service providers, shall be liable to cover costs related to damages to real or personal property resulting from an adverse flooding event. An "adverse flooding event" is defined to mean a flood resulting from a failure of a water utility's facilities or water delivery system, including, but not limited to, a water main break, leak, or other similar occurrence which results in damage to real or personal property, provided that: (1) there is not evidence to show that such break, leak, or occurrence was proximately caused by damage resulting from a major catastrophic event, such as a natural disaster or weather event resulting in a the declaration of a state of emergency or disaster by the State or by the federal government, and (2) the break, leak, or occurrence results in damage to property which is not located in a Special Flood Hazard Area, as identified by the Federal Emergency Management Agency, and which is not subject to federal flood insurance purchase requirements.

Under the bill, a claimant may be compensated for damages related to: (1) The cost of restoring, repairing, or replacing any real or personal property damaged or destroyed by an adverse flooding event; (2) Any income lost from the time such property is damaged to the time such property is restored, repaired or replaced, and any reduction in value of such property caused by such adverse flooding event by comparison with its value prior thereto; (3) Impairment of earning capacity due to damage to real or personal property, provided that such impairment exceeds 10% of the amount which a claimant derives, based upon income or business records, exclusive of other sources of income, from activities related to the particular real or personal property damaged or destroyed by such adverse flooding event during the time frame for which the action is filed; (4) Loss of tax revenue by the State or local governments for a period of one year due to damage to real or personal property proximately resulting from an adverse flooding event; and (5) Interest on loans obtained or other obligations incurred by a claimant for the purpose of ameliorating the adverse effects of an adverse flooding event.