The New Jersey Site Remediation Reform Act is Signed Into Law
Overview
On May 7, 2009, Governor Jon Corzine signed the Site Remediation Reform Act (SRRA) (A. 2962) into law. This legislation will profoundly change the process of environmental investigations and cleanups in New Jersey by allowing licensed site remediation professionals (LSRPs) to supervise the cleanup of properties and certify that they have been remediated. The Corzine administration proposed the legislation to help expedite the remediation of sites and combat the backlog of more than 19,000 cases in the New Jersey Department of Environmental Protection (NJDEP) Site Remediation Program.
The governor also signed a related order on May 7, 2009 (Executive Order #140) that outlines the implementation of SRRA. The executive order provides, among other things, that NJDEP will be required to increase monitoring of work being conducted at certain sites, including residential areas and areas used for educational facilities. NJDEP also is required to conduct annual reviews of the LSRP program and to issue reports on the program's implementation.
LSRPs and Their Role
The SRRA creates a licensing program for environmental consultants and contractors to be certified as LSRPs, which will be overseen by a licensing board. In most situations, only LSRPs will be permitted to sign and certify reports during a site's investigation and remediation.
In that regard, NJDEP will no longer review and approve investigation and cleanup plans in advance (except as noted below). Nor is NJDEP required or authorized to issue "No Further Action" (NFA) letters and "Covenants Not To Sue" at the termination of a cleanup. Instead, LSRPs will provide oversight for investigations and cleanups. They also will issue the final document confirming the completion of a remediation. That document will be known as a "Response Action Outcome" (RAO).
LSRPs will have many responsibilities, including determining the required amount of any financial assurance and the reduction thereof as the remediation progresses. LSRPs also have a duty to report knowledge of spills, discharges and evidence of contamination to NJDEP.
The LSRP is required to submit investigative and other documents to NJDEP, including the Remedial Action Workplan. In most instances, NJDEP must generally inspect the documents with the option to conduct a more detailed review in certain instances, (e.g., where the contamination poses a significant detriment to health, safety or the environment; where the contamination may affect a child care center, school or other sensitive population; and where state grants or loans are being used for the remediation).
At the conclusion of the remediation, the LSRP will issue an RAO. NJDEP will no longer issue NFAs. By operation of law, an RAO is deemed to contain a covenant not to sue. The covenant will be revoked by operation of law if the engineering or institutional controls are not being maintained or are no longer in place. Moreover, the covenant does not apply to any new discharge occurring after the issuance of the RAO.
After an RAO is issued, NJDEP can audit the LSRP's work for a period of three years. The bases upon which NJDEP can invalidate the RAO are relatively narrow. Moreover, NJDEP is required to audit at least 10 percent of all documents submitted by LSRPs annually.
When Will the LSRP Program Become Effective?
NJDEP has three months to establish a temporary licensing program for LSRPs and six months to issue interim regulations to implement SRRA. The interim regulations will be effective for 18 months, and there will be no public comment period.
Once the interim rules and temporary licensing program are in effect, all new projects subject to the site remediation program will be overseen by LSRPs, instead of NJDEP, unless they fall into specific exceptions.
Parties currently under NJDEP oversight will have up to three years to transfer to the LSRP program.
NJDEP Will Retain Direct Oversight of Some Sites
SRRA requires NJDEP to maintain or assume direct oversight for sites where the person responsible for remediation: (1) has a history of noncompliance with the remediation laws, including at least two enforcement actions within a five-year period after the enactment of SRRA; (2) has failed to meet a mandatory or expedited deadline under the newly established NJDEP timeframes or a schedule under an administrative or court order; or (3) has failed, before the enactment of SRRA, to complete the remedial investigation of the entire site within 10 years after discovery of the discharge and failed to complete the remedial investigation within five years after SRRA's enactment.
In addition, SRRA allows NJDEP to elect to maintain or undertake direct oversight where: (1) contamination at the site includes chromate wastes; (2) NJDEP determines that more than one environmentally sensitive natural resource has been injured by contamination from the site; (3) the site has contributed to sediment contamination in a surface water body by PCBs, mercury, arsenic or dioxin; or (4) the site is in the highest priority of the new ranking system.
If a site falls into either of these categories, NJDEP will oversee the site's investigation and remediation. In a significant departure from current practice, however, NJDEP will be allowed to select the remedy and require the following in cases where it is providing direct oversight:
Once the LSRP program becomes operational, most parties subject to New Jersey's ISRA statute will be subject to LSRP, instead of NJDEP, oversight. Therefore, instead of entering into a Remediation Agreement with NJDEP, a transaction can close with an LSRP's Remediation Certification. The Remediation Certification includes the LSRP's evaluation of the appropriate financial assurance as well as a certification that the assurance has been established. And, instead of awaiting NJDEP approval of a Remedial Action Workplan, an LSRP certified Remedial Action Workplan will be sufficient. Lastly, rather than seeking an NFA from NJDEP, the remediation will be concluded through an RAO issued by an LSP.
Other Important Changes to the Site Remediation Program
The SSRA contains a number of additional changes to the Site Remediation Program, including:
On May 7, 2009, Governor Jon Corzine signed the Site Remediation Reform Act (SRRA) (A. 2962) into law. This legislation will profoundly change the process of environmental investigations and cleanups in New Jersey by allowing licensed site remediation professionals (LSRPs) to supervise the cleanup of properties and certify that they have been remediated. The Corzine administration proposed the legislation to help expedite the remediation of sites and combat the backlog of more than 19,000 cases in the New Jersey Department of Environmental Protection (NJDEP) Site Remediation Program.
The governor also signed a related order on May 7, 2009 (Executive Order #140) that outlines the implementation of SRRA. The executive order provides, among other things, that NJDEP will be required to increase monitoring of work being conducted at certain sites, including residential areas and areas used for educational facilities. NJDEP also is required to conduct annual reviews of the LSRP program and to issue reports on the program's implementation.
LSRPs and Their Role
The SRRA creates a licensing program for environmental consultants and contractors to be certified as LSRPs, which will be overseen by a licensing board. In most situations, only LSRPs will be permitted to sign and certify reports during a site's investigation and remediation.
In that regard, NJDEP will no longer review and approve investigation and cleanup plans in advance (except as noted below). Nor is NJDEP required or authorized to issue "No Further Action" (NFA) letters and "Covenants Not To Sue" at the termination of a cleanup. Instead, LSRPs will provide oversight for investigations and cleanups. They also will issue the final document confirming the completion of a remediation. That document will be known as a "Response Action Outcome" (RAO).
LSRPs will have many responsibilities, including determining the required amount of any financial assurance and the reduction thereof as the remediation progresses. LSRPs also have a duty to report knowledge of spills, discharges and evidence of contamination to NJDEP.
The LSRP is required to submit investigative and other documents to NJDEP, including the Remedial Action Workplan. In most instances, NJDEP must generally inspect the documents with the option to conduct a more detailed review in certain instances, (e.g., where the contamination poses a significant detriment to health, safety or the environment; where the contamination may affect a child care center, school or other sensitive population; and where state grants or loans are being used for the remediation).
At the conclusion of the remediation, the LSRP will issue an RAO. NJDEP will no longer issue NFAs. By operation of law, an RAO is deemed to contain a covenant not to sue. The covenant will be revoked by operation of law if the engineering or institutional controls are not being maintained or are no longer in place. Moreover, the covenant does not apply to any new discharge occurring after the issuance of the RAO.
After an RAO is issued, NJDEP can audit the LSRP's work for a period of three years. The bases upon which NJDEP can invalidate the RAO are relatively narrow. Moreover, NJDEP is required to audit at least 10 percent of all documents submitted by LSRPs annually.
When Will the LSRP Program Become Effective?
NJDEP has three months to establish a temporary licensing program for LSRPs and six months to issue interim regulations to implement SRRA. The interim regulations will be effective for 18 months, and there will be no public comment period.
Once the interim rules and temporary licensing program are in effect, all new projects subject to the site remediation program will be overseen by LSRPs, instead of NJDEP, unless they fall into specific exceptions.
Parties currently under NJDEP oversight will have up to three years to transfer to the LSRP program.
NJDEP Will Retain Direct Oversight of Some Sites
SRRA requires NJDEP to maintain or assume direct oversight for sites where the person responsible for remediation: (1) has a history of noncompliance with the remediation laws, including at least two enforcement actions within a five-year period after the enactment of SRRA; (2) has failed to meet a mandatory or expedited deadline under the newly established NJDEP timeframes or a schedule under an administrative or court order; or (3) has failed, before the enactment of SRRA, to complete the remedial investigation of the entire site within 10 years after discovery of the discharge and failed to complete the remedial investigation within five years after SRRA's enactment.
In addition, SRRA allows NJDEP to elect to maintain or undertake direct oversight where: (1) contamination at the site includes chromate wastes; (2) NJDEP determines that more than one environmentally sensitive natural resource has been injured by contamination from the site; (3) the site has contributed to sediment contamination in a surface water body by PCBs, mercury, arsenic or dioxin; or (4) the site is in the highest priority of the new ranking system.
If a site falls into either of these categories, NJDEP will oversee the site's investigation and remediation. In a significant departure from current practice, however, NJDEP will be allowed to select the remedy and require the following in cases where it is providing direct oversight:
- The performance of a feasibility study.
- The establishment of a remediation trust fund.
- Approval of all disbursements to the LSRP from the Trust Fund.
- The preparation of a Public Participation Plan.
Once the LSRP program becomes operational, most parties subject to New Jersey's ISRA statute will be subject to LSRP, instead of NJDEP, oversight. Therefore, instead of entering into a Remediation Agreement with NJDEP, a transaction can close with an LSRP's Remediation Certification. The Remediation Certification includes the LSRP's evaluation of the appropriate financial assurance as well as a certification that the assurance has been established. And, instead of awaiting NJDEP approval of a Remedial Action Workplan, an LSRP certified Remedial Action Workplan will be sufficient. Lastly, rather than seeking an NFA from NJDEP, the remediation will be concluded through an RAO issued by an LSP.
Other Important Changes to the Site Remediation Program
The SSRA contains a number of additional changes to the Site Remediation Program, including:
- NJDEP must establish a permitting program for institutional and engineering controls, with specific financial assurance requirements.
- The Spill Act's innocent purchaser requirements are amended to provide that LSRP certified work is deemed equivalent to that overseen and approved by NJDEP.
- NJDEP must establish a new system to rank priority remediation sites within a year. NJDEP may choose to retain oversight of properties in the highest categories, instead of relying upon certifications by LSRPs.
- NJDEP must establish mandatory time frames for every stage of an environmental investigation and cleanup, including preliminary assessments, site investigations, remedial investigations and remedial actions. These deadlines will apply whether the site is directly overseen by NJDEP or an LSRP.
- NJDEP must establish "presumptive remedies" for cleanups of certain sites, such as residential properties, schools and day care facilities. These projects are to be cleaned up to unrestricted use status, or pursuant to a presumptive remedy, with certain exceptions available on an individual basis. Moreover, construction of single family homes, schools and day care centers is prohibited on landfills where engineering controls are required for management of landfill gas or leachate.
- Letters of Credit are now included on the list of permissible remediation financial assurances. The use of a self-guarantee as financial assurance is modified to require that proof of financial wherewithal include audited financial statements in which the auditor expresses an "unqualified opinion" as to the applicant's assets and liabilities.
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