On May 7, 2009, Governor Jon Corzine signed Senate bill S.1897 (a/k/a Assembly bill A.2962), the "Site Remediation Reform Act" ("SRRA").
There are approximately 20,000 sites in New Jersey's Site Remediation Program and given limitations in staffing and funding, New Jersey's Department of Environmental Protection ("NJDEP") has had difficulty evaluating all of the sites, moving them expeditiously through the remediation process and verifying that the remediation was performed in accordance with existing rules and regulations.
The SRRA is a lengthy and complex bill which establishes a licensing program for site remediation professionals and makes numerous other changes to many of the statutes governing the remediation of contaminated sites. The Act is intended to provide quick relief to NJDEP from the growing backlog of cases and delays that are so prevalent in contaminated sites in New Jersey. By creating the licensing program and delegating specific responsibilities to a Licensed Site Remediation Professional ("LSRP"), the Act allows NJDEP to focus on high priority sites for which it will retain direct oversight responsibility.
By November 3, 2009 (180 days after enactment of the SRRA), any person who initiates remediation of a contaminated site shall (i) hire an LSRP to perform the remediation; (ii) notify NJDEP of the name and license information of the LSRP hired; (iii) conduct the remediation without the prior approval of NJDEP (unless otherwise required); and (iv) establish a remediation funding source, if otherwise required by statute.
In new cases, LSRPs will propose and approve remediation activities and its decisions and reports will be submitted to NJDEP but the activities are to proceed, in most instances, without NJDEP approval. The Act requires NJDEP to establish a permit program to regulate the operation, maintenance and inspection of engineering or institutional controls and related systems. The Act also permits NJDEP to require persons currently responsible for engineering or institutional controls to obtain a permit for the continued use of such controls.
The Act identifies the main goal of LSRPs as the protection of public health, safety, and the environment and not, necessarily, the best interests of its clients. Based upon numerous statutory obligations placed on them, LSRPs will be less likely to act as a client's advocate as it will be a stand-in for the state.
One of the statutory obligations imposed on LSRPs is the obligation to disclose information to NJDEP regarding known discharges, work defects and deviations (even if learned by the LSRP after its completion of a report), immediate environmental concerns, and hirings and dismissals. Individuals that become LSRPs (and their clients) should take note that the SRRA now imposes an independent statutory obligation, if the LSRP becomes aware that a discharge has occurred, to notify the client and, more importantly, to notify NJDEP by calling its Spill Act hotline.
When the LSRP determines a site has been remediated in compliance with all applicable laws, rules and regulations, it will issue a Response Action Outcome ("RAO") which will replace the Department-issued No Further Action ("NFA") letters. The RAO issued by the LSRP will not contain a covenant not to sue but the covenant will be deemed included in specific instances as set forth in the Act. It should be noted that the Department can audit an RAO and can invalidate the RAO if NJDEP determines that the remediation is not protective of public health, safety, and the environment or if a presumptive remedy was not implemented. While the Act provides that NJDEP shall not audit a RAO more than three (3) years after it was issued, the three (3) year rule does not apply if: (i) undiscovered contamination is found on a site for which an RAO was filed; (ii) the Board conducts an investigation of the LSRP; or (iii) the LSRP who issued the RAO has had his/her license suspended or revoked. In any of those three cases, NJDEP can audit an RAO at any time.
NJDEP is required, at a minimum, to inspect all documents and information submitted by an LSRP concerning a remediation upon receipt. The Department is required to perform additional review of documents submitted if (i) the contamination at the site poses a significant detrimental impact on public health, safety, or the environment or the site is highly ranked by NJDEP; (ii) the contamination may affect a licensed child care center, school, or other sensitive population; (iii) the site is located in a low-income community of color that has a higher density of contaminated sites as compared to other communities; or (iv) state grants or loans are being used to remediate the site.
While the Act anticipates that most sites will be remediated by an LSRP, SRRA has one category of cases where NJDEP "shall" retain direct oversight and another category of cases where NJDEP "may" retain direct oversight. NJDEP must retain direct oversight under the following conditions: (i) the person responsible for conducting the remediation ("PRCR") has a history of noncompliance with environmental laws that includes at least two enforcement actions after the date of the Act during any five-year period concerning a remediation; (ii) the PRCR has failed to meet a mandatory remediation time frame or an expedited site-specific time frame adopted by the Department; (iii) the PRCR has failed to complete the remedial investigation of the entire site ten (10) years after the discovery of a discharge at the site and has failed to complete the remedial investigation of the entire site within five (5) years of the date of the Act.
NJDEP "may" undertake direct oversight of a site under the following conditions: (i) contamination includes chromate chemical production waste; (ii) NJDEP determines that more than one environmentally sensitive natural resource has been injured by contamination from the site; (iii) the site has contributed to sediments contaminated by polychlorinated biphenyl, mercury, arsenic, or dioxin in a surface water body; or (iv) the site is ranked by NJDEP in the category requiring the highest priority pursuant to NJSA 58:10-23.16.
For sites subject to direct oversight by NJDEP, the following conditions apply: (i) NJDEP shall review each document submitted by the LSRP and approve or deny the submission; (ii) a feasibility study shall be performed and submitted to NJDEP for approval; (iii) NJDEP shall select the remedial action for the site; (iv) PRCR shall establish a remediation trust fund; (v) all disbursements from the fund shall require NJDEP approval; (vi) all submissions by LSRP shall be provided simultaneously to NJDEP and PRCR; (vii) PRCR shall implement a public participation plan approved by NJDEP.
Clients should be aware of the new Act and its ramifications. New NJDEP guidance and rules will be issued soon and will take effect without public comment or participation. Contracts, sale documents, loan documents and the like currently being negotiated will have to include clauses dealing with the transition and multiple scenarios. Provisions will need to address LSRP oversight, possible NJDEP oversight, and issuance of RAO or NFAs. In lieu of a Remediation Agreement, a responsible party may be submitting a Remediation Certification. Existing contract documents should be reviewed and amended, if necessary, to address the new regulatory framework. For example, if a contract requires the seller to obtain an NFA letter, what happens when only an RAO is available?
For clients with existing remediation programs, expediting the investigation and/or final cleanup should be considered since NJDEP will be able (or required) to retain direct oversight of such sites under the Act. As noted above, NJDEP direct oversight brings with it NJDEP's right to select the remedial action to be implemented at a site.