July 09, 2009

New Jersey Follows Massachusetts into the World of Licensed Environmental Consultants and Privatized Cleanup Oversight

Posted on July 9, 2009 by David Farer

On May 7, 2009, New Jersey enacted the Site Remediation Reform Act (S.1897/A.2962). SRRA, with its new Licensed Site Remediation Professional (“LSRP”) Program, is having a far-reaching impact on the way transactions and redevelopment projects are being planned and handled in New Jersey.

Following the Massachusetts Licensed Site Professional program, SRRA establishes a licensing procedure for consultants and contractors to be certified as LSRPs and overseen by a licensing board. 

In most cases New Jersey DEP will no longer be required or authorized to review and approve investigation and cleanup plans in advance, or to issue No Further Action letters and Covenants Not To Sue when cleanups have been wrapped up. Instead, LSRPs will determine the propriety and conclusion of investigations and cleanups, and will issue the final sign-off document, which is now to be known as a “Response Action Outcome” (“RAO”). LSRPs – rather than DEP – will determine the required amount of any financial assurance, and will determine when and to what extent the financial assurance can be reduced as a cleanup progresses. 

Once the LSRP issues the RAO, the party conducting the cleanup will be deemed to have received a Covenant Not to Sue by operation of law. Following an LSRP’s issuance of an RAO, DEP will have three years to audit the LSRP’s work, though the bases for DEP to invalidate an RAO are limited.

By August 7, 2009, a temporary licensing program must be operational, and by November 7, DEP must issue interim rules for implementing the new law. Once the interim rules and temporary licensing program are in place, all new projects subject to the state’s cleanup laws – including transaction-triggered investigations and cleanups under the state’s Industrial Site Recovery Act – will be overseen by LSRPs rather than DEP, unless they fall into specific exceptions such as sites ranked most highly on a new ranking system to be established by DEP under the reform law.

Parties currently under DEP oversight for existing cases will have up to three years to switch over to the LSRP program.

Pursuant to the reform law, DEP is directed to establish a permitting program for institutional and engineering controls, with specific financial assurance requirements. (New Jersey has not adopted the Uniform Environmental Covenants Act.)

The state’s innocent purchaser protections are modified so that LSRP-certified work is deemed equivalent to that overseen and approved by DEP.

DEP is directed to establish, within a year, “presumptive remedies” for cleanups of residential properties, schools and day care facilities. Such projects are to be cleaned up to unrestricted use standards, or pursuant to a presumptive remedy, with certain exceptions available on a case-by-case basis.

The reform law also alters reporting obligations in situations where spills and discharges are discovered. Until now, it has been the responsibility of a property owner or operator – not a third party such as a consultant or potential purchaser – to report discovery of contamination to DEP, except as to spills or discharges from regulated underground storage tank systems. Under SRRA, however, LSRPs will now have specific affirmative obligations to report knowledge of contamination directly to DEP in a variety of settings. 

DEP has been gearing up for the new program. Aside from its current efforts in development of the interim rules and temporary licensing procedures, DEP is also in the process of developing standard operating procedures, applications, fees and forms, and guidance documents covering subjects such as mandatory timeframes and presumptive remedies. 

Tags: Hazardous Materials

Hazardous Materials

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