Oregon Environmental Law Handbook (State Environmental Law Handbooks)

STATE ENVIRONMENTAL LAW HANDBOOK SERIES

NEW JERSEY ENVIRONMENTAL LAW HANDBOOK Seventh Edition

Lowenstein Sandler PC

New Jersey Environmental Law Handbook Seventh Edition

Lowenstein Sandler PC

SEL 48

Government Institutes An imprint of The Scarecrow Press, Inc. Lanharn, Maryland Toronto Plymouth, UK 2007

Government Institutes Published in the United States of America by Government Institutes, an imprint of The Scarecrow Press, Inc. A wholly owned subsidiary of The Rowman & Littlefield Publishing Group, Inc. 4501 Forbes Boulevard, Suite 200 Lanham, Maryland 20706 http://www.govinstpress.com/ Estover Road Plymouth PL6 7PY United Kingdom Copyright O 2007 by Government Institutes

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of the publisher. The reader should not rely on this publication to address specific questions that apply to a particular set of facts. The author and the publisher make no representation or warranty, express or implied, as to the completeness, correctness, or utility of the information in this publication. In addition, the author and the publisher assume no liability of any kind whatsoever resulting from the use of or reliance upon the contents of this book. British Library Cataloguing in Publication Information Available

Library of Congress Cataloging-in-Publication Data New Jersey environmental law handbook 1 Lowenstein Sandler PC. -7th ed. p. cm.- (State environmental law handbook series) ISBN 0-86587-986-9 (alk. paper) 1. Environmental law-New Jersey. I. Lowenstein, Sandler. KFN2154.N39 2007 344.74904'66~22 2006036549 e m T h e paper used in this publication meets the minimum requirements of American National Standard for Information Sciences-Permanence of Paper for Printed Library Materials, ANSIINISO 239.48-1992. Manufactured in the United States of America.

TABLE OF CONTENTS PREFACE...................................................................................................................................xxi

ABOUT THE EDITORS ......................................................................................................... xxiii CHAPTER I FOUNDATIONS OF NEW JERSEY ENVIRONMENTAL LAW 1.0

NEW JERSEY ENVIRONMENTAL AGENCIES AND PROGRAMS ............................ 1 ENVIRONMENTAL PROTECTION IN NEW JERSEY .THE EARLY HISTORY ..................................................................................................1 THE NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION .ORGANIZATION. POWERS AND DUTIES ............................ 3 1.2.1 1.2.2 1.2.3 1.2.4 1.2.5 1.2.6 1.2.7 1.2.8

History and Organization ............................................................................. 3 Powers and Duties........................................................................................ 6 Right of Entry and Inspection ..................................................................... -7 Legal Process and Procedures - Role of the Attorney General ........................................................................................................ -8 Administrative Procedure ......................................................................... -10 Civil Enforcement and Penalties ............................................................... -12 Preemption of County and Local Initiatives ............................................. 1 6 Local Enforcement Role ............................................................................ 18

CRIMINAL PROSECUTION .............................................................................. 1 8 1.3.1 Criminal Liability for Violations of Environmental Law ..........................18 1.3.2 Criminal Code ............................................................................................ 19 OTHER AGENCIES ............................................................................................. 21 1.4.1 The Delaware River Basin Commission.................................................... 21 1.4.2 Interstate Environmental Commission.......................................................22 1.4.3 Regional Greenhouse Gas Initiative .......................................................... 23 2.0

PRIVATE RIGHTS AND REMEDIES.............................................................................24 2.1

ENVIRONMENTAL RIGHTS ACT .PRIVATE ENFORCEMENT OF PUBLIC RIGHTS .............................................................24

2.2

COMMON LAW .PRIVATE ENFORCEMENT OF PRIVATE WRONGS .............................................................................................................. 2.2.1

25

Common Law Causes of Action ................................................................ 25

2.2.2 2.2.3 2.2.4 2.2.5

Toxic Tort Claims ...................................................................................... 27 .. Claim Administration................................................................................-27 New Liability Theories .............................................................................. 28 Defense Issues ............................................................................................31

SPILL AND RELEASE REPORTING .............................................................................35 RELEASES TO LAND OR WATER....................................................................35 3.1.1 3.1.2 3.1.3 3.1.4

Notice to the NJDEP .The Spill Act ......................................................... Notice to the Community .Discharge Act ................................................ Water Pollution Control Act ...................................................................... New Jersey Underground Storage of Hazardous Substances Act ..............................................................................................................

36 44 46 48

RELEASES TO THE ATMOSPHERE ................................................................. 49 3.2.1 Air Pollution Control Act ........................................................................... 49 3.2.2 Toxic Catastrophe Prevention Act ............................................................. 51 CHAPTER 11 HAZARDOUS AND TOXIC SUBSTANCES NEW JERSEY HAZARDOUS AND TOXIC SUBSTANCES CONTROL PROGRAM.......................................................................................................................

-53

1.1

PROGRAMS COORDINATED............................................................................ 53

1.2

ORGANIZATION AND ADMINISTRATION ................................................... -54

THE SPILL COMPENSATION AND CONTROL ACT [NEW JERSEY'S SUPERFUND PROGRAM] .......................................................................... -55 2.1

RELATIONSHIP TO FEDERAL PROGRAM ..................................................... 55

2.2

THE SPILL COMPENSATION AND CONTROL ACT ..................................... 56 2.2.1 Statutory Overview and History ................................................................ 56 2.2.2 Brownfield and Contaminated Site Remediation Act ................................ 58 2.2.3 Enforcement ...............................................................................................64

2.3

THE MANAGEMENT AND ADMINISTRATION OF THE FUND .....................................................................................................................71 2.3.1 General Role of the Administrator of the Fund ......................................... 71 2.3.2 Internal Requirements for Authorization of Fund Financing .................... 73 2.3.3 Arbitration and the Fund ............................................................................74

2.4

THE SUPERLIEN ................................................................................................-77

2.5

NATURAL RESOURCE DAMAGES ..................................................................80 2.5.1 Introduction ................................................................................................80 2.5.2 Common Law and Statutory Basis for Natural Resource Damages .....................................................................................................80 2.5.3 The Department's Program ........................................................................ 81

PETROLEUM AND HAZARDOUS SUBSTANCE STORAGE ....................................83 BACKGROUND ...................................................................................................83 3.1.1

Covered Facilities ...................................................................................... 85

PLANNING AND INFORMATION SUBMISSIONS......................................... 86 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5

Discharge Plans.......................................................................................... 86 Aboveground Storage ............................................................................... -88 Underground Storage Tanks ..................................................................... -89 Marine Transfer Facilities .......................................................................... 89 Transmission Pipelines .............................................................................. 90

UNDERGROUND STORAGE TANKS ............................................................... 90 3.3.1 New Jersey Underground Storage of Hazardous Substances Act ............................................................................................................. -90 3.3.2 Applicability .............................................................................................. 92 3.3.3 Registration, Permitting and Fees ............................................................. -93 3.3.4 Performance Standards. Engineering and Operating Requirements ............................................................................................ -94 3.3.5 Monitoring, Release Reporting. and Investigation .................................... 95 3.3.6 Out-of-Service and Closure Requirements ................................................ 97 3.3.7 Loan Program.............................................................................................97 3.3.8 Penalties ..................................................................................................... 98 TRANSPORTATION OF HAZARDOUS MATERIALS ............................................... -98 4.1

GENERAL REQUIREMENTS ............................................................................. 98

4.2

EXEMPTIONS AND WAIVER.......................................................................... 100

4.3

PENALTIES ........................................................................................................100

CLEANUP STANDARDS AND TECHNICAL REQUIREMENTS FOR HAZARDOUS SITE REMEDIATION...........................................................................101 5.1

SOIL CLEANUP STANDARDS .......................................................................-103

5.2

103 BUILDING INTERIOR CLEANUP STANDARDS ..........................................

5.3

GROUNDWATER QUALITY STANDARDS ..................................................104

5.4

TECHNICAL REQUIREMENTS FOR SITE REMEDIATION ........................105

TOXIC CATASTROPHE PREVENTION ACT .............................................................106 6.1

FACILITY REGISTRATION .............................................................................106

6.2

RISK MANAGEMENT PROGRAM ..................................................................107

6.3

INFORMATION DISCLOSURE........................................................................1 1

6.4

ENFORCEMENT AND PENALTIES ............................................................... 1 2

WORKER AND COMMUNITY RIGHT TO KNOW ................................................... 112 OVERVIEW ....................................................................................................... 1 2 7.1 .1 Preemption ..............................................................................................

1 3

WORKER SAFETY PROGRAM ...................................................................... 1 4 7.2.1 Introduction............................................................................................. 1 1 4 7.2.2 Requirements of the New Jersey Worker Safety Regulations .............................................................................................. 115 7.2.3 Labeling .................................................................................................. 1 7 COMMUNITY INFORMATION ...................................................................... -119 7.3.1 Introduction............................................................................................ 1 9 7.3.2 Facilities Covered by the NJDEP's Community Information Regulations ......................................................................... 119 7.3.3 Requirements of the NJDEP's Community Information Program ................................................................................................... -120 THE POLLUTION PREVENTION ACT ...................................................................... -121 8.1

AFFECTED INDUSTRIES ................................................................................. 122

8.2

REPORTING REQUIREMENTS ......................................................................-123 8.2.1

8.3

Hazardous Substances Exempt from the Plan ......................................... 124

NJDEP AUTHORITY AND FACILITY WIDE PERMITS ............................... 124 8.3.1 Enforcement...........................................................................................1 2 5

9.0

VOLUNTARY CLEANUP PROGRAM: MEMORANDUM OF AGREEMENT ................................................................................................................. 125 CHAPTER I11 REAL PROPERTY AND BUSINESS TRANSFERS

1.0

INDUSTRIAL SITE RECOVERY ACT ......................................................................... 127 1.1

APPLICABILITY ................................................................................................129 1.1.1 1.1.2 1.1.3 1.1.4

1.2

Industrial Establishment........................................................................... 129 Hazardous Substances.............................................................................. 131 ISRA Subject Transactions................................................................... 3 1 Non-covered Transactions ...................................................................... -133

SPECIAL SITUATIONS................................................................................. 1 3 4 1.2.1 Landlord and Tenant ............................................................................... 1 3 4 1.2.2 Mergers and Acquisitions ....................................................................... -135 1.2.3 Bankruptcy ............................................................................................... 135

1.3

THE ISRA ADMINISTRATIVE PROCESS ...................................................... 137 1.3.1 Agency Determination of Applicability................................................... 137 1.3.2 Practice and Procedure for Subject Transactions..................................... 138 1.3.3 Expedited Compliance Options ............................................................... 145

2.0

3.0

1.4

CLEANUP STANDARDS ..................................................................................

152

1.5

FEES ....................................................................................................................

153

1.6

SCOPE OF LIABILITY ......................................................................................153

1.7

ENFORCEMENT ..............................................................................................5 3

BROWNFIELDS .............................................................................................................154 2.1

LIABILITY PROTECTION ................................................................................154

2.2

ECONOMIC INCENTIVES ................................................................................ 157

ENVIRONMENTAL LIABILITIES OF PURCHASERS AND LENDERS AND RELATED ISSUES ...........................................................................-162 3.1

SUCCESSOR AND TRANSACTIONAL LIABILITY...................................... 162 3.1.1 Mergers and Acquisitions .......................................................................-162 3.1.2 Parent-Subsidiary; Piercing the Corporate Veil .......................................165

3.1.3 3.1.4

3.2

LENDER LIABILITY ........................................................................................-171 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6

3.3

Pre-Acquisition Activity .........................................................................1 7 2 ... .. Post-Acquisition Activity.. ...................................................................... -172 Post-Foreclosure Activity ........................................................................173 . . . Exemption Limitations.............................................................................174 Holder's Obligations ............................................................................. 1 7 4 Fiduciary Liability ................................................................................... 175

ENVIRONMENTAL LIABILITY AND BANKRUPTCY ................................ 175 3.3.1 3.3.2 3.3.3 3.3.4

4.0

Land Ownership......................................................................................-166 Product Ownership.................................................................................. -171

Automatic Stay........................................................................................ -176 Abandonment .......................................................................................... 7 7 Secured And Administrative Expense Priority Claims............................ 178 Discharge of Debts and Claims................................................................ 179

Private Well Testing Act .................................................................................................. 180 CHAPTER IV SOLID WASTE MANAGEMENT

1.0

NEW JERSEY SOLID WASTE MANAGEMENT PROGRAM OVERVIEW .................................................................................................................. 1.1

Background ......................................................................................................... 1 8 3 1.1.1 1.1.2 1.1.3 1.1.4

1.2

Scope of NJDEP Authority ..................................................................... -184 Regulation ............................................................................................... 1 8 5 Planning ................................................................................................... 185 Economic Aspects of Solid Waste Regulation ........................................ 186

SOLID WASTE PLANNING AND IMPLEMENTATION ............................... 188 1.2.1 1.2.2 1.2.3 1.2.4 1.2.5 1.2.6

1.3

183

County Solid Waste Plans........................................................................ 188 Plan Contents .....................................................................................1 8 9 Plan Amendments ....................................................................................189 NJDEP Plan Review ...............................................................................-190 Statewide Planning...................................................................................190 Waste Flow .............................................................................................. 191

TAXATION AND FEES ....................................................................................-194 1.3.1 General Taxes and Fees ........................................................................... 194 1.3.2 Policy-Specific Taxes .............................................................................-194

1.3.3 Environmental Investment Charges ........................................................1 9 5 GENERAL REQUIREMENTS GOVERNING SOLID WASTE COLLECTION, TRANSPORTATION. AND DISPOSAL.........................................9 2.1

5

. OVERVIEW OF REQUIREMENTS ..................................................................195

2.1.1 Key Definitions........................................................................................ 195 2.1.2 General Requirements............................................................................. -196 2.2

DISCLOSURE STATEMENT AND INTEGRITY REVIEW............................ 196 Disclosure Statement........................................ 197 2.2.1 Contents and Filing . of. a .......................................................................... 2.2.2 Disclosure Investigation -198

2.3

REGISTRATION ............................................................................................... -199 2.3.1 Registration Denial .................................................................................. 199

SPECIFIC SOLID WASTE FACILITY REQUIREMENTS AND RESTRICTIONS ............................................................................................................ -201 COLLECTION AND TRANSPORTATION FACILITIES................................ 201 3.1.1 Registration Exemptions .......................................................................... 201 3.1.2 Collection and Transportation Restrictions ............................................. 201 DISPOSAL FACILITIES .................................................................................... 201 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5

Disposal Exemptions .............................................................................. -201 Permitting Process ................................................................................... 202 Registration Renewals and Transfers...................................................... -202 Sanitary Landfill Operational Requirements ........................................... 203 Rail Carrier Requirements ....................................................................... 204

LANDFILL CLOSURE AND POST-CLOSURE ...............................................205 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6

General Requirements.............................................................................. 205 Closure Plan and Contents ....................................................................... 205 Closure Escrow Fund ............................................................................... 205 Deed Notice and Voidable Transactions..................................................205 Strict and Retroactive Liability of Owners and Operators....................... 206 Sanitary Landfill Facility Contingency Fund .......................................... 207

MISCELLANEOUS SOLID WASTE FACILITIES .......................................... 207 3.4.1 Resource Recovery Facilities ...................................................................207 3.4.2 Transfer Stations ......................................................................................208 3.4.3 Cornposting Facilities .............................................................................. 208

3.4.4 Design Requirements ...............................................................................209 4.0

RECYCLING.............................................................................................................209 4.1 .1 4.1.2 4.1.3 4.1.4 4.1.5 4.2

REGISTRATION AND LICENSING OF RECYCLING FACILITIES ........................................................................................................213 4.2.1

4.3

6.0

Notice Requirements................................................................................ Application Requirements ....................................................................... Application Process ................................................................................. ApplicatiodOperation Fees .....................................................................

216 216 217 218

ENFORCEMENT AND LIABILITY............................................................................. -218 5.1

ENFORCEMENT .............................................................................................. 2 8

5.2

PENALTIES ........................................................................................................ 220

MEDICAL WASTE......................................................................................................... 222 6.1

INTRODUCTION .............................................................................................. 6.1.1 6.1.2 6.1.3 6.1.4

7.0

Exemptions fiom Solid Waste Management Regulations ....................... 213

RECYCLING CENTER REGULATIONS ......................................................... 215 4.3.1 4.3.2 4.3.3 4.3.4

5.0

Recycling Grants and Taxes ....................................................................210 Source Separation and Recycling Plans .................................................2 1 Recycling Preferences .............................................................................-212 Motor Oils ................................................................................................212 Computers ................................................................................................213

-222

Regulated Medical Waste Management System...................................... 223 Manifest Tracking of Regulated Medical Waste ..................................... 224 Regulation of Transporters ..................................................................... -224 Enforcement and Penalties....................................................................... 225

REGULATORY ENACTMENTS REGARDING SPECIFIC ITEMS OF THE SOLID WASTE STREAM ..................................................................................... 226 7.1

TOXIC PACKAGING REDUCTION................................................................. 226

7.2

DRY CELL BATTERY MANAGEMENT ACT ................................................ 227

7.3

MERCURY SWITCH REMOVAL ACT ............................................................ 228

CHAPTER V HAZARDOUS WASTE MANAGEMENT NEW JERSEY HAZARDOUS WASTE MANAGEMENT PROGRAM ...................... 229 1.1

RELATIONSHIP TO RCRA...............................................................................229

1.2

NJDEP INSPECTIONS .......................................................................................

1.3

PENALTIES .....................................................................................................231

1.4

GRACE PERIODS FOR MINOR VIOLATIONS ..............................................233

231

HAZARDOUS WASTE FACILITY SITING .................................................................235 2.1

MAJOR HAZARDOUS WASTE FACILITY SITING ACT ............................. 235

2.2

ROLE OF THE NJDEP IN APPROVING NEW MAJOR HAZARDOUS WASTE FACILITIES................................................................ 237 2.2.1 The Act's Liability and Enforcement Provisions..................................... 238 CHAPTER VI AIR POLLUTION CONTROL

OVERVIEW ....................................................................................................................

240

AMBIENT AIR QUALITY STANDARDS.................................................................... 240 TECHNOLOGY-BASED STANDARDS....................................................................... 241 HAZARDOUS AIR POLLUTANTS .............................................................................. 241 The New Jersey State Implementation Plan .................................................................... 241 ATTAINMENT OF NATIONAL AMBIENT AIR QUALITY STANDARDS..................................................................................................................

242

RECENT DEVELOPMENTS .........................................................................................243 7.1

FEDERAL DEVELOPMENTS .....................................................................243

7.2

NEW JERSEY DEVELOPMENTS .................................................................... 246

PERMITTING ................................................................................................................ 8.1

INTRODUCTION ...............................................................................................

-247 247

8.2

SUBCHAPTER 8 PERMITTING OF "SIGNIFICANT" MINOR SOURCES........................................................................................................... 8.2.1 8.2.2 8.2.3 8.2.4 8.2.5 8.2.6 8.2.7 8.2.8 8.2.9 8.2.10 8.2.1 1 8.2.12 8.2.1 3 8.2.14 8.2.1 5 8.2.16

8.3

-248

Applicability ...........................................................................................-248 Exemptions ......................................................................................2 1 General Provisions...................................................................................251 Permit Applications ................................................................................ -252 The Air Permit Application Review Process ...........................................255 Air Quality Impact Analysis ....................................................................256 Operating Certificates..............................................................................257 General Permits........................................................................................258 StandardsforIssuingPermits ..................................................................259 "State of the Art" Technology (SOTA) ................................................... 259 Conditions of Approval.................................................................... .......260 Denials ..................................................................................................... 261 Reporting Requirements ......................................................................... -261 Permit Revocations .................................................................................. 262 Changes to Existing Permits and Certificates .......................................... 263 Special Provisions for Construction but Not Operation ..........................266

TITLE V PERMITTING .................................................................................... -267 8.3.1 8.3.2 8.3.3 8.3.4 8.3.5

Applicability ........................................................................................... -267 Review Process ....................................................................................... -267 Application and Permit Shields ............................................................... 268 Compliance Plans..................................................................................... 268 Compliance Certifications ....................................................................... 269

REGULATION OF SPECIFIC POLLUTANTS ............................................................. 269 9.1

SULFUR IN FUELS ............................................................................................ 270

9.2

VOLATILE ORGANIC COMPOUNDS ............................................................ 270

9.3

OXIDES OF NITROGEN ...................................................................................

9.4

TOXIC SUBSTANCES...................................................................................... -274

273

NEW SOURCE REVIEW AND EMISSIONS OFFSETS..............................................275 RELEASE REPORTING REQUIREMENTS................................................................. 277 ENFORCEMENT AND PENALTIES ............................................................................ 278 12.1

INVESTIGATORY POWERS ........................................................................... -278

12.2

CIVIL ENFORCEMENT PROCEDURES ........................................................ -279

12.3

ROLE OF LOCAL. COUNTY. REGIONAL ENVIRONMENTAL AGENCIES ..........................................................................................................281

12.4

ROLE OF USEPA AND FEDERAL ENFORCEMENT .................................... 282

12.5

282 CRIMINAL PENALTIES ................................................................................... CHAPTER VII WATER POLLUTION CONTROL AND SUPPLY

WATER POLLUTION CONTROL PROGRAM COMPONENTS AND OVERVIEW ...................................................................................................................

-284

PERMIT PROGRAM ......................................................................................................

286

2.1

REPORTING REQUIREMENTS ....................................................................... 286

2.2

APPLICATION PROCESS ................................................................................. 287

2.3

DISCHARGES TO SURFACE WATER ............................................................ 289

2.4

STORMWATER DISCHARGES ....................................................................... 290

2.5

DISCHARGES TO GROUNDWATER.............................................................. 292

2.6

UNDERGROUND INJECTION CONTROL ..................................................... 293

2.7

DISCHARGES TO DOMESTIC TREATMENT WORKS ................................ 295 2.7.1 Pretreatment Standards ............................................................................ 295 2.7.2 Significant Indirect Users ........................................................................ 296

SEWAGE AND WASTEWATER TREATMENT .........................................................297 3.1

WATER QUALITY PLANNING ....................................................................... 297

3.2

WASTEWATER TREATMENT WORKS ......................................................... 299

3.3

SLUDGE MANAGEMENT ................................................................................ 300

3.4

INDIVIDUAL SUBSURFACE SEWAGE DISPOSAL SYSTEMS ..................300

ENFORCEMENT AND PENALTIES ............................................................................302 4.1

INSPECTIONS AND INFORMATION REQUESTS ........................................ 302

4.2

CIVIL PENALTIES AND ACTIONS ................................................................. 304

4.2.1 Mandatory Minimum Penalties and Defenses ......................................... 306 4.2.2 Administrative Consent Orders................................................................307

5.0

4.3

CRIMINAL PENALTIES ..................................................................................-308

4.4

OTHER ENFORCEMENT AUTHORITY ........................................................-308

WATER SUPPLY AND QUALITY ...............................................................................309 WATER SUPPLY AND DIVERSION .............................................................. -309 5.1.1 Drought Emergencies............................................................................... 309 5.1.2 Water Diversion ................................................................................... 3 10 WATER SUPPLY AUTHORITIES .................................................................... 312 SAFE DRINKING WATER ACT .....................................................................1 3 5.3.1 5.3.2 5.3.3 5.3.4

Primary Drinking Water Standards.......................................................... 313 Secondary Drinking Water Standards......................................................314 Standards for the Construction of Public Water Systems........................314 Enforcement and Penalties ....................................................................... 314

SURFACE WATER QUALITY CRITERIA .................................................... 1 5 GROUNDWATER QUALITY CRITERIA ...................................................... 1 8 CHAPTER VIII LAND USE REGULATION 1.0

GENERAL LAND USE REGULATION ...................................................................... -320 1.1

MUNICIPAL LAND USE LAW .........................................................................320

1.2

STATE DEVELOPMENT AND REDEVELOPMENT PLAN .......................... 321

1.3

BEACH REGULATION ..................................................................................... 323

1.4

SOIL CONSERVATION. EROSION. AND SEDIMENT CONTROL...........................................................................................................

1.5 2.0

325

THE CONSTRUCTION PERMIT STATUTE ................................................... 326

SPECIAL LAND USE REGULATION .......................................................................... 327 2.1

COASTAL AND WATERFRONT DEVELOPMENT....................................... 327 2.1.1

Coastal Area Facility Review Act ............................................................327

2.1.2 Waterfront and Harbor Facilities Act ......................................................338 COASTAL AND TIDAL WETLANDS .............................................................344 2.2.1 2.2.2 2.2.3 2.2.4

Wetlands Act of 1970 ..............................................................................344 Coastal Zone Management Rules ............................................................348 . . . Mltlgatlon.................................................................................................348 Wetlands Buffers .....................................................................................349

RIPARIAN LANDS ............................................................................................350 FRESHWATER WETLANDS ............................................................................351 2.4.1 2.4.2 2.4.3 2.4.4 2.4.5

Introduction.............................................................................................. Assumption of the Federal $404 Program ............................................... Jurisdiction ............................................................................................... Permits ..................................................................................................... Enforcement.............................................................................................

351 352 353 360 371

FLOODWAYS .................................................................................................... 372 2.5.1 2.5.2 2.5.3 2.5.4 2.5.5 2.5.6

Flood Hazard Area Control Act ............................................................... 372 Intergovernmental Roles in Regulation of Floodways ............................ 373 Delineation of Flood Hazard Areas ......................................................... 374 Stream Encroachment Permits ................................................................. 375 Enforcement ............................................................................................. 381 The State Flood Control Facilities Act .................................................... 381

STATE OPEN WATERS .................................................................................... 382 3.0

SPECIAL MANAGEMENT AREAS ............................................................................ PINELANDS ....................................................................................................... 3.1 .1 3.1.2 3.1.3 3.1.4

382

Introduction.............................................................................................. 382 Pinelands Comprehensive Management Plan ..........................................383 Pinelands Municipal Council ...................................................................385 Pinelands Development Credit Bank Act ................................................ 386

HIGHLANDS ...................................................................................................... 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5

-382

386

Introduction..............................................................................................386 The Boundaries of the Highlands Region ................................................387 Highlands Region Regional Master Plan .................................................. 387 Approval of Developments in the Highlands Region .............................. 390 Enforcement .............................................................................................391

3.3

HACKENSACK MEADOWLANDS ................................................................ -392 Introduction..............................................................................................392 Hackensack Meadowlands Master Plan..................................................-393 Solid Waste Disposal Facilities ............................................................... 393 Relationship to Local Land Use Plans ....................................................-393 Subdivision and Land Development........................................................393 Renewal Areas ......................................................................................... 394 Improvement Districts ............................................................................ -394 New Jersey Meadowlands Commission .................................................. 395 Hackensack Meadowlands Municipal Committee & Interrnunicipal Tax-Sharing..................................................................... 396 3.3.10 Meadowlands Ownership......................................................................... 397

3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.3.8 3.3.9

3.4

DELAWARE AND RARITAN CANAL COMMISSION ................................. 398 CHAPTER IX INDOOR POLLUTANTS

RADON .......................................................................................................................... -400 1.1

OVERVIEW ........................................................................................................ 400

1.2

RESIDENTIAL STRUCTURE GUIDANCE .................................................... -400

1.3

CERTIFICATION OF RADON TESTERS AND MITIGATORS ..................... 401

1.4

CERTIFICATION OF RADON LABORATORIES........................................... 402

ASBESTOS.....................................................................................................................-403 OVERVIEW ........................................................................................................ 403 ASBESTOS LICENSES AND PERMITS .......................................................... 404 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5

General Provisions ................................................................................... 404 Licensing of Employers .......................................................................... -405 Asbestos Worker or Supervisor Permits .................................................. 406 Asbestos Work Notification Requirements ............................................-407 Certification of Training Courses and Instructors ................................... 407

EXPOSURE TO ASBESTOS BY PUBLIC EMPLOYEES ...............................408 ASBESTOS HAZARD ABATEMENT SUBCODE...........................................409 2.4.1 Pre-Project Procedures ............................................................................. 409 2.4.2 Operations and Maintenance Activities .................................................. -409

2.4.3 Asbestos Hazard Abatement Projects ......................................................410 Lead-Based Paint ............................................................................................................-413 Overview............................................................................................................4 3 Lead Licenses and Permits...................................................................................414 3.2.1 3.2.2 3.2.3 3.2.4

General Provisions................................................................................... 414 Licensing of Employers ........................................................................... 415 Lead Employee Permits ........................................................................... 416 Certification of Training Courses ............................................................416

LEAD HAZARD EVALUATION AND ABATEMENT SUBCODE ........................................................................................................... 3.3.1 3.3.2 3.3.3 3.3.4

Evaluation and Testing ............................................................................ Pre-Abatement Preparation ...................................................................... Lead Hazard Abatement .......................................................................... Lead in Soil .............................................................................................

Mold .................................................................................................................................

417 418 419 419 -420 420

CHAPTER X OTHER ENVIRONMENTAL LAWS AND PROGRAMS NOISE ............................................................................................................................. -422 1.1

THE NOISE CONTROL ACT OF 1971............................................................ -422

RADIATION AND FISSIONABLE MATERIAL .........................................................422 2.1

THE RADIATION PROTECTION ACT ............................................................ 422

2.2

THE RADIOLOGIC TECHNOLOGIST ACT ................................................... 422

.2.3

THE RADIATION ACCIDENT RESPONSE ACT ........................................... 423

2.4

THE FISSIONABLE SOURCE MATERIAL ACT ............................................ 423

PESTS AND PESTICIDES ............................................................................................. 423 3.1

THE PESTICIDE CONTROL ACT OF 1971.....................................................423

3.2

INJURIOUS INSECTS........................................................................................424

3.3

THE GYPSY MOTH ........................................................................................... 424

3.4

MOSQUITO EXTERMINATION ...............................................................424

FISH AND GAME .......................................................................................................... 424 4.1

FISH AND GAME, WILD BIRDS. AND ANIMALS .......................................424

4.2

SHELLFISH .......................................................................................................-425

PRESERVATION............................................................................................................

426

GREEN ACRES .................................................................................................

-426

5.1.1 The New Jersey Green Acres Land Acquisition Acts of 1961 and 1971. and the New Jersey Green Acres Land Acquisition and Recreation Opportunities Act ........................................426 5.1.2 The Green Acres Tax Exemption Act ...................................................... 426 NATURAL AREAS ............................................................................................ 427 5.2.1 The New Jersey Wild and Scenic Rivers Act .......................................... 427 5.2.2 The Natural Areas System Act ................................................................ 427 5.2.3 The Landowners Liability Act ................................................................ -427 HISTORIC AREAS ............................................................................................. 428 5.3.1 The New Jersey Conservation Restriction and Historic Preservation Restriction Act ....................................................................428 FARMLAND ....................................................................................................... 428 5.4.1 The Farmland Assessment Act of 1964................................................... 428 5.4.2 The Right to Farm Act ............................................................................. 428 5.4.3 The Agriculture Retention and Development Act ................................... 429 ENVIRONMENTAL JUSTICE .........................................................................-429 PUBLIC RECORDS ....................................................................................................... 6.1

-432

THE OPEN PUBLIC RECORDS ACT ...............................................................432 CHAPTER XI INSURANCE COVERAGE FOR ENVIRONMENTAL LIABILITY

INTRODUCTION ..........................................................................................................

-434

WHAT IS A LEGAL OBLIGATION?............................................................................ 434 PROPERTY DAMAGE AND THE OWNED-PROPERTY EXCLUSION ................... 435

4.0

THE POLLUTION EXCLUSION ...................................................................................437

5.0

THE OCCURRENCE ISSUE ..........................................................................................439

6.0

TRIGGER ISSUES .........................................................................................................-441

7.0

ALLOCATION ISSUES .................................................................................................442

8.0

PRACTICAL CONSIDERATIONS................................................................................445 CHAPTER XI1 WORKPLACE SAFETY AND HEALTH

1.0

INTRODUCTION ........................................................................................................... 1.1

3.0

THE OCCUPATIONAL SAFETY AND HEALTH ACT (OSH Act) ......................................................................................................................

447 447

2.1

OSH Act .Key Provisions ................................................................................... 448

2.2

Promulgation of Standards and Regulations ........................................................ 449

2.3

OSHA has issued standards for a wide variety of workplace hazards. including: ............................................................................................... 449

2.4

The General Duty Clause ..................................................................................... 450

THE OSH ACT & NEW .JERSEY .................................................................................. 450 3.1

New Jersey Worker Health And Safety Act And Public Employees Occupational Safety And Health Act .................................................................. -451 3.1.1 Worker Health and Safety Act ................................................................ -451 3.1.2 Common Law Claims ..............................................................................453 3.1.3 Public Employees' Occupational Safety and Health Act (PEOSHA) ............................................................................................... 453

4.0

Recordkeeping. Reporting. And Posting Requirements ..................................................454 4.1

Recordkeeping And Access To Records..............................................................454

4.2

Retention And Disclosure ....................................................................................455

4.3

Reporting (FatalityIHospitalization)Requirements ............................................. 456

4.4

Posting Requirements .........................................................................................-456

5.0

Enforcement .....................................................................................................................456 5.1

Inspections ...........................................................................................................457

5.2

Search Warrants ...................................................................................................457

5.3

Inspection Process ................................................................................................

5.4

Whistle-Blower Protection................................................................................... 459

5.5

Citations ...............................................................................................................

5.6

Violations And Penalties..................................................................................... -460

457

459

APPENDIX A .ENVIRONMENTAL CRIMINAL PROVISIONS AND PENALTIES.........461

PREFACE New Jersey has a justly earned reputation for pioneering developments in environmental law and for having one of the nation's most stringent and complex environmental programs. In recent years, the State has attempted to makes its regulatory programs more business friendly. Through a cooperative effort with business and industry associations many regulatory programs have been revamped. The New Jersey Legislature has also been active in redefining the state government's role in environmental affairs. The seventh edition of this Handbook incorporates these new environmental programs and initiatives. This Handbook is intended to provide an overview of the environmental statutes, regulations and significant case law in effect in New Jersey as of August 2006. It is by no means a substitute for competent professional assistance with respect to significant environmental matters. Moreover, since New Jersey environmental law promises to remain as dynamic as ever, it is always advisable to consult the latest version of New Jersey's statutes and regulations to determine what changes, if any, have occurred. The editors wish to acknowledge the support and encouragement of our law firm, Lowenstein Sandler, and the long hours and dedicated efforts of our colleagues Michael J. Caffiey, Stephen W. Smithson, Priya R. Masilamani, Kristina D. Pasko, and Neil A. Feldscher toward the preparation of this Handbook. We also wish to thank our former colleagues, Lynda A. Bennett, Franklin W. Boenning, and Danielle P. Torok for their contributions to this edition of the Handbook, and to John A, McKinney, Adjunct Professor of Environmental Law at Seton Hall Law School, for his insights on this effort. Finally we wish to thank Michael L. Rodburg, Managing Director of Lowenstein Sandler, whose vision and leadership made the first edition of the Handbook a reality. Richard F. Ricci, Esq. Environmental Law Practice Group Lowenstein Sandler PC September 2006

ABOUT THE EDITORS EXECUTIVE EDITOR NORMAN W. SPINDEL Mr. Spindel, Senior Counsel, has a B.S. degree in Chemical Engineer from Rutgers University, with highest honors, and a J.D. degree from the Georgetown University Law Center. Prior to joining Lowenstein Sandler, Mr. Spindel was staff attorney at the U.S. Environmental Protection Agency, and then a partner in the New York firm Huber, Lawrence & Abell. Mr. Spindel specializes in regulatory and permitting issues in all areas of environmental law, and counseling clients in environmental issues arising from business and property transactions. He is frequent lecturer and writer on Brownfields and site remediation issues, and is the Chair of the Regulatory Affairs Committee of the New Jersey Chapter of the National Brownfields Association. EDITORS MICHAEL DORE Mr. Dore is a graduate of Amherst College and Rutgers School of Law, where he served as an editor of the Rutgers Law Review. Mr. Dore is the author of a leading toxic tort litigation sourcebook, "Law of Toxic Torts: Litigation, Defense, Insurance," ThomsodWest 2006, and of a companion volume "Toxic Tort Litigation Handbook," Clark Boardman Co., Ltd., 1988. In addition he has written numerous law review articles which have been cited by courts throughout the United States and relied on in the Federal Judicial Center's Reference Manual on Scientific Evidence. He is an adjunct professor of Environmental Law at Rutgers School of Law; founding Chairman, Defense Research Institute Environmental Law Committee; and a frequent lecturer on toxic tort and other litigation topics at legal and medical seminars throughout the United States and in Europe. MICHAEL DAVID LICHTENSTEIN Mr. Lichtenstein is a magna cum laude graduate of Brandeis University and a cum laude graduate of the University of Pennsylvania Law School. He has a broad range of litigation experience in the fields of environmental cost recovery, mass tort defense, defense of federal and state environmental enforcement actions, and disputes arising from the purchaselsale of contaminated property. Mr. Lichtenstein is a Vice Chair of the Toxic Torts and Environmental Law Committee of the American Bar Association's Tort, Trial, and Insurance Practice Section. After graduation from law school, Mr. Lichtenstein served as a law clerk to the Honorable

Donald W. VanArtsdalen, United States District Court Judge for the Eastern District of Pennsylvania.

RICHARD F. RICCI Mr. Ricci is the chairman of the Environmental Department at Lowenstein Sandler PC. He is a graduate of Duquesne University and the University of Notre Dame School of Law, where he was an associate editor of the Notre Dame Law Review. He has extensive experience in Superfund and New Jersey Spill Act cleanups and litigation and serves as common counsel at a number of hazardous waste sites. JAMES STEWART

Mr. Stewart is a graduate of Seton Hall University and the New York University School of Law, cum laude, where he served as an editor of the NYU Law Review. He is a member of the Environmental and Toxic Tort Litigation Committee of the Litigation Section of the American Bar Association, and has extensive experience in environmental and toxic tort litigation. Mr. Stewart served previously as law secretary to the Honorable Stewart G. Pollock, Associate Justice, New Jersey Supreme Court.

CHAPTER I FOUNDATIONS OF NEW JERSEY ENVIRONMENTAL LAW NEW JERSEY ENVIRONMENTAL AGENCIES AND PROGRAMS ENVIRONMENTAL PROTECTION IN NEW JERSEY - THE EARLY HISTORY The evolution of environmental law in New Jersey began earlier and has proceeded further than the law of most other jurisdictions. The first New Jersey enactment regarding water pollution control was passed 11 years before the colonies declared their independence from 1 England. New Jersey was the third state to address air pollution on a state-wide basis, following 2 Massachusetts and Oregon. At present, enactments such as the New Jersey Industrial Site 3 4 Recovery Act and the Toxic Catastrophe Prevention Act subject corporate transactions and industrial operations to a greater level of environmental regulation than in most other jurisdictions. State regulatory power in the environmental area formally began in 1866, with the 5 establishment of a Commission on Health, which later became the Department of Health. For many years, the Department of Health was the pre-eminent State regulatory body with jurisdiction over environmental issues. In 1945, the Legislature passed the Public Health Nuisance Act which, inter alia, prohibited persons, corporations, and municipalities from knowingly maintaining or permitting to be maintained any accumulation of "filth or source of 6 foulness which is hazardous to the health and comfort of any of the inhabitants of this State." 7 Although this statute was enforceable by the Department of Health or by local boards of health, enforcement was primarily at the local level. The following year the Legislature provided that the State Sanitary Code was to be enforced by local boards of health and that the rights of local boards of health to adopt ordinances not in conflict with the State Sanitary Code were not in any 1.0 1.1

1

2

3 4 5 6

7

L. August 20,1755 [I773 through 18211N.J. Laws 22. Cowan, Air Pollution Control in New Jersev, 9 Rutgers L. Rev. 609,531 (1955). See Air Pollution Control Act, L.1954, c.212,N.J.S.A. 26:2C-1, et sea. N.J.S.A. 13:lK-6, et sea. N.J.S.A. 13:lK-19, et sea. Act of April 5, 1866, L.1866, c.44. L.1945, c.192, N.J.S.A. 26:3B-7. N.J.S.A. 26:3B-11.

Foundations of New Jersey Environmental Law 8

The State Department of Health limited itself to the development and way limited. promulgation of uniform codes of regulations which could be adopted by reference and 9 incorporated into municipal ordinances. Two such codes were the Smoke Control Code of New Jersey of 1953 and the Public Health Control Code of 1953. The local ordinances based upon these codes passed constitutional muster and were upheld by the courts.

10

However, this method of environmental regulation proved ineffective;

while the Public Health Nuisance Act contained broad prohibitions which were enforceable by the Department of Health, all required a finding of common law nuisance. As in all jurisdictions, 11 nuisance eventually proved to be inadequate as an environmental remedial theory. 12

The early case law struck down ordinances which sought to regulate conduct not meeting the threshold standard of common law public nuisance unless a State statute explicitly 13 granted local government broader regulatory authority. Eventually, local regulation was totally freed from the requirement that prohibitions be grounded in theories of common law unless 14 explicitly authorized by State statute. It is fair to say, however, that local regulation by ordinance has not been the dominant means of addressing environmental problems. While most initiatives in environmental protection have been statutory, New Jersey has a long history of progressive common law development which remains much in evidence with regard to private rights and remedies. Section 2.2, infra. The failure of local regulation led the Legislature in April 1950 to form an Air Pollution

L.1946, c.177; N.J.S.A. 26:lA-9. New Jersey Public Health & Sanitation Codes Adoption By Reference Act, L.1950, c.188, N.J.S.A. 26:369.1, -69.6. Board of Health of Weehawken Township v. New York Central Railroad Company, 4 N.J. 293, 72 A.2d 51 1 (1950) (Weehawken I); Board of Health of River Vale Township v. Annett, 1 N.J. Super. 503,62 A.2d 224 (Ch. Div. 1948); Atlantic City v. France, 74 N.J.L. 389, 65 A. 894 (Sup. Ct. 1907), affd, 75 N.J.L. 910,70 A. 163 (Ct. Err. & App. 1908). Cowan, note 2 at 623-628. New Jersey courts early in the nineteenth century rejected the common law doctrine of strict liability for ultrahazardous (abnormally dangerous) activities as embodied in the doctrine of Rvlands v. Fletcher; that line of cases was not overruled until State, Department of Environmental Protection v. Ventron Corn., 94 N.J. 473,468 A.2d 150 (1983). Atlantic City v. France, m. Weehawken I, m. See Board of Health of Weehawken Tp. v. New York Central Railroad, 10 N.J. 294, 90 A.2d 729 (1952) (Weehawken 11). See &, State v. Mundet Cork Corporation, 8 N.J. 359, 86 A.2d 1, cert. denied, 344 U.S. 819,73 S.Ct 14,97 L.Ed. 637 (1952).

New Jersey Environmental Law Handbook 15

16

Study Commission which two years later submitted a report recommending what later 17 became the Air Pollution Control Act (APCA), the model for much statewide statutory law to follow. The original APCA was designed to preserve a strong local role in air pollution regulation. An Area Pollution Control Commission formulated and promulgated air pollution 18 regulation on a statewide or regional basis, but the Commission was also directed to organize County Air Pollution Control Associations to study and report on air pollution problems and 19 regulations of local concern. The agency charged with enforcement of the APCA was the State Department of Health, which was granted relatively comprehensive powers, including the power to require "registration" of sources of air pollution. The Department of Health was also empowered to issue administrative orders and impose civil penalties, administratively adjudicate violations of the Act, as well as to seek judicial enforcement of the APCA in the courts. Thus, enforcement at the State level was kept separate from the development of regulation which, to some extent, remained at the local level. Ultimately, the APCA proved to be ineffective and it was significantly amended in 20 1967 to unite the rule-making and enforcement authority in the Department of Health and to 21 abolish the Air Pollution Control Commission. Ever since, New Jersey law has provided for combined rulemaking and enforcement in a single State agency. THE NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION 1.2 ORGANIZATION, POWERS AND DUTIES

1.2.1 History and Organization As early as 1952, the need for an environmental regulatory agency in the Department of 22 The Law and Public Safety had been suggested by the Air Pollution Study Commission.

N.J. Legis. Index Vol. 37, House Concurrent Resolution 16, page 484,1950. Report to the New Jersey Legislature on Air Pollution in New Jersey and Recommendations for its Abatement, N.J. Air Pollution Study Commission 1952.

N.J.S.A. 26:2C-3, repealed by L. 1967, c. 106, •˜ 16 (effective June 15, 1967). See the discussion of local regulation and preemption, infra.

L.1967, c.106, An Act Relating to the Control and Suspension of Air Pollution and Creating a Clean Air Council in the State Department of Health and Prescribing Its Functions, Powers and Duties, N.J.S.A. 26:2C-1 et sea. N.J.S.A. 26:2C-3.1. Report to the New Jersey Legislature,

13-17.

Foundations of New Jersey Environmental Law environmental regulatory jurisdiction of the Department of Health grew over the first century of its existence, and by 1968, the Department had a separate Division of Clean Air and Water 23 At the same time the Department of Conservation and established by executive notices. Economic Development had acquired jurisdiction over the management and development of 24 Environmental matters were basically divided between State land and water resources. resource management as regulated by the Department of Conservation and Economic Development; and protection of health and the regulation of industrial and commercial activity under the jurisdiction of the Department of Health. The Department of Conservation and Economic Development was seen as having an inherent internal conflict as its mandate was, at the same time, to both manage the State's natural resources and promote economic development. In 1970, the Legislature created the Department of Environmental Protection (NJDEP or the "Department") by reorganizing the Department of Conservation and Economic Development, removing responsibility for economic development and transferring to it those matters previously within the pollution control jurisdiction of the 25 Department of Health. The Department has been periodically reorganized to provide for new programs and initiatives and to increase the efficiency and effectiveness of controversial programs, e.g. the State's hazardous and solid waste management programs. The most far-reaching reorganization to be effected in recent years was carried out under the aegis of Governor James J. Florio. In June of 1991, the Board of Public Utilities (BPU), together with all of its functions, powers, and duties was transferred and constituted as a unit within the Department of Environmental Protection, thereafter known as the Department of Environmental Protection and Energy 26 (NJDEPE). The stated goal of this reorganization was increased coordination and integration of the State's utility, environmental, and energy policies. The merger was also designed to streamline the regulation of solid waste management, which had previously been regulated separately by the BPU and the NJDEP, saving the State an estimated $4 million in administrative 27 costs. In 1994, after the election of Governor Christine Todd Whitman, a former commissioner of the BPU, this decision was reversed and the Department reverted back to the NJDEP. LJ

24

25

26 27

Executive Notice 109 (Feb. 16,1967) and Executive Notice 132 (July 1,1968). Goldshore, A Flood of Environmental Legislation and Analvsis of the New Jersev Exverience, 1 Seton Hall Legis. J. 1 (1976). Department of Environmental Protection Act of 1970, N.J.S.A. 13:ID-1, et sea. See Reorganization Plan (No. 002-1991), June 20, 1991 set forth in N.J.S.A. 13:ID-1.

Summary of Statement bv Commissioner Scott Weiner on DEP-BPU Merger Proposal, NJDEP Press Release (May 23, 1991).

New Jersey Environmental Law Handbook

In an effort to increase its regulatory flexibility and respond to the regulated community's concerns about unreasonable NJDEP oversight activities, the Department initiated, in 1999, its Silver and Gold Track Program for environmental performance. The Silver and Gold Track Program offers different degrees of regulatory flexibility and oversight for qualifying entities. Acceptance into the program signifies demonstrable and measurable commitment to improved environmental performance, coupled with an appropriate level of monitoring, reporting, and oversight by the Department. The Silver and Gold Track Program comprises three levels: Silver Track, Silver I1 Track, and Gold Track. Silver Track represents the Department's first broad step toward implementing a regulatory structure that requires accountability, measures environmental performance, provides operational flexibility, and produces environmental results. Silver Track offers incentives and public recognition and is open to the regulated community. Eligibility requirements for Silver Track include a good environmental history for the previous 5 years; no record of criminal violation; and having all required plans, permits, registrations, approvals, etc. current and up-todate. Silver Track was implemented in September 1999. Silver Track I1 has the same basic eligibility requirements established for the Silver Track tier; however, participants must also achieve verifiable reductions of greenhouse gas (GHG) emissions over time. In exchange for these emission reductions, Silver Track I1 participants would not be required to obtain certain air pollution control preconstruction approvals from the Department for sources emitting below established de minimis thresholds. The Silver Track I1 tier is also open to all regulated entities in New Jersey and was implemented in May 2000. The 28 NJDEP promulgated regulations for participation by landfills in the Silver Track I1 tier in 2002. The Gold Track tier offers the greatest operational and regulatory flexibility and requires the greatest environmental commitments. In addition to the basic eligibility requirements established for Silver Track and Silver Track 11, Gold Track participants are required to have an environmental management system and community outreach program in place prior to acceptance. Gold Track participants are also required to: achieve the GHG emission reductions required for Silver Track 11; achieve criteria and hazardous air pollutant (HAP) emission reductions over time; commit to enhanced handling, storage, and treatment of hazardous waste; implement ways to reduce potable or surface and groundwater use through conservation and/or effluent reuse; reduce the quantity of TRI-listed chemicals discharged to POTWs that are not biodegradable and for which there is no applicable surface water criteria available for limit

28

See N.J.A.C. 7:26-2C. 1 to -2C. 15.

Foundations of New Jersey Environmental Law

development; incorporate enhanced pollution prevention and/or source reduction in day-to-day operations. In exchange for these additional environmental improvements, participants are eligible for greater multi-media operational/regulatoryflexibility including: a significant expansion of the de minimis concept to establish facility-wide emission caps; an exemption from the definition of solid waste for materials that would otherwise be listed or characteristic hazardous waste destined for recycling; reductions in monitoring fi-equency for water discharges. The Gold Track tier is being implemented by NJDEP as a USEPA Project XL initiative. This tier was implemented in 2001 as a limited pilot. As of August 2006, NJDEP is in the rulemaking process to codify the regulatory flexibilities offered under the Silver Track I1 and Gold Track tiers. 1.2.2 Powers and Duties The NJDEP has been granted broad powers and its present structure reflects much of what has learned since the early attempts to regulate air pollution on a statewide basis. Consequently, the NJDEP has comprehensive rulemaking and enforcement authority. Its enforcement authority extends to administrative enforcement and adjudication as well as the 29 power to initiate judicial actions. Independent of the numerous specific powers granted to the NJDEP by each environmental statute, as a general power, the Department can require the registration of entities engaged in operations which may result in pollution of the environment and may also require the 30 filing of periodic self-monitoring reports. The Department also is empowered to conduct inspections and investigations to ascertain compliance, as well as to compel the production of information by the regulated community, including information which the regulated community 31 might regard as confidential. The NJDEP can both receive and initiate complaints alleging pollution of the environment in violation of State law or regulation and can hold hearings or 32 institute legal proceedings seeking both legal and equitable relief. Environmental regulation inherently involves the reconciliation of competing interests. The Legislature recognized this fact and also acknowledged that potential environmental impacts should be considered in the planning of facilities and projects. Therefore, the ~epai-tmentof Environmental Protection Act empowers the NJDEP to supervise the planning and construction 29

30 31 32

See N.J.S.A. 13:lD-9. N.J.S.A. 13:lD-9(c). N.J.S.A. 13:lD-9(d). N.J.S.A. 13:lD-9(e).

New Jersey Environmental Law Handbook of sanitary engineering facilities and projects as well as to require pre-approval of construction plans for public water supplies, public bathing places, landfill operations, sewerage systems, and disposal plants for waste to minimize the inadvertent construction of projects detrimental to the 33 environment.

1.2.3 Right of Entry and Inspection The NJDEP is authorized, in certain instances and pursuant to various environmental statutes and individual permits, to enter onto the premises of companies to inspect them and their records. For example, the Air Pollution Control Act provides that the Department may enter and inspect any building or place, except private residences, for the purpose of investigating an actual or suspected source of air pollution and ascertaining compliance or noncompliance with any 34 code, rule and regulation of the Department. Similarly, the Water Pollution Control Act states that the Department "shall have a right of entry to all premises in which a discharge source is or might be located or in which monitoring equipment or records required by a permit are kept, for 35 purposes of inspection, sampling, copying, or photography." The Department's authority to conduct a warrantless search pursuant to the Water 36 Pollution Control Act was upheld in State v. Bonaccurso. In that case an NJDEP official conducted a warrantless inspection of a slaughter house in order to discover the source of water contamination. The court upheld this search. noting that "the grant of authority to an administrative agency engaged in protecting the health and welfare of the public is to be liberally 37 construed in order to enable the agency to accomplish its statutory responsibilities..." However, the court also noted that the inspection must be "reasonable in terms of its time, place, 38 and manner." The Department's authority to include a warrantless search provision in a permit issued pursuant to the Water Pollution Control Act was upheld in In Re Environmental Protection 39 Department. In that case, a chemical company was issued a permit to construct and operate a

33 34

35

36

37 38 39

N.J.S.A. 13:lD-9(k). N.J.S.A. 26:2C-9(b)(4). N.J.S.A. 58:lOA-6(g). Pursuant to the 1990 amendments to the Water Pollution Control Act, this authority was extended to "local agencies," as defined by N.J.S.A. 58:lOA-3(x). 227 N.J. Super. 159,545 A.2d 853 (Law Div. 1988). Id. at 169,545 A.2d at 858. Id. at 170,545 A.2d at 858. 177 N.J. Super. 304,426 A.2d 534 (App. Div. 1981).

Foundations of New Jersey Environmental Law wastewater treatment facility. As a condition of that permit, the Department reserved the right to enter the premises pursuant to authority granted pursuant to the Water Pollution Control Act. In its analysis, the court relied on the "pervasive government regulation7' exception to the 40 constitutional warrant requirement and concluded that the company's Fourth Amendment rights were not violated, and that the NJDEP may, as a condition to permit approval, require the 41 company to submit to warrantless inspections. The New Jersey Supreme Court has yet to make 42

a definitive decision in the environmental context.

Legal Process and Procedures - Role of the Attorney General While the NJDEP has been granted comprehensive powers, its direct access to administrative and judicial tribunals is limited by law in that the State may be represented legally 43 only by the Attorney General or his deputies. Any civil matters necessitating a hearing before or enforcement by the courts - including administrative law hearings - require that the NJDEP be 44 represented by the Office of the Attorney General in the Department of Law and Public Safety. The powers and duties of the Department of Law and Public Safety include, inter alia, the power to act as the sole legal advisor, notwithstanding the provisions of any other law, for all departments of State government, including the NJDEP, in all external matters. The Attorney General is to represent the departments in all proceedings or actions of any kind which may be 45 brought for or against them in any court of the State. Moreover, the Division of Law is empowered to interpret all statutes and legal documents as well as to attend generally to all legal 1.2.4

40

41 42

43 44

45

See United States v. Biswell, 406 U.S. 31 1,92 S.Ct 1593,32 L.Ed2d 87 (1972). 177 N.J. Super. at 315,426 A.2d at 540. Warrantless searches of businesses under non-environmental statutes have been ruled constitutional. See State v. Williams, 84 N.J. 2 17,417 A.2d 1046 (1980) (the liquor industry has historically been subjected to intense regulation and may be subjected to warrantless inspections); State v. Rednor, 203 N.J. Super. 503, 497 A.2d 544 (App. Div. 1985) (the pharmaceutical industry has been subject to pervasive and longstanding control, warrantless inspections thereof are constitutional); State v. Bromell, 251 N.J. Super. 85, 596 A.2d 1105 (Law Div. 1991) (warrantless search of autobody repair facility permissible where there is substantial governmental interest in the regulatory scheme, the warrantless search is necessary to fkrther the regulatory scheme, and the inspection provides a constitutionally adequate substitute for a warrant in terms of certainty and regularity); State v. Santiago, 218 N.J. Super. 427, 527 A.2d 963 (Law Div. 1986) (warrantless entry and inspection of business premises and records of pesticide applicator licensee appropriate). State v. Gates, 306 N.J. Super. 322, 703 A.2d 696 (Law Div. 1997) (applying "open field doctrine" to warrantless enforcement of State fish and game laws). N.J.S.A. 52:17A-1, et sea. N.J.S.A. 52:17A-4. N.J.S.A. 52: 17A-4(e).

New Jersey Environmental Law Handbook matters in which the State or its departments is a party or in which its rights or interests are 46 involved. There is a corresponding limitation on the powers of departments of State government, including the NJDEP, to employ attorneys for the purpose of giving legal advice or rendering legal services, except for the performance of "administrative functions entailing the hearing of issues and determining facts in order that [the Department] may perform . . . its functions as 47 required by law." Therefore, the Department is required to work through the Attorney General in the litigation of regulatory matters in the courts and in the formal interpretation of statutes. Notwithstanding statutory limitations on the employment of attorneys by the executive departments of State government, for a number of years prior to 1990 the NJDEP had maintained an in-house legal arm, originally known as the Office of Regulatory Services (ORS) and later as the Department of Regulatory Affairs (DRA). ORSIDRA was ostensibly limited to providing advice to the Commissioner, participating in the administrative process, and assisting in the drafting of statutes and regulations. However, the scope of legal services performed by the NJDEP in-house expanded over time and the Attorney General's staff was rarely involved in matters not involving active litigation. In March 1990, Governor James Florio determined that the Attorney General should reaffirm his authority as sole provider of legal services to the executive branch of State government. By Executive Order, Governor Florio ordered the Attorney General to assess the status of lawyers outside of the Department of Law and Public Safety who were performing duties assigned to the Attorney General and to either transfer these employees or restrict their 48 duties. The Executive Order further provided that, in the future, executive departments are prohibited from employing personnel to provide legal services except as otherwise provided by statute. The effect of Governor Florio's Executive Order was the abolition of ORSIDRA and the transfer of 40 attorneys fiom the NJDEP to the Environmental Protection Section within the Division of Law. The ability of the Attorney General to select "special counsel" for natural resource damage suits came under intense scrutiny soon after the NJDEP's September 24, 2003 policy 49 directive addressing potential claims by the Department for natural resource damages (NRD). 46 47 48 49

N.J.S.A. 52:17A-4(e), (g). N.J.S.A. 52:17A-11. Executive Order #6 (1990), Role of the Attorney General, issued and effective March 14, 1990. Policy Directive 2003-07, Natural Resource Damages, available at h t t p : / / w w n j . g o v / d e p / c o m m i s s i o n e r l p o l i (Sept. ~ 24,2003).

Foundations ofNew Jersey Environmental Law

The policy directive explains that the development and assertion of claims were to be coordinated with the Division of Law and "with any special counsel selected and duly assigned to NRD matters by the Attorney General." The law firm of Allan Kanner & Associates, P.C. was selected as this special counsel. In February 2004, a number of plaintiffs filed suit to challenge the NRD program and to void the retainer agreement between the Attorney General and the Kanner firm as violative of State law, the Public Trust Doctrine, and a government 50 Though the Superior Court of New Jersey attorney's obligation of absolute neutrality. subsequently denied the plaintiffs7motion to invalidate the Kanner firm's appointment as special counsel, it did impose certain restrictions on the collection of contingent fees, including court approval of proposed fees in certain instances. In addition, all papers filed by special counsel must be co-signed by a Deputy or Assistant Attorney General, who retains concurrent 51 professional responsibility for the handling of litigation. As of August 2006, other private law firms have been selected to prosecute NRD claims on behalf of the State. 1.2.5 Administrative Procedure Formal rulemaking and administrative enforcement proceedings initiated by the NJDEP 52 are subject to the procedural and substantive requirements of the Administrative Procedure Act, 53 the procedures established by the Office of Administrative Law, and the regulations adopted 54 for conducting administrative hearings. The New Jersey environmental statutes contain provisions in their respective enforcement 55 sections which purport to establish procedural requirements for administrative hearings. However, in light of the plenary powers granted to the Director of the Office of Administrative 56 Law and the construction which the Administrative Procedure Act has received from the Office

50

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52 53 54 55 56

New Jersey Societv for Environmental & Economic Development. et al. v. Campbell, No. MER-L-343-04 (N.J. Super. Law Div.). The other plaintiffs were the New Jersey Business and Industry Association, the New Jersey State Chamber of Commerce, and the Chemistry Council of New Jersey, the Fuel Merchants Association of New Jersey, and the American Petroleum Institute. New Jersey Societv for Environmental & Economic Development. et al. v. Campbell, No. MER-L-343-04 (N.J. Super. Law Div. June 18,2004). N.J.S.A. 52:14B-1, et sea. N.J.S.A. 52:14F-1, N.J.A.C. 1:l-1.1, et sea. See, e.g.,N.J.S.A. 13:lE-9tc);N.J.S.A. 58:lOA-10(d). See N.J.S.A. 52:14F-5.

New Jersey Environmental Law Handbook 57

of Administrative Law in the regulations promulgated under the Act, the validity of any 58 NJDEP procedural standard might be called into question. Administrative enforcement proceedings must meet the procedural and substantive requirements of the Office of Administrative Law as well as those of the NJDEP. Where the procedural requirements of the NJDEP conflict with those of the Office of Administrative Law, it appears that the requirements 59 of the Office of Administrative Law will pre-empt those of the NJDEP. The NJDEP has adopted procedural regulations under each of the three major statutory 60 61 programs - the New Jersey Water Pollution Control Act, the Solid Waste Management Act, 62 and the Air Pollution Control Act. These regulations provide a right to an adjudicatory hearing 63 when the Department seeks to impose civil administrative penalties. Regulations specifjmg 64 procedures for requesting and conducting adjudicatory hearings have also been adopted. These regulations provide that alleged violators have 20 days from receipt of an administrative order 65 and notice of civil administrative penalty assessment to submit a hearing request. The statutory time limit for requesting an adjudicatory hearing has been found mandatory and jurisdictional, 66 with even the Department lacking authority to enlarge it. Hearing requests should include specific defenses to each of the factual findings made by the Department. General denials are

See N.J.A.C. 1:1-1.1(b), providing that in the event of conflict between the regulations of the Office of

Administrative Law and any other agency rules, except agency rules which incorporate statutory requirements, the regulations of the Office of Administrative Law shall prevail and N. J.A.C. 1:1-1.1(c), providing that no agency, other than the Office of Administrative Law, may "hereafter" propose any rules to regulate the conduct of contested cases and the rendering of the administrative adjudications. In the Matter of Certain Amendments to the Adopted and Approved Solid Waste Management Plan of the Hudson County Solid Waste Management District, 258 N.J. Super. 290, 609 A.2d 501 (1992), & 133 N.J. 206, 627 A.2d 614 (1992) (New Jersey Supreme Court holding DEP was required by its own regulations to adhere to procedural requirements of the APA governing rulemaking with respect to adoption of plan amendment).

N.J.S.A. 58:lOA-1, et sea. N.J.S.A. 13:lE-1, et seq. N.J.S.A. 26:2C-1, et sea. See N.J.A.C. 7: 14-8.3(a)(4); N.J.A.C. 7:26-5.2(a)(4); N.J.A.C. 7:27A-3.3(a)(5). N.J.A.C. 7:14-8.4; N.J.A.C. 7:26-5.3; N.J.A.C. 7:27A-3.4. Note, however, that the regulations of the Office of Administrative Law include a computation of time provision by which the day of the act or event from which the designated period begins to run is not to be included. N.J.A.C. 1:1-4. Midland Glass Co.. v. Dep't of Environmental Protection, 136 N.J. Super. 194, 345 A.2d 353 (App. Div. 1975); Schaible Oil Co., Inc. v. New Jersey DEP, 246 N.J. Super. 29,586 A.2d 853 (App. Div. 1991).

Foundations of New Jersey Environmental Law

not sufficient. If a hearing request is determined to be insufficient, the regulations give the 67 Department the discretion to deny the request; however, the Department rarely finds a timely hearing request deficient and in those rare instances where a hearing request is determined to be incomplete, the NJDEP is more likely to request supplemental information rather than deny the alleged violator an adjudicatory hearing. Administrative Orders commonly contain provisions which require the alleged violator to either come into immediate compliance or to take other affirmative actions. If such requirements take effect before an adjudicatory hearing is held, the hearing may be of little substantive value to the respondent. The Air Pollution Control Act contains a provision authorizing the 68 Department to stay the operation of a compliance order while a hearing is pending. However, neither the Solid Waste Management Act nor the Water Pollution Control Act contain comparable provisions, although a grant of a stay under the Solid Waste Management Act is implictly authorized by a provision which states that a request for a hearing shall not 69 automatic all^ stay the effect of a compliance order. The usual practice is to request a stay as part of an adjudicatory hearing request whenever necessary. The NJDEP does not have uniform policies for granting stays and arguably a respondent denied a stay in an administrative proceeding might have to seek equitablejudicial relief. 1.2.6 Civil Enforcement and Penalties In general, when the Department, acting through the Commissioner, determines that a 70 person has violated any provision of the New Jersey environmental statutes or any of the rules and regulations adopted pursuant to the statutes, it has four alternatives for civil enforcement. First, it may issue an administrative order requiring the person found to be in violation to 71 come into compliance. Second, the Department may bring a civil action in Superior Court for both equitable and legal relief which may include a temporary or permanent injunction, assessment of the costs of investigation and litigation, assessment of any costs of remediation or

67 68 69

70

N.J.A.C. 7:14-8.4(b); N.J.A.C. 7:26-5.3(~);N.J.A.C. 7:27A-3.4(~). N.J.S.A. 26:2C-14.1. N.J.S.A. 13:lE-9(c). Solid Waste Management Act, N.J.S.A. 13:lE-1, et sea.; Air Pollution Control Act, N.J.S.A. 26:2C-1, seq.; Water Pollution Control Act, N.J.S.A. 58:lOA-1, et sea.; Spill Compensation and Control Act,

N.J.S.A. 58:lO-23.11 et sea. 71

See N.J.S.A. 13:lE-9(b)(l), (c); N.J.S.A. 26:2C-14, -19; N.J.S.A. 58:lOA-10(a)(l), (b). Note that the NJDEP apparently lacks authority to use Administrative Orders to enforce the Spill Compensation and Control Act.

New Jersey Environmental Law Handbook 72

correction incurred by the State, and assessment of compensatory damages. Third, the Department may levy a civil administrative penalty in amounts generally ranging from $10,000 73 to $50,000 per violation depending upon the statute and regulation violated. Fourth, the Department may bring an action in Superior Court or in municipal court for imposition of a civil 74 penalty. The Spill Compensation and Control Act now authorizes the Department to impose civil administrative penalties (and to seek civil penalties judicially) of up to $10 million for acts 75 or omissions resulting in releases of hazardous substances of 100,000 gallons or more. The most common enforcement mechanism used by the NJDEP is the Administrative Order and Notice of Civil Administrative Penalty Assessment (AONOCAPA). The Department has adopted regulations under the Water Pollution Control Act, Solid Waste Management Act, and Air Pollution Control Act for the assessment of civil penalties administratively. The objective of these regulations is to provide uniformity in penalty assessment and, therefore, the Department is required to calculate its civil administrative penalties in accordance with these regulations. The civil administrative penalty assessment regulations adopted under the Water 76 Pollution Control Act provide that, in most cases, the Department is to assess penalties for violations on the basis of the seriousness of the violation (the Seriousness Factor) and the conduct of the violator (the Conduct Factor). Each factor is characterized as "major," "moderate," or "minor" using criteria set forth in the regulations and the appropriate penalty range is selected from the following matrix:

Conduct

72

73

74 75

76

Major Moderate Minor

Seriousness (In Thousands) Maior Moderate Minor $30 - 40 $15 - 25 $40 - 50 $30 - 40 $10 - 20 $3 - 7 $15 - 25 $3-7 $1 - 2.5

N.J.S.A. 13:1E-9(b)(2), (d)(l) to (4); N.J.S.A. 26:2C-19(a); N.J.S.A. 58:10A-10(a)(2), (c)(l) to (4); N.J.S.A.58:lO-23.1lu(b). N.J.S.A. 13:1E-9(b)(3), (e); N.J.S.A. 26:2C-19(b); N.J.S.A. 58:10A-10(a)(3), (d); N.J.S.A. 58:1023.1 lu(c). N.J.S.A. 13:lE-9(b)(4),(0;N.J.S.A.26:2C-19(d);N.J.S.A. 58:lOA-10(a)(4),(e); N.J.S.A.58:lO-23.11u(d). N.J.S.A. 58:lO-23.11~1. N.J.A.C.7:14-8.1, et sea

Foundations of New Jersey Environmental Law

As a starting point, the penalty is set at the midpoint of the appropriate range and then adjusted either upward or downward depending upon the compliance history of the violator; the number, frequency, and severity of the violation; measures taken by the violator to mitigate the 77 violations or to prevent fbture violations, and the deterrent effect of the penalty. The regulations provide separately for penalties for submitting inaccurate or false 78 79 information, failure to allow entry and inspection, conducting "unapproved activities," such 80 as the construction or operation of a facility or treatment works in violation of a permit, failure 81 to properly conduct monitoring or sampling, and failure to pay a permit fee or civil 82 administrative penalty. The Legislature has curbed the NJDEP's discretion in assessing and compromising 83 penalties. The Clean Water Enforcement Act signed into law on May 23, 1990, amending the Water Pollution Control Act and the Environmental Rights Act, prescribes minimal mandatory penalties to be imposed on Water Pollution Control Act violators and limits the discretion of the 84 85 NJDEP to compromise penalty assessments. It also imposes increased reporting requirements 86 and expands the Department's investigatory powers. The Clean Water Enforcement Act provides for the imposition of mandatory penalties of $1,000 per day for "serious violations" and $5,000 per day for violations causing the violator to 87 be a "significant non-complier." The terms "serious violation7' and "significant non-complier" are both defined in the Act. There is also a mandatory penalty of $100 per day for each effluent parameter omitted from Discharge Monitoring Reports. Alleged violators can raise upset, bypass, and testing or laboratory errors as affirmative defenses to mandatory penalties.

N.J.A.C.7:14-8.5(e),(0. N.J.A.C.7:14-8.6. N.J.A.C.7:14-8.7. N.J.A.C.7:14-8.8. N.J.A.C.7:14-8.9. N.J.A.C.7:14-8.10. L.1990, c.28. (codified in scattered sections of N.J.S.A. 58:lOA-1,et sea.).

See N.J.S.A. 58:10A-10 (violations;remedies, fines and penalties; enforcement; forfeiture of conveyances). See N.J.S.A. 58:lOA-6. See N.J.S.A. 58:10A-10.3 (request for information relevant to discharge of pollutant; subpoena; duties of person receiving request). N.J.S.A. 58:lOA-10.1.

New Jersey Environmental Law Handbook The Act contains additional provisions to make enforcement easier for the NJDEP and to make appeal of adverse determinations more difficult. If the NJDEP brings a civil action in Superior Court to enforce the Water Pollution Control Act, it can seek assessment of the economic benefits of non-compliance. The Clean Water Enforcement Act required the 88 Department to adopt a civil penalty policy and the NJDEP is prohibited from compromising below 50 percent of the penalty assessment calculated pursuant to the policy or the statutory minimum whichever is greater. Where a penalty is assessed and is neither paid nor appealed within 30 days, interest accrues on the unpaid amount. Finally, the statute requires an alleged violator to post financial security in the amount of the penalty in order to appeal a penalty 89 determination either judicially or administratively. This requirement, however, has been found 90 unconstitutional for failure to satisfy due process requirements. The civil administrative penalty assessment regulations adopted under the Solid Waste 91 Management Act employ a different approach than the Water Pollution Control Act. "Base 92 Penalty" amounts are established for violations of each regulatory provision and these base penalties are supplemented by "Severity Factors" based upon the respondent's compliance 93

history. The NJDEP is also granted the discretion to assess a penalty pursuant to an alternative methodology employing "Seriousness" and "Conduct Factors" and a matrix similar to the one 94 used to determine penalties under the Water Pollution Control Act. The NJDEP can use this alternative methodology for violations not specifically listed under N.J.A.C. 7:26-5.4 or when, because of specific circumstances, the Department believes that the penalty amount using the "Base Pena1ty"PSeverity Factor" method would prove too low to provide sufficient deterrence. 95 Separate regulations provide penalties for submitting inaccurate or false information, failure to 96 97 allow lawful entry and inspection, and failure to pay a fee.

See 23 N.J.R. 2366 (August 5, 1991) (amending N.J.A.C.7:14-8.1, et & N.J.A.C.58:lOA-10(d)(5). St. James v. Dept. of Environ. Protect., 275 N.J. Super. 342 (App. Div. 1994). N.J.A.C.7:26-5.1,et sea. N.J.A.C.7:26-5.4(f),(g). N.J.A.C. 7:26-5.4(f). N.J.A.C.7:26-5.5. Some of the penalty amounts differ slightly. N.J.A.C.7:26-5.6. N.J.A.C.7:26-5.7. N.J.A.C. 7:26-5.8.

Foundations of New Jersey Environmental Law Regulations governing the calculation of civil administrative penalties under the Air Pollution Control Act employ a unique system necessitated in part by the penalty provision in the statute providing for different maximum penalty amounts depending upon whether an alleged 98 violation constitutes a first, second, third, or subsequent offense. The regulations establish penalty amounts both for original and subsequent offenses for violation of each regulatory provision. Aggravating and mitigating factors to be used to adjust the specified penalties are also 99 provided and these factors vary depending upon the specific provision violated. As with the other penalty programs, there are separate provisions for submitting 100 101 102 inaccurate or false information, failure to allow lawful inspection, failure to pay a fee, and for failure to provide information or test data or to maintain a permanent record of such 103 information or data. 1.2.7 Preemption of County and Local Initiatives As indicated earlier, environmental regulation in New Jersey has strong local roots which 104 preceded the establishment of statewide regulation. The primary limitation upon the power of the State to regulate locally is the constitutional prohibition against legislation about particular 105 This "local legislation" prohibition was seen for many years as severely persons or places. 106 limiting the power of the Legislature to regulate environmental issues. Eventually, the courts held that in regulating a matter on a statewide basis, the State was entitled to treat regions of the 107 State separately in implementing programs with Statewide interest. Pursuant to the Public Health Nuisance Act, discussed supra, the primacy of local enforcement was explicit. Later, under the New Jersey Public Health and Sanitary Codes

N.J.S.A. 26:2C-19(b). N.J.A.C. 7:27A-3.10. N.J.A.C. 7:27A-3.6. N.J.A.C. 7:27A-3.7. N.J.A.C. 7:27A-3.8. N.J.A.C. 7:27A-3.9.

See Section 1.1, m. N.J. Const. Art. 4, $7, Para. 7. This provision reads: 'Wo general law shall embrace any provision of a private, special or local character." Moran, General Administrative Law, 9 Rutgers L. Rev. 40,49-50 (1954). See Abbotts Dairies. Inc. v. Armstrong, 14 N.J. 319, 102 A.2d 372 (1954).

New Jersey Environmental Law Handbook 108

Adoption by Reference Act, enforcement was maintained at the local level and the role of the State was limited to the development of uniform codes which could be adopted and enforced by local boards of health. 109 The Air Pollution Control Act, the first comprehensive State environmental statute, preserved all local ordinances more stringent than the Act as well as the right of local governing bodies to adopt ordinances, codes, rules, or regulations more stringent than the Act so long as 110 penalties for violations did not exceed $2,500. In New Jersey, complete State takeover preempting local regulation is generally achieved by specific statutory language. Absent such language, the courts will not presume that local authorities lack regulatory authority. For example, the original statutory grant of regulatory power over landfill operations was held not to preempt the field of regulation so as to preclude 111 regional agencies from promulgating regulations governing sanitary landfill operations. Subsequently the pervasive control over siting and operation of landfills under the Solid Waste 112 Management Act was held to preempt local zoning and planning ordinances. The regulation of PCBs as hazardous waste by the NJDEP preempts municipal regulation with regard to this 113 compound. In general whether a particular local regulation is preempted by State regulation of the same subject matter will depend primarily on the specifics of the statute - i.e., does it expressly preempt - and secondarily on the comprehensiveness with which the State statutory 114 scheme has occupied the field.

108 109 110 111

112

113

114

L.1947, c.177, N.J.S.A. 26:lA-5, et sea See Section 1.1.1, m. N.J.S.A. 26:2C-1, et sea. N.J.S.A. 26:2C-22. See also Moran, supra, at 665. Municipal Sanitarv Landfill Authoritv v. Hackensack Meadowlands Development Commission, 120 N.J. Super. 118,293 A.2d 426 (App. Div. 1972). Chester Townshiv v. Department of Environmental Protection, 181 N.J. Super. 445, 438 A.2d 334 (App. Div. 1981); Little Falls Township v. Bardin, 173 N.J. Super. 397, 414 A.2d 559 (App. Div. 1979); Ocean Countv Utilities Authority v. Planning Board of Berkeley Townshiv. Ocean County, 22 1 N. J. Super. 62 1, 535 A.2d 550 (Law Div. 1987), affd, 223 N.J. Super. 461, 538 A.2d 1307 (App. Div. 1988); Townshiv Committee of South Harrison Township v. Board of Chosen Freeholders of Gloucester Countv, 213 N.J. Super. 179, 516 A.2d 1140 (Law Div. 1985), rev'd on other grounds, 210 N.J. Super. 370, 510 A.2d 42 (App. Div. 1986). Rollins Environmental Services of New Jersey, Inc. v. Logan Township, 209 N.J. Super. 556,508 A.2d 271 (App. Div.), certif. denied, 105 N.J. 510,523 A.2d 157 (1986). Id. -

Foundations of New Jersey Environmental Law

1.2.8 Local Enforcement Role New Jersey's long history of local enforcement of environmental regulations has been maintained to a fair degree under current law, except for proceedings under the Environmental Rights Act (& Section 2.1, infra), but, such local powers to enforce State statutes must be granted by the terms of the statute. The Solid Waste Management Act, for example, provides that the rules and regulations adopted by the Department shall be enforced by both the NJDEP and by local boards of health or county health departments. Local boards of health and county health departments have rights of entry to ascertain compliance and municipal attorneys and county counsels may act as de facto prosecutors for local boards of health and county health 115 departments respectively. The Legislature has also authorized county departments of health to administer environmental health services in accordance with performance standards issued by the NJDEP. These services include the monitoring and enforcement of environmental health standards, the operation of technical resource centers, and the enactment and enforcement of environmental 116 health ordinances on a county-wide basis to control solid waste, air, noise, and water pollution. 117 In 1968, the Legislature provided by statute that the governing body of any municipality may establish, by ordinance, an environmental commission for the protection, development, and use of the natural resources located within the municipal boundaries. The statute sets forth the functions, duties, and powers of an environmental commission as well as the procedures for creating the commission. In addition, the governing bodies of two or more municipalities are authorized to create a joint environmental commission for the protection, development, or use of natural resources located within their combined territorial limits. Local environmental commissions are advisory only however and do not have separate enforcement powers. 1.3 CRIMINAL PROSECUTION 1.3.1 Criminal Liability for Violations of Environmental Law The major environmental statutes such as the Air Pollution Control Act, the Water Pollution Control Act, the Clean Water Enforcement Act, the Solid Waste Management Act, the Solid Waste Utility Control Act, the Comprehensive Medical Waste Management Act, and the

115

116

117

N.J.S.A. 13:lE-9(a). N.J.S.A. 26:3A2-25, -26, -27. An Act Authorizing Municipalities to Establish Environmental Commissions and Supplementing Title 40 of the Revised Statutes, L.1968. c.243, amended by L. l972., c.35 1, N.J.S.A. 40:56A-1, et seq.

New Jersey Environmental Law Handbook 118

Radiation Protection Act contain criminal liability provisions. By their terms, these provisions are enforceable by the Attorney General. Under certain provisions a violator is subject to ll9 In the case of both strict liability and willful or criminal prosecution regardless of intent. 120 knowing statutory violations, penalties can include fines of up to $1 million and terms of imprisonment of up to 20 years.

121

See Appendix A for a listing of crimes and their respective

penalties. The Legislature has indicated an increasing willingness to impose more specific and stringent criminal penalties than in the past. One example is the Clean Water Enforcement 122 Act, passed in 1990, which imposed new criminal penalties under the Water Pollution Control Act. The criminal provisions of the Clean Water Enforcement Act provide that a purposeful or knowing violation of an effluent limitation or a permit condition is a first-degree crime, if the violator knows that the violation places another person in imminent danger of death or serious bodily injury. In addition to the standard penalty for first-degree crimes, the Act provides for a supplemental fine of $50,000 to $250,000 for individuals and $200,000 to $1,000,000 for corporations. Purposeful, knowing, or reckless violations of the Act which cause significant adverse environmental effects are now second-degree crimes with supplemental fines of between $25,000 and $250,000. Reckless violations of the Act or purposeful or knowing false statements or failures to report are third-degree crimes with supplemental fines of $5,000 to $75,000, and negligent violations of the Act are fourth-degree crimes with fines of $5,000 to $50,000. In addition, the Solid Waste Management Act, the Comprehensive Medical Waste Management Act, the Spill Compensation and Control Act, and the Water Pollution Control Act each contain civil forfeiture provisions making all conveyances used in violation of these statutes 123 subject to forfeiture. 1.3.2 Criminal Code In addition to the specific criminal provisions contained in the environmental statutes which are enforceable by the Attorney General, either on his own initiative or after referral from the NJDEP, New Jersey's Code of Criminal Justice for criminal penalties for other acts 118 119 120

I21 122 123

See Appendix A for a chart listing environmental criminal provisions and penalties. N.J.S.A. 13:lE-9(i);N.J.S.A. 26:2D-22;N.J.S.A.26:2D-77;N.J.S.A.48:13A-12(b). See discussion of Clean Water Enforcement Act, m. For other significant monetary penalties, see N.J.S.A.26:2C-33; N.J.S.A. 13:lE-9(g)(5);N.J.S.A. 58:lOA-10(f).

N.J.S.A.2C:43-6(a)(l). L.1990, c.28 (codified in scattered sections of N.J.S.A.58:lOA-1, et sea. and N.J.S.A.2A:35A-1, a seq). N.J.S.A. 13:lE-9(i), -48.20(k);N.J.S.A. 58:lOA-lO(g);N.J.S.A. 13:lK-1, et sea

Foundations of New Jersey Environmental Law 124

detrimental to the environment. The purposeful or knowing release or abandonment of "hazardous wastes" or other harmful or destructive substances is a second-degree crime carrying 125 a penalty of imprisonment for up to 10 years. Purposeful or knowing discharge of a hazardous substance of a magnitude which requires reporting pursuant to the Spill Compensation and 126 Control Act or the purposeful or knowing release or abandonment of hazardous waste or toxic 127 pollutants is also a second-degree crime. Recklessly causing a reportable discharge or release or abandonment of hazardous wastes or toxic pollutants is a third-degree crime carrying a 128 potential sanction of up to 5 years imprisonment. More generally, recklessly causing wide129 spread injury or damage is a crime of the third degree, while recklessly creating a risk of wide130 spread injury or damage is subject to criminal penalties even if no injury or damage occurs. These latter two sections are the general "work horse" provisions used by the Attorney General quite routinely. In addition, criminal sanctions can be imposed upon "responsible corporate 131 officers" for certain environmental violations. Prosecutions under the Code of Criminal Justice are within the jurisdiction of both county 132 prosecutors and the Attorney General. County prosecutors have broad powers and 133 considerable discretion in the enforcement of criminal cases and they use this discretion in enforcing the environmental provisions contained in the Code of Criminal Justice. However, historically major criminal prosecutions of environmental matters in New Jersey have been generally organized and coordinated by the Environmental Prosecution Task Force in the

See Appendix A. N.J.S.A. 2C:17-2(a)(l), (2). Second-degree crimes carry potential sentences of up to 10 years, N.J.S.A. 2C:43-6(a)(2). N.J.S.A. 58:lO-23.11, et sea. N.J.S.A. 2C: 17-2(a)(2). N.J.S.A. 2C:17-2(a)(2); N.J.S.A. 2C:43-6(a)(3). N.J.S.A. 2C: 17-2@). N.J.S.A. 2C:17-2(c). See State v. Iron Oxide Corp., 178 N.J. Super. 303,428 A.2d 962 (Law Div. 1980).

See M. Dore and R. Ramsay, Limiting the Designated Felon Rule: The Proper Role of the Responsible Corporate Officer Doctrine in the Criminal Enforcement of New Jersev's Environmental Laws, 53 Rutgers L. Rev. 181 (2000); see also N.J.S.A. 58:lOA-3(1) (defining "person" to include "any responsible corporate official" under New Jersey's Water Pollution Control Act). N.J.S.A. 2A:158-4, -5. N.J.S.A. 2A:158-1, et sea.; State v. Winne, 12 N.J. 152,96 A.2d 63 (1953).

New Jersey Environmental Law Handbook Division of Criminal Justice within the Department of Law and Public Safety under the indirect 134 supervision of the Attorney General. In 1990, Governor James Florio signed an executive order creating the position of 135 but this executive Environmental Prosecutor in the Department of Law and Public Safety, order was rescinded and the position eliminated in 1994 by Governor Christine Whitman.

136

The

position may soon return. As of August 2006, the Legislature is considering separate bills that would reestablish the Environmental Prosecutor, who would be authorized to prosecute criminal 137

violations of environmental laws. 1.4 OTHER AGENCIES In addition to the NJDEP, the Legislature, in conjunction with other states, has created several additional regulatory entities with jurisdiction over environmental matters. These include the Delaware River Basin Water Commission, the Interstate Sanitation Commission, and the Regional Greenhouse Gas Initiative. These agencies are the result of multi-state compacts to address environmental concerns on a regional basis. 1.4.1 The Delaware River Basin Commission The Delaware River Basin Commission arose fiom an interstate compact among New York, New Jersey, Pennsylvania, and Delaware. This compact was entered into for the purpose of coordinating the conservation, water supply, pollution, and potential use of the waters of the 138 Delaware River basin and to develop integrated plans to conserve and safeguard those waters. The four signatory states agreed to cooperate to control future pollution and to correct existing pollution in the waters of the Delaware River from the New YorkPennsylvania boundary to the Atlantic Ocean. In furtherance of this objective, each of the states agreed to enact adequate legislation to require the treatment of sewage, industrial waste, and other pollutants as necessary 139 to meet the objectives of the agreement. The states also agreed to minimum requirements for treatment of sewage and industrial effluents in each of the four zones. New Jersey has adopted standards to this effect in N.J.S.A. 32:20-4.

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135

136 137 138 139

N.J.S.A. 52:17B-99. Executive Order No. 2 (Jan. 24, 1999). Executive Order No. 9 (March 15,1994). S. 1778,212" Legislature (2006); A. 1 8 6 1 , 2 1 2 Legislature ~ (2006). L.1939, c.146, p.488, Preamble. See Delaware River Basin Compact, N.J.S.A. 32:1 lD-1, et sea. N.J.S.A. 32:20-2.

Foundations of New Jersey Environmental Law The Delaware River Basin Commission is the recognized regional commission for the 140 purpose of the interstate compact and the agreement among the states supersedes any 141 inconsistent State laws and regulations applicable to the Delaware River basin. 1.4.2 Interstate Environmental Commission The Interstate Environmental Commission is the result of a tri-state compact among New York, New Jersey, and Connecticut to control future pollution and abate existing pollution in the Interstate Environmental District ("District"). The District is comprised of all coastal, estuarial 142

and tidal waters adjacent to specified parts of the states, including substantially all of the tidal 143 waters of greater New York City bordering New Jersey. The Interstate Environmental Commission consists of five commissioners from each state. As with the Delaware River Basin Commission, the Interstate Sanitation Commission recognized that no single standard of water quality is practicable in all parts of the district. Therefore, the Commission is empowered to classify waters within the district as either Class A 145 (recreational and fisheries) or Class B (waters used for other purposes). The states agreed that sewage or other contaminants shall not be discharged into the District waters unless the water 146 quality of the discharge meets certain minimum standards. These standards do not apply to 144

147

discharges from the facility operated by the Passaic Valley Sewerage Commission. The powers of the Commission under New Jersey law include the power to seek injunctive or other relief to prevent violations or threatened violations of the water quality 148 standards established by the Commission. Except for facilities existing as of April 1, 1935, the construction of new sources of pollution within the district is prohibited in the absence of an order from the Commission establishing that the proposed facility will "serve the public 149 interest."

N.J.S.A.32:20-5. N.J.S.A.32:20-6. N.J.S.A.32:18-3(1)(a). N.J.S.A. 32:18-3(1)(c). N.J.S.A.32:18-5(1). N.J.S.A.32:18-7(1). N.J.S.A.32:18-8, et sea. N.J.S.A. 32:18-13(1). N.J.S.A.32:19-4. N.J.S.A.32:19-6.

New Jersey Environmental Law Handbook Finally, whenever the Commission determines that a discharge into District waters is injurious to public health or recreational purposes, or constitutes a public nuisance, the Commission may order the discharger to show cause why the discharge should not be. discontinued or regulated. Such an order shall provide for a public hearing to be held by the 150 Commission using a procedure set forth in the statute.

In 1961, the Legislature granted additional powers and duties to the Commission relating 151

The Commission was empowered to conduct studies and make to interstate air pollution. recommendations to the participating states, and to refer complaints to appropriate enforcement 152 agencies of the individual states in which sources of air pollution were located. 1.4.3 Regional Greenhouse Gas Initiative New Jersey is a participating member of the Regional Greenhouse Gas Initiative (RGGI), a cooperative effort formed in December 2005 by Northeastern and Mid-Atlantic states (New Jersey, Connecticut, Delaware, Maine, New Hampshire, New York, and Vermont) to develop a regional strategy to reduce carbon dioxide emissions. RGGI is a mandatory program, and covered power plants must comply with program requirements. Central to the initiative is the implementation of a multi-state cap-and-trade program with a market-based emissions trading 153 system. Under the cap-and-trade program, participating states establish the total amount of emissions (the "emissions cap") to be allowed fi-om all covered emissions sources. Each state issues one allowance for each ton of emissions, up to the amount of the cap, and those allowances are distributed to the generators and the market. Each covered emissions source is required to have enough allowances to cover its emissions at the end of each compliance period. If a source does not have enough such allowances, it can reduce its emissions, buy allowances from other sources, or generate credits by way of an emissions offset project. A source with excess allowances may bank those allowances or sell them to other sources.

N.J.S.A. 32:19-7. 151

152 153

An Act Concerning Air Pollution and Supplementing Chapter 19 of Title 32 of the Revised Statutes and Making an Appropriation, L.1961, c.105, N.J.S.A. 32:19A-1, et sea.

N.J.S.A. 32:19A-1. Information regarding RGGI discussed in this section is available at www.rnni.org.

Foundations of New Jersey Environmental Law 2.0

PRIVATE RIGHTS AND REMEDIES The primary mechanism for private parties to assert statutory environmental claims is 154 through the Environmental Rights Act, which is discussed in detail in the next section. In 1992, the Legislature amended the Spill Act to include a statutory private right of contribution for environmental injuries. This provision is discussed in detail in Chapter 11, Section 2. Common law actions are discussed in Section 2.2 of this Chapter. ENVIRONMENTAL RIGHTS ACT - PRIVATE ENFORCEMENT OF PUBLIC 2.1 RIGHTS With the enactment of the Environmental Rights Act in 1974, New Jersey became the 155 eighth State to provide citizen standing to bring suits for the protection of the environment. Modeled on Michigan and Massachusetts statutes, the Act declared that it is in the public interest 156 to enable ready access to the courts to remedy environmental violations. The Act allows persons to sue for injunctive or other equitable relief to compel compliance with existing 157 158 environmental laws, and since 1991, to assess civil penalties as well. An action may be commenced upon an allegation of either a continuous or intermittent violation of an environmental law, and a likelihood that the violation will recur in the future. Courts have permitted private suits where the NJDEP fails to adequately enforce the environmental law in 159 question. In addition to allowing suits to remedy conduct specifically violative of environmental statutes, rules, and regulations, the Act also establishes a general substantive right to bring an .

An Act concerning the commencement of actions for the protection of the environment and the public interest therein, effective December 9, 1974, L.1974, c.169, codified at N.J.S.A. 2A:35A-1, et sea The previous seven states were Michigan, Minnesota, Massachusetts, Connecticut, South Dakota, Florida, and Indiana. N.J.S.A. 2A:35-2. L.1990, c.28 (effective July 1, 1991), codified at N.J.S.A. 2A:35A-4. N.J.S.A. 2A:35A-4(a). N. J.S.A. 2A:35A-3(a) defines the term "person" to include corporations, companies, associations, societies, f m s , partnerships and joint stock companies, individuals, the State, any political subdivision of the State and any agency or instrumentality of the State or of any political subdivision of the State.

See In Re: New Jersev Pinelands Commission Resolution, 356 N.J. Super. 363, 812 A.2d 1113, (App. Div. 2003), cert. denied 176 N.J. 281, 822 A.2d 610 (2003) (ERA can be used to challenge inadequate enforcement of environmental laws by an agency); Superior Air Products v. NL Industries, 216 N.J. Super. 46, 522 A.2d 1025 (App. Div. 1987) (NJDEP action under Spill Act is preemptive of rights under ERA where NJDEP acts prior to or upon filing of ERA proceeding and NJDEP action proves adequate to protect the environment); Howell Townshiv v. Waste Disposal Inc., 207 N.J. Super. 80, 504 A.2d 19 (App. Div. 1986).

New Jersey Environmental Law Handbook

action to protect the environment as long as the conduct complained of does not constitute a 160 violation of an environmental law establishing a more specific standard. The Act does not 161 provide a private right of action for damages. All actions under the Act are subject to the 162 power of the court to dismiss fiivolous or meritless suits and to award counsel and expert witness fees to the prevailing party which, in an action against a local agency or the NJDEP, 163 The Act requires a prospective litigant to provide 30 days prior shall not exceed $50,000. notice of suit to the Attorney General, the NJDEP, the municipality in which the defendant's 164 conduct has occurred and the defendant. Prior notice is not applicable to actions commenced by the State or political subdivisions within the State. Defenses to a suit under the Act include actual compliance with existing State laws as well as good faith compliance with abatement schedules reached, in agreement with the 165 NJDEP. If administrative or other proceedings are required or available to determine the legality of the defendant's conduct, the court shall remit the case to such proceedings to be 166 conducted in accordance with the Administrative Procedure Act. 2.2 COMMON LAW PRIVATE ENFORCEMENT OF PRIVATE WRONGS 2.2.1 Common Law Causes of Action New Jersey has a rich common law tradition with respect to the imposition of liability for environmental injuries. The common law has continued to develop notwithstanding the enactment of statutory law on both the federal and State level addressing environmental 167 liabilities. One of the earliest such cases is P. Ballantine & Sons v. Public Service Coq., where the court found that the plaintiff was entitled to damages for contamination that had escaped from the defendant's property and found its way into the plaintiffs groundwater wells.

-

N.J.S.A. 2A:35A-4(b), -6. For case law interpreting the phrase "more specific standard" gg Borough of Kenilworth v. Department of trans^., 151 N.J. Super. 322, 376 A.2d 1266 (App. Div.), certif. denied, 75 N.J. 541,384 A.2d 520 (1977); Howell Township, m. Allied Corn. v. Frola, 701 F.Supp. 1084 (D.N.J. 1988). N.J.S.A. 2A:35A-4(c). N.J.S.A. 2A:35-Iota). For the definition of "local agency," gg N.J.S.A. 2A:35-10(f) which defines the term to include a political subdivision of the State or an agency or instrumentality thereof, that owns or Patterson v. Vernon T w . Council, 306 N.J. Super. 329, operates a municipal treatment works. See901 A.2d 41 1 (App. Div. 2006). N.J.S.A. 2A.35A-11. N.J.S.A. 2A:35A-5. N.J.S.A. 2A:35A-8. 86 N.J.L. 331 (1914).

Foundations of New Jersey Environmental Law

The plaintiff had alleged that its well waters had been made valueless because its brewing operations required pure, cool water. The seminal case of State Department of Environmental Protection v. Ventron Corp. makes clear that common law remedies remain available notwithstanding collateral statutory 168 remedies. Ventron also provides a comprehensive discussion of the history of New Jersey law 169 170 on these remedies and specifically notes that: toxic wastes are abnormally dangerous, and the disposal of them, past or present, is an abnormally dangerous activity. We recognize that one engaged in the disposing of toxic waste may be performing an activity that is of some use to society. Nonetheless, the unavoidable risk of harin that is inherent in it requires that it be carried on at his peril rather than at the expense of the innocent person who suffers harm as a result of it. The Ventron decision set forth what has become a founding principle in the development of environmental common law in New Jersey: "those who poison the land must pay for its cure."l71 In light of this principle, the New Jersey courts have emphasized that their primary concern in resolving environmental cases is with underlying considerations of "reasonableness, fairness and morality" rather than the "formulary labels" which might be attached to particular causes of action.172 In addition to strict liability, other traditional tort theories remain viable in New Jersey. 173 174 175 Nuisance, trespass, negligence, and f i - a ~ d 'have ~ ~ been successfully asserted in

94 N.J. 473,468 A.2d 150 (1983). Id. at 488,468 A.2d at 157. Id. at 493, 468 A.2d at 160. Cases subsequent to Ventron have held that whether pollution activity is a basis for direct liability is to be determined on a case-by-case approach following the Restatement (Second) of Torts principles. T & E Industries Inc. v. Safetv Light Cornoration, 227 N.J. Super. 228, 546 A.2d 570 (App. Div. 1988), aff d as modified, 123 N.J. 371, 587 A.2d 1249 (1991); Kennev v. Scientific, Inc., 204 N.J. Super. 228,497 A.2d 1310 (LawDiv. 1985).

Berg v. Reaction Motors Div.. Thiokol Chemical Corp., 37 N.J. 396, 181 A.2d 487 (1962), cited in T & E Industries Inc. v. Safetv Light Corn., 227 N.J. Super. 228, 546 A.2d 570 (App. Div. 1988), affd as modified, 123 N.J. 371, 587 A.2d 1249 (1991); Kennev v. Scientific, Inc., 204 N.J. Super. 228, 497 A.2d 1310 (Law Div. 1985). Ventron, suvra 94 N.J. at 488-89, 468 A.2d at 157-158, overruling Marshall v. Welwood, 38 N.J.L. 339 (1876). But see Kennev, suvra 204 N.J. Super. at 255,497 A.2d at 1324. Ventron, suvra 94 N.J. at 488,468 A.2d at 158. Kennev. supra 204 N.J. Super. at 254,261,497 A.2d at 1324,1328. Ventron. suvra 94 N.J. at 503,468 A.2d at 166.

New Jersey Environmental Law Handbook environmental cases in New Jersey. Punitive damages are available in environmental actions involving deliberate acts or omissions done with knowledge of a high degree of probability of 177 harm and reckless indifference to consequences, or where there has been "such a conscious and deliberate disregard of the rights of others that his conduct may be called willhl or 178 Indeed, state statutory limitations on the availability of punitive damages have wanton." 179

excluded "environmental torts." 2.2.2 Toxic Tort Claims As is true in most jurisdictions, latent workplace injury claims, personal injury and property damage claims based upon injurious exposure to hazardous substances, alleged injuries caused by contamination of drinking water sources and other environmental claims have grown in number and significance in New Jersey in recent years. Indeed, the New Jersey Supreme Court has held that "a plaintiff in an occupational-exposure, toxic-tort case may demonstrate medical causation by establishing: (1) factual proof of the plaintiffs frequent, regular and proximate exposure to a defendant's product; and (2) medical andlor scientific proof of a nexus 180 between the exposure and the plaintiffs condition." A complete discussion of such "toxic 181 tort" claims is beyond the scope of h s volume. New Jersey courts, however, have rendered a number of significant procedural and substantive decisions in this area. In addition, the administration of numerous mass torts including tobacco, diet drugs, latex gloves, etc. has been centralized in Middlesex County. The court in that county has set up a very useful Mass Tort Information Center website to distribute information with respect to these claims. 2.2.3 Claim Administration New Jersey courts have rendered a number of significant procedural decisions in the toxic tort area. Indeed, to date, the court has provided coordinated mass tort treatment for three general classes of cases. These include large numbers of claims associated with a single product (e.g., pharmaceutical products); mass disasters ( z the, Durham Woods pipeline explosion); and complex environmental claims (x, the Ciba-Geigy litigation). The administration of these cases, however, became the subject of academic criticism because of the practice of the New

177 178

179

180 181

Kennev, supra 204 N.J. Super. at 253,497 A.2d at 1323, (citing Berg, suvra at 414). Id. at 253,497 A.2d at 1323 (citing Prosser & Keeton, Torts $2 (5th edition 1984)). See, e.g., N.J.S.A. 2A:58C-6 (provisions of Products Liability Act do not apply to environmental tort actions). James v. Bessemer Processing Co.. Inc., 155 N.J. 279,714 A.2d. 898 (1998). For a full treatment of this subject, see M. Dore, "Law of Toxic Torts: Litigation-Defense-Insurance" (West Group 1998).

Foundations of New Jersey Environmental Law Jersey Supreme Court to transfer and consolidate mass tort litigation without full disclosure to, 182 or participation by, interested parties. Following this criticism, the Court adopted Rule 4:38A, Centralized Management of Mass Torts. Pursuant to this Rule, the Court created guidelines and criteria for the designation of mass torts. These guidelines identified the procedures for requesting the designation of a case as a mass tort; identified the criteria to be applied in determining whether centralized management is warranted; and provided for public disclosure of this entire process. In addition, in July 2005, the Court published a "New Jersey Mass Tort Resource Book." This resource book provides procedural and operational guidance to New Jersey judges and judiciary staff in the management of mass tort cases. It identifies issues such as how to define a mass tort; the court in which such cases should be managed; pro hoc vice admission of counsel; etc. It also contains extensive suggestions with respect to the judiciary's pretrial and trial supervision of mass tort cases and discusses crucial mass tort matters such as the coordination of related litigation and settlement. This very valuable "Resource Book" is available on the New 183 Jersey Judiciary's website. 2.2.4 New Liability Theories In addition to traditional recovery for property damage and physical injuries, the New Jersey courts have also considered non-traditional damage claims such as recovery for medical surveillance, compensation for the increased risk of contracting diseases, and the imposition of market share liability.

Medical Surveillance 184 In Ayers v. Jackson Township, a case concerning personal injury claims arising out of the operation of a municipal landfill, the New Jersey Supreme Court decided that parties who establish a significant exposure to toxic substances can recover for the cost of required medical surveillance. As the Court phrased it: "the cost of medical surveillance is a compensable item of damages where the proofs demonstrate . . . that such surveillance to monitor the effect of 185 exposure to toxic chemicals is reasonable and necessary." Significantly, while the Ayers decision permitted direct recovery of these expenses by the plaintiffs, the court noted that in future litigation involving public entity defendants: "the use of a

182

183 184 185

M. Dore, Reforming the New Jersey Supreme Court's Procedures for Consolidating Mass Tort Litigation: A Proposal for Disclosing the Rules of the Game, 55 Rutgers L. Rev. 591 (2003). See http://~~~.j~diciary.state.nj.us/rnass-tort/rnasstortsopnonasbestos.pdf (last visited Aug. 3,2006). 106 N.J. 557,525 A.2d 287 (1987).

Id. at 606,525 A.2d at 312. -

New Jersey Environmental Law Handbook h d to administer medical-surveillance payments should be the general rule, in the absence of 186 factors that render it impractical or inappropriate." The employment of such a fund will ensure that medical-surveillance damages will be paid only to compensate for medical examinations and tests actually administered, and will encourage plaintiffs to safeguard their health by not allowing them the option of spending the money for other purposes.

Increased Risk Recovery for increased risk of contracting disease was rejected by the New Jersey Supreme Court in Avers. "The speculative nature of an unquantified enhanced risk claim, the difficulties inherent in adjudicating such claims, and the policies underlying the Tort Claims Act 187 argue persuasively against the recognition of this cause of action." In Avers, however, the defendant was a municipality subject to suit only under the restrictive provisions of the New Jersey Tort Claims Act. The plaintiffs' increased risk claim was rejected in large part because the Torts Claims Act did not contemplate subjecting municipal defendants to new and untested liability exposures. Increased risk claims brought against private parties not entitled to the 188 protections of the Tort Claims Act subsequently have been similarly rejected. Market Share Liability The New Jersey courts have declined to adopt a risk-modified market share approach to determine the collective liability of manufacturers in certain circumstances. In Shackil v. 189 Lederle Laboratories, the Court rejected the market share liability approach established in the 190 context of DES cases, and refused to impose a risk-modified market share liability upon manufacturers of DPT vaccine products. The Court held that the imposition of a theory of collective liability would frustrate overarching public-policy and public-health considerations by threatening the continued availability of needed drugs and impairing the prospects of the development of safer vaccines. The Court did not indicate whether a risk-modified market share approach might be applied in a context other than vaccines.

186

187 188

189 190

Id. at 610,525 A.2d at 314. Id. at 598,525 A.2d at 308. Mauro v. Ravmark Industries, Inc., 116 N.J. 126, 561 A.2d 257 (1989) (claimant must prove that prospective disease is "reasonably likely" to occur); Pollock v. Johns-Manville Sales Corn., 686 F. Supp. 489 (D.N.J. 1988); Vuocolo v. Diamond Shamrock Chemicals Co., 240 N.J. Super. 289, 573 A.2d 196 (App. Div. 1990). 11.6N.J. 155,561 A.2d 51 1 (1989). See, e.g., Sindell v. Abbott Laboratories, 26 Cal.3d 588,607 P.2d 924, cert. denied, 449 U.S. 912, 101 S.Ct.

286,66 L.Ed.2d 140 (1980).

Foundations of New Jersey Environmental Law

It should also be noted that in In re Methyl Tertiary Butyl Ether (MBTE) Products 191 Liability Litigation, a federal district court predicted that the New Jersey Supreme Court would adopt what the district court referred to as the "commingled product" theory of market share liability. In explaining the rationale for and particulars of this liability theory the federal district court stated: When a plaintiff can prove that certain gaseous or liquid products (e.g., gasoline, liquid propane, alcohol) of many suppliers were present in a completely commingled or blended state at the time and place that the risk of harm occurred, and the commingled product caused a single indivisible injury, then each of the products should be deemed to have caused the harm. Under such a theory, defendants would be severally liable because joint and several liability is unjust where 'there [are] so large a number of actors, each of whom contribute[d] a relatively small and insignificant part of the total harm, that the application of the rule [of joint and several liability] may cause disproportionate hardship to defendants.' Damages should be apportioned by proof of a defendant's share of the market at the time a risk of harm was created to a class of potential victims. Finally, a defendant must be able to exculpate itself by proving that its product was not present at the relevant time or in the relevant place, and therefore could not be part of the new commingled or blended product. For this theory to apply, plaintiffs must identify only those defendants whom they believe contributed to the commingled product that caused their injury. Because the conceptual basis is different than traditional market share theory - i.e., that defendants' products were actually present and contributed to the injury - a plaintiff cannot just name all or substantially all of the participants in a particular market and expect defendants to exculpate themselves. Plaintiffs must conduct some investigation so that they can make a good faith identification of the defendants whom they believe caused their injury. It is unnecessary for plaintiffs to name all potential tortfeasors because they should be able to recover damages from any defendant that contributed to the harm, even if a defendant was not responsible for all of it. However, plaintiffs have an incentive to name all potential tortfeasors to maximize recovery as defendants would only be liable for their share of the damages. So long as plaintiffs allege that defendants marketed and sold MTBE-containing gasoline in the relevant zone of injury and defendants products were in a completely commingled state, defendants potentially contributed to plaintiffs' indivisible injury.

191

379 F. Supp. 2d 348 (S.D.N.Y.2005).

New Jersey Environmental Law Handbook

This modification of market share liability is based on two features distinguishable from those instances in which market share liability has been applied. First, because the gaseous or liquid blended product is a new commodity created by commingling the products of various suppliers, the product of each supplier is known to be present. It is also known that the commingled product caused the harm. What is not known is what percentage of each supplier's goods is present in the blended product that caused the harm. In the traditional market share case, whether a defendant's product caused the harm is unknown, but because of the difficulties of proof, all manufacturers present in the market must bear a share of the liability. Since this 'commingled product theory' applies to a specific set of products, it provides some assurance that all defendants found to be liable would have actually caused a plaintiffs losses. Under concert of action, alternative, enterprise, and market share liability theories, one or more of the defendants may not in fact have caused the harm, but they are held liable either because of their own generally tortious conduct (not toward the particular plaintiff), or their inability to exculpate themselves. Second, the harm caused by this commingled product need not have a long latency period prior to the discovery of the harm. While the harm may occur immediately upon contamination, this has no effect on the victim's ability to identify the actual 192 tortfeasor. Whether this theory will, in fact, be adopted by the New Jersey Supreme Court, and whether it will be applied to claims involving alleged contamination by substances other than MTBE remains very much an open question. 2.2.5 Defense Issues Expert Witnesses While the New Jersey courts have been relatively expansive in their acceptance of toxic tort liability claims, a number of lower courts have indicated that the basis for expert testimony supporting such claims will be carefully scrutinized. With respect to expert testimony seeking to demonstrate the causal connection between the plaintiffs physical injuries and their exposure to 193 pharmaceutical products, the courts have made it clear that the qualifications for expert causation testimony will be carefully evaluated. Before such testimony will be admitted, it must be demonstrated that the witness is testifying within the scope of his or her technical or professional competence. The Supreme Court, however, has recognized a broad criteria for allowing expert 194 In Rubanick v. Witco Chemical Corp., the plaintiff sought to testimony in toxic tort cases.

192 193 194

Id. at 377-79. Thompson v. Merrell Dow Pharmaceuticals, Inc., 229 N.J. Super. 230,551 A.2d 177 (App. Div. 1988). Rubanick v. Witco Chemical Corn., 125 N.J. 421,593 A.2d 733 (1991).

Foundations of New Jersey Environmental Law

demonstrate the causal connection between his physical injuries and his exposure to PCBs. When this case reached the New Jersey Supreme Court, the court acknowledged that expert testimony was admitted only when the conclusions reached by the expert were "accepted by at least a substantial minority of the applicable scientific community." The court, however, rejected this general scientific acceptance standard in toxic tort cases in favor of a methodologically based approach. Thus, it held that "in toxic-tort litigation, a scientific theory of causation that has not yet reached general acceptance may be found to be sufficiently reliable if it is based on a sound, adequately-founded scientific methodology involving data and information of the type reasonably relied on by experts in the scientific field." Rubanick was uniquely suited to the resolution of this issue governing the standard for the admissibility of expert testimony. The claimant was a 29 year-old male who had died of colon cancer following his employment at the Witco facility in Perth Arnboy, New Jersey. Plaintiffs expert, a research biochemist who had never personally examined the plaintiff, concluded that the plaintiffs colon cancer had resulted from his work place exposure to PCBs. This testimony was based upon (1) the extremely low incidence of cancer in males under 30; (2) Rubanick's personal history, e.g., his diet, the fact that he was a non-smoker, and that he did not come from a "cancer family" (i.e., a family whose members are at a high risk of cancer due to genetic predisposition to the disease); (3) the fact that five out of 105 employees at Witco developed some kind of cancer during the relevant period; (4) "a very large body of evidence" showing that PCBs produce cancer in laboratory animals; and (5) 13 articles on the effects of exposure to PCBs on animals and human beings that, according to plaintiffs expert, supported the proposition that PCBs are human carcinogens. To counter this testimony, the defendant presented testimony that the premises upon which the plaintiffs expert testimony were based were incorrect; the scientific data relied upon by the plaintiffs expert did not support his conclusions; no substantial portion of the scientific community accepted those conclusions; and the manner in which the plaintiffs expert had utilized the data available to him effectively demonstrated a lack of qualifications to interpret that data. In rebuttal, the plaintiff demonstrated that its expert was experienced in the area of cancer research; was familiar with the particular facts relating to the plaintiffs medical and exposure history; had reviewed, was familiar with, and had relied upon scientific literature dealing with the health effects of PCBs on humans and animals; and that the expert contended that these materials supported his expert conclusion. The New Jersey Supreme Court did not seriously question that the plaintiffs presentation did not meet the traditional "general scientific acceptance" requirements for the presentation of expert testimony. The court, however, focused upon the unique nature of the plaintiff's personal injury claim and the application of this standard to such a claim. The court first explicitly noted

New Jersey Environmental Law Handbook the difficulties of proof facing toxic tort plaintiffs and the court's concern for these difficulties. It pointed to the fact that plaintiffs in toxic tort litigation faced "extraordinary and unique burdens" in seeking to prove causation. In part of the basis of this observation, it then agreed with the Appellate Division that the conventional "general scientific acceptance" test of reliability is too stringent for determining the reliability of expert theories of causation in toxic tort litigation. The court took pains to note that academic commentators agreed that both the delayed effects in toxic tort cases - effects that may not manifest themselves for years after the occurrences of the responsible act or events - as well as the inability of current science to identify precisely the causes of cancer, create the need for a reasonable alternative to the traditional requirement of general acceptance as the primary measure a reliability of scientific knowledge for use in the tort system. It also cited approvingly numerous earlier State and federal cases which had taken a more flexible approach to the admission of causation theories in toxic tort litigation. Those courts looked not to whether the theories had been generally accepted by the scientific community, but rather to whether the scientific theory was sufficiently founded on a sound methodology, leaving the decision to credit the theory to the finder of fact. It should be noted that the Rubanick decision was rendered before the United States Supreme Court addressed the admissibility of expert testimony under the Federal Evidence Rule 195 in Daubert v. Merrell Dow Pharmaceuticals, Inc. Following Daubert, New Jersey continued to focus on whether the expert's opinion is based on sound scientific principles and methodologies of the type reasonably relied upon by experts in the field. Indeed, this method of analysis provided the rationale behind a New Jersey Supreme Court ruling that epidemiological studies relating to causation may provide the basis for an expert's opinion if such studies are soundly 196 and reliably generated and of a type reasonably relied upon by other experts. Procedurally, this reliability issue is addressed through New Jersey Rule of Evidence 104 hearings and the Supreme Court has specifically noted that "in cases in which the scientific reliability of an expert is challenged and the court's ruling on admissibility may be dispositive on the merits, the sounder practice is to afford the proponent of the expert's opinion an opportunity 197 to prove its admissibility at a Rule 104 hearing."

195 196 197

509 U.S. 579,113 S. Ct. 2786 (1993). Landri~anv. Celotex Corp., 127 N.J. 404,605 A.2d 1079 (1992).

Kemt, v. State, 174 N.J. 412 (2002).

Foundations of New Jersey Environmental Law Collateral Estoppel The courts have also shown a sensitivity to other problems associated with certain 198 methods of proving causation in toxic cases. In Zwein bv Zwein v. E.R. Squibb & Sons. Inc. for example, the Appellate Division refused to apply the doctrine of collateral estoppel against the manufacturer in a DES case because, after the original judgment in a foreign jurisdiction, additional scientific evidence absolving the drug of the harmful effects claimed by plaintiff had been developed. State-of-the-Art Defense A significant issue in toxic tort litigation is the availability of the so-called state-of-the-art defense. The state-of-the-art defense for product liability actions was codified in 1987 at N.J.S.A. 2A:58C-3, which states in relevant part: a. In any product liability action against a manufacturer or seller for harm allegedly caused by a product that was designed in a defective manner, the manufacturer or seller shall not be liable if: (1) At the time the product left the control of the manufacturer, there was not a practical and technically feasible alternative design that would have prevented the harm without substantially impairing the reasonably anticipated or intended function of the product; c. No provision of subsection a. of this section is intended to establish any rule, or alter any existing rule, with respect to the burden of proof. 199

In Cavanauh v. Ski1 Corp., the New Jersey Supreme Court held that the defendant must establish the state-of-the-art at the time of distribution and, to overcome what is otherwise an absolute bar to recovery, the plaintiff must prove the product's non-conformity with the feasible technology. The plaintiff also has the burden of showing the defendant's failure to follow a reasonable alternative design. The New Jersey Supreme Court has effectively abolished the defense in the context of asbestos claims based on strict liability, holding that asbestos manufacturers are liable for failure to warn consumers of risks which were scientifically unknown and unknowable at the time of 200 20 1 exposure. This abolition has been specifically limited to strict liability asbestos cases.

198 199 200 201

222 N.J. Super. 306,536 A.2d 1280 (App. Div.), certif. denied, 11 1 N.J. 614,546 A.2d 533 (1988). 64 N.J. 1 ,751 A.2d 518 (2000). Beshada v. Johns-Manville Products COT., 90 N.J. 191,447 A.2d 539 (1982). Feldman v. Lederle Laboratories, 97 N.J. 429,479 A.2d 374 (1984).

New Jersey Environmental Law Handbook Workers' Compensation For the most part, the New Jersey Workers Compensation Act has been found to provide an exclusive remedy for workers injured during the course of their employment. The Act was found not to preclude recovery of compensatory and punitive damages for aggravation of asbestos related conditions resulting fiom an employer's fraudulent concealment of diseases 202 Whether the exclusive discovered by company doctors in corporate physical examinations. remedy of the Workers' Compensation Act will bar toxic tort claims in circumstances where physicians have not deliberately withheld vital health related information, however, has not yet been established. Statute of Limitations In general, the statute of limitations governing toxic tort actions accrues when a plaintiff discovers, or reasonably should have discovered, an injury causally related to some fault of the 203 defendant. In applying the discovery rule to an action brought by a former toxic waste disposal site employee, the New Jersey Supreme Court found that given the inherent difficulty in diagnosing and discovering injuries caused by toxic substances, simple awareness of the injury or symptom is not always sufficient to commence the limitation period. Thus, the Court has held that "before a toxic-tort-case plaintiff may be deemed, in a 'discovery rule' context, to have the requisite state of knowledge that would trigger the running of the statute of limitations his impression of the nature of the injury and of its cause must have some reasonable medical 204 support." SPILL AND RELEASE REPORTING RELEASES TO LAND OR WATER 3.1 The obligation to report spills and discharges into, or which threaten, waters of the State arises under a number of provisions of law. The duty to report a pollution incident, or the discovery of contamination on one's own property, long has been difficult to determine in any particular case because of 'a combination of legal factors, including inartfully drawn statutory requirements and imprecise administrative regulations. For general hazardous substance releases 3.0

202 203 204

Millison v. E.I. du Pont de Nemours, 115 N.J. 252,558 A.2d 461 (1989). Visvisiano v. Ashland Chemical Co., 107 N.J. 416,527 A.2d 66 (1987). Id. at 437, 527 A.2d at 77; see also Lamb v. Global Landfill Reclaiming, 111 N.J. 134, 543 A.2d 443 (1988) (residents exposed to substances fiom a landfill granted leave to file a late New Jersey Tort Claims Act notice of claim on the basis of their efforts to identify the responsible parties and the complex and unusual nature of the toxic tort claims involved); but see Blank v. Citv of Elizabeth, 3 18 N.J. Super. 106, 723A.2d 75 (App. Div. 1999) (noting that Tort Claims Act was amended to permit late notice of claim only upon plaintiffs showing of "sufficient reasons constituting extraordinary circumstances").

Foundations of New Jersey Environmental Law

to land or to water, two interrelated statutes prescribe the appropriate reporting duties and 205 obligations: the Spill Compensation and Control Act ("Spill Acty') and the Hazardous 206 Substance Discharge-Reports and Notice Act ("Discharge Act"). Reporting uncertainty was remedied in large part with the adoption of new reporting regulations which consolidate the reporting obligations under the two primary statutes and necessitate notification of any unpermitted release of a hazardous substance no matter how small. For discharges to surface and groundwater which are in violation of a New Jersey Pollutant Discharge Elimination System (NJPDES) permit, the Water Pollution Control Act ( W P C A imposes ~ affirmative reporting obligations. For leaks and releases from underground 208 storage tanks, the New Jersey Underground Storage of Hazardous Substances Act contains specific statutory and regulatory reporting requirements. 3.1.1 Notice to the NJDEP - The Spill Act Introduction 209 Adopted in 1976, the Spill Act is modeled after Section 31 1 of the Clean Water Act. 210 The Spill Act sets forth the following general prohibition: The discharge of hazardous substances is prohibited. This section shall not apply to discharges of hazardous substances pursuant to and in compliance with the conditions of a Federal or State permit. In the event of a discharge of a hazardous substance, the Act imposes specific reporting obligations on "any person who may be subject to liability for [the] discharge which occurred 21 1 prior to or after the effective date of the Act. . . ." Defmitions Hazardous Substances The Spill Act defines hazardous substances to include "petroleum products" and any 212 other elements and compounds defined by the NJDEP "which shall be consistent to the 205 206

207 208 209 210 211 212

N.J.S.A. 58:lO-23.11, et sea. N.J.S.A. 13:lK-15. N.J.S.A. 58:lOA-1, et seq. N.J.S.A. 58:lOA-21, et sea 33 U.S.C. $1321. N.J.S.A. 58:lO-23.11~. N.J.S.A. 58:lO-23.11e. The list of hazardous substances adopted by the NJDEP includes petroleum and petroleum products, and those substances listed in N.J.A.C. 7:lE, Appendix A.

New Jersey Environmental Law Handbook maximum extent possible with, and which shall include, the list of hazardous substances adopted by [USEPA] pursuant to Section 311 of the [Clean Water Act]; the list of toxic pollutants designated by Congress or the [USEPA] pursuant to Section 307 of that Act; and the list of 213 hazardous substances adopted by [USEPA] pursuant to Section 101 of [CERCLA]."

Discharge 214 The Spill Act defines "discharge" as: [Alny intentional or unintentional action or omission resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, or dumping of hazardous substances into the waters or onto lands of the State or into waters outside the jurisdiction of the State when damage may result to the lands, waters, or natural resources within the jurisdiction of the State.

Waters of the State is statutorily defined to mean all surface water or groundwater, 215 whether natural or artificial, within the boundaries of the state. Amendments to the regulatory definition of "discharge," adopted on September 3, 1991, largely incorporate the statutory definition with important additions. The expanded regulatory definition of "discharge" contained in N.J.A.C. 7: 1E- 1.6 is: Discharge means any intentional or unintentional action or omission, unless pursuant to and in compliance with a valid and effective Federal or State permit, resulting in the releasing, spilling, pumping, pouring, emitting, emptying, or dumping of a hazardous substance into the waters or onto the lands of the State, or into the waters outside the jurisdiction of the State when damage may result to the lands, waters, or natural resources within the jurisdiction of the State. This term does not include "leak." The term "leak" is defined in the regulations to cover the release of hazardous substances in 216 secondarv containment. The use of the term "leak" also is consistent with the NJDEP7s 217 underground storage tank regulations. The regulatory definition furthermore makes it clear that discharges pursuant to a valid NJPDES permit or permit-by-rule do not result in violations of the Spill Act.

213 214 215 216

217

N.J.S.A. 58: 10-23.1lb(k). N.J.S.A. 58:lO-23.1 lb(h). N.J.S.A. 58:lO-23.11b(u). "Leak" or "leakage" is defined as "any escape of a hazardous substance from the ordinary containers employed in the normal course of storage, transfer, processing or use into a secondary containment or diversion system or onto a surface fiom which it is cleaned up and removed prior to its escape into the waters or onto the lands of the State." N.J.A.C. 7: 1E-1.1. N.J.A.C. 7:14B-1, et sea.

Foundations of New Jersey Environmental Law An issue which frequently arose in the past was whether continued leaching from an old 218 release is a current discharge. In 1992, the NJDEP promulgated extensive spill regulations which expressly require the reporting of "ancient spills" and diligent inquiry when a spill is 219 suspected. Who Must Report the Discharge? The original 1976 enactment required that "any person responsible for causing a 220 discharge shall immediately notify the Department." At that time, "discharge" was defined to require a release or threat of release to waters of the State. However, given the absence of any reportable quantity limitation in the statute, or any other & minimis exclusion, the obligation to notify as originally enacted was extremely broad. 22 1 In 1979, the Act was amended. Included among these amendments was the imposition 222 of strict, joint, and several liability for cleanup costs. Additionally, liability was broadened to include those who have discharged hazardous substances as well as persons who are "in any way responsible for any hazardous substance which the Department has removed or is removing. . . 223 ." The New Jersey courts have broadly interpreted this language in defining responsibility for 224 discharges under the Spill Act.

218

219 220

222 223 224

State. Dep't of Environmental Protection v. J.T. Baker, Co., 234 N.J. Super. 234, 244, 560 A.2d 739, 743 (Ch. Div. 1989) (a discharge is a "new release from a contained area and that continued leaching and contamination from pre-enactment discharges does not subject [one] to penalties."); Atlantic Citv Municipal Utilities Authority v. Hunt, 210 N.J. Super. 76, 96, 509 A.2d 225, 235 (App. Div. 1986) (the court held that continuing contamination over years, by leaching, does not constitute a discharge, but that a discharge occurs when there is a "release into the air, water, or land of a hazardous or toxic substance."); Townshiv of South O r a n ~ eVillage v. Hunt, 210 N.J. Super. 407,419, 510 A.2d 62, 68 (App. Div. 1986) (continued seepage •’ram leaking tanks after April 1, 1977 [the effective date of the Spill Act] which contributed to contaminated conditions of wells was a post-Act discharge). N.J.A.C. 7: 1E-5.2. L.1976, c.141, $6, effective April 1, 1977.

Id. •˜8(c). Id. -

See State, Dev't of Environmental Protection v. Ventron Corn., 94 N.J. 473,468 A.2d 150 (1983) (holding that ownership or control over property at the time of discharge of a hazardous substance by another person would "suffice to assert responsibility pursuant to N.J.S.A. 58:lO-23.11g(c)"); Tree Realty. Inc. v. Devartment of Treasury, 205 N.J. Super. 346, 500 A.2d 1075 (App. Div. 1985) ("in any way responsible" language "includes any owner or operator of the property at the time of the unlawful discharge"); State, Dev't of Environmental Protection v. Arlington Warehouse, 203 N.J. Super. 9, 495 A.2d 882 (App. Div. 1985) (the "in any way responsible" language of N.J.S.A. 58:lO-23.1 lg(c) extends liability for a discharge of hazardous substances, due to a warehouse fire, to the manufacturers and owners of chemical products bailed for storage at the warehouse).

New Jersey Environmental Law Handbook

In the 1979 amendments, the discharge reporting obligation was changed to coincide with the expanded liability provision. Instead of reporting being required from any person responsible for causing a discharge, the section was amended to require reporting fiom "[alny person who may be subject to liability for a discharge which occurred prior to or after the effective date of 225 Thus, the Spill Act's current discharge notice requirement is co-extensive with the this [Act]." liability provisions imposing an affirmative reporting obligation on past and present owners and 226 operators. The section presently reads as follows: Any person who may be subject to liability for a discharge which occurred prior to or after the effective date of the Act of which this Act is amendatory [Spill Act's effective date: April 1, 19771 shall immediately notify the department. Failure to so notify shall make persons liable to the penalty provisions of section 22 [N.J.S.A. 58:lO-23.1 lu] of this Act. The September 3, 1991 promulgation of spill-reporting regulations by the NJDEP arguably expands the number of those who must report hazardous discharges to the Department. The phrase "person responsible for a discharge" is specifically defined to include: Any person whose act or omission results or has resulted in a discharge; (1) Each owner or operator of a facility, vehicle or vessel from which a (2) discharge has occurred; Any person who owns or controls any hazardous substance which is (3) discharged; Any person who has directly or indirectly caused a discharge; (4) Any person who has allowed a discharge to occur; or (5) Any person who brokers, generates, or transports the hazardous substance (6) discharged. Furthermore, it is the NJDEP7sintent that the phrase "person responsible for a discharge" as used in the Spill Act be construed as broadly as possible in order to effectuate the general goals of the 227 Act: The Department believes that this definition, as presently worded, will act as an incentive to anyone who handles a hazardous substance to consider those persons he or she deals with and the level of discharge prevention achieved by such person, thus promoting additional discharge prevention efforts. The definition will allow the Department to identify all the persons who may have been involved

225

226 227

N.J.S.A. 58:lO-23.11e. Id.

23 N.J.R. 2669 (September 3, 1991).

Foundations of New Jersey Environmental Law

in causing a discharge and then determine whose act or emission [sic] most directly resulting in the discharge. The NJDEP recognized, however, that the reporting obligation is not necessarily imposed upon all those who might have liability for the discharge, because only those persons who knew or reasonably should have known of a discharge must notify the Department, and only those 228 persons who make the initial notification are required to submit a confirmation report. The September 3, 1991 regulations completely revised the scope of discharges to be reported to the NJDEP. The new regulations discarded the earlier distinction between 229 "discharge" and "spill" and adopted a new distinction between "discharge," which requires reporting, and "leak," which does not. The new regulations also eliminated the concept of '"reportable discharge" that was previously contained in N.J.A.C. 7: 1E-2.1(a). That definition required reporting of hazardous substance discharges only if they were "in such quantity or concentration as may be harmful or which pose a risk of foreseeable harm to public health or welfare, or to natural resources." The new regulations require reporting of discharges in any amount, no matter how large or small. In the preamble to the adoption of these new regulations, NJDEP stated that:230 The definition of "discharge7' is not linked to the quantity of the hazardous substance released. Any quantity of a hazardous substance released to the lands or waters of the State is a discharge, unless the release is to a surface such as concrete from which it can be and is cleaned up or removed before it enters the land or waters of the State. Such a release would be a "leak" which need not be reported. 23 1

In In re Adoption of N.J.A.C. 7:1E, the validity of the Spill Act reporting regulations was challenged as an impermissible expansion on the scope of the Spill Act and as arbitrary and unreasonable. It was argued that the Legislature could not have intended that all discharges of hazardous substances be reported and that reporting a discharge should only be necessary "when damage may result." The Appellate Division disagreed, finding that the NJDEP "discharge"

228 229

230 23 1

Id. at 2670. Prior to the September 3, 1991 amendments, the term "discharge" was defined in the same language as the statute at that time. "Discharge" was specifically contrasted to the definition of "spill," meaning "any escape of hazardous substances fiom the ordinary containers employed in the normal course of storage, transferred, processing or use." A "spill" became a "discharge" only when hazardous substances reached waters of the State or lands from which they might flow or drain into said waters. N.J.A.C. 7:lE-3 (amended). 23 N.J.R. 2706 (September 3,1991). 255 N.J. Super. 469,605 A.2d 733 (App. Div. 1992).

New Jersey Environmental Law Handbook definition comported with the legislative mandate and was "reasonably calculated" to guarantee the Department will be made aware of discharges and able to identifl those persons who may be 232 liable under the Spill Act. Additional challenges claiming that the definitions of the terms "discharge" and "hazardous substance" were void for vagueness, and that the NJDEP's failure to 233

specify a "quantity" of the discharge was unreasonable were also rejected by the court. What Discharges Must Be Reported?

The NJDEP's regulations at N.J.A.C. 7:lE-5.3 provide the reporting procedures required upon the discharge of a hazardous substance. Any person responsible for a discharge who knows or reasonably should know of the discharge must immediatelv notify the NJDEP by telephone at (877) WARN DEP (927-6337) or, if that number is unavailable, the State Police at (609) 882234 2000. The rule establishes a regulatory presumption that notification within 15 minutes of knowledge of the discharge is considered immediate. If the discharge is reported beyond the 15 minute deadline established by the regulations, the person reporting must show by clear and convincing evidence that circumstances justified the delay in reporting and that the discharge 235 was reported as soon as possible or reasonable under the circumstances. The report must provide information concerning the identity of the person reporting, the location of the discharge, the common name and estimated quantity of hazardous substances discharge, when the discharge began, was discovered and ended, the cleanup actions in response to the discharge, and the identity of any person responsible for the discharge. Once the discharge is reported, any person responsible for the discharge is required to take immediate action to stop the discharge and contain, mitigate, clean up, and remove the 236 hazardous substances discharged and coordinate such actions with the NJDEP. Within 30 days after reporting a hazardous substance discharge, the person making the report must submit a

232 233

234 235 236

Id. at 477,605 -

A.2d at 737.

Id. at -

478-79, 605 A.2d at 738-39. It is currently the NJDEP's position that "a spill of gasoline by a homeowner may be reportable, dependent upon the circumstances of the spill. If the spill is onto the lands or waters of the State, it is a discharge and must be reported. If the gasoline spills onto a surface such as concrete, from which it can be cleaned up or removed so it does not enter the lands or waters of the State, it is a leak which need not be reported." 23 N.J.R. 2706. It is unclear whether such an extreme application of the Spill Act reporting obligations will be upheld in court. See In re Adoption of N.J.A.C. 7:1E, sut>ra, 255 N.J. Super. at 481, 605 A.2d at (D'Annunzio, J. concurring) (stating substantial reservations regarding applicability of the Department's regulations to de minimis events). N.J.A.C. 7: 1E-5.3(a). N.J.A.C. 7: 1E-5.6.

N.J.A.C. 7:lE-5.7(a).

Foundations of New Jersey Environmental Law 237

confirmation report. The regulations require that the confirmation report include information identifylng the person who reported the discharge, identifylng the person submitting the confirmation report if different from the one who reported the discharge; information identifylng each owner or operator of the facility, vessel, or vehicle from which the discharge occurred; the source of the discharge; the location of the discharge, the common name and chemical abstract service number of each of the hazardous substances discharged; the estimated quantity; the date and time at which the discharge began, was discovered; ended, and at which notification was provided to NJDEP; a description of measures taken to remediate the discharge; information identifylng those involved in the remediation activities; information describing the sampling and analyses performed relating to the discharge; and a certification of financial responsibility 238 pursuant to N.J.A.C. 7:lE-4.11. The regulations also require that the owner or operator of a "major facility," that is, any facility having a total combined above ground and buried storage capacity of 20,000 gallons or more of hazardous substances other than petroleum products, or 200,000 gallons or more for hazardous substances of all kinds, immediately notify the NJDEP of any malfunction of a discharge detection or other discharge monitoring prevention or safety system or device. Within

2 hours of this initial notification, the owner or operator of a major facility must then notify the NJDEP that: the malfunction has been repaired; an alternative discharge detection system has been activated; or the equipment protected by the discharge detection system has been taken out . 239 of service. The NJDEP has also set forth in the regulations what it considers may be sufficient 240 justification for failure to immediately notify the Department of a discharge. Anyone wishing to establish that a failure to notify immediately was justified must submit a sworn affidavit setting forth the circumstances of the discharge and establishing that "the initiation of 24 1 notification was carried out as soon as possible." Upon submission of the confirmation report, the NJDEP may review a facility's DPCC and DCR plans and require amendments if the 242 Department finds that the plans are inadequate.

N.J.A.C. 7:1E-5.8(a). 238 239 240 241 242

Id. N.J.A.C. 7:lE-5.5. N.J.A.C. 7: 1E-5.6(a). N.J.A.C. 7: 1E-5.6(b). N.J.A.C. 7:1E-5.11.

New Jersey Environmental Law Handbook Penalties NJDEP's regulations at N.J.A.C. 7:lE-6.8(c)5 specify penalty amounts for first, second, and third or more offenses of the notification, response, and reporting regulations. The penalty amounts range from a low of $1,000 to a high of $50,000 and are based on NJDEP's assessment

of which offenses pose the greatest risk to human health or the environment. The lowest amount is for violations such as failure to provide all required information upon notification or in a confirmation report. The higher penalties are for failure to immediately notify the NJDEP of a discharge. For example, a first offense of failure to immediately notify is assessed a penalty of $5,000, the second offense $10,000, and any subsequent offenses $25,000. The Spill Act also provides the Department with the novel enforcement authority that "[all1 conveyances used or intended for use in the willful discharge of any hazardous substance 243 are subject to forfeiture to the State pursuant to [N.J.S.A. 13:lK-1, et seq.1." A "conveyance" 244 is defined to mean "aircraft, vessels, vehicles, other equipment or containers." Departmental Response to a Reported Discharge Pursuant to the Spill Act regulations, the Department may act to contain, clean up, and remove the discharge unless it determines that such action will be done properly and expeditiously by the owner or operator of the facility or source from which the discharge 245 occurred, or by any other authorized person. The person or entity responsible for the discharge is under a specific obligation to attempt to stop the discharge and to take reasonable 246 containment measures to the extent it is capable of doing so. One may take immediate measures to clean up and remove the discharge, but may not apply chemicals without the prior approval of the NJDEP, or the federal on-scene coordinator under the National Contingency Plan, unless such application is necessary to prevent or mitigate a situation that poses a serious 247 and imminent threat to human life. The Department has the statutory authority to order or direct cleanup or removal, and 248 failure to obey a directive subjects the ordered party to treble damages. The NJDEP may in its discretion observe, supervise, or participate in any aspect of containment or cleanup and removal

243 244 245 246

247 248

N.J.S.A.58:lO-23.1 lu(e). N.J.S.A. 13:lK-l(a). N.J.A.C.7: 1E-5.7(~). N.J.A.C.7: 1E-5.7(a). N.J.A.C.7: 1E-5.7(b). N.J.S.A.58:lO-23.1 If.

Foundations of New Jersey Environmental Law activity. The NJDEP also may order any person to cease cleanup and removal activities and other discharge-related operations if it determines that the person is not capable of properly containing, cleaning up, or removing the discharge or if the person fails to conduct cleanup 249 operations in a proper and expeditious manner.

-

3.1.2 Notice to the Community Discharge Act Introduction The 1984 Discharge Act establishes requirements, independent of the Spill Act, for certain industrial establishments to report discharges of hazardous substances to the municipality and local board of health in which the discharging facility operates. 250 The basic reporting obligation requires: An owner or operator of an industrial establishment, or real property which once was the site of an industrial establishment who knows or suspects the occurrence of any hazardous discharge on-site, above, or below ground at the industrial establishment or real property shall, within ten days of obtaining any information leading to this knowledge or suspicion, make an inspection thereof and file a written report concerning this hazardous discharge with the governing body of the municipality in which the industrial establishment or real property is located and the local board of health. Under this provision, real property which previously was the site of an industrial establishment, not just a current industrial establishment, falls within the jurisdiction of the Discharge Act. It is noteworthy that the Act specifically provides that a person reporting a hazardous discharge pursuant to the Report Act will not, by so reporting, incur liability for the 25 1 discharge. Who Must Report the Discharge? The Discharge Act, in many ways, parallels the Spill Act's notice requirements. For 252 example, the definition of "hazardous substance" in the Spill Act is very similar to the 253 Discharge Act's definition. However, unlike the Spill Act, the Discharge Act applies only to owners or operators of "industrial establishments." An industrial establishment is defined to 254 mean: 249 250 25 1 252 253 254

N.J.A.C. 7:lE-5.7(d). N.J.S.A. 13:lK-16(a). N.J.S.A. 13:lK-16(d). N.J.S.A. 58:lO-23.1lb(k). N.J.S.A. 13:lK-15(a). N.J.S.A. 13:lK-15(c).

New Jersey Environmental Law Handbook [Alny place of business engaged in operations which involve the generation, manufacture, refining, transportation, treatment, storage, handling, or disposal of hazardous substances on-site, above or below ground, and having a primary Standard Industrial Classification number within Major Group Numbers 22-39 inclusive, 46-49 inclusive, 51, 55, 75, or 76 as designated in the Standard Industrial Classification manual prepared by the Office of Management and 255 Budget in the Executive Office of the President of the United States.

What Discharges Must Be Reported? The Discharge Act imposes reporting obligations on "[aln owner or operator of an industrial establishment, or real property which was once the site of an industrial establishment who knows or suspects the occurrence o f anv hazardous discharge on site. above or below 256 ground at the industrial establishment." (Emphasis added). The statute further defines the term "hazardous discharge" as any discharge of a hazardous substance which is reportable to the 257 NJDEP pursuant to the Spill Act and the rules and regulations adopted pursuant thereto, "but shall not include a hazardous discharge reported to the Department prior to the effective date of 258 this Act [December 10, 19841." Ostensibly, the Discharge Act requires reporting only discharges where the Spill Act requires reporting, however the standard may be broader, because the specific reference in the reporting provision to"'on-site, above or below ground," and the fact that the Spill Act requires actual knowledge, but the Discharge Act requires only the sus-picion of an occurrence of a reportable discharge. No Departmental guidance is provided regarding the definition of a "suspicions" of a hazardous discharge that would trigger a reporting obligation under the Discharge Act. Reporting Procedures The former reporting obligations of the Discharge Act, contained in N.J.A.C. 7: 1-7, have been repealed and replaced with the regulations contained in N.J.A.C. 7:lE-5. This revision results in a better organized and updated set of regulations, incorporating the legislative amendments to the Spill Act. It also serves to integrate into a single regulatory scheme the

255

256 257 258

On April 9, 1997, the Office of Management and Budget announced its decision to replace the Standard Industrial Classification (SIC) system with the North American Industry Classification System (NAICS). A table comparing the SIC codes retained by the New Jersey statute with the new NAICS codes is available at http://www.census.gov/epcd/naics/naicsfr8_tb2.pdf: N.J.S.A. 13:lK-16(a). N.J.S.A. 13:lK-15(b). Id. -

Foundations of New Jersey Environmental Law

formerly disparate reporting obligations under the Discharge Act and the Spill Act and thus presents the regulated community with a single set of reporting obligations. Any person responsible for a discharge who has notified the NJDEP of a discharge or a discharge detection system malfunction must send the NJDEP a written confirmation report 259 within 30 days of the initial notification. The confirmation report must contain the information specified in N.J.A.C. 7:lE-5.8(b). This ranges from the name, address, and telephone number of the individual who reported the discharge to a description of the type, quantity, location, and date of all samples taken at or around the site of the discharge, whether before, during, or after any containment of removal. 3.1.3 Water Pollution Control Act Reporting Obligations Applicable to All Permits On May 23, 1990, amendments to the WPCA were enacted which included in part, 260 26 1 specific discharge reporting obligations which became effective on July 1, 1991. These obligations require all NJPDES permit holders to report to the NJDEP, or delegated local agency, any exceedance of an effluent limitation that causes injury to persons, or damage to the environment, or poses a threat to human health or the environment. This notification must be 262 made within 2 hours of the occurrence or of the permittee becoming aware of the occurrence. Within 24 hours of an exceedance of an effluent limitation for a toxic pollutant, a permittee must provide the NJDEP, or delegated local agency, with such additional information on the discharge as required by the respective agencies, including an estimate of the environmental danger posed by the discharge, whether the discharge is continuing and remedial measures taken or to be 263 taken. In addition to the foregoing reporting obligation, the WPCA, as amended, requires the permittee to file monthly kports to the NJDEP or designated local agency if (1) in any month it commits a serious violation or fails to submit a completed DMR and does not contest or unsuccessfully contests, the assessment of a civil administrative penalty or (2) exceeds an effluent limitation for the same pollutant at the same discharge of source by any amount for 4 out 264 of 6 consecutive months.

259 260 261 262 263 264

N.J.A.C. 7:lE-5.8(a). N.J.S.A. 58:lOA-6(f)(8).

L. 1990, c.28, 5 3. N.J.S.A. 58: 10A-6(f)(8). Id. -

N.J.S.A. 58:lOA-6(f)(9).

New Jersey Environmental Law Handbook Under the regulations promulgated pursuant to the WPCA, the following events trigger 265 the reporting obligations applicable to all DSW permits: Any exceedance of effluent limitation that causes injury to persons, or (1) damage to the environment; Any exceedance of effluent limitation which would constitute a threat to (2) human health or the environment; Any noncompliancec in violation of an effluent limitation for a toxic (3) pollutant; Any discharge of any toxic or hazardous pollutant listed in N.J.A.C. (4) 7: 14A-4 Appendix. A without a permit; and Any upset, unanticipated bypass, or any anticipated bypass. (5) For the situations identified in 1, 2 or 4, the DSW permittee must contact the NJDEP Hotline at (609) 292-7172 within 2 hours after the commencement of the discharge or of the permittee 266 becoming aware of the discharge. At such time, the permittee must provide the Department with a description of the non-complying discharge, inform it of steps taken to determine the 267 cause of the discharge and to reduce and eliminate the discharge. For the situations identified in 3 or 5 above, the permittee has 24 hours after the commencement of the discharge or the time in which the permittee became aware of the 268 discharge to contact the NJDEP Hotline to provide the following information: A description of the discharge, including the time, location, and volume of (1) the discharge; the concentration of the pollutants discharged; and the receiving water of the discharge; Steps the permittee is taking to determine the cause of the noncompliance; (2) Steps the permittee is taking to reduce and eliminate the noncompliance (3) and any damage to the environment, and the anticipated time frame to initiate and complete the steps to be taken; The duration of the discharge, including the dates and times of the (4) commencement and, for an unanticipated bypass, the dates and times of the end or anticipated end of the discharge, and if the discharge has not been corrected, the

265 266 267 268

N.J.A.C. 7:14A-6.10(a). N.J.A.C.7:14A-6.10(~). Id. -

N.J.A.C.7:14A-3.10(d).

Foundations of New Jersey Environmental Law anticipated time when the permittee will correct the situation and return the discharge to compliance; The cause of the noncompliance; (5) Steps being taken to reduce, eliminate, and prevent reoccurrence of the (6) noncompliance;

An estimate of the threat to human health or the environment posed by the (7) discharge; and The measures the permittee has taken or is taking to remediate the (8) problem and any damage or injury to human health or the environment, and to avoid a repetition of the problem. Five days after the commencement of the discharge or the permittee becoming aware of the discharge, the permittee must submit in writing all the information it had previously provided 269 orally to the Department. Additional written reporting requirements exist for an upset or an 270 unanticipated bypass. In the event of an anticipated bypass, the permittee must provide the following 27 1 information in writing at least ten days, if possible, prior to the date of the anticipated bypass: The exact dates and times of the anticipated commencement and the end (1) of the anticipated bypass; The permittee's rationale as to why the anticipated bypass is necessary; (2) A statement certifying that the permittee will properly operate the facility (3) at the time of the anticipated bypass; and A statement certifying that the anticipated bypass is unavoidable to (4) prevent loss of life, personal injury, or severe property damage, identifying the individual who made this determination for the permittee and the data upon which that individual made the determination. 3.1.4 New Jersey Underground Storage of Hazardous Substances Act New Jersey's underground storage tank (UST) regulations require "any person, including, but not limited to, the owner or operator of an underground storage tank system or [contractor] hired to install, remove, test, or perform a subsurface evaluation on an underground storage tank system" to immediately report a confirmed release to the appropriate local health agency and to

269

270 271

N.J.A.C. 7: 14A-6.10(e)(l). N.J.A.C. 7: 14A-6.10(Q. N.J.A.C. 7:14A-6.10(g).

New Jersey Environmental Law Handbook the NJDEP7sHotline, (877) 927-6337.272 If the discharge is from an underground storage tank system containing hazardous substances other than petroleum or waste oil, then the owner or operator must report such a discharge, over its reportable quantity, to the National Response 273 Center in accordance with 40 C.F.R. $302. The required notification to the NJDEP includes the type and estimated quantity of substance released; the location of the release; remedial action taken; existing case number if a discharge had been reported previously for a separate area of concern; and any other relevant 274 information which the Department may request at the time of the notification. The reporting obligation under this Act is unique in that liability is expanded beyond owners and operators to "any person." In the preamble to the adoption of amendments to the 275 UST regulations in 1990, several comments were received that imposing a reporting requirement on "any person," including a consultant, is inappropriate and imposes a burden on the client relationship. In addition, the concern was expressed that attorneys faced with the 276 reporting regulations may have a problem with the attorneylclient privilege. Despite the concerns raised, the Department took the position, as reflected in the final version of the regulations, that anyone having knowledge of a confirmed release has a responsibility to report that release to the Department for investigation and cleanup. The Department feels that adding contractors to the list of responsible people adds another layer of protection to human health and 277 Therefore, the present reporting obligation under New Jersey's UST the environment. regulations may impose significantly upon the attorney-client and consultant-client relations. 3.2 RELEASES TO THE ATMOSPHERE 3.2.1 Air Pollution Control Act 278 The Air Pollution Control Act (APCA) provides that: 272 273 274 275 276 277 278

N.J.A.C. 7:14B-7.3(a). N.J.A.C. 7:14B-7.3(e). N.J.A.C. 7:14B-7.3(b)(l) to (5).

See 22 N.J.R. 2758 (September 4,1990). Id. at 278 1. Id. N.J.S.A. 26:2C-19(e). The APCA provides that any person who violates the act or any code, rule, regulation promulgated or issued pursuant thereto "shall be liable to a civil administrative penalty of not more than $10,000 for the first offense, not more than $25,000 for the second offense, and not more than $50,000 for the third and each subsequent offense. If the violation is of a continuing nature, each day during which it continues ... constitutes an additional, separate and distinct offense." N.J.S.A. 26:2C-19(b). In addition, any person who "purposely or knowingly" violates the Act is guilty of a crime of the third degree, N.J.S.A. 26:2C-19(f)(l), and any reckless violation constitutes a crime of the fourth degree.

Foundations of New Jersey Environmental Law A person who causes a release of air contaminants in a quantity or concentration which poses a potential threat to public health, welfare or the environment or which might reasonably result in citizen complaints shall immediately notify the department. A person who fails to so notify the department is liable to the penalties and procedures prescribed in this section [N.J.S.A. 26326-191. The NJDEP has not promulgated any implementing regulations with respect to this section. In order to determine whether a release is reportable, a threshold determination must be made as to whether the released substance is an "air contaminant." The term "air contaminant" 279 280 is not defined in the statute. However, APCA does define "air pollution" to mean: the presence in the outdoor atmosphere of one or more air contaminants in such quantities and duration as are, or tend to be, injurious to human health or welfare, animal, plant-life or property, or would unreasonably interfere with the enjoyment of life or property throughout the state and in such territories of the state as shall be affected thereby and excludes all aspects of employer-employee relationship as to health and safety hazards. Arguably an "air contaminant" is anything potentially capable of causing "air pollution." Hence the relevant inquiry is not the nature of the substances emitted, but whether they were emitted in sufficient quantity as to constitute a "potential threat to public health, welfare, or the environment," or perhaps more significantly, to be likely to be detected by citizens and complained about. Sometimes a release occurs within the workplace which, under normal air exchange, must necessarily release some substance into the atmosphere. Arguably, one does not have an obligation to notify the Department of a release in the workplace since the Act specifically excludes fiom its purview all aspects of employer-employee health safety regulations. However, the Department has generally been of the view that the facility must make a factual determination as to whether the contamination was released into the outdoor atmosphere in such quantities and duration which may be injurious to human health or welfare. One would then have to be prepared to defend a decision not to report on the basis that the amount released was so minute that it did not present a potential health or environmental threat. N.J.S.A. 26:2C-19(f)(2). The meaning of the term "immediately" was addressed by the New Jersey Supreme Court in New Jersev Department of Environmental Protection v. Alden Leeds. Inc., 153 N.J. 272, 708 A.2d 1161 (1998). 279

280

Although no regulations have been promulgated with respect to the notification provision, the NJDEP has adopted regulations which set forth standards for particle emissions fiom various sources. For example, Subchapter 6 of the regulations sets forth standards for the emission of particles from manufacturing processes. See N.J.A.C. 7:27-6.1, et sea Pursuant to this subchapter, the term air contaminant is defined as "solid particles, liquid particles, vapors or gases which are discharged into the outdoor atmosphere." N.J.A.C. 7:27-6.1. N.J.S.A. 26:2C-2.

New Jersey Environmental Law Handbook 3.2.2 Toxic Catastrophe Prevention Act Introduction The Toxic Catastrophe Prevention Act (TCPA) was enacted for the express purpose of protecting the public from catastrophic accidents from chemical releases of Extraordinary

Hazardous Substances (EHS) to the environment. This is accomplished by anticipating the circumstances that could result in such releases and requiring precautionary and preemptive 28 1 actions to prevent such releases. Who Must Report? In order to achieve the act's express purposes, the NJDEP promulgated regulations establishing an EHS list and a registration quantity for each EHS, which are used to determine 282 facilities subject to the TCPA program. Any facility which at any one time handles, uses, manufactures, or stores an EHS in a quantity equal or greater than the registration quantity or which has the capacity to generate the registration quantity of an EHS in 1 hour is subject to the TCPA.~'~ Reporting Procedures The regulations require owners and operators, who are subject to TCPA, to prepare an 284 emergency response program. This program requires, in part, a description of the site's 285 This emergency notification program must include the emergency notification system. 286 following requirements: Immediate notification to the Department's emergency communications center at (i) (877) WARN DEP (927-6337) by the emergency coordinator or designee of an EHS accident or imminent EHS accident at the stationary source. The notification shall include the following information: Company name and address of the EHS accident; (1) The name, position, and telephone number of caller; (2) 28 1 282 283

N.J.A.C. 7:31-1.3(a). N.J.A.C. 7:31-1.3(b)(l). This list can be found at N.J.A.C. 7:31-6.3(a). N.J.A.C. 7:31-2.1 This subchapter incorporates by reference Federal Hazard Assessment regulations found at 40 C.F.R. Part 68, Subpart B. A useful reference for evaluating the regulations applicable to this statute is the NJDEP's December 19, 2000 Bureau of Chemical Release Information and Prevention, N.J.A.C. 7:31 Consolidated Rule Document which combines the New Jersey rules with the adopted text of the federal Accident Release Prevention rules of 40 C.F.R. Part 68. ,

284 285

286

See N.J.A.C. 7:31-1.1. This subchapter incorporatesby reference 40 C.F.R. Part 68, Subpart A. N.J.A.C. 7:31-5.2(b)(4). Id. -

Foundations of New Jersey Environmental Law

(3) duration;

The time of, or anticipated time, of the EHS accident and the projected

The chemical name of the EHS released; The actual EHS quantity or, if not know, the estimated EHS quantity and (5) whether it will have an offsite impact; and Weather conditions, including wind direction and speed and expected (6) offsite effects, if any; The emergency coordinator or designee for the stationary source shall be prepared (ii) to provide the Department's emergency communications center updates, if requested, which shall include the following information: The name and address of stationary source of the EHS accident; (1) (2) The name, position, and telephone number of caller; The location of the point of EHS release, a description of the source, cause (3) and type of EHS accident, quantity and concentration of the EHS released, and whether the EHS release is of a continuing nature; (4) The measures taken to terminate the EHS release or to mitigate its effect, and the effectiveness of such measures; and An update on weather conditions. (5) (4)

CHAPTER I1 HAZARDOUS AND TOXIC SUBSTANCES 1.0

NEW JERSEY HAZARDOUS AND TOXIC SUBSTANCES CONTROL PROGRAM 1.1 PROGRAMS COORDINATED The control and cleanup of hazardous substances in New Jersey is governed by a group of complementary regulatory schemes. The keystone statute, The Spill Compensation and 287 288 Control Act (the "Spill Act"), New Jersey's counterpart to the federal superfund law, establishes a comprehensive fiamework for the prevention and remediation of contamination. The Spill Act seeks to prevent contamination by an absolute prohibition on the discharge of hazardous substances. The Act provides for the remediation of contaminated sites by imposing liability for the cleanup of these sites upon any responsible party and by establishing a fund to cover cleanup costs at sites where the liable parties are unknown, insolvent or unwilling to fund the cleanup. For a more extensive examination of the Spill Act see Section 2.0, infra. The Spill Act also governs the bulk storage of petroleum and other hazardous 289 substances. The underground storage of petroleum or other hazardous substances is governed 290 by the New Jersey Underground Storage of Hazardous Substances Act, which is patterned 29 1 after the federal underground storage tank program. 292 A second key statute, the Industrial Site Recovery Act (ISRA), seeks to ensure that industrial sites throughout the State will not be abandoned or sold in a contaminated condition. ISRA requires owners and operators of industrial establishments that use hazardous substances to investigate the environmental condition of their property and to develop a cleanup plan as a 293 condition of the business or real property being closed, sold, or transferred.

287 288

289 290 291

292 293

N.J.S.A. 58:lO-23.11, et sea. The Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. (39601,et seq N.J.S.A. 58:lO-23.11a; N.J.A.C. 7:lE-4, et seq. N.J.S.A. 58:lOA-21, et sea. See Resource Conservation and Recovery Act, 42 U.S.C. (346991-6991i (Subchapter IX - Regulation of Underground Storage Tanks).

N.J.S.A. 13:lK-6, et sea See Chapter 111, Section 1 for a detailed discussion of the ISRA program.

Hazardous and Toxic Substances 294

The third statute, the Toxic catastrophe Prevention Act (TCPA), is designed to prevent catastrophic environmental occurrences from unexpected accidental releases of extraordinarily hazardous substances. The Act requires facilities that handle acutely toxic chemicals to anticipate the numerous circumstances that could give rise to an accidental chemical release and to have in place programs and procedures to avoid such an occurrence or to respond appropriately in the event of one. See Section 6 of this Chapter for a detailed analysis. 1.2 ORGANIZATION AND ADMINISTRATION The NJDEP administers all hazardous substance control programs. As a general practice, rather than assigning an entire statutory program to a single division or bureau, the Department divides authority over discrete portions of each of these programs among various elements, divisions, and bureaus according to their function and area of expertise. Thus, whereas the Division of Air Quality within the Department of Environmental Regulation has primary 295 authority for developing and implementing the Air Pollution Control Act ("APCA"), the Bureau of Air Compliance and Enforcement within the Department of Compliance and Enforcement, issues all formal enforcement actions pursuant to the APCA. This division of authority often leads to confusion, both to the public and the Department itself, as to which bureau may appropriately be addressed to resolve any inquiries or problems. The best source of information regarding the division of authority within the NJDEP is the Department's website site at www.ni.nov/dep. Of primary concern to the regulated community are the following NJDEP departments: Compliance and Enforcement; Environmental Regulation; Office of Policy, Planning, and Science; and Site Remediation Program. The Department of Compliance and Enforcement is charged with enforcing all laws and regulations with regard to water and coastal resources; hazardous waste, solid waste, pesticide control; and air pollution control. This extends to the inspection of facilities, investigation of complaints, and by means of administrative and enforcement actions, the correction of instances of non-compliance. The consolidation of virtually all enforcement action within a single department is designed to assure a consistent enforcement policy throughout the NJDEP. The department of Enforcement Policy is split into the following five main elements: Air Compliance and Enforcement; Bureau of Enforcement and Compliance Services; County Environmental and Waste Enforcement; Pesticide Control Coastal and Land Use Enforcement; and Water Compliance and Enforcement.

294

295

N.J.S.A. 13:lK-19, et sea. N.J.S.A. 26:2C-1, et sea.

New Jersey Environmental Law Handbook The Department of Environmental Regulation implements most of the "nuts and bolts" of the regulatory programs concerning environmental media. The bureaus within the Division of Water Quality issue all NJPDES permits for discharges fi-om industrial wastewater treatment facilities to surface water, industrial discharges to municipal facilities, and discharges to groundwater from operating municipal and industrial treatment systems. Other elements within Environmental Regulation include the Division of Air Quality Regulation, which deals with air quality planning and permitting and the Division of Environmental Safety and Health, which deals with quality assurance, pollution, and right-to-know issues. The Office of Policy, Planning, and Science is divided into several elements which provide scientific and technical information to the Department, such as the Division of Science, Research, and Technology and the Division of Coastal Management Program. The Environmental Justice Program is also within this Department. Lastly, the Site Remediation Program is responsible for implementing cleanup plans at sites being remediated with public funds as well as overseeing the cleanup of contaminated sites conducted by responsible parties. Implementation of ISRA and Underground Storage of Hazardous Substances Act is under the authority of the Industrial Site Evaluation Element within this department. The Bureau of Emergency Response, within the Discharge Response Element is charged with managing departmental activities related to chemical and emergencies, including taking publicly funded actions to mitigate emergencies. Moreover, elements within the Program are responsible for the development and issuance of all permits regulating the treatment, storage, and disposal of hazardous waste.

THE SPILL COMPENSATION AND CONTROL ACT [NEW JERSEY'S SUPERFUND PROGRAM] 2.1 RELATIONSHIP TO FEDERAL PROGRAM 296 New Jersey's Spill Compensation and Control Act (Spill Act) was adopted in 1976, predating the federal Comprehensive Environmental Response, Compensation, and Liability Act 297 The Act, originally adopted in response to the anticipated development of oil (CERCLA). 298 reserves off the New Jersey coast and the expected impact on coastal resources, was modeled 299 after Section 3 11 of the federal Clean Water Act. In later years, the Spill Act was amended to 2.0

296

N.J.S.A. 58:10-23.11 g t a.

297

42 U.S.C. $5 9601-9675.

298 299

L.1976, c.141, $1. Federal Water Pollution Control Act, 33 U.S.C. $3 1251-1387

Hazardous and Toxic Substances address other hazardous substance concerns. In 1979, a series of substantive amendments were adopted in anticipation of a federal Superfund law. In 1992, the statute was once again amended to address certain liability issues. The Legislature enacted minor amendments in 1995 and 1996, and major changes in 1997, through the Brownfield and Contaminated Site Remediation Act, which became effective January 6, 1998. Further amendments passed in 2004, 2005, and 2006. Today the Spill Act serves as the legal foundation of New Jersey's State Superfund Program.

2.2 THE SPILL COMPENSATION AND CONTROL ACT 2.2.1 Statutory Overview and History The Spill Act establishes a comprehensive framework for the prevention and remediation of hazardous substance contamination. The Act sets forth an absolute prohibition on the discharge of hazardous substances, except for those discharges "pursuant to and in compliance with the conditions of a Federal or State permit or to any discharge of petroleum to the surface waters of the State that occurs as a result of the process of recovering, containing, cleaning up, or removing a discharge of petroleum . . . undertaken in compliance with the instructions of a 300 federal on-scene coordinator or the [DEP] commissioner's designee." The Act provides for the 30 1 cleanup of spills of hazardous substances, and imposes a tax on specified transfers of certain hazardous substances in order to create a fund for the costs of identifying and remediating 302 Further, the Spill Act imposes strict and joint and several liability, without hazardous spills. regard to fault, for all of the Department's cleanup and removal costs against "[alny person who has discharged a hazardous substance, or is in any way responsible for any hazardous substance" 303 which the Department has remediated pursuant to the Act. To help in the recovery of the costs of removal, the Spill Act provides that any expenditures made by the Spill Fund Administrator pursuant to the Act shall constitute a "debt of the discharger to the fund. [Such a] debt constitutes a lien on all property owned by the discharger when a notice of lien . . . is duly filed with the clerk of the Superior Court." A notice of lien "which affects the property of a discharger subject to the cleanup and removal of a discharge shall create a lien with priority over all other claims or liens which are or have been filed against the property, except if the property consists 304 of six dwelling units or less and is used exclusively for residential purposes."

300 301 302 303 304

N.J.S.A. 58:lO-23.11~. N.J.S.A. 58:lO-23.1 If. N.J.S.A. 58:lO-23.11h. N.J.S.A. 58:lO-23.1lg(c). N.J.S.A. 58:lO-23.11f(f).

New Jersey Environmental Law Handbook Scope of Liability The Spill Act categorically prohibits the discharge of hazardous substances; the sole exceptions are for discharges pursuant to and in compliance with federal or State permits or for petroleum discharges as part of a remediation performed under the instruction of a federal on-

scene coordinator or NJDEP representative. When the NJDEP or private parties conduct a cleanup, they may obtain cost reimbursement or contribution for their expenses fiom responsible 305 Those liable for cleanup cost reimbursement include the discharger and any "other parties. person in any way responsible for any hazardous substance" which the Department has removed 306 or is removing pursuant to the Act. Moreover, the liability provision expressly makes dischargers liable, all jointly and severally, without regard to fault, for all cleanup and removal 307 costs. The Spill Act also gives the Department the discretion either to remove the discharged 308 hazardous substance itself or to issue a Directive against the discharger for the removal: Whenever any hazardous substance is discharged, the [Dlepartment may, in its discretion, act to clean up and remove or arrange for the cleanup and removal of such discharge or may direct the discharger to clean up and remove, or arrange for the cleanup and removal of, such discharge.... Any discharger who fails to comply with such a directive shall be liable to the department in an amount equal to three times the cost of such cleanup and removal. (See discussion infka regarding directive enforcement authority). 309 Courts have not hesitated to interpret liberally the phrase "in any way responsible." In 310 the seminal decision State, Department of Environmental Protection v. Ventron Corp., the Court found the parent corporation that "controlled" a subsidiary that caused contamination to be a person "in any way responsible," notwithstanding insufficient evidence to establish a piercing of the corporate veil under ordinary corporate law principles. In State, Department of 311 Environmental Protection v. Arlington Warehouse, a fire destroyed a warehouse in which chemical products were stored. The court found that the bailors of the stored chemical products 305 306 307 308 309 310 311

N.J.S.A. 58:lO-23.11f(a)(l), (2). N.J.S.A. 58:10-23.1lg(c) (emphasis added). N.J.S.A. 58:lO-23.1lg(c). N.J.S.A. 58:lO-23.11f(a)(l). The Act provides that it "be liberally construed to effect its purposes." N.J.S.A. 58:lO-23.11~. 94 N.J. 473,468 A.2d 150 (1983). 203 N.J. Super. 9,495 A.2d 882 (App. Div. 1985).

Hazardous and Toxic Substances were persons "in any way responsible" pursuant to the Spill Act. In Tree Realty, Inc., v. 312 Devarhnent of Treasurv, the lessee of real property operated a solid waste facility in such a way that clean up of the site was a necessity. The court found that the lessor of the property at the time of the discharge was a person "in any way responsible" for the discharge. In examining liability under the Act, the court in The Matter of Kimber Petroleum, citing to Ventron, stated that the reach of the Spill Act is broad enough that "[a] party even remotely responsible for 313

In Marsh v. Dept. of Envir. Protection, the New Jersey Supreme Court held that a current owner of property containing underground storage tanks that continued to leak was a responsible person under the 314 Spill Act. Liability existed even though the current owner never used the underground tanks. On the other hand, in White Oak Funding;, Inc. v. Winning, 341 N.J. Super. 294, 775 A.2d 222 (App. Div. 2001), certif. denied 170 N.J. 209 (2001), a "sandwiched" owner, who owned the site after it was contaminated, had no knowledge of the contamination, and sold the site before the contamination was discovered, was found not liable. The Spill Act provides few defenses to liability and some explicit safe harbor protection fiom liability. A person has a defense to liability if the discharge was caused solely by war, 315 sabotage, or God, or a combination thereof. There are also defenses available to those who bought property on or after September 14, 1993, who meet certain conditions, or to those who bought property prior to September 14, 1993, who meet certain conditions, or those who bought property after the effective date of the Brownfield and Contaminated Site Remediation Act who meet certain conditions, secured creditors who meet certain conditions (see discussion in Section 2.2.2 below and Chapter 111, Section 2.2.1), and trusts. 2.2.2 Brownfield and Contaminated Site Remediation Act Amendments in 1993, in the Brownfield and Contaminated Site Remediation Act, and in 2002 have provided certain persons with defenses to Spill Act liability if they can meet some rigorous conditions. If a person who purchased real property on or after September 14, 1993, can establish the following elements, that person is "not liable for cleanup and removal costs or damages to the State or any other person for the discharged hazardous substance pursuant to [the Spill Act] or pursuant to civil common law." To obtain this defense fiom liability, the person

causing contamination will be deemed a responsible party under the Act."

312 313

314 315

205 N.J. Super. 346,500 A.2d 1075 (App. Div. 1985). 110 N.J. 69, 85, 539 A.2d 1181, 1189 (1988). See & Prospect Indust. Corn. v. Singer Co., 238 N.J. Super. 394,569 A.2d 908 (Law Div. 1989). 152 N.J. 137,703 A.2d 927 (1997). N.J.S.A. 58:lO-23g(d)(l).

New Jersey Environmental Law Handbook

must show: (1) the person acquired the property after the discharge of the hazardous substance 316 at the real property; (2) the person did not know and had no reason to know of the discharge or the person acquired the real property by devise or succession (and will use for remediation any other h d s devised to the person from the deceased who is responsible for the discharge), the person complies with provision 5 below; (3) the person is not the discharger or is not responsible for the discharge and is not a corporate successor to the discharger or person responsible for the discharge; and (4) the person gave notice of the discharge to NJDEP upon actual discovery of the discharge. (5) If the person knows of a discharge before purchasing, the person can still avoid certain Spill Act liability if they (a) acquired the property after the discharge; (b) discovered the discharge at the time of acquisition as part of conducting an appropriate inquiry into environmental conditions; (c) either performed remediation or relied on a no-further-action letter or complied with a Department-approved remedial action workplan; and (d) established and maintained all engineering and institutional controls required. A person seeking relief from liability under condition 5(a) through (d) above, gets limited liability protection from additional liability for discharges on the site before acquisition not discovered as part of the appropriate 317 inquiry and for any remediation required because of a change in a remediation standard. A discussion of the liability provisions of the Brownfield and Contaminated Site Remediation Act is found in Chapter 111, Section 2.2.1. The liability defenses contained in the 1993 Amendments and the Brownfield and Contaminated Site Remediation Act do not eliminate liability for discharges that occur afier the person acquired the site, for negligent acts that aggravate or contribute to harm of any person, or for failure to maintain institutional or engineering control, and for failure to comply in the future 318 with laws and regulations. Prior to 1991, the Spill Act had been held not to create a private cause of action for clean 319 320 up, and an aggrieved party could not compel the Department to take action under the Act. However, the Spill Act was amended in 1991 to expressly provide a statutory cause of action for

316

317 318 319

320

The Act requires that the person undertook at acquisition all appropriate inquiry into the previous ownership and history of the property by performing a preliminary assessment, and, if necessary, a site investigation. N.J.S.A. 58: 10-23.11g(d)(2). N.J.S.A. 58:lO-23.11g(d)(2). N.J.S.A. 58:lO-23.118. Jersey City Redevelopment Authoritv v. PPG Industries, 655 F.Supp. 1257, 1262-63 (D.N.J. 1987); T&E Industries, Inc. v. Safetv Light Corn., 680 F.Supp. 696 (D.N.J. 1988); Allied Corn. v. Frola, 701 F.Supp. 1084 (D.N.J. 1988). Superior Air Products Co. v. NL Industries. Inc., 216 N.J. Super. 46,522 A.2d 1025 (App. Div. 1987).

Hazardous and Toxic Substances 321

contribution for private parties. Any person, including a discharger, who "cleans up and removes a discharge of a hazardous substance" has a "right of contribution against all other dischargers and persons in any way responsible . . . who are liable for the cost of the cleanup and 322 removal." Contribution defendants can avoid liability only by showing an intervening act of 323 war, sabotage, or act of God. Otherwise, courts may "allocate the costs of cleanup and removal among liable parties using such equitable factors as the court determines are 324 appropriate." In the Brownfield and Contaminated Site Remediation Act, the Legislature amended the Spill Act's unique provision permitting private parties to assert claims for treble damages. The amendment eliminated the need for the NJDEP to determine that the action will expedite clean up and is in the public interest. Now a contribution plaintiff may be awarded treble damages where: (1) the contribution defendant was named on a Spill Act directive, failed to comply and is liable for contribution; (2) the contribution defendant received 30 days notice of the intent to seek treble damages and opportunity to participate in clean up; (3) the contribution defendant failed to enter a settlement agreement with plaintiff; and (4) the plaintiff entered into an agreement with NJDEP to remediate the site. The contribution defendant can avoid treble damages if it failed to enter into a settlement agreement for good cause or based on fundamental 325 fairness. If recovered, one third of the treble damages are deposited into the Spill Fund; the 326 remainder is to be apportioned among private parties participating in the remediation. The Brownfield and Contaminated Site Remediation Act also addressed the finality from liability of liable parties and subsequent owners of once contaminated property arising from successful completion of a remediation. After January 16, 1998, whenever the Department issues a no-fwrther-action letter it must also issue a covenant to sue. The covenant releases the person, unless they have Spill Act liability, from all civil liability to the State for cleanup and removal costs. The covenant applies to all successors in ownership of the property and all lessees and operators on the property. If the no-further-action letter is conditional, the covenant not to sue is binding only so long as the conditions contained in the no-further-action letter are

321 322 323 324 325 326

L.1991, c.372, effective January 10, 1992. N.J.S.A. 58: 10-23.1 1f(a)(2). N.J.S.A. 58:lO-23.11f(a)(2) to -23.1 1g. N.J.S.A. 58:lO-23.11f(a)(2). N.J.S.A. 58:lO-23.11f(a)(3). N.J.S.A. 58:lO-23.11f(a)(3).

New Jersey Environmental Law Handbook complied with. The covenant does no apply to any new discharges occurring after the no327 further-action letter and covenant issue. These statutory provisions also contain a section authorizing a court proceeding to obtain 328 access and an administrative proceeding for dispute resolution of remediation decisions. A court can order access under reasonable conditions for any person performing a remediation of the property under a Department oversight document or a remediation obligation pursuant to law.

The Fund: Cleanup and Victim's Compensation 329 The Spill Act created a nonlapsing, revolving fund to carry out the act's purposes. The Fund is supported by a complex "transfer" tax on "major facilities," taxing the first receipt by a so-called major facility in New Jersey of a taxable hazardous substance (including petroleum and 330 petroleum products). From its inception the Fund was to be used for two essential purposes: 1) to defray the cost of cleanup of hazardous substance discharges undertaken by the Department; and 2) to 33 1 compensate the "victims" of such discharges. This dual purpose makes the Fund itself liable. "The fund shall be strictly liable, without regard to fault, for all cleanup and removal costs and 332 for all direct and indirect damages no matter by whom sustained, including but not limited to: The cost of restoring, repairing, or replacing any real or personal property (1) damaged or destroyed by a discharge, 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 discharge by comparison with its value prior thereto; The cost of restoration and replacement, where possible, of any natural (2) resource damaged or destroyed by a discharge; Loss of income or impairment of earning capacity due to damage to real or (3) personal property, including natural resources destroyed or damaged by a discharge;

327 328 329 330

331 332

N.J.S.A. 58:lOB-13.1. N.J.S.A. 58:lOB-16 to -17 N.J.S.A. 58:lO-23.11i. N.J.S.A. 58:lO-23.11h. The tax, insofar as it was to be used to defiay expenses that could also be paid under CERCLA, was held to be preempted by $1 14(c) of CERCLA. Exxon Corp. v. Hunt, 475 U.S. 355, 106 S.Ct. 1103, 89 L.Ed.2d 364 (1986). However the 1986 amendments to CERCLA deleted $1 14(c), so that the tax is once again wholly valid. N.J.S.A. 58:lO-23.118. N.J.S.A. 58:lO-23.1 lg(a).

Hazardous and Toxic Substances provided that such loss or impairment exceeds 10 percent of the amount which claimant derives, based upon income or business records, exclusive of other sources of income from activities related to the particular real or personal property or natural resources damaged or destroyed by such discharge during the week, month, or year for which the claim is filed; Loss of tax revenue by the State or local governments for a period of 1

(4)

year due to damage to real or personal property proximately resulting fiom a 333

discharge;

and Interest on loans obtained or other obligations incurred by a claimant for

(5) the purpose of ameliorating the adverse effects of a discharge pending the payment of a claim in full as provided by this act." "Cleanup and removal costs," for which the Fund is liable, are "all costs associated with a discharge incurred by the State or its political subdivisions or their agents or any person with written approval fiom the department. . . ." The NJDEP is authorized to draw upon the Fund whenever it "acts to clean up and remove a discharge or contracts to secure prospective cleanup 334 and removal services." However, responsible parties, i.e., the discharger, or any person 335 responsible for a discharge, may not claim against the Fund. As originally enacted, the retroactivity of the liability and Fund-financing authority provisions was much in doubt. Subsequent amendments and judicial decisions have clarified the situation as follows: There is strict liability for a discharger under the Act regardless of the date (1) 336 of the discharge; Private or public claimants for property or economic damage - as distinct (2) fiom cleanup and removal costs - may claim against the Fund only for discharges after 337 Jan. 1977; 333

334

335

336

337

See Citv of Newark v. Block 1183, Lots 11 & 12, 223 N.J. Super. 10, 537 A.2d 1311 (App. Div. 1988). The court held that even though a State or local government could make a claim against the fund for a loss of tax revenue, it does not imply that there is an automatic abatement of taxes during the NJDEP's cleanup of a site, and the proper way for the taxpayer to seek tax relief is through reassessment. N.J.S.A. 58:lO-23.1lf(a). Tree Realtv. Inc. v. N.J. Dev't of Treasury, 205 N.J. Super. 346, 348-49, 500 A.2d 1075, 1076 (App. Div. 1985). State v. Ventron, 182 N.J. Super. 210,440 A.2d 455 (App. Div. 1981), affd as modified, 94 N.J. 473,468 A.2d 150 (1983). Atlantic Citv Mun. Utilities Authoritv v. Hunt, 210 N.J. Super 76, 509 A.2d 225 (App. Div. 1986); Township of South Oran~eVillage v. Hunt, 210 N.J. Super. 407,510 A.2d 62 (App. Div. 1986).

New Jersey Environmental Law Handbook The Fund may be used by the Department, but not by private parties, for (3) 338 cleanup of pre-1977 discharges. The limitations distinguishing pre- and post-1 977 339 discharges as far as the Department's "call" on the Fund, are as follows: The Act provides requirements for general fund (a) availability and certain additional limitations on the Fund balance which are more stringent for pre-1977 than for post-1977 discharges; The administrator may only approve and make (b) payments for any cleanup and removal costs incurred by the department for the removal of a hazardous substance discharge prior to the effective date of P.L. 1976, c. 141 [Jan. 23, 19771...if, and to the extent that, he determines that adequate funds fiom other sources are not or will not be available; (c) a monetary cap for any 1-year period of $18,000,000 total or $3 million for any discharge or related series of discharges that occurred pre-1977. The Fund is not available to pay as damages claims for emotional distress, (4) enhanced risk of disease, loss of enjoyment of property, and other economic and financial 340 harm; The Fund is not available to pay as direct or indirect damages counsel fees (5) incurred preparing and presenting and litigating claim for reimbursement fiom the 341 Fund; While the Fund itself has limited money and limits on its use, the authority of the NJDEP to respond to a hazardous substance release is not limited by the use of available fund moneys. Accordingly, the NJDEP often uses moneys fiom other programs - general revenue committed by budget and proceeds of recent bond acts -to fund cleanups.

338

339 340 341

This last provision was the subject of the extensive 1979 amendments. L.1979, c.346. As originally amended in 1979, the Fund could be used for a pre-1977 discharge "if such discharge poses a substantial risk of material damage to the public health or safety or current and severe damage to the environment." N.J.S.A. 58:lO-23.11f(b)(3). By further amendment, the quoted limitation was deleted. L.1984, c.142. N.J.S.A. 58:lO-23.11f(d). Bahle v. Exxon Corn., 279 N.J. Super. 5 (App. Div. 1995), affd, 145 N.J. 144 (1996). In re Thomas, 278 N.J. Super. 580 (App. Div. 1995), certif. denied, 141 N.J. 95 (1995).

Hazardous and Toxic Substances

2.2.3 Enforcement The Directive The Spill Act provides that342

[wlhenever any hazardous substance is discharged, the [Dlepartment may, in its discretion, act to clean up and remove or arrange for the clean up and removal of the discharge or may direct the discharger to cleanup and remove, or arrange for the cleanup and removal of the discharge. . . . The [Dlepartment may monitor the discharger's compliance with any such directive. Any discharger who fails to comply with such a directive shall be liable to the [Dlepartment in an amount equal to three times the cost of such cleanup and removal. . . ." The directive authority is the Department's favored mechanism to compel cleanup. The & terrorem effect of the treble damages consequences of non-compliance with a Spill Act directive and the "superlien" are not to be underestimated. The Department may also use the directive authority to perfect a claim for treble damages in a situation in which it has no real expectation of performance by the discharger. The first challenge to the directive authority arose out of the Department's use of the directive to pre-fund the performance of pre-cleanup investigatory work, known as a remedial investigatiodfeasibility study (RI/FS). Prior to June 1984, the Department issued Administrative Order 69 (A.O. 69), requiring that parties contribute to the cost of an RIIFS, but permitting only minority representation on a NJDEP majority selected board. Moreover, pursuant to A.O. 69, directives were issued in the form of a demand for money payment to prefund an RI/FS to be undertaken essentially by the Department. In Woodland Private Study Group v. State, Dept. of 343 Environmental Protection, A.O. 69 was successfully challenged as a rule that had not been promulgated pursuant to the procedural requirements of the New Jersey Administrative Procedure Act. Subsequent to the invalidation of A.O. 69, the Department continued to issue directives requiring the prepayment of funds for an RI/FS. For example, directives have frequently been issued to all potentially responsible parties at a hazardous waste site, including generators, transporters, owners, and operators, requiring them jointly and severally to pay a sum of money within 30 days for the performance of an RI/FS. Several legal challenges were mounted against the Department's use of the directive authority, centering on the following themes: Whether the directive itself, if disputed by the respondent, constituted a (1) "contested case" requiring a hearing either under statute or constitutional law;

342 343

N.J.S.A. 58:lO-23.1 lf(a)(l). 109 N.J. 62,533 A.2d 387 (1987).

New Jersey Environmental Law Handbook Whether the lack of a pre-enforcement hearing and the mandatory nature of treble damages made the use of directives to compel respondents either to pay money or perform remediations constitutionallydefective; Whether a demand for a money prepayment for an RIIFS or a cleanup is (3) (2)

consistent with the directive authority; and Whether a directive can issue against a "generator" potentially responsible party as opposed to the actual discharger. (4)

344

The companion federal court's Woodland Private Studv Group was the first case to address these issues. In that case, the plaintiffs, who had been served with two directives to prepay for the performance of an RIIFS, argued that they were denied due process because of the statute's failure to provide for either a good faith defense to treble damages or a pre-enforcement hearing. The court found that directives were not subject to pre-enforcement administrative or judicial review, and that the Spill Act did not permit a good faith defense to be raised to the imposition of treble damages in a subsequent cost recovery action. Rather the imposition of such punitive damages by the court would be mandatory once it had been shown that the directive respondent was in any way responsible for the discharge. The court noted that the existence of a good faith defense was deemed a prerequisite to the constitutionality of CERCLA. However, the court did not reach the merits of the plaintiffs' arguments concerning whether the lack of a good faith defense to treble damages coupled with the lack of pre-enforcement hearing under the Spill Act created a constitutional defect. Instead the court found that the plaintiffs had a sufficient remedy pursuant to their ability to make a claim against the Spill Fund. The court found that the forum provided by the arbitration of Spill Fund claims was sufficient to satis@ due process. The Woodland decision left a number of issues unresolved. The court in Woodland held that, because the discharge occurred prior to 1977, arbitration was unavailable. In Atlantic Citv 345 Municipal Utility Authority v. Hunt, the Appellate Division held that the Spill Act did not authorize reimbursement from the Spill Fund of a private party's cost for a pre-act, i.e., pre-1977 discharge. Further, the Spill Act only authorizes the Spill Fund arbitrators to consider the validity or amount of damage claims or cleanup and removal costs presented to the Spill Fund for payment. The arbitrators arguably would be unable to rule on such issues as the

344

345

Woodland Private Studv Group v. State. Dev't of Environmental Protection, 616 F.Supp. 794 (D.N.J. 1985), vacated, 846 F.2d 921 (3rd Cir. 1988). Both Woodland cases involved the same parties. The cases proceeded in federal and State court because the plaintiffs chose to present their federal constitutional claims in federal court and their State administrative claims to the State appellate courts. 210 N.J. Super. 76,509 A.2d 225 (App. Div. 1986).

Hazardous and Toxic Substances constitutional or statutory validity of the Department's directive. Moreover, pursuant to Realty, a party in any way responsible for the discharge would be unable to bring a claim against the Spill Fund, so that generators of waste to a hazardous waste site, such as the respondents in Woodland, would not be able to avail themselves of the arbitration procedures. Subsequent to Woodland, the New Jersey Supreme Court addressed these issues in 346

Matter of Kimber Petroleum Corp. The plaintiffs in Kimber argued that since the Spill Act treble damages provision was only triggered if the respondents refused to comply and disputed the directive, the provision was unconstitutional because it served to deter judicial challenge to State action. The State replied by contending that the directive did not impose treble damages but merely acted as a notice that treble damages were mandatory, giving the polluter the opportunity to perform the clean up and avoid treble damage liability under the Spill Act. The Court disagreed, noting that "the State's characterization of the treble damages provision avoids 347 reality." The Court found that the provisions were "indisputably coercive," compelling persons to comply with directives because of the fear of treble damages even if those persons "have a valid claim that they are not justly or legally responsible for the payment." The Court noted the decision in Woodland, but stated that the federal district court's analysis in Woodland failed to appreciate that the respondent was only freed of the threat of punitive damages after it had complied with the directive. The Court, without fully endorsing Tree Realty, further noted that "one reading of the Act" would make arbitration unavailable to responsible parties. The Court held that the "undue harshness in the individual application of the Act's enforcement provisions" could be cured by reading into the Act the availability of "a good-cause 348 exception." The exception would permit an innocent party to demonstrate its lack of responsibility and avoid penalties. While the Court did not specifically hold the treble damages provision of the Spill Act to be unconstitutional, it did state that "without an implied good cause, 349 or reasonable cause exception, the statute may infringe the state or federal constitutions." The Court therefore held that "treble damages need not be assessed if the party opposing such damages had an objectively reasonable basis for believing that the DEP's directive was either

346 347 348 349

110 N.J. 69,539 A.2d 1181 (1988). Id. at 82,539 A.2d at 1188. Id. Id. -

New Jersey Environmental Law Handbook

invalid or inapplicable to it, and that any decision by the DEP to seek treble damages in a 350 recovery action be subject to judicial review as any other agency action." Noting the breadth of Spill Act liability, the Court attempted to give some guidance as to what would comprise a good cause defense, while recognizing the difficulties in challenging liability under the Spill Act. It noted that as a result of joint and several liability, "assessment of 351 The one's proportional share of liability will rarely be the subject of a good cause defense." Court did not address whether assessment of a greater than proportional share of liability could be the subject of a good cause defense. The Court did state that an objectively reasonable contention "that an element of the costs imposed by DEP is unreasonable. . .could constitute a 352 'good cause defense' to a prepayment enforcement directive." The Court noted that, read strictly, the Spill Act did not authorize the Department to issue a directive for the payment of money. However, the Court found the discretion to issue such directives implicit in the broad authority granted the Department under the Act. The Court did not directly address the issue as to whether a Spill Act directive can issue against a generator of hazardous waste as opposed to an actual "discharger." The liability provision of the Act stated that "any person who has discharged a hazardous substance or is in 353 any way responsible" for the discharge is strictly liable for the cleanup of the discharge. However, the provision dealing with the removal and cleanup of hazardous substances states that the Department may direct "the discharger" to remove or arrange for the removal of the 3 54 The Court ignored the discharge without mentioning "persons in any way responsible." distinction between a discharger and a responsible party by stating that "a 'discharger' is one who has 'discharged a hazardous substance or is in any way responsible' for such a discharge." The Court therefore indicated that it would read "discharger" synonymously with the phrase "any person in any way responsible for such a discharge." In 1993, the Department promulgated regulations that set standards for Department oversight of remediation of contaminated sites, including general standards governing 355 Directives. The Department intends the Directive "to constitute a clear, written notice of that

350 351

Id,at 83,539 A.2d at 1188. Id. at 85,539 A.2d at 1189. -

352

Id. at 86,539 A.2d at 1189.

353

N.J.S.A. 58:lO-23.1lg(c)(l).

354

N.J.S.A. 58: 10-23.1lf(a)(l).

355

N.J.A.C. 7:26C.

Hazardous and Toxic Substances person's potential liability . . . and to provide that person a timely opportunity to respond to the 356 directive." The regulations codify what had been the Department's practice, to use Directives to direct parties to perform a remediation or fund a remediation, including requiring the 357 respondents to enter an administrative consent order to assure performance. The regulations set forth also the procedure for a recipient to respond to a Directive and preserve any good faith defense. The recipient must respond in writing within the time set forth in the Directive and indicate either: (1) it will comply; (2) it will comply in part by making partial payment; or (3) it will not comply and set forth the reasons, including all good faith 358 defenses. Other Remedial Authority Penalties The Spill Act contains a sweeping penalty provision that mandates a penalty not to exceed $50,000 for a violation of any provision of the Act or any rule promulgated thereunder. The same penalty applies specifically to any person who knowingly gives false information with respect to a Spill Act claim. Moreover, the Act provides that if the violation is "of a continuing nature, each day during which it continues shall constitute an additional, separate, and distinct 359 offense." No penalty can be levied until the violator has been given notice of the basis of the violation, including the specific citation of the act or omission constituting the violation, the amount of the penalty being assessed, and the right to a hearing. In 1990, the penalty and enforcement provisions were amended giving the NJDEP the authority to bring a civil action, levy a civil administrative penalty, or bring a civil action whenever the Department "determines that a person is in violation of a provision of [the act], including any rule, regulation, plan, information request, access request, order, or directive... or 360 that a person knowingly has given false testimony, documents, or information. . . . 361 Administrative and judicial remedies may be pursued simultaneously. The Department may commence civil actions for injunctive relief, costs of investigation and clean up as well as 7,

"reasonable costs of preparing and successfully litigating7'such an action, the cost of restoring or

356 357 358 359 360 361

N.J.A.C. 7:26C-4.2(b). N.J.A.C. 7:26C-4.2(a)(1)&(2),& (e). N.J.A.C. 7:26C-4.2(g)&(h). N.J.S.A. 58:lO-23.11u(a). L.1990, c.75 (effective July 21, 1990). N.J.S.A. 58:lO-23.1lu(a).

New Jersey Environmental Law Handbook

replacing property damaged by a discharge as well as lost income or any reduction in value caused by the discharge, the costs of restoring any natural resource, and any other costs incurred by the Department. Compensatory damages awarded to a person other than the State shall be paid to the person injured by the discharge. In 2006, partial summary judgment was entered in favor of certain defendants in the 362 matter of Department of Environmental Protection v. Kafil with regard to whether the Department can order remediation of property. The court found that "no provision of the Spill 363 Act permits the DEP to seek an order directing remediation. . . ." The court further noted that the legislature has set forth many penalties in the Spill Act, and that the legislature could have included remediation as a penalty if it had intended to do so. It is unknown at the time of printing whether this holding will be reversed, either by an appellate court or by the legislature itself. If the Department assesses a penalty, the violator must request a hearing within 20 days of the receipt of the notice or the penalty becomes due on the 21st day. If the hearing request is timely and in compliance with all procedures, and there is a finding that a violation has occurred, the Department shall issue a final order assessing the amount of the penalty specified in the notice. If a hearing request is denied, the notice of denial becomes a final order when received 364 by the violator. The Department does retain the discretion to settle the penalty "on such terms 365 and conditions as the [Dlepartment may determine." The amendments also provide for the imposition of interest charges if the penalty is not paid within 30 days. In addition to the penalty assessment, the Department may assess and recover by civil administrative order, the "costs of any investigation, clean up, or removal, and the reasonable 366 costs of preparing and successfully enforcing a civil administrative penalty." The amendments also provide for a summary proceeding in Superior Court or a municipal court for the recovery with costs of a civil penalty of up to $50,000 per day against any person who violates a provision of the Act, a court order, or who fails to pay a civil administrative penalty. The 1990 amendments to the Spill Act also provide that in addition to the above enumerated penalties, any person whose intentional or unintentional act or omission results in the

362 363 364

365 366

2006 WL 1888721 (N.J. Chan. Div. March 1,2006).

Id. at*11. N.J.S.A. 58:10-23.1lu(c)(2)(a). N.J.S.A. 58:lO-23.1lu(c)(2)(b). N.J.S.A. 58:lO-23.11.~(4).

Hazardous and Toxic Substances release of 100,000 gallons or more of hazardous substances can be liable for a civil administrative penalty of up to $10,000,000. In assessing this penalty the NJDEP must take into account the circumstances of the discharge, the conduct, and culpability of the discharger prior to, during and after the discharge and the extent of harm to persons, property, wildlife, or natural 367

resources. 368 In Department of Environmental Protection v. J.T. Baker Co., the court examined the NJDEP's imposition of penalties under the Spill Act and the Water Pollution Control Act for past discharges. The court noted that in its review of the Spill Act, there is "no provision which indicates that an ongoing failure to remedy is an omission that would subject the offender to penalties" even though penalties are appropriate when an act or omission results in a discharge. The court held that for purposes of the Act "a discharge is a new release from a contained area and that continued leaching and contamination from pre-enactment discharges does not subject Baker to penalties." Further, the court held that the Act cannot be applied retrospectively, and to the extent that hazardous substances were discharged prior to the enactment, the Spill Act does not provide for the imposition of penalties.

Actions Against Insurers Under the Spill Act, the State can bring any claim for costs of cleanup, civil penalties, or damages against ". . . the insurer, or any other person providing evidence of financial 369 responsibility." While the Act does not expressly state, it implies that it refers to the insurer or any other person providing financial responsibility of a discharger or other person responsible for the discharge. The provision is somewhat unclear in that it does not specifjr if the term "insurer" refers to a discharger's general liability carrier or to a carrier that.is specifically providing evidence of financial responsibility. The Department has adopted the former interpretation, and 370 at least one court has agreed. On several occasions, the Department has accompanied a Spill Act directive with a "Notice to Insurers" informing the respondents' insurers that the Department may assert the claims set forth in the Directive directly against the insurers.

367 368

369

370

N.J.S.A. 58:lO-23.11111. 234 N.J. Super 234,560 A.2d 739 (Ch. Div. 1989). See Chapter VII for a discussion of the Water Pollution Control Act. N.J.S.A. 58:lO-23.11s. See Summit Assoc. v. Libertv Mutual Fire Ins., 229 N.J. Super. 56, 550 A.2d 1235 (App. Div. 1988). The Rechler Partnership v. Aircomo, N.J. Jour. Env. Lit., Vol. 5, No. 11 (Law Div., March 9, 1992).

New Jersey Environmental Law Handbook Information Requests The Spill Act does not contain a counterpart to 104(e) of CERCLA specifically permitting the Department to request information. However, the Department has asserted that it can use the provision in the Spill Act requiring notification of discharges to the Department to compel persons to respond to a request for information as to whether they used certain 371 transporters or sent waste to a site. 2.3 THE MANAGEMENT AND ADMINISTRATION OF THE FUND 2.3.1 General Role of the Administrator of the Fund The Spill Fund is a non-lapsing revolving fund in the NJDEP to carry out the purposes of the Spill Act. The Fund is credited with all taxes and penalties related to this Act, and any 372 interest received on monies in the Fund is credited to the Fund. The Spill Act gives the Commissioner of the NJDEP authorization to appoint and supervise an administrator of the Fund. The administrator is designated by the Act as the chief 373 executive of the Fund and is endowed with the following specified powers and duties: To represent the State in meetings with the alleged discharger and (1) claimants concerning liability for the discharge and the amount of the claims; To determine if boards of arbitration are needed to settle particular claims; (2) To administer boards of arbitration; (3) (4) To certify the amount of claims and names of claimants to the commissioner. Furthermore the administrator is authorized to disburse moneys in the Spill Fund "for the 374 following purposes and no others" (with omissions not generally relevant): Costs incurred under section 7 of [this act] [NJDEP cleanup and removal (I) 375 costs]; Damages as defined in section 8 of [this act] [essentially property, natural (2) 376 resource and economic damage]; ...

371 372 373 374

375 376

See N.J.S.A. 58:lO-23.11e.

N.J.S.A. 58:lO-23.111. N.J.S.A. 58:lO-23.11j. N.J.S.A. 58:lO-23.1 lo. As first enacted, this provision authorizing the NJDEP to withdraw funds did not address the retroactive application of its provisions. N.J.S.A. 58:lO-23.11f. N.J.S.A. 58:lO-23.11g.

Hazardous and Toxic Substances Such sums as may be necessary for the boards, general administration of (3) the fund, equipment, and personnel costs of the department and any other State agency related to the enforcement of [this Act or any other law with a similar purpose] ... as may be appropriated by the Legislature . . . Costs attributable to the State's obligation to defend and indemnify a (4) 377 contractor pursuant to Sections 1 through 11 of [this act]. The Department's authority to address discharges and use Fund monies has been 378 expanded several times, and currently provides that the NJDEP may remove or arrange for removal of hazardous substances to prevent imminent discharges from grounded or disabled vessels, prevent discharges of certain hazardous substances that are improperly stored or transported, clean up pre-1977 discharges, as well as restore pre-existing or provide alternate 379 water supplies. A procedure for filing a first priority lien against the discharger's property was 380 added, and cleanup contractor indemnification and legal defense provisions have been added. Pre-1977 discharges are subject to the requirement that payments may be made from the Fund only if, and to the extent that, adequate funds from other sources are not available, provided that such payments do not exceed $18 million during any 1 year period or more than $3 381 million for any discharge or related set or series of discharges. But if the "other sources" test is met, and the payment limits are not exceeded, the duty to make payment appears absolute:

If and to the extent that he [the administrator] determines that finds are 382 available, the administrator shall approve and make payments. . . . In the case of post-1977 discharges, the administrator has no particular discretion or limitation set forth in the Act other than firnd availability. The Department is "authorized to 383 draw upon the money available in the fund" and "the find shall be strictly liable, without 3 84 regard to fault. . .for all cleanup and removal costs. . . ."

N.J.S.A. 58:lO-23.110.

L.1979,c.346,$4;L.1981,c.25,$1;L.1984,c.142,$2;L.1985,c.11,$1. N.J.S.A. 58:lO-23.11f(b).

L.1983,c.182,$1;L.1985,c.115,$1;L.1986,c.59,$1. N.J.S.A. 58:lO-23.1lf(d). N.J.S.A. 58:lO-23.11f(c). N.J.S.A. 58:lO-23.1lf(a). N.J.S.A. 58:IO-23.1l(g).

New Jersey Environmental Law Handbook The history of the amendments shows a gradual expansion of the Department's authority over the Fund, but, nevertheless, the Legislature has retained limits on the Department's ability to use Spill Fund money to address discharges that occurred prior to the enactment of the Spill Act in 1977. The Legislature has consistently required that the Fund be used as a last resort to address pre-1977 discharges. Nowhere in the statute is the phrase "adequate funds from another source" defined and no case law addresses this issue. One such likely (and indeed obvious) other source is the discharger. The provision that authorizes remediations and clean ups itself specifically mentions dischargers as a source of funds and authorizes the NJDEP itself to spend funds to remove or arrange for removal or, through the use of directives, to look to the discharger to spend funds to remove or arrange for the removal of any discharge. Such a reading is consistent with New Jersey's public policy that those who cause pollution should pay to 385 remediate it. 2.3.2 Internal Requirements for Authorization of Fund Financing Pursuant to the Spill Act, the Commissioner of the NJDEP, the State Treasurer and the 386 Director of the Division of Taxation are authorized to adopt, amend, repeal and enforce such rules and regulations, pursuant to the Administrative Procedure Act (MA), as they deem 387 necessary to accomplish the purposes and their responsibilities under the act. Prior regulations governing the processing of Spill Fund claims were invalidated for 388 failure to comply with the APA, Exxon Corp. v. Hunt, and the Department has promulgated 389 Spill Fund regulations. The regulations impose significant restrictions on the ability to assert claims against the Spill Fund: 390

(1)

Property owners could not assign claims against the Spill Fund as part of a

sale;

385

386 387 388

389 390

T&E Industries, Inc. v. Safetv Light Corp., 123 N.J. 371, 587 A.2d 1249 (1991); State v. Ventron, 94 N.J. 473,468 A.2d 150 (1983). N.J.S.A.58:lO-23.11t. N.J.S.A. 52:14B-1, g t a. Exxon Corn. v. Hunt, 190 N.J. Super. 13 1,462 A.2d 193 (App. Div. 1 983), affd, 97 N.J. 526,481 A.2d 27 1 (1984), aff d in vart. rev'd in part, on other grounds, 475 U.S. 355, 106 S.Ct 1103, 89 L.Ed.2d 364 (1986). N.J.A.C. 7:1 J. N.J.A.C. 7:lJ-2.1.

Hazardous and Toxic Substances Property owners would have to demonstrate actual, not contingent or 391 speculative, damages; Claimants would have to make "best efforts" to recover fiom "any other (3) 392 source from which recovery is reasonably likely," including insurance carriers; Claim for providing alternate water supplies in NJDEP-delineated Spill (4) Fund Claims Areas will be allowed only if they are "the most cost-effective 393 environmentally sound means of ameliorating damage fiom a discharge"; and Property owners would not be able to assert claims for diminution in (5) 394 property value unless they sell their property (except when sale is legally impossible). 2.3.3 Arbitration and the Fund The Spill Act, in addition to establishing liability for hazardous substance discharges, 395 establishes a system for making claims against it and receiving money from the Fund. The statutory provisions set out a system of arbitration of claims before they are paid fiom the Fund. "Boards of arbitration shall be convened by the administrator when persons alleged to have caused the discharge, the administrator or other persons contest the validity or amount of damage 396 claims or cleanup and removal costs presented to the fund for payment." The board can order 397 testimony and has subpoena power. Its determination is final and reviewable in the Superior 398 Court, Appellate Division. 399 In Exxon v. Mack, the court examined two issues. First, whether a draw by the NJDEP on the Fund constitutes a claim against the Fund, thereby triggering a right to arbitration. The court, stating that the NJDEP is not considered to be a "claimant" for the purposes of the Act, unlike an independent third-party claiming damages, held that a board of arbitration need not be convened because the pre-requisite condition, a demand for costs made against the Fund, had not been met. (2)

N.J.A.C. 7: 15-2.4(a). N.J.A.C. 7:l J-2.4(b). N.J.A.C. 7:lJ-3.3. N.J.A.C. 7:lJ-4.1 to -4.9. N.J.A.C. 17:26-1.1 et sea. N.J.S.A. 58:lO-23.1ln(a).

N.J.S.A. 58:lO-23.1ln(d). N.J.S.A. 58:lO-23.1ln(g).

237 N.J. Super. 16,566 A.2d 828 (App. Div. 1989).

New Jersey Environmental Law Handbook The court next looked at the question of whether arbitration is appropriate for determining responsibility for cleanup and removal costs, as well as contesting the reasonableness and validity of those costs. The court held that arbitration procedures were not designed for resolving questions of responsibility and the plaintiff must wait for the NJDEP to take enforcement action before it can raise issues regarding its responsibility. Only the amount and/or validity of the claim can be arbitrated. The rules by their terms are limited solely to "claims." Claims seek recovery from the Fund for "damages," defined as: cost of restoring, repairing, or replacing any real property or personal property damaged or destroyed by a discharge, lost income, reduction in property value, cost of restoration or replacement of natural resources, and loss of tax revenue by a State or local 400 government. The rule convening a board of arbitration provides that the administrator shall convene a board [of arbitration] in four circumstances: (1) if the claimant contests the denial of a claim; (2) when claimant rejects a settlement offer from the administrator; (3) when any potentially responsible party contests the validity or amount of the claim; or (4) when claimant and 40 1 potentially responsible party fail to settle the claim. Claims must be submitted to the Fund administrator within one year of the date of discovery of the damage, although the claims can later be amended. The regulations are designed to identify the discharger and attempt to achieve a settlement between the discharger and the claimant. In the event of a failure to achieve a settlement, a board of arbitration can be convened to determine the award to the claimants. Any payment by the Fund is conditioned upon its acquisition by subrogation of the claimant's rights against the discharger or other 402 responsible party. 403 In Buonviannio v. Hillsborou& TP. Committee the Court held that homeowners did not "discover" damages for which a Spill Fund claim could be asserted until cooperative state and local remediation efforts ceased and contamination was imminent. The Buonviaggio family had a groundwater well in the area of a contaminant plume emanating from a nearby farm. The 404

Township arranged for public water supply to groundwater wells affected by the plume.

400 401 402 403 404

N.J.A.C. 7: 15-1.4. N.J.A.C. 7: 1J-9.1. N.J.A.C. 7:1J-8.4(b). 122 N.J. 5, 583 A.2d 739 (1991). Id. at 12,583 A.2d at 742. -

The

Hazardous and Toxic Substances

area originally designated as affected by the plume did not include the Buonviaggio's well. The 405 NJDEP later changed the area affected to include that well. Despite NJDEP's position, it was not clear that the well would actually be affected by the plume. The Buonviaggios were reluctant to abandon their well if it was not to be contaminated 406 because the farm relied on the well for an extensive amount of water. Negotiations between the Buonviaggios, the Township, and NJDEP continued for a long time thereafter. Finally, on June 18, 1987, the Buonviaggios' well was shut down and they presented a claim to the Spill Fund, which the Fund's administrator rejected as being untimely because more than 1 year had 407 passed from the date of discovery of damage. This decision was affirmed in an unreported decision of the Appellate Division. The New Jersey Supreme Court reversed because there were no clear instructions or regulations defining when claims for threatened damages must be filed under the Spill Fund and because the economic losses occasioned by pollution fiom a distant source did not become final or fixed until NJDEP established that it would not correct the environmental damage with the 408 available resources and that a claim against the Spill Fund would have to be made. 409 The Appellate Division in In re NL Industries, Inc. held that the 1-year time limit ran fiom the date NL gave in to USEPA demands and signed a proposed consent order agreeing to conduct a RIIFS and not from the date NL received a letter from the USEPA stating that it intended to investigate the property and hold NL potentially liable. 410 Enertron Industries, Inc. v. Mack addressed the timeliness of a claim made on the Fund and interpreted the phrase "date of discovery.'' In April 1983, a warehouse where Enertron leased space was damaged by a fire originating in a space leased by another tenant. As a result of the hazardous conditions, including the storage of dangerous chemicals, both the Newark Fire Department and the NJDEP denied Enertron access to the building. Enertron filed its initial claim against the Fund in December 1984, and made a second claim in July 1985. In December 1988, the claims were denied based on the 1-year statute of limitations for the filing of claims. The court rejected Enertron's suggestion that the phrase "more than 1 year after the date of

405 406 407 408 409 410

Id. at 12-13,583 A.2d at 742. Id. at 13,583 A.2d at 742-43. Id. at 14-15,583 A.2d at 743. Id. at 19,583 A.2d at 745-46. 240 N.J. Super. 162,572 A.2d 1177 (App. Div. 1990). 242 N.J. Super. 83,576 A.2d 28 (App. Div. 1990).

New Jersey Environmental Law Handbook discovery of damage" should be read as permitting claims to be made at any time for continuing damages discovered within the preceding year. The court stated that the "date of discovery of 'damage"' is the date the plaintiffs discovered or should have discovered that they might have a basis for a claim against the Fund. The court noted that the plaintiffs knowledge of the presence of "dangerous chemicals" does not necessarily indicate their awareness that a "discharge" of "hazardous substances" occurred. Enertron argued that N.J.S.A. 58: 10-23.1ln(a) requires that the limitations issue, as well as all other disputes bearing on the "validity and amount" of the claim be decided by a board of arbitration and not by the administrator. The court held that the limitations issue should be heard by a board of arbitration and remanded the matter to the administrator to convene a board of arbitration. The "date of discovery" was discussed further in Lacey Municipal Utilities Authority v. DEP ~ u n d . ~ Several l potable wells in Lacey Township were contaminated. The Township's dealings with the then Administrator of the Fund indicated that the Administrator deemed the date of commencement of construction of an alternate water supply line as the date of discovery of the claim. The Township filed its claim against the Fund within 1 year of the date construction commenced. The Administrator at the time the claim was filed and an administrative law judge denied the claim as untimely because the Township knew of its claim for more than 1 year before filing it. The Appellate Division reversed and held that the 1-year time limitation did not begin to run until the Township actually spent the money for which it sought reimbursement. The Court based its ruling, in part, on the Department's Spill Fund regulations concerning water supply system claims, which define cleanup and removal costs as costs actually incurred in connection with a discharge. The New Jersey Supreme Court modified and affirmed the Appellate Division decision in The Court rejected the Appellate Division holding that the 1 year time limit began when costs were incurred, reasoning that a public entity could unduly delay the running of the time limit by deferring costs. Instead the Court ruled that the municipal entity here should not be 412 precluded from presenting its claim because of uncertainty when the time limit began, a unique situation that the Department remedied by promulgating N.J.A.C. 7: 1J-6.1. 2.4 THE SUPERLIEN In general, a Department directive also serves as notice of the possible imposition of a lien on the property of the respondent. The Act provides that "[alny expenditures made by the

m.

411 412

312 N.J. Super. 298,711 A.2d 932 (App. Div. 1998), affd as modified, 162 N.J. 30 (1999). 162 N.J. at 38-41.

Hazardous and Toxic Substances

administrator pursuant to this Act shall constitute, in each instance, a debt of the discharger to the 413 hnd." In order for the debt to constitute a lien on all property owned by the discharger, the Administrator of the Spill Fund must file with the Clerk of the Superior Court, "a notice of lien, incorporating a description of the property subject to the clean up and removal and an identification of the amount of cleanup, removal, and related costs expended from the fund." The Clerk must then "promptly enter upon the civil judgment or order docket the name and address of the discharger and the amount of the lien as set forth in the notice of lien. Upon entry by the clerk, the lien, to the amount committed by the administrator for clean up and removal, shall attach to the revenues and all real and personal property of the discharger, whether or not 414 the discharger is insolvent." A notice of lien filed pursuant to the Spill Act creates a first-priority lien over all other claims or liens which are or have been filed against the property subject to clean up, unless the property consists of six dwelling units or less and is used exclusively for residential purposes. 415 As to other property, the lien assumes priority as of the date of the filing of its notice. 416 In Kessler v. Tarrats, an assignee of a purchase-money mortgage that had been given to a corporation on December 21, 1976, instituted action to foreclose the mortgage. The Administrator of the Spill Fund, by way of a summary judgment motion, sought a judgment that the Spill Act lien filed on July 27, 1982, for the cost of cleaning the premises of toxic waste was a first-priority lien. Kessler argued that the priority lien provision of the Spill Act was unconstitutional as an impairment of contract rights arising from the mortgage recorded before the Act was enacted; as a denial of due process of law because no notice to the prior lienholders was required; and as a taking without just compensation. The Chancery Division held that since the assignee acquired his contract rights, which he sought to assert in the foreclosure action, after the effective date of the Act, such rights were not impaired retroactively by the statute. The court alternatively held that even if the assignment was a transfer of a perfected interest before the enactment of the Act, the lien provision of the statute was viewed as a proper exercise by the Legislature of the police power and as such was 417 not invalid under the contract clause. 413 414 415 416

417

N.J.S.A. 58:lO-23.11f(f). N.J.S.A. 58:lO-23.11f(f). N.J.S.A. 58:lO-23.11f(f). 191 N.J. Super. 273,466 A.2d 581 (Ch. Div. 1983), 1984).

a, 194 N.J. Super. 136,476 A.2d 326 (App. Div.

191 N.J. Super. 273,288,466 A.2d 581,589 (Ch. Div. 1983).

New Jersey Environmental Law Handbook

The court further held that the statute did not violate due process under either the United States Constitution or the State Constitution, since the Legislature had directed that all efforts to collect from a discharger must be brought through the courts. Requirements of due process are met so long as a person has notice and opportunity to be heard in a court before a State authority can enforce a tax or revenue lien against that person's property. Although the Administrator did not join all the lienholders in the original action against the discharger, there was no fatal error, because the assignee, in its foreclosure action, joined all of the lienholders. Thereafter, the Administrator asserted his claim by means of counterclaim and crossclaims and served lienholders in the foreclosure action. The court held that the Administrator in an action to enforce a statutory lien pursuant to the Spill Act and assert its priority must join such persons as will be effected by the enforcement or lien. On appeal, the Appellate Division held that the lien provision of the Spill Act was retroactive, and that the Spill Act lien granted the State a paramount lien over the liens of 418 municipalities and assignees. The court held that the lien did not constitute an impermissible impairment of contract nor a taking without just compensation. The court held that the State's action in funding the clean up of property contaminated with hazardous substances inured to the benefit of all existing lienholders and warranted priority status for the state Spill Act lien: "The State did not take property, but rather assisted in its enhancement by doing what the owner 419 should have done but did not do." In the second case to address the lien provision of the Spill Act, Simon v. Oldmans 420 Township, the court held that a lien created under the Spill Act for cleanup and removal costs for the discharge of hazardous substances, which takes priority over any other claim or lien, does not come into existence and cannot be recorded until expenditures are made out of the Spill Compensation Fund. The Court addressed the validity of the superpriority lien in the context of a Chapter 7 bankruptcy liquidation in In re Perona Bros., Inc., 186 B.R. 833 (D.N.J. 1995). The debtor owned a scrap yard on which it stored 1 to 2 million used tires. After the tires caught fire, and before the bankruptcy filing, the Department issued a Directive to debtor advising that if the Department expended funds to remediate the discharge, a superpriority lien would attach to the property. The debtor did not perform the Directive, but filed for bankruptcy. The Department

418 419 420

Kessler, 194 N.J. Super. 136,476 A.2d 326 (App. Div. 1984). Id. at 147,476 A.2d at 332. 203 N.J. Super. 365,497 A.2d 204 (Ch. Div. 1985).

Hazardous and Toxic Substances 42 1

remediated the discharge with public funds. The Court held that the Directive, issued prebankruptcy filing, created the required interest in the property to make the superpriority lien 422 valid despite the automatic stay provision of the bankruptcy laws. 2.5 NATURAL RESOURCE DAMAGES 2.5.1 Introduction New Jersey has developed a program for addressing restoration of natural resources and collecting damages for impacts to natural resources. This program goes beyond exercising its authority as the natural resource trustee under federal statutes by seeking additional natural resource restoration or damage recovery under state law provisions. Under the Comprehensive Environmental Response Compensation and Liability Act, the governor of the state designates those state officials who may act as trustees for the state's 423 natural resources. In New Jersey, the governor designated the Department as the trustee for natural resources. Similarly, the Oil Pollution Act of 1990 provides for state trustees to collect 424 natural resource damages for natural resources within the state damaged by oil discharges. The Oil Pollution Act of 1990 also authorizes the governor to designate state officials to act as 425 trustees for natural resources, and the governor has designated the Department to act as New Jersey's trustee under this Act. 2.5.2 Common Law and Statutory Basis for Natural Resource Damages The Department also acts to restore natural resources and assess the damages for injury caused to natural resources under State common law and statutory provisions. The department alleges that under the common law public trust doctrine it has the authority to seek restoration of and collect damages for injured natural resources. The primary authority on which it relies is 426 State v. Jersey Central Power and Light. Jersey Central involved the discharge of water from a power generating station that was cooler than the ambient temperature of the water in Oyster Creek, which received the discharge. The Department alleged that discharged water lowered the temperature of the water in Oyster Creek such that 500,000 menhaden fish were killed. The court agreed with the Department's argument that fish found in tidal waters such as the Oyster

42 1 422 423 424 425 426

186 B.R. 834-35. 186 B.R. 838-39. 42 U.S.C. •˜9607(f)(2)(B). 33 U.S.C. $2706(a)(2). 33 U.S.C. (j2706(a)(3). 133 N.J. Super. 375 (active 1975), rev'd on other grounds, 69 NJ 102.

New Jersey Environmental Law Handbook Creek are tidal resources and that tidal resources have long been recognized as subject to the 427 public trust doctrine and objects of special protection., To date, no court has held directly that the public trust doctrine applies to all groundwater in the State or that the Department's claims for damages for groundwater contamination are valid under common law. The primary statute upon which the Department relies for authority to address natural resource damages is the Spill Compensation and Control Act. The Spill Act declares that the 428 State is the trustee, for the benefit of its citizens, of all natural resources within its jurisdiction. The Spill Act defines natural resources as land, fish, shellfish, wild life, biota, air, waters, and 429 other such resources owned, managed, held in trust, or otherwise controlled by the state. 430 Waters include streams and bodies of surface or groundwater. Another important definition in 43 1 the Spill Act is cleanup and removal costs, which includes "the cost of restoration and replacement, where possible, of any natural resource damaged or destroyed by a discharge." The New Jersey Supreme Court relied on this language to include such costs of restoration or replacement of natural resources damaged or destroyed in its description of cleanup and removal 432

costs under the statute. In re Kimber Petroleum Corp. 2.5.3 The Department's Program Based on these State law authorities, the Department has developed its own unique program for addressing natural resource damage and restoration separate fiom the federal statutory programs. The Department has developed an office of natural resource restoration to oversee and implement its natural resource restoration program. The program seeks restoration through remedial action of natural resources to their predischarge conditions. It prefers the rehabilitation of injured natural resources, or replacement or acquisition of natural resources and their services. Under the Department's program, restoration also includes compensation for natural resource services lost fiom the beginning of the injury through to the full recovery of the resource. The Department has incorporated consideration of natural resource damage and restoration into its site remediation program.

427 428 429 430 43 1 432

133 N.J. Super. at 392. N.J.S.A. 58:lO-23.1la. N.J.S.A. 58:lO-23.11b.

Id. N.J.S.A. 58:,10-23.11b;N.J.S.A. 58:lO-23,iig(a)(2). 110 N.J. 69,85 (1988).

Generally, natural resource damages and

Hazardous and Toxic Substances restoration can involve either general ecological injury or groundwater injury. Ecological injuries can involve fisheries, sediments, surface waters, wetlands, forests, wildlife habitat, and lost public use of such resources. Groundwater is the subsurface waters within the State. Both types of injuries require ecological evaluations of potential risk. Thereafter, the injuries to such resources are treated differently. The Department's technical requirements for site remediation require a baseline 433

ecological evaluation for each contaminated site or contaminated area of concern. The baseline ecological evaluation is qualitative in nature, uses the sampling done as part of the site investigation under other provisions of the technical regulations, and determines whether further sampling and evaluation is required. In the baseline ecological evaluation, one compares the concentrations of contaminates of ecological concern with applicable standards, criteria, or 434 guidelines. If contaminates of ecological concern exist above applicable standards, criteria, or guidelines, and are present in environmentally sensitive natural resources or have the potential to migrate to such environmentally sensitive natural resources, then further ecological sampling and 435 evaluation is required. If further investigation is required, ecological sampling and an ecological risk assessment are preformed as part of the remedial investigation, except for 436

groundwater as an ecological receptor. Based on the ecological risk assessment, the Department develops a natural resource damage position or restoration plan. With regard to groundwater, the Department has developed its own program under which it seeks restoration of groundwater resources or damages. With regard to restoration, the Department seeks to protect a similar volume of groundwater resources to those damaged by the discharge. The Department prefers that such protected areas be in the same general aquifer system if possible. If a responsible party cannot or chooses not to replace or restore the groundwater, it can pay damages according to a groundwater injury calculation formula that the Department has developed. This formula basically determines the amount of groundwater adversely impacted over time, the costs of purchasing such a volume of water as a potable water supply, and then calculates the amount of damages. The specific groundwater injury calculation 437 is described on the Department's website. It requires input for the planning area of the site as

433 434 435 436 437

N.J.A.C.7:26E-3.11.

Id. Id. N.J.A.C. 7:26 4-7.

Http:llwww.nj.gov/dep/nrr/nri/gw_injuly_

New Jersey Environmental Law Handbook identified in the New Jersey Statewide Water Supply Plan of 1996, the annual groundwater recharge rate set forth in that plan for the location of the site, the current rate for purchasing water in that area as derived from the New Jersey Board of Public Utilities data, the areal extent of the plume and its duration. This groundwater damage calculation is premised on the theory that the contamination of the groundwater prevented its use as a potable water supply. The Department does not consider whether the groundwater affected was, was anticipated to be, or was capable of being, used for actual potable water supply. A recent trial court decision puts into question whether the Department's assumption that the contamination of groundwater per se entitles it to collect natural resource damages. In a May 26, 2006 opinion, the Superior Court of New Jersey, Law Division, Union County held that the Spill Act does not impose liability for the loss of use of natural resources. The New Jersey 438 Department of Environmental v. Exxon Mobil Corporation. The court relied on the plain language of the Spill Act, which provides for restoration of natural resources but not loss of use 439 The court also compared other statutes that explicitly do provide for loss of use of damages. 440 natural resources, such as the Oil Pollution Liability and Compensation Act. The Department has appealed this decision and, as of the date of publication, no ruling from the Appellate Division has issued with regard to loss of use natural resource damages. 3.0 3.1

PETROLEUM AND HAZARDOUS SUBSTANCE STORAGE

BACKGROUND In 1990, in response to a series of oil spills in the Arthur Kill, the Legislature enacted a package of six bills whose purpose is to prevent and deter spills and discharges of petroleum products, debris, and other hazardous substances to the lands and waters of the State. Five of the 44 1 bills amended the Spill Act, and required the NJDEP to undertake new responsibilities for addressing spills of oil and other hazardous materials and to improve the way the Department 442 regulated discharge prevention and safety measures. One of the bills amended the Corporation 443 444 Business Tax of 1945 and the New Jersey Gross Income Tax Act, and eliminated as a 438 439 440 441 442 443 444

2006 WL 1477161

Id. 33 U.S.C 2702.

L. 1976, c. 141. Spill Compensation and Control Act. L.1990, c.75-80. L.1990, c.79.

L.1990, c.79. Assembly Energy & Environment Committee Statement.

Hazardous and Toxic Substances deductible business expense any penalty or fine collected for violation of State or federal 445 environmental law. The bill also eliminated, as deductible expenses, treble damages paid to the State for cleanup and removal costs incurred as a result of the failure of a discharger to clean 446 up an unauthorized discharge. The legislation expanded the existing Discharge Prevention, Containment, and Countermeasure (DPCC) Program, required the use of protective measures and illumination during the marine transfer of hazardous substances, and the registration of 447

transmission pipelines carrying hazardous substances. In response to this legislative mandate, the NJDEP adopted comprehensive new regulations covering the storage, handling, cleanup, and spill reporting of oil and hazardous 448

substances in September 1991. The regulations were immediately challenged by the Chemical Industry Council of New Jersey as being "facially invalid." The Appellate Division rejected the attack and, in a separate concurring decision, Judge D'Annunzio noted that even though the regulations were affirmed, the affirmance "must not be interpreted as a blank check to the Department to exceed the legislature's intent or to immunize the Department from attacks on its 449 regulations in specific applications." The 1991 regulations establish stringent discharge prevention and emergency response requirements applicable to any major facility. Although such "major facilities" have been required to prepare Discharge Prevention, Control, and Countermeasure (DPCC) and Discharge Cleanup and Removal (DCR) Plans since 1979, the new regulations imposed an even broader range of requirements on the facilities, including NJDEP 450 review and approval of the plans during their preparation. The regulations also provided the Department with the authority to waive the regulatory requirements when it determines that the rules would impair expeditious containment or clean up and removal of discharges, or endanger 45 1 life, health, safety, or the environment. The regulations have been revised several times. In June, 1993, the NJDEP proposed 452 amendments to the 1991 regulations. After evaluating the public comments on these

Id. Id. L.1990, c.78, c.80, c.77. 23 N.J.R. 2656(a) (September 3, 1991). In Re Adoption 0fN.J.A.C.7:1E, 255 N.J. Super. 469,605 A.2d 733 (App. Div. 1992). N.J.A.C. 7:lE-4.5(h) & -4.6. N.J.A.C. 7:lE-1.10.

25 N.J.R. 2636 (June 21,1993)

New Jersey Environmental Law Handbook 453

regulations in June 1995, the NJDEP proposed a set of revised amendments to the regulations. These revised amendments are primarily technical in scope, reducing the need to submit certain discharge confirmation reports, reducing the penalties for violations, changing certain terms of the documents submitted to the NJDEP, and introducing digital standards for reporting 454

geographic information.

There were further refinements to the regulations in 1996,2000, and

2001. 3.1.1 Covered Facilities Whether a facility is subject to these regulatory requirements is determined by its 455

"storage capacity," that portion of a facility "dedicated to, used for, or intended to be used for 456 storage of hazardous substances." Only "major facilities," defined as any facility that has a combined storage capacity of 20,000 gallons or more of hazardous substances, excluding petroleum products, or a total storage capacity of 200,000 gallons of any hazardous substance 457 (including petroleum products) must comply. As a practical matter, the regulations primarily affect aboveground storage, given the existing State and federal regulations which govern underground storage tanks. Chapter 11, Section 3.3 m a ) . Marine vessels, per se, are not 458 included in the definition of "major facility" and consequently are subject to regulation only when engaged in the transfer of hazardous substances between vessels. The transfer of hazardous substances fi-om a vessel to a marine transfer facility or from a facility to a vessel is 459 also subject to regulation. "Hazardous substances" are broadly defined to include petroleum and petroleum

(w

products, prohibited or restricted-use pesticides, and substances designated as hazardous or toxic 460 pursuant to other State and federal statutes and regulations. The definition does not differentiate between the physical states of hazardous substances; hazardous substances in both

27 N.J.R. 2337 (June 19,1995) 27 N.J.R. 2337,2342 (June 19,1995) The term "storage capacity" is not limited to aboveground and underground storage tanks, but includes drums, reservoirs, containers, bins, and open land or unenclosed space intended or actually used for the storage of hazardous substances. The capacity of a storage tank is the total volumetric design capacity. N.J.A.C. 7:lE-1.6. N.J.S.A. 58:lO-23.1 lb(1). Id. N.J.A.C. 7:lE-1.6. N.J.A.C. 7: 1E-2.7. N.J.A.C. 7:lE-1.7 and Appendix A.

Hazardous and Toxic Substances solid and liquid form are regulated. The Department has reasoned that because the behavior of solid and liquid hazardous substances can cause the same detrimental effect on natural resources and public health when discharged, it would not be in the best interest of public health and the 461 environment to distinguish between solid and liquid forms of hazardous substances. The NJDEP does not currently regulate aboveground storage tanks at facilities that are not major facilities.

3.2 PLANNING AND INFORMATION SUBMISSIONS 3.2.1 Discharge PIans Owners or operators of major facilities must submit Discharge Prevention, Containment or Countermeasure (DPCC) Plans and Discharge Cleanup and Removal (DCR) Plans to the 462 NJDEP for approval. The regulations set forth a schedule for these submissions based on 463 storage capacity. New major facilities must submit the DPCC and DCR plans at least 180 days prior to the 464 anticipated start of operations. 465 DPCC and DCR plans are to be prepared and submitted as a single document. DPCC Plans must include general site plans showing the location of all storage tanks, drum storage areas, transfer areas, etc.; a drainage and land use map showing the location of all major sewers, stormsewers, all watercourses where facility surface water drains, and all supply and monitoring wells; and a topographical map, including environmentally sensitive areas. The DPCC must also include technical information on the storage areas, unloading areas, secondary containment systems, lighting, flood hazard areas, leak detection equipment, housekeeping, and maintenance, personnel training, security, standard operating procedures, and recordkeeping. Also required is a schedule, subject to Department approval, for the upgrading of equipment or portions of the 466 facility to meet the regulatory requirements. The regulations further require that the DPCC plan include description of discharges, the corrective action taken, and plans for preventing 467 recurrences where a facility has had two or more discharges.

461 462 463 464 465 466 467

23 N.J.R. 2718 (September 3, 1991). N.J.S.A. 58:10-23.11d2, -23.11d3; N.J.A.C. 7:lE-4.2, -4.3, -4.5 and -4.6. N.J.A.C. 7: 1E-4.5. N.J.A.C. 7:lE-4.5(d). N.J.A.C. 7:lE-4.5(a). N.J.A.C. 7:lE-4.2(e). N.J.A.C. 7: 1E-4.2(~).

New Jersey Environmental Law Handbook DCR Plans must include a summary action plan to deal with discharges, fires, or explosions, a list of containment equipment and personnel available to the facility, a 24-hour business contact, and plans identifying methodology for protecting environmentally sensitive 468 areas. Financial responsibility documents must also be submitted with the plans. The owner or operator must demonstrate the financial responsibility for taking corrective action when a hazardous substance is discharged, in the minimum of $1 million per occurrence and $2 million aggregate. The regulations do provide that a lesser amount may be acceptable under certain 469 conditions. Financial responsibility may be established by self-insurance, guarantee, insurance, or risk retention group coverage, surety bond, or letter of credit. Plans, amendments, and renewals must be certified. For corporations, a principal executive officer of at least the level of vice president must certify that he or she has examined 470

the documents and based upon his or her inquiry, believe the information to be true. The environmentally sensitive protection plan must be certified by a marine biologist or the 47 1 equivalent and an ornithologist. The general site plan must be certified by a licensed land 472

surveyor. The NJDEP first reviews the plans to assure that all the required information has been submitted. Administrative completeness review must occur within 60 days of receiving the 473 plans. If the plans are deemed to be incomplete, the additional information must be submitted 474 within 30 days, unless otherwise extended by the Department. Once the DPCC and DCR plans are deemed to be administratively complete, technical review begins, including site visits by NJDEP inspectors. The Department must either approve or deny a complete submission within 180 days of receipt. If approval is denied, or the plan is found to be incomplete, the owner or operator has 30 days to submit an acceptable plan. The Department's denial or revocation of a DPCC or DCR plan must be in writing, and its reasons provided. The failure to

468

469 470 471 472 473 474

N.J.A.C. 7:lE-4.3. Environmentally sensitive areas are defined as "geographic areas which contain one or more significant natural or ecological resources as set forth in N.J.A.C.7:lE-1.8." N.J.A.C.7:lE-1.6 N.J.A.C. 7:1E-4.4(b). N.J.A.C.7:lE-4.11(b), (c). N.J.A.C.7:lE -4.11(f). N.J.A.C. 7:1E-4.10(a)(2). N.J.A.C.7:lE-4.5(f). N.J.A.C.7:1E-4.5(g).

Hazardous and Toxic Substances comply with a schedule for upgrading or submitting false or wilfully misleading information is grounds for denial or revocation. Denials and revocations may be challenged in a hearing before 475 the Department. The Department also has the authority to conditionally approve a plan if the drainage and land use map and the topographical maps (including the environmentally sensitive mapping) is 476

incomplete or not in the prescribed format. However, the conditional approval will also set a 477 date by which the mapping must be complete. The regulations also specify what facility 478

changes require Plan amendments, and Plans are subject to renewal every 3 years. 3.2.2 Aboveground Storage The major facility regulations set forth standards applicable to aboveground storage tanks. Adequate secondary containment is required and initial integrity testing must be 479 completed pursuant to a schedule outlined in the regulations. The deadline for integrity testing is based on tank age, proximity to surface water, the number of leaks in the last 5 years, and the number of years since the last test. Tanks of 2,000 gallons or less are exempt from the testing requirement. The base under the storage tank must be made of or surfaced with a material impermeable to passage or chemical attack. Existing tanks are exempt from the base impermeability requirement until they are replaced or substantially repaired. However, the Department can order a tank out of service if it deems a discharge likely to occur. Before the tank can return to service, it must meet the upgraded impermeability requirements. Tanks with a capacity of 2,000 gallons or more are required to have overfill protection devices. Alternate methods of overfill detection are required for those with a capacity of less 480 than 2,000 gallons. Portable tanks, drum storage areas, and tank carhank truck loading areas 48 1 are also required to have secondary containment. Impermeable secondary containment or diversion structures are required for aboveground storage tanks, process areas, storage areas, and piping and must be able to prevent any leak from becoming a discharge. The structures must block all probable routes of escape, have an

475 476 477 478 479 480 481

N.J.A.C. 7: 1E-4.7(d). N.J.A.C. 7:lE-4.6(~). N.J.A.C. 7:lE-4.6(d). N.J.A.C. 7:lE-4.8 & -4.9. N.J.A.C. 7: 1E-2.2(a). N.J.A.C. 7: 1E-2.2(d). N.J.A.C. 7: 1E-2.2(f), (g), -2.3(a).

New Jersey Environmental Law Handbook additional capacity to accommodate 6 inches of rainwater, have adequate capacity to contain the volume of the largest structure that might leak, and must not drain into any type of water course or sewage treatment plant, unless there is a way to intercept or retain any leaked hazardous 482 substances. Secondary containment is not required for existing aboveground storage tanks, if the existing system can protect groundwater, allow for visual detection of leaks and is inspected daily. 483

In-facility piping must be marked as to contents, where practicable.

New piping must

be double walled or be secondarily contained, and have product-sensitive leak detection devices 484 where such devices are state-of-the-art. Existing buried pipes are exempt from the secondary containment requirement but must have product-sensitive leak protection devices if state-of-the485 art. When existing piping is exposed and substantially repaired, it must be upgraded to meet 486 the new standards. Process areas are also required to have secondary containment or diversion 487 for leaked hazardous substances. 3.2.3 Underground Storage Tanks The major facility regulations require underground storage tanks to meet the general 488 requirements of N.J.A.C. 7:14B-I, et seq., applicable to all USTs. 3.2.4 Marine Transfer Facilities The major facility regulations incorporate by reference U.S. Coast Guard regulations 489 applicable to oil transfer facilities, and make those regulations applicable to all transfer 490 facilities which transfer liquid hazardous substance as defined by the Spill Act. The regulations also require booming around vessels during the transfer of hazardous substance, and restrict the conditions under which such transfers may occur, i.e., dangerous weather conditions. Transfers are not to occur, or if underway they must be discontinued, where there is a fire in the vicinity, where there is a break in the transfer system, if the communication system is not

N.J.A.C. 7: 1E-2.6. N.J.A.C. 7: 1E-2.4(a). N.J.A.C. 7:lE-2.4(b). N.J.A.C. 7:lE-2.4(~). N.J.A.C. 7:1E-2.4(d). N.J.A.C. 7: 1E-2.5. See Section 3.3 of this Chapter for a discussion of UST requirements. N.J.A.C. 7: 1E-2.7(a) (adopting by reference 33 C.F.R. $5 154,156). N.J.A.C. 7:lE-2.7(a).

Hazardous and Toxic Substances 491

operative, or where there are discrepancies in the amount of product being transferred. Illumination is also required when hazardous substances are transferred between vessels and 492 between vessels and major facilities between sunset and sunrise. 3.2.5 Transmission Pipelines The regulations require that "transmission pipelines"

493

register with the NJDEP, and

comply with the federal standards adopted pursuant to the federal Transportation of Liquids by 494 Pipeline regulations. The owner or operator of the pipeline must also prepare an action plan to 495

be used in response to fires, explosions, and discharges. 3.3 UNDERGROUND STORAGE TANKS 3.3.1 New Jersey Underground Storage of Hazardous Substances Act Underground storage tanks (USTs) in New Jersey are subject to regulation at three levels of government: federal, State, and local. The federal program is administered by the USEPA, pursuant to Title I of the Hazardous and Solid Waste Amendments of 1984 to RCRA, as 496 amended in 1986, subject to USEPA authority to delegate the federal program to States which 497 have adopted programs which are at least as strict as the federal program. In response, the New Jersey legislature in 1986 enacted the Underground Storage of Hazardous Substances Act 498

(the Act), authorizing the NJDEP to carry out the State's UST program. The Act, patterned after the 1984 RCRA amendments, requires the registration of UST facilities, mandates standards and permitting for new facilities, establishes leak detection and corrective action requirements, and establishes a tank improvement fimd. It also gives the NJDEP the authority to enter "at reasonable hours" any place of business to inspect, photograph, or take samples in UST 499

areas. Although the Act specifically provides that the State program is to constitute the only program regulating USTs in New Jersey, preempting local ordinances, it does not preclude local regulation where the Department determines that a more stringent local ordinance is

N.J.A.C. 7:lE-2.7(b) to (i). N.J.A.C. 7:lE-2.8. N.J.A.C. 7:lE-1.6. 49 C.F.R. $195. N.J.A.C. 7: 1E-3.4. Pub.L. 98-616; 42 U.S.C. $6991, et seq. 42 U.S.C. $6991b(7)(A). N.J.S.A. 58:lOA-21, et sea. N.J.S.A. 58:lOA-30.

New Jersey Environmental Law Handbook 500

warranted. NJDEP has developed criteria for reviewing municipal ordinan&, however no 501 ordinances have yet been approved. Since 1986, the Act has been amended twice. The first amendment made minor changes to compliance dates for the phase-in of release detection systems and altered the threshold for 502 release reporting from a numerical threshold to "a leak or discharge." See discussion on Monitoring, Release Reporting, and Investigation, infra. The Act was further amended in April 1991, adding a certification program for those providing on-site UST services, such as tank 503 removal or repair. According to an NJDEP estimate, a third of the approximately 150,000 UST systems in New Jersey discharge hazardous substances into the environment, most commonly the result of overfills, spillage, leaking tanks, or leaking pipes. Phase I of the regulations implementing the program first became effective in December 504 1987, and were limited to tank registration, certification, and fees. Comprehensive regulations were adopted in 1990, following those promulgated in 1988 by the USEPA, in an attempt to ensure that the New Jersey program complied with federal requirements. The NJDEP has applied for, but has not yet obtained program approval under RCRA, which will eliminate dual 505 federallstate regulatory schemes for USTs. Though New Jersey's UST program is modeled after the federal program, there are differences between the two. In contrast to the federal exemption New Jersey regulates USTs larger than 2,000 gallons used to store heating oil for on-site consumption in nonresidential buildings. The federal exemptions for UST systems whose capacity is 110 gallons or less, as 506 well as those holding RCRA hazardous wastes have no corresponding exemptions under New Jersey law. In New Jersey, USTs containing hazardous wastes are regulated by both the Act and 507 Solid Waste Management Act. See also Chapter 5, Hazardous Waste Management. Under federal law, only releases of petroleum exceeding 25 gallons or in excess of a hazardous

N.J.S.A. 58:lOA-35. N.J.A.C. 7:14B-11.1, et sea. L.1991, c.1. L.1991, c.123. 19 N.J.R. 2417-24 (December 21,1987).

See 40 C.F.R. Part 281. 40 C.F.R. (j280.10@). N.J.S.A. 13:lE-1, et sea.

Hazardous and Toxic Substances 508

substance's CERCLA reportable quantity must be reported. The New Jersey program requires reporting of all discharges, including petroleum and petroleum products, which are regulated as hazardous substances in New Jersey. The federal program also allows the use of either lining or 509 cathodic protection when upgrading existing UST systems. Cathodic protection is required for 510

upgrading existing UST systems in New Jersey. Even when an UST is exempt, a release of a hazardous substance will be covered by the 51 1 See Chapter 11, Hazardous and Toxic Substances. Spill Compensation and Control Act. Furthermore, exempt USTs or ISRA subject properties may also be subject to review under the ECRA program, and may be the subject of a clean up. See Chapter 111, Real Property and Business Transfers, for further discussion. 3.3.2 Applicability Under New Jersey law, an UST is defined as any one or combination of tanks and appurtenant piping used to contain an accumulation of hazardous substances, the volume of 512 which is 10 percent or more beneath the surface. For purposes of the UST program, hazardous substances are defined to include motor fuels and other petroleum products, certain pesticides, as well as substances designated as hazardous pursuant to other State and federal statutes and 513 Although similar to the federal program, the New Jersey program contains fewer regulations. exemptions, and thereby regulates more tanks. The following categories of tanks are exempted 514 from regulation in New Jersey: Farm and residential tanks with a capacity of 1,100 gallons or less used for (1) non-commercial motor fuel storage; Heating oil storage tanks of less than 2,000 gallons; (2) (3) Septic tanks; Various surface impoundments, pits, ponds, and lagoons; (4) (5) Pipelines associated with oil and gas production and natural gas transmission;

508 509 510 511 512 513 514

40 C.F.R. •˜280.53(a). 40 C.F.R. •˜280.21(b). N.J.A.C.7:14B-5.2. N.J.S.A.58:lO-23.11, et sea. N.J.S.A. 58:lOA-22p;N.J.A.C.7:14B-1.6. N.J.S.A. 58:lOA-22e;N.J.A.C.7:14B-1.6. N.J.S.A.58:lOA-22p;N.J.A.C. 7:14B-1.4(b)(l) to (14).

New Jersey Environmental Law Handbook

Stormwater and wastewater collection systems; (6) (7) Flow-through process tanks, wastewater treatment tanks, electrical equipment, and hydraulic lift tanks; and Tanks used to store heating oil for on-site consumption in a residential (8) building. 3.3.3 Registration, Permitting and Fees The Act and its regulations impose obligations on the "owner" or "operator7' of an UST. An "owner" is defined as a person who owns one or more USTs or, for a non-operational tank, 515 the person who owned the tanks immediately prior to the discontinuation of its use. For purposes of the UST program, the owner of a tank is not necessarily the same as the owner of the real property. However, under other laws such as the Spill Act and ISRA, the owner of the real property may be the legal owner of an UST and responsible for complying with the legal obligations imposed by those laws. An "operator" is any person in control of, or having responsibility for, the daily operation 516 Though a tenant may be an "operator" on the property for purposes of other of an UST. environmental laws, unless a tenant has control of a regulated tank, or responsibility for its daily operation, the tenant is not an "operator" under the UST program. Further, a tenant may be an "operator" of exempt tanks under other environmental laws. Owners and operators of regulated tanks must register each tank with the NJDEP by submitting an UST Registration Questionnaire, an Annual Certification Form, and the 517 appropriate fee. The initial registration fee is $100, regardless of the number of tanks and the 518 renewal Facility Certification, required every 3 years, is $100. The NJDEP then reviews the submissions and issues a Registration Certificate. Only tanks with valid Registration Certificates 519 may be used, and the certification must be renewed every 3 years. Since Registration Certificates are not transferable, the NJDEP must be notified of any change in ownership within 520 30 days.

515 516

517

518 519 520

N.J.S.A. 58:lOA-22j; N.J.A.C. 7:14B-1.6. N.J.S.A. 58:lOA-22i;N.J.A.C. 7:14B-1.6. N.J.A.C. 7:14B-2.1, -2.2, -3.1, -3.2, -3.3. N.J.A.C. 7:14B-3.1, -3.2. N.J.A.C. 7:14B-2.l(~),-2.2. N.J.A.C. 7:14B-2.3(b).

Hazardous and Toxic Substances Regulated tanks in existence on the act's effective date must have been registered by February 19, 1988. USTs installed after December 21, 1987, must be registered at least 30 days 52 1 prior to use. Tanks removed after September 3, 1986, must be registered for the period 522 September 3, 1986 to the date the tank was removed. Tanks must also be registered before 523

closure activities (i.e., removal, abandonment in place) are begun.

If the information provided in either the Registration Questionnaire or Annual Certification Form changes, the registration must be amended by filing a Standard Reporting Form within 30 days after completing the modification. Modifications include the sale or transfer of a facility, a substantial modification of a facility, and a change in the type of 524

hazardous substances stored. Whenever an UST is replaced, installed, expanded, or substantially modified, both a 525 construction permit and an NJDEP permit are required. Activities which either increase or decrease a facility's storage capacity, alter the physical configuration, or impair or affect the physical integrity of a facility or its monitoring systems are considered to be a "substantial 526 modification." The regulations also specify what is not included in the term "substantial 527

modification." However, if the UST will be equipped with secondary containment, the UST is 528 exempt from NJDEP permit requirements and only a construction permit is required. Emergency permits are also available for a leaking heating oil tanks where an oil burner is a 529 building's sole source of heat. 3.3.4 Performance Standards, Engineering and Operating ~ e ~ u i r e m e n t s The regulations set performance standards and engineering requirements for new UST 530 systems. New systems must be designed and installed so as .to meet the corrosion protection, spill prevention, monitoring system, and overfill protection guidelines as well as NJDEP521 522 523 524 525 526 527 528 529 530

N.J.A.C. 7:14B-2.l(d). N.J.A.C. 7:14B-2.l(e). N.J.A.C. 7:14B-2.l(f). N.J.A.C. 7: 14B-2.4. N.J.A.C. 7:14B-lO.l(a). N.J.A.C. 7:14B-1.6. Id. -

N.J.A.C. 7:14B-10.101). N.J.A.C. 7:14B-10.6. N.J.A.C. 7:14B-4.1.

New Jersey Environmental Law Handbook 531

specified installation requirements. Primary and secondary containment is required for new 532 Performance standards and installation tanks installed within wellhead protection areas. 533 requirements were also set for UST system piping. 3.3.5 Monitoring, Release Reporting, and Investigation All UST systems (tanks and appurtenant piping) are required to have a monitoring system 534

designed to detect a leak from any part of the system. The regulations also impose substantial recordkeeping requirements. Written routine monitoring procedures must be kept at the UST facility and made available for government 535 inspection. Manufacturer performance claims, sampling results, monthly inventory 536 reconciliations and all calibration, maintenance, and repair information must be kept. Any suspected "release" from an UST must also be investigated with 7 days of discovery, including such events as when inventory records show the release of more than 1 percent of a 537 The term "release" is defined broadly to tank's monthly flow-through plus 130 gallons. 538 A "leak" is the release of a hazardous substance fiom include both "leaks" and "discharges." an UST into a space created by secondary containment where it can be detected before it enters 539 the environment. A "discharge" is the release by any means of a hazardous substance from an 540 UST into the environment. When a release is suspected, the owner or operator must confirm or disprove a release by conducting an investigation, such as by checking inventory control records for mathematical accuracy, visually inspecting accessible areas, checking the calibration 54 1 If the results are of dispenser meters, or checking the monitoring system for malfunctions.

N.J.A.C. 7:14B-4.1. N.J.A.C. 7: 14B-4.l(b). N.J.A.C. 7:14B-4.l(k). N.J.A.C. 7: 14B-6.1. N.J.A.C. 7: 14B-6.7. N.J.A.C. 7:14B-6.7. N.J.A.C. 7: 14B-7.1. N.J.A.C. 7:14B-1.6. N.J.S.A. 58:lOA-22f; N.J.A.C. 7:14B-1.6. N.J.S.A. 58:lOA-22c; N.J.A.C. 7:14B-1.6. N.J.A.C. 7: 14B-7.2(a).

Hazardous and Toxic Substances inconclusive, an additional site investigation is required within 60 days of discovery of the 542 suspected release. Where a release is confirmed, the obligation to report the release is imposed on any person, including the owner or operator or a contractor hired to install, remove, or test a tank. Notification must be given immediately to the NJDEP Environmental Hotline (609-292-7172) 543

and to the local health agency.

The Department has stated that "anyone having knowledge of 544

a confirmed release has a responsibility to report that release." It has taken the position that those choosing not to comply will be subject to penalties for noncompliance as will those who 545 interfere with anyone complying with the rules. By imposing the reporting obligation on "any person," the rules go beyond the language of the Act (which requires only owner or operators to report), and are intended to induce consultants and attorneys and prospective tenants or owners conducting due diligence investigations to make reports. Furthermore, the owner and operator may have reporting obligations under other laws. 546 State reporting does not excuse CERCLA reporting to the National Response Center. It is unclear whether the reporting requirements imposed by the Spill Act, i.e., "immediate reporting" 547 and the written confirmation report, are also applicable to discharges from UST systems. See the discussion on spill reporting in Chapters I and 11, supra. Discharges of hazardous substances at ISRA "industrial establishments" must be reported to the local board of health and the 548 municipal governing body. See Chapter I11 for a discussion of ISRA. Once a release is confirmed, corrective action must be undertaken immediately. The regulations detail the various actions that must be taken to address both the source of the contamination and the steps necessary to mitigate the damage, and vary according to the 549 substance discharged. Actions include determining the source of the discharge, ceasing the 550

use of the UST system, and removing all hazardous substances from the tanks.

N.J.A.C. 7: 14B-7.2(b). N.J.A.C. 7: 14B-7.3(a). 22 N.J.R. 2781 (September 4, 1990). Id. -

42 U.S.C. •˜9603(a);40 C.F.R. $302. N.J.A.C. 7:lE-5.3, -5.8. N.J.S.A. 13:lK-15. N.J.A.C. 7:14B-8.1, -8.2. N.J.A.C. 7: 14B-8.1.

New Jersey Environmental Law Handbook New Jersey, unlike the federal law, requires the reporting of all releases; there are no de minimis quantities which do not require reporting. The regulations require remedial investigation and performance of remedial action pursuant to the Department's Technical 551 Requirements for Site Remediation. A written report detailing the nature of the discharge and the remedial investigation report must be submitted to the Department and the local health 552 department within 120 days of the confirmed release notification.

3.3.6 Out-of-Sewice and Closure Requirements The regulations impose obligations on owners and operators of empty tanks depending upon the amount of time the tanks have been out of service. Tanks that have been empty for 12 months or less are considered to be out of service, and only the maintenance of the cathodic 553 protection system is required. Permanent closure is required when the tanks have been empty for more than 12 months, subject to an extension of 12 months provided that a site assessment is 554 also submitted. For permanent closure, both the tank and any monitoring system must be 555 addressed in accordance with the Technical Standards for Site Remediation. A closure plan, including a site assessment and tank decommissioning plan, must be prepared and 556 implemented. Notice must be provided to NJDEP and the municipal and/or county health 557 department at least 30 days prior to the scheduled closure date. 3.3.7 Loan Program In 1997, the Legislature enacted the Underground Storage Tank Finance Act, which established the Petroleum Underground Storage Tank Remediation, Upgrade, and Closure Fund. The fund is available to eligible owners and operators of regulated tanks to finance the costs to upgrade or close the tanks or to remediate petroleum discharges from the tanks. The fund may provide loans, for 10 years at interest between 2 percent and the prime rate, or grants in certain 558 circumstances.

N.J.A.C. 7:14B-8.2, citing; N.J.A.C. 7:26E-4 and -6. N.J.A.C. 7: 14B-8.3. N.J.A.C. 7:14B-9.l(a). N.J.A.C. 7: 14B-9.l(d). N.J.A.C. 7: 14B-9.2(a); N.J.A.C. 7:26E-6.3(b). N.J.A.C. 7: l4B-9.2(b). N.J.A.C. 7:14B-9.2(a). N.J.S.A. 58:lOA-37.1, -37.23.

Hazardous and Toxic Substances Penalties Unlike most statutes, the Act does not provide specific penalties for violations of the Act but rather uses the penalties prescribed in the New Jersey Water Pollution Control Act, N.J.S.A. 559 58:lOA-10. The NJDEP is authorized to deny or revoke a registration or permit, to impose a civil administrative penalty, to issue an administrative compliance order, to impose civil penalties, to initiate a civil action in the New Jersey Superior Court for injunctive relief, or 560 petition the Attorney General to bring a criminal action. The use of any one remedy does not 561 preclude the use of any other remedy. Penalties are substantial, and the failure to comply with the Act or its regulations can result in civil administrative penalties of up to $50,000 per 562 violation, with each day of a continuing violation constituting a separate offense. A negligent violation constitutes a crime of the fourth degree punishable by a fine of $5,000 to $50,000 per 563 day, by imprisonment, or by both. Any person who knowingly makes a false statement or representation, or tampers with any monitoring device, is subject to a fine of $5,000 to $75,000, 564 imprisonment, or both. The regulations also set forth the procedures for requesting a hearing 565 of a penalty assessment and for a stay of the revocation of a permit. 3.3.8

TRANSPORTATION OF HAZARDOUS MATERIALS GENERAL REQUIREMENTS Under the provisions of the New Jersey Motor Vehicle Law, various state departments, through cooperative effort, are required to adopt rules and regulations concerning the 566 transportation of hazardous materials in the State. The statute requires that such regulations "to the maximum extent practicable, conform to the requirements established by 49 C.F.R. parts 567 100-199." Pursuant to that mandate, the New Jersey Department of Transportation (NJDOT) promulgated regulations which established comprehensive regulation of the shipping, packaging,

4.0 4.1

N.J.S.A. 58:lOA-32; N.J.A.C. 7:14B-12.1. N.J.A.C. 7:14B-12.l(a). N.J.S.A. 58:lOA-lO(a). N.J.S.A. 58:lOA-10(d). N.J.S.A. 58:lOA-10(f)(3). N.J.S.A. 58:lOA-10(f)(2). N.J.A.C. 7: 14B-12.2. N.J.S.A. 39:5B-26.

Id. -

New Jersey Environmental Law Handbook 568

marking, labeling, placarding, handling, and transportation of hazardous materials. These regulations apply to every person involved in the transportation of interstate and/or intrastate 569 commerce. The Superintendent of the Division of State Police adopted regulations which 570 conform to the regulations adopted by the NJDOT. In promulgating the regulations, the Department of Transportation elected to adopt by reference the Parts of the federal Hazardous Materials Regulations governing the transportation of hazardous waste, Parts 171-174 and 177-180 of Title 49 of the Code of Federal Regulations. Also adopted are Parts 380, 382 and 390 through 397571of Title 49. The department also adopted by reference Supplements and Amendments to the Federal Motor Carrier Safety Regulations, Appendices to the Federal Motor Carrier Safety Regulations, and the Federal 572 Hazardous Materials Regulations. The Federal Hazardous Materials Regulations establish shipping, marking, and labeling requirements for packages containing hazardous materials and also establish placarding for 573 vehicles depending upon the contents. Various types of materials are defined and preparations 574 for their packaging and shipment are delineated. Handling, loading, and placarding 575 requirements for transportation by rail are included. The regulations also describe shipping 576 container specifications for various types of hazardous material containers. Design 577 requirements for tank cars are also included. Specific requirements for the notification and reporting of accidents in the general regulations have been amended by a New Jersey specific amendment to Section 171.15 of the 578 federal regulations. This amendment sets forth an option of reporting accidents involving intrastate carriers not under the jurisdiction of the U.S. Department of Transportation by filing a

N.J.A.C. 16:49-1.1to 2.1. N.J.A.C. 16:49-1.2. N.J.A.C. 13:60-1.1to 2.1. N.J.A.C. 16:49-2.1. N.J.A.C. 16.49-2.1(~).

49 C.F.R. Parts 172 and 173.

Id. 49 C.F.R. Part 174. 49 C.F.R. Part 178. 49 C.F.R. Part 179.

N.J.A.C. 16:49-2.1(d)l.

Hazardous and Toxic Substances New Jersey Police Accident Report with the Division of Motor Vehicles or a Spill Report with 579 the NJDEP. A similar revision to Section 171.16 has been made regarding the filing of 580 detailed hazardous materials incidents reports. 58 1 The Federal Motor Carrier Safety Regulations regulate alcohol and controlled 582

583

584

substances use and testing, the qualifications of drivers, driving practices, and the use and 585 maintenance of motor vehicles and equipment. In some cases, New Jersey has amended these 586

regulations to alter their applicability. 4.2 EXEMPTIONS AND WAIVER The New Jersey regulation recognizes exemptions that have been granted by the U.S. Department of Transportation under Section 107, Subpart B of Title 49. Subject to review by the NJDOT, a person operating under a current valid exemption or renewal thereof under Section 107 will be deemed to be in compliance with those portions of their regulations to which the 587 exemption applies, provided that the person is complying with the terms of the exemption. In addition, in cases of unique circumstances or hardship, the NJDOT has the authority to waive the 588 applicability of any of the regulations. 4.3 PENALTIES Violations of these regulations subject the violator to a fine of not more than $5,000 for 589 the first offense, $10,000 for a second offense, and $25,000 for a third or subsequent offense.

Id. N.J.A.C. 16:49-2.1 (d)2. 49 C.F.R. Parts 390 to 397. 49 C.F.R. Part 382. 49 C.F.R. Part 391. 49 C.F.R. Parts 392,395,397. 49 C.F.R. Parts 393,396. N.J.A.C. 16:49-2 1. N.J.A.C. 16:49-1.3(d). N.J.A.C. 16:49-1.3(k). N.J.S.A. 39:5B-29.

New Jersey Environmental Law Handbook 5.0

CLEANUP STANDARDS AND TECHNICAL REQUIREMENTS FOR HAZARDOUS SITE REMEDIATION In 1993, the Legislature enacted numerous provisions relating to hazardous discharge site

remediation, which were amended or supplemented by the Brownfield and Contaminated Site Remediation Act.

These provisions covered remediation funding sources; established a

remediation fund to provide for grants, loans, and other financial assistance; and, defined restricted, limited restricted, and unrestricted remedial actions. The provisions relating to a remediation funding source require any person performing a remediation pursuant to ISRA, a Spill Act directive, a Spill Act unilateral order, or pursuant to a court order to establish a rernediation funding source. One who voluntarily performs remediation under a Memorandum of Agreement, or without Department oversight or in an environmental opportunity zone need not establish a remediation funding source. In addition, if one uses innovative technology or remediates under an unrestricted use or limited restricted use 590 remedial action, then no remediation funding source is required. The details concerning the ways to establish and use a remediation funding source are discussed in this Handbook in the section relating to the Industrial Site Remediation Act. The remediation fund established in the Brownfield and Contaminated Site Remediation Act is available to provide financial assistance to those performing remediation. A preference is given to those seeking money fi-om the fund who are municipal government entities, the New Jersey Redevelopment Authority, those using innovative technology, those performing an unrestricted use or a limited restricted use remedial action, those remediating in an environmental opportunity zone, and those who are volunteers. All other applicants to the fund 591 must show financial need. The financial assistance may be a loan. For certain government entities, volunteers, persons using innovative technology, persons performing unrestricted use of limited restricted-use remedial actions, and innocent purchasers, the financial assistance may be a grant. An innocent purchaser is eligible for a grant if they purchased before December 31, 1983, did not use the hazardous substance discharged, and did not discharge any hazardous 592 substance in the contaminated area.

590

59 1 592

N.J.S.A.58:lOB-3. An environmental opportunity zoned is defined in N.J.S.A.54:4-3.152 and -3.153 must be so designated by the local governing body by ordinance and qualifies for certain property tax exemptions upon payments in lieu of taxes. N.J.S.A.58:lOB-3. N.J.S.A. 58:lOB-6.

Hazardous and Toxic Substances

Under these provisions, a limited restricted-use remedial action means one that requires continued use of institutional controls, such as use restrictions and deed notices, but not the use of engineering controls, such as caps, covers, fences, and physical access controls. Restricteduse remedial action means one that requires continued use of engineering and institutional controls. Unrestricted use remedial action means one that does not require use of institutional or 593

engineering controls. The Brownfield and Contaminated Sites Remediation Act also required the Department to adopt minimum remediation standards for soil, groundwater, and surface water, necessary for the remediation of contamination of real property, based on location, surroundings, intended use 594 of the property, potential exposure, and the surrounding conditions. In Federal Pacific Electric 595 Co. v. New Jersey Department of Environmental Protection, the Court held that the Groundwater Quality Standards cannot be deemed minimum groundwater remediation standards under N.J.S.A. 58:lOB-12(a) because the Department had not given clear notice in any rulemaking proceeding that it would treat them as minimum groundwater remediation standards. The Court held that until valid minimum groundwater remediation standards were adopted, the Department must evaluate groundwater remediation on a case-by-case basis pursuant to N.J.S.A. 58:lOB-12(a). In 2003, the Department again sought to use the Groundwater Quality Standards as 596 minimum groundwater remediation standards, after undertaking formal rulemaking. Again, Federal Pacific brought a challenge to the validity of the use of the Groundwater Quality Standards for that purpose. In part, the challenge focused on the Department's decision to outright forbid the use of site-specific remediation standards for groundwater. The Appellate Division found that while the technical and legal arguments presented by Federal Pacific had merit, the court was bound by agency deference. The opinion strongly suggested that the New Jersey Legislature should revisit the Brownfield Act, if it wished to make clear that site-specific 597 remediation standards are to be permitted in New Jersey.

593 594 595 596

597

N.J.S.A.58:lOB-1. N.J.S.A. 58:lOB-12(a). 334 N.J. Super. 323 (App. Div. 2000). 35 N.J.R. 710(a) (Feb. 3,2003). Federal Pacific Electric Co. v. N.J.D.E.P., 377 N.J. Super. 78, 781 A.2d 711 (App. Div. 2006), affd 186 N.J. 81,891 A.2d 1203 (2006) (per curium).

New Jersey Environmental Law Handbook SOIL CLEANUP STANDARDS When the Department chose not to adopt its 1992 proposed cleanup standards, it elected on a case-by-case basis to use as criteria various portions of the proposed cleanup standards. A copy of the current soil cleanup criteria can be found at the Department's web site at http://www.ni.nov/dep/srr>/re~s/scc/. At the time of tlvs edition, the Department has been 598 engaged in a 2-year process to substantially redraft its soil cleanup standards; it is not known what form the new standards will take, or if the current proposals will be finalized. The criteria present two concentration levels: (1) those for residential direct contact soil cleanup criteria and (2) those for impact to groundwater soil cleanup criteria. Generally, the criteria for direct contact are health based using assumptions of incidental exposure. The 599 Department is willing to consider adjusting the criteria based on site-specific factors. With the enactment of the Brownfield and Contaminated Site Remediation Act, there is different terminology used in that Act and the criteria. Generally, however, the residential direct contact soil cleanup criteria apply for unrestricted-use remedial action and non-residential direct contact soil cleanup criteria apply for restricted-use or limited restricted-use cleanup criteria. In addition to compound specific standards, general organic contaminants are dealt with separately. Total organic contaminants, including petroleum hydrocarbons, may not exceed 10,000 ppm. Total volatile organic contaminants may not exceed 1,000 ppm. Moreover, when the level of volatiles in the soil is between 100 and 1,000 ppm, one must conduct an assessment to determine whether the volatile contaminants emit vapors that pose a "risk to nearby subsurface 600 structures." 5.2 BUILDING INTERIOR CLEANUP STANDARDS Building interiors do not have a separate set of cleanup standards under current Department practice. Pursuant to the Department's Technical Requirements for Site 60 1 Remediation regulations, building interiors must be part of a site investigation when contaminants inside the building have the potential to migrate to the environment outside the 602 building.

5.1

598 599

600 601 602

36 N.J.R. 3395(a) (July 19,2004). See http:llwww.ni.aovldep/srp/rens/scc/. 11tto:liwww.ni.aovldenlsrp/re~s/scci. N.J.A.C. 7:26E.

N.J.A.C. 7:26E-3.5.

Hazardous and Toxic Substances GROUNDWATER QUALITY STANDARDS There are three major classes of groundwater. Class I is groundwater of special ecological significance. Class I groundwaters consist of groundwater in designated natural areas, those within FW1 surface waters, or within the Pinelands. Class I groundwater standards are the

5.3

603

most stringent. Generally, the standards prevent any discharge fiom human activity from degrading groundwater. Depending on the specific aquifer, the standard is expressed as "natural quality," or "background water quality."

604 605

Class I1 groundwater is existing and potential potable water sources. The specific standards for Class I1 groundwater are contained in an appendix to the regulations and are the higher of health-based criteria or the practical quantitation level of available analytical testing 606 equipment.Class I11 groundwater is for uses other than potable water supply. This groundwater is not suitable for potable use because of natural characteristics or natural water quality. The most typical Class I11 groundwater is near the ocean such that saltwater intrusion makes the 607 groundwater inappropriate for potable use. Class I11 groundwater standards are set on a caseby-case basis. Among the factors to be considered is how migration of groundwater, either to or 608 from the area under investigation, should influence the appropriate standard. These standards contain two additional provisions worth noting: (1) the antidegradation policy and (2) procedures for exceptions to the classification system and for reclassification of groundwater. The antidegradation policy is designed to protect fiom significant degradation groundwater of better quality than the applicable standards. The policy applies most significantly to Class I1 groundwater. The regulations express the Class I1 groundwater antidegradation standard in a formula: standard = background + (general standard-background) x 50%. The effect of the policy can be seen in the following hypothetical example. If the standard for a particular chemical constituent is 10 ppb and the background level of that 609

constituent is 2 ppb, then the formula would yield: standard = 2 + (10-2) x 50% = 6 ppb.

603 604 605 606 607 608 609

N.J.A.C. 7:9C-1.5. N.J.A.C. 7:9C-l.7(a) & (b). N.J.A.C. 7:9C-1.5. N.J.A.C. 7:9C - Appendix Table 1. N.J.A.C. 7:9C-1.5(f)(3). N.J.A.C. 7:9C-1.7(e) & (f). N.J.A.C. 7:9C-1.8.

New Jersey Environmental Law Handbook When the Department determines that the standards in a localized groundwater area are not being met, it may establish a Classification Exception Area. The Department must restrict potable water uses in any Classification Exception Area where primary drinking water quality 610 standards are not met. If a private party wants to change a groundwater classification, they may do so by petitioning for a rulemaking to the Department to obtain the reclassification. The rulemaking petition must include information on groundwater quality, hydrogeologic analysis, and 61 1 evaluation of environmental, economic, and social factors that support the petition. 5.4 TECHNICAL REQUIREMENTS FOR SITE REMEDIATION In New Jersey, remediation of a contaminated site is governed by the Department's 612 Technical Requirements For Site Remediation Regulations. The regulations provide detailed requirements for investigating and remediating contaminated sites. Among the investigatory requirements are provisions dealing with preliminary assessments and site investigations. Preliminary assessments are performed to identify the presence of any potentially contaminated areas of concern. A preliminary assessment looks at historical information about the site, from Sanborn Fire Insurance Maps and other sources, from 613 "the time the site was naturally vegetated or utilized as farmland," and a site visit. The results of the preliminary assessment are to be described in a preliminary assessment report, the format 614 of which is prescribed in the regulations. If areas of concern are identified in the preliminary assessment, then a site investigation must be performed. The site investigation includes sampling to determine if any contaminants are present at the site above unrestricted-use standards or if no further remediation is required. The specific details of the sampling required for a site investigation are detailed in the 615 regulations, as is the required format for the site investigation report. A baseline ecological 616 evaluation for each area of concern is required as part of the site investigation.

610 611 612 613 614 615 616

N.J.A.C. 7:9C-1.6. N.J.A.C. 7:9C-1.10. N.J.A.C. 7:26E. N.J.A.C. 7:26E-3.1. N.J.A.C. 7:26E-3.2. N.J.A.C. 7:26E-3.3 to -3.13. N.J.A.C. 7:26E-3.11.

Hazardous and Toxic Substances A remedial investigation is required at each area of concern where contaminants exceed the applicable remedial action standard. The remedial investigation delineates the contamination and provides sufficient data to evaluate remedial action alternatives. The requirements for the remedial investigation, as well as the format of the remedial investigation report, are set forth in 617

great detail in the regulations.

The regulations also give detailed requirements for the selection, performance of, and 618 reporting concerning remedial actions.

TOXIC CATASTROPHE PREVENTION ACT 619 The New Jersey Toxic Catastrophe Prevention Act (TCPA) was enacted to prevent catastrophic environmental occurrences due to unexpected accidental releases of Extraordinarily Hazardous Substances (EHSs). The Act requires facilities that handle EHSs to anticipate the numerous circumstances that could give rise to an accidental chemical release in light of the facility's standard operating procedures, safety equipment, and personnel training programs. Facilities subject to the Act must have in place programs and procedures to avoid such an occurrence and to respond to accidents. The regulatory program contains three major requirements. Facilities are required to register with the NJDEP, to develop a Risk Management Program, and to disclose particularized information concerning the facility and its operations to the NJDEP. In readopting the regulations, the NJDEP also incorporated, with modification, the federal Chemical Accident 620 Prevention Provisions. 6.1 FACILITY REGISTRATION 62 1 Under the TCPA, any facility which, at any one time, handles, uses, manufactures, or stores an EHS in a quantity equal to or greater than the registration quantity established for that substance, or which has the capacity to generate the registration quantity of an EHS within 1

6.0

617 618 619 620

62 1

N.J.A.C. 7:26E-4.1to -4.8. N.J.A.C. 7:26E-Subchapters 5 through 7. N.J.S.A. 13:lK-19 to 32. 40 C.F.R. Part 68.

The Act defines "facility" as "a building, equipment, and contiguous area." N.J.S.A. 13:lK-21(h). Research and development laboratories are expressly excluded. An exempted research and development laboratory is defined as: "[A] specially designated area used primarily for research, development, and testing activity, and not primarily involved in the production of goods for commercial sale, in which extraordinarily hazardous substances are used by or under the supervision of a technically qualified person." N.J.S.A. 13:1K-21(h).

New Jersey Environmental Law Handbook 622

hour, is required to register with the NJDEP. Anyone planning to construct a new facility that 623 will handle EHSs must register with the NJDEP at least 90 days prior to construction. 624 An EHS is: [Alny substance or chemical compound used, manufactured, stored, or capable of being produced from on-site components in this State in sufficient quantities at a single site such that its release into the environment would produce a significant likelihood that persons exposed will suffer acute health effects resulting in death or permanent disability. The TCPA designated an initial list of 11 chemicals as EHSs and a registration quantity 625 for each. The NJDEP, pursuant to its authority under the Act, has adopted by regulation over 180 chemicals, including the recent addition of reactive hazard substances, and a registration 626 threshold quantity for each. 6.2 RISK MANAGEMENT PROGRAM Under the TCPA and its regulations, every facility subject to the Act must have or develop a Risk Management Program designed to prevent or reduce accidental releases of EHSs. While USEPA has defined three program levels (Programs 1 through 3), NJDEP only uses Program levels 2 and 3. Qualifymg for a particular program level is based on the applicable industrial classification code assigned to each EHS process and whether any of these processes 627 are subject to OSHA's Process Safety Management Standard 29 C.F.R. $1910.1 19. For the Program 2 level, an approved Risk Management Program must include, at a 628 minimum: Safety Information and Hazard Review: The owner or operator must (1) compile and maintain up-to-date safety information related to the regulated substances, processes, and equipment and ensure that the covered process is designed in compliance 629 with recognized and generally accepted good engineering practices. Every 5 years or

N.J.A.C. 7:3 1-l.l(c)(2)(iii). N.J.A.C. 7:31-3.4 & 4.11. N.J.S.A. 13:lK-21(e). N.J.S.A. 13:lK-22(a). N.J.A.C. 7:3 1-6.3. 40 C.F.R. $68.12(d). N.J.A.C. 7:31-3. 40 C.F.R. 568.48.

Hazardous and Toxic Substances whenever a major change in the process occurs, the owner or operator must also conduct a review of the hazards associated with the regulated substances, process and 630 procedures. The review must be documented and any problems identified in the 63 1 review must be resolved in a timely manner; Standard Operation Procedures: The owner or operator must prepare and (2) update written operating procedures (in English or the language of the EHS operators not fluent in English) providing clear instructions for safely conducting activities associated with each covered process, including procedures on (i) initial startup; (ii) normal operations; (iii) temporary operations; (iv) emergency shutdown and operations; (v) 632

startup procedures; and (vi) equipment inspections; (3) Maintenance Program: The owner or operator must prepare and implement procedures to maintain the on-going mechanical integrity of the process 633 equipment. The owner or operator must also perform inspections and tests on the 634 process equipment and properly train its employees on maintaining such equipment; Training Promam: The owner or operator must ensure that each employee (4) operating a covered process has been trained and tested competent in the operating 635 procedures that pertain to their duties; EHS Accident or Potential Catastrophic Event Investigation Procedures: (5) The owner or operator must investigate each incident that results in or could have 636 reasonably resulted in a catastrophic release; and Compliance Audits: Every 3 years, the owner or operator must conduct a (6) compliance audit and certify that they have evaluated compliance with the Risk 637 Management Program requirements. For the Program 3 level, an approved Risk Management Program must include, at a 638 minimum:

40 C.F.R. $68.50(a)(d). 40 C.F.R. $68.50(c). N.J.A.C. 7:31-3.1(c)(3); 40 C.F.R. $68.52. 40 C.F.R. $68.56.

Id. 40 C.F.R. $68.54. N.J.A.C. 7:31-3.1(c)(7); 40 C.F.R. $68.60. 40 C.F.R. 568.58. N.J.A.C. 7:31-4.

New Jersey Environmental Law Handbook Process Safety Information and Process Hazard Analysis: The owner or (1) operator must compile written process safety information, including information about the hazards of the regulated substances used or produced by the process, and information 639 This information is then about the technology of and equipment used in the process. 640 This utilized by the owner or operator to perform an initial process hazard analysis. analysis must identify, evaluate, and control the hazards involved in the covered 64 1 process; Standard Operating Procedures: The owner or operator must prepare and (2) update written operating procedures (in English or the language of the EHS operators not fluent in English) providing clear instructions for safely conducting activities associated with each covered process, including procedures on (i) initial startup; (ii) normal operations; (iii) temporary operations; (iv) emergency shutdown and operations; (v) normal shutdown and startup procedures; (vi) operating limits; and (vii) safety and health 642 considerations; Traininn Promam: The owner or operator must ensure that each employee (3) operating a covered process has been trained in an overview of the process and in the operating procedures, including an emphasis on specific safety and health hazards, emergency operations, and safe work practices, and tested competent in the operating 643 procedures that pertain to their duties; Mechanical Integrity and Preventive Maintenance Program: The owner or (4) operator must prepare and implement written procedures to maintain the on-going mechanical integrity of the process equipment. The owner or operator must also perform inspections and tests on the process equipment and properly train its employees on 644 maintaining such equipment;

639 640

641 642

643 644

40 C.F.R. 568.65. 40 C.F.R. 568.67. Id. N.J.A.C. 7:31-4.1(c)(8) and 4.3;40 C.F.R. 568.69. N.J.A.C 7:31-4.4;40 C.F.R. $68.71. N.J.A.C. 7:31-4.5;40 C.F.R. $68.73.

Hazardous and Toxic Substances Annual Compliance Audits: The owner or operator must conduct an annual compliance audit and certify that they have evaluated compliance with the RMP 645 requirements; and EHS Accident or Potential Catastrophic Event Investigation Procedures: (6) The owner or operator must investigate each incident that results in or could have (5)

reasonably resulted in a catastrophic release of a regulated substance no later than 48 646

hours after the incident. For both Program 2 and 3 levels, the owner or operator must develop and implement an 647 emergency response program for the protection of public health and the environment. If a facility has already developed its own Risk Management Program, it must be submitted to the NJDEP for review. The NJDEP then audits the program. If the NJDEP determines that the existing Risk Management Program contains only relatively minor deficiencies, the NJDEP proposes a draft consent agreement whereby the facility agrees to 648 undertake actions necessary to correct those deficiencies. The facility has 120 days after receipt of the draft consent agreement to submit proposals to the NJDEP to correct the 649 deficiencies. If the NJDEP and the facility reach agreement following these proposals, then a 650 consent agreement is entered into between the parties. If the parties cannot agree on remedying the deficiencies, the NJDEP will issue an administrative order instructing the facility which actions to take to correct the Risk Management Program and will inform the facility of its 651 right to an adjudicatory hearing. If a facility does not have a Risk Management Program, or if an existing program has substantial deficiencies and does not obtain NJDEP approval, the regulations mandate a complex 652 step-by-step approach to developing an approved Risk Management Program.

N.J.A.C. 7:31-4.1(~)(13);40 C.F.R. $68.79. N.J.A.C. 7:31-4.1(~)(15);40 C.F.R. $68.81. N.J.A.C. 7:31-5.1,5.2; 40 C.F.R. $$68.90,68.95. N.J.A.C. 7:31-8.1(~)(9).

Id. Id. -

Id. N.J.A.C. 7:31-7.3(e); 7:31-9.

New Jersey Environmental Law Handbook INFORMATION DISCLOSURE As part of the Risk Management Plan submission to NJDEP, facilities are required to submit significant detailed information regarding the facility and its operations, including worstcase release scenarios, 5-year accident history, and identification of EHS substances at the

6.3

653

facility. As part of the initial facility registration, the registrant must submit, among other information, the insurance carriers underwriting the site's environmental liability and workers compensation insurance policies, the type of policy, the amount of insurance, and any exclusions 654 or limitations. If the NJDEP determines that further information in the hands of the insurance carriers is necessary to evaluate effectively the facility's management practices, the NJDEP may require that the registrant authorize release of information from its insurers such as reports of 655 inspections or safety audits. All information collected by the Department generally is available to the public, except information protected as confidential, privileged, trade secrets, or security information. The NJDEP has established detailed procedures whereby registrants can make confidentiality or trade 656 secret claims. Information that qualifies as confidential must still be disclosed to the Department, however, it will be kept confidential within the Department and will not be disclosed to the public. The confidentiality claim must be made at the time the information is submitted. Generally, any confidentiality claim will be honored by the Department unless the Department specifically questions the information's confidentiality due to an internal decision to test the confidentiality of the information it possesses, a desire to release the information to the public, or 657 a request is made pursuant to N.J.S.A. 47:lA-1, et seq., to inspect or copy the information. When a challenge to confidentiality is made, the Department notifies the registrant that it must 658 supply substantiation of the confidentiality claim. A registrant can petition to withhold, even from the Department, certain privileged trade secrets or security information. However, the Department requires substantiation of the claim at

653 654 655 656 657 658

N.J.A.C. 7:31-7.2; 40 C.F.R. ~~68.160,68.165,68.170,68.175. N.J.A.C. 7:3 1-7.2(a)(iii). N.J.A.C. 7:31-1.12. N.J.A.C. 7:31-10.1 to 10.11. N.J.A.C. 7:31-10.5.

Id. -

Hazardous and Toxic Substances the time the petition to withhold such information is submitted. The regulations set out specific schedules for when petitions to withhold information, together with the substantiation, must be 659 submitted to the NJDEP and what types of information are entitled to be withheld. 6.4 ENFORCEMENT AND PENALTIES The NJDEP has the right to enter any site in order to ascertain compliance with the Act or its regulations. That right includes, in addition to sampling any materials on site and sketching or photographing any portion of the site, the right to interview employees. The regulations require that owners, operators, and their employees affirmatively assist the Department in the 660

performance of any inspection. Violations of the Act or its regulations are punishable by civil administrative penalties of up to $10,000 for the first violation, up to $20,000 for the second, and up to $50,000 for each subsequent violation. If the violation is of a continuing nature then each day that the violation continues is considered a separate and distinct violation. The NJDEP may seek a court order to prevent or prohibit violations of the Act or regulations, or to enforce an administrative order and 66 1 the court may impose a fine of up to $10,000 per day.

WORKER AND COMMUNITY RIGHT TO KNOW OVERVIEW 662 The New Jersey Worker and Community Right to Know Act (the "act") was enacted in 1983 with the express purpose of requiring disclosure of information about hazardous substances to workers and the public in order that they may learn the "full range of the risks they face so that they can make reasoned decisions and take informed action concerning their employment and 663 their living conditions."

7.0 7.1

659

660 66 1 662

663

N.J.A.C. 7:31-10.6. N.J.A.C. 7:3 1-8.2. N.J.S.A. 13:1K-30. N.J.S.A. 34:5A-1, et sea The Act was initially amended in 1989, and further amended in 1991. L.1989, c.155; L.1991, c.35; L.1991, c.235. The 1989 amendment required the New Jersey Department of Health to establish a certification program for paid consultants providing education and training programs to employers. L. 1989, c.155; N.J.S.A. 34:5A-13d to 13g. The first amendment in 1991 exempted non-profit, non-public schools, colleges, and universities from the payment of fees, from which public institutions were already exempt. L.1991, c.25; N.J.S.A. 34:5A-3h to 13. The second 1991 amendment added the pollution prevention reporting obligations. L.1991, c.235; N.J.S.A. 34:5A-3k. In 2003, the Legislature enacted a minor amendment to raise slightly the fees to be paid by employers. L.2003,C.117,$19; N.J.S.A.34.5A-26. N.J.S.A. 34:5A-2.

New Jersey Environmental Law Handbook As originally enacted, New Jersey's Right to Know requirements were patterned after the 664 Right to Know portion of the Federal Occupational Safety and Health Act, and antedate Title 665 The regulatory requirements of the Act are divided into two main categories. I11 of SARA. Regulations addressing worker or employee safety ("'worker safety") require employers to inform and train employees regarding hazardous substances they may be exposed to in their workplace, and are promulgated and enforced by the New Jersey Department of Health 666 The second category requires submission of hazardous chemical information to (NJDOH). State and local emergency response agencies ("community information") so that they can 667 The properly prepare for emergencies such as fires and explosions, or discharges and spills. community information regulations are promulgated and enforced by the NJDEP. The New Jersey Right to Know law provides certain employment rights to workers as well. For example, an employee may make a written request for a copy of any document the employer is required to maintain under the Act, and the employer must provide the information to the employee within 5 working days of the request. An employee also has the right to refuse to work with a hazardous substance, without loss of pay or any other privilege, until the request 668 is honored. An employer may not discharge, or otherwise discipline, penalize, or discriminate 669 against any employee for exercising a right provided under the law. The New Jersey Right To Know Act is not applicable to all employers but is rather limited to only those employers engaged in business operations that have a covered North 670 671 American Industry Classification System (NAICS) codes.

7.1.1 Preemption Because the New Jersey Act so closely parallels the federal OSHA Hazard

29 U.S.C. •˜•˜651-678;29 C.F.R. (j1910.1200. Superfund Amendments and Reauthorization Act, 42 U.S.C. $9601, $•˜11001-11050. Title I11 of SARA is also known as the "Emergency Planning and Community Right-To-Know Act." N.J.A.C. 859-1.1, et sect. N.J.A.C. 7:lG-1.1, et sect. N.J.S.A. 34:5A-16a. N.J.S.A. 34:5A-17. NAICS codes are published by the Federal Office of Management and Budget. N.J.A.C. 7:lG-1.2. Originally, N.J.S.A. 34:5A-3(h) listed covered Standard Industrial Classification (SIC) Codes. The Federal Office of Management and Budget, in 2002 replaced the SIC Codes with NAICS Codes, and N.J.A.C. 7:lG-1.2 reflects this change.

Hazardous and Toxic Substances 672

Communication Standard, the New Jersey Chamber of Commerce challenged it, asserting that 673 674 it was preempted by the OSHA Standard. After lengthy litigation the federal courts, finding that the OSHA standard generally preempted worker safety provisions, held that employers covered by the OSHA Standard did not have to comply with certain provisions of the New Jersey Act and its regulations. Specifically, the courts held that private sector employers that are within the SIC, now NAICS, codes covered by the Act were not required to comply with the NJDOH's 675 worker safety regulations, with the exception of the container labeling requirements. See discussion of container labeling infia. The court found that the container labeling requirements had a community information function to inform firefighters and other emergency responders in cases of on-site emergencies and thus was not solely a worker safety provision preempted by OSHA. Private sector employers that are within the SIC, now NAICS, codes covered by the Act are required to comply with the NJDEP's community information requirements. discussion

infra.

Finally, public sector employers (i.e., government entities and non-profit, non-public schools) are required to comply with the provisions of the New Jersey Act, with the exception of 676 the fee assessment provisions. 7.2 WORKER SAFETY PROGRAM 7.2.1 Introduction The NJDOH's worker safety regulations include three major requirements: (1) to report to the NJDOH and local health, police, and fire departments an inventory of workplace

The OSHA Hazard Communication regulation, 29 C.F.R. •˜1910.1200(a), (b), originally addressed "the issues of evaluating and communicating chemical hazards to employees in the manufacturing sector and to pre-empt any State law pertaining to this subject." However, as a result of litigation brought by an employee union, the reach of the OSHA Hazard Communication Standard was expanded to cover essentially all private employers whose employees may be exposed to hazardous chemicals in their normal work situation. The expanded applicability of the Standard took effect on June 24, 1988. See, 53 Fed. Reg. at 27,629 (July 22, 1988). New Jersey State Chamber of Commerce v. Huahey, 600 F.Supp. 606 (D.N.J.), aff d in Dart. rev'd in Dart, 774 F.2d 587 (3rd Cir. 1985). New Jersey Chamber of Commerce v. Hughey, 868 F.2d 621 (3rd Cir.), cert. denied, 492 U.S. 920, 109 S.Ct. 3246, 106 L.Ed.2d 593 (1989). Since the OSHA Hazard Communication Standard applied at the time of the Hughev decisions only to the manufacturing sector, the courts similarly preempted only that sector from the workplace regulations. However, as of June 24, 1988, the standard was expanded to include all private sector employees. As a result, New Jersey promulgated regulations which acknowledge that all private employers are preempted from NJDOH's workplace regulations, with the exception of container labeling requirements. See, N.J.A.C. 8:59-11.1, et sea. N.J.S.A. 34:5A-3h. amendment.

The inclusion of non-profit, non-public schools was added by the first 1991

New Jersey Environmental Law Handbook 677

hazardous substances present at the facility; (2) to educate and train employees on the proper use of hazardous substances they handle; and (3) to label all containers with the chemical name of its contents. As discussed supra, private sector employers subject to the Act need only comply with container labeling requirements. 7.2.2 Requirements of the New Jersey Worker Safety Regulations

Workplace Survey A public employer subject to the NJDOH's worker safety regulations must submit a 678 Right to Know Survey, identifying all hazardous chemicals present at its facility. The hazardous substances subject to the workplace survey include all substances regulated under the OSHA regulations, any environmental hazardous substance, and any other substance the 679 Department of Health determines poses a health or safety threat to employees. There are exclusions to the definition of hazardous substance set forth in the regulations, which exclusions 680 include: Any article containing a hazardous substance if the hazardous substance is (1) present in a solid form which does not pose any acute or chronic health hazard to an employee exposed to it; Any hazardous substance constituting less than 1 percent of a mixture (or (2) less than 0.1 of 1 percent for carcinogens, mutagens, and teratogens) unless the hazardous substance is present in an aggregate amount of 500 pounds or more in a container at a facility; Any hazardous substance present in the same form and concentration as a (3) product packaged for distribution and use by the general public, for which an employee's exposure during handling is not significantly greater than a consumer's exposure; Any fuel in a motor vehicle. (4)

677

678

679

The term "facility" is defined as the building, equipment, and contiguous area at a single location used for the conduct of business. N.J.S.A. 34:5A-31. However, under the NJDOH's worker safety program, the term "facility" does not include a research and development laboratory e x c a t that research and development laboratories must provide an education and training program and must develop a container labeling supplement. Id. N.J.A.C. 8:59-2.1(b). If an employer believes that disclosing information which is required by the Act will reveal a trade secret, a trade secret claim can be filed in accordance with the requirements set forth in the statute and implementing regulations. See, N.J.S.A. 34:5A-15; N.J.A.C. 8:59-3.1, et sea., and N.J.A.C. 7:16-6.1, et sea. N.J.S.A. 34:5A-5a.

Hazardous and Toxic Substances

Public employers must submit the completed workplace inventory survey to the NJDOH, the county health department, the local health department, the Local Emergency Planning Committee, local fire department, and local police department within 90 days of receipt of the 68 1 form from NJDOH. The survey must be filed every 5 years and revised to include new 682 hazardous substance every year. On the workplace survey, a public employer must report the hazardous substances which 683 The hazardous are present at its facility in alphabetical order on each page of the survey. substances must be reported by the common name and Chemical Abstracts Service (CAS) 684 number. In order for the NJDOH to enforce compliance with the law, a public employer is required to maintain records which indicate which hazardous substance components are present 685 in which substances, mixtures, or intermediaries. The NJDOH can also request employers to report any other information which it determines "to be reasonably necessary in order to carry 686 out its responsibilities under the Act." The regulations also permit any county health department, local police department, or local fire department to request from a public employer submitting a workplace survey further 687 information about the survey, except for trade secret information. The employer must respond 688 to this request for information within 30 days. Hazardous Substance Fact Sheets

Upon NJDOH's receipt of the employer's workplace survey, the NJDOH is required to submit to that employer a hazardous substance fact sheet, and its Spanish translation, for each 689 hazardous substance reported on the workplace survey. The public employer must keep

N.J.A.C. 8:59-2.1(d). N.J.A.C. 8:59-2.1(b) and (c). N.J.A.C. 8:59-2.2(a). Id. N.J.A.C. 8:59-2.2(b). N.J.A.C. 8:59-2.2(d). N.J.A.C. 8:59-2.3(a). Id. N.J.A.C. 8:59-4.3(a), -4.3(d).

New Jersey Environmental Law Handbook copies of the workplace survey and the hazardous substance fact sheets in a central file which is 690 accessible to the facility's employees. Training Public employers covered by the NJDOH regulations are also required to establish an education and training program, consistent with the Public Employee Occupational Safety and Health Hazard Communication Standard, adopted May 3,2004.

691

The employer must submit a certification that employees who are exposed to hazardous substances have received an education and training program, as outlined above. This 692 certification must be submitted with the annual workplace survey.

7.2.3 Labeling General Requirements 693 All containers must bear a label with: (1) the name and CAS number of all hazardous substances in the container, and (2) that are among the five most predominant substances in the 694 container. Every container in which more than 1 percent of the contents are unknown must bear a 695 label stating "Contents Unknown" or "Contents Partially Unknown." In addition to the foregoing requirements, both private and public employers are also required to label pipelines at the valve where the pipeline enters the facility and at valves 696 designed to allow release of the pipeline's contents. Research and development laboratories are permitted to label containers with a code or number system, if the code or number system 697 enables an employee to readily make cross-references to a hazardous substance fact sheet. For warehouses, and storage or transfer facilities where containers are not opened, the containers need only be labeled in accordance with regulations of the U.S. Department of Transportation,

N.J.A.C. 8:59-7.2(a). N.J.A.C. 8:59-6.l(a).The details of the training program under the PEOSH Hazard Communication Standard are set forth at N.J.A.C.12: 100-7 N.J.A.C. 8:59-6.l(d). The term "container" is defined to include bottles, bags, barrels, boxes, cans, cylinders, drums, cartons, vessels, vats, and stationary or mobile tanks, but excludes process containers. N.J.A.C. 8:59-1.3. N.J.A.C. 8:59-5.1(c) N.J.A.C. 8:59-5.1(b). N.J.A.C. 8:59-5.2. N.J.A.C. 8:59-5.3.

Hazardous and Toxic Substances 698

If a public or private subcontractor stores hazardous or 40 C.F.R. 5 172.101 and 172.102. other substances at a public employer's facility, the public employer must ensure that the 699 containers are labeled in accordance with the relevant requirements. For purposes of the NJDOH requirements a label can be a sign, emblem, sticker, or 700 marker of a durable nature affixed to or stenciled onto a container. The label must be easily 70 1

readable

702

and prominently displayed.

Exceptions to Labeling Requirement 703 The NJDOH requirements provide for exceptions to the labeling requirement. Without detailing each, the following examples are illustrative of those exceptions which are commonly applicable: containers which have been labeled pursuant to the requirements of the Federal 704 Insecticide, Fungicide & Rodenticide Act, 7 U.S.C. $121, et seq.; and containers labeled with shipping names of substances with identification numbers from certain portions of US. DOT'S 705 Hazardous Materials Tables may be substituted for the information required by the NJDOH if the name on the container is identical to the chemical or common name on the Right to Know 706 Hazardous Substance List. Similarly, containers holding waste material which have been labeled pursuant to RCRA and the SWMA will constitute compliance with the labeling 707

requirement. Exclusions from Labeling Requirements In addition to the exceptions for alternative labels, the NJDOH requirements also exclude containers containing certain categories of hazardous or other substances from its labeling 708

requirements,

including:

N.J.A.C. 859-5.1(d). N.J.A.C. 859-5.10. N.J.A.C. 859-5.8(a). N.J.A.C. 8:59-5.8(b). N.J.A.C. 859-5.8(~). See N.J.A.C. 859-5.5.

N.J.A.C. 859-5.5(a). 49 C.F.R. (j•˜172.101,172.102. N.J.A.C. 859-5.5(b). N.J.A.C. 859-5.5(~). N.J.A.C. 8:59-5.6(a).

New Jersey Environmental Law Handbook Any article containing a hazardous or other substance in a solid form and (1) which is not used in a manner which changes its physical form and which does not pose any acute or chronic health hazard when exposed; Any hazardous or other substance constituting less than 1 percent of a (2) mixture unless the substance is present in an aggregate amount of 500 lbs or more in a container at the facility; Any special health hazard substance constituting less than the threshold (3) percentage established by the NJDOH for that substance when present in a mixture. The threshold percentage for carcinogens, mutagens and teratogens is 0.1 percent; (4) Any hazardous or other substance present in the same form and concentration as a product packaged for distribution and use by the general public and the employee's exposure is not significantly greater than would be a consumer's exposure; and Fuel in a motor vehicle. (5) In addition, process containers, and directly associated piping, whose contents change with the same frequency as the contents of the process are excluded from the labeling 709 requirement. However, this exclusion does not apply to valves, outlets, vents, drains, and sample connections. Finally, a container which is removed from a larger container that is labeled, which is used immediately by the employee who performs the removal and is used up during his work 710 shift, need not be labeled. 7.3 COMMUNITY INFORMATION 7.3.1 Introduction The community information program requires that covered employers supply inventory 711 information to the NJDEP and local authorities concerning environmental hazard substances at their facility. 7.3.2 Facilities Covered by the NJDEP's Community Information Regulations The NJDEP's community information program consists of two informational surveys; the 712 Environmental Survey form (DEQ-094) and the Right to Know Supplemental Information form (DEQ-100). 709 710 711 712

N.J.A.C.8:59-5.6(b). N.J.A.C.8:59-5.6(~).

"Environmental hazardous substances" are listed in N.J.A.C.7: 1G-2.1. The community information regulations provide that covered facilities must submit an Environmental Survey and an Emergency Services Information Survey. See N.J.A.C. 7: 1G-3.1; N.J.A.C. 7: 1G-5.

Hazardous and Toxic Substances Facilities that are required to submit the Environmental Survey form include all employers in the NAICS codes covered by the Act. As discussed supra, the federal courts held that employers covered by the OSHA Hazard Communication Standard were preempted fiom compliance with certain provisions of the NJDOH worker safety regulations. That exemption does not apply to the requirements under the NJDEP community information program. Therefore, all employers in the designated NAICS codes under the Act are required to submit the NJDEP 's Environmental Survey form (DEQ-094). With regard to the NJDEP's Right to Know Supplemental Information form, all employers in subject NAICS codes, who are subject to the requirements of 313 (release reporting) of the federal Emergency Planning and Community Right-to-Know Act (EPCRA), 713 must submit the Supplemental Information form. Unless an employer is covered by a subject NAICS code and the EPCRA 5313 criteria (including number of employees, NAICS codes, and threshold levels), the employer need not submit the NJDEP Supplemental Information form (DEQ-100). Both forms require information about hazardous substances at the covered employer's "facility." The term facility is defined as "the building, equipment, and contiguous area at a 714

single location used for the conduct of business." The term does not include a research and 715 development laboratory, except that every employer covered by the Act that has a research and development laboratory, must establish a communications program with the local fire department. 7.3.3 Requirements of the NJDEP's Community Information Program

Environmental Survey The Environmental Survey requires disclosure of inventory information including 716 quantity, hazard type, and location of hazardous substances at the facility. In 1991, the Act was amended to require information regarding the total quantity of environmental hazardous substances generated as non-product output and the quantity recycled as well as pollution

However, in practice the NJDEP has combined the regulatory requirements of these two forms into the Environmental Survey form. 713 714 715

For the requirements of the federal Community Information $313 release reporting, see 40 C.F.R. $372. N.J.A.C. 7:lG-1.2. Id. "Research and development laboratory" is defined as "a specially designated area used primarily for research, development, and testing activity, and not primarily involved in the production of goods for commercial sale, in which hazardous substances or environmental hazardous substances are used by or under the direct supervision of a technically qualified person." N.J.S.A. 34:5A-3(r).

716

N.J.A.C. 7:lG-1.2.

New Jersey Environmental Law Handbook 717

prevention activities. discussion of the New Jersey Pollution Prevention Act, Chapter 2, Section 8. The hazardous substances which must be reported include materials on the New 718 Jersey environmental hazardous substance list, and the U.S. Department of Transportation's 719 Hazardous Materials Table. Reporting is based upon a zero threshold, so all quantities of these hazardous substances must be reported. The Environmental Survey must be submitted to the NJDEP, the local police and fire departments, the local emergency planning committee, and the county health department by 720 March of the year following the reporting year. The NJDEP has the authority to require employers to submit clarifyrng information about the survey or to update the Environmental 72 1

Survey every year. Supplemental Form The Supplemental Information form requires employers that are subject to both the NJDEP's community information regulations and the federal EPCRA $313 release reporting requirements to submit information on the facility's use of chemicals on the New Jersey environmental hazardous substance list and their final disposal. The information that must be submitted includes: the quantities brought to the site, consumed on the site, produced on site, and shipped offsite; information on waste minimization, and the final disposal sites of the waste material. The reporting thresholds are the same as the reporting thresholds under EPCRA $313 (75,000 pounds manufactured or processed in 1988,50,000 pounds manufactured or processed in 1989,25,000 pounds manufactured or processed in 1990 and thereafter, as well as 10,000 pounds 722 otherwise used). The Supplemental Information form must be submitted to the NJDEP within 90 days of the employer's receipt of the form.

THE POLLUTION PREVENTION ACT 723 The Pollution Prevention Act was enacted to address what the Legislature termed a "fragmented approach" to environmental protection in the State. The goals of the Act are to significantly reduce the use of hazardous substances in manufacturing, and to reduce by 50 8.0

717 718 719 720 721 722 723

L.1991, c.235; N.J.S.A. 34:5A-3(k). N.J.A.C. 7: 1G-2.1. 49 C.F.R. •˜•˜172.101,172.102. N.J.A.C. 7:lGJ.l. N.J.A.C. 7310-5.2. 40 C.F.R. $372.25. N.J.S.A. 13:lD-35, et sea.

Hazardous and Toxic Substances percent the generation of hazardous wastes as non-product output. Reductions will be achieved through the use of three separate reports: the Pollution Prevention Plan (the "Plan"), the Pollution Prevention Plan Summary (the "Summary"), and the Pollution Prevention Plan 724 Progress Report (the "Report"). This regulatory program is supervised by the NJDEP's Office of Pollution Prevention, and overseen by the Pollution Prevention Advisory Board. The NJDEP adopted regulations 725 implementing the Act in 1993.

AFFECTED INDUSTRIES The Act applies to "industrial facilities," defined as entities that have a North American 726 Industry Classification System (NAICS) code that would subject them to the Worker and 727 Community Right-to-Know Act, and which are also subject to regulation under the Solid 728 729 Waste Management Act, the Water Pollution Control Act, or the Air Pollution Control 730 Act. The covered NAICS Codes are listed at N.J.A.C.7:lK App.D. The Act divides industrial facilities into two groups: priority industrial facilities and nonpriority industrial facilities. Priority industrial facilities include any industrial facility required to submit a toxic chemical release inventory ("Form R") pursuant to Title I11 of the Superfund 73 1 Amendments and Reauthorization Act of 1986. Research and development labs and pilot 732 facilities are exempt from the requirements of the Act. The NJDEP also has the discretion to establish a 10-employee threshold below which an industrial facility would be exempt from the 733 requirements of the Act. Presently, the Act affects only priority industrial facilities. Non-priority industrial facilities need only comply with the Act as requested by the NJDEP upon issuance of a directive, 8.1

N.J.S.A. 13:lD-40. N.J.S.A. 07: Chapter 1K. N.A.I.C.S. codes are set forth in the Federal Office of Management and Budget's N.A.I.C.S. Manual. N.J.S.A. 34:5A-1. N.J.S.A. 13:lE-1, et seq. N.J.S.A. 58:lOA-1, et sea. N.J.S.A. 26:2C-1, et seq. N.J.A.C. 7:lK-3.5 42 U.S.C. $9601, et sea., N.J.A.C. 7:lK-3.5. N.J.S.A. 13:lD-41(i), 6). N.J.S.A. 13:1D-40(d).

New Jersey Environmental Law Handbook 734

based on the facilities use of hazardous substances and its compliance history. Generally, if an industrial establishment must file a Form R, it is subject to New Jersey's Pollution Prevention Program. The two regulatory schemes are not identical, however. If an industrial establishment submits a Form R for any hazardous substance above the federal reporting threshold of 25,000 pounds, it is subject to New Jersey's Pollution Prevention Planning regulation for all covered hazardous substances used or manufactured above 10,000 pounds. 8.2 REPORTING REQUIREMENTS Pollution Prevention Plans are the primary mechanism by which industrial facilities achieve the goals of the Act. Plans must be prepared in two parts. Part I must contain a comprehensive inventory of the use of hazardous substances and the generation of hazardous 735 waste and non-product output at each source and production process at an industrial facility. Part I contains detailed information concerning hazardous substance usage and disposal, including: the process using hazardous substances; the chemical abstract service number of each hazardous substance used; the amounts of each hazardous substance in storage; manufactured as product, or generated as non-product output; the amount released; and the place where hazardous 736 waste and non-product output containing hazardous substances were disposed. Part 1B of the Pollution Prevention Plan contains information concerning reduction (or increases) in use of 737 hazardous substances and the generation of hazardous substances as non-product output. Part I1 must consist of a description and detailed analysis of targeted production processes and sources. A feasibility analysis of potential pollution prevention options must be undertaken and the Plan must indicate the pollution prevention techniques which will be used by the facility to 738

achieve reduction goals. A 5-year use reduction goal for each hazardous substance, and a 739 schedule for implementing the reduction procedures must also be provided. Although the Act establishes a statewide policy goal of reducing the generation of hazardous substances by 50 percent over 5 years, each facility sets its own individual goal and is not bound by the 50 percent 740

statewide goal. 734 735 736 737 738 739 740

N.J.S.A. 13:lD-44. N.J.A.C. 7:lK-3.5 N.J.S.A. 13:ID-41(b)(3)-(11); N.J.A.C. 7: 1K-4.3. N.J.S.A. 13:ID-4 1(b)(13)-(17); N.J.A.C. 7: 1K-4.3(~). N.J.S.A. 13:lD-41(c)., N.J.A.C. 7:lK-4.5. N.J.S.A. 13:lD-36. Ten Most Commonl~Asked Ouestions About: The New Jersey Pollution Prevention Act and Regulations, Weiner, Scott A., NJDEP document.

Hazardous and Toxic Substances A Pollution Prevention Plan Summary must be submitted to the NJDEP and updated every 5 years along with the Plan. The Summary must contain the facilities 5-year numeric goal for reducing the use of hazardous substances, and the generation of non-product output facilitywide, by targeted production process. The Summary must also describe the pollution prevention techniques to be applied to each targeted production process.

741

A Pollution Prevention Plan Progress Report must be filed annually with the NJDEP. Beginning with reporting year 2005, the Progress Report is to be filed or updated 742

electronically. The report must contain a comparison to the previous year of the level of use of hazardous substances per unit of production, as well as the generation of non-product hazardous waste output per unit of production. In addition, it must contain information regarding multi-media releases and the methods used to achieve each reduction. The Report must demonstrate the progress the facility has made towards achieving the Plan's 5-year goal and an explanation of why the facility's annual progress may be less than anticipated in the Plan. 8.2.1 Hazardous Substances Exempt from the Plan Industrial facilities may obtain an input-use exemption for a particular hazardous substance used by the facility if it can demonstrate that there is "no reasonably available and economically viable alternative to the current level of input-use of a hazardous substance in the specified production process." The usage of the exempt substances need not be reduced. However, waste reduction of that hazardous substance by pollution prevention techniques other 743 than use reduction must still be considered. The Act further exempts new production processes that are established after January 1, 1992. These production processes do not need to be included in the Plan until the first 5-year 744 revision of the Plan, or 5 years from the start of the production process, whichever is later. NJDEP AUTHORITY AND FACILITY WIDE PERMITS 8.3 The NJDEP has the authority to approve, revise, or modify a Plan or Summary as necessary for compliance with the Act. In the case of priority industrial facilities, the NJDEP is authorized to revoke, issue, reissue, or modify any permit, in order to require more stringent emission or effluent levels in accordance with the Plan.

74 1

742 743 744

N.J.S.A. 13:lD-41(h)., N.J.A.C. 7:lK-5.l(e)(5)(iv)

N.J.A.C.7:lK-6.l(a). N.J.S.A. 13:ID-40(e). N.J.S.A. 13:ID-40(f).

New Jersey Environmental Law Handbook The NJDEP also has the authority to issue priority industrial facilities a facility-wide permit that will incorporate all permits previously issued to the facility, as well as appropriate provisions of the Plan. Initially the facility-wide permit process will be implemented on a pilot 745 scale. Sixteen entities volunteered to be part of the facility-wide Permit Pilot Program. Facility-wide permits shall not be expanded beyond the pilot program until the Act is amended to 746

authorize it. The NJDEP's authority under the Act with respect to non-priority industrial facilities is limited to incorporating pollution prevention strategies identified in the Plan into single-media 747 facility permits. 8.3.1 Enforcement The Act authorizes both administrative and civil penalties for violations. The maximum administrative or civil penalty is $15,000 per violation, plus reasonable costs of enforcement. Each day of noncompliance is considered a separate distinct violation. Any violation of a facility-wide permit may also be treated as a violation of the underlying regulatory permit, as the 748

NJDEP deems appropriate. The regulations make it clear that an industrial establishment is not subject to penalties 749 for failure to meet pollution prevention goals or failure to implement improvements. VOLUNTARY CLEANUP PROGRAM: MEMORANDUM OF AGREEMENT The Department adopted regulations to govern its oversight of remediation of 750 contaminated sites, which include provisions for voluntary remediation under a Memorandum 9.0

of Agreement (MOA). The MOA allows a party to voluntarily begin the investigation and remediation of a contaminated site with the NJDEP's approval and oversight, and without the threat of punitive provisions such as stipulated penalties, financial assurances, or further 75 1 commitments that are required under other regulatory programs.

745 746 747 748 749 750 751

http://www.state.nj.us/dep/opppc/fwplist.htm. N.J.S.A. 13:lD-48(b). N.J.S.A. 13:lD-44(b). N.J.S.A. 13:ID-49(f); see N.J.A.C.7: 1K-Subchapter 12. N.J.A.C.7:lK-12.9. N.J.A.C. 7:26C. N.J.A.C. 7:26C-3.1 to -3.4.

Hazardous and Toxic Substances The MOA is not an enforcement document, but rather a contract between the NJDEP and 752 the party electing to perform the work. The only stipulations that apply are that: The site is not listed as a high Departmental priority; (1) Any data developed during the remediation are to be supplied to the (2) Department; The party must comply with promulgated cleanup standards and technical (3) remediation requirements; and The party must agree to pay all Departmental oversight costs. (4) By entering into the agreement, parties do not admit to any fact, fault, or liability and may terminate the MOA if they determine that it is no longer feasible or desirable to continue under its terms. Termination, however, does not prevent the NJDEP from seeking to continue remediation under its own statutory or regulatory authority which could include the issuance of a Spill Act Directive. In order to begin the MOA process a party must submit a completed application form which details the work to be performed, the requested Departmental involvement in those activities, a schedule of the work to be performed, and the documents and reports to be submitted to the Department for review. The NJDEP will review the application for administrative completeness and relay a notice of any deficiencies to the party conducting the remediation within 30 days. Upon the Department's determination that a submission is administratively 753 complete, the Department will notifl the party in writing.

752 753

N.J.A.C. 7:26C-3.2 to -3.3. N.J.A.C. 7:26C-3.2 to -3.3.

CHAPTER I11 REAL PROPERTY AND BUSINESS TRANSFERS 1.0

INDUSTRIAL SITE RECOVERY ACT 754 On January 1, 1984, the New Jersey Environmental Cleanup Responsibility Act (ECRA) became effective. This landmark legislation, enacted to affect both real property and 755 business transfers, had a dual purpose - environmental and buyer protection. With respect to the environment, ECRA sought to place the burden of restoring contaminated property upon the 756 owner or operator of the property regardless of responsibility, thereby avoiding the use of public monies for such clean up. Moreover, the obligation to remediate contamination does not 757 stop at the property line. For sales transactions, ECRA made the environmental condition of the business or property to be transferred a significant issue for all parties. The transfer of property without disclosure of its environmental condition or plans to implement its investigation and cleanup is no longer possible. From its initiation, the ECRA program was controversial and frustrating, oftentimes resulting in significant delays in the consummation of proposed transactions. In recognition of the regulated community's frustration over the long delays encountered and the large expense incurred in completing the ECRA process, NJDEP implemented a number of policy changes which sought to address some of the frustrations encountered by the regulated community. In

754 755

756

757

N.J.S.A. 13:lK-6, et sea(1984). In Feighner v. Sauter, 259 N.J. Super. 583,614 A.2d 1071 (App. Div. 1992), the Court affirmed that ECRA affects the rights of parties to contract for the sale of real property, and that a buyer was entitled to specific performance of a contract of sale notwithstanding seller's remedial costs exceeded the limitation set forth in the sales contract. This burden may be mitigated by an adjustment in the valuation of the property for tax purposes. In Inrnar Associates. Inc. v. Borough of Carlstadt, 112 N.J. 593,549 A.2d 38 (1988), the Supreme Court stated that ECRA compliance costs properly could be a factor in determining the assessed value of property. However, neither a mere estimate of future cleanup costs nor an environmental reserve established by the taxpayerlresponsible party is exclusively determinative. A property owner must present an environmental expert to establish an impact upon property valuation. Badische Corp. (BASF) v. Town of Kearnv, 14 N.J. Tax 219 (Tax Ct. 1994); Am. Stores v. Town of Kearny, 14 N.J. Tax 186 (App. Div. 1994). It is now settled law in New Jersey that costs of complying with ISRA are "damages7' under insurance policies issued prior to the incorporation of the absolute pollution exclusion provision in 1985-1986. A cleanup plan must address both contamination which remains on-site and occurs off-site resulting from on-site activities. In re Adoption of N.J.A.C. 7:26B, 128 N.J. 442,608 A.2d 288 (1992). Access to off-site property may be obtained through agreement with the off-site property owner, or if no such agreement is reached, an action must be commenced in the Superior Court to compel access. The Court will impose reasonable conditions of access. N.J.S.A. 58: 10B-16.

Real Property and Business Transfers addition, a legal challenge to ECRA's implementing regulations' (the "ECRA Regulations") broad scope resulted in a 1991 decision which upheld in part and voided in part NJDEP's 758 regulations governing the application of ECRA. In response to the Appellate Division's decision, the NJDEP promulgated revisions to the ECRA ~egulationsdealing primarily with 759

issues relating to transfers of control of corporate and partnership entities. Despite these attempts by NJDEP to clarify the ECRA program and eliminate some of its more troubling aspects, legislative proposals were introduced in 1992 to streamline the law and make it more certain in its application and timing. On March 15, 1993, the Legislature enacted legislation to encourage cleanup, reduce compliance costs, provide resources to responsible parties unable to fund remedial activities, and encourage urban redevelopment consistent with public health and 760 the environment. The bill also sought to change the perception that New Jersey disfavors industry, and to foster a more cooperative private partylgovernment program to clean up contaminated sites. A portion of this legislation enacts a substantial reworking of ECRA. In order to avoid the continued negative connotation associated with the statutory name ECRA, S761 1070 also renamed the law the Industrial Site Recovery Act (ISRA or the "Act"). Although ISRA effects significant changes in the ECRA program, the statute still requires an owner and operator of an "industrial establishment," a defined term based upon the North American Industrial Classification System (NAICS), handling hazardous substances or wastes to investigate the environmental condition of their property and to develop a "remedial action workplan" (formerly called a "cleanup plan") as a condition to the closure, sale, or transfer of the business or real property. Unlike ECRA, ISRA provides a more detailed set of procedures to be followed in complying with the law. As a result, the regulations implementing 762 ISRA similarly have been expanded.

758

759 760 761

762

In re Adovtion of N.J.A.C. 7:26B, 250 N.J. Super. 189, 593 A.2d 1193 (App. Div. 1991). ECRA's broad scope was affirmed by the Supreme Court in In re Adovtion 0fN.J.A.C. 7:26B, 128 N.J. 442,608 A.2d 288 (1992). 24 N.J.R. 721 (March 2, 1992). S-1070; P.L. 1993, C. 139. ISRA itself was amended by S.39; P.L., 1997, c. 278, effective January 6, 1998. These amendments, which were not substantive, revised nomenclature in various sections of ISRA. A significant portion of this seq., and designated this statute the "Brownfield and legislation amended N.J.S.A. 58:lOB-1, Contaminated Site Remediation Act" (BCSRA). See Chapter 11, Section 5.0 and Chapter 111, Section 2 for discussions of these amendments. N.J.A.C. 7:26B-1.1, et seq

New Jersey Environmental Law Handbook Although ISRA is viewed as a revolutionary revision of ECRA, in practice it simply reflects the evolution of the ECRA program during its 10-year lifetime. The fundamental concepts first established by ECRA remain in effect under I S M . An owner or operator subject to ISRA still must: (1) provide notice to NJDEP of a planned transfer of operations or real property, or cessation of operations, (2) assess the environmental condition of the real property, and, (3) remediate the property to criteria established by NJDEP.

1.1

APPLICABILITY In order for a planned closure of operations or transfer to be subject to ISRA, a 3-pronged test must be satisfied. First, the business under review must have an NAICS Code number specified in N.J.A.C. 7:26B, Appendix C. Second, the business must handle hazardous substances or wastes. Finally, a cessation of operations, transfer of the business or the real property upon which it is located, or other transaction effecting a change in ownership or control 763 must be planned. 1.1.1 Industrial Establishment 764 ISRA applies only to an "industrial establishment," defined as: Any place of business engaged in operations which involve the generation, manufacture, refining, transportation, treatment, storage, handling, or disposal of hazardous substances or wastes on-site, above or below ground, having a Standard Industrial Classification number within 22-39 inclusive, 46-49 inclusive, 51 or 76 as designated in the Standard Industrial Classifications Manual prepared by the Office of Management and Budget in the Executive Office of the President of the United States. A facility's NAICS Code is based upon the primary activity of the business location, i.e., on the products it produces or sells, or the services it provides. Thus, various facilities owned by the same business entity may have differing NAICS Codes, depending upon, for instance, whether the facility is a manufacturing or warehousing location. This is a change from the U.S. Standard Industrial Classification System (SIC) previously used for ISRA applicability determinations. Under the SIC system, a location operated by a business entity which supported the operations of another location, would be assigned the SIC Code of the latter location. Thus,

763

764

Where both a sale of the industrial establishment and cessation of operations occurred, the United District Court has held that ECRA applied due to the cessation occurring after December 31, 1983, the effective date of the legislation, despite the fact that the closing of the sale preceded this date. New West Urban Renewal Co. v. Westinghouse Elec. Corn., 909 F.Supp. 219,227 (D.N.J. 1995). N.J.S.A. 13:lK-8; N.J.S.A. 7:26B-1.4. The Supreme Court upheld NJDEP's regulatory broadening of the definition to include contiguous land controlled by the same owner or operator which is either vacant or used in conjunction with the business. In re Adoption of N.J.A.C. 7:26B, 128 N.J. 442, 608 A.2d 288 (1992).

Real Property and Business Transfers as an example, under this principle of classification, a location that warehoused goods manufactured at another location would be assigned the SIC Code of the manufacturing location, rather than being independently classified as a warehousing operation. The NAICS Code is routinely required on tax forms and other documents filed with governmental authorities. Where more than one activity is performed at a facility, the determination of the facility's primary activity is based on a review of the revenues, sales, profits, and employment associated with each activity performed. As an example, if a facility is engaged in both wholesaling goods obtained from another manufacturer, and manufacturing goods of its own, the NAICS Code of the facility will be based upon which of the two constitutes its primary activity.

Central Office, Solid Waste, and Agricultural Exemptions NJDEP7s regulations exempt offices engaged in general administrative, personnel, supervisory, accounting, purchasing, engineering and systems planning, advertising, legal, financial, sales, or other related management activities which are located on a tax lot and block separate from the industrial establishment, provided the separate tax lot and block was not 765 created after December 31, 1983, at the site of an existing industrial establishment. Also exempt is undeveloped or vacant land provided no industrial establishment had operated on the land since December 31, 1983, and it is not contiguous to an industrial establishment owned or operated by the same person. In addition to the regulatory exemption, the statute establishes two 766 exemptions: A facility or parts of a facility subject to operational closure and post(1) closure maintenance requirements pursuant to the New Jersey Solid Waste Management Act, N.J.S.A. 13:lE-1, et seq., the Major Hazardous Waste Facilities Siting Act, N.J.S.A. 13:1E-49, et seq., or the federal Solid Waste Disposal Act, 42 U.S.C. $6901, et seq. ; and (2) Any establishment engaged in the production or distribution of agricultural commodities. The first exemption applies to solid or hazardous waste treatment, storage, and disposal facilities subject to closure and post-closure requirements under the enumerated State and federal laws, such as RCRA hazardous and solid waste management units. The NJDEP takes the position that only the specific portions of the facility subject to closure and post-closure requirements are exempt from ISRA, not the entire facility. This raises the potential for patchwork oversight, with

765 766

N.J.A.C. 7:26B-2.l(b)(2). N.J.S.A. 13:lK-8.

New Jersey Environmental Law Handbook ISRA governing the remediation of certain facility areas and RCRA or other laws specifgng 767 cleanup of different areas. Facilities Closed Prior to ISRA ISRA is prospective legislation whose predecessor legislation, ECRA, became effective on January 1, 1984. Arguably, a facility which ceased operations prior to this date is not subject to the Act. However, the courts have held that waste storage and handling activities after 768 December 3 1,1983, trigger the Act.

1.1.2 Hazardous Substances If a facility has a subject NAICS Code, it then is necessary to ascertain whether the facility operations involve the "generation, manufacture, refining, transportation, treatment, 769 storage, handling, or disposal of hazardous substances or wastes." Hazardous substances include those elements and compounds designated by the NJDEP after public hearing. A list of hazardous substances appears in Appendix A of N.J.A.C. 7:lE. This list incorporates the lists of hazardous substances and toxic pollutants adopted under' sections 31 1 and 307 of the Clean 770 Water Act, respectively. The NJDEP includes petroleum products within the definition of hazardous substances. Thus, facilities which do not use or generate hazardous substances or wastes in manufacturing operations will nonetheless be subject to ISRA if they only store fuel oil for heating purposes. In fact, the presence of fuel oil or motor fuel storage tanks is one of the most common ways the hazardous substance criterion for ISRA applicability is satisfied. 1.1.3 ISRA Subject Transactions After it is determined that a facility handles hazardous substances or wastes and falls within ISRA-enumerated NAICS Codes, the contemplated transaction must be analyzed to determine whether it is "closing operations," or the "transfer of ownership or operations." Unlike ECRA, ISRA and its implementing regulations identify specific instances which

767 768

769 770

In re Vulcan Materials Co., 225 N.J. Super. 212,542 A.2d 25 (App. Div. 1988). The nature of on-going storage which will be considered part of continuing operations was addressed in In re Fabritex Mills. Inc., 231 N.J. Super. 224, 231, 555 A.2d 649, 652-53 (App. Div. 1989). In determining whether the respondent company had "ceased operations" notwithstanding its continuing storage of drums containing hazardous substances, the Court stated that storage "necessarily implies the active care and management [of the materials] to protect the materials themselves, the buildings in which they are housed, persons who may come in contact with them, and the environment generally from harm." New West Urban Renewal Co. v. Westinghouse Electric Corn., 909 F. USP. 219 (D.N.J. 1995) also examines the types of activities that will cause a person to be determined to be an "operator" and held a person's post-closing removal of wastes is suffkient activity to invoke ECRAJISRA. N.J.S.A. 13:lK-8. 33 U.S.C. $1251, et sea.

Real Property and Business Transfers constitute "closing operations" or "transferring ownership or operations": The most common 77 1 ISRA triggers include: Sale or transfer of stock in a corporation resulting in a merger or (1) consolidation involving the direct owner or operator or indirect owner of the industrial establishment; (2)

Sale or transfer of stock in a corporation, or the transfer of a partnership

interest resulting in a change in the person holding the controlling interest in the direct 772

owner or operator or indirect owner of an industrial establishment; Sale or transfer of more than 50 percent of the assets of an industrial (3) establishment, within any 5-year period, as measured on a constant, annual data-specific 773 basis; Sale or transfer of title to an industrial establishment or real property of (4) 774 the industrial establishment, unless otherwise qualifying as a "limited conveyance"; Dissolution of an entity which directly or indirectly owns or directly (5) operates an industrial establishment unless the dissolution is of an indirect owner whose assets would not have been available for remediation of the industrial establishment 775 absent the dissolution; Sale or transfer of a partnership interest in a partnership owning or (6) operating an industrial establishment where the transaction reduces the assets available for remediation by more than 10 percent; Execution of a lease for a period of 99 years or longer; (7) The exercise of an option to purchase title to an industrial establishment or (8) the real property of an industrial establishment;

771

772

773

774 775

N.J.S.A. 13:lK-8; 7:26B-1.4 (see definitions of "change in ownership, "closing operations," and "transferring ownership or operations."). A "controlling interest" is defined by NJDEP as the power to direct or cause the direction of the management and policies of a company based on criteria set forth at N.J.A.C. 7:26B-2.2(d). N.J.A.C. 7:26B-1.4. The ISRA Regulations exclude real property from the assets to be evaluated. A transfer of equipment or machinery to replace, restore or modify existing equipment is not an ISRA subject transaction. N.J.A.C. 7:26B-1.4.

See Section 1.3.3, infra. N.J.A.C. 7:26B-2.2(b) establishes criteria for determining whether an indirect owner's assets would not have been available for remediation. The critical analysis is whether an indirect owner has exercised control over the industrial establishment or the indirect owner's subsidiary.

New Jersey Environmental Law Handbook A judicial proceeding or final agency action resulting in the industrial (9) establishment becoming nonoperational for safety or health reasons; (10) Initiation of a Chapter 7 bankruptcy proceeding or the filing of a Chapter 11 bankruptcy reorganization plan providing for liquidation of the industrial establishment; (1 1) Termination of a lease unless there is no interruption in the operations of an industrial establishment, or the assignment of a lease; (12) Cessation of operations resulting in at least a 90 percent reduction in the total value of production output as measured on an annual date-specificbasis over any 5year period, or where product output cannot be measured, a 90 percent reduction in employees or area of operations within any 5-year period; (13) A temporary cessation of operations for a period of 2 years or greater; and (14) A change in a business' NAICS Code from a subject number to a nonsubject number. 1.1.4 Non-covered Transactions The Act and its implementing regulations also enumerate specific transactions which do not trigger I S M . A corporate reorganization not substantially affecting the ownership or control 776 of an industrial establishment is a non-subject transaction. However, the I S M Regulations qualiQ this exemption by further requiring that the reorganization not: (1) diminish the availability of assets for any environmental cleanup, (2) diminish NJDEP's ability to reach the 777 assets, or (3) otherwise hinder the owner's or operator's ability to remediate the property. The Act specifies two examples of other corporate transactions that do not trigger A transaction or series of transactions involving a stock or asset transfer among ISM. corporations under common ownership is exempt from the Act if the transaction(s) does not reduce the net worth of the direct owner or operator of the industrial establishment by more than 778

10 percent, or if at least an equal amount in assets would be available for remediation after the transaction(s). The second exemption applies to a transaction or series of transactions involving a stock or assets transfer resulting in the de facto merger or consolidation of an indirect owner with another entity, or in a change in the person holding a controlling interest in the indirect owner when the indirect owner's assets would not have been available for site remediation if the transaction(s) had not occurred. By enacting these provisions, the Legislature sought to limit 776 777 778

N.J.S.A. 13:lK-8. N.J.A.C. 7:26B-1.4.; N.J.A.C. 7:26B-2.2(~). N.J.S.A. 13:lK-8; N.J.A.C. 7:26B-2.1 identifies additional exempt transactions.

Rea 2 Property and Business Transfers NJDEP's previous broad interpretation of corporate triggers and restrict the Act to transactions involving situations where there would be a significant reduction in assets available for site remediation. Other examples of transactions that do not trigger ISRA include: A transfer or sale of real estate in a condemnation proceeding under the (I) 779 Eminent Domain Act of 197 1; A transfer made to confirm or correct deficiencies in the recorded title of (2) an industrial establishment; A transfer releasing a contingent or reversionary interest, except for a (3) transfer of a lessor's reversionary interest in real property; A transfer where the transferor is the sibling, spouse, child, parent, (4) grandparent, niece, nephew, aunt, or uncle of the transferee; Execution, delivery, and filing or recording of any mortgage, security (5) interest, collateral, assignment, or other lien; A transfer by devise or intestate succession; (6) Any transfer of personalty pursuant to a valid security agreement, (7) collateral assignment or other lien in order to effect the secured party's rights in the 780 collateral; and The granting or terminating of an easement or license to any portion of an (8) industrial establishment. 1.2 SPECIAL SITUATIONS 1.2.1 Landlord and Tenant 78 1 Transactions involving leased premises are of special interest. A transaction involving a lessee's business will subject the leasehold and any tanks, surface impoundments, septic systems, or other structures used by the lessee for handling hazardous substances and wastes to ISRA review. ISRA is triggered at the termination of a lease if the business closes or relocates, and also during a lease term if the lessee's business undergoes sale or transfer. In addition, ISRA is triggered by a change in the fee ownership of the land. In this instance however, the entire property, not solely the leasehold, is subject to ISRA review.

779 780

781

N.J.S.A. 20:3-l, et sea. N.J.S.A. 58:lO-23.11g4 - 23.11g8., effective May 7, 1993, also limits the transferee's liability as an owner of the collateral for environmental damages provided the transferee holds and manages the property consistent with its interest as a secured creditor, rather than as an owner or operator seeking economic gain. Both landlords and tenants are jointly and strictly liable for site remediation. Analvtical Measurements v. Keuffel & Esser Co., 843 F. Supp. 920 (D.N.J. 1993).

New Jersey Environmental Law Handbook The Appellate Division has held that, regardless of various legal theories of liability and Supreme Court decisions imposing liability upon an entity which contaminates property, a 782 landlord is legally responsible under ISRA for cleanup. P.L. 1993, c.139 attempts to clarify the responsibilities of the tenant or landlord. Either party may petition NJDEP to determine primary responsibility for compliance by submitting a copy of the signed lease for interpretation. P.L. 1997, c. 278 requires NJDEP to develop a standard form petition which will, when submitted along with the lease, provide relevant information for NJDEP to promptly make its determination. This form is codified as Appendix B to N.J.A.C. 7:26B. If the lease clearly imposes ISRA liability upon a party to the lease, NJDEP will compel such party to satisfy the requirements of the Act. In instances where the lease provisions are unclear or the responsible party does not comply, NJDEP may compel the other party to Act. In all instances, each party must provide relevant information to the other which is not available through diligent inquiry, 783 and provide copies of all submissions to NJDEP to the other party . 1.2.2 Mergers and Acquisitions Mergers and acquisitions involving companies owning facilities in New Jersey may be subject to I S M . Notwithstanding that the New Jersey facilities may comprise a small portion of the total assets involved in the merger or acquisition, NJDEP considers the Act as being triggered for each New Jersey facility owned or operated directly or indirectly (through subsidiaries) by the acquired corporation. A practical problem which arises in this type of transaction involves the assumption of responsibility for completing ISRA compliance. Where the merged or acquired company remains in existence and is legally responsible for ISRA compliance, the new parent of the company will be burdened economically with the ISRA compliance of its new subsidiary or division. This is contrary to the more commonplace situation where the transferee has no responsibility under ISRA. 1.2.3 Bankruptcy The interplay between the Bankruptcy Code and the Act has been addressed a number of times. Shortly after ECRA was adopted, the Bankruptcy Court held that the post-petition sale of 784 785 the debtor's property must comply with ECRA. In In re Corona Plastics, Inc., the Bankruptcy Court held that a trustee could turn over all of the collateral to a secured creditor, 782 783 784 785

Russell-Stanlev Corn. v. Plant Indus., Inc., 250 N.J. Super. 478,595 A.2d 534 (Ch. Div. 1991). N.J.S.A. 13:lK-11.9.

In re Borne Chem. Co., 54 B.R. 126 (Bankr. D.N.J. 1984). 99 B.R. 231 (Bankr. D.N.J. 1989).

Real Property and Business Transfers even though the collateral constituted substantially all of the debtor's assets, without complying 786 with ECRA. In In re Svnfax Mfg., Inc., the Bankruptcy Court examined whether a secured creditor's interest in proceeds from the sale of personal property pursuant to a bankruptcy proceeding takes priority over environmental cleanup costs. In determining whether a landlord was entitled to reimbursement for cleanup costs asserted to be the debtorltenant's responsibility, the court held that because ECRA imposes liability upon both an owner and operator for cleanup, ECRA does not require that such responsibility fall on secured creditors. The court further ruled that the owner's claim for reimbursement of cleanup costs, which constitute administrative expenses under the Bankruptcy Code, does not have priority over secured creditors' claims to the extent secured by personal property not directly involved in the generation of hazardous substances or wastes for which cleanup is mandated under ECRA. In the Court's view, the Legislature did not intend ECRA to reach transfers of such personal property. 787 In Torwico Elecs., Inc. v. NJDEP, the Third Circuit Court of Appeals held that a cleanup obligation arising from pre-petition contamination is not a claim subject to the Bankruptcy Code, so long as the debtor is required to clean up an "ongoing and continuing threat" to the environment. The Court rejected the Bankruptcy Court's broad holding that a cleanup obligation arising out of the debtor's pre-petition activities is a dischargeable claim, notwithstanding the Bankruptcy Code's provisions to the contrary. The Circuit Court held that only claims of the NJDEP to recover response costs expended pre-petition are dischargeable in bankruptcy. In a companion case to Torwico, the Bankruptcy Court held that inventory, accounts receivable, contract rights, and other personal property not constituting real estate or improvements thereof does not come within the ECRA definition of "industrial establishment," 788

and that the transfer of these assets is not a transaction voidable under ECRA. The Court further ruled that inasmuch as facility cleanup costs were not expenses of preserving the personal property, the Bankruptcy Code does not permit a charge against a creditor's interest in this type of collateral. Finally, the Court ruled that a debtor's obligation under ECRA to remediate prebankruptcy contamination is a general unsecured claim subject to prioritization and discharge in accord with Bankruptcy Code provisions. The decision was later vacated by the Third Circuit 789 for mootness, leaving all of these issues open to reinterpretation. 786 787 788 789

126 B.R. 30 (Bankr. D.N.J. 1990). 8 F.3d 146 (3d Cir. 1993), cert. denied, 511 U.S. 1046, 114 S. Ct. 1576,128 L. Ed.2d 219 (1994). InreHeldorIndus., Inc., 131 B.R. 578 (B&.

D.N.J. 1991).

N.J. Dw't. of Envtl. Pro. & Energy v. Heldor Indus., 989 F.2d 702 (3d Cir. 1993).

New Jersey Environmental Law Handbook A trustee's obligation to comply with ISRA as a condition of abandoning property has 790 been addressed by the federal District Court. In In re St. Lawrence Corp., the Court held that a trustee may abandon property without complying with ISRA unless it is shown that the State statute is "reasonably calculated" to protect human health and safety from imminent, identifiable harm fiom "identified hazards." This ruling was based upon the Supreme Court's specification of the limitations on a trustee's broad abandonment power in the environmental context in 791 Under Midlantic National Bank v. New Jersev Department of Environmental Protection. Midlantic, a trustee or debtor in possession can abandon environmentally contaminated property 792

so long as there is no imminent harm. NJDEP has adopted policies and practices in response to secured creditors' desires to obtain value for collateral they hold. In instances where a secured creditor forces a sale of a debtor's property in which the creditor has an interest, NJDEP will view the debtor, not the secured creditor, as the party subject to I S M . NJDEP also has issued "hold harmless" letters to secured creditors funding ISRA investigation and cleanup activities. The creditor will not be considered an owner or operator subject to liability under ISRA or a person otherwise 793 responsible for a discharge under the New Jersey Spill Compensation and Control Act if its relationship to the site is limited to such funding. In addition, a creditor who assumes control of a business or ownership of property may not lose this protection if its actions in respect to the 794 business or real property are in furtherance of its security interest. 1.3 THE ISRA ADMINISTRATIVE PROCESS 1.3.1 Agency Determination of Applicability Although the Act does not require a seller or transferor to obtain an agency determination that a proposed transaction is not subject to ISRA, financial lenders and purchasers frequently require agency confirmation. NJDEP has instituted a formal procedure to provide ISRA 795 applicability determinations. In order to obtain a determination, the transferor or operator must submit a notarized form designating the SIC Code, the use of hazardous substances by the

790 791 792 793 794

795

248 B.R. 734 (D.N.J. 2000). 474 U.S. 494, 106 S.Ct. 755,88 L.Ed.2d 859 (1986).

See

In re Anthony Ferrante & Sons, Inc., 119 B.R. 45 (D.N.J. 1990).

N.J.S.A. 58:lO-23.11, a=. N.J.S.A. 58:10-23.11g4-23.11g8. For a more detailed discussion, see Chapter 111, Section 3.2 "Lender Liability." N.J.A.C. 7:26B-2.2.

Real Property and Business Transfers 796

business, the transaction for which the determination is sought, and the operations and processes conducted on the property after December 31, 1983. Generally, if the information concerning the business operations and use of hazardous substances and wastes are complete, NJDEP will issue a determination without an inspection of the site. NJDEP may conduct a site inspection prior to its determination. NJDEP generally makes a determination within 4 weeks of receiving a complete application. In 2004, NJDEP instituted a policy that it would not review individual applicability requests for common business activities that are not subject to I S M . These activities include gasoline service stations, retail stores (excluding print shops), professional services offices, dry cleaners, and laundromats. 1.3.2 Practice and Procedure for Subject Transactions The transfer of an industrial establishment is contingent upon complying with ISRA's provisions. The procedure set forth in the statute to achieve I S M compliance requires (1) filing of standard forms, (2) performing a preliminary assessment, site and/or remedial investigation, and/or remediation (cleanup), as appropriate, and (3) after agency approval of the remedial program results, (i) submitting an approvable affidavit ("Negative Declaration") certifying that the property has not experienced a discharge, or if it has, that any discharge has been remediated to acceptable standards, or (ii) having a remedial action workplan (RAWP) approved by 797 This process is initiated by the filing of a single form - the General Information NJDEP. Notice I GIN).^^^ In recognition of the fact that the standard ISRA process may take many months, and even years, the Act authorizes an alternative procedure. This procedure involves the issuance of a remediation agreement (formerly called an "Administrative Consent Order") which, while not excusing ISRA compliance, allows the completion of the transaction prior to filing the Negative 799 Declaration or RAWP for approval and performing site investigation and clean up. A remediation agreement contains standard provisions which, for the most part, are non-negotiable.

796

797 798

799

NJDEP's determinations are transaction specific. If the transferee in a proposed transaction changes after a determination by the NJDEP that the transaction would not be subject to ISRA, a new determination must be sought. In re 970 Realty Assocs., 234 N.J. Super. 348, 560 A.2d 1259 (App. Div. 1989). However, there now exists an expedited process for this second review. N.J.S.A. 13:lK-9. N.J.S.A. 13:lK-9(a). N.J.S.A. 13:lK-9(e).

New Jersey Environments 1Law Handbook General Information Notice The ISRA administrative review process is initiated by submitting notice to NJDEP within 5 days of various ISRA triggering events, including: (I) closing operations; (2) public release of a decision to close operations; or (3) entering into an agreement to transfer ownership 800

or operations. The initial notice is made by submission of the standard NJDEP GIN form providing 80 1

general information about the transaction and facility, including: The facility name, location, and current operator and owner of the (1) business and property; A description of the transaction initiating the ISRA review; (2) The date of the event initiating the ISRA transaction; (3) The name, address, and telephone number of the purchaser or transferee; (4) The date proposed for closure of operations or transfer of title; and (5) The name, address, and telephone number of an agent authorized to work (6) with NJDEP during the review process. The GIN must be certified by a principal executive corporate officer of at least the level of vice president, a general partner, or sole proprietor. The certification, which must be notarized, attests that the indi.vidua1has personally examined and is familiar with the submitted 802 information, and that such information is believed to be true, accurate, and complete. If 803 requested, the NJDEP will meet with an owner or operator prior to the filing of the GIN. 804 Following the submission of the GIN, a phased investigation and remediation of the industrial establishment, as necessary, must be performed. Remediation Agreement Unlike the regulations implementing ECRA wherein NJDEP specified instances in which it would issue an Administrative Consent Order upon submittal of an application to allow a transaction to close prior to the completion of its administrative review, ISRA provides no

800 801 802 803 804

N.J.S.A. 13:lK-9(a). Id. This certification must be provided on all ISRA submittals. N.J.A.C.7:26B-1.6.

N.J.A.C.7:26B-3.1. ISRA permits, but does not require, a responsible party to perform a preliminary assessment, and site or remedial investigation without prior NJDEP approval, unless otherwise provided in a remediation agreement. N.J.S.A. 13:1K-9(@

Real Property and Business Transfers

limitation on the issuance of remediation agreements. A remediation agreement will be issued 805 upon submittal of an application specifying: A detailed description of the parties to the transaction; (1) The party responsible for compliance with ISRA; (2) An estimate of the total future remediation costs; (3)

A certification of the owner or operator's statutory liability for ISRA (4) 806 compliance; 807 Designation of the type of remediation funding source to be used; (5) A certification allowing NJDEP access to oversee the remedial action and (6) agreeing to submit all information about the remedial action to NJDEP; and Evidence of payment of applicable fees. (7) The remediation funding source may be provided by a line of credit, a fully funded 808 remediation trust fund, an environmental insurance policy, or a self-guarantee. The wording of the trust fund agreement and line of credit agreement must conform to model agreements established by NJDEP. A responsible party may request, on a quarterly basis, the disbursement from a remediation funding source upon submission of documentation detailing remedial costs incurred. NJDEP will approve the disbursement if it finds that the costs were for approved remedial actions and the balance in the remediation funding source is adequate to cover all future 809 required remedial actions.

805 806

807

808

809

N.J.A.C. 7:26B-4.1. A GIN also must be submitted if not previously filed with NJDEP. This certification is not construed as an admission of liability under the New Jersey Spill Compensation and Control Act, or any other statutory or common law. NJDEP establishes the minimum remediation funding source amount at $100,000 in the event the estimated remediation cost is less than this figure. N.J.S.A. 58:lOB-3. Any of the remediation funding source mechanisms, other than the self-guarantee, can be established by a person other than the ISRA-responsible party for the benefit of such party. N.J.A.C. 7:26C-7.2(e). The self-guarantee can be demonstrated by submitting financial statements and a certification by the chief financial officer that the net assets of the responsible party is equal to at least three times the estimated cost of remediation, and cash flow is sufficient to fund required remedial expenditures. N.J.S.A. 58:lOB-3(f). In addition to avoiding the administrative and other costs of establishing a remediation funding source by a line of credit, trust fund or insurance policy, use of the self-guarantee also avoids the annual surcharge payment to NJDEP equal to 1 percent of the remediation fknding source amount. N.J.S.A. 58:lOB-11. This surcharge, payable by parties using the other three funding mechanisms, is deposited in the Hazardous Discharge Site Remediation Fund established to provide financial assistance and grants to municipal and private entities for remediation activities. N.J.S.A. 58: 10B-4. N.J.A.C. 7:26C-8.1, et sea.

New Jersey Environmental Law Handbook Preliminary Assessment The initial step in the ISRA compliance program is the identification of areas of concern and determination of whether hazardous substances or wastes are present at the property. An evaluation of existing current and historic operational and environmental information must be 810

made. Following the evaluation, a preliminary assessment .must be performed, and a report prepared in conformance with the technical requirements set forth at N.J.A.C. 7:26E-3.2. This report, inter aha, contains: The history of past operators and owners; (1) A brief description of past operations; (2) (3) received;

A listing of all federal and State environmental permits applied for or

(4)

A summary of all environmental enforcement actions; A scaled site map identiflmg areas of hazardous substances or waste

(5)

handling;

(6)

An aerial photographic summary from 1932 for properties larger than 2

acres;

A description of current operations, with particular emphasis on areas of (7) hazardous substances or waste generation or handling; (8) A description of the building heating system, with emphasis upon underground fuel oil tanks; A summary of sanitary and/or industrial wastewater discharges, and the (9) identity of any publicly owned treatment plant receiving such wastes; (10) A description of hazardous substances and waste storage units, including the capacity, construction, and location of each; (1 1) A complete inventory of hazardous substances and wastes; (12) A detailed description of any past hazardous substances or waste discharges, including any responses to such discharges; (13) Recommendations for additional remedial action at the facility, including further investigation and/or remediation; (14) (15)

810

Historical sampling data obtained at the facility; and Other information submitted for NJDEP review of the submission.

N.J.A.C.7:26E-3.1.

Real Property and Business Transfers Site Investigation If the preliminary assessment report identifies potential areas of environmental concern, a site investigation must be performed. An environmental or engineering consultant is generally required to prepare and implement this activity. Sampling is to be performed in all areas of hazardous substances or waste management which may have caused environmental contamination. Typical areas to be sampled are discharge points for floor and roof drains, dry wells and septic systems, areas under and around underground and aboveground petroleum product and chemical storage tanks, and other areas where releases potentially may have occurred. The site investigation must conform with NJDEP7s technical regulations at N.J.A.C. 7:26E-3.3 through 3.12, and must consider, at a minimum: (1) Each area of potential environmental concern, including proposed sampling locations, sampling frequencies, and parameters to be sampled; Sampling and analytical methodology, including sampling equipment, (2) procedures, and sample handling; (3) Ecological impacts through performance of a baseline ecological evaluation (BEE); Historic fill or background contamination at the site; (4) Health and safety practices to be employed during implementation of the (5) sampling plan; and (6) A schedule of activities. Remedial Investigation Following completion of the site investigation, a remedial investigation of areas of former discharges must be performed to precisely delineate the nature and extent of contamination existing above applicable remediation criteria. This investigation must cover the industrial establishment and any areas to which hazardous substances or wastes have migrated, and must be performed in accord with technical requirements set forth at N.J.A.C. 7:26E, 811 Subchapter 4.

811

Following review of the GIN, NJDEP establishes a presumptive deadline for the completion of the preliminary assessment and site investigation at 35 and 120 days, respectively. A remediation agreement requires these activities and the submittal of a remedial investigation workplan to be submitted within 180 days after the effective date of the remediation agreement. If these deadlines are determined to be unachievable, the responsible party may propose an alternate schedule.

New Jersey Environmental Law Handbook Site Inspection Following the NJDEP's determination that the GIN is complete, a case manager is assigned to the proceeding and a site inspection may be scheduled, generally after sampling results are provided to NJDEP. A technical, scientific, or engineering representative from the facility should be present at the inspection, and NJDEP must be given access to all site areas, 812 buildings, and records. The NJDEP also has the authority to take samples and copy records. Sampling NJDEP will require additional investigation to that proposed by the owner or operator if the responsible party's site or remedial investigation activities do not comply with NJDEP's technical regulations. If the technical standards are achieved, both a site and remedial investigation can proceed without NJDEP input. Oftentimes, the investigation proceeds "at risk" without NJDEP comment. Negative Declaration Following the completion of the preliminary assessment, site investigation, and remedial investigation, as appropriate, the owner or operator may submit a Negative Declaration if these activities demonstrate there has not been a discharge of hazardous substances or wastes, or all 813 The Negative Declaration is in the form of a discharges have been satisfactorily cleaned up. written affidavit signed by an authorized officer. This submission, to be made on a standard NJDEP form, provides information concerning the location of the facility and the transaction for which ISRA approval is sought. The affidavit must state either that no discharge has occurred or all discharges have been cleaned up to the NJDEP's satisfaction. The NJDEP has 45 days to approve or disapprove the Negative Declaration and must noti@ the owner or operator of the reasons for a disapproval. An approval is the issuance of a 814 "No Further Action letter." If the Negative Declaration is not approved, the NJDEP will 815 require the'performance of additional remedial actions. A No Further Action letter remains effective for as long as there are no defects in the 816 approved process or the conditions upon which it is issued remain unchanged.

812 813 814

815 816

N.J.A.C. 7:26B-1.9. N.J.S.A. 13:lK-9(d)(l); N.J.A.C. 7:26B-6.7. Despite the prevalence of sampling as a precursor to the approval of a Negative Declaration, NJDEP's approval of a Negative Declaration Affidavit has been upheld where no sampling was performed. Railroad Realtv Assoc., 313 N.J. Super. 225,712 A.2d 1165 (App. Div. 1998). N.J.S.A. 13:lK-9(d)(2); N.J.A.C. 7:26B-6.7(f)(2). Compare Chemos Com. v. State Department of Environmental Protection, 237 N.J. Super. 359, 568 A.2d 75 (App. Div. 1989) where an inspector's report that site sampling be performed was overlooked in the

Real Property and Business Transfers 817

Remedial Action Workplan (RAWP) If a facility is unable to complete the ISRA process following sampling by submittal of a Negative Declaration, further remedial activities must be performed. An owner or operator may conduct soils remediation without prior NJDEP approval of a RAWP if the remediation will 818

achieve NJDEP criteria and can be accomplished within 5 years. However, a longer-term soils 819 If NJDEP precleanup or a groundwater remedial program must be pre-approved by NJDEP. approval of a remedial action is required, an RAWP may be submitted to NJDEP and must 820

include:

A description of the location (including a scaled site map), type, and (1) quantity of any hazardous substance and waste remaining and to be removed; An evaluation of the sampling results of any hazardous substance and (2) waste discharges; An evaluation of remedial alternatives for on-site contamination and off(3) site contamination resulting from on-site operations; Cleanup levels, criteria, standards of performance, or other measures of (4) compliance with environmental rules to be achieved for all environmental media; A schedule of remedial activities, with appropriate milestone dates; (5)

(6) . A proposal for post-remediation confirmation sampling or monitoring; and (7) A detailed estimate of remediation costs including capital, operation and maintenance, monitoring, laboratory and analytical, engineering, legal and administrative, and contingency costs.

process of approving the Negative Declaration with In re Cadgene Family Partnership, 286 N.J. Super. 270, 669 A.2d 239 (App. Div. 1995) where the Negative Declaration contained assertions later determined to be false, or In re Railroad Realtv Assoc., where the Appellate Division upheld NJDEP's refusal to rescind previously approved Negative Declarations after finding that NJDEP's exercise of its discretion was not arbitrary or capricious. Although neither ISRA nor NJDEP's regulations specify specific time frames for completion of a site cleanup, it has been held that under New Jersey law, a seller's contractual obligation to remediate contaminated property requires performance within a reasonable time, but what constitutes such reasonable time is a matter of fact, not law. Black Horse Lane Associates, L.P., et a1 v. Dow Chemical Corporation, et , . l a 238 F.3d 275 (31d Cir. 2000). N.J.S.A. 13:lK-9(h). N.J.A.C: 7:26B-6.3 establishes a deadline of 420 days following the submittal of the GIN, or 120 days following NJDEP's approval of the remedial investigation report for the submission of a groundwater or surface water RAWP. NJDEP's practice is to extend this period for good cause upon request. N.J.A.C. 7:26E-6.2. NJDEP's technical requirements also require the submission of a comprehensive remedial alternative analysis. N.J.A.C. 7:26E, Subchapter 5.

New Jersey Environmental Law Handbook If NJDEP approves the RAWP, the remediation funding source must be adjusted to the amount contained in the approved submittal. 82 1 Remediation Deferral Following completion of the preliminary assessment, site investigation, and remedial investigation, as appropriate, the owner or operator planning to transfer ownership or operations of the industrial establishment may apply to NJDEP for deferral of the preparation, approval, and implementation of the RAWP. Such application must contain: A certification by the purchaser or transferee that its use would be (1) 822

substantially the same as that of the transferor; A certification that the owner or operator has completed the preliminary (2) assessment, site investigation, and remedial investigation, as appropriate, to NJDEP's satisfaction; A cost estimate for the hture cleanup of the industrial establishment (3) approved by NJDEP based upon information collected through the site assessment~investigationprocess; and A certification that the purchaser, transferee, mortgagee, or other party in (4) the transfer has the financial ability to fund the implementation of the necessary remediation. The preparation and implementation of the RAWP may be deferred for the subject transaction until the use changes or until the purchaser, transferee, mortgagee, or other party ceases 823 An approved deferral shall not limit, in any way, NJDEP's authority to require a operations. 824

site remediation under any other statute, rule, or regulation. 1.3.3 Expedited Compliance Options In response to industry's protests that the ECRA process unnecessarily delayed closing of transactions in instances where little, if any, environmental benefit would be obtained by full ECRA compliance, the Legislature identified specific types of transactions or events which do not require compliance with all of the procedural and substantive provisions set forth in N.J.S.A.

821 822

823 824

N.J.S.A. 13:lK-11; N.J.A.C. 7:26B-5.8. ISRA defines the "same use" as the retention of the same four-digit NAICS industry group number. However, an applicant may petition NJDEP for a finding that an industrial establishment retaining the same three-digit Major Group Number is considered to be performing the same use. N.J.A.C. 7:26B-5.8c(l)(ii) N.J.S.A. 13:lK-1 l(a). N.J.S.A. 13:lK-1 l(c).

Real Property and Business Transfers

13:lK-9. In each instance, NJDEP issues an approval upon submission of a certification by the ownerloperator attesting to the satisfaction of various statutory criteria for the particular event. 825 De Minimis Quantity Exemption An owner or operator who uses limited quantities of hazardous substances must notify NJDEP of its intent to transfer or cease operations, but need not comply with any other procedural or substantive requirement. The threshold quantities of hazardous substances below which this exemption will apply are: 500 pounds or 55 gallons of hazardous substances; and (1) 220 gallons of hydraulic and lubricating oils. (2) For mixtures of hazardous and non-hazardous materials, only the hazardous component is determinative and is to be compared to the 55 gallod500 pound threshold. Notice must be submitted on NJDEP's standard form. 826 Expedited Review In instances where NJDEP andlor USEPA previously have approved the comprehensive remediation of an industrial establishment, and discharges subsequent to such approval have not occurred or have been remediated in accord with NJDEP requirements, an owner or operator may apply for an expedited review. An application for this review shall include: (1) The GIN; A certification that remediation of the industrial establishment previously (2) was implemented, and that a No Further Action letter has been issued or a Negative Declaration has been approved by NJDEP pursuant to the Act, or that NJDEP or USEPA, pursuant to RCRA, CERCLA, or any other law, previously has approved remediation of the industrial establishment equivalent to that which would be performed pursuant to the provisions of the act; A certification that the owner or operator has, consistent with currently (3) effective NJDEP regulations, identified areas of concern that are new or have continued in use since the issuance of the No Further Action letter, Negative Declaration approval, or remediation approval, and based on such review, there either has been no discharge of hazardous substances or wastes subsequent to the governmental approval, or, if a discharge has occurred, a certification identifying the discharge, describing the remedial action taken, and attesting to the fact that such remediation was implemented in accord with NJDEP procedures and was approved by NJDEP;

825 826

N.J.S.A. 13.1K-9.7; N.J.A.C. 7:26B-5-1. N.J.S.A. 13:lK-11.2; N.J.A.C. 7:26B-5.1.

New Jersey Environmental Law Handbook

A certification that any underground storage tank regulated by N.J.S.A. 58:lOA-21, et se+ has an approved secondary containment or monitoring system as required by law; A copy of the Negative Declaration, No Further Action letter, or other (5) relevant NJDEP approval of the comprehensive remediation of the industrial establishment; and (6) A proposed Negative Declaration. NJDEP may inspect the industrial establishment as part of its review of the application. If NJDEP determines that the certifications are accurate, NJDEP must approve the Negative Declaration by issuing a No Further Action letter. In the event the proposed Negative Declaration is denied, the owner or operator must remediate the industrial establishment in 827 accord with NJDEP's regulations. 828 Limited Site Review In instances where a discharge subsequent to approval of a comprehensive site remediation has not been performed in accord with NJDEP requirements, an applicant seeking to transfer ownership or operations, or close operations may limit the scope of the investigation andlor cleanup activities to such discharge. An application for a limited site review consists of: (4)

(1)

A GIN;

A certification that remediation of the industrial establishment previously has been implemented, and that a No Further Action letter or Negative Declaration has been approved by NJDEP pursuant to the Act, or that NJDEP or USEPA, pursuant to RCRA, CERCLA, or any other law previously has approved remediation of the industrial establishment equivalent to that which would be performed pursuant to the provisions of the Act; A certification that the owner or operator has performed an investigation (3) consistent with current NJDEP regulations to identify areas of concern, and that based on such investigation, subsequent to the governmental approval described in subparagraph 2 above, a discharge occurred at the industrial establishment that was not remediated in accord with NJDEP procedures, or that any remediation of such discharge performed was not approved by NJDEP, and that no other discharge of a hazardous substance or waste has occurred at the industrial establishment; (2)

827 828

N.J.S.A. 13:lK-11.2(b); N.J.A.C. 7:26B-5.l(d). N.J.S.A. 13:lK-11.3(a); N.J.A.C. 7:26B-5.5.

Real Property and Business Transfers A certification that any underground storage tank regulated by N.J.S.A. (4) 58:lOA-21, et seq. has an approved secondary containment or monitoring system as required by this law; (5) A copy of the most recent Negative Declaration, No Further Action letter, or other relevant NJDEP approval of the comprehensive remediation of the industrial establishment; and

(6) A proposed Negative Declaration. Upon submission of a complete application, and following any inspection NJDEP deems necessary, NJDEP may issue a No Further Action letter if it determines that the remediation of the discharge occurring subsequent to the comprehensive site approval was performed pursuant to applicable NJDEP remediation standards. Alternatively, NJDEP may require the owner or operator to perform necessary investigation and/or cleanup activities to achieve applicable 829 remediation standards at the industrial establishment for those areas of concern identified by the information provided pursuant to item 3, above. Thereafter, NJDEP will issue its No Further Action letter. If the NJDEP disapproves the application, the industrial establishment must 830 achieve compliance with ISRA and NJDEP's implementing regulations. 83 1 Area of Concern Waiver In situations where the comprehensive investigation and/or remediation of an industrial establishment is required for a current event, the owner or operator may obtain approval to exclude certain areas of the industrial establishment from additional remediation upon the submittal of an application setting forth statutorily required information. An application for an area of concern waiver shall include: A certification that NJDEP or USEPA, pursuant to RCRA, CERCLA, or (1) any other law, has previously approved the remediation of an area of concern, and a No Further Action letter or equivalent approval of such remediation has been issued; A copy of NJDEP's most recent No Further Action letter or equivalent (2) approval for the area of concern; and A certification that the owner or operator has evaluated the area of concern (3) consistent with current NJDEP regulations, and based on such activities, there has been no discharge of hazardous substances or wastes at the area of concern subsequent to the issuance of the No Further Action letter or equivalent approval. 829 830 831

N.J.S.A. 13:lK-11.3(b)(2). N.J.S.A. 13:lK-11.3(~). N.J.S.A. 13:lK-11.4;N.J.A.C.7:26B-5.2.

New Jersey Environmental Law Handbook Upon submission of a complete and accurate application, and after any inspection deemed necessary by NJDEP, NJDEP shall approve the area of concern waiver if it determines that the information set forth in the application is accurate. The approval of the waiver exempts 832 the area of concern from further review under ISRA. If NJDEP disapproves the application, the subject area of concern is subjected to the full range of remediation activities established by ISRA. 833 Remediation in Progress If an industrial establishment is being remediated pursuant to ISRA, RCRA, or CERCLA when a subsequent ISRA triggering event occurs, the industrial establishment may be transferred or closed without obtaining NJDEP approval of a RAWP or Negative Declaration, or the issuance of a remediation agreement. NJDEP shall authorize, in writing, the closure of operations or transfer of ownership upon a determination that the application is complete and 834 accurate. The required application shall include: (1) A GIN; A certification that a preliminary assessment and site investigation, if (2) necessary, confirms that during the applicant's operation or ownership of the industrial establishment, there was no discharge of hazardous substances or wastes or that the rernediation of any such discharge was approved by NJDEP; A certification by the owner or operator that a remediation funding source (3) acceptable to NJDEP has been established for the ongoing remediation; and A certification, as applicable, that the transferee has been notified of the (4) ongoing remediation. 835 Underground Storage Tanks If the only area of concern at an industrial establishment is associated with underground storage tanks, the owner or operator of an industrial establishment may seek NJDEP approval to close operations or transfer ownership or operations without complying with the full scope of ISRA's remedial requirements. The application shall include: (1) A GIN; Submission of a preliminary assessment or site investigation report (2) demonstrating that the only area of concern is an underground storage tank system(s) or 832 833 834 835

N.J.S.A. 13:lK-11.4(a). N.J.S.A. 13:lK-11.5; N.J.A.C.7:26B-5.4 N.J.S.A. 13:lK-1IS@). N.J.S.A. 13:lK-11.6; N.J.A.C.7:26B-5.3.

Real Property and Business Transfers

the only discharge of hazardous substances or wastes above applicable remediation standards is from such systern(s); and A certification that the owner or operator is in compliance with applicable (3) 836 technical and other legal requirements for underground storage tanks(s). If NJDEP determines the application to be complete and accurate, it shall issue written 837 authorization allowing the applicant to close operations or transfer ownership or operations. 838 Minimal Environmental Concern Upon the completion of a preliminary assessment, site investigation, and remedial investigation, as necessary, performed in accord with NJDEP requirements, the owner or operator of an industrial establishment may seek approval to close operations or transfer ownership or operations without NJDEP approval of a RAWP or remediation agreement if it is demonstrated that the discharge of hazardous substances or wastes at the industrial establishment is of minimal environmental concern. An application for such approval shall include: (1) A certification, supported by data obtained from the preliminary assessment, site investigation, andlor remedial investigation, that there are no more than two areas of contamination exceeding applicable remediation criteria at the industrial establishment, and that remediation of the areas of concern to applicable remediation criteria can be completed within 6 months; A certification that a RAWP to address the areas of concern will be (2) prepared in accord with NJDEP standards and criteria, and that the future remediation will meet applicable NJDEP remediation standards; (3) A certification that the RAWP, as approved by NJDEP, will be implemented within 6 months of NJDEP7sapproval of this application; Evidence that a remediation funding source has been established; and (4) Documentation demonstrating that the discharge of hazardous substances (5) or wastes does not pose a threat to human health, including drinking water sources. Upon the finding that the application is complete and accurate, following any site inspection NJDEP deems necessary, NJDEP shall approve the application for a determination of

836

837 838

Compliance with NJDEP's underground tank requirements for a discharge may be demonstrated by compliance with an NJDEP oversight document for the discharge. N.J.A.C. 7:26b-5.3(d). N.J.S.A. 13:lK-11.6(b). N.J.S.A. 13:lK-11.7; N.J.A.C. 7:26B-5.6.

New Jersey Environmental Law Handbook minimal environmental concern. NJDEP's decision must be issued within 30 days of submission 839 of the complete application. Upon completion of the remedial action, the owner or operator shall certify to NJDEP that the R A W has been performed in accord with NJDEP requirements and the certifications previously made. This certification must include a copy of the RAWP and the results of any tests conducted. Within 45 days of receipt of the certification, and following any inspection deemed necessary, NJDEP shall issue a No Further Action letter unless it determines that hazardous substances or wastes remain at the subject areas of concern at levels in excess of 840 applicable remediation criteria. If the owner or operator does not complete the RAWP within 6 months, NJDEP shall be notified in writing, whereupon an additional 120 days to complete the remedial action will be allowed. If the implementation is not completed within this additional time, NJDEP may revoke its determination of minimal environmental concern, and require that a new R A W be submitted 841 and implemented pursuant to its requirements. 842 Certificate of Limited Conveyance A portion of the real property on which an industrial establishment is located may be transferred without conducting remediation of the entire industrial establishment pursuant to N.J.S.A. 13:lK-9. NJDEP issues a certificate of limited conveyance for this type of transaction. An application for a certificate of limited conveyance shall be submitted on a certification form 843 which includes:

A description, appraisal, and sale price or market value of the property to (1) be transferred; An appraisal of the entire industrial establishment made no more than 1 (2) year prior to the transaction; and

An appraisal of the property remaining after the limited conveyance. (3) NJDEP shall issue a certificate of limited conveyance for the portion of the real property to be transferred upon a finding that the sales price or market value of such portion, & any additional diminution of the value of the property remaining as a result of the conveyance, is not

839 840 84 1 842 843

N.J.S.A. 13:lK-11.7(b). N.J.S.A. 13:lK-11.7(~). N.J.S.A. 13:lK-1l.7(d). N.J.S.A. 13:lK-11.8; N.J.A.C. 7:26B-5.7. N.J.S.A. 13:lK-11.8(b); N.J.A.C. 7:26B-5.7(~).

Real Property and Business Transfers

more than one-third of the total appraised value of the industrial establishment prior to the 844 transfer, and that the remaining real property is an industrial establishment subject to the Act. 845 The appraisals must be completed no more than 1 year prior to submittal to NJDEP. Upon issuance of a certificate of limited conveyance, the owner or operator must complete remediation of the portion of the property to be transferred in accord with the Act as a precondition to the 846 actual conveyance. A certificate of limited conveyance is valid for 3 years from the date of 847 issuance. Furthermore, the owner may transfer additional portions of the real property in excess of the conveyance limitation as long as the additional conveyance does not result in a closing of operations or transferring of ownership or operation. The amount paid for the additional portion of real property exceeding the statutory conveyance limitation must be used exclusively for remediation of the conveyed property. Any unexpended funds must be deposited in a remediation trust fund for remediation of the portion of the real property not transferred to 848 date.

CLEANUP STANDARDS~~~ BCSRA requires the NJDEP to formally promulgate standards for soil, groundwater, and 850 surface water necessary for the remediation of contamination. NJDEP plans to formally propose regulatory soil standards no earlier than 2002. Although NJDEP has never formally promulgated soil cleanup criteria, NJDEP has, via informal guidance established soils cleanup criteria for many organic and inorganic compounds, and widely publicized these criteria for use 851 in ISRA cases. NJDEP's groundwater standards promulgated at N.J.A.C. 7:9-6 are objectives 852 to be achieved for groundwater remediation. 1.4

The one-third criterion is in the aggregate; a series of limited conveyances will be approved until the aggregate value of the conveyances during the applicant's ownership of the property exceeds this criterion. N.J.S.A. 13:lK-11.8(~). N.J.A.C. 7:26B-5.7(~)(4). N.J.S.A. 13:lK-11.8(d). N.J.S.A. 11:lK-11.8(e). N.J.S.A.-13:lK-11.8(f) and (g). See Chapter 11, Section 5.0 for a more detailed discussion of cleanup standards and criteria. N.J.S.A. 58:lOB-12. These criteria are on the Site Remediation Program portion of NJDEP's Website, www.state.ni.us/dep/rp. NJDEP's incorporation of its numeric and narrative groundwater remediation standards in its Technical Regulations for Site Remediation, N.J.A.C. 7:26E-1.1 et seq., has been upheld as a valid agency action. In re Adoption 0fN.J.A.C. 7:26E-1.13, Docket No. A-20121-05 (N.J. Feb. 28,2006).

New Jersey Environmental Law Handbook FEES 853 Fees are assessed for NJDEPYsreview of all submissions and remediation oversight. Additionally, NJDEP issues semi-annual invoices for reimbursement of actual time spent on the 854 oversight of the case. 1.6 SCOPE OF LIABILITY Present owners or operators of facilities often object to cleaning up contamination resulting from activities under prior operation or ownership. In Superior Air Products Co. v. 855 N.L. Industries, Inc., et al., the current property owner sought resolution of this issue prior to completing an ECRA cleanup. The Court refbsed to require the NJDEP to allocate liability prior to the ECRA cleanup. Thus, under current interpretation of I S M , the current property owner or operator is responsible for remediating environmental conditions at a site, with the allocation of 856 responsibility between past and present owners to be decided separately. However, N.J.S.A. 58:lOB-12(h) establishes a rebuttable presumption that NJDEP may not require a responsible party under ISRA to remediate "historic fill" placed on the property prior to the party's ownership or use of the property. Similarly, a person complying with I S M is not responsible for contamination on its property which originates off-site as the result of another person's actions. N.J.S.A. 58:lOB-12g(5). 1.7 ENFORCEMENT The statute imposes a maximum daily penalty of $25,000 for knowingly giving or 857 causing to be given any false information or failing to comply with ISRA. An officer or management official who knowingly directs or authorizes a violation of ISRA is personally 858 liable for the penalties. NJDEP has the regulatory authority to compromise and settle, in its 859 discretion, any claim for a penalty. 1.5

853 854

855 856

857 858 859

N.J.A.C. 7:26B-8.1, et sea. NJDEPYsauthority to impose its cost reimbursement scheme was upheld in E.I. duPont de Nemours & Co. v. State. Department of Environmental Protection and Energy, 283 N.J. Super. 331, 661 A.2d 1314 (App. Div. 1995). 216 N.J. Super. 46,522 A.2d 1025 (App. Div. 1987). See, e.g., Prospect Indus. Cog. v. Sinner Co., 238 N.J. Super. 394, 569 A.2d 908 &aw Div. 1989). (Predecessor in title was strictly liable to the successor for cleanup costs for PCB leakage even though PCBs were not known to be hazardous at the time of the discharge.)

N.J.S.A. 13:lK-13@). Id.

N.J.A.C. 7:26B-1.1l(d).

Real Property and Business Transfers Notwithstanding prior judicial interpretation of NJDEP's enforcement authority under ECRA, the Legislature amended ECRA's enforcement provisions to conform it to NJDEP's practice in implementing the law. Under ISRA, NJDEP no longer has the authority to void a transaction for failure to comply with the remedial provisions of the Act. In addition, in recognition of judicial decisions determining the liability for site remediation amongst private 860 parties, the transferee may sue to void a sale or transfer upon the failure of the transferor to 861

perform site remediation and obtain NJDEP approval under the Act. Moreover, such failure to comply with ISRA makes the transferor strictly liable for remediation costs and all direct and indirect damages resulting from the failure to perform a remedial action workplan. P.L. 1997, c.

278 establishes the venue for a lawsuit seeking this relief in the Superior Court. A transferee's ability to void the sale or transfer, however, is preconditioned upon the giving of notice to the transferor of its failure to perform and affording the transferor a reasonable time to comply with 862 the Act. BROWNFIELDS LIABILITY PROTECTION The liability of a purchaser who obtains title to property subsequent to a discharge was again addressed by the Legislature in the late 1990s. On June 5, 1997, the Legislature passed omnibus legislation, S. 39, P.L. 1997, c. 278 amending the liability provisions of the Spill Act and the State legislation establishing the Hazardous Discharge Site Remediation Fund and governing the technical and procedural aspects of property remediation; establishing a mechanism wherein "innocent" parties who remediate contaminated property can obtain State reimbursement of a portion of the cleanup costs; and modifying various other legislative acts, including those dealing with the payment of local real estate taxes by an "innocent purchaser." This legislation, which became effective in January 1998, seeks to return underutilized or abandoned properties, regardless of their condition ("Brownfields"), to productive use. As a result of this legislation, a purchaser of contaminated property can receive liability protection under the Spill Act, financial incentives from municipalities under the Environmental

2.0 2.1

860

861

862

Dixon Venture v. Joseph Dixon Crucible Co., 235 N.J. Super. 105, 561 A.2d 663 (App. Div. 1989), affd, 122 N.J. 228,584 A.2d 797 (1991); -er Dev. Co. v. First Nat'l Bank, 762 F. Supp 1145 (D.N.J. 1991). N.J.S.A. 13:lK-13(a). N.J.S.A. 13:lK-13(a). However, the statute does not provide a private right of action to compel compliance with its provisions. C-I-L Corp. of America v. NL Indus., Inc., 1994 WL 665566 (D.N.J.).

New Jersey Environmental Law Handbook 863

Opportunity Zone Act, and the New Jersey State Treasury, and certainty as to its remedial 864 obligations under the Brownfield and Contaminated Site Rernediation Act. P.L. 1997, c.278 provides liability protection to a person who purchases a contaminated 865 parcel of property and thereafter rernediates the property against claims by third parties, other than NJDEP and USE PA,^^^ and the imposition of additional cleanup obligations by NJDEP 867 subsequent to completion of the site remediation. In order to qualify for third-party liability protection, a person must satisfy specifically 868 enumerated statutory criteria: The property was acquired on or after January 6,1998; (1) The hazardous substance release for which liability protection is sought predated (2) the property acquisition; The person seeking liability protection must not have discharged the hazardous (3) substance, be responsible in any way for its discharge, or be a corporate successor to the discharger or any person otherwise liable for the discharge; The person gave notice of the discharge to NJDEP upon its actual discovery; (4) Within 30 days of the property acquisition, the person commenced remediation (5) (including preliminary assessment, investigation and/or cleanup) of the discharge pursuant to a 869 NJDEP oversight document entered into prior to property acquisition, and NJDEP is satisfied that the remediation was timely and appropriately completed; and Within 10 days after property acquisition, the person agrees in writing to provide (6) NJDEP site access for remediation and related activities. The scope of this liability protection extends both to the acquired property and locations to where the pre-existing discharge migrated.

863 864 865 866

867 868 869

N.J.S.A. 54:4-3.150, et sect. N.J.S.A. 58:lOB-1, et seq. N.J.S.A. 58:lO-23.11g(f) Amendments to CERCLA in the 2002 passage of the Small Business Liability Relief and Brownfields Revitalization Act provide protection to non-responsible purchasers from liability under CERCLA for preexisting conditions. Pub. L. No. 107-1 18. N.J.S.A. 58:lO - 23.11g.d.(e). N.J.S.A. 58:lO-23.1lg(f). The most common NJDEP oversight document utilized is a Memorandum of Agreement. See N.J.A.C. 7:26C-2.2.

Rea 1 Property and Business Transfers No third-party liability defense is provided for the following however: (1) discharges that occur after property acquisition; (2) negligent actions by the person that aggravate or contribute to personal injury or property damage; (3) harm caused by the failure to maintain institutional and engineering controls on the property or to otherwise comply with the provisions of an NFA letter or a remediation action workplan; and (4) harm resulting from a person's failure 870

to comply in the future with legal requirements. In summary, a person will "get what he pays for" - protection against third-party liability will be obtained only for those environmental conditions that are addressed to NJDEP's satisfaction. The completion of an NJDEP-approved remediation also will protect the innocent party 871 Similar to the third-party liability protection, liability against from future NJDEP action. future NJDEP action will be limited only to those environmental conditions that are remediated 872 to NJDEP's satisfaction. However, unlike the third-party protection, protection against NJDEP action does not extend to off-site locations to which the pre-existing discharge migrates. 873 This protection is afforded by the issuance of an NFA letter with Covenant Not to Sue. The Covenant Not to Sue will remain effective only for as long as the property continues to meet all conditions set forth in the NFA letter. When NJDEP determines that provisions of the NFA letter no longer are being met, it will notify the person responsible for maintaining compliance with the NFA letter and provide a reasonable time to cure the deficiency. If compliance with the NFA letter provisions thereafter is not achieved, NJDEP may revoke the Covenant Not to Sue, thereby exposing the person to future NJDEP remediation requirements. The provisions of a Covenant Not to Sue, established by N.J.S.A. 58: 10B-13.1a, releases the remediating party from all civil liability to the State to perform additional remedial activities 874 and to pay compensation for natural resource damages. In instances where the use of engineering or institutional controls are part of the NJDEP-approved remedial action, the Covenant Not to Sue requires the property owner, lessee, or operator (or their successors) to maintain the engineering or institutional controls, conduct periodic compliance monitoring, and

870 871

872

873 874

N.J.S.A. 58:lO-23.11g(f). However, the State will issue a "Prospective Purchaser Agreement" to a party prior to its completion of a remedial action in order to provide comfort as to the party's and other associated entities', i.e. lenders, liability in order to facilitate a Brownfield acquisition. A fee is charged for this agreement. Persons who acquire property after January 6, 1998 may obtain protection from NJDEP action for preexisting discharges covered by previously issued NFA letters. The scope of this protection however is limited to the time between the NFA letter issuance and the date of property acquisition. N.J.S.A. 58:lOB-13.l(a). P.L. 2001, c.154.

New Jersey Environmental Law Handbook submit on a biennial basis a certification to NJDEP that the engineering and institutional controls are being properly maintained and continue to be protective of human health and the environment. NJDEP has announced its intention to carefully monitor such compliance in order to ensure that engineering controls (caps, fencing, etc.) and institutional controls (primarily deed notices) are adequately maintained to provide future protection to humans and the environment. The statute also provides that the Covenant Not to Sue shall be revoked if the engineering or institutional controls are not properly maintained. Finally, the legislation provides that a person who utilizes engineering controls to complete a property remediation shall be barred from making a claim for cost reimbursement against the New Jersey Spill Compensation Fund and the Sanitary Landfill Facility Contingency Fund for any costs relating to the remediation resulting in 875 the Covenant Not to Sue. A claim against the Spill Compensation and Sanitary Landfill Contingency Funds would be allowed however for costs incurred in the event NJDEP orders additional remediation beyond that performed in order to complete a remediation using institutional controls only. A Covenant Not to Sue runs with the land, and benefits all future 876 owners, lessees, or operators of the property. The Covenant Not to Sue will not provide any protection however to a discharge that occurs subsequent to the issuance of the NFA letter, nor 877 will it exempt a person from future compliance with law. Finally, a Covenant Not to Sue will explicitly exclude a discharger or any person in any way responsible for a discharge from its 878 coverage. 2.2 ECONOMIC INCENTIVES In addition to liability protections available to innocent purchasers who remediate Brownfield properties, economic incentives are available from both State and municipal sources. The New Jersey Department of the Treasury, with the assistance of the New Jersey Commerce, Economic Growth and Tourism Commission ("the Commerce Commission"), provides remediation cost reimbursement to Brownfield developers. Moreover, these State agencies offer grants and loans to Brownfield developers. On the local level, real property tax abatements are available to Brownfield developers. The 1997 Brownfields legislation established a program whereby a Brownfield developer can obtain reimbursement of up to 75 percent (75%) of its costs to remediate the

875

876 877 878

N.J.S.A. 58:lOB-13.l(a)(3). N.J.S.A. 58:lOB-13.l(b). N.J.S.A. 58:lOB-13.1.d). N.J.S.A. 58:lOB-13.l(e).

Real Property and Business Transfers 879

Reimbursement is accomplished by the entry into a redevelopment agreement property. between the Brownfield developer and the State. To be eligible for reimbursement, a developer must submit a written application to the Commerce Commission which addresses the following 880 factors: The economic feasibility of the redevelopment project; (1) The extent of economic and related social distress in the area of the (2) redevelopment project; The degree to which the development project will advance State, regional (3) and local development and planning strategies (consistency with the State Development and Redevelopment Plan); The likelihood that the redevelopment project will generate new tax (4) revenue in an amount exceeding the anticipated reimbursement to the developer; (5) The redevelopment project's relationship to the municipality's comprehensive development strategy, including other major projects within the community; The need for State reimbursement funding to make the development (6) project viable; and The degree to which the redevelopment project promotes job creation and (7) economic development. The most important factor is the anticipated generation of new tax revenue. Notwithstanding that the legislation establishes a 75 percent cap on the percentage of a remediation costs which will be reimbursed, the maximum reimbursement will not exceed the State Treasurer's estimate of new tax revenues to be generated by the project. Based on this estimate, the State Treasurer will establish a special account within the Brownfields Site 881 Reimbursement Fund for use in reimbursing approved remediation costs. In estimating the amount of new State revenues to be generated by a redevelopment project, the State Treasurer 882 shall consider only the following State taxes: (1)

879 880 88 1 882

Income tax imposed upon corporations (Corporation Business Tax);

N.J.S.A. 58:lOB-28. N.J.S.A. 58:lOB-27(b). N.J.S.A. 58:lOB-30. N.J.S.A.-58:lOB-28(b).

New Jersey Environmental Law Handbook 883

(2) (3) (4)

(5) (6) (7)

Sales and use tax generated as a result of the redevelopment; Tax imposed on savings institutions; Tax imposed on marine insurance companies; Tax imposed on fire insurance companies;

Tax imposed on insurers; The public utility franchise tax, gross receipt tax, and excise tax; and

The tax imposed on the net profits from a business, distributorship, (8) partnership income, or pro rata share of an S corporation income under the New Jersey Gross Income Tax Act. In most cases, the corporate business tax and the sales use tax will be the only applicable taxes generated by redevelopment program. Upon approval of the redevelopment application, the developer will negotiate a redevelopment agreement with the State authority specifying the schedule of reimbursement to the developer. In setting the maximum amount to be reimbursed under this program, the State will deduct any municipal property tax relief received by the project and any other State, local, or federal tax incentive or grant received by the project. The result is that the total economic benefit to the developer realized from all these governmental programs shall not exceed 75 percent of the remedial costs incurred by the redeveloper. The schedule of reimbursements is tied to the occupancy rate of the project, and reimbursement payments will be in the same percentage as the occupancy rate of the project. When the project is 90 percent occupied, the developer will be entitled to all of the cost reimbursement for which he is eligible. Reimbursement is made in response to the developer's written application to the Director of the Division of Taxation in the Department of the Treasury. The Director shall certify the 884 reimbursement request if he finds that: the project is subject to a redevelopment agreement and has generated new (1) tax revenues; the developer has entered into, and is in compliance with the terms of, an (2) NJDEP oversight agreement; and

883

884

Sales tax generated by businesses operating at the redeveloped property, the sales tax paid on the remediation costs, and the sales tax on the construction of new structures or residences will be considered. In lieu of an exact accounting of the remediation and construction sales taxes, 1 percent of the developer's contract price for the remediation and improvements, or such other percentage up to 3 percent if evidence that such taxes exceed 1 percent, can be used by the Treasurer for reimbursement purposes. N.J.S.A. 58:lOB-28(b).

Real Property and Business Transfers the remedial costs for which reimbursement is sought were "actually and (3) reasonably" incurred. The Director shall consult with NJDEP in making this last determination. The developer is 885 obligated to submit updated remedial costs actually incurred to the State Treasurer's office. Additional State economic incentives are available through grants and loans .from the 886 Hazardous Discharge Site Remediation Fund. Municipal governments, the New Jersey Redevelopment Authority, and individuals and private business entities are eligible for this State economic assistance. The State legislation allocates percentages of the Hazardous Discharge 887 Remediation Fund to specific categories of recipients. For example, 15 percent of Hazardous Discharge Site Remediation Fund is available for grants to innocent parties. Moreover, the legislation establishes qualification limitations based upon a party's financial condition. As an example, various portions of the fund are available only to those parties whose net worth does not exceed $2,000,000. Although the Hazardous Discharge Site Remediation Fund provides both grants and low cost loans to eligible recipients, most of the grant money is reserved for municipal entities. Loans to private entities will have an interest rate equal to the Federal Discount Rate at the time of loan approval or loan closing, whichever is lower, with a minimum 888 rate of 5 percent. This economic incentive program is administered by the New Jersey Economic Development Authority. It is funded by legislative appropriations, loan interest, and recoupment of loan principle, payment of the 1 percent annual surcharge levied upon all persons who are required to establish remediation funding sources pursuant to N.J.S.A. 58:lOB-11, and 889 monies deposited into the fund resulting from cost recovery subrogation actions. Because the assets of this State fund are not anticipated to equal the requests for economic incentives, the New Jersey Economic Development Authority, when considering an application for financial assistance, is authorized to consider the nature of the project for which financial assistance is requested, the nature of the threat to human health and the environment posed by the condition to be remediated, and the economic health of the applicant for financial assistance.

885 886 887 888 889

Site preparation, including soil compaction, costs are reimburseable; N.J.S.A. 58:lOB-31(b). N.J.S.A. 58:lOB-4. N.J.S.A. 58:lOB-6. N.J.S.A. 58:lOB-6(b). Pursuant to the passage of a 2003 Constitutional Amendment, a one-time transfer of $45.8 million of monies previously dedicated to UST cleanups was made for site remediation. Beginning January 1, 2006, 60 percent of monies constitutionally dedicated to remedial action for UST and other hazardous discharge sites is dedicated to non-UST sites.

New Jersey Environmental Law Handbook On the local level, economic incentives are provided through property tax relief. Relief is available for projects at vacant or underutilized locations in need of environmental remediation 890 which are designated by the municipality. A property located within an Environmental Opportunity Zone (EOZ) shall, if the municipality adopts an implementing ordinance, qualify for 891 a property tax exemption for 10 years. Moreover, the tax exemption may be extended by the municipality to 15 years if the site will be remediated to a limited restricted- or unrestricted- use 8 92

remedial action.

Such remediation must be consistent with NJDEP program requirements and

must be overseen by NJDEP through the issuance of a Memorandum of Agreement or an 893 Administrative Consent Order. A real estate tax exemption will be documented by a financial 894

agreement between the property and the municipality. Such agreement will require the property owner to make annual payments of a specified amounts in lieu of real property taxes, such payments to be established by the municipality. For a 10-year exemption, no payment in lieu of real estate taxes will be made in the first year. For the second through ninth years, payments will increase annually by 10 percent of the real property tax otherwise due. In the last 895 year, the payment in lieu of real estate taxes will equal the real property tax otherwise due. The municipality is free to establish a different payment schedule for a 15-year exemption. Finally, a Remedial Action Workplan submitted for a property located in an EOZ must be expeditiously processed by NJDEP. For soils remediation, NJDEP must respond within 45 days of the submission of a cleanup plan; groundwater or surface water cleanup plans must be 896 reviewed by NJDEP within 90 days of submission.

890 891 892 893 894 895 896

N.J.S.A. 54:4-3.152 and - 3.153. N.J.S.A. 54:4-3.154.

Id. N.J.S.A. 54:4-3.154(e). N.J.S.A. 54:4-3.156. N.J.S.A. 54:4-3.156(b).

N.J.S.A. 54:4-3.158.

Real Property and Business Transfers ENVIRONMENTAL LIABILITIES OF PURCHASERS AND LENDERS AND RELATED ISSUES 3.1 SUCCESSOR AND TRANSACTIONAL LIABILITY 3.1.1 Mergers and Acquisitions

3.0

In the merger of two corporations under New Jersey corporation law, environmental 897 liabilities, as with all liabilities, are obligations of the surviving corporation: When a merger or consolidation has become effective: the surviving or new corporation shall be liable for all the obligations and liabilities of each of the corporations so merged or consolidated; and any claim existing or action or proceeding pending by or against any of such corporations may be enforced as if such merger or consolidation had not taken place. Neither the rights of creditors nor any liens upon, or security interests in, the property of any of such corporations shall be impaired by such merger or consolidation. This statute establishes that not only environmental liabilities, but also liens created to secure such liabilities (such as the "super lien" provided for in N.J.S.A. 58: 10-23.11f(f)), will automatically inure to the new or surviving corporation in the event of a traditional merger. 898 Consequently, in Department of Environmental Protection v. Ventron Corp., the New Jersey Supreme Court held that as a result of a statutory merger of a subsidiary corporation into its parent, the parent corporation assumed all of the subsidiary's liabilities, including liabilities for pollution that occurred prior to the parent's acquisition of the subsidiary. The New Jersey Supreme Court recently held that proof of a merger is sufficient to establish liability under the 899 statute. Where an acquisition occurs by way of a stock sale, environmental liabilities will remain 900 with the acquired corporate entity despite the change of its stock ownership. The acquiring company will not, itself, be subject to those liabilities unless a case for piercing the corporate veil 90 1 is made or there is an independent statutory basis for holding the acquiring company liable. Where an acquisition occurs by way of a sale of all or substantially all of the assets of the acquired company, a different approach for determination of liability applies. Traditionally, in the case of an asset sale the transferee assumed none of the debts and liabilities of the

897 898 899 900 90 1

N.J.S.A. l4A: 10-6(e). 94 N.J. 473,468 A.2d 150 (1983). Baker v. Nat'l State Bank, 161 N.J. 220,736 A.2d 462 (1999). Dev't of Transv. v. PSC Resources. Inc., 175 N.J. Super. 447,419 A.2d 1151 (Law Div. 1980). See discussion infra at Section 3.1.2.

New Jersey Environmental Law Handbook 902

transferor. Nevertheless, the transferee was held responsible for the transferor's liabilities in 903 the following five limited circumstances: (1) where the purchaser expressly or implicitly agreed to assume the liabilities; where the transaction amounted to a consolidation or merger of the seller (2) 904 and the purchaser (defacto merger); where the purchasing corporation was merely a continuance of the selling (3) corporation; where the transaction was entered into fraudulently; or (4) where there was no adequate consideration for the sale. (5) 905 In Ramirez v. Arnsted Industries, Inc., the New Jersey Supreme Court liberalized the successor liability doctrine as applied to product liability cases. There the Court held that where a successor corporation acquires all or substantially all of the assets of a predecessor corporation, and continues to manufacture the same line of products as the predecessor corporation, the successor assumes liability for defects in units of the same product line manufactured by its predecessor where a third-party's remedy against the predecessor corporation has been 906 destroyed. New Jersey courts are split on the issue of whether the destruction of the thirdparty's remedy must be caused by the successor's acquisition of the predecessor before this 907 product-line theory of successor liability attaches. The theory applies equally to impose

Menacho v. Adamson United Co., 420 F. Supp. 128, 131 (D.N.J. 1976) (applying New Jersey law).

See McKee v. Harris-Sevbold Co., 109 N.J. Super. 555, 264 A.2d 98 (Law Div. 1970), affd on other grounds, 118 N.J. Super. 480,288 A.2d 585 (App. Div. 1972); Jackson v. Diamond T. Trucking Co., 100 N.J. Super. 186,241 A.2d471 (Law Div. 1968). The elements considered in analyzing a de facto merger case include: continuity of management, personnel, physical location, assets, and general business operations; continuity of shareholders when the purchasing corporation pays with its stock; cessation and dissolution of seller's operation; and the assumption of obligations necessary for the unintermpted continuation of normal business operations. Wilson v. Fare Well Corn., 140 N.J. Super. 476,356 A.2d 458 (Law Div.1976) 86 N.J. 332,431 A.2d 811 (1981). Accord Nieves v. Bruno Sherman Corp., 86 N.J. 361,431 A.2d 826 (1981). Compare Pacius v. Thermtroll Corn., 259 N. J. Super. 5 1,611 A.2d 153 (Law Div. 1992) (holding successor liable even though it neither contributed to the destruction of the predecessor nor continued to manufacture the predecessor's product lines) &y Hollowav v. State, 237 N.J. Super. 71, 566 A.2d 1177 (Law Div. 1989) (holding that the successor corporation must cause the destruction). See also Goncalves v. Wire Tech. & Mach. Co., 253 N.J. Super. 327,601 A.2d 780 (Law Div. 1991) (holding successor liable because third-party lost remedy against predecessor due to successor's acquisition of significant portion of predecessor's business).

Real Property and Business Transfers liability upon a purchaser of assets in bankruptcy as well as upon a purchaser in a more 908 traditional acquisition. 909 In Dwartment of Transportation v. PSC Resources, Inc., the court determined that successor liability would apply to environmental liabilities. In that case, defendant PSC first purchased all of the issued and outstanding stock of Diamond Head Oil Company. It then purchased all the assets of Diamond Head for $100, and dissolved Diamond Head. Thereafter, PSC, using virtually the same operating personnel and waste disposal practices, continued the operations of Diamond Head. The plaintiff sued to recover cleanup costs incurred in responding to these disposal practices. The Court held that where the successor corporation acquires all or substantially all the assets of the predecessor corporation for cash, and continues essentially the same operations as the predecessor corporation, the successor corporation incurs liability for 910 damages resulting fiom the discharge of hazardous substances by its predecessor. 911 In Brotherton v. Celotex Corp., the Court was faced with the issue of whether punitive damages arising fiom the conduct of a predecessor corporation could be visited upon a successor. The Court first noted that in the case of a statutory merger, N.J.S.A. 14A:lO-6 requires the successor to assume all obligations of the predecessor, including punitive damages. The Court then examined liabilities not directly covered by the merger statute. The Court distinguished the objectives underlying compensatory and punitive damages, noting that the purpose of punitive damages was not compensation of the victim, but punishment of the wrongdoer and deterrence of similar conduct. Accordingly, the Court held that punitive damages could be awarded against a successor corporation only if the plaintiff could show such a degree of identity between the successor and the predecessor so as to justify the conclusion that those responsible for the conduct giving rise to the punitive damage award would be punished, 912 and the successor deterred fiom similar conduct, by the award of punitive damages. Courts have not yet applied the holding in Brotherton in an environmental context, however, a similar rationale was cited by the New Jersey Supreme Court in denying punitive damages to the plaintiff in a products liability lawsuit brought against the asset purchaser in

908 909 910 91 1 912

Lefever v. K.P. Hovnanian Enters. Inc., 160 N.J. 307,734 A.2d 290 (1999). 175 N.J. Super. 447,419 A.2d 1151 (Law Div. 1980). 175 N.J. Super. at 467,419 A.2d at 1162. 202 N.J. Super. 148,493 A.2d 1337 (Law Div. 1985). 202 N.J. Super. at 156,493 A.2d at 1342.

New Jersey Environmental Law Handbook 913

bankruptcy of a successor to the manufacturer of a defective forklift. To the extent that a plaintiff in an environmental suit seeks to impose punitive damages on a successor company for the acts of the predecessor, the Brotherton standard would likely apply. Moreover, given the similarity in objectives between punitive damages and statutory penalties, it seems logical that penalties should not be imposed upon a successor corporation for the activities of a predecessor unless the test announced in Brotherton is met. 3.1.2 Parent-Subsidiary; Piercing the Corporate Veil The extent to which a parent corporation will be held accountable for environmental contamination caused by its wholly owned subsidiary was examined in depth by the New Jersey Supreme Court in Ventron. In that case, the NJDEP sued under the Spill Compensation and 914 Control Act, and common law theories, to recover costs incurred in remediating mercury contamination caused by a facility that had undergone changes in ownership a number of times. One of the entities in the ownership chain was a wholly owned subsidiary of another corporation. The NJDEP sought to impose liability on both the parent and the subsidiary. The parent was deeply involved in the subsidiary's operations. All directors of the subsidiary were officers of the parent, and the subsidiary's board met monthly at the parent's headquarters. The officers of the parent, who served as the subsidiary's board of directors, held extremely "tight rein" over the subsidiary's activities, reviewing in detail financial statements, product development, public relations, personnel practices, sales efforts, and daily operations of the subsidiary. The Court in Ventron, recognizing the fundamental proposition that a corporation is a separate entity from its shareholders, held that the doctrine of piercing the corporate veil should apply only when the corporate form is used to defeat the ends of justice, to perpetrate fraud, to accomplish a crime, or to evade the law. Since the plaintiff demonstrated no such improper purpose in the corporate form of the subsidiary, the Court declined to pierce the corporate veil to 915

impose liability upon the parent.

913

914

915

See Lefever v. K.P. Hovnanian Enters.. Inc., 160 N.J. at 326 n.4,734 A.2d at 301 n.4 ("Because fairness is the guiding principle, we agree that unless the successor's independent action provides a basis therefor, it would be unfair to impose punitive damages on a successor" unless the successor is "sufficiently connected to the culpable conduct.") N.J.S.A. 58:lO-23.11,etse~. 94 N.J. at 500-01,468 A.2d at 164; Accord Stochastic Decisions v. DiDomenico, 236 N.J. Super. 388, 565 A.2d 1133 (App. Div. 1989); Dm't of Envtl. Prot. Arkv's Auto Sales, 224 N.J. Super. 200, 539 A.2d 1280 (App. Div. 1988). The related question of whether an oil company is liable for the environmental costs of its independent distributor is discussed in Bahrle v. Exxon Corp., 145 N.J. 144, 678 A.2d 225 (1996).

Real Property and Business Transfers

In Ventron, the Court, while declining to pierce the corporate veil on traditional grounds, used the language of the Spill Act to find the parent corporation liable for the cleanup costs. The Court emphasized that the Spill Act imposed strict, joint, and several liability, without regard to fault for cleanup and removal costs, on "any person who has discharged a hazardous substance or 916 is in any way responsible for any hazardous substance." Consequently, the Court, relying upon the parent's extensive involvement in the day-to-day operations of the subsidiary, determined that the parent was a person "responsible" for the hazardous substances that the 917 NJDEP had removed and was, therefore, a liable party under the Spill Act. 3.1.3 Land Ownership In Ventron, the New Jersey Supreme Court overruled an older line of New Jersey cases 918 that had rejected the English doctrine of Rvlands v. Fletcher that imposed strict liability on a landowner engaged in an abnormally dangerous activity. The Court held that landowners engaged in the dumping of hazardous materials, or who permitted others to dump hazardous materials onto their property, were responsible for the consequences of that dumping, notwithstanding the fact that they had not intended to pollute the environment and had adhered to 919 the industry standards of the time. 920 In T & E Industries. Inc. v. Safety Light Corp., the New Jersey Supreme Court held that a predecessor in the chain of title to property owners who contaminated that property was absolutely liable to subsequent purchasers of the property without notice of the contaminated condition. In so concluding, the Court disregarded the lack of privity and the doctrine of caveat

94 N.J. at 502,468 A.2d at 165. Interestingly, in Arb's Auto Sales, the Court found the corporation liable under the Spill Act and declined to pierce the corporate veil to reach the two stockholders. 224 N.J. Super. at 206-07, 539 A.2d at 1283-84. However, the court failed to discuss whether the stockholders were, themselves, "responsible persons" under the Spill Act. 1 L.R. - Ex. 265 (EX.Ch. 1866). 94 N.J. at 487-88,468 A.2d at 157. On two separate occasions, courts have held the underground storage of gasoline is not an abnormally dangerous activity. The trial court in Bahrle v. Exxon Corp., L-094205-86 (Law Division April 10, 1992), ruled that the operation of a gasoline service is not an abnormally dangerous activity and that strict liability for such operation could not be based upon the abnormally dangerous activity doctrine as adopted in Ventron. See Chapter I1 discussing liability under the New Jersey Spill Act. In July 1992, the Appellate Division reversed a trial court's determination that the underground storage of gasoline is an abnormally dangerous activity as a matter of law. Reasoning that without an appropriate analysis applying the factors found in the Restatement (Second) of Torts $520 and a factsensitive determination as to whether an activity is abnormally dangerous, the court reversed and remanded the issue to the trial court for such an analysis. McCav Dev. Co., v. Cities Serv. Oil & Gas Corn., A-159491T1, (Appellate Division, July 30, 1992.) 123 N.J. 371,587 A.2d 1249 (1991).

New Jersey Environmental Law Handbook 92 1

emptor. Similarly, in Prospect Industries Cop. v. Singer Co., the Law Division held a predecessor in title liable to its successor for cleanup costs for PCB spills that occurred at a time when PCB's were not known to be hazardous. However, in Port of Monmouth Development 922 Corp. v. Middletown Township, the Court implied that the absolute liability established in 923 T&E Industries would not apply to the purchase of a non-hazardous waste landfill. 924 Beyond the common law, the broad language of the Spill Act has been held to impose strict, joint, and several liability upon the owner of property at the time a discharge occurs. In 925 Tree Realty. Inc. v. Department of Treasury, the owner/lessor of property was ordered by the NJDEP to remediate conditions caused by its lessee on that property. The owner/lessor performed the cleanup and then sought reimbursement of its cleanup costs from the Spill Fund pursuant to N.J.S.A. %:lO-23.ll g. The Court ruled that as an owner of the property at the time of discharge, the owner was a "responsible" person under N.J.S.A. 58: 10-23.1 1g(c) and, thus, 926 refused to allow the owner any Spill Fund reimbursement for its cleanup costs. The broad liability provisions of the Spill Act are tempered by only the most limited 927 affirmative defenses: war, sabotage, and acts of God. In the past, this statutory scheme merely suggested that even an "innocent purchaser" could be held liable for the cost of cleaning up a discharge for which it had no responsibility. In promulgating a 1991 regulation, the DEP, citing to the Spill Act, Ventron, Tree Realty, and Arky's Auto Sales, commented that they intended that 928 the definition of "person responsible" for a discharge to be interpreted broadly. While the NJDEP now defines a current owner of contaminated property as a person in any way responsible for a discharge - even if that person did not cause or contribute to the discharge - the Legislature, in a 1993 Amendment to the Spill Act, created a new defense to Spill Act liability for this category of person. A person acquiring property, after September 10,

238 N.J. Super. 394,569 A.2d 908 (Law Div. 1989). 229 N.J. Super. 445,551 A.2d 1030 (App. Div. 1988), certif. denied, 115 N.J. 59,556 A.2d 1206 (1989). 229 N.J. Super. at 451 n.l, 551 A.2d at 1033 n.l. N.J.S.A. 58:lO-23.11g(c). 205 N.J. Super. 346,500 A.2d 1075 (App. Div. 1985). 205 N.J. Super. at 348,500 A.2d at 1076; accord Arkv's Auto Sales, 224 N.J. Super. at 206-07,539 A.2d at 1283; Marsh v. Dep't of Envtl. Prot., 152 N.J. 137,703 A.2d 927 (1997). N.J.S.A. 58: 10-23.1 lg(d). 23 N.J.R. 2669(a) (Sept. 3, 1991) (commenting on N.J.A.C. 7:lE-1.6).

Real Property and Business Transfers 929

1993, and on which there has been a discharge, will not be considered a person in any way 930 responsible for a discharge if that person can show & oflthe following: The person acquired the real property after the discharge of the hazardous (1) substance; At the time the person acquired the real property: 1) the person did not (2) know and had no reason to know that any hazardous substance had been discharged at the 93 1

real property; 2) the person acquired the real property by devise or succession;

or 3)

the person, as a result of an appropriate inquiry discovered contamination but then performed a remediation or relied on a NJDEP-issued "no further action" letter; The person did not discharge the hazardous substance and is not in any (3) way responsible for the hazardous substance (other than by way of their property ownership); and The person gave notice of the discharge to the Department upon actual (4) discovery of the discharge. To establish that a person had no reason to know that any hazardous substance had been discharged, the person must have undertaken, at the time of acquisition, all appropriate inquiry into the previous ownership and uses of the property. The Legislature defines "all appropriate inquiry" as the performance of a preliminary assessment and site investigation (if the preliminary assessment indicates that a site investigation is necessary) as defined under ISRA and performed in accordance with the rules and regulations promulgated by the Department in defining these 932

terms.

In addition to the liability exceptions above, governmental entities also receive liability protection where the property is involuntarily acquired by it function of the sovereign or where the governmental entity acquires the property for the purpose of promoting redevelopment. As

929

930

93 1

932

The Legislature expressly indicated that nothing in the amendment should be construed to alter the liability of any person who acquired real property prior to September 10, 1993. N.J.S.A. 58:23.1 lg(d)(2)(a)-(e). The amendment to the Spill Act added an additional provision penalizing a person for transferring property without disclosing the known existence of a discharge. If a person who owns real property obtains "actual knowledge" of a discharge of a hazardous substance at the real property for the period of that person's ownership, and subsequently transfers ownership of the property to another person without disclosing that knowledge, the transferor is strictly liable for the cleanup and removal costs of the discharge and no defense to Spill Act liability is available to that person. N.J.S.A. 58:lO23.1 1g(d)(3). Any other funds or property received by that person from a deceased real property owner who discharged a hazardous substance or was in any way responsible for a hazardous substance is considered available to satisfy the requirements of the Spill Act. N.J.S.A. 58: 10-23.1lg(d)(2)(d).

New Jersey Environmental Law Handbook with other parties, governmental entities cannot receive liability protection where the entity has caused or contributed to the discharge of a hazardous substance. Governmental entities also cannot receive liability protection where they obtain a property through condemnation or 933 eminent domain and the property is being remediated in a timely manner. 934

In Department of Environmental Protection v. Exxon Corp., the Court refused to hold a landowner liable for contamination where the landowner demonstrated that the spillage that caused the contamination pre-dated its acquisition of the property and that it engaged in no activities that contributed to the contamination. The Spill Act became effective while the Exxon case was pending and did not provide the rule of decision for the case. Nevertheless, the court attempted to reconcile its ruling with the language of the Spill Act as then constituted. The court focused on the definition of "discharge," which required an intentional or unintentional action or omission resulting in a release, and on the statutory scheme that rendered a "discharger" strictly liable for cleanup costs, to conclude that even under the Spill Act, the landowner would not be 935 subject to liability because it could not be deemed to have caused the discharge. The Exxon case was decided in 1977, and in 1979, the State Legislature broadened the liability provision of the Spill Act to include not only "any person who has discharged a hazardous substance," but also any person who is "in any way responsible for any hazardous 936 substance." In Ventron, which was decided after the Spill Act was amended (but prior to the promulgation of N.J.A.C. 7:1E1.6), including "each owner and operator" within the definition of "person responsible for a discharge"), the New Jersey Supreme Court gave a lukewann endorsement to the holding in Exxon, stating, "[tlhe subsequent acquisition of land on which 937 hazardous substances have been dumped be insufficient to hold the owner responsible." The court also noted that the phrase "in any way responsible" was not defined in the statute and 938 that the Legislature intended the Spill Act to be "liberally construed to effect its purposes." Included as defendants in the Ventron case were the current owners of the property, who purchased it for real estate development purposes and did not continue the processes and disposal

933 934

935 936 937 938

N.J.S.A. 58:lO-23.11g(d)(4). 151 N.J. Super. 464,376 A.2d 1339 (Ch. Div. 1977). 15 1 N.J. Super. at 479-80,376 A.2d at 1346. N.J.S.A. 58:lO-23.1lg(c). 94 N.J. at 502,468 A.2d at 165 (emphasis added). 94 N.J. at 502,468 A.2d at 165; N.J.S.A. 58:lO-23.11~.

Real Property and Business Transfers practices that caused the contamination. At trial, the NJDEP attempted to prove that by demolishing industrial buildings and smashing pipes on the site, these landowners had contributed to the contamination. The trial court, rejecting that contention, ruled that the incremental contamination resulting fiom the demolition was de minimis. The Appellate 939

Division affirmed, reasoning:

[Tlhe [current landowners] have never operated a mercury processing plant on the site nor, according to the proofs, dumped mercury. We share the trial judge's view that any increment from the [current landowner's] property to the mercury pollution in Berry's Creek during their ownership . . . was de minimis and, therefore, not a substantial factor in proximately causing the total dangerous and toxic condition. Accordingly, we affirm the dismissal of DEP's action against the [current landowners] to impose liability for the costs of cleanup and removal of mercury pollution in Berry's Creek. The NJDEP declined to appeal this aspect of the Appellate Division's ruling. The New Jersey Supreme Court recently clarified the law in this area in Marsh v. 940 Department of Environmental Protection. Defendant Marsh acquired property in 199 1 which had previously been the site of a gasoline service station. Unknown to Marsh, several underground storage tanks were present on the property. Within several months of taking title to the property, Marsh performed an investigation, determined that the tanks and contamination therefrom were present and began remedial activities. Marsh filed a claim with the Spill Fund seeking compensation for the cleanup costs. The Supreme Court held that Marsh, as the owner of the property, was deemed a "person in any way responsible" under the Spill Act because underground storage tanks on the property discharged pollutants during her ownership. In addition, the Supreme Court explicitly held that there was no de minimis exception fiom Spill Act liability for discharge of hazardous substances. The Court noted by way of explanation that the DEP chose not to appeal the Appellate Division's ruling in the Ventron case that the property owners were not liable for a portion of cleanup costs. The Court's statement in the Ventron opinion that the owners were only responsible for a minimal aggravation of the contamination did not mean that the DEP could not hold such an owner liable, but that, in the exercise of its enforcement discretion, DEP apparently chose not to pursue such a person for Spill Act damages. Even if a purchaser of property escapes liability under the Spill Act, the State may attempt to invoke other statutes to impose liability. For instance, in VI-Concrete Co. v.

939

940

Dm't of Envtl. Prot. v. Ventron Corn., 182 N.J. Super. 210,440 A.2d 455 (App. Div. 1981), certif. granted, 91 N.J. 195,450 A.2d 530 (1982), affd as modified, 94 N.J. 473,468 A.2d 150 (1983). 152 N.J. 137,703 A.2d 927 (1997).

New Jersey Environmental Law Handbook 941

Department of Environmental Protection, the plaintiff purchased land that contained an asphalt plant, and related equipment, for use in its concrete business. The plaintiff, unaware that the land had previously been used as a sanitary landfill, or that there was any discharge emanating fiom the property, never applied for a permit to discharge. Nevertheless, the NJDEP invoked the 942

provisions of the New Jersey Water Pollution Control Act (WPCA), to issue unilaterally to plaintiff an NJPDES permit that required the installation of four groundwater monitoring wells. Plaintiff challenged the permit on the ground that the NJDEP lacked authority to unilaterally issue a permit where none was applied for. The New Jersey Supreme Court reversed

an Appellate Division decision and invalidated the permit, ruling that, absent a substantial evidential basis for the belief that the landfill was actually discharging pollutants, the WPCA did not authorize unilateral issuance of a permit to the owner of a closed sanitary landfill. The Court recommended that the agency proceed with rule making to develop standards and guidelines as 943 to when resort to the permit procedure was warranted. 3.1.4 Product Ownership A final way in which liability for the discharge of hazardous substances may be imposed relates to product ownership. In Department of Environmental Protection v. Arlington 944 Warehouse, the court held the owner of a warehouse and a number of companies whose chemicals were stored at the warehouse "responsible," within the meaning of N.J.S.A. 58:lO23.1 lg(c). for discharges that occurred when the warehouse caught fire. The court also noted that even under common law principles, because the owners of the chemicals were engaged in an abnormally dangerous activity, i.e., the manufacture and use of dangerous chemicals, they could be held strictly liable for damages caused by those chemicals and could not delegate that liability 945 to the owner of the warehouse. 3.2 LENDER LIABILITY 946 In 1993, New Jersey amended the Spill Act ("Amendment") to include a safe harbor provision protecting lenders fiom incurring Spill Act liability merely because the lenders held indicia of ownership in real or personal property to protect a security interest. Prior to this

941 942 943 944 945 946

220 N.J. Super. 176,531 A.2d 1039 (App. Div. 1987), &,

115 N.J. 1,556 A.2d 761 (1989).

N.J.S.A. 58:lOA-1, et sea. 115 N.J. at 12-13,556 A.2d at 767. 203 N.J. Super. 9,495 A.2d 882 (App. Div. 1985). 203 N.J. Super. at 15,495 A.2d at 885. P.L. 1993, C. 112 (codified at N.J.S.A. 58:lO-23.11g4, et seq.)

Real Property and Business Transfers Amendment, it was unclear in what circumstances a lender would be considered "in any way responsible" for a discharge. Although first created in 1993, the safe harbor provision is to be 947 applied retroactively. Under the Amendment, a lender who maintains indicia of ownership primarily to protect 948

a security interest ("'holder") is not liable for a discharge under the Spill Act as long as the lender does not participate in the management of the facility or vessel ("facility") in which 949

indicia of ownership is held after indicia of ownership is first acquired.

The Amendment organizes permissible lending activity into three categories: (1) activities occurring prior to the acquisition of a security interest, (2) activities occurring after acquisition of a security interest while the borrower is still in possession of the facility or vessel, and (3) activities occurring after acquisition of a security interest and after foreclosure of that interest. 3.2.1 Pre-Acquisition Activity No act or omission occurring prior to the time indicia of ownership is held to protect a 950 security interest constitutes evidence of participation in management. Therefore, a prospective holder may require a prospective borrower to undertake an environmental inspection of a facility, or may require a prospective borrower to clean up a facility or comply with any applicable law or regulation, without fear that these actions will be considered participation in the facility's management. 3.2.2 Post-Acquisition Activity A holder is permitted to engage in a variety of post-acquisition activities without voiding the safe harbor. First, a holder may engage in activities typically associated with the "policing of a loan." These activities include requiring the borrower to clean up a facility; requiring compliance with applicable laws and regulations; securing or exercising authority to monitor or

947

948

949 950

Kemv Indus., Inc. v. Safety Light Corn., 857 F. Supp. 373, 396-97 (D.N.J. 1994). Kemr, held further that New Jersey's safe harbor provision should be interpreted "consistently" with the "security interest exemption" contained in CERCLA. 857 F. Supp. at 398. The Amendment defines "primarily to protect a security of interest" as a security interest "held primarily for the purpose of securing payment or performance of an obligation." A holder may have other secondary reasons for maintaining indicia of ownership (i.e., holding for investment purposes); only the primary reason must be to protect a security interest. N.J.S.A. 58:lO-23.llg4. See Kemv, 857 F. Supp. at 397-99 (holding that a sale leaseback qualified for the safe harbor because the creditor held title to the property primarily to protect its security interest; the existence of secondary benefits of ownership, such as tax depreciation on the property, did not convert that conclusion). N.J.S.A. 58:lO-23.1185. N.J.S.A. 58:lO-23.11g4.

New Jersey Environmental Law Handbook inspect the facility; securing or exercising the authority to monitor or inspect the borrower's business or financial condition; and taking other actions such as requiring the borrower to comply with any warranties, covenants, conditions, representations, or promises obtained from 95 1 the borrower. Second, a holder may engage in activities typically associated with the "work out7' of a loan. These activities include restructuring or renegotiating the terms of the security interest; requiring payment of additional rent or interest; exercising forbearance; requiring or exercising rights pursuant to an assignment of accounts or other amounts owing to an obligor; requiring or exercising rights pursuant to an escrow agreement pertaining to amounts owing to an obligor; providing specific or general financial or other advice, suggestions, counseling, or guidance; and exercising any right or remedy the holder is entitled to by law or under warranties, covenants, 952 conditions, representations, or promises obtained from the borrower. A holder may also conduct any response action under CERCLA, the Spill Act or other 953 State or federal environmental law or regulation without voiding the safe harbor. 3.2.3 Post-Foreclosure Activity Indicia of ownership held after foreclosure and continuing to be maintained primarily as a protection for a security interest (provided that the holder did not participate in management prior to foreclosure) will not give rise to Spill Act liability provided that the holder undertakes to sell, release property held pursuant to a lease finance transaction, or otherwise divest itself of the 954 facility in a "reasonably expeditious manner" after foreclosure. The Amendment defines reasonably expeditious manner as "whatever commercially 955 reasonable means are relevant or appropriate with respect to the facility." In addition, the Amendment identifies certain conduct which will automatically be deemed commercially 956 reasonable and conduct which will automatically be deemed not commercially reasonable. Commercially reasonable activity includes listing the facility with a broker, dealer, agent, or advertising the facility as being for sale, on at least a monthly basis, in either a real estate or

95 1 952

953 954 955 956

N.J.S.A. 58:lO-23.1184. N.J.S.A. 58:lO-23.1184. N.J.S.A. 58:lO-23.1184. N.J.S.A. 58:lO-23.1186. N.J.S.A. 58:lO-23.11g6(a). N.J.S.A. 58:10-23.11g6(b)-(d).

Real Property and Business Transfers trade publication or a newspaper of general publication within 12 months from the time the 957 holder acquires marketable title. Activity deemed not commercially reasonable includes the holder outbidding, rejecting, or failing to act upon a written bona fide firm offer of fair consideration within 90 days of receipt 958

of the offer which is received after 6 months following the date of foreclosure. A holder must sell, release property held pursuant to a new lease financing transaction, or otherwise divest a facility no later than 5 years after the date of foreclosure or the holder is deemed to have held indicia of ownership not primarily to protect a security interest. A holder can avoid this determination, even after 5 years, if it can prove that it made a good faith effort to divest the property, obtained approval required by federal and State banking or lending laws to continue its possession of the property, and exercised reasonable custodial care to prevent or mitigate any new discharges from the facility that could substantially diminish the market value 959 of the property. 3.2.4 Exemption Limitations Although the Amendment grants broad protection to the lending community, there are some significant limitations. The exemption does not apply to liability for any new discharge from the facility occurring after the date of foreclosure that is caused by negligent acts or 960 The exemption also does not apply to liability arising out of the offomissions of the holder. site disposal or treatment of a hazardous substance or for accepting for transportation and 961 disposing of a hazardous substance at an off-site facility selected by the holder.

3.2.5 Holder's Obligations The Amendment also creates new obligations for a holder not previously included in the 962 Spill Act. If a holder forecloses on a facility at which it has actual knowledge a discharge occurred or began prior to the date of foreclosure, the holder must, within 30 days of the date of

957 958

959 960 961

962

N.J.S.A. 58:lO-23.1 lg6(c). N.J.S.A. 58:lO-23.11g6(b)(l). This activity also establishes that the ownership indicia in the secured property is not held primarily to protect the security interest, unless the holder is required, in order to avoid liability under federal or State law, to make a higher bid, to obtain a higher offer, or to seek or obtain an offer in a different manner. N.J.S.A. 58:10-23.11g6(b)(2). N.J.S.A. 58:lO-23.11g6(d). N.J.S.A. 58:lO-23.11g(e)(l). N.J.S.A. 58:lO-23.11g(e)(3).

The term "actual knowledge" is not defined by the Amendment and has yet to be interpreted by the courts.

New Jersey Environmental Law Handbook foreclosure, notify the DEP of the foreclosure. Failure to provide notice subjects the holder to a 963 civil penalty not to exceed $25,000. The holder must immediately notify the DEP of any new discharge at the facility, of which it has actual knowledge, occurring after the date of foreclosure. Failure to provide notice 964

subjects the holder to a civil penalty not to exceed $10,000 per day for each violation. 3.2.6 Fiduciary Liability The Amendment provides broad protection to trustees, receivers, and guardians against Spill Act liability potentially incurred in the course of carrying out their fiduciary duties. The Amendment provides that "only the assets of the trust or estate, or the assets of any discharger other than the fiduciary of such trust or estate," are subject to the obligation to pay for the 965 cleanup of a discharge of a hazardous substance under the Spill Act. While the Amendment clearly insulates a fiduciary from liability arising out of a discharge occurring prior to the fiduciary's appointment, it is less clear whether the Amendment is broad enough to include discharges occurring after the fiduciary's appointment or discharges caused by the fiduciary itself. 3.3 ENVIRONMENTAL LIABILITY AND BANKRUPTCY Bankruptcy cannot shield a company from criminal prosecution for violation of environmental laws or preclude prospective injunctive orders to cease polluting, but may in certain circumstances relieve a company of its obligation to pay monetary penalties for 966 environmental violations imposed prior to bankruptcy. Enforcement of a money judgment for 967 environmental contamination can be stayed during the pendency of bankruptcy proceedings, 968 and companies can benefit from the discharge of certain environmental claims, or even 969 abandon contaminated sites altogether, as a result of bankruptcy proceedings. Companies facing significant environmental liability, as well as creditors and governmental agencies with

963 964 965 966 967 968 969

N.J.S.A. 58:lO-23.11g7(c)(l). N.J.S.A. 58:10-23.1lg7(c)(2). N.J.S.A. 58:lO-23.11g9. Ohio v. Kovacs, 469 U.S. 274,284-85, 105 S. Ct. 705,710-1 1, 83 L. Ed. 2d 649 (1985). United States v. Nicolet. Inc., 857 F.2d 202,207 (3d Cir. 1988). Kovacs, 469 U.S. at 280-81. See Midlantic Nat'l Bank v. N.J. Dev't of Envtl. Prot., 474 U.S. 494, 106 S. Ct. 755, 88 L. Ed. 2d 859

(1986).

Real Property and Business Transfers environmental claims against such companies, must be increasingly aware of these varied and 970 critical legal complexities "at the intersection of bankruptcy law and environmental law." 3.3.1 Automatic Stay The Bankruptcy Code's automatic stay provision generally prohibits enforcement of money judgments as well as commencement or continuation of judicial or administrative 97 1 proceedings against debtors for pre-petition claims. Even if the debtor's acts occurred pre972

petition, a lawsuit may not be stayed if the cause of action arose post-petition.

The automatic

stay provision was enacted to provide debtors with a "breathing spell" during the pendency of a 973 bankruptcy proceeding and to centralize claims against debtors before the bankruptcy court. However, actions or proceedings commenced or continued by governmental units to enforce "police or regulatory" powers, as well as enforcement of non-money judgments, are specifically 974 exempt from the Bankruptcy Code's automatic stay provision. Congress specifically intended 975 this regulatory exception to apply to environmental enforcement. As a result, although federal and state environmental protection agencies cannot directly enforce money judgments against companies once a bankruptcy petition has been filed, those same agencies can continue to litigate 976 environmental lawsuits, establish their rights under those lawsuits short of enforcing a money judgment, and may be able to enforce orders compelling polluters to remediate environmental 977 hazards when expenditure of money is merely an incidental effect of such enforcement. As a practical matter, the Bankruptcy Code's automatic stay provision provides substantial protection to companies from environmental lawsuits by private third parties, and limits, but does not absolutely shelter, companies from continued enforcement actions by the government. The extent to which government enforcement actions can actually require the

In re Chateaugay Corn., 944 F.2d 997,999 (2d Cir. 1991). 11 U.S.C. $9 362(a)(l)-(2). In re M. Frenville Co., 744 F.2d 332,338 (3d Cir. 1984). Nicolet, 857 F.2d at 207 (citing H & H Beverage Distribs. v. Dep't of Revenue of Pennsylvania, 850 F.2d 165, 166 (3d Cir. 1988)). 11 U.S.C. $362(b)(4); In re Madison Indus.. Inc., 161 B.R. 363,366-67 (D.N.J. 1993) (holding that DEP's action seeking injunctive relief against the debtor for violations of RCRA was exempt &om the automatic stay as an exercise of the State's police power).

See Midlantic, 474 U.S. at 504, 106 S. Ct. at 761 (referring to House of Representative reports). Nicolet, 857 F.2d at 208-09. Penn Terra Ltd. v. Dev't of Envtl. Res., 733 F.2d 267,277-78 (3d Cir. 1984).

New Jersey Environmental Law Handbook expenditure of money during the pendency of a bankruptcy proceeding will likely be decided on the particular facts of each case. 3.3.2 Abandonment The Bankruptcy Code permits a trustee in bankruptcy, after notice and hearing, to "abandon any property- of the estate that is burdensome to the estate or that is of inconsequential 978 979 In Midlantic National Bank v. NJDEP, the United States value and benefit to the estate." 7

-

Supreme Court held that a trustee's power to abandon contaminated property is not unlimited, and that bankruptcy courts should not approve such abandonments "in contravention of a state statute or regulation that is reasonably designed to protect the public health or safety fiom identified hazards" or "without formulating conditions that will adequately protect the public's 980 health and safety." In Midlantic, the Supreme Court held that a bankruptcy trustee was not empowered to abandon property that contained a large quantity of highly toxic waste oil stored in deteriorating containers which presented such significant risks of explosion, fire, contamination, injury, and death that a fire suppression system and 24-hour guard had been put 98 1

in place to protect the public. In New Jersey, the federal bankruptcy courts have thus far construed Midlantic narrowly, and have permitted trustees to abandon contaminated property unless abandonment will either 982 Abandonment of a aggravate or create an imminent, serious, and identifiable harm. contaminated public water system was approved, for example, because the system's customers had been warned of the dangers of using such water for drinking purposes and "possessed the 983 means to protect themselves against any health hazard." Generally, when abandonment will shift the burden of clean up fiom the debtor to the State or private third parties without aggravating or creating an imminent risk to public health, abandonment will likely be 984 permitted. 978 979 980 981 982

983 984

11 U.S.C. •˜ 554(a). 474 U.S. 494, 106 S. Ct. 755,88 L. Ed. 2d 859 (1986). Midlantic, 474 U.S. at 507, 106 S. Ct. at 762. Midlantic, 474 U.S. at 497-500, 106 S. Ct. at 757-59. In re Heldor Indus.. Inc., 131 B.R. 578,588 (Bankr. D.N.J. 1991), vacated, 989 F.2d 702 (3d Cir. 1993); In re Anthonv Ferrante & Sons. Inc., 119 B.R. 45,49-50 @.N.J. 1990). See also N.J. Dev't of Envtl. Prot. v. North Am. Prods. Acauisition Corn., 137 B.R. 8,12 (D.N.J. 1992). Ferrante, 119 B.R. at 49-50. But see Pa. D a ' t of Envtl. Res. v. Conrov, 24 F.3d 568, 569-70 (3d Cir. 1994) (observing that State law prohibiting abandonment of a hazardous substance was enforceable and prohibited abandonment of dnuns and barrels of hazardous waste by the debtor).

Real Property and Business Transfers 3.3.3 Secured And Administrative Expense Priority Claims A debtor's estate in bankruptcy is subject to five general types of claims (listed here in order of priority): secured claims; administrative expenses; priority claims; unsecured claims; 985 Environmental claims are and equity interests. accorded special priority by the

Bankruptcy Code, and there is a risk in bankruptcy proceedings that the assets of the estate will not be sufficient to cover unsecured claims. Governmental and private parties with claims against a debtor in bankruptcy proceedings generally attempt, therefore, to acquire secured or administrative expense priority status in the proceeding. Governmental agencies that have acquired a lien against a debtor's estate pursuant to 986 987 environmental statutes such as CERCLA and the Spill Act will be recognized as secured 988 creditors in bankruptcy proceedings. Under the Spill Act's superlien, the Spill Fund Administrator may acquire the position of first secured creditor even over liens previously filed 989 by other creditors. Absent a statutory lien or other secured position, however, governmental agencies and private parties will be treated as unsecured creditors with the lowest priority for payment unless 990 cleanup expenses are determined to be administrative expenses in the bankruptcy proceeding. Administrative expenses are "actual and necessary costs and expenses of preserving the 991 estate." Some courts have held that post-petition cleanup costs incurred to remediate prepetition contamination qualify for administrative expense priority if the cleanup costs are 992 necessary to protect the public health and to preserve the estate. Other courts, however,

In re Torwico Elecs.. Inc., 131 B.R. 561, 564-65 (Bankr. D.N.J. 1991), & and vacated sub nom., Torwico Elecs., Inc. v. N.J. Dev't of Envtl. Prot. & Energy, 153 B.R. 24 (D.N.J. 1992), aff d sub nom., In re Torwico Elecs., Inc., 8 F.3d 146 (3d Cir. 1993), cert. denied, 51 1 U.S. 1046, 114 S. Ct. 1576, 128 L. Ed. 2d 219 (1994). 42 U.S.C.

8 9607(1).

N.J.S.A. 58:lO-23.1lf(f). Kovacs, 469 U.S. at 285-86 (1985) (O'Connor, J. concurring) ("a State may protect its interest in the enforcement of its environmental laws by giving cleanup judgments the status of statutory liens or secured claims").

See discussion in Chapter 11, Section 2.4; In re Perona Bros., 186 B.R. 833, 839 (D.N.J. 1995) ("State's assertion of its superpriority lien against the debtor's property did not violate the 'automatic stay' provision of the Bankruptcy Code, and constituted a valid superpriority lien against the debtor's property.") In re G-I Holdings. Inc., 308 B.R. 196,202-03 (Bankr. D.N.J. 2004). 11 U.S.C.

5 503(b)(l)(A).

In re Chateaugay Corn., 944 F.2d at 1009-10.

New Jersey Environmental Law Handbook including the bankruptcy court in New Jersey, generally treat cleanup costs as unsecured claims 993 if those costs are incurred to remediate pre-petition pollution. 3.3.4 Discharge of Debts and Claims A central purpose of bankruptcy reorganization is to discharge debts and claims that arose prior to the bankruptcy court's order of confirmation, providing businesses with a "fi-esh 994 start." Claims include any "right to payment" as well as any "equitable remedy for breach of performance" that may give rise to a right to payment "whether or not that right is actually 995 converted into a money judgment." Generally, environmental claims for money damages, response costs, and contribution are considered dischargeable claims under the Bankruptcy Code if they concern pre-petition 996 pollution and the costs were incurred pre-petition. However, some courts have held that such claims are not dischargeable if the legal right to assert them, contact with the debtor, or 997 manifestation of injury did not arise until after the court's confirmation order. Even certain types of injunctive relief in environmental cases can be discharged in bankruptcy. For example, affirmative injunctions mandating clean up of contaminated sites are dischargeable in bankruptcy if the injunction can only be satisfied by the expenditure of money, 998 at least when a receiver has been appointed. However, an injunctive order requiring a debtor to ameliorate ongoing and continuing pollution emanating from wastes - even if disposed of pre-petition -is not a claim dischargeable in bankruptcy, unless the debtor can establish that the order is an attempt by the State to repackage wholly past claims for damages that may be 999 discharged.

993

994 995 996

997

998 999

In re Mahonev-Troast Construction Co., 189 B.R. 57,60 (Bankr. D.N.J. 1995). See also Southern Rv. Co. v. Johnson Bronze Co., 758 F.2d 137, 141-42 (3d Cir. 1985) (refusing to give administrative expense priority to cleanup costs stemming from a pre-petition agreement). Williams v. U.S. Fidelity & Guaranty Co., 236 U.S. 549,35 S. Ct. 289,59 L. Ed. 713 (1915). 11 U.S.C.

9 lOl(5).

In re Chateaugav Corp. In re Penn Cent. Transv. Co., 944 F.2d 164, 167-68 (3d Cir. 1991), cert. denied, 503 U.S. 906, 112 S. Ct. 1262, 117 L. Ed. 2d 491 (1992); Schweitzer v. Consol. Rail Corn., 758 F.2d 936,941-43 (3d Cir. 1985); In re M. Frenville Co., 744 F.2d at 335-35. See Kovacs.

Torwico, 8 F.3d at 150.

Real Property and Business Transfers PRIVATE WELL TESTING ACT New Jersey is the only State in the nation that requires private drinking water well testing 1000 upon sale of a house. The Private Well Testing Act was enacted in 2001, and requires contracts for the sale of certain types of real property to include a provision requiring, as condition of the sale, the testing of private drinking water wells. Two types of real property are affected: 1) real property which obtains its drinking water supply fiom a private well located on the property, and 2) any other real property which obtains its drinking water supply fiom a well with less than 15 service connections or that does not regularly serve an average of at least 25 1001 individuals daily at least 60 days out of the year. Closing of title on the sale cannot occur unless both the buyer and seller have certified in writing that they have received and reviewed 1002 the water test results. The Act does not, however, prevent the sale if the water is found to fail a drinking water standard - the goal of the Act is to ensure that purchasers and lessors of property are fully aware of the quality of untreated drinking water source prior to sale or lease. By March 14, 2004 and at least every 5 years thereafter testing is required by lessors of real property that obtains its drinking water supply fiom a private well. The lessor is required to provide copies of the test results to each rental unit on the property within 30 days of receipt of the test results. A copy of the most recent test results must be provided to each new lessee. For seasonal use of rental real property, the lessor may post the test results in a visible location inside 1003 the real property or provide a copy to each new lessee. Testing for the following parameters is required: total coliform bacteria, nitrate, iron, manganese, pH, all volatile organic compounds for which maximum contaminant levels (MCL) 1004 1005 have been established pursuant to the New Jersey Safe Drinking Water Act, and lead. 1006 Private wells in certain counties must also test for additional parameters.

4.0

1000

N.J.S.A. 58:12A-26 to -37. Regulations promulgated pursuant to the act are found at N.J.A.C. 7:9E-1 9

seq. 1001 I002 1003 1004 I005

1006

N.J.S.A. 58:12A-27(a). N.J.S.A. 58: 12A-27(b). N.J.S.A. 58:12A-32. N.J.S.A. 58:12A-1 et sea N.J.S.A. 58:12A-28. Analysis for additional parameters is required if the sample tests positive for total coliform bacteria. N.J.A.C. 7:9E-2.1 (a)(2). N.J.A.C. 7:9E-2.l(b), (c), (d). The NJDEP website includes a chart setting forth each county's additional testing requirement. See u-sd/e(last updated July 1,2004).

New Jersey Environmental Law Handbook 1007

Testing pursuant to the Act must be conducted by an NJDEP-certified laboratory. Testing locations are specified by regulation and include that water samples be collected prior to any water treatment system that a house or well may have in place to remove or decrease the 1008 degree of contamination. The Act also contains specific guidelines with regard to the format and contents of test results, and also the release of the test results to the buyer, seller, and the 1009 NJDEP. When a level above an MCL is detected, the laboratory must notify the person(s) 1010 requesting the testing and the local health authority within 24 hours of the test results. If the NJDEP receives a report of a water test failure it has 5 days to provide notice of the failure to the 1011 county health department, health agency, or designated health officer of the county. The local county agent then may notify owners of property located in the vicinity of the affected property and recommend that these owners have their own private wells tested for the identified contaminant. The Act leaves it to the sole discretion of the county agent whether or not to issue 1012 such a notice. The reporting laboratory is required to provide the person requesting the test a Private 1013 Well Water Test Reporting Form, which must include an extensive list of information, including the Global Positioning System (GPS) location of the well head or front door of the 1014 subject property. The GPS coordinates must be collected in accordance with the DEP's standard requirements for GPS coordinates, found in the DEP Geographic Information Systems 1015 rules at N.J.A.C. 7:ID, Appendix A. Finally, the Act requires the NJDEP to share information collected through the well testing with the public (without disclosing specific addresses or locations) and to assess the

N.J.S.A. 58:12A-30(a). A list of certified laboratories is available on the NJDEP website. See httu://datamine.state.nj.us/DEP_OPKA/0uraMain/c~1te~ories?cate~ory=Certified+Lahoratories(last updated May 19,2004). N.J.A.C.7:9E-2.3. N.J.S.A. 58:12A-30(b), (c); see also N.J.A.C. 7:9E Subchapter 3. Confidentiality of the information produced by the laboratory is required by the Act. See N.J.S.A.58:12-30(e), (f); N.J.A.C.7:9E-5.1. N.J.A.C.7:9E-4.l(a). N.J.S.A.58:12A-31(a);N.J.A.C.7:9E-4.l(b). N.J.S.A.58:12A-31(a);N.J.A.C.7:9E-4.2. N.J.A.C. 7:9E-3.1(a)(l). The form is available on the NJDEP's http://w.state.ni.us/dev~uwta/nitestrevortinfom.vdf(last revised Dec. 28,2005). N.J.A.C.7:9E-3.1(a)(l)(xi). Id. -

website.

See

Real Property and Business Transfers 1016

quality of water from private wells on a statewide basis. Pursuant to this mandate, the NJDEP issued a report in February 2004 based on testing submitted to the Department during the first 6 months of the Private Well Testing Act program, including the results of over 5,000 tests 1017 The - representing approximately 1 percent of the drinking water wells in the state. preliminary results indicated that 92 percent of the private wells passed the required primary 1018 (health-based) drinking water standards.

1016 1017

1018

N.J.S.A. 58:12A-33. See NJDEP, Private Well Testing Act Program: Initial Well Test Results for September 2002 - March 2003, available at httv://www.state.ni.us/dedpwta/vwtarevort.vdf (Feb. 2004). Id. at i. -

CHAPTER IV SOLID WASTE MANAGEMENT NEW JERSEY SOLID WASTE MANAGEMENT PROGRAM OVERVIEW Background New Jersey traditionally relied upon landfills for its waste disposal. For much of its history, cheap land and easy highway access resulted in the State being a net importer of solid waste, primarily from Pennsylvania and New York. In the 1970s, faced with rapidly diminishing and environmentally unsound landfill capacity, and concerned about the influence of organized crime in the collection and disposal business, the NJDEP was given broad powers to supervise solid waste collection and disposal facilities and operations, and to register new and existing 1019 solid waste collection and disposal facilities and operations. Facilities handling hazardous waste, although technically also solid waste facilities, are discussed separately in Chapter V. Until 1991, the Solid Waste Utility Control ~ c gavetthe Board ~ of ~ Public ~ Utilities ~ (BPU) the power to supervise the solid waste collection industry and to regulate the rates and 1021 public utility aspects of the industry. In 1991, the responsibility for the regulation of solid 1022 waste was transferred to the NJDEP. In 2003, the Legislature amended certain sections of the Solid Waste Utility Control Act to coincide with the 1991 power transfer, replacing most references to the BPU with references to the NJDEP. However, not all the sections were so modified, leaving the appearance that certain powers related to the regulation of solid waste collection and disposal are still vested with 1023 1024 the BPU. The language of the Solid Waste Collection Reform Act also appears to place responsibility for the supervision of the solid waste industry with the BPU. Despite the language 1.0 1.1

1019 1020 1021 1022

1023

1024

N.J.S.A. 13:lE-4(a). N.J.S.A. 48:13A-2. N.J.S.A. 48: 13A-4. See Reorganization Plan No. 002-1991 and Reorganization Plan No. 001-1994,26 N.J.R. 2171 (June 6, 1994), set out under N.J.S.A. 13:lD-1. See, e.g., N.J.S.A. 48:13A-2 ("[BPU] is charged with the duty of setting and enforcing standards and rates for regulating the economic aspects of all solid waste disposal service"; N.J.S.A. 48:13A-6.2 (regulation of transfer stations). N.J.S.A. 48: 13A-7.1 et sea.

Solid Waste Management of the statutes, responsibility for all aspects of solid waste regulation has, as a practical matter, 1025 been in the hands of the NJDEP since 1991 pursuant to the reorganization plan. The discrepancy may be resolved with legislation that was proposed just prior to the revision of this Handbook in the Spring of 2006. The bill proposes legislation that would formally transfer all powers and duties of the BPU with respect to solid waste, including the two 1026 acts described above, to the NJDEP. In addition, the bill proposes legislation that would cause any reference to the BPU in any law or regulation relating to recycling, solid waste collection or solid waste disposal, to mean and refer to the NJDEP.

1.1.1 Scope of NJDEP Authority 1027 The Solid Waste Management Act is designed to promote comprehensive and uniform statewide management and regulation of solid waste. To implement this legislation, the NJDEP has adopted expansive regulations governing current practice and the future direction of solid 1028 waste collection and disposal in New Jersey. The NJDEP's already considerable authority over solid waste matters is further augmented by a series of judicial opinions addressing State 1029 pre-emption of the field of solid waste management. In addition, subsequent legislative 1030 1031 amendments and enactments have addressed solid waste financing, rate regulation, 1032 1033 1034 1035 1036 sludge, recycling, landfill closure, criminal influence, cogeneration, medical 1037 1038 1039 1040 waste, toxic packaging, used batteries, and the disposal of mercury switches.

This is evidenced in the various regulations promulgated pursuant to the solid waste acts, which are promulgated and enforced by the NJDEP. See, e.g,, Title 7, Chapter 26 of the New Jersey Administrative Code, which constitute the rules of the NJDEP that govern solid waste activities. A.B. 1123,212&Legislature (2006). N.J.S.A. 13:lE-1, et seq.

Chester Townshb v. NJDEP of Environmental Protection, 181 N.J. Super. 445, 438 A.2d 334 (App. Div. 1981); Little Falls Townshiv v. Bardin, 173 N.J. Super. 397, 414 A.2d 559 (App. Div. 1979); Ocean Countv Utilities Authority v. Planning Board of Berkeley Township., 221 N.J. Super. 621, 535 A.2d 550 (Law Div. 1987), affd, 223 N.J. Super. 461, 538 A.2d 1307 (App. Div. 1988); Townshiv Committee of South Harrison v. Board of Freeholders of Gloucester Co., 213 N.J. Super. 179,516 A.2d 1140 (Law Div. 1985), rev'd on other grounds, 210 N.J. Super. 370, 510 A.2d 42 (App. Div. 1986); Rollins Environmental Services, Inc. v. Logan Townshiv, 209 N.J. Super. 556,508 A.2d 271 (App. Div.), certif. denied, 105 N.J. 510,523 A.2d 157 (1986); Clean Capital Co. Comm. v. Driver, 228 N.J. Super. 506, 550 A.2d 494 (App. Div. 1988). County Solid Waste Disposal Financing Law, N.J.S.A. 40:66A-31.1, et sea. Solid Waste Utility Control Act, N.J.S.A. 48:13A-1, et sea. N.J.S.A. 13:1E-43, et sea.

New Jersey Environmental Law Handbook 1.1.2 Regulation Although the NJDEP possesses broad powers to enjoin activity and impose severe monetary penalties, its key tool in the solid waste regulatory arena is its licensing power. Unless an activity falls into certain narrow regulatory exemptions, all solid waste activities and facilities

(including collection, transportation, most recycling, incineration, treatment, and land disposal) 1041 must possess a license called an "approved registration statement." The NJDEP reviews and approves the registration statement for any new or substantially modified solid waste facility. The NJDEP is also empowered to enter any solid waste facility "at any time in order to determine compliance with the registration statement and engineering design" and any other 1042 applicable laws or rules and regulations. 1.1.3 Planning New Jersey's solid waste laws mandate extensive NJDEP involvement in developing and overseeing a sophisticated State and county planning process, with the counties and the Hackensack Meadowlands Development Commission (HMDC) acting as the planning and implementing agencies for wastes generated in their jurisdictions. The Solid Waste Management Act requires the NJDEP to develop and update at least biennially a "Statewide solid waste management plan" designed to encourage resource recovery and establish the "objectives, criteria, and standards" for the evaluation of county solid waste management plans and assist in 1043 the development and formulation of these plans. County solid waste management plans are discussed in Section 1.2 infra.

Statewide Mandatory Source Separation and Recycling Act, N.J.S.A. 13:lE-99.32, et seq.; N.J.S.A. 13:lE99.11, et sea. Sanitary Landfill Facility Closure and Contingency Fund Act, N.J.S.A. 13:1E-100, et sea. N.J.S.A. 13:lE-126, et s e a Solid Waste Disposal and Resource Recovery Act, N.J.S.A. 13:lE-136, et seq. Comprehensive Regulated Medical Waste Management Act, N.J.S .A. 13:1E-48.1, et sea. Toxic Packaging Reduction Act, N.J.S.A. 13:lE-99.44,

m.

Dry Cell Battery Management Act, N.J.S.A. 13:lE-99.59, et seq. Mercury Switch Removal Act of 2005, N.J.S.A. 13:lE-99.82, et seq. N.J.S.A. 13:lE-5. State v. Moscato, 253 N.J. Super. 253, 601 A.2d 743 (App. Div.), certif. denied, 130 N.J. 6,611 A.2d 646 (1992). N.J.S.A. 13:lE-9(a). N.J.S.A. 13:lE-6(a)(3).

Solid Waste Management 1.1.4 Economic Aspects of Solid Waste Regulation Two acts govern the economic aspects of solid waste regulation in New Jersey: the Solid 1044 1045 Waste Utility Control Act and the Solid Waste Collection Regulatory Reform Act. The former was designed to keep out organized crime influences in the solid waste industry and, as amended, directs the NJDEP to supervise the solid waste collection industry and regulate the rates and public utility aspects of the solid waste disposal industry. Until 1997, the NJDEP was authorized to award a franchise (k, the exclusive right to control and provide for the disposal of 1046 solid waste within a district) to solid waste disposal entities. In an effort to ensure the economic viability and competitiveness of the solid waste collection industry, the Legislature passed the Solid Waste Collection Regulatory Reform Act, effective April 14, 1992. The Reform Act established a 4-year transition period during which the NJDEP phased out its rate-setting authority over solid waste collectors. Solid waste collection companies remain public utilities but are no longer required to petition the NJDEP for authority to raise or lower their rates. Solid waste disposal facilities, including sanitary landfills and 1047 transfer stations, remain under traditional rate regulation. Pursuant to the Reform Act, every solid waste collector must pay (over and above the annual assessment mandated by N.J.S.A. 48:2-59) an annual fee of $100 to cover the costs of 1048 supervising the solid waste collection industry. The Act also authorizes the NJDEP to collect a filing fee of up to $500 fkom persons seeking to obtain certificates of public convenience and 1049 necessity. 1050

The NJDEP may compel the filing of annual reports and business records. The Act also allows the NJDEP to investigate any rates and charges and order refunds or other actions 1051 needed to promote competition. The NJDEP can direct any entity engaged in solid waste disposal to furnish proof of the reasonableness of its rates and can review and amend those

N.J.S.A. 48:13A-2 et sect. N.J.S.A. 48:13A-7.2 et sect. N.J.S.A. 48:13A-5. N.J.S.A. 48:13A-6.1,6.2. N.J.S.A. 48:13A-7.4(a). N.J.S.A. 48:13A-7.4(b). N.J.S.A. 48:13A-7.16, -7.17. N.J.S.A. 48:13A-7.20.

New Jersey Environmental Law Handbook 1052

rates. Additionally, the NJDEP can direct a franchisee to supply disposal services to any area 1053 where solid waste collection has been discontinued. Certificate of Public Convenience and Necessity Any business or individual seeking to engage in the collection or disposal of solid waste must first obtain a Certificate of Public Convenience and Necessity ("Certificate") from the 1054 NJDEP. Issuance of a Certificate requires a showing of appropriate qualifications, financial responsibility, and that the person proposing to engage in solid waste collection or disposal has 1055 been registered with and approved by the NJDEP. Solid waste facilities such as sanitary landfill facilities and transfer stations must file a tariff (fee schedule) with the NJDEP and have it 1056 approved prior to commencing operations. Enforcement A Certificate of Public Convenience and Necessity can be suspended or revoked by the NJDEP for violations of any public utilities or environmental laws, regulations, or orders, or as a 1057 consequence of NJDEP revocation of registration or licensure. The NJDEP's authority over solid waste "utilities" includes guarding against the monopolization of solid waste collection or 1058 disposal markets. If affected, the "state and any of its political subdivisions" can seek treble damages for monopoly violations. The NJDEP can compel the attendance of witnesses and the production of documents in the course of regulating solid waste facilities and may threaten 1059 revocation or suspension of Certificates to those who fail or refuse to comply. Penalties Any violation of the Solid Waste Utility Control Act is a crime of the fourth degree 1060 punishable by up to 18 months imprisonment or a $50,000 fine or both. Corporate violators

N.J.S.A. 48:13A-7. N.J.S.A. 48:13A-8; N.J.S.A. 48:2-27 (BPU can require a public utility to extend its operations); N.J.A.C. 14:3-10.18. N.J.S.A. 48:13A-6(a). The NJDEP has exempted certain rail carriers engaged in solid waste disposal, but not solid waste collection, from this requirement. N.J.A.C. 7:27H-1.6(f). Id. N.J.S.A. 48:13A-6.1, -6.2. N.J.S.A. 48: 13A-9. N.J.S.A. 48:13A-10. N.J.S.A. 48:13A-1 l(a). N.J.S.A. 48:13A-12(a). See, e.g., Matter of Reauest for Solid Waste Utilitv Customer Lists, 106 N.J. 508, 524 A.2d 386 (1987). Violation of N.J.S.A. 48:13A-12.1 regarding the use of solid waste vehicles to transport food is a crime of the third degree. N.J.S.A. 48:13A-12.2.

Solid Waste Management 1061

can be fined up to $100,000. Engaging in solid waste collection or disposal without a Certificate of Public Convenience and Necessity risks a $10,000 penalty for the first offense, $25,000 for the second offense, and $50,000 for the third and every subsequent offense. Each day during which the violation continues constitutes an additional, separate, and distinct 1062

offense. The NJDEP, a municipality, local board of health, or county health department may also institute a summary civil action in the New Jersey Superior Court for injunctive relief or 1063

"other relief as may be appropriate." All penalties and money judgments recovered pursuant 1064 to this section shall be paid to the Solid Waste Enforcement Fund. The courts have upheld the government's power, not only to impose these statutory penalties but to permanently exclude 1065 an individual or business fiom engaging in solid waste activities. 1.2 SOLID WASTE PLANNING AND IMPLEMENTATION 1.2.1 County Solid Waste Plans The emergence of a "solid waste crisis" in the late 1960s triggered a legislative response emphasizing long-term planning and statewide coordination. Each of the State's 21 counties and the HMDC was required to develop a "District Solid Waste Management Plan" ("County Solid 1066 Waste Plan" or "Plan") having a minimum perspective of 10 years. The NJDEP approves each County Solid Waste Plan and will amend or rewrite all or part of a Plan if it "is inadequate 1067 for the purposes for which it was intended." Each county must have an advisory solid waste council which must include "municipal mayors or their designees, persons engaged in the 1068 collection or disposal of solid waste, and environmentalists."

N.J.S.A. 48:13A-12(a). N.J.S.A. 48:13A-12(b). See, e.g., Matter of Fiorillo Bros. of N.J., Inc., 242 N.J. Super. 667, 577 A.2d 1316 (App. Div. 1990), certif. denied, 122 N.J. 363, 585 A.2d 371 (1990). But see 226 N.J. Super. 343, 544 A.2d 41 1 (App. Div.), certif. denied, 113 N.J. 638, 552 A.2d 164 (1988) (operation of station without certificate of public convenience and necessity involved ongoing conduct, without interruption, which constituted only one offense under statute).

m,

N.J.S.A. 48:13A-12(c). N.J.S.A. 48:13A-12. See, e.g., Matter of Scioscia, 216 N.J. Super. 644, 524 A.2d 855 (App. Div.), certif. denied, 107 N.J. 652, 527 A.2d 471 (1987). Matter of Inter County Refuse Service. Inc., 222 N.J. Super. 258, 536 A.2d 775 (App. Div. 1988). N.J.S.A. 13:lE-20. Id. N.J.S.A. 13:1E-20(b)(l).

New Jersey Environmental Law Handbook

1.2.2 Plan Contents Each county government, in consultation with environmental and zoning agencies, produces a County Solid Waste Plan and report containing the following: Maps showing "the boundaries of the solid waste management district and (1) 1069 the location of all existing and proposed solid waste facilities"; An inventory of the sources, composition, and quantity of solid waste (2) generated in the county in the year in which the report is prepared; A 10-year projection of the amount and composition of solid waste (3) generated over and above that generated in the year in which the Plan is first adopted; An inventory of all solid waste facilities within the district and their (4) estimated remaining capacities; An analysis of solid waste collection and transportation systems within the (5) county; Designation of a responsible county agency to implement the Plan; (6) Identification of a solid waste disposal strategy stressing a maximum (7) practicable use of resource recovery procedures; Planning for the use of terminated landfill disposal sites within the county; (8) A site plan locating existing solid waste facilities and additional available (9) treatment and disposal sites, or alternatively, a site plan and certification indicating an inability to site any future solid waste facilities; and (10) Detailed information on collection districts, traffic routes, transportation 1070 and disposal costs, collection and disposal agreements, and financing. 1.2.3 Plan Amendments County Solid Waste Plans seek to define existing solid waste practices and anticipate futwe demands, problems, and solutions. Accordingly, matters not identified in a particular Plan, such as proposals for new or modified solid waste facilities, require an amendment to it. Amendments to a Plan, including the inclusion of new facilities, must comply with the requirements of N.J.A.C. 7:26-6:lO. These procedures are particularly crucial in light of an Appellate Division ruling that the NJDEP is not statutorily authorized to issue a solid waste

1069 1070

N.J.S.A. 13:lE-23(b).

See, generally, N.J.S .A. 13:1E-2 1.

Solid Waste Management facility permit for a facility that is not included in the adopted and approved Solid Waste Plan of 1071 1072 the district. Indeed, amendments to a Plan must be supported by substantial evidence. 1.2.4 NJDEP Plan Review After public hearing, a Plan is adopted or amended by a vote of the county Board of Chosen Freeholders or HMDC, in consultation with the solid waste advisory council. Any person who files a written objection to the Plan or amendment at the public hearing may seek judicial review of adoption of the Plan or amendment by filing an action in lieu of prerogative writ, pursuant to New Jersey Rule of Civil Procedure 4:69, within 30 days following the 1073

adoption. Upon approval by the Board of Freeholders, the Plan or amendment is forwarded to the NJDEP which reviews it for consonance with "the objectives, criteria, and standards 1074 developed in the Statewide solid waste management plan." In the course of its review the NJDEP supplies copies of the Plan or Amendment to the State Advisory Council on Solid Waste Management and various NJDEP offices having expertise in solid waste, water pollution, air 1075 pollution, and geology. After consultation with these groups, the NJDEP either approves, modifies, or rejects the Plan or amendment and certifies its determination to the Board of 1076 Freeholders or HMDC. The NJDEP may require modifications either with or without 1077 additional public hearings. If a public hearing is not required, the Board of Freeholders must 1078 adopt the NJDEPYsmodifications within 45 days. While County Solid Waste Plans are not invalid for failing to incorporate recommendations of the NJDEP, the NJDEP Commissioner 1079 may on its own initiative adopt modifications and require County implementation thereafter. 1.2.5 Statewide Planning The Statewide Solid Waste Management Plan is required to be revised not less than once every 2 years, encourages resource recovery, and provides the objectives, criteria, and standards

Regional Recycling v. State, Dm't of Environmental Protection and Energy, 127 N.J. 568, 606 A.2d 815 (1992). Waste Disposal v. Monmouth Countv, 254 N.J. Super. 205,603 A.2d 145 (Law Div. 1991). N.J.S.A. 13:lE-23(f). N.J.S.A. 13:1E-24(a)(l). N.J.S.A. 13:lE-24(a). N.J.S.A. 13:1E-24(b). N.J.S.A. 13:lE-24(d). N.J.S.A. 13:lE-24(e). Middlesex Countv Health NJDEP v. Browning-Ferris Indus. of Eliz.. N.J., Inc., 252 N.J. Super. 134, 599 A.2d 554 (App. Div. 1991).

New Jersey Environmental Law Handbook 1080

for evaluating County Solid Waste Plans. The Statewide Solid Waste Management Plan was last updated and adopted in December 2005 and recognizes the "significant change to the landscape of solid waste management in New Jersey since the last plan update in 1993," including the invalidation of state waste flow rules, a decline in recycling rates, and the sunsetting of several taxes, including the "recycling tax" and the Resource Recovery Investment 1081 In addition to the responsibilities associated with the statewide plan, the NJDEP is also Tax. required to encourage and assist counties in the development and formulation of their Plans, and 1082 guidelines to implement those Plans. 1.2.6 Waste Flow In an attempt to impose order on the State's haphazard solid waste collection and disposal system prior to 1997, and to balance "waste flow" among existing facilities, the NJDEP and the BPU historically reviewed each of the 22 District Solid Waste Plans and established interdistrict and intradistrict waste flow orders directing solid waste, by type and point of generation, to 1083 designated disposal or transfer facilities. However, in 1994, the United States Supreme Court invalidated a New York waste flow ordinance as per se unconstitutional under the dormant 1084 Commerce Clause. Several lawsuits were subsequently filed in New Jersey state and federal 1085 courts challenging county waste flow rules on constitutional grounds. The plaintiffs in these

1080 1081

1082 1083 1084 1085

N.J.S.A. 13:lE-6(a)(3). 2006 Statewide Solid Waste Management Plan, Executive Summary, at htt~://www.state. ni.us/depldshw/recycle/m/(Dec. 28,2005).

1, available at

Id. N.J.A.C. 7:26-6.1, et seq. (amended and partially repealed, 29 N.J.R. 5084(a) (Dec. 1, 1997)). C&A Carbone. Inc. v. Town of Clarkstown, 51 1 U.S. 383, 114 S.Ct 1677, 128 L.Ed.2d 399 (1994) The Commerce Clause, which provides that "[tlhe Congress shall have power...[t]o regulate Commerce...among the several states," U.S. Const. Art I, $8, c1.3, operates both as an affmative grant of lawmaking power to Congress and as a limitation on the power of the States. The Supreme Court has developed a two-level analysis for determining whether a challenged state or local enactment violates the dormant Commerce Clause. If the local law, in either purpose or effect, discriminates against interstate commerce - i.e., imposes "differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter" - then it is subject to a heightened scrutiny test under which "the burden falls on the state to demonstrate both that the statute 'serves a legitimate local purpose,' and that this purpose could not be served as well by available non-discriminatory means." Maine v. Tavlor, 477 U.S. 131,138,106 S. Ct 2440,2447,91 L. Ed. 2d 110 (1986) (quoting Hughes v. Oklahoma, 441 US. 322, 336, 99 S. Ct. 1727, 1736, 60 L. Ed. 2d 250 (1979)). The State can discharge its burden only by making "the clearest showing that the unobstructed flow of interstate commerce itself is unable to solve the local problem." Carbone, 128 L. Ed. 2d at 409. By contrast, non-discriminatory local regulations that have only incidental effects on interstate commerce are subject to a more lenient balancing test. Pike v. Bruce Church Inc., 397 U.S. 137, 142, 90 S. Ct. 844, 846, 25 L. Ed. 2d 174 (1970). Under the test, such laws are valid, unless the plaintiff demonstrates

Solid Waste Management suits contended that the Carbone holding effectively removed the constitutional underpinnings of New Jersey's statewide solid waste flow scheme. Following the Supreme Court's lead in Carbone, the United States Court of Appeals for the Third Circuit invalidated New Jersey's flow control scheme in a pair of opinions. In Atlantic Coast I, the Third Circuit determined that New Jersey's flow control scheme discriminated against interstate commerce, and remanded the case to the District Court to consider whether that 1086

scheme passed muster under the heightened scrutiny test. On appeal following remand, the Third Circuit in Atlantic Coast I1 then affirmed the lower court's conclusion that the State had failed to demonstrate that non-discriminatory alternatives to the waste flow control scheme were 1087 unavailable, invalidating New Jersey's waste flow scheme under the Commerce Clause. Nevertheless, the Third Circuit substantially narrowed the scope of its holding and the resulting injunction by invalidating only (1) the codification of designated facilities at N.J.A.C. 1088 7:26-6.5; and (2) the State's solid waste self-sufficiency policy. The Court reasoned that, while these two regulations "discriminated against out-of-state waste disposal facilities in the process through which facilities were designated to dispose of each district's waste," the surviving statutory and regulatory provisions were not encompassed by the plaintiffs' petition for 1089 relief and "do not, in and of themselves, discriminate against interstate commerce." Indeed, the Third Circuit, following its earlier decision in Harvev & Harvey clearly stated that resumption of flow control in New Jersey would be permissible if out-of-state firms were given a 1090 fair opportunity to compete to become a designated facility in a District Solid Waste Plan. Following the Supreme Court's denial of certiorari in Atlantic Coast 11, NJDEP promulgated emergency regulations that allowed each of the State's 22 solid waste districts to formulate its own response to Atlantic Coast by submitting an amended District Solid Waste that the burden they impose on interstate commerce "is clearly excessive in relation to the putative local benefits." Ibid. Atlantic Coast Demolition & Recvcling. Inc. v. Board of Chosen Freeholders of Atlantic Countv ("Atlantic Coast I"), 48 F.3d 701,712-13 (3d Cir. 1995). Atlantic Coast Demolition & Recvcling. Inc. v. Board of Chosen Freeholders of Atlantic Countv ("Atlantic Coast II"), 112 F.3d 652, 656 (3d Cir.), cert. denied sub nom. Essex Countv Utils. Auth. v. Atlantic Coast Demolition & Recvcling, Inc., 522 U.S. 966, 118 S. Ct. 412, 139 L. Ed. 2d 316, and cert. denied sub nom. Shim v. Atlantic Coast Demolition & Recycling. Inc., 522 U.S. 966, 118 S. Ct. 413, 139 L. Ed. 2d 316 (1997). The injunction does not apply to those portions of N.J.A.C. 7:26-6.5 that permit the disposal of waste at out-of-state facilities. Atlantic Coast 11, 112 F.3d at 668 n.20. Id. at 668-69. Harvev & Harvev, Inc. v. Countv of Chester, 68 F.3d 788 (3d Cir. 1995), cert. denied sub nom. Tri-Countv Indus.. Inc. v. Mercer Countv, 516 U.S. 1173, 116 S.Ct 1265, 134 L.3d.2d 213 (1996).

New Jersey Environmental Law Handbook I091

Plan. Under the new rules, each district may either become a "market participant" by having its facilities compete with private solid waste service providers on the open market, or a "market regulator" by contracting for solid waste services with private providers through a system of non1092 discriminatory bidding. Districts that adopt the market regulator approach may direct that all waste generated in the district be sent to the facilities selected as a result of the bidding process. 1093 In 2003, the Legislature enacted the Commercial Landfill Regulatory Reform Act in an effort to reform the current system of economic regulation as it applies to privately owned commercial sanitary landfill facilities. The goal of the new legislation was to enable private facilities to participate on a level playing field with publicly owned disposal facilities in the State and out-of-state landfills which are not regulated in the more competitive marketplace created by the Court's invalidation of State waste flow control in Atlantic Coast. The Act requires the owner or operator of every privately owned sanitary landfill facility to obtain from the NJDEP a certificate of public convenience and necessity pursuant to the provisions of N.J.S.A. 48:13A1094 6. discussion supra at 1.1.4.1. The terms and conditions of solid waste disposal services at a privately owned sanitary landfill facility are required to be set forth in a tariff filed with the 1095 NJDEP. A privately owned sanitary landfill facility may adjust its solid waste disposal rates 1096 upon 30 days' notice to current customers. Pursuant to the Act, the solid waste disposal rates collected by a privately owned sanitary landfill facility shall be deemed just and reasonable for the purposes of N.J.S.A. 48:13A-7 if 1097 those rates are market-based rates. Even those rates which exceed the market-based rates are proper if they are designed to: (1) stabilize incoming waste flows and prevent the premature exhaustion of landfill capacity; or (2) recover sufficient revenues to meet the revenue 1098 requirements of the privately-owned sanitary landfill facility. The NJDEP may initiate contested case proceedings before the Office of Administrative Law if it has reasonable grounds

29 N.J.R. 4170(a) (Sept. 15, 1997); 29 N.J.R. 5084(a) (Dec. 1, 1997). 29 N.J.R. 5084(a) (Dec. 1,1997).

L. 2003, c. 169, N.J.S.A. 48:13A-7.24 et sea. N.J.S.A. 48:13A-7.27.

Id. N.J.S.A. 48:13A-7.28. N.J.S.A. 48:13A-7.30.

Id. -

Solid Waste Management

for belief that the solid waste disposal rates are not in compliance with the market-based 1099 rates. 1.3 TAXATION AND FEES 1.3.1 General Taxes and Fees The NJDEP collects annual solid waste regulation fees from collectors, transporters, and 1100 disposal facilities. The fee schedule for annual solid waste facility registration, volume 1101 monitoring, and planning consistency activities, are graduated based on the type of facility. 1102 Transporters are charged a biennial fee per vehicle. Counties may charge an enforcement fee 1103 based upon the volume of solid waste accepted for disposal at a county facility. With the exception of taxes statutorily authorized as a direct tariff surcharge, tipping fees collected at a solid waste facility are limited to the maximum contained in the tariff or contract approved by the NJDEP. 'lo4 1.3.2 Policy-Specific Taxes The NJDEP imposes a number of solid waste taxes designed to promote specific solid 1105 waste policies and goals. The Sanitary Landfill Facility Closure and Contingency Fund Act imposes a $0.15 per cubic yard of solids, and a $0.002 per gallon of liquids, tax to generate a 1106 landfill contingency fund which is strictly liable for damages due to landfill operation or 1107 closure. The Act also requires each landfill to deposit $1 per ton in an escrow account to 1108 cover the facility's anticipated future closure costs. Failure to make deposits or misappropriation of escrow funds is a third-degree crime punishable by fines of up to $15,000 or 1109 3 to 5 years imprisonment or both.

N.J.S.A. 48: 13A-7.31. N.J.A.C. 7:26-4.1. A November 15,2004 rule proposal by the NJDEP would exempt rail carriers from the fee requirement. See 36 N.J.R. 5055 (Nov. 15,2004). N.J.A.C. 7:26-4.3. N.J.A.C. 7:26-4.4. N.J.A.C. 7:26-4.5. N.J.S.A. 48:13A-5; see also N.J.S.A. 13:lE-163(c) (BPU not permitted to regulate tariffs of proposed resource recovery facility). N.J.S.A. 13:lE-100, et secl. N.J.S.A. 13:lE-104(b). N.J.S.A. 13:lE-106(a). N.J.S.A. 13:lE-109.

N.J.S.A. 13:lE-109(b); N.J.S.A. 2C:43-3(b), -6(a)(3).

New Jersey Environmental Law Handbook 1110

The Solid Waste Disposal and Resource Recovery Act imposes additional taxes to further specific solid waste policies. To promote resource recovery incinerators and to create a solid waste management and recycling fund, a solid waste service tax is collected at the current 1111 rate of $1.55 per ton of solids and is increased $0.05 annually. To encourage facility siting, host municipalities are entitled to an annual economic benefit not less than $1.00 per ton on all solid waste accepted for disposal at a landfill or incineration at a resource recovery facility, and 1112 not less than $0.50 for waste routed through a transfer station. 1.3.3 Environmental Investment Charges After the successful constitutional challenges to waste flow regulation, many solid waste utilities sought to impose Environmental Investment Charges (EICs) on waste generators or transporters that no longer used solid waste utility facilities. The EICs were designed to recover some of the economic costs of constructing the facilities, which economics were based on the prior regulatory requirement that all solid waste generated in the county would be handled at the solid 'waste utility facility. In IMO Passaic County Utilities Authority Petition Requesting 1113 Determination of Financial Difficultv and Application for Refinancing Approval, the New Jersey Supreme Court held that EICs were not authorized against non-users of the facilities under the Municipal and County Utilities Authorities Law. 2.0

GENERAL REQUIREMENTS GOVERNING SOLID WASTE COLLECTION, TRANSPORTATION, AND DISPOSAL OVERVIEW OF REQUIREMENTS

2.1 2.1.1 Key Definitions A "solid waste facility" is any plant, structure, system, site, facility, vehicle, equipment, or building utilized for the storage, collection, processing, transfer, transportation, separation, 1114 recycling, recovery, or disposal of solid waste, except for a "recycling center." A "recycling center" is a facility designed and operated solely for receiving, storing, processing, or transferring source separated recyclable materials (Class A, Class B, Class C, andlor Class D

1110 1111

1112 1113 1114

N.J.S.A. 13:lE-136, et sea. N.J.S.A. 13:lE-138(a). See also New Jersey Taxation website at httu://ivww.state.ni.us/treasum/taxation/index.html?notices.htm-mainFramefor annual updates on tax rates affecting landfill facilities. N.J.S.A. 13:lE-28.a.,-28.1.a; N.J.S.A. 48:13A-5.1. 164 N.J. 270,753 A.2d 661 (2000). N.J.S.A. 13:lE-3(h); N.J.A.C. 7:26-1.4.

Solid Waste Management 1115

recyclable material as defined by N.J.A.C. 7:26-1.3). The broad definition of "solid waste facility" includes all transport systems, transfer stations, incinerators, resource recovery facilities, and sanitary landfills. "Solid waste" is expansively defined to include garbage, refuse, sludge, waste material, and any liquid or contained gaseous material. The definition of solid waste specifically includes all of the following: spent material; discarded commercial chemical products; scrap metal or waste material resulting from industrial, commercial, mining, or agricultural operations, or from community activities; or any other material which has served or can no longer serve its original intended use and which is discarded, accumulated, or stored; burned for energy recovery; or 11 1 6 applied to the land or placed on land in a manner constituting disposal. This definition exempts certain source-separated food waste collected by livestock producers as well as spent 11 17 sulfuric acid and recyclable materials. Also excluded from the NJDEP rules governing solid waste facilities are source-separated or commingled source-separated recyclable, recycled, or secondary nonhazardous materials for reintroduction into the economic mainstream as materials 1118 for further processing or as products for use. 2.1.2 General Requirements A number of regulatory requirements apply to all solid waste facilities. Apart from certain identified exceptions, parties seeking to engage in the collection, transport, or disposal of solid waste in New Jersey must have the activity identified in the County Solid Waste Plan (e Section 1.2, supra), possess a Certificate of Public Convenience and Necessity from the NJDEP (see Section 1.1.4.1, supra), and file registration and disclosure statements for NJDEP 11 19 approval. A "registration statement" is legislative terminology for "permit application." The disclosure statement is part of an integrity review process. 2.2 DISCLOSURE STATEMENT AND INTEGRITY REVIEW To reduce or eliminate the influence of organized crime in the solid and hazardous waste collection and disposal industry, the Legislature passed a stringent disclosure regimen for virtually all parties engaged in hazardous and solid waste activities. The only solid waste or

1115 1116 1117 1118

1119

N.J.A.C.7:26-1.4.

Id. N.J.A.C.7:26-1.6. N.J.A.C. 7:26-1.1 (a) 1. One recent regulatory partial exemption from certain solid waste facilities requirements involves intermodal container facilities. These are defined as operations in which containerized solid waste is transferred fkom one mode of transportation to another within a 72-hour period. N.J.S.A. 13:1E-4.

New Jersey Environmental Law Handbook hazardous waste facilities not required to file a disclosure statement are those operated by government agencies and, under certain circumstances, persons handling their own solid 1120 waste. 2.2.1 Contents and Filing of a Disclosure Statement All non-exempt solid and hazardous waste facilities must file a disclosure statement 1121

containing the following information: the name, address, date of birth, and social security number of the (1) applicant, permittee, or licensee; of any officers, directors, partners, or key employees of the entity; and of all persons holding any equity in or debt liability of that business concern, or, if the business concern is a publicly-traded corporation, all persons holding more than 5 percent of the equity in or debt liability of that business concern (except where debt liability is held by a lending institution); the name, business address, home address, date of birth, and social (2) security number of all officers, directors, or partners of any business concern disclosed in the disclosure statement, and the names and addresses of all persons holding any equity in or the debt liability of any business concern disclosed in the disclosure statement and the names and addresses of all persons holding any equity in or the debt liability of any business concern so disclosed; or, if the business concern is a publicly traded corporation, all persons holding more than 5 percent of the equity in or debt liability of that business concern (except where debt liability is held by a lending institution); the name and business address of any company which collects, transports, (3) treats, stores, transfers, or disposes of solid waste or hazardous waste in which the applicant, permittee, or licensee holds an equity interest; a description of the experience and credentials in, including past or present (4) licenses for, the collection, transportation, treatment, storage, transfer, or disposal of solid waste or hazardous waste possessed by the applicant, or by the employees, officers, directors, or partners thereof; a listing and explanation of any violations, administrative orders, or (5) license revocations issued by any state or federal authority in the last 10 years relating to the collection, transportation, or disposal of solid and hazardous waste;

1120

1121

N.J.S.A. 13:lE-128; N.J.A.C. 7:26-16.3(d). The NJDEP regulation requiring disqualification of individuals who violated criminal or civil public policies of New Jersey and corporate entities employing such individuaIs has withstood a constitutional challenge on grounds of vagueness. Trade Waste Management Ass'n. Inc. v. Hughev, 780 F.2d 221 (3d Cir. 1985). N.J.A.C. 7:26-16.4.

Solid Waste Management a listing and explanation of any judgment of liability or conviction (6) rendered against the entity; a listing of all labor unions and trade associations in which the entity was a (7) member or with which the entity had a collective bargaining agreement; a listing of any agencies outside of New Jersey which had regulatory (8) responsibility over the applicant in connection with collection, transportation, or collection of solid or hazardous waste; a listing of all persons employed by the entity in its solid or hazardous (9) waste operations in New Jersey; and (10) extensive information on the personal history of every person required to be listed in the disclosure statement (other than a holder of debt liability or nonsupervisory employee) including information concerning family, education, and employment history. The Attorney General or the NJDEP may also require that the applicant provide other information relating to the competency, reliability, honesty, integrity, or good character of the 1122 applicant. A disclosure statement must be signed by all persons listed in the statement other 1123 All individuals required to be listed in the disclosure than non-supervisory employees. 1124 statement, other than non-supervisory personnel, must be fingerprinted. 2.2.2

Disclosure Investigation

The Attorney General is required to prepare an investigative report based on the disclosure statement and any independent inquiries, including those to the FBI, for submission to 1125 the NJDEP. The Attorney General is empowered to serve investigative interrogatories upon 1126 any person who may have information relevant to an investigation. The NJDEP's review of a solid or hazardous waste facility's registration statement includes review of the disclosure statement and the Attorney General's investigative report. All registrants have a continuing duty to provide any assistance or information requested by the NJDEP or the Attorney General. Approval of a solid or hazardous waste facility's registration statement can be denied or revoked for refusal to comply with a formal request to

1124 1125

1126

N.J.A.C. 7:26-16.3(~). N.J.S.A. 13:1E-128(a); see also N.J.S.A. 13:1E-128.1 (attorney general shall establish priority schedule for timely completion of investigative reports). N.J.S.A. 13:lE-129.

New Jersey Environmental Law Handbook 1127

answer any inquiry or produce information pursuant to the disclosure statement review. A solid or hazardous waste facility must provide written notification to the NJDEP of any changed 1128 Any changed information in a registrant's or new information within 30 days of such change. disclosure statement must be disclosed in the annual update at the time a registrant renews its 1129

registration. 2.3 REGISTRATION A solid waste facility must possess an approved registration statement or be permitted to 1130 operate under a temporary certificate of authority unless exempt under the regulations. The NJDEP is authorized to exempt an owner or operator of a solid waste facility from the 1131

registration requirement. Specific regulatory exemptions are discussed in Section 3.1.1, infi.a. As with the disclosure statement, solid waste collection, transportation, and disposal facilities must annually update the information contained in the registration statement and notify 1132 the NJDEP in writing within 30 days of any changes. Failure to update a registration statement or pay the review fees can lead to revocation of the registration statement or a 1133 declaration of expiration. 2.3.1 Registration Denial A registration statement will not be approved by the NJDEP unless it finds that the registrant exhibits sufficient reliability, expertise, and competency to operate a solid waste facility. Moreover, a registration will not be approved if a person required to be listed in the disclosure statement, or having a beneficial interest in the business, has been convicted of certain crimes under the laws of New Jersey or any other jurisdiction. These offenses include: gambling; deceit; forgery; fraud; securities fraud; weapons violations; drug possession; antitrust violations; perjury; violations of the Solid Waste Utility Control Act; and "any purposeful, knowing, willing, or reckless violation of the criminal provisions of any federal or state 1134 environmental protection laws, rules, or regulations."

N.J.A.C. 7:26-16.7. N.J.S.A. 13:lE-128.b N.J.A.C. 7:26-16.6(~). N.J.S.A. 13:lE-4(a); N.J.A.C. 7:26-1.7. N.J.S.A. 13:1E-4(a). N.J.S.A. 13:lE-128.b; N.J.A.C. 7:26-16.6(c). N.J.A.C. 7:26-2.8(d), -3.2(e). N.J.A.C. 7:26-16.8, -3.2(g), -2.8(e); N.J.S.A. 13:lE-133.b.

Solid Waste Management However, if that person has demonstrated rehabilitation by clear and convincing evidence, the applicant will not be denied a registration statement approval solely on the basis of that conviction. In determining rehabilitation, the NJDEP will request a recommendation from the Attorney General and consider factors such as the responsibilities of the individual's position, 1135

the nature of the offense, and any evidence of rehabilitation. A registration statement will not be approved by the NJDEP if the Attorney General determines that there is a reasonable suspicion that a person listed in the disclosure statement, or otherwise shown to have a beneficial interest in the business, does not possess a reputation of 1136 In the event of an ongoing prosecution or pending good character, honesty, and integrity. charges against an individual, the NJDEP will not approve a registration statement but may elect to defer its decision on the application until resolution of the charges. A registration statement may be revoked if any of a solid waste facility's key individuals are convicted of one of the offenses previously mentioned, or for fraud, deceit, or misrepresentation in either the disclosure statement, in securing the registration, or in the conduct 1137 of any registered activity. Once a registration statement is revoked or an application is denied 1138 due to disqualification, the registrant is ineligible for reapplication for a period of 5 years. However, the NJDEP may issue or renew a registration which was revoked or denied where the "public interest" requires, or if the registrant severs its affiliation with the individual causing the 1139 The NJDEP may deny or revoke a license if it finds that an applicant or disqualification. registrant attempted to avoid disqualification by designating an employee as an independent 1140 To prevent this practice, the NJDEP may inquire as to the legitimate purposes of contractor. 1141 any contract or arrangement. An individual convicted of violating the criminal provisions of any environmental law will not be considered rehabilitated by the NJDEP unless he has made all reasonable efforts to clean up or mitigate any resulting environmental damage and make restitution to any injured victims. If less than 10 years old, such a conviction creates a presumption against approving or

1135 1136 1137 1138 1139 1140 1141

N.J.S.A. 13:lE-133.1. N.J.S.A. 13:lE-133.c. N.J.S.A. 13:lE-134. N.J.A.C. 7:26-16.12(a). N.J.S.A. 13:lE-135. N.J.A.C. 7:26-16.23. Id. -

New Jersey Environmental Law Handbook renewing a registration statement. Any applicant whose registration statement is denied or 1142 revoked is afforded a NJDEP hearing upon written request.

SPECIFIC SOLID WASTE FACILITY REQUIREMENTS AND RESTRICTIONS 3.0 3.1 COLLECTION AND TRANSPORTATION FACILITIES 3.1.1 Registration Exemptions Collection and transportation registration requirements do not apply to persons transporting their own household refuse in vehicles with passenger plates or to persons transporting refuse in New Jersey-registered vehicles with a gross weight of 9,000 pounds or 1143 less. Exempt persons cannot, however, discharge solid waste near areas where commercial solid waste vehicles are loading or unloading or where heavy equipment is operating. In addition, persons transporting solid waste through New Jersey are exempt from the registration requirements, so long as the transporter is not picking up or disposing of waste in New Jersey 1144 and the waste is not stored in excess of 24 hours in New Jersey. 3.1.2 Collection and Transportation Restrictions Solid waste regulations prohibit service routes that cannot be completed during a normal operating day, storing waste in a vehicle for more than 24 hours, and the improper use or 1145 operation of a vehicle so as to allow the escape of solid waste. A vehicle must display its registration number, carry a registration certificate, and may utilize only those routes designated 1146 in the relevant County Solid Waste Plan. Specific collector and transporter requirements 1147 apply to sewage sludge, hazardous waste, and asbestos-containing waste. 3.2 DISPOSAL FACILITIES 3.2.1 Disposal Exemptions Certain types of waste handling activities are exempt fi-om the registration and operation requirements governing solid waste facilities in New Jersey. These include certain recycling activities, source-separated food waste fed to New Jersey livestock, and intra-plant handling of

1142

1145

1146 1147

N.J.A.C. 7:26-16.10.

The SWMA does not preempt municipal ordinances restricting traffic routes that can be used by licensed solid waste haulers. Clvde v. Mansfield Township, 263 N.J. Super. 140,622 A.2d 270 (App. Div. 1993). N.J.A.C. 7:26-3.4(h), 6). N.J.A.C. 7:26-3.5.

Solid Waste Management 1148

plant-generated waste materials. There are also general and specific criteria for the NJDEP to follow in deciding whether to exempt certain classes of solid waste facilities, including sanitary landfills, transfer stations, research, development and demonstration projects, and beneficial use 1149 projects. The disposal regulations also exempt rail carriers that transfer solid waste to or from 1150

rail cars. 3.2.2 Permitting Process Construction of a new solid waste disposal facility entails submission of a detailed registration statement in accordance with N.J.A.C. 7:26-2.8; an Environmental Health Impact 1151 Statement satisfying N.J.A.C. 7:26-2.9; and an engineering design. Certain pre-registration documents are also required. Upon completion of the registration application, the NJDEP schedules public hearings at which the applicant is required to appear and answer all relevant 1152 questions concerning the project. Registration statement applicants must develop an Environmental Health Impact Statement with a detailed analysis and assessment of the technical, economic, environmental, 1153 and social parameters potentially affected by the proposed facility. A solid waste facility registration approval does not excuse the facility from obtaining other relevant permits. For example, resource recovery facilities must still obtain air permits. In addition, almost every solid waste facility must obtain a NJPDES groundwater discharge permit to monitor groundwater. (& Chapter VII.) 3.2.3 Registration Renewals and Transfers Facility additions or alterations, new environmental data, changing NJDEP standards, or judicial decisions may require a solid waste disposal facility to modify its registration statement under penalty of revocation or termination. Major modifications require public notice and comment. Minor registration statement modifications, such as those involving changes in a contingency plan or in interim compliance schedule dates, can be made without public notice or hearing.

1148 1149 1150 1151 1152 1153 1154

1154

N.J.A.C. 7:26-l.l(a). N.J.A.C. 7:26-1.7. N.J.A.C. 7:26-2.1. N.J.A.C. 7:26-2.4(b). N.J.A.C. 7:26-2.5. N.J.A.C. 7:26-2.9(a). N.J.A.C. 7:26-2.6(d).

New Jersey Environmental Law Handbook

Disposal facility registration statements can be effective for up to 5 years and are 1155 renewable upon application made at least 90 days prior to expiration. Renewals require updated registration statement materials, public hearings, and NJDEP approval. If renewal is requested 90 days prior to the expiration date, the conditions of the expired registration statement may continue in force until a renewal determination is made. Registration statement transfers 1156 require 180 days prior notice and NJDEP approval. Approval of a solid waste facility's registration statement may be terminated for failure to comply with the statement's conditions, for incomplete or untrue information in an application, for environmentally unsound operation of a facility, or for changes in ownership. A solid waste disposal facility applicant is required to annually update the initial registration statement and notify the NJDEP within 30 days of any changed information in the 1157 registration statement. 3.2.4 Sanitary Landfill Operational Requirements All solid waste disposal and transfer facilities are subject to general regulations governing: the cleaning of waste handling areas, fencing, waste storage, dust, odor, insect and 1158 rodent control, fire fighting, asbestos handling, and recordkeeping. Sanitary landfills are subject to specific technical regulations governing air and water 1159 emissions, leachate control, and erosion. Landfills are barred from accepting hazardous waste, septic tank clean-out waste, liquid sewage sludge, and radioactive materials. All landfills must possess a NJPDES permit (& Chapter VII) and an approved soil erosion and sediment 1160 control plan. (B Chapter X). New facilities must have a minimum of four water level observation wells installed and 1161 monitored prior to operation. Regulations applicable to new facilities require an operations and maintenance manual that addresses the following topics: a quality assurance and control plan

1155 1156 1157 1158 1159 1160 1161

N.J.A.C. 7:26-2.7(a), (b). N.J.A.C. 7:26-2.7(e). N.J.A.C. 7:26-2.8. N.J.A.C. 7:26-2.11t02.13. N.J.A.C. 7:26-2A.4. N.J.A.C. 7:26-2A.4(g). N.J.A.C. 7:26-2A.5(a)(6)(vi)(11),(12).

Solid Waste Management

for soil and water characterization, employee training, emergency contingency planning, and 1162 arrangements with local fire and police departments. 1163 New sanitary landfills are subject to extensive design and construction requirements. They must have a berm to control surface water run-on and runoff; a double liner with a leak detection system; modular design; extensive NJDEP-monitored quality assurance and quality control testing in accordance with an approved QAIQC plan; a leachate treatment system with an 1164 alarm system to warn of system failure; and a soil and water quality monitoring system. Operating sanitary landfills must meet increasingly stringent performance standards. To prevent any decrease in ground or surface water quality, landfills must have adequate leachate collection and treatment systems, gas venting systems, surface drainage control, groundwater monitoring systems, and appropriate interim and final capping. 1165 Extensive regulations govern landfill operations and maintenance. These address the following: the size and closure of the working face; daily waste volumes; lift levels; cover thicknesses; drainage runoff; equipment maintenance; vehicle scales; dust control; vehicle cleaning; monitoring systems; traffic control; employee training; emergency procedures and reporting; buffer zone maintenance; leachate collection and treatment system maintenance; and asbestos disposal. 3.2.5 Rail Carrier Requirements Effective November 15, 2005, the NJDEP imposed requirements upon rail carriers 1166 transferring solid waste to or from rail cars. Prior to commencing solid waste transportation operations in New Jersey, the rail carrier must provide to the NJDEP the following information: 1) a description of the geographic location of the rail carrier's facility, identifllng the address of and the municipality in which the facility is located; and 2) a description of the facility operations certifying that containers will not be opened and that employees, the public, or the 1167 environment will not be exposed to solid waste except as allowed by the regulation. The regulation sets forth standards for the operation of rail carriers, both those that engage in tipping and processing, and those that transport exclusively in sealed containers.

1162 1163 1164 1165 1166 1167

N.J.A.C. 7:26-2AS(a)8. N.J.A.C. 7:26-2A.7. N.J.A.C. 7:26-2A.7. N.J.A.C. 7:26-2A.8. N.J.A.C. 7:26-2D.1.

Id. -

New Jersey Environmental Law Handbook

LANDFILL CLOSURE AND POST-CLOSURE 3.3.1 General Requirements All landfill facilities operating on or after January 1, 1982, must have a closure and postclosure plan ("Closure Plan") and maintain an escrow account in accordance with the Sanitary 1168 Landfill Closure and Contingency Fund Act. This Act requires every owner and operator to notify the NJDEP at least 180 days prior to the closure of a facility. In the event of a sale, a detailed description of landfill activities must appear in the contract and be recorded along with 1169 the deed. The post-closure care period is 30 years unless the NJDEP demonstrates that a reduced period is sufficient to protect human health or the environment. 3.3.2 Closure Plan and Contents Landfill closure is governed by a Closure Plan. A copy of the Closure Plan must be kept on file at the landfill until closure, when it is filed with the clerk of the host municipality. The Closure Plan must contain a Soil Erosion and Sediment Control Plan in accordance with the Soil 1170 Erosion and Sediment Control Act of 1975. The Closure Plan must address final cover, vegetation, runoff and run-on control, groundwater monitoring, methane gas venting, leachate 1171 collection, and control and long-term security. Within 90 days of closure, the owner or operator must obtain "as built" certification by an engineer that the Closure Plan has been implemented in accordance with its time schedule. 3.3.3 Closure Escrow Fund A post-closure financial plan must be prepared containing an estimate of the costs of post-closure care together with an estimate of available post-closure escrow funds. Sanitary landfill operators must make monthly escrow deposits equal to $1 per cubic yard of solids. Escrow accounts must be structured in accordance with NJDEP guidelines and -periodically 1172 audited. 3.3.4 Deed Notice and Voidable Transactions A landfill owner is statutorily barred from selling land utilized as a sanitary landfill 1173 unless the contract of sale discloses prior landfill use and the periods of such utilization. A

3.3

N.J.S.A. 13:lE-100, et sect. This requirement is applicable to any landfill, even those whose operations terminated before January 1, 1982. See Section 3.3.4, infra. N.J.S.A. 4:24-39, et seq.; N.J.A.C. 7:26-2A.9(e)(2). N.J.A.C. 7:26-2A.9(e)(2). Id. N.J.S.A. 13:lE-116; N.J.A.C. 7:26-2A.9(~)(3).

Solid Waste Management contract of sale which violates this requirement is "voidable" at the discretion of the buyer and substantial compliance with the statutory requirements is not recognized as a defense to the 1174 contract's voiding. The regulations expand the statutory notice provisions by requiring that a detailed description of former landfill activities, including types, locations and depths of wastes, 1175

and periods of activity, be recorded along with the deed. Prospective buyers can obtain a compliance history of the former landfill upon written request to the NJDEP.

3.3.5

Strict and Retroactive Liability of Owners and Operators Every sanitary landfill owner or operator is "jointly and severally liable for the proper operation and closure of the facility, as required by law, and for any damages, no matter by 1176 whom sustained, proximately resulting fkom operations or closure." The application of this strict liability provision is not necessarily limited to landfills operated after 1981: "Owner or operator" means in addition to the usual meanings thereof, "every owner of record of any interest in land whereon a sanitary landfill facility is or has been located, and any person or corporation which owns a majority interest in any other corporation which is the owner or operator of any 1177 sanitary landfill facility." The breadth of this definition makes virtually all past, present, and future landfill "owners and operators" potentially subject to strict liability for improper landfill operation or closure. One court held individual operator defendants owning less than a majority share to be liable as an "owner or operator7'under the Act where the shareholder shows a high degree of involvement 1178 in the operation and decision-making process of the corporation. The court, citing this Handbook, noted that the scope of liability is further enlarged by the statutory definition of "closure" which includes "all activities and costs associated with the design, purchase, construction, or maintenance of all measures required by the [NJDEP], pursuant to law, in order to prevent, minimize, or monitor pollution or health hazards resulting from sanitary Landfill 1179 facilities ..."

1174

1175 1176 1177 1178

1179

N.J.S.A. 13:lE-116(b). Johnson Machinerv Co. v. Manville Sales Corp., 248 N.J. Super. 285, 590 A.2d 1206 (App. Div. 1991); National-Standard Co. v. Clifton Ave. Corp., 775 F.Supp. 151 (D.N.J. 1991). N.J.A.C. 7:26-2A.9(~)(4). N.J.S.A. 13:lE-103. N.J.S.A. 13:lB-102@). New Jersey Dep't of Environmental Protection v. Gloucester Environmental Management Services Inc., 800 F. Supp. 1210 (D.N.J. 1992). Id. at 1217 n.7 -

New Jersey Environmental Law Handbook 3.3.6 Sanitary Landfill Facility Contingency Fund 1180 The Sanitary Landfill Facility Closure and Contingency Fund Act imposes a tax on the owner or operator of every sanitary landfill facility to ensure the proper closure of the 1181 facility. Monies collected by the NJDEP are deposited into the Sanitary Landfill Contingency 1182 The statute provides that the "fund shall be strictly liable for all direct and indirect Fund. damages, no matter by whom sustained, proximately resulting from the operations or closure of any sanitary landfill."

1183

However, the regulations effective on February 22, 1994, are clearly more restrictive than the statute and limit claims against the Fund to those arising from damages 1184 resulting from the improper operation or closure of any sanitary landfill. The regulations also 1185 prohibit claims of subrogees and assignees of those persons who have incurred damages. 3.4 MISCELLANEOUS SOLID WASTE FACILITIES 3.4.1 Resource Recovery Facilities One legislative response to declining State landfill capacity and the increasing costs of out-of-state disposal is to promote the siting and construction of state-of-the-art incinerators, or "resource recovery facilities." This is accomplished through financial incentives funded by taxes on solid waste disposal at New Jersey landfills (& Section 1.3.2, supra) and through the establishment of a procurement procedure to help local governments contract with private finns 1186 for the construction and operation of incinerators. To encourage siting, host municipalities 1187 are to receive a minimum of $1 per ton on all solid waste processed at a facility. Financial assistance, in the form of loans and outright grants, are available to help counties defray the costs 1I88

of developing resource recovery capacity.

N.J.S.A. 13:lE-100, et sect. N.J.S.A. 13:lE-104(a). N.J.S.A. 13:lE-105. N.J.S.A. 13:lE-106(a). N.J.A.C. 7:lI-1.6. N.J.A.C. 7:lI-2.1. N.J.S.A. 13:lE-136, et sect. N.J.S.A. 48:13A-5.1. Natural Resources Bond Act, L.1980, c.70; Resource Recovery and Solid Waste Disposal Facility Fund, L.1985, c.330,331,335; N.J.A.C. 7:26-14.1, et sect.; N.J.A.C. 7:26-14A.1, et sea.

Solid Waste Management 3.4.2 Transfer Stations Transfer stations are facilities where waste is transferred from collection vehicles to longdistance transport vehicles, usually for out-of-state disposal. The ever-decreasing availability of landfill space in the State has, at least for the short term, made transfer stations a key element in New Jersey's solid waste management scheme. Transfer station operations are considered solid 1189 waste facilities and are thus subject to New Jersey's permitting scheme. Specific procedures for obtaining a transfer station permit are set forth at N.J.A.C. 7:26-2.4 and N.J.A.C. 7:26-2B.9. The general operational requirements for transfer stations are set forth at N.J.A.C. 7:26-2.11. A transfer station may be exempt fiom solid waste facility permitting requirements, and may obtain a certificate of authority to operate for a period up to 6 months, if it meets the 1190 specific requirements set out in the regulations: (1) the proposed. owner or operator demonstrates sufficient integrity, expertise, and competence to operate a transfer station facility; use of the facility prior to permitting is essential in order to avoid a (2) disruption of solid waste disposal services; the facility will be designed, constructed, and operated in a manner (3) consistent with public health, safety, and the environment; and the certificate of authority contains a schedule for compliance with (4) permitting requirements. An application for a certificate of authority to operate must contain a compliance schedule for submitting a registration statement, a disclosure statement, an emergency 1191 environmental impact statement, and an engineering design. The regulations also call for a clarification of existing operational requirements, such that the ton per day maximum under a facility's permit would be deemed inclusive of all solid waste 1192 received as well as all quantities of source-separated recyclables. 3.4.3 Cornposting Facilities Source-separated compostable material is considered a Class C recyclable and includes 1193 food waste, yard trimmings, and biodegradable plastic. Class C recycling centers have

1189 1190 1191 1192 1193

N.J.A.C. 7:26-2.4. N.J.A.C. 7:26-1.7(e)(l). N.J.A.C. 7:26-1.7(e)(2). N.J.A.C. 7:26-2.11 (b)(lO).

N.J.A.C. 7:26A-1.3.

New Jersey Environmenta1Law Handbook 1194

specific application and operational requirements set forth in the recycling regulations. If, however, specific enumerated conditions are met, the composting of yard trimmings may be exempt from the approval requirements of N.J.A.C. 7:26A-3 and the solid waste planning 1195 requirements of N.J.A.C. 7:26-6.10. Each municipality is required to provide for a collection system for source-separated 1196 leaves generated from residential premises. All leaves collected by a municipality must be transported to a leaf composting facility, vegetative waste composting facility or recycling center 1197 authorized or approved by the NJDEP. The statutes require NJDEP approval for leaf composting facilities to be located on agricultural or horticultural land, or on lands owned or 1198 operated by a recognized academic institution. 3.4.4 Design Requirements Separate regulations govern the design and operation of thermal destruction facilities, transfer stations, resource recovery facilities, co-composting facilities, and composting 1199 facilities. Incinerator designs must include capacity, heat output, and residue analysis and 1200 handling. Transfer station designs must address wastewater treatment, noise control, traffic 1201 control, and fire and explosion suppression. A sludge composting operation, called a "cocomposting facility" is required to obtain a NJPDES permit (see Chapter VII) and submit an engineering report addressing, inter alia, the sources, composition, and prior processing of the 1202 sludge, dewatering processes, site layout, and equipment.

RECYCLING In an effort to reduce the volume of solid waste requiring treatment or disposal, New Jersey supplemented the Solid Waste Management Act in 1981 with the Clean Communities and 1203 Recycling Act. This legislation was replaced in 2002 with the Clean Communities and

4.0

N.J.A.C. 7:26A-3.18, -4.5. N.J.A.C. 7:26A-4(a)(13, 18). N.J.S.A. 13:lE-99.22. N.J.S.A. 13:lE-99.21. N.J.S.A. 13:lE-99.21a. N.J.A.C. 7:26-2B.1, et sea. N.J.A.C. 7:26-2B.4. N.J.A.C. 7:26-2B.5. N.J.A.C. 7:26-2B.6. N.J.S.A. 13:lE-92, et sea., repealed by L. 2002, c. 128, $ 11.

Solid Waste Management 1204

Both acts were founded on the premise that recycling will decrease the Recycling Grant Act. waste flow to landfill sites, substantially reduce the required capacity and costs of resource recovery facilities, recover valuable resources, and conserve energy in the manufacturing process 1205 by offering a supply of raw materials for industry. However, the later Act provides some funding for recycling grants to municipalities and counties. (& discussion infra at 4.1.1.) The funding is generated by a user fee imposed upon any manufacturer, wholesaler, distributor, or certain retailers of "litter-generating products" on sales in New Jersey. "Litter generating products" are specific goods listed in the Act which are produced, distributed, or purchased in disposable containers, packages or wrappings, or which are commonly discarded in public 1206 places, including beer, soft drinks, cigarettes, toiletries, tires, and newsprint. 1207 The Mandatory Statewide Source Separation and Recycling Act is designed to compel recycling at the State and local level, promote recycling planning, and market development. "Recycling7' is defined as any process by which materials that would otherwise become solid waste are collected, separated, or processed and returned to the economic mainstream in the 1208

form of raw materials or products. Regulations provide regulatory oversight of recycling 1209 activities and require prior approval of recycling centers. The recycling center regulations constitute the rules of the NJDEP governing the approval to operate as a recycling center, pursuant to the Solid Waste Management Act, and the Statewide Mandatory Source Separation 1210 and Recycling Act. 4.1.1 Recycling Grants and Taxes New Jersey has attempted to foster recycling programs by providing recycling grants to municipalities with funds generated by the disposal of solid waste. Several funds have been created for this purpose. As discussed above, the Clean Communities Program Fund is credited with all user fees imposed pursuant to the Clean Communities and Recycling Grant Act upon any manufacturer, wholesaler, distributor, or certain retailers of "litter-generating products" on

1204 1205 1206 1207 1208 1209 1210

N.J.S.A. 13:lE-213 to -222. N.J.S.A. 13:lE- 214. N.J.S.A. 13:lE-215.e. N.J.S.A. 13:lE-99.11, et sea. N.J.S.A. 13:lE-215.f. N.J.A.C. 7:26A, et sea. N.J.S.A. 13:lE-99.11, et sea

New Jersey Environmental Law Handbook 1211

sales in New Jersey. This fund is administered by the NJDEP, and appropriations fiom the fund are limited to those listed in the statute, including litter pickup and removal and state aid to 1212 municipalities for litter pickup and removal. Prior to any other distributions fiom the Clean Communities Program Fund, 25 percent of the fund's estimated annual balance is to be appropriated annually to the State Recycling Fund 1213 for direct recycling grants to counties and municipalities by the NJDEP. The direct recycling grants are intended for those counties and municipalities which provide for the collection, 1214 processing, and marketing of recyclable materials on a regional basis at their own expense. 1215 Non-profit agencies are eligible to receive State Recycling Fund money. The third fund is the Statewide Mandatory Source Separation and Recycling Program 1216 Fund, which is administered by the State Treasurer. It is funded with monies appropriated by the Legislature pursuant to the Statewide Mandatory Source Separation and Recycling Act for the purpose of providing State aid to counties and municipalities for implementing recycling programs. $200,000 of the fund is dedicated to the study of markets for recyclable materials and 1217 of local or international distribution networks for recyclable materials. 4.1.2 Source Separation and Recycling Plans In order to reduce certain materials in the solid waste stream, New Jersey instituted a mandatory statewide source-separation and recycling program and involved itself in the 1218 development of markets for recyclable materials. The State mandatory recycling plan requires each solid waste district (i.e., county) to designate a district recycling coordinator and to 1219 develop a strategy for recycling in each municipality. Pursuant to the mandatory State recycling plan, each county must prepare and adopt a district recycling plan to implement the State recycling plan goals. Each county is required to contract with persons providing recycling

N.J.S.A. 13:lE-217; N.J.S.A. 13:lE-216. N.J.S.A. 13:lE-217. N.J.S.A. 13:1E-217(f). The State Recycling Fund is established by N.J.S.A. 13:1E-96. N.J.S.A. 13:lE-96(b). Id. N.J.S.A. 13:lE-99.37. N.J.S.A. 13:lE-99.38. N.J.S.A. 13:lE-99.11. N.J.S.A. 13:1E-99.13(b).

Solid Waste Management services or operating recycling centers for the collection, storage, processing, and disposition of 1220 recyclable materials designated in the district recycling plan. Some items are given special treatment in the mandatory recycling scheme. For example, bi-metal cans and plastic containers are not identified as recyclable unless the NJDEP can determine that a convenient and economically feasible recycling system is available for such 1221

containers. Similarly, the NJDEP must develop an effective means of disposing or recycling 1222 scrap automobile tires. Also, the legislation requires municipalities to collect and transport 1223

leaves to a leaf composting facility. 4.1.3 Recycling Preferences The Statewide Mandatory Recycling Act requires State and local agencies to give preference where possible to the use of recycled materials. These preferences include: (a) the use of recycled and composited materials on all land maintenance activities paid for by public 1224 funds; (b) maximizing the use of recycled paper or recycled paper products by government 1225 bodies and agencies; (c) requiring the NJDEP of Transportation to maximize the purchase of 1226 recyclable asphalt pavement and paving materials utilizing recycled materials; and (d) requiring the NJDEP of Transportation to encourage the use, by manufacturers of asphalt or 1227 recycled asphalt pavement, of fuel derived fiom waste oil as a furnace or boiler fuel. 4.1.4 Motor Oils Any person selling or offering for sale at retail, or wholesale for direct retail sale, any motor oil in containers for use off the premises must have a message on the container stating that the oil is a recyclable material which must be disposed of after use at a used oil collection 1228 center. The motor oil retailer must post and maintain a conspicuous sign stating how and where used oil may be properly disposed of.

N.J.S.A. 13:lE-99.14(a). N.J.S.A. 13:lE-99.18(a),-99.19(a). N.J.S.A. 13:lE-99.20. N.J.S.A. 13:lE-99.21(a),-99.22. N.J.S.A. 13:lE-99.23. N.J.S.A. 13:lE-99.24. N.J.S.A. 13:lE-99.28. N.J.S.A. 13:lE-99.29. N.J.S.A. 13:lE-99.35(a).

New Jersey Environmental Law Handbook 4.1.5 Computers In 2002, the New Jersey Legislature enacted legislation governing the recycling of used 1229 computers. The legislation was in response to an increase in the rate of disposal of personal computers and also a recognition that computers contain toxic substances such as lead, cadmium, 1230 The NJDEP was directed to prepare educational materials relating mercury, and phosphorus. to the recycling of computer monitors and used consumer electronics for distribution by the 1231 NJDEP of Education to each school district in the state. The legislation also directs the NJDEP to coordinate a "demonstration project" to evaluate the feasibility of requiring mandatory source separation and recycling of used computer monitors and consumer electronic 1232 equipment. At a more practical level, a county district household hazardous waste management plan 1233 may provide for the collection of cathode ray tubes from computer monitors. In addition, the recycling regulations address the proper handling of "consumer electronics," defined as "any appliance in the home or business that includes circuitry," such as computers, copiers, VCRs, fax 1234 machines, televisions, and telecommunications devices. Consumer electronics are a Class D 1235 recyclable material. Consumer electronics are also considered a "universal waste" that is subject to the requirements of N.J.A.C. 7:26A-7 or, if applicable, the regulations governing 1236 hazardous waste at N.J.A.C. 73266. 4.2

REGISTRATION AND LICENSING OF RECYCLING FACILITIES

4.2.1 Exemptions from Solid Waste Management Regulations Any person engaged in the business of solid waste collection or disposal may engage in 1237 recycling or provide recycling services. The NJDEP has no jurisdiction over recycling rates charged by persons engaged in recycling, nor are the revenues generated by recycling businesses included in the computation of current or adjusted tariffs established for solid waste collection.

L. 2002, c. 106. N.J.S.A. 13:lE-208. N.J.S.A. 13:lE-209, -210. N.J.S.A. l3:lE-21 l(a). N.J.S.A. 13:lE-99.74. N.J.A.C. 7:26A-1.3.

IdId.; see also N.J.A.C. 7:26A-7.l(e), -7.2(a)(3)(ii).

N.J.S.A. 13:lE-99.33(a).

Solid Waste Management Recycling centers are not required to obtain a registration statement, engineering design approval, or approval of an Environmental and Health Impact Statement prior to beginning 1238 operations. However, "no recycling center can receive, store, process, or transfer any waste material other than source-separated nonputrescible or source-separated commingled nonputrescible metal, glass, paper, or plastic containers, and corrugated and other cardboard without the prior 1239

approval of the NJDEP." Recycling is specifically exempted from the general provisions of the administrative regulations on solid waste management. The regulations do not apply to the purchase, sale, collection, storage, transport, or controlled processing of source-separated or commingled source-separated recyclable, recycled, or secondary nonhazardous materials for reintroduction into the economic mainstream as raw materials for further processing or as products for use so long as the materials are free from putrescible matter and not mixed with solid or liquid 1240 waste. Regulations governing sanitary landfills and other solid and hazardous waste facilities do not apply to recycling centers. The regulations also exempt recycling facility centers where individuals or organizations deposit separated materials such as newsprint, bottles, and cans prior 1241 to transport to the secondary materials industry. In response to a major fire at a pseudo-recycling center, in 1989, emergency powers were given to NJDEP regarding the activities at solid waste facilities, as well as recycling centers. Upon a determination that any activity occurring at a solid waste facility, recycling center, or any other site in which solid waste is placed, processed, stored, or disposed of presents an "imminent threat to the environment or public health and safety," the NJDEP may issue an emergency order to the center or operator, which specifies the activities presenting the "imminent threat," the specific measures to abate or eliminate it and the actions the NJDEP shall take which may 1242 include suspension of a registration statement.

1238 1239 1240 1241 1242

N.J.S.A. 13:lE-99.34(a). Id. See& -

Matter of Recvcling & Salvage Corn., 246 N.J. Super. 79,586 A.2d 1300 (App. Div. 1991).

N.J.A.C. 7:26-1.l(a)(l). N.J.A.C. 7:26-1.1(a)(4). N.J.S.A. 13:lE-9.5(a).

New Jersey Environmental Law Handbook RECYCLING CENTER REGULATIONS The recycling center regulations recognize four distinct types of recyclable materials, 1243 Class A, Class B, Class C, and Class D. Class A recyclable material, formerly known as "traditional recyclable material," is that which the Legislature specifically determined are

4.3

1244

excluded from NJDEP approval prior to receipt at a recycling center. Class B recyclable 1245 material was formerly defined as "non-traditional recyclable material." Class C recyclable 1246 materials are food waste and yard trimmings. Class D recyclable materials are used oil, 1247 batteries, latex paint, and anti-fkeeze. In addition to identifying the procedures, qualifying factors, and information submittal requirements necessary to obtain the NJDEP's prior written approval to operate, the regulations establish operational standards for all recycling centers. The standards pertain to the receipt, storage, processing, or transfer of source-separated recyclable materials and any resulting residue. In addition, the regulations call for recycling centers to be in conformance with all applicable federal, State, and local laws and regulations. If it is detemiined that the performance standards are not being followed, the facility may be declared a solid waste facility and be

N.J.A.C. 7:26A-1.3. 1244

1245

Class A recyclable material is defined as "a source-separated non-putrescible recyclable material specifically excluded fiom NJDEP approval prior to receipt, storage, processing, or transfer at a recycling center in accordance with N.J.S.A. 13:lE-99.34(b), which material currently includes source-separated non-putrescible metal, glass, paper, plastic containers, and corrugated and other cardboard." N.J.A.C. 7:26A-1.3 N.J.A.C. 7:26A-1.3 Class B recyclable materials are defined as "a source-separated recyclable material which is subject to NJDEP approval prior to receipt, storage, processing, or transfer at a recycling center in accordance with N.J.S.A. 13:lE-99.34(b), which includes but is not limited to the following: 1. Source-separated, non-putrescible waste concrete, asphalt, brick, block, asphalt-based roofing scrap, and wood waste; 2. Source-separated, non-putrescible, waste materials other than metal, glass, paper, plastic containers, corrugated and other cardboard resulting from construction, remodeling, repair and demolition operations on houses, commercial buildings, pavements, and other structures; 3. Source-separated whole trees, tree trunks, tree parts, tree stumps, brush and leaves, provided that they are not composted;

1246 1247

4.

Source-separated scrap tires;

5.

Source-separated petroleum-contaminated soil.

N.J.A.C. 7:26A-1.3.

Id. -

Solid Waste Management required to submit a registration statement, engineering design, and Environmental and Health 1248 Impact Statement. The Recycling Center regulations generally require type B, C, or D recycling centers to 1249 obtain written approval by the DEP prior to operating. The regulations also list certain 1250

specific exemptions from the approval requirement. The regulations set forth detailed 1251 operational requirements for Class B recycling centers. The recycling rules also contain 1252 1253 specific provisions for management of used oil and universal wastes.

4.3.1 Notice Requirements The regulations first require the applicant for a Class B, C, or D recycling center approval to publish a notice, in a newspaper of general circulation within the host municipality, indicating that the applicant will apply to the county for inclusion of a recycling center in the Solid Waste Management Plan. This notice must be published before submitting an application to the NJDEP. The regulation specifies that the notice shall include the name of the proposed center, its address, and information concerning the location of the County Plan and how comments may 1254 be submitted on the application. After an application is filed, the applicant must publish 1255 notice again, this time, not later than 15 days before the public hearing on the project. 4.3.2 Application Requirements After publishing initial notice, the owner or operator of a Class B, C, or D recycling 1256 center must submit an application to the NJDEP containing: The name, address, and telephone number of the operator; (1) A description of the location of the proposed recycling center, in lot and (2) block numbers, and a zoning map delineating the proposed site; A listing of all persons owning 5 percent or more of the corporate stock in (3) the recycling center or the names of the general and limited partners if applicable;

N.J.A.C. 7:26-2. N.J.A.C. 7:26A-3.1. N.J.A.C. 7:26A-1.4. N.J.A.C. 7:26A-4.8. N.J.A.C. 7:26A - Subchapter 6. N.J.A.C. 7:26A - Subchapter 7. N.J.A.C. 7:26A-3.l(d). N.J.A.C. 7:26A-3.1(e). N.J.A.C. 7:26A-3.2.

New Jersey Environmental Law Handbook A listing of the material to be recycled; (4) The maximum amount of each material to be received, stored, processed, (5) or transferred at the recycling center per day; A listing of all products and residue resulting from the proposed recycling (6) activities, and the amount of such product or residue; The name, address, and telephone number of planned end-markets for the (7) materials received, stored, processed, or transferred by the center; A description of all equipment to be used at the center; (8) A copy of the site plan map prepared by a licensed New Jersey (9) professional engineer; (10) An original USGS Quadrangle map including the boundary of the lot; (11) A copy of the deed of record establishing ownership of the recycling center property; (12) A description of the design capacity of the recycling center, including the number and types of vehicles used to haul the material to and from the recycling center; (13) A copy of a New Jersey air pollution control permit application where applicable; (14) A written narration of the recycling center operation; (15) Documentation establishing that the recycling center is included in the solid waste management plan of the applicable solid waste management district; (16) A detailed operations plan; (17) Descriptions of methods used to control traffic, stormwater run-off and drainage, soil erosion, noise; and (18) A description of the effect the recycling center-related traffic will have on existing transportation patterns. The application also must include a certification, signed by the principal executive officer, or for a partnership or sole proprietorship, by a general partner or the proprietor, that the 1257 signatory is familiar with and understands the application. 4.3.3 Application Process Assuming a complete application for Class B, C, or D recycling center is submitted, the time frame for obtaining approval to operate a recycling center in New Jersey spans approximately 4 months. The NJDEP will determine whether the application is complete and issue a letter to the applicant indicating such, within 30 days of receipt of the application.

1257

N.J.A.C. 7:26A-3.2(16)(b).

Solid Waste Management Thereafter, if the application is deemed "administratively complete," the NJDEP will, within 90 days, issue to the applicant either its general approval or denial to operate the recycling center. 1258 The NJDEP may permit an applicant to operate for a period not to exceed 5 years. In determining whether to approve or deny an application, the NJDEP considers, among other things, the following criteria: whether a complete application was submitted; whether the recycling center is operating consistent with the applicable district solid waste management plan; and whether the applicant demonstrates that only source separated recyclable materials will be 1259 received, stored, processed, or transferred at the recycling center. 1260 A general approval by the NJDEP will authorize the recycling center to operate, indicate any conditions of operation, and provide limitations on operation, including the amount of contaminants which may be present in any truckload of source-separated recyclable materials received at the recycling center and the commingling of Class B, C, or D materials at the 1261 center. 4.3.4 Application/Operation Fees The application fee to obtain a general approval to operate a Class B recycling center is $5,281. In addition, the NJDEP will apply an annual fee of $4,724 on May 1 of each succeeding fiscal year beginning on July 1 and ending on June 30. For a newly approved recycling center, the first annual fee is due on the first May 1 immediately following issuance of the general 1262 approval. There are different fees set out in these regulations for Class C or D recycling 1263 facilities.

5.0 5.1

ENFORCEMENT AND LIABILITY ENFORCEMENT 1264 Despite pre-emption of local control in the regulation of solid waste, there is concurrent enforcement of all solid waste laws, rules, and regulations by the "Department and by

N.J.A.C. 7:26A-3.5(a), (b), (c). N.J.A.C.7:26A-3.12. The regulations also authorize the NJDEP to provide a limited approval to an applicant to operate a Class B recycling center. N.J.A.C. 7:26A-3.7. This authorization allows a Class B recycling center to operate for only 6 months. N.J.A.C. 7:26A-3.5(e). N.J.A.C. 7:26A-2.1. Id. See Chester Township, Little Falls Township, Ocean Countv Utilities Authoritv, Township Committee of

South Harrison, Rollins Environmental Services, Inc., and Clean Capital Co. Cornm., suvra. But see Clyde

New Jersey Environmental Law Handbook 1265

every local board of health, or county health NJDEP." The NJDEP and the county or local health agency can enter a solid waste facility "at any time" to ensure compliance with the 1266 registration statement. The costs of this inspection can be charged to the a facility. A wide range of enforcement mechanisms exist. The NJDEP may order the abatement of a solid waste violation. If a person violates any solid waste law, regulation, permit, or plan, the NJDEP can issue an abatement order identifying the provision violated, the acts constituting the 1267 Such an order becomes final if the ordered violation, and the person's right to a hearing. party does not request a hearing within 20 days of receipt of the order. The NJDEP, the local board of health, or county health NJDEP can institute an action or 1268 proceeding in New Jersey Superior Court or a municipal court for injunctive or other relief for any solid waste violation. The New Jersey courts will grant injunctive relief even upon a 1269 The court may use summary showing that no environmental harm was established. 1270 proceedings and may grant temporary or interlocutory relief. Relief can include, singly or in combination, temporary or permanent injunction and the assessment of costs for investigation, monitoring, litigation, remediation, and damages to natural resources. Where the NJDEP has not acted on known solid waste violations, a local board of health or county health NJDEP may itself pursue those violations or bring suit for mandamus to compel the NJDEP to act with respect to 1271 those violations. The criminal provisions of the Solid Waste Management Act are generally directed at Chapter V.) However, knowing or reckless violations with respect to hazardous waste. (B "knowing" transportation or disposal at an unauthorized solid waste landfill of a hazardous waste is a crime of the third degree punishable by a fine of up to $50,000 for the first offense and not

v. Mansfield Township, 263 N.J. Super. 140, 622 A.2d 270 (App. Div. 1993) (SWMA does not preempt municipalities from limiting the local routes used by licensed solid waste haulers). N.J.S.A. 13:lE-9(a).

Id. N.J.S.A. 13:lE-9(c). Middlesex Countv Health Devt. v. Browning-Ferris Indus. of Eliz., N.J., Inc., 252 N.J. Super. 134, 599 A.2d 554 (App. Div. 1991). State, Dev't of Environmental Protection v. Interstate Recvcling. Inc., 267 N.J. Super. 574, 632 A.2d 526 (App. Div. 1993). N.J.S.A. 13:lE-9(d). Bordentown T m . Board of Health v. Interstate Waste Removal Co., 191 N.J. Super. 128, 465 A.2d 587 (Law Div. 1983).

Solid Waste Management 1272

more than $100,000 for the second and each subsequent offense and restitution. "Reckless" 1273 commission of those same acts is a fourth-degree crime (& Chapter I). 5.2 PENALTIES The NJDEP was authorized to assess civil administrative penalties of up to $50,000 for each violation with each day during which violation continues constituting an additional, 1274 separate, and distinct offense. The NJDEP adopted regulations for assessing penalties, taking into account a violator's operational history, the severity of the violation, and the likelihood of 1275 future violations. The NJDEP proposed and adopted the Civil Administrative Penalties and Adjudicatory Hearing Regulations effective January 16, 1990, to govern the imposition of penalties for 1276 violations of the Solid Waste Management Act. Pursuant to these regulations, the NJDEP may assess penalties by imposing base penalty components for each violation of each 1277 requirement of any NJDEP's rules listed in N.J.A.C. 7:26-5.4(g). The NJDEP can adjust 1278 these penalties by the use of "severity factors." The regulations state that each violation of the rules is an additional separate and distinct violation; each day the violation continues is a separate violation; and that each parameter 1279 required to be sampled or reported is a basis for a separate violation. The regulations also give the NJDEP the discretion to issue penalties of not more than $50,000 per violation for 1280 violations not enumerated in N.J.A.C. 7:26-5.4. The NJDEP may also assess greater 1281 penalties than allowed in N.J.A.C. 7:26-5.4 where warranted by the circumstances. Penalties cannot be levied until a violator receives a notice of violation identif4lng the statute or permit violated, the events constituting the violation, and is provided with an

N.J.S.A. 13:lE-9(g);N.J.S.A.2C:43-1, et sea. N.J.S.A. 13:lE-9(h); N.J.S.A.2C:43-1, et sea. N.J.S.A. 13:lE-9(e);N.J.A.C.7:26-5.1.

Id. N.J.A.C.7:26-5.1, et seq. N.J.A.C.7:26-5.4(b), (c). N.J.A.C.7:26-5.4(f). N.J.A.C.7:26-5.5(b), (c). N.J.A.C.7:26-5.5(f). N.J.A.C.7:26-5.2(a).

New Jersey Environmental Law Handbook 1282

opportunity for a hearing. Penalties become final after 20 days if a hearing is not 1283 requested. In September 2005, the NJDEP proposed to amend the Solid Waste rules and the Solid Waste Utility regulations to identify violations of the rules as either minor or non-minor for the purpose of providing grace periods in accordance with the Grace Period Law, N.J.S.A. 13:lD1284 125 et sea. Under the Grace Period Law, any person responsible for a minor violation is 1285

afforded a period of time to correct the violation and avoid a penalty. The proposed changes to the rules would implement the Grace Period Law by, inter alia, adding two columns to the 1286 tables at N.J.A.C. 7:6-5.4(g) called "Type of Violation" - i.e., minor or non-minor - and "Grace Period." A violation of a provision designated as minor would be subject to the grace 1287 period designated in the "Grace Period" column. The rule proposal also includes provisions that require a person responsible for a minor violation to submit information detailing the corrective action taken or compliance achieved in order for the NJDEP to verify compliance 1288 within the grace period. As of this writing, adoption of the modifications was anticipated by the fall of 2006. In addition to these penalties, the NJDEP may assess a civil penalty up to $50,000 against 1289 each violator who submits inaccurate or false information to the NJDEP. The NJDEP may also assess a penalty up to $30,000 against any violator who fails to allow lawful entry and inspection by the NJDEP representative of any premises subject to inspection pursuant to the

N.J.A.C. 7:26-5.2(a). N.J.A.C. 7:26-5.2(b). 37 N.J.R. 3130,3130 (Sept. 5,2005).

Generally, minor violations involve administrative acts, such as maintenance of records and other violations that do not pose a threat to human health and the environment. On the other hand, violations that may result in discharges, releases, or odors are considered non-minor by the Department. Id, Id. Similar changes have been proposed for violations of the Solid Waste Utility Regulations at N.J.A.C. 7:26H-6.l8(QYand violations of the requirements imposed on rail carriers transferring solid waste, N.J.A.C. 7:26-2D. 37 N.J.R. at 3132, describing proposed new N.J.A.C. 7:26-5.10(d)(3) and 7:26H-5.23(d)(3). N.J.A.C. 7:26-5.6.

Solid Waste Management 1290

Solid Waste Management Act. Finally, the NJDEP may assess penalties for failure to pay a 1291 fee or for any economic benefit realized by the violator as a result of his or her violation. These monetary penalties exist in addition to the NJDEP's other enforcement powers. The NJDEP or local health agencies can also bring a civil action against violators for up to $50,000 per violation. Violations of an administrative or court order can result in court-imposed penalties of up to $100,000 per day. Finally, conveyances used in "the willful discharge" in 1292 violation of the Solid Waste Management Act are subject to forfeiture. The Solid Waste Management Act contains a gui tam provision authorizing an individual supplying information on solid waste violations to collect a reward of 10 percent of the civil penalty collected or $250, 1293 whichever is greater.

6.0 6.1

MEDICAL WASTE INTRODUCTION 1294 The Comprehensive Regulated Medical Waste Management Act (the "Actyy)became effective on March 6, 1989. The Act was adopted in response to the presence of medical waste on New Jersey's beaches during the 1987-1988 summer seasons, which forced several beach closings and severely damaged New Jersey's tourist industry. The Legislature intended that the Act establish a ". . . comprehensive management system that provides for the proper and safe tracking, identification, packaging, storage, control, monitoring, building, collection, and 1295 disposal of regulated medical waste." The Act accomplishes this goal by utilizing a manifest 1296 tracking system and by providing "substantial civil and criminal penalties" for violators. Regulations and rules detailing and governing a program for regulated medical waste 1297 were adopted and made effective on August 25, 1989. These rules apply to specific 1298 enumerated categories of regulated medical waste that are generated, stored, transported,

N.J.A.C. 7:26-5.7. N.J.A.C. 7:26-5.8, -5.9. N.J.S.A. 13:lE-90. N.J.S.A. 13:lE-9.2. N.J.S.A. 13:1E-48.1, et s e a N.J.S.A. 13:lE-48.2.

IdN.J.A.C. 7326-3A.1, et s e q N.J.S.A. 13:1E-48.3; N.J.A.C. 7:26-3A.5.

New Jersey Environmental Law Handbook 1299

Household transferred, treated, destroyed, disposed of, or otherwise managed in New Jersey. 1300 is exempt from regulation along with waste generated in households utilizing home self care 1301 other specific categories of medical waste. 6.1.1 Regulated Medical Waste Management System All generators, transporters, intermediate handlers, and owners and operators of 1302 1303 All transporters destruction facilities must register with the NJDEP and pay an annual fee. (except generators who transport their own regulated medical waste and meet certain 1304 1305 requirements) and intermediate handlers' and destructive facilities' supervisory personnel 1306 must attend the NJDEP's special education and training sessions. The NJDEP has established rules and regulations governing the segregation of regulated 1307 1308 1309 packaging, storage prior to transport or disposal, medical waste for off-site transport, 1310 1311 decontamination of reusable containers, and labeling and marking of packages. The NJDEP's regulations contain general requirements governing generators of regulated 1312 medical waste and also provide exemptions from these requirements for certain generators of 1313 The regulations allow transfer less then 3 cubic feet of regulated medical waste per month.

N.J.A.C. 7:26-3A. l(b). N.J.A.C. 7:26-3A.5. N.J.A.C. 7:26-3A.6. N.J.A.C. 7:26-3A.5. N.J.S.A. 13:lE-48.7, -48.8; N.J.A.C. 7:26-3A.8. N.J.A.C. 7326-3A. 17(a). N.J.A.C. 7126-3A.5. N.J.S.A. 13:lE-48.11; N.J.A.C. 7:26-3A.9. N.J.A.C. 7326-3A lo. N.J.A.C. 7:26-3A. 11. N.J.A.C. 7:26-3A. 12. N.J.A.C. 7:26-3A. 13. N.J.A.C. 7:26-3A.14, -3A.15. N.J.A.C. 7:26-3A. 16. N.J.A.C. 7:26-3A.17.

Solid Waste Management stations and sanitary landfills otherwise permitted and approved by the NJDEP to apply for 1314 permits to accept regulated medical waste. 6.1.2 Manifest Tracking of Regulated Medical Waste Generators must use only New Jersey medical waste tracking forms for off-site transport 1315

of waste. The forms must be prepared pursuant to NJDEP requirements and copies must be 1316 provided to enumerated parties that will transport and receive the waste. Each generator must 1317

maintain each tracking form for at least 3 years. Generators that treat or destroy waste on-site 1318 must also maintain certain enumerated records for a minimum '3-year period. Generators must submit annual generator reports to the NJDEP for the period June 22 through June 21 of 1319 each year on prescribed forms available from the NJDEP. Generators must file exception reports if the generator has not received a completed copy of the tracking form signed by the ownerloperator of the destruction facility within 35 days of the 1320 date the waste was accepted by the initial transporter. Generators who incinerate on-site must 1321 comply with separate reporting and recordkeeping requirements. 6.1.3 Regulation of Transporters Transporters of regulated medical waste must meet the requirements of N.J.A.C. 7:263A.27 to -3A.37. These regulations require that transporters register with the NJDEP as solid waste transporters, pay all required fees, obtain a Certificate of Public Convenience, and notify the U.S. E P A . ' ~ ~ ~ 1323 Transporters may only accept properly labeled and marked waste and may only use 1324 vehicles that meet prescribed requirements. Transporters may only accept waste that is

N.J.A.C.7326-3A.18. N.J.A.C.7:26-3A.19.

Id. N.J.A.C.7:26-3A.21(a)(l). N.J.A.C.26-3A.21(b), (c). N.J.A.C.7:26-3A.21(d). N.J.A.C.7:26-3A.22. N.J.A.C.7:26-3A.24,-3A.26. N.J.A.C. 7:26-3A.27(~). N.J.A.C.7:26-3A.28(a). N.J.A.C.7:26-3A.30.

New Jersey Environmental Law Handbook 1325

accompanied by a medical waste tracking form. The transporter must comply with the waste 1326 amount on the tracking forms unless the transporter meets the conditions for consolidation of 1327 wastes to a new tracking form. Finally, transporters must meet all recordkeeping and 1328 reporting requirements outlined by the NJDEP. Intermediate handlers, destructive facilities, 1329 and rail transporters must comply with separate regulations. 6.1.4 Enforcement and Penalties The Act, and its accompanying rules and regulations may be enforced by the NJDEP, the 1330

NJDEP of Health, and every local board of health or county health NJDEP. The Act provides these agencies with the right to enter the premises of any generator, transporter, or facility to 1331 determine compliance. These agencies may institute actions in Superior Court for injunctive 1332 and other relief. These agencies may issue orders, bring civil actions, levy civil administrative penalties, institute actions for civil penalties, or petition the Attorney General to bring a criminal 1333 action. The NJDEP may issue an order to any violator, and the violator has 20 days from receipt 1334 of the order to request a hearing in writing. Civil penalties may not exceed $50,000 per 1335 violation, and each day a violation continues is an additional, separate, and distinct offense. These penalties are limited to $25,000 per violation and $2,500 per day for each day the violation 1336 continues until the NJDEP has adopted regulations governing the assessment of penalties. Persons who purposely or knowingly violate the law, rules, or regulations, or who provide false or misleading statements to the NJDEP shall be guilty of a crime of the third degree .

N.J.A.C. 7:26-3A.31. N.J.A.C. 7:26-3A.32. N.J.A.C. 7:26-3A.33. N.J.A.C. 7:26-3A.34, -3A.35. N.J.A.C. 7326-3A.38 to 3A.47. N.J.S.A. 13:1E-48.20(a). Id. N.J.S.A. 13:lE-48.20(d). N.J.S.A. 13:lE-48.20(b). N.J.S.A. 13:lE-48.20(~). N.J.S.A. 13:1E-48.20(e). Id. -

Solid Waste Management and liable for a fine of up to $50,000 for the first offense and up to $100,000 for each subsequent 1337 offense. Violators who engage in certain purposeful, knowing, reckless, or negligent conduct, 1338 Violators are strictly, (and in some cases, regardless of intent) may be prosecuted criminally. jointly, and severally liable for all cleanup and removal costs resulting from the discharge of 1339 The Act also provides rewards of the greater of 10 percent of the regulated medical waste. penalty collected or $250 to persons who supply information leading to successful enforcement 1340

actions. The NJDEP may grant temporary registration during the first registration year of each 1341 applicant or in the first year following any violation resulting in revocation of registration. Revocation of a registration issued to any transporter or facility is available to the NJDEP 1342 following a hearing.

REGULATORY ENACTMENTS REGARDING SPECIFIC ITEMS OF THE SOLID WASTE STREAM 7.1 TOXIC PACKAGING REDUCTION 1343 The Toxic Packaging Reduction Act, which became effective on January 20, 1992, is designed to reduce the sale and distribution of toxic packaging. On or after January 1, 1993, it is prohibited to sell, offer for sale, or offer for promotional purposes any package or components such as inks, dyes, pigments, adhesives, stabilizers, or any other additives which contain prohibited levels of lead, cadmium, mercury, or hexavalent chromium. The Act allows for the 1344 "incidental presence" of any of these elements set at threshold levels as follows: Not more than 600 ppm by weight (0.06 percent) after January 1, 1993; (1) Not more than 250 ppm by weight (0.025 percent) by January 1,1994; and (2) Not more than 100 ppm by weight (0.01 percent) after January 1,1995. (3) The Act covers a wide range of materials, defining "packaging" to include carrying cases, crates, cups, pails, rigid foil and other trays, wrappers and wrapping films, bags, and tubs. An 7.0

N.J.S.A. 13:lE-48.20(g). N.J.S.A. 13:lE-48.20(h),(i), N.J.S.A. 13:lE-48.21. N.J.S.A. 13:lE-48.24. N.J.S.A. 13:lE-48.22. N.J.S.A. 13:lE-48.23. N.J.S.A. 13:lE-99.44 et sea. N.J.S.A. 13:1E-99.47.

6).

New Jersey Environmental Law Handbook exemption procedure allows limited exemption from the prohibition to alcoholic beverage packaging, pharmaceutical preparations, glass containers with ceramic labeling, certain 1345 cosmetics, and tin cans. The Act principally requires that by January 1, 1993, a written certificate be furnished by packaging manufactures to product manufacturers or distributors that packing or packing 1346 components are in compliance with the Act's requirements. The Act allows for NJDEP 1347

inspectors to enter the premises of packing manufacturers to determine compliance. Upon a finding of non-compliance, the NJDEP may issue an order requiring the distributor or retailer to remove or arrange for the removal of the entire allotment of the product packaged in the non-complying package or packaging component, and direct the distributor or retailer to return the entire allotment of the product packaged to the product manufacturer for 1348 credit or reimbursement. In addition to returning non-complying products, violations may result in the issuance of an order requiring compliance, civil action, civil administrative penalty, civil penalties, or 1349 Civil penalties may be assessed at amounts of no more than $7,500 for the criminal action. first offense, $10,000 for the second offense, and $25,000 for a third and each subsequent offense. Each day a violation continues constitutes an additional, separate, and distinct 1350 Violations may also be assessed for the costs of inspecting samples or testing offense. 1351 packages and the costs of preparing and litigating the case. 7.2 DRY CELL BATTERY MANAGEMENT ACT In response to the concern over the presence of toxic metals in discarded dry cell batteries 1352 the State passed the Dry Cell Battery Management Act. This Act requires the manufacturers of mercuric oxide batteries and nickel-cadmium or sealed lead rechargeable batteries assume the costs of removing them from the solid waste stream; redesign their products so as to facilitate

N.J.S.A. 13:lE-99.48(a). N.J.S.A. 13:lE-99.51. N.J.S.A. 13:1E-99.52(a). N.J.S.A. 13:lE-99.53(a). N.J.S.A. 13:lE-99.54. N.J.S.A. 13:lE-99.54(d)(l). N.J.S.A. 13:1E-99.54(~)(2). N.J.S.A. 13:1E-99.59 et seq.

Solid Waste Management metals reclamation; and assume the costs and responsibility for collection, transportation, and 1353 recycling or proper disposal. The Act prohibits the sale of alkaline manganese batteries and mercuric oxide batteries with mercury concentrations exceeding 250 parts per million for all batteries manufactured after January 1, 1992, and prohibits sales of rechargeable consumer products after July 1, 1992, unless 1354 meeting specified standards. The Act contains provisions concerning the preparation of 1355

disposal plans, collection plans, methods of disposal, and penalties. 7.3 MERCURY SWITCH REMOVAL ACT Beginning in late 2005, vehicle recyclers and scrap recycling facilities must remove mercury switches fi-om end-of-life vehicles before recycling the steel and other components of 1356 automobiles. Mercury switches are typically found in anti-lock backing systems and hood and door convenience lights. Facilities that accept the end-of-life vehicles must remove the switches, maintain records on the source and disposition of the switches, and handle the switches 1357 in accordance with the NJDEP's universal waste regulations. In order to make the recycle requirements more efficient, vehicle manufacturers are required to develop plans that identify the number and location of switches and provide safe and environmentally sound methods to remove 1358 the switches. - In addition, manufacturers must provide containers to store removed switches, pay for transport and disposal of the switches, and pay $2.00 to the recycler and $.25 to the 1359 NJDEP for each switch removed.

1353 1354 1355 1356 1357 1358 1359

N.J.S.A. 13:lE-99.60. N.J.S.A. 13:lE-99.62. N.J.S.A. 13:lE-99.65, -99.66, -99.67 N.J.S.A. 13:lE-99.82 et seq. N.J.S.A. 13:lE-99.87 N.J.S.A. 13:lE-99.85 Id. -

CHAPTER V HAZARDOUS WASTE MANAGEMENT 1.0

NEW JERSEY HAZARDOUS WASTE MANAGEMENT PROGRAM The New Jersey Solid Waste Management Act establishes the statutory framework for the management and coordination of New Jersey's hazardous waste management program, which authorizes the New Jersey Department of Environmental Protection (NJDEP) to promulgate and administer regulations governing the identification and management of 1360 hazardous wastes. The Resource Conservation and Recovery Act (RCRA) permits USEPA to delegate RCRA enforcement authority to states whose hazardous waste management programs 1361 are at least as stringent as RCRA, and New Jersey has received certain delegated authority from USEPA. 1.1 RELATIONSHIP TO RCRA New Jersey initially received final authorization under Section 3006 of RCRA to operate a hazardous waste program in lieu of the federal hazardous waste program, effective on February 1362 That authorization did not apply to the provisions of the federal Hazardous and 21, 1985. Solid Waste Amendments of 1984 (HSWA), which USEPA enforced directly. New Jersey's regulations in the past went beyond RCRA to regulate more wastes and provide for fewer exceptions and exclusions from regulation. New Jersey's lists of hazardous wastes were more extensive than USEPA's and included certain wastes which the USEPA does 1363 which not identify. Most notably, certain waste oils and polychlorinated biphenyls (PCBs), are not covered under RCRA regulations, were listed as hazardous wastes in New Jersey. In addition, any hazardous waste to be recycled was fully regulated under all of the New Jersey hazardous waste standards unless it qualifies for a special exemption. On November 2,1994, Governor Whitman issued Executive Order #27 requiring that any agency that adopts, readopts, or amends a rule or regulation under the authority of or to implement, comply with, or participate in a federal program (or under a state program that incorporates or refers to a federal program) include a statement whether the rule or regulation

1360 1361 1362 1363

N.J.S.A. 13:lE-1, et sect. 42 U.S.C. $6926. 50 Fed. Reg. 5260 (February 7, 1985). PCBs in concentrations greater than or equal to 50 ppm are regulated under HSWA for purposes of the land disposal restriction. 42 U.S.C. 6924(d)(2)(D); 40 C.F.R. 268.32(a)(2).

Hazardous Waste Management 1364

exceeds federal law requirements. Where the agency's rule or regulation exceeds the federal law requirements, the agency must include a cost-benefit analysis supporting the agency's decision to impose the stricter standards and that the imposed standards are achievable under 1365 Effective October 2 1, 1996, New Jersey incorporated by reference the current technology. federal RCRA regulations with but a few modifications. For example, New Jersey requires generators to send completed hazardous waste manifests to the NJDEP and the consigning 1366

state. New Jersey also describes in its regulations more precisely than in the RCRA regulations how a generator should select a waste code from among several potential waste 1367 codes, and what should be done when a waste shipment is rejected or unable to be delivered. The transporter regulations contain specific provisions on hazardous waste transporter 1368 registration and on hazardous waste transfer facility operations. New Jersey's regulations exempt from the hazardous waste regulations universal wastes, such as batteries, pesticides, and 1369 thermostats and subjects them to special regulations found at N.J.A.C. 7:26A, Subchapter 7. New Jersey's permitting program for hazardous waste facilities can require a detailed 1370 Environmental and Health Impact Statement. The requirements and procedures for a disclosure statement and integrity review of hazardous waste facilities are identical to those for solid waste facilities. See discussion in Chapter 11, Section 2.2. With the 1996 incorporation of most federal RCRA regulations, New Jersey's hazardous waste program became eligible for broader delegation from USEPA of authority to enforce RCRA. The USEPA delegated to NJDEP authority to enforce RCRA, including the HSWA Amendments, with two exceptions based on technicalities. The first exception to the delegated authority is the RCRA corrective action provisions, which are incorporated into New Jersey 1371 regulations, but for which NJDEP did not seek delegated authority. The second exception is the RCRA loss of interim status provisions, because New Jersey regulations provide a right to a

Exec. Order No. 27, 26 N.J. Reg. httv://w.state.ni.us/infobanWcircular/eow27. htm .

4723(a)

(Dec.

5,

Id. N.J.A.C.7:26G-6.1(~)(8). N.J.A.C.73266-6.2 and 6.3. N.J.A.C.7:26G-7.2and 7.4. See, e.g., N.J.A.C. 7:26G-4.2;N.J.A.C.7:26G-1l.l(d); N.J.A.C.7:26G-8.1(e).

N.J.A.C.7:26G-12.2. 67 Fed. Reg. 76995,76997 (December 16,2002).

1994),

available

at

New Jersey Environmental Law Handbook

hearing before interim status is lost, while RCRA loss of interim status provisions occur 1372 immediately upon a triggering event. 1.2 NJDEP INSPECTIONS The New Jersey Solid Waste Management Act provides for weekly inspection of major 1373 hazardous waste facilities by the NJDEP. A major hazardous waste facility is defined in the 1374 Act as: -.

Any commercial hazardous waste facility which has a total capacity to treat, store or dispose of more than 250,000 gallons of hazardous waste, or the equivalent thereof, as determined by the Department, except that any facility which would otherwise be considered a major hazardous waste facility pursuant to this section solely as a result of the recycling or rerefining of any hazardous wastes which are or contain gold, silver, osmium, platinum, palladium, iridium, rhodium, ruthenium or copper shall not be considered a major hazardous waste facility for the purposes of this Act. The NJDEP may make an assessment against any hazardous waste facility to cover the 1375 costs of the inspections. In addition, the local board of health or county health department 1376 may conduct a weekly inspection of major hazardous waste facilities. The NJDEP, local board of health, or county health department has the right to enter any major hazardous waste facility or solid waste facility at any time in order to determine compliance with the registration 1377 statement, engineering design, and all applicable laws or regulations. 1.3 PENALTIES Whenever the NJDEP finds that a person has violated any provision of the Solid Waste Management Act, or any regulation or permit issued pursuant to the Act, including those that relate to hazardous waste management, the NJDEP is authorized to take any of the following 1378 actions: Issue an order requiring an abatement of the violation; (1)

1372 1373 1374 1375 1376 1377 1378

67 Fed. Reg. 76995,76997 (December 16,2002). N.J.S.A. 13:lE-42.1.

Id. N.J.S.A. 13:lE-42.2. N.J.S.A. 13:lE-64. N.J.S.A. 13:lE-9(a); N.J.S.A. 13:lE-65. N.J.S.A. 13:lE-9(b), (f).

Hazardous Waste Management

(2)

Institute an action or proceeding in Superior Court for injunctive and other

relief; Assess a civil administrative penalty of not more than $25,000 per (3) violation and $2,500 per day; Bring an action in superior or municipal court for a court-ordered civil (4) penalty of not more than $50,000 per day; and Petition the Attorney General to bring a criminal action. (5) The Department has promulgated regulations that set forth the procedures the Department will follow for calculating certain penalties. Many of the hazardous waste rules and the base 1379 penalties for their violations are set forth in the regulations. Where the violation and penalty is not listed or the Department determines that the listed penalty would be insufficient as a deterrent, the Department may assess a penalty based on the seriousness of the violation and the 1380 conduct of the violator. There are also provisions for penalizing the submission of inaccurate 1381 or false information and failure to allow lawful entry or failure to pay a required fee. Finally, the Department reserves the right in the regulations to include as part of a penalty assessment any 1382 economic benefit derived from the violations. Persons who violate an administrative or court order or fail to pay an administrative 1383 A person who knowingly assessment are subject to a civil penalty of up to $100,000 per day. commits the following acts may be guilty of a third-degree crime and subject to a fine of up to 1384 $50,000 for-the first offense and up to $100,000 for subsequent offenses: Transports any hazardous waste to a facility or any other place which does (1) not have authorization from the Department to accept such waste; Generates and causes or permits to be transported any hazardous waste to (2) a facility or any other place which does not have authorization from the Department to accept such waste; (3) Disposes, treats, stores, or transports hazardous wastes without authorization from the Department;

1379 1380 1381 1382 1383 1384

N.J.A.C.7:26G-2.4(g). N.J.A.C.73266-2.5. N.J.A.C.73260-2.6,2.7 & 2.8. N.J.A.C.7:26G-2.9. N.J.S.A. 13:lE-9(f). N.J.S.A. 13:lE-9(g).

New Jersey Environmental Law Handbook Makes any false or misleading statement to any person who prepares any (4) hazardous waste application, label, manifest, record, report, design, or other document required to be submitted to the Department; or Makes any false or misleading statement on any hazardous waste (5) application, label, manifest, record, report, design, or other document required to be submitted to the Department. A person who recklessly commits violations indicated above may be guilty of a fourth1385 A person who, regardless of intent, generates, transports, or receives hazardous degree crime. waste without completing and submitting to the NJDEP a hazardous waste manifest may also be 1386

guilty of a fourth-degree crime. Persons may also be subject to similar penalties imposed pursuant to the Water Pollution Control Act if responsible for the discharge of hazardous wastes 1387 to State waters. See Chapter I for a discussion of the NJDEP's enforcement authority. 1.4 G U C E PERIODS FOR MINOR VIOLATIONS 1388 The 1995 Grace Period Law provides that the NJDEP or local government agency shall provide a grace period in which a minor violation of an environmental law or regulation 1389 1390 A violation is minor if: may be corrected without monetary penalty. The violation is not the result of the purposeful, knowing, reckless, or (1) criminally negligent conduct of the person responsible for the violation; The violation poses minimal risk to the public health, safety, and natural (2) resources; The violation does not materially and substantially undermine or impair (3) the goals of the regulatory program; The activity or condition constituting the violation has existed for less than (4) 12 months prior to the date of discovery by the department or local government agency; The person responsible for the violation has not been identified in a (5) previous enforcement action by the department or a local government agency as responsible for a violation in certain circumstances within the preceding 12-month period

1385 1386 1387 1388 1389 1390

N.J.S.A. 13:lE-9(h). N.J.S.A. 13:lE-9(i). N.J.A.C. 7:26-7.8. See Chapter VII. N.J.S.A. 13:lD-125 et sea N.J.S.A. 13:lD-127. N.J.S.A. 13:lD-129(b).

Hazardous Waste Management or responsible for the same or substantially similar violations that reasonably indicates a pattern of illegal conduct; and The activity or condition constituting the violation is capable of being (6) corrected and compliance achieved within the period of time prescribed by the department. 1391 All violations that are not minor are designated as non-minor. To implement the Grace Period Law, the NJDEP adopted changes in 2006 to the 1392 Hazardous Waste Rules. For all violations and corresponding penalties specifically listed within the regulation, the NJDEP lists whether the violation is minor or non-minor and if minor, 1393 the length of the provided grace period. For violations that are not specifically listed, the NJDEP shall determine a violation to be minor where 1) the violation poses minimal risk to the public health, safety, and natural resources; 2) the violation does not materially and substantially undermine or impair the goals of the regulatory program; and 3) the activity or condition constituting the violation is capable of being corrected and compliance achieved within the time 1394 prescribed by the Department. Even where a violation is listed or determined to be minor in 1395 accordance with the regulations, a grace period will not be provided unless: The violation is not the result of the purposeful, knowing, reckless, or (1) criminally negligent conduct of the person responsible for the violation; The activity or condition constituting the violation has existed for less than (2) 12 months prior to the date of discovery by the Department; In the case of a violation that involves a permit, the person responsible for (3) the violation has not been identified in a previous enforcement action by the Department as responsible for a violation of the same requirement of the same permit within the preceding 12-month period; In the case of a violation that does not involve a permit, the person (4) responsible for the violation has not been identified in a previous enforcement action by the Department as responsible for the same or a substantially similar violation at the same facility within the preceding 12-month period; and

1391 1392 1393 1394 1395

N.J.S.A. 13:lD-129(a). 38 N.J. Reg. 2426 (June 5,2006). N.J.A.C. 7:26G-2.4(g). N.J.A.C. 7:26G-2.5(f)(l). N.J.A.C. 7:26G-2.10(~).

New Jersey Environmental Law Handbook In the case of any violation, the person responsible for the violation has not been identified by the Department as responsible for the same or substantially similar violations at any time that reasonably indicates a pattern of illegal conduct and not isolated incidents on the part of the person responsible. Civil administrative penalties for submitting inaccurate or false information, failure to (5)

allow lawful entry and inspection, and failure to pay a fee are not minor violations and are 1396 therefore not subject to a grace period. For minor violations the NJDEP will issue a notice of violation that specifies the condition or activity that constitutes the violation, the specific statutory or regulatory provision violated, and "specifies that a penalty may be imposed unless the minor violation is corrected . . . 1397 within the specified grace period." Prior to the expiration of the grace period, the person responsible for the violation must submit information in writing and signed to the NJDEP 1398 detailing the corrective action taken or compliance achieved. Only one extension of the grace 1399 period may be requested. Extension requests must be made in writing at least 1 week prior to the grace period expiration and must identify the additional time required, the cause of the delay, and measures taken to minimize the delay. In reviewing extension requests the NJDEP may consider 1) whether the violator has taken reasonable measures to achieve compliance in a timely manner; 2) whether the delay has been caused by circumstances beyond the control of the violator; 3) whether the delay will pose a risk to the public health, safety, and natural resources; and whether the delay will materially or substantially undermine or impair the goals of the 1400 regulatory program. Where the person responsible for the violation does not demonstrate to the NJDEP that the violation has been corrected within the grace period or approved extension, the NJDEP may impose a penalty retroactive to the date of the notice of the violation.

2.0 2.1

1401

HAZARDOUS WASTE FACILITY SITING MAJOR HAZARDOUS WASTE FACILITY SITING ACT When public attention focused intensely on hazardous waste control and the siting of hazardous waste facilities New Jersey adopted the Major Hazardous Waste Facilities Siting

1396 1397 1398 1399 1400 1401

N.J.A.C. 7:26G-2.6-2.8. N.J.A.C. 7:26G-2.10(d)(l). N.J.A.C. 7:26G-2.10(d)(3). N.J.A.C. 7:26G-2.10(d)(6). N.J.A.C. 7:26G-2.10(d)(4). N.J.A.C. 7:26G-2.10(d)(5).

Hazardous Waste Management 1402

act as a way to make the siting process more disciplined. As the volume of hazardous wastes has declined, market forces have changed, and interest in new hazardous waste facilities has all but disappeared, as has the role of the Hazardous Waste Facility Siting Commission. Nonetheless, the statute has not been repealed and if there were to be a new major hazardous waste facility, or an expansion of an existing major hazardous waste facility sufficient to trigger 1403 the Siting Act, its provisions would still apply. The following sections discuss how the Siting Act would be applied. The Legislature stated that the siting of commercial hazardous waste facilities was of major public importance to assure that management of hazardous waste would not present 1404 inappropriate risks to the public health or the environment. The Act applies to new, major 1405 hazardous waste facilities to be constructed after September 10, 1981, with a total capacity of 1406 more than 250,000 gallons generated at locations offsite from the facility or existing facilities 1407 that expand their previous capacity by 50 percent or more. The Act and implementing of regulations designate certain areas that are inappropriate 1408 for new major hazardous waste facilities. All new major hazardous waste facility sites must

N.J.S.A. 13:lE-49, et sea. See N.J.A.C. 7:26G-13.2(a) (requiring supplemental permitting under Major Hazardous Waste Facility

Siting Act). N.J.S.A. 13:1E-50.

See, N.J.S.A. 13:lE-57(a). N.J.S.A. 13:lE-51(1); N.J.A.C. 7:2G-14.6. For purposes of this Act, hazardous waste is defined as any waste or combination "which poses a present or potential threat to human health, living organisms or the environment including, but not limited to, waste material that is toxic, carcinogenic, corrosive, irritating, sensitizing, biologically infectious, explosive or flammable, and any waste so designed by the United States Environmental Protection Agency." Hazardous waste does not include radioactive waste. N.J.S.A. 13.1E51(k). It also includes waste more specifically defined in N.J.A.C. 7:26G-5. N.J.S.A. 13:lE-87. N.J.S.A. 13:lE-57; N.J.A.C. 7:26G-14.7(a). This regulation specifically states that such facilities may not be within one-half mile of "any structure which is routinely occupied by the same person or persons more than 12 hours per day, or by the same person or persons under the age of 18 for more than 2 hours per day...."; N.J.S.A. 13:lE-57(a)(5); N.J.A.C. 7:26G-14.7(a)(3); N.J.A.C. 7:26G-14.7(c) provides that the risk of harm be determined by considering population density near the proposed facility, the size and type of the facility and waste expected to be present there, the transportation means and routes for evacuating the atrisk population in a maximum credible accident, the size and types of other facilities in the adjacent area, and the availability of fire, police, and other emergency personnel in the area; N.J.S.A. 13:lE-57(a)(2); N.J.A.C. 7:26G-14.8(a). Such areas include those delineated under the Flood Hazard Area Control Act, N.J.S.A. 58:16A-50, et sea., those delineated within the 100-year flood plain by the Federal Emergency Management Agency, those within the 100-year flood plain along non-delineated streams, coastal flood hazard areas at elevations less than 12 feet above mean sea level, or in areas subject to subsurface instability or overlying subsurface mining activities; N.J.A.C. 7:26G-14.9; N.J.A.C. 7:26G-14.10. These

New Jersey Environmental Law Handbook be approved by the Commission, which has exclusive authority to approve such sitings. While the NJDEP has authority to approve the registration statement and engineering design of a proposed new major hazardous waste facility, it cannot exercise that authority unless the 1409 Commission has approved the siting of the proposed facility. The Commission was to develop a Major Hazardous Waste Facilities Plan ("'the Plan"), which was the Commission's determination of the State's need for new types of major hazardous 1410

waste facilities. The Plan then is the basis for all siting decisions of the Commission. The Commission is required on its own initiative to select sites for each type of major hazardous 141 1 and upon request of industry, for waste facility that the Plan determines is needed in the State, approval of the siting of a proposed new major hazardous waste facility. The Commission may also add to or amend the locations it selected to fulfill the facility needs determined in the 1412 Plan. The Plan was first issued in March, 1985 and updated in 1989. There have been no further updates.

ROLE OF THE NJDEP IN APPROVING NEW MAJOR HAZARDOUS WASTE FACILITIES The NJDEP has exclusive authority to approve the technical and engineering design for proposed new major hazardous waste facilities. It exercises this authority by reviewing the 1413 registration statement, engineering design, and EHIS prior to the facility's construction. As part of that review the NJDEP must also find that the EHIS shows that the facility as designed and as located will pose no significant health or environmental threat and that the facility will be 2.2

areas include wetlands or areas of habitat for protected species, protected wild and scenic rivers, farmland dedicated to agricultural use, the lands protected under the Pine Lands Protection Act, or land within 6.25 miles of any mandatory Federal Class 1 Prevention of Significant Deterioration of Air Quality Area; N.J.A.C. 7:26G-14.12. The regulations prohbit siting major hazardous waste facilities in locations with a seasonally high water table which will rise to within one foot of the ground surface or where groundwater does not flow predominantly parallel or upward toward the water table and discharge to a nearby surface water body or where water supply wells intermediately withdraw from the uppermost saturated zone and there is no significant recharge to deep aquifer; N.J.A.C. 7:26G-14.13. The proposed facility for any nonattainment area must show that emission offsets will be obtained prior to operation, that annual significant emissions will be limited to 10 tons for volatile organic substances and 25 tons for total suspended particulate matter, and that the facility will obtain special emission offsets more stringent than those generally applicable; N.J.A.C. 73266-14.1 1. N.J.S.A. 13:lE-60; N.J.A.C. 7:26G-13.2(a). N.J.S.A. 13:lE-58. The Plan was to include an inventory and appraisal of existing facilities, an inventory of hazardous waste generated, a projection of the nature and amount of hazardous waste to be generated, a determination of the number and type of additional facilities needed, and analysis of transportation routes. N.J.S.A. 13:lE-59(a). N.J.S.A. 13:lE-59(b). N.J.S.A. 13:1E-60(a), (b).

Hazardous Waste Management 1414

on a site approved by the Commission. The NJDEP also must find that the facility's design meets the minimum criteria in the Act, which require that the facility be above existing grade, allow 99.9 percent extraction of all hazardous wastes stored or disposed there, allow access for 1415 inspection, and prevent any adverse impact on human health and the environment. The approval cannot take place, however, until the municipality and interested parties have had an opportunity to review the proposed facility design under procedures similar to those available to evaluate siting decisions. Therefore, applicants are required to notify the NJDEP and the municipality at least 90 days prior to filing an application for approval of the registration statement and engineering design. A copy of the application is provided to local officials who 1416 then conduct, at the applicant's expense, a review of the proposed facility and the operator. After this review is complete, the NJDEP issues either a rejection or tentative approval with appropriate conditions or limitations. Any tentative approval then is evaluated at an administrative adjudicatory hearing that results in the administrative law judge's recommended decision, which the NJDEP may either accept, modify, or reject. The NJDEP's final decision 1417 then becomes subject to judicial review. 2.2.1 The Act's Liability and Enforcement Provisions The Act imposes on owners and operators of major hazardous waste facilities several types of liabilities. First, owners and operators are strictly, jointly, and severally liable for cleanup and removal of any discharges of hazardous substances, and for all damages whether 1418 direct or indirect caused by the operation or closure of the facility. Also, owners and operators are liable for proper closure and postclosure care at the facility and must provide 1419 evidence of their financial ability to meet that responsibility. Third, owners and operators are obligated to pay a 5 percent gross receipts tax to the municipality in which the facility is located

N.J.S.A. 13:lE-60(b). 1415 1416 1417 1418

1419

N.J.S.A. 13:1E-61(a). The Act also has special standards for landfills.

Id.

N.J.S.A. 13:lE-60(c). Id. N.J.S.A. 13:lE-62. Case law in New Jersey holds that this provision does not impose strict liability on public entities and that nothing in this provision precludes the imposition of liability also upon generators of the hazardous waste managed at a major hazardous waste facility. Kennev v. Scientific, Inc., 204 N.J. Super. 228,497 A.2d 1310 (Law Div. 1985). N.J.S.A. 13:lE-68. Financial responsibility may be met through escrow accounts, performance bonds, or

other financial mechanisms that the NJDEP approves.

New Jersey Environmental Law Handbook

to defray the municipality's costs for police, fire, inspections, and other expenses arising from 1420 the location of the facility in the municipality. To ensure that major hazardous waste facilities are in compliance with their permits and hazardous waste regulations, the Act requires either the local board of health or the county health department to conduct weekly inspections of the facility and authorizes inspections by these officials at any other time. Weekly inspections are to commence with the construction of the 1421

facility and continue for 30 years following its closure. These officials are encouraged to be diligent in their inspections because the Act authorizes them to bring judicial actions to restrain violations or seek penalties for past violations and provides that the local board of health or county health department shall receive one-half of any penalty imposed for violations uncovered 1422 in their weekly inspections. Owners and operators who violate their permits or the hazardous waste regulations are subject to actions that seek to enforce those obligations or to close the 1423 facility. Also, the Act seeks to supplement enforcement of criminal prosecutions for environmental crimes by awarding one-half of the criminal penalty collected to those who 1424 provided information that resulted in arrest and conviction. Finally, to ensure that necessary facilities continue in operation even if they were previously operated improperly, the Act 1425 contains detailed provisions for the facility to be operated under a conservatorship.

1420

1421 1422 1423 1424 1425

N.J.S.A. 13:lE-80. The Act also permits municipalities to request from the Commission authority to collect additional funds if the 5 percent gross receipts tax does not reimburse the municipality for all costs it incurs related to the facility. The procedures for resolving tax disputes before the Commission are contained in N.J.A.C.73266-15.8. N.J.S.A. 13:lE-64, -65. N.J.S.A. 13:lE-64(b). N.J.S.A. 13:lE-66. N.J.S.A. 13:lE-67. N.J.S.A. 13:lE-69 to 79.

CHAPTER VI AIR POLLUTION CONTROL OVERVIEW The air resources of the State of New Jersey are regulated and protected by both the 1427 federal Clean Air Act ( c A A ) ' ~and ~ ~ the New Jersey Air Pollution Control Act (APCA). Together, the CAA and the APCA regulate virtually any piece of equipment, control apparatus, "source operation," activity, or facility that is capable of causing the emission of an air contaminant into the outdoor atmosphere. The NJDEP administers the APCA, and the NJDEP has a history of pioneering the development of air pollution control programs which have gone on to become national programs. For example, New Jersey's Toxic Catastrophe Prevention Act (TCPA) was the model for the CAA section 112(r) prevention of accidental releases program. New Jersey continues to be in the vanguard of state air pollution control programs by being the first to have its Open Market Emissions Trading (OMET) rule approved by the USEPA. New Jersey is also one of the first state air pollution control programs to establish a greenhouse gases (GHGs) registry. 1.0

2.0

AMBIENT AIR QUALITY STANDARDS Under the CAA, the USEPA is required to set, publish, and periodically review regulations prescribing national primary ambient air quality standards (NAAQS) to protect the 1428 public health. The USEPA is also required to publish national secondary ambient air quality standards to protect the public welfare from any known or anticipated adverse effects associated 1429 with the presence of pollutants in the ambient air. The USEPA has promulgated national primary and secondary ambient air quality standards (NAAQS) for particulate matter, sulfur 1430

dioxide, ozone, nitrogen dioxide, carbon monoxide, and lead. The NJDEP has similarly promulgated ambient air quality standards for suspended particulate matter, sulfur dioxide, 1431 carbon monoxide, ozone, lead, and nitrogen dioxide.

42 U.S.C. $7401 et sea. 1427

1428 1429 1430 1431

N.J.S.A. 26:2C-1 et sea. The Air Pollution Control Act was first adopted in 1955 and was substantially amended to its present form on June 15, 1967. 42 U.S.C. $7409. Id. 40 C.F.R. $550.4 to 50.12. N.J.A.C. 7:27-13.3 to 13.8.

New Jersey Environmental Law Handbook

TECHNOLOGY-BASED STANDARDS In addition to requiring the use of air pollution control measures based on ambient air quality standards, the CAA requires the incorporation of technology-based controls for new or 1432 and Prevention of Significant modified facilities under its New Source Review (NSR) 1433 programs. Under New Source Review, emissions standards are set on Deterioration (PSD) the basis of Best Available Control Technology (BACT), which is determined by a broad review of available technologies in operation throughout an industry class. Under the PSD program, technology capable of achieving the lowest available emission rate (LAER) is identified by a review of all similar types of facilities, and must be utilized where ambient air quality standards cannot be degraded. New Jersey has substituted a State of the Art technology (SOTA) review for EPA's NSR and PSD program. NJDEP has developed SOTA requirements for numerous types of processes in many industries. 3.0

HAZARDOUS AIR POLLUTANTS The Clean Air Act also regulates specific hazardous air pollutants (arsenic, asbestos, benzene, beryllium, mercury, radon, vinyl chloride) under its National Emission Standards for 1434 Hazardous Air Pollutants (NESHAPs). This program establishes work practice requirements for specific pollutants (asbestos for example) or emissions standards for specific pollutants from specific industries. In addition, specific categories or subcategories of facilities also must achieve Maximum Achievable Control Technologies (MACT) standards which establish 1435 emissions limitations for specified hazardous air pollutants (HAPS).

4.0

THE NEW JERSEY STATE IMPLEMENTATION PLAN Under the CAA, each state has principal responsibility for devising a combination of stationary and mobile source air pollution control measures that, together, will achieve and 1436 maintain compliance with the NAAQS within the state's boundaries. The document that contains all of the various air pollution control measures adopted by a state to meet the NAAQS is known as a State Implementation Plan or SIP. Each state must adopt a SIP which provides for 1437 the "implementation, maintenance and enforcement" of the NAAQS. The New Jersey SIP 5.0

1432 1433 1434 1435 1436 1437

40 U.S.C. $7411. 40 U.S.C. $7470 et sea 40 U.S.C. $7412; 40 CFR Part 61. 42 U.S.C. $7412; 40 CFR Part 63. 42 U.S.C. $7407 (a). 42 U.S.C. •˜7410(a)(l).

Air Pollution Control 1438

includes most of the regulations promulgated by the NJDEP under its APCA authority. The SIP contains the regulations which have been approved by USEPA and are therefore "federally enforceable." The distinction between "federally applicable regulations" and "state applicable regulations" is a key distinction that will determine what emission control standards and requirements apply to a source and what kind of permit, i.e., state, federal, or both, a source must have in order to construct and operate. Failure of a state to enforce its SIP can result in a withdrawal of USEPA-delegated programs and the implementation by USEPA of a Federal Implementation Plan or "FIP." Moreover, failure to meet deadlines for achieving implementation of SIP regulations or deadlines for the achievement of NAAQS can result in the prohibition of construction of major sources of 1439 air pollution in the state and the withholding of federal highway funds. While EPA has never revoked NJDEP's authority to administer New Jersey's air pollution control program, it has in the past threatened to do so to obtain concessions from the State when EPA and NJDEP disagreed over various NJDEP program elements.

ATTAINMENT OF NATIONAL AMBIENT AIR QUALITY STANDARDS Overall, air quality in New Jersey is improving. To that end, New Jersey has successfully 1440 attained NAAQS in all areas except ozone and fine particulate standards. By virtue of its classification as a moderate ozone nonattainment area, New Jersey is required to meet a June 2010 deadline to attain the federally mandated ozone standard of 0.080 ppm concentration 1441 averaged over 8 hours (the "8-hour ozone standard"). The NJDEP has expressed great concern regarding the State's ability to meet the 2010 ozone standard because EPA has failed to 1442 address the need to reduce regional upwind emissions. According to NJDEP, one-third of 1443 New Jersey's air pollution comes from out-of-state. NJDEP predicts that unless and until EPA takes action on upwind facilities, New Jersey will be unable to meet the June 2010 deadline 1444 for reducing ozone concentrations to 0.080 ppm. 6.0

1438 1439 1440

1441 1442 1443 1444

40 C.F.R. 852.1573. 42 U.S.C. 8$7409(c), 7413(a). Commissioner Bradley M. Campbell, New Jersey Department of Env. Protection, In Pursuit of Clean Air (April 2004) at 8. Id. at 9. Id. at 8. Id. at 9. -

Id. -

New Jersey Environmental Law Handbook 7.0 7.1

RECENT DEVELOPMENTS FEDERAL DEVELOPMENTS On February 14,2002, President Bush first announced his plans for legislation that would 1445 dramatically reduce power plant emissions of sulfur dioxide, nitrogen oxides, and mercury. President Bush's proposal is known as The Clear Skies Initiative (S. 485, H.R. 999). Under the

President's proposal, a strict mandatory emissions cap and trade program would be phased in that would cut sulfur dioxide emissions by 73 percent, cut nitrogen oxides emissions by 67 1446 percent, and cut mercury emissions by 69 percent. Full implementation of the Clear Skies 1447 Initiative would be achieved by 2018. In January 2004, EPA joined in the President's efforts to improve the nation's air quality by proposing new regulations that would cut sulfur dioxide and nitrogen oxides from power plants in 29 States and the District of Columbia and proposed to further limit mercury emissions 1448 To attain reduced emission levels, the regulations propose that States from power plants. regulate power plants under a cap and trade program similar to that of EPA's Acid Rain Program. The proposed regulations differ from the Clear Skies Initiative in that under EPA's proposal the States would be given an emissions budget and would allocate allowances based on that budget, while under Clear Skies, EPA would allocate allowances. At the time of publication of this handbook, EPA had not finalized the proposed regulations. It is most likely that the regulations will not be finalized unless it becomes apparent that the President's Clear Skies Initiative cannot be passed. The debate concerning EPA's application of its New Source Review program to modifications at existing sources has also received significant attention. Beginning in 2005, the D.C. District Court of Appeals issued two very significant decisions impacting the application of New Source Review to stationary sources. On June 24,2005, the D.C. District Court of Appeals 1449 decided the case of New York v. Environmental Protection Agency. In New York I, state governments, environmental groups, and industrial entities brought suit challenging EPA's 2002 1450 New Source Review Reform Rule ("Reform Rule"). The dispute between the parties 1445

1446 1447

1448 1449

1450

www.e-~a.aov/air/clear,~kies/le.gi.s.htnzl. Approximately one year later, in February 2003, President Bush reintroduced his Clear Skies Initiative to Congress and the House. Id.

www.e~a.aov/air/clearskies/basic. html. Id. -

69 Fed. Reg. 4,566 (Jan. 30,2004), 69 Fed. Reg. 4,652 (Jan. 30,2004). New York v. Environmental Protection Agency, 413 F.3d 3 (D.C. Cir. 2005). Id. at 10. -

Air Pollution Control centered around EPA's interpretation of "modification" in the 2002 Reform Rule. Industry petitioners argued that the 2002 Reform Rule interpreted "modification" too broadly and in doing so, unlawfully differed from the definition of "modificationyyin the New Source 1451 Performance Standards (NSPS) rule. Not surprisingly, the states and environmental groups argued that the rule's interpretation was too narrow, resulting in a reduced application of NSPS's stringent emissions controls. To support their argument that the plain language of the CAA mandated identical NSPS and NSR definitions of "modifications," industry petitioners pointed to the NSR provisions of 1452 the 1977 CAA Amendments which cross-referenced the NSPS definition. Under the NSR portion of the Act, the terms "modifications" and "modified" mean the same as the term 1453 "modification" as used in Section 741 1(a)(4). The District Court rejected the industry petitioners' arguments and determined that if Congress intended to incorporate a definition from 1454 a prior regulation it would have done so expressly as it had done elsewhere in the Act. The 1455 District Court therefore upheld the EPA's NSR definition of "modification." The District Court also went on to uphold (1) EPA's use of a 10-year "lookback period" for purposes of determining the baseline for emissions increases, (2) the exclusion of emissions stemming from "unrelated product demand growth," and (3) the use of plant wide applicability 1456 limitations as an alternative method for assessing increases in emissions. Nevertheless, the District Court did determine that EPA lacked authority to exempt facilities with "clean unit" 1457 status or "pollution control projects" and vacated those provisions of the 2002 Reform Rule. The District Court also determined the EPA failed to adequately explain its rationale for new recordkeeping and reporting requirements and therefore remanded those provisions to EPA to 1458 provide an acceptable explanation for its "reasonable possibility" standard.

1451

Id. at 10, 18. The Industry Petitioners claimed that the NSPS regulatory definition of modification focuses on the hourly rate of emissions, while the NSR definition focuses on net emissions increases measured in tons per year. Id, at 18.

1452 1453 1454 1455 1456 1457 1458

Id. at 18-19. Id. at 19. Id. Id. at 20. Id, at 21,31,37, and 41.

Id. at 44. Id. -

New Jersey Environmental Law Handbook

On March 17,2006, the D.C. District Court of Appeals decided the case of New York v. 1459 Environmental Protection Agency In New York 11, a coalition of 14 States and environmental groups brought suit against EPA challenging its Equipment Replacement Provision (ERP), which sought to amend the Routine Maintenance, Repair, Replacement 1460 Historically, the RMRR exclusion provided that routine maintenance, Exclusion (RMRR). repair, and replacement do not qualify as "changes" triggering application of New Source 1461 Under the ERP, however, EPA expanded the definition of the RMRR Review requirements. exclusion to allow sources to avoid triggering NSR when replacing equipment that did not 1462 exceed 20 percent of the unit's replacement cost even if the change increased emissions. The disagreement between the parties centered on the plain language of the CAA and its definition of "modification7" which inserted the word "any" before the phrase "physical 1463 The States and environmental petitioners argued that the ERP violated the plain text change." of the Clean Air Act because the term "modification" was intended to apply to physical 1464 change that increases emissions. The EPA countered that the ERP would not result in an increase in emissions and that the term "physical change" was ambiguous and susceptible to varied meanings, thus requiring that deference be afforded to EPA's interpretation in accordance with the standards set forth in Chevron U.S.A., Inc. v. National Resources Defense Council,

Inc.1465 The District Court found EPA's argument unpersuasive and ruled in favor of the States 1466 and environmental petitioners. As the court explained, "Congress's use of the word 'any' in defining a 'modification' means that all types of 'physical changes' are covered.. .As Congress limited the broad meaning of 'any physical change,' directing that only changes that increase

New York v. Environmental Protection Agency, No. Civ. A 03-1380,2006 WL 662746 (D.C. Cir. March 17,2006). Id. at *l.

7

Id. Id. For example, under the proposed rule, if a power plant was built 40 years ago for $25 million (which was before pollution controls were required under the Clean Air Act) but replacing a new unit would cost $100 million, the power plant would be permitted to spend up to $20 million on any project that would improve and extend the life of the plant without having to install any air pollution controls upgrades otherwise required by NSR.

Id,at *2. Id. Id. at *3 (citing Chevron U.S.A.. Id. at -

*3.

Inc. v. National Resources Defense Council, Inc., 467 U.S. 837 (1984)).

Air Pollution Control emissions will trigger NSR, no other limitation can be implied." The court therefore went on to hold that the ERP violated the New Source Review provisions of the Clean Air Act and 1467 consequently must be vacated. 7.2 NEW JERSEY DEVELOPMENTS New Jersey is one of seven participating Northeast and Mid-Atlantic States involved in a cooperative effort to reduce greenhouse gas emissions. The cooperative effort, known as the Regional Greenhouse Gas Initiative (RGGI), seeks to "develop a multi-state cap-and-trade program aimed at reducing carbon dioxide emissions from power plants in the participating states while maintaining energy affordability and reliability and accommodating, to the extent 1468 Once the power plant feasible, the diversity in policies and programs of individual States." cap-and-trade program is implemented, the States hope to similarly expand the program to other emissions sources. The RGGI began in April 2003 when New York Governor George E. Pataki sent letters to the governors of eleven (1 1) States from Maine to Maryland asking for their commitment to develop a regional cap-and-trade program to reduce carbon dioxide emissions from power plants within two years. Eight (8) of the eleven (1 1) governors responded favorably, including then New Jersey Governor Jim McGreevy. The governors agreed to commit their time and resources to draft an action plan that would set forth the parameters of a workable cap-and-trade program. On December 20, 2005, seven of the RGGI member States announced an agreement to implement the RGGI as outlined in a Memorandum of Understanding (MOU) signed by the governors of the member States. The signatories to the MOU include Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont. The MOU provides details regarding the specifics of the cap-and-trade program and outlines the framework for a draft Model Rule. On March 24, 2006, the RGGI member States released a draft Model Rule detailing the proposed program as outlined in the Memorandum of Understanding. The proposal provided for 60 days of public comments as well as two stakeholders meetings in that same time period. On the regulatory front, NJDEP proposed new regulations in December 2003 that would amend N.J.A.C. 7:27-27.7 to further reduce mercury emissions from power plants, iron and steel 1469 smelters, and municipal solid waste incinerators. Under the proposed rules (1) mercury emissions from the State's 10 coal-fired power plants are to be reduced by 90 percent by 2007; 1467 1468 1469

Id. at *7. htt~://www.rsxi.orp/a~reement. html.

36 N.J.R. 5406(a).

New Jersey Environmental Law Handbook (2) mercury emissions from the State's six iron and steel smelters are to be reduced by 75 percent by 2009; and (3) mercury emissions from New Jersey's five municipal solid waste 1470 incinerators are to be reduced by 95 percent by 2011. At the time of publication, the amendments to N.J.A.C. 27-27.7 had not been adopted. NJDEP has also made some significant changes in air pollution permits approved for dry cleaning facilities. In accordance with the amendments to N.J.A.C. 7:27-8.13@)3, dry cleaning equipment which uses perchloroethylene is required to comply with EPA Maximum Achievement Control Technology (MACT) standards found at 40 CFR 63.320 through 324 and 1471 State requirements found at N.J.A.C. 7:27-8.13(a) and (d). Beginning in January 2006, NJDEP is also requiring all dry cleaning facilities to limit their use of perchloroethylene to ninety (90) gallons per year if currently using a third generation machine or one hundred fifty (150) gallons if using a fourth generation machine. In addition, the amended regulations also impose stricter reporting requirements. NJDEP is also in the process of preparing additional rule changes whch will require upgrades for all third and fourth generation equipment and also calls for the elimination of perchloroethylene from all dry cleaning- businesses in New Jersey - by . the 1472 year 2020.

8.0

PERMITTING

8.1

INTRODUCTION New Jersey's air pollution program is implemented by NJDEP's issuance of permits to

construct and certificates to operate to sources of air pollution other than specifically exempted 1473

sources and insignificant activities. In New Jersey, air permitting is divided into two major categories: Subchapter 8 preconstruction permits and operating certificates for "minor" facilities, and Subchapter 22 operating permits for "major" Title V facilities. Minor facilities and preconstruction permits are handled by the NJDEP Bureau of Preconstruction Permits (BPP). Major facilities are permitted through the Bureau of Operating Permits (BOP). Applications for the proposed installation, construction, reconstruction, or modification of equipment at Title V facilities and for significant sources at non-Title V facilities are submitted to the BPP for review and issuance. Any BPP preconstruction permit approval for

1470

Id. The timeframe within which coal-fired boilers are to be compliant can be extended until December 5, 2012, provided that the company enters into an agreement with NJDEP under which the company agrees to meet certain emission levels for nitrogen oxides, sulfur dioxide, and particulate matter. See id.

1471 1472 1473

N.J.A.C. 7:27-8.13 et seq httu://www.state. nj.us/lVJDEP/aa~p/d~vcleaner. html. SeeN.J.A.C. 7:27-8.3(a), (b); N.J.A.C. 7:27-22 et seq.

Air Pollution Control equipment or control apparatus at a Title V facility will be incorporated into that facility's Title V permit by the BOP. 8.2 SUBCHAPTER 8 PERMITTING OF "SIGNIFICANT" MINOR SOURCES 8.2.1 Applicability Unless specifically exempted, Subchapter 8 requires that any person who owns or operates equipment, source operations, control apparatus, or conducts regulated activities, to obtain a preconstruction permit and operating certificate before construction, modification, or 1474 operation can legally commence. Sources subject to Subchapter 8's permitting requirements are known as "significant sources," while those minor sources not subject to Subchapter 8 1475 permitting requirements (i.e., exempt sources) are known as "insignificant sources." A significant source located at a facility covered by a Subchapter 22 operating permit 1476 (i.e., a major Title V facility) is not subject to Subchapter 8 permitting requirements. Transitional sources (e.g., significant minor sources at a Title V facility that has not yet received 1477 its Title V permit) are still subject to Subchapter 8 permitting requirements. In addition, sources at Title V facilities that are specifically exempted from Title V permitting (e.g., research 1478 and development operations) may be subject to Subchapter 8 permitting requirements. "Equipment" is any device capable of causing the emission of air contaminants into the outdoor atmosphere and includes any stack, chimney, flue, duct, or vent connected, attached to, 1479 or serving the equipment. A source or "source operation" is any process or any identifiable 1480 part thereof that emits or can reasonably be anticipated to emit any air contaminant. A source 1481 operation may include one or more pieces of equipment or control apparatus. Finally, an "emissions unit" is any part of activity at a stationary source that emits or has the potential to emit any NAAQS regulated pollutant or any HAP listed at 42 U.S.C. 7412(b). Thus, careful attention is required to distinguish between a device that may be equipment, a process that may be a source operation, and an activity that may be an emissions unit.

N.J.A.C. 7:27-8.2(~). N.J.A.C. 7:27-8.2(a). N.J.A.C. 7:27-8.2(b). N.J.A.C. 7:27-8.2(b). N.J.A.C. 7:27-8.2(b). N.J.A.C. 7:27-8.1. N.J.A.C. 7:27-8.1. N.J.A.C. 7:27-8.1.

New Jersey Environmental Law Handbook Subchapter 8 requires the owner or operator of the following types of equipment and control apparatus to obtain both a preconstruction permit and an operating certificate: Commercial fuel burning equipment having a heat input rate of 1 million (1) BTU per hour or greater to the burning chamber; Equipment which has the potential to emit any Group 1 or Group 2 toxic (2) substance (TXS) (or a combination thereof) at a rate greater than 0.1 pounds per hour (45.4 grams per hour); (3) Dry cleaning equipment; A surface cleaner using a cleaning solution containing 5 percent or more (4) of volatile organic compound (VOCs), HAPS, or VOC and HAP combined and which is: An unheated open top surface cleaner with a top opening greater (i) than 6 square feet or a capacity greater than 100 gallons; A heated open top surface cleaner; (ii) (iii) A conveyorized surface cleaner; or (iv) A stationary spray cleaning or surface stripping operation using one half gallon or more of cleaning solution in any one hour; Equipment used in graphic arts operations in which the quantity of ink, (5) fountain solution, or cleaning material used is equal to or greater than one half gallon in any one hour; Any tank or vessel having a capacity in excess of 100 gallons used for (6) chromium electroplating or anodizing, or etching, pickling, or plating; A transfer operation involving gasoline or other VOCs regulated under (7) N.J.A.C. 7:27-16.3 or 16.4, or a marine tank vessel loading or ballasting operation regulated under N.J.A.C. 7:27-16.5, if the operation is required to have a control device other than bottom fill or submerged fill; Stationary storage tanks having a capacity in excess of 10,000 gallons and (8) that are used for the storage of liquids, except water or distillates of air; Stationary storage tanks having a capacity of 2,000 gallons or greater that (9) are used for the storage of VOCs or mixtures of VOCs having a vapor pressure or sum of partial pressures of 0.02 pounds per square inch absolute (1 millimeter of mercury) or greater at standard conditions; (10) Tanks, reservoirs, containers, and bins having a capacity in excess of 2,000 cubic feet that are used for the storage of solid particles; (1 1) Stationary material handling equipment using pneumatic, bucket, or belt conveying systems from which emissions occur;

Air Pollution Control (12) Equipment used in a surface coating operation, including, but not limited to, spray and dip painting, roller coating, and electrostatic depositing, in which the quantity of coating or cleaning material used by a source in any one hour is equal to or greater than one half gallon of liquid; (13) Except where a registration has been filed pursuant to N.J.A.C. 7:27-20.3, any equipment used for the burning of non-commercial fuel, crude oil, or process byproducts in any forrns. This includes off-specification used oil, processed used oil fuel, or on-specification used oil as defined in N.J.A.C. 7:27-20.1; (14) Incinerators, except for those specifically exempted; (15) Equipment which is used for treating groundwater, industrial waste water, or municipal wastewater with a solids content of less than 2 percent by weight as it enters the equipment (typical operations performed by this type of equipment include air stripping equipment, aeration basins, digesters, surface impoundments, dewatering equipment, thickeners, flocculators) if the equipment does either of the following: treats or handles influent which has one or both of the following: (i) a total concentration of VOCs and Group 2 TXS in the (a) influent of 3,500 parts per billion by weight or more; or a total Group 1 TXS concentration in the influent of 100 (b) parts per billion by weight or more; or discharges more than 50 pounds per hour of sludge (wastewater (ii) with a solids content of 2 percent or more by weight is considered a sludge); (16) Equipment used for treating waste soils or sludges, including municipal solid wastes, including solid wastes or recycled materials, if the influent to the equipment has a solids content of 2 percent by weight or greater. Typical operations performed by this type of equipment include, but are not limited to, soil cleaning, composting, pelletizing, grit classifjmg, drying, and transfer station operations; (17) Equipment used for venting a closed or operating dump, sanitary landfill, hazardous waste landfill, or other solid waste facility; or (18) Equipment in which the combined weight of all raw materials used, excluding air and water, exceeds 50 pounds in any one hour.

New Jersey Environmental Law Handbook 8.2.2 Exemptions Subchapter 8 specifically exempts sources that the State has determined do not require an 1482 Among the kinds of minor sources exempted from air permitting air permit and/or certificate. requirements are: Storage tanks maintained under pressure of greater than one atmosphere, (1) provided that any vent serving such storage tank has the sole function of relieving pressure under emergency conditions; Storage tanks, reservoirs, containers, or bins used on any farm for the (2) storage of agricultural commodities produced by or consumed in the farm's operations; Aeration basins, lagoons, and settling basins at publicly owned treatment (3) works or domestic treatment works; Hand-held equipment for buffing, polishing, cutting, drilling, sawing, (4) grinding, turning, or machining wood, metal, or plastic; (5) Copying and duplicating equipment; Laundry operations that do not use dry cleaning processes, i.e., PERC, and (6) which services uniforms or other clothing that is used at the facility; Architectural maintenance activities conducted to take care of buildings (7) and structures at a facility, including repainting, re-roofing, and sandblasting; Food preparation to service facility cafeterias and dining rooms; (8) Incinerators serving a one- or two-family dwelling; (9) (10) Incinerators which serve multi-occupied dwellings containing six or fewer family units, one of which is occupied by the owner of the dwelling; and (1 1) Maintenance shops operating indoors that support other production facilities at the same location but are not themselves production processes. Note that the above-listed sources are exempted fiom air permitting requirements even if the 1483 source is listed in Subchapter 8's applicability section. 8.2.3 General Provisions Many of the "general provisions" applicable to the owners andlor operators of Subchapter 8 sources are in the form of prohibitions against installing or operating a significant source without NJDEP approval. Thus the first "general provision" of Subchapter 8 prohibits any person fiom constructing, reconstructing, instal1ing;or modifying a significant source that is not

1482 1483

See N.J.A.C. 7:27-8.2(d).

N.J.A.C. 7:27-8.2(d).

Air Pollution Control 1484

covered by a permit and certificate without first obtaining a preconstruction permit. 1485 Likewise, no person may operate a significant source without a valid operating certificate. No permittee can take an action which requires a permit revision, compliance plan change, 7-day notice change, permit amendment, or batch plant permit without complying with the provisions of N.J.A.C. 7:27-8.17 through ~ 2 3 . l ~ ' ~ Subchapter 8's general provisions also proscribe persons from using or causing to be "used any equipment or control apparatus unless all the components connected or attached to, or serving the equipment or control apparatus, are functioning properly and are in use in accordance 1487 with the preconstruction permit and certificate and all conditions and provisions thereto." This seemingly simple and straightforward general provision, which appears to be simply an operation and maintenance requirement, has served as the regulatory basis for NJDEP enforcement actions. N.J.A.C. 7:27-8.3(e) has been used for enforcement actions where the source is accused of operating without disclosing all raw material inputs to a process or operating in excess of batch weights identified in a preconstruction permit application. In effect, the NJDEP has seized upon N.J.A.C. 7:27-8.3(e) to "bootstrap" every piece of information disclosed in a preconstruction air permit application for enforcement purposes. Subchapter 8's general provisions also contain the general prohibition against the release of odors in such quantity and duration that is, or tends to be, injurious to human, welfare, animal or plant life, or property, or which unreasonably interferes with the enjoyment of life or 1488 property. 8.2.4 Permit Applications As a practice pointer, depending on the cost of a new piece of equipment or control device or its importance in meeting customer orders, an applicant may want to think about asking to meet with the BPP for a "pre-application meeting." This meeting can serve several useful purposes, including educating the NJDEP about the proposed equipment and its importance to the manufacturing operations. The applicant will learn about special NJDEP requirements or conditions and the NJDEP's time frame for permit issuance. Thereafter, and depending on the importance of the permit to the business operations, the applicant may also want to request an

1484

1485 1486 1487 1488

N.J.A.C. 7:27-8.3(a). N.J.A.C. 7:27-8.3(b). N.J.A.C. 7:27-8.3(~). N.J.A.C. 7:27-8.3(e). N.J.A.C. 7:27-8.3G).

New Jersey Environmental Law Handbook opportunity to review the permit terms and conditions before the draft permit is issued. Applicants should also be aware that the NJDEP now requires that all air permit applications be submitted in electronic form using the RADIUS software application. 1489 With certain limitations, the NJDEP can require a wide range of information in an air permit application including, but not limited to, a description of the applicant's processes, raw materials, operating procedures, the physical and chemical nature of any air contaminant, volume 1490

of gas discharged, and "such other information that the NJDEP considers necessary." The required information may include documentation showing compliance with the NJDEP's "state 1491 of the art" (SOTA) control requirements. Note that all information contained in a permit 1492 application, registration, or notice is public information. Thus in order to preserve the confidentiality of any proprietary process information, applicants must comply with the confidentiality provisions of N.J.A.C. 7:27-1.9 et seq. As part of its air permit application review and as a condition to the issuance of an operating certificate or renewal thereof, the NJDEP may require the applicant to conduct stack testing as is necessary at the NJDEP's discretion to verify that the kind and amount of air contaminants emitted comply with the limits established in the preconstruction permit and 1493 operating certificate. A stack testing protocol must be submitted at least 60 days in advance 1494 of the proposed test date, and the NJDEP must approve the protocol prior to the test. Thereafter, the applicant must contact the NJDEP at least 30 days in advance of the test date so that the NJDEP can witness the test. Afterwards, the results of the stack test must be presented 1495 to the NJDEP within 30 days of the completion of testing. The stack test report must be reviewed and certified by either a licensed professional engineer or an industrial hygienist 1496 certified by the American Board of Industrial Hygiene.

Subchapter 8 air permit applications do not need to include information about "insignificant" sources unless such insignificant sources emit air contaminants through the same control device as emissions from a significant source. N.J.A.C. 7:27-8.4(g). N.J.A.C. 7:27-8.4(d). N.J.A.C. 7:27-8.4(d); see also N.J.A.C. 7:27-8.12 and discussion infra. N.J.A.C. 7:27-8.4(e). N.J.A.C. 7:27-8.4(f). N.J.A.C. 7:27-8.4(f)(1) - (2). N.J.A.C. 7:27-8.4(f)(5). N.J.A.C. 7:27-8.4(f)(6).

Air Pollution Control As is often the case, a facility may have more than one emissions source and the question becomes how many permit applications must be submitted. As a general matter, and similar to Title V permitting procedures, the applicant can organize emission sources for air permit 1497 application purposes based on some "logical grouping" approved by the NJDEP. Alternatively, the number of air permit applications is determined on the basis of how each emissions source is vented or, in the case of batch processing operations, how the product is 1498 made. Thus, a single emission source exhausting through one or more stacks requires a single air permit application; likewise, multiple emission sources exhausting through one or more common stacks or vents also require a single air permit application. Multiple emissions sources that exhaust through individual stacks or vents may either be separately permitted or may be "logically grouped" with the NJDEP7spermission. Batch processing operations in which two or more sources make up a process unit allow the applicant to include these sources in one 1499 permit application. The NJDEP has prepared specialized permitting procedure manuals for batch plants, pilot plants, and dual plants, and an applicant may follow these alternative permitting procedures in lieu of the generally applicable Subchapter 8 air permitting 1500 procedure. The NJDEP's rules require that any person applying for a preconstruction permit or permit revision include, as part of the permit application, NSPS and a NESHAP applicability and compliance demonstrations, if the proposed equipment or intended use of the proposed 1501 equipment falls within any source category to which a NSPS or NESHAP applies. If required by N.J.A.C. 7:22-8.5, the application must also include a protocol for conducting an air quality 1502 impact analysis, i.e., air dispersion modeling andlor risk assessment. The air permit application, registration, or notice, as required, must also list each air contaminant if the source operation's potential to emit an air contaminant is equal to or greater than the applicable reporting thresholds set forth in Tables A or B of Appendix 1 to the NJDEP air regulations or if the source operation, under normal conditions, emits air contaminants in amounts which may result in violation of the odor provisions of N.J.A.C. 7:27-8.3(j) and 7:271497 1498 1499 1500

1501 1502

N.J.A.C. 7:27-8.4(h). N.J.A.C. 7:27-8.4(h). N.J.A.C. 7:27-8.4(h). N.J.A.C. 7:27-8.4(s). See Technical Manual 1301 for batch plants and Technical Manual 1302 for pilot plants and dual plants. N.J.A.C. 7:27-8.4(i). N.J.A.C. 7:27-8.46).

New Jersey Environmental Law Handbook 1503

5. When listing emissions in an application, registration, or notice, each HAP emission must 1504 be separately identified. Each non-HAP emission can be listed separately or, if the air contaminant is a non-HAP VOC or a non-HAP particulate, emissions can be grouped by either 1505 total VOCs and/or total particulates. If the emitted air contaminant is both a HAP and a VOC or a particulate, then the air contaminant must appear separately as a speciated HAP and must 1506 also appear in any grouping of total VOCs or total particulates. The air permitting application requirements have similar provisions for the listing of raw materials. Each HAP raw material on the application, registration, or notice must be listed separately; non-HAP raw materials can 1507 either be listed separately or grouped with similar chemical and/or physical properties. 8.2.5 The Air Permit Application Review Process Following NJDEP's determination that an application for a preconstruction permitloperating certificate is complete, NJDEP commences the engineering review of the application. After the submission of the air permit application forms and supporting material, the BPP will assign the application a log number. With the log number in hand, an applicant can call the BPP and check with the "air permit writer," i.e. an engineer in BPP, and determine the status of the application review. The air permit writer makes the determination, sometimes with the assistance of the chief air quality engineer, as to whether the application incorporates state-of1508 The burden is on the applicant to demonstrate that the type or the-art or "SOTA" control. 1509 level of emission control to be utilized is SOTA. As discussed more fully below, an application will be denied if it does not meet reasonably available control technology (RACT), NSPS, prevention of significant deterioration 1510 (PSD), or other applicable federal or State requirements. The reviewer will also decide if modeling is required to determine the effect of the new or altered source on ambient air quality.

1511

Generally, since the regulations require the applicant to demonstrate compliance

N.J.A.C. 7:27-8.4(k). N.J.A.C. 7:27-8.4(m). N.J.A.C. 7:27-8.4(m). N.J.A.C. 7:27-8.4(m). N.J.A.C. 7:27-8.4(1). N.J.A.C. 7:27-8.12. N.J.A.C. 7:27-8.12. N.J.A.C. 7:27-8.14. N.J.A.C. 7:27-8.5(b).

Air Pollution Control with ambient air quality criteria, the NJDEP will require the applicant to conduct the modeling. In some cases the application may be directed to the Bureau of Technical Services, which will conduct the modeling. Applications will also be denied if an applicant fails to provide the 1512 1513 NJDEP with requested information or if an applicant fails to pay any outstanding fees. Often, the NJDEP will require stack testing by the applicant within 90 days of notice of 1514 approval of the application. In such cases, the operating certificate will generally not be issued until the stack test has been conducted and the facility has demonstrated that it is in compliance with regulatory and permit-specific terms and conditions. In some cases, the NJDEP will issue a 90-day or continuing temporary operating certificate upon approval of an application. A temporary certificate also may be issued to allow the NJDEP to inspect the new or altered equipment and to ensure that it complies with the application and conditions of the temporary certificate. Temporary certificates can be reviewed or continued for several years, however they may not extend beyond 5 years from the date of the effective date of the initial preconstruction permit. A temporary certificate has been held to be a license for which a company has a property interest such that the permittee must be entitled to a hearing before a decision is made to revoke a 1515

temporary certificate or not to grant a final 5-year operating certificate. 8.2.6 Air Quality Impact Analysis 1516 Air quality impact analyses are required for air permit applications where: The application is subject to the air quality impact analysis requirements (1) of 40 CFR Part 52; The proposed maximum allowable emissions of an air contaminant would (2) result in a significant net emission increase and: (i) the application is for a major facility; or (ii) the emission increase proposed in the application for any air contaminant by itself equals or exceeds the major facility threshold level; A State or federal rule requires that an air quality impact analysis be (3) conducted; or The NJDEP determines that an air quality impact analysis is required for (4) "an accurate assessment of the environmental impact of the proposed activities."

1512 1513 1514

1515

1516

N.J.A.C. 7:27-8.14(~). N.J.A.C. 7:27-8.14(d). N.J.A.C. 7:27-8.4(f) and -8.13(d). Dep't of Env't Protection v. Atlantic States Cast Iron Pipe Co., 241 N.J. Super. 591, 575 A.2d 895 (App. Div. 1990). N.J.A.C. 7:27-8.5(a).

New Jersey Environmental Law Handbook Both ambient air monitoring and a risk assessment are required if the NJDEP determines 1517 that an air quality impact analysis is required. The air quality impact analysis must demonstrate whether the maximum controlled emissions stated on the preconstruction 1518 application may cause: A violation of any federal or State ambient air quality standard; (1) An exceedance of any PSD increment; (2)

An increase in ambient air concentration that equals or exceeds the (3) significant air quality effect level set forth in N.J.A.C. 7:27-18.4(a) in a nonattainment area for any air contaminant; or A contravention of any other criterion established by the NJDEP to protect (4) human health and welfare and the environment. An air quality impact analysis and/or risk assessment must be conducted in accordance with a protocol approved in advance by the NJDEP. The protocol must take into account "all 1519 relevant site-specific and general factors." Such factors include, but are not limited to the 1520 following: (1) Land use analysis; (2) (3) (4)

Topography; Good engineering practice (GEP) stack height analysis; Use of the most recent version of USEPA approved computer modeling

software; Identification of the most appropriate meteorological data; and Consideration of all relevant averaging times. (6) 8.2.7 Operating Certificates Owners and/or operators of emission sources covered by a preconstruction permit(s) must (5)

1521

also obtain operating certificate(s) before operation of the source may legally commence. The air permit application form for a preconstruction permit also serves as the application form for the operating certificate. The NJDEP will issue both the preconstruction permit and the

1517 1518 1519 1520

1521

N.J.A.C. 7:27-8.5(b). N.J.A.C. 7:27-8.5(~). N.J.A.C. 7:27-8.5(d). N.J.A.C. 7:27-8.5(d); see also NJDEP Technical Manual 1002 (Guidance on Preparing Air Quality Modeling Protocol) and Technical Manual 1003 (Guidance on Preparing a Risk Assessment for Air Contaminant Emissions). N.J.A.C. 7:27-8.7(a).

Air Pollution Control 1522

operating certificate simultaneously in one document. Operating certificates, except for temporary operating certificates, expire 5 years from the date the preconstruction permit 1523 Temporary operating certificates, either a "90-day temporary operating certificate" or issued. a "continuing temporary operating certificate," are used by the NJDEP in cases where the NJDEP needs information to be obtained while the source is operating (e.g., stack test results) in 1524 order to issue a final operating certificate. 8.2.8 General Permits A general permit is a pre-approved authorization to both construct and operate specific 1525 classes of significant sources. If the source falls within a class of source approved for general permit status, and the owner or operator registers for the general permit and complies with the 1526 requirements of N.J.A.C. 7:28-8.8, then the registration is that source's permitlcertificate. General permits may be applied for electronically and are valid as soon as the registrant receives proof of the NJDEP's receipt of the registration form and fee. This can be the same day. General permits typically are valid for 5 years. General permits will be issued for the following . 1527 source categories: Single boilers with a maximum rated heat input of less than 10 million (1) BTUs per hour, combusting natural gas, No. 2 fuel oil, propane, diesel or kerosene; Emergency generators that operate less than 500 hourslyear; (2) (3) Storage and transfer of service station fuels at gasoline dispensing facilities; Stationary non-floating roof storage tanks storing VOCs; and (4) (5) Soil vapor extraction (SVE) systems or air strippers at gasolinecontaminated groundwater remediation sites.

1522 1523 1524 1525 1526 1527

N.J.A.C. 7:27-8.7(a). N.J.A.C. 7:27-8.7(~). N.J.A.C. 7:27-8.7(d). N.J.A.C. 7:27-8.8(a). N.J.A.C. 7:27-8.8(a). N.J.A.C. 7:27-8.8(~).

New Jersey Environmental Law Handbook 8.2.9 Standards for Issuing Permits In order for NJDEP to approve a preconstruction permitloperating certificate, permit revision, or a compliance plan change, the applicant must demonstrate that each significant 1528 source included in the application meets all of the following standards which may apply : (1) RACT;

(2) (3) (4)

NSPS; PSD; SOTA; and All other applicable State and federal air pollution control standards,

(5) codes, rules, or regulations. 8.2.10 "State of the Art" Technology (SOTA) Owners or operators proposing to construct, install, reconstruct, or modify equipment or control apparatus that are significant sources and whose potential to emit HAPS or any other air 1529 contaminants above specified rates must document SOTA emission control for the source. Importantly, in calculating a source's potential to emit for SOTA threshold level purposes, the removal/destruction efficiency of any control device serving the equipment is taken into 1530 account. SOTA has been interpreted to require "some degree of current use" and to be "not unreasonably costly in the light of the nature and utility of the industrial operation affected, as 1531 well as the harm which failure to use them would visit upon the environment." SOTA is the same as federal BACT in attainment areas, LAER in nonattainment areas, and MACT for 1532 hazardous air pollutants. For air contaminants emitted by equipment subject to NSPS, 1533 compliance with the NSPS satisfies SOTA.

1528 1529

1530 1531 1532

1533

N.J.A.C. 7:27-8.11. N.J.A.C. 7:27-8.12(a). SOTA threshold rates are established in Appendix 1, Tables A and B to the New Jersey air pollution control regulations. N.J.A.C. 7:27-8.12(d). Camvbell Foundrv Co. v. Sullivan, 119 N.J. Super 51,54,289 A.2d 801, 803 (App. Div. 1972). N.J.A.C. 7:27-8.12(e)(l), (2) and (3); see also In re Pennsauken Solid Waste Management Authority, 238 N.J. Super. 233, 569 A.2d 826 (App. Div. 1990); In re Stream Encroachment Permit No. 12400,231 N.J. Super. 443,555 A.2d 1123 (App. Div. 1989), certiJ:denied, 115 N.J. 70 (1989); In re NJPDES Permit No. NJ 0055247, 216 N.J. Super. 1, 522 A.2d 1002 (App. Div. 1987), certiJ:denied, 108 N.J. 185, 527 A.2d 1390 (1987). N.J.A.C. 7:27-8.12(e)(4).

Air Pollution Control For an air contaminant that is not subject to BACT, LAER, MACT, or NSPS, the applicant can document compliance with the SOTA requirement by: (i) use of a SOTA manual that applies to the source; (ii) if the source is eligible for a general permit, by registering the 1534 source; or (iii) a case-by-case SOTA determination. In performing a "top down" case-bycase SOTA analysis, the applicant must identify and evaluate air pollution control technologies or measures that may be applied to the emission source. These controls are not limited to control devices that have already been applied to other existing sources in the same source category, and must include measures applied to sources in similar source categories, innovative control technologies, modification of the process or process equipment, other pollution prevention 1535

measures, and combinations thereof. The most "effective" (i.e., in terms of capture and destruction efficiencies) air pollution control technology will be SOTA for the source unless the applicant can show that it should not apply for reasons of technical infeasibility, unreasonable 1536 environmental impacts on other media, economic impacts, or adverse energy impacts. 8.2.11 Conditions of Approval 1537 NJDEP has broad discretion to set conditions of approval. This includes the ability to change the conditions of approval of a certificate at the time of renewal of a temporary operating certificate, at the time of renewal of a 5 year operating certificate, or at any time during the period an operating certificate is in effect if the NJDEP determines that a change is necessary to 1538 protect human health or welfare or the environment. Upon request of the NJDEP, a permittee is required to submit "information relevant to the operation of equipment and control apparatus," including, but not limited to, a diagram of the facility with equipment and stack locations designations, records documenting the use of equipment, control apparatus, or other source operations including, but not limited to, production rates and hours of operation, and records documenting the dates when equipment or control apparatus were constructed or installed.

1539

1540

Significantly, NJDEP may include in the permit or certificate a compliance plan. All compliance plans will have monitoring, recordkeeping, and reporting requirements. Monitoring

1534 1535 1536 1537 1538 1539 1540

N.J.A.C. 7:27-8.12(e)(5). N.J.A.C. 7:27-8.l2(f). N.J.A.C. 7:27-S.l2(f)(2). See N.J.A.C. 7:27-8.13.

N.J.A.C. 7:27-8.13(b). N.J.A.C. 7:27-8.13(~).

N.J.A.C. 7:27-8.13(d).

New Jersey Environmental Law Handbook requirements can require periodic testing of process materials, source emissions, or ambient air concentrations and can also include requirements for the installation, operation, and maintenance 1541 of instruments and sensing devices. The NJDEP may require the monitoring of key parametric operating data, including, but not limited to, opacity, pH, air flow rate, pressure drop, 1542 and temperature. Any information contained in an approved application and any condition of approval 1543 thereof, are subject to enforcement.

8.2.12 Denials The APCA implementing regulations require the NJDEP to deny an application "if 1544 anything proposed in the application" would result in: A violation of any provision of N.J.A.C. 7:27-1 et seq.; (1) An exceedance of any federal or State ambient air quality standard; (2) An exceedance of any applicable PSD increment; (3) A violation of any NSPS; (4) A violation of any NESHAP, including a MACT standard; (5) A violation of a federal stack height or emission dispersion requirement; (6) A "contravention" of "other criteria" established by the NJDEP to protect (7) human health and welfare or the environment; A violation of any administrative order; or (8) A violation of any State or federal standard or requirement. (9) 8.2.13 Reporting Requirements At the NJDEP's request, any person holding a preconstruction permit or operating 1545 certificate must submit to the NJDEP "any record relevant to any permit or certificate." Such records must be submitted within 30 days of the NJDEP's request unless a longer time period is 1546 agreed upon. Persons submitting information pursuant to the NJDEP's authority under this section must certify to the accuracy of the submission in accord with the requirements of

1541 1542 1543

1544 1545 1546

N.J.A.C. 7:27-8.13(d). N.J.A.C. 7:27-8.13(d). N.J.A.C. 7:27-8.13(h). Note that this regulatory provision differs fi-om NJDEP statements in that enforcement will be based on the provisions contained in a permit's compliance plan, not the information contained in an air permit application. N.J.A.C. 7:27-8.14(a). N.J.A.C. 7:27-8.15(a). N.J.A.C. 7:27-8.15(a).

Air Pollution Control 1547

N.J.A.C. 7:27-1.39. The required certification is a two-part certification signed under the penalty for perjury by both the person "with direct knowledge of and responsibility for the 1548 information contained in the certified document" and a "responsible [company] official." 8.2.14 Permit Revocations The NJDEP is authorized to revoke a preconstruction permit or operating certificate under the following circumstances:

1549

The permittee uses or allows to be used equipment or control devices that (I) do not comply with the permit, certificate, or any applicable federal or State law, regulation, or rule; (2) The permittee takes an action which requires a permit revision, compliance plan change, 7-day notice, amendment, or change to a batch plant permit without complying with the applicable requirements; The owner or operator of the facility refuses to allow lawful entry by (3) authorized representatives of the NJDEP; The permittee fails to pay any penalty assessed in a final order of the (4) NJDEP; The permittee fails to pay any outstanding service fees within 60 days (5) receipt of the invoice or, in the case of an operating certificate renewal, fails to pay the renewal fee by the date of expiration of the certificate being renewed; The permittee fails to reimburse the NJDEP for reimbursable charges (6) incurred in connection with dedicated telephone lines or laboratory equipment; or The permittee fails to dispose of all aqueous and solid waste generated as (7) the result of the operation of equipment and control apparatus in a lawful manner. Moreover, the NJDEP may revoke its approval of a preconstruction permit or permit revision if the permittee does not begin the activities authorized by the permit or permit revision within 1 year from the date of its approval or discontinues the activities authorized by the permit 1550 or permit revision for a period of more than 1 year. The NJDEP must issue its notice of 1551 revocation in writing.

1547 1548 1549 1550 1551

N.J.A.C. 7:27-8.15(~). N.J.A.C. 7:27-1.39. N.J.A.C. 7:27-8.16(a). N.J.A.C. 7:27-8.16(b). N.J.A.C. 7:27-8.16(d).

New Jersey Environmental Law Handbook

8.2.15 Changes to Existing Permits and Certificates Persons desiring to change an existing permit or certificate are required to proceed by way of the "most comprehensive" process set forth in N.J.A.C. 7:27-8.17. The NJDEP has a four-tiered system for making changes to existing permits and certificates. Ranked in order of 1552 descending order of "comprehensiveness," they are: (1) Permit revisions; (2)

Compliance plan change;

(3) (4)

7-Day Notice; and Amendment.

Thus, for example, if the desired change could be processed as either a 7-day notice or a compliance plan change, the person must proceed by compliance plan change since it is more comprehensive than a 7-day notice. A. Permit Revisions Permit revisions are the most comprehensive method of changing an existing permit or 1553

certificate, and require the prior approval of the NJDEP. Permit revisions are required for any of the following actions: A request to increase a maximum allowable emission rate, including the (1) correction of a typographical error or inaccurate calculation if the change would result in a higher maximum allowable emission limit; An action that will result in increased actual emissions to a rate or (2) concentration greater than a maximum allowable emission rate or which will cause the emission of an air contaminant not previously emitted; The use of a new raw material not specified in the permit if the use would (3) result in the increase of actual emissions to a rate or concentration greater than a maximum allowable emission rate or which will cause the emission of an air contaminant not previously specified in the permit and certificate at a level that meets or exceeds Appendix 1, Tables A and B thresholds; An action that causes the source to become subject to a requirement that (4) did not previously apply; (5) A reconstruction; or Changes to existing stacks or chimney (e.g., replacement, stack height, (6) stack diameter, exit temperature, or volume) that would result in an increase in the

1552 1553

N.J.A.C. 7:27-8.17(b). N.J.A.C. 7:27:8.18.

Air Pollution Control ground level concentration of an air contaminant in areas to which the general public has 1554 access. In addition, the construction or installation of a new significant source, including control apparatus, requires proceeding by permit revision if there are existing, permitted sources on-site 1555 and the new source could be combined in one permit with the existing permitted sources. B. Compliance Plan Changes The second most comprehensive procedure for changing existing permits and certificates is the compliance plan change. The NJDEP has borrowed the "compliance plan" feature of Title V permits and now incorporates compliance plans into certain Subchapter 8 source permits. Like permit revisions, compliance plan changes require prior NJDEP approval. Changes which may proceed by way of compliance plan change include: (1) A proposed decrease in the frequency of testing, monitoring, recordkeeping, or reporting below the frequency required in the permit or certificate; A change in the monitoring method; (2)

A change in a parametric performance measure if the change would cause (3) the source to operate out of the established range for the parametric performance measure, the parametric performance measure has to be tested, monitored, recorded, or reported to the NJDEP under the terms and conditions of the permit, and the level, rate, or limit is not an emission limit; or A reduction in a source's potential to emit by decreasing the maximum (4) allowable emission rate, decreasing the hours of operation, or decreasing the maximum 1556 allowable production rate (e.g., batch weight). While a source can reduce its potential to emit at any time, such reduction in the source's potential to emit will not be effective until the NJDEP approves the compliance plan change 1557 thereby making the emission decrease "federally enforceable." C. 7-Day Notices A 7-day notice change allows a permittee to proceed with a change 7 days after 1558 submitting notice to the NJDEP, although the permittee does so at its own risk. If the NJDEP

1554 1555 1556 1557 1558

N.J.A.C. 7:27:8.18(a). N.J.A.C. 7:27:8.18(a)(7). N.J.A.C. 7:27-8.19(a). N.J.A.C. 7:27-8.19(a)(4). N.J.A.C. 7:27-8.20(a).

New Jersey Environmental Law Handbook decides that the change should have proceeded in a "more comprehensive" fashon (i.e., permit 1559 revision or compliance plan change), the permittee may be subject to an enforcement action. Permittees can proceed by 7-day notice in the following situations: The proposed action is a physical or operational change that is outside the (1) scope of activities of the permit, the action'has a potential to result in an increase in actual emissions but will not increase emissions over allowable limits, and the action will not involve changing stack characteristics in any way that would result in an increase in the ground-level concentration of an air contaminant in an area accessible to the general public; or A notice that an applicant plans to act at risk under the provisions of (2) 1560 N.J.A.C. 7:27-8.24 or 8.25. A 7-day notice cannot be used for a change that will result in emissions exceeding permit limits or result in the emission of a new air contaminant at a level which would cause the 1561 source's potential to emit to exceed the reporting thresholds of Appendix 1, Tables A and B. D. Amendments Permit amendments are the least comprehensive method of modifying an existing permit or certificate, and allow the permittee to proceed with the proposed change provided that the 1562 permittee submits notice to the NJDEP within 120 days after the change occurs. 1563 Amendments include: Changes in identifq.ing information (e.g., telephone number, owner's (1) agent, etc.); Changes in ownership of the source or facility; A change or redesignation of the numbering or naming system for (3) equipment and/or stacks; Certain kinds of stack changes; (4) (2)

The use of a new raw material that does not increase actual emissions, (5) does not cause the emission of a new air contaminant at a level exceeding the applicable

1559 1560 1561 1562 1563

N.J.A.C. 7:27-8.20(a). N.J.A.C. 7:27-8.20(b). (See Section 8.2.16, infra). N.J.A.C. 7:27-8.20(d). N.J.A.C. 7:27-8.21(a). N.J.A.C. 7:27-8.21(b).

Air Pollution Control

reporting threshold of Appendix 1, Tables A and B, and does not cause the source to become subject to any new air pollution control requirements. 8.2.16 Special Provisions for Construction but Not Operation

Manufacturers frequently face the problem of needing to construct or modify their plant to meet increased demand from customers while NJDEP completes its review of the necessary preconstruction permit application(s). N.J.A.C. 7:27-8.24 contains special provisions that allow an applicant to proceed with a construction, reconstruction, or installation of a new source, including control devices, while the NJDEP is reviewing the permit application. In order to avail itself of the special provisions allowing for construction to proceed while air permit application(s) are still "in house" at NJDEP, the applicant must: Submit a complete application to the NJDEP for the construction; (1) Only construct, reconstruct, install, and/or place the new or modified (2) source on footings or a foundation but not test or operate the source; and Perform the construction, reconstruction, installation, and/or placement in (3) accordance with the submitted application. In addition, the construction, reconstruction, installation, and/or placement cannot be 1564 prohibited by any federal requirement (e.g., PSD, MACT, or acid rain programs). In order to avail itself of the special provisions allowing for construction but not operation of a source while its air permit applications are pending, the applicant must notify the 1565 NJDEP in writing at least 7 days prior to beginning activities. Proceeding under these special provisions for construction, but not operation, is at the applicant's risk and nothing in the regulation limits the NJDEP7sreview, including a decision to deny the application or take an enforcement action if it is determined that the applicant's activities were not consistent with 1566 applicable law or the requirements of the special provisions. N.J.A.C. 7:27-8.25 contains similar provisions that allow applicants to proceed with the construction, reconstruction, installation, and operation of a control device while the application for such activities are under 1567 review at the NJDEP.

1564 1565 1566 1567

N.J.A.C. 7:27-8.24(a). N.J.A.C. 7:27-8.24(b). N.J.A.C. 7:27-8.24(c) and (e). N.J.A.C. 7:27-8.25.

New Jersey Environmental Law Handbook 8.3 TITLE V PERMITTING 8.3.1 Applicability One of the cornerstones of the 1990 amendments to the CAA was the creation of a nationally uniform operating permit program for major facilities. These operating permits are known as "Title V" operating permits since the authorization for such permits appeared in Title V of the 1990 amendments to the CAA. Title V operating permit applications are expensive and lengthy undertakings which require a multidisciplinary team of in-house staff and often outside consultants to prepare. A major facility is one that emits or has the potential to emit an air contaminant in an amount that equals or exceeds the following major facility threshold 1568 levels: .

Lead 10 tons per year Any single HAP 10 tons per year Any combination of HAPS 25 tons per year Oxides of Nitrogen 25 tons per year Volatile Organic Compounds 25 tons per year Carbon Monoxide 100 tons per year PM-10 100 tons per year 100 tons per year TSP 100 tons per year Sulfur Dioxide Any other air contaminant, except 100 tons per year Carbon Dioxide (COz) Many of the general provisions applicable to Title V operating permits are similar to the general provisions applicable to Subchapter 8 permits for significant minor sources. As an example, an applicant must submit a preconstruction permit to the BPP in order to construct or modify an emission source at a Title V facility. 8.3.2 Review Process Each operating permit application will be subject to extensive review. Once the NJDEP has determined that an application is administratively complete, it will review the application and prepare a draft permit. This draft permit will be subject to .a public comment period of no less than 30 days. Whenever there is a "significant degree of public interest," the NJDEP can 1569 schedule, in its discretion, a public hearing to review the draft permit. In addition to the general public, the NJDEP will give notice of the draft permit to the designated air pollution

1568

1569

N.J.A.C. 7:27-22.2. Note that only certain categories of sources are required to include their fugitive emissions when determining whether the facility is a major source required to apply for and obtain a Title V permit. N.J.A.C. 7:27-22.11(e).

Air Pollution Control 1570

control agencies of all contiguous States, plus States within 50 miles of the source. Each of these States will be allowed to comment on the draft permit. After the public comment period is 1571 ended, the draft permit must be sent to the USEPA for review and approval. The BPP may afford the applicant a chance to review the draft permit prior to the general public comment period. Oftentimes the applicant is only provided a short amount of time to review the draft Title V operating permit because the NJDEP has to meet certain deadlines for issuing Title V permits. Since Title V permits can often be on the order of hundreds of pages, applicants should ensure they have the adequate staffing necessary to review the draft Title V permit in short order. 8.3.3 Application and Permit Shields Once a Title V air permit application is submitted, the owner/operator of the covered facility is granted an "application shield," which shields the owner or operator fkom enforcement action and the assessment of penalties for operating the facility without a permit during the time an administratively complete application is being reviewed and processed. However, this shield 1572 does not apply to other legal requirements. Once issued, the owner and/or operator of the 1573

facility covered by a Title V operating permit is entitled to the "permit shield." The permit shield provides that compliance with the relevant conditions of the Title V permit is deemed to be compliance with the specifically applicable requirements that are in effect on the date of 1574 issuance of the draft Title V permit. 8.3.4 Compliance Plans The day-to-day, quarterly, semi-annual, and yearly monitoring, recordkeeping, and reporting requirements are contained in the Title V permit's compliance plan. These monitoring, recordkeeping, and reporting requirements can be extremely onerous and the art of negotiating a compliance plan is to reduce the frequency and technical sophistication of the monitoring, recordkeeping, and reporting as much as possible. Owners and operators of certain kinds of equipment may be able to convince the NJDEP that a continuous emissions monitor (CEMS) is, or should not be, required because existing parametric measures of equipment and control device 1575 performance are available. 1570 1571 1572 1573 1574 1575

N.J.A.C. 7:27-22.1 and -22.1 l(e). N.J.A.C. 7:27-22.12. N.J.A.C. 7:27-22.7. N.J.A.C. 7:27-22.17. N.J.A.C. 7:27-22.17. N.J.A.C. 7:27-22.9(c)(iv).

New Jersey Environmental Law Handbook 8.3.5 Compliance Certifications Perhaps the most nettlesome part of a Title V air permit is the required compliance 1576 certification. The owner or operator of a Title V facility is required to certify that the facility 1577 is operating in compliance with all applicable requirements. If the facility is not in compliance with all applicable requirements, then the owner or operator must report the non1578 In addition, the owner or operator of the facility must certify compliance on an compliance. 1579

annual basis after issuance of the Title V permit. 1580 The required certification is a "two-part" certification. The first certification requires the certification of an individual with direct knowledge and responsibility for the information 1581 contained in the certified document. The second certification must be made by a responsible official of the owner or operator of the Title V facility that he or she has personally examined and is familiar with the submitted information and all attachments and believes that the 1582 information is true, accurate, and complete. Thus, the responsible corporate official cannot ignore non-compliance. If the certifying official is aware of non-compliance and makes the 1583 certification anyway, significant civil and criminal consequences could attach.

9.0

REGULATION OF SPECIFIC POLLUTANTS In New Jersey, specific pollutants may come within one or more sets of federal 1584 regulations: federal New Source Performance Standards (NSPS), federal National Emission 1585 Standards for Hazardous Air Pollutants for source categories (NESHAPs), federal New Source Reviewprevention of Significant Deterioration (NSRIPSD), the federal Title IV Acid Rain Program, as well as under a variety of New Jersey pollutant-specific regulations including the SOTA and TXS programs. When a pollutant is subject to different emission limits, the most stringent emission limitation will apply.

N.J.A.C. 7:27-22.19(f) and (g). N.J.A.C. 7:27-22.19(f). N.J.A.C. 7:27-22.19(g). N.J.A.C. 7:27-22.19(f) - (g). N.J.A.C. 7:27-1.39. N.J.A.C. 7:27-1.39. N.J.A.C. 7:27-1.39. N.J.A.C. 7:27-1.39. 40 C.F.R. $62, et sea. 40 C.F.R. $61, et seq.

Air Pollution Control

In general, the NJDEP7s regulations include: (1) a general prohibition against air 1586 1587 (2) emissions control of (a) smoke and particulates from the combustion of fuel, pollution, 1588 (c) sulfur compounds, as well as the (b) particulates from manufacturing processes, 1589 1590 concentration of sulfur in liquid and solid fuels, (d) volatile organic compounds, (e) oxides 1591

1592

of nitrogen, and (f) toxic substances. 9.1 SULFUR IN F'UELS

The NJDEP7sregulations control the emission of sulfur from the combustion of fuels by two measures. First, sulfur emissions are regulated by setting maximum allowable percentages 1593 of sulfur in fuel depending on the grade of fuel oil and where the fuel oil is sold in the State. Alternatively, the regulations waive the sulfur content of fuel oil requirement if an applicant can demonstrate that the actual sulfur dioxide emissions are less than a specified amount based on 1594 the type of fuel oil consumed and the location of the company. Similar standards exist for 1595 solid fuels. 9.2 VOLATILE ORGANIC COMPOUNDS As part of the effort to control ground-level ozone, one of NJDEP7smost comprehensive 1596 This regulation, which covers regulations is the one designed to limit the emission of VOCs. virtually any conceivable activity or piece of equipment that is capable of causing the emission of VOCs, regulates emissions from, inter alia: 1597 (1) Storage tanks;

Air pollution is defined as the pressure of air contaminants in the outside atmosphere in such quantities and duration as may be injurious to human health or welfare, or the environment as would unreasonably interfere with the quality of life or property. N.J.A.C. 7:27-5, et seq N.J.A.C. 7:27-3, et sea. N.J.A.C. 7:27-6,

seq,

N.J.A.C. 7:27-9, et sea. and 7:27-10, & seq. N.J.A.C. 7:27-16, et sea. N.J.A.C. 7:27-19, et secj. N.J.A.C. 7:27-17, et sea N.J.A.C. 7:27-9.2, Table 1. N.J.A.C. 7:27-9.2(b) - (e). N.J.A.C. 7:27-10, et sea. N.J.A.C. 7:27-16.1, et sea. N.J.A.C. 7:27-16.2.

New Jersey Environmental Law Handbook 1598

Gasoline transfer operations; 1599 VOC transfer operations other than gasoline; 1600 Marine tank vessel loading and ballasting operations; 1601 Open top tanks and surface cleaners; 1602 Surface coating and graphic arts operations; 1603

Boilers: 1604 Stationary internal combustion engines; 1605 Stationary reciprocating engines; 1606 Asphalt plants; 1607

Flares; and 1608 "Other source operations." VOC sources that have actual or potential emissions of 25 tons per year or more must 1609 implement reasonably available control technology (RACT) controls. RACT is defined as the lowest emission limitation a source is capable of meeting by the application of air pollution control technology that is reasonably available considering technological and economic 1610 feasibility. As of April 25,2004, however, owners or operators of a source operation subject to a SOX emissions limit under Subchapter 16 may no longer comply with the emissions limit 161 1 through the use of discrete emission reduction (DER) credits.

N.J.A.C.7:27-16.3. N.J.A.C.7:27-16.4. N.J.A.C.7:27-16.5. N.J.A.C.7:27-16.6. N.J.A.C.7:27-16.7. N.J.A.C.7:27-16.8. N.J.A.C.7:27-16.9. N.J.A.C.7:27-16.10. N.J.A.C.7:27-16.11. N.J.A.C.7:27-16.13. N.J.A.C.7%'-16.16. N.J.A.C.7:27-16.1A. Id. -

N.J.A.C.7:27-16.1A(f).

Air Pollution Control

Subchapter 16 has special relevance for synthetic organic chemical manufacturers and batch plant operators whose equipment and processes are covered by the category of "other 1612 "Source operations" to which N.J.A.C. 7:27-16.16 applies are not limited source operations." 1613 to those involved in manufacturing and include, without limit, the following: (1) Agitators; (2)

Autoclaves;

(3) (4) (5) (6) (7) (8) (9)

Bakery ovens; Blenders; Centrifuges; Distillation processes; Driers; Extruders; Fermentation processes; Fiberglass boat or vessel manufacturing operations; Fiberglass product manufacturing operations; Foam blowing operations; Fumigation chambers; Mills; Mixers; Ovens;

(10) (1 1) (12) (13) (14) (15)

(16) (17) (18) (19) (20)

Reactors; Receivers; Roasters; Sterilization operations; and Synthetic fiber manufacturing operations.

(2 1) VOC emissions from "source operations" are subject to control requirements, which set maximum allowable VOC emissions based on either a percentage of process emissions by 1614 weight or, in the case of continuous or batch cycle emissions, on a poundhour basis. Common VOC control equipment include thermal or catalytic oxidizers, carbon absorbers, or

1612

1613 1614

N.J.A.C. 7:27-16.16. A "source operation" is defined as any process or any identifiable part thereof that emits or can reasonably be anticipated to emit any air contaminant either directly or indirectly into the outdoor atmosphere. A source operation may include one or more pieces of equipment or control apparatus. N.J.A.C. 7:27-16.1. N.J.A.C. 7:27-16.16(b). N.J.A.C. 7:27-16.16(c) and (d).

New Jersey Environmental Law Handbook some other control device or measure. Finally, the VOC control regulations require leak detection and repair for petroleum refiners, natural gaslgasoline processing plants, synthetic 1615 organic chemical or polymer plants, or any other chemical plant that is a major VOC facility. 9.3 OXIDES OF NITROGEN Oxides of nitrogen (NOx), along with VOCs, are the prime ingredients in the creation of ground-level ozone or smog. All major sources of NOx, defined to be those facilities that emit 1616 or have the potential to emit 25 tons per year or more, must install RACT. The NOx RACT regulations establish specific emission limits, expressed in pounds per million BTUs, for utility 1617 1618 boilers, stationary combustion turbines, industrial/commercial/institutional boilers and 1619 1620 1621 other indirect heat exchangers, stationary reciprocating engines, asphalt plants, and 1622 glass manufacturing furnaces. Owners and/or operators of facilities subject to NOx RACT, especially facilities with multiple NOx sources, have flexibility in complying with NOx RACT. In lieu of meeting the regulatory emission limits established in the NOx RACT rule, owners andlor operators may submit an emissions averaging plan, an alternative maximum allowable emission rate for a unit, 1623 or a plan for phased compliance for a unit. Any alternative approaches to complying with 1624 As of April 25, 2004, however, owners or NOx RACT must be approved by the NJDEP. operators of a source operation subject to a NOx emissions limit under Subchapter 19 may no longer comply with the emissions limit through the use of discrete emission reduction (DER) 1625 credits.

N.J.A.C. 7:27-16.18. N.J.A.C. 7:27-19 et seq. N.J.A.C. 7:27-19.4. N.J.A.C. 7:27-19.5. N.J.A.C. 7:27-19.7. N.J.A.C. 7:27-19.8. N.J.A.C. 7:27-19.9. N.J.A.C. 7:27-19.10. N.J.A.C. 7:27-19.3(f). Id. -

N.J.A.C. 7:27-19.3(g).

Air Pollution Control The New Jersey Legislature expanded the NOx control program in 1999 with its adoption 1626 of a State NOx budget allowance and trading system. The NOx Budget Program provides for a trading mechanism which allows intrastate and interstate trading of tradeable units - i.e. 1627 allowances. The program set forth in Subchapter 3 1 is in accord with USEPA's requirements 1628

at 40 C.F.R. 51.121 for mitigating the interstate transport of both ozone and nitrogen oxides. The USEPA rulemaking was the result of work done by the Ozone Transport Commission's

(OTC) and the Ozone Transport Assessment Group (OTAG) in attempting to reduce the longrange interstate transport of ozone and NOx from the midwestem United States to the northeastern United States. 9.4 TOXIC SUBSTANCES The NJDEP implements an air toxics control program that applies to any activity, equipment, or source operation that is capable of emitting State-defined air toxics (TXS). Operations and equipment covered by the New Jersey TXS program include storage tanks, transfer operations, open top tanks, surface cleaning, surface coating, organic chemical manufacturing, pharmaceutical manufacturing, petroleum refining, and miscellaneous organic 1629

solvent uses. The NJDEP has identified 11 compounds as Group I toxic substances (TXS) and two 1630 compounds as Group I1 TXS. The New Jersey TXS Group I and Group I1 compounds are: GROUP I

1626 1627 1628 1629 1630

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (1 1)

Benzene (Benzol); Carbon tetrachloride (Tetrachloromethane); Chloroform (Trichloromethane); Dioxane (1,4-Diethylene Dioxide); Ethylenimine (Aziridine); Ethylene dibromide (1,2-Dibromethane); Ethylene dichloride (1,2-Dichloroethane); 1,1,2,2- Tetrachloroethane; Tetrachloroethylene (Perchloroethylene); 1,1,2- Trichloroethane (Vinyl trichloride); and Trichloroethylene (Trichlorethene).

N.J.A.C. 7:27-3 1.1. N.J.A.C. 7:27-31, et sea.

Id. N.J.A.C. 7:27-17.8. N.J.A.C. 7:27-17.3.

New Jersey Environmental Law Handbook GROUP I1

(1) (2)

Methylene Chloride (Dichloromethane); and 1,1,1 Trichloroethane (Methyl Chloroform).

Any person who emits any Group I TXS or Group I1 TXS from any source operation, storage tank, or transfer operation must register with the NJDEP and provide certain information 1631 with regard to its operation. Such information includes vessel sizes, transfer rates, emission 1632 rates, and operating procedures. The NJDEP has reserved the right to notify the person emitting any TXS that the subject equipment or operating procedures do not represent advances in the state-of-the-art (SOTA) and can order the person to reduce its TXS emissions to SOTA 1633 levels. Any registrant so notified by the NJDEP has 3 months within which to advise the NJDEP of what measures it intends to take to reduce its TXS emissions to a rate or 1634 concentration equivalent to SOTA and the schedule for completing the measures. In addition to possible SOTA control, New Jersey's TXS program establishes minimum design controls for the discharge of Group 1 TXS, including a minimum stack height of 40 feet above grade, an emission point at least 20 feet higher than any area of human use or occupancy, 1635 and the emission point must be directed vertically upward. Group I1 TXS are subject, at a 1636 minimum, to RACT control requirements. Practitioners are advised to consult the regulatory 1637 exceptions to the TXS program requirements. 10.0

NEW SOURCE REVIEW AND EMISSIONS OFFSETS The phrase "New Source Review" (NSR) is shorthand for a complex set of rules

governing the construction, reconstruction, or modification of new or existing equipment or control apparatus in nonattainrnent areas. If an application to construct, reconstruct, or modify equipment or control apparatus at a facility triggers NSR review, then the applicant may have to install federal Lowest Achievable Emission Rate (LAER) controls, and purchase and transfer to the NJDEP emission offsets.

1631 1632 1633 1634 1635 1636

1637

N.J.A.C. 7:27-17.3(a). Id. N.J.A.C. 7:27-17.3(b). N.J.A.C. 7:27-17.3(~). N.J.A.C. 7:27-17.4(a). N.J.A.C. 7:27-17.4(c). Practitioners should consult the federal NESHAPs for souce categories at 40 C.F.R. (j 63 et sea which may require more stringent MACT (maximum achievable control technology) controls. N.J.A.C. 7:27-17.9.

Air Pollution Control

The NSR provisions were conceived by the federal government as the means by which existing older sources, including those "grandfathered" from other air pollution control requirements, would be brought into the modern era of air pollution control. NSR also applies to new equipment and to existing, non-grandfathered equipment which are being modified. One of the keys to understanding NSR is to understand what a "modification" is. A modification means "any physical change in, or change in the method of operation of, existing equipment or control apparatus that increases the amount of any air contaminant emitted by that equipment or control apparatus or that results in the emission of any air contaminant not previously emitted. This term 1638 shall not include normal repair and maintenance.'' The starting point for New Jersey's NSR rule applicability determination is deciding whether a facility has the potential to emit the following contaminants at or above the 1639 corresponding thresholds: (1)

Carbon Monoxide

100 tons per year

(2)

PM-10

100 tons per year

(3)

TSP

100 tons per year

(4)

Sulfur Dioxide

100 tons per year

(5)

Nitrogen Oxides

25 tons per year

(6)

VOCs

25 tons per year

(7)

Lead

10 tons per year

New Jersey's program likewise applies to any proposed emission increase at a facility 1640 which by itself equals or exceeds these threshold levels. If a facility meets either of these two thresholds, the applicant then must determine whether any allowable emissions proposed in the application would result in a significant net emission increase for the following contaminants of 1641 the following levels:

1638 1639 1640 1641

(1)

Sulfur dioxide

40 tons per year

(2)

TSP

25 tons per year

(3)

PM-10

15 tons per year

(4)

NOx

25 tons per year

N.J.A.C. 7:27-18.1. N.J.A.C. 7:27-18.2(a). N.J.A.C. 7:27-18.2(a)(2). N.J.A.C. 7:27-18.7 Table 3 "Significant Net Emission Increases."

New Jersey Environmental Law Handbook (5)

co

100 tons per year

(6) (7)

pb VOCs

0.6 tons per year

25 tons per year

If a facility (1) meets either of the first two thresholds; (2) the proposed emission increase is allowable and exceeds the significant net emission limit level for any of the respective criteria pollutants; and (3) is either in a nonattainment area for the respective criteria pollutant or is in an attainment area for the respective criteria pollutant but the proposed emission increase will result in an increase in the ambient concentration of the respective criteria pollutant above the "significant" air quality impact levels, then New Jersey's new source review requirements must 1642 be complied with. In addition, even if a facility is in an attainment area, it must still comply with NSR requirements if the proposed emission increase in the application would result in an increase of the ambient concentration of a respective criteria pollutant that equals or exceeds the significant air quality impact level and also results in a violation of an applicable NAAQS or 1643 NJAAQS as determined by an air quality impact analysis. Facilities oftentimes seek to avoid NSR by demonstrating a decrease in emissions during the "contemporaneous period," which is usually the 5-year period prior to commencement of 1644 Alternatively, NSR compliance may be achieved by creating creditable construction. 1645 emissions reductions which may be used to offset emissions increases. The creation and use I646 of such credits is subject to complex regulation.

11.0

RELEASE REPORTING REQUIREMENTS Owners or operators of an air contamination source from which there is an unpermitted 1647 release are required to notify the NJDEP. However, owners or operators from whose equipment an unpermitted release occurs may be entitled to an affirmative defense to liability for penalties for a violation of a condition, emission rate, limit, or standard imposed by a permit if 1648 the release is the result of any of the following:

1642 1643 1644 1645 1646 1647 1648

N.J.A.C. 7:27-18.2(b). N.J.A.C. 7:27-18.2(b)(3). N.J.A.C. 7:27-18.1. N.J.A.C. 7:27-18.5. N.J.A.C. 7:27-18.5,18.6 and 18.8. N.J.S.A. 26:2C-19.4. N.J.S.A. 26:2C-19.2(a)

Air Pollution Control

(1)

Equipment malfunction; (2) Equipment start-up; (3) Equipment shutdown; or The performance of necessary equipment maintenance. (4) However, in order to be eligible for the affirmative defense, the owner or operator must notify the NJDEP by 5:00 p.m. of the second full calendar day following the unpermitted release or, if due diligence was exercised, by 5:00 p.m. of the second full calendar day after becoming 1649 aware of the unpermitted release. A detailed report of the release must be submitted within 30 days after the initial reporting, and must provide information as to the cause of the release, 1650 and demonstrate, inter alia: That the facility was being operated with due care at the time of the (1) release; The release was not the result of operator error or failure to maintain the (2) equipment with due care; All reasonable steps were taken to minimize the unpermitted.release at the (3) time of the release; and If the release resulted from a malfunction, the malfunction is not a part of (4) a recurrent pattern of malfunction. 12.0

ENFORCEMENT AND PENALTIES

The NJDEP has broad enforcement powers under the APCA and generally utilizes that power to its maximum. Enforcement of the APCA generally is accomplished through inspections or review of reports submitted by the permittee. The NJDEP, for enforcement purposes, is broken into three regional offices in which enforcement personnel are stationed. In addition to NJDEP personnel, local County Boards of Health are also authorized to inspect facilities and conduct enforcement activities. 12.1 INVESTIGATORY POWERS The APCA states that the NJDEP may "enter and inspect any building or place, except private residences, for the purpose of investigating an actual or suspected source of air pollution

1649 1650

N.J.S.A. 26:2C-19.2(b) Id.; see Department of Env. Protection v. Alden Leeds, Inc., 95 N.J.A.R.2d (EPE) 137 (1995), aff d in part, rev'd in part, 97 N.J.A.R.2d (EPE) 1, cert. Granted 149 N.J. 143, affd in part, rev'd in part, 153 N.J. 272 (1998).

New Jersey Environmental Law Handbook

and ascertaining compliance or noncompliance with any code, rule, and regulations of the ,,I651 NJDEP. 12.2 CIVIL ENFORCEMENT PROCEDURES Once the NJDEP determines that an alleged violation has occurred, it may pursue several courses of action. Most commonly, the NJDEP issues either a Notice of Violation (NOV) or an Administrative Order and Notice of Civil Administrative Penalty Assessment (AONOCAPA). A NOV is basically an AONOCAPA without the penalty assessment. An AONOCAPA briefly states the factual allegations and provisions of the APCA which have been violated, specifies a cease and desist date by which the violation must be corrected, and sets forth a penalty 1652 assessment. Depending on the severity of the violation, the penalty can range fiom several hundred dollars for a paperwork violation to millions of dollars for daily violations of regulatory 1653 or permit-based emission limits. If a violation is of a continuing nature, each day in which it 1654 continues can result in an additional violation with a separate penalty assessment. The maximum penalty which may be assessed under authority of the APCA is $10,000 for the first offense, $25,000 for the second offense, and not more than $50,000 for the third and 1655 each subsequent offense. For the purposes of penalty assessment, each day is considered a 1656 separate offense. The NJDEP has promulgated penalty matrices, which include penalty 1657 enhancing and mitigating factors. In 1995, the New Jersey Legislature passed the "Grace Period Law" for "minor I658 violations." The Grace Period law is not limited to air pollution control violations and is available for most other environmental programs. Under the Grace Period law, a person is afforded a limited period of time to correct a "minor" violation in order to avoid the imposition of a penalty that otherwise would be imposed for the violation. In order to implement the program for air pollution matters, NJDEP amended its air pollution civil administrative penalty

N.J.S.A. 26:2C-9b(4). N.J.S.A. 26:2C-14. N.J.A.C. 7:27A-3.1, et sea N.J.S.A. 26:2C-14. N.J.S.A. 26:2C-19.

Id. N.J.A.C. 7:27A-3.1, et sea. N.J.S.A. 13:lD-125.

Air Pollution Control 1659

regulations in June 2005 to classify specific offenses as either "minor" or "non-minor." If the violation identified in the penalty table bears the letter " M , the offense is considered a minor violation for which a penalty can be avoided if the NJDEP's requirements are met. If the violation is identified with a "NM," the offense is a non-minor violation and is not subject to a grace period. In general, offenses NJDEP classifies as "minor" are viewed by the NJDEP as posing a minimal risk to human health and the environment. For such offenses, the NJDEP will issue a notice to the allegedly responsible person that a violation has occurred. The notice will advise that the person has 30 days to correct the violation provided that the following conditions are met: 1. The violation does not result from the person's purposeful, knowing, reckless, or criminally negligent conduct; 2. The violation has existed for less than 12 months prior to its discovery by the NJDEP or a local governmental agency; 3. For alleged permit violations, the person has not been cited for violating the same permit requirement by the NJDEP or local governmental agency within the preceding 12-month period; 4. For non-permit violations, the person responsible has not been cited by the NJDEP or local governmental agency for the same or substantially similar violation within the preceding 12-month period; and 5.

The current violation is not indicative of pattern of illegal conduct as evidenced by the NJDEP's or a local governmental agency's prior citation of the responsible party for the 1660 same or similar violations. For "non-minor" violations, a party has 20 days from the receipt of the administrative order and notice of civil administrative penalty assessment to appeal the order and file a request 1661

1662

for an administrative hearing. This time limit may not be enlarged by the NJDEP. Generally, the order and hearing request will be deemed to be a contested case which, under the New Jersey Administrative Procedure Act, requires that the case be heard before an

1659 1660 1661 1662

N.J.A.C. 7:27A-3.1, et seq. N.J.A.C. 7:27A-3.10(s). N.J.S.A. 26:2C-14.1;N.J.A.C. 7:27A-3.4. Midland Glass Co. v. De~artmentof Env. Protection, 136 N.J. Super 194,345 A.2d 353 (App. Div. 1976), certif. denied, 73 N.J. 65,372 A.2d 330 (1977).

New Jersey Environmental Law Handbook 1663

administrative law judge and not by the NJDEP itself. If a hearing request is not filed, the 1664 order becomes final after 20 days, and the assessed penalty must be paid at that time. Importantly, merely petitioning for an administrative hearing does not operate as an automatic stay of the injunctive part of an AONOCAPA. During the pendency of any hearing, the APCA provides that the ordered party may petition the NJDEP for a stay of the terms of the 1665 order. The NJDEP has discretion to issue a stay of the terms of the order until the hearing is held. The NJDEP could also refer the matter to the Office of Administrative Law for that 1666 determination. Should a stay be denied at that level, the ordered party may file an interlocutory appeal to the Superior Court Appellate Division for a review of the denial of the stay.

1667

Although the issuance of an AONOCAPA is by far the most common enforcement mechanism used by the NJDEP, it is by no means the only one. To prevent violations of its regulations, the NJDEP has the power to institute a civil action to seek injunctive or other 1668 1669 appropriate relief. The NJDEP may also seek penalties in a judicial action. 12.3 ROLE OF LOCAL, COUNTY, REGIONAL ENVIRONMENTAL AGENCIES Any municipal or county ordinance regulating air pollution that is more stringent than the APCA or its regulations and that was in effect prior to the effective date of the amended Act (August 2, 1995), continues to be operable with full force and is not superseded by the 1670 APCA. After the effective date of the APCA, however, a municipality or county cannot 1671 adopt any ordinance or regulation in the area of air pollution control. The 1995 Amendments to the APCA also prohibited all local regulation of facilities subject to the operating permit program, as well as research and development facilities, regardless of whether the ordinance pre-

N.J.S.A. 52:14F-5(e), (f), (g);N.J.A.C. 1:l-1.1, et sea. N.J.S.A.26:2C-14.1.

Id. N.J.A.C. 1:l-12.6(~). N.J. Ct.R. 2:2-3. N.J.S.A.26:2C-19(a). N.J.S.A. 26:2C-19(d). N.J.S.A.26:2C-22(a). Id. -

Air Pollution Control 1672

dated the amendments. In addition, where local authorities are allowed to continue to 1673 regulate air pollution sources, the fees that they can charge are limited to $1,000 per year. It is not uncommon to find that a municipal Board of Health has promulgated an ordinance regulating some aspect of air pollution. That ordinance may predate the amended APCA and may not be as stringent as the APCA. On the other hand, the ordinance may have been adopted after the effective date of the amended Act. Therefore, in enforcement actions by municipal authorities it is important to determine the date of passage of the ordinance, whether the regulation is more stringent than the State counterpart and, if promulgated after the effective date of the APCA, whether it has received approval of the NJDEP. If the local ordinance has not met the requirements of the APCA, it may be subject to attack under a preemption doctrine. The APCA also limits the maximum fine that can be assessed by any such governing body to no 1674 more than $2,500. 12.4 ROLE OF USEPA AND FEDERAL ENFORCEMENT In addition to State and local enforcement, owners and operators are subject to USEPA enforcement for violation of the CAA, its regulations, as well as all State requirements contained in New Jersey's SIP. The USEPA can proceed against the owners or operators of emission 1675 sources in a variety of ways that include: (1) Issuing orders; Issuing an administrative penalty order; (2) Bringing a civil action; and (3) (4)

Requesting that the United States Attorney General commence a criminal

action. In addition, owners and operators of emission sources are also vulnerable to civil actions for injunctive and monetary relief commenced and prosecuted by citizens and known as "citizen 1676 suits." 12.5 CRIMINAL PENALTIES Owners and operators of air contamination sources are also subject to criminal 1677 prosecution under the APCA. Any person who "purposely or knowingly" violates the APCA 1672 1673 1674 1675 1676 1677

N.J.S.A.26:2c-22(c). N.J.S.A.26:2C-22(b). N.J.S.A.26:2C-22(a). 42 U.S.C. $7413. 42 U.S.C. •˜ 7604. N.J.S.A. 26:2C-19(f).

New Jersey Environmental Law Handbook or any regulation or order issued under the authority of the APCA is guilty of a crime of the third 1678 degree. Any person who purposely or knowingly violates a federally mandated air pollution control requirement, operating permit condition, or any fee or filing requirement imposed in connection with an operating permit is guilty of a crime of the third degree, the penalty for which 1679 Any person who purposely may include an enhanced fine of $10,000 per day per violation. or knowingly makes any false material statement (which can include a Title V compliance certification) in any form, notice, statement, or report required in connection with an operating permit is also guilty of a crime of the third degree, the penalty for which may include an 1680 enhanced fine of $10,000 per day per violation. Any person who "recklessly" violates the 1681 APCA is guilty of a fourth-degree crime.

1678 1679 1680 1681

N.J.S.A.26:2C-19(f)(l). N.J.S.A.26-2C-19(f)(2). N.J.S.A.26-2C-19(f)(3). N.J.S.A.26:2C-19(f)(4).

CHAPTER VII WATER POLLUTION CONTROL AND SUPPLY WATER POLLUTION CONTROL PROGRAM COMPONENTS AND OVERVIEW The regulation of water pollution in New Jersey is governed by the Water Pollution I682 Control Act (the Act or the New Jersey Act), which prohibits the discharge of any pollutant into the waters of the State without a valid permit. Its purpose is to restore, enhance, and maintain the integrity of New Jersey's waters. On May 23, 1990 the State enacted amendments to the Act ("1990 Amendments"), otherwise known as the Clean Water Enforcement Act, that drastically changed the enforcement and other provisions of the Act. In 1997, NJDEP adopted a set of four rules that together would comprehensively reform its water resources management program. The four interrelated proposals included substantial amendments to the Water Pollution Control Rules, the Water Quality Management Planning Rules, the Surface Water 1683 Quality Standards, as well as the New Jersey Pollution Discharge Elimination System Rules. The Comprehensive Water Resources Management Program adopted by the NJDEP 1684 reflects a focus on a watershed-based approach to permitting. This approach is intended to allow for a cooperative partnership to be formed among the NJDEP, the regulated community, and other interested parties to determine and implement the best possible ways to achieve water 1685 quality goals. The watershed approach provides the NJDEP with a sound scientific basis to assess and evaluate pollution from all sources (agricultural inputs, municipal discharges, industrial discharges, ground water inputs, storm water, etc.), assess the implications of various allocation scenarios, and make decisions regarding the most prudent and effective ways to 1686 control the pollution from all contributing sources. The regulatory framework implemented in 1997 remains in place today. 1.0

1682 1683 1684 1685 1686

N.J.S.A. 58:lOA-1 et seQ. N.J.A.C. 7:9,7:9B,7:14A, 7:15. 28 N.J.R. 382 (Feb. 5,1996).

Id. 28 N.J.R. 386 (Feb. 5, 1996). It is significant to note that this watershed-based approach represents a significant departure from the previous site-specific approach utilized by the NJDEP.

New Jersey Environmental Law Handbook

A primary goal of the Act is to provide the NJDEP with sufficient authority, as required 1687 by the federal Water Pollution Control Act (the "Clean Water Act" or CWA, to qualify to administer the CWA's discharge permit program. To this end, the NJDEP developed a regulatory program which governs discharges of pollutants to surface waters, including discharges onto land from which a pollutant might flow into surface waters, and which incorporates all the necessary requirements of the Clean Water Act. As a result, the USEPA has delegated to the 1688 NJDEP its authority to administer the federal water pollution program. 1689 The Act broadly defines the terms "pollutant" to include almost any released material 1690 or discarded waste; "discharge" to include direct and indirect releases to waters of the State 1691 and to municipal treatment works; and "waters of the State" to include surface water and groundwater. In addition to regulating discharges to surface waters pursuant to the CWA, the NJDEP's regulatory program extends to groundwater releases by prohibiting discharges to groundwater without a permit. The NJDEP's regulatory program also governs the discharge of industrial pollutants to municipal or privately owned treatment works. A "treatment works" is defined 1692 as: any device or system whether public or private, used in the storage, treatment, recycling, or reclamation of municipal or industrial waste of a liquid nature including intercepting sewers, outfall sewers, sewage collection systems, cooling towers and ponds, pumping, power and other equipment and their appurtenances;

33 U.S.C. $1251 et seq. 47 Fed. Reg. 17,331 (Apr. 22, 1982). The Act defines "pollutant" as "any dredged spoil, solid waste, incinerator residue, sewage, garbage, refuse, oil, grease, sewage sludge, munitions, chemical wastes, biological materials, radioactive substance, thermal waste, wrecked or discarded equipment, rock, sand, cellar dirt, and industrial, municipal or agricultural waste or other residue discharged into the waters of the State." N.J.S.A. 58:lOA-3n. The 1990 Amendments added both hazardous and non-hazardous pollutants to the definition of "pollutant," id., added a definition for "hazardous pollutant," N.J.S.A. 58:lOA-3u, and amended the definition of "toxic pollutant" N.J.S.A. 58: 10A-3r, to include pollutants identified pursuant to the CWA. The Act defines "discharge" as "an intentional or unintentional action or omission resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, or dumping of a pollutant into the waters of the State, onto land or into wells from which it might flow or drain into said waters or into waters or onto lands outside the jurisdiction of the State, which pollutant enters the waters of the State. 'Discharge' includes the release of any pollutant into a municipal treatment works." N.J.S.A. 58: 10A-3e. The Act defines "waters of the State7' as "the ocean and its estuaries, all springs, streams and bodies of surface or ground water, whether natural or artificial, within the boundaries of this State or subject to its jurisdiction." N. J.S.A. 58: 10A-3t. N.J.A.C. 7: 14A-1.2.

Water Pollution Control and Supply extensions, improvements, remodeling, additions, and alterations thereof; elements essential to provide a reliable recycled supply such as standby treatment units and clear well facilities; and any other works including sites for the treatment process or for ultimate disposal of residues resulting from such treatment. Additionally, "treatment works" means any other method or system for preventing, abating, reducing, storing, treating, separating, or disposing of pollutants, including storm water runoff, or industrial waste in combined or separate storm water and sanitary sewer systems. In sum, the New Jersey Act and the regulations promulgated by the NJDEP govern the discharge of any industrial pollutant to any water-related medium, either surface or groundwater, or to a sewage treatment system.

PERMIT PROGRAM The NJDEP regulates water pollution primarily by requiring that a New Jersey Pollutant Discharge Elimination System (NJPDES) permit for all discharges, unless specifically exempted by the Clean Water Act or its regulations. The regulations also require that no person may "build, install, modify, or operate any facility for the collection, treatment, or discharge of any pollutant, except in conformance with the Treatment Works Approval (TWA) requirements contained in 1693 N.J.A.C. 7:14A-22 and 23." While specific permits for discharges to surface water, groundwater, or treatment works may incorporate other regulations or include specialized conditions, certain requirements apply to all NJPDES permits. In general, all NJPDES permits must contain detailed conditions which 1694 ensure compliance with all applicable federal and State effluent limitations and water quality 1695 standards. Permits must also include time schedules leading to compliance with State and federal regulations for the installation, maintenance, and use of discharge monitoring equipment or methods. In addition, the permit may stipulate periodic reporting requirements for discharges 1696 to surface waters or groundwater. 2.1 REPORTING REQUIREMENTS The 1990 Amendments increased the reporting requirements. Significant indirect users (see Section 2.7.2), major industrial users, and local agencies must submit discharge monitoring

2.0

1693 1694

1695 1696

N.J.A.C. 7:14A-2.l(e). An "effluent limitation" is "any restriction on quantities, quality, rates and concentration of chemical, physical, thermal, biological, and other constituents of pollutants established by permit, or imposed as an interim enforcement limit..." N.J.S.A. 58:10A-3f. N.J.S.A. 58:10A-6f(l). N.J.S.A. 58:lOA-6f(5).

New Jersey Environmental Law Handbook 1697

reports for discharges to surface waters on a monthly basis. Moreover, even if a permittee is not in a category with mandatory reporting requirements, it may have to file a report if in any 1 1698 (2) fails to submit a completed discharge month it: (1) commits a "serious violation"; monitoring report; (3) does not contest or fails to successfully contest the assessment of a civil administrative penalty; or (4) exceeds an effluent limitation for the same pollutant from the same 1699 The NJDEP or a local agency to which the discharge point for 4 out of 6 consecutive months. NJDEP has delegated its authority may restore the original reporting requirements stipulated in the permit if the permittee has not violated any conditions leading to the mandatory reporting 1700 Finally, a permittee is required to report the requirement for 6 consecutive months. occurrence of any "serious violation" within 30 days of the incident. This report must include a statement that the permittee understands the civil administrative penalties required to be assessed for "serious violations," and an explanation of the nature of the violation and the measures taken 1701 to remedy its cause or prevent its recurrence. 1702 All DSW permittees must report unpermitted discharges. These reporting obligations are discussed in detail in Section 3.1.3 of Chapter I. 2.2 APPLICATION PROCESS The NJDEP permitting process begins with the submission of a discharger's 1703 The NJDEP then tentatively decides whether to issue a permit or to deny the application. application. If the NJDEP tentatively decides to issue a permit, it prepares a draft permit 1704 The NJDEP then gives notice to the public of the draft containing proposed conditions.

Id. A "serious violation" is "an exceedence of an effluent limitation for a discharge point source set forth in a permit, administrative order, or administrative consent agreement . . . by 20 percent or more for a hazardous pollutant, [as defined in the Act] or by 40 percent or more for a nonhazardous pollutant [also as defined in the Act]." N.J.S.A. 58:lOA-3(v). N.J.S.A. 58:lOA-6f(9). Id. N.J.S.A. 58: 10A-6f(10). N.J.A.C. 7:14A-6.10. A prospective applicant may, however, request a permit preapplication conference to obtain general permit guidance in addition to obtaining an application and other related materials. N.J.A.C. 7:14A-15.3. To request a preapplication conference, the interested party must submit a written request to the NJDEP and include a conceptual plan of the proposed project. N.J.A.C. 7: 14A-15.3@). The preapplication conference is to be held within 30 days of the NJDEP's receipt of the written conference request. N.J.A.C. 7:14A-153(4. N.J.A.C. 7:14A-15.6.

Water Pollution Control and Supply 1705

permit, or of the denial of the application, and provides an opportunity for public comment. Thereafter, the NJDEP responds to the public comments and issues a final decision on the 1706 permit. Within 30 days of the final decision, the applicant can request an adjudicatory 1707 hearing to contest the final decision, including any particular conditions in the permit. In addition, pursuant to the 1990 Amendments, interested parties, such as environmental groups, are allowed to appeal all permit decisions (including modifications) upon meeting certain 1708 requirements regarding standing. The NJDEP cannot issue, renew, or modify any permit which relaxes any water quality standard or effluent limitation until the permittee has paid all fees, penalties, or fines due the NJDEP or the delegated local agency or entered into an agreement establishing a payment schedule. A permittee can only appeal the NJDEP7sdetermination in an administrative hearing 1709 upon the placement, in escrow, of money in an amount equal to the permit fee. The NJDEP issues NJPDES permits for fixed terms of up to 5 years. NJPDES permits can be modified, or reopened, for a number of reasons, including the occurrence of material and substantial alterations to the permitted facility or its discharge, or whenever required by "reopener" conditions found in the permit. A common reopener is for categorical federal effluent limitation guidelines for toxic pollutants. A permittee can transfer its NJPDES permits, for example with the sale of a facility, only upon meeting certain conditions such as prior notice to the NJDEP. The permittee may request that the NJDEP renew a permit at the end of its fixed term; however, the permittee must apply for renewal at least 180 days prior to the expiration of the existing permit. The NJDEP may terminate a permit or deny a renewal application for several reasons including, for example, noncompliance with any condition of the permit, failure to pay permit fees, or failure by the applicant, during the permitting process, to disclose fully all 1710 relevant facts.

N.J.A.C. 7:14A-15.6(e), 15.10-15.17. Id. N.J.A.C. 7:14A-15.15(~)(2),17.2. N.J.S.A. 58:lOA-7d, -7e; N.J.A.C. 7:14A-17.3. N.J.S.A. 58: 10A-7f. Although N.J.S.A. 58: 10A-lOd(5) indicates that the a party appealing a penalty assessment, other than a local agency, must post a bond or "other security approved by the commissioner" as a condition of the appeal, the court in St. James v. Dev't of Envt'l Prot. & Energy, 275 N.J. Super. 342, 646 A.2d 447 (App. Div. 1994), found that this requirement violated due process and it has since been deleted fkom the relevant regulation, N.J.A.C. 7:14-8.4. N.J.A.C. 7:14A-16.1 to 16.6.

New Jersey Environmental Law Handbook The New Jersey Act requires the NJDEP to assess annual permit fees, which are designed to recover the estimated cost of processing, monitoring and administering the NJPDES permit 1711 Annual permit fees are assessed based upon a prescribed formula which considers program. 1712 the Department's assessment of a discharge's environmental impact. The fee assessment 1713

methodology also provides for a base minimum fee as well as a maximum fee assessment.

DISCHARGES TO SURFACE WATER The water pollution control regulations require a NJPDES Discharge to Surface Water (DSW) permit for the discharge of a pollutant from any "point source" into surface waters of the 1714 State. The term "point source" means a "discernible, confined, and discrete conveyance" such as a pipe, ditch, channel, tunnel, conduit, well, container, or other structure from which 1715 pollutants are or may be discharged. The regulations also require a DSW permit for non-point sources where NJDEP determines that a permit should be issued in order to impose appropriate management measures to achieve and maintain the applicable water quality standards. DSW permits are also required for stormwater discharges associated with specified activities, and those 1716 NJDEP or USEPA determines are significant contributors to the pollution of state waters. All DSW permits contain conditions requiring the facility to meet the technology-based effluent limitations and standards of the CWA, as well as any more stringent State requirements 1717 1718 Due to increased concerns about toxic pollutants, all DSW or water quality standards. permits contain special conditions relating to the discharge of toxics. For example, where a toxic effluent limitation promulgated under the Clean Water Act is more stringent than any such

2.3

N.J.S.A. 58:lOA-9. N.J.A.C. 7:14A-3.1. This fee schedule was found to be neither arbitrary nor unreasonable and its use was upheld in GAF Corn. v. Deu't of Envt'l. Prot., 214 N.J. Super. 446,519 A.2d 931 (App. Div. 1986). N.J.A.C. 7: 14A-3.l(a)(9). N.J.A.C. 7: 14A-11. l et seq. N.J.A.C. 7:14A-1.2. N.J.A.C. 7:14A-2.5(d), ll.l(b), 24.2(a)(7)(ii). N.J.A.C. 7:14A-11.6. A "toxic pollutant" is "any pollutant or combination of pollutants, including disease-causing agents, which after discharge and upon exposure, ingestion, inhalation or assimilation into any organism, either directly or indirectly by ingestion through food chains, will, on the basis of information available to the Department, cause death, disease, behavioral abnormalities, cancer, genetic mutations, physiological malfimctions, including malfimctions in reproduction, or physical deformation, in such organisms or their offspring," and includes any toxic pollutants identified pursuant to the CWA. N.J.S.A. 58: 10A-3r.

Water Pollution Control and Supply limitation in an existing permit, the NJDEP must revise or modify all affected NJPDES permits 1719 in accordance with the stricter limitation. 2.4 STORMWATER DISCHARGES NJDEP has adopted regulations governing permits for the discharge of stormwater to 1720 waters of the State. The scope of the regulations is governed, for the most part, by 1987 amendments to the Clean Water Act and implementing regulations, which establish deadlines by 1721

which permit applications must be filed for certain stormwater discharges. Initially, section 402(p) of the CWA as amended in 1987 provided the USEPA and delegated States could 1722

regulate five classes of stormwater discharges, establishing the "Phase I Program." Effective February 7, 2000, USEPA adopted regulations implementing the "Phase I1 Program" and allowing regulation of two additional classes of stormwater discharges. Accordingly, NJDEP adopted new stormwater discharge regulations, effective February 2, 2004, implementing the 1723 federal Phase I1 regulations. The changes adopted as part of the Phase I1 program largely 1724 affect municipalities and state and federal agencies. Regulations relating to stormwater 1725 discharges associated with certain small construction activity have also been added. The current New Jersey regulations allow NJDEP to issue new permits for seven classes 1726 of stormwater discharges to the surface water or groundwater of the state, those: permitted prior to February 4, 1987; (1) associated with certain industrial activities; (2) associated with certain small construction activity (disturbing 1 to 5 acres); (3) from large (population greater than 250,000) municipal separate storm (4) sewers; fiom medium (population greater than 100,000) municipal separate storm (5) sewers;

N.J.S.A. 58:lOA-7(b)(2);N.J.A.C. 7:14A-16.4. N.J.A.C. 7:14A-24.1 et seq. 33 U.S.C. •˜1342(p);40 C.F.R. $122.26 Id. -

N.J.A.C. 7:14A-24.1 et sea.; 36 N.J.R. 813 (Jan. 4,2004). Id. -

N.J.A.C. 7:14A-24.2(a). Permits may also be issued for stormwater discharges fiom concentrated animal feeding operations and agricultural and silvicultural non-point sources otherwise subject to regulation under the NJPDES program. Id.

New Jersey Environmental Law Handbook from certain small municipal separate storm sewers; and which have a significant adverse impact on water quality or are significant (7) contributors of pollutants. Of the seven classes of regulated stormwater discharges, those "associated with industrial

(6)

activity" can potentially cause the greatest effects on water quality. The New Jersey regulations define "stormwater discharges associated with industrial activity" slightly differently from the 1727

federal regulations. Although determining the appropriate category for a facility can be difficult at times, generally heavy industries, landfills, hazardous waste facilities, junkyards, recycling facilities, significant transportation facilities, electric power-generating facilities, construction activities, sewage treatment facilities, and facilities engaged in activity defined by 1728 specified Standard Industrial Classification (SIC) codes require a permit. An industrial facility is exempt and need not obtain a permit if there is "No Permanent Exposure" of industrial 1729 materials and activities to stormwater runoff, so that the runoff cannot,become contaminated. 1730 Commercial and retail activities are generally also exempt from permitting requirements. A regulated facility in New Jersey has two stormwater permit options: a general permit or 1731 an individual (facility-specific) permit. Of these, the most affordable and least complex is a general permit. The NJPDES regulations establish general permits for basic industrial stormwater, concentrated animal feeding operations, hot mix asphalt producers, concrete manufacture, certain construction and mining activities, scrap metal, industrial operations at 1732 Newark Airport, and certain mining and quarrying operations. These permits represent a departure from traditional water permitting strategy by not being based on "end of the pipe" treatment or sampling and monitoring of effluent. Instead, these permits primarily require the implementation of Best Management Practices (BMPs) through a stormwater pollution prevention plan. Such plans may, however, require an annual inspection of the facility and

40 C.F.R. •˜122.26(b)(14);N.J.A.C. 7:14A-1.2. N.J.A.C. 14A-1.2,24.2,24.3,24.7. "Permanent No Exposure" means that all industrial materials are stored andlor all industrial activities are performed inside a permanent building or similar structure. N.J.A.C. 7:14A-24.6(c). The exemption may also be available where industrial or other waste materials are stored in dumpsters or other similar closed containers, vehicles are used to handle industrial materials, or closed pipes are used to transport industrial materials. N. J.A.C. 7: 14A-24.6(f). N.J.A.C. 7:14A-24.2(~)(3). N.J.A.C. 7:14A-24.7. N.J.A.C. 7:14A-6.13(~).

Water Pollution Control and Supply 1733

sampling to determine the effectiveness of the BMPs. To obtain coverage under these permits, the permittee must file a Request for Authorization (RFA) rather than a standard permit 1734 application. To obtain an individual permit for stormwater discharges associated with industrial activity, the requesting facility must submit an NJPDES application in accordance with the 1735 requirements of N. J.A.C. 7: 14A-4. An applicant for an individual permit for discharges composed entirely of stormwater is required to submit the NJPDES-1 Form, NJPDES Form RF, 1736 and NJPDES Form R, Part A. Applicants for an individual permit for discharges composed of stormwater and non-stormwater are required to submit the NJPDES-1 Form and NJPDES 1737 Form R, Part A. The New Jersey permitting program, unlike the federal program, does not 1738 issue "group" permits for stormwater discharges. 2.5 DISCHARGES TO GROUNDWATER The New Jersey water pollution control regulations require that persons discharging pollutants to groundwater obtain a NJPDES Discharge to Groundwater (DGW) permit. The term discharge includes releases directly to groundwater or onto andlor into wells fiom which a 1739 pollutant might flow or drain into groundwater. DGW permits set groundwater concentration limits for both hazardous and nonhazardous pollutants. All DGW permits require the permittee to undertake a groundwater monitoring program, consisting of the installation of monitoring wells as well as periodic groundwater sampling to ensure compliance with permit limits and to determine whether there has been any contamination of groundwater. At a minimum, the groundwater monitoring program requires the installation of upgradient wells in order to determine background

1735 1736

N.J.A.C. 7: 14A-24.7(a). Id. There are, however, several types of operating entities that are required to follow different application procedures depending upon the nature of the operations. See id. For instance, the operating entity for an existing or new stormwater discharge that is associated with construction activity is exempt fiom the submission of certain forms. N.J.A.C. 7: 14A-24.7(a)(2).

1737 1738 1739

N.J.A.C. 7: 14A-24.7(a). N.J.A.C. 7:14A-24.7(b). N.J.S.A. 58:lOA-3(e).

New Jersey Environmental Law Handbook groundwater quality and at least three monitoring wells downgradient to detect any migration of 1740 pollutants from the facility into the groundwater. If the samples from the monitoring wells show that the releases from the facility have contaminated groundwater in excess of permit levels, the permittee must submit a more 1741 comprehensive groundwater assessment plan and take steps to address the problem. Furthermore, the NJDEP may require the facility to undertake a "corrective action program" to 1742

remediate or reverse the contamination of groundwater caused by the facility's discharges. A facility planning to discharge to groundwater must apply for a DGW permit at least 1743 180 days prior to beginning the planned discharge. If a facility must build waste collection or treatment equipment, the permittee must submit its DGW permit application at least 180 days 1744 prior to building, installing, or modifying the equipment. 2.6 UNDERGROUND INJECTION CONTROL Underground injection is the subsurface placement of fluids by injection through wells into subsurface geologic structures. The NJPDES regulations govern this activity through the 1745 Underground Injection Control (UIC) program. Because the UIC program governs the injection of "fluids," it regulates the underground storage of fluids and gases in geologic 1746 formations, in addition to the disposal or discharge of waste through underground injection. A NJPDES permit is required for any underground injection well, including a dug hole that is deeper than its widest surface opening, whose principal function is the emplacement of fluids into the ground. The UIC program also regulates septic tanks, seepage pits, or cesspools that are used by the owner or operator of a hazardous waste facility to dispose of hazardous waste, or by an industrial facility, a multiple dwelling, or a community system for the subsurface emplacement of wastes.

1747

N.J.A.C. 7:14A-7.6. N.J.A.C. 7: 14A-7.8. See N.J.A.C. 7:26C. N.J.A.C. 7: 14A-4.2. Id. N.J.A.C. 7: 14A-8, et seq. The UIC program does not regulate the underground storage of fluids in preconstructed underground storage tanks. N.J.A.C. 7: 14A-8.1(b)(2)(iv). Those regulations are set forth at N. J.A.C. 7: 14B. Single-family residential disposal systems, such as septic tanks or cesspools, are not covered by the UIC program. N.J.A.C. 7:14A-8.l(b)(2)(ii). Regulations setting out construction standards for individual subsurface sewage disposal systems can be found at N.J.A.C. 7:9A-1.1 et seq. (see Section 3.4, infra).

Water Pollution Control and Supply 1748

Injection wells are divided into and regulated by five classes: Class I wells are those that inject hazardous, municipal, or industrial waste (1) into geologic formations beneath the lowermost formation containing a source of drinking water; Class I1 wells are those that inject fluids that are brought to the surface (2) during the production of oil or natural gas, or which inject hydrocarbons for underground storage; Class I11 wells inject fluids in connection with the extraction of minerals (3) or energy (e.g., geothermal energy); Class IV wells are those that inject hazardous, radioactive, municipal, or (4) industrial wastes into or above geologic formations which contain a source of drinking water within 2 miles of the well; and Class V wells include all other injection wells, mostly those that inject (5) relatively clean water (e.g., salt water intrusion barrier wells used to inject water into fresh water aquifers to prevent salt water intrusion). Class V wells also include industrial septic tanks. By regulation, the NJDEP has prohibited any new wells that inject hazardous, radioactive, municipal, and industrial waste (that is, new Class IV wells and Class I wells injecting such wastes), except under certain circumstances where the well is used to implement 1749 environmental remediation, and has phased out the use of existing Class IV wells. 1750

By regulation, the NJDEP has provided a permit-by-rule for all Class V wells. A permit-by-rule allows the facility to avoid the requirement of obtaining an individual NJPDES permit, as long as it complies with special regulations for reporting to the NJDEP and certain construction and abandonment requirements. If a facility with a Class V well does not comply with those special requirements, it can lose its permit-by-rule status and must obtain an individual NJPDES permit. The UIC regulations prohibit the movement of fluids from any injection well into underground sources of drinking water. If movement of fluids into drinking water is detected, the

1748 1749 1750

N.J.A.C. 7: 14A-8.2. N.J.A.C. 7: 14A-8.7. N.J.A.C. 7:14A-8.5. The requirements for Class V wells do not apply to the underground injection of stormwater runoff fiom the roofs of buildings that do not contain sources of pollutants. N.J.A.C. 7:14A8-5@)(7).

New Jersey Environmental Law Handbook

NJDEP can require the operator to take corrective action to prevent contamination of the 1751 drinking water source. All Class I, 11, and I11 injection wells must have individual UIC permits containing conditions and standards specific to that class of well. These standards govern the construction, 1752 operation, and monitoring of the well, and require periodic reporting to the NJDEP. 2.7 DISCHARGES TO DOMESTIC TREATMENT WORKS The water pollution control regulations govern facilities that discharge primarily 1753 nondomestic pollutants to a domestic treatment works. A domestic treatment works is a publicly or privately owned facility for the treatment, prior to discharge, of municipal or industrial waste of a liquid nature. Such facilities are regulated as "indirect dischargers" because they do not discharge directly to waters of the State. 2.7.1 Pretreatment Standards The water pollution control regulations require all non-household users of domestic treatment works to meet certain pretreatment standards before discharging to the treatment 1754 works. The NJPDES regulations prohibit any indirect discharger from releasing any pollutant in sufficient quantity which might pass through the domestic treatment process untreated, or interfere with the waste treatment process, resulting in a violation of either the treatment works; 1755 NJPDES permit limits for toxic substances, or an exceedance of its sludge disposal criteria. The NJDEP has adopted the pretreatment standards promulgated by the USEPA pursuant to the 1756 Clean Water Act. The pretreatment regulations set limits on discharges on an industry-byindustry basis. Those pretreatment standards absolutely prohibit some contaminants in discharges to treatment works and require pretreatment prior to discharge of other contaminants. The New Jersey Act empowers municipally owned treatment works to set terms and conditions on the discharge of pollutants into their treatment works; grants investigatory powers to ensure compliance by indirect dischargers; and authorizes local agencies to impose the same remedies, 1757 fines, and penalties, and to recover costs and compensatory damages, as the NJDEP. A local

1751 1752 1753 1754 1755 1756 1757

N.J.A.C. 7: 14A-8.4. N.J.A.C. 7:14A-8.13 to 8.15. N.J.A.C. 7:14A-21 et sea. N.J.A.C. 7: 14A-21.l. N.J.A.C. 7:14A-21.2 to 21.4. N.J.A.C. 7:14A-21.l(b) incorporating 40 C.F.R. $403; 40 CFR Chapter 1, SubchapterN. N.J.S.A. 58:lOA-6(i).

Water Pollution Control and Supply agency, however, is not authorized to impose civil administrative penalties and must petition the 1758 State Attorney General or the county prosecutor for criminal prosecutions. The regulations also require all users of domestic treatment works to comply with any ordinances, rules, or 1759 regulations promulgated by the domestic treatment works.

2.7.2 Significant Indirect Users Since the definition of a discharge in the New Jersey Act includes releases to treatment works, all dischargers to treatment works are required to have an NJPDES permit. The NJDEP 1760 has provided a permit-by-rule for most users of domestic treatment works, unless they are 1761 classified as a "Significant Indirect User" (SIU). In order to qualify for the permit-by-rule, exempt from the requirements of an individual NJPDES permit, the discharger must comply with specific regulations, including prior written authorization from the treatment works. The 1762 treatment works must specifically agree to accept the discharger's effluent. The NJDEP can withdraw or refuse eligibility for the permit-by-rule for a number of reasons, including a 1763 significant violation of State environmental laws or regulations by the discharger. 1764 An SIU must obtain an individual NJPDES permits to discharge to a treatment works. The regulations list the types of users that the NJDEP considers SIUs. In general, an SIU discharges significant quantities of effluent to the treatment works, or its effluent may contain toxic or hazardous substances (e-g., discharges from hazardous waste facilities or discharges of 1765 landfill leachate).

Id. N.J.A.C. 7: 14A-21.10. N.J.A.C. 7:14A-21.3. A "Significant Indirect User" is a "discharger of industrial or other pollutants into a municipal treatment works, as defined by the department including, but not limited to, industrial dischargers, but excluding the collection system of a municipal treatment works." N.J.S.A. 58:lOA-3(cc). N.J.A.C. 7: 14A-21.3. N.J.A.C. 7: 14A-21.1I. The NJDEP or a delegated local agency with an approved industrial pretreatment program may terminate certain individual NJPDESISIU permits for wastewater discharge where it determines that the discharge has no reasonable potential for adversely affecting any applicable treatment standard or the treatment works' operation. The holder of the individual NJPDESISIU permit would then need to maintain only the permit-by-rule discharge requirements. The purpose of this rule is to eliminate duplicative pretreatment requirements. N. J.A.C. 7: 14A-1.2. N.J.A.C. 7:14A-1.2; N.J.S.A. 58:lOA-~(cc).

New Jersey Environmental Law Handbook SEWAGE AND WASTEWATER TREATMENT The control of water pollution from sewage and wastewater treatment is accomplished through several related statutes that either complement or implement the NJDEP's regulatory program under the New Jersey Act. 3.1 WATER QUALITY PLANNING 1766 The Water Quality Planning Act mandates an area-wide wastewater treatment planning process which ensures adequate sewage and wastewater treatment systems and which controls, to the extent feasible, all sources of water pollution in order to maintain water 1767 quality. The Act provides for the establishment of planning areas, which generally conform to county boundaries modified to account for major watersheds, and the designation of area-wide 1768 planning agencies authorized to undertake the planning process. Each designated planning agency, and the NJDEP for areas without a designated agency, must conduct the area-wide planning process and submit the area-wide plan to the Governor. Each planning agency must coordinate its work with every other planning agency with which it shares a river basin, and must submit any conflicts to the NJDEP for mediation. 1769 The area-wide plan must include: the identification of treatment works, including wastewater collection and (1) urban stormwater runoff systems, necessary to meet the anticipated municipal and industrial waste treatment needs of the area for a 20-year period (updated annually) and to establish priorities for the construction of such treatment works; the establishment of a regulatory program to ensure that all types of water (2) pollution are controlled to the extent feasible and that industrial or commercial wastes discharged into any treatment works meet the applicable pretreatment requirements; the identification of existing or required agencies necessary to construct, (3) operate, and maintain needed sewage and wastewater treatment facilities identified by the plan and otherwise necessary to carry out the plan; a process to identify and control agriculturally and silviculturally related (4) non-point sources of water pollution; and

3.0

1766 1767

1768

1769

N.J.S.A. 58:llA-1 et sea Because such area-wide plans also are undertaken pursuant to Section 208 of the CWA, 33 U.S.C. they are often locally known as "Section 208 plans."

8 1288,

N.J.S.A. 58:11A-4; Toll Bros.. Inc. v. Dep't of Envt'l. Prot., 242 N.J. Super. 5 19,577 A.2d 845 (App. Div. 1990). N.J.S.A. 58:llA-5.

WaterPollution Control and Supply a process to identify sources of pollution related to construction activity and procedures and methods, including land use requirements, to control such pollution. The actual implementation of the area-wide plan, such as the construction of wastewater treatment facilities or the enforcement of industrial pretreatment regulations, is left to (5)

independent agencies. These independent agencies include: local sewage treatment authorities, 1770 1771 established pursuant to the Sewage Authorities Law; the Passaic Valley Sewerage District; and local municipal utilities authorities established pursuant to the Municipal and County 1772 Utilities Authorities Law. Perhaps the most direct effect on the public from water quality planning is the requirement that all prospective dischargers must develop and conduct all projects and activities affecting water quality in the planning area in a manner consistent with the area-wide plan; moreover, the NJDEP may not grant any permit (such as a NJPDES permit) which is in conflict 1773 with an adopted area-wide plan. Thus, for example, the NJDEP could not grant a permit for a direct discharge to surface water if the area-wide plan requires that all dischargers in that area direct their effluent to the local domestic treatment works. Another effect upon the public fiom the process of planning for sewage treatment 1774 facilities arises from The Realty Improvement Sewerage and Facilities Act. 7 h s statute 1775 provides that no building permit can be issued for the construction of any realty improvement until the local board of health certifies that the proposed water supply system and sewerage facilities are in compliance with the standards for construction of such systems promulgated by the N J D E P . ~ ~ ~ ~

N.J.S.A. 40:14A-1 et sea. The act authorizes counties and municipalities to create sewer authorities empowered to construct, operate, and maintain sewage facilities; impose rates and service charges; and control pollutants in discharges to sewage treatment works. N.J.S.A. 58:14-1 et sea N.J.S.A. 40:14B-1 et s e a The Act authorizes counties and municipalities to create independent utilities authorities to distribute an adequate water supply for public or private use, relieve State waters fiom pollution, provide sewage collection and disposal services, and provide solid waste services. N.J.S.A. 58:l IA-10. N.J.S.A. 58:ll-23 et seq. The term "realty improvement" is "any proposed new residence or other building the usehl occupancy of which shall require the installation or erection of a water supply system or sewerage facility, other than one which is to be served by an approved water supply and an approved sewerage system." N.J.S.A. 58:ll24(e). See Section 3.2, Wastewater Treatment Works and Section 5.3.3, Standards for the Construction of Public Water Systems, for a discussion of the appropriate construction standards.

New Jersey Environmental Law Handbook The statute also provides that no municipality may issue a subdivision approval for any subdivision of 50 or more realty improvements until the NJDEP certifies that the proposed water 1777 supply and sewerage facilities comply with the applicable standards. 3.2 WASTEWATER TREATMENT WORKS A person planning to build, install, or substantially modify a facility for the collection or 1778 treatment of a pollutant, i.e., a treatment works, must apply to the NJDEP for approval. Within 20 working days of issuance of a final or modified NJPDES permit, the NJDEP determines whether the discharger will be required to comply with the requirements for a 1779 treatment works approval. In deciding whether treatment works approval will be required, the Department considers: the degree of risk to public health posed by the proposed discharge; the characteristics and quality of both the discharge and the receiving waters; the quantity of the discharge; and the site of the discharge. If the Department decides that treatment works approval is required, the applicant proceeds through a three-stage procedure to obtain final approval: Stage 1 is an optional preliminary review of the proposed treatment works; Stage 2 is a review and approval to construct, install, or modify the treatment works; and Stage 3 is the approval to operate the 1780 treatment works if it has been built in conformance with Stages 1 and 2. In addition to receiving approval to build or modify a treatment works, each domestic 1781 treatment works must monitor the volume of committed flow of effluent discharged to it. If the committed flow reaches or exceeds 80 percent of the permitted capacity, the permittee must 1782 submit a plan to avoid overloading the facility or to avoid a violation of its NJPDES permit. If the downstream sewerage facilities do not have adequate conveyance capacity as defined in N.J.A.C. 7:14A-1.2, or if the facility consistently violates effluent limitations in its NJPDES 1783 permit for a 3-month consecutive period, the NJDEP may impose a sewer connection ban.

1777 1778

1779 1780 1781 1782 1783

N.J.S.A. 58:ll-25.1. N.J.A.C. 7:14A-22 et sea. In addition, site plan approval requirements of local municipalities are not preempted by the Act and a facility must obtain any necessary local approval. Shuvack v. Manasauan River Regional Sewerage Auth., 194 N.J. Super. 199,476 A.2d 816 (App. Div. 1984). N.J.A.C. 7: 14A-22.2(h). N.J.A.C. 7: 14A-22.5. N.J.A.C. 7:14A-11.2(a). N.J.A.C. 7:14A-22.16. N.J.A.C. 7:14A-22.17.

Water Pollution Control and Supply

SLUDGE MANAGEMENT The water pollution control regulations include a sludge quality assurance program to determine the degree of contamination in the sludge produced by domestic and industrial 1784 treatment or pretreatment works. The term "sludgeyyrefers to the solid residue resulting from physical, chemical, or biological treatment of domestic or industrial wastewater. All domestic and industrial treatment works, as well as SIU pretreatment works, are required to periodically sample their sludge. These samples are tested for heavy metals, selected chemicals, and certain toxic organic compounds, using specified procedures. Each treatment works must report to the NJDEP the sampling and testing results, as well as the method of sludge disposal. Anyone who plans to dispose of sludge or septage by land application must obtain a 1785 NJPDES permit. The NJPDES permit for land application of sludge or septage includes conditions relating to application rates, operational procedures, restricted areas and buffer zones, soil monitoring, sludge quality monitoring, transport of sludge to the disposal site, groundwater monitoring through the use of monitoring wells, and recordkeeping. In addition, the Marine Protection, Research, and Sanctuaries Act prohibits all persons 1786 from dumping sludge into ocean waters. Since the ban came into effect in January, 1992, treatment owners must utilize land-based disposal alternatives such as land application, incineration, or use as daily landfill cover material. 3.4 INDIVIDUAL SUBSURFACE SEWAGE DISPOSAL SYSTEMS Standards for the construction and maintenance of "individual subsurface sewage 1787 disposal systems" ("disposal systemsyy),which are essentially individual septic systems, were 1788 first promulgated pursuant to The Realty Improvement Sewerage and Facilities Act in 1954. The NJDEP completely revised these regulations in 1989, establishing new standards to reflect current scientific knowledge and engineering practices, to protect groundwater and surface water quality, and to minimize the risk of septic tank malfunction.

3.3

1784 1785 1786 1787

1788

N.J.A.C. 7:14A-13.7. N.J.A.C. 17:14A-20.1 et sea. 33 U.S.C. 91414b. N.J.A.C. 7:9A-1.1 et sea. An "individual subsurface sewage disposal system7'is defined as "a system for disposal of sanitary sewage into the ground which is designed and constructed to treat sanitary sewage in a manner that will retain most of the settleable solids in a septic tank and to discharge the liquid effluent to a disposal field. The term 'system' is equivalent in meaning." N.J.A.C. 7:9A-2.1. N.J.S.A. 58:ll-23 et seq.

New Jersey Environmental Law Handbook The regulations prohibit the construction, installation, alteration, or operation of disposal systems without the proper approvals. They also prohibit the construction of cesspools, restrict the construction of seepage pits, and prohibit the discharge of industrial waste to a disposal 1789 system without a valid NJPDES permit or approval from a treatment works. 1790 the authority to approve The NJDEP has delegated to local administrative authorities the construction, installation, alteration, or operation of disposal systems, pursuant to these guidelines. All disposal systems constructed after the effective date of these regulations are 1791 required to meet the current standards. Existing disposal systems are not required to meet these new standards, unless they will be altered to increase the volume of sanitary sewage or to change the type of wastes being discharged. Disposal systems that service industrial waste, on the other hand, must obtain a NJPDES permit. In addition, a person who discharges sanitary wastes by means of an existing subsurface disposal system, and who has not already applied to 1792 the NJDEP for a NJPDES permit, must immediately do so. The disposal system regulations set forth engineering standards for the following: 1793 Site evaluation and system location; (1) 1794 (2) Determination of soil suitability; 1795 (3) Permeability testing; 1796 (4) Design and construction requirements; 1797 (5) Pretreatment units; 1798 (6) Effluent distribution networks; 1799 (7) Disposal fields;

N.J.A.C. 7:9A-1.6. A local "administrative authority" is defined as "the board of health having jurisdiction or its authorized agent acting on its behalf." N.J.A.C. 7:9A-2.1.

The effective date of the current standards is January 26,2005. N.J.A.C. 7:9A-3.3. N.J.A.C. 7:9A-4 et ses. N.J.A.C. 7:9A-5 et sea. N.J.A.C. 7:9A-6 et sea. N.J.A.C. 7:9A-7 et sect. N.J.A.C. 7:9A-8 et seq N.J.A.C. 7:9A-9 et sea. N.J.A.C. 7:9A-10 et sea.

Water Pollution Control and Supply (8)

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Seepage pits; and 1801 (9) Operation and maintenance. A violation of these standards constitutes a violation of the WPCA and subjects a violator 1802 to the penalties outlined in N.J.A.C. 7:14-8.

ENFORCEMENT AND PENALTIES Under the New Jersey Act, the NJDEP has the responsibility for determining compliance with the Act or any applicable State or federal regulation. 4.1 INSPECTIONS AND INFORMATION REQUESTS The NJDEP has the right to enter all premises where a discharge source is or may be located to inspect, sample, copy, or photograph, or to enter any premises in which monitoring 1803 records or equipment required by a permit are kept. In addition, with certain limited exceptions, the Act requires the NJDEP to conduct an inspection of each permitted facility, including municipal treatment works, at least once a year. Dischargers to a municipal treatment 1804 works, however, must be inspected by the "delegated local agency." These inspections must 1805 include: A representative sampling of the effluent for each permitted facility or (1) municipal treatment works, except that in the case of facilities or works that are not major facilities or significant indirect users, sampling shall be conducted at least once every three years; An analysis of all collected samples by a State owned and operated (2) laboratory, or a certified laboratory that has not been or is not being used by the permittee, and that is not directly or indirectly owned, operated, or managed by the permittee; An evaluation of the maintenance record of the permittee's treatment (3) equipment; An evaluation of the permittee's sampling techniques; (4)

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1800 1801 1802 1803

1804 1805

N.J.A.C. 7:9A-11 et s e a N.J.A.C. 7:9A-12 et secl. N.J.A.C. 7:9A-1.7. N.J.S.A. 58: 10A-6(g). These warrantless inspections must be reasonable in time, place, and manner. State v. Bonaccurso, 227 N.J. Super. 159,545 A.2d 853 (Law Div. 1988). N.J.S.A. 58: 10A-6(1). N.J.S.A. 58:lOA-6(1).

New Jersey Environmental Law Handbook A random check of written summaries of test results, prepared by the certified laboratory providing the test results, for the immediately preceding 12-month period, signed by a responsible official of the certified laboratory, certifying the accuracy of the test results; and (5)

An inspection of the permittee's sample storage facilities and techniques, (6) if the sampling is normally performed by the permittee. 1806

In the case of a "significant noncomplier" additional inspections are required within 60 days 1807 of the notice that initially results in the permittee being classified as such. In addition to the investigatory powers authorized by statute, the NJDEP regulations require all holders of NJPDES permits to furnish to the Department, within a reasonable time, any information the Department may request to determine compliance with the permit. Moreover, information in reports required to be submitted to the NJDEP on a regular basis, such as Discharge Monitoring Reports, can be used to determine compliance with the Act, its regulations, or permit conditions. All records, reports, or other information obtained by the NJDEP or a "delegated local agency," including any correspondence, will be made available to the public. In order to prevent this, a permittee must convince the Department that making this information public will divulge 1808 trade secrets. The NJDEP also has broad power to obtain information regarding possible violations of the Act. The Department has the authority to require any individual, whom it has reason to believe has information relevant to a discharge or a potential discharge of a pollutant, to provide 1809 that information. This information includes:

1806

A "significant noncomplier" is "any person who commits a serious violation for the same hazardous pollutant or the same nonhazardous pollutant, at the same discharge point source, in any two months of any six-month period, or who exceeds the monthly average or, in a case of a pollutant for which no monthly average has been established, the monthly average of the daily maximums for an effluent limitation for the same pollutant at the same discharge point source by any amount in any four months of any six-month period, or who fails to submit a completed discharge monitoring report in any two months of any six-month period. The department may utilize, on a case-by-case basis, a more stringent fkequency or factor of exceedance to determine a significant noncomplier, if the department states the specific reasons therefor, which may include the potential for harm to human health or the environment. A local agency shall not be deemed a 'significant noncomplier' due to an exceedance of an effluent limitation established in a permit for flow." N.J.S.A. 58:lOA-3(w). N.J.S.A. 58: 10A-6(m).

1808 1809

N.J.S.A. 58:lOA-6(0). N.J.S.A. 58:lOA-10.3(a).

Water Pollution Control and Supply

(1) discharge;

The nature, extent, source, and location of the discharge, or potential

Identification of the nature, type, quantity, source, and location of the (2) pollutant or pollutants; The identity of, and other relevant information concerning, the generator (3) or transporter of the pollutant, or any other person subject to liability for the discharge or potential discharge; and The ability of any person liable, or potentially liable, for the discharge, or (4) potential discharge, to pay for, or perform the cleanup and removal, including the availability of appropriate insurance coverage. 1810 This section also authorizes the NJDEP to subpoena individuals as well as documents. Any 1811 person who receives a document request or subpoena from the Department will: be required to conduct a diligent search of all documents in his possession, (1) custody, or control, and to make reasonable inquiries of present and past employees who may have knowledge or documents relevant thereto; have a continuing obligation to supplement the information if additional (2) relevant information is discovered, or if it is determined that the information previously provided was false, inaccurate, or misleading; and grant the Department access, at reasonable times, to any vessel, facility, (3) property, or location to inspect and copy all relevant documents or, at the Department's request, copy and furnish to the Department all such documents. Moreover, individuals are not allowed to destroy documents relating to a discharge, or potential discharge, to surface waters until 5 years after the discharge. Finally, a person must obtain prior written permission to destroy records relating to a discharge or potential discharge to 1812 groundwater. 4.2 CIVIL PENALTIES AND ACTIONS If the Department determines there has been a violation of the Act, its regulations, or a 1813 NJPDES permit condition, it has several enforcement options. It may issue a compliance

1810 1811 1812 1813

N.J.S.A. 58:lOA-10.3(b). N.J.S.A. 58:lOA-10.3(~). N.J.S.A. 58:lOA-10.3(d). N.J.S.A. 58:lOA-10; N.J.A.C. 7:14-8 et secl. The penalty provisions of the Act may not be imposed retroactively for discharges that occurred prior to its enactment. Dev't of Envt'l. Prot. v. J.T. Baker Co., 234 N.J. Super. 234, 560 A.2d 739 (Ch. Div. 1989), afrd, 246 N.J. Super. 224, 587 A.2d 279 (App. Div.

New Jersey Environmental Law Handbook order requiring the facility to comply with the applicable regulation or permit condition, and may 1814 If a violation is of a assess a civil administrative penalty of up to $50,000 per violation. continuing nature, each day constitutes an additional, separate, and distinct offense. The environmental impact of the violation and the seriousness of the violator's conduct are 1815 considered when administrative penalties are imposed. As required by the 1990 Amendments, the NJDEP adopted a "uniform assessment of civil penalties policy" on August 5, 1816

The policy takes into account a number of factors, including the extent, toxicity, and 1991. frequency of the violation; the economic benefits of the violation to the violator; and the degree 1817 of cooperation or recalcitrance of the violator. A violator's failure to pay the imposed penalty assessment within 30 days, provided the violator has not contested the imposed penalty, will 1818 result in the accrual of interest on the amount owed. A "responsible corporate officer," that is, an individual who had actual responsibility for the condition resulting in the violation or who was in a position to prevent its occurrence, may be held personally responsible for corporate 1819 violations of the WPCA. The NJDEP has a very limited ability to negotiate reduced penalties. The Department cannot negotiate the settlement of any civil administrative penalty for less than 50 percent of the initially assessed penalty. In addition, the amount of the compromised penalty can be no less than certain statutory minimums. Moreover, the Department is prohibited from compromising the amount of any component of the penalty that represents an economic benefit resulting from 1820 the violation. 1991). N.J.A.C. 7:14-8 et sea. was most recently substantially amended effective May 17, 1999 and therefore applies to all violations which occur on or after May 17, 1999. At a minimum, for violations which occur after June 30, 1991, a minimum mandatory civil administrative penalty shall be assessed against the violator in an amount not less than $5,000 for each violation that causes a violator to be, or continue to be, a significant non-complier; or not less than $1,000 for each serious violation. N.J.A.C. 7:14-8.5. N.J.A.C. 7:14-8.5. Although it is a basis for mitigation of the penalty, intent on the part of the permit holder is not a requirement for a violation of the Act. Dw't of Envt'l Prot. v. Lewis, 215 N.J. Super. 564, 522 A.2d 485 (App. Div. 1987). However, mere ownership of property, absent participation in any act of illegal discharge of pollutants, is not sufficient to be found liable under the Act. Dev't of Envt'l Prot. v. A r b ' s Auto Sales, 224 N.J. Super. 200,539 A.2d 1280 (App. Div. 1988). N.J.A.C. 7:14-8 et sea. N.J.S.A. 58:lOA-lO(d)(l)(b), (c); N.J.A.C. 7:14-8 et sea. N.J.S.A. 58:lOA-10(d)(3).

See State, Dep't of Envt'l Prot. v. Standard Tank Cleaning Cop., 289 N.J. Super. 381,403, 665 A.2d 753 (App. Div. 1995). N.J.S.A. 58:lOA-10(d)(4).

Water Pollution Control and Supply In situations where the violator is a delegated local agency that enters into an Administrative Consent Order (ACO), requiring it to take steps to comply with its permit, the NJDEP has full discretion to settle penalty assessments for violations occurring during a period of up to 24 months preceding the ACO. However, in no case may the NJDEP assess a penalty 1821 less than the statutory minimum. In addition, where the NJDEP assesses a local agency a 1822

penalty for violating an ACO, the 50 percent limitation also applies. A party appealing a penalty assessment must follow the procedure set forth in N.J.A.C. 1823

7:14-8.4. In addition, the NJDEP may bring a civil court action seeking a temporary or permanent injunction against the discharger to enjoin the violations as well as an assessment of the costs of 1824 investigating the violation and litigating against the violator. It may also seek the costs incurred by the State in correcting the adverse effects to the environment caused by the violation 1825 and compensatory damages for the loss of wildlife, fish, or other aquatic life. The NJDEP may also seek an assessment against the violator for the actual amount of any economic benefits 1826 accruing to the violator as a result of the violation. Additionally, the court may impose a civil penalty of up to $50,000 per day for violations of the Act or any administrative or court order 1827 issued pursuant to the Act, or for the failure to pay an administrative penalty. 4.2.1 Mandatory Minimum Penalties and Defenses The 1990 Amendments establish a mandatory minimum civil administrative penalty for 1828 certain violations. For "serious violations" a penalty of $1,000 must be assessed within 6 1829 months of the violation. A penalty of $5,000 will be assessed for a violation that causes a

Id.; see Section 4.2.1, infra.

Although the statute indicates that a party appealing a penalty assessment, other than a local agency, must post a bond or "other security approved by the commissioner" as a condition of the appeal, N.J.S.A. 58:lOA-10d(5), the court in St. James v. Dm't of Envt'l Prot. & Enera, 275 N.J. Super. 342,646 A.2d 447 (App. Div. 1994) held that this requirement violated due process and it has been removed from N.J.A.C. 7:14-8.4. N.J.S.A. 58:lOA-10(c)(l), (2). State actions under certain circumstances do not bar citizen suits under the Act. Public Int. Research Group v. GAF Corp., 770 F. Supp. 943 (D.N.J. 1991). N.J.S.A. 58: 10A-10(~)(3),(4). N.J.S.A. 58:lOA-10(~)(5). N.J.S.A. 58:lOA-lO(d)(l)(a). N.J.S.A. 58:lOA-lO.l(a). N.J.S.A. 58:lOA-lO.l(b).

New Jersey Environmental Law Handbook 1830

violator to be, or continue to be, a "significant non-complier." Omission by the permittee of an effluent parameter from a discharge monitoring report results in a penalty of $100 per day for each day the information is overdue. The NJDEP considers each omitted parameter a separate violation, but limits the penalty to $50,000 per month for any one discharge monitoring report. 1831

After the first 30 days, the NJDEP has discretion to continue assessing this penalty. If the penalty assessment resulted from an inadvertent omission, the permittee may submit, without liability for the penalty, the omitted information within 10 days of receiving notice of the 1832 omission. In the event that a single operational occurrence has resulted in the simultaneous violation of more than one parameter, the Department has discretion to consider it a single 1833 violation for purposes of mandatory minimum penalties. The 1990 Amendments outline several affirmative defenses to the imposition of the 1834 1835 mandatory minimum penalties outlined above. These defenses include an upset, a bypass, or a testing or laboratory error. Defenses do not include noncompliance to the extent caused by operational error, improperly designed treatment facilities, inadequate treatment facilities, lack of 1836 preventive maintenance, or careless or improper operation. 4.2.2 Administrative Consent Orders The NJDEP must follow certain ground rules for the issuance of ACOs entered into pursuant to the Act. Every ACO with a "schedule of compliance" must require a permittee to post a bond or "other security approved by the commissioner" necessary to carry out the 1837 remedial measures required by the ACO. Local agencies are exempt from this requirement. Where an ACO relaxes effluent limitations established in a permit or a prior ACO, the NJDEP or

N.J.S.A. 58:lOA-lO.l(c). N.J.S.A. 58:lOA-lO.l(d). Id. N.J.S.A. 58:lOA-lO.l(e). N.J.S.A. 58:lOA-10.2(b). "Upset" is defined as "an exceptional incident in which there is unintentional and temporary noncompliance with an effluent limitation because of an event beyond the reasonable control of the permittee, including fire, riot, sabotage, or a flood, storm event, natural cause, or other act of God, or other similar circumstance, which is the cause of the violation. 'Upset' also includes noncompliance consequent to the performance of maintenance operations for which a prior exception has been granted by the department or a delegated local agency." N.J.S.A. 58:lOA-32. N.J.S.A. 58:lOA-10.2(c)(d). "Bypass" is defined as "the anticipated or unanticipated intentional diversion of waste streams from any portion of a treatment works." N.J.S.A. 58:lOA-3aa. N.J.S.A. 58:lOA-10.2(h). N.J.S.A. 58:lOA-6.l(a).

Water Pollution Control and Supply 1838

local agency must afford an opportunity for public comment after public notice. If an ACO would relax permit conditions for more than 24 months, the NJDEP or designated local agency has the discretion to hold a public hearing. The party requesting or requiring the interim 1839 enforcement limits must pay all "reasonable costs" of the hearing.

CRIMINAL PENALTIES The Act includes criminal penalties for certain willful or negligent violations of the Act 1840 or its regulations. A criminal violation which causes a "significant adverse environmental 1841 effect'' is a crime of the second degree punishable by fines ranging from $25,000 to $250,000 per day, or imprisonment, or both. Knowingly falsifying a statement or document required under the Act or tampering with a monitoring device is a crime of the third degree punishable by fines 1842 of $5,000 to $75,000 per day, or imprisonment, or both. Negligent violations of the Act are crimes of the fourth degree and are punishable by fines of $5,000 to $50,000 per day, or 1843 imprisonment, or both. Purposeful or knowing violation of any effluent limitation or permit condition, with the knowledge that another person has been placed in imminent danger of death or serious bodily injury, is a crime of the first degree, punishable by a fine of $50,000 to $250,000 (or in the case of a corporation by a fine of $200,000 to $1,000,000), or imprisonment, 1844 or both. Moreover, any conveyance or equipment used in a willful discharge in violation of the Act is subject to forfeiture to the State.

4.3

4.4

OTHER ENFORCEMENT AUTHORITY

The NJDEP has enforcement authority under the State's fish, game, wild birds, and 1845 animals statutes, to prohibit the discharge, into any fresh or tidal waters, of any petroleum

N.J.S.A. 58:lOA-6.l(b). N.J.S.A. 58:lOA-6.l(c). N.J.S.A. 58:lOA-10(f); see also N.J.A.C. 7:26-16.22. A "significant adverse environmental effect" is defined as "serious harm or damage to wildlife, fi-eshwater or saltwater fish, any other aquatic or marine life, waterfowl, or to their habitats, or to livestock, or agricultural crops; serious harm to, or degradation of, any ground or surface waters used for drinking, agricultural, navigational, recreational, or industrial purposes; or any other serious articulable harm or damage to, or degradation of, the land or waters of the State, including ocean waters subject to its j,sdiction.'' N.J.S.A. 58: 10A-lO(f)(l)(b). N.J.S.A. 58:lOA-lOf(2). N.J.S.A. 58:lOA-lOf(3). N.J.S.A. 58:lOA-lOf(4). N.J.S.A. 23:l et seq.

New Jersey Environmental Law Handbook products, debris, and hazardous, deleterious, destructive, or poisonous substances of any kind. 1847 Violators of this statute are subject to a penalty of up to $6,000 per day for each violation.

1846

5.0

WATER SUPPLY AND QUALITY New Jersey has enacted a series of related statutes designed to ensure an adequate supply of high-quality water. The statutes seek to accomplish this goal by (1) protecting the amount of water supplies under normal as well as drought conditions; (2) regulating the quality of drinking water supplied by public water systems; and (3) establishing surface and groundwater quality standards and criteria. 5.1 WATER SUPPLY AND DIVERSION The water resources of the State are public assets held in trust for the State's citizens, and 1848 managed by the State as a common resource to assure the fair allocation of the water supply. 1849 The Water Supply Management Act (WSMA) protects the State's water supplies during drought conditions and assures a fair allocation of waters of the State during normal conditions through the use of water diversion permits. 5.1.1 Drought Emergencies The WSMA empowers the Governor to declare, by executive order, a state of water emergency upon a finding by the NJDEP that there is a water supply shortage which endangers 1850 the public health, safety, or welfare in all or part of the State. The NJDEP has adopted, as 1851 required by this statute, an Emergency Water Supply Allocation Plan, to be utilized as the basis for imposing water usage restrictions during a declared state of water emergency. During a declared state of water emergency, the NJDEP may take steps to alleviate the 1852 adverse effects of the emergency such as:

N.J.S.A. 235-28. Lansco, Inc. v. Dev't of Envt'l. Prot., 138 N.J. Super. 275, 350 A.2d 520 (Ch. Div. 1975), affd, 145 N.J. Super. 433,368 A.2d 363 (App. Div 1976), certif. denied, 73 N.J. 57, 372 A.2d 322 (1977). See Chapter X, Section 4.1.

The term "waters of the state" is defined, for the purposes of water supply control, to include all surface water and groundwater of the State. N.J.S.A. 58:lA-3(g). N.J.S.A. 58:lA-1 et seq. City of Newark v. Dept. of Health, 109 N.J. Super. 166,262 A.2d 718 (App. Div. 1970), avueal after remand, 127 N.J. Super. 251, 317 A.2d 86 (App. Div.), cert. denied, 419 U.S. 999, 95 S.Ct. 314,42 L.Ed.2d 273 (1974). N.J.S.A. 58:lA-4(a). N.J.A.C. 7:19-13.1 et seq N.J.S.A. 58:lA-4; N.J.A.C. 7:19-10 to -11

Water Pollution Control and Supply ordering any person to reduce by a specified amount the use of any water (I) supply, to make use of an alternative water supply, to make emergency interconnections between systems, to transfer water between public or private systems, or to cease the use of any water supply; ordering any water distribution and supply systems to reduce or increase (2) by a specified amount the distribution of water to certain users, or to share any water supply with other distributors; establishing priorities for the distribution of any water supply; and (3) directing any person engaged in retail distribution of water to impose (4) surcharges as a penalty for the violation of any order to reduce usage. The regulations under the WSMA establish a system for prioritizing the allocation of water supplies during an emergency. This priority system is based upon a phased approach to drought emergencies ranging fiom Phase I conditions (available water supplies below normal) 1853 through Phase IV (disaster stage). The NJDEP has authority to order curtailment of certain activities depending upon which drought emergency phase has been declared. Water use restrictions become more stringent as the State moves fiom Phase I through Phase IV. For example, in Phases I11 and IV, the NJDEP may order selective curtailment of water use by large industrial users. In Phase IV, the NJDEP can even order selective closings of large industrial 1854 users. 5.1.2 Water Diversion In order to ensure a fair allocation of water during normal conditions, the WSMA requires the NJDEP to regulate by permit persons who divert more than 100,000 gallons per day of State waters, including surface or groundwater, for non-agricultural or non-horticultural 1855

purposes. The Department may also establish standards and procedures that diverters must follow to ensure that: (1) proper diversion methods are used; (2) only the permitted quantity is diverted; (3) the water is used only for its permitted purpose; (4) the water quality of the water source is maintained; and (5) reports concerning the diversion and use of the water are 1856 submitted. 1853

N.J.A.C. 7:19-13.3 to -13.6. N.J.A.C. 7:19-13.6.

1855 1856

N.J.S.A. 5 8 : l ~ - 5N.J.A.C. ; 7:19-2 et se4. N.J.S.A. 58:lA-5. The WSMA, however, does not give the NJDEP the authority to order a holder of a diversion permit to reduce the quantity of water currently diverted, unless the Governor declares a state of water emergency. Matter of Water Suuvlv Critical Area No. 2,233 N.J. Super. 280, 558 A.2d 1321 (App. Div. 1989).

New Jersey Environmental Law Handbook

A person who diverts 100,000 or more gallons per day of surface or groundwater for agricultural or horticultural purposes must obtain from the appropriate county agricultural agent 1857 approval of a 5-year water usage certification program. The county agent's approval is based 1858 on standards and procedures established by the NJDEP. Before the issuance of a diversion permit or water usage certificate, the public must be given notice of the application and the opportunity for a public hearing. The NJDEP will renew each permit and water usage certificate upon expiration, except that the Department may, after notice and public hearing, limit the quantity to the amount currently diverted or reasonably 1859 required for demonstrated future needs. NJDEP may issue a temporary diversion permit for diversion from a surface water or groundwater source or area that NJDEP determines to be approaching conditions that may require the commissioner to designate that area as one of critical water supply concern. Temporary permits are issued for no more than 5 years and subject to termination or modification by NJDEP upon providing advance notice of the action and its rationale. The temporary permittee is required to actively seek an alternative means of 1860 satisfying its long-term water supply needs. The WSMA prohibits the transport of water from the Pinelands National Reserve to more than 10 miles outside the boundary of the Pinelands. This prohibition does not apply to water previously transported out of the Pinelands for public water supply purposes prior to the effective date of the W S M A . ' ~ ~ ' No tax, fee, or other charge is imposed on a diversion of surface or groundwater for agricultural or horticultural purposes, including aquaculture; however, the Department may impose a fee for the cost of processing, monitoring, and administering the water usage 1862 certification program.

N.J.S.A. 58: 1A-6(a)(2). 1858 1859 1860 1861 1862

N.J.A.C. 7:20A-1.1 et sea. N.J.S.A. 58:lA-7 (a)-(b). N.J.S.A. 58:lA-7(c)-(d). N.J.S.A. 58:lA-7.1. N.J.S.A. 58:lA-7.2. Aquaculture is defined as "the propagation, rearing, and subsequent harvesting of aquatic organisms in controlled or selected environments, and the subsequent processing, packaging and marketing, and shall include, but need not be limited to, activities such as stocking, intervention in the rearing process to increase production, feeding, transplanting, and providing for protection from predators and shall not include the construction of facilities and appurtenant structures that might otherwise be regulated pursuant to any State or federal law or regulation. . . ." Id.

Water Pollution Control and Supply Violations of the WSMA, or of any rule, regulation, or order promulgated pursuant to it, are subject to injunctive action and administrative penalties of not more than $5,000 for each offense. In addition, the NJDEP may collect, in a civil action by a summary proceeding, civil I863 penalties of not more than $5,000 for each offense.

WATER SUPPLY AUTHORITIES I864 The New Jersey Water Supply Authority Act established the New Jersey Water Supply Authority, and transferred to the Authority all past and future State-owned water supply facilities, such as the Delaware and Raritan Canal Transmission Complex and the Spruce RunRound Valley Reservoir Complex. The Authority is empowered to design, initiate, acquire, construct, maintain, and operate water supply projects. The North and South Jersey Water Supply Districts were created by statute, dividing the State into two water supply districts and establishing a water supply commission for each 1865 district. These commissions may develop, acquire, and operate a new water supply or an additional water supply for the municipalities located within the district. Local governments may enter into long-term contracts with private firms for the provision of water supply services, under 1866 the New Jersey Water Supply Public-Private Contracting Act. Under a statute and regulations that provide for the improvement and acquisition of small 1867 whenever any small water company is found to have failed to comply with water companies, an order from the NJDEP concerning the availability or potability of water, the provision of water at adequate volume and pressure, or an unstayed order finding the company to be a significant non-complier or requiring abatement of a serious violation of the WPCA, the NJDEP, together with the Board of Public Utilities, must conduct a public hearing to determine the appropriate actions to be taken. Authorized actions include making all improvements necessary to comply with the order or requiring the acquisition of the small water company by a suitable public or private entity. 1868 Finally, the Safe Dam Act and its regulations authorizes the NJDEP to regulate the construction, inspection, repair, and safety of dams and reservoirs and requires the Department to

5.2

1863 1864 1865 1866 1867 1868

N.J.S.A. 58:lA-16. N.J.S.A. 58:lB-1 et sea. N.J.S.A. 58:5-1 et sea. N.J.S.A. 58:26-19 et sea. N.J.S.A. 58:ll-59 to -63.4; N.J.A.C. 7:19-5.1 et sect. N.J.S.A. 58:4-1, etm.;N.J.A.C. 7:20-1.1 et sea.

New Jersey Environmental Law Handbook establish a periodic dam safety inspection and reporting procedure. In addition, the statute provides for a hearing on petitions protesting the abandonment or removal of any reservoir, body of water, or dam. 5.3 SAFE DRINKING WATER ACT The regulation of pollutants in drinking water supplies is governed by the New Jersey Safe Drinking Water Act ( s D w A ) . ~ ~The ~ ~ SDWA authorizes the NJDEP to promulgate and enforce regulations to purifjr drinking water prior to its distribution and to assume primary 1870 enforcement responsibility under the federal Safe Drinking Water Act. The goals of the SDWA are accomplished through the imposition of primary and secondary drinking water standards upon drinking water suppliers, limits on hazardous contaminants in drinking water, and standards for the construction of public water systems. 5.3.1 Primary Drinking Water Standards 1871 The NJDEP has adopted the National Primary Drinking Water Standards as New Jersey's primary standards. The federal primary drinking water standards generally apply to all "public water systems" which provide piped water for human consumption and which have at least 15 service connections, or regularly serve an average of at least 25 individuals daily for at least 60 days per year. The primary drinking water standards establish Maximum Contaminant Levels (MCLs) for turbidity, microbiological contaminants, certain organic and inorganic chemicals, and radioactivity in drinking water supplied by public water systems. The standards also establish treatment techniques to be used to meet the MCLs, as well as schedules for required periodic testing of drinking water supplies to determine compliance with these MCLs and reporting the testing results to the State. The primary drinking water standards also contain special MCLs and monitoring requirements for a specific list of volatile organic compounds. These special regulations are only applicable to: (1) community water systems, defined as public water systems which serve at least 15 service connections used by year-round residents, or regularly serve at least 25 year-round residents; and (2) non-transient, non-community water systems, which are public water systems that regularly serve at least 25 of the same persons over 6 months per year. The NJDEP has established more stringent MCLs and testing schedules for a few of the contaminants covered by

1869

1870 1871

N.J.S.A. 58:12A-1 et sea. New Jersev Builders Ass'n v. Dev't of Envt'l Prot., 169 N.J. Super. 76, 404 A.2d 320 (App. Div.), certif. denied, 81 N.J. 402,408 A.2d 796 (1979). 42 U.S.C. 53OOf et sea. N.J.A.C. 7:lO-5.1 et sea., adopting 40 C.F.R. $141.

Water Pollution Control and Supply the federal standards and also has required non-public water systems to meet more stringent 1872 MCLs and testing standards for coliform bacteria. The standards require that any public water system report to the State any failure to comply with primary drinking water regulations, within 48 hours of discovery. If a public water system fails to comply with applicable MCLs or applicable monitoring requirements, it must give notice to customers, by direct mail, and to the general public. The public water system must repeat this notification every 3 months for as long as the system is not in compliance. 5.3.2 Secondary Drinking Water Standards 1873

The NJDEP has established secondary drinking water standards which set upper and lower limits for any substance and for certain characteristics, such as color or pH, that affect the taste, odor, or appearance of drinking water. The secondary limits are not enforceable but are only recommended standards that water supply authorities may refer to in determining the suitability of drinking water supplies. Nevertheless, the NJDEP has established a schedule under which public water systems must test their drinking water supplies for the characteristics covered by the secondary limits. 5.3.3 Standards for the Construction of Public Water Systems The NJDEP has promulgated regulations which govern the design and construction of water supply systems. Public community water systems must seek prior approval from the NJDEP for any construction of a new water system or for any substantial modification of an 1874 existing water system. The regulations also provide standards for the construction of public community water systems which cover well installation, pumping station specifications, distribution system standards, chemical handling and feeding, as well as filtration, disinfectant, and pretreatment standards. While public non-community and non-public water systems do not need NJDEP approval prior to construction of a new water system, such water systems are subject to a ,1875 separate set of construction standards. 5.3.4 Enforcement and Penalties The NJDEP is empowered to issue orders requiring compliance with the SDWA and to assess civil administrative penalties of up to $5,000 for the first offense, $5,000 to $10,000 for the second offense, and up to $25,000 for subsequent offenses. Each day a continuing violation is 1872 1873 1874 1875

See N.J.A.C. 7:lO-5.1et sea. N.J.A.C. 7:lO-7.1et sea. N.J.A.C. 7:lO-11.1et sect. N.J.A.C. 7:lO-12.1et seQ.

New Jersey Environmental Law Handbook not corrected, subsequent to receipt of an order to cease the violation, constitutes a separate violation. The NJDEP also may institute a civil action for injunctive relief to prohibit or prevent violations of the SDWA or its regulations and the court may impose a fine of up to $10,000 for any violation of the SDWA, an administrative or court order, or for failure to pay an 1876

administrative penalty. 5.4 SURFACE WATER QUALITY CRITERIA 1877

1878

In conformance with the CWA, federal water quality standards regulations, the 1879 1880 Water Pollution Control Act, and the Water Quality Planning Act, the NJDEP has established water quality standards and criteria for all surface waters, including fiesh and salt 1881 water, in order to protect and enhance the quality of those waters. The NJDEP has also established standards to which wastewater must be treated before discharging it to various waters 1882 of the State. The regulations establish several classes of waters to which the applicable water quality standards and criteria apply. NJDEP assigns classifications to specified segments of every river or stream and other bodies of water. There are two classes of fresh waters: FW1 waters are fresh waters originating in relatively pristine areas such as State or federal parks, and which are not subject to any man-made wastewater discharges. FW1 waters are highly protected by water 1883 quality criteria which require maintenance of these waters in their natural state. FW2 waters are all other fresh surface waters that do not qualify as FWI waters. While the quality of these waters is protected, so that no degradation of existing water quality occurs, the standards are less stringent than for FW 1 waters.

N.J.S.A. 58:lOA-1 et seq. 33 U.S.C. $ 1313(c). 40 C.F.R. $ 131. N.J.S.A. 58:lOA-1 et sect. N.J.S.A. 58:12A-10. N.J.A.C. 7:9B-1.1 et sect. The NJDEP's authority to promulgate these standards was upheld in New Jersey Bldrs. Ass'n v. Deo't of Envt'l. Prot., 169 N.J. Super. 76,404 A.2d 320 (App. Div.), certif. denied, 81 N.J. 402, 408 A.2d 796 (1979). Effective April 17, 1998, the NJDEP revised its water quality standards to emphasize a watershed-based approach and to increase public participation. R.1998 d.234, effective April 17,1998. N.J.A.C. 7:14A-5.1 to 5.3. N.J.A.C. 7:9B-1.14.

Water Pollution Control and Supply Additionally, specific waters may be designated as "Category One" or "Cl" waters on the basis of characteristics such as aesthetic value, ecological significance, recreational significance, or exceptional water supply significance, even where those waters are not, for instance, already 1884 highly protected as FW1 waters. Category One waters are subject to additional protections 1885 and special procedures under the water quality standards, including an antidegredation policy, 1886 Moreover, Category One for modification of effluent limitations are applicable to discharges. status triggers special protections under other regulatory programs, including the NJPDES program, and the stormwater, wetlands, and other land use regulations. For instance, the stormwater regulations establish "special water resource protection areas" or buffer zones, in which new development is highly restricted, along the banks of Category One waters and their 1887 upstream tributaries. The surface water quality regulations designate appropriate uses for each class of surface waters, and regulate discharges to maintain the water quality. The NJDEP applies the relevant 1888 water quality criteria to maintain the quality of FW1 waters to allow for the following uses: set aside for posterity to represent the natural aquatic environment and its (1) associated biota; (2) primary and secondary recreation; maintenance, migration, and propagation of the natural and established (3) aquatic biota; and (4) any other reasonable uses. The surface water quality criteria also apply on the basis of the specific classifications. These criteria vary, depending upon the classification of a stream segment. The criteria specify allowable concentrations of bacteria, oxygen levels, pH levels, solids content, temperature levels, and maximum allowable concentrations of specific substances and toxic pollutants, sometimes 1889

varying with the classification applied to the body of water. In instances where the surface water quality standards are not met even after point sources of pollution install the required controls, the CWA requires the State to develop total

1884 1885 1886 1887 1888 1889

N.J.A.C.7:9B-1.4, 1.15. N.J.A.C.7:9B-1.5(d). N.J.A.C.7:9B-1.8. N.J.A.C. 7:8-5.5(h). N.J.A.C.7:9B-1.12. N.J.A.C. 7:9B-1.14.

New Jersey Environmental Law Handbook 1890

A TMDL quantifies the maximum amount of a single maximum daily loads (TMDLs). pollutant a waterbody can receive and still meet the SWQS, taking into consideration point and nonpoint sources of pollutants, natural background levels, seasonal variations, and surface water 1891 withdrawals. Wasteload allocations for point sources and load allocations for nonpoint sources are used to meet the goals established by the TMDLs. To control nonpoint sources, load allocations identi@ categories of nonpoint sources and measures to control 'them, for instance 1892 stormwater management mechanisms. NJDEP has established TMDLs for several hundred bodies of water and specified segments of bodies of water. Contaminants and conditions most often of concern are bacterial pathogens, nutrients such as phosphorous which cause excessive 1893

algae growth, metals, various chemicals, and temperature and pH exceedences. Surface water quality regulations affect the public through the NJPDES discharge to surface water permits for point sources of pollution. Normally, the conditions of such individual discharge permits include technology-based effluent limitations. If the technology-based effluent limitations are insufficient to meet or maintain the water quality standards applicable to the classification assigned to the particular stream, the NJDEP must impose more stringent water 1894 quality-based effluent limitations. These water quality-based effluent limitations are designed so that the quality of the waters receiving a discharge will meet the standards and 1895 criteria established for that classification after the introduction of the proposed discharge. The regulations provide mechanisms for either modifjmg the established water qualitybased effluent limitations, or for reclassifying specific segments of a water body for less 1896 restrictive uses or classifications. The regulations set out the standards that must be met to 33 U.S.C. 9 1313(d). Id. 40 C.F.R. 130.1 et serq.; N.J.A.C. 7:15-7. USEPA published a new TMDL rule in July 2000, but it was subsequently withdrawn. The prior regulations, initially adopted in 1992, therefore remain in effect. 68 Fed. Reg. 13607 (Mar. 19,2003). Biennially since 2002, NJDEP has prepared and submitted an integrated report to the EPA to satisfy the state's obligation to identify impaired waterways under 33 U.S.C. 5 1313(d) and its general water quality reporting obligations under 33 U.S.C. 1315@). The proposed 2006 report lists over 600 impaired or threatened waterways for which TMDLs have not yet been formulated. A September 2002 memorandum of agreement with USEPA Region I1 establishes a schedule of priority for NJDEP's implementation of the remaining TMDLs, by water body and contaminant. For more information, see the NJDEP's TMDL website, http://www.state.nj.us/dep/watershedmgt/tmdi.htm, and 2006 water quality report page, http://www.state.nj.us/dep/wmm/sgwqt/wat/integratedlist/integratedlist2OO6. htrnl. N.J.A.C. 7:9B-1.6; N.J.A.C. 7:14A-11.2. N.J.A.C. 7:9B-1.4. N.J.A.C. 7:9B-1.8 to 1.10.

Water Pollution Control and Supply obtain a modification of an effluent limitation or to reclassify a segment of a water body. The 1897 reasons that will support such a change include, among others: The water quality criteria, or the existing designated use, are not attainable (1) because of natural background; and The water quality criteria or existing designated use are not attainable (2) because of irretrievable conditions induced by human activity.

GROUNDWATER QUALITY CRITERIA In order to protect the quality of groundwater resources, the NJDEP has promulgated 1898 groundwater quality standards and criteria similar to those applicable to surface water. New Jersey has three groundwater classifications: 1) Class I Ground Water of Special Ecological Significance; 2) Class I1 Ground Water for Potable Water Supply; and 3) Class I11 Ground Water with Uses Other Than Potable Water Supply. These classifications are based upon natural concentrations of dissolved solids, hazardous and toxic substances, and the uses of the 1899 groundwater. The regulations also designate appropriate uses for each class of groundwater. The groundwater quality regulations are thus designed to protect the quality of water in 1900 each class, to maintain its designated uses, with limited exceptions. The groundwater quality 1901 criteria set specific constituent standards for dozens of pollutants. Since every discharger to groundwater must obtain a NJPDES permit, the application of groundwater quality-based effluent limitations through permit conditions is the regulatory mechanism whereby the NJDEP ensures the maintenance of groundwater quality criteria. For new dischargers or existing dischargers seeking to modify their discharge, where existing groundwater quality is consistently better than the applicable criteria limits, the NJDEP imposes as permit conditions effluent limitations designed to protect the high quality of that groundwater. Where the existing quality is equal to or worse than the applicable criteria, the NJDEP may impose effluent limitations on permits for new or modified discharges designed to attain or 1902 maintain the applicable quality criteria limits. Where existing groundwater quality does not meet the quality criteria for that class, primarily because of human activities, the NJDEP is

5.5

1897 1898 1899 1900 1901 1902

N.J.A.C. 7:9B-1.8(a), -1.9(a), -l.lO(a). N.J.A.C. 7:9C-1.1 et seq. N.J.A.C. 7:9C-1.5. N.J.A.C. 7:9C-1.6. N.J.A.C. 7:9C-1 Appendix. N.J.A.C. 7:9C-1.9.

New Jersey Environmental Law Handbook authorized to require all or some existing dischargers to undertake remediation efforts to restore 1903 the water quality or to contain the contamination to a small area. The Department may also determine that a localized area of groundwater deterioration constitutes a Classification 1904 Exception Area, with restrictions on its use and recorded notice to all future users. In cases where the existing groundwater quality is better than the applicable criteria, the NJDEP may impose antidegradation limits in order to protect those high-quality waters from 1905

Such antidegradation limits are used for the development of constituent degradation. 1906 standards applicable to dischargers, as modified by N.J.A.C. 7:9-6.9(a) and (b). There also is a procedure for reclassifjmg an area of groundwater so that less restrictive designated uses and thus less stringent criteria will apply. In order to obtain a reclassification of 1907 groundwater, the discharger must show that: the designated use cannot be maintained in the subject area; (1) based upon an analysis of background water quality of constituent (2) standards in downgradient areas and of groundwater flow vectors and gradients, contaminant attenuation, flow barriers, and potential for induced movement, the reclassification will not result in significant risk of (i) impairment to existing uses of groundwater; (ii) degradation of downgradient surface water quality andlor (iii) harm to public health and safety; and the subject area has the characteristics of the less stringent classification. (3)

1903 1904 1905 1906 1907

Id. N.J.A.C. 7:9C-1.6. N.J.A.C. 7:9C-1.8.

Id. N.J.A.C. 7:9C-1.10.

CHAPTER VIII LAND USE REGULATION 1.0 1.1

GENERAL LAND USE REGULATION MUNICIPAL LAND USE LAW 1908 The Municipal Land Use Law (MLUL) provides for the delegation of authority to regulate land use to individual municipalities. This authority is implemented through the organization of municipal land use "agencies," such as the planning board or zoning board of adjustment, or the governing body of a municipality when it is acting pursuant to the authority of the MLUL, as well as any agency created by or responsible to such municipality when likewise 1909 acting in accordance with the MLUL. Each of these agencies serves a well-defined role in the municipal regulation of land use, and together are designed to effectively provide for sound planning and zoning practices in each municipality. The zoning board of adjustment has primary or "original" jurisdiction to interpret zoning ordinances and the boundaries established by the municipality's zoning map, and decide other 1910 special questions relating to the zoning ordinance. Within its original jurisdiction, the board of adjustment also has the power to grant variances, which fall into two broad categories of "c" 1911 In the limited instance of "d" or "use" or "bulk" variances, and "d" or "use" variances. variances, the board of adjustment also enjoys certain ancillary powers which are traditionally reserved to planning boards, such as the power to grant site plan, subdivision, and conditional 1912 use approvals. Lastly, boards of adjustment also have jurisdiction to hear appeals of any decision made by a municipal administrative officer in connection with the interpretation or 1913 enforcement of a zoning ordinance. In comparison, the planning board's most significant function is the preparation and 1914 adoption of the master plan for land use and development within the municipality. The goal of the master plan is to ensure that the use of lands within municipal borders evolves in a manner 1908 1909 1910 1911 1912 1913 1914

N.J.S.A. 40:55D-1, et sea. N.J.S.A. 40:55D-5. N.J.S.A. 40:55D-70b. N.J.S.A. 40:55D-70c, d. N.J.S.A. 40:55D-76b. N.J.S.A. 40:55D-70a. N.J.S.A. 40:55D-28a.

New Jersey Environmental Law Handbook 1915

which protects public health and safety and promotes the general welfare of the community. In addition, the planning board has jurisdiction over site plan, subdivision, and conditional use approvals and, only in connection with such review, can exercise ancillary powers to grant "c" or 1916 "bulk" variances pursuant to N.J.S.A. 40:55D-70c. Lastly, in addition to its other enumerated powers, the planning board also has the power to review and make recommendations concerning any development regulation before it can be adopted by the governing body.

1917

The foregoing is intended simply as a summary of the most commonly exercised powers of municipal planning boards and boards of adjustment. Inevitably intertwined with the municipal regulation of land use, however, are the competing powers of the State to regulate development from both a planning and environmental perspective, especially in those instances where such development impacts natural conditions, including topography, soil conditions, water supply, drainage, flood plain areas, marshes, and woodlands, in instances where the State generally seeks to promote the conservation of open space and natural resources and prevent urban sprawl and degradation of the environment through improper land use. 1.2 STATE DEVELOPMENT AND REDEVELOPMENT PLAN The New Jersey State Development and Redevelopment Plan (SDRP) was adopted by the New Jersey State Planning Commission (SPC) on March 1,2001 pursuant to the State Planning 1918 The SDRP sets forth policy objectives and guidelines for development Act of 1985 (the Act). and redevelopment of real property throughout the State, and was designed for "use as a tool for 1919 assessing suitable locations for infrastructure, housing, economic growth, and conservation." In practice, the SDRP serves as a guide to be considered by counties and municipalities when preparing their master plans, thereby influencing planning decisions at lower levels of government with the hopes of bringing them into conformance with State objectives. The SDRP divides the State into discrete geographical areas and sets forth development policy objectives for these areas. For example, most of northeastern New Jersey has been identified as Metropolitan Planning Areas, while northwestern New Jersey consists of primarily Rural Planning Areas. Furthermore, the SDRP encourages municipalities to subdivide Planning

1915 1916 1917 1918 1919

Id. N.J.S.A. 40:55D-25a(2); N.J.S.A. 40:55D-60a. N.J.S.A. 4055D-26a. N.J.S.A. 52:18A-196 et s e a N.J.S.A. 52:18A-196~.

Land Use Regulation Areas into Centers and Environs. Policy objectives are markedly different depending on the Planning Area designation and subdivision type. The SDRP sets forth eight fundamental Planning Goals and Strategies: (1) revitalize the State's cities and towns; (2) conserve the State's natural resources and systems; (3) promote beneficial economic growth, development and renewal for all residents of New Jersey; (4) protect the environment, prevent, and clean up pollution; (5) provide adequate public facilities and services at a reasonable cost; (6) provide adequate housing at a reasonable cost; (7) preserve and enhance areas with historic, cultural, scenic, open space, and recreational value; and (8) ensure sound and integrated planning and implementation statewide. These eight Planning Goals and Strategies are in furtherance of the overall "General Plan Strategy" of the SDRP which is to achieve State planning goals by coordinating public and private actions to guide future growth into compact, ecologically designed forms of development and redevelopment and to protect the environs, consistent with the Statewide Policies and the State Plan Policy Map. This General Plan Strategy sets forth the pattern of development necessary to achieve the foregoing goals, and reflects the basic objectives of the Act to encourage development in suitable areas, reduce sprawl, and utilize sound planning with considerations of infrastructure. Although the SDRP is a Statewide plan, its goals and objectives are implemented through a local community's consideration and utilization of SDRP principles in its formulation of 1920 Currently, the State Plan has no regulatory effect and master plans and zoning ordinances. the SPC has no authority to implement or enforce the SDRP against counties or 1921 Through the process of cross-acceptance, however, the Act provides local municipgities. governments with the technical resources and guidance necessary to foster the development of land use programs based on sound planning information and practice, and to facilitate the 1922 development of local plans that are consistent with State plans and programs.

1920

1921

1922

N.J.S.A. 52:18A-196 et s e a New Jersev Builder's Assoc. v. New Jersev Devt. of Environmental Protection, 306 N.J. Super. 93, 96-97, 696 A.2d 71 (App. Div. 1997). N. J.S.A. 52: l8A-202.1d; "Cross-acceptance" is a unique approach to planning, designed to encourage consistency between municipal, county, regional, and State plans to create a meaningful, up-to-date and viable State Plan. To that end, the cross-acceptance process .is designed to elicit the greatest degree of public participation in order to encourage the development of a consensus among the many, sometimes competing, interests in the State. On April 28, 2004, the SPC approved the release of the "Preliminary State Development and Redevelopment Plan" and the "Preliminary State Plan Policy Map," thereby launching the third-round of cross-acceptance. During the cross-acceptance process, participants compare provisions and maps of local, county, and regional plans and regulations with those of the SDRP and work to identify and agree on ways to improve consistency among the plans.

New Jersey Environmental Law Handbook To further this objective, the Act created the SPC to assist local government, counties, 1923 and State agencies in coordinating their planning efforts. If desired, a municipality can request review of its local development plan by the SPC which, in turn,will endorse plans that are consistent with the SDRP. Benefits of having a plan endorsed by the SPC include a higher priority over non-endorsed plans for discretionary State funding, and expeditious review of consistent projects by State agencies. In addition, at least one court has held that a municipality's voluntary compliance with the State Plan should be a significant factor in determining the validity of a zoning or re-zoning 1924 the Township of Mount ordinance. In Mount Olive Complex v. Township of Mount Olive, Olive rezoned property located in the State Plan's "Planning Area 5" from single family 1925 dwellings on small lots to one residential unit per five acres. In making its zoning changes, the Township relied upon a Master Plan re-examination report stating that the most important concept in the State Plan, from the Township's perspective, was to concentrate much of the new 1926 development in areas already serviced by sanitary sewer and infrastructure. Plaintiff, a partnership consisting of experienced developers, secured approval for development in an undeveloped portion of the Township in the 1970s and challenged the rezoning of its 1927

The trial court struck down the Township's 5-acre zoning as overly restrictive. property. However, the Appellate Court reversed, holding that the Township's ordinance advanced the 1928 goals of the State Plan and the Municipal Land Use Law and was developed for that purpose. 1.3 BEACH REGULATION Municipalities bordering on the Atlantic Ocean, tidal water bays, or rivers which own or have easement rights in and to land devoted to recreation and/or other public purposes along 1929

these waterways are given exclusive control to regulate their use and maintenance. The municipalities are also given exclusive control over the facilities constructed or provided on these lands (any boardwalk, bathing and recreation facility, safeguards, and equipment). Municipalities are authorized to charge registration and reasonable access fees related to the

1923 1924 1925 1926 1927 1928 1929

N.J.S.A.52:lgA-199. 340 N.J. Super. 51 1,774 A.2d 704 (App. Div. 2001).

Id. Id. Id. Id. N.J.S.A.40:61-22.20.

Land Use Regulation 1930

costs of operation of these recreational lands or facilities. In determining reasonable fees for beach users, municipalities may consider all additional costs legitimately attributable to 1931 operation and maintenance of the municipality's beachfiont. However, a borough's price structure for beach fees cannot disproportionately discriminate against nonresidents by imposing 1932

inequitably high fees on daily and weekend users. In addition, the statute prohibits municipalities fiom charging fees to children under the age of 12, and authorizes municipalities 1933 to waive or reduce fees for senior citizens or disabled citizens. The foregoing rights stem from the English common law public trust doctrine - the principle that all land covered by tidal waters belongs to the sovereign held in trust for the 1934

people. Over the years, New Jersey's courts have extended the right of the public in tidal 1935 lands "to recreational uses, including bathing, swimming, and other shore activities." This, in turn, has been interpreted to extend to not only to the right to bathe and swim below the mean 1936 high water line, but also to enjoy dry sand beach adjacent thereto. In other words, reasonable access to the sea and the right to cross the dry sand beach is an integral component of the public . 1937 trust doctrine. This concept was examined by New Jersey's Supreme Court in the Raleih Avenue 1938 Beach Ass'n v. Atlantic Beach Club, Inc. In Raleih, the Court was faced with the question of whether the actual use and enjoyment of the dry sand beach ancillary to the use of the ocean 1939 for recreational purposes is implicit in the rights held in public trust. In answering this question, the Court looked back to the State Supreme Court's earlier decision in Matthews v.

Municipalities, however, are not permitted to discriminate between residents and nonresidents. See Borough of Nevtune City v. Bor. of Avon-bv-the-Sea, 61 N.J. 296, 294 A.2d 47 (1972) (municipality is prohibited from charging nonresidents higher fees than residents for the use of its beach area); Van Ness v. Borough of Deal, 78 N.J. 174, 393 A.2d 571 (1978) (municipality is prohibited from limiting use of municipally owned beach to residents only). Slocum v. Borough of Belmar, 238 N.J. Super. 179,569 A.2d 312 (Law Div. 1989).

Borough of Nevtune Citv v. Bor. of Avon-by-the-Sea, 61 N.J. 296,303 (1972). Id. at 304. Matthews v. Bay Head Improvement Ass'n, 95 N.J. 306,322-23 (1984). Raleigh Avenue Beach Ass'n v. Atlantic Beach Club, Inc., 185 N.J. 40 (2005). Id. Id. at 53. -

New Jersey Environmental Law Handbook Bay Head Improvement Ass'n in 1984, which made it clear that a "bather's right in the upland sands is not limited to passage . . . [and that] [rleasonable enjoyment of the foreshore and the sea 1940 cannot be realized unless some enjoyment of the dry sand area is also allowed." Unlike earlier cases governing the municipal regulation of beaches, the Matthews and Raleigh decisions involved privately owned beaches which sought to impose restrictions to prevent enjoyment by all members of the public. The Court in Matthews established a framework for the application of the public trust doctrine to these private beach scenarios, which is rooted in the concept that "public use of the upland sands is 'subject to accommodation of the 1941 The Raleigh Court applied the factors identified in Matthews in interests of the owner'." order to determine what portion of the privately owned dry sand area must be available to satisfy 1942 the rights of the public under the public trust doctrine. In the end, the Court in Raleigh determined that the general public had the right to not only cross, but also to use and enjoy, the upland dry sand beach adjacent to the ocean, primarily in light of the fact that there were no other publicly owned beaches in the area, the enormous public demand, the existence of prior CAFRA permits for adjoining residential developments which were conditioned upon providing access to the beach and the current owner's use of the beach as a business enterprise (access to 1943 In return, the private property owner had the right to charge reasonable fees members only). for beach access (to cover the costs of maintenance, management, life guards, etc.), subject to the 1944 jurisdiction of the NJDEP in setting those fees. SOIL CONSERVATION, EROSION, AND SEDIMENT CONTROL 1.4 The State Soil Conservation Committee in the Department of Agriculture provides for the 1945

division of New Jersey into soil conservation districts. A statute sets forth the powers and duties of both the Committee and the respective soil conservation districts in promoting soil 1946

conservation.

Id. (quoting Matthews, 95 N.J. at 325). Id. at 54-55 (quoting Matthews, 95 N.J. at 325-26). Id. at 55. Matthews identified the following four criteria for a case-by-case consideration to determine the appropriate level of accommodation affording private ownership rights in dry sand beaches: (i) location of the dry sand area in relation to the foreshore; (ii) extent and availability of publicly owned upland sand area; (iii) nature and extent of the public demand; and (iv) usage of the upland sand by the owner. Matthews, 95 N.J. at 326. Raleigh, 185 N.J. at 59-60. Id. at 61-62. N.J.S.A. 4:24-17.5. N.J.S.A. 4:24-1, et sect.

Land Use Regulation Subject to the approval of the Department of Agriculture and the NJDEP, the Soil 1947 authorizes the State Soil Conservation Committee to adopt Erosion and Sediment Control Act standards for the control of soil erosion and sedimentation. The purpose of this legislation is to directly address the growing impact of land development and changes in land use from agricultural/rural to more urbanized uses which has accelerated the process of soil erosion and sediment deposition in waters of the State, thereby causing damage to domestic, agricultural, 1948 industrial, recreational, fish and wildlife, and other resource uses. In order to prevent pollution to State waters resulting from soil erosion, any "application for development" for any "project" within the State must be conditioned on a plan for soil erosion and sediment control certified by the local district. The Act defines "application for development" as any proposed subdivision of land, site plan, conditional use zoning variance, planned unit development, or construction permit; and a "project" as a disturbance of more than 5,000 square feet of surface 1949 area. Violations of the provisions of this statute or regulations promulgated pursuant to it may be enjoined by injunctive relief. Those who violate these provisions or regulations can be 1950 fined from $25 to $3,000 per day while the violation continues. 1.5 THE CONSTRUCTION PERMIT STATUTE 1951 The Construction Permit Act, which supplements the Department of Environmental 1952 directs the NJDEP to promptly process applications for certain Protection Act of 1970, defined "construction permits," including approval of waterfront development plans, certain permits for activities regulated pursuant to the Wetlands Act of 1970, the Coastal Area Facility Review Act and the Flood Hazard Area Control Act, and treatment works approvals for 1953

construction, change, improvement, alteration, or extension of sanitary sewer systems. The NJDEP is required to approve, conditionally approve, or disapprove a construction permit application within 90 days following the date the application has been accepted for filing and deemed complete, unless a 30-day extension is agreed to by the applicant and the NJDEP. Pursuant to the regulations, an application will either be accepted for filing and proceed to

N.J.S.A. 4:24-39, et sea. N.J.S.A. 4:24-40. N.J.S.A. 4:24-41g. N.J.S.A. 4:24-53. N.J.S.A. 13:lD-29, et sea. N.J.S.A. 13:lD-1, et sea. N.J.S.A. 13:lD-29b; see also N.J.A.C. 7:lC-1.1 et sea.

.

New Jersey Environmental Law Handbook

technical review, or returned to the applicant without filing along with a written request for additional information, within twenty (20) days of the NJDEP's receipt of an application for a 1954 construction permit. The NJDEP's failure to take action on a permit application within the 90-day period constitutes an approval of that application (to the extent that such approval does not violate other statutes or regulations), however, it has been held that failure of the NJDEP to notify an applicant of its disapproval of an application within 90 days does not lead to automatic approval of the 1955 application. Where a project requires more than one type of construction permit, the approval of any one permit shall be conditioned upon the applicant obtaining approval for the remaining necessary permits.

1956

2.0 SPECIAL LAND USE REGULATION 2.1 COASTAL AND WATERFRONT DEVELOPMENT 2.1.1 Coastal Area Facility Review Act Introduction The Coastal Area Facility Review Act (cAFRA)~'~~ was originally enacted in 1973 to limit the environmental harm caused by the development of New Jersey's coastline. The Legislature, however, also acknowledged a need to balance limits on development against the 1958 "legitimate economic aspirations of the inhabitants" of the coastal zone. Accordingly, CAFRA's underlying policy goal was not just to protect the coastline, but rather to "encourage the development of compatible land uses in order to improve the overall economic position of 1959 the inhabitants." To achieve this goal, CAFRA established a permitting program to regulate 1960 certain kinds of coastal construction activities. In 1993, the Legislature perceived a need for even greater control of coastal development in order to avoid the adverse economic, social, and aesthetic effects of unregulated development

1954 1955

1956 1957 1958 1959 1960

N.J.A.C. 7:lC-1.7. N.J.S.A. 13:lD-32; see also DiDonato v. Wildwood Municipal Bodv Comorate and Politic, 194 N.J. Super. 83,476 A.2d 297 (App. Div. 1984). N.J.A.C. 7: 1C-1.8(~). N.J.S.A. 13:19-1, et sect. N.J.S.A. 13:19-2. N.J.S.A. 13:19-2. N.J.S.A. 13:19-5.

Land Use Regulation 1961

in sensitive coastal areas. In response, CAFRA was substantially amended (most of which 1962 amendments were effective July 19, 1994) in order to tighten existing regulatory thresholds for the issuance of permits pursuant to CAFRA, and to provide enhanced protection of water 1963 quality, habitat, and wildlife within these areas of increased regulatory review. These amendments directed the NJDEP to adopt implementing regulations by the effective date, 1965 the NJDEP responded by rewriting the CAFRA permitting program.

1964

and

The most significant of these amendments was to replace the original CAFRA definition of "facility" with a definition of "development." The impact of this amendment, however, was much more than a mere name change and resulted in a tremendous expansion of the NJDEP's regulatory jurisdiction over coastal development. The term "facility" had originally been defined under the 1973 CAFRA statute to include certain industrial and public facilities and, most importantly, housing developments of 25 or more units. In contrast, the definition of 1966 "development" in the 1994 CAFRA amendments eliminated exemptions for (1) certain residential projects under 25 units, (2) some industrial and public facilities, and (3) many 1967

commercial developments (e.g., strip shopping centers, restaurants, office buildings, etc.). In 1968 addition, the amended CAFRA provides stiffer penalties for offenders, greater freedom for 1969 the NJDEP in designing the permitting program, and the abolition of the Coastal Area 1970 Review Board. The 1994 CAFRA amendments gave NJDEP sweeping control over development in 1971 regulated coastal zones, through its application of the Coastal Permit Program rules and the

N.J.S.A. 13:19-2. CAFRA was amended July 19,1993, effective July 19, 1994. 1993 N.J. Sess. Law Sew. Ch. 190 at 553 (West); N.J.S.A. 13:19-2 (Assembly Environment Committee Note). N.J.S.A. 13:19-17(b). Coastal Permit Program Rules, 26 N.J.R. 2934(a) (July 18, 1994). The 1994 amendments to CAFRA are sometimes referred to as "CAFRA II". N.J.S.A. 13:19-2 (Assembly Environment Committee Note); see also N.J.S.A. 13:19-3,5. N.J.S.A. 13:19-18. N.J.S.A. 13:19-5.1,6,9. N.J.S.A 13:19-13.1. N.J.A.C.7:7-1.1 et sea.

New Jersey Environmental Law Handbook 1972

The Coastal Permit Program rules establish the procedures Coastal Zone Management rules. 1973 In by which the NJDEP reviews permit applications and appeals from permit decisions. comparison, the Coastal Zone Management rules provide the substantive basis upon which the NJDEP will review permit applications relating to the use and development of coastal 1974

resources. Applicability 1975 CAFRA applies whenever a proposed development meets the location and category 1976 requirements set forth in CAFRA 55, N.J.S.A. 13:19-5. If a development meets these requirements, the developer must comply with the Coastal Permit Program rules and the Coastal Zone Management rules relating to CAFRA, or otherwise find an applicable exemption from the requirement to obtain a CAFRA permit. As a threshold matter, CAFRA jurisdiction extends only to developments within (or 1977 an area that "extends from the confluence of within a defined proximity of) the "coastal area," the Cheesequake Creek and Raritan Bay in Middlesex County, along the Atlantic Ocean coastline around Cape Map to the Delaware Bay, and then northwest along the Delaware River to Pennsville, Salem County (the Kilcohook National Wildlife Refuge). It includes all riparian, tidelands, and coastal wetlands acreage, encompassing 1,376 square miles of land area, and ranges in width from a few thousand feet to 24 miles, totaling 18 percent of the State's land 1978 area." The 1993 CAFRA amendments removed a small area that also lies within the jurisdiction of the Pinelands Commission. The extent of CAFRA jurisdiction is further divided into the following four general areas of development: (i) beaches and dunes; (ii) the "150-foot" zone extending 150 feet inland from the landward limit of any beach, dune, or the mean high water line of any tidal waters, whichever is most landward; (iii) the "500-foot" zone lying between the landward limit of the 150-foot zone

N.J.A.C. 7:7E-1.1 et sea. N.J.A.C. 7:7-1.1 (a). Within the ambit of the Coastal Permit Program rules are permits relating to CAFRA, wetlands, and waterfront development. N.J.A.C. 7:7E-l.l(a). The term "development" is broadly defined to mean the construction, relocation, or enlargement of any building or structure and all site preparation therefor, the grading, excavation or filling on beaches or dunes, and shall include residential development, commercial development, industrial development, and public development. N.J.S.A. 13:19-3. See

N.J.A.C. 7:7-2.1.

N.J.S.A. 13:19-4. 26 N.J.R. 918(a), 919 (Feb. 22,1994).

Land Use Regulation

and that point which is 500 feet inland from the landward limit of any beach, dune, or the mean high water line of any tidal waters, whichever is most landward; and (iv) the "inland zone" lying 1979. inland of the 500-foot zone. Generally speaking, within the beach and dune zone, all development needs a CAFRA 1980 permit. Within the other zones, however, the need for a permit depends on the nature of the development and its surroundings. For example, within the 150-foot zone, a CAFRA permit is required for development if 1981 1982 there is no intervening development between the site and the mean high water line. If an intervening development exists, a permit is necessary for residential developments of three or more dwelling units; commercial developments with five or more parking spaces; and public or 1983 industrial developments. The level of development which triggers the requirement for a CAFRA permit may be reached either by a single proposed application, or may be triggered in 1984 conjunction with previous development. Within the 150-500 foot zone, a permit is generally required for residential developments of 25 or more dwelling units; commercial developments with 50 or more parking spaces; and 1985 public or industrial developments. CAFRA relaxes these requirements within the inland zone (beyond 500 feet) for municipalities that qualify for urban aid and for large seaside or summer resorts. For these communities, the requirements for a permit are limited to residential

N.J.S.A. 13:19-5; N.J.A.C. 7:7-2.1(a). N.J.S.A. 13:19-5(a). For the most part, development is prohibited on beaches or dunes, except for that which has no practicable or feasible alternative, and which will not cause significant adverse long-term impacts on the natural functioning of the beach or dune. N.J.A.C. 7:7E-3.16(b), N.J.A.C. 7:7E-3.22(b). In practice, however, this exception is rarely a viable option. There also exist exceptions for certain minor activities on beaches or dunes, but which fall well short of traditional development (e.g., removal of structures and linear development). See N.J.A.C. 7:7E-3.16(b), N.J.A.C. 7:7E-3.22(b). Whether an existing development is considered an "intervening development" is determined in accordance with N.J.A.C. 7:7-2.1(b)l. N.J.S.A. 13:19-5(b)(1). N.J.S.A. 13:19-5(b)(2)-(4). N.J.S.A. 13:19-5(b). Generally speaking, "previous development" includes developments that were constructed after September 19, 1973. A development will be deemed to be "in conjunction with previous development7'to the extent it involves (a) proposed sharing of infrastructure (e.g., roads or utilities), (b) contiguous parcels that at any time on or after September 1, 1973 were under common ownership (regardless of present ownership), (c) a shared pecuniary, possessory, or other interest in contiguous parcels, or (d) the addition of one or more parking spaces or dwelling units, where such addition will cause an existing development to exceed regulatory thresholds. N.J.A.C. 7:7-2.1(b)8. N.J.S.A. 13:19-5(e).

New Jersey Environmental Law Handbook developments of 75 or more units; commercial developments with 150 or more parking spaces; 1986 and public or industrial developments. The general requirements include a series of exemptions, including a grandfather clause 1987 1988 for previously approved developments; reconstruction of damaged developments; 1989

enlargements that expand neither the footprint nor the number of dwelling units; the 1990 1991 construction of residential patios and decks; repair and improvement of public highways; 1992

and the limited expansion of amusement piers. In addition, CAFRA does not appear to apply to "seasonal or temporary structures related to the tourism industry, educational facilities, or 1993 power lines," since these are expressly excluded from the definition of public developments. As a whole, the NJDEP views its authority to regulate land use to include a review of the 1994 potential impacts of any development if at least a part thereof is regulated by CAFRA. Consequently, once CAFRA jurisdiction has been triggered, the NJDEP will review all aspects 1995 of that application, including those unrelated to CAFRA. Permits and the Permitting Process

C A F specifies ~ two kinds of permits - individual and general permits. The NJDEP has also added two other types of permits: permits-by-rule and emergency construction permits. Most larger developments will require individual permits, whereas smaller developments will often require only general permits or permits-by-rule. Under the NJDEP's permitting requirements, the first step in the application process is a 1996 pre-application review at the option of the developer. This review may be either in person (large developments) or by phone (small developments). The purpose of this review is to provide the NJDEP with an opportunity to preview the development and identify its strengths, its

N.J.S.A. 13:19-5(d). N.J.S.A. 13:19-5.2(a). N.J.S.A. 13:19-5.2(b). N.J.S.A. 13:19-5.2(~). N.J.S.A. 13:19-5.2(d). N.J.S.A. 13:19-5.2(e). N.J.S.A. 13:19-5.2(f). N.J.S.A. 13:19-3. N.J.A.C. 7:7-2.1(b). Id. N.J.A.C. 7:7-3.l(a).

Land Use Regulation 1997

The review, however, is for weaknesses, and the applicable CAFRA procedures and policies. guidance purposes only, and does not constitute a commitment of the NJDEP to approve or deny 1998 any permit application for development. A developer must next file the application itself with the Land Use Regulation Program (LURP) within the Department which, except in the instance of a CAFRA individual permit, will fall within the 90-day Construction Permit Act described in Section 1.5 above. CAFRA permit applications must contain a completed LURP application form and include, amang other things, verification that copies of the application and mailed notice have been given to the appropriate parties; fees; public notice; site photos and project plans prepared in accordance with the required regulations; either an EIS (major projects) or a Compliance Statement (minor projects); 1999 and, if applicable, a certificate from the Pinelands Commission. The Compliance Statement is an abbreviated version of an EIS. The discussions in the Compliance Statement need not be as thorough as those in an EIS, and may omit the EIS-required information such as traffic analyses, stormwater calculations, archaeological surveys, environmental inventories, and detailed 2000

construction specifications. In addition to the above requirements, NJDEP may, "in its discretion, hold a fact-finding public hearing on a coastal permit application when the Department determines that, based on public comment or a review of the project, its scope and environmental impact, additional information is necessary to assist in its review or evaluate potential impacts and that this 200 1 information can only be obtained by providing an opportunity for a public hearing." If no 2002 public hearing is held, the NJDEP must provide a 30-day period for public comments. In terms of the permits themselves, general permits are permits pre-issued by the NJDEP to cover specified categories of developments, rather than issued anew for each development in the category. The NJDEP will issue general permits for categories of developments that are 2003 likely to have only minimal effects on the environment. The requirements for an application for a general permit are less comprehensive than those for individual permit applications. To

1997 1998 1999 2000 2001 2002 2003

N.J.A.C.7:7-3.1to 3.4. N.J.A.C.7:7-3.1(a). N.J.A.C.7:7-4.2;7.7-6.1(b)(l). N.J.A.C.7:7-6.1to 6.3,6.2(d)(2). N.J.A.C.7:7-4.5(a). N.J.A.C.7:7-4.5(c). N.J.A.C.7:7-7.1(c).

New Jersey Environmental Law Handbook obtain a general permit, a developer must submit a completed LURP application form with verification that applications and notice have been given to the appropriate parties; site photos; 2004 fees; and various other site plans and information specific to the development category. No 2005 public hearing will be held, and no EIS is necessary. The NJDEP must make a decision concerning a permit application within 90 days of the application being declared complete for 2006 review. At present, general permits have been created for construction and certain development and expansions of single family or duplex homes, amusement pier expansions, beach and dune maintenance, voluntary reconstruction of certain residential or commercial development within the same footprint, bulkhead reconstruction, revetment construction at a single family or duplex lot, construction of support facilities at legally existing and operating commercial marinas, hazardous substance remediation activities undertaken with NJDEP approval, and other specified 2007 activities. With certain minor exceptions, when all aspects of a project do not qualify for a 2008 coastal general permit, then the entire project requires a CAFRA individual permit. The requirements for a permit-by-rule are simpler still. To obtain a permit-by-rule, the developer need only give the NJDEP 30 days notice of the construction, including a description of the proposed development and a copy of a building permit. Permits-by-rule presently apply to certain small expansions of single-family homes or duplexes (less than a total of 400 square feet); expansion or construction of a single-family home or duplex on a bulkhead lagoon lot; placement of public safety or ordinance signs on beaches and dunes; construction of nonresidential docks, piers, and boat ramps pursuant to a waterfront development permit; construction of a recreational dock or pier landward of the mean high water mark pursuant to a waterfront development permit; voluntary reconstruction of legally constructed, currently habitable residential or commercial development provided such reconstruction is in the same footprint; and the construction of utility lines including, cable (electric, T.V., or fiberoptic),

2004 2005 2006 2007 2008

N.J.A.C. 7:7-7.3. N.J.A.C. 7:7-7.1(~)(3). N.J.A.C. 7:7-7.3(d). N.J.A.C. 7:7-7.5 through 7.26. N.J.A.C. 7:7-7.3(i). Exceptions relate to coastal general permits for development of single-family home or duplex (N.J.A.C. 7:7-7.8); coastal general permits for expansion or reconstruction of a single-family home or duplex (N.J.A.C. 7:7-7.9); and coastal general permits for landfall activities (N.J.A.C. 7:7-7.16).

Land Use Regulation telecommunication, wastewater petroleum, natural gas, or water attached to a bridge or 2009 culvert. Lastly, NJDEP has adopted an expedited application process for emergency permit authorization. If there is a "situation which may constitute an imminent threat to lives or property" or the "potential for severe environmental degradation," the applicant can notify the NJDEP's Bureau of Coastal and Land Use Enforcement (BCLUE) by telephone. BCLUE will send an inspector to the development site if feasible, and notify the Land Use Regulation 2010 Program of its findings. The developer must also notify, in writing, both BCLUE and LURP of the proposed construction and the exigencies necessitating that construction. The determination of imminent threat shall be made by the NJDEP based on the condition of the 201 1 property at the time of such inspection. LURP has the authority to issue emergency permits, and it may do so either orally or in writing. Once LURP issues an emergency permit, the 2012 developer must follow up within 10 days with a completed coastal permit application. Substantive Requirements The substantive requirements of CAFRA are contained in NJDEP's Coastal Zone 2013 Management rules. Effectively, these regulations represent a careful balancing of various conflicting, competing, and ofken contradictory interests in the management of coastal resources and, as a result, the regulations themselves have limited flexibility in order to avoid arbitrary 2014 decision-making and unrestrained administrative discretion. Consequently, decision-making under these regulations involves the following three-step process for screening CAFRA permit 2015 applications: first, determine whether the development meets the "Location Rules"; second, 2016 2017 apply the proper "Use Rules"; and third, apply the proper "Resource Rules." During the first step in this process, the Department will examine a proposed development for compliance with the Location Rules. The Location Rules categorize all land

N.J.A.C. 7:7-7.2(a). N.J.A.C. 7:7-1.7(a)(l).

Id. N.J.A.C. 7:7-1.7(a)(2)-(4). N.J.A.C. 7:7E-1.1, et sea. N.J.A.C. 7:7E-1.5. N.J.A.C. 7:7E-6.1 et sea. N.J.A.C. 7:7E-7.1 et sea N.J.A.C. 7:7E-8.1 et sea.

New Jersey Environmental Law Handbook and water areas as either General Areas, or as one or more Special Areas. Special Areas are those areas that are so naturally valuable, important, hazardous, or sensitive as to merit special 2018 The Coastal Zone Management rules further divide Special Areas into four broad attention. 2019 2020 2021 categories: Special Water Areas, Special Water's Edge Areas, Special Land Areas, 2022

and Coastwide Special Areas. 2023 In total, the Rules designate 48 types of coastal Special Areas, together with general 2024

and special development restrictions for each. Areas not designated as one of these Special Areas are designated and regulated as General Areas, either as one of the General Water 2025 2026 Areas or as a General Land Area. If a development meets the restrictions of the Location Rules, it must next meet those of the Use Rules. The purpose of this second stage of the screening process is to ensure the proper 2027 use of coastal resources. The Use Rules are not intended to supercede the Location Rules, which restrict development based on its location, unless specifically stated. Instead, the Use Rules are designed to place conditions upon development which generally must be satisfied in 2028 addition to both the Location Rules and the Resource Rules. These Use Rules, which

N.J.A.C. 7:7E-3.l(a). N.J.A.C. 7:7E-3.2 through 3.15. These Special Water Areas extend landward to the spring high water line or the level of normal flow in non-tidal waters. Id. N.J.A.C. 7:7E-3.16 through 3.32. Special Water's Edge Areas are further divided into three subcategories depending on their location: Oceanfront, and Raritan and Delaware Bayfronts (N.J.A.C. 7:7E-3.16 through 3.19); Barrier and Bay Islands (N.J.A.C. 7:7E-3.20 and 3.21); and Coastwide Special Water's Edge Areas (N.J.A.C. 7:7E-3.22 through 3.32). Id, N.J.A.C. 7:7E-3.33 through 3.35. Special Land Areas are generally landward of the Special Water's Edge Areas. Id. N.J.A.C. 7:7E-3.46 through 3.49. Coastwide Special Areas may include Special Water Areas, Special Water's Edge Areas, and Special Land Areas. Id, N.J.A.C. 7:7E-3.1. N.J.A.C. 7:7E-3.2 to 3.48,6.1. N.J.A.C. 7:7E-4.1 et sea. General Water Areas are divided by volume and flushing rate into eight categories. N.J.A.C. 7:7E-4.l(a). N.J.A.C. 7:7E-5.1 et seq. General Land Areas are regulated through the imposition of specified impervious cover and vegetative cover requirements. See N.J.A.C. 7:7E-5A.1 et sea., and N.J.A.C. 7:7E-5B.1 et sea. N.J.A.C. 7:7E-7.1. Id. -

Land Use Regulation themselves are often dependent upon location, set forth certain siting requirements and, 2029 importantly, detailed design specifications for a wide variety of uses. 2030 The final step in the process is to test for compliance with the Resource Rules. The goal of this analysis is to examine the impact of development on coastal resources, not only at 203 1 the proposed site but the surrounding region. The Resource Rules, like the Use Rules, impose design requirements on proposed developments. However, the design requirements imposed by the Resource Rules are expressly tied to the resource characteristics of an area. For example, to comply with the Resource Rules, coastal developers must demonstrate that the surface water and groundwater needs of their developments will neither exceed water capacity nor degrade water 2032 quality. The Resource Rules also require design features to permit public access to the waterfront; preserve air quality and scenic vistas; create vegetated buffer zones around developments; 2033 control stormwater runoff and traffic; and meet sewage and hazardous waste regulations. Appeals and Review ..

Parties aggrieved by a CAFRA permitting decision must appeal for relief directly to the 2034 NJDEP. An aggrieved party's request for an adjudicatory hearing must be filed in writing to NJDEP7sOffice of Legal Affairs within 30 days following the publication of the permit decision 2035 If a request for hearing is granted, an administrative law judge assigned in the DEP Bulletin. through the Office of Administrative Law hears the appeal to be conducted in accordance with 2036 the Administrative Procedure Act. Upon completion of the administrative hearing concerning the permit decision, the administrative law judge submits an initial decision to the NJDEP Commissioner. The Commissioner must accept, reject, or modify the decision within 45 days,

N.J.A.C. 7:7E-7.2 to 7.14. The Use Rules can be quite thorough. For example, the Use Rules for marinas prescribe, on a per boat basis, the number of urinals, toilet stalls, wash basins, and showers in men's and women's restrooms. N.J.A.C. 7:7E-7.3A(a)(15). N.J.A.C. 7:7E-8.1 et sea. N.J.A.C. 7:7E-8.l(a). N.J.A.C. 7:7E-8.5,8.6. N.J.A.C. 7:7E-8.8 to 8.22. N.J.A.C. 7:7-5.1 et sea. N.J.A.C. 7:7-5.l(a). N.J.A.C. 7:7-5.3(d); see also the Administrative Procedure Act (N.J.S.A. 52:14B-1 et seq.) and the Uniform Administrative Procedure Rules (N.J.A.C. 1:1).

New Jersey Environmental Law Handbook and the Commissioner's action is considered the final agency action of the Department subject to 2037 judicial review in the New Jersey Superior Court, Appellate Division. Enforcement The NJDEP has a variety of remedial measures at its disposal to enforce violations of any 2038 Specifically, the Department has the regulation, rule, or permit requirements under CAFRA. power to pursue any one or a combination of the following remedies: issue compliance orders; bring summary civil actions seeking injunctive relief and damages; levy civil administrative penalties of up to $25,000 per violation; and/or bring summary civil actions for civil penalties of 2039

up to $25,000 per day. Interaction Between CAFRA and other laws A developer may often be subject to multiple permitting requirements. CAFRA does not override the application of any other statute or regulation governing a proposed development. Indeed, CAFRA "shall not be regarded as to be in derogation of any powers now existing and 2040 shall be regarded as supplemental and in addition to powers conferred by other laws." Accordingly, if a developer faces multiple permitting requirements, the developer must comply with the substantive requirements of each applicable permit program. For ease of 2041 administration, however, the developer need submit only one permit application to LURP. Ultimately, it is in the discretion of the developer to determine the best course for dealing with the permitting requirements affecting a proposed project, including whether to submit multiple permit requests either together or separately. If multiple permits are sought simultaneously, the 2042 Department will assess a single permit fee for the entire project, which will be the sum of the single highest permit application fee among the permit requests submitted, and 75 percent of the 2043 sum of the permit application fees for all other permits required for the project.

2037 2038 2039 2040 2041

2042 2043

N.J.A.C. 7:7-5.3. N.J.S.A. 13:19-1et seq.;N.J.A.C. 7:7-8.1et seq. N.J.S.A. 13:19-18;N.J.A.C. 7:7-8.1(a). N.J.S.A. 13:19-19. N.J.A.C. 7:7-1.8(a). N.J.A.C. 7:7-1.8(b). N.J.A.C. 7:7-10.5(a).

Land Use Regulation

2.1.2 Waterfront and Harbor Facilities Act Jurisdiction Since as early as 1914, New Jersey has regulated activities along the waterfront of 2044 navigable waters of the State under the Waterfront and Harbor Facilities Act. Originally, implementation of this law was assigned to the State Board of Commerce and Navigation, which also was empowered to make various investigations, reports, and recommendations to the Legislature concerning the needs and supervision of commerce, navigation, and development of 2045 a port area. In 1975, the Act was amended to transfer implementation and enforcement 2046 authority to the NJDEP. The original purpose of this law was much the same as that of $10 of the federal Rivers 2047 and Harbor Appropriation Act of 1899 - the improvement of commerce and preservation or 2048 improvement of proper navigation upon navigable waters. To this end, the Act authorizes initiation of court actions to prevent encroachment or trespass upon the waterfront of navigable 2049 waters, areas bounding thereon, or upon State riparian lands. Until 1980, the jurisdictional reach of the Act was confined to projects below the mean 2050 high waterline of a navigable waterway. However, in the process of preparing a federally 2051 mandated Comprehensive Coastal Zone Management Program, the NJDEP considered promulgating rules regulating property as much as 1,000 feet upland of this limit. In response to this, the State Attorney General interpreted the term "waterfront" as including uplands adiacent to navigable waters or streams, adding that through rulemaking the NJDEP could regulate at least the first 100 feet of upland and perhaps more "where the potential area for the first 2052 significant land use" exists farther inland. On the basis of this Attorney General Opinion, the Waterfront Development Act become one of the triumvirate of laws that, taken together with CAFRA and the Wetlands Act of

N.J.S.A. 12:5-1, et sea., commonly called the "Waterfi-ont Development Act." N.J.S.A. 1215-1, -8. See, N.J.S.A. 13:lD-29 and historical notes to various statutory sections of the Act. 33 U.S.C. $403; 33 C.F.R. $322. See-,

33 C.F.R. $9320,325.

N.J.S.A. 12:5-1. N.J.S.A. 12:5-2. Atty. Gen. F.O. 195 1, No. 1, finding no jurisdiction over uplands. See, Federal Coastal Zone Management Act, 16 U.S.C. $1451, et sect. and N.J.S.A. 13:19-16. Atty. Gen. F.O. 1980, No. 6 .

New Jersey Environmental Law Handbook 2053

controlled development over a broad expanse of coastal property. In September 1980, 1970, the NJDEP promulgated Waterfront Development Permit Rules expanding the NJDEP's 2054 territorial jurisdiction under this law and adding limited exemptions. In the designated CAFRA coastal areas and within the zone regulated by the New Jersey Meadowlands Commission, the regulated waterfront remained as it had since 1914 (i.e., all lands lying up to and including the mean high water line). The remainder of the State's coastal areas which are subject to the jurisdiction of the Waterfront Development Act, however, were redefined to include not only all lands lying up to and including the mean high water line, but also adjacent 2055 uplands no less than 100 feet but no more than 500 feet from the mean high water line. In 1988, in an attempt to pressure the Legislature to tighten control of all development in coastal areas and to consolidate regulatory authority in a super-agency to be known as the 2056 Coastal Commission, former Governor Thomas Kean used the powers of his office to expand the Waterfront Development Act's regulatory reach. This was accomplished through the 2057 immediate adoption of regulatory amendments through emergency proceedings. The 1988 emergency regulations expanded Waterfront Development Act jurisdiction to the adjacent upland area measured from the most upland beach, dune, wetland, or other water area to the greater of either 100 feet or the inland limit of the first property associated with residential, commercial, or industrial use that involves a permanent building based on property lines existing on October 3, 2058 Additionally, within this buffer area, projects of 24 dwelling units or less were made 1988. subject to Waterfront Development Act jurisdiction in an attempt to close a gap previously provided in CAFRA, which exempted developments of 24 dwelling units or less from 2059 regulation.

See &, the Coastal Area Facilities Review Act ("CAFRA"),aof 1970, infra at Section 2.2.1.

at Section 2.1.l, and the Wetlands Act

N.J.A.C. 7:7-2.3 (1980). N.J.A.C. 7:7A-2.3(a)(3); see also, New Jersev Builders Ass'n v. New Jersey, No. A-984-SOT1 (Appellate Division, Nov. 30, 1982) (wherein the Appellate Division, in an unreported opinion, upheld the NJDEP regulations). N.J.S.A. 52: 14B-4(c). N.J.S.A. 13:19-1, et sea; N.J.S.A. 13:9A-1, et sea.; effectively bypassing and eliminating time periods related to publication of proposed amendments, comment period, and public hearings which may have taken at least 6 months. 20 N.J.R. 2815(a) (November 7,1988). Recall discussion in Section 2.1.1.1, -. good.

The 1993 CAFRA amendments ultimately closed this gap for

Land Use Regulation 2060

In Last Chance Development Partnership v. Kean, the New Jersey Supreme Court invalidated the 1988 c%nergency Waterfront Development Act rules, finding that in adopting the rules the NJDEP sought to regulate the environmental effects of development. Holding that the Department's authority under the Act was limited to regulating development effects on commerce and navigation, the Court struck down the regulations as ultra vires. In response to the Supreme Court's decision, former Governor James Florio's administration promulgated emergency regulatory amendments to the Waterfront Development 2061 Act (the "1990 emergency regulations"). The 1990 emergency regulations, however, were 2062 declared invalid in Long Beach TD.v. NJDEP where the court concluded that the regulations, like their predecessors invalidated in Last Chance, exceeded the purpose of the Waterfront Development Act of regulating commerce along the waterfront. In 1993, through amendments to CAFRA, the New Jersey Legislature eliminated the overlapping jurisdiction between CAFRA and the Waterfront Development Act over upland areas. This legislation amended N.J.S.A. 12:5-3 to provide that CAFRA shall be the only State law regulating development in the coastal area landward of the mean high water line of tidal 2063 waters, except for upland areas not governed by CAFRA extending from the mean high water 2064 line to the first public paved road parallel to the water line, up to 500 feet. The NJDEP has 2065 adopted new rules to govern waterfront development consistent with this provision. Projects Regulated

All plans for the development of "any waterfront upon any navigable water or stream . . . 2066 or bounding thereon" require NJDEP approval prior to implementation. The regulations governing waterfront development also extend to man-made waterways and lagoons subject to 2067 tidal influence. Projects in that portion of the waterfront located outshore of the mean high water line subject to regulation include construction or alteration of a deck, wharf, pier,

119 N.J. 425,575 A.2d 427 (1990). See 22 N.J.R. 2361 (August 6, 1990), amending N.J.A.C. 7:7-2.3. 245 N.J. Super. 143,584 A.2d 820 (App. Div. 1990). N.J.S.A. 12:5-3(b)(3). 26 N.J.R. 918 Veb. 22, 1994). 26 N.J.R. 2934 (July 18, 1994). N.J.S.A.12:5-3(a). N.J.A.C. 7:7-2.3(b).

New Jersey Environmental Law Handbook 2068

bulkhead, bridge, pipeline, cable, or "any other similar or dissimilar" waterfront development. The removal or deposition of fill or other materials in a waterfront area or on land below mean high tide, and mooring of a floating home for more than 10 consecutive days also are regulated 2069 activities. In addition, a waterfront development permit is required for the "construction, reconstruction, alteration, expansion, or enlargement of any structure, or for the excavation or filling of any area," any portion of which is in the "waterfront area" landward of the mean high 2070

water line as described above, subject to specific exceptions described below. Prior approval is needed whether the project is proposed by a municipality or an individual, or whether the 2071 project is an individual improvement or part of a general plan. Even when local governmental authorities have control over the development of a waterfront through a permit or license program, notification must be given to the NJDEP. Within 10 days of receiving notice of plans proposed by or submitted to the local authority, the NJDEP may file objections to the project or to the granting of the license or permit. If objections are filed, the implementation of the project or issuance of local approvals shall be stayed until the NJDEP and local authorities hold a joint public hearing. At this time, the NJDEP may raise objections and recommend changes it deems necessary. Final approval or disapproval of the plan or a final decision on granting the permit or license shall be made jointly by the NJDEP and 2072 the local authority. Substantive standards used to guide NJDEP decisions must be in accord with the legislative intent to promote the development, revitalization, and safeguarding of the waterfront 2073 for the public's overall economic well being. To that end, the Waterfront Development Permit Program has been consolidated with other permit programs affecting the State's coastal 2074 2075 areas under the Coastal Permit Program rules and the Coastal Zone Management rules.

Id. N.J.A.C.7:7-2.3(~)(3). N.J.A.C.7:7-2.3(d). N.J.S.A. 12:5-3(a). N.J.S.A. 12:5-5. Atty. Gen. F.O.1980,No. 6. N.J.A.C.7:7-1.1 et sea N.J.A.C.7:7E-1.1et sea.

Land Use Regulation The particular location, use, and substantive requirements that may be applicable to waterfront 2076 property will vary, based on the individual property and project. Exemptions There are many specific exemptions to the requirement to seek a waterfront development 2077 2078 permit. For instance, projects planned by State agencies are exempt, as are municipally 1n7n

approved developments initiated prior to April 8, 19 14.&"17 Also exempt are repairs, replacements, or renovations of permanent docks, wharfs, piers, bulkheads, or buildings in 2080

existence prior to January 1, 1981, as long as such work does not change the structure's location or increase its size, and provided it is used solely for residential purposes or the docking 2081

or servicing of pleasure boats. A similar exemption also is afforded to repairs, replacements, or renovations of floating docks, mooring rafts, or similar temporary or seasonal improvements or structures, provided the structure does not exceed the length of the waterfront frontage of the property to which it is attached and is used solely for the docking or servicing of pleasure 2082 vessels. Within the regulated waterfront which is landward of the mean high water line, there are limited exceptions for the construction, alteration, expansion, or reconstruction of single family dwellings if constructed more than 100 feet landward of the mean high water line; and the reconstruction, conversion, alteration, or enlargement of an existing structure located more than 100 feet landward of the mean high water line, provided that no change in use results and the 2083 enlargements do not exceed 5,000 square feet. .

See Section 2.1.1.4, m. N.J.A.C. 7:7-2.3(d)1 through 6, and (h). Concerned Citizens v. Dept. of Corrections, 6 N.J.A.R. 140,1983 WL 1525 (N.J. Adm. 1983). N.J.S.A. 12:5-7. N.J.A.C. 7:7-2.3(d)4 and 5 further qualify this exception to the extent such improvements appear on the applicable Tidelands Map adopted by the Tidelands Resource Council (base map photography dated 1977/78), or appear on the applicable New Jersey Coastal Wetlands maps (base map photography dated 1971/72), or received a waterfront development permit subsequent to the date of such photography. N.J.S.A. 125-3(b)(1); see Ward v. Dev't of Environmental Protection, 91 N.J.A.R. 2d 1 (EPE) (1991) (wherein the administrative judge found that the owner of a waterfront property was entitled to replace a bulkhead and share up to 1-story dwelling without a permit as such activities constituted repair, replacement, and renovation with the exemption.). N.J.S.A. 125-3(b)(2). S e e d Note 1939 supra. N.J.A.C. 7:7-2.3(d)(l) and (2).

New Jersey Environmental Law Handbook As mentioned earlier, the amended law generally excludes from pennit requirement development in the coastal area landward of the mean high water line, as that activity is regulated under CAFRA. The rules, in addition, provide a narrow exemption for certain upland areas falling within the jurisdiction of the Act. These areas are exempt from permitting 2084

requirements for development activity that was in progress on or before September 26, 1980. Enforcement

The Act authorizes the NJDEP to initiate injunctive or other legal actions in order to prevent and remove "construction, erection or accretion injurious to the flow" of navigable waters, which may be detrimental to proper navigation and the maintenance and improvement of 2085 commerce. Furthermore, any development or improvement listed at N.J.S.A. 12:5-3 and N.J.S.A. 13:lD-29, et seq., commenced or executed without NJDEP approval is deemed a public 2086 Similarly, initiation of any development set forth in rules or nuisance and must be abated. regulations adopted pursuant to these statutes without obtaining prior approval, or initiation or construction in a manner contrary to the conditions of the approval, also is considered a public 2087 In such instances, the State may avail itself of one or more of the following nuisance. remedies:

2088

issuance of an Administrative Consent Order, specifying which statutes (1) and/or rules or regulations have been violated, the facts on which the Order is based, and what action must be undertaken in correction; commencement of a civil action in Superior Court for injunctive or other (2) relief; and levying of a civil administrative penalty. (3) 2089 The maximum penalty that can be assessed is $1,000 for each violation. Additional penalties of not more than $100 per day may be assessed for each day the violation continues 2090 Prior to assessment of a after an administrative order specifying corrective action is received. penalty, the property owner or alleged violator must be notified by certified mail or personal

2084 2085 2086 2087 2088 2089 2090

N.J.A.C. 7:7-2.3(h). N.J.S.A. 12:5-2. N.J.A.C. 7:7-8.1(b). N.J.S.A. 12:5-6(a). N.J.S.A. 12:5-6(a)(1) to (3); N.J.A.C. 7:7-8.l(b). N.J.A.C. 7:7-8.8(a). N.J.A.C. 7:7-8.9.

Land Use Regulation 2091

service that a penalty is being assessed and the basis for such assessment. A hearing to contest a penalty must be requested within 21 days of receipt of this notice or a final order will 2092 2093 be issued assessing the penalty. The penalty is due when the final order is issued. If a hearing is sought, it must be held within 30 days of when the State receives the hearing request. If a violation is found to have occurred, the penalty levied cannot exceed the 2094 amount specified in the order.

2.2 COASTAL AND TIDAL WETLANDS 2.2.1 Wetlands Act of 1970 The first wetlands to fall under specific State regulation were the approximately 240,000 acres of "coastal" and "tidal" wetlands edging the State's bays, inlets, the Atlantic Ocean, and 2095 certain rivers. The Wetlands Act of 1970, as compared to its more recently adopted 2096 counterpart regulating freshwater wetlands, is short and relatively simple. Due to the State's 2097 extensive mapping of coastal wetlands, the determination of what property is subject to regulation under the statutory scheme is more easily discernible than in the case of unmapped inland, freshwater wetlands. Regulations governing the issuance of permits for projects proposed in coastal wetlands are part of and codified in the State's comprehensive rules and 2098 policies addressing use and development of coastal resources as a whole. Jurisdiction The Wetlands Act of 1970 regulates virtually all types of construction activity in coastal wetlands. Its purposes are to protect the "vital and productive" areas between the land and the sea known as the "estuarine zone;" to promote public health, safety and welfare; protect the public health and environment; preserve the ecological balance of the area; and to prevent its further deterioration and destruction that may result from unregulated dredging, filling, and

N.J.S.A. 12:5-6(b);N.J.A.C. 7:7-8.10. N.J.A.C. 7:7-8.11. N.J.S.A. 12:5-6(c). N.J.S.A. 12:5-6(d). N.J.S.A. 13:9A-1, et seq. N.J.S.A. 13:9B-1, et seq.; N.J.A.C. 7:7A-1, et sea See Section 2.4, infra. N.J.A.C. 7:7-2.2(~). Division of Coastal Resources Coastal Permit Program Rules, N.J.A.C, 7:7-1, et seq.; see also Coastal Zone Management Rules, N.J.A.C. 7:7E-1, et seq.

New Jersey Environmental Law Handbook 2099

similar activities in these areas. Regulation of these wetlands for the purposes articulated in 2100 the Act has been upheld as a valid exercise of governmental power. The Act directed the Commissioner of the NJDEP to inventory and map all State "tidal" wetlands by November 5, 1972. The boundary of these wetlands is generally the "areas that are at or below high water." The statute does not define "tidal" wetlands any hrther, but issues such as whether seasonal, mean, or other high water marks are present are resolved in the maps themselves. Only those properties appearing on the promulgated tidal wetlands maps are subject to the Act and its regulations. The completed maps are filed with the county in which the 2101 wetlands are located. The Act also vested the NJDEP with broad powers to regulate, restrict or prohibit activities altering or adversely affecting coastal wetlands. Coastal wetlands are defined as banks, marshes, swamps, meadows, flats, or other low lands subject to tidal action along the Delaware River and Bay, Raritan Bay, Barnegat Bay, Sandy Hook Bay, Shrewsbury river - including the Navasink and Shark rivers - and the coastal inland waterways extending south from Manasquan 2102 Inlet to Cape May Harbor, or any inlet, estuary, or tributary waterways. Coastal wetlands also include land now or formerly connected to tidal waters whose surface is at or below an elevation of 1 foot above local extreme high water and that grows, or is capable of growing, 2103 certain listed vegetation suited to such a habitat. Coastal wetlands do not include areas 2104 subject to regulation by the New Jersey Meadowlands Commission. In general, the regulated tidal and coastal areas are in the southern and western portions of the State. This geographic scope of the law has withstood legal challenge under the principles of equal protection because of the differences between the sparse wetlands north of Raritan Bay -heavily developed with industry, commerce, and residential uses - and the large, contiguous, and undeveloped wetland areas south of this point. The discrepancies between these two general 2105 areas provide reasonable grounds for their disparate treatment.

N.J.S.A. 13:9A-l(a). Sands Point Harbor, Inc. v. Sullivan, 136 N.J. Super. 436, 346 A.2d 612 (App. Div. 1975); American Dredginp Co. v. State, Deut. of Environmental Protection, 161 N.J. Super. 504, 391 A.2d 1265 (Ch. Div. 1978), affd, 169 N.J. Super. 18, 404 A.2d 42 (App. Div. 1979) (holding thrust of act is prevention of

harm). N.J.S.A. 13:9A-l(b). N.J.S.A. 13:9A-2.

Id. Id. SeeN.J.S.A. 13:17-1, et seg. -

Sands Point Harbor, Inc. v. Sullivan, 136 N.J. Super. 436,440,346 A.2d 612, 614 (App. Div. 1975).

Land Use Regulation

Regulated Activities The Act empowers the NJDEP to regulate alterations of or activities in mapped coastal wetlands by issuing, revising, or repealing orders. These orders form the basis for issuing 2106 permits. Prior to an order becoming effective, a public hearing must be held. Notice of the hearing must be mailed to each holder of a recorded interest in the property to be affected by the order at the address shown on municipal tax records. This notice must be given at least 21 days prior to the hearing. Notice also must be published in a newspaper of general circulation at least twice in each of the 3 weeks preceding the hearing date. Once adopted, orders are filed with the 2107 county clerk or register of deeds, where they are indexed and recorded as a judgment. To object to an order, parties holding a recorded interest in land affected by an order must file a complaint with the New Jersey Superior Court within 90 days of receiving notice of the order. The court will determine if the order restricts or otherwise affects property to the extent that it deprives the owner of its practical use and is therefore an unreasonable exercise of the 2108 police power. Judicial review will include the character of the action proscribed by the order and the nature and extent of its interference with the property owner's rights in the parcel as a . . 2109 whole. If the NJDEP action is found to be an unreasonable exercise of police power, the order 21 10 may be the equivalent of a taking without compensation. (% discussion on takings law, Section 2.4.4.6, infi-a). A court ruling in favor of the property owner will vacate the order's 2111 application to the plaintiffs land; it cannot order payment of just compensation. In addition, a court's decision in any one suit shall not affect any land but the plaintiffs. The court's finding may be recorded and filed as a judgment with the property deed. This method for resolving this 21 12 issue is exclusive, and determination of this issue cannot occur in any other proceeding.

N.J.S.A. 13:9A-2. See&, N.J.A.C. 7:7-2.2 which incorporates the requirements of the Wetlands Order issued on April 13, 1972 concerning regulated activities and wetland boundary delineations. N.J.S.A. 13:9A-3. N.J.S.A. 13:9A-6. American Dredaina Co. v. Devt. of Environmental Protection, 161 N.J. Super. 504, 391 A.2d 1265 (Ch. Div. 1978), affd, 169 N.J. Super. 18,404 A.2d 42 (App. Div. 1979); see discussion of regulatory takings, Section 3.2.4, infra. N.J.S.A. 13:9A-6. American Dredging Co., suvra. N.J.S.A. 13:9A-6.

New Jersey Environmental Law Handbook Activities regulated by the Wetlands Act include draining, dredging, excavation or removing soil or any other aggregate; dumping or depositing any rubbish; discharging liquid wastes directly or indirectly; or erection of structures, driving pilings, or placing obstructions in 21 13 any tidal or coastal wetland, whether or not it changes the tidal ebb and flow. Depositing solid waste or debris, disposal of solid or liquid domestic sewage or industrial wastes, storage or disposal of pesticides, application of pesticides on certain vegetation, and application of 2114

persistent pesticides are specifically prohibited by regulation. Activities subject to regulation are not prohibited until a map delineating the wetland is filed and an appropriate order is promulgated. Additionally, absent an opportunity to object to an order at a public hearing, a property owner is not bound by the order's terms. While wetland maps prepared by the NJDEP in and of themselves are not part of an order, if a map is amended to include a new area in a location subject to an order owned by a party not previously given 2115 notice when the order was adopted, a public hearing should be held. Relationship to Other Laws The Wetlands Act does not affect the State's rights or the obligations of an owner with 2116 respect to riparian lands. Other powers or duties of the NJDEP, the Natural Resource Council, State Department of Health, and State Mosquito Control Commission also are not 21 17 impaired or restricted by actions under this Act. It should be noted that the Waterfront Development Law regulates all tidal wetlands north of the Raritan Basin, except for certain areas within the jurisdiction of the New Jersey Meadowlands Commission, and all coastal wetlands in the Delaware River and Raritan River basins not regulated under the CAFRA or the Wetlands 2118 In addition, while tidal open waters normally require an open water fill permit Act of 1970. under the Water Pollution Control Act, for activities in water bodies below the head of tide for which a Waterfront Development or CAFRA permit is required, no open water fill permit will be 2119 required.

2113 2114 2115 2116 2117 2118 2119

N.J.S.A. 13:9A-4; see also N.J.A.C. 7:7-2.2. N.J.A.C. 7.7-2.2(b). Loveladies Pro~ertvOwners Ass'n. Inc. v. Raab, 137 N.J. Super. 179,348 A.2d 540 (App. Div. 1975). Atty. Gen. F.O. 1975,No. 16;N.J.S.A. 13:9A-8. N.J.S.A. 13:9A-7. N.J.S.A. 12:5-3; N.J.A.C. 7:7-2.3(a). NJDEP Policy Memorandum, Tudor, R., "Regulatory jurisdiction and permitting requirements of State open waters" June 9, 1992.

Land Use Regulation Permits Regulated activities in any mapped tidal wetland are prohibited without a permit issued 2120 After a permit application is filed, notice of the filing must be provided to by the NJDEP. electric and gas utilities and owners of land within 200 feet of the property that is the subject of 2121

the permit. The NJDEP's review of the permit application must consider the public policy 2122 and purposes of the Act and the project's effect on them. The substantive policies to be 2123 considered are set forth in the Rules on Coastal Zone Management. The general procedure for permit application and processing is governed by the Coastal 2124 Permit Program Rules. In 1994, the Department eliminated regulatory distinctions between "Type A" and "Type B" permits, which permitted less information to be submitted in connection with projects having relatively minimal impacts on such wetlands. Enforcement Any person who violates a Commissioner's order or any provision of the Wetlands Act is subject to a maximum fine of $1,000. Additionally, violators are liable for the cost of restoring 2125 the wetland to as near as possible its prior condition. The NJDEP's exercise of enforcement powers also includes the power to institute proceedings in the Superior Court seeking injunctive or other relief, including damages incurred by the NJDEP in removing, correcting, or terminating 2126 any violation of the Wetlands Act. 2.2.2 Coastal Zone Management Rules As with CAFRA permitting decisions, decisions on activities in coastal wetlands are made using a three-step process divided into Location Rules, Use Rules, and Resource Rules. See discussion at 5 2.1.1.4, supra. 2.2.3 Mitigation 2127 All permits allowing the disturbance or loss of coastal wetlands require mitigation the creation or restoration of an area of wetlands at least the size of the area disturbed. Smaller

N.J.S.A. 13:9A-4(b). N.J.S.A. 13:9A-4(c). N.J.S.A. 13:9A-4(b)to (d). N.J.A.C. 7:7E-1.1, et seq N.J.A.C. 7:7-1.1, et sea. These regulations govern permits for activities for which a permit is required under CAFRA, the Wetlands Act, or the Water Development Law. N.J.S.A. 13:9A-9; see also N.J.A.C. 7:7-8.12(a). N.J.A.C. 7:7-8.13(a). N.J.A.C. 7:7E-3.27(h).

New Jersey Environmental Law Handbook mitigation areas may be allowed upon demonstration that creating or restoring a smaller area will achieve no net loss of environmental values. If a mitigation area smaller than a 2:l ratio to the area disturbed is approved, monitoring will be required. Additional remedial activity may be 2128 necessary at a later date if ecological parity is not sustained. Preferably, mitigation should be similar in type and location to the area impacted, that is, "replacement in kind within the same watershed." Variations may be acceptable if the mitigation provides a major contribution toward one of the objectives of the Coastal Zone Management 2129 Rules. Mitigation must occur prior to or concurrent with permitted activities other than those temporarily disturbing the wetlands. The applicant must obtain a secured bond or other acceptable form of financial assurance to complete and maintain the mitigation should the 2130 applicant default. In addition, the rules impose as a condition of every creation or enhancement plan that a conservation easement or deed restriction prohibiting development in the mitigation area be recorded with the county clerk or register of deeds for the county in which 2131 the subject land is located. Mitigation is classified into four types: restoration, creation, enhancement, and contribution. Restoration refers to actions performed on-site and is required at a ratio of 1 acre restored to 1 acre lost. Creation refers to actions performed to establish wetland features and functions on either a non-wetland site or a former wetlands site and is required at a ratio of 2 acres created to 1 acre lost. Enhancement refers to actions to improve the features and functions of an existing wetland. The ratio for this form of mitigation is determined on a case-by-case basis. Contribution refers to the donation of money which must match the cost of purchasing a 2132 wetland of equal value or the cost to create a wetland of equal value to the wetland lost. 2.2.4 Wetlands Buffers The Coastal Zone Management Rules also prohibit development in areas abutting a coastal wetland, known as wetland buffer areas or transition areas, unless the applicant 2133 demonstrates that the development will not pose a significant adverse impact on the wetland. The purpose of the buffer is to minimize the adverse impacts a development may have on the

2128 2129 2130 2131 2132 2133

Id. N.J.A.C. 7:7E-1.6. N.J.A.C. 7:7E-3.27(h)(3). N.J.A.C. 7:7E-3.27(h)(6). N.J.A.C. 7:7E-3.27(h)(9). N.J.A.C. 7:7E-3.28.

Land Use Regulation surrounding wetlands. For wetlands regulated under The Wetlands Act of 1970, a wetlands 2134 buffer of up to 300 feet may be imposed in connection with permitted development. The existence of endangered or threatened wildlife or plant species, or of critical wildlife habitat may 2135 cause the required wetlands buffers to be closer to the upper end of this range. 2.3 RIPARIAN LANDS It is well settled in New Jersey that the State is the owner of all riparian lands, i.e. those 2136

lands that are either now or were formerly flowed by the mean high tide. A landowner adjacent to such riparian lands may apply to the Tidelands Resource Council, the legislatively 2137 dedicated steward of riparian lands, for a lease, grant, or license from the State of lands now 2138 or formerly under water in front of his or her lands. A tidelands grant is actually a deed from the State conveying fee title (ownership) to tidelands, and is typically reserved for lands which 2139 have been previously filled and are no longer flowed by the tide. A tidelands license, commonly referred to in practice as an "interim" license, is a revocable grant with a duration of 2140 usually 7 years. Lastly, a tidelands lease is a longer term rental instrument which permits the use of tidelands for a period of usually 20-30 years, and is commonly used for marinas or homes located over water. The application requirements for either a grant, license, or lease vary, and the specific details can be obtained through the Bureau of Tidelands Management within the NJDEP. In all instances, the application will require review and approval of the Tidelands Resource Council, 2141 and the establishment of the fair market value to be paid for either the grant, license, or lease. Unlike grants, which require a one-time payment for the ownership of tidelands, licenses and leases will have annual payment requirements. Grants, since they represent permanent conveyances of the State's interest in tidelands, will have a higher value associated with them and can take up to 18 months or more to obtain. Licenses and leases, in comparison, may be obtained usually in less than a year.

N.J.A.C.7:7E-3.28(a)(2). N.J.A.C.7:7E-3.28(a).

See Bailev v. Driscoll, 19 N.J. 363, 1 17 A.2d 265 (1955). N.J.S.A. 12:3-12.1. Applications and inquiries, however, are directed to the Bureau of Tidelands Management within NJDEP. N.J.S.A. 12:3-10. Id. N.J.S.A. 12:3-12.3. N.J.S.A. 12:3-12.1;N.J.S.A. 12:3-16.

New Jersey Environmental Law Handbook The Council may also lease or grant to a person other than the adjacent landowner, subject to the preemptive rights of the adjacent owner of the uplands, if the landowner receives 6 months' notice of intention to take such a lease or grant and fails to apply for and complete the 2142 lease or grant. The statute further provides for acquisition of riparian lands by the State, leasing for commercial enterprises, leasing and granting of riparian lands for public purposes, and reentry by the State for delinquent riparian leases.

2.4 FRFSHWATER WETLANDS 2.4.1 Introduction On July 1, 1988, the New Jersey Freshwater Wetlands Protection Act (FWPA) came into 2143 effect. Its purpose is to protect the State's more than 300,000 acres of remaining inland freshwater wetlands. Among other things, the Legislature found that freshwater wetlands are vital ecological resources which preserve drinking water supplies by purifjmg surface and groundwater resources; prevent flood and storm damage; prevent soil erosion by serving as a transition zone between dry land and water courses; and provide essential spawning and breeding 2144 grounds for fish and wildlife. Any person proposing to engage in "regulated activity" in a freshwater wetland must first 2145 "Regulated activity" is defined as "removal, excavation, obtain a permit from NJDEP. disturbance, or dredging of soil, sand, gravel, or aggregate material of any kind," "drainage or disturbance of the water level or water table," "dumping, discharging, or filling with any materials," "driving of pilings," "placing of obstructions," "destruction of plant life which would alter the character of a freshwater wetland, including the cutting of trees," and "placement of any 2146 portion of a residential development project" in a freshwater wetland. The Act also prohibits specified activities in "transition areas" adjacent to freshwater wetlands of "exceptional" and 2147 "intermediate" resource value unless NJDEP grants a transition area waiver. Violations of 2148 these requirements are subject to civil and criminal penalties.

N.J.S.A. 12:3-23. N.J.S.A. 13:9B-1, et sea. The majority of the FWPA's provisions were not effective until July 1, 1988, with provisions regulating certain transition areas not effective until July 1, 1989; L. 1987, c. 156 34. N.J.S.A. 13:9B-2. N.J.S.A. 13:9B-9; N.J.A.C. 7:7A-2.l(a). N.J.S.A. 13:9B-3;N.J.A.C. 7:7A-2.2(a). N.J.S.A. 13:9B-16 through -18. A "transition area" is an "area of upland adjacent to a freshwater wetland which minimizes adverse impacts on the wetland or serves as an integral component of the wetlands ecosystem." N.J.A.C. 7:7A-1.4. N.J.S.A. 13:9B-21.

Land Use Regulation Freshwater wetlands are delineated, classified, and mapped pursuant to statutory 2149 A complete set of freshwater wetland maps is now available at NJDEP, and relevant criteria. maps have been distributed to each county and municipality. However, the wetland boundaries in these maps are not definitive. Any person proposing to undertake a "regulated activity" in an area that might be a freshwater wetland, or in an area that might be adjacent to wetlands and thus require a transition area waiver, can request a letter of interpretation (LOI) fi-om the Department 2150 precisely delineating the boundaries of regulated wetlands and transition areas. 2.4.2 Assumption of the Federal $404 Program The USEPA has authority under Section 404(g)(l) of the federal Clean Water Act to delegate a substantial portion of the Federal $404 permit program to States that apply and qualify 2151 When the New Jersey Legislature enacted the FWPA, it directed NJDEP for such delegation. and the State Attorney General to secure assumption of the permit jurisdiction formerly exercised by the United States Army Corps of Engineers ("the Corps") pursuant to the federal 2152 Act. On March 2, 1994, New Jersey became the second State to assume delegated authority 2153 to enforce the $404 permit program requirements. Accordingly, the FWPA is now the instrument by which New Jersey regulates not only its State freshwater wetlands law, but also its delegated portion of the federal program. Readoption of the Freshwater Wetlands Protection Act Rules, N.J.A.C. 7:7A The Freshwater Protection Act rules, N.J.A.C. 7:7A, were scheduled to expire on December 31, 2000. That expiration date was extended by gubernatorial directive to June 30, 2154 The NJDEP proposed a readoption of the rules on August 7, 2000, reorganizing 2001. Chapter 7A to more closely reflect changes in the program necessitated by the assumption of the 2155

Federal 404 program. The proposed rule changes were adopted by the NJDEP and ultimately became effective on September 4,2001, after publication in the New Jersey Register.

2149

2150 2151 2152 2153 2154 2155

N.J.S.A. 13:9B-3 (definition of fieshwater wetland); N.J.S.A. 13:9B-7 (freshwater wetland classification system). N.J.S.A. 13:9B-8. 33 U.S.C. 1344(g)(l). N.J.A.C. 13:9B-27. 59 Fed. Reg. 9933 (March 2, 1994). 33 N.J.R. 553(a). 32 N.J.R. 2693(a).

New Jersey Environmental Law Handbook Non-Delegated Authority Notwithstanding the NJDEP's assumption of responsibility under the $404 permit program as described above, the Corps cannot delegate authority over traditionally navigable 2156 waters of the United States and adjacent wetlands. Accordingly, the Corps retains regulatory

authority over wetlands that are partially or entirely located within 1,000 feet of the ordinary high water mark or mean high water mark of the Delaware River, Greenwood Lake, and all tidal waters. In addition, pursuant to a memorandum of agreement between the Corps and NJDEP, 2157 wetland-related activity in the New Jersey Meadowlands is subject to regulation by the Corps. Impact on Existing Permits With delegation to New Jersey, the Corps no longer has authority to issue individual, regional, or State program general permits concerning freshwater wetlands. However, authorizations issued by the Corps prior to March 2, 1994, remain in effect for the original duration established by the Corps. In addition, the Corps will continue to administer and enforce the terms and conditions of those permits. With respect to general permits issued under the federal nationwide permit program, New Jersey does not recognize prior authorizations by the Corps under this program unless the 2158 authorized work was in "advanced stages of construction" by March 2,1994. 2.4.3 Jurisdiction Delineation of Freshwater Wetlands and Their Buffer Zones The FWPA defines freshwater wetlands in a manner consistent with the current federal definition. Wetlands are areas inundated or saturated frequently enough by surface or groundwater to support, and that under normal circumstances do support, vegetation adapted for 2159 life in saturated conditions. NJDEP's regulations require the Department to use a three parameter approach to delineating wetlands that involves the examination of hydrology, soils,

Traditionally navigable waters include those waters which are presently used, or are susceptible to use in their natural condition or by reasonable improvement as a means to transport interstate or foreign commerce shoreward to their ordinary high water mark, including all waters which are subject to the ebb and flow of the tide shoreward to the high tide line. See 40 C.F.R. 232.2. The FWPA exempts activity in the Hackensack Meadowlands and areas under the jurisdiction of the Pinelands Commission from state freshwater wetland regulation. N.J.S.A. 13:9B-6(a). The DEP defines "advanced stages of construction" as meaning having completed the foundations for buildings or structures, the subsurface improvements for roadways, or the necessary excavation and installation of bedding materials for utility lines. It does not include clearing vegetation, bringing construction materials onto the site, site grading, or other earth work associated with preparing the site for construction. 25 N.J.R. 1761 (April 19, 1993). N.J.S.A. 13:9B-3; N.J.A.C. 7:7A-1.4; See-40

C.F.R. 230.3(t).

Land Use Regulation and vegetation. They further require NJDEP to use the methodology enumerated in the Federal Manual for Identifying and Delineating Jurisdictional Wetlands and any subsequent amendments 2160 thereto (which are incorporated by reference in the regulations). How a wetland is defined using these parameters has sometimes been the subject of controversy. The most current delineation manual adopted by the federal government is the 1989 Federal Manual for 2161 Identifying and Delineating Jurisdictional Wetlands (the "1989 Manual'). However, due to the broad interpretation of wetlands characteristics in the 1989 Manual, Congress has prohibited the Corps from using that manual and has directed the Corps to use the 1987 Corps of Engineers Wetland Delineation Manual (the "1987 Manual") until such time as a new manual is 2162 promulgated pursuant to the federal Administrative Procedure Act. As a result, while the 2163 Corps uses the 1987 Manual, NJDEP currently uses the 1989 Manual. In addition, NJDEP recognizes only delineations conducted by the State and will not deem delineations conducted by 2164 the Corps valid since the NJDEP's assumption of the $404 program as described above. The applicant should be attentive to differences between delineation standards under the 1987 and 1989 manuals, and be certain that the proper standards are being applied. Once a wetland is delineated, the FWPA regulations further define wetlands according to 2165 three distinct resource values. Wetlands of "exceptional" resource value are defined as those connected to specified trout production waters or their tributaries, and wetlands which provide habitat for threatened or endangered species (unless an applicant demonstrates that the habitat is 2166 no longer suitable for use by a threatened or endangered species). Wetlands of "ordinary" resource value are those which do not exhibit any of the characteristics of an exceptional resource value wetland, and are either an "isolated wetland" (those more than 50 percent

N.J.A.C. 7:7A-1.4; N.J.A.C. 7:7A-2.3(a). The 1989 Manual was adopted on January 10, 1989 by the USEPA, U.S. Army Corps of Engineers, U.S. Soil Conservation Service, and the U.S. Fish & Wildlife Service. 1992 Energy and Water Development Appropriations Act, Pub. L. No. 102-104; 105 Stat. 510 (1991). The proposed rules remove a description of the federal Manual for delineating wetlands, instead, only referring to the term "Federal Manual" which is defined as the 1989 Manual. NJDEP Questions and Answers on Assumption, March 2,1994. N.J.S.A. 13:9B-7; N.J.A.C. 7:7A-2.4. N.J.S.A. 13:9B-7(a); N.J.A.C. 7:7A-2.4(b). The NJDEP identifies present or documented habitat for threatened or endangered species using the Landscape Project method, which focuses on habitat areas required to support populations of threatened or endangered wildlife species. The details of this method are described in the Land Use Regulation Program's Freshwater Wetlands Technical Manual. N.J.A.C. 7:7A2.4(c).

New Jersey Environmental Law Handbook

surrounded by development which was in existence prior to July 1, 1988, and less than 5,000 2167 Lastly, all other wetlands square feet in size), drainage ditches, swales, or detention facilities. not otherwise classified as being of exceptional or ordinary resource value are considered to be 2168 The NJDEP will determine the resource value of any of intermediate resource value. 2169

wetlands upon application for a letter of interpretation. The determination of the applicable resource value for wetlands is important as it affects the transition area, or buffer, that may be associated with a particular delineated wetlands 2170 A transition area is subject to the same regulations under the FWPA as are applied to area. the wetlands with which they are associated. The reason for this regulation is the recognition of the fact that the transition area serves as an ecological transition zone between unregulated uplands and the regulated freshwater wetlands area, and provides both critical habitat for various plant and animal life, as well as a filtration area to remove and store nutrients, sediments, and 2171 Exceptional resource otherwise limit the impact of development on neighboring wetlands. 2172 and intermediate value value wetlands have a standard regulated transition area of 150 feet, wetlands have a regulated transition area of 50 feet. Ordinary resource value wetlands and State 2173 2174 on the other hand, have no regulated transition area. open waters, The size of a transition area can be averaged or reduced through the application of available "transition area waivers" only if such alternatives have no substantial impact on the 2175 At present, the regulations provide the following four types of transition area wetland. waivers: (i) averaging plans; (ii) special activity transition area waivers; (iii) matrix-type width

N.J.A.C. 7:7A-2.4(d). It should be noted that the regulations more narrowly define isolated wetlands and swales than does the FWPA. Compare N.J.S.A. 13:9B-7 with N.J.A.C. 7:7A-1.4. The regulations state that only detention basins originally constructed in uplands are classified as ordinary resource value. If a detention basin is created in a wetland, the wetland does not automatically become an ordinary resource value wetland. 32 N.J.R. 2703. N.J.S.A. 13:9B-7(c); N.J.A.C. 7:7A-2.4(e). N.J.A.C. 7:7A-2.4(g); see also N.J.A.C. 7:7A-3. N.J.S.A. 7:7A-2.5. Id. N.J.A.C. 7:7A-2.5(d). State open waters are those waters of the United States within New Jersey that are not freshwater wetlands. N.J.A.C. 7:7A-1.4. N.J.S.A. 13:9B-16; N.J.A.C. 7:7A-2.5(~). N.J.S.A. 13:9B-18; N.J.A.C. 7:7A-6.1.

Land Use Regulation 2176

The regulations also expressly reduction waiver; and a (iv) hardship transition area waiver. recognize that regulated activities which are authorized in transition areas pursuant to wetlands general permits obtained from the NJDEP will also include appropriate transition area waivers to 2177 allow the permitted disturbances. Lastly, the regulations also provide a limited waiver to allow access to transition areas as necessary to otherwise conduct regulated activity in a wetlands 2178 area in accordance with a wetlands permit or mitigation plan.

Regulated Activities The FWPA and its implementing regulations cover an expansive list of "regulated activities" which may not take place within a freshwater wetland without an appropriate permit, including discharging, filling, or the removal, excavation, or disturbance of soil; drainage or disturbance of the water level or water table; driving pilings; and placement of obstructions or 2179 structures and destruction of plant life "which would alter the character" of the wetland. As is often the case, the regulations contain greater detail in defining the types of activities for which a permit is required. For example, the destruction of plant life altering the wetland character includes not only tree cutting, as referenced in the FWPA, but also the loss of vegetation by application of herbicides, as set forth in the regulations. The regulations also 2180 which further restrict residential development by including within the reflect amendments 2181 regulated activities the "placement of any portion of a residential development project." As described above in Section 2.4.3.1, the regulation of freshwater wetlands is not only limited to activities in the wetlands themselves, but also extends to any delineated transition areas surrounding those wetlands. Consequently, virtually all development activities and soil or plant life disturbances are regulated in the transition areas adjacent to wetlands of intermediate or exceptional resource value. Notwithstanding this regulation, "normal property maintenance" activities in the transition areas do not require a permit, such as mowing and clearing of debris,

N.J.A.C. 7:7A-6.l(a). N.J.A.C. 7:7A-6.l(a)5. N.J.A.C. 7:7A-6.l(a)6. N.J.S.A. 13:9B-3 (definition of "regulated activity"); N.J.A.C. 7:7A-2.2(a). The FWPA rules were substantially amended during the readoption process which was initially proposed August 7,2000, and became effective September 4,2001.

Id. This added regulation of "residential development projects" effectively expands the scope of regulation beyond the construction of a new structure itself, and impacts the area within 20 feet of the structure on all sides - thereby creating an additional 20-foot buffer around a residential project which is subject to permitting requirements of the FWPA. N. J.A.C. 7:7A-2.2(a)(7).

New Jersey Environmental Law Handbook 2182

pruning and selective tree cutting, continued cultivation, and planting activities. Exemptions Based on Geography and Prior Approvals

The FWPA and regulations provide exemptions from wetland permit requirements and transition area regulations for certain geographic areas and projects. Projects in areas within the 2183 $3.2, infra) and the Pinelands jurisdiction of the New Jersey Meadowlands Commission (s 2184 2185 Areas Commission ( g $3.1, infra) are exempt from the freshwater wetlands law. 2186 are likewise exempt from the State freshwater wetlands regulated as coastal wetlands 2187 However, projects in these areas are not exempt from compliance with other State or scheme. federal wetlands approvals, including those required by the Corps in the non-delegated $404 2188 wetlands program. Projects that received municipal preliminary site plan or subdivision approvals prior to July 1, 1989, or for which preliminary site plan or subdivision applications were submitted and deemed complete prior to June 8, 1987, and which were subsequently approved, are exempt from 2189 the transition area requirements of the FWPA. This exemption, however, shall no longer 2190 apply if the municipal approval upon which it was based becomes invalid. More importantly, once the exempted project is constructed, any future development which would otherwise be 2191 subject to the FWPA will require a permit. Similarly, projects which were approved by the

N.J.A.C. 7:7A-2.6(b)(l). N.J.S.A. 13:17-1, et seq. N.J.S.A. 13:18A-1, et sea. The exemption applicable to the areas within the jurisdiction of the Pinelands Commission does not extend to discharge of dredged or fill material into fi-eshwater wetlands or State open waters. The Pinelands Commission may, however, provide for more stringent regulation of activities in and around wetlands, including transition area regulations. N.J.A.C. 7:7A-2.9(b). N.J.S.A. 13:9B-6;N.J.A.C. 7:7A-2.9. N.J.S.A. 13:9A-1, et sea. N.J.A.C. 7:7A-2.9(d). N.J.S.A. 13:9B-4; N.J.A.C. 7:7A-2.9(a). Additional examples of State or Federal regulation of wetlands which are not subject to the foregoing exemption including NJDEP required water quality certificates and Federal Consistency Determinations issued under the Federal Coastal Zone Management Act. N.J.A.C. 7:7A-2.9(a). N.J.S.A. 13:9B-4; N.J.A.C. 7:7A-2.8(f). See In re Stenrnark Associates, 247 N.J. Super. 13, 588 A.2d 830 (App. Div. 1991), wherein the Appellate Division held that in order for a project to be exempt fiom the transition area requirements on the basis of preliminary site plan approval prior to June 8, 1987, the application must be made under the Municipal Land Use Law (N.J.S.A. 40:55D-1 et sea.). N.J.A.C. 7:7A-2.8(g)3. N.J.A.C. 7:7A-2.8(g)4.

Land Use Regulation

Corps prior to July 1,1988, are exempt from both FWPA and $404 requirements until such time 2192 as the permit expires. Exempt Activities

Certain activities fall outside the definition of a "regulated activity" even though they may occur within a freshwater wetland, and thus are exempt from the permit requirements of the FWPA. The types of activities occurring within wetlands which are not subject to regulation include surveying and wetlands investigation activities; placement of temporary structures for wildlife management and observation purposes; hand-trimming of vegetation (so long as the trimming does not alter the character of the wetland); installation of guy anchors to secure utility poles; and driving pilings in a State open water (if not otherwise regulated by the Corps under 2193 the Federal $404 program). Similar exceptions apply to activities occurring within transition areas, provided that those activities are performed in a manner that minimizes adverse effects to both the transition 2194 area itself, and the adjoining wetland. As referenced above, "normal property maintenance" is permitted within a designated transition area. In addition, minor temporary disturbances are permitted to the extent associated with permitted activities outside of the transition area, provided the disturbances are limited to the placement of temporary fixtures or structures (e.g., 2195 scaffolds or ladders) or the non-mechanized removal of construction debris. More significantly, the FWPA exempts certain specific activities, including farming, silviculture, ranching, minor drainage projects, and other similar activities, when performed 2196 within wetlands and associated transition areas. The above exemptions are subject to significant qualifications, however, which include prohibitions against activities which alter the use, character, or resource value of the existing wetland, and causing the exemption to expire as 2197 soon as the exempt activity stops. Additionally, the exemption applies only to the portion of

2192 2193 2194 2195 2196

2197

N.J.A.C. 7:7A-2.8(i). N.J.A.C. 7:7A-2.2(~). N.J.A.C. 7:7A-2.6(b). N.J.A.C. 7:7A-2.6(b)2. N.J.A.C. 7:7A-2.8. Exemptions, however, limited to "established, ongoing farming, ranching, or silviculture operations," which means activities on areas subject to those activities as of June 30, 1988, and subject to continuous use thereafter. N.J.A.C. 7:7A-1.4. N.J.A.C. 7:7A-2.8(b).

New Jersey Environmental Law Handbook a site meeting the requirements for exemption, which does not necessarily include the whole . 2198 site. A person who believes that his or her project is not subject to regulation under the FWPA 2199 may obtain a letter from the NJDEP certifying that a proposed activity is exempt.

Letters of Interpretation As discussed above, a Letter of Interpretation (LOI) is a document issued by the NJDEP under N.J.A.C. 7:7A-3 that will officially (i) confirm the presence or absence of wetlands, State open waters, or wetlands transition areas on a parcel (a "presence/absence LOI"); (ii) verify or delineate the boundaries of freshwater wetlands, State open waters, or wetlands transition areas (a "line delineation" or "line verification" LOI); andlor (iii) assign a resource value to the 2200 wetlands which are the subject of the LOI. It is important to note that the LO1 is merely a tool to gain assurance as to the impact of freshwater wetlands on a particular property, and is not 2201 tantamount to an approval of otherwise regulated activities. Information to be provided to the NJDEP in LO1 applications and notification of other 2202 governmental agencies varies with the property size or the particular project. For properties 2203 greater than 1 acre in size, site inspections by the NJDEP may be required. The NJDEP is 2204 required to respond to requests for such letters within specified time frames, but the NJDEP's failure to respond within such times does not allow the applicant to assume that the property is 2205 not a wetland. LOIS are effective and may be relied upon for a period of 5 years, unless the 2206 information provided by the applicant is inaccurate, in which case the LO1 is void. The NJDEP will not issue an LO1 for properties which are under the jurisdiction of the Pinelands 2207 Commission.

N.J.A.C. 7:7A-2.8(b)3. N.J.A.C. 7:7A-2.lO. N.J.A.C. 7:7A-1.4; N.J.A.C. 7:7A-3.l(a), (c). N.J.A.C. 7:7A-3.1 (b). N.J.A.C. 7:7A-3.l(c). N.J.S.A. 13:9B-8(e); N.J.A.C. 7:7A-3.l(f)4. N.J.S.A. 13:9B-8(b) to (d); N.J.A.C. 7:7A-3.l(f). N.J.S.A. 13:9B-8(i); N.J.A.C. 7:7A-12.l(f). N.J.A.C. 7:7A-3.6(a). N.J.A.C. 7:7A-3.l(k).

Land Use Regulation 2.4.4 Permits General Permits

The statute and regulations allow a number of generic activities under statewide general 2208 permits comparable to the federal $404 nationwide permits. The purpose of these general permits is to provide a streamlined mechanism for the issuance of "off-the-shelf' permits for certain activities in regulated wetlands which will have only minimal adverse impacts on the existing wetlands and associated transition areas. Statewide general permits are available for the 2209 following activities: General Permit 1 - Maintenance, reconstruction, repair of roads, (1) improvements, structures existing prior to July 1, 1988, as long as no additional wetlands are disturbed (permit does not extend to transition areas as these types of activities are not regulated under N.J.A.C. 7:7A-2.6); (2) General Permit 2 - Underground utility lines. Permits, among other things, the discharge of backfill or bedding for construction and maintenance of utility lines under certain conditions. If an activity authorized under General Permit 2 also requires a flood hazard area permit under N.J.A.C. 7: 13, then the NJDEP may issue a combined permit for both activities, subject to 2210 specified criteria; General Permit 3 - Discharge of certain return waters from uplands (3) areas; General Permit 4 - Hazardous site investigation and cleanup (4) activities in freshwater wetlands, transition areas, and State open waters; General Permit 5 - Landfill closures. Approval of this general (5) 2211 permit must be accompanied by an approved mitigation plan; (6) General Permit 6 - Non-tributary wetlands. Permits activities in freshwater wetlands, transition areas, and State open waters where such areas are

2208 2209 2210 2211

N.J.S.A. 13:9B-23;N.J.A.C.7:7A-4. N.J.A.C.7:7A-5. N.J.A.C.7:7A-5.2A. N.J.A.C.7:7A-5.5(e).

New Jersey Environmental Law Handbook not part of a surface water tributary system discharging into an inland lake, pond, 2212 river or stream; General Permit 7 - Human-made ditches or swales in headwaters. (7) Permits activities in ditches and swales of not more than 1 acre in a headwaters 2213

area, subject to express limitations; General Permit 8 - House additions. Permits a one-time, limited (8) improvement or additions to residential dwellings existing prior to July 1, 1988, that require less than 750 square feet of fill; General Permit 9 - Airport sight line clearing; (9) (10A) General Permit 10A - Very minor road crossings, subject to certain 2214 conditions; (10B) General Permit 10B - Minor road crossings, subject to certain 2215 conditions; (1 1) General Permit 11 - Construction of stormwater outfall and intake 2216 structures, within certain limitations; (12) General Perrnit 12 - Surveying or wetlands investigation activities not altering the character of the land; (13) General Permit 13 - Dredging activities in wetlands for lake maintenance or restoration; (14) General Permit 14 - Placement of certain scientific equipment to monitor water quality; (15) General Permit 15 - Mosquito control activities, in accordance with 2217 established best management practices;

2212

2213 2214

2215 2216

2217

N.J.A.C. 7:7A-5.6(a). Approved activities shall not, however, take place in either a wetland, or transition area where the associated wetland is of exceptional resource value, certain State open waters, USEPA priority wetlands, or vernal habitat. N.J.A.C. 7:7A-5.6(c). N.J.A.C. 7:7A-5.7. N.J.A.C. 7:7A-5.10A. N.J.A.C. 7:7A-5.10C.

This general permit can be combined with a flood hazard area permit under

N.J.A.C. 7:7A-5.10B. N.J.A.C. 7:7A-5.11. This general permit can be combined with a flood hazard area permit under N.J.A.C. 7:7A-5.11A. N.J.A.C. 7:7A-5.15(c). Must comply with the "Best Management Practices for Mosquito Management" issued by the State Mosquito Control Commission.

Land Use Regulation

(16) General Permit 16 - Habitat creation and enhancement. Permits certain fish and wildlife management activities; (1 7) General Permit 17 - Construction of certain trails or boardwalks on publicly owned parkland or wildlife management areas or reserves; (18) General Permit 18 - Repair, rehabilitation, or maintenance of dams, with certain limitations; (19) General Permit 19 - Construction of public or private recreational and fishing docks and piers in freshwater wetlands or transition areas to gain 2218 access to State open waters; 2219 (20) General Permit 20 - Bank stabilization activities; (21) General Permit 21 - Construction of above ground utility lines; (22) General Permit 22 - Reserved; (23) General Permit 23 - Expansion of cranberry growing operations in the Pinelands, subject to express conditions and limitations; (24) General Permit 24 - Spring developments. Permits activities in farmed wetlands or State open waters necessary for the construction of a spring development or other structure that diverts or collects water for purposes of 2220 watering livestock; (25) General Permit 25 - Repair or alterations of malfunctioning subsurface sewage disposal systems; (26) General Permit 26 - Minor channel or stream cleaning for local 222 1 government agencies; and (27) General Permit 27 - Redevelopment of areas previously disturbed by commercial or industrial activities. All of the foregoing general permits, in addition to the specified criteria governing each, are also subject to certain general conditions which are designed to further limit the impact of 2222 permitted development on natural resources. These general permits are usually the only 2218

2219

2220 2221

2222

N.J.A.C. 7:7A-5.19. Note that General Permit 19 does not cover docks or piers on pilings in State open waters because such activity is not regulated under N.J.A.C. 7:7A-2.2(c)5. Permitted activities may be combined with a stream encroachment permit issued under the flood hazard area permit requirements. N.J.A.C. 7:7A-5.20A. N.J.A.C. 7:7A-5.24(a). Permitted activities may be combined with a stream encroachment permit issued under the flood hazard area permit requirements. N.J.A.C. 7:7A-5.26A. N.J.A.C. 7:7A-4.3.

New Jersey Environmental Law Handbook wetlands approval required for activities in freshwater wetlands in New Jersey. In general, the State FWPA regulations contain more stringent conditions and encompass a narrower range of activities than the federal nationwide permit program. Since the $404 program has been assumed, applicants are no longer eligible for federal nationwide permits in delegated wetlands and must qualify for the Statewide General Permit Program to obtain a general permit. If, however, an activity is located in non-delegable waters, then both general permit authorization 2223

,

and federal $404 program permits from the Army Corps of Engineers may be required. In some situations, more than one statewide general permit may be used to authorize a 2224 project, subject to additional requirements. In addition, as referenced above, an applicant may in certain instances combine a general permit authorization with a permit under the Flood 2225 Hazard Area Control Act. Individual Permits Projects in wetlands not qualifying for a statewide general permit must apply for an 2226 individual permit. An optional, pre-application conference can be requested and is "highly 2227 recommended" by the NJDEP before proceeding with the application. An application for an individual permit must include a detailed description of the project, various maps, a description of project alternatives and the reason(s) for their rejection, description of adverse environmental effects, prevention or minimization of such detriment, and verification that notice has been provided to a number of county and municipal agencies, as well as published in an area 2228 newspaper, among other information. The NJDEP must comply with certain time-lines in 2229 2230 conducting its review. USEPA review and public hearings also may be required. In practice, the application and review requirements for individual permits are much more stringent and thus, individual permits are difficult to obtain. Each individual permit applies to the entire site upon which a proposed activity will take place, thereby preventing the applicant

N.J.A.C. 7:7A-4.2(d). N.J.A.C. 7:7A-4.4. N.J.A.C. 7:7A-4.6. N.J.S.A. 13:9B-9(b);N.J.A.C. 7:7A-7. N.J.A.C. 7:7A-9. N.J.S.A. 13:9B-9; N.J.A.C. 7:7A-10 (also applicable to open water fill permits). N.J.S.A. 13:9B-5; N.J.A.C. 7:7A-12.1 to 12.6. N.J.S.A. 13:9B-5; N.J.A.C. 7:7A-12.3 to 12.5.

Land Use Regulation 223 1

from segmenting a project by applying for different permits for different portions of a project. In conducting its application review, the NJDEP cannot consider a mitigation proposal in 2232 determining whether to grant an individual permit for a project. The NJDEP will issue an individual permit only if the proposed activity "has no practicable alternative" which would (i) have a less adverse impact on the aquatic ecosystem or otherwise would not impact a freshwater wetland or State open water; and (ii) not have any other "significant adverse environmental consequences," which includes a detailed enumeration of the types of impacts associated with a proposed activity which would be fatal to the individual permit application, as well as the additional criteria which must be established to the NJDEP's 2233 satisfaction before such a permit can be issued. Generally speaking, all projects also must demonstrate that alteration or impact on the wetland is minimized to the extent feasible, ground 2234 or surface water quality is not impaired, and that the project is in the public interest. Determination of the public interest involves a weighing of public and private needs, economic values, uses and beneficial or detrimental effects, as well as ecological value and impact on 2235

public health, fish, and wildlife. Furthermore, the FWPA and its regulations establish a rebuttable presumption for any non-water dependent project that there exists a practicable alternative that does not involve a freshwater wetland and thus would have less adverse impact. The NJDEP considers cost, existing technology, logistics, and whether property not owned by the applicant could reasonably 2236 be or have been obtained in reviewing potential practicable alternatives. To rebut this presumption, an applicant must prove all of the following: (1) that the basic project purpose cannot reasonably be accomplished using other property in the general region with less impact on wetlands; (2) that the project's purpose cannot reasonably be accomplished if reduced in size, scope, configuration, or density; (3) that an alternative design cannot be used; 2237 and (4) that attempts to accommodate constraints affecting alternatives have been made. Projects proposed for wetlands of exceptional resource value also must show a compelling public

2231 2232 2233 2234 2235 2236 2237

N.J.A.C. 7:7A-7.l(c). N.J.A.C. 7:7A-7.1(b). N.J.S.A. 13:9B-9(b)(l); N.J.A.C. 7:7A-7.2(b). N.J.A.C. 7:7A-7.2@)(2)-(12). N.J.S.A. 13:9B-11; N.J.A.C. 7:7A-7.2(b)12ithrough 12vii. N.J.S.A. 13:9B-10(a);N.J.A.C. 7:7A-7.4(b). N.J.A.C. 7:7A-7.2(~).

New Jersey Environmental Law Handbook need for the proposed activity greater than the need to protect wetlands, that this public need cannot be met by similar projects in the region, or that permit denial would impose extraordinary 223 8 hardship to the applicant, based upon circumstances peculiar to the subject property. Certain conditions apply to all individual permits, including monitoring, record keeping, 2239

and reporting requirements. Additional conditions may be imposed on a case-by-base 2240 basis. If a permit is approved, transition area requirements shall be waived or modified to 2241

provide site access. "After the fact" permits can be granted in limited situations. Such a permit may be issued where wetland restoration would increase environmental harrn, a penalty is paid, mitigation is 2242 accomplished, and a public hearing is held. Temporary, emergency permits also are available 2243 under certain circumstances. 2244 2245 Permits are effective for a term not to exceed 5 years. Permits may be transferred and changes in the project may result in modification or revocation and re-issuance of 2246 permits.

Mitigation 2247 All individual permits require mitigation as a permit condition. The goal of wetlands mitigation is to compensate for the loss or disturbance of freshwater wetlands or State open 2248 waters through development. Mitigation alternatives include restoration, creation, or enhancement of wetlands on or off-site; purchase of mitigation credits; uplands preservation; or the donation of money or land to the State's mitigation bank or to other public and private non-

N.J.S.A. 13:9B-10(~);N.J.A.C. 73714-7.5. N.J.A.C. 7:7A-13.1. N.J.A.C. 7:7A-13.2. N.J.S.A. 13:9B-12. N.J.S.A. 13:9B-21(h); N.J.A.C. 7:7A-16.17. N.J.S.A. 13:9B-24; N.J.A.C. 7:7A-8.1. N.J.A.C. 7:7A-13.3. N.J.A.C. 7:7A-14.2. N.J.A.C. 7:7A-14.1, 14.3-14.5. Fees for review of permit applications and other agency action are set forth at N.J.A.C. 7:7A-11. N.J.S.A. 13:9B-13(a); N.J.A.C. 7:7A-13.l(a)(4); N.J.A.C. 7:7A-15. N.J.A.C. 7:7A-15.1.

Land Use Regulation 2249

profit conservation organizations. The mitigation area must be at least equal to the size of the area disturbed, and may be significantly larger, depending on the type of mitigation proposed and 2250 the ecological value of the replacement wetlands. While not limited exclusively to individual permit authorizations, mitigation may also be required by the NJDEP for general permits and open fill permits, or in connection with an enforcement action to correct violations of the FWPA.~~" The regulations, as originally promulgated, included presumptions regarding the ratio of the area subject to mitigation requirements to the area disturbed. These regulations presumed that if mitigation was to be accomplished through the enhancement of degraded wetlands, a ratio of 7 acres enhanced to every acre disturbed would be required. Creation of new wetlands were to be created in a 2:l ratio to those disturbed. The 2:l ratio was upheld by the Appellate 2252 Division, but the court struck down the 7:l ratio as not supported by scientific evidence. The regulations state that ratios are to be determined on a case-by-case basis based upon a 2253 documented assessment of loss of ecological value of the wetlands disturbed. For restoration 2254 of wetlands, the current regulations retain the previous 2: 1 ratio requirement. Mitigation by contribution requires donation of land or money to the Wetlands Mitigation

Bank or to other approved non-profit conservation organizations and is acceptable only if other 2255 mitigation alternatives are not practicable or feasible. The Mitigation Bank is managed by a Wetlands Mitigation Council, which operates independently of the NJDEP. The seven-member Mitigation Council is composed of six members of the general public drawn equally fiom representatives of higher education, environmental and conservation groups, and building and 2256 development organizations, plus the Commissioner of the NJDEP, who serves ex oficio. The Mitigation Council may fund mitigation projects and acquire land, with certain restrictions, for

N.J.A.C. 7:7A-15(c). N.J.A.C. 7:7A-15.2(~). N.J.A.C. 7:7A-15.2(b). N.J. Chapter of the National Ass'n of Industrial and Office Parks v. State, Dept. of Environmental Protection, 241 N.J. Super. 145, 574 A.2d 514 (App. Div.), certif. denied, 122 N.J. 374, 585 A.2d 379 (1990). N.J.A.C. 7:7A-15.8(e). N.J.A.C. 7:7A-15.8(d). N.J.A.C. 7:7A-15.5(f), 15.6(f). N.J.S.A. 13:9B-14.

New Jersey Environmental Law Handbook 2257

subsequent mitigation. Mitigation Bank resources cannot be used to aid permittees or 2258 violators in accomplishing required mitigation. Appeals Appeal of the NJDEP's decision to issue or deny a freshwater wetland or open water fill permit by an applicant or other affected parties is through request for an administrative hearing 2259 pursuant to the New Jersey Administrative Procedure Act and the regulations promulgated 2260

Such a request must be filed within 30 days of the contested decision. An pursuant thereto. administrative law judge hears the appeal and makes a recommended decision. The NJDEP Commissioner then affirms, rejects, or modifies the hearing decision. The Commissioner's act is considered final agency action and is subject to review by the Appellate Division of the New 2261

Jersey Superior Court. Tax Considerations If a freshwater wetlands pennit is denied, the denial may be taken into account when the 2262

property is valued, assessed, and taxed. Takings Considerations A number of decisions have held that a wetlands permit denial can constitute a taking for which "just compensation" is required under the 5th Amendment of the Constitution. In Florida 2263 for example, the federal Court of Appeals held that a Rock Industries. Inc. v. United States, wetlands permit denial could rise to the level of an unconstitutional taking that would warrant just compensation if the permit denial involves a "total loss" of viable economic use (otherwise known as a "categorical" taking), or if there was a "partial loss" of economic use that crossed the line between a non-compensable "mere diminution" and a compensable regulatory taking. The Court indicated that the line dividing these two realms should be drawn based on the facts of each particular case. At the same time, it indicated that the degree of "reciprocity'' between the private burdens imposed on the landowner and the public benefits enjoyed by the landowner and others would weigh heavily in the balance.

N.J.S.A. 13:9B-15; N.J.A.C. 7:7A-45.20-15.25. N.J.A.C. 7:7A-15.20(d). N.J.S.A. 52:14B-1, et seq. N.J.A.C. 1:l-1, et seq.; N.J.A.C. 7:7A-12.7. N.J.S.A. 13:9B-20; N.J.A.C. 7:7A-12.7. N.J.S.A. 13:9B-19. 18 F.3d 1560 (3d. Cir. 1994), cert. denied, 130 L.Ed. 2d 783 (1995).

Land Use Regulation 2264

In Loveladies Harbor, Inc. v. United States, the federal Court of Appeals held that denial of a wetlands permit resulted in a categorical taking requiring compensation. The property owner, a developer, purchased 250 acres of vacant land in New Jersey in 1956. The owner developed a significant portion of the property after the $404 program was in place. By May of 1982, 199 acres were developed; the remaining acreage had been restricted from development under State and federal wetlands regulations. The State granted a permit for development of an additional 12.5 acres, but the Corps denied a permit for any development of the remaining property. The property owner sought compensation for a taking of the 12.5 acres. The Court found that there was no market for the property subject to the permit denial, except government purchase for conservation or recreation, and found a 99 percent diminution in 2265 property value, awarding $2,658,000 to the property owner for the taking. In addition to these decisions involving wetland permits, the United States Supreme Court has considered regulatory takings in the context of a South Carolina prohibition on beachfront development and in the imposition of local land use restrictions. In Lucas v. South 2266 Carolina Coastal Council, the Supreme Court considered whether the denial of a construction permit under a state beachfront development law constituted a taking without compensation. In this case, a developer purchased a tract of beachfront property prior to the passage of South Carolina's Beachfront Management Act (BMA) in 1988, which prohibited residential construction on certain beach areas. After the developer was denied a construction permit, he sought compensation for a taking of property. The trial court held that his property was rendered valueless by the BMA and awarded compensation for a taking. On appeal to the Supreme Court of South Carolina, the court reversed the holding, finding that the BMA was a lawful exercise of the State's police power to "prevent serious harm," and found that no compensation was owed.

2264

2265

2266

28 F.3d 1171 (3d. Cir. 1994), rehearing en banc denied, 1994 U.S. App. LEXIS 28462 (3d. Cir. Sept. 29, 1994). It is important to note that the court in both Florida Rock and Loveladies divided the parcels of land into separate and distinct smaller parcels, treating each parcel separately for determining whether the particular regulation affected a "talung" requiring just compensation. At least one New Jersey court has rejected such an approach. In Karam v. State of New Jersey Dept. of Env. Protection, 308 N.J. Super. 225, 238, 705 A.2d 1221 (App. Div. 1998)' the court held that adjoining upland and riparian lands must be considered as a single property unit, and thus the denial of a dock permit did not constitute a "taking," as it did not deny all use of the property. 505 U.S. 1003,112 S.Ct. 2886, 120 L.Ed.2d 798 (1992). Note that the Court's decision in Lucas concerned a taking of "all economically beneficial use" of property. For cases where there is less than a complete regulatory taking (with the exception of the land-use exaction cases discussed in Nollan and Dolan, inffa), the Supreme Court is guided by its decision in Penn Central Transv. Co. v. New York Citv, 438 U.S. 104, 98 S.Ct. 2646,57 L.Ed 2d 631 (1978).

New Jersey Environmental Law Handbook The Supreme Court disagreed, however, and remanded the case for consideration of common-law nuisance factors such as the degree of harm to public lands and the social value of the activity. In essence, the Supreme Court found that unless the State law regulated the prevention of a public nuisance, if application of the law relieved the property owner of all economically beneficial uses, a taking would have occurred.

In analyzing whether all

economically beneficial uses of the property had been deprived, the Court stated that the appropriate inquiry is into the nature of the property interest originally acquired and whether the proscribed use interests were not part of the title to begin with. This analysis, the Court stated, presumes that uses of property will become necessarily restricted fiom time to time by the legitimate exercise of police power. 2267 In Dolan v. City of Tigard, the Supreme Court adopted a new test for determining whether a municipality's exaction of land dedications as a condition to issuing a development 2268 permit constituted an unconstitutional taking. The Court applied the Nollan test, finding that the city must show an "essential nexus" exists between a claimed legitimate State interest and the permit condition. Then the Court held that if such nexus exists, the city must make an individual determination that the condition is related both in nature and extent to the impact of the proposed development. In this case, the Court held that the city failed to demonstrate a reasonable relationship between its interest in flood control needed to mitigate the proposed construction and a condition requiring the applicant to dedicate flood plain land for a greenway. While the 2269 decision was far fiom unanimous, it signals a growing trend by the Supreme Court to support individual property rights at the expense of municipal and State land use restrictions. 2270 In Lingle v. Chevron U.S.A. Inc., the Supreme Court was tasked with clarifying its 2271

prior holding in Agins v. Citv of Tiburon, where it was declared that governmental regulation of private property "effects a taking if [such regulation] does not substantially advance legitimate 2272 state interests . . . ." Though never relied upon to support a decision finding a compensable taking, this language has nevertheless been ensconced in Fifth Amendment takings

572 U.S. 374,114 S.Ct. 2309,129 L.Ed.2d 304 (1994).

See Nollan v. California Coastal Comm'n, 483 U.S. 825, 107 S.Ct. 3141,97 L.Ed. 2d 677 (1987). Justice Stevens, Blackmun, and Ginsberg dissented, prefeming a rational basis test, and Justice Souter dissented, preferring solely the essential nexus test used in Nollan. 544 U.S. 528,125 S.Ct. 2074, 161 L.Ed.2d 876 (2005). 447U.S. 255, 100 S.Ct. 2138,65 L.Ed. 106 (1980). Lingle, 125 S.Ct at 2078 (quoting

u, 447 U.S. at 260).

Land Use Regulation 2273

In its analysis, the Court acknowledged that the "substantially advances" jurisprudence. language had been interpreted in this instance as a stand-alone regulatory takings test which was wholly independent of the holdings in prior cases such as Loretto v. Teleprompter Manhattan 2274 Lucas, and Penn Central, all three of which involved regulatory actions which CATV Corp., "are functionally equivalent to the classic taking in which government directly appropriates 2275

private property or ousts the owner from his domain." To prevent further misplaced reliance on Agins, the Court opined that the "substantially advances" language is more of an inquiry in the nature of a due process as opposed to a takings 2276 test, and thus has no proper place in takings jurisprudence. In so doing, the Court reaffirmed that a plaintiff seeking to challenge a government regulation as an uncompensated taking of private property may proceed under the previously established tests - by alleging a Loretto-type "physical" taking, a Lucas-type total regulatory taking, a Penn Central taking, or a land-use 2277 exaction of the kind described in Nollan and Dolan. As this edition goes to print, the most recent decision in the takings arena is that of the 2278

United States Supreme Court in Kelo v. City of New London. Connecticut. Although not a regulatory takings case, involved a challenge by residential property owners to the City of New London's exercise of the eminent domain power on the grounds that such a taking was not 2279 The for a public use within the meaning of the Takings Clause of the Fifth Amendment. City's exercise of the power of eminent domain in Kelo was rooted in a redevelopment plan designed to facilitate the development of a pharmaceutical research facility - with the hopes that such a project would be a catalyst for revitalizing the City's otherwise declining economic 2280 In upholding the City's condemnation efforts, the Supreme Court determined that condition. (i) the development plan was carefully considered and not designed to benefit a particular class

Lingle, 125 S.Ct at 2086. 458 U.S. 419,102 S.Ct. 3164,73 L.Ed. 2d 868 (1982). Linde, 125 S.Ct 2082. Id. at 2083. Id. at 2087. 125 S.Ct. 2655,162 L.Ed.2d 439 (2005). 125 S.Ct. at 2658 ("[Nlor shall private property be taken for public use, without just compensation."). Id. at 2659. -

New Jersey Environmental Law Handbook 2281

of private individuals; and (ii) the property in question was sufficiently distressed to justify a 2282 program of economic redevelopment. In terms of the public use at issue, the Court opined that it embraces a more natural interpretation of "public use" as meaning a "public purpose" - thereby rejecting any literal 2283

requirement that the property so condemned be put to use for the public. In this instance, the Court found that the benefits of new jobs and increased tax revenue resulting from the planned 2284

development.advanced such a public purpose by promoting economic development. At its core, reaffirms the growing practice of condemning otherwise good properties - residential properties - where necessary to advance redevelopment efforts which will bring tax ratables to a municipality. The uncertainty, however, resides in how far the courts will go to uphold takings under the guise of redevelopment, and whether the Legislature will step into place limitations on such takings in the future. 2.4.5 Enforcement The NJDEP is afforded a wide panoply of enforcement alternatives and remedies for violations of the FWPA and its regulations, including issuance of an administrative order, institution of civil or criminal proceedings, assessment of penalties, termination of permits, and 2285

recording of a notice of violation on the property deed. Penalties include maximum fines of $10,000 per violation for civil violations, with each 2286 day of a continuing violation constituting a separate and distinct offense, and up to $25,000 2287 per day for criminal violations that are a first offense. Maximum fines for a second criminal 2288 2289 offense are $50,000 per day. Criminal violations are fourth-degree crimes. Violators also may be assessed costs of investigation or 'monitoring of the alleged violation, costs of instituting suit, costs for removing or correcting the violation, and

Id. at 266 1-62. Id. at 2664-65. Id. at 2662. Id. at 2665. -

N.J.S.A. 13:9B-21; N.J.A.C. 7:7A-16. N.J.A.C. 7:7A-16.5 and 16.11. N.J.A.C. 7:7A-l6.14. Id. -

N.J.S.A. 13:9B-21(f); N.J.A.C. 7:7A-16.14(~).

Land Use Regulation 2290

compensatory damages. The NJDEP also may, as part of a civil administrative penalty, assess a violator the dollar value of the economic benefit realized by not complying or by 2291 delaying compliance with the FWPA or regulations. 2.5 FLOODWAYS

2.5.1 Flood Hazard Area Control Act The Flood Hazard Area Control Act is a comprehensive statute designed to address and 2292 reduce risks arising from flooding. The Act broadly addresses the identification of flood 2293 2294 hazard areas (excluding coastal wetlands) and the control of flood damage in those areas. 2295 Additionally, the Act regulates stream cleaning and clearing activities. The purposes of the Act are achieved and implemented through the stream encroachment permit program and associated NJDEP regulations. Stream encroachment is defined as any "manrnade alteration, construction development, 2296 or other activity" that takes place in an area subject to regulation under the program. The Flood Hazard Area Control Act does not precisely define the areas subject to regulation, which are instead defined by NJDEP's regulations. Under NJDEP's regulations, stream encroachment permits are required for developments that are (1) in the flood plain (a term that is further defined in the regulations); (2) 25 feet back fiom the top bank of any channel; or (3) 50 feet back fiom the top of any channel bank along waters containing acid-producing soils, waters of certain classifications, or waters that are a critical part of the habitat supporting a threatened or 2297 endangered species. The stream encroachment regulations do not apply to tidal water bodies, waters along the Delaware and Raritan Canal, tidal wetlands regulated under the Wetlands Act of 1970, or tidally influenced flood plains that are regulated either under the Waterfront and Harbor 2298 Facilities Act or under CAFRA. Because these jurisdictional issues can be difficult to

N.J.S.A. 13:9B-21(c); N.J.A.C. 7:7A-16.4. N.J.A.C. 7:7A-16.12. N.J.S.A. 58:16A-50, et sea. N.J.S.A. 58:16A-60. The Wetlands Act of 1970, N.J.S.A. 13:9A-1 et sea., applies to coastal wetlands and regulates development and other activity in such areas. See $2.2.1, m.See& N.J.S.A. 58: 16A-60. N.J.S.A. 58:16A-50(b) (authorizing the NJDEP "to delineate and mark flood hazard areas, . . . to adopt land use regulations for the flood hazard area, to control stream encroachments . . . ."). N.J.S.A. 58:16A-67. N.J.A.C. 7:13-1.2. N.J.A.C. 7:13-1.3(a). N.J.A.C. 7:13-1.3(b)(l), (c), and (d).

New Jersey Environmental Law Handbook unravel in a particular case, persons may submit a request for a written determination from the 2299 Department as to whether a particular activity is subject to the stream encroachment program. 2.5.2 Intergovernmental Roles in Regulation of Floodways The Act divides the responsibility to regulate floodways among several governmental bodies. These responsibilities are centralized in the Department, with some aspects of the regulatory scheme delegated to local government bodies. The Flood Hazard Area Control Act gives the NJDEP exclusive responsibility in certain areas where centralized control is deemed essential: to study the nature and extent of areas affected by flooding in the State and (1) 2300 to delineate flood hazard areas; (2) to mark flood hazard areas and regulate land use in delineated 2301 floodways; to prescribe conditions for and approve, to the exclusion of county or (3) municipal agencies, any structure or alteration in the 100-year flood plain of any non2302

delineated stream; and to establish minimum standards for local rules and regulations governing (4) 2303 development and use of land in the flood fringe area. The Act requires local governments to adopt ordinances that implement and enforce 2304 but permits municipalities to adopt more stringent minimum standards established by NJDEP, 2305 restrictions. Municipalities cannot approve an application for development of a structure within the 100-year flood plain of a non-delineated stream or for a change in land use within a 2306 delineated floodway unless NJDEP has first approved the project. NJDEP has authority to oversee municipal regulation of such activity, and may take appropriate action if a municipality or other responsible entity fails to adopt or enforce local rules and regulations, or otherwise fails

N.J.A.C. 7:13-1.3(g). N.J.S.A. 58:16A-52. N.J.S.A. 58:16A-53 and -55. N.J.S.A. 58:16A-55.2 and -55.3. N.J.S.A. 58:16A-56. N.J.S.A. 58:16A-57. N.J.S.A. 58:16A-62. N.J.S.A. 58:16A-55.3.

Land Use Regulation 2307

The Act directs local tax assessors to consider the impact of flood to comply with the law. hazard regulations in establishing the taxable value of lands designated as floodways or flood 2308 fringes. Finally, the Act provides various mechanisms by which New Jersey's counties can control flood hazards. After consultation with the Department, counties can prepare a stormwater control and drainage plan which, once adopted, must be considered by the 2309 Department in areas governed by the plan. The Act also authorizes counties to create a county water resource association. The association's function is to advise the county governing body as to flood control and water management functions, and exercise authority in these areas 2310 as delegated by the county governing body. Of particular significance, the Act authorizes NJDEP to delegate its authority to approve 2311 or disapprove applications under the Act to county governing bodies. Counties must agree to such delegation, must comply with Department guidelines, and must undergo review by the Department at least every 2 years. When approval authority has been so delegated, the county 2312 must apply the same standards and criteria as NJDEP would apply. 2.5.3 Delineation of Flood Hazard Areas The Department maintains a list of delineated streams in the New Jersey Administrative 2313 Code. For State-delineated watercourses, the area subject to regulation, known as the "flood hazard area design flood," is the "100-year flood plain increased by 25 percent to allow for 23 14 future development in the drainage basin." For watercourses that have not been delineated, NJDEP regulations require encroachment lines to be calculated by a "standard step backwater 2315

analysis" using a flow rate that assumes full development of the contributory drainage area.

N.J.S.A. 58:16A-58. N.J.S.A. 58:16A-61. See* Filcrest Realtv, Inc. v. Edison Tp., 2 N.J. Tax 77 (1980); Capture Realtv Corn. v. Board of Adiustment, 126 N.J. Super. 200,217,313 A.2d 624,633-34 (Law Div. 1973), aff,133 N.J. Super. 2 16, 336 A.2d 30 (App. Div. 1975). N.J.S.A. 58:16A-55.4. N.J.S.A. 58:16A-55.5. N.J.S.A. 58:16A-55.6. N.J.A.C. 7:13-4.11. For most of these delineated areas, maps of the delineated floodway and flood hazard area are available. For others, the elevations of the floodway and flood hazard area are available and delineations must be determined on a case-by-case basis. See N.J.A.C. 7:13-7.1. N.J.A.C. 7:13-2.3(a). N.J.A.C. 7.13-2.4.

New Jersey Environmental Law Handbook The Act establishes certain requirements for stream delineations by the NJDEP. Procedurally, flood hazard area delineations must be treated as administrative regulations. They are adopted after notice and public comment in accordance with the requirements of the New 2316 In addition, the Department must establish a procedure Jersey Administrative Procedure Act. to reduce the delineated area if changed conditions increase a stream's flood carrying 2317

capacity. Substantively, the delineations protect against improper development and associated flooding which could constitute a threat to the public safety, health, and general 2318 As such, the Department must identify various subportions of the flood hazard area welfare. 2319 "for reasonable and proper use according to relative risk." The statute also provides that, "wherever practicable," floodway delineations should be "identical" to those adopted by the 2320 federal government's National Flood Insurance Program. However, NJDEP's regulations indicate that the federal flood insurance maps generally "did not anticipate future development in the drainage basin," and that NJDEP therefore will not accept such maps for non-delineated watercourses unless it is demonstrated that the maps reflect full development, or there is a viable 2321

basin-wide stormwater management system in place. 2.5.4 Stream Encroachment Permits When a Stream Encroachment Permit Is Necessary All "development" within the flood plain or within certain distances from the channel 2322 "Development" is bank requires a permit unless specifically exempted from regulation. 2323 defined as "any construction activity or other manmade land disturbance." The areas that are subject to regulation are the floodplain (as delineated and defined in the regulations and as discussed above), 25 feet back from the top of a channel bank, and 50 feet back from the top of

N.J.S.A. 58:16A-52(a). The Administrative Procedure Act requires at least 30 days' notice of the Agency's intended action and guarantees interested parties an opportunity to submit comments either orally or in writing. N.J.S.A. 52:14B-4. N.J.S.A. 58: 16A-52(c). N.J.S.A. 58: 16A-52(a). Id. Relative risk is defined as "the varying degrees of hazard to life and property in a flood hazard area which are occasioned by differences in depth and velocity of flood waters covering and flowing over it." N.J.S.A. 58:16A-51(d). N.J.S.A. 58:16A-52(b). N.J.A.C. 7:13-2.3(b)(2). N.J.A.C. 7:13-1.3(a). N.J.A.C. 7:13-1.2.

Land Use Regulation 2324

channel banks along specified environmentally significant waters. The Department's regulations describe activities in the floodway (channels and their adjacent areas) and the flood fringe (that portion of the flood plain that is not the floodway), that ari either non-regulated or prohibited. Stream Encroachments in the Floodway NJDEP regulations identify several uses that are non-regulated in floodways. These include lawns, gardens, and areas specifically designed for use by children; areas specifically marked and designated for private and public recreation; open decks attached to residential structures; certain agricultural activities; certain docks and boathouses; certain utilities which cannot otherwise be located outside the floodway; approved fish habitat devices; and certain 2325 minor repair and remediation activities. Other activities will be considered non-regulated if they do not obstruct flood flow, do not require the erection of structures or channel modification, do not alter the cross-sectional area of a water control structure, do not increase off-site flood damage, do not adversely effect flood plains, do not cause or contribute to a water quality 2326

violation, and are undertaken with the landowner's written permission. Subject to certain exceptions, NJDEP regulations prohibit a variety of activities in floodways, including the addition of fill, new structures or fencing that would raise the existing grade of the receiving area or obstruct flow; the addition of any solid or hazardous waste or pollutant; the discharge, processing, storage or disposal of pesticides, domestic or industrial wastes, radioactive materials, petroleum products, or other hazardous materials unless specifically authorized by law and an applicable permit; storage of materials or equipment; construction of individual subsurface sewage disposal systems; and construction of off-channel 2327 detentionlretention basins. All other development activity in the floodway requires a stream encroachment permit. Stream Encroachment Permits in the Flood Fringe In the flood fringe, which generally reaches beyond the stream channels and adjacent areas of the floodway, the Department determined that a variety of activities would not be 2328 regulated. These include additions to single-family residences up to a total of 300 square

2324 2325 2326 2327 2328

N.J.A.C. 7:13-1.3(a). N.J.A.C. 7:13-1.3(e)(2). N.J.A.C. 7: 13-1.3(e)(l). N.J.A.C. 7:13-2.2. N.J.A.C. 7:13-1.3(f).

New Jersey Environmental Law Handbook feet; residential and commercial improvements such as lawns and play areas specifically designed for use by children; gardens and landscaping; certain private and public recreation areas; certain types of agricultural activities; minor utility installations; and roadway 2329 maintenance and repairs. Engineering and Environmental Standards NJDEP's regulations contain engineering standards that apply along watercourses having 2330 The regulations contain explicit a total contributory drainage area greater than 50 acres. 2331 2332 2333 provisions for projects involving stream cleaning, excavation, disposal of spoils, 2334 2335 2336 2337 2338 stormwater management, channel modification, utilities, dams, placement of fill, 2339 2340 and sewage disposal. bridges and culverts, The regulations also contain environmental standards which apply to all watercourses 2341 subject to stream encroachment permit jurisdiction regardless of drainage area size. Generally, the regulations require the applicant to describe short- and long-term impacts of the 2342 The proposed activity, identify cumulative impacts, and minimize environmental damage. regulations also contain specific standards governing protection of near watercourse 2343 2344 vegetation, soil erosion and sediment control, mitigation of impacts to receiving

N.J.A.C. 7:13-1.3(f)(2).

N.J.A.C. 7:13-2.1(a)(l). N.J.A.C. 7:13-2.5. N.J.A.C. 7:13-2.6. N.J.A.C. 7:13-2.7. N.J.A.C. 7:13-2.8. N.J.A.C. 7:13-2.9. N.J.A.C. 7:13-2.10,-2.11. N.J.A.C. 7:13-2.12. N.J.A.C. 7:13-2.14. N.J.A.C. 7:13-2.16. N.J.A.C. 7:13-2.17. N.J.A.C. 7:13-2.1(b). N.J.A.C. 7:13-3.1(b). N.J.A.C. 7:13-3.2. N.J.A.C. 7:13-3.3.

Land Use Regulation 2345

2346

watercourses and other jurisdictional areas, projects along trout-associated watercourses, 2347 2348 projects affecting other fish resources, projects exposing deposits of acid-producing soils, 2349 2350 impacts to freshwater wetlands, and impacts to threatened and endangered species. The Permit Application Process The permit application process is outlined in Subchapter 4 of the Flood Hazard Control 2351 2352 Area regulations and in the 90-day construction permit regulations. The regulations provide for, and the Department encourages, a pre-application conference to be used to seek advice concerning a specific application or to submit an application in person and have it 2353 reviewed for completeness. To be complete, the application must include the Land Use Regulation Program (LURP) permit application form, the appropriate fee, an engineering data sheet, a soil erosion and sediment control plan, six sets of plans, color photographs, and an "environmental report" 2354 addressing the substantive requirements of NJDEP's regulations. The applicant also must 2355 provide proof that notice has been provided to appropriate parties. Once the application is 2356 submitted, the Department has 20 days in which to review it for completeness. If deemed 2357 complete, the Department processes the application under the 90-day permit rules. These

N.J.A.C. 7: 13-3.4. N.J.A.C. 7:13-3.5. N.J.A.C. 7: 13-3.6. N.J.A.C. 7:13-3.7. N.J.A.C. 7: 13-3.8. N.J.A.C. 7: 13-3.9. N.J.A.C. 7:13-4.1 to -4.1 1 N.J.A.C. 7:lC-1.1 to -1.12. The 90-day permit rules are required by N.J.S:A. 13:lD-29 to -34 for construction permits, which include stream encroachment permits, as a means of assuring reasonably prompt agency action on permit applications when delay would adversely affect the proposed project. N.J.A.C. 7: 13-4.3. N.J.A.C. 7:13-4.1 (applicants are encouraged to review the regulations to verify that the appropriate information has been submitted). N.J.A.C. 7: 13-4.2. N.J.A.C. 7:13-4.7. N.J.A.C. 7:lC-1.1 to -1.12. Under the 90-day rules, the Department publishes notice of the filing of the application in the NJDEP Bulletin and considers comments received at or within 15 days after the public hearing, if one is held, or during the public comment period. N.J.A.C. 7: 1C-1.6, 1.7(a)(5).

New Jersey Environmental Law Handbook 2358

rules, which govern certain other permits in addition to stream encroachment permits, establish a 90-day time limit within which the Department must act on the permit application. 2359 Failure to act within 90 days means that the permit is granted automatically. The 90-day time limit begins to run when the Department accepts the application as 2360 If the Department determines that the application is deficient and requests complete. additional information from the applicant, the application is complete for purposes of the 90-day 2361

clock when the Department receives the additional information. Stream encroachment permits are valid for a period of 5 years, during which the permit 2362 holder must complete the proposed construction. If the applicant has not completed construction within 5 years, a new permit is required if the applicant wishes to complete the project. The Department no longer performs "over-the-counter" permit processing, which 2363 previously allowed for 24-hour processing of some minor stream encroachment permits. Hardship Waivers NJDEP can waive strict compliance with substantive standards set forth in the regulations 2364 upon a showing of hardship. Hardship waivers are appropriate in three circumstances: (i) in cases where there is no "feasible and prudent" alternative which would avoid any anticipated adverse effects but the public health and safety are still reasonably protected, (ii) in cases where the NJDEP determines that the costs of strict compliance would substantially outweigh the benefits, or (iii) where an alternative would provide better protection to the public health and

Other permits covered by the 90-day rules include construction permits for development on tidal or navigable waterways, permits required under the Wetlands Act of 1970, and permits required under the Coastal Area Facility Review Act. N.J.S.A. 13:lD-29. Individual permits under the Coastal Area Facility Review Act, however, are not subject to the strict 90-day rule. N.J.S.A. 13:lD-32. N.J.A.C. 7:lC-1.8. N.J.A.C. 7: 13-4.7(d). In Klimar Realty. Inc. v. Dev't of Environmental Protection, 217 N.J. Super. 526,526 A.2d 282 (App. Div. 1987), the court held that the plain language of N.J.S.A. 13:lD-31 required action within 90 days from when the application is complete, and that N.J.S.A. 13:lD-30 plainly states that when the Department receives additional information requested the application is complete, and that language in N.J.A.C. 7:lC1.8 and N.J.A.C. 7: 13-2.8(b) to the effect that the Department must accept the additional information as complete to begin the 90-day time limit is inconsistent with the statutory language and purpose. N.J.A.C. 7: 13-4.7(f). See N.J.R. 998(a); N.J.R. 2599(a). S e e d N.J.A.C. 7: 1C-1.13 (repealed).

N.J.A.C. 7:13-4.8.

Land Use Regulation 2365

To obtain a waiver, the applicant must demonstrate the hardship and justify that a safety. 2366 In addition, the applicant must submit detailed information showing waiver is appropriate. how the project subject to waiver will, if granted, affect the potential hazards from flooding in 2367 The Department must decide hardship waiver requests within 90 days the project area. 2368

receipt of a complete application.

Emergency Permits In situations where prompt action is necessary to protect the public health and welfare, the Department can grant an emergency stream encroachment permit for a regulated activity. Under these procedures, the applicant must provide telephone notice to the Department of the emergency and the work to be done, obtain verbal approval from the Department, expeditiously perform the work, and notify all affected boards, authorities, agencies, and neighboring property owners as soon as possible. Once the work is completed, the applicant must file a normal 2369 application for a written stream encroachment permit. Appeals of Permit Decisions Applicants or others aggrieved by a permit decision have a right to an administrative appeal, which must be requested in writing within 10 days of the publication of notice of the 2370 If the Department grants the appealing party's request for a fact-finding permit decision. hearing, the hearing is held before an administrative law judge (ALJ) in the Office of 2371 After the ALJ renders an initial decision, a final decision is made by the Administrative Law. 2372 Commissioner of the Department. Persons aggrieved by administrative appeal decisions can seek judicial review. Judicial review of a municipal administrative appeal is available by an action in lieu of prerogative writs

N.J.A.C. 7:13-4.8(a)(l), (2) and (3). N.J.A.C. 7:13-4.8(d). N.J.A.C. 7: 13-4.8(e) (regulations outline eleven areas that must be addressed). N.J.A.C. 7:13-4.8(g)(l). SeeTerner v. Suvco, Inc., 226 N.J. Super. 532, 545 A.2d 192 (App. Div. 1988) (upholding municipal planning board's use of the NJDEP hardship variance regulation where local ordinance designated flood plain but did not explicitly provide for hardship variances).' N.J.A.C. 7:13-4.6. N.J.A.C. 7:13-4.10. N.J.A.C. 7:13-4.10(d). N.J.A.C. 7: 13-4.10(d).

New Jersey Environmental Law Handbook 2373

Judicial review of Department permit decisions in the Law Division of the Superior Court. 2374 lies in the Appellate Division of the Superior Court. 2.5.5 Enforcement The Flood Hazard Area Control Act gives the NJDEP the authority to seek injunctive 2375 The NJDEP is relief and penalties for violation of the Act or its implementing regulations. A

also authorized to collect, in a summary proceeding under the Penalty Enforcement Law, penalties of up to $1,500 for violations of the Act or regulations, which can be increased to 2376 If the violation is of a continuous nature, the potential $2,500 for knowing violations. penalties can be substantial because the Act provides that each day is deemed a separate 2377 violation. The regulations under the Flood Hazard Area Control Act provide that the NJDEP may 2378 This choose to treat violations of the Act as violations of the Water Pollution Control Act. provision makes violations of the Flood Hazard Area Control Act much more costly, because the Water Pollution Control Act authorizes fines of up to $50,000 for each violation and empowers the Commissioner of NJDEP to issue administrative orders requiring compliance and potentially 2379 leading to an administrative hearing.

2.5.6 The State Flood Control Facilities Act 2380 authorizes the NJDEP to plan, acquire, construct, and operate flood This statute control facilities either separately or in conjunction with the federal government, municipality, or 2381 In addition, the Commissioner, at his or her discretion, may lease, sell, or exchange county. 2382 property taken for flood control projects.

N.J. Ct.R. 4:69. N.J. Ct.R. 2:2-3. N.J.S.A. 58:16A-63(b). N.J.S.A. 58:16A-63(a). Id. N.J.A.C. 7:13-5.4. N. J.S.A. 58: 10A-1O(b), (d) and (e). N.J.S.A. 58:16A-1, et sea. N.J.S.A. 58:16A-4.1,7. N.J.S.A. 58:16A-10.

Land Use Regulation STATE OPEN WATERS State open waters are regulated under the New Jersey Water Pollution Control Act and the FWPA. The FWPA rules define "state open waters" as those waters of the State, within the State's jurisdiction, or of the United States within the boundary of the State that are neither 2383 wetlands nor groundwater. "Waters of the United States" encompass all bodies of water 2384 affecting interstate commerce, including tidal waters. Discharge in State open waters requires 2385 a State open water fill permit under the FWPA. For tidal State open waters, the NJDEP will not require a State open water fill permit if the applicant must obtain either a CAFRA or 2386 waterfront development permit.

2.6

3.0 SPECIAL MANAGEMENT AREAS 3.1 PINELANDS 3.1.1 Introduction In the south central area of New Jersey lies over one million acres of unique pine forests, cedar swamps, and billions of gallons of pristine groundwater known for centuries in folklore as the Pine Barrens. Faced with the potential for serious encroachment of this unique area, in 1978, the United States Congress, through the National Parks and Recreation Act, established the 2387 Pineland National Reserve, the first reserve of its type in the country. One year later, the New Jersey Legislature passed the Pinelands Protection Act in order to control development 2388 within the Pinelands and to preserve its unique character and natural resources. The Pinelands, as designated by the Act, encompass an area within Ocean, Burlington, Atlantic, Cape May, and Cumberland counties. The Act created a planning commission to develop a 2389 comprehensive management plan for this purpose.

2383 2384 2385 2386

2387 2388 2389

N.J.A.C.7:7A-1.4. Id. N.J.S.A. 58:lOA-6;N.J.A.C. 7:7A-1.4. NDEP Policy Memorandum, R. Tudor, "Regulatory Jurisdiction and permitting requirements of state open waters," (June 9, 1992). 16 U.S.C. $ 471(i). N.J.S.A. 13:lgA-2. N.J.S.A. 13:18A-4.

New Jersey Environmental Law Handbook 3.1.2 Pinelands Comprehensive Management Plan The goal of the Pinelands Comprehensive Management Plan is "to protect, preserve, and 2390 enhance the significant values of the resources" contained within the Pinelands area. The plan assesses the natural resources within the Pinelands and determines the amount of development the Pinelands can sustain. It also sets forth development policies and outlines 2391 Affected local governments minimum standards to control the development and use of land. must revise their master plans and zoning ordinances to implement the objectives and conform 2392 with the minimum development standards set forth in the Management Plan. In addition, the NJDEP must review its coastal area plan and make appropriate revisions to conform with the 2393 Pinelands Management Plan. Land Development No development can occur within the Pinelands unless such development is in strict conformity with the Pinelands Management Plan. Each local and State agency issuing development permits is charged with ensuring that the development conforms with the Management Plan. The Commission, however, may review any application for development in 2394 the Pinelands area. The Commission may also grant a waiver of any standard set by the Management Plan upon a showing of extraordinary hardship or compelling public need, and that the development is consistent with the purposes of both the State and federal acts and will not 2395 substantially impair the resources of the area. In practice, obtaining a waiver may be a 2396 difficult task and should only be considered as an option of last resort. Due to the restrictive nature of the regional land use scheme, a local farmer brought an inverse condemnation suit against the State, alleging that the Pinelands Management Plan resulting in the unlawful taking of private property. Notwithstanding the challenge, the New

2390 2391 2392

2393 2394 2395 2396

N.J.S.A. 13:18A-9(a). N.J.S.A. 13:18A-8. N.J.S.A. 13:I8A-12. See & Fine v. Gallowav Townshit, Committee, 190 N.J. Super. 432,463 A.2d 990 (Law Div. 1983) (nothing in act or management plan precludes a municipality fiom requiring compliance with its own local land use ordinances, in addition to compliance with minimum standards of the plan, provided the ordinance does not conflict with the plan or regulate a matter controlled by the plan). N.J.S.A. 13:18A-23. N.J.S.A. 13:18A-15. N.J.S.A. 13:18A-lO(c). See Marino v. New Jersey Pinelands Commission, 91 N.J.A.R. 2d (EPC) 12 (1991); Estate of DiGiacomo v Pinelands Commission, 91 N.J.A.R. 2d (EPC) 1 (1991).

Land Use Regulation 2397

Jersey Supreme Court held that the Pinelands Management Plan did not effect a taking. Moreover, the Pineland Management Plan's requirement for deed restrictions limiting land use to agricultural uses was held not to be an illegal exaction requiring private landowners to pay the 2398 cost of zoning benefits for the public at large. Operation of Power Vessels and Motor Vehicles No person may operate a water craft, temporarily or permanently propelled by motor 2399 power, in excess of 10 horsepower upon any of the waters within the Pinelands. In addition, no person may operate a motor vehicle upon any public land within the Pinelands other than upon designated roadways. Pinelands Preservation Area The Pinelands are divided into two areas, for purposes of planning - the preservation area and the protection area. The preservation area is "the most critical ecological region in the 2400 Pinelands . . . . [and] is especially vulnerable to environmental degradation." The preservation area is within Ocean, Burlington, and Atlantic counties comprising and surrounded by Wharton State Forest, Lebanon State Forest, Fort Dix Military Reserve, Colliers Mill Fish & Wildlife Management Area, Manchester Fish & Wildlife Management Area, Pasadena Fish & Wildlife Management Area, Greenwood Forest Fish & Wildlife Management Area, and Bass River State Forest. One of the fundamental goals in this area is the preservation of the area's 240 1 natural state. As a result, development not compatible with the area's preservation is 2402 prohibited. Due to the stringent government oversight of the preservation area, current landowners must notify the Commissioner of the NJDEP in writing of their intention to sell any land in excess of 10 acres situated within the area. Exempt from this condition is the sale of land between close relatives. Corporations changing ownership of more than 10 percent of its 2403

holdings must provide similar notice.

2397 2398 2399 2400 2401

Gardner v. New Jersev Pinelands Commission, 125 N.J. 193,593 A.2d 251 (1991). Id. N.J.S.A. 13:18A-24. N.J.A.C. 7:50-5.13(a). N.J.S.A. 13:18A-9(c).

2402 2403

N.J.S.A. 13:18A-22.

New Jersey Environmental Law Handbook

Pinelands Protection Area The protection area comprises the area within the Pinelands not designated as a 2404 preservation area. Development in this area may continue in an orderly and compatible 2405 fashion so long as its essential character and water quality are maintained. To aid in the planning of this area, the following management areas were established: forest areas, agricultural 2406 production areas, rural development areas, and Pinelands villages and towns. Different land use and development goals apply to the various areas within the protection area. Pinelands Commission The Pinelands Commission was established pursuant to the Pinelands Protection Act and 2407 allocated within the NJDEP. Notwithstanding this allocation, the Pinelands Commission is 2408 independent of the NJDEP's supervision and control. The Commission is entrusted to carry 2409 out the purposes of both the federal and State acts. The Commission constitutes a political subdivision of the State exercising essential government functions. Thus, the Commission may, among other things, enter into contracts, receive grants or loans, and acquire property through 2410 purchase, lease, or the powers of eminent domain. 3.1.3 Pinelands Municipal Council The Pinelands Municipal Council is an advisory council to the Pinelands Commission, established by the Pinelands Protection Act to represent municipal interests. Pursuant to the Act, the Commission must submit the Management Plan and all amendments for the Pinelands Municipal Councils review, prior to adoption. The Council, consisting of the mayor or the elected chief executive of each municipality with land within the Pinelands, may also make recommendations to the Commission on any matter whether or not the matter was submitted to 241 1 the Council by the Commission.

N.J.S.A. 13:18A-3(k). N.J.S.A. 13:18A-9(b). N.J.A.C. 750-5.12, -5.13. N.J.S.A. 13:18A-4.

Id.

Id. N.J.S.A. 13:lSA-6. N.J.S.A. 13:18A-7.

Land Use Regulation 3.1.4 Pinelands Development Credit Bank Act The concept of transferring development credits in the Pinelands was created by the 2412 Commission in the Management Plan. The purpose of the credit program is to provide a mechanism to facilitate growth within the Pinelands while preserving its natural resources. In effect, the program shifts development away fiom important environmental and agricultural resource areas to other areas within the Pinelands region which are more appropriate for development. The New Jersey Legislature created the Pinelands Development Credit Bank to assure the marketability of the development credits needed to realize the full benefits of the 2413 credit program. The Pinelands Development Credit Bank was established within the New Jersey Department of Banking. The Bank is governed by a board of directors empowered to purchase 2414 and sell Pinelands development credits and to guarantee loans secured by the credits. However, the Bank may delegate any or all of its power to a county bank created specifically to 2415 carry out the functions of the Bank. The Bank was set up to act as a last resort purchaser of Pinelands development credits. The Bank's authority to purchase credits ended on December 31, 2005.~~~~ 3.2 HIGHLANDS 3.2.1 Introduction The United States Forest Service has identified a national Highlands Region, comprising an area fiom northwestern Connecticut across the lower Hudson Valley through northern New Jersey and into east central Pennsylvania recognized as a landscape of special significance. For New Jersey, in addition to the natural beauty and outdoor recreational opportunities, this area has special significance as a source of potable water supply for much of the northern part of the state. In New Jersey, the Highlands Region is approximately 800,000 acres or 1,250 miles and spans seven counties.

A Pinelands "development credit" is a transferable development right created pursuant to the Management Plan. N.J.S.A. 13:18A-32h. The basic premise of a "TDR program is that development opportunities can be shifted or moved from properties which are protected, to other properties for which development is more appropriate. N.J.S.A. 13:18A-31. Matlack v. Burlington County Freeholder Board, 191 N.J. Super. 236, N.J.S.A. 13:18A-33, -34. See* 466 A.2d 83 (Law Div. 1982), affd, 194 N.J. Super. 359, 476 A.2d 1262 (App. Div.), certif. denied, 99 N.J. 191, 491 A.2d 692 (1984) (holding that the right of county board of freeholders to deal in property development credits was not preempted by Pinelands Protection Act). N.J.S.A. 13:18A-44. N.J.S.A. 13:18A-48C.

New Jersey Environmental Law Handbook In 2004, the legislature declared that the New Jersey Highlands is in an essential source of drinking water for one half of the state's population, that it contains other exceptional natural resources, that it is important to the economic viability of the communities within the Highlands, and that these characteristics make the New Jersey Highlands Region warrant special protection. 2417

The legislature, therefore, enacted the Highlands Water Protection and Planning Act. To oversee the protection and preservation of the Highlands area, the Act establishes a 2418 Highlands Water Protection and Planning Council. The Council is required to develop a Highlands regional master plan and oversee the adoption and implementation of the master plan 2419

by the municipalities included within the Highlands area. 3.2.2 The Boundaries of the Highlands Region The Highlands Region crosses from the northeast to the southwest portion of northern New Jersey and includes municipalities in Bergen, Passaic, Morris, Somerset, Hunterdon, 2420 Sussex, and Warren counties. The Highlands Region is divided into two separate areas. The most heavily regulated area for development because of its importance to public water supplies 242 1 and other values is called the Preservation Area. The remainder of the Highlands Region not 2422 within the Preservation Area is known as the Planning Area. 3.2.3 Highlands Region Regional Master Plan The Act requires that the council develop a regional master plan for the Highlands 2423 Region. The Act anticipated that the council would develop the plan within 18 months after its first meeting, but the council will not meet that deadline. The goals of the Regional Master Plan are to protect and enhance the significant values of the Region's resources. In the Preservation Area the goals include to protect, restore, and enhance the quality and quantity of surface and groundwater; preserve the unique and significant natural, scenic, and other resources in the region; preserve farmland and historic sites; preserve outdoor recreation activities; promote conservation of water resources; promote brownfield remediation and redevelopment; and prohibit or limit construction or development that is

2417 2418 2419 2420 242 1 2422 2423

N.J.S.A. 13:20-1 a m . N.J.S.A. 13:20-4. N.J.S.A. 13:20-6. N.J.S.A. 13:20-7. N.J.S.A. 13:20-7@). N.J.S.A. 13:20-9(c). N.J.S.A. 13:20-8.

Land Use Regulation 2424

incompatible with the preservation of this unique area. In the Planning Area, the goals are similar, but do not seek to prohibit or limit construction or development. The council is still developing the Highlands Regional Master Plan, in part because of the detailed analysis and assessment to be included in the plan as required by the Act. The Master Plan must include a resource assessment, a financial assessment, a local participation assessment, a coordination and consistency component between local federal and State programs and policies, a transportation 2425

component, and a smart growth component. The resource assessment examines what type of growth is sustainable. The council is required to evaluate the impact of growth on surface and groundwater quality and supply, contiguous forests and woodlands, endangered and threatened natural resources, ecological factors to protect and enhance agriculture, air quality, and other factors affecting ecological 2426 integrity. The smart growth component evaluates how growth can be accommodated without having an unacceptable adverse impact on the resources of the Highlands Region. In formulating the smart growth provisions of the plan, the council examines opportunities for appropriate development and growth and the development of a program for the transfer of development rights. In this regard the council is looking at utility capacity, growth area identification, build out analysis, brownfields development and redevelopment, smart design 2427 standards, and housing opportunities. The plan will include for the preservation area a land use capability map and a comprehensive statement of policies for planning and managing the development and use of land in the preservation area. The land use to be designated on the map and in the plan will include a preservation zone element within which development shall not occur to protect water resources and environmentally sensitive lands, and the council shall develop minimum standards for municipal and county master plans regarding the use of land in the preservation area and standard minimum lot sizes and stream set backs, steep slope 2428

provisions, density provisions, and other related issues. Because the Act provides for the preservation of ecologically, agriculturally, historically, or culturally important lands of the Region, it also provides for the transfer of development rights to preserve those areas and to

2424 2425 2426 2427 2428

N.J.S.A. 13:20-10(a)(b). N.J.S.A. 13:20-1l(a)(l)-(6). N.J.S.A. 13:20-1l(a)(l)(a). N.J.S.A. 13:20-11(a)(6). N.J.S.A. 13:20-12.

New Jersey Environmental Law Handbook

ensure landowner equity for those areas. With regard to transfer of development rights, the council will identify sending zones, where development is restricted or precluded, and voluntary receiving zones, where infrastructure or low environmental constraints and base zoning are 2429 appropriate for development or redevelopment. The Act establishes a goal of 4 percent of the 2430 land area in the Highlands Planning Area as voluntary receiving zones. For municipalities that choose to be come voluntary receiving zones, and accept transfer development rights, they 243 1 must establish a minimum residential density of five dwelling units per acre. And, municipalities that become voluntary transfer of development rights receiving zones receive economic incentives: a $15,000 per unit impact fee; a $250,000 enhanced planning grant; a grant to reimburse the reasonable cost of mending municipality development regulations; cost of legal representation; and other benefits. These voluntary transfer of development of rights receiving zones also receive accorded priority status for infrastructureprograms and the ability to 2432 control the design of the receiving area. For municipalities located wholly or partially within the preservation area, they must revise the municipal master plan and development regulations for that area to confirm with the goals, requirements, and provisions of the Regional Master 2433 2434 Plan. The provisions must be submitted to the council for approval. If the council rejects or conditionally approves the revisions to the plan or development regulations, the municipality has to make the revisions required by the council. If any municipality fails to adopt or enforce an approved revised master plan, development regulations, or other regulations required by the council, then the council, through rules and regulations, will obtain enforcement authority within 2435 that municipality. The Highlands Regional Master Plan establishes only minimum requirements to preserve and protect the Region's resources. Municipalities may adopt provisions that are more strict than the minimum necessary requirements and still obtain 2436 approval from the council for its plan and development regulations. Once the council approves any revisions to a municipal master plan or development regulations, they are entitled

N.J.S.A. 13:20-13. N.J.S.A. 13:20-13(c). N.J.S.A. 13:20-13(k). N.J.S.A. 13:20-13(m). N.J.S.A. 13:20-14(a). Id. N.J.S.A. 13:20-14(d). N.J.S.A. 13:20-14(e).

Land Use Regulation 2437

"a strong presumption of validity." The Act instructs any review in court to give "extraordinary deference to the local government unit" for regulatory provisions that the council 243 8 has approved. The plaintiff is required to prove by clear and convincing evidence that the local government decision was arbitrary, capricious, unreasonable, or a patent abuse of 2439

discretion. 3.2.4 Approval of Developments in the Highlands Region The Highlands Water Protection Planning Act required that the Department adopt regulations for the preservation area that provide the basis for which the Highlands permitting 2440

review program shall be implemented. The Department adopted interim regulations on May 244 1 9, 2005. The regulations apply to any major Highlands development proposed in the preservation area of the Highlands Region or to a request for a waiver from any requirement for a Highlands Preservation Area approval, and to any resource or applicability determination or 2442 exemption from the Act. No person shall undertake a major Highlands development without 2443 first obtaining approval from the Department in accordance with these regulations. These regulations incorporate provisions mandated by the Act, including a prohibition on major Highlands development within 300 feet of any Highlands open waters and the establishment of a 300-foot buffer adjacent to all Highlands open waters; preservation of water quality in all Highlands open waters; protection of fiesh water wetlands; the regulation of any diversion of more than 50,000 gallons per day of waters of the Highlands; a septic system density standard to prevent degradation of water quality; a zero net fill requirement for flood hazard areas; an anti-degradation provision of surface water quality standards and storm water regulations applicable to Highlands open waters; a prohibition on impervious surfaces of greater

N.J.S.A. 13:20-22. Id. Id. N.J.S.A. 13:20-31. A major Highlands development is defined as any non-residential development in the preservation area, any residential development in the preservation area that requires an environmental land use or water permit or results in the ultimate disturbance of 1 acre or more of land or a cumulative increase in impervious surfaces by !4 acre or more, any activity in the preservation area that disturbs !4 acre or more of forested area or that increases impervious surface by !4 acre or more on any lot, or any capital or other project of a State entity or local government unit in the preservation area that requires an environmental land use or water permit or that results in the ultimate disturbance of 1 acre or more of land or a cumulative increase in impervious surface by !4 acre or more. N.J.S.A. 13:20-3. N.J.A.C. 7:38-1.1. N.J.A.C. 7:38-l.l(f).

New Jersey Environmental Law Handbook than 3 percent of the land area; [a limitation or prohibition on the construction of new public water systems or the extension of existing public water systems to serve development in the preservation area]; a prohibition on development on steep slopes in the preservation area with a grade of 20 percent or greater and standards for development on slopes in the preservation area with grades of between 10 percent and 20 percent; and a prohibition on development that 2444 disturbs upland forested areas. The Department also established a Highlands permitting review program to coordinate the review of any major Highlands development in the preservation area. This program consolidates all aspects of other regulatory programs as interpreted and applied to major 2445 Highlands developments. Any person proposing a major Highlands development in the preservation area must apply for a Highlands permitting review. In that review, the Department may grant a waiver for any provision of the Highlands permitting process on a case-by-case basis if necessary to protect public health and safety or to avoid the taking of property without, just 2446 compensation. 3.2.5 Enforcement If any person undertakes a major Highlands development without obtaining approval from the Department, that person is subject to enforcement. The Department is authorized to issue an order requiring compliance or requiring the restoration of the area that is the site of the 2447 violation. The Department may also file a civil action seeking a temporary or permanent injunction; an assessment for the costs of any investigation, inspection, or monitoring survey and for the reasonable costs of preparing and bringing the legal action; an assessment of costs incurred by the state in correcting or terminating the violation; an assessment of compensatory damages for any loss or destruction of wildlife fish or aquatic life or other actual damages; 2448

andlor a requirement that the violator restore the site of the violation.

The Department may also assess a civil administrative penalty of up to $25,000 for each violation. For any civil administration penalty assessed, the alleged violator has a right to challenge the assessment at an 2449

administrative hearing.

2444 2445 2446 2447 2448 2449

The Department may also file a civil action seeking an award of a

N.J.S.A. 13:20-32. N.J.S.A. 13:20-33. N.J.S.A. 13:20-33(b). N.J.S.A. 13:20-35(a)(l)&(b). N.J.S.A. 13:20-35(2)&(c). N.J.S.A. 13:20-35(a)(3)&(d).

Land Use Regulation civil penalty against any person who fails to get Highlands permitting approval, violates any rule 2450 or regulation regarding the Highlands Region, or any administrative order or court order. Finally, the Department may request that the Attorney General bring a criminal action against those who purposely or negligently violate provisions of the Act or its implementing 245 1 regulations. The Act contains some unique enforcement provisions. If the Department determines that land has been improperly improved or disturbed without the appropriate Highlands approval, the Department may record on the deed of the property a notice of violation of the Highlands 2452 permitting review approval issues or rules and regulations. In addition the Act gives the Department the authority to request information concerning compliance and provides that knowingly, recklessly or negligently providing false information, representations or certifications 2453 is a violation. Finally, the Act gives the Department authority to enter property to inspect or sample in connection with any Highlands approval or compliance with any Highlands rule or 2454 regulation.

3.3 HACKENSACK MEADOWLANDS 3.3.1 Introduction The Hackensack Meadowlands encompass 21,000 acres of freshwater swamps, meadows, and marshes in the lower Hackensack River basin within sight of the Manhattan skyline. This area includes portions of Ridgefield, North Bergen, Secaucus, Jersey City, Kearny, North Arlington, Lyndhurst, Rutherford, East Rutherford, Carlstadt, Moonachie, Teterboro, Little Ferry, and South Hackensack. Until 1968, this area was comprised largely of undeveloped, foulsmelling swamps desecrated by decades of indiscriminate dumping and fill activities. In that year, the New Jersey Legislature passed the Hackensack Meadowlands Reclamation and Development Act ("Development Act") in order to develop the Meadowlands in an orderly and 2455 comprehensive manner while preserving its delicate ecological balance.

2450 2451 2452 2453 2454 2455

N.J.S.A. 13:20-35(a)(4)&(e). N.J.S.A. 13:20-35(a)(5)&(f). N.J.S.A. 13:20-35(g). N.J.S.A. 13:20-35(h)&(i). N.J.S.A. 13:20-35(k). N.J.S.A. 13:17-1.

New Jersey Environmental Law Handbook 3.3.2 Hackensack Meadowlands Master Plan The Hackensack Meadowlands master plan ("Master Plan7') is a regional land use plan 2456 which controls the physical development of all lands situated within the Meadowlands. The Master Plan regulates all forms of land use related to the area's growth and development, 2457 including, among other things, building and housing standards and community appearance. Pursuant to the Act, the New Jersey Meadowlands Commission ("Commission") is empowered 2458 to adopt and implement the Master Plan and its regulations. 3.3.3 Solid Waste Disposal Facilities In recognition of the unique problems associated with solid waste disposal in the Meadowlands, the New Jersey Legislature directed that the Commission, when creating the Master Plan, give due consideration to the development of sanitary landfills and other solid 2459 waste disposal facilities both within the Meadowlands and throughout the State. To this end, 2460 the Master Plan regulates the location and use of buildings and land for solid waste disposal. 3.3.4 Relationship to Local Land Use Plans The Master Plan and the development regulations are intended to transcend municipal boundaries. Therefore, no municipality may enact or enforce any code or standard within the 246 1 Meadowlands inconsistent with those set forth in the Master Plan. To effectuate Commission oversight, a municipality must give notice to the Commission prior to a public hearing on any adoption or amendment of a local master plan, official map, zoning regulation, or variance 2462 approval affecting lands within the Meadowlands or within 200 feet of its boundaries. 3.3.5 Subdivision and Land Development Any development within the Meadowlands must be in accordance with the Master Plan. For purposes of compliance with the Master Plan, a developer must apply to the Commission for subdivision and site plan approval, and for the necessary building permits, prior to the development of any land or the construction or alteration of any building or other structure

2456 2457 2458

2459 2460 2461 2462

N.J.S.A. 13:17-9(a). N.J.S.A. 13:17-11. N.J.S.A. 13:17-9, -3.1 (references to the "Hackensack Meadowlands Development Commission" now refer to the 'Wew Jersey Meadowlands Commission"). N.J.S.A. 13:17-9(b). N.J.S.A. 13:17-1 l(a). N.J.S.A. l3:17-ll. N.J.S.A. 13:17-16.

Land Use Regulation 2463

within the Meadowlands. The Commission's approval is a prerequisite to obtaining the local 2464 municipality's approval. All approvals are based on the development's strict compliance 2465 with the Master Plan. However, in certain circumstances, the Commission may waive strict 2466 compliance with the Master Plan's standards where enforcement would result in hardship. 3.3.6 Renewal Areas The Commission may designate any portion of the district as a renewal area upon a determination that the area is blighted and constitutes a social or economic liability to the 2467 Meadowlands such that the public health, safety, and general welfare are affected. Factors the Commission may consider in reaching the determination include those conditions listed in the Local Redevelopment and Housing Law, including but not limited to, the presence of substandard buildings, the presence of abandoned buildings, or the lack of proper land 2468 utilization. A determination that an area is a renewal area can only be made after an investigation and 2469 public hearing and must be supported by substantial evidence. The Commission's 2470 determination may be challenged in the Superior Court of New Jersey. After an area is designated a renewal area, the Commission may either proceed with the 247 1 area's redevelopment on its own, or by contracting with a redeveloper. The redevelopment may include, among other things, the acquisition of real property by purchase or condemnation, 2472 as well as the relocation of residents and businesses. 3.3.7 Improvement Districts Within the Meadowlands district, the Commission can form an "improvement district" in 2473 order to levy a special assessment on the area benefited by the improvement. The special

N.J.A.C. 13117-12, -13. N.J.A.C. 13:17-14. N.J.S.A. 13:17-12 to 14. N.J.S.A. 13:17-18. N.J.S.A. 13:17-20(a). N.J.S.A. 40A:12A-5. N.J.S.A. 13:17-20(b) to (e). N.J.S.A. 13:17-20(f). N.J.S.A. 13:17-20(g). N.J.S.A. 13:17-21. N.J.S.A. 13:17-39.

New Jersey Environmental Law Handbook 2474

assessment, however, may not exceed the cost of the improvement, and in any event must be 2475 proportionate to the value of the benefit received by the district fiom the improvement. All land within the Meadowlands district is classified and divided by the Commission into three 2476 classes. . The classifications are determined by the present ownership, State or otherwise, and 2477 the land's ultimate use, public or private. The classification type is used to determine, among 2478

other things, the source of funds for the assessment. The New Jersey Legislature created a Hackensack Meadowlands Revolving Fund to pay for special assessments on class-two property, 2479 which is State-owned property ultimately intended for private use. A public hearing is 2480 required prior to initiating any improvement or levying any assessment. 3.3.8 New Jersey Meadowlands Commission As previously indicated, the Act created the New Jersey Meadowlands Commission, 248 1 which is within the New Jersey Department of Community Affairs. The Commission is empowered to prepare, adopt, and implement a master plan for the physical development of 2482 lands within the Hackensack Meadowlands. In addition, the Commission may adopt and 2483 enforce codes and standards for this development consistent with the intent of the Act. The Commission also may reclaim, develop, redevelop, or improve any land within the 2484 Meadowlands. However, the Commission must provide notice to and consult with the 2485 municipalities within and adjacent to any proposed development.

N.J.S.A. 13:17-44. N.J.S.A. 13:17-46. N.J.S.A. 13:17-40. Id. N.J.S.A. 13:17-52. N.J.S.A. 13:17-52(c). N.J.S.A. 13:17-43; N.J.S.A. 13:17-45. N.J.S.A. 13:17-5(a) (although within the Department of Community Affairs, the Commission is independent of the Department). N.J.S.A. 13:17-6(i). N.J.S.A. 13:17-6(i). N.J.S.A. 13:17-60). N.J.S.A. 13:17-14.1.

Land Use Regulation General Powers of the New Jersey Meadowlands Commission The Commission constitutes a political subdivision of the State exercising essential government functions. In addition to those powers previously discussed, the Commission may issue bonds, enter into contracts, receive grants or loans, and acquire property through purchase, lease, or the exercise of eminent domain. While conducting investigations, examinations, or surveys, the Commission may enter upon any building or property in accordance with due process of law. Most importantly, the Commission may impose special assessments on 2486 properties situated within the Meadowlands. Tax Exemption The New Jersey Legislature granted the Commission the power to own property. The justification for this, as for all of the Commission's powers, is that the people of the State derive the benefits gained through the exercise of the Commission's powers. Consequently, all projects, lands, and other property of the Commission have been deemed public property exempt 2487 from all taxes and special assessments of the State and any subdivision thereof. Solid Waste Disposal Survey The Commission was directed to undertake a survey of the Meadowlands to determine the total amount of solid waste treated and disposed of on a daily basis within the Meadowlands. With this survey complete, the Commission is empowered to guarantee sufficient solid waste disposal facilities to treat and dispose of the total amount of waste calculated by the survey, through the construction of new facilities or the acquisition, operation, and maintenance of existing facilities either by the Commission itself or in concert with the State or any political subdivision thereof. The solid waste disposal facilities are considered "improvements" and are 2488 paid for accordingly. 3.3.9 Hackensack Meadowlands Municipal Committee & Intermunicipal Tax-Sharing The Hackensack Meadowlands Municipal Committee ("Committee") serves as an 2489 advisory committee to the Commission. The Committee represents municipal interests and consists of the mayor or elected chief executive of each municipality with land within the 2490 Meadowlands. Prior to taking final action, the Commission must submit to the Committee

2486 2487 2488 2489 2490

N.J.S.A. 13:17-6. N.J.S.A. 13:17-36. N.J.S.A. 13:17-10. N.J.S.A. 13:17-8. N.J.S.A. 13:17-7.

New Jersey Environmental Law Handbook the Master Plan, any amendments thereto, and any development plan, code, or standard for the Cormgittee's review. If the Committee does not return its comments in writing within 45 days of receiving any of the aforementioned matters (except the Master Plan), the Committee's full 2491 approval is assumed. The purpose of the intermunicipal tax-sharing program is to clearly establish and equitably distribute the financial liabilities and benefits among the constituent municipalities. The intermunicipal account, created for this purpose, is organized and maintained by the 2492 Commission, but the Commission may not receive any funds from the account. The program guarantees each municipality in perpetuity against the loss of existing tax bases caused by the acquisition of privately owned land by the Commission and provides that all benefits gained from the improvement of lands within the Meadowlands will be equally distributed amongst the 2493 municipalities. 3.3.10 Meadowlands Ownership Pursuant to statute, the Research Development Council is instructed to conduct title studies and surveys of meadowlands throughout New Jersey in order to determine which lands 2494 are State owned. Meadowlands include lands, now or formerly consisting chiefly of saltwater 2495

swamps, meadows, or marshes. As part of the survey, the Research Development Council is 2496 required to study the Hackensack Meadowlands. In addition, the Council is required to publish a map portraying the results of its entire State-wide study, indicating those lands 2497 designated by the Research Development Council as State owned. The statute also establishes procedures for the lease or conveyance of the State's interest in meadowlands 2498 property.

N.J.S.A. 13:17-8(b). N.J.S.A. 13:17-60. Id. N.J.S.A. 13:lB-13.2. N.J.S.A. 13:lB-13.l(a). N.J.S.A. 13:lB-13.2. N.J.S.A. 13:lB-13.4. N.J.S.A. 13:lB-13.7; New Jersev Turnpike Authoritv v. Desiderio, 193 N.J. Super. 728, 475 A.2d 693 (Law Div. 1983) (holding that action by NJ Turnpike Authority to condemn land owned by the Research Development Council required an application pursuant to N.J.S.A. 13:lB-13.7).

Land Use Regulation 3.4

DELAWARE AND RARITAN CANAL COMMISSION The Delaware and Raritan Canal stretches from New Brunswick southwest to Trenton and north from Trenton to Stockton, New Jersey. Once owned by the New Jersey Railroad and 2499 Canal Company, the canal and abutting properties have been in State ownership since 1934, 2500 and are now a State park. The Delaware and Raritan Canal State Park Law established the park and created the Delaware and Raritan Canal Commission ("DRC Commission"), whose function was to develop a master plan for the park and to establish a review zone in which both State and private activities in or near the canal that may adversely affect the integrity of the canal 2501 would be reviewed by the DRC Commission. In 1989, the DRC Commission promulgated regulations delineating the review zone and establishing standards governing the review of State 2502 and private projects to be undertaken within the review zone. The DRC Commission established two subzones within the review zone. Zone A is the 2503 area within 1,000 feet on either side of the center line of the canal. Zone B is the remaining area within the review zone not part of Zone A, and is approximately a 400-square mile area 2504 encompassing the watershed areas that drain to the canal area. Projects to be undertaken within Zone A are subject to different levels of review by the DRC Commission, depending on whether the project is considered "Major" or "Minor." If any part of a project site exists within Zone A, the entire project is "major" if it: involves the construction, development, or redevelopment (i) of four or more dwelling units; or involves no dwelling units, but will cover land which is (ii) uncovered at the time of submission of the application with one-fourth 2505 acre or more of impervious surfaces. In the event that no part of the project site exists within Zone A, but a portion of it falls within Zone B, the entire project is "major" if it will, since January 11, 1980, cumulatively cover 1 acre 2506 of land with impervious surfaces.

L.1934, c.139, N.J.S.A. 13:13-1, et sea. L.1974. c.118,N.J.S.A. 13:13A-1, et sea. N.J.S.A. 13:13A-2, -11, -12. See N.J.A.C. 7:45-1.1, et sea.

N.J.A.C. 7:45-1.2. Id. Id. Id. -

New Jersey Environmental Law Handbook Major projects located in Zone A are reviewed for their potential impact upon (1) storm drainage and water quality; (2) historic, visual, and natural quality; (3) the stream corridor; and (4) traffic. Minor projects in Zone A are reviewed for storm drainage, water quality, and visual and natural quality impact. In Zone B, major projects are reviewed for their potential impact upon storm drainage and water quality. If Zone B major projects are within 1 mile of the park and have direct access to a road in Zone A, they also are reviewed for traffic impact. Furthermore, in the event that any portion of a major project within Zone B is located in one of the stream corridors designated in N.J.A.C. 7:45-6.1 (a), it is reviewed for stream corridor impact 2507 as well. Applications for review may be submitted to the DRC Commission by the applicant or by 2508 Within 30 days of the appropriate municipal agency upon the grant of an approval. submission, the DRC Commission notifies the applicant as to whether the application has been 2509 deemed complete. If notice is not provided within 30 days of submission, the application is 2510 deemed complete. Within 45 days from the date when the application is declared complete, 251 1 the DRC Commission either: approves the application and notifies the appropriate municipal approving (1) agency that the project can proceed as proposed; rejects the application and so advises the appropriate municipal approving (2) agency and the municipal governing body; or approves the application subject to conditions and returns the application (3) to the appropriate municipal approving agency which is responsible for assuring that the conditions are satisfied before issuing a permit. If no action is taken by the Commission within 45 days from the date the application is 2512

deemed complete, the application is deemed to be approved by the Commission.

2507 2508 2509 2510 2511 2512

N.J.A.C. 7:45-1.3. N.J.A.C. 7:45-2.2. N.J.A.C. 7:45-2.6. Id. Id. N.J.A.C. 7:45-2.6. In the event that no action is taken by the Commission within the 45-day period, the Commission shall issue a Certificate of Approval, but may require any detention basin maintenance easements and/or stream corridor easements as required in N.J.A.C. 7:45-5.4(i) and N.J.A.C. 7:45-6.6. See N.J.A.C. 7:45-2.6(f).

CHAPTER IX INDOOR POLLUTANTS 1.0 1.1

RADON OVERVIEW Radon gas is produced by the decay of naturally occurring uranium found in almost all soil and rock. Radon is a gas that is odorless, tasteless, and invisible. Since it is radioactive, it 2513 forms decay products and releases radiation as it decays. The decay products which are formed can cling to dust and other particulate matter. If inhaled, the dust can become trapped in 2514 the lung. As the decay products break down further, radiation is released which can damage 2515 lung tissue and increase the risk of developing lung cancer. Within New Jersey, there is no regulatory program mandating that naturally occurring radon be remediated to specific levels. However, in 1986, the New Jersey Legislature acted to 2516 require certifications of persons employed in testing for and mitigation of radon. The legislation, known as the Radon Act, also required that in the case of a prospective sale of a building which has been tested for radon, the seller must provide the buyer, at the time the contract of sale is entered into, with a copy of the results and evidence of any subsequent 2517 mitigation or treatment. The Radon Act also provides for the confidentiality of radon testing 2518 information with only limited exceptions, including the required disclosure to the NJDEP. 2519 Violation of these provisions constitute a crime of the third degree. 1.2 RESIDENTIAL STRUCTURE GUIDANCE Specific construction requirements exist for residential and educational buildings - in areas 2520 identified by the NJDEP as being "Tier 1." In these areas the Radon Hazard Subcode of New

NJDEP, Radon Testing and Mitigation: The Basics, http://wmv.nj.gov/dep/rpp/radon/radontes.htm (last visited Feb. 24,2006). NJDEP, Information You Should Know About Radon, http://www.nj.gov/dep/rpp/radon/radoninfo.htm (last visited Feb. 24,2006). NJDEP, Information You Should Know About Radon. N.J.S.A. 26:2D-70,

m.

N.J.S.A. 26:2D-73. N.J.S.A. 26:2D-73 and 74. N.J.S.A. 26:2D-77. N.J.A.C. 5:23-10. The list of municipalities defined as Tier 1 is provided in Appendix A. N.J.A.C. 5:2310, App. A. Though "Tier 1" is not specifically defined, an elevated concentration of radon is defined as an

New Jersey Environmental Law Handbook Jersey's Uniform Construction Code specifies radon resistant and mitigation construction 2521 techniques. While there is no federal statutory requirement that radon be remediated to specific levels, the USEPA has provided guidance in the form of a phased strategy for assessing radon levels in homes. The first step is to perform an initial short-term screening test in order to 2522

Test quickly and inexpensively determine a home's potential for elevated radon levels. results are usually reported in terms of picocuries per liter (pCi/l) or working levels (WL), 2523 depending on the type of testing device used. A picocurie per liter is a unit of measure of the concentration of radon gas in air. A working level is a unit of measure of radon decay product 2524 (progeny) concentration in air. If the outcome of the initial short-term test is above 4 pCi/l (0.02 WL), additional followup measurements should be performed in order to better estimate the health risk involved and determine the timing for remedial action. Long-term follow-up testing provides a better understanding of the average radon level while immediate short-term follow-up testing is recommended where the initial short-term test identifies levels greater than 8 pCi/l. If the outcome of the initial short-term test is below 4 pCi/l follow-up measurements are most likely 2525 not necessary. Repairs are recommended where the long-term follow-up test results are 4 pCi/l or greater. Where a short-term follow-up test is utilized, repairs are recommended where the 2526 average of the two tests is 4 pCiA or greater. 1.3 CERTIFICATION OF RADON TESTERS AND MITIGATORS Pursuant to the legislative mandate in the Radon Act, the NJDEP has established 2527 requirements for the certification of radon measurement businesses, testers, and mitigators.

average annual exposure at or above 4 picocuries per liter or 0.02 working levels. N.J.A.C. 5:2310.l(c)(2). The USEPA defines as "Zone 1" counties that have a predicted average screening level greater than 4 picocuries per liter. USEPA, EPA's Map of Radon Zones: National Summary (Sept. 1993). 2521 2522

2523 2524 2525 2526 2527

N.J.A.C. 5:23-10. USEPA, A Citizen's Guide to Radon 5-7 (Sept. 2005), available at http://www. epa.gov/radon/images/citizensguide.pdJ NJDEP, Radon Testing and Mitigation: The Basics. N.J.A.C. 5:23-10.2. USEPA, A Citizen's Guide to Radon at 6. Id. at 6-7. N.J.A.C. 7:28-27.5-27.20.

Indoor Pollutants Under the regulations, no person may sell devices, test for, mitigate, or safeguard against the 2528 presence of radon unless such person is either certified or qualifies for an exemption. The NJDEP regulates entities conducting radon measurements and those conducting 2529 radon mitigation activities by mandating annual certifications of such businesses; mandating that certain certified personnel be employed; providing a program for certifying specialists and 2530

technicians; and establishing quality control standards. The regulations also contain recordkeeping and reporting requirements, including a duty to report on the first of the month to the NJDEP all radon testing results and mitigation activities undertaken during the second 253 1

previous month. 1.4 CERTIFICATION OF RADON LABORATORIES In most instances radon testing is conducted by exposing the testing device to ambient indoor air for a specified time period. The device is then sent to a laboratory for analysis of the radon levels recorded by the device. The NJDEP has long had a program for certifying laboratories and establishing laboratory standards pursuant to the Safe Drinking Water Act and 2532

the Water Pollution Control Act. Pursuant to its duty under the Radon Act to establish a 2533 certification program for radon testers, the NJDEP amended its existing laboratory certification regulations to provide for the certification of, and to establish standards for, 2534 laboratories which conduct analysis of radon. Certified radon testing businesses are required 2535 to use a certified laboratory. The laboratory certification regulations include requirements for participation in proficiency testing programs, mandate personnel requirements, provide for bi-annual inspections by the NJDEP, establish quality control standards, and mandate recordkeeping and reporting 2536

requirements.

N.J.A.C.7:28-27.3(a). Exemptions are provided at N.J.A.C.7:28-27.31. N.J.A.C.7:28-27.22. N.J.A.C.7:28-27.5. N.J.A.C.7:28-27.28. N.J.A.C.7:18-1, g t sea. N.J.S.A.26:2D-70. N.J.A.C.7:18-1, et sea N.J.A.C.7:28-27.5(e). N.J.A.C.7:18-1, et sea.

New Jersey Environmental Law Handbook ASBESTOS OVERVIEW The term "asbestos" refers to a group of mineral silicates, including chrysolite, 2537 which have common fibrous crocidolite, amosite, anthophyllite, tremolite, and antinolite, - 2538 Inhalation of fibers may result in the structures, chemical-resistancy, and incombustibility. 2539 deposition of asbestos fibers in the lung and produce some degree of change in lung tissue. Worldwide use of asbestos increased dramatically throughout most of the 2 0 century ~ before beginning to decline in the late 1970s when health hazards associated with asbestos exposure 2540 became a concern. The USEPA regulates asbestos under several federal environmental statutes. The Clean Air Act's National Emissions Standards for Hazardous Air Pollutants (NESHAPS) specifically address asbestos emissions fiom manufacturing operations, building demolition and renovation, 2541 Under the Clean Water Act, the USEPA has set specific point and waste disposal activities. source effluent limits for discharges of asbestos fibers fiom asbestos product manufacturing into 2542 Under the Safe Drinking Water Act, the USEPA has set a maximum navigable waters. 2543 contaminant level for asbestos in drinking water. Under the Resource Conservation and Recovery Act, the USEPA has established standards applicable to the labeling, generation, and 2544 It has also promulgated regulations under the Toxic transporting of hazardous waste. Substances Control Act prohibiting the manufacture, import, processing, or distribution of certain asbestos-containing products, and established the procedure for obtaining exemptions 2545 The Asbestos Hazard Emergency Response Act of 1986 (AHERA) from these prohibitions. requires school systems to identify asbestos-containing material (ACM) and implement

2.0 2.1

N.J.A.C. 8:60-2.1. United States Geological Survey, World Trade Center Asbestos Primer, http://pubs.usgs.gov/of2001/ofr01-0429/asbestos.htmI(last modified Aug. 18,2005).

See Agency for Toxic Substances and Disease Registry, Toxicological Profile for Asbestos $2 (Sept. 2001), available at http://www.atsdr.cdc.gov/toxpro$les/tp6I.pd~ Id. at $5. 40 C.F.R. $61, Subpart M. 40 C.F.R. $427. 40 C.F.R. $141.62. 40 C.F.R. $5260-264. 40 C.F.R. $763, Subpart I.

Indoor Pollutants 2546

appropriate response actions in school buildings. AHERA did not create any requirements or obligations for other public or commercial buildings. The Asbestos School Hazard Abatement Reauthorization Act (ASHARA) was enacted in 1990, and extended the AHERA training 2547 requirements to persons conducting inspections in public buildings. 2548 In 1985, the New Jersey Asbestos Control and Licensing Act and its implementing 2549 regulations became effective. Under the New Jersey regulations, adopted jointly by the Departments of Labor and Health & Senior Services in consultation with the NJDEP, an employer must demonstrate its competence to perform the application, enclosure, encapsulation, repair, or removal of ACMs in any structure or to enter into a contract to perform such work or services prior to obtaining a license for such services. In addition, each employee must possess a 2550 performance permit prior to performing any of the above activities. These regulations are not applicable for the stripping, limited repair or removal of 3 linear feet or less of asbestoscontaining piping or 3 square feet or less of ACMs, the sale or storage of asbestos, or the application, enclosure, encapsulation, repair, or removal of roofing and exterior siding except in 2551 demoIition projects. It is important to note that private employers subject to OSHA using their own employees to apply or abate ACM in their own facility are exempt fiom these 2552 regulations. 2.2 ASBESTOS LICENSES AND PERMITS 2.2.1

General Provisions

Regulations providing standards for asbestos removal, for licensing of employers, 2553 permitting of employees, and certifying training courses were promulgated on May 3, 1985.

Pub. L. NO. 99-519 (1986). Asbestos School Hazard Abatement Reauthorization Act of 1990, S. 1893, 101st Cong. (1990). N.J.S.A. 34:5A-32, a m . N.J.A.C. 8:60 et sea. andN.J.A.C. 12:120 et seq. N.J.A.C. 8:60-3.2 andN.J.A.C. 12:120-3.2. N.J.A.C. 8:60-1.4(b)(l)-(5) and N.J.A.C. 12:120-1.4(b)(l)-(5).

.

N.J.A.C. 8:60-1.4(b)(6)-(7) and N.J.A.C. 12:120-1.4(b)(6)-(7). This exemption arose fiom federal litigation, see New Jersey State Chamber of Commerce v. State, 653 F. Supp. 1453 (D.N.J. 1987). (New Jersey regulatory scheme preempted by OSHA regulations insofar as it pertains to health and safety in the workplace). The limited application of this preemption holding is explained at 22 N.J.R. 1773-74 ( ~ u n e4, 1990). The same regulations are contained in N.J.A.C. 12:120-1 et seq. Throughout this N.J.A.C. 8:60-1, @ s. Chapter, only one reference, either to N.J.A.C. 8:60 (Department of Health & Senior Services) or N.J.A.C. 12:120 (Department of Labor) will be given, though the cited section may be found within either Department's regulations.

New Jersey Environmental Law Handbook The regulations, however, do not apply to the limited repair of ACM on any pipe, duct, boiler, tank, structural member or similar equipment by the application of duct tape, rewettable cloth, or other sealable material; the stripping, limited repair, or removal of 3 feet or less of ACM from piping; the stripping, limited repair, or removal of 3 square feet or less of ACM; the sale or storage of asbestos; or the application, enclosure, encapsulation, repair, or removal of asbestos2554 containing roofing and exterior siding materials in all but demolition projects. Any person violating a provision of these regulations is guilty of a crime of the third 2555

degree and liable for a fine of up to $25,000. Administrative penalties for employer, 2556 employee, training agency, or instructor violations range up to $25,000 for each violation. In addition to these penalties, the Departments of Labor and Health & Senior Services have the authority to require immediate correction of any violation and the removal of an employer or employee from the job site or the removal of the instructor from the training course.2557 2.2.2 Licensing of Employers 2558 To be eligible for a license as an employer, the applicant must: Provide evidence of successful completion of the training course and (1) written examination for asbestos abatement supervisors devised and administered under the approval of the Department of Health & Senior Services; Have at the firm a supervisor who holds a valid New Jersey asbestos (2) supervisor permit; and, Disclose and attach all information in the application forms supplied by (3) the Department of Labor. New Jersey issues two classes of licenses - an "A" license permits the employer to perform any type of asbestos work, whereas a "B" license permits the employer to remove ACM from mechanical systems, such as pipes, boilers, ducts, flues, or breeching. Each license is valid 2559 for 1 year from the date of issuance. A license may be suspended or revoked for incompetence, negligence, failure to comply with contract specifications, or violation of the Asbestos Control and Licensing Act. If an

2554 2555 2556 2557 2558 2559

N.J.A.C.8:60-1.4(b). N.J.A.C.8:60-3.4(a). N.J.A.C.8:60-3.5(d). N.J.A.C.8:60-3.5. N.J.A.C.8:60-4.4(a). N.J.A.C.8:60-4.5.

Indoor Pollutants 2560

employer is found unfit to hold the license, his license will be suspended or revoked. In the interest of public health, a license may be suspended prior to a hearing. When a license has been 2561 suspended, the employer has the right to a hearing within 10 days of the suspension. Where the Commissioners of Labor or Health & Senior Services proposes to revoke or suspend a license, refuses to renew a license, or denies an application for a license, the employer has the 2562 right to an informal or formal hearing, or both.

2.2.3 Asbestos Worker or Supervisor Permits To receive a permit, each applicant must be at least 18 years of age, successfully complete either the asbestos abatement worker or supervisor training course approved by the Department of Health & Senior Services, and pass a written examination administered under the 2563 approval of the Department of Health & Senior Services. Each permit issued is valid for a 12564 year period. A permit may be suspended or revoked if the worker or supervisor is incompetent to perform asbestos work; negligent in performing asbestos work; or loans, abandons, or allows the permit to pass from his possession. A permit may be immediately suspended or revoked if there is imminent danger to the health and safety of the public or the employees. Except for this type of situation, the worker or supervisor is provided with written notice of violation prior to suspending or revoking a permit. The worker or supervisor has an opportunity to respond to the 2565 charges. A worker or supervisor subject to an immediate suspension or revocation of a permit has a right to a hearing within 10 calendar days of the notice of suspension. Where presented with a notice of violation, the worker or supervisor may request an informal administrative review. A written request for a review must be made within 10 days from receipt of notice of the proposed agency action. The review must be conducted within 30 days from the date the Department of Labor's Division of Workplace Standards received the request for an informal review. The decision of the administrative review must be rendered within 45 days of the conference. Any aggrieved individual who disagrees with the Department of Labor's review A

2560

2561 2562 2563 2564 2565

N.J.A.C. 8:60-4.8 (the regulation provides a list of actions for which a license will be suspended or revoked). N.J.A.C. 8:60-8.2(b). N.J.A.C. 8:60-4.8(h); N.J.A.C. 8:60-4.9(k); N.J.A.C. 8:60-8.2. N.J.A.C. 8:60-5.3. N.J.A.C. 8:60-5.6.

N.J.A.C. 8:60-5.9.

New Jersey Environmental Law Handbook

decision may submit to the Division of Workplace Standards a written request for a formal 2566 hearing within 10 days from receipt of the written decision. 2.2.4 Asbestos Work Notification Requirements Every licensee planning to perform asbestos work in New Jersey must submit written notification to the Departments of Labor and Health & Senior Services at least 10 calendar days 2567 prior to beginning work. The submission date is the United States Postal Service postmark date or pick-up date of an overnight delivery service. For illegible postmarks or metered mail, the submission date is the date received by the Departments of Labor and Health & Senior Services. Faxes are only allowed where emergency circumstances are warranted. The written 2568 notification must include the following information: name, address, and telephone number of licensee; (1) license number and type of license held; (2) name and address of owner of facility; (3) location and description of facility; (4) description of work to be performed; (5) scheduled starting and completion dates; (6) name and address of the waste disposal site to be used; and (7) name, address, and New Jersey waste hauler identification number of the (8) registered waste hauler. 2.2.5 Certification of Training Courses and Instructors All applicants for both worker and supervisor permits must attend a certified training 2569 course which covers basic curriculum. The asbestos abatement worker training course must be presented over 4 days and must include a minimum of 28 hours of training. The asbestos abatement supervisor training course must be presented over 5 days and must include a minimum of 35 hours of training. Both courses must contain at least 14 hours to hands-on training. An annual refresher course of at least 7 hours must be attended by asbestos workers. Annual 2570 refresher training for asbestos supervisors must consist of at least 8 hours of training.

2566 2567

2568 2569 2570

N.J.A.C. 8:60-8.2. Notification must also be provided to the USEPA at least 10 working days prior to the start of work. 40 C.F.R. 561.145 - .155. N.J.A.C. 8:60-7.2. N.J.A.C. 8:60-5.3(a)(2). N.J.A.C. 8:60-6.2.

Indoor Pollutants In order for a training course to be certified, three or more course instructors must be 2571 employed. At least one instructor must have experience in both design, field performance and evaluation of air monitoring programs, and the design and implementation of respiratory programs. A qualified health professional must be employed to teach the sections of the course concerning the health effects of asbestos. An instructor with at least 1 year of experience.as a New Jersey asbestos abatement contractor or supervisor of asbestos abatement workers must be employed to teach the "hands on" practice sessions. At least one instructor must have experience in designing, implementing, and evaluating employee education programs. The instructor who teaches the smoking cessation topics is required to have completed an approved smoking 2572

cessation course. Any certified training agency or instructor may have its certification suspended or revoked for incompetence, failure to adequately present topics, failure to comply with the 2573 regulations, and any other good cause within the meaning of the law or regulations. When the Commissioner of Health & Senior Services proposes to revoke or suspend a certification or denies an application for certification, the applicant has a right to an informal or formal 2574 hearing. 2.3 EXPOSURE TO ASBESTOS BY PUBLIC EMPLOYEES The Occupational Safety and Health Administration of the US. Department of Labor 2575 (OSHA) protects private employees from excessive exposure to asbestos in the workplace. To supplement OSHA, the New Jersey Public Employees' Occupational Safety and Health 2577 A C (PEOSHA) ~ ~ and ~ implementing ~ regulations were enacted to ensure that all public employees are provided with a safe and healthful workplace free from recognized hazards, 2578

including These regulations were rescinded in 1996, and the federal OSHA - asbestos. 2579 asbestos standards adopted by reference.

N.J.A.C. 8:60-6.3(a)(7). N.J.A.C. 8:60-6.5. N.J.A.C. 8:60-6.11. N.J.A.C. 8:60-6.1 l(c). The rights and timeframes are discussed

92.2.3.

General industry standards are presented at 29 C.F.R. 9 1910.1001. Construction industry standards are presented at 29 C.F.R. 91926.1 101. N.J.S.A. 34:6A-25, a sea. N.J.A.C. 12:lOO-12, et sea. (1986). See 18 N.J.R. 811(b) (Apr. 21, 1986).

28 N.J.R. 3801 (Aug. 5, 1996). See N.J.A.C. 12:lOO-4.2; N.J.A.C. 12:lOO-5.2.

New Jersey Environmental Law Handbook ASBESTOS HAZARD ABATEMENT SUBCODE Since the work of asbestos removal or containment necessarily involves alteration or repair of buildings, it must be done in accordance with the New Jersey State Uniform 2580 The Asbestos Hazard Abatement Subcode applies to educational Construction Code. facilities; public buildings; any private building which houses a day care center, nursery, or educational facility; all common areas in a public entity-leased building; exterior portions of buildings; and projects involving the removal of non-friable, miscellaneous ACM from interior spaces when the method chosen to remove the non-friable material will cause the building 2581 environment to become contaminated with airborne fibers. This Subcode is advisory for all 2582 other buildings and structures in the State. Where this Subcode is applicable, a notification of asbestos work must be provided to the Department of Community Affairs within 3 business days 2583 of the issuance of the construction permit for the project. 2.4.1 Pre-Project Procedures Before an asbestos abatement project begins, the owner must evaluate the need to vacuum and/or wet wipe the work areas to remove any dust which may contain asbestos, and might, therefore, interfere with the inspection and final air clearance level to be achieved prior to 2584 repopulation of the building. A licensed contractor is required for all asbestos hazard abatement projects.

2.4

2.4.2

Operations and Maintenance Activities 2585

A licensed contractor is not required for operations and maintenance activities. An operations and maintenance activity means corrective action which is not intended as asbestos abatement. Only 25 square feet or less or 10 linear feet or less, if on covered piping, of friable 2586 ACM may be abated per year per project as an operations and maintenance activity. An operations and maintenance activity may be performed without application or notice to the administrative authority having jurisdiction.

2580 2581 2582 2583

2584 2585 2586

Mechanical, electrical, plumbing, or general

See N.J.A.C.5:23-2.2. N.J.A.C.5:23-8.1(~). N.J.A.C.5:23-8.1(d). N.J.A.C. 5:23-8.5(h). This notification is in addition to the notifications to the Departments of Labor and at $2.2.4. Health & Senior Services discussed N.J.A.C.5:23-8.13. N.J.A.C.5:23-8.3(b). N.J.A.C.5:23-8.2.

Indoor Pollutants construction work which involves incidental disturbance of ACM is considered an operations and maintenance activity. The stabilization of ACM by applying duct tape, rewettable cloth, or other sealable material also is considered an operations and maintenance activity. Owners are required to maintain specific records of each operations and maintenance activity at a central 2587

location. Wetting methods must be used where ACM will be disturbed. Workers are required to be trained and certified where required by the asbestos licensing and permitting 2588

regulations. 2.4.3 Asbestos Hazard Abatement Projects Asbestos hazard abatement projects are those which involve the removal, enclosure, or encapsulation of more than 25 square feet of ACM used on any equipment, wall, or ceiling area, or involve the removal or encapsulation of more than 10 linear feet of ACM on covered 2589 Asbestos hazard abatement projects may not be segmented to come within the piping. 2590

operations and maintenance activity category. For an asbestos hazard abatement project, an application in writing must be made to obtain the required permit. Asbestos abatement work may only be conducted in unoccupied buildings unless the asbestos safety control monitor (ASCM) files a written request detailing the elements required in N.J.A.C. 5:23-8.19(c). Issuance of the construction permit for asbestos 2591 abatement authorizes the preparation of the work area. Each entity undertaking an asbestos hazard abatement project is required to contract with an ASCM to ensure compliance with N.J.A.C. 5:23-8 et seq. The ASCM may not have any economic relationship with any other party involved with the abatement project. However, the ASCM may perform personal monitoring of the contractor's employees, but only through a contract with the building owner. The ASCM is required to comply with the elements of N.J.A.C. 5:23-8.11, including making quarterly payments to the Department of Community 2592 Affairs of 6 percent of the gross revenue earned fiom ASCM activities. The ASCM must employ an asbestos safety technician (AST), licensed in accordance with N.J.A.C. 5:23-8.10, to be on site fiom the initial preparation of the work area through the final visual inspection and to

2587 2588 2589 2590 2591 2592

N.J.A.C. 5:23-8.14. N.J.A.C. 8:60 et sea.; N.J.A.C. 12:120 et sea. N.J.A.C. 5:23-8.2. N.J.A.C. 5:23-8.14. N.J.A.C. 5:23-8.5.

N.J.A.C. 5:23-8.1I .

New Jersey Environmental Law Handbook 2593

No asbestos hazard abatement work, ensure compliance with N.J.A.C. 5:23-8 et seq. including project area preparation, can be performed without having a certified asbestos safety 2594 technician at the work area. A pre-commencement, as well as progress, clean-up, and final, inspection must be conducted and approved by the asbestos safety technician. The AST is required to ensure the contractor's compliance with the requirements of N.J.A.C. 5:23-8 et seq. The AST shall ensure that the required pressure differentials are maintained. The AST is authorized to direct corrective actions and to issue stop-work orders as required. If the contractor does not comply with the AST's order, the AST is required to notify the enforcing agency who shall issue and 2595 enforce a stop-work order. The Department of Community Affairs may fine the AST for any 2596 A certificate of occupancy must be failure to enforce these Subchapter 8 requirements. received prior to reoccupation of the portion of the building vacated during an asbestos hazard 2597

abatement project. During an asbestos hazard abatement project, respirators and protective clothing for all those who visit or inspect the work area must be provided. The contractor must provide an 2598 adequate decontamination unit with sufficient shower stall(s) at the site. Methods for the abatement of an asbestos hazard include encapsulation, enclosure, and 2599 removal. Encapsulation is performed by spraying friable ACM mixed with a liquid sealant to 2600 "Friable" means any material which when dry ensure adherence to the ACM to be repaired. 260 1 Encapsulation may may be crumbled, pulverized, or reduced to a powder by hand pressure. be performed when damage to the ACM is improbable or the ACM is granular or cementitious. Encapsulation may not be performed where ACM is friable, damaged, or deteriorating. The property owner is required to perform periodic monitoring and maintenance of encapsulated

N.J.A.C. 5:23-8.10; N.J.A.C. 5:23-8.7. N.J.A.C. 5:23-8.15(a). N.J.A.C. 5:23-8.7. N.J.A.C. 5:23-8.10(e). N.J.A.C. 5:23-8.8(a). N.J.A.C. 5:23-8.15. N.J.A.C. 5:23-8.2. N.J.A.C. 5:23-8.16(a). N.J.A.C. 5:23-8.2.

Indoor Pollutants

surfaces. Encapsulated materials are required to be labeled or otherwise identified to provide 2602 warning to persons who may be required to disturb the material. Enclosure requires the construction of a permanent air-tight, impact-resistant solid structure of new construction materials that must be built around the asbestos-covered pipe or structure to prevent the release of ACM into the area beyond the enclosure and to protect these materials from casual contact during future maintenance operations. Enclosures must be identified by signs and inspected as least annually. Enclosures may not alter the fire rating and 2603

must meet flame resistance and flame spread requirements. Removal of the asbestos may be conducted either within a full or limited containment 2604 The regulations provide the specific sequence, means, and methods to be enclosure. 2605 employed for removal of asbestos within full containment enclosures. Asbestos removals utilizing the glovebag technique may be performed utilizing only a limited containment 2606 A glovebag is a polyethylene bag especially designed to contain sections of system. 2607 equipment fiom which ACM will be removed without releasing fibers into the air. Air sampling must be performed by the AST while abatement is in progress. Samples are required to be taken in the clean room of the decontamination unit and at two locations adjacent to the work area but remote from the decontamination unit. Air samples collected during the abatement work may be analyzed by Phase Contrast Microscopy (PCM). AAer completion of the asbestos abatement activities, and the AST has performed and approved a clean-up inspection, the AST will conduct aggressive post-abatement air monitoring. Post-abatement air sampling for asbestos hazard abatement project are required to utilize Transmission Electron Microscopy, except that PCM may be utilized for asbestos hazard abatement projects utilizing 2608

the glovebag technique. All asbestos waste materials destined for disposal in New Jersey must be wetted and packaged in permanently sealed, leak-tight containers. No haulage of loose asbestos is permitted. Asbestos waste which is properly packaged is classified as non-hazardous industrial

2602 2603 2604 2605 2606 2607 2608

N.J.A.C. 5:23-8.16(a). N.J.A.C. 5:23-8.16(b). N.J.A.C. 5:23-8.15;N.J.A.C. 5:23-8.17. N.J.A.C. 5:23-8.15. N.J.A.C. 5:23-8.17. N.J.A.C. 5:23-8.2. N.J.A.C. 5:23-8.21.

New Jersey Environmental Law Handbook 2609

waste, ID No. 27, and may be disposed of at a landfill which is registered by the NJDEP. Failure to comply with the notification and packaging regulations will result in civil 2610 administrative penalties. The only permissible applications of ACM during construction or renovation of structures, facilities, or installations are those in which the asbestos is securely bound into a solid matrix before the application is performed, such as floor tiles in which asbestos is a minor 2611

component. The friable asbestos present in a building or portion of a building to be demolished must be removed &om that building or portion of a building prior to its demolition. The asbestos is required to be removed and air sampling performed both during and after removal in accordance 2612 with the regulatory requirements outlined above.

LEAD-BASED PAINT OVERVIEW Lead is a blue-gray metal that has the physical characteristics of being heavy, soft, and flexible/malleable. For centuries lead has been used in plumbing, building materials, ceramic coatings, batteries, ammunition, and even placed in wine as a sweetener. Lead was previously added to paint for both color and durability. Lead was also formerly used in gasoline as an anti2613 knock agent and to increase the octane rating. Exposure to lead occurs through both inhalation and ingestion. Lead exposure can cause anemia, high blood pressure, kidney disease, brain damage, nerve damage, decreased fertility, 2614 Because of its effects premature births, miscarriages, and damage to blood cell formation. and the rapid development in a child's body, chddren are especially susceptible to the effects of

3.0 3.1

See N.J.A.C. 7:26-2.12, -2A.8(1) for the NJDEP's solid waste regulations governing disposal of asbestos wastes. See New Jersey Devt of Env. Protection v. Meco Constructors, Inc., 1990 WL 324326 (N.J. Dept. Env. Prot. 1990) (imposing a $24,000 civil administrative penalty for failing to notify NJDEP 10 days prior to disposal and disposal of seven truck loads of solid waste containing loose asbestos); New Jersev Dept of Env. Protection v. Henrv Vacaro Corp., 1991 WL 313665 (N.J. Dept. Env. Prot. 1991) (imposing a civil administrative penalty of $19,075 for failing to notify NJDEP 10 days prior to disposal and disposal of loose asbestos shingles, even though contractor was unaware that materials contained asbestos). N.J.A.C. 5:23-8.12@)(3). N.J.A.C. 5:23-8.18. Agency for Toxic Substances and Disease Registry, Draft Toxicological Profile for Lead $1.1 and $5.3 (Sept. 2005), available at http://www.atsdr.cdc.gov/toxproJiles/tpl3.pdJ: Id. at $3.

Indoor Pollutants lead exposure. Children's exposures are also increased due to their tendency to place hands and 2615 objects in their mouths. In 1973, the USEPA commenced a program to reduce lead in gasoline. All gasoline 2616 since 1996 has been unleaded. In 1978, the USEPA prohibited the use of lead-based paints. Under the Clean Air Act, the USEPA has established national primary and secondary ambient air 2617 quality standards. Under the Safe Drinking Water Act, the USEPA prohibits the use of lead in household plumbing. The USEPA has also established a maximum contaminant level in 2618 drinking water. Under the Resource Conservation and Recovery Act, the USEPA has established standards applicable to the labeling, generation, and transporting of hazardous 2619 waste. The Residential Lead-Based Paint Hazard Reduction Act of 1992 requires both the USEPA and United States Department of Housing and Urban Development (HUD) to take 2620 actions to help reduce the prevalence of lead poisoning. OSHA has established standards 262 1 concerning the exposure of workers to lead. 3.2 LEAD LICENSES AND PERMITS 3.2.1 General Provisions Regulations providing standards for the certification of employees working in the lead 2622 industry and lead training courses were promulgated in 1995. The regulations provide for the certification of lead workers and supervisors in housing, public buildings, commercial buildings, and superstructures and for the certification of lead inspectorslrisk assessors and abatement plannerslproject designers. The regulations also provide for the certification of training agencies 2623 and courses for each job classification provided for in the regulations.

Id. at $1.6. Id. at $5. 40 C.F.R. $50.12. 40 C.F.R. $141, Subpart I. 40 C.F.R. $5260-264. Title X - Residential Lead-Based Paint Hazard Reduction Act of 1992, H.R. 5334,102nd Cong. (1992). See 29 C.F.R. 1910.1025 for the general industry standard and 29 C.F.R. 1926.62 for the construction industry standard. N.J.A.C. 8:62-62 et sect.

N.J.A.C. 8:62-1.2.

New Jersey Environmental Law Handbook Administrative penalties for employee, training agency, or instructor violations may not 2624 exceed $1,000 per day for an initial violation and $5,000 per day for each subsequent offense. Where an applicant or certificate holder is found to be posing an imminent threat to the public health, safety, or welfare, the Department of Health & Senior Services Commissioner may order 2625 the party to temporarily cease and desist operations, prior to a hearing.

3.2.2 Licensing of Employers Certification by the Department of Community Affairs is required for any individual or business entity conducting lead evaluation or lead abatement as a business. Contractor certification is not required for (1) an owner performing work on its own premises with its own employees (though the employees must be certified by the Department of Health and Senior 2626 Services ); (2) a homeowner performing work on a residence that he owns and occupies as h s primary place of residence; (3) a painting, woodworking, or similar firm whose service may result in the disturbance of paint provided that the firm does not hold itself as certified or possessing specialized competency; or (4) a person who has completed an approved "clearance technician" class provided that the person is only taking dust wipe samples after activities that 2627 are not a lead abatement. A license can be suspended or revoked or a license application denied for willful misstatements or omissions of material fact in the application; misrepresenting qualifications for certification; willfully committing fraud in lead evaluation or lead abatement activities, or other business subject to the Uniform Construction Code; engaging in unsafe practices during lead abatement work; engaging in lead evaluation or abatement without certification; failure to comply with applicable permit andlor certificate requirements; or other violations of the Uniform Construction Code. Upon notification of a denial of application for a license or revocation or suspension of a license, the applicant has the right to request a hearing within 15 days of the date of the notice. Any entity whose license has been revoked is ineligible to apply for certification for 3 years from the date of revocation. Additionally, no other business may apply if they have any proprietor, officer, director, general partner, shareholder, or limited partner with at least 10 2628 percent interest in common with the business whose license was revoked.

2624 2625 2626 2627 2628

N.J.A.C. 8:62-5.4. N.J.A.C. 8:62-5.3. See infra Section 3.1.3. N.J.A.C. 5:17-2.1. N.J.A.C. 5:17-2.5.

Indoor Pollutants 3.2.3 Lead Employee Permits Permits are provided for lead abatement workers, supervisors and plannerlproject designer, and lead inspectorlrisk assessor. To receive a permit, each applicant must be at least 18 years of age, successfully complete the requisite training course for the permit requested from a training agency certified by the Department of Health & Senior Services, and successfully 2629

complete a hands-on skills assessment and written examination. Lead inspectorslrisk assessors and supervisors shall additionally meet specified education and experience 2630 263 1 Each permit issued is valid for 2 years. requirements. A permit may be suspended or revoked if the permit is obtained through fraudulent means; work is performed without a valid permit; the individual is found to be incompetent or negligent; the individual engages in unsafe work practices; falsifies reports; or loans, abandons, or allows the permit to pass from his possession. Permit suspension or revocation also can result fkom the individual tampering with or altering a permit; for any violation of the licensing 2632 regulations or any other good cause. Where an administrative penalty andlor license revocation or suspension is proposed, or where a license application or renewal is denied, the aggrieved party has a right to request a hearing within 10 days from the receipt of notice. Where an informal conference or review is held, an aggrieved party disagreeing with the findings of the conference may request a formal hearing in writing within 10 days after the assessment of an administrative penalty. Recipients of administrative penalties may alternatively request a 2633 settlement conference. 3.2.4 Certification of Training Courses All applicants for lead permits must successfully complete a certified training course 2634 which covers the required basic curriculum. The lead abatement workers course must include a minimum of 32 hours of training, with at least 10 hours of hands-on training. The lead abatement supervisor for housing and public buildings and the lead inspectorlrisk assessor course must include a minimum of 40 hours of training, with at least 8 hours of hands-on training. The lead abatement supervisor for commercial buildings and superstructures course must include a

2629 2630 263 1 2632 2633 2634

N.J.A.C. 8:62-3.2.

See N.J.A.C. 8:62-3.2(d)-(0. N.J.A.C. 8:62-3.6(~). N.J.A.C. 8:62-3.8(b). N.J.A.C. 8:62-5.5. N.J.A.C. 8:62-3.2(~).

New Jersey Environmental Law Handbook minimum of 32 hours of training, with at least 8 hours of hands-on training. The lead plannerlrisk assessor course must include a minimum of 56 hours of training, with at least 12 2635 hours of hands-on training. 2636 In order for a Certified training agencies are required to employ a training manager. training course to be certified, three or more course instructors must be employed. In addition to meeting the requirements of the federal Model Accreditation Plan, all instructors must meet education or educational experience requirements, successfully complete lead-specific training, meet lead abatement experience requirements, participate at least twice per year in continuing 2637 The criteria education, and receive satisfactory reviews during annual performance reviews. 2638 for topics for each of the lead training courses is provided by regulation. Any certified training agency may be subject to administrative penalties andlor have its certification suspended or revoked for incompetence, failure to adequately present topics, performing as a training agency without certification, submitting false information, falsification of records, failure to maintain records, failure to comply with the regulations, and any other good cause within the meaning of the law or regulations. Instructors may similarly be subject to administrative penalties and/or have their certification suspended or revoked for submitting false information, falsification of training records, failure to perform quality training, failure to 2639 comply with the regulations, or any other good cause. 3.3 LEAD HAZARD EVALUATION AND ABATEMENT SUBCODE New Jersey's lead hazard evaluation and abatement subcode applies to the abatement of lead-based paint hazards and the certification of lead-based paint hazard evaluation or abatement 2640 contractors. The removal, repair, encapsulation, or enclosure of lead-based paint or leadcontaminated soil requires a construction permit in accordance with the Uniform Construction 2641

Code.

2635 2636 2637 2638 2639 2640 2641

N.J.A.C.8:62-4.2. N.J.A.C.8:62-4.5(a). Educational and experience requirements are set forth within the regulation. N.J.A.C.8:62-4.5(b). N.J.A.C.8:62-4.6-4.11 N.J.A.C.8:62-4.15. N.J.A.C.5:17-l.l(c). N.J.A.C. 5: 17-l.l(e).

Id.

Indoor Pollutants 3.3.1 Evaluation and Testing Lead inspectorslrisk assessors are required to enter into a contract prior to conducting testing and evaluations. The contract must describe the extent of testing, method and number of samples to be taken, any special responsibilities of the owner or occupants, and any special precautions of the owner or occupants. In addition, the contract must specify whether the services include testing andlor risk assessment; contain an explanation of composite sampling methods if relevant; and clearly indicate whether the sampling plan will employ random or worst-case sampling in multiple dwellings, if relevant. No testing or evaluation is required for structures built after January 1, 1978. For structures built prior to 1978 where all painted surfaces are determined to be in an intact condition, the inspector is required to offer a less 2642 comprehensive lead screening. Lead testing and evaluation services are required to be performed in accordance with standards established by the federal the Department of Housing and Urban Development's 2643 (HUD) Steel Structures Painting Council, and the USEPA. Only individuals certified as a inspectorlrisk assessor may perform evaluation and testing. Any laboratories processing or analyzing samples must be accredited under the USEPA National Lead Laboratory Accreditation 2644 X-ray fluorescence (XRF) testing must be conducted in accordance with Program (NLLAP). HUD guidelines and utilizing manufacturer's recommended calibration techniques and substrate corrections. Chemical spot tests may only be utilized for initial pre-tests and may not form the basis of any screening, testing, or evaluation. Dust-wipe sampling must be conducted in 2645 A complete report must be provided at the completion of accordance with HUD guidelines. 2646 Screening results for floor wipes in excess of 25 micrograms per all testing and evaluation. square foot (yglsf) or for window sill wipes in excess of 125 yglsf require that a full evaluation be recommended in the report. A lead hazard is indicated by floor wipes equal to or greater than 40 yglsf, interior window sill wipes equal to or greater than 250 yglsf, or window wells equal to 2647 or greater than 400 y glsf.

2642 2643 2644 2645 2646

2647

N.J.A.C. 5:17-3.1. N.J.A.C. 5:17-3.2. N.J.A.C. 5:17-3.3. N.J.A.C. 5:17-3.4. N.J.A.C. 5:17-3.6(a). The specific requirements for the report are listed within the regulation. N.J.A.C. 5:17-3.6. N.J.A.C. 5:17-3.5.

New Jersey Environmental Law Handbook

3.3.2 Pre-Abatement Preparation The owner must provide written consent to the scope of the project and methods to be employed prior to the commencement of any lead abatement project. A drawing detailing the work to be performed, routes to be taken, contractor facilities, and occupant areas and routes must be developed and made available to both the owner and occupants. Occupants shall be relocated and provided with lead hazard information prior to any abatement activities. All 2648 structural deficiencies affecting the work area must be corrected prior to abatement activities. 2649 The abatement work area must be classified either as an interior or exterior worksite. The preparation level, either 1, 2, 3, or 4 for interior or 1, 2, or 3 for exterior must then be determined. Determination of the preparation level will identify the time limit for completion of the work, resident location, barrier system requirements, placement of warning signs, operation 2650 of ventilation system, handling of furniture, and security. 3.3.3 Lead Hazard Abatement Contractors are required to provide notice to the Department of Community Affairs at least 10 working days prior to the planned start of lead abatement work. The contractor must ensure a certified supervisor to be present whenever abatement work is performed and ensure that all tasks are performed by certified individuals. At the completion of the abatement work, the contractor must provide a certification to the owner that all lead-based paint hazards that were included within the scope of work have been abated in accord with regulatory 2651 requirements. A copy of the certification will be filed with the local enforcing agent. Where abatement work continues beyond 1 day and the occupants will be returning at night, cleaning is 2652 required prior to daily reoccupancy. The regulations prohibit paint removal utilizing 1) open flame burning or torching, 2) heat guns above 1,lOO•‹F, 3) machine sanding or grinding unless HEPA-equipped, 4) uncontained hydroblasting or high pressure washing, 5) abrasive blasting or sandblasting unless HEPA equipped, 6 ) methylene chloride chemical paint removers, or 7) dry scraping. Removal utilizing heat guns are limited to only 2 square feet. Dry scraping may be employed only around

2648 2649 2650 2651 2652

N.J.A.C. 5: 17-4.1. N.J.A.C. 5:17-4.2. N.J.A.C. 5: 17-4.3(b)-(c). The criteria for each preparation classification is provided by regulation. N.J.A.C. 5: 17-5.1. N.J.A.C. 5:17-5.4.

Id.

Indoor Pollutants 2653

In addition to electrical outlets or in combination with the permitted heat gun removal. 2654 removal, both encapsulation and enclosure are acceptable means of abatement. Subsequent to the lead abatement, cleaning is required followed by a visual inspection and wipe sampling to determine satisfactory completion of the lead abatement activities. Clearance criteria are established for 1) residential buildings and child occupied facilities and 2) 2655

all other facilities. 3.3.4 Lead in Soil The inspectorlrisk assessor is required to recommend and conduct soil sampling where 1) a site to be remediated contains bare play areas or areas commonly used by children as play areas; 2) lead-based paint is known or suspected to be on the building exterior and is known or suspected to be a health hazard or source of interior contamination; or 3) soil is known or suspect to contain lead due to prior usage. The levels of lead contamination along with the usage of the 2656 area determine whether abatement (i.e., removal or paving) or interim controls are required.

MOLD While recent cases outside New Jersey have raised the concern of mold as an indoor contaminant causing personal injury, New Jersey courts have not yet confronted these issues 2657 and the potential health presented, including the difficulty in establishing mold exposures 2658 New Jersey courts have considered mold as aspects effects associated with these exposures. of both insurance and construction defect claims. With regard to insurance, New Jersey courts have held that if mold results from a covered loss, such as storm damage, there is coverage under 2659 a homeowner policy despite the existence of a mold exclusion in the policy. Though mold may not be immediately present after construction, construction officials may cite developers and builders for construction defects even after the issuance of a certificate of occupancy. Where 4.0

N.J.A.C. 5: 17-6.1. N.J.A.C. 5:17-6.3-.4. N.J.A.C. 5: 17-9.1. N.J.A.C. 5:17-7.1. See R. Christopher Spicer, Harry J. Gangloff & Neil Feldscher, Microbial Samvlin~and Data Intervretation

for Problematic Buildings: Considerations for Construction Related Environmental Claims, 17 Envtl. Claims J. 1 (Winter 2005). See Institute of Medicine of the National Academies, Damv Indoor Spaces and Health (2004); Eileen

Storey et al., Guidance for Clinicians on the Recognition and Management of Health Effects Related to Mold Exposure and Moisture Indoors (2004); New Jersey Department of Health & Senior Services, & o fJ Advisow Bulletin (Feb. 2002), available at http://www..state.nj.us/health/eoh/tsrp/moldbulletin.pdf: Simonetti v. Selective Ins. Co., 372 N.J. Super. 421 (N.J. Super. Ct. App. Div. 2004).

New Jersey Environmental Law Handbook mold later appears and is determined to be present due to water infiltration from a failure to comply with the Uniform Construction Code, a governmental construction officer may enforce a 2660 notice of violation and monetary penalty against the developer. Construction of additions at older urban schools has caused many public schools to suffer mold damage and the expenditure 2661 of substantial amounts to address the mold contamination. New Jersey has not enacted any statues concerning mold, though a number of bills have 2662 been introduced in the New Jersey Legislature as of September 2006. The Department of Labor has enacted a regulation related to mold under PEOSHA. This regulation, which only 2663 applies to buildings occupied by public employees during their regular working hours, requires the employer to control microbial contamination by promptly repairing water leaks or by promptly drying, replacing, removing, or cleaning damp or wet materials. The employer is 2664 additionally required to remove visible microbial contamination. Though only advisory in a nature, the Department of Health & Senior Services has issued guidelines concerning mold 2665 remediation.

2660 2661 2662

DKM Residential Proverties Com. v. Townshiv of Montrromerv, 182 N.J. 296 (2005). Sirnonetti v. Selective Ins. Co., 372 N.J. Super. 421 (N.J. Super. Ct. App. Div. 2004). See Toxic Mold Protection Act of 2004, S.B. 1249, 21 1th Leg. (N.J. 2004); S.B. 1992, 21 1th Leg. (N.J.

2004); A.B. 639,211thLeg. (N.J. 2004); A.B. 3895,211thLeg. (N.J. 2005). 2663 2664 2665

N.J.A.C. 12:lOO-13.1. N.J.A.C. 12:100-13.4(~). New Jersev Department of Health & Senior Services, Mold in the Workplace Prevention and Control (July 2004), available at http://www.state.nj.us/health/eoh~eoshweb/moldib.pd$

CHAPTER X OTHER ENVIRONMENTAL LAWS AND PROGRAMS 1.0 1.1

NOISE THE NOISE CONTROL ACT OF 1 9 7 1 ~ ~ ~ ~ NJDEP is mandated to adopt and enforce regulations to prevent the interference with the quality of life in the State caused by excessive noise. The statute also created the Noise Control Council which assists and advises the NJDEP in adopting and enforcing rules and regulations necessary to abate noise in the community. Noise control regulations are found at N.J.A.C. 7:291.1 et seq. If the NJDEP fails to regulate a certain type of noise-producing activity, a local board of health is not precluded fiom adopting a resolution on its own, provided however, that this 2667 activity at a designated noise level constitutes a nuisance. 2.0 2.1

RADIATION AND FISSIONABLE MATERIAL THE RADIATION PROTECTION ACT^^^^ This statute created, within the NJDEP, the Commission on Radiation Protection, whose duties are to formulate, adopt, promulgate, amend, and repeal rules and regulations prohibiting and preventing exposure to unnecessary radiation. The statute also establishes the penalties, enforcement and regulatory procedures, and reporting requirements for storage, handling, or transportation of radioactive materials. In addition, it requires transporters of certain specified radioactive material to obtain a certificate of handling fiom the NJDEP. New Jersey's Radiation Protection Programs, promulgated under the authority of this Act, became effective on February 25,2000. They are set forth at N.J.A.C. 7:28-1.1 et seq., and are aimed at protecting the people and the State's environment from potentially harmful exposure to radiation. 2.2 THE RADIOLOGIC TECHNOLOGIST ACT^^^^ This statute created the Radiologic Technology Board of Examiners, an agency of the Commission on Radiation Protection within the NJDEP, to regulate and license radiologic technologists.

2666 2667

2668 2669

N.J.S.A. 13:lG-1 et sea. Malhame v. Borough of Demarest, 162 N.J. Super. 248, 392 A.2d 652 (Law Div. 1978), appeal dismissed, 174 N.J. Super. 28,415 A.2d 358 (App. Div. 1980). N.J.S.A. 26:2D-1 et sea. N.J.S.A. 26:2D-24 et sea.

New Jersey Environmental Law Handbook THE RADIATION ACCIDENT RESPONSE ACT^^^^ This statute requires the NJDEP, after consultation with other departments, to prepare and adopt a State Radiation Emergency Response Plan. This plan must provide for the implementation of all appropriate protective or remedial measures with respect to a radiation accident or threatened accident at a nuclear facility or during the transportation of radioactive material. 2.4 THE FISSIONABLE SOURCE MATERIAL ACT^^^^ This statute prohibits the extracting, milling, or processing in New Jersey of any mineral intended for use as fuel for nuclear fission reactors or weapons. Exploration of these substances to the extent of non-disruptive study techniques and sample collections that do not involve excavation, drilling, explosives, or chemicals are allowed under the statute. Violators of the statute are subject to fines of up to $10,000 per day while the violation continues.

2.3

3.0 3.1

PESTS AND PESTICIDES THE PESTICIDE CONTROL ACT OF 1 9 7 1 ~ ~ ~ ~ This statute authorizes the NJDEP to formulate and promulgate rules and regulations prohibiting, conditioning, and controlling the sale, purchase, transportation, labeling, use, and application of pesticides which cause or may tend to cause adverse effects on human health or the environment. The statute also establishes the Pesticide Control Council to assist the NJDEP in control and regulation of the use of pesticides. The NJDEP is authorized to institute a civil action for injunctive relief or penalties of up to $3,000, per violation, per day. The Pesticide Act 2673 is a strict liability statute. The statute also allows the NJDEP to charge fees for services performed under the Act. The regulations for the Act are contained in N.J.A.C. 7:30-1.1 et seq. A 2002 amendment to the Pesticide Act implements integrated pest management practices in school, to control pests while reducing the volume of potentially hazardous 2674 pesticides used by increasing use of alternative methods such as biological controls.

2670 2671 2672 2673

2674

N.J.S.A. 26:2D-37 et sea. N.J.S.A. 13:lJ-1 ett N.J.S.A. 13:lF-1 et s e a State of N.J., Dep't of Envt'l Prot. v. Larchmont Farms, Inc., et al., 266 N.J. Super. 16, 29, 628 A.2d 761, 769 (App. Div. 1993), certif. denied, 135 N.J. 302,639 A.2d 301 (1994). N.J.S.A. 13F-19 et sea.

Other Environmental Laws and Programs

3.2

INJURIOUS I N S E C T S ~ ~ ~ ~ This section of Title 4, Agriculture and Domestic Animals, allows the Department of Agriculture to direct growers or dealers in plants of any kind to abate nuisances caused by injurious insects that might spread from the infested plants to other plants on the public highways or upon lands adjoining or belonging to others. It provides for inspections, penalties, and orders of abatement or destruction to achieve this goal. Failure to comply with an order by the Department subjects one to a $50 fine. No nursery may sell or offer to sell any nursery stock unless it first receives a certificate of inspection from the Department of Agriculture. 3.3 THE GYPSY Pursuant to this section, the gypsy moth is declared to be a public nuisance and the Department of Agriculture is authorized to inspect any public or private lands to ascertain whether the plant life or vegetation located there is free from the gypsy moth. In addition it provides for a right of entry to abate gypsy moth nuisance, a notice of proposed action, and penalties for interference with Department officials enforcing this statute. 3.4 MOSQUITO This statute established the State Mosquito Control Commission within the NJDEP and creates county mosquito extermination commissions. The Commission is authorized to carry on a continuous study of mosquito control and extermination, to recommend to the Legislature the amount of money necessary for mosquito control, and to allocate funds appropriated for State aid to counties. When surveys conducted by the director of the State Agricultural Experiment Station determine that a breeding ground for mosquitoes exists, the State must inform the county commission of the location of the breeding ground and the county commission must in turn notify the owner of the land that the situation must be abated. If the landowner fails to comply with this notice, the county commission must abate the mosquito nuisance at the expense of the owner.

MOTH^^^^

EXTERMINATION^^^^

4.0 4.1

FISH AND GAME FISH AND GAME, WILD BIRDS, AND A N I M A L S ~ ~ ~ * Title 23 of the New Jersey Statutes Annotated vests in the NJDEP Division of Fish, Game, and Wildlife the responsibility for the propagation, protection, and preservation of fish,

2675 2676 2677 2678

N.J.S.A.4:7-15 et seq. N.J.S.A. 4:7-36 et sea. N.J.S.A.26:9-1 et sea N.J.S.A.23:l-1 et sea

New Jersey Environmental Law Handbook 2679

birds, and game animals. Included in this title are the Endangered and Nongame Species Act, 2680 Additionally, there are and the Marine Fisheries Management and Commercial Fisheries Act. prohibitions against the discharge into any fresh or tidal waters of petroleum products, debris, 268 1 Violators are hazardous, deleterious, destructive, or poisonous substances of any kind. subject to a penalty of up to $6,000 per day for each offense. Violation of this anti-pollution provision is regarded as malum prohibitum and no proof 2682 Furthermore, the statute has been of guilty knowledge or intent is necessary for a violation. interpreted to apply to any substance that would be hazardous, deleterious, destructive, or 2683

poisonous to form of life. Under the authority of N.J.S.A. 23:l-1 et seq., New Jersey has enacted supplemental regulations, entitled the "Division of Fish, Game and Wildlife Rules," which can be found at N.J.A.C. 7:25-1.1 et sea. 4.2 The Commissioner of Environmental Protection is authorized to promulgate rules and

SHELLFISH^^^^

regulations for the preservation and improvement of the shellfish industry after consultation with 2685 In the Shell Fisheries Council and subject fo the disapproval of the Marine Fisheries Council. addition, the Shell Fisheries Council is authorized to lease State tidal water lands to be used for the planting and cultivating of oysters and clams.

2679 2680 2681 2682

2683

2684 2685

N.J.S.A. 23:2A-1 et sea. (protection for non-game and endangered species). N.J.S.A. 23:2B-1 et sea. (fishery management plans for each major fishery in the State). N.J.S.A. 23:5-28. State v. Kinsley, 103 N.J. Super. 190,246 A.2d 764 (Law Div. 1968), affd, 105 N.J. Super. 347,252 A.2d 224 (App. Div. 1969). State, Dev't of Envt'l Prot. v. Jersey Cent. Power & Light Co., 133 N.J. Super. 375, 336 A.2d 750 (App. Div. 1975), rev'd on other wounds, 69 N.J. 102,351 A.2d 337 (1976). N.J.S.A. - 50:l-5 et sea. New Jersey's Miscellaneous Shellfish Rules can be found at N.J.A.C. 7:25-7.10, et seg.

Other Environmental Laws and Programs 5.0 5.1

PRESERVATION GREEN ACRES

5.1.1 The New Jersey Green Acres Land Acquisition Acts of 1961 and 1971, $@ the New Jersey Green Acres Land Acquisition and Recreation Opportunities Act

Beginning in 1961, this series of statutes appropriated money, by the sale of bonds, to acquire land for public recreation and natural resource conservation. Municipalities and certain non-profit groups may make an application to the NJDEP for Green Acres funds to assist them in purchasing land. In 1998, a constitutional amendment and the Garden State Preservation Trust Fund Act provided a stable and enhanced source of funding for the program, dedicating $98 2687 million annually for a 30-year period. Without prior approval, land acquired by a local unit or the State with Green Acres funds cannot be disposed of or diverted to use for other than recreation and conservation purposes. In addition, the NJDEP may condition a grant of funds under the various acts so that non-Green Acres lands used for public recreation may not be 2688 converted to another use without NJDEP approval. The New Jersey Green Acres Program establishes the procedures and standards by which 2689 the NJDEP may implement the purposes and objectives of the Green Acres laws. 2690 5.1.2 The Green Acres Tax Exemption Act This statute exempts land and its improvements used exclusively for conservation or 2691 recreation from State taxation. Owners claiming this exemption must file an application for certification with the NJDEP. The requirements for exemption, together with the appropriate application procedures, are set forth at N.J.A.C. 7:35-1.1 et seq.

2686 2687 2688

2689 2690 2691

N.J.S.A. 13:8A-1 et seq. and the Garden State Preservation Trust Act; N.J.S.A. 13:8C-1 et sea. N.J. Const. art. VIII, •˜ 2, para. 7; N.J.S.A. 13:8C-1, w. N.J.A.C. 7:36-25 to 26; Borough of Demarest v. State, Dev't of Envt'l Prot., 148 N.J. Super. 322,372 A.2d 656 (Ch. Div. 1977). S e e d Kauffman v. Mayor and Council of Borough of North Haledon, 229 N.J. Super. 349, 551 A.2d 564 (Law Div. 1988) (Any lands held by a municipality for either recreation or conservation purposes at the time of Green Acres funding ... cannot be sold or otherwise diverted from their existing use unless the statutory requirements have been met); Cedar Cove. Inc. v. Stanzione, 122 N.J. 202, 584 A.2d 784 (1991); First Amer. Title Ins. Co. v. T m . of Rockawav, 322 N.J. Super. 583, 592 (Ch. 1999). N.J.A.C. 7:36-1.1 et sea. N.J.S.A. 54:4-3.63 et sea. However, if the property is used for purposes other than conservation or recreation, it is subject to roll-back taxes. See N.J.S.A. 54:4-3.69.

New Jersey Environmental Law Handbook

5.2

NATURAL AREAS 2692 5.2.1 The New Jersey Wild and Scenic Rivers Act The purpose of this statute is to preserve, protect, and enhance the natural and recreational values of certain rivers and their adjacent land areas. In addition, it provides for the acquisition, designation, administration, and regulation by the NJDEP of those areas by requiring the NJDEP to establish the New Jersey Wild and Scenic Rivers System. 2693 5.2.2 The Natural Areas System Act This statute authorizes the NJDEP to locate lands suitable for inclusion in the Natural Areas System. These lands must be of a character such that the lessening of human impact will allow them to recover natural values of interest. Once designated, only levels of activities such as swimming, canoeing, hunting, and hiking that will not have serious or long-term effects on the natural values of the areas within the system are permitted. f i e rules and regulations concerning the identification, classification, and management of natural areas, and the administration of the Natural Areas System can be found at N.J.A.C. 7:5A-1.1 et seq. 2694 5.2.3 The Landowners Liability Act 2695 This statute provides for immunity from liability for owners of undeveloped tracts of open land and waters in order to encourage them to permit public recreation and sports activities 2696 An owner, lessee, or occupant on their property. It applies both to public and private entities. of premises generally owes no duty to warn or keep premises safe for entry or use by others for sport and recreational activities. However, liability exists for willful or malicious failure to warn of a dangerous condition, for injuries suffered where permission to engage in an activity was granted for a fee (other than compensation by the State), or for injury caused by acts of the persons granting permission.

2692 2693 2694 2695

2696

N.J.S.A. 1323-45 et sea. N.J.S.A. 13:lB-15.12a et sea. N.J.S.A. 2A:42A-2 et seq. The statute does not protect owners of suburban residential tracts, even if the property is not yet fully developed. See Toogood v. St. Andrews Condominium Ass'n, 313 N.J. Super. 418, 712 A.2d (App. Div. 1998); Beniarnin v. Corcoran, 268 N.J. Super. 517,643 A.2d 108 (App. Div. 1993). Trimblett v. State, 156 N.J. Super. 29 1,294-95 (App. Div. 1977).

Other Environmental Laws and Programs 5.3

HISTORIC AREAS

5.3.1

The&+$ew Jersey Conservation Restriction and Historic Preservation Restriction Act

This statute allows for the acquisition, enforcement, and release of conservation restrictions and historic preservation restrictions by the NJDEP. 5.4 5.4.1

FARMLAND 2698 The Farmland Assessment Act of 1964

This statute outlines the procedures and criteria used in the valuation, assessment, and taxation of land actively devoted to agricultural or horticultural uses. The agricultural or 2699 horticultural use must be the dominant use of the land in order for the statute to apply. Qualified property is given preferential tax treatment and is assessed at a substantially lower value than similar non-farmland property. However, if the property is used for a non-agricultural purpose, it is subject to roll-back taxes. 5.4.2 The Right to Farm AC? This statute established the State Agriculture Development Committee to aid in the coordination of State policies affecting agricultural activities. The Committee is required to identify agricultural development areas, and must evaluate and recommend appropriate actions regarding any private or public action that impacts on these areas. The Committee recommends to appropriate State agencies a program of agricultural management practices in order to mitigate unnecessary constraints on essential farming practices and gives protection against municipal regulations and private nuisance suits. The Right to Farm Act preempts municipal land use ordinances with respect to commercial farms where an agricultural management practice is at 270 1

issue. The standards and procedures for identifying agricultural development areas, and for recommending agricultural management practices, are set forth at N.J.A.C. 2:76-1.1 et seq.

2697 2698 2699 2700 2701

N.J.S.A. 13:8B-1 et seq. N.J.S.A. 54:4-23.1 et sea. Mount Hope Mining Co. v. Rockawav T w . , 8 N.J. Tax 570 (1986). N.J.S.A. 4:lC-1 et sea. T w . of Franklin v. Hollander, 172 N.J. 147, 79 A.2d 874 (2002); Borough of Closter v. Abram Demaree Homestead. Inc., 365 N.J. Super. 338,839 A.2d 110 (App. Div. 2004).

New Jersey Environmental Law Handbook 2702

The Agriculture Retention and Development Act This statute authorizes the establishment of county agricultural development boards by the governing body of any county. These boards are required to develop and adopt agriculture retention and development programs; establish minimum acreage requirements for the creation of, and inclusion in, farmland preservation programs; review and approve or disapprove requests for financial assistance under the Act; and at the request of a municipality require any person preparing a non-agricultural development in an agricultural development area to submit a statement concerning the impact the proposed development would have on agricultural activities. Owners of land which qualifies for differential property tax assessment pursuant to the Farmland 2703 Assessment Act of 1964, and which is included in an agricultural development area by the State Agricultural Development Committee, may petition the board for the creation of a farmland preservation program. The statute also establishes procedures for inclusion of land in a municipally approved program, withdrawal of land from the program, termination of the program, and the landowner's sale of development easements. The key feature of the statute provides for approval by the State Agricultural Development Committee of all sales of land located within an agricultural development area. New Jersey's regulations regarding the creation of municipally approved farmland preservation programs, which are intended to supplement the Act, are found at N.J.A.C. 2:76-4.1 et seq. 5.5 ENVIRONMENTAL JUSTICE An environmental justice claim arises when a predominantly minority community alleges that the siting and permitting of polluting facilities results in discrimination in that the minority communities are forced to bear the negative effects of pollution to a greater extent than other communities. Environmental justice has been receiving more attention during the past few years from the courts and the administrative agencies. The procedure that a claimant must follow to pursue such a claim has been set forth in both EPA regulations and a February 1998 EPA Interim 2704 Guidance Document.

5.4.3

2702 2703 2704

N.J.S.A. 4:lC-11 et se4. N.J.S.A. 54:4-23.1 et sea. (See Section 5.4.1). 40 C.F.R. 8 7; Interim Guidance for Investigating Title VI Administrative Complaints Challenging Permits, available on the EPA World Wide Web site: http://www..epa.gov/civilrights/docs/interimd On June 27, 2000, EPA released its Draft Revised Guidance for Investigating Title VI Administrative Complaints Challenging Permits, 65 F.R. 39667, and its Draft Title VI Guidance for EPA Assistance Recipients Administering Environmental Permitting Programs, 65 F.R. 39665. The EPA's Office of Civil Rights solicited public comments on these documents but never issued final versions, so the 1998 Interim Guidance Document remains in effect.

Other Environmental Laws and Programs Civil Rights Act of 1964 2705 Title VI of the Civil Rights Act of 1964, Section 601, prohibits discrimination by programs and activities that receive federal funding. Under Section 602 of the Act, federal agencies are directed to create regulations implementing the goals of Section 601 in their 2706 programs. The regulations that EPA drafted pursuant to Section 602 prohibit siting decisions that have the purpose of discriminating as well as those where a discriminatory impact results from the program's criteria or methods. The regulations do not, however, create a private cause 2707 of action premised on a claim of disparate impact. The regulations may be enforced solely by agencies, whch may do so either by terminating funding to the programs that have violated the 2708 regulations or by any other means authorized by law. 1998 EPA Interim Guidance Document The February 1998 EPA Interim Guidance Document establishes a framework for processing an environmental justice complaint. However, neither a formal nor an informal rulernaking has been initiated to date, and the Interim Guidance has been criticized by industry groups and State officials who fear that it will interfere with State policies governing land use. The Interim Guidance directs that a complaint alleging discriminatory intent and/or effect be filed with the EPA7sOffice of Civil Rights (OCR), which is responsible for investigating all 2709 If the complaint states a valid claim and is accepted, it will be properly pleaded complaints. processed within 20 days of acknowledgment of receipt by the agency. Next, OCR conducts a factual inquiry into whether the permit at issue will create a disparate impact on a racial or ethnic population. A disparate impact is determined by first identifying the affected population, usually by proximity to the facility. Second, the racial or ethnic composition of the affected population is determined. Third, OCR determines the universe of facilities to consider, because often it is the effect of a cluster of facilities that creates the disparate impact. The affected population is then

42 U.S.C. 8 2000 et sea. 2706 2707

2708 2709

40 C.F.R. 7.30 et sea. Private plaintiffs may still pursue intentional discrimination claims under Title VI itself. See Alexander v. Sandoval, 532 U.S. 275, 121 S. Ct. 1511, 149 L. Ed. 2d 517 (2001); South Camden Citizens in Action v. NJDEP, 274 F.3d 771 (3d Cir. 2001).

See Alexander, 532 U.S. at 289. A properly pleaded complaint is in writing and signed, describes the alleged discriminatory act(s), is filed within 180 days of the discriminatory act, and identifies which EPA recipient took the discriminatory act. The 180-day time limit may be waived for good cause, as this will encourage complainants to first exhaust administrative remedies. If the complaint is filed before the final permit has been issued, OCR will share the complaint with the State agency, and retain it until the permit has been issued and the complaint is ripe.

New Jersey Environmental Law Handbook readjusted to reflect the population in the vicinity of any of the facilities. Fourth, a disparate impact analysis is conducted which compares the impact on the affected community to nonaffected communities to determine whether there is a disparity. Finally, OCR determines whether the disparity is significant. If a significant disparate impact is found during this preliminary inquiry, the State agency will be contacted for comment. This initial notice to the agency provides an opportunity for a rebuttal of the finding of discrimination, as well as for a proposal to mitigate or justify the impact. If the State agency justifies the impact, OCR must still consider whether "it can be shown that there is an alternative that would satisfy the stated interest while eliminating the disparate impact." A failure to rebut or sufficiently justify the impact will prompt OCR to send the State agency a preliminary notice of noncompliance. If the State agency does not correct the violation, OCR will issue a formal determination of noncompliance. If the State agency still does not comply, OCR may terminate federal funding and consider referring the matter to the 2710 Department of Justice. Informal resolution of complaints is also encouraged. The process described in the Interim Guidance is applicable to new permit applications, permit renewals, and modifications which increase adverse impacts on the populations of concern. Complaints based on modifications that reduce the adverse impact or that have a neutral impact will most likely be dismissed. The effect of the Interim Guidance is to shift the ultimate burden of proof to the permitting agency. State Action NJDEP has also been active in environmental justice issues since 1998, when NJDEP established the Environmental Equity Task Force and the Environmental Advisory Council to 271 1 integrate environmental justice concerns into the permitting process. Communities can petition the Task Force to address environmental justice concerns. If the petition is granted, the Task Force will meet with members of the community and assist in formulating and implementing an action plan through means including direct communication with State agencies. The Advisory Council advises the NJDEP Commissioner on environmental justice issues.

2710 2711

42 U.S.C.

9 2000d-1 (1996).

The Task Force, Advisory Council, and the initial NJDEP environmental equity policy were established by administrative orders issued by the NJDEP commissioner. NJDEP Administrative Order 1998-15 (Task Force and Advisory Council); NJDEP Administrative Order 2000-01 (environmental equity policy). In 2004, Executive Order 96, Environmental Justice (Feb. 18, 2004), established a statewide environmental justice policy and confirmed the roles of the Task Force and Advisory Council.

Other Environmental Laws and Programs South Camden Cement Litigation In South Camden Citizens in Action v. NJDEP, the plaintiffs, a community organization and individual residents, alleged NJDEP discriminated against them by issuing Clean Air Act permits and other approvals to a cement grinding plant located in a neighborhood with a predominantly minority population where there were already a number of existing contaminated sites and industrial facilities. The plant operator intervened as a defendant. 2712

In an important 2001 decision, the Third Circuit reversed the District of New Jersey's order granting the plaintiffs' request for a preliminary injunction, holding that in accordance with 2713 the Supreme Court's decision in Alexander v. Sandoval, the plaintiffs could not pursue disparate impact claims under EPA's Title VI regulations, but were limited to pursuing intentional discrimination claims under Title VI itself. More recently, in proceedings on remand before the United States District Court for the District of New Jersey, the court granted summary judgment in favor of NJDEP and the plant operator on the plaintiffs' Title VI claims, finding that although the siting of the plant and grant of permits more heavily impacted minorities than nonminorities, this was at best evidence of a disparate impact, while evidence of intentional 2714 discrimination was lacking. 6.0

PUBLIC RECORDS THE OPEN PUBLIC RECORDS 6.1 The Open Public Records Act (OPRA), was adopted in 2001 and went into effect on July 7, 2002. OPRA enhances and accelerates public access to State and local government records.

ACT^^^^

The statute broadly defines "government records" that must be disclosed to any person, subject to the exemptions set forth in the statute. Records subject to disclosure include not only paper 2716 documents, but data processed and information stored electronically. The requesting party must identify the specific record or records sought. OPRA does not require the disclosing agency to conduct research and produce the information obtained. A request may also be denied 2717 if it is so broad that responding would substantially disrupt operations. OPRA requests must

2712 2713 2714 2715 2716 2717

South Camden Citizens in Action v. NJDEP, 274 F.3d 771 (3d Cir. 2001). 532 U.S. 275,121 S. Ct. 1511, 149 L. Ed. 2d 517 (2001). South Camden Citizens in Action v. NJDEP, Civil Action NO. 01-702 (FLW) (D.N.J. Mar. 3 1,2006). N.J.S.A. 47: 1A-1 et seq. N.J.S.A. 47:lA-1.1.

Id.;MAG Entertainment, LLC v. Div. of Alcoholic Beverage Control, 375 N.J. A.2d 1067 (App. Div. 2005).

Super. 534, 546-47, 868

New Jersey Environmental Law Handbook be made in writing and can be made on a form provided by the agency. A government entity that receives an OPRA request must respond to it within 7 business days by making the requested records available for inspection and copying (maximum fees are specified in the statute), stating when they can be made available, or providing an explanation as to why they are unavailable or 2718 exempt from disclosure. NJDEP maintains a comprehensive OPRA webpage at http://www..nj.gov/dep/opra and provides on-demand access to many of the most-requested documents. OPRA requests may be submitted to NJDEP by mail, hand delivery, or online. NJDEP receives and processes more OPRA requests than all other State agencies combined. OPRA requests directed to NJDEP and to other State and local authorities can be a useful source of environmental and other information.

N.J.S.A.47:lA-5.

CHAPTER XI INSURANCE COVERAGE FOR ENVIRONMENTAL LIABILITY INTRODUCTION Every hazardous substance liability is a potential insurance claim. New Jersey courts have been leaders nationwide in analyzing the applicability of comprehensive general liability policies to environmental liabilities. Coverage has been found in a wide variety of circumstances. However, there are numerous pitfalls on the path to coverage, and each hazardous substance liability must be carefully examined in the context of the company's specific insurance program so that an informed coverage determination can be made and, if appropriate, coverage can be effectively pursued. The comprehensive general liability (CGL) insurance policy, under most circumstances, will be the policy that may afford coverage. Broadly speaking, the CGL policy provides insurance coverage for claims by third parties for property damage or bodily injury resulting from an occurrence, which is defined in relevant part as an "accident, including continuous or repeated exposure to conditions . . . ." For example, where there is a claim by the government against a company to clean up contaminated groundwater, the government constitutes the third party, and groundwater contamination is the property damage. The process that produced the contamination is an occurrence. As a result, the cleanup of contaminated groundwater is potentially covered by insurance, dependent upon the defenses that will be raised by the insurance carrier. 1.0

WHAT IS A LEGAL OBLIGATION? The CGL policy provides coverage for legal obligations. A formal complaint brought by the government or another third party is easily recognized as a potential legal obligation. However, cleanup costs are often the result of a much less formal process. Indeed, many policyholders will endeavor to proceed with a cleanup voluntarily in an effort to avoid the issuance of a formal complaint by the government. It is well settled in New Jersey that formal complaints are not necessary to trigger 2719 2720 insurance coverage. vandals opened an oil storage tank causing oil to flow into In Lansco,

2.0

2719

2720

See, e.g., Summit Assocs., Inc. v. Liberty Mut. Fire Ins. Co., 229 N.J. Super. 56,550 A.2d. 1235 (App. Div. 1988); CPS Chemical Co., Inc. v. Continental Ins. Co., 222 N.J. Super. 175, 536 A.2d 311 (App. Div. 1988); Broadwell Realtv Servs.. Inc. v. Fidelitv & Cas. Co., 218 N.J. Super. 516, 528 A.2d 76 (App. Div. 1987), overruled. in part by Morton Int'l, Inc. v. General Accident Ins. Co., 134 N.J. 1, 629 A.2d 831 (1993). Lansco, Inc. v. Devartment of Envtl. Prot., 138 N.J. Super. 275, 350 A.2d 520 (Ch. Div. 1975), affd, 145 N.J. Super. 433,368 A.2d 363 (App. Div. 1976).

New Jersey Environmental Law Handbook

a river. An inspector from the New Jersey Department of Environmental Protection (NJDEP) told the policyholder that it was liable under the Spill Compensation and Control Act for the 272 1 cleanup. Although the policyholder proceeded with the cleanup without any further formal or informal government action, the court found that the cleanup was covered by the policyholder's 2722 2723 CGL policy. This issue was later addressed in two Appellate Division decisions. In those cases, the policyholder undertook a cleanup with only minimal government involvement. The appeals court found that where the policyholder was strictly liable for the cleanup pursuant to statute, a legal obligation existed that potentially was insured even absent a governmental directive or commencement of a third-party action imposing liability on the policyholder. Based in part on Metex and Summit Associates, the Appellate Division has now held that cleanup costs 2724 incurred pursuant to ISRAJECRA are covered. Even under these favorable decisions, an issue of volunteerism remains. A court may find that a policyholder, while acting appropriately to remedy contamination, did so wholly voluntarily. As a consequence, given the absence of any legal obligation, no insurance coverage would exist. Typically, New Jersey courts confronted with environmental insurance claims have found that the policyholder was legally obligated to perform the cleanup and therefore coverage 2725 was not foreclosed. Strong public-policy concerns underlie these decisions. In general, courts appear disinclined to penalize companies that respond proactively to contamination by depriving them of insurance coverage as a volunteer. Similarly, courts do not want to create a disincentive to perform prompt cleanups by allowing coverage only where the policyholder awaits a cleanup order from the State.

PROPERTY DAMAGE AND THE OWNED-PROPERTY EXCLUSION The standard CGL policy excludes from coverage property that is owned or occupied by the policyholder or is in the policyholder's "care, custody, or control." This exclusion, the so cdled "owned-property exclusion," bars coverage for the removal or remediation of 2726 contaminated soil from the policyholder's own property. As our courts have pointed out, 3.0

Id. at 279,350 A.2d 520. Id. at 284,350 A.2d 520. Summit Assocs., 229 N.J. Super. at 56, 550 A.2d. 1235; Metex Corn. v. Federal Ins. Co., 290 N.J. Super. 95,675 A.2d 220 (App. Div. 1996). Crest-Foam Corn. v. Aetna Ins. Co., 320 N.J. Super. 509,520-21,727 A.2d 1030 (App. Div. 1999). Metex Corn., 290 N.J. Super. at 115-16,675 A.2d 220. Broadwell Realtv, 218 N.J. Super. at 528-29,528 A.2d 76.

Insurance Coveragefor Environmenta 1 Liability liability policies provide coverage for damage to property of others; they are not intended to 2727 Nonetheless, courts have wrestled with the applicability of this provide first-party coverage. exclusion and, in many instances, have held in favor of the policyholder even when 2728 contamination originates at an owned facility. Policyholders should not underestimate the scope of potentially available coverage by erroneously assuming that contamination is not covered unless it extends beyond the property boundaries. In Lansco, the court held that the river was property belonging to a third party, i.e.,the State in its parens patriae capacity, and contamination of the river with oil constituted third-party 2729 Since Lansco, New Jersey courts have repeatedly and uniformly applied property damage. that same theory to find that contamination of natural resources, such as groundwater, constitutes 2730 third-party property damage. Indeed, a series of New Jersey Appellate Division decisions have held that the owned-property exclusion does not apply to groundwater, even where present 273 1 directly under the policyholder's facility. These decisions further held that measures taken on the policyholder's property to remedy or 'prevent groundwater contamination do not 2732 necessarily fall within the owned-property exclusion. For example, wells placed on the policyholder's property to control and remedy groundwater contamination potentially constitute 2733 covered damages. Arguably this same logic should apply when soil removal is required because the soil is a source area for groundwater contamination. However, the Appellate Division recently held that removal of contaminated soil does not involve third-party damage 2734 where the groundwater is not contaminated.

Id. at 528,528 A.2d -

76; see also Summit Assocs., 229 N.J. Super. at 64,550 A.2d 1235.

State of N.J.. Dev't of Envtl. Prot. v. Signo Trading Int'l. Inc., 130 N.J. 5 1, 612 A.2d 932 (1992); Diamond Shamrock Chems. Co. v. Aetna Cas. & Sur. Co., 258 N.J. Super. 167,609 A.2d 440 (App. Div. 1992). Lansco, 138 N.J. Super. at 283,350 A.2d 520. Signo Trading, 130 N.J. at 51,612 A.2d 932; Ohaus v. Continental Cas. Ins. Co., 292 N.J. Super. 501, 679 A.2d 179 (App. Div. 1996); Strand v. North River Ins. CoL,292 N.J. Super. 476, 679 A.2d 166 (App. Div. 1996); Reliance Ins. Co. v. Armstrong World Indus.. Inc., 292 N.J. Super. 365,678 A.2d 1152 (App. Div. 1996); Ray Petroleum Co. v. Insurance Co. of N. Am., No. A-1315-85T1, slip op. (N.J. App. Div. Nov. 26, 1986). Sagendorf v. Selective Ins. Co. of Am., 293 N.J. Super. 81,97,679 A.2d 709 (App. Div. 1996); Ohaus, 292 N.J. Super. at 508,679 A.2d 179; Morrone v. Harlevsville Mut. Ins. Co., 283 N.J. Super. 41 1,419-20,662 A.2d 562 (App. Div. 1995). See Lansco, 138 N.J. Super. at 282,350 A.2d 520. See Sayendorf, 293 N.J. Super. at 86,98,679 A.2d 709. Muralo Co. v. Emulovers Ins., 334 N.J. Super. 282, 299, 759 A.2d 348 (App. Div. 2000), certif. denied, 167 N.J. 632,772 A.2d 934 (Feb. 27,2001).

New Jersey Environmental Law Handbook In the absence of groundwater or other natural resource contamination, soil contamination at the policyholder's facility is within the owned-property exclusion. The New Jersey Supreme Court has held that remedial measures taken on the policyholder's own property in the absence of any third-party damage are excluded from coverage by the owned-property exclusion, even if the on-site conditions created an imminent and immediate threat to off-site 2735

property.

The Court pointedly observed that general liability policies afford insurance 2736

coverage for actual damage to third-party property, not the threat of such damage. Where both on- and off-site damage is implicated, courts must allocate damages between the two in 2737 order to determine the amount of coverage owed to the policyholder. Recently, the Appellate Division held that an insurer is required to reimburse its policyholder for only that portion of 2738 defense costs allocable to contamination of non-owned property. Fact issues permeate insurance coverage determinations, particularly with respect to the remediation of soil contamination that has resulted in groundwater contamination. Policyholders frequently argue that it was necessary to remove contaminated soils only because the soil contaminants continued to be flushed into the groundwater, and, therefore, the soil removal should be deemed a cost of remedying groundwater contamination. Insurers posit the opposite, i.e., that soil removal was necessary simply because the authorities wanted to remedy that specific pollution. This issue should remain a fact-sensitive battleground for the foreseeable future.

THE POLLUTION EXCLUSION Beginning in approximately 1973, standard form CGL insurance policies added what is 2739 now known as the pollution exclusion. Although this provision broadly excluded coverage 4.0

Signo Trading, 130 N.J. at 63,64,612 A.2d 932. Id. Universal-Rundle Corn. v. Commercial Union Ins. Co., 319 N.J. Super. 223, 241, 725 A.2d 76 (App. Div. 1999). Muralo, 334 N.J. Super. at 293, 759 A.2d 348. An insurer has a duty to defend its policyholder against lawsuits by third-parties alleging liability that falls within the coverage afforded by the policy; this duty is separate and distinct fiom the duty to indemnify for a covered loss. In New Jersey, the obligation to defend converts to an obligation to reimburse the policyholder for defense costs where allegations against the policyholder include both covered and non-covered claims or where the question of insurance coverage will not be determined in the underlying matter. Id.at 289; see also Burd v. Sussex Mut. Ins. Co., 56 N.J. 383,267 A.2d 7 (1970). In 1986, the pollution exclusion clause was amended to prohibit coverage for pollution far more broadly. This so called "absolute pollution exclusion clause" has been upheld to deny coverage for environmental liability in a wide variety of circumstances. See Nunn v. Franklin Mut. Ins. Co., 274 N.J. Super. 543, 547, 644 A.2d 1111 (App. Div. 1994). However, in recent years, the New Jersey Supreme Court has made clear

Insurance Coverage for Environmental Liability for contamination unless caused by a "sudden and accidental" discharge of contaminants, for the past 25 years courts around the country have been divided on the interpretation of these terms. New Jersey was among the first States to hold that "sudden and accidental" meant unexpected and unintended, and that the pollution exclusion clause was no more than a reiteration of the 2740 Other States, though, held that the term "sudden" has a temporal occurrence definition. component that precludes coverage for gradual pollution. In 1994, in the landmark case of Morton International, Inc. v. General Accident Insurance 274 1 Rejecting Co. of America, the New Jersey Supreme Court opted for a different approach. many years of jurisprudence by the State's trial and appellate courts, the Supreme Court first found that "sudden and accidental" unambiguously had a temporal connotation. After a review of the regulatory filings and other drafting-history documents with respect to the exclusion, the Court next found that the insurance industry had misrepresented the scope and impact of the exclusion to the Department of Banking and Insurance; and, under the doctrine of regulatory estoppel, the insurance industry could not assert a different meaning for the exclusion than that 2742 represented to the regulators. As a result, only the term "accidental" is given effect in New Jersey, and the exclusion acts to bar coverage solely for the intentional discharge of known 2743 contaminants. This potentially dispositive difference in the interpretation of "sudden and accidental" has motivated both policyholder and insurer to institute litigation - where it otherwise might not have occurred - to gain application of the law most favorable to its position. As a consequence, courts have been faced with numerous questions concerning choice of law. In 1993, the New Jersey 2744 Supreme Court held that New Jersey law applies to sites located in New Jersey. More recently, that Court applied a multi-factored analysis that favored the law of the hazardous waste site when a non-New Jersey insured seeks coverage in New Jersey for a site located outside of

that this exclusion bars coverage only for "traditional" environmental exposures, not indoor exposures to contaminants or other hazardous substances. See Nav-Hs v. Selective Ins. Co. of Amer., 183 N.J. 110, 869 A.2d 929 (2005). 2740 2741 2742

2743 2744

See Broadwell, 218 N.J. Super. at 533,528 A.2d 76. 134 N.J. at 1,629 A.2d 831. The Third Circuit recently upheld Morton with respect to an insurance company that had not been in existence at the time the representations were made to the Department. Essex Chemical Corn. v. Hartford Accident & Indem. Co., Docket No. 00-1839 (3d Cir. Mar. 7,2001). Morton, 134 N.J. at 29,629 A.2d at 831. Gilbert Svruance Co. v. Pennsvlvania Mfrs.' Ass'n Ins. Co., 134 N.J. 96,98,629 A.2d 885 (1993).

New Jersey Environmental Law Handbook 2745

In a scenario not directly addressed by the Supreme Court, the Third Circuit has New Jersey. held that because of New Jersey's paramount interest in protecting its residents from the misrepresentations of the insurance industry and in protecting the integrity of the regulatory process, New Jersey law should apply when a New Jersey insured seeks coverage for a non-New 2746

Jersey site.

THE OCCURRENCE ISSUE The occurrence definition provides that property damage or bodily injury is covered so long as it is "unexpected and unintended fiom the standpoint of the insured." This phrase has created a major battleground between policyholders and insurers over both factual and legal issues. Many insurers now believe that in order to defeat coverage, they must prove that their policyholders intentionally polluted. The effort by insurers to prosecute their own policyholders has greatly intensified the emotional climate between the parties, rendering settlement more difficult. This issue has also become a main reason why environmental insurance litigation can be both long and costly. Since the "expectedhntended" language essentially functions as an 2747 Insurance companies take exhaustive exclusion, the burden of proof lies with the insurer. discovery, both formal and informal, in an attempt to uncover "smoking guns" concerning the policyholder's past practices. This inquiry includes complete document discovery and numerous depositions of personnel, from plant maintenance workers to plant managers. Two interrelated legal issues affect the outcome of this battle. First, as a general proposition, companies purchase insurance to protect themselves from their own negligence and incompetence; coverage is to be denied only if the policyholder actually intended to cause 2748 damage. However, factfinders, whether judges or juries, look suspiciously upon alleged polluters. Under New Jersey law, a judge will try these cases unless the damages are 2749 liquidated. It is often difficult for a policyholder to show that actions undertaken many years ago, which may look reprehensible under the microscope of today's standards, were wholly

5.0

HM Holdings, Inc. v. Aetna Cas. & Sur. Co., 154 N.J. 208, 214-15, 712 A.2d 645 (1998); see also Unisys Corn. v. Insurance Co. of N. Am., 154 N.J. 217,712 A.2d 649 (1998); Pfizer, Inc. v. Emvlovers Ins., 154 N.J. 187,712 A.2d 634 (1998). General Ceramics Inc. v. Firemen's Fund Ins. Cos., 66 F.3d 647,652 (3d Cir. 1995). Id. CPC Int'l. Inc. v. Hartford Accident & Indem. Co., 316 N.J. Super. 351, 370-71 720 A.2d 408 (App. Div. 1998). In re Environmental Ins. Declaratorv J. Actions, 149 N.J. 278,295, 693 A.2d 844 (1997); Insurance Co. of N. Am. v. Anthonv Amadei Sand & Gravel. Inc., 162 N.J. 168,178-79,742 A.2d 550 (1999).

Insurance Coverage for Environmental Liability 2750

Insurers also vigorously argue that evidence of past practices innocent at the time. demonstrates that the policyholder "should have known" that it was causing pollution. Recently, 2751 policyholders have been successfbl on this issue at trial. Related to this inquiry is the legal issue of whether a subjective or an objective standard should be used to evaluate the policyholder's intent. Insurance companies argued for an objective approach - if the circumstances were such that an ordinary, reasonable person would have known of the probability of damage, the policyholder should be denied coverage. In the New Jersey Supreme Court reaffirmed that a subjective standard will be applied, that -Morton 7 is, a policyholder who intentionally performs an act that causes damage nonetheless may be 2752 Put entitled to coverage so long as the policyholder did not intend the resultant damage. another way, the question becomes whether the policyholder's "purposeful discharge of waste 2753 The Morton was accompanied by knowledge that the waste included a 'known pollutant."' Court realized that few policyholders would admit to a subjective intent to pollute and, therefore, the factfinder would need to judge subjective intent from objective factors. Despite the adoption of a subjective standard, the Court acknowledged that in the presence of certain factors, "exceptional circumstances" might exist sufficient to find the policyholder responsible for the damage. In other words, the policyholder's subjective intent to pollute will be assumed as a 2754 matter of law and, thus, insurance coverage for ensuing damages will be denied. An insurance company, unable to proffer sufficient direct evidence of its policyholder's subjective intent to pollute, may attempt to establish the existence of exceptional circumstances to objectively prove that intent. Courts will undertake a case-specific analysis to determine the 2755 Since Morton and its progeny, no insurer has successfully proved applicable standard. "exceptional circumstances" against an insured in any reported decision.

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2753 2754

2755

CPC Int'l, 316 N.J. Super. at 376,720 A.2d 408.

See In re Environmental Ins., 149 N.J. at 278, 693 A.2d 844, citing to Ciba-Geigy Corp. v. Liberty Mut. Ins. Co., (Law Div. 1998); Morton, 134 N.J. at 1, 629 A.2d 831; CPC Int'l, 316 N.J. Super. at 351, 720 A.2d 408. Morton, 134 N.J. at 46; see also Carter-Wallace. Inc. v. Admiral Ins. Co., 154 N.J. 312,330-31, 712 A.2d 1116 (1998); Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165,181-83,607 A.2d 1255 (1992). Universal-Rundle, 319 N.J. Super. at 235,725 A.2d 76. Morton, 134 N.J. at 86, 629 A.2d 831; Carter-Wallace, 154 N.J. at 330,712 A.2d 1116; CPC Int'l, 316 N.J. Super. at 373,720 A.2d at 408. Morton, 134 N.J. at 86,629 A.2d 831; Universal-Rundle, 319 N.J. Super. at 236,725 A.2d 76.

New Jersey Environmental Law Handbook

TRIGGER ISSUES If damage takes place during the period in which an insurance policy is in effect, that 2756 policy is said to be "triggered." Because pollution is often the result of a lengthy, complex process, significant issues arise as to which insurance policies in effect during that process are triggered and, thus, should respond to the policyholder's loss. Numerous and diverse answers have emerged as courts across the country have grappled with this problem. Some courts have held that damage does not exist until it is first manifested or discovered. Other courts have held that damage only occurs at the time when the contaminants are discharged into the environment. Still other courts have maximized potential insurance coverage by finding that pollution is a continuous, injurious process as contaminants leach from the soil into the groundwater and then 2757 move in a plume into previously uncontaminated areas. Accordingly, all policies in effect from the time of initial exposure to discovery of the damage are jointly and severally liable to provide coverage. The New Jersey Supreme Court addressed the issues of trigger and allocation in Owens2758 Illinois. Inc. v. United Insurance Co., a case involving asbestos-related bodily injury and property damage. There, the Court not only held that the continuous-trigger theory applied in 2759 both instances, it strongly implied that the same theory would apply in environmental cases. 2760 Later, in Carter-Wallace. Inc. v. Admiral Ins. Co., the Court expressly applied the continuous 2761 trigger to an environmental property damage claim. The continuous-trigger approach is factdriven, and the policyholder must meet its burden of demonstrating both when the injurious process commenced and that it was continuous. Further issues may also arise as to whether the same amount of damage occurred in each year. As an example, DDT primarily pollutes the soil on impact, with only limited vertical migration thereafter. Even though continuous damage does occur, the insurers in later years would assert that because of the differential rates of migration, the insurer at the time of disposal should bear most of the liability. 6.0

Owens-Illinois. Inc. v. United Ins. Co., 138 N.J. 437,447, 650 A.2d 974 (1994). See id. at 449-52,650 A.2d 974. -138. N.J. at 437,650 A.2d 974. Id. at 455,650 A.2d 964. 154 N.J. 312,712 A.2d 1116 (1998). See* Astro Pak Cow. v. Fireman's Fund. Ins. Co., 284 N.J. Super. 491,499-500, 665 A.2d 1113 (App. Div. 1995); Morrone v. Harlevsville Mut. Ins. Co., 283 N.J. Super. 41 1,662 A.2d 562 (App. Div. 1995).

Insurance Coveragefor Environmental Liability

In 2002, the New Jersey Supreme Court adopted a bright line rule for triggering coverage 2762 In Quinc~,the Court rejected the argument when toxic waste is first deposited in a landfill. that policyholders should be burdened with representing scientific proof regarding the date 2763 Rather, the Court held contaminants were most likely to have leached into the groundwater. that "the natural and unavoidable progression of the original dumping, which must be deemed the 'exposure' [ ] is the starting point of an 'occurrence' that triggers coverage . . . The property, that is, the landfill, was contaminated as soon as the toxic material was dumped, for that is when 2764 Similar arguments may be the toxins began their damaging journey through the ground . . ." made with respect to the use of on-site waste disposal facilities such as settling ponds and holding basins.

ALLOCATION ISSUES As the foregoing demonstrates, New Jersey law is well settled in favor of allowing insurance coverage for environmental liabilities. Insurers no longer attempt to avoid coverage based on late notice, pollution exclusion, owned property, or expectedintended grounds. Instead, insurers now focus on minimizing the amount of the loss that must be paid. As such, courts currently grapple with issues regarding how to allocate a loss that took place over a 40year time period. In particular, courts must determine which insurers must pay, how much must be paid, and whether the policyholder should be held accountable for deductibles, self-insured retentions, missing policies, insolvencies, availability of insurance, and the like. During the past decade, the New Jersey Supreme Court has weighed in on several critical 2765 the Court addressed the allocation issues. First, in Owens-Illinois, Inc. v. United Ins. Co., issue of whether "joint and several" or "pro rata" was the appropriate method of allocating loss among multiple triggered policies. Under a "joint and several" allocation method, the policyholder is entitled to select one or more insurance policies to satisfy its claim. Thereafter, all insurers within the trigger period are left to seek contribution andor pay indemnity for their respective "fair shares" of the loss. Typically, under a joint and several allocation model, a policyholder is not required to participate in the allocation process, even if there are coverage gaps s,missing policies and/or insolvent insurers. Conversely, under a "pro rata" allocation method, both insurers and policyholders participate in the allocation process such that each party pays its "fair share" of the loss. 7.0

2762 2763 2764 2765

Ouincv Mut. Fire. Ins. Co. v. Borough of Bellmar, 172 N.J. 409,799 A. 2d 499 (2002). Id. at 430,799 A.2d 499. Id. at 43 1,799 A.2d 499. 138 N.J. 437,650 A.2d 974 (1994).

New Jersey Environmental Law Handbook In Owens-Illinois, the Court rejected "joint and several" as an appropriate allocation 2766 method. However, the Court also rejected a "pure" per year proration scheme that many 2767 other courts had adopted. Instead, the Court created a pro rata allocation scheme that was 2768 driven by both the time on the risk and the degree of risk assumed. As an example, if a policyholder had coverage of $100,000 in the first year and $900,000 in the second year, and faced a liability of $100,000, the first year would be allocated $10,000 and the second year $90,000. While the Court had hoped that its mathematical formula would allow parties to quickly and easily resolve disputes, it foreshadowed "we do not expect that this case will be the 2769 'last word' in this area." It took only 4 years for the next allocation dispute to reach the Supreme Court. In Carter2770 Wallace, Inc. v. Admiral Ins. Co., the Court clarified that in applying the mathematical formula, one should consider the policyholder's total limits each year, and not just the primary 277 1 layer. In other words, any allocation of liability must take into account all excess insurance in effect during the trigger period. The practical effect of this decision is that the years in which a policyholder has greater excess coverage will be allocated a greater percentage of the liability costs. As a result, some excess policies may be triggered before the primary policy in another year is exhausted. In the last several years, the Supreme Court has continued to elucidate the finer points of its modified pro rata allocation method. In 2003, the Court was confronted with the question of how "noncumulation" provisions contained in some CGL policies interface with a pro rata 2772 allocation scheme. In Spaulding Composites Co., Inc. v. Aetna Cas. & Sur. Co., an insurer argued that its non-cumulation provision limited its liability to one policy limit, even though multiple, successive policies had been issued by the insurer. Holding that such a provision "thwarted the pro rata allocation method for dividing responsibility among multiple triggered

2766 2767 2768 2769 2770 2771 2772

Id.at 466,650 A.2d 974. Id. at 475,650 A.2d 974. Id. at 475-76. Id. at 478,650 A.2d 974. 154 N.J. 312,712 A.2d 1116 (1998). Id. at 326-27,712 A.2d 116; see also Universal Rundle, 319 N.J. Super. at 245,725 A.2d 76. Spaulding Comuosites Co., Inc. v. Aetna Cas. & Sur. Co., 176 N.J. 25,819 A2d 410 (2003).

Insurance Coveragefor Environmental Liability

policies in environmental exposure cases," the Court refused to enforce the clause on public 2773 policy grounds. In 2004, the Court addressed the critical question of whether policyholders may be required to satisfy multiple deductibleslself-insured retentions in a multiple-year trigger period. 2774 In Benjamin Moore & Co. v. Aetna Cas. & Sur. Co., the Court held that policyholders were required to satisfy full deductibles/retentions for each triggered year before they are entitled to 2775 indemnity from the insurer. In so holding, the Court rejected the policyholder's request for 2776

an equitable middle ground by pro rating the deductibleslretentions over the trigger period. The practical impact of Beniamin Moore is tremendous because it may preclude recovery of any "real" insurance where a policyholder suffers a seven-digit loss but must satisfy multiple sixdigit deductibles. Other allocation issues continue to percolate at the Appellate Division level. For 2777 example, in Champion Dyeing & Finishing Co., Inc. v. Centennial Insurance Co., the Appellate Division addressed the appropriate end date of the allocation construct. In that decision, the Court was compelled to resolve the paradox created by the continuous trigger running until the alleged property damagehodily injury was discovered versus the reality that after 1985, long-term coverage for environmental liabilities was not available for policyholders 2778 In essence, insurers sought to saddle policyholders with the lion's share of to purchase. responsibility by prolonging the allocation period into years where the absolute pollution exclusion precluded coverage for environmental claims and rendered the policyholder "bare" in those years. In Champion, the Appellate Division held that the end date for allocation purposes occurs when the policyholder is no longer in a position to buy insurance to protect against the

2773

2775

2776 2777 2778

Id. at 44. -

Id. at 105-108,843 A.2d 1094. Id. 355 N.J. Super 262,810 A.2d 68 (2002). In recent years, the insurance industry has taken another foray into the environmental insurance market. However, these new environmental policies are typically written on a claims-made basis and therefore are not amenable to the continuous trigger theory that applies to CGL policies and allows policyholders to collect multiple years' worth of limits.

New Jersey Environmental Law Handbook 2779

subject risk. Importantly, the Court relied heavily upon the expert testimony proffered by the 2780 policyholder to demonstrate the non-availability of environmental insurance after 1985. The Appellate Division has also addressed how to account for prior settlements vis-8-vis an allocation scheme. In Universal-Rundle, the court determined that any insurance company that settles with its policyholder will be deemed to have settled for its allocable share, and a policyholder may not recoup the unpaid balance of that share from any other settling or non2781

settling insurer. Moreover, the Appellate Division has held that defense costs are to be allocated in the same manner as indemnity costs, that is, the insurance company's time on the risk and the degree of risk assumed, taking into account both primary and excess policies in 2782 effect during that time period. As a practical matter insurers must recognize that they are at some risk if they provide coverage at any time during the entire process of contamination. As a result, settlements can often be structured around the joint participation of all carriers. The involvement of a number of insurers can promote settlement since no one insurer need assume the entire liability.

PRACTICAL CONSIDERATIONS The most important practical considerations for a policyholder are the early recognition and identification of potential environmental insurance claims and the submission of timely notice to the appropriate insurance companies. It is of critical importance to give notice early and broadly under all potentially triggered policies. Under New Jersey law, late notice of a claim to an insurer will only foreclose coverage if the insurer has been appreciably prejudiced, a 2783 burden that has proven difficult for the insurers to meet. However, in other States, including 2784 New York, late notice of a claim can be fatal even without a showing of prejudice. Notice brings with it the dilemma of choosing between settlement or litigation. Whether a policyholder chooses to commence litigation against its insurer will frequently hinge upon whether the policyholder fears that the insurer will sue first in an unfavorable jurisdiction. For example, assume that a policyholder is headquartered in New Jersey and had disposed of waste 8.0

Id. at 277,810 A.2d 68. -

Id.at 272-75, 810 A.2d 68. Universal-Rundle, 319 N.J. Super. at 245,725 A.2d 76. Id. at 245-46,725 A.2d 76; see also Muralo, 334 N.J. Super. at 294-95,759 A.2d 348. Coover v. Government Emdovees Ins. Co., 51 N.J. 86,90,237 A.2d 870 (1968); see also Sa~endorf,293 N.J. Super. at 93, 679 A.2d 709; Solvents Recoverv Sew. v. Midland Ins. Co., 218 N.J. Super. 49, 54, 526 A.2d 1112 (App. Div. 1987); cf. Ohaus, 292 N.J. Super. at 512,679 A.2d 179. Commercial Union Ins. Co. v. International Flavors & Fragrances. Inc., 822 F.2d 267,271 (2d Cir. 1987).

Insurance Coveragefor Environmental Liability in New York. New York and New Jersey law are diametrically and dispositively opposed on the issues of late notice and interpretation of the pollution exclusion clause. An insurance company receiving notice of such a claim may decide to sue in New York in the hope of gaining the benefit of that State's law. Strategically, then, the policyholder may feel obligated to initiate its claim for coverage by bringing a lawsuit in New Jersey. Such choice-of-forurnlchoice-of-law issues have led to greater contentiousness in the handling of environmental claims, and increased costs to all parties as a result of litigation. However, if choice-of-law considerations are not of paramount importance, the avoidance of litigation and early settlement of these claims remain possible. This is particularly true in New Jersey, where the law favors the policyholder. In order for the policyholder to make an informed decision, it must weigh the extent of its damages, the number of insurers, and the nature and scope of the insurers' legal and factual defenses to coverage. Only then will the policyholder be able, first, to determine whether settlement is possible and, second, to formulate the terms upon which any settlement should be conditioned.

CHAPTER XI1 WORKPLACE SAFETY AND HEALTH INTRODUCTION Establishing a safe and healthful working environment requires every employer and every employee to make safety and health a priority. Employees frequently do not understand the dangers present on the job site, or worse, are not motivated to act in a safe manner. In addition, supervisors can, and sometimes do, inadvertently send the message that the end (i.e., good productivity numbers) justifies the means (i.e., unsafe work practices). Added to these factors are the complexity and sheer number of regulations, both existing and new, which make managing workplace safety and health increasingly more difficult. In New Jersey, when it comes to compliance with, and enforcement of, occupational safety and health laws, private sector employers are subject primarily to the jurisdiction of the federal Occupational Safety and Health Administration (OSHA). However, and as discussed more fully below, the State does have a somewhat limited role in compliance assistance, a program funded in large part by OSHA. THE OCCUPATIONAL SAFETY AND HEALTH ACT (OSH ACT) 1 . The OSH Act was enacted in 1970 "to assure so far as possible every working man and woman in the Nation safe and healthful working conditions and to preserve our human 2785 resources." In general, the OSH Act requires employers to provide employees a workplace "free from recognized hazards that are causing or are likely to cause death or serious physical 2786 harm." The OSH Act sets forth 13 measures designed to encourage employers and employees to reduce workplace hazards, including safety and health standards development and promulgation, recordkeeping requirements, research and development programs, training programs, employer and employee responsibilities for compliance, and enforcement . 2787 mechanisms. 1.0

APPLICABILITYICOVERAGE Nearly every privately employed working man and woman in the United States comes 2788 within the OSH Act's jurisdiction. The OSH Act applies to most private employers, although 2.0

2785 2786 2787 2788

29 U.S.C.

9 651(b).

29 U.S.C. 9 654(a)(l). 29 U.S.C.

5 651(b).

See 29 U.S.C.

$5 652-653.

Workplace Safety and Health employers with ten or fewer employees are exempt from certain provisions (e.g., inspections and 2789 some paperwork requirements) of the regulatory provisions. With the exception of the United States Postal Service, the Act does not apply to federal, State, or local governments in their 2790 capacity as employers. However, the Act does require federal agencies, other than the Postal Service, to establish and maintain a comprehensive occupational safety and health program 2791

consistent with the promulgated standards. The OSH Act defines an employer as any "person engaged in a business affecting commerce who has employees." Because the purpose of a business is to "affect commerce," the definition encompasses nearly every private employer in the United States. This definition does not include the self-employed, immediate members of farming families, the United States, not 2792 including the United States Postal Service, or any State or political subdivision of a State. In order to facilitate compliance with OSHA's myriad requirements, employers typically establish a safety committee or have designated human resources personnel responsible for safety and health (a safety officer). The safety committee or safety officer is usually charged with developing policies that include such items as which job functions require personal protective equipment or medical monitoring, and developing procedures such as the prompt and accurate reporting of on-the-job accidents. Without management's commitment, however, even the best designed safety and health program will be destined to fail. That being said, even well-trained, full-time safety and health professionals or safety committees are sometimes confounded by OSHA's regulatory requirements. When this situation arises, it is important for the employer to recognize it, and to seek the consultation of an expert in the field. By doing so, the employer may be able to avoid the OSHA citation maze and, more importantly, better protect its work force. 2.1 OSH ACT - KEY PROVISIONS The OSH Act divides rulemaking, enforcement and adjudication powers between two agencies, and delegates research and development efforts to a third agency.

2789 2790 2791 2792

29 C.F.R.

8 1904.1.

29 U.S.C.

4 652(5).

29 U.S.C.

8 668(a); 29 C.F.R. 8 1960.

29 U.S.C. 8 652(5); see also OSHA, Publ'n No. OSHA 2056-07R, All About OSHA: Occuvational Safetv and Health Administration 4 (2003), available at http://www.osha.gov/Publications/osha2056.pdf [hereinafter "All About OSHA"].

New Jersey Environmental Law Handbook OSHA. The Occupational Safety and Health Administration is within the Department of 2793 Labor and has rulemaking and enforcement powers. OSHRC. The Occupational Safety and Health Review Commission is an independent 2794 agency created to adjudicate OSHA violations. NIOSH. The National Institute of Occupational Safety and Health was created to conduct research, experiments, and demonstrations relating to occupational safety and health, training

programs to educate personnel in the OSH Act requirements, and to develop and establish recommended Occupational Safety and Health Standards. NIOSH is within the Department of 2795 Health and Human Services. 2.2 PROMULGATION OF STANDARDS AND REGULATIONS There are no standards established by the OSH Act. Rather, the Act gives OSHA the 2796 authority to promulgate standards and regulations that ensure workplace safety and health. OSHA regulations take two general forms. The regulations may provide goal-oriented standards, leaving the employer to formulate safety procedures to address its particular hazards and 2797 operations, such as the Process Safety Management standard, or may be prescriptive, providing mandatory procedures and requirements, such as the fall protection standard (i.e., 2798 Walking-Working Surfaces standard). OSHA HAS ISSUED STANDARDS FOR A WIDE VARIETY OF WORKPLACE 2.3 HAZARDS, INCLUDING:

. .

2793 2794 2795 2796 2797 2798 2799 2800 2801 2802

Toxic substances;2799 Harmful physical agents;2801 Electrical hazards;2803

see 29 U.S.C. $$ 651-666. See 29 U.S.C. $5 651-652,659-661. See 29 U.S.C. $$669-671. 29 U.S.C. $ 651(b)(3). 29 C.F.R. $ 1910.119. 29 C.F.R. $5 1910.21-.30. 29 C.F.R. $ 1910.1000. 29 C.F.R. jj 1910.120. 29 C.F.R. $8 1910.1001-.1096. 29 C.F.R. $ 1910.1030.

2803

29 C.F.R. $8 1910.301-.399.

2804

29 C.F.R. $5 1910.155-.165.

.

Hazardous waste;2800

.

Infectious diseases;2802 Fire protection;2804

Workplace Safety and Health

.

. . .

Fall hazards;2805 Personal Protective Equipment;2807 Hearing hazards;2809 Compressed gases;2811 and

. . .

Hazardous materials;2806 Machine hazards;2808 Confined spaces;2810 Process Safety Management.2812

THE GENERAL DUTY CLAUSE The OSH Act also has a "general duty" clause that requires employers to "furnish each of [their] employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to [their] 2813 employees." The OSH Act's general duty clause expands the reach of OSHA, and allows the agency to cite employers for violations not specifically addressed by a promulgated standard or regulation.

2.4

THE OSH ACT & NEW JERSEY The OSH Act provides for and encourages states to develop and operate their own worker 2814 2815 When a State safety and health programs. OSHA approves and monitors State plans. develops it own program, it can establish only establish requirements that are at least as effective 2816 as the requirements adopted by OSHA. In other words, a State cannot ease the existing 2817 regulatory burden imposed by OSHA, which operates as the regulatory floor.

3.0

29 C.F.R.

$5

1910.21-.30.

29 C.F.R. $3 1910.101-.Ill. 29 C.F.R.

$8 1910.132-.138.

29 C.F.R. $4 1910.211-.244. 29 C.F.R. $ 1910.95. 29 C.F.R. (j 1910.146. 29 C.F.R.

$5

1910.101, .169.

29 C.F.R. $ 1910.119. 29 U.S.C. $ 654(a)(1). 29 U.S.C. $ 667(b)(ll). See 29 U.S.C. $ 667.

29 U.S.C. $ 667(c)(2). See 29 U.S.C. (j 667.

New Jersey Environmental Law Handbook New Jersey has an approved program for its public sector employees only. Private sector 2818 employees in New Jersey therefore remain subject to the jurisdiction of OSHA. 3.1 NEW JERSEY WORKER HEALTH AND SAFETY ACT AND PUBLIC EMPLOYEES OCCUPATIONAL SAFETY AND HEALTH ACT The New Jersey Legislature has enacted two statutes that govern the occupational safety and health of its workers: (1) the Worker Health and Safety Act (WHSA) - which applies to 2819 private-sector employees, and (2) the Public Employees' Occupational Safety and Health Act (PEOSHA) - which, alternatively, applies to employees of the State and municipal 2820 governments. 3.1.1 Worker Health and Safety Act Since New Jersey does not have a federally approved State plan for the occupational safety and health of its private workers, it is subject to the enforcement authority of the federal 2821 However, the State of New Jersey has demonstrated a strong commitment to OSH Act. collaborate with the federal government on the issue of worker safety and health. OSHA regulations provide that States may enter into cooperative agreements with OSHA 2822 The State of to collaborate in providing consultation services to private-sector employers. New Jersey, under its WHSA, has chosen to participate in this joint effort to achieve increased 2823 Entitled "New Jersey Department of occupational safety and health in the private sector. Labor and Workforce Development's On-Site Consultation Service,'' the program is entirely voluntary and is primarily targeted to companies with approximately 250 employees or less. The State also has a Small Business Focus initiative, whereby companies with 50 employees or less are afforded heightened priority in the scheduling of consultation appointments. The program is implemented by New Jersey Department of Labor and Workforce Development, Division of Public Safety and Occupational Safety and Health employees who are trained in occupational 2824 safety and health issues, and specifically, OSHA standards. Furthermore, the consultation

See OSHA, State Occupational Safety and Health Plans, http://www.osha.gov/fso/osp/index.html visited Apr. 27,2006). N.J.S.A.

$5 34:6A-1 to -24.

N.J.S.A.

$8 34:6A-25 to -50.

See 29 U.S.C. (j 667. 29 C.F.R. (j 1908.1. See N.J.S.A. (j 34:6A-13. See Occupational Safety and Health On-Site Consultation Program, http://www.nj.gov/labor/lsse/lsonsite.html (last visited May 22, 2006).

(last

Workplace Safety and Health 2825

The federal government reimburses New program is implemented at no cost to employers. 2826 Jersey 90 percent for allowable costs. For the most part, under New Jersey's program, consultation services are provided at the employer's worksite, but occasionally assistance may also be provided off-site (i.e., by telephone, written correspondence, or at designated consultation project offices). Significantly, the evaluation and consultation is limited to the scope of the employer's request, including only those portions of the facility that the employer desires. The consultants assess the safety and health of the workplace during a "walk-through," while accompanied by a representative of the organization. It is the fhnction of a consultant to identify specific hazards in the workplace both present and potential - and to advise the employer with respect to improving health and 2827 safety and remedying any specific hazards that may exist. Since the consultation program operates independently of any OSHA enforcement activity, the discovery of any hazards by the consultant will not result in any penalties or 2828 2829 However, in the event there exists a situation that poses an "imminent danger," citations. the employer must take immediate corrective and/or protective actions to protect all employees. 2830 In other circumstances, where "serious violations" exist under standards set forth by the OSH Act, the employer and the consultant must together agree upon a reasonable plan, and a schedule, to correct the violation. In the event that the employer fails to correct any imminent dangers or 2831 Many employers do serious violations according to the plan, OSHA enforcement will occur. not participate in the consultation program for this reason.

Id. 29 C.F.R. 1908.3(b). Occupational Safety and Health On-Site Consultation Program, http://www.nj.gov/labor/lsse/lsonsite.html (last visited May 22,2006). All About OSHA, at 32. Imminent dangers are those "which are such that a danger exists which could reasonably be expected to cause death or serious physical harm immediately or before the imminence of such danger can be eliminated through the enforcement procedures otherwise provided by [the Act]." 29 U.S.C. •˜ 662(a). A "serious violation shall be deemed to exist in a place of employment if there is a substantial probability that death or serious physical harm could result from a condition which exists, or from one or more practices, means, methods, operations, or processes which have been adopted or are in use, in such place of employment unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of the violation." 29 U.S.C. •˜ 666(k). Occupational Safety and Health On-Site Consultation Program, http://www.nj.gov/labor/lsse/lsonsite.html (last visited May 22,2006).

New Jersey Environmental Law Handbook

3.1.2 Common Law Claims Although OSHA has exclusive jurisdiction for the enforcement of federal safety and 2832 health standards, the OSH Act neither creates nor preempts State common law rights. Accordingly, under the WHSA, New Jersey employers have a "general duty" to provide a safe 2833 However, because of the comprehensive nature of the OSH and healthful work environment. 2834 common Act, the regulations promulgated by OSHA, and the Workers' Compensation bar, law claims brought by employees against their employer for violating the State's general duty clause are infrequently filed. To the extent that such claims are made, they usually arise in the context of a wrongful discharge lawsuit, where the plaintiff alleges that helshe was fired for 2835 or seeks injunctive relief. For example, one New reporting dangerous work conditions, Jersey court ordered an employer to restrict the smoking by employees to non-work areas 2836 The court noted that because the employeelcomplainant was allergic to cigarette smoke. failure to do so would violate the employer's common law duty to provide a safe and healthful work environment. 3.1.3 Public Employees' Occupational Safety and Health Act (PEOSHA) The New Jersey PEOSHA governs the occupational safety and health of public workers 2837 2838 Its in New Jersey. PEOSHA received initial approval fiom OSHA on January 11, 2001. purpose is to provide for the development and enforcement of occupational safety standards for 2839 and to encourage employers and employees in their public employees throughout the State, 2840 efforts to improve the working environment. PEOSHA is administered by two departments: (1) the New Jersey Department of Health and Senior Services - which investigates complaints regarding health hazards in the workplace -

See 29 U.S.C.

5 667.

See N.J.S.A. $34:6A-3. New Jersey Workers' compensation law precludes employees from maintaining separate common law tort actions against their employers, unless the employer intentionally injured an employee. N.J.S.A. •˜ 34:15-8.

See, e.g., Kozar v. AT&T, 923 F. Supp. 67, 71-72 (D.N.J. 1996) (noting that the OSH Act cannot "completely preempt" plaintiffs state law claims). Shimv v. N.J. Bell Tel. Co., 145 N.J. Super. 5 16 (Ch. Div. 1976).

See N.J.S.A. $9 34:6A-25 to -50. Notice of Initial Approval Determination, 66 Fed. Reg. 2265 (Jan. 11, 2001) (to be codified at 29 C.F.R. 1956, Subpart G). N.J.S.A.

3 34:6A-29.

N.J.S.A. •˜ 34:6A-3 1.

Workplace Safety and Health and (2) the New Jersey Department of Labor - which investigates complaints regarding safety 2841 It is the Department of Labor, however, that is ultimately hazards in the workplace. 2842 responsible for the administration and enforcement of the Act.

RECORDKEEPING, REPORTING, AND POSTING REQUIREMENTS OSHA has promulgated regulations requiring employers to maintain records of work2843 related injuries and illnesses, and to report certain injuries and fatalities directly to OSHA. All employers covered under the OSH Act are subject to these recordkeeping requirements, unless specifically exempted, such as employers with 10 or fewer employees or those in a listed 2844 OSHA has also promulgated low-hazard industry, i.e. finance, real estate, insurance, etc. regulations concerning the posting of certain information (i.e., the OSHA poster) in the 2845 workplace so that employees understand their rights and obligations under the OSH Act. Exempt employers must still comply with the poster requirement and, of course, all applicable OSHA standards.2u6 4.1 RECORDKEEPING AND ACCESS TO RECORDS OSHA requires that all recordable occupational illnesses and injuries be recorded on 2847 OSHA Forms 300 and 301 within seven (7) calendar days of their occurrence. An injury or illness is recordable where it is a work-related new case and meets either the general recording 2848 An employer must review this criteria or specific case criteria provided within the regulation. information and prepare an annual summary at the end of each calendar year summarizing the information from the OSHA 300 log. The summary is prepared on OSHA Form 300A, and must be certified by a company executive and posted by February 1 of the year following the covered 2849 year and remain posted until April 3 0. 4.0

N.J.S.A.$ 34:6A-30(e). See N.J.S.A.$ 34:6A-29. 29 C.F.R. $ 1904. 29 C.F.R. $9 1904.1-.2. 29 C.F.R. $ 1903.2.

Id. 29 C.F.R. $ 1904.29. 29 C.F.R. $5 l904.4-. 11;see also All About OSHA, at 18. 29 C.F.R.

5 1904.32.

New Jersey Environmental Law Handbook Employers in low-hazard industries, including the following, are exempt fiom OSHA's 2850 recordkeeping requirements: Retail trade, except for Standard Industrial Classification (SIC) 52-54, building materials, general merchandise stores, and food stores, Finance, Insurance, Beauty and barber shops, Food and liquor stores, Medical offices and laboratories, Real estate agents and managers, and Service industries, except hotels and other lodging places, repair services, amusement and recreation services, and health services.

4.2

RETENTION AND DISCLOSURE OSHA Forms 300, 300A and 301 must be maintained for at least five ( 5 ) years following 2851 Copies of these records must be -provided to the end of the year to which they relate. 2852 employees, their authorized representative(s), and to authorized government representatives. Records relating to employee exposures to hazardous substances, and any medical records 2853 Employers generated or obtained by the employer, must be maintained for thirty (30) years. 2854 are also required to permit employee access to these types of records. Although an OSHA compliance officer may ask to review these records, employers should not disclose personally identifiable employee medical information unless and until, the employee whose medical record 2855 is the subject of the request has authorized such disclosure, the OSHA staff or physician 2856 consults with the employer's physician concerning a safety or health issue, a written access 2857 order has been presented and posted, or a subpoena for the records has been issued by a court

See 29 C.F.R. Cj 1904, Appendix A to Subpart B. 29 C.F.R. Cj 1904.33. 29 C.F.R. Cj$ 1904.35, .40. 29 C.F.R. Cj 1910.1020(d)(i). Three very limited exceptions to record retention are allowed.

Id.

29 C.F.R. Cj 1910.1020(e). 29 C.F.R. Cj 1913.10(d)(4)(i). 29 C.F.R. Cj 1913.10(d)(4)(ii). 29 C.F.R. Lj 1910.1020(e); 29 C.F.R. LjLj 1913.10(d)-(e). The written access order and accompanying cover letter must be posted for at least 15 working days. 29 C.F.R. 5 1910.1020(e)(3)(ii).

Workplace Safety and Health of competent jurisdiction. Failure to do so may subject the employer to a civil suit. Employers should consult with counsel when questions persist regarding the issue of when employee medical records can be disclosed. 4.3 REPORTING (FATALITY/HOSPITALIZATION)REQUIREMENTS There are two instances that require direct reporting to OSHA. Employers are required to report the occurrence of a work-related death of any employee or a work-related incident that results in the in-patient hospitalization of three or more employees. Any such report must be made within eight (8) hours of the occurrence or the employer becoming aware of the occurrence, and must be done orally, by telephone or in person, to the nearest OSHA Area 2858 Office, or by using the OSHA toll-free number, 1-800-321-OSHA. 4.4 POSTING REQUIREMENTS Employers are obligated to post a notice (the OSHA poster or OSHA Form 2203) that informs employees of their rights and obligations under the OSH Act, and directs employees to ask their employer, or to contact the nearest OSHA Area Office, for assistance and information, 2859 The former OSHA poster, including obtaining copies of the OSH Act and specific standards. OSHA Form 2203, was replaced in 2001 with OSHA's "plain language" version of the OSHA poster, OSHA Form 3165. OSHA Form 3165 can be obtained free of charge from OSHA or it can be downloaded fiom OSHA's web-site. If obtained from the web-site, the OSHA poster 2860 There is must be printed on paper that is at least 8 % by 14 (legal size), with 10 point type. currently no requirement to replace the old poster with the new one. As discussed above, employers must also post a copy of the totals fiom the previous year's summary of occupational injuries and illnesses. Additionally, copies of all OSHA citations for violations of standards or regulations must be posted near or at the location of the 2861

alleged violation for 3 working days, or until the violation(s) is abated, whichever is longer.

ENFORCEMENT The OSH Act authorizes OSHA to conduct workplace inspections to determine whether employers are complying with the standards and regulations promulgated by the agency. The OSH Act also charges OSHA with enforcing the general duty clause. 5.0

2858 2859

2860 2861

29 C.F.R.

8 1904.39.

29 C.F.R. •˜ 1903.2. 29 C.F.R. 5 1903.2(a)(3). 29 C.F.R. $ 1903.16.

New Jersey Environmental Law Handbook INSPECTIONS Inspections are usually unannounced and are conducted by an OSHA compliance it is against the law to alert the employer in advance of the officer(s) ( c o ) . ~ ~In~ fact, ~ 2863 inspection, except under certain limited circumstances, such as imminent danger situations. The OSH Act authorizes, at reasonable times, in a reasonable manner, and within reasonable time limits, COs to enter any business covered by the Act to inspect and investigate all pertinent conditions, such as machines, structures, and materials, and to question any 2864 employer, agent, or employee during an inspection. 5.2 SEARCH WARRANTS 2865 OSHA is not authorized to conduct warrantless inspections without valid consent. Thus, employers may demand that OSHA obtain a search warrant before entering the premises. To obtain a warrant, however, OSHA need only show "administrative" probable cause, which is a very low threshold, and can be satisfied by an employee complaint, or a higher than average 2866 incidence of lost workdays, etc. There are, of course, perceived disadvantages to requiring OSHA to obtain a warrant prior to entering the facility or premises. Many believe that employers who require OSHA to obtain a search warrant prior to an inspection are subject to heghtened scrutiny during the inspection, or that such a demand diminishes their image in the eyes of the CO or their employees because it makes them look as though they have something to hide. Additionally, employers that refuse entry without a warrant are not entitled to the compliance assistance 2867 provided by the State. Finally, if the employer consents to a warrantless inspection, the employer can at any 2868 time ask the CO to cease the inspection, leave the facility or premises, and obtain a warrant. 5.3 INSPECTION PROCESS There are four stages to an OSHA inspection:

5.1

2863

29 C.F.R. 5 1903.6;see 29 U.S.C.

2864

29 U.S.C. $9 657(a)-(b).

2865 2866

Marshall v. Barlow's. Inc., 436 U.S. 307,98 S. Ct. 1816,56 L. Ed. 2d 305, (1978). Id.; see also Nat'l Eng'e. & Contracting. Co. v. Occupational Safety & Health Admin. Review Comm'n, 45 -F.3d 476 (D.C. Cir. 1995).

2867 2868

5 666(f).

29 C.F.R. 1908.7. 29 C.F.R. 1903.4(a).

Workplace Safety and Health Presentation of credentials. All OSHA COs carry U.S. Department of Labor 1. credentials bearing his or her photograph and a serial number. When a CO arrives at a business, he or she will display the official credentials and ask to meet the appropriate employer 2869 representative. Employers should always insist on seeing the COs credentials, and verify the credentials by phoning the nearest OSHA Area office. CO should expect this and not get upset when this is done. Obviously, if a CO were required to wait an unreasonable amount of time while his or her credentials were being verified, the CO might become suspicious. While the C 0 7 s credentials are being verified, the employer should alert its inspection team (the team should have already been designated either by the safety officer or safety committee long before an inspection begins) to report to a pre-determined and appropriately sized conference room or office. 2. Opening conference. The CO will explain how the facility was selected for an inspection (e.g., employee complaint, programmed inspections, etc.) and the scope of the 2870 inspection (e.g., wall-to-wall inspection or a partial inspection). Generally, if the inspection arises because of an employee complaint or is a follow-up inspection, it will be a partial inspection, focusing on the subject of the complaint or the prior violation. If the CO observes non-compliance that is in "plain view" during a partial inspection however, the CO can legally expand the scope of the inspection to include that activity. Conversely, programmed inspections, which are inspections aimed specifically at high-hazard industries, are generally comprehensive and inclusive and can last weeks and sometimes months, depending on the size of the facility. The walk around. After the opening conference, the CO and the inspection team 3. will proceed through the establishment, inspecting work areas for potentially hazardous working conditions. During the walk around, the CO may take samples, photographs, and interview 2871 employees. These interviews may be done privately, outside the earshot of the employer. It is important to note, however, that the right to such privacy belongs to the employee, not the OSHA CO. Accordingly, if the employee waives his or her right to such privacy, the employer may observe the interview. 4. Closing conference. At the conclusion of the inspection, the CO discusses with the employer the safety and health violations observed, and may indicate any violations for 2872 which a citation and proposed penalty will be recommended. During the closing conference, 2869 2870 2871 2872

29 C.F.R. •˜ 1903.7(a).

Id. 29 C.F.R.

5 1903.7(b).

29 C.F.R.

5 1903.7(e).

New Jersey Environmental Law Handbook

the CO does not indicate any proposed penalties. Only the OSHA Area Director has that authority, and only after having received a full report from the CO. 5.4 WHISTLE-BLOWER PROTECTION The OSH Act gives employees the right to seek safe and healthful work conditions 2873 without fear of reprisal. These rights include voicing concerns to an employer, a union, or to OSHA about job safety or health hazards. In fact, OSHA has made it simple for employees to file complaints. An employee can file a complaint by phone, mail, or fax to the nearest OSHA 2874 Employers are Area office or by completing and submitting OSHA Form 7 on-line. specifically prohibited from "retaliating" against an employee for filing a complaint or raising safety and health concerns to an employer. This means the employee may not be demoted, fired, transferred, or have seniority or other earned benefits stripped as a result of filing a complaint or 2875 undertaking any other activity permitted by the OSH Act. 5.5 CITATIONS 2876 Citations must be issued within 6 months of the ins~ection. OSHA sends out 2877 The employer must post a copy of the citation at or near the place citations by certified mail. where the violation occurred for three (3) days or until the violation is abated, which ever is 2878 Employers have 15 working days to notify OSHA as to whether they will contest the longer. 2879 Employees may similarly notify OSHA in order to contest the citation or proposed penalty. 2880 If no contest is filed, reasonableness of the period of time allowed for violation abatement. the citation, proposed penalty, and abatement date will become a final order of OSHRC, binding 2881 If an employer is unsure of whether to contest a citation, the employer on the employer. should seek legal counsel. A

29 C.F.R. •˜ 1977. OSHA, How to File a Complaint with OSHA, http://www.osha.gov/as/opa/worker/complain.htm U.S.C. 657(f); All About OSHA, at 7. See 29 U.S.C. 5 660(c); 29 C.F.R.

1977; All About OSHA, at 7-9.

29 C.F.R. •˜ 1903.14(a). 29 U.S.C.

659(a).

29 C.F.R. •˜ 1903.16. 29 C.F.R.

3 1903.17(a); 29 U.S.C. 659(a).

29 C.F.R. (j 1903.17(b); 29 U.S.C. 29 U.S.C.

9 659(a).

3 659(c).

see 29

Workplace Safety and Health

5.6

VIOLATIONS AND PENALTIES Under the OSH Act, OSHA may cite the following violations and propose the following penalties: Other-than-serious. A violation that has a direct relationship to safety and health, but probably would not cause death or serious physical harm. A penalty of up to $7,000 may be 2882 assessed for such violations. Serious. A violation where there is a substantial probability that death or serious physical harm could result and the employer knew or should or have known of the hazard. A 2883 penalty of up to $7,000 may be assessed for such a violation. Willful. A violation that the employer intentionally and knowingly commits or one committed with plain indifference to the law. Penalties of up to $70,000 may be assessed for a 2884 In addition the U.S. Department of willful violation with a minimum penalty of $5,000. Justice may bring criminal charges against an employer that willfully violates a standard that results in the death of an employee. Convictions are punishable by fine or imprisonment, or both. Imprisonment may be for up to six (6) months, though a conviction after a first conviction may be up to one (1) year. Fines may be up to $250,000 for an individual or $500,000 for a 2885 corporation. Repeat. A violation of any standard, regulation, or order where, upon re-inspection, a substantially similar violation is found and the original citation has become a final order. 2886 Penalties for a repeat violation can bring a fine of up to $70,000 for each such violation. Failure-to-abate. Failure to correct a violation may bring a penalty of up to $7,000 for 2887 each day that the violation continues beyond the prescribed abatement date.

2882 2883 2884 2885

2886 2887

29 U.S.C. $ 666(c); see also All About OSHA, at 26-27. 29 U.S.C.

$8 666(b), (k); see also All About OSHA, at 26-27.

29 U.S.C. $ 666(a); see also All About OSHA, at 26-27. 29 U.S.C. $9 666(e); 18 U.S.C. $ 3571; All About OSHA, at 26-27. The alternative fine provision also allows alternative fines based upon pecuniary gain or loss. 18 U.S.C. $ 3571(d). 29 U.S.C. 5 666(a); see All About OSHA, at 26-27. 29 U.S.C. $ 666(d); see also A11 About OSHA, at 26-27.

APPENDIX A ENVIRONMENTAL CRIMINAL PROVISIONS AND PENALTIES 1

Statute

Citations

Conduct

Act or Harm Caused

Penalty

CODE^

2C: 17-2(a)(l)

Purposeful or Knowing

Explosion, release, or abandonment

Second degree

CODE

2C: 17-2(a)(l)

Purposeful or Knowing

Widespread injury or damage

Second degree

CODE

2C: l7-2(a)(2)

Purposeful or Knowing

Reportable discharge

Second degree

CODE

2C: l7-2(a)(2)

Purposeful or Knowing

Release or abandonment

Second degree

CODE

2C: l7-2(a)(2)

Reckless

Reportable discharge

Third degree

CODE

2C: 17-2(a)(2)

Reckless

Release or abandonment

Third degree

CODE

2C: 17-2(b)

Reckless

Widespread injury or damage

Third degree

CODE

2C: l7-2(~)

Reckless

Widespread injury or damage

Fourth degree

CODE

2C: 17-2(d)

Reckless or Negligent

Failure to mitigate injury or damage

Fourth degree

CODE

2C: 17-3(a)

Purposeful or Knowing

Improper use of fire or explosives

Thirdlfourth degree

SWMA~

13:lE:-9(g)

Knowing

Unauthorized waste generation, transport, or disposal

Third degree & a fine of $50,000 $100,000

1

A crime of the first degree is punishable by a fine of up to $200,000, a prison term of 10 to 20 years, or both. A crime of the second degree is punishable by a fine of up to $150,000, a prison term of 5 to 10 years, or both. A crime of the third degree is punishable by a fine of up to $15,000, a prison term of 3 to 5 years, or both. A crime of the fourth degree is punishable by a fine of up to $10,000, a prison term of not more than 18 months, or both. N.J.S.A.2C:43-3, et sea.; N.J.S.A.2C:43-6(a). It should be noted that pursuant to N.J.S.A.2C:43-4(a), a court can treble the fines imposed upon a corporation. 2

3

Code of Criminal Justice. Solid Waste Management Act.

1

Statute

Citations

Conduct

Act or Harm Caused

Penalty

SWMA

13:1E-9(g)

Knowing

False or misleading statements

Third degree & a fine of $50,000 $100,000

SWMA

13:lE-9(h)

Reckless

Unauthorized waste generation, transport, or disposal

Fourth degree

SWMA

13:1E-901)

Reckless

False or misleading statements

Fourth degree

Waste manifest violation

Fourth degree

SWMA

MWMA~

13:1E-48.20(g)

Purposeful or Knowing

Unauthorized medical waste storage or disposal

Third degree & a fine of $50,000 $100,000

MWMA

13:1E-48.20(g)

Purposeful or Knowing

Improper medical waste treatment

Third degree & a fine of $50,000 $100,000

MWMA

13:1E-48.20(g)

Purposeful or Knowing

False or misleading statements

Third degree & a fine of $50,000 $100,000

MWMA

13:1E-48.200

Reckless or Negligent

Unauthorized medical waste storage or disposal

Fourth degree

MWMA

13:11-28.20(h)

Reckless or Negligent

Improper medical waste treatment

Fourth degree

MWMA

13:1E-28.20(h)

Reckless or Negligent

False or misleading statements

Fourth degree

MWMA

13:lE-48.20(i)

N/A

Transport to an unauthorized facility

Fourth degree

Manifest violation

Fourth degree

MWMA

4

Intentional conduct is not a requirement, thus these provisions arguably impose strict liability. Medical Waste Management Act.

Statute

Citations

Conduct

Act or Harm Caused

Penalty

1

Fourth degree

MWMA

Purposeful, Use of unauthorized Knowing, or facility Reckless

CWEA~

Purposeful or Knowing

CWEA

Purposeful, Violation of act with Knowing, or significant adverse effect Reckless

CWEA

Purposeful, False statement or violation Third degree & a fine of $5,000 Knowing, or of act Reckless $75,000 (per day of violation)

CWEA

Negligent

False statement or violation Fourth degree & a fine of $5,000 of act $50,000 (per day of violation)

WCA~

Intentional

Ocean dumping

Third degree

APCA'

Purposeful or Knowing

Violation of act

Third degree

APCA

Reckless

Violation of act

Fourth degree

RPA~

NIA

Violation of act

Fourth degree

6

Permit violation with serious injury or risk

First degree & a fine of $50,000 $250,000 ($200,000 $1,000,000 for Corporations) Second degree & a fine of $25,000 $250,000 (per day of violation)

Clean Water Enforcement Act. The penalties set forth under the Clean Water Enforcement Act, which amended the Water Pollution Control Act, only apply to violations occurring after July 1, 1991. N.J.S.A. 58: 10a-10(h).

7

8

9

Water Pollution Control Act. Air Pollution Control Act. Radiation Protection Act.

1

Statute

Citations

Conduct

Act or Harm Caused

Penalty

RPA

26:2D-77

N/A

Unauthorized radon activities

Third degree

RPA

26:2D-77

N/A

Disclosure violation

Third degree

SWUC1O

48:13A-12

Knowing

Violation of act

Fourth degree & a fine of $50,000 ($100,000 per day violation for corporations) or both.

SWUC

48:13A-12.2

Knowing

Use of vehicle to transport hazardous waste or fresh food

Third degree and (1) a fine of $7,500 for the first offense, $10,000 for the second Offense (per day of violation) & 90 days community service, and (2) 6 12 month driver's license suspension.

FWPA1'

13:9B-21(f)

Willful or Negligent

Violation of act

Fourth degree up to $25,000 fine for first offense.

10

11

Solid Waste Utility Control Act. Freshwater Wetlands Protection Act.