Environmental UPDATE - Special Edition
The Site Remediation Reform Act ("SRRA") remains the most significant change in recent years to environmental law in New Jersey. Since its enactment in 2009, the New Jersey Department of Environmental Protection ("NJDEP") has been working toward full implementation of the Act set to occur by May 7, 2012, when the remediation of essentially all contaminated sites will be overseen by private-sector Licensed Site Remediation Professionals ("LSRPs"). Over the last year, NJDEP has engaged stakeholders to participate in the development of new rules and guidance to implement the new LSRP program.
This issue of Riker Danzig's Environmental Update reviews recent developments, including the NJDEP's rule proposal issued this past August to amend or replace all significant regulations affecting site remediation. The issue also addresses the new significance and use of guidance documents developed by NJDEP with stakeholder involvement. Future issues of Environmental Update will address the work of the Site Remediation Professional Licensing Board and other developments as they occur.
The NJDEP rule proposal occupies more than 150 fine-type pages in the New Jersey State Register and is expected to be adopted by May 7, 2012. Its significance to site remediation projects would be difficult to overstate. The proposal includes major amendments, repeals and new rules, including the administrative procedures and requirements for remediation as set forth in the Administrative Requirements for Remediation of Contaminated Sites ("ARRCS"), as well as technical objectives, methods and requirements as set forth in the Technical Requirements for Site Remediation ("Tech Regs"). The proposal would apply the ARRCS rules and Tech Regs to most remediation projects. It also amends the Industrial Site Recovery Act ("ISRA") rules, the Underground Storage Tank ("UST") rules and the Discharge Prevention rules to conform these programs to the SRRA. Significant elements of each of these rules are addressed in this Environmental Update. If you have any questions that are not addressed, please contact the Riker Danzig environmental attorney who is involved in your project.
Who is a Person Responsible for Conducting Remediation?
The proposed regulations create and expand potential exposures to liability for parties deemed responsible for conducting remediation. This is accomplished by expanding the already broad category of "persons responsible for conducting the remediation" ("PRCR") and placing an affirmative obligation on these parties to comply with the LSRP program. A PRCR is a defined term. Nevertheless, NJDEP added a new applicability section in the proposed rules expanding the categories of persons required to comply with the regulations and thus expanding the categories of PRCR. Additionally, the proposed regulations may expand the potential liability of each PRCR by stating that if there is more than one PRCR for a site, each party is jointly and severally liable for compliance.
The existing definition of PRCR includes persons who are "in any way responsible" under the Spill Act. Proposed Section 1.4 expands this definition by identifying specific categories of such persons including, each owner of property where the discharge occurred at the time of discharge and each subsequent owner of the property until a final remediation document (i.e., a Response Action Outcome or "RAO") is filed with the Department. This expansion to subsequent owners runs counter to how the courts in New Jersey have applied the Spill Act's liability provisions to interim property owners, that is, owners who purchased the property after the discharge occurred and then sold the property prior to discovery of the contamination. Under the courts' interpretation, an interim owner who did nothing to exacerbate the environmental conditions at the site cannot be held liable under the Spill Compensation and Control Act ("Spill Act") if the discharge of hazardous substances did not take place during its ownership of the property. See, e.g., White Oak Funding v. Winning, 341 N.J. Super 294 (App.Div.). certif denied 170 N.J. 209 (2001). Thus, the question arises as to whether the Department's proposed regulation is ultra vires in this respect because it inappropriately extends responsibility for remediation to those who would not otherwise have liability under the Spill Act.
Another category of persons who are charged with responsibility for complying with the rules are "statutory permittees." A "statutory permittee" is a person who becomes an owner, operator or tenant at a site where a remedial action permit has been issued. Thus, the remedial obligation extends beyond the party who is responsible for contamination to any later purchaser, operator or tenant of such a property while at that property.
The rule proposal also states that the PRCR at the time an RAO is invalidated must comply with the obligations of the chapter. This provision is insufficiently precise because it does not specify who the PRCR is at the time the RAO is invalidated. For example, the invalidation may occur years after the RAO was issued and the original PRCR may no longer be a viable entity; thus, the property owner at the time the RAO is invalidated may be the PRCR. Additionally, if there is a remedial action permit associated with the RAO, then the current owner is a PRCR as a statutory permitee. If the current owner is considered a PRCR under any scenario when an RAO is invalidated, a question arises as to how that would impact the owner's statutory defense under the Spill Act as an innocent purchaser who relied on the RAO. Thus, parties who may not otherwise have Spill Act liability may nonetheless be considered a PRCR under the proposed rules.
New Tech Regs, New Guidance, Little Change
In its summary of the proposed repeal and replacement of the Technical Requirements for Site Remediation (the "Tech Regs"), the NJDEP states its objective of shifting away from prescriptive regulatory requirements to performance-based goals that allow more flexibility in addressing contamination and potential exposure pathways. In order to accomplish this, the NJDEP has proposed to reduce the prescriptive requirements of the Tech Regs and has published a new series of technical guidance documents that contain the Department's directions concerning how to achieve the performance-based goals set forth in the proposed regulations.
The proposed Tech Regs thus contain many fewer prescriptive requirements than the existing regulations but articulate many performance-based goals. For example, the proposed regulations for performing a Preliminary Assessment or Site Investigation are far less prescriptive than the existing Tech Regs. Further, in the Remedial Investigation phase, for example, the proposed Tech Regs state that in appropriate circumstances the delineation of soil contamination can be based solely on post-remedial action sampling. Avoiding prescriptive delineation requirements and allowing prompt remedial action can reduce the time and cost to clean up contaminated sites.
Despite the improvement in the Tech Regs in a number of areas, many of the prescriptive requirements simply have been shifted into technical guidance documents, with which the remediating party is required to comply. The result is that prescriptive approaches to investigation and remediation remain. For example, the requirements for remedial investigations in the proposed Tech Regs set forth the goal of collecting a sufficient number of samples to delineate contamination to remediation standards using appropriate sampling and analytical methods. However, the NJDEP's guidance documents set forth detailed descriptions as to sample locations and numbers, sampling methods and screening methods. Moreover, the proposed rules for analytical requirements, differ little from current regulations and, in fact, impose new specific requirements, such as the use of canister-based collection for air samples, the analysis of certain compounds in potable water samples, and the analysis of a set list of compounds in vapor intrusion samples.
Where the proposed Tech Regs are less prescriptive, certain standard practices also are likely to remain the same as under the current Tech Regs. For example, whereas the current Tech Regs list specific items that must be reviewed when evaluating the site history for a Preliminary Assessment, the proposed Tech Regs simply require "a diligent search of all documents that are reasonably likely to contain information related to the site." Yet, the items listed in the current Tech Regs are arguably "documents that are reasonably likely to contain information related to the site" and, indeed, are listed in Draft Preliminary Assessment Guidance provided for stakeholder review as documents that "may assist" in the "diligent inquiry into the operational and ownership history of a site." Moreover, potential purchasers of property would be well advised to continue to review all of these items to establish and preserve an innocent purchaser defense under the Spill Compensation and Control Act.
With respect to remedial actions, the proposed regulations remain prescriptive in a number of areas - indeed, the NJDEP acknowledged as much in the rule summary. In particular, the proposed regulations set forth presumptive remedies (other than removal or treatment to an unrestricted use standard) for properties that will be used for residences, schools and child care centers. These may include various combinations of barriers, buffers, demarcations and inspections. The proposed regulations do, however, allow for the use of an alternative remedy where the presumptive remedies are impractical or the alternative remedy would be equally protective, provided that the NJDEP approves the proposed alternative.
Taken as a whole, the proposed Tech Regs provide more flexibility in the remediation process, but because of the requirement to comply with technical guidance -- much of which remains prescriptive -- the changes fall short of developing a performance-based site remediation program. More flexibility in the application of technical requirements, fewer mandates to adhere to prescriptive, uniform requirements and greater use of independent professional judgment by LSRPs would better promote performance-based remediation and the redevelopment of contaminated sites.
Mandatory and Regulatory Time Frames March 2012 is Fast Approaching, Don't Let a Deadline Put You Into "Direct Oversight"
A fundamental aspect of the Site Remediation Reform Act is the enactment of a new "affirmative obligation" to remediate contaminated property and to perform this remediation in accordance with new, mandatory timeframes. Current NJDEP rules contain a number of significant "regulatory" and "mandatory" timeframes that are applicable to site remediation cases. In its rule proposal, the agency has updated the existing timeframes and added a fairly complex scheme of new regulatory and mandatory timeframes. Failure to perform remediation to meet the regulatory deadlines may give rise to penalties of $20,000 per day the timeframe is violated; failure to meet mandatory timeframes subjects the remediating party to "Direct Oversight" by the NJDEP. Direct Oversight is an onerous enforcement program in which the remediating party must escrow funds for the NJDEP to use to direct an LSRP to remediate the contaminated site. Direct Oversight is surely something to be avoided and thus compliance with regulatory and mandatory timeframes becomes all the more important.
The regulatory timeframes proposed by the NJDEP include timeframes to submit an initial Receptor Evaluation Report and, for sites subject to ISRA and UST rules, a Preliminary Assessment/Site Investigation Report within one year of the date that the initial obligation to perform remediation arises. Remedial Investigations and Remedial Actions at all contaminated sites would be subject to a number of new, regulatory timeframes, which are determined based upon the environmental media affected. The NJDEP has proposed additional regulatory timeframes to address specific issues occurring at a site, such as groundwater contamination, an Immediate Environmental Concern ("IEC"), a Vapor Intrusion Condition or the presence of Light Non-Aqueous Phase Liquid ("LNAPL"). Regulatory timeframes also are proposed that are specific to the ISRA and UST programs. Extensions of regulatory timeframes are permissible for a variety of reasons but must be submitted to NJDEP at least 30 days prior to the regulatory deadline.
As a general rule, the proposed "mandatory" timeframes -- which carry Direct Oversight of the case as the penalty for non-compliance -- provide a person responsible for conducting remediation ("PRCR") an additional one year beyond the applicable regulatory deadline to complete the activity or, with respect to a Remedial Investigation or Remedial Action, an additional two years beyond the regulatory deadline.
For many existing cases, the March 1, 2012 mandatory deadline contained in the current rules to achieve four milestones is approaching quickly. These include the following deadlines for remediation cases initiated or specific conditions existing as of March 1, 2010: (i) submission of an initial Receptor Evaluation Report, (ii) submission of the Preliminary Assessment Report and/or Site Investigation Reports for ISRA and UST cases, (iii) initiation of IEC contaminant source control and submission of the IEC Contaminant Control Report, and (iv) several tasks respecting interim remedial measures required to address LNAPL. Extensions of a mandatory timeframe are limited and must be requested, in writing, no later than 60 days prior to the end of the mandatory timeframe; for the March 1, 2012 deadlines, an extension request must be submitted by December 30, 2011.
Attention to these new regulatory and mandatory deadlines is necessary, with the importance of these timeframes likely to increase as the LSRP program is fully implemented. The timeframes identified in this brief article are not exhaustive and exceptions exist to the general rules; for example, the Remedial Investigation of certain legacy site remediation projects commenced prior to May 7, 1999, must be completed by May 7, 2014.
ISRA Remains Alive and Well
The Industrial Site Recovery Act ("ISRA") and the related ISRA rules were affected greatly by the enactment of the SRRA. Generally, the proposed changes to the ISRA rules transfer many of the approval powers of the NJDEP to the LSRP, and the submission and remediation procedures are now contained in the ARRCS rules rather than the ISRA rules. Significantly, the proposed rules will continue to allow an LSRP to authorize a transaction to close using an ISRA Remediation Certification. While the new approach may look different, ISRA and its requirements are still alive and well.
One of the most significant proposed changes to the ISRA rules is the definition of "industrial establishment." The current definition states that except for lease properties, "the industrial establishment includes all of the block(s) and lot(s) upon which the business is conducted and those contiguous block(s) and lot(s) controlled by the same owner or operator that are vacant land, or that are used in conjunction with such business." The industrial establishment for "lease properties" under the current ISRA rules is defined more broadly and includes "the leasehold and any external tank, surface impoundments, septic systems, or any other structures, vessels, contrivances, or units that provide, or are utilized for, hazardous substances and wastes to or from the leasehold." In its definitions, the Department proposes to replace the term "lease properties" with the phrase "properties with two or more leased spaces."
The effect of this change is two-fold. First, where a property is leased to a single tenant, it will not be treated as a "lease property" for purposes of the definition of "industrial establishment;" that is, where a property is leased to a single tenant, the industrial establishment will encompass the entire blocks and lots upon which the business is conducted. Second, where a property is leased to two or more tenants, it will continue to be treated as a "lease property" for purposes of defining the industrial establishment; that is, the industrial establishment will include the leasehold and all mechanisms related to the industrial establishment's hazardous substances, regardless of the location of the mechanism relative to the leasehold.
The definition of "industrial establishment" is also proposed to be amended with respect to the industries that are subject to ISRA requirements. For example, "needle trades" (e.g., cutting and sewing textiles) and pharmacies and drug stories will be eliminated from the list of NAICS codes subject to ISRA. A significant addition is also being made to the list of ISRA-subject industries -- NAICS number 493, described as "Warehousing." The covered code is limited to the warehousing of "raw materials for other establishments of the same enterprise." The NJDEP determined that it previously had the authority to regulate this warehouse activity under the "Auxiliary Establishment" provisions in the Standard Industrial Classification Manual.
Other significant changes were adopted to conform the ISRA program to the SRRA. The NJDEP now proposes to delete all references to "negative declarations" and NFA letters and to essentially hand over the ISRA approval process to the LSRP. An owner or operator need not submit a "negative declaration." Rather, to comply with ISRA, the LSRP will have to issue an RAO, the equivalent of an NFA letter, or certify and submit to the NJDEP a remedial action workplan ("RAW"); approval of the submission by the NJDEP will not be required. Additionally, an owner or operator will no longer be able to obtain ISRA approval via the following alternate compliance mechanisms: expedited review, area of concern review, limited site review, and minimal environmental concern review. The Department states that, in general, these alternate compliance mechanisms are unnecessary because an LSRP can issue an RAO as soon as the preliminary assessment is complete if no new discharges occurred since the most recent NFA or RAO. The Department also proposes to eliminate the remedial action workplan deferral on the basis that such a deferral is inconsistent with the affirmative obligation to remediate imposed by the SRRA.
The other alternate compliance mechanisms -- the regulated underground storage tank waiver, the remediation in progress waiver, the certificate of limited conveyance, and the de minimis quantity exemption -- will continue to satisfy ISRA to close a transaction. For all alternate compliance mechanisms except the certificate of limited conveyance (which application will remain unchanged), an applicant will be required to submit an "ISRA Alternate Compliance Mechanism Application." It is the approval of the NJDEP, rather than the LSRP, that will be required for alternate compliance mechanisms.
The NJDEP's overhaul of the ISRA rules is intended to streamline the remediation process by giving LSRPs the power to oversee cleanups and issue final remediation documents. While the procedures have changed, and will hopefully be more efficient, the requirements of ISRA compliance remain the same.
The Shift to the LSRP Program Is Felt in the UST Program
A major component of the SRRA -- the LSRP program -- is being applied to the NJDEP's Underground Storage Tank ("UST") program. The NJDEP proposes that after May 2012, work conducted on regulated USTs relating to the remediation of a discharge must be performed by an LSRP, and no longer by a certified subsurface evaluator. The NJDEP will not accept any work related to a regulated UST conducted by a subsurface evaluator. Moreover, the NJDEP proposes that the failure on the part of the owner or operator of the regulated UST to hire an LSRP to conduct the remediation of a discharge from the UST will constitute grounds to deny the issuance of or to revoke a facility's UST Registration Certificate. The reason for the shift of responsibility from certified UST contractors to LSRPs is unclear and may present some efficiency issues. Requiring LSRPs to be directly involved in the operation and maintenance of UST systems -- a role historically played by certified UST contractors -- may increase costs for UST operators and impede the speed with which these tasks are completed (e.g., installation, monitoring, cathodic protection and installation of monitoring systems). Many LSRPs have not traditionally performed these tasks and may not be as familiar with them as are certified UST subsurface evaluators.
Similarly, the role of the LSRP would also expand with respect to the review of UST system closure plans. It is the LSRP, and no longer the NJDEP, who will review UST system closure plans, site investigation reports, and the initial remedial investigation report or other reports. The owner or operator need not submit the closure plans to the NJDEP; instead, the LSRP will review and implement the plans.
The NJDEP has proposed another significant change. Under the proposed UST regulations, the owner or operator of the UST must conduct an "unknown source investigation" where available information indicates that the UST system may be the source of a discharge. Commenters to the rule proposal have said that, as written, an investigation may be required even where the contaminants of concern do not match the products stored in the UST. The unknown source investigation report will be required to comply with the requirements for a site investigation and report; yet, the timeframe for submitting an unknown source investigation report is considerably shorter (90 days) than that required for a site investigation. Thus, the proposed regulations impose broader obligations on owners/operators of UST systems.
Penalties, Penalties Everywhere
A consistent concern raised by the business community with respect to the proposed ARRCS rules governing the administrative requirements for the remediation of contaminated sites are the more than 250 base penalties listed in the rules. The amount and number of penalties, the potential duplicity in violations, the lack of clarity on how the NJDEP will enforce these penalties and the NJDEP's stated intention to be more aggressive on enforcement in the future has created concern in the regulated community.
The proposed rules set forth base penalties for numerous potential violations with little indication as to how the NJDEP is going to impose such penalties when an infraction occurs. Many of these, such as for failure to submit documentation, appear to be simply imposing punishment for technical violations and have no bearing on whether the enforcement response is proportional to harm or potential harm to the environment. Yet, Governor Christie in Executive Order No. 2 mandated that an agency's enforcement mechanism shall "value performance based outcomes and compliance, over the punitive imposition of penalties for technical violations that do not result in negative impacts to the public health, safety or environment." With respect to enforcement, the proposed rules seem to be taking the exact opposite approach mandated by the Governor's Order.
The amounts of the base penalties in the proposed rules have substantially increased from the amounts in the current rules, often up to $15,000, $20,000 or $25,000 per violation. Moreover, as the proposed rules are now written, the NJDEP could impose multiple penalties on a responsible party for a single mistake or infraction. For example, a remediating party that fails to comply with ISRA may be assessed a penalty for both a general violation of ISRA and a violation of the specific requirement giving rise to the non-compliance. These penalties can be imposed on a daily basis. Further, many of the listed violations have no correlation to potential impacts on human health and safety or the environment.
Many of the violations are categorized as "non-minor," which means, unlike "minor" violations, the responsible party is not provided a grace period in which it can correct any alleged error or deficiency without penalty. Certain of the violations listed as "non-minor," such as the failure to provide documentation, should be designated as "minor" under the grace period law, especially when it does not appear the violation will result in harm to the environment.
More troubling is that certain of the listed violations suggest the NJDEP can question, through an enforcement action, the professional judgment of an LSRP. Examples of these violations include: "[f]ailure to comply with this chapter when conducting remediation pursuant to any of the applicable statutes;" "[f]ailure to properly conduct a preliminary assessment;" and "[f]ailure to conduct a remedial investigation when required." This could result in the untenable situation where a remediating party is penalized because its LSRP's approach differs from the approach that would have been preferred by the NJDEP. In situations where the NJDEP may prefer a different approach, the rules should provide that the NJDEP will not take enforcement action unless it can demonstrate that the LSRP's approach was not protective of human health and the environment.
It is unclear how these specific base penalties will bolster the NJDEP's already broad authority under the SRRA and the Spill Act to take enforcement actions for violations regarding the clean up of a contaminated site. At a minimum, the NJDEP should clarify the proposed rules to eliminate duplicity, provide for greater use of grace periods to correct violations and require the penalties to reflect potential risks and impacts to public health and the environment.
The Role of Guidance
In order to implement the SRRA and to encourage the cleanup of contaminated properties and the use of professional judgment by LSRPs, the proposed regulations move many of the more prescriptive details and requirements of the original Technical Requirements for Site Remediation ("Tech Regs") into technical guidance documents. Whether these changes will achieve the objectives of the SRRA depends in part upon the degree of latitude afforded the LSRPs in their use of guidance. If compliance with guidance is compulsory, or if deviating from the specific requirements of guidance is too difficult, not only may these objectives be thwarted but the NJDEP may overstep the appropriate boundary for proper and lawful use of guidance.
Guidance documents serve useful purposes, such as to clarify regulations and explain scientific or technical methods. However, when a guidance document goes further by setting forth additional criteria not adopted in the regulations, or when compliance with guidance is mandatory, serious questions arise as to whether the agency has subverted the rule-making requirement of the state Administrative Procedures Act ("APA"). Should "guidance" meet the APA definition of a rule - "an agency statement of general applicability and continuing effect that implements or interprets law or policy, or describes the organization, procedure or practice of any agency" -- it must then be adopted in accordance with APA procedures. See Metromedia, Inc. v. Div. of Taxation, 97 N.J. 313 (1984).
The question of whether the NJDEP's use of prescriptive guidance skirts the APA and due process requirements has even more significance in light of proposed N.J.A.C. 7:26C-1.2(a), which states that "[t]he person responsible for conducting the remediation shall conduct the remediation in accordance with ... any available and appropriate technical guidance ..." and similar requirements on the application of guidance at proposed N.J.A.C. 7:26E-1.5(b). The frequent use of the term "shall" in many of the guidance documents also would appear to elevate the requirements of these guidances to the level of a mandatory rule. Some commenters evaluating the proposed regulations believe that the NJDEP requirement to comply with prescriptive guidance is contrary to the APA and principles of due process. Others note that the requirement in the proposed rule to document any "deviation" from technical guidance further supports the view that the NJDEP's use of guidance continues to be too prescriptive. In addition, by making compliance with guidance compulsory, the ability of the LSRP to exercise professional judgment to vary from the requirements of guidance documents is diminished in light of the fear that his or her remediating-party clients may be penalized or that the LSRP may face discipline.
The Department and stakeholders in the Site Remediation Program continue to work on technical guidances useful to the implementation of the LSRP program. Ultimately, the approach taken with guidance - be it too prescriptive, requiring frequent "deviations" or alternatively, promoting performance-based remediation - is likely to have a significant effect on the performance of LSRPs in the investigation and cleanup of contaminated sites and the overall success of the LSRP program.
Addressing Vapor Intrusion Requires Significant Use of Guidance
One of the areas where the NJDEP is relying heavily on guidance to provide the substance of how to conduct remediation is in the area of vapor intrusion ("VI"). Since issuing the initial Vapor Intrusion Guidance in October of 2005 ("2005 VI Guidance"), there has been increasing focus on the effect to building interiors from underlying environmental contamination. VI concerns arise as a result of volatilization (evaporation) of certain contaminants, particularly VOCs, into the indoor air through the foundation or floor causing a risk of VOC exposure to the building's occupants. Indeed, the Environmental Protection Agency is considering an addition to the process by which sites are scored for inclusion on the list of Superfund sites to evaluate the threats posed by VI.
Since its issuance, NJDEP has updated the 2005 VI Guidance on several occasions, including changing the applicable screening levels in 2006 and 2007 and, in 2009, changing sampling procedures. In May 2011, the NJDEP issued for public comment the first major revision to the 2005 VI Guidance, a document that was prepared through the stakeholder process (the "2011 Draft VI Guidance"). Numerous comments were submitted to the Department in response to the 2011 Draft VI Guidance in June. To date, the NJDEP has not finalized or reissued a revised draft guidance.
The 2011 Draft VI Guidance is a lengthy, prescriptive document specifying required sampling parameters, establishing sampling frequencies, specifying monitoring and sampling equipment, suggesting system design and installation procedures, and determining long-term system monitoring requirements. This guidance states that when evaluating and remediating the VI pathway, it is recommended that the NJDEP be consulted before implementing methodologies or procedures not included in, or contrary to, this guidance. Further, the 2011 Draft VI Guidance states that "[j]ustification for variations from the guidance must be included in the relevant submittal that addresses the pathway" pursuant to the SRRA and the Tech Regs. These aspects of the guidance detract from the LSRP's ability to use professional judgment and complicate the remediating party's ability to comply with the regulations.
VI also is addressed in other guidance documents including the Immediate Environmental Concern Guidance ("IEC Guidance"), which, in part, defines the immediate actions required of a person responsible for remediation when a VI condition that is above the Rapid Action Level is discovered. In addition, the Interim Vapor Concern Technical Guidance is triggered when the results from an indoor air sample exceed the applicable NJDEP Indoor Air Screening Level (but is at or less than the Rapid Action Levels) creating a "Vapor Concern" (the "VC Guidance").
The investigation and mitigation of suspected VI impacts is one area where guidance will play a significant role. The use of professional judgment and performance-based approaches by LSRPs in this area appears to be more challenging.
Is an RAO the Equivalent of an NFA?
Among the many new provisions of the NJDEP rule proposal is a significant change in the way that an RAO issued by an LSRP may be invalidated. Proposed section 6.4 of the Administrative Requirements for the Remediation of Contaminated Sites ("ARRCS") outlines twelve circumstances under which an LSRP must invalidate his or her own RAO. The proposal is significant in that it requires the LSRP, not the NJDEP, to invalidate an RAO. In addition, a determination that the remedial action is not protective of public health and the environment is not required before the RAO is invalidated.
An essential underpinning of the LSRP program is that an RAO has the same force of law, effect and finality as an NFA. Indeed, the SRRA sets a high bar before an RAO may be invalidated. Under the SRRA, failure to comply with regulatory requirements is insufficient to invalidate an RAO; the NJDEP must determine the remedial action itself is not protective of public health and the environment. The NJDEP has stated publicly that the invalidation of an RAO should be a "rare" and "unusual" occurrence. The existing NJDEP rule applicable during the interim, phase-in period of the LSRP program requires a determination by the NJDEP that a remedial action is not protective before an RAO may be invalidated. Under the existing rule, none of the approximately 900 RAOs issued to date by LSRPs have been invalidated.
The proposed rule takes a new approach. An LSRP would be required to invalidate his or her own RAO if any one of twelve generic circumstances is met, without being required to determine that the remedial action is not protective. Several of the listed circumstances requiring invalidation can be triggered by simple mistakes or failure to comply with specific permitting requirements or regulations. Others are vague - e.g., the RAO is "not supported by environmental data" or mistakes "may result in detrimental reliance by a third party" -- or contrary to the SRRA. Only one requires a specific demonstration that the remediation is not protective. The possibility that an LSRP may be required to invalidate the RAO for a site has no time limit.
Many commenters on the NJDEP rule proposal have raised concerns over the effect this provision may have on the LSRP program. If adopted, the proposal would increase uncertainty as to the finality of RAOs. It also would make it too easy for project objectors, litigants or other adversaries to challenge an LSRP's work. An LSRP program where RAOs are frequently invalidated will not give rise to timely and more efficient cleanup and redevelopment of contaminated sites. Commenters have asked the NJDEP not to adopt this aspect of the proposed rule and to retain the approach of the existing rule and SRRA.
The reliability of RAOs is critical to the success of the LSRP program and Riker Danzig will continue to monitor and report on the development of this significant issue.
The Proposed Regulations Require Numerous Parties to be Listed as Co-Permittees on Remedial Action Permit
The SRRA authorized a new Remedial Action Permit ("RAP") program to ensure that engineering and institutional controls are being maintained and are adequately protective of human health and the environment, while at the same time allowing responsible parties to transfer responsibility for these controls to third parties. The proposed regulations will require the responsible party(ies), the current property owner(s), and the current tenant(s) to each be listed as co-permittees on the RAP. The co-permittees will be jointly and severally liable for compliance with the RAP. Further, the responsible party and the property owner at the time the RAP is issued (the "Original Property Owner") will be considered responsible permittees for the life of the permit; that is, neither can ever be removed as a permittee.
This is an important development for property owners wishing to sell their property and, along with it, their obligations to comply with the RAP. Even if a prospective purchaser agrees by contract to be a permittee for a site and assume the obligations flowing therefrom, including providing the Financial Assurance required by the NJDEP, the Original Property Owner will not be removed as a permittee. Presumably, the NJDEP wants to ensure that it has a viable, financially sound entity against which it can enforce the terms and conditions of the RAP. It may be burdensome, however, to require an Original Property Owner who has since sold the property to continue to be responsible for compliance with the RAP. Similarly, unless a tenant is the responsible party, it seems unnecessary and burdensome to list the tenant as a co-permittee who is jointly and severally liable for compliance with the RAP. It is important for owners and tenants to be aware of these requirements and their implications.
Other proposed changes to the RAP program include the following: (1) the text of the institutional control prepared by the LSRP must be worded exactly as the relevant model document; (2) financial assurance will be required in an amount equal to or greater than the full cost to operate, maintain and inspect the engineering controls over the life of the permit, but the remedial action permit guidance provides that the responsible party need not post more than thirty (30) years' financial assurance; (3) biennial certifications will be known as remedial action protectiveness certifications; and (4) a RAP will not be required for classification exception areas for groundwater contamination arising out of historic fill, but will still be needed for all other engineering and institutional controls.
While all of these proposed changes are noteworthy, the requirement that the responsible party(ies), the Original Property Owners, and the current tenant(s) each be listed as co-permittees subject to joint and several liability is likely to have the most impact on owners and tenants of property.
Changes to Document Retention, Disclosure and Confidentiality Procedures Under Proposed ARRCS Amendments
The NJDEP has addressed a number of document-related issues in the proposed rule. Of note, the proposed rule sets forth revised requirements regarding confidentiality requests, disclosure of contracts between remediating parties and LSRPs and document retention.
First, a newly proposed Subchapter, Confidentiality, sets forth the procedures for seeking a confidential information determination from NJDEP. Remediating parties can assert confidentiality claims for trade secrets, proprietary information, specific information regarding an ISRA-related transaction and information related to national security. The NJDEP will review a confidentiality claim only if and when it receives an Open Public Records Act ("OPRA") request to inspect the information, the NJDEP finds it necessary to determine whether information in its possession is entitled to confidential treatment, or it determines for any reason that it is in the public interest to disclose the information. Accordingly, the NJDEP may possess the confidential information for years before the confidentiality review process is triggered. If the process is triggered and the NJDEP determines that the material is not confidential, the NJDEP will notify the remediating party, who may then appeal the decision within 30 days. Material that is determined to be confidential may still be released to other public agencies, to NJDEP contractors under certain restrictions, when there is evidence of an imminent and substantial danger to public health and safety or the environment, or with the remediating party's consent.
Second, the proposed regulations would allow the NJDEP to request and obtain a copy of the contractual agreements between an LSRP and his or her client. The Department claims that it "does not normally need to have a copy of [these] contractual agreements" but "on a case specific basis, may want to review" them. Should the NJDEP request the contractual agreement, the document, including LSRP pricing and staffing information, would become public information and subject to an OPRA request. It is unlikely that such agreements would qualify as confidential, therefore LSRPs and remediating parties should draft their agreements accordingly.
Finally, the proposed regulations repeal existing record retention requirements applicable to remediating parties and LSRPs, under the theory that once the NJDEP has an electronic copy of the reports, information and data, there is no need for anyone else to also retain these records. Despite the repeal of the record retention requirement, it would be a good practice for several reasons for both the remediating party and the LSRP to retain copies of all documents submitted to the Department, including evidence of submission to the NJDEP, ease of providing a replacement if the NJDEP is unable to locate the submitted electronic copy, and evidence of the work performed, which may be required for the sale/lease of the property, cost recovery actions or other purposes.
Remediation Under DPCC/DCR Plans is Subject to ARRCS and the LSRP Program
Currently, the ARRCS rules exempts from their requirements those persons responding to a discharge pursuant to a discharge cleanup and removal ("DCR") plan. The NJDEP now proposes to eliminate this exemption, thereby requiring all discharges to be remediated pursuant to the ARRCS rules, notwithstanding the fact that a facility owner or operator has DPCC and DCR plans in place. Owners and operators of facilities subject to these plans should be particularly cognizant of the ARRCS rules and any regulatory and mandatory timeframes that now may apply to their remediations when the rules are adopted in May 2012.
The NJDEP has proposed several changes to its Public Notice requirements which allow use of an LSRP's professional judgment to accommodate site-specific approaches. For example, under the rule proposal, the NJDEP would no longer specify the dimensions of notification signs or the content and method of mailing notification letters. Rather, it would be incumbent upon the responsible party and the LSRP to determine how best to convey site conditions and to design and distribute notification letters that are appropriate for the site. Moreover, the NJDEP has proposed new provisions concerning the use of fact sheets, which depend on whether the impacted medium is soil or groundwater. Similar to the proposed sign and letter notification requirements, the proposed fact sheet requirements would allow an LSRP to use professional judgment in determining the best way to disseminate site-related information. A responsible party also may implement an alternative public notification and outreach plan if that plan is prepared by an LSRP and the plan is substantially equivalent to the agency's public notice requirement. Department pre-approval is no longer required.
In addition to amending the public notice requirements to accommodate site-specific conditions, the NJDEP has expanded the list of recipients to whom notification is to be sent, which will now include the municipal clerk, as well as the local and county health departments. The NJDEP also proposes to clarify that a responsible party may change the form of notification from a letter to a sign.
Responsible parties should be aware of these proposed changes to the public notice and outreach requirements, especially those who in the near future intend to commence field activities associated with a remedial investigation or remedial action at their site.
In May 2012, the SRRA's three-year transition period will end and the new legislation and corresponding regulations will be fully implemented. Data available as of September 2011 present the following program two-thirds of the way through the transition period:
Current LSRP Program Statistics
|NEW CASES USING LSRPs||1846|
|REQUESTS TO "OPT-IN"||1573|
Documents Submitted by LSRPs (July 2011)
|Preliminary Assessment/Site Investigation||241|
|Remedial Investigation Report||152|
|Remedial Action Workplan||81|
|Remedial Action Report||340|
|Remedial Action Outcome||832|
NJDEP Review Statistics (June 2011)
|Administrative check, inspection and review of reports completed (based on 2252 documents submitted||83%|
|RAO inspection and review completed (based on 530 RAOs filed)||80%|
|Average time for completion and review of key documents||26 Days (down from 63 days in July 2010)|
Forms, Forms and More Forms
The NJDEP's implementation of the SRRA has given rise to significantly increased use of regulatory forms. With the Rule Proposal, the number and variety of forms required by the NJDEP's Site Remediation Program continues to grow. Many of the forms are burdensome or confusing. For example, under the Rule Proposal, the NJDEP requires a form notification of a vapor intrusion investigation prior to sampling activities when air quality is still unknown and may not warrant NJDEP involvement. Additionally, an LSRP is required to submit a variance form before he/she performs work that may deviate from the Technical Requirements for Site Remediation, even under circumstances where the LSRP may not know of the need for a variance in advance. To view the forms visit: http://www.nj.gov/dep/srp/srra/forms/.
On August 15, 2011, the NJDEP published its proposed text of the rules to implement the SRRA. These are the subject of this newsletter and include the ARRCS rule, the Technical Requirements for Site Remediation, Industrial Site Recovery Act rules, Underground Storage Tank rules, and the Discharges of Petroleum and Other Hazardous Substances rules. A 60-day comment period was provided for the rule proposal wherein interested parties had the opportunity to raise comments, questions or concerns to the NJDEP. The comment period officially closed on October 14, 2011. A public meeting was also held on September 13, 2011 to discuss the proposal. The final proposal is expected to be adopted by the NJDEP and become effective prior to May 7, 2012, which is the conclusion of the three-year phase-in period established by the SRRA and the date by which all remediation projects in the state must be supervised by an LSRP.