"Grace Period" Rules to Alter New Jersey Site Remediation Program

October 19, 2006
by BRUCE KATCHER and MEREDITH DuBARRY HUSTON
MGKF Special Alert

On September 18, 2006, the New Jersey Department of Environmental Protection ("NJDEP") finalized its "Grace Period Rules" for the Site Remediation Program ("SRP"). Promulgated under the 1995 New Jersey Grace Period Law, which provides for grace periods for remedying minor violations of environmental laws, the rules are being used to not only establish which violations are to be deemed minor and non-minor, but also to revamp the process for NJDEP review and approval of all reports submitted to the SRP under the NJDEP's Technical Requirements for Site Remediation ("Tech Regs"). This includes cleanups performed under the voluntary cleanup program, and non-voluntary cleanups performed under administrative or consent orders or pursuant to the regulated underground storage tank ("UST") or Industrial Site Recovery Act ("ISRA") programs.

For non-voluntary cleanups, the Grace Period Rule lists all possible violations of the Tech Regs, the UST Program and the ISRA program, classifies each potential violation as either minor or non-minor and prescribes a base penalty for each. For a minor violation, the Grace Period Rules prescribe a 30 to 90 day period—a grace period—in which to correct the violation in order to avoid imposition of the prescribed penalty for such violation. Non-minor (i.e., major) violations do not benefit from a grace period and penalties begin to accrue as of the date that a Notice of Violation ("NOV") is issued.

Voluntary cleanups performed under a memorandum of agreement ("MOA") with NJDEP will not be subject to penalties; instead, NJDEP will allow a period of time to correct deficiencies commensurate with the period allowed under the Grace Period Rule, following which it will terminate the MOA if the deficiency has not been corrected. Non-minor deficiencies will result in immediate termination of the MOA.

NJDEP may use its discretion to treat any violation classified as minor as non-minor. In determining whether otherwise minor violations should be treated as non-minor NJDEP will consider the violator's intent and previous enforcement history and the violation's duration and potential risk to public health and safety and natural resources on a case-by-case basis. The following summarizes the basic steps of the new program.

First Step—Notice of Deficiency:

In the event of a deficient submittal or action by a remediating party, NJDEP will issue a Notice of Deficiency ("NOD") to the person responsible for conducting the remediation detailing the deficiencies to be addressed. The NOD will identify the regulatory requirements for each deficiency and will establish a deadline to remedy the deficiency.

Second Step—Notice of Violation or Notice of Intent to Terminate MOA:

If deficiencies are not addressed within the established timeframe, NJDEP will issue a NOV in the case of a non-voluntary cleanup or a Notice of Intent to Terminate ("NOIT") in the case of a voluntary cleanup under an MOA. Issuance of the NOV or NOIT triggers the applicable grace period for minor violations. Non-compliance with the NOV within the allowable grace period will lead to an assessment of penalties prescribed by the Rule and non-compliance with the NOIT will lead to termination of the MOA.

Third Step—Assessment of Penalties or Termination of MOA:

For non-voluntary cleanups, non-minor violations and minor violations that are not corrected within the grace period are subject to base penalties under the Rule which range from $3,000 to $20,000 and represent the lowest applicable penalty for the subject violation (i.e., a floor). Each day of violation constitutes an additional violation to which penalty liability attaches. Subsequent offenses warrant increased penalties. As noted above, under the voluntary cleanup program, failure to correct a minor deficiency within the grace period specified in the NOIT and failure to correct a non-minor deficiency within the period allowed under the NOD will result in termination of the MOA.

NJDEP retains discretion as to whether to assess a penalty in response to a violation. According to the agency, it "does not always intend that the base penalties will always be additive for multiple violations of a single section of a rule or that it will penalize violators for violation of duplicative requirements in a rule."

Practice Pointers

  • Failure to submit a required document forfeits NJDEP review prior to application of the Grace Period Rule and NJDEP will not issue a NOD.
  • Other parties, such as the responsible person's attorney, consultant, or registered agent will be copied on the issuance of a NOD, NOV or NOIT only if requested.
  • Concerns with deficiencies may be raised with the case manager, his or her supervisor, or the SRP's Technical Review Panel ("TRP") after the issuance of a NOD and before the grace period is triggered. The TRP will likely take on increased importance as an appeal of last resort.
  • A request for an extension to resolve issues in the NOD must be made in writing, specify how much time is needed, and be received at least seven days prior to the compliance date in the NOD or an applicable approved schedule.
  • A single extension of the grace period may be granted for a period of up to 90 days.
  • NJDEP will no longer issue conditional approvals so that outstanding deficiencies may not be addressed as a condition of an approval as was previously the case.
  • If a violation is not remedied within the applicable grace period, NJDEP may assess a penalty retroactively to the date on which a NOV was first issued.

If you would like additional information concerning the Grace Period Rule, please contact Meredith DuBarry Huston (mhuston@mgkflaw.com) or Bruce Katcher (bkatcher@mgkflaw.com).