NJ Site Remediation - LSRP Program Underway – What to Expect in 2010

January 8, 2010
Client Alert Newsletter Forecast 2010

New Jersey's new Licensed Site Remediation Professional ("LSRP") program under the Site Remediation Reform Act ("SRRA") will be the focus of much attention in 2010. Under this ambitious and, for New Jersey, ground-breaking new program, the large majority of new site remediation cases must be overseen by an LSRP, as opposed to a New Jersey Department of Environmental Protection ("NJDEP") case manager, must proceed through the remediation process without awaiting NJDEP pre-approval and, upon completion, a response action outcome ("RAO") will be issued by an LSRP, as opposed to a no further action letter issued by NJDEP. Sites that are remediated using engineering or institutional controls will be subject to a new remedial action permitting requirement, which must be issued by the NJDEP before the LSRP may issue the RAO. In addition, pre-existing cases that are now under NJDEP case manager oversight may opt-in to the LSRP program with NJDEP approval.

Given these new innovations, here's a brief list of key issues to track in 2010:

Potential for NJDEP review of reports to bog down the process - While LSRPs must still submit reports to NDJEP, the NJDEP review of such reports is supposed to be limited to a checklist "inspection" of an accompanying form in most instances and partial or full report review will take place only in limited circumstances. As submissions are made to NJDEP by LSRPs, the LSRPs and the regulated community will begin to gain experience with the circumstances in which NDJEP will choose (or may be required) to review a report (or portions thereof) and the level of detail that NJDEP will apply to its review. This will be critical to judging the likely success of the LSRP program, which is intended to greatly speed up the process of completing remediation of contaminated sites by avoiding backlogs attributed to agency review.

Likelihood and circumstances of NJDEP audit of RAOs – NJDEP has authority to audit a RAO for up to three years following its issuance. Concerns have been raised about the possibility that such audits may be delayed until the end of that period, thereby leaving a cloud over a RAO for a considerable period of time following its issuance. The coming year should provide an indication of how quickly NJDEP will perform these audits or decide that an audit is not needed.

NJDEP discretion to subject a case to direct oversight – While most cases will be subject to LSRP oversight, some cases will remain subject to direct oversight by NJDEP on either a mandatory or discretionary basis (based on criteria in SRRA). While these cases must still use a LSRP, they will require full NJDEP review and approval of all reports, NJDEP will select the remedy and financial assurance in the form of a trust fund will be required. During this year, we should begin to get a feel for when NJDEP will exercise its discretion to place a case under direct oversight and how it will exercise its remedy selection authority.

Establishment of LSRP Board and regulations for full licensing program – Under SRRA, NJDEP was given the authority to issue temporary LSRP licenses with terms of no longer than three years to get the program quickly up and running. Over 300 such licenses have already been issued. A new LSRP Board is required to be established to develop and implement regulations for the issuance of licenses, to issue the final (versus temporary) licenses and to oversee compliance with the LSRP code of conduct. The LSRP Board has not yet been appointed nor have the regulations been proposed. Hopefully the establishment of the LSRP Board will take place soon so that the full-fledged licensing program can begin to take shape.

Final administrative regulations – Under SRRA, NJDEP was required to issue interim regulations to implement the SRRA administrative reforms without notice and comment by November 4, 2009, and to issue final regulations with notice and comment by May 2011. The interim regulations were issued in a timely fashion, however, in order to meet the notice and comment requirements for the final regulations, a rule proposal will have to be issued during 2010. The form of this final rulemaking should take shape over the next several months and may, because of time constraints, look very similar to the interim rules.

Revision of the technical regulations – The NJDEP has promised to begin the process of generating extensive revisions to the regulations that have governed the technical details of site remediations in New Jersey ("Tech Regs") during the coming year. These regulations have long been criticized for their overly prescriptive and inflexible nature. A stakeholder process is being established to afford the opportunity for extensive public input and NJDEP has promised to focus on a performance-based approach rather than detailed prescriptive requirements. The regulated community is also hoping that risked-based decision-making will be given wider latitude under the new regulations.

Guidance document development – Under SRRA, the decisions of LSRPs are supposed to be based on professional judgment. To guide that judgment, NJDEP has started the process of developing a wide range of guidance documents covering many different technical topics (two of the more controversial guidance documents deal with immediate environmental concerns and free product, however, many more are in the works). According to NJDEP, their intent is to use the Tech Regs to identify the remedial phase objectives and to utilize guidance documents to describe the actions, tactics, and technical issues "to be considered" in meeting those objectives. Concerns have been expressed over the degree to which compliance with guidance will be considered mandatory and it will be crucial to the program's success to avoid simply shifting the old prescriptive approach from the Tech Regs to the guidance documents.

Will LSRPs be overly conservative? – Concern has been expressed that LSRPs will be unnecessarily conservative in exercising their professional judgment, thereby increasing the cost of completing site remediation projects. This coming year should afford the regulated community experience with whether or not this will be the case.

In addition to the above, a variety of other issues remain to be fleshed out during the coming year including how the new presumptive remedy process will work for residential properties, to what extent the new remedial action permit process for engineering and institutional controls will complicate or simplify the site remediation process, how readily existing cases opt-in to the process, how readily extensions of the new mandatory time frames will be granted, and what contracting issues are presented by the new requirements. The LSRP reforms ushered in by SRRA have been hailed as having the potential to transform the site remediation process in New Jersey. The jury is still out, however, as to whether that transformation will be for the better or for the worse.