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NEW JERSEY: An Introduction to Environment

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An Overview of New Jersey Environmental Law  

Submitted by Riker Danzig Scherer Hyland & Perretti LLP

New Jersey has long been at the forefront of environmental law in the United States, requiring business and its advisors to be nimble in responding to new and evolving requirements. The New Jersey Department of Environmental Protection (“NJDEP”) was established on April 22, 1970, the first official Earth Day in the United States, and along with the courts and Legislature has kept the state on the front lines of complex environmental regulation ever since.

For example, the state Spill Compensation and Control Act, enacted in 1976 (“Spill Act”), served as a model for the Comprehensive Environmental Response, Compensation, and Liability Act, or “CERCLA,” the federal statute that authorizes response actions at contaminated sites and establishes liability of persons responsible for the release of hazardous substances. In a seminal 1983 environmental case, State Department of Environmental Protection v. Ventron Corp., our state’s Supreme Court established a principle that continues as a guidepost in contaminated site litigation: “Those who poison the land must pay for its cure.”

The Environmental Cleanup Responsibility Act, enacted in 1983, is among the first and only transactional property transfer statutes in the nation. Now known as the Industrial Site Recovery Act (“ISRA”), it is a primary reason why so many contaminated sites have been identified, investigated or cleaned up within this state. Remediation of contaminated sites accelerated in the 1990s and 2000s with the adoption of incentives for brownfields redevelopment and use of private-sector, third-party Licensed Site Remediation Professionals, or “LSRPs.” New Jersey has led the way in other environmental programs as well; for example, regulation of solid waste management companies, including its “A-901” licensing of individual owners and key employees of such businesses.

Riker Danzig’s practitioners have worked extensively in these foundational programs, and continue as the State now embarks on a new set of environmental policies:

Climate Change 

The NJDEP has begun a regulatory reform effort, called Protect Against Climate Threats (“PACT”), to avoid, mitigate and adapt the state to the effects of climate change. This includes monitoring and aggressively reducing emissions of greenhouse gases and short-lived climate pollutants; modifying land use regulations to incorporate climate change considerations, including Coastal Zone Management, Freshwater Wetlands, Flood Hazard Area and other rules addressing chronic flooding; preparing sea level rise guidance to provide a science-based framework and method for building, design and other adaptation measures; and incorporating climate change considerations into grant, loan, contracting, planning, and policy programs and guidance. New rules and requirements are anticipated in 2021 and 2022, which are expected to significantly impact business and industry.

Environmental Justice 

New Jersey’s Environmental Justice Law enacted in 2020 has been characterized as one of the broadest in the nation and a model for other jurisdictions. The law authorizes or requires the NJDEP to deny or condition permits for major facilities that would have a disproportionate environmental impact on already overburdened communities. These facilities include major sources of air emissions and waste management, recycling, and sewage treatment facilities. An Environmental Justice Impact Statement and a public hearing are required for certain permits to expand, construct or continue operations on renewal in order to evaluate cumulative impacts of the project. Mitigation of impacts can be required. As many as 300 municipalities may be considered overburdened communities, which means the program will impact all regions of the state. Rules are currently being developed.

Renewable Energy and Offshore Wind 

New Jersey has established a goal of 100% clean energy by 2050 to meet or exceed requirements of our state’s Global Warming Response Act. The NJDEP and other agencies are developing regulatory programs to promote offshore wind, solar and other renewable energy development, such as anaerobic digestion and geothermal. In 2021, the NJDEP is expected to propose new rules that would facilitate and balance renewable energy goals against its natural resource protection policies and programs. Public and private sector investment in designated port facilities has been pledged to support offshore wind farms, including manufacturing, marshaling and supply chain facilities. This rapidly evolving regulatory environment is creating new opportunities, as well as burdens and pitfalls, associated with renewable energy project development.

Food Waste and Organics Recycling 

New Jersey is joining those few states that have begun to aggressively address food waste and organic waste recycling. New legislation requires large food waste generators to separate and recycle food waste beginning in October 2021, where the generator is located within 25 miles of a recycling facility. These requirements apply to commercial food distributors and processors, supermarkets, resorts and conference centers, restaurants, educational institutions, hospitals and casinos. The NJDEP also is revising rules to facilitate organic waste management, including anaerobic digestion and composting facilities. Together, these initiatives will support development of an organic waste management industry.

Emerging Contaminants and PFAS 

New Jersey was among the first states to adopt strict regulatory standards for, and to designate as hazardous substances, certain poly- and perfluoroalkyl substances (“PFAS”). These standards were first applied to the drinking water supply and the cleanup of contaminated groundwater. Industry and other potential sources of PFAS, such as publicly owned treatment works and landfills, now are being required to evaluate PFAS in permitted discharges to surface and ground waters. The NJDEP has aggressively pursued litigation against chemical manufacturing companies that it considers to be primary sources of PFAS contamination. LSRPs are required to evaluate the potential presence of PFAS, and other emerging contaminants, at all contaminated sites. These new programs are expanding the review of PFAS and other emerging contaminants in the environment, creating new risks and obligations for evaluation, mitigation and cleanup.

A Panoply of Environmental Laws and Litigation 

New Jersey has adopted robust air quality, water quality, wastewater, hazardous and solid waste management, and community right-to-know programs. Environmental land use programs, including for coastal and waterfront areas, freshwater wetlands, flood hazard areas and threatened and endangered species, require thorough analysis of the impacts of new projects on sensitive environmental areas and receptors, and close attention to permitting requirements and strategy. Several special environmental regions within the state, and projects proposed in these areas, are singled out for increased scrutiny, including in the Pinelands, the Highlands and the Meadowlands.

New Jersey’s site remediation program is well-developed and remains challenging. ISRA requires investigation and remediation of contamination in connection with transactions affecting, or closing operation of, many industrial or manufacturing businesses. The 2009 adoption of the LSRP program has improved cleanup outcomes and the efficiency and effectiveness of remediation. The NJDEP’s reluctance to allow site-specific risk assessment to guide cleanups remains a drawback.

Environmental litigation runs the gamut, including defense of government enforcement in civil, criminal and administrative actions, allocation and recovery of the cost to clean up contaminated sites, insurance coverage, landlord-tenant and other property damage matters. Alternative dispute resolution is available through the NJDEP and the courts. Recently, the NJDEP has aggressively litigated claims for Natural Resource Damages and brought cases directed to Environmental Justice considerations by targeting parties responsible for pollution in minority and lower-income communities.

Finally, New Jersey’s robust environmental programs and initiatives deeply affect corporate, real estate, lending and investment transactions, requiring particularized due diligence and pragmatic assessment of risks and liabilities, including the structure of transactions.