SRRA 2.0 Ushers In New Changes For Remediation in NJ
Passed in 2009, the Site Remediation Reform Act (SRRA) brought major changes to how New Jersey’s contaminated properties are cleaned up and deemed fit for future development. Now, the legislation has received its first overhaul, with the recent signing of S-3862/A-5293, known colloquially as “SRRA 2.0.” This legislation revisits many of the required processes of identifying, reporting, remediating, and maintaining cleaned sites, working out multiple kinks that have been grappled with in New Jersey’s Site Remediation Program since the legislation was enacted.
What’s new in SRRA 2.0? In this blog, we take you through the new legislation and highlight what real estate, legal, engineering, and environmental professionals need to know about this important update.
What is the Site Remediation Reform Act (SRRA)?
SRRA privatized many of the responsibilities previously assumed by the New Jersey Department of Environmental Protection (NJDEP). To accomplish this, SRRA created the Licensed Site Remediation Professional (LSRP) program, through which environmental remediation experts must obtain authorization to oversee cleanup of contaminated sites on the state’s behalf. These licenses are managed through the Site Remediation Professional Licensing Board, created with SRRA’s passage. The legislation also established a cleanup priority program, creating a class of properties called Immediate Environmental Concern (IEC) cases. More than 10,000 remediation projects have been completed since SRRA was implemented.
What are some of the major changes in SRRA 2.0?
SRRA 2.0 identified and resolved areas of improvement within the legislation which affect how LSRPs are licensed, how information is reported, how projects are financed, and firmly delineates the obligations of a Person Responsible for Conducting the Remediation (PRCR).
New financial assurance funding sources added
SRRA established that property owners must have a financial assurance mechanism in place when an engineering control is implemented on a cleanup. If the property owner is non-responsive or if the site is not being maintained to the state’s satisfaction, the state is authorized to access this dedicated fund to finance any necessary repairs to ensure the health of the remediation. The funds may be accessed for 50 years after a Response Action Outcome (RAO) is awarded or otherwise deemed closed by the NJDEP. While the NJDEP has yet to access these funds on any remediation project, they are well within their legal right to do so if deemed necessary, which means that partnering long-term with an environmental remediation firm is in your development’s – and your money’s — best interest. Under SRRA 2.0, property owners can use surety bonds to fund this financial assurance obligation. Surety bonds are widely regarded as a more accessible option, at about 1 to 3 percent of the total remediation cost. Surety bonds are also easier to maintain, unlike a trust fund or a line of credit, which are commonly used to fund this requirement.
Tying remediation status to real estate
SRRA 2.0 clarifies that the seller’s requirements for property remediation are transferred to the property’s new owner. Remediation and maintenance requirements follow the property through its unique ID, not by who owns it. While this was already known to real estate brokers and environmental remediation companies, SRRA 2.0 goes the extra step to confirm this in writing.
Clarifying and revising LSRP requirements and responsibilities
Licensed Site Remediation Professionals (LSRPs) are at the heart of SRRA, as they have the important responsibility of overseeing remediations once under the auspices of the NJDEP. The process to become an LSRP, and for which parts of an environmental cleanup an LSRP is needed, were modified in SRRA 2.0. Some of the more significant revisions include:
- Under the updated legislation, LSRPs must report any knowledge of any issue on a remediation site, no matter which LSRP oversees that portion of the cleanup. Prior to SRRA 2.0, LSRPs were not required to report contamination issues covered by a different LSRP. For example, a soil remediation overseen by an LSRP would not need to report a groundwater contamination issue.
- State-based licensing requirements have been relaxed. SRRA 2.0 still requires LSRPs to have hands-on, full-time experience working in environmental remediation in New Jersey, but now, an applicant qualifies with two years of New Jersey experience within five years of the LSRP application date. Prior to SRRA 2.0, an applicant needed to demonstrate two years of New Jersey experience immediately prior to the application date, which restricted who could apply to become an LSRP.
- An LSRP does not need to be retained for due diligence investigations.
- An LSRP must be retained for the duration of a project, and any work associated with a remedial action permit (RAP) must be kept with this LSRP.
- LSRPs cannot retain non-LSRPs to conduct work on a remediation site. There is an exception to this rule is the remediation is “managed, supervised, or periodically reviewed and evaluated” by an LSRP.
- An applicant is not eligible for LSRP certification if they committed certain criminal offenses, including those who committed a crime involving breach of trust or a crime or offense of “moral turpitude.” Those listed on the state’s sexual offender registry are ineligible. Additionally, LSRP applicants cannot have a history of revoked or surrendered state-awarded professional licenses, within certain limitations.
Informing the public and local government
The PRCR must answer inquiries from the public regarding cleanup status. Under SRRA 2.0, this entity must provide documentation or specific information that answers the placed inquiry. They may also provide a written status report about the cleanup in question. This change in the bill is primarily to address concerns raised by environmental and community groups about transparency during the remediation process.SRRA 2.0 also requires notification of municipal and county government bodies earlier than what was previously required in SRRA. The updated legislation also requires the party responsible for the remediation to provide more documentation. Where SRRA only required the submission of a work plan, SRRA 2.0 requires the reporting of work data and other relevant reports when requested by the municipality or county government.
SRRA 2.0 instructs the NJDEP to encourage the use of green technologies and sustainable environmental practices during remediation of a contaminated site whenever possible. However, these practices cannot impact the remediation itself. SRRA 2.0 makes clear that public health and the environment take precedence, and cleanup practices which may not be considered “green” should be used when necessary to fulfill this obligation.
SRRA 2.0 has clarified several terminologies throughout the legislation. Some of these clarifications include:
- Expanding the definition of “remediation” to include investigation and cleanup activities. SRRA 2.0 clarifies that natural resource damages are not a part of estimates when determining the cost of a cleanup.
- The ultimate injury to environmental assets beyond the defined site can seriously run up the cleanup cost for the responsible party.
- Replacing “hire” with “retained.” SRRA 2.0 amends the entire legislation to replace the terminology “hire” with “retain.”
- Defining what qualifies as an “immediate environmental concern” (IEC). The definition of an IEC has been revised to emphasize a “confirmed contamination” on a site. It now also includes contamination that has migrated into a structure, whether that structure is occupied or not. Prior to SRRA 2.0, the legislation only stated that “occupied” structures were eligible for IEC status. This means that an IEC in an abandoned building still needs to be remediated, even if the building is likely to never be occupied again.