NJ Law Limits Availability of Remediation Grants Under HDSRF Program

New Legislation May Make it More Difficult for New Jersey Entities to Obtain Financial Assistance for the Remediation of Contaminated Sites From the HDSRF Program

In his last days in office, Gov. Chris Christie signed legislation that may make it more difficult for New Jersey entities to obtain financial assistance for the remediation of contaminated sites from the Hazardous Discharge Site Remediation Fund (HDSRF). Most notably, the new law removes the Innocent Party Grant from the realm of grants offered under the HDSRF program. 

Hazardous Discharge Site Remediation Fund 

HDSRF grants and loans are available to public entities, private entities, and non-profit organizations who need financial assistance to perform a remediation pursuant to New Jersey Department of Environmental Protection’s (NJDEP) Site Remediation Program requirements. The program was established in July 1993 to provide funding to public and qualifying private entities for the remediation of a suspected or known discharge of a hazardous substance or hazardous waste.

The HDSRF program is funded through a constitutionally-dedicated portion of the New Jersey Corporate Business Tax and is administered through a partnership between the DEP and the New Jersey Economic Development Authority (EDA). Under the program, financial assistance may be provided for preliminary assessments (PA) for onsite inspections and to review historical ownership and site use to determine if contamination may be present at the sites; site investigations (SI) to characterize suspected contamination through preliminary intrusive investigation work; remedial investigations (RI) to determine the extent of contamination present; and remedial action (RA) to effectuate cleanup of impacted portions of the sites.

Removal of the Innocent Party Grant 

For innocent parties, the loss of funding under Assembly Bill 1954 is significant. Prior to the amendment, New Jersey’s Brownfield and Contaminated Site Remediation Act provided that “[g]rants may be made from the remediation fund to persons who own real property on which there has been a discharge of a hazardous substance or a hazardous waste and that person qualifies for an innocent party grant pursuant to section 28 of P.L.1993, c.139 (C.58:10B-6).” The statute defines an “innocent party” as a person who acquired the site prior to December 31, 1983; did not use hazardous substance/waste; and did not discharge any hazardous substance/waste at the area where the discharge is discovered.

Prior to the amendments to the HDSRF program, private parties who qualified as an innocent party were eligible for grants equal to 50 percent of the costs to complete PA, SI, RI, and RA activities, and grants were capped at $1 million per project. Assembly Bill 1954 completely eliminated the provision providing for such funding from the Brownfield and Contaminated Site Remediation Act.

Additional Changes Under Assembly Bill 1954

Assembly Bill 1954 also eliminates the availability of grants and loans to persons who would otherwise not be eligible for assistance, but who remediate a site using innovative technology or who remediate to a limited restricted use standard. The amendments also establish caps on grants to municipalities, counties, and redevelopment entities for projects in brownfield development areas. For instance, the new law:

• Places limitations on grants to municipalities, counties, and redevelopment entities for projects in brownfield development areas. In those areas and to those government entities, the bill authorizes grants of up to 75 percent of the total costs of the remedial action.  
• Reduces the additional amount over the annual cap on financial assistance and grants otherwise in effect, which may be awarded in any one year to those government entities for projects in brownfield development areas, from $2,000,000 to $1,000,000.
• Lowers the cumulative total amount of matching grants that may be awarded to municipalities, counties, and redevelopment entities for projects involving the redevelopment of property for recreation and conservation purposes from $5,000,000 to $2,500,000 per year.
• Reduces the cumulative annual cap on the maximum amount of financial assistance and grants that may be issued to a person from $1,000,000 to $500,000, and to municipalities, counties, and redevelopment entities from $3,000,000 to $2,000,000 except for projects in brownfield development areas. 

The amendments also alter the priority for the award of financial assistance or grants from the remediation fund. First priority is given to sites that have been contaminated by a discharge or a suspected discharge of a hazardous substance or hazardous waste and where the discharge poses an imminent and significant threat to a drinking water source, to human health, or to a sensitive or significant ecological area; second priority is given to sites that are owned by a municipality in a brownfield development area; and third priority is given to sites in areas designated as Planning Area 1 (Metropolitan) and Planning Area 2 (Suburban) pursuant to the State Planning Act.  The EDA is also required to adopt criteria, which must be met by a municipality, county, or redevelopment entity that applies for a grant, that the subject real property be developed within a three-year period from completion of the remediation.

Finally, Assembly Bill 1954 provides that funding for a preliminary assessment or site investigation must be expended within two years after the date of the award, while funding for a remedial investigation of a contaminated site must be expended within five years of the award date. If the financial assistance or grant is not expended within the time limits provided, the award would be cancelled. In addition, awards will not be approved until the applicant demonstrates to the satisfaction of the EDA that it has expended or will expend the full amount of any previous financial assistance or grant awarded to the applicant for the same property.

If you have any questions about the HDSRF Program, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.