SRWM Brownfields

Natural Resource Damages Liability Protection for Developers

In an effort to promote economic growth and the cleanup of contaminated sites in New Jersey, legislation was signed on February 2, 2005 that provides qualified developers liability protection against natural resource damage (NRD) claims at brownfield sites across the state. The new law codifies DEP’s existing policy concerning historical natural resource damages and brownfield developers meeting the innocent purchaser defense as expressed in DEP Policy Directive 2003-07 issued in November 2003.

The liability protections apply to developers that already acquired or will acquire property on or after January 6, 1998, which is the effective date of the Brownfield and Contaminated Site Remediation Act. Developers must also have acquired the property after any discharge of a hazardous substance occurred. In addition, developers cannot be responsible for the discharge of a hazardous substance at the property or be corporate successors to the discharger or any other liable person. Lastly, the liability protections do not apply to developers that, by contract, have expressly assumed liability for historical natural resource damages.

Because the provisions of the law are explicitly clear, purchasers (with the assistance of their attorney) can determine if they qualify for the liability protections independent of DEP. Consequently, DEP will not issue a letter, covenant or waiver to a prospective purchaser or property owner to affirm, acknowledge or document their immunity from NRD liability. This “self-certification” will result in a significantly streamlined NRD process and the issuance of No Further Action (NFA) determinations to developers undertaking cleanups voluntarily without waiting for those responsible for the contamination to resolve their NRD obligations with DEP.

The self-certification is accomplished by submitting a fully executed Natural Resource Damages Subsequent Purchaser Certification along with the final report outlining remediation activities undertaken to meet the requirements for an NFA determination from DEP. The assigned DEP case manager will review the document and, if acceptable, issue the NFA determination to the developer. DEP will subsequently pursue the responsible parties for all outstanding NRD.

Questions concerning the process can be directed to Kenneth J. Kloo, Administrator, Office of Brownfield Reuse, at (609) 292-1251 or at ken.kloo@dep.state.nj.us, or Pam Lange, of the Office of Natural Resource Restoration, at (609) 984-5475 or at pam.lange@dep.state.nj.us.