What is an industrial establishment?

The term "industrial establishment" refers to the type of business operations and transactions that would subject a facility to review under ISRA. An industrial establishment must meet each of the following three criteria:

1. The place of business or real property at which such business is conducted, having a North American Industry Classification System (NAICS) code listed in N.J.A.C. 7:26 B - Appendix C subject to the specified exceptions and limitations.
2. The place of business must have been engaged in operations on or after December 31, 1983; and
3. The place of business must involve the generation, manufacture, refining, transportation, treatment, storage, handling, or disposal of hazardous substances or hazardous wastes.

What is the mechanism that triggers ISRA compliance requirements?

ISRA requires owners or operators of an industrial establishment planning to close or transfer ownership or operations to notify the NJDEP. After the submittal of the notice, an owner or operator of an industrial establishment is required to obtain a no further action letter from the NJDEP or NJDEP approval of a remedial action workplan or remediation agreement as a precondition for the closing of operations or transferring of ownership or operations at these facilities.

Who must comply with ISRA?

Both the owner of the real property and operator of the industrial establishment are jointly liable for compliance with ISRA.

How do I determine if I am required to comply with ISRA?

An owner or operator who answers "Yes" to each of the following questions is required to comply with ISRA.

1. Does the business have a subject North American Industry Classification System (NAICS) code as listed in N.J.A.C. 7:26 B - Appendix C subject to the specified exceptions and limitations? Appendix C of N.J.A.C. 7:26B can also be found at http://www.nj.gov/dep/srp/regs/isra/isra_c.htm.
2. Were operations of an industrial establishment conducted after December 31, 1983?
3. Were hazardous substances or hazardous wastes used on-site?
4. Is the owner or operator planning to close operations or transfer ownership or operations of an industrial establishment as defined by ISRA and N.J.A.C. 7:26B?

If you have very general question regarding ISRA applicability you may call the Office of Community Relations at (609) 984-3081. As of April 30, 2008 the Department no longer answers written requests for an ISRA applicability determination. Telephone calls to the Office of Community Relations should be limited to general questions regarding ISRA they should be made to seek a site-specific determination regarding the applicability of ISRA to a transaction.

What if my facility is subject to ISRA?

If you determine that your facility is subject to ISRA and your facility does not qualify for any of the waivers, exemptions or alternate compliance processes described below, then you are required to perform all necessary remediation at your facility. During the standard ISRA process, the owners or operators of industrial establishments must notify the NJDEP within five days of any triggering event by filing a General Information Notice (GIN). Triggering events are specifically enumerated in ISRA, N.J.S.A. 13:1K-8 and include the sale of business or property, cessation of operations and bankruptcy. Once the owner or operator notify NJDEP, the owner or operator must conduct a remediation in accordance with the Technical Requirements for Site Remediation N.J.A.C. 7:26E. This includes at a minimum a Preliminary Assessment (PA) to identify potential Areas of Concern (AOCs) and if necessary a Site Investigation (SI) to determine if any contaminants are present above any applicable remediation standards. If there is contamination documented in the SI Report, the owner or operator must conduct a Remedial Investigation (RI) to determine the nature and extent of contamination. The next step is the proposal of a Remedial Action Workplan (RAW) detailing the measures necessary to remediate contaminated property to the applicable remediation standard. The owner or operator may submit a Negative Declaration affidavit when there have been no discharges of hazardous substances or wastes on the property or that any such discharges were cleaned up to the satisfaction of the NJDEP. The NJDEP approves of the Negative Declaration by issuance of a No Further Action Letter\Covenant Not to Sue letter.

In the case of a proposed transfer of ownership, the owner or operator must submit either a Negative Declaration or a RAW with the NJDEP prior to the actual transfer. When closing operations, the owner or operator must notify the NJDEP subsequent to closing or of its public release of its decision to close and submit to the NJDEP a Negative Declaration or a RAW. This is all initiated through the filing of the ISRA application forms and/or reports in accordance with the Technical Requirements For Site Remediation, N.J.A.C. 7:26E (General Information Notice, Preliminary Assessment Report forms etc.). The execution of a Remediation Agreement between the owner or operator and the NJDEP is a third option, in addition to an approved Negative Declaration or RAW, to allow the transaction to be consummated prior to full ISRA compliance. The NJDEP oversees the case until the industrial establishment is satisfactorily remediated and the NJDEP issues a No Further Action (NFA) Letter\Covenant Not to Sue letter.

Alternate Compliance Options, Exemptions and Waivers

This section describes the various applications for alternate compliance options including exemptions and waivers that are provided by ISRA regulations. It is emphasized that whenever an application requires a certification, evaluation or investigation of a facility, these must be performed pursuant to the Technical Requirements for Site Remediation (TRSR), N.J.A.C. 7:26E.

A Certificate of Limited Conveyance, N.J.S.A. 13:1K-11.8, N.J.A.C. 7:26B-5.7, allows the owner of the real property to transfer up to one third of the appraised value of the real property where an industrial establishment exists without having to remediate the entire industrial establishment. This certificate is valid for three years after the issuance date. Before completing the transfer, the owner or operator must file a GIN, remediate the portion to be conveyed, and obtain a NFA approval for that portion of the industrial establishment subject to the transfer.

A DeMinimis Quantity Exemption, N.J.S.A. 13:1K-9.7, N.J.A.C. 7:26B-2.3, , the owner or operator to close operations or transfer ownership or operations without conducting a remediation pursuant to ISRA under specific conditions. The owner or operator must submit a DeMinimis Quantity Exemption application and a fee and obtain approval by the NJDEP prior to the transfer or closure. The required DeMinimis quantity conditions exist if the total quantity of hazardous substances and hazardous wastes generated, manufactured, refined, transported, treated, stored, handled or disposed of at the industrial establishment at any one time during the owner's or operator's period of ownership or operations:

1. does not exceed 500 pounds or 55 gallons; or
2. if a hazardous substance or hazardous waste is mixed with non-hazardous substances, the total quantity in the mixture does not exceed 500 pounds or 55 gallons; or
3. if, in the aggregate, hydraulic or lubricating oil, does not exceed 220 gallons.

A Limited Site Review, N.J.S.A. 13:1K-11.3, N.J.A.C. 7:26B-5.5, allows an owner or operator to remediate only those area(s) of concern at an industrial establishment where a discharge, subsequent to a prior remediation and issuance of a No Further Action letter, has occurred. The owner or operator must submit a limited site review application and certify that this AOC was either not remediated or remediated but the remediation was not approved by the NJDEP. As a result, the NJDEP only reviews that AOC and not the entire establishment.

A Remediation in Progress Waiver, N.J.S.A. 13:1K-11.5, N.J.A.C. 7:26B-5.4, allows an owner or operator of an industrial establishment to close operations or transfer ownership or operations if the site is already undergoing remediation with NJDEP oversight. The owner or operator must submit a Remediation in Progress Waiver application, be able to certify that there have been no discharges at the site during the owner's or operator's ownership or operations, and that a remediation-funding source is in place. If the NJDEP approves the waiver, the remediation proceeds under the existing case until NJDEP issues a No Further Action\Covenant Not to Sue letter.

A Regulated Underground Storage Tank Only Waiver, N.J.S.A. 13:1K-11.6, N.J.A.C. 7:26B-5.3, allows an owner or operator of an industrial establishment to close operations or transfer ownership or operations without conducting remediation pursuant to ISRA if the only AOC is a regulated Underground Storage Tank (UST) or the only discharges at the site are from regulated UST’s. The owner or operator must submit an Underground Storage Tank Waiver application and preliminary assessment. If the NJDEP approves the waiver, the remediation continues with the existing BUST case until NJDEP issues a No Further Action\Covenant Not to Sue letter.

An Area of Concern Waiver, N.J.S.A. 13:1K-11.4, N.J.A.C. 7:26B-5.2, relieves an owner or operator of an industrial establishment of the requirement to perform a remediation pursuant to ISRA for any AOC at the industrial establishment for which a NFA approval exists and no new discharges have occurred at the AOC since the NFA was approved. The owner or operator must submit an area of concern waiver application, which includes a preliminary assessment and site investigation.

A Minimal Environmental Concern Waiver, N.J.S.A. 13:1K-11.7, N.J.A.C. 7:26B-5.6, allows an owner or operator to close operations or transfer ownership or operations at an industrial establishment with two or less soil AOCs requiring remediation. The AOCs cannot be a threat to drinking water or an immediate environmental concern. The owner or operator must submit a minimal environmental concern application, which includes a preliminary assessment, site investigation and remedial investigation. If the NJDEP approves the waiver, the transaction can occur without NJDEP approval of a RAW or Remediation Agreement however the owner or operator is required to establish a remediation-funding source. Within six months after NJDEP’s approval of the waiver, the owner or operator shall implement the remedial action and submit the remedial action report to the NJDEP.

An Expedited Review, N.J.S.A. 13:1K-11.2, N.J.A.C. 7:26B-5.1, allows an owner or operator of an industrial establishment, that previously received a No Further Action letter, to close operations or transfer ownership or operations, without remediation when there has been no discharge subsequent to the No Further Action letter or a subsequent discharge occurred and the subsequent discharge has also received a No Further Action letter. The owner or operator must submit an expedited review application and a Negative Declaration.

A GUIDE TO REMEDIATION FUNDING SOURCE REQUIREMENTS

*This is a guide to the remediation funding source requirements. Please refer to the Oversight Regulations, N.J.A.C. 7:26C-7, for the specific regulatory requirements.

Any person required to conduct remediation at a contaminated site pursuant to a court order, an administrative consent order, a remediation agreement or a Department approved remedial action Workplan must establish and maintain a remediation funding source in accordance with N.J.S.A. 58:10B-3 and N.J.A.C 7:26C-7.

NOTE: A remediation funding source is not required to be posted for the cost of implementing a Department approved innovative technology or an unrestricted use or limited restricted use remedial action or with an approved property tax exemption pursuant to the Environment Opportunity Zone Act.

CONTACT INFORMATION: All submissions and/or questions should be directed to:

Enforcement and Assignment Element
Bureau of Enforcement and Investigations
401 East State Street, 5th Floor W
Trenton, NJ 08625
Attn: Remediation Funding Source Administrator
FAX:(609) 633-1439

Telephone Contacts:

Tina Layre 609-292-0989

TYPES OF REMEDIATION FUNDING SOURCES

I. LINE OF CREDIT: Allows a person establishing it to borrow money up to a limit established in a written agreement in order to pay for the cost of the remediation. The line of credit signifies a limit of credit extended by a financial institution to its customer, to the full extent of which the customer may avail itself in its dealing with the financial institution.

1. A. Issuer of a Line of Credit: an entity licensed by the New Jersey Department of Banking and Insurance or a Federally regulated bank.
2. Language of a Line of Credit: See Model document.
3. Submission of Line of Credit: the Line of Credit Agreement must be submitted within fourteen (14) days of receipt of an ISRA remedial action workplan approval or execution of a remediation agreement; with signed copies of an administrative consent order; or as provided in an administrative order, directive, court order or other judicial settlement.

II. ENVIRONMENTAL INSURANCE POLICY: a contract whereby an insurer agrees, in return for premiums, on happenings of designated events, to pay certain sums as provided.

1. Issuer of an Environmental Insurance Policy: an entity licensed by the Department of Insurance to transact business in the State of New Jersey.
2. Language of an Environmental Insurance Policy: No Model available.


Environmental Insurance Policy must contain the following provisions:


1. The Policy may not be revoked or terminated without written consent of the Department;
2. Insurer shall only disburse funds that the Department approves in writing in accordance with N.J.A.C 7:26C-7.10;
3. The funds in the policy will be solely utilized for the purposes of conducting the remediation; and
4. The Department is the sole beneficiary to the policy.
3. Submission of an Environmental Insurance Policy: an Environmental Insurance Policy must be submitted within thirty (30) days of receipt of an ISRA remedial action workplan approval, execution of a remediation agreement; with signed copies of an administrative consent order; or as provided in an administrative order, directive, court order or other judicial settlement.

III. REMEDIATION TRUST FUND: a fund held by a trustee for the purpose of providing funds for the remediation of a site.

1. Issuer of a Remediation Trust Fund: an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by a Federal or New Jersey Agency.
2. Language of a Remediation Trust Fund: See Model document
3. C. Submission of a Remediation Trust Fund: a Remediation Trust Fund Agreement shall be submitted within fourteen (14) days of receipt of an ISRA remedial action workplan approval or execution of a remediation agreement; with signed copies of an administrative consent order; or as provided in an administrative order, directive, court order or other judicial settlement.

IV. SELF-GUARANTEE: allows a responsible person to prove to the Department that it has the sufficient funds for the remediation of a site.

1. A. Self-Guarantor: Person responsible for the remediation at the site or signatory to a Remediation Agreement or Administrative Consent Order.
2. Self-Guarantee Requirements: See Self-Guarantee application.
3. Submission of Self-Guarantee

A self-guarantee application must be submitted:


• with an application for a remediation agreement;
• upon submission of a remedial action workplan
• with signed copies of an Administrative Consent Order; or
• as provided in an Administrative Order, directive, court order or other judicial settlement.

AMOUNT OF REMEDIATION FUNDING SOURCE TO BE POSTED

In an amount equal to or greater than the estimated cost to implement the remediation, including, without limitation, the estimated cost of monitoring and maintaining all necessary engineering and institutional controls.

REMEDIATION FUNDING SOURCE SURCHARGE

There is imposed on every person who is required to establish and maintain a remediation funding source a remediation funding source surcharge in amount equal to 1% of the required Remediation Funding Source pursuant to N.J.S.A. 58:10B-11 and N.J.A.C. 7:26C-7.8. This amount is payable by cashier’s or certified check to:

"New Jersey Economic Development Authority (NJEDA) - Hazardous Discharge Remediation Fund"

The 1% Surcharge is to be submitted within thirty (30) calendar days after the effective date of the oversight document, receipt of the Department’s approval of a remedial action workplan or court order. A 1% surcharge payment is due annually thereafter on the same date.

NOTE: No Surcharge shall be paid on any portion of the remediation funding source provided in the form of Self-Guarantee and/or a loan or grant.

REQUESTS FOR DISBURSEMENTS FROM THE FUNDING SOURCE

A person who has established either a remediation trust fund, an environmental insurance policy or a line of credit may submit to the Department (to the ASSIGNED CASE MANAGER) once every three months a written request to use the remediation funding source to pay for the actual remediation costs, which includes the following information:

1. Identification of the site, including name, address, case number (if applicable), Masterfile ID number and program interest number if known, and status of the remediation;
2. An updated, detailed estimate of implementing the remediation including without limitation the estimated cost of maintaining and monitoring all necessary engineering and institutional controls;
3. A detailed description, including documentation, of remediation costs incurred and the specific remediation that has been completed;
4. A detailed description, including documentation, of remediation costs to be incurred and the specific remediation that will be completed under this request; and
5. The amount of the disbursement requested based on 3 and 4 above and the remediation remaining to be completed at the site.

Within thirty (30) calendar days after the Department's receipt of the written request submitted, the Department will review the request and respond as follows:

1. 1. The information is complete and the disbursement amount represents actual remediation costs therefore the disbursement is approved;
2. The information is complete, however, the requested disbursement amount includes remediation costs that the Department has not approved, and therefore, the Department will only disburse funds for the approved remediation costs; or
3. The information is incomplete, indicating the missing information, and the Department will not give further consideration to the disbursement request until the requester submits all the required information.

CHANGES IN THE REMEDIATION FUNDING SOURCE AMOUNT

The person required to establish a remediation funding source may at any time submit to the Department (to the ASSIGNED CASE MANAGER) a request to approve a reduction in the amount of the remediation funding source, along with a revised remediation cost estimate.

1. The Department will respond to requests within ninety (90) calendar days after the Department's receipt of such request.
2. Upon receipt of a written approval from the Department, the person required to establish the remediation funding source may decrease the remediation funding source amount to an amount equal to the amount approved by the Department.
3. The person required to establish the remediation funding source shall increase the remediation funding source amount to an amount equal to the revised cost estimate of the remediation within thirty (30) calendar days after:
   
   
   1. Completion of the remediation cost review required pursuant to N.J.A.C. 7-26C-5; or,
   2. Execution of a remediation agreement pursuant to the Industrial Site Recovery Act Rule, N.J.A.C. 7:26B; or
   3. Receipt of written notice from the Department that the cost of the remediation has increased.

Common Questions

1. When is an industrial establishment subject to ISRA?
   
   In order to be subject to ISRA, all of the following four conditions must exist:
   
   
1. The place of business or real property at which such business is conducted, has a subject North American Industry Classification System (NAICS) code as listed in N.J.A.C. 7:26 B - Appendix C subject to the specified exceptions and limitations. Appendix C of N.J.A.C. 7:26B can also be found at http://www.nj.gov/dep/srp/regs/isra/isra_c.htm.
2. An applicable transaction (change in ownership or cessation of operation), as specified in ISRA;
3. Operations of an industrial establishment must have been conducted after December 31, 1983; and
4. Hazardous substances or hazardous wastes were on-site. For small quantities of hazardous substances, refer to the DeMinimis Quantity Exemption section of ISRA, N.J.S.A. 13:1K-9.7.
2. What NAICS numbers are covered by ISRA?
   
   The ISRA subject North American Industry Classification System (NAICS) codes are listed in N.J.A.C. 7:26 B - Appendix C subject to the specified exceptions and limitations. Appendix C of N.J.A.C. 7:26B can also be found at http://www.nj.gov/dep/srp/regs/isra/isra_c.htm. If a business does not have an applicable NAICS, then it is not subject to ISRA.
3. Who may I speak with about an ISRA subject case?
   
   Usually cases are assigned to a case manager within a few days. If the case has not been assigned to a case manager, you can speak to the supervisor or a staff member in the BCAIN at (609) 292-2943.
4. Is it necessary for individuals who are subject to ISRA to hire an attorney or environmental consultant to comply with the law?
   
   That will depend on the complexity of the legal or environmental issues at a particular site. An applicant can work directly with the NJDEP staff before hiring an attorney or environmental consultant. However, in many cases, the issues can become very technical and the owner or operator must have someone knowledgeable in environmental affairs to assist them.
5. Does the NJDEP recommend environmental consultants?
   
   No, the NJDEP does not make recommendations on environmental consultants. The complexity of the remediation should drive a person's decision for an environmental consultant. You may refer to the NJDEP guide for Choosing an Environmental Consultant for Site Remediation.
6. How long does it take to complete the ISRA process for a transaction to proceed?
   
   That again will depend on the complexity of a particular site. However, the transaction may proceed earlier by executing a Remediation Agreement, which is handled by the BCAIN. In addition, the Voluntary Cleanup Program, overseen by the BCAIN (609) 292-2943 provides parties with the opportunity to obtain approvals prior to triggering ISRA. Once approvals have been granted the owner or operator could then proceed through with an alternate compliance process. If an owner or operator waits for a triggering event and the site needs little or no sampling, it takes an average of six months to complete the case. On the other hand, if the site requires extensive sampling to determine the nature and extent of any contamination and the possible development of a RAW, it could take a year or more to complete the remediation.
7. 5. Must NJDEP approve of all sampling and cleanup work at a site?
   
   ISRA allows owners and operators to conduct their PA/SI/RI without NJDEP pre-approval of plans provided that the NJDEP's Technical Requirements for Site Remediation, N.J.A.C. 7:26E and an approved schedule is followed. The NJDEP strongly encourages ISRA subject owners and operators to complete the investigation of their site without submitting workplans each step of the process. An owner or operator of an industrial establishment may also implement a soil remedial action at an industrial establishment without prior NJDEP approval of a soil Remedial Action Workplan when the remedial action can reasonably be expected to be completed pursuant to standards, criteria, and time schedules established by the NJDEP, within exceed five years from the commencement of the implementation of the remedial action.
   
   An owner or operator of an industrial establishment may not implement a remedial action involving the remediation of ground water or surface water without the prior approval by the NJDEP of a Remedial Action Workplan.
   
   It may be beneficial to investigate suspected areas and perform limited cleanups for relatively minor situations prior to a formal ISRA submission. The regulated community must, however, be aware that discovery of any contamination must be immediately reported to state and local officials. The NJDEP 24-hour hotline is 1-877-WARNDEP.
8. What other guidance documents are available to help the regulated community comply with ISRA?
   
   The Guidance Document for the Remediation of Contaminated Soils; Groundwater Quality Standards (N.J.A.C. 7:9-6); and the Technical Requirements for Site Remediation (N.J.A.C. 7:26E) are all available to assist in the evaluation of areas of potential environmental concern. These and many other guidance documents and publications are available via NJDEP's web site.
9. What is a Remediation Agreement?
   
   A Remediation Agreement is a written contract entered into between an owner or operator of an industrial establishment and the NJDEP which allows the ISRA triggering event to proceed prior to the completion of all ISRA requirements. This agreement stipulates who will be responsible for the remediation of the site. The transaction may be consummated upon the execution of a Remediation Agreement by the NJDEP and the person responsible for compliance with the Remediation Agreement and prior to obtaining a No Further Action or Remedial Action Workplan approval. For more information please visit the NJDEP Site Remediation Program Web page at http://www.state.nj.us/dep/srp.
10. What are the terms of a Remediation Agreement?
    
    There are three general terms of a Remediation Agreement:
1. specific timeframes that must be met in completing ISRA requirements;
2. posting of a remediation funding source equal to the estimated cost of remediation; and
3. penalties for failure to complete ISRA requirements.
11. When can I apply for a Remediation Agreement?
    
    Applications can be filed at any time during the case, but prior to the completion of the standard ISRA administrative process.
12. How are the areas to be investigated under ISRA determined in a multi-tenant leasehold situation?
    
    The area that must be investigated is the real property comprising the leasehold and any other property utilized in connection with the Industrial Establishment, including any storage areas, tanks, septic systems or other units that would be potential Areas of Concern under the Technical Requirements for Site Remediation (N.J.A.C. 7:26E). The property that is determined to be subject to ISRA review must be evaluated for both current and any historic areas of concern regardless of fault. For example, if the area of concern is on the leasehold or ever serviced the leasehold, it would be addressed under ISRA even if the tenant never used the area. However, if an area of concern was never used by the tenant, the area of concern is located off the leasehold portion and there has never been a connection during the tenancy, then the area of concern would not be addressed under ISRA.
13. Under ISRA, do I have to test an underground storage tank not regulated under the Federal or State Underground Storage Tank regulations when completing a Preliminary Assessment/Site Investigation (PA/SI), application for an expedited review, limited site review, or remediation in progress waiver?
    
    When applying for any ISRA approval including an expedited review, limited site review, or remediation in progress waiver, the owner or operator must certify that a PA/SI has been completed. Any area where hazardous substances are currently or were used or stored is considered an area of concern under ISRA and the Technical Requirements for Site Remediation. For non-regulated UST's, the SI can only be completed if sampling is performed around the UST pursuant to the Technical Regulations for Site Remediation, N.J.A.C. 7:26E.

For general questions regarding the ISRA process call the Office of Community Relations at (609) 984-3081. There is someone assigned to answer general questions.