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Remediation Funding Source


Remediation Funding Source (RFS)

Purpose of RFS

The purpose of an RFS is to ensure that funds are available to complete the remediation of a site if the person who is required to conduct remediation fails to do so.

Who must post and when?

Owners and operators of an industrial establishment subject to ISRA must establish an RFS and submit it with a Remediation Certification prior to the sale or transfer of ownership or operations of the industrial establishment. An RFS is also required, if not already established, upon an LSRP's certification of a remedial action work plan.

Any party who is liable pursuant to the Spill Act who is required via an Administrative Order or Spill Act Directive issued by the Department or a Court Order requiring cleanup pursuant to the Spill Act, or who executed an Administrative Consent Order with the Department which included an RFS requirement or a person subject to Direct Oversight, must establish an RFS as instructed by the Department or court.

What are the requirements?

Parties required to post RFS must comply with the RFS requirements detailed at N.J.A.C. 7:26C-5.

How to determine the amount of RFS

The amount of the RFS must equal the cost to complete the remediation, including the DEP's fees and oversight costs, and including the estimated cost to operate, maintain and inspect engineering controls. Once financial assurance (FA) has been established as part of a Remedial Action Permit the amount of the remaining RFS may be adjusted to reflect costs to remediate AOCs not included under the permit (see FA below).

1% RFS surcharge

Parties must pay a 1% surcharge on the amount of RFS required to be posted, except when a self-guarantee is used. The surcharge is due when the RFS is required to be established and annually thereafter (see N.J.A.C. 7:26C-5.10).

Exemptions from the requirement to post RFS

A person responsible for conducting the remediation is exempt from the requirement to post RFS when: (see N.J.A.C. 7:26C-5.2(b)).

  • The person is implementing an unrestricted or limited restricted use remedial action. The exemption ONLY applies to the area(s) of the site where the unrestricted or limited restricted use remedial action is being implemented.
  • The site or portion of the site being remediated is within an environmental opportunity zone. The exemption ONLY applies to the area(s) of the site that is designated as an environmental opportunity zone. Please see FAQ #4 for more information.
  • The person is implementing an innovative technology. Please see FAQ #5 for more information.
  • The person is a government entity.
  • The person is undertaking remediation at his or her primary or secondary residence.
  • The person is the owner or operator of a child care center licensed pursuant to N.J.S.A. 18A:1-1, or a charter school established pursuant to N.J.S.A. 18A:36A-1.

Direct Oversight Requirements for RFS

N.J.A.C. 7:26C-14 contains the requirements for persons responsible for conducting the remediation of a contaminated site under Direct Oversight, including the criteria for who is subject to Direct Oversight and the remediation requirements for those who are subject to Direct Oversight. One of the criteria for remediating a site under Direct Oversight is that the person responsible for conducting the remediation must post RFS in the form of a Remediation Trust Fund. The requirement for sites being remediated under Direct Oversight include:

  • The amount of the RFS posted must be the amount that the Department requires when it undertakes direct oversight.
  • The Department must approve in writing the amount of the funds to be disbursed in order for the holder of the RFS instrument to disburse the funds
  • The person must get Department approval to reduce the amount of the RFS and must increase the amount of the RFS in response to a demand from the Department to do so.

Differences between RFS and FA

  • RFS is for ongoing remediation whereas FA is for (OM&M) of the engineering control.
  • RFS can be used to pay for actual remediation costs, while FA cannot be used to fund the (OM&M) of the engineering control.
  • Cannot use self-guarantee for a FA mechanism.
  • Do not have to pay a 1% surcharge for FA.

NJDEP has created a RFS guide, as well as a list of FAQs for more information.

Contacts RFS:

Tina Layre

Audrey Williams

Comfort Caulker

Jennifer MacLeod

Gina Tonti