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Remediation Funding Source FAQs

 

Frequently Asked Questions (FAQs)

  1. Why must the RFS mechanism comport with the Department’s model RFS mechanism?

    The RFS model documents have been crafted in conjunction with the attorneys at the Division of Law. The Department and the Division of Law do not have the resources to review every site-specific change a person responsible for conducting the remediation would like incorporated into the RFS mechanism. The model documents have been used for 25 years and are applicable in the vast majority of cases. In order to quickly and efficiently allow cases to move through the system, the Department requires the use of RFS model documents.

  2. What is the difference between a disbursement from RFS and a decrease of RFS?

    Money from the RFS can be disbursed to pay for actual remediation costs. A person responsible for conducting the remediation may request that their LSRP or the Department (depending on the type of RFS mechanism being used) authorize disbursement of funds from the RFS to pay for remediation costs. This request can be made once every three months.

    The amount of the RFS posted can be decreased if the LSRP determines that the estimated cost to complete the remediation is less than what was previously estimated. The person may request that the Department authorize a reduction in the amount of RFS when he or she receives notification from the LSRP that the estimated cost to complete remediation is less than the amount that is currently in the RFS. This can be done at any time during the course of the remediation.

  3. Why can’t the LSRP authorize disbursement from a letter of credit or environmental insurance policy?

    A letter of credit and an environmental insurance policy are mechanisms where the holder of the RFS requires the Department’s authorization in order to process any modifications.

  4. What is an environmental opportunity zone?

    The Environmental Opportunity Zone Act, N.J.S.A. 54:4-151 allows municipalities to pass an ordinance designating certain property, or portions of property, as an Environmental Opportunity Zone (EOZ.) The part of the property so designated is exempt from the requirement to post RFS for the remediation being conducted on that part of the property. The EOZ Act also provides a tax break for these properties. In order to claim the exemption from posting RFS, the person responsible for conducting the remediation must check this exemption on the Remediation Cost Review and RFS/FA form and attach a copy of the local EOZ ordinance.

  5. What is an innovative remedial action technology?

    An innovative remedial action technology is a new or alternative method or process for remediation of contamination that does not have a substantial operational record. The Department does not maintain a list of these types of technologies since it would be hard to keep such a list current. However, these types of technology may be discussed on the EPA or the ITRC websites. An innovative technology may be an existing technology that is being used to remediate contamination in an innovative way. In order to claim the exemption from the requirement to post RFS for using an innovative remedial action technology, the person responsible for conducting the remediation must check this exemption on the Remediation Cost Review and RFS/FA form and the LSRP must attach an explanation of why the innovation being used qualifies for the innovative remedial action technology. The Department will determine whether this exemption applies on a site-specific basis.

  6. Does a public college/university qualify for the government entity exemption?

    The Department considers state universities and community colleges to be government entities for the purpose of qualifying for the exemptions to the requirements to establish a remediation funding source and financial assurance.

  7. How does a third party petition the Department to avail itself of some or all of the moneys in a RFS established by another non-compliant party, pursuant to N.J.A.C. 7:26C-5.13(d)?

    If a person responsible for conducting the remediation fails to complete the remediation, after written notification, the Department will pull the money from the RFS and put it in a state account. The Administrative Requirements for the Remediation of Contaminated Sites [please see N.J.A.C. 26C-5.13(d)] allow for another party to petition the Department to use these funds to complete the remediation of the site. The person must petition the Department to disburse these funds pursuant to the requirements in N.J.A.C. 7:26C-5.11(a). The Department may authorize the disbursement of the funds when the petitioner demonstrates through the submission of a Remediation Cost Review and RFS/FA form that the remaining cost to remediate the site are less than the amount available in the state account. The Department wants to ensure that the RFS money, which is now public funds, is available to complete the remediation. The decision concerning the disbursement of these funds is at the discretion of the Department.

  8. When the requirement to establish RFS is triggered by the sale or transfer of an ISRA subject industrial establishment, can the proceeds of the sale be used fund the RFS?

    In limited circumstances, the Department will approve the request of a person responsible to post RFS to use the proceeds of the sale to fund the RFS. The person must send a letter or email to the supervisor of the RFS unit making such a request and must include evidence (e.g., a letter from the financial institution or trustee) that a financial institution or trustee will establish the RFS upon the closing of the real estate transaction triggering the need for the RFS. The person must submit the original RFS mechanism, the complete Remediation Cost Review and RFS/FA form and the 1% surcharge check to the Department within five business days of the closing of the real estate transaction.