Funding Source FAQs
Frequently Asked Questions
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
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
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.
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.
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.
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.
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.
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
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.