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18 ELR 10084 | Environmental Law Reporter | copyright © 1988 | All rights reserved New Jersey's Improved ECRA Implementation: The State Answers Its CriticsLance R. MillerMr. Miller is the Assistant Director of the Industrial Site Evaluation Element in the New Jersey Department of Environmental Protection's Division of Hazardous Waste Management. He is responsible for the administration of the ECRA program. The positions put forth in this Dialogue represent the official position of the Department. New Jersey's innovative Environmental Cleanup Responsibility Act (ECRA) has been the subject of much discussion since it became effective on December 31, 1983.1 The majority of this discussion has focused on who is subject to ECRA and why it takes so long for the New Jersey Department of Environmental Protection to review a case. Harriett Jane Olson's recent Dialogue is an example of what is being said about the above two topics.2 After a review of the historical difficulties that the Department has faced in implementing ECRA, Ms. Olson discusses proposed amendments that could significantly reduce ECRA's coverage.3 Ms. Olson concludes that while the amendments are a step in the right direction, "a more thorough-going revision of ECRA and the Regulations could assist companies in their attempts to comply …."4 Unfortunately, many of the current discussions about the historical difficulties that the Department had in implementing ECRA often do not reflect the changes and improvements that have been made over the last 18 months. In addition, critics seem to have a propensity to systematically omit any mention of ECRA's accomplishments or benefits. Accordingly, this Dialogue will focus on the importance of ECRA and the efficiency improvements that have been made. The overall impact of the changes is that 83 percent of the documents are processed in less than three weeks and 95 percent of the documents received in the ECRA program are processed in less than 160 days (see Table 1). This is especially important in light of the fact that approximately 6500 documents are processed in a year. It also must be emphasized that the increased efficiency was the result of changes in the administrative process and not revisions to the statute. Many critics operate on the flawed presumption that the ability to administratively process paperwork is directly related to the wording in the statute. My years in public service have clearly demonstrated to me that the processing of paper is related to the administrative process and the staffing levels and not the wording in the law. As for the benefits of ECRA, I think the $11 million already expended on over 300 remedial actions and the $30 million of cleanup work currently taking place at another 70 sites speak for themselves.
The purpose of ECRA is straightforward and basically noncontroversial.5 The Act is designed to require what amounts to an environmental audit of any facility that is subject to the Act at the time of transfer or cessation of operations. By conducting an audit of current and past operations of a site at these critical times, environmental remediation may occur before the contamination has migrated from the site. Thus, the site can often be remediated before significant adverse impacts have occurred to the public health and the environment. In addition to the benefit of restoring industrial sites to acceptable conditions, ECRA serves as an industrial/commercial buyer protection program similar to the home buyer protection program. The environmental audit performed under ECRA identifies immediate and potential environmental problems. These problems are then addressed by the transferor, and the buyer obtains property which he or she might otherwise become responsible for remediating. Because of ECRA, a person buying an industrial establishment in New Jersey may limit his or her concerns to the impacts of his or her own operations and not worry that some previous owner caused an environmental problem that may become his or her liability. The topic of who has to comply with ECRA has received a tremendous amount of attention and is currently the subject of proposed legislative revisions. Much of the discussion to date has focused on why certain types of transactions are subject to ECRA. The proposed statutory amendments to ECRA would significantly reduce the number of industrial establishments that are subject to the Act.6 This is not a valid approach to take since we are attempting to restore industrial property to acceptable conditions and identify problems before they adversely impact surrounding areas or the public health. The topic of who or when an industrial facility is subject to ECRA should not be the prime concern. If any facility has contamination at the site, the responsible parties are liable for remediating the contamination under New Jersey's Spill Compensation and Control Act.7 This requirement applies regardless of whether they are subject to ECRA or not. It is to the benefit of all parties and the citizens of the state that the necessary remediation occur as rapidly as possible. If certain transactions are removed from the purview of ECRA, then the result will be a delay in identifying and remediating those sites. Thus, a site that would have been remediated under ECRA may have contamination migrate over larger areas. More extensive and costly cleanup activities would then be necessary and, of greater concern, additional exposure of the public to hazardous substances and wastes would likely result. Department Actions to Improve Efficiency The main concern of the Department, and what should be the main concern of those subject to ECRA, is the time required to process a case once the Department has been notified that a transaction or cessation of operations will occur. The Department has spent the last 18 months instituting management improvements in the ECRA program. Significant progress has already been made in reducing the time required to process documents. Unfortunately, many people continue to report and highlight the delays that have historically plagued the Department and do not recognize the changes that have already occurred. The ECRA program basicallyhas the workload divided into four broad categories: applicability determinations, administrative consent orders (ACOs), low environmental concern (LEC) cases, and high environmental concern (HEC) cases. These program areas have been evaluated by our management, resulting in changes to improve the program. The Department receives over 5,000 requests annually concerning whether a particular transaction is subject to ECRA. Often these requests are accompanied by the need for a rapid response so the transaction can proceed as scheduled. An automated system of processing these requests was established that enables simple applicability determinations to be processed in two to five days. An average of three weeks is necessary for the more complex transactions. Currently, 74 percent of the applicability determinations are processed in less than two weeks. ACOs allow a transaction subject to ECRA to proceed prior to completion of the full audit. The ACO is an agreement between a party or parties to the transaction and the Department that sets forth a schedule for compliance with ECRA and includes a requirement that financial assurances be obtained for the estimated cost of the sampling and remediation at the site. After the ACO is fully executed, the subject transaction may proceed. This has become a major instrument in allowing small and large transactions to occur when significant environmental concerns could have held up the transaction for a long period of time. The Department formalized its procedures for processing ACOs and now allows the preparation of the ACO to occur in an average of three weeks after the application is completed. The backlog of ACO requests that developed at the end of 1986, due to the changes in the federal tax law, has been eliminated. All requests are now immediately assigned to a staff member for preparation of the ACO. This was accomplished while executing almost 100 percent more ACOs from January to October 1987 than in the same period in 1986. Low Environmental Concern Cases The time required to complete the review of industrial establishments has been a major concern of the Department as well as the regulated community. Legitimate complaints were received as to why it should take a year or more to review a case of an industrial establishment that was "clean." In response to this situation, the Department began separately processing cases based on the degree of environmental concern associated with the site. The cases with limited areas of environmental concern are now assigned immediately upon completion of the application forms (see Table 2). The processing time for these cases, after the completion of the application, has recently been reduced to about 80 days and is expected to be reduced further still in the coming months. Cases remain, however, where industrial establishments have not yet adequately completed an application over a year after it was first submitted. The Department is focusing on these cases to determine if ECRA is still applicable and, if so, to obtain completion of such applications as quickly as possible. These changes to the processing of low environmental concern cases are especially significant since between 60 and 70 percent of all cases requiring a detailed review fall into this category. The majority of industrial establishments subject to ECRA can now undergo the necessary reviews and have approvals issued for their transactions within two to three months of submission of a complete application.
The one remaining problem area facing the Department is the inability to assign cases quickly that have identified environmental concerns. Currently up to six months' delay is encountered in case assignment after the application is complete. These cases require detailed reviews and sampling to determine the extent and degree of contamination and the need for remediation at the site. Although efficiency improvements have been made in this area, additional staffing was required. The necessary positions have been created and many staff members have been added in the past year. The combination of new staff and efficiency improvements is beginning to show results. The case assignment delay was reduced to four months at the end of 1987 and is expected to be eliminated in the spring (see Table 3). While this improvement will allow for the more rapid processing of these cases, it is still anticipated that high environmental concern cases may continue to require a year or more before the site is determined to be free of contamination or an appropriate cleanup plan is developed. This time frame should be considered in light of the 5 to 10 years required for the processing of Superfund sites. Therefore, the Department will continue to make ACOs available for this type of case to prevent further delays in business transactions.
Meeting Other Criticisms In addition to the complaints about proccessing times for ECRA cases, the Department has been criticized for not having clearly defined applicability criteria, not allowing the sale of a clean portion of an industrial establishment, requiring an ECRA review of auxiliary activities of an industrial establishment that would not be subject as an independent activity, not having cleanup standards, and having an inexperienced staff. The regulations that became effective on January 1, 1988, address the first two criticisms by specifying a detailed list of events that are subject to ECRA and providing a mechanism that will allow for the transfer of a portion of an industrial establishment that has not been involved in activities utilizing hazardous substances or wastes. There will undoubtedly be objections to the applicability criteria specified in the regulations. However, we can no longer be criticized for not having a "mechanism for determining the Department's position on the applicability of the statute."8 The subject of ECRA's applicability to auxiliary facilities has received much attention since, at first glance, it does not seem appropriate to subject an activity to ECRA if others doing the same activity may not be required to comply with theAct. However, when considered in light of the entire statute the approach is appropriate. The statute specifies the industries that will be subject to ECRA based on their Standard Industrial Classification (SIC) code.9 The manual that is utilized to determine the SIC code for a facility is required by statute to be the basis for what industries are subject to ECRA. The SIC manual does create some situations that may not seem logical. Certain facilities are not subject to ECRA even though they conduct some activities that would by themselves be covered because the SIC manual determines the SIC code based on all the activities of a facility. Therefore, there may be situations that should be covered and are not and other situations that are covered that should not be. Although this may be an issue that could be dealt with in amendments to ECRA, we must remember that the purpose of the statute is to audit a specified group of industrial establishments. The simple bottom line is: if the sites are clean, then ECRA does not pose a significant burden, and if the site is contaminated the industry is responsible for that remediation under state law regardless of ECRA. The Department recognizes that standards must be developed for soil and groundwater. Although we are working to prepare regulatory standards, this is an extremely difficult task. The lack of standards impacts all activities dealing with hazardous waste management and since this is still a relatively new field there is no consensus as to how the standards should be developed. We are making significant progress in developing an approach that will result in the ability to specify numerical standards and are monitoring the activities of other states and the federal government in this area. The criticism of the experience of the Department's ECRA staff is coupled with complaints of inconsistency of the reviews on the part of various staff members. The Department did hire many new staff members in the summer of 1987 and this large influx may be creating some consistency problems. However, the ECRA program has been set up to allow for new staff to develop under the guidance of the experienced staff. Standard operating procedures are also being developed that will improve the consistency of decisionmaking. Lastly, it should be noted that the Department is not the only one that has hired inexperienced staff. Due to the expansion of this field many firms have either had to switch people from other disciplines or hire recent graduates with environmental degrees. Both the quality of our reviews and the consultant submissions require continued efforts at improvement. The Department recognizes that there are additional areas for improving the processing of cases. But an important fact remains: much has been accomplished over the last 18 months. By evaluating the program from a managerial perspective, many efficiency improvements have been implemented. Backlogs have been eliminated. Processing times have been reduced. New regulations have been promulgated. Policies have been clarified. The Department will continue to strive to reduce processing times without sacrificing the quality of our reviews. We will also continue to work closely with the regulated community so that the requirements are better understood and compliance is more readily achieved. However, the continued discussions on who should be subject to ECRA arenot productive and detract from what should be our common goal: to restore New Jersey's industrial property to an environmentally acceptable condition where buying and selling is not a "high stakes" roll of the dice, and to prevent the creation of a new generation of hazardous waste sites that would cost billions in future taxpayer's dollars to remedy. 1. 1983 N.J. Laws 330, codified at N.J. STAT. ANN. § 13:1K-6 et seq. 2. Olson, ECRA: New Jersey's Cleanup Statute, 17 ELR 10395 (1987). 3. Assembly Bill A-4151 ("An Act to Amend and Supplement the Environmental Cleanup Responsibility Act"), 202nd Legislative Session, 2nd Annual Session (1987). 4. Olson, supra note 2, at 10399. 5. N.J. STAT. ANN. § 13:1K-7 (1983). 6. A-4151, supra note 3. 7. N.J. STAT. ANN. § 58:10-22.11 et seq. 8. Olson, supra note 2, at 10397. 9. N.J. STAT. ANN. § 13:1K-8 (1983). 18 ELR 10084 | Environmental Law Reporter | copyright © 1988 | All rights reserved |