§ 58:10B-3 — Establishment, maintenance of remediation funding source.

25. a. Except as otherwise provided in section 27 of P.L.2009, c.60 (C.58:10C-27), the owner or operator of an industrial establishment or any other person required to perform remediation activities pursuant to P.L.1983, c.330 (C.13:1K-6 et al.), or a discharger, a person in any way responsible for a hazardous substance, or a person otherwise liable for cleanup and removal costs pursuant to P.L.1976, c.141 (C.58:10-23.11 et seq.) who has been issued a directive or an order by a State agency, who has entered into an administrative consent order with a State agency, or who has been ordered by a court to clean up and remove a hazardous substance or hazardous waste discharge pursuant to P.L.1976, c.141 (C.58:10-23.11 et seq.), shall establish and maintain a remediation funding source in the amount necessary to pay the estimated cost of the required remediation. A person who performs a remediation in an environmental opportunity zone is not required to establish or maintain a remediation funding source. A person who uses an innovative technology or who, in a timely fashion, implements an unrestricted use remedial action or a limited restricted use remedial action for all or part of a remedial action is not required to establish a remediation funding source for the cost of the remediation involving the innovative technology or permanent remedy. A government entity, a person who undertakes a remediation at their primary or secondary residence, the owner or operator of a child care center licensed pursuant to P.L.1983, c.492 (C.30:5B-1 et seq.) who performs a remediation at the licensed child care center, or the person responsible for conducting a remediation at a public school or private school as defined in N.J.S.18A:1-1, or a charter school established pursuant to P.L.1995, c.426 (C.18A:36A-1 et seq.), shall not be required to establish or maintain a remediation funding source. A person required to establish a remediation funding source pursuant to this section shall provide to the department satisfactory documentation that the requirement has been met. The remediation funding source shall be established in an amount equal to or greater than the cost estimate of the implementation of the remediation (1) as approved by the department or as determined by the licensed site remediation professional, as applicable, in accordance with rules and regulations adopted by the department pursuant to section 29 of P.L.2009, c.60 (C.58:10C-29), (2) as provided in an administrative consent order or remediation agreement or remediation certification as required pursuant to subsection e. of section 4 of P.L.1983, c.330, (3) as stated in a departmental order or directive, or (4) as agreed to by a court, and shall be in effect for a term not less than the actual time necessary to perform the remediation at the site. Whenever the remediation cost estimate increases, the person required to establish the remediation funding source shall cause the amount of the remediation funding source to be increased to an amount at least equal to the new estimate. Whenever the remediation cost estimate decreases, the person required to obtain the remediation funding source may file a written request to the department to decrease the amount in the remediation funding source or may submit written documentation to the department certified by the licensed site remediation professional of the details of the decrease in the cost estimate, as applicable. The remediation funding source may be decreased to the amount of the new estimate upon written approval by the department delivered to the person who established the remediation funding source or upon submission of the certification by the licensed site remediation professional, as applicable. b. The department may not require any other financial assurance by the person responsible for conducting the remediation other than that required in this section. In the case of a remediation performed pursuant to P.L.1983, c.330, the remediation funding source shall be established no more than 14 days after the approval by the department or the certification by the licensed site remediation professional of a remedial action workplan, upon approval of a remediation agreement pursuant to subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), or upon submission of a remediation certification pursuant to subsection e. of P.L.1983, c.330, unless the department approves an extension. In the case of a remediation performed pursuant to P.L.1976, c.141, the remediation funding source shall be established as provided in an administrative consent order signed by the parties, as provided by a court, or as directed or ordered by the department. In the case of a remediation performed under the department's oversight pursuant to section 27 of P.L.2009, c.60 (C.58:10C-27), the remediation funding source shall be established at the time the person becomes subject to the department's oversight. The establishment of a remediation funding source for that part of the remediation funding source to be established by a grant or financial assistance from the remediation fund may be established for the purposes of this subsection by the application for a grant or financial assistance from the remediation fund and satisfactory evidence submitted to the department that the grant or financial assistance will be awarded. However, if the financial assistance or grant is denied or the department finds that the person responsible for establishing the remediation funding source did not take reasonable action to obtain the grant or financial assistance, the department shall require that the full amount of the remediation funding source be established within 14 days of the denial or finding. Except as provided in section 27 of P.L.2009, c.60 (C.58:10C-27), the remediation funding source shall be evidenced by the establishment and maintenance of (1) a remediation trust fund, administered by an entity that has the authority to act as a trustee and whose trust operations are regulated and examined by a federal or State agency, or governed by court rule, (2) an environmental insurance policy, issued by an entity licensed by the Department of Banking and Insurance to transact business in the State of New Jersey, to fund the remediation, (3) a line of credit from a financial institution regulated pursuant to State or federal law and satisfactory to the department authorizing the person responsible for performing the remediation to borrow money, (4) a self-guarantee, (5) a letter of credit from a financial institution regulated pursuant to State or federal law that guarantees the performance of the remediation by the person to the satisfaction of the department, or (6) a surety bond from an entity that is listed as an acceptable surety on federal bonds in United States Treasury Department Circular 570, or by any combination thereof. Where it can be demonstrated that a person cannot establish and maintain a remediation funding source for the full cost of the remediation by a method specified in this subsection, that person may establish the remediation funding source for all or a portion of the remediation, by securing financial assistance from the Hazardous Discharge Site Remediation Fund as provided in section 29 of P.L.1993, c.139 (C.58:10B-7). c. A remediation trust fund shall be established pursuant to the provisions of this subsection. An originally signed duplicate of the trust agreement shall be delivered to the department (1) by certified mail, overnight delivery, or personal service within 14 days of receipt of notice from the department that the remedial action workplan or remediation agreement as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9) is approved, (2) within 14 days of submission to the department of a remedial action workplan certified by a licensed site remediation professional as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), (3) upon submission of a remediation certification to the department as provided in subsection e. of section 4 of P.L.1983, c.330, or (4) as specified in an administrative consent order, civil order, or order of the department, as applicable. The remediation trust fund agreement shall conform to a model trust fund agreement as established by the department and shall be accompanied by a certification of acknowledgment that conforms to a model established by the department. The trustee shall be 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. The trust fund agreement shall provide that the remediation trust fund may not be revoked or terminated by the person required to establish the remediation funding source or by the trustee without the written consent of the department. The person who establishes the remediation funding source in the form of a trust fund may use the remediation funding source to pay for the actual cost of the remediation. The trustee shall disburse to the person required to establish the remediation funding source, or to the department or transferee of the property, as appropriate, only those moneys as the department or the licensed site remediation professional authorizes, in writing, to be disbursed. The trustee shall release to the person who established the remediation funding source, or to the department or transferee of the property, as appropriate, only those moneys as the department authorizes, in writing, to be released. For any remediation subject to the oversight of the department pursuant to section 27 of P.L.2009, c.60 (C.58:10C-27), the person entitled to receive money from the remediation trust fund shall submit documentation to the department detailing the costs incurred or to be incurred as part of the remediation. Upon a determination by the department that the costs are consistent with the remediation of the site, the department shall, in writing, authorize a disbursement of moneys from the remediation trust fund in the amount of the documented costs. The department shall return the original remediation trust fund agreement to the trustee for termination after the department receives an alternative remediation funding source as specified in this section or the department notifies the person required to establish and maintain the remediation funding source that that person is no longer required to maintain a remediation funding source for remediation of the contaminated site. d. An environmental insurance policy shall be established pursuant to the provisions of this subsection. An originally signed duplicate of the insurance policy shall be delivered to the department (1) by certified mail, overnight delivery, or personal service within 14 days of receipt of notice from the department that the remedial action workplan or remediation agreement, as provided in subsection e. of section 4 of P.L.1983, c.330, is approved, (2) within 14 days of submission to the department of a remedial action workplan certified by a licensed site remediation professional as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), (3) upon submission of a remediation certification to the department as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), or (4) as specified in an administrative consent order, civil order, or order of the department, as applicable. The environmental insurance policy shall be issued by an entity that is licensed by the New Jersey Department of Banking and Insurance to transact business in the State. An environmental insurance policy cannot be revoked or terminated without the prior written approval of the department, except upon failure by the insured to pay the premium. The issuer of the environmental insurance policy may revoke or terminate the policy for failure to pay the premium only after notifying the person who established the remediation funding source and the department, by certified mail, of the decision to revoke or terminate the policy. The insurance company that provides the environmental insurance policy shall reduce the policy only as the department directs in writing. The insurance company that provides the environmental insurance policy shall release to the department or to a person authorized to perform the remediation pursuant to subsection g. of this section only moneys authorized by the department, in writing, to be released. The department shall authorize, in writing, the termination of the environmental insurance policy after the department receives an alternative remediation funding source as specified in this section or the department notifies the person required to establish and maintain the funding source that the person is no longer required to maintain a remediation funding source for the remediation of the contaminated site. e. A line of credit shall be established pursuant to the provisions of this subsection. A line of credit shall allow the 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 for which the line of credit was established. An originally signed duplicate of the line of credit agreement shall be delivered to the department (1) by certified mail, overnight delivery, or personal service within 14 days of receipt of notice from the department that the remedial action workplan or remediation agreement as provided in subsection e. of section 4 of P.L.1983, c.330 is approved, (2) within 14 days of submission to the department of a remedial action workplan certified by a licensed site remediation professional as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), (3) upon submission of a remediation certification to the department as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), or (4) as specified in an administrative consent order, civil order, or order of the department, as applicable. The line of credit agreement shall conform to a model agreement as established by the department and shall be accompanied by a certification of acknowledgment that conforms to a model established by the department. The line of credit shall be issued by an institution that is licensed by the New Jersey Department of Banking and Insurance to transact business in the State, or by a federally regulated bank. The line of credit shall not be allowed to expire, unless the institution provides the appropriate notification to the department and the borrower, as defined in a model agreement established by the department. The person who establishes the remediation funding source in the form of a line of credit may use the remediation funding source to pay for the actual cost of the remediation. The institution providing the line of credit shall disburse to the person required to establish the remediation funding source, or to the department or transferee of the property, as appropriate, only those moneys as the department or the licensed site remediation professional authorizes, in writing, to be disbursed. The institution providing the line of credit shall release to the person who established the remediation funding source, or to the department or transferee of the property as appropriate, only those moneys as the department authorizes, in writing, to be released. The department shall return the original line of credit agreement to the institution providing the line of credit for termination after the department receives an alternative remediation funding source as specified in this section, or after the department notifies the person required to establish and maintain the remediation funding source that that person is no longer required to maintain a remediation funding source for remediation of the contaminated site. f. A person may self-guarantee a remediation funding source upon the submittal of documentation to the department demonstrating that the cost of the remediation would not exceed one-third of the tangible net worth of the person required to establish the remediation funding source, and that the person has a cash flow sufficient to assure the availability of sufficient moneys for the remediation during the time necessary for the remediation. Documentation shall be delivered to the department (1) by certified mail, overnight delivery, or personal service within 14 days of receipt of notice from the department that the remedial action workplan or remediation agreement as provided in subsection e. of section 4 of P.L.1983, c.330 is approved, (2) within 14 days of submission to the department of a remedial action workplan certified by a licensed site remediation professional as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), (3) upon submission of a remediation certification pursuant to the department as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), or (4) as specified in an administrative consent order, civil order, or order of the department, as applicable. Satisfactory documentation of a person's capacity to self-guarantee a remediation funding source shall consist of audited financial statements, in which the auditor expresses an unqualified opinion, that includes a statement of income and expenses or similar statement of that person and the balance sheet or similar statement of assets and liabilities as used by that person for the fiscal year of the person making the application that ended closest in time to the date of the self-guarantee application. In the case of a special purpose entity established specifically for the purpose of acquiring and redeveloping a contaminated site, and for which a statement of income and expenses is not available, the documentation shall include a statement of assets and liabilities certified by a certified public accountant. The self-guarantee application shall be certified as true to the best of the applicant's information, knowledge, and belief, by the chief financial, or similar officer or employee, or general partner, or principal of the person making the self-guarantee application. A person shall be deemed by the department to possess the required cash flow pursuant to this section if that person's gross receipts exceed its gross payments in that fiscal year in an amount at least equal to the estimated costs of completing the remedial action workplan schedule to be performed in the 12-month period following the date on which the application for self-guarantee is made and the individual or entity possesses a net cash flow provided by operating activities in an amount at least equal to the estimated costs of completing the remediation in the 12-month period following the date the application is made. In the event that a self-guarantee is required for a period of more than one year, applications for a self-guarantee shall be renewed annually pursuant to this subsection for each successive year. The department may establish requirements and reporting obligations to ensure that the person proposing to self-guarantee a remediation funding source meets the criteria for self-guaranteeing prior to the initiation of remedial action and until completion of the remediation. g. (1) If the person required to establish the remediation funding source fails to perform the remediation as required, or fails to meet the conditions established pursuant to paragraph (3) of subsection a. of section 27 of P.L.2009, c.60 (C.58:10C-27) or section 1 of P.L.2013, c.283 (C.58:10C-27.1), or the mandatory remediation timeframes or expedited site specific timeframes established pursuant to section 28 of P.L.2009, c.60 (C.58:10C-28) for the performance of the remedial action, the department shall make a written determination of this fact. A copy of the determination by the department shall be delivered to the person required to establish the remediation funding source and, in the case of a remediation conducted pursuant to P.L.1983, c.330 (C.13:1K-6 et al.), to any transferee of the property. Following this written determination, the department may perform the remediation in place of the person required to establish the remediation funding source. In order to finance the cost of the remediation the department may make disbursements from the remediation funding source, or, if sufficient moneys are not available from those funds, from the remediation guarantee fund created pursuant to section 45 of P.L.1993, c.139 (C.58:10B-20). (2) The transferee of property subject to a remediation conducted pursuant to P.L.1983, c.330 (C.13:1K-6 et al.), may, at any time after the department's determination of nonperformance by the owner or operator required to establish the remediation funding source, petition the department, in writing, with a copy being sent to the owner and operator, for authority to perform the remediation at the industrial establishment. The department, upon a determination that the transferee is competent to do so, may grant that petition which shall authorize the transferee to perform the remediation as specified in an approved remedial action workplan, or to perform the activities as required in a remediation agreement, or as provided in a remediation certification, and to avail itself of the moneys in the remediation trust fund, letter of credit, line of credit, or surety bond, or to make claims upon the environmental insurance policy for these purposes. The petition of the transferee shall not be granted by the department if the owner or operator continues or begins to perform its obligations within 14 days of the petition being filed with the department. (3) After the department has begun to perform the remediation in the place of the person required to establish the remediation funding source or has granted the petition of the transferee to perform the remediation, the person required to establish the remediation funding source shall not be permitted by the department to continue its performance obligations except upon the agreement of the department or the transferee, as applicable, or except upon a determination by the department that the transferee is not adequately performing the remediation. h. A letter of credit shall be established pursuant to the provisions of this subsection. A letter of credit shall allow a person to guarantee the availability of funds up to a limit established in a written agreement in order to guarantee the payment of the cost of the remediation for which the letter of credit was established. An originally signed duplicate of the letter of credit agreement shall be delivered to the department (1) by certified mail, overnight delivery, or personal service within 14 days of receipt of notice from the department that the remedial action workplan or remediation agreement as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9) is approved, (2) within 14 days of submission to the department of a remedial action workplan certified by a licensed site remediation professional as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), (3) upon submission of a remediation certification to the department as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), or (4) as specified in an administrative consent order, civil order, or order of the department, as applicable. The letter of credit agreement shall conform to a model agreement as established by the department and shall be accompanied by a certification of acknowledgment that conforms to a model established by the department. The letter of credit shall be issued by an entity that is licensed by the New Jersey Department of Banking and Insurance to transact business in the State, or by a federally regulated bank. The letter of credit shall not be allowed to expire unless the financial institution provides the appropriate notification to the department and the application, as defined by a model agreement established by the department. The financial institution that provides the letter of credit shall release to the department or to a person authorized to perform the remediation pursuant to subsection g. of this section, only moneys authorized by the department, in writing, to be released. The department shall return the original letter of credit to the financial institution providing the letter of credit for termination after the department receives an alternative remediation funding source as authorized in this section, or after the department notifies the person required to establish and maintain the remediation funding source that that person is no longer required to maintain a remediation funding source for the remediation of the contaminated site. i. A surety bond shall be established pursuant to the provisions of this subsection. A surety bond shall allow a person to guarantee the availability of funds up to a limit established in a written agreement in order to guarantee the payment of the cost of the remediation for which the surety bond was established. An originally signed duplicate of the surety bond agreement shall be delivered to the department (1) by certified mail, overnight delivery, or personal service within 14 days of receipt of notice from the department that the remedial action workplan or remediation agreement as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9) is approved, (2) within 14 days of submission to the department of a licensed site remediation professional certified remedial action workplan as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), (3) upon submission of a remediation certification to the department as provided in subsection e. of section 4 of P.L.1983, c.330 (C.13:1K-9), or (4) as specified in an administrative consent order, civil order, or order of the department, as applicable. The surety bond agreement shall conform to a model agreement established by the department and shall be accompanied by a certification of acknowledgment that conforms to a model established by the department. The surety company issuing the bond must be a company that is listed as an acceptable surety on federal bonds in United States Treasury Department Circular 570. The surety bond shall not be cancelled unless the surety company provides the appropriate notice of cancellation to the department and the principal, as defined in a model agreement established by the department. The surety company that provides the surety bond shall release to the department, or to a person authorized to perform the remediation pursuant to subsection g. of this section, only monies authorized by the department, in writing, to be released. The department shall return the original surety bond to the surety company for termination after the department receives an alternative remediation funding source as specified in this section or the department notifies the person that that person is no longer required to maintain a remediation funding source for remediation of the contaminated site. L.1993, c.139, s.25; amended 1997, c.278, s.11; 2003, c.224, s.2; 2009, c.60, s.43; 2019, c.263, s.8.