On January 6, 1998, Governor Whitman signed into law the Brownfield and Contaminated Site Remediation Act (BCSRA). This represents yet another significant step aimed at redeveloping New Jersey's inventory of roughly 9,000 brownfields, which are contaminated, usually urban properties, which are either not utilized at all, or severely under-utilized.

The new law is designed to promote economic redevelopment, create jobs, protect the public health and environment and supply additional tax revenue to New Jersey's urban areas.

The BCSRA was a compromise of various bills that were introduced during this Legislative Session. Many groups with seemingly divergent interests participated in the legislative process to reach this end. It is indeed quite an accomplishment that this law exists at all. Now, we will all have to learn how this new law will function under real life conditions: with real properties, real municipalities, real potentially liable parties, real potential claimants, and real potential developers.

LIABILITY
Perhaps the key features associated with this new law concern the legal liability of owners, buyers and sellers of these properties. Most significantly, under the BCSRA, liability protection, in the form of a covenant not to sue by the State, is provided to innocent persons who undertake a site remediation. This is an enforceable promise from New Jersey that, under specified circumstances, the property owner will never be sued over on-site property contamination.

Many developers have long argued for the need of a covenant not to sue. Having such a provision now makes New Jersey's cleanup protection similar to the protection found in other States, such as in Pennsylvania's Act 2 program. The covenant not to sue may also apply to subsequent property owners as well and lessees and operators.

Under previous Spill Act amendments, lenders were provided with a fair amount of Spill Act liability protection relating to properties on which they had made loans. This is now expanded to include those holding security interests in certain underground storage tanks as well.

Public entities are now provided with expanded liability protection relating to properties that are acquired expressly for redevelopment purposes. Previously, protection only extended to properties that were involuntarily acquired, such as for tax foreclosure purposes.

TECHNICAL MODIFICATIONS
There is also movement towards privatization of cleanups. This involves the cookbook approach to DEP supervised cleanups, where protocols are provided by rule and little DEP oversight is required. While other States are further along in relying upon this cookbook approach, more traditional States such as Delaware have not started down this road.

FUNDING PROGRAMS ENLARGED
Previously, developers that cleaned old municipal waste landfills could be reimbursed for up to 75% of the cleanup costs from sales tax receipts generated by new businesses on the former landfill site. Under the BCSRA, developer agreements can be entered into whereby the same 75% incentive will be available for non-landfill sites as well.

The availability of grant money is now also enlarged for municipalities. Under current law, municipalities may use grant money for preliminary assessments, site investigations and remedial investigations of properties involuntarily acquired. That program is enlarged to include properties acquired expressly for redevelopment purposes.

ENVIRONMENTAL OPPORTUNITY ZONE ACT IS EXPANDED
The Environmental Opportunity Zone Act represented one of New Jersey's important earlier brownfields statutes. It allowed municipalities to offer up to ten years of tax relief to property owners that pledged to clean their properties and use them for industrial purposes. This was another win-win property recycling program. The BCSRA now expands the scope of eligible properties to cover residential properties as well as other properties which will be productively used.

The information provided in this column is written by Stuart Lieberman,a practicing environmental attorney, and is for general information purposes only. It is not legal advice and should not be used in place of legal advice.

Stuart Lieberman, Esq., and IRED.Com, Inc., will not accept any responsibilty for any reliance on the information in this column or any damages whatsoever resulting from reading this column.