E-Newsletter Alerts

There have been a number of recent regulatory developments with significant impact on industry and development in New Jersey. This issue of In-Sites discusses these developments. One article announces the imminent release of rules for a CO2 reduction program designed to combat global warming. A second article discusses the new due diligence standards promulgated by USEPA on August 26, 2004. Two articles describe the new Highlands Protection and Planning Act and the Permit Streamlining in Smart Growth Areas Act signed into law in the last few months. Two court decisions that will have impact on development projects are analyzed in this issue. The New Jersey Appellate Division concluded in Meszaros v. Planning Board of the City of South Amboy that zoning ordinances without standards governing condition uses are deficient. A New York decision from the Court of Appeals interprets the 1994 amendments to the statutes pertaining to special use permits.

Howard D. Geneslaw, a Director in the Real Estate and Environmental Department, will be a speaker at the Lorman seminar on Advanced Zoning and Land Use in New Jersey on December 1, 2004. Howard will speak on Application and Hearing Procedures.

Edward McTiernan, Co-Chair of the Real Estate and Environmental Department, is one of the founding Masters of the recently chartered Justice Stewart G. Pollock Environmental American Inn of Court. This is only the second Inn of Court in the country to focus on Environmental Law. American Inns of Court are designed to improve the skills, professionalism and ethics of the bench and bar. An American Inn of Court is an amalgam of judges, lawyers, and in some cases, law professors and law students. Masters at American Inns of Court are selected by their peers based upon their experience and commitment to the profession. Masters are expected to mentor other lawyers; support education programs and participate in the Inn's activities to promote professionalism. Ed joins the Inn having served as Chair of the New Jersey State Bar Association's Environmental Law Section and is active in a number of professional associations.

Susanne Peticolas, a Director in the Real Estate and Environmental Department, is a contributing author to the Business Law Deskbook, Ch. 24 "CERCLA" (2003); Minnesota Business Law Deskbook, Ch. 24 "CERCLA" (forthcoming 2004); Arizona Business Law Deskbook, Ch. 24 "CERCLA" (forthcoming 2004) all published by West Group.

New Jersey has long held a position in the vanguard of state and regional efforts to control air pollution. New Jersey's Air Pollution Control Act was adopted in 1954 and is among the oldest and most far reaching air pollution and emissions control programs in the country. New Jersey is presently a leading member of the nine state Regional Greenhouse Gas Initiative as well as the multi-state Ozone Transport Commission, groups that are working to reduce emissions from power plants, particularly older plants in the mid-west. On September 16, 2004, Governor McGreevey commemorated the 50th anniversary of New Jersey's Air Pollution Control Act by announcing that New Jersey would designate carbon dioxide as an air contaminant and propose new regulations intended to reduce CO2 emissions.

The Governor announced that New Jersey will immediately propose regulations which will fill a gap in Federal programs and expand New Jersey's existing rules. Although these rules are not yet publicly available, they are expected to implement various recommendations previously developed by the Department of Environmental Protection. These rules are expected to call for significant reductions in C02 emissions from power plants and industry. In the past, DEP has suggested that by 2005 New Jersey should reduce its total greenhouse gas emissions by 3.5% from the 1990 levels. This would mean reduction of 20.4 million tons of C02 equivalents. The rules are expected to appear in the October 18, 2004 New Jersey Register and will be subject to a 60-day public comment period.

The Brownfields Revitalization and Environmental Restoration Act, an amendment to CERCLA, required USEPA to establish a Federal standard to determine when a party achieved "All Appropriate Inquiry" ("AAI"). On August 26, 2004, USEPA promulgated draft AAI regulations that replace the ASTM Phase I ESA as the tool by which parties demonstrate they have achieved AAI.

The new AAI standard can be used to prove three distinct landowner liability protections under CERCLA. First, AAI is used as the due diligence standard for parties seeking to prove they "did not know and had no reason to know" of releases or threat of releases of hazardous substances prior to purchasing a property. Once this knowledge standard has been achieved, parties may avail themselves of the "innocent purchaser" defense under CERCLA. Second, AAI is used to demonstrate that a party is a "bona fide prospective purchaser," which qualifies it for protection as a Brownfields developer. Third, AAI is a qualification for a party to prove that it is a "contiguous property owner" under CERCLA Section 107(q)(1)(A)(viii).

The new Federal AAI Standard requires parties employ environmental professionals to perform the work and provide a written opinion of the AAI conditions. An on-site inspection of the property is required as is historical research of the current and former operations at a property. Neighboring properties must also be evaluated. The new AAI standard will change the way pre-acquisition due diligence is conducted and will require more detailed research and reporting.

The Highlands Water Protection and Planning Act, signed into law by Governor McGreevey on August 10, 2004, dramatically alters the way land use planning and regulation will be done in eighty-eight municipalities in eight northern New Jersey counties. A gubernatorially appointed Highlands Council will create a regional master plan for an area covering some 800,000 acres, and strict controls enforced by the Council and the DEP will directly affect development decisions in a core "preservation area" that constitutes about half of that area. How will the statute affect your development plans?

On July 9, 2004, Governor McGreevey signed into law the Permit Streamlining in Smart Growth Areas Act which provides expedited review in designated Smart Growth Areas for developers requesting expedited review of State permit applications and positioned to take advantage of the newly streamlined process, and creates the office of the Smart Growth Ombudsman to coordinate the process of review. The Bill was signed over heavy opposition from outraged environmental groups calling for the Governor's veto of the Bill who feared that the deadlines for agency action would create automatic approvals for deficient permit applications.

A recent decision by a New Jersey appellate court gives conditional use applicants cause for concern if the applicable zoning ordinance contains no standards governing conditional uses. The court in Meszaros v. Planning Board of the City of South Amboy held that not only are such ordinances deficient, but due to the lack of standards, the conditional use in question will be regarded as not permitted and will require a use variance and an application to the local zoning board of adjustment. Thus, applicants should be particularly attentive to ordinances which lack any conditional use standards and consider carefully whether the planning board has jurisdiction over their application.

In a recent decision interpreting 1994 amendments to the statutes pertaining to special use permits, the New York Court of Appeals for the first time confirmed that the amendments authorize (a) the grant of variances from special use permit requirements by zoning boards of appeals, and (b) the establishment of one-stop special permitting by planning boards. This decision, Real Holding Corp. v. Lehigh, will greatly facilitate the ability of applicants to efficiently secure special use permits, and to obtain relief from special use permit requirements where appropriate.