The New Jersey Economic Development Authority (NJEDA) just announced that it has created a new loan program to provide low-interest financing for the remediation of brownfields sites. The new program, called the Brownfields Loan Program, is designed to put vacant and underutilized sites back to productive use as part of Governor Murphy’s goal of bringing economic growth to underserved communities.

The Brownfields Loan Program will provide a bridge loan of up to $5,000,000 to potential brownfield site purchasers and current owners for the costs to investigate and remediate site contamination, as well as for site building and structure related issues such as asbestos abatement. To be eligible for a loan, a New Jersey Licensed Site Remediation Professional must submit a report verifying the existence of contamination. The project must also have a redevelopment plan, an appraised value of at least 100 percent of all debt financing, and must demonstrate local support through a letter of support from the mayor of the municipality in which the project site is located.

Funding will be made available through competitive application rounds, with projects scored on site location, length of time the site has been vacant or underutilized, and similar redevelopment and remediation criteria. Funding priorities will be given to the site with the highest overall scores.

Applications for the Brownfields Loan Program will be available through the NJEDA sometime in the next few months.

On March 15, 2019, the EPA issued a final rule that will ban the retail sale of methylene chloride containing products for consumer uses.  Methylene chloride is a solvent that is currently, but not for much longer, commonly found in consumer paint and furniture strippers.  It is sold by hardware stores and home improvement retailers.

The EPA’s action is based on the adverse effects to consumers using methylene chloride.  It has been documented that short-term exposure to methylene chloride vapors can cause dizziness, loss of consciousness and death resulting from nervous system depression.

The new rule defines a retailer as any person or entity that sells paint and coating removal products to consumers, including sales through the internet.  For a distributor not to be considered a retailer, he/she must distribute methylene chloride-containing paint and coating removal products solely to commercial or industrial end users or businesses.  The new rule does not apply to commercial use of this chemical.

The rule also requires manufacturers, processors and distributors of methylene chloride, to provide downstream users with notice of this ban.  Material safety data sheets provided with the methylene chloride product must indicate that this chemical cannot be distributed in commerce for consumer use.

Given that the rule will not apply to the industrial use (i.e., workplace use) of methylene chloride, it is imperative that employers using this chemical take precautions to protect their employees from the toxic effects of this chemical.  To obtain more information regarding protections that should be in place to protect employees from workplace exposures to methylene chloride visit OSHA.gov.

Earlier today, the New Jersey Department of Environmental Protection (NJDEP) issued a directive requiring five companies – Solvay, DuPont, Dow DuPont, Chemours and 3M – to provide detailed information on their use of PFAS chemicals and potential modes of discharges such as through wastewater treatment plants, air emissions, and consumer products.  The directive also notifies the companies that the state intends to hold them responsible for PFAS remediation costs.

This is yet another move on the state level in pursuit of regulating PFAS chemicals.  We reported earlier today on new developments in New York and are monitoring the soon-to-be issued investigative orders in California.

The New York State Department of Environmental Conservation (NYSDEC) is now requiring all sites entering into a state cleanup program to sample for two of the more popular and well-known “emerging contaminants” – 1,4-dioxane and Per- and Polyfluoroalkyl substances (aka PFAS) – in soil, groundwater, surface water, sediment, and, where applicable, biota.  There is currently no requirement to sample soil vapor.

NYSDEC is also requiring similar sampling of any soil imported to a site, such as for backfill or a soil cap.  According to the guidance, NYSDEC will evaluate the results on a site-specific basis to determine appropriate use.

The recently-issued guidance document, Sampling for 1,4-Dioxane and Per- and Polyfluoroakyl Substances (PFAS) Under DEC’s Part 375 Remedial Programs, is a significant expansion of the NYSDEC policy issued last year, which also required 1,4-dioxane and PFAS sampling at all sites in a state cleanup program, but only of groundwater.

Keep in mind that NYSDEC is still developing cleanup standards for the majority of these contaminants, so the extent of the impact on the development and implementation of remedial strategies won’t be clear for a while.  However, at minimum, the requirement to sample all environmental media (except spoil vapor) could have significant impacts on the cost, complexity, and duration of at least the investigation phase of remediation projects in New York, and may also complicate due diligence issues.

Stay tuned as we continue to follow these important developments impacting NYSDEC cleanup programs, as well as the ongoing developments in other states making moves towards regulating PFAS chemicals in the absence of federal drinking water or cleanup standards for the time being.

Whenever estate planning involves the transfer of a business or real estate, environmental issues can be important drivers. Owners and operators of real property are strictly liable for the remediation of any contamination on the property regardless of who caused the contamination. Often families are unaware of the environmental obligations and liabilities associated with their properties and businesses. This is especially the case for long-held family businesses and real estate. Planning requires getting an understanding of the values of the assets and potential liabilities associated with them.

The transfers of these assets may trigger a requirement to investigate and remediate properties under the New Jersey Industrial Site Recovery Act (ISRA) which requires investiga­tion and remediation of properties that are deemed “industrial establishments” when they are transferred or when operations cease at any location. Industrial establish­ments include properties that have been used for a wide variety of uses including any manufacturing, various types of distribution and repairs operations. It is important to know about ISRA including certain exemptions for transfers by devise or to family members and to trusts whose beneficiaries are family members. Sales to third parties will not be exempt.

Beyond ISRA, the New Jersey Spill Act requires all owners of contaminated properties to report the contamination and clean it up. Estate planning should take into account environmental requirements so that families can leave a legacy that does not include the complications of unresolved environmental liabilities.