This past September, the New Jersey Department of Environmental Protection (“NJDEP”) issued a new Grace Period Rule.  The rule is designed to ensure standardized violations and penalties under the Underground Storage Tank regulations, the Industrial Site Recovery Act regulations, the Technical Requirements for Site Remediation regulations and the Spill Act regulations.  While these regulations have always included penalty provisions, with the new Grace Period Rule, the NJDEP will make a concerted effort to step-up its enforcement of those rules.

The Grace Period Rule specifies criteria under the applicable regulations for determining when a violation will be considered “minor” or “non-minor.”  If a violation is non-minor, there will be no grace period and a penalty will be immediately effective.  Minor violations will have an accompanying grace period, ranging from 30 to 90 days, in which the violation may be cured and penalties avoided.  Some examples of minor violations include submission of incomplete documents or reports, failure to use certified laboratory methods and formatting errors in submitted documents.  Some examples of non-minor violations include failure to perform remediation, failure to use an accredited laboratory and failure to conduct preliminary and site assessments.

Penalties range from $3,000 to $8,000 for minor violations, and from $3,000 to $20,000 for non-minor violations.  Penalties are computed on a per-day basis.  Thus, the base penalty will be levied for each day that a violation is not cured.  Additionally, the base penalty can be increased under certain circumstances, so that if a responsible party commits the same violation twice, the base penalty will be doubled.  If a violation occurs a third time, the base penalty will be multiplied by five.

Under NJDEP guidance, when the NJDEP discovers a minor violation, it will issue a Notice of Deficiency or, for voluntary cleanups, a Notice of Intent to Terminate a Memorandum of Agreement.  The notice will provide the responsible party with a period of time (i.e., a grace period) to remedy the alleged violations.  If the violations are corrected within the grace period, no penalty will be imposed.  If compliance is not achieved, the NJDEP will then issue a Notice of Violation or terminate a Memorandum of Agreement.  If the responsible person fails to demonstrate compliance, the NJDEP will impose a penalty that is retroactive to the date the Notice of Violation was originally issued.  If a violation is non-minor, the penalty assessment will be issued automatically, as no grace period will be allowed.

The impact of the Grace Period Rule is clear.  It will create more work for environmental consultants, increase the potential for penalties and increase the delay at the NJDEP.  Therefore, it is imperative to have good communication between the responsible party and its consultant and ensure the contracts between the responsible party and consultant clearly allocate the responsibility for penalties arising from technical violations of remediation regulations.