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GAF Corp. v. New Jersey Department of Environmental Protection and

Decided: December 26, 1986.

GAF CORPORATION, A CORPORATION OF THE STATE OF NEW JERSEY, APPELLANT,
v.
THE NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION AND THE STATE OF NEW JERSEY, RESPONDENTS



On appeal from Promulgation of Regulations by New Jersey Department of Environmental Protection.

Antell, Brody and Long. The opinion of the court is delivered by Antell, P.J.A.D.

Antell

[214 NJSuper Page 448] In Pub. Serv. Elec. & Gas v. Dept. of Env. Prot., 193 N.J. Super. 676 (App.Div.1984), aff'd 101 N.J. 95 (1985) we

found arbitrary a fee schedule for New Jersey Pollutant Discharge Elimination System (NJPDES) permits issued under the New Jersey Water Pollution Control Act, N.J.S.A. 58:10A-9, where the permit fees were based solely on the volume of effluent discharged without taking into account the toxicity of the discharge. The foregoing statute required that the fees charged be "reasonable," and because the volume-based formula reflected neither actual permit-specific administrative costs nor the actual environmental hazard presented by the individual discharger we concluded that it was not reasonable and therefore invalid. Our holding was accompanied by the observation that if the regulation did scale the fee structure "proportionally to the degree of harm threatened by the permittee's discharge we would have no difficulty sustaining its validity." 193 N.J. Super. at 682. Expressly refraining from making any suggestion as to what course the agency should follow, we stressed only that the method chosen for distributing the costs of processing, monitoring and administering the discharge permits must be reasonable. Id. at 683.

Within this limitation the choice of a least burdensome, workable system is left to the agency. We only say that any assessment system purportedly geared to the degree of hazard posed by a permittee's discharge which takes into account only volume without regard to toxicity of the discharge is less than reasonable. [ Ibid. ]

Responding to our decision, on June 17, 1985 the Department of Environmental Protection ("DEP") promulgated amended regulations governing the assessment of NJPDES permit fees. As DEP stated in its summary thereof, "The most significant change in the fee methodology is that the formulas take into account the total quantity of all the pollutants discharged by the permittee and the relative risks associated with the discharge of these pollutants."

Appellant is the holder of a NJPDES permit allowing it to discharge the effluent from its Linden plant into the Arthur Kill. On this appeal it challenges the amended regulation on the ground that the fee schedule bears no relation to the cost of processing, monitoring and administering the NJPDES permits

and on the further ground that it is not reasonable. It also asserts (1) that the schedule is unfairly based on data drawn from appellant's effluent in 1983 when the permit fees were based solely on volume of discharged pollutants without regard to toxicity and (2) that the use of a bioassay factor in determining toxicity and calculating the NJPDES fees is arbitrary and unreasonable.

As to appellant's first contention, we restate the holding of Pub. Serv. Elec. & Gas v. Dept. of Env. Prot., supra, that the fee structure need not be determined on a permit-specific cost-related basis. Id. at 681. That determination was affirmed on review by the Supreme Court. 101 N.J. at 95.

Appellant's argument that the fee schedule is unreasonable relies chiefly upon the dramatic effect thereon of weighting by risk factor the volume of pollutants. Whereas under the prior regulations appellant's permit fee for 1983-1984 was $12,610.75, its proposed fee for 1984-1985 is $151,315.82. Appellant points out that total fees assessed to permittees classified as industrial surface water dischargers were $1,676,139, and that of the 529 NJPDES permits 180 are at the minimum assessment of $350. Appellant was assessed the highest fee in that category with Ciba-Geigy Corp. in Toms River being assessed $123,747.47 and Chevron's Perth Amboy Refinery being assessed $87,144.98. A total of 33 dischargers were assessed fees greater than $10,000.

We adhere to the view which we stated in Pub. Serv. Elec. & Gas. v. Dept. of Env. Prot. that "if the challenged regulation did actually scale the fee structure proportionally to the degree of harm threatened by the permittee's discharge we would have no difficulty in sustaining its validity." 193 N.J. Super. at 682. The motivating ideology is that "those who do most to create the injurious conditions which give rise to the need for regulation should fairly bear a greater share of the ...


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