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New Jersey Builders Association v. Fenske

Decided: June 18, 1991.


On appeal from the final decision of New Jersey Department of Environmental Protection.

Judges J.h. Coleman, Dreier and Landau. The opinion of the court was delivered by Landau, J.A.D.


On September 6, 1989, following a year of public notice and extended opportunity for comment, the Department of Environmental Protection (DEP) adopted new comprehensive "Statewide Water Quality Management Planning Rules" acting under authority of the Water Quality Planning Act, N.J.S.A. 58:11A-1, et seq., the Water Pollution Control Act, N.J.S.A. 58:10A-1, et seq., and its general rulemaking powers set forth in N.J.S.A. 13:1D-9. The regulations were made effective October 2, 1989, but were corrected in part on July 2, 1990.

The New Jersey Builders Association (Association) is a trade association which represents several thousand developers, builders, realtors, suppliers, and others in the building industry. It brings this appeal to challenge certain provisions of those regulations, which it says exceed DEP's statutory grant of authority, deny equal protection of the law, and result in unconstitutional takings of property.

Before addressing the specific areas of the regulations complained of by the Association, it is helpful to review some of the statutory framework for water quality planning in the State.

Underlying much of the water quality planning process are the 1972 amendments to the Federal Water Pollution Control Act (FWPCA), 33 U.S.C.A. § 1251, et seq. The Act requires identification of areas with substantial water quality control problems and initiation of areawide Waste Treatment Management plans. 33 U.S.C.A. § 1288(a), (b).

In 1977, New Jersey adopted the Water Quality Planning Act, N.J.S.A. 58:11A-1, et seq., incorporating the following legislative findings:

The Legislature declares that the objective of this act is, whenever attainable, to restore and maintain the chemical, physical and biological integrity of the waters of the State, including groundwaters, and the public trust therein; and that areawide waste treatment management planning processes should be developed and implemented in order to achieve this objective and to assure adequate control of sources of water pollutants in the State. The Legislature further declares . . . that the Department of Environmental Protection shall

conduct areawide waste treatment management planning for all areas of the State without a designated planning agency, and that said Department of Environmental Protection shall establish a continuing planning process which will encourage, direct, supervise and aid areawide planning and which will also incorporate water quality management plans into a comprehensive and cohesive Statewide program directed toward the achievement of water quality objectives; that the Department of Environmental Protection through the continuing planning process and the planning agencies through the areawide planning process shall coordinate and integrate water quality management plans with related Federal, State, regional and local comprehensive land use, functional and other relevant planning activities, programs and policies; and that opportunities for meaningful public participation shall be provided during all phases of the water quality planning management process.

N.J.S.A. 58:11A-2b.

N.J.S.A. 58:11A-7 requires that:

The commissioner shall conduct a continuing planning process which shall:

a. Integrate and unify the statewide and areawide water quality management planning processes;

b. Conduct a statewide assessment of water quality and establish water quality goals and water quality standards for the waters of the State;

c. Develop a statewide implementation strategy to achieve the water quality standards. . . .

In addition, New Jersey adopted a Water Pollution Control Act, also administered by DEP. N.J.S.A. 58:10A-2. This provides for restoration, enhancement and maintenance of the State's waters, including ground and surface waters, and set up administrative controls respecting various treatment facilities.

Under the Water Quality Planning Act, the DEP is charged with implementing a continuing planning process to supervise areawide planning, and incorporating water quality management plans into the Statewide Plan, and coordinating such water quality management plans with Federal, State and local land use and planning activities. N.J.S.A. 58:11A-2. In particular, areawide waste treatment planning must be implemented to assure adequate control of water pollution sources. This includes monitorship of the areawide water quality management plans and identification of all political subdivisions necessary to construct, operate and maintain the facilities required by such plans. See N.J.S.A. 58:11A-5.

Among the duties delegated to DEP under N.J.S.A. 13:1D-9, in connection with its overall mission to conserve natural resources, promote environmental protection and prevent pollution, are the following:

k. Supervise sanitary engineering facilities and projects within the State, authority for which is now or may hereafter be vested by law in the department, and shall, in the exercise of such supervision, make and enforce rules and regulations concerning plans and specifications, or either, for the construction, improvement, alteration or operation of all public water supplies, all public bathing places, landfill operations and of sewerage systems and disposal plants for treatment of sewage, wastes and other deleterious matter, liquid, solid or gaseous, require all such plans or specifications, or either, to be first approved by it before any work thereunder shall be commenced, inspect all such projects during the progress thereof and enforce compliance with such approved plans and specifications.

n. Enforce the State air pollution, water pollution, conservation, environmental protection, waste and refuse disposal laws, rules and regulations, including the making and signing of a complaint and summons for their violation by serving the summons upon the violator and thereafter filing the complaint promptly with a court having jurisdiction.

Important to an understanding of many current water quality problems, including those before us today, is the recent drying up of the substantial program of federal grants which initially provided the principal source of capital funds for construction of water quality facilities.

The significance of this problem is illustrated by another statute, not cited by either party, N.J.S.A. 58:27-1, et seq. There, in the "New Jersey Wastewater Treatment Privatization Act" the Legislature expressly found, "that during the last several years the amount of federal grant money available to states and local governments for assistance in constructing and improving wastewater treatment systems has sharply diminished; that the current level of federal grant funding is inadequate to meet the cost of upgrading the State's wastewater treatment capacity to comply with State water quality standards; that given this inadequate present level of federal grant funding, alternative methods of financing the construction, operation, and improvement of wastewater treatment systems must be developed and encouraged." The Legislature concluded

that one effective alternative means of financing necessary wastewater treatment systems would be to contract with private-sector firms for the financing, construction and operation of these systems. Thus, the statute provides that such private contracting for financing, design, construction, operation or maintenance of wastewater treatment systems or services may be entered into, "the provisions of any other law, or rules and regulations adopted pursuant thereto to the contrary notwithstanding. . . ." ...

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