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TAC Associates v. New Jersey Dep't of Environmental Protection

July 15, 2010

TAC ASSOCIATES, PETITIONER-RESPONDENT,
v.
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION AND THE NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY, RESPONDENTS-APPELLANTS.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 408 N.J. Super. 117 (2009).

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

The Court considers whether plaintiff TAC Associates (TAC) was eligible under the Brownfield and Contaminated Site Remediation Act for a grant of funds to defray the cost of remediating a contaminated property that TAC had sold and no longer owned when it applied for the grant.

TAC owned an industrial site in Raritan Township from the mid-1970s until January 2004. In November 2003, TAC submitted a notice to the New Jersey Department of Environmental Protection (DEP) advising that it was ceasing operations at the facility and that the property was subject to sale. Because TAC was required by law to investigate potential contamination at the site, it engaged an environmental consultant, who discovered hydrocarbons. In response, TAC and the property buyer established remediation trust accounts in anticipation of remediation costs. According to TAC, the funds have been largely depleted.

On June 20, 2008, TAC applied to the DEP for an Innocent Party Grant, which is a remedy under the Brownfield and Contaminated Site Remediation Act (Act) intended to help certain owners of contaminated property pay for remediation. As required for the grant, TAC certified that it purchased the property prior to December 31, 1983, and did not use or permit the use of the particular hazardous substance that was identified at the property. In September 2008, the DEP informed TAC that the grant was available only to property owners who met the eligibility criteria and that TAC was ineligible for the grant because it no longer owned the property.

TAC filed an appeal arguing that the Act does not require that an applicant be the present owner of the property when the grant application is filed. The Appellate Division reversed the DEP's denial of the grant. 408 N.J. Super. 117 (2009). The Supreme Court granted the State's petition for certification. 200 N.J. 549 (2009).

HELD: Under the Brownfield and Contaminated Site Remediation Act, an applicant for an Innocent Party Grant to defray the cost of remediating a contaminated property must own the property at the time it submits the application. Because plaintiff TAC Associates no longer owned the property when it applied for the grant, it was ineligible.

1. In 1983, the Environmental Cleanup Responsibility Act was enacted in New Jersey to address the remediation of contaminated sites. In 1993, the Legislature revised the law, renamed it the Industrial Site Recovery Act (ISRA), and established the Hazardous Discharge Site Remediation Fund (Remediation Fund) to provide financial assistance for remediation. In 1998, the Brownfield and Contaminated Site Remediation Act (Act) went into effect and several ISRA provisions, including the Remediation Fund, were denominated as part of the Act. (Pp. 2-3)

2. One of the grants available under the Remediation Fund is the Innocent Party Grant. The Act defines who is eligible to receive an Innocent Party Grant in two sections. N.J.S.A. 58:10B-5 provides that grants may be made to "persons who own real property" on which there has been a discharge. Under N.J.S.A. 58:10B-6, innocent persons who "own real property" on which there has been a discharge will be qualified for the grant if they "acquired the property prior to December 31, 1983, the hazardous substance or hazardous waste that was discharged at the property was not used by the person at that site, and that person certifies that he did not discharge any hazardous substance or hazardous waste where a discharge is discovered." Two agencies are responsible for implementation of the Remediation Fund-the DEP and the New Jersey Economic Development Authority (Authority). The DEP reviews grant applications and refers applications it deems eligible to the Authority, which takes final action on eligible grant applications. Pursuant to N.J.S.A. 58:10B-8(a)(8), the Authority has the power to adopt any requirement it deems necessary or appropriate to effectuate the purposes of the Remediation Fund. In 1994, the Authority adopted N.J.A.C. 19:31-8, which set forth the eligibility criteria for an Innocent Party Grant. These regulations largely tracked the provisions of the Act. (Pp. 3-4)

3. In 2006, the Authority amended the regulations. The Authority added to the existing requirement of acquisition of the property prior to December 31, 1983, that the party must "continue[ ] to own the real property at least until the Authority renders final approval to the grant." N.J.A.C. 19:31-8.2. On January 17, 2010, the Legislature amended the Act to mirror the regulation's revised language. N.J.S.A. 58:10B-6(a)(4). The Act now states that a "person qualifies for an Innocent Party Grant if that person acquired the property prior to December 31, 1983 and continues to own the property until such time as the authority approves the grant . . . ." (Pp. 4-6)

4. In determining whether TAC was ineligible because it was not the owner of the property when it applied for the grant, the Court applies principles of statutory interpretation to the version of the Act that was in effect during the period of time at issue in this case. First, the Court examines the plain language of the Act to discern the Legislature's intent. If the plain language leads to an unambiguous result, the Court explains that no further analysis is necessary; otherwise it may consider extrinsic evidence to discern the drafters' motives. Interpretations of statutes by agencies empowered to enforce them are given substantial deference. Finally, legislative amendments carry great weight in determining the intention of the original statute. (Pp. 9-11)

5. The Court notes that in N.J.S.A. 58:10B-5(d) and N.J.S.A. 58:10B-6(a)(4), the Act authorizes the award of an Innocent Party Grant only to those persons who "own" property on which there has been a hazardous discharge. That is the first hurdle in obtaining a grant. The second hurdle is the innocence standard, N.J.S.A. 58:10B-6(a)(4), which requires that the party acquired the property prior to December 31, 1983, and did not discharge or utilize the hazardous waste. Examining the Legislature's plain language, including its use of the present tense to address the question of ownership, the Court finds that a grant applicant must own the contaminated property. Although the Court finds the Act clear on its face, it also finds nothing in the legislative history that would justify rejecting the ordinary meaning of the word "own." Finally, the Court explains that statutory amendments carry great weight in determining the intention of the original statute, and the Legislature amended the Act in 2010 to require continuous ownership, leaving no doubt that ownership in the past would not pass muster. The Court explains that even if the Act was ambiguous as to the meaning of "own" prior to the 2010 amendment, the DEP's interpretation was a permissible construction of the statute that courts must defer to in recognition of the agency's expertise. Here, TAC sold the property years prior to its grant application, therefore the DEP properly declared it ineligible. (Pp. 11-14)

6. Finally, the Court considers TAC's claim that the temporal requirement in N.J.A.C. 19:31-8.2 of ownership through "final approval" exceeded the statutory mandate. The Court notes that this argument cannot apply to TAC's situation because it did not even own the property when it applied for the grant. However, for clarity, the Court explains that the Agency's interpretation is a permissible one that warrants deference, the regulatory provision has been in effect since 2006 without intervention by the Legislature, and in 2010 the Legislature amended the Act to mirror the Agency's interpretation. Any contrary view must be presented to the Legislature. (Pp. 14-16)

The judgment of the Appellate Division is REVERSED, and the decision of the DEP is REINSTATED.

JUSTICE RIVERA-SOTO, DISSENTING, explains that when TAC sold the property, neither the Act nor the regulations required that an applicant continue to own the property on which the grant application was based. Furthermore, the Legislature amended the Act to conform to the regulatory language after the Appellate Division issued its opinion. He would affirm the Appellate Division's decision substantially for the reasons it expressed.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, WALLACE, and HOENS join in JUSTICE LONG's opinion. JUSTICE RIVERA-SOTO filed a separate, dissenting opinion.

The opinion of the court was delivered by: Justice Long

Argued April 27, 2010

The Department of Environmental Protection (DEP) rejected an application for an Innocent Party Grant (IPG), a remedy under the Brownfield and Contaminated Site Remediation Act (BCSRA or "the Act") intended to help certain owners of contaminated property defray the cost of remediation. N.J.S.A. 58:10B-5(d). The rejection was based on the fact that the applicant no longer owned the property and "[p]ursuant to the N.J.S.A. 58:10B, the IPG only applies to a property owner who meets the eligibility criteria." The applicant appealed and the Appellate Division reversed and remanded. TAC Assocs. v. N.J. Dep't. of Envtl. Prot., 408 N.J. Super. 117 (App. Div. 2009). The State filed a petition for certification, which we granted. 200 N.J. 549 (2009). Because the applicant did not own the property at the time of the application, it was ineligible for an IPG grant under the Act and thus we reverse.

I.

Our starting point is a brief overview of the statutory and regulatory schemes that govern hazardous or contaminated site remediation in New Jersey. In 1983, the Environmental Cleanup Responsibility Act (ECRA) was enacted to address the remediation of contaminated sites. L. 1983, c. 330, §§ 1-11. In 1993, ECRA was revised and renamed the Industrial Site Recovery Act (ISRA).

L. 1993, c. 139, §§ 1-49. The enactment of ISRA established the Hazardous Discharge Site Remediation Fund (HDSRF). L. 1993, c. 139, § 26. The HDSRF was intended to provide financial assistance or grants "for the purpose of financing remediation activities at sites at which there is, or is suspected of being, a discharge of hazardous substances or hazardous wastes." L. 1993, c. 139, § 26 (N.J.S.A. 58:10B-4).

In 1998, BCSRA went into effect and several ISRA provisions, including the HDSRF, were denominated as part of BCSRA. See L. 1997, c. 278, ยง 12; N.J.S.A. 58:10B-1.1. One of the grants available under the HDSRF is an IPG. BCSRA ...


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