Notice of Availability of Annual Site Remediation Reform Act (SRRA) Program Fee Calculation Report for Fiscal Year (FY) 2019

Take notice that, pursuant to N.J.A.C. 7:26C-4, the Department of Environmental Protection (Department) is adjusting the Site Remediation Reform Act (SRRA) Program's annual remediation fee and the fees associated with annual remedial action permits. Details of these calculations are set forth in the Department's Annual SRRA Program Fee Calculation Report for Fiscal Year (FY) 2019 (the Report), available for download from the Department's website at www.nj.gov/dep/srp.

   Two categories of fees are discussed in the Report: the annual remediation fee, and remedial action permit-related fees. Those persons who are actively remediating sites are charged annual remediation fees, and those persons who have implemented a remedial action that involves a remedial action permit are charged remedial action permit fees.

   The authority for charging annual remediation fees to cover the costs of administering the SRRA Program is both SRRA, N.J.S.A. 58:10C-1 et seq., and the Brownfield and Contaminated Site Remediation Act, N.J.S.A. 58:10B-1 et seq. SRRA allows the Department to charge [page=1444] reasonable application fees to cover the costs of processing applications for remedial action permits for engineering or institutional controls, and to charge reasonable annual fees to cover the costs of the administration and enforcement of the remedial action permits (N.J.S.A. 58:10C-19.d). The Brownfield and Contaminated Site Remediation Act requires a person who initiates a remediation to pay all applicable fees and oversight costs as required by the Department (N.J.S.A. 58:10B-1.3.b(5)).

   This Report identifies the fees for FY 2019, and compares the input data for FY 2018 with the input data for FY 2019 for both the annual remediation fees and the remedial action permit-related fees. The Department published notice of its fees for FY 2018 in the June 19, 2017 New Jersey Register at 49 N.J.R. 1732(b), and made them available online in the Fee Guidance Document for FY 2018 (www.nj.gov/dep/srp/guidance/srra/fee_guidance_document.pdf).

Annual Remediation Fee FY 2019

The annual remediation fees fund the portion of the SRRA program dedicated to "active" cases, which are those cases for which a final remediation document has not been issued (that is, either a no further action letter from the Department or a response action outcome from the licensed site remediation professional (LSRP)). To determine the annual remediation fee, the rules provide that the Department will set a budget based on the amount needed to administer the "active cases" portion of the SRRA Program, which is $ 25.198 million for FY 2019.

The annual remediation fee has two components: the contaminated area of concern (CAOC) fee and the contaminated media fee. The CAOC fee and the contaminated media fee were first promulgated in 2009, and then amended for FY 2018 (see 48 N.J.R. 1391(a)).

The rules provide that 65 percent of the revenue to be collected through annual remediation fees be allocated to CAOC fees and 35 percent to contaminated media fees. The FY 2019 budget is, therefore, apportioned as $ 16.379 million to CAOC fees and $ 8.819 million to contaminated media fees.

CAOC Fees for FY 2019

The first component of the annual remediation fee is the CAOC fee, which is determined by dividing the CAOC portion of the budget by the number of CAOCs reported to the Department in the prior calendar year. The base fee is then used to establish the CAOC fee for each of four categories. The categories reflect the number and type of CAOCs. Category 1 comprises no or one CAOC and no contaminated underground storage tanks, or only historic fill. In this category, the base CAOC fee applies. Category 2 comprises two through 10 CAOCs or any number of regulated underground storage tanks; the fee for this category is the base CAOC fee times two. Category 3 comprises 11 through 20 CAOCs; the fee for this category is the base CAOC fee times 11. Category 4 comprises more than 20 CAOCs; the fee for this category is the base CAOC fee times 22.

The CAOC base fee that would allow the Department to cover the CAOC portion of the active case budget is $ 970.56. To ensure that the active remediation side of the SRRA Program does not collect more than $ 16.379 million from collection of the CAOC fee, the Department adjusted the raw base fee downward and rounded to the nearest $ 5.00 to $ 890.00 to derive the base CAOC fee for FY 2019. The Department is then using the appropriate multiplier to determine the FY 2019 fees for Categories 2, 3, and 4.

Contaminated Media Fees for FY 2019

The second component of the annual remediation fee is the contaminated media fee, which is calculated by dividing the portion of the budget allocated to contaminated media by the total number of contaminated media (for example, ground water, sediment, and ground water contaminating surface water) reported to the Department in the prior calendar year. For FY 2019, the calculated contaminated media fee is $ 1,540.

The adjusted CAOC fees by category for FY 2019, the contaminated media fee for FY 2019, and a comparison of these fees with the FY 2018 fees, are shown below:

CAOC	FY 2018	Calculated	Difference in Fee
Category	Fee	FY 2019 Fee	Between FY 2018
			and FY 2019
1	$ 890	$ 890	$ 0
2	$ 1,780	$ 1,780	$ 0
3	$ 9,790	$ 9,790	$ 0
4	$ 19,580	$ 19,580	$ 0
Contaminated	$ 1,585	$ 1,540	($ 45)
media

* Category 2, 3, and 4 fees were determined by multiplying the base fee by the appropriate multiplier of two, 11, or 22, as explained above.

Although the program's budget has decreased, the CAOC base fee is remaining the same as FY 2018. As discussed above, the base fee is calculated by dividing the CAOC portion of the budget by the number of CAOCs reported during the previous calendar year (in this case, 2017). Therefore, although the budget for FY 2019 is lower than the budget for FY 2018, because there are fewer CAOCs for CY 2017 (16,876) compared to CY 2016 (17,584), the result is each CAOC bearing a greater share of the budget.

The three percent decrease in the contaminated media fee is due to a decrease in the FY 2019 budget compared to the FY 2018 budget, and an increase in the number of impacted media. Similar to the contaminated areas of concern base fee, the impacted media fee is determined by dividing the impacted media portion of the budget by the total number of impacted media, therefore, the smaller budget divided by the larger number of impacted media will result in a lower fee.

As an example, a person conducting remediation of a site with two through 10 areas of concern, which is a CAOC Category 2, where there are three types of contaminated media, would see the annual remediation fee decrease from $ 6,535 in FY 2018 to $ 6,400 in FY 2019 (a decrease of $ 135.00).

The annual remediation fee assessment takes into account the variation among remediation projects. A person who is remediating only a single contaminated area of concern pays a significantly lower fee than a person who is remediating several contaminated areas of concern and contaminated media. Additionally, as the contaminated areas of concern and contaminated media at a site are remediated, the annual remediation fee for the site decreases, providing incentive to conduct remediation in a timely fashion.

Remedial Action Permit-Related Fees FY 2019

The remedial action permit-related fees fund the portion of the SRRA Program that oversees sites for which remedial actions have been implemented that require a remedial action permit. The estimated cost to the Department to administer the remedial action permit side of the SRRA Program for FY 2019, which is based on salary, fringe, and indirect costs associated with reviewing the permit documents and administering permits, is $ 3,331,126. There are two types of remedial action permit-related fees that together cover the Department's costs to administer the remedial action permit side of the SRRA Program. The first type, the remedial action permit activity fee, is associated with the Department's review of various aspects of a remedial action permit (application, modification, transfer, or termination), and is based on the number of hours that Department staff spend on each activity. The second type, the remediation permit annual fee, is charged for each of the four types of remedial action permits (deed notice with no engineering controls, deed notice with engineering controls, natural attenuation ground water remedial action, and any other ground water [page=1445] remedial action). Each fee is based on the number of staff hours required to administer the remedial action permits. The staff hourly rate remained the same from FY 2018 to FY 2019, at $ 105.00. These permit-related fees were first promulgated in 2009, adjusted by rulemaking in 2012, and most recently adjusted by notice in 2017 for FY 2018 (see 49 N.J.R. 1732(b)).

Remedial Action Permit Activity Fees FY 2019

The following table identifies the number of staff hours required to perform specific remedial action permit activities in FY 2019. The numbers of hours are unchanged from FY 2018.

Remedial Action Permit Activity	FY 2019 Staff Hours
Soil Remedial Action Permits
Remedial Action Permit Application	18
Remedial Action Permit Modification	19
Remedial Action Permit Transfer	15
Remedial Action Permit Termination	26
Ground Water -- Natural Attenuation Remedial Action Permits
Remedial Action Permit Application	20
Remedial Action Permit Modification	20
Remedial Action Permit Transfer	20
Remedial Action Permit Termination	26
Ground Water -- Active System Remedial Action Permits
Remedial Action Permit Application	33
Remedial Action Permit Modification	26
Remedial Action Permit Transfer	12
Remedial Action Permit Termination	23

The number of staff hours, the staff hourly rate, and the resulting calculated remedial action permit activity fees for FY 2019 are as follows:

Remedial	Soil Remedial			Ground Water -			Ground Water -
Action	Action Permit			Natural Attenuation			Active System
Permit				Remedial Action			Remedial Action
Activity				Permit			Permit
	Staff	Average	FY	Staff	Average	FY	Staff	Average	FY
	Hours	Staff	2019	Hours	Staff	2019	Hours	Staff	2019
		Hourly	Fee		Hourly	Fee		Hourly	Fee
		Rate			Rate			Rate
Remedial	18	$ 105	$ 1,890	20	$ 105	$ 2,100	33	$ 105	$ 3,465
Action
Permit
Application
Remedial	19	$ 105	$ 1,995	20	$ 105	$ 2,100	26	$ 105	$ 2,730
Action
Permit
Modification
Fee
Remedial	15	$ 105	$ 1,575	20	$ 105	$ 2,100	12	$ 105	$ 1,260
Action
Permit
Transfer
Fee
Remedial	26	$ 105	$ 2,730	26	$ 105	$ 2,730	23	$ 105	$ 2,415
Action
Permit
Termination
Fee

As shown in the table below, the calculated remedial action permit activity fees for FY 2019 are increased for all activities compared to the FY 2018 fees (refer to the column "Difference in Fee Between FY 2018 and FY 2019"). In 2009, when the Department initially calculated remedial action permit activity fees, the Department underestimated the number of staff hours that would be required to complete remedial action permit activities. As in prior years, rather than imposing on the regulated community the entire cost associated with the correction of staff hours, the Department is limiting the remedial action permit activity fees for FY 2019 to no more than 25 percent above the comparable FY 2018 remedial action permit activity fees; these values are then rounded to the nearest $ 5.00.

The following table compares the calculated remedial action permit activity fees, the remedial action permit activity fees based on a maximum increase of 25 percent over the current remedial action permit activity fee, the final remedial action permit activity fees for FY 2019, and a comparison of the remedial action permit activity fees for FY 2018 with the final remedial action permit activity fees for FY 2019:

Remedial Action	FY 2018	Calculated	FY 2019 Fee	Final	Difference
Permit Activity	Fee	FY 2019 Fee	at Maximum	FY 2019	in Fee
			25% Increase	Fee	Between
					FY 2018
					and FY
					2019
Soil Remedial Action Permits
Remedial Action	$ 1,470	$ 1,890	$ 1,840	$ 1,840	$ 370
Permit Application
Remedial Action	$ 975	$ 1,995	$ 1,220	$ 1,220	$ 245
Permit Modification
Remedial Action	$ 650	$ 1,575	$ 815	$ 815	$ 165
Permit Transfer
Remedial Action	$ 1,470	$ 2,730	$ 1,840	$ 1,840	$ 370
Permit Termination
Ground Water -- Natural Attenuation Remedial Action Permits
Remedial Action	$ 1,955	$ 2,100	$ 2,100	$ 2,100	$ 145
Permit Application
Remedial Action	$ 1,470	$ 2,100	$ 1,840	$ 1,840	$ 370
Permit Modification
Remedial Action	$ 650	$ 2,100	$ 815	$ 815	$ 165
Permit Transfer
Remedial Action	$ 1,505	$ 2,730	$ 1,880	$ 1,880	$ 375
Permit Termination
Ground Water -- Active System Remedial Action Permits
Remedial Action	$ 2,445	$ 3,465	$ 3,055	$ 3,055	$ 610
Permit Application
Remedial Action	$ 1,955	$ 2,730	$ 2,445	$ 2,445	$ 490
Permit Modification
Remedial Action	$ 740	$ 1,260	$ 925	$ 925	$ 185
Permit Transfer
Remedial Action	$ 2,150	$ 2,415	$ 2,415	$ 2,415	$ 265
Permit Termination

Remedial Action Permit Annual Fees FY 2019

The annual fee for remedial action permits is calculated by determining the number of hours required annually to administer the remedial action permits (such as evaluating biennial certifications), multiplied by the average hourly rate of staff who administer the remedial action permits.

The calculated remedial action permit annual fees for FY 2019 all increased by greater than 25 percent when compared to the corresponding FY 2018 fees. The Department has determined that the maximum increase in FY 2019 remedial action permit annual fees will be 25 percent compared to the FY 2018 remedial action permit annual fees; this calculated value is then rounded to the nearest $ 5.00. A comparison of the FY 2018 and FY 2019 staff hourly rate, staff hours, and remedial action permit annual fee is shown below. The increase in staff hours from FY 2018 to FY 2019 in the table is attributable to additional staff working on activities related to remedial action permits, such as document processing, enforcement, and field inspections of engineering controls.

	FY 2018
Type of Permit	Staff Hours	Average Staff	Fee
		Hourly Rate
Soil Remedial Action Permit
With deed notice	11	$ 105	$ 320
without engineering controls
With deed notice	11	$ 105	$ 320
with engineering controls
Ground Water Remedial Action Permit
Natural Attenuation	12	$ 105	$ 320
remedial action
Any other ground	16	$ 105	$ 320
water remedial action

	FY 2019
Type of Permit	Staff Hours	Average	Calculated	Fee at 25%
		Staff	Fee	FY 2018
		Hourly Rate
Soil Remedial Action Permit
With deed notice	11	$ 105	$ 1,155	$ 400
without engineering controls
With deed notice	11	$ 105	$ 1, 155	$ 400
with engineering controls
Ground Water Remedial Action Permit
Natural Attenuation	12	$ 105	$ 1, 260	$ 400
remedial action
Any other ground	16	$ 105	$ 1, 680	$ 400
water remedial action

	Difference between FY 2018
	and FY 2019
Type of Permit	Staff Hours	Average Staff	Remedial
		Hourly Rate	Action Permit
			Annual Fee
Soil Remedial Action Permit
With deed notice	0	$ 0	$ 80
without engineering controls
With deed notice	0	$ 0	$ 80
with engineering controls
Ground Water Remedial Action Permit
Natural Attenuation	0	$ 0	$ 80
remedial action
Any other ground	0	$ 0	$ 80
water remedial action

Implementation of FY 2019 fees

Beginning July 1, 2018, the Department will issue invoices to persons responsible for conducting the remediation on the anniversary date prescribed by rules (see ARRCS, N.J.A.C. 7:26C-4.3 and 4.6) for the annual remediation fee and annual remedial action permit fee as published in the Annual Site Remediation Reform Act Program Fee Calculation Report. Also beginning July 1, 2018, persons submitting an application for an initial remedial action permit, or a remedial action permit modification, transfer, or termination will be required to submit the application with the appropriate remedial action permit activity fee as published in the Annual Site Remediation Reform Act Program Fee Calculation Report.