Remediation Funding Source (RFS)
Purpose of RFS
The purpose of an RFS is to ensure that funds are available to complete the remediation of a site if the person who is required to conduct remediation fails to do so.
Who must post and when?
Owners and operators of an industrial establishment subject to ISRA must establish an RFS and submit it with a Remediation Certification prior to the sale or transfer of ownership or operations of the industrial establishment or no more than 14-days after submission of a remedial action workplan certified by a licensed site remediation professional (LSRP).
Any party who is liable pursuant to the Spill Act who is required pursuant to an Administrative Order, Spill Act Directive, or a Court Order requiring cleanup, or a party who executed an Administrative Consent Order with the Department which included an RFS requirement or a person subject to Direct Oversight, must establish an RFS as instructed by the Department or court.
What are the requirements?
Parties required to post RFS must comply with the RFS requirements detailed at N.J.A.C. 7:26C-5 [pdf].
How to determine the amount of RFS
The amount of the RFS posted must be equal to or greater than the amount calculated in a detailed remediation cost estimate to complete the remediation, including the DEP fees and oversight costs, and including the estimated cost to operate, maintain and inspect engineering controls.
To assist in the development of a detailed remediation cost estimate, the Department has drafted the Detailed Remediation Cost Estimate Guidance. This guidance consists of the following:
- Checklist for the Development of Detailed Remediation Cost Estimate for Remediation Funding Sources; [pdf]
- Example Detailed Remediation Cost Estimate Worksheet; [xlsx] and
- Frequently Asked Questions About Detailed Remediation Cost Estimates [pdf]
1% RFS surcharge
Parties must pay a 1% surcharge on the amount of RFS required to be posted, except when a self-guarantee is used. The surcharge is due when the RFS is required to be established and annually thereafter (see N.J.A.C. 7:26C-5.10 [pdf]).
Exemptions from the requirement to post RFS
The Brownfield and Contaminated Sites Remediation Act (N.J.S.A. 58:10B-3) and the Administrative Requirements for the Remediation of Contaminated Sites rule (N.J.A.C. 7:26C-5.2(b)) include the following exemptions from the requirement to establish and maintain a remediation funding source (RFS):
- Remediation in an Environmental Opportunity Zone;
- Remediation using an innovative remedial action technology;
- Implementation of an unrestricted or limited restricted use remedial action in a timely manner;
- Government entity
- Remediation at a primary or secondary residence;
- Owner or operator of a licensed child care center; and
- Public, private or charter school
In order to clearly define the eligibility requirements and application process for RFS Exemptions, the Department offers the Remediation Funding Source Exemption Guidance Document [pdf].
Direct Oversight Requirements for RFS
N.J.S.A. 58:10C-27 et seq. contains the requirements for persons responsible for conducting the remediation of a contaminated site under Direct Oversight, including the criteria for who is subject to Direct Oversight and the remediation requirements for those who are subject to Direct Oversight. One of the criteria for remediating a site under Direct Oversight is that the person responsible for conducting the remediation must post RFS pursuant to N.J.S.A. 58:10B-3 using a mechanism other than a Self-Guarantee. Additional RFS requirements for sites being remediated under Direct Oversight include:
- The amount of the RFS posted must be equal to or greater than the amount calculated in a cost estimate to complete the remediation, including the cost to operate, maintain and inspect engineering controls, and DEP fees and oversight costs or an amount that the Department requires when it undertakes direct oversight. The definition of remediation costs provided at N.J.A.C. 7:26C-1.3 should be used as a guide in items to be included in the cost estimate.
- Unless otherwise adjusted in writing by the Department, the Department must approve in writing the amount of the funds to be disbursed or reduced in order for the holder of the RFS instrument to disburse the funds.
- RFS exemptions provided at N.J.A.C. 7:26C-5.2(b) and financial assurance exemptions provided at N.J.A.C. 7:26C-7.10(c) do not apply to Direct Oversight.
Differences between RFS and Financial Assurance (FA)
- RFS is for ongoing remediation whereas FA is for operation, maintenance and inspection of the engineering control.
- RFS can be used to pay for actual remediation costs, while FA cannot be used to fund the operation maintenance and inspection of the engineering control.
- A Self-guarantee cannot be used as a FA mechanism.
- FA is not subject to the 1% surcharge fee
NJDEP has created a RFS guide, as well as a list of FAQs for more information.
Contacts RFS:
Jennifer MacLeod
Remediation Funding Source Coordinator
609-984-3651
Jennifer.MacLeod@dep.nj.gov
Address:
Remediation Funding Source Coordinator
New Jersey Department of Environmental Protection
Site Remediation and Waste Management Program
Remediation Funding Source Unit
Mail Code 401-06X
P.O. Box 420
401 East State Street
Trenton, NJ 08625-0420
