Does ISRA Apply to My New Business Development?

Posted on August 4, 2022

ISRA stands for Industrial Site Recovery Act, a New Jersey law passed in 1993 to supplement and amend the Environmental Cleanup Responsibility Act of 1983. These laws recognize the impact of toxic chemicals and contamination of the land on the state of New Jersey and the health of its citizens. ISRA requires that contaminated industrial sites have an approved cleanup plan before the transfer or upon the closing or sale of the property. If your new business development qualifies as an industrial establishment, it may be subject to the Industrial Site Recovery Act.  

How Do I Know if My New Business Development is an Industrial Establishment?

There are four criteria that determine if a property is an industrial establishment that is subject to ISRA:

  1. It was operating on or operating after December 31, 1983.
  2. It has a North American Industry Classification System (NAICS) Code(s) subject to ISRA.
  3. Hazardous materials or hazardous waste was used, generated, manufactured, refined, treated, stored, or disposed of on site.
  4. The ownership or operation of the property is being transferred, closed, or sold.

If the property does not meet these criteria, then it is exempt from ISRA.

What is an NAICS Code?

The North American Industry Classification System is used by the federal government to classify business establishments and to collect and analyze statistical data relevant to the business economy in the United States. NAICS codes listed in the Technical Requirement for Site Remediation NJAC 7:26 -Appendix C are subject to ISRA compliance.

What is the Definition of a Hazardous Substance?

A comprehensive 87-page list of hazardous substances is available in Appendix A of NJAC 7:1E and includes petroleum products and the waste water and sludge resulting from many different industrial treatment processes.

What Other Events Trigger ISRA Compliance?

The most common transactions that require an industrial establishment to comply with ISRA are the sale of property, sale of a business, or cessation of operations. There are also other more complex transactions such as indirect owner transactions, corporate reorganization transactions, and stock transfers or controlling interest transactions that could trigger ISRA compliance. Determining ISRA applicability for these multifaceted situations is complicated and should be done in consultation with an experienced environmental lawyer.

What Is the Process If My New Business Development is Subject to ISRA?

ISRA regulations offer various exemptions and waivers for compliance. It is possible that your new business development is eligible for one of the following:

  • Certificate of Limited Conveyance: Valid for three years after issuance, this certificate allows the owner of the property to transfer up to one third of the appraised value of a property with an industrial establishment without having to perform remediation on the entire industrial establishment
  • De Minimis Quantity Exemption: Under very specific conditions the owner or operator of a property does not have to remediate the site if the total quantity of hazardous substances or wastes is under a certain amount
  • Remediation in Progress Waiver: If the site of the industrial establishment is already undergoing remediation with oversight by a Licensed Site Remediation Professional (LSRP) or by the New Jersey Department of Environmental Protection (NJDEP), the owner or operator may apply for this waiver
  • Regulated Underground Storage Tank Only Waiver: This waiver applies to sites where the only area of concern is a regulated underground storage tank

It should be noted that there are many requirements that must be met to qualify for these various exemptions. If your new business development is an industrial establishment that does not qualify for a waiver, exemption, or alternate compliance process, then you must begin the process of performing all necessary remediation. The following is a very brief outline of the process of ISRA compliance keeping in mind that every property has its own unique set of circumstances.

The first step is to file a General Information Notice (GIN) within five days of any event that triggers ISRA required remediation. The GIN is sent to NJDEP.

Next remediation must be performed according to the N.J.A.C. 7:26E Technical Requirements for Site Remediation. All of the work must be done by a Licensed Site Remediation Professional (LSRP) who will conduct a Preliminary Assessment that identifies potential areas of concern.

If there is possibility that contaminants are present above any applicable remediation standards, then a Site Investigation (SI) will also need to be done. Any contamination documented in the SI must be addressed in a Remedial Investigation (RI). The RI will determine what kind of contamination exists and how extensive it is.

Finally, a Remedial Action Workplan (RAW) must be proposed that outlines the steps that are necessary to clean up the contaminated property to the appropriate remediation standard. When this has been done the LSRP can submit a Response Action Outcome. Before transfer of ownership this Response Action Outcome or a certified RAW must be obtained. The same is true when an owner or operator plans to close operations. In some cases, a Remediation Certification may be obtained which allows for a transaction between the owner or operator and prospective purchaser to be completed before full ISRA compliance has been achieved.

Environmental Law in New Jersey

Hazardous industrial waste poses dangerous health and environmental consequences when improperly managed and New Jersey’s environmental laws were some of the first in the country to address this issue. The NJDEP is aggressive about enforcing state and federal regulations protecting the environment and business owners and operators must be vigilant about complying with the many different laws. In some cases, an owner or operator can be held liable even years after having sold a property it if it is discovered that it was not properly cleaned.

Navigating the complex ISRA process of compliance should be done with a qualified attorney who has experience in and knowledge of the constantly changing field of environmental law.

For Help Determining if your Business is Subject to ISRA Contact the Plainfield Environmental Lawyers at Herold Law, P.A.

At Herold Law, P.A. our experienced Plainfield environmental lawyers can answer all your questions about compliance with local, state, and federal laws regarding the environment. Call 908-647-1022 or contact us online today to schedule a consultation. Based in Warren, New Jersey we represent clients throughout the state.