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New financing tool for cleanups in NJ.

Long-awaited amendments to New Jersey's landmark Environmental Cleanup and Responsibility Act (ECRA) have passed the state Senate and Assembly; and have been signed into law by Governor Jim Florio. The Industrial Site Recovery Act (ISRA), as the law is now known, will take effect immediately.

Although ECRA has been hailed as one of the most effective cleanup programs In the country, the law also has been cited as an impediment to economic growth. The amendments were created in an effort to streamline the ECRA process, ease the financial constraints on businesses and establish greater predictability in the program, while still ensuring the integrity of the environment.

Basically, the action does not fundamentally change the premise of the law and will still require owners of polluted properties to clean up contamination prior to selling. However, its importance to property owners, industry and business in general is that it clarifies the law and eases the financial constraints in complying with state environmental regulations.

Of major importance is the fact that the new law incorporates insurance as an option for cleanups. This unique financing mechanism is the first of its kind in the nation. Such insurance policies secure funding for cost overruns involved with a cleanup, and provide guarantees for future concerns involving a particular

Under the original provisions of the law, even if funding was available to address contamination on a particular sit no financial guarantee for costs exceeding the original estimates for site remediation, as well as for future pollution concerns. This is a major enhancement in the legislation and will assist in the expeditious cleanup of contaminated property by providing additional protection to the lending community, business and industry, and local and state government.

Under the new law, professional liability insurance also has been included as a criteria in evaluating environmental consultants. The Division of Consumer Affairs in the Department of Law and Public Safety, in consultation with the Department of Environmental Protection, is responsible for setting forth criteria to the public in their evaluation of prospective consultants.

The ECRA amendments will have a significant impact on a national level since many other states have carefully monitored the activities associated with ECRA.
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Title Annotation:Legal Review; New Jersey Governor James J. Florio signs legislation amending Environmental Cleanup and Responsibility Act, now known as Industrial Site Recovery Act
Author:Rosenberg, David M.
Publication:Real Estate Weekly
Article Type:Column
Date:Jul 21, 1993
Previous Article:Profession changing in turbulent times.
Next Article:United Jersey Bank/Central commits construction loan.

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