HDSRF Fact Sheet
(Rev. 09/2006)
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The Hazardous Discharge Site Remediation Fund (HDSRF) was established
in July 1993 in conjunction with the Industrial Site Recovery Act to provide
funding to public entities (municipalities, counties, and redevelopment
agencies), qualifying private entities (businesses, corporations, homeowners,
etc.) and non-profit organizations for the investigation and/or remediation
of a suspected or known discharge of a hazardous substance. In 2003, the
HDSRF received additional funding through an appropriation and permanent
allocation of monies for loans and grants to the program. In September
2005, the HDSRF was expanded through amendments to the Statute to increase
the availability of grants and loans to public entities, private entities,
and non-profit organizations described in section 501(c)(3) of the federal
internal revenue code.
The Fund is administered through a partnership between the New Jersey
Department of Environmental Protection (NJDEP) and the New Jersey Economic
Development Authority (NJEDA). The NJDEP evaluates an applicant's preliminary
eligibility requirements, the technical merits of the proposed project,
and the estimated project costs. Upon NJDEP approval, the NJEDA evaluates
an applicant’s financial status, determines grant and/or loan eligibility,
and awards funding.
ELIGIBLE APPLICANTS AND REMEDIATION PROCESS
Grants and loans are available to public entities, private entities,
and non-profit organizations described in section 501(c)(3) of the federal
internal revenue code that perform a remediation under NJDEP oversight.
The remediation process in New Jersey, as prescribed by the Technical
Requirements for Site Remediation, N.J.A.C. 7:26E, consists of four primary
phases: Preliminary Assessment (PA), Site Investigation (SI), Remedial
Investigation (RI), and Remedial Action (RA). The purpose of the PA is
to identify the presence of any potentially contaminated areas of concern
and is the first step in the process to determine whether or not the site
is contaminated. The SI is performed to determine if any contaminants
are present at the site above the applicable remediation standards. For
contaminants that are identified above the applicable standards, the RI
is required to further characterize the area of concern, delineate the
contamination and provide the necessary information to evaluate remedial
alternatives. The RA requires the selection, development, and implementation
of the most appropriate action to remediate the site.
FUNDING TYPES AND ELIGIBILITY REQUIREMENTS
There are many different funding options made available to public entities
and private entities. Please review the following descriptions of grants
and loans to find the most appropriate funding category or categories
for your project:
PUBLIC ENTITIES
General Requirement
All public entity applicants must adopt an ordinance or resolution authorizing
the submittal of an application to the HDSRF Program. Applications must
also include the following to be eligible for funding through the HDSRF
program:
- A comprehensive redevelopment plan for the subject property; or
- Demonstrate that a realistic opportunity exists that the subject
property will be developed or redeveloped within a three-year period
from the completion of the remediation.
Grants for Brownfields Investigations
Grants are available to conduct PA, SI, and RI activities for real property
on which the public entity holds the tax sale certificate, has acquired
the property through foreclosure or other similar means, or has acquired
or passed a resolution, ordinance or other appropriate document to acquire
the property by voluntary conveyance for the purposes of redevelopment.
These grants provide for 100% of the eligible costs and are capped at
$3 million per municipality per calendar year.
Grants for Brownfield Development Area (BDA)
An additional $2 million in grants per municipality per calendar year
is available to perform PA, SI, RI, and RA activities on contaminated
property located within a designated BDA. An ownership interest in the
property is not required. The grant provides 100% of eligible costs for
a PA, SI, and RI and 75% of eligible costs for an RA. However, if the
public entity does not have an ownership interest, a lien in the amount
of the grant awarded for an RA will be attached to the property. The lien
can be removed if the property is transferred to the public entity that
expended grant monies for an RA on the property.
Matching Grants for Remedial Action
Matching grants are available to conduct an RA under the following circumstances.
- A matching grant for up to 75% of the costs of an RA is available
if the property will be redeveloped for recreation and conservation
purposes. Ownership of the property by the public entity is not required;
however, it must be demonstrated that the property is to be preserved
for recreation/conservation by conveyance of a development easement,
conservation easement, or other restriction/easement permanently restricting
development.
- A matching grant for up to 50% of the costs of an RA is available
if the property will be redeveloped for affordable housing.
Ownership of the property by the public entity is not required.
- If a public entity owns the property and proposes to perform an RA
that uses an innovative technology, a matching grant
is available for up to 25% of the costs of the remediation. These grants
are typically approved following completion of the RI and are capped
at $250,000 per project. NJDEP approval of the proposed innovative technology
as a remedial alternative is a prerequisite to the matching grant approval.
Grant monies are disbursed during the course of the RA work.
- If a public entity owns the property and proposes to perform an RA
that implements a limited restricted use or unrestricted use,
a matching grant for up to 25% of the costs specifically for implementation
of the approved remedy is available. These grants are typically approved
following completion of the RI and are capped at $250,000 per project.
NJDEP approval of the proposed RA to obtain a limited restricted/unrestricted
use designation is a prerequisite to the matching grant award. Grant
monies are disbursed following NJDEP issuance of a limited restricted
use/unrestricted use No Further Action letter.
Loans
Loans are available to public entities for up to 100% of the funding
needed to remediate a contaminated site if there is an imminent and significant
threat to public health and environment. The loan is capped at $3 million
per year per site. The interest rate is 2 points below the Federal Discount
Rate with a minimum of 3%, and is determined by the NJEDA. The maximum
term for any loan is 10 years.
Loans are available for an RA if a public entity owns the property and
has completed the PA, SI, and RI phases of the project.
PRIVATE ENTITIES
Innocent party grants
Grants are available to private entities that meet the criteria outlined
below for remediation of real property where the applicant is not a responsible
party:
- the property was acquired by the applicant before December 31, 1983;
- the hazardous substance or hazardous waste that was discharged at
the property was not used by the applicant; and
- the applicant certifies that he did not discharge any hazardous substance
or hazardous waste at an area where a discharge is discovered.
An applicant that meets all three criteria may be eligible for up to
50% of costs for PA, SI, RI, and RA costs not to exceed $1 million.
Matching Grants for Remedial Action
1. Grants are available to qualifying private parties (any person who
has a net worth of not more than $2 million) that receive the approval
of the NJDEP for an innovative technology as part of
an RA. A qualifying private entity meeting these criteria may be eligible
for up to 25% of the costs of an RA that is specifically for the implementation
of an innovative technology. The matching grant is capped at $250,000
per site. NJDEP approval of the proposed innovative technology as a remedial
alternative is a prerequisite to the matching grant award. Grant monies
are disbursed during the course of the RA work.
2. Grants are available to qualifying private entities (any person who
has a net worth of not more than $2 million) for the implementation of
a limited restricted use or unrestricted use RA. A qualifying
private entity may be eligible for up to 25% of the costs specifically
for the implementation of a limited restricted use or unrestricted use
RA. These grants are typically approved following completion of the RI.
The matching grant is capped at $250,000 per site. NJDEP approval of the
implementation of a limited restricted use or unrestricted use RA is a
prerequisite to the matching grant award. Grant monies are disbursed following
issuance of a limited restricted use or unrestricted use No Further Action
letter.
Loans
Loans are available to private entities for up to 100% of the funding
needed to remediate a discharge of hazardous substances up to $1 million
per year. The interest rate is the Federal Discount Rate with a minimum
of 5% and is determined by the NJEDA. The maximum term for any loan is
10 years.
NON-PROFIT ORGANIZATIONS
A pilot program has been developed to provide assistance to non-profit
organizations. Grants are available to conduct a PA, SI, and RI for non-profit
organizations described in section 501(c)(3) of the federal internal revenue
code that are exempt from taxation pursuant to section 501(a) of the federal
internal revenue code, 26 U.S.C. s. 501 (a). All requirements for municipalities
apply to non-profit organizations. Total funding available for this pilot
program is $5 million.
HDSRF PROGRAM FEES
The NJDEP charges oversight fees for a case manager’s oversight
of a remediation project. Applicants are billed on a semi-annual basis
for NJDEP oversight costs. Estimated NJDEP oversight costs are eligible
under the terms of each grant or loan as part of the approved HDSRF loan
or grant funding. The NJDEP estimates 5-10% of the total project costs
for oversight fees.
The NJEDA charges a processing fee for each grant application and supplemental
application, and an application, commitment and closing fee for each loan
application. These NJEDA fees are not eligible costs under the
HDSRF program.
HDSRF FUNDING PROCESS
NJDEP - Upon receipt of the application, the Memorandum
of Agreement (MOA) is executed, an NJDEP case manager is assigned, and
the proposed Scope of Work and Cost Estimate will be reviewed by the appropriate
NJDEP personnel. Following NJDEP review and approval, the application
will be forwarded to the NJEDA.
NJEDA - Upon receipt of the application from the NJDEP,
the NJEDA will review the financial information provided by the applicant
requesting financial assistance to determine their financial status and
ability to repay a loan. For grant applications from private entities,
the NJEDA will review financial eligibility and/or ownership documents
for final approval of grant awards. For public entities, the NJEDA will
verify the necessary municipal resolutions and redevelopment plans. Following
the NJEDA review, eligible applications will be presented to the NJEDA
Board of Directors (Board) for funding consideration above a cost threshold
of $100,000. Projects that require an initial funding amount that is less
than $100,000 do not have to undergo NJEDA Board approval. Supplemental
funding, if required to complete the investigation and/or remediation,
does not require NJEDA Board approval for up to $100,000. If approved
by the Board, closing documents will be forwarded to the applicant for
processing. After the properly executed closing documents have been returned,
the NJEDA grant or loan will be formally awarded.
FINANCIAL ASSISTANCE DISBURSEMENT
PUBLIC ENTITIES
Upon grant approval, funds may be disbursed at the beginning of each
phase of the remediation (PA/SI/RI). The municipality will be responsible
for compensating its consultant as each required task is completed, and
upon NJDEP or NJEDA request, be required to substantiate project expenditures
with actual invoices and/or other documents. Following project completion,
the municipality must formally close out the financial assistance agreement
with the NJEDA through submission of Schedule B forms and the return of
any unused portion of the approved grant.
PRIVATE ENTITIES
Upon approval, funds are generally disbursed by phase (PA/SI/RI/RA) following
submission of the required remediation reports and NJDEP approval. Detailed
invoices, receipts, reports and other documentation supporting project
expenditures are required prior to fund disbursements. Invoices must be
reviewed and approved by the NJDEP. Funding disbursements will be issued
as two-party checks in the name of the applicant and their consultant.
If copies of cancelled checks are included with the project invoices,
a single-party check may be issued to the applicant.
APPLICATIONS MAY BE DOWNLOADED DIRECTLY FROM THE NJDEP WEB SITE LOCATED
AT http://www.nj.gov/dep/srp/brownfields/obr/
(Rev. 09/2006)
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