Tuesday, March 30, 2010

NJBIA's Dave Brogan on environmental red tape

Within days of his inauguration as Governor of New Jersey, Chris Christie made good on a campaign promise by creating a Red Tape Group, headed by Lieutenant Gov. Kim Guadagno. Christie directed the group to review all pending and proposed regulations to determine "whether their costs and other burdens on businesses, workers and local governments outweigh their intended benefits."

Today, we welcome our first Guest Blogger, Dave Brogan, the VP of Environmental Policy at the New Jersey Business and Industry Association. Dave testified before the Red Tape Review Group on Tuesday, March 23rd and accepted our invitation to share with our readers an excerpt of the testimony that Dave provided to his NJBIA members.

On March 23rd, the Red Tape Review Group held its final formal hearing before writing its final report. Individual members will still be having public meetings in their districts, such as Senator Oroho, but the main work of soliciting input through a public hearing process by the group as a whole is over. They will be issuing their report on April 19th.

I was asked to testify on three issues: 1) a rule that needs to be repealed, 2) an inherent problem with DEP rules in general and 3) how a "one-stop" shopping entity could help move projects through the regulatory process.

The rule I focused on was the Public Access rule. I went over the history of the rule beginning with its adoption in 2007. I highlighted the fact that the rule was not mandated by Legislature, that it had no formula on which to base the "fees" that were being charged by the DEP, that the DEP has unlimited and unchecked decision-making authority (basically putting the permit applicant over a barrel) and that as the rule was written, it could be triggered over and over again for the same applicant.

I went on to discuss the woefully inadequate Economic Impact Analysis the DEP performed on the rule. The analysis makes no mention of the impact to those entities that must pay for off-site access. I also gave the Red Tape Group copies of the DEP's "Response to Comments," citing two questions directly pertaining to the impact the rule would have on industry, energy facilities, ports, etc.

The DEP's response cited the "positive externalities" associated with access being provided, such as increased patronage to souvenir shops, local gas stations, and restaurants in the vicinity. I respectfully made note of the fact that there weren't too many souvenir shops at or near nuclear power plants or refineries.

I went on to say that the Transition team requested information from the former Acting Commissioner about the number of projects, how much money was collected and a list of projects funded. The response was 1) "120 projects triggered the rule," 2) "we do not have a complete list but a handful of companies paid nearly $900,000 in off-site access fees" (an average of more than $100,000 per company) and 3) "the DEP does not have any data tracking the other projects that were funded."

I then highlighted the legislative process whereby one bill (signed into law in 2008) placed a two-year moratorium on the rule as it pertained to marinas and directed the DEP to create a task force to look into the impact the rule would have on the marina industry. I noted that the DEP had yet to create the task force and that the moratorium expires in September of this year.

Furthermore, I informed the Red Tape Group that the DEP was issuing permits with placeholder language stipulating (for example) that as a condition of a permit issued in 2008, the permit applicant would be required to provide either on-site access or payments for off-site access in 2010 when the moratorium ends.

I went on to discuss A-2954 of last session which provided an outright exemption for industrial, port, military, chemical and energy facilities from the rule. I explained how the Department of Transportation lobbied the Legislature to exempt themselves from the rule, and were successful at getting that amendment. "Think about it," I said, "you have a rule where one State agency has to lobby the Legislature in order to get exempted from another State agency's rule." The bill passed the General Assembly by a vote of 76-1, but was stalled in the Senate.

Finally, in an effort to drive the point home that this rule is the poster child for "regulations gone wrong," I explained that the DEP owns six marinas. They operate three and lease three. As part of the transition process, the transition team asked the DEP personnel in charge of those marinas if they could, in fact, comply with their own rule. They responded by saying that due to a lack of resources and personnel there would be no way the DEP operated marinas could provide 24 hour access to the public. In short, the DEP could not afford to comply with its own rule.

The Red Tape Review Group looked at each other as if to ask, "How can something like this happen?"

I then focused on the concept of "reasonableness" in rules and the one-stop shopping entity. Regarding the former, I said that the concept of "reasonable" from the DEP's perspective needed to change. It was clear by looking at the economic impact analysis and the response to comments on the Public Access Rule that the DEP personnel that wrote that rule felt that they were being reasonable. Clearly, we have a different opinion.

I went on to give another example of the difference between what NJ feels is reasonable versus what EPA and other states consider reasonable. I explained that when EPA, for example, places a requirement on businesses to meet certain air quality standards, such as NOx, they do a cost-benefit analysis. For NOx, EPA feels that spending $3,000 to $5,000 per ton on equipment to meet the standard is reasonable. New Jersey, on the other hand, feels that it is reasonable for businesses to spend $25,000 - $30,000 per ton.

Taking this one step further, if a company is looking to relocate to New Jersey or Pennsylvania, and they see this type of disparity, it puts New Jersey at a steep competitive disadvantage. The ancillary negative impact from that decision is that we will still have those pollutants impacting our air quality as they drift from west to east. As such, it is a lose-lose situation for NJ.

Finally, as for the "One-Stop" shop, I explained that the group should consider two concepts. First, there needs to be an entity within the DEP to bring the program areas together in order to better coordinate. For example, a person who is remediating a site gets their Remedial Action Work Plan approved by the Site Remediation Program. The work plan says that they will remove "X" number of cubic yards of contaminated soil and bring in clean fill. The person then has to get the rest of the land use permits necessary to effectuate the plan.

The problem is, the Land Use Program says that the person can't remove that soil because it is on or near a wetland. What happens next is unknown and sometimes stalls the project completely.

I also said that there needed to be an entity that could coordinate between departments. If a company needed DOT permits, DCA permits and DEP permits, there should be someone at the one-stop shop that can bring the necessary people together to get answers.

While these ideas are not new, it is great to see the level of importance this Administration and the bipartisan Red Tape Review Group are putting on regulatory reform. As it pertains to Public Access, NJBIA has been working on this issue for three years. And honestly, I think we have always been reasonable in our requests.

To those who would say that the NJBIA want to strip away the public's right to access, I would say that is simply not true. What we want is a rule that creates a clear distinction between sandy bathing beaches and industrial, port, energy, chemical, manufacturing and marina facilities. Let the DEP write a rule that reinforces the State's commitment to providing access to beaches, while at the same time, does not punish companies that have paid for the right to be located along tidal waters. It's time for DEP to recognize the economic benefit those companies provide on both a local and State level.

There does seem to be hope. We will have to see.

David H. Brogan
Vice President, Environmental Policy
New Jersey Business & Industry Association
102 West State Street
Trenton, NJ 08608

OK, folks, now here's your chance to comment on Dave's post and/or the Red Tape Group and/or environmental regulations in general. Use the Comment Box below. If it's not visible, activate it by clicking on the tiny 'comments' line below. You can respond anonymously, but be forewarned: personal attacks, vulgarities and plugs for your aluminum siding website won't make it to this page.

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