January 1, 1900

Nielsen V. Lewis

On July 9, 2004, former Governor James E. McGreevey signed into law P.L. 2004, c. 89 (the "Fast Track Law"). The Fast Track Law offered builders proposing development in "smart growth areas" the promise of expedited permitting by the Department of Environmental Protection (DEP), the Department of Transportation (DOT) and the Department of Community Affairs (DCA).

The new program was supposed to go into effect on November 6, 2004, the deadline provided in the law for each regulatory agency to set up a program for qualifying and registering professionals authorized by the law to provide the requisite certifications- a key component of the expedited permitting scheme. These include certifications that the application is complete, that it satisfies certain statutory and regulatory requirements for the permit and, if applicable, that it qualifies for permitting-by-rule under the law.

Yet as of this writing, not a single application for expedited permitting (Fast Track Permitting) has been processed. Nor does it appear that any such applications will be processed in the near future. What happened to Fast Track Permitting?

Slow Down By Executive Order

The Fast Track Law has been put on a slow track by gubernatorial action. On November 5, 2004, Governor McGreevey signed Executive Order 140. Its stated purposes include the need to "carefully" develop rules for implementation of the Fast Track Law, to obtain more public input, and to ensure consistency with federal permitting programs delegated to the State.

Executive Order 140 effectively postponed expedited permitting several months by imposing the following requirements:

1. Before formally proposing implementing rules for public comment, DEP, DOT and DCA are required to file a notice of "pre-proposal" to solicit initial public comment on draft rules for qualification and registration of professionals and for implementing other aspects of the law.

2. The regulatory agencies may not formally propose implementing rules in accordance with the New Jersey Administrative Procedure Act until after the close of public comment on the draft rules.

3. No permit applications may be processed until the agencies' formal adoption of the rules implementing the Fast Track Law.

4. In addition, DEP is directed to review and "conform," if necessary, its proposed implementation of the Fast Track Law to ensure that its rules do not run afoul of requirements of federal law for retaining the State's authority to implement federal environmental laws and regulatory programs delegated to the State (such as the Wetlands Act of 1970 and the Freshwater Wetlands Act).

No timetable is provided in the Executive Order for completing the latter federal consistency assessment.

The extended timetable and far- reaching scope of Executive Order 140 raise serious legal questions, such as consistency with the Fast Track Law and legislative intent. It could be the subject of a future legal challenge. But for now, unless Executive Order 140 is rescinded by Acting Governor Richard J. Codey, expedited permitting for building in smart growth areas is not a realistic option.

Draft DEP Fast Track Rules

Pursuant to Executive Order 140, DEP published notice of its pre- proposal in the December 20, 2004 New Jersey Register. The pre-proposal is in two parts. The first part consists of draft rules for the qualification and registration of the professionals to provide the applicable certifications. The second part solicits comments on the concept of a "phased-in" implementation (slow down) of the Smart Growth Program. The first phase would be adoption of rules for expedited permitting limited to those cases where there is a high demand for permits (State Planning Areas 1 and 2 and State Plan-designated centers) and little or no federal interest (i.e. the least environmentally-sensitive lands). No draft rules for phasing in the expedited permitting program are included in DEP's notice of pre-proposal. Nevertheless, it appears clear enough that plans for future permitting under the Fast Track Law are changing course-the availability of expedited permitting under the Fast Track Law will be greatly reduced.

The Future of Fast Track Permitting

The Fast Track Law was drafted and enacted in a hurry without significant input from the regulated communities. According to some reports, it was offered as a quid pro quo to generate support from legislators who were balking at approving the then-pending New Jersey Highlands legislation.

The rapid signing of the Fast Track Law generated vehement opposition by environmental groups. On December 13, 2004, Senator Leonard Lance introduced a bill to repeal the law (Senate No. 2157). In response to criticism, Senator Stephen Sweeney, who introduced the original bill behind the Fast Track Law, indicated the likelihood of amendments. In his State of the State address delivered on January 11 of this year, Acting Governor Codey addressed the subject in a single sentence: "I look forward to recommendations from Senators Smith and Sweeney as well as Assemblyman McKeon on how to improve the Smart Growth bill."

Will expedited permitting under the Fast Track Law become a reality after the slow-down and doubts created by Executive Order 140 and public reaction? Builders interested in taking advantage of the Fast Track Law should review DEP's notice of pre-proposal and draft rules in the December 20, 2004 New Jersey Register and consider participating in the public comment period. Thereafter, they should monitor DEP's reaction to the public comments and the next step of formally proposing rules to implement the Fast Track Law. Should DEP move forward with proposed rules, they will be the subject of additional public input under the New Jersey Administrative Procedure Act.

If one thing is clear at this time, it is that there will be no expedited permitting before the summer of 2005. As of this writing, Fast Track Permitting has been diverted to a slow track. It has not necessarily been derailed.

Nielsen V. Lewis is a partner of the firm's Environmental Practice Group and a member of the Land Use Division. He concentrates his practice in the areas of environmental law, insurance law and land use, with an emphasis on prosecuting and defending complex environmental litigation.