THE INDUSTRIAL SITE RECOVERY ACT (ISRA)
ISRA applies to premises on which industries were operated that
- a) have a North American Industrial Classification System (NAICS) number listed in Appendix C of N.J.A.C. 7:26B
- b) have operated in New Jersey on or after December 31, 1983 and
- c) use or store hazardous substances as defined at N.J.A.C. 7:1E
when certain triggering events such as the closure of operations or when a contract of sale is entered. Clicking here will direct you to the New Jersey Department of Environmental Protection webpage on ISRA.
In order to find the proper NAISC number, go to the United States Census Bureau Page and use the 2007 keyword search.
The determination the proper or primary NAICS number and consequently whether ISRA applies is not an easy matter when several different operations were conducted on the premises. For ISRA not to apply, the primary operation cannot be listed in Appendix C. An evaluation of the number of workers and amount of space used in each operation, and the revenue and sales from each operation, will determine the primary operation of the premises.
If the DEP disagrees with the determination made by the owner of the property, a court of law will usually defer to the determination of the DEP. Misleading the DEP or simply making a mistake can lead to important consequences to the seller and buyer many years after the property has been transferred as the following unpublished case shows:
“The company said that it was a retailer of fuel and exempt from ISRA. The DEP rescinded it non-applicability letter when it learned seven years later that the facility sold more wholesale fuel, which is subject to ISRA, than retail fuel. The Appellate Division upheld the decision. ‘the decision of an agency is entitled to deference unless the decision is arbitrary, capricious, or unreasonable. Indeed, where special expertise is required, as in this case, an even stronger presumption of reasonableness exists. Thus, where the agency’s decision is supported by credible evidence in the record, this presumption of reasonableness generally dictates that its decision should be affirmed.’” In re South Jersey Fuel, Inc. A-6938-98T5 (N.J. Super. App. Div. 2000) (Unpublished)
It is extremely important to retain expert advice when dealing with ISRA especially in recent years since the DEP no longer issues letters of non-applicability.