Permit Streamlining in New Jersey: An Oxymoron?

On July 9, Governor McGreevey signed into law the Permit Streamlining in Smart Growth Areas Act (“Smart Growth Act”) which provides expedited review in designated Smart Growth Areas for developers requesting expedited review of State permit applications and positioned to take advantage of the newly streamlined process, and creates the office of the Smart Growth Ombudsman to coordinate the process of review. The Bill was signed over heavy opposition from outraged environmental groups calling for the Governor’s veto of the Bill.

The Smart Growth Act was characterized in the media as “the price exacted for the legislation protecting the New Jersey Highlands” and was opposed by environmental preservation groups because it would effectively speed up development outside the 800,000 acres preserved under the Highlands Water Protection and Planning Act. In fact, the Act will be welcomed by developers simply because it provides a degree of certainty to a process that previously allowed applications to languish for several years before a determination was made.

Under the former system, large backlogs at the state level have caused applications to be held for several months before a completeness review could be performed. The frequent result was that applicants were forced to wait in a state of limbo only to be told that their applications were incomplete and needed to be resubmitted. The Smart Growth Act appears to be an effective remedy for this problem.

The Act targets permits granted by the Department of Transportation, Department of Environmental Protection and Department of Community Affairs in designated Smart Growth Areas, defined primarily as metropolitan or suburban areas, urban enterprise zones, growth centers, areas determined to be in need of redevelopment, and previously developed sites approved by the Department of Environmental Protection. The legislation will not change existing environmental laws or local zoning and planning standards.

Under the new Act, Governor McGreevey appointed Department of Community Affairs Commissioner Susan Bass Levin as New Jersey’s first Smart Growth Ombudsman. She will work directly with developers’ representatives and recommend permit applications in Smart Growth Areas for expedited review. She will have the additional authority to review any new rules proposed by any State agency to ensure compliance with the State Development and Redevelopment Plan and recommend amendments to proposed rules as necessary. Applicants seeking expedited review will be assessed additional fees in order to finance the office of the Smart Growth Ombudsman and the costs associated with completing the expedited review.

Divisions of Smart Growth will be established in the Department of Environmental Protection, Department of Transportation, and the Department of Community Affairs. Working with the Smart Growth Ombudsman, directors of each of the Divisions, also appointed by the Governor, will review and issue permits in cases where the applicant requests expedited review.

The permitting process will be streamlined as follows: Within 45 days of filing a permit application, the Division will determine whether an application is technically complete. With the exception of certain applications to the DEP, if the application is determined to be complete, or if a notice of deficiency is not issued within 45 days, the application will be deemed technically complete. If the Division fails to take action on a technically complete application within 45 days, approval will be automatic. The Act allows for a 30-day extension in making the determination only if the applicant consents to the delay.

DEP applications for water allocation permits will be deemed complete 45 or 60 days after filing, depending on the application, unless a notice of deficiency is issued. Following a 30 day public comment period, the DEP must take action on the application within five or 15 days depending on the number of comments received. As with all applications, a 30-day extension will be granted only with the applicant’s consent.

In order to meet these deadlines, the Act requires each Division to register qualified professionals authorized to certify the completeness of expedited applications. Each of the three Smart Growth Divisions will establish a program for the registration of these professionals.

The Smart Growth Act also provides for administrative review through the Office of Administrative Law. Expedited appeal will be provided to any contested permit action involving a proposed project in a Smart Growth Area. All cases will be heard by the Smart Growth Unit of administrative law judges, which will be dedicated exclusively to hearing permit appeals. Members of the dedicated judicial body will be appointed by the Governor.

It is expected that detailed regulations to implement the Act will be proposed and ultimately adopted by the Departments of Environmental Protection, Transportation and Community Affairs. The devil may well be in the details. In the meantime, the Act is a major step in reversing the long-held notion that permit streamlining in New Jersey is a contradiction in terms.