The Highlands Rules - FAQ for Municipalities

Prepared for the State League of Municipalities by:
Lewis Goldshore, Esq.*

Q.1. When were the Highlands Rules adopted?

A.1. The Department of Environmental Protection (DEP) adopted the Highlands Rules on May 9, 2005. As provided in the Highlands Water Protection and Planning Act (HWPPA), N.J.S.A. 13:20-1 et seq., the rules became effective on filing with the Office of Administrative Law. Additional information regarding the rules and DEP's Highlands program can be found on the department's Highlands website, www.state.nj.us/dep/highlands/.

Q.2. Why are Highlands Rules referred to as the 270 Day Rules?

A.2. HWPPA, enacted on August 10, 2004, required that DEP adopt rules within 270 days to establish environmental standards for the preservation area and to establish the Highlands permitting review program. N.J.S.A. 13:20-31.

Q.3. Where can copies of the 270 Day Rules be obtained?

A.3. An advance copy of the 270 Day Rules is posted on DEP's Highlands website, www.state.nj.us/dep/rules/adoptions/050905a.htm. The official copy of the rules will be published in the June 6, 2005 issue of the New Jersey Register. The official citation for the 270 Day Rules is N.J.A.C. 7:38-1.1 et seq.

Q.4. Will the 270 Day Rules be modified in the future?

A.4. DEP has announced that it will be consulting with the Highlands Council, State Planning Commission and the Departments of Agriculture, Community Affairs, and Transportation concerning the 270 Day Rules. While some minor changes may result from that process, no significant revisions should be expected. HWPPA provides that the 270 Day Rules shall remain in effect for a period not to exceed one year. DEP may then adopt, amend, or readopt the regulations. N.J.S.A. 13:20-31.b. Based on experience with the implementation of the 270 Day Rules some changes are possible, but major revisions should not be expected.

Q.5. Where do the Highlands rules apply?

A.5. The rules apply in the 400,000 acre preservation area. The preservation area is identified in HWPPA and includes 52 municipalities in seven counties. A list of the affected municipalities can be found at www.state.nj.us/dep/highlands/municipalities.htm. A map of the area is available on i-MapNJ DEP, www.nj.gov/dep/gis/depsplash.htm. It should be noted that the 270 Day Rules do not apply in the Highlands planning area - that is the portion of the Highlands region not designated as the preservation area. N.J.S.A. 13:20-31.c.

Q.6. How are the 270 Day Rules organized?

A.6. The rules are organized in 13 subchapters. General information pertaining to the 270 day rules is provided in subchapter 1. The Preservation Area Standards are established in subchapter 3. The remaining rules establish the Highlands Permitting Review Program (HPRP). These include subchapters 2. Jurisdiction; 4. Highlands Resource Area Determinations (HRADs); 5. Rare, Threatened and Endangered Species Habitat Evaluations; 6. Highlands Preservation Area Approval (HPAA); 7. Emergency Permits; 8. Pre-Application Procedures; 9. Application Contents; 10. Fees; 11. Review of Applications; 12. Contents of Approvals; and 13. Enforcement.

Q.7. How is Major Highlands Development defined?

A.7. Major Highlands Development is a phrase that is used throughout the Highlands rules. It includes capital or other projects undertaken by local governmental units that meet specified thresholds.

Major Highlands Development includes the following activities when undertaken in the preservation area: (1) any non-residential development; (2) any residential development that requires an environmental land use or water permit or that result in the disturbance of one acre or a cumulative increase in impervious surface by .25 acre or more; (3) any activity undertaken or engaged in that is not a development but results in the disturbance of .25 acre or more of forested area or that results in the cumulative increase in impervious surface by .25 or more on a lot; or (4) any capital or other project by a State entity or local government unit that requires an environmental land use or water permit or that results in the ultimate disturbance of one acre or more of land or a cumulative increase in impervious surface by .25 acre or more. N.J.A.C. 7:38-1.4.

Q.8. What are the Preservation Area Standards?

A.8. The Preservation Area Standards consist of a series of requirements that are designed to severely restrict development in the preservation area. N.J.A.C. 7:38-3.1 et seq. A Highlands Preservation Area Approval (HPAA), Highlands Permit, will not be issued by DEP unless the proposed development satisfies all of the Preservation Area Standards and the standard requirements in N.J.A.C. 7:38-6.2.

The Preservation Area Standards include extremely strict standards for water supply diversion sources; public community water systems; wastewater treatment facilities [as to septic systems, requires 88 acres of land for a single-family home if the lot contains forest on more than 50% of its area; where the forest area is less than 50%, the minimum area requirement is 25 acres]; impervious surfaces [establishes a limit of 3% of the land area of a lot]; highlands open waters [establishes a 300-foot buffer]; flood hazard areas; steep slopes; upland forested areas; historic and archaeological areas; rare, threatened or endangered plant and animal species [a Highlands permit will not be issued where the proposed activity will jeopardize the continued existence of, or result in the likelihood of the destruction or adverse modification of habitat for, any rare, threatened or endangered species of animal or plant]; and unique or irreplaceable land types and existing scenic attributes.

Q.9. What is a Highlands Area Determination (HAD)?

A.9. A Highlands Applicability Determination (HAD) and Water Quality Management Plan (WQMP) Consistency Determination will be needed by those contemplating a Major Highlands Development. HADs will provide guidance as to whether the proposal is a Major Highlands Development, is WQMP consistent and/or is HWPPA exempt. N.J.A.C. 7:38-2.4. For additional information concerning exemptions, see N.J.S.A. 13:20-28 and N.J.A.C. 7:39-2.3.

Q.10. What is a Highland Resource Area Determination (HRAD)?

A.10. Highlands Resource Area Determinations (HRADs) are designed to determine the presence/location of Highlands Resource Areas (HRAs) on a site. HRAs include Highlands open waters; flood hazard areas; steep slopes; forested areas; rare, threatened or endangered species or plant habitats; areas with historic or archaeological features; and unique or irreplaceable land types. DEP is authorized to issue three types of HRADs: a Footprint of Disturbance HRAD, a Boundary Delineation HRAD and a Boundary Verification HRAD. N.J.A.C. 7:38-4.1 et seq.

Q.11. What is a Highlands Preservation Area Approval (HPAA)?

A.11. The Highlands permit is known as a Highlands Preservation Area Approval (HPAA). To obtain this authorization, an applicant will be required to demonstrate compliance with the preservation area standards and DEP will need to make a series of subjective determinations. N.J.A.C. 7:38-6.1 to -6.3.

Q.12. What waivers are available?

A.12. The Highlands rules authorize three types of waivers: (1) to protect public health and safety; (2) for redevelopment in certain previously developed areas in the preservation area; and (3) to avoid the taking of property without just compensation. N.J.A.C. 7:38-6.4(a).

Municipalities will be especially interested in waivers to protect the public health and safety. Examples of these waivers include new or expanded police, fire and first aid facilities to serve existing communities; or the replacement of failing septic systems, wells or water supplies. N.J.A.C. 7:38-6.5.

A second waiver category authorizes redevelopment in certain previously developed areas. This covers brownfields sites such as sanitary landfill facilities, former or current commercial or industrial sites where DEP has issued No Further Action letters, former or current commercial or industrial sites that are listed on the Known Contaminated Sites list, and previously developed areas with at least 70% impervious coverage. N.J.A.C. 7:38-6.6 and -6.7.

But the most controversial waiver category concerns those that would be designed to avoid the taking of property without just compensation. With respect to takings waivers, the rules combine the various tests that the courts have previously applied. DEP is directed to consider the property owner's investment in the property as a whole; the minimum viable and economically beneficial use of the property as a whole; the environmental impacts of the minimum viable and economically beneficial use for the property as a whole, as well as the consistency of these impacts with the Highlands Act's goals.

The takings waiver process is not an easy shortcut to avoid HWPPA compliance. The application is timely only after DEP has issued a decision on an application under the rules as strictly applied. It also requires that an applicant demonstrate that: no alternative to the proposed major Highlands development exists; it has made a good faith effort to transfer its development rights and has not obtained a purchase commitment from the Highlands Council or a receiving zone municipality; the property has been offered for sale at or below the specific fair market value to a specified class of potential purchasers; and that no reasonable offer based upon the minimum beneficial, economically viable, use has been received.

A HPAA with a takings waiver will allow only the minimum relief necessary to enable a property owner to realize the minimum beneficial economically viable use of its property. The permitted development must be designed and built in a manner to conserve the Highlands resources to the maximum extent possible with the remainder of the property being subject to a recorded conservation restriction. N.J.A.C. 7:38-6.8.

Q.13. What provisions apply to temporary, emergency Highlands Permits?

A.13. DEP is authorized to issue a temporary, emergency Highlands Permit if it determines that an unacceptable threat to human life, a severe loss of property, and/or severe environmental degradation will occur if such action is not taken; and the anticipated threat or loss will likely occur before a HPAA can be issued under the usual ordinary procedures. N.J.A.C. 7:28-7.1.

Q.14. What fees apply?

A.14. The fees for the various Highlands reviews are specified in the rules and are very substantial. N.J.A.C. 7:38-10.1

Q.15. What enforcement provisions are available?

A.15. The Highlands Law provides DEP with a series of enforcement options. These authorize very serious civil penalties, as well as criminal penalties in appropriate situations. Strict compliance will be required to avoid these sanctions. N.J.A.C. 7:38-13.1 et seq.

Q.16. What are some of the likely results of the adoption of the Highlands rules?

A.16. Private, as well as public, development in the preservation area will be virtually prohibited. The value of most undeveloped property in the preservation area will be severely and adversely impacted as a result of the regulations. A large number of landowners are likely to seek adjustments in their local property tax assessments and will pursue tax appeals if adequate relief is not granted. The Highlands rules will be challenged in court but the results are far from certain.

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* Lewis Goldshore, Esq., is the managing partner of the Lawrenceville firm of Goldshore, Cash & Kalac where he practices environmental, land use and local government law. Mr. Goldshore, is co-author of New Jersey Environmental Law, published by the New Jersey Institute for Continuing Legal Education (NJICLE). He serves as Environmental Counsel and Special Highlands Counsel to the New Jersey State League of Municipalities. Mr. Goldshore will moderate and speak at an NJICLE program, The New Highlands Regulations Law, to be presented by NJICLE on June 28, 2005.