On Jan. 8, in a parting rebuff to Gov. Christie, the legislature invoked the seldom utilized constitution's legislative review clause to invalidate DEP's 2016 septic system density standards for the Highlands Water Protection and Planning Act's preservation area. SCR-163/ACR-255; N.J.S.A. 13:20-1 et seq. The nullified rule modified the requirements in the 2006 version that had been sharply criticized by the affected landowners. For a discussion of the statute's adoption, see L. Goldshore and M. Wolf, “Something is Stirring in the New Jersey Highlands,” 175 N.J.L.J. 200 (Jan. 19, 2004), and “Highlands Preservation Bill a Priority,” 176 N.J.L.J. 549 (May 17, 2004).

Background

The Highlands Act recognized that the region was “an essential source of drinking water, providing clean and plentiful drinking water for one-half of the state's population.” It also noted that it was “important to ensure the economic viability of the communities throughout the … Highlands; and that … development, redevelopment, and economic growth in certain appropriate areas … [is] … also in the best interests of all the citizens of the State.” N.J.S.A. 13:20-2.

But the imposition of severe limitations on future development was paramount, particularly in the preservation area, where economic viability and growth were accorded short shrift. This approach was exemplified in DEP's 2006 septic density standards, which set the requirement for the construction of individual subsurface disposal systems: 88 acres were required for forested lots and 25 acres for non-forested properties. N.J.A.C. 7:38-3.4(b). Affected landowners questioned whether these restrictions were needed to protect the water resource from degradation or whether their real purpose was to enable the preservation of private property while skirting the obligation to pay just compensation. N.J.S.A. 13:20-32(e); N.J. Const. art. 1, par. 20.

New Jersey Farm Bureau, a private, non-profit membership organization that advocates for the preservation of agriculture and the promotion of agricultural interests, challenged the septic density standards on the basis that they lacked a scientific foundation and were arbitrary and capricious. The Appellate Division agreed that there were substantial questions regarding the reasonableness of the DEP's methodology and remanded the matter for an evidentiary hearing. In re Highlands Protection and Planning Rules, 401 N.J. Super. 587, 595 (App. Div. 2008).

In 2009, at the conclusion of an Office of Administrative Law hearing, the initial decision found substantial credible evidence to support the rule and found that it constituted a valid exercise of the DEP's discretion. The department's final decision also concluded that there was a rational, scientific basis for the septic density standards and that there was a failure to demonstrate that the methodology was arbitrary or capricious. DEP's decision led to the filing of additional briefs in the Appellate Division. In 2010, a change in gubernatorial administrations occurred, and DEP requested a remand to enable it to develop amendments to the septic density rule.

Those amendments were not proposed until 2016 and adopted in 2017. The new rule linked septic density to the property's location within the land use capability (LUC) zones identified in the Highlands Regional Master Plan. In the Protection LUC the requirement for a septic system was 23 acres; in the Conservation LUC the requirement was 12 acres; and in the Existing Community LUC the requirement was 11 acres. According to DEP, the new standards would have authorized the construction of up to 1,145 additional septic systems, an increase of about 12 percent, for the 414,900-acre preservation area.

Legislative Review

These revisions led to a sustained firestorm of protest from the organized environmental community. The legislature reacted by introducing concurrent resolutions pursuant to the legislative review clause of the constitution to nullify the amended rule as inconsistent with legislative intent. N.J. Const. art. 5, §4, par. 6.

The clause, approved by the voters in 1992, provides the procedural steps required for legislative nullification of an administrative rule. Those include:

• the adoption of a concurrent resolution transmitted to the governor and the agency head which promulgated the rule;
• 30 days for the agency to amend or withdraw the existing or proposed rule;
• if the required action is not forthcoming, the legislature could invalidate or prohibit the rule, in whole or in part, by a majority vote of the authorized membership of each house in favor of a second concurrent resolution; and
• the nullification vote could not take place for 20 calendar days following the placing on the legislators' desks of the transcript of a public hearing that concerned the invalidation or prohibition of the rule.

On June 8, 2017, the first concurrent resolution declaring that DEP's septic density rule was not consistent with legislative intent received final legislative approval. The agency failed to amend or withdraw the rule within 30 days. The legislature held the required public hearing and on Jan. 8, 2018, approved the second concurrent resolution that invalidated the rule.

It is noteworthy that while these events were unfolding, the Supreme Court was considering the standard of review to be applied if a court reviews the legislature's exercise of its nullification authority pursuant to the legislative review clause. Communications Workers of America v. NJ Civil Service Comm., 447 N.J. Super. 584 (App. Div. 2016), certif. granted, 229 N.J. 590 (2017).

In that case, the Appellate Division recognized that the legislature was entitled to substantial deference in the exercise of its constitutional power but that the court retained its authority to reverse the determination if:

(1) the Legislature has not complied with the procedural requirements of the Legislative Review Clause; (2) its action violates the protections afforded by the Federal or New Jersey Constitution; or (3) the Legislature's concurrent resolution amounts to a patently erroneous interpretation of “the language of the statute which the rule or regulation is intended to implement.” [447 N.J. Super. at 601].

It remains to be seen whether the Supreme Court will agree with this formulation.

Reactions

As expected, the environmentalists were pleased with the outcome while property owner representatives were not. According to Jeff Tittel, director of the New Jersey Sierra Club, the legislature's action was “a big victory for the Highlands and for clean water … it's upholding the integrity of the Highlands Act and the right of the legislature to say a rule weakens legislative intent.” njspotlight.com, Jan. 8, 2018. Tittel acknowledged that lot size might not matter: “[t]o us, to allow additional development in the preservation area is unconscionable.” njherald.com, Jan. 8, 2018.

Local legislators who opposed the invalidation effort had a different perspective. Assemblyman Parker Space's (R-Sussex) indicated that: “This action by the legislature isn't about science, it's about politicians who wouldn't survive two seconds out in the country pretending to be environmentalists by telling us what to do with our land.” njherald.com, Jan. 8, 2018. Peter Furey, executive director of the New Jersey Farm Bureau had a more measured response: “Property owners remain unsettled and unhappy, and losing septic density was a disappointment, particularly, since the legislature has failed to enact a dedicated funding source to help landowners off-set the heavy regulations in the preservation zone.”

In one of his final official actions, DEP Commissioner Bob Martin sent a letter to the Senate President and General Assembly Speaker on Jan. 12, 2018, advising that “the Department does not plan to withdraw these rules … [because the] resolutions are constitutionally flawed for both procedural and substantive reasons.” That is unlikely to be the final word on the subject due to the recent change of administrations and its anticipated environmental agenda.

Goldshore practices in Princeton. His practice is devoted to environmental, land use and municipal law. The views expressed in this article are solely those of the author and do not necessarily reflect those of any of his clients.