NJDEP Adopts Final Inland Flood Protection Rule and Murphy Signs New Flood Disclosure Law – Update from Manko Gold Katcher Fox

July 17, 2023

Bruce S. Katcher, Esq. and Natalia P. Teekah, Esq.

MGKF Special Alert

New Jersey Department of Environmental Protection (NJDEP) has published the final Inland Flood Protection Rule (IFP Rule), which takes effect today, July 17, 2023. In addition, just prior to the IFP Rule adoption, on July 3, 2023, Governor Murphy signed into law a new flood disclosure law (the “Flood Disclosure Law”) setting new flood risk disclosure requirements applicable to sellers and landlords. Both developments are addressed below.   

The IFP Rule
The IFP Rule adopts amendments to both New Jersey’s Flood Hazard Area Control Act (FHACA) Rules, N.J.A.C. 7:13, and the Stormwater Management (SWM) Rules, N.J.A.C. 7:8, with the stated purpose of bolstering community resilience in the face of anticipated increases in the intensity of precipitation events, as based on climate-informed precipitation data. According to NJDEP, the IFP Rule was crafted to update the nearly 30-year-old rainfall data collected in the 1970’s and 80’s, account for future increases in climate change-induced precipitation, and update flood mapping to account for current and future conditions.

The IFP Rule applies only to future projects deemed to be Major Developments in fluvial (non-tidal) flood hazard areas subject to the amended FHACA Rules and stormwater requirements for such future projects subject to the amended SWM Rules. The rules were developed based on a study conducted for the State of New Jersey by Cornell University and utilize precipitation projections developed under a moderate greenhouse gas emission scenario for a 2050-2099 timeframe.

The final IFP Rule makes only minor administrative changes to the rule package proposed in December 2022.

Key Provisions of the FHACA Rules

  • The new regulations expand the footprint of the jurisdictional floodplain and construction subject to the new regulations will have to be elevated by two feet over the previously-applicable requirement in accordance with the following:
    • The new regulations raise the NJDEP 100-year design flood elevation (DFE) by two feet.
  • The FEMA DFE has been raised by two feet for a total of a three foot overall increase above FEMA’s current 100-year flood elevation.
  • Permit applicants may employ a licensed professional engineer to complete flood mapping in instances where the applicant disagrees with state and federal mapping or no FEMA or NJDEP flood mapping exists.
  • All permits for new, reconstructed, enlarged, or elevated structures within a flood hazard area must additionally comply with applicable design and construction standards of the New Jersey Uniform Construction Code. 
  • The amended rules newly define “public transportation entity” and provide such entities with flexibility for railroad, roadway, or parking area projects where strict compliance with the new rulemaking may not be feasible.

Legacy Application (Grandfathering) Provisions:

  • Certain NJDEP regulated activities which were outside of the applicable flood hazard area and riparian zone prior to July 17, 2023 but are now part of the regulated area are exempt from the new rules provided that such activities received all necessary Federal, State, and local approvals such that construction could have lawfully commenced, and has commenced, prior to July 17, 2023.
  • Certain NJDEP regulated activities that are part of a project for which a complete flood hazard application was submitted prior to July 17, 2023 are exempt provided that the application is subsequently approved.
  • Developers may also make an application for fact-specific hardship exemptions if these grandfathering exemptions do not apply.
  • Major development for public roadway or railroad projects undertaken by a public transportation entity that has reached a milestone in its development or design before July 17, 2023 such that compliance would necessitate reevaluation of a preferred alternative or equivalent milestone may be subject to exemption from the new requirements.

Key Provisions of the New SWM Rule
Best Management Practices (BMPs) for major development must now account for both current and future precipitation totals for two-, ten-, and 100-year storms.  This means that stormwater BMPs must now be designed using precipitation depth and drainage area calculations based on newly-promulgated adjustment factors to account for more intense storm conditions based on future precipitation estimates.

  • The Rational and Modified Rational Methods for calculating peak runoff rates are no longer considered an accepted methodology for calculating runoff.
  • Similar to the new FHACA rules, the amended SWM rules newly define “public roadway or railroad” and “public transportation entity” and provide for greater flexibility in the design of stormwater BMPs for such projects and entities due to constraints inherent in this work.

Legacy Application (Grandfathering) Provisions:

  • Certain municipal land use applications for major development that do not require a NJDEP permit under the FHACA, wetlands, CAFRA, waterfront development, or Highlands programs, but are subject to stormwater requirements pursuant to municipal ordinance, are not subject to the amended SWM rules if an administratively and technically complete application has been submitted to the municipality prior to July 17, 2023. These projects are subject to the SWM rules as in effect of March 2, 2021.
  • Major development for which technically complete applications have been submitted to NJDEP for FHACA, wetlands, CAFRA, waterfront development, or the Highlands programs prior to March 2, 2021 are subject to the stormwater rules that were in effect on March 1, 2021.
  • Major development for which technically complete applications have been submitted to NJDEP for FHACA, wetlands, CAFRA, waterfront development, or Highlands permits after March 2, 2021 but prior to July 17, 2023 shall be subject to the stormwater rules in effect on March 2, 2021.
  • Major development for public roadway or railroad projects undertaken by a public transportation entity that has determined a preferred alternative or reached an equivalent milestone before July 17, 2023 are subject to stormwater requirements in effect prior to July 17, 2023.

Additional Points of Note
Comments submitted in response to the December 5, 2022 Rule Proposal offered insight into a number of additional points of interpretation as follows:

  • Environmental Justice: Several commenters raised the question of whether the IFP Rule will result in a disproportionate impact to environmental justice communities. NJDEP’s stated position is that the new rule is intended to similarly protect all communities from flood impacts, noting that all individual permit applications for facilities that are subject to the Environmental Justice Law will proceed through the Environmental Justice process required under that Law.
  • Affordable Housing: Commenters raised concern over the new rules restricting affordable housing development due to increased construction costs in the regulated area. NJDEP disagreed, indicating that the rules do not differentiate between affordable housing projects and other housing development and stated that the adopted rules do not limit the opportunity for development but rather ensure that development is constructed in a protective manner that ensures continued viability. To reconcile the commenters’ concerns about housing affordability and the agency’s concerns about a regulatory scheme that is equally protective for all residents seems particularly difficult in this situation.
  • Flood Insurance: NJDEP stated that the rulemaking does not affect the need for flood insurance or the premiums that would apply to buildings located within or outside of FEMA-mapped flood areas. It further anticipates that the new rules will result in a positive return on investment through reductions in flood insurance premiums occasioned by the elevation of buildings to meet the new DFE requirements, thereby, to some extent, mitigating increased costs of compliance. Of course, this does not account for the possibility of future premium increases to the extent that FEMA mapped areas may be adjusted by FEMA in the future based on the types of changes adopted under the IFP Rule.   

New Flood Risk Disclosure Law
Just prior to the final adoption of the IFP Rule, important new flood risk disclosure requirements (the “Flood Disclosure Law”) were passed by the New Jersey Legislature and signed into law by Governor Murphy on July 3, 2023.

These new disclosure requirements apply to both sellers of property and landlords. With respect to sellers, the Flood Disclosure Law requires that property owners use a property condition disclosure statement to notify prospective purchasers of whether the property is located within a FEMA Special or Moderate Risk Flood Hazard Area along with any actual knowledge the seller may have of flood risks to the property. Notably, the new requirements do not extend to the new NJDEP delineated floodplains under the IFP rules.

As regards landlords, the Flood Disclosure Law requires that they disclose, prior to lease signing or renewal, whether the rental property is located within a FEMA Special or Moderate Risk Flood Hazard Area, along with any knowledge of historic flooding in the building or parking areas. The landlord disclosure requirements apply to commercial and residential properties.

The Department of Consumer Affairs is expected to provide notification forms and guidance to assist with Flood Disclosure Law compliance in the near future. Requirements will go into effect 90 days after applicable guidance is published.

In connection with the IFP Rule, NJDEP additionally launched a flood indicator screening tool in June 2023 to assist with providing information regarding the presence of indicators of potential flood risk on or near properties of interest that should assist seller and landlords in complying with the Food Disclosure Law and will also be of assistance to property developers in general. The interface maps the location of waterways, FEMA Flood Zones, State Flood Hazard Areas and associated Design Flood Elevation profiles, and provides information on New Jersey’s Tidal Climate Adjusted Flood Elevation, which depicts future sea-level conditions in tidal areas.

For questions regarding these New Jersey developments, please contact Bruce Katcher or Natalia Teekah at 484-430-5700.