TRENTON — When environmental consultant David Muscalo visited a Paterson building near the Passaic River two weeks ago, he saw a half inch of dirt on the ground and a waterline 10 inches above the floor.

The building, which houses heavy machinery, is prone to flooding and Muscalo’s client, ARC Machine Co., wants to sell it. The problem is the soil on the property is contaminated, and under a state rule, the company must excavate two feet of soil, dispose of it at another site and then bring in new dirt.

"My client simply can’t afford it," Muscalo said.

Now a controversial executive order by Gov. Chris Christie allows the company to ask state environmental officials to bypass the rules and let it use a less expensive way to tackle the problem.

ARC Machine Co. was the first to use Christie’s new "waiver rule," which allows businesses to request reprieves on a case-by-case basis and went into effect last week.

The rule is hailed by businesses who say they are buried in environmental red tape. Environmentalists, however, are livid over the potential to undermine protections to New Jersey’s land, water and air.

"There are volumes of rules that have been created in connection to environmental laws. They are overwhelming," said Larry Ragonese, a spokesman for the state Department of Environmental Protection. "There are still so many nuances. We’re trying to give people a chance to be able to make their case."

But environmentalists and activists argue the waiver rule will roll back efforts to protect open space and fight pollution. And they fear it lets the state pave the way for wealthy developers who are campaign contributors.

"Our concern is that the DEP is going to be issuing waivers as political favors," said Denise Patel, a project coordinator at New Jersey Work Environment Council. "This is another way for Governor Christie to award favors by issuing waivers that are really essential in protecting our air and our water."

Some Democratic legislators are trying to fight the waiver rule with a joint resolution that could eventually invalidate it. They say there are already provisions written into the environmental laws that spell out exceptions — and if a regulation doesn’t have an exception written into it, there’s a reason why.

"The Legislature is very specific," said Sen. Barbara Buono (D-Middlesex), who sponsored the resolution (SCR59). "This is just another back door attempt to sort of circumvent the Legislature. The question has to be asked whether or not this is a violation of separation of powers."

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The resolution passed the Assembly 47-31 in May but hasn’t had a a vote in the full Senate. Buono also collected more than 12,000 signatures on a petition.

Jeff Tittel, director of the state Sierra Club, said his group has asked for an injunction in state appeals court to stop the rule from being implemented. He also plans to legally challenge each waiver that is granted.

"The law doesn’t allow these types of blanket waivers," he said. "It’s a loophole big enough to drive a bulldozer through."

Philip Kirschner, president of the New Jersey Business and Industry Association, said the waiver rule can help when unintended circumstances of any given rule arise. He believes it will be narrowly interpreted, on a case-by-case basis.

"It’s not something that’s going to be widely used. It’s a safety valve," Kirschner said. "This whole thing is overblown."

Christie signed an executive order in January 2009 directing state agencies to implement "common sense" principles.

Ragonese said each application for a waiver must not violate federal laws or present a public health issue. Once it passes that first hurdle, it will move to a team of officials for review. For at least the next six months, Commissioner Bob Martin will have the final say on every application, Ragonese said.

Applications can be accessed on the DEP’s website, and Ragonese said the process will be transparent.

In the state’s first test of the new rule, ARC Machine Co., says that instead of digging up and disposing of its contaminated soil, it wants to put four inches of soil on top of it and plant grass there. Muscalo maintains this would also protect the public from the contaminated soil at a reudced cost to his the company.

"I was very relieved because for my client, this is his only chance," Muscalo said. "If we can’t do it this way, it isn’t going to get done."

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