But they called on federal environmental officials to close a loophole in disposal standards, particularly those regarding polychlorinated biphenyls, or PCBs.

Environmental Commissioner Bradley Campbell said New Jersey supports using dredge spoils from U.S. Gypsum's Rockland County, N.Y., site as capping material at the Bayonne site.

The Scottish-style "links" course designed by Empire Golf USA is being developed at the old landfill at Constable Hook as a brownfields project. The spoils will be blended with concrete to stabilize the PCB contamination, rendering them safe for use as capping material.

The U.S. Army Corps of Engineers, one of the oversight agencies involved, said it is still in negotiations with New Jersey, the state of New York and U.S. Gypsum.

"It's far from a done deal. We're still working toward making a permit decision this week," spokesman Pete Shugert said. "New Jersey was one piece of the puzzle. New York, U.S. Gypsum and federal law are the other pieces we are working on to coalesce into a decision that is in the public interest."

PCBs, once widely used in electrical transformers and capacitors, are known to cause cancer in animals and do not break down easily in the environment. According to a federal registry of toxic substances, PCBs have been found in about one-third of the contaminated sites on the nation's priority list for toxic site cleanups.

United States Gypsum had sought a permit from the Army Corps to dispose of 107,000 tons of dredge spoils six miles off Sandy Hook, a site informally known as the Mud Dump. PCB levels in the dredge materials were 128 parts per billion.

In 1997, environmentalists, lawmakers, port officials and the administration of President Bill Clinton reached an agreement to phase out dumping at the site. Under the deal, the site was closed to material with PCB concentrations exceeding 113 parts per billion.

A federal judge ruled last July that the Army Corps of Engineers and the Environmental Protection Agency had improperly used the tighter standard to deny Gypsum's permit request.

The court said the 113 parts per billion guideline amounted to a new rule and could not be applied to any permits without undergoing a period of public notice and comment. The judge ordered the two agencies to reconsider the company's application.

Campbell said the golf course plan offers a compromise that addresses the state's immediate concerns on ocean dumping. He called on the EPA to settle the broader issue by codifying the 113 parts per billion standard.

Pallone said he has sponsored legislation to that effect, but it's unlikely to pass this session of Congress. He called on EPA Administrator Christie Whitman to support the more stringent standard.