PRIOR PRINTER'S NOS. 691, 1981 PRINTER'S NO. 2073
No. 650 Session of 1993
INTRODUCED BY STEWART, BRIGHTBILL, MUSTO, BELAN, SHAFFER, STOUT,
FISHER, WENGER, RHOADES, PECORA, SALVATORE, HART, LAVALLE,
STINSON AND ROBBINS, MARCH 9, 1993
AS AMENDED ON THIRD CONSIDERATION, APRIL 18, 1994
AN ACT
1 Limiting environmental liability for economic development
2 agencies, financiers and fiduciaries.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Short title.
6 This act shall be known and may be cited as the Economic
7 Development Agency and Lender Environmental Liability Protection
8 Act.
9 Section 2. Declaration of policy.
10 The General Assembly finds and declares as follows:
11 (1) The Commonwealth has provided grant and loan funds
12 to a variety of economic development agencies, all for the
13 purpose of assisting these agencies in their efforts to
14 promote the general welfare of this Commonwealth by
15 encouraging economic development and industrial redevelopment
16 throughout this Commonwealth.
17 (2) Economic development agencies acquire title to
1 industrial property for financing purposes only and lease or
2 sell the same to industrial occupants who have sole
3 possession of the facilities for an amount of rent or
4 installment payments pursuant to an installment sale contract
5 which is determined solely on a basis of meeting the costs of
6 the financing and other costs associated with ownership
7 unrelated to profit.
8 (3) Economic development agencies acquire possession of
9 these industrial sites from time to time when the industrial
10 occupant defaults under its obligations to the agencies under
11 its lease or installment sales agreements.
12 (4) Economic development agencies also acquire
13 industrial property either for the purpose of financing or
14 redevelopment but without a motive for profit or to occupy
15 the property for their own industrial operations.
16 (5) Economic development agencies are reluctant to
17 acquire title to or other interests in property whether for
18 financing or redevelopment purposes or to secure repayment of
19 obligations unless the economic development agencies are
20 protected from liability for environmental contamination on
21 those sites they seek to assist to develop.
22 (6) The taking of legal title and any foreclosure or
23 retaking of possession of property by an industrial
24 development agency, area loan organization or industrial and
25 commercial development authority is pursuant to the following
26 acts:
27 (i) The act of May 17, 1956 (1955 P.L.1609, No.537),
28 known as the Pennsylvania Industrial Development
29 Authority Act, which expressly requires that the
30 Pennsylvania Industrial Development Authority loan money
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1 to industrial development agencies secured by not less
2 than a second mortgage lien.
3 (ii) The act of August 23, 1967 (P.L.251, No.102),
4 known as the Industrial and Commercial Development
5 Authority Law, which provides for issuance of debt by
6 industrial and commercial development authorities and
7 authorizes these authorities to take title to real
8 property as security for the indebtedness.
9 (iii) The act of July 2, 1984 (P.L.545, No.109),
10 known as the Capital Loan Fund Act, which requires that
11 its loans be made to area loan organizations with
12 adequate collateral.
13 (7) The maximum level of economic development and
14 business opportunity and employment and the elimination or
15 prevention of abandoned industrial and commercial property
16 AND FEDERAL GOVERNMENT OR MILITARY LANDS WHICH can best be <--
17 provided by the promotion, attraction, stimulation,
18 rehabilitation and revitalization of all types of industry,
19 commerce, manufacturing and business development within this
20 Commonwealth.
21 (8) To continue and further the stimulation of business
22 opportunities and economic development within this
23 Commonwealth and thereby cause the reuse and rehabilitation
24 of industrial and commercial property, it is necessary to
25 ensure various means of financing to promote economic growth
26 and the availability of fiduciary services to persons within
27 this Commonwealth.
28 (9) Lenders are reluctant to provide funding for
29 business opportunities and economic development, and
30 fiduciaries are reluctant to provide services to persons with
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1 environmental problems, because of catastrophic risks of
2 environmental liability and remediation costs under
3 environmental laws relating to releases and contamination
4 which were not caused by lenders and fiduciaries.
5 (10) When borrowers default on loans, lenders are
6 reluctant to foreclose upon commercial property with
7 environmental problems because lenders may be forced to
8 assume costly environmental liabilities; thus, commercial
9 property is being abandoned in this Commonwealth and new
10 businesses are unable to obtain financing to purchase such
11 properties.
12 (11) Family businesses are unable to establish trusts to
13 convey their business interests to the next generation and
14 other businesses are unable to receive retirement, investment
15 and other trust services from fiduciaries, when fiduciaries,
16 in their personal or individual capacities, may be held
17 liable for environmental contamination caused by other
18 persons merely by virtue of owning property in their trustee
19 capacities and providing fiduciary services.
20 (12) In order to continue to stimulate growth and
21 continue the use or reuse of industrial and commercial
22 property, it is necessary to provide protection, to lenders,
23 fiduciaries and economic development agencies, from
24 environmental liability and remediation costs under
25 environmental laws for releases and contamination caused by
26 others.
27 (13) Environmental liability for lenders, fiduciaries
28 and economic development agencies shall be limited in scope
29 as specifically provided in this act, and this act shall be
30 interpreted as broadly as possible in order to preempt any
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1 laws, regulations or ordinances imposing environmental
2 liability on such persons in order to promote economic
3 development.
4 Section 3. Definitions.
5 The following words and phrases when used in this act shall
6 have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 "Board." The Environmental Hearing Board of the
9 Commonwealth.
10 "Borrower." A person whose property is encumbered by a <--
11 security interest. The term includes a debtor, a lessor or an
12 obligor.
13 "BORROWER." A PERSON WHO HAS RECEIVED AN EXTENSION OF <--
14 CREDIT. THE TERM INCLUDES, BUT IS NOT LIMITED TO, A DEBTOR, A
15 LESSOR, A LESSEE OR AN OBLIGOR.
16 "Conservancy." A charitable corporation, charitable
17 association or charitable trust registered with the Bureau of
18 Charitable Organizations and exempt from taxation pursuant to
19 section 501(c)(3) of the Internal Revenue Code of 1986 (Public
20 Law 99-514, 26 U.S.C. § 501(c)(3)) or other Federal or
21 Commonwealth statutes or regulations, the purpose or powers of
22 which include retaining or protecting natural, scenic,
23 agricultural or open-space values of real property; assuring the
24 availability of real property for agricultural, forest,
25 recreational or open-space use; protecting natural resources and
26 wildlife; maintaining or enhancing land, air or water quality;
27 or preserving the historical, architectural, archaeological or
28 cultural aspects of real property.
29 "Department." The Department of Environmental Resources of
30 the Commonwealth.
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1 "Economic development agencies." The term includes:
2 (1) Any redevelopment authority created under the act of
3 May 24, 1945 (P.L.991, No.385), known as the Urban
4 Redevelopment Law.
5 (2) Any industrial development agency as that term is
6 defined in the act of May 17, 1956 (1955 P.L.1609, No.537),
7 known as the Pennsylvania Industrial Development Authority
8 Act.
9 (3) Any industrial and commercial development authority
10 created under the act of August 23, 1967 (P.L.251, No.102),
11 known as the Industrial and Commercial Development Authority
12 Law.
13 (4) Any area loan organization as that term is defined
14 in the act of July 2, 1984 (P.L.545, No.109), known as the
15 Capital Loan Fund Act.
16 (5) Any other Commonwealth or municipal authority which
17 acquires title or an interest in property.
18 (6) Municipalities or municipal industrial development
19 or community development departments organized by ordinance
20 under a home rule charter which buy and sell land for
21 community development purposes.
22 (7) Tourist promotion agencies or their local community-
23 based nonprofit sponsor which engage in the acquisition of
24 former industrial sites as part of an "Industrial Heritage"
25 or similar program.
26 (8) Conservancies engaged in the renewal or reclamation
27 of an industrial site.
28 "Emergency event." A sudden occurrence or condition of such <--
29 severity or magnitude that it threatens immediate and
30 irreparable harm to the environment or public health, and an
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1 immediate emergency response measure is necessary for its
2 stabilization or control.
3 "Emergency response measure." The notification of the
4 applicable county emergency management agency or the
5 Pennsylvania Emergency Management Agency and the Department of
6 Environmental Resources and such minimum steps as may be
7 reasonably necessary according to the equities of the situation
8 to attempt to stabilize and control the emergency event and to
9 mitigate further damages.
10 "Environmental acts." Collectively and separately, the act
11 of June 22, 1937 (P.L.1987, No.394), known as The Clean Streams
12 Law, the act of January 8, 1960 (1959 P.L.2119, No.787), known
13 as the Air Pollution Control Act, the act of July 7, 1980
14 (P.L.380, No.97), known as the Solid Waste Management Act, the
15 act of October 5, 1984 (P.L.734, No.159), known as the Worker
16 and Community Right-to-Know Act, the act of July 13, 1988
17 (P.L.525, No.93), referred to as the Infectious and
18 Chemotherapeutic Waste Law, the act of October 18, 1988
19 (P.L.756, No.108), known as the Hazardous Sites Cleanup Act, the
20 act of July 6, 1989 (P.L.169, No.32), known as the Storage Tank
21 and Spill Prevention Act, the act of December 7, 1990 (P.L.639,
22 No.165), known as the Hazardous Material Emergency Planning and
23 Response Act, and the act of June 11, 1992 (P.L.303, No.52),
24 known as the Oil Spill Responder Liability Act, and all such
25 acts as they may be amended from time to time, and any Federal,
26 State or local law, statute, regulation, rule, ordinance, court
27 or administrative order or decree, interpretation or guidance,
28 now or hereafter in existence pertaining to employees,
29 occupational health and safety, public health or safety, natural
30 resources or the environment.
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1 "Environmental due diligence." Investigative techniques,
2 including, but not limited to, visual property inspections,
3 electronic environmental data base searches, review of ownership
4 and use history of the property, environmental questionnaires,
5 transaction screens, environmental assessments or audits.
6 "Fiduciary." Any person which is considered a fiduciary
7 under section 3(21) of the Employee Retirement Income Security
8 Act of 1974 (Public Law 93-406, 88 Stat. 829) or who acts as
9 trustee, executor, administrator, custodian, guardian of
10 estates, conservator, committee of estates of persons who are
11 disabled, personal representative, receiver, agent, nominee,
12 registrar of stocks and bonds, assignee or in any other capacity
13 for the benefit of another person.
14 "Foreclosure." The date upon which title vests in property
15 through realizing upon a security interest, including, but not
16 limited to, any ownership of property recognized under
17 applicable law as vesting the holder of the security interest
18 with some indicia of title, legal or equitable title obtained at
19 or in lieu of foreclosure, sheriff sales, bankruptcy
20 distributions and their equivalents.
21 "Fund." Collectively and separately, any special fund of
22 Commonwealth moneys administered by the Commonwealth or the
23 Department of Environmental Resources, including, but not
24 limited to, the Hazardous Sites Cleanup Fund and the Underground
25 Storage Tank Indemnification Fund, as well as any other fund of
26 Commonwealth moneys now or hereafter in existence created for
27 the funding or reimbursement of costs and damages such as
28 response costs, emergency response measures and their equivalent
29 relating to natural resources or the environment.
30 "Guarantor." The term includes guarantors and sureties of
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1 security interests, securities and other obligations, issuers of
2 letters of credit and other credit enhancements, title insurers
3 and entities which directly or indirectly acquire indicia of
4 ownership in the course of protecting a security interest or
5 acting as such guarantors, sureties, issuers of letters of
6 credit or other credit enhancements or title insurers. The term
7 includes guaranties, surety bonds, title insurance policies,
8 letters of credit and other credit enhancements, and other
9 agreements with a guarantor relating to the obligations
10 described in this definition. The term directly or indirectly
11 includes any interest in property, security interest, indicia of
12 ownership title or right to title held or acquired by a
13 fiduciary or similar entity for the benefit of a holder of a
14 security interest.
15 "Holder of a security interest." A person who holds indicia <--
16 of ownership in property primarily to protect a security
17 interest. The term includes the following:
18 (1) The initial holder and any subsequent holder of the
19 security interest on the secondary market.
20 (2) Guarantor, lease financier or any successor where
21 the lessor does not initially select or ordinarily control
22 the daily operation or maintenance of the property.
23 (3) Any person who holds indicia of ownership primarily
24 to protect a security interest.
25 (4) A receiver or other person who acts on behalf or for
26 the benefit of a holder of a security interest.
27 "Indicia of ownership." Any legal or equitable interest in
28 property acquired directly or indirectly:
29 (1) for the purpose of securing payment of a loan or <--
30 indebtedness, a right of reimbursement or subrogation under a
19930S0650B2073 - 9 -
1 guaranty or the performance of another obligation;
2 (2) evidencing ownership under a lease financing
3 transaction where the lessor does not initially select or
4 ordinarily control the daily operation or maintenance of the
5 property; or
6 (3) in the course of creating, protecting or enforcing a
7 security interest or right of reimbursement of subrogation
8 under a guaranty.
9 The term includes evidence of interest in mortgages, deeds of
10 trust, liens, surety bonds, guaranties, lease financing
11 transactions where the lessor does not initially select or
12 ordinarily control the daily operation or maintenance of the
13 property, other forms of encumbrances against property
14 recognized under applicable law as vesting the holder of the
15 security interest with some indicia of title.
16 "Industrial activity." Commercial, manufacturing, mining or
17 any other activity done to further either the development,
18 manufacturing or distribution of goods and services, including,
19 but not limited to, research and development, warehousing,
20 shipping, transport, remanufacturing, repair and maintenance of
21 commercial machinery and equipment.
22 "Industrial site." A site which now has or once had an
23 industrial activity on it.
24 "Lender." Any person regulated or supervised by any Federal
25 or State regulatory agency and any of its affiliates or
26 subsidiaries, successors or assigns, including its officers,
27 directors, employees, representatives or agents, and any Federal
28 or State banking or lending agency or its successors, including,
29 but not limited to, Resolution Trust Corporation, Federal
30 Deposit Insurance Corporation, Federal Reserve Bank, Board of
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1 Governors of the Federal Reserve System, Federal Home Loan Bank,
2 National Credit Union Administrator Board, Office of the
3 Comptroller of the Currency, Office of Thrift Supervision, Farm
4 Credit Administration and Small Business Administration or
5 similarly chartered Federal instrumentality. The term also
6 includes the initial lender and any subsequent holder of a
7 security interest or note, guarantor, lease financier or any
8 successor or a receiver or other person who acts on behalf or
9 for the benefit of a holder of a security interest. The term
10 includes an economic development agency.
11 "Occupant." A party which occupies or has the right to
12 occupy property owned by an economic development agency by any
13 instrument, including, but not limited to, a lease, mortgage,
14 installment sale contract, disposition agreement or trust
15 agreement.
16 "Person." An individual, partnership, corporation, business
17 trust, joint-stock fund, estate trust, banking association,
18 governmental, administrative or regulatory agency, institution
19 or any other type of legal entity whatsoever.
20 "Property." All types of real and personal and tangible and
21 intangible property.
22 "Redevelopment." Undertakings and activities made under the
23 act of May 24, 1945 (P.L.991, No.385), known as the Urban
24 Redevelopment Law, including, but not limited to, planning,
25 acquisition, site preparation, demolition, rehabilitation,
26 renovation, conservation, reuse, renewal, improvement,
27 clearance, sale and lease of real property and improvements
28 thereon.
29 "Regulated substance." Any element, compound or material
30 which is subject to regulation under the environmental acts or
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1 any element, compound or material defined as a HAZARDOUS, TOXIC, <--
2 REGULATED INFECTIOUS CHEMOTHERAPEUTIC SUBSTANCE OR CHEMICAL
3 contaminant, pollution, waste, or WASTE, ANY TYPE OF POLLUTION <--
4 OR CONDITION OR ANY equivalent under the environmental acts.
5 "Release." Any spill, rupture, emission, discharge, other
6 action, occurrence, CONDITION or any other term defined as a <--
7 "release" or other operative word OTHER THREAT OF RELEASE OR <--
8 OPERATIVE WORD OR EVENT WHICH WOULD TRIGGER COMPLIANCE
9 REQUIREMENTS OR LIABILITY under the environmental acts.
10 "Reportable event." Any release, threat of release or action <--
11 which must be reported to the Department of Environmental
12 Resources or any other governmental agency, including, but not
13 limited to, notices of amounts equal to or greater than
14 reportable released quantities of regulated substances, any
15 amounts equal to or greater than a discharge or any permit
16 violations or other violations which may require reports or
17 notifications to government agencies under the environmental
18 acts.
19 "Response action." An action, including, but not limited to,
20 a response or interim response, remedial response or remedy or
21 corrective action, closure, or any other action under the
22 environmental acts IN RESPONSE TO A RELEASE, such as testing, <--
23 inspections, sampling, installations, corrective action,
24 removals, closure, response costs, assessments OR ANY TYPES OF <--
25 claims, damages, actions, fines and penalties.
26 "Security interest." An interest in property created or
27 established for the purpose of securing a loan, right of
28 reimbursement or subrogation under a guaranty or other
29 obligation or constituting a lease financing transaction. The
30 term includes security interests created under 13 Pa.C.S.
19930S0650B2073 - 12 -
1 (relating to commercial code), mortgages, deeds of trust, liens,
2 lease financing transactions in which the lessor does not
3 initially select or ordinarily control the daily operation or
4 maintenance of the property, trust receipt transactions and
5 their equivalents. Security interest may also arise from
6 transactions such as sales and leasebacks, conditional sales,
7 installment sales, certain assignments, factoring agreements,
8 accounts receivable, financing arrangements and consignments, if
9 the transaction creates or establishes an interest in property
10 for the purpose of securing a loan, right of reimbursement or
11 subrogation under a guaranty or other obligation. The term also
12 includes a confession of judgment or money judgment whereby a
13 lender commences an execution on such judgments with a writ of
14 execution and thereby causes property to be levied and attached.
15 Section 4. Limitation of economic development agency
16 environmental liability.
17 An economic development agency that holds an indicia of
18 ownership in property as a security interest for the purpose of
19 developing or redeveloping the property or to finance an
20 economic development or redevelopment activity shall not be
21 liable under the environmental acts to the department or to any
22 other person in accordance with the following:
23 (1) An economic development agency shall not be liable
24 in an action by the department, as a responsible person,
25 owner, operator or occupier, for remediating a release if the
26 economic development agency demonstrates any of the
27 following:
28 (i) The economic development agency exercised
29 reasonable maintenance of the property when it had
30 possession of the property.
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1 (ii) The economic development agency, including its
2 employees and agents, did not cause or exacerbate a
3 release of regulated substances on or from the property.
4 (iii) The property is an industrial site.
5 (2) An economic development agency which forecloses on
6 or assumes possession of a property shall remain within the
7 exemption from liability under this section.
8 (3) An economic development agency that conducts a
9 remedial action in accordance with a written agreement with
10 the department shall not be liable, as a responsible party,
11 owner, operator or occupier, in any action by the department
12 for a release or potential release of any regulated
13 substance.
14 (4) There is cooperation with governmental agencies
15 performing a remedial action, as follows:
16 (i) An economic development agency and any of its
17 successors and assigns may take no action that would
18 disturb or be inconsistent with remedial response that is
19 proposed, approved or implemented by the Federal
20 Environmental Protection Agency.
21 (ii) An economic development agency and any of its
22 successors and assigns shall permit access to Federal and
23 Commonwealth agencies and other parties acting under the
24 direction of these agencies to evaluate, perform or
25 maintain a remedial action.
26 (iii) An economic development agency or any of its
27 successors and assigns shall perform, operate and
28 maintain remedial actions pursuant to State laws as
29 directed by the department.
30 Section 5. Limitation of lender environmental liability.
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1 (a) Scope of lender liability.--A lender who provides <--
2 financial services or holds indicia of ownership in property as
3 a security interest shall not be liable under the environmental
4 acts to the department or to any other person by virtue of fact
5 that the lender provides financial services or holds indicia of
6 ownership primarily to protect its security interest in the
7 property, unless:
8 (A) SCOPE OF LENDER LIABILITY.--A LENDER WHO ENGAGES IN <--
9 ACTIVITIES INVOLVED IN THE ROUTINE PRACTICES OF COMMERCIAL
10 LENDING, INCLUDING, BUT NOT LIMITED TO, THE PROVIDING OF
11 FINANCIAL SERVICES, HOLDING OF SECURITY INTERESTS, WORKOUT
12 PRACTICES, FORECLOSURE OR THE RECOVERY OF FUNDS FROM THE SALE OF
13 PROPERTY SHALL NOT BE LIABLE UNDER THE ENVIRONMENTAL ACTS OR
14 COMMON LAW EQUIVALENTS TO THE DEPARTMENT OF ENVIRONMENTAL
15 RESOURCES OR TO ANY OTHER PERSON BY VIRTUE OF THE FACT THAT THE
16 LENDER ENGAGES IN SUCH COMMERCIAL LENDING PRACTICE UNLESS:
17 (1) the lender, its employees or agents cause or AGENTS <--
18 DIRECTLY CAUSE AN IMMEDIATE RELEASE OR DIRECTLY exacerbate a
19 release of regulated substances on or from the property; or
20 (2) the lender, its employees or agents knowingly and
21 willfully compelled the borrower to:
22 (i) do an action which caused an immediate release
23 of regulated substances; or
24 (ii) violate an environmental act.
25 (b) Limitation of lender liability.--Liability pursuant to
26 this act shall be limited to the cost for a response action
27 which may be directly attributable to the lender's activities as
28 specified in subsection (a). LIABILITY SHALL ARISE ONLY IF THE <--
29 LENDER'S ACTIONS WERE THE PROXIMATE AND EFFICIENT CAUSE OF THE
30 RELEASE OR VIOLATION. OWNERSHIP OR CONTROL OF THE PROPERTY AFTER
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1 FORECLOSURE SHALL NOT BY ITSELF TRIGGER LIABILITY. No lender
2 shall be liable for any damages, including any response action, <--
3 if such damages arise RESPONSE ACTION ARISES solely from a <--
4 release of regulated substances which occurred prior to or
5 commences before and continues after foreclosure, provided,
6 however, that the lender shall be responsible for that portion
7 of damages which are THE RESPONSE ACTION WHICH IS directly <--
8 attributed to the lender's exacerbation of a release. A release
9 of regulated substances discovered in the course of conducting
10 environmental due diligence shall be presumed to be a prior or
11 continuing release on the property.
12 (c) Emergency event after foreclosure.--If an emergency <--
13 event occurs after foreclosure and, if upon the basis of
14 information available to the lender at the time of that
15 emergency event, there is a clear and convincing basis to
16 believe that prompt action is necessary, then the lender shall
17 undertake an emergency response measure without the loss of the
18 protection afforded by this act. A lender which undertakes an
19 emergency response measure must use reasonable care and endeavor
20 to complete the emergency response measure so as to stabilize
21 the emergency event. No lender shall be liable for any damages
22 resulting from an emergency event or emergency response measure
23 or any other damages, including, but not limited to, costs for
24 response actions at the property, adjoining areas and locations
25 to which hazardous substances are transported for handling,
26 treatment, storage and disposal, except for damages due to the
27 lender's acts or omissions which constitute gross negligence or
28 willful misconduct. Liability pursuant to this subsection shall
29 be limited to the lesser amount of:
30 (1) the remaining value of the affected property;
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1 (2) the principal amount of the loan secured by the
2 affected property; or
3 (3) the extent of the damages that result due to the
4 lender's acts or omissions which constitute gross negligence
5 or willful misconduct in undertaking the emergency response
6 measure.
7 It shall be a rebuttable presumption of law that a lender who
8 has taken steps to conduct an emergency response measure has
9 acted properly and is entitled to protection from liability and
10 reimbursement as provided in this act; and provided further that
11 an occurrence or condition constituting a reportable event under
12 the environmental acts alone shall not be considered by reason
13 of such status as a reportable event to be an emergency event.
14 (d) Notification requirements.--Notification for an
15 emergency response measure under this section shall include the
16 following to the extent known by the lender at the time of such
17 notification:
18 (1) The name and telephone number of the person making
19 the notification.
20 (2) The name and telephone number of the person employed
21 by the lender who has the authority to take or coordinate the
22 emergency response measure.
23 (3) The time, location and duration of the release.
24 (4) The chemical name or identity of any substance
25 involved in the release.
26 (5) The medium or media into which the release occurred.
27 (6) An estimate of the quantity of the substance that
28 was released into the environment.
29 (7) Such steps taken to attempt to stabilize and control
30 the emergency event and mitigate damages.
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1 (8) Any additional information that such person deems
2 appropriate under the circumstances.
3 (e) Emergency response measure costs.--A lender who
4 undertakes an emergency response measure may be reimbursed for
5 its costs, including, but not limited to, legal fees, from the
6 fund by filing an action with the board within 60 days after
7 completion of the emergency response measure in accordance with
8 section 505(f) of the act of October 18, 1988 (P.L.756, No.108),
9 known as the Hazardous Sites Cleanup Act. To recover costs, the
10 action must include a written summary of the acts taken for the
11 emergency response measure and documentation of the costs.
12 Notwithstanding the foregoing, a lender who undertakes an
13 emergency response measure may also recover its costs and
14 damages, including legal fees, or seek contribution from a
15 responsible person in a legal action brought before a court of
16 competent jurisdiction. In the event that a lender recovers
17 duplicative costs and damages in a legal action against a
18 responsible person after being reimbursed for its costs by the
19 board, the lender shall promptly return to the board any
20 duplicative amounts received from the fund.
21 Section 6. Limitation of fiduciary environmental liability.
22 (a) Scope of fiduciary liability.--Any person who acts or
23 has acted as a fiduciary to another person shall not be liable
24 in its personal or individual capacity under the environmental
25 acts OR COMMON LAW EQUIVALENTS to the department or to any other <--
26 person by virtue of the fact that the fiduciary provides or
27 provided such services unless:
28 (1) during the time when the fiduciary services were
29 actively provided, an event occurred which constituted a
30 release of regulated substances according to the
19930S0650B2073 - 18 -
1 environmental acts at the time of such event;
2 (2) the fiduciary had the express power and authority to
3 control property which was the cause of or the site of such
4 release as part of actively providing services; and
5 (3) the release was caused by an act or omission which
6 constituted gross negligence or willful misconduct of the
7 fiduciary according to the law or standard practices at the
8 time of the release.
9 (b) Limitation of fiduciary liability.--Liability under this
10 act shall be limited to only the cost for a response action
11 which is directly attributable to the fiduciary's activities as
12 specified in this section. UNDER SUBSECTION (A)(2), CONTROL OF <--
13 PROPERTY SHALL BE DEEMED TO BE IN THE LESSEE AND NOT THE LESSOR
14 FOR LEASED PROPERTY. No fiduciary shall be liable for any
15 damages, including any response action, if such damages solely <--
16 arise RESPONSE ACTION, IF SUCH RESPONSE ACTION ARISES from a <--
17 release of regulated substances which occurred prior to, or
18 commences before and continues after the fiduciary takes action
19 as specified in subsection (a). Notwithstanding the foregoing, a
20 fiduciary shall be responsible for that portion of damages which <--
21 are A RESPONSE ACTION WHICH IS directly attributable to <--
22 exacerbating a release. A release of regulated substances
23 discovered in the course of conducting an environmental due
24 diligence shall be presumed to be a prior and continuing release
25 on the property.
26 (c) Estate claims.--Nothing in this section shall prevent
27 claims against the fiduciary in its representative capacity.
28 Section 7. Defenses to liability.
29 A lender or fiduciary can avoid liability under this act by A <--
30 LENDER, FIDUCIARY OR ECONOMIC DEVELOPMENT AGENCY CAN AVOID
19930S0650B2073 - 19 -
1 LIABILITY UNDER THE ENVIRONMENTAL ACTS OR THE COMMON-LAW
2 EQUIVALENTS BY showing evidence that a release or threatened
3 release of regulated substances for which the lender or
4 fiduciary otherwise be responsible IS RESPONSIBLE UNDER SECTIONS <--
5 4, 5 AND 6 was caused by any of the following:
6 (1) An act of God.
7 (2) An intervening act of a public agency.
8 (3) Migration from property owned by a third party.
9 (4) Actions taken or omitted in the course of rendering
10 care, assistance or advice in accordance with the
11 environmental acts or at the direction of the department.
12 (5) An act of a third party who was not an agent or
13 employee of the lender or fiduciary. <--
14 (6) If the alleged liability for a lender arises after
15 foreclosure and the lender exercised due care with respect to
16 the regulated substance and took precautions against
17 foreseeable actions of third parties and the consequences
18 arising therefrom. LENDER, FIDUCIARY OR ECONOMIC DEVELOPMENT <--
19 AGENCY.
20 (6) IF THE ALLEGED LIABILITY FOR A LENDER OR ECONOMIC
21 DEVELOPMENT AGENCY ARISES AFTER FORECLOSURE, AND THE LENDER
22 OR ECONOMIC DEVELOPMENT AGENCY EXERCISED DUE CARE WITH
23 RESPECT TO THE LENDER'S OR ECONOMIC DEVELOPMENT AGENCY'S
24 KNOWLEDGE ABOUT THE REGULATED SUBSTANCES, AND TOOK REASONABLE
25 PRECAUTIONS BASED UPON SUCH KNOWLEDGE AGAINST FORESEEABLE
26 ACTIONS OF THIRD PARTIES AND THE CONSEQUENCES ARISING
27 THEREFROM. A LENDER, FIDUCIARY OR ECONOMIC DEVELOPMENT AGENCY
28 CAN AVOID LIABILITY BY PROVING ANY OTHER DEFENSE WHICH MAY BE
29 AVAILABLE TO IT UNDER THE ENVIRONMENTAL ACTS OR COMMON LAW.
30 Section 8. Savings clause.
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1 Nothing in this act shall affect the rights, immunities or
2 other defenses that are available under other applicable law to
3 a lender or fiduciary LENDER, FIDUCIARY OR ECONOMIC DEVELOPMENT <--
4 AGENCY, including, but not limited to, rights of contribution
5 and indemnity. Nothing in this act shall be construed to create
6 any NEW, DIFFERENT OR ADDITIONAL liability for or create a <--
7 private right of action against any lender or fiduciary LENDER, <--
8 FIDUCIARY OR ECONOMIC DEVELOPMENT AGENCY.
9 Section 9. Apportionment of liability.
10 Notwithstanding anything to the contrary, if two or more
11 persons acting independently cause distinct harm or a single
12 harm for which there is a reasonable basis for division
13 according to the contribution of each, a lender or fiduciary <--
14 LENDER, FIDUCIARY OR ECONOMIC DEVELOPMENT AGENCY shall be <--
15 subject to liability only for the portion of the total liability
16 that is directly attributable to the lender or fiduciary.
17 Section 10. Construction of act.
18 The terms and conditions of this act are to be liberally
19 construed so as to best achieve and effectuate the goals and
20 purposes of this act. LIABILITY SHALL BE BASED ON PROXIMATE AND <--
21 EFFICIENT CAUSATION. THIS ACT PREEMPTS AND ELIMINATES ALL
22 PRESENT LIABILITY STANDARDS, INCLUDING, BUT NOT LIMITED TO, THE
23 CONCEPT OF A PERSON WHO, WITHOUT PARTICIPATION IN THE MANAGEMENT
24 OF PROPERTY, HOLDS INDICIA OF OWNERSHIP PRIMARILY TO PROTECT A
25 SECURITY INTEREST. UNDER ALL PROVISIONS HEREIN, THE BURDEN OF
26 PROOF SHALL BE UPON THE PERSON SEEKING TO HAVE A LENDER,
27 FIDUCIARY OR ECONOMIC DEVELOPMENT AGENCY HELD LIABLE FOR A
28 RESPONSE ACTION. The burden of proof shall be upon the person
29 seeking to have a lender or a fiduciary held liable for a
30 response action or damages.
19930S0650B2073 - 21 -
1 Section 11. Severability.
2 The provisions of this act are severable. If any provision of
3 this act or its application to any person or circumstance is
4 held invalid, the invalidity shall not affect other provisions
5 or applications of this act which can be given effect without
6 the invalid provision or application.
7 Section 12. Repeals.
8 To the extent that any environmental acts are inconsistent <--
9 with this act, such laws are deemed repealed so that the
10 provisions of this act may be enforced. No environmental law
11 enacted after this act shall be applied retroactively to impose
12 liability upon lenders and fiduciaries.
13 TO THE EXTENT THAT ANY ENVIRONMENTAL ACTS ARE INCONSISTENT <--
14 WITH THIS ACT, OR POSE LIABILITY AS ADDRESSED IN THIS ACT, SUCH
15 PROVISION OF THOSE LAWS ARE PREEMPTED AND DEEMED REPEALED SO
16 THAT THE PROVISIONS OF THIS ACT MAY BE ENFORCED. NO
17 ENVIRONMENTAL LAW ENACTED AFTER THIS ACT SHALL BE APPLIED
18 RETROACTIVELY TO IMPOSE LIABILITY UPON LENDERS, FIDUCIARIES OR
19 ECONOMIC DEVELOPMENT AGENCIES, UNLESS THERE ARE EXPRESS
20 REPEALERS WHICH EXPLAIN THE EXTENT OF THE REPEAL.
21 Section 13. Applicability.
22 The provisions of this act shall apply to the following:
23 (1) All indicia of ownership, including those presently
24 or subsequently acquired, or those acquired prior to the date
25 of enactment that are held primarily to protect a security
26 interest in the property.
27 (2) Each fiduciary with respect to any services provided
28 by the fiduciary, including those presently or subsequently
29 provided, and those rendered prior to the date of enactment.
30 (3) All administrative actions, actions, suits or claims
19930S0650B2073 - 22 -
1 against lenders or fiduciaries LENDERS, FIDUCIARIES OR <--
2 ECONOMIC DEVELOPMENT AGENCIES not yet finally resolved by the
3 department or any court or administrative hearing board
4 having any action, suit or claim pending before it or an
5 appeal from a lower court, REGARDLESS OF WHEN THE RELEASE OR <--
6 INTEREST IN THE SUBJECT PROPERTY OCCURRED.
7 Section 14. Effective date.
8 This act shall take effect immediately UPON THE EFFECTIVE <--
9 DATE OF THE ACT OF , 1994 (P.L. , NO. ) KNOWN
10 AS THE LAND RECYCLING AND ENVIRONMENTAL REMEDIATION STANDARDS
11 ACT.
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