ASSEMBLY, No. 2250

 

STATE OF NEW JERSEY

 

INTRODUCED JULY 18, 1996

 

 

By Assemblyman BAGGER

 

 

An Act concerning hazardous substances, amending P.L.1976, c.141 and P.L.1993, c.139.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. Section 8 of P.L.1976, c.141 (C.58:10-23.11g) is amended to read as follows:

    8. a. The fund shall be strictly liable, without regard to fault, for all cleanup and removal costs and for all direct and indirect damages no matter by whom sustained, including but not limited to:

    (1) The cost of restoring, repairing, or replacing any real or personal property damaged or destroyed by a discharge, any income lost from the time such property is damaged to the time such property is restored, repaired or replaced, and any reduction in value of such property caused by such discharge by comparison with its value prior thereto;

    (2) The cost of restoration and replacement, where possible, of any natural resource damaged or destroyed by a discharge;

    (3) Loss of income or impairment of earning capacity due to damage to real or personal property, including natural resources destroyed or damaged by a discharge; provided that such loss or impairment exceeds 10% of the amount which claimant derives, based upon income or business records, exclusive of other sources of income, from activities related to the particular real or personal property or natural resources damaged or destroyed by such discharge during the week, month or year for which the claim is filed;

    (4) Loss of tax revenue by the State or local governments for a period of one year due to damage to real or personal property proximately resulting from a discharge;

    (5) Interest on loans obtained or other obligations incurred by a claimant for the purpose of ameliorating the adverse effects of a discharge pending the payment of a claim in full as provided by this act.

    b. The damages which may be recovered by the fund, without regard to fault, subject to the defenses enumerated in subsection d. of this section against the owner or operator of a major facility or vessel, shall not exceed $50,000,000.00 for each major facility or $150.00 per gross ton for each vessel, except that such maximum limitation shall not apply and the owner or operator shall be liable, jointly and severally, for the full amount of such damages if it can be shown that such discharge was the result of (1) gross negligence or willful misconduct, within the knowledge and privity of the owner, operator or person in charge, or (2) a gross or willful violation of applicable safety, construction or operating standards or regulations. Damages which may be recovered from, or by, any other person shall be limited to those authorized by common or statutory law.

    c. (1) Any person who has discharged a hazardous substance, or is in any way responsible for any hazardous substance, shall be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs no matter by whom incurred. Such person shall also be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs incurred by the department or a local unit pursuant to subsection b. of section 7 of P.L.1976, c.141 (C.58:10-23.11f).

    (2) In addition to the persons liable pursuant to paragraph (1) of this subsection, in the case of a discharge of a hazardous substance from a vessel into the waters of the State, the owner or operator of a refinery, storage, transfer, or pipeline facility to which the vessel was en route to deliver the hazardous substance who, by contract, agreement, or otherwise, was scheduled to assume ownership of the discharged hazardous substance, and any other person who was so scheduled to assume ownership of the discharged hazardous substance, shall be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs if the owner or operator of the vessel did not have the evidence of financial responsibility required pursuant to section 2 of P.L.1991, c.58 (C.58:10-23.11g2).

    Where a person is liable for cleanup and removal costs as provided in this paragraph, any expenditures made by the administrator for that cleanup and removal shall constitute a debt of that person to the fund. The debt shall constitute a lien on all property owned by that person when a notice of lien identifying the nature of the discharge and the amount of the cleanup, removal and related costs expended from the fund is duly filed with the clerk of the Superior Court. The clerk shall promptly enter upon the civil judgment or order docket the name and address of the liable person and the amount of the lien as set forth in the notice of lien. Upon entry by the clerk, the lien, to the amount committed by the administrator for cleanup and removal, shall attach to the revenues and all real and personal property of the liable person, whether or not that person is insolvent.

    For the purpose of determining priority of this lien over all other claims or liens which are or have been filed against the property of an owner or operator of a refinery, storage, transfer, or pipeline facility, the lien on the facility to which the discharged hazardous substance was en route shall have priority over all other claims or liens which are or have been filed against the property. The notice of lien filed pursuant to this paragraph which affects any property of a person liable pursuant to this paragraph other than the property of an owner or operator of a refinery, storage, transfer, or pipeline facility to which the discharged hazardous substance was en route, shall have priority from the day of the filing of the notice of the lien over all claims and liens filed against the property, but shall not affect any valid lien, right, or interest in the property filed in accordance with established procedure prior to the filing of a notice of lien pursuant to this paragraph.

    To the extent that a person liable pursuant to this paragraph is not otherwise liable pursuant to paragraph (1) of this subsection, or under any other provision of law or under common law, that person may bring an action for indemnification for costs paid pursuant to this paragraph against any other person who is strictly liable pursuant to paragraph (1) of this subsection.

    Nothing in this paragraph shall be construed to extend or negate the right of any person to bring an action for contribution that may exist under P.L.1976, c.141, or any other act or under common law.

    d. (1) In addition to those defenses provided in this subsection, an act or omission caused solely by war, sabotage, or God, or a combination thereof, shall be the only defenses which may be raised by any owner or operator of a major facility or vessel responsible for a discharge in any action arising under the provisions of this act.

    (2) A person, including an owner or operator of a major facility, who owns real property acquired after the effective date of P.L.1993, c.139 (C.13:1K-9.6 et al.), on which there has been a discharge, shall be considered a person in any way responsible for the discharged hazardous substance pursuant to subsection c. of this section, unless that person can establish by a preponderance of the evidence that all of the following apply:

    (a) the person acquired the real property after the discharge of that hazardous substance at the real property;

    (b) (i) at the time the person acquired the real property, the person did not know and had no reason to know that any hazardous substance had been discharged at the real property, or (ii) the person acquired the real property by devise or succession, except that any other funds or property received by that person from the deceased real property owner who discharged a hazardous substance or was in any way responsible for a hazardous substance, shall be made available to satisfy the requirements of P.L.1976, c.141;

    (c) the person did not discharge the hazardous substance and is not in any way responsible for the hazardous substance; and

    (d) the person gave notice of the discharge to the department upon actual discovery of that discharge.

    To establish that a person had no reason to know that any hazardous substance had been discharged for the purposes of this paragraph (2), the person must have undertaken, at the time of acquisition, all appropriate inquiry into the previous ownership and uses of the property. For the purposes of this paragraph (2), all appropriate inquiry shall mean the performance of a preliminary assessment, and site investigation (if the preliminary assessment indicates that a site investigation is necessary), as defined in section 23 of P.L.1993, c.139 (C.58:10B-1), and performed in accordance with rules and regulations promulgated by the department defining these terms.

    Nothing in this paragraph (2) shall be construed to alter liability of any person who acquired real property prior to the effective date of P.L.1993, c.139 (C.13:1K-9.6 et al.).

    (3) Notwithstanding the provisions of paragraph (2) of this subsection to the contrary, if a person who owns real property obtains actual knowledge of a discharge of a hazardous substance at the real property during the period of that person's ownership and subsequently transfers ownership of the property to another person without disclosing that knowledge, the transferor shall be strictly liable for the cleanup and removal costs of the discharge and no defense under this subsection shall be available to that person.

    (4) Any federal, State, or local governmental entity which acquires ownership of real property through bankruptcy, tax delinquency, abandonment, escheat, eminent domain, condemnation or any circumstance in which the government involuntarily acquires title by virtue of its function as sovereign, shall not be liable for the cleanup and removal costs of any discharge which occurred or began prior to that ownership. This paragraph shall not apply to any federal, State or local governmental entity which has caused or contributed to the discharge of a hazardous substance.

    e. (1) If the Department of Environmental Protection issues a no further action letter as defined in section 23 of P.L.1993, c.139 (C.58:10B-1) for a site at which a discharge occurred prior to a person becoming an owner or operator of the site, and any institutional or engineering controls required by the remedial action workplan are maintained as required by the department, then any person who is not otherwise liable for the discharge at the site which occurred prior to the department's approval of the no further action letter shall not be liable for the cleanup and removal of the discharge or for damages to any person resulting from the discharge based solely on that person becoming an owner or operator of the site of the discharge. For the purposes of this paragraph, a site shall constitute the real property defined in the remedial action workplan or, if no remedial action workplan is required, the no further action letter.

    (2) The fund established pursuant to the "Spill Compensation and Control Act," P.L.1976, c.141 (C.58:10-23.11 et seq.), shall not be liable for any damages incurred by any person who is relieved from liability pursuant to this subsection.

    (3) The provisions of this subsection shall apply if the discharge occurred prior to, on, or after the effective date of P.L. c. (C.     ) (pending in the Legislature as this bill).

(cf: P.L.1993, c.139, s.44)

 

    2. Section 36 of P.L.1993, c.139 (C.58:10B-13) is amended to read as follows:

    36. a. When real property is remediated to a nonresidential soil remediation standard or engineering or institutional controls are used in lieu of remediating a site to meet an established remediation standard for soil, groundwater, or surface water, the department shall, as a condition of the use of that standard or control measure:

    (1) require the establishment of any engineering or institutional controls the department determines are reasonably necessary to prevent exposure to the contaminants, require maintenance, as necessary, of those controls, and require the restriction of the use of the property in a manner that prevents exposure;

    (2) require, with the consent of the owner of the real property, the recording with the office of the county recording officer, in the county in which the property is located, a notice to inform prospective holders of an interest in the property that contamination exists on the property at a level that may statutorily restrict certain uses of or access to all or part of that property, a delineation of those restrictions, a description of all specific engineering or institutional controls at the property that exist and that shall be maintained in order to prevent exposure to contaminants remaining on the property, and the written consent to the notice by the owner of the property;

    (3) require a notice to the governing body of each municipality in which the property is located that contaminants will exist at the property above residential use soil remediation standards or any other remediation standards and specifying the restrictions on the use of or access to all or part of that property and of the specific engineering or institutional controls at the property that exist and that shall be maintained;

    (4) require, when determined necessary by the department, that signs be posted at any location at the site where access is restricted or in those areas that must be maintained in a prescribed manner, to inform persons on the property that there are restrictions on the use of that property or restrictions on access to any part of the site;

    (5) require that a list of the restrictions be kept on site for inspection by governmental enforcement officials; and

    (6) require a person, prior to commencing a remedial action, to notify the governing body of each municipality wherein the property being remediated is located. The notice shall include, but not be limited to, the commencement date for the remedial action; the name, mailing address and business telephone number of the person implementing the remedial action, or his designated representative; and a brief description of the remedial action.

    b. If the owner of the real property does not consent to the recording of a notice pursuant to paragraph (2) of subsection a. of this section, the department shall require the use of a residential soil remediation standard in the remediation of that real property.

    c. Whenever engineering or institutional controls on property as provided in subsection a. of this section are no longer required, or whenever the engineering or institutional controls are changed because of the performance of subsequent remedial activities, a change in conditions at the site, or the adoption of revised remediation standards, the department shall require that the owner or operator of that property record with the office of the county recording officer a notice that the use of the property is no longer restricted or delineating the new restrictions. The department shall also require that the owner or operator notify, in writing, the municipality in which the property is located of the removal or change of the restrictive use conditions.     d. The owner or lessee of any real property, or any person operating a business on real property, which has been remediated to a nonresidential use soil remediation standard or on which the department has allowed engineering or institutional controls for soil, groundwater, or surface water to protect the public health, safety, or the environment, as applicable, shall maintain the engineering or institutional controls as required by the department. An owner, lessee, or operator who takes any action that results in the improper alteration or removal of engineering or institutional controls or who fails to maintain the engineering or institutional controls as required by the department, shall be subject to the penalties and actions set forth in section 22 of P.L.1976, c.141 (C.58:10-23.11u). The provisions of this subsection shall not apply if a notification received pursuant to subsection b. of this section authorizes all restrictions or controls to be removed from the subject property.

    e. Notwithstanding the provisions of any other law, or any rule, regulation, or order adopted pursuant thereto to the contrary, whenever contamination at a property is remediated in compliance with [any] the applicable soil, groundwater, or surface water remediation standards adopted by the department pursuant to section 35 of P.L.1993, c.139 (C.58:10B-12) that were in effect at the completion of the remediation or until the department adopts such standards, the standards approved by the department for the property at the time of remediation, [the owner or operator of the property or person performing the remediation,] no person except as otherwise provided in this section, shall [not] be liable for the cost of any additional remediation that may be required [by] upon a subsequent adoption by the department of a more stringent remediation standard for a particular contaminant or upon the subsequent discovery of contamination that existed on the property at the time of the remediation. [Upon the adoption of a regulation that amends a remediation standard, only a person who is liable to clean up and remove that contamination pursuant to section 8 of P.L.1976, c.141 (C.58:10-23.11g) shall be liable for any additional remediation costs necessary to bring the site into compliance with the new remediation standards except that no person shall be so liable unless the difference between the new remediation standard and the level or concentration of a contaminant at the property differs by an order of magnitude.]

    Nothing in the provisions of this subsection shall be construed to limit the liability of any person who is liable to remediate the contamination and at the time of the remediation knows of contamination existing on the property and fails to remediate or disclose it.

    Nothing in the provisions of this subsection shall be construed to affect the authority of the department, pursuant to subsection f. of this section, to require additional remediation on real property where engineering or institutional controls were implemented.

    Nothing in the provisions of this subsection shall limit the rights of a person, other than the State, or any department or agency thereof, to bring a civil action for damages [, contribution, or indemnification] other than remediation costs as provided by statutory or common law.

    f. Whenever the department approves or has approved the use of engineering or institutional controls for the remediation of soil, groundwater, or surface water, to protect public health, safety or the environment in lieu of remediating a site to a condition that meets an established residential remediation standard, the department shall not require additional remediation of that site unless the engineering or institutional controls no longer are protective of public health, safety, or the environment.

(cf: P.L.1993, c.139, s.36)

 

    3. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill would amend the law concerning the liability for the cleanup and removal of hazardous substances. Section 1 of the bill would amend the "Spill Compensation and Control Act" to limit the liability of certain owners or operators of property that has been remediated. If the Department of Environmental Protection has issued a no further action letter for the property, and any institutional or engineering controls required in the remedial action workplan are maintained, then any person who is not otherwise liable for a discharge that occurred before becoming an owner or operator of the site, shall not be liable for cleanup and removal costs or for any damages to any person resulting from the discharge based solely on that person becoming an owner or operator of the site. This provision would apply if the discharge occurs before, on or after the bill's enactment. Section 2 of the bill would amend P.L.1993, c.139 to limit the liability of any person for remediation costs for any additional remediation that may be required because of the adoption of a more stringent remediation standard than the one in effect at the time of the cleanup, or by the subsequent discovery of contamination that existed at the time of the remediation. The bill would not limit the liability of any person otherwise liable for the subsequent discovery of contamination if at the time of the remediation the person knew of the contamination and failed to remediate or disclose its existence.

 

 

                             

Limits liability for hazardous substances in certain circumstances.