SENATE, No. 1689
STATE OF NEW JERSEY
INTRODUCED NOVEMBER 18, 1996
By Senator CODEY
An Act concerning liability for discharges of hazardous substances and amending P.L.1976, c.141.
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.
(3) In addition to the persons liable pursuant to this subsection, any person who owns real property acquired on or after September 14, 1993 on which there has been a discharge prior to the person's acquisition of that property and the person knew or should have known that a hazardous substance had been discharged at the real property, 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). Nothing in this paragraph shall be construed to alter liability of any person who acquired real property prior to September 14, 1993.
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 on or after [the effective date of P.L.1993, c.139 (C.13:1K-9.6 et al.),] September 14, 1993 on which there has been a discharge, shall not be [considered a person in any way responsible] liable to the State or to any other person for the discharged hazardous substance pursuant to subsection c. of this section or pursuant to common law, [unless] if 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 or other appropriate governmental entity upon actual discovery of that discharge or the department or appropriate governmental entity had prior knowledge of the 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.)] September 14, 1993.
(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] governmental entity 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.
(5) An organization that is exempt from federal taxation pursuant to section 501 (c)(3) of the Internal Revenue Code of 1986, 26 U.S.C. §501, because it is organized for religious, charitable, educational, or other enumerated purposes, who owns real property on which there has been a discharge, shall not be liable to the State or to any other person for the discharged hazardous substance pursuant to this section or pursuant to common law, if that organization can establish by a preponderance of the evidence that all of the following apply:
(a) the organization was exempt from federal taxation at the time it acquired the real property:
(b) the organization did not discharge the hazardous substance; and (c) the organization gave notice of the discharge to the department upon actual discovery of that discharge.
The provisions of this paragraph shall apply retroactively to any administrative or judicial action commenced before the effective date of P.L. , c. (C. ) (now before the Legislature as this bill), unless a final judgment or final court approval of a settlement agreement has been issued in an administrative or judicial action prior to the effective date of P.L. , c. (now before the Legislature as this bill). If a final judgment has been entered or a settlement has been approved by a court prior to the effective date of P.L. , c. (now before the Legislature as this bill), that does not resolve all contested issues, this paragraph shall apply to all contested issues not expressly resolved by the judgment or settlement agreement.
e. (1) If the Department of Environmental Protection issues a no further action letter or approves a remedial action workplan after [the effective date of P.L.1996, c.62 (C.55:19-20 et al.)] September 10, 1996 for a site at which a discharge occurred prior to or after the [effective date of P.L.1996, c.62 (C.55:19-20 et al.)] September 10, 1996, then any person who is not otherwise liable for any discharge at the site which occurred prior to the department's approval of the no further action letter or remedial action workplan shall not be liable for the discharge based solely on that person becoming an owner or operator of the site of the discharge after the discharge has occurred. 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. The provisions of this paragraph shall only apply when the site is located in a qualified municipality as defined pursuant to section 3 of P.L.1996, c.62 (C.55:19-22) and there is continued compliance with all of the conditions of the no further action letter, the remedial action workplan and all applicable engineering and institutional controls.
(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.
(cf: P.L.1996, c.62, s.56)
2. This act shall take effect immediately.
STATEMENT
This bill provides that religious, charitable, educational and similar nonprofit organizations that are exempt from federal taxation are not liable for hazardous substances discharges on their real property for which they are not otherwise responsible. The bill applies retroactively and applies to causes of action brought pursuant to both the "Spill Compensation and Control Act" and common law.
The bill also makes certain changes in order to clarify existing provisions of law.
The intent of this bill is to remove a potential financial hardship from these nonprofit organizations for contamination that they did not cause. To hold them liable for this contamination could potentially ruin many nonprofit organizations and divert moneys from their intended charitable purposes.
Exempts certain nonprofit organizations from hazardous substance discharge liability.