S-4825.1                   _______________________________________________

 

                                            SUBSTITUTE SENATE BILL 6078

                              _______________________________________________

 

State of Washington                              53rd Legislature                             1994 Regular Session

 

By Senate Committee on Ecology & Parks (originally sponsored by Senators Talmadge, Deccio and Fraser)

 

Read first time 02/04/94.

 

Modifying toxic cleanup settlement authority.



          AN ACT Relating to liability for the cleanup of hazardous waste sites; amending RCW 70.105D.040; adding new sections to chapter 70.105D RCW; and creating a new section.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

 

        Sec. 1.  RCW 70.105D.040 and 1989 c 2 s 4 are each amended to read as follows:

          (1) Except as provided in subsection (3) of this section, the following persons are liable with respect to a facility:

          (a) The owner or operator of the facility;

          (b) Any person who owned or operated the facility at the time of disposal or release of the hazardous substances;

          (c) Any person who owned or possessed a hazardous substance and who by contract, agreement, or otherwise arranged for disposal or treatment of the hazardous substance at the facility, or arranged with a transporter for transport for disposal or treatment of the hazardous substances at the facility, or otherwise generated hazardous wastes disposed of or treated at the facility;

          (d) Any person (i) who accepts or accepted any hazardous substance for transport to a disposal, treatment, or other facility selected by such person from which there is a release or a threatened release for which remedial action is required, unless such facility, at the time of disposal or treatment, could legally receive such substance; or (ii) who accepts a hazardous substance for transport to such a facility and has reasonable grounds to believe that such facility is not operated in accordance with chapter 70.105 RCW; and

          (e) Any person who both sells a hazardous substance and is responsible for written instructions for its use if (i) the substance is used according to the instructions and (ii) the use constitutes a release for which remedial action is required at the facility.

          (2) Each person who is liable under this section is strictly liable, jointly and severally, for all remedial action costs and for all natural resource damages resulting from the releases or threatened releases of hazardous substances.  The attorney general, at the request of the department, is empowered to recover all costs and damages from persons liable therefor.

          (3) The following persons are not liable under this section:

          (a) Any person who can establish that the release or threatened release of a hazardous substance for which the person would be otherwise responsible was caused solely by:

          (i) An act of God;

          (ii) An act of war; or

          (iii) An act or omission of a third party (including but not limited to a trespasser) other than (A) an employee or agent of the person asserting the defense, or (B) any person whose act or omission occurs in connection with a contractual relationship existing, directly or indirectly, with the person asserting this defense to liability.  This defense only applies where the person asserting the defense has exercised the utmost care with respect to the hazardous substance, the foreseeable acts or omissions of the third party, and the foreseeable consequences of those acts or omissions;

          (b) Any person who is an owner, past owner, or purchaser of a facility and who can establish by a preponderance of the evidence that at the time the facility was acquired by the person, the person had no knowledge or reason to know that any hazardous substance, the release or threatened release of which has resulted in or contributed to the need for the remedial action, was released or disposed of on, in, or at the facility. This subsection (b) is limited as follows:

          (i) To establish that a person had no reason to know, the person must have undertaken, at the time of acquisition, all appropriate inquiry into the previous ownership and uses of the property, consistent with good commercial or customary practice in an effort to minimize liability.  Any court interpreting this subsection (b) shall take into account any specialized knowledge or experience on the part of the person, the relationship of the purchase price to the value of the property if uncontaminated, commonly known or reasonably ascertainable information about the property, the obviousness of the presence or likely presence of contamination at the property, and the ability to detect such contamination by appropriate inspection;

          (ii) The defense contained in this subsection (b) is not available to any person who had actual knowledge of the release or threatened release of a hazardous substance when the person owned the real property and who subsequently transferred ownership of the property without first disclosing such knowledge to the transferee;

          (iii) The defense contained in this subsection (b) is not available to any person who, by any act or omission, caused or contributed to the release or threatened release of a hazardous substance at the facility;

          (c) Any natural person who uses a hazardous substance lawfully and without negligence for any personal or domestic purpose in or near a dwelling or accessory structure when that person is:  (i) A resident of the dwelling; (ii) a person who, without compensation, assists the resident in the use of the substance; or (iii) a person who is employed by the resident, but who is not an independent contractor;

          (d) Any person who, for the purpose of growing food crops, applies pesticides or fertilizers without negligence and in accordance with all applicable laws and regulations.

          (4) There may be no settlement by the state with any person potentially liable under this chapter except in accordance with this subsection and section 2 of this act.

          (a) The attorney general may agree to a settlement with any potentially liable person only if the department finds, after public notice and hearing, that the proposed settlement would lead to a more expeditious cleanup of hazardous substances in compliance with cleanup standards under RCW 70.105D.030(2)(d) and with any remedial orders issued by the department.  Whenever practicable and in the public interest, the attorney general may expedite such a settlement with persons whose contribution is insignificant in amount and toxicity.

           (b) A settlement agreement under this subsection shall be entered as a consent decree issued by a court of competent jurisdiction.

           (c) A settlement agreement may contain a covenant not to sue only of a scope commensurate with the settlement agreement in favor of any person with whom the attorney general has settled under this section.  Except for covenants authorized under section 2 of this act, any covenant not to sue shall contain a reopener clause which requires the court to amend the covenant not to sue if factors not known at the time of entry of the settlement agreement are discovered and present a previously unknown threat to human health or the environment.

          (d) A party who has resolved its liability to the state under this subsection shall not be liable for claims for contribution regarding matters addressed in the settlement.  The settlement does not discharge any of the other liable parties but it reduces the total potential liability of the others to the state by the amount of the settlement.

          (5) Nothing in this chapter affects or modifies in any way any person's right to seek or obtain relief under other statutes or under common law, including but not limited to damages for injury or loss resulting from a release or threatened release of a hazardous substance.  No settlement by the department or remedial action ordered by a court or the department affects any person's right to obtain a remedy under common law or other statutes.

 

          NEW SECTION.  Sec. 2.  A new section is added to chapter 70.105D RCW to read as follows:

          (1) The attorney general, with the concurrence of the director, may enter a settlement agreement under the authority of RCW 70.105D.040(4) that includes a covenant not to sue without the reopener clause described by RCW 70.105D.040(4)(c), if the attorney general determines that:

          (a) The agreement meets the requirements applicable to all settlement agreements under RCW 70.105D.040(4)(a);

          (b) The agreement requires the persons entering the agreement to make payment into the site cleanup reserve account in an amount meeting the standards under subsection (3) of this section; and

          (c) The director has provided his or her concurrence that the covenant not to sue is in the public interest, considering the factors in subsection (2) of this section.

          (2) In making the public interest determination under subsection (1)(c) of this section, the director shall consider such factors as:

          (a) The effectiveness and reliability of the remedial action, in light of the other alternative actions considered for the facility concerned;

          (b) The nature of the risks remaining at the facility;

          (c) The extent to which performance standards are included in the settlement agreement;

          (d) The extent to which the actions provide a complete remedy, including a reduction in the hazardous nature of the substances at the facility;

          (e) The extent to which the technology used is demonstrated to be effective;

          (f) Whether the payment to the site cleanup reserve account would be sufficient to fund additional remedial actions that might eventually be necessary at the facility;

          (g) Whether the remedial action will be carried out, in whole or in significant part, by the potentially liable persons entering the settlement agreement; and

          (h) The size and proximity of populations that may be exposed to a future release of hazardous substances from the facility.

          (3) The attorney general, with the assistance of the director, shall determine the amount of a monetary payment to be made to the site cleanup reserve account, which shall be made by the potentially liable persons entering a settlement agreement containing a covenant not to sue described under subsection (1) of this section.  The amount shall be sufficient to cover the cost of periodically monitoring the facility to ensure maintenance of the remedy, and to cover the risk that future remedial action may be necessary at the facility.  In determining the amount the attorney general shall consider:

          (a) The completeness of the remedial action to be undertaken, and the degree to which the action encompasses permanent remedies that destroy the hazardous substances or otherwise treat or stabilize the substances to eliminate their hazardous nature;

          (b) The potential future uses of the facility after cleanup;

          (c) The current balance in the site cleanup reserve account in comparison to the total number of sites eligible for funding from the account for future remedial action that may become necessary.

          (4) The attorney general, with the assistance of the director, shall develop by rule a payment schedule for determining the amount of payments to the site cleanup reserve account, to ensure consistency and fairness among all settlement agreements.  The schedule may be revised from time to time to reflect new information regarding expenditures from the account in relation to payments into the account.  The payment schedule may establish criteria to waive an amount for facility monitoring costs where, because of the size of the facility or the amount or toxicity of hazardous substances remaining at the facility after remedial action, it is not anticipated that periodic monitoring of the facility will be necessary.  The schedule shall also establish criteria for the reduction or waiver of the fee, where the remedial action will employ cleanup technologies with a high degree of demonstrated effectiveness in complete remediation at sites with substantially similar circumstances to that addressed in the proposed settlement agreement.

          (5) A covenant not to sue under subsection (1) of this section is subject to the satisfactory performance by such person of its obligations under the settlement agreement, and shall not take effect until the director certifies that remedial action has been completed in accordance with the requirements of this chapter and with the terms of the settlement agreement.  The covenant shall not bar the state from taking actions necessary to protect members of the public from a health hazard, including, but not limited to, actions to prevent entrance upon the facility, or to enter the facility for the purpose of assessing the need for or for conducting remedial action at the facility.  The covenant shall not bar the state from taking action against a person entering the settlement agreement regarding releases or potential releases at the facility known by the person at the time of entering the settlement agreement but not disclosed to the attorney general.

          (6) The issuance of a covenant not to sue to a potentially liable person does not relieve or decrease any other person's liability to the state.

 

          NEW SECTION.  Sec. 3.  A new section is added to chapter 70.105D RCW to read as follows:

          The site cleanup reserve account is created in the state treasury.  All payments made as a condition of a settlement agreement under section 2(1) of this act shall be deposited to the account.  Money in the account shall be used solely for:

          (1) Remedial action by the state to address releases or potential releases at or from facilities for which remedial action had previously been completed under the terms of a settlement agreement containing a covenant not to sue under section 2(1) of this act; and

          (2) Periodically monitoring such facilities to determine whether further remedial action is necessary.

          Money deposited in the account shall be administered by the department and is subject to legislative appropriation.  All earnings from investment of balances in the site cleanup reserve account shall be credited to the account.

 

          NEW SECTION.  Sec. 4.  (1) The pollution liability insurance agency shall conduct a study on insurance coverage for environmental remediation liability.  The study shall include a review of:  (a) The availability of policies for such coverage in all areas of the state, and the insurance firms offering such policies; (b) the prevailing policy coverage available, including types of liability covered, exclusions from coverage, and other significant policy limitations; (c) premium costs; (d) prevailing policy provisions and insurance industry practices regarding future liability of insureds at remediated hazardous waste sites; and (e) methods by which the risks to the state of costs for future cleanup at remediated site subject to settlements entered under section 2 of this act may be managed through obtaining private insurance coverage.  The study shall include recommendations for legislative and administrative actions to assist in making affordable clean-up liability insurance available and reducing transactional costs associated with determining policy coverage and payments made under such policies.

          (2) The department of ecology, office of the insurance commissioner, office of financial management, and the attorney general's office shall provide assistance to the agency in preparing the report.  The agency shall also consult with insurance industry representatives as well as persons or businesses who are insured under such policies, may desire such insurance, or may be undertaking environmental cleanup.

          (3) The report shall be submitted to the standing committees of the house of representatives and the senate with jurisdiction over environmental and insurance matters on or before December 1, 1994.

 


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