N.J.S.A. 58:10-23.11g — Liability for cleanup and removal costs.

58:10-23.11g Liability for cleanup and removal costs. 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 percent 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 $1,200 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) Except as provided in section 2 of P.L.2005, c.43 (C.58:10-23.11g12), 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 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 who 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 September 14, 1993 on which there has been a discharge, shall not be liable for cleanup and removal costs or for any other damages to the State or to any other person for the discharged hazardous substance pursuant to subsection c. of this section or pursuant to civil common law, if that person can establish by a preponderance of the evidence that subparagraphs (a) through (d) apply, or if applicable, subparagraphs (a) through (e) 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, or (iii) the person complies with the provisions of subparagraph (e) of paragraph (2) of this subsection; (c) the person did not discharge the hazardous substance, is not in any way responsible for the hazardous substance, and is not a corporate successor to the discharger or to any person in any way responsible for the hazardous substance or to anyone liable for cleanup and removal costs pursuant to this section; (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 September 14, 1993; and (e) For the purposes of this subparagraph the person must have (i) acquired the property subsequent to a hazardous substance being discharged on the site and which discharge was discovered at the time of acquisition as a result of the appropriate inquiry, as defined in this paragraph (2), (ii) performed, following the effective date of P.L.1997, c.278, a remediation of the site or discharge consistent with the provisions of section 35 of P.L.1993, c.139 (C.58:10B-12), or, relied upon a valid final remediation document for a remediation performed prior to acquisition, or, obtained a remedial action workplan certified by a licensed site remediation professional retained for the site after the date of enactment of P.L.2009, c.60 (C.58:10C-1 et al.) and continued to comply with the conditions of that workplan, or obtained approval of a remedial action workplan by the department after the effective date of P.L.1997, c.278 and continued to comply with the conditions of that workplan, and (iii) established and maintained all engineering and institutional controls as may be required pursuant to sections 35 and 36 of P.L.1993, c.139. A person who complies with the provisions of this subparagraph by actually performing a remediation of the site or discharge as set forth in (ii) above shall be issued, upon application, a no further action letter by the department or a response action outcome by a licensed site remediation professional, as applicable. A person who complies with the provisions of this subparagraph either by receipt of a final remediation document following the effective date of P.L.1997, c.278, or by relying on a previously issued final remediation document shall not be liable for any further remediation including any changes in a remediation standard or for the subsequent discovery of a hazardous substance, at the site, or emanating from the site, if the remediation was for the entire site, and the hazardous substance was discharged prior to the person acquiring the property. Notwithstanding any other provisions of this subparagraph, a person who complies with the provisions of this subparagraph only by virtue of the existence of a previously issued final remediation document shall receive no liability protections for any discharge which occurred during the time period between the issuance of the final remediation document and the property acquisition. Compliance with the provisions of this subparagraph (e) shall not relieve any person of any liability for a discharge that is off the site of the property covered by the final remediation document, for a discharge that occurs at that property after the person acquires the property, for any actions that person negligently takes that aggravates or contributes to a discharge of a hazardous substance, for failure to comply in the future with laws and regulations, or if that person fails to maintain the institutional or engineering controls on the property or to otherwise comply with the provisions of the final remediation document. (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 governmental entity involuntarily acquires title by virtue of its function as sovereign, or where the governmental entity acquires the property by any means for the purpose of promoting the redevelopment of that property, shall not be liable, pursuant to subsection c. of this section or pursuant to common law, to the State or to any other person for any discharge which occurred or began prior to that ownership. This paragraph shall not provide any liability protection to any federal, State or local governmental entity which has caused or contributed to the discharge of a hazardous substance. This paragraph shall not provide any liability protection to any federal, State, or local government entity that acquires ownership of real property by condemnation or eminent domain where the real property is being remediated in a timely manner at the time of the condemnation or eminent domain action. (5) A person, including an owner or operator of a major facility, who owns real property acquired prior to September 14, 1993 on which there has been a discharge, shall not be liable for cleanup and removal costs or for any other damages to the State or to any other person for the discharged hazardous substance pursuant to subsection c. of this section or pursuant to civil common law, if that person can establish by a preponderance of the evidence that subparagraphs (a) through (d) 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, is not in any way responsible for the hazardous substance, and is not a corporate successor to the discharger or to any person in any way responsible for the hazardous substance or to anyone liable for cleanup and removal costs pursuant to this section; (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 (5), the person must have undertaken, at the time of acquisition, all appropriate inquiry on the previous ownership and uses of the property based upon generally accepted good and customary standards. Nothing in this paragraph (5) shall be construed to alter liability of any person who acquired real property on or after September 14, 1993. e. Neither the fund nor the Sanitary Landfill Contingency Fund established pursuant to P.L.1981, c.306 (C.13:1E-100 et seq.) shall be liable for any damages incurred by any person who is relieved from liability pursuant to subsection d. or f. of this section for a remediation that involves the use of engineering controls but the fund and the Sanitary Landfill Contingency Fund shall be liable for any remediation that involves only the use of institutional controls if after a valid final remediation document has been issued the department orders additional remediation except that the fund and the Sanitary Landfill Contingency Fund shall not be liable for any additional remediation that is required to remove an institutional control. f. Notwithstanding any other provision of this section, a person, who owns real property acquired on or after the effective date of P.L.1997, c.278 (C.58:10B-1.1 et al.), shall not be liable for any cleanup and removal costs or damages, under this section or pursuant to any other statutory or civil common law, to any person, other than the State and the federal government, harmed by any hazardous substance discharged on that property prior to acquisition, and any migration off that property related to that discharge, provided all the conditions of this subsection are met: (1) the person acquired the real property after the discharge of that hazardous substance at the real property; (2) the person did not discharge the hazardous substance, is not in any way responsible for the hazardous substance, and is not a corporate successor to the discharger or to any person in any way responsible for the hazardous substance or to anyone liable for a discharge pursuant to this section; (3) the person gave notice of the discharge to the department upon actual discovery of that discharge; (4) (a) within 30 days after acquisition of the property, the person commenced a remediation of the discharge, including any migration, pursuant to a department oversight document executed prior to acquisition, or (b) for property acquired after the date of enactment of P.L.2009, c.60 (C.58:10C-1 et al.), the person provides written notice of the acquisition to the department prior to or on the date of acquisition and the person remediates the property pursuant to the provisions of section 30 of P.L.2009, c.60 (C.58:10B-1.3), and (c) the department is satisfied that remediation was completed in a timely and appropriate fashion; and (5) Within ten days after acquisition of the property, or within 30 days after the expiration of the period or periods allowed for the right of redemption pursuant to tax foreclosure law, the person agrees in writing to provide access to the State for remediation and related activities, as determined by the State. The provisions of this subsection shall not relieve any person of any liability: (1) for a discharge that occurs at that property after the person acquired the property; (2) for any actions that person negligently takes that aggravates or contributes to the harm inflicted upon any person; (3) if that person fails to maintain the institutional or engineering controls on the property or to otherwise comply with the provisions of a final remediation document or a remedial action workplan and a person is harmed thereby; (4) for any liability to clean up and remove, pursuant to the department's regulations and directions, any hazardous substances that may have been discharged on the property or that may have migrated therefrom; and (5) for that person's failure to comply in the future with laws and regulations. g. Nothing in the amendatory provisions to this section adopted pursuant to P.L.1997, c.278 shall be construed to remove any defense to liability that a person may have had pursuant to subsection e. of this section that existed prior to the effective date of P.L.1997, c.278. h. Nothing in this section shall limit the requirements of any person to comply with P.L.1983, c.330 (C.13:1K-6 et al.). L.1976, c.141, s.8; amended 1979, c.346, s.5; 1991, c.58, s.1; 1991, c.85, s.4; 1993, c.139, s.44; 1996, c.62, s.56; 1997, c.278, s.20; 2001, c.154, s.2; 2003, c.224, s.1; 2005, c.43, s.1; 2005, c.238; 2009, c.60, s.38; 2019, c.263, s.4. 58:10-23.11g1. Hazardous discharge cleanup liability 1. The provisions of P.L. 1976, c. 141 (C. 58:10-23.11 et seq.), or any other law, rule or regulation to the contrary notwithstanding, the liability of any person performing hazardous discharge mitigation or cleanup services in accordance with procedures established pursuant to State or federal law and a surety who issues a bid, performance or payment bond for such person for such services for any injury to a person or property caused by or related to these services shall be limited to acts or omissions of the person or surety during the course of performing these services which can be shown, based on a preponderance of the evidence, to have been negligent. For the purposes of this act, the demonstration that acts or omissions of a person or surety performing mitigation or cleanup services were in accordance with generally accepted practice and state-of-the-art scientific knowledge, and utilized the best technology reasonably available to the person at the time the mitigation or cleanup services were performed shall create a rebuttable presumption that the acts or omissions were not negligent. L.1985,c.461,s.1; amended 1991,c.373,s.16. 58:10-23.11g2. Owners, operators of vessels shall assure financial resources for cleanup costs, enforcement The owners and operators of vessels shall establish and maintain evidence of financial responsibility for the purpose of assuring adequate financial resources to pay for the cost of cleanup and removal of a discharged hazardous substance as a result of the transportation of a hazardous substance by vessel or a transfer of that hazardous substance between a refinery, storage, transfer, or pipeline facility and a vessel or between two vessels. Evidence of financial responsibility shall be established by a method set forth under s.108 of the "Comprehensive Environmental Response, Compensation, and Liability Act of 1980" (42 U.S.C. s.9607) or s.1016 of the "Oil Pollution Act of 1990", any regulation adopted pursuant thereto, or any other federal law requiring evidence of financial responsibility to operate a vessel in the waters of the United States. The evidence of financial responsibility required by this section shall be the only evidence required by the State that a vessel has the ability to meet the liabilities incurred for a violation of P.L.1976, c.141, but nothing in this section shall be construed to limit the liability of any person for a discharge of a hazardous substance for which the person is liable pursuant to P.L.1976, c.141 or under any other law or under common law. The State Police shall have the power to inspect any vessel and to require the display of evidence of financial responsibility in order to ensure compliance with this section. The State Police may deny entry to any vessel to any place in the State, or to the navigable waters under the jurisdiction of the State, or detain at the place, any vessel that, upon request, does not produce the evidence of financial responsibility required for that vessel pursuant to this section. Any vessel subject to the requirements of this section which is found in the navigable waters of the State without the necessary evidence of financial responsibility for the vessel shall be subject to seizure by and forfeiture to the State. L.1991,c.58,s.2. 58:10-23.11g3. No liability for cleanup and removal costs for actions taken with respect to discharge of petroleum 1. a. Notwithstanding the provisions of section 8 of P.L.1976, c.141 (C.58:10-23.11g) or any other law, including common law, to the contrary, a person is not liable for any cleanup and removal costs or damages of any kind, direct or indirect no matter by whom sustained, which result from actions taken or not taken in the course of rendering care, assistance, or advice with respect to the discharge or threatened discharge of petroleum into the State's surface waters where the care, assistance, or advice is consistent with or pursuant to any of the following: (1) the federal National Contingency Plan prepared pursuant to 33 U.S.C. s.1321; (2) a State contingency plan; (3) a State or federal vessel-specific contingency plan; (4) the direction of a federal on-scene coordinator or an appropriate State official; or (5) the emergency request of a person who is attempting to prevent the threatened discharge of petroleum from a vessel or who is otherwise liable for cleanup and removal costs of the initial discharge from the vessel pursuant to subsection c. of section 8 of P.L.1976, c.141 (C.58:10-23.11g), provided that a person rendering care, assistance, or advice shall provide notification of the threatened discharge or emergency, to the extent actually known to such person, to the United States Coast Guard or an appropriate federal or State official, as soon as practicable (although not of necessity before rendering care, assistance or advice) in the event such person is attempting to unload petroleum from a vessel to prevent or mitigate a discharge, or to tow, push, maneuver or otherwise physically move a vessel transporting petroleum to end the emergency. b. The defense from liability granted pursuant to subsection a. of this section shall not apply (1) to a person otherwise liable for cleanup and removal costs of the initial discharge pursuant to subsection c. of section 8 of P.L.1976, c.141 (C.58:10-23.11g), (2) with respect to personal injury or wrongful death, or (3) if the person is grossly negligent or engages in willful misconduct. c. A person liable for the initial discharge or threat of discharge pursuant to subsection c. of section 8 of P.L.1976, c.141 (C.58:10-23.11g) is liable for any cleanup and removal costs and damages that another person is relieved of under this section. d. Nothing in this section shall limit other defenses or immunities to liability that may exist in P.L.1976, c.141. e. For the purposes of this section "petroleum" does not include dredged spoil. L.1991,c.260,s.1; amended 1993,c.382. 58:10-23.11g4. Definitions 1. For purposes of sections 1 through 5 of P.L.1993, c.112 (C.58:10-23.11g4 through 58:10-23.11g8): "Active participation in the management" or "participation in the management" means actual participation in the management or operational affairs by the holder of the security interest and shall not include the mere capacity, or ability to influence, or the unexercised right to control vessel, facility , or underground storage tank facility operations. (1) A holder of a security interest shall be considered to be in active participation in the management, while the borrower is still in possession, only if the holder either: (a) exercises decision making control over the borrower's environmental compliance, such that the holder has undertaken responsibility for the borrower's waste disposal or hazardous substance handling practices; or (b) exercises control at a level comparable to that of a manager of the borrower's enterprise, such that the holder has assumed or manifested responsibility for the overall management of the enterprise encompassing the day-to-day decision making of the enterprise with respect to: (i) environmental compliance; or (ii) all, or substantially all, of the operational (as opposed to financial or administrative) aspects of the enterprise other than environmental compliance. Operational aspects of the enterprise include functions such as that of facility manager, underground storage tank facility manager, or plant manager, operations manager, chief operating officer, or chief executive officer. Financial or administrative aspects include functions such as that of credit manager, accounts payable or receivable manager, or both, personnel manager, controller, chief financial officer, or similar functions. (2) No act or omission prior to the time that indicia of ownership are held primarily to protect a security interest constitutes evidence of participation in management. A prospective holder who undertakes or requires an environmental inspection of the vessel, facility, or underground storage tank facility in which indicia of ownership are to be held, or requires a prospective borrower to clean up a vessel, facility , or underground storage tank facility or to comply or come into compliance (whether prior or subsequent to the time that indicia of ownership are held primarily to protect a security interest) with any applicable law or regulation, is not by such action considered to be participating in the vessel's, facility's, or underground storage tank facility's management, provided however, that a holder shall not be required to conduct or require an inspection to qualify for the protection for holders granted pursuant to sections 1 through 5 of P.L.1993, c.112 (C.58:10-23.11g4 through 58:10-23.11g8), and the liability of a holder shall not be based on or affected by the holder not conducting or not requiring an inspection. (3) Actions that are consistent with holding ownership indicia primarily to protect a security interest do not constitute participation in management for purposes of sections 1 through 5 of P.L.1993, c.112 (C.58:10-23.11g4 through 58:10-23.11g8). The authority for the holder to make such actions may, but need not, be contained in contractual or other documents specifying requirements for financial, environmental, and other warranties, covenants, conditions, representations or promises from the borrower. Loan policing and work out activities cover and include all activities up to foreclosure and its equivalents. (a) A holder who engages in policing activities prior to foreclosure shall remain within the exemption provided that the holder does not by such actions participate in the management of the vessel, facility, or underground storage tank facility. Such actions include, but are not limited to, requiring the borrower to clean up the vessel, facility, or underground storage tank facility during the term of the security interest; requiring the borrower to comply or come into compliance with applicable federal, State, and local environmental and other laws, rules and regulations during the term of the security interest; securing or exercising authority to monitor or inspect the vessel, facility, or underground storage tank facility (including on-site inspections) in which indicia of ownership are maintained, or the borrower's business or financial conditions during the term of the security interest; or taking other actions to adequately police the loan or security interest (such as requiring a borrower to comply with any warranties, covenants, conditions, representations or promises from the borrower). (b) A holder who engages in work out activities prior to foreclosure and its equivalents shall remain within the exemption provided that the holder does not by such action participate in the management of the vessel, facility, or underground storage tank facility. For purposes of this act, "work out" refers to those actions by which a holder, at any time prior to foreclosure and its equivalents, seeks to: prevent, cure, or mitigate a default by the borrower or obligor; or preserve or prevent the diminution of the value of the security. Work out activities include, but are not limited to: restructuring or renegotiating the terms of the security interest; requiring payment of additional rent or interest; exercising forbearance; requiring or exercising rights pursuant to an assignment of accounts or other amounts owing to an obligor; requiring or exercising rights pursuant to an escrow agreement pertaining to amounts owing to an obligor; providing specific or general financial or other advice, suggestions, counseling, or guidance; and exercising any right or remedy the holder is entitled to by law or under any warranties, covenants, conditions, representations or promises from the borrower. (4) A holder does not participate in the management of a vessel, facility, or underground storage tank facility by making any response or performing any response action or undertaking any cleanup or removal or similar action under the federal "Comprehensive Environmental Response, Compensation, and Liability Act of 1980," Pub.L. 96-510 (42 U.S.C. s.9601 et seq.), the "Spill Compensation and Control Act," P.L.1976, c.141 (C.58:10-23.11 et seq.), P.L.1986, c.102 (C.58:10A-21 et seq.), or any other State or federal environmental law or regulation. "Date of foreclosure" means the date on which the holder obtains legal or equitable title to the vessel or facility pursuant to or incident to foreclosure. "Fair consideration" means the value of the security interest when calculated as an amount equal to or in excess of the sum of the outstanding principal (or comparable amount in the cases of a lease that constitutes a security interest) owed to the holder immediately preceding the acquisition of full title (or possession in the case of property subject to a lease financing transaction) pursuant to foreclosure and its equivalents, plus any unpaid interest, rent or penalties (whether arising before or after foreclosure and its equivalents), plus all reasonable and necessary costs, fees, or other charges incurred by the holder incident to work out, foreclosure and its equivalents, retention, maintaining the business activities of the enterprise, preserving, protecting and preparing the vessel, facility, or underground storage tank facility prior to sale, re-lease of property held pursuant to a lease financing transaction (whether by a new lease financing transaction or substitution of the lessee) or other disposition, plus response costs incurred under applicable federal or State environmental cleanup laws or regulations, or at the direction of an on-scene coordinator, less any amounts received by the holder in connection with any partial disposition of the property, net revenues received as a result of maintaining the business activities of the enterprise, and any amounts paid by the borrower subsequent to the acquisition of full title (or possession in the case of property subject to a lease financing transaction) pursuant to foreclosure and its equivalents. In the case of a holder maintaining indicia of ownership primarily to protect a junior security interest, fair consideration is the value of all outstanding higher priority security interests plus the value of the security interest held by the junior holder, each calculated as set forth in this definition. "Foreclosure" or "foreclosure and its equivalents" means purchase at foreclosure sale; acquisition or assignment of title in lieu of foreclosure; termination of a lease or other repossession; acquisition of a right to title or possession; an agreement in satisfaction of the obligation; or any other form or informal manner (whether pursuant to law or under warranties, covenants, conditions, representations or promises from the borrower) by which the holder acquires title to or possession of the secured property. "Holder" is a person who maintains indicia of ownership primarily to protect a security interest. A holder includes the initial holder (such as a loan originator), any subsequent holder (such as a successor-in-interest or subsequent purchaser of the security interest on the secondary market), a guarantor of an obligation, surety, or any other person who holds ownership indicia primarily to protect a security interest, or a receiver or other person who acts on behalf or for the benefit of a holder. "Indicia of ownership" means evidence of a security interest, evidence of an interest in a security interest, or evidence of an interest in real or personal property securing a loan or other obligation, including any legal or equitable title to real or personal property acquired incident to foreclosure and its equivalents. Evidence of such interests include, but are not limited to, mortgages, deeds of trust, liens, surety bonds and guarantees of obligations, title held pursuant to a lease financing transaction in which the lessor does not select initially the leased property (hereinafter "lease financing transaction"), legal or equitable title obtained pursuant to foreclosure and their equivalents. Evidence of such interests also includes assignments, pledges, or other rights to or other forms of encumbrance against property that are held primarily to protect a security interest. A person is not required to hold title or a security interest in order to maintain indicia of ownership. "Primarily to protect a security interest" means that the holder's indicia of ownership are held primarily for the purpose of securing payment or performance of an obligation but does not include indicia of ownership held primarily for investment purposes, nor ownership indicia held primarily for purposes other than as a protection for a security interest. A holder may have other, secondary reasons for maintaining indicia of ownership, but the primary reasons why any ownership indicia are held shall be as protection for a security interest. "Security interest" means an interest in a vessel or facility created or established for the purpose of securing a loan or other obligation. Security interests include, but are not limited to, mortgages, deeds of trusts, liens, and title pursuant to lease financing transactions. Security interests may also arise from transactions such as sale and leasebacks, conditional sales, installment sales, trusts receipt transactions, certain assignments, factoring agreements, accounts receivable financing arrangements, and consignments, if the transaction creates or establishes an interest in a vessel or facility for the purpose of securing a loan or other obligation. "Underground storage tank" shall have the same meaning as set forth in section 2 of P.L. 1986, c.102 (C.58:10A-22). "Underground storage tank facility" shall mean one or more underground storage tanks. L.1993,c.112,s.1; amended 1997, c.278, s.29. 58:10-23.11g5. Liability for cleanup costs, damages 2. A person who maintains indicia of ownership of a vessel, facility, or underground storage tank facility primarily to protect a security interest in a vessel, facility, or underground storage tank facility and who does not participate in the management of the vessel or facility or underground storage tank facility is not deemed to be an owner or operator of the vessel, facility, or underground storage tank facility, shall not be deemed the discharger or responsible party for a discharge from the vessel, facility, or underground storage tank facility and shall not be liable for cleanup costs or damages resulting from discharges from the vessel or facility pursuant to sections 8, 18, and 22 of P.L.1976, c.141 (C.58:10-23.11g, 58:10-23.11q and 58:10-23.11u), section 2 of P.L.1990, c.75 (C.58:10-23.11u1), or section 8 of P.L.1986, c.102 (C.58:10A-28) except to the extent that liability may still apply to holders after foreclosure as set forth in section 3 of P.L. 1993, c.112 (C.58:10-23.11g6). L.1993,c.112,s.2; amended 1997, c.278, s.30. 58:10-23.11g6. Status and liability of holders after foreclosure 3. The indicia of ownership, held after foreclosure, continue to be maintained primarily as a protection for a security interest provided that the holder did not participate in management prior to foreclosure and that the holder undertakes to sell, re-lease property held pursuant to a lease financing transaction (whether by a new lease financing transaction or substitution of the lessee) or otherwise divest itself of the vessel, facility, or underground storage tank facility in a reasonably expeditious manner in accordance with the means and procedures specified in this section. Such a holder may liquidate, maintain business operations, undertake environmental response actions pursuant to State and federal law, and take measures to preserve, protect or prepare the secured asset prior to sale or other disposition, without losing status as a person who maintains indicia of ownership primarily to protect a security pursuant to section 2 of P.L.1993, c.112 (C.58:10-23.11g5). a. For purposes of establishing that a holder is seeking to sell, re-lease property held pursuant to a new lease financing transaction (whether by a new lease financing transaction or substitution of the lessee), or divest a vessel, facility, or underground storage tank facility in a reasonably expeditious manner, the holder may use whatever commercially reasonable means are relevant or appropriate with respect to the vessel, facility, or underground storage tank facility, or may employ the means specified in this section. b. (1) A holder that outbids, rejects or fails to act upon a written bona fide, firm offer of fair consideration within 90 days of receipt of the offer, and which offer is received at any time after six months following the date of foreclosure, shall not be deemed to be using a commercially reasonable means for the purpose of this section. A "written bona fide, firm offer" means a legally enforceable, commercially reasonable, cash offer solely for the foreclosed vessel, facility, or underground storage tank facility, including all material terms of the transaction, from a ready, willing, and able purchaser who demonstrates to the holder's satisfaction the ability to perform. For purposes of this subsection, the six-month period begins to run from the time that the holder acquires a marketable title, provided that the holder, after the expiration of any redemption or other waiting period provided by law, was acting diligently to acquire marketable title. (2) A holder that outbids, rejects, or fails to act upon an offer of fair consideration for the vessel, facility, or underground storage tank facility within the 90-day period, establishes that the ownership indicia in the secured property are not held primarily to protect the security interest, unless the holder is required, in order to avoid liability under federal or State law, to make a higher bid, to obtain a higher offer, or to seek or obtain an offer in a different manner. c. A holder establishes that it is proceeding in a commercially reasonable manner after foreclosure by, within 12 months following foreclosure, listing the vessel, facility, or underground storage tank facility with a broker, dealer, or agent who deals with the type of property in question, or by advertising the vessel, facility, or underground storage tank facility as being for sale or disposition on at least a monthly basis in either a real estate publication or a trade or other publication suitable for the vessel, facility, or underground storage tank facility in question, or a newspaper of general circulation (defined as one with a circulation over 10,000, or one suitable under any applicable federal, State, or local rules of court for publication required by court order or rules of civil procedure) covering the area where the property is located. For purposes of this subsection, the 12-month period begins to run from the time that the holder acquires marketable title, provided that the holder, after the expiration of any redemption or other waiting period provided by law, was acting diligently to acquire marketable title. d. A holder shall sell, re-lease the property held pursuant to a new lease financing transaction, or otherwise divest such vessel, facility, or underground storage tank facility in a reasonably expeditious manner, but not later than five years after the date of foreclosure, except that a holder may continue to hold the property for a time period longer than five years without losing status as a person who maintains indicia of ownership primarily to protect a security interest if (1) the holder has made a good faith effort to sell, re-lease or otherwise divest itself of the property using commercially reasonable means or other procedures prescribed by this act; (2) the holder has obtained any approvals required pursuant to applicable federal or State banking or other lending laws to continue its possession of the property; and (3) the holder has exercised reasonable custodial care to prevent or mitigate any new discharges from the vessel, facility, or underground storage tank facility that could substantially diminish the market value of the property. e. (1) The exemption granted to holders pursuant to this section shall not apply to the liability for any new discharge from the vessel, facility, or underground storage tank facility, occurring after the date of foreclosure, that is caused by acts or omissions of the holder which can be shown, based on a preponderance of the evidence, to have been negligent. In the event a property has both preexisting and new discharges, the liability, if any, allocable to the holder pursuant to this subsection shall be limited to those cleanup costs or damages that relate directly to the new discharge. In the event there is a substantial commingling of a new discharge with a preexisting discharge, the liability, if any, allocable to the holder pursuant to this subsection shall be limited to the cleanup costs or damages in excess of those cleanup costs or damages relating to the preexisting discharge. In order to establish that a discharge occurred or began prior to the date of foreclosure, a holder may perform, but shall not be required to perform, an environmental audit, in accordance with any applicable Department of Environmental Protection regulations and guidelines, to identify such discharges at the vessel, facility, or underground storage tank facility. Upon receipt of a complete audit from the holder, the Department of Environmental Protection shall, within 90 days of its receipt of the audit, review the audit and transmit its findings to the holder. The Department of Environmental Protection may charge reasonable fees and adopt any additional regulations necessary to provide guidelines for the submission and review of such audits. (2) Nothing in this subsection shall be deemed to impose liability for a new discharge from the vessel, facility, or underground storage tank facility that is authorized pursuant to a federal or State permit or cleanup procedure. (3) The exemption granted to holders of indicia of ownership to protect a security interest shall not apply to liability, if any, pursuant to applicable law and regulation, for arranging for the offsite disposal or treatment of a hazardous substance or by accepting for transportation and disposing of a hazardous substance at an offsite facility selected by the holder. f. (1) A holder who acquires an underground storage tank facility continues to hold the exemption from liability for the underground storage tank facility granted to holders pursuant to this section if there is an operator of the underground storage tank facility, other than the holder, who is in control of the underground storage tank facility or has responsibility for compliance with applicable federal and State requirements. (2) If an operator does not exist, a holder continues to maintain the exemption from liability for the underground storage tank facility granted to holders pursuant to this section if the holder: ( i) empties all underground storage tank facilities within 60 days after foreclosure or within 60 days after the effective date of P.L.1997, c.278 (C.58:10B-1.1 et al.), whichever is later, so that no more than one inch of residue, or .3 percent by weight of the total capacity of the underground storage tank facility remains in the underground storage tank facility, leaves vent lines open and functioning, and caps and secures all other lines, pumps, manways, and ancillary equipment; (ii) empties those underground storage tank facilities that are discovered after foreclosure within 60 days of discovery or within 60 days of the effective date of P.L.1997, c.278, whichever is later, so that no more than one inch of residue, or .3 percent by weight of the total capacity of the underground storage tank facility remains in the system, leaves vent lines open and functioning, and caps and secures all other lines, pumps, manways, and ancillary equipment; and (iii) permanently closes the underground storage tank facility pursuant to the provisions of P.L.1986, c.102 (C.58:10A-21 et seq.) or temporarily closes the underground storage tank facility. g. An underground storage tank facility may be temporarily closed until a subsequent purchaser has acquired marketable title to the underground storage tank facility. When a subsequent purchaser acquires marketable title to the facility, the purchaser shall operate the underground storage tank facility in accordance with applicable State and federal laws or shall permanently close or remove the underground storage tank facility in accordance with the provisions of P.L.1986, c.102 (C.58:10A-21 et seq.). For the purposes of this section, an underground storage tank facility shall be considered temporarily closed if a holder continues to operate and maintain corrosion protection and reports suspected releases to the Department of Environmental Protection. If the underground storage tank facility has not been upgraded to comply with the provisions of P.L.1986, c.102 and the applicable federal law or does not comply with the standards for new underground storage tanks pursuant to State and federal law except for spill and overfill protection, and is temporarily closed for 12 months or more following foreclosure, the holder shall conduct a site investigation of the underground storage tank facility in accordance with rules and regulations adopted by the department and shall be required to take any emergency response actions necessary to prevent, contain or mitigate a continuing or new discharge that poses an immediate threat to the environment or to the public health, safety or welfare. L.1993,c.112,s.3; amended 1997, c.278, s.31; 2001, c.145. 58:10-23.11g7. Departmental rights retained; violations, penalties 4. a. Nothing in sections 1 through 5 of P.L.1993, c.112 (C.58:10-23.11g4 through 58:10-23.11g8) shall be deemed to prohibit or limit the rights of the Department of Environmental Protection to clean up a property or to obtain a lien on the property of a discharger or holder in order to recover cleanup costs pursuant to section 7 of P.L.1976, c.141 (C.58:10-23.11f). Any recovery of cleanup costs from a holder pursuant to a lien obtained by the Department of Environmental Protection shall be limited to the actual financial benefit conferred on such holder by a cleanup or removal action, and shall not exceed the amount realized by the holder on the sale or other disposition of the property. b. Nothing in sections 1 through 5 of P.L. 1993, c. 112 (C.58:10-23.11g4 through 58:10-23.11g8) shall be deemed to prohibit or limit the rights of the Department of Environmental Protection, pursuant to section 7 of P.L.1976, c.141 (C.58:10-23.11f), to direct the holder to take any emergency response actions, including closure of the vessel, facility, or underground storage tank facility, necessary to prevent, contain or mitigate a continuing or new discharge that poses an immediate threat to the environment or to the public health, safety or welfare. c. (1) If a holder forecloses on a vessel, facility, or underground storage tank facility at which it has actual knowledge a discharge occurred or began prior to the date of foreclosure, the holder shall, within 30 days of the date of foreclosure, notify the Department of Environmental Protection that foreclosure has occurred. Any person who fails to give notice required pursuant to this subsection or knowingly gives or causes to be given false information in any such report, shall be subject to a civil penalty not to exceed $25,000. A court, in determining the amount of the penalty to be imposed, shall consider, among other relevant factors, the amount of any damages caused by the failure to give timely notice and whether the failure to notify was inadvertent or intentional. (2) The holder shall immediately notify the Department of Environmental Protection of any new discharge, of which it has actual knowledge, occurring after the date of foreclosure, from the vessel, facility, or underground storage tank facility. Any person who fails to give notice required pursuant to this subsection or knowingly gives or causes to be given any false information in any such report, shall be subject to a civil penalty not to exceed $10,000 per day for each violation. A court, in determining the amount of the penalty to be imposed and the appropriateness of imposing multiple penalties for a continuing offense, shall consider, among other relevant factors, the amount of any damages caused by the failure to give timely notice and whether the failure to notify was inadvertent or intentional. (3) Any penalty incurred under this section may be recovered with costs in a summary proceeding pursuant to "the penalty enforcement law," N.J.S.2A:58-1 et seq., in the Superior Court or a municipal court. Failure to give any required notice pursuant to this subsection shall not cause the holder to lose its status as a person who maintains indicia of ownership primarily to protect a security interest. L.1993,c.112,s.4; amended 1997, c.278, s.32. 58:10-23.11g8. Environmental inspection not required 5. Nothing in sections 2 through 4 of this act shall be construed to require a holder of a security interest to conduct or require an environmental inspection and the liability of the holder of the security interest pursuant to P.L.1976, c.141 (C.58:10-23.11 et seq.) shall not be based on or affected by a failure to conduct an environmental inspection. L.1993,c.112,s.5. 58:10-23.11g8a. Compliance not required; loss of exemption 33. A holder of an interest in an underground storage tank shall not be required to comply with the provisions of P.L.1986, c.102 (C.58:10A-21 et seq.) unless the holder loses the exemption under P.L.1993, c.112 (C.58:10-23.11g4 et seq.). L.1997,c.278,s.33. 58:10-23.11g9. Obligations of trusts, estates 6. In the event of the discharge of a hazardous substance from a vessel, facility, or underground storage tank facility, which vessel, facility , or underground storage tank facility is all or part of a trust, receivership estate, guardianship estate or estate of a deceased person, only the assets of the trust or estate, or assets of any discharger other than the fiduciary of such trust or estate, shall be subject to the obligation to pay for the cleanup of the discharge as set forth in the "Spill Compensation and Control Act," P.L.1976, c.141 (C.58:10-23.11 et seq.) or subject to any obligations imposed pursuant to P.L.1986, c.102 (C.58:10A-21 et seq.). L.1993,c.112,s.6; amended 1997, c.278, s.45. 58:10-23.11g10. Discharges on certain public property; definitions 1. a. As used in this section: "Governmental unit" means the State, a municipality, county, or other political subdivision of the State, or any agency thereof authorized to administer, protect and maintain lands or structures for recreation or conservation purposes; "Recreation or conservation purposes" means the use of lands for parks, natural areas, ecological and biological study, historic areas, historic buildings or structures, forests, trails, camping, fishing, water reserves, wildlife preserves, hunting, boating, winter sports and similar uses for either public outdoor recreation or conservation of natural resources, or both. b. A governmental unit that holds an easement interest in any real property for recreation or conservation purposes on which there has been a discharge of a hazardous substance, shall not be liable pursuant to P.L.1976, c.141 (C.58:10-23.11 et seq.), any other law, or common law, for cleanup and removal costs, or for any direct or indirect damages, due to the discharge of a hazardous substance on the property. The provisions of this section shall not apply to a governmental unit if that entity has caused or contributed to the discharge of a hazardous substance on the property. L.1995,c.270,s.1. 58:10-23.11g11. Immunity from liability for certain discharges 6. Any person who has a defense to liability pursuant to paragraphs (2) and (5) of subsection d. of section 8 of P.L.1976, c.141 (C.58:10-23.11g) shall not be liable for the payment of compensation for damage to, or loss of, natural resources due to the discharge of a hazardous substance. L.2001,c.154,s.6. 58:10-23.11g12 Exemption from liability for cleanup and removal costs, certain; limitations. 2. a. (1) Notwithstanding the provisions of section 8 of P.L.1976, c.141 (C.58:10-23.11g), any rule or regulation adopted pursuant thereto, or any other law to the contrary, any person who discharges, or is in any way responsible for a discharged hazardous substance, at a site included on the National Priorities List pursuant to the "Comprehensive Environmental Response, Compensation and Liability Act of 1980," 42 U.S.C. s.9601 et seq., where the total amount of material containing hazardous substances discharged by that person at the site is in an amount less than 110 gallons of liquid material or less than 200 pounds of solid material, shall not be liable for cleanup and removal costs or for the remediation of the site. (2) The liability protection provided in paragraph (1) of this subsection shall not apply: (a) if the Commissioner of Environmental Protection determines, in writing, that the discharged hazardous substance contributed significantly, or could contribute significantly, to the cost of the remediation or the cleanup and removal; (b) if the person who discharges, or is in any way responsible for a discharged hazardous substance, impedes the performance of the cleanup at the site or fails to comply with a request for information issued by the department pursuant to P.L.1976, c.141 (C.58:10-23.11 et seq.); or (c) if the person has been convicted of a criminal offense for the conduct to which the liability protection would otherwise apply. (3) In an action for contribution brought pursuant to paragraph (2) of subsection a. of section 7 of P.L.1976, c.141 (C.58:10-23.11f), the contribution plaintiff shall have the burden of proof to demonstrate that the person does not meet the conditions for the protection from liability as provided in paragraph (1) of this subsection. b. (1) Notwithstanding the provisions of section 8 of P.L.1976, c.141 (C.58:10-23.11g), any rule or regulation adopted pursuant thereto, or any other law to the contrary, any person who discharges, or is in any way responsible for a discharged hazardous substance, at a site included on the National Priorities List pursuant to the "Comprehensive Environmental Response, Compensation and Liability Act of 1980," 42 U.S.C. s.9601 et seq., shall not be liable for cleanup and removal costs or for the costs of remediation of the site if the person can demonstrate: (a) the discharged hazardous substance consisted solely of municipal solid waste; and (b) (i) the discharged hazardous substance originated from a residence, (ii) the discharged hazardous substance originated from a business entity that, during the three years preceding the discharge, employed an average of not more than 100 full-time workers, or the equivalent, and is a small business concern as defined in the federal "Small Business Act," 15 U.S.C. s.631 et seq., from which all of the municipal solid waste attributable to the entity at the site was generated, or (iii) the municipal solid waste originated from an organization described in section 501(c)(3) of the federal Internal Revenue Code, 26 U.S.C. s.501(c)(3), that is exempt from taxation pursuant to section 501(a) of the federal Internal Revenue Code, 26 U.S.C. s.501(a), and during the taxable year prior to discharge, the organization employed not more than 100 full-time workers, or the equivalent, at the location from which the municipal solid waste originated. (2) The liability protection provided in paragraph (1) of this subsection shall not apply: (a) if the Commissioner of Environmental Protection determines, in writing, that the municipal solid waste contributed significantly, or could contribute significantly, to the cost of the remediation or the cleanup and removal; (b) if the person who discharged, or is in any way responsible for a discharged hazardous substance, impedes the performance of the cleanup at the site or fails to comply with a request for information issued by the department pursuant to P.L.1976, c.141 (C.58:10-23.11 et seq.); or (c) if the person has been convicted of a criminal offense for the conduct to which the liability protection would otherwise apply. (3) In an action for contribution brought pursuant to paragraph (2) of subsection a. of section 7 of P.L.1976, c.141 (C.58:10-23.11f), the contribution plaintiff shall have the burden of proof to demonstrate that the person does not meet the conditions for protection from liability as provided in paragraph (1) of this subsection. c. Any person who brings a contribution action pursuant to paragraph (2) of subsection a. of section 7 of P.L.1976, c.141 (C.58:10-23.11f) after the effective date of this section shall be liable to the defendant for all reasonable costs of defending the action, including all reasonable attorney's fees and expert witness fees, if the defendant is not liable for contribution because of a protection from liability as provided in this section. d. As used in this section, "municipal solid waste" means solid waste of the type generated by a household or solid waste generated by a commercial, industrial, or institutional entity that is essentially the same as waste generated by a household, is collected and disposed of with other municipal waste as part of the normal municipal solid waste collection service, and contains a relative quantity of hazardous substances contained in waste generated by a typical single family household. Municipal solid waste may include, but need not be limited to, food and yard waste, paper, clothing, appliances, consumer product packaging, disposable diapers, office supplies, cosmetics, glass and metal food containers, elementary or secondary school science laboratory waste, and household hazardous waste. L.2005,c.43,s.2.

This is the verbatim text of N.J.S.A. 58:10-23.11g, retrieved from the New Jersey Legislature's public statute corpus. Statutes are amended periodically — for the most current version, check the external source link above. Kyzer is not a law firm and this page is not legal advice.