Potential Environmental Legislative Amendments that Will Affect Future Site Development in the State and Facilities under the State’s HSCA, Tanks and Oil Pollution Programs

March 14, 2013

Publication| Real Estate Services| Environmental

The State of Delaware Department of Natural Resources and Environmental Control (“DNREC”) is considering several legislative amendments that are of potential significance for future site development in the State, as well as for facilities that fall under DNREC’s Hazardous Substance Cleanup (“HSCA”), Tanks and Oil Pollution programs. While certain of these amendments are still under review by the State administration, we expect that some or all of them will be proposed. We also expect DNREC to press for adoption of its legislative proposals prior to the end of the State’s legislative session on June 30.

A brief synopsis of each the contemplated statutory amendments is provided below.

1) Environmental Lien statutory amendments: DNREC is considering adoption of a lien statute for environmental cost recovery under the State’s hazardous substances and UST/AST programs. If enacted, the legislation would provide for a lien upon real property for all costs related to any remedy undertaken by the State under those programs. The lien will be on the real property at which the remedy occurred, and will take priority over all other liens and encumbrances perfected after the lien is recorded. The lien will continue until full discharge and satisfaction, with no express time period for the State to take action to recover its costs. Under the proposed statutory amendment, if DNREC determines that the funds projected to be available to satisfy the lien are insufficient to recover its costs, it may petition the State’s Chancery Court for an additional lien or liens upon other real property in Delaware owned by the same person or persons as the property where the costs are incurred. DNREC has considered a “super-priority” lien, but does not appear to be pursuing that alternative at this point in time. In the case of the Tanks programs, certain agricultural, residential and non-commercial tanks are exempted from the proposed amendments.

2) HSCA Golf Course and Orchard regulation statutory amendment: DNREC is considering legislation that would regulate all sites that have historically operated as golf courses or orchards, and would subject these facilities to DNREC’s HSCA program. If adopted, the legislation will require that any person seeking a change in land use for golf courses/orchards must enter into an agreement with DNREC and must conduct a remedy at the facility. Although the statute currently provides that facility owners and operators are not subject to liability for the “appropriate application” of fertilizer and pesticide, the proposed amendments assume that the residual remnants of such applications pose an unacceptable risk when the land use changes to one involving more prevalent and sustained exposure to humans.

3) Underground Storage Tanks statutory amendments: DNREC is considering a comprehensive set of amendments for its UST program relating to the authority to assume control of a release, the liability of responsible parties for a release and contribution, financial responsibility and property assessment. Of note, the contemplated legislation: 
    ~ establishes that the liability of responsible parties is joint and several, and
        that responsible parties may seek contribution from any other responsible
    ~ shifts the burden to potentially responsible parties to demonstrate whether
        their activities resulted in harm; 
    ~ increases financial responsibility obligations; and 
    ~ requires any person taking ownership of a facility or UST to complete
        a “Change in Ownership Assessment” prior to the transfer, which results are
        to be provided to DNREC. This assessment is to measure for the presence
        of a release, and its scope and testing will be based on the nature of the
        stored regulated substance, the type of backfill, the depth to groundwater
        and other factors appropriate for identifying the presence and scope of a
The proposed legislation allows the remedial enactments (i.e., joint and several liability and burden shift) to be applied retroactively to releases of regulated substances occurring on or after July 12, 1985.

4) Oil Pollution Act statutory amendments: DNREC has proposed several amendments to this statute, including eliminating the current monetary cap for liability. The current statute caps damages for facilities at $50,000,000 and for ships at $30,000,000, except when the incident is caused by gross negligence or willful misconduct within the privity or knowledge of the owner or operator; when the incident is caused by a gross or willful violation by the owner or operator of applicable safety, construction or operating standards or regulations of the State or when the owner or operator fails or refuses to provide a certificate of financial responsibility. These amendments have been introduced in the General Assembly as House Bill #32.

If you would like further information, or desire copies of any of the contemplated statutory amendments, please contact Robert Whetzel (whetzel@rlf.com) or Todd Coomes (coomes@rlf.com).

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