SPONSOR:

Rep. Heffernan

HOUSE OF REPRESENTATIVES

147th GENERAL ASSEMBLY

HOUSE AMENDMENT NO. 2

TO

HOUSE BILL NO. 95

AMEND House Bill No. 95 by deleting line 7 in its entirety and substituting in lieu thereof the following:

(a) Pursuant to the provisions of this section, all reasonable costs related to any remedy undertaken by the State for which a

FURTHER AMEND House Bill No. 95 by deleting line 9 in its entirety and substituting in lieu thereof the following:

upon the real property where such remedy takes place and which belongs to such liable person.

FURTHER AMEND House Bill No. 95 at the end of line 10 by adding the following:

upon which a remedy has been undertaken by the State and which is owned by a person liable under this chapter.

FURTHER AMEND House Bill No. 95, line 12 by deleting the number “21” and substituting in lieu thereof the number “30”.

FURTHER AMEND House Bill No. 95 by deleting line 13 in its entirety and by substituting in lieu thereof the following:

means of certified or registered mail, to the last known address of all record owners of the property and to all persons holding liens or security interests of record. The notice of lien shall state the amount of and basis for the lien;

FURTHER AMEND House Bill No. 95 by deleting line 14 in its entirety and substituting in lieu thereof the following:

(2) No less than 30 days prior to the effective date of the lien, a notice of lien is filed by the Secretary with the Office of the Recorder of Deeds in the county in

FURTHER AMEND House Bill No. 95 by deleting line 19 in its entirety and substituting in lieu thereof the following:

title. This section shall not preclude any equitable claims by an aggrieved person in the Court of Chancery to contest the imposition of a lien, including actions to quiet title. In any action seeking to contest or enforce a lien, the burden of establishing entitlement to such lien shall be consistent with the burden of proof applicable in an action brought by the Secretary pursuant to this chapter.

FURTHER AMEND House Bill No. 95 by striking lines 20 and 21 in their entirety and substituting in lieu thereof the following:

(d) A lien created under this section has priority over all other liens and encumbrances perfected after the date that the lien recorded pursuant to this section is perfected, except for liens and encumbrances which relate back to before the perfection of the lien recorded pursuant to this section.

FURTHER AMEND House Bill No. 95 at the end of line 22 by adding the following:

The Secretary shall, on written request, make available the documentation upon which such lien is based within 10 days of such request.

FURTHER AMEND House Bill No. 95 by deleting line 30 in its entirety and substituting in lieu thereof the following:

by the same liable person or persons as the property where the costs are incurred.

FURTHER AMEND House Bill No. 95 by deleting line 34 in its entirety and substituting in lieu thereof the following:

petition should be granted. Notice of the hearing shall be provided to the Secretary, the record owner or owners of the real

FURTHER AMEND House Bill No. 95 by adding the following new subsection (i) after line 35 and before line 36:

(i) A person whose interest is substantially affected by any action of the Secretary taken pursuant to this section, while contesting the imposition of such environmental lien in accordance with the procedures set forth herein, shall have the right to discharge said lien upon payment into the Court of Chancery or entry of security as follows:

(1) Cash deposit. -- Any environmental lien filed hereunder shall, upon petition of the owner or any party in interest, be discharged as a lien against the property whenever a sum equal to the amount of the claim shall have been deposited with the Court in said proceedings for application to the payment of the amount finally determined to be due. Said petition shall include an affidavit by the owner or party in interest setting forth which parts of the claim filed hereunder are disputed and which parts are not disputed. The non-disputed part of the claim shall be paid to the Secretary before the lien against the property is discharged. If it is finally determined by the Court that the disputed portion of the claim has been grossly overstated by the affiant, the Court may, in its discretion, award damages to the Secretary against the affiant in an amount up to twice the figure stated by the affiant to be disputed.

(2) Refund of excess. -- Any excess of funds paid into Court as aforesaid, over the amount of the claim or claims determined and paid therefrom, shall be refunded to the owner or party depositing same upon application.

(3) Security in lieu of cash. -- In lieu of the deposit of any such sum or sums in cash, approved security may be entered in such proceedings in an amount which the Court shall approve, which, however, shall in no event be less than the full amount of such required deposit; and the entry of such security shall entitle the owner to have such liens discharged to the same effect as though the required sums have been deposited in Court as aforesaid.

(4) Authority of Court. -- The Court, upon petition filed by any party, and after notice and hearing, may upon cause shown:

(i) Require the increase or decrease of any deposit or security;

(ii) Strike off security improperly filed;

(iii) Permit the substitution of security and enter an exoneration of security already given.

FURTHER AMEND House Bill No. 95 by deleting line 42 in its entirety and substituting in lieu thereof the following:

(a) Pursuant to the provisions of this section, all reasonable costs expended by the State related to investigating a release or

FURTHER AMEND House Bill No. 95 by deleting line 48 in its entirety and substituting in lieu thereof the following:

shall constitute a lien in favor of the State upon the real property where such activities take place and which belongs to such liable party.

FURTHER AMEND House Bill No. 95 at the end of line 49 by adding the following:

upon which any corrective action has been undertaken by the State and which is owned by a person liable under this chapter

FURTHER AMEND House Bill No. 95 at line 51 by deleting the number “21” and substituting the number “30”.

FURTHER AMEND House Bill No. 95 by deleting line 52 in its entirety and substituting in lieu thereof the following:

means of certified or registered mail, to the last known address of all record owners of the property and to all persons holding liens or security interests of record. The notice of lien shall state the amount of and basis for the lien;

FURTHER AMEND House Bill No. 95 by deleting line 53 in its entirety and substituting in lieu thereof the following:

(2) No less than 30 days prior to the effective date of the lien, a notice of lien is filed by the Secretary with the Office of the Recorder of Deeds in the county in

FURTHER AMEND House Bill No. 95 by deleting line 59 in its entirety and substituting in lieu thereof the following:

title. This section shall not preclude any equitable claims by an aggrieved person in the Court of Chancery to contest the imposition of a lien, including actions to quiet title. In any action seeking to contest or enforce a lien, the burden of establishing entitlement to such lien shall be consistent with the burden of proof applicable in an action brought by the Secretary pursuant to this chapter.

FURTHER AMEND House Bill No. 95 by striking lines 60 and 61 in their entirety and substituting in lieu thereof the following:

(d) A lien created under this section has priority over all other liens and encumbrances perfected after the date that the lien recorded pursuant to this section is perfected, except for liens and encumbrances which relate back to before the perfection of the lien recorded pursuant to this section.

FURTHER AMEND House Bill No. 95 at the end of line 62 by adding the following:

The Secretary shall, on written request, make available the documentation upon which such lien is based within 10 days of such request.

FURTHER AMEND House Bill No. 95 by deleting line 70 in its entirety and substituting in lieu thereof the following:

by the same liable person or persons as the property where the costs are incurred.

FURTHER AMEND House Bill No. 95 by deleting line 74 in its entirety and substituting in lieu thereof the following:

petition should be granted. Notice of the hearing shall be provided to the Secretary, the record owner or owners of the real

FURTHER AMEND House Bill No. 95 by adding the following new subsection (i) after line 75 and before line 76:

(i) A person whose interest is substantially affected by any action of the Secretary taken pursuant to this section, while contesting the imposition of such environmental lien in accordance with the procedures set forth herein, shall have the right to discharge said lien upon payment into the Court of Chancery or entry of security as follows:

(1) Cash deposit. -- Any environmental lien filed hereunder shall, upon petition of the owner or any party in interest, be discharged as a lien against the property whenever a sum equal to the amount of the claim shall have been deposited with the Court in said proceedings for application to the payment of the amount finally determined to be due. Said petition shall include an affidavit by the owner or party in interest setting forth which parts of the claim filed hereunder are disputed and which parts are not disputed. The non-disputed part of the claim shall be paid to the Secretary before the lien against the property is discharged. If it is finally determined by the Court that the disputed portion of the claim has been grossly overstated by the affiant, the Court may, in its discretion, award damages to the Secretary against the affiant in an amount up to twice the figure stated by the affiant to be disputed.

(2) Refund of excess. -- Any excess of funds paid into Court as aforesaid, over the amount of the claim or claims determined and paid therefrom, shall be refunded to the owner or party depositing same upon application.

(3) Security in lieu of cash. -- In lieu of the deposit of any such sum or sums in cash, approved security may be entered in such proceedings in an amount which the Court shall approve, which, however, shall in no event be less than the full amount of such required deposit; and the entry of such security shall entitle the owner to have such liens discharged to the same effect as though the required sums have been deposited in Court as aforesaid.

(4) Authority of Court. -- The Court, upon petition filed by any party, and after notice and hearing, may upon cause shown:

(i) Require the increase or decrease of any deposit or security;

(ii) Strike off security improperly filed;

(iii) Permit the substitution of security and enter an exoneration of security already given.

FURTHER AMEND House Bill No. 95 at line 76 by redesignating present subsection “(i)” as subsection “(j)”.

FURTHER AMEND House Bill No. 95 by deleting line 81 in its entirety and substituting in lieu thereof the following:

(a) Pursuant to the provisions of this section, all reasonable costs expended by the State related to investigating a release or

FURTHER AMEND House Bill No. 95 by deleting line 88 in its entirety and substituting in lieu thereof the following:

place and which belongs to such liable person.

FURTHER AMEND House Bill No. 95 at the end of line 89 by adding the following:

upon which funds have been expended by the State pursuant to § 7406A and which is owned by a person liable under this chapter

FURTHER AMEND House Bill No. 95 at line 91 by deleting the number “21” and substituting in lieu thereof the number “30”.

FURTHER AMEND House Bill No. 95 by deleting line 92 in its entirety and substituting in lieu thereof the following:

means of certified or registered mail, to the last known address of all record owners of the property and to all persons holding liens or security interests of record. The notice of lien shall state the amount of and basis for the lien.

FURTHER AMEND House Bill No. 95 by deleting line 99 in its entirety and substituting in lieu thereof the following:

title. This section shall not preclude any equitable claims by an aggrieved person in the Court of Chancery to contest the imposition of a lien, including actions to quiet title. In any action seeking to contest or enforce a lien, the burden of establishing entitlement to such lien shall be consistent with the burden of proof applicable in an action brought by the Secretary pursuant to this chapter.

FURTHER AMEND House Bill No. 95 by striking lines 100 and 101 in their entirety and substituting in lieu thereof the following:

(d) A lien created under this section has priority over all other liens and encumbrances perfected after the date that the lien recorded pursuant to this section is perfected, except for liens and encumbrances which relate back to before the perfection of the lien recorded pursuant to this section.

FURTHER AMEND House Bill No. 95 at the end of line 102 by adding the following:

The Secretary shall, on written request, make available the documentation upon which such lien is based within 10 days of such request.

FURTHER AMEND House Bill No. 95 by deleting line 110 in its entirety and substituting in lieu thereof the following:

by the same liable person or persons as the property where the costs are incurred.

FURTHER AMEND House Bill No. 95 by deleting line 114 in its entirety and substituting in lieu thereof the following:

petition should be granted. Notice of the hearing shall be provided to the Secretary, the record owner or owners of the real

FURTHER AMEND House Bill No. 95 by adding the following new subsection (i) after line 115 and before line 116:

(i) A person whose interest is substantially affected by any action of the Secretary taken pursuant to this section, while contesting the imposition of such environmental lien in accordance with the procedures set forth herein, shall have the right to discharge said lien upon payment into the Court of Chancery or entry of security as follows:

(1) Cash deposit. -- Any environmental lien filed hereunder shall, upon petition of the owner or any party in interest, be discharged as a lien against the property whenever a sum equal to the amount of the claim shall have been deposited with the Court in said proceedings for application to the payment of the amount finally determined to be due. Said petition shall include an affidavit by the owner or party in interest setting forth which parts of the claim filed hereunder are disputed and which parts are not disputed. The non-disputed part of the claim shall be paid to the Secretary before the lien against the property is discharged. If it is finally determined by the Court that the disputed portion of the claim has been grossly overstated by the affiant, the Court may, in its discretion, award damages to the Secretary against the affiant in an amount up to twice the figure stated by the affiant to be disputed.

(2) Refund of excess. -- Any excess of funds paid into Court as aforesaid, over the amount of the claim or claims determined and paid therefrom, shall be refunded to the owner or party depositing same upon application.

(3) Security in lieu of cash. -- In lieu of the deposit of any such sum or sums in cash, approved security may be entered in such proceedings in an amount which the Court shall approve, which, however, shall in no event be less than the full amount of such required deposit; and the entry of such security shall entitle the owner to have such liens discharged to the same effect as though the required sums have been deposited in Court as aforesaid.

(4) Authority of Court. -- The Court, upon petition filed by any party, and after notice and hearing, may upon cause shown:

(i) Require the increase or decrease of any deposit or security;

(ii) Strike off security improperly filed;

(iii) Permit the substitution of security and enter an exoneration of security already given.

FURTHER AMEND House Bill No. 95 at line 116 by redesignating present subsection “(i)” as subsection “(j)”.

FURTHER AMEND House Bill No. 95 at the end of line 120 by adding the following:

Section 5. The provisions of this Act shall not apply to, or authorize the filing of a lien against, any real property acquired by a lender, or an affiliate of a lender, prior to the effective date of this Act; provided, however, that the lender, or affiliate of the lender, is not a liable person under Title 7.

SYNOPSIS

This Amendment makes several changes to the Bill as follows:

clarifies that costs incurred by the State related to the remediation of hazardous releases must be reasonable and consistent with the liability and cost recovery provisions of the underlying statutes, in order to constitute a lien in favor of the State with respect to the real property where the remediation takes place;

clarifies that an environmental lien attaches to real property owned by a liable person;

changes the minimum time period for DNREC to give a property owner of record notice of a lien from 21 to 30 days before its effective date, provides that persons holding liens or security interests of record also receive notice of a lien, provides that the lien must be recorded with the Office of Recorder of Deeds no less than 30 days before its effective date, and requires that the notice of lien include the amount of and basis for the lien;

clarifies that the provisions of this Act do not preclude any equitable claims by an aggrieved person in the Court of Chancery, including actions to quiet title, and provides that in an action to contest or enforce a lien, the burden of establishing entitlement to the lien shall be consistent with the burden of proof applicable in an action brought by DNREC pursuant to the requirements of the applicable chapter;

provides that, within 10 days of a written request, DNREC shall make available the documentation upon which the lien is based;

adds a provision whereby an owner or other substantially affected party may petition the Court of Chancery to have a lien discharged upon payment of a cash deposit or surety bond in an amount at least equal to the amount of the lien; and

provides that this Act shall not apply to, or authorize the filing of a lien against, any real property acquired by a lender, or an affiliate of a lender, prior to the Act’s effective date unless the lender or its affiliate is a liable person under Title7 of the Delaware Code.