Stormwater Fees Drawing the Ire of Citizens and Businesses State-Wide

By: Paul Bruder, Esq.

As more and more communities begin charging property owners a stormwater fee (many are calling it a “rain tax”), those impacted by the fee are speaking out in opposition. Whether through social media posts such as Facebook groups, through letters to local political representatives, or attending public meetings, citizens are expressing their skepticism and outright anger with respect to the motivation, usefulness and amount of the various stormwater fees that are being assessed throughout the Commonwealth.

The highest visibility of such fees takes place within the Chesapeake Bay watershed, for which state and federal agencies and private groups have spent many years formulating and pursuing a cleanup strategy to reduce the flow of nutrients such as nitrogen, phosphorous and sediment from local waterways. Pennsylvania is largest contributor of fresh water to the Chesapeake Bay, and by far the largest contributor of nutrients, which promote growth of algae blooms in the Bay, robbing the Bay of valuable oxygen and sunlight which inhibits and reduces sensitive habitats for shellfish and other aquatic life once teeming in the Bay.

Local municipalities which contain urbanized areas and separate storm sewer systems are required to meet certain pollution reduction requirements through their stormwater management permits, known as MS4 permits. In order to better manage stormwater in a way that allows municipalities to reduce the amount of nutrients being discharged local waterways, and ultimately the Chesapeake Bay, funding is necessary to make system improvements or develop “best management practices” that accomplish these nutrient reduction goals. Of course, municipal projects such as these cost money, and with budgets already stretched thin, stormwater fees are a way for municipalities to fund these programs.

In the typical circumstance, the fees are assessed to property owners based upon the amount of impermeable or impervious surfaces (driveways, parking lots, rooftops) that exist on an individual property. Some municipalities, or municipal authorities which encompass multiple municipalities (such as the Wyoming Valley Sanitary Authority), impose minimum fees for each category of residential, commercial, and agricultural properties, and then additional fees based upon the amount of impervious surface, if any. Different municipal entities are calculating fees in different ways; however, the end result is the same – an additional financial burden being placed upon local property owners to help fund a mandate from the federal government.

One common argument is that this fee is simply a new tax in disguise, and many people are angered by the idea of new municipal taxes. However, the major difference is that the fee is actually more far-reaching than a tax in that typically tax-exempt properties, such as churches and schools, are not exempt from the stormwater fee. While this may be a good thing for those who are not tax-exempt in that they feel that tax-exempt property owners are sharing the load, the downside is that many of these tax-exempt entities are faced with excessively large stormwater fee obligations due to the size of their impervious surfaces, particularly schools and religious institutions that have large impervious parking areas.

Challenges to these fees are popping up all over the Commonwealth as well, in the form of lawsuits and intervention from politicians. Recently, US Representative Dan Meuser, who represents many of the thirty-two (32) local municipalities that are members of the WVSA, has called for a suspension of the fee until there is a better understanding of them and how they might be reduced. Meuser claims that many of his constituents were “blind-sided” by the fee, despite the amount of publicity stormwater fees have been receiving state-wide over the last several years. Nonetheless, the fact remains that challenges to these fees are becoming as common as the fees themselves. Only time will tell how these matters will be played out in the court system or through the political process.

If you have any questions about stormwater fees in Pennsylvania, please call Paul Bruder at 717-232-5000, or email at pjbruder@mette.com.

Drinking Water

PFAS Takes Center Stage in Pennsylvania

Drinking Water

By: Paul Bruder, Esq.

Chemicals historically used in products such as non-stick cookware, flame retardant fabrics and fire-fighting foam, although no longer used in the United States, nonetheless continue to show up in public and private water systems across the United States, as well as in soil, because these chemicals – individually PFOA (Perfluorooctanoic Acid) and PFOS (Perfluorooctane Sulfonate) – do not break down naturally in the environment. PFAS (perfluoroalkyl substance) has been linked to some forms of cancer and other illnesses, and there is growing evidence of its link to elevated cholesterol, low birth weight and thyroid problems.

While the United States Environmental Protection Agency begins its process of setting maximum contaminant limits for the PFAS chemicals, and various bills make their way through Congress which would make PFAS a hazardous substance under the Federal Superfund Law (“CERCLA”), Pennsylvania is also exploring the idea of setting its own state-wide health standard  for the PFAS compounds.

The Pennsylvania Department of Environmental Protection will evaluate the effects of PFAS on human health in order to develop standards above which consumption or ingestion of PFAS would potentially be harmful to humans. DEP currently monitors a dozen or more sites around the Commonwealth for PFAS contamination, and has tentative plans to begin monitoring of other systems later this year. Although other states have already performed studies and developed their own PFAS limits, most of which are stricter than EPA’s current health advisory level of 7 parts per trillion for combined PFAS, DEP appears intent on performing its own independent studies and determining appropriate maximum contaminant levels rather than piggy-backing off of the work done by others.

Should PFAS be designated a hazardous substance under the Superfund program, that would allow federal agencies to clean up sites contaminated by PFAS. However, such a move would also signal potential liability exposure for manufacturers, distributors or others involved with PFAS. CERCLA is a very broad environmental liability statute which can potentially encompass current owners or operators of the facility, past owners or operators of a facility, generators and other parties that arranged for the disposal or transport of hazardous substances, as well as actual transporters of the substance. Therefore any company or entity that was in any way involved with the generation, transport, or ownership of property that is in any way connected to PFAS should begin to assess its potential liability in the event that PFAS becomes covered by CERCLA

Recently, Governor Wolf announced the approval of funding through Pennsylvania’s Commonwealth Financing Authority for projects that will remove PFAS from 17 wells in the Warminster/Horsham and Warrington areas of Bucks County, and New Jersey’s Department of Environmental Protection ordered five companies to pay for the contamination caused by PFAS in that state. Two days later, New Jersey sued DuPont and Chemours over PFAS-contaminated water and soil.

PFAS is fast becoming one of the hottest topics in environmental law, statewide and nationally.  Expect this trend to continue.

For more information about PFAS liability or exposure, please contact Paul J. Bruder at 717-232-5000, or pjbruder@mette.com.

Paul J. Bruder Secures Victory for Hubley Township – Joint Sewage Facilities Plan Will Go Forward

The Commonwealth Court of Pennsylvania has reversed a decision of the Environmental Hearing Board that nullified a Joint Act 537 plan between Hegins and Hubley townships.  The plan was the first comprehensive revision to either township’s Act 537 plans since 1967. In the joint plan, the townships proposed the construction of a 600,000-gallon-per-day wastewater treatment plant in Hubley Township. The plan also proposed the installation of public sewers in various sections of both townships where there has been on-lot septic malfunctions and direct discharges of raw sewage into waters of the Commonwealth.  On April 17, 2015, the DEP approved the joint plan, and several landowners appealed DEP’s approval. Hegins Township changed position during the appeal and decided to join the landowners’ challenge to the economic feasibility of the joint plan.  The projected the cost of the project is approximately $26 million.

The ruling means the joint plan can move forward. The Commonwealth Court decision, filed Tuesday, was heard before Judge Renee Cohn Jubelirer, Judge Ellen Ceisler and Senior Judge Dan Pellegrini.  In an unreported opinion, Judge Ceisler writes: “We agree with Hubley and DEP that the board’s ruling undermines the act’s procedures and contradicts the act’s express policy of protecting ‘public health, safety and welfare of the citizens by providing for a technically competent, integrated and coordinated system of sanitary sewage disposal. We will not permit Hegins to escape its public commitment, and its agreed-upon obligation, to work with Hubley and the Hegins-Hubley Water Authority to implement a viable sewage treatment plan without following ‘the proper and transparent procedures outlined in the Sewage Facilities Act.’ ”

The Court also denied Hegins Township’s request to remand the matter to DEP for additional public comment on the most recent revisions to the joint plan.

Paul J. Bruder of Mette Evans & Woodside represented Hubley Township throughout the EHB proceeding and the Commonwealth Court appeal.

Winter Brings Familiar Dangers

by Paul J. Bruder, Jr.

It’s that time of year again. As the weather turns colder and air conditioners give way to furnaces, homeowners call their heating oil providers and say “fill’er up.” Well over 100,000 homeowners in Pennsylvania, approximately 15,000-17,000 in Dauphin County alone, heat their homes with oil, meaning that their basements are home to large (usually 150 gallons or more) heating oil tanks.

Despite sometimes high costs, oil heat remains an efficient, clean and safe way to heat your home. Dangers lurk, however, though not so much with regard to the safety of a properly functioning system. Rather, the dangers and hazards associated with home heating oil often result from problems during the filling of those tanks.

One source of potential danger is the absence or failure of a “whistle.” Typically, during filling of a tank from outside the home through a fill pipe, a second vent pipe will make a whistling sound while air in the tank is displaced by oil and escapes through the vent pipe. As the tank nears capacity, the whistling slows, then stops as the last of the tank’s capacity is filled with oil. At this point, the delivery person knows to stop pumping oil. Problems occur where there is another opening in the tank that is not properly plugged. (Such openings are usually necessary to allow flexibility in installation of the tank). Where such openings exist and are not plugged, displaced air rushes out through that larger opening, without making any noise audible to the tank-filler outside. This can, and often does, lead to an overfill of the tank.

Other sources of danger are existing fill pipes that are no longer in use because the present, or even past, homeowner converted to another source of heat and had the oil tank removed. Should a neighbor with the same numerical address on a different street call for oil, and that address be misread or otherwise misunderstood, a significant amount of heating oil could be pumped directly into a home’s basement.

The above scenarios can, and do, happen more than you would think – dozens of times in the Commonwealth each year. When it does, the next step is crucial. Often, the oil company will simply offer to clean up the spilled oil, apologize and go away. The homeowner is then left with a home inundated with petroleum fumes that soak into the curtains, the carpet, the furniture and the family’s clothes. These fumes can cause headaches and nausea, affect your ability to sleep, and potentially cause greater illness.

In addition, the spilled oil does not take long to soak into the soil, even if the basement has a wooden or concrete floor. Once in the soil, contaminants can leach into the groundwater, which could then affect the quality of well water or flow into nearby streams. Under Pennsylvania law, any pollution of a water of the Commonwealth is illegal, and if the source of the contamination is your property, you are responsible for cleaning it up.

What can you do to make sure this doesn’t happen to you? First and foremost, if your home does not have a home heating oil tank, make sure your home does not have an oil intake or fill pipe. If it does, have it removed immediately by a qualified contractor, or take steps to ensure that it is otherwise disabled. Tape it up tight, put a lock on the cap, hang a sign on it that says “Do not put oil in here!” Anything to alert an oil delivery company that the pipe is not to be used.
If you do use heating oil, have the tank inspected by a qualified professional at the start of each winter season. At the very least, look the tank over yourself to make sure your tank has no openings from which oil can escape. Try to schedule oil deliveries when you will be home so that if there is an overfill, it can be stopped immediately.

If you have an overfill event like the one’s described above, don’t panic. Call the oil delivery company immediately and explain what happened. Next, contact your homeowner’s insurance carrier and consult your homeowner’s policy. Have an insurance representative come to the house immediately to observe conditions as soon as possible, preferably before the oil company begins clean-up. If you wish, you can contact a lawyer to help guide you through the maze of Department of Environmental Protection regulatory requirements, the often confusing provisions of your homeowner’s policy, and the complex system of potential liability for clean-up of the spill. An attorney can also help you select an environmental consultant capable of overseeing the clean-up to make sure your home and the environment are safe. Remember, the Department of Environmental Protection is concerned only with keeping the environment clean, not who foots the bill. Trying to deal with the oil company or your insurance company yourself could wind up costing you, the homeowner, a significant portion of the clean-up costs. A capable representative can protect your rights to get your life back to normal.

You can visit the Department of Environmental Protection’s website at www.dep.state.pa.us for additional information regarding clean-up requirements, or feel free to contact Mr. Bruder directly for more information about our firm and its available services.

Pennsylvania to Examine Its Professional Licensing Procedures

by Paul J. Bruder, Jr.

Gov. Tom Wolf has ordered a review of the professional licensing process to examine whether costs and procedures in Pennsylvania are consistent with those in other states. Wolf signed Executive Order No. 2017-03, which authorizes the Commissioner of the Bureau of Professional and Occupational Affairs, an office within the Department of State, to compare Pennsylvania’s professional licenses against national and regional standards. This could affect a large number of various professions, from real estate, construction-related professions, and medical and dental professions, to name just a few. While only 20 percent of Pennsylvania workers need a license to engage in their profession, the number of workers with an occupational license has grown rapidly since the mid-1900’s.

Commissioner Ian Harlow’s role will be to work with the state’s 29 boards and commissions to evaluate each one’s licensing process, fees, training and continuing education requirements. The commissioners will prepare a joint report for submission to the Governor, which compares Pennsylvania’s requirements with other states in the region, and across the country.

“Requiring a license to work in certain jobs helps to keep all of us safe, but those requirements should be fair relative to other states in our region and across the country,” Wolf said. “Overly burdensome requirements and fees can block some workers – especially minorities or spouses in military families who move frequently – from starting a career and supporting their families.”

It’s Not Nice to Regulate Mother Nature

by Paul J. Bruder, Jr.

“Man proposes, God disposes.” This catchy saying references the often strange ways that man’s best laid plans can be changed by the whim of a Higher Power. In the realm of land development in the state of New Jersey, a new phrase was coined by a New Jersey appellate court: “God creates, man regulates”.

In Ginsberg Development Cos. v. Planning Board of the Township of Harrison, A-4162-06, (App. Div. Feb.
29, 2008), a New Jersey appellate court held, in an unpublished opinion, that a local planning board can require as a condition of land development approval that a developer provide individual deed notices as to the presence of naturally-occurring environmental conditions, such as levels of arsenic in excess of the New Jersey Department of Environmental Protection’s unrestricted soil use standard.

Just the Facts

In Ginsberg, the applicant submitted plans to develop 44 acres into 29 residential lots in the Township of Harrison, Gloucester County. Soil sampling showed evidence of naturally-occurring levels of arsenic which exceeded NJDEP’s unrestricted soil use standard of 20 parts per million on eight of the lots. While there was apparently an acknowledgement by the applicant that arsenic could cause severe health conditions, there was no information in the record regarding exposure to naturally-occurring exceedances. Arsenic is often found in soils at former fruit orchards, since arsenic is an ingredient in many popular pesticides, and most states require remediation of arsenic contamination caused by man. However, there is no requirement under New Jersey law to perform remediation of naturally-occurring arsenic or other contaminants.

Ginsberg agreed to fully-disclose the arsenic levels in homeowner association documents, but objected to the inclusion of this information in individual deeds of conveyance because of concerns about the initial or future marketability of the property. Nevertheless, the Planning Board included the following in its Resolution of Memorialization:

The [Harrison] Township Ordinance permits the Planning Board to consider remedies to address the public welfare concerns posed by an environmental issue. Although the Board may not be permitted to require remediation of the site when the NJDEP is not requiring same, considering the health risks of exposure to elemental arsenic, the Board determined that it is appropriate to require a disclosure in the deeds for each lot and a disclosure in the Homeowner’s association documents regarding the levels of naturally occurring arsenic for all lots affected by these elevated levels.

The applicant filed an action challenging this condition of the preliminary major subdivision approval, alleging that the condition was pre-empted by state environmental laws and “ultra vires” under the New Jersey Municipal Land Use Law. After the lower court affirmed the planning board’s action, the applicant argued on appeal that the Board’s condition was improper because deed notices are a form of remedial control under the New Jersey Brownfield and Contaminated Site Remediation Act, N.J.S.A. 58:10B-1 et seq., but the Brownfield Act does not require remediation of contaminants where the exceedance was the result of regional natural background levels, and therefore the New Jersey legislature had pre-empted the field. Ginsberg also generally challenged the condition as beyond the powers granted to the Board under the Land Use Law.

The Decision

The court found that naturally-occurring exceedances do not constitute a release or “discharge” under the Brownfield Act or its implementing regulations, and the regulations require a “discharge” before remedial action is required. The court held, therefore, that the pre-emption doctrine should not apply because the Brownfield Act does not address such instances. The court also found that it was within the Board’s discretion to require a condition authorized by local ordinance, even if the Brownfield Act did apply to such exceedances, because the Act specifically permitted more stringent local requirements. The court also held that the condition of approval could not be construed to be remedial action because the deed notice requirements imposed on the applicant by the planning board were not as specific as the requirements that would be imposed by the Brownfield Act.

The court went on to state that the Land Use Law specifically requires local municipalities to consider the health, safety and welfare of their communities in adopting local zoning ordinances. Harrison Township maintains an ordinance which requires the performance and submission of:

such other studies, tests or environmental treatments and remedies as may be determined reasonable and necessary for the environmental safety and security of the site, including but not limited to a site investigation in accordance with N.J.A.C. 7:26E, cleanups or other remedies.

Harrison Twp. Ord. Ch. 107, § 107-1(15)(m)(2003).

The court noted that the applicant did not challenge whether the subdivision ordinance properly incorporated the provisions of the enabling ordinance, nor did the applicant challenge the ordinance on constitutional grounds. Specifically, the court stated: “The requirement that such a notice be included in each deed is a reasonable method to insure the information is in fact provided from developer to purchaser and to subsequent purchasers. Thus, the permissible governmental purpose of promoting the general health and welfare of its citizens would be served, and there is nothing in the record by which we can conclude that the Board’s action exceeded the powers delegated to it under the subdivision ordinance.”

How Does This Decision Affect Developers?

Because this is an unpublished decision of the appellate division, it is not controlling precedent. However, it provides ammunition for land use and planning boards to require notice of environmental conditions, even though such conditions may be naturally occurring, at properties through the recording of information relating to the condition, even though no physical remediation is required. Chances of this type of conditional approval becoming uniformly imposed is quite small in light of the factually intensive nature of the case and the existence of the local ordinance which allowed the Board to require “environmental treatments and remedies”. However, the court noted that constitutional issues and issues of whether the local ordinance failed to incorporate provisions of the enabling ordinance were not raised on appeal. As such, there is potential for future challenges in similar circumstances.

Stormwater Update –Is a “Rain Tax” Right For Your Municipality?

by Paul J. Bruder, Jr.

The potential for stormwater utility fees, or the creation of stormwater authorities in Pennsylvania, is real, and some municipalities have already put these measures in place. With increased federal and state concern over the health of the Chesapeake Bay and other impaired waters, and rising concerns over flooding, managing stormwater is becoming more complicated and expensive than ever. In this day and age, merely collecting stormwater and discharging it to the nearest receiving stream is not typically sufficient, particularly for more urbanized areas.

Federal and state authorities are pushing green infrastructure solutions and low-impact development, and the use of best management practices (BMP’s) to filter out pollutants that naturally accumulate in stormwater, in an effort to keep our waterways as clean as possible. However, funding these programs and infrastructure upgrades puts further strain on already lean local government budgets, prompting local government experts to look for new ways to generate revenue.

Stormwater user fees are seen by some as the most fair solution. Property owners are charged a fee based on the size of the property and the percentage of impervious cover (or some similar calculation). Thus, like other utility fees such as water and sanitary sewer, the amount of these fees will be based on the amount of demand a user places upon the system. All property owners who generate stormwater runoff from hard surfaces will pay a fee. This way, property owners have much more control over the amount of the fee they will be required to pay, and such a system provides an incentive for land owners and developers to come up with more creative ways to develop their property to minimize stormwater runoff and maximize on-site infiltration. This system would appear to be a much more equitable system than a standard property tax based upon property value.

The creation of stormwater authorities had been the subject of much legal debate. Many in the legal and local government communities (myself included) believe that the existing Municipality Authorities Act, 53 Pa.C.S.A. § 5601 et seq., already allows the creation of such authorities. However, without any court decisions ruling on this issue, many municipalities are wary of creating such authorities and then facing the prospect and expense of a legal challenge. During the 2011-12 legislative session, the Pennsylvania Senate passed a bill that would provide municipalities with express power to create these authorities; however, that bill was not passed into law during that session. Currently, two similar bills – Senate Bill 351 and House Bill 821 – are pending in various stages along the process, and some fine tuning may take place before a final bill reaches the Governor’s desk. There is optimism, however, that a bill providing some clarity on this issue will be signed into law this year.

As has been recognized in the consulting and legal communities, stormwater authorities, should they be created, are likely best organized at the watershed level. Stormwater knows no municipal boundary, so local governments that discharge stormwater to the same watershed need to work together in order to establish the most efficient system possible for managing stormwater and collecting any fees that are required. A county-wide approach may work as well, however it would seem that a watershed approach is more appropriate, given that impaired waters are defined by watershed as opposed to municipal boundaries.

Other funding options that have been batted around include separate fees on developers to compensate communities for things like inspections, plan reviews, and penalties for illicit discharges. While developers are an easy target, political backlash may prevent this from becoming a reality. Grants and low-interest loans are also available through many DEP and DCED programs, PennVest, and some federal programs as well. While these can be beneficial to getting things started with planning and design, they cannot be counted on to provide a steady stream of revenue sufficient to sustain a long-term stormwater management program.

Solutions to these problems – both from the environmental protection standpoint and the financing standpoint – are not easily achievable. However, difficult problems always require creative solutions, and the end result is often worth the effort.

The Tank Act and Indemnification Fund

by Paul J. Bruder, Jr.

The Underground Storage Tank Indemnification Fund (“USTIF” or the “Fund”) was established within the Storage Tank and Spill Prevention Act (the “Tank Act”). The USTIF is a special fund in the state treasury which consists of fees assessed by the Underground Storage Tank Indemnification Board to owners and operators of underground storage tanks. The seven member USTIF Board consists of the Insurance Commissioner and the Secretary of the Department of Environmental Protection (DEP), and five other members appointed by the Governor.

The USTIF is funded entirely by fees paid by owners/operators of storage tanks, fuel distributors and tank installers, based on factors specific to each business and the gallons delivered, tank capacity and tank removals/installations performed. Monies in the Fund are appropriated for the purpose of making payments to owners/operators of USTs who incur corrective action liability or for bodily injury or property damage caused by a release from a UST. Payments to eligible claimants are limited to actual reasonable and necessary costs of corrective action and to the amount of an award of damages by a court for bodily injury or property damage. Payable claims do not include the cost of upgrading, routine inspections, investigations or permit activities not associated with a release.

The Fund has a $1,500,000 limit per tank per occurrence and a $1,500,000 annual aggregate limit for each owner of 100 or less USTs. There is a $3,000,000 annual aggregate limit for owners of 101 or more USTs. Owners must pay a deductible in an amount not less than $5,000 per tank per occurrence for each tank that contributed to the release. If the release also results in an eligible claim for bodily injury or property damage, the owner must pay an additional deductible per tank per occurrence in an amount not less than $5,000 (in addition to the corrective action deductible).

Eligibility Requirements

In order to receive a payment from the USTIF, the claimant: must be the owner/operator of the tank which is the subject of the claim; must be current with the fees; must have a registered UST; must have a permit, if required; must demonstrate that the release that is the subject of the claim occurred after February 1, 1994; comply with the notification requirements set forth in DEP’s regulations at 25 Pa. Code 977.34 (relating to reporting claims to the USTIF within 60 days after confirmation of a release), and; cooperate with the USTIF in its eligibility determination process, claims investigation, the defense of any suit, the pursuit of a subrogation action, or other matters as requested. The USTIF Board and its third party administrator scrutinize each claim to ensure compliance with these requirements, and will deny any claim that does not strictly comply. We will analyze some of these requirements below.

Registration

Obviously, where a claimant has not properly registered the subject tank or paid the appropriate fees, then any claim will be summarily denied by the USTIF. In a transactional scenario, where a party purchases UST’s from another party, often there may be some uncertainty as to the eligibility requirements and whether the seller is in compliance with the basic eligibility requirements regarding registration and fees. In such a case, the purchasing party should investigate these matters prior to settling on the deal, and if the deal goes through, if the seller of the tanks has not complied with the eligibility requirements, the new owner should immediately contact DEP to have the tanks registered and permitted, and pay all outstanding fees. However, coverage is not afforded where the fees are paid after the discovery of contamination. If the previous owner never registered the tanks and the new owner becomes aware of the presence of tanks on the property, then the new owner must immediately register the tanks in accordance with Section 501 Tank Act and the DEP regulations. It is unlawful for any owner or operator to operate or use, in any way, any UST that has not been registered as required by the Tank Act. The owner must submit a form to the DEP to register each UST. Problems are more likely to arise when the previous owner (or an owner before the previous owner) registered the tanks and then failed to pay the annual fees to the Fund. In that case, the new owner, although he is an innocent party, is likely to receive a notice of delinquency from the DEP. In the worst case, there may have been a release from the USTs and the previous owner failed to follow the reporting requirements under the Act, which means that the new owner will be charged with the remediation costs. However, under Section 1311 of the Tank Act, the previous owner is presumed liable for any contamination or pollution that occurred when he owned the tanks. The new owner may file a private cause of action against the previous owner to recover costs and fees expended as a result of the pollution. DEP may also assess additional criminal and civil penalties against the previous owner for failure to comply with the Act.

Notice and Confirmation of Release

To receive payment from the Fund, the participant must notify the Fund within 60 days after the confirmation of release. An investigation of an indication of a release must be done no later than 7 days after the indication using one of the investigative procedures listed in the DEP regulations. If the procedure(s) indicate a release, then the release has been confirmed. Even if the investigation at the site is somewhat limited, as long as at least one of the listed procedures is used, then a confirmation of the release has occurred.

The regulations require confirmation of the release to trigger the reporting requirement, so actual knowledge is required that a release has been confirmed. The confirmation of a release is determined by considering the totality of the circumstances. Factors to consider could include contaminated soil, a hole in the line amidst corrosion, a pump behaving erratically, the product was under pressure in the line in normal operation, the consistent treatment of the release as confirmed, and the line did not hold pressure after repair which indicated that other escape holes existed in the line. The odor emanating from the soil, the visible vapors rising from the soil, and photo ionization detector soil screening results also are enough factors to confirm a release. It is not necessary to know the extent of the contamination in order to know that a release has occurred.

Once a release is confirmed, the reporting requirement is a prerequisite for eligibility which must be satisfied unless the untimeliness is excused. A delay will only be excused in extraordinary circumstances, including fraud, the breakdown in the administrative process, or non-negligent circumstances related to the insured, counsel, or a third party. The burden of proof falls on the claimant to demonstrate entitlement to payment of the claim.

In a 2005 USTIF Case, Harrisburg Jet Center/USTIF, UT04-08-025, 16 (2005), the claimant was ineligible for USTIF coverage because confirmation of the release was confirmed in October 2003 when the visible contamination was noted, the hole in the line was observed, the pump was behaving erratically, and other factors occurred to signal the release. Once one or more procedures were taken as listed in 25 Pa. Code § 245.304(b), the release was confirmed and there was no need to wait for the test results from a soil and groundwater sample analysis to know that there was a release. The delay in waiting for the analysis was not excused and the 60 day required time period for notification had passed by the time the claimant notified the USTIF of a potential claim on January 14, 2004.

In a 2006 USTIF case, Ashton Road Automotive, Inc./USTIF, UT04-06-065, 13 (2006), the claimant was also ineligible for USTIF coverage because the confirmation of the release occurred on August 13, 2003 when the site was excavated and an odor emanated from the soil, vapors were seen rising from the soil, and the PID soil screening results showed a high level of contamination. Since the claimant was present at the site on that date and these observations constituted a confirmation of the release, it was not appropriate to start calculating the 60 day reporting requirement by the date on which the claimant received the result of laboratory tests of the soil samples.

Establishing that Release Occurred After February 1, 1994

In order to claim eligibility for payment under the USTIF, the claimant must also demonstrate that the release occurred after February 1, 1994. The heavy burden of proof is on the claimant to provide substantial evidence that “it is more likely than not” that the release occurred after February 1, 1994. If the evidence is inconclusive whether the release occurred before or after 1994, the claimant has not met its burden of demonstrating eligibility for reimbursement.

It would appear from Pennsylvania case law that it is not necessary to prove beyond a reasonable doubt that the release occurred prior to February 1, 1994, but only to demonstrate to the Board’s satisfaction that the release occurred after that date. The Commonwealth Court of Pennsylvania has indicated that the claimant must show that it is “more likely than not” that the release occurred after February 1, 1994. Southeast Delco School District v. USTIF, 708 A.2d 881 (Pa. Cmwlth. Ct. 1998). The claimant must take affirmative action to demonstrate that the release occurred after 1994 and cannot simply attempt to rebut the evidence or methodologies of USTIF experts but must take his own steps to provide evidence that shows it is more likely that the leak occurred after February 1, 1994.

The USTIF has been very consistent over the years in the application of the eligibility requirements and seemingly very fair in its assessment of eligible claims. Strict adherence to the eligibility criterion is a must, and in conducting any commercial transaction involving potentially eligible storage tanks, these matters are best investigated during any due diligence period. Any uncertainties should be investigated by the buyer’s counsel or consultant and a verification with DEP and the USTIF as to the status of the tanks. There are no second chances with these eligibility requirements.