HB 108: "An Act relating to the liability of certain security interest holders arising out of an unpermitted release of a hazardous substance or the substantial threat of an unpermitted release of a hazardous substance, and to liens on the property of certain security interest holders resulting from an oil or hazardous substance spill or the substantial threat of a release of oil or a hazardous substance."
00HOUSE BILL NO. 108 01 "An Act relating to the liability of certain security interest holders arising out 02 of an unpermitted release of a hazardous substance or the substantial threat of 03 an unpermitted release of a hazardous substance, and to liens on the property 04 of certain security interest holders resulting from an oil or hazardous substance 05 spill or the substantial threat of a release of oil or a hazardous substance." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 40.17.110(b) is amended by adding a new paragraph to read: 08 (61) an environmental risk assessment under AS 46.03.827. 09 * Sec. 2. AS 46.03.826(8) is amended to read: 10 (8) "owner" and "operator" 11 (A) mean 12 (i) in the case of a vessel, any person owning, operating, 13 or chartering by demise, a vessel; 14 (ii) in the case of facility, any person owning or
01 operating the facility; 02 (iii) in the case of an abandoned facility or vessel, any 03 person who owned, operated, or otherwise controlled activities at the 04 facility or vessel immediately before the abandonment; and 05 (iv) in the case of a facility or vessel, title or control of 06 which was conveyed due to bankruptcy, foreclosure, tax delinquency, 07 abandonment, or similar means to a unit of the state or a political 08 subdivision of the state, any person who owned, operated, or otherwise 09 controlled the facility or vessel immediately beforehand; 10 (B) do not include a person who, without participating in the 11 management of a vessel or facility, holds indicia of ownership primarily to 12 protect that person's security interest in the vessel or facility and, if required 13 by AS 46.03.827, files the environmental risk assessments required by that 14 section; 15 * Sec. 3. AS 46.03.826 is amended by adding new paragraphs to read: 16 (16) "indicia of ownership" means evidence of interests in real or 17 personal property held as security for a loan or other obligation, including full title to 18 real or personal property acquired through foreclosure or an equivalent procedure, and 19 including a mortgage, deed of trust, assignment, lien, pledge, or other right to or other 20 form of encumbrance against property that is recognized under applicable law as 21 establishing a bona fide security interest; 22 (17) "participating in the management of a vessel or facility" means the 23 actual participation in the management or operational affairs by the person who is the 24 holder of the security interest; in this paragraph, "participating in the management of 25 a vessel or facility" 26 (A) includes exercising 27 (i) decision-making control over the borrower's 28 environmental compliance, to the degree that the security holder has 29 undertaken responsibility for the borrower's actions that result in a 30 release or threatened release; 31 (ii) management level control encompassing the
01 borrower's environmental compliance responsibilities comparable to that 02 of a manager of the borrower's enterprise; 03 (B) does not include 04 (i) the mere capacity or ability to influence, or the 05 unexercised right to control, facility operations; 06 (ii) undertaking or requiring an environmental audit or 07 inspection; 08 (iii) imposing a requirement that the borrower clean up 09 the vessel or facility before or during the term of the security interest; 10 (iv) imposing a requirement of assurance that the vessel 11 or facility remains or is maintained in compliance with all applicable 12 local, state, and federal laws and regulations for the life of the loan or 13 security interest; or 14 (v) periodic or regular monitoring of the borrower's 15 business or financial condition, loan workouts, or other actions that are 16 reasonably necessary for the security holder to adequately maintain the 17 security interest; 18 (18) "primarily to protect a security interest" means that the indicia of 19 ownership in the vessel or facility are held for the purpose of securing payment or 20 performance of a financial obligation, including a mortgage, installment sale, trust 21 receipt transaction, assignment, or other financing arrangement; "primarily to protect 22 a security interest" does not include an ownership interest in property held for 23 investment purposes, or for purposes other than as protection of a security interest. 24 * Sec. 4. AS 46.03 is amended by adding a new section to read: 25 Sec. 46.03.827. ENVIRONMENTAL RISK ASSESSMENTS. (a) In order 26 for a person to qualify for the exclusion under AS 46.03.826(8)(B) from being 27 considered an owner under AS 46.03.822 - 46.03.828 for nonresidential real property 28 in which the person has a qualifying security interest, the person shall prepare and 29 record under AS 40.17 an environmental risk assessment for each of the person's 30 qualifying security interests. An assessment shall be recorded within 90 days after the 31 security interest is created.
01 (b) The environmental risk assessment required under (a) of this section must 02 assess whether the qualifying real property is or has been contaminated by hazardous 03 substances. The assessment must be based on at least an inquiry into the history and 04 current condition of the qualifying real property and, unless other information indicates 05 the site inspection is not necessary, a physical site inspection for obvious evidence of 06 contamination by hazardous substances. The person preparing and recording the 07 assessment under (a) of this section may otherwise determine the form and content of 08 the assessment. 09 (c) A person preparing and recording an environmental risk assessment under 10 (a) of this section is not liable to another person for damages resulting from the 11 assessment being erroneous if the preparation and recording of the assessment complies 12 with this section. 13 (d) In this section, "qualifying security interest" means a security interest in 14 nonresidential real property if the security interest secures an indebtedness of over 15 $2,000,000 and is created on or after the effective date of this Act. 16 * Sec. 5. AS 46.08.075 is amended by adding new subsections to read: 17 (f) Notwithstanding (a) of this section, if the property subject to the response, 18 containment, removal, or remedial action by the state is owned by a person who, under 19 AS 46.03.826(8)(B), is not considered an owner or operator under AS 46.03.822 - 20 46.03.828, the state may file a lien against only that property that was subject to the 21 state's action. If the lien is filed, the lien and the person's liability to the state for the 22 state's costs of the action are limited to the difference, if any, in the positive fair 23 market value of the property before the state's action and the fair market value of the 24 property after the conclusion of the state's action, to the extent the difference has 25 resulted directly from the state's action. In this subsection, 26 (1) "action" means response, containment, removal, or remedial action; 27 (2) "person" has the meaning given in AS 46.03.900. 28 (g) The lien imposed by (f) of this section is subject to the rights of a 29 purchaser, holder of a security interest, or judgment lien creditor if the interest of the 30 purchaser, holder, or creditor is perfected under applicable law before notice of the lien 31 imposed by (f) of this section is filed in the appropriate recorder's office under (b) of
01 this section. The purchaser, holder of a security interest, or judgment lien creditor 02 shall be afforded the same protections against the lien imposed by (f) of this section 03 as are afforded under state law to a purchaser, holder of a security interest, or 04 judgment lien creditor against a judgment lien that arises out of an unsecured 05 obligation and that arises at the same time the notice of the lien created under (f) of 06 this section is filed.