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Expanding Environmental Liability Protection for Economic Development Agencies and Non-Profit Corporations
The Pennsylvania Economic Development Agency, Fiduciary and Lender Environmental Liability Protection Act (Act 3 of 1995 or the “Lender Liability Act”), sister legislation to the Land Recycling Act (Act 2 of 1995), was recently amended to grant economic development agencies, and nonprofit corporations created by those agencies, protection from environmental liability. The scope of the liability protection has not expanded, rather the amendment is intended to make it clear that liability protection extends to any nonprofit corporation created and controlled by a redevelopment authority to carry out its steps toward a particular purpose.
Where an economic development agency takes title of a property to secure public funding for the environmental investigation, remediation and development of the property, the Lender Liability Act applies to protect the entity from environmental liability. The protection extends to an economic development agency’s officers, directors, agents, members, employees and professional consultants, provided that the agency did not directly cause the release or exacerbate the release of the contaminating substance. This legislation will protect a redevelopment authority that might hold title to a property to assist in obtaining state funds for use in remediation of the site. The amendment should clarify any ambiguities in the original language of the statute that certain agencies or entities were not protected from liability in their efforts to remediate certain brownfield properties.
Paul Bruder is a member of Rhoads & Sinon’s Environmental Law and Litigation Practice Group. If you have any questions about this issue, or if you need legal assistance in any area of environmental law, you can contact Mr. Bruder via email at pbruder@rhoads-sinon.com, or by telephone at 717-233-5731.