Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately establish the Massachusetts Hazardous Waste Insolvency Fund, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.
Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
SECTION 1. Chapter 21C of the General Laws is hereby amended by adding the following sixteen sections:-
Section 15. As used in sections fifteen to thirty, inclusive, the following words shall, unless the context clearly requires otherwise, have the following meanings:-
"Commissioner", the commissioner of insurance.
"Plan", the plan of operation established and approved under section twenty-two.
"Licensee", a person or entity holding a license to own or operate a hazardous waste collection, treatment, disposal or storage facility, pursuant to this chapter, or which is a facility having interim status pursuant to RCRA and regulations promulgated pursuant to this chapter.
"Insolvent licensee", a licensee which, after December thirty-first, nineteen hundred and eighty-five, becomes insolvent and is placed under a final order of arrangement, bankruptcy, liquidation, conservation or rehabilitation by a court of competent jurisdiction; or is finally adjudicated to be bankrupt or insolvent by a court of competent jurisdiction; or certifies to the insolvency fund in writing, under the pains and penalties of perjury, that it is insolvent and is found to be insolvent by the insolvency fund or the commissioner of insurance.
"Impaired licensee", a licensee which, after December thirty-first, nineteen hundred and eighty-five, is not an insolvent licensee and is found by the insolvency fund or by the commissioner to be potentially unable to satisfy a pending potential covered claim; or is the subject of proceedings under the bankruptcy code; or is placed under an order of receivership, conservation or rehabilitation by a court of competent jurisdiction.
"Covered claim", an unsatisfied final judgment against an insolvent licensee entered in a civil action commenced on or after January first, nineteen hundred and eighty-six and before January first, nineteen hundred and eighty-seven, for bodily injury or property damage to a third party caused by an accidental occurrence arising from operation of a hazardous waste collection, disposal, treatment or storage facility in the commonwealth.
"Potential covered claim", a claim for bodily injury or property damage to a third party caused by an accidental occurrence arising from operation of a hazardous waste collection, disposal, treatment or storage facility in the commonwealth; which is the subject of a civil action against a licensee commenced on or after January first, nineteen hundred and eighty-six; and satisfaction of which is likely to require an amount exceeding the total amount of liability insurance available to satisfy the claim and the assets of the defendants available to satisfy the claim.
"Generator", a person who produces hazardous waste while engaged in business within the commonwealth.
"Insolvency fund", the Massachusetts hazardous waste insolvency fund established under section sixteen.
Section 16. There is hereby established a body politic and corporate to be known as the Massachusetts hazardous waste insolvency fund. All generators shall be and shall remain members of the insolvency fund. The insolvency fund shall perform its functions under the plan of operation established and approved under section twenty-two and shall exercise its powers through a board of directors established under section seventeen. The insolvency fund shall be subject to the immediate supervision of the commissioner. Meetings or records of the insolvency fund may be opened to the public upon a majority vote of the board of directors of the insolvency fund.
Section 17. (a) The board of directors of the insolvency fund shall consist of nine members, serving terms as established in the plan of operation. Five of the directors shall be elected by generators, subject to the approval of the commissioner, and four of the directors shall be appointed by the governor. Vacancies on the board shall be filled for the remaining period of the term by election or appointment in the same manner as the director which created the vacancy was elected or appointed. To elect the initial nonappointive directors and initially organize the insolvency fund, the commissioner shall give notice in a reasonable manner, by publication or otherwise in his discretion, to all generators of the time and place of the organizational meeting. In determining voting rights at the organizational meeting, each generator shall be entitled to vote in person or by proxy, and shall be entitled to one vote per ten thousand gallons of liquid or eighty thousand pounds of solid hazardous waste generated by the generator in the commonwealth in the next previous calendar year. In the event of a dispute as to the number of votes to which a generator is entitled, the commissioner shall promptly determine the issue in his sole discretion, after consulting with the commissioner of the department of environmental quality engineering. If the board of directors is not selected within sixty days after notice of the organizational meeting, the commissioner may appoint the initial elected members.
(b) In approving selections or in appointing members to the board, the commissioner shall consider, among other things, whether all generators are fairly represented.
(c) Members of the board may be reimbursed from the assets of the insolvency fund for expenses incurred by them in carrying out their duties as members of the board of directors, if the board approves of said reimbursement, but members of the board shall not otherwise be compensated by the insolvency fund for such services.
Section 18. (a) If a licensee is an impaired licensee, the insolvency fund may, in its discretion and subject to any conditions imposed by the insolvency fund, that do not impair the contractual obligations of the impaired licensee and that are approved by the commissioner:
(1) defend, guarantee, assume insure or reinsure, or cause to be defended, guaranteed, assumed, or insured, any or all of the potential covered claims against the impaired licensee; or
(2) provide such monies, pledges, notes, guarantees, or other means as are proper to effectuate clause (1) and assure defense or payment of the potential covered claim against the impaired licensee pending action under said clause (1).
(b) If a member licensee is an insolvent licensee, the insolvency fund may, in its discretion, either (1) defend, guarantee, assume, insure or reinsure, or cause to be defended, guaranteed, assumed or reinsured, the potential covered claims against the insolvent licensee; or (2) assure payment of the potential covered claims against the insolvent licensee; or (3) provide such monies, pledges, notes, guarantees, or other means as are reasonably necessary to discharge such duties.
(c) The insolvency fund shall pay, pursuant to the procedures set forth in section nineteen, and subject to the limits described herein, so much of any covered claim against an insolvent licensee as exceeds the total of (1) the amount of liability insurance available to satisfy the judgment; and (2) the value of the assets of the insolvent licensee reasonably available to satisfy the judgment; and (3) the value of the assets of any other party liable jointly for all or any part of the said judgment to the extent that those assets are reasonably available to satisfy the judgment.
In no event shall the insolvency fund pay any part of an unsatisfied judgment arising out of one sudden accidental occurrence, to the extent that the judgment exceeds three million dollars, inclusive of interest and costs, nor shall the insolvency fund pay any amount for judgments against a single insolvent licensee for sudden accidental occurrences to the extent that the total of all said judgments exceed six million dollars, inclusive of interest and costs.
In no event shall the insolvency fund pay any part of an unsatisfied judgment arising out of one non-sudden accidental occurrence, to the extent that the judgment exceeds five million dollars, inclusive of interest and costs, nor shall the insolvency fund pay any amount for judgments against a single insolvent licensee for non-sudden accidental occurrences to the extent that the total of all said judgments exceed ten million dollars, inclusive of interest and costs.
Section 19. (1) Any person who commences a civil action against a licensee for damages arising out of an occurrence or occurrences in the commonwealth of unintentional release of hazardous waste into the environment from a facility in the commonwealth, shall give notice of the filing of said action to the insolvency fund, together with a statement of the amount of damages sought in the said action, within one hundred and eighty days after commencing said action and in no event later than July first, nineteen hundred and eighty-seven. Failure to give such notice within the period prescribed herein shall constitute a bar to any claim against the insolvency fund arising from any judgment entered in the said action.
(2) At any time after notice has been given pursuant to subsection (1), the plaintiff, the licensee or any affected party in the subject civil action may give notice to the insolvency fund that the licensee is or may be an impaired or insolvent licensee. The insolvency fund shall have authority to negotiate, settle or compromise any potential covered claim on terms which, in its judgment, adequately satisfy its potential liabilities.
(3) Any person who has provided timely notice of his claim against a licensee pursuant to subsection (1), whose claim has been reduced to a final judgment, all rights of appeal being exhausted, waived or expired and whose judgment exceeds the total of the amount of liability insurance or its equivalent available to satisfy the judgment and the amount of cash, marketable securities or other liquid assets available to satisfy the judgment, may give notice of the said facts to the insolvency fund. The insolvency fund shall thereupon promptly verify said facts and upon verification shall treat the claim as a covered claim and pay it within ninety days in accordance with the provisions of paragraph (c) of section eighteen.
(4) If the insolvency fund fails to act within a reasonable period of time as provided in subsections (2) and (3), the commissioner shall have the powers and duties of the insolvency fund with respect to impaired or insolvent licensees.
(5) The insolvency fund may render assistance and advice to the commissioner, upon his request, concerning rehabilitation, payment of claims or the performance of other contractual obligations of any impaired or insolvent licensee.
(6) The insolvency fund shall have standing to appear before any court with jurisdiction over an impaired or insolvent licensee in any proceeding concerning matters for which the insolvency fund is or may become obligated under this chapter. Such standing shall extend to all matters germane to the powers and duties of the insolvency fund, including, but not limited to, proposals for insuring, modifying or guaranteeing the covered claims or potential covered claims of the impaired or insolvent licensee and the adjudication of the covered claims or potential covered claims. The insolvency fund shall also have the right to appear or intervene before any court with jurisdiction over a third party against whom the insolvency fund may have rights through subrogation, contribution or otherwise.
Section 20. (1) Any person receiving payment of a covered claim or potential covered claim under this chapter shall be deemed to have assigned the rights to, and any causes of action relating to the covered claim or potential covered claim to the insolvency fund to the extent of the benefits received under this chapter. The insolvency fund may require an assignment to it of such rights and cause of action by any payee as a condition precedent to the receipt of any right or benefits conferred upon such person. The insolvency fund shall be subrogated to the rights and cause of action of any such payee against the assets of the insolvent licensee.
(2) The subrogation and contribution rights of the insolvency fund under this subsection shall have the same priority against the assets of the impaired or insolvent licensee as that possessed by the person entitled to receive said benefits.
(3) In addition to paragraphs (1) and (2), the insolvency fund shall have all common law and statutory rights of subrogation, contribution and any other equitable or legal remedy which would have been available to the impaired or insolvent licensee or claimant with respect to such claim.
Section 21. (1) The insolvency fund, subject to the supervisory authority of the commissioner and as provided in the plan of operation, may:
(a) enter into such contracts as are necessary or proper to carry out the provisions and purposes of this chapter;
(b) sue or be sued, including taking any legal actions necessary or proper for recovery of any unpaid assessments;
(c) borrow money to effect the purposes of sections fifteen to thirty, inclusive;
(d) employ or retain such persons as are necessary to handle the financial transactions of the insolvency fund and to perform such other functions as become necessary or proper;
(e) take such legal action as may be necessary to avoid payment of improper claims.
(2) The insolvency fund may join an organization of one or more other state funds or associations of similar purposes, to further the purposes and administer the powers and duties of the insolvency fund.
Section 22. (1) For the purpose of providing the funds necessary to carry out the powers and duties of the insolvency fund, the board of directors shall assess the generators at such time and for such amounts as the board finds necessary. Assessments shall be due not less than sixty days after prior written notice to the generators and shall accrue interest at twelve per cent per annum on and after the due date. Failure without just cause to pay any lawful assessment pursuant to this section and in accordance with the plan shall constitute a violation of this chapter.
(2) There shall be two classes of assessments, as follows:
(a) Class A assessments shall be made for the purpose of meeting administrative costs and other expenses. Class A assessments may be made whether or not related to a particular impaired or insolvent licensee.
(b) Class B assessments shall be made to the extent necessary to carry out the powers and duties of the insolvency fund under section nineteen with regard to an impaired or insolvent licensee.
(3) The amount of any Class A assessment shall be determined by the board and may be made on a pro rata or non-pro rata basis. If pro rata, the board may provide that it be credited against future Class B assessments. A non-pro rata assessment shall not exceed one hundred and fifty dollars per generator in any one calendar year.
(4) Class B assessments against generators shall be made pro rata in the proportion that the gallons of liquid hazardous waste or pounds of solid hazardous waste generated in the commonwealth by each assessed generator during the calendar year preceding the assessment bears to the total of such wastes generated by all generators in the commonwealth for the calendar year preceding the assessment. For purposes of this assessment, the department of environmental quality engineering shall, at the request of the insolvency fund, determine the amount of such wastes in total and for each generator. One gallon of liquid hazardous waste shall be considered the equivalent of eight pounds of solid hazardous waste for purposes of calculating the assessment.
(5) Assessments for funds to meet the requirements of the insolvency fund with respect to an impaired or insolvent licensee shall not be made until necessary to implement the purposes of sections fifteen to thirty, inclusive. Classification and computation of assessments under this subsection shall be made expeditiously and with reasonable accuracy, recognizing that exact determinations may not always be possible.
(6) The insolvency fund may abate or defer, in whole or in part, the assessment of a generator if, in the opinion of the board, payment of the assessment would endanger the ability of the generator to continue in operation. In the event an assessment against a generator is abated, or deferred in whole or in part, the amount by which such assessment is abated or deferred may be assessed against the other generators in a manner consistent with the basis for assessments set forth in this section.
(7) The total of all assessments upon a generator shall not in any one calendar year exceed ten per cent of such generator's average annual gross revenues received in the commonwealth during the three calendar years preceding the assessment. If the maximum assessment, together with the other assets of the insolvency fund, does not provide in any one year an amount sufficient to carry out the responsibilities of the insolvency fund, the necessary additional funds shall be assessed as soon thereafter as permitted by sections fifteen to thirty, inclusive.
(8) The board may, by an equitable method as established in the plan of operation, refund to generators, in proportion to the contribution of each generator to the insolvency fund, the amount by which the assets of the insolvency fund exceed the amount the board finds is necessary to carry out during the coming year the obligations of the insolvency fund, including any assets accruing from assignment, subrogation, net realized gains and income from investments. A reasonable amount may be retained to provide funds for the continuing expenses of the insolvency fund and for future losses.
Section 23. (1) The insolvency fund shall submit to the commissioner a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable and equitable administration of the insolvency fund. The plan of operation and any amendments thereto shall become effective upon approval by the commissioner.
(2) If the insolvency fund fails to submit a plan of operation acceptable to the commissioner within one hundred and eighty days after the organization of the board of directors, or if at any time thereafter the insolvency fund fails to submit acceptable amendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate such reasonable rules necessary to effectuate the provisions of sections fifteen to thirty, inclusive. Such rules shall continue in force until modified by the commissioner or superseded by a plan submitted by the insolvency fund and approved by the commissioner.
(a) All generators shall comply with the plan of operation.
(b) The plan of operation shall, in addition to requirements enumerated elsewhere:
(1) establish procedures for handling the assets of the insolvency fund,
(2) establish the amount, if any, and method of reimbursing members of the board of directors under section seventeen,
(3) establish regular places and times for meetings of the board of directors,
(4) establish procedures for records to be kept of all financial transactions of the insolvency fund, its agents, and the board of directors,
(5) establish any additional procedures for assessments under section twenty-one,
(6) contain additional provisions necessary or proper for the execution of the powers and duties of the insolvency fund.
Section 24. Any action of the board of directors or the insolvency fund may be appealed to the commissioner by any generator or any person adversely affected thereby, if such appeal is taken within thirty days of the action being appealed. If a generator is appealing an assessment, the amount assessed shall be paid to the insolvency fund and available to meet insolvency fund obligations during the pendency of an appeal. If the appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the generator. Any final action or order of the commissioner shall be subject to judicial review, pursuant to chapter thirty A.
Section 25. To aid in the detection and prevention of licensee insolvencies or impairments:
(1) The commissioner may seek the advice and recommendations of the board of directors concerning any matter affecting his duties and responsibilities regarding the financial condition of licensees.
(2) The board of directors may, upon majority vote, make reports and recommendations to the commissioner upon any matter germane to the solvency, liquidation, rehabilitation or conservation of any licensee. Such reports and recommendations shall not be subject to public examination or copying under chapter sixty-six.
(3) It shall be the duty of the board of directors, upon majority vote, to notify the commissioner of any information indicating any licensee may be an impaired or insolvent licensee.
(4) The board of directors may, upon majority vote, request that the commissioner order an examination of any licensee which the board in good faith believes may be an impaired or insolvent licensee. Within thirty days of the receipt of such request, the commissioner shall begin such examination. The examination may be conducted by such persons as the commissioner designates. The licensee shall provide complete access to all its books and records to the commissioner or his designee for purposes of said examination. The cost of such examination shall be paid by the insolvency fund. In no event shall the examination report be released to the public or to the board of directors without the consent of the licensee. The commissioner shall notify the board of directors when the examination is completed. The request for an examination and any examination report shall be kept on file by the commissioner, but it and the examination report shall not be open to public inspection without the consent of the licensee.
(5) The board of directors may, upon majority vote, make recommendations to the commissioner for the detection and prevention of licensee insolvencies.
(6) The board of directors shall, promptly after payment of any covered claims by the association, prepare a report to the commissioner containing such information as it may have in its possession bearing on the history and causes of the licensee's insolvency.
Section 26. (1) Records shall be kept of all negotiations and meetings in which the insolvency fund or its representatives are involved to discuss the activities of the insolvency fund in carrying out its powers and duties. Records of such negotiations or meetings shall be made public only upon the termination of a bankruptcy, liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent licensee, upon the termination of the impairment or insolvency of the licensee, or upon the order of a court of competent jurisdiction. Nothing in this section shall limit the duty of the insolvency fund to render a report of its activities under section twenty-seven.
(2) For the purposes of this chapter, the insolvency fund shall be deemed to be a creditor of the impaired or insolvent licensee to the extent of any amounts to which the association is entitled as subrogee. Assets of the impaired or insolvent licensee, wherever located, shall be used to pay all covered claims against the impaired or insolvent licensee as required.
Section 27. The insolvency fund shall be subject to examination and regulation by the commissioner. The board of directors shall submit to the commissioner each year, not later than one hundred and twenty days after the end of the insolvency fund's fiscal year, a report of its activities during the preceding fiscal year, and for any year in which it expended, received or held any funds, in which it incurred any financial obligations or in or before which it received a notice of any potential covered claim, a financial report in a form approved by the commissioner.
Section 28. The insolvency fund shall be exempt from payment of all taxes levied by the commonwealth or any of its subdivisions, except taxes levied on real property.
Section 29. Until such time as the insolvency fund ceases to exist, the commissioner of the department of environmental quality engineering is hereby authorized to make an annual assessment against each licensee in an amount determined and certified by said commissioner as necessary to cover the costs incurred by the department and the division of insurance in carrying out their responsibilities relative to the administration of the insolvency fund pursuant to sections fifteen to thirty, inclusive. Said estimated assessment shall be allocated among all such licensees in a proportion deemed by the commissioner of said department to represent each licensee's pro rata share of the total amount of hazardous waste collection, treatment, disposal and storage within the commonwealth. Said assessment shall be paid to said commissioner of said department within thirty days of the date of the notice from said commissioner of such assessment. Failure without just cause to pay such assessment shall constitute a violation of this chapter. Prior to any such assessment the commissioner of insurance shall determine and certify to the commissioner of the department of environmental quality engineering the costs incurred by the division of insurance in carrying out its responsibilities relative to the administration of the insolvency fund.
Section 30. In the event that the monies in the insolvency fund are insufficient to provide for the purposes set forth in section eighteen, no claimant or any other person shall have any right to require the payment of funds or to compel any other action with respect to such occurrence by the commonwealth or by any agency thereof. Neither the commonwealth nor any agency thereof shall be liable for civil damages arising from any action taken in accordance with the provisions of sections fifteen to thirty, inclusive.
SECTION 2. Sections fifteen to thirty, inclusive of chapter twenty-one C of the General Laws are hereby repealed.
SECTION 3. In implementing and enforcing the financial responsibility provisions of chapter twenty-one C of the General Laws, the department of environmental quality engineering shall take into consideration the provisions of this act and all actions taken pursuant to this act, and require each licensee to provide evidence of financial responsibility in a reasonable amount, in addition to that provided by the insolvency fund.
SECTION 4. If the insolvency fund or the commissioner have received no notice of the filing of an action pursuant to section nineteen of chapter twenty-one C of the General Laws on or before July first, nineteen hundred and eighty-seven, the insolvency fund shall cease to exist.
SECTION 4A. There is hereby established a special commission to consist of four members of the senate, four members of the house of representatives, the secretary of environmental affairs or his designee, the secretary of consumer affairs or his designee, one person to be designated by the associated industries of Massachusetts, a representative of the liability insurance industry, a representative of the hazardous waste industry and a representative of an environmental protection association, and four persons to be appointed by the governor for the purpose of making an investigation and study of hazardous waste insurance which shall study the availability and cost of liability insurance for hazardous waste facilities in the commonwealth and potential solutions to any problems of unavailability or unaffordability of such insurance.
Said commission shall report the results of its investigation and study and its recommendations, if any, together with drafts of legislation necessary to carry such recommendations into effect, by filing the same with the clerk of the senate on or before July first, nineteen hundred and eighty-six. Said clerk shall forward copies of said report to the joint committee on insurance and the house and senate committees on ways and means.
SECTION 5. Nothing in this act shall be construed to diminish or alter in any way the periods of limitations of actions set forth in chapter two hundred and sixty of the General Laws.
SECTION 6. Section one of this act shall take effect as of January first, nineteen hundred and eighty-six and section two shall take effect on July first, nineteen hundred and eighty-seven.