§ 271.386. Environmental impairment trust funds; general—
municipalities and municipal authorities.(a) A trust fund may be established by the applicant to provide for payment of third-party claims for bodily injury and property damage resulting from sudden and nonsudden accidental pollution occurrences arising from the operation of municipal waste landfills or resource recovery facilities, to comply with § 271.381 (relating to financial assurances requirements).
(b) The trust agreement shall be provided by the applicant to the trustee. The wording of the trust agreement shall be in a form prepared and approved by the Department. The applicant is not in compliance with this section until a fully executed original of the trust agreement has been submitted to the Department and the principal amount required by subsection (d) has been placed in the trust fund corpus. The trustee shall advise the Department, in writing, when the principal amount has been placed in the trust fund.
(c) The trust fund established under subsection (a) shall meet the following requirements:
(1) The trust fund shall be established for the express purpose of paying claims to third parties for bodily injury or property damage from sudden or nonsudden accidental pollution occurrences arising from the applicant’s operation of a municipal waste landfill or resource recovery facility.
(2) The trustee shall be an entity whose trust activities are examined and regulated by a state or Federal agency.
(3) The trust shall be irrevocable and shall continue until termination at the written agreement of the applicant and the trustee, except that the trust may not be terminated until 120 days after receipt by the Department of written notice to terminate the trust. The written notice shall be sent to the Department by certified mail, return receipt requested.
(4) The trust shall be established as a spendthrift trust and may not be subject to assignment, alienation, pledge, attachment, garnishment, sequestration, other legal process or to the claims of creditors.
(d) The trust fund shall be initially established in a principal amount of $2 million, exclusive of trustee compensation, fees for legal services rendered to the trustee and other charges or expenses of the trustee in administering the trust fund. The trust fund shall be maintained at least $2 million principal amount, and may not be reduced by the payment of claims.
(1) Payments made to establish the trust fund shall consist of cash or securities acceptable to the trustee.
(2) The trustee is not under a duty to collect from the applicant payments to establish the trust fund. The trustee is not responsible for the amount or adequacy of, nor is it the duty of the trustee to collect from the applicant, payments necessary to maintain the required principal amount in the trust fund.
(e) Money may not be paid out of the trust fund for third-party claims without the prior written order of the applicant. It is not the duty or responsibility of the trustee to determine the validity of a claim for which the applicant presents its written order to pay.
(f) The operator shall, without delay and with due diligence, investigate claims presented to or made against it by third parties for bodily injury or property damage from pollution occurrences arising out of the operation of the operator’s municipal waste landfill or resource recovery facility. Upon the reduction of a claim to a final settlement or final judgment, the operator shall, without delay, give to the trustee its written order to pay.
(g) Claims made against or paid by the trust fund may not include the following:
(1) Administrative, investigative, legal defense or other costs incurred by the operator’s investigating or settling third-party claims.
(2) Damage to the operator’s property, whether or not damage arose from the pollution occurrence or from the operator’s efforts to mitigate the damage and irrespective of whether the mitigation efforts were taken pursuant to the orders, demands or requests of a government or regulatory authority having jurisdiction.
(3) Bodily injury to operator’s employes, to the extent that the bodily injury is covered by Workers’ Compensation or other insurance.
Source The provisions of this § 271.386 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.
Cross References This section cited in 25 Pa. Code § 271.382 (relating to forms of financial assurances—municipalities and municipal authorities).
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