Sec. 361.702. EXCLUSION OF LENDERS NOT PARTICIPANTS IN MANAGEMENT

(a) In Section 361.271, the term "owner or operator" does not include a person that is a lender that:

(1) without participating in the management of a solid waste facility, holds a security interest in or with regard to the solid waste facility; or

(2) did not participate in management of a solid waste facility before foreclosure, notwithstanding the fact that the person:

(A) forecloses on the solid waste facility; and

(B) after foreclosure, sells, re-leases, in the case of a lease finance transaction, or liquidates the solid waste facility, maintains business activities, winds up operations, undertakes a response action with respect to the solid waste facility under the national contingency plan adopted under 42 U.S.C. Section 9605, under a commission-approved cleanup plan, or under the direction of an on-scene coordinator appointed under the national contingency plan or a commission-approved cleanup plan, or takes any other measure to preserve, protect, or prepare the solid waste facility before sale or disposition, if the person seeks to sell, re-lease, in the case of a finance transaction, or otherwise divest the person of the facility at the earliest practicable, commercially reasonable time, on commercially reasonable terms, taking into account market conditions and legal and regulatory requirements.

(b) For purposes of Subsection (a)(2)(B), a lender is presumed to divest the lender of the solid waste facility at the earliest practicable, commercially reasonable time if, within 12 months after foreclosure, the lender:

(1) lists the solid waste facility with a broker, dealer, or agent who deals in that type of property; or

(2) advertises the solid waste facility for sale or other disposition at least monthly in:

(A) a real estate publication;

(B) a trade or other publication appropriate for the solid waste facility being advertised; or

(C) a newspaper of general circulation in the area in which the solid waste facility is located.

(c) For purposes of Subsection (b), the 12-month period begins:

(1) when the lender acquires marketable title if the lender, after the expiration of any redemption period or other waiting period required by law, was acting diligently to acquire marketable title; or

(2) on the date of foreclosure or its equivalent if the lender does not act diligently to acquire marketable title.

(d) Except as otherwise provided by Subchapter I, Chapter 26, Water Code, or rules adopted under that subchapter, a lender is not liable under this code or the Water Code to undertake a removal or remedial action or to pay a fine or penalty arising from the release or threatened release of solid waste at, from, or in connection with the solid waste facility in which the lender maintains a security interest or that the lender has acquired through foreclosure if:

(1) the lender has not participated in management before foreclosure;

(2) the conditions giving rise to the release or threat of release existed before foreclosure; and

(3) the lender seeks to divest the lender of the property under Subsections (a)(2)(B) and (b).

(e) Notwithstanding Subsection (d), if a lender after foreclosure operates, directs the operation of, or maintains the operation of business activities, this section does not exempt or excuse the lender from compliance with legal requirements applicable to the operation of that business. Those operational requirements include permitting, reporting, monitoring, compliance with emission limitations, financial responsibility and assurance requirements, payment of fees, and payment of fines and penalties for noncompliance with those requirements.

Added by Acts 1997, 75th Leg., ch. 793, Sec. 15, eff. Sept. 1, 1997.