BILL NUMBER: AB 254 CHAPTERED 10/07/01 CHAPTER 548 FILED WITH SECRETARY OF STATE OCTOBER 7, 2001 APPROVED BY GOVERNOR OCTOBER 5, 2001 PASSED THE ASSEMBLY AUGUST 30, 2001 PASSED THE SENATE AUGUST 27, 2001 AMENDED IN SENATE AUGUST 20, 2001 AMENDED IN SENATE JULY 5, 2001 AMENDED IN ASSEMBLY MAY 31, 2001 AMENDED IN ASSEMBLY APRIL 26, 2001 AMENDED IN ASSEMBLY MARCH 29, 2001 INTRODUCED BY Assembly Member Frommer FEBRUARY 14, 2001 An act to amend Sections 25264, 25395.20, 25395.21, 25395.22, 25395.25, 25395.26, and 25395.29 of, to add Section 25395.28 to, and to repeal and add Section 25395.27 of, the Health and Safety Code, relating to hazardous materials, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 254, Frommer. Brownfields loans: CLEAN program. (1) Under existing law, the Site Designation Committee in the California Environmental Protection Agency is authorized to designate an administering agency for oversight of a remedial action to a hazardous substance release. Existing law requires the administering agency to supervise the site investigation and remedial action conducted by the responsible party and, upon determining that the site investigation and remedial action has been satisfactorily completed, to issue a certificate of completion to the responsible party. Existing law prohibits any agency that has jurisdiction over a hazardous materials release from taking any action against a responsible party with respect to the hazardous materials release for which a certificate of completion is issued. Existing law prohibits an administering agency from taking action against a responsible party with respect to the hazardous materials release for which a certificate of completion is issued unless specified conditions apply and provides that the administering agency is the sole agency responsible for determining if any of those conditions apply to such a hazardous materials release site. Existing law authorizes an agency to petition the chairperson of the committee to review, among other things, the failure of the administering agency to act pursuant to its authority under that provision. This bill would revise those provisions to instead expressly specify that, except with regard to that petition process, no agency other than the administering agency, may take action against a responsible party with regard to such a release site. The bill would authorize as administering agency to take such an action, but only if the administering agency determines that one of those conditions applies. (2) Existing law requires the Department of Toxic Substances Control, with the approval of the Secretary for Environmental Protection, to establish the Investigating Site Contamination Program to provide loans to conduct preliminary endangerment assessments of brownfields and underutilized property, as defined, and the Cleanup Loans and Environmental Assistance to Neighborhoods Program (CLEAN), to provide loans to finance the performance of actions necessary to respond to the release or threatened release of hazardous material on an eligible property. Existing law defines the terms "brownfield" and "underutilized property" as property that meets specified conditions, including being located in an urbanized area, as defined. Existing law provides procedures for the approval of, and repayment of, a loan under these programs. Under existing law, the Cleanup Loans Environmental Assistance to Neighborhoods Account in the General Fund is continuously appropriated to the department to provide loans under those programs, except that the department and the Environmental Protection Agency are authorized to expend funds in the account for administration only upon the appropriation of funds for that purpose. Existing law requires the department to serve as the administering agency for any site that is the subject of a loan. This bill would revise the definitions of the terms "brownfield" and "underutilized property" to instead include property that is located in an urban area, as defined. The bill would provide that the money in the account may be expended by the department, California regional water quality control board, State Water Resources Control Board, or California Environmental Protection Agency for implementation costs, upon appropriation by the Legislature, and would define the term "implementation costs" to include the costs of overseeing and reviewing preliminary endangerment assessments and response actions, and certain oversight conducted by the regional board or state board. The bill would provide that a loan recipient is not liable for paying the department's, regional board's, or state board's costs associated with the oversight of preliminary endangerment assessment preparation and approval or the oversight of a response action at a site, if the department determines there are sufficient funds in the account to reimburse the department, regional board, or state board for that oversight. If the department determines that the account has insufficient funds to pay for those oversight costs, the bill would require the loan recipient to pay the department the amount of those costs. The bill would also authorize the recipient of a loan to finance a response action to also use those loan funds to pay a premium for a specified environmental insurance product from any insurance company that meets specified requirements. The bill would also make various technical changes regarding the approval and repayment of the loans and the agreement required to be executed by the loan recipient with the department. The bill would provide that the administering agency for a site that is subject to a release from a leaking underground fuel tank where the release from that tank is the principal threat at the property, is to be a regional board, the state board, or a specified local oversight program. The bill would require the department to notify the regional board and the state board with regard to certain loan applications. The bill would specify procedures for the selection of an oversight agency for such a site and would require the regional board or state board to provide specified information to the department regarding the status of a response action subject to this procedure. (3) Existing law authorizes the department to adopt emergency regulations to implement the CLEAN program and requires the regulations to be repealed 180 days after their effective date. This bill would authorize the department to adopt emergency regulations to implement the changes made by the bill and would repeal the regulations 180 days after their effective date unless the regulations are readopted. The bill would require the Office of Administrative Law to consider those regulations to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. (4) The bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 25264 of the Health and Safety Code is amended to read: 25264. (a) The administering agency for a hazardous materials release site shall supervise all aspects of a site investigation and remedial action conducted by the responsible party and, for that purpose, the administering agency shall, notwithstanding any other provision of law, including, but not limited to, this division and Division 7 (commencing with Section 13000) of the Water Code, have sole jurisdiction over all activities that may be required to carry out a site investigation and remedial action necessary to respond to the hazardous materials release at the site. For purposes of this chapter, the administering agency shall do all of the following: (1) Administer all state and local laws, ordinances, regulations, and standards that are applicable to, and govern, the activities involved with the site investigation and remedial action at the site. (2) Determine the adequacy of site investigation and remedial action activities at the site and the extent to which the activities comply, or fail to comply, with applicable state and local laws, ordinances, regulations, and standards. In making these determinations, the administering agency shall consult with the advisory team if one has been convened pursuant to Section 25263. (3) Issue permits or other forms of authorization that may be required by state and local laws, ordinances, and regulations and that are necessary to undertake activities related to the site investigation and remedial action at the site. Before issuing a permit or other authorization pursuant to this paragraph, the administering agency shall consult with the appropriate agency and ensure that required procedures are followed and adequate permit requirements and conditions are imposed. (b) Upon determining that a site investigation and remedial action at a hazardous materials release site has been satisfactorily completed and that a permanent remedy to the release has been accomplished, the administering agency shall issue the responsible party a certificate of completion. The certificate shall describe the release of hazardous materials that was the subject of the remedial action and the remedial action that was taken and shall certify that applicable remedial action standards and objectives were achieved. (c) Except as otherwise provided in Section 25265 and this subdivision, the issuance of a certificate of completion by the administering agency shall constitute a determination that the responsible party has complied with the requirements of all state and local laws, ordinances, regulations, and standards that are applicable to the site investigation and remedial action for which the certificate is issued. Except as provided in Section 25265, no agency, other than the administering agency, that has jurisdiction over hazardous materials releases pursuant to those state and local laws, ordinances, or regulations may take action against the responsible party with respect to the hazardous materials release that was the subject of the site investigation and remedial action for which a certificate of completion is issued and the administering agency may take action against the responsible party with respect to the hazardous materials release that was the subject of the site investigation and remedial action for which a certificate of completion is issued only if the administering agency determines that one or more of the following applies: (1) Monitoring, testing, or analysis of the hazardous materials release site subsequent to the issuance of the certificate of completion indicates that the remedial action standards and objectives were not achieved or are not being maintained. (2) One or more of the conditions, restrictions, or limitations imposed on the site as part of the remedial action or certificate of completion are violated. (3) Site monitoring or operation and maintenance activities that are required as part of the remedial action or certificate of completion for the site are not adequately funded or are not properly carried out. (4) A hazardous materials release is discovered at the site that was not the subject of the site investigation and remedial action for which the certificate of completion was issued. (5) A material change in the facts known to the administering agency at the time the certificate of completion was issued, or new facts, causes the administering agency to find that further site investigation and remedial action are required in order to prevent a significant risk to human health and safety or to the environment. (6) The responsible party induced the administering agency to issue the certificate of completion by fraud, negligent or intentional nondisclosure of information, or misrepresentation. (d) (1) Except as provided in Section 25265, the administering agency shall be the sole agency responsible for determining if any of the conditions described in paragraphs (1) to (6), inclusive, of subdivision (c) are applicable to a hazardous materials release site for which a certificate of completion has been issued pursuant to subdivision (b), and for taking any action that is deemed necessary if that determination is made. Any agency, other than the administering agency, that has information that any of those conditions applies to the hazardous materials site shall provide the administering agency with that information and the administering agency shall, within 45 calendar days of receipt of the request, do all of the following: (A) Determine whether the condition is applicable. (B) If it is applicable, determine if further action at the site is warranted. (C) If further action is warranted, take further action at the site as may be necessary. (2) If the administering agency fails, or refuses, to act properly or in a timely manner, as required by this subdivision, the agency that provided the information to the administering agency may petition the committee for review in accordance with Section 25265. The decision of the committee shall be final, and shall not be subject to judicial review. SEC. 2. Section 25395.20 of the Health and Safety Code is amended to read: 25395.20. (a) For purposes of this article, the following definitions shall apply: (1) "Account" means the Cleanup Loans and Environmental Assistance to Neighborhoods Account established pursuant to subdivision (b). (2) (A) "Brownfield" means property that meets all of the following conditions: (i) It is located in an urban area. (ii) It was previously the site of an economic activity that is no longer in operation at that location. (iii) It has been vacant or has had no occupant engaged in year-round economically productive activities for a period of not less than the 12 months previous to the date of application for a loan pursuant to this article. (B) "Brownfield" does not include any of the following: (i) Property listed, or proposed for listing, on the National Priorities List pursuant to the federal act (42 U.S.C. Sec. 9605 (a) (8)(B)). (ii) Property that is, or was, owned or operated by a department, agency, or instrumentality of the United States. (iii) Property that will be the site of a contiguous expansion or improvement of an operating industrial or commercial facility. (3) "Cleanup and abatement order" means an order issued by a regional board pursuant to Section 13304 of the Water Code. (4) "Cleanup Loans and Environmental Assistance to Neighborhoods Program" or "CLEAN" means the loan program established by the department pursuant to Section 25395.22, to finance the performance of actions necessary to respond to the release or threatened release of hazardous material on an eligible property. (5) "Economic activity" means a governmental activity, a commercial, agricultural, industrial, or not-for-profit enterprise, or other economic or business concern. (6) "Eligible property" means a site that is either of the following: (A) A brownfield. (B) An underutilized property that is any of the following: (i) A property described in clause (v) of subparagraph (D) of paragraph (14). (ii) A property located in an enterprise zone established pursuant to the Enterprise Zone Act (Chapter 12.8 (commencing with Section 7070) of Division 7 of Title 1 of the Government Code), in a project area for which a redevelopment plan has been approved pursuant to Article 4 (commencing with Section 33300) of Chapter 4 of Part 1 of Division 24, or in an eligible area, as determined by the Trade and Commerce Agency pursuant to paragraph (2) of subdivision (c) of Section 7072 of the Government Code. (iii) A property, the redevelopment of which will result in any of the following: (I) An increase in the number of full-time jobs that is at least 100 percent greater than the number of jobs provided by the economic activity located on the property before redevelopment occurred. (II) An increase in property taxes paid to the local government that is at least 100 percent greater than the property taxes paid by the property owner before redevelopment occurred. (III) Sales tax revenues to the local government that are sufficient to defray the costs of providing municipal services to the property after the redevelopment occurs. (IV) Housing that is affordable to very low, low-, or moderate-income households, as defined in paragraph (2) of subdivision (h) of Section 65589.5 of the Government Code. (V) The construction of new or expanded school facilities, public day care centers, parks, or community recreational facilities. (C) "Eligible property" does not include any of the following: (i) Property listed or proposed for listing on the National Priorities List pursuant to the federal act (42 U.S.C. Sec. 9605 (a) (8)(B)). (ii) Property that is, or was, owned or operated by a department, agency, or instrumentality of the United States. (iii) Property that will be the site of a contiguous expansion or improvement of an operating industrial or commercial facility. (7) (A) "Hazardous material" means a substance or waste that, because of its physical, chemical, or other characteristics, may pose a risk of endangering human health or safety or of degrading the environment. "Hazardous material" includes, but is not limited to, all of the following: (i) A hazardous substance, as defined in Section 25281 or 25316, including the substances specified in Section 25317. (ii) A hazardous waste, as defined in Section 25117. (iii) A waste, as defined in Section 101075, or as defined in Section 13050 of the Water Code. (B) "Hazardous material" does not include undisturbed naturally occurring hazardous material unless it will adversely affect the reasonable use of a property after response action is completed. (8) "Implementation costs," for purposes of the expenditure of any funds pursuant to this article, includes, but is not limited to, the costs of overseeing and reviewing preliminary endangerment assessments and response actions that are financed by a loan issued pursuant to this article, including oversight conducted by a regional board or state board pursuant to Section 25395.28. (9) "Investigating site contamination program" means the loan program established by the department pursuant to Section 25395.21 to conduct a preliminary endangerment assessment of a brownfield or an underutilized urban property. (10) "Leaking underground fuel tank" has the same meaning as "tank," as defined in Section 25299.24. (11) "No longer in operation" means an economic activity that is, or previously was, located on a property that is not conducting operations on the property of the type usually associated with the economic activity. (12) "Project" means any response action, and the planned future development, included in an application for a loan pursuant to Section 25395.22. (13) "Property" means real property, as defined in Section 658 of the Civil Code. (14) "Underutilized property" means property that meets all of the following conditions: (A) It is located in an urban area. (B) An economic activity is conducted on the property. (C) It is the subject of a proposal for development pursuant to this article. (D) One of the following applies: (i) The economic activity on the property is irregular or intermittent in nature and uses the property for productive purposes less than four months in any calendar year. (ii) The economic activity on the property employs less than 25 percent of the property for productive purposes. (iii) The structures, infrastructure, and other facilities on the property are antiquated, obsolete, or in such poor repair that they cannot be used for the purposes for which they were originally constructed and require replacement in order to implement the redevelopment proposal. (iv) The economic activity conducted on the property is a parking facility or an activity that offers a similar marginal economic service and the facility or activity will be replaced when the property is redeveloped. (v) The property is adjacent to one or more brownfields that are the subject of a project under this article and its inclusion in the project is necessary in order to ensure that the redevelopment of the brownfield or brownfields occurs. (E) An underutilized property does not include any of the following: (i) Property listed or proposed for listing on the National Priorities List pursuant to the federal act (42 U.S.C. Sec. 9605 (a) (8)(B)). (ii) Property that is, or was, owned or operated by a department, agency, or instrumentality of the United States. (iii) Property that will be the site of a contiguous expansion or improvement of an operating industrial or commercial facility. (15) "Regional board" means a California regional water quality control board. (16) "State board" means the State Water Resources Control Board. (17) "Urban area" means either of the following: (A) A central city or a group of contiguous cities with a population of 50,000 or more, together with adjacent densely populated areas having a population density of at least 1,000 persons per square mile. (B) An urbanized area, as defined in paragraph (2) of subdivision (b) of Section 21080.7 of the Public Resources Code. (b) The Cleanup Loans and Environmental Assistance to Neighborhoods Account is hereby established in the General Fund to provide low-interest loans to qualified applicants for the purpose of funding preliminary endangerment assessments and response actions at brownfields and underutilized properties located in the state pursuant to this article. All of the following moneys shall be deposited in the account: (1) Funds appropriated by the Legislature for the purposes of this article. (2) Notwithstanding Section 16475 of the Government Code, any interest earned upon money deposited into the account. (3) Proceeds from loan repayments. (4) Proceeds from the sale of property pursuant to this article that is the subject of foreclosure or its equivalent, as defined in subdivision (f) of Section 25548.1, and proceeds from the enforcement of any other security interest. (c) (1) Except as provided in paragraph (2), notwithstanding Section 13340 of the Government Code, the money in the account is continuously appropriated without regard to fiscal years to the department for the purpose of providing loans pursuant to Sections 25395.21 and 25395.22. (2) The money in the account may be expended by the department, a regional board, the state board, and the agency for the implementation and administration of this article only upon appropriation by the Legislature in the annual Budget Act or in another measure. SEC. 3. Section 25395.21 of the Health and Safety Code is amended to read: 25395.21. (a) The department, with the approval of the secretary, shall establish an Investigating Site Contamination Program to provide loans to eligible persons to conduct preliminary endangerment assessments of brownfields and underutilized properties. A loan provided pursuant to this section shall not be used for the cost of a phase I environmental assessment or the department's oversight of the preparation and approval of the preliminary endangerment assessment. (b) The department shall develop a loan application form for an investigating site contamination program loan and shall include, in the form, any provisions that the department considers to be appropriate. The application form shall be signed by the loan applicant and shall be submitted to the department with all of the following documentation: (1) The phase I environmental assessment for the property that is the subject of the loan application. (2) Information that demonstrates that the property is a brownfield or an underutilized property. (3) If the owner of the property that is the subject of the loan application is not the loan applicant, one of the following: (A) Documentation that demonstrates that the owner consents to the performance of the preliminary endangerment assessment of the property. (B) A copy of an agreement between the property owner and the loan applicant that gives the loan applicant an option to purchase the property. (C) If the loan applicant is a local government entity, or a developer or prospective purchaser acting together with a local government entity pursuant to an enforceable agreement, a demonstration to the department that the local government entity, or developer or prospective purchaser acting together with the local government entity pursuant to an enforceable agreement, has legal access to perform the preliminary endangerment assessment at the property, or will have legal access, prior to receiving loan funds. (4) Any other information the department deems necessary. (c) The department shall determine whether to approve a loan application pursuant to this section based upon the information submitted pursuant to subdivision (b). In making a decision regarding whether to approve a loan application, the department shall approve a loan pursuant to this section for a property only if the department determines the property is a brownfield or an underutilized property. (d) The maximum amount of a loan granted pursuant to this section shall not exceed one hundred thousand dollars ($100,000). (e) (1) Except as provided in paragraph (2) and in subdivision (f), upon approval of the loan application by the department, the loan recipient shall execute an agreement with the department to repay the loan over a period not to exceed three years. (2) If the loan is to a local government entity, or to a developer or prospective purchaser acting together with a local government entity pursuant to an enforceable agreement, the department may delay the beginning of the loan repayment period. (3) Except as provided in paragraph (4), the agreement made pursuant to paragraph (1) shall require that if the loan recipient recovers from a responsible party any costs incurred in taking a response action at the site that is the subject of the loan application, any money so recovered, except for reasonable costs and the fees incurred to recover that money, shall be used first to repay the loan or repay the grant. (4) Notwithstanding paragraph (3), a loan recipient is not required to first use the money recovered to repay the loan or grant, if the recipient can demonstrate, to the satisfaction of the department, that the recovered money is necessary to, and is being applied to, the total environmental remediation of the property, and that the total of the recovered money and the loan amount does not exceed the cost of remediation. (f) If a loan recipient who is not the owner of the property and the department determine, after the completion of the preliminary endangerment assessment, that the sum of the cost of remediation and the property purchase price makes the redevelopment of the property not economically feasible, the department may waive the repayment of up to 75 percent of the loan, and the amount waived shall be deemed a grant to the loan recipient. If the department waives the repayment of part of the loan, the recipient shall repay the remaining portion of the loan within one year of that waiver. (g) Upon approval of a loan, the recipient shall enter into an agreement with the department for the department to provide regulatory oversight of the preparation and approval of the preliminary endangerment assessment. (h) Notwithstanding any requirement of this division regarding cost recovery or reimbursement for oversight costs, a loan recipient is not liable for paying the department's cost associated with the oversight of the preparation and approval of the preliminary endangerment assessment if the department determines there are sufficient funds in the account to reimburse the department for that oversight. If the department determines that the account has insufficient funds to pay for the oversight costs associated with the oversight of the preparation and approval of the preliminary endangerment assessment, the loan recipient shall pay the department the amount of those costs. SEC. 4. Section 25395.22 of the Health and Safety Code is amended to read: 25395.22. (a) The department, with the approval of the secretary, shall establish a Cleanup Loans and Environmental Assistance to Neighborhoods Program to provide loans to finance the performance of any action necessary to respond to the release or threatened release of hazardous material at an eligible property. A recipient of a loan to perform an action to respond to a release or threatened release of a hazardous material at an eligible property that is granted pursuant to this section may also use the loan funds to pay the premium for environmental insurance products to facilitate the development of the site, if the insurance company has an A.M. Best Financial Strength Rating of A+ or better and an A.M. Best Financial Size Category of FSC X or larger and is authorized to offer environmental insurance in California. The department shall take those necessary actions to promote the use of loans under the CLEAN program by local governments. A loan provided pursuant to this section shall not be used to pay for a phase I environmental assessment, a preliminary endangerment assessment, the department's oversight of actions necessary to respond to the release or threatened release of hazardous material at an eligible property, or any operation and maintenance activity at a site. (b) The department shall develop an application form for a loan under the CLEAN program and shall include, in the form, any provisions that the department determines to be appropriate to carry out the CLEAN program. The application shall be signed by the loan applicant and shall be accompanied by all of the following: (1) A preliminary endangerment assessment that has been approved by the department, or an environmental assessment with equivalent information, that discloses the presence of a release or threatened release of a hazardous material at the property at concentrations that may pose a risk to public health and safety and the environment. (2) The name and address of the project coordinator for the site and the resume of the coordinator that demonstrates that the coordinator possesses the requisite qualifications to manage the response action at the site. (3) Documentation that the property is an eligible property and, if the department has implemented the priority scoring system set forth in Section 25395.23, sufficient information to enable the department to determine the priority score for the property. (4) Documentation that the planned future development of the site is consistent with the current and reasonably foreseeable future land uses of the property. (5) If the owner of the eligible property that is the subject of the loan application is not the loan applicant, one of the following: (A) Documentation that demonstrates that the owner agrees to use the property as a security interest for the loan to finance necessary response action at the property. (B) A copy of an agreement between the property owner and the loan applicant that gives the loan applicant an option to purchase the property. (C) If the loan applicant is a local government entity, or a developer or prospective purchaser acting in concert with a local government entity pursuant to an enforceable agreement, a demonstration to the department that the local government entity, or developer or prospective purchaser acting in concert with a local government entity pursuant to an enforceable agreement, has legal access to perform any action necessary to respond to the release or threatened release of hazardous material at an eligible property, or will have legal access, prior to receiving loan funds. (6) Any other information the department deems necessary. SEC. 5. Section 25395.25 of the Health and Safety Code is amended to read: 25395.25. Upon the approval of a loan pursuant to Section 25395.23, the loan recipient shall do both of the following: (a) Enter into an agreement with the department to repay the loan over a period of not more than seven years. If the loan is to a local government entity, or to a developer or prospective purchaser acting together with a local government entity pursuant to an enforceable agreement, the department may delay the beginning of the loan repayment period. (1) The agreement shall include those terms and conditions that the department deems appropriate. (2) (A) The agreement shall require that if the loan recipient recovers from a responsible party any costs incurred in taking a response action at the site that is the subject of the response action pursuant to the agreement, the loan recipient shall use the recovered money, except for reasonable costs and the fees incurred to recover that money, first to satisfy the loan. (B) Notwithstanding subparagraph (A), a loan recipient is not required to first use the money recovered to repay the loan or grant, if the recipient can demonstrate, to the satisfaction of the department, that the recovered money is necessary to, and is being applied to, the total environmental remediation of the property, and that the total of the recovered money and the loan amount does not exceed the cost of remediation. (b) (1) Enter into an agreement with the department or with the regional board or state board pursuant to Section 25295.28 for the oversight and approval of the response action at the site. This agreement shall be provided to the department before the department may release any loan funds to the loan recipient. This agreement shall include any necessary conditions and assurances to ensure compliance with post-completion ongoing operation and maintenance activities, and any necessary institutional controls on future uses of the property. (2) Notwithstanding any requirement of this division regarding cost recovery or reimbursement for oversight costs, a loan recipient is not liable for paying the department's costs pursuant to this article or the regional board's or state board's costs pursuant to Section 25395.28 associated with the oversight of the response action at the site subject to the agreement, if the department determines there are sufficient funds in the account to reimburse the department costs pursuant to this article or the regional board's or state board's costs pursuant to Section 25395.28 for that oversight. If the department determines that the account has insufficient funds to pay for the oversight costs associated with the oversight of the response action at the site subject to the agreement, the loan recipient shall pay the department's costs pursuant to this article or the regional board's or state board's costs pursuant to Section 25395.28 for the amount of those costs. SEC. 6. Section 25395.26 of the Health and Safety Code is amended to read: 25395.26. (a) A loan approved pursuant to Section 25395.23 shall be secured by the property subject to the release or threatened release of the hazardous material on which the response action will be taken or by another form of security that the department determines will adequately protect the state's interest. The department shall obtain an appropriate security interest in the property or other alternative form of security approved by the department. The department may foreclose on property, or the alternative form of security approved by the department, that is subject to a security interest pursuant to this section. Any funds received through a foreclosure or through the enforcement of any other security interest pursuant to this article shall be deposited in the account. (b) The state, the secretary, the department, and the account are not liable under any state or local statute, regulation, or ordinance because the department holds the security interest identified in subdivision (a) or because the department acquired property through foreclosure or its equivalent in satisfaction of a loan issued pursuant to this article. (c) Chapter 6.96 (commencing with Section 25548) does not apply to the state, the secretary, the department, the agency, or the account with regard to a loan secured pursuant to subdivision (a). (d) (1) Notwithstanding any other provision of law, no approval or review shall be required from the Department of General Services to obtain any security interest or exercise any rights, including, but not limited to, foreclosure, under any security interest or other agreement made pursuant to this article. (2) The acquisition of a property pursuant to this article through foreclosure or its equivalent is not subject to Article 2 (commencing with Section 14660) of Chapter 2 of Part 5.5 of Division 3 of Title 2 of the Government Code. (3) The department shall promptly dispose of any property acquired through the exercise of any security interest pursuant to this article at the property's current market value and the disposal of this property is exempt from Section 11011.1 of the Government Code and Article 8 (commencing with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title 5 of the Government Code. (e) This article shall not be construed to limit, extend, or affect local land use and zoning authority. SEC. 7. Section 25395.27 of the Health and Safety Code is repealed. SEC. 8. Section 25395.27 is added to the Health and Safety Code, to read: 25395.27. (a) (1) Except as provided in subdivisions (a) and (b) of Section 25395.28, any response action carried out under this article shall be conducted in accordance with the requirements of this chapter and Chapter 6.65 (commencing with Section 25260). However, for purposes of Section 25262, the administering agency for any site that is the subject of a loan under this article shall either be the department pursuant to this article, or a regional board, the state board, or a local oversight program agency under contract with the state board pursuant to Section 25395.28, and a person shall not request that a different agency be designated as an administering agency for the site under Chapter 6.65 (commencing with Section 25260). (2) For purposes of this section, the Site Designation Committee created by Section 25261 is not required to meet and formally designate the department, a regional board, the state board, or a local oversight program agency under contract with the state board, as specified in Section 25395.28, as the administering agency pursuant to Section 25262 for a site that is the subject of a loan under this article. Upon the approval of a loan under Section 25395.23, the department shall notify the Site Designation Committee of the administering agency for the site. (b) For sites that are the subject of a loan under this article, all references in this chapter to a hazardous substance shall be deemed to be a reference to a hazardous material. (c) Except as provided in subdivisions (a) and (b) of Section 25395.28, this chapter shall apply to a site that is the subject of a loan under this article, regardless of whether the site is on the list created pursuant to Section 25356. (d) Except as provided in Section 25264, this article shall not be construed to limit the authority of the department, the regional board, or the state board to take any action otherwise authorized under any other provision of law. (e) The department shall post, and update at least monthly, a list of loan applications received pursuant to this article on the department's Internet website. The list shall include the name of the applicant, the location of the property that is the subject of the loan application, the administering agency, and a contact at the department for further information. The department shall also annually post on that website a summary of the response action status for each site with a loan approved under Section 25395.23. SEC. 9. Section 25395.28 is added to the Health and Safety Code, to read: 25395.28. (a) (1) Except as provided in paragraph (2) and subdivision (b), upon the request of a regional board or the state board, the administering agency for any site that is the subject of a loan approved under Section 25395.23 shall be a regional board, the state board, or a local oversight program agency under contract with the state board in accordance with Chapter 6.7 (commencing with Section 25280) and Chapter 6.75 (commencing with Section 25299.10), if the property is subject to a release from a leaking underground fuel tank and the release from the leaking underground fuel tank is the principal threat at that property, as determined by the regional board, the state board, and the department. (2) If the site specified in paragraph (1) was not subject to oversight by a local oversight program agency prior to the date the loan application was submitted to the department pursuant to Section 25395.22, the regional board shall serve as the administering agency. (3) Any response action for a property subject to this subdivision for a leaking underground fuel tank shall be carried out under Chapter 6.65 (commencing with Section 25260), Chapter 6.7 (commencing with Section 25280), and Chapter 6.75 (commencing with Section 25299.10). (b) (1) Upon the request of a regional board, the regional board shall be the administering agency for a property specified in subdivision (a), if the site is subject to one or more of the following orders or agreements under Division 7 (commencing with Section 13000) of the Water Code prior to the date the loan application was submitted to the department pursuant to Section 25395.22: (A) A cleanup and abatement order. (B) Other cleanup order issued by a regional board. (C) A written voluntary agreement with a regional board. (2) Any response action for a site subject to this subdivision shall be carried out pursuant to Chapter 6.65 (commencing with Section 25260). (c) Notwithstanding subdivisions (a) and (b), the regional board and the state board, in consultation with the department, may request the department to be the administering agency for a property subject to this section. (d) Notwithstanding subdivision (b), if a regional board has issued a cleanup order or entered into a written voluntary agreement under Division 7 (commencing with Section 13000) of the Water Code for a site and the department has issued an order or entered into an enforceable agreement under Chapter 6.5 (commencing with Section 25100) or Chapter 6.8 (commencing with Section 25300), the regional board and the department shall consult and determine which agency shall be the administering agency for the site under this article. (e) The department shall provide a written notice of the receipt of a loan application under Section 25395.22, including the name and address of the loan applicant and the location of the property, to both of the following: (1) A regional board for any property within that regional board's jurisdiction. (2) The state board for any property that contains a leaking underground fuel tank. (f) The regional board or state board shall respond with a written notice to the department within 20 working days after receipt of the notice or information provided pursuant to subdivision (e) indicating whether the regional board or a local oversight program agency under contract with the state board will oversee the response action pursuant to this section. If the regional board or state board does not provide this notice within that time period, the regional board or state board shall be deemed to have elected not to oversee the response action. (g) (1) If a regional board or a local oversight program agency under contract with the state board oversees a response action pursuant to this section, the department shall reimburse the regional board or state board from the account for oversight costs, if all of the following occur: (A) The department determines, pursuant to paragraph (2) of subdivision (b) of Section 25395.25, that there are sufficient funds in the account. (B) The department receives the report required upon completion of the response action under subdivision (i). (C) The regional board or a local oversight program agency under contract with the state board, as appropriate, certifies that it is not eligible to be reimbursed for oversight costs from any other fund or account, including, but not limited to, the Underground Storage Tank Cleanup Fund pursuant to Chapter 6.75 (commencing with Section 25299.10). (2) If the department determines pursuant to paragraph (2) of subdivision (b) of Section 25395.25 that the account has insufficient funds, the regional board or state board shall recover its oversight costs from the loan recipient, and the department shall not be liable for these oversight costs. (h) If a regional board or a local oversight program agency under contract with the state board oversees a response action pursuant to this section, the recipient of a loan approved pursuant to Section 25395.23 shall enter into an agreement with the regional board or the state board under paragraph (1) of subdivision (b) of Section 25395.25 for the oversight and approval of the response action at the site, prior to the release of loan funds by the department. The agreement shall meet the requirements specified in the regulations adopted pursuant to Section 25395.29. (i) If the regional board or a local oversight program agency under contract with the state board serves as the administering agency pursuant to this section, the regional board or the state board shall do both of the following: (1) Annually provide information to the department about the status of the response action, including any response action decision document that includes limitations on land use or other institutional controls. (2) Notify the department upon completion of the response action. (j) This section does not apply to any site subject to Chapter 1 (commencing with Section 17210) of Part 10.5 of Division 1 of Title 1 of the Education Code. SEC. 10. Section 25395.29 of the Health and Safety Code is amended to read: 25395.29. (a) The department may adopt regulations to implement this article as emergency regulations. The Office of Administrative Law shall consider those regulations to be necessary for the immediate preservation of the public peace, health and safety, and general welfare for purposes of Section 11349.6 of the Government Code. Notwithstanding the 120-day limitation in subdivision (e) of Section 11346.1 of the Government Code, the emergency regulations adopted or amended pursuant to this subdivision shall be repealed 180 days after the effective date of the regulations, unless the secretary or the department readopts those regulations, in whole or in part, in compliance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. (b) The department may adopt emergency regulations to implement the changes made by the act of the 2001-02 Regular Session of the Legislature that amends this section. Notwithstanding the 120-day limitation specified in subdivision (e) of Section 11346.1 of the Government Code, the emergency regulations adopted or amended pursuant to this subdivision shall be repealed 180 days after the effective date of the regulations, unless the secretary or the department readopts those regulations, in whole or in part, in compliance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. The Office of Administrative Law shall consider the regulations adopted pursuant to this subdivision, to be necessary for the immediate preservation of the public peace, health and safety, and general welfare for purposes of Section 11349.6 of the Government Code. SEC. 11. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to clarify and strengthen various provisions of the CLEAN loan program, which finances response actions for the cleanup of brownfield sites, thereby protecting public health and safety and the environment as soon as possible, it is necessary that this act take effect immediately.