BILL NUMBER: SB 493 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 6, 2003
AMENDED IN SENATE MARCH 24, 2003
INTRODUCED BY Senator Cedillo
FEBRUARY 20, 2003
An act to add Section 25400.5 Sections
25400.5, 25400.6, 25400.7, 25400.8, 25400.9, 25400.10, and 24500.11
to the Health and Safety Code, relating to hazardous materials.
LEGISLATIVE COUNSEL'S DIGEST
SB 493, as amended, Cedillo. Hazardous materials: liability.
Existing law, the Carpenter-Presley-Tanner Hazardous Substance
Account Act, imposes liability for hazardous substances removal or
remedial actions.
Existing law, including the Porter-Cologne Water Quality Control
Act and the provisions regulating hazardous waste and releases from
underground storage tanks, impose various requirements with regard to
corrective action and cleanup and abatement, upon persons subject to
those acts.
This bill would immunize provide that
an innocent purchaser or a bona fide prospective purchaser, as
defined in the federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA), from liability
under specified state or local laws for the cost of response
, is not liable for response costs under
specified state or local laws associated with a release or
threatened release of a hazardous material at a site, if the innocent
purchaser or bona fide prospective purchaser meets specified
conditions. The bill would also immunize a person from
liability under specified state or local laws provide
that a person is not liable for response costs associated with
a release or threatened release of a hazardous material from a site
that is not owned by that person, if the person owns real property
that is contiguous to, or otherwise similarly situated with respect
to, that site and the person complies with additional
specified requirements set forth in CERCLA .
The bill would, if there are unrecovered response costs incurred by
a lead agency, as defined, at a site for which an owner of the site
is not liable as a bona fide prospective purchaser, require the lead
agency to have a lien on the site, or authorize the lead agency to
obtain from the owner a lien on other property or other assurance of
payment for the unrecovered response costs, as specified.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25400.5 is added to the Health and Safety Code,
to read:
25400.5. (a) For the purposes of this section, the following
25400.5. For purposes of this chapter, the following terms
have the following meaning:
(1) "Applicable statute" means any of the following:
(A) Division 7 (commencing with Section 13000) of the Water Code.
(B) Chapter 6.5 (commencing with Section 25100), Chapter 6.7
(commencing with Section 25280), Chapter 6.75 (commencing with
Section 25299.10), and Chapter 6.8 (commencing with Section 25300).
(C) Any other state or local law providing liability for the
response costs associated with a release of a hazardous material.
(2) "Bona fide prospective purchaser" has the same meaning as
defined in paragraph (40) of Section 101 of the federal act (42
U.S.C. Sec. 9601(40)).
(3) "Innocent purchaser" means a person who meets the requirements
for the exemption from liability set forth in paragraph (3) of
subsection (b) of Section 107 of the federal act (42 U.S.C. Sec. 9607
(b)(3)).
(a) "Applicable statute" means a state or local law that imposes
liability for response costs on an owner or occupant of property
acquired January 1, 2004, for cleanup of preexisting pollution
conditions caused by a release of hazardous material on, under, or
adjacent to the property, including, but not limited to, all of the
following:
(1) Division 7 (commencing with Section 13000) of the Water Code.
(2) Chapter 6.5 (commencing with Section 25100), Chapter 6.7
(commencing with Section 25280), Chapter 6.75 (commencing with
Section 25299.10), and Chapter 6.8 (commencing with Section 25300).
(b) "Bona fide prospective purchaser" means a person or a tenant
of a person who acquires ownership of a site after January 1, 2004,
and that establishes all of the following by a preponderance of the
evidence:
(1) All disposal of hazardous materials at the site occurred
before the person acquired the site.
(2) The person made all appropriate inquiries into the previous
ownership and uses of the site in accordance with generally accepted
good commercial and customary standards and practices. One or more
of the following shall satisfy the "all appropriate inquiries"
requirement:
(A) Compliance with the procedures of the American Society for
Testing and Materials, including the document known as "Standard
E1527-001," entitled "Standard Practice for Environmental Site
Assessment: Phase I Environmental Site Assessment Process," in the
form of the document current at the time of the inquiry.
(B) Compliance with the standards and practices established by the
Administrator of the United States Environmental Protection Agency
pursuant to Section 9601(35)(B)(ii) of Title 42 of the United States
Code.
(C) In the case of property in residential or other similar use at
the time of purchase by a nongovernmental or noncommercial entity, a
site inspection and title search that does not reveal a basis for
further investigation.
(3) The person provides all legally required notices with respect
to the discovery or release of hazardous materials at the site.
(4) The person exercises appropriate care with respect to
hazardous materials found at the site by taking reasonable steps to
stop continuing release, prevent threatened future release, and
prevent or limit human, environmental, or natural resource exposure
to previously released hazardous material.
(5) The person provides full cooperation, assistance, and access
to persons who are authorized to conduct response actions or natural
resource restoration at a site, including the cooperation and access
necessary for the installation, integrity, operation, and maintenance
of complete or partial response actions or natural resource
restoration at the site.
(6) The person is in compliance with land use restrictions
established or relied on in connection with the response action at a
site and does not impede the effectiveness or integrity of
institutional control employed at the site in connection with a
response action.
(7) The person complies with all requests for information or
administrative subpoena issued by the lead agency under this chapter.
(8) The person is not potentially liable, or affiliated with any
other person who is potentially liable, for response costs at a site
through direct or indirect familial relationship, or contractual,
corporate, or financial relationship, other than a contractual,
corporate, or financial relationship that is created by the
instruments by which title to the site is conveyed or financed or by
a contract for the sale of goods or services, or the result of a
reorganization of a business entity that was potentially liable.
(c)(1) "Contractual relationship" includes, but is not limited to,
a relationship based on a land contract, deed, easement, lease, or
other instrument transferring title or possession, unless the site
was acquired by an innocent purchaser after the disposal or placement
of the hazardous material on, in, or at the site, and the person
meets the conditions specified in paragraph (2) and establishes one
or more of following by a preponderance of the evidence:
(A) At the time the person acquired the site, the person did not
know and did not have reason to know, that hazardous material that is
the subject of the release or threatened release was disposed of on,
in, or at the site, as provided in paragraph (3).
(B) The person is a government entity that acquired the site by
escheat, or through any other involuntary transfer or acquisition, or
through the exercise of eminent domain authority by purchase or
condemnation.
(C) The person acquired the site by inheritance or bequest.
(2) The person establishes all of the following:
(A) The person is an innocent purchaser.
(B) The person provides full cooperation, assistance, and site
access to the persons that are authorized to conduct response actions
at the site, including the cooperation and access necessary for the
installation, integrity, operation, and maintenance of a complete or
partial response action at the site.
(C) The person is in compliance with land use restrictions
established or relied on in connection with the response action at a
site.
(D) The person does not impede the effectiveness or integrity of
institutional control employed at the site in connection with a
response action.
(3) To establish that, at the time the person acquired the site,
the person did not know and did not have reason to know that
hazardous material that is the subject of the release or threatened
release was disposed of on, in, or at the site, the person shall
demonstrate all of the following by a preponderance of the evidence:
(A) On or before the date on which the person acquired the site,
the person carried out all appropriate inquiries into the previous
ownership and uses of the site in accordance with generally accepted
good commercial and customary standards and practices.
(B) The person took reasonable steps to stop continuing release,
prevent threatened future release, and prevent or limit human,
environmental, or natural resource exposure to previously released
hazardous material.
(C) In the case of property for residential use or other similar
use purchased by a nongovernmental or noncommercial entity, a site
inspection and title search that did not reveal a basis for further
investigation shall satisfy the requirements of this paragraph.
(4) Nothing in this section diminishes the liability of a previous
owner or operator of a site who would otherwise be liable for the
release of hazardous materials. Notwithstanding this paragraph, if
the person obtains actual knowledge of the release or threatened
release of hazardous materials at a site when the person owned the
real property and then subsequently transferred ownership of the
property to another person without disclosing that knowledge, the
person who fails to make that disclosure is not entitled to a defense
under Section 25400.6.
(5) Nothing in this section affects the liability of a person who,
by an act or omission, causes or contributes to the release or
threatened release of a hazardous material that is the subject of the
action relating to the site.
(d) "Innocent purchaser" means a person who can establish all of
the following by a preponderance of the evidence:
(1) The release or threatened release of a hazardous material and
the damages resulting therefrom were caused solely by an act or
omission of a third party, other than an employee or agent of the
person, other than one whose act or omission occurs in connection
with a contractual relationship, existing directly or indirectly,
with the person, except where the sole contractual arrangement arises
from a published tariff and acceptance for carriage by a common
carrier by rail.
(2) He or she exercised due care with respect to the hazardous
material concerned, taking into consideration the characteristics of
the hazardous material, in light of all relevant facts and
circumstances.
(3) He or she took precautions against foreseeable acts or
omissions of a third party and the consequences that could
foreseeably result from those acts or omissions.
(e) "Hazardous material" has the same meaning as defined in
paragraph (8) of subdivision (a) of Section 25395.20.
(f) "Lead agency" means the agency that exercises primary
environmental oversight authority over remediation of a site and
incurs response costs for the site. If there is more than one
potential lead agency, an agency may request and be designated as the
administering agency by the Site Designation Committee applying the
factors set forth in subdivision (c) of Section 25262, and that
administering agency shall be deemed to be the lead agency for
purposes of this chapter.
(g) "Response" includes a response action as defined in Section
25323.3, or a response under any other applicable statute.
(h) "Site" means an area, location, or site where a hazardous
material has been released or threatens to be released into the
environment.
SEC. 2. Section 25400.6 is added to the Health and Safety Code, to
read:
25400.6. Notwithstanding any other provision of state law,
including, but not limited to, Section 25323.5, an innocent purchaser
or a bona fide prospective purchaser is not liable under an
applicable statute for response costs associated with a release or
threatened release of a hazardous material at a site.
SEC. 3. Section 25400.7 is added to the Health and Safety Code, to
read:
25400.7. (a) Notwithstanding any other provision of state law,
including, but not limited to, Section 25323.5, a person is not
liable under an applicable statute for response costs associated with
a release or threatened release of a hazardous material from a site
that is not owned by that person, if the person demonstrates, by a
preponderance of the evidence, that both of the following apply:
(1) The person owns real property that is contiguous to, or
otherwise similarly situated with respect to, the site, and the real
property owned by that person is, or may be, contaminated by a
release or threatened release from the site.
(2) The person demonstrates by a preponderance of the evidence all
of the following:
(A) The person did not cause, contribute, or consent to the
release or threatened release.
(B) The person is not potentially liable, or affiliated with a
person who is potentially liable, for response costs at a site
through one or more of the following:
(i) A direct or indirect familial relationship.
(ii) A contractual, corporate, or financial relationship, other
than a contractual, corporate, or financial relationship that is
created by a contract for the sale of goods or services.
(iii) A reorganization of a business entity that was potentially
liable.
(C) The person takes reasonable steps to stop a continuing
release, prevent threatened future release, and prevent or limit
human, environmental, or natural resource exposure to hazardous
material released on or from property owned by that person.
(D) The person provides full cooperation, assistance, and access
to persons who are authorized to conduct response actions or natural
resource restoration at the site from which there has been a release
or threatened release, including the cooperation and access necessary
for the installation, integrity, operation, and maintenance of a
complete or partial response action or natural resource restoration
at the site.
(E) The person is in compliance with land use restrictions
established or relied on in connection with the response action at
the site, and does not impede the effectiveness or integrity of
institutional control employed in connection with a response action.
(F) The person is in compliance with any request for information
or administrative subpoena issued by the lead agency.
(G) The person provides all legally required notices with respect
to the discovery or release of hazardous materials at the site.
(H) At the time the person acquired the property, the person
conducted all appropriate inquiry with respect to the property and
did not know or have reason to know that the property was or could be
contaminated by a release or threatened release of hazardous
material from other real property not owned or operated by the
person.
A person who knew or had reason to know at the time of acquisition
that the property was or could be contaminated by a release or
threatened release of a hazardous material from other real property
not owned or operated by the person may nevertheless qualify as a
bona fide prospective purchaser if he or she meets the requirements
of subdivision (b) of Section 25400.5.
With respect to a hazardous material from one or more sources that
are not on the property of a person who is a contiguous property
owner that enters ground water beneath the property of the person
solely as a result of subsurface migration in an aquifer,
subparagraph (C) of paragraph (2) of subdivision (a) does not require
the person to conduct ground water investigations or to install
ground water remediation systems, except in accordance with
Management Memo #90-11 issued by the Department of Toxic Substances
Control titled "RP-Ownership of Property Over Contaminated
Groundwater."
Nothing in this section limits a defense to liability that may be
available to the person under any other provision of state law, and
nothing in this section imposes liability on the person that is not
otherwise imposed by an applicable statute.
SEC. 4. Section 25400.8 is added to the Health and Safety Code, to
read:
25400.8. The protections provided in Sections 25400.6 and 25400.7
are in addition to, and do not otherwise affect, other protections
provided under state law.
SEC. 5. Section 25400.9 is added to the Health and Safety Code, to
read:
25400.9. If there are unrecovered response costs incurred by a
lead agency at a site for which an owner of the site is not liable as
a bona fide prospective purchaser, the lead agency shall have a lien
on the site, or may by agreement with the owner, obtain from the
owner a lien on other property or other assurance of payment for the
unrecovered response costs, subject to all of the following:
(a) A response action for which there are unrecovered costs of the
lead agency is carried out at the site.
(b) The response action increases the fair market value of the
site above the fair market value of the site that existed before the
response action was initiated.
(c) The lien shall arise at the time at which costs are first
incurred by the lead agency with respect to a response action at the
site.
(d) The lien amount may not exceed the increase in fair market
value of the property attributable to the response action at the time
of a sale or other disposition of the property.
(e) The lien shall continue until the earlier of satisfaction of
the lien by sale or other means, or recovery of all response costs
incurred by the lead agency at the site.
(f) The lien shall be subject to the rights of a purchaser, holder
of a security interest, or judgment lien creditor whose interest is
perfected under applicable state law before notice of the lien has
been filed in the appropriate office within the state or county or
other governmental subdivision, as designated by state law. That
purchaser, holder of a security interest, or judgment lien creditor
shall be afforded the same protections against the lien as are
afforded under state law against a judgment lien that arises out of
an unsecured obligation and that arises as of the time of the filing
of the notice of the lien. The notice shall be recorded in the
official records of the County Recorder's office for the county in
which the real property is located. For purposes of this
subdivision, the terms "purchaser" and "security interest" shall have
the definitions provided under Section 6323(h) of Title 26 of the
United States Code.
SEC. 6. Section 25400.10 is added to the Health and Safety Code,
to read:
25400.10. Sections 24500.6 and 25400.7 do not exempt a person
from liability for bodily injury or wrongful death, and do not exempt
a permitted past, present, or future owner or operator of a
hazardous waste facility, as defined in Section 25117.1, from what is
required to obtain a hazardous waste facilities permit pursuant to
Chapter 20 (commencing with Section 66270.1) of Division 4.5 of Title
22 of the California Code of Regulations, or from the corrective
action, closure, and postclosure requirements set forth in Chapter
6.5 (commencing with Section 25100).
SEC. 7. Section 25400.11 is added to the Health and Safety Code,
to read:
25400.11. Sections 25400.6 and 25400.7 are not intended to, and
may not be interpreted to, limit the state's authority, to the extent
that Chapter 6.5 (commencing with Section 25100) would not comply
with the requirements for obtaining approval and authorization under
Part 271 (commencing with Section 271.1) of Title 40 of the Code of
Federal Regulations.
(4) "Hazardous material" has the same meaning as defined in
paragraph (8) of subdivision (a) of Section 25395.20.
(5) "Response" includes a response action as defined in Section
25323.3, or a response action subject to other applicable statute.
(6) "Site" means an area, location, or facility where a hazardous
material has been released or threatens to be released into the
environment.
(b) (1) Notwithstanding any other provision of state law,
including, but not limited to, Section 25323.5, an innocent purchaser
or a bona fide prospective purchaser is not liable under any
applicable statute for any costs of response associated with a
release or threatened release of a hazardous material at a site, if
the innocent purchaser or bona fide prospective purchaser's potential
liability for the release or threatened release is based solely on
the person's ownership or operation of the site, including, but not
limited to, if the person, due to possession or control of the site,
is authorized to undertake a response action at the site.
(2) Paragraph (1) does not apply if the innocent purchaser or bona
fide prospective purchaser impedes the performance of any response
action or natural resources restoration associated with the release
or threatened release.
(c) Notwithstanding any other provision of state law, including,
but not limited to, Section 25323.5, a person is not liable under any
applicable statute for any costs of response associated with a
release or threatened release of a hazardous material from a site
that is not owned by that person, if all of the following apply:
(1) The person owns real property that is contiguous to, or
otherwise similarly situated with respect to, the site, and the real
property owned by that person is, or may be, contaminated by a
release or threatened release from the site.
(2) The person complies with the requirements set forth in clauses
(i) to (viii), inclusive, of subparagraph (A) of paragraph (1) of
subsection (q) of Section 107 of the federal act (42 U.S.C. Sec. 9607
(q)(1)(A)(i)-(viii)).
(d) The immunity provided by this section is in addition to, and
does not otherwise affect, any other immunity provided under state
law.
(e) This section does not exempt a person from liability for
bodily injury or wrongful death.