BILL NUMBER: SB 493 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 15, 2003
AMENDED IN SENATE MAY 6, 2003
AMENDED IN SENATE MARCH 24, 2003
INTRODUCED BY Senator Cedillo
FEBRUARY 20, 2003
An act to add Sections 25400.5, 25400.6, 25400.7,
25400.8, 25400.9, 25400.10, and 24500.11 to the Health and Safety
Chapter 6.9.1 (commencing with Section 25400.1) to
Division 20 of 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 enact the Brownfields Revitalization Act of
2003, which would provide that an innocent purchaser or a bona
fide prospective purchaser, as defined, is not liable for
response costs under specified state or local
laws associated with that impose
liability for response costs upon an owner or occupant of property
acquired on or after January 1, 2004, for cleanup of preexisting
pollution conditions caused by a release or threatened
release of a hazardous material at a site
on, under, or adjacent to that property. The bill
would immunize an innocent purchaser or bona fide prospective
purchaser for response costs associated with a release or threatened
release of a hazardous material at a site, as defined , if the
innocent purchaser or bona fide prospective purchaser meets specified
conditions. The bill would also provide that a person is not liable
under those specified state laws 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. 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. For purposes of this chapter, the following terms have
the following meaning:
(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).
SECTION 1. Chapter 6.9.1 (commencing with Section 25400.1) is
added to Division 20 of the Health and Safety Code, to read:
CHAPTER 6.9.1. BROWNFIELDS REVITALIZATION ACT OF 2003
25400.1. (a) The Legislature finds and declares all of the
following:
(1) California's exploding population growth is putting stress on
the state's natural resources, infrastructure, and supply of useable
land.
(2) The state can promote and encourage more orderly and efficient
growth patterns by making urban and downtown areas more attractive
for private development and redevelopment, thereby relieving some of
those stresses on natural resources and making better use of existing
infrastructure.
(3) There are thousands of so-called brownfields and similar
tracts of land in California's urban areas that lie dormant, as
previous industrial and other uses have left them contaminated and
unusable.
(4) State law impedes the redevelopment of these properties by
imposing on innocent purchasers and bona fide prospective purchasers,
who are willing to invest in these properties to put them to
productive use, the same liability that state law imposes on the
original polluters.
(5) This liability, that is created simply by virtue of ownership
or occupancy, chills interest in acquiring and redeveloping these
properties, leaving private investors to pursue lower-risk properties
on the urban fringe.
(6) The result of this liability is increasingly abandoned urban
neighborhoods, lost tax revenue, and outward development patterns
that leads to further development of greenfield sites, while
contaminated urban sites lie unused or underused.
(7) It is the intent of this chapter to encourage acquisition of
these urban sites for purposes of development and redevelopment by
limiting the liability of innocent purchasers and bona fide
prospective purchasers for response actions when the innocent
purchasers and bona fide prospective purchasers have met the
requirements specified in this chapter.
(8) It is not the intent of this chapter to change or modify
existing state or local authority to require necessary and
appropriate response actions at the sites' subject to this chapter
based on the sites future intended land use, as a condition of
issuing discretionary permits relating to development, use, or
occupancy.
(9) Further, it is not the intent of this chapter to impair a
cause of action against a polluter responsible for creating a spill,
discharge, or presence of a hazardous material.
(b) This chapter shall be known, and may be cited as, the
"Brownfields Revitalization Act of 2003."
25400.5. For purposes of this chapter, the following terms have
the following meanings:
(a) "Applicable statute" means all of the following state laws, to
the extent that the state law imposes liability for response costs
on an owner or occupant of property acquired on or after January 1,
2004, for cleanup of preexisting pollution conditions caused by a
release of hazardous material on, under, or adjacent to the property:
(1) Title 1 (commencing with Section 3479) of, Title 2 (commencing
with Section 3490) of, and Title 3 (commencing with Section 3501)
of, Part 3 of Division 4 of the Civil Code.
(2) Chapter 3 (commencing with Section 731) of Title 10 of Part 2
of the Code of Civil Procedure.
(3) Section 5650 of the Fish and Game Code.
(4) Chapter 6.5 (commencing with Section 25100), Chapter 6.67
(commencing with Section 25270), Chapter 6.7 (commencing with Section
25280), Chapter 6.75 (commencing with Section 25299.10), Chapter 6.8
(commencing with Section 25300) and Chapter 6.10 (commencing with
Section 25401).
(5) Article 12.5 (commencing with Section 33459) of Chapter 4 of
Part 1 of Division 24 of the Health and Safety Code.
(6) Division 7 (commencing with Section 13000) of the Water Code.
(b) "Bona fide prospective purchaser" means a person or a tenant
of a person who acquires ownership of a site on or 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
(h) (1) Subject to paragraph (2), "site" means an area that meets
both of the following conditions:
(A) It is located in an urban area, as defined in paragraph (3).
(B) It was previously the site of an economic activity that is no
longer in operation at that location as defined in paragraph (12) of
subdivision (a) of Section 25395.20.
(2) "Site" does not include any of the following:
(A) Property listed, or proposed for listing, on the National
Priorities List pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Sec. 9605(a)(8)
(B)).
(B) Property that is, or was, owned or operated by a department,
agency, or instrumentality of the United States.
(C) Property that will be the site of a contiguous expansion or
improvement of an operating industrial or commercial facility, unless
one of the following applies:
(i) It is a small business, as defined in paragraph (15) of
subdivision (a) of Section 25395.20.
(ii) It is a nonprofit corporation formed under the Nonprofit
Public Benefit Corporation Law (Part 2 (commencing with Section 5110)
of Division 2 of Title 1 of the Corporations Code) or the Nonprofit
Religious Corporation Law (Part 4 (commencing with Section 9110) of
Division 2 of Title 1 of the Corporations Code).
(iii) It is a small business incubator that is undertaking the
expansion with the assistance of a grant authorized by Section
15339.3 of the Government Code or a loan guarantee provided pursuant
to Section 14090 of the Corporations Code.
(3) For purposes of paragraph (1), "urban area" means either of
the following:
(A) The central portion of a 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 subdivision (a) of, or
subparagraph (A) of paragraph (1) of subdivision (b) of, Section
21071 of the Public Resources Code.
25400.6. (a) 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
(b) This section does not modify or limit the existing authority
of a state or local agency to impose a condition on the issuance of a
discretionary permit relating to the development, use, or occupancy
of any site.
25400.7. (a) 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
(b) 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 groundwater 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 groundwater investigations or to install
groundwater 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
(c) This section does not limit a defense to liability that
may be available to the person under any other provision of state
law, and nothing in this section imposes this
section does not impose 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:
(d) This section does not modify or limit the existing authority
of a state or local agency to impose a condition on the issuance of a
discretionary permit relating to the development, use, or occupancy
of a site.
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.