GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	2 

HOUSE BILL 1121
Committee Substitute Favorable 5/14/97

Short Title:  Brownfields Property Reuse Act.	(Public)

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Sponsors:

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Referred to: 

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April 21, 1997

A BILL TO BE ENTITLED
AN ACT TO PROMOTE THE SAFE REUSE OF PROPERTIES WHERE ACTUAL CONTAMINATION, OR THE POSSIBILITY OF CONTAMINATION, HAS IMPEDED REDEVELOPMENT.
The General Assembly of North Carolina enacts:
Section 1.  Findings. – The General Assembly makes the following findings:
(1)	There are abandoned, idle, and underused properties in North Carolina, often referred to as "brownfields", that may have been or were contaminated by past industrial and commercial activities, but that are attractive locations for redevelopment.
(2)	The reuse, development, redevelopment, transfer, financing, and other use of brownfields is impaired by the potential liability associated with the risk of contamination.
(3)	The safe redevelopment of brownfields would benefit the citizens of North Carolina in many ways, including improving the tax base of local government and creating job opportunities for citizens in the vicinity of brownfields.
(4)	Potential purchasers and developers of brownfields and other parties who have no connection with the contamination of the property, including redevelopment lenders, should be encouraged to provide capital and labor to improve brownfields without undue risk of liability for problems they did not create, so long as the property can be and is made safe for appropriate future use.
(5)	Public and local government involvement in commenting on the safe reuse of brownfields will improve the quality and acceptability of their redevelopment.
Section 2.  Article 9 of Chapter 130A of the General Statutes is amended by adding a new Part to read:
“Part 5.  Brownfields Property Reuse Act.
"§ 130A-310.30.  Short title.
This Part may be cited as the Brownfields Property Reuse Act of 1997.
"§ 130A-310.31.  Definitions.
(a)	Unless a different meaning is required by the context or unless a different meaning is set out in subsection (b) of this section, the definitions in G.S. 130A-2 and G.S. 130A-310 apply throughout this Part.
(b)	Unless a different meaning is required by the context:
(1)	‘Affiliate' has the same meaning as in 17 Code of Federal Regulations § 240.12b-2 (1 April 1996 Edition).
(2)	‘Brownfields agreement' means an agreement between the Department and a prospective developer that meets the requirements of G.S. 130A-310.32.
(3)	‘Brownfields property' or ‘brownfields site' means abandoned, idled, or underused property at which expansion or redevelopment is hindered by actual environmental contamination or the possibility of environmental contamination and that is or may be subject to remediation under any State remedial program or under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.).
(4)	‘Contaminant' means a regulated substance released into the environment.
(5)	‘Local government' means a town, city, or county.
(6)	‘Parent' has the same meaning as in 17 Code of Federal Regulations § 240.12b-2 (1 April 1996 Edition).
(7)	‘Person' means an individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, authority, nonprofit corporation, interstate body, or other legal entity that is recognized by law as the subject of rights and duties.  The term includes the federal government, state governments, political subdivisions, and state instrumentalities.
(8)	‘Potentially responsible party' means a person who is or may be liable for remediation under a remedial program.
(9)	‘Prospective developer' means any person who desires to either buy or sell a brownfields property for the purpose of developing or redeveloping that brownfields property and who did not cause or contribute to the contamination at the brownfields property.
(10)	‘Regulated substance' means a hazardous waste, as defined in G.S 130A-290; a hazardous substance, as defined in G.S. 143-215.77A; oil, as defined in G.S. 143-215.77; or other substance regulated under any remedial program other than Part 2A of Article 21A of Chapter 143 of the General Statutes.
(11)	‘Remedial program' means a program implemented by the Department for the remediation of any contaminant, including the Inactive Hazardous Sites Response Act of 1987 under Part 3 of this Article, the Superfund Program under Part 4 of this Article, and the Oil Pollution and Hazardous Substances Control Act of 1978 under Part 2 of Article 21A of Chapter 143 of the General Statutes.
(12)	‘Remediation' means action to clean up, mitigate, correct, abate, minimize, eliminate, control, or prevent the spreading, migration, leaking, leaching, volatilization, spilling, transport, or further release of a contaminant into the environment in order to protect public health or the environment.
(13)	‘Responsible party' means a potentially responsible party that admits liability or is adjudged to be liable for contamination under a remedial program.
(14)	‘Subsidiary' has the same meaning as in 17 Code of Federal Regulations § 240.12b-2 (1 April 1996 Edition).
"§ 130A-310.32.  Brownfields agreements.
(a)	The Department may, in its discretion, enter into a brownfields agreement with a prospective developer who satisfies the requirements of this section.  A prospective developer shall provide the Department with any information necessary to demonstrate that:
(1)	The prospective developer, and any parent, subsidiary, or other affiliate of the prospective developer has substantially complied with:
a.	The terms of any brownfields agreement or similar agreement to which the prospective developer or any parent, subsidiary, or other affiliate of the prospective developer has been a party.
b.	The requirements applicable to any remediation in which the applicant has previously engaged.
c.	Federal and state laws, regulations, and rules for the protection of the environment.
(2)	As a result of the implementation of the brownfields agreement, the brownfields property will be suitable for the uses specified in the agreement while fully protecting human health and the environment.
(3)	There is a public benefit commensurate with the liability protection afforded under this Part.
(4)	The prospective developer has or can obtain the financial, managerial, and technical means to fully implement the brownfields agreement and assure the safe use of the brownfields property.
(5)	The prospective developer has or will comply with all applicable procedural requirements.
(b)	In negotiating a brownfields agreement, parties may rely on land-use restrictions that will be included in a Notice of Brownfields Property required under G.S. 130A-310.35.  A brownfields agreement may provide for remediation standards that are based on those land-use restrictions.
(c)	A brownfields agreement shall specify remediation to be conducted and the desired results of remediation of the brownfields property; guidelines, including parameters, principles, and policies, within which the desired results are to be accomplished; resources that the prospective developer will make available; remediation standards and the times and methods by which remediation is evaluated; and the consequences of achieving or not achieving the desired results.
"§ 130A-310.33.  Liability protection.
(a)	A prospective developer who enters into a brownfields agreement with the Department and who complies with the brownfields agreement shall not be held liable for remediation of areas of contaminants identified in the brownfields agreement except as specified in the brownfields agreement, so long as the activities conducted on the brownfields property by or under the control or direction of the prospective developer do not increase the risk of harm to public health or the environment.  The liability protection provided by this Part applies to all of the following persons to the same extent as to a prospective developer, so long as these persons are not otherwise potentially responsible parties or parents, subsidiaries, or affiliates of potentially responsible parties:
(1)	Any person under the direction or control of the prospective developer who directs or contracts for remediation or redevelopment of the brownfields property.
(2)	Any future owner of the brownfields property.
(3)	A person who develops or occupies the brownfields property.
(4)	A successor or assign of any person to whom the liability protection in this Part applies.
(5)	Any lender or fiduciary that provides financing for remediation or redevelopment of the brownfields property.
(b)	A person who conducts an environmental assessment or transaction screen on a brownfields property and who is not otherwise a potentially responsible party is not a potentially responsible party as a result of conducting the environmental assessment or transaction screen unless that person increases the risk of harm to public health or the environment by failing to exercise due diligence and reasonable care in performing the environmental assessment or transaction screen.
(c)	A prospective developer who completes the remediation or redevelopment required under a brownfields agreement or other person who receives liability protection under this section shall not be required to undertake additional remediation at the brownfields property unless any of the following apply:
(1)	The prospective developer knowingly or recklessly provides false information that forms a basis for the brownfields agreement or that is offered to demonstrate compliance with the brownfields agreement.
(2)	New information indicates the existence of previously unreported contaminants or an area of previously unreported contamination on or associated with the brownfields property.  If the brownfields agreement sets maximum concentrations for contaminants, and new information indicates the existence of previously unreported areas of these contaminants, further remediation shall be required only if the areas of previously unreported contaminants raise the risk of the contamination to public health or the environment.
(3)	The level of risk is unacceptable at or in the vicinity of the brownfields property due to changes in exposure conditions, including (i) a change in land use that increases the probability of exposure to contaminants at the brownfields property (ii) or the failure of remediation to mitigate risks as planned in the brownfields agreement.
(4)	The Department obtains new information about a contaminant associated with the brownfields property or exposures at or around the brownfields property that raises the risk associated with the brownfields property beyond an acceptable range and in a manner or to a degree not anticipated in the brownfields agreement.  Any person whose use, including any change in use, of the brownfields property causes an unacceptable risk may be required by the Department to undertake additional remediation measures under the provisions of this Part.
(5)	A prospective developer fails to file a timely and proper Notice of Brownfields Development under this Part.
(6)	The owner of the brownfields property or an agent of the owner violates the land-use restrictions set out in the Notice of Brownfields Property required under G.S. 130A-310.35.
"§ 130A-310.34.  Public notice and community involvement.
(a)	A prospective developer who desires to enter into a brownfields agreement shall notify the public and the community in which the brownfields property is located of planned remediation and redevelopment activities.  The prospective developer shall submit a Notice of Intent to Redevelop a Brownfields Property and a summary of the Notice of Intent to the Department.  The Notice of Intent shall provide, to the extent known, a legal description of the location of the brownfields property, a map showing the location of the brownfields property, a description of the contaminants involved and their concentrations in the media of the brownfields property, a description of the intended future use of the brownfields property, any proposed investigation and remediation, and a proposed Notice of Brownfields Property prepared in accordance with G.S. 130A-310.35.  The summary of the Notice of Intent shall include a statement as to the public availability of the full Notice of Intent.  After approval of the Notice of Intent and summary of the Notice of Intent by the Department, the prospective developer shall provide a copy of the Notice of Intent to all local governments having jurisdiction over the brownfields property.  The prospective developer shall publish the summary of the Notice of Intent in a newspaper of general circulation serving the area in which the brownfields property is located and shall file a copy of the summary of the Notice of Intent with the Codifier of Rules, who shall publish the summary of the Notice of Intent in the North Carolina Register.
(b)	Publication of the approved Notice of Intent in the North Carolina Register and a newspaper of general circulation shall begin a public comment period of at least 60 days.  During the public comment period, members of the public, residents of the community in which the brownfields property is located, and local governments having jurisdiction over the brownfields property may submit comment on the proposed brownfields agreement, including methods and degree of remediation, future land uses, and impact on local employment.
(c)	Prior to entering into a brownfields agreement, the Department shall take into account the comment received during the comment period.  The Department shall incorporate into the brownfields agreement provisions that reflect comment received during the comment period to the extent practical.  The Department shall give particular consideration to written comment that is supported by valid scientific and technical information and analysis.
"§ 130A-310.35.  Notice of Brownfields Property; land use restrictions in deed.
(a)	In order to reduce or eliminate the danger to public health or the environment posed by a brownfields property being addressed under this Part, a prospective developer who desires to enter into a brownfields agreement with the Department shall submit to the Department a proposed Notice of Brownfields Property.  A Notice of Brownfields Property shall be entitled ‘Notice of Brownfields Property', shall include a survey plat of areas designated by the Department that has been prepared and certified by a professional land surveyor and that meets the requirements of G.S. 47-30, shall include a legal description of the brownfields property that would be sufficient as a description in an instrument of conveyance, and shall identify all of the following:
(1)	The location and dimensions of the areas of potential environmental concern with respect to permanently surveyed benchmarks.
(2)	The type, location, and quantity of regulated substances and contaminants known to exist on the brownfields property.
(3)	Any restrictions on the current or future use of the brownfields property that are necessary or useful to maintain the level of protection appropriate for the designated current or future use of the brownfields property and that are designated in the brownfields agreement.  These restrictions may apply to activities on, over, or under the land, including, but not limited to, use of groundwater, building, filling, grading, excavating, and mining.  Where a brownfields property encompasses more than one parcel or tract of land, a composite map or plat showing all parcels or tracts may be recorded.
(b)	After the Department approves and certifies the Notice of Brownfields Property under subsection (a) of this section, a prospective developer who enters into a brownfields agreement with the Department shall file a certified copy of the Notice of Brownfields Property in the register of deeds' office in the county or counties in which the land is located.  The prospective developer shall file the Notice of Brownfields Property within 15 days of the prospective developer's receipt of the Department's approval of the notice or the prospective developer's entry into the brownfields agreement, whichever is later.
(c)	The register of deeds shall record the certified copy of the notice and index it in the grantor index under the names of the owners of the land, and, if different, also under the name of the prospective developer conducting the redevelopment of the brownfields property.
(d)	When a brownfields property is sold, leased, conveyed, or transferred, the deed or other instrument of transfer shall contain in the description section, in no smaller type than that used in the body of the deed or instrument, a statement that the brownfields property has been classified and, if appropriate, cleaned up as a brownfields property under this Part.
(e)	A Notice of Brownfields Property filed pursuant to this section may, at the request of the owner of the land, be cancelled by the Secretary after the hazards have been eliminated.  If requested in writing by the owner of the land and if the Secretary concurs with the request, the Secretary shall send to the register of deeds of each county where the notice is recorded a statement that the hazards have been eliminated and request that the notice be cancelled of record.  The Secretary's statement shall contain the names of the owners of the land as shown in the notice and reference the plat book and page where the notice is recorded.  The register of deeds shall record the Secretary's statement in the deed books and index it on the grantor index in the names of the owners of the land as shown in the Notice of Brownfields Property and on the grantee index in the name ‘Secretary of Environment, Health, and Natural Resources'.  The register of deeds shall make a marginal entry on the Notice of Brownfields Property showing the date of cancellation and the book and page where the Secretary's statement is recorded, and the register of deeds shall sign the entry.  If a marginal entry is impracticable because of the method used to record maps and plats, the register of deeds shall not be required to make a marginal entry.
(f)	Any restriction on the current or future use of the brownfields property filed pursuant to this section shall be enforced by any owner of the land or by any other responsible party.  Restrictions may also be enforced by the Department or any unit of local government having jurisdiction over any part of the brownfields property.  A restriction shall not be declared unenforceable due to lack of privity of estate or contract, due to lack of benefit to particular land, or due to lack of any property interest in particular land.
(g)	This section shall apply in lieu of the provisions of G.S. 130A-310.8 for brownfields properties remediated under this Part.
"§ 130A-310.36.  Appeals.
A decision by the Department as to whether or not to enter into a brownfields agreement including the terms of any brownfields agreement is reviewable under Article 3 of Chapter 150B of the General Statutes.
"§ 130A-310.37.  Construction of Part.
(a)	This Part is not intended and shall not be construed to:
(1)	Affect the ability of local governments to regulate land development under Article 19 of Chapter 160A of the General Statutes and Article 18 of Chapter 153A of the General Statutes.  The use of the identified brownfields property and any deed restrictions used as part of a redevelopment plan shall not be inconsistent with local land development controls adopted under those statutes.
(2)	Amend, modify, repeal, or otherwise alter any provision of any remedial program or other provision of this Chapter, Chapter 143 of the General Statutes, or any other provision of law relating to civil and criminal penalties or enforcement actions and remedies available to the Department except as may be provided in a brownfields agreement.
(3)	Prevent or impede the immediate response of the Department or responsible party to an emergency that involves an imminent or actual release of a regulated substance that threatens public health or the environment.
(4)	Relieve a person receiving protection from liability for remediation under this Chapter from any liability for contamination later caused by that person on a brownfields property.
(5)	Affect the ability or authority of any person to seek any relief available against any party who may have liability with respect to the brownfields property, except to compel remediation of the brownfields property other than that required under the brownfields agreement.
(6)	Affect the ability or authority to seek contribution from any person who may have liability with respect to the brownfields property and who did not receive cleanup liability protection under this Part.
(7)	Prevent the State from enforcing specific numerical cleanup standards, monitoring, or compliance requirements specifically required to be enforced by the federal government as a condition to receive program authorization, delegation, primacy, or federal funds.
(8)	Create a defense against the imposition of criminal and civil fines or penalties or administrative penalties otherwise authorized by law and imposed as the result of the illegal disposal of waste or for the pollution of the land, air, or waters of this State on a brownfields property.
(9)	Relieve a person of any liability for failure to exercise due diligence and reasonable care in performing an environmental assessment or transaction screen.
(b)	Notwithstanding the provisions of the Tort Claims Act, G.S. 143-291 through G.S. 143-300.1 or any other provision of law waiving the sovereign immunity of the State of North Carolina, the State, its agencies, officers, employees, and agents shall be absolutely immune from any liability in any proceeding for any injury or claim arising from negotiating, entering, monitoring, or enforcing a brownfields agreement or a Notice of Brownfields Property under this Part or any other action implementing this Part.
"§ 130A-310.38.  Brownfields Property Reuse Act Implementation Account.
The Brownfields Property Reuse Act Implementation Account is created as a nonreverting interest-bearing account in the Office of the State Treasurer.  The Account shall consist of fees collected under G.S. 130A-310.39, moneys appropriated to it by the General Assembly, moneys received from the federal government, moneys contributed by private organizations, and moneys received from any other source.  Funds in the Account shall be used by the Department to defray a portion of the costs of implementing this Part.
"§ 130A-310.39.  Fees.
(a)	The Department shall collect the following fees:
(1)	A prospective developer who submits a proposed brownfields agreement for review by the Department shall pay a fee of one thousand dollars ($1,000).
(2)	A prospective developer who submits a final report certifying completion of remediation under a brownfields agreement shall pay a fee of five hundred dollars ($500.00).
(b)	Fees imposed under this section shall be credited to the Brownfields Property Reuse Act Implementation Account.
"§ 130A-310.40.  Legislative reports.
The Department shall prepare and submit to the Environmental Review Commission, concurrently with the report on the Inactive Hazardous Sites Response Act of 1987 required under G.S. 130A-310.10, an evaluation of the effectiveness of this Part in facilitating the cleanup and reuse of existing industrial and commercial properties.  This evaluation shall include any recommendations for additional incentives or changes, if needed, to improve the effectiveness of this Part in addressing such properties.  This evaluation shall also include a report on receipts by and expenditures from the Brownfields Property Reuse Act Implementation Account."
Section 3.  G.S. 130A-26.1(g) is amended by adding two new subdivisions to read:
"(5)	Provides false information or fails to provide information relevant to a decision by the Department as to whether or not to enter into a brownfields agreement under Part 5 of Article 9 of this Chapter.
(6)	Provides false information or fails to provide information required by a brownfields agreement under Part 5 of Article 9 of this Chapter."
Section 4.  G.S. 130A-310.7 is amended by adding the following new subsection to read:
"( c)	The liability protection under G.S. 130A-310.33 applies to any party who successfully completes a remediation to the current standards of contamination of any site under any remedial program administered by the Department.  For purposes of this section, ‘remediation to the current standards' means that cleanup and remediation activities at the site comply with standards, guidance, or established methods that have been adopted or published by the Department, either at the time the activities are begun or prior to the completion of those activities.  A change in those standards, guidance, or established methods prior to completion of the work at the site shall not preclude such liability protection so long as the party meets these standards, guidance, or established methods in effect at the time the work was begun.  Any party eligible for the liability protection under this section may request and receive from the Department a written statement confirming that protection upon completion of the work and payment of the fee required under G.S. 130A-310.39(a)(2)."
Section 5.  This act shall not be construed to obligate the General Assembly to make any appropriation to implement the provisions of this act.  The Department of Environment, Health, and Natural Resources shall implement the provisions of this act from funds otherwise available or appropriated to the Department.
Section 6.  This act is effective when it becomes law.