A BILL TO BE ENTITLED
AN ACT to promote economic development by FACILITATING the reuse of contaminated real property by limiting the liability of purchasers of contaminated property in circumstances where the seller of the property or another party assumes responsibility for response, remediation, and NATURAL resources restoration of the property, as recommended by the environmental review commission.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 130A‑310 is amended by adding a new subdivision to read:
"(1a)	'Contiguous property owner' means a person who owns real property that touches along a boundary or at a point real property that is contaminated by a release of a hazardous substance."
SECTION 2.  G.S. 143‑215.77 is amended by adding a new subdivision to read:
"(2a)	'Contiguous property owner' means a person who owns real property that touches along a boundary or at a point real property that is contaminated by a release of a hazardous substance."
SECTION 3.  G.S. 130A‑310.3 is amended by adding a new subsection to read:
"(b1)	A responsible party who satisfies the Secretary that the responsible party has completed a remedial action for hazardous substances at an inactive hazardous substance or waste disposal site pursuant to this Part shall not be required to perform any remedial action for the same release pursuant to Article 21 or Article 21A of Chapter 143 of the General Statutes."
SECTION 4.  G.S. 130A‑310.7 reads as rewritten:
"§ 130A‑310.7.  Action for reimbursement; liability of responsible parties; notification of completed remedial action.
(a)	Subject only to the defenses set forth in this section, a responsible party is a person who causes or contributes to the existence of an inactive hazardous substance or waste disposal site by any of the following:
(1)	Discharging, releasing, or depositing any hazardous substance.
(2)	Contracting or arranging for a discharge, release, or deposit of any hazardous substance.
(3)	Accepting any hazardous substance.
(4)	Transporting or arranging for the transport of any hazardous substance for the purpose of discharging, releasing, or depositing any hazardous substance.
(5)	Owning or operating a site that contains any hazardous substance.
(6)	Owning or operating a site at the time of discharge, release, or deposit of any hazardous substance.
(a1)	Neither an innocent landowner who is a bona fide purchaser of any real property comprising an inactive hazardous substance or waste disposal site without knowledge or without a reasonable basis for knowing that a hazardous substance or waste discharge, release, deposit, or disposal had occurred nor a contiguous property owner shall not be considered a responsible party if the landowner or contiguous property owner establishes all of the following to the satisfaction of the Secretary:
(1)	All of the discharge, release, deposit, or disposal of hazardous substances or waste at the site occurred before the owner acquired the site; or the disposal was solely the result of:
a.	An act of God; or
b.	An act of war; or
c.	An intentional act or omission of a third party who is not an employee or agent of the owner or who does not have a contractual relationship with the owner.
(2)	On or before the date of purchase, the owner made all appropriate inquiries into the previous ownership and uses of the property in accordance with generally accepted and customary commercial standards and practices. The Secretary shall take into account any specialized knowledge or experience on the part of the owner, the relationship of the purchase price to the value of the property if the property were not contaminated, commonly known or reasonably ascertainable information about the property, and whether the contamination is detectable by appropriate inspection. In the case of property that is used for residential or similar purposes at the time of its purchase by an entity that is neither governmental nor commercial, a site inspection and title search that does not reveal information that would cause a reasonable person to make further investigation shall satisfy the requirements of this subdivision.
(3)	The owner has provided all legally required notices with respect to the discovery of a discharge, release, deposit, or disposal of any hazardous substance or waste at the property.
(4)	The owner has exercised appropriate care with respect to hazardous substances found at the property by taking reasonable steps to do all of the following:
a.	Stopping any continuing discharge, release, deposit, or disposal.
b.	Preventing any threatened future discharge, release, deposit, or disposal.
c.	Conducting remedial measures approved by the Secretary that prevent or limit human, environmental, or natural resources exposure to any hazardous substance or waste discharged, released, deposited, or disposed of at the property and make the property safe for its intended use. Measures may include the application of institutional controls and other means of preventing exposure.
(5)	The owner has provided and continues to provide full cooperation, assistance, and access to persons who are authorized to conduct any response, remedial action, or natural resources restoration at the property, including any cooperation and access necessary to install, operate, maintain, or secure any completed or partial response, remedial action, or natural resources restoration at the property.
(6)	The owner has complied and continues to comply with any land‑use restrictions established or relied on in connection with the response, remedial action, or natural resources restoration at the property.
(7)	The owner has not impeded and continues to not impede the effectiveness or integrity of any institutional control employed at the property in connection with a response, remedial action, or natural resources restoration.
(8)	The owner has complied or has agreed to comply with any requirement to record any land‑use restrictions that may be required by the Secretary.
(9)	The owner has complied and continues to comply with any request for information or administrative subpoena issued by the Secretary.
(10)	The owner is not liable, potentially liable, or affiliated with any other person who is liable or potentially liable for any cost associated with the response, remedial action, or natural resources restoration at the property through any of the following:
a.	Any direct or indirect familial relationship.
b.	Any contractual, corporate, or financial relations, other than a contractual, corporate, or financial relationship that is created by an instrument through which title to the property is conveyed, an instrument through which sale or purchase of the property is financed, or by a contract for the sale of goods or services.
c.	A reorganization in bankruptcy of a business entity that is liable or potentially liable.
(a2)	A bona fide purchaser of any real property comprising an inactive hazardous substance or waste disposal site with knowledge or with a reasonable basis for knowing that a hazardous substance or waste discharge, release, deposit, or disposal had occurred shall not be considered a responsible party if the purchaser establishes all of the following to the satisfaction of the Secretary:
(1)	All of the discharge, release, deposit, or disposal of hazardous substances or waste at the site occurred before the purchaser acquired the site; or the disposal was solely the result of:
a.	An act of God; or
b.	An act of war; or
c.	An intentional act or omission of a third party who is not an employee or agent of the purchaser or who does not have a contractual relationship with the purchaser.
(2)	On or before the date of purchase, the purchaser made all appropriate inquiries into the previous ownership and uses of the property in accordance with generally accepted and customary commercial standards and practices. The Secretary shall take into account any specialized knowledge or experience on the part of the purchaser, the relationship of the purchase price to the value of the property if the property were not contaminated, commonly known or reasonably ascertainable information about the property, and whether the contamination is detectable by appropriate inspection. In the case of property that is used for residential or similar purposes at the time of its purchase by an entity that is neither governmental nor commercial, a site inspection and title search that does not reveal information that would cause a reasonable person to make further investigation shall satisfy the requirements of this subdivision.
(3)	The purchaser has provided all legally required notices with respect to the discovery of a discharge, release, deposit, or disposal of any hazardous substance or waste at the property.
(4)	The purchaser has exercised appropriate care with respect to hazardous substances found at the property by taking reasonable steps to do all of the following:
a.	Stopping any continuing discharge, release, deposit, or disposal.
b.	Preventing any threatened future discharge, release, deposit, or disposal.
c.	Conducting remedial measures approved by the Secretary that prevent or limit human, environmental, or natural resources exposure to any hazardous substance or waste discharged, released, deposited, or disposed of at the property and make the property safe for its intended use. Measures may include the application of institutional controls and other means of preventing exposure. Measures need not include soil or groundwater remediation by the purchaser other than those measures necessary to make the property safe for its intended use.
(5)	The purchaser has demonstrated that the seller or another responsible party has provided financial assurance equivalent to the full cost of implementation of the response, remedial action, or natural resources restoration at the property to unrestricted use standards, as defined in G.S. 130A-310.31. Financial assurance mechanisms may include, under terms and conditions approved by the Secretary, letters of credit, insurance, surety bonds, and trust funds.
(6)	The purchaser has provided and continues to provide full cooperation, assistance, and access to persons who are authorized to conduct any response, remedial action, or natural resources restoration at the property, including any cooperation and access necessary to install, operate, maintain, or secure any completed or partial response, remedial action, or natural resources restoration at the property. To the extent practical, response, remedial action, and natural resources restoration activities will be undertaken so as not to interfere with use of the property and structures on the property. The purchaser shall not erect any new structure that would interfere with any required response, remedial action, or natural resources restoration activity until the activity has been completed. 
(7)	The purchaser has complied and continues to comply with any land‑use restrictions established or relied on in connection with the response, remedial action, or natural resources restoration at the property.
(8)	The purchaser has not impeded and continues to not impede the effectiveness or integrity of any institutional control employed at the property in connection with a response, remedial action, or natural resources restoration.
(9)	The purchaser has complied or has agreed to comply with any requirement to record any land‑use restrictions that may be required by the Secretary.
(10)	The purchaser has complied and continues to comply with any request for information or administrative subpoena issued by the Secretary.
(11)	The purchaser is not liable, potentially liable, or affiliated with any other person who is liable or potentially liable for any cost associated with the response, remedial action, or natural resources restoration at the property through any of the following:
a.	Any direct or indirect familial relationship.
b.	Any contractual, corporate, or financial relations, other than a contractual, corporate, or financial relationship that is created by an instrument through which title to the property is conveyed, an instrument through which sale or purchase of the property is financed, or by a contract for the sale of goods or services.
c.	A reorganization in bankruptcy of a business entity that is liable or potentially liable.
(a3)	A purchaser of any real property comprising an inactive hazardous substance or waste disposal site may submit a written request to the Secretary for a determination that the purchaser has met all the conditions set out in subsection (a2) of this section. A determination may be made subject to the purchaser meeting all the conditions in subsection (a2) of this section on or after closing that cannot reasonably be met prior to closing. A request for a determination that a purchaser has met all the conditions set out in subsection (a2) of this section must be accompanied by a fee of one thousand dollars ($1,000) to defray administrative costs of making the determination. The Secretary shall develop and implement procedures to provide expeditious review of requests for determinations so as to expedite real estate transactions involving contaminated properties.
(a4)	A person whose interest or ownership in real property comprising an inactive hazardous substance or waste disposal site is solely based on or derived from a security interest in the property shall not be considered a responsible party unless the person at any time manages, operates, or participates in the management or operation of, any facility located on the real property. A responsible party shall be directly liable to the State for any or all of the reasonably necessary expenses of developing and implementing a remedial action program for the property. The Secretary shall bring an action for reimbursement of the Inactive Hazardous Sites Cleanup Fund in the name of the State in the superior court of Wake County, the county in which the site is located, or in an appropriate federal court to recover such sum and the cost of bringing the action. The State must show that a danger to the public health or the environment existed and that the State complied with the provisions of this Part.
(b)					The State shall have a lien on any property with respect to which the State has unrecovered costs for a response, remedial action, or natural resources restoration. The amount of the lien shall be the amount of the unrecovered costs. A lien under this subsection shall be superior to all other liens on the property.
(c)	The definitions set out in G.S. 130A‑310.31(b) apply to this subsection. Any person may submit a written request to the Department for a determination that a site that is subject to this Part has been remediated to unrestricted use standards as provided in Part 5 of Article 9 of Chapter 130A of the General Statutes. A request for a determination that a site has been remediated to unrestricted use standards shall be accompanied by a fee required by G.S. 130A‑310.39(a)(2). If the Department determines that the site has been remediated to unrestricted use standards, the Department shall issue a written notification that no further remediation will be required at the site. The notification shall state that no further remediation will be required at the site unless the Department later determines, based on new information or information not previously provided to the Department, that the site has not been remediated to unrestricted use standards or that the Department was provided with false or incomplete information. Under any of those circumstances, the Department may withdraw the notification and require responsible parties to remediate the site to unrestricted use standards."
SECTION 5.  G.S. 143‑215.3 is amended by adding a new subsection to read:
"(g)	The provisions of subsections (a), (a1), (a2), (a3), (a4), and (b) of G.S. 130A‑310.7 govern responsibility for a release, discharge, deposit, or disposal of oil, hazardous substances, waste, or other contaminants regulated under this Article or under Article 21A of this Chapter, including any release or discharge of petroleum from an underground storage tank or an aboveground storage tank."
SECTION 6.  G.S. 130A‑310.31(b)(3) reads as rewritten:
"(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:
a.	Any State remedial program or
b.	The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (42 U.S.C. § 9601 et seq.) except for property listed on the National Priorities List pursuant to 42 U.S.C. § 9605."
SECTION 7. G.S. 130A‑310.31(b)(10) reads as rewritten:
"(10)	'Prospective developer' means any person with a bona fide, demonstrable desire 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."
SECTION 8. G.S. 130A‑310.34(b) reads as rewritten:
"(b)	Publication of the approved summary of the Notice of Intent in the North Carolina Register and publication in a newspaper of general circulation shall begin a public comment period of at least  30 days from the later date of publication. 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."
SECTION 9. G.S. 130A‑310.34(c) reads as rewritten:
"(c)	Any person who desires a public meeting on a proposed brownfields agreement shall submit a written request for a public meeting to the Department within 21 days after the public comment period begins. The Department shall consider all requests for a public meeting and shall hold a public meeting if the Department determines that there is significant public interest in the proposed brownfields agreement. If the Department decides to hold a public meeting, the Department shall, at least 15 days prior to the public meeting, mail written notice of the public meeting to all persons who requested the public meeting and to any other person who had previously requested notice. The Department shall also direct the prospective developer to publish, at least 15 days prior to the date of the public meeting, a notice of the public meeting at least one time in a newspaper having general circulation in such county where the brownfields property is located. In any county in which there is more than one newspaper having general circulation, the Department shall direct the prospective developer to publish a copy of the notice in as many newspapers having general circulation in the county as the Department in its discretion determines to be necessary to assure that the notice is generally available throughout the county. The Department shall prescribe the form and content of the notice to be published. The Department shall prescribe the procedures to be followed in the public meeting. The Department shall take detailed minutes of the meeting. The minutes shall include any written comments, exhibits, or documents presented at the meeting."
SECTION 10. G.S. 130A‑310.37(c) reads as rewritten:
"(c)	The Department shall not enter into a brownfields agreement for any site listed on the National Priorities List pursuant to CERCLA/SARA."
SECTION 11. G.S. 105‑277.13(a) reads as rewritten:
"(a)	Qualifying improvements on brownfields properties are designated a special class of property under Article V, Sec. 2(2) of the North Carolina Constitution and shall be appraised, assessed, and taxed in accordance with this section. Except as provided in this subsection, an owner of land who is protected from liability for remediation pursuant to G.S. 130A‑310.33(a) is entitled to the partial exclusion provided by this section for the first five taxable years beginning after completion of qualifying improvements made after the later of July 1, 2000, or the date of the brownfields agreement. If a person who caused or contributed to contamination at a brownfields property holds any ownership interest in the property, that person is not eligible for the partial exclusion. After property has qualified for the exclusion provided by this section, the assessor for the county in which the property is located shall annually appraise the improvements made to the property during the period of time that the owner is entitled to the exclusion."
SECTION 12:  This act becomes effective 1 July 2004.