A BILL TO BE ENTITLED
AN ACT to promote economic development by facilitating the reuse of contaminated real property by clarifying the circumstances under which the owners of real property have a defense against liability for the cleanup of environmental damage and restoration of natural resources and by making that defense applicable to state cleanup programs.
The General Assembly of North Carolina enacts:
SECTION 1.  Part 1 of Article 7 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑279.13.  Defenses to liability for environmental cleanups for certain landowners.
(a)	Applicability. – 
(1)	Except as provided in subdivision (2) of this subsection, this section applies to liability for the cleanup of environmental damage and the restoration of natural resources under Article 9 of Chapter 130A of the General Statutes, Articles 21 and 21A of Chapter 143 of the General Statutes, and rules adopted pursuant to these Articles.
(2)	This section does not apply to liability arising from causes of action or claims of any entity other than the State.
(b)	Defenses to Liability. – A person who would otherwise be liable as a landowner for the cleanup of environmental damage and for the restoration of natural resources under any of the provisions of law to which this section applies is not liable if the person demonstrates that the person is either:
(1)	An innocent landowner under subsection (c) of this section.
(2)	A prospective purchaser under subsection (d) of this section.
(3)	A prospective developer under the provisions of Part 5 of Article 9 of Chapter 130A of the General Statutes
(c)	Innocent Landowner. – An innocent landowner is a bona fide purchaser of real property or a person whose interest or ownership in real property is solely based on or derived from a security interest in the property who establishes all of the following:
(1)	Any release of a contaminant on the property either:
a.	Occurred before the owner acquired the property or 
b.	Was caused solely by:
1.	An act of God.
2.	An act of war.
3.	An intentional act or omission of a third party who was not an employee or agent of the owner.
4.	An intentional act or omission of a third party who has not had and does not have a contractual relationship with the owner.
5.	Any combination of the foregoing causes.
(2)	Before acquiring title to the property, the owner made all appropriate inquiries into the previous ownership and uses of the property in accordance with generally accepted and good commercial and customary 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 contaminant is detectable by appropriate inspection. In the case of property that is used as a single-family residence at the time of its purchase by any person other than a governmental entity, 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 taken all appropriate and reasonable steps to:
a.	Stop any continuing discharge, release, deposit, or disposal.
b.	Prevent any threatened future discharge, release, deposit, or disposal.
c.	Conduct remedial measures approved by the Secretary that prevent or limit human, environmental, or natural resources exposure to any contaminant released at the property and to make the property safe for its intended use.
(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.(d)	Prospective Purchaser. – A prospective purchaser is a person who proposes to purchase real property on which the cleanup of environmental damage or restoration of natural resources may be required under any provision of law to which this section applies and who establishes all of the following to the satisfaction of the Secretary:
(1)	The prospective purchaser has satisfied or will satisfy all of the requirements that an owner must satisfy under subsection (c) of this section.
(2)	An owner or other responsible party has provided financial assurance for the full cost of the cleanup of environmental damage and restoration of natural resources to applicable State standards. Financial assurance mechanisms may include, with terms and conditions subject to the approval of the Secretary, letters of credit, insurance, surety bonds, and trust funds. An owner or other party responsible for cleanup of environmental damage and restoration of natural resources who has been determined to be eligible to have the cost of the cleanup and restoration paid under Part 2A of Article 21A of Chapter 143 of the General Statutes shall be required to provide financial assurance for only the amounts for which the owner or other responsible party is responsible under that Part.
(3)	No new structure that will interfere with soil remediation required under any provision of law to which this section applies will be erected on the property.
(e)	A prospective purchaser of any real property may request a determination that the prospective purchaser has met all of the conditions set out in subsection (d) of this section by submitting a written request for the determination to the Secretary. A determination may be made subject to the purchaser meeting all the conditions in subsection (d) 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 (d) 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.
(f)	A prospective purchaser who is otherwise entitled to a defense to liability as provided in this section is not entitled to the defense if any of the following apply:
(1)	The prospective purchaser knowingly or recklessly provides false information that forms a basis for the determination by the Secretary under subsection (e) of this section or that is offered to demonstrate compliance with the determination or fails to disclose relevant information about contaminants at the property.
(2)	New information indicates the existence of previously unreported contaminants or an area of previously unreported contaminants on or associated with the property that has not been remediated to applicable State standards, unless the determination is amended to include any previously unreported contaminant or any additional area where any contaminant is present. If the determination 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 to public health or the environment to a level less protective of public health and the environment than that required by the determination.
(3)	The level of risk to public health or the environment from contaminants is unacceptable at or in the vicinity of the property due to changes in exposure conditions, including (i) a change in land use that increases the probability of exposure to contaminants or in the vicinity of the property or (ii) the failure of remediation to mitigate risks to the extent required to make the property fully protective of public health and the environment as planned in the determination.
(4)	The Department obtains new information about a contaminant associated with the property or exposures at or around the property that raises the risk to public health or the environment associated with the property beyond an acceptable range and in a manner or to a degree not anticipated in the determination. Any person whose use, including any change in use, of the property causes an unacceptable risk to public health or the environment may be required by the Department to undertake additional remediation measures under the provisions of this Part.
(5)	A prospective purchaser causes or contributes to a release of a contaminant on the property.
(6)	A prospective purchaser fails to meet any continuing obligation under subsection (d) of this section.
(g)	The Secretary may adopt rules to implement this section."
SECTION 2.  G.S. 130A‑310.7 reads as rewritten:
"§ 130A‑310.7.  Liability of responsible parties; actions for reimbursement; liens; notification of completed remedial action.
(a)					 Subject only to the defenses set forth in G.S. 143B‑279.13, a person is a responsible party if the person either:
(1)	Discharges, releases, deposits, or disposes of any hazardous substance.
(2)	Contracts or arranges for the discharge, release, deposit, or disposal of any hazardous substance.
(3)	Accepts any hazardous substance for discharge, release, deposit, or disposal.
(4)	Transports or arranges for the transport of any hazardous substance for the purpose of discharge, release, deposit, or disposal of the hazardous substance.
(5)	Owns or operates a site that contains any hazardous substance.
(6)	Owned or operated a site at the time any hazardous substance was discharged, released, deposited, or disposed of at the site.
(a1)	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 an inactive hazardous substance or waste disposal site. 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 superior court of the county in which the site is located, or in federal court to recover such sum and the cost of bringing the action.  The State shall have a lien on the property on which the site is located for the unrecovered costs to the State of developing and implementing the remedial action program. The amount of a lien for unrecovered costs shall not exceed the amount by which the remedial action program increases the fair market value of the property. A lien for unrecovered costs 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 the 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 3.  Subsections (b) and (c) of G.S. 130A‑310.3 read as rewritten:
"(b)	Where possible, the Secretary shall work cooperatively with any owner, operator, responsible party, or any appropriate agency of the State or federal government to develop and implement the inactive hazardous substance or waste disposal site remedial action program.  An owner, operator, or responsible party who satisfies the Secretary that the owner, operator, or responsible party has implemented an inactive hazardous substance or waste disposal site remedial action program pursuant to this Part shall not be required, pursuant to Article 21 or 21A of Chapter 143 of the General Statutes, to clean up environmental damage that results from the same release or to restore natural resources damaged by that release.(c)	Whenever the Secretary has issued  a declaration under this section, and at any time during which the declaration is in effect, the Secretary may, in addition to any other powers he may have, order any responsible party:
(1)	To develop an inactive hazardous substance or waste disposal site remedial action program for the site subject to approval by the Department, and
(2)	To implement the program within reasonable time limits specified in the order.
(c1)	Written notice of an order under this section shall be provided to all persons subject to the order personally or by certified mail. If given by certified mail, notice shall be deemed to have been given on the date appearing in the return of the receipt. If giving of notice cannot be accomplished either personally or by certified mail, notice shall be given as provided in G.S. 1A‑1, Rule 4(j)."
SECTION 4.  The catchline of G.S. 143‑215.3 reads as rewritten:
"§ 143‑215.3.  General powers of Commission and Department; auxiliary powers; research functions; relation with the federal government; variances; remedial actions."
SECTION 5.  G.S. 143‑215.3 is amended by adding a new subsection to read:
"(g)	A person who would otherwise be liable as a landowner for the remediation of groundwater to meet the standards and classifications established under this Part is not liable as provided in G.S. 143B‑279.13."
SECTION 6.  G.S. 143‑215.84 reads as rewritten:
"§ 143‑215.84.  Removal of prohibited discharges.
(a)	Person Discharging. – Any person having control over oil or other hazardous substances discharged in violation of this Article shall immediately undertake to collect and remove the discharge and to restore the area affected by the discharge as nearly as may be to the condition existing prior to the discharge. If it is not feasible to collect and remove the discharge, the person responsible shall take all practicable actions to contain, treat and disperse the discharge; but no chemicals or other dispersants or treatment materials which will be detrimental to the environment or natural resources shall be used for such purposes unless they shall have been previously approved by the Commission. The owner of an underground storage tank who is the owner of the tank only because he is the owner of the land on which the underground storage tank is located, who did not know or have reason to know that the underground storage tank was located on his property, and who did not become the owner of the land as the result of a transfer or transfers to avoid liability for the underground storage tank shall not be deemed to be responsible for a release or discharge from the underground storage tank.
(a1)	Relation to Other Programs. – The Commission shall not require collection or removal of a discharge or restoration of an affected area under subsection (a) of this section if the person having control over oil or other hazardous substances discharged in violation of this Article complies with rules governing the collection and removal of a discharge and the restoration of an affected area adopted by the Commission pursuant to G.S. 143 214.1 or G.S. 143 215.94V. This subsection shall not be construed to affect the rights of any person under this Article or any other provision of law.(b)	Removal by Department. – Notwithstanding the requirements of subsection (a) of this section, the Department is authorized and empowered to utilize any staff, equipment and materials under its control or supplied by other cooperating State or local agencies and to contract with any agent or contractor that it deems appropriate to take such actions as are necessary to collect, investigate, perform surveillance over, remove, contain, treat or disperse oil or other hazardous substances discharged onto the land or into the waters of the State and to perform any necessary restoration. The Secretary shall keep a record of all expenses incurred in carrying out any project or activity authorized under this section, including actual expenses incurred for services performed by the State's personnel and for use of the State's equipment and material. The authority granted by this subsection shall be limited to projects and activities that are designed to protect the public interest or public property, and shall be compatible with the National Contingency Plan established pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. section 1251 et seq.
(c),	(d) Repealed by Session Laws 1989, c. 656, s. 2.
(e)	Notification of Completed Removal of Prohibited Discharges. – 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 discharge of oil or a hazardous substance in violation of this Article has been remediated to unrestricted use standards. A request for a determination that a discharge has been remediated to unrestricted use standards shall be accompanied by the fee required by G.S. 130A‑310.39(a)(2). If the Department determines that the discharge has been remediated to unrestricted use standards, the Department shall issue a written notification that no further remediation of the discharge will be required. The notification shall state that no further remediation of the discharge will be required unless the Department later determines, based on new information or information not previously provided to the Department, that the discharge 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 discharge to unrestricted use standards.
(f)	Land‑use Restrictions. – In order to reduce or eliminate the danger to public health or the environment posed by a discharge or release of oil or a hazardous substance, an owner, operator, or other responsible party may impose restrictions on the current or future use of the real property comprising any part of the site if the restrictions meet the requirements of this subsection. The restrictions must be agreed to by the owner of the real property, included in a remedial action plan for the site that has been approved by the Secretary, and implemented as a part of the remedial action program for the site. The Secretary may approve restrictions included in a remedial action plan in accordance with standards determined: (i) pursuant to rules for remediation of soil or groundwater contamination adopted by the Commission; (ii) with respect to the cleanup of a discharge or release from a petroleum underground storage tank, pursuant to rules adopted by the Commission pursuant to G.S. 143‑215.94V; or (iii) as provided in G.S. 130A‑310.3(d). 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. Any approved restriction shall be enforced by any owner, operator, or other party responsible for the oil or hazardous substance discharge site. Any land‑use restriction may also be enforced by the Department through the remedies provided in this Article, Part 2 of Article 1 of Chapter 130A of the General Statutes, or by means of a civil action. The Department may enforce any land‑use restriction without first having exhausted any available administrative remedies. A land‑use restriction may also be enforced by any unit of local government having jurisdiction over any part of the site. A land‑use 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. Any person who owns or leases a property subject to a land‑use restriction under this Part shall abide by the land‑use restriction
"(g)	Defense to Liability. – A person who would otherwise be liable as a landowner for the removal of a prohibited discharge of oil or other hazardous substance or for the restoration of an affected area is not liable as provided in G.S. 143B‑279.13."
SECTION 7.  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 either:
a.	Any State remedial program.
b.	The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended  (42 U.S.C. § 9601, et seq.) except for a site listed on the National Priorities List pursuant to 42 U.S.C. § 9605."
SECTION 8.  G.S. 130A‑310.31(b)(5) reads as rewritten:
"(5)	"Unrestricted use standards" when used in connection with "cleanup", "remediated", or "remediation" means contaminant concentrations for each environmental medium that are considered acceptable for all uses and that comply with generally applicable standards, guidance, or established methods governing the contaminants that are established by statute or adopted, published, or implemented by the Environmental Management Commission, the Commission, or the Department instead of the site‑specific contaminant levels established pursuant to this Part."
SECTION 9.  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 10.  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 11.  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 12.  G.S. 130A‑310.37(c) reads as rewritten:
"(c)	The Department shall not enter into a brownfields agreement for a site listed on the National Priorities List pursuant to 42 U.S.C. § 9605."
SECTION 13.  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 under 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. A person who caused or contributed to contamination at the brownfields property and who holds any ownership in the brownfields property is not eligible for the partial exclusion under this section. 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 14.  This act becomes effective 1 January 2006.