SECTIONS 25395.20-25395.32 - California Statutes

HEALTH AND SAFETY CODE

SECTION 25395.20-25395.32

25395.20. (a) For purposes of this article, the following
definitions shall apply:
(1) "Account" means the Cleanup Loans and Environmental Assistance
to Neighborhoods Account established pursuant to subdivision (b).
(2) (A) "Brownfield" means property that meets all of the
following conditions:
(i) It is located in an urban area.
(ii) It was previously the site of an economic activity that is no
longer in operation at that location.
(iii) It has been vacant or has had no occupant engaged in
year-round economically productive activities for a period of not
less than the 12 months previous to the date of application for a
loan pursuant to this article.
(B) "Brownfield" does not include any of the following:
(i) Property listed, or proposed for listing, on the National
Priorities List pursuant to the federal act (42 U.S.C. Sec. 9605 (a)
(8)(B)).
(ii) Property that is, or was, owned or operated by a department,
agency, or instrumentality of the United States.
(iii) Property that will be the site of a contiguous expansion or
improvement of an operating industrial or commercial facility, unless
the property is a brownfield described in subparagraph (C) of
paragraph (6).
(3) "Cleanup and abatement order" means an order issued by a
regional board pursuant to Section 13304 of the Water Code.
(4) "Cleanup Loans and Environmental Assistance to Neighborhoods
Program" or "CLEAN" means the loan program established by the
department pursuant to Section 25395.22, to finance the performance
of actions necessary to respond to the release or threatened release
of hazardous material on an eligible property.
(5) "Economic activity" means a governmental activity, a
commercial, agricultural, industrial, or not-for-profit enterprise,
or other economic or business concern.
(6) "Eligible property" means a site that is any of the following:
(A) A brownfield.
(B) An underutilized property that is any of the following:
(i) A property described in clause (v) of subparagraph (D) of
paragraph (16).
(ii) A property located in an enterprise zone established pursuant
to the Enterprise Zone Act (Chapter 12.8 (commencing with Section
7070) of Division 7 of Title 1 of the Government Code), in a project
area for which a redevelopment plan has been approved pursuant to
Article 4 (commencing with Section 33300) of Chapter 4 of Part 1 of
Division 24, or in an eligible area, as determined pursuant to
paragraph (2) of subdivision (c) of Section 7072 of the Government
Code.
(iii) A property, the redevelopment of which will result in any of
the following:
(I) An increase in the number of full-time jobs that is at least
100 percent greater than the number of jobs provided by the economic
activity located on the property before redevelopment occurred.
(II) An increase in property taxes paid to the local government
that is at least 100 percent greater than the property taxes paid by
the property owner before redevelopment occurred.
(III) Sales tax revenues to the local government that are
sufficient to defray the costs of providing municipal services to the
property after the redevelopment occurs.
(IV) Housing for very low, low-, or moderate-income households, as
defined in paragraph (2) of subdivision (h) of Section 65589.5 of
the Government Code.
(V) The construction of new or expanded school facilities, public
day care centers, parks, or community recreational facilities.
(C) A brownfield or an underutilized property described in clause
(ii) of subparagraph (B) that will be the site of a contiguous
expansion of an operating industrial or commercial facility owned or
operated by one of the following:
(i) A small business.
(ii) 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) 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.
(7) "Eligible property" does not include any of the following:
(A) Property listed or proposed for listing on the National
Priorities List pursuant to the federal act (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
the property meets the criteria specified in subparagraph (C) of
paragraph (6).
(8) (A) "Hazardous material" means a substance or waste that,
because of its physical, chemical, or other characteristics, may pose
a risk of endangering human health or safety or of degrading the
environment. "Hazardous material" includes, but is not limited to,
all of the following:
(i) A hazardous substance, as defined in Section 25281 or 25316,
including the substances specified in Section 25317.
(ii) A hazardous waste, as defined in Section 25117.
(iii) A waste, as defined in Section 101075, or as defined in
Section 13050 of the Water Code.
(B) "Hazardous material" does not include undisturbed naturally
occurring hazardous material unless it will adversely affect the
reasonable use of a property after response action is completed.
(9) "Implementation costs," for purposes of the expenditure of any
funds pursuant to this article, includes, but is not limited to, the
costs of overseeing and reviewing preliminary endangerment
assessments and response actions that are financed by a loan issued
pursuant to this article, including oversight conducted by a regional
board pursuant to Section 25395.28.
(10) "Investigating site contamination program" means the loan
program established by the department pursuant to Section 25395.21 to
conduct a preliminary endangerment assessment of a brownfield or an
underutilized urban property.
(11) "Leaking underground fuel tank" has the same meaning as
"tank," as defined in Section 25299.24.
(12) "No longer in operation" means an economic activity that is,
or previously was, located on a property that is not conducting
operations on the property of the type usually associated with the
economic activity.
(13) "Project" means any response action, and the planned future
development, included in an application for a loan pursuant to
Section 25395.22.
(14) "Property" means real property, as defined in Section 658 of
the Civil Code.
(15) "Small business" means an independently owned and operated
business, that is not dominant in its field of operation, that,
together with affiliates, has 100 or fewer employees, and that has
average annual gross receipts of ten million dollars ($10,000,000) or
less over the previous three years, or a business that is a
manufacturer, as defined in Section 14837 of the Government Code,
with 100 or fewer employees.
(16) "Underutilized property" means property that meets all of the
following conditions:
(A) It is located in an urban area.
(B) An economic activity is conducted on the property.
(C) It is the subject of a proposal for development pursuant to
this article.
(D) One of the following applies:
(i) The economic activity on the property is irregular or
intermittent in nature and uses the property for productive purposes
less than four months in any calendar year.
(ii) The economic activity on the property employs less than 25
percent of the property for productive purposes.
(iii) The structures, infrastructure, and other facilities on the
property are antiquated, obsolete, or in such poor repair that they
cannot be used for the purposes for which they were originally
constructed and require replacement in order to implement the
redevelopment proposal.
(iv) The economic activity conducted on the property is a parking
facility or an activity that offers a similar marginal economic
service and the facility or activity will be replaced when the
property is redeveloped.
(v) The property is adjacent to one or more brownfields or
underutilized properties that are the subject of a project under this
article and its inclusion in the project is necessary in order to
ensure that the redevelopment of the brownfield or brownfields or
underutilized property or underutilized properties occurs.
(E) An underutilized property does not include any of the
following:
(i) Property listed or proposed for listing on the National
Priorities List pursuant to the federal act (42 U.S.C. Sec. 9605 (a)
(8)(B)).
(ii) Property that is, or was, owned or operated by a department,
agency, or instrumentality of the United States.
(iii) Property that will be the site of a contiguous expansion or
improvement of an operating industrial or commercial facility, unless
the property is an underutilized property described in subparagraph
(C) of paragraph (6).
(17) "Regional board" means a California regional water quality
control board.
(18) "State board" means the State Water Resources Control Board.
(19) "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 paragraph (2) of subdivision
(b) of Section 21080.7 of the Public Resources Code.
(b) The Cleanup Loans and Environmental Assistance to
Neighborhoods Account is hereby established in the General Fund to
provide low-interest loans to qualified applicants for the purpose of
funding preliminary endangerment assessments and response actions at
brownfields and underutilized properties located in the state
pursuant to this article, and for any other purpose determined by the
department to stimulate the redevelopment of brownfields and
underutilized properties, if the department determines that the
redevelopment will result in the overall improvement of the community
in which the property is located and will provide a reasonable
economic or social benefit, in accordance with subdivision (c). All
of the following moneys shall be deposited in the account:
(1) Funds appropriated by the Legislature for the purposes of this
article.
(2) Notwithstanding Section 16475 of the Government Code, any
interest earned upon money deposited into the account.
(3) Proceeds from loan repayments.
(4) Proceeds from the sale of property pursuant to this article
that is the subject of foreclosure or its equivalent, as defined in
subdivision (f) of Section 25548.1, and proceeds from the enforcement
of any other security interest.
(c) (1) Except as provided in paragraph (2), notwithstanding
Section 13340 of the Government Code, the money in the account is
continuously appropriated without regard to fiscal years to the
department for the purpose of providing loans pursuant to Sections
25395.21 and 25395.22 and for the purpose of providing subsidies for
environmental insurance pursuant to Article 8.7 (commencing with
Section 25395.40), the California Financial Assurance and Insurance
for Redevelopment Program.
(2) The money in the account may be expended by the department, a
regional board, the state board, and the agency for the
implementation and administration of this article and for
implementation and administration of the California Financial
Assurance and Insurance for Redevelopment Program (Article 7
(commencing with Section 25395.40)), only upon appropriation by the
Legislature in the annual Budget Act or in another measure.

25395.21. (a) The department, with the approval of the secretary,
shall establish an Investigating Site Contamination Program to
provide loans to eligible persons to conduct preliminary endangerment
assessments of brownfields and underutilized properties. A loan
provided pursuant to this section shall not be used for the cost of a
phase I environmental assessment or the department's oversight of
the preparation and approval of the preliminary endangerment
assessment.
(b) The department shall develop a loan application form for an
investigating site contamination program loan and shall include, in
the form, any provisions that the department considers to be
appropriate. The application form shall be signed by the loan
applicant and shall be submitted to the department with all of the
following documentation:
(1) The phase I environmental assessment for the property that is
the subject of the loan application.
(2) Information that demonstrates that the property is a
brownfield or an underutilized property.
(3) If the owner of the property that is the subject of the loan
application is not the loan applicant, one of the following:
(A) Documentation that demonstrates that the owner consents to the
performance of the preliminary endangerment assessment of the
property.
(B) A copy of an agreement between the property owner and the loan
applicant that gives the loan applicant an option to purchase the
property.
(C) If the loan applicant is a local government entity, or a
developer or prospective purchaser acting together with a local
government entity pursuant to an enforceable agreement, a
demonstration to the department that the local government entity, or
developer or prospective purchaser acting together with the local
government entity pursuant to an enforceable agreement, has legal
access to perform the preliminary endangerment assessment at the
property, or will have legal access, prior to receiving loan funds.
(4) Any other information the department deems necessary.
(c) The department shall determine whether to approve a loan
application pursuant to this section based upon the information
submitted pursuant to subdivision (b). In making a decision regarding
whether to approve a loan application, the department shall approve
a loan pursuant to this section for a property only if the department
determines the property is a brownfield or an underutilized
property.
(d) The maximum amount of a loan granted pursuant to this section
shall not exceed one hundred thousand dollars ($100,000).
(e) (1) Except as provided in paragraph (2) and in subdivision
(f), upon approval of the loan application by the department, the
loan recipient shall execute an agreement with the department to
repay the loan over a period not to exceed three years.
(2) If the loan is to a local government entity, or to a developer
or prospective purchaser acting together with a local government
entity pursuant to an enforceable agreement, the department may delay
the beginning of the loan repayment period.
(3) Except as provided in paragraph (4), the agreement made
pursuant to paragraph (1) shall require that if the loan recipient
recovers from a responsible party any costs incurred in taking a
response action at the site that is the subject of the loan
application, any money so recovered, except for reasonable costs and
the fees incurred to recover that money, shall be used first to repay
the loan or repay the grant.
(4) Notwithstanding paragraph (3), a loan recipient is not
required to first use the money recovered to repay the loan or grant,
if the recipient can demonstrate, to the satisfaction of the
department, that the recovered money is necessary to, and is being
applied to, the total environmental remediation of the property, and
that the total of the recovered money and the loan amount does not
exceed the cost of remediation.
(f) If a loan recipient who is not the owner of the property and
the department determine, after the completion of the preliminary
endangerment assessment, that the sum of the cost of remediation and
the property purchase price makes the redevelopment of the property
not economically feasible, the department may waive the repayment of
up to 75 percent of the loan, and the amount waived shall be deemed a
grant to the loan recipient. If the department waives the repayment
of part of the loan, the recipient shall repay the remaining portion
of the loan within one year of that waiver.
(g) Upon approval of a loan, the recipient shall enter into an
agreement with the department for the department to provide
regulatory oversight of the preparation and approval of the
preliminary endangerment assessment.
(h) Notwithstanding any requirement of this division regarding
cost recovery or reimbursement for oversight costs, a loan recipient
is not liable for paying the department's cost associated with the
oversight of the preparation and approval of the preliminary
endangerment assessment if the department determines there are
sufficient funds in the account to reimburse the department for that
oversight. If the department determines that the account has
insufficient funds to pay for the oversight costs associated with the
oversight of the preparation and approval of the preliminary
endangerment assessment, the loan recipient shall pay the department
the amount of those costs.

25395.22. (a) The department, with the approval of the secretary,
shall establish a Cleanup Loans and Environmental Assistance to
Neighborhoods Program to provide loans to finance the performance of
any action necessary to respond to the release or threatened release
of hazardous material at an eligible property. A recipient of a loan
to perform an action to respond to a release or threatened release of
a hazardous material at an eligible property that is granted
pursuant to this section may also use the loan funds to pay the
premium for environmental insurance products to facilitate the
development of the site, if the insurance company has an A.M. Best
Financial Strength Rating of A+ or better and an A.M. Best Financial
Size Category of FSC X or larger and is authorized to offer
environmental insurance in California. The department shall take
those necessary actions to promote the use of loans under the CLEAN
program by local governments. A loan provided pursuant to this
section shall not be used to pay for a phase I environmental
assessment, a preliminary endangerment assessment, the department's
oversight of actions necessary to respond to the release or
threatened release of hazardous material at an eligible property, or
any operation and maintenance activity at a site.
(b) The department shall develop an application form for a loan
under the CLEAN program and shall include, in the form, any
provisions that the department determines to be appropriate to carry
out the CLEAN program. The application shall be signed by the loan
applicant and shall be accompanied by all of the following:
(1) A preliminary endangerment assessment that has been approved
by the department, or an environmental assessment with equivalent
information, that discloses the presence of a release or threatened
release of a hazardous material at the property at concentrations
that may pose a risk to public health and safety and the environment.
(2) The name and address of the project coordinator for the site
and the r