Chapter 250

2006 -- S 3113

Enacted 07/03/06

A N A C T

RELATING TO HEALTH AND SAFETY -- INDUSTRIAL PROPERTY REMEDIATION AND REUSE ACT

Introduced By: Senators Sosnowski, Pichardo, Paiva-Weed, Badeau, and Breene

Date Introduced: May 18, 2006

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 23-19.14-2, 23-19.14-3, 23-19.14-5, 23-19.14-7, 23-19.14-8, 23-

19.14-10, 23-19.14-11 and 23-19.14-12 of the General Laws in Chapter 23-19.14 entitled

"Industrial Property Remediation and Reuse Act" are hereby amended to read as follows:

23-19.14-2. Declaration of policy. -- It shall be the policy of this state to assure that:

      (1) Activities are taken to control and eliminate contamination at industrial properties

that are fair, consistent, and compatible with the current and reasonably foreseeable future use of

the property;

      (2) Environmental barriers to economic redevelopment and beneficial reuse of

contaminated properties are removed;

      (3) Opportunities are available for businesses to realistically manage their environmental

liabilities; and,

      (4) Voluntary and cooperative clean-up actions are encouraged to the greatest extent

possible.; and

(5) Processes for environmental clean-up and liability relief are effective and efficient

and minimize transaction costs to the extent reasonably feasible in order to facilitate appropriate

reuse of contaminated properties.

23-19.14-3. Definitions. -- (a) "40 CFR" means that section or subsection of the code of

federal regulations, title 40, protection of environment, chapter 1, environmental protection

agency. References to the administrator, appearing therein, shall be interpreted as referring to the

director of the department of environmental management.

      (b) "Bona fide prospective purchaser" means a purchaser of a site person who intends to

purchase a contaminated property, who had has documented the intent to purchase the property in

writing, and who has offered to pay fair market value for the property in the contaminated state.

For purposes of this chapter, any former owner, former operator, or other person who is otherwise

a responsible party or any person who had more than ten percent (10%) equitable or other legal

interest in the site or any of the operations related to the contamination cannot be considered as a

bona fide prospective purchaser. Once a purchaser has certified their status as a bona fide

prospective purchaser to the department and the department has acknowledged receipt of such

certification, a purchaser may maintain that status for up to one year following purchase of the

property, unless it is subsequently found that the purchaser did not meet the criteria for a bona

fide prospective purchaser as outlined in this section. If the department finds that substantial

progress has been made in investigating conditions of the site and/or meeting the requirements for

a remedial decision letter, such status may be renewed by the department for a specified period of

time not to exceed one year for each renewal.

      (c) "Hazardous materials" means any material or combination or mixture of materials

containing any hazardous substance in an amount and concentration such that when released into

the environment, that material can be shown to present a significant potential to cause an acute or

chronic adverse effect on human health or the environment. Hazardous material shall also include

any material that contains a hazardous waste. Hazardous material does not include petroleum for

the purposes of this chapter.

      (d) "Hazardous substances" means any substance designated as hazardous pursuant to 40

CFR 300.5, as is or as amended. Hazardous substance shall not include, for the purposes of this

chapter, asbestos or radioactive materials.

      (e) "Hazardous wastes" means any material defined as hazardous waste pursuant to

chapter 19.1 of this title, and the regulations promulgated under chapter 19.1 of this title.

      (f) "Operator" means the person responsible for the operation of the activities at the site.

      (g) (1) "Owner" means the person who owns the site or part of the site.

      (2) In the case of a receiver, the superior court supervising the receiver shall have

jurisdiction to determine the nature and extent of the receiver's obligations to comply with the

provisions of this chapter. Any obligation to comply with the provisions of this chapter shall be

binding on a receiver solely in his or her fiduciary capacity.

      (h) "Person" means an individual, trust, firm, joint stock company, corporation

(including a government corporation), partnership, association, the federal government or any

agency or subdivision of the federal government, a state, municipality, commission, political

subdivision of a state, or any interstate body.

      (i) "Petroleum" means any virgin petroleum product including the following products:

      (1) Unused distillate and residual oil, including but not limited to gasoline, aviation

fuels, kerosene, diesel, and heating oils.

      (2) Unused crankcase oil, lubricants, hydraulic oils, penetrant oils, tramp oils, quench

oils, and other industrial oils.

      (j) (1) "Release" shall be defined by 40 CFR 300.5 for purposes of this chapter, but shall

also exclude any release from a process, activity, or source area allowed under a permit, license,

or approval issued after January 1, 1987 by any regulatory process or legal authority or any

release of hazardous materials solely derived from common household materials and occurring at

the household.

      (2) For purposes of this chapter, release also includes an actual or potential threat of

release.

      (k) "Remedial or response action" means those actions taken to rectify the effects of a

release of hazardous material, and/or petroleum so that it does not cause a substantial danger to

present or future public health or welfare, or the environment.

      (l) "Remediation" means the act of implementing, operating, and maintaining, a remedy,

remedial action or response action.

      (m) "Responsible party" has the meaning attributed to it by the provisions of section 23-

19.14-6 or 23-19.14-6.1.

      (n) "Site" means all contiguous land, structures, and other appurtenances and

improvements on the land contaminated by the use, storage, release, or disposal of hazardous

material including the extent of contamination and all suitable areas in very close proximity to the

contamination where it will be necessary to implement or conduct any required investigation or

remedial action.

(o) "All appropriate inquiries" means an environmental due diligence process for

assessing a property for presence or potential presence of contamination, in accordance with

requirements established by the department of environmental management that are not

inconsistent with the provisions of 40 CFR 312 establishing federal standards for all appropriate

inquiries.

(p) "Letter of Compliance" means a formal, written communication from the department

signifying that the remedial action has been satisfactorily completed and the objectives of

environmental clean-up, pursuant to section 23-19.14-4 have been met.

(q) "Remedial Decision Letter" means a formal, written communication from the

department that approves a site investigation, identifies the preferred remedial alternative and

authorizes the development of a remedial action work plan in order to achieve the objectives of

environmental clean-up.

23-19.14-5. Environmental equity and public participation. -- (a) The department of

environmental management shall consider the effects that clean-ups would have on the

populations surrounding each site and shall consider the issues of environmental equity for low

income and racial minority populations. The department of environmental management will

develop and implement a process to ensure community involvement throughout the investigation

and remediation of contaminated sites. That process shall include, but not be limited to, the

following components:

      (1) Notification to abutting residents when a work plan for a site investigation is

proposed;

      (2) Adequate availability of all public records concerning the investigation and clean-up

of the site, including, where necessary, the establishment of informational repositories in the

impacted community; and

      (3) Notification to abutting residents, and other interested parties, when the investigation

of the site is deemed complete by the department of environmental management.

(4)(i) Whenever a site that is known to be contaminated or is suspected of being

contaminated based upon its past use is considered for possible reuse as the location of a school

child-care facility, or as a recreational facility for public use, the person proposing such reuse

shall, prior to the establishment of a final scope of investigation for the site and after the

completion of all appropriate inquiries, hold a public meeting for the purposes of obtaining

information about conditions at the site and the environmental history at the site that may be

useful in establishing the scope of the investigation of the site and/or establishing the objectives

for the environmental clean-up of the site. The public meeting shall be held in a city or town in

which the site is located; public notice shall be given of the meeting at least ten (10) business day

prior to the meeting; and following the meeting, the record of the meeting shall be open for a

period of not less than ten (10) and not more than twenty (20) business days for the receipt of

public comment. The results of all appropriate inquiries analysis and the public meeting,

including the comment period, shall be documented in a written report submitted to the

department.

(ii) No work (remediation or construction), shall be permitted at the property until the

public meeting and comment period regarding the site's proposed reuse has closed except where

the director determines that such work is necessary to mitigate or prevent:

(A) an imminent threat to human health, public safety or the environment; or

(B) off-site migration of known or suspected contamination.

(iii) The public notice, meeting and comment required by this section shall be in addition

to any other requirements for public notice and comment relating to the investigation or remedy

of the site and may be made part of another meeting pertaining to the site provided that the

minimum standards established by this section for notice and comment are met. Any investigation

or remediation undertaken prior to the completion of the public comment period shall be limited

to measures necessary to define and/or mitigate the imminent threat and/or off-site migration.

(iv) The director shall establish, by regulation, standards and practice, which are

consistent with federal practices, for purposes of satisfying the requirement to carry out all

appropriate inquiries for the purposes of this chapter, the standard for the reporting of the results

of those inquiries, and the process for notification to the public of the public meeting, the

standards and practices for conducting the public meeting, and reporting on public comment.

(b) This community involvement process will be coordinated with the public notice and

comment opportunity provided in section 23-19.14-11 when a final settlement agreement is

proposed.

(b) Effective until January 1, 2007, the community involvement process may be

coordinated, as appropriate, with the public notice and comment opportunity provided in section

23-19.14-11.

      (c) The department of environmental management will develop and implement a process

by which a person that is or may be affected by a release or threatened release of a hazardous

material at a site located in the community in which the person works or resides may request the

conduct of a site assessment; and a decision process, with objective criteria, specifying how the

department will consider and appropriately respond to such requests.

      (d) The department of environmental management will maintain, update not less than

annually, and make available to the public a record of sites, by name and location, at which

remedial actions have been completed in the previous year and are planned to be addressed under

the state site remediation and Brownfields program in the upcoming year. The public record shall

identify whether or not the site, on completion of the remedial action, will be suitable for

unrestricted use and, if not, shall identify the institutional controls relied on in the remedy.

23-19.14-7. Exemptions to liability. -- The following parties are not responsible parties

and shall not be held liable for costs or damages associated with a release of hazardous material

and/or petroleum:

      (1) Persons otherwise liable who can establish by a preponderance of the evidence that

the release or threat of release of a hazardous substance and the damages resulting from that

release or threat of release were caused solely by an act of God or an act of war;

      (2) Persons who are defined as bona Bona fide prospective purchasers and who enter an

enforceable settlement agreement under section 23-19.14-10; who have received:

(i) A remedial decision letter and are actively engaged in implementing the remedial

action approved therein; provided, that the remedial action is being diligently pursued to

completion in accordance with approved work schedules; or

(ii) A letter of compliance confirming successful completion of a remedial action

approved by the department; or

(iii) An enforceable settlement agreement under section 23-19.14-10.

      (3) Persons who maintain an indicia of ownership solely to protect a secured interest in

land and are not operators;

      (4) Persons who are not operators and who act solely as custodial receivers or who can

establish by a preponderance of evidence that they are an innocent landowner and the release or

threat of release were caused solely by an act or omission of a third party other than an employer

or agent of the defendant, or whose act or omission occurs in connection with a contractual

relationship, existing directly or indirectly, with the defendant if the defendant establishes:

      (i) He or she exercised due diligence in the acquisition of the site at the time of purchase

and exercised due care with respect to the hazardous material and/or petroleum concerned, taking

into consideration the characteristics of the hazardous material, in light of the facts and

circumstances; and

      (ii) He or she took precautions against foreseeable acts, or omissions of any third party

and the consequences that could foreseeably result from those acts or omissions;

      (5) A unit of state or local government which acquired ownership or control

involuntarily through bankruptcy, tax delinquency, abandonment or other circumstances in which

the government involuntarily acquires title by virtue of its function as sovereign; provided,

however, that the unit of state or local government did not cause or contribute to the release or

threatened release of a hazardous material at the site; and

      (6) (i) A person that owns real property that is contiguous to or otherwise similarly

situated with respect to, and that is or may be contaminated by a release or threatened release of a

hazardous material from, real property that is not owned by that person shall not be considered to

be a responsible party for the site solely by reason of the contamination if:

      (A) The person did not cause, contribute, or consent to the release or threatened release;

      (B) The person is not:

      (I) Potentially liable, or affiliated with any other person that is potentially liable, for

response costs at the site through any direct or indirect familial relationship or any contractual,

corporate, or financial relationship (other than a contractual, corporate, or financial relationship

that is created by a contract for the sale of goods or services); or

      (II) The result of a reorganization of a business entity that was potentially liable;

      (C) The person takes reasonable steps to:

      (I) Stop any continuing release;

      (II) Prevent any threatened future release; and

      (III) Prevent or limit human, environmental, or natural resource exposure to any

hazardous substance released on or from property owned by that person;

      (D) The person provides full cooperation, assistance, and access to persons that are

authorized to conduct response actions or natural resource restoration at the site from which there

has been a release or threatened release (including the cooperation and access necessary for the

installation, integrity, operation, and maintenance of any complete or partial response action or

natural resource restoration at the site);

      (E) The person:

      (I) Is in compliance with any land use restrictions established or relied on in connection

with the response action at the site; and

      (II) Does not impede the effectiveness or integrity of any institutional control employed

in connection with a response action; and

      (F) The person provides all legally required notices with respect to the discovery or

release of any hazardous substances at the facility.

      (ii) To qualify as a person described in this subdivision, a person must establish by a

preponderance of the evidence that the conditions in subparagraphs (i)(A) through (i)(F) of this

subdivision have been met.

23-19.14-8. Voluntary investigations and remedial actions. -- (a) A person who is not

otherwise defined as a responsible party under section 23-19.14-6 and/or section 23-19.14-6.1

will not become a responsible party if that person voluntarily undertakes and completes response

actions under a remedial action plan approved by the department of environmental management.

Nothing in this section shall be construed to relieve a person from liability for failure to complete

a remedial response action or failure to exercise due care in performing remedial response

actions.

      (b) A person who is not otherwise defined as a responsible party under section 23-19.14-

6 and/or section 23-19.14-6.1 will not become associated with a release or threat of release as a

result of their performing investigations of the presence, nature, and extent of hazardous materials

and/or petroleum at any site; provided, however, that the investigations do not aggravate or

contribute to a release at the site, and that the persons provide the results of those investigations to

the department of environmental management.

(c) A person who is defined as a responsible party under section 23-19.14-6 and/or

section 23-19.14-6.1 may defer their clean-up obligations for up to three (3) years if they conduct,

or allow another party to conduct, an investigation of the site to determine the presence, nature,

and extent of hazardous materials and/or petroleum; provided, however, that:

(1) the site has not been subject to previous notification to the department for a release of

hazardous materials or petroleum which has not been addressed in accordance with the

requirements of the department;

(2) any contamination found that presents an imminent threat to human health, public

safety or the environment, as determined by the department, shall be remediated in a timely and

effective manner; and

(3) any contamination, which requires removal or remediation pursuant to the applicable

requirements of the department, found that is migrating off-site, or presents a threat to migrate

off-site within one year as determined by the department, shall be mitigated in a timely manner

that effectively prevents off-site migration of contaminants.

A responsible party may only defer clean-up obligations when at the discretion of the

director, the delay will not aggravate or contribute to a release at the site and the results of those

investigations are submitted to the department of environmental management in a timely manner.

(d) After meeting all notification and investigation requirements set by the department in

regulation, a person who is defined as a responsible party under sections 23-19.14-6 and/or 23-

19.114-6.1 will have resolved their liability for contamination identified through such

investigation after either:

(i)_ Receiving a remedial decision letter and remaining actively engaged in implementing

the remedial action approved therein; provided, that the remedial action is being diligently

pursued to completion in accordance with approved work schedule; or

(ii) Receiving a letter of compliance confirming successful completion of a remedial

action approved by the department; or

(iii) Entering into an enforceable settlement agreement under section 23-19.14-10.

23-19.14-10. Settlement authorities. -- (a) The state may, through June 30, 2007, enter

into an agreement with any person to perform any response action if the state determines that that

action will be done properly by the person. Whenever practicable and in the public interest as

determined by the state, the state shall act to facilitate agreements under this section that are in the

public interest and consistent with applicable laws and regulations in order to expedite effective

remedial action and minimize litigation. The department of environmental management must be a

party to any settlement agreement entered under the authority of the chapter. The department of

environmental management shall not accept new proposals for settlement agreements after

December 31, 2006; provided, however, that an amendment to a settlement agreement that was

proposed prior to December 31, 2006, will not be considered a new settlement agreement.

      (b) Whenever the state has entered into an agreement under this section, the liability to

the state under this chapter of each party to the agreement including any future liability to the

state, arising from the release or threatened release that is the subject of the agreement shall be

limited as provided in the agreement pursuant to a covenant not to sue. The final covenant not to

sue may, at the discretion of the state, be transferred to successors or assigns that are not

otherwise found to be a responsible party under section 23-19.14-6. The covenant not to sue may

provide that future liability to the state of a settling party under the agreement may be limited to

the same proportion as that established in the original settlement agreement.

23-19.14-11. Filing and public comment on settlement agreements. -- (a) The state

shall provide, for settlement agreements that may be put into effect prior to July 1, 2007, an

opportunity to persons who are not named as parties to the action to comment on the proposed

agreement before its entry as a final judgment. Persons not named as parties to the action will

have fourteen (14) days after the date of the notice of the proposed agreement to submit written

comments. The state shall consider any written comments, views or allegations relating to the

proposed agreement. The state may withdraw or withhold its consent to the proposed settlement if

the comments, views, or allegations concerning the judgment disclose facts or considerations that

indicate that the proposed judgment is inappropriate, improper or inadequate.

      (b) The proposed agreement shall be considered final when all substantive public

comments have been addressed.

      (c) No later than thirty (30) days after a settlement agreement is deemed final, the

agreement shall be filed with the administrative adjudication division of the department of

environmental management and shall be deemed a final order of the director.

23-19.14-12. Protection from contribution actions. -- A party who has resolved its is

exempt from liability to the state under sections 23-19.14-7, 23-19.14-8 or 23-19.14-10 of this

chapter shall not be liable for claims for contribution regarding matters addressed in the letter of

compliance or the settlement agreement or the remedied agreement. The settlement shall not

discharge any of the other potentially liable persons unless its terms so provide but it reduces the

potential liability of the others by the amount of the settlement.

     SECTION 2. Chapter 23-19.14 of the General Laws entitled "Industrial Property

Remediation and Reuse Act" is hereby amended by adding thereto the following section:

23-19.14-7.1. Remedial agreements. – In addition to exemption from liability provided

for in section 23-19.14-7, the state and a person who has received a remedial decision letter may

enter into a remedial agreement that includes a covenant not to sue and contribution protection

and which describes the agreed remedial actions and shall be assignable as therein provided.

Whenever the state has entered into a remedial agreement under this section, the liability to the

state under this chapter of each party to the agreement including any future liability to the state,

arising from the release or threatened release that is the subject of the agreement shall be limited

as provided in the agreement pursuant to a covenant not to sue. The final covenant not to sue

may, at the discretion of the state, be transferred to successors or assigns that are not otherwise

found to be a responsible party under section 23-19.14-6. The covenant not to sue may provide

that future liability to the state of a person who is under the remedial agreement may be limited to

the same proportion as that established in the original agreement. A remedial agreement shall be

distinct from a letter of compliance, and the absence of a remedial agreement shall not affect or

compromise exemption to liability provided for in section 23-19.14-7.

     SECTION 3. This act shall take effect upon passage.

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LC03257

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