HB2127 - 571R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 49-283, Arizona Revised Statutes, is amended to read:

START_STATUTE49-283. Responsible party liability; exemptions; notice; definitions

A. For the purposes of imposing liability under this article, and except as provided in this section, a person is deemed the party responsible for the release or threatened release of a hazardous substance if the person:

1. Owned or operated the facility:

(a) When the hazardous substance was placed or came to be located in or on the facility.

(b) When the hazardous substance was located in or on the facility but before the release.

2. Owned or possessed the hazardous substance and arranged, by contract, agreement or otherwise, for the disposal, treatment or transport for disposal or treatment of the hazardous substance.

3. Accepted for transport to a disposal or treatment facility waste that contained a hazardous substance and either selected the facility to which it was transported or disposed of it in a manner contrary to law.

B. Notwithstanding the provisions of subsection A of this section, a person that owns real property is not a responsible party if there is a release or threatened release of a hazardous substance from a facility in or on the property unless one or more of the following applies to that person:

1. Was engaged in the business of generating, transporting, storing, treating or disposing of a hazardous substance at the facility or disposing of waste at the facility, or knowingly permitted allowed others to engage in such a business at the facility.

2. Permitted Allowed any person to use the facility for disposal of a hazardous substance.

3. Knew or reasonably should have known that a hazardous substance was located in or on the facility at the time right, title or interest in the property was first acquired by the person and engaged in conduct by which he associated himself with the release. For the purpose of this paragraph, a written warranty, representation or undertaking, which is set forth in an instrument conveying any right, title or interest in the real property and which is executed by the person conveying the right, title or interest, or which is set forth in any memorandum of any such instrument executed for the purpose of recording, is admissible as evidence of whether the person acquiring any right, title or interest in the real property knew or reasonably should have known that a hazardous substance was located in or on the facility. For purposes of this paragraph, "associated himself with the release" means having actual knowledge of the release and taking action or failing to take action that the person is authorized to take and that increases the volume or toxicity of the hazardous substance that has been released.

4. Took action which that significantly contributed to the release after he the person knew or reasonably should have known that a hazardous substance was located in or on the facility.

C. Any liability which that accrues to an owner of real property under this section does not accrue to any other person who is not an owner of the real property merely because the other person holds some right, title or interest in the real property. An owner of real property on which a public utility easement is located is not a responsible party with respect to any release caused by any act or omission of the public utility which that holds the easement in carrying out the specific use for which the easement was granted.

D. A person otherwise deemed a responsible party is not liable under this article if he the person can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the resulting damages were caused solely by:

1. An act of God.

2. An act of war.

3. An act or omission of a third party, whether lawful or unlawful, including acts of vandalism or unlawful disposal of hazardous waste or hazardous substances, other than an employee or agent of that person or other than one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with that person, unless the sole contractual arrangement arises from a published tariff and acceptance for carriage by a common carrier by rail, if that person establishes by a preponderance of the evidence that:

(a) He That person exercised due care with respect to the hazardous substance concerned, taking into consideration the characteristics of the hazardous substance in light of all relevant facts and circumstances.

(b) He That person took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions.

4. A release or threatened release which that was subject to limits or conditions in a federal permit or a state permit relating to the protection of public health or the environment and the operation of the releasing facility has been and is in compliance with applicable limits or conditions.

5. The application of a pesticide product registered under the federal insecticide, fungicide, and rodenticide act (61 Stat. 163) and applied according to label requirements.

6. Liability has been assumed by the federal postclosure liability fund established under 42 United States Code section 9607(k).

7. Any combination of paragraphs 1 through 6 of this subsection.

E. A person is not a responsible party with respect to a hazardous substance that is located on or beneath property that is owned or occupied by that person if the hazardous substance is present solely because it migrated from property that is not owned or occupied by that person and that person is not otherwise a responsible party as prescribed by subsection A, paragraph 2 or 3 of this section.

F. A person is not liable for costs or damages incurred solely as a result of an action taken or omitted while rendering care, assistance or advice that is consistent with rules adopted by the director, is consistent with the national contingency plan or is under the direction of an on-scene coordinator appointed pursuant to the national contingency plan and that is rendered with respect to a release or a threat of a release of a hazardous substance that creates a danger to public health or the environment. This subsection does not preclude liability for costs or damages that result from that person's negligence.

G. A state or local government and its employees or authorized representatives are not liable for costs or damages incurred as a result of an action taken in response to an emergency created by the release or threatened release of a hazardous substance that is generated by or from a facility owned by another person. This subsection does not preclude liability for costs or damages that result from gross negligence or intentional misconduct by this state or local government. For the purposes of this subsection, reckless, willful wilful or wanton misconduct constitutes gross negligence.

H. A person who maintains indicia of ownership in a property primarily to protect a security interest in a facility and who does not participate in the management of the facility is not liable as an owner or operator of that facility pursuant to this section. This subsection does not apply to a person who does any of the following:

1. Through intentional misconduct or gross negligence causes, contributes to or aggravates the release of a hazardous substance.

2. Fails to disclose to the facility's purchaser the known presence of a release or a threatened release of a hazardous substance at the time of sale or divestiture of the facility or the security interest in the facility.

3. Fails to obtain a phase I environmental assessment of the facility that complies with standards adopted by rule pursuant to subsection K of this section at the time of or at a reasonable time before foreclosure. This paragraph does not apply to residential properties with fewer than five residential units.

4. Fails to do any of the following after acquiring ownership of the facility:

(a) Provide the department reasonable access so that the necessary remedial actions may be conducted.

(b) Undertake reasonable steps to control access to the area of known presence of a release of a hazardous substance to protect the public health and welfare and the environment.

(c) Act diligently to sell or otherwise divest the property within two years of after the lender's possession or ownership, whichever is earlier.

I. A fiduciary is not personally liable as an owner or operator pursuant to this section. This section does not preclude claims against assets held in an estate, a trust or other fiduciary capacity for the release or a threatened release of a hazardous substance from one of the assets. This section does not apply if either of the following apply applies:

1. A fiduciary through intentional misconduct or gross negligence causes, aggravates or contributes to the release or threatened release of hazardous substances or permits allows others to do so, except that a fiduciary shall not be liable for the intentional misconduct or gross negligence of any nonemployee agent or independent contractor if the fiduciary has not specifically directed the nonemployee agent or independent contractor to perform the grossly negligent act or engage in the intentional misconduct.

2. The appointment of the fiduciary is for the purpose of avoiding liability under this article. It is prima facie evidence that the fiduciary was appointed to avoid liability under this article if the facility is the only substantial asset in the fiduciary estate.

J. Subsections F, G, H and I shall not be construed to of this section do not affect the liability of any person who is otherwise liable with respect to the release or threat of release pursuant to this section.

K. The director may adopt rules to implement subsections H and I of this section.

L. A fiduciary may not be a fiduciary and grantor of the same fiduciary estate.

M. A unit of state or local government is not liable for purposes of this section if that unit is not liable under section 101(35)(A)(ii) or section 101(20)(D) of CERCLA.

N. Nonmanagerial employees acting within the course and scope of their employment are not liable under this article.

O. The owner of a qualifying property shall provide written notice to:

1. Any prospective buyer of the qualifying property if the potential liability under this article that is associated with the qualifying property could be transferred to that buyer. Notice required pursuant to this paragraph shall occur before the qualifying property is conveyed.

2. The director:

(a) When the qualifying property owner lists or offers the qualifying property or any portion of the qualifying property for sale.

(b) When the qualifying property comes under contract for sale. A notice pursuant to this subdivision shall include the name of any buyers and the anticipated closing date. the department may not disclose the name of any buyer without the buyer's consent until the purchase is COMPLETE.

3. the state mine inspector if the site is a mine or abandoned mine as defined in section 27-301:

(a) when the qualifying PROPERTY owner lists or offers the qualifying property or any portion of THE qualifying PROPERTY for sale.

(b) when the QUALIFYING PROPERTY becomes subject to a contract for sale. A notice PROVIDED pursuant to this SUBDIVISION shall include the name of any buyers and the ANTICIPATED closing date. The mine inspector may not disclose the name of any buyer without the buyer's consent until the purchase is COMPLETE.

O. p. For the purposes of this section:

1. "Fiduciary" means:

(a) A trust company or bank certified or authorized to engage in the trust business pursuant to title 6, chapter 8, article 1.

(b) Any person appointed by a court or testamentary act to act as personal representative, executor, trustee, administrator, guardian, conservator, receiver or trustee in bankruptcy.

(d) Any person acting as a trustee pursuant to title 14, chapter 7.

(e) Any person acting pursuant to and subject to fiduciary obligations under the employee retirement income security act of 1974 (29 United States Code sections 1101 through 1114).

2. "Indicia of ownership" means legal or equitable title that has been acquired through or is incident to the default of a borrower.

3. "Qualifying property" means all of the following:

(a) A site on the registry ESTABLISHED PURSUANT TO SECTION 49-287.01.

(b) A site not on the registry ESTABLISHED PURSUANT TO SECTION 49-287.01 IF the department has authorized using monies in the water quality assurance revolving fund to respond to the release of a hazardOUS substance and the response is ongoing.

(c) A site not on the registry ESTABLISHED PURSUANT TO SECTION 49-287.01 IF the department has identified the release or threat of release of a hazardOUS substance and engages in regulatory action that results in a written notice of violation or written enforcement action in response to the release or threat of release of a hazardous substance and the enforcement action is ongoing. END_STATUTE