2007 California Health and Safety Code Article 8.5. Cleanup Loans And Environmental Assistance To Neighborhoods

CA Codes (hsc: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 (,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 (0,000).
   (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 resume of the coordinator that demonstrates that the
coordinator possesses the requisite qualifications to manage the
response action at the site.
   (3) Documentation that the property is an eligible property and,
if the department has implemented the priority scoring system set
forth in Section 25395.23, sufficient information to enable the
department to determine the priority score for the property.
   (4) Documentation that the planned future development of the site
is consistent with the current and reasonably foreseeable future land
uses of the property.
   (5) If the owner of the eligible 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 agrees to use
the property as a security interest for the loan to finance necessary
response action at 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 in concert 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 in concert with a local
government entity pursuant to an enforceable agreement, has legal
access to perform any action necessary to respond to the release or
threatened release of hazardous material at an eligible property, or
will have legal access, prior to receiving loan funds.
   (6) Any other information the department deems necessary.



25395.23.  (a) The department, after consultation with the
secretary, the Secretary of Business, Transportation and Housing, and
the Director of the Office of Planning and Research, may approve
loan applications submitted pursuant to Section 25395.22.  The
department may approve a loan only for those response actions
necessary to address a release or threatened release of a hazardous
material at an eligible property.
   (b) If the department determines, based on estimates of the number
of loan requests that will be submitted in any fiscal year and the
amount of loan funds that will be available during that fiscal year,
that sufficient funding to meet the demand for loans will not be
available, the department shall establish a system for ranking loan
applications based on priority scores.  Priority scores shall be
calculated for each loan application by scoring the project that is
the subject of the loan application using scales that measure the
factors listed in subdivision (c).  The department shall approve
loans for a project based on its priority scores.
   (c) The system for ranking loan applications pursuant to
subdivision (b) shall establish priority scores for projects that are
the subjects of the loan applications using scales that measure all
of the following factors:
   (1) The degree of community support expressed for the project,
including, but not limited to, letters of support from local
governmental entities, state or local elected officials, community
leaders, and the general public.
   (2) Financial support for the project provided at the local level,
including grants or other subsidies, and funding provided by the
issuance of bonds pursuant to the Mello-Roos Community Facilities Act
of 1982 (Chapter 2.5 (commencing with Section 53311) of Division 2
of Part 1 of Title 5 of the Government Code) or financing under the
Community Redevelopment Law (Part 1 (commencing with Section 33000)
of Division 24).
   (3) The potential for the project to provide additional protection
of the public health and safety.
   (4) The potential for the project to enhance strategic community
development, including, but not limited to, all of the following:
   (A) The creation of new jobs.
   (B) Generation of additional tax revenue.
   (C) The likelihood that the project will stimulate additional
redevelopment in adjacent areas.
   (D) The degree to which implementation of the project will improve
local property values.
   (E) The degree to which implementation of the project will result
in the development of new parks.
   (F) The extent to which the project may have a beneficial effect
on the construction of new schools.
   (G) The extent to which the project will result in the
construction of affordable inner-city housing.
   (H) The potential for the project to have a beneficial impact on
existing local and regional infrastructure or projected
infrastructure needs, or otherwise promote infill development.
   (5) The economic viability of the project, including, but not
limited to, an analysis of the current value of the property as
compared to its projected value after all necessary response actions
have been completed.
   (6) The ability of the loan applicant to successfully perform the
response action at the site and repay the loan if funding is
provided.
   (7) The geographic location of the project, taking into
consideration the number and amounts of loans approved for projects
located in that area, as compared to those approved for other needy
areas throughout the state.
   (8) The degree of likelihood that the response action would not be
completed if a loan pursuant to Section 25395.22 is not made,
including whether any necessary response action is already being paid
for by a responsible party pursuant to an administrative order, an
agreement issued or entered into with a federal, state, or local
agency, a judicial order, or a consent decree.
   (9) The ability to obtain conventional financing absent a loan
under this program.



25395.24.  (a) The department may approve all, or part of, a loan
request pursuant to Section 25395.23, except the maximum amount of a
loan approved pursuant to Section 25395.23 shall not exceed two
million five hundred thousand dollars (,500,000).
   (b) The department shall not approve a loan pursuant to Section
25395.23 if the total debt against the eligible property subject to
the release or threatened release of a hazardous material on which
the response action will be taken exceeds 80 percent of the estimated
value of the property after all necessary response actions are
complete.



25395.25.  Upon the approval of a loan pursuant to Section 25395.23,
the loan recipient shall do all of the following:
   (a) Enter into an agreement with the department to repay the loan
over a period of not more than seven years.  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.
   (1) The agreement shall include those terms and conditions that
the department deems appropriate.
   (2) (A) The agreement 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 response
action pursuant to the agreement, the loan recipient shall use the
recovered money, except for reasonable costs and the fees incurred to
recover that money, first to satisfy the loan.
   (B) Notwithstanding subparagraph (A), 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.
   (b) (1) Enter into an agreement with the department or with the
regional board or state board pursuant to Section 25395.28 for the
oversight and approval of the response action at the site.  This
agreement shall include any necessary conditions and assurances to
ensure that post-completion, ongoing operation and maintenance
activities, and any necessary institutional controls on future uses
of the property, are complied with.  This agreement shall be provided
to the department before the department may release any loan funds
to the loan recipient.
   (2) 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 costs pursuant to this
article or the regional board's or state board's costs pursuant to
Section 25395.28 associated with the oversight of the response action
at the site subject to the agreement, if the department determines
there are sufficient funds in the account to reimburse the department'
s costs pursuant to this article or the regional board's or state
board's costs pursuant to Section 25395.28 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
response action at the site subject to the agreement, the loan
recipient shall pay the department's costs pursuant to this article
or the regional board's or state board's costs pursuant to Section
25395.28 for the amount of those costs.
   (c) (1) Except as provided in paragraph (2), obtain secured
creditor insurance, as defined in subdivision (k) of Section
25395.40, from the insurance company selected by the secretary
pursuant to subdivision (b) of Section 25395.41, or comparable
insurance from any insurance company with an A.M. Best Financial
Strength Rating of A+ or better and an A.M. Best Financial Size
Category of FSCX or larger that is authorized to offer environmental
insurance in California.  This insurance shall be obtained before the
department may release any loan funds to the loan recipient.
   (2) The secretary may waive the requirement of paragraph (1) to
obtain insurance or any specific insurance coverage if either of the
following apply:
   (A) No money is available for the environmental insurance
subsidies authorized pursuant to Section 25395.42.
   (B) The secretary determines that the scope of the response action
is limited and the cost of the premiums of the prenegotiated package
of environmental insurance products equals or exceeds the estimated
response action costs, or is otherwise not commercially feasible.



25395.26.  (a) A loan approved pursuant to Section 25395.23 shall be
secured by the property subject to the release or threatened release
of the hazardous material on which the response action will be taken
or by another form of security that the department determines will
adequately protect the state's interest.  The department shall obtain
an appropriate security interest in the property  or other
alternative form of security approved by the department.  The
department may foreclose on property, or the alternative form of
security approved by the department, that is subject to a security
interest pursuant to this section.  Any funds received through a
foreclosure or through the enforcement of any other security interest
pursuant to this article shall be deposited in the account.
   (b) The state, the secretary, the department, and the account are
not liable under any state or local statute, regulation, or ordinance
because the department holds the security interest identified in
subdivision (a) or because the department acquired property through
foreclosure or its equivalent in satisfaction of a loan issued
pursuant to this article.
   (c) Chapter 6.96 (commencing with Section 25548) does not apply to
the state, the secretary, the department, the agency, or the account
with regard to a loan secured pursuant to subdivision (a).
   (d) (1) Notwithstanding any other provision of law, no approval or
review shall be required from the Department of General Services to
obtain any security interest or exercise any rights, including, but
not limited to, foreclosure, under any security interest or other
agreement made pursuant to this article.
   (2) The acquisition of a property pursuant to this article through
foreclosure or its equivalent is not subject to Article 2
(commencing with Section 14660) of Chapter 2 of Part 5.5 of Division
3 of Title 2 of the Government Code.
   (3) The department shall promptly dispose of any property acquired
through the exercise of any security interest pursuant to this
article at the property's current market value and the disposal of
this property is exempt from Section 11011.1 of the Government Code
and Article 8 (commencing with Section 54220) of Chapter 5 of Part 1
of Division 2 of Title 5 of the Government Code.
   (e) This article shall not be construed to limit, extend, or
affect local land use and zoning authority.




25395.27.  (a) (1) Except as provided in subdivisions (a) and (b) of
Section 25395.28, any response action carried out under this article
shall be conducted in accordance with the requirements of this
chapter and Chapter 6.65 (commencing with Section 25260).  However,
for purposes of Section 25262, the administering agency for any site
that is the subject of a loan under this article shall either be the
department pursuant to this article, or a regional board, the state
board, or a local oversight program agency under contract with the
state board pursuant to Section 25395.28, and a person shall not
request that a different agency be designated as an administering
agency for the site under Chapter 6.65 (commencing with Section
25260).
   (2) For purposes of this section, the Site Designation Committee
created by Section 25261 is not required to meet and formally
designate the department, a regional board, the state board, or a
local oversight program agency under contract with the state board,
as specified in Section 25395.28, as the administering agency
pursuant to Section 25262 for a site that is the subject of a loan
under this article.  Upon the approval of a loan under Section
25395.23, the department shall notify the Site Designation Committee
of the administering agency for the site.
   (b) For sites that are the subject of a loan under this article,
all references in this chapter to a hazardous substance shall be
deemed to be a reference to a hazardous material.
   (c) Except as provided in subdivisions (a) and (b) of Section
25395.28, this chapter shall apply to a site that is the subject of a
loan under this article, regardless of whether the site is on the
list created pursuant to Section 25356.
   (d) Except as provided in Section 25264, this article shall not be
construed to limit the authority of the department, the regional
board, or the state board to take any action otherwise authorized
under any other provision of law.
   (e) The department shall post, and update at least monthly, a list
of loan applications received pursuant to this article on the
department's Internet website.  The list shall include the name of
the applicant, the location of the property that is the subject of
the loan application, the administering agency, and a contact at the
department for further information.  The department shall also
annually post on that website a summary of the response action status
for each site with a loan approved under Section 25395.23.



25395.28.  (a) (1) Except as provided in paragraph (2) and
subdivision (b), upon the request of a regional board or the state
board, the administering agency for any site that is the subject of a
loan approved under Section 25395.23 shall be a regional board, the
state board, or a local oversight program agency under contract with
the state board in accordance with Chapter 6.7 (commencing with
Section 25280) and Chapter 6.75 (commencing with Section 25299.10),
if the property is subject to a release from a leaking underground
fuel tank and the release from the leaking underground fuel tank is
the principal threat at that property, as determined by the regional
board, the state board, and the department.
   (2) If the site specified in paragraph (1) was not subject to
oversight by a local oversight program agency prior to the date the
loan application was submitted to the department pursuant to Section
25395.22, the regional board shall serve as the administering agency.

   (3) Any response action for a property subject to this subdivision
for a leaking underground fuel tank shall be carried out under
Chapter 6.65 (commencing with Section 25260), Chapter 6.7 (commencing
with Section 25280), and Chapter 6.75 (commencing with Section
25299.10).
   (b) (1) Upon the request of a regional board, the regional board
shall be the administering agency for a property specified in
subdivision (a), if the site is subject to one or more of the
following orders or agreements under Division 7 (commencing with
Section 13000) of the Water Code prior to the date the loan
application was submitted to the department pursuant to Section
25395.22:
   (A) A cleanup and abatement order.
   (B) Other cleanup order issued by a regional board.
   (C) A written voluntary agreement with a regional board.
   (2) Any response action for a site subject to this subdivision
shall be carried out pursuant to Chapter 6.65 (commencing with
Section 25260).
   (c) Notwithstanding subdivisions (a) and (b), the regional board
and the state board, in consultation with the department, may request
the department to be the administering agency for a property subject
to this section.
   (d) Notwithstanding subdivision (b), if a regional board has
issued a cleanup order or entered into a written voluntary agreement
under Division 7 (commencing with Section 13000) of the Water Code
for a site and the department has issued an order or entered into an
enforceable agreement under Chapter 6.5 (commencing with Section
25100) or Chapter 6.8 (commencing with Section 25300), the regional
board and the department shall consult and determine which agency
shall be the administering agency for the site under this article.
   (e) The department shall provide a written notice of the receipt
of a loan application under Section 25395.22, including the name and
address of the loan applicant and the location of the property, to
both of the following:
   (1) A regional board for any property within that regional board's
jurisdiction.
   (2) The state board for any property that contains a leaking
underground fuel tank.
   (f) The regional board or state board shall respond with a written
notice to the department within 20 working days after receipt of the
notice or information provided pursuant to subdivision (e)
indicating whether the regional board or a local oversight program
agency under contract with the state board will oversee the response
action pursuant to this section.  If the regional board or state
board does not provide this notice within that time period, the
regional board or state board shall be deemed to have elected not to
oversee the response action.
   (g) (1) If a regional board or a local oversight program agency
under contract with the state board oversees a response action
pursuant to this section, the department shall reimburse the regional
board or state board from the account for oversight costs, if all of
the following occur:
   (A) The department determines, pursuant to paragraph (2) of
subdivision (b) of Section 25395.25, that there are sufficient funds
in the account.
   (B) The department receives the report required upon completion of
the response action under subdivision (i).
   (C) The regional board or a local oversight program agency under
contract with the state board, as appropriate, certifies that it is
not eligible to be reimbursed for oversight costs from any other fund
or account, including, but not limited to, the Underground Storage
Tank Cleanup Fund pursuant to Chapter 6.75 (commencing with Section
25299.10).
   (2) If the department determines pursuant to paragraph (2) of
subdivision (b) of Section 25395.25 that the account has insufficient
funds, the regional board or state board shall recover its oversight
costs from the loan recipient, and the department shall not be
liable for these oversight costs.
   (h) If a regional board or a local oversight program agency under
contract with the state board oversees a response action pursuant to
this section, the recipient of a loan approved pursuant to Section
25395.23 shall enter into an agreement with the regional board or the
state board under paragraph (1) of subdivision (b) of Section
25395.25 for the oversight and approval of the response action at the
site, prior to the release of loan funds by the department.  The
agreement shall meet the requirements specified in the regulations
adopted pursuant to Section 25395.29.
   (i) If the regional board or a local oversight program agency
under contract with the state board serves as the administering
agency pursuant to this section, the regional board or the state
board shall do both of the following:
   (1) Annually provide information to the department about the
status of the response action, including any response action decision
document that includes limitations on land use or other
institutional controls.
   (2) Notify the department upon completion of the response action.

   (j) This section does not apply to any site subject to Chapter 1
(commencing with Section 17210) of Part 10.5 of Division 1 of Title 1
of the Education Code.



25395.29.  (a) The department may adopt regulations to implement
this article as emergency regulations.  The Office of Administrative
Law shall consider those regulations to be necessary for the
immediate preservation of the public peace, health and safety, and
general welfare for purposes of Section 11349.6 of the Government
Code.  Notwithstanding the 120-day limitation in subdivision (e) of
Section 11346.1 of the Government Code, the emergency regulations
adopted or amended pursuant to this  subdivision shall be repealed
180 days after the effective date of the regulations, unless the
secretary or the department readopts those regulations, in whole or
in part, in compliance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
   (b) The department may adopt emergency regulations to implement
the changes made by the act of the 2001-02 Regular Session of the
Legislature that amends this section.  Notwithstanding the 120-day
limitation specified in subdivision (e) of Section 11346.1 of the
Government Code, the emergency regulations adopted or amended
pursuant to this subdivision shall be repealed 180 days after the
effective date of the regulations, unless the secretary or the
department readopts those regulations, in whole or in part, in
compliance with Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code.  The Office of
Administrative Law shall consider the regulations adopted pursuant to
this subdivision, to be necessary for the immediate preservation of
the public peace, health and safety, and general welfare for purposes
of Section 11349.6 of the Government Code.



25395.30.  The following persons are not eligible to apply for a
loan under this article:
   (a) A person who has been convicted of a felony or misdemeanor
involving the regulation of hazardous materials, including, but not
limited to, a conviction of a felony or misdemeanor under Section
25395.13.
   (b) A person who has been convicted of a felony or misdemeanor
involving moral turpitude, including, but not limited to, the crimes
of fraud, bribery, the falsification of records, perjury, forgery,
conspiracy, profiteering, or money laundering.
   (c) A person who is in violation of an administrative order or
agreement issued by or entered into with any federal, state, or local
agency that requires response action at a site or a judicial order
or consent decree that requires response action at a site.
   (d) A person who knowingly made a false statement regarding a
material fact or knowingly failed to disclose a material fact in
connection with an application submitted to the secretary under this
article.


25395.31.  The rate of interest to be applied to loans made pursuant
to this article shall be the same rate earned on investments in the
Surplus Money Investment Fund during the loan repayment period. If a
loan recipient defaults on a loan, the rate of interest to be applied
to the loan shall be 10 percent from the date of default, or
whatever greater rate is reflected in the agreement entered into
pursuant to subdivision (a) of Section 25395.25.



25395.32.  On or before January 10 of each year when a loan under
this article is made or repaid during the previous fiscal year, the
secretary shall report to the Joint Legislative Budget Committee and
to the chairs of the appropriate policy committees of the Senate and
the Assembly, and shall post on the Internet web site of the agency,
all of the following:
   (a) The number and dollar amount of loans approved pursuant to
Section 25395.21, the number and dollar amount of those loans that
have been repaid, and, the number and dollar amount of those loans
that are in default.
   (b) The number and dollar amount of loans waived pursuant to
subdivision (f) of Section 25395.21.
   (c) The number and dollar amount of loans approved pursuant to
Section 25395.23, the number and dollar amount of those loans that
have been repaid, and the number and dollar amount of those loans
that are in default.
   (d) The number of preliminary endangerment assessments completed
pursuant to agreements entered into under this article.
   (e) The number of sites where necessary response actions have been
completed pursuant to agreements entered into under this article.