HB-6359, As Passed House, November 10, 2010

SUBSTITUTE FOR

HOUSE BILL NO. 6359

A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending sections 20126 and 20126a (MCL 324.20126 and

324.20126a), section 20126 as amended by 1999 PA 196 and section

20126a as added by 1995 PA 71, and by adding section 20114e.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 20114e. (1) The director shall establish a response

activity review panel to advise him or her on technical or

scientific disputes, including disputes regarding assessment of

risk, concerning response activity plans and no further action

reports.

(2) The panel shall consist of 15 individuals, appointed by

the director. Each member of the panel shall meet all of the

following minimum requirements:

(a) Meet 1 or more of the following:

(i) Hold a current professional engineer's or professional

geologist's license or registration from a state, tribe, or United

States territory, or the Commonwealth of Puerto Rico, and have the

equivalent of 6 years of full-time relevant experience.

(ii) Have a baccalaureate degree from an accredited institution

of higher education in a discipline of engineering or science and

the equivalent of 10 years of full-time relevant experience.

(iii) Have a master's degree from an accredited institution of

higher education in a discipline of engineering or science and the

equivalent of 8 years of full-time relevant experience.

(b) Remain current in his or her field through participation

in continuing education or other activities.

(3) An individual is not eligible to be a member of the panel

if any 1 of the following is true:

(a) The individual is a current employee of any office,

department, or agency of the state.

(b) The individual is a party to 1 or more contracts with the

department and the compensation paid under those contracts

represented more than 5% of the individual's annual gross revenue

in any of the preceding 3 years.

1 or more contracts with the department and the compensation paid

to the individual's employer under these contracts represented more

than 5% of the employer's annual gross revenue in any of the

preceding 3 years.

(d) The individual was employed by the department within the

preceding 3 years.

(4) An individual appointed to the panel shall serve for a

term of 3 years and may be reappointed for 1 additional 3-year

term. After serving 2 consecutive terms, the individual may not be

a member of the panel for a period of at least 2 years before being

eligible to be appointed to the panel again. The terms for members

first appointed shall be staggered so that not more than 5

vacancies are scheduled to occur in a single year. Individuals

appointed to the panel shall serve without compensation. However,

members of the panel may be reimbursed for their actual and

necessary expenses incurred in the performance of their official

duties as members of the panel.

(5) A vacancy on the panel shall be filled in the same manner

as the original appointment.

(6) The business that the panel may perform shall be conducted

at a public meeting of the panel held in compliance with the open

meetings act, 1976 PA 267, MCL 15.261 to 15.275.

(7) A person who submitted a response activity plan or a no

further action report may appeal a decision made by the department

regarding a technical or scientific dispute, including a dispute

regarding assessment of risk, concerning the response activity plan

or no further action report by submitting a petition to the

director. The petition shall include the issues in dispute, the

relevant facts upon which the dispute is based, factual data,

analysis, opinion, and supporting documentation for the

petitioner's position. The petitioner shall also submit a fee of

$3,500.00. If the director believes that the dispute may be able to

be resolved without convening the panel, the director may contact

the petitioner regarding the issues in dispute and may negotiate a

resolution of the dispute. This negotiation period shall not exceed

45 days. If the dispute is resolved without convening the panel,

any fee that is submitted with the petition shall be returned.

(8) If a dispute is not resolved pursuant to subsection (7),

the director shall schedule a meeting of 5 members of the panel,

selected on the basis of their relevant expertise, within 45 days

after receiving the original petition. A member selected for the

dispute resolution process shall agree not to accept employment by

the person bringing the dispute before the panel, or to undertake

any employment concerning the facility in question for a period of

1 year after the decision has been rendered on the matter if that

employment would represent more than 5% of the member's gross

revenue in any of the preceding 3 years. The director shall provide

a copy of all supporting documentation to members of the panel who

will hear the dispute. An alternative member may be selected by the

director to replace a member who is unable to participate in the

dispute resolution process. Any action by the members selected to

hear the dispute shall require a majority of the votes cast. The

members selected for the dispute resolution process shall elect a

chairperson of the dispute resolution process. At a meeting

scheduled to hear the dispute, representatives of the petitioner

and the department shall each be afforded an opportunity to present

their positions to the panel. The fee that is received by the

director along with the petition shall be forwarded to the state

treasurer for deposit into the fund.

(9) Within 45 days after hearing the dispute, the members of

the panel who were selected for and participated in the dispute

resolution process shall make a recommendation regarding the

petition and provide written notice of the recommendation to the

director of the department and the petitioner. The written

recommendation shall include the specific scientific or technical

rationale for the recommendation. The panel's recommendation

regarding the petition may be to adopt, modify, or reverse, in

whole or in part, the department's decision that is the subject of

the petition. If the panel does not make its recommendation within

this 45-day time period, the decision of the department is the

final decision of the director.

(10) Within 60 days after receiving written notice of the

panel's recommendation, the director shall issue a final decision,

in writing, regarding the petition. However, this time period may

be extended by written agreement between the director and the

petitioner. If the director agrees with the recommendation of the

panel, the department shall incorporate the recommendation into its

response to the response activity plan or the no further action

report. If the director rejects the recommendation of the panel,

the director shall issue a written decision to the petitioner with

a specific rationale for rejecting the recommendation of the panel.

If the director fails to issue a final decision within the time

period provided for in this subsection, the recommendation of the

panel shall be considered the final decision of the director. The

final decision of the director under this subsection is subject to

review pursuant to section 631 of the revised judicature act of

1961, 1961 PA 236, MCL 600.631.

(11) Upon request of the director, the panel shall make a

recommendation to the department on whether a member should be

removed from the panel. Prior to making this recommendation, the

panel may convene a peer review panel to evaluate the conduct of

the member with regard to compliance with this part.

(12) A member of the panel shall not participate in the

dispute resolution process for any appeal in which that member has

a conflict of interest. The director shall select a member of the

panel to replace a member who has a conflict of interest under this

subsection. For purposes of this subsection, a member has a

conflict of interest if a petitioner has hired that member or the

member's employer on any environmental matter within the preceding

3 years.

(13) As used in this section, "relevant experience" means

active participation in the preparation, design, implementation,

and assessment of remedial investigations, feasibility studies,

interim response activities, and remedial actions under this part.

This experience must demonstrate the exercise of sound professional

judgment and knowledge of the requirements of this part.

Sec. 20126. (1) Notwithstanding any other provision or rule of

law and except as provided in subsections (2), (3), (4), and (5)

and section 20128, the following persons are liable under this

part:

(a) The owner or operator of a facility if the owner or

operator is responsible for an activity causing a release or threat

of release.

(b) The owner or operator of a facility at the time of

disposal of a hazardous substance if the owner or operator is

responsible for an activity causing a release or threat of release.

operator on or after June 5, 1995, unless the owner or operator

complies with both of the following:

(i) A baseline environmental assessment is conducted prior to

or within 45 days after the earlier of the date of purchase,

occupancy, or foreclosure. For purposes of this section, assessing

property to conduct a baseline environmental assessment does not

constitute occupancy.

(ii) The owner or operator ~~discloses the results of~~ provides a

baseline environmental assessment to the department and subsequent

purchaser or transferee ~~if the baseline environmental assessment~~

~~confirms that the property is a facility.~~ within 6 months after the

earlier of the date of purchase, occupancy, or foreclosure.

(d) A person who by contract, agreement, or otherwise arranged

for disposal or treatment, or arranged with a transporter for

transport for disposal or treatment, of a hazardous substance owned

or possessed by the person, by any other person, at a facility

owned or operated by another person and containing the hazardous

substance. This subdivision does not include any of the following:

(i) A person who, on or after June 5, 1995, arranges for the

sale or transport of a secondary material for use in producing a

new product. As used in this subparagraph, secondary material means

scrap metal, paper, plastic, glass, textiles, or rubber, which has

demonstrated reuse or recycling potential and has been separated or

removed from the solid waste stream for reuse or recycling, whether

or not subsequent separation and processing is required, if

substantial amounts of the material are consistently used in the

manufacture of products which may otherwise be produced from a raw

or virgin material.

(ii) A person who, prior to June 5, 1995, arranges for the sale

or transport of a secondary material for use in producing a new

product unless the state has incurred response activity costs

associated with these secondary materials prior to ~~the effective~~

~~date of the 1999 amendments to this section~~ December 17, 1999. As

used in this subparagraph, secondary material means scrap metal,

paper, plastic, glass, textiles, or rubber, which has demonstrated

reuse or recycling potential and has been separated or removed from

the solid waste stream for reuse or recycling, whether or not

subsequent separation and processing is required, if substantial

amounts of the material are consistently used in the manufacture of

products which may otherwise be produced from a raw or virgin

material.

(iii) A person who arranges the lawful transport or disposal of

any product or container commonly used in a residential household,

which is in a quantity commonly used in a residential household,

and which was used in the person's residential household.

(e) A person who accepts or accepted any hazardous substance

for transport to a facility selected by that person.

(f) The estate or trust of a person described in subdivisions

(a) to (e).

(2) Subject to section 20107a, an owner or operator who

complies with subsection (1)(c) is not liable for contamination

existing at the facility at the earlier of the date of purchase,

occupancy, or foreclosure, unless the person is responsible for an

activity causing the contamination existing at the facility.

Subsection (1)(c) does not alter a person's liability with regard

to a subsequent release or threat of release at a facility if the

person is responsible for an activity causing the subsequent

release or threat of release.

(3) Notwithstanding subsection (1), the following persons are

not liable under this part with respect to contamination at a

facility resulting from a release or threat of release unless the

person is responsible for an activity causing a that release ~~at the~~

~~facility~~ or threat of release:

(a) The state or a local unit of government that acquired

ownership or control of a facility involuntarily through

bankruptcy, tax delinquency, abandonment, a transfer from a lender

pursuant to subsection (7), or other circumstances in which the

government involuntarily acquires title or control by virtue of its

governmental function or as provided in this part, a local unit of

government to which ownership or control of a facility is

transferred by the state or by another local unit of government

that is not liable under subsection (1), or the state or a local

unit of government that acquired ownership or control of a facility

by seizure, receivership, or forfeiture pursuant to the operation

of law or by court order.

(b) A state or local unit of government that holds or acquires

an easement interest in a facility, holds or acquires an interest

in a facility by dedication in a plat, or by dedication pursuant to

1909 PA 283, MCL 220.1 to 239.6, or otherwise holds or acquires an

interest in a facility for a transportation or utility corridor,

including sewers, pipes, and pipelines, or public right of way.

holds a utility franchise to provide service, for the purpose of

conveying or providing goods or services, including, but not

limited to, utilities, sewers, roads, railways, and pipelines; or a

person that acquires access through an easement.

(d) A person who owns severed subsurface mineral rights or

severed subsurface formations or who leases subsurface mineral

rights or formations.

(e) The state or a local unit of government that leases

property to a person if the state or the local unit of government

is not liable under this part for environmental contamination at

the property.

(f) A person who owns or occupies residential real property if

hazardous substance use at the property is consistent with

residential use.

(g) A person who acquires a facility as a result of the death

of the prior owner or operator of the facility, whether by

inheritance, devise, or transfer from an inter vivos or

testamentary trust.

(h) A person who did not know and had no reason to know that

the property was a facility. To establish that the person did not

know and did not have a reason to know that the property was a

House Bill No. 6359 (H-1) as amended November 10, 2010

facility, the person shall have undertaken at the time of

acquisition all appropriate inquiry into the previous ownership and

uses of the property consistent with good commercial or customary

practice. A determination of liability under this section shall

take into account any specialized knowledge or experience on the

part of the person, the relationship of the purchase price to the

value of the property if uncontaminated by a hazardous substance,

commonly known or reasonable ascertainable information about the

property, the obviousness of the presence or likely presence of a

release or threat of release at the property, and the ability to

detect a release or threat of release by appropriate inspection.

(i) A utility performing normal construction, maintenance, and

repair activities in the normal course of its utility service

business. This subsection does not apply to property owned by the

utility.

(j) A lessee who uses the leased property for a retail,

office, or commercial purpose regardless of the level of the

lessee's hazardous substance use.

[(k) A person who holds a license, easement, or lease, or who otherwise occupies or operates property, for the purpose of siting, constructing, operating, or removing a wind energy conversion system or any component of a wind energy conversion system. As used in this subdivision, "wind energy conversion system" means that term as defined in section 13 of the clean, renewable, and efficient energy act, 2008 PA 295, MCL 460.1013.]

(4) Notwithstanding subsection (1), the following persons are

not liable under this part:

(a) The owner or operator of a hazardous waste treatment,

storage, or disposal facility regulated pursuant to part 111 from

which there is a release or threat of release solely from the

treatment, storage, or disposal facility, or a waste management

unit at the facility and the release or threat of release is

subject to corrective action under part 111.

(b) A lender that engages in or conducts a lawful marshalling

or liquidation of personal property if the lender does not cause or

contribute to the environmental contamination. This includes

holding a sale of personal property on a portion of the facility.

has migrated unless that person is responsible for an activity

causing the release that is the source of the contamination.

(d) A person who owns or operates a facility in which the

release or threat of release was caused solely by 1 or more of the

following:

(i) An act of God.

(ii) An act of war.

(iii) An act or omission of a third party other than an employee

or agent of the person or a person in a contractual relationship

existing either directly or indirectly with a person who is liable

under this section.

(e) Any person for environmental contamination addressed in a

no further action report that is approved by the department or is

considered approved under section 20114d. Notwithstanding this

subdivision, a person may be liable under this part for the

following:

(i) A subsequent release not addressed in the no further action

report if the person is otherwise liable under this part for that

release.

(ii) Environmental contamination that is not addressed in the

no further action report and for which the person is otherwise

liable under this part.

(iii) If the no further action report relies on land use or

resource use restrictions, an owner or operator who desires to

change those restrictions is responsible for any response

activities necessary to comply with this part for any land use or

resource use other than the land use or resource use that was the

basis for the no further action report.

(iv) If the no further action report relies on monitoring

necessary to assure the effectiveness and integrity of the remedial

action, an owner or operator who is otherwise liable for

environmental contamination addressed in a no further action report

is liable under this part for additional response activities

necessary to address any potential exposure to the environmental

contamination demonstrated by the monitoring in excess of the

levels relied on in the no further action report.

(v) If the remedial actions that were the basis for the no

further action report fail to meet performance objectives that are

identified in the no further action report, an owner or operator

who is otherwise liable for environmental contamination addressed

in the no further action report is liable under this part for

response activities necessary to satisfy the performance objectives

or otherwise comply with this part.

(5) Notwithstanding any other provision of this part, the

state or a local unit of government or a lender who has not

participated in the management of the facility is not liable under

this part for costs or damages as a result of response activity

taken in response to a release or threat of release. For a lender,

this subsection applies only to response activity undertaken prior

to foreclosure. This subsection does not preclude liability for

costs or damages as a result of gross negligence, including

reckless, willful, or wanton misconduct, or intentional misconduct

by the state or local unit of government.

(6) In establishing liability under this section, the

department bears the burden of proof. ~~If the department proves a~~

~~prima facie case against a person, the person shall bear the burden~~

~~of showing by a preponderance of the evidence that he or she is not~~

~~liable under this section.~~

~~(7) A lender that is not responsible for an activity causing a~~

~~release at a facility and that establishes that it has met the~~

~~requirements of subsection (1)(c) with respect to that facility may~~

~~immediately transfer to the state the property on which there has~~

~~been a release or a threat of a release if the lender complies with~~

~~all of the following:~~

~~(a) Within 9 months following foreclosure and for a period of~~

~~at least 120 days, the lender either lists the facility with a~~

~~broker, dealer, or agent who deals with the type of property in~~

~~question, or advertises the facility as being for sale or~~

~~disposition on at least a monthly basis in either a real estate~~

~~publication, a trade or other publication suitable for the facility~~

~~in question, or a newspaper of general circulation of over 10,000~~

~~covering the area where the property is located.~~

~~(b) The lender has taken reasonable care in maintaining and~~

~~preserving the real estate and permanent fixtures.~~

~~(c) The lender provides to the department all environmental~~

~~information related to the facility that is available to the~~

~~lender.~~

~~(d) If the department has issued an order pursuant to section~~

~~20119, the lender has complied with the order to the department's~~

~~satisfaction.~~

~~(e) If conditions on the property pose a threat of fire or~~

~~explosion or present an imminent hazard through direct contact with~~

~~hazardous substances, the lender has undertaken appropriate~~

~~response activities to abate the threat or hazard.~~

(7) ~~(8) The department shall establish minimum technical~~

~~standards for baseline environmental assessments conducted under~~

~~this section in guidelines pursuant to the administrative~~

~~procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.~~

Beginning on the effective date of the 2010 amendatory act that

amended this section, the department shall not implement or enforce

R 299.5901 to R 299.5919 of the Michigan administrative code,

except the department may implement and enforce the following

rules:

(a) Subrules (2), (6), (8), and (9) of rule 903, R 299.5903 of

the Michigan administrative code.

(b) Subrules (2) through (6) of rule 905, R 299.5905 of the

Michigan administrative code.

(8) ~~(9)~~ Notwithstanding subsection (1)(c), if the owner or

operator of the facility became the owner or operator of the

facility on or after June 5, 1995 and prior to March 6, 1996, and

the facility contains an underground storage tank system as defined

in part 213, that owner or operator is liable under this part only

if the owner or operator is responsible for an activity causing a

release or threat of release.

(9) An owner or operator who was in compliance with subsection

(1)(c) prior to the effective date of the amendatory act that added

this subsection, is considered to be in compliance with subsection

(1)(c).

Sec. 20126a. (1) Except as provided in section 20126(2), a

person who is liable under section 20126 is jointly and severally

liable for all of the following:

(a) All costs of response activity lawfully incurred by the

state relating to the selection and implementation of response

activity under this part.

(b) Any other ~~necessary~~ costs of response activity reasonably

incurred under the circumstances by any other person. ~~consistent~~

~~with rules relating to the selection and implementation of response~~

~~activity promulgated under this part.~~

or loss of natural resources, including the reasonable costs of

assessing the injury, destruction, or loss resulting from the

release.

(2) The costs of response activity recoverable under

subsection (1) shall also include all ~~of the following:~~

~~(a) All~~ costs of response activity reasonably incurred by the

state prior to the promulgation of rules relating to the selection

and implementation of response activity under this part, excepting

those cases where cost recovery actions have been filed before July

12, 1990. A person challenging the recovery of costs under this

subdivision has the burden of establishing that the costs were not

reasonably incurred under the circumstances that existed at the

time the costs were incurred. ~~Recoverable costs include costs~~

~~incurred reasonably consistent with the rules relating to the~~

~~selection and implementation of response activity in effect on July~~

~~12, 1990.~~

~~(b) Any other necessary costs of response activity reasonably~~

~~incurred by any other person prior to the promulgation of rules~~

~~relating to the selection and implementation of response activity~~

~~under this part. A person seeking recovery of these costs has the~~

~~burden of establishing that the costs were reasonably incurred~~

~~under the circumstances that existed at the time the costs were~~

~~incurred.~~

(3) The amounts recoverable in an action under this section

shall include interest. This interest shall accrue from the date

payment is demanded in writing, or the date of the expenditure or

damage, whichever is later. The rate of interest on the outstanding

unpaid balance of the amounts recoverable under this section shall

be the same rate as is specified in section ~~6013(5)~~ 6013(8) of the

revised judicature act of 1961, ~~Act No. 236 of the Public Acts of~~

~~1961, being section 600.6013 of the Michigan Compiled Laws~~ 1961 PA

236, MCL 600.6013.

(4) In the case of injury to, destruction of, or loss of

natural resources under subsection (1)(c), liability shall be to

the state for natural resources belonging to, managed by,

controlled by, appertaining to, or held in trust by the state or a

local unit of government. Sums recovered by the state under this

part for natural resource damages shall be retained by the

department, for use only to restore, repair, replace, or acquire

the equivalent of the natural resources injured or acquire

substitute or alternative resources. There shall be no double

recovery under this part for natural resource damages, including

the costs of damage assessment or restoration, rehabilitation,

replacement, or acquisition, for the same release and natural

resource.

(5) A person shall not be required under this part to

undertake response activity for a permitted release. Recovery by

any person for response activity costs or damages resulting from a

permitted release shall be pursuant to other applicable law, in

lieu of this part. With respect to a permitted release, this

subsection does not affect or modify the obligations or liability

of any person under any other state law, including common law, for

damages, injury, or loss resulting from a release of a hazardous

substance or for response activity or the costs of response

activity.

(6) If the department determines that there may be an imminent

and substantial endangerment to the public health, safety, or

welfare, or to the environment because of an actual or threatened

release from a facility, the attorney general may bring an action

against any person who is liable under section 20126 or any other

appropriate person to secure the relief that may be necessary to

abate the danger or threat. The court has jurisdiction to grant

such relief as the public interest and the equities of the case may

require.

(7) The costs recoverable under this section may be recovered

in an action brought by the state or any other person.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 95th Legislature are

enacted into law:

(a) Senate Bill No. 1345.

(b) Senate Bill No. 1346.

(d) House Bill No. 6360.

(e) House Bill No. 6363.