Cal. Health & Safety Code § 79070

(a) Except as provided in subdivision (b), the department may not expend funds from the state account for a removal or remedial action with respect to a hazardous substance release site owned or operated by the federal government or a state or local agency at the time of disposal to the extent that the federal government or the state or local agency would otherwise be liable for the costs of that action, except that the department may expend those funds, upon appropriation by the Legislature, to oversee the carrying out of a removal or remedial action at the site by another party.
(b) Except as provided in subdivision (d), the department may expend funds from the state account, upon appropriation by the Legislature, to take a removal or remedial action at a hazardous substance release site that was owned or operated by a local agency at the time of release, if all of the following requirements are met:
1. (1) The department has substantial evidence that a local agency is not the only responsible party for the site.
2. (2) The department has issued a cleanup order to, or entered into an enforceable agreement with, the local agency pursuant to Section 79055 and has made a final determination that the local agency is not in compliance with the order or enforceable agreement.
(c) If a local agency is identified as a potentially responsible party in a remedial action plan prepared pursuant to Article 12 (commencing with Section 79195), and the department expends funds pursuant to this part to pay for the local agency’s share of the removal and remedial action, the expenditure of these funds shall be deemed to be a loan from the state to the local agency. If the department determines that the local agency is not making adequate progress toward repaying the loan made pursuant to this section, the California Department of Tax and Fee Administration shall, upon notice by the department, withhold the unpaid amount of the loan, in increments from the sales and use tax transmittals made pursuant to Section 7204 of the Revenue and Taxation Code, to the city or county in which the local agency is located. The California Department of Tax and Fee Administration shall structure the amounts to be withheld so that complete repayment of the loan, together with interest and administrative charges, occurs within five years after a local agency has been notified by the department of the amount that it owes. The California Department of Tax and Fee Administration shall deposit any funds withheld pursuant to this section into the state account.
(d) The department may not expend funds from the state account for a removal or remedial action at any waste management unit owned or operated by a local agency if it meets both of the following conditions:
1. (1) It is classified as a class III waste management unit pursuant to Article 3 (commencing with Section 20240) of Subchapter 2 of Chapter 3 of Subdivision 1 of Division 2 of Title 27 of the California Code of Regulations.
2. (2) It was in operation on or after January 1, 1988.