BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 440
                                                                  Page 1

          Date of Hearing:   April 16, 2013

           ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
                                  Luis Alejo, Chair
                  AB 440 (Gatto) - As Introduced:  February 15, 2013
           
          SUBJECT  :   Brownfield hazardous substance cleanup.

          SUMMARY  :   Authorizes local government agencies to remedy or  
          remove a release of hazardous substances within the boundaries  
          of the local agency.  Specifically,  this bill  :

          1)Allows counties,  cities, or housing authorities to undertake  
            cleanup of a contaminated property if there is no responsible  
            party for the property, the responsible party fails to agree  
            within 60 days of request to clean up the property, or, having  
            agreed, fails to follow through in an appropriate and timely  
            manner.

          2)Requires that hazardous waste cleanups carried out by local  
            agencies must be conducted under guidelines or remedial action  
            plans approved by the Department of Toxic Substances Control  
            (DTSC), the regional water quality control board or, under  
            specified circumstances, the local environmental health  
            agency, the local health officer or the certified unified  
            program agency (CUPA).

          3)Provides that, if a local agency completes the cleanup of a  
            property in accordance with an approved remedial action plan,  
            the agency is immune from further liability for the hazardous  
            substance release that was the subject of the cleanup.

          4)Provides that the immunity from further liability also extends  
            to any person who enters into an agreement with the local  
            agency to develop the property, to persons who subsequently  
            acquire the property, and to persons who financed the  
            redevelopment activities.

          5)The immunity from liability would not be provided to the  
            following:

             a)   A person that was a responsible party for the release  
               before entering into an agreement, acquiring property, or  
               providing financing;









                                                                  AB 440
                                                                  Page 2

             b)   A person responsible for any subsequent release of a  
               hazardous substance or any release of a hazardous substance  
               not specifically identified in the approved cleanup plan or  
               remedial action plan;

             c)   A contractor who prepares the cleanup plan or remedial  
               action plan, or conducts the removal or remedial action; or

             d)   A person that obtains an approval of a cleanup plan or  
               remedial action plan by fraud, negligent or intentional  
               nondisclosure, or misrepresentation obtained by these  
               means.

          6)Authorizes local agencies to recover cleanup costs from the  
            responsible party or parties for the property.

          7)Provides that local agencies shall reimburse the RWQCB or DTSC  
            for the cost incurred in reviewing or approving a cleanup plan  
            submitted by a local agency.

           EXISTING LAW  :  Pursuant to both federal and state law,  
          establishes an extensive and complex series of programs  
          authorizing public agencies to order owners of contaminated  
          property, including "brownfields", to conduct cleanups of these  
          properties, including the following:

          1.The Federal Comprehensive Environmental Cleanup, Response and  
            Liability Act (CERCLA 42 U.S.C. 9601 et seq.), commonly  
            referred to as the federal Superfund law;

          2.The California Carpenter-Presley-Tanner Hazardous Substance  
            Account Act (commencing with Section 25300 of the Health and  
            Safety Code), commonly referred to as the State Superfund  
            Program;

          3.Division 7 of the Water Code (commencing with Section 13000),  
            commonly referred to as the Porter-Cologne Water Quality  
            Control Act); and 

          4.Article 12.5 of the Health and Safety Code (commencing with  
            Section 33459), commonly referred to as the Polanco  
            Redevelopment Act, and authorizes community redevelopment  
            agencies (RDAs) to take such actions as are necessary and  
            consistent with state and federal cleanup laws to remediate  
            releases of hazardous substances on property that is part of a  








                                                                  AB 440
                                                                  Page 3

            redevelopment project.  The Polanco Redevelopment Act provides  
            authority for the RDAs to carry out hazardous waste cleanups  
            in accordance with the followings provisions: 

               a.     Authorizes a RDA to undertake cleanup of a property  
                 itself if there is no responsible party for the property,  
                 the responsible party fails to agree within 60 days of  
                 request to clean up the property, or, having agreed,  
                 fails to follow through in an appropriate and timely  
                 manner.

               b.     Authorizes a redevelopment agency to require that  
                 cleanups carried out by redevelopment agencies must be  
                 carried out under guidelines or remedial action plans  
                 approved by the DTSC, the regional water quality control  
                 board or, under specified circumstances, the local  
                 environmental health agency, the local health officer or  
                 the CUPA.

               c.     Provides that, if a redevelopment agency completes  
                 the cleanup of a property in accordance with an approved  
                 remedial action plan, the agency is immune from further  
                 liability for the hazardous substance release that was  
                 the subject of the cleanup.  Provides that the immunity  
                 from further liability also extends to any person who  
                 enters into an agreement with the redevelopment agency to  
                 develop the property, to persons who subsequently acquire  
                 the property and to persons who financed the  
                 redevelopment activities.

               d.     Authorizes redevelopment agencies to recover cleanup  
                 costs from the responsible party or parties for the  
                 property.

           FISCAL EFFECT  :   Not known.

           
          COMMENTS  :

           1)Need for the bill  :  According to the author, "There is no  
            clear statutory authority for redevelopment successor agencies  
            to compel brownfield clean up.  Redevelopment Agencies used to  
            exercise Polanco Act powers to clean up and redevelop  
            brownfields.  Despite the Legislature's effort to pass some  
            blanket bills which transferred all development powers of  








                                                                  AB 440
                                                                  Page 4

            RDA's to local government or local housing authorities, it is  
            the opinion of legislative council, CalEPA and private  
            developers that this does not obviously extend to Polanco Act  
            powers.  Additionally, even if local authorities somehow did  
            retain the right to utilize Polanco Act powers, under the law  
            as written they would only be able to exercise those powers  
            within redevelopment areas, which will be phased out of  
            existence with the end of RDA's.  The Polanco Act powers need  
            to be saved, and the areas where they may be used must be  
            redefined."


          1)This bill is designed to replicate the authority and immunity  
            from future liability provided by the Polanco Redevelopment  
            Act for local government in general.  The bill generally  
            replicates the provisions of the Polanco Redevelopment Act in  
            a new section on of code that would apply broadly to local  
            agencies.
           2)Brownfield clean-up by local agencies  .  AB 3193 (Polanco)  
            Chapter 1113, Statutes of 1990 (Polanco Redevelopment Act), as  
            part of the Community Redevelopment Act, was enacted to assist  
            redevelopment agencies in responding to brownfield properties  
            in their redevelopment areas.  It prescribes processes for  
            redevelopment agencies to follow when cleaning up a hazardous  
            substance release in a redevelopment project area.  It also  
            provides specified immunity from liability for sites cleaned  
            up under a cleanup plan approved by DTSC or a regional water  
            quality control board.

            Prior to their dissolution, RDAs could use tax increment  
            financing in combination with Polanco Redevelopment Act  
            liability protection to remediate and develop brownfields  
            throughout California.  With the RDA wind down process set  
            forth in AB 1X 26, (Blumenfield) Chapter 5, Statutes of 2011,  
            these activities are now subject to uncertainties and could be  
            potentially discontinued.  AB 1X 26 requires successor  
            agencies to expeditiously dispose of assets and properties of  
            former RDAs.  However, among those properties many brownfield  
            sites that will either be difficult for successor agencies to  
            sell or to maximize the value in the sale due to the actual or  
            perceived contamination of the site.

           3)Arguments in support:   According to the Natural Resources  
            Defense Council, "When RDAs were dissolved; there was no clear  
            successor the Polanco Act powers.  This bill would renew the  








                                                                  AB 440
                                                                  Page 5

            Polanco Act by transferring the powers to cities, counties,  
            and successor housing agencies.  We support this bill because  
            it would encourage infill development and the cleanup of  
            environmental contamination by authorizing local governments  
            to compel cleanup of contaminated properties and reducing  
            local -government liability for the same."

           4)Related prior legislation:

              a)   AB 1235 (Hernadez) 2012, would have provided that if a  
               RDA has been dissolved, its successor agency maintains all  
               the rights, powers, and duties that were vested in the  
               redevelopment agency prior to its dissolution, including  
               certain immunities for the removal of hazardous substance  
               releases.   This bill was held in the Senate Rules  
               Committee.


             b)   SB 1335 (Pavely) 2012, would  have authorized successor  
               agencies, with approval of their oversight board, to retain  
               properties that are considered brownfields for the purpose  
               of remediating the contamination in order to maximize their  
               value.  The successor agencies would have been authorized  
               to use available financing, funds obtained from a  
               responsible party, existing state or federal grants or any  
               other funds at the disposal of the successor agency.  This  
               bill was held in the Senate Appropriations Committee.

          5)This bill is double referred to the Assembly Local Government  
            Committee.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Building Industry Association
          California Conference of Carpenters
          California State Council of Laborers
          League of California Cities
          Natural Resources Defense Council
          State Building and Construction Trades Council of California

           Opposition 
           
          None on file.








                                                                  AB 440
                                                                 Page 6

           

          Analysis Prepared by  :    Bob Fredenburg / E.S. & T.M. / (916)  
          319-3965