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