BILL ANALYSIS �
AB 440
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 440
AUTHOR: Gatto
AMENDED: May 24, 2013
FISCAL: Yes HEARING DATE: July 3, 2013
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : HAZARDOUS SUBSTANCES: RELEASES: LOCAL AGENCY
CLEANUP OR REMEDY
SUMMARY :
Existing law :
1) Dissolved redevelopment agencies (RDAs) and community
development agencies (CDAs), as of February 1, 2012, and
provides for the designation of a successor agency, as
defined, to resolve the final matters of the agencies and
to dispose of assets and properties in accordance with
certain procedures.
2) Under the Polanco Redevelopment Act (the Polanco Act) which
was part of the Community Redevelopment Law (CRL), assisted
redevelopment agencies in responding to brownfield
properties in their redevelopment areas. It prescribed
processes for redevelopment agencies to follow when
remediating a hazardous substance release in a
redevelopment project area. It also provided specified
immunity from liability for sites cleaned up under a
cleanup plan approved by the Department of Toxic Substances
Control (DTSC) or a Regional Water Quality Control Board
(RWQCB). It provided limited liability protections for
RDAs and future purchasers of properties remediated under
the Polanco Act.
This bill : Authorizes local government agencies to remedy or
remove a release of hazardous substances within the boundaries
of the local agency. Specifically this bill:
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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 DTSC, the regional water quality
control board, or designated local agencies;
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)Authorizes local agencies to recover cleanup costs from the
responsible party or parties for the property.
6)Provides for a public participation process when local
governments are developing a clean-up plan. The public
participation process shall include:
a) An opportunity for the public and other government
agencies to participate in the decision making process
for the removal or remedial action and the consideration
of those comments before submitting a clean-up plan for
approval;
b) A public notice 30 days before submitting a clean-up
plan to state or local agencies for approval;
c) A public meeting, if requested; and
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d) The local agency shall consider the issue of
environmental justice for communities impacted by a
proposed removal or remedial action.
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.
8)States that the Legislature declares that this chapter is
the policy successor to the Polanco Redevelopment Act.
COMMENTS :
1)Purpose of 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 RDAs to local government or local housing
authorities, it is the opinion of Legislative Counsel,
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."
2) Background . In 1945, the California Legislature
enacted the Community Redevelopment Act to assist local
governments in eliminating blight through development,
reconstruction, and rehabilitation of residential,
commercial, industrial, and retail districts. The Act
gave cities and counties the authority to establish
RDAs.
In 1951, the Legislature superseded the Community
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Redevelopment Act with the California Redevelopment Law
(CRL), Chapter 710, Statutes of 1951, which codified in
California Constitution, Article XVI, Section 16, and the
Health and Safety Code, beginning with Section 33000, CRL
provided funding from local property taxes to promote the
redevelopment of blighted areas. CRL enabled local
government entities to create redevelopment agencies to
develop a plan and provide the initial funding to launch
revitalization of identified areas in order to encourage
and attract private sector investment that otherwise
wouldn't occur.
The CRL also established the authority for tax increment
financing (TIF), which is a public financing method to
subsidize redevelopment, infrastructure, and other
community-improvement projects. TIF used future increases
in property taxes to subsidize current improvements, which
are projected to create the conditions for the increases.
In 1976, the California Legislature required that at least
20% of the tax increment revenue from redevelopment
project areas be used to increase, improve, and preserve
the supply of housing for very low, low, and moderate
income households.
AB 3193 (Polanco), Chapter 1113, Statutes of 1990, 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
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cleanup plan approved by DTSC or a RWQCB.
AB 1290 (Isenberg), Chapter 942, Statutes of 1993, known
as the "Community Redevelopment Law Reform Act of 1993,"
revised the CRL to address alleged abuses, and added
restrictions on redevelopment activities, including
limiting them predominately to urban areas.
Citing a significant State General Fund deficit, Governor
Brown's 2011-12 budget proposed eliminating RDAs and
returning billions of dollars of property tax revenues to
schools, cities, and counties to fund core services.
On June 28, 2011, the Governor approved two bills, AB1X 26
(Blumenfield), Chapter 5, Statutes of 2011, and AB1X
27(Blumenfield), Chapter 5, Statutes of 2011, which amended
the CRL. AB1X 26 was the "dissolution" bill, which set
November 1, 2012 as the date to dissolve all RDAs. The
companion legislation AB1X 27, the "reinstatement" bill,
allowed cities to keep their agencies in place by
committing to substantial "community remittances" to be
paid to the State.
In July 2011, a lawsuit was filed challenging the
constitutionality of both AB1X 26 and AB1X 27. The
California Supreme Court accepted the case and issued a
stay under which agencies remained in place but in the
suspended state pending a decision by the Court.
On December 29, 2011, the California Supreme Court
issued its decision: it upheld AB1X 26, which eliminates
redevelopment agencies, but struck down AB1X 27, which
would have allowed cities to agree to community
remittance payments to keep their agencies in place. As
a result, under the schedule set by the California
Supreme Court, AB1X 26 provides that cities may create
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successor agencies and could continue to implement
"enforceable obligations" which were in place prior to
the suspension-existing contracts, bonds, leases,
etc.-and take title to all of the former redevelopment
agencies' housing and other assets.
On June 27, 2012, the Governor approved AB 1484
(Assembly Committee on Budget) Chapter 26, Statutes of
2012, making some significant clarifications and
procedural changes in AB1X 26, the redevelopment
dissolution law.
3) Purpose of the Polanco Act . In 1990 the California
Legislature recognized the benefit to cleaning up
brownfield properties located within redevelopment areas
in California where it was a struggle to address economic
and social deterioration and blight caused by properties
where contamination was present. The private sector was
reluctant to invest because the costs associated with
cleaning up brownfields outweighed the potential gain.
RDAs served as the catalyst for remediating these sites.
The Polanco Act was enacted in the CRL to provide RDAs
with tools to compel remediation of sites within
designated redevelopment areas and provided the RDA
limited immunity from liability as a responsible party
from future remediation of contamination found.
4) Expansive authority and liability protection to local
governments . AB 440 replicates the authority and
protections provided under the Polanco Act, however with
several key differences:
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a) Applies those authorities and protections to all cities
and counties rather
than within the limitations of an RDA and does so for
any property within the jurisdiction of a city or
county.
b) Allows local agencies to designate another local
agency to do oversight of
cleanups within their own jurisdictions.
c) Requires state oversight agencies to provide general
guidelines for remediation.
d) Creates a new chapter pertaining to liability relief
outside of the CRL.
e) The Polanco Act requires that the plan and schedule
have been found by the overseeing agency to be
consistent, to the maximum extent possible, with the
priorities, guidelines, criteria, and regulations
contained in the National Contingency Plan. This bill
only requires that the plan and schedule are consistent
with the intended use of the property .
5) Out of context . Within the context of the CRL and the
Polanco Act, the liability protections and authorities to
require a property to be remediated were inherently
limited to properties that were within a defined RDA and
were subject to the many limitations that applied to that
RDA's activities under the CRL and the Polanco Act (i.e.,
the sites were "blighted" pursuant to Article XVI of the
California Constitution and the obstacles to addressing
the blight prevented the private sector from investing
without the assistance of the RDA, including financial
assistance). The limitations of the CRL together with the
Polanco Act limitations were put in place to protect the
public interest and protect against potential misuse by a
local government.
By removing the controlling limitations of the CRL and the
Polanco Act and applying it more broadly, AB 440 gives local
officials far greater authority than they had before RDAs'
dissolution. The narrow rules that made sense in the
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context of RDA law are not appropriate in all cases for all
city or county remediation projects. Additionally, AB 440
removes the context of the CRL entirely by creating a new
chapter rather than amending the Polanco Act. So while
there is a section within the bill that states:
The Legislature finds and declares that this chapter
is the policy successor to the Polanco Redevelopment
Act (Article 12.5 (commencing with Section 33459) of
Part 1 of Chapter 4 of Division 24) and shall be
interpreted and implemented consistent with that act.
It is further the intent of the Legislature that any
judicial construction or interpretation of the Polanco
Redevelopment Act also apply to this chapter.
by creating a new chapter, the bill loses the context the
CRL and the limitations that applied from that act and the
Polanco Act together.
6) How clean is clean? What are the risks after a cleanup
is complete ? The intended land use defines how a cleanup
will be done and what will be contained within a cleanup
or remedial action plan is determined by that land use,
regulatory standards, types of contamination and
anticipated exposure, cleanup costs, State Lands statutes
and residential acceptance. There is not a set standard
for every contaminant for every situation. If the
proposed use is residential, the cleanup or remedial
action plan will be more stringent than if it is a parking
lot. However, it is unlikely that the remedial action
plan will require the full removal of every possible
contaminant because cleanups are complicated and
expensive. Remedial action plans mitigate risk, but they
do not necessarily completely remove it. The hazard to
public health is not completely gone when a site is
remediated. For instance, on many sites a cement cap is
put over contamination because that adequately protects
from the exposure pathway of the contaminant for the
intended land use. The caps have to be maintained and
monitored into the future to prevent exposure.
Transfer of risk . The Polanco Act has led to many
successful cleanups of blighted sites across the state,
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however, with or without the liability protections provided
under the Polanco Act, there are also sites that have been
remediated that, even with all best efforts and compliance
with a cleanup or remedial action plan, lingering
contamination has led to harm to residents or environmental
hazards that need to be addressed. If a city or county or
future developer is not a responsible party (as would be
provided under this bill), the residents will be left to
address the contamination themselves. This bill may remove
liability, but it does not remove potential risk - it
transfers it.
By providing liability protections to any property within
the local agencies' jurisdiction this bill provides that
current and future owners of one of these properties would
not be responsible for further remediation, even if the
property was found to be making inhabitants or future
purchasers of the property sick, as long as they complied
with the cleanup or remedial action plan. If there is no
longer a previous responsible party available for the
property, then there is no way to compel the developer or
local government to conduct future remediation of the
contamination.
While it is laudable to create incentives for cleaning up
contaminated property, liability immunity applied this
broadly creates serious potential health risks for future
inhabitants or users of the property. This type of
liability relief should be very limited to minimize this
risk.
7) Questions related to local government qualifications and
authority . DTSC, SWRCB, and the RWQCBs are responsible
for overseeing the management, containment and remediation
of contamination and pollution for the State. They have
on staff toxicologists and other scientists who specialize
in these activities on a day-to-day basis. What local
agency can meet the qualifications of the State's
oversight agencies?
Additionally, can one local agency provide objective
oversight of another local agency's cleanup activities
within the same jurisdiction?
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Without specific state oversight, how does the State prevent
abuse of this authority on the local level?
This bill very broadly allows local governments the
authority to compel owners of sites within their
jurisdiction to either cleanup their property or conduct the
remediation themselves and then charge the owner and
responsible parties for the local government's activities
for ANY site within its jurisdiction. Is it appropriate to
give local government such broad authority to force property
owners to take action when the contamination on the property
may not be causing harm and the owner may not have the
financial ability to fund a cleanup?
8) Unintended consequences . Will this bill result in
stunting private investment in brownfields? If a
developer can receive the benefits of liability protection
simply by developing or purchasing any property in the
State in which the local government conducted or caused to
be conducted a cleanup under the provisions of this bill,
then why would any developer ever purchase and develop a
property that was not cleaned up by a local government and
does
not afford the same liability protection?
9) Solution to the loss of CRL and Polanco Act tools . With
the loss of the RDAs in California, the Polanco Act tool
and protections were lost with RDAs. As the author
notes, the Polanco Act was a valuable tool that led to
the successful remediation of many sites within
California and there is value in preserving this tool to
encourage brownfield cleanups. However, this bill
broadly extends the authority and protections of the
Polanco Act without preserving the context in which the
Polanco Act worked.
The Senate Environmental Quality Committee considered
legislation early this year, SB 470 (Wright), which
would preserve the Polanco Act while also preserving the
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context of the CRL. This more narrowly crafted
legislation will result in local governments being able
to cleanup brownfields within the jurisdictions of the
former RDAs without broadening the authority so
extensively as to potentially increase the risk to
public health and environmental safety. SB 470 provides
a more focused solution to this issue.
10)New economic drivers for addressing blight . The
dissolution of RDAs has left open the question about how
the state can help local governments moving forward
encourage and address those areas within communities that
would benefit from government interventions and incentives
in order to economically reinvigorate communities. Any
solution should provide specifically crafted tools for the
needs of those communities without creating the potential
for misuses of overly broad allowances within statute.
To that end, the Legislature has introduced several bills
aimed at providing those tools. For example, SB 1
(Steinberg) allows a local government to establish a
Sustainable Communities Investment Authority (Authority)
and direct tax increment revenues to that Authority in
order to address blight by supporting development in
transit priority project areas, small walkable communities,
and clean energy manufacturing sites. Liability
protections should be considered in the context of any new
investment tools provided.
11)Related legislation . SB 470 (Wright) allows cities and
counties to use some of the Community Redevelopment
Law's financing, property sale, and brownfield cleanup
powers to promote economic development, is awaiting
hearing in the Assembly Committee on Housing and
Community Development.
SB 1335 (Pavley), of 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
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contamination in order to maximize their value. The
successor agencies would 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 measure failed in the Senate
Appropriations Committee.
AB 1235 (Hernandez), of 2011, would have applied all
authority, rights, powers, duties, obligations, and
protections afforded to a redevelopment agency under the
Polanco Redevelopment Act to a successor agency, as
defined, for any property that was within a redevelopment
project of a redevelopment agency that has been dissolved
by an act of the Legislature. The measure was amended on
the Senate Floor to pertain to another subject.
SOURCE: Author
SUPPORT : California Building Industry Association
California Conference of Carpenters
California State Council of Laborers
City of Burbank
City of Chula Vista
City of El Centro
City of Huntington Beach
City of Lakewood
City of Sacramento
City of Vista
Harbor Association of Industry & Commerce
League of California Cities
League of California Cities - Los Angeles
County Division
Natural Resources Defense Council
OPPOSITION : None on file