BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 440 (Gatto) - Hazardous substances: releases: local agency
cleanup or remedy.
Amended: May 24, 2013 Policy Vote: EQ 7-0
Urgency: No Mandate: No
Hearing Date: August 30, 2013 Consultant:
Marie Liu
SUSPENSE FILE.
Bill Summary: AB 440 would authorize local governments to remedy
or remove a release of hazardous substances and would provide
immunity from further liability to the local agency and any
person who enters into an agreement with that local agency to
develop the property as well as future property owners.
Fiscal Impact:
One-time costs between $80,000 and $200,000 from the Toxic
Substances Control Account (General) and Waste Discharge
Permit Fund (special) to the Department of Toxic Substances
Control (DTSC) and the Regional Water Quality Control Boards
(RWQCBs) for the development general cleanup guidelines to
be posted on its website.
Ongoing costs of $130,000 to $650,000 from the Toxic
Substances Control Account and Waste Discharge Permit Fund
(special) for the RWQCBs and DTSC to review and approve
three action plans annually. These costs would be
reimbursable from the local agency.
Unknown, but potentially in the mid-tens of thousands of
dollars, from the Toxic Substances Control Account and Waste
Discharge Permit Fund (special) to provide oversight on
cleanups in which a Certified Unified Program Agency (CUPA)
is reviewing and approving the cleanup plan. These costs
would not be reimbursable.
Background: The Polanco Act, which was part of the Community
Redevelopment Act, assisted redevelopment agencies (RDAs) in
responding to brownfield properties in their redevelopment
AB 440 (Gatto)
Page 1
areas. The act prescribed the process for RDAs to follow when
remediating a hazardous substance release in a redevelopment
project area and provided specified immunity from liability for
sites remediated under a cleanup plan that was approved by DTST
or a RWQCB. Limited liability protections were also extended to
future purchasers of properties remediated under the Polanco
Act.
The RDAs have been dissolved as of February 1, 2012 and
successor agencies have been designated to resolve the final
matters of the RDAs. The successor agencies, or any other local
government, cannot take any actions under the Polanco Act.
Proposed Law: This bill would allow local agency to undertake
cleanup of a contaminated property if there is no responsible
party for the property, the responsible party fails to clean up
the property, or the responsible party has failed to follow
through on a cleanup plan. The cleanup actions must be part of a
plan approved by DTSC, a RWQCB, or a designated CUPA. If the
local agency completes the cleanup in accordance with the
approved plan, the local agency will be immune from further
liability for the hazardous substance release that was the
subject of the cleanup. Immunity is also granted to a person
that enters into an agreement with a local agency for the
development of the property, future purchasers of that property,
and financiers of the development or purchase. The local agency
would be required to reimburse DTSC or the RWQCB for any costs
incurred in reviewing or approving a cleanup plan.
DTSC and the RWQCB would be required to adopt and post on its
website general cleanup guidelines. These guidelines would not
be considered regulations under the Administrative Procedures
Act and would not limit DTSC or the RWQCB from approving
site-specific cleanup guidelines.
The local agency would be able to designate a CUPA as the agency
to oversee the cleanup instead of DTSC or the RWQCB under
specified conditions. However, DTSC or the RWQCB could remove
the designation if the CUPA is not qualified or eligible to
oversee the cleanup activity.
Related Legislation: SB 470 (Wright) would allow successor
agencies to RDAs to take actions under the Polanco Act on lands
AB 440 (Gatto)
Page 2
that were in former jurisdictions of RDAs. SB 470 is currently
in the Assembly Local Government Committee.
Staff Comments: DTSC and the RWQCBs would be required to develop
general cleanup guidelines and post those guidelines on their
website. The cost to develop these guidelines for these agencies
is a total cost between $80,000 and $200,000, depending on the
level of detail in the cleanup guidelines and whether specific
information is needed for different cleanup types. The cost of
adopting, posting, and updating the guidelines is not
recoverable from local agencies that undergo actions under this
chapter.
The ongoing costs for the RWQCBs and DTSC are dependent on the
number of cleanups that occur annually, as well as the
complexity of those actions. It is unknown the number of plans
that will be submitted for review and approval given that this
bill would apply to all lands statewide. The workload
experienced by DTSC and the RWQCB is likely to be greater under
this bill than under the Polanco Act because the Polanco Act was
limited to lands under the jurisdiction of a redevelopment
agency. Depending on who is the lead agency, the workload
estimate would be between $130,000 and $650,000 per year
assuming there are six sites a year to review. Local agencies
would be required to reimburse the agencies' costs.
The bill would allow a CUPA to be the lead agency in reviewing
and approving the cleanup plan. However, DTSC and the RWQCBs can
revoke this designation if they find that the CUPA does not have
adequate staff resources and capabilities available to supervise
the removal or remedial action. This provision implies DTSC and
RWQCBs would need to do at least a cursory review of all cleanup
actions led by a CUPA. Presumably, a more in-depth review would
be needed if the agencies receive complaints about the cleanup
activities and plans. These costs would be dependent on the
number of action plans led by CUPAs, and the level of oversight
that is found to be necessary and is likely in the mid-tens of
thousands of dollars. Staff notes that past experience with
oversight needs with the Polanco Act do not necessarily apply as
this bill applies to all areas of the state rather than the
limited areas in redevelopment zones. It is unclear whether
these oversight costs would not be reimbursable by participating
local agencies.
AB 440 (Gatto)
Page 3
Any person responsible or liable for carrying out, or paying for
the costs of, the removal or remediation of a hazardous
substance becomes a responsible party. As this bill grants
immunity to the local agency, the developer of the property,
future owners of the property, and their financiers, should
lingering contamination need to be addressed, this bill will
make it more difficult, and likely more expensive, for the
regulatory agencies to identify responsible parties. As noted by
the Environmental Quality Committee, while there has been many
successful cleanups of blighted sites 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 or
residents or environmental hazards that need to be addressed."