BILL ANALYSIS Ó
SB 470
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: SB 470
AUTHOR: Wright
AMENDED: April 9, 2013
FISCAL: Yes HEARING DATE: May 1, 2013
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : COMMUNITY DEVELOPMENT: ECONOMIC OPPORTUNITY
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 Act, 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 :
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1) Replicates the provisions of the California Community
Redevelopment Law (CRL) for cities and counties instead of
RDAs, allowing cities and counties to exercise powers that
are similar to statutory powers that former RDAs used to
have, including: sell property, provide financial assistance
to development projects, and clean up contaminated property
in order to promote economic opportunity specifically for
properties that were part of a former RDA.
2) Defines "economic opportunity" as any of the following:
a) Development agreements or other agreements that create,
retain, or expand new jobs. A city or county must make a
finding that the agreement will create or retain at least
one full-time equivalent, permanent job per $35,000 of
city, county, or city and county investment in the project
after full capacity and implementation of the agreement.
b) Development agreements that increase property tax
revenues to all property tax-collecting entities. A city
or county must make a finding that the agreement will
result in an increase of at least 15% of total property
tax resulting from the project at full implementation when
compared to the year prior to the property being acquired
by the government entity.
c) Creation of affordable housing, if a demonstrated
affordable housing need exists in the community, as
defined in the approved housing element or regional
housing needs assessment.
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d) Projects that meet specified climate, air quality, and
energy conservation goals and have been included in an
adopted Sustainable Communities Strategy or Alternative
Planning Strategy, or a project that specifically
implements the goals of those adopted plans.
e) Transit priority project areas, as defined in state
law.
3) Replicates the provisions of the Polanco Act for cities and
counties instead of RDAs, allowing cities and counties the
authority to remediate brownfields and provides immunity from
liability to public agencies and property purchasers under an
approved cleanup plan.
4) Specifically this bill:
a) Allows a city, county, or city and county to take any
actions that it determines are necessary and that are
consistent with other state and federal laws to remedy or
remove a release of hazardous substances on, under, or
from property within its jurisdiction, whether it owns
that property or not, subject to specified conditions.
b) Requires the city, county, or city and county to
request cleanup guidelines from the Department of Toxic
Substances Control (DTSC) or RWQCB before taking action to
remedy or remove a release, unless an administering agency
has been designated under state law. The city, county, or
city and county must submit for approval a cleanup or
remedial action plan to DTSC or RWQCB before taking action
to remedy or remove a release. DTSC or RWQCB must respond
to the requests for guidelines and approvals within a
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reasonable period of time.
c) Identifies the conditions under which a city, county,
or city and county can designate a local agency, in lieu
of DTSC or RWQCB, to review and approve a cleanup or
remedial action plan and to oversee the remediation or
removal of hazardous substances from a specific hazardous
substance release site. This bill allows a local agency
to withdraw from its designation and allows DTSC or RWQCB
to require, under specified conditions, a local agency to
withdraw from the designation.
d) Requires a city, county, or city and county to notify
DTSC, RWQCB, and local health and building departments of
cleanup activity at least 30 days before the activity
begins. With specified exceptions, the bill allows DTSC
or RWQCB to require a city, county, or city and county to
remedy or remove a release of a hazardous substance
pursuant to state law if the city, county, city and
county, or a responsible party's action to remedy or
remove a release of a hazardous substance is inconsistent
with an approved plan.
e) Imposes specified conditions on a city, county, or city
and county's authority to remedy or remove a release of
hazardous substances.
f) Allows a city, county, or city and county to require
the owner or operator of any site within a project area to
provide the city, county, or city and county with all
existing environmental information pertaining to the site,
except for information which is determined to be
privileged. A person can only be requested to furnish
information that is within their possession or control,
including actual knowledge of information within the
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possession or control of any other party. If
environmental assessment information is not available, the
city, county, or city and county can require the owner of
the property to conduct an assessment in accordance with
standard real estate practices for conducting phase I or
phase II environmental assessments.
g) Provides that a city, county, or city and county is not
liable under specified state and local liability laws if
it undertakes and completes an action, or causes another
person to undertake and complete an action, to remedy or
remove a hazardous substance release in accordance with a
cleanup or remedial action plan that meets specified
criteria.
h) Requires that a city, county, or city and county must
receive written acknowledgement from DTSC, RWQCB, or local
agency that it will receive specified immunity from
liability upon proper completion of a remedial or removal
action in accordance with an approved plan.
i) Specifies the manner in which DTSC, RWQCB, or local
agency must make a determination that a remedial or
removal action has been properly completed and notify the
city, county, or city and county in writing that the
immunity provided by the bill is in effect. A city,
county, or city and county must reimburse DTSC, RWQCB, and
local agency for costs incurred in reviewing or approving
cleanup or remedial action plans.
j) Requires that a local agency's approval of a cleanup or
remedial action also must be subject to the concurrent
approval by DTSC or RWQCB, under specified conditions.
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aa) Identifies the people and entities to which it extends
immunity from specified liability upon proper completion
of a remedial or removal action. The bill also identifies
people and entities to which it does not extend immunity.
bb) States that the bill:
Provides immunity that is in addition to any
other immunity of a city, county, or city and county
provided by law.
Does not impair specified causes of action
against the person, firm, or entity responsible for
the hazardous substance release that is the subject
of a removal or remedial action.
Does not apply to, or limit, alter, or
restrict, any action for personal injury, property
damage, or wrongful death.
Does not limit liability under a specified
provision of federal law.
Does not establish, limit, or affect the
liability of a city, county, or city and county for
any release of a hazardous substance that is not
investigated or remediated pursuant to state laws.
a) Requires any responsible parties to be liable to a
city, county, or city and county that remedies or removes,
or requires others to remedy or remove, a release of a
hazardous substance. The bill prohibits a city, county,
or city and county from recovering the costs of goods and
services that were not procured in accordance with
applicable procurement procedures. The amount of the costs
must include the interest, calculated according to a
specific formula, on the costs accrued from the date of
expenditure and reasonable attorney's fees. The costs can
be recovered in a civil action.
b) Identifies the defenses that are available to a
responsible party under state law.
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c) Allows a city, county, or city and county to recover
costs for developing and implementing an approved cleanup
or remedial action plan to the same extent DTSC is
authorized to recover those costs. The bill defines the
scope and standard of liability for recovering a city,
county, or city and county's costs.
d) Require a city, county, or city and county to begin an
action to recover costs of a remedy or removal within
three years after completion of the remedy or removal.
The bill states that the cost recovery authority it grants
is in addition to, and is not to be construed as
restricting, any other cause of action available to a
city, county, or city and county.
e) With specified exceptions, requires that a city,
county, or city and county that undertakes and completes a
remedial action, or otherwise causes a remedial action to
be undertaken and completed, shall not be liable, based on
its ownership of property after a release occurred, for
any costs that any responsible party incurs to investigate
or remediate the release or to compensate others for the
effects of that release.
f) With specified exceptions, states that its provisions
do not limit the powers of the State Water Resources
Control Board or a RWQCB to enforce specified provisions
of state law.
g) Replicates the Polanco Act's definitions for numerous
terms.
COMMENTS :
1) Purpose of Bill . In recent years, local governments have
lost nearly all the tools they commonly used to promote
economic development. SB 470 restores some significant
powers that cities and counties previously exercised under
provisions of the Community Redevelopment Law. The bill
gives local officials vitally needed flexibility to sell land
at "fair reuse value" rather than "fair market value" and
reestablishes the powers and protections that allowed them to
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clean up brownfields. After the recent turmoil surrounding
RDAs' dissolution, SB 470 will benefit communities throughout
California by helping local officials get their economic
development efforts back on track.
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
Redevelopment Act with the CRL, Chapter 710, Statutes of
1951. Codified in California Constitution, Article XVI,
Section 16, and the Health and Safety Code, beginning with
Section 33000, the CRL provided funding from local property
taxes to promote the redevelopment of blighted areas.
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
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households.
AB 3193 (Polanco) Chapter 1113, Statutes of 1990, 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 Board.
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.
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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 eliminate
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 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.
June 27, 2012, the Governor approved AB 1484, a Budget
trailer bill making some significant clarifications and
procedural changes in AB1X 26, the redevelopment
dissolution law.
3) Purpose of the Polanco Act . California recognizes that
cleaning up brownfield properties frees previously unavailable
land for productive reuse, while taking development pressures
off undeveloped open land, thereby improving and protecting
the environment. Brownfields are properties that are
contaminated, or thought to be contaminated, and are
underutilized due to perceived remediation costs and liability
concerns. Timely investigations and cleanups of brownfield
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sites promote economic development and reinvestment in
California through post-cleanup development and sustainable
reuse. To this end California enacted the Polanco Act to
provide RDAs with tools to compel remediation and provide
immunity from liability as a responsible party from future
remediation of contamination found.
4) Expansive Authority and Liability Protection to Local
Governments . SB 470 replicates the authority and protections
provided under the CRL and the Polanco Act, however with two
key differences: a) applies those authorities and protections
to all cities and counties rather than within the limitations
of an RDA, and b) does it for all property that meets the very
broad definition of "economic opportunity" purposes rather
than limited to properties within a redevelopment area.
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. Those limitations were aimed at protecting the
public interest and to provide protection against potential
misuse by a local government. By removing the controlling
limitations of the CRL and the Polanco Act and applying it
more broadly, SB 470 gives local officials far greater
authority than they had before RDAs' dissolution. The narrow
rules that made sense in the context of RDA law are not
appropriate in all cases for all city or county remediation
projects.
By providing liability protections to all properties broadly
deemed an "economic opportunity" 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. If there is no longer a responsible party
available on the property then there is no way to compel
remediation of the contamination. Liability immunity applied
this broadly creates serious potential health risks for future
inhabitants of the property. This type of liability relief
should be limited to minimize this risk. In addition, this
type of incentive should be limited to those blighted,
brownfield properties that truly need this type of incentive
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for revitalization.
The committee should amend SB 470 to apply its Polanco Act
provisions only to those blighted, brownfield properties that
were acquired by a former RDA, similar to the amendment taken
in the Governance and Finance Committee that limited the land
sale provisions.
5) Related legislation . AB 440 (Gatto) allows local agencies
to clean up hazardous substance releases and receive
liability immunity under provisions that are similar to
those in the Polanco Redevelopment Act. The bill is
awaiting a hearing in the Assembly Committee on
Environmental Safety and Toxic Materials.
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 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 : City of Long Beach
SUPPORT : California Contract Cities Association
Gateway Cities Council of Governments
League of California Cities
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Los Angeles Mayor Antonio R. Villaraigosa
San Francisco Mayor Edwin Lee
San Jose Mayor Chuck Reed
Santa Ana Mayor Miguel Pulido
OPPOSITION : None on file