BILL ANALYSIS �
SB 470
Page 1
Date of Hearing: July 3, 2013
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
SB 470 (Wright) - As Amended: May 8, 2013
SENATE VOTE : 36-0
SUBJECT : Community development: economic opportunity
SUMMARY : Gives cities, counties, or cities and counties the
authority that redevelopment agencies (RDAs) had under the
Polanco Redevelopment Act (the Polanco Act) to cleanup
brownfields and the authority to sell or lease land for an
economic opportunity, at less than market value, in the
jurisdiction of a former RDA. Specifically, this bill :
1)Includes legislative intent language.
2)Defines "economic opportunity" to mean any of the following:
a) Development agreements that create, retain or expend new
jobs that the legislative body finds will create or retain
at least one full-time permanent job for every $35,000 of
city, county, or city and county investment in a project;
b) Development agreements that will increase the property
tax revenues to all taxing entities by at least 15% when
the project is at full implementation as compared to the
rate one year prior to the acquisition by a governmental
entity;
c) The creation of affordable housing if there are
demonstrated affordable housing needs as defined in the
approved housing element or regional housing needs
assessment (RHNA);
d) Projects that meet the goals of SB 375 (Steinberg),
Chapter 728, Statutes of 2008, is included in a sustainable
communities strategy, an alternative planning strategy or
implements the goals of those adopted plans; and
e) Transit priority projects.
1)Creates a process for a city, county, or city and county to
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sell or lease properties that are returned to them as part of
the long-range property management plan of former RDA
properties for an economic development purpose.
2)Requires a legislative body to approve the sale or lease of a
property that is part of the long-range property management
plan for an economic purpose by resolution after a public
hearing that has been noticed for two consecutive weeks in the
newspaper.
3)Requires the city, county or city and county to provide a
report for the public to review and copy that includes the
following:
a) A copy of the proposed sale or lease;
b) The cost of the agreement to the city, county, or city
and county that includes land acquisition costs, clearance
costs, relocation costs, cost of improvements provided by
the local government's interest on any loans or bonds to
finance the agreements;
c) The estimated value of the property to be sold or leased
as determined by the highest and best uses permitted under
the general plan or zoning;
d) The estimated value of the property to be sold or leased
with the conditions, covenants, and development costs
required by the sale or lease;
e) The purchase price or lease payments that the lessor
will be required to make during the term of the lease;
f) If the sale price or rental amount is less than fair
market value as determined by the highest and best use,
then the legislative body must provide an explanation for
the difference;
g) An explanation of why the sale or lease of the property
will result in the creation of economic opportunity;
1)Requires the resolution approving the sale or lease of the
property to be approved by a majority vote, or a 2/3 vote if
required by an adopted ordinance, a finding that the sale or
lease of the property will assist in the creation of economic
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opportunity, and include one of the following:
a) The consideration is not less that the fair market reuse
value at its highest and best use; or
b) The consideration is not less than the fair reuse value
at the use and with the covenants and conditions and
development costs authorized by the sale or lease.
1)Provides that the provisions of this bill are an alternative
to any other authority granted to cities to dispose of
city-owned property.
2)As allowed under Community Redevelopment Law (CRL) for a RDA,
allows a city, county, or city and county to establish a
program to make loans to owners or tenants to rehabilitate
commercial buildings or structures.
3)As allowed under the CRL for a RDA, permits a city, county, or
city and county to assist with the financing facilities or
capital equipment as part of an agreement with a developer or
rehabilitate a property that will be used for industrial or
manufacturing purposes.
4)As allowed under the CRL for a RDA, requires a city, county,
or city and county to make a finding, after a public hearing,
that assisting with the purchase of capital equipment or
facilities is necessary for the economic feasibility of the
development and cannot be achieved through the private market.
5)States the provisions of this bill are not intended to
authorize the use of eminent domain for economic development
purposes.
6)Gives a city, county, or city and county authority to clean up
contaminated properties under the Polanco Redevelopment Act
that are in the project areas of a former RDA whether it owns
the property or not.
7)Allows a city, county, or city and county to take any actions
that it determines are necessary and that is 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.
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8)Requires the city, county, or city and county to request
cleanup guidelines from the Department of Toxic Substances
Control (DTSC) or Regional Water Quality Control Board (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
reasonable period of time.
9)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.
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.
10)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. 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.
11)Imposes specified conditions on a city, county, or city and
county's authority to remedy or remove a release of hazardous
substances.
12)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 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
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accordance with standard real estate practices for conducting
phase I or phase II environmental assessments.
13)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.
14)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.
15)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.
16)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.
17)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.
18)States that the bill:
a) Provides immunity that is in addition to any other
immunity of a city, county, or city and county provided by
law;
b) 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;
c) Does not apply to, or limit, alter, or restrict, any
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action for personal injury, property damage, or wrongful
death;
d) Does not limit liability under a specified provision of
federal law; and
e) 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.
1)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.
2)Identifies the defenses that are available to a responsible
party under state law.
3)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.
4)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.
5)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
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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.
6)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.
7)Replicates the Polanco Act's definitions for numerous terms.
EXISTING LAW
1) Dissolved RDAs 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) Allowed RDAs to sell or lease properties at less than the
value of the property at the highest and best use if it
provides various disclosures including an explanation that
the sale will assist in the elimination of blight. Requires
the sale to be approved by resolution in a public meeting by
a majority vote unless the legislative body has placed an
ordinance requiring a two-thirds vote (Health and Safety Code
Section 33433).
3) Under the Polanco Act which was part of the Community
Redevelopment Act, assisted RDAs in responding to brownfield
properties in their redevelopment areas. It prescribed
processes for RDAs 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.
FISCAL EFFECT : None.
COMMENTS :
In 2011, facing a severe budget shortfall, the Governor proposed
eliminating RDAs in order to deliver more property taxes to
other local taxing agencies. Redevelopment redirected 12% of
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property taxes statewide away from schools and other local
taxing entities and into community development and affordable
housing. Ultimately, the Legislature approved and the Governor
signed two measures, ABX1 26 and ABX1 27 that together dissolved
RDAs as they existed at the time and created a voluntary
redevelopment program on a smaller scale. In response, the
California Redevelopment Association (CRA), the League of
California Cities, along with other parties, filed suit
challenging the two measures. The Supreme Court denied the
petition for peremptory writ of mandate with respect to ABX1 26.
However, the Court did grant CRA's petition with respect to ABX1
27. As a result, all RDAs were required to dissolve as of
February 1, 2012.
Purpose of this bill: According to the author, "local economic
development has remained stagnant since the dissolution of
redevelopment. The ability of local governments and
partner-agencies to support transit-oriented development, assist
with affordable housing, create jobs or generally increase tax
revenues through sale of local land. This bill authorizes local
governments to promote economic opportunity using local dollars
through agreements that create, retain, or expand new jobs. It
gives local governments the ability to enter into land sale
agreements based upon "faire reuse value" at term defined and
achieved only if the local government can transparently prove
community benefits through a public review process and
verifiable to data. SB 470 will also reinstate the Polanco Act
to allow local governments to enter into collaborate partnership
and utilize unique powers to mitigate environmentally tax
brownfield sites."
Disposition of property: Under Community Redevelopment Law,
RDAs could sell or lease property at the "fair reuse value" or
an amount less than the value at the highest and best use
because a RDA imposed specific development conditions, covenants
and criteria that are more restrictive than what would be
permitted under the highest and best use. RDAs were required
to approve the sale or lease in a public hearing and disclose
the value of the property at the highest and best use as it
compared to the fair reuse value. This bill would allow cities
and counties to use this process to sell or lease properties
that were owned by the former redevelopment and are part of the
long-range property management plan approved by DOF as part of
the dissolution of the RDA. The city or county would be
required to show that the new use of the property would result
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in job creation, affordable housing, or an increase in property
taxes as a measure of economic development. This authority
gives local governments the ability to evaluate the community
and economic benefit to selling a property for less than the
market value.
Economic development : Redevelopment was created to eradicate
blight. In order to sell or lease a property at less than the
value at the highest and best use, RDAs were required to explain
how the sale for fair reuse value would reduce blight. This
bill requires that the city or county explain how the
disposition of the property will result in an economic benefit.
The bill also gives cities and counties the authority that RDAs
had to make loans for capital development after making a finding
at a public hearing that the assistance cannot be obtained for
economically feasible terms in the private market.
The Polanco Act : In 1990, AB 3193 (Polanco), Chapter 1113
(Polanco Redevelopment Act), was enacted to assist RDAs in
responding to brownfield properties in their redevelopment
areas. It prescribes a process for RDAS to follow when cleaning
up a hazardous substance released 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. RDAs had the authority to
take any actions that the agency determined was necessary to
address a release of hazardous substances on or under property
within a project area. In return the agency, the developer of
the property and the subsequent owners received limited immunity
from further cleanup liability. This bill gives cities and
counties similar authority that RDAs had under the Polanco Act
to remediate properties that are in the jurisdiction of former
redevelopment project areas.
Committee amendments:
On page 5, delete lines 33-35. This section is repetitive.
Double referred : If SB 470 passes this committee, the bill will
be referred to the Committee on Local Government.
REGISTERED SUPPORT / OPPOSITION :
Support
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City of Long Beach (sponsor)
California Contract Cities Association
Gateway Cities Council of Governments
Los Angeles County Division of the League of California Cities
Opposition
None on file.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085