BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
SB 820 (Hertzberg)
Version: April 12, 2016
Hearing Date: April 19, 2016
Fiscal: Yes
Urgency: No
TH
SUBJECT
Hazardous Materials: California Land Reuse and Revitalization
Act of 2004
DESCRIPTION
Existing law, the California Land Reuse and Revitalization Act
of 2004 (CLRRA), provides an innocent landowner, a bona fide
purchaser, or a contiguous property owner, with a qualified
immunity from liability for pollution conditions caused by a
release or threatened release of a hazardous material, as
specified. The CLRRA will be repealed on January 1, 2017,
unless that date is extended or the CLRRA's sunset provision is
removed.
This bill would extend the date of repeal to January 1, 2027,
and make corresponding changes to a provision that provides for
continued immunity after the repeal of the Act.
BACKGROUND
According to the United States Environmental Protection Agency
(USEPA), a brownfield is "a property, the expansion,
redevelopment, or reuse of which may be complicated by the
presence or potential presence of a hazardous substance,
pollutant, or contaminant." (See
https://www.epa.gov/brownfields/brownfield-overview-and-definitio
n [as of Apr. 7, 2016].) Brownfields are typically abandoned,
idled, or underutilized sites, formerly used for industrial or
commercial purposes, where perceived or actual contamination
deters redevelopment. Costs associated with brownfield site
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cleanup can be prohibitively expensive for parties who purchase
these properties, particularly when unexpected hazardous
materials are encountered during site remediation.
Consequently, many of these sites remain vacant for years.
Brownfield cleanup and redevelopment is a problem in California
and across the United States. USEPA estimates that there are
more than 450,000 brownfields in the U.S., approximately 90,000
of which are in California. These properties include former
industrial sites, school sites, military bases, small businesses
and landfills, and their idle or underused status contributes to
both urban blight and urban sprawl. According to the California
Department of Toxic Substances Control, "cleaning brownfield
properties frees previously unavailable land for productive
reuse, while taking development pressures off undeveloped open
land, thereby improving and protecting the environment." (See
http://www.dtsc.ca.gov/SiteCleanup/Brownfields/index.cfm [as of
Apr. 7, 2016].) The large number of brownfield sites and the
unavailability of sufficient public resources to remediate these
sites mean that California's brownfields will not be restored to
productive use without significant participation by the private
sector.
The California Land Reuse and Revitalization Act of 2004 (CLRRA)
provides qualified immunities to certain owners and purchasers
of brownfields in order to drive investment toward these
polluted properties. Historically, the federal Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA)
and various state laws, including the Carpenter-Presley-Tanner
Hazardous Substance Account Act, rendered current and previous
owners of contaminated property jointly and severally liable for
the cost of cleaning up hazardous materials released on a site.
In 2002, Congress amended CERCLA to grant immunity to innocent
and prospective purchasers, and innocent contiguous property
owners, for previously occurring contamination for which the
innocent or prospective purchaser had no responsibility, subject
to certain conditions. Following suit, in 2004, California
enacted the CLRRA, which provides innocent landowners, bona fide
purchasers, and contiguous property owners, who did not cause or
contribute to a release, with qualified immunity from liability
under certain state laws. To take advantage of this immunity,
qualifying individuals must enter into an agreement with an
oversight agency that requires the individual to undertake
various tasks relating to cleanup of hazardous materials on the
property.
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Under current law, CLRRA will sunset on January 1, 2017, but any
individual who qualifies for immunity as of December 31, 2016,
would retain their immunity, as specified. This bill would
extend that sunset date by 10 years, to January 1, 2027, and
make conforming changes to the provisions that provide for
continued immunity after that date.
This bill was approved by the Senate Committee on Environmental
Quality on April 6, 2016, by a vote of 6-0.
CHANGES TO EXISTING LAW
Existing law generally imposes joint and several liability upon
current and previous owners of property for "response costs"
(cost of clean-up) incurred by the government or any other party
associated with the remediation of a site contaminated by
hazardous materials. (Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA), 42 U.S.C. Sec. 9601 et
seq.; Carpenter-Presley-Tanner Hazardous Substance Account Act,
Health & Saf. Code Sec. 25300 et seq.; Hazardous Waste Control
Law, Health & Saf. Code Sec. 25100 et seq.; Keene Underground
Storage Tank Cleanup Trust Fund Act, Health and Saf. Code Sec.
25299.10 et seq.)
Existing law , the California Land Reuse and Revitalization Act
of 2004 (CLRRA), provides innocent landowners, bona fide
purchasers, and contiguous property owners who did not cause or
contribute to a release with immunities from: (1) claims for
response costs or other damages associated with a release or
threatened release of a hazardous material from the site; or (2)
agency action to require the individual to take a response
action, other than the response action required in an approved
CLRRA response plan, except under certain conditions. (Health &
Saf. Code Sec. 25395.60 et seq.)
Existing law requires a bona fide purchaser, innocent landowner,
or contiguous property owner who seeks to qualify for the above
immunity to enter into an agreement with an agency. Existing
law requires that agreement to include the performance of a site
assessment, and, if the agency determines that a response plan
is necessary, to prepare and implement the response plan.
(Health & Saf. Code Sec. 25395.92.)
Existing law further requires individuals seeking to qualify as
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bona fide purchasers, innocent landowners, or contiguous
property owners to:
make all appropriate inquiries into the previous ownership and
uses of the site;
exercise appropriate care with respect to the release or
threatened release of hazardous materials at the site;
provide full cooperation, assistance, and access to a person
authorized to conduct response actions or natural resource
restoration at the site;
comply with land use controls established or relied on in
connection with an approved response action at the site;
not impede the effectiveness or integrity of any aspect of any
remedy employed at the site in connection with a response
action;
comply with all requests for information or administrative
subpoenas by an agency with jurisdiction; and
provide all notices and satisfy reporting requirements under
state and federal law with respect to the hazardous materials
at the site. (Health & Saf. Code Sec. 25395.80.)
Existing law provides that if there are unrecovered costs
incurred by an agency at a site for which an owner of the site
is not liable as an innocent landowner, bona fide purchaser, or
contiguous property owner, an agency shall have a lien on the
site, or may, by agreement with the owner, obtain from the owner
a lien on other property or other assurance of payment for the
unrecovered response costs, subject to certain conditions.
(Health & Saf. Code Sec. 25395.83.)
Existing law provides that an innocent landowner, bona fide
purchaser, contiguous landowner, or bona fide ground tenant, may
seek contribution from any person who is responsible for a
discharge or release of hazardous materials for which the
innocent landowner, bona fide purchaser, contiguous landowner,
or bona fide ground tenant incurs agency oversight costs for the
review of a response plan or oversight of the implementation of
a response plan. (Health & Saf. Code Sec. 25395.85.)
Existing law states that the CLRRA will not provide immunity
from, among other things:
liability for bodily injury or wrongful death;
criminal acts;
permit violations; or
new releases of hazardous materials that are caused or
contributed to by an innocent landowner, bona fide purchaser,
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or contiguous property owner. (Health & Saf. Code Sec.
25395.86.)
Existing law will repeal the CLRRA on January 1, 2017, unless a
subsequent law repeals that requirement. Existing law,
operative January 1, 2017, provides that any individual who
qualifies for immunity as of December 31, 2016, retains their
immunity, provided that they remain in compliance with the
requirements of the CLRRA. (Health & Saf. Code Secs. 25395.109,
25395.110.)
This bill extends the above repeal date to January 1, 2027.
This bill additionally extends the operative date of the
provision that provides for continuing qualified immunity to
January 1, 2027.
COMMENT
1.Stated need for the bill
According to the author,
Brownfields, or contaminated land, remain a significant
problem nationwide. These properties contain potentially
hazardous substances, where clean-up costs can be expensive.
Additionally, buyers of brownfield sites may be liable for
contamination they had no role in. The cost and risk tied to
these sites deter redevelopment and contribute to urban
blight. In California, the Department of Toxic Substances
Control (DTSC) states that there are "an estimated 90,000
properties throughout the State - including former industrial
properties, school sites, military bases, small businesses and
landfills."
To solve this dilemma, California enacted the Land Reuse &
Revitalization Act of 2004. The act provides immunity from
liability to innocent landowners, purchasers and the owners of
adjacent properties. To take advantage of this benefit,
qualifying individuals must enter into an agreement with the
state to conduct a site assessment and clean-up the property
safely.
The CLRRA will become inoperative, or "sunset," on January 1,
2017. After 11 years, the program has shown its usefulness -
it provides incentive to clean-up contaminated sites
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responsibly, it reduces environmental and health risks, while
adding economic value to polluted vacant properties. For
example, in 2008 a former pickle processing plant in Hayward
was converted into Eden Housing, a complex of 78 affordable
housing units. Continuation of the CLRRA is of utmost
importance to encourage non-polluting buyers to seek out
infill sites which they would not pursue without this
protection.
2.Effectiveness of the CLRRA
The California Land Reuse and Revitalization Act of 2004 (CLRRA)
provides eligible innocent landowners, bona fide purchasers, and
contiguous property owners with immunity from liability for
hazardous materials response costs and other damages, if certain
qualifying criteria are met. To receive that immunity, CLRRA
participants must, among other things, enter into an agreement
with an oversight agency that includes "the performance of a
site assessment, and, if the agency determines that a response
plan is necessary [to prevent or eliminate an unreasonable
risk], the preparation and implementation of a response plan."
(Health & Saf. Code Secs. 25395.92(a), 25395.96.) In exchange
for qualified immunity, these required actions -- generating a
site assessment plan, implementing and reporting on the plan,
and undertaking response actions -- result in at least a partial
cleanup of the property, resulting in the redevelopment and
reuse of otherwise idle brownfield sites.
When the CLRRA was enacted in 2004, it contained a five-year
sunset provision to allow the Legislature to review the program
and determine whether it has been an effective tool for
revitalizing polluted sites. SB 143 (Cedillo, Ch. 167, Stats.
2009) extended that sunset provision a further seven years and
added a post-repeal provision that allowed program participants
to retain their immunity if they continue to comply with all
program requirements, including any response plans entered into
with an oversight agency. (See Health & Saf. Code Sec.
25395.110.) While it does not appear that any comprehensive
evaluation of CLRRA's effectiveness has been undertaken, several
stakeholders in support of this bill describe redevelopment
projects that would not have been possible without the act. For
example, the City of Chula Vista writes:
A local developer working in the City of Chula Vista was the
first in San Diego County to effectively use CLRRA to take
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ownership of a former aerospace manufacturing facility. . . .
Without CLRRA this development would not have been possible
and the land would have remained a vacant blighted parcel
within the City of Chula Vista. Upon build-out the entire
development is estimated to contribute [$] 1.3 [billion] in
revenue to the San Diego region.
Similarly, the City of Carson writes:
Brownfields remain a significant problem nationwide, and
especially in the City of Carson. Carson has a long history
of dealing with contaminated soil of all types. Currently the
City's Reclamation Authority is working on developing a
157-acre former landfill site, which it now owns, into a
regional shopping destination. The remediation itself is over
$150 million, much of which was funded by the City's former
Redevelopment Agency (RDA); however, the liability issues
associated with the contamination have historically made it
difficult to attract quality developers to the site, which is
crucial for the economic vitality of the City. CLRRA will
make it more likely a quality developer will sign up for the
vertical development of the site.
This bill would extend CLRRA's sunset date 10 additional years
to January 1, 2027, thereby providing the Legislature additional
time to evaluate the act's efficacy.
Support : Bay Area Council; Brown & Winters; California
Association for Local Economic Development; California Business
Properties Association; California Council for Environmental and
Economic Balance; California Infill Builders; California Main
Street Alliance; Center for Creative Land Recycling; City of
Carson; City of Chula Vista; City of Redding; Civil Justice
Association of California; League of California Cities; Los
Angeles Neighborhood Land Trust
Opposition : None Known
HISTORY
Source : California Association for Local Economic Development
Related Pending Legislation : None Known
Prior Legislation :
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SB 143 (Cedillo, Ch. 167, Stats. 2009) extended the sunset date
for the California Land Reuse and Revitalization Act of 2004
(CLRRA) from January 1, 2010, to January 1, 2017, and made
corresponding changes to a provision that provides for continued
immunity after the repeal of the Act. This bill also authorized
a prospective purchaser who qualifies as a bona fide purchaser
to enter into a contract to acquire a site, but prohibited the
prospective purchaser from receiving immunity under the act
until the prospective purchaser acquired the site.
SB 989 (Committee on Environmental Quality, Ch. 510, Stats.
2006) created a program for bona fide ground tenants, as
defined, to purchase contaminated property subject to certain
immunities from suit for damages related to prior contamination
of the property, similar to the program made available to bona
fide purchasers under CLRRA.
AB 2144 (Montanez, Ch. 562, Stats. 2006), among other things,
revised the public participation procedures required in a
response plan, under the CLRRA, for agencies with oversight over
the clean-up of certain brownfield sites.
AB 389 (Montanez, Ch. 705, Stats. 2004), created the California
Land Reuse and Revitalization Act of 2004 (CLRRA).
SB 493 (Cedillo, 2004) would have enacted the California Land
Reuse and Revitalization Act. This bill died in the Assembly
Appropriations Committee.
Prior Vote : Senate Environmental Quality Committee (Ayes 6,
Noes 0)
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