BILL ANALYSIS Ó SB 820 Page 1 Date of Hearing: June 14, 2016 ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS Luis Alejo, Chair SB 820 (Hertzberg) - As Amended April 12, 2016 PROPOSED CONSENT SENATE VOTE: 38-0 SUBJECT: Hazardous materials: California Land Reuse and Revitalization Act of 2004 SUMMARY: Extends the sunset on the California Land Reuse and Revitalization Act (Act). Specifically, this bill: 1) Extends, from January 1, 2017, to January 1, 2027, the sunset on the Act. 2) Extends, from January 1, 2017, to January 1, 2027, the sunset on the qualification for immunity under the Act. EXISTING LAW: 1) Establishes the Act to cleanup and reuse hazardous SB 820 Page 2 material contaminated sites in a manner protective of public health and safety and the environment, and to encourage the development and redevelopment of unused or underused properties in urban areas. (Health & Safety Code (H&S) § 25395.61, et seq.) 2) Sunsets the Act on January 1, 2017. (H&S § 25395.109) 3) Provides immunity from response costs or other relief associated with the release or threatened release of a hazardous material at a site for a bona fide ground tenant. (H&S § 25395.104) 4) Authorizes a person who, before January 1, 2017, qualifies for immunity to continue to have that immunity on and after January 1, 2017, if the person continues to be in compliance with the requirements of the Act. (H&S § 25395.110) FISCAL EFFECT: According to the Senate Appropriations Committee, the impact of this bill is unknown, but would likely result in $50,000 in special funds for the Department of Toxic Substance Control (DTSC) oversight of clean-up projects and minor costs for the State Water Resources Control Board. These costs could be reimbursed through a fee-for-service agreement. COMMENTS: Need for the bill: According to the author, "[s]ince buyers of brownfield sites may be liable for contamination they had no role in, these hazardous sites can sit dormant for years and decades. This not only contributes to urban blight, but poses several environmental and health risks for surrounding SB 820 Page 3 communities. By extending [the Act], SB 820 preserves a great tool for transforming polluted properties to become productive uses of space adding economic value to blighted communities while reducing environmental and health risks." Brownfield cleanup: Brownfields remain a continuing problem in California and nationwide. Those properties represent abandoned, idled, or under-used sites formerly utilized for industrial or commercial purposes, resulting in perceived or actual contamination that deters redevelopment of the site. As cleanup costs can be expensive, especially when uncovering unexpected hazardous materials during the cleaning of the site, many of the sites remain vacant for many years. According to DTSC, there are an estimated 90,000 properties throughout the state that remain vacant or underutilized due to real or perceived environmental contamination. According to the Center for Creative Land Recycling, there are approximately 2,355 hazardous properties throughout the State that could benefit from the extension provided in this bill. 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 sites promotes economic development and reinvestment in California through post-cleanup development and sustainable reuse. SB 820 Page 4 California Land Reuse and Revitalization Act of 2004 (Act): The intent of the Act was stated as follows "The underutilization of brownfield sites in the state results in environmental, social, and economic detriments to the state and its citizens. The estimated 120,000 brownfield sites in California represent an opportunity for the development of housing, parks and mixed use developments." The Act provides liability protections to bona fide purchasers, innocent landowners and contiguous property owners, which are intended to promote the cleanup and redevelopment of blighted contaminated properties. The Act establishes a process for eligible property owners to obtain the statutory immunities, conduct a site assessment, and implement a response action, if necessary, to ensure that the property is ready for reuse. The sunset date for the enacting legislation, AB 389 (Montanez, Chapter 705, Statutes of 2004), was 2010. In 2010, SB 143 (Cedillo, Chapter 167, Statutes of 2009) extended the sunset to January 1, 2017. Immunity: SB 143 authorized a prospective purchaser who is in contract to acquire a site and who qualifies as a bona fide purchaser to enter into an agreement, which provides the qualified bona fide prospective purchaser with immunity upon site acquisition. Traditionally, federal and state law provided that both current and previous owners of a property are potentially liable for the cost of cleanup of hazardous materials released on the property. In 2002, federal law was modified to grant conditional immunity to innocent and prospective purchasers and to innocent contiguous property owners for previously occurring contamination for which the innocent or prospective purchaser SB 820 Page 5 had no responsibility. In 2004, California enacted the Act, providing qualified immunity to innocent landowners, bona fide purchasers, and contiguous property owners who did not cause or contribute to a release of contaminants. To take advantage of the provided immunity, qualifying individuals must enter into an agreement with an oversight agency that would require the individual to undertake various tasks relating to cleanup of the hazardous materials on the property. Without a legislative sunset extension, the program will expire on January 1, 2017. Arguments in support: According to the Civil Justice Association of California, "In order to be eligible for liability protection, the purchaser or landowner must agree to a site assessment and, if necessary, prepare and submit a response plan. The [Act] provides immunity from liability to purchasers or landowners for costs or damages associated with contamination characterized in the site assessment or response plan." REGISTERED SUPPORT / OPPOSITION: Support Bay Area Council Brown & Winters SB 820 Page 6 California Association for Local Economic Development California Building Industry Association California Business Properties Association California Council for Environmental & 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 SB 820 Page 7 Pacoima Beautiful Opposition None on file. Analysis Prepared by:Paige Brokaw / E.S. & T.M. / (916) 319-3965