BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 820


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          Date of Hearing:   June 21, 2016




                           ASSEMBLY COMMITTEE ON JUDICIARY
                                  Mark Stone, 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


          KEY ISSUE:  Should the sunset date for the California land REUse  
          and Revitalization Act be extended until January 1, 2027, and  
          should an immunity provision in the existing act be changed  
          accordingly? 


                                      SYNOPSIS


          This bill extends the sunset date for the California Land Reuse  
          and Revitalization Act (CLRRA) from January 1, 2017, to January  
          1, 2027, and makes a corresponding change in the operative date  
          of a limited immunity provision.  CLRRA was originally enacted  
          in 2004 to provide greater incentives to clean up and develop  
          "brownfields," the term used to describe properties that remain  
          unused and undeveloped because of actual or potential hazardous  








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          waste contamination.  Because the costs and potential  
          liabilities associated with cleaning up and developing such  
          properties act as a barrier to revitalization and development of  
          these parcels, CLRRA creates incentives for development by  
          providing innocent landowners or bona fide purchasers - that is,  
          owners who did not cause the condition or only acquired the  
          property later - with immunity from liability for certain agency  
          response costs or other damages caused by a release of hazardous  
          materials.  To qualify for this immunity the bona purchaser or  
          innocent owner must meet certain conditions, including entering  
          into an agreement with an oversight agency, fully cooperating  
          with the agency, and performing other actions related to the  
          cleanup effort.  By most accounts, CLRRA has been fairly  
          successful in cleaning up and developing otherwise contaminated  
          and idle properties.  However, CLRRA is due to sunset on January  
          1, 2017.  This bill will extend the sunset to January 1, 2027,  
          and make a corresponding change that allows, as does existing  
          law, a qualified bona fide purchaser or innocent owner to  
          continue enjoying immunity after the expiration of CLRRA, so  
          long as he or she continues to comply with its requirements and  
          conditions.  The bill is supported by several California cities  
          and associations representing a range of builders, developers,  
          and business property owners.  There is no opposition to this  
          bill. 


          SUMMARY:  Extends the sunset date for the California Land Reuse  
          and Revitalization Act (CLRRA) until January 1, 2027, and makes  
          a conforming change to provide that a person who qualifies for  
          immunity under the act before January 1, 2027, continues to have  
          that immunity on and after January 1, 2027, if the person  
          continues to be in compliance with the requirements of CLRRA.   


          EXISTING LAW:   


          1) Establishes, under the federal Comprehensive Environmental  
             Cleanup, Response and Liability Act, also known as the  








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             "Superfund," programs that authorize public agencies to order  
             owners of contaminated property to conduct cleanups of these  
             properties, generally with public oversight, cooperation, and  
             assistance.  (42 U.S.C. Section 9601 et seq.)
          2) Provides, under CLRRA, a qualified bona fide purchaser,  
             innocent landowner, or contiguous property owner who did not  
             cause the hazardous material contamination on the subject  
             property with immunity from liability for agency response  
             costs or any other damages caused by the contamination.  In  
             order to qualify for the immunity, the bona fide purchaser,  
             innocent landowner, or contiguous property owner must perform  
             a number of specified tasks related to the cleanup,  
             including, among other things, entering into an agreement  
             with an oversight agency and providing full cooperation,  
             assistance, and access to the agency or person authorized to  
             conduct the cleanup response action.  However, the bona fide  
             purchaser, innocent landowner, or contiguous property owner  
             is not immune from liability for his or her own wrongful  
             acts, permit violations, or new releases of hazardous  
             materials that are caused by the bona fide purchaser,  
             innocent landowner, or contiguous property owner.  (Health &  
             Safety Code Section 25395.60 et seq., especially Sections  
             25395.80-25395.92.) 


          FISCAL EFFECT:  As currently in print this bill is keyed fiscal.  



          COMMENTS:  The California Land Reuse and Revitalization Act  
          (CLRRA) was enacted in 2004 to promote the cleanup and  
          development of so-called "brownfields" - that is, properties  
          that remain idle, unused, and undeveloped because of actual or  
          potential hazardous material contamination.  According to most  
          informed observers, one of the primary reasons that these  
          properties remain idle and undeveloped is due to the costs and  
          potential liabilities associated with cleaning up and developing  
          such properties.  CLRRA, therefore, created incentives for  
          development by granting bona fide purchasers or innocent  








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          landowners with immunity from liability for claims for certain  
          response costs or other damages caused by a release of hazardous  
          materials.  To qualify for this immunity the bona purchaser or  
          innocent owner must meet certain conditions, including entering  
          into an agreement with an oversight agency, fully cooperating  
          with the agency in all phases and aspects of the cleanup  
          project, and performing any other actions required by the  
          agreement.  Existing law also provides that any owner who  
          qualified for this immunity before the CLRRA expiration -  
          January 1, 2017, under existing law - would continue to enjoy  
          that immunity after the expiration date so long as the qualified  
          owner continued to comply with all of the requirements of CLRRA.  
           


          As the several letters of support for this bill attest, CLRRA  
          has allowed many cities in California to partner with private  
          developers to turn once idle and blighted parcels into new  
          development projects that no longer pose a threat to public  
          safety and contribute billions of dollars of revenue to local  
          governments statewide.  In order to keep reaping these benefits,  
          this bill would extend the current sunset date for CLRRA from  
          January 1, 2017, to January 1, 2027.  It would make a  
          corresponding change in the continuing immunity provision, so  
          that owners who qualified for immunity before January 1, 2027,  
          would continue to have immunity after that date for a continuing  
          project, so long as they continue to comply with the  
          requirements of CLRRA.  It is important to stress that neither  
          existing law, nor this bill, provides immunity for owners who  
          commit criminal acts, violate permit restrictions, or cause new  
          releases of hazardous materials. 


          If the program is so successful, why not remove rather than  
          extend the sunset?  Historically, this committee has taken the  
          position that sunsets should not be repeatedly extended.  A  
          sunset is generally added to a legislatively-mandated program so  
          that any consequences of the program - especially unintended  
          consequences - may be re-evaluated by the Legislature after a  








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          certain period of time.  If it turns out that the legislation  
          fails to address the problem or leads to unwanted results, then  
          the legislation is allowed to expire by the terms of the sunset  
          clause.  If it turns out that the legislation successfully  
          addressed the problem, then the sunset clause is deleted and the  
          legislation becomes permanent.  As originally introduced, this  
          bill proposed to remove the sunset and make CLRRA permanent.   
          However, the bill was amended to extend rather than delete the  
          sunset in the Senate Environmental Quality Committee.  The  
          committee analysis described its reasoning as follows:


               Remove or extend the Sunset?  There are many virtues to  
               legislative program sunsets, including the opportunity  
               for the Legislature to revisit the performance and value  
               of such programs.  To date, there is only a limited  
               basis for evaluating the performance of CLRRA and most  
               of the projects have been completed in the last year or  
               so.  The long-term consequences of CLRRA, especially  
               with regard to the state's potential liability for  
               chemical contamination, suggest that it is prudent to  
               periodically review the success of these remediation  
               projects. 


          ARGUMENTS IN SUPPORT:  According to the author, since "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  
          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."  Several  
          associations representing builders and developers support this  
          bill for substantially the same reasons.  These arguments are  
          reinforced by letters of support from several California cities  
          describing specific examples of successful brownfield cleanup  
          projects in their respective communities. 








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          REGISTERED SUPPORT / OPPOSITION:

          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








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          League of California Cities


          Los Angeles Neighborhood Land Trust

          Opposition

          None on file 



          Analysis Prepared by:Thomas Clark / JUD. / (916)  
          319-2334