BILL ANALYSIS
SB 493
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Byron D. Sher, Chairman
2003-2004 Regular Session
BILL NO: SB 493
AUTHOR: Cedillo
AMENDED: March 24, 2003
FISCAL: Yes HEARING DATE: April 28, 2003
URGENCY: No CONSULTANT: Kip Lipper
SUBJECT : CONTAMINATED PROPERTIES: IMMUNITIES FROM
LIABILITY
SUMMARY :
[NOTE:
a) Portions of this analysis are taken from the April 22,
2003 Senate Judiciary Analysis of this measure.
b) At the time this analysis was prepared, the amendments
accepted by the author in the Senate Judiciary Committee
were not available to committee staff for review.
Therefore, the bill is analyzed in the latest amended
form. ]
Existing law under both federal and state law, establishes an
extensive and complex series of programs that authorize public
agencies to order owners of contaminated property to carry out
cleanup actions on those properties. These laws and programs
are as follows:
1)The Comprehensive Environmental Cleanup, Response and
Liability Act [CERCLA 42 U.S.C. 9601 et. seq.] (Commonly
referred to as the federal Superfund Law) which does the
following:
a) Imposes strict joint and several liability on
"responsible parties" (i.e. current and previous owners
and operators of contaminated properties, as well as
parties who caused or contributed to contamination on the
property) for the cost of clean up of hazardous materials
released on a site.
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[Strict joint and several liability means that all parties
are potentially liable for the entire amount of the
cleanup without regard to fault. If one party finds
itself paying more than its fair share of the total
liability, that party may bring a "contribution action"
to seek to collect against other responsible parties, but
may still be held liable for the total amount.]
b) Under the Small Business Liability Relief and
Brownfields Revitalization Act (Pub. L. No. 107-118,
enacted January 2002, which amended CERCLA) ) establishes
an affirmative defense from cleanup liability for
so-called "innocent purchasers" (IP's) of property if the
following conditions are met:
i) The release of hazardous substance was caused
solely by an act or omission of a third party other
than an employee or agent of the person;
ii) The person exercised due care with respect to
the hazardous substance in light of all relevant facts
and circumstances;
iii) The person took precautions against
forseeable acts or omissions of the third party and the
consequences that could forseeably result from that
party's acts or omissions. [42 USC 9607(b)(3).]
c) Also under that Act establishes an affirmative defense
against liability for cleanup costs for a "bona fide
prospective purchaser" (BFP) whose potential liability
for a release or threatened release is based solely on
the purchaser's ownership or operation of a site [42 USC
9601(40)].
To qualify as a BFP, all of the following conditions must
be met:
i) All disposal of hazardous substances at the site
must have occurred before the person acquired the
facility.
ii) The person must have made all appropriate
inquiries into the previous ownership and uses of the
site in accordance with generally accepted good
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commercial and customary standards and practices.
iii) The person must provide all legally required
notices with respect to the hazardous substances at the
site.
iv) The person must exercise appropriate care
with respect to hazardous materials found at the site.
v) The person must comply with, and not impede, any
ongoing clean-up efforts at the site;
vi) The person must comply with any requests for
information by the government
vii) the person is not affiliated with any other
potentially liable person. [42 U.S.C 9601 (40)].
d) Provides that if the federal government incurs
clean-up costs at a site where the owner qualifies as a
BFP, the federal government shall have a lien on the
property for the increase in the fair market value of the
property resulting from the clean up. [This lien, called
a "windfall lien," remains in place until satisfied by
sale of the property or other means but not foreclosure.]
[42 USC 9607(r).]
e) Establishes an affirmative defense against cleanup
liability for responsible parties who own real property
that is contiguous to and is contaminated by release on a
site not owned by the party if the party meets all of the
following conditions:
i) It did not cause, contribute, or consent to the
release.
ii) At the time of purchase it conducted
appropriate inquiry into the site and did not know or
have reason to know the property was or could be
contaminated from another site.
iii) It is not affiliated with any other
potentially liable person.
iv) It takes reasonable steps to stop further
releases
v) It complies and cooperates with clean-up efforts.
vi) It complies with any governmental requests
for information
vii) It provides all legally required notices.
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f) Appropriates $1 billion for cleanup of contaminated
"Brownfields" properties.
2)Chapter 6.8 (Commencing with Section 25300) of the Health
and Safety Code, the Carpenter-Presley-Tanner Hazardous
Substance Account Act (commonly referred to as the State
Superfund program) which is administered by the Department
of Toxic Substances Control (DTSC) and which does all of the
following:
a) Defines "responsible party" in the same manner as
those terms are defined under the federal CERCLA statutes
and authorizes the department to bring actions for the
cleanup of contaminated properties pursuant to the
federal CERCLA.
b) In addition to bringing actions under the CERCLA
scheme, authorizes DTSC to bring cleanup actions pursuant
to state law and establishes requirements for the
department to apportion liability for cleanup costs among
responsible parties for each party's share of cleanup
costs.
c) Authorizes DTSC to enter into prospective purchaser
agreements and "covenants not to sue" under which, in
exchange for the cleanup of a property, the department
agrees not to sue the purchaser or owner of the property
for additional cleanup and associated costs.
d) Establishes an affirmative defense for innocent
purchasers of property identical to that provided under
CERCLA by cross-referencing the applicable provision of
federal law.
e) Provides that a property owner is not liable for
releases affecting soil or groundwater if specified
conditions are met, and authorizes DTSC to negotiate
settlements with de minimus responsible parties and
provides protections for those parties from third party
actions.
3)Division 7 (Commencing with Section 13000) of the Water Code
(commonly referred to as the Porter-Cologne Water Quality
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Control Act) which authorizes the State Water Resources
Control Board (SWRCB) and regional water quality control
boards (RWQCB's) to issue orders to cleanup or abate
"waste" (i.e. pollutant) discharges from persons discharging
those wastes that cause, or threaten to cause, water
pollution, nuisance, or contamination.
4)Article 12.5 (commencing with Section 33459) of the Health
and Safety Code (commonly known as the Polanco Redevelopment
Act) which does all of the following:
a) Authorizes redevelopment agencies to order the
investigation and cleanup of property in redevelopment
zones and provides that if a property owner refuses to
comply with such an order, the redevelopment agency, or a
person who has an agreement with the redevelopment agency
to redevelop the property, may carry out the
investigation and cleanup of any release of contamination
on the property.
b) Requires that a cleanup must be overseen either by
DTSC or a regional water board and provides that once the
cleanup is completed and certified by the oversight
agency, the redevelopment agency or the person who has an
agreement to redevelop the property, is not liable under
any state or local cleanup law for the cleaned up
release.
c) Creates an extensive set of exceptions from the
release of liability described in (b) for specified
releases of contamination, specified responsible parties,
and persons who engaged in fraud, negligence or
misrepresentation related to the property.
d) Provides that the release from liability does not
impair any cause of action against any party other than
the party subject to the release from liability, and
specifies that it does not affect third party causes of
action or federal superfund liability.
5)Chapter 6.10 (commencing with Section 25401), the California
Land Environmental Restoration and Reuse Act (commonly
referred to as the Escutia Law) which does the following:
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a) Defines "property" subject to the act to be land and
associated structures of less than five acres and that
meets an extensive set of other criteria.
b) Establishes a process by which local government
agencies may determine whether properties that are within
their jurisdictions are impaired by hazardous material
contamination and, if they are contaminated, procedures
that must be followed to address that contamination. The
program allows local agencies to compel property owners
to assess and cleanup the conditions of their property,
or to assess and cleanup the property themselves.
c) Similar to the Polanco Redevelopment Act, requires all
assessments and cleanup activities to be done under the
oversight of the DTSC, a Regional Water Board, or, under
limited circumstances, a local regulatory agency and
provides that once the cleanup is completed and certified
by the oversight agency, the local agency, a person who
has an agreement with the agency to cleanup or develop
the property, and other specified persons are not liable
under any state or local cleanup law for the cleaned up
release.
d) Also similar to the Polanco Act, creates an extensive
set of exceptions from the release of liability described
in (c) for specified releases of contamination, specified
responsible parties, and persons who engaged in fraud,
negligence or misrepresentation related to the property.
e) Also similar to the Polanco Act, provides that the
release from liability does not impair any cause of
action against any party other than the party subject to
the release from liability, and specifies that it does
not affect third party causes of action or federal
superfund liability.
6)Chapter 6.65 (commencing with Section 25260) of the Health
and Safety Code which establishes the Unified Agency Review
of Hazardous Substance Release Sites law (commonly referred
to as the "AB 2061" process) which does all of the
following:
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a) Authorizes a responsible party to request a single
state oversight agency for a hazardous substances
cleanup, and authorizes a committee within CAL-EPA to
determine who that lead agency for a cleanup should be -
DTSC, the regional board, a local agency, or the
Department of Fish and Game - using a set of statutory
guidelines.
b) Requires the designated agency to oversees the
cleanup and to enforce all applicable state and local
laws associated with the cleanup.
c) Upon completion of the cleanup, provides that no
agency other than the designated agency may take any
further action for cleanup of the release that was the
subject of the cleanup action unless one or more
specified conditions occur that compel the "reopening" of
the cleanup action (e.g. The responsible party
discontinues a groundwater cleanup program, a failure to
adequately fund an operations and maintenance
requirement, violation of a deed restriction, new facts
coming to light that show further cleanup is needed to
prevent a significant risk to human health or the
environment.).
7)Article 8.5 (commencing with Section 25395.10) of Chapter
6.8 of the Health and Safety Code, the Cleanup Loans and
Environmental Assistance to Neighborhoods (CLEAN) Program,
which does both of the following:
a) Provides low-interest loans of up to $100,000 to
conduct preliminary endangerment assessments for eligible
contaminated properties and provides that if
redevelopment of property is determined not to be
economically feasible up to 75 percent of the loan amount
can be waived.
b) Provides low-interest loans of up to $2.5 million for
the cleanup or removal of hazardous materials where
redevelopment is likely to have a beneficial impact on
the property values, economic viability and quality of
life of a community
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8)Article 8.7 (commencing with Section 25395.40) of Chapter
6.8 of the Health and Safety Code, the Financial Assurance
and Insurance for Redevelopment (FAIR) Program, which is
designed to lower property cleanup, sale, and redevelopment
costs through the provision of pre-negotiated and
standardized environmental insurance policies to stimulate
the cleanup and redevelopment of brownfields and other
environmentally impaired properties throughout the state.
The law also does the following:
a) Requires the Secretary of Cal/EPA to use a competitive
bidding process to select the insurance company or
companies that will provide the insurance products for a
three-year period.
b) Requires the products to be provided to be Pollution
Legal Liability Insurance to address unforeseen
conditions and third party liability for property damage
and personal injury, Cost Overrun Insurance to cover
costs of cleanups that are over and above cleanup cost
estimates, and Secured Creditor Insurance to cover loan
default or foreclosure that occurs due to pollution
conditions.
c) To the extent that funds are available, requires the
provision of subsidies to persons conducting response
actions at eligible properties who purchase the
pre-negotiated environmental insurance products of up to
50% of the cost of environmental insurance policy
premiums and up to 80% of the self-insured retention
amount of the cost overrun insurance policies
(essentially, the policy's "deductible," or the amount
that the person is obligated to pay before the insurance
policy pays), up to a maximum of $500,000.
This bill , notwithstanding any other provision of state law:
1)Provides that an innocent purchaser (IP), or a bona fide
prospective purchaser (BFP) of real property as defined in
specified sections of CERCLA is not liable under any state
or local law for any costs of response associated with a
release or threatened release of hazardous material at a
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site if the IP or BFP's liability is based solely on the
person's ownership or operation of the site.
2)Provides that a person who owns property contiguous to a
contaminated site who meets certain conditions specified
under CERCLA is not liable for clean-up costs associated
with hazardous material from a site not owned by that
person.
3)Provides that the immunity from liability for an IP, BFP, or
contiguous landowner described above does not apply if the
party impedes the performance of any clean-up or restoration
effort, nor does it exempt those parties from liability for
bodily injury or wrongful death.
4)Defines various terms used in the bill's provisions.
COMMENTS :
1)Purpose of Bill . This bill is sponsored by the California
Center for Land Recycling (CCLR), which writes that:
"At the heart of the problem with contaminated properties in
California are state laws that attach liability to any
current property owner, regardless of who was responsible
for the contamination. Under the "joint and several"
liability scheme, a new owner may be required to pay the
entire cost of the clean up, even if they did not actively
cause or contribute to the pollution in the soil or
groundwater. This reality has caused a widespread dampening
effect on real estate transactions involving properties that
raise any concern about potential environmental
contamination[.]"
The Home Ownership Advancement Foundation (HOAF) explains
that:
"The main fear of purchasers of contaminated property is that
despite their best efforts to identify property
contamination and make the site suitable for development,
costly ground water clean ups are a trap with no easy way
out . . . Under current law, an innocent purchaser faces
unknown liability in perpetuity for groundwater problems
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that are complex and costly."
The Job-Center Housing Coalition, an economic development
coalition formed by numerous business organizations
(including the Chamber of Commerce, the California Building
Industry Association (CBIA), and the California
Manufacturing and Technology Association (CMTA)), writes
that:
"SB 493 would help solve these challenges by encouraging
private investors to take dormant tracts of land and put
them back into productive use for new businesses, housing,
parks and other job-generating and community-enhancing
projects. The bill is modeled after a recently enacted
federal bill, which provided liability relief to small
business owners operating on, and potential investors of,
previously contaminated tracts of land[.]"
To achieve these goals, the bill would grant innocent
purchasers, prospective purchasers, and innocent contiguous
property owners with immunity from clean-up liability under
any state law for contamination for which they had no
responsibility. Immunity would also be conditioned on
various measures of due diligence and compliance with
environmental authorities before and after purchase. The
bill also explicitly specifies that its immunities do not
extend to personal injury or wrongful death claims.
2)Opponents State Bill Weakens Public Health and Environmental
Protections; Current Law Already Provides Mechanisms To
Address Cleanup Cost Concerns; Bill Shifts Cleanup Costs to
Government. Opponents, which include the Sierra Club and
the Planning and Conservation League (PCL) argue that it is
the threat of cleanup liability that allows agencies to
order clean ups and negotiate "prospective purchaser
agreements" (PPAs) and covenants not to sue (CNSs). [ PPAs
and CNS's are agreements between a prospective purchaser and
an environmental enforcement agency where the purchaser
agrees to clean the site to a standard set by the agency,
and in return the agency agrees not to sue the purchaser for
response costs.].
Opponents are concerned that without the threat of joint and
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several liability, state agencies will be unable to order
clean ups by current and prospective owners. Opponents of
the bill also argue that PPAs, particularly when combined
with other state programs encouraging clean up (such as
environmental loans and insurance), are an effective
clean-up tool.
Opponents also state that the bill "would immunize property
owners from liability by shifting costs on to the public
sector . . . in cases where contamination by the previous
owner causes imminent danger to public health and safety,
the state will have to step in to conduct a clean up with
public funds[.]
Finally, opponents contend that the bill does not, in fact,
conform to the federal law and definitions of IP and BFP.
(Several opponents (California League of Conservation Voters
and Consumer Attorneys of California) state that if the bill
were narrowed to reflect accurately the federal provisions,
they would remove their opposition and possibly support the
bill.)
3)Do Immunities From Cleanup Liability Result in Brownfields
Cleanup, Urban Revitalization? "Notwithstanding any other
provision of state law", this bill creates an immunity from
liability for cleanup costs for "innocent purchasers",
"bona fide prospective purchasers" and contiguous landowners
of property.
The Judiciary Committee Analysis makes the following cogent
point:
"While existing law generally makes past and current owners of
property jointly and severally liable for response costs,
the reality is that it is very rare for an innocent
purchaser to be held totally responsible for response costs.
Instead, agencies use the threat of liability to encourage
clean ups by existing owners and to force clean ups by
prospective purchasers. The fundamental point of dispute
between supporters and opponents of the bill is whether this
threatened liability is encouraging or discouraging the
clean up of contaminated sites." [emphasis added.]
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There is little empirical data or information that makes the
case for or against immunizing land owners from cleaning up
sites. The 2002 law passed by Congress is still being
interpreted by the US EPA in regulation and apparently has
not been widely used to date.
4)US EPA Recently Promulgated Interim Guidance on CERCLA
Affirmative Defenses . On March 6, 2003, the US EPA
issued a memorandum entitled "Interim Guidance
Regarding Criteria Landowners Must Meet for Bona Fide
Prospective Purchaser, Contiguous Property Owner, or
Innocent Landowner Limitations on CERCLA Liability."
The guidance document is intended for use by agency
personnel in implementing the law specifies obligations
parties must meet to become an IP, BFP, or contiguous
property owner under the statute. It states that the
guidance is interim in nature and that the agency may
revise it as it and the courts develop implementation
actions more fully.
An issue that arises with respect to this measure is that
the precise conditions a party must meet to obtain IP,
BFP, or contiguous landowner immunity are still in
flux, which may create implementation problems and
litigation over this measure.
5)Who Will Pay the Cost of Cleaning Up Sites if Purchasers
of Land are Immunized From Cleanup Liability? What
Cleanup Standards Will Be Used? This bill appears to
be premised on the notion that immunizing buyers and
contiguous property owners of contaminated property
from cleanup liability will result in abandoned and
under-utilized properties being purchased, cleaned up,
and re-used in a manner economically beneficial to the
surrounding community.
However, if the purchaser or owner of the property is
immune from liability and a polluted condition exists
in the first place, it's unclear who will clean up the
site, what incentive exists to clean it up, who will
pay the cleanup costs, and what standards would be used
to ensure the site is "clean" so it can be reused.
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Presumably, prior landowners or parties who caused the
pollution would have cleaned it up (or been ordered to
clean it up) if there was an economic or public benefit
to doing so. In theory, government agencies using
public funds could step in to clean these properties
up; but agencies generally do not have the funds to do
so, and its unclear if they should use public funds for
this purpose.
(It should be noted that there exists an "Orphan Share"
Trust Fund under current law which was established for
the express purpose of cleaning up sites like those
cited by the supporters of this measure. However, it
has never been funded adequately, and the business
community has strongly opposed funding it through
business fees or "polluter" fees.)
Should it choose to pass this measure, the committee may
wish to consider a sunset review of the bill's
provisions to determine whether or not it is widely
used, whether or not it results in the cleanup of
contaminated properties (particularly in urban
disadvantaged communities), and who ends up paying the
costs of cleanup to the extent it is done.
6)Several Supporters State Bill is "Urban Revitalization"
and Low and Moderate Income Housing Measure; Yet, It
Applies to Any Piece of Property, of Any Size, Used
For Any Purpose, Anywhere in State. Some of the
supporters of this bill state that the measure is
particularly important in efforts to clean up and
revitalize brownfields and other abandoned properties
in disadvantaged communities. Yet the immunity in the
bill applies to any property, anywhere, of any size.
In theory, this could mean that sophisticated buyers and
sellers could get together to exchange lands to take
advantage of the immunity in the bill for lands located
in wealthy communities to build facilities that have
little or no public benefit. It could also be used to
avoid liability at sites that are highly contaminated
and where the owner should be responsible for at least
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a portion of the cleanup costs.
[In contrast, current state "brownfield" laws generally
target efforts in urban, disadvantaged areas. For
example, Health and Safety Code Section 25395.20
defines "brownfield" as an abandoned urban site that is
not a superfund site and meets a long list of other
conditions. SB 32 (Escutia), which was sponsored by
the some of the same parties as this measure to clean
up brownfields, further limits the definition to sites
of 5 acres or less.]
7)Bill is Represented as State Version of CERCLA "Innocent
Purchaser Statutes," but Appears to Differ
Significantly from Federal Statute ; Inter-weaving of
State and Federal Law Creates Confusion, Ambiguity.
Some of the supporters of the bill have stated that it
is intended to enact into state law the federal
innocent purchaser and bona fide prospective purchaser
defenses. However, the bill differs from the federal
law in several significant ways, and in one case (see
(b) below) creates potential confusion by using the
federal definition:
a) Definition of "Applicable Statutes" (Page 2,
lines 10-18). CERCLA grants a defense to innocent
purchasers and bona fide prospective purchasers from
federal superfund cleanup liability. It was not
drafted to include other federal cleanup statutes
such as the federal Clean Water Act (33 U.S.C.
Section 1251 et. seq.), the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et. seq.),
the federal Toxic Substances Control Act (15 U.S.C.
Section 2601 et. seq.)
In contrast, this measure appears to create an
immunity from liability for a broad category of
state and local environmental laws including the
Porter-Cologne Water Quality Control Act, the
State's version of the federal Resource Conservation
and Recovery Act (Chapter 6.5 (commencing with
Section 25300) of the Health and Safety Code), state
and local underground tank cleanup laws, local
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nuisance abatement ordinances and others.
b) Bona Fide Prospective Purchaser (BFP) (Page 2,
line 19-21) : CERCLA establishes an affirmative
defense against cleanup liability for BFP's on and
after January 11, 2002. This measure appears to
mirror that provision, thereby potentially
conferring retroactive immunity on parties who may
already be under cleanup orders, and creating
confusion about the provision's effective date.
c) "Innocent Purchaser" (IP) Page 2, lines 22-25):
The bill's definition only partly cross-references
the analogous CERCLA provision. It does not pick
up the so-called "contractual relationship" and "all
appropriate inquiries" provisions of Section 101(35)
of the federal law. As a result, the bill's
definition may relieve a buyer of any duty to
investigate whether hazardous materials are present
on the site and to take actions to prevent such
contamination.
d) " Hazardous Material" (Page 3, lines 1 and 2):
CERCLA's affirmative defenses apply only to
contamination from "hazardous substances" which is a
more limited universe than the "hazardous materials"
definition in this bill, and which does not include
materials such as petroleum products, MTBE,
Perchlorate, asbestos, and sewage sludge.
e) "Response" (Page 3, lines 3-5): CERCLA's
affirmative defenses are limited to superfund
cleanup costs only, whereas the definition of
"response" under this measure appears to confer its
immunity on a much broader universe of response
and corrective actions, including RCRA corrective
actions on operating facilities, corrective actions
or closure orders at hazardous waste disposal
facilities, leaking underground tank cleanup orders
issued by local governments, and numerous others.
In addition, this definition may need clarification to
ensure that it does not inadvertently immunize a
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property owner for releases that occur after
purchasing the property.
f) Affirmative Defense v. Statutory Immunity :
CERCLA establishes an affirmative defense against
cleanup liability for IP's, BFP's, and contiguous
property owners, thereby placing the burden of
demonstrating that they have met the tests under
federal law on the parties. This measure appears to
create a statutory immunity, which would shift the
burden to public agencies to prove that the parties
do not meet the tests. [NOTE: The author agreed to
amend the bill to address this concern in the Senate
Judiciary Committee as the bill moved to this
committee; however, those amendments were not
received by the committee by the time this analysis
was published.]
g) Windfall Tax Lien : CERCLA provides public
agencies with the authority to impose a windfall tax
lien on properties that are cleaned up using public
funds or private funds other than those of the owner
of the property in order to protect against unjust
enrichment of the owner. This measure provides no
such lien. (NOTE: The author agreed to address this
issue, but the Committee has not seen language as of
the publication date of this analysis.)
h) Obligations for Due Diligence By Property Owner .
CERCLA, as well as state superfund law (Health and
Safety Code Section 25323.5 (b)) requires an
innocent purchaser to perform due diligence and
other duties on property in order to be designated
as an innocent purchaser and benefit from its
status. This measure is vague as to whether those
duties are imposed on parties subject to its
provisions.
In light of these concerns, the author and committee
may wish to consider codifying the federal law into
state law in order to create a clear and complete
state law scheme and adding those provisions needed
to ensure that the provision operates as an accurate
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analogue to the CERCLA provision.
8)Lender Liability Statutes Cited As Model For Bill; Yet,
Lender Liability Statute Differs in Several Significant
Aspects. The supporters of this measure cite the
so-called "lender liability" statutes (Chapter 6.96
(commencing with Section 25548) of the Health and
Safety Code) enacted by the Legislature in the
mid-1990's as a model for the immunities contained in
this bill. However, the lender liability statutes
differ in several respects from this proposal.
First, in contrast to this measure, the lender
liability statutes are a fully-contained body of
state law with it's own definitions and operative
provisions, and not a combination of
cross-references and new enactments.
Second, the lender liability statutes do not
enact immunities "notwithstanding any other
provision of law" as this measure would do.
Third, the statutes provide that the immunity
granted to lenders under its provisions are
effective only if the lender involvement is limited
to a security interest in the property and he or she
does not actively participate in the management of
the property. In contrast, an innocent purchaser or
owner of the property under this measure would
include a property owner who is actively involved in
the management of a contaminated property.
Fourth, the immunity under the lender liability
statutes expressly excludes cleanup liability if the
lender is a responsible party under CERCLA, the
lender operates or maintains an operation on the
property, the lender has any liability under Chapter
6.5 (commencing with Section 25100) of the Health
and Safety Code (State RCRA Program), there is an
imminent or substantial endangement on the property,
and several other circumstances.
Fifth, the lender liability statute contains a
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"severability" provision that renders it inoperative
if it is found to be inconsistent with federal law
or results in the loss of federal authorization for
a state program (such as the state RCRA program).
And sixth, the definition of "Hazardous
Materials" used in the lender liability statutes
cross-references a different section of law than
this measure.
1)Effect on Tools Used By State Cleanup Agencies to
Condition Future Use of Property Unclear . As noted in
the digest, current law allows agencies such as DTSC
and the state and regional water boards to "condition"
present and future land uses of contaminated properties
in a manner that allows certain uses to proceed while
ensuring other future uses would compel additional
cleanup. These tools (e.g. land use covenants,
operating maintenance agreements) are negotiated with
the owners of property and binding on those owners. It
is unclear how pre-existing covenants or agreements of
this sort would be enforceable against a party
immunized under the bill's provisions and what effect
that would have on the protection of public health and
the environment.
2)Effect on Local Nuisance Abatement Laws Unclear .
Several reviewers of this measure have expressed the
concern that the bill's provisions are so sweeping that
that they would affect a local government's ability to
abate a public nuisance from materials disposed on
property. The concern stems from the definitions of
"response" cited in comment (6)(e), and whether the
phrase "or a response action subject to other
applicable statute" would include an action by a local
agency to abate a nuisance.
3)Impact on Redevelopment Agency Cleanups Unclear.
Several laws, including the Polanco Redevelopment Act
and the California Land Environmental Restoration and
Reuse Act referenced in the digest above, authorize
local redevelopment agencies to take a variety of steps
to assess and clean a contaminated site and then seek
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those costs from previous and current owners, while
giving the prospective purchaser liability protections.
This bill's innocent purchaser provisions might impact
those efforts insofar as agencies seek costs from a
current owner who might otherwise qualify as innocent
purchasers under the bill.
SOURCE : California Center For Land Recycling
SUPPORT : American Farmland Trust, Anschutz Entertainment
Group, Bridge Housing, Burbank Housing
Development Corporation, California Bankers
Association, California Building Industry,
California Center for Land Recycling,
California Chamber of Commerce, California
Rural Legal Assistance Foundation, Californians
for Justice, City of East Palo Alto, City of
West Hollywood, Civil Justice Association of
California, East Palo Alto Community Alliance
and Neighborhood Development Organization,
Endangered Habitats League, FannieMae,
Job-Center Housing Coalition, Greenlining
Institute, Greenlining Coaliton, Home Ownership
Advancement Foundation, LTSC Community
Development Corporation, Latino Issues Forum,
Lenders for Community Development, Little
Hoover Commission, League of California Cities,
Livable Places, Mexican American Community
Services Agency, Inc. Mid-Peninsula Housing
Coalition, Olive Branches, Peninsula Habitat
for Humanity, Ralphs/Food4Less, Rural
Communities Housing Development Corporation,
Southern California Association of Non-Profit
Housing, The Spanish Speaking Unity Council
OPPOSITION : California Communities Against Toxics,
California League of California Voters,
Consumer Attorneys of California, Planning and
Conservation League, Sierra Club California