BILL ANALYSIS
SB 493
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Byron D. Sher, Chairman
2003-2004 Regular Session
BILL NO: SB 493
AUTHOR: Cedillo
AMENDED: January 5, 2004
FISCAL: Yes HEARING DATE: January 12,
2004
URGENCY: No CONSULTANT: Kip Lipper
SUBJECT : CONTAMINATED PROPERTIES: IMMUNITIES FROM
CLEANUP LIABILITY
SUMMARY :
[INTRODUCTORY NOTES: ]
a) This measure was heard before both the Senate
Judiciary and Environmental Quality Committees in an
earlier amended form last year. The newly amended
version of the bill affects some matters that are
properly within the expertise and jurisdiction of the
Judiciary Committee This analysis does not attempt to
review those matters in detail.
b) The author's staff, committee staff, proponents of the
bill, and other parties have held several lengthy
meetings this past week to address both policy and
technical concerns with the bill. At the time this
analysis is being written, the author's office and
sponsors are working to prepare amendments to respond to
a number of concerns raised in this analysis. However,
due to time constraints, this analysis is written on the
printed version of the bill.
c) Portions of this analysis are taken from the April 22,
2003 Senate Judiciary Analysis and the April 28, 2003
Environmental Quality Committee analysis of this measure.
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
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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.
[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 for cleanup, that party may bring a
"contribution action" 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 under
CERCLA only 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
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from that party's acts or omissions. [42 USC
9607(b)(3).]
c) Also under that Act establishes an affirmative
defense against liability for CERCLA 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 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)].
a) 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.]
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[42 USC 9607(r).]
b) 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.
c) Appropriates $1 billion for cleanup of contaminated
"Brownfields" properties.
1)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
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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.
2)Division 7 (Commencing with Section 13000) of the Water Code
(commonly referred to as the Porter-Cologne Water Quality
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.
3)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
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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.
4)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:
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.
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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.
5)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:
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.
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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.).
6)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
7)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:
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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 provide 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 :
1)Provides that innocent landowners, bona fide prospective
purchasers, and owners of properties contiguous with
contaminated sites are immune from cleanup liability imposed
by governmental agencies and from contribution actions
brought by non-governmental entities if they meet the
following conditions:
a) The party did not cause or contribute to the hazardous
substance release at issue.
b) The party has obtained written approval of a response
plan from DTSC, a RWQCB, local health agency, or CUPA and
substantially complies with the provisions of the
approved plan.
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2)Provides that a party is deemed to be out of substantial
compliance with the plan referenced above only when that
party has received written notice from the appropriate
agency of an unexcused or material failure to comply with
the plan.
3)Provides that any potentially responsible party that is
found to have committed fraud, intentional nondisclosure, or
misrepresentation to an agency with authority over cleanup
or remediation at the site is not entitled to immunity
against response costs imposed by that agency.
4)Provides that an agency may require parties subject to the
immunity to conduct a response action only if it has made
all reasonable attempts to compel all necessary response
actions from all other potentially responsible parties or
determines that there are no such viable parties, or unless
the conditions of the property pose an endangerment to human
health.
5)Provides that the bill's provisions do not affect:
a) The authority of state or local agencies to impose
conditions on the issuance of any discretionary permit.
b) The authority of any agency to conduct any response
action it determines necessary to contain or eliminate an
endangerment that requires action to protect public
health and safety or the environment.
c) The liability of a party for costs of corrective
action, closure and post-closure and similar requirements
under Chapter 6.5 (commencing with Section 25100) of the
Health and Safety Code (i.e. state non-RCRA
requirements).
d) The liability of a party for bodily injury or wrongful
death.
e) Any defenses against liability that may be available
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to parties under any other provision of state law.
6)Provides that the immunities and prohibitions granted by the
bill do not apply to any transfer of property concluded
before January 1, 2005.
7)Authorizes agencies to impose a lien against property owned
by a party subject to the immunities granted under the bill
to assure the repayment of any unrecovered response costs
incurred by the agency and specifies conditions under which
the lien may be imposed.
8)Authorizes any court of competent jurisdiction to require
non-governmental entities to pay reasonable attorneys' and
experts fees for parties who establish that they qualify for
the immunity granted under the bill where contribution
claims have been made by those non-governmental entities.
9)Defines various terms used in the bill's provisions and
makes findings and declarations and statements of
legislative intent relative to contaminated properties.
COMMENTS :
1)Purpose of Bill . This most recent version of SB 493 is
sponsored by the California Building Industry Association
and the Home Ownership Advancement Foundation (HOAF). In
its support for the bill, CBIA comments:
"Across California, communities today face the difficult
challenges of attracting jobs and employment, providing
housing at prices affordable to an expanding workforce,
maintaining sufficient local revenue sources to finance
necessary infrastructure, services and amenities, and
ensuring a high quality of life and environmental protection
to name but a few.
SB 493 would help solve these challenges by encouraging
private investors to take dormant tracts of land, often
called "brownfields," and put them back into productive use
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for new businesses, housing, parks and other job-generating
and community-enhancing projects. The bill accomplishes
this by addressing one of the biggest impediments to
brownfield redevelopment - uncertain liability issues.
But SB 493 brings fairness to the existing state liability
scheme and provides the tools necessary to turn
environmental challenges into economic and social triumphs
in communities across the state. In particular, the bill
reforms specific state laws to fairly assign liability for
clean-up costs to responsible parties. The bill imposes a
clear and up-front clean-up obligation for brownfield
investors - known as "prospective purchasers." As an
incentive for satisfactorily performing an approved
clean-up, these new purchasers and developers of the land
would be free from hidden or surprise costs, so long as they
have had nothing to do with any health-endangering
incidents.
HOAF explains:
"Our homebuilders have had real-life experience with the
problems that arise under California's current liability
scheme associated with the purchase and development of
contaminated properties. SB 493 will create multiple
societal benefits and incentives for homebuilders to invest
and take the liability risks associated with purchasing and
developing these properties. SB 493 only provides
protection to a purchaser who is in common terms innocent of
any wrongdoing, never contaminated the property and is crazy
enough to take on some of the cleanup responsibility in the
hope of realizing a return on their [sic] investment."
2)Opponents State Bill Weakens Public Health and Environmental
Protections Associated with Site Cleanups; Current Law
Already Provides Mechanisms To Address Cleanup Cost
Concerns; Bill Shifts Cleanup Costs to the Public .
Opponents, the California League of Conservation Voters, the
Sierra Club, and other environmental groups argue that it is
the very threat of cleanup liability against which this
measure creates immunities that allows public agencies to
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order clean ups and negotiate "prospective purchaser
agreements" (PPAs) and covenants not to sue (CNSs) to ensure
properties are put back into productive resue while
protecting public health and the environment. [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.].
The Sierra Club states:
"SB 493 would expand the liability exemptions that were so
carefully negotiated in federal law (CERCLA) to "all other
state or local law" thus immunizing parties responsible for
contaminating land, air, and water. In the past, this issue
was debated carefully, and rejected, because it opens the
liability door too wide. Letting polluters off the hook for
cleaning up contamination they caused, leaves local
communities holding the bag and having to absorb the costs
of expensive cleanups or alternatively, leaves these
communities with dangerous, abandoned polluted sites
indefinitely.
Opponent CLCV states:
"SB 493, if enacted, would be a jailbreak for landowners from
their responsibility to protect human health and the
environment from contaminants on their property. It would
have the effect of shifting costs for clean-up of
contaminated properties to public agencies that lack the
funds to do so.
?.there is little evidence to support the fundamental thesis
of this bill: that relieving landowners of liability will
lead to development of these properties. The barriers to
development of brownfield properties have been shown time
and again to consist of a complex matrix of factors. CLCV
believes SB 493 as currently drafted will cause harm to
public health and the environment without taking serious
steps to achieve its basic goal of development of these
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contaminated sites."
3)Current Bill's Amalgam of Federal CERCLA Affirmative Defense
Provisions, Prior Administration's Draft Brownfields
Proposal, and New Language Makes Bill Confusing to Read,
Potentially Difficult to Implement . The version of this
measure heard before this committee and the Judiciary
Committee last year was very loosely modeled on the federal
Small Business Liability Relief and Brownfields
Revitalization Act (Pub. L. No. 107-118, enacted January
2002, which amended CERCLA and which largely is still being
interpreted by US EPA in regulation and guidance).
The current version of this measure is an amalgam of that
federal law, portions of a draft bill posted on the CAL-EPA
website last summer as part of that agency's efforts to
respond to concerns about brownfields cleanups, and
modifications to the two drafted by the sponsors of the
bill. The sponsors state that the bill has been drafted in
this fashion to ensure that parties using its provisions
will also qualify for the federal defenses under CERCLA.
Yet, the bill, as currently drafted, has important differences
from the federal law and the CAL-EPA draft that greatly
increase the scope and effect of this measure as compared to
the other two. For example:
a) The federal CERCLA defenses are available only to
parties who own superfund sites; in contrast, this
measure applies to all contaminated properties other than
state and federal superfund sites (a much larger universe
of sites).
b) The CAL-EPA draft grants immunities to parties only if
they first clean up the property to a level that
protected public health and the environment; in contrast,
this draft establishes new and potentially less
protective standards for site cleanup.
(These issues are discussed more thoroughly elsewhere in
this analysis.)
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Moreover, in attempting to track the federal defenses, the
current draft of the bill sets up potentially confusing
and nonsensical definitions and operative provisions.
For example:
a) On page 6, line 5 the term "bona fide prospective
purchaser" is defined as someone who has bought property
as of January 1, 2005 and who meets specified criteria;
despite the terminology used, that person is not a
"prospective purchaser" but a new landowner. On lines 7
and 8, the bill provides that a party is a "bona fide
prospective purchaser" when they establish by a
preponderance of evidence that they have met those
criteria; yet, on page 9, lines 28-30, the bill provides
that the immunities available to a "bona fide prospective
purchaser" attached when a response plan is approved (but
not necessarily when the other criteria for a "bona fide
prospective purchaser" have been met.
These, and many other, complexities and ambiguities in the
bill, which appear largely to result from efforts to combine
and modify two fundamentally disparate proposals, appear to
make the bill confusing, excessively complicated, and
daunting to understand. The author and the committee may
wish to consider whether the bill should be substantially
amended and recast to address these concerns.
The sponsors and the author's office are aware of these
concerns and have indicated they will offer amendments to
clarify the bill where necessary.
4)Bill Establishes New, and Potentially Less Environmentally
Protective Standards for Cleanup of Brownfields . This
measure requires parties seeking immunity under its
provisions to perform a response action that addresses an
"existing and significant risk to human health" or "an
immediate response action to prevent serious environmental
damage. These standards differ from the standards
established under current law and regulation for remediation
of sites.
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Current law governing DTSC cleanups generally requires
cleanups to be performed to a level that removes significant
risk to public health and the environment, including those
risks that might occur over time. Put more simply, a
contaminated site slated for a housing development must be
cleaned up to reflect the intended land use and to ensure
that people living there are not exposed to contaminants
over time that could pose a health risk.
While it's not entirely clear what is meant by an "existing"
risk to human health in the bill's provisions, this bill
appears to require the health risk to be immediate (i.e.
"existing") and "significant" in order to trigger cleanup
obligations on the part of the property owner.
Second, cleanups conducted by the state and regional water
boards pursuant to the Porter-Cologne Water Quality Control
Act (Division 7 (commencing with Section 13000) of the Water
Code) generally are required to be conducted in a manner
that protects not only public health but also the
"beneficial uses" of groundwater and surface water,
including natural resources and water quality. The state
and regional water boards have adopted administrative
policies that allow for such cleanups to take into account
the actual risks to these resources and costs of cleanup.
However, there is no limitation in the law on the board's
authority to issue cleanup and abatement orders that require
the remediation of groundwater where there may be an adverse
effect on natural resources or water quality.
In contrast, this measure appears to require cleanup only to a
level that is necessary for an "immediate response" to
prevent "serious" environmental damage, a standard that is
less protective of environmental and natural resource values
than the current law.
The sponsors and author's office are aware of these issues and
indicate that they will offer amendments to clarify these
standards further. The sponsors do indicate that where
groundwater is polluted and there is potential harm to
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natural resources or "beneficial uses" of water, and where
the landowner did not cause or contribute to the pollution,
that landowner should not be held responsible for cleaning
up the pollution.
5)Bill May Limit Ability of Cleanup Agencies to Compel
Additional Cleanup Where New Contamination is Discovered or
Negligence Occurs . Under state hazardous substance cleanup
laws, state cleanup agencies generally are empowered to
"re-open" cleanup requirements against which those parties
are immunized if specified circumstances arise. These
conditions generally fall into the following categories:
a) Testing of the property shows the cleanup activities
didn't clean up the property.
b) Conditions imposed by a cleanup order are violated.
c) A new and previously unknown hazardous release is
discovered at the site.
d) A material change in facts known to the cleanup agency
at the time the order was issued leads the agency to
conclude the site needs further cleanup.
e) The cleanup agency was induced to issue a cleanup
determination through fraud, negligent or intentional
nondisclosure, or misrepresentation.
In contrast, this measure limits the ability of agencies
to overcome its immunities and require additional cleanup
only if one of the following occurs:
a) The agency has made "all reasonable attempts to compel
all potentially responsible parties" to cleanup the
contamination and the conditions at the site pose an
endangerment to human health.
b) The party engages in fraud, intentional nondisclosure,
or misrepresentation (but not negligence).
c) The party is in unexcused and material failure with an
approved response plan.
These limitations on re-opening cleanups raise several
questions:
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a) The requirement that an agency make all reasonable
attempts to compel all PRP's to cleanup contamination may
effectively preclude an agency from ever ordering any
further cleanup on a site, since it could take decades of
expensive litigation to meet this test. Moreover, the
fact that it must be met even if conditions at the site
pose an endangerment to human health appears to seriously
limit the ability of agencies to compel additional
cleanup where public health is threatened.
b) It is unclear why negligence was excluded from the
"fraud" re-opener in the bill.
a) It is unclear whether the conditions in other laws
whereby a new and previously unknown hazardous release is
discovered at the site or a material change in facts
known to the cleanup agency at the time the order was
issued leads the agency to conclude the site needs
further cleanup should be used in this context as well.
6)"Applicable Statutes" Definition May Immunize Landowners
From Laws Generally Used to Abate Public Nuisances, Not
Clean up Contaminated Sites . This measure immunizes parties
from cleanup actions undertaken pursuant to "applicable
statutes" as defined. The definition of "applicable
statutes" under the bill (page 5, lines 1-15) includes
traditional hazardous substance cleanup laws like the State
Superfund law (Chapter 6.8. (Commencing with Section 25300)
of the Health and Safety Code) and the Porter-Cologne Water
Quality Control Act, but also includes laws used by public
agencies to abate public nuisances. Proponents of the bill
state that nuisance law is commonly cited as the first cause
of action in any action brought to compel cleanup or seek
contribution. However, it is unclear if this provision
would prevent agencies from the more common use of these
provisions to compel landowners to maintain their
properties.
7)Bill's Findings Assert Contaminated Properties Create
Problems Like Urban Sprawl and Decaying Inner-City
Neighborhoods-Yet, Immunities Apply to Property Owners
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of Any Size Parcel located Anywhere in State, Other
Than State or Federal Superfund Sites . The findings and
statements of legislative intent in this measure (page
3, lines 25-30) assert that the problems sought to be
remedied by its provisions include urban sprawl,
decaying inner-city neighborhoods and schools and the
like. Yet, the definition of "sites" that are subject
to the bill's provisions include sites of any size in
any location in the state used for any purpose, other
than a state or federal superfund site.
The notion of providing incentives through immunities
against cleanup actions for parties in exchange for
encouraging affordable housing, urban redevelopment,
and infill development is a tradeoff that merits
consideration. However, it is conceivable that this
measure could provide immunities for development of
so-called "big box" stores, high income developments in
wealthy communities, and other developments that have
little to do with the stated purpose of the bill.
[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
some of the same parties as this measure to clean up
brownfields, further limits the definition to sites of
5 acres or less.]
The sponsor of the measure has indicated that it has yet
to see a definition of "site" that would include those
areas of communities that are in serious need of
revitalization, but that it is willing to keep an open
mind about the possibility of finding such a
definition.
8)Agencies To Which Bill Applies Could Include Those With
Little Experience and Expertise In Cleanups Who Have Not
Been Delegated Authority to Do Cleanups Under Law . Current
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law generally vests DTSC and the SWRCB and RWQCB's with
primary authority for cleaning up contaminated sites.
Current law also authorizes those agencies to delegate
certain types of cleanups to local agencies, CUPA's, and
other similar agencies. It is committee staff's
understanding that this delegation is rarely used, but that
they would be willing to delegate such authority to an
agency based on qualification to conduct/oversee cleanups.
The sponsors and the author's office have indicated that they
are willing to offer author's amendments to clarify that
"agency" means a state or regional water board or DTSC, or
an agency to which cleanup authority has been delegated by
one of those agencies or by law.
9)Immunity v. Affirmative Defense . This measure
establishes statutory immunities for parties that
comply with its conditions. In contrast, the federal
law on which, in part, it is based establishes
affirmative defenses against cleanup litigation brought
by public agencies and "contribution" actions brought
by parties also liable for contamination at a property.
The issues of immunities versus affirmative defenses
was reviewed extensively in the Judiciary Committee
last year, and is not within the jurisdiction of this
committee. However, there does seem to be a continuing
question over whether proof of compliance with the
conditions to qualify for the immunity in the bill
should be borne by the property owner (as with an
affirmative defense) or cleanup agencies and other
parties (as with an immunity).
The sponsors have indicated that the change in the bill
from an affirmative defense to an immunity is
intentional given the new obligations on landowners to
submit a response plan, establishing cleanup agency
oversight, and effectively ensuring that an agency has
signed off on that plan before the immunity attaches.
10) Attorneys' Fees-Reversal of American Rule . This
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measure contains a new provision authorizing a court to
award attorneys' and experts' fees to parties establishing
that they meet one or more of the innocent property owner
definitions in this bill and are sued for cleanup costs by,
or bring contribution actions against, other responsible
parties. As with the issue raised in the prior comment,
this issue is more properly considered before the Judiciary
Committee. However, opponents to the bill in this committee
have noted that this provision reverses the so-called
"American Rule" whereby parties pay their own costs, and
could have a significant chilling effect on certain types of
litigation.
The author's office and the sponsors have indicated a
willingness to review this issue in committee and offer
amendments as needed.
11)Who Will Pay the Cost of Cleaning Up Sites if
Purchasers of Land are Immunized From Full Cleanup
Liability ? As with the earlier versions of this
measure, and with the federal CERCLA provisions, this
bill is premised on the notion that immunizing
innocent purchasers, landowners, 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.
In the case of the federal law, the Congress appropriated
$1 billion in conjunction with its passage of the
brownfields defenses act in order to ensure that any
residual contamination not cleaned up by property
owners would nonetheless be cleaned up by the
government.
The sponsors of this measure state that the environmental
and societal benefit of partially cleaning these
properties and returning them to productive use is
preferable to leaving them in their current abandoned
state where pollution sits on the site. Moreover, the
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proponents feel that if the site is cleaned up to the
level that public health is protected and there is no
immediate endangerment to the environment, any
residual pollution should be cleaned up by the parties
that actually caused or contributed to the pollution.
The question remains, however, that if there is no
responsible party to clean up the site fully under
this measure, and contamination remains at the site,
who will pay for the costs of cleanup.
SOURCE: California Building Industry Association (CBIA)
and Home Ownership Advancement Foundation
SUPPORT: Bay Area Council, California Association of
Realtors, California Chamber of Commerce, Civil
Justice Association of California, Home
Builders Association of the Central Coast,
Greater Riverside Chambers of Commerce, The
Towbes Group, Inc.
[Written to Former Version Of Bill]
American Farmland Trust, Anschutz Entertainment Group, Bridge
Housing, Burbank Housing Development
Corporation, California Bankers Association,
California Building Industry Association,
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
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Hoover Commission, 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 Environmental Rights Alliance,
California League of Conservation Voters,
California Communities Against Toxics,
California Safe Schools, Center for
Environmental Health, Community Coalition for
Change, Consumer Attorneys of California, Del
Amo Action Committee, Desert Citizens Against
Pollution, Environmental Working Group, Health
the Bay, Marin-Goldengate Learning Disability
Coalition, Physicians For Social
Responsibility, Planning and Conservation
League, Sierra Club California
[Written to Former version of bill]
California Communities Against Toxics,
California League of California Voters, Center
for Environmental Health, Consumer Attorneys of
California, Planning and Conservation League,
Sierra Club California