The California Land Reuse and Revitalization Act of 2004 provides, among other things, that an innocent landowner, bona fide purchaser, or contiguous property owner, as defined, qualifies for immunity from liability from certain state statutory and common laws for pollution conditions caused by a release or threatened release of a hazardous material if specified conditions are met, including entering into an agreement for a specified site assessment and response plan. The act prohibits the Department of Toxic Substances Control, the State Water Resources Control Board, and a California regional water quality control board from requiring one of those persons to take a response action under certain state laws, except as specified. Existing law repeals the act on January 1, 2017. Existing law provides that a person who qualifies for immunity under the act before January 1, 2017, shall continue to have that immunity on and after January 1, 2017, if the person continues to be in compliance with the requirements of the former act.

This bill would extend the repeal date of the act to January 1, 2027, and would provide that a person who qualifies for immunity under the act before January 1, 2027, shall continue to have that immunity on and after January 1, 2027, if the person continues to be in compliance with the requirements of the former act.

The California Land Reuse and Revitalization Act of 2004 provides, among other things, that an innocent landowner, bona fide purchaser, or contiguous property owner, as defined, qualifies for immunity from liability from certain state statutory and common laws for pollution conditions caused by a release or threatened release of a hazardous material if specified conditions are met, including entering into an agreement for a specified site assessment and response plan. The act prohibits the Department of Toxic Substances Control, the State Water Resources Control Board, and a California regional water quality control board from requiring one of those persons to take a response action under certain state laws, except as specified. Existing law repeals the act on January 1, 2017. Existing law provides that a person who qualifies for immunity under the act before January 1, 2017, shall continue to have that immunity on and after January 1, 2017, if the person continues to be in compliance with the requirements of the former act.

This bill would extend the repeal date of the act to January 1, 2027, and would provide that a person who qualifies for immunity under the act before January 1, 2027, shall continue to have that immunity on and after January 1, 2027, if the person continues to be in compliance with the requirements of the former act.

The California Land Reuse and Revitalization Act of 2004 provides, among other things, that an innocent landowner, bona fide purchaser, or contiguous property owner, as defined, qualifies for immunity from liability from certain state statutory and common laws for pollution conditions caused by a release or threatened release of a hazardous material if specified conditions are met, including entering into an agreement for a specified site assessment and response plan. The act prohibits the Department of Toxic Substances Control, the State Water Resources Control Board, or a California regional water quality control board from requiring one of those persons to take a response action under certain state laws, except as specified. Existing law repeals the act on January 1, 2017. Existing law provides that a person who qualifies for immunity under the act before January 1, 2017, shall continue to have that immunity on and after January 1, 2017, if the person continues to be in compliance with the requirements of the former act.

This bill would extend the operation of the act indefinitely, repeal date of the act to January 1, 2027, and would make a conforming change. provide that a person who qualifies for immunity under the act before January 1, 2027, shall continue to have that immunity on and after January 1, 2027, if the person continues to be in compliance with the requirements of the former act.

The California Land Reuse and Revitalization Act of 2004 provides, among other things, that an innocent landowner, bona fide purchaser, or contiguous property owner, as defined, qualifies for immunity from liability from certain state statutory and common laws for pollution conditions caused by a release or threatened release of a hazardous material if specified conditions are met, including entering into an agreement for a specified site assessment and response plan. The act prohibits the Department of Toxic Substances Control, the State Water Resources Control Board, or a California regional water quality control board from requiring one of those persons to take a response action under certain state laws, except as specified. Existing law repeals the act on January 1, 2017.

This bill would extend the operation of the act indefinitely, and would make a conforming change.

Date of Hearing: June 29, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 820

Author:(Hertzberg) – As Amended Ver:April 12, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill extends the sunset date for the California Land Reuse and Revitalization Act of 2004 (CLRRA) to January 1, 2027, and makes corresponding changes to provide continued immunity after the repeal of CLRRA.

FISCAL EFFECT:

1. Unknown costs, likely in the $50,000 range, for the Department of Toxic Substance Control (DTSC) to provide oversight for clean-up (Toxic Substances Control Account).

1. Minor costs, absorbable costs for the State Water Resources Control Board (SWRCB)

DTSC and SWRCB costs are reimbursable through a fee-for-service agreement. According to DTSC, CLRRA sites represent a small fraction of their brownfield cleanup sites. DTSC currently oversees 24 active CLRRA sites and has 16 completed sites. Statewide DTSC typically has more than 1000 active cleanup projects, and currently has 280 active Voluntary Cleanup Program sites. Approximately 50 staff positions are assigned to these programs.

COMMENTS:

1. Purpose. According to the author, because buyers of brownfield sites may be liable for contamination for which they did not cause, these hazardous sites can sit dormant for decades. This not only contributes to urban blight, but poses several environmental and health risks for surrounding communities. By extending CLRRA, this bill extends a tool for transforming polluted properties into productive uses of space that add economic value to blighted communities while reducing environmental and health risks.
2. Background. CLRRA provides innocent landowners, buyers, or contiguous property owners with immunity from liability for damages due to hazardous materials if; a) they assess and clean up the property; b) they enter into an oversight agreement with DTSC and/or SWRCB; and c) the clean-up of the property meets or exceeds existing standards. This program will sunset in January 2017, although the immunity from liability from agreeemnts entered into before January 2017 will continue.

Brownfields are typically abandoned, idled, or underutilized sites, formerly used for industrial or commercial purposes, where perceived or actual contamination deters redevelopment. The costs associated with brownfield site clean-up can be prohibitively expensive for parties who purchase these properties, particularly when unexpected hazardous materials are encountered during site remediation. Consequently, many of these sites remain vacant for years.

The USEPA estimates that there are approximately 90,000 brownfields in California. The large number of brownfield sites and the unavailability of sufficient public resources to remediate these sites prevent California’s brownfields from being restored to productive use without significant participation by the private sector.

1. Prior Legislation. SB 143 (Cedillo, Chapter 167, Statutes of 2009) extended the sunset date for CLRRA from January 1, 2010 to January 1, 2017, and made corresponding changes to provide continued immunity after the repeal of CLRRA.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: June 21, 2016

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

SBPCA Bill Id:SB 820

Author:(Hertzberg) – As Amended Ver: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 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 "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 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 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.

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

League of California Cities

Los Angeles Neighborhood Land Trust

Opposition

None on file

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

Date of Hearing: June 14, 2016

ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS

Luis Alejo, Chair

SBPCA Bill Id:SB 820

Author:(Hertzberg) – As Amended Ver: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 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 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. 

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 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

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

Pacoima Beautiful

Opposition

None on file.

Analysis Prepared by: Paige Brokaw / E.S. & T.M. / (916) 319-3965

 THIRD READING  

Bill No: SB 820

Author:

:

Vote:

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-0, 4/6/16

AYES: Wieckowski, Gaines, Bates, Hill, Leno, Pavley

NO VOTE RECORDED: Jackson

SENATE JUDICIARY COMMITTEE: 7-0, 4/19/16

AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/9/16

AYES: Lara, Beall, Hill, McGuire, Mendoza, Nielsen

NO VOTE RECORDED: Bates

SUBJECT:

SOURCE: Author

DIGEST: This bill extends the sunset date for the California Land Reuse and Revitalization Act of 2004 (CLRRA) to January 1, 2027, and makes corresponding changes to a provision that provides for continued immunity after the repeal of CLRRA.

ANALYSIS:

Existing law:

1. Establishes, pursuant to both federal and state law, an extensive and complex series of programs authorizing public agencies to order owners of contaminated property, including “brownfields” to conduct cleanups of these properties, including the following:
   
   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;
      
   2. The Carpenter-Presley-Tanner Hazardous Substance Account Act (commencing with Section 25300 of the Health and Safety Code), commonly referred to as the State Superfund Program;
      
   3. Division 7 of the Water Code (commencing with Section 13000), commonly referred to as the Porter-Cologne Water Quality Control Act);
      
   4. Article 12.5 of the Health and Safety Code (commencing with Section 33459), commonly referred to as the Polanco Redevelopment Act;
      
   5. Chapter 6.10 of the Health and Safety Code (commencing with Section 25401), commonly referred to as the Escutia Law;
      
   6. Chapter 6.65 of the Health and Safety Code (commencing with Section 25260), commonly referred to as the Unified Agency Review of Hazardous Substance Release Site law or the “AB 2061” process;
      
   7. Article 8.5 of the Health and Safety Code (commencing with Section 25395.10), commonly referred to as the CLEAN Program (Clean Loans and Environmental Assistance to Neighborhoods); and
      
   8. Article 8.7 of Chapter 6.8 of the Health and Safety Code (commencing with Section 25395.40), commonly referred to as the FAIR Program (Financial Assurance and Insurance for Redevelopment).
      
2. Provides, pursuant to CLRRA, qualified innocent landowners, bona fide purchasers or contiguous property owners with immunity from liability for certain hazardous materials response costs or other damages based on meeting stipulated conditions, including the following:
   
   1. Participants agree to assess and cleanup the property as necessary;
   2. Participants seeking to qualify for immunity must enter into an agreement with an oversight agency; and
   3. Response actions must be as protective of public health and the environment as actions required by relevant cleanup standards contained in the Health and Safety and Water Codes.

The Act is repealed as of January 1, 2017, unless another enacted statute deletes or extends that date.

This bill extends the repeal date of CLRRA to January 1, 2027.

Background

1. California brownfields. The original purpose of CLRRA (the statute for which this measure seeks to eliminate the sunset) was stated as follows “The underutilization of brownfields in the state results in environmental, social, and economic detriments to the state and citizens….The brownfields in California represents an opportunity for the development of housing, parks and mixed use developments.”

According to the Department of Toxic Substances Control, there are approximately 90,000 brownfields currently in California.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• Unknown, but likely around $50,000 (Toxic Substances Control Account), for the Department of Toxic Substance Control oversight of clean-up projects.*
• Minor costs for the State Water Resources Control Board oversight (State Water Quality Control Fund).*

*Costs are reimbursed through a fee-for-service agreement.

SUPPORT: (Verified 5/10/16)

Association of Commercial Real Estate Investment Trusts – Northern and Southern California

Bay Area Council

Brown and Winters

Building Owners and Managers Association of California

California Association for Local Economic Development

California Building Industry Association

California Business Properties Association

California Council for Environmental and Economic Balance

California Infill Federation

California Main Street Alliance

Center for Creative Land Recycling

City of Carson

City of Chula Vista

City of Redding

Civil Justice Association of California

Commercial Real Estate Developers Association

Institute of Real Estate Management

International Council of Shopping Centers

League of California Cities

Los Angeles Neighborhood Land Trust

NAIOP of California

National Association of Real Estate Investment Trusts

Retail Industry Leaders Association

OPPOSITION: (Verified 5/10/16)

None received

Prepared by:

5/11/16 16:06:32

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 820 (Hertzberg) - Hazardous materials: California Land Reuse and Revitalization Act of 2004

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

SB 820 extends the sunset date for the California Land Reuse and Revitalization Act of 2004 (CLRRA) to January 1, 2027, and makes corresponding changes to a provision that provides for continued immunity after the repeal of CLRRA.

Fiscal Impact:

• Unknown, but likely around $50,000 (Toxic Substances Control Account), for the Department of Toxic Substance Control (DTSC) oversight of clean-up projects.*  
• Minor costs for the State Water Resources Control Board (SWRCB) oversight (State Water Quality Control Fund).*

*Costs are reimbursed through a fee-for-service agreement.

Background:

CLRRA provides that innocent landowners, purchasers, or contiguous property owners will be granted immunity from liability for damages due to hazardous materials if they assess and clean up the property, they enter into an oversight agreement with DTSC and/or SWRCB, and that the clean-up of the property meets or exceeds existing standards. This program will sunset in January 2017, although the immunity from liability from existing agreements will continue.

Brownfields are typically abandoned, idled, or underutilized sites, formerly used for industrial or commercial purposes, where perceived or actual contamination deters redevelopment. Costs associated with brownfield site clean-up can be prohibitively expensive for parties who purchase these properties, particularly when unexpected hazardous materials are encountered during site remediation. Consequently, many of these sites remain vacant for years.

The USEPA estimates that there are approximately 90,000 brownfields in California. The large number of brownfield sites and the unavailability of sufficient public resources to remediate these sites mean that California’s brownfields will not be restored to productive use without significant participation by the private sector.

Proposed Law:

This bill extends the sunset date for CLRRA to January 1, 2027, and makes corresponding changes to a provision that provides for continued immunity after the repeal of CLRRA.

Related Legislation:

SB 143 (Cedillo, Chapter 167, Statutes 2009) extended the sunset date for CLRRA, from January 1, 2010 to January 1, 2017, and made corresponding changes to a provision that provides for continued immunity after the repeal of CLRRA. This bill also authorized a prospective purchaser who qualifies as a bona fide purchaser to enter into a contract to acquire a site, but prohibited the prospective purchaser from receiving immunity under CLRRA until the prospective purchaser acquired the site.

SB 989 (Committee on Environmental Quality, Chapter 510, Statutes 2006) created a program for bona fide ground tenants, as defined, to purchase contaminated property subject to certain immunities from suit for damages related to prior contamination of the property, similar to the program made available to bona fide purchasers under CLRRA.

AB 2144 (Montanez, Chapter 562, Statutes 2006) among other things, revised the public participation procedures required in a response plan, under CLRRA, for agencies with oversight over the clean-up of certain brownfield sites.

AB 389 (Montanez, Chapter 705, Statutes 2004) created the California Land Reuse and Revitalization Act of 2004.

SB 493 (Cedillo, 2004) would have enacted the California Land Reuse and Revitalization Act. This bill died in the Assembly Appropriations Committee.

Staff Comments:

According to DTSC, CLRRA sites represent a small fraction of their brownfield cleanup sites. DTSC currently oversees 24 active CLRRA sites and has 16 completed sites. Statewide DTSC typically has more than 1000 active cleanup projects, and currently has 280 active Voluntary Cleanup Program sites. Approximately 50 staff work on these programs.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2015-2016 Regular Session

Bill No: SB 820 (Author:Hertzberg)

Version: April 12, 2016

Hearing Date: April 19, 2016

Fiscal: Yes

Urgency: No

Consultant: TH

SUBJECT

Hazardous Materials: California Land Reuse and Revitalization Act of 2004

DESCRIPTION

Existing law, the California Land Reuse and Revitalization Act of 2004 (CLRRA), provides an innocent landowner, a bona fide purchaser, or a contiguous property owner, with a qualified immunity from liability for pollution conditions caused by a release or threatened release of a hazardous material, as specified. The CLRRA will be repealed on January 1, 2017, unless that date is extended or the CLRRA’s sunset provision is removed.

This bill would extend the date of repeal to January 1, 2027, and make corresponding changes to a provision that provides for continued immunity after the repeal of the Act.

BACKGROUND

According to the United States Environmental Protection Agency (USEPA), a brownfield is “a property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.” (See https://www.epa.gov/brownfields/brownfield-overview-and-definition [as of Apr. 7, 2016].) Brownfields are typically abandoned, idled, or underutilized sites, formerly used for industrial or commercial purposes, where perceived or actual contamination deters redevelopment. Costs associated with brownfield site cleanup can be prohibitively expensive for parties who purchase these properties, particularly when unexpected hazardous materials are encountered during site remediation. Consequently, many of these sites remain vacant for years.

Brownfield cleanup and redevelopment is a problem in California and across the United States. USEPA estimates that there are more than 450,000 brownfields in the U.S., approximately 90,000 of which are in California. These properties include former industrial sites, school sites, military bases, small businesses and landfills, and their idle or underused status contributes to both urban blight and urban sprawl. According to the California Department of Toxic Substances Control, “cleaning brownfield properties frees previously unavailable land for productive reuse, while taking development pressures off undeveloped open land, thereby improving and protecting the environment.” (See http://www.dtsc.ca.gov/SiteCleanup/Brownfields/index.cfm [as of Apr. 7, 2016].) The large number of brownfield sites and the unavailability of sufficient public resources to remediate these sites mean that California’s brownfields will not be restored to productive use without significant participation by the private sector.

The California Land Reuse and Revitalization Act of 2004 (CLRRA) provides qualified immunities to certain owners and purchasers of brownfields in order to drive investment toward these polluted properties. Historically, the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and various state laws, including the Carpenter-Presley-Tanner Hazardous Substance Account Act, rendered current and previous owners of contaminated property jointly and severally liable for the cost of cleaning up hazardous materials released on a site. In 2002, Congress amended CERCLA to grant immunity to innocent and prospective purchasers, and innocent contiguous property owners, for previously occurring contamination for which the innocent or prospective purchaser had no responsibility, subject to certain conditions. Following suit, in 2004, California enacted the CLRRA, which provides innocent landowners, bona fide purchasers, and contiguous property owners, who did not cause or contribute to a release, with qualified immunity from liability under certain state laws. To take advantage of this immunity, qualifying individuals must enter into an agreement with an oversight agency that requires the individual to undertake various tasks relating to cleanup of hazardous materials on the property.

Under current law, CLRRA will sunset on January 1, 2017, but any individual who qualifies for immunity as of December 31, 2016, would retain their immunity, as specified. This bill would extend that sunset date by 10 years, to January 1, 2027, and make conforming changes to the provisions that provide for continued immunity after that date.

This bill was approved by the Senate Committee on Environmental Quality on April 6, 2016, by a vote of 6-0.

CHANGES TO EXISTING LAW

Existing law generally imposes joint and several liability upon current and previous owners of property for “response costs” (cost of clean-up) incurred by the government or any other party associated with the remediation of a site contaminated by hazardous materials. (Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. Sec. 9601 et seq.; Carpenter-Presley-Tanner Hazardous Substance Account Act, Health & Saf. Code Sec. 25300 et seq.; Hazardous Waste Control Law, Health & Saf. Code Sec. 25100 et seq.; Keene Underground Storage Tank Cleanup Trust Fund Act, Health and Saf. Code Sec. 25299.10 et seq.)

Existing law, the California Land Reuse and Revitalization Act of 2004 (CLRRA), provides innocent landowners, bona fide purchasers, and contiguous property owners who did not cause or contribute to a release with immunities from: (1) claims for response costs or other damages associated with a release or threatened release of a hazardous material from the site; or (2) agency action to require the individual to take a response action, other than the response action required in an approved CLRRA response plan, except under certain conditions. (Health & Saf. Code Sec. 25395.60 et seq.)

Existing law requires a bona fide purchaser, innocent landowner, or contiguous property owner who seeks to qualify for the above immunity to enter into an agreement with an agency. Existing law requires that agreement to include the performance of a site assessment, and, if the agency determines that a response plan is necessary, to prepare and implement the response plan. (Health & Saf. Code Sec. 25395.92.)

Existing law further requires individuals seeking to qualify as bona fide purchasers, innocent landowners, or contiguous property owners to:

• make all appropriate inquiries into the previous ownership and uses of the site;
• exercise appropriate care with respect to the release or threatened release of hazardous materials at the site;
• provide full cooperation, assistance, and access to a person authorized to conduct response actions or natural resource restoration at the site;
• comply with land use controls established or relied on in connection with an approved response action at the site;
• not impede the effectiveness or integrity of any aspect of any remedy employed at the site in connection with a response action;
• comply with all requests for information or administrative subpoenas by an agency with jurisdiction; and
• provide all notices and satisfy reporting requirements under state and federal law with respect to the hazardous materials at the site. (Health & Saf. Code Sec. 25395.80.)

Existing law provides that if there are unrecovered costs incurred by an agency at a site for which an owner of the site is not liable as an innocent landowner, bona fide purchaser, or contiguous property owner, an agency shall have a lien on the site, or may, by agreement with the owner, obtain from the owner a lien on other property or other assurance of payment for the unrecovered response costs, subject to certain conditions. (Health & Saf. Code Sec. 25395.83.)

Existing law provides that an innocent landowner, bona fide purchaser, contiguous landowner, or bona fide ground tenant, may seek contribution from any person who is responsible for a discharge or release of hazardous materials for which the innocent landowner, bona fide purchaser, contiguous landowner, or bona fide ground tenant incurs agency oversight costs for the review of a response plan or oversight of the implementation of a response plan. (Health & Saf. Code Sec. 25395.85.)

Existing law states that the CLRRA will not provide immunity from, among other things:

• liability for bodily injury or wrongful death;
• criminal acts;
• permit violations; or
• new releases of hazardous materials that are caused or contributed to by an innocent landowner, bona fide purchaser, or contiguous property owner. (Health & Saf. Code Sec. 25395.86.)

Existing law will repeal the CLRRA on January 1, 2017, unless a subsequent law repeals that requirement. Existing law, operative January 1, 2017, provides that any individual who qualifies for immunity as of December 31, 2016, retains their immunity, provided that they remain in compliance with the requirements of the CLRRA. (Health & Saf. Code Secs. 25395.109, 25395.110.)

This bill extends the above repeal date to January 1, 2027. This bill additionally extends the operative date of the provision that provides for continuing qualified immunity to January 1, 2027.

COMMENT

1. Stated need for the bill

According to the author,

Brownfields, or contaminated land, remain a significant problem nationwide. These properties contain potentially hazardous substances, where clean-up costs can be expensive. Additionally, buyers of brownfield sites may be liable for contamination they had no role in. The cost and risk tied to these sites deter redevelopment and contribute to urban blight. In California, the Department of Toxic Substances Control (DTSC) states that there are “an estimated 90,000 properties throughout the State - including former industrial properties, school sites, military bases, small businesses and landfills.”

To solve this dilemma, California enacted the Land Reuse & Revitalization Act of 2004. The act provides immunity from liability to innocent landowners, purchasers and the owners of adjacent properties. To take advantage of this benefit, qualifying individuals must enter into an agreement with the state to conduct a site assessment and clean-up the property safely.

The CLRRA will become inoperative, or “sunset,” on January 1, 2017. After 11 years, the program has shown its usefulness – it provides incentive to clean-up contaminated sites responsibly, it reduces environmental and health risks, while adding economic value to polluted vacant properties. For example, in 2008 a former pickle processing plant in Hayward was converted into Eden Housing, a complex of 78 affordable housing units. Continuation of the CLRRA is of utmost importance to encourage non-polluting buyers to seek out infill sites which they would not pursue without this protection.

1. Effectiveness of the CLRRA

The California Land Reuse and Revitalization Act of 2004 (CLRRA) provides eligible innocent landowners, bona fide purchasers, and contiguous property owners with immunity from liability for hazardous materials response costs and other damages, if certain qualifying criteria are met. To receive that immunity, CLRRA participants must, among other things, enter into an agreement with an oversight agency that includes “the performance of a site assessment, and, if the agency determines that a response plan is necessary [to prevent or eliminate an unreasonable risk], the preparation and implementation of a response plan.” (Health & Saf. Code Secs. 25395.92(a), 25395.96.) In exchange for qualified immunity, these required actions -- generating a site assessment plan, implementing and reporting on the plan, and undertaking response actions -- result in at least a partial cleanup of the property, resulting in the redevelopment and reuse of otherwise idle brownfield sites.

When the CLRRA was enacted in 2004, it contained a five-year sunset provision to allow the Legislature to review the program and determine whether it has been an effective tool for revitalizing polluted sites. SB 143 (Cedillo, Ch. 167, Stats. 2009) extended that sunset provision a further seven years and added a post-repeal provision that allowed program participants to retain their immunity if they continue to comply with all program requirements, including any response plans entered into with an oversight agency. (See Health & Saf. Code Sec. 25395.110.) While it does not appear that any comprehensive evaluation of CLRRA’s effectiveness has been undertaken, several stakeholders in support of this bill describe redevelopment projects that would not have been possible without the act. For example, the City of Chula Vista writes:

A local developer working in the City of Chula Vista was the first in San Diego County to effectively use CLRRA to take ownership of a former aerospace manufacturing facility. . . . Without CLRRA this development would not have been possible and the land would have remained a vacant blighted parcel within the City of Chula Vista. Upon build-out the entire development is estimated to contribute [$] 1.3 [billion] in revenue to the San Diego region.

Similarly, the City of Carson writes:

Brownfields remain a significant problem nationwide, and especially in the City of Carson. Carson has a long history of dealing with contaminated soil of all types. Currently the City’s Reclamation Authority is working on developing a 157-acre former landfill site, which it now owns, into a regional shopping destination. The remediation itself is over $150 million, much of which was funded by the City’s former Redevelopment Agency (RDA); however, the liability issues associated with the contamination have historically made it difficult to attract quality developers to the site, which is crucial for the economic vitality of the City. CLRRA will make it more likely a quality developer will sign up for the vertical development of the site.

This bill would extend CLRRA’s sunset date 10 additional years to January 1, 2027, thereby providing the Legislature additional time to evaluate the act’s efficacy.

Support: Bay Area Council; Brown & Winters; California Association for Local Economic Development; California Business Properties Association; California Council for Environmental and Economic Balance; California Infill Builders; California Main Street Alliance; Center for Creative Land Recycling; City of Carson; City of Chula Vista; City of Redding; Civil Justice Association of California; League of California Cities; Los Angeles Neighborhood Land Trust

Opposition: None Known

HISTORY

Source: California Association for Local Economic Development

Related Pending Legislation: None Known

Prior Legislation:

SB 143 (Cedillo, Ch. 167, Stats. 2009) extended the sunset date for the California Land Reuse and Revitalization Act of 2004 (CLRRA) from January 1, 2010, to January 1, 2017, and made corresponding changes to a provision that provides for continued immunity after the repeal of the Act. This bill also authorized a prospective purchaser who qualifies as a bona fide purchaser to enter into a contract to acquire a site, but prohibited the prospective purchaser from receiving immunity under the act until the prospective purchaser acquired the site.

SB 989 (Committee on Environmental Quality, Ch. 510, Stats. 2006) created a program for bona fide ground tenants, as defined, to purchase contaminated property subject to certain immunities from suit for damages related to prior contamination of the property, similar to the program made available to bona fide purchasers under CLRRA.

AB 2144 (Montanez, Ch. 562, Stats. 2006), among other things, revised the public participation procedures required in a response plan, under the CLRRA, for agencies with oversight over the clean-up of certain brownfield sites.

AB 389 (Montanez, Ch. 705, Stats. 2004), created the California Land Reuse and Revitalization Act of 2004 (CLRRA).

SB 493 (Cedillo, 2004) would have enacted the California Land Reuse and Revitalization Act. This bill died in the Assembly Appropriations Committee.

Prior Vote: Senate Environmental Quality Committee (Ayes 6, Noes 0)

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SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2015 - 2016 Regular

Bill No: SB 820

SUBJECT: Hazardous materials: California Land Reuse and Revitalization Act of 2004

ANALYSIS:

Existing law:

1. Pursuant to both federal and state law, establishes an extensive and complex series of programs authorizing public agencies to order owners of contaminated property, including “brownfields” to conduct cleanups of these properties, including the following:
   
   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;
      
   2. The Carpenter-Presley-Tanner Hazardous Substance Account Act (commencing with Section 25300 of the Health and Safety Code), commonly referred to as the State Superfund Program;
      
   3. Division 7 of the Water Code (commencing with Section 13000), commonly referred to as the Porter-Cologne Water Quality Control Act);
      
   4. Article 12.5 of the Health and Safety Code (commencing with Section 33459), commonly referred to as the Polanco Redevelopment Act;
      
   5. Chapter 6.10 of the Health and Safety Code (commencing with Section 25401), commonly referred to as the Escutia Law;
      
   6. Chapter 6.65 of the Health and Safety Code (commencing with Section 25260), commonly referred to as the Unified Agency Review of Hazardous Substance Release Site law or the “AB 2061” process;
      
   7. Article 8.5 of the Health and Safety Code (commencing with Section 25395.10), commonly referred to as the CLEAN Program (Clean Loans and Environmental Assistance to Neighborhoods; and,
      
   8. Article 8.7 of Chapter 6.8 of the Health and Safety Code (commencing with Section 25395.40), commonly referred to as the FAIR Program (Financial Assurance and Insurance for Redevelopment).
      
2. Pursuant to the California Land Reuse and Revitalization Act of 2004 (CLRRA), provides qualified innocent landowners, bona fide purchasers or contiguous property owners with immunity from liability for certain hazardous materials response costs or other damages based on meeting stipulated conditions, including the following:
   
   1. Participants agree to assess and cleanup the property as necessary;
      
   2. Participants seeking to qualify for immunity must enter into an agreement with an oversight agency;
      
   3. Response actions must be as protective of public health and the environment as actions required by relevant cleanup standards contained in the Health and Safety and Water Codes.
      

The Act is repealed as of January 1, 2017, unless another enacted statute deletes or extends that date.

This bill deletes the repeal date of CLRRA, thereby continuing the Act indefinitely.

Background

1. California Brownfields. The original purpose of CLRRA (the statute for which this measure seeks to eliminate the sunset) was stated as follows “The underutilization of brownfields in the state results in environmental, social, and economic detriments to the state and citizens….The brownfields in California represents an opportunity for the development of housing, parks and mixed use developments.

According to the Department of Toxic Substances Control, there are approximately 90,000 brownfields currently in California.

1. Previous legislation:

AB 389 (Montanez, Chapter 705, Statutes of 2004) enacted the California Land Reuse and Revitalization Act of 2004, which provides that an innocent landowner, a bona fide purchaser, or a contiguous property owner, as defined, qualifies for immunity from liability for response cost or damage claims under specified state statutory and common laws that impose liability upon an owner or occupant of property, for pollution conditions caused by a release or threatened release of a hazardous material on, under, or adjacent to that property, if the innocent purchaser, bona fide purchaser, or contiguous property owner meets specified conditions. The legislation specified a sunset date of January 1, 2010.

SB 143 (Cedillo, Chapter 167, Statutes of 2009) extended the CLRRA sunset date from January 1, 2010 to January 1, 2017.

Comments

1. Purpose of Bill. According to the author, by extending CLRRA, SB 820 preserves a great tool for cleaning up and transforming polluted properties. The author states that property purchasers and developers are hesitant to buy and develop on brownfields because of the stigma and risk tied to them, which results in contaminated lands that remain vacant for years.

The author asserts that California’s brownfields get another chance of becoming productive uses of space when liability protection is provided.

The sponsor provided a list of approximately 40 sites where CLRRA has been used to facilitate remediation of brownfields. Many of these projects have been completed in just the last few years. An example offered by the sponsor of the success of CLRRA is the Hayward Pickle Plant. This was the first CLRRA agreement. The property was cleaned up under and a completion letter was issued in less than a year. An affordable housing developer acquired the property and the Eden Housing affordable housing project opened about five years ago.

1. Liability protection for whom? Providing liability protection for prospective purchasers does not remove the risk from exposure to the contamination present at the brownfield but rather just alters who can be held accountable for correcting or mitigating the hazards and the risk of exposure after the completion of the cleanup and project. It is unclear, if a site is remediated and at a later date an exposure risk is found who will be held accountable? Does the state assume responsibility if there is no responsible party to recover additional cleanup costs?
2. 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.

An amendment should be taken to extend the sunset date for 10 years rather than remove it entirely.

DOUBLE REFERRAL: If this measure is approved by this committee, the do pass motion must include the action to re-refer the bill to the Senate Judiciary Committee.

SOURCE:

California Association for Local Economic Development

SUPPORT:

Association of Commercial Real Estate Investment Trusts – Northern and Southern California

Bay Area Council

Building Owners and Managers Association of California

California Business Properties Association

California Infill Federation

California Main Street Alliance

Center for Creative Land Recycling

City of Carson

City of Chula Vista

City of Redding

Civil Justice Association of California

Commercial Real Estate Developers Association

Institute of Real Estate Management

International Council of Shopping Centers

League of California Cities

Los Angeles Neighborhood Land Trust

NAIOP of California

National Association of Real Estate Investment Trusts

Retail Industry Leaders Association

OPPOSITION:

None received

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