The California Land Use and Revitalization Act of 2004: A New California Brownfield Law
 
May 23, 2005
 
Donald M. Clary- Los Angeles

Companies purchasing or developing land in California should become familiar with a new state law that addresses environmental liability. The California Land Use and Revitalization Act of 2004 was recently signed by Governor Schwarzenegger. The law promotes the redevelopment of “Brownfield” parcels. These are sites that may have been contaminated by hazardous materials. Such sites are often found in poor urban neighborhoods, where development is most needed. The law will assist in eliminating the uncertainties concerning the cleanup costs associated with such properties. The law also provides additional incentives for the redevelopment of brownfields.

The bill potentially extends protection to “bona fide purchasers,” “innocent landowners,” or “contiguous property owners.” To qualify for any of these categories of protection, a party must be able to demonstrate various factors. These include (but are not limited to) showing that they made all appropriate inquiries into the previous ownership and uses of the site, used appropriate care with respect to the release or threatened release of hazardous materials at the site, or have complied with land use controls established for the site. In order to qualify for such a status, a person must enter into an agreement with the appropriate agency. The agreement must include a provision requiring the completion of an assessment of contamination on the site. After implementing such a site assessment plan, the party will be required to submit a report of the findings to the agency and (if the agency requires it) prepare a response plan to clean up the property to the extent required to meet appropriate environmental standards. The agency must then approve the response plan. The party requesting the agreement must reimburse the agency that enters the agreement for all agency costs.

The Act authorizes a response plan to require land use controls that impose appropriate conditions, restrictions and obligations on land use or activities if, after completion of the removal and remedial actions specified in the response plan, hazardous substance materials remain at the site at a level that is not suitable for the unrestricted use of the site.

Assuming that the developer or landowner complies with the agreement (and qualifies as a “bona fide purchaser,” “innocent landowner,” or “contiguous property owner”) with certain limited exceptions, no action can be generally be brought against them (under certain statutes specified in the Act) by persons other than government agencies. Moreover, the Act also provides some limitations to “reopeners,” situations in which agencies require developers to do further cleanups on properties when new conditions are identified or further damage is discovered. Under the new Act, governmental agencies can only force the landowner to do further cleanups in situations where the public is endangered, and where the agency has unsuccessfully taken all reasonable efforts to locate and to compel potentially responsible parties to undertake such actions. The Bill also allows qualified purchasers of brownfield properties to recover their attorney fees in litigation over cleanup costs.

The law will apply to sites in “urban infill areas.” This means vacant or underutilized lots within an area that has been previously developed or that is surrounded by parcels that have been previously developed. Such lots must be in an incorporated city or an unincorporated area that meets certain urban criteria. Further, the presence or perceived presence of hazardous materials must complicate the reuse of these parcels.

The law will not apply to properties that are listed on CERCLA’s National Priority List, properties identified as hazardous release sites by the Department of Toxic Substance Control (DTSC), and properties impacted solely by a petroleum release from an underground storage tank eligible for reimbursement from the California Underground Storage Tank Cleanup Fund.

For more information, e-mail Donald Clary at donald.clary@hklaw.com or call toll free, 1-888-688-8500.