Barg Coffin Lewis & Trapp, LLP Articles

November 1998

Superfund Sunset: State Environmental Law Due to Expire Jan. 1

by Brian S. Haughton

If a major environmental law is repealed and there are no press conferences, no photo ops, no spin doctors, does it still make news? So far, not much. But by January 1, 1999 - when 86 environmental statutory provisions will be erased from the books because California lawmakers failed to reauthorize the state Superfund law - the conspicuous silence about this story may end as well.

The law - also known as the Carpenter-Presley-Tanner Hazardous Substance Account Act ("HSAA") - comprises Chapter 6.8 of Division 20 of the Health and Safety Code. Cal. Health & Safety Code §§25300 et seq. (unless otherwise noted, all further citations are to this law). It takes its common name - the state Superfund law - from the federal analog, the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA," 42 U.S.C. §§ 9601 et seq.), which created a "Superfund" to pay for government-run cleanups of the nation's most contaminated sites. The HSAA contains a "sunset" provision - section 25395 - repealing five of Chapter 6.8's 12 Articles unless a reauthorization statute is passed before January 1, 1999. The legislature adjourned on August 31 without reauthorizing Chapter 6.8.

The California Environmental Protection Agency ("CalEPA") Department of Toxic Substances Control ("DTSC"), chiefly responsible for administering the HSAA, has given few public hints of the implications of the repeal, but a quick review of the doomed statutory provisions provides clues about how the landscape of California environmental law will change in 1999.

To begin with, DTSC's authority, under section 25356, to publish the annual state Superfund list - identifying and prioritizing the more seriously contaminated sites in the state - will expire on January 1. DTSC will also lose its authority, under sections 25355 and 25358.3, to order potentially responsible parties ("PRPs") to perform cleanups at these sites and, if the PRPs fail, to perform cleanups itself. Some of this slack may be taken up by shifting authorization for cleanup orders from the HSAA to DTSC's corrective action program under the Hazardous Waste Control Law ("HWCL," sections 25100 et seq.) or to the jurisdiction of the Regional Water Quality Control Boards under the Water Code. For new sites, this shift presents no conceptual difficulty, but many environmental practitioners are wondering whether and how the shift will occur for on-going matters.

Moreover, the alternative statutory schemes have significant differences from the HSAA. For example, cleanups under the HWCL and the Water Code will likely be subjected to less public scrutiny because neither contains citizen participation provisions equivalent to the HSAA's sections 25358.7 and 25356.1, also slated for repeal. Also, neither of the alternatives contains a "superfund." Thus, with the exception of an annual $100,000 for emergency corrective action under section 25187.5 (the $1 million corollary under HSAA section 25354 is also being repealed), there will be no mechanism for state-funded cleanups in cases where no PRPs can be found or where known PRPs fail to comply with cleanup orders or requests.

Some of the slack might also have been taken up by cities and counties under section 25351.2, authorizing them to stand in DTSC's shoes and perform cleanups when PRPs fail to do so, but that statute, too, will be repealed.

Measures to promote private cleanups are also destined for the dust bin. One of these is the private site management program (sections 25395.1 through 25395.15). This program, added in 1995, allows a "private site manager" (defined as a state-certified environmental assessor) to perform some of the oversight and sign-off functions formerly reserved to DTSC. For example, under section 25395.2, a private site manager may prepare a "no further action" report certifying a site as clean, and if DTSC does not disagree in writing within 60 days, the report is deemed approved. In light of the legislature's failure to reauthorize the program, DTSC is already cutting back on resources devoted to it. See www.dtsc.ca.gov/smp/smpsmps.htm.

Authorization for the voluntary cleanup program, too, terminates on the first of the year. This program, formerly known as the "walk-in program," was created under section 25355.5. It enables owners of low-priority contaminated sites to obtain timely DTSC oversight and sign-off for cleanups undertaken for economic and development reasons rather than in response to a DTSC order.

These sites are sometimes called "brownfields," to distinguish them from higher-priority "blackfields" and pristine "greenfields." DTSC established staff positions to expedite these cleanups, and the positions have been funded by brownfield developers who pay fees pursuant to "Voluntary Cleanup Agreements" entered into with DTSC. At a recent brownfield conference, DTSC's head of statewide cleanup operations, Barbara Coler, confirmed the voluntary cleanup program will be shut down.

Elimination of HSAA reporting requirements may mean fewer sites come to the attention of environmental regulators. With certain exceptions and qualifications, section 25359.4 requires property owners to notify DTSC within 30 days after discovering any release of hazardous substances on their property. Although there is a similar reporting provision in Water Code section 13271, the HSAA provision contains a broader definition of "reportable quantity." Therefore, the repeal of section 25359.4 may result in a narrower scope of releases that are reported to regulators.

Elimination of the abandoned sites program (sections 25369, 25369.1 and 25359.6) is likely to have a similar effect. This program is designed to ferret out and prioritize illegal dumping sites and inactive chemical disposal, treatment and storage facilities that cannot be traced to a specific financially viable owner.

Another type of disclosure obligation will be eliminated by the repeal of section 25359.7, which requires non-residential property sellers to notify buyers - and tenants to notify landlords - of releases of hazardous substances on their property. To a significant degree, these obligations will continue under common law and contract after January 1, but the statutory "teeth" - $5,000 civil penalties for violations - will be extracted.

The HSAA's binding arbitration program (under sections 25356.2 through 25356.10) will also expire. The program is intended to expedite allocation of cleanup costs among PRPs. For each contaminated site, the scheme contemplates preparation of a cleanup plan including a non-binding allocation of responsibility, assigning each PRP a share of cleanup costs. Parties assigned a collective share exceeding 50 percent may initiate binding arbitration of the allocation issue before three state-approved environmental experts.

Any PRP who does not join the fun "shall" be sued by the Attorney General under section 25356.4(d). On the other hand, those who do participate (and who pay the amount prescribed by the arbitrators) are rewarded under section 26356.6(a) with a release from all further state and local governmental claims relating to the contamination. CalEPA's Office of Environmental Health Hazard Assessment - a DTSC sister agency responsible for the program - began canceling pending arbitration proceedings in September due to the 'sunsetting' of Chapter 6.8.

Whether and when the state Superfund law is reauthorized is the subject of much speculation in Sacramento and elsewhere. Gray Davis' victory in the recent gubernatorial election is seen by many as boding well for the environment, but even he cannot alone reauthorize the law. Also, assuming he can solve the impasse that led to the law's downfall last August, the new law will not take effect until January 1, 2000 unless he can muster the two-thirds legislative vote necessary for an urgency measure. The fate of DTSC in the meantime is an open question.

These materials are provided for information purposes only and are not intended as and cannot be considered legal advice. Before taking action based upon this information, you should consult your legal counsel.

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