DTSC is renaming the former Environmental Oversight Agreement to Local Agency Oversight Agreement to more effectively describe the agreement type and purpose. The term “Environmental Oversight Agreement” is still used in a historical context. As part of the 2011 Budget Act, and in order to protect funding for core public services at the local level, the Legislature approved the dissolution of the State’s 400 plus Redevelopment Agencies (RDAs). After a period of litigation, RDAs were officially dissolved as of February 1, 2012. DTSC has prepared a question and answer guide to address questions raised regarding the effect of the dissolution of redevelopment agencies pursuant to the “Dissolution Legislation” – Assembly Bill (AB) X1 26 and further amendments pursuant to AB 1484 on DTSC’s Redevelopment Agency Environmental Oversight Program. For more information or to discuss a specific site, please contact your local Brownfields Coordinator.
Polanco Act Questions and Answers
1. What happens to agreements signed by DTSC and a Redevelopment Agency since the Redevelopment Agencies were dissolved? Agreements signed by DTSC and a Redevelopment Agency, including Consultative Agreements, Voluntary Cleanup Agreements (VCAs) or Environmental Oversight Agreements (EOAs), are “enforceable obligations.” Therefore, these Agreements remain valid and enforceable despite the dissolution of redevelopment agencies.
2. Can agreements signed by DTSC and a Redevelopment Agency be transferred to a successor agency? Yes. Successor agencies are charged with winding down the affairs of the former redevelopment agencies. Most successor agencies were created by the city or county that created the RDA. But several cities and counties declined to serve in that capacity and in those cases, another special district can serve as the successor agency. In some cases, the governor has had to appoint another entity to wind down the RDA—most notably in Los Angeles where there is a Designated Local Authority serving as the successor agency to the Community Redevelopment Agency of Los Angeles.
The successor agency may choose to transfer the Agreement to itself or to terminate the Agreement. If an Agreement is transferred to a successor agency, and the successor agency and/or oversight board has not terminated the Agreement, then the successor agency is required to perform the obligations required by the Agreement. Whether DTSC will continue oversight work pursuant to an existing Agreement will depend on the specific factual circumstances. For example, a successor agency will need to demonstrate that its Recognized Obligations Payment Schedule or “ROPS” includes the authority and funding to implement the scope of work that the successor agency proposes, including funding for DTSC oversight costs.
3. Can DTSC enter into new agreements with successor agencies under the Polanco Redevelopment Act? A successor agency has the authority to enter into a new Oversight Agreement for Local Agencies with DTSC pursuant to the Polanco Redevelopment Act if the obligation to enter into the new agreement stems from an “enforceable obligation” that existed prior to June 28, 2011.
Whether DTSC will enter into a new Oversight Agreement for Local Agencies with a successor agency under the Polanco Redevelopment Act depends on the specific factual circumstances. In making this determination, DTSC may consider a number of issues, including, but not limited to:
- The nature of the underlying enforceable obligation giving rise to the successor agency’s obligation to enter into a new Environmental Oversight Agreement, including whether the underlying enforceable obligation existed prior to June 28, 2011.
- The facts related to creation of the underlying enforceable obligation, including DTSC’s involvement, if any.
- Whether the successor agency and/or project meets the applicable criteria for entering into an Agreement pursuant to the Polanco Redevelopment Act.
- Whether the successor agency has the funds available to implement the Agreement’s scope of work and to pay for DTSC’s oversight costs. A successor agency will need to demonstrate that the underlying enforceable obligation, Environmental Oversight Agreement, and/or related payments are identified in the successor agency’s Recognized Obligations Payment Schedule or “ROPS.”
4. Can DTSC enter into new agreements with sponsoring entities or housing authorities under the Polanco Redevelopment Act? Sponsoring entities are the city, county, or city and county which established the former redevelopment agencies. Both “sponsoring entities” and local housing authorities may enter into Environmental Oversight Agreements pursuant to the Polanco Redevelopment Act, so long as the agreement is in furtherance of housing functions acquired by the sponsoring entity or local housing authority from the former redevelopment agency.
In many cases, whether DTSC will enter into a new Oversight Agreement for Local Agencies with a sponsoring entity or local housing authority may depend on the specific factual circumstances. In making this determination, DTSC may consider a number of issues, including, but not limited to:
- Is the sponsoring entity or the local housing authority the appropriate contracting party (i.e., did the sponsoring entity elect to retain the housing assets and functions of the former RDA or were they transferred to the local housing authority)?
- Does the Oversight Agreement for Local Agencies relate to housing functions acquired by the sponsoring entity or local housing authority?
- Does the sponsoring entity, local housing authority, and/or project meets the applicable criteria for Environmental Oversight Agreements pursuant to the Polanco Redevelopment Act?
5. Can DTSC enter into an Oversight Agreement for Local Agencies with a sponsoring entity to which a former RDA’s land use related plans and functions were transferred? Because there is no legislative history related to this section and there are differing legal opinions regarding the scope of Health and Safety Code § 34173(i), DTSC does not believe it is appropriate to enter into Environmental Oversight Agreements with a sponsoring entity for activities related to the former redevelopment agency’s land use related plans and functions at this time. However, we are willing to consider specific circumstances on a case-by-case basis. The Memorandum of Agreement (MOA) application for voluntary cleanup projects should be signed and submitted to initiate this process. If DTSC is determined to be the appropriate oversight agency for the project, we then commit to beginning the discussion.
6. What is the Gatto Act and how can it be used to work with DTSC? Beginning January 1, 2014, the Gatto Act (AB 440, Health and Safety Code 25403) creates a local agency program to encourage infill development and the cleanup of brownfields by authorizing local governments to compel cleanup of contaminated properties and reduce local government liabilities. This legislation authorizes a local agency to take action similar to those previously taken by redevelopment agencies under the Polanco Redevelopment Act (Polanco Act) to investigate and clean up a release of hazardous materials in a blighted area within the geographic boundaries of the local agency.
The Polanco Act was a law enacted in 1990 to assist redevelopment agencies in addressing Brownfield properties within their jurisdiction. The Act provided immunity from liability for Redevelopment Agencies (RDAs); and subsequent property purchasers when hazardous substance releases are addressed in accordance with specified procedures. As part of the 2011 Budget Act, and in order to protect funding for core public services at the local level, the California Legislature approved the dissolution of the State’s 400 plus RDAs, which were officially dissolved as of February 1, 2012. Successor agencies were required to resolve RDA activities and fulfill certain obligations. However, when RDAs were dissolved, there was no clear successor to the Polanco Act authorities.
The Gatto Act addresses challenges to local government created by the abolishment of redevelopment agencies by transferring similar authorities to cities, counties, and successor housing agencies.
There are some differences between the Polanco Act and the Gatto Act. For example, the Polanco Act was limited to redevelopment agencies addressing contaminated sites within redevelopment project areas. The Gatto Act allows cities, counties, and successor housing agencies to redevelop blighted areas within their jurisdiction, not just in redevelopment project areas. Note that AB 440 does not replace the existing Polanco Act, rather simply expands redevelopment authorities to accommodate local agencies that are seeking to facilitate redevelopment. More detailed information can be found in the text of the legislation.
DTSC is developing a model Local Government Agency Oversight Agreement for parties who are interested in pursuing this option. For more information, please contact your local Brownfields Coordinator.