Real Property Law

Cal. Real. Prop. Journal 2014, Vol. 32, No. 1

Reader Alert: The Gatto Act (AB 440): The Newest Tool in the Brownfields Toolbox

By Leah Goldberg

©2014 All Rights Reserved.

The Gatto Act (AB 440) is a new brownfields tool that authorizes cities, counties, and successor housing authorities to compel cleanup of contaminated properties within their jurisdictions. But if you substitute the words "cities, counties, and successor housing authorities" with "redevelopment agencies," you have described the Polanco Redevelopment Act (the "Polanco Act"). While the Gatto Act is modeled after the Polanco Act, and admittedly the two acts are similar in many ways, it is a misnomer to call the Gatto Act "Polanco 2."1 The California Legislature promulgated the Gatto Act in the 2013 session adding sections 25403—03.8 to the California Health & Safety Code. Governor Brown signed the law on October 5, 2013, and it became effective on January 1, 2014.

Because the Gatto Act was based on the Polanco Act, the two acts are similar in several ways. First, the Gatto Act, like the Polanco Act, employs a process similar to nuisance abatement to compel cleanup. A local agency identifies as the responsible party the owner or operator of a facility at the time of the release of hazardous materials. A local agency gives the responsible party notice and an opportunity to undertake the site investigation and cleanup. If the responsible party fails to respond or fails to complete the task, the local agency can step in and conduct the site investigation and cleanup and recover all of its costs from the responsible party.2 Second, local agencies can require landowners to turn over environmental assessment information.3 In this way, the Gatto Act, like the Polanco Act, can be used as an information-gathering tool. Third, the Gatto Act gives local agencies the authority to require cleanup of blighted contaminated properties and, following the cleanup, the local agency, the redeveloper, its lender, and subsequent purchasers receive immunities from state regulatory action for any release or releases addressed in an approved cleanup plan.4 Fourth, like the Polanco Act, the Gatto Act provides comprehensive cost recovery rights that include recovery of attorneys’ fees and staff time in addition to cleanup costs.5 Fifth, like the Polanco Act, the Gatto Act authorizes the local agency to cause a third party to undertake the cleanup.6 Sixth, the local agency can use the Gatto Act regardless of whether it owns the property targeted for cleanup or has any intention of acquiring it.7 And finally, the local agency can take title the property during the cleanup and not enter into the chain of liability.8

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