National Priorities List and State Orphan Sites

STATE OF CALIFORNIA Budget Change Proposal - Cover Sheet DF-46 (REV 10/20) Fiscal Year Business Unit Department Priority No. 2021-22 3960 Department of Toxic Substances Control Click or tap here to enter text. Budget Request Name Program Subprogram 3960-013-BCP-2021-GB 3620 Site Mitigation and 3620011 Other Site Mitigation Restoration Program Activities Budget Request Description National Priorities List and State Orphan Sites Budget Request Summary The Department of Toxic Substances Control requests a transfer of $19.55 million from the Toxic Substances Control Account to the Site Remediation Account to fund the state’s National Priorities List obligations and state orphan sites with Priorities 1A, 1B, and 2. Requires Legislation Code Section(s) to be Added/Amended/Repealed ☐ Yes ☒ No Click or tap here to enter text. Does this BCP contain information technology Department CIO Date (IT) components? ☐ Yes ☐ No Click or tap here to enter text. Click or tap to enter a date. If yes, departmental Chief Information Officer must sign. For IT requests, specify the project number, the most recent project approval document (FSR, SPR, S1BA, S2AA, S3SD, S4PRA), and the approval date. Project No.Click or tap here to enter text. Project Approval Document: Click or tap here to enter text. Approval Date: Click or tap to enter a date. If proposal affects another department, does other department concur with proposal? ☐ Yes ☐ No Attach comments of affected department, signed and dated by the department director or designee. Prepared By Date Reviewed By Date Charlie Ridenour 1/7/2021 Alice Jeung 1/7/2021 Department Director Date Agency Secretary Date Meredith Williams 1/7/2021 Jared Blumenfeld 1/7/2021 Department of Finance Use Only Additional Review: ☐ Capital Outlay ☐ ITCU ☐ FSCU ☐ OSAE ☐ Dept. of Technology APBM Date submitted to the Legislature Teresa Calvert 1/8/2021 Analysis of Problem A. Budget Request Summary The Department of Toxic Substances Control (DTSC) requests a transfer of $19.55 million from the Toxic Substances Control Account (TSCA) to the Site Remediation Account (SRA) to fund the state's National Priorities List (NPL) obligations and state orphan sites with Priorities 1A, 1B, and 2. Health and Safety Code (HSC) section 25173.7 states the Legislature’s intent that the annual Budget Act appropriates an amount sufficient to pay for the estimated costs identified by the department in the annual Site Remediation Account Report to the SRA for direct site remediation costs. The transfer will fund the 2021 SRA total estimated costs of $18.45 million in 2021-22, and adjust for a fiscal year 2020-21transfer shortfall of $1.1 million. B. Background/History Nearly one in three people in California live within one mile of a site where DTSC is investigating or cleaning up contamination. Of these sites, 46 percent are in environmental justice communities disproportionately burdened by multiple sources of pollution. In addition to the tremendous health benefits that cleanups provide, reusing cleaned up hazardous waste sites is an investment into community and economic growth. Many prior hazardous waste sites are now redeveloped parks, shopping centers, and office buildings. There are numerous studies by government, universities, and nonprofits that identify the economic benefits of brownfields restoration. As of October 1, 2019, the United States Environmental Protection Agency (U.S. EPA) reports the following federal accomplishments and benefits resulting from leveraging resources to revitalize communities: 1,851 properties assessed 196 properties cleaned up 13,476 jobs resulting from cleanups 910 properties made ready for reuse 10,831 acres made ready for anticipated use U.S. EPA also reports a 2017 study that concludes cleaning up brownfield properties increased residential property values between 5 to 11.5 percent, resulting in additional tax revenue being generated for local governments. A U.S. EPA Region 9 paper published in 2016, Superfund Sites Work for Communities: How Superfund Redevelopment in EPA Region 9 Is Making a Difference in Communities, reports that businesses operating on 39 California Superfund sites produce $6.5 billion in annual sales with 22,987 people employed, resulting in $2.5 billion in annual employee income. NPL Sites In 1980, the federal government created the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly referred to as the "Superfund" law, to help address cleanup needs at the nation's most heavily contaminated toxic waste sites. CERCLA provides broad response authorities for the United States Environmental Protection Agency (U.S. EPA) to protect people and the environment from the risks posed by releases of hazardous substances, pollutants, and contaminants. Under CERCLA, the Superfund program identifies, investigates, and cleans up America’s most contaminated hazardous waste sites, known as National Priority List (NPL) sites. Congress amended CERCLA with the Superfund Amendments and Reauthorization Act (SARA) in 1985. Among other things, these amendments required Superfund cleanups to consider state standards and requirements, increased state involvement in every phase of a Superfund 1 cleanup and provided new enforcement authorities and settlement tools. In 2002, Congress amended CERCLA again by passing the Small Business Liability Relief and Brownfields Revitalization Act. This law created a federal program to aid state brownfield cleanup programs, clarified and modified liability issues at CERCLA sites to help reduce litigation and speed cleanups, and increased states' authority to impact whether the U.S. EPA lists a site for cleanup under the NPL, among other changes to the law. The U.S. EPA identifies and lists sites on the NPL following criteria in CERCLA. There are 1,335 sites nationwide on the NPL. Of those, there are 97 active sites in California. The U.S. EPA adds approximately one site in California per year to the NPL. Currently, responsible parties fund cleanup costs for 75 of the active California sites. DTSC oversees the cleanup of one site located on tribal lands but has no financial obligations to fund the cleanup costs or operations and maintenance expenses. The remaining 22 active sites listed are considered fund-lead NPL sites, which means the U.S. EPA has determined that there are no viable responsible parties to fund the cleanup, and, therefore, the U.S. EPA is partially funding the cleanup with federal Superfund funding. The listing of an NPL site that uses federal funds to pay for the cleanup is a regulatory action that obligates the state to pay 10 percent of the cost of constructing the cleanup remedy, and 100 percent of the cost of operating and maintaining the remedy after it is built (42 U.S.C., § 9604(c)). CERCLA requires the state to assure all future maintenance of a remedial action provided for the expected life of such action. CERCLA further defines when the U.S. EPA remedial action ends and the state operation and maintenance (O&M) begins. Once a site remedy becomes operational and functional, the U.S. EPA and the state enter into a Site Transfer Agreement to affect an orderly transfer of O&M activities and funding responsibilities. “Operational and functional” is either one year after remedy construction is complete, or when it is determined, concurrently by the U.S. EPA and the state, to be functioning properly and is performing as designed, whichever is earlier. Remedies considered “restoration” are operated by the U.S. EPA for 10 years prior to transitioning to state O&M1. NPL sites are highly contaminated and pose substantial threats to public health and the environment. They are often in densely populated urban areas with a legacy of earlier industrial use. The remediation of these sites returns blighted land to beneficial and productive use. Each year, the U.S. EPA provides DTSC with its best estimate of the state’s upcoming funding obligations for NPL sites. The listing of new sites, coupled with the transition of older sites from construction to O&M, is increasing the state’s funding obligations. In 1981, California enacted the Carpenter-Presley-Tanner Hazardous Substances Act (State Superfund Act) (Health and Safety Code Chapter 6.8) to, among other things, establish a program to provide response authority for releases of hazardous substances, including spills and hazardous substances illegally disposed that pose a threat to public health or the environment at non•federal sites. The State Superfund Act requires any response action taken or approved to meet certain requirements regarding specified state and federal regulations and to include the preparation of a health or ecological risk assessment. The State Superfund Act also requires the exposure assessment of that risk assessment to meet specified requirements, including the development of reasonable maximum estimates of exposure for both current land use conditions and reasonably foreseeable future land use conditions at the site. State orphan site cleanup includes the investigation and cleanup of properties where no responsible party has been identified who has the means to pay for the response actions needed. There are estimated to be between 150,000 to over 200,000 contaminated sites in California. Of these, DTSC has identified approximately 9,800 contaminated sites statewide that may impact or threaten groundwater designated for crops or drinking water. These sites may also expose adults and children to toxic metals or vapors where they live, work,

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