The Polanco Act: How a 1990 California Law Let Cities Reclaim Contaminated Land

In the late 1980s, the California city that wanted to redevelop a contaminated industrial site was, in most cases, a city that, in the words of the redevelopment advocates, was the predictable outcome of a liability system that did not have the statutory tools to require the parties to negotiate the cleanup. The city was, in most cases, a city that was being strangled by the brownfields. The brownfields were, in most cases, sites that the city could not develop. The sites were, in most cases, sites that the private developer would not touch. The sites were, in plain language, being abandoned to the contamination. The abandonment was, in the late 1980s, a documented problem. The problem was, in the words of the redevelopment advocates, the predictable outcome of a liability system that had been written without the statutory tools to balance the interests of the city, the owner, the lender, and the prospective purchaser. Assembly Member Richard G. Polanco, in his first term in the Assembly, wrote a law that gave the system the tools. The law was Assembly Bill 3193, the Polanco Redevelopment Act, and it was, by any measure, the foundation of the California brownfield cleanup framework that, by 2026, had returned more than 50,000 acres to productive use.

The Problem

By the late 1980s, California cities had a problem that was strangling urban redevelopment in slow motion. Tens of thousands of acres of industrial land, much of it in older downtowns, along the rail corridors that built the state, and around the ports, were contaminated by decades of gas stations, dry cleaners, metal-plating shops, leaking underground storage tanks, and legacy manufacturing. The contamination was so widespread, and the legal liability for cleaning it up so severe, that no rational private developer would touch it. And because the same law that made the contamination dangerous also made the prior owner, the current owner, the lender, the prospective purchaser, and the local government all potentially liable for the cleanup, the legal risk was distributed across every party that might otherwise have a stake in redevelopment. The result was a slow strangulation. The sites sat. The cities lost tax revenue. The communities lost jobs. The contamination sat.

What Polanco Did

Polanco’s solution, embodied in AB 3193, was to give the parties a way to negotiate the liability allocation in advance of the cleanup, with the local redevelopment agency serving as the convening authority. The law created a “brownfield” category with a defined process: the agency would identify the site, the parties would come to the table, the agency would negotiate the allocation, and the parties would execute a written agreement that protected them from future liability if they performed their side of the deal. The law also gave the agencies the authority to issue bonds to fund the upfront cleanup, with the bonds repaid through the tax increment from the redeveloped site.

The genius of the framework was that it did not eliminate liability. It allocated liability. The polluter still paid. The current owner still paid. But the lender, the prospective purchaser, and the agency itself could participate in the cleanup without the existential risk of being held responsible for the entire contamination.

The brownfield was, in 1990, a piece of land that the law had effectively taken off the tax rolls and given to the contamination. The city could not develop the land. The owner could not sell the land. The bank could not finance the land. The land was, in the words of the redevelopment advocates, the predictable outcome of a liability system that did not have the statutory tools to balance the interests. AB 3193 wrote the tools into law. The law was, by any measure, the foundation of the California brownfield cleanup framework that, by 2026, had returned more than 50,000 acres to productive use.

The Legacy

AB 3193 has, since 1990, been the foundation of the California brownfield cleanup framework. The law was, in 1990, the first state law in the country to allocate the brownfield liability in this way. The framework has, since 1990, been the model for similar frameworks in other states. The framework was, in 1998, expanded by SB 1898 (Polanco, 1998) to include the small cities and the rural communities. The framework has, since 2000, been the foundation of the state brownfield grant program. The framework is, in 2026, the operative state-level framework for the brownfield cleanup. The Polanco Redevelopment Act is the cleanest record of the California brownfield cleanup framework, and the cleanest record of the statutory allocation of the brownfield liability.