BILL ANALYSIS AB 226 Page 1 Date of Hearing: May 20, 2009 ASSEMBLY COMMITTEE ON APPROPRIATIONS Kevin De Leon, Chair AB 226 (Ruskin) - As Amended: May 6, 2009 Policy Committee: Natural ResourcesVote:6-3 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill authorizes the California Coastal Commission to impose administrative penalties upon violators of the California Coastal Act. Specifically, this bill: 1)Authorizes the commission, by majority vote, to impose administrative penalties, ranging from $5,000 to $50,000, against violators of the Coastal Act. 2)Allows the commission to file a lien against property of a violator for failure to pay the penalty. 3)Directs all funds derived from these penalties be deposited in the Coastal Act Services Fund to fund commission activities, upon appropriation by the Legislature. FISCAL EFFECT 1)Potential penalty revenues to the commission, in the range of $500,000 to $2,000,000 a year. This revenue could displace an equal amount of commission funding from the GF. 2)Minor savings, less than $150,000 a year, to the commission in avoided staffing and other expenses related to pursuing Coastal Act violations in court. 3)Potential minor savings to the AG's office from representing the commission before court. 4)Loss of annual penalty revenue, potentially in the hundreds of thousands of dollars, to the Coastal Conservancy. AB 226 Page 2 COMMENTS 1)Rationale. The author contends penalties are necessary to all environmental statutes to persuade would-be violators to comply with the law, thereby avoiding harm to the environment. Unlike many other environmental protection agencies, the commission currently is not authorized to levy penalties for violations of the laws the commission is tasked to protect. For these reasons, the author seeks to equip the commission penalty authority, consistent with recommendations made by the Legislative Analyst's Office. AB 226 Page 3 2)Background . a) The State Coastal Act of 1976 permanently established the Coastal Commission, following its initial creation by a voter initiative in 1972. The act seeks to protect the state's resources along California's coast. The commission's primary responsibility is to implement the act's provisions, including regulation of development in the coastal zone. It is also the state's planning and management agency for the coastal zone. Under the Coastal Act, all nonexempt development in the coastal zone requires a permit. That permitting process allows the Coastal Commission and local governments to review proposed projects to ensure that they will not have impacts inconsistent with the environmental protection policies of the Coastal Act and of the plans created by local governments to implement the Coastal Act, known as "Local Coastal Programs" (LCPs). b) Penalties Not Among Commission's Enforcement Tools. To address violations of the Coastal Act, the commission generally uses cease and desist orders to halt ongoing violations and to obtain compliance with the Coastal Act or LCPs. The commission generally uses restoration orders to bring about removal of unpermitted development and/or restoration of damaged coastal resources. But the commission's enforcement options do not include monetary penalties, which only a court can impose. Nor can the commission represent itself in enforcement cases that go to court. Rather, the Attorney General must represent the commission, adding time and expense to enforcement of the Coastal Act. Under existing law, all enforcement revenues are transferred to the Coastal Conservancy to fund its coastal access program. c) Many Enforcement Agencies Have Penalty Authority. The commission may not be the only environmental/resource agency lacking the authority to impose monetary penalties. It is, however, atypical. Other state environmental protection agencies that possess penalty authority include the Bay Conservation and Development Commission, State Lands Commission, California Energy Commission, Department of Health Services, Air Resources Board, Department of Fish and Game, State Water Resources Control Board, and the AB 226 Page 4 Integrated Waste Management Board. d) Commission Attributes Backlog to Lack of Penalty Authority. Currently, there is a backlog of 1,300 pending Coastal Act violation enforcement cases. The commission blames this backlog, in part, on its lack of penalty authority. Because violators know the commission lacks to resources to pursue monetary violations for most violations in court, the commission claims that many violators choose to delay compliance on the assumption that they will never face monetary penalties. 3)Fear of the Bounty Hunter. Opponents claim that, armed with the authority provided by this bill, the commission will become a bounty hunter, seeking opportunities to extract penalty revenue from supposed violators of the Coastal Act, penalty revenue that, under this bill, would be available to fund commission activities. Opponents also see in the bill a lack of procedural rights in that the commission could unilaterally impose administrative penalties. However, these opponents do not address the record of other agencies successfully managing similar penalty authority or the fact that commission decisions are subject to judicial review. Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081