BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 226
Assemblymember Ruskin
As Amended June 26, 2009
Hearing Date: July 14, 2009
Public Resources Code
BCP:jd
SUBJECT
California Coastal Act of 1976: Enforcement
DESCRIPTION
This bill would authorize the California Coastal Commission to
impose administrative civil penalties between $5,000 and $50,000
for violations of the California Coastal Act.
This bill would additionally require the Commission to take
specified factors into account when determining the amount of
the penalty, and allow the Commission to record a lien if the
penalty is not paid.
BACKGROUND
The California Coastal Commission, initially created by voter
initiative and permanently established by the California Coastal
Act of 1976, seeks to protect the state's natural and scenic
resources along the California coast. The Commission's primary
responsibility is to implement the provisions of the Act,
including regulation of development in the coastal zone - the
commission's core program activities include issuing and
enforcing permits for coastal development.
This bill would implement several recommendations made by the
Legislative Analyst's Office (LAO) in its analysis of the
2008-09 Budget Bill relating to the Coastal Commission. That
LAO report stated:
Currently, in order for the commission to issue a fine or
penalty, the commission must file a case in the superior
(more)
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court. This process is cumbersome and results in few fines
and penalties issued by the commission due to the high cost
of pursuing enforcement through the courts. This, in turn,
is reflected in the commission's budget where enforcement
fines and penalty revenues remain stable at $150,000, with
no change from the current year. By contrast, based on our
review of other state and local regulatory agencies in the
resources area, those which administratively assess
fines/penalties tend to have this as a growing source of
support for their enforcement activities. . . .
We further recommend the enactment of legislation enabling
the commission to issue fines and penalties directly for
enforcement actions, rather than through the court process,
as an additional means to stabilize funds available to the
commission. . . .
. . . [I]n order that permit fee and penalty revenues
collected by the commission can be used to support the
commission's permitting and enforcement activities, we also
recommend the enactment of legislation to delete the
current-law requirement that these revenues be transferred
to [State Coastal Conservancy] for purposes of developing
and maintaining coastal public access.
Accordingly, this bill would allow the Coastal Commission to
impose an administrative civil penalty between $5,000 and
$50,000 for each violation of the Act, and require penalties be
deposited into the Coastal Act Services Fund.
CHANGES TO EXISTING LAW
1. Existing law , the California Coastal Act, authorizes the
Coastal Commission, after a public hearing, to issue a cease
and desist order if it determines that someone is undertaking
or threatening to undertake any activity that requires a
Coastal Development Permit or that may be inconsistent with a
previously issued permit. (Pub. Res. Code Sec. 30810.)
Existing law permits a superior court to impose civil
liability of up to $30,000 on any person or local government
who performs or undertakes development that is in violation of
the Act or inconsistent with a coastal development permit,
local coastal program, or certified port master plan, as
specified. Additional penalties of not less than $1,000 a
day, but not more than $15,000 per day may be imposed for
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violations that are deemed intentional and knowing. (Pub.
Res. Code Sec. 30820.)
This bill would additionally allow the Commission to impose
an administrative civil penalty of not less than $5,000, but
not more than $50,000, for each violation of the Act. Those
penalties must be imposed by a majority vote of the
commissioners present in a duly noticed public hearing.
This bill would provide that in determining the amount of
civil liability, the commission shall take into account the
following factors: (1) the nature, circumstance, extent, and
gravity of the situation; (2) whether the violation is
susceptible to restoration or other remedial measures; (3) the
sensitivity of the resource affected by the violation; and (4)
the cost to the state of bringing an action.
This bill would provide that a person shall not be subject to
both monetary civil liability under the provisions added by
this bill and monetary civil liability imposed by a superior
court for the same act or failure to act. This bill would
further provide that if a person who is assessed a penalty
under this bill fails to pay the administrative penalty,
otherwise fails to comply with a restoration or cease and
desist order issued in connection with the penalty action, or
challenges any of these actions by the commission in a court
of law, the commission may maintain an action or otherwise
engage in judicial proceedings to enforce those requirements
and the court may order relief, as specified.
This bill would provide that failure to pay the fine imposed
by the Commission shall allow the Commission to record a lien
on the property in the amount of the penalty assessed by the
Commission. That lien shall have the force, effect, and
priority of a judgment lien.
This bill would define "person" as not including local
governments, special districts, or agencies thereof when
acting in their legislative or adjudicative capacities.
This bill would further codify that it is not the intent of
the Legislature that unintentional, minor violations that only
cause de minimus harm should lead to civil penalties, if the
violator has acted expeditiously to correct the violation
consistent with the Act.
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2. Existing law provides that funds received from the payment
of a penalty are to be deposited into the Violation
Remediation Account of the Coastal Conservancy Fund, until
appropriated by the Legislature, for purposes of carrying out
the Act. (Pub. Res. Code Sec. 30823.)
Existing law establishes the Coastal Act Services fund, to be
administered by the Commission. The moneys in the fund, upon
appropriation by the Legislature, shall be expended to enforce
the Coastal Act and to provide services to local government,
permit applicants, public agencies, and the public
participating in the implementation of this division. (Pub.
Res. Code Sec. 30620.1.)
This bill would, instead, provide that all funds received from
the payment of a penalty shall be deposited in the Coastal Act
Services Fund, until appropriated by the Legislature, for the
purpose of carrying out the Act.
COMMENT
1. Stated need for the bill
According to the author:
Currently, only a court can impose penalties for violations
of the Coastal Act. The judicial process is a very slow,
expensive and resource-intensive means to impose penalties,
and is therefore done infrequently. Moreover, the
Commission cannot represent itself in court; instead, the
Attorney General acts on the Commission's behalf. The AG's
office has limited resources, and is unable to bring many
cases. The AG filed 4 cases since 2003 on behalf of the
Commission and filed cross-complaint[s] for another 25 cases
initiated by violators challenging Commission orders. As a
result, the state doesn't collect nearly the money it should
for violations of the Coastal Act.
By contrast, most other state and local regulatory agencies
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in the resources area have the authority to administratively
assess fines and penalties. Penalties are a critical
component of environmental statutes and are the main means
used to persuade would-be violators to comply with the law.
A credible threat of penalties to prevent violations can
greatly increase the ability of an environmental agency to
obtain voluntary compliance, and significantly increase
protection of the environment.
AB 226 would give the Coastal Commission the ability to
impose administrative penalties on people found to be
violating the Coastal Act, after a public hearing before the
Commission
2. Administrative penalties
This bill would allow the Coastal Commission to impose an
administrative civil penalty of between $5,000 and $50,000 for
each violation of the Act. That ability would augment the
Commission's current authority to, among other things, seek
civil penalties of up to $30,000, a daily penalty between $1,000
and $15,000 for intentional and knowing violations, and
exemplary damages. Despite that authority, the author notes
that "the Commission is currently backlogged on over 1,300
enforcement cases. And, at this time, there is only one staff
position working on enforcement cases." The Sierra Club and
the California Coastkeeper Alliance, in support of the proposed
authority, note that currently only a court can impose penalties
for violations of the Coastal Act and contend:
The judicial process is very slow, expensive and
resource-intensive means to impose penalties, and is
therefore done infrequently. Moreover, the Commission
cannot represent itself in court; instead the Attorney
General acts on the Commission's behalf. The AG's office
has limited resources, and is unable to bring many cases.
Thus, the state doesn't address nearly the number of
violations it should. By contrast, most other state and
local regulatory agencies in the resources area have the
authority to administratively assess fines and penalties,
allowing them to quickly and efficiently deal with
violations.
A coalition of business, construction, manufacturing, and real
estate companies, in opposition, express concern that the
proposed authority, combined with the shifting of revenue from
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the Coastal Conservancy Fund to the Coastal Act Services Fund,
would "create an unacceptable dynamic whereby the Commissioners
and Commission[] staff would be incentivized to impose fines and
penalties to augment their operating budget." Specifically, the
opposition contends that this bill would create a "bounty
hunter" dynamic, that imposition of penalties should remain with
the judicial branch, that property owners who violate the Act
would receive less due process, and that the current method for
assessment of penalties is appropriate. (See Comment 3.)
The Commission, in response, contends that any administrative
penalty would be subject to challenge in court, that other
governmental agencies have similar administrative penalty
authority (such as the San Francisco Bay Conservation and
Development Commission and the State Water Resources Control
Board) with no demonstrated "bounty hunter" effect, and that the
funding component is secondary and in response to a
recommendation of the Legislative Analyst's Office. (See Comment
4 for discussion of the shift in funding.)
Staff notes that while the author's office has provided examples
that demonstrate a wide variety of agencies do have authority to
assess administrative penalties, those provisions generally
specify the means by which the violating party receives notice
of the potential. In response to committee staff's inquiry
about notice that would be provided in this instance, the
California Coastal Commission states:
The penalties imposed pursuant to this new section would be
imposed in the context of a hearing on issuance of a cease
and desist order (pursuant to section 30810), a hearing on
issuance of a restoration order (pursuant to section 30811),
or a hearing to determine whether a violation has occurred
so that a notice of violation can be recorded against the
property (pursuant to 30812). The existing statutes and the
regulations for each of these types of hearings already
provides for multiple types of notice. Therefore, the
imposition of administrative penalties would simply be a
component of a duly noticed public hearing that would be
noticed and conducted consistent with existing law and
regulations.
Consistent with that statement, the following amendment is
suggested:
Suggested amendment :
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On page 2, line 11, after "hearing" insert:
in compliance with the requirements of section 30810, 30811,
or 30812
It should also be noted that the present bill is based upon a
recommendation by the LAO to "[enact] legislation enabling the
commission to issue fines and penalties directly for enforcement
actions, rather than through the court process, as an additional
means to stabilize funds available to the commission."
3. Opposition's judiciary related concerns
As noted above, the opposition contends that the imposition of
monetary penalties is a judicial function and should remain with
the judicial branch. The opposition further argues that: "An
individual facing potentially significant fines and penalties
should be afforded due process through the judicial system where
witnesses must be qualified to testify and are sworn in,
testimony is taken, witnesses are cross-examined, rebuttal is
allowed, and no time restrictions are imposed, all before a
judge. The Coastal Commission does not swear in witnesses, does
not require that witnesses be qualified to testify, allows
hearsay, does not provide for cross examination or rebuttal,
sets time limitations for testimony for the alleged violator but
not for its staff, and provides no opportunity for expanded
testimony on what are often complex matters of a technical
nature. "
In response, the Commission notes that it has always been a
quasi-judicial agency that takes action on enforcement and other
matters, that the Commission's actions are subject to judicial
review, and that the Commission's current power to impose permit
requirements and issue cease and desist orders are decisions
that address matters of much greater financial consequence than
the proposed fines. The Commission also maintains that other
administrative bodies routinely and successfully make similar
penalty decisions with higher dollar amounts.
The opposition also contends that property owners alleged to
have violated the Coastal Act would be afforded less due process
in the Commission's proceedings, specifically, the opposition
maintains that "Commission staff has advised commissioners not
to engage in communications with alleged violators." In
response, the Coastal Commission argues:
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Just as plaintiffs or defendants cannot lobby a judge or
juror in a court of law, it is not appropriate for an
alleged violator to contact Commissioners regarding an
enforcement proceeding pending before the Commission. Both
the Commission's Chief Counsel and the Attorney General have
advised the Commission not to engage in such ex parte
communications regarding enforcement matters precisely
because proceedings are quasi-adjudicatory proceedings and
ex parte communications would jeopardize the validity of the
public hearing process.
4. Depositing funds into the Coastal Act Services Fund
In addition to the above recommendation, the LAO further
recommended legislation to eliminate the revenue transfer to the
Coastal Conservancy (another state agency). Specifically, the
LAO stated:
As we previously recommended, in order that permit fee and
penalty revenues collected by the commission can be used to
support the commission's permitting and enforcement
activities, we also recommend the enactment of legislation
to delete the current-law requirement that these revenues be
transferred to [State Coastal Conservancy] for purposes of
developing and maintaining coastal public access.
This bill seeks to implement that recommendation by amending
Section 30823 of the Public Resources Code to provide that funds
are deposited into the Coastal Act Services Fund, as opposed to
the Violation Remediation Account of the Coastal Conservancy
Fund. As a result, the author's staff notes that funds
received from penalties would be expended by the Commission, not
the State Coastal Conservancy, and therefore be used for
specific activities of the Commission.
5. Exemption for legislative and adjudicative decisions of
local agencies
This bill would provide that "person" does not include local
governments, special districts, or agencies thereof when acting
in the legislative or adjudicative capacities. Staff notes that
that exemption was to address the belief of the League of
California Cities that: ". . . the Commission should [not] have
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the administrative authority to unilaterally fine local
governments for their legislative and adjudicative decisions -
especially if those decisions would provide the Commission
additional leverage over [an] unrelated zoning code or
ordinance as it applies in the coastal zone."
6. Ability to record a lien
This bill would further provide that the failure to pay the fine
imposed by the Commission shall allow the Commission to record a
lien on the property in the amount of the assessed penalty. To
clarify that the lien's priority is established based on the
time of recordation (and to ensure that it is not super lien
that takes precedence over other liens), the bill was amended on
June 26, 2009 to clarify that the lien "shall have the force,
effect, and priority of a judgment lien."
7. Clarifying amendments
The following amendment is suggested by Legislative Counsel to
clarify the lien provision.
Clarifying amendment :
On page 3, strike out lines 10 through 12, inclusive, and
insert:
(e) If a person fails to pay a penalty imposed by the
commission pursuant to this section, the commission may record
a lien on the property in the amount of the penalty assessed
by the commission. This lien shall
Support : Sierra Club; California Coastkeeper Alliance;
California Coastal Commission; Environmental Defense Center;
Ocean Conservancy; Heal the Bay; Environment California;
Planning and Conservation League; Green California
Opposition : California Council of Engineering Companies of
California; California Association of Realtors; California
Business Properties Association; California Building Industry
Association; California Chamber of Commerce; California
Manufacturers and Technology Association; Los Angeles Chamber of
Commerce; Majestic Realty Co.
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HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation : None Known
Prior Vote :
Assembly Committee on Natural Resources (Ayes 6, Noes 3)
Assembly Committee on Judiciary (Ayes 7, Noes 3)
Assembly Appropriations Committee (Ayes 10, Noes 4)
Assembly Floor (Ayes 47, Noes 31)
Senate Committee on Natural Resources and Water (Ayes 7, Noes 4)
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