BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 1284 (Ducheny) Hearing Date: 05/10/2010 Amended: 04/26/2010 Consultant: Brendan McCarthy Policy Vote: EQ 7-0 SB 1284 (Ducheny), Page 2 _________________________________________________________________ ____ BILL SUMMARY: SB 1284 exempts certain violations of waste discharge reporting requirements from existing mandatory minimum penalties. The bill also extends the time limit under which dischargers must come into compliance with a permit requirement from five years to ten years. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Upgrading permit tracking $360 Special * system Reduced penalty revenueUnknown Special ** Additional enforcement cost Unknown Special * * Waste Discharge Permit Fund. ** Waste Discharge Permit Fund and Cleanup and Abatement Fund. _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Under current law, parties that discharge waste into rivers and streams must meet waste discharge requirements set by the State Water Resources Control Board or a regional water quality control board. Dischargers are required to file periodic reports documenting the amount and characteristics of their discharges. Current law establishes mandatory minimum penalties of $3,000 for several specified violations of the law, including failure to report on discharges. There are several exceptions to the mandatory minimum penalty requirements. For instance, a regional board may make an exception if the discharger has a plan for coming into compliance within five years (or ten years if the discharger is in the process of upgrading its facilities to meet specified federal requirements). SB 1284 (Ducheny), Page 2 SB 1284 exempts certain violations of reporting requirements from mandatory minimum penalties. Specifically, the bill exempts violations for a failure to file a discharge monitoring report when the State Water Board or a regional water board has not notified the discharger of the violation within 90 days. The bill exempts violations for a failure to file a discharge monitoring report for any period when there was no discharge. The bill exempts violations for a failure to file a discharge monitoring report for any period in which discharges did not violate the effluent limitations in the waste discharge requirement. SB 1284 also allows the Water Board or regional water boards to avoid assessing a minimum mandatory penalty if the discharger has adopted a plan to come into compliance that will take not more than ten years. Dischargers are currently required to provide reports to regional water board and/or the State Water Board. However, the water boards do not have a system in place to systematically record the receipt of these reports. Thus the water boards often do not realize that required reports are overdue. In some instances, dischargers have failed to file reports for several years and were never notified of this violation. Upon later review, these dischargers have been assessed very large fines for ongoing violations of the reporting requirement. The State Water Board indicates that, in order to provide timely notification to dischargers of late reports, it will need to upgrade its tracking system. The State Water Board indicates that it will need about $360,000 in additional staff and contract funds to upgrade their systems. Because the bill exempts some violations from mandatory minimum penalties, the bill is likely to reduce future penalty revenues. The amount of any potential penalty revenue loss is unknown. Staff notes that by eliminating penalties for non-reporting when no discharge has occurred or when no violations of waste discharge requirements have occurred, some dischargers may elect not to file reports under these circumstances. However, because the water boards may not know why dischargers have stopped reporting, the water boards may incur additional enforcement costs to follow up with dischargers that have stopped filing reports. The extent of this impact is unknown. SB 1284 (Ducheny), Page 2 AB 25 (Gilmore) provides alternative penalties for public school districts that violate waste discharge requirements. That bill is in the Senate Environmental Quality Committee.