BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1284| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 1284 Author: Ducheny (D) Amended: 6/2/10 Vote: 21 SENATE ENV. QUALITY COMMITTEE : 7-0, 4/19/10 AYES: Simitian, Runner, Corbett, Hancock, Lowenthal, Pavley, Strickland SENATE APPROPRIATIONS COMMITTEE : 10-0, 5/27/10 AYES: Kehoe, Alquist, Corbett, Denham, Leno, Price, Walters, Wolk, Wyland, Yee NO VOTE RECORDED: Cox SUBJECT : Water quality: mandatory minimum civil penalties SOURCE : Association of California Water Agencies Regional Council for Rural Counties DIGEST : This bill provides that certain violations involving the failure to file a discharge monitoring report with the State Water Resources Control Board or a Regional Water Quality Control Board are not subject to existing mandatory minimum penalties if certain requirements are met. This bill provides that a failure to file a discharge monitoring report is not a serious waste discharge violation if the discharger submits a specified statement to the regional board. The bill, until January 1, 2016, requires, with respect to certain violations involving the CONTINUED SB 1284 Page 2 failure to file a discharge monitoring report, the mandatory minimum penalty of $3,000 to be assessed only for each required report that is not timely filed, and not for each 30-day period following the deadline for submitting the report. This bill also extends the time limit under which dischargers must come into compliance with a permit requirement from five years to ten years. ANALYSIS : Existing law, under the Porter-Cologne Water Quality Control Act: 1. Provides that any person who violates prescribed provisions of the Clean Water Act or the Porter-Cologne Water Quality Control Act is subject to civil liability, and sets requirements for determining the amount of any liability. 2. Requires a mandatory minimum penalty (MMP) of $3,000 to be assessed for each serious violation, under certain circumstances. 3. Authorizes the State Water Resources Control Board (SWRCB) or a regional water quality control board (RWQCB), in lieu of assessing all or a portion of the MMP, to require a publicly-owned treatment works (POTW) serving a small community to spend an equivalent amount towards the completion of a compliance project proposed by the POTW if the POTW or SWRCB makes certain findings (e.g., compliance project is designed to correct the violations within five years, compliance project is consistent with SWRCB enforcement policy, POTW has prepared a financing plan to complete the compliance project). 4. Provides that for purposes of #3, a "POTW serving a small community" serves a population of 10,000 or fewer or a rural county, with a financial hardship as determined by the SWRCB after considering such factors as median income of the residents, rate of unemployment, or low population density. 5. Provides an exception to the imposition of MMPs for a SB 1284 Page 3 violation of an effluent limitation if the waste discharge complies with a certain time schedule order and other requirements are met. For the purposes of the exception, a time schedule cannot exceed five years, except under certain conditions. Mandatory minimum penalties . MMPs were established in 1999 in response to concerns over the SWRCB and RWQCB failing to take enforcement actions against Water Code violations. According to the SWRCB, the California Water Code Section 13385(h) requires an MMP of $3,000 for each "serious" violation. The Water Boards are also required by California Water Code 13385(i) to assess MMPs of $3,000 for multiple chronic violations. This penalty applies when the discharger does any of the following four or more times in any period of six-consecutive months: (1) Violates effluent limitations, (2) Fails to file a report of waste discharge or file and incomplete report, or (3) Violates a toxicity effluent limitation where the waste discharge requirement does not contain pollutant-specific effluent limitations for toxic pollutants. This bill 1. Revises current law to allow a regional board, after a public hearing, to extend the time schedule for bringing a waste discharge into compliance for an additional five years, to a possible total time schedule of ten years if the discharger can demonstrate that additional time is necessary in order to reach compliance with effluent limitations. 2. Provides that the failure to file a discharge monitoring report for a reporting period in which no discharges occur does not constitute a "serious violation" that gives rise to mandatory minimum penalties if the discharger submits a written statement to the appropriate regional board under penalty of perjury stating that in fact no discharges occurred and stating the reasons for the failure to file. This bill states that regardless of whether mandatory minimum penalties SB 1284 Page 4 apply to the failure to file a discharge monitoring report for a reporting period in which no discharges occur, the failure to file such a report may be subject to discretionary penalties. 3. Provides, on a one-time basis only, that where a discharger has not previously received notification from the state or regional board of an enforcement action imposing mandatory minimum penalties and where the current violation consists of failures to file discharge monitoring reports for reporting periods where dischargers did not violate numeric effluent limitations, that discharger will be subject to a total fines of $3,000 per required report. After this one-time fine, a discharger who subsequently fails to file such a report will be fiend in accordance to current law. The bill states that regardless of whether the failure to file such reports is subject to the one-time relief provided, the failure to file the required report(s) may be subject to discretionary penalties. 4. Provides that the amendments made to that section applies to dischargers who currently have outstanding notices of violation as of the effective date of the act. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee analysis, 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. SUPPORT : (Verified 6/2/10) Association of California Water Agencies (co-source) Regional Council of Rural Counties (co-source) California Association of Sanitation Agencies California Chamber of Commerce California Special Districts Association SB 1284 Page 5 California State Association of Counties California Water Association City of Camarillo Crescenta Valley Water District El Dorado Irrigation District Inland Empire Utilities Agency Lake Berryessa Resort Improvement District League of Cities Napa Berryessa Resort Improvement District Napa County Pico Water District OPPOSITION : (Verified 6/2/10) California Coast Keeper Alliance Sierra Club ARGUMENTS IN SUPPORT : According to the sponsor, MMPs are a deterrent and a punishment for willful violators, and should remain in place for that intended purpose. However, the sponsors feel that the way the statute is currently drafted; the definition of a "serious violation" warranting the imposition of an MMP is far too broad and exposes public agencies who simply failed to file a report indicating no discharges to the vast penalties. The sponsor asserts that this bill provides that certain violations involving the failure to file a discharge monitoring report for no discharges or discharges that do not reach regulated level are not subject to those MMPs. According to the Association of California Water Agencies (ACWA), there are several public agency members with permits requiring reporting which believe that they have received excessive, disproportionate fines for a simple failure to file the report. ACWA sites an example of one small water agency fine that is in excess of $600,000. ARGUMENTS IN OPPOSITION : Opponents state that exemptions in this bill from the MMP provisions of the Water Code for dischargers who fail to file required discharge monitoring reports send a message to the dischargers that these reports need not be filed - when in fact it is a condition of their permits. These permits are critical to tracking compliance with state and federal water quality laws. SB 1284 Page 6 TSM:do 6/2/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****