BILL ANALYSIS
SB 1433
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: SB 1433
AUTHOR: Leno
AMENDED: As Introduced
FISCAL: Yes HEARING DATE: April 19, 2010
URGENCY: No CONSULTANT: Caroll
Mortensen
SUBJECT : AIR POLLUTION PENALTIES: INFLATION
ADJUSTMENT
SUMMARY :
Existing law establishes fines and penalties for specified
violations of nonvehicular (stationary source) air pollution
laws (Health and Safety Code 42400 et seq.).
This bill requires the Air Resources Board (ARB) to adjust the
upper limits for specified fines and penalties for inflation
for nonvehicular air pollution laws overseen by ARB and local
air districts on an annual basis beginning in 2011.
COMMENTS :
1)Purpose of Bill . According to the author, inflation
steadily reduces the deterrent effect of fixed air penalty
ceilings. The most commonly-used penalty category (strict
liability violations) has been a constant $1000 since the
early 1980's. Inflation has significantly reduced the
deterrent effect of this ceiling over time.
2)Background .
a) In general, not just for environmental or public
health and safety violations, fines and penalties are
established for three main objectives. The first is to
ensure swift compliance with the law. This helps to
minimize the negative impact that continued violation in
law could pose. Second, it is to remove any advantage
the violator may have obtained by failing to comply with
the law. This strives to eliminate competitive and/or
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economic advantage that a non-compliant entity may gain
by being out of compliance. This helps ensure a level
playing field for regulated entities. Finally, penalties
are set at levels sufficient to discourage future
violations. This should deter the violator and others
from violating requirements in the future.
These objectives hold true for environmental compliance,
including air pollution laws. Most fines and penalties
are established during the legislative process and may
not be reexamined for years, and in some cases, decades.
This creates a situation that fines and penalties do not
keep pace with inflation and they no longer are the
deterrent that they were when the law was passed.
b) What violations are covered under SB 1433? This bill
focuses on just a small portion of violations and related
fines and penalties in the air pollution arena. It is
specific to stationary source violations that are
primarily overseen by local air pollution control
districts. The amounts in the effected sections range
from $1000 strict liability fines established in the
early 1980's to $1 million fines for corporations that
are responsible for great bodily injury or death related
to a willful or intentional release of an air contaminant
established in 1992. For illustration, the $1000 fine
established in 1983 would be valued at $2176.11 in 2010
dollars.
c) Ceilings not floors: The fines and penalties affected
by this bill do not have minimum penalties associated
with them and the inflator is for the 'ceiling' of the
fine or penalty. The courts and the air districts are
required to take into consideration mitigating factors
when assessing fines and penalties which provides for
flexibility and often results in fines and penalties
below the ceiling. Nor is this bill retroactive and does
not require the ARB to update the current fine and
penalty levels to 2010 dollars and then apply the
inflator. Thus, the $1000 fine used as an example in (b)
above would only be adjusted prospectively and not be
re-established at the 2010 level of $2176.11 then have
the inflator applied. For sake of comparison, if the
provisions of this bill would have taken effect in 2009,
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the $1000 dollar fine would have been adjusted to
$1010.27 for 2010.
d) Other environmental fines and penalties: The proposal
of inflators for fines and penalties is not new. For
example, the US Environmental Protection Agency (EPA)
adjusts the statutory civil monetary penalties for
inflation that may be assessed for violations of
EPA-administered statutes and their implementing
regulations. US EPA is required to review the civil
monetary penalties under the statutes it administers at
least once every four years and to adjust such penalties
as necessary for inflation according to a specified
formula.
e) Model for other fines and penalties? This bill
focuses on a rather narrow sector of air pollution
violations. As a broader policy matter, consideration
should be given to an approach that establishes an
inflator for all fines and penalties, both prospectively
for new fines and penalties as well as retrospectively
for those that currently do not.
3)Related Legislation . AB 846 (Torrico) generally applies an
inflator to a wide range of environmental fines and
penalties. (This bill is in the Senate Governmental
Organization Committee.)
4)Considerations . The author may wish to consider using
California's consumer price index formulated by the
Department of Industrial Relations rather the United States
CPI from the Bureau of Labor Statistics.
SOURCE : Breathe California / Bay Area Air Quality
Management District
SUPPORT : American Lung Association
California Air Pollution Control Officers
Association
Planning and Conservation League
Sierra Club California
Union of Concerned Scientists
OPPOSITION : None on file
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