BILL ANALYSIS Ó
AB 976
Page 1
Date of Hearing: April 16, 2013
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
AB 976 (Atkins) - As Amended: April 4, 2013
SUBJECT : ENFORCEMENT PENALTIES: CALIFORNIA COASTAL COMMISSION
ACT
KEY ISSUE : SHOULD, AS THE LEGISLATIVE ANALYST OFFICE
RECOMMENDS, THE COASTAL COMMISSION HAVE SIMILAR DISCRETIONARY
AUTHORITY, AS OTHER STATE ENVIRONMENTAL PROTECTION AGENCIES
POSSESS, TO IMPOSE ADMINISTRATIVE CIVIL PENALTIES FOR COASTAL
ACT VIOLATIONS TO ENHANCE ENVIRONMENTAL PROTECTION EFFORTS?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This bill would give the Coastal Commission (Commission) the
same authority as various other state environmental protection
agencies possess to impose administrative penalties on people
found to be violating the Coastal Act after a public hearing
before the Commission. Surprisingly, currently the Commission
is quite unique among many similar regulatory agencies in its
inability to utilize administrative civil penalties to improve
enforcement efforts. Other agencies that have such enforcement
tools, including the Bay Conservation and Development Commission
(BCDC), State Lands Commission, California Energy Commission,
California Air Resources Board, Regional Air Pollution Control
Districts, Oil Spill Response Administrator, State Water
Resources Control Board, Regional Water Quality Control Boards,
and the Integrated Waste Management Board.
In support of this proposed new enforcement tool is the Planning
and Conservation League, on behalf of several California
environmental organizations, including, but not limited to the
California Coastkeeper Alliance, Sierra Club California, The
Wildlands Conservancy and the Environmental Defense Center.
The opposition, consisting of business, construction,
manufacturing, and real estate companies, argues that the status
quo ensures adequate environmental protection and that this
measure will only create a "bounty hunter" dynamic between the
Commission and violators (notwithstanding the fact that so many
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regulatory agencies already possess such enforcement tools and
there has been no evidence provided of broad abuse of these
enforcement tools by other similarly situated environmental
enforcement bodies). This measure was recently passed on April
3, 2013, by the Natural Resources Committee.
SUMMARY : Seeks to grant the Commission the same authority many
other similarly situated environmental protection and other
state agencies possess to impose civil penalties for Coastal Act
violations. Specifically, this bill :
1)Authorizes the Commission, by a majority vote of the
commissioners, to impose civil penalties when appropriate for
Coastal Act violations, in an amount not to exceed 75 percent
of the amount of the maximum civil penalty that may be imposed
in the superior court, as specified. (i.e. no more than
$22,500.)
2)Requires the Commission to take into account the following
factors when determining the amount of civil liability to be
imposed:
a) The nature, circumstance, extent, and gravity of the
violation.
b) Whether the violation is susceptible to restoration or
other remedial measures.
c) The sensitivity of the resource affected by the
violation.
d) The cost to the state of bringing the action.
e) With respect to the violator, any voluntary restoration
or remedial measures undertaken, any prior history of
violations, the degree of culpability, economic profits, if
any, resulting from, or expected to result as a consequence
of, the violation, and such other matters as justice may
require.
3)Prohibits a person from being subject to both administrative
civil liability imposed by the Commission and monetary civil
liability imposed by a superior court for the same act or
failure to act, unless the person fails to pay the
administrative penalty, fails to comply with a restoration or
cease and desist order issued by the Commission in connection
with the penalty action, or challenges any of these actions by
the Commission in a court of law.
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4)Authorizes the Commission to file a lien on the property of a
violator in the amount of the penalty assessed by the
Commission if the violator fails to pay the penalty imposed by
the Commission.
5)Declares it is not the intent of the Legislature that
unintentional, minor violations that only cause de minimis
harm should lead to civil penalties, if the violator has acted
expeditiously to correct the violation consistent with the
Coastal Commission Act.
6)Provides, for purposes of this section, that "person" does not
include a local government, a special district, or an agency
thereof when acting in a legislative or adjudicative capacity.
7)Provides that $1,500,000 of the funds annually derived from
penalties associated with a violation of the Coastal Act to be
deposited in the Violation Remediation Account of the State
Coastal Conservancy Fund, as adjusted, and that any additional
funds be deposited in the Coastal Act Services Fund, until
appropriated by the Legislature, for the purposes of carrying
out the Coastal Commission Act.
EXISTING LAW :
1)Authorizes the 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. (Public
Resources Code Section 30810. All further statutory
references are to the Public Resources Code unless otherwise
indicated.)
2)Provides that a superior court can impose civil penalties of
up to $30,000 on any person or local government who violates
the provisions of the Coastal Act, of a certified Local Costal
Program or of a coastal development permit. Additional
penalties of not less than $1,000 a day, but not more than
$15,000 per day, may be imposed for violations that are
determined to be intentional and knowing. (Section 30820.)
3)Provides that the Commission may maintain an action for
exemplary damages and may recover an award, the size of which
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is left to the discretion of the court. In exercising its
discretion, the court shall consider the amount of liability
necessary to deter further violations. (Section 30822.)
4)Provides that funds deposited into the Violation Remediation
Account of the Coastal Conservancy Fund are subject to
appropriation by the Legislature to carry out the provisions
of the Coastal Act. (Section 30620.1.)
5)Authorizes the Bay Conservation and Development Commission
(BCDC) to impose administrative civil penalties not to exceed
more than two thousand dollars ($2,000), for each day in which
that violation occurs or persists, or more than thirty
thousand dollars ($30,000) for a single violation.
(Government Code Section 66641.5(e).)
6)Authorizes the State Lands Commission to impose administrative
civil penalties not to exceed more than twenty-seven thousand
five hundred dollars ($27,500) per violation. (Public
Resources Code Section 71216.)
7)Authorizes the administrator for oil spill response to impose
administrative civil liability not to exceed one hundred
thousand dollars ($100,000) for each violation, and each day
or partial day that a violation occurs in a separate
violation. (Government Code Section 8670.67.)
COMMENTS : This bill grants similar discretionary authority to
the Coastal Commission (Commission) to impose potential civil
penalties where appropriate for violations of the Coastal Act
that several other state environmental protection agencies
possess, though in many cases the potential civil penalties
being authorized are much lower than those authorized for other
environmental protection agencies.
Numerous other state and local agencies already have similar
authority to impose administrative civil penalties for
violations of applicable environmental and resource protection
laws, including but not limited to the Bay Conservation and
Development Commission (BCDC), State Lands Commission,
California Energy Commission, California Air Resources Board,
Regional Air Pollution Control Districts, Oil Spill Response
Administrator, State Water Resources Control Board, Regional
Water Quality Control Boards, and the Integrated Waste
Management Board. This bill similarly brings the Coastal
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Commission within this environmental protection enforcement
tradition.
Background : Currently, only a superior court may impose civil
liability for violations of the Coastal Act. Once collected,
these penalties are transferred to the Violation Remediation
Account of the Coastal Conservancy Fund.
Beginning in 1980, the Commission has had "order" authority to
stop violations of the Coastal Act. This "order" authority
takes many forms, such as the ability to issue restoration and
cease and desist orders after a public hearing.
However, unlike many other state environmental protection
agencies, the Commission has not had the ability to impose
appropriate and limited penalties for substantial violations of
the Coastal Act. As the Commission validly points out,
penalties are a critical component of all environmental
statutes, and are almost always the primary means to persuade
would-be violators to comply with the law. The deterrent
component of any regulatory scheme is important, particularly
for environmental laws. A credible threat of penalties to
prevent violations in the first place can greatly increase the
ability of an environmental agency to obtain voluntary
compliance, and greatly increase its ability to protect the
environment.
While the Commission has the authority to seek civil penalties
in court, the Commission claims that it is infrequently done,
citing that, "the process is very slow, expensive, and
resource-intensive means to impose penalties." And this is all
the more so in our overly-stressed court system today. The
Commission also uses consent orders, where defendants agree to
the order and usually agree to pay a penalty. A consent order
avoids a potentially higher fine for the defendant and the costs
and delays of litigation. However, according to the Commission,
these powers create "a perverse incentive for non-cooperation":
Parties who agree to settle pay penalties, and those
who do not settle are rarely pursued for penalties
because this requires litigation. A completely
recalcitrant party may often be in a better position
than a settling party, if they refuse to comply and
take their chances that the state will not pursue them
for penalties. For these parties, by and large,
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unless they challenge the administrative order in
court and the state files a cross complaint for
penalties and pursues it vigorously, they escape all
penalties under the Coastal Act.
LAO Urges Support for the New Enforcement Tools Provided in the
Bill: In an analysis of the Commission's budget from the 2011-12
Budget Bill, the Legislative Analyst Office (LAO) recommended
that the Legislature grant the California Coastal Commission the
authority to levy administrative civil penalties in order to
reduce the costs associated with enforcing compliance with the
Commission's regulations and to stabilize the funding for
related activities, as this bill proposes.
Due Process Concerns of Opponents : Opponents of the bill argue
that the imposition of monetary penalties should remain with the
judicial branch because of the relative lack of procedural
rights if the Commission could unilaterally impose
administrative civil penalties. Among other things, the
opponents believe 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."
However, as the Commission correctly points out, all of its
actions, including potential imposition of civil penalties were
appropriate, are always subject to judicial review, just as with
all the other environmental protection agencies that have long
had the authority. According to the Commission, this measure
grants authority to impose civil penalties no more complex than
the permit and enforcement matters commonly heard by the
Commission, such as the underlying facts and law as to whether a
violation exists at all. The opposition's argument also does
not address the fact that other administrative bodies routinely
and successfully make similar penalty decisions with much higher
potential dollar amounts at issue.
To assure proper procedural rights, the Commission would be
required to follow notice requirements and evidentiary rules
already required by existing statutes and regulations for many
other enforcement authorities. Because the imposition of
administrative penalties would simply be a component of a duly
noticed public hearing, hearing to decide civil penalties would
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be appropriately noticed and conducted consistent with existing
law and regulations. For example, the Administrative
Adjudication Bill of Rights (Government Code Section 11425.10 et
seq.) provides specific due process protections when an agency
conducts an adjudicative proceeding, including, but not limited
to, notice and the opportunity to be heard, including the
opportunity to present and rebut evidence, and a prohibition on
ex parte communications.
ARGUMENTS IN SUPPORT : The Planning and Conservation League, on
behalf of several California environmental organizations,
including, but not limited to the California Coastkeeper
Alliance, Sierra Club California, The Wildlands Conservancy and
the Environmental Defense Center, states in strong support of
the bill, that the, "lack of administrative penalty authority
has been a longstanding deficiency in the Commission's
enforcement program, which diminishes the Commission's ability
to obtain swift voluntary resolution of outstanding violations.
The judicial process is an inefficient and resource-intensive
means for imposing penalties, meaning this option is rarely
exercised by the Commission. As a result, with little change of
prosecution and no risk of monetary penalty, violating the
Coastal Act is a low-risk and cost-effective choice."
ARGUMENTS IN OPPOSITION : A coalition of business, construction,
manufacturing, and real estate companies writes in opposition to
the bill. The coalition states that this measure is
"unnecessary, is bad public policy, and would create an
unacceptable dynamic whereby the Commissioners and the
Commission's staff would be incentivized to impose fines and
penalties, at the expense of due process and rights of the
accused, rather than pursuing those fines and penalties through
the judicial branch where that function properly belongs."
The coalition also claims that the Commission will pursue
violators with the zeal of a "bounty hunter":
AB 976 creates a "bounty hunter" mentality among the
Coastal Commission staff, would strip alleged
violators of due process afforded by the courts,
provide the Coastal Commission sweeping civil penalty
authority more appropriately reserved for the courts,
and provides a slippery slope to use administrative
civil penalties to augment the Coastal Commission
budget.
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Also in opposition, the Mendocino County Cattlemen's Association
writes that this bill will have serious negative impacts on the
viability of ranching operations in California. According to
the opposition, "in order to continue to productively and
sustainably manage our lands, we must be able to operate without
the fear of civil penalties as levied by the Coastal
Commission."
REGISTERED SUPPORT/OPPOSITION:
Support
California Coastkeeper Alliance
California Coastal Commission
California Coastal Protection Network
California Native Plant Society
Environmental Defense Center
Environmental Water Caucus
Environmental Action Committee of West Marin
Heal the Bay
North County Watch
Planning and Conservation League
Sierra Club California
Surfrider Foundation
The Wildlands Conservancy
Opposition
American Council of Engineering Companies of California
California Apartment Association
California Association of Realtors
California Aquaculture Association
California Building Industry Association
California Business Properties Association
California Cattlemen's Association
California Chamber of Commerce
California Citrus Mutual
California Construction and Industrial Materials Association
California Farm Bureau Federation
California Fisheries and Seafood Institute
California Independent Petroleum Association
California Sea Urchin Commission
California Travel Association
California Wetfish Producers Association
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Mendocino County Cattlemen's Association
Nisei Farmers League
Ventura County Cattlemen's Association
Western Agricultural Processors Association
Western States Petroleum Association
Analysis Prepared by : Drew Liebert and Rebecca Kramer / JUD. /
(916) 319-2334