BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
AB 976 (Atkins)
As Amended May 28, 2013
Hearing Date: July 2, 2013
Fiscal: Yes
Urgency: No
BCP
SUBJECT
Coastal Resources: California Coastal Act of 1976: Enforcement
Penalties
DESCRIPTION
This bill would authorize the California Coastal Commission to
impose an administrative civil penalty that may not exceed 75
percent of the amount the court could impose for the same
violation 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 (Commission), initially
created by voter initiative and permanently established by the
California Coastal Act of 1976 (Act), 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 seeks to 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:
(more)
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Currently, in order for the commission to issue a fine or
penalty, the commission must file a case in the superior
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. . . .
Accordingly, this bill would allow the Commission to impose an
administrative civil penalty in an amount not to exceed 75
percent of the amount that the court may impose for the same
violation. This bill is substantially similar to SB 588 (Evans,
2011), which was not set for hearing in this Committee, and AB
226 (Ruskin, 2009), which was approved by this Committee but
later gut-and-amended on the Senate Floor.
CHANGES TO EXISTING LAW
Existing law , the California Coastal Act of 1976, authorizes the
California Coastal Commission (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 violations that are
deemed intentional and knowing. (Pub. Res. Code Sec. 30820.)
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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.)
This bill would additionally allow the Commission to impose an
administrative civil penalty not to exceed 75 percent of the
amount of the maximum penalty that may be imposed by a court,
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, as specified.
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 if a person fails to pay a penalty
imposed by the Commission, the Commission may 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 the intent of the
Legislature to ensure that unintentional, minor violations of
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the Act that only cause de minimus harm will not lead to the
imposition of civil penalties if the violator has acted
expeditiously to correct the violation.
This bill would sunset on January 1, 2017.
COMMENT
1. Stated need for the bill
According to the author:
It is a fundamental principle that preventing a law from
being broken is preferable to needing to enforce a law after
it has been broken. For public agencies with enforcement
responsibilities, having the ability to deter violations of
the laws they must uphold is a cornerstone of the regulatory
framework. For environmental enforcement agencies,
deterrence is especially imperative because fully restoring
a damaged natural resource can be extremely difficult or
even impossible in many cases.
The most common mechanism among public enforcement agencies
to discourage violations of the law is their authority to
impose monetary penalties administratively - otherwise known
as Administrative Civil Liability (ACL) authority. The
rationale behind ACL is that an adequate monetary penalty
will remove any significant economic benefit which results
from failing or refusing to comply with the law.
The Coastal Commission is a rare exception among state and
local enforcement agencies in California. Despite its
tremendous responsibility to implement and enforce the
Coastal Act which protects California's 1,100 miles of
coast, the Coastal Commission wholly lacks administrative
penalty authority.
The consequences of the Commission's inability to deter
violations of the Coastal Act are clear and present. At
Commission meetings, dissatisfaction is regularly expressed
by members of the public about the persistence of
acknowledged violations that have not been resolved by the
Commission. Indeed, these complaints are validated by the
Commission's current backlog of over 1,800 open enforcement
cases.
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At the current rate of resolution, it would take more than
100 years to address the existing cases assuming that no new
cases were reported. However, new enforcement cases are
opened faster than the Commission can close its existing
cases because the Commission lacks the necessary enforcement
mechanism to deter violations.
. . .
AB 976 allows the California Coastal Commission the ability
to enforce against intentional violations of the coastal
act. AB 976 accomplishes this goal by granting the
Commission the ability to administratively impose fines upon
serious and intentional violators of the California Coastal
Act.
2. Administrative penalties
Under existing law, the California Coastal Commission
(Commission) has 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. Those penalties must be imposed by a court, which,
according to the author, results in expensive litigation, and
requires the Commission to retain the Attorney General to
litigate cases on its behalf as well as defend the Commission in
court.
This bill would additionally allow the Commission to impose an
administrative civil penalty in an amount not to exceed 75
percent of the amount that may currently be imposed by a court.
Regarding the need for that authority, the Commission asserts
that "[b]ecause neither the Commission nor the Attorney General
has the necessary resources to litigate the more than 1,800
backlogged enforcement cases currently pending, the Commission's
preferred method of resolution is through the issuing of Cease
and Desist Orders. While staff can sometimes negotiate the
payment of voluntary settlements through 'consent orders,'
violators that refuse to work cooperatively with the Commission
cannot be assessed any penalties. This creates a reverse
incentive for voluntary resolution, and no deterrence at all for
violating the Coastal Act. As a result, new cases are reported
faster than the Commission can resolve them, and the backlog
continues to grow." The author further notes that state courts
have been overburdened and underfunded, and that, as a result,
"[c]ases frequently take a year or more to come to trial. For
violations of the Coastal Act, this delay can mean that damage
to environmentally sensitive habitats persists without repair,
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and access to free public spaces continues to be denied."
A coalition of business, manufacturing, and real estate
associations, in opposition, assert that "allowing the
Commission to impose administrative civil penalties [] is
unnecessary, is bad public policy, and would create an
unacceptable dynamic whereby the Commissioners and Commission's
staff would be incentivized to impose fines and penalties, at
the expense of due process and rights for the accused, rather
than pursuing those fines and penalties through the judicial
branch where that function properly belongs." The opposition
further contends that "it is difficult to believe that there are
ongoing egregious violations and harm to the environment that
the Coastal Commission has failed to pursue, or lacks the
authority to pursue," and that the current practice of pursuing
enforcement penalties in court is not costly to the Commission
because the Attorney General's services are paid for through the
Attorney General's budget. In response, the author notes that
there are currently 1,800 open enforcement cases, and that
"[t]he Attorney General has very limited resources to bring the
Commission's cases to court. In the last 10 years, the
Commission has initiated litigation in only four (4) exceptional
cases. And in those rare circumstances when the Commission can
elevate enforcement cases to court, it is not even guaranteed
that a judgment can be collected when the Attorney General
prevails on behalf of the Commission."
Staff notes that when this Committee heard AB 226 (Ruskin,
2009), the author of that bill accepted suggested amendments
(included in this bill) to clarify that the proposed
administrative penalties would be imposed in the context of a
duly noticed public hearing. That clarification was important
to ensure that the procedure for assessing those penalties
complied with procedural due process (generally requiring notice
and a meaningful opportunity to be heard), and was consistent
with the penalty authority of other state agencies. The
Commission describes the proposed process as follows:
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 [Public Resources Code]
section 30810), a hearing on issuance of a restoration order
(pursuant to [Public Resources Code] 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 [Public Resources Code] 30812). The
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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.
It should also be noted that the present bill is based upon a
recommendation by the Legislative Analyst's Office to "[enact]
legislation enabling the commission to issue fines and penalties
directly for enforcement actions, rather than through the court
process . . . ."
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:
"Property owners alleged to have violated the Coastal Act would
be afforded less due process in the Commission's proceedings
than they would otherwise for any other permit or planning
matter before the Commission. Commissioners are allowed under
statute to communicate with applicants on any matter before the
Commission as long as they disclose the communications.
However, Commission staff has advised commissioners not to
engage in communications with alleged violators. Individuals
facing potentially significant fines should be afforded at least
the same level of communication that any other person with a
proceeding before the Commission is provided."
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 penalties. The Commission also maintains that
other administrative bodies routinely and successfully make
similar penalty decisions with higher dollar amounts. The
Coastal Commission further states:
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
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communications regarding enforcement matters precisely
because proceedings are quasi-adjudicatory proceedings and
ex-parte communications would jeopardize the validity of the
public hearing process.
The Commission additionally notes that all penalties so
collected would be deposited into the Violation Remediation
Account, which is administered by the State Coastal
Conservancy, and is subject to appropriation by the
Legislature.
4. 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 their legislative or adjudicative capacities. Staff notes
that that exemption is identical to language added to AB 226
(Ruskin, 2009) to address the belief of the League of California
Cities that ". . . the Commission should [not] have 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."
5. 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 a super lien
that takes precedence over other liens), the bill states that
the lien "shall have the force, effect, and priority of a
judgment lien."
6. Author's amendments agreed to in previous Committee
The author agreed in the Senate Committee on Natural Resources
and Water to take two amendments in this Committee due to
procedural timing constraints. Those amendments would: (1)
require the Commission to prepare and submit a report to the
Legislature by January 15, 2016; and (2) provide that violators
of the Coastal Act who fix certain violations within 30 days of
receiving notice of the violation be exempted from the proposed
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administrative civil penalties. Those amendments ensure that
the Legislature has information as to the effectiveness of the
penalties prior to the January 1, 2017 sunset date, and,
consistent with the language stating the intent to not impose
penalties for unintentional, minor violations, allow a property
owner to correct a violation within 30 days of notification from
the Commission.
Author's amendments:
On page 3, strike line 34 and insert:
(h) Administrative penalties pursuant to subdivision (a) shall
not be assessed if the property owner corrects the violation
consistent with this division within 30 days of receiving
written notification from the commission regarding the
notification, and if the alleged violator can correct the
violation without undertaking additional development that
requires a permit under this division. This subdivision shall
not apply to violations of previous permit conditions.
(i) The commission shall prepare and submit, pursuant to
Section 9795 of the Government Code, a report to the
Legislature by January 15, 2016, that includes all of the
following:
(1) The number of new violations reported annually to the
commission from January 1, 2014 to December 31, 2015,
inclusive.
(2) The number of violations resolved from January 1, 2014 to
December 31, 2015, inclusive.
(3) The number of administrative penalties issued pursuant to
this section, the dollar amount of the penalties, and a
description of the violations from January 1, 2014, to
December 31, 2015, inclusive.
(j) This section shall remain in effect only until January 1,
2017, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2017, deletes or
extends that date.
Support : Advocate Committee for Green Foothills; Azul; Black
Surfers Collective; California Coastal Protection Network;
California Coastkeeper Alliance; California Native Plant
Society; Coastwalk California; Environmental Action Committee of
West Marin; Environmental Defense Center; Environmental Defense
Fund; Environmental Protection Information Center; Environmental
Water Caucus; Friends of Del Norte; Green California; Heal the
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Bay; League for Coastal Protection; National Parks Conservation
Association; Natural Resources Defense Council; North County
Watch; Northcoast Environmental Center; Ocean Conservancy; Paw
PAC; Planning and Conservation League; Save the Park; Sierra
Club California; Surfrider Foundation; Terra Foundation, San
Luis Obispo; The Wildlands Conservancy; WiLDCOAST
Opposition : Alliance for Local Sustainable Agriculture;
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
Cotton Ginners and Growers Association; California Farm Bureau
Federation; California Fisheries and Seafood Institute;
California Independent Petroleum Association; California
Manufacturers and Technology Association; California Railroad
Industry; California Sea Urchin Commission; California Travel
Association; California Wetfish Producers Association; Employers
Council of Mendocino County; Mendocino County Cattlemen's
Association; Nisei Farmers League; Orange County Board of
Supervisors; Orange County Business Council; Southwest
California Legislative Council; Ventura County Cattlemen's
Association; Western Agricultural Processors Association;
Western States Petroleum Association
HISTORY
Source : California Coastal Commission
Related Pending Legislation : None Known
Prior Legislation :
SB 588 (Evans, 2011) See Background.
AB 226 (Ruskin, 2009) See Background.
Prior Vote :
Senate Committee on Natural Resources and Water (Ayes 6, Noes 2)
Assembly Floor (Ayes 42, Noes 32)
Assembly Appropriations (Ayes 12, Noes 5)
Assembly Judiciary (Ayes 6, Noes 2)
Assembly Natural Resources (Ayes 6, Noes 3)
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