BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
SB 691 (Hancock)
As Introduced
Hearing Date: May 7, 2013
Fiscal: No
Urgency: No
BP/TW
SUBJECT
Nonvehicular Air Pollution Control: Penalties
DESCRIPTION
Existing law provides rules, regulations, and enforcement
policies, including civil penalties, relating to nonvehicular
air pollution. This bill would impose a civil penalty of
$100,000 against major sources of pollution (known as Title V
sources) and $10,000 for other persons who discharge air
contaminants or other material on the first day that the air
contaminants cause harm to a considerable number of persons, the
public, business, or property.
BACKGROUND
The federal Clean Air Act (CAA), enacted in 1970, attempted to
create a nationwide solution to the growing problem of air
pollution. Under the CAA, the Environmental Protection Agency
(EPA) develops national ambient air quality standards (NAAQS)
for certain pollutants. The CAA leaves the decision of how to
implement the NAAQS up to the states through their State
Implementation Plan (SIP). Additionally, the CAA mandated the
creation of New Source Performance Standards (NSPS) for new or
modified stationary sources. California's implementation of the
CAA, following the EPA's established standards, assigned
creation of standards to the California Air Resources Board
(ARB). Legislation divided California into 35 air quality
districts. Each district is run by a local air pollution
control officer with discretion over enforcement of air
pollution regulations within that district.
(more)
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California's nonvehicular air pollution statutes provide for
civil penalties for violations of air pollution standards.
Based on the type of violation, maximum penalties range from
between $1,000 to $1,000,000 per violation per day. No minimum
penalty is required, leaving the amount prosecuted at the
discretion of the air pollution control officer. Offenses are
generally strict liability, but affirmative defenses are allowed
when officers seek more than $1,000 per day for certain
non-Title V violations. Title V violations relate to operating
permits required under the federal CAA for specified stationary
sources, such as sources emitting more than 100 tons per year of
a criteria pollutant, affected sources under acid rain
requirements, and solid waste incinerators.
This bill, sponsored by the Bay Area Air Quality Management
District, would impose a civil penalty of $100,000 against major
sources of pollution (Title V sources) and $10,000 for other
persons who discharge air contaminants or other material on the
first day that the air contaminants cause harm to a considerable
number of persons, the public, business, or property. Those
penalties would only apply for the first day of the violation -
existing civil penalties would be assessed for every day after
the first day.
This bill was heard by the Senate Committee on Environmental
Quality on April 3, 2013, and passed out on a vote of 6-2.
CHANGES TO EXISTING LAW
Existing law prohibits a person from discharging quantities of
air contaminants or other material that cause injury, detriment,
nuisance, or annoyance to any considerable number of people or
the public, or that cause, or have a natural tendency to cause
injury or damage to business or property. (Health & Saf. Code
Sec. 41700.)
Existing law provides that a person who emits an air contaminant
is strictly liable for a civil penalty of not more than $1,000
or $10,000, as specified, per offense. (Health & Saf. Code Sec.
42402.)
Existing law imposes a civil penalty of not more than $25,000
against a person who negligently emits an air contaminant per
offense. (Health & Saf. Code Sec. 42402.1.)
Existing law imposes a civil penalty of not more than $40,000
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against a person who knowingly emits an air contaminant per
offense. (Health & Saf. Code Sec. 42402.2.)
Existing law imposes a civil penalty of not more than $75,000
against a person who willfully and intentionally emits an air
contaminant per offense. (Health & Saf. Code Sec. 42402.3.)
Existing law provides that recovery of civil penalties precludes
criminal prosecution for the same offense, and when an air
district refers a violation to a prosecuting agency, the filing
of a criminal complaint is grounds requiring the dismissal of
any civil action for the same offense; however, if the civil
action includes a request for injunctive relief, that portion of
the civil action shall not be dismissed upon the filing of a
criminal complaint. (Health & Saf. Code Sec. 42400.7.)
Existing law requires civil penalties to be assessed and
recovered in a civil action brought by the Attorney General,
district attorney, or attorney for the air district. In
determining the amount assessed, the court, or in reaching a
settlement, the district, shall take into consideration all
relevant circumstances, including, but not limited to, the
following: (1) the extent of harm caused by the violation; (2)
the nature and persistence of the violation; (3) the length of
time over which the violation occurs; (4) the frequency of past
violations; (5) the record of maintenance; (6) the unproven or
innovative nature of the control equipment; (7) any action taken
by the defendant, including the nature, extent, and time of
response of the cleanup and construction undertaken, to mitigate
the violation; and (8) the financial burden to the defendant.
(Health & Saf. Code Sec. 42403.)
Existing law defines "Title V source" to mean only a stationary
source required by federal law to be included in an operating
permit program established pursuant to Title V of the federal
Clean Air Act (42 U.S.C.S. Secs. 7661 to 7661f, incl.) and the
federal regulations adopted pursuant to Title V. (Health & Saf.
Code Sec. 39053.5.)
This bill would provide that, in addition to existing civil
penalties, a person who discharges air contaminants or other
material that cause injury, detriment, nuisance, or annoyance to
any considerable number of persons or to the public, or that
endanger the comfort, repose, health, or safety of any of those
persons or the public, or that cause, or have a natural tendency
to cause, injury or damage to business or property, shall be
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assessed a civil penalty for the first day of the violation an
amount not greater than $10,000 against a person and an amount
not greater than $100,000 against a Title V source.
This bill would also make conforming and technical revisions to
the above statutes.
COMMENT
1. Stated need for the bill
The author writes:
Currently in state law, single-day violations of air quality
regulations that affect entire communities lack adequate
financial consequences. In fact, these violations have the
same maximum penalties as violations that affect only a few
individuals. For many of these violations, even for those
affecting the largest sources of air pollutions, such as
refineries of chemical manufacturing facilities, the maximum
penalties the violators may face are far too low.
SB 691 narrowly targets one-day violations that cause injury,
detriment, nuisance or annoyance to a considerable number of
persons with higher civil penalties. For the first day of a
violation, the bill establishes penalties up to $10,000 (most
sources), and $100,000 for Title V sources.
2. Chevron refinery fire
Based on the type of violation, maximum penalties range from
between $1,000 to $1,000,000 per violation per day for various
violations of air pollution regulations. This bill seeks to
increase the penalties available for "nuisance" violations to a
maximum of $100,000 for major sources of pollution (known as
Title V sources) and not more than $10,000 for other persons who
discharge air contaminants or other material. Those penalties
would only apply on the first day that the air contaminants
cause injury, detriment, nuisance, or annoyance to a
considerable number of persons, the public, business, or
property. After the first day, existing penalties would apply -
those penalties are generally set out in a stair-step type
approach based upon culpability (for example, strict liability
results in a penalty of $1,000 or $10,000, negligent emissions
result in a $25,000 penalty, while knowing emissions result in a
$40,000 penalty).
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Supporters of the bill assert the need for the increased
penalties for nuisance-type violations was demonstrated by the
August 6, 2012 fire at the Chevron refinery in Richmond,
California, which reportedly caused thousands of people to seek
medical attention after breathing contaminates expelled into the
air from the fire. An August 7, 2012 article in the San
Francisco Chronicle entitled "Hospitals see spike after Chevron
fire" reported:
As air quality officials reported the fire at Chevron's
Richmond refinery caused minimal impact to the environment,
streams of queasy and coughing people continued staggering
into East Bay emergency rooms Tuesday complaining of
ailments they attributed to the blackened inferno.
Inspectors at the Bay Area Air Quality Management District
said air samples taken from eight East Bay locations late
Monday showed exposure levels for a number of potentially
toxic pollutants were "not a significant health concern" and
that pollution levels were "significantly below federal
health standards."
Meanwhile, more than 900 were treated at emergency rooms in
Richmond, San Pablo and Oakland on Monday night and Tuesday
for symptoms apparently caused by the blaze at the Chevron
refinery in west Richmond. No serious injuries were
reported, and all but a handful of patients were quickly
treated and released, hospital officials said.
While Bay Area air quality officials excluded potentially
toxic pollutants, their analysis did not say exactly what
was in the smoke that boiled out of the refinery's No. 4
Crude Unit, only that the air around the refinery was
unlikely to cause any long-term health effects.
Calm weather helped send most of the smoke 2,000 feet off
the ground before it blew east, where it dissipated above
the Central Valley, officials said. But many residents
living in the shadow of the refinery still reported severe
reactions to the smoke, including nausea, wooziness and
difficulty breathing. (Kane and Bulwa, Hospitals see spike
after Chevron fire (Aug. 7, 2012) San Francisco Chronicle
[as of May 3, 2013].)
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The Asian Pacific Environmental Network, in support of the
increased penalties, notes that "[f]ar too often these affected
communities are low-income people and people of color. In
Richmond particularly, the areas surrounding the Chevron
refinery are home to many Asian American immigrants and refugees
who are not only exposed to polluting emissions daily, but are
the first hit with health emergencies when a dangerous fire
erupts."
The South Coast Air Quality Management District, in support,
further argues that "[t]his bill could provide stationary
sources with a greater incentive to prevent such violations at
their facilities. Such protections could go a long way in
protecting the health of residents within the South Coast Region
and throughout California."
A coalition of business groups, in opposition, assert that
"[w]hile the bill sponsor contends the bill is meant to address
major air emission incidents within an air district or
jurisdiction that disrupts the lives of thousands of people, the
bill has no standards of review or criteria to determine if any
such standard has been met. Rather, the bill would cast a broad
net and subject business, big and small, and members of the
general public to dramatically increased penalties."
3. Strict liability for nuisance violations
This bill seeks to impose strict liability on a person that
discharges air contaminants or other material that injures a
considerable number of persons by providing liability for a
civil penalty of $100,000 for Title V sources and $10,000 for
other persons. Those penalties would apply for the first day of
the violation - the current penalties would take over after
that. In comparison, existing strict liability penalties are
either $1,000 or $10,000, and, greater penalty amounts require
an additional showing of culpability on the part of the
violator. For example, negligent emissions result in a penalty
of up to $25,000, knowing violations result in penalties up to
$40,000, and willful and knowing violations allow a penalty of
up to $75,000. Releases that are willful and intentional, or
with reckless disregard for the risk of bodily injury, carry a
penalty of $125,000, or if a corporation, $500,000.
Accordingly, the policy question raised by this bill is whether
it is appropriate to impose such a penalty based on strict
liability, regardless of any proactive steps that the person or
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entity may have taken to prevent such a release. Although
significant penalties are available if some wrongdoing is shown,
the use of the negligence standard allows an air district to
look to the effects of a violation (as opposed to the underlying
cause). The opposition argues that under this bill:
Nuisance penalties are relatively low because "nuisance" is a
strict liability offense. This means that someone accused of
creating a nuisance can be held liable even if they had no
knowledge of the event and no intent to create a nuisance. An
air district simply has to allege that several people have
complained about an air emission - e.g. an odor - and the
alleged violator would be subject to enormous liability.
. . .
[T]he alleged violator has virtually no defenses to a strict
liability offense. The district only has to prove that a few
people complained or were annoyed. The district does not have
to prove how many people were exposed to air emissions, the
severity of the exposure, whether any permit conditions were
violated or whether there were any consequences of the
exposure. . . . The air district does not have any burden of
proof that the nuisance was so extraordinary that it would
justify a $100,000 penalty.
To address those issues, the opposition suggests, among other
things, that the bill provide greater specificity as to the
circumstances that would trigger increased penalties (for
example, a certain number of people seeking medical treatment).
Although it is preferable for legislation to be narrowly
targeted to the perceived problem, in this case, it is unclear
what the threshold level of harm should be to trigger these
penalties. Given the complexity of the issues in this area, the
author and sponsor should continue working with the opposition
in order to further refine the scope of the bill to ensure the
proposed penalties are, in fact, appropriate.
It should be noted that as currently drafted, the existing
statutory structure provides some inherent reassurance that
excessive penalties will not be assessed by a court or air
district. The sponsor notes that the reassurance comes from
the factors that must be taken into consideration when assessing
a penalty, and, asserts that if a person or entity does not want
to settle, the air district must to go court to recover the
penalty (thus providing judicial oversight). Alternatively, the
opposition argues that this bill would potentially create an
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incentive for the air districts, which have prosecutorial and
penalty recovery authority, to levy the highest penalties
possible.
a. Eight factors
Under existing law, Health & Safety Code Section 42403, an air
district, in reaching any settlement, must take into
consideration all relevant circumstances when determining the
amount of penalty to be assessed. That statute lists eight
factors to be considered, including, but not limited to, the
extent of the harm, the nature and persistence of the
violation, length of time over which the violation occurs,
frequency of past violations, record of maintenance, any
action taken by the defendant to mitigate the violation, and
the financial burden to the defendant. The sponsor notes
that, even under existing law, there is a possibility that the
penalty ceilings may be inappropriately high in a particular
case - the eight factors then come into play to arguably
provide guidance as to the appropriate level of penalty.
Staff notes that factors such as the extent of the harm and
financial burden to the defendant would appear to provide a
basis for a violator to object if an air district sought a
significant penalty as the result of a violation that caused
no injury (only annoyance), or, if the penalty sought by the
district would effectively put a company out of business.
As a practical matter, the increased penalty ceiling provides
greater leverage and flexibility for an air district that
seeks to negotiate a potential penalty for a nuisance
violation - the penalty both allows the air district to seek a
high penalty in an egregious situation, but, also may give
them leverage when negotiating a settlement for a minor
violation (since the violator knows the penalty ceiling is
$100,000). Both proponents and opponents concede that the
vast majority of these violations settle due to the legal
costs incurred when involving the court, but, that ability to
go to court further provides a check on the assessment of
vastly inflated penalties.
b. Judicial review
The sponsor notes that under existing law, an air district
cannot actually assess the proposed penalty, but, can seek to
settle the issue with the violator. If the violator does not
agree to the penalty amount, the district must go to court to
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enforce the penalty. Under existing law, the court must also
take into account the same eight factors that the air district
is required to consider in attempting to settle a violation.
As noted above, while it is rare that the parties end up in
court, in the case of a truly egregious penalty for a minor
violation, a violator would always have the option of not
agreeing to settle the case and, instead, force the air
district to demonstrate their case (and appropriateness of the
penalty) in court. Although the opposition contends that the
court may, as a practical matter, defer to the judgment of the
air district with respect to the eight factors, the
involvement of the court provides a neutral forum for the
violator to raise objections and demonstrate that the district
is incorrect in its assessment.
4. Remaining arguments in support and opposition
The opposition further contends that the alleged violator has
virtually no defense to a strict liability offense, and that a
district would only have to prove that a few people complained
or were annoyed. CalTax, in opposition, contends that this bill
would impose a massive tax-like penalty, and the California
Construction Trucking Association asserts that this bill would
increase penalties based simply on allegations of annoyance,
whether or not the actual emissions are harmful or in violation
of an existing permit standard or requirement.
The sponsor, in response, contends that this bill would only
apply where there is harm to communities, that inappropriate
penalties will be voided by the courts, and that agricultural
operations are specifically exempted under existing law.
Additionally, the Coalition for Clean Air, in a support if
amended position, states that they appreciate the effort to
better align the penalties to reflect the severity of
violations, but strongly urges the Committee and author to raise
the amounts to better reflect the severity.
Support : Asian Pacific Environmental Network; Coalition for
Clean Air (support if amended); Natural Resources Defense
Council; Regional Asthma Management & Prevention; South Coast
Air Quality Management District (support with amendments)
Opposition : Almond Hullers and Processors Association;
California Cement Manufacturers Environmental Coalition;
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California Chamber of Commerce; California Citrus Manual;
California Construction Trucking Association; California Cotton
Ginners Association; California Cotton Growers Association;
California Council for Environmental and Economic Balance;
California Dairies, Inc.; California Independent Oil Marketers
Association; California League of Food Processors; California
Manufacturers & Technology Association; California Metals
Coalition; California Restaurant Association; California Service
Station & Automotive Repair Association; California Taxpayers
Association; CalTax; Chemical Industry Council of California;
Citizen's Advisory Group of Industries; Independent Energy
Producers Association; Milk Producers Council; National Aerosol
Association; National Federation of Independent Business; Nisei
Farmers League; Orange County Sanitation District; The
California Railroad Industry; West Coast Chapter, Institute of
Scrap Recycling Industries; Western Agricultural Processors
Association; Western Plant Health Association; Western States
Petroleum Association; Wine Institute
HISTORY
Source : Bay Area Air Quality Management District; Breathe
California
Related Pending Legislation : None Known
Prior Legislation :
SB 1205 (Escutia, 2006), among other things, would have
increased civil penalties for non-vehicular air pollution
violations. SB 1205 failed passage on the Assembly Floor by a
vote of 36-36.
AB 1572 (Campbell, Ch. 1252, Stats. 1992), among other things,
established civil penalties for strict liability and willful and
intentional acts relating to nonvehicular air pollution.
Prior Vote : Senate Committee on Environmental Quality (Ayes 6,
Noes 2)
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