BILL ANALYSIS Ó SB 753 Page 1 Date of Hearing: July 2, 2013 ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE Anthony Rendon, Chair SB 753 (Steinberg) - As Amended: June 24, 2013 SENATE VOTE : 29-9 SUBJECT : Central Valley Flood Protection Board: enforcement SUMMARY : Provides the Central Valley Flood Protection Board (Board) with new and clarified authorities for addressing unauthorized and nonconforming structures built in or on levees or other areas of the flood control system under the jurisdiction of the Board. Specifically, this bill : 1)Repeals the article "Encroachments on Flood Control Works," deletes obsolete provisions, and revises and reorganizes enforcement authorities under a new article entitled "Enforcement of Unauthorized Activities and Encroachments." 2)Provides the Board with an administrative process for enforcement actions to address the prevention and removal of unauthorized and nonconforming structures and other activities (encroachments) that could interfere with the safe operation of the flood system. Makes this administrative process in addition to, and in lieu of, resorting to the courts. 3)Creates a progressive three-step enforcement process for violations, if not corrected. A notice of violation is followed by a cease and desist order and, finally, an enforcement hearing is held to consider the issuance of an enforcement order. 4)Allows an enforcement order to require the removal, modification, or abatement of an encroachment, flood system improvement, or activity causing a violation and require restoration of the site. 5)Allows a person or entity against which the Board has issued an enforcement order to seek judicial review of the enforcement order. 6)Retains current provisions allowing a court of competent jurisdiction to impose civil penalties between $500 and SB 753 Page 2 $30,000 per violation and, in addition, to impose between $1,000 and $15,000 per day for intentional and knowing violations. 7)Adds additional authorities allowing the Board, after an enforcement hearing and issuance of an enforcement order, to impose administrative penalties of between $500 and $30,000 per violation in the same manner that a court can impose civil penalties. 8)Enables the Board, if it must seek a civil action, to recover its costs for removing an encroachment as well as attorney's fees and costs for bringing litigation. 9)Provides the Board with authority to adopt emergency regulations necessary to implement the provisions of this bill. EXISTING LAW : 1)Provides the Board authority for the protection and oversight of levees, weirs, channels, and other features of federally and state-authorized flood control facilities located in the Sacramento River and San Joaquin River drainage basins. 2)Requires plans that involve the construction, enlargement, or alteration of any levee, embankment, canal, or other excavation in the bed of or along or near the banks of the Sacramento or San Joaquin Rivers or any of their tributaries or specified lands to be approved by the Board before such activity is commenced. 3)Authorizes the Board to issue an order directing a person or public agency to cease and desist from undertaking, or threatening to undertake, an activity that may encroach on levees, channels, or other flood control works under the jurisdiction of the Board. 4)Allows the Board to seek a court action to enforce compliance. FISCAL EFFECT : According to the Senate Appropriations Committee analysis, likely costs of $75,000 to $150,000 from the General Fund to prepare emergency regulations for the new enforcement procedures. SB 753 Page 3 COMMENTS : The purpose of this bill is to provide the Board with the authority to take enforcement actions to prevent or remove illegal encroachments, which are structures and activities on, or affecting, state property rights and the safe operation of the flood system. This bill would allow enforcement actions through an administrative hearing process instead of the Board being limited to potentially costly and time-consuming court actions. The standard of care applicable to the State for the protection and maintenance of the levee and flood system was gravely increased by the landmark decision Paterno v. State of California . In February 1986, one of the greatest storms on record in California occurred leading to major rains and flooding raging throughout the State for more than a week. In Northern California, the Yuba River crested near the town of Linda just upstream of Marysville and Yuba City reaching 76 feet at a point where the maximum levee capacity was 80 feet. However, while the waters were receding, the Linda levee began to boil and then give way, eventually flooding hundreds of homes and a shopping center in the City of Linda. Many of those affected sued the State for failing to maintain the levee. Although the courts found the levee failure was originally due to poor design and construction by Yuba County, in the end it did not matter. In Paterno , the Third District Court of Appeal held the state liable for playing a role in operating and maintaining the system stating that "[w]hen a public entity operates a flood control system built by someone else, it accepts liability as if it had planned and built the system itself." Supporting arguments : The author is worried about the State incurring Paterno-type liability if it cannot prevent and remove illegal encroachments efficiently and effectively. According to the author, the "board has hundreds of unresolved encroachment problems. The current administrative framework lacks teeth and the board must often resort to expensive and time consuming litigation to obtain resolution" which is "very costly to the general fund." The Attorney General's Office estimates that enforcing just one current case where a landowner was told multiple times to cease and desist may cost "$110,000 to $150,000 if the case goes to trial. The author adds that the, "Board is not authorized under law to receive attorney fees, so the state may not recoup any of the $110,000 to $150,000. In SB 753 Page 4 addition, the lawsuit may take years to resolve, during which time the obstruction will remain in place." Other supporters state that this bill provides the Board "much-needed new authority to act as a deterrent and encourage voluntary removal at the beginning of encroachment projects, while ensuring appropriate due process for landowners." Supporters add that federal law threatens the State with "the loss of Federal financial assistance in case of levee failures" if the State cannot meet federal standards for levee integrity. Opposing arguments : Landowners with previously permitted homes on levees are concerned they could now be found out of compliance with encroachment laws and are concerned that this bill could force them to "live under a confusing cloud of uncertainty, that at any moment their legitimately obtained encroachment permits could be revoked; thereby, requiring homeowners to tear down their homes at their own cost." Other opponents fear that although the Board has "existing eminent domain authority" this bill will allow the Board "not to pay compensation." Suggested amendments : Committee staff recommends that the author consider two substantive amendments and a technical one. First, this bill contains a provision allowing the Board to bypass the issuance of a notice of violation and move straight to a cease and desist order "where it deems a notice of violation would not be in the best interest of the state." However, the "best interest of the state" is not an objective standard. Potentially affected parties could benefit from a clearer articulation of the circumstances under which bypassing the issuance of a notice of violation would be justified. Second, landowners are concerned that this bill may change the standards applicable to whether or not homes with pre-existing permits that are later found nonconforming could be removed and whether compensation would be due. The author's office states that nothing in this bill is meant to change either of those standards. Therefore, the author may wish to consider an amendment making an affirmative statement that nothing in the bill is meant to change existing standards regarding the circumstances under which a previously permitted home could be removed and whether or not compensation would be due. Finally, the Administrative Procedures Act defines an emergency SB 753 Page 5 as "a situation that calls for immediate action to avoid serious harm to the public peace, health, safety, or general welfare." Committee staff recommends, as a technical fix, that this bill conform to that definition when articulating the need for emergency regulations. REGISTERED SUPPORT / OPPOSITION : Support Central Valley Flood Protection Board (sponsor) Central Valley Flood Control Association Opposition Garden Highway Community Association one individual Analysis Prepared by : Tina Cannon Leahy / W., P. & W. / (916) 319-2096