BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 335


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          Date of Hearing:  April 13, 2015


                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES


                                 Das Williams, Chair


          AB 335  
          (Patterson) - As Amended April 6, 2015


          SUBJECT:  Air quality:  minor violations


          SUMMARY:  Requires the Air Resources Board (ARB) and each local  
          air district to establish a "minor violation" program, where ARB  
          and the air districts must issue a "notice to comply" for minor  
          violations, as defined, and violators have a right to cure the  
          violation in lieu of facing a penalty or other further  
          enforcement.  This bill reestablishes a law that had been in  
          effect from 1997-2006.


          EXISTING LAW:  


          1)Designates ARB as the air pollution control agency responsible  
            for the coordination of the activities of air pollution  
            control districts and air quality management districts for the  
            purposes of the federal Clean Air Act. 

          2)Requires air districts to adopt and enforce rules and  
            regulations to achieve and maintain the state and federal  
            ambient air quality standards in all areas affected by  
            non-vehicular emission sources under their jurisdiction. 

          3)Authorizes ARB and air districts to enforce air pollution  








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            laws, including imposing administrative and civil penalties  
            for violations.

          4)Generally prohibits a person from discharging air contaminants  
            or other material that cause injury, detriment, nuisance, or  
            annoyance or endanger the comfort, repose, health or safety to  
            any considerable number of persons, or to the public, or that  
            cause, or have a tendency to cause, injury or damage to a  
            business or property.

             a)   Provides that for a violation of the above, a person is  
               strictly liable for a penalty of not more than $1,000 or  
               $10,000, as specified.  In the case that the violation  
               results in actual injury, as defined, a person is liable  
               for a civil penalty of not more than $15,000.

             b)   Provides that a person who violates the above provision  
               and who is found to have acted negligently is liable for a  
               civil penalty up to $25,000.  Persons found to have acted  
               knowingly or willfully and intentionally are liable for  
               penalties up to $40,000 and $75,000, unless injury or  
               bodily harm is shown, in which case a greater penalty  
               maximum applies.

             c)   Requires that, in determining the amount of penalty  
               assessed, that the extent of harm, nature and persistence  
               of violation, length of time, frequency of past violations,  
               the record of maintenance, the unproven nature of the  
               control equipment, actions taken by the defendant to  
               mitigate the violation and the financial burden to the  
               defendant be taken into consideration.


          THIS BILL:
          1)Requires ARB and each air district to adopt a regulation or  
            rule that classifies minor violations, as determined by  
            considering:

               a)     The magnitude, scope and severity of the violation.








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               b)     The degree to which a violation jeopardizes human  
                 health, safety or welfare or the environment.

               c)     The degree to which a violation could contribute to  
                 the failure to accomplish an important established air  
                 pollution goal or program objective.

               d)     The degree to which a violation may make it  
                 difficult to determine if the violator is in compliance  
                 with other air pollution requirements.

          2)Excludes from the definition of a minor violation any of the  
            following:

               a)     Any knowing, willful, or intentional violation.

               b)     Any violation that enables the violator to benefit  
                 economically from noncompliance, either by realizing  
                 reduced costs or by gaining a competitive advantage.

               c)     Any violation that is a chronic violation or that is  
                 committed by a recalcitrant violator, as determined by  
                 ARB or a district according to specified evidence.

          3)Requires the issuance of a notice to comply, as defined, for  
            minor violations, including a clear statement of the alleged  
            violation, a means by which compliance may be achieved, and a  
            time limit to comply, not exceeding 30 days.  Generally  
            prohibits any other enforcement action for minor violations,  
            unless ARB or the district determines that enforcement is  
            necessary to prevent harm to the public health or safety or to  
            the environment, or that assessment of a civil penalty is  
            warranted or required under federal law.

          4)Provides that the provisions above do not apply to a district  
            that, as of January 1, 2015, has in effect a program with  
            provisions similar to those required by this bill.









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          5)Requires ARB to report to the Legislature by January 1, 2020  
            regarding actions taken by ARB and the districts to implement  
            the minor violation program and the results of that  
            implementation.
          
          FISCAL EFFECT:  Unknown


          COMMENTS:  


          1)Background.  Under current law, the ARB and local air  
            districts are authorized to impose civil or administrative  
            penalties for a variety of violations of state air pollution  
            laws and regulations.  The agencies and the courts are  
            required to consider eight factors when determining the amount  
            of an administrative or civil penalty:


               a)     extent of harm caused by the violation; 


               b)     nature and persistence of the violation; 


               c)     length of time over which the violation occurs; 


               d)     frequency of past violations; 


               e)     record of maintenance; 


               f)     unproven or innovative nature of the control  
                 equipment; 


               g)     any action taken by the defendant, including nature,  








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                 extent, and time of response to cleanup and construction  
                 undertaken to mitigate the violation; and 


               h)     financial burden to the defendant.


            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 violations.  Civil penalties for stationary  
            source air emission violations are assessed based on the  
            number of days of violation and the intention of the violator.  
             In the absence of evidence to indicate negligence or worse  
            (i.e., knowledge and failure to correct or willful and  
            intentional behavior), civil penalties are assessed at penalty  
            ceilings for the strict liability classification, where the  
            violation is found to occur without proof of carelessness or  
            fault.  The current penalty ceiling for strict liability  
            violations can range from $1,000 to $10,000.


          2)History of minor violation law.  In 1996, AB 1827 (Brulte)  
            created minor violation enforcement programs for air and water  
            quality standards, including the same requirements as this  
            bill for ARB and air districts.  The intent of the program was  
            to establish enforcement mechanisms that recognize the  
            difference between violations with little or no potential to  
            cause public health or environmental harm and those that are  
            clearly the result of a bad actor, behaving in a willful and  
            egregious manner.   AB 1827 included reporting requirements to  
            evaluate the effectiveness of the program and a provision  
            sunsetting the program on January 1, 2001.


            In 2000, SB 1865 (Perata), which increased civil and criminal  
            penalties for air quality violations, also included a  
            provision extending the sunset on the minor violation program  








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            for air quality violations until January 1, 2006.  


            In 2005, SB 109 (Ortiz) contained a provision that would have  
            extended the minor violation program for air quality standards  
            until January 1, 2012.  However, the bill failed passage on  
            the Assembly Floor for unrelated provisions that would have  
            increased the criminal and civil penalties for significant  
            violations of air quality standards.  Following the failure of  
            SB 109, the minor violation program statute was repealed by  
            its own terms on January 1, 2006.


            In 2006, AB 2394 (Aghazarian) proposed to reenact the minor  
            violation program without reporting requirements or a sunset.   
            AB 2394 passed this committee, but was held in the Assembly  
            Appropriations Committee.


            This bill again proposes to reenact the same minor violation  
            program which was in effect from 1997-2006.  The bill includes  
            a report to the Legislature, but does not include a sunset.


            According to California Air Pollution Control Officers  
            Association (CAPCOA), 25 of the 35 local air districts  
            currently have a notice to comply rule or program.  CAPCOA was  
            not able to confirm whether these existing programs would  
            comply with the requirement proposed by this bill.


          3)Purpose of the regulatory system.  Regulatory systems  
            encourage or deter behaviors through the threat of penalty for  
            non-compliance.  In regulatory systems, there are varying  
            degrees of culpability, ranging from strict liability, or no  
            fault, to negligent and intentional violations.  Strict  
            liability is vital to the maintenance of a regulatory system  
            because it encourages individuals to know and comply with the  
            law or risk penalty regardless of intent.  








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            In some regulatory agencies, the risk of enforcement has been  
            described as similar to winning the lottery.  Since the  
            chances of being monitored are often slim, the only incentive  
            for complying with the law is the threat of a substantial  
            penalty.   To achieve deterrence, the penalty must be  
            sufficient to deprive any economic benefit resulting from a  
            violation, to reflect the seriousness of the violation taking  
            into account the violator's financial condition, to and deter  
            others from the temptation of noncompliance. 


            By mandating a warning, this bill could undermine the  
            deterrent effect by signaling to regulated entities that they  
            don't need to comply until they are caught.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Chamber of Commerce


          California Manufacturers and Technology Association


          California Professional Association of Specialty Contractors


          California Trucking Association


          Construction Industry Air Quality Coalition








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          Consumer Specialty Products Association


          Fresno Chamber of Commerce


          Industrial Environmental Association


          National Marine Manufacturers Association




          Opposition


          American Lung Association of California


          Bay Area Air Quality Management District


          Breathe California


          California Air Pollution Control Officers Association


          California League of Conservation Voters


          Central Valley Air Quality Coalition


          Coalition for Clean Air









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          Coastal Environmental Rights Foundation


          Natural Resource Defense Council


          Sierra Club California


          South Coast Air Quality Management District







          Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)  
          319-2092