BILL ANALYSIS Ó AB 1071 Page 1 Date of Hearing: May 27, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 1071 (Atkins) - As Amended May 7, 2015 ----------------------------------------------------------------- |Policy |Natural Resources |Vote:|9 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill requires each board, department and office within the California Environmental Protection Agency (CalEPA) to establish a policy on supplemental environmental projects (SEPs) to benefit environmental justice communities. Specifically, this AB 1071 Page 2 bill: 1)Defines SEP as an environmentally beneficial project a person subject to an enforcement action agrees to undertake in settlement of the action and to offset a portion of a civil penalty. 2)Requires the Air Resources Board (ARB), CalRecycle, the Department of Toxic Substances (DTSC), the Department of Pesticide Regulation (DPR), and the Office of Environmental Health Hazard Assessment (OEHHA ) to establish policies on SEPs to benefit environmental justice communities. Requires the policies to include the following: a) A public process to solicit potential supplemental environmental projects from environmental justice communities. b) A provision allowing a SEP to comprise up to 50% of an enforcement action brought by a CalEPA board, department, or office. c) An annual list of SEPs that may be selected to settle a portion of an enforcement action. 3)Requires CalEPA to consolidate and post the list of SEPs on its website. FISCAL EFFECT: 1) Unknown significant revenue shifts resulting from AB 1071 Page 3 penalty diversions. Current policy developed by CalEPA suggests a cap of 25% for penalty diversions to a SEP. This bill increases the cap to 50% for SEP funding for environmental justice projects (all CalEPA enforcement/penalty funds). Depending on the cost pressures on the various funds, it is very likely other expenditures would have to be reduced. 2) Absorbable administrative costs. COMMENTS: 1)Purpose. According to the author, there is no strong mechanism to ensure communities disproportionally impacted by multiple sources of pollution receive any improvements after environmental damage has occurred. When an environmental violation occurs, there is no mechanism to ensure that the communities who are directly impacted by the violation are able to receive any benefits. This bill addresses that problem by requiring all CalEPA boards, departments, and offices to establish a specific SEP policy for environmental justice communities. 2)Supplemental environmental projects. SEPs are environmentally beneficial projects that a violator agrees to undertake as part of a settlement for an enforcement action, but which the violator is not otherwise legally required to perform. In 2003, CalEPA released guidelines for the use of SEPs for its AB 1071 Page 4 boards, departments, and offices. The guidelines require SEPs to improve, protect, or reduce risks to public health and the environment at large. The enforcing agency must have the opportunity to shape the scope of the project before it is implemented and the project must not commence until the enforcing agency has identified a violation. Finally, the SEP must not be required by a federal, state, or local law or regulation. CalEPA's SEP guidelines suggest limiting the SEP to 25% of the total enforcement action. Within CalEPA, ARB, DTSC, and SWRCB have adopted SEP policies. ARB and DTSC's policies are consistent with CalEPA's guidelines and allow SEPs up to 25% of the amount of the enforcement action. SWRCB, consistent with authority granted by SB 1733 (Aanestad), Chapter 404, Statutes of 2006, allows SEPs of up to 50% of the amount of the penalty. According to CalEPA's 2012 Environmental Compliance and Enforcement Report, for three hazardous waste law violations totaling over $33.9 million, $5.5 million was used for SEPs. ARB assessed just under $16.1 million in penalties, and $525,000 was used for SEPs. In the report, SWRCB provided aggregated data for "backlogged violations," which showed total penalties of over $25 million, and $2.5 million for SEPs. 3)Environmental Justice. According to the federal Environmental Protection Agency (EPA), Environmental Justice is the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies. AB 1071 Page 5 Environmental justice will be achieved when everyone enjoys the same degree of protection from environmental and health hazards and equal access to the decision-making processes. Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081