BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1071

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          Date of Hearing:  May 27, 2015


                                 Jimmy Gomez, Chair

          1071 (Atkins) - As Amended May 7, 2015

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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          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  


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          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  

          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  

             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  


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               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.



          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  


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            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  

          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. 


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            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)