BILL ANALYSIS Ó AB 1071 Page 1 ASSEMBLY THIRD READING AB 1071 (Atkins and Eduardo Garcia) As Amended May 7, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+-----------------------+-------------------| |Natural |9-0 |Williams, Dahle, | | |Resources | |Cristina Garcia, | | | | |Hadley, Harper, | | | | |McCarty, Rendon, Mark | | | | |Stone, Wood | | | | | | | | | | | | |----------------+------+-----------------------+-------------------| |Appropriations |17-0 |Gomez, Bigelow, Bonta, | | | | |Calderon, Chang, Daly, | | | | |Eggman, Gallagher, | | | | |Eduardo Garcia, | | | | |Gordon, Holden, Jones, | | | | |Quirk, Rendon, Wagner, | | | | |Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: Requires each board, department, and office within the AB 1071 Page 2 California Environmental Protection Agency (CalEPA) to establish a policy on supplemental environmental projects (SEPs) that benefits environmental justice communities. Specifically, this bill: 1)Defines SEP as an environmentally beneficial project that a person subject to an enforcement action voluntarily agrees to undertake in settlement of the action and to offset some of a civil penalty. 2)Requires the Air Resources Board (ARB), Department of Resources Recycling and Recovery (CalRecycle), Department of Toxic Substances Control (DTSC), Department of Pesticide Regulation (DPR), and Office of Environmental Health Hazard Assessment (OEHHA) to establish policies on SEPs that benefit environmental justice communities. The policies shall: a) Include a public process to solicit potential supplemental environmental projects from environmental justice communities. b) Allow a SEP to comprise up to 50% of an enforcement action brought by a CalEPA board, department, or office. c) Include an annual list of SEPs that may be selected to settle an enforcement action. 3)Requires CalEPA to consolidate the list of SEPs and post the list on its Web site. FISCAL EFFECT: According to the Assembly Appropriations Committee: AB 1071 Page 3 1)Unknown, significant impacts resulting from 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: According to the OEHHA, approximately eight million Californians (21%) live in zip codes that are considered "highly impacted" by environmental, public health, and socioeconomic stressors. Nearly half of all Californians live within six miles of a facility that is a significant greenhouse gas emitter (46%), and they are disproportionately people of color (62%). Throughout California, people of color face a 50% higher risk of cancer from ambient concentrations of air pollutants listed under the Clean Air Act. These impacts are felt by all Californians. ARB estimates that air pollution exposure accounts for 19,000 premature deaths, 280,000 cases of asthma, and 1.9 million lost work days every year. In 2000, legislation [SB 89 (Escutia), Chapter 728, Statutes of 2000] required CalEPA to convene the Environmental Justice Working Group and develop an agency-wide environmental justice strategy. In 2001, follow up legislation [SB 828 (Alarcon), Chapter 765, Statutes of 2001] established a timeline for these requirements and required CalEPA to update its report to the Legislature every three years. In October of 2004, CalEPA released its Environmental Justice Action Plan, but did not complete the required updates for a decade. AB 1071 Page 4 SB 535 (De Léon), Chapter 850, Statutes of 2012, required the Cap and Trade Proceeds Investment Plan to direct a minimum of 25% of the available moneys in the fund to projects that provide benefits to identified disadvantaged communities; and, a minimum of 10% of the available moneys in the fund to projects located within identified disadvantaged communities. SB 535 also required CalEPA to identify disadvantaged communities (i.e., environmental justice communities). In order to accurately identify environmental justice communities, OEHHA, on behalf of CalEPA, created the California Communities Environmental Health Screening Tool (CalEnviroScreen). CalEnviroScreen is a screening methodology that can be used to help identify California communities that are disproportionately burdened by multiple sources of pollution. In February of 2014, CalEPA issued an Environmental Justice Program Update, which included four main areas for future actions: 1) increase efforts to eliminate discrimination on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, genetic information, or disability in any program or activity conducted or funded by the state; 2) develop guidance to promote a sound legal framework for CalEPA to advance environmental justice goals and objectives; 3) lead an agency-wide working group dedicated to increase compliance with environmental laws in communities with relatively higher environmental burdens; and, 4) add additional indicators to CalEnviroScreen. 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 boards, departments, and offices. The guidelines specify that an SEP must improve, protect, or reduce risks to public health and the environment at large. The enforcing agency must have the opportunity to help shape the scope of the project AB 1071 Page 5 before it is implemented and the project must not be commenced 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 the State Water Resources Control Board (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, allow SEPs up to 50% of the amount of the penalty. CalEPA's 2012 Environmental Compliance and Enforcement Report provides information on the use of SEPs in California. For hazardous waste law violations, three cases totaling over $33.9 million, of which $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. This bill would require CalRecycle, OEHHA, and DPR to adopt SEP policies directed toward environmental justice communities and specify that SEPs can account for up to 50% of an enforcement action. Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0000691 AB 1071 Page 6