BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                      AB 1071

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          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  


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          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  

             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:  


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          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.   


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          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  

          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  


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          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  

          Analysis Prepared by:                                               
                          Elizabeth MacMillan / NAT. RES. / (916) 319-2092    


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