BILL ANALYSIS                                                                                                                                                                                                    

                               Senator Wieckowski, Chair
                                 2015 - 2016  Regular 
          Bill No:           AB 1071
          |Author:    |Atkins and E. Garcia                                 |
          |Version:   |5/7/2015               |Hearing      |7/15/2015       |
          |           |                       |Date:        |                |
          |Urgency:   |No                     |Fiscal:      |Yes             |
          |Consultant:|Laurie Harris                                        |
          |           |                                                     |
          SUBJECT:  Supplemental environmental projects.

          Existing law:  
          1) Defines "environmental justice" as "the fair treatment of  
             people of all races, cultures, and incomes with respect to the  
             development, adoption, implementation, and enforcement of all  
             environmental laws, regulations, and policies."  (Government  
             Code 65040.12)

          2) Requires the Secretary for Environmental Protection to convene  
             a Working Group on Environmental Justice to assist the Agency  
             in developing an agencywide strategy for identifying gaps in  
             existing programs, policy or activities that may impede  
             achievement of environmental justice, as specified.  Public  
             Resources Code (PRC) 71113)

          3) Requires each board, department, and office within the  
             California Environmental Protection Agency (CalEPA), in  
             coordination with the Secretary and the Director of the Office  
             of Planning and Research (OPR), to review programs, policies,  
             and activities and identify and address any gaps that may  
             impede the achievement of environmental justice.  (PRC  

          4) Requires the CalEPA to identify "disadvantaged communities"  
             based on geographic, socioeconomic, public health, and  
             environmental hazard criteria.  (Health and Safety Code 39711)


          AB 1071 (Atkins)                                        Page 2 of  

          5) Under compliance with the provisions of the Federal Water  
             Pollution Control Act as Amended in 1972 (Water Code 13385):

             a)    Defines a "supplemental environmental project" (SEP) as  
                "an environmentally beneficial project that a person agrees  
                to undertake, with the approval of the regional water board,  
                that would not be undertaken in the absence of an  
                enforcement action."

             b)    Allows the state or regional water board to direct a  
                portion of the penalty amount of a penalty to be expended on  
                an SEP in accordance with the enforcement policy of the  
                state board.

          6) Allows a Regional Water Quality Control Board (regional board)  
             to allow a violator, pursuant to the Storm Water Enforcement  
             Act of 1998, to reduce penalties by up to 50% by undertaking a  
             supplemental environmental project (SEP) in accordance with the  
             enforcement policy of the State Water Resources Control Board  
             (SWRCB) and any applicable guidance document.  (WAT 13399.35)

          This bill:  

          1) Defines: 

             a)    An "environmental justice community" (EJ community) as a  
                disadvantaged community, identified pursuant to Section  
                39711 of the Health and Safety Code.
             b)    A "supplemental environmental project" (SEP) as an  
                environmentally beneficial project that someone subject to  
                an enforcement action voluntarily agrees to in a settlement  
                to offset some of a civil penalty.

          2) Requires each board, department, and office within the  
             California Environmental Protection Agency (CalEPA) to  
             establish a policy on SEPs that benefits EJ communities.

          3) Requires that the SEP policy include, at minimum:

             a)    A public solicitation process for potential SEPs from EJ  
             b)    An allowance that the SEP may be up to 50% of the  
                enforcement action.


          AB 1071 (Atkins)                                        Page 3 of  
             c)    An annual list of SEPs that may be selected from to  
                settle a portion of the enforcement action.

          4) Requires the Secretary of CalEPA to compile a list of SEPs and  
             post it on the agency's Internet Web site.

          1) Supplemental Environmental Policies (SEPs) Overview.  As of  
             2007, twenty-eight states and the District of Columbia had  
             formal policies in the form of legislation, executive agency  
             regulation or guidelines on SEPs.  In a report from the same  
             year, the Public Law Research Institute noted that SEPs  
             represent a "real and practicable opportunity to provide  
             significant benefits to all the stakeholders" including direct  
             benefits to the environment.  

             They also note, however, that one must be aware of the  
             potential pitfalls of using SEPs over direct penalties.  These  
             might include insufficient transparency and open process  
             leading to inequities for both violators and affected  
             communities and a perceived softening of enforcement penalties.  
              In order to make the best use of SEPs, it follows that clear  
             guidelines and regular monitoring, evaluating, and reporting on  
             SEPs programs are essential.

             In 2015, the United States Environmental Protection Agency  
             released an update to the 1998 U.S. EPA Supplemental  
             Environmental Projects Policy.  The federal agency notes in the  
             update that they are in strong support of SEPs to "secure  
             significant environmental and public health benefits beyond  
             those achieved by compliance, and to help address the needs of  
             communities impacted by violations of environmental laws."

          2) SEP Guidance in California.  In 2003, CalEPA released  
             recommended guidance on SEPs for its boards, departments, and  
             offices (BDOs) in settlements of environmental enforcement  
             cases.  Qualifications to list a project as an SEP include  
             ensuring that the project meets the specified definition and  
             implementation criteria, has an appropriate cost in relation to  
             fines paid, fits within a specified category, and that all  
             legal guidelines, including nexus, are satisfied.  

             Specifically, SEPs must improve, protect, or reduce risks to  


          AB 1071 (Atkins)                                        Page 4 of  
             public health or the environment at large and allow the  
             enforcing agency to help shape the scope of the project prior  
             to approval, while remaining a voluntary action that a  
             defendant/respondent is not legally required to perform.   
             Furthermore, all projects should have an adequate "nexus,"  
             defined as "the relationship between the violation and the  
             proposed project [which] exists if the project remediates or  
             reduces the probably overall environmental or public health  
             impacts or risks to which the violation at issue contributes,  
             or if the project is designed to reduce the likelihood that  
             similar violations will occur in the future."

             Since the release of these guidelines, various CalEPA BDOs have  
             adopted their own SEP policies.  In 2009, for example, the  
             SWRCB developed a Policy on Supplemental Environmental  
             Projects.  In accordance with CalEPA's guidance document, SEPs  
             may be performed by either the discharger or third-parties paid  
             by the discharger.  Each regional water board is allowed to  
             maintain a list of pre-approved SEPs for consideration and must  
             post an annual list of completed and in-progress SEPs from the  
             previous year.  The Air Resources Board (ARB) also has a SEPs  
             policy posted on its Internet Web site as reviewed April 2015,  
             and the Department of Toxic Substances Control (DTSC) recently  
             released a draft policy.

          3) SEPs and Disadvantaged Communities.  In 2014, the Central  
             Valley Regional Water Board engaged in a partnership with the  
             Rose Foundation, a grantmaking public charity based in Oakland,  
             to administer SEPs to Disadvantaged Communities projects.   
             According to the regional board's resolution (R5-2014-0040),  
             "Many disadvantaged communities in the Central Valley would  
             benefit from SEPs, yet it is difficult for dischargers that do  
             not have day-to-day relationships with these communities to  
             create SEPs that are responsive to their needs.  The Rose  
             Foundation, by virtue of its grantmaking experience, is  
             uniquely situated to implement a program that would allow SEP  
             monies to penetrate deeply into disadvantaged communities while  
             supporting the water-quality related SEP criteria contained in  
             the Water Quality Enforcement Policy and the SEP Policy."  
          1) Purpose of Bill.  According to the author, "Many communities  
             across California are located in areas disproportionately  


          AB 1071 (Atkins)                                        Page 5 of  
             subjected to multiple sources of pollution.  As a result, these  
             communities are more vulnerable to and impacted by the harmful  
             effects of pollution than others.  These environmentally  
             impacted communities, also known as environmental justice  
             communities, need resources to appropriately address  
             environmental health impacts and to implement community led  
             solutions.  Unfortunately, there is no strong mechanism to  
             ensure communities disproportionally impacted receive any  
             improvements after environmental damage has occurred.   
             Furthermore, 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.  

             "One way that environmental justice communities might see  
             direct environmental or public health benefits in their  
             neighborhoods is through the creation of an Environmental  
             Justice Supplemental Environmental Projects policy.

             "AB 1071 will ensure that all CalEPA boards, departments, and  
             offices establish a SEP policy specifically for environmental  
             justice communities."

          2) Nexus Considerations.  An important consideration in responding  
             to environmental violations is mitigating the impacts to the  
             affected communities.  While an emphasis on the particular  
             burden to disadvantaged communities from environmental  
             degradation and pollution is also important, there should be a  
             focus on first considering the impacts to those communities  
             that are directly impacted from any environmental violation.   
             Therefore, an amendment is needed to specify that the SEPs  
             policies should include a consideration of a nexus between the  
             violation resulting in an enforcement action and the impacted  

          3) Environmental Justice Communities vs. Disadvantaged  
             Communities.  In statute, there are a few references to EJ  
             communities, but while there is a definition for environmental  
             justice, no definitions are provided for "EJ communities."   
             Section 40612 of the Health and Safety Code (HSC) concerning  
             the San Joaquin Valley Clean Air Attainment Program leaves this  
             task up to a local committee, noting, "The district board shall  
             convene an environmental justice advisory committee, selected  
             from a list given to the board by environmental justice groups  
             from the San Joaquin Valley, to recommend the neighborhoods in  


          AB 1071 (Atkins)                                        Page 6 of  
             the district that constitute environmental justice  
             communities."  According to the air districts EJ Strategy of  
             June 2012, they define an EJ community as per the federal  
             Executive Order 12898 as, "minority and low-income populations  
             with disproportionately high and adverse human health or  
             environmental impacts."  This definition seems to reflect many  
             of the factors included in the CalEnviroScreen tool to identify  
             disadvantaged communities.

             This bill currently defines an environmental justice community  
             as a disadvantaged community identified pursuant to Section  
             39711 of the HSC.  As there are no other qualifiers in the  
             definition, it serves to rename a disadvantaged community as an  
             environmental justice community, for the purposes of the  
             section, which could lead to inconsistency and confusion in  
             statute more broadly.  

             The author may wish to add additional details in the definition  
             of an EJ community to distinguish it from a disadvantaged  
             community.  However, as currently written, in order to maintain  
             consistency and clarity, an amendment is needed to use the term  
             disadvantaged community in place of EJ community throughout the  
          SOURCE:                    Author  

          Alameda County Board of Supervisors
          Asian Health Services
          Asian Pacific Environmental Network
          California Environmental Justice Alliance
          California Equity Leaders Network
          California League of Conservation Voters (CLCV)
          California Pan-Ethnic Health Network (CPEHN)
          Catholic Charities, Diocese of Stockton
          Center for Community Action and Environmental Justice
          Center on Race, Poverty and the Environment
          Central California Environmental Justice Network (CCEJN)
          Central Coast Alliance United for a Sustainable Economy
          Clean Water Action
          Coalition for Clean Air
          Communities for a Better Environment
          Community Water Center


          AB 1071 (Atkins)                                        Page 7 of  
          Environmental Health Coalition
          Environmental Justice Coalition for Water
          Environmental Working Group
          Leadership Counsel for Justice and Accountability
          Pacoima Beautiful
          People Organizing to Demand Environmental and Economic Rights  
          Physicians for social Responsibility - Los Angeles
          Planning and Conservation League
          San Diego-Imperial Counties Labor Council (SDICLC)
          Sierra Club California
          West Marin Environmental Action Committee

          None received  

           ARGUMENTS IN  
          SUPPORT:    According to supporters, "AB 1071 will provide a  
          mechanism to bring environmentally beneficial projects directly  
          into low-income communities disproportionately burdened by  
          pollution.  Currently, there is no way to ensure that when a  
          violation occurs, the communities most impacted are able to  
          receive direct benefits or repair the harm done from pollution.

          "The California Environmental Protection Agency (Cal EPA) has a  
          policy that allows agencies to authorize environmentally  
          beneficial projects as part of enforcement actions or settlements.  
           These projects are called 'Supplemental Environmental Projects'  
          (SEPS).  The projects are a successful means of ensuring  
          environmentally beneficial projects are implemented when a  
          violation occurs.

          "Unfortunately, the existing policy is not set up to provide  
          benefits directly to disadvantaged communities, and there is very  
          little public information about how to engage the program.   
          Additionally, the Boards, Departments, and Offices within Cal EPA  
          underutilize this policy, thus limiting its effectiveness."
                                       -- END --


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