BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: AB 1685
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|Author: |Gomez |
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|Version: |4/11/2016 |Hearing |6/8/2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Dan Brumbaugh |
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SUBJECT: Vehicular air pollution: civil penalties.
Existing law:
1) Requires that persons who violate any California Air
Resources Board (ARB) order, rule, or regulation, where there
is not a penalty described for the specific violation, shall
be subject to a civil penalty not to exceed $500 per vehicle,
portable fuel container, spout, engine, or other unit subject
to regulation and that the penalty be collected by the State
Treasurer and deposited into the Air Pollution Control Fund.
(Health and Safety Code §43016)
2) Prohibits residents or businesses from importing, delivering,
purchasing, renting, leasing, acquiring, or receiving a new
motor vehicle or vehicle engine for use or resale in the
state unless the engine has been certified compliant with ARB
standards, as specified, with violations set at $5,000 per
vehicle. (HSC §43151)
3) Prohibits new vehicles from being sold in California that do
not meet the emissions standard adopted by ARB. (HSC §43211)
4) Provides penalties of $5,000 per action, for manufacturers
who sell, attempt to sell, or offer for sale, a new vehicle
that does not meet ARB emission standards. (HSC §43211)
5) Provides that manufacturers or distributors who do not comply
with emission standards or test procedures adopted by ARB may
be subject to civil penalties of $50 per vehicle that is not
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in compliance and that no further sales of the vehicles can
take place until the penalty is paid. (HSC §43212)
6) Provides, pursuant to federal law, that violators be subject
to civil penalties up to $37,500 per non-compliant vehicle or
engine, $3,750 per tampering event or sale of defeat device,
and $37,500 per day for reporting and recordkeeping
violations. (42 U.S. Code §7524; 69(30) Federal Register 7121
[Feb. 13, 2004]; 73(239) Federal Register §75340 [Dec 11,
2008]; 78(215) Federal Register §66643 [Nov. 6, 2013])
This bill:
1) Increases civil penalties for violations of certain air
quality orders, rules, or regulations adopted by ARB from a
maximum amount of $50 per vehicle, or $500 or $5,000 per
action, depending on the provision, to a maximum of $37,500
per vehicle or action, as specified.
2) Requires, for violations committed by a manufacturer or
distributor, that payment of penalties be a condition for
further sales by the manufacturer or distributor in the
state.
3) Specifies that violations involving portable fuel containers
or small off-road engines retain maximum civil penalties of
$500 per unit.
4) Expands prohibitions for commerce in new motor vehicles or
engines in the state that do not meet ARB requirements to
include businesses or persons who reside outside the state.
5) Increases from $5,000 to $37,500, per action, the penalty for
any manufacturer who sells, as specified, any new motor
vehicle that fails to meet applicable emissions standards.
6) Authorizes ARB to order a manufacturer to bring its vehicles
into compliance with the emissions configuration they were
certified to meet, and requires that compliance with this
order shall be a condition of further sale of motor vehicles
in California.
7) Authorizes ARB to adjust the maximum penalties for failure to
comply with specified regulations for inflation based on the
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California Consumer Price Index without the requirement to go
through rulemaking procedures.
8) Makes related clarifying amendments.
Background
1) Federal and state air quality laws. The federal Clean Air Act
and its implementing regulations are intended to protect
public health and environmental quality by limiting and
reducing pollution from various sources. Under the Clean Air
Act, the United States Environmental Protection Agency (US
EPA) establishes National Ambient Air Quality Standards
(NAAQS) that apply to outdoor air throughout the country.
These federal standards exist for several air pollutants due
to their negative impact on public health when above
specified thresholds, including ozone, particulate matter
(PM), nitrogen oxides (NOx), sulfur oxides (SOx), carbon
monoxide, and lead. US EPA reviews each NAAQS at five-year
intervals to ensure that the standards are based on the most
recent scientific information.
Regions that do not meet the national standards for any one
of the standards are designated nonattainment areas. The
Clean Air Act sets deadlines for attainment based on the
severity of nonattainment and requires states to develop
comprehensive plans, known as the state implementation plan
(SIP), to attain and maintain air-quality standards for each
area designated nonattainment for an NAAQS.
California has some of the most severe air pollution problems
in the country. In particular, the South Coast and San
Joaquin air basins, which contain over half of the state's
population, are extreme nonattainment regions (the highest
degree of severity) for ozone pollution and are both
nonattainment regions for PM.
2) Why transportation emissions standards matter. Nationally
and statewide, the transportation sector is responsible for a
major fraction of air pollution, especially NOx (including NO
and NO2), which contributes to both ozone and PM formation.
People who live and work in closer proximity to roadways are
especially exposed to and impacted by this pollution.
Nationwide, approximately 16% of US housing units (including
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48 million people) are located within 300 ft. of a major
highway, railroad, or airport, and the affected population is
disproportionately economically disadvantaged and non-white.
Ground-level ozone (or tropospheric ozone) is a primary
component of smog and is formed from the reaction of NOx with
volatile organic compounds in sunlight. Ozone has a number of
negative health effects including irritated respiratory
system, reduced lung function, aggravated asthma, and
inflammation and damage of the lining of the lungs. Active
children are at highest risk from ozone exposure.
PM can be directly emitted or can be formed in the atmosphere
when gaseous pollutants such as sulfur dioxide and NOx react
to form fine particles. Very fine particulate matter is
particularly dangerous since it burrows deep into the lungs
where it can enter the bloodstream and harm the heart and
other organs. Fine particulate pollution poses an especially
critical health danger for children, the elderly, and people
with existing health problems. Exposure to PM 2.5 (i.e.,
particles or droplets that are 2.5 ?m or less in diameter) is
also linked to cardiovascular disease. A 2010 ARB analysis
based on scientific assessments by US EPA reported that
approximately 9,000 people in California are estimated to die
prematurely each year as a result of exposure to fine
particle pollution.
In addition, the specialized cancer agency of the World
Health Organization, the International Agency for Research on
Cancer, classified outdoor air pollution, and PM as a major
component of outdoor air pollution, as carcinogenic to
humans.
3) US EPA and ARB vehicle testing requirements. To address
transportation sector emissions, the federal Clean Air Act
authorizes the US EPA to establish and regulate standards for
hydrocarbons, carbon monoxide, NOx, and PM from mobile
sources of pollution. Because of its pre-existing
vehicle-emission standards and motor vehicle air pollution
problems, California is also authorized under the Clean Air
Act to implement separate stricter state mobile emission
standards. State law assigns ARB with primary responsibility
for control of mobile-source air pollution. Both US EPA and
ARB regulations require that, prior to introducing a vehicle
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for sale, a manufacturer must demonstrate that the vehicle
meets certain federal and state emissions standards. In
particular, manufacturers must demonstrate that its vehicle's
exhaust and emission-control systems are durable and comply
with the emission standards for the vehicle's useful life.
Only after going through this "certification of conformity"
(COC) process are vehicles legal for sale. Manufacturers that
fail to comply are subject to civil penalties and other
enforcement actions. The current maximum federal penalty for
violating the Clean Air Act through the sale of new vehicles
without a valid COC is $37,500 per violation.
In California, applications for certification must be
concurrently submitted to and approved by both the ARB and US
EPA. By obtaining and testing a limited sample of vehicles
from a test group or engine family, and attempting to
duplicate the manufacturers' vehicle emissions certification
tests, ARB's In-Use Compliance Program aims to ensure that
manufacturers' vehicles meet emissions standards throughout
their useful lives.
4) The Volkswagen case and its lessons. As described in the
background paper of the Joint Oversight Hearing by the Senate
Transportation and Housing and Environmental Quality
Committees (Volkswagen's "Defeat Device:" Update and
Implications for California, March 8, 2016), a 2014 study by
academic researchers, followed by an expanded 2015
investigation by ARB and US EPA of discrepancies between
emissions during stationary tests and while driving, led to
admission by Volkswagen (VW) that several of their "clean
diesel" engines had been designed with software-based "defeat
devices" to bypass key elements of the emissions control
systems. As a result, these vehicles were able to pass
emissions tests despite exceeding federal emissions standards
by up to 40 times. According to vehicle sales data, there
are estimated to be 617,000 of these vehicles nationally,
79,400 of which are in California.
During the hearing, Members of the Senate Committees
expressed the need for stronger penalties to discourage
non-compliance by automobile manufacturers, particularly
given that federal penalties are substantially higher and
that penalties for non-compliance in California were set in
the 1970 and have not been indexed to inflation. Members
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suggested that existing ARB penalties do not provide
sufficient deterrent, particularly for egregious actions to
circumvent emissions requirements, such as with VW.
Comments
1) Purpose of bill. According to the author, "AB 1685 makes long
overdue and common sense adjustments to California's mobile
source violation penalty amounts - bringing them into
equivalence with federal law, ensuring compliance with the
state's strict clean air and emissions standards, protecting
competitors that abide by the rules, and safeguarding public
health and safety."
2) Updating potential penalties while maintaining flexibility.
By raising the maximum penalties, but still allowing ARB
discretion on actual penalty amounts up to those maxima, ARB
staff expects that there will be a greater deterrence effect
for potential violators, as well as real punitive impacts on
actual bad actors who knowingly violate emissions standards
in the way that VW did. AB 1685 also allows for ARB to
periodically update mobile source penalties by indexing them
to inflation, thereby ensuring that penalties maintain their
deterrent effect over time.
Because there have been no increases in specified penalties
since they were first created more than four decades ago, AB
1685's proposed adjustment to match the federal,
inflation-adjusted maximum levels may strike some
stakeholders as too dramatic of an increase. In practice,
however, ARB's actual penalties are calculated based on
multiple statutory factors, including the violator's ability
to pay. Moreover, lower penalty amounts are explicitly
retained for smaller, less egregious violations and
violations involving lower-value equipment such as off-road
engines and fuel containers.
3) Further statute modernization. By removing language about
place of business and residency, AB 1685 modernizes the state
code to allow ARB to assess penalties for violations of its
regulations by internet-based entities doing commerce in new
cars destined for California.
4) Statutory overlap and ambiguity? Existing statute arguably
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includes some ambiguity in the interpretation of potentially
overlapping violations with different maximum penalties. AB
1685 may exacerbate this ambiguity by increasing the
differences in penalties, and thereby incentivizing bad
actors to legally challenge which penalties apply to them.
Specifically, AB 1685 will update the maximum penalty to
$37,500 within HSC §43016(a)(1), which is interpreted as a
"catch-all" section, for any relevant violations that do not
otherwise have explicit penalties in Part 5 (HSC §43000 et
seq.).
Elsewhere in Part 5, however, HSC §43008.6 authorizes a
maximum of $1,500 per violation of Vehicle Code (VEH) §27156,
which arguably covers similar emissions control system
violations as found in HSC §43000 et seq. For example,
according to VEH §27156(b), "? No person shall disconnect,
modify, or alter any such required device," and according to
VEH §27156(c), "No person shall install, sell, offer for
sale, or advertise any device, apparatus, or mechanism
intended for use with, or as a part of, a required motor
vehicle pollution control device or system that alters or
modifies the original design or performance of the motor
vehicle pollution control device or system."
Any substantial overlap in violations therefore risks that
bad actors may have incentive to argue that HSC §43008.6,
with its much lower maximum penalties, applies to them rather
than the revised sections of HSC §43000 et seq. with its new
maximum penalties of $37,500, pursuant to AB 1685. To the
extent that such reductions of maximum penalties can be
pursued and possibly litigated, the goals of AB 1685 and ARB
to increase emissions compliance and substantively penalize
bad actors may be short-circuited.
Although the relevant Health and Safety Code sections are
conventionally interpreted to apply mainly to manufacturers
and distributors of vehicles, and the Vehicle Code section
appears to otherwise apply mostly to vehicle operators, these
targets are not explicitly specified within all the
highlighted sections above, contributing to possible
ambiguity of interpretation and applicability. As this bill
continues to move, the author or other Committees may wish to
further explore this issue to resolve whether it would be
precautionary and advantageous to reduce such ambiguities.
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TRIPLE REFERRAL:
If this measure is approved by the Senate Environmental Quality
Committee, the do pass motion must include the action to
re-refer the bill to the Senate Transportation and Housing
Committee.
Related/Prior Legislation
ACR 112 (Hadley) thanks ARB for its exemplary work and tenacity
in uncovering emissions control defeat devices on certain
diesel-fueled VW motor vehicles. ACR 112 was amended and passed
out of the Assembly Committee on Natural Resources (7-0) and is
currently awaiting a vote on the Assembly Floor.
SB 1402 (Dutton, Chapter 413, Statutes of 2010) requires ARB to
provide a specified written explanation prior to imposing an
administrative or civil penalty for a violation of air pollution
law, make these explanations available to the public, annually
report specified administrative penalties imposed, and publish a
penalty policy pertaining to vehicular air pollution control.
AB 1085 (Mendoza, Chapter 384, Statutes of 2009) requires ARB to
release all technical data that is used to develop regulations
prior to the comment period of any proposed regulation.
SOURCE: Assembly Member Gomez
SUPPORT:
American Lung Association, California
Bay Area Air Quality Management District
Breathe California
California Air Pollution Control Officers Association (CAPCOA)
CALPIRG
Clean Power Campaign
Coalition for Clean Air
Environment California
Natural Resources Defense Council
Sierra Club California
OPPOSITION:
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None received
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