BILL ANALYSIS Ó
AB 2446
Page 1
Date of Hearing: April 19, 2016
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 2446
(Gordon) - As Amended March 17, 2016
SUBJECT: State Water Resources Control Board: judicial review
KEY ISSUE: Should the statutes governing challenges to orders
and decisions of state AND REGIONAL water Boards be clarified in
order to prevent persons subject to such orders from delaying
proceedings or seeking judicial review prior to the exhaustion
of admInistrative remedies?
SYNOPSIS
Under California's Porter-Cologne Water Quality Act, the State
Water Resources Control Board (State Board) and nine regional
water boards are charged with protecting the quality of the
state's waters. Enacted in 1969, the Porter-Cologne Act has not
only been important in protecting California waters, but the
general approach, and even specific provisions, of the
Porter-Cologne Act became a model for the federal Clean Water
Act of 1972. The most important tools that state and regional
boards use to protect water quality include issuing (or refusing
to issue) discharge permits, issuing clean up and abatement
orders to any person who causes or permits waste to be
discharged into state water, and issuing cease and desist orders
to address violations, or threatened violations, of waste
discharges. According to the author, this measure will enhance
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the ability of the water boards to protect water supplies and
mitigate environmental damage by addressing ambiguities in
existing law that have been used to delay or prematurely
challenge water board proceedings, decisions, and orders. AB
2446 does so by amending provisions that establish rules and
procedures for challenging the decisions of the state and
regional water boards. The author contends that the bill is
primarily a clarification of existing law, insofar as it
requires the exhaustion of administrative remedies before a
party can go to court for a writ of mandate, seeking to undo a
board decision. The bill is sponsored by the State Water Board
and supported by the Sierra Club. It is opposed (or opposed
unless amended) by a coalition of farm groups, the Association
of California Water Agencies, and two district water agencies.
What the author and sponsor see as changes that eliminate delay
and allow the administrative process to proceed, the opponents
see as a denial of due process and their right to seek judicial
remedies. Both the author and some of the opponents have
indicated to the Committee that there may be areas of compromise
on some points, especially on those related to the intersection
of state and federal law. However, these issues were raised too
late for the Committee to fully analyze the issues and consider
possible amendments. The Committee may wish to encourage the
author, if the bill moves out of this Committee, to continue
working with all interested parties: farm groups, water
agencies, and environmentalists.
SUMMARY: Seeks to expand the authority of the State Water
Resources Control Board (State Water Board), and to a lesser
extent regional water boards, to issue or not issue a stay
pending board proceedings, prohibit certain judicial challenges
to water board decisions until after the administrative process
has run its course, and clarify two specified evidentiary
requirements. Specifically, this bill:
1)Expands a provision of existing law that authorizes the State
Water Board, in response to a petition to review an order of a
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regional water board, to stay the effect of a decision or
order of a state or regional water board, to additionally
allow the State Water Board to stay an order or decision
issued under authority delegated to an officer or employee of
the State Water Board, as specified. Authorizes an aggrieved
party, within 30 days of any order of the State Board issuing
or denying a stay, to file with the superior court a petition
for writ of mandate. Specifies that if the State Water Board
or the superior court grants a stay, the stay shall be made
effective as of the effective date of the decision or order.
2)Provides that no legal or equitable process shall issue in any
proceeding in any court against the State Water Board, a
regional board, or any officer of a state or regional board,
to review, prevent, or enjoin any adjudicative proceeding
under the Porter-Cologne Act. Except for a petition for writ
of mandate, as authorized in Water Code Section 13321, no
legal or equitable process shall issue in any proceeding in
any court against the state board or regional board to review,
prevent, or enjoin a decision or order by a state or regional
water board before a decision or order has been issued and the
procedures for administrative review of that decision or order
have been exhausted.
3)Specifies that in any civil action brought pursuant to the
Porter-Cologne Act in which a regional water board or the
State Water Board seeks an injunction or restraining order, it
shall not be necessary to allege or prove that irreparable
harm will occur should the temporary restraining order,
preliminary injunction, or permanent injunction not be issued.
4)Provides that for any order or decision of the State Water
Board under the Safe Water Drinking Act, if no aggrieved party
petitions for a writ of mandate within the 30-day period
authorized by the Act, the decision or order of the State
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Water Board is not subject to review by any court. Specifies
that in every case that comes before the court under this
provision, the court shall exercise its independent judgment
on the evidence.
EXISTING LAW:
1)Provides, under the Porter-Cologne Water Quality Control Act,
that within 30 days of any action or failure to act by a
regional water board, an aggrieved person may petition the
State Water Board to review that action or failure to act.
Authorizes the State Water Board, in the case of such review
and upon notice and hearing, if hearing is requested, to stay
in whole or in part the effect of the decision and order of a
regional board of the State Water Board. (Water Code Sections
13320 and 13321.)
2)Authorizes an aggrieved party, not later than 30 days from
service of a copy of a decision or order issued by the State
Water Board, to file in superior court a petition for a writ
of mandate for review of the decision or order. Specifies
that an aggrieved party must file a petition for
reconsideration with the State Water Board to exhaust that
party's administrative remedies only if the initial decision
or order is issued under authority delegated to an officer or
employee of the State Water Board and the State Water Board by
regulation has authorized a petition for reconsideration.
Specifies that the party aggrieved by the decision of the
State Water Board may obtain a review of the decision or order
of a regional water board by filing in superior court a
petition for writ of mandate not later than 30 days from the
date on which the State Water Board denies review. (Water
Code Section 13330 (a)-(b).)
3)Provides that if no aggrieved party petitions for a writ of
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mandate within the time provided by 2) above, a decision or
order of the state board shall not be subject to review by any
court. (Water Code Section 13330 (d).)
4)Provides that every civil action brought under the provisions
of the Porter-Cologne Water Quality Control Act at the request
of the regional board or the state board shall be brought by
the Attorney General in the name of the people of the state of
California and any of those actions relating to the same
discharge may be joined or consolidated. (Water Code Section
13361 (a).)
5)Provides that in any civil action brought under the provisions
of the Porter-Cologne Water Quality Control Act, for an
injunction or temporary restraining order, it shall not be
necessary to allege or prove that irreparable harm will occur
if the injunction or restraining order is issued. (Water Code
Section 13361 (c).)
6)Requires the State Water Board, under the California Safe
Water Drinking Act, to administer provisions in the Health &
Safety Code that regulate drinking water. To carry out this
responsibility, existing law requires the State Water Board to
appoint a deputy director to oversee issuance and enforcement
of public water system permits and authorizes the deputy
director to issue orders directing corrective actions if the
conditions of any permit, regulation, or standard is violated.
Authorizes a party aggrieved by any order, within 30 day
after service of a copy of the order, to file in superior
court a petition for a writ of mandate to review the order.
Specifies, however, that failure to file an action shall not
preclude a party from challenging the reasonableness or
validity of a decision or order in any judicial proceeding
brought to enforce the decision or order. (Health & Safety
Code Section 116700 (a).)
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7)Provides that in any action challenging an order or decision,
the evidence before the court shall consist of all relevant
evidence that, in the judgment of the court, should be
considered to effectuate and implement the provisions of the
Safe Drinking Water Act. In every case, the court shall
exercise its independent judgment on the evidence. (Health &
Safety Code Section 116700 (b).)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: Under the Porter-Cologne Water Quality Control Act,
the State Water Resources Control Board (State Water Board) has
ultimate authority to regulate water quality in the state.
Porter-Cologne also established nine regional water boards to
oversee water quality on a day-to-day and regional basis. Among
the key tools available to the state and regional water boards
are the power to issue or deny water discharge permits, issue
clean-up and cease and desist orders to polluters, and issue
stays against harmful conduct and discharges while a matter is
pending before the board. This bill deals primarily with the
ability of persons subject to such orders to challenge those
orders. Existing law sets out prescribed procedures and
timelines that the state and regional water boards must conform
to, including noticing hearings, making decisions, and issuing
orders designed to protect water quality. Existing law also
sets forth procedures and timelines that persons aggrieved by an
order or decision must conform to when challenging those orders
and decisions.
According to the author and sponsor, most of the changes
proposed in this bill are clarifying in nature. The author, for
example, contends that this bill will mainly address
"ambiguities" in existing law that have allowed "dischargers . .
. to impede or delay hearings on proposed pollution control
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actions by going to court before the State Water Board or a
Regional Water Board has actually taken an action," and in some
cases dischargers have allegedly obtained injunctions that
prohibit the water boards from even holding hearings.
Exhausting Administrative Remedies or Denying Due Process?
According to background material provided by the author and
sponsor, one of the more vexing problems water boards sometimes
face is the efforts of dischargers and polluters to delay board
proceedings, both state and regional, and to seek injunctions
and court orders overturning or staying a board order even
before the administrative process runs its course. That is,
under existing law, a state or regional water board has the
authority to issue or deny waste discharge permits and to take
actions against those who violate the conditions of the permit
or other laws or regulations. For example, if a regional water
board issues an order to halt a permittee from discharging
waste, the person aggrieved - the person subject to the order -
may file a petition with the State Water Board for
"reconsideration" of a board's decision. Only after the
administrative process is complete, would the aggrieved party be
permitted to seek a court order. However, the sponsor, the
State Water Board, contends that some dischargers have exploited
"ambiguities" in existing law to seek injunctions that delay
board proceedings or seek judicial review to overturn a board
decision.
This bill would clarify what is seemingly implied in existing
law, and is generally true of most administrative actions: a
party who is unhappy with a board decision must wait for the
board to actually take action before attempting to challenge the
board's decision by recourse to any available administrative
proceeding, such as a petition for review, reconsideration, a
hearing, and other administrative adjudication that is necessary
before going to the courts for relief. For the author and
sponsor, these administrative procedures were established for a
reason: to seek a resolution before resorting to the courts and
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to ensure that any potentially harmful conduct is stayed during
the administrative process. Opponents, on the other hand,
accuse the bill of "circumscribing judicial review." However,
it should be noted that none of the provisions eliminate
anyone's right to judicial review. Rather, the bill simply
requires what is usually the case in administrative law: all
administrative remedies must be exhausted before a party may
turn to the courts. If the allegations of the author and
sponsor are correct, some aggrieved dischargers are turning to
the courts even before a board has issued an order or decision,
let alone using the administrative process to challenge the
order or decision. In at least one case, according to the
sponsor, a discharger sought to obtain an injunction to prevent
the board from even holding a hearing.
"Shall Not be Subject to Review": One example of the
disagreement between the sponsor and opponents of the bill
concerns the novelty, or lack of thereof, of the language the
bill would add to the California Safe Drinking Water Act (Health
& Safety Code Section 116700) stating that if no aggrieved party
petitions for a writ of mandate within the prescribed 30-day
period, the decision or order "shall not be subject to review by
any court." Opponents of the bill suggest that this amounts to
a denial of due process by precluding anyone who has not filed a
petition for a writ of mandate from obtaining judicial review.
The sponsors, on the other hand, contend that this is not a new
restriction, but merely a simple clarification of what is
necessarily implied in the provision that authorizes an
aggrieved party to file a petition for writ of mandate within 30
days of service of the order. The 30-day time limit would have
no meaning if the aggrieved party could seek judicial review of
the board's decision or order after that time period. Moreover,
the sponsor correctly points to a parallel provision in the
Porter-Cologne Act that contains both a requirement that the
petition for writ be filed within 30 days of service and the
express language that says if the petition is not filed within
the prescribed time period the decision or order "shall not be
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subject to review by any court." The sponsor contends that this
brings consistency to the parallel provisions in Health & Safety
Code and Water Code, so that both say that failure to file a
petition for writ of mandate to review an action of the State
Water Board within the prescribed period means that the order or
decision will not be subject to court review. This express
reinforcement is necessary, the sponsor contends, in order to
clear up any ambiguity in that section of the Health & Safety
Code and avoid the potential that someone will challenge an
earlier permitting decision during a subsequent enforcement
proceeding for violations of that permit.
Concerns about "401 Certificates" and the Interaction of Federal
and State Law: The water boards (state and regional) regulate
all pollutants and discharges that may affect the quality of
either surface water or groundwater. Any person proposing to
discharge waste within a region must file a report of waste
discharge with the appropriate regional board. No discharge may
take place until the regional board issues either "waste
discharge requirements" (i.e. a permit and any conditions
attached to it), or a waiver of those requirements. Under the
auspices of the U.S. Environmental Protection Agency, the State
Water Board and regional water boards also grant National
Pollutant Discharge Elimination System (NPDES) permits required
by the federal Clean Water Act for "point-source" discharges.
(A "point source" discharge means any confined conveyance, such
as pipe, ditch, or other conduit, from which pollutants may
enter into a stream or other body of water; it is distinct from
storm water discharges and return flows from irrigated
agriculture.) The state and regional water boards, therefore,
issue NPDES permits for "point-source" discharges, and "water
discharge requirement" permits for all other discharges.
Adding a further layer of state-federal complexity, the Federal
Energy Regulation Commission (FERC) cannot issue a new license
for a hydroelectric project pursuant to Section 401 of the
federal Clean Water Act until a state water board issues a "401
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certificate" affirming that the new license will comply with the
state's water quality requirements. The interaction between
state and federal permitting requirements, and the changes
proposed by this bill, has caused concern for some regional
water agencies. For example, the Association of California
Water Agencies (ACWA) and a regional water agency argue that
applicants for hydroelectric plants could be adversely and
unintentionally affected by the provisions of this bill. The
certificates often require plants to take actions - such as
creating fish passages at dams or maintaining streamflow for
whitewater recreation - that are not directly or significantly
related to issues of water quality. Because state law allows
the State Water Board to issue a 401 certificate for a
hydroelectric project without a public proceeding, the only way
that a licensee may obtain public consideration of a certificate
occurs is if the State Water Board considers a petition for
reconsideration, but existing law does not set any time limit
for the State Water Board to act on a petition for
reconsideration. These agencies contend that limiting their
ability to petition and obtain a timely decision from the State
Water Board may limit their ability to comply with FERC
requirements. As the ACWA puts it, "a hydroelectric licensee
needs the opportunity to go to court immediately upon receiving
a [401 certificate] so that it can seek to maintain the status
quo pending reconsideration." These agencies, therefore, would
prefer an amendment creating a carve-out for hydroelectric
projects and 401 certificates.
However, the issue of the "401 certificates" was raised too late
for the Committee to fully consider the need for, or likely
effect of, such an amendment. Nor is it entirely clear to the
Committee counsel if this is a concern with existing law or with
the specific amendments proposed by this bill, or if the
provisions of this bill will make an existing problem worse.
However, the author, sponsor, and the ACWA have all indicated to
the Committee that there may be a compromise that could address
everyone's respective concerns, but there was not time to work
out those amendments in time for this hearing.
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Evidentiary Changes Proposed by this Bill: Finally, this bill
potentially proposes two evidentiary changes, both of which,
according to the sponsor, are largely clarifying in nature, but
one of which opponents see as substantive. First, under an
existing provision of the Safe Drinking Water Act, when a review
of the State Water Board action comes before the court, "the
evidence before the court shall consist of all relevant evidence
that, in the judgment of the court, should be considered to
effectuate and implement the provisions [of the Safe Drinking
Water Act]. In every case, the court shall exercise its
independent judgment on the evidence." (Health & Safety Code
Section 116700 (b).) This bill would delete everything except
the final sentence: "In every case, the court shall exercise its
independent judgment on the evidence." The so-called
"independent judgment" standard of review, which is both the
existing standard and the standard proposed by this bill, is
usually contrasted with the "substantial evidence" standard of
judicial review when a court considers a petition for a writ of
administrative mandate. Generally speaking, under the
"substantial evidence" rule, the court is more deferential to
the findings of the agency, asking only if the decision was
reasonable in light of the evidence before it. However, the
"independent judgment" rule is much less deferential to the
agency, allowing the court to use its "independent judgement on
the evidence." (See e.g. Code of Civil Procedure 1094.5 (c).)
This bill makes it clear that the independent judgment rule is
the appropriate standard with a clear simple statement. It
should be noted that the sponsor is adopting a standard which is
contrary to its interest. As an agency subject to review by the
courts, it would naturally prefer the more deferential
"substantial evidence" standard. Thus, the opposition's
criticism of this amendment, as though it were some sort of
power play to enhance the State Water Board's authority, is
curious to say the least. The farm group coalition letter
claims that by eliminating the reference to "all relevant
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evidence" this will have the effect of "restricting the court's
review to what the state administrative agencies alone deem
relevant." But this is precisely what the "independent
judgment" rule does not allow.
The impact of the other evidentiary change also depends upon
whether one sees it as a clarification or a departure from
existing law. As a general rule, a key requirement for
obtaining an injunction is to show that without the injunction,
the party seeking the injunction will suffer "irreparable harm."
However, the Porter-Cologne Act creates an exception to this
general rule, providing that in any civil action brought under
the Act in which a temporary restraining order or an injunction
is sought, "it shall not be necessary to allege or prove at any
stage of the proceeding that irreparable damage will occur
should the temporary restraining order, preliminary injunction,
or permanent injunction not be issued." (Water Code Section
13361 (c).) Although the passive construction of the language
in this provision does not make it who does not need to prove
irreparable harm, the sponsor contends that this section was
intended and has been construed to mean that the water boards do
not need to show irreparable harm when they enjoin a harmful or
potentially harmful contamination of the water supply. But the
sponsor contends that "due to ambiguities in existing law," this
section "could be misinterpreted to provide that a party seeking
an injunction against the Water Boards need not prove
irreparable harm." This bill would clarify that only when "a
regional board or the state water board" seeks an injunction is
a showing of irreparable harm not required. Because the sponsor
states that this could be so interpreted, it is not entirely
clear if it ever has been so interpreted. The Committee counsel
could not find any case law bearing on the question of whether
the exemption from showing irreparable harm belonged only to the
water boards, or to any party who sought an injunction or
restraining order under the Act. However, it is certainly quite
reasonable to assume that the existing law intended to only
excuse the boards from the irreparable harm requirement. The
boards, after all, are charged with protecting the state's water
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from harm by preventing contamination; to require the boards to
prove irreparable harm before it could issue an injunction to
prevent harm would make no sense.
Considerations Should the Bill Move Forward: As noted, the
letters of opposition on this measure arrived late to the
Committee and, as such, the opposition concerns may not have
received as much consideration as would otherwise have been the
case. Nonetheless, some of the points raised by opponents and
groups expressing concern may be worthy of consideration. Most
notably, the ACWA and some of its member water agencies have
concerns about the bill's impact on the ability of hydroelectric
projects to obtain necessary "401 certificates" to comply with
federal laws and regulations. It appears that the author,
sponsor, and ACWA, and at least one regional agency have engaged
in discussions about how this issue may be addressed.
ARGUMENTS IN SUPPORT: According to the State Water Board, the
sponsor, AB 2466 will "clarify the procedures for administrative
and judicial review of . . . actions taken by the State Water
Board and Regional Water Boards (collectively referred to as the
Water Boards.)" The State Water Board argues that this measure
will "result in increased program efficiency by reducing
ambiguities in statute that result in premature legal challenges
and substantial delays in the Water Boards' abilities to take
necessary and appropriate actions to protect water quality."
The State Water Board also argues that the provisions of this
bill will clarify the intent of existing law. For example, it
claims that a provision in existing law which provides that the
boards need not show irreparable harm in seeking an injunction
or a restraining order does not mean that a party seeking an
injunction against the boards is excused from showing
irreparable harm. Finally, the State Water Board argues that
this will also clarify that a party wishing to challenge a board
cannot seek judicial review before a board has taken action and
the required administrative review process has been exhausted.
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The Sierra Club supports this bill because it will prohibit
"polluters from using the courts to get around Water Board stays
that stop pollution while the case is pending at the Water
Board." According to Sierra Club, "when a polluter is found by
the Board, the Board's stay to prevent further problems can be
lifted by a court, allowing pollution to continue."
ARGUMENTS IN OPPOSITION: A coalition of farm groups, including
the California Farm Bureau and the Western Growers Association,
oppose this bill because it "would significantly expand the
[State Water Board's] authority and discretion by circumscribing
judicial review of that authority." Specifically, the
opposition points to the following provisions of the bill: (1)
the provision which says that "if no aggrieved party petitions a
writ of mandate within 30 days after service of a copy of an
order or decision by [the State Water Board]," then the decision
or order of the board shall not be subject to review by any
court; (2) the provision that would eliminate the requirement
that a court consider "all relevant evidence" relating to the
board's order; (3) the elimination of Water Code Section 13321
(c), which opponents contend would require a permittee to comply
with requirements of an administrative order "even though they
are being timely challenged through a judicial process;" (4) the
absence of a time limit for the State Water Board to make a
decision on an application for a stay; (5) and more generally
the provisions that would allow state and regional water boards
to delay a decision on a stay while preventing the applicant
from seeking a stay from the court, which the opponents believe
denies due process and "punishes the permittee by having to
comply with requirements despite a timely challenge that may be
successful."
The Association of California Water Agencies (ACWA) opposes this
bill primarily because it will adversely and unintentionally
affect water agency activities involving federal regulations.
In particular, ACWA notes that some of its member water agencies
are licensed by the Federal Energy Regulatory Commission (FERC)
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which requires a water quality certificate (a "401 certificate")
from the State Water Board in order to obtain a new or renew an
existing license to operate a hydroelectric project. State law
allows the State Water Board to issue a 401 certificate for a
hydroelectric project without a public proceeding, thus the only
way that a licensee may obtain public consideration of a
certificate occurs if the State Water Board considers a petition
for reconsideration, but existing law does not set any time
limit for the State Water Board to act on a petition for
reconsideration. "Therefore," ACWA contends, "a hydroelectric
licensee needs the opportunity to go to court immediately upon
receiving the Executive Director's Section 401 certificate so
that it can seek to maintain the status quo pending
reconsideration of that certificate by the State Water Board
itself." The letter of "concern" submitted by the Yuba County
Water Agency raises the same issue.
REGISTERED SUPPORT / OPPOSITION:
Support
State Water Resources Control Board (sponsor)
Sierra Club
Opposition
Association of California Egg Farmers
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Association of California Water Agencies
California Farm Bureau Federation
California Grain & Feed Association
California Seed Association
El Dorado Irrigation District (unless amended)
Western Growers Association
Concerns
Yuba County Water Agency
Analysis Prepared by:Thomas Clark / JUD. / (916) 319-2334
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