BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                    AB 2781

                                                                    Page  1


          2781 (Eduardo Garcia)

          As Amended  April 7, 2016

          Majority vote

          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |Natural         |9-0  |Williams, Jones,      |                    |
          |Resources       |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Cristina Garcia,      |                    |
          |                |     |Gomez, Hadley,        |                    |
          |                |     |Harper, McCarty, Mark |                    |
          |                |     |Stone, Wood           |                    |
          |                |     |                      |                    |
          |Appropriations  |19-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |HernŠndez, Holden,    |                    |
          |                |     |Jones, Quirk,         |                    |
          |                |     |Santiago, Wagner,     |                    |
          |                |     |Weber, Wood           |                    |
          |                |     |                      |                    |


                                                                    AB 2781

                                                                    Page  2

          |                |     |                      |                    |

          SUMMARY:  Directs 10% of all penalties collected by California  
          Environmental Protection Agency (CalEPA) boards, departments,  
          and offices to fund supplemental environmental projects (SEPs)  
          in disadvantaged communities.  Specifically, this bill: 

          1)Requires that 10% of all enforcement action monetary penalties  
            collected by a CalEPA board, department, or office to be  
            deposited into the Supplemental Environmental Projects in  
            Disadvantaged Communities Fund (Fund).  

          2)Specifies that the Fund be available, upon appropriation, to  
            implement environmental projects in disadvantaged communities.  
             Prioritizes funding for projects on the list compiled by  

          EXISTING LAW: 

          1)Requires CalEPA to:
             a)   Conduct its programs, policies, and activities and  
               enforce all health and environmental statutes within its  
               jurisdiction in a manner that ensures the fair treatment of  
               people of all races, cultures, and income levels, including  
               minority and low-income populations.
             b)   Convene a Working Group on Environmental Justice  
               (Working Group) comprised of the Secretary of CalEPA, the  
               Chairs of the Air Resources Board (ARB), the California  
               Integrated Waste Management Board (now CalRecycle), the  
               State Water Resources Control Board (SWRCB), the Director  
               of the Department of Toxic Substances Control (DTSC), the  
               Director of the Department of Pesticide Regulation (DPR),  
               the Director of the Office of Environmental Health Hazard  


                                                                    AB 2781

                                                                    Page  3

               Assessment (OEHHA), and the Director of the Office of  
               Planning and Research (OPR).  Requires the Working Group to  
               examine existing data and studies on environmental justice  
               and recommending policies for implementation by CalEPA;  
               recommend criteria to the Secretary of CalEPA for  
               identifying and addressing any gaps in existing programs,  
               policies, or activities that may impede the achievement of  
               environmental justice; and, hold public meetings to receive  
               and respond to public comments prior to the finalization of  
               the recommendations. 

             c)   Requires each board, department, and office within  
               CalEPA to review its programs, policies, and activities and  
               identify and address any gaps in its existing programs,  
               policies, or activities that may impede the achievement of  
               environmental justice.

          2)Beginning January 1, 2016, requires each board, department,  
            and office within CalEPA to establish a policy on SEPs that  
            benefits environmental justice communities.  Authorizes up to  
            50% of an enforcement action to be allocated for SEPs.   
            Requires CalEPA to compile a list of SEPs developed by its  
            boards, departments, and offices and post the list on its  

          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill redirects revenue from monetary penalties  
          to the newly created Fund, likely in the $3 to $5 million dollar  
          range (special fund).  Additionally, CalEPA would require an  
          additional $175,000 for administrative costs.

          COMMENTS:  According to OEHHA, approximately 8 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  


                                                                    AB 2781

                                                                    Page  4

          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.   

          SB 535 (DeLeon), Chapter 830, Statutes of 2012 requires 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  


                                                                    AB 2781

                                                                    Page  5

          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 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 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 2013 Environmental  
          Compliance and Enforcement Report provides information on the  
          use of SEPs in California.  The certified unified program  
          agencies directed just over $2.1 million to SEPs, approximately  
          25% of the penalties collected.  According to ARB, of the $9.97  
          million penalties assessed for significant enforcement cases  
          (over $10,000), $773,600 was directed to SEPs.  DPR directed  


                                                                    AB 2781

                                                                    Page  6

          only $8,000 of the $3.3 million in penalties collected to one  
          SEP.  The other boards, departments, and offices did not report  
          any SEP funding in 2013.  

          Analysis Prepared by:                                             
                          Elizabeth MacMillan / NAT. RES. / (916) 319-2092  
          FN: 0003194