BILL ANALYSIS                                                                                                                                                                                                    Ó

                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
          Bill No:            AB 2781
          |Author:    |Eduardo Garcia                                       |
          |Version:   |4/7/2016               |Hearing      |6/29/2016       |
          |           |                       |Date:        |                |
          |Urgency:   |No                     |Fiscal:      |Yes             |
          |Consultant:|Rachel Machi Wagoner                                 |
          |           |                                                     |
          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."  

          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  

          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.  

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

          5) Under compliance with the provisions of the Federal Water  


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             Pollution Control Act as Amended in 1972:

             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 an SEP in accordance with the enforcement policy  
             of the State Water Resources Control Board (SWRCB) and any  
             applicable guidance document.  

          7)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  
            Internet website.  

          This bill:  directs 10% of all penalties collected by California  
          Environmental Protection Agency (CalEPA) boards, departments,  
          and offices to fund 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  


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            implement environmental projects in disadvantaged communities.  
             Prioritizes funding for projects on the list compiled by  

             1)   Environmental Justice.  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 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.  The California Air Resources  
               Board (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 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 CalEnviroScreen.  

             2)   SEPs.  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,  


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               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, the Department of Toxic Substances  
               Control (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.  The California  
               Department of Pesticide Regulation directed 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. 


          1) Purpose of Bill.  According to the author, "many communities  
             in California continue to be disproportionately burdened [by]  
             multiple sources of pollution.  These communities are most  
             vulnerable to pollution and climate change than others.   
             These disadvantaged communities? require much more than  
             resources to tackle climate and environmental health impacts  


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             and to implement community led projects.   Currently many  
             communities facing enforcement actions would rather pay the  
             fine than inclement a SEP.  This is mainly attributed to the  
             time and effort necessary to implement a SEP.  The  
             inexperience of the violator also contributes to the lack of  
             SEP implementation.  As a result, there continues to be a  
             disconnect that prevents disadvantaged communities from  
             benefitting from pollution mitigation projects funded by  
             enforcement actions.  Without requiring a mandatory  
             Disadvantaged Community Fund, disadvantaged communities will  
             continue to be overlooked and not benefit from much needed  
             environmental mitigation.  By securing resources that benefit  
             disadvantaged communities, the state can help decrease many  
             of the environmental stressors affecting these communities."

          2) 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.  

             There would likely be additional administrative costs to each  
             of the boards, departments and offices to account for and  
             submit the 10% of their penalties. 

             While it appears that there is benefit in requiring and  
             investing in SEPS, would it not be more prudent to require  
             each of the boards, departments and offices to expend 10% of  
             their penalties implementing SEPs directly, rather than  
             creating additional cost to collect, account and administer a  
             singular fund at the agency level?

             Additionally, SEP investments are often made as part of the  
             penalty settlement agreement and the SEP is ideally for the  
             community in which the environmental damage by the violation  
             was done.  This bill would fundamentally change that by  
             having the penalties put into a separate fund to determine  
             which SEPs to invest in.  It is most appropriate for the SEP  
             dollars to be spent in the communities where the damage is  
             done and ideally to improve the environment in such a way as  
             to mitigate and reverse the damage done by the violation.   


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             The regulatory agencies that are enforcing the law, and  
             thereby collecting the penalties, are more appropriate to  
             determining how best to do that.

             An amendment is needed to require each board, department or  
             office within CalEPA to expend 10 percent of its penalties on  
             SEPS rather than create a new fund at CalEPA.

            Related/Prior Legislation
            AB 1071 (Atkins, Chapter 585, Statutes of 2015) requires each  
          board, department, and office within CalEPA to establish a  
          policy on SEPs that benefits environmental justice communities.
          SB 89 (Escutia, Chapter 728, Statutes of 2000) requires CalEPA  
          to convene the Environmental Justice Working Group and develop  
          an agency-wide environmental justice strategy.

          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 (de León, 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).  
          SOURCE:                    Comité Civico de Valle  


          California Indian environmental Alliance
          Global Community Monitor
          Idle No More SF Bay
          La Union Hace La Fuerza
          West Berkeley Alliance for Clean Air and Safe Jobs


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          None received  
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