BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Joseph L. Dunn, Chair
2005-2006 Regular Session
SB 1205 S
Senator Escutia B
As Amended March 30, 2006
Hearing Date: April 4, 2006 1
Health and Safety Code 2
BCP:cjt 0
5
SUBJECT
Air Pollution: Children's Breathing Rights Act
DESCRIPTION
This bill would increase the maximum civil penalties and
criminal fines for specified violations of air pollution
laws, create a new category of "serious and chronic
violators," and mandate establishment of a state web site
to track violations. A percentage of the penalties
collected would be used to fund children's health and
asthma initiatives.
BACKGROUND
The federal Clean Air Act (CAA), enacted in 1970, attempted
to create a nationwide solution to the growing problem of
air pollution. Under the CAA, the Environmental Protection
Agency (EPA) develops national ambient air quality
standards (NAAQS) for certain pollutants. The CAA leaves
the decision of how to implement the NAAQS up to the states
through their State Implementation Plan (SIP).
Additionally, the act mandated the creation of New Source
Performance Standards (NSPS) for new or modified stationary
sources. California's implementation of the CAA, following
EPA's established standards, assigned creation of standards
to the California Air Resources Board ("ARB"). Legislation
divided California into 35 air quality districts. Each
district is run by a local air pollution control officer
with discretion over enforcement of air pollution
regulations within that district.
(more)
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Based on the type of violation, maximum penalties range
from between $1,000 to $1,000,000 per violation per day.
No minimum penalty is required, leaving the amount
prosecuted at the discretion of the air pollution control
officer. Offenses are generally strict liability, but
affirmative defenses are allowed when officers seek more
than $1,000 per day for certain non-Title V violations.
Title V violations relate to operating permits required
under the federal CAA for specified stationary sources,
such as sources emitting more than 100 tons per year of a
criteria pollutant, affected sources under acid rain
requirements, and solid waste incinerators.
This bill seeks to increase maximum monetary penalties,
define "serious and chronic violators," direct a percentage
of funds received to the Children's Breathing Rights Fund,
and mandate creation of a state website to post violations.
CHANGES TO EXISTING LAW
1. Criminal violations under state law
Existing law provides that violation of an ARB or air
district rule, regulation or permit is guilty of a
misdemeanor, and subject to a fine up to $1,000,
imprisonment up to six months, or both. Owners and
operators of a source of air pollutants which cause
actual injury are guilty of a misdemeanor and subject to
a fine of up to $15,000, imprisonment up to nine months,
or both. [Health & Safety Code 42400.]
This bill would increase the maximum fine for non-Title V
violations to $10,000. Title V violations are increased
to a $50,000 maximum, with imprisonment up to one year.
Penalties for owners and operators causing actual injury
are raised to a maximum of $50,000.
Existing law provides that negligent emission of an air
contaminant in violation of an ARB or air pollution
district rule, regulation, permit or order is guilty of a
misdemeanor, punishable by a fine up to $25,000,
imprisonment up to nine months, or both. Knowing
emissions are misdemeanors, punishable by a fine up to
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$40,000, imprisonment up to one year, or both. Title V
knowing violations are also misdemeanors and are
punishable by a fine up to $10,000 [Health & Safety Code
42400.1-.4.]
This bill would increase the maximum fine for Title V
violations to $50,000, with imprisonment up to one year.
2. Civil penalties
Existing law provides that violation of any rule, permit
or order issued by a district results in strict liability
for a civil penalty of not more than $10,000. [Health &
Safety Code 42402.]
Existing law provides that intentional or negligent
violation of an order of abatement results in civil
liability up to $25,000 per day per violation. Knowing
violations of orders trigger penalties up to $40,000 per
day; knowing falsification of documents results in a
penalty up to $35,000. [Health & Safety Code 42401,
42402.4.]
This bill would increase civil penalties for Title V
violations to a maximum of $50,000.
Existing law provides that any person who owns or
operates a source in violation that emits contaminants
which causes actual injury to the health and safety of
the public is liable for a civil penalty of not more than
$15,000. [Health & Safety Code 42402 (c).]
This bill would increase the civil penalty for a
violation causing actual injury to public health and
safety to a maximum of $50,000.
Existing law provides that a person who violates any
rule, regulation, or permit regarding airborne toxic
control measures ("ATCMs") is strictly liable for up to
$1,000 per day per violation. Penalties up to $10,000
are authorized for violations of ATCMs enforced under the
federal CAA. The affirmative defense of unintentional,
non-negligent behavior is available when more than $1,000
per day per violation is sought, unless the violation
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concerns fully approved Title V sources, or toxic air
contaminant programs with approved enforcement authority
under the CAA. [Health & Safety Code 39674.]
This bill would increase the penalties up to $10,000 per
day per violation for all non-Title V violations. Title
V source violations would be subject to a civil penalty
up to $50,000 per day per violation.
3. Creation of new civil penalties for serious and
chronic violators
Existing law does not differentiate between ordinary
violators of air pollution regulations and "serious and
chronic" violators.
This bill would impose a civil penalty up to $100,000 per
day per violation by "serious and chronic" violators,
commencing on June 1, 2007.
This bill would define a "serious and chronic" violator
to include persons who:
Purposely or knowingly disconnect a monitoring
device required by operating permit
Purposely or knowingly make a false material
statement, representation, certification in
connection with a permit
Commit certain high priority violations ("HPV") as
that term is used in the Federal CAA
4. Children's Breathing Rights Fund
Existing law provides that proceeds from enforcement
actions by air pollution control officers go the
treasurer of the district where the violation occurred.
[Health & Safety Code 42403; 42405.]
This bill would require that ten percent of all funds
collected be deposited into the Children's Breathing
Rights (CBR) Fund. These CBR funds would be distributed
as follows: 25 percent to the ARB or local district
where the penalty was assessed for enhanced enforcement;
50 percent to the local district to fund children's
health initiatives; 25 percent to local, city, or county
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agencies to prosecute egregious violators.
COMMENT
1. Stated need for the bill
According to the author, this bill addresses the problem
of current fines being a "minor inconvenience" for
polluters:
Without increasing penalties for serious or
chronic air polluters, some of California's major
air-polluting industries that put profit over
pollution prevention may find it more
cost-effective to violate environmental laws and
place competitors that comply with environmental
laws at an economic disadvantage.
The included findings and declarations state that air
pollution disproportionately impacts the health of young
children. More than 2.8 million California children are
enrolled in schools "near reported air emissions of
carcinogens, reproductive toxins, nitrogen oxides, sulfur
dioxide or particulate matter." Supporters add that
"[o]ver the course of the last ten years . . . asthma in
youth has increased by 60 percent and is the number one
cause of student absenteeism due to a chronic illness."
The author proposes to address this problem by increasing
caps for serious and chronic violators, creating the
Children's Breathing Rights Fund, and by using a
percentage of fines and penalties received to fund
children's health initiatives and enhance enforcement
activities.
2. Increase in penalties
The findings and declarations include a statement of
intent to "ensure that penalties are not so low as to be
a minor inconvenience to a serious and chronic air
polluter."
Opponents contend that current penalties are sufficient,
especially considering the implications of non-renewal of
an operating permit. Additionally, opponents maintain
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that large businesses hold tens to hundreds of permits
that could be violated for a single emission. This
financial cost of multiple violations already carries
sufficient deterrence value for those companies, they
argue.
Proponents respond that for individuals, deterrence comes
in the form of both criminal and civil penalties.
Egregious individual violators can be subject to jail
time in addition to serious fines. Large businesses,
unlike individuals, cannot be incarcerated. Therefore,
the maximum deterrence to companies must come in the form
of increased financial penalty. These increased
penalties ensure sufficient business compliance with
pollution regulations by penalizing these institutions in
the only way possible.
Further, all of the proposed increases are discretionary.
Enforcing officers can choose the appropriate penalty
based upon the circumstances of the case. Current
statutes list eight criteria by which to judge a civil
penalty or settlement. These criteria include extent,
nature, persistence of the harm, frequency of violations
and any mitigation. [Health & Safety Code 42403.] From
a policy standpoint, these higher fine levels would allow
officers to seek appropriate higher penalties, when
necessary, while maintaining their discretion to assess
lower fines for small violations. Furthermore, when a
civil penalty over $1,000 is sought, the defendant
generally can defend non-Title V actions by showing the
release was not negligent or intentional.
For most Title V violations, the current penalty is
$10,000 per day per violation. As an additional penalty,
affirmative defenses are not allowed in Title V cases.
Thus, even an unintentional non-negligent violation at a
Title V source would result in strict liability for that
individual. Under strict liability, these individuals
would be liable upon a showing that they in fact violated
pollution regulations. This bill would provide additional
deterrence by uniformly increasing civil penalties for
Title V violations to $50,000 per day per violation.
Opponents argue that these increases are punitive and
unnecessary, especially considering the lack of defenses
available. Proponents respond that particularly for
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Title V violations, higher civil penalties are needed for
effective deterrence.
For example, a violator found in violation of a Title V
requirement would currently be liable for a maximum
$10,000 per day per violation. In settlement discussions
with the enforcing officer, the violator knows that its
maximum exposure is $10,000 and would obviously only
settle for less than the maximum, thus reducing the
deterrent effect of current law. Proponents argue this
allows businesses to simply factor in violations as a
part of the cost of doing business. In contrast, raising
the maximum penalty to $50,000 will present the violator
with a much larger financial exposure for violations as
well as a more difficult financial choice, thereby
increasing the deterrent effect.
3. Serious and chronic violators
This bill would create and define the category of
"serious and chronic violator." These violators would
be subject to civil penalties of not more than $100,000
per day per violation in addition to any other applicable
penalties. The purpose of this category is to enforce
air pollution control laws against companies who put
"profits over air pollution prevention."
Opponents contend the category is not necessary as
"[c]urrent law already provides [for] a graduated civil
and criminal penalty structure with penalties up to
$250,000 per day ($1,000,000 per day for corporation) for
willful and intentional emissions violations that cause
great bodily injury or death." Additionally, opponents
point out that unlike other civil penalties, "serious and
chronic violators" are not subject to existing Health and
Safety Code criteria that describes factors to be taken
into account when assessing a penalty. The author's
office responds, contending that the goal of the serious
and chronic category is not to catch the average
violator, but instead to punish those who would willfully
violate pollution laws.
Opponents also raise concerns that categorization as a
"serious and chronic violator" violates due process for
those recurring violators. Opponent's argument is based
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upon Health and Safety Code Sections 42333 and 42334,
which provide for notice, and an office conference prior
to denial, refusal to renew, or addition of conditions to
a permit. Due process generally requires a meaningful
notice and opportunity to be heard. In the case of
"serious and chronic violators," SB 1205 would provide
that notice and hearing. As when charged under any other
statute, accused violators must be properly served. Once
served, the individual can defend themselves against the
action by negating one of the elements of the offense.
For serious and chronic violators, they must demonstrate
that they did not perform one of the egregious actions
that results in that classification. Once that
allegation is negated, the category and its higher
penalties are no longer applicable.
To qualify as a serious and chronic violator, a person
must either purposely or knowingly render inaccurate a
monitoring device required by an operating permit,
purposely or knowingly make a false material statement,
representation or certification in any form, notice,
statement or report required by permit, or commit an
enumerated high priority violation.
However, there is no requirement that the violation
actually be "chronic" in order to fall into the "serious
and chronic violator" category. While the enumerated
violations are in fact serious, none of the violators
need occur more than once to trigger the category. A
more appropriate title for this category is "serious
violators." As currently written, the title is a
confusing misnomer.
SUGGESTED AMENDMENT: Strike "and chronic" from "serious
and chronic"
a. Tampering with a monitoring device
The first category, purposely or knowingly rendering
inaccurate a monitoring device, is aimed at companies
who tamper with required monitoring equipment. Such an
action does not necessarily result in an emission in
violation of air pollution regulations, but indicates a
level of culpability and an arguable intention to
exceed limits. Imposing a large fine up to $100,000
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per day per violation could deter individuals from
disabling their monitoring equipment. No minimum
penalty is required. Absent a mandatory minimum
penalty, the deterrence value of these increased
penalties is reduced. (See, however, Comment 4 for
arguments for and against mandatory minimum penalties.)
b. False material representation
The second category, false material representation in a
document required by permit, applies to individuals
attempting to deceive regulators in order to receive an
operating permit. As with the first category, the
intent of this category is to strongly discourage
material representations.
c. High priority violations
The third category, high priority violations,
enumerates 10 different actions that either alone or in
conjunction trigger the "serious and chronic" violator
penalties. Most of these violations mirror those found
by the EPA to be high priority violations of the
federal CAA, but several of them are significantly
broader.
Proposed Section 42409.5(b)(3)(d) of the Health and
Safety Code classifies "[v]iolation of an
administrative or judicial order" as a high priority
violation. EPA's criteria requires violation of a
"substantive term" of those orders, including consent
decrees. By including "substantive term," EPA's
criteria ensure that violations are not insubstantial.
Language in SB 1205 may allow any minor violation of an
administrative or judicial order to trigger the
"serious and chronic violator" category. The author
and supporters maintain that the included language
defining high priority violations "as that term is used
in relation to the federal [CAA]," is intended to
mirror the EPA provisions.
SHOULD NOT THE BILL'S LANGUAGE ACTUALLY MIRROR THE EPA
LANGUAGE?
4. No minimum penalty assessment
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The author's negotiations with supporters and interested
parties included extensive discussions over whether a
mandatory minimum penalty should be imposed. Proponents
of the minimum penalty believe that such a penalty is
needed for maximum deterrence of would be violators.
Opponents of the minimum penalty argue that the enforcing
officer should have discretion over the penalty to be
imposed. Furthermore, those parties argue that forcing
the imposition of a specific minimum penalty prevents the
officer from taking into account all of the variables
prior to imposing a penalty.
For example, a small business owner may have several air
permits based upon certain emissions from the business.
One day, the business accidentally emits a small amount
of pollutant in violation of its permit causing no harm
to the community. Under current law, officers have
discretion in the amount of penalty to seek for the
violation. Imposing a mandatory minimum penalty,
depending on the value, fails to take into account the
unintentional minimal violation. Especially for small
businesses, a significant mandatory penalty could force
closure of the business.
The flexibility inherent in officer discretion allows
penalties to accurately reflect the harm incurred. As
most cases settle, imposition of a mandatory minimum
penalty could force more cases to trial. An increased
number of trials would increase the burden on courts,
officers and violating parties.
5. Children's Breathing Rights Fund
Under SB 1205, ten percent of all penalties and
settlements collected by the state ARB and local air
districts would be deposited in the Children's Breathing
Rights Fund, created in the State Treasury. Under
current law, penalties received as a result of actions
prosecuted by the district attorney or attorney for the
district are deposited with the treasurer for that
district. [Welf. & Inst. Code 42405.] If officers do
not use the increased penalties, their revenues will
decline by 10 percent in the district. Accordingly, this
new program encourages increased prosecution by the local
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districts in order to maintain current revenue flow.
Moneys deposited into the CBR fund are to be distributed
three ways. Twenty-five percent goes to the state ARB or
district where penalty was assessed for enhanced
enforcement within that district. Twenty-five percent is
allocated to the local, city, or county agency for
assistance in prosecution of egregious violators of
California's Clean Air Act. Thus, 50 percent of civil
penalties received by the CBR fund return to aid further
enforcement of these violators.
The remaining percentage is to be used for local
children's health initiatives in the district where the
penalty was assessed. For districts where there is no
local children's health initiative, subject to the
passage of SB 437 (Escutia, see Related Pending
Legislation), the allocation shall be made to the
California Healthy Kids Insurance Program. The purpose of
these funds is to ensure basic health coverage for
children. As children are disparately impacted by
airborne pollution, these programs help to address the
after effects of releases by those serious and chronic
violators.
6. ARB website
Under current law, the state ARB is required to post
information on air quality conditions, trends, standards
and actions. This bill would require the state ARB to
post information on air quality violations in each
district for the previous year. Required information
includes the name of the source, district, number of days
in violation and length of penalty. Proponents assert
that increased information on penalties assessed will
help to gauge the effectiveness of this penalty scheme.
7. Author's amendments
The following amendments are suggested by the author to
correct non-substantive errors in the current bill
language:
a. Page 10, line 5, strike out "paragraph (2) of
subdivision (a) of Section
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42400" and replace with "subdivision (b) of
Section 42402"
b. Page 14, line 13, insert "state board or" after
"shall be allocated to"
c. Page 6, line 9, change "health and safety" to
"health or safety"
Support: California Attorney General's Office; Breathe
California - Los Angeles County; California
District Attorney's Association; California
Environmental Health & Justice Team of the Women's
Policy Institute; California Environmental Rights
Alliance; California Medical Association; California
Safe Schools; Clean Power Campaign; Environmental
Working Group; The Foundation for Early Childhood;
Girl Scouts Councils of California; Natural
Resources Defense Council (NRDC); PHFE Management
Solutions; Physicians for Social Responsibility -
Los Angeles; St. Mark AME Church; Sierra Club-
California; American Lung Association; California
Thoracic Society; six individuals.
Opposition: California Council for Environmental and
Economic Balance; Civil Justice Association of
California (CJAC); Agricultural Council of
California; Alliance of Western Milk Producers;
American Chemistry Council; American Forest and
Paper Association; California Association of
Sanitation Agencies; California Bean Shippers
Association; California Chamber of Commerce;
California Citrus Mutual; California Cotton
Ginners Association; California Cotton Growers
Association; California Farm Bureau Federation;
California Grain and Feed Association; California
Grape and Tree Fruit League; California
Independent Oil Marketers Association; California
Independent Petroleum Association; California
League of Food Processors; California
Manufacturers and Technology Association;
California Restaurant Association; California
Seed Association; California Warehouse
Association; Consumer Specialty Products
Association; Groceries Manufacturers Association;
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Industrial Environmental Association; Nisei
Farmers League; Sacramento Metropolitan Air
Quality Management District; Western Growers;
Western Plant Health Association; Western States
Petroleum Association; Wine Institute
HISTORY
Source: Author
Related Pending Legislation: SB 437 (Escutia), would
create the California Healthy Kids
Insurance Program. This bill is
currently on the Assembly Inactive
File.
Prior Legislation: SB 1865 (Perata), Chapter 805, Statutes
of 2000 which increased fines and penalties
for violations of air pollution laws.
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