BILL ANALYSIS
SB 1205
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2005-2006 Regular Session
BILL NO: SB 1205
AUTHOR: Escutia
AMENDED: April 18, 2006
FISCAL: Yes HEARING DATE: April 24, 2006
URGENCY: No CONSULTANT: Bruce Jennings
SUBJECT : AIR POLLUTION: CHILDREN'S BREATHING RIGHTS
ACT: PENALTIES
SUMMARY :
Existing law :
1) Provides that violation of a California Air Resources Board
(CARB) 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.
2) Provides that negligent emission of an air contaminant in
violation of a CARB 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 $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.
3) Defines Title V violations as a stationary source required
by federal law to have an operating permit pursuant to the
federal Clean Air Act.
4) 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.
5) Provides that intentional or negligent violation of an
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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.
6) 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.
7) 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 Clean Air
Act (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
concerns fully approved Title V sources, or toxic air
contaminant programs with approved enforcement authority
under the CAA.
8) Provides that proceeds from enforcement actions by air
pollution control officers go the treasurer of the district
where the violation occurred
This bill creates the Children's Breathing Rights Act, which
would do the following:
1) Increases 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.
2) Increases the maximum fine for Title V violations to
$50,000, with imprisonment up to one year.
3) Increases the civil penalty for a violation causing actual
injury to public health and safety to a maximum of $50,000.
4) Increases the penalties up to $10,000 per day per violation
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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.
5) Imposes a civil penalty up to $100,000 per day per
violation by "serious" violators, commencing on June 1,
2007.
6) Defines a "serious" violator to include persons who:
a) Purposely or knowingly disconnects or disables a
monitoring device or method required by operating permit.
b) Purposely or knowingly makes any false material
statement, representation, or certification with respect
to requirements that are a basis for a permit.
c) Commits certain high priority violations (HPV), as that
term is used in the federal CAA and as articulated in
specified policies of the US Environmental Protection
Agency.
7) Requires that at least ten percent of all penalties and
settlements collected be deposited into the Children's
Breathing Rights (CBR) Fund. These CBR funds would be
appropriated by the Legislature, to be distributed in the
following manner: 25 percent to the CARB 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 agencies
to ensure the prosecution of the most egregious violators.
8) Requires CARB to post specified information on its website
regarding air quality violations in each district for
violations having occurred during the prior year.
9) Requires CARB to annually submit a report to the
Legislature, beginning January 1, 2008, summarizing the
enforcement of this act.
10)Provides explanations for this act as part of legislative
findings (see below)
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COMMENTS :
1) Purpose of 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 violations, creating the CBR Fund, and by using
a percentage of fines and penalties received to fund
children's health initiatives and enhance enforcement
activities.
2) 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
ARB. Legislation divided California into 35 air quality
districts. Each district is run by a local air pollution
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control officer with discretion over enforcement of air
pollution regulations within that district.
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 would increase maximum monetary penalties, define
"serious violators," direct a percentage of funds received
to the CBR Fund, and mandate creation of a state website to
post violations.
3) Opponent/Proponent Statements . As noted in the Judiciary
Committee analysis, the position of opponents and
proponents is largely as follows:
Opponents argue that current penalties are sufficient,
especially considering the implications of non-renewal of
an operating permit. Opponents also maintain that large
businesses hold tens to hundreds of permits that could be
violated for a single emission. Opponents contend that the
financial cost of multiple violations already carries
sufficient deterrence value for those companies.
Proponents state 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.
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Additionally, 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. 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 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.
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Under SB 1205, ten percent of all penalties and settlements
collected by the state ARB and local air districts would be
deposited in the CBR 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 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 CARB or the 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.
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), the allocation is to be made to the California
Healthy Kids Insurance Program.
4) Related Legislative History and Findings on Enforcement .
In 2000, the Legislature enacted a major reform of
California air laws with the enactment of SB 1865 (Perata).
SB 1865 revised civil and criminal penalties in Health and
Safety Code section 42400 et seq. for stationary source air
pollution violations. It was intended to encourage
compliance by closing significant gaps within the law that
prevented effective enforcement. It was also intended to
substantially conform criminal penalties for stationary
source air quality violations with penalties under other
environmental laws and to punish egregious violators. The
legislative intent of SB 1865, as declared by the author,
was to correct the penalty structure because it was "so
weak that some violators choose to break the law and pay a
fine rather than purchase new equipment or perform
maintenance: it simply becomes a cost of doing business."
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Prior to the enactment of SB 1865, there were only seven
criminal prosecutions in three air quality control
districts (i.e., South Coast, Ventura, and San Diego)
between June 1, 1998 and July 30, 1999.
In 2001, the Legislative Analyst's Office published a report
on the state's enforcement of air laws, "Improving State
Oversight and Direction of Local Air Districts." Among its
findings was the conclusion that approximately 50 percent
of violations involved repeat violators.
In 2004 the Environmental Working Group (EWG) released a
report on the same topic, "Above the Law: How California's
Major Air Polluters (Still) Get Away With It." The EWG
analysis found that little had changed from the 2001 LAO
study.
5) Reconciling a Potential Conflict: SB 1205 and SB 109
(Ortiz) . SB 109, which received previous favorable action
by this Committee, seeks to address the choice of enforcing
air emissions by either criminal or civil penalties, a
legacy of SB 1865. SB 109 would provide greater
flexibility in prosecution of air quality violations,
particularly with respect to egregious violations, where
the author argues the possibility of criminal action should
not be foreclosed if there is a civil penalty. SB 109
would allow the option of civil and criminal penalties so
that the enforcement can be appropriately tailored to the
violation. This dual remedy is available in other areas of
environmental law and is used by enforcement agencies and
prosecutors when appropriate.
Certain provisions of SB 1205, however, appear to be in
conflict with certain sections also referenced by SB 109.
How should these two bills and the section(s) in question
be reconciled? The Committee understands that the two
offices have recently identified the issue and are
attempting to resolve the conflict.
6) Related Legislation . Senator Escutia is also the author of
SB 437, a measure that would create the California Healthy
Kids Insurance Program, to provide health care coverage to
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all eligible children in California.
7) Judiciary Committee Review . Prior to its hearing in the
Senate Environmental Quality Committee, SB 1205 was heard
in the Senate Judiciary Committee, where it was passed by a
vote of 3-1.
SOURCE : Senator Escutia
SUPPORT : American Lung Association of California
Attorney General's Office
Breathe California of Los Angeles
California District Attorneys Association
California Environmental Health & Justice Team
of the
Women's Policy Institute
California Environmental Rights Alliance
California Medical Association
California Safe Schools
California Thoracic Society
Children's Health Environmental Coalition
Clean Power Campaign
Environment California
Environmental Working Group
Foundation for Early Childhood Education
Girl Scouts Councils of California
Literacy for Environmental Justice
Long Beach Alliance for Children with Asthma
Mexican American Opportunity Foundation
Natural Resources Defense Council
PHFE Management Solutions
Physicians for Social Responsibility - Los
Angeles
Planning and Conservation League
St. Mark AME Church
Sierra Club California
Individuals (6)
OPPOSITION : Agricultural Council of California
Alliance of Western Milk Producers
American Chemistry Council
American Forest and Paper Association
California Air Pollution Control Officer's
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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 Council for Environmental and
Economic Balance
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 Space Authority
California Trade Coalition
California Warehouse Association
Chemical Industry Council
City of Los Angeles
Civil Justice Association of California
Consumer Specialty Products Association
Groceries Manufacturers Association
Industrial Environmental Association
Nisei Farmers League
Sacramento Metropolitan Air Quality Management
District
Surface Technology Association
Southern CA Alliance of Publicly Owned
Treatment Works
Western Growers
Western Plant Health Association
Western States Petroleum Association
Wine Institute