BILL ANALYSIS
AB 226
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Date of Hearing: April 13, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
AB 226 (Ruskin) - As Introduced: February 4, 2009
SUBJECT : Coastal Commission: enforcement.
SUMMARY : Authorizes the California Coastal Commission
(Commission) to administratively impose civil penalties in an
enforcement case against anyone in violation of the Coastal Act
of 1976.
EXISTING LAW :
1)Pursuant to the California Coastal Act of 1976, requires any
person wishing to perform any development in the coastal zone
to first obtain a coastal development permit (CDP).
2)Authorizes the Commission, after a public hearing, to issue a
cease and desist order if it determines that someone is
undertaking or threatening to undertake any activity that
requires a CDP or that may be inconsistent with a previously
issued permit.
3)Authorizes the Commission, a local government, or port, after
a public hearing, to issue a restoration order if it finds
that development has occurred without a CDP and the
development is causing continuing resource damage.
4)Authorizes a superior court to impose civil penalties on any
person in violation of the Coastal Act between $500 and
$30,000 per violation; additional penalties between $1,000 and
$15,000 per day for each day in which a violation persists may
be imposed when anyone knowingly and intentionally violates
the Coastal Act.
THIS BILL :
1)Authorizes the Commission, at a duly noticed public hearing,
to administratively impose civil penalties in an enforcement
case against anyone in violation of the Coastal Act of 1976 in
an amount not less than $5000 and not to exceed $50,000 for
each violation.
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2)In determining the amount of civil liability, requires the
Commission to consider:
a. the nature, circumstance, extent, and gravity of the
violation;
b. whether the violation is susceptible to
restoration or other remedial measures;
c. the sensitivity of the resource affected by
the violation;
d. the cost to the state of bringing the action.
e. with respect to the violator, any voluntary restoration
or remedial measures undertaken, any prior history of
violations, the degree of culpability, economic profits, if
any, resulting from, or expected to result as a consequence
of, the violation, and such other matters as justice may
require.
3)Exempts a violator from civil monetary liability imposed by
the Commission and by a superior court for the same act or
failure to act, unless the violator fails to pay the
administrative penalty, fails to comply with an order issued
by the Commission, or if a violator decides to challenge the
Commission's action in court.
4)Authorizes the Commission to file a lien on the subject
property if a violator fails to pay the penalties.
5)Deposits all penalties into the Coastal Act Services Fund, the
monies of which, upon appropriation by the Legislature, can be
used to enforce the Coastal Act and provide services to local
government, permit applicants, and the public.
FISCAL EFFECT : Unknown
COMMENTS : According to the author's office, "[p]enalties are a
critical component of environmental statutes and are the main
means used to persuade would-be violators to comply with the
law. A credible threat of penalties to prevent violations in
the first place can greatly increase the ability of an
environmental agency to obtain voluntary compliance, and
significantly increase protection of the environment. The
deterrent component of any regulatory scheme is important,
particularly for environmental laws where restoration of
violations often is difficult or impossible, and cannot make the
resource whole."
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1)Commission lacks the sharpest and most cost-effective tool to
achieve deterrence
The ability for an agency to impose administrative civil
penalties is but one tool in an enforcement toolkit and must be
distinguished from civil penalties imposed by a court and
criminal penalties. According to Rechtschaffen and Markell,
"The essential task for enforcement agencies is to make
penalties high enough and the probability of detection great
enough that it becomes economically irrational for regulated
entities to violate the law."<1> U.S EPA's policy on civil
penalties states that the first goal of penalty assessment is
deterrence, which is achieved when the penalty places the
violator in a worse position than those who complied in a timely
fashion. At a minimum, the policy states that the penalty must
remove any significant economic benefits from failure to comply
with the law. If they set high enough, administrative penalties
can be the most cost-effective enforcement tool, obviating the
need to pursue expensive litigation, at taxpayer's expense, in
court.
Only a court can impose civil penalties on violators of the
Coastal Act. This is a time-consuming and resource-intensive
process. Since the Attorney General (AG) must represent the
Commission in court, the Commission can only pursue a small
percentage of all violators given its limited resources. Since
2003, the Commission has only pursued four cases in court
(though it also pursues cross-complaints when sued).
Considering these constraints, court-imposed penalties have a
limited deterrent effect on would-be violators who may decide
that violating the Coastal Act is worth the risk especially
since they do not have to pay any fines or even compensate the
Commission for the costs of investigations.
---------------------------
<1> C. Rechtschaffen, and D. Markell, 2003. Reinventing
environmental enforcement and the state/federal relationship
. Environmental Law Institute. Washington, D.C.
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2)Commission is late to the party
As arguably the state's most significant land use regulator, the
Commission lacks one of the most effective enforcement tools.
Agencies such as the San Francisco Bay Conservation and
Development Commission (BCDC), the State Water Resources Control
Board (and regional boards), State Lands Commission, Department
of Fish and Game, California Energy Commission, Air Resources
Board, Department of Forestry, Department of Toxic Substances
Control, Integrated Waste Management Board, Department of Health
Services, Department of Food and Agriculture, Structural Pest
Control Board, regional air districts, and local agencies all
have administrative civil penalty authority. BCDC's authority
to regulate development along San Francisco Bay serves as the
best analog to the work of the Commission. Using its civil
penalty authority, BCDC has been successful at discouraging and
resolving the vast majority of violations without resorting to
expensive and time consuming litigation.
Given this anomaly, and the foregoing, it is entirely reasonable
and in the public's interest for the Commission to have the same
authority. The Legislative Analyst Office (LAO) recommended as
much in its 2008-09 analysis of the budget and the Budget
Subcommittee #3 adopted this recommendation. However, this
recommendation was later dropped from the budget.
3)The Commission's cease and desist authority encourages
non-cooperation
In order to stop on-going violations, the Commission is
authorized to issue cease and desist orders. Using this
authority, the Commission has been able to resolve some
violations amicably through the use of consent orders, under
which a violator usually agrees to pay a penalty. However, the
violator has to voluntarily agree to pay since the Commission
has no authority to impose such a penalty. According to
Commission staff, a violator usually ends up paying a much
smaller penalty than that which could be imposed by a court.
However, the irony is that those violators who contest an order
usually pay nothing since they are aware that the Commission has
to go to court to pursue penalties. Thus, it pays to be
recalcitrant and roll the dice given that the odds of litigation
are slim. This creates a perverse incentive for
non-cooperation. The Commission's enforcement statistics may,
in part, bolster this claim: there is a current backlog of 1,300
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cases; from 1985-2008, the balance of its enforcement account
has averaged only about $134,000.
4)Opposition alleges that "bounty-hunting" would ensue under AB
226
Among other things, a coalition of opponents argues that this
bill "creates a 'bounty hunter' dynamic whereby the [Commission]
is incentivized to seek large penalties and fees to support its
budget." In response, Commission staff states that the bill
only authorizes penalties in the amount no less than $5,000 and
no more than $50,000 per violation. Moreover, even if the
Commission desired to bolster its budget, it currently only has
one statewide enforcement staff to pursue a backlog of over
1,300 cases. Since the 2002-03 budget, the Commission has
endured significant cuts to its funding. Its skeleton staff can
no longer process permits in a timely manner, it can no longer
comment on projects at the local level (which can lead to delays
when projects move to the Commission), and amendments to Local
Coastal Plans can languish for two years or more. Furthermore,
any administrative penalty would be subject to judicial review;
the Commission argues that any penalty sought as a "bounty"
would not withstand this review. It is also worth noting that
BCDC received $113,000 in civil penalties last year, hardly a
"bounty" by any definition.
5)Enforcement revenues can be used by Commission
Under existing law, all enforcement revenues are transferred to
the Coastal Conservancy (Conservancy) to fund its coastal access
program. In response to a LAO recommendation, this bill would
delete this transfer and instead deposit all enforcement
revenues in the Coastal Act Services Fund (Fund), established to
carry out the Commission's enforcement program and to provide
services to local government, permit applicants, and others.
This would reduce the Conservancy's coastal access funding by
about $134,000. However, the Conservancy would still be
entitled to about $500,000 annually from the Fund, as required
by existing law.
6)Dual-referral
This bill has been dual-referred to the Assembly Judiciary
Committee. The author has agreed to clarify the "double
jeopardy" provisions in subdivision (d) in this committee. The
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author should also consider amending the bill to include
evidentiary rules and process considerations similar to those
that are contained in the Commissions regulations (Title 14,
Division 5.5, Section 13186) or in BCDC's statute.
REGISTERED SUPPORT / OPPOSITION :
Support
California Coastal Commission
California Coast Keeper Alliance
Environment California
Heal the Bay
Natural Resources Defense Council
Planning and Conservation League
Sierra Club California
Opposition
American Council of Engineering Companies of California
California Association of REALTORS
California Business Properties Association
California Building Industry Association
California Chamber of Commerce
California Manufacturers and Technology Association
Industrial Environmental Association
Analysis Prepared by : Dan Chia / NAT. RES. / (916) 319-2092