BILL ANALYSIS 1
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2009-2010 Regular Session |
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BILL NO: AB 226 HEARING DATE: June 23, 2009
AUTHOR: Ruskin URGENCY: No
VERSION: June 16, 2009 CONSULTANT: Bill Craven
DUAL REFERRAL: Judiciary FISCAL: Yes
SUBJECT: Coastal resources: California Coastal Act of 1976:
enforcement.
BACKGROUND AND EXISTING LAW
The California Coastal Act (Act) vests in the California Coastal
Commission (CCC) regulatory authority for specified development
activities in the designated coastal zone. Courts are authorized
to impose civil liability on those who violate the act. The CCC
has authority to issue a cease and desist order to those who are
developing in the coastal zone without a permit. It may also
issue a restoration order when development has occurred without
a permit and continuing resource damage results.
Only superior courts are authorized to impose civil penalties on
those who violate the Act. The CCC has no civil penalty
authority.
PROPOSED LAW
This bill would provide that a person who violates the act may
be subject to an administrative civil penalty that may be
imposed by the commission at a public hearing. The penalties
would be no less than $5000 and no more than $50,000 per
violation. (A superior court may impose civil penalties on any
person in violation of the Coastal Act of between $500 and
$30,000; 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,
plus exemplary damage, where appropriate.)
The Commission would be required to consider the nature,
circumstance, extent, and gravity of the violation; whether the
violation is susceptible to restoration or other remedial
measures; the sensitivity of the resource affected by the
violation; and the cost to the state of bringing the action. The
CCC would also consider whether the violator undertook voluntary
restoration or remedial measures, 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.
Violators who commit minor violations that are corrected quickly
would not be subject to the civil penalty provisions.
The CCC would be able to attach a lien on the property on which
the violation occurred in the amount of the penalty. It would
also be able to sue to collect unpaid civil penalties. Civil
penalties would be deposited into an existing Coastal Act
Services Fund and would be subject to appropriation by the
Legislature. A violator would not be subject to monetary
liability from both the CCC and a court for the same violation.
In response to a LAO recommendation, this bill would terminate
the present practice of transferring all CCC enforcement
revenues to the Coastal Conservancy. The conservancy uses these
revenues in its coastal access program. This would result in a
slight decrease ($134,000) in this program, based on normal
annual receipts. This fund, however, requires that the
conservancy retain $500,000 from this fund for that purpose, but
any remainder would be used by the CCC for its enforcement
program and other functions. All enforcement revenues are
transferred to the Coastal Conservancy.
ARGUMENTS IN SUPPORT
1. According to the author's office, the CCC does not have
credible enforcement capability. It does not have existing
authority to impose civil penalties, and thus the Coastal Act
contains no effective deterrent against would-be violators. The
author provided considerable academic research to support the
proposition that a credible deterrent can greatly increase the
ability of an environmental agency to obtain voluntary
compliance.
2. The author also contends that the CCC is handicapped by its
current reliance on the Attorney General to bring actions for
civil penalties. This is a time-consuming and resource-intensive
process. Since 2003, the Commission has only pursued four cases
in court (though it also pursues cross-complaints when sued.)
3. The CCC is one of the few major regulatory agencies in
California that lacks the authorization to impose civil
penalties. 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 litigation.
4. The Legislative Analyst Office (LAO) recommended that the CCC
should have civil penalty authority in its 2008-09 analysis of
the state budget. Senate Budget Subcommittee #3 adopted this
recommendation, but it was later dropped from the budget.
5. Are Cease and Desist Orders Inadequate?
The CCC has been able to resolve some violations through its
existing authority to issue cease and desist orders. In those
cases, violators may pay a fine, although a lesser fine than
could be imposed by a court. Violators who choose not to pay a
fine may also be aware that the CCC may not have the resources
to pursue a court-ordered penalty. This is especially true at
the present time when the CCC, because of budgetary cuts, has
only one enforcement official for the entire state and a current
backlog of 1,300 cases. Since 1985, revenues in the CCC
enforcement account have averaged $134,000.
ARGUMENTS IN OPPOSITION
A coalition of opponents argues that this bill "creates a
'bounty hunter' dynamic" that would encourage the CCC to seek
large penalties and fees to support its budget." Rather than
recognizing that the CCC could provide more complete and timely
services to applicants and local governments if it received an
adequate budget, the opposition imagines that a basic
enforcement provision would become some huge budget supplement
for the CCC. An administrative penalty would remain subject to
judicial review in appropriate "bounties" would likely be struck
down. In a real-world comparison, the Bay Conservation and
Development Commission which has similar authority to the CCC in
the Bay Area has had this enforcement authority for years.
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" that would reasonably be feared by the
opposition.
COMMENTS
By arrangement with the author and the Senate Judiciary
Committee, the following technical amendments will be adopted
when the bill is heard in Judiciary. This first removes the
concerns of the California Land Title Association. The second
removes the opposition of the local governments.
SUGGESTED AMENDMENTS
AMENDMENT 1
Page 3, line 10, (e) Failure to pay the fine imposed by the
commission shall allow the commission to file record a lien
on the property in the amount of the penalty assessed by
the commission. This lien shall have the force, effect, and
priority of a judgment lien.
AMENDMENT 2
Page 3, line 16, add: (g) "Person" for the purposes of this
section does not include local governments, special
districts, or agencies thereof when acting in their
legislative and adjudicative capacities.
SUPPORT
California Coastal Commission
California Coast Keeper Alliance
Environmental California
Environmental Defense Center
Green California
Heal the Bay
Natural Resources Defense Council
Planning and Conservation League
Sierra Club California.
OPPOSITION
California Land Title Association - unless amended
League of Cities-unless amended
American Council of Engineering Companies of California
California Association of Realtors
California Business Properties Association
California Business Industry Association
California Chamber of Commerce
California Manufacturers and Technology Association.