BILL ANALYSIS
Bill No: AB
846
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 846 Author: Torrico
As Amended: June 24, 2010
Hearing Date: June 29, 2010
Consultant: Art Terzakis
SUBJECT
State Agencies: civil and administrative penalties.
DESCRIPTION
AB 846 enacts the "California Civil Penalties Inflation
Supplement and Enforcement Act of 2010" which requires
certain state entities that administer environmental,
health, and workplace safety violations to update minimum
and maximum civil and administrative penalties to account
for annual inflation. Specifically, this measure:
1)Modifies practices for the assessment of civil and
administrative penalties for four state entities, namely
the Department of Pesticide Regulation (DPR), the
Department of Toxic Substances Control (DTSC), the
Department of Industrial Relations (DIR), and the State
Water Resources Control Board (SWRCB).
2)Requires the aforementioned state entities to update and
adjust the minimum and maximum amounts of specified civil
and administrative penalties for inflation or deflation
using the Consumer Price Index (CPI) and specifies a
method for rounding the penalties to the nearest multiple
of 10; 100; 1,000; 5,000; 10,000; or 25,000. Also,
provides that the inflation updates shall be exempt from
the Administrative Procedures Act (APA).
3) Stipulates that the updated penalties must be filed
with the Secretary of State and published in the
California Code of Regulations.
AB 846 (Torrico) continued
Page 2
EXISTING LAW
Existing law, the Administrative Procedures Act, contains
provisions governing the conduct of administrative
adjudication for state agencies. Various chapters of
California law also create civil and administrative
penalties for specified statutory violations, and typically
authorize appropriate state departments and agencies to
assess and collect these penalties as provided.
BACKGROUND
Purpose of AB 846: This measure requires specified
entities that regulate environmental, health, and workplace
safety violations to adjust the minimum and maximum
penalties for inflation. The sponsor, the National
Resources Defense Council (NRDC), believes AB 846 is needed
to "level the playing field for law-abiding businesses,"
which otherwise face a competitive disadvantage from
complying with the state's environmental, health, and
workplace safety laws. The NRDC writes in support, "A 2008
NRDC report showed widespread noncompliance with
environmental, health, and workplace safety laws suggesting
that current penalty assessments are inadequate to deter
unlawful conduct. Many state penalty caps are
significantly lower than the parallel federal penalty caps
for the same kinds of violations, and unlike federal
penalties, are not updated for inflation."
Proponents contend that in order to effectively deter
businesses from violating workers' rights and environmental
protections, penalties for wrongdoing must be sufficient to
create an economic disincentive. Proponents argue that
when penalty caps are artificially low, businesses are more
likely to try to cut costs by breaking the law. Proponents
emphasize that at a time of budget cutbacks and shrinking
enforcement, it is especially important that serious
wrongdoing can result in serious penalties; otherwise, the
benefits outweigh the risks.
Arguments in Opposition: The business community is opposed
to this measure on the basis that it would significantly
increase the cost of doing business in California by
AB 846 (Torrico) continued
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automatically adjusting maximum and minimum fines and
penalties upwards according to inflation. The business
community argues that California is already amongst the
most costly states in which to conduct business in a
complex regulatory environment - this measure would simply
compound matters, drive up costs and force businesses to
leave the state.
PRIOR/RELATED LEGISLATION
SB 1433 (Leno) 2009-10 Session. Would require the State
Air Resources Board, on March 1, 2011, and annually
thereafter, to adjust the maximum civil and criminal
penalties for inflation, based on the California Consumer
Price Index released in January of that year by the
Department of Industrial Relations and to publish the
inflation-adjusted maximum penalties on its Internet Web
site. (Pending in Assembly policy committee)
SB 1865 (Perata) Chapter 805, Statutes of 2000. Increased
several existing civil and criminal penalties for air
quality violations to make them similar to penalties for
water quality and hazardous waste law violations and
reorganized air quality provisions so that like
violations appear in the same sections.
SUPPORT : As of June 25, 2010:
National Resources Defense Council (sponsor)
Breathe California
California Association of Environmental Health
Administrators
SUPPORT: (continued)
California Conference Board of the Amalgamated Transit
Union
California Labor Federation
California League of Conservation Voters
California Nurses Association
California Rural Legal Assistance Foundation
California Teamsters Public Affairs Council
Center on Race, Poverty & the Environment
Central Valley Air Quality Coalition
Clean Water Action
Communities for a Better Environment
Community Water Center
AB 846 (Torrico) continued
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Engineers and Scientists of California
Green California
Heal the Bay
International Longshore & Warehouse Union
National Lawyers Guild Labor & Employment Committee
Planning and Conservation League
Professional & Technical Engineers, Local 21
San Francisco Baykeeper
Service Employees International Union - California State
Council
Sierra Club California
State Building and Construction Trades Council of
California
UNITE-HERE
United Food and Commercial Workers Union, Western States
Council
OPPOSE : As of June 25, 2010:
American Council of Engineering Companies of California
Apartment Association of Greater Los Angeles
Associated General Contractors of California
California Association of Joint Powers Authorities
California Apartment Association
California Association of Sanitation Agencies
California Business Properties Association
California Building Industry Association
California Chamber of Commerce
California Chapter of the American Fence Contractors'
Association
California Construction and Industrial Materials
Association
California Council for Environmental and Economic Balance
California Dry Bean Shippers Association
California Farm Bureau Federation
California Fence Contractors' Association
California Film Extruders and Converters Association
California Grain and Feed Association
California Grocers Association
California Hotel and Lodging Association
California Independent Grocers Association
OPPOSE: (continued)
California Independent Oil Marketers Association
California League of Food Processors
California Manufacturers and Technology Association
AB 846 (Torrico) continued
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California Pear Growers Association
California Professional Association of Specialty
Contractors
California Restaurant Association
California Retailers Association
California Seed Association
Engineering Contractors' Association
Flasher/Barricade Association
Independent Waste Oil Collectors and Transporters
Marin Builders' Association
Pacific Egg and Poultry Association
Santa Barbara Rental Property Association
Santa Barbara Technology and Industry Association
Western Electrical Contractors Association
Western Growers
Western States Petroleum Association
FISCAL COMMITTEE : Senate Appropriations Committee
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