BILL ANALYSIS
SB 1402
Page 1
Date of Hearing: June 29, 2010
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
SB 1402 (Dutton) - As Amended: June 24, 2010
PROPOSED CONSENT
SENATE VOTE : 33-0
SUBJECT : AIR POLLUTION PENALTIES
KEY ISSUE : Should the state Air Resources Board be required to
provide a written communication containing specified information
to a party being fined under California air pollution laws, and
should this information be made available to the public?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This non-controversial urgency bill requires a written
communication from the state board alleging that an
administrative or civil penalty will be, or could be, imposed
either by the state board or another party, including the
Attorney General, for a violation of air pollution law, to
contain specified information. The bill also requires this
information and final mutual settlement agreements reached
between the state board and a person alleged to have violated
air pollution laws to be made available to the public. Finally,
the bill also requires the state board to prepare and submit to
the Legislature and the Governor a report summarizing the motor
vehicle pollution administrative penalties imposed by the state
board for calendar year 2011, and annually thereafter, and would
require the state board to publish a penalty policy for motor
vehicle pollution laws that is based on specified criteria.
There is no known opposition to the measure.
SUMMARY : Seeks to require a written communication, to a
business being fined under California air pollution laws,
explaining how the penalty was determined, the specific health
and safety code section that has been violated, and a
quantification of excess emissions, if applicable. Specifically,
this bill :
SB 1402
Page 2
1)Requires a written communication from the Air Resources Board
(ARB) that alleges an imposition of a penalty to contain
specific information including (a) the manner in which ARB
used to determine the amount of a penalty, (b) where
applicable, the per unit or per vehicle basis for the penalty,
(c) reasoning for the use of the particular provision for
assessing the violation, and (d) whether the administrative or
civil penalty is being assessed under a provision of law that
prohibits the emission of pollution at a specified level, and
if so, a quantification of the specific amount of pollution
emitted in excess of that level, where practicable (this
quantification may be based on estimates or emission factors).
2)Requires ARB to make available to the public all final mutual
settlement agreements arising from violations of vehicular air
pollution control laws.
3)Requires ARB to prepare and submit to the Legislature and the
Governor a report summarizing the motor vehicle pollution
administrative penalties imposed by ARB for calendar year
2011, and annually thereafter, and also requires ARB to
publish a penalty policy for motor vehicle pollution laws that
shall take into consideration all relevant circumstances,
including, but not limited to, all of the following:
a) The extent of harm to public health, safety, and welfare
caused by the violation.
b) The nature and persistence of the violation, including
the magnitude of the excess emissions.
c) The compliance history of the defendant, including the
frequency of past violations.
d) The preventive efforts taken by the defendant, including
the record of maintenance and any program to ensure
compliance.
e) The innovative nature and the magnitude of the effort
required to comply, and the accuracy, reproducibility, and
repeatability of the available test methods.
f) The efforts of the defendant to attain, or provide for,
compliance.
g) The cooperation of the defendant during the course of
the investigation and any action taken by the defendant,
including the nature, extent, and time of response of any
action taken to mitigate the violation.
h) The financial burden to the defendant.
SB 1402
Page 3
4)Contains an urgency clause.
EXISTING LAW :
1)Generally establishes processes for assessing fines and
penalties and specifies the deposit of fines and penalties for
violations of vehicular air pollution control laws into the
Air Pollution Control Fund or the General Fund. (Health and
Safety Code section 43000 et seq. All further references are
to this code unless otherwise noted.)
2)Establishes a process to assess administrative penalties in
lieu of civil penalties for violation of specified vehicular
air pollution control laws up to $100,000 and establishes a
threshold of $100,000 for penalty assessments that qualify a
person for mutual settlement agreements and requires the
settlements to be deposited into the General Fund. (Section
43023.)
3)Requires the ARB and the courts to consider specified
conditions when considering the amount assessed for
administrative or civil penalties for violations of vehicular
air pollution control laws such as: a) the extent of harm to
public health, safety, and welfare caused by the violation; b)
the nature and persistence of the violation, including the
magnitude of the excess emissions; c) the compliance history
of the defendant, including the frequency of past violations;
d) the preventive efforts taken by the defendant, including
the record of maintenance and any program to ensure
compliance; e) the innovative nature and the magnitude of the
effort required to comply, and the accuracy, reproducibility,
and repeatability of the available test methods; f) the
efforts to attain, or provide for, compliance; and g) the
cooperation of the defendant during the course of the
investigation and any action taken by the defendant, including
the nature, extent, and time of response of any action taken
to mitigate the violation. (Sections 43023, 43031.)
4)Requires any person who violates any vehicular air pollution
control law as specified to be liable for a civil penalty not
to exceed $5,000 per vehicle and those penalties be deposited
in the Air Pollution Control Fund (APCF). (Section 41354.)
5)States that any action brought pursuant to Section 43154 above
SB 1402
Page 4
to recover such civil penalties must take special precedence
over all other civil matters on the calendar of the court
except those matters to which equal precedence on the calendar
is granted by law.
6)Requires the revenues from penalties recovered by the ARB
pursuant to this chapter to be deposited in the APCF and must
only be expended by the ARB for environmental cleanup,
abatement, or pollution prevention technology. (Section
43031.5.)
7)Prohibits the sale of any new motor vehicle in California that
does not meet the emission standards adopted by the ARB, and
any manufacturer who sells, attempts to sell, or causes to be
offered for sale a new motor vehicle that fails to meet the
applicable emission standards must be subject to a civil
penalty of $5,000 for each such action, with the penalty to be
deposited into the General Fund. (Section 43211.)
COMMENTS : Under current law, the ARB and/or local air pollution
control districts are authorized to impose civil or
administrative penalties for a variety of violations of state
air pollution laws and regulations. Administrative penalties of
up to $100,000 may be assessed for certain violations. ARB and
the courts are required to consider several factors when
determining the amount of an administrative or civil penalty -
including the harm to the public, the compliance history of the
defendant, preventative efforts made by the defendant, and other
factors. Fine and penalty revenues are generally deposited in
the APCF (where they are available, upon appropriation of the
Legislature, for environmental cleanup, abatement, or pollution
prevention) or the General Fund.
ARB has articulated three main goals of its enforcement program:
(1) to foster compliance; (2) to deter violations; and (3) to
create a level playing field for the community ARB regulates.
ARB currently handles approximately 2,000 violations a year.
ARB has a long history of obtaining compliance along with
substantial penalties. In over 99 percent of its cases, ARB
engages violators in a settlement process to reach resolutions.
However, where an appropriate settlement cannot be reached, ARB
refers the matter to a prosecutor, usually the Attorney General,
for civil litigation or criminal prosecution. Injunctions to
halt violations are an important tool in these actions. ARB
maintains that its enforcement process is highly transparent.
SB 1402
Page 5
All ARB settlements are public documents. Case resolutions are
publicized through news releases. ARB publishes a comprehensive
annual report that documents the results of its enforcement
efforts.
According to the author, "Numerous affected stakeholders have
repeated expressed concern over the lack of information on how
ARB determines and assesses penalties as well as the lack of
consistency from one violation to the rest. This confusion
undermines ARB's credibility and effectiveness in achieving its
core mission - protection of air quality. This confusion also
makes it increasingly difficult for ARB to effectively resolve
settlements or for regulated entities to comply with ARB
regulations and to do business in California."
"Although ARB notes that they provide information to violators
on how penalties are calculated, many regulated parties state
that they do not receive this information. This bill would
eliminate any confusion by ensuring that the information is in
fact provided."
Finally, the author states that, "this bill would codify some of
the important strides that ARB has made to improve the
transparency of its penalty policies, provide a role for
legislative oversight, and ensure that penalties are assessed
consistently by establishing a written penalty policy."
Depending on one's perspective on ARB's enforcement work, this
bill could be considered unnecessary. However, to the extent
the bill is consistent with ARB's current practices and/or
requires ARB to provide information they already have, the bill
does not appear to impose an unreasonable burden on ARB and
could improve perceptions regarding the fairness and
transparency of ARB's enforcement program.
General Fund vs. The APCF : The APCF is the depository for ARB's
fee revenue streams, as well as other revenue streams, such as
fines, interest, and transfers. ARB's operating budget is fully
supported by the fee portion of the APCF. The Health and Safety
Code specifies that monies in this fund are only available to
ARB upon legislative appropriation. By law, ARB does not
control the penalty monies deposited into APCF and, therefore,
cannot use penalties for any of its program needs without
appropriation by the Legislature.
Air quality laws protect the public health, safety and welfare.
SB 1402
Page 6
When an air violation occurs, the environment is negatively
impacted and the public is exposed to excessive air pollution
emissions. For this reason when ARB assesses penalties for
violations of air quality requirements, one of the many
considerations for penalty assessment is to seek mitigation
related to the environmental harm the violation caused.
Depositing those penalties into APCF ensures that those penalty
monies will be applied towards air pollution programs.
Diverting penalties to the General Fund would decrease the
likelihood of those penalties being applied to mitigate air
pollution.
ARB Enforcment Policy - Ongoing Efforts . Since late last year,
the ARB has focused efforts to work on its enforcment policy in
repsonse to comments from stakeholders during open comment
periods of several ARB meetings regarding transparency and
consistency in its enforcement program. The ARB held a workshop
on October 12, 2009 to explore ways to achieve higher levels of
compliance, expedite settlements, prioritize actions, eliminate
economic advantage from violations, ensure consistent
enforcement results, serve environmental justice communities,
encourage voluntary compliance, increase access to ARB's
administrative hearing process, and communicate the goals of
ARB's enforcement program. ARB staff also discussed strict
liability for violations, model penalty policies and ways to
increase opportunities for public access, outreach, compliance
assistance and training.
According to ARB's website, the notice was distributed widely
via the largest email broadcast in ARB's history and reached
approximately 350,000 people, businesses and other
organizations. The workshop was attended by over 200 attendees
in person and 150 more people via the internet and 30
individuals testified in person and many more submitted written
comments.
On January 28, 2010, staff presented an update to the ARB on
progress made to address comments on its enforcement program
received at the October 12, 2009 workshop. Many of the comments
mirror the issues raised in this bill. The ARB continues to
work on the enforcment policy and plan to hold another workshop
in the future (A comment period on the information presented by
staff at the January 28th workshop closed March 30th).
In reviewing the various documents used for workshop discussion
SB 1402
Page 7
and reading transcripts from the workshop, there are some areas
that could be considered for improvement. While there is not
consensus as how to specifically proceed on this complex issue,
there are several areas that do seem to lend themselves to
possible legislative attention including transparency in
assessing penalties, some sort of ARB guidance for regulated
entities on penalties and reports on enforcement efforts and
resulting penalties.
ARGUMENTS IN SUPPORT : Supporters generally state that this bill
will promote fairness, equity, transparency, and efficiency for
air pollution law in California. They contend that ARB often
imposes overlapping and duplicative penalties for similar
violations. They also contend that regulated entities are faced
with uncertainty regarding their potential exposure for
non-compliance.
PRIOR RELATED LEGISLATION : AB 1085 (Mendoza, 2009, Chap. 384),
required the ARB to release all technical data that is used to
develop regulations prior to the comment period of any proposed
regulation.
SB 163 (Johannessen, 1995, Chap. 966) expanded ARB's authority
to assess and enforce administrative penalties by allowing them
to adopt rules and regulations pertaining to fuel requirements
and standards.
REGISTERED SUPPORT / OPPOSITION :
Support
Californians for Enforcement Reform and Transparency
American Home Furnishing Alliance
California Chapter of the American Fence Contractors Association
California Dump Truck Owner Association
California Motorcycle Dealers Association
California Moving and Storage Association
California Retailers Association
Construction Industry Air Quality Association
Engineering Contractors Association
Flasher/Barricade Association
Independent Waste Oil Collectors and Transporters
Marine Builders Association
Moving and Storage Association
National Marine Manufacturers Association
SB 1402
Page 8
Outdoor Power Equipment Institute
Sand Car Manufacturers Association
Southern California Contractors Association
California Manufacturers and Technology Association
Opposition
None on file
Analysis Prepared by : Barry Jardini and Drew Liebert / JUD. /
(916) 319-2334