BILL ANALYSIS �
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2011-2012 Regular Session |
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BILL NO: SB 588 HEARING DATE: March 22, 2011
AUTHOR: Evans URGENCY: No
VERSION: As Introduced CONSULTANT: Bill Craven
DUAL REFERRAL: Judiciary FISCAL: Yes
SUBJECT: Coastal resources: California Coastal Act of 1976:
enforcement: penalties.
BACKGROUND AND EXISTING LAW
The California Coastal Act (Coastal 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. 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 damages, where appropriate.
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 CCC at a public hearing. The penalties would be
no less than $5000 and no more than $50,000 per violation.
Pursuant to section 30820 of the Public Resources Code (which is
not changed by this bill), the CCC would be required to consider
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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, whether the violator
has any prior history of violations, and 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.
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.
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 contends 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
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penalty authority.
BCDC's authority to regulate development along San Francisco Bay
serves as the best analog to the work of the CCC. Using its
civil penalty authority, BCDC has been successful at
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 and reiterated that conclusion in its
recommendations for 2011-12. In 2009, the 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, the violator
may also agree to a fine. A consent order in a cease and desist
proceeding avoids a potentially higher fine for the violator and
the costs and delays of litigation. However, those who refuse to
settle are rarely pursued for nonpayment of penalties because
litigation is required to collect unpaid penalties.
The lack of an ability of the CCC 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 nearly 2,000 cases. Since 1985, annual revenues in the CCC
enforcement account have averaged $134,000, which is not an
amount indicative of aggressive enforcement.
6. Organizations in support such as the Ocean Conservancy and
Friends of the Earth point out that the CCC is presently unable
to impose administrative civil penalties, that the court system
is overburdened, that the CCC has a backlog of 2000 cases, and
this bill could help the CCC settle cases and provide a
deterrent against future violations. These same points were made
by the Planning and Conservation League, Surfrider Foundation,
and the California Coastkeeper Alliance.
ARGUMENTS IN OPPOSITION
The Employers Council of Mendocino County contends that the CCC
has a conflict of interest in using civil penalty revenue to
enhance its enforcement effort. It is critical of the
evidentiary rules used by the CCC and objects to the potentially
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high fines of $50,000 per alleged violation.
The California Farm Bureau Federation views the bill as one that
will mean "a newfound source of revenue to fund the commission"
which it characterizes as an organization "with �a]
well-established authoritarian attitude." It prefers that
penalties be administered through the judiciary.
A coalition of business groups including the California Chamber
of Commerce, the CBIA, and others contends that the CCC would
benefit as a "bounty hunter" in that it could add to its budget
by collecting penalties. This coalition also echoes the concerns
of the Farm Bureau that enforcement of violations should be done
within the judicial branch. It adds that enforcement is not
costly to the CCC, that the Attorney General has been effective
in collecting penalties, and that growth in fees paid by CCC
project applicants has grown so much that it does not need to
add revenues through penalties.
COMMENTS
This bill is very similar to AB 226 (Ruskin) which was held on
the Senate floor in 2009 and later used as a vehicle by
Assemblyman Torrico for an unrelated topic in 2010.
The Ruskin bill was amended several times throughout the policy
committee process in both houses. It appears that most of those
amendments has been retained in SB 588, with one exception
discussed below.
These amendments include:
1. A cross reference to the public notice requirements in
the Coastal Act that was imposed by Senate Judiciary
Committee.
2. A clarification to emphasize that a person may not be
assessed an administrative penalty and a judicial penalty
for the same act that was imposed by Assembly Judiciary
Committee.
3. A provision that a person who refuses to pay an
administrative civil penalty or fails to comply with a
valid order of the CCC may be sued to enforce those
requirements, also imposed in the Assembly Judiciary
Committee.
4. A clarification that any lien recorded against a
violator's property shall have the effect of a judgment
lien. This amendment was taken in this Committee.
5. A provision sought by various local governments that a
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"person" for the purposes of this bill does not include
local governments when acting in a legislative or
adjudicative capacity. This amendment, also taken in this
Committee, removed the opposition of local government
associations in 2009.
The amendment which is not included in SB 588 would have changed
the fund designation of the penalty revenues. As drafted, the
penalties would go to an enforcement account of the CCC.
Evidentiary rules and due process. Although not within the
purview of this Committee, it is worth recalling the following
comment from the Assembly Judiciary Committee which confronted
this issue in the context of AB 226:
"To assure proper procedural rights, the Commission would follow
notice requirements and evidentiary rules already required by
existing statutes and the regulations. Since the imposition of
administrative penalties would simply be a component of a duly
noticed public hearing, hearings deciding administrative civil
penalties would be appropriately noticed and conducted
consistent with existing law and regulations.
Opponents of this measure claim that administrative hearings
lack appropriate evidentiary rules. However, enforcement
hearings at the Commission are governed by regulations which
contain existing rules of evidence. Those rules of evidence are
substantially similar to the rules of evidence used by other
agencies. For instance, the Water Board and the Bay Area Air
Quality Management District (BAAQMD) rely on the Administrative
Procedures Act. Also similar to the Commission's regulations,
BCDC has its own regulations limiting evidence and allowing any
relevant evidence. Since the Commission has existing
regulations regarding evidence for enforcement proceedings, and
this new authority would be tied to those enforcement
proceedings, existing regulations would thus apply to this new
�administrative civil liability] authority."
SUPPORT
Environmental Defense Center
California Coastal Commission
California Coastkeeper Alliance
Oceana
Ocean Conservancy
Friends of the Earth
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Planning and Conservation League
Heal the Bay
OPPOSITION
Employers Council of Mendocino County
California Farm Bureau Federation
American Council of Engineering Companies of California
California Association of REALTORS
California Building Industry Association
California Business Properties Association
California Chamber of Commerce
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