Administrative Penalty ProgramSB 527 - Regulatory Item

California Air Resources Board

Enforcement Division

Public Hearing

December 12, 2002

Sacramento, California

Current Penalty Process

• Historically, enforcement actions resolved through negotiated mutual settlements

• When an acceptable settlement cannot be reached, the matter may be pursued through the courts

Progression of Administrative Penalties

• 1990/SB 1874 - Heavy duty diesel vehicle inspection program (HSC 44011.6)

• 1995/SB 163 - Fuels-Related Regulations (HSC 43028 & 43031)

• 2001/SB 527 - Expands ARB’s authority to impose administrative civil penalties (HSC sections 42410 and 43023)

SB 527 Limits Penalty Assessment Amounts

• $10,000 per violation per day

• Maximum assessment not to exceed $100,000

• Cannot exceed the judicial civil penalty that could be assessed under the HSC for that violation

Three Tier Enforcement Process

• Most serious, complex cases are referred to judicial courts for enforcement if mutual settlement is unsuccessful

• Routine cases, administrative penalties could be pursued

• Complaints may be issued for more serious and complex of these remaining violations and citations issued for least serious, clear cut violations

Staff’s Proposal Broadens Existing Procedures

• Allows issuance of administrative penalties and administrative citations and complaints for all violations covered by SB 527

• Existing penalty provisions for fuel-related complaints remain unchanged ($25,000 - $250,000)

• Different maximum penalties for violations covered under SB 527 are set forth separately ($10,000 - $100,000)

Other Directives of SB 527

In response to other directives of SB 527, the staff has proposed modifications to:

Clarify that an administrative penalty is an alternative and not an addition to a judicial penalty

Make clear that ARB’s authority only extends to categories of violations for which it maintains authority to impose judicial penalties

ALJ appointed by the State Office of Administrative Hearings, not ARB, shall conduct Hearings authorized by sections 42410 and 43023 of the HSC

Amendments - To Comply with Provisions of the Legislation

Amend both hearing procedure regulations to add civil penalty limits in accordance with SB 527

Amend the existing criteria used for assessing penalties for fuels violations to also apply to assessments for violations covered under HSC §43023, and

Add a new provision establishing penalty assessment criteria for violations covered under HSC §42410.

New Criteria for Assessing Administrative Penalties for Stationary Sources

• The extent of harm caused by the violation;

• The nature and persistence of the violation;• The length of time over which the violation

occurs;• The frequency of past violations;• The record of maintenance;• The unproven or innovative nature of the control

equipment;

New Criteria (con’.t)• Any action taken by the respondent,

including the nature, extent, and time of response of the cleanup and construction undertaken, to mitigate the violation;

• The financial burden to the respondent; and

• The penalties or range of penalties set forth in the underlying rules or regulations that have been violated.

Other Minor Modifications

For purposes of clarity and conformity with other state

administrative hearing procedures

Administrative Hearing Process • Citation issued (e.g. typical $1,000.00 penalty)

• If disputed, citee may request a hearing

• Office of Administrative Hearing’s Administrative

Law Judge would hear case

• Burden of proof on ARB Staff

• Each side given opportunity to present evidence and tell their story

• Judge considers the issues raised and issues a decision

Environmental and Fiscal Impacts

No adverse impact on the environment

No environmental justice issues

Will not aversely affect businesses or have economic or fiscal impact on state or local governments

Benefits

• More efficient and expeditious process than judicial court

• Provide ARB with greater flexibility and allow staff to better utilize enforcement resources

• Affords fair hearings and due process

Alternatives Considered

• The Legislature set forth specific directives to implement an alternative administrative enforcement process

• Use the existing procedures

• Staff determined that no alternative would be more effective

Public Comments

None received during the 45-day comment period preceding this meeting

No Issues Identified

No Opposition Raised

Report to the Legislature

Report to the Legislature and the Governor is due

January 1, 2005 on administrative penalties

assessed by ARB under SB 527

Recommendation

Staff recommends that the Board adopt the proposed modifications

to the existing administrative hearing procedures