Legislative Update: Gut and Amend Creates New ‘Job Killer’ in Final Week of Session
(September 10, 2013) The California Chamber of Commerce has identified a new “job killer” bill—AB 1330 (J. A. Pérez; D-Los Angeles)—created through a controversial technique called “gut and amend,” on September 6, just one week before the scheduled end of the legislative year on September 13.
AB 1330 establishes the Green Zone Trust Fund, which will be funded by civil and criminal fines and penalties exacted on facilities located within Environmental Justice (EJ) communities regardless of any causal relationship between a facility’s conduct and the factors that led to the community’s characterization as an EJ Community. While well intended, AB 1330 will have serious unintended consequences for the very communities it seeks to help by discouraging private investment in those communities through use of geographically targeted penalties.
This is a very significant measure and there is no compelling event or circumstance that requires it to be adopted in 2013. AB 1330 would benefit from greater public input through the 2014 session, allowing stakeholders and legislators adequate time to identify problems and craft solutions. The CalChamber and a large coalition have urged the bill’s author to make it a two-year bill.
AB 1330 charges the California Environmental Protection Agency (Cal/EPA) with developing a list of the top 15% of communities in the state, based on census tracts, that are disproportionately impacted by environmental hazards. This task will almost certainly be accomplished with the help of the California Communities Environmental Health Screening Tool, Version 1 (CalEnviroScreen 1.0), which was completed by Cal/EPA this past April.
CalEnviroScreen is asserted to be a science-based tool that identifies the California communities most burdened by pollution from multiple sources and most vulnerable to its effects. During the academic workshop, however, the tool was heavily criticized for misusing data and drawing inaccurate conclusions. The tool has never undergone a peer review and never was intended to be used for a regulatory purpose.
In fact, Cal/EPA, recognizing the limitations of the tool, said it would not be used for these purposes; and stated in the Screening Tool document, “The CalEnviroScreen score is not an expression of health risk, and does not provide quantitative information on increases in cumulative impacts for specific sites or projects.”
During CalEnviroScreen’s development, the business community expressed concern that CalEnviroScreen would be misused to assert that specific businesses were the cause of pollution and health problems, and to justify changes to the way state and local agencies regulate these businesses. Although the CalChamber believes CalEnviroScreen is useful in helping to identify communities that may benefit from state and private investment, all the tool can do is reflect certain socioeconomic statistics, health care usage and the location of certain pollution sources, whether or not those sources pose a risk to the community. The tool was not designed to tell why those things are so, or why certain areas have a higher concentration of disadvantaged community residents.
Unfortunately, AB 1330 misuses CalEnviroScreen to identify areas where businesses will be assessed double-penalties by the Air Resources Board (ARB), the Department of Toxic Substances Control (DTSC), and the state’s 34 air quality management districts (AQMDs). While the bill’s language is not totally clear, it appears to require that these entities double the maximum amount of any fine or penalty for a violation that results in an emission or discharge in excess of permitted levels when the facility in violation is located within an EJ Community, as identified by Cal/EPA’s list. There are no “target levels” that trigger the doubling of the penalty. Instead, the threshold for the double-penalty is simply the facility’s existence in a listed EJ Community and a violation where an emission or discharge exceeds a “permitted level.”
It is bad policy to misuse the CalEnviroScreen to assert causation and administer higher penalties accordingly. Potentially worse than that, administering penalties in this way will inevitably change the way businesses decide where to locate and expand in the state, as moving from one geographic region to another will have a huge impact on potential liability under state and local laws. In this way, rather than helping the EJ communities, AB 1330 will instead red-line them and ensure that these already-disadvantaged communities lose jobs and tax revenue to surrounding communities that don’t happen to have been identified by Cal/EPA. At the same time as AB 1330 will be channeling resources into these communities through the EJ Small Grant Program, it will be pushing away other resources through the penalty structure that funds those grants.
List of Shame
Lastly, AB 1330 requires Cal/EPA to develop a public database on its website with complaints and enforcement cases for each board, department, and office of the agency, along with the compliance histories of all its regulated entities. Although there may be some public benefit from listing compliance histories for regulated entities that have been found to be in violation of the law, the same cannot be said for a public list of businesses that have complaints or enforcement cases pending.
Complaints and enforcement cases are not final judgments, and do not necessarily indicate guilt or wrong-doing by a business identified in a complaint or subject to an enforcement action. Listing these businesses on a website could subject them to discrimination by customers and make them targets in the media even though they have done nothing wrong. The listing also could be abused by competitors or unions seeking to organize a business. As such, CalChamber is very concerned with this proposal.
AB 1330 is waiting a vote by the full Senate. Contact your senator and urge a “no” vote on AB 1330.
Other ‘Job Killer’ Bills Await Action
Three other “job killer” bills await legislative action:
- AB 10 (Alejo; D-Salinas) Automatic Minimum Wage Increase — Unfairly imposes an automatic $2 increase in minimum wage over the next five years, that will continue to increase costs on employers of all sizes, regardless of other economic factors or costs that California employers are struggling with to sustain their business. Senate Rules.
- SB 365 (Wolk; D-Davis) Limitations on Tax Credits — Creates uncertainty for California employers making long-term investment decisions by requiring that tax incentives end 10 years after their effective date. Assembly Floor.
- SB 691 (Hancock; D-Oakland) Dramatically Increases Pollution Penalties — Dramatically increases existing strict-liability penalties for nuisance-based, non-vehicular air-quality violations without adequately defining what types and levels of pollution would trigger those penalties. Assembly Floor.