The Nickel Report

Policy makers in California have pledged to resist Trump administration policy changes on environmental and other issues. Senate Bill 1 (SB 1), proposing the California Environmental, Public Health and Workers Defense Act of 2019, is the California legislature’s current preemptive response to the administration’s attempts to modify certain federal environmental and worker safety laws.

SB 1 has passed the California Senate. It is awaiting a final hearing in the State Assembly’s Appropriations Committee, likely sometime in mid‑to‑late August. After that, it moves to the Assembly floor, where a final vote is required by the end of California’s legislative session on September 13, 2019.

SB 1 seeks to freeze federal Clean Air Act, Clean Water Act, Safe Drinking Water Act, Endangered Species Act, Fair Labor Standards Act, Occupational Safety and Health Act and Coal Mine Health and Safety Act requirements to those in place as of January 19, 2017. SB 1 refers to federal requirements existing as of this date, as “baseline federal standards.” SB 1 is intended to “ensure continued protections for the environment, natural resources, and public health and safety” in California, even if the noted federal laws are “undermined, amended or repealed” by making the baseline environmental standards the new floor for environmental and worker protections in California. Proposed Government Code § 120010(b).

In its current form, SB 1 expands opportunities for citizen suits, eliminates public comment from expedited agency rulemaking and policy changes, and significantly modifies California’s process for listing a species as threatened or endangered.

SB 1’s Citizen Suit Expansion

SB 1 authorizes a citizen suit under California law in either of the following scenarios:

• The federal Clean Air Act, Clean Water Act or Safe Drinking Water Act citizen suit provision is amended to “substantially restrict, condition, abridge, or repeal the citizen suit provision,” including recovery of fees or costs. Proposed Government Code §§ 120041(e), 120051(e)(1). In such a situation, a suit can be brought under California law to enforce baseline federal standards or any California standards or permit conditions required by the federal act; or
• Because of a change in federal law, a citizen suit to enforce the baseline federal standard can no longer be brought under federal law. Should this occur, a citizen suit can be brought under California law to enforce baseline federal standard.

A citizen suit can proceed provided that (1) there is 60-days advance written notice to the required government officials (e.g., Attorney General, district attorney, agency counsel) and the defendant outlining the specific provision(s) alleged to be violated; and (2) no governmental authority required to receive notice commenced an action during the notice period. SB 1 provides for the award attorneys’ fees and expert costs and fees in any such suit.

The provision of citizen suits under California environmental law is largely unprecedented and would cede interpretation of these federal laws to California courts.

SB 1’s Truncated Rulemaking Process

SB 1 requires the California Air Resources Board to regularly assess proposed and final changes to federal air quality standards, the State Water Resources Control Board to assess proposed and final changes to federal water quality and drinking water standards, and the Department of Industrial Relations to do the same for health and safety standards established under the federal Fair Labor Standards Act, the Occupational Safety and Health Act and the Coal Mine Safety Act. Their assessments evaluate whether a federal statutory or regulatory change is “less protective” than the baseline federal standard. If the agency determines it is, it must consider whether adjustments are needed to ensure California law provides protections that are at least as protective as the baseline federal standards. Quarterly, each agency is required to post its review and analysis on its website and in the California Regulatory Notice Register for at least 30 days before making a final decision. This 30-day window is the only mandated opportunity for public comment. If the agency decides to proceed with a rulemaking or a change to a state policy or plan, it can do so without further public involvement.

Under SB 1, so long as the agency adopts the baseline federal standard “without substantial modification,” it is deemed a “change without regulatory effect.” Proposed Government Code §§ 120041(d), 120051(d). SB 1 does not clarify what is meant by “substantial modification.” California Code of Regulations, Title 1, Section 100(a), however, explains a “change without regulatory effect” as a change that does not “materially alter any requirement, right, responsibility, condition, prescription or other regulatory element of any California Code of Regulations provision.” As the Assembly’s July 1, 2019, Judiciary Committee report notes, “there is little on‑point case law to provide guidance as to whether the Legislature can preemptively deem the adoption of a prior federal standard in the California Code of Regulations to be a change without regulatory effect without impermissibly delegating legislative authority to a state agency.”

If this fast-track approach is ultimately approved, it could threaten due process in California and create a lack of transparency.

SB 1’s Impacts on Endangered Species

Unlike SB 1’s provisions related to air, water and labor standards, SB 1’s provisions for endangered and threatened species do not limit “baseline federal standards” to the federal Endangered Species Act and its implementing regulations. Rather, it also includes “any incidental take permits, incidental take statements, or biological opinions in effect as of January 19, 2017, that were not otherwise permanently enjoined by a federal court as of that date.” Proposed Government Code § 120060. Bill opponents argue that freezing biological opinions to their writing as of January 2017 undermines evolving science. Bill proponents counter that the current administration tends to ignore science when it is politically expedient to do so and, because access to current science may be limited, the United States Fish and Wildlife Service may not be able to utilize proper science when updating biological opinions.

No later than 3 months following either a delisting or change in status (e.g., from endangered to threatened) under the federal act, SB 1 requires that the California Fish and Game Commission proceed with immediate listing—without following the regular listing process (e.g., petition evaluation, public comment, independent peer review etc.). SB 1 contains two exceptions to mandatory, immediate listing.

• The Fish and Game Commission determines the listing is not warranted because it does not meet state law requirements; or
• The Department of Fish and Wildlife recommends proceeding via the regular listing process. The Fish and Game Commission, however, has the authority to reject the recommendation and proceed with the immediate listing.

Despite the listing taking immediate effect, SB 1 again considers the listing a change without regulatory effect.

Upon listing, either the Fish and Game Commission or the Department of Fish and Wildlife can (1) authorize a take or (2) adopt conservation conditions promulgated pursuant to Section 4(d) of the federal Endangered Species Act or any federal incidental take statement, take permit or biological opinion in effect as of January 19, 2017. Under SB 1, the California Environmental Quality Act does not apply to the listing decision or the subsequent department or commission actions.

SB 1 also deems provisions of the California Endangered Species Act to be measures “relating to the control, appropriation, use or distribution of water” within the meaning of the Reclamation Act of 1902 and applies the California Endangered Species Act to the United States Bureau of Reclamation’s operation of the federal Central Valley Project. Proposed Government Code § 120061(g). The Central Valley Project is a federally operated conveyance project providing water resources to, among others, California’s agricultural industry. As the State Assembly’s Judiciary Committee report explains, the Central Valley Project has been subject to years of litigation regarding the project’s impact on fish and other species, and this provision raises significant questions regarding the applicability of the California Endangered Species Act to the federal Central Valley Project.

SB 1 — What’s Next

Large coalitions support and oppose SB 1. Expect both to be active in the next several weeks as the final fate of SB 1 is determined.

Should SB 1 become law, lawsuits are likely to follow. Anticipate litigation challenging the law and regulatory agency decisions on whether changes to California law to conform to baseline federal standards are made “without substantial modification” as well as possible citizen suits seeking to enforce baseline federal standards.