State agencies shouldn’t have free rein to charge exorbitant fines, especially to small communities that may not be able to pay them. That’s according to Sen. Jerry Sonnenberg of Sterling.
He’s the Senate sponsor of a proposal to limit the ability of a state agency to fine people, businesses or local government for violating state law or agency rules, particularly when an agency hasn’t notified an alleged violator in writing or given at least 20 business days to fix the problem.
Sonnenberg, a fan of reducing bureaucracy wherever possible, is pushing a bill to address situations like the kind faced by the city of Burlington, which was last year slapped with a nearly six-figure fine for violating the state’s clear water regulations.
According to a news release from the state Department of Public Health and Environment, which regulates water quality, the city was cited for violating 2,109 drinking water regulations in 2014, and it’s the second time the city has been cited for violations related to nitrate levels in public drinking water.
Nitrates come from fertilizer, according to the Environmental Protection Agency. Once ingested, they convert to nitrite, which can have serious health consequences for infants, young children, and pregnant or nursing mothers.
Burlington’s nitrate levels in its drinking water have been higher than the state standard since 2009. Once regulators discovered that violation in 2014, the Department of Public Health and Environment required the city to notify residents that the nitrate levels exceed the standard for safe drinking water. According to the Department, the city reported its drinking water had exceeded safe levels only once, in 2010, and never notified the public of the problem.
In November, according to the Burlington Record, the city completed negotiations with the department on the fine, which was reduced to $150,000, along with an agreement to implement a project to reduce nitrate levels back to safe standards.
Sonnenberg’s plan to rectify all this — and to make sure other municipalities, individuals and businesses in Colorado don’t end up in the same situation — comes with a three-tiered structure for fines. Cities, counties or other governments, for instance, would have to pay five percent of its tax revenue from the most recent fiscal year. Businesses could be hit for as high as 10 percent of their operating revenue for the past fiscal year. Individuals would have to pony up to 10 percent of their taxable income based on the most recent state income tax return.
This proposed legislation at the Statehouse doesn’t apply to criminal violations.
One of the biggest problems for the plan, though, is its cost. A fiscal review produced by nonpartisan economists at the state Capitol estimate it will cost the state about $40 million per year because of lost revenue. The bill also carries a $1 million price tag for implementation. That cost, which would impact the 2016-17 budget that just passed the Statehouse, will make it a tough sell in the Democratically-controlled House.
The bill drew heated discussion in the Senate last week between Republican Sonnenberg and Democratic Sen. Andy Kerr of Lakewood.
The plan “quits having us balance the budget on the backs of people, by using a hammer to levy fines against citizens and businesses,” Sonnenberg told the Senate. “If there’s a problem on water or air quality, or filing of paperwork, let’s figure out how to fix it rather than allowing government to be heavy-handed.”
He cited Burlington as an example, noting how the city faced a nearly $1 million fine but has only a budget of $3 million. But he didn’t mention that the city had negotiated the fine down to $150,000, a point Kerr raised during the debate.
Kerr said the bill would put the 2016-17 state budget out of whack by $41 million.
“That’s a heavy hammer on the citizens of Colorado,” Kerr said, adding that the only place to cover that hit to the state budget is to increase the K-12 shortfall by $41 million. “That’s balancing the budget on the backs of our students,” he said.
As to the fine itself, Kerr pointed out that Burlington had “blatantly” violated the rules about nitrate for years and has done nothing to address it. “If intentionally not reporting your water quality violations for years does not qualify”— as a reason for action by the Department of Public Health and Environment— “I don’t know what is,” Kerr said.
Sonnenberg replied that the city had been trying for years to figure out how to solve the problem, including hiring contractors who bungled the work. The city then went to the Department of Public Health and Environment for help, Sonnenberg said, and what the city got in return was a $1 million fine.
But that agency isn’t the only one, Sonnenberg went on, citing large fines levied against insurance companies by the Division of Insurance, which is under the Department of Regulatory Agencies.
“Let’s do what we can to be helpful” to the citizens of Colorado, Sonnenberg said.
The bill also drew complaints about the insurance division levying a $250,000 fine for a bail bonds agent, and a $30,000 fine by CDPHE on a garbage dump in Custer County. “CDPHE is out of control,” said Republican Sen. Larry Crowder of Alamosa.
Democratic Sen. Michael Johnston of Denver jumped into the fray, noting the bill would allow a violator to continue violating the law for another month before they’d have to respond. Think Chipotle, or a marijuana business, or mine wastewater spills, he said.
The public health department has been under fire from Republicans for months on several issues: its refusal to investigate Planned Parenthood over allegations that the organization engaged in illegal trafficking of fetal tissue; and its implementation of the Clean Power Plan, which led to one of the more contentious issues surrounding passage of the 2016-17 state budget.
The proposal is awaiting a final vote in the Senate; it then heads to the House.
Photo credit: Jeff Ruane, Creative Commons, Flickr.