Existing law authorizes the legislative body of a local agency, as defined, to make, by ordinance, any violation of an ordinance subject to an administrative fine or penalty, as specified. Existing law requires the ordinance adopted by the local agency to provide for a reasonable period of time, as specified in the ordinance, for a person responsible for a continuing violation to correct or otherwise remedy the violation prior to the imposition of administrative fines or penalties, when the violation pertains to building, plumbing, electrical, or other similar structural or zoning issues, that do not create an immediate danger to health or safety.

This bill would allow the ordinance to provide for the immediate imposition of administrative fines or penalties for the violation of building, plumbing, electrical, or other similar structural, health and safety, or zoning requirements if the violation exists as a result of, or to facilitate, the illegal cultivation of cannabis, except as specified.

Existing law authorizes the legislative body of a local agency, as defined, to make, by ordinance, any violation of an ordinance subject to an administrative fine or penalty, as specified. Existing law requires the ordinance adopted by the local agency to provide for a reasonable period of time, as specified in the ordinance, for a person responsible for a continuing violation to correct or otherwise remedy the violation prior to the imposition of administrative fines or penalties, when the violation pertains to building, plumbing, electrical, or other similar structural or zoning issues, that do not create an immediate danger to health or safety.

This bill would allow the ordinance to provide for the immediate imposition of administrative fines or penalties for the violation of building, plumbing, electrical, or other similar structural, health and safety, or zoning requirements if the violation exists as a result of, or to facilitate, the illegal cultivation of cannabis, except as specified.

Existing law authorizes the legislative body of a local agency, as defined, to make, by ordinance, any violation of an ordinance subject to an administrative fine or penalty, as specified. Existing law requires the ordinance adopted by the local agency to provide for a reasonable period of time, as specified in the ordinance, for a person responsible for a continuing violation to correct or otherwise remedy the violation prior to the imposition of administrative fines or penalties, when the violation pertains to building, plumbing, electrical, or other similar structural or zoning issues, that do not create an immediate danger to health or safety.

This bill would provide that the ordinance may, but is not required to, provide a reasonable time for a person responsible for a continuing violation to correct or otherwise remedy the violation prior to the may provide for the immediate imposition of administrative fines or penalties, when penalties for the violation both pertains to of building, plumbing, electrical, or other similar structural structural, health and safety, or zoning issues, that do not create an immediate danger to health or safety, and exists requirements if the violation exists as a result of, or to facilitate, the illegal cultivation of cannabis. cannabis, except as specified.

Existing law authorizes the legislative body of a local agency, as defined, to make, by ordinance, any violation of an ordinance subject to an administrative fine or penalty, as specified. Existing law requires the ordinance adopted by the local agency to provide for a reasonable period of time, as specified in the ordinance, for a person responsible for a continuing violation to correct or otherwise remedy the violation prior to the imposition of administrative fines or penalties, when the violation pertains to building, plumbing, electrical, or other similar structural or zoning issues, that do not create an immediate danger to health or safety.

This bill would provide that the ordinance may, but is not required to, provide a reasonable time for a person responsible for a continuing violation to correct or otherwise remedy the violation prior to the imposition of administrative fines or penalties, when the violation both pertains to building, plumbing, electrical, or other similar structural or zoning issues, that do not create an immediate danger to health or safety, and exists as a result of, or to facilitate, the cultivation of cannabis.

 THIRD READING  

Bill No: AB 2164

Author:

:

Vote:

SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/27/18

AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara, Moorlach

ASSEMBLY FLOOR: 77-0, 5/31/18 - See last page for vote

SUBJECT:

SOURCE: California State Sheriffs’ Association

DIGEST:

This bill allows a local agency to impose administrative fines immediately for certain violations attributable to illegal cultivation of cannabis.

ANALYSIS:

Existing law:

1. Allows a county or city to make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.
2. Allows the legislative body of a county or city to collect any fee, cost, or charge incurred in specified activities, including the abatement of public nuisances, enforcement of specified zoning ordinances, inspections and abatement of violations of the State Housing Law, inspections and abatement of violations of the California Building Standards Code, and inspections and abatement of violations related to local ordinances that implement these laws.
3. Limits the amount of a fee, cost, or charge described above to the actual cost incurred performing the inspections and enforcement activity, including permit fees, fines, late charges, and interest.
4. Provides that violation of a county or city ordinance is a misdemeanor, unless by ordinance it is made an infraction.
5. Provides that a violation of a county or city ordinance may be prosecuted by county or city authorities in the name of the people of the State of California, or redressed by civil action.
6. Provides that every violation of a county or city ordinance determined to be an infraction is punishable by the following:
   1. A fine not exceeding $100 for a first violation;
   2. A fine not exceeding $200 for a second violation of the same ordinance within one year; and,
   3. A fine not exceeding $500 for each additional violation of the same ordinance within one year.
7. Provides that a violation of local building and safety codes determined to be an infraction is punishable by the following:
   1. A fine not exceeding $100 for a first violation;
   2. A fine not exceeding $500 for a second violation of the same ordinance within one year; and,
   3. A fine not exceeding $1,000 for each additional violation of the same ordinance within one year of the first violation.
8. Allows the legislative body of a local agency, by ordinance, to make any violation of any ordinance enacted by the local agency subject to an administrative fine or penalty, and requires the local agency to set forth the administrative procedures that govern the imposition, enforcement, collection, and administrative review by the local agency of those administrative fines or penalties.
9. Requires the administrative procedures to provide for a reasonable period of time for a person responsible for a continuing violation to correct or otherwise remedy the violation prior to the imposition of administrative fines or penalties, when the violation pertains to building, plumbing, electrical, or other similar structural or zoning issues that do not create an immediate danger to health or safety.
10. Provides a process for appealing a local agency's decision regarding administrative fines or penalties via civil proceedings, including reimbursement of court filing fees by the local agency if the court finds in favor of the contestant, as specified.
11. Allows persons 21 years or age or older to possess, plant, cultivate, harvest, dry, or process not more than six living cannabis plants (personal cultivation), subject to specified restrictions that include reasonable regulations enacted and enforced by counties or cities.
12. Prohibits counties and cities from completely prohibiting personal cultivation inside a private residence or accessory structure to a private residence located upon the grounds of a private residence that is fully enclosed and secure.
13. Allows counties and cities to completely prohibit personal cultivation outdoors upon the grounds of a private residence.

This bill:

1. Allows a local agency to adopt an ordinance that provides for the immediate imposition of administrative fines or penalties for the violation of building, plumbing, electrical, or other similar structural, health and safety, or zoning requirements if the violation exists as a result of, or to facilitate, the illegal cultivation of cannabis.
2. Requires, if a local agency adopts such an ordinance, the ordinance to provide for a reasonable period of time for the correction or remedy of the violation prior to the imposition of administrative fines or penalties pursuant to existing law if all of the following are true:
   1. A tenant is in possession of the property that is the subject of the administrative action;
   2. The rental property owner or agent can provide evidence that the rental or lease agreement prohibits the cultivation of cannabis; and
   3. The rental property owner or agent did not know the tenant was illegally cultivating cannabis and no complaint, property inspection, or other information caused the rental property owner or agent to have actual notice of the illegal cannabis cultivation.

Background

Cannabis regulation. On November 8, 2016, California voters approved Proposition 64—the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA)—which legalized the recreational use of cannabis by adults age 21 and older. AUMA provides for the licensure and regulation of commercial adult cannabis activities by various state agencies and imposes an excise tax and a cultivation tax on cannabis and cannabis products. Proposition 64 was subsequently amended by SB 94 (Committee on Budget and Fiscal Review, Chapter 27, Statutes of 2017) and AB 133 (Committee on Budget, Chapter 253, Statutes of 2017), which clarified certain provisions of Proposition 64 and established a single regulatory scheme for both medical and recreational cannabis activity and commerce.

AUMA establishes a three-tier system of licensing for commercial cannabis activity, including production, distribution, and retail sale. Entities engaged in commercial cannabis activity must possess licenses to conduct particular types of activities, issued by one of three state licensing authorities:

• The Bureau of Cannabis Control within the Department of Consumer Affairs, which licenses retail sale, delivery, transportation, distribution, and testing;
• The Department of Public Health, which licenses manufacturing; and
• The California Department of Food and Agriculture, which licenses cultivation.

If a local jurisdiction requires it, commercial cannabis businesses must receive a local license and comply with local zoning and other regulatory requirements. State licenses (and many local licenses) require payment of the applicable licensing fees. These fees can be costly: for example, cultivation license fees range from $1,205 to $77,905 per year, depending on the size and type of cultivation operation. The AUMA imposes a cannabis excise tax upon purchasers of cannabis or cannabis products sold in this state, equal to 15% of the retail sale’s gross receipts, and a cultivation tax at the following rates:

• $9.25 per dry-weight ounce on cannabis flowers; and
• $2.75 per dry-weight ounce on cannabis leaves.

State and local governments also impose sales and use taxes on cannabis, on top of the excise tax and the cultivation tax. The sales and use tax is based upon the retailer's gross receipts. The state sales and use tax rate is equal to 7.25%, and local rates can add up to an additional 2%.

Violations of state or local licensing requirements, including operating without a license, are punishable by a civil fine of three times the amount of the license fee for each violation, and the court may order the destruction of cannabis associated with that violation. Each day of operation counts as a separate violation. Penalties imposed in circumstances where a county counsel, district attorney, or city attorney prosecuted the case are deposited in the local government’s general fund. In addition, AUMA provides that criminal penalties still apply.

With the legalization of cannabis—under a strict regulatory framework and subject to taxation and licensing fees—there is greater incentive to both illegally cultivate cannabis outside the regulatory program and to divert illegally grown cannabis into the legal market. Illegal cannabis grows are often accompanied by violations of other local ordinances, such as building and safety standards. But local governments can find it challenging to punish violators due to the ability to cure such violations, as required by state law. The California State Sheriffs’ Association wants to allow local governments to immediately impose some fines related to illegal cannabis cultivation.

Comments

1) Purpose of the bill. According to the author, “until 2015, medical cannabis existed in a grey area of legality through a patchwork of Proposition 215, case law, and local ordinances. With the passage of the Medical Cannabis Regulation and Safety Act (MCRSA) in 2015, the medical cannabis industry finally had a framework for full licensure and regulation of the medical cannabis market. With the passage of Proposition 64 in 2016, adult-use of cannabis was legalized, and subsequent legislation has merged the medical and adult –use licensing system into a cohesive regulatory framework. Many challenges remain, however, not the least of which is the still thriving black market operators who are under-cutting the legal marketplace by growing cannabis illicitly in homes, strip malls, and warehouses – often times stealing electricity, and creating health and safety hazards. Last year in Sacramento County, the Sheriff’s department have responded to hundreds of calls relating to illegal cannabis grow operations, including one case where 183 plants were seized, along with 29 pounds of processed cannabis, a gun, and over $5,000 in cash. In these circumstances where ordinances are violated, it is very easy for well-funded grow operations to simply move onto the next location over and over, effectively correcting the ordinance violation, without ever having to pay the administrative penalties. AB 2164, allows but does not require, local governments to amend their ordinances to remove the time period to correct a violation in cases of cannabis cultivation only. This removes at least one monetary incentive for illicit grows to continually move while also giving local governments the ability to bring meaningful penalties on willfully illegal growers.”

2) The long arm of the law. AUMA makes unlicensed commercial cannabis activity a crime punishable by civil penalties of up to three times the cost of a license per day of violation. State regulations provide a tiered system of penalty assessment that take into account multiple factors when accessing fines such as the nature and severity of the criminal act, prior disciplinary record, and actual or potential harm to the public, among others. However, fines can be imposed above these amounts up to the maximum under the law, allowing for fines for illegal cultivation to be assessed at over $210,000 per day. Even the smallest operations can be assessed over $3,600 per day. These fines are in addition to criminal prosecution, if necessary. AB 2164 allows local governments to immediately impose penalties for violations of local ordinances associated with illegal cannabis cultivation, with the goal of discouraging illegal cultivation through additional monetary fines. However, the amounts that local agencies can impose for violations of local ordinances is limited to $1,000 per violation—significantly less than the fines imposed under AUMA. Accordingly, it is unclear whether the extra fines authorized by this bill will significantly change the behavior of scofflaws. In addition, it is unclear why violations associated with illegal cannabis cultivation should be treated differently from the same violations that stem from another cause. Is the additional authority in AB 2164 needed?

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 7/3/18)

California State Sheriffs’ Association (source)

California Police Chiefs Association

Rural County Representatives of California

OPPOSITION: (Verified 7/3/18)

None received

ASSEMBLY FLOOR: 77-0, 5/31/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Harper

Prepared by:

7/3/18 15:27:12

**** END ****

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2017 - 2018 Regular

Local ordinances: fines and penalties: cannabis

Allows a local agency to impose administrative fines immediately for certain violations attributable to illegal cultivation of cannabis.

Background

The United States and California Constitutions prohibit governments from impairing property rights without due process of law. The California Constitution also allows counties and cities to adopt and enforce ordinances that regulate local health, safety, peace, and welfare. Specifically, a city or county may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws. This "police power" provides the right to adopt and enforce zoning regulations, as long as they do not conflict with state laws.

Local penalties for ordinance violations. As an alternative to civil and criminal enforcement mechanisms, a local agency’s legislative body can make any violation of any of its ordinances subject to an administrative fine or penalty (SB 814, Alquist, 1995). The local agency must adopt an ordinance specifying the administrative procedures that govern the imposition, enforcement, collection, and administrative review of the fines or penalties. The administrative procedures must grant a reasonable time to remedy a continuing violation before the imposition of administrative fines or penalties, when the violation pertains to building, plumbing, electrical, or other similar structural and zoning issues that do not create an immediate danger to health or safety.

Within 20 days after service of a final administrative order or decision regarding administrative fines or penalties, a person contesting that final administrative order or decision may appeal in Superior Court. Local agencies must go through a civil court proceeding to collect unpaid fines and penalties.

Under state law, a violation of a local ordinance is a misdemeanor unless by ordinance it is made an infraction. In general, every ordinance violation that is determined to be an infraction is punishable by:

• A fine not exceeding $100 for a first violation.
• A fine not exceeding $200 for a second violation of the same ordinance within one year.
• A fine not exceeding $500 for each additional violation of the same ordinance within one year.

As an exception to the general limits on fines for infractions, SB 567 (Torlakson, 2003) established higher limits for a violation of local building and safety codes determined to be an infraction. These violations are punishable by:

• A fine not exceeding $100 for a first violation.
• A fine not exceeding $500 for a second violation of the same ordinance within one year.
• A fine not exceeding $1,000 for each additional violation of the same ordinance within one year.

Last year, the Legislature added a second exception to allow for increased fines for violations of event permit requirements. Specifically, AB 556 (Limon, 2017) increased the maximum fines for violations of county event permit ordinances where the activity is commercial in nature to $150 for the first violation, $700 for the second violation within three years, and $2,500 for the third violation within three years.

Cities and counties may also impose fines and penalties through civil or criminal proceedings. These fines and penalties are limited to $1,000 per violation and six months in prison.

Cannabis regulation. On November 8^th, 2016, California voters approved Proposition 64—the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA)—which legalized the recreational use of cannabis by adults age 21 and older. AUMA provides for the licensure and regulation of commercial adult cannabis activities by various state agencies and imposes an excise tax and a cultivation tax on cannabis and cannabis products. Proposition 64 was subsequently amended by SB 94 (Committee on Budget and Fiscal Review, 2017) and AB 133 (Committee on Budget), which clarified certain provisions of Proposition 64 and established a single regulatory scheme for both medical and recreational cannabis activity and commerce.

AUMA establishes a three-tier system of licensing for commercial cannabis activity, including production, distribution, and retail sale. Entities engaged in commercial cannabis activity must possess licenses to conduct particular types of activities, issued by one of three state licensing authorities:

• The Bureau of Cannabis Control within the Department of Consumer Affairs (Bureau), which licenses retail sale, delivery, transportation, distribution, and testing;
• The Department of Public Health, which licenses manufacturing; and
• The California Department of Food and Agriculture, which licenses cultivation.

If a local jurisdiction requires it, commercial cannabis businesses must receive a local license and comply with local zoning and other regulatory requirements. State licenses (and many local licenses) require payment of the applicable licensing fees. These fees can be costly: for example, cultivation license fees range from $1,205 to $77,905 per year, depending on the size and type of cultivation operation. The AUMA imposes a cannabis excise tax upon purchasers of cannabis or cannabis products sold in this state, equal to 15% of the retail sale’s gross receipts, and a cultivation tax at the following rates:

• $9.25 per dry-weight ounce on cannabis flowers; and
• $2.75 per dry-weight ounce on cannabis leaves.

State and local governments also impose sales and use taxes on cannabis, on top of the excise tax and the cultivation tax. The sales and use tax is based upon the retailer's gross receipts. The state sales and use tax rate is equal to 7.25%, and local rates can add up to an additional 2%.

Violations of state or local licensing requirements, including operating without a license, are punishable by a civil fine of three times the amount of the license fee for each violation, and the court may order the destruction of cannabis associated with that violation. Each day of operation counts as a separate violation. Penalties imposed in circumstances where a county counsel, district attorney, or city attorney prosecuted the case are deposited in the local government’s general fund. In addition, AUMA provides that criminal penalties still apply.

With the legalization of cannabis—under a strict regulatory framework and subject to taxation and licensing fees—there is greater incentive to both illegally cultivate cannabis outside the regulatory program and to divert illegally grown cannabis into the legal market. Illegal cannabis grows are often accompanied by violations of other local ordinances, such as building and safety standards. But local governments can find it challenging to punish violators due to the ability to cure such violations, as required by state law. The California State Sheriffs Association wants to allow local governments to immediately impose some fines related to illegal cannabis cultivation.

Proposed Law

Assembly Bill 2164 allows a local agency to immediately impose administrative fines for health and safety violations attributable to illegal cultivation of cannabis, notwithstanding the requirement in current law to provide a reasonable period of time to cure a violation.

Specifically, AB 2164 allows a local agency to adopt an ordinance that provides for the immediate imposition of administrative fines or penalties for the violation of building, plumbing, electrical, or other similar structural, health and safety, or zoning requirements if the violation exists as a result of, or to facilitate, the illegal cultivation of cannabis. If a local agency adopts such an ordinance, that ordinance must provide for a reasonable period of time for the correction or remedy of the violation prior to the imposition of administrative fines or penalties pursuant to existing law if all of the following are true:

• A tenant is in possession of the property that is the subject of the administrative action;
• The rental property owner or agent can provide evidence that the rental or lease agreement prohibits the cultivation of cannabis; and
• The rental property owner or agent did not know the tenant was illegally cultivating cannabis and no complaint, property inspection, or other information caused the rental property owner or agent to have actual notice of the illegal cannabis cultivation.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. According to the author, “until 2015, medical cannabis existed in a grey area of legality through a patchwork of Proposition 215, case law, and local ordinances. With the passage of the Medical Cannabis Regulation and Safety Act (MCRSA) in 2015, the medical cannabis industry finally had a framework for full licensure and regulation of the medical cannabis market. With the passage of Proposition 64 in 2016, adult-use of cannabis was legalized, and subsequent legislation has merged the medical and adult –use licensing system into a cohesive regulatory framework.

Many challenges remain, however, not the least of which is the still thriving black market operators who are under-cutting the legal marketplace by growing cannabis illicitly in homes, strip malls, and warehouses – often times stealing electricity, and creating health and safety hazards. Last year in Sacramento County, the Sheriff’s department have responded to hundreds of calls relating to illegal cannabis grow operations, including one case where 183 plants were seized, along with 29 pounds of processed cannabis, a gun, and over $5,000 in cash. In these circumstances where ordinances are violated, it is very easy for well-funded grow operations to simply move onto the next location over and over, effectively correcting the ordinance violation, without ever having to pay the administrative penalties.

AB 2164, allows but does not require, local governments to amend their ordinances to remove the time period to correct a violation in cases of cannabis cultivation only. This removes at least one monetary incentive for illicit grows to continually move while also giving local governments the ability to bring meaningful penalties on willfully illegal growers.”

2. The long arm of the law. AUMA makes unlicensed commercial cannabis activity a crime punishable by civil penalties of up to three times the cost of a license per day of violation. State regulations provide a tiered system of penalty assessment that take into account multiple factors when accessing fines such as the nature and severity of the criminal act, prior disciplinary record, and actual or potential harm to the public, among others. However, fines can be imposed above these amounts up to the maximum under the law, allowing for fines for illegal cultivation to be assessed at over $210,000 per day. Even the smallest operations can be assessed over $3,600 per day. These fines are in addition to criminal prosecution, if necessary. AB 2164 allows local governments to immediately impose penalties for violations of local ordinances associated with illegal cannabis cultivation, with the goal of discouraging illegal cultivation through additional monetary fines. However, the amounts that local agencies can impose for violations of local ordinances is limited to $1,000 per violation—significantly less than the fines imposed under AUMA. Accordingly, it is unclear whether the extra fines authorized by this bill will significantly change the behavior of scofflaws. In addition, it is unclear why violations associated with illegal cannabis cultivation should be treated differently from the same violations that stem from another cause. The Committee may wish to consider whether AB 2164 is needed.

Assembly Actions

Assembly Local Government Committee: 8-0

Assembly Floor: 77-0

Support and Opposition

(6/22/18)

Support: California State Sheriffs’ Association; Rural County Representatives of California.

Opposition: Unknown.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2164

Author:(Cooley)

As Amended Ver:May 29, 2018

Majority vote

SUMMARY: Allows local agencies to immediately impose administrative fines or penalties for the violation of building, plumbing, electrical, or other similar structural, health and safety, or zoning requirements if the violation exists as a result of, or to facilitate, the illegal cultivation of cannabis. Specifically, this bill:

1. Allows local agencies to adopt ordinances that provide for the immediate imposition of administrative fines or penalties for the violation of building, plumbing, electrical, or other similar structural, health and safety, or zoning requirements if the violation exists as a result of, or to facilitate, the illegal cultivation of cannabis.
2. Requires, if a local agency adopts an ordinance as described in 1), above, that ordinance to provide for a reasonable period of time for the correction or remedy of the violation prior to the imposition of administrative fines or penalties pursuant to existing law if all of the following are true:
   1. A tenant is in possession of the property that is the subject of the administrative action;
   2. The rental property owner or agent can provide evidence that the rental or lease agreement prohibits the cultivation of cannabis; and,
   3. The rental property owner or agent did not know the tenant was illegally cultivating cannabis and no complaint, property inspection, or other information caused the rental property owner or agent to have actual notice of the illegal cannabis cultivation.

FISCAL EFFECT: None

COMMENTS:

1. Background. A county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws. This "police power" provides the right to adopt and enforce zoning regulations, as long as they do not conflict with state laws.

Current law allows counties and cities to establish ordinances, and makes violations of ordinances misdemeanors, unless by ordinance the county or city makes them infractions. The violation of an ordinance may be prosecuted by county or city authorities in the name of the people of the State of California, or redressed by civil action.

1. Administrative Alternative. As an alternative to the court process, a local agency can make any violation of any of its ordinances subject to an administrative fine or penalty. This provision was enacted in 1995 to relieve the courts of some of these cases and offer local governments a faster, easier, and less costly means of pursuing remedies for ordinance violations.

In order to make an ordinance violation subject to an administrative fine or penalty, the local agency must adopt an ordinance specifying the administrative procedures that govern the imposition, enforcement, collection, and administrative review of the fines or penalties. A person may appeal such fines or penalties in Superior Court within 20 days after service of a final administrative order or decision. Local agencies must pursue a civil court proceeding to collect fines and penalties that are not secured via the administrative process.

Of note for the purposes of this bill, current law requires these administrative procedures to grant a person responsible for a continuing violation a reasonable time to remedy the violation before the local agency may impose fines or penalties when the violation pertains to building, plumbing, electrical, or other similar structural and zoning issues that do not create an immediate danger to health or safety.

1. Author's Statement. According to the author, "Until 2015, medical cannabis existed in a grey area of legality through a patchwork of Proposition 215, case law, and local ordinances. With the passage of the Medical Cannabis Regulation and Safety Act (MCRSA) in 2015, the medical cannabis industry finally had a framework for full licensure and regulation of the medical cannabis market. With the passage of Proposition 64 in 2016, adult-use of cannabis was legalized, and subsequent legislation has merged the medical and adult –use licensing system into a cohesive regulatory framework.

"Many challenges remain, however, not the least of which is the still thriving black market operators who are under-cutting the legal marketplace by growing cannabis illicitly in homes, strip malls, and warehouses – often times stealing electricity, and creating health and safety hazards. Last year in Sacramento County, the Sheriff's department responded to hundreds of calls relating to illegal cannabis grow operations, including one case where 183 plants were seized, along with 29 pounds of processed cannabis, a gun, and over $5,000 in cash. In these circumstances where ordinances are violated, it is very easy for well-funded grow operations to simply move onto the next location over and over, effectively correcting the ordinance violation, without ever having to pay the administrative penalties.

"AB 2164, allows, but does not require, local governments to amend their ordinances to remove the time period to correct a violation in cases of cannabis cultivation only. This removes at least one monetary incentive for illicit grows to continually move while also giving local governments the ability to bring meaningful penalties on willfully illegal growers."

1. Bill Summary. This bill allows local agencies to adopt ordinances that provide for the immediate imposition of administrative fines or penalties for the violation of building, plumbing, electrical, or other similar structural, health and safety, or zoning requirements if the violation exists as a result of, or to facilitate, the illegal cultivation of cannabis. If a local agency adopts such an ordinance, it must provide for a reasonable period of time for the correction or remedy of the violation prior to the imposition of administrative fines or penalties pursuant to existing law if all of the following are true:
   1. A tenant is in possession of the property that is the subject of the administrative action;
   2. The rental property owner or agent can provide evidence that the rental or lease agreement prohibits the cultivation of cannabis; and,
   3. The rental property owner or agent did not know the tenant was illegally cultivating cannabis and no complaint, property inspection, or other information caused the rental property owner or agent to have actual notice of the illegal cannabis cultivation.

This bill is sponsored by the California State Sheriffs' Association.

1. Arguments in Support. California State Sheriffs' Association, sponsor of this bill, states, "There are reports from the field that alleged ordinance violators in the context of cannabis cultivation effectively use this 'curing' period to temporarily move or eliminate the violation to avoid the sanction, or successfully delay proceedings while they assert they are fixing the violation, and then go right back to violating the ordinance. Given the nuisance that unlawful cannabis activities can present, we believe it is appropriate to give local agencies the authority to have an ordinance that does not provide the 'curing' period when the violation deals with cannabis cultivation. An agency that wants to retain such a remedy period would not be precluded from doing so, but it would give an agency that wants to address these issues more expeditiously the ability to do so by avoiding the curing period."
2. Arguments in Opposition. None on file.

Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958 FN: 0003390

ASSEMBLY THIRD READING

ATR Bill Id:AB 2164

Author:(Cooley)

As Introduced Ver:February 12, 2018

Majority vote

SUMMARY: Allows local agencies to impose administrative fines or penalties for violations of local ordinances pertaining to building, plumbing, electrical, or other similar structural or zoning issues that do not create an immediate danger to health or safety without providing a reasonable time for the responsible person to correct or otherwise remedy the violation, if the violation exists as a result of, or to facilitate, the cultivation of cannabis.

FISCAL EFFECT: None

COMMENTS:

1. Background. A county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws. This "police power" provides the right to adopt and enforce zoning regulations, as long as they do not conflict with state laws.

Current law allows counties and cities to establish ordinances, and makes violations of ordinances misdemeanors, unless by ordinance the county or city makes them infractions. The violation of an ordinance may be prosecuted by county or city authorities in the name of the people of the State of California, or redressed by civil action.

1. Administrative Alternative. As an alternative to the court process, a local agency can make any violation of any of its ordinances subject to an administrative fine or penalty. This provision was enacted in 1995 to relieve the courts of some of these cases and offer local governments a faster, easier, and less costly means of pursuing remedies for ordinance violations.

In order to make an ordinance violation subject to an administrative fine or penalty, the local agency must adopt an ordinance specifying the administrative procedures that govern the imposition, enforcement, collection, and administrative review of the fines or penalties. A person may appeal such fines or penalties in Superior Court within 20 days after service of a final administrative order or decision. Local agencies must pursue a civil court proceeding to collect fines and penalties that are not secured via the administrative process.

Of note for the purposes of this bill, current law requires these administrative procedures to grant a person responsible for a continuing violation a reasonable time to remedy the violation before the local agency may impose fines or penalties when the violation pertains to building, plumbing, electrical, or other similar structural and zoning issues that do not create an immediate danger to health or safety.

1. Author's Statement. According to the author, "Until 2015, medical cannabis existed in a grey area of legality through a patchwork of Proposition 215, case law, and local ordinances. With the passage of the Medical Cannabis Regulation and Safety Act (MCRSA) in 2015, the medical cannabis industry finally had a framework for full licensure and regulation of the medical cannabis market. With the passage of Proposition 64 in 2016, adult-use of cannabis was legalized, and subsequent legislation has merged the medical and adult –use licensing system into a cohesive regulatory framework.

"Many challenges remain, however, not the least of which is the still thriving black market operators who are under-cutting the legal marketplace by growing cannabis illicitly in homes, strip malls, and warehouses – often times stealing electricity, and creating health and safety hazards. Last year in Sacramento County, the Sheriff's department responded to hundreds of calls relating to illegal cannabis grow operations, including one case where 183 plants were seized, along with 29 pounds of processed cannabis, a gun, and over $5,000 in cash. In these circumstances where ordinances are violated, it is very easy for well-funded grow operations to simply move onto the next location over and over, effectively correcting the ordinance violation, without ever having to pay the administrative penalties.

"AB 2164, allows, but does not require, local governments to amend their ordinances to remove the time period to correct a violation in cases of cannabis cultivation only. This removes at least one monetary incentive for illicit grows to continually move while also giving local governments the ability to bring meaningful penalties on willfully illegal growers."

1. Bill Summary. This bill allows local agencies to impose administrative fines or penalties for violations of local ordinances pertaining to building, plumbing, electrical, or other similar structural or zoning issues that do not create an immediate danger to health or safety without providing a reasonable time for the responsible person to correct or otherwise remedy the violation, if the violation exists as a result of, or to facilitate, the cultivation of cannabis.

This bill is sponsored by the California State Sheriffs' Association.

1. Policy Consideration. Under current law implementing MCRSA and Proposition 64, persons 21 years of age or older may engage in personal cultivation of cannabis, subject to specified restrictions that include reasonable regulations enacted and enforced by counties or cities. While counties and cities may completely prohibit personal cultivation outdoors upon the grounds of a private residence, they are not allowed to completely prohibit personal cultivation inside a private residence or accessory structure that is fully enclosed and secure. The language of this bill is not clear regarding its application to instances where a person is lawfully engaging in personal cultivation that may result in violations of local building, plumbing, electrical, or other similar structural or zoning ordinances that do not create an immediate danger to health or safety. Should these persons, who are otherwise engaging in activity deemed lawful, not be afforded the same opportunity as other persons to correct an ordinance violation that is not posing an immediate danger to health or safety? The Legislature may wish to ask the author to clarify the intent of the bill regarding this issue.
2. Arguments in Support. California State Sheriffs' Association, sponsor of this bill, states, "There are reports from the field that alleged ordinance violators in the context of cannabis cultivation effectively use this 'curing' period to temporarily move or eliminate the violation to avoid the sanction, or successfully delay proceedings while they assert they are fixing the violation, and then go right back to violating the ordinance. Given the nuisance that unlawful cannabis activities can present, we believe it is appropriate to give local agencies the authority to have an ordinance that does not provide the 'curing' period when the violation deals with cannabis cultivation. An agency that wants to retain such a remedy period would not be precluded from doing so, but it would give an agency that wants to address these issues more expeditiously the ability to do so by avoiding the curing period."
3. Arguments in Opposition. The California Apartment Association, the California Association of Realtors, the California Business Properties Association, and the California Chamber of Commerce, in opposition, state, "While we agree that individuals or businesses that violate local laws should face fines and/or penalties, there should always be a right to appeal for property owners who have no knowledge that their tenants are violating local and state laws relating to cannabis. It is common for property owners to prohibit illegal activity on the part of their tenants. At the same time, however, state law prohibits property owners from proactively inspecting property that is leased to a tenant. As you can imagine, this makes it difficult for property owners to detect illegal activity. We respectfully request that you amend AB 2164 to ensure that property owners are not held liable for the actions of their tenants – including imposed fines and penalties – as it relates to cannabis."

Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958 FN: 0002884

Date of Hearing: May 9, 2018

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Cecilia Aguiar-Curry, Chair

ABPCA Bill Id:AB 2164 (

Author:Cooley) – As Introduced Ver:February 12, 2018

SUBJECT: Local ordinances: fines and penalties: cannabis.

SUMMARY: Allows local agencies to impose administrative fines or penalties for violations
of local ordinances pertaining to building, plumbing, electrical, or other similar structural or zoning issues that do not create an immediate danger to health or safety without providing a reasonable time for the responsible person to correct or otherwise remedy the violation, if the violation exists as a result of, or to facilitate, the cultivation of cannabis.

EXISTING LAW:

1. Allows a county or city to make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.
2. Allows the legislative body of a county or city to collect any fee, cost, or charge incurred
   in specified activities, including the abatement of public nuisances, enforcement of specified zoning ordinances, inspections and abatement of violations of the State Housing Law, inspections and abatement of violations of the California Building Standards Code, and inspections and abatement of violations related to local ordinances that implement these laws.
3. Limits the amount of a fee, cost, or charge described above to the actual cost incurred performing the inspections and enforcement activity, including permit fees, fines, late charges, and interest.
4. Provides that violation of a county or city ordinance is a misdemeanor, unless by ordinance
   it is made an infraction.
5. Provides that a violation of a county or city ordinance may be prosecuted by county or city authorities in the name of the people of the State of California, or redressed by civil action.
6. Provides that every violation of a county or city ordinance determined to be an infraction is punishable by the following:
   1. A fine not exceeding $100 for a first violation;
   2. A fine not exceeding $200 for a second violation of the same ordinance within one year; and,
   3. A fine not exceeding $500 for each additional violation of the same ordinance within one year.
7. Provides that a violation of local building and safety codes determined to be an infraction is punishable by the following:
   1. A fine not exceeding $100 for a first violation;
   2. A fine not exceeding $500 for a second violation of the same ordinance within one year; and,
   3. A fine not exceeding $1,000 for each additional violation of the same ordinance within one year of the first violation.
8. Allows the legislative body of a local agency, by ordinance, to make any violation of any ordinance enacted by the local agency subject to an administrative fine or penalty, and requires the local agency to set forth the administrative procedures that govern the imposition, enforcement, collection, and administrative review by the local agency of those administrative fines or penalties.
9. Prohibits, for the purposes of administrative fines or penalties where the violation of an ordinance would otherwise be an infraction, the administrative fine or penalty from exceeding the maximum fine or penalty amounts set forth in 6) and 7), above.
10. Requires the administrative procedures described in 9), above, to provide for a reasonable period of time for a person responsible for a continuing violation to correct or otherwise remedy the violation prior to the imposition of administrative fines or penalties, when the violation pertains to building, plumbing, electrical, or other similar structural or zoning issues that do not create an immediate danger to health or safety.
11. Provides a process for appealing a local agency's decision regarding administrative fines or penalties via civil proceedings, including reimbursement of court filing fees by the local agency if the court finds in favor of the contestant, as specified.
12. Allows persons 21 years or age or older to possess, plant, cultivate, harvest, dry, or process not more than six living cannabis plants (personal cultivation), subject to specified restrictions that include reasonable regulations enacted and enforced by counties or cities.
13. Prohibits counties and cities from completely prohibiting personal cultivation inside a private residence or accessory structure to a private residence located upon the grounds of a private residence that is fully enclosed and secure.
    
14. Allows counties and cities to completely prohibit personal cultivation outdoors upon the grounds of a private residence.

FISCAL EFFECT: None

COMMENTS:

1. Background. A county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws. This "police power" provides the right to adopt and enforce zoning regulations, as long as they do not conflict with state laws.

Current law allows counties and cities to establish ordinances, and makes violations of ordinances misdemeanors, unless by ordinance the county or city makes them infractions. The violation of an ordinance may be prosecuted by county or city authorities in the name
of the people of the State of California, or redressed by civil action.

1. Administrative Alternative. As an alternative to the court process, a local agency can make any violation of any of its ordinances subject to an administrative fine or penalty. This provision was enacted in 1995 to relieve the courts of some of these cases and offer local governments a faster, easier, and less costly means of pursuing remedies for ordinance violations.

In order to make an ordinance violation subject to an administrative fine or penalty, the local agency must adopt an ordinance specifying the administrative procedures that govern the imposition, enforcement, collection, and administrative review of the fines or penalties. A person may appeal such fines or penalties in Superior Court within 20 days after service of a final administrative order or decision. Local agencies must pursue a civil court proceeding to collect fines and penalties that are not secured via the administrative process.

Of note for the purposes of this bill, current law requires these administrative procedures
to grant a person responsible for a continuing violation a reasonable time to remedy the violation before the local agency may impose fines or penalties when the violation pertains
to building, plumbing, electrical, or other similar structural and zoning issues that do not create an immediate danger to health or safety.

1. Author's Statement. According to the author, "Until 2015, medical cannabis existed in a grey area of legality through a patchwork of Proposition 215, case law, and local ordinances. With the passage of the Medical Cannabis Regulation and Safety Act (MCRSA) in 2015, the medical cannabis industry finally had a framework for full licensure and regulation of the medical cannabis market. With the passage of Proposition 64 in 2016, adult-use of cannabis was legalized, and subsequent legislation has merged the medical and adult –use licensing system into a cohesive regulatory framework.

"Many challenges remain, however, not the least of which is the still thriving black market operators who are under-cutting the legal marketplace by growing cannabis illicitly in homes, strip malls, and warehouses – often times stealing electricity, and creating health and safety hazards. Last year in Sacramento County, the Sheriff’s department responded to hundreds of calls relating to illegal cannabis grow operations, including one case where 183 plants were seized, along with 29 pounds of processed cannabis, a gun, and over $5,000 in cash. In these circumstances where ordinances are violated, it is very easy for well-funded grow operations to simply move onto the next location over and over, effectively correcting the ordinance violation, without ever having to pay the administrative penalties.

"AB 2164, allows, but does not require, local governments to amend their ordinances to remove the time period to correct a violation in cases of cannabis cultivation only. This removes at least one monetary incentive for illicit grows to continually move while also giving local governments the ability to bring meaningful penalties on willfully illegal growers."

1. Bill Summary. This bill allows local agencies to impose administrative fines or penalties for violations of local ordinances pertaining to building, plumbing, electrical, or other similar structural or zoning issues that do not create an immediate danger to health or safety without providing a reasonable time for the responsible person to correct or otherwise remedy the violation, if the violation exists as a result of, or to facilitate, the cultivation of cannabis.

This bill is sponsored by the California State Sheriffs' Association.

1. Policy Consideration. Under current law implementing MCRSA and Proposition 64, persons 21 years of age or older may engage in personal cultivation of cannabis, subject to specified restrictions that include reasonable regulations enacted and enforced by counties or cities. While counties and cities may completely prohibit personal cultivation outdoors upon the grounds of a private residence, they are not allowed to completely prohibit personal cultivation inside a private residence or accessory structure that is fully enclosed and secure. The language of this bill is not clear regarding its application to instances where a person is lawfully engaging in personal cultivation that may result in violations of local building, plumbing, electrical, or other similar structural or zoning ordinances that do not create an immediate danger to health or safety. Should these persons, who are otherwise engaging in activity deemed lawful, not be afforded the same opportunity as other persons to correct an ordinance violation that is not posing an immediate danger to health or safety? The Committee may wish to ask the author to clarify the intent of the bill regarding this issue.
2. Arguments in Support. California State Sheriffs' Association, sponsor of this bill, states, "There are reports from the field that alleged ordinance violators in the context of cannabis cultivation effectively use this 'curing' period to temporarily move or eliminate the violation to avoid the sanction, or successfully delay proceedings while they assert they are fixing the violation, and then go right back to violating the ordinance. Given the nuisance that unlawful cannabis activities can present, we believe it is appropriate to give local agencies the authority to have an ordinance that does not provide the 'curing' period when the violation deals with cannabis cultivation. An agency that wants to retain such a remedy period would not be precluded from doing so, but it would give an agency that wants to address these issues more expeditiously the ability to do so by avoiding the curing period."
3. Arguments in Opposition. The California Apartment Association, the California Association of Realtors, the California Business Properties Association, and the California Chamber of Commerce, in opposition, state, "While we agree that individuals or businesses that violate local laws should face fines and/or penalties, there should always be a right to appeal for property owners who have no knowledge that their tenants are violating local and state laws relating to cannabis. It is common for property owners to prohibit illegal activity on the part of their tenants. At the same time, however, state law prohibits property owners from proactively inspecting property that is leased to a tenant. As you can imagine, this makes it difficult for property owners to detect illegal activity. We respectfully request that you amend AB 2164 to ensure that property owners are not held liable for the actions of their tenants – including imposed fines and penalties – as it relates to cannabis."

REGISTERED SUPPORT / OPPOSITION:

Support

California State Sheriffs' Association [SPONSOR]

California Police Chiefs Association

Rural County Representatives of California

Opposition

California Apartment Association (unless amended)

California Association of Realtors (unless amended)

California Business Properties Association (unless amended)

California Chamber of Commerce (unless amended)

Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958