Vincent Mendes, R.E.H.S.

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Penalty Calculations For Non-Hazardous Waste
Administrative Actions

• Vincent Mendes, R.E.H.S.
• Supervising Environmental Health Specialist
• Fresno County Environmental Health Division
• February 15, 2007

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Do you have an Enforcement Plan?

• What is your enforcement approach?
• Notice to comply/violation
• Second notice?
• Other options
• DA,
• County Counsel,
• Small Claims
• Goal(s) of enforcement-
• Compliance first
• Penalty first
• Both

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Enforcement Philosophy Factors

• POLICIES
• PROCEDURES
• POLITICS
• PERSPECTIVE

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The Law HSC Section 25404.1.1(a)

• Authorizes the CUPA to assess penalties for each
  program that is subject to the Administrative
  Enforcement Order (AEO) process
• Only HW has a penalty matrix established in
  state regulations

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Authority for AEOs

• 25404.1.1. (a) If the unified program agency
  determines that a person has committed.. a
  violation of any law, regulation, permit, .. the
  UPA is authorized to enforce or implement
  pursuant to this chapter, the UPA may issue an
  administrative enforcement order
• (1) Except as provided in paragraph (5), if the
  order is for a violation of Chapter 6.5
  (commencing with Section 25100), (Hazardous
  Waste)
• (2) If the order is for a violation of Chapter
  6.7 (commencing with Section 25280) (UST)
• (3) If the order is for a violation of Article 1
  (commencing with Section 25500) of Chapter 6.95,
  (Business Plans)
• (4) If the order is for a violation of Article 2
  (commencing with Section 25531) of Chapter 6.95,
  (CalARP)
• (5) If the order is for a violation of Section
  25270.5, (AGT/ SPCC)

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Statue Penalty Amounts (per day per
violation)

• Haz Waste- up to 25,000
• SPCC- up to 5,000
• up to 10,000 for second or repeat violations
• UST- minimum 500 to 5,000,
• up to 10,000 for monitoring systems or leak
  detection tampering

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Statue Penalty Amounts (per day per
violation)

• BP submittal 2,000
• Raises to 5,000 if knowingly done after prior
  notice
• Section 25507 - 25,000 for failure to report a
  release (cannot issue AEO)
• Cal/ARP 2,000
• Raises to 25,000 if knowingly done after notice

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AEO Authority in 6.95

• 25514.5. (a) Notwithstanding Section 25514, any
  business that violates this article is liable to
  an administering agency for an administrative
  penalty, in an amount which shall be set by the
  governing body of the administering agency, but
  not greater than two thousand dollars (2,000)
  for each day in which the violation occurs.
• If the violation results in, or significantly
  contributes to, an emergency, including a fire or
  health or medical problem requiring
  toxicological, health, or medical consultation,
  the business shall also be assessed the full cost
  of the county, city, fire district, emergency
  response, as well as the cost of cleaning up and
  disposing of the hazardous materials, or acutely
  hazardous materials.

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25514 cont.

• (b) Notwithstanding Section 25514, any business
  that knowingly violates this article after
  reasonable notice of the violation is liable for
  an administrative penalty, in an amount which
  shall be set by the governing body of the
  administering agency, but not greater than five
  thousand dollars (5,000) for each day in which
  the violation occurs.
• (c) When an administering agency issues an
  enforcement order or assesses an administrative
  penalty, or both, for a violation of this
  article, the administering agency shall utilize
  the administrative enforcement procedures
  specified in Sections 25404.1.1 and 25404.1.2.

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The 25514 hurdle

• in an amount which shall be set by the governing
  body of the administering agency,
• Is this an issue for your CUPA?
• Each AEO for 6.95 violations must be approved by
  their governing body
• Have the governing body approve a penalty
  matrix/enforcement plan

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Business Plan Penalty Matrix
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UST Penalty Matrix
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CalARP Penalty Matrix
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HSC Section 25404.1.1(b)When setting an AEO
penalty, the UPA shall consider

• Nature, circumstances, extent gravity of
  violation
• Violators past and present efforts to prevent,
  abate, or clean up
• Violators ability to pay
• The deterrent effect the penalty has on both the
  violator and the regulated community

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Suggested Steps to Set an AEO Penalty

• What is the violation (s)
• How many occurrences of each violation
• Apply statutory penalty factors
• Come up with penalty amount

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What is the violation?

• What statute or regulation section
• What is the penalty range in the statute?
• Violation Classification

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How many occurrences of the violation?

• More than one violation on the same day?
• Example Raised sensors in UST system
• The same violation on more than one day?
• Example Failed to complete ELD/designated
  operator
• The same violation at more than one location?
• in the same facility?
• in a different facility (same owner)?

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Multi Day Violation Do you have good evidence?

• If multi day violations - are you sure you have
  evidence for the days other than the day you
  observed the violation?
• Example Failed to submit HMBP - How long have
  they been in business?
• Vs.
• Raised sensor in UST system When was it raised?
  By who? (does it matter by who?)

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Is the Penalty too high?

• Multiple violations can result in very high
  penalty amounts
• Can either set a high one day penalty or a low
  daily penalty (or justify your penalty by using
  both methods to determine your number)

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Possible adjustment for multiple violations (from
haz waste matrix)

• A single initial penalty may be assessed when
• The facility has violated the same requirement in
  different location (e.g., units) within the
  facility.
• The facility has violated the same requirement on
  different days, unless the facility has been
  notified of the violation and has had sufficient
  time to correct the violation.
• Violations that are not independent or are not
  substantially distinguishable.

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One time vs. ongoing violations

• Failure to submit a report (one day violation?)
• Failure to train (one day, but per employee)
• Operating without a permit (everyday is a
  violation)
• Operating without a designated operator (everyday
  is a violation)

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Penalty Factors Nature Extent of the Violation

• How important is this requirement?
• Is it a new requirement?
• Degree of deviation from the requirement

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Nature, circumstances, extent gravity of
violation Failed to submit a HMBP
Who has deviated more? Who has greater potential
for harm?
Does one HMBP facility deserve a higher penalty
than the other?
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Penalty Factors circumstances of the
violation

• Effort to comply before after violation
• Cooperation
• Known or should have known
• Any previous/current problems with regulatory
  agencies
• Changes/unique circumstances

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Nature of the violation includes Economic
Benefit

• Compliance costs money
• To be aware of the regulatory requirements
• To stay current on regulatory requirements
• Capital costs (equipment, testing, OM)
• Staff costs (employees, training)
• Delays required to be in compliance before you
  start a new activity or product

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What Is Not Economic Benefit?

• Economic Benefit does not include
• Accounting for ability to continue in business
• Dont discount costs the violator incurred in
  correcting the violation or cleanup

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What to Consider in Determining Economic Benefit

• Time value of money
• Project/design alternatives
• Equipment costs - capital, shipping,
  installation, taxes, labor
• Developed procedures

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What to Consider (continued)

• Labor costs

• Training
• What was required?
• What additional training was needed?

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Economic Benefit Steps

• Determine what should have been done
• When and/or how often
• Estimate the type and cost of the actions,
  distinguish
• delayed costs
• avoided costs
• Consider other economic benefits (e.g. continued
  production, early entry to market)

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Avoided costs vs. Delayed costs

• Avoided costs (EB is time value of money)
• Not filing BP for two years
• Delayed costs (EB is the total cost )
• Employee training
• Equipment upgrade

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What you will hear I didnt make any money!

• Net profit is only a part of economic benefit
• Economic benefit
• business did not spend money and was supposed to
• business gained advantage by non compliance

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Factor Violators Ability to Pay

• May be used to adjust upward or downward the
  penalty that would otherwise be imposed
• You do not have to adjust to keep the violator in
  business
• Some businesses cannot stay in biz and comply
  with the law
• Govt cannot subsidize violators

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Ability to Pay

• The statute requires you consider ability to
  pay NOT that you adjust the penalty so the
  violator can pay it and stay in businesses.
• Does not requires that UPA figure out what the
  violator can pay
• Its a very broad concept

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Factor past and present efforts to prevent,
abate, or clean up

• Training programs?
• Is compliance encouraged?
• Do they go beyond compliance in other areas?

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Factor Deterrent effect of the penalty on the
violator

• Compliance costs money
• Deterrent effect on the violator
• Economic benefit factors here also

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Factor Deterrent effect of the penalty on the
regulated communityThe Ripple Affect

• Is the penalty you want others to pay?
• You must be able to articulate and defend this
  penalty in future AEOs
• Are you being fair to those who are in compliance?

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Another factor for the penalty (unwritten factor)

• How are you issuing the AEO?
• Unilateral
• Draft AEO
• Stipulation and Order to be offered
• Show Cause
• Consent order

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Remember to KISS the AEO process

• KEEP
• IT
• SOMEWHAT
• SIMPLE

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Have a plan and youll get through it all
Any questions?