Transcript Objectives

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
Do you have an Enforcement
Plan?
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What is your enforcement approach?
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Notice to comply/violation
Second notice?
Other options –
DA,
 County Counsel,
 Small Claims
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Goal(s) of enforcement
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Compliance first
Penalty first
Both
Enforcement Philosophy Factors
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POLICIES
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PROCEDURES
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POLITICS
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PERSPECTIVE
The Law: HSC Section
25404.1.1(a)
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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
Authority for AEO’s
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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)
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(2) If the order is for a violation of Chapter 6.7 (commencing
with Section 25280) (UST)
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(3) If the order is for a violation of Article 1 (commencing with
Section 25500) of Chapter 6.95, (Business Plans)
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(4) If the order is for a violation of Article 2 (commencing with
Section 25531) of Chapter 6.95, (CalARP)
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(5) If the order is for a violation of Section 25270.5, (AGT/
SPCC)
Statue Penalty Amounts (per day per
violation)
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Haz Waste- up to $25,000
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SPCC- up to $5,000
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up to $10,000 for second or repeat
violations
UST- minimum $500 to $5,000,
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up to $10,000 for monitoring systems or
leak detection tampering
Statue Penalty Amounts (per day per
violation)
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BP submittal $2,000
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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
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Raises to $25,000 if knowingly done
after notice
AEO Authority in 6.95
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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.
25514 cont.
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(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.
The 25514 hurdle
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“in an amount which shall be set by
the governing body of the
administering agency,”
Is this an issue for your CUPA?
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Each AEO for 6.95 violations must be
approved by their governing body
Have the governing body approve a
penalty matrix/enforcement plan
Business Plan Penalty Matrix
Major
Moderate
Minimal
Major
Maximum $2,000
($5,000)
Average $1,600
($4,000)
Minimum $1,200
($3,000)
$1,200
($3,000)
$1,000
($2,500)
$800
($2,000)
$800
($2,000)
$600
($1,500)
$400
($1,000)
Moderate
Maximum $1,200
($3,000)
Average $1,000
($2,500)
Minimum $800
($2,000)
$800
($2,000)
$600
($1,500)
$400
($1,000)
$400
($1,000)
$300
($750)
$200
($500)
Minimal
Maximum $800
($2,000)
Average
$600
($1,500)
Minimum $400
($1,000)
$400
($1,000)
$300
($750)
$200
($500)
$200
($500)
$100
($250)
$0
($0)
ACTUAL/POTEN HARM
EXTENT OF
DEVIATION
UST Penalty Matrix
ACTUAL OR
POTENTIAL
HARM
Major
Moderate
Minimal
Major
Maximum $5,000
Average $4,000
Minimum $3,000
$3,000
$2,500
$2,000
$2,000
$1,500
$1,000
Moderate
Maximum $3,000 $2,000
Average $2,500 $1,500
Minimum $2,000 $1,000
$1,000
$750
$500
Minimal
Maximum $2,000 $1,000
Average $1,500 $750
Minimum $1,000 $500
$500
EXTENT OF
DEVIATION
CalARP Penalty Matrix
ACTUAL OR
POTENTIAL HARM
Major
Moderate
Minimal
Major
Maximum
$2,000
($25,000)
Average
$1,600
($20,000)
Minimum
$1,200
($15,000)
$1,200
($15,000)
$1,000
($12,500)
$800
($10,000)
$800
($10,000)
$600
($7,500)
$400
($5,000)
Moderate
Maximum
$1,200
($15,000)
Average
$1,000
($12,500)
Minimum
$800
($10,000)
$800
($10,000)
$600
($7,500)
$400
($5,000)
$400
($5,000)
$300
($3,750)
$200
($2,500)
Minimal
Maximum
$400
($5,000)
$300
($3,750)
$200
($2,500)
$200
($2,500)
$100
($1,250)
$0
($0)
EXTENT OF
DEVIATION
$800
($10,000)
Average
$600
($7,500)
Minimum
$400
($5,000)
HSC Section 25404.1.1(b)
When setting an AEO penalty, the
UPA shall consider:
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Nature, circumstances, extent & gravity of
violation
Violator’s past and present efforts to prevent,
abate, or clean up
Violator’s ability to pay
The deterrent effect the penalty has on both
the violator and the regulated community
Suggested Steps
to Set an AEO Penalty
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What is the violation (s)
How many occurrences of each violation
Apply statutory penalty factors
Come up with penalty amount
What is the violation?
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What statute or regulation section
What is the penalty range in the statute?
Violation Classification
How many occurrences
of the violation?
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More than one violation on the same day?
Example Raised sensors in UST system
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The same violation on more than one day?
Example: Failed to complete ELD/designated
operator
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The same violation at more than one
location?
in the same facility?
in a different facility (same owner)?
Multi Day Violation
Do you have good evidence?
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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?
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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)
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.
One time vs.
ongoing violations
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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)
Penalty Factors :
Nature & Extent of the Violation
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How important is this requirement?
Is it a new requirement?
Degree of deviation from the
requirement
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?
Penalty Factors:
“circumstances of the violation”
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Effort to comply before & after violation
Cooperation
Known or should have known
Any previous/current problems with
regulatory agencies
Changes/unique circumstances
“Nature of the violation”
includes Economic Benefit
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Compliance costs money
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To be aware of the regulatory requirements
To stay current on regulatory requirements
Capital costs (equipment, testing, O&M)
Staff costs (employees, training)
Delays required to be in compliance before you
start a new activity or product
What Is Not Economic Benefit?
Economic Benefit does not include
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Accounting for ability to continue in business
Don’t discount costs the violator incurred in
correcting the violation or cleanup
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)
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Labor costs
 Training
• What was required?
• What additional
training was needed?
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)
Avoided costs vs. Delayed costs
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Avoided costs (EB is time value of
money)
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Not filing BP for two years
Delayed costs (EB is the total cost +)
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Employee training
Equipment upgrade
What you will hear–” I didn’t make
any money”!
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Net profit is only a part of economic
benefit
Economic benefit =
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business did not spend money and was
supposed to
business gained advantage by non
compliance
Factor: Violator’s Ability to Pay
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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
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Some businesses cannot stay in biz and
comply with the law
Gov’t cannot subsidize violators
Ability to Pay
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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
It’s a very broad concept
Factor: past and present efforts to
prevent, abate, or clean up
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Training programs?
Is compliance encouraged?
Do they go “beyond compliance” in other
areas?
Factor: Deterrent effect
of the penalty on the violator
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Compliance costs money
Deterrent effect on the violator
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Economic benefit factors here also
Factor: Deterrent effect
of the penalty on the regulated
community
“The Ripple Affect”
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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?
Another factor for the penalty
(unwritten factor)
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How are you issuing the AEO?
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Unilateral
Draft AEO
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Stipulation and Order to be offered
Show Cause
Consent order
Remember to KISS the AEO process
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KEEP
IT
SOMEWHAT
SIMPLE
Have a plan and you’ll get through it
all
Any questions?