Vincent Mendes, R.E.H.S.Vincent Mendes, R.E.H.S.

Supervising Environmental Health Supervising Environmental Health SpecialistSpecialist

Fresno County Environmental Health Fresno County Environmental Health DivisionDivision

February 15, 2007February 15, 2007

Penalty Calculations Penalty Calculations For Non-Hazardous For Non-Hazardous

Waste Administrative Waste Administrative ActionsActions

Do you have an Do you have an Enforcement Enforcement Plan?Plan?

What is your enforcement approach?What is your enforcement approach? Notice to comply/violationNotice to comply/violation Second notice?Second notice? Other options – Other options –

DA, DA, County Counsel, County Counsel, Small ClaimsSmall Claims

Goal(s) of enforcement- Goal(s) of enforcement- Compliance firstCompliance first Penalty firstPenalty first Both Both

Enforcement Philosophy Enforcement Philosophy FactorsFactors

POLICIESPOLICIES

PROCEDURESPROCEDURES

POLITICSPOLITICS

PERSPECTIVEPERSPECTIVE

The Law: HSC Section The Law: HSC Section 25404.1.1(a)25404.1.1(a)

Authorizes the CUPA to assess Authorizes the CUPA to assess penalties for each program that is penalties for each program that is subject to the Administrative subject to the Administrative Enforcement Order (AEO) processEnforcement Order (AEO) process

Only HW has a penalty matrix Only HW has a penalty matrix established in state regulationsestablished in state regulations

Authority for AEO’sAuthority for AEO’s 25404.1.1. (a) If the unified program agency 25404.1.1. (a) If the unified program agency

determines that a person has committed.. a determines that a person has committed.. a violation of any law, regulation, permit, .. the UPA violation of any law, regulation, permit, .. the UPA is authorized to enforce or implement pursuant to is authorized to enforce or implement pursuant to this chapter, the this chapter, the UPA may issue an administrative UPA may issue an administrative enforcement orderenforcement order …: …:

(1) Except as provided in paragraph (5), if the order is for (1) Except as provided in paragraph (5), if the order is for a violation of Chapter 6.5 (commencing with Section a violation of Chapter 6.5 (commencing with Section 25100), 25100), (Hazardous Waste)(Hazardous Waste)

(2) If the order is for a violation of Chapter 6.7 (2) If the order is for a violation of Chapter 6.7 (commencing with Section 25280) (commencing with Section 25280) (UST)(UST)

(3) If the order is for a violation of Article 1 (commencing (3) If the order is for a violation of Article 1 (commencing with Section 25500) of Chapter 6.95, with Section 25500) of Chapter 6.95, (Business Plans)(Business Plans)

(4) If the order is for a violation of Article 2 (commencing (4) If the order is for a violation of Article 2 (commencing with Section 25531) of Chapter 6.95, with Section 25531) of Chapter 6.95, (CalARP)(CalARP)

(5) If the order is for a violation of Section 25270.5, (5) If the order is for a violation of Section 25270.5, (AGT/ (AGT/ SPCC)SPCC)

Statue Penalty Amounts (per day Statue Penalty Amounts (per day per violation)per violation)

Haz Waste- up to $25,000 Haz Waste- up to $25,000

SPCC- up to $5,000SPCC- up to $5,000 up to $10,000 for second or repeat up to $10,000 for second or repeat

violationsviolations

UST- UST- minimumminimum $500 to $5,000, $500 to $5,000, up to $10,000 for monitoring up to $10,000 for monitoring

systems or leak detection systems or leak detection tamperingtampering

Statue Penalty Amounts (per day Statue Penalty Amounts (per day per violation)per violation)

BP submittal $2,000BP submittal $2,000 Raises to $5,000 if knowingly done Raises to $5,000 if knowingly done

after prior noticeafter prior notice Section 25507 - $25,000 for failure Section 25507 - $25,000 for failure

to report a release (cannot issue to report a release (cannot issue AEO)AEO)

Cal/ARP $2,000 Cal/ARP $2,000 Raises to $25,000 if knowingly Raises to $25,000 if knowingly

done after noticedone after notice

AEO Authority in 6.95AEO Authority in 6.95 25514.5. (a) Notwithstanding Section 25514, any 25514.5. (a) Notwithstanding Section 25514, any

business that violates this article is liable to an business that violates this article is liable to an administering agency for an administering agency for an administrative penaltyadministrative penalty, , in an amount which shall be set by the governing in an amount which shall be set by the governing body of the administering agencybody of the administering agency, but not greater , but not greater than two thousand dollars than two thousand dollars ($2,000) for each day($2,000) for each day in in which the violation occurs. which the violation occurs.

If the violation results in, or significantly contributes to, If the violation results in, or significantly contributes to, an emergency, including a fire or health or medical an emergency, including a fire or health or medical problem requiring toxicological, health, or medical problem requiring toxicological, health, or medical consultation, the business shall also be assessed the consultation, the business shall also be assessed the full cost of the county, city, fire district, … emergency full cost of the county, city, fire district, … emergency response, as well as the cost of cleaning up and response, as well as the cost of cleaning up and disposing of the hazardous materials, or acutely disposing of the hazardous materials, or acutely hazardous materials.hazardous materials.

25514 cont.25514 cont. (b) Notwithstanding Section 25514, any business that (b) Notwithstanding Section 25514, any business that

knowingly violates this article after reasonable notice of knowingly violates this article after reasonable notice of the violation is liable for an the violation is liable for an administrative penaltyadministrative penalty,, in an amount which shall be set by the governing in an amount which shall be set by the governing body of the administering agencybody of the administering agency, , but not greater but not greater than five thousand dollars ($5,000) for each day in than five thousand dollars ($5,000) for each day in which the violation occurs. which the violation occurs.

(c) When an administering agency issues an (c) When an administering agency issues an enforcement order or assesses an administrative enforcement order or assesses an administrative penalty, or both, for a violation of this article, the penalty, or both, for a violation of this article, the administering agency shall utilize the administrative administering agency shall utilize the administrative enforcement procedures specified in Sections enforcement procedures specified in Sections 25404.1.1 and 25404.1.2. 25404.1.1 and 25404.1.2.

The 25514 hurdleThe 25514 hurdle

““in an amount which shall be set in an amount which shall be set by the governing body of the by the governing body of the administering agency,”administering agency,”

Is this an issue for your CUPA?Is this an issue for your CUPA? Each AEO for 6.95 violations must be Each AEO for 6.95 violations must be

approved by their governing body approved by their governing body Have the governing body approve a Have the governing body approve a

penalty matrix/enforcement planpenalty matrix/enforcement plan

Business Plan Penalty MatrixBusiness Plan Penalty Matrix ACTUAL/POTEN ACTUAL/POTEN HARMHARM

EXTENT OF EXTENT OF DEVIATIONDEVIATION

MajorMajor ModerateModerate MinimalMinimal

MajorMajor Maximum $2,000Maximum $2,000

($5,000)($5,000)Average $1,600Average $1,600

($4,000)($4,000)Minimum $1,200Minimum $1,200

($3,000)($3,000)

$1,200$1,200($3,000)($3,000)$1,000$1,000($2,500)($2,500)$800$800($2,000)($2,000)

$800$800($2,000)($2,000)$600$600($1,500)($1,500)$400$400($1,000)($1,000)

ModerateModerate Maximum Maximum $1,200$1,200

($3,000)($3,000)

Average $1,000 Average $1,000 ($2,500) ($2,500)

Minimum Minimum $800$800

($2,000)($2,000)

$800$800($2,000)($2,000)$600$600($1,500)($1,500)$400$400($1,000)($1,000)

$400$400($1,000)($1,000)$300$300($750)($750)$200$200($500)($500)

MinimalMinimal Maximum $800Maximum $800

($2,000)($2,000)Average Average

$600$600

($1,500)($1,500)Minimum Minimum

$400$400

($1,000)($1,000)

$400$400($1,000)($1,000)$300$300($750)($750)$200$200($500)($500)

$200$200($500)($500)$100$100($250)($250)$0$0($0)($0)

UST Penalty MatrixUST Penalty Matrix

ACTUAL OR POTENTIAL HARM

EXTENT OF DEVIATION

Major Moderate Minimal

Major Maximum $5,000Average $4,000Minimum $3,000

$3,000$2,500$2,000

$2,000$1,500$1,000

Moderate Maximum $3,000Average $2,500Minimum $2,000

$2,000$1,500$1,000

$1,000$750$500

Minimal Maximum $2,000Average $1,500Minimum $1,000

$1,000$750$500 $500

CalARP Penalty MatrixCalARP Penalty Matrix

ACTUAL OR POTENTIAL HARM

EXTENT OF DEVIATION

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 $800 ($10,000)Average $600 ($7,500)Minimum $400 ($5,000)

$400($5,000)$300($3,750)$200($2,500)

$200($2,500)$100($1,250)$0($0)

HSC Section 25404.1.1(b)HSC Section 25404.1.1(b)When setting an AEO penalty, When setting an AEO penalty,

the UPA the UPA shallshall consider: consider:

Nature, circumstances, extent & gravity of Nature, circumstances, extent & gravity of violationviolation

Violator’s past and present efforts to Violator’s past and present efforts to prevent, abate, or clean upprevent, abate, or clean up

Violator’s ability to payViolator’s ability to pay The deterrent effect the penalty has on both The deterrent effect the penalty has on both

the violator and the regulated community the violator and the regulated community

Suggested Steps Suggested Steps to Set an AEO Penaltyto Set an AEO Penalty

What is the violation (s) What is the violation (s) How many occurrences of each How many occurrences of each

violationviolation Apply statutory penalty factors Apply statutory penalty factors Come up with penalty amountCome up with penalty amount

What is the violation?What is the violation?

What statute or regulation sectionWhat statute or regulation section What is the penalty range in the What is the penalty range in the

statute?statute? Violation ClassificationViolation Classification

How many occurrencesHow many occurrences of the violation? of the violation?

More than one violation on the same day? More than one violation on the same day? Example Raised sensors in UST system Example Raised sensors in UST system

The same violation on more than one day?The same violation on more than one day? Example: Failed to complete ELD/designated Example: Failed to complete ELD/designated

operatoroperator The same violation at more than one The same violation at more than one

location?location? in the same facility?in the same facility?

in a different facility (same owner)?in a different facility (same owner)?

Multi Day ViolationMulti Day Violation Do you have good evidence? Do you have good evidence?

If multi day violations - are you sure If multi day violations - are you sure you have evidence for the days you have evidence for the days other than the day you observed the other than the day you observed the violation?violation? Example – Failed to submit HMBP - How Example – Failed to submit HMBP - How

long have they been in business?long have they been in business?

Vs.Vs. Raised sensor in UST system – When Raised sensor in UST system – When

was it raised? By who? (does it matter was it raised? By who? (does it matter by who?)by who?)

Is the Penalty too high?Is the Penalty too high?

Multiple violations can result in Multiple violations can result in very high penalty amountsvery high penalty amounts

Can either set a high one day Can either set a high one day penalty or a low daily penalty (or penalty or a low daily penalty (or justify your penalty by using both justify your penalty by using both methods to determine your methods to determine your number) number)

Possible adjustment for Possible adjustment for multiple violations (from multiple violations (from

haz waste matrix)haz waste matrix) A single initial penalty A single initial penalty maymay be assessed be assessed

when:when: The facility has violated the same requirement The facility has violated the same requirement

in different location (e.g., units) within the in different location (e.g., units) within the facility.facility.

The facility has violated the same requirement The facility has violated the same requirement on different days, unless the facility has been on different days, unless the facility has been notified of the violation and has had sufficient notified of the violation and has had sufficient time to correct the violation.time to correct the violation.

Violations that are not independent or are not Violations that are not independent or are not substantially distinguishable.substantially distinguishable.

One time vs.One time vs. ongoing violations ongoing violations

Failure to submit a report (one Failure to submit a report (one day violation?)day violation?)

Failure to train (one day, but per Failure to train (one day, but per employee)employee)

Operating without a permit Operating without a permit (everyday is a violation)(everyday is a violation)

Operating without a designated Operating without a designated operator (everyday is a violation)operator (everyday is a violation)

Penalty FactorsPenalty Factors : :Nature & Extent of the Nature & Extent of the

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

requirement requirement

Nature, Nature, circumstances, circumstances, extent & gravity of extent & gravity of violationviolationFailed to submit a HMBPWho has deviated more?

Who has greater potential for harm?

Does one HMBP facility deserve a higher penalty than the other?

Penalty Factors:Penalty Factors: “circumstances of the “circumstances of the

violation”violation” Effort to comply before & after Effort to comply before & after

violationviolation CooperationCooperation Known or should have knownKnown or should have known Any previous/current problems with Any previous/current problems with

regulatory agenciesregulatory agencies Changes/unique circumstances Changes/unique circumstances

““Nature of the violation”Nature of the violation” includes Economic Benefit includes Economic Benefit

Compliance costs moneyCompliance costs money To be aware of the regulatory requirementsTo be aware of the regulatory requirements To stay current on regulatory requirementsTo stay current on regulatory requirements Capital costs (equipment, testing, O&M)Capital costs (equipment, testing, O&M) Staff costs (employees, training)Staff costs (employees, training) Delays required to be in compliance before Delays required to be in compliance before

you start a new activity or productyou start a new activity or product

What Is Not Economic What Is Not Economic Benefit?Benefit?

Economic Benefit does Economic Benefit does notnot include include Accounting for ability to continue in Accounting for ability to continue in

businessbusiness Don’t discount costs the violator incurred Don’t discount costs the violator incurred

in correcting the violation or cleanupin correcting the violation or cleanup

What to Consider in What to Consider in Determining Economic Determining Economic

BenefitBenefit Time value of moneyTime value of money Project/design alternativesProject/design alternatives Equipment costs - capital, Equipment costs - capital,

shipping, installation, taxes, shipping, installation, taxes, laborlabor

Developed proceduresDeveloped procedures

What to Consider What to Consider (continued)(continued)

Labor costs Labor costs

Training• What was required?• What additional

training was needed?

Economic Benefit StepsEconomic Benefit Steps Determine what should have been Determine what should have been

donedone When and/or how oftenWhen and/or how often Estimate the type and cost of the Estimate the type and cost of the

actions, distinguishactions, distinguish delayed costsdelayed costs avoided costsavoided costs

Consider other economic benefits (e.g. Consider other economic benefits (e.g. continued production, early entry to continued production, early entry to market)market)

Avoided costs vs. Delayed Avoided costs vs. Delayed costscosts

Avoided costs (EB is time value of Avoided costs (EB is time value of money)money) Not filing BP for two yearsNot filing BP for two years

Delayed costs (EB is the total cost Delayed costs (EB is the total cost +)+) Employee trainingEmployee training Equipment upgradeEquipment upgrade

What you will hear–” I didn’t What you will hear–” I didn’t make any money”!make any money”!

Net profit is only a part of Net profit is only a part of economic benefiteconomic benefit

Economic benefit = Economic benefit = business did not spend money and business did not spend money and

was supposed towas supposed to business gained advantage by non business gained advantage by non

compliancecompliance

Factor: Violator’s Ability to PayFactor: Violator’s Ability to Pay

May be used to adjust upward or May be used to adjust upward or downward the penalty that would downward the penalty that would otherwise be imposedotherwise be imposed

You do not have to adjust to keep You do not have to adjust to keep the violator in businessthe violator in business Some businesses cannot stay in biz Some businesses cannot stay in biz

and comply with the lawand comply with the law Gov’t cannot subsidize violatorsGov’t cannot subsidize violators

Ability to PayAbility to Pay

The statute requires you The statute requires you “consider” ability to pay; NOT that “consider” ability to pay; NOT that you adjust the penalty so the you adjust the penalty so the violator can pay it and stay in violator can pay it and stay in businesses. businesses.

Does not requires that UPA figure Does not requires that UPA figure out what the violator can payout what the violator can pay

It’s a very broad conceptIt’s a very broad concept

Factor: past and present Factor: past and present efforts to prevent, abate, or efforts to prevent, abate, or

clean upclean up

Training programs?Training programs? Is compliance encouraged?Is compliance encouraged? Do they go “beyond compliance” in Do they go “beyond compliance” in

other areas?other areas?

Factor: Deterrent effectFactor: Deterrent effect of the penalty on the violator of the penalty on the violator

Compliance costs moneyCompliance costs money Deterrent effect on the violatorDeterrent effect on the violator

Economic benefit factors here alsoEconomic benefit factors here also

Factor: Deterrent effectFactor: Deterrent effect of the penalty on the of the penalty on the regulated communityregulated community“The Ripple Affect”“The Ripple Affect”

Is the penalty you want others to pay?Is the penalty you want others to pay? You must be able to articulate and You must be able to articulate and

defend this penalty in future AEOsdefend this penalty in future AEOs Are you being fair to those who are in Are you being fair to those who are in

compliance?compliance?

Another factor for the Another factor for the penalty penalty (unwritten factor)(unwritten factor)

How are you issuing the AEO?How are you issuing the AEO? UnilateralUnilateral Draft AEODraft AEO

Stipulation and Order to be offeredStipulation and Order to be offered Show CauseShow Cause Consent order Consent order

Remember to KISS the AEO Remember to KISS the AEO processprocess

KEEPKEEP ITIT SOMEWHATSOMEWHAT SIMPLESIMPLE

Have a plan and you’ll get Have a plan and you’ll get through it allthrough it all

Any questions?