Penalty calculations for non hazardous waste aeos
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Penalty Calculations For Non-Hazardous Waste AEOs . Lisa Brown, Cal/EPA February 2007. What is there when there isn’t a matrix?. The law Your judgment Examples from other programs and/or your neighbors The AEO TAG Some UPAs have their own matrixes for non haz waste programs.

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Penalty calculations for non hazardous waste aeos

Penalty Calculations For Non-Hazardous Waste AEOs

Lisa Brown, Cal/EPA

February 2007


What is there when there isn t a matrix
What is there when there isn’t a matrix?

  • The law

  • Your judgment

  • Examples from other programs and/or your neighbors

  • The AEO TAG

  • Some UPAs have their own matrixes for non haz waste programs


The law hsc section 25404 1 1 a
The Law: HSC Section 25404.1.1(a)

  • Authorizes UPAs 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 (see Mickey’s class)


Aeo penalty amounts per day per violation
AEO Penalty Amounts (per day per violation)

  • HW- 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


Aeo penalty amounts per day per violation1
AEO Penalty Amounts (per day per violation)

  • BP & Inventory- $2,000,

    • raises to $5-25,000 if knowingly done after prior notice

  • Cal/ARP $2,000

    • raises to $25,000 if knowingly done after notice


Aeo penalties do not apply to
AEO penalties do NOT apply to….

  • Minor violations [defined in HSC 25404(a)(3)]

    • Unless not corrected or

    • not certified corrected

  • Violations of UFC


Hsc section 25404 1 1 b when setting an aeo penalty the upa shall consider
HSC Section 25404.1.1(b)When setting an AEO penalty, the UPA shall consider:

  • 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
Suggested Steps to Set an AEO Penalty

  • Step 1 What is the violation (s)

  • Step 2 How many occurrences of each violation

  • Step 3 Apply statutory penalty factors

  • Step 4 Come up with penalty amount

  • Step 5 Repeat as needed


What is the violation
What is the violation?

  • What statute or regulation section

  • What is the penalty range in the statute?


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

  • More than one violation on the same day?

    Example 10 drums w/o lids

  • The same violation on more than one day?

    Example: 10 drums w/o lids for 2 weeks

  • The same violation at more than one location?

    in the same facility?

    in a different facility (same owner)?


Evidence check
Evidence Check

  • If multi day violations—are you sure you have evidence for the days other that the day you observed the violation?


Problem area
Problem Area

  • 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
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
One time vs. matrix) ongoing violations

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

  • Failure to train (one day, but per E’ee)

  • Operating without a permit (everyday is a violation)

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


Statutory penalty factors nature circumstances extent gravity of violation
Statutory Penalty Factors matrix) “Nature, circumstances, extent & gravity of violation”


Penalty factors nature extent of the violation
Penalty Factors matrix) :Nature & Extent of the Violation

  • How important is this requirement?

  • Is it a new requirement?

  • Degree of deviation from the requirement


Penalty factors circumstances of the violation
Penalty Factors: matrix) “circumstances of the violation”

  • Effort to comply before & after violation

  • Cooperation

  • Knew or should have known better

  • Any previous/current problems with regulatory agencies

  • Changes/unique circumstances


Nature of the violation includes economic benefit
“Nature of the violation” matrix) includes Economic Benefit

  • Compliance costs money

    • 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
What Is Not Economic Benefit? matrix)

Economic Benefit does not include

  • 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
What to Consider in Determining Economic Benefit matrix)

  • Time value of money

  • Project/design alternatives

  • Equipment costs - capital, shipping, installation, taxes, labor

  • Developed procedures


What to consider continued
What to Consider (continued) matrix)

  • Labor costs – supervision and O&M

  • Training

    • What was required?

    • What additional training was needed?


Economic benefit steps
Economic Benefit Steps matrix)

  • 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)

  • Do NOT adjust for expenditures to abate the effects


  • Avoided costs vs delayed costs
    Avoided costs vs. Delayed costs matrix)

    • Avoided costs (EB is time value of money)

      • Not filing BP for two years

    • Delayed costs (EB is the total cost +)

      • E’ee training

      • Equipment upgrade


    Example
    Example matrix)

    • UST upgrade deadline 1998

    • In 1998 UST contractors prices went higher as the deadline approached

      • So upgrading in 1999 cost less than in 1998

    • Non upgraded stations made money in 1999 when should not have been open

      • Gas

      • Slurpies, beer, cigarettes

    • Too complicated for an AEO?


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

    • Net profit is only a part of economic benefit

    • Economic benefit =

      • you did not spend money you were supposed to

      • You gained advantage by non compliance


    Factor violator s ability to pay
    Factor: Violator’s Ability to Pay matrix)

    • 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 biz

      • Some businesses cannot stay in biz and comply with the law

      • Gov’t cannot subsidize violators


    Ability to pay
    Ability to Pay matrix)

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

    • Training programs?

    • Is compliance encouraged?

    • Do they go “beyond compliance” in other areas?


    Factor deterrent effect of the penalty on the violator
    Factor: Deterrent effect up of the penalty on the violator

    • Compliance costs money

    • Deterrent effect on the violator

      • Economic benefit factors here also


    Factor deterrent effect of the penalty on the regulated community
    Factor: Deterrent effect up of the penalty on the regulated community

    • 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?


    Deterrence an economist s approach
    Deterrence— upAn economist’s approach

    Probability of violation being detected

    If detected, probability of enforcement

    If enforcement action taken, probability of penalty

    Discount rate (interest)

    Time between date of violation

    and payment of penalty




    Caveat
    Caveat! up

    • If you use a matrix it must be designed and you must consider the statutory factors


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