October 10, 2023
The California Department of Toxic Substances Control (DTSC) has been actively working to revamp its penalty assessment regulations. Engagement with the public resulted in DTSC finding a need for the following key improvements: stronger enforcement against serious violators, a streamlined penalty system referred to as the "matrix," mandatory minimum penalties, clear language, and considerations for small business owners. These proposed changes represent a significant step toward achieving a more transparent, equitable, and effective penalty system. Here, we explore the key concepts and updates that DTSC is considering for penalty determination.
One of the primary concepts in DTSC’s proposed changes is the introduction of “Set Penalties.” These predefined penalty amounts would apply to common violations committed by universal waste handlers, hazardous waste transporters, and generators. The aim is to simplify the penalty process by providing clear, consistent, and transparent dollar amounts for specific violations that did not cause harm, are easily correctable, and are easy to investigate.
For example, let’s consider California Code of Regulations Title 22, Section 66273.36, which contains training requirements for universal waste handlers. In a situation where a facility fails to meet these training requirements for personnel handling universal waste, a set penalty would be issued, provided that the violation did not cause harm.
This set penalty concept would also apply to specific documents required by law or regulations. For example, facilities that fail to submit certain documents on time or submit incomplete or insufficient information would be subject to a set penalty. This could be applied to notice of deficiency letters, request for information letters, and corrective action letters.
Changes to the Penalty Table
DTSC also plans significant updates to the penalty table, which is used for more complex and serious hazardous waste violations. Their goal is to create a more flexible penalty system that better matches violation circumstances.
The updated penalty table expands the dollar amount range for serious violations, eliminating duplicated ranges and providing more penalty options. Additionally, it replaces the current $0.00 minimum penalty with a $700 minimum penalty, aligning with public feedback for stronger enforcement.
The first step in determining the penalty amount is to rank the violation’s potential for harm and the extent of deviation. This will establish the penalty range for the violation. As for a violation’s potential for harm, the regulations consider waste’s characteristics, quantity, and level of harm to humans, animals, the environment, and potable drinking water. In the update, DTSC proposed to add the following factors to expand the definition: evidence of release, waste mismanagement, extent and persistence of the waste, and preventative provisions taken. As for extent of deviation, there are currently no proposed changes.
The next step is to determine the specific penalty amount within the range selected. The proposed updates expanded from three options to five to allow for more options to select a penalty that fits the violation circumstances. To ensure consistent penalty selection, DTSC introduced a penalty selector that takes into account the following five criteria: (1) if the waste was defined as hazardous waste; (2) if the violation occurred three or more times; (3) if multiple violations are grouped for a single penalty; (4) if a release occurred; and (5) the size and sophistication of the facility. This means that if the violation does not meet any of the criteria, then the penalty will be the lowest amount in the selected range. On the other hand, if the violation meets four or more of the criteria the highest penalty would be selected.
As an example, suppose your violation falls within a penalty range of $700, $1,925, $3,150, $4,375, and $5,600. For each criteria met, your penalty would incrementally increase, moving you to the next higher penalty amount. This progression continues until you reach four or more criteria, at which point your penalty would be set at the highest level of $5,600.
Concepts that Will Adjust the Base Penalty
Now let’s say your base penalty is $5,600. DTSC has introduced circumstances that allow for a decrease or increase of the base penalty. If you want an opportunity for your base penalty to be lowered, you will need to self-disclose. DTSC will reward facilities that voluntarily report violations resulting in no actual harm because it shows transparency and good faith efforts to comply with regulations.
DTSC may also allow a decrease in a base penalty if the violation was a result from circumstances beyond the control of the violator, such as worker strikes, natural disasters, and economic issues.
While decreases are possible, so are increases to a base penalty. DTSC is recognizing disparities in impacted communities and has introduced an environmental equity adjustment. This adjustment raises penalties for serious violators within such communities, and DTSC is still in the process of determining the most appropriate method for returning those funds to the affected communities.
DTSC has revised its approach to multi-day penalties, with a focus on increased penalties for violations lasting more than one day. The proposal includes a 5% per-day increase to the penalty for each day in violation before discovery. During a “fix-it” period, where the violator corrects the violation, no per-day penalties are added. However, if compliance is not achieved within the fix-it period, penalties increase to 20% per day until compliance is met. The key takeaway is the importance of promptly addressing and rectifying violations within the allotted timeframe.
Currently, DTSC has the authority to recover any economic benefits gained by a violator, which can result in significant labor costs for the agency. The proposed update suggests implementing a $500 threshold to conserve staff resources. This modification is intended to prevent resource-intensive calculations for minor economic benefits.
Lastly, DTSC is committed to improving clarity and accessibility in its enforcement documents. This includes adding a table of contents, reformatting content for ease of understanding, limiting sentence length for precision, using active voice, and employing first or second person when addressing inspectors.
DTSC’s proposed changes to penalty determination introduce important updates to the existing enforcement process. DTSC has stated their goal of providing a clearer, fairer, and more effective enforcement process through these proposed changes. These updates aim to strike a balance in penalties, encourage compliance, and protect the environment and affected communities. These changes have the potential to contribute to a safer and cleaner California if businesses take the time to understand their implications and how they could impact them.
If you would like to provide input on these concepts and revisions to the penalty assessment regulations, DTSC is now accepting comments until October 20th, 2023, 5 P.M (PST). You may submit your comments by clicking HERE.