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NOTICE

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Department of Toxic Substances Control

REGULATIONS

For use by Secretary of State only

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66272.62

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Regular Ruiemaking i~oY• ~ Certificate of CompUance: The agency officer named ❑Emergency Readopt tGov. ❑Changes Without Regulatorylode §11346) below certifies that this agency complied with the Code, §11346) (h)) Effect (GaL Code Regs., titleResubmittal of disapproved or provisions of Gov. Code 4411346.2-71347.3 either ~ §~~p}withdrawn nonemergenct before the emergency regulation was adopted or

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4. ALL BEGINNING AND ENDING DATES Of AVAILABILITY OF MODIFIED REGULATIONS AND/OR MATERIAL ADDED TO THE RUI.EMAKWG FILE {Cal. Code Regs. title 1, §44 and Gov. Code 371347.1)

5. EFFECfiVE DATE OF CHANGES {Gov. Code, §§ 11343.4,11346.itd); CaL Code Regs., title i, §100Effective January 1, April 1, July 1, or Effective on fiiing with §700 Changes Without Effectivedetober 1 (Gov. Code §11343.4(a)) ~ Secretary of State ~ Regulatory Effect ~ other (Specify)

6. CHECK IF THESE REGULATIONS REQUIRE NOTICE TO, OR REVIEW, CONSULTgTION, APPROVAL OR CONCURRENCE 8Y, ANOTHER AGEPICY OR ENTITY

Department of Finance (Form STD. 399) (SAM 46660 ~ Fair Political Practices Commission ~ State Fire Marshal

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~._~~ fHGr,r OF' i Fs~r~VEE

TYPEDNtEANOTITL~OF~,GN,~-pf;Y

Barbara Lee Director

PROPOSED REGULATIt~N TEXT

AMEND. SECTION. 66272.62 TO READ AS FOLLOWS:

(6272.62. Determining the initial Penalty for Each. Violation.

{a) The Enforcement Agency shall determine an initial :penalty for each violation,considering potential. harm and the extent of deviation from .hazardous wastemanagement requirements. The Enforcement Agency shall use the matrix set forth inSubsection 66272.62(d) to determine the .initial penalty for each violation.

{d) The matrix set forth in this subsection shall be used to determine the. initial penaltyfor a violation. The Enforcement Agency shall .select a penalty. amount from the rangeprovided in the matrix cell that corresponds to the. appropriate extent of deviation andthe potential harm. categories. The numbers. in parenthesis. in each cell of the followingmatrix are the midpoints of the. range.

Determination of Initial Penalty Matrix (in dollars)~_.. _. __..__ ~ _ ~_m~~.„~..~.. __ e ___. ~~~.~ .. ~ .__ ~~Extent of Deviation Potential Harm __.__wr ..~~.__~___~ ~~

v_..._~. __ ~,. ~_ . __ Major Moderate Minimal,. _ ~_t__..~ ._..~__.__ _ _ M._...._ ___. w_~A99 70;000 _ ~_ X898 56 000. __._x;898 42 000_..~,~_Major _ _.~. _.__,_ __ ~ _._ ~_~~_ _.__~ 63 000:. ~~~-~99} 49 000 _._....~~9Q) 29 400~._~__.

__ _ ~ __ ~9-,999 56,000 X989 42,000 X999 16,8009~9 56,000 ~-F388 42,000 ___..~6a988 16 800~_.__~ ~ _ ~ .~._. _ _~..~.e.._ __ _~w~..~.~.r..~,r~,.

Moderate_ r....,~_ _ _~ .._ ..._~-),M 49 000: {~-9;99-~ 29 400 __~F_.11~200X98 42 0(10.. 6-988 16 80Q A 5 600-~A~9 42,000 ~9A9 16,$00 ~,-999 5.600

Minimal : __. __ _ ~88-~ 29 400 .__~.. _ ~~.~ .3 7 200 ~_:.~~~ 2 8006-999 16 800 X988 5 600 0

Note: Authority cited: Sections 25150 and 58012, Health and Safety Code. Reference:Sections 25187, 25188, 25189, and 257 89.2, Health and Safety Code;. and .Section11.425.50, Government .Code; and 40 CFR Section 19.4.

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~j~ ~

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Department of Toxic Substances Control

Matthew RodriquezSecretary for

Environmental Protection

Barbara A. fee, Director1001 "i" StreetP.Q. BOX 8O6

Sacramento, California 95812-0806

TITLE 22

EMERGENCY REGULATION

Edmund G. Brown Jr.Governor

Amending Section 66272.62, Determining the Initial Penalty for Each Violation.

REQt~lRED EMERGENCY STATEMENT (1 CCR § 48)"Government Code. section 11346.1(a)(2) requires that, at least five working days priorto submission of theproposedemergency action to the Office of Administrative.Law, theadopting agency provide a notice of the proposed emergency action to every personwho has filed a request for notice of regulatory action with the agency. After submissionof the proposed emergency to the Office of Administrative Law, the Office ofAdministrative Law shall allow interested persons five calendar days to submitcomments ors the proposed emergency reg~kation as set forth in Government Codesection 11349.6."

TITLE 1 CCR § 50(a)(5)4~►~ ~QMPLiAN~E S~"ATEMENT(n Compliance with Government Code 11346.1(a)(2) the Department of ToxicSubstances Control provided public notice of proposed rulemaking on 6122/2018.

FINDING ~F EAIIIERGEfJCYHealth and Safety Code section 25150 allows the Department of Toxic SubstancesControl (DTSC) to adopt, and revise when appropriate, standards and regulations forthe management of hazardous wastes to protect against hazards to public health,domestic livestock, wildlife, or the environment. Health and Safety Code section 58009authorizes DTSC to commence and maintain actions to enforce its rules and regulationsand, among other things, to protect and preserve the public health. Health and SafetyCode section 58012 authorizes DTSC to adopt and enforce regulations for theexecution of its duties.

DTSGs primary enforcement au#horny is granted by Health and Safety Code section25180. Pursuant to Health and Safety Code section 25185, DTSC has the authority toenforce hazardous waste laws by inspecting places or "environment where hazardouswastes are stored, handled, processed, disposed or, or being .:treated to recoverresources." Lora( health officers and local agencies may also be authorized to enforcethe State hazardous waste laws.. DTSC conducts numerous inspections throughout fiheyear many of which may be the :result of a complaint, a referral from a law enforcement

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agency, or regularly scheduled inspection or a grant commitment to the United StatesProtection Agency (US EPA) to conduct the inspection.

State law provides prescriptive timeframes for how DTSC conducts an inspection.DTSG is required to provide the operator of a facility that it has inspected awritten -summary of alleged violations at the conclusion of an inspection. Moreover, DTSC isrequired to provide an inspection report to the` operator no later than 65 days from thedate of inspection unless there are circumstances that may delay the ability to providethe report. (Health & Saf. Code, §25185:) As a matter of policy, DTSC seeks to initiateand complete enforcement actions in a consistent and timely manner. DTSC strives to

initiate formal enforcement actions "as early as possible, and no later than 180 days"from the date of inspection. Initiation of an enforcement action includes, but is notlimited to issuing ̀a final administrative settlement or referral to another agency forprosecution or enforcement. (DTSC Enforcement Response Policy (DTSC-OP-OQ06),(6/29/17.) Finally; DTSC is required to determine whether penalties being assessed areequal and consistent with the types of violations previously assessed penalties. (Cal.Code Regs., tit. 22, §66272.60(c).)

Initiation and completion of consistent and timely enforcement actions is necessary for avariety of reasons. Swift action promotes compliance throughout the regulatedcommunity and assures the public that it is protected.. Penalizing violators, asappropriate, and depriving the violators of any economic benefit gained from non-compliance sends a message to both. the regulated community and the public that non-compliance will not be tolerated.

A recent statutory change enacted by Assembly Bill No 245 (A6 245; Chapter 499,Statutes of 2017) is inconsistent with a regulation that DISC and other agencies rely on

to enforce the California Hazardous Waste Control haws. (HWCL; Health & Saf. Code §25100 et seq.) DTSC has determined that this has created an emergency necessitatingimmediate action to avoid serious harm to the public peace, health, safety,: and general

welfare. Certainty must be provided to both the' regulated community and the regulatoryagencies that administer the HWCL. As a result of the inconsistency between thestatutory change that took effect on January 1, 2018, DTSC has been unable to meet itsstatutory, regulatory and policy requirements to initiate and complete approximately 24enforcement actions in a timely manner. The alleged violators include a variety ofhazardous waste facilities including disposal facilities, used oil facilities, recyclers andtransporters. Several of the inspections were funded by grants provided by US EPA as

a result of DISC commitments made to US EPA. Finally, the local agencies chargedwith inspecting and enforcing over 20,000 generators in the State have been unable tocomplete enforcement actions due to the inconsistency between the statute and thepresent regulation.

If DTSC were to engage in a full rulemaking, under the best circumstances, theamended regulation would not go into effect until November 2018, nearly a year after

the statute was enacted; The Legislature did not contemplate that raising the statutory.-maximum would impede DTSC's ability to conduct timely and complete enforcement

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actions. Further, the;public and the eomrnunities impacted by an enforcemen# actionneed to be reassured that their community is protected.

Immediate action is :necessary for the;proposed amendment to the regulation toeffec#uate a change in statute deemed necessary by the :California Legislature. Thepassage of the emergency'regulation is necessary to ensure the regulation and statuteare consistent. This action makes the State regulation consistent with federal law andregulations. Eliminating the inconsistency allows DTSC, and authorized agencies, tomeet its statutory, regulatory and policy commitments to initiate and complete timelyenforcement actions'of hazardous waste violations. Harmonizing the provisions requiresimmediate action to avoid serious harm to the public peace, health, safety and thegeneral welfare.

STATEMENT 4E FACTS SUPPORTING FINDING OF EMERGENCYOn October 5, 2017, Governor Edmund G. Brown Jr. signed AB 245. Effective January1, 2018, AB 245 amended Health and Safety Code sections 25188, 25189, and25189.2. The amendments made by AB 245 increase the maximum administrative andcivi) penalty for hazardous waste violations in California from $25,000 to $70,000 perday per violation.

DISC first learned of the passage of AB 245 in October 2017, however DTSC did nothave authority to implement a conforming regulatory change until statute becameeffective on January 1, 2018. DTSC determined that an emergency exists for immediateaction #o ensure that the regulation and the amended statute are consistent. DTSC hasworked :diligently in addressing the emergency despite resource constraints.

DTSC relies on regulations to assess administrative penaifies for enforcementpurposes. The penalty assessed for any violation is required to not exceed themaximum penalty specified in statute. (Cal. Code Regs., tit. 22, § 66272.61.) DTSC andother agencies, including a unified program agency, local health officer, or local publicofficer have fhe authority to issue and enforce administrative orders for violation of theHWCL. (id. at § 6627Q.60, subd. {b).)

In determining the initial penalty for each violation, DTS~ Gc~r~s~ders the ~~t~ntial harmand the extenf of deviation from hazardous waste management requirements. (Cal.Code Regs., tit.22, § 66272.62.) Further, DTSC is required to use a matrix to select aninitial. penalty amount for violations from the range provided in the matrix thatcorresponds to the appropriate extent of deviation and potential harm, whether they bemajor, moderate, or minimal. (Id. at subd. (d).) Consistent with statutory authorities prior.to the enactment of AB 245, the matrix provides that where a violation's extent ofdeviation and potential for harm is "major," the appropriate initial penalty is $25,000. A11-values in the penalty matrix are based on the statutory maximum. The enactment of AB245 increased the maximum amount of penalty in statute from: $25,000 to $70,000, a280% increase to administrative and civil penalties. The penalty matrix in the regulation{CaI. Cade Regs., tit. 22, § 66272.62) is now inconsistent with the statutory changesmade by AB 245. To make the regulation consistent with s#acute, DTSC proposes to

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increase all the. penalty amounts in the penalty matrix by 280% to match the increase inthe amended statute.

in 2017, the United. States Environmental Protection Agency (U.S. EPA) amended thefederal penalty regulations as mandated by the Federal Civil Penalty Inflation Act of1990, as amended in 2015, .which prescribes a formula. for adjusting statutory civilpenalties to reflect inflation, maintaining the deterrent effect of statutory civil penalties,:and promoting compliance with the law. (82 Fed. Reg:=3633 (1/12117).) As a result, U.S.EPA amended a table that provides civil monetary penalty inflation adjustments,including a statutory maximum far violations of the Resource Conservation andRecovery Act (RCRA). (40 C.F:R. § 19.4.) U.S. EPA also made amendments to raisethe penalty amount for other environmental statutes including the Clean Water Act (33U.S.C. § 1251 et seq.) and the Comprehensive Environmental Response,Compensation, and Liability Act (42 U.S.C: § 9601 et seq.).

In amending the federal penalty regulations, U.S. EPA raised the maximum civil penaltyamount, adjusted for inflation, for violations of federal hazardous waste management.requirements of RCRA to $71,164 per day per violation (42 U.S.C. § 6928, subd. (g)),and amended other regulations adopted to implement RCRA. Another example in theamended federal penalty regulations is the increase in the maximum penalty of $57,391for violation of a corrective action order issued pursuant to RCRA Section 3008, subd.(c) (42 U.S.C. § 6928, subd. (c)). (40 C.F.R. ~ 19.4. at Table 2.)

AB 245 was intended to make "California's enforcement penalties for hazardous wasteviolations consistent with federal penalties by increasing both administrative and civilpenalties for State hazardous waste management violations to $70,000." (Senate BillAnalysis (9/11/17) p.1.) Further,- another Senate Bill analysis cited a July 2016 reportfrom a statutorily created Independent Review Panel (Health & Saf. Code, § 570.14) that .recommended an "[i]ncrease [of] the maximum penalties for violations of the HazardousWaste Control Act [sic]. to make them. equivalent to the federal maximum penalties forsimilar violations, with an inflation allowance." {Senate Committee on EnvironmentalSafety &Toxic Materials (undated), p. 2.)

Pursuant to State and federal laws, DTSC is the State agency authorized with:administering the HWCL in lieu of RCRA. (42 U.S.C. § 6926; Health & Saf. Code;.:§§ 25101, subd. (d), 25159; California: Final Authorization of State Hazardous WasteProgram (57 Fed. Reg. 18827 (5/1/92).) RCRA provides forfederal oversight andenforcement of authorized State regulations. (42 U.S.C. §6926; 40 C.F.R. §271.1.}DTSC is required to adopt regulations to maintain authorization that conforms with thefederal program, but is not prohibited from adopting regulations that may be more.stringent and broader in scope than the corresponding federal regulations. As part ofobtaining authorization from US EPA, DTSC entered into a Memorandum of Agreementwith US EPA Region IX agreeing to keep US EPA informed of any modifications to thisbasic statutory regulatory authority, forms procedures or priorities. (Memorandum ofAgreement between DISC and US EPA, Region IX (1/23/99.). As an authorized State,..California is required to revise its program to maintain authorization as the federalprogram changes. (40 C.F.R.271.21(e)(1).)

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Here, US EPA,amended the federal penalty regulations to raise the maximum civilpenalty which, as an authorized State, DTSC must be consistent in applying andadministering the increased .penalty. (40 C.F.R. §271.16(a)(3)(1.)

Any proposed regulation, required for authorization, is required #o be deemed a non-substantive change without regulatory effect for :purposes of :Section 100 of Title 1 of theCalifornia Code of Regulations. (Health & Saf. Code, § 25159.1.) Because, US. EPAand DISC use different calculations in establishing a penalty, a change in DTSCsmatrix in California Code of regulations, title 22, section 66272.62(d) would not qualifyas anon-substantive change.

As previously discussed, DTSC has already conduc#ed inspections in 20.18 that requireenforcement action. Currently, the maximum penalty in .statute and regulation areinconsistent. The new statutory changes increase civil .penalties to a maximum of$70,p00 per day per violation. Current regulation specifies maximum civil penalties of upto $25,000 per day per violation. This. emergency rulemaking action by DTSC proposesto amend California Cade of Regulations, Title 22, Division 4.5, Chapter 22, Article 3, §66272.62 to increase administrative and civil penalties #o a maximum of $70,000 perday per violation of the HWCL consistent with the changes AB 245 made in statute. Thischange would also make State law consistent with federal law and regulations asrequired by DTSCs authorization to implement State law in lieu of RCRA.

AUTHORITY' &REFERENCE

AUTHORITYThe regulation is being adopted under the. following authorities

Health and Safety Code section 25150 grants DTSG the authority to adopt, and revisewhen appropriate, standards and :regulations fior the management of hazardous wastesto protect against hazards to public health, domestic livestock, wildlife, or theenvironment.

Health and .Safety. Cody section 25159 grants DTSG the authority to adopt and reviseregulations #hat allow the State to .receive :and. maintain .authorization to administer aState hazardous .waste program. in lieu of RCRA.

Health and Safety Code section 25159.5 provides that when aTSC is adopting orrevising standards and regulations, ~TSC is required, insofar as practicable, ta` makethe standards and regulations conform with the corresponding regulations adopted byU.S. EPA pursuant to RCRA.

Health and. Safety Code section 58012 authorizes DTSC to adopt and enforce.regulations for the execution of its duties.

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Health and Safety Code section 25188 grants DTSC the authority to issue a civil penaltyof not more than $70,000 for each day of non-compliance. to persons subject to an orderpursuant to 25187:.

Health and Safety Code section 25189 provides that a person who intentionally ornegligently violates provisions of the hazardous waste management laws may be liablefor a civil penalty of not more than $70,000 for each separate violation or, for continuingviolations,. foreach day that violation continues.

Health and Safety Code section 25189.2 provides strict liability in that any person whoviolates provisions of hazardous waste management laws may be liable for a civilpenalty of not more than $70,000 for each separate violation or, for continuingviolations, for each day that violation continues:

REFERENCEThe proposed regulation implements, interprets, or makes specific the following statute:

Health and Safety Code 25187 states DTSC or a unified program agency may issue anorder requiring that a violation be corrected and imposing an administrative penalty, for.any violation of the hazardous waste management laws or any permit, rule, regulation,standard, or requirement issued or adopted pursuant to the HWCL, whenever DTSC ora unified program agency determines that a person has violated, is in violation of, orthreatens to violate the HWCL, or any permit, rule, regulation, standard, or requirementissued or adopted pursuant to the HWCL or the Hazardous Substance Account Act(commencing with Health & Saf. Code, § 25300 et seq.).

INFORMATIVE DIGEST/POLICY STATEMENT OVERVIEWExisting law and regulations permit DTSC or an authorized agency, known as a unifiedprogram agency, to implement and enforce the HWCL. These laws and regulations.allow DTSC and the unified program agencies to perform inspections of hazardouswaste facilities and hazardous waste generators. Inspections may result inadministrative or civil penalties for certain violations of any permit, rule, regulation, ;standard, or requirement issued or adopted pursuant to the laws regulating hazardouswaste and hazardous substances.

Prior to the enactment of AB 245, a person who failed to comply with a schedule forcompliance or who intentionally or negligently violated hazardous waste laws may beliable for a civil penalty not to exceed $25,000 for each separate violation or, forcontinuing violations, for each day that the violation continues. DTSCs regulations for.assessment of administrative penalties, utilized by DTSC and authorized agenciesstate that any "penalty assessed ...shall not exceed the maximum penalty specified instatute." (Cal. Code Regs., tit. 22, §§ 66272.61, 66272.63, subd. (d), 66272.67, subd.(e), 66272.69 [The final penalty shall not exceed the statutory maximum.].)

Effective January 1, 2018, AB 245 amended Health and Safety Code sections 25188,25189, and 25189.2 to increase administrative and civil penalties to a maximum of$70,000 per day per violation.

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The regulation amended by this proposed. emergency rulemaking would reflect theaforementioned (January 1, 201.8) changes in statute. The amendment to the regulationwoultl increase administrative and civil penalties to a maximum of $70,000 per day perviolation to be consistent with statutory changes.

The. amendment to the .regulation is intended to .provide notice and consistency to theregulated community and the regulatory agencies.. Clearly, the legislature .intended thatthe penalties are necessary to protect public health and safety, worker safety and theenvironment. It promotes fairness and transparency to the regulated community andgovernment..

Anticipated BenefitsAmendment of the regulation would provide an added deterrent to the regulatedcommunity and encourage compliance with the. HWCL. As a result, it would betterprotect. California's people and environment from harmful effects of toxic substances byenforcing hazardous waste laws, reducing hazardous waste generation, andencouraging the manufacture of chemically safer products.

Summary of Existing Statutes and RegulationsEffective .January 1, 2018, .Health and Safety .Code sections 25188, 25189, and 25189.2were amended., to provide fior the assessment of .administrative and civil penalties up toa maximum of $70,000 for violations of the HWC~.

The existing regulation, California Code of Regulations, #itle 22, section 66272.62, uses:.a matrix that evaluates potential. for harm and extent of deviation. to calculate penaltyamounts with a maximum of $2:5,000 per violation per day. An inconsistency existsbetween the newly amended statutes and existing regulation,

Relation to Existing Federal RegulationsPenalties under federal law can be found in 40 Code of Federal Regina#ions; Chapter i,Subchapter A, Part 19, Section 19.4. The amendment of#his regulation would notconflict with, ar modify, any federal Jaw. Rather, it would harmonize and make .the.proposed regulation amendment consistent with federal .law end r~g~latEons.

Relation to Existing State RegulationsThe authority to assess penalties under State regulations can be found in CaliforniaCode of Regulations, title 22, section 66272.60 et seq. The amendment of thisregulation would ensure consistency between federal law and regulations ar~d State lawand regulations. The. amendment of this regulation would not conflict with State .law orregulation.

DISCLOSURE REGARDING THE PROPCJSED ACTION

MANDATES ON LOCAL AGENCIES OR SCHOOL DISTRICTSDISC has determined that the proposed changes to the regulation would not impose amandate on local agencies or school districts and would require no State

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reimbursement pursuant to Part 7 of Division 4, commencing with section 17500, of theGovernment Code.

CAST OR SAVINGS TO STATE OR LOCAL AGENCIES, OR SCHOOL DISTRICTSSUBJECT TO REIMBURSEMENTDTSC has determined that no fiscal impact exists. This regulation does not affect any

local entity or program.

COST OR SAVINGS /N FEDERAL FUNDING TO THE STATEDTSC has determined that no fiscal impact to federal funding to the state exists.

DETERMINATION OF NO SIGNIFICANT STATEWIDE ECON4M/C IMPACT

DTSC has determined that the proposed changes to the regulation would not create a

significant statewide economic impact.

COST IMPACTS ON REPRESENTATIVE PRIVATE PERSONS OR BUSINESSESDTSC has determined that the proposed changes to the regulation would not create asignificant impact on representative private persons or businesses that comply with the

State's hazardous waste laws.

EFFECT ON SMALL BUS/NESSESDTSC has determined that the proposed changes to regulation would not have an effect

on small businesses.

EFFECT ON HOUSING COSTSDTSC has determined that the proposed changes to regulation would not have an effect

on housing costs.

RESULTS OF THE ECONOMIC IMPACT ANALYSISDTSC has determined that the proposed changes to regulation would not create asignificant economic impact..

CONS/DERATION OF ALTERNATIVESRevision of the regulation is necessary to ensure consistency with the. statutory changes

and federal law anc4 regulations. Failure to amend the regulation would create confusion

and inconsistency when assessing penalties for violations of hazardous wastemanagement requirements.

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