HAZARDOUS WASTE

PENALTY POLICY

The attached policy is used by the Colorado Depa rtment of Public Hea lth and Environment, Hazardous Materials and Waste Management Divisi on (the Division), to determine appropriate penalties for violations of hazardous waste la ws and regulations in Colorado. This policy replaces the previous poli cy used by the Division.

original /s/ by Gary W. Baughman 6/10/08

_____________________________________________ ____________ Gary W. Baughman Date

Division DirectorCOLORADO DEPARTMENT OF PUBL IC HEALTH AND ENVIRONMENT

HAZARDOUS WASTE CONTROL PROGRAM

PENALTY POLICY

TABLE OF CONTENTS

I. INTRODUCTION .................................................................................................................... 1

II. DOCUMENTATION OF INFORMATION ............................................................................ 3

III. SUMMARY OF PENALTY CALCULATION PROCESS .................................................... 3

IV. DETERMINATION OF BASE PENALTY ............................................................................ 4

• Statutory Factor (a) Seriousness of the Violation................................................ 4

• Statutory Factor (c) The impact upon or threat to the public health or the

environment as a result of the violation............................................................... 5

V. ADJUSTMENTS TO BASE PENALTY ................................................................................ 7

• Statutory Factor (b) Whether the violation was inten tional, reckless, or negligent

.............................................................................................................................. 7

• Statutory Factor (d) The degree, if any, of recalc itrance or recidivism upon the part of the violator................................................................................................ 8

• Statutory Factor (e) The economic benefit realized by the violator as a result of

the violation ......................................................................................................... 8

• Statutory Factor (f) The voluntary and complete disc losure by the violator of such violation in a timely fashion after discovery and prior to the Department's knowledge of the violation provided that all reports required pursuant to the

Colorado Hazardous Waste Act have been submitted as and when otherwise required .............................................................................................................. 11

• Statutory Factor (g) Full and prompt cooperation by the violator following disclosure of a violation, including when appropriate , entering into, in good faith, and implementing a legally enforceable agreement to undertake compliance and remedial efforts........................................................................ 12• Statutory Factor (h) The existence of a regularized and comprehensive environmental compliance program or an environmental audit program that was adopted in a timely, good faith manner and that includes sufficient measures to identify and prevent future non-compliance...................................................... 12

• Statutory Factor (i) Any other aggravating or mitigating circumstances. ......... 13

VI. VIOLATION DURATION MATRIX ...............................................................13

VII. MULTIPLE VIOLATIONS ........................................................................15

VIII. PENALTY FOR VIOLATION OF ADMINISTRATIVE ORDERS.......................... 16COLORADO DEPARTMENT OF PUBL IC HEALTH AND ENVIRONMENT

HAZARDOUS WASTE

PENALTY POLICY

I. INTRODUCTION

In order to respond to the problem of improper management of hazardous waste, Congress amended the Solid Waste Disposal Act with the Resource Conservation and Recovery Act (RCRA) of 1976. Although RCR A has several objectives, Congress' overriding purpose in enacting RCRA was to es tablish the basic statutory framework for a national system that would ensure the pr oper management of hazardous waste. Since 1976, the Solid Waste Disposal Act has been amended by the Quiet Communities Act of 1978, P.L. 95-609, the Used Oil Recycling Act of 1980, P.L. 96-463, the Hazardous and Solid Waste Amendments of 1984, P.L. 98-616, the Safe Drinking Water Act Amendments of 1986, P.L. 99-339, the Superf und Amendments and Reauthorization Act of 1986, P.L. 99-499, and most recently, the Medical Waste Tracking Act of 1988, P.L. 100-582. For simplicity and convenience, the Solid Waste Disposal Act, as amended,

will hereinafter be referred to as "R CRA". On November 2, 1984 the Colorado Department of Public Health and Environmen t (“the Department”) received final federal

authorization to conduct the state hazardous wa ste program in lieu of the base federal program, pursuant to section 3006 of the fede ral act. The Colorado Hazardous Waste Act is found at sections 25-15-101 to 515, C.R.S. The Colorado Hazardous Waste Regulations (the "Regulati ons") are found at 6 CCR 1007-3.

This penalty policy is established pursuant to the Department’s penalty authority under the Colorado Hazardous Waste Act, §§ 25-15- 101 through 515, C.R.S. (the "Act"). Section 25-15-309, C.R.S. provides, inter al ia, that any person who violates the provisions of 25-15-308, C.R.S. or who viol ates any compliance order issued by the Department pursuant to Part 3 of the Act may be subject to an administrative penalty of up to $15,000.00 per day per violation and to a civil penalty of up to $25,000.00 per day per violation. Section 25- 15-309(3), C.R.S. sets out the factors the Department shall consider when determining penalties for a violat ion of Part 3 of the Act. The factors are

as follows:

a. The seriousness of the violation;

b. Whether the violation was intentional, reckless, or negligent;

c. The impact upon or the threat to the public health or the environment as a result of the violation;

d. The degree, if any, of recalcitrance or recidivism upon the part of the violator;

e. The economic benefit realized by the vi olator as a result of the violation;

Page 1f. The voluntary and complete disclosure by the violator of such violation in a timely fashion after discovery and prior to the department's knowledge of the violation provided that all reports required pursuant to the state environmental law have been submitted as and when otherwise required;

g. Full and prompt cooperation by the violat or following disclosure of a violation, including, when appropriate, entering into, in good faith, and implementing a legally enforceable agreement to undertake compliance and remedial efforts;

h. The existence of a regularized and comprehensive environmental compliance program or an environmental audit progr am that was adopted in a timely and good faith manner and that includes suffici ent measures to identify and prevent future noncompliance; and

i. Any other aggravating or mitigating circumstances.

This document sets forth the Department's policy, procedures, interpretations, and internal guidelines that shall be used in determining the amount of administrative penalties the Department shall seek in admi nistrative compliance or ders issued pursuant to Section 25-15-308(2), C.R.S. and the amount of civil penalties sought in civil actions. Penalty assessments are made under the auth ority of the Executive Director of the Colorado Department of Public Health a nd Environment or his or her designee.

The purposes of this policy are to ensure that penalties assessed pursuant to the Colorado

Hazardous Waste Act are assessed in a uniform and consistent manner, while allowing for a reasonable amount of flexibility and disc retion; that penalties are appropriate for the gravity of the violation committed; that economic incentives for noncompliance with Colorado Hazardous Waste Act requirements are eliminated; that penalties are sufficient to deter persons from committing hazardous waste violations; and that compliance is expeditiously achieved and maintained.

This document does not address whether the as sessment of a penalty is an appropriate enforcement response to a particular viol ation. Rather, this document focuses on determining the proper penalty amount that the Department should seek once a decision has been made to pursue a penalty. This polic y is intended to be used by the Department in calculating penalties, which the Depart ment may unilaterally impose; however, the Department retains the enforcement discreti on to impose lesser pena lties as part of a negotiated settlement.

The procedures set out in this document are intended solely for the guidance of Department personnel. They are not intended and cannot be relied upon to create rights, substantive or procedural, enforceable by a ny party in litigation with the Department. The Department reserves the right to be at variance with this polic y. The Department also reserves the right to change this policy at any ti me with appropriate publication.

Page 2II. DOCUMENTATION OF INFORMATION

To support a penalty calculation, enforcem ent personnel must prepare a written explanation of how the proposed penalty am ount was calculated. Documentation must

include all relevant information and evidence that served as the basis for the penalty amount and that were relied upon by the Department's decision-maker.

III. SUMMARY OF PENALTY CALCULATION PROCESS

To determine the amount of the penalty to be assessed against a violat or, all of the factors in 25-15-309(3), C.R.S. shall be considered. This shall be done by first considering statutory factors (a), regardi ng the seriousness of the viola tion, and (c), regarding the impact upon or threat to the publ ic health or environment as a result of the violation. Based upon its consideration of these two statut ory factors, the Depa rtment shall choose an amount from the appropriate cell on the pe nalty matrix (shown on page 6). This amount is the base penalty amount.

The base penalty amount may then be increas ed or decreased upon c onsideration of the remaining factors in §25-15-309(3), C.R.S. Statutory factors (b) and (d) shall be considered aggravating factors, and if determined to be applicable, an upward adjustment to the initial penalty matrix amount shall be made. Stat utory factors (f) through (h) shall be considered mitigating factors and if determined to be applicable, a downward adjustment to the initial penalty matrix amount shall be made. Statutory factor (i) allows the Department to consider other aggrava ting and mitigating circumstances that do not fall into one of the above categories. To determine the penalty adjustment, the Department considers statutory factors (b), (d), and (f) thr ough (i), and then adds the percentage adjustments calculated for each f actor, and adjusts the base penalty amount by the resulting sum. For example, if analysis of statutory factors (b) and (d) yielded an increase of 30%, and statutory factor (f) resulted in a decr ease of 20%, the net penalty adjustment would be an increase of 10%.

If the Department has evidence that the violation continued for multiple days, the adjusted base penalty is then further adjusted to reflect the duration of the violation using

the violation duration ma trix (shown on page 14).

Statutory factor (e), the economic benefit re alized by the violator as a result of the violation, is then added to the adjusted pe nalty to reach the fina l penalty amount. The economic benefit portion of the total penalty is calculated separately and is not adjusted by the aggravating and mitigating factors because its purpose is to ensure that the violator does not gain a competitive economic advantage by virtue of violating regulatory requirements. Even in cases where the pres ence of mitigating factors results in no base penalty assessment, a penalty sufficient to offset any economic benefit gained by the violation should be imposed (unl ess the violator is entitled to the immunity provided by § 25-1-114.5, C.R.S.). If the final penalty amount exceeds $15,000 per day of violation,

Page 3the Department may choose to seek a civil penalty of up to $25,000 per day of violation, or may exercise its enforcement discretion to se ttle for an administrative penalty that does not exceed $15,000 per day of violation. If the final penalty amount does not exceed $15,000 per day of violation, the Department may choose to either seek a civil penalty in district court or impose an administrativ e penalty for the amount calculated.

When an order contains more than one viol ation, statutory fact ors (a) through (i) are applied on a case-by-case basi s to each cited violation.

IV. DETERMINATION OF BASE PENALTY

A base penalty for a violation is calculated considering the statutor y factors regarding the seriousness of the violation and the impact or th reat to public health or the environment.



### • Statutory Factor (a)

Seriousness of the Violation:

Section 25-15-309(a), C.R.S. stat es that the seriousness of a violation shall be considered in assessing a penalty for the violation. The seriousness of the violation shall be determined by examining the extent of de viation from a statutory or regulatory requirement.

To evaluate the extent of deviation from the statutory and regulatory requirements of the Colorado Hazardous Waste Act, the Department shall examine the facts, conditions and circumstances surrounding each violation and co nsider the overall behavior and actions of the violator. Department personnel shall ev aluate each violation in the context of the overall scheme of the facility's compliance or non-compliance. In evaluating the extent of deviation, Department personnel should c onsider whether the f acility complied with most or all of the requirements of the speci fic section of the Act or the Regulations.

a) a "major" deviation occurs when the vi olator deviates from the regulations or statute to such an extent that most (or important aspects) of the requirements are

not met.

b) a "moderate" deviation occu rs when the violator significantly deviates from the requirements of the regulations or stat ute, but some of the requirements are implemented as intended.

c) a "minor" deviation occurs when the violator deviates somewhat from the regulation or statute, but most (or all important aspects) of the requirements are

met.

Page 4

### • Statutory Factor (c) The impact upon or threat to the publ ic health or the environment as a

result of the violation:

In evaluating the impact or threat to huma n health or the environment from hazardous waste, hazardous constituents, and/or hazardous conditions resulting from noncompliance, the following factors shall be considered: probability that human or other environmental receptors may be exposed to hazardous waste, hazardous constituents and/or hazardous conditions, and the potential risk of such exposure. However, in determining the impact or threat to human h ealth or the environment, the emphasis shall be placed on the potential for harm posed by a violation, rather than whether the harm actually occurred. The presence or absence of direct harm from a violation is something over which the violator may have no control, and, therefore, the violator should not be rewarded by lower penalties simply because the violation did not result in actual harm.

1. Ranking the impact on or threat to human health or the environment : In order to evaluate the impact upon or threat to the human hea lth or the environment as a result of the violation, enforcement personnel should determine whether the impact or threat to human health or the environment in a particular situation is major, moderate, or minor.

a) a "major" potential for harm means that the violation poses or may pose a

substantial risk of exposure from hazardous waste, constituents or conditions to human health or the environment;

b) a "moderate" potential for harm me ans that the violation poses or may

pose a moderate risk of exposure from hazardous waste, constituents or conditions to human health or the environment;

c) a "minor" potential for harm means that the violation poses or may pose a

low risk of exposure from hazardous waste, constituents or conditions to

human health or the environment.

2. Potential Risk of Exposure : When calculating the potential risk of exposure or of creating a hazardous condition, enforcement pe rsonnel should weigh the harm that would

result if the hazardous waste or constituen t was released into the environment. The following factors shall be considered in making that determination:

a) the quantity and toxicity of wastes released or po tentially released or the severity of the hazardous condition;

b) likelihood or fact that such hazardous waste or constituent will be transported by way of environmental media, such as air or groundwater;

and

Page 5c) the existence, size and proximity or potential recept or populations (e.g. local residents, fish & wildlife (i ncluding threatened or endangered species), and sensitive environmental media (e.g. surface waters and aquifers).

PENALTY ASSESSMENT MATRIX

The above statutory factors (seriousness of th e violation and the impact upon or threat to public health or the environment as a result of the violation) form the vertical and horizontal axes of the penalty assessment matrix shown below. The matrix has nine cells, each containing a penalty amount based on the civil penalty maximum of $25,000. The specific cell is chosen after determining which category (major, moderate, or minor) is appropriate for the seriousness of the viola tion factor, and which ca tegory is appropriate for the impact upon or threat to public heal th or the environment factor. The amount from the appropriate cell becomes the initial per day penalty amount.

PENALTY MATRIX

SERIOUSNESS OF VIOLATION

MAJOR MODERATE MINOR

MAJOR $25,000 $20,000 $14,000

MODERATE $12,000 $8,000 $6,000 IMPACT OR

THREAT TO

PUBLIC HEALTH

OR

ENVIRONMENT

FROM

VIOLATION MINOR $5,000 $2,000 $400

Again, if the final penalty amount exceeds $15,0 00 per day of violation, the Department may choose to seek a civil pena lty in district court of up to $25,000 per day of violation, or may exercise its enforcement discretion to se ttle for an administrative penalty that does not exceed $15,000 per day of violation. Even if the final penalty amount does not exceed $15,000 per day of violation, the Departme nt may seek a civil penalty in district court or impose an administrative penalty for the amount calculated.

ASSESSMENT OF MULTIPLE COUNTS

Multiple counts are typically assessed when one regulatory requirement has been violated multiple times. For example, when a f acility fails to make hazardous waste determinations for three separate waste str eams, three separate counts are likely to be

assessed.

Page 6V. ADJUSTMENTS TO BASE PENALTY

Adjustments are made to the base penalty to account for the remaining statutory factors which must be considered, and to account fo r any economic benefit that may have been realized by the violator as a result of the viol ation. Following is a detailed discussion of these adjustments.



### • Statutory Factor (b)

Whether the violation was intenti onal, reckless, or negligent

While intentional, reckless, and negligent viol ations can be subject to criminal sanctions in accordance with section 25-15-310, C.R.S. and other statutes, there may be instances of heightened culpability where the Departme nt chooses not to pursue a criminal action. In such instances, the penalty may be adjusted upward as described below.

1. An intentional violation means that the action causing the violation was done with purpose or with intention. Intention means the act or instance of determining mentally upon some action or result.

2. A reckless violation means that the ac tion causing the violation was done by the violator with indifference to the conseque nces. For conduct to be reckless, it must be such as to demonstrate disregard or indifference to consequences, under circumstances involving danger to life or safety to others, although no harm may have actually been intended.

3. A negligent violation means that the acti on causing the violation was the result of an omission by the violator in doing so mething that a reasonable person, guided by the ordinary considerations which or dinarily regulate human affairs would do, or the doing of something which a reasona ble or prudent pers on would not do; it is a departure from the conduct expect ed of a reasonable and prudent person

under like circumstances. Since all viol ations are rooted in negligence, the Department calculates base penalties assuming that the violator has been negligent.

In assessing whether the viol ation was intentional, reckle ss, and/or negligent, the following factors should be considere d, as well as any other factors the Department deems appropriate:

a) how much control the violator ha d over the events constituting the violation; b) the foreseeability of the even ts constituting the violation; c) whether the violator took or c ould have taken reasonable precautions against the events constituting the violation; d) whether the violator knew or should have known of the hazards associated

Page 7with the events constituting the violation; and e) whether the violator proceeded with actions constituting the violation with specific knowledge of whether the vi olator knew or should have known of the legal requirement which was violated.

It should be noted that this last factor, lack of knowledge of the legal requirement,

should never be used as a basis to redu ce the penalty. To do so would encourage ignorance of the law. Rather, if a violat or is deemed to have acted intentionally, this will result only in an upw ard adjustment to the penalty.

If a violation is determined to be inten tional or reckless the base penalty shall be increased by up to 50%. The Department reserves the right to aggravate the penalty beyond 50% for this factor if de emed warranted given the circumstances surrounding any given violation



### • Statutory Factor (d) The degree, if any, of recalcitran ce or recidivism upon the part of the

violator:

To evaluate and assess the degr ee, if any, of the violator's recalcitrance or recidivism, Department enforcement personnel should examin e the violator's compliance history with all environmental laws, not just the Colorado Hazardous Waste Act. Recalcitrance means

that the violator has not obeyed or complied with all of the requirements of the

Hazardous Waste Act and/or other environmenta l laws or regulations, thereby evincing a level of disregard for the stat utory or regulatory re quirements. Recidivism means that the violator has demonstrated a patt ern or history of similar or li ke behavior resulting in noncompliance with the Hazardous Waste Act and/or other environmental laws or regulations at any time in the past. If the violator has a history of recalcitrance and/or recidivism, the base penalty shall be increas ed by 5-50%. The Department reserves the right to aggravate the penalty beyond 50% for this factor if deemed warranted given the circumstances surrounding any given violation.



### • Statutory Factor (e) The economic benefit realized by the viol ator as a result of the violation:

This policy intends that the Department should recapture any significant economic benefit of noncompliance that accrues to a viol ator. The fundamental reason for this is that all economic incentives for noncompliance should be eliminated. As stated above, the penalty amount that is finally determined should never be less than the economic

benefit realized as a result of the violation.

Examples of regulatory require ments for which violations are particularly likely to present significant economic be nefits include, but are not limited to: illegal disposal, failure to conduct weekly inspections, and failu re to train employees who have hazardous

Page 8waste management responsibilities.

For certain Colorado Hazardous Waste Act requirements the economic benefit of noncompliance may be relativel y insignificant (e.g., failure to submit a report on time). In the interest of simplif ying and expediting an enforcement action, enforcement personnel should forego calculating the benefit co mponent where it is determined that the amount of the component is likely to be insi gnificant. If there are multiple violations

whose individual economic benefits are not lik ely to be significant but whose cumulative

benefits are significant, economic benefits shoul d be calculated for each violation.

There are two types of economic benefit of noncompliance which a violator may realize

as a result of a violation: de layed costs and avoided costs. Enforcement personnel should examine both delayed costs and avoided cost s to evaluate and determine the economic benefit component.

1. Calculation of economic benefit: Because the savings that are derived from delayed costs differ from thos e derived from avoided costs, the economic benefit from delayed and a voided costs are calculated in a different manner. For avoided costs, th e economic benefit equals the cost of complying with the requirements, adju sted to reflect anticipated rate of return. For delayed costs, the economic benefit does not equal the cost of complying with the requirements, si nce the violator will eventually have to spend the money to achieve comp liance. The economic benefit for delayed costs consists of the amount of interest on the unspent money that reasonably could have been earned by the violator during noncompliance. If noncompliance has continue d for more than a year, compliance/enforcement personnel shoul d calculate the economic benefit of both the delayed and avoided costs for each year.

In its discretion the Department may use the USEPA's BEN computer model to calculate the economic benefit accruing to a violator through delay or avoidance of the costs of co mplying with applicable requirements

of the Colorado Hazardous Waste Act and its implementing regulations. However, the BEN methodology in some instances either cannot compute or will fail to capture the actual eco nomic benefit of noncompliance. In those instances, it will be appropriate for the Department to include in its penalty analysis a calcula tion of economic benefits in a manner other than those provided for in the BEN methodology.

After calculating the total economic be nefit realized from delayed costs and avoided costs, that amount will be added to the penalty amount after the final penalty amount has been calculated, including accounting for any multi-day component as described in S ection VI below, to determine the total penalty amount. The total penalty amount may not exceed $15,000 per day per violation for administ rative penalties and $25,000 per day per

Page 9violation for civil penalties.

2. Delayed Costs are those expenditures which have been deferred by the violator's failure to comply with the requirements. It is assumed that the violator will eventually be requi red to spend money to achieve compliance. Delayed costs should be calculated from the date of noncompliance to the date of complia nce and assume the violator will continue operation. A delayed cost can become an avoided cost if the violator ceases operation. Examples of violations which result in savings from delayed costs include:

a) failure to conduct initial hazar dous waste training for a large quantity generator;

b) Failure to develop a conti ngency plan for a large quantity

generator;

c) Failure to develop a tank integrity assessment for a large quantity generator; and

d) Failure to provide hazardous waste training to a small quantity

generator.

Example calculation :

The Department's determination is that the facility received an economic benefit by not providing the required hazardous wast e training to facility personnel that manage hazardous waste. The economic benefit for this violation has been calculated as a delayed cost for X number of personnel. An assumption has been made that a cost of at least $2,000 would ha ve been incurred by the facility if an

off-site consultant were contracted to conduct the training. Therefore, the

economic benefit has been calculated as follows:

Economic Benefit = Delayed Costs = (C ost of compliance x Duration of Noncompliance) x interest rate

Delayed Cost = ($2000 x 2 years) x 8% = $320

Economic Benefit = $320.00

3. Avoided Costs are those expenditures which are nullified by the violator's failure to comply. These costs will never be in curred. Avoided costs include operating

and maintenance costs. Avoided costs al so would include any periodic costs, such as leasing monitoring equipment. Examples of violations which result in savings from avoided costs include:

Page 10a. Failure to provide annual hazardous waste refresher training for a large quantity generator;

b. Disposal of hazardous waste on-site or at a facility that does not have interim status or a permit;

c. Failure to conduct weekly inspections of hazardous waste accumulation areas; and

d. Failure to conduct daily tank inspections.;

Example calculation :

The Division has determined that the fac ility has received an economic benefit by not conducting the required w eekly inspections for two y ears. In this case, an assumption has been made that at least 15 minutes would have been necessary to inspect the two accumulation areas. Furthe r, an hourly wage of $20 per hour has

been used for this assessment. The econom ic benefit, which has been calculated as an avoided cost, has been calculated as follows:

Economic Benefit = Avoided Costs + (Delayed Costs x Interest)

Economic Benefit = (104 inspections x .25 hours per inspection x $20/hour) + (104 inspections x .25 hours pe r inspection x $20/hour x 8 %)

Economic Benefit = $520 + $42 = $562



### • Statutory Factor (f) The voluntary and complete disclosure by the violator of such violation in a timely fashion after discovery and prior to the Department's knowledge of the violation provided that all reports required pursuant

to the Colorado Hazardous Waste Act have been submitted as and when otherwise required:

If the violator discovers a violation, notifies the Department about such a violation as soon as prac ticable, gives a voluntary a nd complete disclosure detailing the violation, and takes actions to remedy the violation, the base penalty may be reduced by up to 80%. To obtain this level of reduction, the violator must comply with each requirement listed in th e previous sentence. If the violator complies with some, but not all, of the above requirements, the Department may reduce the penalty by a lesser percentage. To be voluntary, the disclosure must not be required by any statute, regul ation, order, permit, or other legal requirement.

Page 11

### • Statutory Factor (g) Full and prompt cooperation by the violator following disclosure of a violation, including when appropriate, entering into, in good faith, and implementing a legally enforceabl e agreement to undertake compliance

and remedial efforts:

If, following disclosure (by the violator) the violator acts fully and cooperatively with the Department to resolve all issu es surrounding its non-compliance and any

related remedial activities required to protect public he alth and the environment, the base penalty may be reduced by up to 25%. To obtain the benefit of this factor, the violator may also be required to fully and cooperatively enter into a legally enforceable agreement relating to compliance and remedial efforts, if deemed appropriate. A legally enforceab le agreement may include a stipulated penalty provision for future violations.



### • Statutory Factor (h) The existence of a regularized and comprehensive environmental compliance program or an enviro nmental audit program that was adopted in a timely, good faith manner and that includes sufficient measures to identify and prevent future non-compliance:

An environmental compliance program is designed to ensure that a company

knows about and satisfies all environmen tal regulatory requirements. Such a program should include documents, written procedures, a recognized department or division in the company, and assigned personnel whose purpose is monitoring and maintaining compliance with the a pplicable hazardous waste statutory and regulatory requirements. An audit program is an inspection/verification process that checks the company's operations on a routine basis to determine compliance with the statutory and regulatory requiremen ts. An audit program is typically an element of a comprehensive environmental compliance program. These programs must be legitimate and verifiable within the company and operating prior to the inspection. If such programs are operati ng effectively, any problems which are in existence, are likely to be found. The exis tence of such programs are evidence of good faith efforts to comply and that the violator has taken re asonable precautions against the events that mi ght lead to violations.

If a company satisfies the requirements of this factor by having a regularized and comprehensive compliance program or an environmental audit program prior to the inspection, the base penalty may be reduced up to 25%.

Page 12

### • Statutory Factor (i) Any other aggravating or mitigating circumstances

.

Any other aggravating or mitigating circumstances the Department deems

relevant shall be considered. The amount of increase or reduction to the base penalty amount shall be determined by the Department on a case by case basis.

VI. VIOLATION DURATION MATRIX

After the base penalty has been calculate d, the duration of the violation must be

considered. The Colorado Hazardous Wast e Act provides the Department with the authority to assess administrative penalt ies of up to $15,000 per day of noncompliance for each violation of any permit, rule, regulati on, or requirement of Part 3 of the Act, and to seek civil penalties of up to $25,000 per da y of noncompliance for each violation of any permit, rule, regulation, or requirement of Pa rt 3 of the Act. This language explicitly authorizes the Department to consider the duration of each viola tion as a factor in determining an appropriate to tal penalty amount. Accordingly, to the extent that violations can be shown or presumed to have continued for more than one day, an appropriate multi-day component will be ca lculated. The multi-day component should

reflect the duration of th e violation at issue.

After it has been determined that an allege d violation has continued for more than one day, the next step is to determine the length of time each violation continued. Where the Department determines that a violation pe rsists, the penalty may be calculated for a period ending on the date of compliance or the date the Compliance Order is issued, provided there is evidence to support a findi ng that such a violation has occurred. For example, if an inspection revealed that unl abeled drums of hazardous wastes were being stored by a generator for more than 90 days in violation of section 25-15-308(1)(a), C.R.S and 6 CCR 1007-3, § 100.10, enforcemen t personnel should allege in the Compliance Order, and present evidence as to the number of days each violation lasted. Documentation for this type of violation might consist of an admission by a facility employee that drums were stored improperly fo r a certain number of days. In such a case, a penalty could then be calculate d for the number of days stated.

The duration of the violation is separated into the intervals shown on the matrix below. For each time interval the initial per day pe nalty is multiplied by the number of days in that interval that are alleged, and then multipli ed by the percentage for that interval from the matrix depending on the type of violation. The results of this calculation for each

time interval are then summed for the tota l base penalty (see example calculation).

Page 13VIOLATION DURATION MATRIX

Duration of Violation (days)

1-10 11-30 31-60 61-120 121-365 366+

Maj-Maj 100.00% 50.00% 25.00% 10.00% 5.00% 2.00%

Maj-Mod 100.00% 45.00% 22.50% 9.00% 4.50% 1.80%

Maj-Min 100.00% 40.00% 20.00% 8.00% 4.00% 1.60%

Mod-Maj 100.00% 35.00% 17.50% 7.00% 3.50% 1.40 %

Mod-Mod 100.00% 30.00% 15.00% 6.00% 3.00% 1.20%

Mod-Min 100.00% 20.00% 10.00% 4.00% 2.00% 0.80%

Min-Maj 100.00% 18.30% 9.20% 3.70 % 1.80% 0.70%

Min-Mod 100.00% 16.70% 8.30% 3.30% 1.70% 0.70% Type of

Violation

Min-Min 100.00% 15.00% 7.50% 3.00% 1.50% 0.60%

EXAMPLE CALCULATION

For illustration, consider a violation that has been determined to have a serious ranking of major, and impact or threat to public health or the environment ranking of moderate. The duration of the violation has been determined to be 82 days. From the Penalty Matrix, the initi al per day penalty amount is found to be $12,000. The base penalty is then calculat ed for a Maj-Mod violation using the

Violation Duration Matrix as follows:

Days 1-10 ($12,000)X(10 days)X(100%) = $120,000 +Days 11-30 ($12,000)X(20 days)X(45%) = $108,000 +Days 31-60 ($12,000)X(30 days)X(22.5%) = $ 81,000 +Days 61-82 ($12,000)X(22 days)X(9%) = $ 23,760 Total Base Penalty $332,760

While this policy provides general guidance on the use of multi-day penalties, nothing in this policy precludes or should be construed to preclude the assessment of administrative penalties of up to $15,000 and civil penalties of up to $25,000 for each day after the first day of any given violation. Particularly in circumstances where significant harm has in fact occurred and immediate compliance is requi red to avert a continui ng threat to human health or the environment, it may be appr opriate to demand the statutory maximum.

Page 14VII. MULTIPLE VIOLATIONS

In certain situations, the Department may find that a particular fac ility or individual has

violated several different stat e hazardous waste requirements. A separate penalty should be sought in a compliance order for each se parate violation that results from an independent act (or failure to act) by the violat or and is substantially distinguishable from any other violation in the compliance order for which a penalty is to be assessed. A given violation is independent of, and substantially distinguishable from, any other violation when it requires an element of proof not requ ired to establish anot her violation. In many cases, violations of different sections of the regulations constitute independent and substantially distinguis hable violations. For example, a large quantity generator’s failure to conduct initial hazardous waste training for facility personnel, 6 CCR 1007-3, section 265.16(a), and failure to develop a con tingency plan, 6 CCR 1007-3, section 265.52, are violations that can be proven onl y if the Department substantia tes different sets of factual allegations. In the case of a facility which has violated both of these sections of the regulations, a separate penalty should be calculated for each violation.

It is also possible that differe nt violations of the same section of the regulations could constitute independent and substantially disti nguishable violations. For example, a large quantity generator’s failure to provide initial hazardous waste training to certain facility personnel, 6 CCR 1007-3, section 265.16(a), and failure to provide annual refresher training to certain other fac ility personnel that had receiv ed the initial training, 6 CCR 1007-3, section 265.16(c) are two in dependent acts. While the violations are both of the same regulatory section, each requires distinct elements of proof. In this situation, two separate penalties would be appropriate. For penalty purpos es, each of the violations should be assessed separately and the amounts totaled.

Penalties for multiple counts of the same viola tion are appropriate when a facility violates the same requirement on separate occasions that cannot be connected as a single multi-day violation. For example, consider a facility found to be accumulating hazardous waste at the facility’s 180-day accumulation area in four containers that were open on the day of an inspection. In this case, it would be appropriate to assess four separate counts to the violation of failure to keep cont ainers of hazardous wa ste closed, 6 CCR 1007-3, section 265.173. Each open container represen ts a separate violation of the same regulation. Another example would be the accumulation of hazardous waste in three separate hazardous waste accumulation tanks th at do not meet the technical standards for hazardous waste tanks. In this case, it woul d be appropriate to assess three separate

counts for the violation because there were th ree separate tank systems that did not meet

the technical standards fo r hazardous waste tanks.

In general, penalties for multiple violations may be less likely to be appropriate where the violations are not independent or substantially distinguishable . Where a violation derives from or merely restates another violati on, a separate penalty may not be warranted.

Page 15A facility's failure to satisfy one statut ory or regulatory requirement may either necessarily or generally lead to the violati on of numerous other independent regulatory requirements. For example, if a facility, th rough ignorance of the law, fails to make a hazardous waste determination as required by 6 CCR 1007-3, section 262.11, as a consequence it may run afoul of the numerous other regulatory requirements imposed on it by 6 CCR 1007-3, Part 262 or Part 265. Anothe r example would be where a generator operates as a small quantity generator of hazardous waste but failed to notify the Division of its hazardous waste genera tion activities (6 CCR 1007, Part 99) and, therefore, was not

issued an EPA identification number. Si nce the facility did not receive an EPA identification number, the facili ty would have also failed to include that number on line one of each manifest (6 CCR 1007-3, section 262.20(a), and would not have received an invoice to pay its annual generator fees (6 CCR 1007-3, section 262.13(a)(2)). In cases such as these where multiple violations result from a single initial transgression, assessment of a separate penalty for each di stinguishable violation may produce a total penalty which is disproportionately high. Accordingly, in th e specifically limited circumstances described, enforcement pers onnel have discretion to forego separate penalties for certain distinguishable violations , so long as the total penalty for all related violations is appropriate (cons idering the gravity of the offense) and sufficient to deter similar future behavior and recoup economic benefit. Any economi c benefit directly

related to the violation w ould still be calculated under the separate violations.

VIII. PENALTY DETERMINATION FO R VIOLATION OF ADMISITRATIVE

ORDERS WHEN ENFORCED IN DISTRICT COURT

Failing to comply with an administrative orde r may result in an additional penalty of $25,000 or two times the amount of the original penalty, which ever is greater.

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