California Department of Resources Recycling and Recovery (CalRecycle) 

Regulations: Title 14, Natural Resources--Division 7, CIWMB

Chapter 5. Enforcement of Solid Waste Standards and Administration of Solid Waste Facility Permits; Loan Guarantees

Article 5. Enforcement by Board

Section 18350. Enforcement Actions by Board.

(a) Should the board find good cause exists for the issuance of a notice and order (N&O) or for the taking of any other enforcement action and should the board further find that the LEA has failed to take such an action pursuant to the LEA performance criteria in section 18084, the board may take such an action after implementing the following procedures:

(1) Request in writing an increased enforcement response by the LEA, consisting of additional enforcement pursuant to its EPP and, if applicable, to a previously issued N&O, and offer technical assistance. The request shall include documentation of the lack of appropriate enforcement action on the part of the LEA;

(2) If the LEA fails to respond within 30 days of receipt of the request with an increased enforcement response, the board shall issue a Notice of Intent to Take Action (NIA) to the LEA and the operator. The NIA shall include the date and time for a board hearing which shall be scheduled in no case earlier than 30 days from the date the NIA is sent;

(3) If the LEA fails to respond with an increased enforcement response, the board shall hold a public hearing regarding its intent to take action. At the hearing, the board may decide to to take enforcement action or to take any other action to improve LEA performance pursuant to PRC section 43216.5.

(b) In taking enforcement action, the board shall follow applicable procedures set forth for the EA in sections 18304 through 18307, as applicable. Notice of such action shall be given to the LEA in the same time and manner required for notice to the board by the LEA pursuant to section 18304(e).

(c) Notwithstanding section 18350(a), if the board finds that the LEA's failure to take enforcement action causes an imminent threat to public health and safety or the environment, the board may take enforcement action, as it deems necessary without prior notification or hearing.

(d) For purposes of this section, an imminent threat to public health and safety or the environment is defined as a condition which is creating a substantial probability of harm, when the probability and potential extent of harm make it reasonably necessary to take immediate action to prevent, reduce, or mitigate the damages to persons, property, natural resources, or the public health or safety.

(e) In taking any enforcement action related to health standards, as defined in section 17205, the board shall coordinate its activities with the State Department of Health.

Note:

Authority cited: Sections 40502 and 43304, Public Resources Code.
Reference: Sections 45000-45024, Public Resources Code.


Section 18351. Assumption of Duties of EA.

(a) The board shall assume the duties of the EA upon occurrence of any of the following circumstances:

(1) Upon agreement of the board and local governing body and designation of the board in the manner provided by law; or

(2) Upon withdrawal of a designation where no new designation is made and approved.

(b) Whenever the board assumes the duties of an EA, it shall so notify appropriate local governing body within 10 days of its assumption of duties.

Note:

Authority cited: Sections 40502 and 43020, Public Resources Code.
Reference: Sections 43202-43208, Public Resources Code.


Article 5.1 Inventory of Solid Waste Facilities Which Violate State Minimum Standards

Section 18360. Authority and Scope.

(a) This Article sets forth the procedures associated with the Inventory of Solid Waste Facilities Which Violate State Minimum Standards, and the enforcement roles of both the enforcement agency and the board.

(b) This Article is adopted pursuant to and for the purpose of implementing the California Integrated Waste Management Act of 1989 (Act) commencing with Section 40000 of the Public Resources Code, as amended. This article should be read together with the Act.

(c) Nothing in this Article limits or restricts the power of any federal, state, or local agency to enforce any provision of law that it is authorized or required to enforce or administer, nor limit or restrict cities or counties from promulgating laws which are at least as strict as the regulations contained in this Article. However, no city or county may promulgate laws which are inconsistent with the provisions of this Article.

Note:

Authority cited: Sections 40502, 43020 and 43021, Public Resources Code.
Reference: Sections 40053, 43020 and 43021, Public Resources Code.


Section 18361. Definitions.

The following definitions apply to Article 5.1.

(a) "Compliance schedule" means a written plan with milestone dates to achieve compliance for State Minimum Standard (SMS) violations. The compliance schedule could be proposed by the operator and approved by the enforcement agency or directed by the enforcement agency. The compliance schedule may be a stand-alone document or in the form of a Notice and Order pursuant to California Code of Regulations section 18304.

(b) "Executive director" means the executive director of the board or his/her designee.

(c) "Inventory" means a list of solid waste facilities operating in the State of California that have multiple violation(s) of the state minimum standards for solid waste handling and disposal. State minimum standards regulate the design and operation of solid waste facilities in order to protect public health and safety of the environment in Title 14 or Title 27, California Code of Regulations

Note:

Authority cited: Sections 40502 and 43020, Public Resources Code.
Reference: Sections 44104 and 44106, Public Resources Code.


Section 18362. Notice of Intent to List a Facility for Inclusion on the Inventory.

(a) If, at a permitted facility, the enforcement agency documents the same State Minimum Standards violation(s) for two consecutive months during is inspections, then the board will send a notice of intent letter to the operator and landowner of the facility. This letter is a notification to the operator/owner of a permitted facility that the board intends to place the facility on the Inventory if the violation(s) is not corrected within 90 days of receipt of the notice. The notice of intent letter will be sent by certified mail.

(b) The board must consult with the enforcement agency verbally or in writing before sending the notice of intent letter to ensure that the notification is based on current information.

Note:

Authority cited: Sections 40502 and 43020, Public Resources Code.
Reference: Sections 44104, Public Resources Code.


Section 18363. Rescission of the Notice of Intent to List a Facility on the Inventory.

(a) If the enforcement agency provides written documentation that the facility is no longer in violation of all of the standard(s) listed in the notice of intent letter during the 90-day notice of intent period, then a rescission letter will be sent to the operator and landowner by the board. The rescission letter will be sent by certified mail.

(b) The enforcement agency must indicate compliance on an inspection report developed at the time compliance is determined or on the next inspection report after the determination.

Note:

Authority cited: Sections 40502 and 43020, Public Resources Code.
Reference: Sections 44104, Public Resources Code.


Section 18364. Inclusion of a Facility on the Inventory.

(a) If the violation(s) listed on the notice of intent letter is not corrected on or before the 90th day subsequent to the operator's receipt of the notice of intent letter, then the board will send another letter to the operator and landowner as notification that their facility has been placed on the Inventory. The inclusion letter will state the violation(s) to be listed on the Inventory, including those on the notice of intent letter that have not been complied with, and will be sent by certified mail.

(b) The board must consult with the enforcement agency verbally or in writing before sending out an inclusion letter to ensure that the notification is based on current information.

Note:

Authority cited: Sections 40502 and 43020, Public Resources Code.
Reference: Sections 44104, Public Resources Code.


Section 18365. Compliance Schedule.

(a) Within 15 business days following the date of the inclusion letter, the enforcement agency must issue a compliance schedule to the operator of the facility pursuant to PRC 44106(a). Within 5 business days of issuance of the compliance schedule, a copy will be sent to the board.

(b) The compliance schedule must have the final compliance date within one year from the date of the inclusion letter. The enforcement agency may issue a compliance schedule for more than one year but not to exceed two years, after informing the executive director in writing. A one-year extension beyond two years may be made prior to the expiration of the two-year period upon approval by the executive director. The executive director shall report any such approvals or disapprovals to the board.

Note:

Authority cited: Sections 40502 and 43020, Public Resources Code.
Reference: Sections 44106, Public Resources Code.


Section 18366. Removal of a Facility from the Inventory.

(a) When the enforcement agency provides the board with written documentation that the facility is no longer in violation of all the standard(s) listed on the inclusion letter, then a removal letter will be sent to the operator and landowner by the board. The removal letter will be sent by certified mail within 15 days of the receipt of the LEA documentation.

(b) The enforcement agency must indicate compliance in an inspection report developed at the time compliance is determined or in the next inspection report after the determination.

Note:

Authority cited: Sections 40502 and 43020, Public Resources Code.
Reference: Sections 44104 and 44106, Public Resources Code.


Section 18367. Publishing the Inventory.

(a) The Inventory will be published twice a year in board meeting minutes. Updates to the published Inventory will be made as needed.

(b) Each city council or county board of supervisors with a facility in its jurisdiction on the Inventory will receive a copy of the twice a year published Inventory. The jurisdiction will be notified when the facility is removed from the Inventory.

Note:

Authority cited: Sections 40502 and 43020, Public Resources Code.
Reference: Sections 44104, Public Resources Code.


Section 18368. Penalties.

(a) The enforcement agency may issue enforcement orders as it deems appropriate pursuant to Public Resources Code, Division 30, Part 5 (commencing at section 45000) and Title 14, California Code of Regulations, Division 7, Chapter 5, Article 4 (commencing at section 18301).

(b) The enforcement agency may revoke the permit of a solid waste facility that does not meet the requirements contained in the compliance schedule issued by the enforcement agency until the violation(s) of state minimum standards which caused the facility to be included in the Inventory are remedied, pursuant to Public Resources Code, Division 30, Part 4, sections 44305 and 44306, and Title 14, California Code of Regulations, section 18307.

Note:

Authority cited: Sections 40502 and 43020, Public Resources Code.
Reference: Sections 45000-45024 and 44106, Public Resources Code.


Article 6. Criteria, Priority and Administration of the Loan Guarantee Program Provided Pursuant to the Waste Disposal Site Hazard Reduction Act of 1987.

Section 18400. Definitions.

For the purposes of this article, the definitions found in Public Resources Code sections 46021-46028 shall apply unless otherwise indicated. The following supplementary definitions shall also govern the construction of this chapter:

(a) "Approved lending institutions" means banking organizations, including national banking associations and state chartered commercial banks and trust companies; savings and loan associations; and state and federal agencies authorized to make loans, such as the California Pollution Control Financing Authority.

(b) "Borrower" means an owner or operator of a solid waste landfill who applies for a loan, and meets the eligibility requirements set forth in section 18401 of these regulations.

(c) "Default" means the failure of a borrower or debtor to pay, when due, the principal and/or the interest owed:

(1) on an installment if the note is written for installment payments; or

(2) on maturity of the note if the note is written for a lump sum payment; or

(3) on demand of the lender if the lender has exercised the note's acceleration clause.

In the absence of the conditions stated above, failure of the debtor to comply with terms or conditions attached to a note shall not in itself constitute a default that would allow the lender to file a claim against the guarantee.

(d) Qualifying" corrective actions are those actions which are required by a state or local enforcement agency to protect the public health or the environment, including but not limited to, events related to water contamination, air pollution, and methane gas migration at solid waste disposal facilities, and which are neither provided for in the closure or postclosure maintenance plans for a facility which are required by section 18255 of this Title; nor are required to be set forth in a facility's closure and postclosure maintenance plans by sections 18261 through 18265.3 of this title.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Sections 46021-46028, 46300-46301, 46303 and 46350-46353, Public Resources Code.


Section 18401. Loan Guarantee Criteria.

The Board may guarantee a loan only if it determines that the borrower meets the following criteria:

(a) The borrower has met the requirements, if applicable, of Public Resources Code section 46202.

(b) The loan guarantee, if provided, shall be used to secure a loan from an approved lending institution to implement a qualifying corrective action, which is required to be taken pursuant to section 41805.5 of the Health and Safety Code or section 13273 of the Water Code, or pursuant to directions from a state or local enforcement agency.

(c) The borrower is unable to secure adequate finances for a qualifying corrective action and has provided written evidence that this guarantee is necessary in order to secure adequate finances. Evidence may include, but is not limited to, credit evaluations from approved lending institutions indicating that a guarantee is needed in order for the loan to be made.

(1) The landfill owner or operator shall have attempted to secure financing through conventional funding mechanisms. including but not limited to increased tipping fees, to cover the cost of implementing the corrective action.

(2) The borrower is unable to obtain the required financing from any of its parent, subsidiary or associated enterprises.

(d) If the facility is in the process of closing, the borrower must be undertaking the planned closure and postclosure maintenance activities. If any part of the facility has already been closed, the borrower must be undertaking the planned closure and postclosure maintenance activities on the closed portion.

(e) The borrower is able to repay the loan.

(1) Evaluation of the borrower's ability to repay shall be based on the borrower's financial statements for the previous three (3) years.

(A) Each of these statements shall consist of a balance sheet, an income statement, and a statement of changes in financial position, all of which will have been prepared according to generally accepted accounting principles.

(B) If the latest complete financial statement is more than six (6) months old, an interim financial statement not older than sixty (60) days shall be included.

(2) If financial statements are not available, the borrower will provide other information acceptable to the Board which establishes a financial ability to repay the loan, such as:

(A) Income tax returns,

(B) Credit reports from Retail Credit Association and other credit reporting agencies,

(C) An appraisal report showing the value of real and personal property which is suitable as collateral.

(f) The loan which is to be guaranteed will be secured by collateral as the Board may require, such as, but not limited to, a mortgage or security interest in real estate, and buildings or personal property of the borrower. These items may only be subject to encumbrances that the Board may approve, such as, assignment or pledges of leases, and personal or corporate guarantees. Only the unencumbered equity portion of the property accepted as collateral shall be considered as collateral. Personal guarantees of the principals shall be required, unless reasons satisfactory to the Board are presented which justify not requiring such guarantees.

(1) Real state or stationary machinery or equipment pledged as a significant portion of collateral for repayment of a guaranteed loan shall be located within the State of California. Real estate pledged as collateral shall not include land which has been used as a solid waste disposal site.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Sections 46205 and 46303-46307, Public Resources Code.


Section 18402. Priority.

The allocation of loan guarantee funds by the Board shall be in accordance with the following order of priority:

(a) First priority will be given to applicants who need to secure financial resources for the mitigation of identified hazards to public health, damage to the environment, or nuisance to the public, of greatest severity, which are created by solid waste landfills and entail qualifying corrective actions as defined in section 18400 of this article.

(b) In the event that applications to mitigate hazards of equal severity are received, priority will be given to those applications where it is shown that there will be the greatest increase in the costs associated with the anticipated corrective action, if the corrective action is delayed.

(c) In the event that a priority between applications cannot be established by subsections (a) and (b), priority will be given to those applicants who demonstrate the best record of compliance with applicable law, regulations and permits required in the operation of landfill facilities.

(d) In the event that a priority between applications cannot be established by subsections (a) through (c), priority will be given to those applications with the smallest dollar value, in order to allow the maximum number of guarantees to be made within the limits of the Loan Guarantee Program.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Sections 46306 and 46307, Public Resources Code.


Section 18403. Loan Guarantee Size.

(a) The minimum loan amount that will be guaranteed is the smallest amount which an approved lending institution is willing to loan to the borrower.

(b) The maximum loan guarantee amounts shall be subject to the following limitations:

(1) A loan guarantee will not exceed $1,000,000 or the cost of the specified corrective action, whichever is less.

(2) The total loan guarantee amount awarded to any one borrower will not exceed fifty percent (50%) of the balance of funds in the Account allocated for loan guarantees at the time the guarantee is awarded.

The Board may guarantee a loan in excess of these limits if it determines that a guarantee with a greater value is necessary to mitigate hazards to public health, damage to the environment, or nuisance to the public.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Sections 46300, 46301 and 46303, Public Resources Code.


Section 18404. Loan Guarantee Period.

(a) A loan guarantee will expire sixty (60) months after the effective date of the guarantee of on the date the loan is repaid, whichever occurs first.

(b) A guarantee may be renewed prior to its termination. The Board will determine whether to renew a guarantee using the same criteria and procedures used to establish a new loan guarantee.

(c) A guarantee may exceed sixty (60) months if the Board determines that hazards to public health will exist, or damage to the environment will ensue, or a nuisance to the public will persist if a guarantee with a longer life is not made.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Section 46303, Public Resources Code.


Section 18405. Percentage of Guarantee.

The Board may guarantee no more than ninety percent (90%) of the principal balance to be loaned. This guarantee shall obligate the Board to purchase from the lender the guaranteed portion of a loan in the event of a default, subject to the terms and conditions of the guarantee as specified in sections 18412 and 18413, and in the loan guarantee contract.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Section 46303, Public Resources Code.


Section 18406. Reserve Ratio.

The Board shall insure that at all times loan guarantee funds are held in reserve in an amount equal to no less than seventy-five percent (75%) of the total amount of the guaranteed principal and interest which is currently outstanding.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Sections 46300-46301, Public Resources Code.


Section 18407. Loan Interest.

The rate of interest to be charged on guaranteed loans shall be negotiated between the lender and borrower. The lender shall inform the Board of agreed-upon interest rate for a loan at the time the loan is made.

Note:

Authority cited: Sections 40502 and 46201, Public Resources Code.
Reference: Section 46303, Public Resources Code.


Section 18408. Application for Loan Guarantees; Fees.

(a) A landfill owner or operator shall file an application for a loan guarantee to fund a corrective action at the principal place of business of the Board.

(b) A landfill owner or operator shall file an application for a loan guarantee that includes information as specified in CIWMB Forms 201 (5/89), 202 (5/89) and 203 (5/89), which are incorporated by reference. Submittal of these forms is optional, but submittal of the information requested in these forms is mandatory.

(c) A lender shall include information on an applicant as specified in CIWMB Form 204 (5/89), which is incorporated by reference. Submittal of this form is optional, but submittal of the information requested in this form is mandatory.

(d) A minimum nonrefundable application fee of $250 or one-tenth (1/10) of one percent of the loan amount to be guaranteed, whichever is greater, shall be paid to the Board at the time of application to defray the Board's expenses in reviewing and processing the application.

Note:

Authority cited: Sections 40502 and 46201, Public Resources Code.
Reference: Sections 46204, 46308 and 46309, Public Resources Code.


Section 18409. Board's Actions on Applications.

(a) Upon receipt of an application for a loan guarantee made by a landfill operator or owner, the Board shall review the application to determine if the application is complete. If the application is not complete, it shall be returned and the applicant notified of the deficiencies in the application within thirty (30) days. The applicant may resubmit an application to correct the identified deficiencies one time without paying a new application fee.

(b) Within ninety (90) days of the receipt of the complete application, the Board shall approve, modify or deny the application for a loan guarantee.

(c) Upon approval of a requested loan guarantee, the Chairman of the Board shall insure that the criteria and priority imposed by sections 18401 and 18402, have been fully met.

(d) Before a loan guarantee commitment is issued by the Board, the terms of a loan guarantee shall be set forth in a contract agreed to by the borrower, the lender, and the Board.

(e) In the event the Board disapproves any application, the Board will notify the applicant of the disapproval and the reasons for the disapproval. The notice shall include a statement of the applicant's right to appeal for reconsideration upon meeting the requirements set forth in the notice of disapproval. An applicant may appeal for reconsideration one time without paying a new application fee.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Section 46201, Public Resources Code.


Section 18410. Report of Fund Condition.

(a) Guaranteed loans shall be subject to audit by the Board at any time, as the Board deems warranted. These loans shall be subject to audit by the Board from the time the guarantee is issued until three years after the guarantee has expired.

(b) If, in the course of an audit, all accounting records of the loan expenditures are not available. the borrower will produce these records within sixty (60) days. If no ledgers exist, the borrower shall provide the Board with copies of source documents such as invoices, canceled checks, time sheets and payroll registers. It is the responsibility of the borrower to maintain proper accounting records.

(1) In the event that an audit reveals that the borrower used any of the loan proceeds for purposes other than the corrective action for which the loan guarantee was awarded, the borrower will be in violation of the loan guarantee agreement. Dependent upon the scope of the misuse of funds, the Board shall take action, such as, requiring refunds of misspent funds, filing civil lawsuits or criminal prosecution.

(c) Lenders shall verify in writing the condition of loans upon request by the Board. The verification shall consist of the terms of the loan, the repayment schedule, monthly payments, and any other information needed to monitor the financial condition of loans guaranteed.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Section 46205, Public Resources Code.


Section 18411. Default Claim Procedures.

The following default claim procedures shall apply in the event a guaranteed loan is in default:

(a) The lender shall notify the Board of the debtor's delinquency by mailed notice no later than the forty-fifth (45th) day of delinquency.

(b) The lender shall supply the Board with copies of the notes, security agreements, guarantees and a summary of the loan's history, including where the loan is domiciled, the payment record, and a copy of the lender's liquidation plan by the sixtieth (60th) day of delinquency.

(c) The lender may file with the Board its claim for payment under the terms of the guarantee as stipulated in section 18412, no earlier than the ninetieth (90th) day of delinquency. This claim shall be for the guaranteed portion of the outstanding principal balance of the loan plus the accrued unpaid interest on the guaranteed amount.

(d) Within forty-five (45) days from receipt of a claim for payment as a result of a delinquency, the Board shall notify the lender of its intent to purchase from the lender the guaranteed portion of the note for the amount specified in the claim.

(e) From the time a loan payment is first delinquent until the guaranteed portion of the note and the accrued interest is paid by the Board, the lender shall take actions necessary to secure and exercise its position as a creditor.

(f) On purchase of the guaranteed portion of a defaulted note by the Board, the lender shall assign the guaranteed portion of the note, security interest, and guarantees to the Board. The Board shall take the action it deems necessary and appropriate in order to secure payment from the debtor or the debtor's assets.

(g) In the event the Board obtains recovery on a defaulted note after its purchase from the lender, the proceeds of the recovery, minus the cost of recovery, shall be shared between the Board and lender in proportion to the exposure the Board and lender respectively bore to the defaulted note.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Sections 46350-46353, Public Resources Code.


Section 18412. Terms of Guarantee.

The Board shall be obligated to purchase no more than ninety percent (90%) of the outstanding principal balance and the accrued unpaid interest. In the event the lender requests the note be purchased, the Board shall pay the percentage of accrued interest guaranteed for the number of days the debtor has been delinquent, up to the day the Board notified the lender of its intent to purchase the note. Payment, however, shall be conditional upon the lender having met the conditions of the guarantee as stipulated in section 18413.

In the event that the lender has recovered part of the collateral or security interest prior to reimbursement by the Board, only the difference between the recovered money and the guaranteed portion of the principal and the interest may be claimed against the loan guarantee fund by the lender. If the lender or the Board obtains recovery on a defaulted note after purchase and reimbursement by the Board, the recovery shall be paid to the Board and the lender in proportion to the exposure the Board and the lender respectively bore to the defaulted note after the deduction of its collection costs.

No single claim shall, nor shall the aggregate of claims made by lenders, hereunder, exceed the amount allocated to the loan guarantee fund in the Account. The State shall not be liable or obligated in any way beyond the State money allocated to the loan guarantee fund in the Account.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Sections 46205 and 46350-46353, Public Resources Code.


Section 18413. Conditions of Guarantee.

The Board shall honor its guarantee to a lender if:

(a) The debtor is in default of the note, as defined in section 18400(c).

(b) The lender has met the conditions for the issuance of the guarantee and has observed the lender's reporting and collection requirements as specified in sections 18410 and 18411.

(c) The lender has complied with the terms of the loan guarantee contract.

Note:

Authority cited: Sections 46201 and 40502, Public Resources Code.
Reference: Sections 46350-46353, Public Resources Code.

Title 14 Home

Last updated: CalRecycle regulations are updated continuously as changes are made and approved by the Office of Administrative Law.
Regulations http://www.calrecycle.ca.gov/Laws/Regulations/
Legal Office: LegalSec@CalRecycle.ca.gov (916) 327-0089