• Environmental Law
  • Regulatory Agencies
    • Water Quality
    • Air Pollution
    • Hazardous Waste
      • Superfund
      • Employee Right-To-Know
      • Community Right-To-Know
    • Solid Waste
  • Special Categories of Environmental Concern
    • Infectious Waste
    • Asbestos
    • Storage Tanks
    • Electromagnetic Fields
    • Stray Voltage
  • Toxic Torts
  • Recycling
  • Real Estate Transactions
  • Resources

State and federal environmental laws can touch many areas of business. Some business owners have become so concerned over potential liability that environmental concerns can make or break deals. These laws regulate not only obvious concerns such as the handling of dangerous chemicals and the disposal of toxic waste, but also many less noticeable areas such as the building of new facilities and the rights of workers to know which chemicals are present in the workplace. Awareness of laws and regulations in this area can help a savvy business owner avoid substantial future costs and liability. This chapter identifies and describes some of the main environmental issues of concern to business owners.

Various governmental agencies are responsible for establishing and implementing environmental law in California. The California Environmental Protection Agency (CEPA) integrates most of the state's environmental programs, including the Air Resources Board, Integrated Waste Management Board, State Water Resources Control Board, and nine regional water quality boards. CEPA also has assumed responsibilities that once were part of other departments. Among these are the Department of Pesticide Regulation, Department of Toxic Substances Control, and the Office of Environmental Health Hazard Assessment. Other state agencies administer or assist CEPA in some areas of environmental regulation.

The California Resources Agency administers the California Environmental Quality Act (CEQA). CEQA requires that an environmental report be prepared for any major project, which states the pros and cons of that project. If it is determined that a project has no significant environmental effects and is not exempt from CEQA, then the lead agency must adopt a negative declaration to that effect. Permit applicants generally bear the costs of all environmental assessment activities.

The Office of Permit Assessment was created to establish a "one-stop" state permit clearinghouse. It has developed a consolidated project information form that is filled out by the applicant. This checklist enables the office to determine the necessary permits that must be applied for. The office also furnishes a handbook detailing much of the information needed to obtain various permits in California.

Water Quality

Businesses are responsible for the effect their operations may have on water quality. In California, administration of water quality programs is apportioned among nine regional water quality control boards that report to the CEPA. The nine boards are authorized to adopt regional water quality control plans, prescribe waste discharge requirements, and perform other water quality control functions subject to state review or approval. The California Water Resources Control Board formulates and adopts state policy for water quality control in accordance with federal and state water quality laws. Neither the Board nor any of its regional branches may infringe on the power of cities or counties in adopting more stringent regulations.

California's water resources belong to all Californians according to the state constitution. Any citizen may use water for beneficial purposes, but some water uses require permits. In deciding whether to issue a permit, the Board considers the needs of the project, as well as existing uses and environmental protection. Water use demands sometimes conflict with environmental interests. For example, the U.S. Environmental Protection Agency (EPA) and the Board are trying to protect marine life in San Francisco Bay and the San Joaquin Delta by limiting water supplies to urban and agricultural users in the southern half of the state. Other water issues in California include protecting the ocean and the coastline.

National Pollution Discharge Elimination System (NPDES) permits are required for anyone who intends to emit any pollutant into state surface waters, including noncontact cooling water and air-conditioning or heat-pump water. If the discharge goes to a public sewer, NPDES permits are not required, except for certain types of industries. Federal delegation of the NPDES permit program both for firms and for federal facilities rests with the Board rather than the regional water quality control boards, but facility operators seeking such permits should submit their applications to the appropriate regional board.

Air Pollution

Laws regulating air pollution are designed to limit industry emissions of airborne pollutants that may be harmful to people, plants, and animals. In California, the statewide custodian of air quality is the California Air Resources Board (CARB). The CARB may propose regulations, but the air quality management districts have discretion in applying the rules based on the severity of the problem and other local circumstances. The CARB may override district decisions but its basic role is to review the districts' plans and coordinate them with the state implementation plan. Some federal standards are delegated to individual control districts rather than the CARB. Jurisdiction questions can be answered by the CARB or the local district office.

California began controlling air pollution long before other states. In 1960 the Motor Vehicle Pollution Control Board began regulating tailpipe emissions. Rather than preempt California's regulations, the EPA gave the state the right to adopt its own automotive regulations provided that they were as stringent as the national standards.

California has an air toxics reduction program managed by the CARB. Toxic substances emitted to the atmosphere are subject to regulation. Firms that produce toxic substances must inventory them and submit reports to their local air pollution control districts. These facilities also must send risk assessments to the Department of Health Services. If the risks are deemed significant, all persons exposed to the risk must be notified.

Emission of pollutants can occur either directly or indirectly. Indirect sources include roads and the emissions of heavy traffic drawn to certain businesses locations, such as hotels and shopping centers. Direct emissions are those that come from buildings, machines, or processes that emit pollutants. A person who owns or operates a facility that emits pollutants must comply with all applicable air pollution controls, which often involves getting a permit. In most cases, at least 180 days are needed for processing a permit application.

Some rules apply even though the business does not have direct air emissions that require permits. Businesses are liable for air pollutants such as odors, dust that may be carried by the winds as a result of business operations, and smoke caused by open burning. Businesses must notify the local air pollution control district board immediately of any releases to the air that might endanger human health, damage property, or create a public nuisance, and the business must take any steps necessary to prevent such releases. Businesses that should be particularly aware of air quality rules include those that use boilers, incinerators, generators, and solvent-borne coatings, as well as grain elevators, concrete plants, and sand and gravel and building demolition operations.

Indoor air quality has received more emphasis in recent years. "Sick-building syndrome" is more likely to occur in buildings constructed between 1973 and 1990, due in part to inadequate ventilation. Contributors to indoor air pollution include formaldehyde in particle board, plywood, furniture, and carpets; benzene in synthetic fibers, plastics and cleaning supplies; mercury and lead in paint; asbestos; dust; pollen; mold; and tobacco smoke. Like many states, California has established rules governing smoking in the workplace. Generally, smoking is prohibited in the workplace except in designated areas. Asbestos is discussed in more detail later in this chapter.

Hazardous Waste

Hazardous waste is waste in any form that may cause illness or death or is otherwise dangerous to human health. A waste is said to exhibit a hazardous characteristic if it is flammable, oxidizable, corrosive, reactive, or toxic. California law affects firms storing less than 220 pounds or 27 gallons of waste on-site and all firms generating waste oil, asbestos, or polychlorinated biphenyls. The Federal Resource Conservation and Recovery Act requires that the waste be disposed of within 90 days once those threshholds have been exceeded.

Most firms in the state choose to dispose of their wastes through licensed haulers, which transport wastes to permitted storage, treatment, or disposal facilities. There are hazardous waste incinerators and recycling facilities to which waste also may be hauled. Management of hazardous waste in California is carried out by the Department of Toxic Substances Control.

In addition to being the lead agency for hazardous waste management, including site mitigation, the Department develops criteria for identifying hazardous waste, and produces a list of hazardous wastes that are economically and technologically feasible to recycle. Businesses producing and disposing of hazardous waste are required to notify the Department and comply with its regulations.

A hazardous waste generator is required to have an EPA identification number and a license (renewable annually), and must submit an annual disclosure statement. Transporters of hazardous waste also must have EPA identification numbers and be registered to haul hazardous waste within the state. All generators must have emergency coordinators on call for disasters; large quantity generators are subject to additional emergency requirements. All generators must post emergency notification information and locations of emergency control equipment and alarms. If a spill occurs, the emergency coordinator or person in control must contain and clean up the spill, and must call the National Response Center and the California Emergency Planning and Response Commission.

Superfund

Superfund laws were enacted to identify and clean up sites that have been contaminated by hazardous substances. States, as well as the federal government, have enacted superfund laws. Superfund laws impose liability on those responsible for releases of hazardous substances, pollutants, or contaminants. The liability is "strict," meaning that it does not matter if the company was negligent, merely that it was the cause of the contamination. Further, this liability can be enacted retroactively so that the persons responsible can be liable even though the contamination occurred before the law was enacted. Penalties for noncompliance with federal and state statutes in this area are severe.

Generally, persons who owned or operated a facility when it was contaminated, or who transported or disposed of the contaminant can be held responsible. However, under the "innocent landowner exclusion," an owner of contaminated property may not be liable if he or she did not know or had no reason to know of the contamination and was in no way associated with the contamination. In addition to the persons named by statute as "responsible" for the contamination, courts have extended liability to those who held an interest in any corporation responsible for the contamination and who had the power to prevent the damage from occurring. Therefore, corporate officers, directors, and even shareholders can be held personally liable for the cleanup. In addition, parent and successor corporations also have been held liable under Superfund. An employee may be liable only if he or she knew the substance was hazardous and acted negligently, but an employer is responsible regardless of the degree of care exercised by an employee. Responsible persons may have to pay the costs incurred by the state to clean up and remove the damage or contamination. The only defense to the Superfund laws recognized by the courts is that a release of contaminants was caused by an act of God, vandalism, war, or a third party.

Once a contaminated site has been discovered, an extensive system of assessment, cleanup, and monitoring begins. Researchers must determine the total scope and effect of the contamination as well as the best way to conduct the cleanup. Also, monitoring of the site may go on for many years after the initial cleanup has been completed.

Employee Right-To-Know

Under various California laws and regulations, employers are required to evaluate their workplaces for hazardous substances and provide information and training to workers about the substances they may encounter. Written information on the hazards must be readily available to staff, and labeling of substances must conform to certain requirements. The standards established under these acts include lists of hazardous substances to assist employers in evaluating their work sites.

Community Right-To-Know

Under federal law, businesses that manufacture, store, or use hazardous substances must report their inventories to local emergency-planning agencies to help these agencies in the event of an unplanned release, fire, or similar disaster. In California, the agency that collects the information is the California Office of Emergency Services.

Solid Waste

Solid waste is defined as garbage, refuse, sludge, and other waste materials resulting from industrial activities, including mining and agricultural operations. Certain wastes are specifically excluded from the definition because they are covered by different regulations. These include hazardous waste, earthen fill, and sewage sludge.

Solid waste disposal facilities, including landfills, transfer-processing stations, and waste to energy facilities, must obtain permits from and are regulated by local enforcement agencies, under the overall coordination of the California Integrated Waste Management Board. These local enforcement agencies may be counties or cities, or in certain instances the Board itself. The permit describes the operator's rights, which may vary depending on the site, the type of materials disposed of, and the discretion of the local agencies and the Board. Other agencies that may become involved in waste disposal decisions include the air pollution control district, the Coastal Commission, the Department of Fish and Game, and the regional water quality control board. Cities may impose tougher standards as long as they do not conflict with any rules or acts of other state agencies.

California law prohibits placing tires, lead-acid batteries, used motor oil and other specified items in landfills. Often the rules regulating what can be placed in the trash are more strict for businesses than for households.

Some categories of pollutants or environmental nuisance are treated separately under the law because of their special characteristics or because political pressures force the government to treat them differently than other pollutants.

Infectious Waste

Infectious waste includes laboratory waste, blood and blood products, certain body fluids, research animal waste, and sharp instruments, such as needles and scalpel blades. California's infectious waste control program is carried out by the Environmental Health Division of the California Department Health Services. Under the Medical Waste Management Act of 1990 medical waste is treated separately from the overall hazardous waste regulatory system and has handling requirements more appropriate to its level of risk. The Department's rules include comprehensive requirements for the production, storage, transfer, and disposal of such wastes.

Asbestos

Asbestos is listed as a hazardous substance covered by the Superfund Act. Different federal and state agencies regulate asbestos outside of the workplace. The EPA regulates the reporting of commercial and industrial uses of asbestos and the control and abatement of asbestos-containing materials in schools. Emissions of asbestos into the air are regulated under the federal Clean Air Act and by California air pollution control standards. Various federal and state laws regulate discharge of asbestos into waters.

Asbestos exposure in the workplace is governed by the federal Occupational Safety and Health Administration (OSHA) and is enforced by the California Occupational Safety and Health Division of the Industrial Relations Department. In most instances, state laws mirror federal laws, but they impose stricter penalties on violators and require greater employee access to information.

The basic legal requirement for all areas of business (except construction) is to maintain a workplace that is free of asbestos hazards. If the concentration of airborne asbestos fibers rises above a certain level (the "threshold level"), a business must begin air monitoring and medical surveillance of employees. If the levels rise above specified maximum levels ("permissible exposure limits"), businesses must provide employees with protective clothing and equipment, such as respirators, and make sure that they are used. The protective gear must be removed only in designated changing rooms and stored in closed containers to prevent spreading asbestos in the air. The gear must be cleaned weekly, taking care not to release asbestos.

Requirements for construction, including alteration, repair, painting, and decorating, are somewhat different from general industry standards. The strictest rules apply to asbestos abatement activities, while short-term, small-scale activities and construction operations in which asbestos does not exceed a threshold level for more than 30 days per year are exempt from some requirements. Medical surveillance is required less often under the construction standard than under the general industry standard. Demolition of buildings, except for apartment buildings with fewer than four units, must be reported to the EPA at least ten days prior to the start of asbestos removal or, if there is no asbestos involved, at least ten days prior to demolition.

Under both the general industry and construction standards, employers must institute training programs for employees who may be exposed to asbestos concentrations above a threshold level. Violations of asbestos standards may result in monetary and criminal penalties.

Storage Tanks

Abandoned or leaking storage tanks are common sources of water and ground pollution. Many tanks that once held toxic substances were buried, poorly maintained, and eventually forgotten. Years after they were last used, they continue to pollute the soil and water near them and can be major liabilities for property owners. Federal and state storage tank regulations are intended to prevent the release of substances that may be hazardous to human health and the environment. The regulations also contain provisions for the cleanup of leaks and damage caused by these storage tanks.

Following an inventory and one-time registration of underground storage tanks, the California Water Resources Control Board established a permitting process handled by local government agencies, along with a site cleanup and enforcement program. Oversight of the cleanup is handled by the regional boards and by local agencies.

Owners are financially responsible and encouraged to clean up releases, leaks, and other occurrences. A fund has been set up to assist with the cleanup. Underground tank owners are assessed a storage fee based on the number of gallons of their tanks, which helps defray some of the fund's costs. This program is administered by the Division of Clean Water Programs of the Water Resources Control Board.

Electromagnetic Fields

Electrical and magnetic fields surround all electrical conductors, such as radio, television, and microwave transmitters; transmission lines; and personal computers. Building materials shield electrical fields, but magnetic fields pass easily through almost anything, including buildings and the human body. Some research studies suggest that electromagnetic fields (EMFs) may play a role in diseases such as cancer and Alzheimer's disease. Concern over possible deleterious health effects has resulted in job-related litigation involving claims of detrimental on-the-job exposure to EMFs. Neither OSHA nor the state currently regulate EMF exposure in the workplace.

Large commercial buildings often have transformer and switching rooms that can generate extremely strong electromagnetic fields, and office wiring can produce high fields. Computer monitors and copy machines are two common pieces of office equipment that produce intense magnetic fields. The fields projected by a computer monitor are much stronger at the back and sides of the monitor than at the front. Offices can be designed to minimize workers' exposure to the sides and backs of other workers' monitors, and thus, their exposure to EMFs.

Stray Voltage

Stray voltage is a phenomenon that has become an issue in dairy farming. Under certain circumstances, electrical usage and distribution lines on a farm can result in low voltage electrical current that flows through cows, affecting the animals in various ways and often resulting in decreased milk production. Dairy farmers have successfully sued electrical utilities for their responsibility in the production loss. In many cases, the source of the problem is incorrect or improper wiring, faulty electrical equipment, improper grounding, dirt, moisture, or bad connections.

A "toxic tort" is a personal injury or property damage caused by exposure to a toxic substance. The legal theory of "strict liability" often arises in toxic torts. Negligence, trespass, and nuisance are other legal theories that may apply to environmentally-caused injuries and damage. A person who keeps a potentially dangerous substance on his or her land may be held liable under any of the above theories regardless of whether the escape occurred through negligence.

Recycling in California is governed by numerous state, county and municipal regulations. Recently, municipalities have dramatically increased their involvement in recycling by directly entering the market as recyclers, by contracting out for recycling services, and by regulating recycling businesses more heavily.

The state has an overall waste reduction law requiring that 25 percent of municipal waste be diverted from landfills by 1995 and 50 percent by the year 2000. The Used Oil Recycling Act requires that containers be labeled with recycling information while the Beverage Container Act has as its goal the recycling of 55 percent of aluminum and glass by 2005. California law also encourages state agencies to purchase recycled materials and requires schools and local agencies to develop recycling programs.

Under California Law, a real estate broker or agent has a duty to disclose to the purchaser material facts such as environmental hazards and other factors that would affect the valuation of the property. He or she must use a standard of care that a reasonably prudent real estate agent would exercise in performing a search of the property. However, the buyer also has a duty to inspect the premises. There is a two-year period in which the buyer can bring any claims with regards to this matter.

Often, an ounce of prevention is worth a pound of cure when it comes to environmental problems stemming from real estate deals. It can be very wise to have a thorough site investigation performed before purchasing any property that may be contaminated or that might contain an underground storage tank. An experienced environmental law attorney can advise on how best to protect one's business in routine real estate transactions.

There are numerous agencies in California responsible for various aspects of environmental law and protection, including:

• California Environmental Protection Agency, Office of the Secretary, 555 Capitol Mall #525, Sacramento CA 95814, (916) 445-3846; Fax: (916) 445-6401; Help Desk: (916) 327-1848.

• California Resources Agency, 1416 Ninth Street #1311, Sacramento CA 95814, (916) 653-5656.

• California Office of Permit Assistance, Governor's Office of Planning and Research, 801 K Street, Sacramento CA 95814, (916) 322-4245.

• California Pollution Control Financing Authority, 915 Capitol Mall #466, P.O. Box 942809, Sacramento CA 94209-0001, (916) 654-5610.

• California Integrated Waste Management Board, Department of Toxic Substances Control, 1020 Ninth Street #300, Sacramento CA 95814, (916) 324-2430.

• California Coastal Commission, 45 Fremont Street #2000, San Francisco CA 94105, (415) 904-5200.

• San Francisco Bay Conservation and Development Commission, 30 Van Ness Avenue #2011, San Francisco CA 94102, (415) 557-3686.

• Environmental Program Coordinator, Department of Conservation, 1416 Ninth Street, Sacramento CA 95814, (916) 322-5873 (oil, gas, or geothermal well drilling).

The California Business Environmental Assistance Center, (800) 352-5225, is a resource and referral clearinghouse for small business owners.

If a spill occurs at a hazardous waste generating site, the National Response Center ((800) 424-8802) and the California Emergency Planning and Response Commission must be called. The Commission is located at the California Office of Emergency Services, 2800 Meadowview Road, Sacramento CA 95832, (916) 262-1816, (800) 852-7550 (in-state, 24-hour number).

Air quality questions can be directed to the California Air Resources Board, P.O. Box 2815, 2020 L Street, Sacramento CA 95814, (916) 322-2990 (Public Information Office). There also are district air pollution control agencies located throughout the state that are responsible for applying the regulations of the Air Resources Board. Look for air pollution control district (APCD) or air quality management district (AQMD) in the local phone book.

California Water Resources Control Board, P.O. Box 100, 901 P Street, Sacramento CA 95814, (916) 657-0941. There are nine regional water quality control boards, with offices in Santa Rosa, Oakland, San Luis Obispo, Monterey Park, Sacramento, Fresno, Redding, South Lake Tahoe, Victorville, Palm Desert, Riverside and San Diego.

Inquiries for "The California Permit Handbook," order number 7540-931-1026-8, should be directed to Department of General Services, Publications Section, 4675 Watt Avenue P.O. Box 1015, North Highland, CA 95660, (916) 574-2200.