During an inspection or testing procedure, if a violation is found, the business is typically given a notification that a violation has been observed. This violation notice then triggers a procedure where the source is assessed some form of fine or other penalty. The primary purpose of a violation and subsequent penalty is preventative in that it is hoped that fear of a penalty will help to insure that a source complies with air pollution control regulations. A secondary purpose of the process is to insure that a business does not gain an unfair advantage over other similar businesses by allowing unacceptable levels of air pollution. In California, the regulations are so comprehensive that it is virtually certain that some violations will be found in an extensive facility such as a refinery. Leaks found with a LDAR process are usually categorized by intensity with specific repair times allowed of a few days for a minor leak to perhaps requiring a shutdown of the system for an intense leak of perhaps 20 times the standard.

Many violations have a specific associated penalty such as those associated with a parking violation or a speeding violation in the case of traffic management. Unfortunately, there is no simple way to set penalties for air quality violations that fulfill the purpose of the penalty. Thus, the penalties assessed against sources tend to be on a case-by-case basis. The downside of this case-by-case process is the fact that penalties can be unfairly assessed and care must be taken to fairly balance the penalty to the situation. Most programs establish daily maximum fines to provide a basis around which to determine penalties. The U.S. EPA has a specific formula related to penalties to insure that a source does not gain an economic advantage by polluting.

Any legal process must have some form of “due process.” That is to say, there must be a process where the person accused of a violation has an opportunity to defend their circumstance. In the case of the SCAQMD, a hearing board has been established that acts like a court to review violations. The business accused of a violation typically negotiates with the SCAQMD agency legal staff concerning the violation. If the business and the agency legal staff can come to agreement, then the business pays the agreed to penalty and the case is ended. If the legal staff and the business cannot agree, then the matter goes to the hearing board where it is adjudicated. The business can appeal the decision of the hearing board to court. In the case of the U.S.EPA the only option from a penalty is to go directly to court. Most countries use some form of this approach.

The size of the penalty must consider a range of issues:

1. What is the size of the emissions (emissions per hour and length of time)?

2. How was the violation determined (by an outside party or did the emitter self-report)?

3. How many similar violations have occurred in recent years?

4. Has the source been cooperative in resolving the problem?

5. Was there an economic gain by the violator in releasing the emissions?

6. How much penalty is needed to get the violators attention (can be a low amount in the case of a small business)?

7. How have other violators been penalized in similar situations?

It is possible to attach actual penalty amounts or factors to the first six considerations above, but it is not an easy test to set or apply.

Penalties do not always have to be monetary. It has become common practice to agree to penalties that involve doing something to reduce air pollution for the region, providing an education about air pollution, reducing emissions at their factory below levels required by existing regulations. A combination of a monetary and non-monetary penalty is also often used. It can be easier to come to agreement with a business if one of these latter approaches are also used.