The U.S. Environmental Protection Agency (EPA) published its “Hazardous Waste Generator Improvements Rule” on November 28, 2016. (81 Fed. Reg. 85732–85829.) While some of the changes will be welcomed by hazardous waste generators who accumulate wastes, one particular change almost certainly will not. It is found in Section 262.10(g)(2) of the rule, which states:

A generator’s noncompliance with a condition for exemption in this part is not subject to penalty or injunctive relief under section 3008 of RCRA as a violation of a 40 CFR part 262 condition for exemption. Noncompliance by any generator with an applicable condition for exemption from storage permit and operations requirements means that the facility is a storage facility operating without an exemption from the permit, interim status, and operations requirements in 40 CFR parts 124, 264 through 267, and 270 of this chapter, and the notification requirements of section 3010 of RCRA. Without an exemption, any violations of such storage requirements are subject to penalty and injunctive relief under section 3008 of RCRA.

In making noncompliance with any condition for exemption sufficient grounds for loss of exempt status and the resultant exposure to penalties, U.S. EPA has created a major change to the regulatory framework. “Conditions for exemption,” a term newly defined in Section 262.1 of the rule, broadly encompasses numerous, detailed requirements that generators accumulating wastes must satisfy if they wish to be exempt from permitting (or interim status) and other requirements. To be exempt under the prior rule and practice, generators only needed to meet the duration limit (for example, no more than 180 days, for small quantity generators) and quantity limit (for example, no more than 13,200 pounds, for small quantity generators). In the new rule, U.S. EPA has gone out of its way to make clear that the failure to meet any other exemption condition could cause an accumulating generator to lose its exemption and be subjected to penalties. By way of example, exemption conditions for small quantity generators include the management and labeling of containers; see Section 262.16. Thus, a small quantity generator could lose its exemption if a container holding hazardous waste is not always closed during accumulation (§ 262.16(b)(2)(iii)) or the date upon which each period of accumulation begins is not “clearly visible” for inspection (§ 262.16(b)(6)(C)). The risk that noncompliance with such minor and less manageable conditions will result in penalties is of legitimate concern to affected generators.

U.S. EPA concedes in the preamble to the new rule that industry stakeholders “expressed great concern” the proposed rule changes “represented a major shift in the Agency’s enforcement paradigm to a draconian system of enforcement that would lead to an excessive number of violations and penalties.” 81 Fed. Reg. 85746. But U.S. EPA rejected such vociferous complaints, arguing that the rule changes merely clarify its “longstanding position on how the RCRA generator program works” and “do not constitute a substantive change to this long-standing position.” Id., at 85746-85747. But it is telling that U.S. EPA goes out of its way in the preamble to palliate generators affected by the new rule by stating that the rule “does not mandate charging and penalization of every violation of regulatory requirements that legally may result when a generator loses its exemption from the storage permit and operations requirements, when, for example, such action would be disproportionate to the seriousness of the generator’s violations.” Id. at 85747. That U.S. EPA felt the need to add such a mollifying statement could well be perceived as a concession by U.S. EPA that the rule changes really do effectuate the major enforcement paradigm shift perceived by industry stakeholders.