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sr-051380-13dCA:SSS:se Council Meeting 05-13-80 Santa ri7onica, California STAFF REPORT To: Mayor and City Council From: City Atttornev Subject; Proposed Toxic Chemicals and. Hazardous Wastes Disclosure Law INTRODUCTION This report analyzes a proposed ordinance that would require persons doing business in Santa Monica to disclose to the City certain toxic chemicals and hazardous wastes stored or used by them in the conduct of their businesses. LEGAL ANALYSIS 1. LEGALITY OF THE PROPOSED ORDINANCE The proposed ordinance is clearly within the City°s ~~ ~ ~ ~~~' powers to regulate public health and safety. The protection of public health and the local environment is deemed to be a "municipal affair" and of ".,peculiar-local concern" for. purposes of_ ''determining whether a local law is preempted by State or Federal law. Since there is no direct conflict with any State or Federal law, nor disruption of any uniform State or' Federal regulatory scheme, we conclude that the proposers ordinance is not preempted. It is believed this con- clusion will also apply to the new E. P. A. regulations, to be published this week and to pending State legislation. i~7h;le the ordinance may have some marginal impact on commerce,. it does not discriminate against or substantially burden interstate commerce, and thus does net violate the Commerce Clause. The disclosure requirements are reasonably adapted to achiwe the ends of the ordinance - - to allow the City government and ~3~ the public to have information concerning potentially hazardous substances. There is a rational basis for requiring disclosure. The threat to public health from toxic chemicals br hazar_dous wastes is real, there is some probability of the recurrence of an incident of chemical pollution, and the consequences of an undetected incident --are-severe. The require- ment of disclosure by businesses but not by other residents is a rational classification, and is not invidiously discrim- inatory. Similarly, the classifications suggested in the alternatives mentioned in the City Staff Report are also rational. The burden imposed upon persons subject to the law does not appear "unreasonable" as a matter°of :law. Thus;' we conclude that the proposed'ordnance'does not 'violate'. the con- stitutional guarantee of-Equal Protection of Law. The City may lawfully impose a fee upon those subject to disclosure to cover the cost of processing the information and inspection of business establishments to insure compliance with the law. It is inappropriate to consider the costs of prosecution in computing the fee; such costs should be borne by the public generally, and not imposed upon the target population. It is not believed that the proposed ordinance will require additional personnel in the City Attorney's office. It is proper to impose civil or criminal penalties for a violation of the proposed ordinance. A?hile Section 1200 of the ?~Tunicipal Code makes any violation of the Code a misdemeanor, it is appropriate to specify misdemeanor penalties in the ordinance itself. The persons who enforce the ordinance should be specifically given the power to request inspection warrants -?.- in those cases where entry is refused, and the power to issue citations to violators rather than effecting custodial arrests. 2. SECTION-BY-SEC`_J'ION ANALYSIS, WITH ALTERNATIVES Section 5300 of the .ordinance contains legislative findings and a statement of purpose. The Council should review the in- dividual findings to determine if it is in accord with them. Section 5301 defines those toxic chemicals and hazardous wastes that are subject to disclosure requirements. '?`he proposed draft requires disclosure of chemicals and wastes regulated by the State Department of Health and the iJnited States Environmental Protection Agency. As indicated in the City Staff Report, the. E. P. A. is promulgating new toxic chemical and waste regulations; alternatively, it would. be appropriate to require local disclosure of the chemcials regulated in this new law. Section 5301 requires the Director of the Department of General Services to maintain and update a list of chemicals and wastes subject to disclosure, and to make the list available to the public.. This requirement is legally unobjectionable. Section 5302 of the propsed ordinance sets forth its disclosure requirements. It provides that within ninety (90) days of the adoration of the ordinance, any person who handles, stores, uses, processes or disposes of any toxic chemicals or -3- hazardous wastes in the conduct of any business in the City to identify such chemicals and wastes on a form prepared by the Director of General Services. Thus, the disclosure requirement applies to all businesses and does not apply to private residential uses. There are numerous exemptions and qualifications that may be made to this section. The Council may exempt certain types of businesses, such as apartment houses or retail rises, from dsolosure requirements. It`may establish-a minimuM quantity of chemicals as a threshold for disclosure. It may exempt particular chemicals or common substances containing toxic chemicals from disclosure. Additional exemptions or qualifications ma_y be set forth in the main disclosure section:bf.the ordinance, or .may be stated'in a separate section. Section 5303 concerns compliance. Holders of existing business licenses must complete disclosure within ninety (90} days of the adoption of the ordinance. Applicants for new business licenses must complete a disclosure form before the license will be issued. The ordinance does not call for revocation of existing business licenses; however, business licenses shall not be renewed if the business has not filed a disclosure form. Persons subject to the ordinance must amend their disclosure forms with thirty (30) days of the date of any changed uses. Thus, if a business fails to disclose its chemicals and wastes, the City may refuse to issue a business license and, presumably, enjoin the operation of the business until disclosure is completed and a license issued. The ordinance is silent as to -4- what will occur in the event of incomplete or inaccurate disclosure. The City would presumably argue that incomplete or inaccurate disclosure is equivalent to no disclosure, and attempt to revoke existing business licenses through the administrative mechanism of_ the License Review Board. There are numerous variations of problems that might occur if existing business licensees do not fully comply with the disclosure law. Primary among these is the question whether a person has a right to continue in business notwithstanding violation of a law that does not directly regulate the conduct of that business. These questions might ultimately have to be resolved in the courts. Section 5304 of the ordinance states that any person may inspect and copy any toxic chemicals and hazardous wastes disclosure form on file with the City. This Section should be amended to incorporate the provisions of the Puhlic Records Act, Government Code Section 6250, et seq. This act contains specific exemptions to public disclosure requirements, and incorporates common law privileges against the disclosure of particular information. Of primary importance are the dis- closure of those chemicals which form the basis of trade secrets, which are exempt by common law from disclosure, and those chemicals which may not_ be disclosed for reasons of national security, such as materials used in defense contracts. It seems appropriate that the person claiming the privilege of non- disclosure of a substance for. trade secret or national security reasons should bear the burden of proof; the ordinance should specifically -5- address this problem, and should contain a specific procedure for determining the validity of such claims. with respect to national security, there are several acts. of Congress that prohibit any disclosure of certain classified information; to the extent our ordinance .requires such disclosure, it_ raay be preempted by Federal Law. This question is of considera~le complexity,. and requires further research. It is unknown whether this problem would in fact arise in the City of. Santa nq.onica. with. the exception.. of the areas mentioned above, the disclosure of toxic chemicals and wastes does not appear to intrude upon any protected area of privacy; the information is appropriately required to be disclt~sed to the public. Section 5305 makes a violation of the ordinance a misdemeanor. As previously indicated, this is appropriate. 'Phe ordinance does not deal with the question of who conducts inspections or with the related questions of inspection warrants or citations. G^?hile the City may contract with another government entity to perform police power services such as health inspection, it may not lawfully delegate these duties to a private entity. Thus, inspections would have to be carried out by City staff, or by such governmental entities as the State, the County, or the City of Los Angeles. Similarly, only appropriate govern.=nental officials may be given the authority to write citations fqr_violation of the ordinance. (Any citizen may effect a "citizens's arrest".) -6- Civil penalties are not mentioned in the proposed ordinance. It would be appropriate, and perhaps effective, to impose an civil fine for each day of non-compliance. This would require an admininstrative proceeding. 3. DUE PRZ)CESS OF LA?tiT AND DAPQAGE LIABILITY The ordinance as drafted does not require exemption procedures, as it applies to all persons holding a`,buSiness license and using specified chemicals. If a person is believed to be using a chemical requiring disclosure, and does not disclose, an action to revoke the business license through existing- administrative procedures would he appropriate. If the ordinance is drafted to contain exemptions, a procedure for determining exemptions should be established. This could involve an existing administrative agency such as the License Review Board, or a procedure specially written into the ordinance. A business license is a property right that cannot'be revoked, or in the case of a renewal, denied, without notice of the adverse action and a fair opportunity to be heard. The nature and scope of the hearing required depends on the circumstances; cities are given fairly wide latitude in designing fair hearing procedures. If the City wrongfully denies a persan of a property right such as a business license, or wrongfully discloses a trade secret, it may be liable in damages for the value of the right destroyed. The City may also experience liability under the Federal Civil Rights Act for damages occasioned by denial by due process of law. -7- It is conceivable that, if_ an incident involving an undisclosed toxic chemical occurs and the City has failed to inspect and require disclosure, some liability for ensuing damage could be attributed to the City. CONCLUSSON A chemical disclosure law is a valid exercise of the police power. Enforcement presents some problems, particualrly respecting the effect of the Iaw on existing business licenses and on trade secrets. _g _