Major Increases to EPA Penalty Fines
Written by: Joe Mangiardi, NES, Inc.
EPA penalty fines have recently increased to new maximum levels.
EPA Penalty Fines Increase
The Environmental Protection Agency (EPA) has availed itself of an opportunity provided by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act) to raise, quite significantly at times, the maximum daily fines for violations under its administrative reach. The 2015 Act calls for an immediate ramping up of penalties to account for inflation, with further adjustments to be made annually thereafter starting January 15, 2017. Published on July 1, 2016 and becoming effective August 1, 2016, the EPA has released the 2016 Civil Monetary Penalty Inflation Adjustment Rule (2016 Rule) to describe and explain the dramatic raising of maximum allowable fines. As part of the explanatory element to the 2016 Rule, the EPA invokes its philosophy that environmental protection is better maintained through maximal violation deterrence—a driving force explicitly cited by the 2015 Act itself.
Catch-Up Adjustments Explain the Math
The main authority and impetus for such significant maximum penalty increases comes from the stipulation in the 2015 Act that agencies responsible for determining civil monetary penalties must apply an initial “catch-up” adjustment of up to 250% of the highest prior established rate (excluding prior inflationary adjustments following the Inflation Adjustment Act). What this typically will mean is that the older the penalty policy the higher the penalty rate increase, up to the 2.5 multiplier cap—though the EPA reserves some room for judgment in various cases of application. Some noteworthy examples of these hikes in daily penalties include: the Resource Conservation and Recovery Act (RCRA) and the Clean Air Act (CAA) each see their statutory maximums jump from $37,500 to $93,750; the Clean Water Act (CWA) changes from $25,000 to $51,570; the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) increases from $25,000 to $53,907 (penalties associated with various subparagraphs of the same category of the U.S. Code were adjusted at differing rates; for the official table containing these changes, please refer to the 2016 Rule official document).
Further, penalties under the Occupational Safety and Health Act and the Social Security Act are now subject to the 2015 Act’s catch-up and annual inflation increase program, despite having been previously excluded by an amendment to the Inflation Adjustment Act in 1996. It should be noted that while the 2015 Act does not require the enforcement of the newly established penalty maximums, the mandate does often result in an increase in minimums.
EPA penalty fines can now cost significantly more than previously for businesses not in compliance with regulations.
Retroactive EPA Penalty Timeline
Though becoming effective August 1, 2016, the maximum penalties described in the 2016 Rule range back to November 2, 2015, reflecting the date of the signing of the 2015 Act. Thereby, infractions having occurred on or before November 2, 2015 are to have penalties enforced pursuant to guidelines delineated in the EPA’s 2013 memorandum, while those occurring entirely after this date are to be calculated using the newly determined multiplier unique to the offense, located in the 2016 Rule document and derived from the 2015 Act. Infractions occurring both before and after November 2, 2016 are to be enforced proportionally, on a day by day basis, with regard to which penalty rate applies.
Interested in ensuring that your business is not in violation of current environmental rules and regulations? View information about NES Environmental Consulting Services here or contact NES at 916-353-2360 / 1.800.NES.ADVISE (1.800.637.2384) or email@example.com.