Civil Monetary Penalty Inflation Adjustment

<RULE> ENVIRONMENTAL PROTECTION AGENCY <CFR>40 CFR Part 19</CFR> <DEPDOC>[FRL-5906.9-01-OECA]</DEPDOC> <SUBJECT>Civil Monetary Penalty Inflation Adjustment</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Environmental Protection Agency (EPA). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Environmental Protection Agency (EPA) is promulgating this final rule to adjust the level of the maximum and minimum statutory civil monetary penalty amounts under the statutes the EPA administers. This action is mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended through the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (“the 2015 Act”). The 2015 Act prescribes a formula for annually adjusting the statutory maximum and minimum amount of civil monetary penalties to reflect inflation, maintain the deterrent effect of statutory civil monetary penalties, and promote compliance with the law. The rule does not establish specific civil monetary penalty amounts the EPA may seek in particular cases. The EPA calculates those amounts, as appropriate, based on the facts of particular cases and applicable agency penalty policies. The EPA's civil penalty policies, which guide enforcement personnel on how to exercise the EPA's discretion within statutory penalty authorities, take into account a number of fact-specific considerations, <E T="03">e.g.,</E> the seriousness of the violation, the violator's good faith efforts to comply, any economic benefit gained by the violator as a result of its noncompliance, and the violator's ability to pay. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This final rule is effective January 8, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> David Smith-Watts, Office of Civil Enforcement, Office of Enforcement and Compliance Assurance, Mail Code 2241A, Environmental Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460, telephone number: (202) 564-4083; <E T="03">smith-watts.david@epa.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> The 2015 Act  <SU>1</SU> <FTREF/> requires each Federal agency to adjust the statutory civil monetary penalties under the laws implemented by that agency annually, to account for inflation. Section 4 of the 2015 Act requires each Federal agency to publish these adjustments by January 15 of each year. The purpose of the 2015 Act is to maintain the deterrent effect of civil monetary penalties by translating originally enacted statutory civil penalty amounts to today's dollars and rounding statutory civil penalties to the nearest dollar. <FTNT> <SU>1</SU>  The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Section 701 of Pub. L.114-74) was signed into law on November 2, 2015, and amended the Federal Civil Penalties Inflation Adjustment Act of 1990. </FTNT> Since January 15, 2017, the EPA has made eight annual adjustments: (1) on January 12, 2017, effective on January 15, 2017 (82 FR 3633); (2) on January 10, 2018, effective on January 15, 2018 (83 FR 1190); (3) on February 6, 2019, effective the same day (84 FR 2056), with a subsequent correction on February 25, 2019 (84 FR 5955); (4) on January 13, 2020, effective the same day (85 FR 1751); (5) on December 23, 2020, effective the same day (85 FR 83818); (6) on January 12, 2022, effective the same day (87 FR 1676); (7) on January 6, 2023, effective the same day (88 FR 986); and (8) on December 27, 2023, effective the same day (88 FR 89309). This rule implements the ninth annual adjustment mandated by the 2015 Act. The 2015 Act provides a formula for calculating the adjustments. Each statutory maximum and minimum  <SU>2</SU> <FTREF/> civil monetary penalty, as currently adjusted, is multiplied by the cost-of-living adjustment multiplier, which is the percentage by which the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October 2024 exceeds the CPI-U for the month of October 2023. <SU>3</SU> <FTREF/> <FTNT> <SU>2</SU>  Under Section 3(2)(A) of the 2015 Act, a “ ‘civil monetary penalty’ [is] any penalty, fine or other sanction that- is for a specific monetary amount as provided by Federal law; or has a maximum amount provided for by Federal law.” EPA-administered statutes generally refer to statutory maximum penalties, with the following exceptions: Section 311(b)(7)(D) of the Clean Water Act, 33 U.S.C. 1321(b)(7)(D), refers to a minimum penalty of “not less than $100,000 . . .”; Section 104b(d)(1)(A) of the Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. 1414b(d)(1)(A), refers to an exact penalty of $600 “[f]or each dry ton (or equivalent) of sewage sludge or industrial waste dumped or transported by the person in violation of this subsection in calendar year 1992 . . .”; and Section 325(d)(1) of the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. 11045(d)(1), refers to an exact civil penalty of $25,000 for each frivolous trade secret claim. </FTNT> <FTNT> <SU>3</SU>  Current and historical CPI-Us can be found on the Bureau of Labor Statistics' websites here: <E T="03">https://www.bls.gov/cpi/tables/supplemental-files/historical-cpi-u-202410.pdf</E> and <E T="03">https://www.bls.gov/news.release/cpi.nr0.htm.</E> </FTNT> With this rule, the new statutory maximum and minimum penalty levels listed in the third column of Table 1 of 40 CFR 19.4 will apply to all civil monetary penalties assessed on or after January 8, 2025, for violations that occurred after November 2, 2015, the date the 2015 Act was enacted. The former maximum and minimum statutory civil monetary penalty levels, which are in the fourth column of Table 1 to 40 CFR 19.4, will now apply only to violations that occurred after November 2, 2015, where the penalties were assessed on or after December 27, 2023, but before January 8, 2025. The statutory civil monetary penalty levels that apply to violations that occurred on or before November 2, 2015, are codified at Table 2 to 40 CFR 19.4. The fifth column of Table 1 and the seventh column of Table 2 display the statutory civil monetary penalty levels as originally enacted. The formula for determining the cost-of-living or inflation adjustment to statutory civil monetary penalties consists of the following steps: <E T="03">Step 1:</E> The cost-of-living adjustment multiplier for 2025 is the percentage by which the CPI-U of October 2024 (315.664) exceeds the CPI-U for the month of October 2023 (307.671), which is 1.02598. <SU>4</SU> <FTREF/> Multiply 1.02598 by the current penalty amount. This is the raw adjusted penalty value. <FTNT> <SU>4</SU>  Section 5(b) of the 2015 Act provides that the term “cost-of-living adjustment” means the percentage (if any) for each civil monetary penalty by which— (A) the Consumer Price Index for the month of October preceding the date of the adjustment, exceeds (B) the Consumer Price Index for the month of October 1 year before the month of October referred to in subparagraph (A). Because the CPI-U for October 2024 is 315.664 and the CPI-U for October 2023 is 307.671, the cost-of-living multiplier is 1.02598 (315.664 divided by 307.671). </FTNT> <E T="03">Step 2:</E> Round the raw adjusted penalty value. Section 5 of the 2015 Act states that any adjustment shall be rounded to the nearest multiple of $1. The result is the final penalty value for the year. <HD SOURCE="HD1">II. The 2015 Act Requires Federal Agencies To Publish Annual Penalty Inflation Adjustments Notwithstanding Section 553 of the Administrative Procedure Act</HD> Pursuant to section 4 of the 2015 Act, each Federal agency is required to publish adjustments no later than January 15 each year. In accordance with section 553 of the Administrative Procedure Act (APA), 5 U.S.C. 553, most rules are subject to notice and comment and are effective no earlier than 30 days after publication in the <E T="04">Federal Register</E> . However, section 4(b)(2) of the 2015 Act provides that each agency shall make the annual inflation adjustments “notwithstanding section 553” of the APA. Consistent with the language of the 2015 Act, this rule is not subject to notice and an opportunity for public comment and will be effective on January 8, 2025. <HD SOURCE="HD1">III. Statutory and Executive Order Reviews</HD> Additional information about these statutes and Executive orders can be found at <E T="03">https://www.epa.gov/laws-regulations/laws-and-executive-orders.</E> <HD SOURCE="HD2">A. Executive Order 12866: Regulatory Planning and Review and Executive Order 14094: Modernizing Regulatory Review</HD> This action is not a significant regulatory action as defined in Executive Order 12866, as amended by Executive Order 14094, and was therefore not subject to a requirement for Executive Order 12866 review. <HD SOURCE="HD2">B. Paperwork Reduction Act (PRA)</HD> This action does not impose an information collection burden under the PRA. This rule merely increases the level of statutory civil monetary penalties that can be imposed in the context of a Federal civil administrative enforcement action or civil judicial case for violations of EPA-administered statutes and their implementing regulations. <HD SOURCE="HD2">C. Regulatory Flexibility Act (RFA)</HD> This action is not subject to the RFA. The RFA applies only to rules subject to notice and comment rulemaking requirements under the Administrative Procedure Act (APA), 5 U.S.C. 553, or any other statute. Because the 2015 Act directs Federal agencies to publish this rule notwithstanding section 553 of the APA, this rule is not subject to notice and comment requirements or the RFA. <HD SOURCE="HD2">D. Unfunded Mandates Reform Act (UMRA)</HD> This action does not contain a ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 29k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━