On November 2, 2015, President Obama signed into law the Federal Civil Penalties Inflation Adjustment Improvement Act of 2015. The law required all federal agencies to increase civil penalties with inflation. While there were previous requirements to increase civil penalties, the new law provides for more dramatic increases attributable to the following changes:
- Requires adjustments annually instead of every four years as had been previously been required;
- Institutes a "catch-up" period to increase penalties assuming the more accelerated schedule had previously been in place with a cap on total increases of 150% (which is quite dramatic)
- Formula for the "catch-up" period is based on how much the October 2015 Consumer Price Index (CPI) exceeds the 1990 CPI (called the "cost-of-living multiplier")
The EPA promulgated the Civil Monetary Penalty Inflation Adjustment Rule to establish a schedule for penalty increases including implementation of the "catch up" provision. The schedule began implementation on August 1st. EPA described the purpose of the rule as follows:
The primary purpose of the rule is to reconcile the real value of current statutory civil penalty levels to reflect and keep pace with the levels originally set by Congress when the statutes were enacted.
EPA’s Adjustment Rule includes the following increases (there are a range of potential penalties in the Adjustment Rule. The ranges shown below are for some of the more common violations):
- TSCA toxic substances violations – go from $25,000 per day to $37,000
- RCRA- from $25,000 per day to anywhere from $56,467 to $70,117 depending on the nature of the violation
- Clean Air Act- from $37,500 (set in 2009) to $44,539 for EPA administrative penalties and a maximum of $93,750 for penalties assessed by a court (the maximum increase of 150% allowed under the rule)
- Clean Water Act- from $37,500 to anywhere from $44,539 to $51,570
- ECPRA and CERCLA- from $37,500 to $53,907
To understand the specific penalty increases for particular violations of the statutes set forth above, consult Table 2 of 40 CFR Section19.4 of the EPA Civil Monetary Penalty Inflation Adjustments Rule.
While EPA still has discretion to seek less than the per day maximum civil penalty set forth in the Adjustment Rule, the rule shows an intent that penalties for environmental violations will be significantly larger even when EPA exercises is discretion.