The Cost of Non-Compliance | Part 5: How the EPA Calculates Civil Penalties

introduction

Uriah Donaldson presented a technical paper at the 2023 IIAR Conference titled The Cost of Non-Compliance: An Objective Analysis of Federal EPA’s Enforcement at Ammonia Refrigeration Facilities. This blog series includes excerpts from his technical paper.

Part 5: How the EPA Calculates Civil Penalties – Examples of Release Notification and Tier II

Example 1 | Failure to make immediate notifications for an ammonia release

CERCLA §103(a) requires facilities to immediately (i.e., within 15 minutes)(27) report releases of hazardous substances above Reportable Quantity (RQ) to the National Response Center. For ammonia, the RQ is 100 lbs. in a 24-hour period. 

EPCRA §304(a) also requires facilities to report releases of extremely hazardous substances (EHS) for any release requiring CERCLA notification to the State Emergency Response Commission (SERC) and the Local Emergency Planning Committee (LEPC).

Using the matrix below, published in the EPA Enforcement Response Policy for §304, §311, §312 of EPCRA and §103 of CERCLA, let us imagine the following scenario:

A Cold Storage facility with a maximum intended inventory of 30,000 lbs. has a release of 700 lbs. of ammonia from a pressure relief valve. After the relief valve reseated, an employee began making notification approximately 1 hour and 45 minutes after the release had been discovered.

EXTENT

(timeliness of notification)

 LEVEL A

(greater than 10 times the RQ)

 LEVEL B

(greater than 5 but less than or equal to 10 times the RQ)

 LEVEL C

(greater than 1 but less than or equal to 5 times the RQ)
LEVEL 1

(more than 2 hours)

 $27,500

$20,626

 $20,625

$13,751

 $13,750

$6,876
LEVEL 2

(between 1 and 2 hours)

 $20,625

$13,751

 $13,750

$6,876

 $6,875

$3,439
LEVEL 3

(within 1 hour, after 15 minutes)

 $13,750

$6,876

 $6,875

$3,439

 $3,438

$1,718

 

Because the amount of ammonia released is 7 times the Reportable Quantity (RQ for NH3 = 100lbs; 7 x 100 = 700 lbs) LEVEL B would be selected on the X axis. 

Because notification was made 1 hour and 45 minutes after the person in charge was aware of the release, LEVEL 2 would be selected on the Y axis. 

Therefore, the proposed base penalty would be between $6,876 and $13,750 for failing to make the required notifications within 15 minutes. Anecdotally, it is the author’s experience that the EPA generally selects the higher penalty amount initially. With that in mind, it is also important to remember that CERCLA and EPCRA are separate regulations. As such, it is common for a facility to be cited for each regulation. The total base penalty in the scenario for failing to make notifications within 15 minutes of becoming aware of the release would therefore likely be:

Description Penalty
CERCLA §103(a) $13,750
EPCRA §304(a) $13,750
Total Base Penalty $27,500

Example 2 | Failure to annually complete Tier II chemical inventory submissions

EPCRA §312, as noted earlier in the paper, requires facilities to annually submit a chemical inventory, otherwise known as Tier II submissions. The submission must be completed annually, between January 1st and March 1st. Either missing the submission window or submitting an incomplete chemical inventory would be a violation of EPCRA §312. 

Using the matrix below, published in the EPA Enforcement Response Policy for §304, §311, §312 of EPCRA and §103 of CERCLA, let us imagine the following scenario:

A facility with 30,000 lbs. of ammonia failed to submit their Tier II the previous 2 years. A new safety director was hired on May 1st. Recognizing that the facility has not submitted their chemical inventory in two years, she completes the submission on May 15th.

EXTENT

(timeliness of inventory

submission)

 LEVEL A

(greater than

10 times the

MTL)(28)

 LEVEL B

(greater than 5 but

less than or equal to

10 times the MTL)

 LEVEL C

(greater than 1 but

less than or equal to

5 times the MTL)
LEVEL 1

(more than 30 days)

 $27,500

$20,626

 $20,625

$13,751

 $13,750

$6,876
LEVEL 2

(after 20 but within 30 days)

 $20,625

$13,751

 $13,750

$6,876

 $6,875

$3,439
LEVEL 3

(after 10 but within 20 days)

 $13,750

$6,876

 $6,875

$3,439

 $3,438

$1,718

Because the facility’s 30,000 lbs. ammonia inventory is 60 times the Threshold Planning Quantity for Tier II submission (NH3 threshold planning quantity = 500 lbs.) LEVEL A would be selected on the X axis.

Because the Tier II was submitted 75 days after the March 1st deadline, LEVEL 1 would be selected on the Y axis.

Additionally, the enforcement policy states, “For EPCRA §312 violations detected for previous years of noncompliance, a flat penalty of $1,500 per year shall be proposed.”(29)

Therefore, the likely proposed base penalty for this scenario would be:

Description Penalty
EPCRA §312 $27,500
Previous Years of Non-compliance $1,500 for first year 

+ $1,500 for second year 

= $3000
Total Base Penalty $30,500
(27) “Immediately” has been interpreted with legal precedent to require notification within 15 minutes of when the responsible person becomes aware of the release. [Legislative History of the Superfund Amendments and Reauthorization Act of 1986″ (Volume 2, October 1990, pgs. 600-01)]; (28) MTL stands for Minimum Threshold Level and is associated with Threshold Planning Quantities; (29) EPA Enforcement Response Policy for §304, §311, §312 of EPCRA and §103 of CERCLA pg. 23

The previous blogs in this series are available in the following links:

 

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