TSCA Advisory 02 - IV

On August 19, 2002, EPA withdrew a rule that the Agency issued on June 18, which would have raised civil penalties for violations of the Toxic Substances Control Act and other statutes the Agency administers. See 67 Fed. Reg. 53,743, withdrawing rule published at 67 Fed. Reg. 41,343. The June 18 rule would have amended the Agency's Civil Monetary Penalty Inflation Adjustment Rule (40 C.F.R. Part 19) to raise civil penalties by 13.6%, reflecting inflation since 1996. See TSCA Advisory 02-II. The Debt Collection Improvement Act of 1996 (DCIA) requires agencies to issue such rules periodically to revise the maximum penalties under statutes they administer.

EPA published the June 18 rule as a "direct final rule," using a process by which the Agency issues in proposed and final form simultaneously a rule that is ministerial or not controversial and unlikely to generate adverse comments. Under this process, the public has 30 days to submit adverse comments. If EPA does not receive any adverse comments, the rule goes into effect 30 days after the close of the comment period.

Although no comments were submitted to the docket by the deadline, EPA's General Counsel did receive a letter from the General Counsel of the General Accounting Office (GAO) disagreeing with the method EPA used for rounding penalty increases under the DCIA. EPA treated the GAO letter as an adverse comment, and withdrew the direct final rule. The Agency intends to publish a second final rule without reopening the comment period.

The maximum civil penalties under TSCA may be increased to $32,500 if the Agency adopts GAO's approach. Although the DCIA clearly limited the first penalty increase to 10% (from $25,000 to $27,500), GAO interprets the statute to require agencies to round subsequent increases to the nearest $1,000 when increasing penalties that are between $1,000 and $10,000 and to the nearest $5,000 when increasing penalties that are between $10,000 and $100,000. EPA had interpreted the DCIA differently, requiring the Agency to round the increase to the nearest $1,000 if the increase was between $1,000 and $10,000, and to the nearest $5,000 if the increase was between $10,000 and $100,000. Thus, EPA increased the maximum civil penalty under TSCA from $27,500 to $31,500; GAO would have increased the maximum to $32,500.

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