The Fifth Revision of the TCEQ’s Penalty Policy Finalized

Policy Finalized

The Texas Commission on Environmental Quality (TCEQ) recently finalized their Penalty Policy which will result in higher fees and more violation events for industry.  These changes were motivated by recent incidents that have caused significant public and environmental impact in Texas. The Penalty Policy is intended to cover statutorily authorized penalties under a variety of programs, including but not limited to, air quality, dam safety, water quality and use, and waste.

The effective date for the Fifth Revision of the Penalty Policy is January 28, 2021. Violations documented in investigations commencing on or after January 28, 2021 are subject to the new policy.

Background

For investigations conducted prior to January 28, 2021:

• The Fourth Revision of the Penalty Policy (effective April 1, 2014) applies to violations that occurred on or after September 1, 2011, and that are included in Enforcement Action Referrals (EARs) assigned on or after April 1, 2014.
• The Third Revision of the Penalty Policy (effective September 1, 2011) applies to violations that occurred on or after September 1, 2011, and that are included in EARs assigned before April 1, 2014.
• The Second Revision of the Penalty Policy (effective September 1, 2002) applies to violations that occurred before September 1, 2011.

Penalties are evaluated by the TCEQ using percentages of a maximum penalty.  The determined percentage is multiplied by the highest penalty amount for the statute and this becomes the base penalty amount. Changes to these percentages can have a significant impact on the total base penalty for enforcement.  The following sections outline the final updates and impacts of the revision to the TCEQ Penalty Policy.

UPDATES

TCEQ’s revised Penalty Policy includes increased penalties for actual releases and potential releases for major and minor sources (as defined in the Penalty Policy), increased penalties for programmatic violations, increased frequency of imposed penalties for continuous violations events, and inclusion of a penalty enhancement for emissions events that can be enforced in counties with a population of 75,000 people or more.

• For major sources experiencing actual release events, the statutory maximum penalty recommended for moderate and minor harm will increase from 30 to 50% and 15 to 30% respectively. The base penalty amount will increase due to this change.
• For minor sources experiencing actual release events, the statutory maximum penalty recommended for major, moderate, and minor harm increase from 30 to 50%, 15 to 25%, and 5 to 15%, respectively. The base penalty amount will increase due to this change.
• For programmatic major violations, the recommended statutory maximum penalty will increase from 15 to 20% for major sources and 5 to 10% for minor sources. The base penalty amount will increase due to this change.
• For continuous events that do not have a daily frequency period, frequency periods will increase by one step (i.e., single events will be tracked quarterly, quarterly events will be tracked monthly, and monthly events will be tracked weekly). The smaller evaluation time period will likely result in a higher total penalty for continuous events.
• For sites which have violation events in counties with a population of 75,000 or more, a penalty enhancement of up to 20% can be enforced.

In addition to the updates listed above, the revised Penalty Policy affects dry cleaners, aggregate production operations, and underground petroleum storage tanks.

• For dry cleaners that are not registered, a penalty up to $50 per day will be issued for every day after the 30^thday registration fees are due. The same penalty applies to late dry cleaner registration applications for every day after the 30^th day the application must be submitted.
• For aggregate production operations that operate without registration, the yearly penalty will increase from $10,000 per year to $20,000 per year. The maximum total penalty will increase from $25,000 to $40,000.
• For facilities that have underground petroleum storage tanks on site, major source designation will increase from 50,000 gallons per month to 100,000 gallons per month.

Contact information, a link to the final TCEQ Penalty Policy document, and more information can be found on the TCEQ’s website here.  If you have any questions about the revised TCEQ Penalty Policy, reach out to Houston Project Manager, Meghan Skemp at mskemp@all4inc.com or 281.937.7553 x307.