Subchapter 1

Section 101 Authority

These rules are promulgated by the Secretary of the Agency of Natural Resources pursuant to the authority granted by 10 V.S.A. Section 8016.

Section 102 Purpose

It is the purpose of these rules to standardize the administrative penalties assessed by the Secretary by establishing penalty classes and ranges to assist in carrying out the goals established by the Legislature in Act 98 (1989 Session), 10 V.S.A. Chapter 201.

Section 103 Applicability

These rules apply to administrative penalties assessed pursuant to 10 V.S.A. Section 8010 for violations, as defined by 10 V.S.A. Section 8002(9), of the statutes listed in 10 V.S.A. Section 8003(a), provided such violations occur or continue after July 1989.

Where the secretary is delegated management and enforcement of a federal environmental program, these rules will apply to administrative penalty assessment under the program, unless on a case by case basis the penalty amount assessed under these rules is disapproved by the appropriate federal authorities. Where penalty assessment in a given case is not approved by the federal authorities, the penalty will be assessed consistent with the federal penalty policy and the penalty assessed in this manner is deemed to be a penalty assessed under this rule in all respects.

Section 104 Definitions

As used in these rules:

1. "Compliance" means compliance with the statutes specified in Section 8003 of Title 10, and with any related rules, permits, assurances, or orders.
2. "Day" means calendar day; the period From 12:00 a.m. to 12:00 a.m.
3. "Economic benefit" means the estimated net savings or net income or net gain realized by a respondent as a result of violations. Economic benefit may include the estimated net income or net gain realized by a respondent through the use of facilities before all required environmental permits are obtained. In determining economic benefit, the cost of returning to compliance and/or remediation shall be considered. Economic benefit may not be less than zero.
4. "Minor Violation" means a violation that causes little to no actual or potential harm to the public health, safety or welfare or to the environment and which constitutes a small deviation from the requirements of a statute, rule, permit, assurance of discontinuance, or order.
5. "Permit" means any permit, license, certification or transitional operational authority issued under any of the statutes specified in Section 8003 of Title 10, including air pollution orders issued under chapter 23 of Title 10.
6. "Respondent" means a person who has committed or is alleged to have committed a violation.
7. "Secretary" means, the Secretary of the Agency of Natural Resources, or the Secretary's duly authorized representative.
8. "State's Cost of Enforcement" means actual costs incurred after the respondent has been notified of the violation. Such costs may include sampling and analysis, evaluation of the respondent's property or facility, preparation of enforcement documents and actions, and similar costs.
9. "Violation" means non-compliance with one or more of the statutes specified in Section 8003 of Title 10, or any related rules, permits, assurances, or orders.

Section 106 Continuing Violation

The Secretary may consider any violation of a statute listed in 10 V.S.A. Section 8003(a) or a rule promulgated under such statute or a condition of a related permit, order, or assurance of discontinuance that continues longer than one day as a continuing violation subject to additional penalties for each day of continuance of the violation.

Subchapter 2 

Section 201 Classification of Violations

There are three classes of violations into which the Secretary may place violations. The criteria for placement into the classes are as follows: 

1. Class I.  A Class I violation is one which meets one or more of the following criteria:
1. The violation is a violation of any of the following and does not qualify as a minor violation under Class II:
1. an assurance of discontinuance; or
2. an order issued pursuant to 10 V.S.A. chapter 201; or
3. an order issued pursuant to any statute listed in 10 V.S.A. Section 8003(a); or
2. The violation presents a threat of substantial harm to the public health, safety, or welfare or to the environment or the violation has caused substantial harm to the public health, safety, or welfare or to the environment.
2. Class II.  A Class II violation is one which meets one or more of the following criteria:
1. The violation is more than a minor a violation of a statute listed in 10 V.S.A. Section 8003(a), a rule promulgated under a statute listed in 10 V.S.A. Section § 8003 (a), or a related permit. Activities or construction initiated before the issuance of all necessary environmental permits shall be Class II violations.
2. The violation constitutes a minor violation of:
1. an assurance of discontinuance; or
2. an order issued pursuant to 10 V.S.A. Chapter 201; or
3. an order issued pursuant to any statute listed in 10 V.S.A. Section 8003(a); or
3. Class III.  A Class III violation is one in which: 
1. The violation is a minor violation of a statute listed in 10 V.S.A. Section 8003(a), a rule promulgated under a statute listed in Section 8003 (a) , or a related permit.

Subchapter 3

Section 301  Classification of Violations:  Penalty Ranges

In conjunction with the provisions of Section 302 below:

1. A Class I violation shall be subject to penalties ranging from $0 to $25,000 for the initial violation and $0 to $10,000 for each day that the violation continues.
2. A Class II violation shall be subject to penalties ranging from $0 to $17,500 for the initial violation and $0 to $8,750 for each day that the violation continues.
3. A Class III violation shall be subject to penalties ranging from $0 to $5,000 for the initial violation and $0 to $2,500 for each day that the violation continues.

Section 302  Setting the Penalty Within the Class of Violation

1. The requirements and procedures of this section shall be used to determine the penalty amount for each single violation, each group of violations which are treated as a single violation, the initial day of a continuing violation, and each subsequent day of a continuing violation.
2. Initial penalty calculation
   The following criteria, on a scale of 0 to 3, will be considered by the Secretary in determining the initial amount of the penalty within the particular class of violation.
1. The degree of actual or potential impact on public health, safety, and welfare
   (0 no actual impact or minor potential impact,
   1 minor actual impact or moderate potential impact,
   2 moderate actual impact or major potential impact,
   3 major actual impact).
2. The degree of actual or potential impact on the environment
   (O no actual impact or minor potential impact,
   1 minor impact or moderate potential impact,
   2 moderate actual impact or major potential impact,
   3 major actual impact).
3. Whether the respondent knew or had reason to know the violation existed:
   ~ Knowledge of the requirements
   (0 new requirement,
   1 had reason to know about violated requirement,
   2 had a permit or permit by rule,
   3 repeated violation after notice).
   ~ Knowledge of the facts of violation
   (0 could not have reasonably known the violation existed,
   1 could have reasonably been expected to know the violation existed,
   2 clear evidence that the respondent knew the, violation existed).
   ~ The lowest numbered selection in either the "Knowledge of the requirements" or the "Knowledge of the facts of the violation" sections will be the score for this category.
4. The respondent's record of compliance with the statutes specified in 10 V.S.A. Section 8003 or related rules, permits, orders, or assurances of discontinuance
   (0 no prior violations,
   1 prior violation,
   2 prior violations,
   3 or more prior violations).
5. The length of time the violation existed
   (0 immediate correction,
   1 a violation of very short duration,
   2 moderate duration,
   3 long duration).
3. Initial Penalty Amount
1. When the Secretary has evaluated a violation under the criteria listed in subsection (b) above, has determined the score under each of the criteria, and has added the scores together to arrive at a total score, the initial penalty amount shall be determined by using the maximum penalty for the Class of violation involved and multiplying that number by the following percentages: 
   
   Percentage Chart 
   
   

   Score	Percentage of  maximum penalty
   1 -  2	10 %
   3 - 4	20 %
   5 - 6	30 %
   7 - 8	40 %
   9 -10	50 %
   11	60 %
   12	70 %
   13	80 %
   14	90 %
   15	100 %

   
   
2. Once the initial penalty amount has been determined, that amount shall be adjusted:
1. to 100% of the maximum penalty for the class of violation involved if a 3 rating is assigned to either criteria one (public health) or two (environment) in Section 302(b) above; or 
2. to a minimum of 70% of the maximum penalty for the class of violation involved if two or more of criteria b(3), b(4) and b(5) in Section 302(b) above are rated as 3s.
4. Economic benefit and the state's costs of enforcement
   The penalty amount calculated under subsection (b) above, may also be adjusted when the respondent has realized an economic benefit as a result of a violation and/or the state has incurred costs of enforcement related to the violation. The secretary may adjust a penalty by adding an amount equal to such economic benefit and/or costs to the penalty amount. 
   The Agency will treat any information provided by the respondent concerning potential economic benefit associated with the violation as confidential to the extent permitted by law and return such information to the respondent after the appeal period for any order involved has passed.
5. Calculating the final penalty amount
   Once the initial penalty amount has been determined, the initial penalty adjustment, if any, has been made, and the Secretary has added the amount of economic benefit and/or the costs of enforcement, if any, to the penalty, the Secretary shall consider criteria (1) and (2) below before establishing the amount of the final penalty:
1. The presence of mitigating circumstances. If mitigating circumstances exist, the penalty amount may be reduced. Unreasonable delay by the Secretary in seeking enforcement shall be considered a mitigating circumstance.
   The following are examples of types of circumstances that would be considered by the Secretary in determining whether and to what degree to mitigate the penalty.
1. The presence of mitigating circumstances. If mitigating circumstances exist, the penalty amount may be reduced. Unreasonable delay by the Secretary in seeking enforcement shall be considered a mitigating circumstance.
   The following are examples of types of circumstances that would be considered by the Secretary in determining whether and to what degree to mitigate the penalty.
1. development and enforcement of a comprehensive written compliance policy by the respondent covering the type of violations that occurred;
2. adequate staff levels and training to help assure compliance;
3. thorough compliance testing with review and oversight by management;
4. adequate maintenance of facilities needed to assure compliance;
5. regular assessment of facility improvement needs and implementation of corrections.
2. Prompt actions by the respondent to correct the violation. These actions will have less value than actions taken ahead of time to prevent violations.
3. Instances where an employee acts counter to an established and enforced compliance policy causing the violation.
2. The deterrent effect of the penalty.  The Secretary may increase the penalty amount but not above the maximum penalty amount for the Class of violation involved if he or she determines that a larger penalty is reasonably necessary to deter the respondent and the regulated community.
6. The final penalty amount for any single violation, or each group of violations which are treated as a single violation, shall not exceed $25,000.  The final penalty amount for any continuing violation shall not exceed $100,000.  If higher penalties are calculated, the violations may be referred to the Attorney General for civil enforcement pursuant to 10 V.S.A. Section 8221.

Effective: 07/28/90

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