Opinion ID: 413378
Heading Depth: 2
Heading Rank: 3

Heading: Dollar-for-Dollar Credits

Text: 177 Section 120(d)(2) provides for the calculation of the penalty minus those expenditures made for the purpose of bringing a source into, and of maintaining, compliance, but only to the extent that those expenditures have not already been taken into account in the calculation of the penalty. Industry petitioners argue that this section mandates that expenditures be credited on a dollar-for-dollar basis. On the other hand, EPA argues that its choice of a prorated, rather than a dollar-for-dollar, credit is clearly authorized by the statute and is consistent with the penalty calculation model. We agree. 178 Section 120 does not explicitly state whether particular expenditures are to be subtracted from or calculated into the penalty assessment. It merely says that the expenditures credited should not have been already taken into account in the calculation of the penalty. Petitioners' contention would, in all probability, wipe out the penalty once a source begins significant outlays directed toward compliance. In contrast, EPA's use of a prorated credit takes account of the fact that it is the time value, not the absolute value, of the economic benefit that is relevant to penalty calculations. Petitioners' argument that the statute requires dollar-for-dollar credits is incorrect, and we affirm EPA on this issue.