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Scon-R. MORRIS 

FAA OFFICP. Oh REGIONAL COUl^SEL 

1601 LINU AVE., SW 

R£NTON, WASHINGTON 98057 . 

TEI..F-PI10NE: 425/227-1417 

FACSIMILE: 425/227-1007 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFIGErOF HEARINGS 

WASHINGTON, D,C. 

IN THE MATTER OF 

WESTMARK INDUSTRIES, INC. 

I 

> 

FAA DOCKET NO . CP06NM0008 -.? 

DMS No. l''AA-2006-26338 o 

FAA Case No. 2006NM700095 

Judge Richard Goodwin 

r>o 

MO HON TO TAKE JUDICIAI. NOTICE 

Complainant, through his undersigned counsel, pursuant to Rules of Practice 13.218(a) and FRE 

201. herel-jy moves that the ALJ take judicial notice of the following: 

Tlie Administrator's published sanction guidelines for hazardous material violations contained at 64 

Fed. Reg. 19443 - 19450 (April 21,1999). (Attached) 

DATED this IS"^ day of April 2011. 

,::^OTrR. MORRIS 

FAA Attorney 

Motion to Take Judicial t^oiice 

FA.A Docket No. C1'06NM0008 

Page 1 of2 

SCOTT R. MORRIS. FAA ATTORNEV 

TEL; 42S.227.14I7; FAX; 425.227.100-
05/05/2011 15:48 FAX 2024935142 FAA DMS 0002/01 0 

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CERTIFICATE OF SERVICE 

I hereby certify thai the foregoing Motion to Take Judicial Notice has been served via facsimile 

and Certified Mail - Return Receipt Requested this date, to the following: 

The Honorable Richard C. Goodwin 

— Office-o£iiearings, M--20-

1200 New Jer.<!ey Avenue, S.E. 

East Building Ground Floor. Rm £12-320 

Washington, D.C. 20590 

TEL: 202.366.2139 

FAX: 202.366.7536 

Federal Aviation Administration 

800 Independence Avenue SW 

Washington, D.C. 20591 

Attn: Hearing Docket Clerk, AGC-430 

Wilbur Wright Building - Suite 2W1000 

FAX: 202.493.5142 

Michael Oiler, Owner 

Westmark Industries, Inc. 

6701 SWMcEwanRoad 

Lake Oswego, OR 97035-7815 

TEL: 503.620,0945 

FAX: 503.639.6749 

Dated tliis 25th day of April, 2011. 

MOIFAIRCHIN 

Office of Regional Counsel (ANM-7) 

Federal Aviation Administration 

1601 Lind Ave. SW 

Renton, WA 98057 

425.227.2160 

Motion to Take Judicial Notice 

FAA Docket No! CP06NMOOOS 

Pag.e2of2 

SCOTT R. MORRIS, FAA ATTOBMSY 

TEL; 425.227.1417; FAX: •I2S.227.1007 
05/05/201 1 15:48 FAX 2024935142 FAA DMS 0003/01 0 

Federal Register/Vol, 64, No. 76/Wednesday, April 21, 1999/Rules and Regulations 19443 

Small Business Regulatoiy Enfofccmsfii 

Faimtiss Act 

The Small Business Regulatory 

Enforcement Fairness Act of 1996 (Pub. 

L. 104-121) provides generally for 

congressional review of agency rules. A 

reporting requirement Is triggered In 

Inscances where NCtIA i^!>ue.i;i final — -

rule as defined by .Section 551 of the 

Adminisiratlve PpDcedures Aa . 5 U.S.C. 

551. The Office of Management and 

Budget has determined that this rule 

does not constitute a major rule for 

purposes of the Small Business 

Regulatory Enforcement Fairness Act of 

1996. 

Li:sl of Subjects in 12 CFR Part 701 

Charitable contributions. Credit 

unions. 

By the National Credit Union 

Adrnirii$lri)tion Board on April 15. 1999. 

Becky Baker, 

Secretary of the Board. 

For Che reasons set forth above, NCUA 

amends 12 CFR part. 701 as follows: 

PART 701—ORGANIZATION AND 

OPERATION OF FEDERAL CREDIT 

UNIONS 

1, The aulhorily citation for part 701 

conllnues to read as follows: 

Authorhy. 12 U.S.C. 1752(51. 1755. 175C. 

1757, 1759.1761a. 176Ih, 1766. 1767, 1782. 

1784, 1787. and 1789. Sealon 701.6 is also 

authorized by 31 U.S.C. 3717. Section 701.31 

Is also authorised by 15 U.S.C. 1601 etseq,. 

42U.S.C, IBfil and 42^5.0, 3601-3610, 

Section 701.35 Is also authorized by 42 

U.S.C. 4311-431Z. 

2. Part 701 is amended by adding 

S 701.25 to read Xi follows: 

$701.25 Charitable contribution* and 

donations. 

(aO A federal credit union may make 

charitable contributions arid/or donate 

funds to recipiienis not organized for 

profit that are located in or conduct 

acdviLles in a community In which the 

federal Credit union has a place of 

business or to organisations Ihat are tax 

exempt or^ganlzations tinder Secdon 

501(c)(3) of the Internal Revenue Code 

and operate primarily to promote and 

develop credit unions. 

(b) Tne board of directors must 

approve charitable contributions and/or 

donations, and the approval must be 

based on a decerminacion by the board 

of dtreciors thai the contribuUons and/ 

or donation.'! are in the best interests of 

the federal credit union and are 

reasonable given Che size and financial 

condition of the federal credit union. 

The board of directors, if li chooses, 

may establish a budget for charitable 

contributions and/or donations and 

authorise appropriate ofFldals of ihe 

federal credit luilon to select recipients 

and disburse budgeted funds among 

chose recipients. 

|FR Doc. 99-9931 Filed 4-20-99: 8:45 am) 

BLLM G CODE TSSS-OI-P 

DEPARTMENT OF TRANSPORTATION 

Federal AvtatiDn AdmlnlGUation 

14 CFR Part 13 

Federal Aviation Administration Policy 

on Enforcement of the Hazardous 

Materials Regulations; Penalty 

Guidelines 

AGENCY: Federal Aviation 

Adminktration (FAA). DOT. 

ACTloK; General statement of policy. 

SUMtflARY: This document states that 

FAA policy on determining the sancUon 

amounts In FAA enforcement acuons 

addressing violations of the Department 

of Transportation Hazardous Material 

Regulations (HMR), This policy 

statement provides guidance for agency 

personnel In the exercise of the KAA's 

prosecutorial discretion In enforcement 

cases concerning transponacton of 

hazardous materials by air. The 

guidance should aid In analysis of the 

facts and circumstances of each case so 

as to arrive at an appropriate sanction in 

light of the statutorily defined penalty 

considerations. The analytical 

framework should also promote a 

relative consistency in deterrnlnlng civil 

penalties for violations of the HMR. 

EFFECTIVE bATE: April 14, 1999. 

FOR FURTHER IHFORIMHOH COMTACT; 

Bill Wilkening. Office of Civil Aviation 

Seoirity, Dangerous Goods and Cargo 

Security Division, telephone: (202) 267-

9B54. facsimile (202) 267-5760, email: 

BllI.WJlkening®ifaa.gov, mailing 

address; ACO-800. 800 Independence 

Avenue, S.W., Washington, D.C. 20591, 

or Allan H, Horowitz, Enforcement 

Division, Office of the Chief Counsel, 

telephone (202) 267-3137. facsimile 

(202)267-5106, email: 

AUan.Ho/owltzfffsfl.50v, mailing 

address: AGC-300, 800 Independence 

Avenue, S.W., Washington, D.C. 20591. 

SUPPLEMENTARY INFORMATION: 

Background 

Congres; deremilned Chat the 

unregulated cranspori^don of hazardous 

materials constitutes a threat (o public 

safety in all fonns of transportation. 

Congress addressed that threat in 1974 

by enacting the Hazardous Materials 

Transportation Act (HMTA). By 1990. 

Congress determined that effective 

enforcement of the HMTA required 

more severe action, and enacted the 

Hazardous Materials Transportation 

Uniform Safety Act of 1990, Public Law 

No. 101-615, 1990 U.S. Code Congress. 

& Admin. News 104 Stat. 4605. The 

primary effect of this 1990 revision of 

_ct)e-HMT-A was co raise the maximum 

dvll penally for vioiaclon of any 

regulation enacted under the IIMTA to 

J25,000, and. for the first time, to 

require a J250 minimum penalty for any 

such violation. The HMTA was 

recodified In 1994 and Is now referred 

to as the "Federal hazardous material 

cratisportatlon law." 1994 U.S. Code 

Congress. St Admin. News 108 Stat. 759, 

codified at 49 U.S.C. 5101-5127. In the 

1994 recodification. Congress 

specifically stated that the 

recodification created no substantive 

change to the earlier form of the statute, 

The Federal Civil Penalties Inflation 

Adjustment Ace of 1990. 28 U.S.C. 2461 

(note), as amended by the Debt 

CoUectlgn Improvement Act of 1996, 

Public Law 104-134. April 26, 1996. 

provides a mechanism for adjustments 

for monetary civil penalties for inflation 

In Order to maintain the deterrent effect 

of monetary civil penalties and promote 

compliant^ with the law. Under the 

statute, the new civil penalty 

maximums cannot be applied unless 

they are implemented by reguladon. On 

December 20, 199S. the FAA published 

a final rule (61 FR 6744). implementing 

the statute for each dvU penalty subject 

to the FAA's juri-<!dicticrn. On January 

21, 1997, the FAA publi.shed a 

correction to the final rule (C2 FR 4134), 

The final rule is codified at 14 CFR Part 

13. Subpan H. Flirsuani to 14 CFR 

13.305(d). the maximum civil penalty 

that may be assessed for a violation of 

the Federal hazardous material law or a 

hazardous material reguladon is now 

$27,500. 

Congress assigned Lhe responsibility 

for the enforcement of the Federal 

hazardous materia] transportation law to 

the Secretary of Transportation. Within 

Che Department of Transportation, the 

Research and Special Programs 

Administration (RSPA) adopts ihc 

Hazardous Materials Regulations 

(HMR), 49 CFR pans 171 through 178, 

which govern the transportation of 

hazardous materials (Hazmac). Although 

RSPA has some enforcement 

responsibilities, the responslbUlty for 

enforcing the HIwlR with respect to dvll 

aviation is delegated by the Secretary of 

Transportation to the FAA. 49 CFR 

1.47(k). 

The HMR set forth regulations for the 

transportation of Hazmat. A knowing 

violation of the .statute or of the HMR 

can support the assessment of a civil 
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19444 Federal Register/Vol. 64. No. 75/Wednesday. AprQ 21. 1999/Rules and Regularions 

penalty between $250 and $27,500. A 

person acts knowingly when the person 

has actual knowledge of the facts giving 

rise to the violation: or a reasonable 

person acting in the circumstances and 

exercising reasonable care would have 

that knowledge. 49 U.S.C, 5123(a) () )(A). 

..Thecivil penaltiesauthorlzedunder_the_. 

statute apply to EACH violation of any 

regulation sec forth in the HMR. 

Moreover, under the statute, each 

continuing violation of the HMR can 

constitute a separate violation for each 

day a violation continues. In section 

5] 24 of the statute. Congress prescribed 

criminal penalties for a willful violation 

of the Federal hazardous material 

transportation law or the HMR; wlUful 

violations require evidence of both 

Knowledge of the laws and regulations 

and inienl to vlolare them. 

Pan 13 of the Federal Aviation 

Regulations—Investigative and 

Enforcement Procedures 114 CFR Part 

13) governs the procedures applicable to 

enforcement of the HMR by the FAA. 

Hazmat violations occurring on or after 

August 2, 1990. may be dismissed by an 

administrative law Judge (ALJ) if a 

Notice of Proposed Civil Penalty has not 

been issued wjthin 2 years of the 

violetian, unless good cau&e for delay 

has been shown. 14 CFR 13.208(d). 

Consideration of Statutory Criteila 

In determlnine the sanction to be 

assessed, penalty criteria set forth in 49 

U.S.C. 5123 must be considered. These 

criteria ore the nature, circumstances, 

ejcicni, and gravity of the violation, the 

degree of culpability of the vioiatof. any 

hLstoty of past violations, (he ability to 

pay, any effect on thi; ability to continue 

to do busirtess, and other matters as 

justice requires, Some of thtse 

considerations already are factored to 

some extent into the categories in the 

Hazardous Material Sancdon Guidance 

Matrix. The statutory factors are further 

considered under the weighting analysis 

that is performed to Indicate the amount 

of civil penalty within the appropriate 

range, i.e.. at the minimum, moderate. 

Of maximum portion of the .sanction 

range. To comply with the underlying 

purposes of the Federal hazardous 

material transportaUoh law and HMR, a 

sanction should be Imposed that is 

sufficiently deterrent but not excessive. 

The Hazardous Materials Sanction 

CuidaiKe is designed to promote t>eccer 

consistency so that similar penalties are 

Imposed in similar cases. The Matrix 

ranges: are intended to reflect the nature, 

circumstances, extent, and gravity of the 

case as compared with other types of 

cases. Each case, however, must be 

evaluated on its own facts. A sanction 

may differ ftom the Matrix ranges when 

the facts and clrcumstance.<i of a case 

support either a greater or lesser 

penalry. When a special agent believes 

that a penal^ should exceed the Matrix 

ranges, the agent should cortsult with 

legal counsel before further processing 

of the Enforcement Investigative Report 

(ElR).-Thl5.cfiD.j!ultation Is not necessaryIn the case of a recommended penalty 

that is less than that provided in the 

Matrix. In either situation, the basis for 

the decision to go outside the ranges 

should be explained In detailViolations of Part 175 of the HMR, 

which establish particular requirements 

for air carriers and other aircraft 

operators, are contained in a separate 

matrix. However, such operators olten 

ofier hazardous materials for air 

transportadon, as well as accept arid 

transport ihem. For this rt:ason. such 

operators may be liable for violations 

both as a business entity within the 

Hazardous Materials Sanction Guidance 

Matrix, as well as specific air carrier 

violations. 

Use of the Sanction Guidance 

This guidance provides agency 

personnel with a sysleinatic way to 

evaluate a case and arrive at an 

appropriate penalty, considering all the 

relevant statutory criteria including any 

mitigating and aggravating 

circumstances. Statutory considerations 

have been factored Into the various 

ranges within the Sanction Guidance 

Matrix. Determination of where a 

sanction lies within these ranges Is 

aided by a series of weighting quesdons 

that probe the various aggravating and 

mitigating faccors thai may exist in a 

case. 

First, the weighting analysis is 

performed. Agency personnel respond 

to a series of questions to determine the 

aggregate weight of the case. The 

aggregaia weight of the case helps 

determine the sanction amount of each 

violation group within the established 

ranges of the Matrix. 

It Is important to note that 

determination of where the sanction lies 

within the Matrix is not the result of a 

mathematical computation. Evaluation 

of the case is based on the rotallty of the 

facts and circumstances. Generally, if 

the answer to a particular question 

represents a more significant aspect of a 

case, greater consideration should be 

given to that answ^. For example, 

violations involving an extremely 

dangerous substance, even In minute 

quancities, might warrant a penalty at 

ihfr maximum end of the range or even 

a penalty exceeding the Matrix ranges. 

Under the Sanction Guidance Matrix, 

agency personnel determine the 

category of violator the person falls 

within (e.g., business entity that 

regularly offers, accepts, or transports 

Hazmat) and the offense category (e.g., 

undeclared shipment within Hazmat 

quaniiiy limitations). The sanction 

ranges under the various violator 

categories take Into account the relative 

• culpability of the violator. Similarly, the 

offense categories address the nature, 

circumstances, and gravity of the 

particular offense. After determining the 

appropriate categories and ir^teraccilr^ 

box of the Matrix, agency personnel 

then determine which subcategories of 

offenses (e.g.. shipping papers) are 

alleged to have been violated. Based on 

the weighting analysis performed in 

Section I, an appropriate penalty is 

assigned for each of the applicable 

violation groups. 'ITie penalty amount 

for each relevant violation group is 

added together to reach the 

recommended sanction. 

Under Section 111 of the Guidance, the 

special agent then considers other 

relevant factors, including evidence of 

corrective action. A recommended 

sanction may be reduced prior to the 

issuance of a Notice of Proposed Civil 

Penally when there is adequate reliable 

if»formarir>n concerning the corracrivc 

acUons taken by a respondent. 

CoTTiiCiive actions that Justify reduction 

of the recommended penalty must 

exceed the minimum legal 

requirements. The special agent also 

attempts to provide information 

concerning the alleged violator's size, 

financial condition, and ability to pay a 

recortunended sariction. 

When an EIR is forwarded to legal 

counsel for enforcement action, counsel 

with give appropriate consideration to 

the recommended sanction. FAA legal 

counsel will also review the factors, 

analysis, and decerminations under the 

Hazardous Materials Sanction 

Guidance. Any basis for deviating from 

(he recommend sancdon is ordinarily 

explained to. and discussed with, the 

Investigating special agent. Final 

determination of the sanction amount 

proposed in the Notice of Proposed 

Civil Penalty is ordinarily a product of 

joint declsonmaklng and approval of the 

investigating agent and the legal office, 

Federal Aviation AdmlnlstratlDn 

Hazardous Materials Sanction 

Guidance 

This Sancdon Guidance Is divided 

Into three section.-:: 

L Case AnaV$l3, 

n. UUllUEton of the Sanction Guidance 

Matrix (Mairte), and 

HL CanalderaclQn of ot>>er Statutory Factors. 

Tht SanctJon Guidance Matrix Is coniaJned 

In Figure 1 and the Risk Cacegories ate 

contained in Figure 2. 
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Federa l Reglster/Vol. 64, No. 76/Wednesday . April 21. 1999/RuIe s and Regulations 1944 5 

I, Case Analysis (Evaluation of 

Statutory Assessment Faaors) 

This section contains a scries of 

questions designed (o assist special 

agents and attorneys in evaluating a 

particular case. The question reWew 

factors Involving the nature.-

circumstances, extent and gravity of (he 

violation, die violator's degree of 

culpability, and the violator's history of 

prior violations. Some of these factors 

are already considered to some extent 

within the various categories of the ' 

Sanction Guidance Matrix. The 

questions in this section provide 

additional consideration of the statutory 

factors and examine the existence of 

aggravating and mitigating faaors in a 

case. 

The agent/attorney answers each 

question In Section I and determines If 

a relative weight of minimum, 

moderate, or maximum should be 

assigned based on the response to the 

question. With the exception of 

Question A.I.. not all questions wlU 

apply to a given fact situation. Question 

A.I., which addresses the nature of the 

hazardous material(s) involved, is the 

only question that always receives a 

"yes" answer to one of its subquesUons 

and is considered In every case. The 

aggravating or mitigating faaors 

addressed in the questions only apply to 

the case when the question receives a 

"yes " response. Questions receiving a 

"no" resporise do not affect the 

wel^tltig of the case and are not 

considered. For example, if the violation 

resulted in harm to persor^ or properly, 

thai may be an aggravating factor in the 

case. However, the fact that the 

violation did not result in Injury or 

damage, is not a mitigating lactof and 

should not result in penalty mitigation. 

In many li^tances, the ani^wcrs to most 

or all of the questions wD) be "no" and 

Che only relevant weighting factor in 

this section will be the risk category of 

the material identified In Question A.i. 

In determining the final aggregate 

weight of the case, die responses to each 

of the questiore do rwc have to be 

equally considered. Determination of 

whether the overall case should have a 

minimuin, moderace, or maximum 

weight cannot be determined with 

mathematical certainty. Generally, if the 

answer to a question demonstrates ihat 

the factor el issue represents a more 

significant aspect of the case, greater 

consideration Is given to that factor. The 

final aggregate weiglii is based on the 

totality of the facts and circunrtslances of 

the case. Once determined, the final 

aggregate weight Is then utilized to 

arrive at the recommended sanction Tor 

each applicable violation group on the 

Sanction Guidance Matrix (Fig. 1). 

A. The Nature, Circiimstancea. Exierti. 

e n d Cravicy of the Violation 

(Factors Concerning the Shipment) 

1. What MateriaKs) Was Offered, 

Transported, or^Accepicd for Alt 

Transportation? 

(Figure 2 divides hazardous materials of 

particular classes, divisions, and 

packing groups Into three risk 

categories; Category A, Category B, and 

Category C. Find the material(s) at issue 

In Figure 2 and answer the questioivs 

below.) 

a. Is the maicrial(s) offered, 

transported, or accepted in Category A? 

If yes. assign a Maximum weight. 

b.Is die mateTial(s) offered, 

transported, or accepted in Category B? 

If yes, assign a Moderate weight. 

c. 1$ the materiaKs} offered, 

transported, or accepted in Category C7 

If yes. assign a Minimum weight. 

Guidance Noto: Th£ caCeEorlcs In Figure 2 

represent the Inlloreni risk of danger lo air 

rransponailon posed t>j ihe mauilal. V there 

1$ more than one rype of hazardous niateriAl 

involved In ihc shipment, answer this 

question usXn^ th« hazardous material in the 

iilEhesT risk category. 

2. What Quantity of the Material (s) Was 

Offered. Transported, or Accepted for 

Air Transportation? 

a. Did Che package(s) exceed the 

authorized quantity llmirationA by a 

signiQcant amount? 

If yes, consider a Moderate or 

Maximum weight depending on che 

degree to which the limitation was 

exceeded. 

Guidance Note: The Mag-lx, discussed in 

Section ni, takes Into account die factual 

sliuatlons where the quandty limluiUDns for 

che material are exceeded. This part of (he 

analysis Is intended to detErmine^whether 

further BggisvalJng circumstances cxlST 

where quantity limitations are cxcecdod by » 

slgnncant amount. Whether this ^cior Is 

assigned a moderate or maximum weight will 

depend on the degree by which the quantity 

limilaUon was exceeded. 

Eiample: The quantity limitation for 

gasoline on a passenger plane Is S liters per 

package. If a violator ofTets 30 liters in a 

single package on a passenger plane, thii may 

result in a maximum weight for this factor 

b. Were there multiple packages in the 

shipment? 

If yes, consider a Moderate or 

Maximum weight, depending on the 

number of packages and total arnounc of 

ha7.ardous material being iransporred in 

violation. 

Guidance Note; A package means a 

padcaglng phis lis contents, There may be 

muldple packages in one shipment or 

overpack. Multiple packages oAen represent 

multiple violations. Under iha Sariction 

Guidance, this fact Is considered an 

aggravating clrcutroiance rather than a direct 

multiplier of the saricrlon for eacii vioLitlon. 

Each case, however, must be evaluated on its 

particular facts, A veiy large numl>er of 

packages may result In such an egregious 

case that the' »'VerallJiicigliror che caseJS.SO 

high ihal 9 penally beyond the maxtmum 

point in th« range Is warranted. 

An Investigation will occaalonally leveai 

several shipments from the xitrne olfcror over 

» period of several days, all of which Involve 

vloladons of the HMR. 'These independent 

»CC5 of ofterlng usually arc consolldaiod into 

one EIR and addressed in one Note of 

Proposed CMI Penalty. However, for 

purposes of determining che appropriate 

sanction, each separate shipment with a 

separate air waybill or thlpplng papcn, 

separate destination, and/or any other 

evidence e.uabUshlng It as i separate 

shipment is ordinarily considered as a 

scparite Incident for purposes of applying 

the xanalon guidance analysis. It is 

suggested that the separate shipments be 

ireftted as Individual counts in lhe EIR and 

the NoUcc of Proposed Civil Penalty, with 

each count having Its own xmciion derived 

I>om application of this guidance. Note, there 

must bie sufllclenc evidence to support each 

counL 

3- Did Che Shipment Cause Damage or 

Harm to Persons or Property, or Interfere 

With Commerce? 

If yes, cotisider a Moderate or 

Maximum weight. 

Cuidance Note: The fact that no damii^ 

occurred as a result of the shipment Is not 

a miligating faaor. However, damage or harm 

may aggravBK the nature, clrcuiwtances. 

extent, and gravity of the violation. 

Depending on the degree of danage caused 

by the shipment and/or the existence of other 

aggravating factors, departure from the ranges 

may tTeJujilfled. 

B. VialAior's Degree of CulpsbiUry 

(The Matrix, Figure 1. considers the 

relative culpability of the violator. This 

section of (he analysis fijrther evaluates 

the degres of culpability of the violator.) 

1. Is che Violator che Manufacturer of 

the Hazardous Malcrial? 

If yes, consider a Maximum weight. 

Guidance Note; A manufacturer of a 

hasirdouj material is cKpecred to have 

complete knowledge of the nature of the 

hazardous material and thus, a high degree 

of culpability will ordinarily t>« imputed |o 

IL 

2. Did Someone Oti^er Than the Violator 

Prepare ihc Shipment for 

Transportation? 

If yes, consider a Minimum or 

Moderace weight. 

Guldttnee Note; Facto supporting an 

alHiTDaUve answer to this question may be 

cause n> mitigate culpability and/or puisuc a 
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separate enforcemenc action aealnst other 

responsible parues who handled the 

shlpmeni- A shipper that reshlps materials 

received from another pei^n in the same 

packaging Is independently lesponslble for 

ensuring the shipment complies with the 

HMR. Neverthelass, the rashippcr is 

gcnei-ally considered to have a lessw degree 

' ofcCTlpabtHty-for-coinpTliin'ce of thc-packai 

as received. However, if the reshlpper 

unpacks and/or repackages the shipment, the 

reshlpper remains as i^uLpablc as the original 

shipper and generally Is not accorded 

mitigation under ihds welgiitlng factor. (For 

purposes of this aectlan, a "reEhipper" refers 

to a person, other than the original offeror, 

who offers a shipment of hazardous malarial 

for transporuitlon.) 

3. Did the Violator Reasonably Fely on 

Incorrect Information From Another 

Source? 

Ifyes, consider a Minimum weight. 

Guidance Note: Detrimental or reasonable 

reliance on another party may be a mitigating 

factor when considering the violators degree, 

of culpahllny. For example, reliance on an 

Inaccurate Maienai Safety IJata SiiecT (MSDS) 

may be mlllgatlng. 

4, Does the Violator Have a History of 

Previous HMR Violations? 

Ifyes, consider a Moderate or 

Maximum weight. 

Guidance Note: To esxahUsh a violation 

history, a prior vjolaUon must be an actual 

finding of violation pursuant to a legal 

enforcement action. Special agents should 

attempt to determine the corporate sinicrure 

of the violator and whether other business 

enUUes or names are or have been usfld by 

the entity In order to obtain a complete 

violation history. The number and age of 

violations should be considered, Ordinarily, 

findings of violation more than S years old 

cany less welgiit, unless a continuing pattern 

of violation exists. 

C. Orherfsctoirs 

Each case miist be evaluated on its 

particular facts. As such, many cases 

may present unique scenarios and 

aggravating or mitigating factoid that are 

noc routinely seen. If an aggravating or 

mitigating circumstance exists chac Is 

not adequately addressed elsewhere in 

the sanction guidance, it may be 

included and assigned a weight under 

this section. The factor should be clearly 

identified and explained in the analysis 

portion of die EIR and carefully 

scrutinized by legal counsel. 

Guidance Note: For example, a slilpmenl 

of a single package containing several 

different hazardous materials may prcsc»it an 

aggravating factor. The degrae of seriousness 

at this factor will Increase if die hazardous 

materials arc Incompatible with each other 

and, therefore, Create an Increased risk 

Mitigating factore may also txist that have 

not been adequately considered. For 

example, a shipment containing a de minimis 

quantity of material or on airtounc ttjat would 

liavE qualified under the small quanthy 

exception of § 173.4 may present a mitlgaung 

factor if a<; a result there vws a reduced risk 

10 safety In transportation. 

£>. Deicrmlre the Final AggregAte 

WalghiofttieCase 

- All Uie responses/wclgHts~Ee" 

evaluated to determine a final aggregate 

weight of the case (Minimum. Moderate, 

and Maximum). Questions receiving a 

"no" response will not be included in 

tills evaluation. To determine the final 

aggregate weight, the agent/attorney 

muse exercise his/her discretion In light 

of the scacucory factors and knowledge 

of the particular facts of the case. The 

fact! cJT Ihe particular case will dictate 

the relative importance of each of ihe 

weighting factors In reaching a final 

aggregate weight. The final aggregate 

weight should be decided as a result of 

careful analysis, not a mathematical 

averaging. It Is possible that a single 

weighting factor may outweigh all 

oflicrs. The agent/attorney's analysis 

should always be explained in this 

regard. 

Example: A ca.'.c involving « hazardous 

material In the lowest risk category may be 

evaluated to have a maximum weight 

because of the Intgc quantity shipped or the 

damajje resulting tlom the shlpmcnL 

H. Utilize the Matrix (Figure 1) 

The sanction ranges under the offeror 

and offense categories of che Sarv:tion 

Guidance Matrix reflect the relative 

culpability of the violator and the 

nature, circumstances, extent, and 

gravity of che case. Consideration of 

these particular scacucory factors under 

the Federal hazardous material 

transponation law is built into the 

Matrix. Furcher analysis of the siaiuiory 

factors Is required co decermine the 

appropriate sanction within che ranges 

established under the Matrix. This 

analysis is performed In Section 1. Alter 

determining the final aggregate weight 

of che case under che Section 1 analysis, 

that weight is applied to the appropriate 

macrix range co identify the 

recommended sanction amount for each 

of the relevaru violation groups and for 

che case as a whole. Altiiough che Notice 

of Proposed Civil Penalty may cice 

ntimerous violations of a particular part 

or subpan of the HMR, unless upward 

departure IsJusriRed. a single penalty 

amount for each violation group is 

ordinarily used co reach the full 

sanction. 

A. Instructions 

1, Identify the appropriate cacegory 

for the type of entity and che rtacure of 

Uie offense involved in the case. Refer 

to the Definitions Section that follows 

the Matrix in Figure 1 for guidance. Co 

to che Intersecting box and Identify the 

applicable sancQon range for each 

violation group, 

2. Apply the conclusion reached in 

the Section I w^ightmg analysis lo 

assign a sanction amount within the 

JtDiQimum. mnrlpraii^, or maximum 

ponlon of che sanction range for each 

relevanc violation group. TVe 

recomrtiended civil penally at this stage 

is the sum of the sanctions for each of 

the applicable vloletlon groups. A 

sanaion should not be Bs."MSscd for a 

violation group if there have been no 

violations of that part or subpart of the 

HMR- The sanction amount for each 

violation group need not be identical 

but ordinarily Is vtrtthin die portion of 

the particular sanction range Chat 

represents the overall weight of the case. 

3. Departure from the Matrix ranges— 

The Matrix is designed to cover Ae 

majority of cases involving violations of 

the HMR. The facts and clrtumstances 

of a particular case, however, may 

Justify either an upward or downward 

departure from the Matrix ranges. This 

sanction guidance anticipates and 

encourages departure from the Matrix 

ranges when justified. A case involving 

violations in which the nature, 

circumstances, extent, and gravity of The 

incident are particularly severe or 

egregious, may Justify upward depanure 

&om die Matrix. If the investigating 

agent believes, based upon che facts of 

a case, that a penalty should exceed the 

Matrix ranges, the agerrt should consult 

with legal counsel before further 

processing of the EUt Conversely, the 

investigating ager^r may believe that 

mitigating faccors Justify a downwanJ 

departtjre from the Matrix range. 

Consulcation wiih legal counsel is not 

necessary In che case of a recommended 

penalty chat is less than thac provided 

In the Matrix. In either situation, 

however, che agent is to provide a 

detailed explanation of the basis for the 

decision to go outside the ranges. 

4. Violations of Pan 175 regulations, 

wliich establish particular requirements 

for air carriers and other aircraft 

operators, are contained In a separate 

matrix. However, such operators often 

o/Tei" Hazmat for air irarisportation as 

well as accept and b-anspon It. As such. 

che operator may be liable for violations 

as a business entity within the main 

Matrix as well as for the specific Part 

175 violations. 

in. Impact ol Other Statutory Faaors 

The Federal hazardous material 

transportation law also requires 

consideration of a violator's ability to 

pay a civil penalty, the impact of die 

civil penalty on die violacor's ability co 
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continue to do business, and ocher 

matcers chat Justice requires. 

Consideration of these factors may 

result in adjustment of che 

recommended civil penalty cslcularcd 

in Section IL In situations where the 

agent or attorney Is in possession cif 

1. The investigating agent will attempt 

to include financial information as an 

exhibit in the EIR. It is anticipated tihat 

this Information, if available, will be 

obtained from reliable financial data 

bases. Financial documentation should 

Include, but need not be limited to. 

miligating-triforTBatlon, sudi as inability-—infermation coneemine the violator's 

CO pay the recommended civil penaicy or 

corrective action taken, reduction of the 

recommended penalty may be 

appropriate. Mitigating Infornwtion 

should be sufBcientiy reliable, 

uncontrovened, and documented in 

order to support reduction of the 

recommended clvU penalry prior to 

issuing the Notice of Proposed Civil 

Penalty. 

A. Ability To ?ay/Continu6 in Business 

Historically, the FAA has considered 

these tectors after che issuance of the 

Notice of Proposed Civil Per«I(y due co 

che absence of reliable financial 

information on which ro base a 

reduction prior to the issuance of a 

Notice. This Sanction Guidance 

recommends that the special agent make 

efforts to obtain reliable irtformadon 

rsgatdlng tiw violator's size and 

financial condition for review prior to 

die issuance of a Notice. Tliis 

information will be transmitted to che 

legal office for consideration. It is 

recognized thac it may not always be 

possible for the special agent and/or 

attorney to obtain reliable financial 

information on a particular respondent, 

thac financial circumstances change and 

that Information may be provided after 

die Issuance of the Notice that may 

warrant further consideration of a 

respondent's ability to pay. 

corporate structure, business address, 

ofRcert. number of employees, and 

gross revenues. 

Z. The Investigating agent provides a " 

statement or comment with respect co 

die financial Infotmallon obtained but 

ordinarily does not evaluate che 

financial condition of a respondtent with 

respect to its ability to pay a prtiposed 

clvU penalty. The investigating agenc's 

statement should encompass areas such 

as the number of employees, gnjss 

revenues, and nature of business of the 

violator. 

3. FAA legal counsel reviews the 

financlaJ Information provided in the 

EIR and evaluates its sufficierjcy and 

relevance to the recommended civil 

penally. Legal counsel may determine if 

more current information exists 

concerning the financial condition of a 

respondent and if chac Information 

substantially differs from che 

information available at the time of 

preparation of the EIR If there Is a basis 

for determining that (he recommended 

sanction is inappropriate based upon 

Che financial iiiformation provided in 

the ElR, the recommended sanction Is 

adjusted prior to Issuance of the Notice 

of Proposed Civil Penalty, This Is a 

preliminary consideration of a 

company's ability to pay. As such, preNotlce adjustment of a recommended 

civil penaicy does not preclude further 

MATRIX AND DEFINITIONS 

[Rguie 1] 

consideration of a re."5pon dent's 

financial claims after issuance of the 

Notice. 

4, If legal counsel determines that a 

respondent qualifies as a small bU5ine.<^s 

aniity, cauTts^l may consider that status 

under the Small Business Regulatory 

Enfcrrremtmt Fairn«s-Acr(SBREFA) 

with respect lo the appropriateness of 

the recommended civil penally. A 

. respondent's status as a small business 

entity may be considered in conjunction 

with analysis of the scacucory factor:;. 

B. Con^ctive Action 

The most common "ocher matter" that 

che FAA takes into consideration Is 

corrective action. Corrective uction that 

results in mitigation is remedial action 

chat exceeds the minimum legal 

requirements. The primary tactots in 

determining the aj^ropriate arrKHint of 

penalty reduction arc the e)rtenc and 

timing of the cotrecdvc action, In other 

words, mitigation is deccrmined on the 

basis of how much corrective action was 

taken and how quickly the action was 

cakorL Systemic change intended to 

prevent future violations should be 

given greater consideration. Similarly, 

corrective action that commences upon 

che violator's first notice of the vloJatton 

ordinarily Is given greater credit than 

corrective action that commences only 

after the Notice of Proposed Civil 

Penalty has been Issued. 

Mitigation of a recommended civil 

penaicy based upon corrective action . 

should be referenced in the Notice of 

Proposed Civil Penalty so chat the 

respondenc is on notice that credit 

already has been given for ."aid action. 

Offense categories 

(. Declsred Shipment: 

1. Shipping Papers 

2. Labels 

4. Packaging _ 

5. TralnlDg 

6. Emerg. Response _ 

II. Ondeclsred Snipmeni Wlhtn Haanal Quantity LMteiionE: 

1. Shipping Papers ,.,. 

2. Labels . 

A. Packaglr>g 

7. ReleaES inio Environ _ 

8. Olher _... 

A. Individual 

250-500 

250-500 

250-500 

250-500 

250-500 

250-500 

250-SOO 

250-1.000 

250-1.000 

250-1,000 

250-1,000 

250-1,000 

230-1,000 

250-1.QOO 

B, BuBinesE entity 

250-1.000 

2SO-1.0O0 

250-1,000 

250-1,000 

260-1,000 

2SC^-1,000 

250-1.000 

250-1,000 

1.500-7,500 

1.500-7.500 

1,500-7,500 

1.500-7.500 

1.500-7,500 

1.500-7.500 

1,500-7,500 

1,500-7.500 

C, Business entity 

thai uses Of handles Haanal in 

the course of t)UElness 

500-2,000 

500-2,000 

500-2,000 

500-2,000 

500-2,000 

500-2.000 

500-2,000 

SOO-2.000 

2.500-10,000 

2500-10,000 

2.500-10,000 

2,500-10,000 

2.500-10.000 

2,500-10,000 

2.500-10,000 

2.500-10,000 

D. Business entity 

thai regulaiV oilers, accepts, or 

iransporis Hasmai 

1,000-5,000 

1,000-5.000 

1,000-5,000 

1,000-5.000 

1,0QO-S,000 

1.000-5,000 

1,000-5,000 

1.000-5,000 

S,000-1Z.OOO 

5,000-12.000 

5,000-12.000 

5,000-12,000 

5,000-12.000 

5,000-12,000 

5,000-12,000 

5,000-12.000 
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MATRIX AND DEFlNmoNS—Continued 

(Rgure 1] 

Offense calagories 

III. Ondederad Shipment Hazmat Forbidden on, or cxceedE 

qty limits tor, Passenger Aircraft; 

1. Shipping Papers 

2. Labels 

3. Markings 

4. Packaging 

5. Traiolna -

8. Emerg. Resporise 

7. Release InlB Environ _ 

8. IMher 

IV. Undeclared Sriipmemt Foitiitlden on, or exceeds qty limits 

(or. All Airaan: 

1. Shipping Papers 

2. Labels 

3. MarlqngB _ 

4. Packaging 

5. Training _ 

6. Emerg. RaEponse _ _ 

7. Release Into Environ , 

8. Olher 

V. InlBntlenal or DeKtjcialc Violation 

A. Individual 

500-5,000 

500-5.000 

500-5.000 

500-5.000 

50t>-S,boO 

500-5.000 

500-5.OD0 

500-27,500' 

500-27,500 

500-27.500 

500-27,500 

500-27,500 

500-27,500 

500-27,500 

Consult Legal 

B. Business entity 

5,000-15.000 

5,000-15,000 

5,000-15.000 

5,000-15,000 

5,000-15.000 

5.0DO-15.000 

5,000-15,000 

3,000-15,000 

7,500-27.500 

7,500-27.500 

7,500-27.500 

7,500-27,500 

7,600-27,500 

7,500-27.500 

7,500-27,500 

7.500-27,500 

Consult Legal 

C, Bueinese enllly 

thai uses or handles Harmat in 

Bie course of buEk 

ness 

7,500-20,000 

7,500-20.000 

7.500-20,000 

7,500-20,000 

7,500-20,000 

7.5O0-20.0O0 

7,500-20,000 

7,500-20.000 

10,000-27,500 

10,000-27.500 

10,000-27,500 

10,000-27.500 

l0,000-,27.500 

10.000-27.500 

10.000-27,500 

1Q,000-:27,600 

ConsuH Legal 

0. Business entity 

inal regularly otters, accdple. or 

(ranspQits Hazmat 

10,000-27,500 

10,000-27.500 

10,000-27,500 

IO.ODO-27,500 

1fl.O0D-27,5DD 

10,000-27,500 

10000^7,500 

10,000-27,500 

15,000-27,500 

15,000-27,500 

15.000-27,500 

15,000-27,500 

15,000-27,500 

15.000-27,500 

15,000-27,500 

15,000-27,500 

Consult Legal 

Air carrier ar)d olher aircraft operator viotslions 

Failure to comply with Paris 171,172, or 173 rcqulremenlG of Ihe HMR as an offeror of Hazmat 

Impropier acceptance of Hazinat for air ttBrvsportallon (i.e.. quantily, labeling, maiVing, paelcaging, and 

shipping papers) Sae 49 CFR 17S,30(a) {^)-^^) 

Failure to inspeel HaZTial shipment propeiriy. Sec 49 CFR 175.30 (b). (c), (d), (e) -.... 

Improper storage/securing or Hazmat at»ard aircraft 

Failure to pmvidc Hazmat (raining, malnlain records of trainrtg, or meet minimum requirsmenis lor 

Hazirialtralning .'. _ 

Failure to notily FA A properly or inddeni/dlscrapancics in Hazmat fihipmem 

Failure to provide notice lo Iho pilDl-in-commend 

Other Part USvipiaiions _ 

<' Use (Ttain Matrix. 

£. Gnjup I & II air 

carriers and olher 

alrcralt operators 

0) 

5,000-27.500 

10.000-27.500 

10,000-27,500 

10.000-27,500 

5,000-15,000 

5,000'15,000 

5.000-15,000 

F. Group III & tV 

air carriarE and 

other alrcraB operalQts 

2,500-15,000 

5.00Ck-l5,000 

5.OOO-15.OO0 

5.000-13,000 

1,000-5,000 

1,000-5.000 

1,000-5,000 

Definitions 

(a) Alf Carrier aftd Other Aircraft 

Operator Groups (I. U, IE IV)—Ait 

carriers and other aircrait operators are 

divided into two cateeories for purposes 

of determining an appropriate sanction, 

These categories track the air carrier 

groups established in FAA Order No. 

2150.3A. Appendix 1. Compliance/ 

Enforcement Bulletin 92-1, but also 

iridudes any operator of an aircraft chac 

is operated "in commerce" as defined in 

the Federal hazardous macerials lavi. 

including Part 129 Foreign Air Carriers, 

Pan 125 OperaioK. ar»d Part 91 

Operators. Group I is comprised of air 

carriers and ocher aircraft operators with 

annual operating revenue of 

Jl 00,000,000 or more. Group II is 

comprised of air carriers and other 

aircraft operator.'; thac hold Part 121 

certificates or have SOor more pilots or 

operate 25 or mor« aircrafC, with annual 

operating revenue of less than 

1100,000.000. Croup III is comprised of 

air carriers and other aircraft operators 

thai do not meet the criteria for Croup 

U with (1) 6 CO "19 pilots, or (2) 6 to Z4 

aircraft. Croup IV is compri.sed of all 

other air carriers or aircraft operators 

not meeting the critcrifl for Croups I, H. 

orin. 

(b) Business £niity—The violator is a 

business, corporation, partnership, SubS Corporation, sole proprlecor, 

association, or any type of conunercial 

entity. An individual who offers a 

hazmat shipment in air transportation in 

the course of his/her self-owned 

business falls into this category. 

Includes all entitie.<; defined under the 

HMR's definition of •person." (49 CFR 

17 l.S) with the excepdon of an 

individual as defined herein. 

(c) Business Entity chat Ragularly 

Offers, Accepts, or Transporrx 

Hazardous Materials in the Course of its 

Business.—^A manufaaurer or 

distributor of Hazmac falls into this 

category. A freight forwarder would also 

fall into this category, The aspect of . 

"regularly" offering covers a business 

endty that offers Hazmat with some 

anticipated frequency or purports to do 

so, e.g.. a catalogue company that offers 

hB73rdous material to Its customers 

would fall Into this category, even 

though its actual sale or transportation 

of che Hazmac is Irtfrequent or limited. 

(d) Business Entity ihtit Uses, Handles 

Karjnat in the Course of Its Business— 

This fjitegory encompasses the busines.<; 

thai utilizes 1-Iazmai in its business but 

does nor offer it for transportation on a 

regular basis, as described above. For 

example, a manufacturer of a nonHazmat produa thac ijses Hazmac In the 

manufacturing process could fall into 

this category. It must be established that 
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Federal Regisler/Vol. 64. No. 76/Wednesday, April 21, 1999/Rules and Regulations 19449 

the company ordinarily does not offer 

the Hazmat it utilizes for cransporlation. 

and (he shipment in this instance 

represents an isolated incident. This 

type of business Is held to a higher 

standard than che business entity thai 

has no regular Involvement wl th 

HazmaL The desdibed-btisii'ieas entity"' 

receives the subject hazBrdou."! material 

in cransportuiion and uses it in let 

business; thus, it is clearly on notice of 

che hazardous nature of the material and 

the regulatory requirements to which 

the Hazmat is subject. 

(e) Declared Shipment—A declared 

shipment, for purposes of this macrbc 

only, is one thac complies with one or 

more of che communicative 

requirements of ihe HMR, i.e., it has 

markings, labels, and/or partiallycorrect shipping papers. A package chat 

has shipping papers that declare lhe 

contents as hazardous material but is 

otherwise'not mari^ed or labeled fails 

into this cacegory. Similarly, a properly 

marked and lab^ed package chat lacks 

shipping papers also fails into this 

category. A case falls into this category 

where there Is clear indication that the 

offeror made some atccmpc to give 

notice of che hazardous nature of the 

shipment. 

(f) Forbidden orEicceeds Quanary 

Limits for Passenger Aircraft—A 

shipment falls into this cacegory if the 

quantity of Hazmai per package exceeds 

the c{uancity limitations for passengercarrying aircraft or If ihe particular 

hazardous material is forbidden in air 

transportation on passenger aircralL 

(^ Forbidden on or Exceeds Quantity 

liniicsfui All Alluaft—A shlpmei^t will' 

fall into this category if the quandiy of 

hazardous maierUl per package exceeds 

the allowable amount for boih passenger 

and cargo aircraft or the Hazmat is 

absolutely forbidden in air 

tran^>onBCion. 

(h) Hazmat—A "hazardous material," 

as defined in 49 CFR 171.8, includes 

and is interchangeable wich che term 

"dangerous goods, " as used in the 

Internacional Civil Aviation 

Organisation (ICAO) Technical 

Inscrucclons. 

(i) J'nd!ii'idijaI-~An individual who 

offers a shipment of hazardous material 

in his/her personal capacity without any 

business purpose or as part of a 

commercial enterprise on the part of the 

Individual. 

(y Intentional or Deliberate 

Violation—fii shipment falls Into this 

category when there is evidence that the 

offeror, acceptor, air carrier, or aircraft 

operator had knowledge of the 

re<juirements of the HMR and wlJlfiiUy 

circumvented or attempted lo 

RISK CATECSORIES 

[Figurs 2) 

circumvent ttvose requirements. For 

example, an oiTeror who places a 

properly marked and labeled Hazmat 

shipment along with properly 

completed shipping papers, into an 

overpack marked as "printed material." 

lias commirced an inienclonal or 

dcUlJeface vtelotion. Iivtiils type of case;— 

che invcscigatlng agent shall consult 

wich FAA legal counsel and follow 

agency guidance for potential criminal 

violations of the HMR. 

(k) Undeclared S/iipmcnr—This is a 

shipment thac has no indication of its 

hazardous material concents and/or no 

Indication thac die offeror 

communlcaced che hazardous nature of 

the shipments contents to persons who 

accept or transport. 

(1) Within Hazmat Quantity 

LlmltatJoTjs-The amount of hazardous 

material Is within the quanrity 

limitations per package as established In 

che § 172.101 Table (49 CFR 172.101) for 

che type of aircraft on which the 

shipment traveled. Forea:ample, If che 

shipment was offered for transportation 

on a passenger aircraft, the quantity of 

hazardous material was within the 

established limit for cransporuiiion by 

passenger aircraft. If che shipment was 

offered for Lrarjsportation on a cargo 

aircraft, the quantity llmifaiions for 

cargo aircraft apply. 

Category "A" (Maximuni Weight) 

Category "A" inaierials are maierlals Ihal when released in lhe contlnes »f an altrrafl can peieniially have a cstastrophic effect on an aircraft's ability lo continue safe fligiit, resullng in a ciasti er err^eigancy landing causing injuo' or death to passcngeis and flightaew. as well ss 

persons on ate ground. 

Class 1 Exptestves: Divfelon 1.1,1.2, 1,3. 

Class 2 - Compressoe Gases Wl 2.1, 2.2 vrllh Subsidiary Risk 5.1' arw All 2.3 PIH Zones A-D. 

Clase 3 Flammaole LiquidE PG I. II, and (PIH). 

Class 4 Division 4.1 Flammable Solids PG I, & (Matches). 

Division 4.2 Spontaneously Combjstible Maienals PG I (Pyropboric). 

Division 4.3 Dangerous Whon Wet PG I. 

Class 5 DMskm 5.1 Oxidizing Liquids and Solids PG I, H. e.g., "Cfiemical Oxygen Generators''. 

DivisiuT) 5.2 Organic Per05(lde« PG II (Type A. 6, C, or D), 

Class 6 , -..- Division 6.1 Poisonous Liquids PG I (PW). 

aass 7 Cargo Airergft Only QuanlKics on Passai^ger Alrcrsfl. 

Class 8 CoriDaivB li^alerlai Liquid PG I artd (PIH). 

Forbidden Materials (See 49 CFR 173.21 & ICAO Technical InslrucUonB). 

Forbiddett Hazmai Haled In Dangerous Goods Table 49 CFR 172.101. 

Category "B" (Moderate Weight) 

The materials lisled in Category ''B" are materials lliai inay not pose an immediate threat lo the safety of a fllghl. but can cause death or Injury to persons due ID unlnler>ddd relsBses in aircraft cabh areas, and potential damage to alrcralt structures over a longer period of lime <jue 

to undiscovered releases on alrcrafl Blructutal componenlB. 

Class 1 

Class 3 

Class 4 

Qass 5 

Class e 

DiviBion 1.4,1.S, 1.6. All c:ompaliblllty (atoupe. 

PG III Flarnrrtabic Liquids. 

Division 4.1 Flammable Solids PG II, 111. 

Division 4.2 Spontaneously Combustible Maierials PG III. 

Division 4,3 Dangerous WTien Wet PG II, III. 

Division S.1 Oxidizing Liquids or Solids PG III. 

Division 5.2 Organic Peroxides (Type E. F, G). 

Division 6.1 Poisonous Liquids PG I. II (NON-PIH). 

Division 6.2 Infectious Substances. 
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19450 Federal Regisler/Vol. 64, No, 76/Wednesday. April 21. 1999/Rules and Regulations 

RISK CATEGORIES—Continued 

(Figure 2J 

Class 7 

Class e _ _ 

Radioactive f^alerlala, yellow label 111, yellow label II, and while label 1. 

Liquids PG II, III SoMs PG 1, II, III. 

Category "C " (Minimum WelshI) 

The materials lisicd in Calegory " C ara materials thai ptvseni the ieastamounraCnB 

Class 2 

Class 6 

C^ass .7 

Class 9 

2.2 Nonnammable Gas. 

Division fl.1 Packing tVoup Ml. 

All other RA M (LSA, LTD QTY, Insinjments and ArUcles). 

MIscellanoous Dangerous Goods (ORM-D and Consumer Commodity). 

Note: This guidance Is nol Intended to replace Ihe experienced judgment to a special agent who is convinced, based on the evidence and 

facts of a case, that the failure of an air earner, shipper, iielghl forwarder, or passenger lo follovv established regulations has poaed a risk to 

aviation safety. 

Issued in Washingion. DC on April 14, 

1999. 

Jane F. Garvey, 

Admlnlstiaior. 

[FR Doc, 99-99*3 Filed 4-20-99: 8:45 om] 

aiLLINO CODE 4»1«~1]-M 

SECURITIES AMD EXCHANGE 

COMMISSION 

17 CFR Parts 202,240,242 and 249 

[Release No. 34~4i297; File No. S7-12-9B] 

RIN 3235-AH41 

Regulatloi> of Alternative Trading 

Systems; Technical Amendment 

ACIENCY: Securiiies and Exchange 

CDinniission. 

ACTION; Final rule: technical amendment 

and revised compliance date. 

SUMMARY: The Securities and Exchange 

Commi,";.'iiDn is modifying the 

compliance dates for Rule 301 (b)(3) and 

making a technical change to Rule 

202,3. These and odier Riles and rule 

amendments relate ro the regulation of 

alternative irading systems and 

exchanges and were published on 

December 22. 1998 (63 FR 70844). The 

effective date for the other rules and 

amendments published in 63 FR 70844 

remains April 21,1999. except for the 

effective date for §§ 24 2.301 (b) (5) (1) (DO 

and (E) and §§ 242.301 (b)(6)(i){D) and 

(E). which remains April I. 2000. 

DATES: Effective Date: April 21, 1999 for 

amendment to § 202.3. 

Compliance ^re ; Alternative trading 

systems must comply with 

S 242.301(b)(3) with rcsp«ct to the 50 

securities listed in Schedule A by 

Augu.<5t 23. 1999; with respect to the 

securities listed on Schedules A and B 

by September 28. 1999; with respect lo 

the securities listed on Scbedtjles A, B 

and C by April 25, 2000; and with 

respect to all securities by June 20, 

2000. 

FOR FURTHEK INFORMATION CONTACT: 

Elizabeth King. Senior Special Counsel. 

at (202) 942-0140. Constance Klgglns, 

Special Counsel, at (202) 942-0059, and 

Kevin Ehrlich. Attorney, ai (202) 942-

077S, Division of Market Regulation, 

Securities and Exchange Commission, 

450 Fifth Street, N.W., Washington. D.C. 

20549-1001, 

SUPPLEMENTARY INFORMATION: 

I. Background 

On December 8, 1998, the Securiaes 

and Exchange CommlsiHpn 

("Commission") adopted new rules and 

rule amendments to allow alcernarlve 

trading systems to choose, whether to 

register as naaonal securities exchanges, 

or to register as broker-dealers and 

comply with additional requirements 

under Regulation ATS, depending on 

their activities and trading volume.' The 

effective dale for rnosi of these new 

rules and rule amendments is April 21. 

1999. The Commission staled in the 

adopting release thai, prior to April 21, 

1999. it would publish a list of those 

securities with respect to which 

alternative trading systems must comply 

with Rule 301 (b)(3) on April 21, 1999 

and those securities with respect ro 

which alternative trading systems must 

comply With Rule 301 (b)ri) on August 

30,1999. Rule 301(b)(3) requires an 

alternative trading system to provide to 

a national securities exchange or 

national securities association, for 

Inclusion in the public quotation 

system, the prices and sizes of lis best 

priced buy and sell orders, that are 

displByed to more than one person, in 

each covered security in whiich the 

alternative trading system represents 

5% or more of the total trading volume.''-

1 S«eur>t>M Exchange Act Relnw No. 40T«0 

(D«c B. IS9B). S3 F9 70«44 (Dec. IZ. I99B). 

'irCFRZlZ.SOl(D)(3), Forpurpexesor 

KegulaUons ATS, » "ccvcrcd securlij'" Include! «11 

excltange.lIHtd. Nudaq NM securiUes. and Nudaq 

Small Cap lecudllea, orhtr chmi doti and 

convHlible ncurltlu, Sae Rule 1|AC1-1(B1(E), IV 

II, Delay of the Compliance Dates for 

Rule 301 (b)(3) 

One major alicrnative trading .-fystem 

has indicated that it will be unable to 

comply with the requirements of Rule 

301 (b)(3) by the original compliance 

dates without putting the operation of 

iis system at serious risk of failure. The 

operational failure of a major alternative 

trading system could Inicifcre with the. 

markets as a whole. Accordingly, the 

Commission believers it necessary lo 

a4just the compliance dates for Rule 

301 (b)(3) as follows: 

August 23. 1999: Compliance with 

Rule 301(b)(3) wltli respect to the 50 

Nasdaq securities listed on Schedule A. 

attached in [he appendi:it. 

September 28, 1999: Compliance vidd^ 

Rule 301 (b)(3) for the 50% of Nasdaq 

securities listed on Schedules A and B, 

attached In the appendix. 

April 25. 2O00; Compliance with Rule 

301 (b) (3) for the 75% of Nasdaq 

securides listed on Schedules A, B, and 

C, attached in the appendix. 

June 20, 2000: Cranpliance with Rule 

301(b)(3) for all Nasdaq securities. 

Schedules A, B. and C were created 

by ranking all covered .lecurltles traded 

on Nasdaq by ihclr January 1999 

volume, and Including an equal number 

of securities from each decile. Some 

securities that were not traded on 

Nasdaq in January 1999 may commence 

Irading on Nasdaq subsequently, 

Alternative trading 5y5Cem.s may wait 

until June 20, 2000 to comply with Rule 

301(b)(3) with respect to these 

securities. 

All other compliance dates for the 

rulES and rule amendments adopted last 

December remain the same. The 

Commission encourages those 

alternative txadlng systems that are able 

to comply with Rule 301 (b)(3) on April 

21. 1999 to do so. 

CFR 240.llAcl-r(a)(6)l Rule30e(fi), 17 CFR 

242.S00(g).