[Federal Register Volume 63, Number 104 (Monday, June 1, 1998)]
[Rules and Regulations]
[Pages 29668-29670]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14285]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 107

[Notice No. 98-5]


Hazardous Materials Ticketing Program

AGENCY: Research and Special Programs Administration (RSPA), DOT.

ACTION: Notification continuing the ticketing program.

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SUMMARY: On May 15, 1996, RSPA initiated a pilot program for issuing 
tickets for certain hazardous materials transportation violations. The 
goal of the program has been to streamline administrative procedures, 
cut costs, and reduce regulatory burdens on persons subject to Federal 
hazardous materials transportation law. Tickets have been issued for 
violations that had little or no direct impact on safety. Penalties 
have been substantially reduced for persons who paid the amounts 
assessed in the tickets.
    This program is consistent with the recommendation in the National 
Performance Review to streamline the enforcement process by 
implementing pilot programs to offer greater flexibility in enforcement 
methods. RSPA's ticketing program has successfully cut costs, 
simplified the processing of violations, and achieved compliance 
through more efficient and effective processes. RSPA has decided to 
make ticketing a permanent part of its compliance program.

EFFECTIVE DATE: May 15, 1998.

FOR FURTHER INFORMATION CONTACT: John J. O'Connell, Jr., Director, 
Office of Hazardous Materials Enforcement, (202) 366-4700; or Donna L. 
O'Berry, Office of the Chief Counsel, (202) 366-4400, Research and 
Special Programs Administration, U.S. Department of

[[Page 29669]]

Transportation, 400 Seventh Street SW, Washington DC 20590-0001.

SUPPLEMENTARY INFORMATION:

I. Background

    The Research and Special Programs Administration (RSPA) is the 
administration within the Department of Transportation (DOT) primarily 
responsible for implementing the Federal hazardous materials 
transportation law (Federal hazmat law), 49 U.S.C. 5101-5127. RSPA does 
this by issuing and enforcing the Hazardous Materials Regulations 
(HMR), 49 CFR Parts 171-180.
    Under delegations from the Secretary of Transportation [49 CFR Part 
1], the authority for enforcement under Federal hazardous materials 
transportation law (Federal hazmat law), 49 U.S.C. 5101-5127, is shared 
by RSPA and each of the four modal administrations: the Federal Highway 
Administration, the Federal Railroad Administration, the Federal 
Aviation Administration and the United States Coast Guard. RSPA has 
primary jurisdiction over packaging manufacturers, reconditioners, and 
retesters (except with respect to bulk packagings, which are the 
responsibility of the applicable modal administrations) and shared 
authority over shippers of hazardous materials.
    RSPA's Office of the Chief Counsel (OCC) may initiate 
administrative proceedings for violations of the HMR, and these 
proceedings may result in a civil penalty, an order directing 
compliance actions, or both. 49 CFR 107.307. OCC initiates an 
administrative proceeding by mailing a notice of probable violation 
(NOPV) to a person believed to have violated the HMR. 49 CFR 107.311. 
The NOPV specifies the alleged violations(s) of the HMR, states the 
proposed penalty, and includes a copy of the inspection/investigation 
report. Within 30 days of receiving the NOPV, the recipient of the 
notice may admit the allegations by paying the proposed penalty, make 
an informal response, or request a formal hearing. 49 CFR 107.313, 
107.315.
    The recipient who chooses to respond informally submits a written 
response to OCC to contest the alleged violations or the proposed 
penalty. OCC considers the inspection report, the response, and any 
additional evidence obtained to determine whether the recipient 
committed the alleged violations and, if so, the appropriate penalty in 
accordance with the statutory criteria for penalty determination, 49 
U.S.C. 5123(c). See also RSPA's civil penalty guidelines at 49 CFR 107, 
Subpart D, Appendix A. If the recipient requests an informal 
conference, RSPA provides an opportunity to supplement the written 
response in person or by telephone with the OCC attorney and the 
inspector. Information obtained by OCC during the informal conference 
becomes part of the case file. Unless the NOPV is withdrawn, the Chief 
Counsel issues an order finding a violation or violations and, for each 
violation found, assesses a civil penalty. The order may be appealed to 
the RSPA Administrator. See generally 49 CFR 107.317, 107.325(b).
    Alternatively, the recipient may request a formal administrative 
hearing on the record before an ALJ from DOT's Office of Hearings. At 
the conclusion of the hearing, the ALJ determines whether the alleged 
violations have been committed and, if so, imposes a penalty in 
accordance with the statutory assessment criteria. Either party may 
appeal a decision of the ALJ to the RSPA Administrator. See generally, 
49 CFR 107.319, 107.325(a).
    At any time during an informal or a formal proceeding, RSPA and the 
recipient of the notice may agree upon an appropriate resolution of the 
case. 49 CFR 107.327.

II. Procedures Under the Ticketing Program

    On August 21, 1995, RSPA published a notice of proposed rulemaking 
(NPRM), under Docket HM-207E [60 FR 43430], seeking public comment on a 
proposal to implement a pilot program for ticketing certain violations 
of the HMR. On October 17, 1995, RSPA extended the comment period for 
an additional 30 days. See 60 FR 53729. On February 26, 1996, RSPA 
published the final rule for the ticketing program; that rule contained 
no expiration date. The final rule was effective on May 15, 1996. See 
61 FR 7178.
    Under the program, the Associate Administrator for Hazardous 
Materials Safety is authorized to issue tickets for certain HMR 
violations that were handled through the civil penalty process. 
Violations eligible for inclusion in the pilot ticketing program are 
those that do not have a substantial impact on safety. Because the 
program is designed to ease administrative and regulatory burdens on 
persons subject to enforcement proceedings under the HMR, violations 
eligible, under 49 CFR 107.309, for letters of warning generally are 
not included in the pilot ticketing program. This procedure will remain 
the same.
    The preamble of the final rule also suggested a number of 
violations for inclusion in the ticketing program. These violations 
included, among others, operating under an expired exemption, failing 
to register as a hazardous materials shipper when required, failing to 
maintain training records, and failing to file hazardous materials 
incident reports. In the final rule, RSPA indicated that, based on 
comments received and experience gained through administration of the 
pilot ticketing program, additional types of violations might be added 
to the program. RSPA has determined to continue to include all of the 
previously mentioned violations as part of the ticketing program. In 
addition, RSPA has added to the program violations such as failing to 
conduct hazardous materials training, marking a packaging with 
unauthorized DOT specification markings after October 1, 1994, using 
unauthorized DOT specification packagings after October 1, 1996, and 
failing to follow the packaging manufacturer's closing instructions for 
closing a package. RSPA believes that there is a continuing need for 
flexibility and, therefore, will not establish a definitive list of 
violations under this program.
    RSPA will continue its policy of not processing violations under 
the ticketing program when more serious violations are also alleged. 
Furthermore, a previous ticketing violation will continue to be 
considered a ``prior'' violation in the event of a future violation of 
the HMR by the same party.
    As contemplated in the final rule, the Associate Administrator for 
Hazardous Materials Safety has delegated the ticketing authority to the 
Director, Office of Hazardous Materials Enforcement (OHME), who in turn 
has redelegated the authority to the six OHME unit chiefs. RSPA field 
inspectors conduct the inspections of parties. Unit chiefs then 
evaluate the inspector reports and issue tickets to parties when 
appropriate. Tickets are not issued on the spot by inspectors following 
an inspection.
    A ticket includes a statement of the facts supporting the alleged 
violation. In addition, the ticket sets forth the maximum penalty 
provided by statute, the proposed penalty determined according to the 
RSPA civil penalty guidelines, see 49 CFR part 107, Subpart D, Appendix 
A, and the ticket penalty amount. The ticket states that the recipient 
must pay the penalty or contest the violation or penalty within 45 days 
of receipt of the ticket.
    Typically, the civil penalty contained in the ticket is 
substantially less than the penalty that would be imposed under current 
procedures or that could be imposed by an ALJ at a hearing. RSPA's 
policy is to calculate a penalty as it does under its current 
procedures

[[Page 29670]]

and guidelines and then reduce that penalty by 50 percent for each 
violation processed under this program. In no case will a penalty be 
less than the statutory minimum of $250.
    If the recipient pays the ticket amount and states that action has 
been taken to correct the violation, the matter is closed and there is 
no further agency action. If the recipient elects to contest a ticket, 
that person may do so, within 45 days of receiving the ticket, by 
making an informal response under 49 CFR 107.317 or requesting a formal 
hearing under 49 CFR 107.319. In this situation, the ticket will be the 
functional equivalent of an NOPV, and contested matters will be handled 
by OCC. OCC will not be bound by the reduced penalty amount shown on 
the ticket and could impose a penalty as high as the unreduced proposed 
penalty determined under RSPA's civil penalty guidelines, which is also 
shown on the ticket. OCC will not seek a penalty greater than the 
highest penalty amount shown on the ticket.
    A recipient waives the right to a hearing by failing to respond to 
the ticket within 45 days. Moreover, failure to respond is deemed an 
admission of the violation, and the reduced penalty is owed to RSPA. 
Unpaid penalty amounts constitute a debt owed to the United States 
Government.

III. Pilot Ticketing Program Evaluation

    The NPRM contained a proposal for a two-year pilot program. RSPA 
indicated in the preamble of the final rule that, at the end of two 
years from May 15, 1996, it would evaluate the program in terms of cost 
savings, time savings, and impact on the effectiveness of its 
compliance program.

1. Experience Under the Program

    Between June 1, 1996 and April 30, 1998, RSPA issued 380 tickets 
and closed 285 tickets with collection of $351,757 in civil penalties. 
Regarding the closed tickets, 231 of them (82%) involved one or more of 
the violations previously listed. Nearly half of all the closed tickets 
involved failure to train employees, failure to maintain records of 
training or both. The next most frequent violations were manufacture of 
unauthorized DOT specification packaging after its expiration date 
(8%), failure to register with RSPA (7%), and operating under an 
expired exemption (6%).

2. Cost Savings

    RSPA has determined that, because of its streamlined approach, the 
ticketing program has produced significant costs savings for its 
compliance program and for the regulated community. A party who chooses 
to pay the ticket receives an immediate cost saving because the 
proposed penalty is half of what it would have been in a civil penalty 
proceeding. The ticket recipient also avoids the need to make a 
detailed written response to the agency (other than a statement 
addressing corrective action) and avoids the oral and written 
communications that arise during OCC processing of the case. The formal 
hearing process is bypassed and legal fees are avoided.
    OHME and OCC realize cost savings when a party elects to pay a 
ticket because there is no OCC or post-ticket OHME involvement in the 
matter. OCC does not have to issue an NOPV, hold an informal 
conference, respond to a compromise offers, issue an order, participate 
in ALJ proceedings, draft a decision on appeal, or issue a close-out 
letter. OHME avoids involvement in informal conferences or ALJ 
proceedings and does not have to interact with the OCC on factual and 
technical issues.
    Even where a ticket is contested, there are cost savings to OCC, 
which will not be required to issue an NOPV, but can rely on the ticket 
to have provided notice of the alleged violations to the ticket 
recipient. The information that OCC receives from OHME will contain the 
ticket, a response to the ticket (which may set forth corrective 
action) and possibly a compromise offer. This information allows OCC to 
begin processing the case in a more advanced state than would otherwise 
be the case and reduces the overall processing time.

3. Time Savings

    As stated in the discussion of cost savings, the ticketing program 
has produced significant time savings in the amount of work required by 
OHME, OCC and the ticket recipient to process an enforcement case. In 
addition, the average length of time it takes to process a ticket is 
significantly less than the time it takes to process a case under the 
current procedures. To illustrate, RSPA closed 200 civil penalty cases 
in 1997; the average time from issuance of the Notice of Probable 
Violation to closure of the case was 17 months. By contrast, RSPA 
closed 145 tickets in 1997; the average time from issuance to closure 
was 1.5 months.

4. Impact on the Effectiveness of RSPA's Compliance Program

    The primary means for RSPA to determine the effectiveness of its 
enforcement program is to conduct reinspections of companies involved 
in enforcement actions. Although RSPA's reinspection program with 
regard to civil penalties cases is extensive, RSPA only recently began 
to do reinspections of parties which had received tickets. Thus far, 
the compliance rate is over 90%.
    Another direct result of the effectiveness of the ticketing program 
is the ability of RSPA personnel to spend the time saved by disposing 
of cases through tickets on other matters, such as outreach programs, 
inspection and investigation of more serious types of violations and 
more expeditious processing of existing enforcement cases.

IV. Conclusion

    In light of the cost and time savings for all involved parties and 
the positive impact on the effectiveness of RSPA's hazardous materials 
compliance program, RSPA has decided to continue the ticketing program.

    Issued in Washington, DC on May 22, 1998.
Alan I. Roberts,
Associate Administrator for Hazardous Materials Transportation.
[FR Doc. 98-14285 Filed 5-29-98; 8:45 am]
BILLING CODE 4910-60-P