Document ID: PHMSA-2016-0010-0002
Agency: phmsa
Document Type: Rule
Title: Pipeline Safety: Inflation Adjustment of Maximum Civil Penalties
Posted Date: 2017-04-27T04:00Z

[Federal Register Volume 82, Number 80 (Thursday, April 27, 2017)]
[Rules and Regulations]
[Pages 19325-19328]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08530]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 190

[Docket No. PHMSA-2016-0010; Amdt. No. 190-17]
RIN-2137-AF16

Pipeline Safety: Inflation Adjustment of Maximum Civil Penalties

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 
Department of Transportation (DOT).

ACTION: Final rule.

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SUMMARY: The Pipeline and Hazardous Materials Safety Administration 
(PHMSA) is revising references in its regulations to the maximum civil 
penalties for violations of Federal pipeline safety laws, or any PHMSA 
regulations or orders issued thereunder. Under the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015, which 
further amended the Federal Civil Penalties Inflation Adjustment Act of 
1990, Federal agencies are required to adjust their civil monetary 
penalties effective January 15, 2017, and annually thereafter, to 
account for changes in inflation.
    PHMSA finds good cause to amend the regulations related to civil 
penalties without notice or opportunity for public comment. Advance 
public notice is

[[Page 19326]]

unnecessary for the reasons described in the SUPPLEMENTARY INFORMATION 
section.

DATES: The effective date of this final rule is April 27, 2017.

FOR FURTHER INFORMATION CONTACT: Ahuva Battams, Attorney-Advisor, 
Pipeline Safety Division, Office of Chief Counsel, the Pipeline and 
Hazardous Materials Safety Administration, by telephone at 202-366-4400 
or email at ahuva.battams@dot.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Civil Penalty Amendments
II. Justification for the Final Rule
III. Rulemaking Analyses and Notices
    A. Statutory/Legal Authority for This Rulemaking
    B. Executive Order 12866, Executive Order 13563, and Department 
of Transportation (DOT) Regulatory Policies and Procedures
    C. Executive Order 13132
    D. Executive Order 13175
    E. Executive Order 13211
    F. Regulatory Flexibility Act, Executive Order 13272, and DOT 
Procedures and Policies
    G. Paperwork Reduction Act
    H. Unfunded Mandates Reform Act of 1995
    I. Environmental Assessment
    J. Executive Order 13609 and International Trade Analysis
    K. Privacy Act
    L. Regulation Identifier Number (RIN)
    M. Executive Order 13609 and International Trade Analysis

I. Civil Penalty Amendments

    On June 30, 2016, PHMSA published an interim final rule, (81 FR 
42564) in the Federal Register. Under the Pipeline Safety, Regulatory 
Certainty, and Job Creation Act of 2015 (the 2015 Act), Public Law 114-
74, and consistent with the process outlined in the Office of 
Management and Budget's (OMB) Memorandum for the Heads of Executive 
Departments and Agencies: ``Implementation of the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015,'' M-16-06 
(OMB Memorandum M-16-06), the interim final rule stated that PHMSA is 
revising references in its regulations to the maximum civil penalties 
for violations of Federal pipeline safety laws, or any PHMSA 
regulations or orders issued thereunder.
    Pursuant to the 2015 Act, and consistent with the process outlined 
in the OMB memorandum titled ``Memorandum for the Heads of Executive 
Departments and Agencies: Implementation of the 2017 annual adjustment 
pursuant to the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015,'' M-17-11 (OMB Memorandum M-17-11), PHMSA is 
again revising references in these regulations to the maximum civil 
penalties for violations. Based on the cost-of-living adjustment 
multiplier for 2017, derived from the Consumer Price Index (CPI-U) for 
the month of October 2016 (not seasonally adjusted), a multiplier of 
1.01636 was used to calculate updated maximum civil penalty amounts.
    The revised penalties are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                 Current maximum civil    Revised maximum civil
           Violated statute                  CFR citation               penalty                  penalty
----------------------------------------------------------------------------------------------------------------
49 U.S.C. 60101 et seq., and any       49 CFR 190.223(a)......  $205,638 for each        $209,002 for each
 regulation or order issued                                      violation for each day   violation for each day
 thereunder.                                                     the violation            the violation
                                                                 continues, with a        continues, with a
                                                                 maximum penalty not to   maximum penalty not to
                                                                 exceed $2,056,380 for    exceed $2,090,022 for
                                                                 a related series of      a related series of
                                                                 violations.              violations.
49 U.S.C. 60103; 49 U.S.C. 60111.....  49 CFR 190.223(c)......  A penalty not to exceed  An administrative civil
                                                                 $75,123 which may be     penalty not to exceed
                                                                 in addition to other     $76,352, which may be
                                                                 penalties under 40       in addition to other
                                                                 U.S.C. 60101, et seq.    penalties assessed
                                                                                          under 49 U.S.C. 60101,
                                                                                          et seq.
49 U.S.C. 60129......................  49 CFR 190.223(d)......  A penalty not to exceed  A penalty not to exceed
                                                                 $1,194.                  $1,214.
----------------------------------------------------------------------------------------------------------------

    The 2015 Act only applies to prospective penalties and does not 
retrospectively change any civil penalties previously assessed or 
enforced. Further, under the 2015 Act, PHMSA is required to publish 
annual inflation adjustments for each penalty levied under 49 U.S.C. 
60101, et seq., in the Federal Register no later than January 15 of 
each year.
    The 2015 Act does not alter PHMSA's existing authority to assess 
penalties levied for violations under 49 U.S.C. 60101, et seq. 
Additionally, if future penalties or penalty adjustments are enacted by 
statute or regulation, PHMSA will not adjust these penalties for 
inflation in the first year after the penalties are in effect. PHMSA 
will apply new annual penalty levels to any penalties assessed on or 
after the date these new penalty levels take effect.

II. Justification for Final Rule

    PHMSA is proceeding directly to a final rule without providing a 
notice of proposed rulemaking or an opportunity for public comment. 
This action is permitted, in part, because the 2015 Act directs PHMSA 
to adjust the civil monetary penalties in accordance with the schedule 
provided in the 2015 Act, notwithstanding the notice and public comment 
procedures in the Administrative Procedure Act (APA). However, PHMSA 
also notes that the APA authorizes agencies to forego providing the 
opportunity for prior public notice and comment if an agency finds good 
cause that notice and public procedure are ``impracticable, 
unnecessary, or contrary to the public interest'' (5 U.S.C. 
553(b)(3)(B)). In this instance, public comment is unnecessary because 
by making these technical amendments, PHMSA is not exercising 
discretion in a way that could be informed by public comment. PHMSA is 
required under the 2015 Act and directed by the OMB Guidance to publish 
this final rule by January 15, 2017, with the penalty levels stated 
herein slated to take effect on that date. Further, PHMSA is mandated 
by the 2015 Act and directed by the OMB Guidance to adjust the penalty 
levels pursuant to the specific procedures also stated herein. Any 
public comments received through notice and public procedure would 
therefore not affect PHMSA's obligation to comply with the 2015 Act, 
nor would they affect the methods used by PHMSA to adjust the penalty 
levels.

III. Rulemaking Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This final rule is published under the authority of the 2015 Act, 
as well 49 U.S.C. 60101, et seq. These statutes provide PHMSA with the 
authority to levy civil penalties for violations of Federal pipeline 
safety laws. The 2015 Act requires penalties levied by Federal agencies 
pursuant to these laws to be adjusted. Beginning in January 2017, the 
2015 Act requires such penalties to be adjusted on an annual basis no 
later than January 15 of each year.

[[Page 19327]]

B. Executive Orders 12866 and 13563, and Department of Transportation 
(DOT) Regulatory Policies and Procedures

    This final rule has been evaluated in accordance with existing DOT 
policies and procedures and determined to be non-significant under 
Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 
(October 4, 1993), and Executive Order 13563, Improving Regulation and 
Regulatory Review, 76 FR 3821 (January 21, 2011). Consistent with 
guidance in OMB Memorandum M-17-11, this final rule is considered to be 
a non-significant regulatory action under Executive Order 12866. 
Further, this final rule is not significant under the regulatory 
policies and procedures of the DOT because it is limited to a 
ministerial act in which the agency has no discretion and where the 
economic impact of the final rule is minimal (44 FR 11034). 
Accordingly, preparation of a regulatory evaluation is not warranted.
    This final rule imposes no new costs upon persons conducting 
operations in compliance with Federal pipeline statutes and 
regulations. Those operators not in compliance with these statues and 
regulations may experience an increased cost based on the penalties 
levied against them for non-compliance; however, this is an avoidable, 
variable cost and thus is not considered in any evaluation of the 
significance of this regulatory action. The amendments in this final 
rule could provide a deterrent effect that could potentially lead to 
safety benefits; however, PHMSA does not expect such benefits to be 
significant. Overall, it is anticipated that costs and benefits from 
this final rule would be minimal in real dollars.

C. Executive Order 13132

    PHMSA has analyzed this final rule according to Executive Order 
13132 on Federalism, 64 FR 43255 (August 10, 1999). The final rule does 
not have a substantial direct effect on the States, the relationship 
between the national government and the States, or the distribution of 
power and responsibilities among the various levels of government. The 
final rule neither imposes substantial direct compliance costs on State 
and local governments nor preempts state law governing intrastate 
pipelines. Therefore, the consultation and funding requirements of 
Executive Order 13132 do not apply.

D. Executive Order 13175

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13175 on consultation and 
coordination with Indian tribal governments, 65 FR 67249 (November 9, 
2000). Because the final rule does not have tribal implications, does 
not impose substantial direct compliance costs, and is required by 
statute, the funding and consultation requirements of Executive Order 
13175 do not apply.

E. Executive Order 13211

    This final rule is not a ``significant energy action'' under 
Executive Order 13211, Actions Concerning Regulations that 
Significantly Affect Energy Supply, Distribution, or Use, 66 FR 28355 
(May 22, 2001). It is not likely to have a significant adverse effect 
on supply, distribution, or energy use. Further, the Office of 
Information and Regulatory Affairs (OIRA) within OMB has not designated 
this final rule as a significant energy action.

F. Regulatory Flexibility Act, Executive Order 13272, and DOT 
Procedures and Policies

    The Regulatory Flexibility Act, 5 U.S.C. 601-611, requires each 
agency to analyze proposed regulations and assess their impact on small 
businesses and other small entities to determine whether this final 
rule is expected to have a significant impact on a substantial number 
of small entities. The provisions of this final rule may apply 
specifically to all businesses using pipelines to transport hazardous 
liquids, gas, and liquefied natural gas (LNG) in interstate commerce. 
Therefore, PHMSA certifies this final rule would not have a significant 
economic impact on a substantial number of small entities.

G. Paperwork Reduction Act

    This final rule imposes no new requirements for recordkeeping or 
reporting.

H. Unfunded Mandates Reform Act of 1995

    This final rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995, Public Law 104-4. It does not 
result in costs of $100 million or more (adjusted for inflation) in any 
year for either State, local, or tribal governments, in the aggregate, 
or to the private sector, and is the least burdensome alternative that 
achieves the objective of the final rule.

I. Environmental Assessment

    The National Environmental Policy Act of 1969 (NEPA), as amended, 
requires Federal agencies to consider the consequences of major Federal 
actions and prepare a detailed statement on actions significantly 
affecting the quality of the human environment (42 U.S.C. 4321-4375). 
When developing potential regulatory requirements, PHMSA evaluates 
those requirements to consider the environmental impact of these 
amendments. Specifically, PHMSA evaluates the risk of release and 
resulting environmental impact; the risk to human safety, including any 
risk to first responders; if the proposed regulation would be carried 
out in a defined geographic area; and the resources, especially in 
environmentally sensitive areas, that could be impacted by any proposed 
regulations.
    This final rule would be generally applicable to pipeline 
operators, and would not be carried out in a defined geographic area. 
The adjusted, increased civil penalties listed in this final rule may 
act as a deterrent to those violating Federal pipeline safety laws, or 
any PHMSA regulations or orders issued thereunder. This may result in a 
positive environmental impact as a result of increased compliance with 
Federal pipeline safety laws and any PHMSA regulations or orders issued 
thereunder. Based on the above discussion, PHMSA concludes there are no 
significant environmental impacts associated with this final rule.

J. Executive Order 13609 and International Trade Analysis

    Under Executive Order 13609, Promoting International Regulatory 
Cooperation, agencies must consider whether the impacts associated with 
significant variations between domestic and international regulatory 
approaches are unnecessary or may impair the ability of American 
business to export and compete internationally, 77 FR 26413 (May 4, 
2012). In meeting shared challenges involving health, safety, labor, 
security, environmental, and other issues, international regulatory 
cooperation can identify approaches that are at least as protective as 
those that are or would be adopted in the absence of such cooperation. 
International regulatory cooperation can also reduce, eliminate, or 
prevent unnecessary differences in regulatory requirements.
    Similarly, the Trade Agreements Act of 1979 (Pub. L. 96-39), as 
amended by the Uruguay Round Agreements Act (Pub. L. 103-465), 
prohibits Federal agencies from establishing any standards or engaging 
in related activities that create unnecessary obstacles to the foreign 
commerce of the United States. For purposes of these requirements, 
Federal agencies may participate in the establishment of

[[Page 19328]]

international standards so long as the standards have a legitimate 
domestic objective--such as providing for safety--and do not operate to 
exclude imports that meet this objective. The statute also requires 
consideration of international standards and, where appropriate, using 
them as the basis for U.S. standards.
    PHMSA participates in the establishment of international standards 
in order to protect the safety of the American public, and we have 
assessed the effects of this final rule to ensure that it does not 
cause unnecessary obstacles to foreign trade. Accordingly, this final 
rule is consistent with Executive Order 13609 and PHMSA's obligations.

K. Privacy Act

    Anyone is able to search the electronic form of written 
communications and comments received into our dockets by the name of 
the individual submitting the document (or signing the document, if 
submitted on behalf of an association, business, labor union, etc.). 
You may review DOT's complete Privacy Act Statement, published on April 
11, 2000 (65 FR 19476), in the Federal Register at: https://www.gpo.gov/fdsys/pkg/FR-2000-04-11/pdf/00-8505.pdf.

L. Regulation Identifier Number (RIN)

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
the spring and fall of each year. The RIN contained in the heading of 
this document can be used to cross-reference this action in the Unified 
Agenda.

M. Executive Order 13609 and International Trade Analysis

    Sections 3 and 4 of Executive Order 13609 direct an agency to 
conduct a regulatory analysis and ensure that a proposed rule does not 
cause unnecessary obstacles to foreign trade. This requirement applies 
if a rule constitutes a significant regulatory action, or if a 
regulatory evaluation must be prepared for the rule. This interim final 
rule is not a significant regulatory action, but a regulatory action 
under Section 3(e) of Executive Order 12866. PHMSA is not required 
under Executive Orders 12866 and 13563 to submit a regulatory analysis.

List of Subjects in 49 CFR Part 190

    Administrative practice and procedure, Penalties, Pipeline safety.

    Accordingly, the interim rule amending 49 CFR part 190 which was 
published at 81 FR 42564 on June 30, 2016, is adopted as a final rule 
with the following changes:

PART 190--PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES

0
1. The authority citation for part 190 continues to read as follows:

    Authority: 33 U.S.C. 1321(b); 49 U.S.C. 60101 et seq.; 49 CFR 
1.97; Pub. L. 114-74, section 701; Pub. L. No: 112-90, section 2; 
Pub. L. 101-410, sections 4-6.

0
2. In Sec.  190.223 paragraphs (a), (c), and (d) are revised to read as 
follows:

Sec.  190.223  Maximum penalties.

    (a) Any person found to have violated a provision of 49 U.S.C. 
60101, et seq., or any regulations or orders issued thereunder, is 
subject to an administrative civil penalty not to exceed $209,002 for 
each violation for each day the violation continues, with a maximum 
administrative civil penalty not to exceed $2,090,022 for any related 
series of violations.
* * * * *
    (c) Any person found to have violated any standard or order under 
49 U.S.C. 60103 is subject to an administrative civil penalty not to 
exceed $76,352, which may be in addition to other penalties to which 
such person may be subject under paragraph (a) of this section.
    (d) Any person who is determined to have violated any standard or 
order under 49 U.S.C. 60129 is subject to an administrative civil 
penalty not to exceed $1,214, which may be in addition to other 
penalties to which such person may be subject under paragraph (a) of 
this section.
* * * * *

    Issued in Washington, DC, on April 24, 2017, under authority 
delegated in 49 CFR 1.97.
Howard W. McMillan,
Administrator.
[FR Doc. 2017-08530 Filed 4-26-17; 8:45 am]
 BILLING CODE 4910-60-P