Document ID: PHMSA-2012-0054-0003
Agency: phmsa
Document Type: Rule
Title: Hazardous Materials: Maximum and Minimum Civil Penalties
Posted Date: 2013-04-17T04:00Z

[Federal Register Volume 78, Number 74 (Wednesday, April 17, 2013)]
[Rules and Regulations]
[Pages 22798-22800]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-08981]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 107 and 171

[Docket No. PHMSA-2012-0257 (HM-258)]
RIN 2137-AE96

Hazardous Materials: Revision of Maximum and Minimum Civil 
Penalties

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

ACTION: Final rule.

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SUMMARY: PHMSA is revising the references in its regulations to the 
maximum and minimum civil penalties for a knowing violation of the 
Federal hazardous material transportation law or a regulation, order, 
special permit, or approval issued under that law. As amended in the 
``Moving Ahead for Progress in the 21st Century Act'' (MAP-21), 
effective October 1, 2012, the maximum civil penalty for a knowing 
violation is now $75,000, except that the maximum civil penalty is 
$175,000 for a violation that results in death, serious illness, or 
severe injury to any person or substantial destruction of property. In 
addition, there is no longer a minimum civil penalty amount, except 
that the minimum civil penalty amount of $450 applies to a violation 
relating to training.

DATES: Effective Date: April 17, 2013.

FOR FURTHER INFORMATION CONTACT: Deborah Boothe, Office of Hazardous 
Materials Safety, (202) 366-8553; or Joseph Solomey, Office of Chief 
Counsel, (202) 366-4400, Pipeline and Hazardous Materials Safety 
Administration, U.S. Department of Transportation, 1200 New Jersey 
Avenue SE., Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

I. Civil Penalty Amendments

    In Section 33010 of MAP-21 (Pub. L. 112-141, 126 Stat. 837 [July 6, 
2012]), Congress revised the maximum and minimum civil penalties set 
forth in 49 U.S.C. 5123(a) for a knowing violation of the Federal 
hazardous material transportation law or a regulation, order, special 
permit, or approval issued under that law. These changes to the civil 
penalty amounts apply to violations occurring on or after October 1, 
2012. Accordingly, PHMSA is revising the references to the maximum and 
minimum civil penalty amounts in its regulations to reflect the changes 
to Section 5123 of the Federal hazardous material transportation law. 
In 49 CFR 107.329, Appendix A to subpart D of 49 CFR part 107, and 49 
CFR 171.1, we are:
     Revising the maximum civil penalty from $55,000 to $75,000 
for a person who knowingly violates the Federal hazardous material 
transportation law or a regulation, order, special permit, or approval 
issued under that law.
     Revising the maximum civil penalty from $110,000 to 
$175,000 for a person who knowingly violates the Federal hazardous 
material transportation law or a regulation, order, special permit, or 
approval issued under that law that results in death, serious illness, 
or severe injury to any person or substantial destruction of the 
property.
     Removing the current $250 minimum civil penalty and 
revising the minimum penalty amount to $450 for a violation related to 
training.
    Because these revisions simply set forth changes in the law and are 
part of PHMSA's general statements of agency policy and procedure, 
notice and comment is not necessary.

II. Rulemaking Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This final rule is published under the authority of the Federal 
hazardous materials transportation law (49 U.S.C. 5101 et seq.). 
Section 5123(a) of that law provides civil penalties for knowing 
violations of Federal hazardous material transportation law or a 
regulation, order, special permit, or approval issued under that law. 
This rule revises the references in PHMSA's regulations by (1) revising 
the maximum penalty amount for a knowing violation and a knowing 
violation resulting in death, serious illness, or severe injury to any 
person or substantial destruction of property to $75,000 and $175,000, 
respectively, and (2) removing the minimum penalty amount, except for 
the minimum penalty amount of $450 for a violation related to training.

B. Executive Order 12866, Executive Order 13563, and DOT Regulatory 
Policies and Procedures

    This final rule has been evaluated in accordance with existing 
policies and procedures and determined to be non-significant under 
Executive Orders 12866 and 13563. Accordingly, this final rule was not 
reviewed by the Office of Management and Budget (OMB). Further, this 
rule is not a significant regulatory action under the Regulatory 
Policies and Procedures of the DOT because it is limited to a 
ministerial act on which the agency has

[[Page 22799]]

no discretion. 44 FR 11034. The economic impact of the final rule is 
minimal to the extent that preparation of a regulatory evaluation is 
not warranted. Given the low number of penalty actions within the scope 
of this final rule, the impacts will be very limited. We provide, 
however, the following information regarding cases and tickets 
involving the maximum and minimum civil penalties to establish the 
scope economic impacts associated with this final rule.
Maximum Civil Penalty
    In reviewing Penalty Action Reports and enforcement data from 2010-
2012, PHMSA has found that twenty-one separate cases have been referred 
by field operations to chief counsel with one or more violations with a 
recommended penalty greater than $50,000. Of those cases, seventeen are 
pending, and four have been finalized. In three of the four finalized 
cases, the penalty assessed in the Order was reduced below the maximum 
based on corrective actions, finances, or based on statutory criteria 
that PHMSA must consider. In one case, the company paid the maximum 
civil penalty.
Minimum Civil Penalty
    In reviewing Penalty Action Reports and enforcement data from 2010-
2012, PHMSA has found that approximately 325 tickets that are not 
related to training have been issued with a penalty of $500 or less. 
These penalties would include actions in which the minimum civil 
penalty was assessed for one or more violations. In addition, there 
were no cases with a recommended penalty less than $500. Even though 
these minimum penalties are no longer required, they will likely be 
issued. The minimum civil penalty is expected to be used in a very 
limited number of actions under very exceptional circumstances. For 
example, a person that demonstrates a willingness to comply, works with 
PHMSA to correct violations, and is facing financial hardship may be 
granted leniency from a civil penalty.
    Executive Order 13563 is supplemental to and reaffirms the 
principles, structures, and definitions governing regulatory review 
that were established in Executive Order 12866 Regulatory Planning and 
Review of September 30, 1993. In addition, Executive Order 13563 
specifically requires agencies to: (1) Involve the public in the 
regulatory process; (2) promote simplification and harmonization 
through interagency coordination; (3) identify and consider regulatory 
approaches that reduce burden and maintain flexibility; (4) ensure the 
objectivity of any scientific or technological information used to 
support regulatory action; and (5) consider how to best promote 
retrospective analysis to modify, streamline, expand, or repeal 
existing rules that are outmoded, ineffective, insufficient, or 
excessively burdensome.
    This final rule is being undertaken to address our statutory 
requirements. It does not conflict with Executive Order 12866, 
Executive Order 13563, or DOT Regulatory Policies and Procedures. This 
rule imposes no new costs upon persons conducting hazardous materials 
operations in compliance with the requirements of the HMR. Those 
entities not in compliance with the requirements of the HMR 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 rule could provide safety 
benefits (i.e., larger penalties deterring knowing violators). Overall, 
it is anticipated this rulemaking would be cost neutral.

C. Executive Order 13132

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13132 (``Federalism''). This 
rule does not impose any regulation having substantial direct effects 
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. 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 (Consultation and 
Coordination with Indian Tribal Governments). Because this final rule 
does not have adverse tribal implications and does not impose direct 
compliance costs, the funding and consultation requirements of 
Executive Order 13175 do not apply, and, a tribal summary impact 
statement is not required.

E. 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 regulations and assess their impact on small 
businesses and other small entities to determine whether the rule is 
expected to have a significant impact on a substantial number of small 
entities. The provisions of this rule apply specifically to all 
business transporting hazardous material. Therefore, PHMSA certifies 
this rule would not have a significant economic impact on a substantial 
number of small entities.

F. Paperwork Reduction Act

    There are no new information requirements in this final rule.

G. 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 
spring and fall of each year. The RIN contained in the heading of this 
document can be used to cross-reference this action with the Unified 
Agenda.

H. Unfunded Mandates Reform Act of 1995

    This final rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It does not result in costs of 
$141.3 million or more, in the aggregate, to any of the following: 
state, local, or Native American tribal governments, or to the private 
sector.

I. Environmental Assessment

    The National Environmental Policy Act of 1969 (NEPA), as amended 
(42 U.S.C. 4321-4375), 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. When developing potential regulatory requirements, PHMSA 
evaluates those requirements to consider the environmental impact of 
each amendment. Specifically, PHMSA evaluates the: risk of release and 
resulting environmental impact; risk to human safety, including any 
risk to first responders; longevity of the packaging; and if the 
proposed regulation would be carried out in a defined geographic area, 
the resources, especially any sensitive areas, and how they could be 
impacted by any proposed regulations. These amendments would be 
generally applicable and not be carried out in a defined geographic 
area. Civil penalties may act as a deterrent to those violating the 
HMR, and, this can have a negligible positive environmental impact as a 
result of increased compliance with the HMR. Based on the above 
discussion PHMSA concludes there are no significant environmental 
impacts associated with this final rule.

[[Page 22800]]

J. Privacy Act

    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comments (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) which may be 
viewed at http://www.gpo.gov/fdsys/pkg/FR-2000-04-11/pdf/00-8505.pdf.

K. Executive Order 13609 and International Trade Analysis

    Under Executive Order 13609, 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. 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 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, that 
they be 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 the final rule to ensure that it does not cause 
unnecessary obstacles to foreign trade. Accordingly, this rulemaking is 
consistent with Executive Order 13609 and PHMSA's obligations.

List of Subjects

49 CFR Part 107

    Administrative practices and procedure, Hazardous materials 
transportation, Packaging and containers, Penalties, Reporting and 
recordkeeping requirements.

49 CFR Part 171

    Exports, Hazardous materials transportation, Hazardous waste, 
Imports, Reporting and recordkeeping requirements.

    In consideration of the foregoing, 49 CFR Chapter I is amended as 
follows:

PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES

0
1. The authority citation for part 107 is revised to read as follows:

    Authority: 49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 section 4 
(28 U.S.C. 2461 note); Pub. L. 104-121, sections 212-213; Pub. L. 
104-134, section 31001; 49 CFR 1.81 and 1.97

0
2. Section 107.329 is revised to read as follows:

Sec.  107.329  Maximum penalties.

    (a) A person who knowingly violates a requirement of the Federal 
hazardous material transportation law, an order issued thereunder, this 
subchapter, subchapter C of the chapter, or a special permit or 
approval issued under this subchapter applicable to the transportation 
of hazardous materials or the causing of them to be transported or 
shipped is liable for a civil penalty of not more than $75,000 for each 
violation, except the maximum civil penalty is $175,000 if the 
violation results in death, serious illness or severe injury to any 
person or substantial destruction of property. There is no minimum 
civil penalty, except for a minimum civil penalty of $450 for 
violations relating to training. When the violation is a continuing 
one, each day of the violation constitutes a separate offense.
    (b) A person who knowingly violates a requirement of the Federal 
hazardous material transportation law, an order issued thereunder, this 
subchapter, subchapter C of the chapter, or a special permit or 
approval issued under this subchapter applicable to the design, 
manufacture, fabrication, inspection, marking, maintenance, 
reconditioning, repair or testing of a package, container, or packaging 
component which is represented, marked, certified, or sold by that 
person as qualified for use in the transportation of hazardous 
materials in commerce is liable for a civil penalty of not more than 
$75,000 for each violation, except the maximum civil penalty is 
$175,000 if the violation results in death, serious illness or severe 
injury to any person or substantial destruction of property. There is 
no minimum civil penalty, except for a minimum civil penalty of $450 
for violations relating to training.

0
3. In Appendix A to subpart D of part 107, in Section IV.C., the first 
sentence is revised to read as follows:

Appendix A to Subpart D of Part 107--Guidelines for Civil Penalties

* * * * *

IV. * * *

C. * * *

    Under the Federal hazmat law, 49 U.S.C. 5123(a), each violation 
of the HMR and each day of a continuing violation (except for 
violations relating to packaging manufacture or qualification) is 
subject to a civil penalty of up to $75,000 or $175,000 for a 
violation occurring on or after October 1, 2012. * * *
* * * * *

PART 171--GENERAL INFORMATION, REGULATIONS, AND DEFINITIONS

0
4. The authority citation for part 171 is revised to read as follows:

    Authority: 49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 section 4 
(28 U.S.C. 2461 note); Pub. L. 104-134, section 31001; 49 CFR 1.81 
and 1.97.

0
5. In Sec.  171.1, paragraph (g) is revised to read as follows:

Sec.  171.1  Applicability of Hazardous Materials Regulations (HMR) to 
persons and functions.

* * * * *
    (g) Penalties for noncompliance. Each person who knowingly violates 
a requirement of the Federal hazardous material transportation law, an 
order issued under Federal hazardous material transportation law, 
subchapter A of this chapter, or a special permit or approval issued 
under subchapter A or C of this chapter is liable for a civil penalty 
of not more than $75,000 for each violation, except the maximum civil 
penalty is $175,000 if the violation results in death, serious illness 
or severe injury to any person or substantial destruction of property. 
There is no minimum civil penalty, except for a minimum civil penalty 
of $450 for a violation relating to training.
* * * * *

    Issued in Washington, DC on April 9, 2013 under authority 
delegated in 49 CFR part 1.
Cynthia Quarterman,
Administrator, Pipeline and Hazardous Materials Safety Administration.
[FR Doc. 2013-08981 Filed 4-16-13; 8:45 am]
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