Document ID: PHMSA-2012-0258-0005
Agency: phmsa
Document Type: Rule
Title: Hazardous Materials: Failure to Pay Civil Penalties
Posted Date: 2014-08-07T04:00Z

[Federal Register Volume 79, Number 152 (Thursday, August 7, 2014)]
[Rules and Regulations]
[Pages 46194-46200]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-18617]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 107 and 109

[Docket No. PHMSA-2012-0258 (HM-258A)]
RIN 2137-AE97

Hazardous Materials: Failure To Pay Civil Penalties

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: PHMSA is amending its hazardous materials procedural 
regulations. Specifically, this final rule prohibits a person who fails 
to pay a civil penalty as ordered, or fails to abide by a payment 
agreement, from performing activities regulated by the Hazardous 
Materials Regulations until payment is made.

DATES: This final rule is effective September 8, 2014.

FOR FURTHER INFORMATION CONTACT: Tyler Patterson, Office of Chief 
Counsel, telephone (202) 366-0505, Pipeline and Hazardous Materials 
Safety Administration, U.S. Department of Transportation, 1200 New 
Jersey Ave. SE., Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Overview of Penalty Procedures
    A. Pipeline and Hazardous Materials Safety Administration
    B. Federal Aviation Administration
    C. Federal Motor Carrier Safety Administration
    D. Federal Railroad Administration
II. Overview of Mandated Changes to the Penalty Procedures
III. Discussion of the Comments on the Notice of Proposed Rulemaking
IV. Summary of the Final Rule
V. Regulatory Analyses and Notices
    A. Statutory/Legal Authority for This Rulemaking
    B. Executive Order 12866, Executive Order 13610, Executive Order 
13563, and DOT Regulatory Policies and Procedures
    C. Executive Order 13132
    D. Executive Order 13175
    E. Regulatory Flexibility Act, Executive Order 13272, and DOT 
Policies and Procedures
    F. Paperwork Reduction Act
    G. Regulatory Identifier Number (RIN)
    H. Unfunded Mandates Reform Act
    I. Executive Order 13609 and International Trade Analysis
    J. Environmental Assessment
    K. Privacy Act

I. Overview of Penalty Procedures

    Under authority delegated by the Secretary, four agencies within 
the Department of Transportation (DOT) enforce the Hazardous Materials 
Regulations (HMR), 49 CFR Parts 171-180, and other regulations, 
approvals, special permits, and orders issued under Federal Hazardous 
Material Transportation Law (Hazmat Law), 49 U.S.C. 5101 et seq.; the 
Federal Aviation Administration (FAA), 49 CFR 1.83(d); the Federal 
Motor Carrier Safety Administration (FMCSA), 49 CFR 1.87(d); the 
Federal Railroad Administration (FRA), 49 CFR 1.89(j); and the Pipeline 
and Hazardous Materials Safety Administration (PHMSA), 49 CFR 1.97(b).
    Although the United States Coast Guard (USCG) also is authorized to 
enforce the HMR in connection with certain transportation or shipment 
of hazardous materials by vessel, nothing in this rule affects USCG's 
enforcement authority with respect to transportation of hazardous 
materials by water. The authority originated with the Secretary and was 
first delegated to USCG prior to 2003, when USCG was made part of the 
Department of Homeland Security. Enforcement authority over ``bulk 
transportation of hazardous materials that are loaded or carried on 
board a vessel without benefit of containers or labels, and received 
and handled by the vessel without mark or count, and regulations and 
exemptions governing ship's stores and supplies'' was also transferred 
in 2003 to the USCG. DHS Delegation No. 0170, Sec. 2(99) & 2(100); see 
also 6 U.S.C. 457 and 551(d)(2). DOT will continue to coordinate its 
inspections, investigations, and enforcement actions with the USCG 
through a Memorandum of Understanding (MOU) or otherwise, to avoid 
duplicative or conflicting efforts.
    The rules of practice for hazardous materials penalty proceedings 
are governed by each agency's delegated regulatory authority. Each 
agency affected by this final rule will have the authority to apply 
these provisions as an augmentation of its current enforcement and debt 
collection practices after an enforcement action has been fully 
adjudicated and the entity ordered to pay a penalty has failed to do 
so.

A. Pipeline and Hazardous Materials Safety Administration

    PHMSA's enforcement procedures related to violation(s) of the HMR 
are described in 49 CFR Part 107, Subpart D. Violations that do not 
substantially impact safety are handled through the

[[Page 46195]]

ticket process under 49 CFR 107.310 and would be exempt from this final 
rule. For other hazardous materials violations, PHMSA begins the 
process of assessing civil penalties by serving a notice of probable 
violation (NOPV) on a person alleging the violation of hazardous 
materials operations.
    As directed in 49 CFR 107.311, the NOPV must include the following 
information: (1) A citation of the provision(s) of the HMR, order, or 
special permit that PHMSA believes the respondent has violated, (2) a 
statement of the factual allegations upon which the demand for remedial 
action or civil penalty is based, (3) a statement of the respondent's 
right to present written or oral explanations, information, and 
arguments in answer to the allegations and in mitigation of the 
sanction sought in the notice of probable violation, (4) a statement of 
the respondent's right to request a hearing and the procedures for 
requesting a hearing, and (5) the proposed civil penalty and payment 
information. Once the matter is fully adjudicated or a settlement is 
reached, PHMSA issues an order. Orders outline the terms and outcome of 
the enforcement action, including the final penalty amount due, and 
they describe any payment arrangements made between the agency and the 
respondent. This final rule affects only those respondents who violate 
the payment terms of an order.

B. Federal Aviation Administration

    FAA's enforcement procedures related to the violation(s) of the HMR 
are described in 14 CFR Part 13. FAA begins the process of assessing 
civil penalties by issuing a notice of proposed civil penalty as 
described in 14 CFR 13.16(f). Once the matter is fully adjudicated or a 
settlement is reached, the FAA issues an order assessing a civil 
penalty and establishing payment terms. This final rule affects only 
those respondents who violate the payment terms of an order (for 
violations of the HMR) issued under 14 CFR 13.16(c).

C. Federal Motor Carrier Safety Administration

    FMCSA's enforcement procedures related to violation(s) of the HMR 
or the Federal Motor Carrier Safety Regulations (FMCSR; 49 CFR Part 
397) are described in 49 CFR Part 386. FMCSA begins the process of 
assessing civil penalties by issuing a notice of claim (NOC), as 
described in 49 CFR 386.11(c). Each NOC sets forth the following 
information: (1) The facts alleged; (2) the provisions of the 
regulations allegedly violated by the respondent; (3) a proposed civil 
penalty; and (4) indicates the time, form, and manner whereby the 
respondent may pay, contest, or otherwise seek resolution of the claim. 
Once the matter is fully adjudicated or a settlement is reached, FMCSA 
issues a final agency order. The order sets the payment terms and final 
penalty amount. This final rule affects only those respondents who 
violate the payment terms of an order (for violations of the HMR) 
issued under 49 CFR Part 386.

D. Federal Railroad Administration

    FRA's enforcement procedures related to violations of the HMR are 
described in 49 CFR Part 209, Subpart B. FRA begins the process of 
assessing civil penalties by issuing an NOPV. The NOPV includes the 
following information: (1) A statement of the provisions that the 
respondent is believed to have violated and (2) notice of the amount of 
the civil penalty proposed to be assessed. With each NOPV, FRA also 
provides a violation report detailing the factual allegations and a 
description of the response options available to the respondent. Once 
the matter is fully adjudicated or a settlement is reached, FRA issues 
an order setting the payment terms of the assessed penalty, if 
applicable. This final rule affects only those persons who violate the 
payment terms of an order (for violations of the HMR) issued under 49 
CFR Part 209, Subpart B.

II. Overview of Mandated Changes to the Penalty Procedures

    Section 33010 of the Moving Ahead for Progress in the 21st Century 
Act (MAP-21) (Pub. L. 112-141, 126 Stat. 405, at 837) amended 49 U.S.C. 
5123 to prohibit a person from engaging in business operations 
involving the transportation of hazardous materials (i.e., hazardous 
materials operations) if that person has failed to either pay a civil 
penalty assessed under Chapter 51 of title 49, or failed to arrange and 
abide by a payment plan, beginning on the 91st day after the payment 
due date specified by the order or payment plan, unless the person has 
filed a formal administrative or judicial appeal of the penalty.
    Section 33010 of MAP-21 provides an exception to the prohibition on 
hazardous materials operations after nonpayment of penalties for 
debtors in Chapter 11 bankruptcy. The express language of the statutory 
exception states that the prohibition ``shall not apply to any person 
who is unable to pay a civil penalty because such person is a debtor in 
a case under chapter 11 of title 11.'' PHMSA believes that the 
Congress, in creating the bankruptcy exception, did not intend to 
exempt all Chapter 11 debtors from the prohibition on hazardous 
materials operations after nonpayment of penalties. Congress recognized 
that the determination of whether a Chapter 11 debtor is able to pay 
certain debts is within the jurisdiction of the bankruptcy court. PHMSA 
interprets the statutory language as requiring the agency to seek a 
determination from the bankruptcy court of a debtor's ability to pay a 
civil penalty claim prior to imposing the prohibition on hazardous 
materials operations after nonpayment of penalties.
    Under the automatic stay provisions of the Bankruptcy Code, a 
petition filed in bankruptcy ``operates as a stay, applicable to all 
entities of . . . the commencement or continuation . . . of a judicial, 
administrative, or other action or proceeding against the debtor that 
was or could have been commenced before the commencement of the 
bankruptcy case . . .'' 11 U.S.C. 362(a). However, ``the filing of a 
petition . . . does not operate as a stay . . . of the commencement or 
continuation of an action or proceeding by a governmental unit to 
enforce such governmental unit's police or regulatory power . . . and . 
. . of the enforcement of a judgment, other than a monetary judgment, 
obtained in an action or proceeding by a governmental unit to enforce 
such unit's police or regulatory power.'' 11 U.S.C. 362(b)(4).
    In determining whether an agency action fits within the exemption 
of section 362(b)(4), the courts have developed the ``public policy'' 
test, which distinguishes between governmental proceedings aimed at 
accomplishing public policy and those aimed at protecting the 
government's pecuniary interest in the debtor's property. See Eddleman 
v. U.S. Department of Labor, 923 F. 2d 782 (10th Cir. 1991); and NLRB 
v. Edward Cooper Painting, Inc., 804 F. 2d 934 (6th Cir. 1986). Agency 
proceedings under section 33010 of MAP-21 are designed to bring about 
the public policy of enforcing compliance with the Hazmat Law and the 
HMR. As a result, filing for bankruptcy protection under Chapter 11 or 
any other chapter does not automatically relieve a person from its 
regulatory or payment obligations.
    Section 33010 of MAP-21 does not address or instruct DOT to 
prohibit hazardous materials operations by those persons who have not 
paid penalties assessed prior to the granting of this authority. 
Without specific instruction on retroactivity, the presumption against 
retroactive application prevents PHMSA from applying section 33010

[[Page 46196]]

MAP-21 to a respondent whose final order was issued prior to the 
issuance of a final rule. Consequently, provisions of this final rule 
will apply to all final agency orders that assess penalties issued on 
or after the effective date of the final rule--September 8, 2014.

III. Discussion of the Comments on the Notice of Proposed Rulemaking

    On September 24, 2013, PHMSA published a notice of proposed 
rulemaking (NPRM) proposing regulations implementing this authority. We 
received comments from Eric Danko (PHMSA-2012-0258-0003), from the 
Association of American Railroads (AAR) and the American Short Line and 
Regional Railroad Association (ASLRRA) (PHMSA-2012-0258-0002), and from 
the Reusable Industrial Packaging Association (RIPA) (PHMSA-2012-0258-
0004). In this section, we summarize and discuss each of these 
comments. You may access the docket and the comments and other 
documents in this rulemaking by visiting the Federal eRulemaking Portal 
at http://www.regulations.gov, under Docket No. PHMSA-2012-0258 (HM-
258A).

Mr. Eric Danko

    Mr. Danko expressed his support for the proposed rule stating that 
``if persons dealing with HAZMAT are allowed to continue operating 
indefinitely despite being penalized for regulatory violations, there 
is little drive to change procedures to increase safety.'' Mr. Danko 
also stated that the exceptions for Chapter 11 bankruptcy and 
administrative or judicial appeals are reasonable.

Association of American Railroads and the American Short Line and 
Regional Railroad Association

    The AAR and ASLRRA assert that PHMSA exceeds the scope of the MAP-
21 mandate by ``constraining the right of the respondent to both 
judicial and administrative review'' of a Cessation of Operations Order 
(COO). They state that proof that the respondent has filed in a Federal 
Circuit Court for relief from a final agency action is sufficient 
enough to prevent a COO from taking effect and that the respondent 
should not need an Emergency Stay order to halt the COO. They request 
that PHMSA delete the proposed language for 49 CFR 109.101(d) in its 
entirety and add language to 49 CFR 109.101, which states that proof of 
appeal of the COO is enough to stay the order.
    We disagree that we have exceeded the scope of the MAP-21 mandate. 
The COO can be issued only after all rights of appeal for the penalty 
have been exhausted or waived by the respondent. If the respondent has 
filed for relief from a final agency order assessing a penalty, whether 
administratively or judicially, the obligation to pay that penalty is 
stayed pending the outcome of the administrative or judicial review. A 
final agency order typically assigns a payment due date for 30 days 
after receipt of the order, unless other payment arrangements have been 
agreed upon between the parties. A respondent has 60 days to file for 
judicial review. The notice of the COO is not issued until 45 days 
after the first payment is due. That date would generally fall 75 days 
after receipt of the final agency order. Therefore, a COO would never 
be issued in cases where a respondent has exercised its right of appeal 
of the underlying penalty.
    In cases where all rights of appeal for the underlying penalty have 
been exhausted or waived and the COO has been timely issued, the 
respondent may still file for a judicial stay before the COO takes 
effect. If the court determines that such a stay is merited, it will 
issue the stay and the COO's effective date will be halted. We think it 
is important to reiterate that the right of review of the COO is not an 
invitation to revisit the substance of the underlying circumstances 
that led to the penalty assessment. The procedures for exercising the 
right of review established by this final rule are restricted to the 
COO only. The rights of appeal and review for the penalty assessment in 
the final agency order are not changed by this rule. Based on the 
foregoing, we are not adopting the changes proposed by the AAR and 
ASLRRA.

Reusable Industrial Packaging Association

    The RIPA asserts that ``failure to make a payment should not in 
isolation trigger a COO.'' It argues that a facility that otherwise has 
been brought into full compliance with the HMR and can demonstrate to 
the agency's satisfaction that extenuating circumstances have led to a 
facility's inability to pay the penalty should be granted an extension 
for payment.
    This rule allows agency discretion in re-negotiating a payment plan 
with a respondent who has failed to abide by the original payment terms 
of the final agency order. We believe that this discretion is 
sufficient to address extenuating circumstances. The RIPA also 
indicates that, in its estimation, the 90-day time frame between a 
missed payment and an order to cease hazmat operations is too brief and 
recommends that PHMSA reconsider its position. We disagree that 90 days 
is too brief and are statutorily mandated to impose the 90-day time 
frame under MAP-21.
    Finally, the RIPA also asks PHMSA to consider the option of ``no-
action'' in response to the Congressional mandate to issue this 
rulemaking. Upon adoption of the new authority, each modal agency would 
have the discretion to implement the authority or not as it sees fit. 
As noted in the NPRM, PHMSA believes allowing delinquent adjudicated 
violators to continue to engage in regulated activities while showing 
disregard for regulations and/or regulatory enforcement orders would 
weaken DOT's ability to ensure compliance with the HMR. Taking no 
action would be inconsistent with Congress' direction and undesirable 
from the standpoint of safety and enforcement. Failure to implement the 
new authority would substantially impact safety because entities that 
ignore assessed civil penalties for violations of the HMR would 
continue to conduct hazardous materials operations.

IV. Summary of the Final Rule

    This final rule amends 49 CFR Part 109 to implement the authority 
granted under section 33010 of MAP-21's amendment to 49 U.S.C. 5123. 
Specifically, that statute prohibits a person from engaging in 
regulated hazardous materials operations upon failure to pay a civil 
penalty and mandates that the Secretary issue a rule setting forth the 
procedures requiring a person delinquent in paying a civil penalty to 
cease regulated activity until payment is made. In response, in this 
rule, we adopt a new Subpart E to Part 109 setting forth procedures to 
require a person who is delinquent in paying civil penalties to cease 
regulated hazardous materials operations until payment has been made or 
an acceptable payment plan has been arranged. We also add procedural 
requirements to ensure that a person subject to the prohibition is 
notified in writing and given an opportunity to respond before being 
required to cease hazardous materials operations.
    Under the provisions of this final rule, the agency that issued the 
final order outlining the terms and outcome of an enforcement action 
will send the respondent a COO if payment has not been received within 
45 calendar days after the payment due date or a payment plan 
installment date as specified in the final order. The COO would notify 
the respondent that it must cease hazardous materials operations on the 
91st calendar day after failing to make payment in accordance with the

[[Page 46197]]

agency's final order or payment plan arrangement, unless payment is 
made. A respondent will be allowed to appeal the COO within 20 days of 
receipt of the order according to the procedures set forth by the 
agency issuing the COO.
    As discussed above, section 33010 of MAP-21 specifically states 
that the prohibition on hazardous materials operations shall not apply 
to a person unable to pay civil penalties because such person is a 
debtor in a case under Chapter 11 of the Bankruptcy Code. Such a person 
must provide the enforcing agency with the following information about 
its bankruptcy proceeding: (1) The chapter of the Bankruptcy Code under 
which the bankruptcy proceeding is filed (i.e., Chapter 7 or 11); (2) 
the bankruptcy case number; (3) the court in which the bankruptcy 
proceeding was filed; and (4) any other information requested by the 
agency to determine a debtor's bankruptcy status. This information will 
enable the agency to verify debtor status and to work with the 
bankruptcy court, if needed, to assess the debtor's ability to pay 
penalties when determining whether to prohibit hazardous materials 
operations.
    PHMSA, FAA, FMCSA, and FRA caution regulated entities not to 
construe the right to appeal a COO as an opportunity to re-argue the 
merits of the penalty assessment. Regulated entities have had ample 
opportunity to address the merits of any proposed penalty assessment at 
earlier stages in the enforcement process. The only information 
sufficient to prevent the prohibition on hazardous material operations 
after nonpayment of penalties would be proof of payment, proof of 
bankruptcy debtor status and an inability to pay, or an Emergency Stay 
issued by a Federal District Court with jurisdiction over these 
matters. Additionally, at the discretion of the agency, upon appeal by 
the respondent, the agency can rescind the COO if an agreeable payment 
plan has been arranged. Persons that continue to conduct regulated 
activities in violation of the COO will be subject to additional 
penalties, including criminal prosecution pursuant to 49 U.S.C. 5124.

V. Regulatory Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This final rule is published under the authority of 49 U.S.C. 
5103(b), which authorizes the Secretary to prescribe regulations for 
the safe transportation, including security, of hazardous material in 
intrastate, interstate, and foreign commerce and under the authority of 
49 U.S.C. 5121(e). This final rule would revise certain civil 
enforcement authority to enable the appropriate DOT administration to 
issue a Cessation of Operations Order (COO) to a person who fails to 
pay civil penalties for violations of the HMR and other regulations, 
approvals, special permits, and orders issued under Federal Hazardous 
Material Transportation Law (Hazmat Law), 49 U.S.C. 5101 et seq. 
assessed pursuant to 49 CFR 107.311 (PHMSA), 14 CFR Part 13 (FAA), 49 
CFR Part 386 (FMCSA), and 49 CFR Part 209, Subpart B (FRA). The final 
rule carries out a statutory mandate and clarifies DOT's roles and 
responsibilities in ensuring that hazardous materials are being safely 
transported and in enhancing the regulated community's compliance with 
regulatory requirements.

B. Executive Order 12866, Executive Order 13610, Executive Order 13563, 
and DOT Regulatory Policies and Procedures

    This final rule is not considered a significant regulatory action 
under section 3(f) Executive Order 12866 and, therefore, was not 
reviewed by the Office of Management and Budget (OMB). The final rule 
is not considered a significant rule under the Regulatory Policies and 
Procedures order issued by the U.S. Department of Transportation (44 FR 
11034).
    Executive Order 13610, issued May 10, 2012, urges agencies to 
conduct retrospective analyses of existing rules to examine whether 
they remain justified and whether they should be modified or 
streamlined in light of changed circumstances, including the rise of 
new technologies.
    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. Executive Order 13563, issued January 18, 
2011, notes that our nation's current regulatory system must not only 
protect public health, welfare, safety, and our environment but also 
promote economic growth, innovation, competitiveness, and job creation. 
Further, this executive order urges government agencies to consider 
regulatory approaches that reduce burdens and maintain flexibility and 
freedom of choice for the public. In addition, federal agencies are 
asked to periodically review existing significant regulations, 
retrospectively analyze rules that may be outmoded, ineffective, 
insufficient, or excessively burdensome, and modify, streamline, 
expand, or repeal regulatory requirements in accordance with what has 
been learned.
    By building off of each other, these three Executive Orders require 
agencies to regulate in the ``most cost-effective manner,'' to make a 
``reasoned determination that the benefits of the intended regulation 
justify its costs,'' and to develop regulations that ``impose the least 
burden on society.'' PHMSA is making no changes to the HMR that govern 
the transportation of hazmat, thus the changes do not carry any 
additional compliance requirements or costs for entities that must 
comply with the HMR. The changes in this rule will affect entities 
after they have violated the HMR in ways that substantially impact 
safety, a civil penalty has been assessed, and the entities are 
delinquent in the payment of the finally adjudicated administrative 
penalties. Of the estimated 200,000 entities that PHMSA regulates, a 
limited number are subject to civil penalty assessments in a given year 
for violations related to the HMR. Fewer still disregard agency orders 
requiring payment of civil penalties. Since 2010, on average, only 10 
companies per year have been referred for debt collection after being 
90 days overdue on their civil penalty assessments for PHMSA 
enforcement actions. An entity that receives a COO and fails to pay its 
penalty will incur costs associated with the cessation of activities 
regulated under the HMR. However, this cost is associated with non-
compliance. Companies in compliance with the HMR will not bear any 
costs.

C. Executive Order 13132

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13132 (``Federalism''). 
Pursuant to 49 U.S.C. 5125(i), the preemption provisions in Hazmat Law 
do ``not apply to any procedure . . . utilized by a State, or Indian 
tribe to enforce a requirement applicable to the transportation of 
hazardous material.'' Accordingly, this final rule has no preemptive 
effect on State, local, or Indian tribe enforcement procedures and 
penalties, and preparation of a federalism assessment is not warranted.

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 tribal implications and does not impose substantial 
direct compliance costs, the

[[Page 46198]]

funding and consultation requirements of Executive Order 13175 do not 
apply.

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

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an 
agency to review regulations to assess their impact on small entities 
unless the agency determines that a rule is not expected to have 
significant impact on a substantial number of small entities. Based on 
the assessment in the preliminary regulatory evaluation, I hereby 
certify that this final rule will not have a significant economic 
impact on a substantial number of small entities. This final rule 
applies to offerors and carriers of hazardous materials, some of which 
are small entities; however, there will not be any economic impact on 
any person who complies with the Hazmat Law and the regulations and 
orders issued under that law.
    Potentially affected small entities. The provisions in this final 
rule will apply to persons who perform, or cause to be performed, 
functions related to the transportation of hazardous materials in 
commerce. This includes offerors of hazardous material and persons in 
physical control of a hazardous material during transportation in 
commerce. Such persons may primarily include motor carriers, air 
carriers, vessel operators, rail carriers, temporary storage 
facilities, and intermodal transfer facilities. Unless alternative 
definitions have been established by the agency in consultation with 
the Small Business Administration, the definition of ``small business'' 
has the same meaning as under the Small Business Act (15 CFR parts 631-
657c). Therefore, because no such special definition has been 
established, PHMSA employs the thresholds (published in 13 CFR 121.201) 
of 1,500 employees for air carriers (NAICS Subgroup 481), 500 employees 
for rail carriers (NAICS Subgroup 482), 500 employees for vessel 
operators (NAICS Subgroup 483), $22.5 million in revenues for motor 
carriers (NAICS Subgroup 484), and $22.5 million in revenues for 
warehousing and storage companies (NAICS Subgroup 493). Of the 
approximately 200,000 entities to which this final rule would apply 
(104,000 of which are motor carriers), we estimate that about 90 
percent are small entities.
    Potential cost impacts. This final rule amends 49 CFR Part 109, 
which contains regulations on the process for collecting civil 
penalties. These regulations are not part of the HMR, which govern the 
transportation of hazmat, thus they do not carry any additional 
compliance requirements or costs for entities that must comply with the 
HMR.
    Alternate proposals for small business. Because this final rule 
addresses a Congressional mandate, we have limited latitude in defining 
alternative courses of action. Taking no action would be inconsistent 
with Congress' direction and undesirable from the standpoint of safety 
and enforcement. Failure to implement the new authority will 
substantially impact safety because entities that ignore assessed civil 
penalties for violations of the HMR will continue to conduct hazardous 
materials operations.

F. Paperwork Reduction Act

    PHMSA has analyzed this final rule in accordance with the Paperwork 
Reduction Act of 1995 (PRA). The PRA requires federal agencies to 
minimize the paperwork burden imposed on the American public by 
ensuring maximum utility and quality of federal information, ensuring 
the use of information technology to improve government performance, 
and improving the federal government's accountability for managing 
information collection activities. This final rule contains no new 
information collection requirements subject to the PRA.

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 
April and October 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

    This final rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. PHMSA has concluded that the 
final rule will not impose annual expenditures of $141.3 million on 
State, local, or tribal governments or the private sector, and thus 
does not require an Unfunded Mandates Act analysis.

I. 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 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 under the 
Trade Agreement Act, as amended.

J. Environmental Assessment

    The National Environmental Policy Act, 42 U.S.C. 4321-4375, 
requires federal agencies to analyze proposed actions to determine 
whether an action will have a significant impact on the human 
environment. The Council on Environmental Quality (CEQ) regulations 
require federal agencies to conduct an environmental review considering 
(1) the need for the proposed action; (2) alternatives to the proposed 
action; (3) probable environmental impacts of the proposed action and 
alternatives; and (4) the agencies and persons consulted during the 
consideration process. 40 CFR 1508.9(b).
1. Purpose and Need
    In section 33010 of MAP-21, Congress required the Secretary to 
issue regulations to require a person who is delinquent in paying civil 
penalties to cease any activity regulated under the Hazmat Law until 
payment has been made or until an acceptable payment plan has been 
arranged. PHMSA

[[Page 46199]]

believes that persons who fail to comply with the Hazmat Law and fail 
to pay civil penalties are not fit to transport hazardous materials, as 
they are more likely to jeopardize public safety and/or the 
environment. This final rule and underlying legislation may encourage 
companies that disregard the HMR to exit the hazardous materials arena 
because continuing hazardous materials transportation after a COO is 
punishable by additional penalties and criminal prosecution. This tool 
will greatly enhance the enforcement and debt collection tools 
available to PHMSA, FAA, FMCSA, and FRA, without impacting entities 
that comply with final orders, the Hazmat Law, and the HMR. See 
Background section of the preamble to this final rule, supra.
2. Alternatives
    In MAP-21's amendments to 49 U.S.C. 5123(i), Congress specifies 
that a person that ``fails to pay a civil penalty assessed under this 
chapter, or fails to arrange and abide by an acceptable payment plan 
for such civil penalty, may not conduct any activity regulated under 
this chapter beginning on the 91st day after the date specified by 
order of the Secretary for payment of such penalty.'' Congress also 
provided limited exceptions for debtors in a case under Chapter 11 of 
Title 11 and persons who have filed an appeal of an order. Because this 
final rule simply carries out a prescriptive Congressional mandate, 
PHMSA did not consider alternatives.
    CEQ regulations suggest that agencies consider the alternative of 
no-action. 40 CFR 1502.14(d) and 1508.25(b). Although the purpose of 
this rulemaking is to carry out the above-described mandate in MAP-21, 
PHMSA considered the environmental impacts of the no-action 
alternative.
3. Analysis of Environmental Impacts
    The goal of this final rule is to prevent violators of the HMR from 
ignoring enforcement proceedings and continuing to conduct business 
subject to the HMR. PHMSA believes that such companies are not fit to 
conduct hazardous materials transportation and may be more likely to 
commit further violations that could endanger the public and the 
environment. For these reasons, PHMSA believes that the final rule 
could decrease the likelihood of hazardous materials incidents.
    A release of hazardous materials could result in a myriad of 
environmental and human health consequences such as fires, explosions, 
asphyxiation, contamination of marine environments, exposure of 
increased levels of radioactivity, etc. If hazardous material shipments 
are not properly marked, labeled, packaged, and handled, as dictated by 
the HMR, risk of release and exposure increases. Incidents occurring 
during aircraft or vessel transportation are more likely to threaten 
human health and the environment. Emergency responders are also at 
greater risk and are less effective at responding to incidents when 
hazardous materials shipments do not comply with prescribed 
communication requirements. PHMSA believes that this final rule will 
further strengthen DOT's ability to ensure compliance with the HMR, 
which decreases the likelihood of a hazardous materials release, 
enhancing safety and environmental protection.
    If PHMSA were to select the ``no action'' alternative, contrary to 
Congressional intent, entities that had been found to have violated the 
HMR and made no effort to pay a civil penalty for more than 90 days 
would be able to continue to perform functions subject to the HMR, 
including preparing hazardous materials for shipment and shipping 
hazardous materials in commerce. PHMSA believes allowing delinquent 
adjudicated violators to continue to engage in regulated activities 
while showing disregard for regulations and/or regulatory enforcement 
orders would weaken PHMSA's ability to ensure compliance with the HMR.
4. Agencies and Persons Consulted
    In drafting this final rule, PHMSA consulted with FAA, FMCSA, and 
FRA.
    Our determination is that this action would result in a generalized 
positive impact on the human environment, but not significant to such a 
degree as would warrant a detailed discussion of any impact(s); and 
would result in no negative impacts to the human environment because 
this action affects violators of the HMR. Additionally, we received no 
comment to the NPRM regarding any environmental impact of this 
rulemaking.

K. Privacy Act

    Anyone is able to search the electronic form of any written 
communications and comments received into any of 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 in 
the Federal Register published on April 11, 2000 (65 FR 19477) or you 
may visit http://www.dot.gov/privacy.html.

List of Subjects

49 CFR Part 107

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

49 CFR Part 109

    Definitions, Inspections and investigations, Emergency orders, 
Imminent hazards, Remedies generally.

    In consideration of the foregoing, we are amending 49 CFR Chapter I 
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; Pub. L. 112-141 section 33006; 49 CFR 1.81 
and 1.97.

0
2. In Subpart D, add new Sec.  107.338 to read as follows:

Sec.  107.338  Prohibition of hazardous materials operations.

    As provided for in subpart E of part 109 of this subchapter, a 
person who fails to pay a civil penalty in accordance with agreed upon 
installments or in full within prescribed time lines, is prohibited 
from conducting hazardous materials operations and shall immediately 
cease all hazardous materials operations.

PART 109--DEPARTMENT OF TRANSPORTATION HAZARDOUS MATERIAL 
PROCEDURAL REGULATIONS

0
3. The authority citation for part 109 continues to read as follows:

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

0
4. Revise the heading of part 109 to read as set forth above.

0
5. Add new subpart E to read as follows:

Subpart E--Prohibition on Hazardous Materials Operations After 
Nonpayment of Penalties

Sec.
109.101 Prohibition of hazardous materials operations.
109.103 Notice of nonpayment of penalties.

Sec.  109.101  Prohibition of hazardous materials operations.

    (a) Definition of hazardous materials operations. For the purposes 
of this

[[Page 46200]]

subpart, hazardous materials operations means any activity regulated 
under the Federal hazardous material transportation law, this 
subchapter or subchapter C of this chapter, or an exemption or special 
permit, approval, or registration issued under this subchapter or under 
subchapter C of this chapter.
    (b) Failure to pay civil penalty in full. A respondent that fails 
to pay a hazardous material civil penalty in full within 90 days after 
the date specified for payment by an order of the Pipeline and 
Hazardous Materials Safety Administration, Federal Aviation 
Administration, Federal Motor Carrier Safety Administration, or Federal 
Railroad Administration is prohibited from conducting hazardous 
materials operations and shall immediately cease all hazardous 
materials operations beginning on the next day (i.e., the 91st). The 
prohibition shall continue until payment of the penalty has been made 
in full or at the discretion of the agency issuing the order an 
acceptable payment plan has been arranged.
    (c) Civil penalties paid in installments. On a case by case basis, 
a respondent may be allowed to pay a civil penalty pursuant to a 
payment plan, which may consist of installment payments. If the 
respondent fails to make an installment payment contained in the 
payment plan on the agreed upon schedule, the payment plan shall be 
null and void and the full outstanding balance of the civil penalty 
shall be payable immediately. A respondent that fails to pay the full 
outstanding balance of its civil penalty within 90 days after the date 
of the missed installment payment shall be prohibited from conducting 
hazardous materials operations beginning on the next day (i.e., the 
91st). The prohibition shall continue until payment of the outstanding 
balance of the civil penalty has been made in full, including any 
incurred interest or until at the discretion of the agency issuing the 
order another acceptable payment plan has been arranged.
    (d) Appeals to Federal Court. If the respondent appeals an agency 
order issued pursuant to Sec.  109.103 to a Federal Circuit Court of 
Appeals, the terms and payment due date of the order are not stayed 
unless the Court so specifies.
    (e) Applicability to ticketing. This section does not apply to a 
respondent who fails to pay a civil penalty assessed by a ticket issued 
pursuant to Sec.  107.310 of this subchapter.
    (f) Applicability to debtors. This section does not apply to a 
respondent who is unable to pay a civil penalty because the respondent 
is a debtor in a case under chapter 11, title 11, United States Code. A 
respondent who is a debtor in a case under chapter 11, title 11, United 
States Code must provide the following information to the agency 
decision maker identified in the original agency order or on its 
certificate of service.
    (1) The chapter of the Bankruptcy Code under which the bankruptcy 
proceeding is filed;
    (2) The bankruptcy case number;
    (3) The court in which the bankruptcy proceeding was filed; and
    (4) Any other information requested by the agency to determine a 
debtor's bankruptcy status.
    (g) Penalties for prohibited hazardous materials operations. A 
respondent that continues to conduct hazardous materials operations in 
violation of this section may be subject to additional penalties, 
including criminal prosecution pursuant to 49 U.S.C. 5124.

Sec.  109.103  Notice of nonpayment of penalties.

    (a) If a full payment of a civil penalty, or an installment payment 
as part of agreed upon payment plan, has not been made within 45 days 
after the date specified for payment by the final agency order, the 
agency may issue a cessation of hazardous materials operations order to 
the respondent.
    (b) The cessation of hazardous materials operations order issued 
under this section shall include the following information:
    (1) A citation to the statutory provision or regulation the 
respondent was found to have violated and to the terms of the order or 
agreement requiring payment;
    (2) A statement indicating that if the respondent fails to pay the 
full outstanding balance of the civil penalty within 90 days after the 
payment due date, the respondent shall be prohibited from conducting 
any activity regulated under the Federal hazardous material 
transportation law, this subchapter or subchapter C of this chapter, or 
an exemption or special permit, approval, or registration issued under 
this subchapter or under subchapter C of this chapter;
    (3) A statement describing the respondent's options for responding 
to the order which will include an option to file an appeal for 
reconsideration of the cessation of operations order within 20 days of 
receipt of the order; and
    (4) A description of the manner in which the respondent can make 
payment of any money due the United States as a result of the 
proceeding (i.e., the full outstanding balance of the civil penalty).
    (c) The cessation of hazardous materials operation order will be 
delivered by personal service, unless such service is impossible or 
impractical. If personal service is impossible or impractical then 
service may be made by certified mail or commercial express service. If 
a respondent's principal place of business is in a foreign country, it 
will be delivered to the respondent's designated agent (as prepared in 
accordance with Sec.  105.40 of this subchapter).

    Issued in Washington, DC, on August 1, 2014 under authority 
delegated in 49 CFR part 1.97.
Cynthia L. Quarterman,
Administrator.
[FR Doc. 2014-18617 Filed 8-6-14; 8:45 am]
BILLING CODE 4910-60-P