81 FR 42266 - Hazardous Materials: Revision of Maximum and Minimum Civil Penalties

DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration

Federal Register Volume 81, Issue 125 (June 29, 2016)

PHMSA is revising 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. The ``Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015'' (the 2015 Act), which amended the Federal Civil Penalties, Inflation Adjustment Act of 1990 (the Inflation Adjustment Act), requires Agencies to update their civil monetary penalties through interim final rulemaking. The maximum civil penalty for a knowing violation is now $77,114, except for violations that result in death, serious illness, or severe injury to any person or substantial destruction of property, for which the maximum civil penalty is $179,933. In addition, the minimum civil penalty amount for a violation relating to training is now $463.

[Federal Register Volume 81, Number 125 (Wednesday, June 29, 2016)]
[Rules and Regulations]
[Pages 42266-42268]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-15404]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 107 and 171

[Docket No. PHMSA-2016-0041 (HM-258D)]
RIN 2137-AF23


Hazardous Materials: Revision of Maximum and Minimum Civil 
Penalties

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

ACTION: Interim final rule.

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SUMMARY: PHMSA is revising 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. The ``Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015'' (the 2015 Act), which amended the Federal 
Civil Penalties, Inflation Adjustment Act of 1990 (the Inflation 
Adjustment Act), requires Agencies to update their civil monetary 
penalties through interim final rulemaking. The maximum civil penalty 
for a knowing violation is now $77,114, except for violations that 
result in death, serious illness, or severe injury to any person or 
substantial destruction of property, for which the maximum civil 
penalty is $179,933. In addition, the minimum civil penalty amount for 
a violation relating to training is now $463.

DATES: Effective Date: August 1, 2016.

FOR FURTHER INFORMATION CONTACT: Laura Ulmer or Shawn Wolsey, 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

    Section 701 of the ``Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015'' (the 2015 Act) (Pub. L. 114-74, 129 
Stat. 599 [November 2, 2015]), which amended the Federal Civil 
Penalties, Inflation Adjustment Act of 1990 (the Inflation Adjustment 
Act) (Pub. L. 101-410), requires that the Agency make an initial catch 
up adjustment with subsequent annual adjustments to 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 maximum and minimum civil penalty amounts apply to 
violations assessed on or after the effective date, August 1, 2016.
    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,'' M16-06, provides guidance on how to update agencies' civil 
penalties pursuant to the 2015 Act. For the catch up adjustment, the 
calculation uses multipliers to adjust the civil monetary penalties, or 
the minimum and maximum penalties, based on the year the penalty was 
established or last adjusted by statute or regulation other than under 
the Inflation Adjustment Act. The Agency or Department would then use 
the multiplier, based on the Consumer Price Index for October 2015 
provided in a table in that guidance document, and multiply it by the 
current penalty. Congress passed the Moving Ahead for Progress in the 
21st Century Act (MAP-21) in 2012, which amended the maximum penalty 
for a knowing violation of the Federal hazardous material safety law, 
regulation, order, special permit, or approval to $75,000, and 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. MAP-21 also added a $450 minimum for a training violation. 
The multiplier for 2012, which was the last year these civil monetary 
penalties were amended by statute or regulation other than under the 
Inflation Adjustment Act, from the guidance document is 1.02819. After 
making the adjustment, all penalty levels must be rounded to the 
nearest dollar, but no penalty level may be increased by more than 150 
percent of corresponding penalty levels in effect on November 2, 2015.
    Accordingly, PHMSA is revising the references to the maximum and 
minimum civil penalty amounts in its regulations to reflect the changes 
required by the 2015 Act. In 49 CFR 107.329, Appendix A to subpart D of 
49 CFR part 107, and 49 CFR 171.1 are:
     Revising the maximum civil penalty from $75,000 to $77,114 
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 $175,000 to 
$179,933 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.
     Revising the minimum penalty amount from $450 to $463 for 
a violation related to training.
    As required by the 2015 Act, PHMSA is making these catch up 
adjustments through an interim final rule. PHMSA is not providing a 
notice of proposed rulemaking or an opportunity for public comment. The 
catch up adjustments required by the 2015 Act are statutorily required 
ministerial acts, for which PHMSA has no discretion, and as a result 
public comment is unnecessary. As such, notice and comment procedures 
are ``impracticable, unnecessary, or contrary to the public interest'' 
within the meaning of the Administrative Procedure Act. 5 U.S.C. 
553(b)(3)(B).

II. Rulemaking Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This interim 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 $77,114 and $179,933, 
respectively, and (2) revising the minimum penalty amount to $463 for a 
violation related to training.

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

    This interim final rule has been evaluated in accordance with 
existing policies and procedures and determined to be non-significant 
under Executive Orders 12866 and 13563. However,

[[Page 42267]]

consistent with OMB memorandum M-16-06, this interim final rule was 
reviewed by OMB in order to make a significance determination.
    Further, this rule is not a significant regulatory action under the 
Regulatory Policies and Procedures of the DOT, 44 FR 11034; Feb. 26, 
1979. It is a ministerial act for which the agency has no discretion. 
The economic impact of the interim 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 interim final 
rule, the impacts will be very limited.
    This interim final rule is being undertaken to address our 
statutory requirements. 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. Moreover, as the cost is 
an inflationary adjustment and the magnitude of the increase is 
minimal, since these penalties were recently enacted, reflected costs 
are nominal. The amendments in this rule could provide safety benefits 
(i.e., larger penalties deterring knowing violators). Overall, it is 
anticipated this rulemaking would have minimal real costs and benefits.

C. Executive Order 13132

    This interim 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 interim 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 interim 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 (RFA) (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 
businesses transporting hazardous material. Therefore, PHMSA certifies 
this rule would not have a significant economic impact on a substantial 
number of small entities.
    In addition, PHMSA has determined the RFA does not apply to this 
rulemaking. The 2015 Act requires PHMSA to publish an interim final 
rule and does not require PHMSA to complete notice and comment 
procedures under the APA. The Small Business Administration's A Guide 
for Government Agencies: How to Comply with the Regulatory Flexibility 
Act (2003), provides that:

    If, under the APA or any rule of general applicability governing 
Federal grants to state and local governments, the agency is 
required to publish a general notice of proposed rulemaking (NPRM), 
the RFA must be considered [citing 5 U.S.C. 604(a)] . . . . If an 
NPRM is not required, the RFA does not apply.

Therefore, because the 2015 Act does not require an NPRM for this 
rulemaking, the RFA does not apply.

F. Paperwork Reduction Act

    There are no new information requirements in this interim 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 interim 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 interim final rule.

J. Privacy Act

    Anyone is able to search the electronic form of all comments 
received by any of our dockets using 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.thefederalregister.org/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

[[Page 42268]]

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 interim 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

    General information, Regulations, and Definitions.

    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; Pub. L. 104-121, sections 212-213; Pub. L. 104-134, section 
31001; Pub. L. 114-74 section 4 (28 U.S.C. 2461 note); 49 CFR 1.81 
and 1.97.


0
2. Revise Sec.  107.329 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 $77,114 for each 
violation, except the maximum civil penalty is $179,933 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 $463 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 
$77,114 for each violation, except the maximum civil penalty is 
$179,933 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 $463 
for violations relating to training.

0
3. In Appendix A to subpart D of part 107, Section II.B. (``Penalty 
Increases for Multiple Counts''), the first sentence of the second 
paragraph is revised to read as follows:

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

* * * * *
    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 $77,114 or $179,933 for a 
violation occurring on or after August 1, 2016.
* * * * *

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; Pub. L. 104-134, section 31001; Pub. L. 114-74 section 4 (28 
U.S.C. 2461 note); 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 $77,114 for each violation, except the maximum civil 
penalty is $179,933 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 $463 for a violation relating to training.

    Issued in Washington, DC, on June 14, 2016 under authority 
delegated in 49 CFR part 1.97.
Marie Therese Dominguez,
Administrator, Pipeline and Hazardous Materials Safety Administration.
[FR Doc. 2016-15404 Filed 6-28-16; 8:45 am]
 BILLING CODE 4910-60-P