81_FR_71766 81 FR 71566 - Pipeline Safety: General Policy Statement; Civil Penalties

81 FR 71566 - Pipeline Safety: General Policy Statement; Civil Penalties

DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration

Federal Register Volume 81, Issue 200 (October 17, 2016)

Page Range71566-71569
FR Document2016-25000

The purpose of this policy statement is to advise pipeline owners and operators that the Pipeline and Hazardous Materials Safety Administration (PHMSA) has now made a civil penalty framework accessible on its Web site and, effective October 17, 2016, a respondent in an enforcement case may request a proposed civil penalty calculation related to that case. It further advises pipeline owners and operators that PHMSA will, as appropriate, issue higher penalties in order to apply stronger deterrence and drive down incident risk.

Federal Register, Volume 81 Issue 200 (Monday, October 17, 2016) 
[Federal Register Volume 81, Number 200 (Monday, October 17, 2016)]
[Notices]
[Pages 71566-71569]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-25000]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration (PHMSA)

[Docket No. PHMSA-2016-0101]


Pipeline Safety: General Policy Statement; Civil Penalties

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

ACTION: Notice.

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SUMMARY: The purpose of this policy statement is to advise pipeline 
owners and operators that the Pipeline and Hazardous Materials Safety 
Administration (PHMSA) has now made a civil penalty framework 
accessible on its Web site and, effective October 17, 2016, a 
respondent in an enforcement case may request a proposed civil penalty 
calculation related to that case. It further advises pipeline owners 
and operators that PHMSA will, as appropriate, issue higher penalties 
in order to apply stronger deterrence and drive down incident risk.

DATES: A respondent in an enforcement case may request the proposed 
civil penalty calculation associated with its case, effective October 
17, 2016. In addition, the civil penalty summary attached to this 
policy statement is now available on PHMSA's Web site.

FOR FURTHER INFORMATION CONTACT: Rod Dyck, Enforcement Director, 
[email protected], 202-366-3844.

SUPPLEMENTARY INFORMATION: In accordance with chapter 601 of Title 49, 
United States Code, after notice and an opportunity for a hearing, the 
Associate Administrator may assess a civil penalty for a violation of a 
pipeline safety regulation or order (49 U.S.C. 60122). In order to 
provide summary guidance to operators about the penalty ranges for 
proposed penalties, PHMSA currently provides a civil penalty framework 
upon request, as referenced in an earlier notice ``Pipeline Safety: 
Administrative Procedures; Updates and Technical Corrections'' (78 FR 
58897; September 25, 2013). PHMSA will now post the civil penalty 
framework on its Web site in order to provide greater transparency 
regarding administrative civil penalties. This summary will be updated 
periodically and is available at http://www.phmsa.dot.gov. Effective 
October 17, 2016, PHMSA will also provide a more detailed proposed 
civil penalty calculation upon request to a respondent, along with the 
violation report, and any other items in the case file, as defined in 
49 CFR 190.209.
    PHMSA's proposed penalty calculation methodology is based upon 49 
U.S.C. 60122 and 49 CFR 190.225. The Associate Administrator must 
consider:

    (1) The nature, circumstances and gravity of the violation, 
including adverse impact on the environment; (2) The degree of the 
respondent's culpability; (3) The respondent's history of prior 
offenses; (4) Any good faith by the respondent in attempting to 
achieve compliance; and (5) The effect on the respondent's ability 
to continue in business. The Associate Administrator may consider: 
(1) The economic benefit gained from violation, if readily 
ascertainable, without any reduction because of subsequent damages; 
and (2) Such other matters as justice may require.

    Consistent with this statutory direction, enforcement personnel use 
a proposed civil penalty calculation to document consideration of these 
factors and how its personnel arrive at a proposed civil penalty.
    The Pipeline Safety Act of 2011 (``the 2011 Act'') increased the 
maximum administrative civil penalties for violation of the pipeline 
safety laws and regulations to $200,000 per violation per day, with a 
maximum of $2,000,000 for a related series of violations. These 
administrative civil penalty maximums apply to violations that occur or 
are discovered after January 3, 2012. In order to apply stronger 
deterrence and drive down incident risk, PHMSA intends to exercise its 
current authority, as appropriate, which will result in higher 
penalties across the board for any violation of Federal pipeline safety 
standards. In addition, PHMSA will give greater weight to certain 
factors when assessing civil penalties, specifically for violations 
that: (1) Are causal to incidents or that increase the severity of 
incidents, including those involving smaller hazardous liquid spills or 
resulting in methane releases; (2) are ``repeat offenses'' or 
violations of the same safety standard in the past five years; and (3) 
involve multiple instances of the same violation. Finally, PHMSA 
recently increased its maximum civil penalties to account for changes 
in inflation. (Pipeline Safety: Inflation Adjustment of Maximum Civil 
Penalties, 81 FR 42564, June 30, 2016).
    Administrative civil penalties constitute only one of the 
enforcement tools that PHMSA employs to promote compliance with the 
pipeline safety regulations. While PHMSA is providing greater 
transparency to the regulated community, the agency retains broad 
discretion in its evaluation of the assessment considerations outlined 
in its regulations. The release of these additional materials regarding 
the proposed calculation of civil penalties will not otherwise alter 
the administrative enforcement process.

Civil Penalty Framework

    This summary provides a general overview to assist the public in 
understanding civil penalty calculations. Following an inspection or 
investigation of a pipeline facility that reveals a probable violation, 
the Office of Pipeline Safety prepares a Violation Report to document 
the violation. For any violation that warrants a civil penalty, data 
from the completed Violation Report is used to calculate risk-based 
civil penalties considering the statutory assessment factors in 49 
U.S.C. 60122 and 49 CFR 190.225.
    The assessment factors are listed below in the left side column of 
the table. The middle column explains the range of potential conduct 
that was observed by PHMSA in connection with the violation, generally 
from least to most severe. A Violation Report must make a selection 
within this range for each assessment factor. The right side column 
provides a range for the civil penalty that may be assessed under each 
assessment factor.
    A civil penalty for a single violation is arrived at by combining 
the amounts assigned under each assessment factor. Application of the 
assessment factors in an individual case will depend on the facts 
specific to that case.
BILLING CODE 4910-60-P

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    The total civil penalty per violation is calculated based on these 
assessment considerations and adjusted for the applicable daily and 
series limit. If a calculated penalty exceeds the maximum amount 
permitted by statute, the penalty will be reduced by the amount 
exceeding the cap. An administrative civil penalty under 49 U.S.C. 
60122(a)(1) is capped at $200,000 per day for violations occurring 
after January 3, 2012. The maximum civil penalty for a related series 
of violations is $2,000,000 for violations occurring after January 3, 
2012.
    For an administrative civil penalty that occurs on or after August 
1, 2016, the maximum civil penalty limit was increased to $205,638 per 
day and $2,056,380 for a related series of violations pursuant to the 
requirements of Section 701 of the ``Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015'' (Pub. L. 114-72), which 
amended the ``Federal Civil Penalties Inflation Adjustment Act of 
1990'' (Pub. L. 101-410) (Inflation Adjustment Act).

    Issued in Washington, DC, on October 11, 2016, under authority 
delegated in 49 CFR 1.97.
Linda Daugherty,
Deputy Associate Administrator for Field Operations.
[FR Doc. 2016-25000 Filed 10-14-16; 8:45 am]
BILLING CODE 4910-60-C

71566 Federal Register / Vol. 81, No. 200 / Monday, October 17, 2016 / Notices Issued on: October 7, 2016. Corrections’’ (78 FR 58897; September smaller hazardous liquid spills or Larry W. Minor, 25, 2013). PHMSA will now post the resulting in methane releases; (2) are Associate Administrator for Policy. civil penalty framework on its Web site ‘‘repeat offenses’’ or violations of the [FR Doc. 2016–24966 Filed 10–14–16; 8:45 am] in order to provide greater transparency same safety standard in the past five BILLING CODE 4910–EX–P regarding administrative civil penalties. years; and (3) involve multiple instances This summary will be updated of the same violation. Finally, PHMSA periodically and is available at http:// recently increased its maximum civil DEPARTMENT OF TRANSPORTATION www.phmsa.dot.gov. Effective October penalties to account for changes in 17, 2016, PHMSA will also provide a inflation. (Pipeline Safety: Inflation Pipeline and Hazardous Materials more detailed proposed civil penalty Adjustment of Maximum Civil Safety Administration (PHMSA) calculation upon request to a Penalties, 81 FR 42564, June 30, 2016). [Docket No. PHMSA–2016–0101] respondent, along with the violation Administrative civil penalties report, and any other items in the case constitute only one of the enforcement Pipeline Safety: General Policy file, as defined in 49 CFR 190.209. tools that PHMSA employs to promote Statement; Civil Penalties PHMSA’s proposed penalty compliance with the pipeline safety calculation methodology is based upon regulations. While PHMSA is providing AGENCY: Pipeline and Hazardous 49 U.S.C. 60122 and 49 CFR 190.225. greater transparency to the regulated Materials Safety Administration The Associate Administrator must community, the agency retains broad (PHMSA), DOT. consider: discretion in its evaluation of the ACTION: Notice. (1) The nature, circumstances and gravity assessment considerations outlined in of the violation, including adverse impact on its regulations. The release of these SUMMARY: The purpose of this policy the environment; (2) The degree of the additional materials regarding the statement is to advise pipeline owners respondent’s culpability; (3) The proposed calculation of civil penalties and operators that the Pipeline and respondent’s history of prior offenses; (4) will not otherwise alter the Hazardous Materials Safety Any good faith by the respondent in administrative enforcement process. Administration (PHMSA) has now made attempting to achieve compliance; and (5) a civil penalty framework accessible on The effect on the respondent’s ability to Civil Penalty Framework its Web site and, effective October 17, continue in business. The Associate Administrator may consider: (1) The This summary provides a general 2016, a respondent in an enforcement overview to assist the public in economic benefit gained from violation, if case may request a proposed civil understanding civil penalty readily ascertainable, without any reduction penalty calculation related to that case. because of subsequent damages; and (2) Such calculations. Following an inspection or It further advises pipeline owners and other matters as justice may require. investigation of a pipeline facility that operators that PHMSA will, as reveals a probable violation, the Office appropriate, issue higher penalties in Consistent with this statutory direction, enforcement personnel use a of Pipeline Safety prepares a Violation order to apply stronger deterrence and Report to document the violation. For drive down incident risk. proposed civil penalty calculation to document consideration of these factors any violation that warrants a civil DATES: A respondent in an enforcement penalty, data from the completed and how its personnel arrive at a case may request the proposed civil proposed civil penalty. Violation Report is used to calculate penalty calculation associated with its The Pipeline Safety Act of 2011 (‘‘the risk-based civil penalties considering case, effective October 17, 2016. In 2011 Act’’) increased the maximum the statutory assessment factors in 49 addition, the civil penalty summary administrative civil penalties for U.S.C. 60122 and 49 CFR 190.225. attached to this policy statement is now violation of the pipeline safety laws and The assessment factors are listed available on PHMSA’s Web site. regulations to $200,000 per violation per below in the left side column of the FOR FURTHER INFORMATION CONTACT: Rod day, with a maximum of $2,000,000 for table. The middle column explains the Dyck, Enforcement Director, rod.dyck@ a related series of violations. These range of potential conduct that was dot.gov, 202–366–3844. administrative civil penalty maximums observed by PHMSA in connection with SUPPLEMENTARY INFORMATION: In apply to violations that occur or are the violation, generally from least to accordance with chapter 601 of Title 49, discovered after January 3, 2012. In most severe. A Violation Report must United States Code, after notice and an order to apply stronger deterrence and make a selection within this range for opportunity for a hearing, the Associate drive down incident risk, PHMSA each assessment factor. The right side Administrator may assess a civil penalty intends to exercise its current authority, column provides a range for the civil for a violation of a pipeline safety as appropriate, which will result in penalty that may be assessed under each regulation or order (49 U.S.C. 60122). In higher penalties across the board for any assessment factor. order to provide summary guidance to violation of Federal pipeline safety A civil penalty for a single violation operators about the penalty ranges for standards. In addition, PHMSA will give is arrived at by combining the amounts proposed penalties, PHMSA currently greater weight to certain factors when assigned under each assessment factor. provides a civil penalty framework assessing civil penalties, specifically for Application of the assessment factors in upon request, as referenced in an earlier violations that: (1) Are causal to an individual case will depend on the notice ‘‘Pipeline Safety: Administrative incidents or that increase the severity of facts specific to that case. Procedures; Updates and Technical incidents, including those involving BILLING CODE 4910–60–P jstallworth on DSK7TPTVN1PROD with NOTICES VerDate Sep<11>2014 14:22 Oct 14, 2016 Jkt 241001 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 E:\FR\FM\17OCN1.SGM 17OCN1

Federal Register / Vol. 81, No. 200 / Monday, October 17, 2016 / Notices 71567 Assessment Civil Penalty Range of Conduct Consideration Ran2e - Records: • Examples: Missing, inaccurate, or incomplete records $1,728 - Activities: • Examples: Performance or conduct of activities Nature such as inspections, tests, maintenance, meetings, notifications, reports, emergency response, not preparing procedures, or not following procedures - Equipment/Facilities: • Examples: Equipment not installed, missing, defective, inoperative, not properly sized, or not $8,640 compatible with transported commodity - Operator self-reported the violation to PHMSA Variable credit (PHMSA includes State Partners) before it was discovered by PHMSA Circumstances - PHMSA discovered the violation - Public reported the violation to PHMSA (including State Partners) or public inquiry lead to investigation, verified by PHMSA 1 $13,824 - Records violation - Pipeline safety or integrity was minimally affected $1,728 - Pipeline safety or integrity was compromised in areas that are not in an HCA or, for Hazardous Liquids, also if not in an HCA "could affect" segment Gravity - Pipeline safety or integrity was significantly compromised in areas that are not in an HCA or, for Hazardous Liquids, also if not in an HCA "could affect" segment. - Pipeline safety or integrity was compromised in an HCA (High Consequence Areal) or, for Hazardous Liquids, also if in an HCA "could affect" segment - Pipeline safety or integrity was significantly compromised in an HCA or, for Hazardous Liquids, also if in an HCA "could affect" segment - Probable violation increased the severity of an accident/incident - Probable violation was a causal factor for an accident /incident 1 See 49 CFR Parts 192 and 195 for definition of a high consequence area. jstallworth on DSK7TPTVN1PROD with NOTICES EN17OC16.000</GPH> VerDate Sep<11>2014 14:22 Oct 14, 2016 Jkt 241001 PO 00000 Frm 00093 Fmt 4703 Sfmt 4725 E:\FR\FM\17OCN1.SGM 17OCN1

71568 Federal Register/Vol. 81, No. 200 /Monday, October 17, 2016 / Notices The number of instances of a violation incrementally increases the penalty Accident/Incident Consequences Factor Multipliers for the base penalty applied to all assessment considerations: Reportable accident or incident Unlimited Unintentionally released Gas Hazardous Liquid releases Hospitalization injuries Fatalities Based on operator actions before the violation occurred: After the operator found the non—compliance, the operator took documented action to address the —$25,920 cause of the non—compliance, and corrected the non— compliance before PHMSA learned of the violation. Does not apply for operator Post—accident actions. Culpability After the operator found the non—compliance, the operator took documented action to address the cause of the non—compliance, and was in the process of correcting the non—compliance before PHMSA learned of the violation. Does not apply for operator Post—accident actions. The operator took significant steps to comply with a requirement but failed to achieve compliance for reasons such as unforeseeable events/conditions that were partly or wholly outside its control. Culpability The operator took significant steps to comply with a (cont‘d) requirement but did not achieve compliance. The operator failed to take appropriate action to comply with a requirement that was clearly applicable. The operator made a conscious decision not to comply with a requirement that was clearly applicable. The operator took egregious action (such as ¥ manipulation of records or reconfiguration of $2,056,320 equipment) that evidenced an effort to evade compliance or conceal non—compliance. Prior findings of violation include a civil penalty or $0 History of Prior Offenses compliance order in the five years that precede the date of the Notice. The prior findings of violation may be the same, similar, or different violations. L $17,280 Based on operator actions before the violation occurred:

Federal Register / Vol. 81, No. 200 / Monday, October 17, 2016 / Notices 71569 The total civil penalty per violation is For an administrative civil penalty Issued in Washington, DC, on October 11, calculated based on these assessment that occurs on or after August 1, 2016, 2016, under authority delegated in 49 CFR considerations and adjusted for the the maximum civil penalty limit was 1.97. applicable daily and series limit. If a increased to $205,638 per day and Linda Daugherty, calculated penalty exceeds the $2,056,380 for a related series of Deputy Associate Administrator for Field maximum amount permitted by statute, violations pursuant to the requirements Operations. the penalty will be reduced by the of Section 701 of the ‘‘Federal Civil [FR Doc. 2016–25000 Filed 10–14–16; 8:45 am] amount exceeding the cap. An Penalties Inflation Adjustment Act BILLING CODE 4910–60–C administrative civil penalty under 49 Improvements Act of 2015’’ (Pub. L. jstallworth on DSK7TPTVN1PROD with NOTICES U.S.C. 60122(a)(1) is capped at $200,000 114–72), which amended the ‘‘Federal per day for violations occurring after Civil Penalties Inflation Adjustment Act January 3, 2012. The maximum civil of 1990’’ (Pub. L. 101–410) (Inflation penalty for a related series of violations Adjustment Act). is $2,000,000 for violations occurring after January 3, 2012. EN17OC16.002</GPH> VerDate Sep<11>2014 14:22 Oct 14, 2016 Jkt 241001 PO 00000 Frm 00095 Fmt 4703 Sfmt 9990 E:\FR\FM\17OCN1.SGM 17OCN1


Document Created: 2016-10-15 01:52:02
Document Modified: 2016-10-15 01:52:02
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice.
DatesA respondent in an enforcement case may request the proposed civil penalty calculation associated with its case, effective October 17, 2016. In addition, the civil penalty summary attached to this policy statement is now available on PHMSA's Web site.
ContactRod Dyck, Enforcement Director, [email protected], 202-366-3844.
FR Citation81 FR 71566 
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