[Federal Register Volume 78, Number 191 (Wednesday, October 2, 2013)]
[Rules and Regulations]
[Pages 60726-60745]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23887]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 107

[Docket No. PHMSA-2013-0045 (HM-258C)]
RIN 2137-AF02


Hazardous Materials Regulations: Penalty Guidelines

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

ACTION: Final rule; revised statement of policy.

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SUMMARY: The Pipeline and Hazardous Materials Safety Administration 
(PHMSA) is publishing this revised statement of policy to update 
baseline assessments for frequently-cited violations of the Hazardous 
Materials Regulations (HMR) and to clarify additional factors that 
affect penalty amounts. This revised statement of policy is intended to 
provide the regulated community and the general public with information 
on the hazardous materials penalty assessment process.

DATES: This rule is effective October 1, 2013.

FOR FURTHER INFORMATION CONTACT: Meridith L. Kelsch or Shawn Wolsey, 
Office of the Chief Counsel, at (202) 366-4400, or Deborah L. Boothe, 
Standards and Rulemaking Branch, at (202) 366-8553, Pipeline and 
Hazardous Materials Safety Administration, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

Contents

I. Background
II. Discussion of Revisions
    A. Revisions to Part II, List of Frequently Cited Violations
    B. Revisions to Parts III and IV
III. Regulatory Analyses and Notices
    A. Statutory/Legal Authority for the Rulemaking
    B. Executive Order 13610, Executive Order 13563, Executive Order 
12866, and DOT Regulatory Policies and Procedures
    C. Executive Order 13132
    D. Executive Order 13175
    E. Regulatory Flexibility Act, Executive Order 13272, and DOT 
Procedures and Policies
    F. Paperwork Reduction Act
    G. Regulatory Identifier Number (RIN)
    H. Unfunded Mandates Reform Act of 1995
    I. Environmental Assessment
    J. Privacy Act
    K. Executive Order 13609 and International Trade Analysis
    L. National Technology Transfer and Advancement Act

I. Background

    The Pipeline and Hazardous Materials Safety Administration (PHMSA) 
publishes hazardous materials transportation enforcement civil penalty 
guidelines in Appendix A to 49 CFR part 107, subpart D. The Research 
and Special Programs Administration (RSPA; PHMSA's predecessor agency) 
first published these guidelines in the Federal Register on March 6, 
1995, in response to a request contained in Senate Report 103-150 that

[[Page 60727]]

accompanied the Department of Transportation and Related Agencies 
Appropriations Act of 1994 (See 60 FR 12139). RSPA and PHMSA published 
additional revisions of these guidelines on January 21, 1997 (62 FR 
2970), September 8, 2003 (68 FR 52844), February 17, 2006 (71 FR 8485), 
December 29, 2009 (74 FR 68701), and September 1, 2010 (75 FR 53593). 
These guidelines provide the regulated community and the general public 
with information about PHMSA's hazmat penalty assessment process and 
the types of information or documentation that respondents in 
enforcement cases can provide to justify possible reductions of 
proposed penalties.
    PHMSA's field operations personnel and attorneys use these 
guidelines, which are updated periodically, as a standard for 
determining civil penalties for violations of the Federal hazardous 
materials transportation law (49 U.S.C. 5101-5128) and the regulations 
issued under that law. The baseline penalties and aggravating or 
mitigating factors outlined in these guidelines are a tool to aid PHMSA 
in applying similar civil penalties and adjustments in comparable 
situations. These baselines and adjustment criteria are based on 
factors PHMSA is required, under 49 U.S.C. 5123(c) and 49 CFR 107.331, 
to consider in each case. PHMSA selected the baseline penalties set out 
in Part II by considering the relative nature, circumstances, extent, 
and gravity of the particular violation. The aggravating and mitigating 
factors discussed in Parts III and IV represent all information PHMSA 
is required to consider under these provisions.
    Since the guidelines are intended to reflect the statutory 
considerations, they are subject to adjustments, as appropriate, for 
the specific facts of individual cases. The guidelines are neither 
binding nor mandatory, but serve as a standard to promote consistency. 
Using the baselines as a starting point allows PHMSA to handle 
analogous violations similarly; and combining baselines with the 
mitigating and aggravating adjustments, helps us treat respondents in 
enforcement actions fairly. These baselines, however, only provide a 
starting point and may be adjusted as appropriate to reflect additional 
relevant factors. As such, they do not impose any requirement and are 
not binding.
    As a general statement of agency policy and practice, these 
guidelines are not finally determinative of any issues or rights and do 
not have the force of law. They are informational, impose no 
requirements, and serve only as instruction or a guide. As such, they 
constitute a statement of agency policy and serve to provide greater 
transparency for effected entities. For these reasons, they do not 
establish a rule or requirement and no notice of proposed rulemaking or 
comment period is necessary. For further discussion of the nature and 
PHMSA's use of these penalty guidelines, see the preambles to the final 
rules published on March 6, 1995 (60 FR 12139) and January 21, 1997 (62 
FR 2970).

II. Discussion of Revisions

    In this final rule, PHMSA is publishing an updated statement of 
policy, revising Appendix A to Part 107, Subpart D, including the List 
of Frequently Cited Violations in Part II of the guidelines, and Parts 
III and IV, which provide additional factors that affect penalty 
amounts. The revisions to Part II include modifications to individual 
baseline assessments, the addition of frequently-cited violations that 
were not previously included in the guidelines, and assigned penalties 
instead of penalty ranges, where appropriate, to reflect safety risks, 
such as packing group. The revisions to Parts III and IV of the 
guidelines clarify the criteria PHMSA considers when determining a 
civil penalty amount that appropriately reflects the risk posed by a 
violation, the culpability of the respondent, and aggravating or 
mitigating factors.

A. Revisions to Part II, List of Frequently Cited Violations

    The revisions to Part II of the guidelines are the result of 
inflation and statutory adjustments, as well as an overall review of 
the current penalty guidelines and regulatory requirements. PHMSA 
evaluated the baseline penalties to ensure they are comprehensive, 
clear, consistent, and appropriately reflect the safety implications of 
the violations.
    As part of these adjustments, in this revised statement of policy, 
PHMSA is modifying the baselines in the List of Frequently Cited 
Violations in Part II of the guidelines to reflect inflation and the 
statutory increase in the maximum civil penalty, which took effect 
October 1, 2012. Both of these factors necessitate an overall increase 
in the baseline penalties.
    Section 33010 of the Hazardous Materials Transportation Safety 
Improvement Act of 2012 (Title III of the Moving Ahead for Progress in 
the 21st Century Act (``MAP-21,''), Pub. L. 112-141, 126 Stat. 405, 837 
(codified as amended at 49 U.S.C. 5123(a)) increased the maximum civil 
penalty for a knowing violation of the Federal hazardous materials 
transportation law, or a regulation, order, special permit, or approval 
issued under that law, from $55,000 to $75,000 and increased the 
maximum civil penalty from $110,000 to $175,000 if the violation 
results in death, serious illness or severe injury to any person or 
substantial destruction of property. This statutory change took effect 
October 1, 2012, and PHMSA incorporated these changes into the 
regulations effective April 17, 2013 (78 FR 22798). Since the maximum 
civil penalties have increased, it is appropriate to also increase the 
individual baselines for consistency.
    Additionally, PHMSA is increasing individual baselines for 
inflation because many of the current baselines have not been adjusted 
since they were first published. Specifically, RSPA initially published 
the guidelines in 1995 (60 FR 12139). In 1997, RSPA adjusted the 
maximum civil penalty for inflation, added, deleted and combined 
several baselines, and altered several baselines to reflect the 
comparative risks of the violation for different hazardous materials. 
Again in 2003, RSPA adjusted the maximum and minimum civil penalties 
for inflation and added, modified, and increased several specific 
baselines (68 FR 52844). In 2006, PHMSA adjusted the maximum and 
minimum civil penalties, adopting the limits established by Congress in 
2005 in the Safe, Accountable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users (SAFETEA-LU; Pub. L. 109-59, 119 Stat. 
1144 (codified as amended at 49 U.S.C. 5123(a))). At the same time, 
PHMSA adjusted a small number of individual baselines (71 FR 8485). 
Again in 2009, PHMSA adjusted the maximum and minimum civil penalties 
for inflation (74 FR 68701). The 2010 adjustments merely corrected 
errors in the 2009 calculations (75 FR 53593). Notably, since the 
guidelines were first published in 1995, certain individual baselines 
were adjusted but never comprehensively adjusted for inflation.
    In order to remain consistent with the MAP-21 increase to the 
maximum civil penalties, as well as make appropriate adjustments for 
inflation, PHMSA reviewed the entire list of baseline penalties and 
generally increased them. We are not increasing all of the baselines, 
however, as we considered each individually to ensure the baselines 
appropriately reflect the safety implications associated with the 
particular violation.
    For those baselines that PHMSA is increasing for inflation and 
consistency with MAP-21, we used a uniform calculation to determine the 
amount of increase. PHMSA determined the

[[Page 60728]]

inflation adjustment by using the calculation found in the Federal 
Civil Penalties Inflation Adjustment Act of 1990 (the Act), as amended 
by the Debt Collection Improvement Act of 1996 (the Act is set forth in 
the note to 28 U.S.C. 2461). The Act requires each Federal agency to 
adjust maximum and minimum civil penalties it administers at least 
every four years, to correspond with the effects of inflation, but 
applies a maximum increase of 10 percent for first-time adjustments. 
Congress, effective October 1, 2012 (see MAP-21 discussion above) 
adjusted the maximum and minimum penalties for inflation; so PHMSA is 
increasing only individual baselines.
    Because this revised statement of policy does not address inflation 
adjustments for maximum and minimum penalties, the adjustments are not 
mandated, and the formula provided in the Act is not binding on these 
revisions. Nevertheless, PHMSA applied the formula in the Act to 
calculate the baseline increases, for consistency and continuity, as 
the Act is a standard recognized method of calculating inflation 
adjustments for regulatory penalties.
    The formula for inflation adjustments set out in the Act provides 
that the increase is based on a ``cost-of-living adjustment'' 
determined by the increase in the Consumer Price Index (CPI-U) for the 
month of June of the calendar year preceding the adjustment as compared 
to the CPI-U for the month of June of the calendar year in which the 
last adjustment was made. In applying this calculation, PHMSA used 2003 
as the year in which the last adjustment was made. This is because 2003 
is the last time there were numerous adjustments and those revisions 
were the most similar to the current changes, in that there were 
extensive adjustments to individual baselines and not just maximum and 
minimum civil penalties. Since this revised statement of policy is 
adjusting individual baselines, 2003 represents the most-recent 
instance of comparable adjustments.
    Applying the adjustment formula in the Act, PHMSA calculated the 
percentage by which the CPI-U in June 2012 (229.478) (the year 
preceding the adjustment) exceeds the CPI-U in June 2003 (183.7) (the 
year in which the baseline penalties were last adjusted). This 
comparison shows that the CPI-U increased by 25 percent during that 
period. Accordingly, PHMSA is increasing the baseline civil penalties 
by 25 percent. To avoid increasing any penalties by more than 25 
percent, PHMSA rounded down the calculated adjustments to the nearest 
one-hundred dollars.
    Although the Act provides a 10 percent limit on first-time 
adjustments, PHMSA is not conforming to this limitation for several 
reasons. First, many individual baselines have been adjusted before, so 
this is not a first-time adjustment. We are applying the same 
calculated inflation adjustment to all of the individual baselines that 
we are increasing for uniformity. To apply the 25 percent increase to 
those baselines that have been changed before, and 10 percent to those 
that have not, would create inconsistencies by creating larger 
differences between baselines that have been deemed comparatively 
appropriate in all prior revisions. Second, PHMSA is not required to 
comply with the 10 percent limit in these adjustments because the 
adjustments in this updated statement of policy are not mandated under 
the Act, as the Act does not apply to adjustments to individual 
baselines. Rather, we are merely using the Act as a uniform and 
recognized standard for consistency. Finally, the changes in MAP-21 
increased the maximum civil penalty by approximately 36 percent (from 
$55,000 to $75,000) for a knowing violation and 59 percent (from 
$110,000 to $175,000) for violations resulting in serious harms. By 
comparison, a 25 percent increase to individual baseline penalties is 
significantly lower than the changes to the maximum civil penalties 
imposed by MAP-21.
    Another change in this revised statement of policy is to add 
baseline penalties with violation descriptions to provide consistency 
and clarity for imposing similar penalties in similar cases. To 
identify violations that have been cited frequently but were not listed 
in the table of baseline penalties, PHMSA reviewed past Notices of 
Probable Violations and the regulations. We are now listing baseline 
penalties with violation descriptions in the List of Frequently Cited 
Violations for these violations. We are establishing these baseline 
penalties based on civil penalties that have been applied in past 
enforcement cases and by analogy to baselines for comparable violations 
that are already listed and relative safety implications.
    In general, we are expanding the following categories in the List 
of Frequently Cited Violations: Security plans; Special permits and 
approvals; Undeclared shipments; Shipping papers; Emergency response 
requirements; Package marking requirements; Package labeling 
requirements; Placarding requirements; Packaging requirements; Offeror 
Requirements for specific hazardous materials: Cigarette lighters, 
Explosives, Radioactive Materials, Compressed Gases in cylinders; 
Packaging Manufacturers, Drum Manufacturers and Reconditioners, IBC and 
Portable Tank Requalification; Cylinder Manufacturers and Rebuilders; 
Cylinder Requalification; Incident Notification and Stowage/Attendance/
Transportation Requirements. We are adding these new categories: 
Offeror Requirements for specific hazardous materials: Oxygen 
Generators and Batteries; Manufacturing, Reconditioning, Retesting 
Requirements: Activities subject to Approvals and Cargo Tank Motor 
Vehicles.
    Another modification PHMSA is making in this revised statement of 
policy is to eliminate many baseline ranges (e.g., $3,000 to $6,000) in 
the List of Frequently Cited Violations, and replace them with specific 
baselines (e.g., $6,000 for PG I; $4,500 for PG II; $3,000 for PG III). 
Baseline ranges provided flexibility to adjust penalties depending on 
the safety risks or severity of a particular case. We will now divide 
many ranges into distinct baseline amounts that reflect the relative 
risks of specific packing groups, explosive classifications, or 
hazardous materials. Applying specific baselines instead of ranges will 
continue to reflect the relative safety risks of various hazardous 
materials within a particular violation, while assuring consistency and 
clarity.
    Finally, PHMSA comprehensively reviewed the baseline penalties and 
descriptions, and we are adopting several modifications to ensure they 
are current, consistent, and appropriate. In this revised statement of 
policy, we are removing outdated or duplicative descriptions and 
updating language to reflect the regulatory text, where necessary. We 
are also decreasing and increasing baselines, as appropriate, to ensure 
comparable, similar, or related violations have commensurate baseline 
penalties and that each baseline reflects the risks associated with the 
violation.

B. Revisions to Part III--Consideration of Statutory Criteria and Part 
IV--Miscellaneous Factors Affecting Penalty Amounts

    This statement of policy also modifies Parts III and IV of the 
guidelines, which provide factors that affect penalty amounts. As 
specified in 49 U.S.C. 5123(c) and 49 CFR 107.331, PHMSA must consider 
several factors when assessing a civil penalty, including the nature, 
circumstances, extent and gravity of a violation, the degree of 
culpability and compliance history of the respondent, the financial 
impact of

[[Page 60729]]

the penalty on the respondent, and other matters as justice requires. 
As described below, PHMSA will also consider a respondent's corrective 
actions and that point in time at which those actions are taken. Parts 
III and IV elaborate on several of these factors and explain how PHMSA 
considers this information to adjust penalties, where appropriate.
    In this revision, PHMSA is clarifying Parts III and IV to provide 
transparency and ensure consistency in how mitigating and aggravating 
factors affect penalty assessments. In general, we are modifying some 
of the language in these Parts to articulate clearly how PHMSA 
considers relevant information and performs adjustments. We are also 
adding new points that will enhance transparency and consistency.
1. Revisions to Part III--Consideration of Statutory Criteria
    Previously, Part III--Consideration of Statutory Criteria has 
outlined the process PHMSA uses for setting initial penalties and 
listed the statutory criteria PHMSA must consider under 49 U.S.C. 
5123(c) and 49 CFR 107.331. In this revision, we are providing this 
same information as well as additional details.
    In the revised guidelines, we are still identifying the statutory 
considerations, but have revised the language to add greater clarity. 
Specifically, we have added details to elaborate on the information 
that may be relevant in considering the statutory criteria. For 
example, in evaluating the gravity of a violation, we explain that 
actual and potential consequences of a violation are factors we 
consider in setting a civil penalty in a case. We are including this 
and similar factors to help demonstrate the types of information that 
are pertinent to the statutory criteria.
    We are also explaining where we obtain the information that is 
relevant to the statutory criteria and at what stages we collect it. 
Specifically, we may obtain information concerning the statutory 
criteria at any stage of the enforcement proceedings, and we may 
receive this information from any appropriate source, including the 
regulated entity. This additional information serves to clarify that 
determining a civil penalty is an ongoing process that develops 
throughout an enforcement proceeding. As such, this clarification 
notifies respondents in enforcement cases that they may provide 
relevant information to PHMSA at any stage and we will consider it.
    Finally, we are providing a specific order in which PHMSA will 
apply increases and decreases to baseline penalty amounts. While the 
previous guidelines alluded to this, we are establishing a clear 
sequence of adjustments in this revision. Specifically, after selecting 
an appropriate baseline penalty, we will generally apply decreases for 
reshippers, increases for multiple counts, increases for prior 
violations, decreases for corrective actions, and then decreases for 
financial considerations, in order to consider all of the statutory 
criteria. Clearly establishing this sequence will provide for 
consistency in how respondents are treated in enforcement actions.
2. Revisions to Part IV--Miscellaneous Factors Affecting Penalty 
Amounts
    In the revised guidelines, we are also modifying the language in 
Part IV--Miscellaneous Factors Affecting Penalty Amounts. These 
modifications provide greater clarity and transparency by revising 
language, including more detail, and setting out more-clearly defined 
procedures for applying aggravating and mitigating factors. We are also 
restructuring this section so that the factors are listed in the order 
in which PHMSA applies the penalty increases or decreases, as set out 
in Part III.
    With respect to respondents that act as reshippers, we have revised 
the language in this section so that our procedures and relevant 
criteria are understandable. Additionally, we have extended the 
reshipper mitigating factor to carriers who reasonably rely on a 
shipment as they receive it and do not open or alter the package before 
continuing in transportation. We expanded this to carriers to reflect 
their similarity to reshippers in so far as both may receive fully-
prepared shipments and rely on another party's preparation and 
compliance. Apart from extending this provision to carriers, we have 
not made any substantive changes to this section.
    We are also modifying the provisions regarding multiple counts of a 
violation. The revised language provides more detail in describing how 
PHMSA handles multiple counts, which promotes greater consistency and 
transparency. Although this is a highly fact-specific determination, 
the additional language will provide more comprehensive guidance. For 
example, we are including fuller explanations of the factors that are 
relevant, such as whether multiple counts demonstrate a company's 
regular business practice. Additionally, we are including specific 
examples of when multiple counts may be treated as one violation, when 
a penalty may be increased by 25 percent for each additional count, and 
when separate counts may be warranted.
    The provisions pertaining to prior violations are also being 
updated to establish a clear timeframe and consistent application. We 
are specifying that the six-year period used to evaluate increases for 
prior violations will be determined using the dates of the last exit 
briefings issued. Previously, this period was calculated using the date 
a case or ticket was ``initiated,'' without specifying what constituted 
initiation of a case. We are now specifying that the initiation date of 
a case is the date of the exit briefing. The date of the exit briefing 
best represents the date a case is initiated because it is the date a 
respondent first receives notice of a non-compliance issue and 
commences the enforcement process. Additionally, the date of the exit 
briefing is the most consistent measure that can be replicated for all 
cases.
    Generally, an exit briefing is issued on or near the date a 
violation is found, whereas a ticket or Notice of Probable Violation 
may be issued substantially later and are not issued within the same 
time frame for all cases. Using a calendar year instead of a specific 
date can lead to some respondents being penalized for prior cases that 
happened more than six years previously (e.g., a prior violation in 
January 2007 would be within six years of a case issued in September 
2013), while others are penalized for only less than a six-year period 
(e.g., a prior violation in December 2006 would be outside the six 
years for a case issued in January 2013). To avoid these disparities, 
PHMSA is applying the date of the exit briefing as the date a case is 
``initiated.'' Although PHMSA is using the exit briefing to represent 
the initiation of a case, only cases that have been finally-adjudicated 
will be considered as prior violations. As such, the issuance of an 
exit briefing alone, with no further action does not constitute a prior 
violation.
    In addition, we are including a specific provision for the use of 
expired special permits that was previously included in a separate 
section. Under this provision, if a respondent is cited for operating 
under an expired special permit and has previously committed the same 
violation, the penalty will be doubled (i.e., increased by 100 
percent). This is the same as the previous language, we are simply 
relocating it so that all of the factors relating to prior violations 
are discussed together.
    We are also adding one factor that PHMSA will consider in 
determining penalty increases for prior violations. If PHMSA finds that 
a respondent has

[[Page 60730]]

been cited for an identical violation within the six-year period 
specified above, we will generally increase the penalty for that 
violation by 100 percent. The rationale for this is that the respondent 
was previously notified of the violation and had the opportunity to 
correct it; failing to correct an issue and committing the exact same 
violation demonstrates a disregard for compliance and justifies an 
additional increase to the penalty.
    With respect to corrective action, the revised guidelines provide 
additional details regarding how PHMSA determines reductions for 
corrective action. These revisions supplement, but do not change, the 
existing standard. Notably, we are including further explanations of 
the primary factors--extent and timing. We are also adding guidance for 
how respondents may document their corrective actions. Additionally, we 
are setting out standards that describe the factors we consider in 
determining whether to reduce a civil penalty for corrective action, up 
to 25 percent. Finally, we are incorporating a new provision that 
respondents who have committed the same violation previously (as 
determined in a finally-adjudicated case) may not receive a reduction 
for corrective action because corrective action is warranted when a 
respondent in an enforcement case makes sincere, comprehensive, and 
effective efforts to remedy a violation. Therefore, if the company was 
previously notified of the non-compliance issue and failed to fix it, a 
corrective action reduction is not appropriate.
    We are also revising the provisions for penalty reductions for 
financial considerations in the guidelines; however, we are not making 
any substantive changes to this section. We have merely modified and 
restructured the language, without changing the meaning.
    Finally, we are removing the section regarding penalty increases 
for using an expired special permit. Previously, this section included 
two provisions: (1) That a prior violation warrants an increase of 25 
percent, and (2) that when a respondent uses an expired special permit 
and has previously committed the same violation, an increase of 100 
percent is appropriate. The first provision is adequately expressed in 
the section on prior violations (i.e., 25 percent increase for a prior 
violation). And the second provision is now moved to the section on 
prior violations as well, in order to keep all increases for prior 
violations in the same section for organizational purposes.
    Although these revisions to the guidelines are intended to provide 
consistency and clarity, the baseline assessments are only the starting 
point for assessing a penalty for a violation. Because no two cases are 
identical, rigid use of the guidelines would produce arbitrary results 
and, most significantly, would ignore the statutory mandate to consider 
specific assessment criteria set forth in 49 U.S.C. 5123 and 49 CFR 
107.331, including consideration of small businesses. Therefore, PHMSA 
will continue to review all relevant information in the record 
concerning any alleged violation or the respondent, and we will adjust 
the baseline assessments as warranted by the statutory criteria.
    These penalty guidelines remain subject to revision and PHMSA will 
use the version of the guidelines in effect at the time the violation 
in any particular case is committed. Questions concerning PHMSA's 
penalty guidelines and any comments or suggested revisions may be 
addressed to the persons identified above, in FOR FURTHER INFORMATION 
CONTACT.

III. 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. 5101-5128). 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 
PHMSA's guidelines for determining civil penalties, which are published 
in Appendix A to subpart D of part 107, including the List of 
Frequently Cited Violations in Part II, as well as Part III 
Consideration of Statutory Criteria and Part IV Miscellaneous Factors 
Affecting Penalty Amounts, which provide additional factors and 
criteria that affect penalty amounts.
    Revisions to Part II include modifications to individual baseline 
assessments, the addition of frequently-cited violations not previously 
included in the guidelines, and the replacement of penalty ranges with 
assigned penalties based on safety risks, such as packing group, where 
appropriate. The revisions to Parts III and IV of the guidelines 
clarify the criteria PHMSA considers when determining a civil penalty 
amount that appropriately reflects the risk posed by a violation, the 
culpability of the respondent, and any aggravating or mitigating 
factors. More specifically, we are establishing a sequence in which 
aggravating and mitigating factors are applied, identifying the period 
within which prior violations are considered, specifying that the 
repeating of identical violations in multiple cases serves as an 
aggravating factor, and clarifying the process by which PHMSA considers 
mitigation for corrective actions, reshippers, and financial 
considerations as well as penalty increases for multiple counts and 
prior violations.
    Under 49 U.S.C. 5123(c), when determining a civil penalty amount, 
PHMSA must consider the nature, circumstances, extent, and gravity of 
the violation, the degree of culpability, history of compliance, 
ability to pay, and effect on ability to continue to do business for 
the specific respondent, as well as other matters that justice 
requires. As such, the baseline penalties in the List of Frequently 
Cited Violations and the additional factors in Parts III and IV are 
merely guidelines that are subject to adjustments for the unique facts 
and circumstances of each case. They do not establish or impose any 
requirements, are not finally-determinative of any issues or rights, 
are not binding, and do not have the force of law. Rather, they are 
guidelines PHMSA uses as a starting point in determining a civil 
penalty and a guide outlining relevant factors we consider. Since they 
are merely informational guidelines stating general agency policy and 
practice, no notice of proposed rulemaking is necessary.

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

    This rulemaking is not considered a significant regulatory action 
under Executive Order 12866 and the Regulatory Policies and Procedures 
of the Department of Transportation (44 FR 11034). 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 has 
minimal impact on a significant number of small businesses.
    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 identify and consider regulatory 
approaches that reduce burdens and maintain flexibility and consider 
how to best promote

[[Page 60731]]

retrospective analysis to modify, streamline, expand, or repeal 
existing rules that are outmoded, ineffective, insufficient, or 
excessively burdensome. The revisions to Appendix A to Subpart D of 
Part 107 are consistent with the intent of Executive Order 13563 as 
this final rule clarifies the civil penalties process, fosters a 
greater understanding of the regulations and associated penalties for 
non-compliance and updates the regulations to more-accurately reflect 
current economic conditions.
    Executive Order 13610 (Identifying and Reducing Regulatory Burdens) 
reaffirming the goals of Executive Order 13563 (Improving Regulation 
and Regulatory Review) issued January 18, 2011, and Executive Order 
12866 (Regulatory Planning and Review) issued September 30, 1993 
directs agencies to prioritize ``those initiatives that will produce 
significant quantifiable monetary savings or significant quantifiable 
reductions in paperwork burdens while protecting public health, 
welfare, safety, and our environment.'' Executive Order 13610 further 
instructs agencies to give consideration to the cumulative effects of 
their regulations, including cumulative burdens, and prioritize reforms 
that will significantly reduce burdens.
    This final rule 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.
    A summary of the regulatory evaluation used to support the 
proposals presented in this final rule are discussed below. A copy of 
the full regulatory evaluation explaining the rationale behind PHMSA's 
conclusions is available in the docket for this rulemaking.
Regulatory Evaluation
    For the regulatory evaluation of this final rule, PHMSA assumes:
     The cost associated with this rulemaking will be imposed 
on those individuals who are in violation of the requirements of the 
HMR.
     Updating the guidelines and expanding the list of 
frequently cited violations will raise awareness of the regulatory 
requirements and provide a safety benefit.
     PHMSA is raising the baseline penalties for consistency 
with MAP-21 and to reflect inflation based on the calculation found in 
the Federal Civil Penalties Inflation Adjustment Act of 1990 (the Act), 
as amended by the Debt Collection Improvement Act of 1996 (the Act is 
set forth in the note to 28 U.S.C. 2461).
    PHMSA's current civil penalties program has proven effective in 
achieving a high level of transportation safety. However, the lack of 
fee increases to keep pace with inflation may have limited the 
capability to deter potential violators from knowingly violating the 
HMR. While this final rule maintains the current level of safety, we 
expect the implementation of the changes published in this final rule 
will result in a benefit by providing a more substantial deterrent for 
potential violators of the HMR.
    PHMSA anticipates the primary costs will be to those who violate 
the HMR while the primary benefits will be attributed to an increased 
awareness of regulatory requirements, an improved understanding of the 
civil penalties process, and a more substantial deterrent for those who 
violate the HMR.

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; it is merely an updated informational 
statement of policy and guidance and does not impose any requirements. 
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 tribal implications and does not impose substantial 
direct compliance costs on Indian tribal governments, and does not 
preempt tribal law, 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 et seq.) requires an 
agency to review regulations to assess the impact on small entities 
unless the agency determines a rule is not expected to have a 
significant impact on a substantial number of small entities. If an 
agency finds that there is a significant impact, the agency must 
consider whether alternative approaches could mitigate the impact on 
small entities. The size criteria for small entities are defined by the 
Small Business Administration (SBA) in 13 CFR 121.201.
    The hazardous materials regulated community consists of 
approximately 200,000 offerors. Approximately 90 percent meet the SBA 
small business criteria. However, we have determined that, based on the 
following analysis, the changes adopted in the final rule will not 
result in a significant impact. Based on our review of PHMSA hazardous 
materials penalties levied in the last calendar year (January 1, 2012-
December 31, 2012), PHMSA issued 616 cases and tickets. If we used the 
assumption that 90 percent of the hazardous materials regulated 
community meet the SBA small business criteria than this final rule 
would only affect approximately 550 small entities. Therefore, PHMSA 
certifies this rule would not have a significant economic impact on a 
substantial number of small entities.

F. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995, no person is required to 
respond to an information collection unless it has been approved by OMB 
and displays a valid OMB control number. Section 1320.8(d) of Title 5 
of the Code of Federal Regulations requires that PHMSA provide 
interested members of the public and affected agencies an opportunity 
to comment on information and recordkeeping requests. 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

[[Page 60732]]

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. Sec. Sec.  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, 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.
Description of Action
    In this final rule we are revising 49 CFR Appendix A to Subpart D 
of Part 107 (Enforcement) Part II by:
     Modifying individual baseline assessments contained in the 
penalty guidelines table;
     Adding violations not previously included in the list of 
frequently-cited violations; and
     Replacing penalty ranges with assigned penalties based on 
safety risks, such as packing group, where appropriate.
    In addition in this final rule we are revising 49 CFR Appendix A to 
Subpart D of Part 107, Part III--Consideration of Statutory Criteria 
and Part IV--Miscellaneous Factors Affecting Penalty Amounts by:
     Establishing a penalty amount that appropriately addresses 
the risk posed by a violation; and
     Establishing the criteria and PHMSA's process for 
considering the statutorily-mandated aggravating or mitigating factors 
involved in determining a civil penalty.
Alternatives Considered
    Alternative (1)--No action alternative: Leave the HMR as is; do not 
adopt above-described guidelines.
    PHMSA periodically reviews and updates various regulations and 
guidelines to improve the clarity of the HMR and provide relief for 
safe alternatives when necessary. If PHMSA chose the no-action 
alternative, the public would not receive the benefits of increased 
awareness of the civil penalties and the processes that accompany them. 
Furthermore, PHMSA civil penalties would continue to be out of date and 
not reflective of current economic conditions. Therefore, PHMSA 
rejected the do-nothing alternative.
    Alternative (2)--Preferred Alternative: Go forward with the 
modified guidelines as described in this notice.
Environmental Consequences
    Under the HMR, hazardous materials are transported by aircraft, 
vessel, rail, and highway. The potential for environmental damage or 
contamination exists when packages of hazardous materials are involved 
in accidents or en route incidents resulting from cargo shifts, valve 
failures, package failures, loading, unloading, collisions, handling 
problems, or deliberate sabotage. The release of hazardous materials 
can cause human death or injury, the loss of ecological resources (e.g. 
wildlife habitats), and the contamination of air, aquatic environments, 
and soil. Contamination of soil can lead to the contamination of ground 
water. Compliance with the HMR substantially reduces the possibility of 
accidental release of hazardous materials.
    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. As the civil penalty program is 
specifically designed to ensure compliance with the HMR it concurrently 
reduces the possibility of accidental release of hazardous materials 
and thus environmental damage.
Conclusion
    Based on the above discussion, the amendments in this final rule 
would have no significant negative environmental impacts. Civil 
penalties may act as a deterrent to those violating the HMR, which may 
have a negligible positive environmental impact as a result of 
increased compliance with the HMR. PHMSA concludes there are no 
significant environmental impacts associated with this final rule.

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.dot.gov/privacy.

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

[[Page 60733]]

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.

L. National Technology Transfer and Advancement Act

    The National Technology Transfer and Advancement Act of 1995 (15 
U.S.C. 272 note) directs federal agencies to use voluntary consensus 
standards in their regulatory activities unless doing so would be 
inconsistent with applicable law or otherwise impractical. Voluntary 
consensus standards are technical standards (e.g., specification of 
materials, test methods, or performance requirements) that are 
developed or adopted by voluntary consensus standard bodies. There are 
no voluntary consensus standards relevant to the penalty guidelines, 
and as such, the revised guidelines do not include any.

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

List of Subjects in 49 CFR Part 107

    Administrative practices and procedure, Hazardous materials 
transportation, Packaging and containers, Penalties, 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; Pub. L. 112-141 section 33006 33010; 49 
C.F.R. 1.81, 1.97.


0
2. Revise Appendix A to Subpart D of Part 107 to read as follows:

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

    I. This appendix sets forth the guidelines PHMSA uses (as of 
October 2, 2013) in making initial baseline determinations for civil 
penalties. The first part of these guidelines is a list of baseline 
amounts or ranges for frequently-cited probable violations. 
Following the list of violations are general guidelines PHMSA uses 
in making penalty determinations in enforcement cases.

II. List of Frequently Cited Violations

------------------------------------------------------------------------
                                                           Baseline
      Violation description         Section or cite       assessment
------------------------------------------------------------------------
                          General Requirements
------------------------------------------------------------------------
A. Registration Requirements:     107.608, 107.612.
 Failure to register as an
 offeror or carrier of hazardous
 material and pay registration
 fee:
    1. Small business or not-for- ..................  $1,200 + $600 each
     profit.                                           additional year.
    2. All others...............  ..................  $3,500 + $1,000
                                                       each additional
                                                       year.
B. Training Requirements:
    1. Failure to provide         172.702.
     initial training to hazmat
     employees (general
     awareness, function-
     specific, safety, and
     security awareness
     training):
        a. More than 10 hazmat    ..................  $1,500 for each
         employees.                                    area.
        b. 10 hazmat employees    ..................  $1,000 for each
         or fewer.                                     area.
    2. Failure to provide         172.702...........  $1,000 for each
     recurrent training to                             area.
     hazmat employees (general
     awareness, function-
     specific, safety, and
     security awareness
     training).
    3. Failure to provide in-     172.702...........  Included in
     depth security training                           penalty for no
     when a security plan is                           security plan.
     required but has not been
     developed.
    4. Failure to provide in-     172.702...........  $3,100.
     depth security training
     when a security plan is
     required and has been
     developed.
    5. Failure to create and      172.704.
     maintain training records:.
        a. More than 10 hazmat    ..................  $1,000.
         employees.
        b. 10 hazmat employees    ..................  $600.
         or fewer.
C. Security Plans:
    1. Failure to develop a       172.800...........
     security plan; failure to
     adhere to security plan:
        a. Section 172.504 Table  ..................  $9,300.
         1 materials.
        b. Packing Group I......  ..................  $7,500.
        c. Packing Group II.....  ..................  $5,600.
        d. Packing Group III....  ..................  $3,700.
    2. Incomplete security plan   ..................  One-quarter (25
     or incomplete adherence                           percent) of above
     (one or more of four                              for each element.
     required elements missing).
    3. Failure to update a        172.802(b)........  One-third (33
     security plan to reflect                          percent) of
     changing circumstances.                           baseline for no
                                                       plan.
    4. Failure to put security    172.800(b)........  One-third (33
     plan in writing; failure to                       percent) of
     make all copies identical.                        baseline for no
                                                       plan.
D. Notification to a Foreign      171.22(f).
 Shipper: Failure to provide a
 foreign offeror or forwarding
 agent written information of
 HMR requirements applicable to
 a shipment of hazardous
 materials within the United
 States, at the place of entry
 into the United States:
    1. Packing Group I and Sec.   ..................  $9,300 .*
      172.504 Table 1 materials.
    2. Packing Group II.........  ..................  $5,500 .*
    3. Packing Group III........  ..................  $1,800 .*
------------------------------------------------------------------------
 * The baseline applied to the importer shall be equal to or less than
 the baseline applied to the foreign offeror or forwarding agent.
------------------------------------------------------------------------


[[Page 60734]]


------------------------------------------------------------------------
                                                           Baseline
      Violation description         Section or cite       assessment
------------------------------------------------------------------------
E. Special Permits and
 Approvals:
    1. Offering or transporting   171.2.
     a hazardous material, or
     otherwise performing a
     function covered by a
     special permit or approval,
     without authorization:
        a. After the special      ..................  $1,200 + $600 for
         permit or approval has                        each additional
         expired.                                      year.
        b. After the special      ..................  $5,000 to $25,000.
         permit or approval has
         been terminated.
    2. Failure to comply with a   171.2.
     provision of a special
     permit or approval (when no
     other baseline is
     applicable):
        a. That relates to        ..................  $4,000 and up.
         safety.
        b. That does not relate   ..................  $500 and up.
         to safety.
    3. Failure to maintain a      Special Permit....  $1,000.
     copy of the special permit
     in the transport vehicle or
     facility, when required by
     the terms of the special
     permit.
    4. Use an approval or         Approval, Various.  $9,000.
     approval symbol issued to
     another person.
------------------------------------------------------------------------
              Offeror Requirements--All hazardous materials
------------------------------------------------------------------------
A. Undeclared Shipment:.........  172.200, 172.300,
                                   172.400, 172.500.
    1. Offering for
     transportation a hazardous
     material without shipping
     papers, package markings,
     labels, and placards (where
     required):
        a. Packing Group I and    ..................  $30,000 and up.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $20,000.
        c. Packing Group III....  ..................  $17,500.
        d. Consumer Commodity,    ..................  $5,000.
         ORM-D.
    2. Offering for
     transportation a hazardous
     material that is
     misclassified on the
     shipping paper, markings,
     labels, and placards
     (including improper
     treatment as consumer
     commodity, ORM-D):
        a. Packing Group I and    ..................  $20,000.
         Sec.   172.504 Table I
         materials.
        b. Packing Group II.....  ..................  $12,000.
        c. Packing Group III....  ..................  $8,000.
    3. Offering for
     transportation a forbidden
     hazardous material:
        a. Packing Group I and    ..................  $35,000.
         Sec.   172.504 Table I
         materials.
        b. Packing Group II.....  ..................  $25,000.
        c. Packing Group III....  ..................  $20,000.
    4. Offering for
     transportation a lithium
     battery, without shipping
     papers, package markings,
     labels, or placards (when
     required):
        a. For air transport....  ..................  $40,000.
        b. For ground transport.  ..................  $20,000.
B. Shipping Papers:
    1. Failure to provide a       172.201,
     shipping paper for a          177.817(a).
     shipment of hazardous
     materials or accepting
     hazardous materials for
     transportation without a
     shipping paper:
        a. Packing Group I and    ..................  $7,500.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $5,600.
        c. Packing Group III....  ..................  $3,700.
    2. Failure to follow one or   172.201(a)(1).....  $1,500.
     more of the three approved
     formats for listing
     hazardous materials and non-
     hazardous materials on a
     shipping paper.
    3. Failure to retain          172.201(e)........  $1,200.
     shipping papers as required.
    4. Failure to include a       172.202.
     proper shipping name in the
     shipping description or
     using an incorrect proper
     shipping name:
        a. Packing Group I and    ..................  $2,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $1,500.
        c. Packing Group III....  ..................  $1,000.
    5. Failure to include a       172.202.
     hazard class/division
     number in the shipping
     description:
        a. Packing Group I and    ..................  $2,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $1,500.
        c. Packing Group III....  ..................  $1,000.
    6. Failure to include an      172.202.
     identification number in
     the shipping description:
        a. Packing Group I and    ..................  $2,500.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $1,800.
        c. Packing Group III....  ..................  $1,200.
    7. Using an incorrect hazard  172.202.
     class:.
        a. That does not affect   ..................  $1,000.
         compatibility
         requirements.
        b. That affects
         compatibility
         requirements:
            i. Packing Group I    ..................  $7,500.
             and Sec.   172.504
             Table 1 materials.
            ii. Packing Group II  ..................  $5,600.
            iii. Packing Group    ..................  $3,700.
             III.

[[Page 60735]]

 
    8. Using an incorrect         172.202.
     identification number:.
        a. That does not change   ..................  $1,000.
         the response
         information.
        b. That changes response
         information:
            i. Packing Group I    ..................  $7,500.
             and Sec.   172.504
             Table 1 materials.
            ii. Packing Group II  ..................  $5,600.
            iii. Packing Group    ..................  $3,700.
             III.
    9. Failure to include the     172.202.
     Packing Group or using an
     incorrect Packing Group:
        a. Packing Group I and    ..................  $1,700.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II and   ..................  $1,300.
         III.
    10. Using a shipping          172.202...........  $1,000.
     description that includes
     additional unauthorized
     information (extra or
     incorrect words).
    11. Using a shipping          172.202...........  $600.
     description not in required
     sequence.
    12. Failure to include the    172.202...........  $600.
     total quantity of hazardous
     material covered by a
     shipping description
     (including net explosive
     mass).
    13. Failure to include any    172.203(a), (b),    $600.
     of the following on a         (c)(2), (k), (l).
     shipping paper, as
     required: Special permit
     number; ``Limited Quantity
     or ``Ltd Qty;'' ``RQ'' for
     a hazardous substance;
     technical name in
     parentheses for a listed
     generic or ``n.o.s.''
     material; or marine
     pollutant.
    14. Failure to indicate       172.203(m)........  $2,500.
     poison inhalation hazard on
     a shipping paper.
    15. Failure to include or     172.204...........  $1,000.
     sign the required shipper's
     certification on a shipping
     paper.
C. Emergency Response
 Information Requirements:
    1. Providing incorrect        172.602.
     emergency response
     information with or on a
     shipping paper:
        a. No significant         ..................  $1,000.
         difference in response.
        b. Significant
         difference in response:
            i. Packing Group I    ..................  $7,500.
             and Sec.   172.504
             Table 1 materials.
            ii. Packing Group II  ..................  $5,600.
            iii. Packing Group    ..................  $3,700.
             III.
    2. Failure to include an      172.604...........  $3,200.
     emergency response
     telephone number on a
     shipping paper.
    3. Failure to have the        172.604...........  $1,600.
     emergency response
     telephone number monitored
     while a hazardous material
     is in transportation; or
     listing the number in a
     manner that it is not
     readily identifiable or
     cannot be found easily and
     quickly (e.g., multiple
     telephone numbers); or
     failing to include the
     name, contract number, or
     other unique identifier of
     the person registered with
     the emergency response
     provider.
    4. Listing an emergency       172.604...........  $3,200 to $5,200
     response telephone number
     on a shipping paper that
     causes emergency responders
     delay in obtaining
     emergency response
     information (e.g., listing
     a telephone number that not
     working, incorrect, or
     otherwise not capable of
     providing required
     information).
D. Package Marking Requirements:
    1. Failure to mark the        172.301(a).
     proper shipping name and
     identification number on a
     package:
        a. Packing Group I and    ..................  $6,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $4,500.
        c. Packing Group III....  ..................  $3,000.
    2. Marking a package with an  172.301(a).
     incorrect shipping name and
     identification number:
        a. That does not change
         the response
         information:
            i. Packing Group I    ..................  $3,700.
             and Sec.   172.504
             Table 1 materials.
            ii. Packing Group II  ..................  $2,700.
            iii. Packing Group    ..................  $2,200.
             III.
        b. That changes the
         response information:
            i. Packing Group I    ..................  $9,500.
             and Sec.   172.504
             Table 1 materials.
            ii. Packing Group II  ..................  $7,100.
            iii. Packing Group    ..................  $4,700.
             III.
    3. Failure to mark the        172.301(a).
     proper shipping name on a
     package or marking an
     incorrect shipping name on
     a package:
        a. Packing Group I and    ..................  $2,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $1,500.
        c. Packing Group III....  ..................  $1,000.
    4. Failure to mark the        172.301(a).
     identification number on a
     package:.
        a. Packing Group I and    ..................  $2,500.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $1,800.
        c. Packing Group III....  ..................  $1,200.
    5. Marking a package with an  172.301(a).
     incorrect identification
     number:.
        a. That does not change   ..................  $1,000.
         the response
         information.

[[Page 60736]]

 
        b. That changes the
         response information:
            i. Packing Group I    ..................  $7,500.
             and Sec.   172.504
             Table 1 materials.
            ii. Packing Group II  ..................  $5,600.
            iii. Packing Group    ..................  $3,700.
             III.
    6. Failure to include the     172.301(c)........  $600.
     required technical name(s)
     in parentheses for a listed
     generic or ``n.o.s.'' entry.
    7. Failure to mark ``non-     172.301(f)........  $2,000.
     odorized'' on a cylinder
     containing liquefied
     petroleum gas.
    8. Marking a package as       172.303(a)........  $1,000.
     containing hazardous
     material when it contains
     no hazardous material.
    9. Failure to locate          172.304(a)(4).....  $1,000.
     required markings away from
     other markings that could
     reduce their effectiveness.
    10. Failure to mark a         172.312.
     package containing liquid
     hazardous materials with
     required orientation
     markings:
        a. Packing Group I and    ..................  $4,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $3,500.
        c. Packing Group III....  ..................  $3,000.
    11. Failure to mark           172.313(a),         $4,000.
     ``Biohazard on an             172.323.
     infectious substance or
     ``Inhalation Hazard'' on a
     package containing a poison
     by inhalation hazard.
    12. Failure to apply limited  172.315,            $600.
     quantity marking or ``RQ''    172.324(b).
     marking on a non-bulk
     package containing a
     hazardous substance.
    13. Listing the technical     172.301(b)........  $1,600.
     name of a select agent
     hazardous material when it
     should not be listed.
    14. Failure to apply a        172.317, 172.322,   $1,200.
     ``Keep away from heat,''      172.325.
     marine pollutant, or
     elevated temperature
     (``HOT'') marking.
    15. Failure to properly mark  172.331, 172.334,   $1,000.
     a bulk container.             172.336, 172.338.
E. Package Labeling
 Requirements:
    1. Failure to label a         172.400...........  $7,000.
     package or applying a label
     that represents a hazard
     other than the hazard
     presented by the hazardous
     material in the package.
    2. Placing a label on a       172.401(a)........  $1,000.
     package that does not
     contain a hazardous
     material.
    3. Failure to place a         172.402.
     required subsidiary label
     on a package:.
        a. Packing Group I and    ..................  $3,100.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $1,800.
        c. Packing Group III....  ..................  $600.
    4. Placing a label on a       172.406(a)........  $1,000.
     different surface of the
     package than, or away from,
     the proper shipping name.
    5. Placing an improper size   172.407(c)........  $1,000.
     label on a package.
    6. Placing a label on a       172.407(d)........  $1,000.
     package that does not meet
     color specification
     requirements (depending on
     the variance).
    7. Failure to place a Cargo   172.402(c)........  $5,000.
     Aircraft Only label on a
     package intended for air
     transportation, when
     required.
    8. Failure to place a Cargo   172.402(c),
     Aircraft Only label on a      172.102(c)(1)
     package containing a          Special Provision
     primary lithium battery or    188, 189, 190.
     failure to mark a package
     containing a primary
     lithium battery as
     forbidden for transport on
     passenger aircraft:
        a. For air transport....  ..................  $10,000.
        b. For ground transport.  ..................  $1,000.
    9. Failure to provide an      172.411...........  $3,100.
     appropriate class or
     division number on an
     explosive label.
F. Placarding Requirements:
    1. Improperly placarding a    172.504.
     freight container or
     vehicle containing
     hazardous materials:
        a. Packing Group I and    ..................  $1,200 to $11,200.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II and   ..................  $1,000 to $9,000.
         III.
    2. Failure to placard a       172.504.
     freight container or
     vehicle containing
     hazardous materials (no
     placard at all):
        a. Packing Group I and    ..................  $12,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II and   ..................  $8,500.
         III.
G. Packaging Requirements:
    1. Failure to comply with     173.4, 173.4a,      $1,000 to $5,000.
     package testing               173.4b, 173.6,
     requirements for small        173.156, 173.306.
     quantities, excepted
     quantities, de minimis,
     materials of trade, limited
     quantities, and ORM-D.
    2. Offering a hazardous       Various.
     material for transportation
     in an unauthorized non-UN
     standard or non-
     specification packaging
     (includes failure to comply
     with the terms of a special
     permit authorizing use of a
     non-standard or non-
     specification packaging):
        a. Packing Group I, Sec.  ..................  $11,200.
           172.504 Table 1
         materials, and Division
         2.3 gases.
        b. Packing Group II and   ..................  $8,700.
         Divisions 2.1 and 2.2
         gases.
        c. Packing Group III....  ..................  $6,200.

[[Page 60737]]

 
    3. Offering a hazardous       Various.
     material for transportation
     in a package that was not
     retested as required:
        a. Packing Group I and    ..................  $8,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $5,000.
        c. Packing Group III....  ..................  $3,000.
    4. Offering a hazardous       Various.
     material for transportation
     in an improper package:
        a. When Packing Group I   ..................  $8,000.
         material is packaged in
         a Packing Group III
         package.
        b. When Packing Group I   ..................  $5,000.
         material is packaged in
         a Packing Group II
         package.
        c. When Packing Group II  ..................  $3,000.
         material is packaged in
         a Packing Group III
         package.
    5. Offering a hazardous       Various...........  $7,500.
     material for transportation
     in a packaging (including a
     packaging manufactured
     outside the United States)
     that is torn, damaged, has
     hazardous material present
     on the outside of the
     package, or is otherwise
     not suitable for shipment.
    6. Offering a hazardous       178.601, Various.
     material for transportation
     in a self-certified
     packaging that has not been
     subjected to design
     qualification testing:
        a. Packing Group I and    ..................  $13,500.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $10,500.
        c. Packing Group III....  ..................  $7,500.
    7. Offering a hazardous       173.32(d),          $4,500.
     material for transportation   173.24(c).
     in a packaging that has
     been successfully tested to
     an applicable UN standard
     but is not marked with the
     required UN marking
     (including missing
     specification plates).
    8. Failure to close a UN      173.22(a)(4).
     standard packaging in
     accordance with the closure
     instructions:
        a. Packing Group I and    ..................  $2,000 to $5,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $1,000 to $4,000.
        c. Packing Group III....  ..................  $500 to $3,000.
    9. Offering a hazardous       173.24(b).
     material for transportation
     in a packaging that leaks
     during conditions normally
     incident to transportation:
        a. Packing Group I and    ..................  $16,500.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $11,200.
        c. Packing Group III....  ..................  $7,500.
    10. Overfilling or            173.24(b).
     underfilling a package so
     that the effectiveness is
     substantially reduced:
        a. Packing Group I and    ..................  $11,200.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $7,500.
        c. Packing Group III....  ..................  $3,700.
    11. Failure to ensure         173.24(e).........  $9,000 to $12,000.
     packaging is compatible
     with hazardous material
     lading.
    12. Failure to mark an        173.25(a)(4)......  $3,700.
     overpack as required.
    13. Packaging incompatible    173.25(a)(5)......  $9,300.
     materials in an overpack.
    14. Marking a package         173.25(a).
     ``overpack'' when the inner
     packages do not meet the
     requirements of the HMR:
        a. Packing Group I and    ..................  $15,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $10,000.
        c. Packing Group III....  ..................  $7,000.
    15. Failure to comply with    173.27............  $1,000 to $10,000.
     additional requirements for
     transportation by aircraft.
    16. Filling an IBC, portable  173.32(a),
     tank, or cargo tank (DOT,     173.33(a)(3),
     UN, or IM) that is out of     180.352, 180.407,
     test and offering hazardous   180.605.
     materials for
     transportation in that IBC
     or portable tank. (Penalty
     amount depends on number of
     units and time out of
     test.).
        a. Packing Group I and
         Sec.   172.504 Table 1
         materials:
            i. All testing        ..................  $8,700.
             overdue.
            ii. Only periodic (5  ..................  $4,600.
             year) tests overdue
             or only
             intermediate
             periodic (2.5 year)
             tests overdue.
        b. Packing Group II:
            i. All testing        ..................  $6,600.
             overdue.
            ii. Only periodic (5  ..................  $3,300.
             year) tests overdue
             or only
             intermediate
             periodic (2.5 year)
             tests overdue.
        c. Packing Group III:
            i. All testing        ..................  $4,600.
             overdue.
            ii. Only periodic (5  ..................  $2,300.
             year) tests overdue
             or only
             intermediate
             periodic (2.5 year)
             tests overdue.
    17. Manifolding cylinders     173.301(g)........  $3,700 and up.
     without conforming to
     manifolding requirements.

[[Page 60738]]

 
    18. Failure to ensure a       173.315(n)(3).....  $2,500.
     cargo tank motor vehicle in
     metered delivery service
     has an operational off-
     truck remote shut-off
     activation device.
    19. Offering a hazardous      173.33............  $15,000.
     material in a cargo tank
     motor vehicle when the
     material does not meet
     compatibility requirements
     with the tank or other
     lading or residue.
    20. Failure to provide the    173.32(f)(6).
     required outage in a
     portable tank that results
     in a release of hazardous
     materials:.
        a. Packing Group I and    ..................  $15,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $11,200.
        c. Packing Group III....  ..................  $7,500.
------------------------------------------------------------------------
           Offeror Requirements--Specific hazardous materials
------------------------------------------------------------------------
A. Cigarette Lighters:
    1. Offering for               173.21(i).........  $7,500.
     transportation an
     unapproved cigarette
     lighter, lighter refill, or
     similar device, equipped
     with an ignition element
     and containing fuel.
    2. Failure to include the     173.308(d)(1).....  $1,000.
     cigarette lighter test
     report identifier on the
     shipping paper.
    3. Failure to mark the        173.308(d)(2).....  $1,000.
     approval number on the
     package..
B. Class 1--Explosives:
    1. Failure to mark the        172.320...........  $1,000.
     package with the EX number
     for each substance
     contained in the package
     or, alternatively, indicate
     the EX number for each
     substance in association
     with the description on the
     shipping description.
    2. Offering an unapproved     173.54, 173.56(b).
     explosive for
     transportation:.
        a. Division 1.4           ..................  $5,000.
         fireworks meeting the
         chemistry requirements
         of APA Standard 87-1.
        b. Division 1.3           ..................  $7,500.
         fireworks meeting the
         chemistry requirements
         of APA Standard 87-1.
        c. All other explosives   ..................  $12,500 and up.
         (including forbidden).
    3. Offering an unapproved     173.54, 173.56(b).
     explosive for
     transportation that
     minimally deviates from an
     approved design in a manner
     that does not impact
     safety:
        a. Division 1.4.........  ..................  $3,000.
        b. Division 1.3.........  ..................  $4,000.
        c. All other explosives.  ..................  $6,000.
    4. Offering a leaking or      173.54(c).
     damaged package of
     explosives for
     transportation:
        a. Division 1.3 and 1.4.  ..................  $12,500.
        b. All other explosives.  ..................  $16,500.
    5. Offering a Class 1         173.60(b)(5)......  $15,000.
     material that is fitted
     with its own means of
     ignition or initiation,
     without providing
     protection from accidental
     actuation.
    6. Packaging explosives in    173.61............  $9,300.
     the same outer packaging
     with other materials.
    7. Transporting a detonator   177.835(g)(3).....  $10,000.
     on the same vehicle as
     incompatible materials
     using the approved method
     listed in 177.835(g)(3)
     without meeting the
     requirements of IME
     Standard 22.
C. Class 7--Radioactive
 Materials:
    1. Failure to include         172.203(d)........  $2,000 to $5,000.
     required additional entries
     for radioactive material on
     a shipping paper, or
     providing incorrect
     information for these
     additional entries.
    2. Failure to mark the gross  172.310(a)........  $1,000.
     mass on the outside of a
     package of Class 7 material
     that exceeds 110 pounds.
    3. Failure to mark each       172.310(b)........  $3,700.
     package with the words
     ``Type A'' or ``Type B,''
     as appropriate.
    4. Placing a label on Class   172.403...........  $6,200.
     7 material that understates
     the proper label category.
    5. Placing a label on Class   172.403(g)........  $2,000 to $5,000.
     7 material that fails to
     contain (or has erroneous)
     entries for the name of the
     radionuclide(s), activity,
     and transport index.
    6. Failure to meet one or     173.410...........  $6,200.
     more of the general design
     requirements for a package
     used to ship a Class 7
     material.
    7. Failure to comply with     173.411...........  $6,200.
     the industrial packaging
     (IP) requirements when
     offering a Class 7 material
     for transportation.
    8. Failure to provide a       173.412(a)........  $5,000.
     tamper-indicating device on
     a Type A package used to
     ship a Class 7 material.
    9. Failure to meet the        173.412(b)-(i)....  $6,200.
     additional design
     requirements of a Type A
     package used to ship a
     Class 7 material.
    10. Failure to meet the       173.412(j)-(l)....  $11,200.
     performance requirements
     for a Type A package used
     to ship a Class 7 material.

[[Page 60739]]

 
    11. Offering a DOT            173.415(a),
     specification 7A packaging    173.461.
     without maintaining
     complete documentation of
     tests and an engineering
     evaluation or comparative
     data:
        a. Tests and evaluation   ..................  $13,500.
         not performed.
        b. Test performed but     ..................  $2,500 to $6,200.
         complete records not
         maintained.
    12. Offering any Type B,      173.416...........  $16,500.
     Type B(U), or Type B(M)
     packaging that failed to
     meet the approved DOT, NRC
     or DOE design, as
     applicable.
    13. Offering a Type B         173.471(a).
     packaging without
     registering as a party to
     the NRC approval
     certificate:
        a. Never obtained         ..................  $3,700.
         approval.
        b. Holding an expired     ..................  $1,200.
         certificate.
    14. Failure to meet one or    173.420...........  $13,500.
     more of the special
     requirements for a package
     used to ship more than 0.1
     kg of uranium hexafluoride.
    15. Offering Class 7          173.421(a)........  $8,000.
     materials for
     transportation as a limited
     quantity without meeting
     the requirements for a
     limited quantity.
    16. Offering a multiple-      173.423(a)........  $600 to $3,100.
     hazard limited quantity
     Class 7 material without
     addressing the additional
     hazard.
    17. Offering Class 7          173.424...........  $6,200 to $12,500.
     materials for
     transportation under
     exceptions for radioactive
     instruments and articles
     while failing to meet the
     applicable requirements.
    18. Offering Class 7 low      173.427...........  $7,500 to $12,500.
     specific activity (LSA)
     materials or surface
     contaminated objects (SCO)
     while failing to comply
     with applicable transport
     requirements (including, an
     external dose rate that
     exceeds an external
     radiation level of 10 mSv/h
     at 3 meters from the
     unshielded material).
    19. Offering Class 7 LSA      173.427(a)(6).....  $1,200.
     materials or SCO as
     exclusive use without
     providing specific
     instructions to the carrier
     for maintenance of
     exclusive use shipment
     controls.
    20. Offering in excess of a   173.431...........  $15,000.
     Type A quantity of a Class
     7 material in a Type A
     packaging.
    21. Offering a package that   173.441...........  $12,500.
     exceeds the permitted
     radiation level or
     transport index.
    22. Offering a package        173.443...........  $6,200 and up.
     without determining the
     level of removable external
     contamination, or that
     exceeds the limit for
     removable external
     contamination.
    23. Storing packages of       173.447(a)........  $6,200 and up.
     radioactive material in a
     group with a total
     criticality safety index of
     more than 50.
    24. Offering for              173.448(e)........  $6,200 and up.
     transportation or
     transporting aboard a
     passenger aircraft any
     single package or overpack
     of Class 7 material with a
     transport index greater
     than 3.0.
    25. Exporting a Type B, Type  173.471(d)........  $3,700.
     B(U), Type B(M), or fissile
     package without obtaining a
     U.S. Competent Authority
     Certificate or, after
     obtaining a U.S. Competent
     Authority Certificate,
     failing to submit a copy to
     the national competent
     authority of each country
     into or through which the
     package is transported.
    26. Offering or exporting     173.476(a), (b)...  $3,700.
     special form radioactive
     materials without
     maintaining a complete
     safety analysis or
     Certificate of Competent
     Authority, as required.
    27. Shipping a fissile        173.417, 173.453,   $12,500.
     material as fissile-exempt    173.457.
     without meeting one of the
     exemption requirements or
     otherwise not complying
     with fissile material
     requirements.
    28. Offering Class 7 fissile  173.417...........  $1,000 to $12,500.
     materials while failing to
     have a DOT Competent
     Authority Certificate or
     NRC Certificate of
     Compliance, as required, or
     failing to meet the
     requirements of the
     applicable Certificate.
D. Class 2--Compressed Gases in
 Cylinders:
    1. Filling and offering a     173.301(a)(6),
     cylinder with compressed      (a)(7).
     gas when the cylinder is
     out of test or after its
     authorized service life:
        a. Table 1 and            ..................  $10,000 to
         compressed gas in                             $15,000.
         solution.
        b. Division 2.1 gases...  ..................  $7,500 to $10,000.
        c. Division 2.2 gases...  ..................  $5,000 to $7,500.
    2. Overfilling cylinders:...  Various.
        a. Division 2.3 gases...  ..................  $15,000.
        b. Division 2.1 gases...  ..................  $10,000.
        c. Division 2.2 gases...  ..................  $7,500.
        d. Aerosols, limited      ..................  $5,000.
         quantities, consumer
         commodities.
    3. Failure to check each day  173.303(d)........  $6,200.
     the pressure of a cylinder
     charged with acetylene that
     is representative of that
     day's compression, after
     the cylinder has cooled to
     a settled temperature, or
     failure to keep a record of
     this test for 30 days.

[[Page 60740]]

 
    4. Offering a limited         173.306(a)(3).....  $1,800 to $5,000.
     quantity of a compressed
     gas in a metal container
     for the purpose of
     propelling a nonpoisonous
     material and failure to
     heat the cylinder until the
     pressure is equivalent to
     the equilibrium pressure at
     131 [deg]F, without
     evidence of leakage,
     distortion, or other defect.
    5. Offering a limited         173.306(a)(3)(v)..  $5,000.
     quantity of a compressed
     gas in a metal container
     intended to expel a non-
     poisonous material, while
     failing to subject the
     filled container to a hot
     water bath, as required.
    6. Offering liquefied         173.315(j)........  $7,500 to $10,000.
     petroleum gas for permanent
     installation on consumer
     premises when the
     requirements are not met.
E. Oxygen Generators Offered by
 Air:
    1. Offering an unapproved     173.168...........  $25,000.
     oxygen generator for
     transportation.
    2. Offering an oxygen         173.168...........  $12,500 to
     generator for                                     $25,000.
     transportation without
     installing a means of
     preventing actuation, as
     required.
    3. Offering an oxygen         172.102(c)(1)       $35,000.
     generator as spent when the   Special Provision
     ignition and chemical         61.
     contents were still present.
F. Batteries:                     173.159, 173.185,
                                   173.21(c).
    1. Offering lithium
     batteries in transportation
     that have not been tested:
        a. Ground transport.....  ..................  $15,000.
        b. Air transport........  ..................  $30,000.
    2. Offering lithium           ..................  $5,000 + 25
     batteries in transportation                       percent increase
     that have been assembled                          for each
     from tested cells, but have                       additional
     not been tested.                                  design.
    3. Failure to create records  ..................  $2,500 to $9,300.
     of design testing.
    4. Offering lithium           ..................  $15,000.
     batteries in transportation
     that have not been
     protected against short
     circuit.
    5. Offering lithium           ..................  $12,500.
     batteries in transportation
     in unauthorized packages.
    6. Offering lead acid         ..................  $10,000.
     batteries in transportation
     in unauthorized packages.
    7. Offering lithium           ..................  $30,000.
     batteries in transportation
     on passenger aircraft or
     misclassifying them for air
     transport.
    8. Failure to prepare         ..................  $6,000.
     batteries so as to prevent
     damage in transit.
------------------------------------------------------------------------
          Manufacturing, Reconditioning, Retesting Requirements
------------------------------------------------------------------------
A. Activities Subject to
 Approval:
    1. Failure to report in       171.2(c), Approval  $700 to $1,500.
     writing a change in name,     Letter.
     address, ownership, test
     equipment, management, or
     test personnel.
    2. Failure by an independent  178.35(c)(1), (2),  $5,000 to $16,500.
     inspection agency of          (3).
     specification cylinders to
     satisfy all inspector
     duties, including
     inspecting materials, and
     verifying materials of
     construction and cylinders
     comply with applicable
     specifications.
    3. Failure to properly        178.25(c)(4),       $4,000.
     complete or retain            Various.
     inspector's report for
     specification packages.
    4. Failure to have a          Various...........  $2,500.
     cylinder manufacturing
     registration number/symbol,
     when required.
B. Packaging Manufacturers
 (General):
    1. Failure of a manufacturer  178.2(c)..........  $3,100.
     or distributor to notify
     each person to whom the
     packaging is transferred of
     all the requirements not
     met at the time of
     transfer, including closure
     instructions.
    2. Failure to comply with     178.504 to
     specified construction        178.523.
     requirements for non-bulk
     packagings:
        a. Packing Group I and    ..................  $12,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $8,000.
        c. Packing Group III....  ..................  $4,000.
    3. Fail testing: Failure to   178.601(b),
     ensure a packaging            178.609, Part 178
     certified as meeting the UN   subparts O, Q.
     standard is capable of
     passing the required
     performance testing
     (depending on size of
     package):
        a. Infectious substances  ..................  $16,500.
        b. Packing Group I and    ..................  $13,500 to
         Sec.   172.504 Table 1                        $16,500.
         materials.
        c. Packing Group II.....  ..................  $10,500 to
                                                       $13,500.
        d. Packing Group III....  ..................  $7,500 to $10,500.
    4. No testing: Certifying a   178.601(d),
     packaging as meeting a UN     178.609, Part 178
     standard when design          subparts O, Q.
     qualification testing was
     not performed (depending on
     size of package):
        a. Infectious substances  ..................  $16,500.
        a. Packing Group I and    ..................  $13,500 to
         Sec.   172.504 table 1                        $16,500.
         materials.
        b. Packing Group II.....  ..................  $10,500 to
                                                       $13,500.
        c. Packing Group III....  ..................  $7,500 to $10,500.
    5. Failure to conduct         178.601(e), Part    $2,500 to $16,500.
     periodic testing on UN        178 subparts O, Q.
     standard packaging
     (depending on length of
     time, Packing Group, and
     size of package).

[[Page 60741]]

 
    6. Improper testing: Failure
     to properly conduct testing
     for UN standard packaging
     (e.g., testing with less
     weight than marked on
     packaging; drop testing
     from lesser height than
     required; failing to
     condition fiberboard boxes
     before design test)
     (depending on size of
     package):
        a. Design qualification   178.601(d),
         testing:.                 178.609, Part 178
                                   subparts O, Q.
            i. Infectious         ..................  $13,500.
             substances.
            ii. Packing Group I.  ..................  $10,500 to
                                                       $13,500.
            iii. Packing Group    ..................  $7,500 to $10,500.
             II.
            iv. Packing Group     ..................  $2,500 to $7,500.
             III.
        b. Periodic testing:....  178.601(e),
                                   178.609.
            i. Infectious         ..................  $10,500.
             substances.
            ii. Packing Group I.  ..................  $7,000 to $10,500.
            iii. Packing Group    ..................  $4,000 to $7,000.
             II.
            iv. Packing Group     ..................  $600 to $4,000.
             III.
    7. Failure to keep complete   178.601(l).
     and accurate testing
     records:.
        a. No records kept......  ..................  $5,000.
        b. Incomplete or          ..................  $1,200 to $3,700.
         inaccurate records.
    8. Improper marking of UN     178.503...........  $600 per item.
     certification.
C. Drum Manufacturers &
 Reconditioners:
    1. Failure to properly        178.604(b), (d),
     conduct a production          173.28(b)(2)(i).
     leakproofness test on a new
     or reconditioned drum:
        a. Improper testing:
            i. Packing Group I..  ..................  $3,000.
            ii. Packing Group II  ..................  $2,500.
            iii. Packing Group    ..................  $2,000.
             III.
        b. No testing performed:
            i. Packing Group I..  ..................  $6,200.
            ii. Packing Group II  ..................  $5,000.
            iii. Packing Group    ..................  $3,700.
             III.
    2. Marking incorrect tester   173.28(b)(2)(ii).
     information on a reused
     drum:.
        a. Incorrect information  ..................  $1,000.
        b. Unauthorized use of    ..................  $9,000.
         another's information.
    3. Representing, marking, or  173.28(c).........  $7,500 to $13,500.
     certifying a drum as a
     reconditioned UN standard
     packaging when the drum
     does not meet a UN
     standard..
    4. Representing, marking, or  173.28(d).........  $600
     certifying a drum as
     altered from one UN
     standard to another, when
     the drum has not been
     altered.
D. IBC and Portable Tank
 Requalification:
    1. Failure to properly test   180.352, 180.603.
     and inspect IBCs or
     portable tanks.
        a. Packing Group I......  ..................  $10,000.
        b. Packing Group II.....  ..................  $7,500.
        c. Packing Group III....  ..................  $5,000.
    2. Failure to properly mark   180.352(e),         $600 per item.
     an IBC or portable tank       178.703(b),
     with the most current         180.605(k).
     retest and/or inspection
     information.
    3. Failure to keep complete   180.352(f),
     and accurate records of IBC   180.605(l).
     or portable tank retest and
     reinspection:
        a. No records kept......  ..................  $5,000.
        b. Incomplete or          ..................  $1,200 to $3,700.
         inaccurate records.
    4. Failure to make            180.352(g), 49      $1,200.
     inspection and test records   U.S.C. 5121(b)(2).
     available to a DOT
     representative upon request.
    5. Failure to perform tests   180.352(d)........  $3,700 to $6,200.
     (internal visual,
     leakproofness) on an IBC as
     part of a repair.
    6. Failure to perform         180.350(c)........  $2,500.
     routine maintenance on an
     IBC.
E. Cylinder Manufacturers &
 Rebuilders:
    1. Manufacturing,             178.35............  $10,000 to
     representing, marking,                            $25,000.
     certifying, or selling a
     DOT high-pressure cylinder
     that was not inspected and
     verified by an approved
     independent inspection
     agency.
    2. Failure to mark a          178.35, Various...  $1,000.
     registration number/symbol
     on a cylinder, when
     required.
    3. Failure to mark the date   178.65(i).........  $3,700.
     of manufacture or lot
     number on a DOT-39 cylinder.
    4. Failure to have a          107.807, 178.35...  $6,200.
     chemical analysis performed
     in the U.S. for a material
     manufactured outside the
     U.S., without an approval.
    5. Failure to comply with     178.35(d), (e),     $5,000.
     defect and attachment         (f).
     requirements, safety device
     requirements, or marking
     requirements.
    6. Failure to meet wall       Various...........  $9,300 to $18,700.
     thickness requirements.
    7. Failure to heat treat      Various...........  $6,200 to $18,700.
     cylinders prior to testing.
    8. Failure to conduct a       Various...........  $3,100 to $7,700.
     complete visual internal
     examination.
    9. Failure to conduct a       Various...........  $3,100 to $7,700.
     hydrostatic test, or
     conducting a hydrostatic
     test with inaccurate test
     equipment.
    10. Failure to conduct a      Various...........  $9,300 to $18,700.
     flattening test.

[[Page 60742]]

 
    11. Failure to conduct a      178.33-8, 178.33a-  $6,200 to $18,700.
     burst test on a DOT-2P, 2Q,   8, 178.33b-8,
     2S, or 39 cylinder.           178.65(f)(2).
    12. Failure to maintain       178.35, Various.
     required inspector's
     reports:.
        a. No reports at all....  ..................  $5,000.
        b. Incomplete or          ..................  $1,200 to $3,700.
         inaccurate reports.
    13. Failure to complete or    178.35(g).........  $6,200.
     retain manufacturer's
     reports.
    14. Representing a DOT-4      180.211(a)........  $10,000 to
     series cylinder as repaired                       $25,000.
     or rebuilt to the
     requirements of the HMR
     without being authorized by
     the Associate Administrator.
F. Cargo Tank Motor Vehicles:
    1. Failure to maintain        180.417(b), (c).
     complete cargo tank test
     reports, as required:
        a. No records...........  ..................  $5,000.
        b. Incomplete records...  ..................  $1,200 to $3,700.
    2. Failure to have a cargo    180.407(c)........  $8,000 and up;
     tank tested or inspected                          increase by 25
     (e.g., visual, thickness,                         percent for each
     pressure, leakproofness).                         additional.
    3. Failure to mark a cargo    180.415...........  $600 each item.
     tank with test and
     inspection markings.
    4. Failure to retain a cargo  178.320(b),         $6,200.
     tank's data report and        178.337-18,
     Certificates or design        178.338-19,
     certification.                178.345-15.
    5. Failure to mark a special  172.301(c)........  $1,800.
     permit number on a cargo
     tank.
    6. Constructing a cargo tank  178.320(b),         $13,500.
     or cargo tank motor vehicle   Special Permit.
     not in accordance with a
     special permit or design
     certification.
    7. Failure to mark manhole    178.345-5(e)......  $4,500.
     assemblies on a cargo tank
     motor vehicle manufactured
     after October 1, 2004.
    8. Failure to apply           178.337-17,
     specification plate and       178.338-18,
     name plate:.                  178.345-14.
        a. No marking...........  ..................  $4,500.
        b. Incomplete marking...  ..................  $600 per item.
    9. Failure to conduct         180.416(d)........  $2,500.
     monthly inspections and
     tests of discharge system
     in cargo tanks.
G. Cylinder Requalification:
    1. Certifying or marking as   180.205(a)........  $1,000.
     retested a non-
     specification cylinder.
    2. Failure to have            180.205(b)........  $5,000.
     retester's identification
     number (RIN).
    3. Failure to have current    180.205(b)........  $2,500 + $600 each
     authority due to failure to                       additional year.
     renew a RIN.
    4. Marking a RIN before       180.205(b)........  $1,000.
     successfully completing a
     hydrostatic retest.
    5. Representing, marking, or  171.2(c), (e),      $2,500 to $7,500.
     certifying a cylinder as      180.205(c),
     meeting the requirements of   Special Permit.
     a special permit when the
     cylinder was not maintained
     or retested in accordance
     with the special permit.
    6. Failure to conduct a       180.205(f)........  $2,600 to $6,500.
     complete visual external
     and internal examination.
    7. Performing hydrostatic     180.205(g)(1),      $2,600 to $6,500.
     retesting without             180.205(g)(3).
     confirming the accuracy of
     the test equipment or
     failing to conduct
     hydrostatic testing.
    8. Failure to hold            180.205(g)(5).....  $3,800.
     hydrostatic test pressure
     for 30 seconds or
     sufficiently longer to
     allow for complete
     expansion.
    9. Failure to perform a       180.205(g)(5).....  $3,800.
     second retest, after
     equipment failure, at a
     pressure increased by the
     lesser of 10 percent or 100
     psi (includes exceeding
     90percent of test pressure
     prior to conducting a
     retest).
    10. Failure to condemn a      180.205(i)........  $7,500 to $13,500.
     cylinder when required
     (e.g., permanent expansion
     exceeds 10 percent of total
     expansion [5percent for
     certain special permit
     cylinders], internal or
     external corrosion,
     denting, bulging, evidence
     of rough usage).
    11. Failure to properly mark  180.205(i)(2).....  $1,000 to $5,000.
     a condemned cylinder or
     render it incapable of
     holding pressure.
    12. Failure to notify the     180.205(i)(2).....  $1,200.
     cylinder owner in writing
     when a cylinder has been
     condemned.
    13. Failure to perform        180.209(a)........  $2,600 to $6,500.
     hydrostatic retesting at
     the minimum specified test
     pressure.
    14. Marking a star on a       180.209(b)........  $2,500 to $5,000.
     cylinder that does not
     qualify for that mark.
    15. Marking a ``+'' sign on   173.302a(b).......  $2,500 to $5,000.
     a cylinder without
     determining the average or
     minimum wall stress by
     calculation or reference to
     CGA Pamphlet C-5.
    16. Marking a cylinder in or  180.213(b)........  $7,500 to $13,500.
     on the sidewall when not
     permitted by the applicable
     specification.
    17. Failure to maintain       180.213(b)(1).....  $1,000.
     legible markings on a
     cylinder.
    18. Marking a DOT 3HT         180.213(c)(2).....  $7,500 to $13,500.
     cylinder with a steel stamp
     other than a low-stress
     steel stamp.
    19. Improper marking of the   180.213(d)........  $1,000.
     RIN or retest date on a
     cylinder.

[[Page 60743]]

 
    20. Marking an FRP cylinder   Special Permit....  $7,500 to $13,500.
     with steel stamps in the
     FRP area of the cylinder
     such that the integrity of
     the cylinder is compromised.
    21. Failure to comply with    Appendix C to Part  $2,600 to $6,500.
     eddy current examination      180.
     requirements for DOT 3AL
     cylinders manufactured of
     aluminum alloy 6351-T6,
     when applicable.
    22. Failure to maintain       180.215(a)........  $700 to $1,500.
     current copies of the HMR,
     DOT special permits, and
     CGA Pamphlets applicable to
     inspection, retesting, and
     marking activities.
    23. Failure to keep complete  180.215(b).
     and accurate records of
     cylinder reinspection and
     retest:
        a. No records kept......  ..................  $5,000.
        b. Incomplete or          ..................  $1,200 to $3,700.
         inaccurate records.
------------------------------------------------------------------------
                          Carrier Requirements
------------------------------------------------------------------------
A. Incident Notification:
    1. Failure to provide         171.15............  $6,000.
     immediate telephone/online
     notification of a
     reportable hazardous
     materials incident
     reportable under 171.15(b).
    2. Failure to file a written  171.16............  $4,000.
     hazardous material incident
     report within 30 days of
     discovering a hazardous
     materials incident
     reportable under 171.15(b)
     or 171.16(a).
    3. Failure to include all     171.15, 171.16....  $1,000.
     required information in
     hazardous materials
     incident notice or report
     or failure to update report.
B. Shipping Papers:
    1. Failure to retain          174.24(b),          $1,200.
     shipping papers for 1 year    175.33(c),
     after a hazardous material    176.24(b),
     (or 3 years for a hazardous   177.817(f).
     waste) is accepted by the
     initial carrier.
C. Stowage/Attendance/
 Transportation Requirements:
    1. Transporting packages of   Various...........  $3,700 and up.
     hazardous material that
     have not been secured
     against movement.
    2. Failure to properly        Various...........  $9,300 and up.
     segregate hazardous
     materials.
    3. Failure to remove a        177.834(h).
     package containing
     hazardous materials from a
     motor vehicle before
     discharge of its contents:
        a. Packing Group I and    ..................  $5,000.
         Sec.   172.504 Table 1
         materials.
        b. Packing Group II.....  ..................  $3,000.
        c. Packing Group III....  ..................  $1,000.
    4. Transporting explosives    177.835(i)........  $6,500 and up.
     in a motor vehicle
     containing metal or other
     articles or materials
     likely to damage the
     explosives or any package
     in which they are
     contained, without
     segregating in different
     parts of the load or
     securing them in place in
     or on the motor vehicle and
     separated by bulkheads or
     other suitable means to
     prevent damage.
    5. Failure to attend Class 1  177.835(k)........  $3,000.
     explosive materials during
     transportation.
    6. Transporting railway       171.2(b), (e).....  $8,700.
     track torpedoes outside of
     flagging kits, in violation
     of DOT-E 7991.
    7. Failure to carry a hazmat  107.620(b)........  $1,000.
     registration letter or
     number in the transport
     vehicle.
    8. Transporting Class 7       177.842(a)........  $6,200 and up.
     (radioactive) material
     having a total transport
     index greater than 50.
    9. Transporting Class 7       177.842(b)........  $6,200 and up.
     (radioactive) material
     without maintaining the
     required separation
     distance.
    10. Failure to comply with    171.2(b), (e),      $6,200 and up.
     radiation survey              Special Permit.
     requirements of a special
     permit that authorizes the
     transportation of Class 7
     (radioactive) material
     having a total
     transportation index
     exceeding 50.
------------------------------------------------------------------------

    The baseline penalty amounts in Part II are used as a starting 
amount or range appropriate for the normal or typical nature, 
extent, circumstances, and gravity of the probable violations 
frequently cited in enforcement reports. PHMSA must also consider 
any additional factors, as provided in 49 U.S.C. 5123(c) and 49 CFR 
107.331, including the nature, circumstances, extent and gravity of 
a violation, the degree of culpability and compliance history of the 
respondent, the financial impact of the penalty on the respondent, 
and other matters as justice requires. Consequently, at each stage 
of the administrative enforcement process, up to and including 
issuance of a final order or decision on appeal, PHMSA can adjust 
the baseline amount in light of the specific facts and circumstances 
of each case.
    As part of this analysis, PHMSA reviews the factors outlined in 
the next section, Miscellaneous Factors Affecting Penalty Amounts, 
the safety implications of the violation, the pervasiveness of the 
violation, and all other relevant information. PHMSA considers not 
only what happened as a result of the violation, but also what could 
have happened as a result of continued violation of the regulations. 
As a general matter, one or more specific instances of a violation 
are presumed to reflect a respondent's general manner of operations, 
rather than isolated occurrences.
    PHMSA may draw factors relevant to the statutory considerations 
from the initial information gathered by PHMSA's Office of Hazardous 
Materials Safety Field Operations, the respondent in response to an 
exit briefing, ticket, or Notice of Probable Violation (NOPV), or 
information otherwise available to us. We will generally apply the 
specific statutory factors that are outlined in

[[Page 60744]]

the next section, Miscellaneous Factors Affecting Penalty Amounts, 
in the following order:
    1. Select the appropriate penalty amount within a specific 
baseline or range, with appropriate increases or decreases depending 
on the packing group or material involved and other information 
regarding the frequency or duration of the violation, the 
culpability of the respondent, and the actual or potential 
consequences of the violation.
    2. Apply decreases for a reshipper or carrier that reasonably 
relied on an offeror's non-compliant preparation of a hazardous 
materials shipment.
    3. Apply increases for multiple counts of the same violation.
    4. Apply increases for prior violations of the HMR within the 
past six years.
    5. Apply decreases for corrective actions.
    6. Apply decreases for respondent's inability to pay or adverse 
effect on its ability to continue in business.

After each adjustment listed above, PHMSA will use the new modified 
baseline to calculate each subsequent adjustment. PHMSA will apply 
adjustments separately to each individual violation. All penalty 
assessments will be subject to additional adjustments as appropriate 
to reflect other matters as justice requires.

A. Respondents That Reship

    A person who either receives hazardous materials from another 
company and reships them (reshipper), or accepts a hazardous 
material for transportation, and transports that material (carrier), 
is responsible for ensuring that the shipment complies in all 
respects with Federal hazardous materials transportation law. In 
both cases, the reshipper or carrier independently may be subject to 
enforcement action if the shipment does not comply.
    Depending on all the circumstances, however, the person who 
originally prepared the shipment and placed it into transportation 
may have greater culpability for the noncompliance than the 
reshipper or carrier who reasonably relies on the shipment as 
received and does not open or alter the package before the shipment 
continues in transportation. PHMSA will consider the specific 
knowledge and expertise of all parties, as well as which party is 
responsible for compliance under the regulations, when evaluating 
the culpability of a reshipper or carrier. PHMSA recognizes that a 
reshipper or carrier may have reasonably relied upon information 
from the original shipper and may reduce the applicable baseline 
penalty amount up to 25 percent.

B. Penalty Increases for Multiple Counts

    A main objective of PHMSA's enforcement program is to obtain 
compliance with the HMR and the correction of violations which, in 
many cases, have been part of a company's regular course of 
business. As such, there may be multiple instances of the same 
violation. Examples include a company shipping various hazardous 
materials in the same unauthorized packaging, shipping the same 
hazardous material in more than one type of unauthorized packaging, 
shipping hazardous materials in one or more packagings with the same 
marking errors, or using shipping papers with multiple errors.
    Under 49 U.S.C. 5123(a), each violation of the HMR and each day 
of a continuing violation (except for violations pertaining to 
packaging manufacture or qualification) is subject to a civil 
penalty up to $75,000 or $175,000 for a violation occurring on or 
after October 1, 2012. As such, PHMSA generally will treat multiple 
occurrences that violate a single regulatory provision as separate 
violations and assess the applicable baseline penalty for each 
distinct occurrence of the violation. PHMSA will generally consider 
multiple shipments or, in the case of package testers, multiple 
package designs, to be multiple occurrences; and each shipment or 
package design may constitute a separate violation.
    PHMSA, however, will exercise its discretion in each case to 
determine the appropriateness of combining into a single violation 
what could otherwise be alleged as separate violations and applying 
a single penalty for multiple counts or days of a violation, 
increased by 25 percent for each additional instance, as directed by 
49 U.S.C. 5123(c). For example, PHMSA may treat a single shipment 
containing three items or packages that violate the same regulatory 
provision as a single violation and apply a single baseline penalty 
with a 50 percent increase for the two additional items or packages; 
and PHMSA may treat minor variations in a package design for a 
package tester as a single violation and apply a single baseline 
penalty with a 25 percent increase for each additional variation in 
design.
    When aggravating circumstances exist for a particular violation, 
PHMSA may handle multiple instances of a single regulatory violation 
separately, each meriting a separate baseline or increase the civil 
penalty by 25 percent for each additional instance. Aggravating 
factors may include increased safety risks, continued violation 
after receiving notice, or separate and distinct acts. For example, 
if the multiple occurrences each require their own distinct action, 
then PHMSA may count each violation separately (e.g., failure to 
obtain approvals for separate fireworks devices).

C. Penalty Increases for Prior Violations

    The baseline penalty in the List of Frequently Cited Violations 
assumes an absence of prior violations. If a respondent has prior 
violations of the HMR, generally, PHMSA will increase a proposed 
penalty.
    When setting a civil penalty, PHMSA will review the respondent's 
compliance history and determine if there are any finally-
adjudicated violations of the HMR initiated within the previous six 
years. Only cases or tickets that have been finally-adjudicated will 
be considered (i.e., the ticket has been paid, a final order has 
been issued, or all appeal remedies have been exhausted or expired). 
PHMSA will include prior violations that were initiated within six 
years of the present case; a case or ticket will be considered to 
have been initiated on the date of the exit briefing for both the 
prior case and the present case. If multiple cases are combined into 
a single Notice of Probable Violation or ticket, the oldest exit 
briefing will be used to determine the six-year period. If a 
situation arises where no exit briefing is issued, the date of the 
Notice of Probable Violation or Ticket will be used to determine the 
six-year period. PHMSA may consider prior violations of the 
Hazardous Materials Regulations from other DOT Operating 
Administrations.
    The general standards for increasing a baseline proposed penalty 
on the basis of prior violations are as follows:
    1. For each prior civil or criminal enforcement case--25 percent 
increase over the pre-mitigation recommended baseline penalty.
    2. For each prior ticket--10 percent increase over the pre-
mitigation recommended baseline penalty.
    3. If a respondent is cited for operating under an expired 
special permit and previously operated under an expired special 
permit (as determined in a finally-adjudicated civil, criminal, or 
administrative enforcement case or a ticket), PHMSA will increase 
the civil penalty 100 percent.
    4. If a respondent is cited for the exact same violation that it 
has been previously cited for within the six-year period (in a 
finally-adjudicated civil, criminal, or administrative enforcement 
case or a ticket), PHMSA will increase the baseline for that 
violation by 100 percent. This increase will apply only when the 
present violation is identical to the previous violation and applies 
only to the specific violation that has recurred.
    5. A baseline proposed penalty (both for each individual 
violation and the combined total) will not be increased more than 
100 percent on the basis of prior violations.

D. Corrective Action

    PHMSA may lower a proposed penalty when a respondent's 
documented corrective action has fixed an alleged violation. 
Corrective action should demonstrate not only that the specific 
deficiency is corrected but also that any systemic corrections have 
been addressed to prevent recurrence of the violation.
    The two primary factors that determine the reduction amount are 
the extent and timing of the corrective action. In other words, 
PHMSA will determine the amount of mitigation based on how much 
corrective action a respondent completes and how soon after the exit 
briefing it performs corrective action. Comprehensive systemic 
action to prevent future violations may warrant greater mitigation 
than actions that simply target violations identified during the 
inspection. Actions taken immediately (within the 30 calendar day 
period that respondents have to respond to an exit briefing, or upon 
approval of Field Operations) may warrant greater mitigation than 
actions that are not taken promptly.
    PHMSA may consider a respondent's corrective action to assess 
mitigation at various stages in the enforcement process, including: 
(1) AFTEr an inspection and before an NOPV is issued; (2) on receipt 
of an NOPV; or (3) after receipt of an NOPV. In order to reduce a 
civil penalty for corrective action, PHMSA must receive satisfactory

[[Page 60745]]

documentation that demonstrates the corrective action was completed. 
If a corrective action is of a type that cannot be documented (e.g., 
no longer using a particular packaging), then a respondent may 
provide a signed affidavit describing the action it took. The 
affidavit must begin with the affirmative oath ``I hereby affirm 
under the penalties of perjury that the below statements are true 
and correct to the best of my knowledge, information and belief,'' 
in accordance with 28 U.S.C. 1746.
    Generally, corrective action credit may not exceed 25 percent. 
Mitigation is applied to individual violations and fact patterns but 
should not be considered to be automatic reduction. Thus, in a case 
with two violations, if corrective action for the first violation is 
more extensive than for the second, the penalty for the first will 
be mitigated more than that for the second. If a respondent has 
previously committed the same violation, however, as determined in a 
finally-adjudicated civil, criminal, or administrative enforcement 
case or a ticket, PHMSA will not apply any reduction for corrective 
action.
    In determining the appropriate civil penalty reduction, PHMSA 
will consider the extent to which the respondent corrected the 
violation and any risks or harms it created, the respondent's 
actions to prevent the violation from recurring, improvements to 
overall company practices to address a widespread compliance issue, 
and how quickly the corrective action was performed. In general, 
PHMSA will apply the following reductions for corrective action, 
subject to the facts and circumstances of individual cases and 
respondents. If a respondent has given full documentation of timely 
corrective action and PHMSA does not believe that anything else can 
be done to correct the violation or improve overall company 
practices, we will generally reduce the civil penalty by no more 
than 25 percent. As noted above, a 25 percent reduction is not 
automatic. We will reduce the penalty up to 20 percent when a 
respondent promptly and completely corrected the cited violation and 
has taken substantial steps toward comprehensive improvements. PHMSA 
will generally apply a reduction up to 15 percent when a respondent 
has made substantial and timely progress toward correcting the 
specific violation as well as overall company practices, but 
additional actions are needed. A reduction up to 10 percent is 
appropriate when a respondent has taken significant steps toward 
addressing the violation, but minimal or no steps toward correcting 
broader company policies to prevent future violations. PHMSA may 
reduce a penalty up to 5 percent when a respondent made untimely or 
minimal efforts toward correcting the violation.

E. Financial Considerations

    PHMSA may mitigate a proposed penalty when a respondent 
documents that the penalty would either (1) exceed an amount that 
the respondent is able to pay, or (2) have an adverse effect on the 
respondent's ability to continue in business. These criteria relate 
to a respondent's entire business, and not just the product line or 
part of its operations involved in a violation. PHMSA may apply this 
mitigation by reducing the civil penalty or instituting a payment 
plan.
    PHMSA will only mitigate a civil penalty based on financial 
considerations when a respondent supplies financial documentation 
demonstrating one of the factors above. A respondent may submit 
documentation of financial hardship at any stage to receive 
mitigation or an installment payment plan. Documentation includes 
tax records, a current balance sheet, profit and loss statements, 
and any other relevant records. Evidence of a respondent's financial 
condition is used only to decrease a penalty, and not to increase 
it.
    In evaluating the financial impact of a penalty on a respondent, 
PHMSA will consider all relevant information on a case-by-case 
basis. Although PHMSA will determine financial hardship and 
appropriate penalty adjustments on an individual basis, in general, 
we will consider the following factors.
    1. The overall financial size of the respondent's business and 
information on the respondent's balance sheet, including the current 
ratio (current assets to current liabilities), the nature of current 
assets, and net worth (total assets minus total liabilities).
    2. A current ratio close to or below 1.0 may suggest that the 
company would have difficulty in paying a large penalty or in paying 
it in a single lump sum.
    3. A small amount of cash on hand (representing limited 
liquidity), even with substantial other current assets (such as 
accounts receivable or inventory), may suggest a company would have 
difficulty in paying a penalty in a single lump sum.
    4. A small or negative net worth may suggest a company would 
have difficulty in paying a penalty in a single lump sum. 
Notwithstanding, many respondents have paid substantial civil 
penalties in installments even though net worth was negative. For 
this reason, negative net worth alone does not always warrant 
reduction of a proposed penalty or even, in the absence of factors 
discussed above, a payment plan.
    When PHMSA determines that a proposed penalty poses a 
significant financial hardship, we may reduce the proposed penalty 
and/or implement an installment payment plan. The appropriateness of 
these options will depend on the circumstances of the case.
    When an installment payment plan is appropriate, the length of 
the payment plan should be as short as possible, but may be adjusted 
as necessary. PHMSA will not usually exceed six months for a payment 
plan. In unusual circumstances, PHMSA may extend the period of a 
payment plan. For example, the duration of a payment plan may 
reflect fluctuations in a company's income if its business is 
seasonal or if the company has documented specific reasons for 
current non-liquidity.

    Issued in Washington, DC, on September 25, 2013 under authority 
delegated in 49 CFR Sec.  1.97.
Cynthia L. Quarterman,
Administrator, Pipeline and Hazardous Materials Safety Administration.
[FR Doc. 2013-23887 Filed 10-1-13; 8:45 am]
BILLING CODE 4910-60-P