[Federal Register Volume 60, Number 43 (Monday, March 6, 1995)]
[Rules and Regulations]
[Pages 12139-12146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5179]
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DEPARTMENT OF TRANSPORTATION
Research and Special Programs Administration
49 CFR Part 107
[Docket No. HM-207D; Amdt. No. 107-33]
RIN 2137-AC60
Hazardous Materials Regulations; Penalty Guidelines
AGENCY: Research and Special Programs Administration (RSPA), DOT.
ACTION: Final rule.
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SUMMARY: In this final rule, RSPA is publishing its hazardous material
transportation enforcement civil penalty guidelines. This action
provides the regulated community and the general public with guidance
as to the factors RSPA considers in its hazmat penalty assessment
process.
EFFECTIVE DATE: This rule is effective April 7, 1995.
FOR FURTHER INFORMATION CONTACT: John J. O'Connell, Jr., Office of
Hazardous Materials Enforcement, (202) 366-4700; or Edward H.
Bonekemper, III, Office of Chief Counsel, (202) 366-4400, Research and
Special Programs Administration, U.S. Department of Transportation, 400
Seventh Street, SW., Washington, DC 20590-0001.
SUPPLEMENTARY INFORMATION:
I. Background
In response to a request contained in Senate Report 103-150 that
accompanied the Department of Transportation and Related Agencies
Appropriations Act, 1994, RSPA is publishing its hazardous material
transportation (hazmat) enforcement civil penalty guidelines as an
appendix to its regulations. This action will provide the regulated
community and the general public with information concerning how RSPA
generally begins its hazmat penalty assessment process and types of
information that respondents in enforcement cases should provide to
justify reduction of proposed penalties.
RSPA enforcement personnel and attorneys use these guidelines as a
partial means of determining a baseline civil penalty for selected
violations of the Hazardous Materials Regulations (HMR; 49 CFR Parts
171-180), or the Federal hazardous material transportation law (Federal
hazmat law), 49 U.S.C. 5101 et seq. (formerly the Hazardous Materials
Transportation Act (HMTA), 49 App. U.S.C. 1801 et seq.).
Because these guidelines are non-binding and are periodically
updated, they are being published as an informational appendix to the
enforcement regulations, Subpart D of Part 107 in Title 49 of the Code
of Federal Regulations (CFR). They are being published without public
notice or comment because they are merely informational, are not
finally determinative of any issues or rights, and do not have the
force of law. Because these guidelines are merely a general statement
of agency policy and practice and because they impose no requirements,
no notice of proposed rulemaking is necessary.
This rule publishes the guidelines as they existed on January 18,
1995. In any particular case, the Office of Hazardous Materials
Enforcement will use the version of the guidelines in effect at the
time of its referral of a matter to the Office of the Chief Counsel for
possible issuance of a notice of probable violation (NOPV). However,
since the guidelines are not legally binding, later changes in the
guidelines may be considered in a particular case before a final order
is issued.
On November 16, 1990, Congress amended the HMTA by passing the
Hazardous Materials Transportation Uniform Safety Act of 1990 (HMTUSA;
Public Law 101-615); in HMTUSA, Congress increased the maximum
penalties for HMTA and HMR violations from $10,000 to $25,000 per
violation per day. The guidelines reflect the culmination of a five-
year program under which RSPA increased the baseline penalty for most
violations by 20 percent per year (on November 16 of each year between
1990 and 1994) to effect Congress' 1990 increase of the maximum penalty
for hazmat violations.
These guidelines are a preliminary assessment tool used by RSPA
personnel, and they create no rights in any party. They contain
baseline amounts or ranges for violations that frequently have been
cited in RSPA hazmat NOPVs. When a violation not described in the
guidelines is encountered, it sometimes is possible to determine a
baseline penalty by analogy to a similar violation in the guidelines.
Even when the guidelines are applicable to a violation, the use of
the guidelines is only a starting point. They promote consistency and
generally are used to provide some standard for imposing similar
penalties in similar cases. However, no two cases are identical, and
ritualistic use of the guidelines would produce arbitrary results and,
most significantly, would ignore the statutory mandate to consider
several specific assessment criteria. Therefore, regardless of whether
the guidelines are used to determine a baseline amount for a violation,
RSPA enforcement and legal personnel must apply the statutory
assessment criteria to all relevant information in the record
concerning any alleged violation and the apparent violator. These
criteria are in 49 U.S.C. 5123 and 49 CFR 107.331.
The criteria that RSPA applies are the nature, extent,
circumstances, and gravity of each violation; the degree of the
violator's culpability; the violator's history of prior violations (if
any); the violator's ability to pay; any effect of the penalty on the
violator's ability to continue to do business, and other matters that
justice requires. The baseline amount or range is an initial reflection
of the nature, extent, circumstances, and gravity of the violation as
compared with other types of violations. This amount then may be
modified on the basis of case-specific information on nature, extent,
circumstances, and gravity, as well as information with respect to the
other enumerated factors.
[[Page 12140]]
Corrective action taken by a violator to prevent a recurrence of
similar violations is a major consideration under ``other matters that
justice requires.'' Application of the statutory assessment criteria
may increase or decrease the baseline penalty amount or range. The two
economic criteria, however, are only used to decrease penalties and are
not used to increase penalties. Conversely, a violator's history of
prior violations is used only to increase a penalty.
As discussed more fully below, the guidelines are not binding on
RSPA or Department of Transportation personnel. Enforcement personnel
and staff attorneys generally use the guidelines as a starting point
for penalty assessment. However, they, the Chief Counsel,
administrative law judges (ALJs), and the RSPA Administrator may
deviate from the guidelines where appropriate, and are legally bound
only by the statutory assessment criteria.
RSPA is aware of a recent decision by the United States Court of
Appeals for the District of Columbia Circuit ruling that a Federal
Communications Commission (FCC) civil penalty schedule used in its
forfeiture proceedings may not be published as a policy statement, but
must be issued as a rule in accordance with the public notice and
comment requirements of the Administrative Procedure Act, 5 U.S.C. 553
(b), (c). United States Telephone Ass'n v. FCC, 28 F.3d 1232 (D.C. Cir.
1994). RSPA has reviewed the Court's decision, as well as the FCC
schedule and procedures that were the subject of the ruling, and
believes that the ruling is not applicable to the RSPA guidelines.
A respondent has no right to be heard in an FCC forfeiture
proceeding other than by the FCC Bureau that initiates the forfeiture
action. The Bureau begins a proceeding by issuing a forfeiture order.
47 CFR 1.80(f). The respondent is permitted a written reply, and the
Bureau issues a final administrative determination. Id. A hearing
before an ALJ may be held, but solely at the Bureau's discretion, 47
CFR 1.80(g); the regulations themselves state that normally the matter
will be heard by an ALJ only when it arises in conjunction with other
proceedings for which a formal hearing is required, id. When a hearing
is held, the decision of the ALJ is subject to Bureau review and
approval. 47 CFR 1.273, 1.282. The FCC schedule governs the Bureau's
penalty determination, whether following a respondent's written reply
or in reviewing an ALJ decision. Thus, a respondent, even where it
fully exercised its procedural rights, would be assessed a penalty
determined according to a methodology that it had no opportunity to
contest. It is firmly established that a standard must be issued as a
rule if it is ``finally determinative'' of a respondent's obligations.
E.g., Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 537 (D.C.
Cir. 1986).
In contrast, the RSPA guidelines are used by the RSPA Office of the
Associate Administrator for Hazardous Materials Safety (OHMS), at a
staff, level to assist in developing recommended proposed penalties in
enforcement cases. On receiving an NOPV setting forth the penalty, a
respondent may demand a formal hearing before an ALJ. 49 CFR 107.319.
The OHMS and RSPA's Office of Chief Counsel will employ the guidelines
to determine the penalty for which it will argue before the ALJ;
nonetheless, the ALJ is not bound by the guidelines, and retains his or
her essential discretion.
An ALJ decision that is not appealed is a final administrative
action. 49 CFR 107.323. A decision that is appealed is reviewed by the
RSPA Administrator. 49 CFR 107.325. On review of an ALJ decision, the
Administrator, as well, is not bound by the OHMS guidelines.
Accordingly, the guidelines do not ``finally determin[e]'' a
respondent's penalty obligation; a respondent that objects to the
proposed penalty has the right to contest the penalty fully before the
administrative decisionmaker. The administrative decisionmaker remains
``free to exercise his [or her] informed discretion.'' Guardian Fed.
Savings & Loan Ass'n v. Federal Savings & Loan Ins. Corp., 589 F.2d
658, 666, 668 (D.C. Cir. 1978).
In addition, the FCC schedule and the RSPA guidelines differ
significantly in the degree to which they permit deviation in their
use. The USTA court, citing the proposition that the policy/rule
distinction turns on ``an agency's intention to bind itself to a
particular legal policy position,'' 28 F.3d 1234, found that in over
300 cases, the FCC followed its fine schedule essentially without
exception, id. at 1234-35.
The OHMS guidelines, as opposed to a penalty schedule, consist of a
listing of violations and the baseline penalty, or range of penalties,
proposed for each as of November 16, 1994, as well as an explanation of
the methodology OHMS generally uses to modify the baseline proposed
penalty on the basis of case-specific factors required to be considered
under 49 U.S.C. 5123(c) and 49 CFR 107.331. The guidelines presuppose
flexibility in their application; beyond that, the OHMS or, where
respondent has waived formal hearing, the order of the Chief Counsel
imposing a penalty, often has gone beyond the boundaries of the
guidelines as warranted by particular evidence from or arguments of a
respondent. RSPA expects to publish revised guidelines annually.
II. Rulemaking Analyses and Notices
Executive Order 12866 and DOT Regulatory Policies and Procedures
This final rule is not considered a significant regulatory action
under section 3(f) of Executive Order 12866 and, therefore, was not
subject to review by the Office of Management and Budget. This rule is
not significant under the Regulatory Policies and Procedures of the
Department of Transportation (44 FR 11034). The economic impact of this
final rule is minimal to the extent that preparation of a regulatory
evaluation is not warranted.
Executive Order 12612
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 12612 (``Federalism''). The
Federal hazardous materials transportation law contains an express
preemption provision (49 U.S.C. 5125(b)(1)) that preempts State, local,
and Indian tribe requirements on certain covered subjects unless they
are ``substantively the same'' as the HMR. Covered subjects are:
(i) The designation, description, and classification of hazardous
materials;
(ii) The packing, repacking, handling, labeling, marking, and
placarding of hazardous materials;
(iii) The preparation, execution, and use of shipping documents
pertaining to hazardous materials and requirements respecting the
number, content, and placement of such documents;
(iv) The written notification, recording, and reporting of the
unintentional release in transportation of hazardous materials; or
(v) The design, manufacturing, fabrication, marking, maintenance,
reconditioning, repairing, or testing of a package or container which
is represented, marked, certified, or sold as qualified for use in the
transportation of hazardous materials. The Federal hazardous materials
transportation law (49 U.S.C. 5125(b)(2)), as amended, provides that if
DOT issues a regulation concerning any of the covered subjects after
November 16, 1990, DOT must determine and publish in the Federal
Register the effective date of Federal preemption. The effective date
may not be earlier than the 90th day following [[Page 12141]] the date
of issuance of the final rule and not later than two years after the
date of issuance. This final rule is an informational appendix and
imposes no requirements. Thus, preparation of a federalism assessment
is not warranted.
Regulatory Flexibility Act
I certify that this final rule will not have a significant economic
impact on a substantial number of small entities. This rule applies to
shippers and carriers of hazardous materials, some of which are small
entities; however, there is no economic impact.
Paperwork Reduction Act
There are no new information requirements in this final rule.
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 part 107 is amended as
follows:
PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES
1. The authority citation for part 107 continues to read as
follows:
Authority: 49 U.S.C. 5101-5127, 44701; 49 CFR 1.45 and 1.53.
2. Appendix A is added 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 used by the Office of
Hazardous Materials Safety (as of January 18, 1995) in making
initial baseline determinations for recommending civil penalties.
The first part of these guidelines is a list of baseline amounts or
ranges for probable violations frequently cited in enforcement
reports referred for action. Following the list of violations are
general guidelines used by OHMS in making initial penalty
determinations in enforcement cases.
II. List of Frequently Cited Violations
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Violation description Section or cite Baseline assessment
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Part 107--Requirements
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Failure to register as a carrier or shipper of 107.608............................. $1,500
hazardous material.
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Part 171--Requirements
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Failure to inform foreign shipper and U.S. 171.12(a)........................... 7,200
forwarding agent of 49 CFR requirements applying
to a shipment within the U.S.
Failure to file a DOT 5800.1 Hazardous Materials 171.16.............................. 3,100
Incident Report within 30 days following an
unintentional release of hazardous materials in
transportation.
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Part 172--Requirements
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Shipping Papers (Secs. 172.200-172.205):
Failure to execute a shipping paper for a 172.201............................. 5,200
shipment of hazardous materials.
Failure to follow one or more of the three 172.201(a)(1)....................... 1,200
approved formats for listing hazardous
materials on a shipping paper.
Failure to include a proper shipping name in 172.202............................. 1,850
the proper shipping description.
Failure to included a hazard class/division 172.202............................. 1,850
number in the proper shipping description.
Failure to include the identification number in 172.202............................. 1,200
the proper shipping description.
Using an incorrect identification number in the 172.202............................. 1,850
proper shipping description.
Using an incorrect identification number in the 172.202............................. 2,500
proper shipping description, that changes the
required response information.
Using a shipping description that is mostly 172.202............................. 1,000
correct, but includes extra or incorrect words.
Using a shipping description that includes 172.202............................. 850
additional unauthorized information.
Using a proper shipping description not in 172.202............................. 500
required sequence.
Using a shipping description that is missing 172.202............................. 3,100
two required elements.
Using a shipping description where more than 172.202............................. 4,300
two required elements are missing.
Using a shipping name and hazard class that is 172.202............................. 3,700
incorrect, such that the material is
misdescribed.
Using a shipping name and hazard class that is 172.202............................. 6,200
incorrect, such that a material is
misclassified.
Failure to include the total quantity of 172.202(c).......................... 430
hazardous material covered by a shipping
description.
The letters ``RQ'' are not used in the shipping 172.203(c)(2)....................... 500
description to identify materials that are
hazardous substances.
Failure to include a required technical name in 172.203(k).......................... 1,200
parentheses for a listed generic or ``n.o.s.''
material.
Failure to list an exemption number as part of 172.203(a).......................... 1,200
the required shipping description.
Failure to include the required shipper's 172.204(a).......................... 1,800
certification on a shipping paper.
Failure to execute the required shipper's 172.204............................. 1,000
certification on a shipping paper.
Emergency Response Information Requirements (Secs.
172.600-172.604):
Providing or listing incorrect emergency 172.602............................. 2,600
response information with or on a shipping
paper (if significant difference in response).
Providing or listing incorrect emergency 172.602............................. 1,300
response information with or on a shipping
paper (if no significant difference in
response).
Failure to include an emergency response 172.604............................. 2,600
telephone number on a shipping paper.
Failure to have the emergency response 172.604............................. 1,300
telephone number monitored while a hazardous
material is in transportation.
Listing a fraudulent emergency response 172.604............................. 3,700
telephone number on a shipping paper.
[[Page 12142]]
Listing an emergency response telephone number 172.604............................. 1,300
on a shipping paper that is not working or is
incorrect.
Failure to provide required technical 172.604............................. 2,600
information when the listed emergency response
telephone number is contacted.
Package Marking Requirements (Secs. 172.300-
172.338):
Failure to mark the required identification 172.301(a).......................... 1,200
number on a package.
Marking an incorrect identification number on a 172.301(a).......................... 1,850
package.
Marking an incorrect identification number on a 172.301(a).......................... 2,500
package that changes the appropriate emergency
response information.
Failure to mark the required shipping name on a 172.301(a).......................... 2,500
package.
Failure to mark the required shipping name and 172.301(a).......................... 4,200
identification number on a package.
Marking a package with an incorrect shipping 172.301(a).......................... 5,000
name and identification number.
Marking a package with an incorrect shipping 172.301(a).......................... 2,500
name and identification number that does not
affect emergency response information/actions.
Failure to include the required technical 172.301(c).......................... 1,200
name(s) in parentheses for a listed generic or
``n.o.s.'' entry.
Failure to mark a package containing liquid 172.312............................. 3,700
hazardous materials with required orientation
marks.
Failure to mark a package containing liquid 172.312............................. 4,200
hazardous materials with required orientation
marks, when inside packagings have vented
closures.
Package Labeling Requirements (Secs. 172.400-
172.450):
Failure to label a package, when required...... N/A................................. 4,300
Placing a label in a package when the label N/A................................. 5,000
represents a hazard other than the actual
hazard presented by the hazardous material in
the package.
Placing a label not conforming to size N/A................................. 1,000
requirements on a package.
Placing a label on a package that does not 172.401(a).......................... 1,300
contain a hazardous material.
Placing a label that does not meet color N/A................................. 600 to 2,500
specification requirements on a package.
Failure to place a required subsidiary label on N/A................................. 2,500
a package, when required.
Failure to provide an appropriate division N/A................................. 5,200
number on an explosive label.
Placarding Requirements (Secs. 172.500-172.560):
Failure to placard a freight container N/A................................. 500 to 7,500
containing hazardous materials.
Failure to properly placard a freight container 172.504............................. 8,650
containing Division 1.1, 1.2, or 1.3 (Class A
or B) explosives.
Training Requirements (Secs. 172.700-172.704):
Failure to train hazmat employees in the three 172.702............................. 1,500 to 25,000
required areas.
Failure to train hazmat employees in one of the 172.702............................. 500 and up
three required areas.
Failure to train hazmat employees in two of the 172.702............................. 1,000 and up
three required areas.
Failure to maintain training records........... 172.702............................. 500 and up
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Part 173--Requirements
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Overpack Requirements (Sec. 173.25):
Failure to mark an overpack with a statement 173.25(a)(4)........................ 3,100
indicating that the inside packages comply
with prescribed specifications when
specification packaging is required.
Reconditioner Requirements (Sec. 173.28):
Representing, marking, or certifying a drum as 173.28(m)(3)(ii)\1\................. 5,200 to 7,200
a reconditioned DOT packaging, when the drum
did not meet a DOT specification.
Marking an incorrect registration number on a 173.28(m)(3)(ii)\1\................. 1,550
reconditioned packaging.
Failure to properly conduct alternate leakage 173.28(m)(2)\1\..................... 5,000
test.
Representing, marking, or certifying a drum as 173.28(o)(1)\1\..................... 1,000
altered from one specification to another,
when the drum had not actually been altered.
IM Portable Tank Requirements (Sec. 173.32c):
Offering a hazardous material for 173.32c(a).......................... 5,200 to 7,200
transportation in an IM portable tank equipped
with bottom outlets, when the material
contained is prohibited from being offered in
this type of packaging.
Offering an IM portable tank for transportation 173.32c(c).......................... 5,000
that has not been visually inspected within
last 2\1/2\ years per 173.32b(b).
Offering an IM portable tank for transportation 173.32c(c).......................... 6,200
that has not been hydrostatically retested in
last five years per 173.32b(a).
Offering an IM portable tank for transportation 173.32c(c).......................... 12,500
that has not been visually or hydrostatically
tested as required, or failing to remove the
safety relief valves during testing.
Failure to provide the required outage for a 173.32c(k).......................... 15,500
shipment of hazardous materials, that results
in the release of hazardous materials.
Cylinder Retesters (Secs. 173.23, 173.34, and
173.302):
Failure to remark an aluminum exemption 173.23(c)........................... 2,100
cylinder as a DOT 3 AL.
Certifying or marking as retested a 173.34.............................. 5,200 to 7,200
nonspecification cylinder.
Marking a cylinder in or on the sidewall area 173.34(c)(1)........................ 8,650
when not permitted by the applicable
specification.
Failure to maintain legible markings on a 173.34(e)........................... 1,200
cylinder.
Failure to perform hydrostatic retesting at the 173.34(e)........................... 2,100 to 5,200
minimum of 5/3 times the service pressure, or
at the minimum specified test pressure.
Failure to perform visual external examination. 173.34(e)(1)........................ 3,100
[[Page 12143]]
Failure to perform visual internal examination. 173.34(e)(1)........................ 3,600
Failure to perform both visual external and 173.34(e)(1)........................ 4,200
visual internal examinations.
Inability to conduct a complete visual 173.34(e)(1)........................ 3,100
examination due to: excess paint build-up on a
cylinder; failure to remove banding; failure
to remove a permanent attachment; or failure
to remove a plastic attachment that has torn
or cracked.
Failure to have a retester's identification 173.34(e)(1)(i)..................... 3,600
number (RIN).
Failure to have current authority due to 173.34)e)(1)(i)..................... 2,500
failure to renew a retester's identification
number.
Failure to have a retester's identification 173.34(e)(1)(i)..................... 7,200
number and marking another RIN on a cylinder.
Marking a RIN before successfully completing a 173.34(e)(1)(ii).................... 3,100
hydrostatic retest..
Marking a cylinder as having been retested 173.34(e)(1)(ii).................... 8,650
without performing retest.
Performing hydrostatic retesting without 173.34(e)(3)........................ 2,100 to 5,200
demonstrating the accuracy of the testing
equipment.
Failure to hold hydrostatic test pressure for 173.34(e)(3)........................ 3,100
30 seconds or sufficiently longer to allow for
complete expansion.
Failure to perform a second retest, after 173.34(e)(3)........................ 3,100
equipment failure, at a pressure of 10% more
or 100 psi more, whichever is less.
Exceeding 90% of test pressure prior to 173.34(e)(3)........................ 850
conducting test.
Failure to condemn a cylinder with permanent 173.34(e)(4)........................ 6,000
expansion of 10% or greater (5% for certain
exemption cylinders); failure to condemn
cylinders with evidence of internal or
external corrosion, denting, bulging, or rough
usage.
Marking an FRP cylinder with steel stamps in Applicable Exemption................ 8,650
the FRP area of the cylinder such that the
integrity of the cylinder is compromised.
Failure to keep records of cylinder 173.34(e)(5)........................ 4,200
reinspection and retest.
Failure to keep accurate records of cylinder 173.34(e)(5)........................ 1,000 to 3,100
reinspection and retest.
Improper marking of the RIN or retest date on a 173.34(e)5)......................... 1,550
cylinder.
Marking a DOT 3HT cylinder with a steel stamp 173.34(e)(13)(iv)................... 5,200 and up
other than a low-stress steel stamp.
Marking a ``+'' sign on a cylinder without 173.302(c)(3)....................... 3,000 to 4,300
determining the average or maximum wall stress.
Representing, marking, or certifying a cylinder N/A................................. 4,300 to 6,000
as meeting the requirements of an exemption,
when the cylinder was not maintained or
retested in accordance with the exemption.
Rebuilder Requirements (Sec. 173.34):
Representing a DOT-4 series cylinder as meeting 173.34(l)........................... 7,200
the requirements of the Hazardous Materials
Regulations without being authorized to do so
by the Associate Administrator for Hazardous
Materials Safety.
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Part 178--Requirements
----------------------------------------------------------------------------------------------------------------
Third-Party Packaging Certifiers (General):
With testing completed, TPPC's certification N/A................................. 2,100
directs manufacturer to improperly mark a
packaging (e.g., steel drum to be marked UN
4G).
Manufacturers (General):
Failure to conduct drop testing from required N/A................................. 4,200
distance.
Manufacturing, marking, certifying, or selling N/A................................. 5,200 to 8,650
a package marked to a specification, UN
standard, or an exemption when applicable
requirements are not met.
Certifying a packaging as meeting a UN standard N/A................................. 6,000 to 10,800
when design qualification testing was not
performed.
Failure to conduct periodic testing on UN N/A................................. 5,000 to 8,650
standard packaging.
Failure to properly conduct design N/A................................. 4,200
qualification or periodic retesting for UN
standard packaging.
Marking, or causing the marking of, a packaging N/A................................. 7,200
with the symbol of a manufacturer or packaging
certifier other than the company that actually
manufactured or certified the packaging.
Failure to keep and maintain records of design 178.601(k)(1)....................... 4,200
qualification testing.
Failure to keep and maintain records of 178.601(k)(2)....................... 4,200
periodic retest.
Manufacturing DOT specification packaging after N/A................................. 3,000 and up
October 1, 1994.
Manufacturer Requirements--Fiberboard Boxes:
Manufacturing, marking, certifying, or selling N/A................................. 4,300 to 7,200
a package marked to a specification, UN
standard, or an exemption when applicable
requirements are not met.
Certifying packaging as meeting UN 4G standard N/A................................. 4,300
when it was not properly conditioned before
design qualification testing.
Failure to properly mark a fiberboard box...... N/A................................. 1,200
Manufacturing Requirements--UN 1H1 Drums:
Failure to properly conduct alternate N/A................................. 4,200
leakproofness test.
Manufacturing Requirements--DOT High-Pressure
Cylinders:
Manufacturing, representing, marking, N/A................................. 6,000 to 10,800
certifying, or selling a DOT high-pressure
cylinder that was not inspected and verified
by an approved independent inspection agency.
Manufacturing Requirements--Spec. DOT 39 Cylinders:
Failure to have a registration number/failure N/A................................. 3,700
to mark it on the cylinder.
Marking another company's number on a cylinder. N/A................................. 5,000
[[Page 12144]]
Failure to mark the date of manufacture or lot N/A................................. 3,100
number on a cylinder.
Failure to have a chemical analysis performed N/A................................. 5,000
in the U.S. for a material manufactured
outside the U.S./failure to obtain a chemical
analysis from the foreign manufacturer.
Failure to conduct a complete visual internal N/A................................. 3,500 to 5,200
examination.
Failure to conduct a flattening test........... N/A................................. 5,200
Failure to conduct a burst test................ N/A................................. 5,200
Failure to properly conduct required test...... N/A................................. 4,200
Failure to maintain a required inspector's N/A................................. 5,200
report.
Failure to maintain an accurate inspector's N/A................................. 1,200 to 3,700
report.
Manufacturing Requirements--DOT 4B Cylinders:
Failure to conduct a hydrostatic test by water 178.50-14........................... 5,200
jacket method on one cylinder out of each lot
of 200 or less.
Failure to conduct a flattening test........... 178.50-15........................... 5,200
Failure to conduct physical testing............ 178.50-16........................... 5,200
Failure to properly conduct required test...... N/A................................. 4,200
Failure to maintain the required Inspector's N/A................................. 5,200
report.
Failure to maintain an accurate Inspector's N/A................................. 1,200 to 3,700
report.
Manufacturing Requirements--Steel Drums:
Failure to pass testing conducted in plant..... N/A................................. 5,200 and up
Failure to properly conduct ``solution over N/A................................. 3,500 to 5,000
partial seams'' test.
Failure to retain chime cuts when conducting N/A................................. 3,100
``solution over partial seams'' testing.
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Other Requirements
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Offeror Requirements (General):
Offering a hazardous material for N/A................................. 5,200 to 8,650
transportation in an unauthorized,
nonspecification, or nonstandard packaging.
Offering a hazardous material for N/A................................. 4,300
transportation in an unauthorized,
nonstandard, or nonspecification inner package.
Offering a hazardous material for N/A................................. 10,400
transportation in a packaging that leaks
during conditions normally incident to
transportation.
Offering a hazardous material for N/A................................. 5,200 to 8,650
transportation that is covered by an
exemption, without complying with its terms.
Offering a hazardous material for 171.14.............................. 3,000 and up
transportation in a packaging marked as
manufactured to a DOT specification where that
packaging was manufactured after October 1,
1994.
Offeror requirements (Class 1 (Explosives)):
Failing to mark the ``EX'' approval number on a 172.320............................. 1,200
package containing an explosive.
Offering an unapproved explosive for 173.54(a) and 173.56(b)............. 10,000 to 25,000
transportation.
Offering a leaking or damaged package of 173.54(c)........................... 10,000 to 25,000
explosives for transportation.
Offering a Division 1.3 (Class B) explosive for N/A................................. 8,400 and up
transportation that is misclassified as
Division 1.4 (Class C) explosive.
Offeror Requirements (Class 3 (Flammable Liquid)):
Using an incorrect marking for the flashpoint 173.118(b)\1\....................... 1,000
in order to be excepted from specification
packaging, for a flammable liquid with a flash
point of 73 deg. Fahrenheit or higher.
Offering a flammable liquid with a flash point 173.119(a)(3)\1\.................... 6,200
below 20 deg. Fahrenheit for transportation in
an unauthorized DOT 17E drum (20/18-gauge v.
18-gauge).
Offering a flammable liquid with a flash point N/A................................. 3,600 to 5,200
of 73 deg. Fahrenheit or above in
nonspecification packaging, without marking
the flash point or an indication that it was
at or above 73 deg. Fahrenheit on the
packaging.
Offeror Requirements (Division 6.1 (Poisonous
Liquids)):
Offering a poisonous liquid for transportation 173.346(a)(26)\1\................... 5,200
in a DOT 12A fiberboard box that was tested as
required by Sec. 178.210-10.
Offeror Requirements (Class 7 (Radioactive
Materials)):
Failure to have a valid U.S. NRC approval 173.415(c).......................... 4,300
certificate authorizing the use of a packaging
as Type B (never having obtained one).
Failure to have a valid U.S. NRC approval 173.415(c).......................... 3,500 and up
certificate authorizing the use of a packaging
as Type B (previously had one, but now
expired).
Offeror Requirements (Portable or IM Tanks):
Offering a hazardous material for 173.32(e)(1)(ii).................... 6,200
transportation in a DOT 57 or exemption
portable tank that is out of test.
Offering a compressed gas for transportation in 173.32(e)(l)(i) 173.315(a).......... 5,200 to 8,650
a DOT 51 portable tank that is out of test
(may be higher if offeror is also owner and
portable tank has not been tested at all, or
not for a long time).
Offeror Requirements (Cylinders):
Offering a compressed gas for transportation in 173.301(c).......................... 5,200 to 8,650
a cylinder that is out of test (may be higher
if offeror is also owner and cylinder has not
been retested at all, or not for a long time.
Failure to check each day the pressure of a 173.303(d).......................... 4,200
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 at least 30 days.
[[Page 12145]]
Offering a mixture of a non-hazardous material 173.1200(a)(ii)(E).................. 6,200
and a compressed gas as an ORM-D without
properly determining the internal pressure at
equilibrium in a water bath heated to 130 deg.
Fahrenheit.
Carrier Requirements:
Transporting railway track torpedoes outside of N/A................................. 6,000
flagging kits, in violation of E-7991.
Transporting explosives in a motor vehicle 177.835(i).......................... 5,200
containing metal or other articles or
materials likely to damage such 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 such damage.
Exemptions:
Requested renewal of an exemption prior to N/A................................. 2,500
expiration, but shipped after expiration.
Offered or transported a packaging or otherwise N/A................................. 2,900
performed a function covered by an exemption
after an exemption had expired (less than one
year).
Offered or transported a packaging or otherwise N/A................................. 3,600 to 7,200
performed a function covered by an exemption
after an exemption had expired (more than one
year).
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\1\Cite refers to provisions in effect September 30, 1991 (see 49 CFR Part 173, revised as of October 1, 1990).
III. Consideration of Statutory Criteria
A. These guidelines are used by the Office of Hazardous
Materials Safety (OHMS) in setting initial proposed penalties for
hazmat violations. They indicate baseline amounts or ranges for
probable violations frequently cited in enforcement reports and set
forth general OHMS policy for considering statutory criteria.
B. The initial baseline determination partially considers the
nature, extent, circumstances, and gravity of the alleged violation.
That determination then is adjusted to consider all other evidence
concerning the nature, extent, circumstances, and gravity of the
alleged violation; degree of culpability; history of prior
violations; ability to pay; effect of the penalty on ability to
continue to do business; and such other matters as justice may
require (a major component of which is corrective action taken by a
respondent to prevent a recurrence of similar violations). In making
a penalty recommendation, the baseline or range may be increased or
decreased on the basis of evidence pertaining to these factors.
C. The following miscellaneous factors are used to implement one
or more of the statutory assessment criteria.
IV. Miscellaneous Factors Affecting Penalty Amounts
A. Corrective Action
1. A proposed penalty is mitigated for documented corrective
action of alleged violations taken by a respondent. Corrective
action may occur: (1) After an inspection and before a Notice of
Probable Violation (NOPV) is issued; (2) on receipt of an NOPV; or
(3) after receipt of an NOPV (possibly after it is solicited by an
RSPA attorney). In general, corrective action may reduce a penalty
up to 25%. Mitigation may be taken into account in the referral memo
or may be recommended prior to issuance of an Order by RSPA's Chief
Counsel.
2. The two primary factors in determining the penalty reduction
are extent and timing of the corrective action. In other words,
mitigation will be determined on the basis of how much corrective
action was taken and when it was taken. Systemic action to prevent
future violations is given greater consideration than action simply
to remedy violations identified during the inspection.
3. Mitigation is applied to individual violations. 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.
B. Respondents That Re-Ship
A shipper that reships materials received from another company,
in the same packaging and without opening or altering the package,
independently is responsible for ensuring that the shipment complies
with Federal hazmat law, and independently may be subject to
enforcement action if the package does not comply. Nevertheless, the
reshipper is considered to have a lesser level of responsibility for
compliance in those respects in which it reasonably relies on the
compliance of the package as received. In most cases of this type,
OHMS will discount the applicable baseline standard by about 25%.
The specific knowledge and expertise of all parties must be
considered in discounting for reliance on a prior shipper. This
discount is applied before any consideration of mitigation based on
corrective action.
C. Penalty Increases for Multiple Counts
Under the Federal hazmat law, 49 U.S.C. 5213(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 of up to $25,000. Absent aggravating
factors, OHMS, in its exercise of discretion, ordinarily will apply
a single penalty for multiple counts or days of violation. In a
number of cases, particularly those involving shippers, an inspector
may cite two or more similar packaging violations for different
hazardous materials. For example, the inspector may cite the same
marking violation for two or more packages. OHMS usually will
consider those additional violations as counts of the same violation
and will not recommend multiples of the same baseline penalty.
Rather, OHMS usually will recommend the baseline penalty for a
single violation, increased by 25% for each additional violation.
D. Financial Considerations
1. Mitigation is appropriate when the baseline penalty would (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 the
violation(s). Beyond the overall financial size of the respondent's
business, the relevant items of information on a respondent's
balance sheet include the current ratio (current assets to current
liabilities), the nature of current assets, and net worth (total
assets minus total liabilities).
2. These figures are considered on a case-by-case basis. In
general, however, a current ratio close to or below 1.0 means that
the company may have difficulty in paying a large penalty, and may
justify reduction of the penalty or an installment payment plan. A
small amount of cash on hand representing limited liquidity, even
with substantial other current assets (such as accounts receivable
or inventory), may warrant a short-term payment plan. Respondent's
income statement also will be reviewed to determine whether a
payment plan is appropriate.
3. Many companies are able to continue in business for extended
periods of time with a small or negative net worth, and 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.
4. In general, an installment payment plan may be justified
where reduction of a proposed penalty is not, but the
appropriateness of either (or both) will depend on the circumstances
of the case. The length of a payment plan should be as short as
possible, but the plan may consider seasonal fluctuations in a
company's income if the company's business is seasonal (e.g.,
swimming pool chemical sales, fireworks sales) or if the company has
documented specific reasons for current non-liquidity.
5. Evidence of financial condition is used only to decrease a
penalty, and not to increase it. [[Page 12146]]
E. Penalty Increases for Prior Violations
1. The baseline penalty presumes an absence of prior violations.
If prior violations exist, generally they will serve to increase a
proposed penalty. The general standard for increasing a baseline
proposed penalty on the basis of prior violations is as follows:
a. One prior case--25% increase over the pre-mitigation recommended
penalty
b. Two prior cases--50% increase over the pre-mitigation recommended
penalty
c. Three prior cases--75% increase over the pre-mitigation
recommended penalty
d. Four or more prior cases--100% increase over the pre-mitigation
recommended penalty
2. A case of prior violations closed more than five years
previously normally will not be considered in determining a proposed
penalty.
F. Penalty Increases for Use of Expired Exemptions
Adjustments to the base line figures for use of expired
exemptions can be made depending on how much material has been
shipped during the period between the expiration date and the
renewal date. If the company previously has been found to have
operated under an expired exemption, the penalty is normally
doubled. If the company has been previously cited for other
violations, the penalty generally will be increased by about 25%.
Issued in Washington, DC on February 27, 1995 under authority
delegated in 49 CFR part 1.
Ana Sol Gutierrez,
Deputy Administrator, Research and Special Programs Administration.
[FR Doc. 95-5179 Filed 3-3-95; 8:45 am]
BILLING CODE 4910-60-P