[Federal Register Volume 79, Number 152 (Thursday, August 7, 2014)]
[Rules and Regulations]
[Pages 46194-46200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18617]
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DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration
49 CFR Parts 107 and 109
[Docket No. PHMSA-2012-0258 (HM-258A)]
RIN 2137-AE97
Hazardous Materials: Failure To Pay Civil Penalties
AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.
ACTION: Final rule.
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SUMMARY: PHMSA is amending its hazardous materials procedural
regulations. Specifically, this final rule prohibits a person who fails
to pay a civil penalty as ordered, or fails to abide by a payment
agreement, from performing activities regulated by the Hazardous
Materials Regulations until payment is made.
DATES: This final rule is effective September 8, 2014.
FOR FURTHER INFORMATION CONTACT: Tyler Patterson, Office of Chief
Counsel, telephone (202) 366-0505, Pipeline and Hazardous Materials
Safety Administration, U.S. Department of Transportation, 1200 New
Jersey Ave. SE., Washington, DC 20590-0001.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Overview of Penalty Procedures
A. Pipeline and Hazardous Materials Safety Administration
B. Federal Aviation Administration
C. Federal Motor Carrier Safety Administration
D. Federal Railroad Administration
II. Overview of Mandated Changes to the Penalty Procedures
III. Discussion of the Comments on the Notice of Proposed Rulemaking
IV. Summary of the Final Rule
V. Regulatory Analyses and Notices
A. Statutory/Legal Authority for This Rulemaking
B. Executive Order 12866, Executive Order 13610, Executive Order
13563, and DOT Regulatory Policies and Procedures
C. Executive Order 13132
D. Executive Order 13175
E. Regulatory Flexibility Act, Executive Order 13272, and DOT
Policies and Procedures
F. Paperwork Reduction Act
G. Regulatory Identifier Number (RIN)
H. Unfunded Mandates Reform Act
I. Executive Order 13609 and International Trade Analysis
J. Environmental Assessment
K. Privacy Act
I. Overview of Penalty Procedures
Under authority delegated by the Secretary, four agencies within
the Department of Transportation (DOT) enforce the Hazardous Materials
Regulations (HMR), 49 CFR Parts 171-180, and other regulations,
approvals, special permits, and orders issued under Federal Hazardous
Material Transportation Law (Hazmat Law), 49 U.S.C. 5101 et seq.; the
Federal Aviation Administration (FAA), 49 CFR 1.83(d); the Federal
Motor Carrier Safety Administration (FMCSA), 49 CFR 1.87(d); the
Federal Railroad Administration (FRA), 49 CFR 1.89(j); and the Pipeline
and Hazardous Materials Safety Administration (PHMSA), 49 CFR 1.97(b).
Although the United States Coast Guard (USCG) also is authorized to
enforce the HMR in connection with certain transportation or shipment
of hazardous materials by vessel, nothing in this rule affects USCG's
enforcement authority with respect to transportation of hazardous
materials by water. The authority originated with the Secretary and was
first delegated to USCG prior to 2003, when USCG was made part of the
Department of Homeland Security. Enforcement authority over ``bulk
transportation of hazardous materials that are loaded or carried on
board a vessel without benefit of containers or labels, and received
and handled by the vessel without mark or count, and regulations and
exemptions governing ship's stores and supplies'' was also transferred
in 2003 to the USCG. DHS Delegation No. 0170, Sec. 2(99) & 2(100); see
also 6 U.S.C. 457 and 551(d)(2). DOT will continue to coordinate its
inspections, investigations, and enforcement actions with the USCG
through a Memorandum of Understanding (MOU) or otherwise, to avoid
duplicative or conflicting efforts.
The rules of practice for hazardous materials penalty proceedings
are governed by each agency's delegated regulatory authority. Each
agency affected by this final rule will have the authority to apply
these provisions as an augmentation of its current enforcement and debt
collection practices after an enforcement action has been fully
adjudicated and the entity ordered to pay a penalty has failed to do
so.
A. Pipeline and Hazardous Materials Safety Administration
PHMSA's enforcement procedures related to violation(s) of the HMR
are described in 49 CFR Part 107, Subpart D. Violations that do not
substantially impact safety are handled through the
[[Page 46195]]
ticket process under 49 CFR 107.310 and would be exempt from this final
rule. For other hazardous materials violations, PHMSA begins the
process of assessing civil penalties by serving a notice of probable
violation (NOPV) on a person alleging the violation of hazardous
materials operations.
As directed in 49 CFR 107.311, the NOPV must include the following
information: (1) A citation of the provision(s) of the HMR, order, or
special permit that PHMSA believes the respondent has violated, (2) a
statement of the factual allegations upon which the demand for remedial
action or civil penalty is based, (3) a statement of the respondent's
right to present written or oral explanations, information, and
arguments in answer to the allegations and in mitigation of the
sanction sought in the notice of probable violation, (4) a statement of
the respondent's right to request a hearing and the procedures for
requesting a hearing, and (5) the proposed civil penalty and payment
information. Once the matter is fully adjudicated or a settlement is
reached, PHMSA issues an order. Orders outline the terms and outcome of
the enforcement action, including the final penalty amount due, and
they describe any payment arrangements made between the agency and the
respondent. This final rule affects only those respondents who violate
the payment terms of an order.
B. Federal Aviation Administration
FAA's enforcement procedures related to the violation(s) of the HMR
are described in 14 CFR Part 13. FAA begins the process of assessing
civil penalties by issuing a notice of proposed civil penalty as
described in 14 CFR 13.16(f). Once the matter is fully adjudicated or a
settlement is reached, the FAA issues an order assessing a civil
penalty and establishing payment terms. This final rule affects only
those respondents who violate the payment terms of an order (for
violations of the HMR) issued under 14 CFR 13.16(c).
C. Federal Motor Carrier Safety Administration
FMCSA's enforcement procedures related to violation(s) of the HMR
or the Federal Motor Carrier Safety Regulations (FMCSR; 49 CFR Part
397) are described in 49 CFR Part 386. FMCSA begins the process of
assessing civil penalties by issuing a notice of claim (NOC), as
described in 49 CFR 386.11(c). Each NOC sets forth the following
information: (1) The facts alleged; (2) the provisions of the
regulations allegedly violated by the respondent; (3) a proposed civil
penalty; and (4) indicates the time, form, and manner whereby the
respondent may pay, contest, or otherwise seek resolution of the claim.
Once the matter is fully adjudicated or a settlement is reached, FMCSA
issues a final agency order. The order sets the payment terms and final
penalty amount. This final rule affects only those respondents who
violate the payment terms of an order (for violations of the HMR)
issued under 49 CFR Part 386.
D. Federal Railroad Administration
FRA's enforcement procedures related to violations of the HMR are
described in 49 CFR Part 209, Subpart B. FRA begins the process of
assessing civil penalties by issuing an NOPV. The NOPV includes the
following information: (1) A statement of the provisions that the
respondent is believed to have violated and (2) notice of the amount of
the civil penalty proposed to be assessed. With each NOPV, FRA also
provides a violation report detailing the factual allegations and a
description of the response options available to the respondent. Once
the matter is fully adjudicated or a settlement is reached, FRA issues
an order setting the payment terms of the assessed penalty, if
applicable. This final rule affects only those persons who violate the
payment terms of an order (for violations of the HMR) issued under 49
CFR Part 209, Subpart B.
II. Overview of Mandated Changes to the Penalty Procedures
Section 33010 of the Moving Ahead for Progress in the 21st Century
Act (MAP-21) (Pub. L. 112-141, 126 Stat. 405, at 837) amended 49 U.S.C.
5123 to prohibit a person from engaging in business operations
involving the transportation of hazardous materials (i.e., hazardous
materials operations) if that person has failed to either pay a civil
penalty assessed under Chapter 51 of title 49, or failed to arrange and
abide by a payment plan, beginning on the 91st day after the payment
due date specified by the order or payment plan, unless the person has
filed a formal administrative or judicial appeal of the penalty.
Section 33010 of MAP-21 provides an exception to the prohibition on
hazardous materials operations after nonpayment of penalties for
debtors in Chapter 11 bankruptcy. The express language of the statutory
exception states that the prohibition ``shall not apply to any person
who is unable to pay a civil penalty because such person is a debtor in
a case under chapter 11 of title 11.'' PHMSA believes that the
Congress, in creating the bankruptcy exception, did not intend to
exempt all Chapter 11 debtors from the prohibition on hazardous
materials operations after nonpayment of penalties. Congress recognized
that the determination of whether a Chapter 11 debtor is able to pay
certain debts is within the jurisdiction of the bankruptcy court. PHMSA
interprets the statutory language as requiring the agency to seek a
determination from the bankruptcy court of a debtor's ability to pay a
civil penalty claim prior to imposing the prohibition on hazardous
materials operations after nonpayment of penalties.
Under the automatic stay provisions of the Bankruptcy Code, a
petition filed in bankruptcy ``operates as a stay, applicable to all
entities of . . . the commencement or continuation . . . of a judicial,
administrative, or other action or proceeding against the debtor that
was or could have been commenced before the commencement of the
bankruptcy case . . .'' 11 U.S.C. 362(a). However, ``the filing of a
petition . . . does not operate as a stay . . . of the commencement or
continuation of an action or proceeding by a governmental unit to
enforce such governmental unit's police or regulatory power . . . and .
. . of the enforcement of a judgment, other than a monetary judgment,
obtained in an action or proceeding by a governmental unit to enforce
such unit's police or regulatory power.'' 11 U.S.C. 362(b)(4).
In determining whether an agency action fits within the exemption
of section 362(b)(4), the courts have developed the ``public policy''
test, which distinguishes between governmental proceedings aimed at
accomplishing public policy and those aimed at protecting the
government's pecuniary interest in the debtor's property. See Eddleman
v. U.S. Department of Labor, 923 F. 2d 782 (10th Cir. 1991); and NLRB
v. Edward Cooper Painting, Inc., 804 F. 2d 934 (6th Cir. 1986). Agency
proceedings under section 33010 of MAP-21 are designed to bring about
the public policy of enforcing compliance with the Hazmat Law and the
HMR. As a result, filing for bankruptcy protection under Chapter 11 or
any other chapter does not automatically relieve a person from its
regulatory or payment obligations.
Section 33010 of MAP-21 does not address or instruct DOT to
prohibit hazardous materials operations by those persons who have not
paid penalties assessed prior to the granting of this authority.
Without specific instruction on retroactivity, the presumption against
retroactive application prevents PHMSA from applying section 33010
[[Page 46196]]
MAP-21 to a respondent whose final order was issued prior to the
issuance of a final rule. Consequently, provisions of this final rule
will apply to all final agency orders that assess penalties issued on
or after the effective date of the final rule--September 8, 2014.
III. Discussion of the Comments on the Notice of Proposed Rulemaking
On September 24, 2013, PHMSA published a notice of proposed
rulemaking (NPRM) proposing regulations implementing this authority. We
received comments from Eric Danko (PHMSA-2012-0258-0003), from the
Association of American Railroads (AAR) and the American Short Line and
Regional Railroad Association (ASLRRA) (PHMSA-2012-0258-0002), and from
the Reusable Industrial Packaging Association (RIPA) (PHMSA-2012-0258-
0004). In this section, we summarize and discuss each of these
comments. You may access the docket and the comments and other
documents in this rulemaking by visiting the Federal eRulemaking Portal
at http://www.regulations.gov, under Docket No. PHMSA-2012-0258 (HM-
258A).
Mr. Eric Danko
Mr. Danko expressed his support for the proposed rule stating that
``if persons dealing with HAZMAT are allowed to continue operating
indefinitely despite being penalized for regulatory violations, there
is little drive to change procedures to increase safety.'' Mr. Danko
also stated that the exceptions for Chapter 11 bankruptcy and
administrative or judicial appeals are reasonable.
Association of American Railroads and the American Short Line and
Regional Railroad Association
The AAR and ASLRRA assert that PHMSA exceeds the scope of the MAP-
21 mandate by ``constraining the right of the respondent to both
judicial and administrative review'' of a Cessation of Operations Order
(COO). They state that proof that the respondent has filed in a Federal
Circuit Court for relief from a final agency action is sufficient
enough to prevent a COO from taking effect and that the respondent
should not need an Emergency Stay order to halt the COO. They request
that PHMSA delete the proposed language for 49 CFR 109.101(d) in its
entirety and add language to 49 CFR 109.101, which states that proof of
appeal of the COO is enough to stay the order.
We disagree that we have exceeded the scope of the MAP-21 mandate.
The COO can be issued only after all rights of appeal for the penalty
have been exhausted or waived by the respondent. If the respondent has
filed for relief from a final agency order assessing a penalty, whether
administratively or judicially, the obligation to pay that penalty is
stayed pending the outcome of the administrative or judicial review. A
final agency order typically assigns a payment due date for 30 days
after receipt of the order, unless other payment arrangements have been
agreed upon between the parties. A respondent has 60 days to file for
judicial review. The notice of the COO is not issued until 45 days
after the first payment is due. That date would generally fall 75 days
after receipt of the final agency order. Therefore, a COO would never
be issued in cases where a respondent has exercised its right of appeal
of the underlying penalty.
In cases where all rights of appeal for the underlying penalty have
been exhausted or waived and the COO has been timely issued, the
respondent may still file for a judicial stay before the COO takes
effect. If the court determines that such a stay is merited, it will
issue the stay and the COO's effective date will be halted. We think it
is important to reiterate that the right of review of the COO is not an
invitation to revisit the substance of the underlying circumstances
that led to the penalty assessment. The procedures for exercising the
right of review established by this final rule are restricted to the
COO only. The rights of appeal and review for the penalty assessment in
the final agency order are not changed by this rule. Based on the
foregoing, we are not adopting the changes proposed by the AAR and
ASLRRA.
Reusable Industrial Packaging Association
The RIPA asserts that ``failure to make a payment should not in
isolation trigger a COO.'' It argues that a facility that otherwise has
been brought into full compliance with the HMR and can demonstrate to
the agency's satisfaction that extenuating circumstances have led to a
facility's inability to pay the penalty should be granted an extension
for payment.
This rule allows agency discretion in re-negotiating a payment plan
with a respondent who has failed to abide by the original payment terms
of the final agency order. We believe that this discretion is
sufficient to address extenuating circumstances. The RIPA also
indicates that, in its estimation, the 90-day time frame between a
missed payment and an order to cease hazmat operations is too brief and
recommends that PHMSA reconsider its position. We disagree that 90 days
is too brief and are statutorily mandated to impose the 90-day time
frame under MAP-21.
Finally, the RIPA also asks PHMSA to consider the option of ``no-
action'' in response to the Congressional mandate to issue this
rulemaking. Upon adoption of the new authority, each modal agency would
have the discretion to implement the authority or not as it sees fit.
As noted in the NPRM, PHMSA believes allowing delinquent adjudicated
violators to continue to engage in regulated activities while showing
disregard for regulations and/or regulatory enforcement orders would
weaken DOT's ability to ensure compliance with the HMR. Taking no
action would be inconsistent with Congress' direction and undesirable
from the standpoint of safety and enforcement. Failure to implement the
new authority would substantially impact safety because entities that
ignore assessed civil penalties for violations of the HMR would
continue to conduct hazardous materials operations.
IV. Summary of the Final Rule
This final rule amends 49 CFR Part 109 to implement the authority
granted under section 33010 of MAP-21's amendment to 49 U.S.C. 5123.
Specifically, that statute prohibits a person from engaging in
regulated hazardous materials operations upon failure to pay a civil
penalty and mandates that the Secretary issue a rule setting forth the
procedures requiring a person delinquent in paying a civil penalty to
cease regulated activity until payment is made. In response, in this
rule, we adopt a new Subpart E to Part 109 setting forth procedures to
require a person who is delinquent in paying civil penalties to cease
regulated hazardous materials operations until payment has been made or
an acceptable payment plan has been arranged. We also add procedural
requirements to ensure that a person subject to the prohibition is
notified in writing and given an opportunity to respond before being
required to cease hazardous materials operations.
Under the provisions of this final rule, the agency that issued the
final order outlining the terms and outcome of an enforcement action
will send the respondent a COO if payment has not been received within
45 calendar days after the payment due date or a payment plan
installment date as specified in the final order. The COO would notify
the respondent that it must cease hazardous materials operations on the
91st calendar day after failing to make payment in accordance with the
[[Page 46197]]
agency's final order or payment plan arrangement, unless payment is
made. A respondent will be allowed to appeal the COO within 20 days of
receipt of the order according to the procedures set forth by the
agency issuing the COO.
As discussed above, section 33010 of MAP-21 specifically states
that the prohibition on hazardous materials operations shall not apply
to a person unable to pay civil penalties because such person is a
debtor in a case under Chapter 11 of the Bankruptcy Code. Such a person
must provide the enforcing agency with the following information about
its bankruptcy proceeding: (1) The chapter of the Bankruptcy Code under
which the bankruptcy proceeding is filed (i.e., Chapter 7 or 11); (2)
the bankruptcy case number; (3) the court in which the bankruptcy
proceeding was filed; and (4) any other information requested by the
agency to determine a debtor's bankruptcy status. This information will
enable the agency to verify debtor status and to work with the
bankruptcy court, if needed, to assess the debtor's ability to pay
penalties when determining whether to prohibit hazardous materials
operations.
PHMSA, FAA, FMCSA, and FRA caution regulated entities not to
construe the right to appeal a COO as an opportunity to re-argue the
merits of the penalty assessment. Regulated entities have had ample
opportunity to address the merits of any proposed penalty assessment at
earlier stages in the enforcement process. The only information
sufficient to prevent the prohibition on hazardous material operations
after nonpayment of penalties would be proof of payment, proof of
bankruptcy debtor status and an inability to pay, or an Emergency Stay
issued by a Federal District Court with jurisdiction over these
matters. Additionally, at the discretion of the agency, upon appeal by
the respondent, the agency can rescind the COO if an agreeable payment
plan has been arranged. Persons that continue to conduct regulated
activities in violation of the COO will be subject to additional
penalties, including criminal prosecution pursuant to 49 U.S.C. 5124.
V. Regulatory Analyses and Notices
A. Statutory/Legal Authority for This Rulemaking
This final rule is published under the authority of 49 U.S.C.
5103(b), which authorizes the Secretary to prescribe regulations for
the safe transportation, including security, of hazardous material in
intrastate, interstate, and foreign commerce and under the authority of
49 U.S.C. 5121(e). This final rule would revise certain civil
enforcement authority to enable the appropriate DOT administration to
issue a Cessation of Operations Order (COO) to a person who fails to
pay civil penalties for violations of the HMR and other regulations,
approvals, special permits, and orders issued under Federal Hazardous
Material Transportation Law (Hazmat Law), 49 U.S.C. 5101 et seq.
assessed pursuant to 49 CFR 107.311 (PHMSA), 14 CFR Part 13 (FAA), 49
CFR Part 386 (FMCSA), and 49 CFR Part 209, Subpart B (FRA). The final
rule carries out a statutory mandate and clarifies DOT's roles and
responsibilities in ensuring that hazardous materials are being safely
transported and in enhancing the regulated community's compliance with
regulatory requirements.
B. Executive Order 12866, Executive Order 13610, Executive Order 13563,
and DOT Regulatory Policies and Procedures
This final rule is not considered a significant regulatory action
under section 3(f) Executive Order 12866 and, therefore, was not
reviewed by the Office of Management and Budget (OMB). The final rule
is not considered a significant rule under the Regulatory Policies and
Procedures order issued by the U.S. Department of Transportation (44 FR
11034).
Executive Order 13610, issued May 10, 2012, urges agencies to
conduct retrospective analyses of existing rules to examine whether
they remain justified and whether they should be modified or
streamlined in light of changed circumstances, including the rise of
new technologies.
Executive Order 13563 is supplemental to and reaffirms the
principles, structures, and definitions governing regulatory review
that were established in Executive Order 12866 Regulatory Planning and
Review of September 30, 1993. Executive Order 13563, issued January 18,
2011, notes that our nation's current regulatory system must not only
protect public health, welfare, safety, and our environment but also
promote economic growth, innovation, competitiveness, and job creation.
Further, this executive order urges government agencies to consider
regulatory approaches that reduce burdens and maintain flexibility and
freedom of choice for the public. In addition, federal agencies are
asked to periodically review existing significant regulations,
retrospectively analyze rules that may be outmoded, ineffective,
insufficient, or excessively burdensome, and modify, streamline,
expand, or repeal regulatory requirements in accordance with what has
been learned.
By building off of each other, these three Executive Orders require
agencies to regulate in the ``most cost-effective manner,'' to make a
``reasoned determination that the benefits of the intended regulation
justify its costs,'' and to develop regulations that ``impose the least
burden on society.'' PHMSA is making no changes to the HMR that govern
the transportation of hazmat, thus the changes do not carry any
additional compliance requirements or costs for entities that must
comply with the HMR. The changes in this rule will affect entities
after they have violated the HMR in ways that substantially impact
safety, a civil penalty has been assessed, and the entities are
delinquent in the payment of the finally adjudicated administrative
penalties. Of the estimated 200,000 entities that PHMSA regulates, a
limited number are subject to civil penalty assessments in a given year
for violations related to the HMR. Fewer still disregard agency orders
requiring payment of civil penalties. Since 2010, on average, only 10
companies per year have been referred for debt collection after being
90 days overdue on their civil penalty assessments for PHMSA
enforcement actions. An entity that receives a COO and fails to pay its
penalty will incur costs associated with the cessation of activities
regulated under the HMR. However, this cost is associated with non-
compliance. Companies in compliance with the HMR will not bear any
costs.
C. Executive Order 13132
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13132 (``Federalism'').
Pursuant to 49 U.S.C. 5125(i), the preemption provisions in Hazmat Law
do ``not apply to any procedure . . . utilized by a State, or Indian
tribe to enforce a requirement applicable to the transportation of
hazardous material.'' Accordingly, this final rule has no preemptive
effect on State, local, or Indian tribe enforcement procedures and
penalties, and preparation of a federalism assessment is not warranted.
D. Executive Order 13175
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''). Because this final rule
does not have tribal implications and does not impose substantial
direct compliance costs, the
[[Page 46198]]
funding and consultation requirements of Executive Order 13175 do not
apply.
E. Regulatory Flexibility Act, Executive Order 13272, and DOT Policies
and Procedures
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an
agency to review regulations to assess their impact on small entities
unless the agency determines that a rule is not expected to have
significant impact on a substantial number of small entities. Based on
the assessment in the preliminary regulatory evaluation, I hereby
certify that this final rule will not have a significant economic
impact on a substantial number of small entities. This final rule
applies to offerors and carriers of hazardous materials, some of which
are small entities; however, there will not be any economic impact on
any person who complies with the Hazmat Law and the regulations and
orders issued under that law.
Potentially affected small entities. The provisions in this final
rule will apply to persons who perform, or cause to be performed,
functions related to the transportation of hazardous materials in
commerce. This includes offerors of hazardous material and persons in
physical control of a hazardous material during transportation in
commerce. Such persons may primarily include motor carriers, air
carriers, vessel operators, rail carriers, temporary storage
facilities, and intermodal transfer facilities. Unless alternative
definitions have been established by the agency in consultation with
the Small Business Administration, the definition of ``small business''
has the same meaning as under the Small Business Act (15 CFR parts 631-
657c). Therefore, because no such special definition has been
established, PHMSA employs the thresholds (published in 13 CFR 121.201)
of 1,500 employees for air carriers (NAICS Subgroup 481), 500 employees
for rail carriers (NAICS Subgroup 482), 500 employees for vessel
operators (NAICS Subgroup 483), $22.5 million in revenues for motor
carriers (NAICS Subgroup 484), and $22.5 million in revenues for
warehousing and storage companies (NAICS Subgroup 493). Of the
approximately 200,000 entities to which this final rule would apply
(104,000 of which are motor carriers), we estimate that about 90
percent are small entities.
Potential cost impacts. This final rule amends 49 CFR Part 109,
which contains regulations on the process for collecting civil
penalties. These regulations are not part of the HMR, which govern the
transportation of hazmat, thus they do not carry any additional
compliance requirements or costs for entities that must comply with the
HMR.
Alternate proposals for small business. Because this final rule
addresses a Congressional mandate, we have limited latitude in defining
alternative courses of action. Taking no action would be inconsistent
with Congress' direction and undesirable from the standpoint of safety
and enforcement. Failure to implement the new authority will
substantially impact safety because entities that ignore assessed civil
penalties for violations of the HMR will continue to conduct hazardous
materials operations.
F. Paperwork Reduction Act
PHMSA has analyzed this final rule in accordance with the Paperwork
Reduction Act of 1995 (PRA). The PRA requires federal agencies to
minimize the paperwork burden imposed on the American public by
ensuring maximum utility and quality of federal information, ensuring
the use of information technology to improve government performance,
and improving the federal government's accountability for managing
information collection activities. This final rule contains no new
information collection requirements subject to the PRA.
G. Regulation Identifier Number (RIN)
A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN contained in the heading of
this document can be used to cross-reference this action with the
Unified Agenda.
H. Unfunded Mandates Reform Act
This final rule does not impose unfunded mandates under the
Unfunded Mandates Reform Act of 1995. PHMSA has concluded that the
final rule will not impose annual expenditures of $141.3 million on
State, local, or tribal governments or the private sector, and thus
does not require an Unfunded Mandates Act analysis.
I. Executive Order 13609 and International Trade Analysis
Under Executive Order 13609, agencies must consider whether the
impacts associated with significant variations between domestic and
international regulatory approaches are unnecessary or may impair the
ability of American business to export and compete internationally. In
meeting shared challenges involving health, safety, labor, security,
environmental, and other issues, international regulatory cooperation
can identify approaches that are at least as protective as those that
are or would be adopted in the absence of such cooperation.
International regulatory cooperation can also reduce, eliminate, or
prevent unnecessary differences in regulatory requirements.
Similarly, the Trade Agreements Act of 1979 (Pub. L. 96-39), as
amended by the Uruguay Round Agreements Act (Pub. L. 103-465),
prohibits federal agencies from establishing any standards or engaging
in related activities that create unnecessary obstacles to the foreign
commerce of the United States. For purposes of these requirements,
federal agencies may participate in the establishment of international
standards, so long as the standards have a legitimate domestic
objective, such as providing for safety, and do not operate to exclude
imports that meet this objective. The statute also requires
consideration of international standards and, where appropriate, that
they be the basis for U.S. standards.
PHMSA participates in the establishment of international standards
in order to protect the safety of the American public, and we have
assessed the effects of the rule to ensure that it does not cause
unnecessary obstacles to foreign trade. Accordingly, this rulemaking is
consistent with Executive Order 13609 and PHMSA's obligations under the
Trade Agreement Act, as amended.
J. Environmental Assessment
The National Environmental Policy Act, 42 U.S.C. 4321-4375,
requires federal agencies to analyze proposed actions to determine
whether an action will have a significant impact on the human
environment. The Council on Environmental Quality (CEQ) regulations
require federal agencies to conduct an environmental review considering
(1) the need for the proposed action; (2) alternatives to the proposed
action; (3) probable environmental impacts of the proposed action and
alternatives; and (4) the agencies and persons consulted during the
consideration process. 40 CFR 1508.9(b).
1. Purpose and Need
In section 33010 of MAP-21, Congress required the Secretary to
issue regulations to require a person who is delinquent in paying civil
penalties to cease any activity regulated under the Hazmat Law until
payment has been made or until an acceptable payment plan has been
arranged. PHMSA
[[Page 46199]]
believes that persons who fail to comply with the Hazmat Law and fail
to pay civil penalties are not fit to transport hazardous materials, as
they are more likely to jeopardize public safety and/or the
environment. This final rule and underlying legislation may encourage
companies that disregard the HMR to exit the hazardous materials arena
because continuing hazardous materials transportation after a COO is
punishable by additional penalties and criminal prosecution. This tool
will greatly enhance the enforcement and debt collection tools
available to PHMSA, FAA, FMCSA, and FRA, without impacting entities
that comply with final orders, the Hazmat Law, and the HMR. See
Background section of the preamble to this final rule, supra.
2. Alternatives
In MAP-21's amendments to 49 U.S.C. 5123(i), Congress specifies
that a person that ``fails to pay a civil penalty assessed under this
chapter, or fails to arrange and abide by an acceptable payment plan
for such civil penalty, may not conduct any activity regulated under
this chapter beginning on the 91st day after the date specified by
order of the Secretary for payment of such penalty.'' Congress also
provided limited exceptions for debtors in a case under Chapter 11 of
Title 11 and persons who have filed an appeal of an order. Because this
final rule simply carries out a prescriptive Congressional mandate,
PHMSA did not consider alternatives.
CEQ regulations suggest that agencies consider the alternative of
no-action. 40 CFR 1502.14(d) and 1508.25(b). Although the purpose of
this rulemaking is to carry out the above-described mandate in MAP-21,
PHMSA considered the environmental impacts of the no-action
alternative.
3. Analysis of Environmental Impacts
The goal of this final rule is to prevent violators of the HMR from
ignoring enforcement proceedings and continuing to conduct business
subject to the HMR. PHMSA believes that such companies are not fit to
conduct hazardous materials transportation and may be more likely to
commit further violations that could endanger the public and the
environment. For these reasons, PHMSA believes that the final rule
could decrease the likelihood of hazardous materials incidents.
A release of hazardous materials could result in a myriad of
environmental and human health consequences such as fires, explosions,
asphyxiation, contamination of marine environments, exposure of
increased levels of radioactivity, etc. If hazardous material shipments
are not properly marked, labeled, packaged, and handled, as dictated by
the HMR, risk of release and exposure increases. Incidents occurring
during aircraft or vessel transportation are more likely to threaten
human health and the environment. Emergency responders are also at
greater risk and are less effective at responding to incidents when
hazardous materials shipments do not comply with prescribed
communication requirements. PHMSA believes that this final rule will
further strengthen DOT's ability to ensure compliance with the HMR,
which decreases the likelihood of a hazardous materials release,
enhancing safety and environmental protection.
If PHMSA were to select the ``no action'' alternative, contrary to
Congressional intent, entities that had been found to have violated the
HMR and made no effort to pay a civil penalty for more than 90 days
would be able to continue to perform functions subject to the HMR,
including preparing hazardous materials for shipment and shipping
hazardous materials in commerce. PHMSA believes allowing delinquent
adjudicated violators to continue to engage in regulated activities
while showing disregard for regulations and/or regulatory enforcement
orders would weaken PHMSA's ability to ensure compliance with the HMR.
4. Agencies and Persons Consulted
In drafting this final rule, PHMSA consulted with FAA, FMCSA, and
FRA.
Our determination is that this action would result in a generalized
positive impact on the human environment, but not significant to such a
degree as would warrant a detailed discussion of any impact(s); and
would result in no negative impacts to the human environment because
this action affects violators of the HMR. Additionally, we received no
comment to the NPRM regarding any environmental impact of this
rulemaking.
K. Privacy Act
Anyone is able to search the electronic form of any written
communications and comments received into any of our dockets by the
name of the individual submitting the document (or signing the
document, if submitted on behalf of an association, business, labor
union, etc.). You may review DOT's complete Privacy Act Statement in
the Federal Register published on April 11, 2000 (65 FR 19477) or you
may visit http://www.dot.gov/privacy.html.
List of Subjects
49 CFR Part 107
Administrative practice and procedure, Hazardous materials
transportation, Packaging and containers, Penalties, Reporting and
recordkeeping requirements.
49 CFR Part 109
Definitions, Inspections and investigations, Emergency orders,
Imminent hazards, Remedies generally.
In consideration of the foregoing, we are amending 49 CFR Chapter I
as follows:
PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES
0
1. The authority citation for part 107 is revised to read as follows:
Authority: 49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 section
4 (28 U.S.C. 2461 note); Pub. L. 104-121 sections 212-213; Pub. L.
104-134 section 31001; Pub. L. 112-141 section 33006; 49 CFR 1.81
and 1.97.
0
2. In Subpart D, add new Sec. 107.338 to read as follows:
Sec. 107.338 Prohibition of hazardous materials operations.
As provided for in subpart E of part 109 of this subchapter, a
person who fails to pay a civil penalty in accordance with agreed upon
installments or in full within prescribed time lines, is prohibited
from conducting hazardous materials operations and shall immediately
cease all hazardous materials operations.
PART 109--DEPARTMENT OF TRANSPORTATION HAZARDOUS MATERIAL
PROCEDURAL REGULATIONS
0
3. The authority citation for part 109 continues to read as follows:
Authority: 49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 Sec. 4
(28 U.S.C. 2461 note); Pub. L. 104-121 Secs. 212-213; Pub. L. 104-
134 Sec. 31001; 49 CFR 1.81, 1.97.
0
4. Revise the heading of part 109 to read as set forth above.
0
5. Add new subpart E to read as follows:
Subpart E--Prohibition on Hazardous Materials Operations After
Nonpayment of Penalties
Sec.
109.101 Prohibition of hazardous materials operations.
109.103 Notice of nonpayment of penalties.
Sec. 109.101 Prohibition of hazardous materials operations.
(a) Definition of hazardous materials operations. For the purposes
of this
[[Page 46200]]
subpart, hazardous materials operations means any activity regulated
under the Federal hazardous material transportation law, this
subchapter or subchapter C of this chapter, or an exemption or special
permit, approval, or registration issued under this subchapter or under
subchapter C of this chapter.
(b) Failure to pay civil penalty in full. A respondent that fails
to pay a hazardous material civil penalty in full within 90 days after
the date specified for payment by an order of the Pipeline and
Hazardous Materials Safety Administration, Federal Aviation
Administration, Federal Motor Carrier Safety Administration, or Federal
Railroad Administration is prohibited from conducting hazardous
materials operations and shall immediately cease all hazardous
materials operations beginning on the next day (i.e., the 91st). The
prohibition shall continue until payment of the penalty has been made
in full or at the discretion of the agency issuing the order an
acceptable payment plan has been arranged.
(c) Civil penalties paid in installments. On a case by case basis,
a respondent may be allowed to pay a civil penalty pursuant to a
payment plan, which may consist of installment payments. If the
respondent fails to make an installment payment contained in the
payment plan on the agreed upon schedule, the payment plan shall be
null and void and the full outstanding balance of the civil penalty
shall be payable immediately. A respondent that fails to pay the full
outstanding balance of its civil penalty within 90 days after the date
of the missed installment payment shall be prohibited from conducting
hazardous materials operations beginning on the next day (i.e., the
91st). The prohibition shall continue until payment of the outstanding
balance of the civil penalty has been made in full, including any
incurred interest or until at the discretion of the agency issuing the
order another acceptable payment plan has been arranged.
(d) Appeals to Federal Court. If the respondent appeals an agency
order issued pursuant to Sec. 109.103 to a Federal Circuit Court of
Appeals, the terms and payment due date of the order are not stayed
unless the Court so specifies.
(e) Applicability to ticketing. This section does not apply to a
respondent who fails to pay a civil penalty assessed by a ticket issued
pursuant to Sec. 107.310 of this subchapter.
(f) Applicability to debtors. This section does not apply to a
respondent who is unable to pay a civil penalty because the respondent
is a debtor in a case under chapter 11, title 11, United States Code. A
respondent who is a debtor in a case under chapter 11, title 11, United
States Code must provide the following information to the agency
decision maker identified in the original agency order or on its
certificate of service.
(1) The chapter of the Bankruptcy Code under which the bankruptcy
proceeding is filed;
(2) The bankruptcy case number;
(3) The court in which the bankruptcy proceeding was filed; and
(4) Any other information requested by the agency to determine a
debtor's bankruptcy status.
(g) Penalties for prohibited hazardous materials operations. A
respondent that continues to conduct hazardous materials operations in
violation of this section may be subject to additional penalties,
including criminal prosecution pursuant to 49 U.S.C. 5124.
Sec. 109.103 Notice of nonpayment of penalties.
(a) If a full payment of a civil penalty, or an installment payment
as part of agreed upon payment plan, has not been made within 45 days
after the date specified for payment by the final agency order, the
agency may issue a cessation of hazardous materials operations order to
the respondent.
(b) The cessation of hazardous materials operations order issued
under this section shall include the following information:
(1) A citation to the statutory provision or regulation the
respondent was found to have violated and to the terms of the order or
agreement requiring payment;
(2) A statement indicating that if the respondent fails to pay the
full outstanding balance of the civil penalty within 90 days after the
payment due date, the respondent shall be prohibited from conducting
any activity regulated under the Federal hazardous material
transportation law, this subchapter or subchapter C of this chapter, or
an exemption or special permit, approval, or registration issued under
this subchapter or under subchapter C of this chapter;
(3) A statement describing the respondent's options for responding
to the order which will include an option to file an appeal for
reconsideration of the cessation of operations order within 20 days of
receipt of the order; and
(4) A description of the manner in which the respondent can make
payment of any money due the United States as a result of the
proceeding (i.e., the full outstanding balance of the civil penalty).
(c) The cessation of hazardous materials operation order will be
delivered by personal service, unless such service is impossible or
impractical. If personal service is impossible or impractical then
service may be made by certified mail or commercial express service. If
a respondent's principal place of business is in a foreign country, it
will be delivered to the respondent's designated agent (as prepared in
accordance with Sec. 105.40 of this subchapter).
Issued in Washington, DC, on August 1, 2014 under authority
delegated in 49 CFR part 1.97.
Cynthia L. Quarterman,
Administrator.
[FR Doc. 2014-18617 Filed 8-6-14; 8:45 am]
BILLING CODE 4910-60-P