
[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Notices]
[Pages 71431-71432]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29783]



[[Page 71431]]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration


Civil Penalty Calculation Methodology

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice.

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SUMMARY: FMCSA is currently evaluating its civil penalty methodology. 
Part of this evaluation includes a forthcoming explanation of the 
Uniform Fine Assessment (UFA) algorithm, which FMCSA currently uses for 
calculation of civil penalties. UFA takes into account the statutory 
penalty factors under 49 U.S.C. 521(b)(2)(D). The evaluation will also 
consider penalties for small businesses, including the effect of the 
Small Business Regulatory Enforcement Fairness Act (SBREFA) on those 
penalties. The purpose of this notice is to clarify the FMCSA 
methodology for calculation of certain civil penalties. To induce 
compliance with federal regulations, FMCSA will impose a minimum civil 
penalty that is calculated by UFA. In many cases involving small 
businesses, the penalty will be lower than a large business under 
similar circumstances.

DATES: This clarification of penalty methodology is effective for all 
Notices of Claim issued on or after November 17, 2011.

FOR FURTHER INFORMATION CONTACT: Charles Fromm, Office of Chief 
Counsel, Federal Motor Carrier Safety Administration, 1200 New Jersey 
Avenue SE., Washington, DC 20590-0001, by telephone at (202) 366-3551 
or via email at charles.fromm@dot.gov. Office hours are from 9 a.m. to 
5 p.m. ET, Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: In determining the amount of civil penalties 
for violations of the Federal regulations it administers, FMCSA must 
take into account ``the nature, circumstances, extent, and gravity of 
the violation committed and, with respect to the violator, the degree 
of culpability, history of prior offenses, ability to pay, effect on 
ability to continue to do business, and such other matters as justice 
and public safety may require.'' 49 U.S.C. 521(b)(2)(D). Significantly, 
overlaying the nine factors, section 521(b)(2)(D) also requires that 
the assessed penalty be ``calculated to induce further compliance.'' 
Id. The Agency may consider certain additional factors, pursuant to the 
SBREFA, Public Law 104-121, Sec.  201 (Mar. 29, 1996).
    To take into account the nine statutory factors under Sec.  
521(b)(2)(D) in a manner that results in penalties consistent between 
carriers of similar circumstances, FMCSA uses an automated policy tool 
called the UFA. The UFA policy has been in effect since 1994. Under a 
long line of administrative rulings, starting with Alfred Chew & Martha 
Chew, dba Alfred & Martha Chew Trucking, FHWA-1996-5323 (Final Order, 
Feb. 7 1996), FMCSA and its predecessor agency have held that UFA ``is 
presumed to comply with the requirement of 49 U.S.C. 521.''
    One feature of the UFA program, which takes into account ability to 
pay and ability to continue to do business, is the Gross Revenue Cap. 
The Gross Revenue Cap is determined by multiplying the motor carrier's 
adjusted gross revenue by a statutory criteria adjustment score. This 
score is based on the Agency assessment of the violations and the 
statutory factors.
    In Paul Michels dba Paul Michels Trucking, (Jan. 27, 2001), the 
Acting Chief Safety Officer took official notice of UFA. In the Final 
Order on reconsideration in Paul Michels, the Acting Chief Safety 
Officer found that UFA considered SBREFA by virtue of the Gross Revenue 
Cap. In a recent administrative review of a proposed civil penalty, the 
FMCSA Assistant Administrator held that the calculated penalty for a 
small business in that case, $1,980, could not exceed the Gross Revenue 
Cap calculated by UFA, which was $490. Pioneer Drum & Bugle Corps & 
Color Guard, Inc., FMCSA-2008-0012 (Final Order Oct. 4, 2011).
    UFA is not, and never was, intended for use where the total 
proposed penalty is less than $2,000, however. In such cases, the UFA 
algorithm may generate a gross revenue cap that is too low to 
effectively induce compliance with the Federal Motor Carrier Safety 
Regulations, Federal Hazardous Materials Regulations, and the Federal 
Motor Carrier Commercial Regulations. Moreover, the administrative 
burden on the Agency of issuing, settling or adjudicating, and 
monitoring payment of such low penalty amounts renders this activity 
contrary to the public interest.
    FMCSA therefore will issue a penalty that is equal to the UFA-
calculated penalty in all civil enforcement actions when the Gross 
Revenue cap is $2,000 or less, even if the Gross Revenue Cap is lower 
than the calculated penalty. So more precisely, if the UFA per-count 
calculated penalty and the Gross Revenue Cap are both less than $2,000, 
then the penalty will be the lower of (a) $2,000, or (b) the total of 
all the per count penalties. In addition, UFA provides a range within 
which enforcement personnel may exercise discretion over the penalty to 
be issued, taking into account the statutory factors.
    In recognition of SBREFA, FMCSA will impose a penalty that is 20 
percent higher against for-hire motor carriers of property with annual 
gross revenue equal to or greater than $25.5 million, which is the 
Small Business Administration's current threshold for small businesses 
in the trucking industry. FMCSA may continue to reduce the calculated 
penalty, in its discretion, pursuant to the requirement in section 
521(b)(2)(D) that it take into consideration the violator's ability to 
pay and effect of the penalty on the violator's ability to continue to 
do business.
    If the Gross Revenue Cap is greater than $2,000 and the calculated 
penalty is greater than the Gross Revenue Cap, the penalty will 
continue to be limited to the Gross Revenue Cap, subject to the 
possible adjustment above and any discretionary reduction based on the 
motor carrier's ability to pay and ability to continue to do business. 
For cases where the Gross Revenue Cap is at or above $2,000, UFA 
appropriately takes SBREFA into account, and the Gross Revenue Cap will 
apply. In addition to the above, in all cases, FMCSA may increase or 
decrease the calculated penalty based on other matters as justice and 
public safety may require, which is consistent with 49 U.S.C. 
521(b)(2)(D).
    SBREFA generally requires agencies to provide for the reduction or 
waiver of civil penalties for violations of a statutory or regulatory 
requirement by a small business. SBREFA includes several exceptions to 
such reductions or waivers, including where the small business has been 
subject to multiple enforcement actions, where there has been willful 
or criminal conduct or in cases where the violations pose a serious 
health, safety, or environmental threat. SBREFA provides agencies with 
the flexibility to determine how it will reduce or waive penalties for 
small businesses. FMCSA believes that a 20 percent difference in 
penalties between large and small businesses of similar circumstances 
is a reasonable exercise of the Agency's discretion and balances the 
principles of SBREFA with the requirement of 49 U.S.C. 521 to calculate 
penalties that are designed to induce further compliance with federal 
laws and regulations. FMCSA also notes that, pursuant to 49 U.S.C. 
113(b), safety must be the Agency's highest priority, and FMCSA's 
mission to reduce highway deaths and injuries will often require it to 
refrain from reducing

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penalties for small businesses where one of the exceptions to SBREFA 
applies. Consistent with past practice and the Agency's position in 
Paul Michels regarding SBREFA, FMCSA will continue to limit penalties 
to the UFA-generated Gross Revenue Cap where that cap exceeds $2,000. 
In no case will an assessed penalty exceed a statutory maximum.

    Issued on: November 10, 2011.
Anne S. Ferro,
Administrator.
[FR Doc. 2011-29783 Filed 11-16-11; 8:45 am]
BILLING CODE 4910-EX-P


