
[Federal Register Volume 81, Number 127 (Friday, July 1, 2016)]
[Rules and Regulations]
[Pages 43101-43105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15642]


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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 209

[Docket No. FRA-2004-17530; Notice No. 4]
RIN 2130-AC61


Inflation Adjustment of the Ordinary Maximum and Aggravated 
Maximum Civil Monetary Penalties for a Violation of the Hazardous 
Material Transportation Laws or Regulations, Orders, Special Permits, 
and Approvals Issued Under Those Laws

AGENCY: Federal Railroad Administration (FRA), Department of 
Transportation (DOT).

ACTION: Interim final rule.

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SUMMARY: To comply with the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended by the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015, FRA is adjusting the 
minimum penalty, ordinary maximum penalty, and the aggravated maximum 
penalty that it will apply when assessing a civil monetary penalty for 
a knowing violation of the Federal hazardous material transportation 
laws or a regulation, special permit, order, or approval issued under 
those laws. The aggravated maximum penalty is available only for a 
violation that results in death, serious illness, or severe injury to 
any person or substantial destruction of property. In particular, FRA 
is increasing the minimum penalty for a training violation from $450 to 
$463; the ordinary maximum civil monetary penalty per violation from 
$75,000 to $77,114; and the aggravated maximum civil penalty from 
$175,000 to $179,933.

DATES: This interim final rule is effective August 1, 2016.

FOR FURTHER INFORMATION CONTACT: Roberta Stewart, Trial Attorney, 
Office of Chief Counsel, FRA, 1200 New Jersey Avenue SE., Mail Stop 10, 
Washington, DC 20590 (telephone 202-493-6027), roberta.stewart@dot.gov.

SUPPLEMENTARY INFORMATION: On November 2, 2015, President Barack Obama 
signed the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (the 2015 Inflation Act). Public Law 114-74, 
Sec. 701. This amended the Federal Civil Penalties Inflation Adjustment 
Act of 1990 (Inflation Act) that required each agency to (1) adjust by 
regulation each maximum civil monetary penalty (CMP), or range of 
minimum and maximum CMPs, within that agency's jurisdiction by October 
23, 1996, and (2) adjust those penalty amounts once every four years 
thereafter, to reflect inflation. See Public Law 101-410, 104 Stat. 
890, 28 U.S.C. 2461, note, as amended by Section 31001(s)(1) of the 
Debt Collection Improvement Act of 1996, Public Law 104-134, 110 Stat. 
1321-373, April 26, 1996. Under the 2015 Inflation Act, agencies must 
make a catch-up adjustment for CMPs with the new penalty levels 
published by July 1, 2016, to take effect no later than August 1, 2016. 
In addition, agencies must make annual inflation adjustments, starting 
January 15, 2017, based on Office of Management and Budget (OMB) 
guidance.

[[Page 43102]]

    In the 2015 Inflation Act, Congress recognized the important role 
CMPs play in deterring violations of Federal laws, regulations, and 
orders and determined that inflation has diminished the impact of these 
penalties. In the Inflation Act, Congress countered the effect that 
inflation has had on the CMPs by having the agencies charged with 
enforcement responsibility administratively adjust the CMPs.
    This interim final rule is published under 49 U.S.C. 5123 and 5124, 
which provide civil and criminal penalties for violations of the 
Federal hazardous material transportation laws or a regulation, order, 
special permit, or approval issued under those laws. The Pipeline and 
Hazardous Materials Safety Administration (PHMSA) issues the hazardous 
material transportation regulations. 49 CFR 1.96(b)(1). However, FRA is 
authorized as the delegate of the Secretary of Transportation to 
enforce the hazardous material statutes, regulations and orders, 
including the civil penalty provisions codified primarily at 49 U.S.C. 
5123. 49 CFR 1.89(j). In this interim final rule, FRA is amending all 
references to the minimum and maximum civil penalties in 49 CFR part 
209, app. B, to raise the minimum CMP for training violations from $450 
to $463; the ordinary maximum CMP per violation from $75,000 to 
$77,114; and the aggravated maximum CMP from $175,000 to $179,933.

Description of the Adjustment Calculation

    The 2015 Inflation Act requires FRA to calculate the inflation 
adjustment by increasing the maximum CMP, or the range of minimum and 
maximum CMPs, based on the Consumer Price Index for the month of 
October 2015, not seasonally adjusted. The calculation uses multipliers 
to adjust the maximum CMP, or the range of minimum and maximum CMPs, 
based on the year the penalty was established or last adjusted by 
statute or regulation other than under the Inflation Act. Congress 
passed the Moving Ahead for Progress in the 21st Century Act in 2012 
(MAP-21), which amended the maximum penalty (ordinary maximum) for a 
knowing violation of a Federal hazardous material safety law, 
regulation, order, special permit, or approval to $75,000. Public Law 
112-141 (July 6, 2012). MAP-21 also set at $175,000 the maximum civil 
penalty for a person who knowingly violates the Federal hazardous 
material transportation laws or a regulation, order, special permit, or 
approval issued under those laws that results in death, serious 
illness, or severe injury to any person or substantial destruction of 
property (aggravated maximum), and also added a $450 minimum for a 
training violation.
    OMB guidance, M-16-06, ``Implementation of the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015,'' dated 
Feb. 24, 2016, states that after applying the multiplier, FRA must 
round the penalty levels to the nearest dollar.\1\ The 2015 Inflation 
Act also specifies that agencies shall not increase penalty levels by 
more than 150 percent of the corresponding levels in effect on November 
2, 2015. If the new amount or range of the increase exceeds 150 percent 
above the last reported level(s), the new amount or range should be 
reduced to 150 percent over the last reported level(s). The resulting 
penalty level(s) in that case would be 250 percent of the last reported 
level(s).
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    \1\ Available at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf. See also Public Law 114-74, Sec. 
701.
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    Applying the inflation adjustment calculation, FRA determined the 
minimum CMP for training violations should be raised from $450 to $463; 
the ordinary maximum CMP should be raised from $75,000 to $77,114; and 
the aggravated maximum CMP should be raised from $175,000 to $179,933.

Calculations To Determine CMP Updates for 2016

1. Minimum CMP of $450 for Training Violations Raised to $463

    As the 2015 Inflation Act requires, FRA evaluated the minimum CMP 
of $450 for training violations and concluded it should increase to 
$463, as the next calculations show. The 2012 multiplier of 1.02819 
(since the last update not for inflation was in 2012, by MAP-21) times 
$450 equals $462.68, or $463 rounded to the nearest dollar. The 
statutory 150 percent ceiling would be $450 (the penalty level in 
effect on November 2, 2015, including Inflation Act increases), times 
2.5, or $1,125. Because $463 is less than the $1,125 ceiling, the 150 
percent limit does not apply. The inflation adjusted minimum penalty is 
$463, and applies to all violations of the hazardous materials 
statutes, regulations, special permits, approvals, and orders related 
to training. This new FRA minimum penalty for training violations will 
apply to violations that occur on or after August 1, 2016.

2. Ordinary Maximum CMP of $75,000 Raised to $77,114

    As the 2015 Inflation Act requires, FRA evaluated the ordinary 
maximum CMP and determined it should increase to $77,114, as the 
following calculations show. The 2012 multiplier of 1.02819 (since the 
last update not for inflation was in 2012, by MAP-21) times $75,000 
equals $77,114.25, or $77,114 rounded to the nearest dollar. The 
statutory 150 percent ceiling would be $75,000 (the penalty level in 
effect on November 2, 2015, including Inflation Act increases), times 
2.5, or $187,500. Because $77,114 is less than the $ 187,500 ceiling, 
the 150 percent limit does not apply. The inflation adjusted ordinary 
maximum penalty is $77,114, and applies to all violations of the 
hazardous materials transportation statutes, regulations, special 
permits, approvals, and orders. Therefore, the ordinary maximum CMP 
should increase from $75,000 to $77,114. This new FRA ordinary maximum 
penalty will apply to violations that occur on or after August 1, 2016.

3. Aggravated Maximum CMP of $175,000 Raised to $179,933

    FRA also evaluated the maximum CMP for an aggravated violation and 
determined it should increase to $179,933, as the following 
calculations show. The 2012 multiplier of 1.02819 (since the last 
update not for inflation was in 2012, by MAP-21) times $175,000 equals 
$179,933.25, or $179,933, rounded to the nearest dollar. The statutory 
150 percent ceiling would be $175,000 (the penalty level in effect on 
November 2, 2015, including Inflation Act increases), times 2.5, or 
$437,500 Because $179,933 is less than the $437,500 ceiling, the 150 
percent limit does not apply. The inflation adjusted aggravated maximum 
penalty is $179,933, and applies to all violations of the hazardous 
materials transportation statutes, regulations, special permits, 
approvals, and orders. Therefore, the aggravated maximum should 
increase from $175,000 to $179,933. This new FRA aggravated maximum 
penalty will apply to violations that occur on or after August 1, 2016.

Public Participation

    FRA is proceeding to an interim final rule without providing a 
notice of proposed rulemaking or an opportunity for public comment. The 
adjustments the 2015 Inflation Act requires are ministerial acts over 
which FRA has no discretion, making public comment unnecessary. As 
such, notice and comment procedures are ``impracticable, unnecessary, 
or contrary to the public interest'' within the meaning of the 
Administrative Procedure Act (APA), 5 U.S.C.

[[Page 43103]]

553(b)(3)(B). FRA is issuing these amendments as an interim final rule 
applicable to all future hazardous materials transportation civil 
penalty cases under its authority to cite for violations that occur on 
or after the effective date of this interim final rule.

Regulatory Impact

A. Executive Orders 12866 and 13563 and DOT Regulatory Policies and 
Procedures
    This interim final rule has been evaluated consistent with 
Executive Order 12866 (Regulatory Planning and Review), Executive Order 
13563 (Improving Regulation and Regulatory Review), and DOT policies 
and procedures. It is not considered a significant regulatory action 
under section 3(f) of Executive Order 12866. The rule is expected to 
have minimal economic impacts. Additionally, FRA has no discretion to 
change the amount by which the CMPs are updated due to the clear 
direction in the 2015 Inflation Act and OMB memorandum M-16-06. 
Further, this rule is not significant under the Regulatory Policies and 
Procedures of the Department of Transportation (44 FR 11034; Feb. 26, 
1979) because it is limited to ministerial acts on which the agency has 
no discretion, and the economic impact of the interim final rule is 
minimal to the extent that preparation of a regulatory evaluation is 
not warranted.
B. Regulatory Flexibility Act and Executive Order 13272
    The Regulatory Flexibility Act of 1980 (RFA), Public Law 96-354, as 
amended, and codified as amended at 5 U.S.C. 601-612, and Executive 
Order 13272 (Proper Consideration of Small Entities in Agency 
Rulemaking), require agency review of proposed and final rules to 
assess their impact on ``small entities'' for purposes of the RFA. An 
agency must prepare a regulatory flexibility analysis unless it 
determines and certifies that a rule is not expected to have a 
significant economic impact on a substantial number of small entities. 
FRA does not expect this interim final rule will have a significant 
economic impact on a substantial number of small entities. Although 
this interim final rule will apply to railroads, hazardous materials 
shippers, and others that are considered small entities, there is no 
economic impact on any person who complies with the Federal hazardous 
materials laws and the regulations, special permits, approvals, and 
orders issued under those laws.
    In addition, FRA has determined the RFA does not apply to this 
rulemaking. The 2015 Inflation Act requires FRA to publish an interim 
final rule and does not require FRA to complete notice and comment 
procedures under the APA. The Small Business Administration's A Guide 
for Government Agencies: How to Comply with the Regulatory Flexibility 
Act (2003), provides that:

    If, under the APA or any rule of general applicability governing 
federal grants to state and local governments, the agency is 
required to publish a general notice of proposed rulemaking (NPRM), 
the RFA must be considered [citing 5 U.S.C. 604(a)] . . . . If an 
NPRM is not required, the RFA does not apply.

    Therefore, because the 2015 Inflation Act does not require an NPRM 
for this rulemaking, the RFA does not apply.
C. Federalism
    This interim final rule will not have a substantial effect on the 
States, on the relationship between the national government and the 
States, or the distribution of power and responsibilities among the 
various levels of government. Thus, consistent with Executive Order 
13132 (Federalism), preparation of a Federalism assessment is not 
warranted.
D. Paperwork Reduction Act
    There are no new information collection requirements in this 
interim final rule to submit for OMB review under the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
E. Unfunded Mandates Reform Act of 1995
    This interim final rule will not result in the expenditure, in the 
aggregate, of $156,000,000 or more in any one year by State, local, or 
Indian Tribal governments, or the private sector. Thus, consistent with 
Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 
2 U.S.C. 1532), preparation of a written statement detailing the effect 
of such an expenditure is not warranted.
F. Environmental Impact
    FRA has evaluated this interim final rule under the National 
Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.), other 
environmental statutes, related regulatory requirements, and its 
``Procedures for Considering Environmental Impacts'' (FRA's Procedures) 
(64 FR 28545; May 26, 1999). FRA has determined that this interim final 
rule is categorically excluded from detailed environmental review 
pursuant to section 4(c)(20) of FRA's NEPA Procedures, ``Promulgation 
of railroad safety rules and policy statements that do not result in 
significantly increased emissions of air or water pollutants or noise 
or increased traffic congestion in any mode of transportation.'' See 64 
FR 28547 (May 26, 1999). Categorical exclusions (CEs) are actions 
identified in an agency's NEPA implementing procedures that do not 
normally have a significant impact on the environment and therefore do 
not require either an environmental assessment (EA) or environmental 
impact statement (EIS). See 40 CFR 1508.4.
    In analyzing the applicability of a CE, the agency must also 
consider whether extraordinary circumstances are present that would 
warrant a more detailed environmental review through the preparation of 
an EA or EIS. Id. Under section 4(c) and (e) of FRA's Procedures, FRA 
has further concluded that no extraordinary circumstances exist with 
respect to this regulation that might trigger the need for a more 
detailed environmental review. The purpose of this rulemaking is to 
comply with the Inflation Act, as amended by the 2015 Inflation Act. 
Specifically, FRA is adjusting the minimum, maximum, and aggravated 
maximum penalty that it will apply when assessing a civil penalty for a 
violation of a Federal hazardous materials law, regulation, special 
permit, approval, or order. FRA does not anticipate any environmental 
impacts from this requirement and finds there are no extraordinary 
circumstances present in connection with this interim final rule.
G. Executive Order 12898 (Environmental Justice)
    Executive Order 12898, Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations, and DOT 
Order 5610.2(a) (91 FR 27534; May 10, 2012) require DOT agencies to 
achieve environmental justice as part of their mission by identifying 
and addressing, as appropriate, disproportionately high and adverse 
human health or environmental effects, including interrelated social 
and economic effects, of their programs, policies, and activities on 
minority populations and low-income populations. The DOT Order 
instructs DOT agencies to address compliance with Executive Order 12898 
and requirements within the DOT Order in rulemaking activities, as 
appropriate. FRA has evaluated this interim final rule under Executive 
Order 12898 and the DOT Order and has determined that it would not 
cause disproportionately high and adverse human health and 
environmental effects on minority populations or low-income 
populations.

[[Page 43104]]

H. Executive Order 13175 (Tribal Consultation)
    FRA has evaluated this interim final rule under the principles and 
criteria contained in Executive Order 13175, Consultation and 
Coordination with Indian Tribal Governments, dated November 6, 2000. 
The interim final rule would not have a substantial direct effect on 
one or more Indian tribes, would not impose substantial direct 
compliance costs on Indian tribal governments, and would not preempt 
tribal laws. Therefore, the funding and consultation requirements of 
Executive Order 13175 do not apply, and a tribal summary impact 
statement is not required.

List of Subjects in 49 CFR Part 209

    Administrative practice and procedure, Hazardous materials 
transportation, Penalties, Railroad safety, Reporting and recordkeeping 
requirements.

The Interim Final Rule

    In consideration of the foregoing, part 209 of subtitle B, chapter 
II of title 49 of the Code of Federal Regulations is amended as 
follows:

PART 209--[AMENDED]

0
1. The authority citation for part 209 continues to read as follows:

    Authority:  49 U.S.C. 5123, 5124, 20103, 20107, 20111, 20112, 
20114; 28 U.S.C. 2461, note; and 49 CFR 1.89.


0
2. Revise Sec.  209.103(a) and (c) to read as follows:


Sec.  209.103  Minimum and maximum penalties.

    (a) A person who knowingly violates a requirement of the Federal 
hazardous materials transportation laws, an order issued thereunder, 
subchapter A or C of chapter I, subtitle B, of this title, or a special 
permit or approval issued under subchapter A or C of chapter I, 
subtitle B, of this title is liable for a civil penalty of not more 
than $77,114 for each violation, except that--
    (1) The maximum civil penalty for a violation is $179,933 if the 
violation results in death, serious illness, or severe injury to any 
person, or substantial destruction of property and
    (2) A minimum $463 civil penalty applies to a violation related to 
training.
* * * * *
    (c) The maximum and minimum civil penalties described in paragraph 
(a) above apply to violations occurring on or after August 1, 2016.

0
3. Revise the last sentence of Sec.  209.105(c) to read as follows:


Sec.  209.105  Notice of probable violation.

    (c) * * * In an amended notice, FRA may change the civil penalty 
amount proposed to be assessed up to and including the maximum penalty 
amount of $77,114 for each violation, except that if the violation 
results in death, serious illness or severe injury to any person, or 
substantial destruction of property, FRA may change the penalty amount 
proposed to be assessed up to and including the maximum penalty amount 
of $179,933.

Appendix B to Part 209--[Amended]

0
4. Amend appendix B to part 209 as follows:

0
a. In the introductory text, revise the second sentence of the first 
paragraph, the last sentence of the second paragraph, and the next to 
last sentence of the third paragraph;
0
b. In the table ``CIVIL PENALTY ASSESSMENT GUIDELINES,'' below the 
heading ``PART 173--SHIPPERS--GENERAL REQUIREMENTS FOR SHIPMENTS AND 
PACKAGES,'' revise the entry for ``Sec. Sec.  173.24(b)(1) and 
173.24(b)(2) and 173.24(f)(1) and 173.24(f)(1)(ii)'', and revise the 
entry for ``Sec.  173.24(c)''; and

0
c. Revise footnote 2.
    The revisions read as follows:

Appendix B to Part 209--Federal Railroad Administration Guidelines for 
Initial Hazardous Materials Assessments

    * * * The guideline penalty amounts reflect the best judgment of 
the FRA Office of Railroad Safety (RRS) and of the Safety Law Division 
of the Office of Chief Counsel (RCC) on the relative severity of the 
various violations routinely encountered by FRA inspectors on a scale 
of amounts up to the maximum $77,114 penalty, except the maximum civil 
penalty is $179,933 if the violation results in death, serious illness 
or severe injury to any person, or substantial destruction of property, 
and a minimum $463 penalty applies to a violation related to training. 
* * *
    * * * When a violation of the Federal hazardous material 
transportation law, an order issued thereunder, the Hazardous Materials 
Regulations or a special permit, approval, or order issued under those 
regulations results in death, serious illness or severe injury to any 
person, or substantial destruction of property, a maximum penalty of at 
least $77,114 and up to and including $179,933 shall always be assessed 
initially.
    * * * In fact, FRA reserves the express authority to amend the NOPV 
to seek a penalty of up to $77,114 for each violation, and up to 
$179,933 for any violation resulting in death, serious illness or 
severe injury to any person, or substantial destruction of property, at 
any time prior to issuance of an order. * * *
Civil Penalty Assessment Guidlenes
* * * * *

PART 173--SHIPPERS--GENERAL REQUIREMENTS FOR SHIPMENTS AND PACKAGES

* * * * *

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                                                                                                     Guideline
              49 CFR Section                                    Description                         amount \2\
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                                  * * * * * * *
173.24(b)(1) and 173.24(b)(2) and          Securing closures: These subsections are the general ``no leak''
 173.24(f)(1) and 173.24(f)(1)(ii).         standard for all packagings. Sec. 173.24(b) deals primarily with
                                            packaging as a whole, while Sec.   173.24(f) focuses on closures.
                                            Use Sec.   173.31(d) for tank cars, when possible. Cite the sections
                                            accordingly, using both the leak/non-leak criteria and the package
                                            size considerations to reach the appropriate penalty. Any actual
                                            leak will aggravate the guideline by, typically, 50%; a leak with
                                            contact with a human being will aggravate by at least 100%, up to
                                            the maximum of $77,114, and up to $179,933 if the violation results
                                            in death, serious illness or injury or substantial destruction of
                                            property. For intermodal (IM) portable tanks and other tanks of that
                                            size range, use the tank car penalty amounts, as stated in Sec.
                                            173.31.
                                           --Small bottle or box................................           1,000
                                           --55-gallon drum.....................................           2,500
                                           --Larger container, e.g., IBC; not portable tank or             5,000
                                            tank car..
                                          ----------------------------------------------------------------------

[[Page 43105]]

 
                                           --IM portable tank, cite Sec.   173.24(f) and use the penalty amounts
                                            for tank cars: Residue, generally, Sec.   173.29(a) and, loaded,
                                            Sec.   173.31(d).
                                          ----------------------------------------------------------------------
                                           --Residue adhering to outside of package (i.e.,                 5,000
                                            portable tanks, tank cars, etc.)..
173.24(c)................................  Use of package not meeting specifications, including required
                                            stencils and markings. The most specific section for the package
                                            involved should be cited (see below). The penalty guideline should
                                            be adjusted for the size of the container. Any actual leak will
                                            aggravate the guideline by, typically, 50%; a leak with contact with
                                            a human being will aggravate by at least 100%, up to the maximum of
                                            $77,114, and up to $179,933 if the violation results in death,
                                            serious illness or injury or substantial destruction of property.
                                          ----------------------------------------------------------------------
                                           --Small bottle or box................................           1,000
                                           --55-gallon drum.....................................           2,500
                                           --Larger container, e.g., IBC; not portable tank or             5,000
                                            tank car, but this section is applicable to a hopper
                                            car..
                                           For more specific sections: Tank cars-Sec.   173.31(a), portable
                                            tanks-Sec.   173.32, and IM portable tanks-Sec.  Sec.   173.32a,
                                            173.32b, and 173.32c.
----------------------------------------------------------------------------------------------------------------
* * * * *
\2\ A person who knowingly violates the hazardous material transportation law or a regulation, order, special
  permit, or approval issued thereunder, is subject to a civil penalty of up to $77,114 for each violation,
  except that the maximum civil penalty for a violation is $179,933 if the violation results in death, serious
  illness, or severe injury to any person or substantial destruction of property; and a minimum $463 civil
  penalty applies to a violation related to training. Each day that the violation continues is a separate
  offense. 49 U.S.C. 5123; 28 U.S.C. 2461, note.


Corey Hill,
Executive Director.
[FR Doc. 2016-15642 Filed 6-30-16; 8:45 am]
 BILLING CODE 4910-06-P


