
[Federal Register Volume 78, Number 185 (Tuesday, September 24, 2013)]
[Proposed Rules]
[Pages 58501-58507]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22952]


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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: Notice of Proposed Rulemaking (NPRM).

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SUMMARY: PHMSA proposes to amend the hazardous materials procedural 
found under our regulations. Specifically, this proposed action would 
prohibit 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: Comments must be received by November 25, 2013.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Fax: 1-202-493-2251.
     Mail: Docket Management System; U.S. Department of 
Transportation, Docket Operations, M-30, West Building, Ground Floor, 
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.
     Hand Delivery: To the U.S. Department of Transportation, 
Docket Operations, M-30, West Building, Ground Floor, Room W12-140, 
1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays.
    Instructions: Include the agency name and docket number PHMSA-2012-
0258 (HM-258A) or the Regulatory Identification Number (RIN) 2137-AE97 
for this notice of proposed rulemaking at the beginning of your 
comment. Please note that all comments received will be posted without 
change to http://www.regulations.gov, including any personal 
information provided.
    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.regulations.gov.
    Docket: For access to the dockets to read background documents or 
comments received, go to http://www.regulations.gov or DOT's Docket 
Operations Office (see ADDRESSES).

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

[[Page 58502]]

    C. Federal Motor Carrier Safety Administration
    D. Federal Railroad Administration
II. Overview of Mandated Changes to the Penalty Procedures
III. Discussion of Rulemaking Proposals
IV. Regulatory Analyses and Notices
    A. Statutory/Legal Authority for This Rulemaking
    B. Executive Order 12866, 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 
Procedures and Policies
    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 water, nothing in this proposed 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. Sec. Sec.  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 proposed rule will have the authority to apply 
these proposed 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 ticket process 
under 49 CFR Sec.  107.310 and would be exempt from this proposed 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 Sec.  107.311, the NOPV must include the 
following information: (1) A citation of the provision(s) of the HMR, 
order, or special permit which 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 proposed rule would affect 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 Sec.  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 proposed 
rule would affect only those persons who violate the payment terms of 
an order (for violations of the HMR) issued under 14 CFR Sec.  
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 Sec.  386.11(c). Each NOC sets forth the facts 
alleged, states the provisions of the regulations allegedly violated by 
the respondent, proposes a civil penalty, and 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 proposed rule 
would affect 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

    The 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 a 
statement of the provisions that the respondent is believed to have 
violated, a statement of the factual allegations, notice of the amount 
of the civil penalty proposed to be assessed, 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 proposed 
rule would affect only those respondents 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. 
Sec.  5123 to prohibit a person from engaging in business operations 
involving the

[[Page 58503]]

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 operation 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. Sec.  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 MAP-
21 to respondents whose final order was issued prior to the issuance of 
a final rule. Consequently, provisions of this proposed rule, once 
finalized, will apply to all final agency orders that assess penalties 
issued on or after the effective date of the final rule.

III. Discussion of Rulemaking Proposals

    This notice of proposed rulemaking (NPRM) amends 49 CFR Part 109 to 
implement the authority granted under Section 33010 to MAP-21's 
amendment to 49 U.S.C. Sec.  5123 to prohibit a person from engaging in 
hazardous materials operations upon failure to pay a civil penalty. 
Specifically, we propose to adopt a new Subpart E to Part 109 setting 
forth procedures to require a person who is delinquent in paying civil 
penalties to cease hazardous materials operations until payment has 
been made or an acceptable payment plan has been arranged. We also 
propose to 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 NPRM, the agency which issued the 
final order outlining the terms and outcome of an enforcement action 
will send the respondent a Cessation of Operations Order (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 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. They will have had ample opportunity 
to address these concerns 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 Circuit 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. Sec.  5124. PHMSA is providing a comment period of 60 days on 
this proposed rule.

IV. Regulatory Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This proposed 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 proposed rule would revise certain

[[Page 58504]]

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 
assessed pursuant to 49 CFR Sec.  107.311 (PHMSA), 49 CFR Part 209, 
Subpart B (FRA), 49 CFR Part 386 (FMCSA), and 14 CFR Part 13 (FAA. The 
proposed 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 13610, Executive Order 13563, Executive Order 12866, 
and DOT Regulatory Policies and Procedures

    This NPRM 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 proposed 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 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.
    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.
    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 proposing no changes to the HMR which 
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 proposed 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 proposed 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 proposed 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 proposed 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 proposed rule does not have tribal implications and does 
not impose substantial direct compliance costs, the funding and 
consultation requirements of Executive Order 13175 do not apply.

E. Regulatory Flexibility Act, Executive Order 13272, and DOT 
Procedures and Policies

    The Regulatory Flexibility Act (5 U.S.C. Sec. Sec.  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 the proposed rule will not have a significant 
economic impact on a substantial number of small entities. This 
proposed 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 
proposed 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), $18.5 million in revenues for 
motor carriers (NAICS Subgroup 484), and $18.5 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 proposed 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

[[Page 58505]]

costs for entities that must comply with the HMR.
    Alternate proposals for small business. Because this proposed 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 proposed 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 proposed 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 proposed rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. PHMSA has concluded that the 
proposed 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 E.O. 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 proposed rule to ensure that it does not 
cause unnecessary obstacles to foreign trade. Accordingly, this 
rulemaking is consistent with E.O. 13609 and PHMSA's obligations under 
the Trade Agreement Act, as amended.

J. Environmental Assessment

    The National Environmental Policy Act, 42 U.S.C. Sec. Sec.  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 Sec.  1508.9(b).
1. Purpose and Need
    In Sec.  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 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. The proposed 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 Sec. Sec.  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 will consider the environmental impacts of the no-
action alternative.
3. Analysis of Environmental Impacts
    The goal of this proposed 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 proposed 
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

[[Page 58506]]

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 proposed 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 proposed 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. PHMSA encourages comments 
from members of the public and stakeholders about possible 
environmental impacts.

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 practices 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 proposing to amend 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 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; 49 CFR 1.81, 1.97.

0
4. Revise the part heading to read as shown above.
0
5. Add new Subpart E, Prohibition on Hazardous Materials Operations 
After Nonpayment of Penalties to read as follows:
Subpart E--Prohibition on Hazardous Materials Operations After 
Nonpayment of Penalties
Secs.
Sec.  109.101 Prohibition of Hazardous Materials Operations.
Sec.  109.103 Notice of Nonpayment of Penalties.

Subpart E--Prohibition on Hazardous Materials Operations After 
Nonpayment of Penalties


Sec.  109.101  Prohibition of Hazardous Materials Operations.

    (a) Definition of hazardous materials operations. For the purposes 
of this 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 Motor Carrier Safety 
Administration, Federal Railroad Administration, or Federal Aviation 
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.

[[Page 58507]]

    (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. Sec.  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 September 16, 2013, under authority 
delegated in 49 CFR Part 106.
Magdy El-Sibaie,
Associate Administrator for Hazardous Materials Safety, Pipeline and 
Hazardous Materials Safety Administration.
[FR Doc. 2013-22952 Filed 9-23-13; 8:45 am]
BILLING CODE 4910-60-P


