
[Federal Register Volume 82, Number 74 (Wednesday, April 19, 2017)]
[Rules and Regulations]
[Pages 18397-18400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07908]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 107 and 171

[Docket No. PHMSA-2016-0041 (HM-258D)]
RIN 2137-AF23


Hazardous Materials: Revision of Maximum and Minimum Civil 
Penalties

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 
DOT.

ACTION: Final rule.

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SUMMARY: PHMSA is revising the maximum and minimum civil penalties for 
a knowing violation of the Federal hazardous material transportation 
law or a regulation, order, special permit, or approval issued under 
that law. The Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015, which amended the Federal Civil Penalties 
Inflation Adjustment Act of 1990, required Agencies to update their 
civil monetary penalties in August 2016 through an interim final 
rulemaking. PHMSA has elected to do the 2017 update in a final 
rulemaking. Per this final rule, the maximum civil penalty for a 
knowing violation is now $78,376, except for violations that result in 
death, serious illness, or severe injury to any person or substantial 
destruction of property, for which the maximum civil penalty is 
$182,877. In addition, the minimum civil penalty amount for a violation 
relating to training is now $471.

DATES: Effective Date: April 19, 2017.

FOR FURTHER INFORMATION CONTACT: Shawn Wolsey, Office of Chief Counsel, 
(202) 366-4400, Pipeline and Hazardous Materials Safety Administration, 
U.S. Department of Transportation, 1200 New Jersey Avenue SE., 
Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION: 

Table of Contents:

I. Civil Penalty Amendments
II. Justification for Final Rule
III. Rulemaking 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. Unfunded Mandates Reform Act of 1995
    H. Environmental Assessment
    I. Executive Order 13609 and International Trade Analysis
    J. Privacy Act
    K. Regulation Identifier Number (RIN)
List of Subjects

I. Civil Penalty Amendments

    Section 701 of the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (the 2015 Act), Public Law 114-74, which 
amended the Federal Civil Penalties Inflation Adjustment Act of 1990 
(the Inflation Adjustment Act), Public Law 101-410, required that the 
Agency make an initial catch-up adjustment with subsequent annual 
adjustments to the maximum and minimum civil penalties set forth in 49 
U.S.C. 5123(a) for a knowing violation of the Federal hazardous 
material transportation law or a regulation, order, special permit, or 
approval issued under that law. These changes to the maximum and 
minimum civil penalty amounts apply to violations assessed on or after 
the effective date of August 1, 2016. The 2015 Act also requires that 
the Agency make subsequent annual adjustments for inflation beginning 
in 2017, which are to be published no later than January 15th of each 
subsequent year.
    The Office of Management and Budget's (OMB) ``Memorandum for the 
Heads of Executive Departments and Agencies, Implementation of the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015,'' M-17-11, provides guidance on how to update agencies' civil 
penalties pursuant to the 2015 Act. In order to complete the 2017 
annual adjustment, agencies should multiply each applicable penalty by 
the multiplier (1.01636) and round to the nearest dollar. The 
multiplier should be applied to the most recent penalty amount, i.e., 
the one that includes the catch-up adjustment that the 2015 Act 
required agencies to issue no later than July 1, 2016.
    Accordingly, PHMSA is revising the references to the maximum and 
minimum civil penalty amounts in 49 CFR 107.329, appendix A to subpart 
D of 49 CFR part 107, and 49 CFR 171.1 to reflect the changes required 
by the 2015 Act:

     Revising the maximum civil penalty from $77,114 to 
$78,376 for a person who knowingly violates the Federal hazardous 
material transportation law or a regulation, order, special permit, 
or approval issued under that law.
     Revising the maximum civil penalty from $179,933 to 
$182,877 for a person who knowingly violates the Federal hazardous 
material transportation law or a regulation, order, special permit, 
or approval issued under that law that results in death, serious

[[Page 18398]]

illness, or severe injury to any person or substantial destruction 
of property.
     Revising the minimum penalty amount from $463 to $471 
for a violation related to training.

II. Justification for Final Rule

    PHMSA is proceeding directly to a final rule without providing a 
notice of proposed rulemaking (NPRM) or an opportunity for public 
comment. This action is permitted, in part, because the 2015 Act 
directs PHMSA to adjust the civil monetary penalties in accordance with 
the schedule provided in the 2015 Act, notwithstanding the notice and 
public comment procedures in the Administrative Procedure Act (APA). 
However, PHMSA also notes that the APA authorizes agencies to forego 
providing the opportunity for prior public notice and comment if an 
agency finds good cause that notice and public comment are 
``impracticable, unnecessary, or contrary to the public interest.'' See 
5 U.S.C 553(b)(3)(B). In this instance, public comment is unnecessary 
because, in making these technical amendments, PHMSA is not exercising 
discretion in a way that could be informed by public comment. PHMSA is 
required under the 2015 Act and directed by the OMB Guidance to publish 
this rule by January 15, 2017, with the penalty levels stated herein to 
take effect on that date. Further, PHMSA is mandated by the 2015 Act 
and directed by the OMB Guidance to adjust the penalty levels pursuant 
to the specific procedures also stated herein. Any public comments 
received through notice and comment procedure would therefore not 
affect PHMSA's obligation to comply with the 2015 Act, nor would they 
affect the methods used by PHMSA to adjust the penalty levels.

III. Rulemaking Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This final rule is published under the authority of the Federal 
hazardous materials transportation law. 49 U.S.C. 5101 et seq. Section 
5123(a) of which provides civil penalties for knowing violations of 
Federal hazardous material transportation law or a regulation, order, 
special permit, or approval issued under that law. This rule revises 
the references in PHMSA's regulations by (1) revising the maximum 
penalty amount for a knowing violation and a knowing violation 
resulting in death, serious illness, or severe injury to any person or 
substantial destruction of property to $78,376 and $182,877, 
respectively, and (2) revising the minimum penalty amount to $471 for a 
violation related to training.

B. Executive Order 12866, Executive Order 13563, and DOT Regulatory 
Policies and Procedures

    This final rule has been evaluated in accordance with existing 
policies and procedures and determined to be non-significant under 
Executive Order 12866, ``Regulatory Planning and Review,'' 58 FR 51735 
(Oct. 4, 1993), and Executive Order 13563, ``Improving Regulation and 
Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011). However, consistent 
with OMB memorandum M-17-11, this final rule was not reviewed by OMB in 
order to make a significance determination.
    Further, this rule is not a significant regulatory action under DOT 
Regulatory Policies and Procedures. See 44 FR 11034 (Feb. 26, 1979). It 
is a ministerial act for which the Agency has no discretion. The 
economic impact of the final rule is minimal to the extent that 
preparation of a regulatory evaluation is not warranted. Given the low 
number of penalty actions within the scope of this final rule, the 
impacts will be very limited.
    This final rule is being undertaken to address our statutory 
requirements and imposes no new costs upon persons conducting hazardous 
materials operations in compliance with the requirements of the 
Hazardous Materials Regulations (HMR; 49 CFR parts 171-180). Those 
entities not in compliance with the requirements of the HMR may 
experience an increased cost based on the penalties levied against them 
for non-compliance; however, this is an avoidable, variable cost and 
thus is not considered in any evaluation of the significance of this 
regulatory action. Moreover, as the cost is an inflationary adjustment 
and the magnitude of the increase is minimal since these penalties were 
recently enacted, reflected costs are nominal. The amendments in this 
rule could provide safety benefits (i.e., larger penalties deterring 
knowing violators). Overall, it is anticipated this rulemaking would 
have minimal real costs and benefits.

C. Executive Order 13132

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13132, ``Federalism.'' See 64 
FR 43255 (Aug. 10, 1999). This rule does not impose any regulation 
having substantial direct effects on the States, the relationship 
between the national government and the States, or the distribution of 
power and responsibilities among the various levels of government. 
Therefore, the consultation and funding requirements of Executive Order 
13132 do not apply.

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.'' See 65 FR 67249 (Nov. 9, 
2000). Because this final rule does not have adverse tribal 
implications and does not impose direct compliance costs, the funding 
and consultation requirements of Executive Order 13175 do not apply and 
a tribal summary impact statement is not required.

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

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-611, requires 
each agency to analyze regulations and assess their impact on small 
businesses and other small entities to determine whether the rule is 
expected to have a significant impact on a substantial number of small 
entities. The provisions of this rule apply specifically to all 
businesses transporting hazardous material. Therefore, PHMSA certifies 
this rule would not have a significant economic impact on a substantial 
number of small entities.
    In addition, PHMSA has determined the RFA does not apply to this 
rulemaking. The 2015 Act requires PHMSA to publish a final rule and 
does not require PHMSA 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 Act does not require an NPRM for this 
rulemaking, the RFA does not apply.

F. Paperwork Reduction Act

    There are no new information requirements in this final rule.

G. Unfunded Mandates Reform Act of 1995

    This final rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. Public Law 104-4. It does not 
result in costs of $100 million or more,

[[Page 18399]]

adjusted for inflation, to any of the following: State, local, or 
Native American tribal governments, or to the private sector.

H. Environmental Assessment

    The National Environmental Policy Act of 1969 (NEPA), as amended, 
requires Federal agencies to consider the consequences of major Federal 
actions and prepare a detailed statement on actions significantly 
affecting the quality of the human environment. 42 U.S.C. 4321-4375. 
When developing potential regulatory requirements, PHMSA evaluates 
those requirements to consider the environmental impact of each 
amendment. Specifically, PHMSA evaluates the following: Risk of release 
and resulting environmental impact; risk to human safety, including any 
risk to first responders; longevity of the packaging; and if the 
proposed regulation would be carried out in a defined geographic area, 
the resources, especially any sensitive areas, and how they could be 
impacted by any proposed regulations. These amendments would be 
generally applicable and would not be carried out in a defined 
geographic area. Civil penalties may act as a deterrent to those 
violating the HMR, and this can have a negligible positive 
environmental impact as a result of increased compliance. Based on the 
above discussion, PHMSA concludes there are no significant 
environmental impacts associated with this final rule.

I. Executive Order 13609 and International Trade Analysis

    Under Executive Order 13609, ``Promoting International Regulatory 
Cooperation,'' 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. See 77 FR 
26413 (May 4, 2012). 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 this final 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.

J. Privacy Act

    Anyone is able to search the electronic form of all comments 
received by any of our dockets using the name of the individual 
submitting the comments (or signing the comment, 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 19476), which may be viewed at http://www.gpo.gov/fdsys/pkg/FR-2000-04-11/pdf/00-8505.pdf.

K. 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 
spring and fall of each year. The RIN contained in the heading of this 
document can be used to cross-reference this action with the Unified 
Agenda.

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 171

    Definitions, General information, Regulations.

    In consideration of the foregoing, 49 CFR chapter I is amended as 
follows:

PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES

0
1. The authority citation for part 107 continues to read as follows:

    Authority:  49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 section 
4; Pub. L. 104-121, sections 212-213; Pub. L. 104-134, section 
31001; Pub. L. 114-74 section 4 (28 U.S.C. 2461 note); 49 CFR 1.81 
and 1.97.

0
2. Revise Sec.  107.329 to read as follows:


Sec.  107.329   Maximum penalties.

    (a) A person who knowingly violates a requirement of the Federal 
hazardous material transportation law, an order issued thereunder, this 
subchapter, subchapter C of the chapter, or a special permit or 
approval issued under this subchapter applicable to the transportation 
of hazardous materials or the causing of them to be transported or 
shipped is liable for a civil penalty of not more than $78,376 for each 
violation, except the maximum civil penalty is $182,877 if the 
violation results in death, serious illness, or severe injury to any 
person or substantial destruction of property. There is no minimum 
civil penalty, except for a minimum civil penalty of $471 for 
violations relating to training. When the violation is a continuing 
one, each day of the violation constitutes a separate offense.
    (b) A person who knowingly violates a requirement of the Federal 
hazardous material transportation law, an order issued thereunder, this 
subchapter, subchapter C of the chapter, or a special permit or 
approval issued under this subchapter applicable to the design, 
manufacture, fabrication, inspection, marking, maintenance, 
reconditioning, repair or testing of a package, container, or packaging 
component which is represented, marked, certified, or sold by that 
person as qualified for use in the transportation of hazardous 
materials in commerce is liable for a civil penalty of not more than 
$78,376 for each violation, except the maximum civil penalty is 
$182,877 if the violation results in death, serious illness, or severe 
injury to any person or substantial destruction of property. There is 
no minimum civil penalty, except for a minimum civil penalty of $471 
for violations relating to training.
    3. In appendix A to subpart D of part 107, section II.B. (``Penalty 
Increases for Multiple Counts''), the first sentence of the second 
paragraph is revised to read as follows:

Appendix A to Subpart D of Part 107--Guidelines for Civil Penalties

* * * * *
    II. * * *
    B. * * *
    Under the Federal hazmat law, 49 U.S.C. 5123(a), each violation of 
the HMR and each day of a continuing violation (except for violations 
relating

[[Page 18400]]

to packaging manufacture or qualification) is subject to a civil 
penalty of up to $78,376 or $182,877 for a violation occurring on or 
after April 19, 2017. * * *
* * * * *

PART 171--GENERAL INFORMATION, REGULATIONS, AND DEFINITIONS

0
4. The authority citation for part 171 continues to read as follows:

    Authority:  49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 section 
4; Pub. L. 104-134, section 31001; Pub. L. 114-74 section 4 (28 
U.S.C. 2461 note); 49 CFR 1.81 and 1.97.

0
5. In Sec.  171.1, paragraph (g) is revised to read as follows:


Sec.  171.1   Applicability of Hazardous Materials Regulations (HMR) to 
persons and functions.

* * * * *
    (g) Penalties for noncompliance. Each person who knowingly violates 
a requirement of the Federal hazardous material transportation law, an 
order issued under Federal hazardous material transportation law, 
subchapter A of this chapter, or a special permit or approval issued 
under subchapter A or C of this chapter is liable for a civil penalty 
of not more than $78,376 for each violation, except the maximum civil 
penalty is $182,877 if the violation results in death, serious illness, 
or severe injury to any person or substantial destruction of property. 
There is no minimum civil penalty, except for a minimum civil penalty 
of $471 for a violation relating to training.

    Issued in Washington, DC on April 14, 2017, under authority 
delegated in 49 CFR part 1.97.
Howard W. McMillan,
Acting Deputy Administrator, Pipeline and Hazardous Materials Safety 
Administration.
[FR Doc. 2017-07908 Filed 4-18-17; 8:45 am]
 BILLING CODE 4910-60-P


