[Federal Register Volume 60, Number 43 (Monday, March 6, 1995)]
[Rules and Regulations]
[Pages 12139-12146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5179]



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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 107

[Docket No. HM-207D; Amdt. No. 107-33]
RIN 2137-AC60


Hazardous Materials Regulations; Penalty Guidelines

AGENCY: Research and Special Programs Administration (RSPA), DOT.

ACTION: Final rule.

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SUMMARY: In this final rule, RSPA is publishing its hazardous material 
transportation enforcement civil penalty guidelines. This action 
provides the regulated community and the general public with guidance 
as to the factors RSPA considers in its hazmat penalty assessment 
process.

EFFECTIVE DATE: This rule is effective April 7, 1995.

FOR FURTHER INFORMATION CONTACT: John J. O'Connell, Jr., Office of 
Hazardous Materials Enforcement, (202) 366-4700; or Edward H. 
Bonekemper, III, Office of Chief Counsel, (202) 366-4400, Research and 
Special Programs Administration, U.S. Department of Transportation, 400 
Seventh Street, SW., Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

I. Background

    In response to a request contained in Senate Report 103-150 that 
accompanied the Department of Transportation and Related Agencies 
Appropriations Act, 1994, RSPA is publishing its hazardous material 
transportation (hazmat) enforcement civil penalty guidelines as an 
appendix to its regulations. This action will provide the regulated 
community and the general public with information concerning how RSPA 
generally begins its hazmat penalty assessment process and types of 
information that respondents in enforcement cases should provide to 
justify reduction of proposed penalties.
    RSPA enforcement personnel and attorneys use these guidelines as a 
partial means of determining a baseline civil penalty for selected 
violations of the Hazardous Materials Regulations (HMR; 49 CFR Parts 
171-180), or the Federal hazardous material transportation law (Federal 
hazmat law), 49 U.S.C. 5101 et seq. (formerly the Hazardous Materials 
Transportation Act (HMTA), 49 App. U.S.C. 1801 et seq.).
    Because these guidelines are non-binding and are periodically 
updated, they are being published as an informational appendix to the 
enforcement regulations, Subpart D of Part 107 in Title 49 of the Code 
of Federal Regulations (CFR). They are being published without public 
notice or comment because they are merely informational, are not 
finally determinative of any issues or rights, and do not have the 
force of law. Because these guidelines are merely a general statement 
of agency policy and practice and because they impose no requirements, 
no notice of proposed rulemaking is necessary.
    This rule publishes the guidelines as they existed on January 18, 
1995. In any particular case, the Office of Hazardous Materials 
Enforcement will use the version of the guidelines in effect at the 
time of its referral of a matter to the Office of the Chief Counsel for 
possible issuance of a notice of probable violation (NOPV). However, 
since the guidelines are not legally binding, later changes in the 
guidelines may be considered in a particular case before a final order 
is issued.
    On November 16, 1990, Congress amended the HMTA by passing the 
Hazardous Materials Transportation Uniform Safety Act of 1990 (HMTUSA; 
Public Law 101-615); in HMTUSA, Congress increased the maximum 
penalties for HMTA and HMR violations from $10,000 to $25,000 per 
violation per day. The guidelines reflect the culmination of a five-
year program under which RSPA increased the baseline penalty for most 
violations by 20 percent per year (on November 16 of each year between 
1990 and 1994) to effect Congress' 1990 increase of the maximum penalty 
for hazmat violations.
    These guidelines are a preliminary assessment tool used by RSPA 
personnel, and they create no rights in any party. They contain 
baseline amounts or ranges for violations that frequently have been 
cited in RSPA hazmat NOPVs. When a violation not described in the 
guidelines is encountered, it sometimes is possible to determine a 
baseline penalty by analogy to a similar violation in the guidelines.
    Even when the guidelines are applicable to a violation, the use of 
the guidelines is only a starting point. They promote consistency and 
generally are used to provide some standard for imposing similar 
penalties in similar cases. However, no two cases are identical, and 
ritualistic use of the guidelines would produce arbitrary results and, 
most significantly, would ignore the statutory mandate to consider 
several specific assessment criteria. Therefore, regardless of whether 
the guidelines are used to determine a baseline amount for a violation, 
RSPA enforcement and legal personnel must apply the statutory 
assessment criteria to all relevant information in the record 
concerning any alleged violation and the apparent violator. These 
criteria are in 49 U.S.C. 5123 and 49 CFR 107.331.
    The criteria that RSPA applies are the nature, extent, 
circumstances, and gravity of each violation; the degree of the 
violator's culpability; the violator's history of prior violations (if 
any); the violator's ability to pay; any effect of the penalty on the 
violator's ability to continue to do business, and other matters that 
justice requires. The baseline amount or range is an initial reflection 
of the nature, extent, circumstances, and gravity of the violation as 
compared with other types of violations. This amount then may be 
modified on the basis of case-specific information on nature, extent, 
circumstances, and gravity, as well as information with respect to the 
other enumerated factors.
[[Page 12140]]

    Corrective action taken by a violator to prevent a recurrence of 
similar violations is a major consideration under ``other matters that 
justice requires.'' Application of the statutory assessment criteria 
may increase or decrease the baseline penalty amount or range. The two 
economic criteria, however, are only used to decrease penalties and are 
not used to increase penalties. Conversely, a violator's history of 
prior violations is used only to increase a penalty.
    As discussed more fully below, the guidelines are not binding on 
RSPA or Department of Transportation personnel. Enforcement personnel 
and staff attorneys generally use the guidelines as a starting point 
for penalty assessment. However, they, the Chief Counsel, 
administrative law judges (ALJs), and the RSPA Administrator may 
deviate from the guidelines where appropriate, and are legally bound 
only by the statutory assessment criteria.
    RSPA is aware of a recent decision by the United States Court of 
Appeals for the District of Columbia Circuit ruling that a Federal 
Communications Commission (FCC) civil penalty schedule used in its 
forfeiture proceedings may not be published as a policy statement, but 
must be issued as a rule in accordance with the public notice and 
comment requirements of the Administrative Procedure Act, 5 U.S.C. 553 
(b), (c). United States Telephone Ass'n v. FCC, 28 F.3d 1232 (D.C. Cir. 
1994). RSPA has reviewed the Court's decision, as well as the FCC 
schedule and procedures that were the subject of the ruling, and 
believes that the ruling is not applicable to the RSPA guidelines.
    A respondent has no right to be heard in an FCC forfeiture 
proceeding other than by the FCC Bureau that initiates the forfeiture 
action. The Bureau begins a proceeding by issuing a forfeiture order. 
47 CFR 1.80(f). The respondent is permitted a written reply, and the 
Bureau issues a final administrative determination. Id. A hearing 
before an ALJ may be held, but solely at the Bureau's discretion, 47 
CFR 1.80(g); the regulations themselves state that normally the matter 
will be heard by an ALJ only when it arises in conjunction with other 
proceedings for which a formal hearing is required, id. When a hearing 
is held, the decision of the ALJ is subject to Bureau review and 
approval. 47 CFR 1.273, 1.282. The FCC schedule governs the Bureau's 
penalty determination, whether following a respondent's written reply 
or in reviewing an ALJ decision. Thus, a respondent, even where it 
fully exercised its procedural rights, would be assessed a penalty 
determined according to a methodology that it had no opportunity to 
contest. It is firmly established that a standard must be issued as a 
rule if it is ``finally determinative'' of a respondent's obligations. 
E.g., Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 537 (D.C. 
Cir. 1986).
    In contrast, the RSPA guidelines are used by the RSPA Office of the 
Associate Administrator for Hazardous Materials Safety (OHMS), at a 
staff, level to assist in developing recommended proposed penalties in 
enforcement cases. On receiving an NOPV setting forth the penalty, a 
respondent may demand a formal hearing before an ALJ. 49 CFR 107.319. 
The OHMS and RSPA's Office of Chief Counsel will employ the guidelines 
to determine the penalty for which it will argue before the ALJ; 
nonetheless, the ALJ is not bound by the guidelines, and retains his or 
her essential discretion.
    An ALJ decision that is not appealed is a final administrative 
action. 49 CFR 107.323. A decision that is appealed is reviewed by the 
RSPA Administrator. 49 CFR 107.325. On review of an ALJ decision, the 
Administrator, as well, is not bound by the OHMS guidelines. 
Accordingly, the guidelines do not ``finally determin[e]'' a 
respondent's penalty obligation; a respondent that objects to the 
proposed penalty has the right to contest the penalty fully before the 
administrative decisionmaker. The administrative decisionmaker remains 
``free to exercise his [or her] informed discretion.'' Guardian Fed. 
Savings & Loan Ass'n v. Federal Savings & Loan Ins. Corp., 589 F.2d 
658, 666, 668 (D.C. Cir. 1978).
    In addition, the FCC schedule and the RSPA guidelines differ 
significantly in the degree to which they permit deviation in their 
use. The USTA court, citing the proposition that the policy/rule 
distinction turns on ``an agency's intention to bind itself to a 
particular legal policy position,'' 28 F.3d 1234, found that in over 
300 cases, the FCC followed its fine schedule essentially without 
exception, id. at 1234-35.
    The OHMS guidelines, as opposed to a penalty schedule, consist of a 
listing of violations and the baseline penalty, or range of penalties, 
proposed for each as of November 16, 1994, as well as an explanation of 
the methodology OHMS generally uses to modify the baseline proposed 
penalty on the basis of case-specific factors required to be considered 
under 49 U.S.C. 5123(c) and 49 CFR 107.331. The guidelines presuppose 
flexibility in their application; beyond that, the OHMS or, where 
respondent has waived formal hearing, the order of the Chief Counsel 
imposing a penalty, often has gone beyond the boundaries of the 
guidelines as warranted by particular evidence from or arguments of a 
respondent. RSPA expects to publish revised guidelines annually.

II. Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    This final rule is not considered a significant regulatory action 
under section 3(f) of Executive Order 12866 and, therefore, was not 
subject to review by the Office of Management and Budget. This rule is 
not significant under the Regulatory Policies and Procedures of the 
Department of Transportation (44 FR 11034). The economic impact of this 
final rule is minimal to the extent that preparation of a regulatory 
evaluation is not warranted.

Executive Order 12612

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 12612 (``Federalism''). The 
Federal hazardous materials transportation law contains an express 
preemption provision (49 U.S.C. 5125(b)(1)) that preempts State, local, 
and Indian tribe requirements on certain covered subjects unless they 
are ``substantively the same'' as the HMR. Covered subjects are:
    (i) The designation, description, and classification of hazardous 
materials;
    (ii) The packing, repacking, handling, labeling, marking, and 
placarding of hazardous materials;
    (iii) The preparation, execution, and use of shipping documents 
pertaining to hazardous materials and requirements respecting the 
number, content, and placement of such documents;
    (iv) The written notification, recording, and reporting of the 
unintentional release in transportation of hazardous materials; or
    (v) The design, manufacturing, fabrication, marking, maintenance, 
reconditioning, repairing, or testing of a package or container which 
is represented, marked, certified, or sold as qualified for use in the 
transportation of hazardous materials. The Federal hazardous materials 
transportation law (49 U.S.C. 5125(b)(2)), as amended, provides that if 
DOT issues a regulation concerning any of the covered subjects after 
November 16, 1990, DOT must determine and publish in the Federal 
Register the effective date of Federal preemption. The effective date 
may not be earlier than the 90th day following [[Page 12141]] the date 
of issuance of the final rule and not later than two years after the 
date of issuance. This final rule is an informational appendix and 
imposes no requirements. Thus, preparation of a federalism assessment 
is not warranted.

Regulatory Flexibility Act

    I certify that this final rule will not have a significant economic 
impact on a substantial number of small entities. This rule applies to 
shippers and carriers of hazardous materials, some of which are small 
entities; however, there is no economic impact.

Paperwork Reduction Act

    There are no new information requirements in this final rule.

List of Subjects in 49 CFR Part 107

    Administrative practices and procedure, Hazardous materials 
transportation, Packaging and containers, Penalties, Reporting and 
recordkeeping requirements.

    In consideration of the foregoing, 49 CFR part 107 is amended as 
follows:

PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES

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

    Authority: 49 U.S.C. 5101-5127, 44701; 49 CFR 1.45 and 1.53.

    2. Appendix A is added to subpart D of part 107 to read as follows:

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

    I. This appendix sets forth the guidelines used by the Office of 
Hazardous Materials Safety (as of January 18, 1995) in making 
initial baseline determinations for recommending civil penalties. 
The first part of these guidelines is a list of baseline amounts or 
ranges for probable violations frequently cited in enforcement 
reports referred for action. Following the list of violations are 
general guidelines used by OHMS in making initial penalty 
determinations in enforcement cases.

II. List of Frequently Cited Violations

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               Violation description                            Section or cite             Baseline assessment 
----------------------------------------------------------------------------------------------------------------
                                             Part 107--Requirements                                             
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Failure to register as a carrier or shipper of       107.608.............................  $1,500               
 hazardous material.                                                                                            
                                                                                                                
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                                             Part 171--Requirements                                             
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Failure to inform foreign shipper and U.S.           171.12(a)...........................  7,200                
 forwarding agent of 49 CFR requirements applying                                                               
 to a shipment within the U.S.                                                                                  
Failure to file a DOT 5800.1 Hazardous Materials     171.16..............................  3,100                
 Incident Report within 30 days following an                                                                    
 unintentional release of hazardous materials in                                                                
 transportation.                                                                                                
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                             Part 172--Requirements                                             
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Shipping Papers (Secs. 172.200-172.205):                                                                        
    Failure to execute a shipping paper for a        172.201.............................  5,200                
     shipment of hazardous materials.                                                                           
    Failure to follow one or more of the three       172.201(a)(1).......................  1,200                
     approved formats for listing hazardous                                                                     
     materials on a shipping paper.                                                                             
    Failure to include a proper shipping name in     172.202.............................  1,850                
     the proper shipping description.                                                                           
    Failure to included a hazard class/division      172.202.............................  1,850                
     number in the proper shipping description.                                                                 
    Failure to include the identification number in  172.202.............................  1,200                
     the proper shipping description.                                                                           
    Using an incorrect identification number in the  172.202.............................  1,850                
     proper shipping description.                                                                               
    Using an incorrect identification number in the  172.202.............................  2,500                
     proper shipping description, that changes the                                                              
     required response information.                                                                             
    Using a shipping description that is mostly      172.202.............................  1,000                
     correct, but includes extra or incorrect words.                                                            
    Using a shipping description that includes       172.202.............................  850                  
     additional unauthorized information.                                                                       
    Using a proper shipping description not in       172.202.............................  500                  
     required sequence.                                                                                         
    Using a shipping description that is missing     172.202.............................  3,100                
     two required elements.                                                                                     
    Using a shipping description where more than     172.202.............................  4,300                
     two required elements are missing.                                                                         
    Using a shipping name and hazard class that is   172.202.............................  3,700                
     incorrect, such that the material is                                                                       
     misdescribed.                                                                                              
    Using a shipping name and hazard class that is   172.202.............................  6,200                
     incorrect, such that a material is                                                                         
     misclassified.                                                                                             
    Failure to include the total quantity of         172.202(c)..........................  430                  
     hazardous material covered by a shipping                                                                   
     description.                                                                                               
    The letters ``RQ'' are not used in the shipping  172.203(c)(2).......................  500                  
     description to identify materials that are                                                                 
     hazardous substances.                                                                                      
    Failure to include a required technical name in  172.203(k)..........................  1,200                
     parentheses for a listed generic or ``n.o.s.''                                                             
     material.                                                                                                  
    Failure to list an exemption number as part of   172.203(a)..........................  1,200                
     the required shipping description.                                                                         
    Failure to include the required shipper's        172.204(a)..........................  1,800                
     certification on a shipping paper.                                                                         
    Failure to execute the required shipper's        172.204.............................  1,000                
     certification on a shipping paper.                                                                         
Emergency Response Information Requirements (Secs.                                                              
 172.600-172.604):                                                                                              
    Providing or listing incorrect emergency         172.602.............................  2,600                
     response information with or on a shipping                                                                 
     paper (if significant difference in response).                                                             
    Providing or listing incorrect emergency         172.602.............................  1,300                
     response information with or on a shipping                                                                 
     paper (if no significant difference in                                                                     
     response).                                                                                                 
    Failure to include an emergency response         172.604.............................  2,600                
     telephone number on a shipping paper.                                                                      
    Failure to have the emergency response           172.604.............................  1,300                
     telephone number monitored while a hazardous                                                               
     material is in transportation.                                                                             
    Listing a fraudulent emergency response          172.604.............................  3,700                
     telephone number on a shipping paper.                                                                      
[[Page 12142]]                                                                                                  
                                                                                                                
    Listing an emergency response telephone number   172.604.............................  1,300                
     on a shipping paper that is not working or is                                                              
     incorrect.                                                                                                 
    Failure to provide required technical            172.604.............................  2,600                
     information when the listed emergency response                                                             
     telephone number is contacted.                                                                             
Package Marking Requirements (Secs. 172.300-                                                                    
 172.338):                                                                                                      
    Failure to mark the required identification      172.301(a)..........................  1,200                
     number on a package.                                                                                       
    Marking an incorrect identification number on a  172.301(a)..........................  1,850                
     package.                                                                                                   
    Marking an incorrect identification number on a  172.301(a)..........................  2,500                
     package that changes the appropriate emergency                                                             
     response information.                                                                                      
    Failure to mark the required shipping name on a  172.301(a)..........................  2,500                
     package.                                                                                                   
    Failure to mark the required shipping name and   172.301(a)..........................  4,200                
     identification number on a package.                                                                        
    Marking a package with an incorrect shipping     172.301(a)..........................  5,000                
     name and identification number.                                                                            
    Marking a package with an incorrect shipping     172.301(a)..........................  2,500                
     name and identification number that does not                                                               
     affect emergency response information/actions.                                                             
    Failure to include the required technical        172.301(c)..........................  1,200                
     name(s) in parentheses for a listed generic or                                                             
     ``n.o.s.'' entry.                                                                                          
    Failure to mark a package containing liquid      172.312.............................  3,700                
     hazardous materials with required orientation                                                              
     marks.                                                                                                     
    Failure to mark a package containing liquid      172.312.............................  4,200                
     hazardous materials with required orientation                                                              
     marks, when inside packagings have vented                                                                  
     closures.                                                                                                  
Package Labeling Requirements (Secs. 172.400-                                                                   
 172.450):                                                                                                      
    Failure to label a package, when required......  N/A.................................  4,300                
    Placing a label in a package when the label      N/A.................................  5,000                
     represents a hazard other than the actual                                                                  
     hazard presented by the hazardous material in                                                              
     the package.                                                                                               
    Placing a label not conforming to size           N/A.................................  1,000                
     requirements on a package.                                                                                 
    Placing a label on a package that does not       172.401(a)..........................  1,300                
     contain a hazardous material.                                                                              
    Placing a label that does not meet color         N/A.................................  600 to 2,500         
     specification requirements on a package.                                                                   
    Failure to place a required subsidiary label on  N/A.................................  2,500                
     a package, when required.                                                                                  
    Failure to provide an appropriate division       N/A.................................  5,200                
     number on an explosive label.                                                                              
Placarding Requirements (Secs. 172.500-172.560):                                                                
    Failure to placard a freight container           N/A.................................  500 to 7,500         
     containing hazardous materials.                                                                            
    Failure to properly placard a freight container  172.504.............................  8,650                
     containing Division 1.1, 1.2, or 1.3 (Class A                                                              
     or B) explosives.                                                                                          
Training Requirements (Secs. 172.700-172.704):                                                                  
    Failure to train hazmat employees in the three   172.702.............................  1,500 to 25,000      
     required areas.                                                                                            
    Failure to train hazmat employees in one of the  172.702.............................  500 and up           
     three required areas.                                                                                      
    Failure to train hazmat employees in two of the  172.702.............................  1,000 and up         
     three required areas.                                                                                      
    Failure to maintain training records...........  172.702.............................  500 and up           
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                             Part 173--Requirements                                             
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Overpack Requirements (Sec. 173.25):                                                                            
    Failure to mark an overpack with a statement     173.25(a)(4)........................  3,100                
     indicating that the inside packages comply                                                                 
     with prescribed specifications when                                                                        
     specification packaging is required.                                                                       
Reconditioner Requirements (Sec. 173.28):                                                                       
    Representing, marking, or certifying a drum as   173.28(m)(3)(ii)\1\.................  5,200 to 7,200       
     a reconditioned DOT packaging, when the drum                                                               
     did not meet a DOT specification.                                                                          
    Marking an incorrect registration number on a    173.28(m)(3)(ii)\1\.................  1,550                
     reconditioned packaging.                                                                                   
    Failure to properly conduct alternate leakage    173.28(m)(2)\1\.....................  5,000                
     test.                                                                                                      
    Representing, marking, or certifying a drum as   173.28(o)(1)\1\.....................  1,000                
     altered from one specification to another,                                                                 
     when the drum had not actually been altered.                                                               
IM Portable Tank Requirements (Sec. 173.32c):                                                                   
    Offering a hazardous material for                173.32c(a)..........................  5,200 to 7,200       
     transportation in an IM portable tank equipped                                                             
     with bottom outlets, when the material                                                                     
     contained is prohibited from being offered in                                                              
     this type of packaging.                                                                                    
    Offering an IM portable tank for transportation  173.32c(c)..........................  5,000                
     that has not been visually inspected within                                                                
     last 2\1/2\ years per 173.32b(b).                                                                          
    Offering an IM portable tank for transportation  173.32c(c)..........................  6,200                
     that has not been hydrostatically retested in                                                              
     last five years per 173.32b(a).                                                                            
    Offering an IM portable tank for transportation  173.32c(c)..........................  12,500               
     that has not been visually or hydrostatically                                                              
     tested as required, or failing to remove the                                                               
     safety relief valves during testing.                                                                       
    Failure to provide the required outage for a     173.32c(k)..........................  15,500               
     shipment of hazardous materials, that results                                                              
     in the release of hazardous materials.                                                                     
Cylinder Retesters (Secs. 173.23, 173.34, and                                                                   
 173.302):                                                                                                      
    Failure to remark an aluminum exemption          173.23(c)...........................  2,100                
     cylinder as a DOT 3 AL.                                                                                    
    Certifying or marking as retested a              173.34..............................  5,200 to 7,200       
     nonspecification cylinder.                                                                                 
    Marking a cylinder in or on the sidewall area    173.34(c)(1)........................  8,650                
     when not permitted by the applicable                                                                       
     specification.                                                                                             
    Failure to maintain legible markings on a        173.34(e)...........................  1,200                
     cylinder.                                                                                                  
    Failure to perform hydrostatic retesting at the  173.34(e)...........................  2,100 to 5,200       
     minimum of 5/3 times the service pressure, or                                                              
     at the minimum specified test pressure.                                                                    
    Failure to perform visual external examination.  173.34(e)(1)........................  3,100                
[[Page 12143]]                                                                                                  
                                                                                                                
    Failure to perform visual internal examination.  173.34(e)(1)........................  3,600                
    Failure to perform both visual external and      173.34(e)(1)........................  4,200                
     visual internal examinations.                                                                              
    Inability to conduct a complete visual           173.34(e)(1)........................  3,100                
     examination due to: excess paint build-up on a                                                             
     cylinder; failure to remove banding; failure                                                               
     to remove a permanent attachment; or failure                                                               
     to remove a plastic attachment that has torn                                                               
     or cracked.                                                                                                
    Failure to have a retester's identification      173.34(e)(1)(i).....................  3,600                
     number (RIN).                                                                                              
    Failure to have current authority due to         173.34)e)(1)(i).....................  2,500                
     failure to renew a retester's identification                                                               
     number.                                                                                                    
    Failure to have a retester's identification      173.34(e)(1)(i).....................  7,200                
     number and marking another RIN on a cylinder.                                                              
    Marking a RIN before successfully completing a   173.34(e)(1)(ii)....................  3,100                
     hydrostatic retest..                                                                                       
    Marking a cylinder as having been retested       173.34(e)(1)(ii)....................  8,650                
     without performing retest.                                                                                 
    Performing hydrostatic retesting without         173.34(e)(3)........................  2,100 to 5,200       
     demonstrating the accuracy of the testing                                                                  
     equipment.                                                                                                 
    Failure to hold hydrostatic test pressure for    173.34(e)(3)........................  3,100                
     30 seconds or sufficiently longer to allow for                                                             
     complete expansion.                                                                                        
    Failure to perform a second retest, after        173.34(e)(3)........................  3,100                
     equipment failure, at a pressure of 10% more                                                               
     or 100 psi more, whichever is less.                                                                        
    Exceeding 90% of test pressure prior to          173.34(e)(3)........................  850                  
     conducting test.                                                                                           
    Failure to condemn a cylinder with permanent     173.34(e)(4)........................  6,000                
     expansion of 10% or greater (5% for certain                                                                
     exemption cylinders); failure to condemn                                                                   
     cylinders with evidence of internal or                                                                     
     external corrosion, denting, bulging, or rough                                                             
     usage.                                                                                                     
    Marking an FRP cylinder with steel stamps in     Applicable Exemption................  8,650                
     the FRP area of the cylinder such that the                                                                 
     integrity of the cylinder is compromised.                                                                  
    Failure to keep records of cylinder              173.34(e)(5)........................  4,200                
     reinspection and retest.                                                                                   
    Failure to keep accurate records of cylinder     173.34(e)(5)........................  1,000 to 3,100       
     reinspection and retest.                                                                                   
    Improper marking of the RIN or retest date on a  173.34(e)5).........................  1,550                
     cylinder.                                                                                                  
    Marking a DOT 3HT cylinder with a steel stamp    173.34(e)(13)(iv)...................  5,200 and up         
     other than a low-stress steel stamp.                                                                       
    Marking a ``+'' sign on a cylinder without       173.302(c)(3).......................  3,000 to 4,300       
     determining the average or maximum wall stress.                                                            
    Representing, marking, or certifying a cylinder  N/A.................................  4,300 to 6,000       
     as meeting the requirements of an exemption,                                                               
     when the cylinder was not maintained or                                                                    
     retested in accordance with the exemption.                                                                 
Rebuilder Requirements (Sec. 173.34):                                                                           
    Representing a DOT-4 series cylinder as meeting  173.34(l)...........................  7,200                
     the requirements of the Hazardous Materials                                                                
     Regulations without being authorized to do so                                                              
     by the Associate Administrator for Hazardous                                                               
     Materials Safety.                                                                                          
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                             Part 178--Requirements                                             
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Third-Party Packaging Certifiers (General):                                                                     
    With testing completed, TPPC's certification     N/A.................................  2,100                
     directs manufacturer to improperly mark a                                                                  
     packaging (e.g., steel drum to be marked UN                                                                
     4G).                                                                                                       
Manufacturers (General):                                                                                        
    Failure to conduct drop testing from required    N/A.................................  4,200                
     distance.                                                                                                  
    Manufacturing, marking, certifying, or selling   N/A.................................  5,200 to 8,650       
     a package marked to a specification, UN                                                                    
     standard, or an exemption when applicable                                                                  
     requirements are not met.                                                                                  
    Certifying a packaging as meeting a UN standard  N/A.................................  6,000 to 10,800      
     when design qualification testing was not                                                                  
     performed.                                                                                                 
    Failure to conduct periodic testing on UN        N/A.................................  5,000 to 8,650       
     standard packaging.                                                                                        
    Failure to properly conduct design               N/A.................................  4,200                
     qualification or periodic retesting for UN                                                                 
     standard packaging.                                                                                        
    Marking, or causing the marking of, a packaging  N/A.................................  7,200                
     with the symbol of a manufacturer or packaging                                                             
     certifier other than the company that actually                                                             
     manufactured or certified the packaging.                                                                   
    Failure to keep and maintain records of design   178.601(k)(1).......................  4,200                
     qualification testing.                                                                                     
    Failure to keep and maintain records of          178.601(k)(2).......................  4,200                
     periodic retest.                                                                                           
    Manufacturing DOT specification packaging after  N/A.................................  3,000 and up         
     October 1, 1994.                                                                                           
Manufacturer Requirements--Fiberboard Boxes:                                                                    
    Manufacturing, marking, certifying, or selling   N/A.................................  4,300 to 7,200       
     a package marked to a specification, UN                                                                    
     standard, or an exemption when applicable                                                                  
     requirements are not met.                                                                                  
    Certifying packaging as meeting UN 4G standard   N/A.................................  4,300                
     when it was not properly conditioned before                                                                
     design qualification testing.                                                                              
    Failure to properly mark a fiberboard box......  N/A.................................  1,200                
Manufacturing Requirements--UN 1H1 Drums:                                                                       
    Failure to properly conduct alternate            N/A.................................  4,200                
     leakproofness test.                                                                                        
Manufacturing Requirements--DOT High-Pressure                                                                   
 Cylinders:                                                                                                     
    Manufacturing, representing, marking,            N/A.................................  6,000 to 10,800      
     certifying, or selling a DOT high-pressure                                                                 
     cylinder that was not inspected and verified                                                               
     by an approved independent inspection agency.                                                              
Manufacturing Requirements--Spec. DOT 39 Cylinders:                                                             
    Failure to have a registration number/failure    N/A.................................  3,700                
     to mark it on the cylinder.                                                                                
    Marking another company's number on a cylinder.  N/A.................................  5,000                
[[Page 12144]]                                                                                                  
                                                                                                                
    Failure to mark the date of manufacture or lot   N/A.................................  3,100                
     number on a cylinder.                                                                                      
    Failure to have a chemical analysis performed    N/A.................................  5,000                
     in the U.S. for a material manufactured                                                                    
     outside the U.S./failure to obtain a chemical                                                              
     analysis from the foreign manufacturer.                                                                    
    Failure to conduct a complete visual internal    N/A.................................  3,500 to 5,200       
     examination.                                                                                               
    Failure to conduct a flattening test...........  N/A.................................  5,200                
    Failure to conduct a burst test................  N/A.................................  5,200                
    Failure to properly conduct required test......  N/A.................................  4,200                
    Failure to maintain a required inspector's       N/A.................................  5,200                
     report.                                                                                                    
    Failure to maintain an accurate inspector's      N/A.................................  1,200 to 3,700       
     report.                                                                                                    
Manufacturing Requirements--DOT 4B Cylinders:                                                                   
    Failure to conduct a hydrostatic test by water   178.50-14...........................  5,200                
     jacket method on one cylinder out of each lot                                                              
     of 200 or less.                                                                                            
    Failure to conduct a flattening test...........  178.50-15...........................  5,200                
    Failure to conduct physical testing............  178.50-16...........................  5,200                
    Failure to properly conduct required test......  N/A.................................  4,200                
    Failure to maintain the required Inspector's     N/A.................................  5,200                
     report.                                                                                                    
    Failure to maintain an accurate Inspector's      N/A.................................  1,200 to 3,700       
     report.                                                                                                    
Manufacturing Requirements--Steel Drums:                                                                        
    Failure to pass testing conducted in plant.....  N/A.................................  5,200 and up         
    Failure to properly conduct ``solution over      N/A.................................  3,500 to 5,000       
     partial seams'' test.                                                                                      
    Failure to retain chime cuts when conducting     N/A.................................  3,100                
     ``solution over partial seams'' testing.                                                                   
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                               Other Requirements                                               
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Offeror Requirements (General):                                                                                 
    Offering a hazardous material for                N/A.................................  5,200 to 8,650       
     transportation in an unauthorized,                                                                         
     nonspecification, or nonstandard packaging.                                                                
    Offering a hazardous material for                N/A.................................  4,300                
     transportation in an unauthorized,                                                                         
     nonstandard, or nonspecification inner package.                                                            
    Offering a hazardous material for                N/A.................................  10,400               
     transportation in a packaging that leaks                                                                   
     during conditions normally incident to                                                                     
     transportation.                                                                                            
    Offering a hazardous material for                N/A.................................  5,200 to 8,650       
     transportation that is covered by an                                                                       
     exemption, without complying with its terms.                                                               
    Offering a hazardous material for                171.14..............................  3,000 and up         
     transportation in a packaging marked as                                                                    
     manufactured to a DOT specification where that                                                             
     packaging was manufactured after October 1,                                                                
     1994.                                                                                                      
Offeror requirements (Class 1 (Explosives)):                                                                    
    Failing to mark the ``EX'' approval number on a  172.320.............................  1,200                
     package containing an explosive.                                                                           
    Offering an unapproved explosive for             173.54(a) and 173.56(b).............  10,000 to 25,000     
     transportation.                                                                                            
    Offering a leaking or damaged package of         173.54(c)...........................  10,000 to 25,000     
     explosives for transportation.                                                                             
    Offering a Division 1.3 (Class B) explosive for  N/A.................................  8,400 and up         
     transportation that is misclassified as                                                                    
     Division 1.4 (Class C) explosive.                                                                          
Offeror Requirements (Class 3 (Flammable Liquid)):                                                              
    Using an incorrect marking for the flashpoint    173.118(b)\1\.......................  1,000                
     in order to be excepted from specification                                                                 
     packaging, for a flammable liquid with a flash                                                             
     point of 73 deg. Fahrenheit or higher.                                                                     
    Offering a flammable liquid with a flash point   173.119(a)(3)\1\....................  6,200                
     below 20 deg. Fahrenheit for transportation in                                                             
     an unauthorized DOT 17E drum (20/18-gauge v.                                                               
     18-gauge).                                                                                                 
    Offering a flammable liquid with a flash point   N/A.................................  3,600 to 5,200       
     of 73 deg. Fahrenheit or above in                                                                          
     nonspecification packaging, without marking                                                                
     the flash point or an indication that it was                                                               
     at or above 73 deg. Fahrenheit on the                                                                      
     packaging.                                                                                                 
Offeror Requirements (Division 6.1 (Poisonous                                                                   
 Liquids)):                                                                                                     
    Offering a poisonous liquid for transportation   173.346(a)(26)\1\...................  5,200                
     in a DOT 12A fiberboard box that was tested as                                                             
     required by Sec. 178.210-10.                                                                               
Offeror Requirements (Class 7 (Radioactive                                                                      
 Materials)):                                                                                                   
    Failure to have a valid U.S. NRC approval        173.415(c)..........................  4,300                
     certificate authorizing the use of a packaging                                                             
     as Type B (never having obtained one).                                                                     
    Failure to have a valid U.S. NRC approval        173.415(c)..........................  3,500 and up         
     certificate authorizing the use of a packaging                                                             
     as Type B (previously had one, but now                                                                     
     expired).                                                                                                  
Offeror Requirements (Portable or IM Tanks):                                                                    
    Offering a hazardous material for                173.32(e)(1)(ii)....................  6,200                
     transportation in a DOT 57 or exemption                                                                    
     portable tank that is out of test.                                                                         
    Offering a compressed gas for transportation in  173.32(e)(l)(i) 173.315(a)..........  5,200 to 8,650       
     a DOT 51 portable tank that is out of test                                                                 
     (may be higher if offeror is also owner and                                                                
     portable tank has not been tested at all, or                                                               
     not for a long time).                                                                                      
Offeror Requirements (Cylinders):                                                                               
    Offering a compressed gas for transportation in  173.301(c)..........................  5,200 to 8,650       
     a cylinder that is out of test (may be higher                                                              
     if offeror is also owner and cylinder has not                                                              
     been retested at all, or not for a long time.                                                              
    Failure to check each day the pressure of a      173.303(d)..........................  4,200                
     cylinder charged with acetylene that is                                                                    
     representative of that day's compression,                                                                  
     after the cylinder has cooled to a settled                                                                 
     temperature, or failure to keep a record of                                                                
     this test for at least 30 days.                                                                            
[[Page 12145]]                                                                                                  
                                                                                                                
    Offering a mixture of a non-hazardous material   173.1200(a)(ii)(E)..................  6,200                
     and a compressed gas as an ORM-D without                                                                   
     properly determining the internal pressure at                                                              
     equilibrium in a water bath heated to 130 deg.                                                             
     Fahrenheit.                                                                                                
Carrier Requirements:                                                                                           
    Transporting railway track torpedoes outside of  N/A.................................  6,000                
     flagging kits, in violation of E-7991.                                                                     
    Transporting explosives in a motor vehicle       177.835(i)..........................  5,200                
     containing metal or other articles or                                                                      
     materials likely to damage such explosives or                                                              
     any package in which they are contained,                                                                   
     without segregating in different parts of the                                                              
     load or securing them in place in or on the                                                                
     motor vehicle and separated by bulkheads or                                                                
     other suitable means to prevent such damage.                                                               
Exemptions:                                                                                                     
    Requested renewal of an exemption prior to       N/A.................................  2,500                
     expiration, but shipped after expiration.                                                                  
    Offered or transported a packaging or otherwise  N/A.................................  2,900                
     performed a function covered by an exemption                                                               
     after an exemption had expired (less than one                                                              
     year).                                                                                                     
    Offered or transported a packaging or otherwise  N/A.................................  3,600 to 7,200       
     performed a function covered by an exemption                                                               
     after an exemption had expired (more than one                                                              
     year).                                                                                                     
----------------------------------------------------------------------------------------------------------------
\1\Cite refers to provisions in effect September 30, 1991 (see 49 CFR Part 173, revised as of October 1, 1990). 

III. Consideration of Statutory Criteria

    A. These guidelines are used by the Office of Hazardous 
Materials Safety (OHMS) in setting initial proposed penalties for 
hazmat violations. They indicate baseline amounts or ranges for 
probable violations frequently cited in enforcement reports and set 
forth general OHMS policy for considering statutory criteria.
    B. The initial baseline determination partially considers the 
nature, extent, circumstances, and gravity of the alleged violation. 
That determination then is adjusted to consider all other evidence 
concerning the nature, extent, circumstances, and gravity of the 
alleged violation; degree of culpability; history of prior 
violations; ability to pay; effect of the penalty on ability to 
continue to do business; and such other matters as justice may 
require (a major component of which is corrective action taken by a 
respondent to prevent a recurrence of similar violations). In making 
a penalty recommendation, the baseline or range may be increased or 
decreased on the basis of evidence pertaining to these factors.
    C. The following miscellaneous factors are used to implement one 
or more of the statutory assessment criteria.

IV. Miscellaneous Factors Affecting Penalty Amounts

A. Corrective Action

    1. A proposed penalty is mitigated for documented corrective 
action of alleged violations taken by a respondent. Corrective 
action may occur: (1) After an inspection and before a Notice of 
Probable Violation (NOPV) is issued; (2) on receipt of an NOPV; or 
(3) after receipt of an NOPV (possibly after it is solicited by an 
RSPA attorney). In general, corrective action may reduce a penalty 
up to 25%. Mitigation may be taken into account in the referral memo 
or may be recommended prior to issuance of an Order by RSPA's Chief 
Counsel.
    2. The two primary factors in determining the penalty reduction 
are extent and timing of the corrective action. In other words, 
mitigation will be determined on the basis of how much corrective 
action was taken and when it was taken. Systemic action to prevent 
future violations is given greater consideration than action simply 
to remedy violations identified during the inspection.
    3. Mitigation is applied to individual violations. Thus, in a 
case with two violations, if corrective action for the first 
violation is more extensive than for the second, the penalty for the 
first will be mitigated more than that for the second.

B. Respondents That Re-Ship

    A shipper that reships materials received from another company, 
in the same packaging and without opening or altering the package, 
independently is responsible for ensuring that the shipment complies 
with Federal hazmat law, and independently may be subject to 
enforcement action if the package does not comply. Nevertheless, the 
reshipper is considered to have a lesser level of responsibility for 
compliance in those respects in which it reasonably relies on the 
compliance of the package as received. In most cases of this type, 
OHMS will discount the applicable baseline standard by about 25%. 
The specific knowledge and expertise of all parties must be 
considered in discounting for reliance on a prior shipper. This 
discount is applied before any consideration of mitigation based on 
corrective action.

C. Penalty Increases for Multiple Counts

    Under the Federal hazmat law, 49 U.S.C. 5213(a), each violation 
of the HMR and each day of a continuing violation (except for 
violations pertaining to packaging manufacture or qualification) is 
subject to a civil penalty of up to $25,000. Absent aggravating 
factors, OHMS, in its exercise of discretion, ordinarily will apply 
a single penalty for multiple counts or days of violation. In a 
number of cases, particularly those involving shippers, an inspector 
may cite two or more similar packaging violations for different 
hazardous materials. For example, the inspector may cite the same 
marking violation for two or more packages. OHMS usually will 
consider those additional violations as counts of the same violation 
and will not recommend multiples of the same baseline penalty. 
Rather, OHMS usually will recommend the baseline penalty for a 
single violation, increased by 25% for each additional violation.

D. Financial Considerations

    1. Mitigation is appropriate when the baseline penalty would (1) 
exceed an amount that the respondent is able to pay, or (2) have an 
adverse effect on the respondent's ability to continue in business. 
These criteria relate to a respondent's entire business, and not 
just the product line or part of its operations involved in the 
violation(s). Beyond the overall financial size of the respondent's 
business, the relevant items of information on a respondent's 
balance sheet include the current ratio (current assets to current 
liabilities), the nature of current assets, and net worth (total 
assets minus total liabilities).
    2. These figures are considered on a case-by-case basis. In 
general, however, a current ratio close to or below 1.0 means that 
the company may have difficulty in paying a large penalty, and may 
justify reduction of the penalty or an installment payment plan. A 
small amount of cash on hand representing limited liquidity, even 
with substantial other current assets (such as accounts receivable 
or inventory), may warrant a short-term payment plan. Respondent's 
income statement also will be reviewed to determine whether a 
payment plan is appropriate.
    3. Many companies are able to continue in business for extended 
periods of time with a small or negative net worth, and many 
respondents have paid substantial civil penalties in installments 
even though net worth was negative. For this reason, negative net 
worth alone does not always warrant reduction of a proposed penalty 
or even, in the absence of factors discussed above, a payment plan.
    4. In general, an installment payment plan may be justified 
where reduction of a proposed penalty is not, but the 
appropriateness of either (or both) will depend on the circumstances 
of the case. The length of a payment plan should be as short as 
possible, but the plan may consider seasonal fluctuations in a 
company's income if the company's business is seasonal (e.g., 
swimming pool chemical sales, fireworks sales) or if the company has 
documented specific reasons for current non-liquidity.
    5. Evidence of financial condition is used only to decrease a 
penalty, and not to increase it. [[Page 12146]] 

E. Penalty Increases for Prior Violations

    1. The baseline penalty presumes an absence of prior violations. 
If prior violations exist, generally they will serve to increase a 
proposed penalty. The general standard for increasing a baseline 
proposed penalty on the basis of prior violations is as follows:

a. One prior case--25% increase over the pre-mitigation recommended 
penalty
b. Two prior cases--50% increase over the pre-mitigation recommended 
penalty
c. Three prior cases--75% increase over the pre-mitigation 
recommended penalty
d. Four or more prior cases--100% increase over the pre-mitigation 
recommended penalty

    2. A case of prior violations closed more than five years 
previously normally will not be considered in determining a proposed 
penalty.

F. Penalty Increases for Use of Expired Exemptions

    Adjustments to the base line figures for use of expired 
exemptions can be made depending on how much material has been 
shipped during the period between the expiration date and the 
renewal date. If the company previously has been found to have 
operated under an expired exemption, the penalty is normally 
doubled. If the company has been previously cited for other 
violations, the penalty generally will be increased by about 25%.

    Issued in Washington, DC on February 27, 1995 under authority 
delegated in 49 CFR part 1.
Ana Sol Gutierrez,
Deputy Administrator, Research and Special Programs Administration.
[FR Doc. 95-5179 Filed 3-3-95; 8:45 am]
BILLING CODE 4910-60-P