[Federal Register Volume 61, Number 38 (Monday, February 26, 1996)]
[Rules and Regulations]
[Pages 7178-7184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4203]




[[Page 7177]]

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Part IV





Department of Transportation





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Research and Special Programs Administration



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49 CFR Part 107



Hazardous Materials Pilot Ticketing Program; Final Rule

  Federal Register / Vol. 61, No. 38 / Monday, February 26, 1996 / 
Rules and Regulations   

[[Page 7178]]


DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 107

[Docket No. HM-207E, Amdt No. 107-36]
RIN 2137-AC70


Hazardous Materials Pilot Ticketing Program

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

ACTION: Final rule.

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SUMMARY: To streamline administrative procedures, cut costs, and reduce 
regulatory burdens on persons subject to Federal hazardous materials 
transportation law, RSPA is implementing a pilot program for ticketing 
of certain hazardous materials transportation violations. RSPA will 
issue tickets for violations that have little or no direct impacts on 
safety. Persons receiving a ticket may pay the ticket, respond 
informally to RSPA or request a formal hearing before a Department of 
Transportation Administrative Law Judge (ALJ). Penalties will be 
substantially reduced for persons who elect to pay the amounts assessed 
in the tickets.
    This final rule is consistent with the recommendation in the 
National Performance Review (DOT02.01) to streamline the enforcement 
process by implementing pilot programs to offer greater flexibility in 
enforcement methods. RSPA's pilot ticketing program will cut costs, 
simplify the processing of certain Hazardous Materials Regulations 
(HMR) violations, and achieve compliance through more efficient and 
effective processes. The pilot ticketing program allows recipients to 
more easily respond to allegations of HMR violations.

EFFECTIVE DATE: May 15, 1996.

FOR FURTHER INFORMATION CONTACT: John J. O'Connell, Jr., Director, 
Office of Hazardous Materials Enforcement, (202) 366-4700; or Nancy E. 
Machado, Office of the 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

    The Research and Special Programs Administration (RSPA) is the 
administration within the Department of Transportation (DOT) primarily 
responsible for implementing the Federal hazardous material 
transportation law (Federal hazmat law), 49 U.S.C. 5101-5127. RSPA does 
this by issuing and enforcing the Hazardous Materials Regulations 
(HMR), 49 CFR Parts 171-180. Under delegations from the Secretary of 
Transportation [49 CFR Part 1], the authority for enforcement under 
Federal hazardous materials transportation law (Federal hazmat law), 49 
U.S.C. 5101-5127, is shared by RSPA and each of the four modal 
administrations: the Federal Highway Administration, the Federal 
Railroad Administration, the Federal Aviation Administration, and the 
United States Coast Guard. RSPA has primary jurisdiction over packaging 
manufacturers, reconditioners, and retesters (except with respect to 
bulk packagings, which are the responsibility of the applicable modal 
administration) and a shared authority over shippers of hazardous 
materials. RSPA does not enforce regulations applicable exclusively to 
motor carriers, rail carriers, air carriers or vessel carriers.
    RSPA's Office of the Chief Counsel (OCC) may initiate 
administrative proceedings for violations of the HMR, and these 
proceedings may result in a civil penalty, an order directing 
compliance actions, or both. 49 CFR 107.307. Administrative proceedings 
are initiated by mailing a notice of probable violation (NOPV) to a 
person believed to have violated the HMR. 49 CFR 107.311. The notice 
specifies the alleged violation(s) of the HMR, states the proposed 
penalty, and includes a copy of the inspection/investigation report. 
Within 30 days of receiving the notice, the recipient of the notice may 
admit the allegations by paying the proposed penalty, make an informal 
response, or request a formal hearing. 49 CFR 107.313, 107.315.
    The recipient who chooses to respond informally submits a written 
response to the OCC to contest the alleged violations or the proposed 
penalty. The OCC considers the inspection report, the response, and any 
additional evidence obtained to determine whether the recipient 
committed the alleged violations and, if so, the appropriate penalty in 
accordance with the statutory criteria for penalty determination, 49 
U.S.C. 5123(c). See also RSPA's civil penalty guidelines at 60 FR 12139 
[March 6, 1995]. If the recipient requests an informal conference, an 
opportunity is provided to supplement the written response in person or 
by telephone with the OCC attorney and the inspector. Information 
obtained by the OCC during the informal conference becomes part of the 
case file. The Chief Counsel then issues an order finding a violation 
or violations and, for each violation found, assesses a civil penalty. 
The order may be appealed to the RSPA Administrator. See generally 49 
CFR 107.317, 107.325(b).
    Alternatively, the recipient may request a formal administrative 
hearing on the record before an ALJ from DOT's Office of Hearings. At 
the conclusion of the hearing, the ALJ determines whether the alleged 
violations have been committed and, if so, imposes a penalty in 
accordance with the statutory assessment criteria. Either party may 
appeal a decision of the ALJ to the RSPA Administrator. See generally 
49 CFR 107.319, 107.325(a).
    At any time during an informal or a formal proceeding, RSPA and the 
recipient of the notice may agree upon an appropriate resolution of the 
case. 49 CFR 107.327.

II. Proposed Rule

    On August 21, 1995, RSPA published a notice of proposed rulemaking 
(NPRM) under Docket HM-207E [60 FR 43430] seeking public comment on a 
proposal to implement a pilot program for ticketing certain violations 
of the HMR. On October 17, 1995, RSPA extended the comment period for 
an additional 30 days. See 60 FR 53729.
    Under the proposed rule, the Associate Administrator for Hazardous 
Materials Safety would be authorized to issue tickets for certain HMR 
violations that are currently handled through the civil penalty 
process. Violations eligible for inclusion in the pilot ticketing 
program would be those that do not have a substantial impact on safety. 
Because this program is designed to ease administrative and regulatory 
burdens on persons subject to enforcement proceedings under the HMR, 
violations currently eligible, under 49 CFR 107.309, for letters of 
warning generally would not be included in the pilot ticketing program.
    The NPRM contained a proposal for a two-year pilot program. At the 
end of two years, RSPA would evaluate the program in terms of cost 
savings, time savings, and impact on the effectiveness of its 
compliance program. The proposed rule also suggested a number of 
violations for inclusion in the pilot ticketing program, including, 
among others, operating under an expired exemption, failing to 
register, failing to maintain training records, and failing to file 
incident reports. RSPA indicated that, based on comments received and 
experience gained through administration of the pilot ticketing 
program, additional types of violations might be added to the program. 
These violations would not be processed under the pilot ticketing 
program if 

[[Page 7179]]
more serious violations also are alleged. Furthermore, a previous 
ticketing violation will be considered a ``prior'' violation in the 
event of a future violation of the HMR by the same party.
    In the proposed rule, RSPA indicated an expectation that the 
Associate Administrator for Hazardous Materials Safety would delegate 
ticketing authority to the Director, Office of Hazardous Materials 
Enforcement (OHME), who may redelegate that authority. RSPA field 
inspectors would conduct inspections as at present. Supervisory 
inspectors then would evaluate field inspector reports and issue 
tickets to parties when appropriate. Consequently, tickets would not be 
issued on the spot by inspectors following an inspection but would be 
issued shortly thereafter. The ticketing process would be limited to 
those cases involving violations identified as meeting safety risk 
criteria for ticketing established by the Associate Administrator.
    A ticket would include a statement of the facts supporting the 
alleged violation. In addition, the ticket would set forth the maximum 
penalty provided by statute, the proposed penalty determined according 
to the RSPA civil penalty guidelines, see 60 FR 12139 [March 6, 1995], 
and the ticket penalty amount. The ticket would state that the 
recipient must pay the penalty or request a hearing within 30 days of 
receipt of the ticket.
    RSPA proposed that the civil penalty contained in the ticket would 
be substantially less than the penalty that would be proposed under 
current procedures or that could be imposed by an ALJ at a hearing. 
RSPA also stated that if the recipient pays the ticket amount and 
states that action to correct the violation has been taken, the matter 
would be closed and there would be no further agency action. If the 
recipient elects not to pay the ticket and requests a hearing, RSPA 
would forward the case file to a Coast Guard Hearing Officer who would 
review the case in accordance with Coast Guard procedures set forth at 
33 CFR 1.07. The Hearing Officer would not be bound by the reduced 
penalty amount in the ticket and could impose a civil penalty as high 
as the proposed penalty determined under RSPA's civil penalty 
guidelines. The Hearing Officer's factual findings and legal 
conclusions in a particular case would apply solely to that case. A 
person could appeal the decision of the Hearing Officer to the 
Commandant, United States Coast Guard.
    RSPA also stated in the proposed rule that a recipient would waive 
a right to a hearing by failing to respond to the ticket within 30 
days. Moveover, failure to respond would be deemed an admission of the 
violation, and the reduced penalty would be owed to RSPA. An unpaid 
penalty or a penalty imposed by the Coast Guard Hearing Officer or the 
Commandant on appeal would constitute a debt owed to the United States 
Government.

III. Discussion of Comments

    RSPA received 31 written comments on the NPRM. The comments were 
submitted by chemical manufacturing companies, trade associations, 
transporters and private individuals. Commenters uniformly supported 
RSPA's efforts to streamline administrative procedures, cut costs and 
reduce regulatory burdens.
    Approximately half of the commenters supported RSPA's proposal but 
with various recommended changes. The remainder opposed the proposal, 
and some suggested alternative means of improving current enforcement 
procedures.
    The commenters predominantly addressed the following issues: (1) 
Violations under the pilot ticketing program; (2) authority to issue 
tickets; (3) the time-frame for issuing a ticket; (4) the time-frame 
for responding to a ticket; (5) the option to respond informally; (6) 
processing by Coast Guard Hearing Officers; (7) civil penalty amounts; 
and (8) reduced cost/burden.
    A detailed discussion of the comments, and RSPA's response to them, 
is provided in the following summary.

A. Violations Under the Pilot Ticketing Program

1. Impact on Safety
    RSPA received numerous comments concerning RSPA's statement in the 
NPRM that, under the pilot ticketing program, it would issue tickets 
for violations that do not have ``substantial impacts'' on safety. RSPA 
stated that these violations might include, among others, operating 
under an expired exemption, failing to register, failing to maintain 
training records, and failing to file incident reports.
    The commenters generally questioned why the agency would expend 
limited resources on enforcing regulations that do not have substantial 
impacts on safety. Several suggested that the regulations in question 
either be eliminated or that enforcement efforts with respect to 
violations of those regulations be limited to the issuance of warning 
letters.
    RSPA disagrees that these regulations should be deleted from the 
HMR or that enforcement actions should be limited to warning letters. 
The registration, exemption renewal and training record requirements 
are mandated by Federal hazmat law, which also mandates that a civil 
penalty be imposed for violations of any provisions of that law or the 
HMR. In addition, although violations of these regulations, in and of 
themselves, may not have a substantial or direct impact on safety, 
their enforcement has important, indirect effects on safety.
    An exemption is an official authorization to do something, for a 
two-year period, that is not authorized under the HMR. 49 U.S.C. 
5117(a)(2). See also 49 CFR 107.119(a). Renewal is necessary to keep 
the exemption in effect and to allow RSPA to ascertain that practices 
authorized under the exemption still provide an equal or greater level 
of safety than the HMR. As part of the renewal process, an application 
must contain all relevant shipping and accident experience related to 
activities under an exemption. 49 U.S.C. 5117(b). See also 49 CFR 
107.105(a)(5).
    The failure of hazardous materials offerors or transporters to 
register with RSPA, when required, affects RSPA's ability to identify 
and monitor those who are subject to the registration requirements. It 
also affects RSPA's ability to collect fees that are distributed for 
public sector planning and training for States, Indian tribes and local 
communities, to deal with hazardous materials emergencies, particularly 
those involving transportation. See 49 U.S.C. 5108(g); 49 CFR Part 110. 
These State and local programs affect safety. Failure to register 
directly affects these programs.
    Failing to maintain training records, similarly, does not directly 
impact safety. Nevertheless, training records are the means of 
verifying that hazmat employees have been trained to recognize and 
identify hazardous materials, have knowledge of specific requirements 
of the HMR applicable to functions they perform, and have knowledge of 
emergency response information, self-protection measures and accident 
prevention methods and procedures. Federal hazmat law states:

    After completing the training, each hazmat employer shall 
certify, with documentation the Secretary of Transportation may 
require by regulation, that the hazmat employees of the employer 
have received training and have been tested on appropriate 
transportation areas of responsibility * * *

49 U.S.C. 5107(c). See also 49 CFR 172.704(d). Unquestionably, the 
training required under the HMR directly impacts safety, and the 
training records 

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requirement enables verification that the training is being conducted.
    Generally, failing to file incident reports also does not directly 
impact safety. Nonetheless, RSPA requires that incident reports be 
filed as a means for it to evaluate the effectiveness of its regulatory 
program and to determine the need for regulatory changes to address new 
or emerging hazardous materials transportation safety problems. The 
requirement to file incident reports directly supports RSPA's safety 
initiatives and is one of the only means for RSPA to obtain detailed 
information concerning hazardous materials incidents.
    As supported by the above discussion, RSPA does not agree that 
regulations that do not have a direct or substantial impact on safety, 
in and of themselves, necessarily should be deleted from the HMR or 
enforced only through the issuance of warning letters.
2. Definitive List of Violations Subject to Ticketing
    Five commenters asked that RSPA establish a definitive list of 
violations subject to the pilot ticketing program. RSPA believes that 
there is a legitimate need for flexibility during the initial two years 
of this program. Consequently, RSPA will not establish a definitive 
list of violations, but will begin the program by addressing the 
violations discussed above. Based on experience gained through 
administration of the pilot ticketing program, additional types of 
violations may be added or certain types of violations deleted from the 
program. At the end of the two-year pilot program, RSPA will evaluate 
the program in terms of cost savings, time savings, and effectiveness.
    Finally, at the request of one commenter, RSPA wishes to clarify 
that tickets will not be issued for violations it believes to be 
willful.

B. Authority To Issue Tickets

    One commenter asked that RSPA clarify who would issue tickets under 
the pilot program. Another commenter expressed concern that RSPA might 
delegate ticketing authority to ``others,'' including States. The NPRM 
indicated that the Associate Administrator for Hazardous Materials 
Safety would issue tickets. It is common practice to provide authority 
in regulations to the highest level agency official responsible for a 
particular program. It is then that official's choice whether to retain 
that authority or to delegate it. Presently, it is contemplated that 
the Associate Administrator will delegate this authority to the 
Director, OHME, who will delegate this authority to OHME supervisory 
inspectors. RSPA does not intend to delegate ticket-writing authority 
to any entity outside the agency. Although States, local governments 
and Indian tribes often incorporate the HMR by reference into their own 
regulations, they usually do not incorporate RSPA's procedural 
regulations but instead use their own existing procedures for handling 
violations of State and local and Indian tribe regulations.
    Three commenters also expressed concern that the proposed pilot 
ticketing program would lead to a ticket-writing frenzy by RSPA 
inspectors, who would find it easy to write tickets in order to provide 
a tangible record of the inspectors' enforcement activities. One of the 
three commenters stated that the program may encourage inspectors to 
focus on ``perceived non-threatening technical violations that have in 
the past often been cooperatively and summarily addressed.''
    RSPA does not require its inspectors to initiate a certain number 
of enforcement actions, and job performance is not measured by the 
number of enforcement actions that result from their inspections. Also, 
at the inspector level, discovery of ticketing or other types of 
violations results in the same amount of work for that inspector. 
Consequently, there is no incentive for an inspector to focus on 
ticketing violations to the exclusion of other, more serious 
violations.

C. Time-Frame for Issuing a Ticket

    Several commenters were concerned that the NPRM did not specify a 
time-frame within which tickets would be issued after the agency's 
discovery of an apparent violation. One commenter suggested that RSPA 
issue tickets within 60 days of discovery of an apparent violation. 
RSPA agrees that establishing a goal for the timely issuance of tickets 
would be useful to both the agency and the regulated community. 
Consequently, RSPA will endeavor to issue tickets as expeditiously as 
possible, generally within 60 days after an apparent violation has been 
discovered.

D. Time-Frame for Responding to a Ticket

    In the NPRM, RSPA proposed to require a response to a ticket within 
30 days of the date the ticket was received. Several commenters 
remarked that the 30-day time period was too short and asked that it be 
extended to either 45 or 60 days in order to allow sufficient time for 
the ticket recipient to investigate the violations alleged in the 
ticket. One commenter remarked that 30 days would not be sufficient 
time for a ticket to ``find its way through [an] organization to the 
right place to be either appealed or paid.'' Others cited mail delays, 
holidays and business travel as reasons why the response time should be 
longer than 30 days. RSPA agrees that a 30-day response time may be too 
short in some instances and, therefore, agrees that 45 days is a more 
suitable time-frame for responding to a ticket.

E. Option to Respond Informally; Processing by Coast Guard Hearing 
Officers

    Numerous commenters objected to the two limited options for 
responding to a ticket, as proposed in the NPRM. RSPA proposed to allow 
persons to either pay the ticket or to request a hearing before a Coast 
Guard Hearing Officer who would review the case in accordance with 
Coast Guard procedures. One commenter strongly recommended that DOT 
consider an intermediate option for resolving tickets prior to 
burdensome, costly, last-resort court proceedings. Another stated that 
the two-year pilot program is worthwhile, but that the proposed rule 
should be modified to ensure that due process rights are preserved 
where there is a reasonable basis to dispute alleged violations. This 
commenter asked that RSPA's pilot ticketing program include procedures 
for filing an informal response or request for hearing under RSPA's 
current informal response and hearing procedures at 49 CFR 107.317 and 
49 CFR 107.319, respectively. The commenter added that the informal 
response option eliminates the need to engage an attorney and to go 
through the costly hearing process.
    Many of these same commenters, in addition to others, also objected 
to RSPA's proposal to forward cases to Coast Guard Hearing Officers for 
processing under Coast Guard procedures where a person elects not to 
pay a ticket and requests a hearing. These objections were based on the 
fact RSPA's proposal would require the industry to familiarize itself 
with a new set of procedures, thereby increasing the regulatory burden 
on the industry. Also, many commenters questioned the Coast Guard's 
familiarity with the HMR to the extent it applies to transportation 
other than by water. One commenter stated that RSPA's proposal should 
be modified to include the right to appeal to the RSPA Administrator, 
rather than to the Commandant of the Coast Guard, in order to have some 
uniformity in penalty amounts for similar violations. Another commenter 
stated that the OCC and DOT's ALJs are well qualified to evaluate the 
substance of HMR 

[[Page 7181]]
violations and to assess appropriate penalty levels and should be 
involved in the pilot ticketing program rather than the Coast Guard.
    RSPA does not agree with those commenters who question Coast Guard 
Hearing Officers' ability to efficiently process RSPA ticketing cases. 
The HMR requirements with respect to exemption renewal, registration, 
incident reporting and training records apply to, among others, 
carriers by vessel. Nevertheless, after reviewing all the comments, 
RSPA has decided that it would be more efficient and cost-effective, 
and in the interest of the industry and the agency, to keep the pilot 
ticketing program within RSPA and to use essentially the same current 
procedures outlined above, if a person elects to contest a ticket. 
Specifically, if a person elects to contest a ticket, that person may 
do so, within 45 days of receiving the ticket, by making an informal 
response under 49 CFR 107.317 or requesting a formal hearing under 49 
CFR 107.319.
    The ticket will be the functional equivalent of an NOPV, and 
contested matters will be handled by the OCC as at present. The OCC 
will not be bound by the reduced penalty amount shown on the ticket and 
could impose a penalty as high as the proposed penalty determined under 
RSPA's civil penalty guidelines, which is also shown on the ticket. In 
no case will the OCC seek a penalty greater than the highest penalty 
amount shown on the ticket.
    Anyone choosing to contest a ticket will have the case processed by 
the OCC as at present. In this way, RSPA provides a streamlined process 
for those who do not wish to contest an alleged violation and leaves 
the present system intact for those who wish to contest an alleged 
violation and avail themselves of the current, familiar procedures.

F. Civil Penalty Amounts

1. Amount of Penalty Reductions
    RSPA stated in the NPRM that penalties under the pilot ticketing 
program would be ``substantially less than the penalty that would be 
proposed under current procedures or that could be imposed by an ALJ at 
a hearing.'' Several commenters noted that RSPA did not quantify the 
percentage or dollar amount of the reduced penalties. Two commenters 
stated that the key to a successful pilot ticketing program is 
substantially reduced penalties that serve as an inducement for 
companies to accept civil penalty responsibility in return for 
eliminating costs associated with contesting the violation. Commenters 
suggested that penalties assessed under the pilot ticketing program be 
at least 50 percent less than the penalties that would be assessed 
under current procedures.
    RSPA agrees that penalties under the pilot ticketing program should 
be sufficiently low to provide an incentive to pay. Therefore, RSPA 
will continue to calculate a penalty as it does under its current 
procedures and guidelines, but it will reduce that penalty by 50 
percent where the violation at issue is processed under this program. 
Nevertheless, the ticketing program is a pilot program and RSPA later 
may decide to reduce ticketing penalties by more or by less than 50 
percent of the penalty calculated under current procedures and 
guidelines, based on experience with the program. In no case will a 
penalty be less than $250.
    One commenter suggested that RSPA waive or reduce penalties even 
further when ticket recipients demonstrate compliance, within a 
specific time period, with the HMR. Federal hazmat law requires that a 
penalty be assessed where a violation of the regulations occurs. 
Specifically, Section 5123 of Federal hazmat law states:

    A person that knowingly violates this chapter or a regulation 
prescribed or order issued under this chapter is liable to the 
United States Government for a civil penalty of at least $250 but 
not more than $25,000 for each violation.

49 U.S.C. 5123.
2. Incentives to Pay or Not Pay Tickets
    Several commenters voiced concern regarding RSPA's proposal to 
assess penalties under the pilot ticketing program that are 
substantially less than the penalties that would be proposed under 
current procedures or that could be imposed by an ALJ at a hearing. 
They stated that the disparity in civil penalty amounts, plus the 
threat of having the penalty increase if a person contests a ticket, 
serves to create an economic incentive to simply pay the ticket despite 
the violation history that doing so would create. Several other 
commenters reached the opposite conclusion and stated that the 
disparity would not create an economic incentive to pay the ticket 
because paying the penalty would affect one's violation history and 
could result in higher penalties for future violations. Instead, these 
commenters predicted a rise in the numbers of hearings and suggested 
that, to avoid this result, RSPA not count ticketing violations as 
prior violations. Some commenters also voiced concern that lower 
penalties would provide an economic incentive for companies not to 
comply with the HMR; in other words, it would cost less to pay the 
penalty than to comply with the HMR.
    RSPA does not agree that reduced penalties for ticketing violations 
will be an economic incentive to pay tickets at the expense of one's 
violation history. The pilot ticketing program, with its reduced 
penalties, provides a streamlined procedure for those who might not 
dispute that a violation has occurred--for example, failure to register 
or to renew an exemption--but who would dispute the proposed penalty, 
under current procedures, as too high. Under the pilot ticketing 
program, these people have the option of admitting the violation and 
paying a substantially lower civil penalty. Because RSPA has decided, 
in response to numerous comments, to authorize an informal response and 
to leave the pilot ticketing program within RSPA, those who dispute a 
ticket can choose to make an informal response or they may request a 
formal hearing and the case will be handled under current OCC 
procedures. Consequently, lower ticket penalties provide an opportunity 
for those who do not contest the violation but who would contest the 
amount of the penalty under current procedures to pay lower ticket 
penalties and avoid OCC involvement. Nevertheless, any person who 
receives a ticket may choose to have the case processed under existing 
OCC procedures.
    Likewise, RSPA does not agree that counting ticketing violations as 
prior violations in future cases will result in an increased number of 
requests for formal hearings, or even in an increase in the number of 
informal responses. Under current OCC procedures, the violations that 
have been identified for processing under the pilot ticketing program 
already count as prior violations. Indeed, Federal hazmat law requires 
RSPA to consider violation histories when assessing civil penalties. 49 
U.S.C. 5123.
    In the NPRM, RSPA proposed to continue counting ticketing 
violations as prior violations, and RSPA reaffirms that position here. 
Nevertheless, RSPA agrees that ticketing violations should be given 
less weight, in the event of future violations, than more serious non-
ticketing violations. Therefore, RSPA intends initially to give prior 
ticketing violations only one-half the weight of prior non-ticketing 
violations. In the future, RSPA may decide to give more or less weight 
to ticketing violations as it gains experience with this pilot program.
    Finally, RSPA does not agree that lower ticket penalties will 
provide an economic incentive for people not to comply with the HMR. 
The amount of the penalty, the violation history that will result from 
non-compliance, and 

[[Page 7182]]
the processing of repeat violations by the OCC should be incentive 
enough to comply with the HMR.
3. Penalty Guidelines
    Two commenters questioned whether using RSPA's March 6, 1995 civil 
penalty guidelines as proposed in the NPRM is contrary to RSPA's own 
pronouncements regarding the meaning and use of its guidelines. One 
commenter noted that RSPA proposed to have the ticket include ``the 
proposed penalty determined according to the RSPA civil penalty 
guidelines'' but that RSPA stated in the preamble to the guidelines 
that they were ``merely informational, [and] not finally determinative 
of any issues or rights, and do not have the force of law.'' 60 FR 
12139. The commenter questioned whether utilizing the penalty 
guidelines to discourage ticket recipients from contesting alleged 
violations converts those guidelines into determinative rules under 
United States Telephone Association v. FCC, 28 F.3d 1232 (D.C.Cir. 
1994) and Used Equipment Sales, Inc. v. Department of Transportation, 
54 F.3d 862 (D.C. Cir 1995).
    RSPA did not intend to imply in the NPRM that the penalty 
guidelines would be used in any way that differs from current 
procedure. As noted in the preamble to the penalty guidelines:

    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 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.

60 FR 12139. At the time the penalty guidelines final rule and the NPRM 
in this matter were published, RSPA was aware of the D.C. Circuit Court 
opinion in United States Telephone Ass'n v. FCC, cited above. RSPA 
reviewed the FCC case and discussed, in the preamble to the penalty 
guidelines final rule, why the penalty guidelines are a policy 
statement and, therefore, not subject to the notice and comment 
requirements of the Administrative Procedure Act, 5 U.S.C. 551 et seq. 
See 60 FR 12139.
    In fact, RSPA published its guidelines as an informational appendix 
to its rules and not as a regulation. Also, RSPA does not use its 
guidelines in a rote fashion to automatically determine a proposed 
penalty but instead applies the statutory criteria and the guidelines 
to all of the particular evidence in each case to arrive at a proposed 
penalty. Consequently, use of RSPA's penalty guidelines as a starting 
point when assessing civil penalties either under current procedures or 
under the pilot ticketing program does not turn the guidelines into 
rules that would require notice and comment. RSPA's actions are 
consistent with both of the cited cases.

G. Reduced Cost/Burden

    A significant number of commenters stated that the pilot ticketing 
program, as proposed, would not accomplish RSPA's stated goals of 
streamlining administrative procedures, cutting costs and reducing 
regulatory burdens on persons subject to the HMR. These commenters said 
that the pilot ticketing program, as proposed, could be 
counterproductive and would ultimately create another layer of 
administrative procedures, add costs and increase regulatory burdens on 
the industry. Many commenters thought that the pilot ticketing program, 
as proposed, would unnecessarily complicate the enforcement process for 
ticketing violations. Many commenters stated that they did not see any 
real savings to either the Federal Government or the regulated industry 
under the proposal.
    As discussed above, RSPA agrees that the pilot ticketing program, 
as proposed, would have added another layer of procedures and might not 
have resulted in the cost savings RSPA originally anticipated. 
Consequently, RSPA has modified the proposal as outlined above, i.e., 
RSPA will keep the pilot ticketing program within the agency and will 
continue to have the OCC process contested cases under current 
procedures. RSPA believes that this streamlined procedure will result 
in the cost savings and reduced regulatory burden that RSPA originally 
anticipated when it published its proposal.
    Specifically, anyone who opts to pay a ticket will realize 
immediate cost savings in that the proposed penalty will be half of 
what it would have been under current procedures. Also, the ticket 
recipient avoids the need to make a detailed written response to the 
agency (other than a statement of corrective action) and avoids the 
subsequent written and oral communications that arise during OCC 
processing of cases. The formal hearing process is bypassed, and legal 
fees are avoided. Furthermore, there is no OCC or post-ticket OHME 
involvement in the enforcement action where a ticket recipient opts to 
pay a ticket. The OCC avoids having to issue an NOPV, hold an informal 
conference, respond to compromise offers, issue an order, participate 
in ALJ proceedings, draft a decision on appeal, and issue a close-out 
letter. OHME avoids involvement in the informal conference and formal 
hearings, and will not have to interact with the OCC on factual and 
technical issues.
    Where a ticket is contested, current procedures would apply. 
Nevertheless, there will be some savings to the OCC who will not be 
required to issue an NOPV but can rely on the ticket to have provided 
notice of the alleged violations to the ticket recipient. Furthermore, 
when the OCC receives a case from OHME, the package will not only 
contain the ticket but a response to the ticket which may set forth 
corrective action and may contain a compromise offer. This information 
will allow the OCC to begin processing the case at a more advanced 
stage than otherwise would be the case and will reduce overall 
processing time.

H. Miscellaneous

    In discussing the pilot ticketing program, one commenter made two 
statements that require a response. First, the commenter stated that 
the NPRM is silent on the consequences of paying a civil penalty 
without ``the requested admission of guilt.'' RSPA does not require an 
admission of guilt either under the pilot ticketing program or under 
current procedures. In either case, when a person pays a civil penalty, 
the case is closed and counts as a prior violation in the event of a 
future violation of the HMR. No admission of guilt is required.
    The same commenter questioned whether the agency will require 
evidence of corrective action under the 

[[Page 7183]]
pilot ticketing program. RSPA currently requests and encourages persons 
who have violated the HMR to submit evidence of corrective action to 
the agency. RSPA will continue this practice under the pilot ticketing 
program. The exit briefing form that RSPA inspectors leave with a 
person at the end of an inspection contains language encouraging the 
submission of documented corrective action to the agency as soon as 
possible. The ticket, like an NOPV, will also contain similar language. 
In the event that a ticket is paid but no evidence of corrective action 
has been submitted, the agency will send a letter to the ticket 
recipient again encouraging the submission of documented corrective 
action--just as it does in non-ticketing cases where payment is made in 
response to an NOPV. Under current procedures, RSPA receives some 
documented corrective action in virtually all of its enforcement cases.
    Several commenters also questioned the relationship between RSPA's 
pilot ticketing program and tickets issued for violations of State and 
Federal motor carrier safety regulations. As stated above, the 
authority for enforcement under Federal hazmat law, 49 U.S.C. 5101-
5127, is shared by RSPA and each of the four modal administrations. 
RSPA has primary jurisdiction over packaging manufacturers, 
reconditioners and retesters (except with respect to single-mode bulk 
packagings, which are primarily the responsibility of the applicable 
modal administration) and a shared authority over shippers of hazardous 
materials. RSPA does not enforce Federal or State motor carrier safety 
regulations. To the extent that motor carriers are affected by RSPA's 
pilot ticketing program, it generally will be because of: (1) Their 
shipper activities; (2) their failure to comply with the HMR's carrier 
incident reporting requirements; or (3) their failure to comply with 
the HMR's registration requirements.

IV. 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 is not 
subject to review by the Office of Management and Budget. The rule is 
not significant according to the Regulatory Policies and Procedures of 
the Department of Transportation (44 FR 11034).
    The changes adopted in this rule do not result in any additional 
costs to persons subject to the HMR, but result in modest cost savings 
to a small number of them and to the agency. Because of the minimal 
economic impact of this rule, preparation of a regulatory impact 
analysis or a regulatory evaluation is not warranted.

Executive Order 12612

    This final rule has been analyzed in accordance with the principles 
and criteria in Executive Order 12612 (``Federalism'') and does not 
have sufficient Federalism impacts to warrant the preparation of a 
federalism assessment.

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 does not 
impose any new requirements on persons subject to the HMR; thus, there 
are no direct or indirect adverse economic impacts for small units of 
government, businesses or other organizations.

Paperwork Reduction Act

    There are no new information collection requirements in this final 
rule.

Regulation Identifier Number

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN number contained in the heading 
of this document can be used to cross-reference this action with the 
Unified Agenda.

List of Subjects in 49 CFR Part 107

    Administrative practice 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, 1.53.

    2. In Sec. 107.307, paragraph (a) is revised to read as follows:


Sec. 107.307  General.

    (a) When the Associate Administrator for Hazardous Materials Safety 
and the Office of the Chief Counsel have reason to believe that a 
person is knowingly engaging or has knowingly engaged in conduct which 
is a violation of the Federal hazardous material transportation law or 
any provision of this subchapter or subchapter C of this chapter, or 
any exemption, or order issued thereunder, for which the Associate 
Administrator for Hazardous Materials Safety or the Office of the Chief 
Counsel exercise enforcement authority, they may--
    (1) Issue a warning letter, as provided in Sec. 107.309;
    (2) Initiate proceedings to assess a civil penalty, as provided in 
either Secs. 107.310 or 107.311;
    (3) Issue an order directing compliance, regardless of whether a 
warning letter has been issued or a civil penalty assessed; and
    (4) Seek any other remedy available under the Federal hazardous 
material transportation law.
* * * * *


Sec. 107.307  [Amended]

    3. In addition, in Sec. 107.307, in paragraph (b), the wording 
``Office of Chief Counsel'' is revised to read ``the Associate 
Administrator for Hazardous Materials Safety and the Office of the 
Chief Counsel''.


Sec. 107.309  [Amended]

    4. In Sec. 107.309, at the beginning of paragraph (a), the wording 
``In addition to the initiation of proceedings under Sec. 107.307 for 
the imposition of sanctions or other remedies, the'' is revised to read 
``The''.
    5. Section 107.310 is added to read as follows:


Sec. 107.310  Ticketing.

    (a) For an alleged violation that does not have a direct or 
substantial impact on safety, the Associate Administrator for Hazardous 
Materials Safety may issue a ticket.
    (b) The Associate Administrator for Hazardous Materials Safety 
issues a ticket by mailing it by certified or registered mail to the 
person alleged to have committed the violation. The ticket includes:
    (1) A statement of the facts on which the Associate Administrator 
bases the conclusion that the person has committed the alleged 
violation;
    (2) The maximum penalty provided for by statute, the proposed full 
penalty determined according to RSPA's civil penalty guidelines and the 
statutory criteria for penalty assessment, and the ticket penalty 
amount; and
    (3) A statement that within 45 days of receipt of the ticket, the 
person must pay the penalty in accordance with paragraph (d) of this 
section, make an informal response under Sec. 107.317, or 

[[Page 7184]]
request a formal administrative hearing under Sec. 107.319.
    (c) If the person makes an informal response or requests a formal 
administrative hearing, the Associate Administrator for Hazardous 
Materials Safety forwards the inspection report, ticket and response to 
the Office of the Chief Counsel for processing under Secs. 107.307-
107.339, except that the Office of the Chief Counsel will not issue a 
Notice of Probable Violation under Sec. 107.311. The Office of the 
Chief Counsel may impose a civil penalty that does not exceed the 
proposed full penalty set forth in the ticket.
    (d) Payment of the ticket penalty amount must be made in accordance 
with the instructions on the ticket.
    (e) If within 45 days of receiving the ticket the person does not 
pay the ticket amount, make an informal response, or request a formal 
administrative hearing, the person has waived the right to make an 
informal response or request a hearing, has admitted the violation and 
owes the ticket penalty amount to RSPA.
    6. In Sec. 107.311, paragraph (a) is revised to read as follows:


Sec. 107.311  Notice of probable violation.

    (a) The Office of Chief Counsel may serve a notice of probable 
violation on a person alleging the violation of one or more provisions 
of the Federal hazardous material transportation law or any provision 
of this subchapter or subchapter C of this chapter, or any exemption, 
or order issued thereunder.
* * * * *
    Issued in Washington, DC on February 12, 1996 under authority 
delegated in 49 CFR part 1.
Kelley S. Coyner,
Acting Deputy Administrator, Research and Special Programs 
Administration.
[FR Doc. 96-4203 Filed 2-23-96; 8:45 am]
BILLING CODE 4910-60-P