[Federal Register Volume 81, Number 203 (Thursday, October 20, 2016)]
[Rules and Regulations]
[Pages 72539-72545]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25273]


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SURFACE TRANSPORTATION BOARD

49 CFR Part 1022

[Docket No. EP 716 (Sub-No. 1)]


Civil Monetary Penalty Inflation Adjustment Rule

AGENCY: Surface Transportation Board.

ACTION: Interim final rule.

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SUMMARY: The Surface Transportation Board (Board) is issuing an interim 
final rule to adjust the Board's civil monetary penalties for inflation 
pursuant to the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015. As mandated by that act, the Board is issuing 
a ``catch-up adjustment'' for its penalties and will thereafter make 
annual inflation adjustments according to a specified formula.

DATES: This interim final rule is effective on October 20, 2016.

FOR FURTHER INFORMATION CONTACT: Allison Davis: (202) 245-0378. Federal 
Information Relay Service (FIRS) for the hearing impaired: 1-800-877-
8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    On November 2, 2015, the President signed the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act), 
passed as part of the Bipartisan Budget Act of 2015, Public Law 114-74, 
129 Stat. 599. The 2015 Act further amended the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (1990 Act), Public Law 101-410, 104 
Stat. 890 (codified as amended at 28 U.S.C. 2461 note), as previously 
amended by the Debt Collection Improvement Act of 1996 (1996 Act), 
Public Law 104-134, 110 Stat. 1321, in order to improve the 
effectiveness of civil monetary penalties and to maintain their 
deterrent effect.\1\
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    \1\ A ``civil monetary penalty'' is defined by the 1990 Act as: 
``any penalty, fine, or other sanction that--(A)(i) is for a 
specific monetary amount as provided by Federal law; or (ii) has a 
maximum amount provided for by Federal law; and (B) is assessed or 
enforced by an agency pursuant to Federal law; and (C) is assessed 
or enforced pursuant to an administrative proceeding or a civil 
action in the Federal courts.'' See also 49 CFR 1022.2(b).
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    The 1996 Act required each federal agency to adopt regulations at 
least once every four years that adjust for inflation the maximum 
amount of civil monetary penalties under the statutes administered by 
the agency. In accordance with the 1996 Act, the Board increased its 
existing civil monetary penalties, which had not been adjusted for 
inflation since they were prescribed

[[Page 72540]]

in the ICC Termination Act of 1995 (ICCTA), Public Law 104-88, 109 
Stat. 803, by 10%, through a final rule issued in the main docket of 
this proceeding on October 22, 2012.
    The 2015 Act requires agencies to adjust their civil monetary 
penalties for inflation through an initial ``catch-up adjustment.'' \2\ 
The 2015 Act requires that this adjustment be issued through an interim 
final rulemaking and sets forth a specific methodology to calculate the 
adjustment. To arrive at the adjusted penalty, the agency must multiply 
the penalty amount when it was established or last adjusted by 
Congress, excluding adjustments under the 1990 Act, by a multiplier 
that is based on the percent change between the Consumer Price Index 
for all Urban Consumers (CPI-U) for the month of October in the year 
the penalty amount was established or last adjusted by Congress, and 
the October 2015 CPI-U.\3\ As mandated by statute, penalty level 
adjustments should be rounded to the nearest dollar, and the initial 
increase of penalties shall not exceed 150%.
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    \2\ Under the 2015 Act, the initial penalty adjustments were to 
take effect no later than August 1, 2016. The rules issued here will 
take effect immediately upon publication.
    \3\ The Office of Management and Budget issued guidance to 
agencies on implementing the catch-up adjustments and provided 
multipliers to adjust the penalty level based on the year the 
penalty was established or last adjusted pursuant to law. See 
Memorandum from the Office of Management and Budget, M-16-06, 
Implementation of the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015 (Feb. 24, 2016).
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    Following the catch-up adjustment, the 2015 Act then directs 
agencies to adjust their civil penalties for inflation annually, 
beginning on January 15, 2017, and no later than January 15 of every 
year thereafter. Annual inflation adjustments will be based on the 
percent change between the October CPI-U preceding the date of the 
adjustment and the prior year's October CPI-U. As with the catch-up 
adjustment, penalty level adjustments should be rounded to the nearest 
dollar.

II. Discussion

    The statutory definition of civil monetary penalty covers the civil 
penalty provisions under the Rail Carrier (Part A), Motor and Water 
Carriers (Part B), and Pipeline Carrier (Part C) provisions of the 
Interstate Commerce Act, as amended by ICCTA. The Board's civil (and 
criminal) penalty authority related to rail transportation appears at 
49 U.S.C. 11901-11908.
    The Board's penalty authority related to motor carriers, water 
carriers, brokers, and freight forwarders appears at 49 U.S.C. 14901-
14915. The Board's penalty authority related to pipeline carriers 
appears at 49 U.S.C. 16101-16106.\4\
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    \4\ The Board also has criminal penalty authority, enforceable 
in a federal criminal court. Congress has not, however, authorized 
federal agencies to adjust statutorily-prescribed criminal penalty 
provisions for inflation, and this rule does not address those 
provisions.
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    As set forth in this interim final rule, the Board is amending 49 
CFR pt. 1022 so that its regulations and civil monetary penalties 
conform to the requirements of the 2015 Act. The adjusted penalties set 
forth in the rule will apply only to violations which occur after the 
effective date of this regulation.

III. Interim Final Rule

    The interim final rule is set forth at the end of this decision. 
This interim final rule is issued without prior public notice or 
opportunity for public comment. The Administrative Procedure Act (APA), 
5 U.S.C. 553(b)(B), does not require that process ``when the agency for 
good cause finds'' that public notice and comment are ``unnecessary.'' 
Here, Congress has mandated that the agency make the catch-up inflation 
adjustment through an interim final rule. The Board has no discretion 
to set alternative levels of adjusted civil monetary penalties, because 
the amount of the inflation adjustment must be calculated in accordance 
with the statutory formula. The Board simply determines the amount of 
inflation adjustments by performing technical, ministerial 
computations. Because the Board has no discretion to do anything except 
promulgate the rule and perform ministerial computations to apply it, 
public comment would serve no useful purpose. Accordingly, the Board 
has determined that there is good cause to promulgate this rule without 
soliciting public comment and to make this regulation effective 
immediately upon publication.
    The following chart shows the relevant statutory provision and 
penalty description, the baseline penalty, the values used in the 
calculations, the relevant cap imposed by the 2015 Act for the catch-up 
adjustment,\5\ and the rounded catch-up adjustment.
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    \5\ All of the applicable penalty adjustments fell below the 
150% cap on the catch-up adjustments.

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                                        Civil monetary                                                                                  Adjusted penalty
        U.S. Code citation           penalty description    Baseline penalty  Multiplier (year)  Multiplier result     2015 Act cap          amount
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                                                              Rail Carrier Civil Penalties
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49 U.S.C. 11901(a)................  Unless otherwise                  $5,000     1.50245 (1996)             $7,512            $13,750             $7,512
                                     specified, maximum
                                     penalty for each
                                     knowing violation
                                     under this part, and
                                     for each day.
49 U.S.C. 11901(b)................  For each violation                  $500     1.50245 (1996)               $751             $1,375               $751
                                     under section
                                     11124(a)(2) or (b).
49 U.S.C. 11901(b)................  For each day                         $25     1.50245 (1996)                $38                $69                $38
                                     violation continues.
49 U.S.C. 11901(c)................  Maximum penalty for               $5,000     1.50245 (1996)             $7,512            $13,750             $7,512
                                     each knowing
                                     violation under
                                     sections 10901-10906.

[[Page 72541]]

 
49 U.S.C. Sec.   11901(d).........  For each violation             $100-$500     1.50245 (1996)          $150-$751        $275-$1,375          $150-$751
                                     under sections 11123
                                     or 11124(a)(1).
49 U.S.C. 11901(d)................  For each day                         $50     1.50245 (1996)                $75               $138                $75
                                     violation continues.
49 U.S.C. 11901(e)(1).............  For each violation                  $500     1.50245 (1996)               $751             $1,375               $751
                                     under sections 11141-
                                     11145.
49 U.S.C. 11901(e)(2).............  For each violation                  $100     1.50245 (1996)               $150               $275               $150
                                     under section
                                     11144(b)(1).
49 U.S.C. 11901(e)(3-4)...........  For each violation of               $100     1.50245 (1996)               $150               $275               $150
                                     reporting
                                     requirements, for
                                     each day.
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                                                         Motor and Water Carrier Civil Penalties
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49 U.S.C. 14901(a)................  Minimum penalty for               $1,000     1.02819 (2012)             $1,028                n/a             $1,028
                                     each violation and
                                     for each day.
49 U.S.C. 14901(a)................  For each violation               $10,000     1.02819 (2012)            $10,282                n/a            $10,282
                                     under sections 13901
                                     or 13902(c).
49 U.S.C. 14901(a)................  For each violation               $25,000     1.02819 (2012)            $25,705                n/a            $25,705
                                     related to
                                     transportation of
                                     passengers.
49 U.S.C. 14901(b)................  For each violation of    $20,000-$40,000     1.02819 (2012)    $20,564-$41,128                n/a    $20,564-$41,128
                                     the hazardous waste
                                     rules under section
                                     3001 of the Solid
                                     Waste Disposal Act.
49 U.S.C. 14901(d)(1).............  Minimum penalty for               $1,000     1.50245 (1996)             $1,502             $2,750             $1,502
                                     each violation of
                                     household good
                                     regulations, and for
                                     each day.
49 U.S.C. 14901(d)(2).............  Minimum penalty for              $10,000     1.50245 (1996)            $15,025            $27,500            $15,025
                                     each instance of
                                     transportation of
                                     household goods if
                                     broker provides
                                     estimate without
                                     carrier agreement.
49 U.S.C. 14901(d)(3).............  Minimum penalty for              $25,000     1.50245 (1996)            $37,561            $68,750            $37,561
                                     each instance of
                                     transportation of
                                     household goods
                                     without being
                                     registered.
49 U.S.C. 14901(e)................  Minimum penalty for               $2,000     1.50245 (1996)             $3,005             $5,500             $3,005
                                     each violation of a
                                     transportation rule.
49 U.S.C. 14901(e)................  Minimum penalty for               $5,000     1.50245 (1996)             $7,512            $13,750             $7,512
                                     each additional
                                     violation.
49 U.S.C. 14903(a)................  Maximum penalty for             $100,000     1.50245 (1996)           $150,245           $275,000           $150,245
                                     undercharge or
                                     overcharge of tariff
                                     rate, for each
                                     violation.

[[Page 72542]]

 
49 U.S.C. 14904(a)................  For first violation,                $200     1.50245 (1996)               $300               $550               $300
                                     rebates at less than
                                     the rate in effect.
49 U.S.C. 14904(a)................  For all subsequent                  $250     1.50245 (1996)               $376               $688               $376
                                     violations.
49 U.S.C. 14904(b)(1).............  Maximum penalty for                 $500     1.50245 (1996)               $751             $1,375               $751
                                     first violation for
                                     undercharges by
                                     freight forwarders.
49 U.S.C. 14904(b)(1).............  Maximum penalty for               $2,000     1.50245 (1996)             $3,005             $5,500             $3,005
                                     subsequent
                                     violations.
49 U.S.C. 14904(b)(2).............  Maximum penalty for                 $500     1.50245 (1996)               $751             $1,375               $751
                                     other first
                                     violations under
                                     Sec.   13702.
49 U.S.C. 14904(b)(2).............  Maximum penalty for               $2,000     1.50245 (1996)             $3,005             $5,500             $3,005
                                     subsequent
                                     violations.
49 U.S.C. 14905(a)................  Maximum penalty for              $10,000     1.50245 (1996)            $15,025            $27,500            $15,025
                                     each knowing
                                     violation of section
                                     14103(a), and
                                     knowingly
                                     authorizing,
                                     consenting to, or
                                     permitting a
                                     violation of section
                                     14103(a) & (b).
49 U.S.C. 14906...................  Minimum penalty for               $2,000     1.02819 (2012)             $2,056                n/a             $2,056
                                     first attempt to
                                     evade regulation.
49 U.S.C. Sec.   14906............  Minimum amount for                $5,000     1.02819 (2012)             $5,141                n/a             $5,141
                                     each subsequent
                                     attempt to evade
                                     regulation.
49 U.S.C. 14907...................  Maximum penalty for               $5,000     1.50245 (1996)             $7,512            $13,750             $7,512
                                     recordkeeping/
                                     reporting violations.
49 U.S.C. 14908(a)(2).............  Maximum penalty for               $2,000     1.50245 (1996)             $3,005             $5,500             $3,005
                                     violation of section
                                     14908(a)(1).
49 U.S.C. Sec.   14910............  When another civil                  $500     1.50245 (1996)               $751             $1,375               $751
                                     penalty is not
                                     specified under this
                                     part, for each
                                     violation, for each
                                     day.
49 U.S.C. 14915(a)(1) & (2).......  Minimum penalty for              $10,000     1.19397 (2005)            $11,940            $27,500            $11,940
                                     holding a household
                                     goods shipment
                                     hostage, for each
                                     day.
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                                                            Pipeline Carrier Civil Penalties
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49 U.S.C. Sec.   16101(a).........  Maximum penalty for               $5,000     1.50245 (1996)             $7,512            $13,750             $7,512
                                     violation of this
                                     part, for each day.

[[Page 72543]]

 
49 U.S.C. 16101(b)(1) & (4).......  For each                            $500     1.50245 (1996)               $751             $1,375               $751
                                     recordkeeping
                                     violation under
                                     section 15722, each
                                     day.
49 U.S.C. 16101(b)(2) & (4).......  For each inspection                 $100     1.50245 (1996)               $150               $275               $150
                                     violation liable
                                     under section 15722,
                                     each day.
49 U.S.C. 16101(b)(3) & (4).......  For each reporting                  $100     1.50245 (1996)               $150               $275               $150
                                     violation under
                                     section 15723, each
                                     day.
49 U.S.C. 16103(a)................  Maximum penalty for               $1,000     1.50245 (1996)             $1,502             $2,750             $1,502
                                     improper disclosure
                                     of information.
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IV. Regulatory Flexibility Statement

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801 et 
seq., generally requires an agency to prepare a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Because the Board has determined that notice and comment are not 
required under the APA for this rulemaking, the requirements of the RFA 
do not apply.

V. Paperwork Reduction Act

    This interim final rule does not contain a new or amended 
information collection requirement subject to the Paperwork Reduction 
Act of 1995, 44 U.S.C. 3501 et seq.

List of Subjects in 49 CFR Part 1022

    Administrative practice and procedures, Brokers, Civil penalties, 
Freight forwarders, Motor carriers, Pipeline carriers, Rail carriers, 
Water carriers.
    It is ordered:
    1. The Board amends its rules as set forth in this decision. Notice 
of the interim final rule will be published in the Federal Register.
    2. This decision is effective on its date of service.

    Decided: October 12, 2016.

    By the Board, Chairman Elliott, Vice Chairman Miller, and 
Commissioner Begeman.
Kenyatta Clay,
Clearance Clerk.
    For the reasons set forth in the preamble, part 1022 of title 49, 
chapter X, of the Code of Federal Regulations is amended as follows:

PART 1022--CIVIL MONETARY PENALTY INFLATION ADJUSTMENT

0
1. The authority citation for part 1022 continues to read as follows:


    Authority:  5 U.S.C. 551-557; 28 U.S.C. 2461 note; 49 U.S.C. 
11901, 14901, 14903, 14904, 14905, 14906, 14907, 14908, 14910, 
14915, 16101, 16103.

0
2. Revise Sec.  1022.1 to read as follows:


Sec.  1022.1  Scope and purpose.

    The purpose of this part is to establish a method to adjust for 
inflation the civil monetary penalties provided by law within the 
jurisdiction of the Board, in conformity with the Federal Civil 
Penalties Inflation Adjustment Act of 1990, Public Law 101-410, 104 
Stat. 890 (codified as amended at 28 U.S.C. 2461 note), as amended by 
the Debt Collection Improvement Act of 1996, Public Law 104-134, 110 
Stat. 1321, and further amended by the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015, Public Law 114-74, 
129 Stat. 599. These penalties shall be subject to review and 
adjustment annually using the method specified in this part.

0
3. Amend Sec.  1022.2 as follows:
0
a. Revise paragraph (d).
0
b. Add paragraph (e).
    The revisions read as follows:


Sec.  1022.2  Definitions.

* * * * *
    (d) Cost-of-Living Adjustment means the percentage (if any) by 
which the Consumer Price Index for the month of October preceding the 
adjustment exceeds the Consumer Price Index for the month of October 
one year before the month of October preceding date of the adjustment.
    (e) Initial Cost-of-Living Adjustment means, for each civil 
monetary penalty, the percentage (if any) by which the Consumer Price 
Index for the month of October 2015 exceeds the Consumer Price Index of 
the month of October of the calendar year during which the amount of 
such civil monetary penalty was established or adjusted under a 
provision of law.

0
4. Amend Sec.  1022.3 by revising the introductory text to read as 
follows:


Sec.  1022.3  Civil monetary penalty inflation adjustment.

    The Board shall, immediately, and at least every year thereafter--
* * * * *

0
5. Revise Sec.  1022.4 to read as follows:


Sec.  1022.4  Cost-of living adjustments of civil monetary penalties.

    (a) The inflation adjustment under Sec.  1022.3 will initially be 
determined by increasing each maximum civil monetary penalty by the 
initial cost-of-living adjustment. Not later than January 15 of every 
year thereafter, the inflation adjustment will subsequently be 
determined by increasing the maximum civil monetary penalty for each 
civil monetary penalty by the cost-of-living adjustment. Any increase 
determined under this section shall be rounded to the nearest dollar.
    (b) The initial cost-of-living inflation adjustment required by the 
statute results in the following adjustments to the civil monetary 
penalties within the jurisdiction of the Board:

[[Page 72544]]



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                                               Civil monetary penalty        Baseline penalty   Adjusted penalty
           U.S. Code citation                        description                  amount         amount (2016)
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                                          Rail Carrier Civil Penalties
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49 U.S.C. 11901(a)......................  Unless otherwise specified,                  $5,000             $7,512
                                           maximum penalty for each
                                           knowing violation under this
                                           part, and for each day.
49 U.S.C. 11901(b)......................  For each violation under section               $500               $751
                                           11124(a)(2) or (b).
49 U.S.C. 11901(b)......................  For each day violation continues                $25                $38
49 U.S.C. 11901(c)......................  Maximum penalty for each knowing             $5,000             $7,512
                                           violation under section 10901-
                                           10906.
49 U.S.C. 11901(d)......................  For each violation under section          $100-$500          $150-$751
                                           11123 or 11124(a)(1).
49 U.S.C. 11901(d)......................  For each day violation continues                $50                $75
49 U.S.C. 11901(e)(1)...................  For each violation under section               $500               $751
                                           s 11141-11145.
49 U.S.C. 11901(e)(2)...................  For each violation under section               $100               $150
                                           11144(b)(1).
49 U.S.C. 11901(e)(3-4).................  For each violation of reporting                $100               $150
                                           requirements, for each day.
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                                     Motor and Water Carrier Civil Penalties
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49 U.S.C. 14901(a)......................  Minimum penalty for each                     $1,000             $1,028
                                           violation and for each day.
49 U.S.C. 14901(a)......................  For each violation under                    $10,000            $10,282
                                           sections 13901 or 13902(c).
49 U.S.C. 14901(a)......................  For each violation related to               $25,000            $25,705
                                           transportation of passengers.
49 U.S.C. 14901(b)......................  For each violation of the           $20,000-$40,000    $20,564-$41,128
                                           hazardous waste rules under
                                           section 3001 of the Solid Waste
                                           Disposal Act.
49 U.S.C. 14901(d)(1)...................  Minimum penalty for each                     $1,000             $1,502
                                           violation of household good
                                           regulations, and for each day.
49 U.S.C. 14901(d)(2)...................  Minimum penalty for each                    $10,000            $15,025
                                           instance of transportation of
                                           household goods if broker
                                           provides estimate without
                                           carrier agreement.
49 U.S.C. 14901(d)(3)...................  Minimum penalty for each                    $25,000            $37,561
                                           instance of transportation of
                                           household goods without being
                                           registered.
49 U.S.C. 14901(e)......................  Minimum penalty for each                     $2,000             $3,005
                                           violation of a transportation
                                           rule.
49 U.S.C. 14901(e)......................  Minimum penalty for each                     $5,000             $7,512
                                           additional violation.
49 U.S.C. 14903(a)......................  Maximum penalty for undercharge            $100,000           $150,245
                                           or overcharge of tariff rate,
                                           for each violation.
49 U.S.C. 14904(a)......................  For first violation, rebates at                $200               $300
                                           less than the rate in effect.
49 U.S.C. 14904(a)......................  For all subsequent violations...               $250               $376
49 U.S.C. 14904(b)(1)...................  Maximum penalty for first                      $500               $751
                                           violation for undercharges by
                                           freight forwarders.
49 U.S.C. 14904(b)(1)...................  Maximum penalty for subsequent               $2,000             $3,005
                                           violations.
49 U.S.C. 14904(b)(2)...................  Maximum penalty for other first                $500               $751
                                           violations under section 13702.
49 U.S.C. 14904(b)(2)...................  Maximum penalty for subsequent               $2,000             $3,005
                                           violations.
49 U.S.C. 14905(a)......................  Maximum penalty for each knowing            $10,000            $15,025
                                           violation of section 14103(a),
                                           and knowingly authorizing,
                                           consenting to, or permitting a
                                           violation of section 14103(a) &
                                           (b).
49 U.S.C. 14906.........................  Minimum penalty for first                    $2,000             $2,056
                                           attempt to evade regulation.
49 U.S.C. 14906.........................  Minimum amount for each                      $5,000             $5,141
                                           subsequent attempt to evade
                                           regulation.
49 U.S.C. 14907.........................  Maximum penalty for                          $5,000             $7,512
                                           recordkeeping/reporting
                                           violations.
49 U.S.C. 14908(a)(2)...................  Maximum penalty for violation of             $2,000             $3,005
                                           section 14908(a)(1).
49 U.S.C. 14910.........................  When another civil penalty is                  $500               $751
                                           not specified under this part,
                                           for each violation, for each
                                           day.
49 U.S.C. 14915(a)(1) & (2).............  Minimum penalty for holding a               $10,000            $11,940
                                           household goods shipment
                                           hostage, for each day.
----------------------------------------------------------------------------------------------------------------
                                        Pipeline Carrier Civil Penalties
----------------------------------------------------------------------------------------------------------------
49 U.S.C. 16101(a)......................  Maximum penalty for violation of             $5,000             $7,512
                                           this part, for each day.
49 U.S.C. 16101(b)(1) & (4).............  For each recordkeeping violation               $500               $751
                                           under section 15722, each day.
49 U.S.C. 16101(b)(2) & (4).............  For each inspection violation                  $100               $150
                                           liable under section 15722,
                                           each day.
49 U.S.C. 16101(b)(3) & (4).............  For each reporting violation                   $100               $150
                                           under section 15723, each day.
49 U.S.C. 16103(a)......................  Maximum penalty for improper                 $1,000             $1,502
                                           disclosure of information.
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[FR Doc. 2016-25273 Filed 10-19-16; 8:45 am]
 BILLING CODE 4915-01-P