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Title 49Subtitle BChapter ISubchapter APart 107 → Subpart D


Title 49: Transportation
PART 107—HAZARDOUS MATERIALS PROGRAM PROCEDURES


Subpart D—Enforcement


Contents
§107.301   Delegated authority for enforcement.
§107.303   Purpose and scope.
§107.305   Investigations.

Compliance Orders and Civil Penalties

§107.307   General.
§107.309   Warning letters.
§107.310   Ticketing.
§107.311   Notice of probable violation.
§107.313   Reply.
§107.315   Admission of violations.
§107.317   Informal response.
§107.319   Request for a hearing.
§107.321   Hearing.
§107.323   ALJ's decision.
§107.325   Appeals.
§107.327   Compromise and settlement.
§107.329   Maximum penalties.
§107.331   Assessment considerations.

Criminal Penalties

§107.333   Criminal penalties generally.
§107.335   Referral for prosecution.
§107.336   Limitation on fines and penalties.

Injunctive Action

§107.337   Injunctions generally.
§107.338   Prohibition of hazardous materials operations.
§107.339   Imminent hazards.
Appendix A to Subpart D of Part 107—Guidelines for Civil Penalties

Source: Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, unless otherwise noted.

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§107.301   Delegated authority for enforcement.

Under redelegation from the Administrator of the Pipeline and Hazardous Materials Safety Administration, the Associate Administrator for Hazardous Materials Safety and the Office of the Chief Counsel exercise their authority for enforcement of the Federal hazardous material transportation law, Federal Water Pollution Control Act, this subchapter, and subchapters B and C of this chapter, in accordance with §1.97 of this title.

[84 FR 6947, Feb. 28, 2019]

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§107.303   Purpose and scope.

This subchapter describes the various enforcement authorities exercised by the Associate Administrator for Hazardous Materials Safety and the Office of Chief Counsel and the associated sanctions and prescribes the procedures governing the exercise of those authorities and the imposition of those sanctions.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended by Amdt. 107-15, 51 FR 34986, Oct. 1, 1986; Amdt. 107-24, 56 FR 8621, Feb. 28, 1991]

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§107.305   Investigations.

(a) General. In accordance with its delegated authority under part 1 of this title, the Associate Administrator may initiate investigations relating to compliance by any person with any provisions of this subchapter, subchapter B of this chapter, or subchapter C of this chapter, or any special permit, approval, response plan, or order issued thereunder, or any court decree relating thereto. The Associate Administrator encourages voluntary production of documents in accordance with and subject to §105.45 of this subchapter, and hearings may be conducted, and depositions taken pursuant to 49 U.S.C. 5121(a). The Associate Administrator may conduct investigative conferences and hearings in the course of any investigation.

(b) Investigations and Inspections. Investigations under 49 U.S.C. 5121(a) are conducted by personnel duly authorized for that purpose by the Associate Administrator. Inspections under 49 U.S.C. 5121(c) are conducted by Hazardous Materials Enforcement Specialists or Hazardous Materials Compliance Investigators, also known as “hazmat investigators” or “investigators,” whom the Associate Administrator has designated for that purpose.

(1) An investigator will, on request, present his or her credentials for examination, but the credentials may not be reproduced.

(2) An investigator may administer oaths and receive affirmations in any matter under investigation by the Associate Administrator.

(3) An investigator may gather information by reasonable means including, but not limited to, interviews, statements, photocopying, photography, and video- and audio-recording.

(4) With concurrence of the Director, Field Operations, Pipeline and Hazardous Materials Safety Administration, an investigator may issue a subpoena for the production of documentary or other tangible evidence if, on the basis of information available to the investigator, the documents and evidence materially will advance a determination of compliance with this subchapter or subchapter C. Service of a subpoena shall be in accordance with §105.50. A person to whom a subpoena is directed may seek review of the subpoena by applying to the Office of Chief Counsel in accordance with §105.55(a). A subpoena issued under this paragraph may be enforced in accordance with §105.55(b).

(c) Notification. Any person who is the subject of an Associate Administrator investigation and who is requested to furnish information or documentary evidence is notified as to the general purpose for which the information or evidence is sought.

(d) Termination. When the facts disclosed by an investigation indicate that further action is unnecessary or unwarranted at that time, the person being investigated is notified and the investigative file is closed without prejudice to further investigation by the Associate Administrator.

(e) Confidentiality. Information received in an investigation under this section, including the identity of the person investigated and any other person who provides information during the investigation, shall remain confidential under the investigatory file exception, or other appropriate exception, to the public disclosure requirements of 5 U.S.C. 552.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended by Amdt. 107-24, 56 FR 8621, Feb. 28, 1991; Amdt. 107-32, 59 FR 49131, Sept. 26, 1994; Amdt. 107-38, 61 FR 21099, May 9, 1996; 66 FR 45377, Aug. 28, 2001; 67 FR 61011, Sept. 27, 2002; 73 FR 4711, Jan. 28, 2008; 76 FR 56311, Sept. 13, 2011; 84 FR 6947, Feb. 28, 2019]

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Compliance Orders and Civil Penalties

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§107.307   General.

(a) When the Associate Administrator and the Office of 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, special permit, or order issued thereunder, for which the Associate Administrator or the Office of Chief Counsel exercise enforcement authority, they may—

(1) Issue a warning letter, as provided in §107.309;

(2) Initiate proceedings to assess a civil penalty, as provided in either §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.

(b) In the case of a proceeding initiated for failure to comply with an exemption or special permit, the allegation of a violation of a term or condition thereof is considered by the Associate Administrator and the Office of Chief Counsel to constitute an allegation that the special permit holder or party to the special permit is failing, or has failed to comply with the underlying regulations from which relief was granted by the special permit.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended by Amdt. 107-32, 59 FR 49131, Sept. 26, 1994; Amdt. 107-36, 61 FR 7183, Feb. 26, 1996; 66 FR 45377, Aug. 28, 2001; 70 FR 73162, Dec. 9, 2005]

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§107.309   Warning letters.

(a) The Associate Administrator may issue a warning letter to any person whom the Associate Administrator believes to have committed a probable violation of the Federal hazardous material transportation law, the Federal Water Pollution Control Act, or any provision of this subchapter, subchapter B of this chapter, subchapter C of this chapter, or any special permit issued thereunder.

(b) A warning letter issued under this section includes:

(1) A statement of the facts upon which the Associate Administrator bases its determination that the person has committed a probable violation;

(2) A statement that the recurrence of the probable violations cited may subject the person to enforcement action; and

(3) An opportunity to respond to the warning letter by submitting pertinent information or explanations concerning the probable violations cited therein.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended by Amdt. 107-15, 51 FR 34986, Oct. 1, 1986; Amdt. 107-24, 56 FR 8621, Feb. 28, 1991; Amdt. 107-32, 59 FR 49131, Sept. 26, 1994; Amdt. 107-36, 61 FR 7183, Feb. 26, 1996; 66 FR 45377, Aug. 28, 2001; 84 FR 6947, Feb. 28, 2019]

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§107.310   Ticketing.

(a) For an alleged violation that does not have a direct or substantial impact on safety, the Associate Administrator may issue a ticket.

(b) The Associate Administrator 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 PHMSA'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 §107.317, or request a formal administrative hearing under §107.319.

(c) If the person makes an informal response or requests a formal administrative hearing, the Associate Administrator forwards the inspection report, ticket and response to the Office of the Chief Counsel for processing under §§107.307-107.339, except that the Office of the Chief Counsel will not issue a Notice of Probable Violation under §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 PHMSA.

[Amdt. 107-36, 61 FR 7183, Feb. 26, 1996, as amended at 66 FR 45377, Aug. 28, 2001]

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§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, the Federal Water Pollution Control Act, or any provision of this subchapter, subchapter B of this chapter, or subchapter C of this chapter, or any special permit, response plan, or order issued thereunder.

(b) A notice of probable violation issued under this section includes the following information:

(1) A citation of the provisions of the Federal hazardous material transportation law, Federal Water Pollution Control Act, an order issued thereunder, this subchapter, subchapter B of this chapter, subchapter C of this chapter, or the terms of any special permit issued thereunder which the Office of Chief Counsel believes the respondent is violating or has violated.

(2) A statement of the factual allegations upon which the demand for remedial action, a civil penalty, or both, is based.

(3) A statement of the respondent's right to present written or oral explanations, information, and arguments in answer to the allegations and in mitigation of the sanction sought in the notice of probable violation.

(4) A statement of the respondent's right to request a hearing and the procedures for requesting a hearing.

(5) In addition, in the case of a notice of probable violation proposing a compliance order, a statement of the proposed actions to be taken by the respondent to achieve compliance.

(6) In addition, in the case of a notice of probable violation proposing a civil penalty:

(i) A statement of the maximum civil penalty for which the respondent may be liable;

(ii) The amount of the preliminary civil penalty being sought by the Office of Chief Counsel, constitutes the maximum amount the Chief Counsel may seek throughout the proceeding; and

(iii) A description of the manner in which the respondent makes payment of any money due the United States as a result of the proceeding.

(c) The Office of Chief Counsel may amend a notice of probable violation at any time before issuance of a compliance order or an order assessing a civil penalty. If the Office of Chief Counsel alleges any new material facts or seeks new or additional remedial action or an increase in the amount of the proposed civil penalty, it issues a new notice of probable violation under this section.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended at 50 FR 45730, Nov. 1, 1985; Amdt. 107-24, 56 FR 8624, Feb. 28, 1991; Amdt. 107-32, 59 FR 49131, Sept. 26, 1994; Amdt. 107-35, 60 FR 49108, Sept. 21, 1995; Amdt. 107-36, 61 FR 7184, Feb. 26, 1996; 84 FR 6947, Feb. 28, 2019]

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§107.313   Reply.

(a) Within 30 days of receipt of a notice of probable violation, the respondent must either:

(1) Admit the violation under §107.315;

(2) Make an informal response under §107.317; or

(3) Request a hearing under §107.319.

(b) Failure of the respondent to file a reply as provided in this section constitutes a waiver of the respondent's right to appear and contest the allegations and authorizes the Chief Counsel, without further notice to the respondent, to find the facts to be as alleged in the notice of probable violation and issue an order directing compliance or assess a civil penalty, or, if proposed in the notice, both. Failure to request a hearing under paragraph (a)(3) of this section constitutes a waiver of the respondent's right to a hearing.

(c) Upon the request of the respondent, the Office of Chief Counsel may, for good cause shown and filed within the 30 days prescribed in the notice of probable violation, extend the 30-day response period.

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§107.315   Admission of violations.

(a) In responding to a notice of probable violation issued under §107.311, the respondent may admit the alleged violations and agree to accept the terms of a proposed compliance order or to pay the amount of the preliminarily assessed civil penalty, or, if proposed in the notice, both.

(b) If the respondent agrees to the terms of a proposed compliance order, the Chief Counsel issues a final order prescribing the remedial action to be taken by the respondent.

(c) Payment of a civil penalty, when the amount of the penalty exceeds $10,000, must be made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions on making payments by wire transfer may be obtained from the Financial Operations Division (AMZ-120), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 25082, Oklahoma City, OK 73125.

(d) Payment of a civil penalty, when the amount of the penalty is $10,000 or less, must be made either by wire transfer, as set forth in paragraph (c) of this section, or certified check or money order payable to “U.S. Department of Transportation” and submitted to the Financial Operations Division (AMZ-120), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 25082, Oklahoma City, OK 73125.

[Amdt. 107-11, 48 FR 265l, Jan. 20, 1983, as amended by Amdt. 107-23, 57 FR 45453, Oct. 1, 1992; Amdt. 107-29, 58 FR 51527, Oct. 1, 1993; Amdt. 107-38, 61 FR 21100, May 9, 1996; 68 FR 52848, Sept. 8, 2003]

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§107.317   Informal response.

(a) In responding to a notice of probable violation under §107.311, the respondent may submit to the official who issued the notice, written explanations, information, or arguments in response to the allegations, the terms of a proposed compliance order, or the amount of the preliminarily assessed civil penalty.

(b) The respondent may include in his informal response a request for a conference. Upon the request of the respondent, the conference may be either in person or by telephone. A request for a conference must set forth the issues the respondent will raise at the conference.

(c) Upon receipt of a request for a conference under paragraph (b) of this section, the Chief Counsel's Office, in consultation with the Associate Administrator, arranges for a conference as soon as practicable at a time and place of mutual convenience.

(d) The respondent's written explanations, information, and arguments as well as the respondent's presentation at a conference are considered by the Chief Counsel in reviewing the notice of probable violation. Based upon a review of the proceeding, the Chief Counsel may dismiss the notice of probable violation in whole or in part. If he does not dismiss it in whole, he issues an order directing compliance or assessing a civil penalty, or, if proposed in the notice, both.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended by Amdt. 107-23, 56 FR 66157, Dec. 20, 1991; 66 FR 45377, Aug. 28, 2001]

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§107.319   Request for a hearing.

(a) In responding to a notice of probable violation under §107.311, the respondent may request a formal administrative hearing on the record before an Administrative Law Judge (ALJ) obtained by the Office of the Chief Counsel.

(b) A request for a hearing under paragraph (a) of this section must:

(1) State the name and address of the respondent and of the person submitting the request if different from the respondent;

(2) State which allegations of violations, if any, are admitted; and

(3) State generally the issues to be raised by the respondent at the hearing. Issues not raised in the request are not barred from presentation at the hearing; and

(4) Be addressed to the official who issued the notice.

(c) After a request for a hearing that complies with the requirements of paragraph (b) of this section, the Chief Counsel obtains an ALJ to preside over the hearing and notifies the respondent of this fact. Upon assignment of an ALJ, further matters in the proceeding generally are conducted by and through the ALJ, except that the Chief Counsel and respondent may compromise or settle the case under §107.327 of this subpart without order of the ALJ or voluntarily dismiss the case under Rule 41(a)(1) of the Federal Rules of Civil Procedure without order of the ALJ; in the event of such a compromise, settlement or dismissal, the Chief Counsel expeditiously will notify the ALJ thereof.

(d) At any time after requesting a formal administrative hearing but prior to the issuance of a decision and final order by the ALJ, the respondent may withdraw such request in writing, thereby terminating the jurisdication of the ALJ in the case. Such a withdrawal constitutes an irrevocable waiver of respondent's right to such a hearing on the facts, allegations, and proposed sanction presented in the notice of probable violation to which the request for hearing relates.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended at 48 FR 17094, Apr. 21, 1983; Amdt. 107-19, 54 FR 22899, May 30, 1989]

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§107.321   Hearing.

(a) To the extent practicable, the hearing is held in the general vicinity of the place where the alleged violation occurred or at a place convenient to the respondent. Testimony by witnesses shall be given under oath and the hearing shall be recorded verbatim.

(b) Hearings are conducted in accordance with the Federal Rules of Evidence and Federal Rules of Civil Procedure; however, the ALJ may modify them as he determines necessary in the interest of a full development of the facts. In addition, the ALJ may:

(1) Administer oaths and affirmations;

(2) Issue subpoenas as provided by §105.45;

(3) Adopt procedures for the submission of motions, evidence, and other documents pertinent to the proceeding;

(4) Take or cause depositions to be taken;

(5) Rule on offers of proof and receive relevant evidence;

(6) Examine witnesses at the hearing;

(7) Convene, recess, reconvene, adjourn and otherwise regulate the course of the hearing;

(8) Hold conferences for settlement, simplification of the issues, or any other proper purpose; and

(9) Take any other action authorized by, or consistent with, the provisions of this subpart and permitted by law which may expedite the hearing or aid in the disposition of an issue raised therein.

(c) The official who issued the notice of probable violation, or his representative, has the burden of proving the facts alleged therein.

(d) The respondent may appear and be heard on his own behalf or through counsel of his choice. The respondent or his counsel may offer relevant information including testimony which he believes should be considered in opposition to the allegations or which may bear on the sanction being sought and conduct such cross-examination as may be required for a full disclosure of the facts.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended at 67 FR 61011, Sept. 27, 2002]

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§107.323   ALJ's decision.

(a) After consideration of all matters of record in the proceeding, the ALJ shall issue an order dismissing the notice of probable violation in whole or in part or granting the sanction sought by the Office of Chief Counsel in the notice. If the ALJ does not dismiss the notice of probable violation in whole, he issues an order directing compliance or assessing a civil penalty, or, if proposed in the notice, both. The order includes a statement of the findings and conclusions, and the reasons therefore, on all material issues of fact, law, and discretion.

(b) If, within 20 days of receipt of an order issued under paragraph (a) of this section, the respondent does not submit in writing his acceptance of the terms of an order directing compliance, or, where appropriate, pay a civil penalty, or file an appeal under §107.325, the case may be referred to the Attorney General with a request that an action be brought in the appropriate United States District Court to enforce the terms of a compliance order or collect the civil penalty.

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§107.325   Appeals.

(a) Hearing proceedings. A party aggrieved by an ALJ's decision and order issued under §107.323, may file a written appeal in accordance with paragraph (c) of this section with the Administrator, Office of the Administrator, Pipeline and Hazardous Materials Safety Administration, East Building, 1200 New Jersey Avenue, SE., Washington, DC 20590-0001.

(b) Non-Hearing proceedings. A respondent aggrieved by an order issued under §107.317, may file a written appeal in accordance with paragraph (c) of this section with the Administrator, Office of the Administrator, Pipeline and Hazardous Materials Safety Administration, East Building, 1200 New Jersey Avenue, SE., Washington, DC 20590-0001.

(c) An appeal of an order issued under this subpart must:

(1) Be filed within 20 days of receipt of the order by the appealing party; and

(2) State with particularity the findings in the order that the appealing party challenges, and include all information and arguments pertinent thereto.

(d) If the Administrator, PHMSA, affirms the order in whole or in part, the respondent must comply with the terms of the decision within 20 days of the respondent's receipt thereof, or within the time prescribed in the order. If the respondent does not comply with the terms of the decision within 20 days of receipt, or within the time prescribed in the order, the case may be referred to the Attorney General for action to enforce the terms of the decision.

(e) The filing of an appeal stays the effectiveness of an order issued under §107.317 or §107.323. However, if the Administrator, PHMSA, determines that it is in the public interest, he may keep an order directing compliance in force pending appeal.

[70 FR 56090, Sept. 23, 2005, as amended at 72 FR 55683, Oct. 1, 2007]

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§107.327   Compromise and settlement.

(a) At any time before an order issued under §107.317 or §107.323 is referred to the Attorney General for enforcement, the respondent or the Office of Chief Counsel may propose a compromise as follows:

(1) In civil penalty cases, the respondent or Chief Counsel may offer to compromise the amount of the penalty by submitting an offer for a specific amount to the other party. An offer of compromise by the respondent shall be submitted to the Chief Counsel who may, after consultation with the Associate Administrator, accept or reject it.

(i) A compromise offer stays the running of any response period then outstanding.

(ii) If a compromise is agreed to by the parties, the respondent is notified in writing. Upon receipt of payment by Office of Chief Counsel, the respondent is notified in writing that acceptance of payment is in full satisfaction of the civil penalty proposed or assessed, and Office of Chief Counsel closes the case with prejudice to the respondent.

(iii) If a compromise cannot be agreed to, the respondent is notified in writing and is given 10 days or the amount of time remaining in the then outstanding response period, whichever is longer, to respond to whatever action was taken by the Office of Chief Counsel or the Administrator, PHMSA.

(2) In compliance order cases, the respondent may propose a consent agreement to the Chief Counsel. If the Chief Counsel accepts the agreement, he issues an order in accordance with its terms. If the Chief Counsel rejects the agreement, he directs that the proceeding continue. An agreement submitted to the Chief Counsel must include:

(i) A statement of any allegations of fact which the respondent challenges;

(ii) The reasons why the terms of a compliance order or proposed compliance order are or would be too burdensome for the respondent, or why such terms are not supported by the record in the case;

(iii) A proposed compliance order suitable for issuance by the Chief Counsel;

(iv) An admission of all jurisdictional facts; and

(v) An express waiver of further procedural steps and all right to seek judicial review or otherwise challenge or contest the validity of the order.

(b) Notwithstanding paragraph (a)(1) of this section, the respondent or Office of Chief Counsel may propose to settle the case. If the Chief Counsel agrees to a settlement, the respondent is notified and the case is closed without prejudice to the respondent.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended at 50 FR 45730, Nov. 1, 1985; Amdt. 107-24, 56 FR 8621, Feb. 28, 1991; 56 FR 15510, Apr. 17, 1991; Amdt. 107-29, 58 FR 51527, Oct. 1, 1993; 66 FR 45377, Aug. 28, 2001]

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§107.329   Maximum penalties.

(a) A person who knowingly violates a requirement of the Federal hazardous material transportation law, an order issued thereunder, this subchapter, subchapter C of the chapter, or a special permit or approval issued under this subchapter applicable to the transportation of hazardous materials or the causing of them to be transported or shipped is liable for a civil penalty of not more than $81,993 for each violation, except the maximum civil penalty is $191,316 if the violation results in death, serious illness, or severe injury to any person or substantial destruction of property. There is no minimum civil penalty, except for a minimum civil penalty of $493 for violations relating to training. When the violation is a continuing one, each day of the violation constitutes a separate offense.

(b) A person who knowingly violates a requirement of the Federal hazardous material transportation law, an order issued thereunder, this subchapter, subchapter C of the chapter, or a special permit or approval issued under this subchapter applicable to the design, manufacture, fabrication, inspection, marking, maintenance, reconditioning, repair or testing of a package, container, or packaging component which is represented, marked, certified, or sold by that person as qualified for use in the transportation of hazardous materials in commerce is liable for a civil penalty of not more than $81,993 for each violation, except the maximum civil penalty is $191,316 if the violation results in death, serious illness, or severe injury to any person or substantial destruction of property. There is no minimum civil penalty, except for a minimum civil penalty of $493 for violations relating to training.

[84 FR 37071, July 31, 2019]

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§107.331   Assessment considerations.

After finding a knowing violation under this subpart, the Office of Chief Counsel assesses a civil penalty taking the following into account:

(a) The nature and circumstances of the violation;

(b) The extent and gravity of the violation;

(c) The degree of the respondent's culpability;

(d) The respondent's prior violations;

(e) The respondent's ability to pay;

(f) The effect on the respondent's ability to continue in business; and

(g) Such other matters as justice may require.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended by Amdt. 107-30, 58 FR 50500, Sept. 27, 1993; Amdt. 107-38, 61 FR 21100, May 9, 1996]

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Criminal Penalties

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§107.333   Criminal penalties generally.

A person who knowingly violates §171.2(l) of this title or willfully or recklessly violates a requirement of the Federal hazardous material transportation law or a regulation, order, special permit, or approval issued thereunder shall be fined under title 18, United States Code, or imprisoned for not more than 5 years, or both, except the maximum amount of imprisonment shall be 10 years in any case in which the violation involves the release of a hazardous material which results in death or bodily injury to any person.

[71 FR 8487, Feb. 17, 2006]

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§107.335   Referral for prosecution.

If the Associate Administrator becomes aware of a possible willful violation of the Federal hazardous material transportation law, this subchapter, subchapter C of this chapter, or any special permit, or order issued thereunder, for which the Associate Administrator exercises enforcement responsibility, it shall report it to the Office of the Chief Counsel, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, Washington, DC 20590-0001. If appropriate, the Chief Counsel refers the report to the Department of Justice for criminal prosecution of the offender.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended by Amdt. 107-22, 55 FR 39978, Oct. 1, 1990; Amdt. 107-24, 56 FR 8621, Feb. 28, 1991; 56 FR 15510, Apr. 17, 1991; Amdt. 107-32, 59 FR 49131, Sept. 26, 1994; Amdt. 107-35, 60 FR 49108, Sept. 21, 1995; 66 FR 45377, Aug. 28, 2001]

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§107.336   Limitation on fines and penalties.

If a State or political subdivision or Indian tribe assesses any fine or penalty determined by the Secretary to be appropriate for a violation concerning a subject listed in §107.202(a), no additional fine or penalty may be assessed for such violation by any other authority.

[Amdt. 107-24, 56 FR 8624, Feb. 28, 1991]

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Injunctive Action

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§107.337   Injunctions generally.

Whenever it appears to the Office of Chief Counsel that a person has engaged, or is engaged, or is about to engage in any act or practice constituting a violation of any provision of the Federal hazardous material transportation law, this subchapter, subchapter C of this chapter, or any special permit, or order issued thereunder, for which the Office of Chief Counsel exercises enforcement responsibility, the Administrator, PHMSA, or his delegate, may request the Attorney General to bring an action in the appropriate United States District Court for such relief as is necessary or appropriate, including mandatory or prohibitive injunctive relief, interim equitable relief, and punitive damages as provided by 49 U.S.C. 5122(a).

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended by Amdt. 107-32, 59 FR 49131, Sept. 26, 1994]

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§107.338   Prohibition of hazardous materials operations.

As provided for in subpart E of part 109 of this subchapter, a person who fails to pay a civil penalty in accordance with agreed upon installments or in full within prescribed time lines, is prohibited from conducting hazardous materials operations and shall immediately cease all hazardous materials operations.

[79 FR 46199, Aug. 7, 2014]

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§107.339   Imminent hazards.

Whenever it appears to the Office of the Chief Counsel that there is a substantial likelihood that death, serious illness, or severe personal injury will result from the transportation of a particular hazardous material or hazardous materials container, before a compliance order proceeding or other administrative hearing or formal proceeding to abate the risk of that harm can be completed, the Administrator, PHMSA, or his delegate, may bring an action under 49 U.S.C. 5122(b) in the appropriate United States District Court for an order suspending or restricting the transporation of that hazardous material or those containers or for such other equitable relief as is necessary or appropriate to ameliorate the hazard.

[Amdt. 107-11, 48 FR 2651, Jan. 20, 1983, as amended by Amdt. 107-15, 51 FR 34987, Oct. 1, 1986; Amdt. 107-32, 59 FR 49131, Sept. 26, 1994]

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

I. This appendix sets forth the guidelines PHMSA uses (as of October 2, 2013) in making initial baseline determinations for civil penalties. The first part of these guidelines is a list of baseline amounts or ranges for frequently-cited probable violations. Following the list of violations are general guidelines PHMSA uses in making penalty determinations in enforcement cases.

II. List of Frequently Cited Violations

Violation description Section or cite Baseline assessment
General Requirements
A. Registration Requirements: Failure to register as an offeror or carrier of hazardous material and pay registration fee:107.608, 107.612.
1. Small business or not-for-profit$1,200 + $600 each additional year.
2. All others$3,500 + $1,000 each additional year.
B. Training Requirements:
1. Failure to provide initial training to hazmat employees (general awareness, function-specific, safety, and security awareness training):172.702.
a. More than 10 hazmat employees$1,500 for each area.
b. 10 hazmat employees or fewer$1,000 for each area.
2. Failure to provide recurrent training to hazmat employees (general awareness, function-specific, safety, and security awareness training).172.702$1,000 for each area.
3. Failure to provide in-depth security training when a security plan is required but has not been developed.172.702Included in penalty for no security plan.
4. Failure to provide in-depth security training when a security plan is required and has been developed.172.702$3,100.
5. Failure to create and maintain training records:172.704.
a. More than 10 hazmat employees$1,000.
b. 10 hazmat employees or fewer$600.
C. Security Plans:
1. Failure to develop a security plan; failure to adhere to security plan:172.800
a. Section 172.504 Table 1 materials$9,300.
b. Packing Group I$7,500.
c. Packing Group II$5,600.
d. Packing Group III$3,700.
2. Incomplete security plan or incomplete adherence (one or more of four required elements missing)One-quarter (25 percent) of above for each element.
3. Failure to update a security plan to reflect changing circumstances172.802(b)One-third (33 percent) of baseline for no plan.
4. Failure to put security plan in writing; failure to make all copies identical172.800(b)One-third (33 percent) of baseline for no plan.
D. Notification to a Foreign Shipper: Failure to provide a foreign offeror or forwarding agent written information of HMR requirements applicable to a shipment of hazardous materials within the United States, at the place of entry into the United States:171.22(f).
1. Packing Group I and §172.504 Table 1 materials$9,300.*
2. Packing Group II$5,500.*
3. Packing Group III$1,800.*
*The baseline applied to the importer shall be equal to or less than the baseline applied to the foreign offeror or forwarding agent.
Violation description Section or cite Baseline assessment
E. Special Permits and Approvals:
1. Offering or transporting a hazardous material, or otherwise performing a function covered by a special permit or approval, without authorization:171.2.
a. After the special permit or approval has expired$1,200 + $600 for each additional year.
b. After the special permit or approval has been terminated$5,000 to $25,000.
2. Failure to comply with a provision of a special permit or approval (when no other baseline is applicable):171.2.
a. That relates to safety$4,000 and up.
b. That does not relate to safety$500 and up.
3. Failure to maintain a copy of the special permit in the transport vehicle or facility, when required by the terms of the special permitSpecial Permit$1,000.
4. Use an approval or approval symbol issued to another personApproval, Various$9,000.
Offeror Requirements—All hazardous materials
A. Undeclared Shipment:172.200, 172.300, 172.400, 172.500.
1. Offering for transportation a hazardous material without shipping papers, package markings, labels, and placards (where required):
a. Packing Group I and §172.504 Table 1 materials$30,000 and up.
b. Packing Group II$20,000.
c. Packing Group III$17,500.
d. Consumer Commodity, ORM-D$5,000.
2. Offering for transportation a hazardous material that is misclassified on the shipping paper, markings, labels, and placards (including improper treatment as consumer commodity, ORM-D):
a. Packing Group I and §172.504 Table I materials$20,000.
b. Packing Group II$12,000.
c. Packing Group III$8,000.
3. Offering for transportation a forbidden hazardous material:
a. Packing Group I and §172.504 Table I materials$35,000.
b. Packing Group II$25,000.
c. Packing Group III$20,000.
4. Offering for transportation a lithium battery, without shipping papers, package markings, labels, or placards (when required):
a. For air transport$40,000.
b. For ground transport$20,000.
B. Shipping Papers:
1. Failure to provide a shipping paper for a shipment of hazardous materials or accepting hazardous materials for transportation without a shipping paper:172.201, 177.817(a).
a. Packing Group I and §172.504 Table 1 materials$7,500.
b. Packing Group II$5,600.
c. Packing Group III$3,700.
2. Failure to follow one or more of the three approved formats for listing hazardous materials and non-hazardous materials on a shipping paper172.201(a)(1)$1,500.
3. Failure to retain shipping papers as required172.201(e)$1,200.
4. Failure to include a proper shipping name in the shipping description or using an incorrect proper shipping name:172.202.
a. Packing Group I and §172.504 Table 1 materials$2,000.
b. Packing Group II$1,500.
c. Packing Group III$1,000.
5. Failure to include a hazard class/division number in the shipping description:172.202.
a. Packing Group I and §172.504 Table 1 materials$2,000.
b. Packing Group II$1,500.
c. Packing Group III$1,000.
6. Failure to include an identification number in the shipping description:172.202.
a. Packing Group I and §172.504 Table 1 materials$2,500.
b. Packing Group II$1,800.
c. Packing Group III$1,200.
7. Using an incorrect hazard class:172.202.
a. That does not affect compatibility requirements$1,000.
b. That affects compatibility requirements:
i. Packing Group I and §172.504 Table 1 materials$7,500.
ii. Packing Group II$5,600.
iii. Packing Group III$3,700.
8. Using an incorrect identification number:172.202.
a. That does not change the response information$1,000.
b. That changes response information:
i. Packing Group I and §172.504 Table 1 materials$7,500.
ii. Packing Group II$5,600.
iii. Packing Group III$3,700.
9. Failure to include the Packing Group or using an incorrect Packing Group:172.202.
a. Packing Group I and §172.504 Table 1 materials$1,700.
b. Packing Group II and III$1,300.
10. Using a shipping description that includes additional unauthorized information (extra or incorrect words)172.202$1,000.
11. Using a shipping description not in required sequence172.202$600.
12. Failure to include the total quantity of hazardous material covered by a shipping description (including net explosive mass)172.202$600.
13. Failure to include any of the following on a shipping paper, as required: Special permit number; “Limited Quantity or “Ltd Qty;” “RQ” for a hazardous substance; technical name in parentheses for a listed generic or “n.o.s.” material; or marine pollutant172.203(a), (b), (c)(2), (k), (l)$600.
14. Failure to indicate poison inhalation hazard on a shipping paper172.203(m)$2,500.
15. Failure to include or sign the required shipper's certification on a shipping paper172.204$1,000.
C. Emergency Response Information Requirements:
1. Providing incorrect emergency response information with or on a shipping paper:172.602.
a. No significant difference in response$1,000.
b. Significant difference in response:
i. Packing Group I and §172.504 Table 1 materials$7,500.
ii. Packing Group II$5,600.
iii. Packing Group III$3,700.
2. Failure to include an emergency response telephone number on a shipping paper.172.604$3,200.
3. Failure to have the emergency response telephone number monitored while a hazardous material is in transportation; or listing the number in a manner that it is not readily identifiable or cannot be found easily and quickly (e.g., multiple telephone numbers); or failing to include the name, contract number, or other unique identifier of the person registered with the emergency response provider.172.604$1,600.
4. Listing an emergency response telephone number on a shipping paper that causes emergency responders delay in obtaining emergency response information (e.g., listing a telephone number that not working, incorrect, or otherwise not capable of providing required information).172.604$3,200 to $5,200
D. Package Marking Requirements:
1. Failure to mark the proper shipping name and identification number on a package:172.301(a).
a. Packing Group I and §172.504 Table 1 materials$6,000.
b. Packing Group II$4,500.
c. Packing Group III$3,000.
2. Marking a package with an incorrect shipping name and identification number:172.301(a).
a. That does not change the response information:
i. Packing Group I and §172.504 Table 1 materials$3,700.
ii. Packing Group II$2,700.
iii. Packing Group III$2,200.
b. That changes the response information:
i. Packing Group I and §172.504 Table 1 materials$9,500.
ii. Packing Group II$7,100.
iii. Packing Group III$4,700.
3. Failure to mark the proper shipping name on a package or marking an incorrect shipping name on a package:172.301(a).
a. Packing Group I and §172.504 Table 1 materials$2,000.
b. Packing Group II$1,500.
c. Packing Group III$1,000.
4. Failure to mark the identification number on a package:172.301(a).
a. Packing Group I and §172.504 Table 1 materials$2,500.
b. Packing Group II$1,800.
c. Packing Group III$1,200.
5. Marking a package with an incorrect identification number:172.301(a).
a. That does not change the response information$1,000.
b. That changes the response information:
i. Packing Group I and §172.504 Table 1 materials$7,500.
ii. Packing Group II$5,600.
iii. Packing Group III$3,700.
6. Failure to include the required technical name(s) in parentheses for a listed generic or “n.o.s.” entry172.301(c)$600.
7. Failure to mark “non-odorized” on a cylinder containing liquefied petroleum gas172.301(f)$2,000.
8. Marking a package as containing hazardous material when it contains no hazardous material172.303(a)$1,000.
9. Failure to locate required markings away from other markings that could reduce their effectiveness172.304(a)(4)$1,000.
10. Failure to mark a package containing liquid hazardous materials with required orientation markings:172.312.
a. Packing Group I and §172.504 Table 1 materials$4,000.
b. Packing Group II$3,500.
c. Packing Group III$3,000.
11. Failure to mark “Biohazard on an infectious substance or “Inhalation Hazard” on a package containing a poison by inhalation hazard172.313(a), 172.323$4,000.
12. Failure to apply limited quantity marking or “RQ” marking on a non-bulk package containing a hazardous substance172.315, 172.324(b)$600.
13. Listing the technical name of a select agent hazardous material when it should not be listed172.301(b)$1,600.
14. Failure to apply a “Keep away from heat,” marine pollutant, or elevated temperature (“HOT”) marking172.317, 172.322, 172.325$1,200.
15. Failure to properly mark a bulk container172.331, 172.334, 172.336, 172.338$1,000.
E. Package Labeling Requirements:
1. Failure to label a package or applying a label that represents a hazard other than the hazard presented by the hazardous material in the package172.400$7,000.
2. Placing a label on a package that does not contain a hazardous material172.401(a)$1,000.
3. Failure to place a required subsidiary label on a package:172.402.
a. Packing Group I and §172.504 Table 1 materials$3,100.
b. Packing Group II$1,800.
c. Packing Group III$600.
4. Placing a label on a different surface of the package than, or away from, the proper shipping name172.406(a)$1,000.
5. Placing an improper size label on a package172.407(c)$1,000.
6. Placing a label on a package that does not meet color specification requirements (depending on the variance)172.407(d)$1,000.
7. Failure to place a Cargo Aircraft Only label on a package intended for air transportation, when required172.402(c)$5,000.
8. Failure to place a Cargo Aircraft Only label on a package containing a primary lithium battery or failure to mark a package containing a primary lithium battery as forbidden for transport on passenger aircraft:172.402(c), 172.102(c)(1) Special Provision 188, 189, 190.
a. For air transport$10,000.
b. For ground transport$1,000.
9. Failure to provide an appropriate class or division number on an explosive label172.411$3,100.
F. Placarding Requirements:
1. Improperly placarding a freight container or vehicle containing hazardous materials:172.504.
a. Packing Group I and §172.504 Table 1 materials$1,200 to $11,200.
b. Packing Group II and III$1,000 to $9,000.
2. Failure to placard a freight container or vehicle containing hazardous materials (no placard at all):172.504.
a. Packing Group I and §172.504 Table 1 materials$12,000.
b. Packing Group II and III$8,500.
G. Packaging Requirements:
1. Failure to comply with package testing requirements for small quantities, excepted quantities, de minimis, materials of trade, limited quantities, and ORM-D173.4, 173.4a, 173.4b, 173.6, 173.156, 173.306$1,000 to $5,000.
2. Offering a hazardous material for transportation in an unauthorized non-UN standard or non-specification packaging (includes failure to comply with the terms of a special permit authorizing use of a non-standard or non-specification packaging):Various.
a. Packing Group I, §172.504 Table 1 materials, and Division 2.3 gases$11,200.
b. Packing Group II and Divisions 2.1 and 2.2 gases$8,700.
c. Packing Group III$6,200.
3. Offering a hazardous material for transportation in a package that was not retested as required:Various.
a. Packing Group I and §172.504 Table 1 materials$8,000.
b. Packing Group II$5,000.
c. Packing Group III$3,000.
4. Offering a hazardous material for transportation in an improper package:Various.
a. When Packing Group I material is packaged in a Packing Group III package$8,000.
b. When Packing Group I material is packaged in a Packing Group II package$5,000.
c. When Packing Group II material is packaged in a Packing Group III package$3,000.
5. Offering a hazardous material for transportation in a packaging (including a packaging manufactured outside the United States) that is torn, damaged, has hazardous material present on the outside of the package, or is otherwise not suitable for shipmentVarious$7,500.
6. Offering a hazardous material for transportation in a self-certified packaging that has not been subjected to design qualification testing:178.601, Various.
a. Packing Group I and §172.504 Table 1 materials$13,500.
b. Packing Group II$10,500.
c. Packing Group III$7,500.
7. Offering a hazardous material for transportation in a packaging that has been successfully tested to an applicable UN standard but is not marked with the required UN marking (including missing specification plates)173.32(d), 173.24(c)$4,500.
8. Failure to close a UN standard packaging in accordance with the closure instructions:173.22(a)(4).
a. Packing Group I and §172.504 Table 1 materials$2,000 to $5,000.
b. Packing Group II$1,000 to $4,000.
c. Packing Group III$500 to $3,000.
9. Offering a hazardous material for transportation in a packaging that leaks during conditions normally incident to transportation:173.24(b).
a. Packing Group I and §172.504 Table 1 materials$16,500.
b. Packing Group II$11,200.
c. Packing Group III$7,500.
10. Overfilling or underfilling a package so that the effectiveness is substantially reduced:173.24(b).
a. Packing Group I and §172.504 Table 1 materials$11,200.
b. Packing Group II$7,500.
c. Packing Group III$3,700.
11. Failure to ensure packaging is compatible with hazardous material lading.173.24(e)$9,000 to $12,000.
12. Failure to mark an overpack as required173.25(a)(4)$3,700.
13. Packaging incompatible materials in an overpack173.25(a)(5)$9,300.
14. Marking a package “overpack” when the inner packages do not meet the requirements of the HMR:173.25(a).
a. Packing Group I and §172.504 Table 1 materials$15,000.
b. Packing Group II$10,000.
c. Packing Group III$7,000.
15. Failure to comply with additional requirements for transportation by aircraft173.27$1,000 to $10,000.
16. Filling an IBC, portable tank, or cargo tank (DOT, UN, or IM) that is out of test and offering hazardous materials for transportation in that IBC or portable tank. (Penalty amount depends on number of units and time out of test.)173.32(a), 173.33(a)(3), 180.352, 180.407, 180.605.
a. Packing Group I and §172.504 Table 1 materials:
i. All testing overdue$8,700.
ii. Only periodic (5 year) tests overdue or only intermediate periodic (2.5 year) tests overdue$4,600.
b. Packing Group II:
i. All testing overdue$6,600.
ii. Only periodic (5 year) tests overdue or only intermediate periodic (2.5 year) tests overdue$3,300.
c. Packing Group III:
i. All testing overdue$4,600.
ii. Only periodic (5 year) tests overdue or only intermediate periodic (2.5 year) tests overdue$2,300.
17. Manifolding cylinders without conforming to manifolding requirements173.301(g)$3,700 and up.
18. Failure to ensure a cargo tank motor vehicle in metered delivery service has an operational off-truck remote shut-off activation device173.315(n)(3)$2,500.
19. Offering a hazardous material in a cargo tank motor vehicle when the material does not meet compatibility requirements with the tank or other lading or residue173.33$15,000.
20. Failure to provide the required outage in a portable tank that results in a release of hazardous materials:173.32(f)(6).
a. Packing Group I and §172.504 Table 1 materials$15,000.
b. Packing Group II$11,200.
c. Packing Group III$7,500.
Offeror Requirements—Specific hazardous materials
A. Cigarette Lighters:
1. Offering for transportation an unapproved cigarette lighter, lighter refill, or similar device, equipped with an ignition element and containing fuel173.21(i)$7,500.
2. Failure to include the cigarette lighter test report identifier on the shipping paper.173.308(d)(1)$1,000.
3. Failure to mark the approval number on the package.173.308(d)(2)$1,000.
B. Class 1—Explosives:
1. Failure to mark the package with the EX number for each substance contained in the package or, alternatively, indicate the EX number for each substance in association with the description on the shipping description172.320$1,000.
2. Offering an unapproved explosive for transportation:173.54, 173.56(b).
a. Division 1.4 fireworks meeting the chemistry requirements of APA Standard 87-1$5,000.
b. Division 1.3 fireworks meeting the chemistry requirements of APA Standard 87-1$7,500.
c. All other explosives (including forbidden)$12,500 and up.
3. Offering an unapproved explosive for transportation that minimally deviates from an approved design in a manner that does not impact safety:173.54, 173.56(b).
a. Division 1.4$3,000.
b. Division 1.3$4,000.
c. All other explosives$6,000.
4. Offering a leaking or damaged package of explosives for transportation:173.54(c).
a. Division 1.3 and 1.4$12,500.
b. All other explosives$16,500.
5. Offering a Class 1 material that is fitted with its own means of ignition or initiation, without providing protection from accidental actuation173.60(b)(5)$15,000.
6. Packaging explosives in the same outer packaging with other materials173.61$9,300.
7. Transporting a detonator on the same vehicle as incompatible materials using the approved method listed in 177.835(g)(3) without meeting the requirements of IME Standard 22177.835(g)(3)$10,000.
C. Class 7—Radioactive Materials:
1. Failure to include required additional entries for radioactive material on a shipping paper, or providing incorrect information for these additional entries172.203(d)$2,000 to $5,000.
2. Failure to mark the gross mass on the outside of a package of Class 7 material that exceeds 110 pounds172.310(a)$1,000.
3. Failure to mark each package with the words “Type A” or “Type B,” as appropriate172.310(b)$3,700.
4. Placing a label on Class 7 material that understates the proper label category172.403$6,200.
5. Placing a label on Class 7 material that fails to contain (or has erroneous) entries for the name of the radionuclide(s), activity, and transport index172.403(g)$2,000 to $5,000.
6. Failure to meet one or more of the general design requirements for a package used to ship a Class 7 material173.410$6,200.
7. Failure to comply with the industrial packaging (IP) requirements when offering a Class 7 material for transportation173.411$6,200.
8. Failure to provide a tamper-indicating device on a Type A package used to ship a Class 7 material173.412(a)$5,000.
9. Failure to meet the additional design requirements of a Type A package used to ship a Class 7 material173.412(b)-(i)$6,200.
10. Failure to meet the performance requirements for a Type A package used to ship a Class 7 material173.412(j)-(l)$11,200.
11. Offering a DOT specification 7A packaging without maintaining complete documentation of tests and an engineering evaluation or comparative data:173.415(a), 173.461.
a. Tests and evaluation not performed$13,500.
b. Test performed but complete records not maintained$2,500 to $6,200.
12. Offering any Type B, Type B(U), or Type B(M) packaging that failed to meet the approved DOT, NRC or DOE design, as applicable173.416$16,500.
13. Offering a Type B packaging without registering as a party to the NRC approval certificate:173.471(a).
a. Never obtained approval$3,700.
b. Holding an expired certificate$1,200.
14. Failure to meet one or more of the special requirements for a package used to ship more than 0.1 kg of uranium hexafluoride173.420$13,500.
15. Offering Class 7 materials for transportation as a limited quantity without meeting the requirements for a limited quantity173.421(a)$8,000.
16. Offering a multiple-hazard limited quantity Class 7 material without addressing the additional hazard173.423(a)$600 to $3,100.
17. Offering Class 7 materials for transportation under exceptions for radioactive instruments and articles while failing to meet the applicable requirements173.424$6,200 to $12,500.
18. Offering Class 7 low specific activity (LSA) materials or surface contaminated objects (SCO) while failing to comply with applicable transport requirements (including, an external dose rate that exceeds an external radiation level of 10 mSv/h at 3 meters from the unshielded material)173.427$7,500 to $12,500.
19. Offering Class 7 LSA materials or SCO as exclusive use without providing specific instructions to the carrier for maintenance of exclusive use shipment controls173.427(a)(6)$1,200.
20. Offering in excess of a Type A quantity of a Class 7 material in a Type A packaging173.431$15,000.
21. Offering a package that exceeds the permitted radiation level or transport index173.441$12,500.
22. Offering a package without determining the level of removable external contamination, or that exceeds the limit for removable external contamination173.443$6,200 and up.
23. Storing packages of radioactive material in a group with a total criticality safety index of more than 50173.447(a)$6,200 and up.
24. Offering for transportation or transporting aboard a passenger aircraft any single package or overpack of Class 7 material with a transport index greater than 3.0173.448(e)$6,200 and up.
25. Exporting a Type B, Type B(U), Type B(M), or fissile package without obtaining a U.S. Competent Authority Certificate or, after obtaining a U.S. Competent Authority Certificate, failing to submit a copy to the national competent authority of each country into or through which the package is transported173.471(d)$3,700.
26. Offering or exporting special form radioactive materials without maintaining a complete safety analysis or Certificate of Competent Authority, as required.173.476(a), (b)$3,700.
27. Shipping a fissile material as fissile-exempt without meeting one of the exemption requirements or otherwise not complying with fissile material requirements173.417, 173.453, 173.457$12,500.
28. Offering Class 7 fissile materials while failing to have a DOT Competent Authority Certificate or NRC Certificate of Compliance, as required, or failing to meet the requirements of the applicable Certificate173.417$1,000 to $12,500.
D. Class 2—Compressed Gases in Cylinders:
1. Filling and offering a cylinder with compressed gas when the cylinder is out of test or after its authorized service life:173.301(a)(6), (a)(7).
a. Table 1 and compressed gas in solution$10,000 to $15,000.
b. Division 2.1 gases$7,500 to $10,000.
c. Division 2.2 gases$5,000 to $7,500.
2. Overfilling cylinders:Various.
a. Division 2.3 gases$15,000.
b. Division 2.1 gases$10,000.
c. Division 2.2 gases$7,500.
d. Aerosols, limited quantities, consumer commodities$5,000.
3. Failure to check each day the pressure of a 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 30 days173.303(d)$6,200.
4. Offering a limited quantity of a compressed gas in a metal container for the purpose of propelling a nonpoisonous material and failure to heat the cylinder until the pressure is equivalent to the equilibrium pressure at 131 °F, without evidence of leakage, distortion, or other defect173.306(a)(3)$1,800 to $5,000.
5. Offering a limited quantity of a compressed gas in a metal container intended to expel a non-poisonous material, while failing to subject the filled container to a hot water bath, as required173.306(a)(3)(v)$5,000.
6. Offering liquefied petroleum gas for permanent installation on consumer premises when the requirements are not met173.315(j)$7,500 to $10,000.
E. Oxygen Generators Offered by Air:
1. Offering an unapproved oxygen generator for transportation173.168$25,000.
2. Offering an oxygen generator for transportation without installing a means of preventing actuation, as required173.168$12,500 to $25,000.
3. Offering an oxygen generator as spent when the ignition and chemical contents were still present172.102(c)(1) Special Provision 61$35,000.
F. Batteries:173.159, 173.185, 173.21(c).
1. Offering lithium batteries in transportation that have not been tested:
a. Ground transport$15,000.
b. Air transport$30,000.
2. Offering lithium batteries in transportation that have been assembled from tested cells, but have not been tested$5,000 + 25 percent increase for each additional design.
3. Failure to create records of design testing$2,500 to $9,300.
4. Offering lithium batteries in transportation that have not been protected against short circuit$15,000.
5. Offering lithium batteries in transportation in unauthorized packages$12,500.
6. Offering lead acid batteries in transportation in unauthorized packages$10,000.
7. Offering lithium batteries in transportation on passenger aircraft or misclassifying them for air transport$30,000.
8. Failure to prepare batteries so as to prevent damage in transit$6,000.
Manufacturing, Reconditioning, Retesting Requirements
A. Activities Subject to Approval:
1. Failure to report in writing a change in name, address, ownership, test equipment, management, or test personnel171.2(c), Approval Letter$700 to $1,500.
2. Failure by an independent inspection agency of specification cylinders to satisfy all inspector duties, including inspecting materials, and verifying materials of construction and cylinders comply with applicable specifications178.35(c)(1), (2), (3)$5,000 to $16,500.
3. Failure to properly complete or retain inspector's report for specification packages178.25(c)(4), Various$4,000.
4. Failure to have a cylinder manufacturing registration number/symbol, when requiredVarious$2,500.
B. Packaging Manufacturers (General):
1. Failure of a manufacturer or distributor to notify each person to whom the packaging is transferred of all the requirements not met at the time of transfer, including closure instructions178.2(c)$3,100.
2. Failure to comply with specified construction requirements for non-bulk packagings:178.504 to 178.523.
a. Packing Group I and §172.504 Table 1 materials$12,000.
b. Packing Group II$8,000.
c. Packing Group III$4,000.
3. Fail testing: Failure to ensure a packaging certified as meeting the UN standard is capable of passing the required performance testing (depending on size of package):178.601(b), 178.609, part 178 subparts O, Q.
a. Infectious substances$16,500.
b. Packing Group I and §172.504 Table 1 materials$13,500 to $16,500.
c. Packing Group II$10,500 to $13,500.
d. Packing Group III$7,500 to $10,500.
4. No testing: Certifying a packaging as meeting a UN standard when design qualification testing was not performed (depending on size of package):178.601(d), 178.609, part 178 subparts O, Q.
a. Infectious substances$16,500.
a. Packing Group I and §172.504 table 1 materials$13,500 to $16,500.
b. Packing Group II$10,500 to $13,500.
c. Packing Group III$7,500 to $10,500.
5. Failure to conduct periodic testing on UN standard packaging (depending on length of time, Packing Group, and size of package)178.601(e), part 178 subparts O, Q$2,500 to $16,500.
6. Improper testing: Failure to properly conduct testing for UN standard packaging (e.g., testing with less weight than marked on packaging; drop testing from lesser height than required; failing to condition fiberboard boxes before design test) (depending on size of package):
a. Design qualification testing:178.601(d), 178.609, part 178 subparts O, Q.
i. Infectious substances$13,500.
ii. Packing Group I$10,500 to $13,500.
iii. Packing Group II$7,500 to $10,500.
iv. Packing Group III$2,500 to $7,500.
b. Periodic testing:178.601(e), 178.609.
i. Infectious substances$10,500.
ii. Packing Group I$7,000 to $10,500.
iii. Packing Group II$4,000 to $7,000.
iv. Packing Group III$600 to $4,000.
7. Failure to keep complete and accurate testing records:178.601(l).
a. No records kept$5,000.
b. Incomplete or inaccurate records$1,200 to $3,700.
8. Improper marking of UN certification178.503$600 per item.
C. Drum Manufacturers & Reconditioners:
1. Failure to properly conduct a production leakproofness test on a new or reconditioned drum:178.604(b), (d), 173.28(b)(2)(i).
a. Improper testing:
i. Packing Group I$3,000.
ii. Packing Group II$2,500.
iii. Packing Group III$2,000.
b. No testing performed:
i. Packing Group I$6,200.
ii. Packing Group II$5,000.
iii. Packing Group III$3,700.
2. Marking incorrect tester information on a reused drum:173.28(b)(2)(ii).
a. Incorrect information$1,000.
b. Unauthorized use of another's information$9,000.
3. Representing, marking, or certifying a drum as a reconditioned UN standard packaging when the drum does not meet a UN standard.173.28(c)$7,500 to $13,500.
4. Representing, marking, or certifying a drum as altered from one UN standard to another, when the drum has not been altered.173.28(d)$600
D. IBC and Portable Tank Requalification:
1. Failure to properly test and inspect IBCs or portable tanks180.352, 180.603.
a. Packing Group I$10,000.
b. Packing Group II$7,500.
c. Packing Group III$5,000.
2. Failure to properly mark an IBC or portable tank with the most current retest and/or inspection information180.352(e), 178.703(b), 180.605(k)$600 per item.
3. Failure to keep complete and accurate records of IBC or portable tank retest and reinspection:180.352(f), 180.605(l).
a. No records kept$5,000.
b. Incomplete or inaccurate records$1,200 to $3,700.
4. Failure to make inspection and test records available to a DOT representative upon request180.352(g), 49 U.S.C. 5121(b)(2)$1,200.
5. Failure to perform tests (internal visual, leakproofness) on an IBC as part of a repair180.352(d)$3,700 to $6,200.
6. Failure to perform routine maintenance on an IBC180.350(c)$2,500.
E. Cylinder Manufacturers & Rebuilders:
1. Manufacturing, representing, marking, certifying, or selling a DOT high-pressure cylinder that was not inspected and verified by an approved independent inspection agency178.35$10,000 to $25,000.
2. Failure to mark a registration number/symbol on a cylinder, when required178.35, Various$1,000.
3. Failure to mark the date of manufacture or lot number on a DOT-39 cylinder178.65(i)$3,700.
4. Failure to have a chemical analysis performed in the U.S. for a material manufactured outside the U.S., without an approval107.807, 178.35$6,200.
5. Failure to comply with defect and attachment requirements, safety device requirements, or marking requirements178.35(d), (e), (f)$5,000.
6. Failure to meet wall thickness requirementsVarious$9,300 to $18,700.
7. Failure to heat treat cylinders prior to testingVarious$6,200 to $18,700.
8. Failure to conduct a complete visual internal examinationVarious$3,100 to $7,700.
9. Failure to conduct a hydrostatic test, or conducting a hydrostatic test with inaccurate test equipmentVarious$3,100 to $7,700.
10. Failure to conduct a flattening testVarious$9,300 to $18,700.
11. Failure to conduct a burst test on a DOT-2P, 2Q, 2S, or 39 cylinder178.33-8, 178.33a-8, 178.33b-8, 178.65(f)(2)$6,200 to $18,700.
12. Failure to maintain required inspector's reports:178.35, Various.
a. No reports at all$5,000.
b. Incomplete or inaccurate reports$1,200 to $3,700.
13. Failure to complete or retain manufacturer's reports178.35(g)$6,200.
14. Representing a DOT-4 series cylinder as repaired or rebuilt to the requirements of the HMR without being authorized by the Associate Administrator180.211(a)$10,000 to $25,000.
F. Cargo Tank Motor Vehicles:
1. Failure to maintain complete cargo tank test reports, as required:180.417(b), (c).
a. No records$5,000.
b. Incomplete records$1,200 to $3,700.
2. Failure to have a cargo tank tested or inspected (e.g., visual, thickness, pressure, leakproofness)180.407(c)$8,000 and up; increase by 25 percent for each additional.
3. Failure to mark a cargo tank with test and inspection markings180.415$600 each item.
4. Failure to retain a cargo tank's data report and Certificates or design certification178.320(b), 178.337-18, 178.338-19, 178.345-15$6,200.
5. Failure to mark a special permit number on a cargo tank.172.301(c)$1,800.
6. Constructing a cargo tank or cargo tank motor vehicle not in accordance with a special permit or design certification178.320(b), Special Permit$13,500.
7. Failure to mark manhole assemblies on a cargo tank motor vehicle manufactured after October 1, 2004178.345-5(e)$4,500.
8. Failure to apply specification plate and name plate:178.337-17, 178.338-18, 178.345-14.
a. No marking$4,500.
b. Incomplete marking$600 per item.
9. Failure to conduct monthly inspections and tests of discharge system in cargo tanks180.416(d)$2,500.
G. Cylinder Requalification:
1. Certifying or marking as retested a non-specification cylinder180.205(a)$1,000.
2. Failure to have retester's identification number (RIN)180.205(b)$5,000.
3. Failure to have current authority due to failure to renew a RIN180.205(b)$2,500 + $600 each additional year.
4. Marking a RIN before successfully completing a hydrostatic retest180.205(b)$1,000.
5. Representing, marking, or certifying a cylinder as meeting the requirements of a special permit when the cylinder was not maintained or retested in accordance with the special permit171.2(c), (e), 180.205(c), Special Permit$2,500 to $7,500.
6. Failure to conduct a complete visual external and internal examination180.205(f)$2,600 to $6,500.
7. Performing hydrostatic retesting without confirming the accuracy of the test equipment or failing to conduct hydrostatic testing180.205(g)(1), 180.205(g)(3)$2,600 to $6,500.
8. Failure to hold hydrostatic test pressure for 30 seconds or sufficiently longer to allow for complete expansion180.205(g)(5)$3,800.
9. Failure to perform a second retest, after equipment failure, at a pressure increased by the lesser of 10 percent or 100 psi (includes exceeding 90percent of test pressure prior to conducting a retest)180.205(g)(5)$3,800.
10. Failure to condemn a cylinder when required (e.g., permanent expansion exceeds 10 percent of total expansion [5percent for certain special permit cylinders], internal or external corrosion, denting, bulging, evidence of rough usage)180.205(i)$7,500 to $13,500.
11. Failure to properly mark a condemned cylinder or render it incapable of holding pressure180.205(i)(2)$1,000 to $5,000.
12. Failure to notify the cylinder owner in writing when a cylinder has been condemned180.205(i)(2)$1,200.
13. Failure to perform hydrostatic retesting at the minimum specified test pressure180.209(a)$2,600 to $6,500.
14. Marking a star on a cylinder that does not qualify for that mark180.209(b)$2,500 to $5,000.
15. Marking a “ + ” sign on a cylinder without determining the average or minimum wall stress by calculation or reference to CGA Pamphlet C-5173.302a(b)$2,500 to $5,000.
16. Marking a cylinder in or on the sidewall when not permitted by the applicable specification180.213(b)$7,500 to $13,500.
17. Failure to maintain legible markings on a cylinder180.213(b)(1)$1,000.
18. Marking a DOT 3HT cylinder with a steel stamp other than a low-stress steel stamp180.213(c)(2)$7,500 to $13,500.
19. Improper marking of the RIN or retest date on a cylinder180.213(d)$1,000.
20. Marking an FRP cylinder with steel stamps in the FRP area of the cylinder such that the integrity of the cylinder is compromisedSpecial Permit$7,500 to $13,500.
21. Failure to comply with eddy current examination requirements for DOT 3AL cylinders manufactured of aluminum alloy 6351-T6, when applicableAppendix C to part 180$2,600 to $6,500.
22. Failure to maintain current copies of the HMR, DOT special permits, and CGA Pamphlets applicable to inspection, retesting, and marking activities180.215(a)$700 to $1,500.
23. Failure to keep complete and accurate records of cylinder reinspection and retest:180.215(b).
a. No records kept$5,000.
b. Incomplete or inaccurate records$1,200 to $3,700.
Carrier Requirements
A. Incident Notification:
1. Failure to provide immediate telephone/online notification of a reportable hazardous materials incident reportable under 171.15(b)171.15$6,000.
2. Failure to file a written hazardous material incident report within 30 days of discovering a hazardous materials incident reportable under 171.15(b) or 171.16(a)171.16$4,000.
3. Failure to include all required information in hazardous materials incident notice or report or failure to update report171.15, 171.16$1,000.
B. Shipping Papers:
1. Failure to retain shipping papers for 1 year after a hazardous material (or 3 years for a hazardous waste) is accepted by the initial carrier174.24(b), 175.33(c), 176.24(b), 177.817(f)$1,200.
C. Stowage/Attendance/Transportation Requirements:
1. Transporting packages of hazardous material that have not been secured against movementVarious$3,700 and up.
2. Failure to properly segregate hazardous materialsVarious$9,300 and up.
3. Failure to remove a package containing hazardous materials from a motor vehicle before discharge of its contents:177.834(h).
a. Packing Group I and §172.504 Table 1 materials$5,000.
b. Packing Group II$3,000.
c. Packing Group III$1,000.
4. Transporting explosives in a motor vehicle containing metal or other articles or materials likely to damage the 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 damage177.835(i)$6,500 and up.
5. Failure to attend Class 1 explosive materials during transportation177.835(k)$3,000.
6. Transporting railway track torpedoes outside of flagging kits, in violation of DOT-E 7991171.2(b), (e)$8,700.
7. Failure to carry a hazmat registration letter or number in the transport vehicle107.620(b)$1,000.
8. Transporting Class 7 (radioactive) material having a total transport index greater than 50177.842(a)$6,200 and up.
9. Transporting Class 7 (radioactive) material without maintaining the required separation distance177.842(b)$6,200 and up.
10. Failure to comply with radiation survey requirements of a special permit that authorizes the transportation of Class 7 (radioactive) material having a total transportation index exceeding 50171.2(b), (e), Special Permit$6,200 and up.

The baseline penalty amounts in Part II are used as a starting amount or range appropriate for the normal or typical nature, extent, circumstances, and gravity of the probable violations frequently cited in enforcement reports. PHMSA must also consider any additional factors, as provided in 49 U.S.C. 5123(c) and 49 CFR 107.331, including the nature, circumstances, extent and gravity of a violation, the degree of culpability and compliance history of the respondent, the financial impact of the penalty on the respondent, and other matters as justice requires. Consequently, at each stage of the administrative enforcement process, up to and including issuance of a final order or decision on appeal, PHMSA can adjust the baseline amount in light of the specific facts and circumstances of each case.

As part of this analysis, PHMSA reviews the factors outlined in the next section, Miscellaneous Factors Affecting Penalty Amounts, the safety implications of the violation, the pervasiveness of the violation, and all other relevant information. PHMSA considers not only what happened as a result of the violation, but also what could have happened as a result of continued violation of the regulations. As a general matter, one or more specific instances of a violation are presumed to reflect a respondent's general manner of operations, rather than isolated occurrences.

PHMSA may draw factors relevant to the statutory considerations from the initial information gathered by PHMSA's Office of Hazardous Materials Safety Field Operations, the respondent in response to an exit briefing, ticket, or Notice of Probable Violation (NOPV), or information otherwise available to us. We will generally apply the specific statutory factors that are outlined in the next section, Miscellaneous Factors Affecting Penalty Amounts, in the following order:

1. Select the appropriate penalty amount within a specific baseline or range, with appropriate increases or decreases depending on the packing group or material involved and other information regarding the frequency or duration of the violation, the culpability of the respondent, and the actual or potential consequences of the violation.

2. Apply decreases for a reshipper or carrier that reasonably relied on an offeror's non-compliant preparation of a hazardous materials shipment.

3. Apply increases for multiple counts of the same violation.

4. Apply increases for prior violations of the HMR within the past six years.

5. Apply decreases for corrective actions.

6. Apply decreases for respondent's inability to pay or adverse effect on its ability to continue in business.

After each adjustment listed above, PHMSA will use the new modified baseline to calculate each subsequent adjustment. PHMSA will apply adjustments separately to each individual violation. All penalty assessments will be subject to additional adjustments as appropriate to reflect other matters as justice requires.

A. Respondents That Reship

A person who either receives hazardous materials from another company and reships them (reshipper), or accepts a hazardous material for transportation, and transports that material (carrier), is responsible for ensuring that the shipment complies in all respects with Federal hazardous materials transportation law. In both cases, the reshipper or carrier independently may be subject to enforcement action if the shipment does not comply.

Depending on all the circumstances, however, the person who originally prepared the shipment and placed it into transportation may have greater culpability for the noncompliance than the reshipper or carrier who reasonably relies on the shipment as received and does not open or alter the package before the shipment continues in transportation. PHMSA will consider the specific knowledge and expertise of all parties, as well as which party is responsible for compliance under the regulations, when evaluating the culpability of a reshipper or carrier. PHMSA recognizes that a reshipper or carrier may have reasonably relied upon information from the original shipper and may reduce the applicable baseline penalty amount up to 25 percent.

B. Penalty Increases for Multiple Counts

A main objective of PHMSA's enforcement program is to obtain compliance with the HMR and the correction of violations which, in many cases, have been part of a company's regular course of business. As such, there may be multiple instances of the same violation. Examples include a company shipping various hazardous materials in the same unauthorized packaging, shipping the same hazardous material in more than one type of unauthorized packaging, shipping hazardous materials in one or more packagings with the same marking errors, or using shipping papers with multiple errors.

Under the Federal hazmat law, 49 U.S.C. 5123(a), each violation of the HMR and each day of a continuing violation (except for violations relating to packaging manufacture or qualification) is subject to a civil penalty of up to $81,993 or $191,316 for a violation occurring on or after July 31, 2019. As such, PHMSA generally will treat multiple occurrences that violate a single regulatory provision as separate violations and assess the applicable baseline penalty for each distinct occurrence of the violation. PHMSA will generally consider multiple shipments or, in the case of package testers, multiple package designs, to be multiple occurrences; and each shipment or package design may constitute a separate violation.

PHMSA, however, will exercise its discretion in each case to determine the appropriateness of combining into a single violation what could otherwise be alleged as separate violations and applying a single penalty for multiple counts or days of a violation, increased by 25 percent for each additional instance, as directed by 49 U.S.C. 5123(c). For example, PHMSA may treat a single shipment containing three items or packages that violate the same regulatory provision as a single violation and apply a single baseline penalty with a 50 percent increase for the two additional items or packages; and PHMSA may treat minor variations in a package design for a package tester as a single violation and apply a single baseline penalty with a 25 percent increase for each additional variation in design.

When aggravating circumstances exist for a particular violation, PHMSA may handle multiple instances of a single regulatory violation separately, each meriting a separate baseline or increase the civil penalty by 25 percent for each additional instance. Aggravating factors may include increased safety risks, continued violation after receiving notice, or separate and distinct acts. For example, if the multiple occurrences each require their own distinct action, then PHMSA may count each violation separately (e.g., failure to obtain approvals for separate fireworks devices).

C. Penalty Increases for Prior Violations

The baseline penalty in the List of Frequently Cited Violations assumes an absence of prior violations. If a respondent has prior violations of the HMR, generally, PHMSA will increase a proposed penalty.

When setting a civil penalty, PHMSA will review the respondent's compliance history and determine if there are any finally-adjudicated violations of the HMR initiated within the previous six years. Only cases or tickets that have been finally-adjudicated will be considered (i.e., the ticket has been paid, a final order has been issued, or all appeal remedies have been exhausted or expired). PHMSA will include prior violations that were initiated within six years of the present case; a case or ticket will be considered to have been initiated on the date of the exit briefing for both the prior case and the present case. If multiple cases are combined into a single Notice of Probable Violation or ticket, the oldest exit briefing will be used to determine the six-year period. If a situation arises where no exit briefing is issued, the date of the Notice of Probable Violation or Ticket will be used to determine the six-year period. PHMSA may consider prior violations of the Hazardous Materials Regulations from other DOT Operating Administrations.

The general standards for increasing a baseline proposed penalty on the basis of prior violations are as follows:

1. For each prior civil or criminal enforcement case—25 percent increase over the pre-mitigation recommended baseline penalty.

2. For each prior ticket—10 percent increase over the pre-mitigation recommended baseline penalty.

3. If a respondent is cited for operating under an expired special permit and previously operated under an expired special permit (as determined in a finally-adjudicated civil, criminal, or administrative enforcement case or a ticket), PHMSA will increase the civil penalty 100 percent.

4. If a respondent is cited for the exact same violation that it has been previously cited for within the six-year period (in a finally-adjudicated civil, criminal, or administrative enforcement case or a ticket), PHMSA will increase the baseline for that violation by 100 percent. This increase will apply only when the present violation is identical to the previous violation and applies only to the specific violation that has recurred.

5. A baseline proposed penalty (both for each individual violation and the combined total) will not be increased more than 100 percent on the basis of prior violations.

D. Corrective Action

PHMSA may lower a proposed penalty when a respondent's documented corrective action has fixed an alleged violation. Corrective action should demonstrate not only that the specific deficiency is corrected but also that any systemic corrections have been addressed to prevent recurrence of the violation.

The two primary factors that determine the reduction amount are the extent and timing of the corrective action. In other words, PHMSA will determine the amount of mitigation based on how much corrective action a respondent completes and how soon after the exit briefing it performs corrective action. Comprehensive systemic action to prevent future violations may warrant greater mitigation than actions that simply target violations identified during the inspection. Actions taken immediately (within the 30 calendar day period that respondents have to respond to an exit briefing, or upon approval of Field Operations) may warrant greater mitigation than actions that are not taken promptly.

PHMSA may consider a respondent's corrective action to assess mitigation at various stages in the enforcement process, including: (1) AFTEr an inspection and before an NOPV is issued; (2) on receipt of an NOPV; or (3) after receipt of an NOPV. In order to reduce a civil penalty for corrective action, PHMSA must receive satisfactory documentation that demonstrates the corrective action was completed. If a corrective action is of a type that cannot be documented (e.g., no longer using a particular packaging), then a respondent may provide a signed affidavit describing the action it took. The affidavit must begin with the affirmative oath “I hereby affirm under the penalties of perjury that the below statements are true and correct to the best of my knowledge, information and belief,” in accordance with 28 U.S.C. 1746.

Generally, corrective action credit may not exceed 25 percent. Mitigation is applied to individual violations and fact patterns but should not be considered to be automatic reduction. 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. If a respondent has previously committed the same violation, however, as determined in a finally-adjudicated civil, criminal, or administrative enforcement case or a ticket, PHMSA will not apply any reduction for corrective action.

In determining the appropriate civil penalty reduction, PHMSA will consider the extent to which the respondent corrected the violation and any risks or harms it created, the respondent's actions to prevent the violation from recurring, improvements to overall company practices to address a widespread compliance issue, and how quickly the corrective action was performed. In general, PHMSA will apply the following reductions for corrective action, subject to the facts and circumstances of individual cases and respondents. If a respondent has given full documentation of timely corrective action and PHMSA does not believe that anything else can be done to correct the violation or improve overall company practices, we will generally reduce the civil penalty by no more than 25 percent. As noted above, a 25 percent reduction is not automatic. We will reduce the penalty up to 20 percent when a respondent promptly and completely corrected the cited violation and has taken substantial steps toward comprehensive improvements. PHMSA will generally apply a reduction up to 15 percent when a respondent has made substantial and timely progress toward correcting the specific violation as well as overall company practices, but additional actions are needed. A reduction up to 10 percent is appropriate when a respondent has taken significant steps toward addressing the violation, but minimal or no steps toward correcting broader company policies to prevent future violations. PHMSA may reduce a penalty up to 5 percent when a respondent made untimely or minimal efforts toward correcting the violation.

E. Financial Considerations

PHMSA may mitigate a proposed penalty when a respondent documents that the penalty would either (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 a violation. PHMSA may apply this mitigation by reducing the civil penalty or instituting a payment plan.

PHMSA will only mitigate a civil penalty based on financial considerations when a respondent supplies financial documentation demonstrating one of the factors above. A respondent may submit documentation of financial hardship at any stage to receive mitigation or an installment payment plan. Documentation includes tax records, a current balance sheet, profit and loss statements, and any other relevant records. Evidence of a respondent's financial condition is used only to decrease a penalty, and not to increase it.

In evaluating the financial impact of a penalty on a respondent, PHMSA will consider all relevant information on a case-by-case basis. Although PHMSA will determine financial hardship and appropriate penalty adjustments on an individual basis, in general, we will consider the following factors.

1. The overall financial size of the respondent's business and information on the respondent's balance sheet, including the current ratio (current assets to current liabilities), the nature of current assets, and net worth (total assets minus total liabilities).

2. A current ratio close to or below 1.0 may suggest that the company would have difficulty in paying a large penalty or in paying it in a single lump sum.

3. A small amount of cash on hand (representing limited liquidity), even with substantial other current assets (such as accounts receivable or inventory), may suggest a company would have difficulty in paying a penalty in a single lump sum.

4. A small or negative net worth may suggest a company would have difficulty in paying a penalty in a single lump sum. Notwithstanding, 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.

When PHMSA determines that a proposed penalty poses a significant financial hardship, we may reduce the proposed penalty and/or implement an installment payment plan. The appropriateness of these options will depend on the circumstances of the case.

When an installment payment plan is appropriate, the length of the payment plan should be as short as possible, but may be adjusted as necessary. PHMSA will not usually exceed six months for a payment plan. In unusual circumstances, PHMSA may extend the period of a payment plan. For example, the duration of a payment plan may reflect fluctuations in a company's income if its business is seasonal or if the company has documented specific reasons for current non-liquidity.

[78 FR 60733, Oct. 2, 2013, as amended at 81 FR 42268, June 29, 2016; 82 FR 18399, Apr. 19, 2017; 84 FR 37071, July 31, 2019]

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