______________________________ 
                              )
In the Matter of EAGLE X-RAY  )
                              )
        OF TEXAS, INC.,       )  Ref. No. 95-125-RMS-SW 
                              )
Respondent.                   )
______________________________)

ACTION ON APPEAL

Background

On January 8, 1997, the Chief Counsel, Research and Special Programs Administration (RSPA), U.S. Department of Transportation, issued an Order to Eagle X-Ray of Texas, Inc. (Respondent) assessing a penalty in the amount of $5,800 for three violations of the Hazardous Materials Regulations (HMR), 49 C.F.R. Parts 171-180.

The Order, which is incorporated herein by reference, found that Respondent knowingly offered for transportation in commerce special form radioactive material without being registered with the Nuclear Regulatory Commission (NRC) as a party to the NRC package approval, in violation of 49 C.F.R. §§ 171.2(a) and 173.471(a) (violation No. 1), and without maintaining a complete safety analysis (or an International Atomic Energy Agency Certificate of Compliance) for this material, in violation of 49 C.F.R. §§ 171.2(a) and 173.476(a) (violation No. 2). The Order also found that Respondent failed to provide the required training to its "hazmat" employees and maintain training records, in violation of 49 C.F.R. § 172.702(b) and 172.704(d) (violation No. 3).

The Order reduced the $8,700 civil penalty originally proposed in the May 19, 1995 Notice of Probable Violation, and further provided that Respondent could pay the total $5,800 penalty in 25 monthly installments of $232 each. By letter dated January 27, 1997, Respondent submitted a timely appeal of the Order.

Discussion

Respondent asserts two grounds for reduction of the penalty assessed in the Order: (1) in light of the "lack of prior violations, . . . the dollar assessment for the penalty is far more severe than the violation," and (2) it is a "small industrial x-ray company struggling to make ends meet . . . [and] the fine is more than 10% of our occurring year profit."

The violations committed by Respondent are serious. By not registering with the NRC, Eagle would not have had the necessary packaging instructions for shipping this radioactive material. A safety analysis (or IAEA Certificate of Compliance) is necessary to assure that a radioactive source meets the criteria for special form. In all likelihood, Eagle’s failure to provide training contributed to the other two violations.

The penalty proposed in the Notice and assessed in the Order specifically considered the fact that Respondent had not previously been found to have violated the HMR. As fully explained in Appendix A to the Notice and in RSPA’s penalty guidelines, published at Appendix A to 49 C.F.R. Part 107, Subpart D, penalties are increased when a respondent has prior violations. The absence of prior violations does not warrant a reduction of the baseline penalties for these offenses.

Moreover, the penalty assessed in the Order was reduced by 1/3 from that proposed in the Notice, a greater reduction than normally warranted by corrective actions. See Sec. IV to RSPA’s penalty guidelines. This reduction fully considered the nature and circumstances of these violations and Respondent’s good faith efforts to achieve compliance after the violations were brought to its attention.

Although the total $5,800 penalty assessed in the Order appears to exceed 10% of Respondent’s net income for the first 11 months of 1995, that penalty may be paid in 25 monthly installments of $232 each. The comparison, if relevant, is that the amount of the penalty payable in one year is less than 5% of Respondent’s annual net income. More importantly, the income statement provided by Respondent also reflects the payment of dividends to shareholders that are several times the total penalty assessed in the Order. If Respondent can pay these dividends out of funds that it does not need for the operation of its business, it is able to pay the penalty assessed in the Order. There is no basis for finding that Respondent cannot pay this penalty over the 25-month period allowed in the Order, or that the payment of this penalty will adversely affect the Respondent’s ability to continue in business.

Findings

I have determined that there is not sufficient information to warrant mitigation of the civil penalty assessed in the Chief Counsel's Order. I find that a civil penalty of $5,800, payable in 25 monthly installments of $232 each, is appropriate in light of the nature and circumstances of these violations, their extent and gravity, Respondent's culpability, Respondent's lack of prior offenses, Respondent's ability to pay, the effect of a civil penalty on Respondent's ability to continue in business, and all other relevant factors.

Therefore, the Order of January 8, 1997, is affirmed as being substantiated in the record and as being in accordance with the assessment criteria prescribed in 49 C.F.R. § 107.331.

Form of Payment

Each monthly installment payment must be made in one of the following two ways:

1. by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure to this Order. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-320), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 25770, Oklahoma City, OK 73125 (Telephone 405-954-4719).
2. by sending a certified check or money order (containing the Ref. No. of this case) payable to "U.S. Department of Transportation" to the Financial Operations Division (AMZ-320), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 25770, Oklahoma City, OK 73125.

If the $5,800 civil penalty is paid in accordance with the terms of this Action on Appeal, no interest will be charged. If, however, the civil penalty is not paid in accordance with the terms of this Action on Appeal, the Financial Operations Division of the Federal Aviation Administration will assess interest and administrative charges, and initiate collection activities on the debt and those charges. Interest on the debt will accrue from the date of issuance of this Action on Appeal at the applicable rate in accordance with 31 U.S.C. § 3717, 4 C.F.R. § 102.13, and 49 C.F.R. § 89.23. Pursuant to those same authorities, a late-payment penalty of six percent (6%) per year will be charged on any portion of the debt that is more than 90 days past due. This penalty will accrue from the date this Action on Appeal is received.

Final Administrative Action

This decision on appeal constitutes the final administrative action in this proceeding.

Dr. D.K. Sharma
Administrator

Date Issued: May 13, 1997

Original to: Mr. Charles Aycock, President
Eagle X-Ray of Texas, Inc.
P.O. Box 283
Mont Belvieu, TX 77580