[Code of Federal Regulations]
[Title 49, Volume 2, Parts 100 to 185]
[Revised as of October 1, 1998]
From the U.S. Government Printing Office via GPO Access
[CITE: 49CFR107.339]
[Page 37-44]
TITLE 49--TRANSPORTATION
CHAPTER I--RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION, DEPARTMENT OF
TRANSPORTATION
PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES--Table of Contents
Subpart D--Enforcement
Sec. 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]
Appendix A to Subpart D of Part 107--Guidelines for Civil Penalties
I. This appendix sets forth the guidelines used by the Office of
Hazardous Materials Safety (as of January 18, 1995) in making initial
baseline determinations for recommending civil penalties. The first part
of these guidelines is a list of baseline amounts or ranges for probable
violations frequently cited in enforcement reports referred for action.
Following the list of violations are general guidelines used by OHMS in
making initial penalty determinations in enforcement cases.
II. List of Frequently Cited Violations
------------------------------------------------------------------------
Violation description Section or cite Baseline assessment
------------------------------------------------------------------------
PART 107--REQUIREMENTS
------------------------------------------------------------------------
Failure to register as a 107.608............. $1,000 +, $500 each
carrier or shipper of add'l year.
hazardous material.
------------------------------------------------------------------------
PART 171--REQUIREMENTS
------------------------------------------------------------------------
Failure to give immediate 171.15.............. $3,000.
telephone notice of a
reportable hazardous
materials incident.
Failure to file a DOT 5800.1 171.16.............. $500 to $2,500.
Hazardous Materials
Incident Report within 30
days following an
unintentional release of
hazardous materials in
transportation.
------------------------------------------------------------------------
[[Page 38]]
PART 172--REQUIREMENTS
------------------------------------------------------------------------
Shipping Papers (Sec.
172.200--172.205):
Failure to execute a 172.201............. $3,000 to $6,000.
shipping paper for a
shipment of hazardous
materials.
Failure to follow one or 172.201(a)(1)....... $1,200.
more of the three
approved formats for
listing hazardous
materials on a shipping
paper.
Failure to include a 172.202............. $800 to $1,600.
proper shipping name in
the shipping
description or using an
incorrect proper
shipping name.
Failure to include a 172.202............. $1,000 to $2,000.
hazard class/division
number in the shipping
description.
Using an incorrect 172.202.............
hazard class/
identification number.
--that does not .................. $800,
affect
compatibility
requirements.
--that affects .................. $3,000 to $6,000.
compatibility
requirements.
Failure to include an 172.202............. $1,000 to $2,000.
identification number
in the shipping
description.
Using an incorrect 172.202.............
identification number.
--that does not .................. $800,
change the response
information.
--that changes the .................. $3,000 to $6,000.
response
information.
Using a shipping 172.202............. $800.
description that
includes additional
unauthorized
information (extra or
incorrect words).
Using a shipping 172.202............. $500.
description not in
required sequence.
Using a shipping 172.202.............
description with two or
more required elements
missing or incorrect.
--such that the .................. $3,000.
material is
misdescribed.
--such that the .................. $6,000.
material is
misclassified.
Failure to include the 172.202(c).......... $400.
total quantity of
hazardous material
covered by a shipping
description.
The letters ``RQ'' are 172.203(c)(2)....... $500.
not used in the
shipping description to
identify materials that
are hazardous
substances.
Using a shipping 172.203(d).......... $2,000 to $4,000.
description for Class 7
(radioactive) material
that fails to contain
the required additional
entries, or contains
incorrect information
for these additional
entries.
Failure to include a 172.203(k).......... $1,000.
required technical name
in parentheses for a
listed generic or
``nos'' material.
Failure to list an 172.203(a).......... $800.
exemption number in
association with the
shipping description.
Failure to include the 172.204(a).......... $1,000.
required shipper's
certification on a
shipping paper.
Failure to execute the 172.204............. $800.
required shipper's
certification on a
shipping paper.
Emergency Response
Information Requirements
(Sec. 172.600--172.604):
Providing or listing 172.602.............
incorrect emergency
response information
with or on a shipping
paper.
--no significant .................. $800,
difference in
response.
--significant .................. $3,000 to $6,000.
difference in
response.
Failure to include an 172.604............. $2,600.
emergency response
telephone number on a
shipping paper.
Failure to have the 172.604............. $1,300.
emergency response
telephone number
monitored while a
hazardous material is
in transportation or
listing multiple
telephone numbers
(without specifying the
times for each) that
are not monitored 24
hours a day.
Listing a fraudulent 172.604............. $2,600 to $4,200.
emergency response
telephone number on a
shipping paper.
Listing an incorrect or 172.604............. $1,300.
non-working emergency
response telephone
number on a shipping
paper.
Failure to provide 172.604............. $1,300.
required technical
information when the
listed emergency
response telephone
number is contacted.
Package Marking Requirements
(Sec. 172.300--172.338):
Failure to mark the 172.301(a).......... $800 to $1,600.
proper shipping name on
a package or marking an
incorrect shipping name
on a package.
Failure to mark the 172.301(a).......... $1,000 to $2,000.
identification number
on a package.
Marking a package with 172.301(a)..........
an incorrect
identification number.
--that does not .................. $800,
change the response
information.
--that changes the .................. $3,000 to $6,000.
response
information.
Failure to mark the 172.301(a).......... $3,000 to $6,000.
proper shipping name
and identification
number on a package.
Marking a package with 172.301(a)..........
an incorrect shipping
name and identification
number.
--that does not .................. $1,500 to $3,000.
change the response
information.
--that changes the .................. $3,000 to $6,000.
response
information.
Failure to include the 172.301(c).......... $1,000.
required technical
name(s) in parentheses
for a listed generic or
``no'' entry.
Failure to mark a 172.312............. $2,500 to $3,500.
package containing
liquid hazardous
materials with required
orientation marks.
Package Labeling
Requirements (Sec. 172.400-
172.450):
Failure to label a 172.400............. $5,000.
package..
Placing a label that 172.400............. $5,000.
represents a hazard
other than the hazard
presented by the
hazardous material in
the package..
[[Page 39]]
Placing a label on a 172.401(a).......... $800.
package that does not
contain a hazardous
material..
Placing a label on Class 172.403............. $5,000.
7 (radioactive)
material that
understates the proper
label category..
Placing a label on Class 172.403(g).......... $2,000 to $4,000.
7 (radioactive)
material that fails to
contain, or has
erroneous, entries for
the name of the
radionuclide(s),
activity, and transport
index..
Placing a label not 172.407(c).......... $800.
conforming to size
requirements on a
package..
Placing a label on a 172.406(a).......... $800.
different surface of
the package than, or
far away from, the
proper shipping name..
Placing a label that 172.407(d).......... $600 to $2,500.
does not meet color
specification
requirements on a
package (depending on
the variance)..
Failure to place a 172.402............. $500 to $2,500.
required subsidiary
label on a package..
Failure to provide an 172.411............. $2,500.
appropriate class or
division number on a
label..
Placarding Requirements
(Sec. 172.500-172.560):
Failure to properly 172.504............. $1,000 to $9,000.
placard a freight
container or vehicle
containing hazardous
materials when table 1
is applicable..
Failure to properly 172.504............. $800 to $7,500.
placard a freight
container or vehicle
containing hazardous
materials when table 2
is applicable..
Training Requirements (Sec.
172.700-172.704):
Failure to train hazmat 172.702.............
employees in the three
required areas of
training.
--more than 10 .................... $2,400 and up.
hazmat employees..
--10 hazmat .................... $1,500 and up.
employees or less..
Failure to train hazmat 172.702.............
employees in any one of
the three required
areas of training.
--more than 10 .................... $800 and up.
hazmat employees..
--10 hazmat .................... $500 and up.
employees or less..
Failure to maintain 172.704.............
training records.
--more than 10 .................... 800 and up.
hazmat employees..
--10 hazmat .................... $500 and up.
employees or less..
------------------------------------------------------------------------
PART 173--REQUIREMENTS
------------------------------------------------------------------------
Overpack Requirements (Sec.
173.25)
Failure to mark an 173.25(a)(4)........ $3,000.
overpack with a
statement indicating
that the inside
packages comply with
prescribed
specifications when
specification packaging
is required..
Reconditioner Requirements
(Sec. 173.28):
Representing, marking, 173.28(c) & (d)..... $6,000 to $10,800.
or certifying a drum as
a reconditioned UN
standard packaging,
when the drum did not
meet a UN standard..
Marking an incorrect 173.28(b)(2)(ii)....
registration number on
a reconditioned
packaging.
--incorrect number.. .................... $800.
--fraudulent use of .................... $7,200.
another
reconditioner's
number..
Failure to properly 173.28(b)(2)(i).....
conduct alternate
leakage test.
--improper test..... .................... $2,000.
--no test at all.... .................... $4,000.
Representing, marking, 173.28(d)........... $500.
or certifying a drum as
altered from one
standard to another,
when the drum had not
actually been altered..
Portable and IM Tank
Requirements (Secs.
173.32(e), 173.32c,
173.315)
Offering hazardous 173.32(a)(1), $3,500 to $7,000.
materials for 173.315(a),
transportation in a DOT Applicable
specification or Exemption.
exemption portable tank
which is out of test..
Offering an IM portable 173.32c(c).......... $3,500.
tank for transportation
that has not been
hydrostatically tested
within the last 2\1/2\
years per 173.32b(a)..
Offering an IM portable 173.32c(c).......... $3,500.
tank for transportation
that has not been
visually inspected in
last five years per
173.32b(b)..
Offering an IM portable 173.32c(c).......... $7,000.
tank for transportation
that has not been
visually or
hydrostatically tested
as required, or failing
to remove the safety
relief valves during
testing..
Offering a hazardous 173.32c(g)..........
material for
transportation in an IM
portable tank equipped
with bottom outlets,
when the material
contained is prohibited
from being offered in
this type of packaging.
--Packing Group II.. .................... $7,000.
--Packing Group III. .................... $5,000.
Failure to provide the 173.32c(k).......... $6,000 to $12,000.
required outage for a
shipment of hazardous
materials, that results
in the release of
hazardous materials..
Offering a hazardous 173.32(e)(3), $3,000.
material for 173.32b(d).
transportation in an
DOT, exemption, or IM
portable tank which
fails to bear markings
that it has been
properly retested..
Cylinder Retesters (Secs.
173.23, 173.34, and
173.302):
Failure to remark as DOT 173.23(c)........... $600.
3AL an aluminum
cylinder manufactured
under a former
exemption..
Certifying or marking as 173.34.............. $800.
retested a
nonspecification
cylinder.
Marking a cylinder in or 173.34(c)(1)........ $6,000 to $10,800.
on the sidewall area
when not permitted by
the applicable
specification.
[[Page 40]]
Failure to maintain 173.34(c)........... $800.
legible markings on a
cylinder.
Failure to perform 173.34(e)........... $2,100 to $5,200.
hydrostatic retesting
at the minimum of 5/3
times the service
pressure, or at the
minimum specified test
pressure.
Failure to conduct a 173.34(e)(3)........ $2,100 to $5,200.
complete visual
external and internal
examination.
Failure to have a 173.34(e)(2)(i)..... $4,000.
retester's
identification number
(RIN).
Failure to have current 173.34)(e)(2)(i).... $2,000.
authority due to
failure to renew a
retester's
identification number.
Failure to have a 173.34(e)(2)(i)..... $7,200.
retester's
identification number
and marking another RIN
on a cylinder.
Marking a RIN before 173.34(e)(1)(ii).... $800.
successfully completing
a hydrostatic retest.
Requalifying a DOT 173.34(e)(1)(ii).... $4,200 to $10,400.
cylinder without
performing the visual
inspection or
hydrostatic retest.
Performing hydrostatic 173.34(e)(4)........ $2,100 to $5,200.
retesting without
demonstrating the
accuracy of the testing
equipment.
Failure to hold 173.34(e)(4)........ $3,100.
hydrostatic test
pressure for 30 seconds
or sufficiently longer
to allow for complete
expansion.
Failure to perform a 173.34(e)(4)........ $3,100.
second retest, after
equipment failure, at a
pressure of 10% more or
100 psi more, whichever
is less (includes
exceeding 90% of test
pressure prior to
conducting a retest).
Failure to condemn a 173.34(e)(6)........ $10,000.
cylinder with permanent
expansion of 10% or
greater (5% for certain
exemption cylinders);
failure to condemn
cylinders with evidence
of internal or external
corrosion, denting,
bulging, or rough usage.
Marking an FRP cylinder Applicable Exemption $6,000 to $10,800.
with steel stamps in
the FRP area of the
cylinder such that the
integrity of the
cylinder is compromised.
Failure to keep complete
and accurate records of
cylinder reinspection
and retest.
--No records kept... .................... $4,000.
--Incomplete or 173.34(e)(8)........ $1,000 to $3,000.
inaccurate records.
Improper marking of the 173.34(e)(7)........ $800
RIN or retest date on a
cylinder.
Marking a DOT 3HT 173.34(e)(15)....... $6,000 to $10,800.
cylinder with a steel
stamp other than a low-
stress steel stamp.
Marking a ``+'' sign on 173.302(c)(3)....... $3,000 to $4,000.
a cylinder without
determining the average
or maximum wall stress,
by calculation or
reference to CGA
Pamphlet C-5.
Representing, marking, 171.2(c), Applicable $2,000 to $6,000.
or certifying a Exemption.
cylinder as meeting the
requirements of an
exemption, when the
cylinder was not
maintained or retested
in accordance with the
exemption.
Rebuilder Requirements (Sec.
173.34):
Representing a DOT-4 173.34(l)........... $6,000 to $10,800.
series cylinder as
meeting the
requirements of the
Hazardous Materials
Regulations without
being authorized to do
so by the Associate
Administrator for
Hazardous Materials
Safety.
Offeror Requirements
(General):
Offering a hazardous Various.............
material for
transportation in an
unauthorized non-UN
standard or
nonspecification
packaging (includes the
failure to comply with
the terms of an
exemption authorizing
the use of a
nonstandard or
nonspecification
packaging).
--Packing Group I .................... $9,000.
(includes Sec. 172
504 table 1
materials).
--Packing Group II.. .................... $7,000.
--Packing Group III. .................... $5,000.
Offering a hazardous 178.3(a), 178.503(a) $3,600.
material for
transportation in a
packaging that has
successfully been
tested to an applicable
UN standard, but is not
marked with the
required UN marking.
Offering a hazardous 173.24(b)...........
material for
transportation in a
packaging that leaks
during conditions
normally incident to
transportation.
--Packing Group I .................... $12,000.
(includes Sec.
172.504 table 2
materials).
--Packing Group II.. .................... $9,000.
--Packing Group III. .................... $6,000.
Overfilling a package so 173.24(b)...........
that the effectiveness
is substantially
reduced.
--Packing Group I .................... $9,000.
(includes Sec.
172.504 table 1
materials).
--Packing Group II.. .................... $6,000.
--Packing Group III. .................... $3,000.
Offering a hazardous 171.14..............
material for
transportation after
October 1, 1996, in an
unauthorized non-UN
standard packaging
marked as manufactured
to a DOT specification.
--packaging meets .................... $3,000.
DOT specification.
--packaging does not .................... $5,000 to $9,000.
meet DOT
specification.
Offeror Requirements (Class
1--Explosives):
Failing to mark the 172.320............. $1,200.
``EX'' approval number
on a package containing
an explosive.
Offering an unapproved 173.54 and 173.56(b)
explosive for
transportation.
--Div 1.3 & 1.4 .................... $5,0000 to $10,000.
fireworks meeting
the chemistry
requirements (both
quantity and type)
of APA Standard 87-
1.
--all other .................... $10,000 to $27,500.
explosives
(including
forbidden
explosives).
Offering a leaking or 173.54(c)........... $10,000 to $27,500.
damaged package of
explosives for
transportation.
[[Page 41]]
Offeror Requirements (Class
7--Radioactive Materials):
Offering a DOT 173.415(a), 173.461.
specification 7A
packaging without
maintaining complete
documentation of tests
and an engineering
evaluation or
comparative data.
--tests and .................... $8,400.
evaluation not
performed.
--complete records .................... $2,000 to $5,000.
not maintained.
Offering a Type B 173.471(a)..........
packaging without
holding a valid NRC
approval certificate.
--never having .................... $2,500.
obtained one.
--holding an expired .................... $1,000.
certificate.
Offering a limited 177.421(d).......... $5,000 and up.
quantity of radioactive
materials without
marking the inner (or
single) packaging
``Radioactive.''
Offering low specific 173.427(a)(6)....... $800.
activity (LSA)
radioactive materials
consigned as exclusive
use without providing
instructions for
maintenance of
exclusive use shipment
controls.
Offering a package that 173.441............. $10,000 and up.
exceeds the permitted
limits for surface
radiation or transport
index.
Offering a package 173.443............. $5,000 and up.
without determining the
level of removable
external contamination,
or that exceeds the
limit for removable
external contamination.
Storing packages of 173.447(a).......... $5,000 and up.
radioactive material in
a group with a total
transport index more
than 50.
Offering special form 173.476(a) & (b).... $2,500.
radioactive materials
without maintaining a
complete safety
analysis or Certificate
of Competent Authority.
Offeror Requirements
(Cylinders):
Offering a compressed 173.301(c).......... $4,200 to $10,400.
gas for transportation
in a cylinder that is
out of test.
Failure to check each 173.303(d).......... $5,000.
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 at least
30 days.
Offering a limited 173.306(a)(3), (h).. $1,500 to $6,000.
quantity of a
compressed gas in a
metal container for the
purpose of propelling a
nonpoisonous material
and failing to heat the
cylinder until the
pressure is equivalent
to the equilibrium
pressure at 130 deg.F,
without evidence of
leakage, distortion, or
other defect.
------------------------------------------------------------------------
PART 178--REQUIREMENTS
------------------------------------------------------------------------
Third-Party Packaging
Certifiers (General):
Issuing a certification 1171.2(e), $500 per item.
that directs the 1178.2(b),
packaging manufacturer 178.3(a),
to improperly mark a 178.503(a).
packaging (e.g., steel
drum to be marked UN
4G).
Manufacturers (General):
Failure to insure a 178.601(b)..........
packaging certified as
meeting the UN standard
is capable of passing
the required
performance testing.
--Packing Group I .................... $10,800.
(includes Sec.
172.504 table 1
materials).
--Packing Group II.. .................... $8,400.
--Packing Group III. .................... $6,000.
Certifying a packaging 178.601(d)..........
as meeting a UN
standard when design
qualification testing
was not performed.
--Packing Group I .................... $10,800.
(includes Sec. 172
504 table 2
materials).
--Packing Group II.. .................... $8,400.
--Packing Group III. .................... $6,000.
Failure to conduct 178.601(e).......... $2,000 to $10,800.
periodic retesting on
UN standard packaging
(depending on length of
time and Packing Group).
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).
--design 178.601(d).......... $2,000 to $10,800.
qualification
testing.
--periodic retesting 178.601(e).......... $500 to $10,800.
Marking, or causing the 178.2(b), 178.3(a), $7,200.
marking of, a packaging 178.503(a)(8).
with the symbol of a
manufacturer or
packaging certifier
other than the company
that actually
manufactured or
certified the packaging.
Failure to maintain 178.601(1)..........
testing records.
--design .................... $1,000 to $5,000.
qualification
testing.
--periodic retesting .................... $500 to $2,000.
Improper marking of UN 178.503............. $500 per item.
certification.
Manufacturing DOT 171.14
specification packaging
after October 1, 1994
that is not marked as
meeting a UN
performance standard.
--if packaging does .................... $3,000.
meet DOT
specification.
--if packaging does .................... $6,000 to $10,800.
not meet DOT
specification.
Manufacturing Requirements--
Drums
Failure to properly 178.604(b)(1)
conduct production
leakproofness test.
--improper testing.. 173.28.............. $2,000.
[[Page 42]]
--no testing .................... $2,000 to $10,800.
performed.
Manufacturing Requirements--
Cylinders
Manufacturing, Various............. $7,500 to $15,000.
representing, marking,
certifying, or selling
a DOT high-pressure
cylinder that was not
inspected and verified
by an approved
independent inspection
agency.
Failure to have a Various............. $800.
registration number or
failure to mark the
registration number on
the cylinder.
Marking another Various............. $7,200.
company's number on a
cylinder.
Failure to mark the date 178.65.............. $3,000.
of manufacture or lot
number on a DOT-39
cylinder.
Failure to have a Various............. $5,000.
chemical analysis
performed in the US for
a material manufactured
outside the US/failure
to obtain a chemical
analysis from the
foreign manufacturer.
Failure to meet wall Various............. $7,500 to $15,000.
thickness requirements.
Failure to heat treat Various............. $5,000 to $15,000.
cylinders prior to
testing.
Failure to conduct a Various............. $2,500 to $6,200.
complete visual
internal examination.
Failure to conduct a Various............. $2,500 to $6,200.
hydrostatic test, or
conducting a
hydrostatic test with
inaccurate test
equipment.
Failure to conduct a Various............. $7,500 to $15,000.
flattening test.
Failure to conduct a 178.65-11........... $5,000 to $15,000.
burst test on a DOT-39
cylinder.
Failure to have Various............. $7,500 to $15,000.
inspections and
verifications performed
by an inspector.
Failure to maintain a Various.............
required inspector's
reports.
--no reports at all. .................... $5,000.
--incomplete or .................... $1,000 to $4,000.
inaccurate reports.
------------------------------------------------------------------------
Other Requirements
------------------------------------------------------------------------
Carrier Requirements:
Transporting packages of 177.834(a) & (g).... $3,000.
hazardous materials
that have not been
secured against
movement within the
vehicle.
Transporting explosives 177.835(i).......... $5,200.
in a motor vehicle
containing metal or
other articles or
materials likely to
damage such explosives
or any package in which
they are contained,
without segregating in
different parts of the
load or securing them
in place in or on the
motor vehicle and
separated by bulkheads
or other suitable means
to prevent such damage.
Transporting railway 171.2(b)............ $7,000.
track torpedoes outside
of flagging kits, in
violation of E-7991.
Transporting Class 7 177.842(a)......... $5,000 and up.
(radioactive) material
having a total
transport index more
than 50.
Transporting Class 7 177.842(b)......... $5,000 and up.
(radioactive) material
without maintaining the
required separation
distance.
Failing to comply with 171.2(b)............
requirements of an
exemption authorizing
the transportation of
Class 7 (radioactive)
material having a total
transport index more
than 50.
--failure to have .................... $5,000.
the radiation
survey record
required by Paras.
7(f), 8(b)(3).
--failure to have .................... $500 each.
other accompanying
documents required
by para. 8(b).
--other violations .................... $5,000 and up.
of Paras. 7 and 8.
Exemptions:
Offering or transporting 171.2(a), (b), (c), $1,000 + $500 each
hazardous materials, or Various. add'l year.
otherwise performing a
function, covered by an
exemption after
expiration of the
exemption.
------------------------------------------------------------------------
III. Consideration of Statutory Criteria
A. These guidelines are used by the Office of Hazardous Materials
Safety (OHMS) in setting initial proposed penalties for hazmat
violations. They indicate baseline amounts or ranges for probable
violations frequently cited in enforcement reports and set forth general
OHMS policy for considering statutory criteria.
B. The initial baseline determination partially considers the
nature, extent, circumstances, and gravity of the alleged violation.
That determination then is adjusted to consider all other evidence
concerning the nature, extent, circumstances, and gravity of the alleged
violation; degree of culpability; history of prior violations; ability
to pay; effect of the penalty on ability to continue to do business; and
such other matters as justice may require (a major component of which is
corrective action taken by a respondent to prevent a recurrence of
similar violations). In making a penalty recommendation, the baseline or
range may be increased or decreased on the basis of evidence pertaining
to these factors.
C. The following miscellaneous factors are used to implement one or
more of the statutory assessment criteria.
[[Page 43]]
IV. Miscellaneous Factors Affecting Penalty Amounts
A. Corrective Action
1. A proposed penalty is mitigated for documented corrective action
of alleged violations taken by a respondent. Corrective action may
occur: (1) After an inspection and before a Notice of Probable Violation
(NOPV) is issued; (2) on receipt of an NOPV; or (3) after receipt of an
NOPV (possibly after it is solicited by an PHMSA attorney). In general,
corrective action may reduce a penalty up to 25%. Mitigation may be
taken into account in the referral memo or may be recommended prior to
issuance of an Order by PHMSA's Chief Counsel.
2. The two primary factors in determining the penalty reduction are
extent and timing of the corrective action. In other words, mitigation
will be determined on the basis of how much corrective action was taken
and when it was taken. Systemic action to prevent future violations is
given greater consideration than action simply to remedy violations
identified during the inspection.
3. Mitigation is applied to individual violations. Thus, in a case
with two violations, if corrective action for the first violation is
more extensive than for the second, the penalty for the first will be
mitigated more than that for the second.
B. Respondents That Re-Ship
A shipper that reships materials received from another company, in
the same packaging and without opening or altering the package,
independently is responsible for ensuring that the shipment complies
with Federal hazmat law, and independently may be subject to enforcement
action if the package does not comply. Nevertheless, the reshipper is
considered to have a lesser level of responsibility for compliance in
those respects in which it reasonably relies on the compliance of the
package as received. In most cases of this type, OHMS will discount the
applicable baseline standard by about 25%. The specific knowledge and
expertise of all parties must be considered in discounting for reliance
on a prior shipper. This discount is applied before any consideration of
mitigation based on corrective action.
C. Penalty Increases for Multiple Counts
Under the Federal hazmat law, 49 U.S.C. 5213(a), each violation of
the HMR and each day of a continuing violation (except for violations
pertaining to packaging manufacture or qualification) is subject to a
civil penalty of up to $25,000 ($25,500 for a violation occurring after
January 21, 1997). Absent aggravating factors, OHMS, in its exercise of
discretion, ordinarily will apply a single penalty for multiple counts
or days of violation. In a number of cases, particularly those involving
shippers, an inspector may cite two or more similar packaging violations
for different hazardous materials. For example, the inspector may cite
the same marking violation for two or more packages. OHMS usually will
consider those additional violations as counts of the same violation and
will not recommend multiples of the same baseline penalty. Rather, OHMS
usually will recommend the baseline penalty for a single violation,
increased by 25% for each additional violation.
D. Financial Considerations
1. Mitigation is appropriate when the baseline penalty would (1)
exceed an amount that the respondent is able to pay, or (2) have an
adverse effect on the respondent's ability to continue in business.
These criteria relate to a respondent's entire business, and not just
the product line or part of its operations involved in the violation(s).
Beyond the overall financial size of the respondent's business, the
relevant items of information on a respondent's balance sheet include
the current ratio (current assets to current liabilities), the nature of
current assets, and net worth (total assets minus total liabilities).
2. These figures are considered on a case-by-case basis. In general,
however, a current ratio close to or below 1.0 means that the company
may have difficulty in paying a large penalty, and may justify reduction
of the penalty or an installment payment plan. A small amount of cash on
hand representing limited liquidity, even with substantial other current
assets (such as accounts receivable or inventory), may warrant a short-
term payment plan. Respondent's income statement also will be reviewed
to determine whether a payment plan is appropriate.
3. Many companies are able to continue in business for extended
periods of time with a small or negative net worth, and many respondents
have paid substantial civil penalties in installments even though net
worth was negative. For this reason, negative net worth alone does not
always warrant reduction of a proposed penalty or even, in the absence
of factors discussed above, a payment plan.
4. In general, an installment payment plan may be justified where
reduction of a proposed penalty is not, but the appropriateness of
either (or both) will depend on the circumstances of the case. The
length of a payment plan should be as short as possible, but the plan
may consider seasonal fluctuations in a company's income if the
company's business is seasonal (e.g., swimming pool chemical sales,
fireworks sales) or if the company has documented specific reasons for
current non-liquidity.
5. Evidence of financial condition is used only to decrease a
penalty, and not to increase it.
[[Page 44]]
E. Penalty Increases for Prior Violations
1. The baseline penalty presumes an absence of prior violations. If
prior violations exist, generally they will serve to increase a proposed
penalty. The general standard for increasing a baseline proposed penalty
on the basis of prior violations is as follows:
a. One prior case--25% increase over the pre-mitigation recommended
penalty
b. Two prior cases--50% increase over the pre-mitigation recommended
penalty
c. Three prior cases--75% increase over the pre-mitigation recommended
penalty
d. Four or more prior cases--100% increase over the pre-mitigation
recommended penalty
2. A case of prior violations closed more than five years previously
normally will not be considered in determining a proposed penalty.
F. Penalty Increases for Use of Expired Exemptions
Adjustments to the base line figures for use of expired exemptions
can be made depending on how much material has been shipped during the
period between the expiration date and the renewal date. If the company
previously has been found to have operated under an expired exemption,
the penalty is normally doubled. If the company has been previously
cited for other violations, the penalty generally will be increased by
about 25%.
[Amdt. 107-33, 60 FR 12141, Mar. 6, 1995, as amended by Amdt. 107-40, 62
FR 2972, 2977, Jan. 21, 1997; 62 FR 51556, Oct. 1, 1997]
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