Hazardous Materials Pilot Ticketing Program

SUMMARY: To streamline administrative procedures, cut costs, and reduce

regulatory burdens on persons subject to Federal hazardous materials

transportation law, RSPA is implementing a pilot program for ticketing

of certain hazardous materials transportation violations. RSPA will

issue tickets for violations that have little or no direct impacts on

safety. Persons receiving a ticket may pay the ticket, respond

informally to RSPA or request a formal hearing before a Department of

Transportation Administrative Law Judge (ALJ). Penalties will be

substantially reduced for persons who elect to pay the amounts assessed

in the tickets.

This final rule is consistent with the recommendation in the

National Performance Review (DOT02.01) to streamline the enforcement

process by implementing pilot programs to offer greater flexibility in

enforcement methods. RSPA's pilot ticketing program will cut costs,

simplify the processing of certain Hazardous Materials Regulations

(HMR) violations, and achieve compliance through more efficient and

effective processes. The pilot ticketing program allows recipients to

more easily respond to allegations of HMR violations.

EFFECTIVE DATE: May 15, 1996.

FOR FURTHER INFORMATION CONTACT: John J. O'Connell, Jr., Director,

Office of Hazardous Materials Enforcement, (202) 366-4700; or Nancy E.

Machado, Office of the Chief Counsel, (202) 366-4400, Research and

Special Programs Administration, U.S. Department of Transportation, 400

Seventh Street SW, Washington DC 20590-0001.

SUPPLEMENTARY INFORMATION:

I. Background

The Research and Special Programs Administration (RSPA) is the

administration within the Department of Transportation (DOT) primarily

responsible for implementing the Federal hazardous material

transportation law (Federal hazmat law), 49 U.S.C. 5101-5127. RSPA does

this by issuing and enforcing the Hazardous Materials Regulations

(HMR), 49 CFR Parts 171-180. Under delegations from the Secretary of

Transportation [49 CFR Part 1], the authority for enforcement under

Federal hazardous materials transportation law (Federal hazmat law), 49

U.S.C. 5101-5127, is shared by RSPA and each of the four modal

administrations: the Federal Highway Administration, the Federal

Railroad Administration, the Federal Aviation Administration, and the

United States Coast Guard. RSPA has primary jurisdiction over packaging

manufacturers, reconditioners, and retesters (except with respect to

bulk packagings, which are the responsibility of the applicable modal

administration) and a shared authority over shippers of hazardous

materials. RSPA does not enforce regulations applicable exclusively to

motor carriers, rail carriers, air carriers or vessel carriers.

RSPA's Office of the Chief Counsel (OCC) may initiate

administrative proceedings for violations of the HMR, and these

proceedings may result in a civil penalty, an order directing

compliance actions, or both. 49 CFR 107.307. Administrative proceedings

are initiated by mailing a notice of probable violation (NOPV) to a

person believed to have violated the HMR. 49 CFR 107.311. The notice

specifies the alleged violation(s) of the HMR, states the proposed

penalty, and includes a copy of the inspection/investigation report.

Within 30 days of receiving the notice, the recipient of the notice may

admit the allegations by paying the proposed penalty, make an informal

response, or request a formal hearing. 49 CFR 107.313, 107.315.

The recipient who chooses to respond informally submits a written

response to the OCC to contest the alleged violations or the proposed

penalty. The OCC considers the inspection report, the response, and any

additional evidence obtained to determine whether the recipient

committed the alleged violations and, if so, the appropriate penalty in

accordance with the statutory criteria for penalty determination, 49

U.S.C. 5123(c). See also RSPA's civil penalty guidelines at 60 FR 12139

[March 6, 1995]. If the recipient requests an informal conference, an

opportunity is provided to supplement the written response in person or

by telephone with the OCC attorney and the inspector. Information

obtained by the OCC during the informal conference becomes part of the

case file. The Chief Counsel then issues an order finding a violation

or violations and, for each violation found, assesses a civil penalty.

The order may be appealed to the RSPA Administrator. See generally 49

CFR 107.317, 107.325(b).

Alternatively, the recipient may request a formal administrative

hearing on the record before an ALJ from DOT's Office of Hearings. At

the conclusion of the hearing, the ALJ determines whether the alleged

violations have been committed and, if so, imposes a penalty in

accordance with the statutory assessment criteria. Either party may

appeal a decision of the ALJ to the RSPA Administrator. See generally

49 CFR 107.319, 107.325(a).

At any time during an informal or a formal proceeding, RSPA and the

recipient of the notice may agree upon an appropriate resolution of the

case. 49 CFR 107.327.

II. Proposed Rule

On August 21, 1995, RSPA published a notice of proposed rulemaking

(NPRM) under Docket HM-207E [60 FR 43430] seeking public comment on a

proposal to implement a pilot program for ticketing certain violations

of the HMR. On October 17, 1995, RSPA extended the comment period for

an additional 30 days. See 60 FR 53729.

Under the proposed rule, the Associate Administrator for Hazardous

Materials Safety would be authorized to issue tickets for certain HMR

violations that are currently handled through the civil penalty

process. Violations eligible for inclusion in the pilot ticketing

program would be those that do not have a substantial impact on safety.

Because this program is designed to ease administrative and regulatory

burdens on persons subject to enforcement proceedings under the HMR,

violations currently eligible, under 49 CFR 107.309, for letters of

warning generally would not be included in the pilot ticketing program.

The NPRM contained a proposal for a two-year pilot program. At the

end of two years, RSPA would evaluate the program in terms of cost

savings, time savings, and impact on the effectiveness of its

compliance program. The proposed rule also suggested a number of

violations for inclusion in the pilot ticketing program, including,

among others, operating under an expired exemption, failing to

register, failing to maintain training records, and failing to file

incident reports. RSPA indicated that, based on comments received and

experience gained through administration of the pilot ticketing

program, additional types of violations might be added to the program.

These violations would not be processed under the pilot ticketing

program if

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more serious violations also are alleged. Furthermore, a previous

ticketing violation will be considered a ``prior'' violation in the

event of a future violation of the HMR by the same party.

In the proposed rule, RSPA indicated an expectation that the

Associate Administrator for Hazardous Materials Safety would delegate

ticketing authority to the Director, Office of Hazardous Materials

Enforcement (OHME), who may redelegate that authority. RSPA field

inspectors would conduct inspections as at present. Supervisory

inspectors then would evaluate field inspector reports and issue

tickets to parties when appropriate. Consequently, tickets would not be

issued on the spot by inspectors following an inspection but would be

issued shortly thereafter. The ticketing process would be limited to

those cases involving violations identified as meeting safety risk

criteria for ticketing established by the Associate Administrator.

A ticket would include a statement of the facts supporting the

alleged violation. In addition, the ticket would set forth the maximum

penalty provided by statute, the proposed penalty determined according

to the RSPA civil penalty guidelines, see 60 FR 12139 [March 6, 1995],

and the ticket penalty amount. The ticket would state that the

recipient must pay the penalty or request a hearing within 30 days of

receipt of the ticket.

RSPA proposed that the civil penalty contained in the ticket would

be substantially less than the penalty that would be proposed under

current procedures or that could be imposed by an ALJ at a hearing.

RSPA also stated that if the recipient pays the ticket amount and

states that action to correct the violation has been taken, the matter

would be closed and there would be no further agency action. If the

recipient elects not to pay the ticket and requests a hearing, RSPA

would forward the case file to a Coast Guard Hearing Officer who would

review the case in accordance with Coast Guard procedures set forth at

33 CFR 1.07. The Hearing Officer would not be bound by the reduced

penalty amount in the ticket and could impose a civil penalty as high

as the proposed penalty determined under RSPA's civil penalty

guidelines. The Hearing Officer's factual findings and legal

conclusions in a particular case would apply solely to that case. A

person could appeal the decision of the Hearing Officer to the

Commandant, United States Coast Guard.

RSPA also stated in the proposed rule that a recipient would waive

a right to a hearing by failing to respond to the ticket within 30

days. Moveover, failure to respond would be deemed an admission of the

violation, and the reduced penalty would be owed to RSPA. An unpaid

penalty or a penalty imposed by the Coast Guard Hearing Officer or the

Commandant on appeal would constitute a debt owed to the United States

Government.

III. Discussion of Comments

RSPA received 31 written comments on the NPRM. The comments were

submitted by chemical manufacturing companies, trade associations,

transporters and private individuals. Commenters uniformly supported

RSPA's efforts to streamline administrative procedures, cut costs and

reduce regulatory burdens.

Approximately half of the commenters supported RSPA's proposal but

with various recommended changes. The remainder opposed the proposal,

and some suggested alternative means of improving current enforcement

procedures.

The commenters predominantly addressed the following issues: (1)

Violations under the pilot ticketing program; (2) authority to issue

tickets; (3) the time-frame for issuing a ticket; (4) the time-frame

for responding to a ticket; (5) the option to respond informally; (6)

processing by Coast Guard Hearing Officers; (7) civil penalty amounts;

and (8) reduced cost/burden.

A detailed discussion of the comments, and RSPA's response to them,

is provided in the following summary.

A. Violations Under the Pilot Ticketing Program

1. Impact on Safety

RSPA received numerous comments concerning RSPA's statement in the

NPRM that, under the pilot ticketing program, it would issue tickets

for violations that do not have ``substantial impacts'' on safety. RSPA

stated that these violations might include, among others, operating

under an expired exemption, failing to register, failing to maintain

training records, and failing to file incident reports.

The commenters generally questioned why the agency would expend

limited resources on enforcing regulations that do not have substantial

impacts on safety. Several suggested that the regulations in question

either be eliminated or that enforcement efforts with respect to

violations of those regulations be limited to the issuance of warning

letters.

RSPA disagrees that these regulations should be deleted from the

HMR or that enforcement actions should be limited to warning letters.

The registration, exemption renewal and training record requirements

are mandated by Federal hazmat law, which also mandates that a civil

penalty be imposed for violations of any provisions of that law or the

HMR. In addition, although violations of these regulations, in and of

themselves, may not have a substantial or direct impact on safety,

their enforcement has important, indirect effects on safety.

An exemption is an official authorization to do something, for a

two-year period, that is not authorized under the HMR. 49 U.S.C.

5117(a)(2). See also 49 CFR 107.119(a). Renewal is necessary to keep

the exemption in effect and to allow RSPA to ascertain that practices

authorized under the exemption still provide an equal or greater level

of safety than the HMR. As part of the renewal process, an application

must contain all relevant shipping and accident experience related to

activities under an exemption. 49 U.S.C. 5117(b). See also 49 CFR

107.105(a)(5).

The failure of hazardous materials offerors or transporters to

register with RSPA, when required, affects RSPA's ability to identify

and monitor those who are subject to the registration requirements. It

also affects RSPA's ability to collect fees that are distributed for

public sector planning and training for States, Indian tribes and local

communities, to deal with hazardous materials emergencies, particularly

those involving transportation. See 49 U.S.C. 5108(g); 49 CFR Part 110.

These State and local programs affect safety. Failure to register

directly affects these programs.

Failing to maintain training records, similarly, does not directly

impact safety. Nevertheless, training records are the means of

verifying that hazmat employees have been trained to recognize and

identify hazardous materials, have knowledge of specific requirements

of the HMR applicable to functions they perform, and have knowledge of

emergency response information, self-protection measures and accident

prevention methods and procedures. Federal hazmat law states:

After completing the training, each hazmat employer shall

certify, with documentation the Secretary of Transportation may

require by regulation, that the hazmat employees of the employer

have received training and have been tested on appropriate

transportation areas of responsibility * * *

49 U.S.C. 5107(c). See also 49 CFR 172.704(d). Unquestionably, the

training required under the HMR directly impacts safety, and the

training records

[[Page 7180]]

requirement enables verification that the training is being conducted.

Generally, failing to file incident reports also does not directly

impact safety. Nonetheless, RSPA requires that incident reports be

filed as a means for it to evaluate the effectiveness of its regulatory

program and to determine the need for regulatory changes to address new

or emerging hazardous materials transportation safety problems. The

requirement to file incident reports directly supports RSPA's safety

initiatives and is one of the only means for RSPA to obtain detailed

information concerning hazardous materials incidents.

As supported by the above discussion, RSPA does not agree that

regulations that do not have a direct or substantial impact on safety,

in and of themselves, necessarily should be deleted from the HMR or

enforced only through the issuance of warning letters.

2. Definitive List of Violations Subject to Ticketing

Five commenters asked that RSPA establish a definitive list of

violations subject to the pilot ticketing program. RSPA believes that

there is a legitimate need for flexibility during the initial two years

of this program. Consequently, RSPA will not establish a definitive

list of violations, but will begin the program by addressing the

violations discussed above. Based on experience gained through

administration of the pilot ticketing program, additional types of

violations may be added or certain types of violations deleted from the

program. At the end of the two-year pilot program, RSPA will evaluate

the program in terms of cost savings, time savings, and effectiveness.

Finally, at the request of one commenter, RSPA wishes to clarify

that tickets will not be issued for violations it believes to be

willful.

B. Authority To Issue Tickets

One commenter asked that RSPA clarify who would issue tickets under

the pilot program. Another commenter expressed concern that RSPA might

delegate ticketing authority to ``others,'' including States. The NPRM

indicated that the Associate Administrator for Hazardous Materials

Safety would issue tickets. It is common practice to provide authority

in regulations to the highest level agency official responsible for a

particular program. It is then that official's choice whether to retain

that authority or to delegate it. Presently, it is contemplated that

the Associate Administrator will delegate this authority to the

Director, OHME, who will delegate this authority to OHME supervisory

inspectors. RSPA does not intend to delegate ticket-writing authority

to any entity outside the agency. Although States, local governments

and Indian tribes often incorporate the HMR by reference into their own

regulations, they usually do not incorporate RSPA's procedural

regulations but instead use their own existing procedures for handling

violations of State and local and Indian tribe regulations.

Three commenters also expressed concern that the proposed pilot

ticketing program would lead to a ticket-writing frenzy by RSPA

inspectors, who would find it easy to write tickets in order to provide

a tangible record of the inspectors' enforcement activities. One of the

three commenters stated that the program may encourage inspectors to

focus on ``perceived non-threatening technical violations that have in

the past often been cooperatively and summarily addressed.''

RSPA does not require its inspectors to initiate a certain number

of enforcement actions, and job performance is not measured by the

number of enforcement actions that result from their inspections. Also,

at the inspector level, discovery of ticketing or other types of

violations results in the same amount of work for that inspector.

Consequently, there is no incentive for an inspector to focus on

ticketing violations to the exclusion of other, more serious

violations.

C. Time-Frame for Issuing a Ticket

Several commenters were concerned that the NPRM did not specify a

time-frame within which tickets would be issued after the agency's

discovery of an apparent violation. One commenter suggested that RSPA

issue tickets within 60 days of discovery of an apparent violation.

RSPA agrees that establishing a goal for the timely issuance of tickets

would be useful to both the agency and the regulated community.

Consequently, RSPA will endeavor to issue tickets as expeditiously as

possible, generally within 60 days after an apparent violation has been

discovered.

D. Time-Frame for Responding to a Ticket

In the NPRM, RSPA proposed to require a response to a ticket within

30 days of the date the ticket was received. Several commenters

remarked that the 30-day time period was too short and asked that it be

extended to either 45 or 60 days in order to allow sufficient time for

the ticket recipient to investigate the violations alleged in the

ticket. One commenter remarked that 30 days would not be sufficient

time for a ticket to ``find its way through [an] organization to the

right place to be either appealed or paid.'' Others cited mail delays,

holidays and business travel as reasons why the response time should be

longer than 30 days. RSPA agrees that a 30-day response time may be too

short in some instances and, therefore, agrees that 45 days is a more

suitable time-frame for responding to a ticket.

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

Officers

Numerous commenters objected to the two limited options for

responding to a ticket, as proposed in the NPRM. RSPA proposed to allow

persons to either pay the ticket or to request a hearing before a Coast

Guard Hearing Officer who would review the case in accordance with

Coast Guard procedures. One commenter strongly recommended that DOT

consider an intermediate option for resolving tickets prior to

burdensome, costly, last-resort court proceedings. Another stated that

the two-year pilot program is worthwhile, but that the proposed rule

should be modified to ensure that due process rights are preserved

where there is a reasonable basis to dispute alleged violations. This

commenter asked that RSPA's pilot ticketing program include procedures

for filing an informal response or request for hearing under RSPA's

current informal response and hearing procedures at 49 CFR 107.317 and

49 CFR 107.319, respectively. The commenter added that the informal

response option eliminates the need to engage an attorney and to go

through the costly hearing process.

Many of these same commenters, in addition to others, also objected

to RSPA's proposal to forward cases to Coast Guard Hearing Officers for

processing under Coast Guard procedures where a person elects not to

pay a ticket and requests a hearing. These objections were based on the

fact RSPA's proposal would require the industry to familiarize itself

with a new set of procedures, thereby increasing the regulatory burden

on the industry. Also, many commenters questioned the Coast Guard's

familiarity with the HMR to the extent it applies to transportation

other than by water. One commenter stated that RSPA's proposal should

be modified to include the right to appeal to the RSPA Administrator,

rather than to the Commandant of the Coast Guard, in order to have some

uniformity in penalty amounts for similar violations. Another commenter

stated that the OCC and DOT's ALJs are well qualified to evaluate the

substance of HMR

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violations and to assess appropriate penalty levels and should be

involved in the pilot ticketing program rather than the Coast Guard.

RSPA does not agree with those commenters who question Coast Guard

Hearing Officers' ability to efficiently process RSPA ticketing cases.

The HMR requirements with respect to exemption renewal, registration,

incident reporting and training records apply to, among others,

carriers by vessel. Nevertheless, after reviewing all the comments,

RSPA has decided that it would be more efficient and cost-effective,

and in the interest of the industry and the agency, to keep the pilot

ticketing program within RSPA and to use essentially the same current

procedures outlined above, if a person elects to contest a ticket.

Specifically, if a person elects to contest a ticket, that person may

do so, within 45 days of receiving the ticket, by making an informal

response under 49 CFR 107.317 or requesting a formal hearing under 49

CFR 107.319.

The ticket will be the functional equivalent of an NOPV, and

contested matters will be handled by the OCC as at present. The OCC

will not be bound by the reduced penalty amount shown on the ticket and

could impose a penalty as high as the proposed penalty determined under

RSPA's civil penalty guidelines, which is also shown on the ticket. In

no case will the OCC seek a penalty greater than the highest penalty

amount shown on the ticket.

Anyone choosing to contest a ticket will have the case processed by

the OCC as at present. In this way, RSPA provides a streamlined process

for those who do not wish to contest an alleged violation and leaves

the present system intact for those who wish to contest an alleged

violation and avail themselves of the current, familiar procedures.

F. Civil Penalty Amounts

1. Amount of Penalty Reductions

RSPA stated in the NPRM that penalties under the pilot ticketing

program would be ``substantially less than the penalty that would be

proposed under current procedures or that could be imposed by an ALJ at

a hearing.'' Several commenters noted that RSPA did not quantify the

percentage or dollar amount of the reduced penalties. Two commenters

stated that the key to a successful pilot ticketing program is

substantially reduced penalties that serve as an inducement for

companies to accept civil penalty responsibility in return for

eliminating costs associated with contesting the violation. Commenters

suggested that penalties assessed under the pilot ticketing program be

at least 50 percent less than the penalties that would be assessed

under current procedures.

RSPA agrees that penalties under the pilot ticketing program should

be sufficiently low to provide an incentive to pay. Therefore, RSPA

will continue to calculate a penalty as it does under its current

procedures and guidelines, but it will reduce that penalty by 50

percent where the violation at issue is processed under this program.

Nevertheless, the ticketing program is a pilot program and RSPA later

may decide to reduce ticketing penalties by more or by less than 50

percent of the penalty calculated under current procedures and

guidelines, based on experience with the program. In no case will a

penalty be less than $250.

One commenter suggested that RSPA waive or reduce penalties even

further when ticket recipients demonstrate compliance, within a

specific time period, with the HMR. Federal hazmat law requires that a

penalty be assessed where a violation of the regulations occurs.

Specifically, Section 5123 of Federal hazmat law states:

A person that knowingly violates this chapter or a regulation

prescribed or order issued under this chapter is liable to the

United States Government for a civil penalty of at least $250 but

not more than $25,000 for each violation.

49 U.S.C. 5123.

2. Incentives to Pay or Not Pay Tickets

Several commenters voiced concern regarding RSPA's proposal to

assess penalties under the pilot ticketing program that are

substantially less than the penalties that would be proposed under

current procedures or that could be imposed by an ALJ at a hearing.

They stated that the disparity in civil penalty amounts, plus the

threat of having the penalty increase if a person contests a ticket,

serves to create an economic incentive to simply pay the ticket despite

the violation history that doing so would create. Several other

commenters reached the opposite conclusion and stated that the

disparity would not create an economic incentive to pay the ticket

because paying the penalty would affect one's violation history and

could result in higher penalties for future violations. Instead, these

commenters predicted a rise in the numbers of hearings and suggested

that, to avoid this result, RSPA not count ticketing violations as

prior violations. Some commenters also voiced concern that lower

penalties would provide an economic incentive for companies not to

comply with the HMR; in other words, it would cost less to pay the

penalty than to comply with the HMR.

RSPA does not agree that reduced penalties for ticketing violations

will be an economic incentive to pay tickets at the expense of one's

violation history. The pilot ticketing program, with its reduced

penalties, provides a streamlined procedure for those who might not

dispute that a violation has occurred--for example, failure to register

or to renew an exemption--but who would dispute the proposed penalty,

under current procedures, as too high. Under the pilot ticketing

program, these people have the option of admitting the violation and

paying a substantially lower civil penalty. Because RSPA has decided,

in response to numerous comments, to authorize an informal response and

to leave the pilot ticketing program within RSPA, those who dispute a

ticket can choose to make an informal response or they may request a

formal hearing and the case will be handled under current OCC

procedures. Consequently, lower ticket penalties provide an opportunity

for those who do not contest the violation but who would contest the

amount of the penalty under current procedures to pay lower ticket

penalties and avoid OCC involvement. Nevertheless, any person who

receives a ticket may choose to have the case processed under existing

OCC procedures.

Likewise, RSPA does not agree that counting ticketing violations as

prior violations in future cases will result in an increased number of

requests for formal hearings, or even in an increase in the number of

informal responses. Under current OCC procedures, the violations that

have been identified for processing under the pilot ticketing program

already count as prior violations. Indeed, Federal hazmat law requires

RSPA to consider violation histories when assessing civil penalties. 49

U.S.C. 5123.

In the NPRM, RSPA proposed to continue counting ticketing

violations as prior violations, and RSPA reaffirms that position here.

Nevertheless, RSPA agrees that ticketing violations should be given

less weight, in the event of future violations, than more serious non-

ticketing violations. Therefore, RSPA intends initially to give prior

ticketing violations only one-half the weight of prior non-ticketing

violations. In the future, RSPA may decide to give more or less weight

to ticketing violations as it gains experience with this pilot program.

Finally, RSPA does not agree that lower ticket penalties will

provide an economic incentive for people not to comply with the HMR.

The amount of the penalty, the violation history that will result from

non-compliance, and

[[Page 7182]]

the processing of repeat violations by the OCC should be incentive

enough to comply with the HMR.

3. Penalty Guidelines

Two commenters questioned whether using RSPA's March 6, 1995 civil

penalty guidelines as proposed in the NPRM is contrary to RSPA's own

pronouncements regarding the meaning and use of its guidelines. One

commenter noted that RSPA proposed to have the ticket include ``the

proposed penalty determined according to the RSPA civil penalty

guidelines'' but that RSPA stated in the preamble to the guidelines

that they were ``merely informational, [and] not finally determinative

of any issues or rights, and do not have the force of law.'' 60 FR

12139. The commenter questioned whether utilizing the penalty

guidelines to discourage ticket recipients from contesting alleged

violations converts those guidelines into determinative rules under

United States Telephone Association v. FCC, 28 F.3d 1232 (D.C.Cir.

1994) and Used Equipment Sales, Inc. v. Department of Transportation,

54 F.3d 862 (D.C. Cir 1995).

RSPA did not intend to imply in the NPRM that the penalty

guidelines would be used in any way that differs from current

procedure. As noted in the preamble to the penalty guidelines:

These guidelines are a preliminary assessment tool used by RSPA

personnel, and they create no rights in any party. They contain

baseline amounts or ranges for violations that frequently have been

cited in RSPA hazmat NOPVs. When a violation not described in the

guidelines is encountered, it sometimes is possible to determine a

baseline penalty by analogy to a similar violation in the

guidelines.

Even when the guidelines are applicable to a violation, the use

of the guidelines is only a starting point. They promote consistency

and generally are used to provide some standard for imposing similar

penalties in similar cases. However, no two cases are identical, and

ritualistic use of the guidelines would produce arbitrary results

and, most significantly, would ignore the statutory mandate to

consider several specific assessment criteria. Therefore, regardless

of whether the guidelines are used to determine a baseline amount

for a violation, RSPA enforcement and legal personnel must apply the

statutory assessment criteria to all relevant information in the

record concerning any alleged violation and the apparent violator.

These criteria are in 49 U.S.C. 5123 and 49 CFR 107.331.

* * * the guidelines are not binding on RSPA or Department of

Transportation personnel. Enforcement personnel and staff attorneys

generally use the guidelines as a starting point for penalty

assessment. However, they, the Chief Counsel, administrative law

judges (ALJs) and the RSPA Administrator may deviate from the

guidelines where appropriate, and are legally bound only by the

statutory assessment criteria.

60 FR 12139. At the time the penalty guidelines final rule and the NPRM

in this matter were published, RSPA was aware of the D.C. Circuit Court

opinion in United States Telephone Ass'n v. FCC, cited above. RSPA

reviewed the FCC case and discussed, in the preamble to the penalty

guidelines final rule, why the penalty guidelines are a policy

statement and, therefore, not subject to the notice and comment

requirements of the Administrative Procedure Act, 5 U.S.C. 551 et seq.

See 60 FR 12139.

In fact, RSPA published its guidelines as an informational appendix

to its rules and not as a regulation. Also, RSPA does not use its

guidelines in a rote fashion to automatically determine a proposed

penalty but instead applies the statutory criteria and the guidelines

to all of the particular evidence in each case to arrive at a proposed

penalty. Consequently, use of RSPA's penalty guidelines as a starting

point when assessing civil penalties either under current procedures or

under the pilot ticketing program does not turn the guidelines into

rules that would require notice and comment. RSPA's actions are

consistent with both of the cited cases.

G. Reduced Cost/Burden

A significant number of commenters stated that the pilot ticketing

program, as proposed, would not accomplish RSPA's stated goals of

streamlining administrative procedures, cutting costs and reducing

regulatory burdens on persons subject to the HMR. These commenters said

that the pilot ticketing program, as proposed, could be

counterproductive and would ultimately create another layer of

administrative procedures, add costs and increase regulatory burdens on

the industry. Many commenters thought that the pilot ticketing program,

as proposed, would unnecessarily complicate the enforcement process for

ticketing violations. Many commenters stated that they did not see any

real savings to either the Federal Government or the regulated industry

under the proposal.

As discussed above, RSPA agrees that the pilot ticketing program,

as proposed, would have added another layer of procedures and might not

have resulted in the cost savings RSPA originally anticipated.

Consequently, RSPA has modified the proposal as outlined above, i.e.,

RSPA will keep the pilot ticketing program within the agency and will

continue to have the OCC process contested cases under current

procedures. RSPA believes that this streamlined procedure will result

in the cost savings and reduced regulatory burden that RSPA originally

anticipated when it published its proposal.

Specifically, anyone who opts to pay a ticket will realize

immediate cost savings in that the proposed penalty will be half of

what it would have been under current procedures. Also, the ticket

recipient avoids the need to make a detailed written response to the

agency (other than a statement of corrective action) and avoids the

subsequent written and oral communications that arise during OCC

processing of cases. The formal hearing process is bypassed, and legal

fees are avoided. Furthermore, there is no OCC or post-ticket OHME

involvement in the enforcement action where a ticket recipient opts to

pay a ticket. The OCC avoids having to issue an NOPV, hold an informal

conference, respond to compromise offers, issue an order, participate

in ALJ proceedings, draft a decision on appeal, and issue a close-out

letter. OHME avoids involvement in the informal conference and formal

hearings, and will not have to interact with the OCC on factual and

technical issues.

Where a ticket is contested, current procedures would apply.

Nevertheless, there will be some savings to the OCC who will not be

required to issue an NOPV but can rely on the ticket to have provided

notice of the alleged violations to the ticket recipient. Furthermore,

when the OCC receives a case from OHME, the package will not only

contain the ticket but a response to the ticket which may set forth

corrective action and may contain a compromise offer. This information

will allow the OCC to begin processing the case at a more advanced

stage than otherwise would be the case and will reduce overall

processing time.

H. Miscellaneous

In discussing the pilot ticketing program, one commenter made two

statements that require a response. First, the commenter stated that

the NPRM is silent on the consequences of paying a civil penalty

without ``the requested admission of guilt.'' RSPA does not require an

admission of guilt either under the pilot ticketing program or under

current procedures. In either case, when a person pays a civil penalty,

the case is closed and counts as a prior violation in the event of a

future violation of the HMR. No admission of guilt is required.

The same commenter questioned whether the agency will require

evidence of corrective action under the

[[Page 7183]]

pilot ticketing program. RSPA currently requests and encourages persons

who have violated the HMR to submit evidence of corrective action to

the agency. RSPA will continue this practice under the pilot ticketing

program. The exit briefing form that RSPA inspectors leave with a

person at the end of an inspection contains language encouraging the

submission of documented corrective action to the agency as soon as

possible. The ticket, like an NOPV, will also contain similar language.

In the event that a ticket is paid but no evidence of corrective action

has been submitted, the agency will send a letter to the ticket

recipient again encouraging the submission of documented corrective

action--just as it does in non-ticketing cases where payment is made in

response to an NOPV. Under current procedures, RSPA receives some

documented corrective action in virtually all of its enforcement cases.

Several commenters also questioned the relationship between RSPA's

pilot ticketing program and tickets issued for violations of State and

Federal motor carrier safety regulations. As stated above, the

authority for enforcement under Federal hazmat law, 49 U.S.C. 5101-

5127, is shared by RSPA and each of the four modal administrations.

RSPA has primary jurisdiction over packaging manufacturers,

reconditioners and retesters (except with respect to single-mode bulk

packagings, which are primarily the responsibility of the applicable

modal administration) and a shared authority over shippers of hazardous

materials. RSPA does not enforce Federal or State motor carrier safety

regulations. To the extent that motor carriers are affected by RSPA's

pilot ticketing program, it generally will be because of: (1) Their

shipper activities; (2) their failure to comply with the HMR's carrier

incident reporting requirements; or (3) their failure to comply with

the HMR's registration requirements.

IV. Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

This final rule is not considered a significant regulatory action

under section 3(f) of Executive Order 12866 and therefore is not

subject to review by the Office of Management and Budget. The rule is

not significant according to the Regulatory Policies and Procedures of

the Department of Transportation (44 FR 11034).

The changes adopted in this rule do not result in any additional

costs to persons subject to the HMR, but result in modest cost savings

to a small number of them and to the agency. Because of the minimal

economic impact of this rule, preparation of a regulatory impact

analysis or a regulatory evaluation is not warranted.

Executive Order 12612

This final rule has been analyzed in accordance with the principles

and criteria in Executive Order 12612 (``Federalism'') and does not

have sufficient Federalism impacts to warrant the preparation of a

federalism assessment.

Regulatory Flexibility Act

I certify that this final rule will not have a significant economic

impact on a substantial number of small entities. This rule does not

impose any new requirements on persons subject to the HMR; thus, there

are no direct or indirect adverse economic impacts for small units of

government, businesses or other organizations.

Paperwork Reduction Act

There are no new information collection requirements in this final

rule.

Regulation Identifier Number

A regulation identifier number (RIN) is assigned to each regulatory

action listed in the Unified Agenda of Federal Regulations. The

Regulatory Information Service Center publishes the Unified Agenda in

April and October of each year. The RIN number contained in the heading

of this document can be used to cross-reference this action with the

Unified Agenda.

List of Subjects in 49 CFR Part 107

Administrative practice and procedure, Hazardous materials

transportation, Packaging and containers, Penalties, Reporting and

recordkeeping requirements.

In consideration of the foregoing, 49 CFR Part 107 is amended as

follows:

PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES

1. The authority citation for Part 107 continues to read as

follows:

Authority: 49 U.S.C. 5101-5127, 44701; 49 CFR 1.45, 1.53.

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

Sec. 107.307 General.

(a) When the Associate Administrator for Hazardous Materials Safety

and the Office of the Chief Counsel have reason to believe that a

person is knowingly engaging or has knowingly engaged in conduct which

is a violation of the Federal hazardous material transportation law or

any provision of this subchapter or subchapter C of this chapter, or

any exemption, or order issued thereunder, for which the Associate

Administrator for Hazardous Materials Safety or the Office of the Chief

Counsel exercise enforcement authority, they may--

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

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

either Secs. 107.310 or 107.311;

(3) Issue an order directing compliance, regardless of whether a

warning letter has been issued or a civil penalty assessed; and

(4) Seek any other remedy available under the Federal hazardous

material transportation law.

* * * * *

Sec. 107.307 [Amended]

3. In addition, in Sec. 107.307, in paragraph (b), the wording

``Office of Chief Counsel'' is revised to read ``the Associate

Administrator for Hazardous Materials Safety and the Office of the

Chief Counsel''.

Sec. 107.309 [Amended]

4. In Sec. 107.309, at the beginning of paragraph (a), the wording

``In addition to the initiation of proceedings under Sec. 107.307 for

the imposition of sanctions or other remedies, the'' is revised to read

``The''.

5. Section 107.310 is added to read as follows:

Sec. 107.310 Ticketing.

(a) For an alleged violation that does not have a direct or

substantial impact on safety, the Associate Administrator for Hazardous

Materials Safety may issue a ticket.

(b) The Associate Administrator for Hazardous Materials Safety

issues a ticket by mailing it by certified or registered mail to the

person alleged to have committed the violation. The ticket includes:

(1) A statement of the facts on which the Associate Administrator

bases the conclusion that the person has committed the alleged

violation;

(2) The maximum penalty provided for by statute, the proposed full

penalty determined according to RSPA's civil penalty guidelines and the

statutory criteria for penalty assessment, and the ticket penalty

amount; and

(3) A statement that within 45 days of receipt of the ticket, the

person must pay the penalty in accordance with paragraph (d) of this

section, make an informal response under Sec. 107.317, or

[[Page 7184]]

request a formal administrative hearing under Sec. 107.319.

(c) If the person makes an informal response or requests a formal

administrative hearing, the Associate Administrator for Hazardous

Materials Safety forwards the inspection report, ticket and response to

the Office of the Chief Counsel for processing under Secs. 107.307-

107.339, except that the Office of the Chief Counsel will not issue a

Notice of Probable Violation under Sec. 107.311. The Office of the

Chief Counsel may impose a civil penalty that does not exceed the

proposed full penalty set forth in the ticket.

(d) Payment of the ticket penalty amount must be made in accordance

with the instructions on the ticket.

(e) If within 45 days of receiving the ticket the person does not

pay the ticket amount, make an informal response, or request a formal

administrative hearing, the person has waived the right to make an

informal response or request a hearing, has admitted the violation and

owes the ticket penalty amount to RSPA.

6. In Sec. 107.311, paragraph (a) is revised to read as follows:

Sec. 107.311 Notice of probable violation.

(a) The Office of Chief Counsel may serve a notice of probable

violation on a person alleging the violation of one or more provisions

of the Federal hazardous material transportation law or any provision

of this subchapter or subchapter C of this chapter, or any exemption,

or order issued thereunder.

* * * * *

Issued in Washington, DC on February 12, 1996 under authority

delegated in 49 CFR part 1.

Kelley S. Coyner,

Acting Deputy Administrator, Research and Special Programs

Administration.

[FR Doc. 96-4203 Filed 2-23-96; 8:45 am]

BILLING CODE 4910-60-P