Civil Penalties

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

49 CFR Part 386

RIN 2105-AC63

Civil Penalties

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Final rule.

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SUMMARY: This document specifies the civil penalties for violating the

FHWA regulations, as adjusted for inflation in accordance with the

Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by

the Debt Collection Improvement Act of 1996. The inflation adjustments

are reflected in this rulemaking. Technical amendments to the

regulation are required by the statute which mandates that all civil

penalties within the jurisdiction of a Federal agency be adjusted for

inflation by regulation.

DATES: The effective date is March 13, 1998.

FOR FURTHER INFORMATION CONTACT: Charles E. Medalen, Office of the

Chief Counsel, FHWA, telephone (202) 366-1354; or David M. Lehrman,

Office of Motor Carrier Research and Standards, Federal Highway

Administration, 400 Seventh Street SW., Washington, DC 20590; (202)

366-0994, Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday

through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

An electronic copy of this document may be downloaded using a modem

and suitable communications software from the Federal Register

Electronic Bulletin Board Service at (202) 512-1661. Internet users may

reach the Federal Register's home page at: http://www.nara.gov/nara/

fedreg and the Government Printing Office's database at: http://

www.access.gpo.gov/su__docs.

The Debt Collection Improvement Act of 1996

In order to preserve the remedial impact of civil penalties and

foster compliance with the law, the Federal Civil Penalties Inflation

Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890), as amended by

the Debt Collection Improvement Act of 1996 (the Act) (Pub. L.104-134,

110 Stat. 1321-358, -373), requires Federal agencies to regularly

adjust certain civil penalties for inflation. As amended, the law

requires each agency to make an initial inflationary adjustment for all

applicable civil penalties, and to make further adjustments at least

once every four years of these penalty amounts.

The Debt Collection Improvement Act of 1996 further stipulates that

any resulting increases in a civil penalty due to the calculated

inflation adjustments: (i) Should apply only to violations that occur

after October 23, 1996, the Act's effective date; and (ii) should not

exceed 10 percent of the penalty indicated in authorizing legislation.

Method of Calculation

Under the Federal Civil Penalties Inflation Adjustment Act of 1990,

as amended, the inflation adjustment for each applicable civil penalty

is determined by increasing the maximum civil penalty amount per

violation by the cost-of-living-adjustment. The ``cost-of-living''

adjustment is defined as the amount by which the Consumer Price Index

(CPI) for the month of June of the calendar year preceding the

adjustment exceeds the CPI for the month of June of the year in which

the amount of such civil penalty was last set or adjusted pursuant to

law. Any calculated increase under this adjustment is subject to a

specific rounding formula set forth in the Debt Collection Improvement

Act of 1996.

For example, pursuant to 49 U.S.C. 5123, the FHWA may assess a fine

for violation of the Federal Hazardous Materials Regulations (HMR)(49

CFR 171-180). The driver, motor carrier, or shipper who violates the

HMR is subject to a civil penalty of not less than $250 and not more

than $25,000 for each violation.

[[Page 12414]]

This penalty was last set in 1990. The Consumer Price Index was

156.7 in June 1996, and was approximately 130 in June of 1990. Thus the

inflation factor is 156.7/130 or 1.21. The maximum penalty amount after

the increase and statutory rounding would thus be the result of

multiplying $25,000 x 1.21 = $30,250. However, after applying the 10

percent limit on an initial increase, the new maximum penalty amount

per violation is $25,000 plus $2,500 (i.e., 10 percent of the previous

fine), or $27,500. Therefore, increasing penalty provisions will be

limited to 10 percent.

This final rule will be the first publication by regulation of the

new penalty structure adjusted for inflation. In the past, Appendix A

to part 386 was the sole regulatory source for a penalty schedule.

Appendix A is now adjusted for inflation. A new Appendix B, which

addresses violations not included in Appendix A, is added with

violations and maximum monetary penalties adjusted for inflation.

Rulemaking Analyses and Notices

Because these inflation adjustments are statutorily mandated, the

FHWA finds that prior notice and opportunity for comment are

unnecessary under 5 U.S.C. 553(b)). The law requires that Federal

agencies adjust certain civil penalties for inflation and make further

adjustments at least once every four years. We consider these

adjustments to be ministerial acts in compliance with the statute over

which agencies have no discretion.

For these reasons, the FHWA has also determined that prior notice

and opportunity for comment are not required under the Department of

Transportation's regulatory policies and procedures, as we anticipate

that such action would not result in the receipt of useful information.

Thus, the FHWA is proceeding directly to a final rule and waives the

30-day delay effective date because this action does not require

carriers to take any action. This rule merely provides notice required

by law of an inflation adjustment to maximum penalties.

Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

The FHWA has determined that this action is not a significant

regulatory action within the meaning of Executive Order 12866 or

significant within the meaning of the Department of Transportation's

regulatory policies and procedures. This final rule sets forth

inflationary adjustments that are ministerial acts in compliance with

the statute over which agencies have no discretion. We believe that

this rule will not result in a major increase in costs or prices for

State or local governments. The law is simply designed to preserve the

remedial impact of civil penalties. Consequently, it is anticipated

that the economic impact of this final rule will be minimal because it

will not substantially change the applicable civil penalty amount. This

regulatory action will merely make inflation adjustments for all

applicable civil penalties as required by law.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-

612), the FHWA has evaluated the effects of this rule on small

entities. The ministerial adjustments for inflation published in this

rule do not interfere with implementation of the Small Business

Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121,

Title II, 110 Stat. 857) which requires penalties for small businesses

to be reviewed in a manner designed to provide for waiver and/or

reduction of civil penalties under appropriate circumstances. The FHWA

certifies that this action will not have a significant economic impact

on a substantial number of small entities.

Executive Order 12612 (Federalism Assessment)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612 and it has been determined

this action does not have sufficient federalism implications to warrant

the preparation of a federalism assessment.

Executive Order 12372 (Intergovernmental Review)

Catalog of Federal Domestic Assistance Program Number 20.217, Motor

Carrier Safety. The regulations implementing Executive Order 12372

regarding intergovernmental consultation on Federal programs and

activities do not apply to this program.

Paperwork Reduction Act

This action does not contain information collection requirements

for purposes of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-

3520.

National Environmental Policy Act

The agency has analyzed this action for the purposes of the

National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321

et seq.) and has determined that this action will not have any effect

on the quality of the environment.

Unfunded Mandates Reform Act

This rule does not impose unfunded mandates as defined by the

Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

Regulation Identification Number

A regulation identification 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 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 386

Administrative practice and procedure, Highway safety, Motor

carriers, Motor vehicle safety, Penalties.

Issued on: March 5, 1998.

Kenneth R. Wykle,

Administrator, Federal Highway Administration.

In consideration of the foregoing, the FHWA amends title 49, Code

of Federal Regulations, Chapter III, part 386 as set forth below:

PART 386--RULES OF PRACTICE FOR MOTOR CARRIER SAFETY AND HAZARDOUS

MATERIALS PROCEEDINGS

1. The authority citation is revised to read as follows:

Authority: 49 U.S.C. 104(c)(2), 501 et seq., Chapter 51, 31131-

31133, 31135-31139, 31142-31147, Chapter 313, 31501 et seq., Pub. L.

104-34, title III, chapter 10, Sec. 31001, par. (s), 110 Stat. 1321-

373, and 49 CFR 1.45 and 1.48.

Appendix A to Part 386--[Amended]

2. Appendix A to part 386 is amended by revising the figure

``$500'' to read as ``$550'', the figure ``$1,000'' to read as

``$1,100'', and the figure ``$10,000'' to read as ``$11,000'' whenever

they appear throughout the appendix.

Appendix B to Part 386--[Added]

3. Part 386 is amended by adding appendix B to read as follows:

Appendix B to Part 386--Penalty Schedule; Violations and Maximum

Monetary Penalties

The Debt Collection Improvement Act of 1996 [Public Law 104-134,

title III, chapter 10, Sec. 31001, par. (s), 110 Stat. 1321-373]

amended the Federal Civil Penalties Inflation Adjustment Act of 1990

to require agencies to adjust for inflation ``each civil monetary

penalty provided by law within the jurisdiction of the Federal

agency * * *'' and to publish that regulation in the Federal

Register. Pursuant to that authority, the inflation-adjusted civil

penalties listed below

[[Page 12415]]

supersede the corresponding civil penalty amounts listed in title

49, United States Code.

What are the types of violations and maximum monetary penalties?

(a) Violations of the Federal Motor Carrier Safety Regulations

(FMCSRs).

(1) Recordkeeping. A person or entity that fails to prepare or

maintain a record required by Parts 385 and 390-399 of this

subchapter, or prepares or maintains a required record that is

incomplete, inaccurate, or false, is subject to a maximum civil

penalty of $550 for each day the violation continues, up to $2,750.

(2) Serious Pattern of safety violations. These violations of

Parts 385 and 390-399 of this subchapter constitute a middle range

of violations. They do not include noncompliance with recordkeeping

requirements, while substantial health or safety violations are

subject to heavier civil penalties. Serious patterns of safety

violations are subject to a maximum civil penalty of $1,100 for each

violation in a pattern, up to a maximum of $11,000 for each pattern.

(3) Substantial Health or Safety Violations. These are

violations of Parts 385 and 390-399 of this subchapter which could

reasonably lead to, or have resulted in, serious personal injury or

death. Substantial health or safety violations are subject to a

maximum civil penalty of $11,000, provided the driver's actions

constituted gross negligence or reckless disregard for safety.

(4) Non-recordkeeping violations by drivers. A driver who

violates Parts 385 or 390-399 of this subchapter, except a

recordkeeping requirement, is subject to a civil penalty not to

exceed $1,100, provided the driver's actions constituted gross

negligence or reckless disregard for safety.

(5) Violation of 49 CFR 392.5. A driver placed out of service

for 24 hours for violating the alcohol prohibitions of 49 CFR

392.5(a) or (b) who drives during that period is subject to a civil

penalty not to exceed $2,750 for each violation.

(b) Commercial driver's license (CDL) violations. Any person who

violates 49 CFR Subparts B, C, E, F, G, or H is subject to a civil

penalty of $2,750.

(c) Special penalties pertaining to violations of out-of-service

orders by CDL-holders. A CDL-holder who is convicted of violating an

out-of-service order shall be subject to a civil penalty of not less

than $1,100 nor more than $2,750. An employer of a CDL-holder who

knowingly allows, requires, permits, or authorizes that employee to

operate a CMV during any period in which the CDL-holder is subject

to an out-of-service order, is subject to a civil penalty of not

less than $2,750 or more than $11,000.

(d) Financial responsibility violations. A motor carrier that

fails to maintain the levels of financial responsibility prescribed

by Part 387 of this subchapter is subject to a maximum penalty of

$11,000 for each violation. Each day of a continuing violation

constitutes a separate offense.

(e) Violations of the Hazardous Materials Regulations (HMRs).

This paragraph applies to violations by motor carriers, drivers,

shippers and other persons who transport hazardous materials on the

highway in commercial motor vehicles or cause hazardous materials to

be so transported.

(1) All knowing violations of 49 U.S.C. chapter 51 or orders or

regulations issued under the authority of that chapter applicable to

the transportation or shipment of hazardous materials by commercial

motor vehicle on highways are subject to a civil penalty of not less

than $250 and not more than $27,500 for each violation. Each day of

a continuing violation constitutes a separate offense.

(2) All knowing violations of 49 U.S.C. chapter 51 or orders,

regulations, or exemptions issued under the authority of that

chapter applicable to the manufacture, fabrication, marking,

maintenance, reconditioning, repair or testing of a packaging or

container which is represented, marked, certified or sold as being

qualified for use in the transportation or shipment of hazardous

materials by commercial motor vehicle on highways, are subject to a

civil penalty of not less than $250 and not more than $27,500 for

each violation.

(3) Whenever regulations issued under the authority of 49 U.S.C.

chapter 51 require compliance with the FMCSRs while transporting

hazardous materials, any violations of the FMCSRs will be considered

a violation of the HMRs and subject to a civil penalty of not less

than $250 and not more than $27,500.

(f) Operating with an unsatisfactory safety rating. A motor

carrier knowingly transporting hazardous materials in quantities

requiring placarding, or passengers in a vehicle designed or used to

transport more than 15 passengers, on the 46th or any subsequent day

after receiving an unsatisfactory safety rating, is subject to a

civil penalty of not less than $250 and not more than $27,500. Each

day the transportation of hazardous materials continues constitutes

a separate violation.

[FR Doc. 98-6523 Filed 3-12-98; 8:45 am]

BILLING CODE 4910-22-P