DOT Publishes Civil Penalty Increase Rule – 2024

Today, the Department of Transportation published a direct final rule in the Federal Register (88 FR 89551-89568) on “Revisions to Civil Penalty Amounts, 2024”. This rule makes adjustments to the civil penalties that DOT and its modal agencies may levy for violations of various and sundry transportation regulations. These annual updates are required by the Federal Civil Penalties Inflation Adjustment Act of 1990 (PL 101-41). The adjustments were made using a multiplicative factor of 1.03241.

Agencies of potential interest here include:

Office of the Secretary,

FAA,

NHTSA,

FMCSA,

FRA, and

PHMSA

The effective date of the regulation is December 28^th, 2023. The preamble notes that:

“The Department emphasizes that this rule adjusts penalties prospectively, and therefore the penalty adjustments made by this rule will apply only to violations that take place after this rule becomes effective. This rule also does not change previously assessed or enforced penalties that DOT is actively collecting or has collected.”

HR 3256 Introduced – CFATS Reauthorization - Part I

Earlier this week Rep. Richmond (D,LA) introduced HR 3256, the Protecting and Securing Chemical Facilities from Terrorist Attacks Act of 2019. Normally, I wait for the official print of the bill before I review it, but the House Homeland Security Committee has a committee print available and have scheduled a mark-up hearing of the bill on Wednesday, so I will be reviewing the committee print today.

HR 3256 would reauthorize the Chemical Facility Anti-Terrorism Standards (CFATS) program for an additional five plus years (until May 1^st, 2025; §16). The bill also provide a number of amendments to the current authorization language (6 USC Subchapter XVI).

Major Additions

The following sections of the bill show the areas where significant changes would be made to the existing program:

§4. Protection and sharing of information.

§5. Civil enforcement.

§6. Whistleblower protection.

§7. Chemical Security Advisory Committee.

§12. Voluntary mechanism for reporting drones and other emerging threats.

§13. Regulations regarding specific products and mixtures containing chemicals of interest.

The following sections provide information on the studies and reports required by the bill:

§8. Implementation plan and report to Congress.

§9. Study on risks posed by excluded facilities.

§10. Study on feasibility of waiver program.

§11. Comptroller General reports.

Information Protection and Sharing

Section 4 of the bill would make a number of changes to 6 USC 623, Protection and Sharing of Information. The first change would be to rewrite paragraph (a) to read:

(a) In general - Notwithstanding any other provision of law, with respect to information in the possession of the Department, the Secretary shall protect information developed under this subchapter, including vulnerability assessments, site security plans, and other security related information, records, and documents shall be given protections from public disclosure consistent with the protection of similar information under section 70103(d) of title 46 [link added].

Additionally, a complete rewrite of paragraph (b) includes:

(2) NONDEPARTMENTAL INFORMATION. — Information is not protected pursuant to subsection (a) if it is—

(A) not in the possession of the Department;

(B) developed under this title but has been previously produced or developed for other purposes; and

(C) is already publicly available, readily discoverable, or otherwise lawfully disclosed.

Comment: It looks like this is intended to change the Chemical-Terrorism Vulnerability Information (CVI) program to make it more like other sensitive but unclassified (SBU) information protection programs. Currently the CVI program has strict information protection rules for information held at each covered facility. Other SBU only protect information in the hands of the Federal government, its contractors, and such information shared with State, Tribal, and local governments. If that was the intent, it looks to me like the terminal ‘and’ in (2)(B) nullifies that attempt as it does not remove protections already provided in the program. DHS would not be required to change the CVI rules under these changes. If the terminal ‘and’ were changed to ‘or’ then (2)(A) would be the controlling factor for removing CVI protections for information held at facilities.

As noted above §4 also rewrites (b), changing the information sharing requirements of §623(b) to require DHS to provide information (upon request) to {new §623(b)(1)}:

State, local, and regional fusion centers (as that term is defined in section 210A(j)(i) of this Act) and State and local government officials, including law enforcement and emergency response providers;

Members of Congress;

Members of the Chemical Security Advisory Committee under [new] section 2010 of this Act; and

The Comptroller General of the United States.

The addition of fusion centers and members of Congress in this paragraph allows the bill to delete the current paragraphs (c) and (f) from §623.

Comment: This is a proforma change to appease supporters who want ‘better’ information sharing about the hazards associated with covered facilities. This really provides no new requirements for the CFATS program beyond the addition of the new Advisory Committee which will be covered in more detail later in the bill.

Civil Enforcement

Section 5 of the bill would amend §624, Civil Enforcement. The first set of amendments deals with changes to paragraph (a), Notice of noncompliance. The first change the time limits for DHS to provide a written notice of non-compliance from 14-days to 3-days. And the second changes the time limit a facility would have to comply with a DHS order to comply, from 180 days to 30 days.

The next set of changes address paragraph (b)(2) civil penalties for non-reporting chemical facilities of interest. The change clarifies that the subparagraph applies to Top Screen submission requirements or supplemental information thereto.

The third set of changes paragraph (c)(1), expanding the DHS authority for issuing emergency orders due to violations of CFATS program requirements or the risk of terrorist incidents. It now adds a vague “or other malicious act” that may affect a chemical facility of interest to the list of potential causes of “an imminent threat of death, serious illness or severe personal injury that the Secretary could attempt to prevent by requiring facility action.

Comment: This is ‘other malicious act’ is vague enough to provide authority to order cybersecurity measures or even the development of active shooter programs. The current management would be unlikely to use this authority; their emphasis is on cooperative enforcement. Who knows what could happen in the future?

Whistleblower Protections

Section 6 of the bill modifies the existing whistleblower protections found in §625. The bill expands on the existing requirements for:

• Confidentiality;

• Response to reports; and

• Opportunity for review

The bill also adds a new paragraph (c) to the section; Procedure and Remedy. It provides requirements for DHS to “establish a procedure for the review and investigation of complaints of reprisals” {new §625(c)(i)} as well as establishing remedies for violations of the same.

NOTE: I am about half-way through the major CFATS changes proposed by this new bill and we are already at about 1000 words. It is getting a bit long for a blog post; even by me. I will try to finish up by tomorrow.

DHS Publishes 2018 Penalty Adjustment Final Rule

Yesterday the Department of Homeland Security published a final rule in the Federal Register (83 FR 13826-13839) making the annual inflation adjustments to the statutory maxim penalty amounts for a large number of programs under its supervision. This was a direct final rule with an effective date of April 2^nd, 2018.

For readers of this blog, four of the changes may be of specific interest. They are shown in the table below. The link in the program column is to the paragraph describing the program changes in the rulemaking. The TSA penalties apply to all surface transportation regulations.

Program	Reg Reference	Current	New
CFATS	6 CFR 27.300(b)(3)	$33,333	$34,013
CG, MTSA	46 U.S.C. 70119(a)	$33,333	$34,013
CG, MTSA	46 U.S.C. 70119(b)	$59,893	$61,115
TSA	CFR 1503.401(b)	$11,182	$11,410

This annual direct rulemaking is required by §701 of the Bipartisan Budget Act of 2015 (PL 114-74). This year the final rule is a tad bit late, since it was supposed to be published by January 15^th.

Interestingly, these new penalties can be assessed for any violations (not previously adjudicated, of course) that occurred since November 2^nd, 2015 when the Bipartisan Budget Act was signed.

CFATS Civil Penalties

Yesterday DHS published a new web page outlining the policy and processes for assessing civil penalties and cease operations orders for the Chemical Facility Anti-Terrorism Standards (CFATS) program. The short web page provides links to two documents; the policy document and a fact sheet. The Infrastructure Security Compliance Division (ISCD) has had (and periodically has used) the authority to issue administrative orders and assess civil penalties. This is the first time that a policy document has been provided outlining the process to be used.

The ten-page policy document should be read carefully by all CFATS covered (and potentially covered) facilities. It outlines the shortcomings that can draw an administrative order, civil penalty assessement, and/or cease and desist order (in accordance with 6 CFR 27.300), the method by which ISCD assesses the amount of the penalty and subsequent negotiations to reduce assessed penalties.

The policy addresses three separate types of situations where the policy may apply:

• Failure to file violations (Top Screen and SVA/SSP);

• SSP/ASP deficiencies and infractions;

• Chemical-Terrorism Vulnerability (CVI) infractions.

Unlike other some regulatory agencies of the Federal government (ie: EPA and OSHA) ISCD has not, does not, and apparently does not plan to publish individual notices of penalty assessments and/or orders issued. This is understandable as it would provide public notice of individual high-risk chemical facilities with less than adequate security measures; surely that would be any serious terrorists top wish list.

BTW: There is not currently any mention of this new web site on the CFATS landing page. I expect that we will see that in the next couple of days.

PHMSA Publishes Civil Penalties Final Rule

Today DOT’s Pipeline and Hazardous Material Safety Administration published a final rule in the Federal Register (79 FR 46194-46200). The rule will would prohibits a person who fails to pay a civil penalty as ordered, or fails to abide by a payment agreement, from performing activities regulated by the Hazardous Materials Regulations until payment is made. As was the case with the NPRM for this rulemaking, this final rule was not reviewed by OMB’s Office of Information and Regulatory Affairs prior to publication.

As I noted in the NPRM blog post this bill implements a congressional mandate set forth in §33010 of the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Pub. L. 112-141, page 126 STAT 838) that added paragraph (i)(1) to 49 USC 5123:

“Except as provided under paragraph (2) [Chapter 11 bankruptcy exemption], a person subject to the jurisdiction of the Secretary under this chapter who fails to pay a civil penalty assessed under this chapter, or fails to arrange and abide by an acceptable payment plan for such civil penalty, may not conduct any activity regulated under this chapter beginning on the 91st day after the date specified by order of the Secretary for payment of such penalty unless the person has filed a formal administrative or judicial appeal of the penalty.”

There were three public comments posted to the docket for the NPRM for this rulemaking; one supportive and two adversarial comments (here and here; both .PDF download links). In the preamble to this rule PHMSA explains why they rejected the suggested changes to the rule made by the packaging organization and by the railroads. In both cases the final PHMSA argument was that this rulemaking was specifically mandated by Congress.

Today’s notice summarizes the new rule this way:

“Under the provisions of this final rule, the agency [PHMSA, FAA, FMCSA, or FRA] that issued the final order outlining the terms and outcome of an enforcement action will send the respondent a COO [Cease Operations Order] if payment has not been received within 45 calendar days after the payment due date or a payment plan installment date as specified in the final order. The COO would notify the respondent that it must cease hazardous materials operations on the 91st calendar day after failing to make payment in accordance with the agency's final order or payment plan arrangement, unless payment is made. A respondent will be allowed to appeal the COO within 20 days of receipt of the order according to the procedures set forth by the agency issuing the COO.”

The effective date for this rule is September 8^th, 2014.

PHMSA Publishes Penalty Scofflaw NPRM

Today the Pipeline and Hazardous Material Safety Administration (PHMSA) published a notice of proposed rulemaking in the Federal Register (78 FR 58501-58507) to establish operational sanctions on persons who fail to pay a civil penalty or abide by a civil penalty agreement for violations under the hazardous material regulations (HMR). It would prohibit such persons from performing activities regulated by the Hazardous Materials Regulations until payment is made.

While this rule is being issued by PHMSA it could be applied to failure to pay situations for HMR violations under the following additional agency rules:

• Federal Aviation Administration under 14 CFR § 13.16(c);

• Federal Motor Carrier Administration under 49 CFR Part 386; and

• Federal Railroad Administration under 49 CFR Part 209, Subpart B

This rule would enforce congressional requirements under §33010 of the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Pub. L. 112-141, page 126 STAT 838) that added paragraph (i)(1) to 49 USC 5123:

“Except as provided under paragraph (2) [Chapter 11 bankruptcy exemption], a person subject to the jurisdiction of the Secretary under this chapter who fails to pay a civil penalty assessed under this chapter, or fails to arrange and abide by an acceptable payment plan for such civil penalty, may not conduct any activity regulated under this chapter beginning on the 91st day after the date specified by order of the Secretary for payment of such penalty unless the person has filed a formal administrative or judicial appeal of the penalty.”.

The proposed rule would add a new subpart E to 49 CFR 109 [which should probably have required a change in the title for that section] that would include two new sections:

§109.101 Prohibition of Hazardous Materials Operations.

§109.103 Notice of Nonpayment of Penalties.

PHMSA is soliciting public comments on this proposed rulemaking. Comments may be submitted via the Federal eRulemaking Portal (www.Regulations.gov; Docket # PHMSA-2012-0258). Comments need to be submitted by November 25^th, 2013.

BTW: This NPRM was not listed in the DOT Unified Agenda nor was it apparently processed through the Office of Information and Regulatory Affairs review process at the OMB.

Bills Introduced – 4-25-13

Yesterday saw the introduction of just one bill in the Senate that might be expected to be of specific interest to the chemical security community. That bill was:

S 814 Latest Title: A bill to provide stronger penalties for violations of the Chemical Facility Anti-Terrorism Standards. Sponsor: Sen Lautenberg, Frank R. (D,NJ) 

While a copy of the bill is not yet available a press release by Lautenberg’s office notes that the bill would establish additional civil penalties and add criminal penalties for facilities and their officers that fail to file a Top Screen report when they have inventories of DHS chemicals of interest (COI) at or above the screening threshold quantities (STQ) established in the CFATS regulations.

The press release makes it clear that this bill was introduced in response to the news that the West Fertilizer facility that exploded last week had not filed a Top Screen for either the anhydrous ammonia or ammonium nitrate stored at the facility.

PHMSA Increases Maximum Civil Penalties for HMR Violations

The Pipeline and Hazardous Material Safety Administration published a direct final rule in today’s Federal Register (78 FR 22798-22800) raising the maximum civil penalties “for a knowing violation of the Federal hazardous material transportation law or a regulation, order, special permit, or approval issued under that law”. Since PHMSA is simply incorporating Congressional requirements (from §33010 of of MAP-21 (Pub. L. 112-141) it has bypassed the normal publish-comment-and-review regulatory process.

Today’s rule will change 49 CFR §107.329 and §171.1 to:

• Revise the maximum civil penalty from $55,000 to $75,000 for a person who knowingly violates the Federal hazardous material transportation law or a regulation, order, special permit, or approval issued under that law;

• Revise the maximum civil penalty from $110,000 to $175,000 for a person who knowingly violates the Federal hazardous material transportation law or a regulation, order, special permit, or approval issued under that law that results in death, serious illness, or severe injury to any person or substantial destruction of the property;

• Remove the current $250 minimum civil penalty; and

• Revise the minimum penalty amount to $450 for a violation related to training.

The effective date for the rule is today and it will “apply to violations occurring on or after October 1, 2012”. 

FRA Direct Final Rule Increases Fines

Today the Federal Railroad Administration (FRA) published a final rule in the Federal Register (78 FR 9845-9848) that is “adjusting both the ordinary maximum penalty and the aggravated maximum penalty that applies when assessing a civil monetary penalty for a violation of the Federal hazardous materials transportation laws or a regulation,  special permit, or approval issued under those laws” (78 FR 9845). This is being done in accordance with the provisions of Title III of Division C of MAP-21 (Pub. L. 112-141)—the Hazardous Materials Transportation Safety Improvement Act of 2012.

The following changes are being made:

• The maximum civil penalty was increased from $50,000 to $75,000 for a knowing violation;

• The maximum civil penalty was increased from $100,000 to $175,000 if the violation results in death, serious illness or severe injury to any person, or substantial destruction of property; and

• The minimum civil penalty of $250 was eliminated, except that a minimum civil penalty of $450 still applies to a violation related to training.

Since the law changing these amounts became effective on October 12, 2012 these changes in fines are effective for all offenses that occur on or after that date. The effective date of this rule is today.

The FRA is proceeding direct to a final rule since they have no latitude in making these changes. This means that a public comment and reply process would have no possible effect on changing the rule. Only Congress can modify this requirement.