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U.S. to Shutter Hazmat Deadbeats

Tuesday, August 19, 2014

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Federal officials have a message for hazmat penalty dodgers: Pay up or shut down.

That's the gist of the Pipeline and Hazardous Materials Safety Administration's recently announced final rule, "Hazardous Materials: Failure to Pay Civil Penalties."

The rule will prohibit a company that fails to pay a civil penalty or to abide by a payment agreement from performing activities regulated by Hazardous Materials Regulations (49 CFR 171-180) until the payment is made.

The rule takes effect Sept. 8, 2014.

Ceasing Operations

The rule applies to penalties assessed by any of the Department of Transportation's operating administrations: PHMSA, Federal Aviation Administration, Federal Motor Carrier Safety Administration, and Federal Railroad Administration.

PHMSA Final Rule
Images: PHMSA

PHMSA's new final rule requires the payment of a civil penalty by prohibiting performing activities regulated by Hazardous Materials Regulations once the payment is 45 days past due.

If a payment has not been received within 45 days after its due date, the agency that issued the enforcement action will send a Cessation of Operations Order (COO). The COO notifies the respondent that it must stop hazardous-materials operations within 91 days of failure to make the payment.

Appeal Provision

The respondent will have 20 days to appeal the order. But those appeals will be limited strictly to whether the fine has been paid, officials warn.

The four agencies "caution regulated entities not to construe the right to appeal a COO as an opportunity to re-argue the merits of the penalty assessment."

The only information that would prevent stopping operations would be proof of payment, proof of bankruptcy debtor status, and an inability to pay or Emergency Stay issued by a Federal District Court.

"Although the impact of this type of stepped-up enforcement activity remains to be seen, this rule is still another reason for companies to take seriously civil penalties imposed by federal agencies." said E. Colette Nelson, Chief Advocacy Officer of the American Subcontractor's Association.

Violators 'Not Fit' for Hazmat

The rule was made in accordance with the Moving Ahead for Progress in the 21st Century Act (MAP-21). That measure amended the Federal Hazardous Material Transportation Law to prohibit violators that have failed to pay a civil penalty from engaging in hazardous-aterials operations.

Hazardous Materials Regulations

Federal agencies warn not to appeal a Cessation of Operations Order just to re-argue the merits of the penalty assessment.

"PHMSA believes that persons who fail to comply with the Hazmat Law and fail to pay civil penalties are not fit to transport hazardous materials, as they are more likely to jeopardize public safety and/or the environment," the rule says.

"This final rule and underlying legislation may encourage companies that disregard the HMR to exit the hazardous-materials arena because continuing hazardous-materials transportation after a COO is punishable by additional penalties and criminal prosecution."

$20M for Safety

In addition to the new rule, Transportation Secretary Anthony Foxx has announced $20.2 million in grants for planning and training to improve the nation's response to transportation incidents involving hazardous materials, such as crude oil rail spills.

PHMSA's Hazardous Materials Emergency Preparedness grants program allows grantees to implement planning and training programs based on each community's unique needs.

"Safety is our highest priority, and these grants will help first responders across the country get the training they need to stay safe and protect other people," said Foxx.

"These grants are another tool in the Department's comprehensive approach to improving the transportation of crude oil and other hazardous material across the country."

All 50 states, five U.S. territories, and seven Native American Indian tribes received HMEP grant funding this year. Washington, D.C., did not apply for funding, the DOT said.


Tagged categories: Department of Transportation (DOT); Enforcement; hazardous materials; PHMSA; Regulations

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