Uniform Fine Assessment Version 4.0 Software; Calculating Amounts of Civil Penalties for Violations of Regulations |
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Anne S. Ferro
Federal Motor Carrier Safety Administration
September 3, 2013
[Federal Register Volume 78, Number 170 (Tuesday, September 3, 2013)]
[Notices]
[Pages 54365-54367]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21278]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
Uniform Fine Assessment Version 4.0 Software; Calculating Amounts
of Civil Penalties for Violations of Regulations
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice.
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SUMMARY: FMCSA announces that the Agency has begun using the Uniform
Fine Assessment (UFA) Version 4.0 software to calculate the amounts of
civil penalties for violations of the Federal Motor Carrier Safety
Regulations (FMCSRs) and Hazardous Materials Regulations (HMRs). FMCSA
is required to consider certain statutory factors when proposing civil
penalties for violations of the FMCSRs and HMRs and since the mid-
1990's FMCSA has used its UFA software to consider those statutory
factors. FMCSA has updated the UFA software to ensure that it
adequately considers the statutory penalty factors for all statutes and
regulations enforced by FMCSA; to implement the Agency's policy for
consideration of the Small Business Regulatory Enforcement Fairness
Act; and, to ensure uniformity in proposed civil penalties. UFA 4.0
software also considers the factors set forth in 49 U.S.C. 521(b)(2)(D)
for violations of regulations where no statutory factors are otherwise
specified by statute. To enhance transparency of the civil penalty
calculation, UFA 4.0 generates a report detailing the calculations used
to propose civil penalties. While UFA 4.0 is used to calculate the
majority of civil penalties proposed by FMCSA, the Agency may propose a
civil penalty outside of UFA 4.0 when the proposed civil penalty
calculated by UFA 4.0 would not promote enhanced commercial motor
vehicle safety or induce prompt and sustained compliance. In such
cases, the Agency will nevertheless consider the applicable statutory
factors to assess a penalty. This Federal Register Notice supersedes
the Federal Register Notice issued by FMCSA entitled, ``Civil Penalty
Calculation Methodology. '' 76 FR 71431, November 17, 2011.
DATES: The UFA 4.0 software will be used to calculate penalties based
on investigations that are initiated on or after August 12, 2013.
FOR FURTHER INFORMATION CONTACT: Peter Hines, Office of Chief Counsel,
Federal Motor Carrier Safety Administration, 4749 Lincoln Mall Drive,
Suite 300, Matteson, IL 60443, by telephone at (708) 283-3568 or via
email at peter.hines@dot.gov. Office hours are from 9 a.m. to 5 p.m.
CT, Monday through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Background
Under 49 U.S.C. 521(b)(2)(D), 5123(c), 14901(c), 31138 and 31139,
FMCSA must consider specific prescribed factors in determining the
amount of civil penalties assessed for violations of the statutes and
regulations for which FMCSA has enforcement authority. The purpose of
the UFA 4.0 software is to assist FMCSA in ensuring uniformity and
fairness in the application of mandatory statutory factors in
calculating proposed civil penalties for violations of the FMCSRs,
HMRs, commercial regulations, rules concerning minimum levels of
financial responsibility, registration regulations, and other statutes
and regulations enforced by FMCSA. The software is designed to ensure
that statutory, regulatory, and administrative policies are considered
in determining each penalty assessment, to promote uniformity in
assessments throughout FMCSA, and to create transparent and easily
understood assessments. UFA 4.0 is not intended to assess the same
civil penalty for the same violations against every motor carrier, but
to assess a penalty that is consistent between carriers of similar
circumstances.
FMCSA has used its UFA software to calculate penalties since the
mid-1990's. Under a long line of administrative decisions, starting
with Alfred Chew & Martha Chew, dba Alfred & Martha Chew Trucking,
FHWA-1996-5323 (Final Order, Feb. 7 1996), FMCSA and its predecessor
agency have held that UFA is presumed to properly consider the
statutory penalty factors under 49 U.S.C. 521(b)(2)(D), 49 U.S.C.
5123(c), and 49 U.S.C. 31138 and 31139.
UFA 4.0 simplifies the algorithm previously used to calculate
proposed penalties. The software also incorporates the increased
penalties mandated by The Moving Ahead for Progress in the 21st Century
Act (MAP-21), Public Law 112-141 (July 6, 2012). UFA 4.0 takes into
account the factors set forth in 49 U.S.C. 521(b)(2)(D) for violations
of the FMCSRs, 49 U.S.C. 5123(c) for violations of the HMRs, 49 U.S.C.
14901(c) for violations concerning transportation of household goods,
and 49 U.S.C. 31138 and 31139 for violations of regulations related to
financial responsibility.
Congress has not delineated statutory penalty factors (other than
minimum and/or maximum penalties) for violations of operating authority
registration requirements, other commercial regulations (49 CFR Parts
360-379) and Commercial Driver's License regulations (Parts 382 and
383). FMCSA has determined that the use of the statutory factors in 49
U.S.C. 521(b) (the factors used to assess penalties for violations of
FMCSRs) are appropriate for these violations as well as for any other
statutory or regulatory violations where Congress has not identified
any specific factors the Agency is required to consider in assessing
civil penalties. Use of the statutory factors promotes uniformity and
consistency in the Agency's determination of the appropriate amount of
civil penalties.
[[Page 54366]]
Statutory, Regulatory and Administrative Requirements of Penalties
FMCSA must consider specific factors before proposing civil
penalties for the majority of regulations it enforces. These factors
are specified by statute.
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Statute setting
forth penalty
Regulations Applicability factors to be
considered
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FMCSRs.......................... 49 CFR 350-399.... 49 U.S.C.
521(b)(2)(D).
HMRs............................ 49 CFR 171-180; 49 49 U.S.C. 5123(c).
CFR Part 385--
Subpart E (HM
Safety Permits),
CDL HM
Endorsement (49
CFR 383.121);
violations of
certain HM
related out-of-
service orders.
Minimum financial responsibly 49 CFR Part 387... 49 U.S.C. 31138
violations (Insurance). and 31139 (same
factors for both
sections).
HHG (household goods) 49 CFR Part 375... 49 U.S.C.
regulations. 14901(c).
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Specific penalties, as well as minimum and maximum penalties, may
be established by statute for violations of the regulations or statutes
enforced by FMCSA. Appendices A and B of 49 CFR Part 386, as amended,
also set forth penalties for violations of the regulations enforced by
FMCSA. To ensure that penalties promote prompt and sustained
compliance, and promote the interests of safety, FMCSA has also
established administrative minimum and maximum penalties by policy
where no specific penalties, and no minimum or maximum penalties, are
provided by statute. The FMCSA Penalty Assessment Table identifies the
minimums and maximums used in the UFA 4.0 calculation. The Penalty
Assessment Table is posted at www.fmcsa.dot.gov/penaltyassessments.
UFA 4.0 software will not propose a penalty below an applicable
minimum statutory penalty or above the applicable maximum statutory
penalty. UFA 4.0 software may, however, generate a proposed penalty
below an administrative minimum or above an administrative maximum. For
example, UFA 4.0 will disregard an administrative maximum for
violations that are charged under Section 222 of the Motor Carrier
Safety Improvement Act of 1999, Public Law 106-159, Title II (Dec. 9,
1999), codified in 49 U.S.C. 521. Section 222 requires FMCSA to assess
maximum statutory penalties if a violator is found to have committed a
pattern of violations of critical or acute regulations, or previously
committed the same or a related violation of critical or acute
regulations. FMCSA previously published notices regarding its policies
on assessing maximum penalties under Section 222. Copies of these
policy notices can also be found at www.fmcsa.dot.gov/penaltyassessments.
Explanation of the Statutory Factors
Many of the statutory penalty factors for the FMCSRs, HMRs, HHG
rules, and minimum financial responsibility are identical. The
explanation of the factors below applies to each type of violation,
except where indicated. Some of the factors are considered for each
violator and others are considered for each violation.
Violation Factors
1. ``Nature'' of violation. UFA 4.0 considers the nature of a
violation by assigning the violation to a category based on the type of
violation and whether the violation is by an individual or entity, and
by establishing a penalty range consistent with the nature of the
violation. Violations of a similar nature are grouped together and have
been assigned a minimum and maximum fine amount. A breakdown of the
different categories will be shown on the Penalty Assessment Table at
www.fmcsa.dot.gov/penaltyassessments.
2. ``Circumstances'' of violation. UFA 4.0 considers the
circumstances by evaluating the conditions, factors, or events
accompanying the violation that, when present, may serve to increase or
decrease a fine determination. These variables are considered
cumulatively. Mitigating factors are any acts by the violator or
situations which are extenuating or explanatory of the violation.
Aggravating factors are any acts by the violator or situations which
exacerbate, frustrate, or worsen the violation. These circumstances
must not have been taken into account in any of the other statutory
penalty factors. UFA 4.0 will use one of the following three choices
for circumstances of the violation to calculate a fine: none,
aggravating, or mitigating. An explanation of the specific point values
and how they are applied to calculate a penalty is included in the
``Explanation of Calculations'' document published at
www.fmcsa.dot.gov/penaltyassessments.
3. For HHG violations, ``harm to shipper or shippers'' (see 49
U.S.C. 14901(c)) means the monetary impact of the violation to the
shipper (owner) of the household goods.
4. For HHG violations, ``whether the shipper has been adequately
compensated before institution of the proceeding'' (see 49 U.S.C.
14901(c)) means compensation to the shipper (owner) of the household
goods before the administrative civil penalty proceedings occurred.
5. ``Extent'' is considered by evaluating the magnitude, scope, and
frequency of the violations found as the result of an investigation. It
measures whether the violation is isolated or widespread. Extent in UFA
4.0 is based on the percentage of violations discovered divided by the
number of records checked. For example, if FMCSA discovers twenty false
records of duty status [a violation of 49 CFR 395.8(e)], after checking
200 records of duty status, the extent of the violation would be 10
percent (20 divided by 200). The resulting percentage is either high
(greater than or equal to 10 percent) or low (less than 10 percent).
UFA 4.0 automatically calculates extent based on the number
discovered versus the number checked and assigns point levels based on
low or high levels of extent. Violations by individuals (usually
drivers) and violations stemming from single incidents are each
considered to have a low extent if there is a 1 of 1 discovered
violation rate. Companies having a 1 of 1 discovered violation rate
during an investigation will be considered to have a high extent (100
percent). Interested parties may review this information at:
www.fmcsa.dot.gov/penaltyassessments.
6. ``Gravity'' is considered by evaluating the seriousness of the
violation. Gravity points are assigned as
[[Page 54367]]
low, medium, high, or contributed to a crash or HM incident. If the
violation caused a crash or an HM incident, the highest points will be
assigned. If the violation caused an HM incident which resulted in a
fatality, serious injury, illness or destruction of property, a maximum
fine of $175,000 may be assessed, overriding all other aspects of the
UFA model. Interested parties may review this information at
www.fmcsa.dot.gov/penaltyassessments.
Violator Factors
1. ``Culpability'' is considered by evaluating the violator's
conduct or actions and knowledge of the violations, conditions, or
practices that led to the discovered violations. It is an assessment of
the violator, not the individual violation, and takes into account the
fault level of the violator. For UFA, it is broken into 3 categories:
a. Should have known of any of the discovered violation(s);
b. Knew of any of the violation(s); and
c. Intentional for any discovered violation(s).
Intentional violations of the regulations are assigned the highest
number or points. Points are automatically assigned by UFA based on the
selection of knowledge level relative to the conduct of the violator.
When available, see www.fmcsa.dot.gov/penaltyassessments.
2. ``History'' is considered by evaluating the violator's
enforcement history with any U.S. Department of Transportation modal
administration. Enforcement history is a major factor since it provides
an indication of both the carrier's or individual's awareness of its
safety obligations and its willingness to comply with the regulations.
The history criteria relates to the violator (not the individual
violation) and is determined by looking at the violator's closed cases
(cases where there has been a finding of liability for the violations
or where the violator has admitted the violations) in the previous six
years and selecting one of the following levels:
a. No enforcement history;
b. Penalized for violation(s) in any other part(s);
c. Penalized for violation(s) in the same part(s); and,
d. Penalized for two or more prior cases or a prior case for
violation of an Order.
In enforcement cases including HHG violations, UFA 4.0 will
consider enforcement history, pursuant to 49 U.S.C. 14901(c), only if
the past violations are similar in nature to the HHG violations in the
current enforcement case. UFA automatically assigns points based on the
history level indicated. See www.fmcsa.dot.gov/penaltyassessments.
3. ``Effect on ability to continue to do business'' and ``ability
to pay'' are considered by capping the proposed penalty at 2 percent of
the violator's gross revenue. UFA refers to this limitation on a total
penalty as the ``Gross Revenue Cap.'' FMCSA has determined that capping
most penalties at 2 percent of the violator's gross revenue will allow
most carriers to remain in business while inducing compliance with the
regulations. Assessments will be lowered by the UFA 4.0 software to an
amount equal to or below the Gross Revenue Cap, if needed. UFA 4.0 will
assess a penalty below an administrative minimum if necessary to keep
the total penalty below the Gross Revenue Cap. In some cases, such as
when a minimum statutory penalty exceeds the Gross Revenue Cap, or
where FMCSA asserts a maximum civil penalty pursuant to Section 222 of
MCSIA, the penalties will not be reduced to an amount equal or below
the Gross Revenue Cap.
4. ``Such other matters,'' as justice, fairness, and public safety
may require, are considered by taking into account those factors that
are not otherwise specified in the statute, but that nevertheless, have
some bearing on the proposal of a civil penalty in the interests of
justice and public safety in order to achieve the purposes of
compliance. For purposes of calculating the amount of civil penalties,
FMCSA has determined that corrective actions taken by the violator and
the timing of those corrective actions are matters that are included
within this category and may result in a reduction in the penalty. See
www.fmcsa.dot.gov/penaltyassessments.
Violation Calculations
All calculations are made internally within the UFA 4.0 software
based on the entries made by the user and the points assigned. UFA will
reduce penalties for small businesses by 20 percent to comply with the
Small Business Regulatory Enforcement Fairness Act, Public Law 104-121
(Mar. 29, 1996), codified in 5 U.S.C. 801, et seq. (SBREFA) when such
reductions are applicable. FMCSA uses the Table of Small Business Size
Standards, published periodically by the Small Business Administration,
to identify small businesses.
FMCSA believes that a 20 percent difference in penalties between
large and small businesses of similar circumstances is a reasonable
exercise of the Agency's discretion and balances the principles of
SBREFA with the requirement of 49 U.S.C. 521 to calculate penalties
that are designed to induce further compliance with federal laws and
regulations. Section 223 of SBREFA permits agencies to refrain from
reducing penalties for small businesses in certain circumstances, such
as when a small business has been subject to multiple enforcement
actions by the agency, when the small business has engaged in willful
or criminal conduct, or when the violations pose serious health, safety
or environmental threats.
FMCSA will not apply the 20 percent reduction under SBREFA to a
small business whose conduct corresponds to one of the exclusions
listed in Section 223 of SBREFA. In addition to potential reductions
for small businesses, reductions can occur to ensure that the total
penalty does not exceed the Gross Revenue Cap. The UFA 4.0 methodology
establishes a range of penalties for each violation, and when UFA
reduces a penalty, it does so proportionally, based upon the ranges for
each violation, rather than by a percentage of the total civil penalty
assessment. Reductions must also take into consideration statutory and
administrative minimum requirements. A detailed explanation of the
algorithm used by UFA 4.0 to calculate penalties is included in the
``Explanation of Calculations'' document that will be published at
www.fmcsa.dot.gov/penaltyassessments. The User Manual that includes
instructions for the use of UFA 4.0, a public version of the UFA
software and FMCSA policies for the assessment of penalties, are
available on the penalty assessment Web site at www.fmcsa.dot.gov/penaltyassessments.
The public version of UFA 4.0 will be modified to prevent
accidental submission of data to FMCSA production databases.
Issued on: August 27, 2013.
Anne S. Ferro,
Administrator.
[FR Doc. 2013-21278 Filed 8-29-13; 11:15 am]
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