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Failure to Pay Civil Penalty Will Bar Companies from Hazmat Activities

Thursday, August 07, 2014
Sandler, Travis & Rosenberg Trade Report

The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration has issued a final rule that, effective Sept. 8, will prohibit 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 or an acceptable payment plan has been arranged. This rule also adds procedural requirements to ensure that a person subject to such a prohibition is notified in writing and given an opportunity to respond before being required to cease hazmat operations.

While a cessation of operations order may be appealed, PHMSA cautions regulated entities not to construe this as an opportunity to re-argue the merits of the penalty assessment, which there are ample opportunities to address at earlier stages in the enforcement process. PHMSA states that the only information sufficient to prevent a prohibition on hazmat operations after nonpayment of penalties would be proof of payment, proof of bankruptcy debtor status and an inability to pay, or an emergency stay issued by a federal district court with jurisdiction over these matters. Additionally, at the discretion of the appropriate agency, upon appeal by the respondent, the agency can rescind a COO if an agreeable payment plan has been arranged. PHMSA warns that persons who continue to conduct regulated activities in violation of a COO will be subject to additional penalties, including criminal prosecution.

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