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Uniform Fine Assessment Version 4.0 Software; Calculating Amounts of Civil Penalties for Violations of Regulations

American Government Special Collections Reference Desk

American Government

Uniform Fine Assessment Version 4.0 Software; Calculating Amounts of Civil Penalties for Violations of Regulations

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]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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.

------------------------------------------------------------------------
                                                        Statute setting
                                                         forth penalty
           Regulations               Applicability       factors to be
                                                          considered
------------------------------------------------------------------------
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).
------------------------------------------------------------------------

    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]
BILLING CODE 4910-EX-P

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