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United States Department of Transportation United States Department of Transportation

SBREFA Policy

PHMSA Policy on Rights of Small Entities in Hazardous Materials Enforcement Cases

Sec. 223 of the Small Business Regulatory Enforcement Fairness

Among the DOT agencies that enforce the Hazardous Materials Regulations (HMR), PHMSA has primary responsibility for shippers of hazardous materials in non-bulk packagings for use in transporting hazardous materials. Most of these person are small entities as defined by Small Business Administration (SBA); PHMSA proposes estimates that approximately 88% of all persons that become subject to PHMSA's compliance program (regardless of whether violations are discovered) meet the SBA's definition of a "small business."

For that reason, PHMSA's hazardous materials enforcement program has been designed to consider small businesses. The penalties that PHMSA proposes and assesses are considered appropriate for small businesses generally, after considering the nature of the violation and all the other factors specified in the Federal hazardous material transportation law. In addition, however, penalties may be reduced for a small business under the following circumstances:

  1. In assessing any penalty, PHMSA must consider the ability of an individual or company to pay the penalty and the effect of a penalty on the individual or company's ability to continue to do business. PHMSA considers any information provided by a small business with respect to these factors (such as financial statements) and, in many case, reduces the penalty that would otherwise be assessed and/or allows payment of a penalty in monthly installments (without interest).
     
  2. In some instances, PHMSA also proposes and assesses a lower penalty on a business that is extremely small, without specifically considering financial information provided by the business. For example, when a business fails to train its hazmat employees than for a business with more than 10 hazmat employees.
     
  3. In addition, when the only violations discovered are considered to have a minimal impact on safety, PHMSA may issue a warning letter (which involves no monetary penalty) or a "ticket" (for which the penalties are reduced by 50% from the penalties normally proposed and assessed in a regular enforcement case). These alternative proceedings are considered especially appropriate for small businesses.

Normally, however, special consideration may not be given to small business if:

  • the small business has not corrected its violation(s) within a reasonable time;
  • the small business has committed one or more prior violations of the HMR;
  • the violations involve willful conduct;
  • the violations pose serious threats to health, safety or the environment; or
  • the small entity has not made a good faith effort to comply with the law.

Small Business Regulatory Enforcement Fairness Act Information

Your Rights to Enforcement Fairness

Our objective is to ensure a fair regulatory enforcement environment. If you feel you have been treated unfairly or unprofessionally by a Pipeline and Hazardous Materials Administration (PHMSA) employee, you have the right to contact the Small Business Association National Ombudsman at 1-888-REG-FAIR (1-888-734-3247) or www.sba.gov/ombudsman regarding the fairness of the compliance and enforcement activities by this agency.

Policy Against Retaliation

The Department of Transportation strictly forbids retaliatory acts by its employees. As such, you should feel confident that you will not be penalized for expressing your concerns about compliance and enforcement activities.