On June 30, the Pipeline and Hazardous Materials Administration (PHMSA) increased the maximum administrative civil penalties that may be issued for a violation of the pipeline safety laws and regulations. Under the “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015”, which further amended the “Federal Civil Penalties Inflation Adjustment Act of 1990,” federal agencies are required to adjust their civil monetary penalties effective August 1, 2016, and then annually thereafter, to account for changes in inflation.
An interim final rule increased the maximum administrative civil penalties as follows:
- for a violation of the pipeline safety laws and regulations from $200,000.00 per violation per day up to $205,638.00, and from $2 million for a related series of violations up to $2,056,380.00.
- for the additional civil penalties applicable to violations of PHMSA’s LNG regulations from $50,000.00 to $75,123.00
- for violations of the pipeline safety whistle blower protection laws from $1,000.00 to $1,194.00.
PHMSA issued the rule pursuant to the “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015” and used a multiplier of 1.02819 pursuant to guidance provided by the Office of Management and Budget in order to calculate the increase.
According to a statement published on the agency’s website, PHMSA has amended the regulation related to civil penalties without notice and opportunity for public comment as it deemed advance public notice unnecessary.
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