[Federal Register Volume 69, Number 191 (Monday, October 4, 2004)]
[Rules and Regulations]
[Pages 59490-59498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22276]



[[Page 59489]]

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Part IV





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 13



Civil Penalty Assessment Procedures; Final Rule

Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Rules 
and Regulations

[[Page 59490]]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 13

[Docket No. 27854; Amendment No. 13-32]
RIN 2120-AE84


Civil Penalty Assessment Procedures

AGENCY: Federal Aviation Administration, DOT.

ACTION: Final rule.

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SUMMARY: The Federal Aviation Administration (FAA) is adopting 
procedures for administratively assessing civil penalties for 
violations of the laws and regulations the agency enforces. These 
procedures pertain to initiating and adjudicating a civil penalty 
against an individual acting as a pilot, flight engineer, mechanic, or 
repairman. These procedures are needed because the National 
Transportation Safety Board now reviews these civil penalty actions and 
the FAA's existing rules for civil penalty actions are not sufficiently 
flexible to adequately address the procedural differences that review 
in a different forum entails. This final rule also makes other minor 
modifications to the FAA's procedures for assessing civil penalties 
against persons other than individuals acting as pilots, flight 
engineers, mechanics, or repairmen.

DATES: Effective Date: This rule is effective on November 3, 2004.

FOR FURTHER INFORMATION CONTACT: Joyce Redos, Attorney, Enforcement 
Division (AGC-300), Federal Aviation Administration, 800 Independence 
Ave., SW., Washington, DC 20591; telephone (202) 267-3137.

SUPPLEMENTARY INFORMATION:

Availability of This Action

    You can get an electronic copy of this action using the Internet 
by:
    (1) Searching the Department of Transportation's electronic Docket 
Management System (DMS) Web page at http://dms.dot.gov/search;
    (2) Visiting the Office of Rulemaking's Web page at http://www.faa.gov/avr/arm/index.cfm; or
    (3) Accessing the Government Printing Office's Web page at http://www.access.gpo.gov/su_docs/aces/aces140.html.
    You can also get a copy of this action if you submit a request to 
the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 
Independence Avenue, SW., Washington, DC 20591, or by calling (202) 
267-9680. Make sure to identify the docket number, notice number, or 
amendment number of this rulemaking.
    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (volume 65, number 70: pages 19477-78), or you may visit 
http://dms.dot.gov.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Enforcement Fairness Act (SBREFA) of 1996 
requires FAA to comply with small entity requests for information or 
advice about compliance with statutes and regulations within its 
jurisdiction. If you are a small entity and you have a question 
regarding this document, you may contact a local FAA official or the 
person listed under FOR FURTHER INFORMATION CONTACT. You can find out 
more about SBREFA on the Internet at http://www.faa.gov/avr/arm/sbrefa.cfm or by e-mailing us at <a href="/cdn-cgi/l/email-protection#83c2d4c2aed0c1d1c6c5c2c3e5e2e2ade4ecf5"><span class="__cf_email__" data-cfemail="aaebfdeb87f9e8f8efecebeacccbcb84cdc5dc">[email protected]</span></a>.

Background \1\
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    \1\ On December 12, 2003, Public Law 108-176, ``Vision 100--
Century of Aviation Reauthorization Act,'' (Vision 100) was signed 
into law. Among other things, Vision 100 modified the maximum amount 
of civil monetary penalties the FAA can administratively assess 
under 49 U.S.C. 46301(d). For violations occurring on or after 
December 12, 2003, the FAA now has authority to assess 
administratively a maximum civil penalty of $400,000 against persons 
other than individuals or small business concerns. For individuals 
and small business concerns, the maximum civil penalty the FAA can 
assess administratively remains $50,000.
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    The FAA has authority to assess civil penalties for certain 
violations of the FAA's governing statute and regulations or orders 
issued under that statute as well as other statutes, regulations, or 
orders the agency enforces. This authority formerly covered all civil 
penalty actions involving a civil penalty of $50,000 or less.
    In 49 U.S.C. 46301(d)(5), Congress transferred the authority to 
review the FAA's administrative civil penalty actions against 
individuals acting as pilots, flight engineers, mechanics, or repairmen 
to the National Transportation Safety Board (NTSB). Proceedings against 
individuals acting as pilots, flight engineers, mechanics and 
repairmen, therefore, are adjudicated under the NTSB's Rules of 
Practice in Air Safety Proceedings, located in 49 CFR part 821.
    This rulemaking adopts procedures under a new section of the FAA's 
regulations, 14 CFR 13.18, for initiating civil penalty actions 
adjudicated by the NTSB. It amends existing 14 CFR 13.16 to exclude 
actions covered under new Sec.  13.18. It adds a new section, 14 CFR 
13.14, that lists those provisions that, if violated, may result in a 
civil penalty being sought or assessed administratively. Section 
13.14(c) also states that the amounts of civil penalties are 
periodically adjusted for inflation under the formula set by Congress 
in 28 U.S.C. 2461 note. We implemented this formula in 14 CFR part 13, 
subpart H. This regulation also makes other clarifying changes to part 
13.
    Although the FAA published the notice of proposed rulemaking (NPRM) 
almost 10 years ago, the final rule adopts procedural rules and 
publishes informational regulations. Therefore, another opportunity for 
notice and comment is not warranted.

Disposition of Comments

    Three commenters responded to the NPRM, which the FAA issued on 
July 29, 1994 (59 FR 40192, Aug. 5, 1994). The first commenter 
questioned two aspects of the NPRM. Those aspects related to (1) which 
forum has jurisdiction of security screening cases involving pilots and 
(2) why the penalty for disrupting a flight crewmember's duties is less 
than the penalty for tampering with a smoke alarm device. The first 
comment is moot because Congress transferred responsibility for 
aviation security to the Department of Homeland Security. The second 
comment is beyond the scope of the NPRM because Congress set the 
penalty amounts in question, not the agency. In any event, in 49 U.S.C. 
46318, Congress set a maximum penalty of $25,000 for certain violations 
involving interference with a crewmember.
    The second commenter raised a number of concerns about the fairness 
of the proposed rule and the FAA's authority to assess civil penalties. 
All but one of this commenter's concerns were unresponsive to, or 
otherwise beyond the scope of, the rulemaking. The remaining comment 
was ``[t]he way the system looks now, the first a person hears of a 
problem is when the government sends him/her a notice specifying a 
violation of the FARs with the amount they owe the gov[ernmen]t. That 
just is [not] fair and is not right.'' The commenter seemingly 
misunderstood the intent of the notice of proposed assessment. Contrary 
to the comment, the notice of proposed assessment does not constitute a 
finding of a violation. Nor does the notice impose a civil penalty. The 
notice of proposed assessment gives an alleged

[[Page 59491]]

violator notice of a violation being charged and the proposed sanction 
for that violation. Following the notice of proposed assessment, an 
alleged violator has an opportunity to speak with the agency informally 
and present evidence on the alleged violator's behalf before the FAA 
issues an order of assessment.
    The third commenter raised the issue of stale complaint, arguing 
that the NTSB's 6-month stale complaint rule for certificate actions 
should apply to civil penalty actions against pilots, flight engineers, 
mechanics and repairmen. This comment is moot because the NTSB has 
adopted a rule extending its 6-month stale complaint rule to civil 
penalty actions against pilots, flight engineers, mechanics and 
repairmen. 59 FR 59050, 59051-59052 (Nov. 24, 1994).

Discussion of the Rule

Interpretation of ``Individual Acting as a Pilot, Flight Engineer, 
Mechanic, or Repairman''

    In the NPRM, the FAA proposed an interpretation of the phrase ``a 
person acting in the capacity of a pilot, flight engineer, mechanic or 
repairman.'' When Congress recodified the FAA's statute, it changed 
this phrase to ``an individual acting as a pilot, flight engineer, 
mechanic or repairman''. Congress intended no substantive change. The 
only comment directed at the definition outlined in the NPRM was the 
objection that the proposed definition would allow the FAA 
decisionmaker to review security screening violations involving pilots. 
As stated above, that objection is moot due to the transfer of aviation 
security functions to the Department of Homeland Security.
    The FAA interprets the phrase ``an individual acting as a pilot, 
flight engineer, mechanic, or repairman'' to refer to an individual who 
has engaged in conduct that involves the exercise of the privileges and 
duties of these certificates, regardless of whether that individual 
holds a valid pilot, flight engineer, mechanic, or repairman 
certificate.
    In adopting this interpretation, the FAA considered whether an 
individual must hold a relevant certificate to obtain NTSB review under 
49 U.S.C. 46301(d)(5). The FAA concluded that holding one of these 
certificates is not determinative because the phrase ``acting as'' 
describes the alleged violator in terms of the activities he or she 
performs, not the alleged violator's legal status. Therefore, it is the 
nature of the activity involved in the violation that determines 
whether the case falls within the scope of 49 U.S.C. 46301(d)(5).
    Furthermore, if the Congress had intended to limit NTSB review of 
civil penalty actions to those against certificate holders, it would 
have drafted section 46301(d)(5)(A) differently. For example, section 
46301(a)(5) distinguishes between civil penalty liability of an 
``individual'' and of an ``airman serving as an airman.'' The Congress' 
failure to use more specific language is evidence of its intent that 
``individual acting as a pilot, flight engineer, mechanic, or 
repairman'' be given a noticeably broader construction than ``holder.''
    The term ``acting'' may include the failure to act. For example, 
acting as a pilot, flight engineer, mechanic, or repairman includes 
failing to surrender a pilot, flight engineer, mechanic, or repairman 
certificate when it has been revoked, as required by 14 CFR 61.19(f), 
63.15(c), or 65.15(c). As this example shows, the privileges and duties 
under the FAA's regulations extend beyond actually flying an aircraft 
or performing maintenance on an aircraft. Therefore, the NTSB also 
reviews these cases.
    In the NPRM, the FAA proposed that ``* * * any civil penalty action 
for violations by a person acting in the capacity of a flight 
instructor would be heard under the NTSB procedures.'' (59 FR 40193.) 
Even though the FAA specifically welcomed comments on the 
interpretation of ``person acting in the capacity of a pilot * * *,'' 
the FAA received no comments on the flight instructor aspect of the 
interpretation. On further review, the statement in the NPRM would be, 
in some instances, inconsistent with the proposition that ``* * * [i]t 
is the nature of the activity that triggers the applicability of'' NTSB 
review. For example, a flight instructor usually is not exercising the 
privileges of a pilot certificate when the flight instructor gives 
ground training or executes or maintains pilot records. (See 14 CFR 
part 61, subpart H.) In addition, 49 U.S.C. 46301(d) does not refer to 
``acting as flight instructor.'' Therefore, NTSB review in cases 
involving a flight instructor certificate will arise only when the 
violation involves his or her exercise of pilot privileges.
    An inspection authorization differs from a flight instructor 
certificate in that it is more like a rating on a mechanic certificate 
than a separate certificate. Both the NTSB and its predecessor, the 
Civil Aeronautics Board, have recognized the inspection authorization 
as a rating on the mechanic certificate. Administrator v. Luster, NTSB 
Order No. EA-3974, pp. 3-4 (Aug. 24, 1993); Gene Rawdon, 31 CAB 1167, 
1168 (Sep. 9, 1960). The NTSB therefore reviews civil penalty actions 
involving an inspection authorization not because one must hold a 
mechanic certificate to obtain an inspection authorization, but because 
exercising the privileges and duties of the inspection authorization 
results in one exercising the privileges and duties of the mechanic 
certificate.
    The mere fact that an individual holds a pilot, flight engineer, 
mechanic, or repairman certificate is not sufficient to vest 
jurisdiction in the NTSB to review a case. If an alleged violator is 
not exercising the privileges associated with one of these certificates 
in connection with the alleged violation, then the case will be 
reviewed by the FAA decisionmaker under section 46301(d)(7) even though 
the alleged violator happens to hold one or more of these certificates. 
For example, the FAA decisionmaker would review a case involving a 
passenger who interferes with a cabin or flight crewmember even if the 
passenger holds a pilot certificate because the passenger's conduct did 
not involve the exercise of the privileges of the passenger's pilot 
certificate.

Procedures

    New 14 CFR 13.18 implements the statutory requirements for 
initiating cases that the NTSB reviews. Section 46301(d)(5)(A) of the 
FAA's statute provides that the Administrator may issue an order 
imposing a civil penalty against an individual acting as a pilot, 
flight engineer, mechanic, or repairman only after (1) advising the 
individual of the charges or any reason relied on by the FAA for the 
proposed action, and (2) providing the individual with an opportunity 
to answer the charges. Once the Administrator has issued an order, 
section 46301(d)(5)(B) authorizes the individual against whom it was 
issued to appeal the order to the NTSB. In addition, section 
46301(d)(5)(D) provides that filing an appeal to the NTSB stays the 
Administrator's order. These procedural requirements are substantially 
similar to the procedural requirements set forth in 49 U.S.C. 44709(c) 
through (e) of the FAA's statute for non-emergency certificate actions.
    In preparing the final rule, we have reorganized the subsections of 
new Sec.  13.18 to reflect as closely as possible the actual step-by-
step processing of a civil penalty action.

Applicability

    New 14 CFR 13.18(a)(1) states the statutory authority for 
administratively assessing a civil penalty against an individual acting 
as a pilot, flight engineer, mechanic, or repairman. Under 49 U.S.C. 
46301(d)(5)(B), the

[[Page 59492]]

NTSB reviews cases falling within the scope of 14 CFR 13.18. Section 
13.18(a)(2) states when a United States district court has exclusive 
jurisdiction of a civil penalty action against a pilot, flight 
engineer, mechanic, or repairman.

Definitions and Delegations

    The FAA did not receive any comments on proposed Sec.  13.18 (b) 
and (d), which contained definitions and delegations of authority, 
respectively. With some minor changes to paragraph (d) to improve 
clarity, including separating the delegations into numbered 
subparagraphs, these sections are adopted as Sec.  13.18(b) and (c), 
respectively.

Notice and Informal Process

    Under new Sec.  13.18(d), the FAA initiates a civil penalty action 
against an individual acting as a pilot, flight engineer, mechanic, or 
repairman by issuing a notice of proposed assessment. The notice 
contains a statement of the charges and the amount of the proposed 
civil penalty. The notice also sets forth the procedures for responding 
to the notice. Subsections 13.18(d)(1)-(4) state the specific options 
for responding to the notice. The options are (1) submitting the amount 
of proposed civil penalty, (2) answering the charges in writing, (3) 
submitting a written request for an informal conference with an agency 
attorney and submitting relevant information or documents, or (4) 
requesting that an order be issued in accordance with the notice of 
proposed assessment so that the individual charged may appeal to the 
NTSB. The notice of proposed assessment and the opportunity to respond 
using informal procedures satisfy the statutory requirement in section 
46301(d)(5)(A) of the FAA's statute to advise alleged violators of the 
charges and give them an opportunity to answer.

Order of Assessment

    After the informal response procedures outlined above are 
completed, the FAA considers all information the alleged violator has 
supplied. If the parties have not agreed to resolve the case, the FAA 
will issue an order of assessment under new Sec.  13.18(f). Before 
issuing the order of assessment, the FAA considers all the information 
available in the record at that point. The individual charged may then 
appeal the order of assessment to the NTSB, as provided in 14 CFR 
13.18(g). These procedures satisfy the requirements of 49 U.S.C. 
46301(d)(5)(B). As stated previously, once the individual charged has 
filed a notice of appeal with the NTSB, the case is subject to the 
NTSB's Rules of Practice in Air Safety Proceedings, located in 49 CFR 
part 821.
    Under new Sec.  13.18(e), the FAA may also issue an order of 
assessment if the individual charged does not respond to the notice of 
proposed assessment within 15 days. Furthermore, if the individual does 
not file a notice of appeal with the NTSB within the time provided by 
the NTSB's rules of practice, the order of assessment becomes final.

Appeal to the NTSB

    Under 14 CFR 13.18(g), the alleged violator may file an appeal from 
an order of assessment with the NTSB. A timely appeal to the NTSB stays 
the effectiveness of the order of assessment until the NTSB issues a 
final decision in the matter, as required by 49 U.S.C. 46301(d)(5)(D).

Exhaustion of Administrative Remedies

    Section 13.18(h) states the provision for judicial review of a 
final decision of the NTSB provided for in 49 U.S.C. 46301(d)(6). 
Appeal is to a United States court of appeals for the circuit in which 
the individual charged resides or has his or her principal place of 
business or to the United States Court of Appeals for the District of 
Columbia Circuit. Section 13.18(h) also specifies, based on 49 U.S.C. 
46110(d), that the Administrator's order of assessment is not a final 
order for the purpose of judicial review unless it has first been 
appealed to the NTSB.

Compromise Orders

    Section 46301(i)(1) of the FAA's statute authorizes the Secretary 
of Transportation to compromise the amount of a civil penalty. The 
Secretary has delegated this authority to the Administrator in 49 CFR 
1.47. New Sec.  13.18(i)(1) provides agency attorneys with the 
authority to compromise civil penalty assessment actions initiated 
under 49 U.S.C. 46301(d)(5) against an individual acting as a pilot, 
flight engineer, mechanic, or repairman with no finding of a violation. 
New Sec.  13.18(i)(2) authorizes agency attorneys to compromise the 
amount of a civil penalty proposed or assessed in an order with a 
finding of a violation as well.
    Existing Sec.  13.16(l)(1), on which Sec.  13.18(i) is modeled, 
does not specifically require the alleged violator either to pay the 
civil penalty or sign a promissory note before a compromise order is 
issued. As stated in the NPRM, the FAA has experienced problems with 
this approach. In some cases, when the FAA did not receive payment 
before it issued the compromise order, the alleged violator has 
subsequently failed to pay the civil penalty. Also, if the person has 
not signed a promissory note agreeing to the amount of the penalty and 
a payment schedule, a risk exists that the person will dispute whether 
the amount in the compromise order is the amount the parties agreed on, 
complicating collection procedures. Debt collection procedures often 
are time-consuming and costly, and may not result in recovery of the 
full amount of the debt.
    To avoid these problems, the FAA proposed in the NPRM that it will 
not issue a compromise order under new Sec.  13.18(i) unless the 
alleged violator has prepaid the civil penalty or has signed a 
promissory note providing for installment payments. The FAA did not 
receive any comments on this issue. We are therefore adopting these 
changes as proposed. The FAA also amends current Sec.  13.16(l) to 
incorporate these changes; it is redesignated as Sec.  13.16(n).

Payment of Civil Penalties

    Under 14 CFR 13.18(j), the individual charged must pay the civil 
penalty assessed in an order of assessment within 30 days, unless the 
individual has filed a timely notice of appeal with the NTSB. In cases 
that have been appealed, Sec.  13.18(j) further requires the individual 
charged to pay the civil penalty within 30 days after a final order of 
the Board or the Court of Appeals affirms the order of assessment in 
whole or in part.

Debt Collection

    The NPRM included a provision, now located in new Sec.  13.18(k), 
for collection of civil penalties. That proposed subsection was copied 
nearly verbatim from current 14 CFR 13.16(j). The provision was not 
discussed in the preamble to the NPRM. In reviewing the FAA's actual 
debt collection procedures, however, it appears that Sec.  13.16(j), 
and therefore proposed Sec.  13.18(i), do not reflect all methods the 
FAA may use to collect a delinquent debt. Following the enactment of 
the Debt Collection Act of 1996, the FAA generally transfers delinquent 
debts to the Department of the Treasury for collection. In addition, we 
have deleted reference to failure to pay within 60 days. The timeframe 
for payment after which a debt becomes delinquent is subject to change. 
In addition, an order of assessment, like an order assessing civil 
penalty, states when the debt imposed by the order may become 
delinquent and, if a delinquency notice is issued, it states what 
actions to recover the debt may be taken and

[[Page 59493]]

timeframe for taking them. Therefore, the FAA has determined that both 
current Sec. Sec.  13.16(j) and 13.18(k) should be revised to reflect 
more generally the agency's practice to use all methods under the law 
to collect delinquent debts, which includes referring a case to the 
United States Attorney General for collection. Current Sec.  13.16(j) 
is redesignated as Sec.  13.16(l).

Changes to 14 CFR Part 13, Subpart G

    The preamble to the NPRM proposed amending certain sections of the 
Rules of Practice in FAA Civil Penalty Actions. The FAA did not receive 
any comments on the proposed amendments. The FAA therefore adopts these 
amendments as proposed in the NPRM.

Civil Penalties Other Than Administrative Assessment

    The FAA did not receive any comments on the proposed revision of 
the heading for 14 CFR 13.15. We are therefore adopting it as proposed.

Conforming Changes in the Final Rule That Were Not Proposed in the NPRM

    Since the NPRM was issued, Congress has recodified the Federal 
transportation law, increased the amounts of civil penalties available 
for certain violations, provided a requirement for agencies to 
periodically adjust for inflation the amount of the minimum and maximum 
civil penalties for statutes the agencies enforce, and added provisions 
to the FAA's statute that include new authority to seek or 
administratively assess civil penalties. The FAA's Office of the Chief 
Counsel has also undergone certain organizational changes, including 
the creation of a new Deputy Chief Counsel for Operations position. We 
are conforming Sec. Sec.  13.15, 13.16, and 13.18 to these changes. As 
discussed elsewhere, we are also adopting a new Sec.  13.14, which 
among other things, lists in one place the statutory provisions for 
which the FAA has authority to seek or administratively assess civil 
penalties.

Civil Penalty Assessments Against Persons Other Than Individuals Acting 
as Pilots, Flight Engineers, Mechanics, and Repairmen

Applicability
    Existing Sec.  13.16(a) contains an obsolete list of the statutory 
provisions authorizing the FAA to assess civil penalties. In the NPRM, 
the FAA proposed to update the list to provide more information. 
Proposed Sec.  13.16(a)(1) would have set forth a new list of the 
statutory provisions authorizing the FAA to assess civil penalties. 
Proposed Sec.  13.16(a)(2) would have set forth the maximum amount of 
civil penalties that could be assessed. Because of recent changes in 
the FAA's governing statute and our adoption of regulations governing 
the periodic adjustment for inflation of civil monetary penalties, in 
compliance with 28 U.S.C. 2461 note, we have concluded that proposed 
Sec.  13.16(a)(2) would be redundant. Accordingly, we are deleting 
proposed Sec.  13.16(a)(2) from the final rule. Because we are adopting 
a new 14 CFR 13.14, discussed below, we are revising the remainder of 
Sec.  13.16(a) to state that the FAA uses the procedures in Sec.  13.16 
when it assess a civil penalty against a person other than an 
individual acting as a pilot, flight engineer, mechanic or repairman 
for a violation cited in 49 U.S.C. 46301(d)(2) or 47531. We are adding 
a new paragraph (b) indicating when the United States district courts 
have exclusive jurisdiction. We are adding a new Sec.  13.16(c) for 
violations of 49 U.S.C. chapter 51, the Federal hazardous materials 
transportation law. We are revising current Sec.  13.16(d) to delete 
references to the statutes the FAA enforces and redesignating it as 
Sec.  13.16(f). We are also redesignating the remaining paragraphs of 
current Sec.  13.16 to accommodate the addition of new Sec. Sec.  
13.16(b) and 13.16(c). These actions are simply informational or 
editorial in nature. The agency has, therefore, determined that prior 
notice and opportunity for comment is unnecessary under section 553 of 
the Administrative Procedure Act.
Change to Sec.  13.16(k). Judicial Review--Jurisdiction in Actions for 
Violations of the Federal Hazardous Materials Transportation Law
    Under 49 U.S.C. 46110, exclusive jurisdiction for judicial review 
of final orders of the Administrator issued under the FAA's statute is 
in the United States courts of appeals. Current Sec.  13.16(k) 
incorporates that statutory review provision.
    Current Sec.  13.16(k) makes no distinction between cases involving 
the FAA's governing statute and the Federal hazardous materials 
transportation law, 49 U.S.C. chapter 51, for purposes of judicial 
review. The Federal hazardous materials transportation law itself, 
however, is silent on the issue of judicial review. That statute's 
silence on the issue of judicial review results in judicial review in 
an appropriate United States district court under 5 U.S.C. 701 et seq. 
and 28 U.S.C. 1331. Section 702 of title 5, United States Code, states 
that ``[a] person suffering legal wrong because of agency action, or 
adversely affected or aggrieved by agency action with the meaning of a 
relevant statute, is entitled to judicial review.'' Section 1331 of 
title 28, United States Code, states that ``[t]he district courts shall 
have original jurisdiction of all civil actions arising under the 
Constitution, laws, or treaties of the United States.'' Because we 
pursue hazardous materials violations under the Federal hazardous 
materials transportation law in 49 U.S.C. chapter 51, we are amending 
current Sec.  13.16(k) to add a separate judicial review provision for 
such actions. We are also redesignating Sec.  13.16(k) as Sec.  
13.16(m). Existing Sec.  13.16(k) will become Sec.  13.16(m)(1), and 
new Sec.  13.16(m)(2) will state that judicial review of final agency 
orders under 49 U.S.C. chapter 51 is available in an appropriate 
district court of the United States, in accordance with 5 U.S.C. 701 et 
seq. and 28 U.S.C. 1331. Although this change was not included in the 
NPRM, the FAA finds good cause for not conducting notice-and-comment 
rulemaking on it based on the need to conform our rules to the law.
References to the FAA's Governing Statute and the Federal Hazardous 
Materials Transportation Law in Sec. Sec.  13.15 and 13.16
    The FAA published a final rule on December 28, 1995 (60 FR 67254), 
revising the authority citations for its regulations in Chapter I of 
Title 14 of the Code of Federal Regulations (14 CFR parts 1-199), 
including the authority citation for part 13. In adopting the revised 
authority citations, the FAA stated:

    In July 1994, the Federal Aviation Act of 1958 and numerous 
other pieces of legislation affecting transportation in general were 
recodified. The statutory material became ``positive law'' and was 
recodified at 49 U.S.C. 1101 et seq.
    The Federal Aviation Administration is amending the authority 
citations for its regulations in Chapter I of 14 CFR to reflect the 
recodification of its statutory authority. No substantive change was 
intended to any statutory authority by the recodification, and no 
substantive change is introduced to any regulation by this change.
* * * * *
    Because of the editorial nature of this change, it has been 
determined that prior notice is unnecessary under the Administrative 
Procedure Act. * * *

In line with that revision to the authority citation to part 13, we are 
amending current Sec. Sec.  13.15 and 13.16 to bring the statutory 
citations they contain into conformity with the recodification and the 
revised authority citation. The statutory citations in new Sec.  13.18 
also conform to the recodification and the revised authority citation. 
This action,

[[Page 59494]]

like the revision to the authority citations, is editorial in nature. 
The agency has, therefore, determined that prior notice and opportunity 
for comment is unnecessary under section 553 of the Administrative 
Procedure Act.
Changes in Position Titles in Sec. Sec.  13.15, 13.16 and 13.18
    The NPRM had proposed amending part 13 with respect to delegations 
of authority to reflect the reorganization of the former Regulations 
and Enforcement Division into two separate divisions. The proposed 
amendments are no longer necessary as the FAA published a final rule 
reflecting organizational changes and delegations of authority in 
various parts of the FAA's regulations on September 4, 1997 (62 FR 
46864).
    On March 3, 2004, however, the FAA published Notice 1100.290. 
Notice 1100.290 announces the realignment of functions and 
responsibilities within the Office of the Chief Counsel. Among other 
things, the new organizational structure created the position of Deputy 
Chief Counsel for Operations. Based on Notice 1100.290, we are revising 
Sec. Sec.  13.15(b), (c)(1), (c)(3), 13.16(e)(1-4), and 13.18(d)(1-3) 
to replace references to the Deputy Chief Counsel with references to 
the Deputy Chief Counsel for Operations.
Other Changes
    In preparing the final rule, we concluded that it would be helpful 
to list in one place those provisions of the statutes the FAA enforces, 
and rules, regulations, or orders issued under those statutes, for 
which civil penalties may be sought or administratively assessed. We 
also concluded that it would be helpful to include a statement 
indicating that the maximum amounts of civil penalties are subject to 
periodic adjustment for inflation under the formula established by 
Congress. Therefore, we are adopting a new section, 14 CFR 13.14. We 
have concluded that notice and comment are unnecessary because this new 
section does no more than list the applicable statutory provisions and 
states that Congress has established a formula for periodically 
adjusting the maximum amounts of civil penalties. That formula is 
implemented in 14 CFR part 13, subpart H.

Economic Assessment, Regulatory Flexibility Determination, 
International Trade Impact Assessment, and Unfunded Mandates Assessment

    Proposed changes to Federal regulations must undergo several 
economic analyses. First, Executive Order 12866 directs that each 
Federal agency may propose or adopt a regulation only upon a reasoned 
determination that the benefits of the intended regulation justify its 
costs. Second, the Regulatory Flexibility Act of 1980 requires agencies 
to analyze the economic impact of regulatory changes on small entities. 
Third, the Trade Agreements Act (19 U.S.C. 2531-2533) prohibits 
agencies from setting standards that create unnecessary obstacles to 
the foreign commerce of the United States. In developing U.S. 
standards, this Trade Act requires agencies to consider international 
standards and, where appropriate, that they be the basis for U.S. 
standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4) requires agencies to prepare a written assessment of the costs, 
benefits, and other effects of proposed or final rules that include a 
Federal mandate likely to result in the expenditure by State, local, or 
tribal governments, in the aggregate, or by the private sector, of 
$120.7 million or more annually, adjusted for inflation.

Regulatory Evaluation Summary

    The FAA believes that the procedural changes adopted in this rule 
conform the existing procedural rules to amendments made in the FAA's 
statute, and clarify existing rules where necessary. The changes do 
not, in economic terms, alter the basic processes by which civil 
penalties are assessed within the agency. For this reason, a full 
Regulatory Evaluation is not warranted. This regulatory evaluation 
examines the potential costs and benefits of the amendments to part 13.

Benefits

    The potential benefits of this rule include clarifying the rule and 
explaining in detail how portions of the Administrator's administrative 
civil penalty assessment authority are implemented. These changes will 
provide potentially affected aviation parties (e.g., pilots, flight 
engineers, mechanics, and repairmen) with a better understanding of the 
civil penalty process.

Costs

    The potential costs of the rule are zero because it consists only 
of procedural and clarifying changes to part 13. The procedural changes 
do no more than explain how the requirements of the Administrator's 
administrative civil penalty assessment authority under the FAA's 
statute and other statutes are implemented. The changes do not impose 
new economic requirements on potentially affected parties. The 
clarifying changes will enhance the public's comprehension of the civil 
penalty assessment process.

International Trade Impact Assessment

    The rule represents procedural and clarifying changes only. These 
changes do not impose any costs on either U.S. or foreign operators. 
Therefore, a competitive trade disadvantage will not be incurred by 
U.S. operators abroad or foreign operators in the United States.

Regulatory Flexibility Determination

    Under the Regulatory Flexibility Act of 1980, the FAA certifies 
that the rule will not have a significant economic impact, positive or 
negative, on a substantial number of small entities because the rule 
addresses procedures for initiating civil penalty actions against 
persons who have violated the statutes the FAA enforces, or rules, 
regulations, or orders issued under those statutes. Such changes do not 
impose any cost burdens or result in any cost savings.

Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (the Act) is intended, 
among other things to curb the practice of imposing unfunded Federal 
mandates on State, local, and tribal governments. Title II of the Act 
requires each Federal agency to prepare a written statement assessing 
the effects of any Federal Mandate in a proposed or final agency rule 
that may result in an expenditure of $100 million or more (adjusted 
annually for inflation) in any 1 year by State, local, and tribal 
governments, in the aggregate, or by the private sector. Such a mandate 
is deemed to be a ``significant regulatory action.'' The FAA currently 
uses an inflation-adjusted value of $120.7 million in lieu of $100 
million.
    This final rule does not contain such a mandate. The requirements 
of Title II do not apply.

Federalism Implications

    This amendment does not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. The respondents affected by the new 
procedures are private persons, not state governments. Therefore, under 
Executive Order 12612, preparation of a federalism assessment is not 
warranted.

[[Page 59495]]

Paperwork Reduction Act

    This rule does not contain any information collection requests 
requiring approval of the Office of Management and Budget pursuant to 
the Paperwork Reduction Act of 1980 (Pub. L. 96-511). There are no 
requirements for information collection associated with this rule.

Conclusion

    For the reasons discussed in the preamble, and based on the 
findings of the Regulatory Flexibility Determination and the 
International Trade Analysis, the FAA has determined that this 
regulation is not economically significant under Executive Order 12866. 
Although there has been significant public interest in the FAA's rules 
of practice in civil penalty assessment actions in the past, the FAA 
has determined that this regulation is a nonsignificant regulatory 
action under the Executive Order. This regulation is considered 
nonsignificant under DOT Regulatory Policies and Procedures (44 FR 
11034; February 26, 1979). In addition, the FAA certifies that this 
regulation will not have a significant economic impact, positive or 
negative, on a substantial number of small entities under the criteria 
of the Regulatory Flexibility Act. In view of the minimal economic 
impact of this final rule, a full regulatory evaluation is unnecessary.

List of Subjects in 14 CFR Part 13

    Administrative practice and procedure, Air transportation, 
Hazardous materials transportation, Investigations, Law enforcement, 
Penalties.

The Amendments

0
Therefore, the Federal Aviation Administration amends part 13 of the 
Federal Aviation Regulations, as follows:

PART 13--INVESTIGATIVE AND ENFORCEMENT PROCEDURES

0
1. Revise the authority citation for part 13 to read as follows:

    Authority: 18 U.S.C. 6002; 28 U.S.C. 2461 (note); 49 U.S.C. 
106(g), 5121-5124, 40113-40114, 44103-44106, 44702-44703, 44709-
44710, 44713, 46101-46110, 46301-46316, 46318, 46501-46502, 46504-
46507, 47106, 47111, 47122, 47306, 47531-47532; 49 CFR 1.47.

0
2. Add Sec.  13.14 to part 13 to read as follows:


Sec.  13.14  Civil penalties: General.

    (a) Any person who violates chapter 401 (except sections 40103(a) 
and (d), 40105, 40116, and 40117), chapter 441 (except section 44109), 
section 44502(b) or (c), chapter 447 (except section 44717 and 44719-
44723), chapter 451, 46301(b), 46302-46303, 46318, 46319, 47528-47530 
of Title 49 of the United States Code, or any rule, regulation, or 
order issued thereunder, is subject to a civil penalty.
    (b) Any person who violates any of the following statutory 
provisions, or any rule, regulation, or order issued thereunder, is 
subject to a civil penalty of not more than the amount specified in 49 
U.S.C. chapter 463 for each violation:
    (1) Chapter 401 (except sections 40103(a) and (d), 40105, 40116, 
and 40117);
    (2) Chapter 441 (except section 44109);
    (3) Section 44502(b) or (c);
    (4) Chapter 447 (except sections 44717 and 44719-44723);
    (5) Chapter 451;
    (6) Sections 46301(b), 46302, 46303, 46318, or 46319; or
    (7) Sections 47528 through 47530.
    (c) Any person who knowingly commits an act in violation of 49 
U.S.C. chapter 51 or a regulation prescribed or order issued under that 
chapter, is subject to a civil penalty under 49 U.S.C. 5123.
    (d) The minimum and maximum amounts of civil penalties for 
violations of the statutory provisions specified in paragraphs (a) and 
(b) of this section, or rules, regulations, or orders issued 
thereunder, are periodically adjusted for inflation in accordance with 
the formula established in 28 U.S.C. 2461 note and implemented in 14 
CFR part 13, subpart H.

0
3. In Sec.  13.15 revise the section heading, paragraphs (a), (b), (c) 
introductory text, (c)(1), (c)(3), and (c)(5), to read as follows:


Sec.  13.15  Civil penalties: Other than by administrative assessment.

    (a) The FAA uses the procedures in this section when it seeks a 
civil penalty other than by the administrative assessment procedures in 
Sec. Sec.  13.16 or 13.18.
    (b) The authority of the Administrator, under 49 U.S.C. chapter 
463, to seek a civil penalty for a violation cited in Sec.  13.14(a), 
and the ability to refer cases to the United States Attorney General, 
or the delegate of the Attorney General, for prosecution of civil 
penalty actions sought by the Administrator is delegated to the Chief 
Counsel; the Deputy Chief Counsel for Operations; the Assistant Chief 
Counsel for Enforcement; the Assistant Chief Counsel, Europe, Africa, 
and Middle East Area Office; the Regional Counsel; the Aeronautical 
Center Counsel; and the Technical Center Counsel. This delegation 
applies to cases involving:
    (1) An amount in controversy in excess of:
    (i) $50,000, if the violation was committed by any person before 
December 12, 2003;
    (ii) $400,000, if the violation was committed by a person other 
than an individual or small business concern on or after December 12, 
2003;
    (iii) $50,000, if the violation was committed by an individual or 
small business concern on or after December 12, 2003; or
    (2) An in rem action, seizure of aircraft subject to lien, suit for 
injunctive relief, or for collection of an assessed civil penalty.
    (c) The Administrator may compromise any civil penalty proposed 
under this section, before referral to the United States Attorney 
General, or the delegate of the Attorney General, for prosecution.
    (1) The Administrator, through the Chief Counsel; the Deputy Chief 
Counsel for Operations; the Assistant Chief Counsel for Enforcement; 
the Assistant Chief Counsel, Europe, Africa, and Middle East Area 
Office; the Regional Counsel; the Aeronautical Center Counsel; or the 
Technical Center Counsel sends a civil penalty letter to the person 
charged with a violation cited in Sec.  13.14(a). The civil penalty 
letter contains a statement of the charges, the applicable law, rule, 
regulation, or order, the amount of civil penalty that the 
Administrator will accept in full settlement of the action or an offer 
to compromise the civil penalty.
* * * * *
    (3) If the person charged with the violation offers to compromise 
for a specific amount, that person must send to the agency attorney a 
certified check or money order for that amount, payable to the Federal 
Aviation Administration. The Chief Counsel; the Deputy Chief Counsel 
for Operations; the Assistant Chief Counsel for Enforcement; the 
Assistant Chief Counsel, Europe, Africa, and Middle East Area Office; 
the Regional Counsel; Aeronautical Center Counsel; or the Technical 
Center Counsel may accept the certified check or money order or may 
refuse and return the certified check or money order.
* * * * *
    (5) If the parties cannot agree to compromise the civil penalty 
action or the offer to compromise is rejected and the certified check 
or money order submitted in compromise is returned, the Administrator 
may refer the civil penalty action to the United States Attorney 
General, or the delegate of the

[[Page 59496]]

Attorney General, to begin proceedings in a United States district 
court, pursuant to the authority in 49 U.S.C. 46305, to prosecute and 
collect the civil penalty.
* * * * *

0
4. Amend Sec.  13.16 as follows:
0
a. Revise the section heading and paragraph (a);
0
b. Redesignate paragraphs (j) through (l) as (l) through (n) and revise 
newly designated paragraphs (l), (m), and (n) introductory text, (n)(1) 
introductory text, and (n)(1)(i);
0
c. Redesignate paragraphs (e) through (i) as (g) through (k);
0
d. Redesignate paragraphs (c) and (d) as (e) and (f), and revise newly 
redesignated paragraph (e) and the first sentence of paragraph (f) 
introductory text;
0
e. Redesignate paragraph (b) as paragraph (d); and
0
f. Add paragraphs (b) and (c).
0
The revisions and additions read as follows:


Sec.  13.16  Civil penalties: Administrative assessment against a 
person other than an individual acting as a pilot, flight engineer, 
mechanic, or repairman. Administrative assessment against all persons 
for hazardous materials violations.

    (a) The FAA uses these procedures when it assesses a civil penalty 
against a person other than an individual acting as a pilot, flight 
engineer, mechanic, or repairman for a violation cited in 49 U.S.C. 
46301(d)(2) or 47531.
    (b) District court jurisdiction. Notwithstanding the provisions of 
paragraph (a) of this section, the United States district courts have 
exclusive jurisdiction of any civil penalty action initiated by the FAA 
for violations described in those paragraphs, under 49 U.S.C. 
46301(d)(4), if--
    (1) The amount in controversy is more than $50,000 for a violation 
committed by any person before December 12, 2003;
    (2) The amount in controversy is more than $400,000 for a violation 
committed by a person other than an individual or small business 
concern on or after December 12, 2003;
    (3) The amount in controversy is more than $50,000 for a violation 
committed by an individual or a small business concern on or after 
December 12, 2003;
    (4) The action is in rem or another action in rem based on the same 
violation has been brought;
    (5) The action involves an aircraft subject to a lien that has been 
seized by the Government; or
    (6) Another action has been brought for an injunction based on the 
same violation.
    (c) Hazardous materials violations. The FAA may assess a civil 
penalty against any person who knowingly commits an act in violation of 
49 U.S.C. chapter 51 or a regulation prescribed or order issued under 
that chapter, under 49 U.S.C. 5123 and 49 CFR 1.47(k). An order 
assessing a civil penalty for a violation under 49 U.S.C. chapter 51, 
or a rule, regulation, or order issued thereunder, is issued only after 
the following factors have been considered:
    (1) The nature, circumstances, extent, and gravity of the 
violation;
    (2) With respect to the violator, the degree of culpability, any 
history of prior violations, the ability to pay, and any effect on the 
ability to continue to do business; and
    (3) Such other matters as justice may require.
* * * * *
    (e) Delegation of authority. (1) The authority of the Administrator 
under 49 U.S.C. 46301(d), 47531, and 5123, and 49 CFR 1.47(k) to 
initiate and assess civil penalties for a violation of those statutes 
or a rule, regulation, or order issued thereunder, is delegated to the 
Deputy Chief Counsel for Operations; the Assistant Chief Counsel for 
Enforcement; the Assistant Chief Counsel, Europe, Africa, and Middle 
East Area Office; the Regional Counsel; the Aeronautical Center 
Counsel; and the Technical Center Counsel.
    (2) The authority of the Administrator under 49 U.S.C. 5123, 49 CFR 
1.47(k), 49 U.S.C. 46301(d), and 49 U.S.C. 46305 to refer cases to the 
Attorney General of the United States, or the delegate of the Attorney 
General, for collection of civil penalties is delegated to the Deputy 
Chief Counsel for Operations; the Assistant Chief Counsel for 
Enforcement; Assistant Chief Counsel, Europe, Africa, and Middle East 
Area Office; the Regional Counsel; the Aeronautical Center Counsel; and 
the Technical Center Counsel.
    (3) The authority of the Administrator under 49 U.S.C. 46301(f) to 
compromise the amount of a civil penalty imposed is delegated to the 
Deputy Chief Counsel for Operations; the Assistant Chief Counsel for 
Enforcement; Assistant Chief Counsel, Europe, Africa, and Middle East 
Area Office; the Regional Counsel; the Aeronautical Center Counsel; and 
the Technical Center Counsel.
    (4) The authority of the Administrator under 49 U.S.C. 5123(e) and 
(f) and 49 CFR 1.47(k) to compromise the amount of a civil penalty 
imposed is delegated to the Deputy Chief Counsel for Operations; the 
Assistant Chief Counsel for Enforcement; Assistant Chief Counsel, 
Europe, Africa, and Middle East Area Office; the Regional Counsel; the 
Aeronautical Center Counsel; and the Technical Center Counsel.
    (f) Notice of proposed civil penalty. A civil penalty action is 
initiated by sending a notice of proposed civil penalty to the person 
charged with a violation or on the agent for service for the person 
under 49 U.S.C. 46103. * * *
* * * * *
    (l) Collection of civil penalties. If an individual does not pay a 
civil penalty imposed by an order assessing civil penalty or other 
final order, the Administrator may take action provided under the law 
to collect the penalty.
    (m) Exhaustion of administrative remedies and judicial review. (1) 
Cases under the FAA statute. A party may petition for review only of a 
final decision and order of the FAA decisionmaker to the courts of 
appeals of the United States for the circuit in which the individual 
charged resides or has his or her principal place of business or the 
United States Court of Appeals for the District of Columbia Circuit, 
under 49 U.S.C. 46110, 46301(d)(6), and 46301(g). Neither an initial 
decision nor order issued by an administrative law judge that has not 
been appealed to the FAA decisionmaker, nor an order compromising a 
civil penalty action, may be appealed under those sections.
    (2) Cases under the Federal hazardous materials transportation law. 
A party may seek judicial review only of a final decision and order of 
the FAA decisionmaker involving a violation of the Federal hazardous 
materials transportation law or a regulation or order issued thereunder 
to an appropriate district court of the United States, under 5 U.S.C. 
703 and 704 and 28 U.S.C. 1331. Neither an initial decision or order 
issued by an administrative law judge that has not been appealed to the 
FAA decisionmaker, nor an order compromising a civil penalty action, 
may be appealed under these sections.
    (n) Compromise. The FAA may compromise the amount of any civil 
penalty imposed under this section, under 49 U.S.C. 5123(e), 46301(f), 
46302(b), 46303(b), or 46318 at any time before referring the action to 
the United States Attorney General, or the delegate of the Attorney 
General, for collection.
    (1) An agency attorney may compromise any civil penalty action 
where a person charged with a violation agrees to pay a civil penalty 
and the FAA agrees not to make a finding of violation. Under such 
agreement, a

[[Page 59497]]

compromise order is issued following the payment of the agreed-on 
amount or the signing of a promissory note. The compromise order states 
the following:
    (i) The person has paid a civil penalty or has signed a promissory 
note providing for installment payments.
* * * * *

0
5. Add Sec.  13.18 to Part 13 to read as follows:


Sec.  13.18  Civil penalties: Administrative assessment against an 
individual acting as a pilot, flight engineer, mechanic, or repairman.

    (a) General. (1) This section applies to each action in which the 
FAA seeks to assess a civil penalty by administrative procedures 
against an individual acting as a pilot, flight engineer, mechanic, or 
repairman, under 49 U.S.C. 46301(d)(5), for a violation listed in 49 
U.S.C. 46301(d)(2). This section does not apply to a civil penalty 
assessed for violation of 49 U.S.C. chapter 51, or a rule, regulation, 
or order issued thereunder.
    (2) District court jurisdiction. Notwithstanding the provisions of 
paragraph (a)(1) of this section, the United States district courts 
have exclusive jurisdiction of any civil penalty action involving an 
individual acting as a pilot, flight engineer, mechanic, or repairman 
for violations described in that paragraph, under 49 U.S.C. 
46301(d)(4), if:
    (i) The amount in controversy is more than $50,000.
    (ii) The action involves an aircraft subject to a lien that has 
been seized by the Government; or
    (iii) Another action has been brought for an injunction based on 
the same violation.
    (b) Definitions. As used in this part, the following definitions 
apply:
    (1) Flight engineer means an individual who holds a flight engineer 
certificate issued under part 63 of this chapter.
    (2) Individual acting as a pilot, flight engineer, mechanic, or 
repairman means an individual acting in such capacity, whether or not 
that individual holds the respective airman certificate issued by the 
FAA.
    (3) Mechanic means an individual who holds a mechanic certificate 
issued under part 65 of this chapter.
    (4) Pilot means an individual who holds a pilot certificate issued 
under part 61 of this chapter.
    (5) Repairman means an individual who holds a repairman certificate 
issued under part 65 of this chapter.
    (c) Delegation of authority. (1) The authority of the Administrator 
under 49 U.S.C. 46301(d)(5), to initiate and assess civil penalties is 
delegated to the Chief Counsel; the Deputy Chief Counsel for 
Operations; the Assistant Chief Counsel for Enforcement; Assistant 
Chief Counsel, Europe, Africa, and Middle East Area Office; the 
Regional Counsel; the Aeronautical Center Counsel; and the Technical 
Center Counsel.
    (2) The authority of the Administrator to refer cases to the 
Attorney General of the United States, or the delegate of the Attorney 
General, for collection of civil penalties is delegated to the Chief 
Counsel; the Deputy Chief Counsel for Operations; the Assistant Chief 
Counsel for Enforcement; Assistant Chief Counsel, Europe, Africa, and 
Middle East Area Office; the Regional Counsel; the Aeronautical Center 
Counsel; and the Technical Center Counsel.
    (3) The authority of the Administrator to compromise the amount of 
a civil penalty under 49 U.S.C. 46301(f) is delegated to the Chief 
Counsel; the Deputy Chief Counsel for Operations; the Assistant Chief 
Counsel for Enforcement; Assistant Chief Counsel, Europe, Africa, and 
Middle East Area Office; the Regional Counsel; the Aeronautical Center 
Counsel; and the Technical Center Counsel.
    (d) Notice of proposed assessment. A civil penalty action is 
initiated by sending a notice of proposed assessment to the individual 
charged with a violation specified in paragraph (a) of this section. 
The notice of proposed assessment contains a statement of the charges 
and the amount of the proposed civil penalty. The individual charged 
with a violation may do the following:
    (1) Submit the amount of the proposed civil penalty or an agreed-on 
amount, in which case either an order of assessment or a compromise 
order will be issued in that amount.
    (2) Answer the charges in writing.
    (3) Submit a written request for an informal conference to discuss 
the matter with an agency attorney and submit relevant information or 
documents.
    (4) Request that an order be issued in accordance with the notice 
of proposed assessment so that the individual charged may appeal to the 
National Transportation Safety Board.
    (e) Failure to respond to notice of proposed assessment. An order 
of assessment may be issued if the individual charged with a violation 
fails to respond to the notice of proposed assessment within 15 days 
after receipt of that notice.
    (f) Order of assessment. An order of assessment, which assesses a 
civil penalty, may be issued for a violation described in paragraph (a) 
of this section after notice and an opportunity to answer any charges 
and be heard as to why such order should not be issued.
    (g) Appeal. Any individual who receives an order of assessment 
issued under this section may appeal the order to the National 
Transportation Safety Board. The appeal stays the effectiveness of the 
Administrator's order.
    (h) Exhaustion of administrative remedies. An individual 
substantially affected by an order of the NTSB or the Administrator may 
petition for review only of a final decision and order of the National 
Transportation Safety Board to a court of appeals of the United States 
for the circuit in which the individual charged resides or has his or 
her principal place of business or the United States Court of Appeals 
for the District of Columbia Circuit, under 49 U.S.C. 46110 and 
46301(d)(6). Neither an order of assessment that has not been appealed 
to the National Transportation Board, nor an order compromising a civil 
penalty action, may be appealed under those sections.
    (i) Compromise. The FAA may compromise any civil penalty action 
initiated under this section, in accordance with 49 U.S.C. 46301(f).
    (1) An agency attorney may compromise any civil penalty action 
where an individual charged with a violation agrees to pay a civil 
penalty and the FAA agrees to make no finding of violation. Under such 
agreement, a compromise order is issued following the payment of the 
agreed-on amount or the signing of a promissory note. The compromise 
order states the following:
    (i) The individual has paid a civil penalty or has signed a 
promissory note providing for installment payments;
    (ii) The FAA makes no finding of violation; and
    (iii) The compromise order will not be used as evidence of a prior 
violation in any subsequent civil penalty proceeding or certificate 
action proceeding.
    (2) An agency attorney may compromise the amount of any civil 
penalty proposed or assessed in an order.
    (j) Payment. (1) An individual must pay a civil penalty by:
    (i) Sending a certified check or money order, payable to the 
Federal Aviation Administration, to the FAA office identified in the 
order of assessment, or
    (ii) Making an electronic funds transfer according to the 
directions specified in the order of assessment.
    (2) The civil penalty must be paid within 30 days after service of 
the order of assessment, unless an appeal is filed with the National 
Transportation Safety Board. The civil penalty must be paid within 30 
days after a final order of the

[[Page 59498]]

Board or the Court of Appeals affirms the order of assessment in whole 
or in part.
    (k) Collection of civil penalties. If an individual does not pay a 
civil penalty imposed by an order of assessment or other final order, 
the Administrator may take action provided under the law to collect the 
penalty.

0
6. In Sec.  13.201 remove paragraph (c) and revise paragraph (a) to 
read as follows:


Sec.  13.201  Applicability.

    (a) This subpart applies to all civil penalty actions initiated 
under Sec.  13.16 of this part in which a hearing has been requested.
* * * * *

0
7. In Sec.  13.233 revise paragraphs (b) introductory text, (1) and 
(3), and the first sentence of paragraph (j) introductory text to read 
as follows:


Sec.  13.233  Appeal from initial decision.

* * * * *
    (b) Issues on appeal. In any appeal from a decision of an 
administrative law judge, the FAA decisionmaker considers only the 
following issues:
    (1) Whether each finding of fact is supported by a preponderance of 
reliable, probative, and substantial evidence;
* * * * *
    (3) Whether the administrative law judge committed any prejudicial 
errors that support the appeal.
* * * * *
    (j) FAA decisionmaker's decision on appeal. The FAA decisionmaker 
will review the record, the briefs on appeal, and the oral argument, if 
any, when considering the issues on appeal. * * *
* * * * *

    Issued in Washington, DC, on September 19, 2004.
Marion C. Blakey,
Administrator.
[FR Doc. 04-22276 Filed 10-1-04; 8:45 am]
BILLING CODE 4910-13-P


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