[Federal Register Volume 62, Number 30 (Thursday, February 13, 1997)]
[Rules and Regulations]
[Pages 6719-6721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3238]


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DEPARTMENT OF TRANSPORTATION
14 CFR Part 383

49 CFR Part 31

[OST Docket No. OST-97-2116]
RIN 2105-AC63


Program Fraud Civil Remedies; Civil Penalties

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule.

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SUMMARY: In accordance with Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended by the Debt Collection Improvement 
Act of 1996, this final rule incorporates the penalty inflation 
adjustments for civil money penalties imposed by the Office of the 
Secretary of Transportation.

EFFECTIVE DATE: This rule is effective on March 17, 1997.

FOR FURTHER INFORMATION CONTACT: Mark A. Holmstrup, Senior Trial 
Attorney, Office of Aviation Enforcement and Proceedings (C-70), 
Department of Transportation, 400 Seventh Street, S.W., Washington, 
D.C. 20590, (202) 366-9349.

SUPPLEMENTARY INFORMATION:

I. The Debt Collection Improvement Act of 1996

    In an effort to maintain the remedial impact of civil money 
penalties (CMPs) and promote compliance with the law, the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410) was 
amended by the Debt Collection Improvement Act of 1996 (Pub.L. 104-134, 
section 31001) to require Federal agencies to regularly adjust certain 
CMPs for inflation. As amended, the law requires each agency to make an 
initial inflationary adjustment for all applicable CMPs, and to make 
further adjustments at least once every four years thereafter for these 
penalty amounts.
    The Debt Collection Improvement Act of 1996 further stipulates that 
(i) any resulting increases in a CMP due to the calculated inflation 
adjustments should apply only to the violations that occur after 
October 23, 1996--180 days after the date of enactment of the statute--
and (ii) the initial adjustment of a CMP under the Act may not exceed 
10 percent of that CMP. Penalties that fall under the Internal Revenue 
Code of 1986, the Tariff Act of 1930, the Occupational Safety and 
Health Act of 1970, and the Social Security Act are specifically exempt 
from the requirements of the Act.

Method of Calculation

    Under the Federal Civil Penalties Inflation Adjustment Act of 1990, 
as amended, the inflation adjustment for each applicable CMP is 
determined by increasing the maximum CMP amount per violation by the 
cost-of-living adjustment. The ``cost-of-living'' adjustment is defined 
as the percentage of each CMP by which the Consumer Price Index (CPI) 
for the month of June of the calendar year preceding the adjustment 
exceeds the CPI for the month of June of the calendar year in which the 
amount of the CMP (if any) was last set or adjusted in accordance with 
the law. Any calculated increase under this adjustment is subject to a 
specific rounding formula set forth in the 1990 statute.

II. OST Civil Money Penalties Affected by This Adjustment

    There are two penalty authorities under our jurisdiction, as 
described below, for which adjustments are required and are now being 
made.

Title 49 of the United States Code (Transportation)

    Section 46301(a)(1) of Title 49 (formerly section 1471(a) of the 
Federal Aviation Act, 49 U.S.C. App. Sec. 901(a)) sets forth a CMP of 
not more than $1,000 for persons who violate certain provisions of 
Title 49, Subtitle VII (Aviation Programs). The penalty was enacted in 
1962 and has not been increased with respect to matters within the 
jurisdiction of the Office of the Secretary.
    Based on the penalty amount inflation factor calculation, derived 
from dividing the June 1995 CPI by the CPI from June 1962, after 
rounding and applying the 10 percent maximum ceiling, we are adjusting 
the maximum penalty amount for the CMP under Section 46301(a)(1) to 
$1,100 per violation.

The Program Fraud Civil Remedies Act of 1986

    In 1986, sections 6103 and 6104 of the Omnibus Budget 
Reconciliation Act of 1986 (Pub. L. 99-501) set forth the Program Fraud 
Civil Remedies Act of 1986 (PFCRA). Specifically, this authority 
established a CMP and an

[[Page 6720]]

assessment against any individual who-with knowledge or reason to know-
makes, presents or submits a false, fictitious or fraudulent claim or 
statement to the Department. The Department's regulations--published in 
the Federal Register (53 FR 880, January 14, 1988) and codified at 49 
CFR Part 31--set forth a CMP of up to $5,000 for each false claim or 
statement made to the Department.
    Based on the penalty amount inflation factor calculation, derived 
from dividing the June 1995 CPI by the CPI from June 1986, after 
rounding and applying the 10 percent maximum ceiling, we are adjusting 
the maximum penalty amount for this CMP to $5,500 per violation.

III. Waiver of Proposed Rulemaking

    In developing this final rule, we are waiving the usual notice of 
proposed rulemaking and public comment procedures set forth in the 
Administrative Procedure Act (APA) (5 U.S.C. Sec. 553). The APA 
provides an exception to the notice and comment procedures when an 
agency finds there is good cause for dispensing with such procedures on 
the basis that they are impracticable, unnecessary or contrary to the 
public interest. We have determined that under 5 U.S.C. 
Sec. 553(b)(3)(B) good cause exists for dispensing with the notice of 
proposed rulemaking and public comment procedures for this rule. 
Specifically, this rulemaking comports and is consistent with the 
statutory authority set forth in the Debt Collection Improvement Act of 
1996, with no issues of policy discretion. Accordingly, we believe that 
opportunity for prior comment is unnecessary and contrary to the public 
interest, and are issuing these revised regulations as a final rule 
that will apply to all future cases under this authority.

IV. Regulatory Impact Statement

Executive Order 12866

    This final rule is exempt from review by the Office of Management 
and Budget (OMB) in accordance with the provisions of Executive Order 
12866, because it is limited to the adoption of statutory language, 
without interpretation. As indicated above, the provisions contained in 
this final rulemaking set forth the inflation adjustments in compliance 
with the Debt Collection Improvement Act of 1996 for specific 
applicable civil money penalties under the authority of the OST. The 
great majority of persons addressed through these regulations do not 
engage in such prohibited activities and practices, and as a result, we 
believe that any aggregate economic impact of these revised regulations 
will be minimal, affecting only those limited few who may engage in 
prohibited behavior in violation of the statutes or regulations. As 
such, this final rule and the inflation adjustment contained therein 
should have no effect on Federal or State expenditures.

Regulatory Flexibility Act

    In addition, we prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (5 U.S.C. 601-612), 
unless we certify that a regulation will not have a significant 
economic impact on a substantial number of small entities. While some 
penalties may have an impact on small entities, it is the nature of the 
violation and not the size of the entity that will result in an action 
by the OST, and the aggregate economic impact of this rulemaking on 
small business entities should be minimal, affecting only those few who 
have chosen to engage in prohibited arrangements and schemes in 
violation of statutory and regulatory intent.
    Therefore, we have concluded and certify that this final rule will 
not have a significant economic impact on a substantial number of small 
entities, and that a regulatory flexibility analysis is not required 
for this rulemaking.

Paperwork Reduction Act

    This final rule imposes no new reporting or record keeping 
requirements necessitating clearance by OMB.

List of Subjects

14 CFR Part 383

    Administrative practice and procedure, Penalties.

49 CFR Part 31

    Administrative practice and procedure, Fraud, Investigations, 
Organizations and functions, (Governmental agencies), Penalties.

    Accordingly, the Department of Transportation adds a Part 383 to 
Title 14, Subchapter D, of the Code of Federal Regulations and amends 
49 CFR Part 31, as set forth below:

TITLE 14--AERONAUTICS AND SPACE

CHAPTER II--OFFICE OF THE SECRETARY, DEPARTMENT OF TRANSPORTATION 
(AVIATION PROCEEDINGS)
    A new 14 CFR Part 383 is added to subchapter D to read as follows:

PART 383--CIVIL PENALTIES

Sec.
383.1 Basis and purpose.
383.2 Amount of penalty.

    Authority: 28 U.S.C. section 2461 note.


Sec. 383.1  Basis and purpose.

    (a) Basis. This part implements the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (Pub. L. 101-410), as amended by the 
Debt Collection Improvement Act of 1996 (Pub. L. 104-134, section 
31001). The Debt Collection Improvement Act of 1996 (Act) requires each 
agency head to adjust by regulation each civil monetary penalty 
provided by law by the inflation adjustment described under section 5 
of the Federal Civil Penalties Inflation Adjustment Act of 1990, as 
amended.
    (b) Purpose. This part increases the civil penalty liability amount 
listed under subsection (a)(1) of section 46301 of Title 49 of the 
United States Code.


Sec. 383.2  Amount of penalty.

    A person is liable to the United States Government for a civil 
penalty of not more than $1,100 for violations covered by this chapter 
and listed under subsection (a)(1) of section 46301 of Title 49 of the 
United States Code.<SUP>1
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    \1\ As adjusted in accordance with the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (Pub. L. 101-140), as amended by 
the Debt Collection Improvement Act of 1996 (Pub. L. 104-143, 
section 31001).
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TITLE 49--TRANSPORTATION

SUBTITLE A--OFFICE OF THE SECRETARY OF TRANSPORTATION

    49 CFR Part 31 is amended as set forth below:

PART 31--PROGRAM FRAUD CIVIL REMEDIES

    1. The authority citation for part 31 continues to read as follows:

    Authority: 31 U.S.C. 3801-3812.

    2. Section 31.3 is amended by revising paragraphs (a)(1) 
introductory text, (a)(1)(w), (b)(1) introductory text and and 
(b)(1)(ii) to read as follows:


Sec. 31.3  Basis for civil penalties and assessments.

    (a) Claims. (1) Except as provided in paragraph (c) of this 
section, any person who makes a claim that the person knows or has 
reason to know--
    * * *
    (iv) Is for payment for the provision of property or services which 
the person has not provided as claimed, shall be subject, in addition 
to any other remedy that may be prescribed by law, to a civil penalty 
of not more than $5,500 for each such claim.\1\

[[Page 6721]]

* * * * *
    (b) Statements. (1) Except as provided in paragraph (c) of this 
section, any person who makes a written statement that--* * *
    (ii) Contains, or is accompanied by, an express certification or 
affirmation of the truthfulness and accuracy of the contents of the 
statement, shall be subject, in addition to any other remedy that may 
be prescribed by law, to a civil penalty of not more than $5,500.<SUP>2
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    \2\ As adjusted in accordance with the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (Pub. L. 101-140), as amended by 
the Debt Collection Improvement Act of 1996 (Pub. L. 104-143, 
section 31001).
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* * * * *
    Issued this 3rd day of February, 1997, at Washington, D.C.
Federico Pena,
Secretary of Transportation.
[FR Doc. 97-3238 Filed 2-12-97; 8:45 am]
BILLING CODE 4910-62-P