61990 Federal Register / Vol. 79, No. 200 / Thursday, October 16, 2014 / Rules and Regulations 

1Civil Penalty Inflation Adjustment for 

Commercial Space Adjudications, 75 FR 30690 

(June 2, 2010). 2See Bureau of Labor Statistics, CPI Detailed 

Report: Data for June 2013, Table 1, which may be 

found at http://www.bls.gov/cpi/cpid1306.pdf. 3See Bureau of Labor Statistics, CPI Detailed 

Report: Data for June 2010, Table 1, which may be 

found at http://www.bls.gov/cpi/cpid1006.pdf. 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 406 

[Docket No. FAA–2014–0822; Amdt. No. 

406–8] 

RIN 2120–AK55 

Civil Penalty Inflation Adjustment for 

Commercial Space Adjudications; 

Second Amendment 

AGENCY: Federal Aviation 

Administration, DOT. 

ACTION: Immediately adopted final rule. 

SUMMARY: This final rule is the second 

mandatory inflation-based adjustment to 

the maximum civil penalty authorized 

for violations of the Commercial Space 

Launch Act of 1984, as amended. This 

adjustment is done to bring the 

authorized penalty for violations into 

compliance with the requirements of the 

Federal Civil Penalties Inflation 

Adjustment Act of 1990, as amended by 

the Debt Collection Improvement Act of 

1996. 

DATES: Effective November 17, 2014. 

FOR FURTHER INFORMATION CONTACT: Alex 

Zektser, General Attorney, Office of the 

Chief Counsel, International Law, 

Legislation, and Regulations Division, 

AGC–200, Federal Aviation 

Administration, 800 Independence 

Avenue SW., Washington, DC 20591; 

telephone (202) 267–3073; email 

Alex.Zektser@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Authority for This Rulemaking and 

Applicable Statutes 

The statute under which the Secretary 

of Transportation regulates commercial 

space transportation, 51 U.S.C. Subtitle 

V, sections 50901–50923 (chapter 509), 

provides for the Department of 

Transportation (DOT), and, through 

delegation, the Federal Aviation 

Administration (FAA) to impose civil 

penalties on persons who violate 

chapter 509, a regulation issued under 

chapter 509, or any term or condition of 

a license or permit issued or transferred 

under chapter 509. 51 U.S.C. 50906(h)– 

(i), 50917. 

This rule implements the Federal 

Civil Penalties Inflation Adjustment Act 

of 1990 (FCPIAA), Public Law (Pub. L.) 

101–410, as amended by the Debt 

Collection Improvement Act (DCIA) of 

1996, Public Law 104–134, codified at 

28 U.S.C. 2461 note. 

The FCPIAA and DCIA require 

Federal agencies to adjust minimum and 

maximum civil penalty amounts for 

inflation to preserve their deterrent 

impact. Under these laws, each agency 

must make an initial inflationary 

adjustment for all applicable civil 

monetary penalties, and further adjust 

these penalties at least once every four 

years. The agency must adjust the 

amount of the penalty using a strict 

statutory formula discussed in more 

detail below. 

Prior Rulemakings 

This rule is the FAA’s second 

adjustment to the maximum civil 

penalty found in 14 CFR part 406 which 

governs commercial space 

transportation adjudications. The initial 

adjustment to the maximum civil 

penalty found in 14 CFR part 406 

occurred in 2010.1

Background 

The FCPIAA determines inflationary 

adjustments by increasing civil 

penalties by a cost-of-living adjustment 

(COLA). Under the FCPIAA, the COLA 

for each civil penalty is the percentage 

by which the U.S. Department of Labor’s 

Consumer Price Index for all-urban 

consumers (CPI–U) for the month of 

June of the calendar year preceding the 

adjustment exceeds the CPI–U for the 

month of June of the calendar year in 

which the amount of such civil penalty 

was last set or adjusted pursuant to the 

FCPIAA. The FCPIAA contains specific 

rules for rounding the inflationary 

increase. 

Method of Calculation 

Section 406.9 of 14 CFR currently 

imposes a maximum civil penalty of 

$110,000 for violations of chapter 509, 

a regulation proscribed under chapter 

509, or any term or condition of a 

license or permit issued or transferred 

under chapter 509. To determine the 

appropriate adjustment that must be 

made pursuant to the FCPIAA, we first 

find the CPI–U for June of the calendar 

year preceding the year of adjustment is 

determined. Because the adjustment in 

this case is being made in 2014, we will 

use the June of 2013 CPI–U, which is 

233.504.2 Next, we determine the 

CPI–U for June of the year the civil 

penalty was last adjusted. Because the 

civil penalty was last adjusted in 2010, 

we would use the CPI–U for June of 

2010, which is 217.965.3

Next, we use the above CPI–U 

numbers to calculate the COLA. To do 

this, we subtract the CPI–U for June 

2010 (217.965) from the CPI–U of June 

2013 (233.504). We then divide the 

resulting difference (15.539) by the 

CPI–U for June 2010 (217.965). The 

resulting quotient (.07129) is then 

multiplied by 100 yielding a COLA of 

7.129%. 

To calculate the raw inflationary 

increase we multiply the current 

maximum civil penalty ($110,000) by 

the COLA (7.129%). This provides a raw 

inflation increase of $7,842. Next, we 

round the raw inflation amounts by the 

statutory rounding formula found in 

Section 5(a) of the FCPIAA. 

Determination of the proper rounding 

formula depends on the current amount 

of the civil penalty at the time the 

calculation is made, not the size of the 

raw inflationary increase. The 

applicable rounding formula for the 

existing civil penalty of $110,000 would 

be that ‘‘[a]ny increase . . . is rounded 

to the nearest . . . [m]ultiple of $10,000 

in the case of penalties greater than 

$100,000 but less than or equal to 

$200,000 . . .’’ Thus, the raw increase 

of $7,842 becomes $10,000 after being 

rounded to the nearest $10,000. Finally, 

the increase of $10,000 is added to the 

current civil penalty $110,000, resulting 

in an inflation-adjusted civil penalty of 

$120,000. 

Good Cause for Not Having Notice and 

Comment 

Under the Administrative Procedure 

Act, 5 U.S.C. 553(b)(B), a final rule may 

be issued without public notice and 

comment if the agency finds good cause 

that notice and comment are 

impractical, unnecessary, or contrary to 

public interest. Good cause exists in this 

case to dispense with public notice and 

comment because adjustments to civil 

penalties for inflation are required by 

Congress, as set forth in Section 5 of the 

FCPIAA, in order to maintain the 

deterrent effect of civil penalties and 

promote compliance with the law. The 

FCPIAA serves as a Congressional 

mandate and the FAA may not exercise 

any discretion or policy judgments. The 

FAA also has no discretion as to the 

amount of the adjustment because the 

amount of the adjustment is determined 

using a strict statutory formula. Since 

the FCPIAA does not provide the FAA 

with any discretion regarding any aspect 

of this rulemaking, the FAA would be 

unable to make any changes to this rule 

in response to public comment. 

Accordingly, public comment is 

unnecessary in this case. 

Paperwork Reduction Act 

The Paperwork Reduction Act of 

1995, 44 U.S.C. 3507(d), requires that 


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Federal Register / Vol. 79, No. 200 / Thursday, October 16, 2014 / Rules and Regulations 61991 

the FAA consider the impact of 

paperwork and other information 

collection burdens imposed on the 

public. The FAA has determined that 

there are no current or new 

requirements for information collection 

associated with this rule. 

International Compatibility 

In keeping with U.S. obligations 

under the Convention on International 

Civil Aviation, it is FAA policy to 

conform to International Civil Aviation 

Organization (ICAO) Standards and 

Recommended Practices to the 

maximum extent practicable. The FAA 

has determined that there are no ICAO 

Standards and Recommended Practices 

that correspond to these regulations. 

Regulatory Evaluation, Regulatory 

Flexibility Determination, International 

Trade Impact Assessment, and 

Unfunded Mandates Assessment 

Changes to Federal regulations must 

undergo several economic analyses. 

First, Executive Order 12866 directs that 

each Federal agency shall propose or 

adopt a regulation only upon a reasoned 

determination that the benefits of the 

intended regulations justify its costs. 

Second, the Regulatory Flexibility Act 

of 1980 (RFA), Public Law 96–354, 

codified at 5 U.S.C. 601–612, as 

amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996, Public Law 104–121, requires 

agencies to analyze the economic 

impact of regulatory changes on small 

entities. Third, the Trade Agreements 

Act of 1999 (Trade Act), Public Law 96– 

39, codified at 19 U.S.C. 2501–2581, 

prohibits agencies from setting 

standards that create unnecessary 

obstacles to the foreign commerce of the 

U.S. In developing U.S. standards, the 

Trade Act requires agencies to consider 

international standards and, where 

appropriate, that they be the basis of 

U.S. standards. Fourth, the Unfunded 

Mandates Reform Act of 1995, (Pub. L. 

104–4), codified at 2 U.S.C. 658, 1501– 

03, and 1531–34, 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 $100 million or more, 

in any one year (adjusted for inflation). 

DOT Order 2100.5 prescribes policies 

and procedures for simplification, 

analysis, and review of regulations. If 

the expected impact is so minimal that 

a proposed or final rule does not 

warrant a full evaluation, this order 

permits that a statement to that effect 

and the basis for it be included in the 

preamble if a full regulatory evaluation 

of the cost and benefits is not prepared. 

Such a determination has been made for 

this final rule. The reasoning for this 

determination is as follows. This rule 

adjusts for inflation the maximum civil 

penalty for violations of the Commercial 

Space Launch Act of 1984, to be in 

compliance with the Federal Civil 

Penalties Inflation Adjustment Act of 

1990. This inflation adjustment is an 

economic transfer and not a social cost. 

Regulatory Flexibility Determination 

The Regulatory Flexibility Act of 1980 

(Pub. L. 96–354) (RFA) establishes ‘‘as a 

principle of regulatory issuance that 

agencies shall endeavor, consistent with 

the objectives of the rule and of 

applicable statutes, to fit regulatory and 

informational requirements to the scale 

of the businesses, organizations, and 

governmental jurisdictions subject to 

regulation. To achieve this principle, 

agencies are required to solicit and 

consider flexible regulatory proposals 

and to explain the rationale for their 

actions to assure that such proposals are 

given serious consideration.’’ The RFA 

covers a wide-range of small entities, 

including small businesses, not-forprofit organizations, and small 

governmental jurisdictions. 

Agencies must perform a review to 

determine whether a rule will have a 

significant economic impact on a 

substantial number of small entities. If 

the agency determines that it will, the 

agency must prepare a regulatory 

flexibility analysis as described in the 

RFA. 

However, if an agency determines that 

a rule is not expected to have a 

significant economic impact on a 

substantial number of small entities, 

section 605(b) of the RFA provides that 

the head of the agency may so certify 

and a regulatory flexibility analysis is 

not required. The certification must 

include a statement providing the 

factual basis for this determination, and 

the reasoning should be clear. 

As already noted, this rule adjusts for 

inflation only, as required by the 

Federal Civil Penalties Inflation 

Adjustment Act of 1990. Therefore, as 

FAA Administrator, I certify that this 

rule will not have a significant 

economic impact on a substantial 

number of small entities. 

International Trade Impact Assessment 

The Trade Agreements Act of 1979 

(Pub. L. 96–39) prohibits Federal 

agencies from establishing any 

standards or engaging in related 

activities that create unnecessary 

obstacles to the foreign commerce of the 

United States. Legitimate domestic 

objectives, such as safety, are not 

considered unnecessary obstacles. The 

statute also requires consideration of 

international standards and, where 

appropriate, that they be the basis for 

U.S. standards. 

The FAA has assessed the potential 

effect of this final rule and determined 

that it would impose identical inflation 

adjusted civil penalties on domestic and 

international entities that violate 14 CFR 

part 406, and thus would have a neutral 

trade impact. Furthermore, the 

inflationary adjustment is a legitimate 

domestic objective preserving the 

existing deterrent impact of 51 U.S.C. 

subtitle V, chapter 509. Therefore, we 

have determined that this rule will 

result in a neutral impact on 

international trade. 

Unfunded Mandates Assessment 

Title II of the Unfunded Mandates 

Reform Act of 1995 (Pub. L. 104–4) 

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 with the 

base year 1995) in any one 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 $151 

million in lieu of $100 million. 

Because this final rule only increases 

a civil penalty by $10,000, as required 

by FCPIAA, it does not contain a 

mandate that meets this threshold 

amount. Therefore, the requirements of 

Title II of the act do not apply. 

Executive Order 13132, Federalism 

The FAA has analyzed this final rule 

under the principles and criteria of 

Executive Order 13132, Federalism. The 

FAA determined that this action would 

not have a substantial direct effect on 

the States, or the relationship between 

the national government and the States, 

or on the distribution of power and 

responsibilities among the various 

levels of government. Therefore, the 

FAA has determined that this final rule 

does not have federalism implications. 

Environmental Analysis 

FAA Order 1050.1E defines FAA 

actions that are categorically excluded 

from preparation of an environmental 

assessment or environmental impact 

statement under the National 

Environmental Policy Act (NEPA) in the 

absence of extraordinary circumstances. 

The FAA has determined this final rule 

qualifies for the categorical exclusion 

identified in Chapter 3, paragraph 312d, 


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61992 Federal Register / Vol. 79, No. 200 / Thursday, October 16, 2014 / Rules and Regulations 

and involves no extraordinary 

circumstances. 

Regulations That Significantly Affect 

Energy Supply, Distribution, or Use 

The FAA has analyzed this final rule 

under Executive Order 13211, Actions 

Concerning Regulations that 

Significantly Affect Energy Supply, 

Distribution, or Use (May 18, 2001). We 

have determined that it is not a 

‘‘significant energy action’’ under the 

executive order because it is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866, and it is not 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy. 

Availability of Rulemaking Documents 

You can get an electronic copy of 

rulemaking documents using the 

Internet by— 

1. Searching the Federal eRulemaking 

Portal (http://www.regulations.gov); 

2. Visiting the FAA’s Regulations and 

Policies Web page at http://

www.faa.gov/regulations_policies/

rulemaking/; or 

3. Accessing the Government Printing 

Office’s Web page at http://

www.gpoaccess.gov/fr/index.html. 

You can also get a copy by sending 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 amendment number or 

docket 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://www.regulations.gov. 

Small Business Regulatory Enforcement 

Fairness Act 

The Small Business Regulatory 

Enforcement Fairness Act (SBREFA) of 

1996 requires the 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 your local FAA official, or 

the person listed under the FOR FURTHER

INFORMATION CONTACT heading at the 

beginning of the preamble. You can find 

out more about SBREFA on the Internet 

at http://www.faa.gov/regulationspolicies/rulemaking/sbre-act/. 

List of Subjects in 14 CFR Part 406 

Administrative procedure and review, 

Commercial space transportation, 

Enforcement, Investigations, Penalties, 

Rules of adjudication. 

The Amendment 

In consideration of the Foregoing, the 

Federal Aviation Administration 

amends part 406 of Title 14, Code of 

Federal Regulations as follows: 

PART 406—INVESTIGATIONS, 

ENFORCEMENT, AND 

ADMINISTRATIVE REVIEW 

■ 1. The authority citation for part 406 

continues to read as follows: 

Authority: 51 U.S.C. 50901–50923. 

■ 2. Amend § 406.9 by revising 

paragraph (a) to read as follows: 

§ 406.9 Civil penalties. 

(a) Civil penalty liability. Under 51 

U.S.C. 50917(c), a person found by the 

FAA to have violated a requirement of 

the Act, a regulation issued under the 

Act, or any term or condition of a 

license or permit issued or transferred 

under the Act, is liable to the United 

States for a civil penalty of not more 

than $120,000 for each violation, as 

adjusted for inflation. A separate 

violation occurs for each day the 

violation continues. 

* * * * * 

Issued under authority provided by 49 

U.S.C. 106(f) and 51 U.S.C. 50904–50905 in 

Washington, DC, on September 29, 2014. 

Michael P. Huerta, 

Administrator. 

[FR Doc. 2014–24528 Filed 10–15–14; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 223 

RIN 1510–AB27 

Surety Companies Doing Business 

With the United States 

AGENCY: Bureau of the Fiscal Service, 

Fiscal Service, Treasury. 

ACTION: Final rule. 

SUMMARY: The Department of the 

Treasury, Bureau of the Fiscal Service 

(Treasury) administers the Federal 

corporate surety program. Treasury 

issues certificates of authority to 

qualified sureties to underwrite and 

reinsure Federal bond obligations. 

Bonds underwritten by Treasurycertified sureties satisfy bonding 

requirements, provided such bonds are 

accepted by the agency bond-approving 

official. Treasury is amending its 

regulation to expressly provide that an 

agency may decline to accept a bond 

underwritten by a Treasury-certified 

surety for cause, provided the agency 

satisfies the requirements specified in 

the final rule. Treasury is also revising 

the procedures it uses to adjudicate any 

complaint received from an agency 

requesting that a surety’s certificate of 

authority be revoked. 

DATES: This rule is effective December 

15, 2014. 

ADDRESSES: You can download this rule 

at the following Web site: http://

www.fiscal.treasury.gov/fsreports/ref/

suretyBnd/surety_home.htm. You may 

also inspect and copy this rule at: 

Treasury Department Library, 1500 

Pennsylvania Avenue NW., Washington, 

DC 20220. 

Before visiting, you must call (202) 

622–0990 for an appointment. 

In accordance with the federal 

eRulemaking Initiative, the Bureau of 

the Fiscal Service publishes rulemaking 

information on http://

www.regulations.gov. 

Regulations.gov offers the public the 

ability to comment on, search, and view 

publicly available rulemaking materials, 

including comments received on rules. 

FOR FURTHER INFORMATION CONTACT: 

Melvin Saunders, Manager, Surety Bond 

Branch, Bureau of the Fiscal Service, at 

(202) 874–6850 or melvin.saunders@

fiscal.treasury.gov, or James J. Regan, 

Senior Counsel, Bureau of the Fiscal 

Service, at (202) 874–6680 or 

james.regan@fiscal.treasury.gov. 

SUPPLEMENTARY INFORMATION: On March 

17, 2011, Treasury published a notice of 

proposed rulemaking (NPRM) at 76 FR 

14592, requesting comment on a 

proposed amendment to 31 CFR part 

223 (Part 223), which implements the 

requirements of 31 U.S.C. 9304–9308. 

The NPRM proposed two main 

amendments to Part 223. First, under 

NPRM § 223.17, Treasury proposed to 

clarify the circumstances under which a 

Federal agency bond-approving official 

could decline to accept a bond 

underwritten by a Treasury-certified 

surety. Second, under NPRM § 223.20, 

Treasury proposed to clarify the 

procedures and standard of review to be 

used by Treasury in adjudicating any 

complaint submitted by an agency to 

Treasury requesting that a surety’s 

certificate be revoked. 

After consideration of the comments 

received, Treasury is amending its 


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