Document ID: DOT-OST-2009-0092-0448
Agency: dot
Document Type: Rule
Title: Revisions to Civil Penalty Amounts
Posted Date: 2016-08-10T04:00Z

[Federal Register Volume 81, Number 154 (Wednesday, August 10, 2016)]
[Rules and Regulations]
[Pages 52763-52766]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19003]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 383

RIN 2105-AE51

Revisions to Civil Penalty Amounts

AGENCY: Office of the Secretary (OST), Department of Transportation 
(DOT).

ACTION: Interim final rule.

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SUMMARY: In accordance with the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015, the Department of 
Transportation is issuing an interim final rule to adjust for inflation 
the maximum civil penalty amounts for violations of certain aviation 
economic statutes and the rules and orders issued pursuant to these 
statutes.

DATES: The rule is effective August 10, 2016.

FOR FURTHER INFORMATION CONTACT: Stuart A. Hindman, Trial Attorney, 
Office of Aviation Enforcement and Proceedings, U.S. Department of 
Transportation, 1200 New Jersey Ave. SE., Washington, DC 20590, 202-
366-9342, 202-366-7152 (fax), stuart.hindman@dot.gov (email).

SUPPLEMENTARY INFORMATION:

I. Regulatory Information

    DOT is promulgating this interim final rule to ensure that the 
maximum civil penalty liability amounts set forth in 14 CFR part 383 
that may be assessed by the Department as a result of violations of 
certain economic provisions of Title 49 of the United States Code 
reflect the statutorily mandated maximums as adjusted for inflation. 
Pursuant to section 701 of the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 (the 2015 Act), DOT is required 
to promulgate a ``catch-up adjustment'' through an interim final rule. 
Public Law 114-74. The 2015 Act requires the Department to adjust 
certain civil penalty amounts and provides clear direction for how to 
adjust the civil penalties, which leaves the agency little room for 
discretion. By operation of the 2015 Act, DOT must publish the catch-up 
adjustment by July 1, 2016, and the new levels must take effect no 
later than August 1, 2016. For these reasons, pursuant to the 2015 Act 
and 5 U.S.C. 553(b)(3)(B), 553(d)(3), DOT finds that good cause exists 
for immediate implementation of this interim final rule without prior 
notice and comment and with an immediate effective date.

II. Background

    On November 2, 2015, the President signed into law the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015, 
which amended the Federal Civil Penalties Inflation Adjustment Act of 
1990 (the Inflation Adjustment Act), to improve the effectiveness of 
civil monetary penalties and to maintain their deterrent effect. The 
2015 Act requires agencies to: (1) Adjust the level of civil monetary 
penalties with an initial ``catch-up'' adjustment through an interim 
final rule (IFR); and (2) make subsequent annual adjustments for 
inflation.
    The method of calculating inflation adjustments in the 2015 Act 
differs substantially from the methods used in past inflation 
adjustment rulemakings conducted pursuant to the Inflation Adjustment 
Act. Previously, adjustments to civil penalty amounts were conducted 
under requirements that mandated significant rounding of figures. For 
example, a penalty increase

[[Page 52764]]

that was greater than $1,000, but less than or equal to $10,000 would 
be rounded to the nearest multiple of $1,000. While this allowed 
penalties to be kept at round numbers, it meant that penalties would 
often not be increased at all if inflation had increased but not by a 
large enough factor. Furthermore, increases to penalties were capped at 
10 percent. Over time, this formula caused penalties to lose value 
relative to total inflation.
    The 2015 Act has removed these rounding requirements; now, penalty 
amounts are simply rounded to the nearest $1. While this results in 
penalty amounts that are no longer round numbers, it does ensure that 
penalty amounts will be increased each year to a figure commensurate 
with the actual calculated inflation. Furthermore, the 2015 Act 
``resets'' the inflation calculations by excluding prior inflationary 
adjustments made under the Inflation Adjustment Act, which contributed 
to a decline in the real value of penalty levels. To do this, the 2015 
Act requires agencies to identify, for each penalty, the year and 
corresponding amount(s) for which the maximum penalty level or range of 
minimum and maximum penalties was originally enacted by Congress or 
last adjusted by statute or regulation, other than pursuant to the 
Inflation Adjustment Act. DOT has determined that the maximum levels 
for the civil penalties that may be assessed for violations of aviation 
economic statutes and regulations pursuant to 14 CFR part 383 were 
established by Vision 100--Century of Aviation Reauthorization Act of 
2003 (``Vision 100'') (Section 503, Pub. L. 108-176; 117 Stat. 2490, 
December 12, 2003), and have not been adjusted since, excluding 
Inflation Adjustment Act revisions.

III. Completing the Catch-Up Adjustment

    The table below shows the penalties that we are increasing pursuant 
to the 2015 Act. These calculations follow guidance by the Office of 
Management and Budget (OMB), M-16-06, ``Implementation of the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015,'' 
dated Feb. 24, 2016.
    In the first column, we have provided a description of the penalty. 
In the second column (``Citation,'') we have provided the United States 
Code (U.S.C.) statutory citation for the provision that authorizes that 
penalty. In the third column (``Current Penalty''), we have listed the 
existing penalty, and in the fourth column (``Baseline Penalty''), we 
have provided the amount of the penalty as enacted by Congress or 
changed through a mechanism other than pursuant to the Inflation 
Adjustment Act, which in the case of all five of these adjustments is 
by Vision 100. The multiplier that we have used to adjust from the CPI-
U of the year of this last adjustment (2003) to the CPI-U for the 
current year was provided by the Office of Management and Budget; it is 
1.28561. Multiplying the baseline penalty by the multiplier provides 
the ``New Penalty'' listed in the final column, rounded to the nearest 
dollar. In accordance with the 2015 Act and OMB memorandum M-16-06, 
however, DOT did not increase penalty levels by more than 150 percent 
of the corresponding levels in effect on November 2, 2015. The adjusted 
penalty is to be the lesser of either the preliminary new penalty 
arrived at via the multiplier or an amount equal to 250% of the current 
penalty. In the case of these five penalties, the lesser number was the 
figure that resulted from applying the multiplier.
    Where applicable, DOT has also made conforming edits to regulatory 
text. In addition, we are deleting a reference to the Debt Collection 
Improvement Act of 1996 in section 383.1(b) of the regulatory text. The 
Debt Collection Improvement Act of 1996 amended the Federal Civil 
Penalties Inflation Adjustment Act of 1990. Additionally, in the 
regulatory text for section 383.1(b) we are deleting the reference to 
the Inflation Adjustment Act because it has been amended by the 2015 
Act.
    Pursuant to the 2015 Act, in the event a violation took place prior 
to the effective date of the new penalty level, and the DOT assessed a 
penalty after the effective date, the new penalty level shall be 
assessed in a manner consistent with applicable law. The 2015 Act does 
not alter DOT's statutory authority, to the extent it exists, to assess 
penalties below the maximum level. As the 2015 Act applies to penalties 
assessed after the effective date of the applicable adjustment, the 
2015 Act adjusts penalties prospectively. The 2015 Act does not 
retrospectively change previously assessed or enforced penalties that 
DOT is actively collecting or has collected.

----------------------------------------------------------------------------------------------------------------
                                                                      Current        Base line
         Description                        Citation                  penalty         penalty       New penalty
----------------------------------------------------------------------------------------------------------------
General civil penalty for      49 U.S.C. 46301(a)(1)............         $27,500         $25,000         $32,140
 violations of certain
 aviation economic
 regulations and statutes.
General civil penalty for      49 U.S.C. 46301(a)(1)............           1,100           1,100           1,414
 violations of certain
 aviation economic
 regulations and statutes
 involving an individual or
 small business concern.
Civil penalties for            49 U.S.C. 46301(a)(5)(A).........          11,000          10,000          12,856
 individuals or small
 businesses for violations of
 most provisions of Chapter
 401 of Title 49, including
 the anti-discrimination
 provisions of sections 40127
 and 41705 and rules and
 orders issued pursuant to
 these provisions.
Civil penalties for            49 U.S.C. 46301(a)(5)(C).........           5,500           5,000           6,428
 individuals or small
 businesses for violations of
 49 U.S.C. 41719 and rules
 and orders issued pursuant
 to that provision.
Civil penalties for            49 U.S.C. 46301(a)(5)(D).........           2,750           2,500           3,214
 individuals or small
 businesses for violations of
 49 U.S.C. 41712 or consumer
 protection rules and orders
 issued pursuant to that
 provision.
----------------------------------------------------------------------------------------------------------------

[[Page 52765]]

Regulatory Analysis and Notices

A. Executive Orders 12866 and 13563 and DOT Regulatory Policies and 
Procedures

    This interim final rule has been evaluated in accordance with 
existing policies and procedures and is considered not significant 
under Executive Orders 12866 and 13563 or DOT's Regulatory Policies and 
Procedures; therefore, the rule has not been reviewed by the Office of 
Management and Budget (OMB) under Executive Order 12866.
    The increase of the maximum civil penalty will impact entities and 
individuals that are found to be in violation of certain aviation 
economic and consumer protection statutes, rules, and orders. There is 
no direct cost to any regulated entity or individual unless the entity 
or individual is found to have committed a violation. Furthermore, the 
economic impact of the interim final rule is expected to be minimal to 
the extent that preparation of a regulatory evaluation is not 
warranted.

B. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.) 
requires an assessment of the impact of proposed and final rules on 
small entities unless the agency certifies that the proposed regulation 
will not have a significant economic impact on a substantial number of 
small entities. An air carrier or a foreign air carrier is a small 
business if it provides air transportation only with small aircraft 
(i.e., aircraft with up to 60 seats/18,000 pound payload capacity). See 
14 CFR 399.73.
    The revision of the civil penalty amount will raise potential 
penalties for individuals and small businesses with regard to 
violations of certain aviation economic regulations and statutes or 
consumer protection rules and orders. Because the largest increase to 
the maximum civil penalty affecting small entities is only $2,856, the 
aggregate economic impact of this rulemaking on small entities should 
be minimal and would only be borne by those entities found in violation 
of the regulations.
    Accordingly, I hereby certify that this action will not have a 
significant economic impact on a substantial number of small entities.
    In addition, DOT has determined the RFA does not apply to this 
rulemaking. The 2015 Inflation Act requires DOT to publish an interim 
final rule and does not require DOT to complete notice and comment 
procedures under the APA. The Small Business Administration's A Guide 
for Government Agencies: How to Comply with the Regulatory Flexibility 
Act (2012), provides that:

    If, under the APA or any rule of general applicability governing 
federal grants to state and local governments, the agency is 
required to publish a general notice of proposed rulemaking (NPRM), 
the RFA must be considered [citing 5 U.S.C. 604(a)]. . . . If an 
NPRM is not required, the RFA does not apply.

    Therefore, because the 2015 Inflation Act does not require an NPRM 
for this rulemaking, the RFA does not apply.

C. Executive Order 13132 (Federalism)

    This interim final rule has been analyzed in accordance with the 
principles and criteria contained in Executive Order 13132 
(``Federalism''). This regulation has no substantial direct effects on 
the States, the relationship between the national government and the 
States, or the distribution of power and responsibilities among the 
various levels of government. It does not contain any provision that 
imposes substantial direct compliance costs on State and local 
governments. It does not contain any new provision that preempts state 
law, because states are already preempted from regulating in this area 
under the Airline Deregulation Act, 49 U.S.C. 41713. Therefore, the 
consultation and funding requirements of Executive Order 13132 do not 
apply.

D. Executive Order 13084

    This rule has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13084 (``Consultation and 
Coordination with Indian Tribal Governments''). Because none of the 
measures in the rule will significantly or uniquely affect the 
communities of the Indian tribal governments or impose substantial 
direct compliance costs on them, the funding and consultation 
requirements of Executive Order 13084 do not apply.

E. Paperwork Reduction Act

    Under the Paperwork Reduction Act, before an agency submits a 
proposed collection of information to OMB for approval, it must publish 
a document in the Federal Register providing notice of and a 60-day 
comment period on, and otherwise consult with members of the public and 
affected agencies concerning, each proposed collection of information. 
This rule imposes no new information reporting or record keeping 
necessitating clearance by the Office of Management and Budget.

F. National Environmental Policy Act

    The Department has analyzed the environmental impacts of this 
interim final rule pursuant to the National Environmental Policy Act of 
1969 (NEPA) (42 U.S.C. 4321 et seq.) and has determined that it is 
categorically excluded pursuant to DOT Order 5610.1C, Procedures for 
Considering Environmental Impacts (44 FR 56420, Oct. 1, 1979). 
Categorical exclusions are actions identified in an agency's NEPA 
implementing procedures that do not normally have a significant impact 
on the environment and therefore do not require either an environmental 
assessment (EA) or environmental impact statement (EIS). See 40 CFR 
1508.4. In analyzing the applicability of a categorical exclusion, the 
agency must also consider whether extraordinary circumstances are 
present that would warrant the preparation of an EA or EIS. Id. 
Paragraph 3.c.6.i of DOT Order 5610.1C categorically excludes 
``[a]ctions relating to consumer protection, including regulations.'' 
The purpose of this rulemaking is to adjust the maximum civil penalties 
for violations of certain aviation consumer protection statutes, 
regulations, and orders. The Department does not anticipate any 
environmental impacts, and there are no extraordinary circumstances 
present in connection with this rulemaking.

G. Unfunded Mandates Reform Act

    The Department analyzed the interim final rule under the factors in 
the Unfunded Mandates Reform Act of 1995. The Department considered 
whether the rule includes a federal mandate that may result in the 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100,000,000 or more (adjusted annually 
for inflation) in any one year. The Department has determined that this 
interim final rule will not result in such expenditures. Accordingly, 
this interim final rule is not subject to the Unfunded Mandates Reform 
Act.

List of Subjects in 14 CFR Part 383

    Administrative practice and procedure, Penalties.

    For the reasons stated in the preamble, the Office of the Secretary 
of Transportation amends 14 CFR part 383 as set forth below:

PART 383--CIVIL PENALTIES

0
1. The authority citation for 14 CFR Part 383 is revised to read as 
follows:

    Authority: Sec. 701, Pub. L. 114-74, 129 Stat. 584; Sec. 503, 
Pub. L. 108-176, 117 Stat. 2490; Pub. L. 101-410, 104 Stat. 890; 
Sec. 31001, Pub. L. 104-134.

0
2. Section 383.1 is revised to read as follows:

[[Page 52766]]

Sec.  383.1  Purpose and periodic adjustment.

    (a) Purpose. This part adjusts the civil penalty liability amounts 
prescribed in 49 U.S.C. 46301(a) for inflation in accordance with the 
Act cited in paragraph (b) of this section.
    (b) Periodic Adjustment. DOT will periodically adjust the maximum 
civil penalties set forth in 49 U.S.C. 46301 and this part as required 
by the Federal Civil Penalties Inflation Adjustment Act of 1990 as 
amended by the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015.

0
3. Section 383.2 is revised to read as follows:

Sec.  383.2  Amount of penalty.

    Civil penalties payable to the U.S. Government for violations of 
Title 49, Chapters 401 through 421, pursuant to 49 U.S.C. 46301(a), are 
as follows:
    (a) A general civil penalty of not more than $32,140 (or $1,414 for 
individuals or small businesses) applies to violations of statutory 
provisions and rules or orders issued under those provisions, other 
than those listed in paragraph (b) of this section, (see 49 U.S.C. 
46301(a)(1));
    (b) With respect to small businesses and individuals, 
notwithstanding the general $1,414 civil penalty, the following civil 
penalty limits apply:
    (1) A maximum civil penalty of $12,856 applies for violations of 
most provisions of Chapter 401, including the anti-discrimination 
provisions of sections 40127 (general provision), and 41705 
(discrimination against the disabled) and rules and orders issued 
pursuant to those provisions (see 49 U.S.C. 46301(a)(5)(A));
    (2) A maximum civil penalty of $6,428 applies for violations of 
section 41719 and rules and orders issued pursuant to that provision 
(see 49 U.S.C. 46301(a)(5)(C)); and
    (3) A maximum civil penalty of $3,214 applies for violations of 
section 41712 or consumer protection rules or orders (see 49 U.S.C. 
46301(a)(5)(D)).

    Issued in Washington, DC, under authority delegated at 49 CFR 
1.27(n), on: August 5, 2016.
Molly J. Moran,
Acting General Counsel.
[FR Doc. 2016-19003 Filed 8-9-16; 8:45 am]
 BILLING CODE 4910-9X-P