Source: https://www.federalregister.gov/documents/2006/05/16/06-4524/revisions-to-the-civil-penalty-inflation-adjustment-rule-and-tables
Timestamp: 2017-09-19 12:00:08
Document Index: 570554794

Matched Legal Cases: ['art 13', 'art 13', 'art 91', 'art 13', 'art 13', 'art 13', 'art 13', '§\u200913']

Federal Register :: Revisions to the Civil Penalty Inflation Adjustment Rule and Tables
This amendment becomes effective June 15, 2006.
71 FR 28517
28517-28524 (8 pages)
https://www.federalregister.gov/d/06-4524 https://www.federalregister.gov/d/06-4524
Start Preamble Start Printed Page 28518
(1) Searching the Department of Transportation's electronic Docket Management System (DMS) Web page (http://dms.dot.gov/​search); visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/​regulations_​policies/​; or
On December 12, 2003, the President signed into law the “Vision 100—Century of Aviation Reauthorization Act,” Public Law 108-176 (Vision 100). Vision 100 made several changes to the FAA's authority to assess civil penalties. Vision 100:
1. Reset several of the FAA's civil monetary penalty amounts for some violators.
2. Increased certain maximum civil monetary penalties in 49 U.S.C. 46301.
3. Revised portions of section 46301 to create specific maximum civil monetary penalty amounts for individuals and small business concerns.
4. Redesignated portions of section 46301; e.g., section 46301(a)(5) was redesignated as section 46301(a)(3).
5. Added a new, mandatory civil penalty, 49 U.S.C. 46319, for permanent closure of an airport without providing the FAA sufficient notice.
On August 10, 2005, the President signed into law the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Public Law 109-59, 119 Stat. 1144. Title VII of SAFETEA-LU, the Hazardous Materials Safety and Security Reauthorization Act of 2005, revised paragraph (a)(1) of 49 U.S.C. 5123 generally to increase to $50,000 the maximum civil penalty for a violation of 49 U.S.C. chapter 51, or a regulation, order, special permit, or approval issued thereunder. However, Title VII created an exception to that maximum by providing that, if a violation results in death, serious illness, or severe injury to any person, or substantial destruction of property, the Secretary of Transportation may increase the amount of the civil penalty for such violation to not more than $100,000.
Under Title VII of SAFETEA-LU the general minimum civil penalty for a violation of 49 U.S.C. chapter 51, or a regulation, order, special permit, or approval issued thereunder was set at $250; however, the minimum civil penalty for a hazardous materials training violation was increased to $450. Start Printed Page 28519
In light of the statutory changes made by Vision 100 and SAFETEA-LU, we are making a variety of changes to 14 CFR part 13, subpart H, which describes the civil penalty inflation adjustment process and the civil penalties that apply to various violations.
Subpart H incorporates a Table One, which specifies the maximum and minimum civil penalty amounts that apply to violations under 49 U.S.C. chapter 463 and 49 U.S.C. 47531 that occurred prior to December 12, 2003, and to violations under 49 U.S.C. chapter 51 that occurred prior to August 10, 2005. Table One also includes references to certain sections that were not included in the previous rulemakings on part 13, subpart H. Sections 47528 through 47530 of Title 49 prohibit the operation of certain aircraft when those aircraft do not comply with the Stage 3 noise levels (see 14 CFR part 91, subpart I). Section 47531 of Title 49 provides that a person violating one of those statutory provisions is subject to the same civil penalty amounts and procedures under chapter 463 as a person violating section 44701(a) or (b), or any of sections 44702-44716. We are also adding reference to section 46301(a)(5) (redesignated as section 46301(a)(3) by Vision 100), which pertains to the penalty for diversion of aviation revenues.
For ease of using the tables, the column “Civil monetary penalty description,” contains abbreviated descriptions and therefore may not be all inclusive of the types of violations covered. For example, although 49 U.S.C. 46318 is described as “interference with cabin or flight crew,” violations of this section can also involve assaults on passengers. It is necessary to read fully the United States Code provisions cited in the first column of the tables to understand the extent of violations that are subject to the various civil penalties listed in the tables.
Table Two specifies the new amounts of civil monetary penalties set or reset in Vision 100, which apply to violations that occur on or after December 12, 2003, as well as some inflation adjustments that are discussed below.
Vision 100 provided for a general civil penalty of $25,000, maximum, for a violation of most of the sections in Title 49 that we enforce, including the regulations promulgated or orders issued under authority of those sections. (49 U.S.C. 46301(a)(1)(A) and (B).) (Note that Section 46301 does not address violations of the hazardous materials provisions under 49 U.S.C. chapter 51, and the $25,000 maximum civil penalty does not apply to such violations.) Section 46301(a)(1) provides for a maximum penalty of $1,100 for violations by an individual or small business concern.
However, Vision 100 also contained a new paragraph (a)(5) in section 46301, which sets a maximum civil penalty amount of $10,000 for individuals and small business concerns for violations of statutory provisions listed in paragraph (a)(5)(A)(i), or a regulation prescribed or order issued under those statutory provisions. Paragraph (a)(5)(A) provides an exception for “an airman serving as an airman;” the maximum penalty for such individuals is $1,100. While section 46301(a)(1)(A) contains a number of provisions not included in section 46301(a)(5)(A)(i), the provisions cited in (a)(5)(A)(i) almost completely overlap with the provisions cited in section 46301(a)(1)(A) that are enforced by the FAA. (An example of a difference is that section 46301(a)(1)(A) includes 49 U.S.C. 44718(a), while section 46301(a)(5)(A)(i) does not.) The result is that there are only two types of exceptions to the $10,000 statutory civil penalty liability for individuals and small businesses: First, if the alleged violator is an airman serving as an airman; and second, if the basis for the violated provision is cited in section 46301(a)(1)(A), but not cited in section 46301(a)(5)(A) (e.g., 49 U.S.C. 44718(a)).
The changes due to the new language in sections 46301(a)(1) and (5)(A), and described above, are laid out in the following table, and also reflected in Table Two:
Is the violated provision cited in 49 U.S.C. 46301(a)(1)?
Is the violated provision also cited in 49 U.S.C. 46301(a)(5)(A)?
What is the maximum penalty amount?
Person not an individual or small business concern Yes Yes $25,000
Person not an individual or small business concern Yes No 25,000
Airman serving as an airman Yes Yes 1,100
Airman serving as an airman Yes No 1,100
Individual not an airman serving as airman Yes Yes 10,000
Individual not an airman serving as airman Yes No 1,100
Small business concern Yes Yes 10,000
Small business concern Yes No 1,100
Based on a new inflation adjustment, discussed below, the $10,000 maximum penalties listed in this table will become $11,000. This adjustment is reflected in Table 2.
Section 46301(a)(5)(B) lists maximum civil penalties for specific types of violations by individuals and small business concerns; an airman acting as an airman is not afforded a lower maximum penalty under these provisions. The covered violations include those under 49 U.S.C. 46301(a)(1) related to the transportation of hazardous materials (Title 14 of the CFR), registration or recordation under 49 U.S.C. chapter 441, the limitation in 49 U.S.C. 44718(d) on construction or establishment of landfills, and the prohibition in 49 U.S.C. 44725 on unsafe disposal of life-limited aircraft parts. As set by Congress in Vision 100, the maximum penalty for violations of these provisions occurring on or after December 12, 2003 until [insert effective date of rule] is $10,000. Based on a new inflation adjustment, discussed below, for a violation occurring after the effective date of the rule, the maximum penalty is $11,000.
We are adding a reference to section 46319, which provides for a mandatory civil penalty for each public agency that permanently closes an airport listed in the national plan of integrated airports without providing the notification required by that section. When the provision became effective on December 12, 2003, the penalty was $10,000 per day. Based on a new inflation adjustment, as of [insert date of the day after the effective date], the penalty is $11,000 per day.
Table Two also includes citations to the sections not previously included in previous rulemakings in part 13, subpart H, i.e., 49 U.S.C. 47528 through 47530, 47531, and 46301(a)(3), formerly section 46301(a)(5).
Vision 100 did not change section 46301(b); that section still specifies a Start Printed Page 28520civil penalty not to exceed $2,000 for tampering with, disabling, or destroying a lavatory smoke alarm device on an aircraft providing air transportation or intrastate air transportation. In the 1997 inflation adjustment, we increased that maximum to $2,200. Table Two lists that previously adjusted maximum.
We are adding a Table Three to reflect the current maximum and minimum civil penalties under 49 U.S.C. 5123(a) for a violation of one of the hazardous materials transportation laws, or a regulation, order, special permit, or approval issued thereunder. The maximum civil penalty generally is $50,000 for each violation on or after August 10, 2005. We are also including the maximum civil penalty amount of $100,000 for a hazardous materials violation where the result is death, serious illness or severe injury to a person, or substantial destruction of property. That maximum will also apply only to a violation on or after August 10, 2005.
In Table Three, we are leaving the minimum civil monetary penalty under 49 U.S.C. 5123(a) for a violation at $250, except as provided for a training violation. Because the Congress specifically chose to increase the minimum penalty for a training violation, but did not do so for any other hazmat violation, we have concluded that the minimum penalty has been “reset” to $250. The $450 minimum civil penalty applies only to a hazmat training violation on or after August 10, 2005.
Under the rules in part 13, subpart H, which implemented the requirements of the Adjustment Act, as amended by the Collection Act, we determine the inflation adjustment for each applicable civil penalty by increasing the maximum civil penalty or range of minimum and maximum civil penalty by the “cost-of-living adjustment” (COLA). Each such increase is rounded off, as described in section 13.305(a) of part 13. Section 5(b) of the Adjustment Act and section 13.305(b) define the “cost-of-living adjustment” as “the percentage (if any) for each civil monetary penalty 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 such civil penalty was last set or adjusted pursuant to law.”
Thus, for this rulemaking, we looked at the increase (if any) of the CPI of June, 2005 over the CPI's of June of the calendar years for each of the last penalty settings or adjustments. We calculated the percentage of each increase, multiplied the corresponding last set or adjusted penalty by the percentage increase, applied the appropriate rounding-off number, and added each rounded number to the last set or adjusted penalty. If an increase was rounded to zero, the last set or adjusted penalty remained the same.
The CPI for June, 2005 (the month of June of the calendar year preceding these adjustments) was 194.5. The CPI for the month of June of the calendar years in which the amount of each civil monetary penalty was last set or adjusted varies, depending on the particular provision. They are as follows: 160.3 for June 1997; 172.4 for June 2000; and 183.7 for June 2003.
Section 13.305(a) of the FAA's regulations describes the rounding-off numbers. An increase determined under section 13.305(a) is rounded to the nearest:
Finally, regardless of the rounding formula, an initial adjustment to a penalty is limited to 10 percent. With respect to the 10 percent limitation, this rule also amends 14 CFR 13.305(c) by deleting the last sentence in that paragraph and revising the remainder of the paragraph to conform to the actual language of section 6 to 28 U.S.C. 2461 note. The last sentence of 14 CFR 13.305(c) incorrectly states, “[t]his limitation applies only to the initial adjustment, effective on January 21, 1997.” Section 6 of the statute is not limited to the initial adjustment made on that particular date; it applies as well to the initial adjustment made to a civil penalty provision enacted after January 21, 1997, e.g., 49 U.S.C. 46318.
In preparing this revision to subpart H, we reviewed all the civil monetary penalty provisions in the FAA's statutes and applied the inflation adjustment and rounding-off formulae described above. We concluded that one provision not reset by Congress in Vision 100 or SAFETEA-LU is ready to be adjusted, i.e., 49 U.S.C. 46318 from a maximum penalty of $25,000 to $27,500. In addition, several provisions reset in Vision 100 are subject to adjustment. These provisions are 49 U.S.C. 46301(a)(5)(A), 46301(a)(5)(B)(i-iv), and 49 U.S.C. 46319. These are being raised from a maximum of $10,000 to $11,000. None of the provisions affected by SAFETEA-LU are ready to be adjusted.
I find good cause exists under 5 U.S.C. 553(b)(3)(B) of the Administrative Procedures Act for adoption of this final rule without prior notice and comment. This rule effectuates the intent of the Federal Civil Penalties Inflation Adjustment Act to allow for regular adjustment, for inflation, of civil monetary penalties and to maintain the deterrent effect of civil monetary penalties and promote compliance with the law. The inflation adjustments to penalties under this rule apply a formula mandated by Congress. It would not be in the public interest to delay these adjustments in order to receive public comment. In any event, such delay would not allow the FAA to develop any basis to change the method or application of the mandatory inflation adjustments.
Executive Order 12866, Regulatory Planning and Review, directs the FAA to assess both the costs and benefits of a regulatory change. We are not allowed to propose or adopt a regulation unless we make a reasoned determination that the benefits of the intended regulation justify its costs. In this rule, we have adopted civil monetary penalty limits as set forth in legislation. We have not made any other adjustments to the limits on civil penalties we prosecute. Start Printed Page 28521Thus, whatever economic impact this regulation has is due solely to legislation enacted by the Congress, which determined that the benefits of the changes described in this rule justify the costs. Thus, this is not a “significant regulatory action” as defined in the Order, and we have not prepared a “regulatory impact analysis.” Similarly, we have not prepared a “regulatory evaluation,” which is the written cost/benefit analysis ordinarily required for all rulemaking proposals under the DOT Regulatory Policies and Procedures.
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 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 of U.S. standards. And fourth, the Unfunded Mandates Reform Act of 1995 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).
However, for regulations with an expected minimal impact, the above-specified analyses are not required. DOT Order 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If it is determined that the expected impact is so minimal that the proposal does not warrant a full evaluation, a statement to that effect and the basis for it is included in the proposed regulation. Since this final rule only identifies the increase in penalties as required by the Debt Collection Improvement Act of 1996, the impact of this rulemaking is minimal.
This action simply identifies the civil monetary penalties for violations of the statutory and regulatory provisions we enforce. The penalty amounts are those specified by statute or called for under the inflation adjustment statutes, and the information in this rule is required by the Debt Collection Improvement Act of 1996. Consequently, we certify that this rule will not have a significant economic impact on a substantial number of small entities.
The Trade Agreements Act of 1979 prohibits Federal agencies from engaging in any standards or 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 us to consider international standards and, where appropriate, that they be the basis for U.S. standards. In addition, consistent with the Administration's belief in the general superiority and desirability of free trade, it is the policy of the Administration to remove or diminish to the extent feasible, barriers to international trade, including both barriers affecting the export of American goods and services to foreign countries and barriers affecting the import of foreign goods and services into the United States.
In accordance with the above statute and policy, we have assessed the potential effect of this final rule to be negligible. This rule only summarizes civil monetary penalties, established by legislation, for violations of safety provisions that apply equally to domestic and foreign entities; therefore, we have determined that this rule will not result in an impact on international trade by companies doing business in or with the United States.
Title II of the Unfunded Mandates Reform Act of 1995 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 one year by State, local, and tribal governments, in the aggregate, or by the private sector. The FAA currently uses an inflation-adjusted value of $120.7 million in lieu of $100 million. Since this final rule only identifies the increase in penalties as required by the Debt Collection Improvement Act of 1996, it does not contain such a mandate. The requirements of Title II do not apply.
In consideration of the foregoing, the Federal Aviation Administration amends part 13 of Title 14, Code of Federal Regulations as follows:
2. Amend § 13.305 by revising paragraphs (c) and (d) to read as follows:
49 U.S.C. 5123(a) Violation of hazardous materials transportation law, regulation, or order $250 per violation, last set 1990 Same $30,000 per violation, adjusted 3/13/02.
49 U.S.C. 46301(a)(1) Violation under 49 U.S.C. 46301(a)(1) N/A N/A $1,100 per violation, adjusted 1/21/1997.
49 U.S.C. 46301(a)(2) Violation under 49 U.S.C. 46301(a)(2)(A) or (B) by a person operating an aircraft for the transportation of passengers or property for compensation (except an airman serving as an airman) N/A N/A $11,000 per violation, adjusted 1/21/1997.
49 U.S.C. 46301(a)(3)(A) Violation under 49 U.S.C. 46301(a)(1) related to the transportation of hazardous materials N/A N/A $11,000 per violation, adjusted 1/21/1997.
49 U.S.C. 46301(a)(3)(B) Violation related to the registration or recordation under 49 U.S.C. chapter 441 of an aircraft not used to provide air transportation N/A N/A $11,000 per violation, adjusted 1/21/1997.
49 U.S.C. 46301(a)(3)(C) Violation of 49 U.S.C. 44718(d) relating to limitation on construction or establishment of landfills N/A N/A $10,000 per violation, set 10/9/1996.
49 U.S.C. 46301(a)(3)(D) Violation of 49 U.S.C. 44725 relating to the safe disposal of life-limited aircraft parts N/A N/A $10,000, set 4/5/2000.
49 U.S.C. 46301(a)(5) Violation of 49 U.S.C. 47107(b) (or any assurance made under such section) or 49 U.S.C. 47133 N/A N/A Increase above otherwise applicable maximum amount not to exceed 3 times the amount of revenues that are used in violation of such section.
49 U.S.C. 46301(b) Tampering with a smoke alarm device N/A N/A $2,200, adjusted 1/21/1997.
49 U.S.C. 46302(a) Knowingly providing false information about alleged violation involving the special aircraft jurisdiction of the United States N/A N/A $11,000, adjusted 1/21/1997.
49 U.S.C. 46303 Carrying a concealed dangerous weapon 1 N/A N/A $11,000, adjusted 1/21/1997.
49 U.S.C. 46318 Interference with cabin or flight crew N/A N/A $25,000, set 4/5/2000.
49 U.S.C. 47531 Violation of 49 U.S.C. 47528-47530, or regulation prescribed under those sections, relating to the prohibition of operating certain aircraft not complying with stage 3 noise levels N/A N/A See 49 U.S.C. 46301(a)(1) and (a)(2), above.
1 The FAA prosecutes violations under this section that occurred before February 17, 2002.
49 U.S.C. 47531 Violation of 49 U.S.C. 47528-47530, or regulation prescribed or order issued under those sections, relating to the prohibition of operating certain aircraft not complying with stage 3 noise levels N/A See 49 U.S.C. 46301(a)(1) and (a)(5)(A), above No change.
1 The maximum penalty for a violation from 12/12/2003 until 5/16/2006 is $10,000.
2 The maximum penalty for a violation from 4/5/2000 until 5/16/2006 is $25,000.
[FR Doc. 06-4524 Filed 5-15-06; 8:45 am]