[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Rules and Regulations]
[Pages 67444-67446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32258]



[[Page 67443]]

_______________________________________________________________________

Part VI





Department of Transportation





_______________________________________________________________________



Federal Aviation Administration



_______________________________________________________________________



14 CFR Part 13



Inflation Adjustment of Civil Monetary Penalties; Final Rule

  Federal Register / Vol. 61, No. 246 / Friday, December 20, 1996 / 
Rules and Regulations  

[[Page 67444]]



DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 13

[Docket No. 28762; Amdt. No. 13-28]
RIN 2105-AC63


Inflation Adjustment of Civil Monetary Penalties

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This final rule implements the Federal Civil Penalties 
Inflation Adjustment Act of 1990, as amended by the Debt Collection 
Improvement Act of 1996. The rule adjusts for inflation the amount of 
each statutory civil penalty subject to the Federal Aviation 
Administration's jurisdiction in accordance with the requirements of 
the Act, as amended.

EFFECTIVE DATE: This final rule is effective January 21, 1997.

FOR FURTHER INFORMATION CONTACT:
Joyce Redos, Attorney, Policy and Evaluations Branch, AGC-320, Office 
of Chief Counsel, Federal Aviation Administration, 800 Independence 
Avenue, SW, Washington, DC 20591, (202) 267-7158.

SUPPLEMENTARY INFORMATION:

Background

    The Federal Civil Penalties Inflation Adjustment Act of 1990 
(``1990 Act''), Public Law (Pub. L.) 101-410, 194 Stat. 890, 28 U.S.C. 
2461 note, as amended by the Debt Collection Improvement Act of 1996 
(``Act''), Pub. L. 104-134, April 26, 1996, requires the adjustment of 
civil monetary penalties (CMP) for inflation. This adjustment is 
intended to ensure that CMPs maintain their deterrent value. The Act 
requires that not later than 180 days after its enactment, which is 
October 23, 1996, and at least once every 4 years thereafter, the head 
of each agency shall, by regulation published in the Federal Register, 
adjust each CMP within its jurisdiction by the inflation adjustment 
described in the 1990 Act. The inflation adjustment under the Act is to 
be determined by increasing the maximum CMP by the cost-of-living 
adjustment (COLA), rounded off as set forth in section 5(a) of the 1990 
Act. The COLA is the percentage (if any) for each CMP by which the 
Consumer Price Index (``CPI'') \1\ for the month of June of the 
calendar year preceding the adjustment (i.e., June 1995 for this 
initial adjustment) exceeds the CPI for the month of June of the 
calendar year in which the amount of such CMP was last set or adjusted 
pursuant to law. The first adjustment to a CMP may not exceed 10 
percent of such penalty.
---------------------------------------------------------------------------

    \1\ CPI is defined as the CPI for all urban consumers published 
annually by the Department of Labor.
---------------------------------------------------------------------------

    Any increased penalties apply only to violations that occur after 
the date on which the increase takes effect.
    A typical example of an inflation adjustment of a CMP is as 
follows:
    Section 5123 of Title 49, United States Code (the Federal Hazardous 
Materials Transportation Law), imposes a minimum $250 and a maximum 
$25,000 penalty for a knowing violation of Chapter 51 or a regulation 
prescribed or order issued thereunder. The penalty was set in 1990. The 
CPI for June 1990 was 389.1. The CPI for June 1995 is 456.7. The 
inflation factor, therefore, is 456.7/389.1, or 1.17. The minimum 
penalty amount would not be changed after increase and statutory 
rounding. However, the maximum penalty amount after increase and 
statutory rounding would be $30,000 (1.17 x $25,000). The new maximum 
penalty amount after applying the 10% limit on an initial increase is 
$27,500.
    A similar calculation was done with respect to each CMP subject to 
the jurisdiction of the Federal Aviation Administration (FAA). In 
compliance with the Act, the FAA is hereby amending its regulations by 
creating a new subpart H in 14 CFR part 13, which will be entitled 
Civil Monetary Penalty Inflation Adjustment.

Waiver of Notice of Proposed Rulemaking

    The Administrative Procedure Act (APA), 5 U.S.C. 553, sets forth 
procedures for notice and public comment rulemaking. The APA also 
provides an exception from notice and document procedures when an 
agency finds good cause for dispensing with those procedures on the 
basis that they are impracticable, unnecessary or contrary to the 
public interest. The FAA has determined that under 5 U.S.C. 553, 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 Federal Civil Penalties Inflation Adjustment Act of 1990, as 
amended by the Debt Collection Improvement Act of 1996, with no issues 
of policy discretion. Notice and an opportunity for public comment are 
not necessary prior to issuance of this final rule because it 
implements a definitive statutory formula mandated by the Act. 
Accordingly, opportunity for prior comment is unnecessary. The FAA, 
therefore, is issuing these regulations as a final rule that will apply 
to all future cases under this authority.

Economic Summary

    This final rule is exempt from review under 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 Federal Civil Penalties Inflation Adjustment Act of 1990 and the 
Debt Collection Improvement Act of 1996 for specific applicable civil 
monetary penalties under the authority of the FAA.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) was enacted by 
Congress to ensure that small entities are not unnecessarily burdened 
by government regulations. The RFA requires agencies to review rules 
that may have a ``significant economic impact on a substantial number 
of small entities.''
    The aggregate economic impact of this rulemaking on small business 
entities should be minimal, affecting only those few entities who 
choose to engage in prohibited arrangements and schemes in violation of 
the statutes and regulations the FAA administers. Therefore, the FAA 
has concluded that this final rule will not have a significant economic 
impact, positive or negative, on a substantial number of small business 
entities, and that a regulatory flexibility analysis is not required 
for this rulemaking.

International Trade Impact Assessment

    The Office of Management and Budget directs agencies to assess the 
effects of regulatory changes on international trade. This rule will 
not have a competitive trade disadvantage on foreign or domestic 
operators inasmuch as the maximum civil penalties or ranges of minimum 
and maximum civil penalties adjusted under this regulation apply 
equally to foreign and domestic operators who violate the statutes or 
regulations within the FAA's jurisdiction.

Unfunded Mandate

    Title II of the Unfunded Mandates Reform Act of 1995 (the Reform 
Act), enacted as Pub. L. 104-4 on March 22, 1995, requires each Federal 
agency, to the extent permitted by law, to prepare a written assessment 
of the effects of any Federal mandate in a proposed or final agency 
rule that may result in the

[[Page 67445]]

expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100 million or more (adjusted annually 
for inflation) in any one year. Section 204(a) of the Reform Act, 2 
U.S.C. 1534(a), requires the Federal agency to develop an effective 
process to permit timely input by elected officers (or their designees) 
of State, local and tribal governments on a proposed ``significant 
intergovernmental mandate.'' A ``significant intergovernmental 
mandate'' under the Reform Act is any provision in a Federal agency 
regulation that would impose an enforceable duty upon State, local, and 
tribal governments, in the aggregate, of $100 million (adjusted 
annually for inflation) in any one year. Section 203 of the Reform Act, 
2 U.S.C. 1533, which supplements section 204(a), provides that before 
establishing any regulatory requirements that might significantly or 
uniquely affect small governments, the agency shall have developed a 
plan that among other things, provides for notice to potentially 
affected small governments, if any, and for a meaningful and timely 
opportunity to provide input in the development of regulatory 
proposals.
    This final rule does not contain any Federal intergovernmental or 
private sector mandate. Therefore, the requirements of Title II of the 
Reform Act do not apply.

Federalism Implications

    The regulations adopted herein do not have a substantial direct 
effect 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. Therefore, in 
accordance with Executive Order 12612, it is determined that this final 
rule does not have federalism implications warranting the preparation 
of a Federalism Assessment.

International Civil Aviation Organization (ICAO) and Joint Aviation 
Regulations

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with ICAO 
Standards and Recommended Practices to the maximum extent practicable. 
The FAA finds no corresponding International Civil Aviation 
Organization regulations or Joint Aviation Regulations; therefore, no 
differences exist.

Paperwork Reduction Act

    The rule does not contain any collection of information 
requirements, as defined by the Paperwork Reduction Act of 1995, as 
amended. Therefore, Office of Management and Budget review is not 
required.

Conclusion

    The FAA has determined that this final rule is exempt from review 
under Executive Order 12866 because it is limited to the adoption of 
statutory language without interpretation. For the same reason, it is 
not a significant rule under the Department of Transportation's 
Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). 
Since any additional costs incurred under this regulation will apply 
only to those few entities who engage in conduct prohibited under the 
statutes and regulations that the FAA administers, the FAA certifies 
under the criteria of the Regulatory Flexibility Act, that this 
regulation will not have a significant economic impact, positive or 
negative, on a substantial number of small entities and that a 
regulatory flexibility analysis is unnecessary.

List of Subjects in 14 CFR Part 13

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

The Amendments

    Accordingly, the Federal Aviation Administration amends 14 CFR part 
13 by adding subpart H to read as follows:

PART 13--INVESTIGATIVE AND ENFORCEMENT PROCEDURES

    1. The authority citation for part 13 is revised 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, 46501-46502, 46504-46507, 
47106, 47111, 47122, 47306, 47531-47532.

    2. Subpart H is added to read as follows:

Subpart H--Civil Monetary Penalty Inflation Adjustment

Sec.
13.301  Scope and purpose.
13.303  Definitions.
13.305  Cost of Living Adjustments of Civil Monetary Penalties.

Subpart H--Civil Monetary Penalty Inflation Adjustment


Sec. 13.301  Scope and purpose.

    (a) This subpart provides a mechanism for the regular adjustment 
for inflation of civil monetary penalties in conformity with the 
Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 
2461 (note), as amended by the Debt Collection Improvement Act of 1996, 
Public Law 104-134, April 26, 1996, in order to maintain the deterrent 
effect of civil monetary penalties and to promote compliance with the 
law. This subpart also sets out the current adjusted maximum civil 
monetary penalties or range of minimum and maximum civil monetary 
penalties for each statutory civil penalty subject to the FAA's 
jurisdiction.
    (b) Each adjustment to the maximum civil monetary penalty or the 
range of minimum and maximum civil monetary penalties, as applicable, 
made in accordance with this subpart applies prospectively from the 
date it becomes effective to actions initiated under this part, 
notwithstanding references to a specific maximum civil monetary penalty 
or range of minimum and maximum civil monetary penalties contained 
elsewhere in this part.


Sec. 13.303  Definitions.

    (a) Civil Monetary Penalty means any penalty, fine, or other 
sanction that:
    (1) Is for a specific monetary amount as provided by Federal law or 
has a maximum amount provided by Federal law;
    (2) Is assessed or enforced by the FAA pursuant to Federal law; and
    (3) Is assessed or enforced pursuant to an administrative 
proceeding or a civil action in the Federal courts.
    (b) Consumer Price Index means the Consumer Price Index for all 
urban consumers published by the Department of Labor.


Sec. 13.305  Cost of Living Adjustments of Civil Monetary Penalties.

    (a) Except for the limitation to the initial adjustment to 
statutory maximum civil monetary penalties or range of minimum and 
maximum civil monetary penalties set forth in paragraph (c) of this 
section, the inflation adjustment under this subpart is determined by 
increasing the maximum civil monetary penalty or range of minimum and 
maximum civil monetary penalty for each civil monetary penalty by the 
cost-of-living adjustment. Any increase determined under paragraph (a) 
of this section is rounded to the nearest:
    (1) Multiple of $10 in the case of penalties less than or equal to 
$100;
    (2) Multiple of $100 in the case of penalties greater than $100 but 
less than or equal to $1,000;
    (3) Multiple of $1,000 in the case of penalties greater than $1,000 
but less than or equal to $10,000;
    (4) Multiple of $5,000 in the case of penalties greater than 
$10,000 but less than or equal to $100,000;
    (5) Multiple of $10,000 in the case of penalties greater than 
$100,000 but less than or equal to $200,000; and

[[Page 67446]]

    (6) Multiple of $25,000 in the case of penalties greater than 
$200,000.
    (b) For purposes of paragraph (a) of this section, the term ``cost-
of-living adjustment'' means the percentage (if any) for each civil 
monetary penalty by which the Consumer Price Index for the month of 
June of the calendar year preceding the adjustment exceeds the Consumer 
Price Index for the month of June of the calendar year in which the 
amount of such civil monetary penalty was last set or adjusted pursuant 
to law.
    (c) Limitation on initial adjustment. The initial adjustment of 
maximum civil penalty or range of minimum and maximum civil monetary 
penalties made pursuant to this subpart does not exceed 10 percent of 
the statutory maximum civil penalty before an adjustment under this 
subpart is made. This limitation applies only to the initial 
adjustment, effective on January 21, 1997.
    (d) Inflation adjustment. Minimum and maximum civil monetary 
penalties within the jurisdiction of the FAA are adjusted for inflation 
as follows:

                                 Minimum and Maximum Civil Penalties Adjusted for Inflation, Effective January 21, 1997                                 
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                                   Civil monetary    Minimum penalty      New adjusted     Maximum penalty                                              
  United States Code citation         penalty        amount as of 10/   minimum penalty    amount as of 10/      New adjusted minimum penalty amount    
                                    description           23/96              amount             26/96                                                   
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49 U.S.C. 5123(a) (changed       Violations of      $250 per           $250 per           $25,000 per        $27,000 per violation per day.             
 1990).                           hazardous          violation per      violation per      violation per                                                
                                  materials          day.               day.               day.                                                         
                                  transportation                                                                                                        
                                  law or                                                                                                                
                                  regulations.                                                                                                          
49 U.S.C. 46301(a)(1) (1958)...  Violations of FAA  N/A..............  N/A..............  $1,000 per         $1,100 per violation per day.              
                                  statute or                                               violation per                                                
                                  regulations by a                                         day.                                                         
                                  person.                                                                                                               
49 U.S.C. 46301(a)(2) (changed   Violations of FAA  N/A..............  N/A..............  $10,000 per        $11,000 per violation per day.             
 1987).                           statute or                                               violation per                                                
                                  regulations by a                                         day.                                                         
                                  person operating                                                                                                      
                                  an aircraft for                                                                                                       
                                  the                                                                                                                   
                                  transportation                                                                                                        
                                  of passengers or                                                                                                      
                                  property for                                                                                                          
                                  compensation.                                                                                                         
49 U.S.C. 46301(a)(3)(A) (1974)  Violations of FAA  N/A..............  N/A..............  $10,000 per        $11,000 per violation per day.             
                                  statute or                                               violation per                                                
                                  regulations                                              day.                                                         
                                  involving the                                                                                                         
                                  transportation                                                                                                        
                                  of hazardous                                                                                                          
                                  materials by air.                                                                                                     
49 U.S.C. 46301(a)(3)(B) (1988)  Violations of FAA  N/A..............  N/A..............  $10,000 per        $11,000 per violation per day.             
                                  statute or                                               violation per                                                
                                  regulations                                              day.                                                         
                                  involving the                                                                                                         
                                  registration or                                                                                                       
                                  recordation                                                                                                           
                                  under chapter                                                                                                         
                                  441 of aircraft                                                                                                       
                                  not used to                                                                                                           
                                  provide air                                                                                                           
                                  transportation.                                                                                                       
49 U.S.C. 46301(b) (1987)......  Tampering with a   N/A..............  N/A..............  $2,000 per         $2,200 per violation.                      
                                  smoke alarm                                              violation.                                                   
                                  device.                                                                                                               
49 U.S.C. 46302 (1984).........  Knowingly          N/A..............  N/A..............  $10,000 per        $11,000 per violation.                     
                                  providing false                                          violation.                                                   
                                  information                                                                                                           
                                  about alleged                                                                                                         
                                  violations                                                                                                            
                                  involving the                                                                                                         
                                  special aircraft                                                                                                      
                                  jurisdiction of                                                                                                       
                                  the United                                                                                                            
                                  States.                                                                                                               
49 U.S.C. 46303 (1984).........  Carrying a         N/A..............  N/A..............  $10,000 per        $11,000 per violation.                     
                                  concealed deadly                                         violation.                                                   
                                  or dangerous                                                                                                          
                                  weapon.                                                                                                               
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    Issued in Washington, DC on December 13, 1996.
Linda Hall Daschle,
Acting Administrator.
[FR Doc. 96-32258 Filed 12-19-96; 8:45 am]
BILLING CODE 4910-13-M