[Federal Register Volume 67, Number 28 (Monday, February 11, 2002)]
[Rules and Regulations]
[Pages 6364-6367]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-3240]



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Part V





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 13



Civil Penalty Inflation Adjustment Revisions; Final Rule

  Federal Register / Vol. 67, No. 28 / Monday, February 11, 2002 / 
Rules and Regulations  

[[Page 6364]]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 13

[Docket No. FAA-2002-11483; Amendment No. 13-31]
RIN 2120-AH21


Civil Penalty Inflation Adjustment Revisions

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This final rule adjusts certain civil monetary penalties for 
inflation. This action is required by the Federal Civil Monetary 
Penalty Inflation Adjustment Act of 1990, as amended by the Debt 
Collection Improvement Act of 1996, to preserve the deterrent effect of 
civil monetary penalties.

DATES: Effective March 13, 2002.

FOR FURTHER INFORMATION CONTACT: Joyce Redos, Office of Chief Counsel, 
Federal Aviation Administration, 800 Independence Avenue, SW., 
Washington, DC 20590; Telephone (202) 267-3141, Facsimile (202) 267-
5106, Electronic Mail; [email protected].


SUPPLEMENTARY INFORMATION:

Final Rule Procedure

    We find good cause exists under 5 U.S.C. 553(b)(3)(B) and (d)(3) 
for immediate implementation of this final rule without prior notice 
and comment. This rule is a nondiscretionary ministerial action to 
conform the amount of civil penalties we assess for violations of the 
statutes, regulations, and orders we enforce. The calculation of these 
adjustments follows the mathematical formula set forth in section 5 of 
the Adjustment Act.

Availability of Final Rules

    You can get an electronic copy using the Internet by taking the 
following steps:
    (1) Go to the search function of the Department of Transportation's 
electronic Docket Management System (DMS) Web page (http://dms.dot.gov/search).
    (2) On the search page type in the last four digits of the Docket 
number shown at the beginning of this notice. Click on ``search.''
    (3) On the next page, which contains the Docket summary information 
for the Docket you selected, click on the final rule.
    You can also get an electronic copy using the Internet through 
FAA's web page at http://www.faa.gov/avr/arm/nprm/nprm.htm or the 
Federal Register's web page at http://www.access.gpo.gov/su__docs/aces/
aces140.html.
    You can also get a copy by submitting 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 final 
rule.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires FAA to comply with small entity requests for information 
or advice about compliance with statutes and regulations within its 
jurisdiction. Therefore, any small entity that has a question regarding 
this document may contact their local FAA official, or the person 
listed under FOR FURTHER INFORMATION CONTACT. You can find out more 
about SBREFA on the Internet at our site, http://www.gov/avr/arm/sbrefa.htm. For more information on SBREFA, e-mail us at [email protected].

Background

    The Federal Civil Monetary Penalty Inflation Adjustment Act of 1990 
(``Adjustment Act'') 28 U.S.C. 2461 note, Public Law 101-410, as 
amended by the Debt Collection Improvement Act of 1996 (``Collection 
Act'') Public Law 104-134, requires us and other Federal agencies to 
regularly adjust civil monetary penalties for inflation to preserve the 
deterrent impact. Under these laws, each agency must make an initial 
inflationary adjustment for all applicable civil monetary penalties, 
and must make further adjustments of these penalty amounts at least 
once every four years.
    In Amendment No. 13-28 (61 FR 67445, December 20, 1996), we made 
our initial adjustment of civil monetary penalties under these 
legislative authorities. We established subpart H, Civil Monetary 
Penalty Inflation Adjustment, to 14 CFR part 13, which applies to 
violations that occur on and after January 21, 1997. The maximum 
permissible increased for this initial adjustment was 10 percent. For 
example, the maximum penalty of $1,000 for violations covered under 49 
U.S.C. 46301(a), was increased by 10 percent and adjusted to $1,100.
    In accordance with the mandate to make further adjustments of civil 
monetary penalties at least once every four years, this rulemaking 
adjusts the civil penalties for violations of the statutes, regulations 
and orders we enforce.

Method of Calculation

    Under the Adjustment Act, as amended by the Collection Act, we 
calculate the inflation adjustment for each applicable civil penalty by 
increasing the maximum civil penalty amount per violation by the cost-
of-living adjustment (COLA), and then applying a rounding factor. 
Section 5(b) of the Adjustment Act defines the ``cost-of-living'' 
adjustment as: ``the percentage (if any) for each civil monetary 
penalty by which--
    (1) the Consumer Price Index for the month of June of the calendar 
year preceding the adjustment exceeds
    (2) 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.''
    To calculate the COLA for this adjustment, we divided the consumer 
price index (CPI) for June 2000 (the month of June of the calendar year 
preceding the adjustment), which is 172.3, by the CPI for June 1996 
(the month of June of the calendar year in which the amount of such 
civil monetary penalty was last set or adjusted), which is 156.7. The 
resulting inflation factor is 1.099553 (rounded to the sixth decimal 
point). We multiplied this inflation factor by the previous maximum 
civil penalty and applied the rounding factor.
    The rounding formula is set forth in Section 5(a) of the Adjustment 
Act. Under the formula:
    ``Any increase shall be 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 $100,000;
    (5) multiple of $10,000 in the case of penalties greater than 
$100,000 but less than or equal to $200,000;
    (6) multiple of $25,000 in the case of penalties greater than 
$200,000.''

Penalties That We Are Increasing

    Upon review, we concluded that only the penalty for violations of 
hazardous materials transportation law, regulations, or orders under 49 
U.S.C. 5123(a) should be increased at this time. Other penalty amounts 
remain unchanged because the raw figures are

[[Page 6365]]

not high enough to trigger rounding to the next higher amount. For 
example, the current maximum civil penalty for a violation of the FAA's 
statute or regulations by a person under 49 U.S.C. 46301(a)(1) is 
$1,100. When $1,100 is multiplied by the cost of living factor of 
1.099553, the result is $1,210. The rounding formula, however, requires 
the increase to be rounded to the nearest $1,000. Because the nearest 
$1,000 is less than the current penalty, the current penalty amount is 
not adjusted.
    The computation for the civil penalty for violations of the 
hazardous materials transportation law or regulations under 49 U.S.C. 
5123(a) is $27,500 multiplied by the cost of living factor of 1.099553, 
which equals $30,238, which the rounding formula requires to be rounded 
off to the nearest $5,000. Therefore, the adjusted civil penalty for 
violations of the statute or regulations under 49 U.S.C. 5123(a) rounds 
off to $30,000.
    A second civil penalty provision, 49 U.S.C. 46301(a)(5), was 
amended by Congress on November 20, 1997 (Pub. L. 105-102) to authorize 
the amount of a civil penalty assessed under section 46301(a)(5) for a 
violation of 49 U.S.C. 47107(b), any assurance made under that section, 
or a violation of 49 U.S.C. 47133 to be increased ``above the otherwise 
applicable maximum amount'' under this section to an amount not to 
exceed 3 times the amount of revenues that are used in violation of 
such section. The statutory provision for the ``otherwise applicable 
maximum amount'' of a civil penalty assessed for a violation of 
47107(b) appears in 49 U.S.C. 47107(n)(4), enacted on October 9, 1996 
(Pub. L. 104-264). Section 47107(n)(4) imposes liability for a civil 
penalty in an ``amount equal to the illegal diversion in question plus 
interest.''
    The maximum civil penalty under these provisions is tied to the 
amount of aviation revenues diverted rather than to a set maximum civil 
penalty. These sections do not set forth a specific amount upon which 
we can base an adjustment or apply the rounding formula. Although it 
might be possible to apply the provisions of the Adjustment Act, as 
amended by the Collection Act, and our regulations in CFR part 13, 
subpart H, on a case by case basis to violations of 49 U.S.C. 47101(b) 
and 47133, we do not believe that such an approach would be consistent 
with Congress's intent as expressed in either the Adjustment Act or the 
Collection Act, or with the language in 49 U.S.C. 46301(a)(5) and 49 
U.S.C. 47107(n)(4). Therefore, we will not attempt to provide an 
adjustment to the ``otherwise applicable maximum'' civil penalty for 
cases arising under these provisions absent specific direction from 
Congress to the contrary. Neither shall we include a reference to this 
provision in the Table of Minimum and Maximum Civil Penalties in 14 CFR 
13.305(d).

Other Changes to the Table of Minimum and Maximum Civil Penalties

    In addition to adjusting the amounts of civil penalties to the 
existing Civil Penalties, we are making three other, minor changes to 
the Table of Minimum and Maximum Civil Penalties.
    First, we are updating the table to include new statutory 
provisions involving civil penalties. These provisions include:
    1. 49 U.S.C. 46301(a)(3)(C) relating to limiting the construction 
or establishment of landfills;
    2. 49 U.S.C. 46301(a)(3)(D) relating to the safe disposal of life-
limited aircraft parts;
    3. 49 U.S.C. 46318, relating to interference with cabin or flight 
crew. These additions will keep the Table current, with respect to the 
statutory provisions we are responsible for enforcing, even though most 
of these provisions have been recently enacted, and are not yet subject 
to adjustment for inflation.
    Second, in the column labeled ``Civil Monetary Penalty 
Description'' we are modifying the descriptions for clarity, especially 
to indicate that they include orders or other actions that are issued 
under statutory provisions, as appropriate.
    Third, in the columns labeled ``Minimum penalty amount as of 10/23/
96,'' ``Maximum penalty amount as of 10/23/96'' and ``New adjustment 
maximum penalty amount,'' we are deleting references to ``per flight or 
per day,'' as redundant to the provision for continuing violations in 
49 U.S.C. 46301(a)(4).

Paperwork Reduction Act

    This 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.

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA 
determined that there are no ICAO Standards and Recommended Practices 
that correspond to these regulations.

Executive Order 12866 and DOT Regulatory Policies and Procedures

    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. Our assessment of this proposal indicates that its 
economic impact is minimal. Since its costs and benefits do not make it 
a ``significant regulatory action'' as defined in the Order, 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 and Policies and Procedures. We do not need to do the latter 
analysis where the economic impact of a proposal is minimal.

Regulatory Evaluation

    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 regulation 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. The Department of Transportation 
Order DOT 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

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that effect and the basis for it is included in 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.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the Act requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The Act covers a wide-range of small 
entities, including small businesses, not-for-profit organizations and 
small governmental jurisdictions.
    Agencies must perform a review to determine whether a proposed or 
final rule will have a significant economic impact on a substantial 
number of small entities. If the determination is that it will have a 
significant impact, the agency must prepare a regulatory flexibility 
analysis as described in the Act.
    However, if an agency determines that a proposed or final rule is 
not expected to have a significant economic impact on a substantial 
number of small entities, section 605(b) of the 1980 act provides that 
the head of the agency may so certify and an 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.
    This action simply identifies the CPI adjustment for civil monetary 
penalties as required by the Debt Collection Improvement act of 1996. 
Consequently, the FAA certifies that the rule will not have a 
significant economic impact on a substantial number of small rotorcraft 
manufacturers.

International Trade

    The Trade Agreement 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 statue also requires consideration of 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 statue and policy, the FAA has 
assessed the potential effect of this final rule to be minimal and 
therefore has determined that this rule will not result in an impact on 
international trade by companies doing business in or with the United 
States.

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.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (the Act), enacted as 
Public Law 104-4 on March 22, 1995, is intended, among other things, to 
curb the practice of imposing unfunded Federal mandates on State, 
local, and tribal governments. Title II of the Act 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 a $100 million or more expenditure (adjusted annually for inflation) 
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.'' This final rule does not contain 
such a mandate. Therefore, the requirements of Title II of the Unfunded 
Mandates Reform Act of 1995 do not apply.

Plain Language

    In response to the June 1, 1998, Presidential memorandum regarding 
the use of plain language, the FAA re-examined the writing style 
currently used in the development of regulations. The memorandum 
requires federal agencies to communicate clearly with the public. We 
are interested in your comments on whether the style of this document 
is clear, and in any other suggestions you might have to improve the 
clarity of FAA communications that affect you. You can get more 
information about the Presidential memorandum and the plain language 
initiative at http://www.plainlanguage.gov.

List of Subjects

14 CFR part 13

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

The Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration amends part 13 of Title 14 of the Code of Federal 
Regulations as follows:

PART 13--INVESTIGATIVE AND ENFORCEMENT PROCEDURES

    1. The authority citation for part 13 continues 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. Amend Sec. 13.305 by revising paragraph (d) to read as follows:


Sec. 13.305  Cost of Living Adjustments of Civil Monetary Penalties

* * * * *
    (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 March 13, 2002.

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                                                                                                               Maximum penalty
                                     Civil monetary penalty                           New adjusted minimum   amount when last set     New or Adjusted
    United States Code citation            description       Minimum penalty amount      penalty amount      or adjusted pursuant     Maximum penalty
                                                                                                                    to law                 amount
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49 U.S.C. 5123(a)..................  Violations of           $250 per violation      $250 per violation...  $27,500 per violation  $30,000 per
                                      hazardous materials     adjusted 1/27/1997.                            adjusted 1/21/1997.    violation, adjusted
                                      transportation law,                                                                           effective 3/30/02.
                                      regulations, or
                                      orders..
49 U.S.C. 46301(a)(1)..............  Violations of           N/A...................  N/A..................  $1,100 per violation,  $1,100 per violation,
                                      statutory provisions                                                   adjusted 1/21/1997.    adjusted 1/21/1997.
                                      listed in 49 U.S.C.
                                      46301(a)(1),
                                      regulations
                                      prescribed, or orders
                                      issued under those
                                      provisions..
49 U.S.C. 46301(a)(2)..............  Violations of           N/A...................  N/A..................  $11,000 per            $11,000 per
                                      statutory provisions                                                   violation, adjusted    violation, adjusted
                                      listed in 49 USC                                                       1/21/1997.             1/21/1997.
                                      46301(a)(2),
                                      regulations
                                      prescribed, or orders
                                      issued under those
                                      provisions by a
                                      person operating an
                                      aircraft for the
                                      transportation of
                                      passengers or
                                      property for
                                      compensation.
49 U.S.C. 46301(a)(3)(A)...........  Violations of           N/A...................  N/A..................  $11,000 per            $11,000 per
                                      statutory provisions                                                   violation, adjusted    violation, adjusted
                                      listed in 49 U.S.C.                                                    1/21/1997.             1/21/1997.
                                      46301(a)(1),
                                      regulations
                                      prescribed, or orders
                                      issued under those
                                      provisions relating
                                      to the transportation
                                      of hazardous
                                      materials by air..
49 U.S.C. 46301(a)(3)(B)...........  Violations of           N/A...................  N/A..................  $11,000 per            $11,000 per
                                      statutory provisions                                                   violation, adjusted    violation, adjusted
                                      listed in 49 U.S.C.                                                    1/21/1997.             1/21/1997.
                                      46301(a)(1),
                                      regulations
                                      prescribed, or orders
                                      issued under those
                                      provisions relating
                                      to the registration
                                      or recordation under
                                      chapter 441 of Title
                                      49, United States
                                      Code, or an aircraft
                                      not used to provide
                                      air transportation..
49 U.S.C. 46301(a)(3)(C)...........  Violations of 49        N/A...................  N/A..................  $10,000, set 10/9/     $10,000, set 10/9/
                                      U.S.C. 44718(d), or                                                    1996.                  1996.
                                      regulations
                                      prescribed or orders
                                      issued under it,
                                      relating to limiting
                                      construction or
                                      establishment of
                                      landfills.
49 U.S.C. 46301(a)(3)(D)...........  Violations of 49        N/A...................  N/A..................  $10,000, adopted 4/5/  $10,000, adopted 4/5/
                                      U.S.C. 44725, or                                                       2000.                  2000.
                                      regulations
                                      prescribed or orders
                                      issued under it,
                                      relating to the safe
                                      disposal of life-
                                      limited aircraft
                                      parts.
49 U.S.C. 46301(b).................  Tampering with a smoke  N/A...................  N/A..................  $2,200 per violation,  $2,200 per violation,
                                      alarm device..                                                         adjusted 1/21/1997.    adjusted 1/21/1997.
49 U.S.C. 46302....................  Knowingly providing     N/A...................  N/A..................  $11,000 per            $11,000 per violation
                                      false information                                                      violation, adjusted    adjusted 1/21/1997.
                                      about alleged                                                          1/21/1997.
                                      violations involving
                                      the special aircraft
                                      jurisdiction of the
                                      United States..
49 U.S.C. 46303....................  Carrying a concealed    N/A...................  N/A..................  $11,000 per            $11,000 per
                                      dangerous weapon.                                                      violation, adjusted    violation, adjusted
                                                                                                             1/21/1997.             1/21/1997.
49 U.S.C. 46318....................  Interference with       N/A...................  N/A..................  $25,000 per            $25,000 per
                                      cabin or flight crew.                                                  violation, adopted 4/  violation, adopted 4/
                                                                                                             5/2000.                5/2000.
--------------------------------------------------------------------------------------------------------------------------------------------------------


    Issued in Washington, DC, on December 27, 2001.
Jane F. Garvey,
Administrator.
[FR Doc. 02-3240 Filed 2-8-02; 8:45 am]
BILLING CODE 4910-13-M