Revisions to the Civil Penalty Inflation Adjustment Tables

[Federal Register Volume 81, Number 128 (Tuesday, July 5, 2016)] [Rules and Regulations] [Pages 43463-43469] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 2016-15744]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 13 and 406

[Docket No. FAA-2016-7004; Amdt. Nos. 13-38, 406-10] RIN 2120-AK90

Revisions to the Civil Penalty Inflation Adjustment Tables

AGENCY: Federal Aviation Administration, DOT.

ACTION: Interim final rule.

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SUMMARY: This interim final rule is the catch-up inflation adjustment to civil penalty amounts that may be imposed

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for violations of Federal Aviation Administration regulations, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

DATES: These amendments become effective August 5, 2016.

FOR FURTHER INFORMATION CONTACT: Cole R. Milliard, Attorney, Office of the Chief Counsel, Enforcement Division, AGC-300, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone (202) 267-3452; email [email protected].

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking and Applicable Statutes

The Federal Aviation Administration (FAA's) authority to issue rules on aviation safety is found in title 49 of the United States Code. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. The Secretary of Transportation's authority to regulate the transportation of hazardous materials (``hazmat'') by air is in chapter 51 of title 49; civil penalty authority is in section 5123. The Secretary's authority to regulate commercial space transportation may be found at 51 U.S.C. subtitle V, sections 50901-50923 (chapter 509), which provides for the Department of Transportation (DOT), and, through delegation, the FAA to impose civil penalties on persons who violate chapter 509, a regulation issued under chapter 509, or any term or condition of a license or permit issued or transferred under chapter 509. 51 U.S.C. 50906(h)-(i), 50917. This rule implements the Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), Public Law (Pub. L.) 101-410, as amended by the Debt Collection Improvement Act (DCIA) of 1996, Public Law 104-134, and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act), Public Law 114-74, codified at 28 U.S.C. 2461 note. The FCPIAA, DCIA, and the 2015 Act require Federal agencies to adjust minimum and maximum civil penalty amounts for inflation to preserve their deterrent impact. The 2015 Act amended the formula and frequency of inflation adjustments. It requires an initial catch-up adjustment in the form of an interim final rule, followed by annual adjustments of penalty amounts. The amount of the adjustment must be made using a strict statutory formula discussed in more detail below.

Background

The FCPIAA determines inflationary adjustments by increasing civil penalties by a cost-of-living adjustment (COLA). Under the FCPIAA, as amended by the 2015 Act, the COLA for each civil penalty is normally the percent change between the U.S. Department of Labor's Consumer Price Index for all-urban consumers (CPI-U) for the month of October of the calendar year preceding the adjustment and the CPI-U for the month of October of the previous calendar year. However, under the 2015 Act, the FAA must first use a different ``catch-up adjustment'' formula. To determine the amount of the catch- up, it must use the percent change between the CPI-U from the October of the calendar year in which the penalty was last set or adjusted by statute or regulation other than by inflation adjustments under the FCPIAA and the CPI-U from the October preceding the adjustment. The increase must be rounded to the nearest $1, and can be no greater than 150% of the penalty levels in effect on the date of the 2015 Act's enactment, which was November 2, 2015.

Method of Calculation

The 2015 Act directed the Office of Management and Budget (OMB) to issue guidance on implementing the inflation adjustments required by the 2015 Act no later than February 29, 2016.\1\ On February 24, 2016, the OMB released this required guidance, which contains complete instructions on how to calculate the catch-up adjustment.\2\ An agency calculates the catch-up adjustment by multiplying the maximum or minimum penalty amount by a multiplier calculated based on the year the penalty was last set or adjusted by Congress or rulemaking (other than inflation adjustments under the FCPIAA). As examples, here are how the adjustments for 49 U.S.C. 5123(a)(1) (hazmat) and 51 U.S.C. 50917 (commercial space) were calculated: ---------------------------------------------------------------------------

\1\ 28 U.S.C. 2461 note. \2\ OMB Memorandum M-16-06. ---------------------------------------------------------------------------

(1) Find the multiplier listed in the OMB guidance for the year the penalty was last set or reset. Section 5123 was last adjusted in 2012, so the multiplier is 1.02819. Section 50917 was last set in 1984, so the multiplier is 2.25867. (2) Multiply the penalty amount by the multiplier, and round to the nearest dollar.

$75,000 * 1.02819 = $77,114 $100,000 * 2.25867 = $225,867

(3) Multiply the 2015 penalty amount (including any prior adjustments under the Inflation Adjustment Act) by 2.5,\3\ and round to the nearest dollar to find the 150% cap for the catch-up adjustment.

$75,000 * 2.5 = $187,500 $120,000 * 2.5 = $300,000

\3\ It is 2.5 rather than 1.5 because the cap is described in terms of the amount of the increase; that is, the amount added to the penalty as a catch-up cannot be greater than 150% of the penalty, rather than being limited to 150% of the penalty itself. 28 U.S.C. 2461 note (``The amount of the increase in a civil monetary penalty . . . shall not exceed 150 percent of the amount of that civil monetary penalty on the date of enactment''). Thus, the cap is x + 1.5x = 2.5x, where x is the penalty amount. ---------------------------------------------------------------------------

(4) Compare the dollar amount from (3) to the dollar amount in (2). If (2) (3), the 150% cap is applied and becomes the adjusted penalty. $77,114 http://www.regulations.gov); 2. Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies; or 3. Accessing the Government Printing Office's Web page at http://www.gpo.gov/fdsys. You can also get a copy by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Make sure to identify the amendment number or docket number of this rulemaking.

List of Subjects

14 CFR Part 13

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

14 CFR Part 406

Administrative procedure and review, Commercial space transportation, Enforcement, Investigations, Penalties, Rules of adjudication.

The Amendment

In consideration of the foregoing, the Federal Aviation Administration amends chapters I and III of title 14, Code of Federal Regulations as follows:

CHAPTER I--FEDERAL AVIATION ADMINISTRATION, DEPARTMENT OF TRANSPORTATION

PART 13--INVESTIGATIVE AND ENFORCEMENT PROCEDURES

0 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), 5121-5128, 40113-40114, 44103-44106, 44701-44703, 44709- 44710, 44713, 46101-46111, 46301, 46302 (for a violation of 49 U.S.C. 46504), 46304-46316, 46318, 46501-46502, 46504-46507, 47106, 47107, 47111, 47122, 47306, 47531-47532; 49 CFR 1.47.

0 2. Amend Sec. 13.301 by revising paragraph (a) and adding paragraph (c) to read as follows:

Sec. 13.301 Scope and purpose.

(a) This subpart 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 under title 49 of the U.S. Code. These penalties have been adjusted for inflation 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, and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Public Law 114-74, November 2, 2015, in order to maintain the deterrent effect of civil monetary penalties and to promote compliance with the law. * * * * * (c) Minimum and maximum civil monetary penalties within the jurisdiction of the FAA are as follows:

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Table of Minimum and Maximum Civil Monetary Penalty Amounts for Certain Violations Occurring on or After August 1, 2016 -------------------------------------------------------------------------------------------------------------------------------------------------------- New or adjusted Maximum penalty amount New or adjusted United States Code citation Civil monetary penalty Minimum penalty minimum when last set or maximum penalty description amount penalty adjusted by Congress amount amount -------------------------------------------------------------------------------------------------------------------------------------------------------- 49 U.S.C. 5123(a), subparagraph (1). Violation of hazardous Deleted 7/6/2012....... N/A $75,000 per violation, $77,114. materials transportation adjusted 7/6/2012. law. 49 U.S.C. 5123(a), subparagraph (2). Violation of hazardous Deleted 7/6/2012....... N/A $175,000 per $179,933. materials transportation violation, adjusted 7/ law resulting in death, 6/2012. serious illness, severe injury, or substantial property destruction. 49 U.S.C. 5123(a), subparagraph (3). Violation of hazardous $450 per violation, set $537 $75,000 per violation, $77,114. materials transportation 8/10/2005. adjusted 7/6/2012. law relating to training. 49 U.S.C. 46301(a)(1)............... Violation by a person other N/A.................... N/A $25,000 per violation, $32,140. than an individual or set 12/12/2003. small business concern under 49 U.S.C. 46301(a)(1)(A) or (B). 49 U.S.C. 46301(a)(1)............... Violation by an airman N/A.................... N/A $1,100 per violation, $1,414. serving as an airman under adjusted 12/12/2003. 49 U.S.C. 46301(a)(1)(A) or (B) (but not covered by 46301(a)(5)(A) or (B). 49 U.S.C. 46301(a)(1)............... Violation by an individual N/A.................... N/A $1,100 per violation, $1,414. or small business concern adjusted 12/12/2003. under 49 U.S.C. 46301(a)(1)(A) or (B) (but not covered in 49 U.S.C. 46301(a)(5)). 49 U.S.C. 46301(a)(3)............... Violation of 49 U.S.C. N/A.................... N/A Increase above No change. 47107(b) (or any assurance otherwise applicable made under such section) maximum amount not to or 49 U.S.C. 47133. exceed 3 times the amount of revenues that are used in violation of such section. 49 U.S.C. 46301(a)(5)(A)............ Violation by an individual N/A.................... N/A $10,000 per violation, $12,856. or small business concern set 12/12/2003. (except an airman serving as an airman) under 49 U.S.C. 46301(a)(5)(A)(i) or (ii). 49 U.S.C. 46301(a)(5)(B)(i)......... Violation by an individual N/A.................... N/A $10,000 per violation, $12,856. or small business concern set 12/12/2003. related to the transportation of hazardous materials. 49 U.S.C. 46301(a)(5)(B)(ii)........ Violation by an individual N/A.................... N/A $10,000 per violation, $12,856. or small business concern set 12/12/2003. related to the registration or recordation under 49 U.S.C. chapter 441, of an aircraft not used to provide air transportation. 49 U.S.C. 46301(a)(5)(B)(iii)....... Violation by an individual N/A.................... N/A $10,000 per violation, $12,856. or small business concern set 12/12/2003. of 49 U.S.C. 44718(d), relating to limitation on construction or establishment of landfills. 49 U.S.C. 46301(a)(5)(B)(iv)........ Violation by an individual N/A.................... N/A $10,000 per violation, $12,856. or small business concern set 12/12/2003. of 49 U.S.C. 44725, relating to the safe disposal of life-limited aircraft parts. 49 U.S.C. 46301(b).................. Tampering with a smoke N/A.................... N/A $2,000 per violation, $4,126. alarm device. set 12/22/1987. 49 U.S.C. 46302..................... Knowingly providing false N/A.................... N/A $10,000 per violation, $22,587. information about alleged set 10/12/1984. violation involving the special aircraft jurisdiction of the United States. 49 U.S.C. 46318..................... Interference with cabin or N/A.................... N/A $25,000, set 4/5/2000. $34,172. flight crew. 49 U.S.C. 46319..................... Permanent closure of an N/A.................... N/A $10,000 per day, set $12,856. airport without providing 12/12/2003. sufficient notice. 49 U.S.C. 47531..................... Violation of 49 U.S.C. N/A.................... N/A See 49 U.S.C. No change. 47528-47530, relating to 46301(a)(1)(A) and the prohibition of (a)(5), above. operating certain aircraft not complying with stage 3 noise levels. --------------------------------------------------------------------------------------------------------------------------------------------------------

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Sec. Sec. 13.303 and 13.305 [Removed]

0 3. Remove Sec. Sec. 13.303 and 13.305.

CHAPTER III--COMMERCIAL SPACE TRANSPORTATION, FEDERAL AVIATION ADMINISTRATION, DEPARTMENT OF TRANSPORTATION

PART 406--INVESTIGATIONS, ENFORCEMENT, AND ADMINISTRATIVE REVIEW

0 4. The authority citation for part 406 continues to read as follows:

Authority: 51 U.S.C. 50901-50923.

0 5. Revise Sec. 406.9(a) to read as follows:

Sec. 406.9 Civil penalties.

(a) Civil penalty liability. Under 51 U.S.C. 50917(c), a person found by the FAA to have violated a requirement of the Act, a regulation issued under the Act, or any term or condition of a license or permit issued or transferred under the Act, is liable to the United States for a civil penalty of not more than $225,867 for each violation. A separate violation occurs for each day the violation continues. * * * * *

Issued under authority provided by 28 U.S.C. 2461 and 49 U.S.C. 106(f), 44701(a), and 46301 in Washington, DC, on June 23, 2016. Michael P. Huerta, Administrator. [FR Doc. 2016-15744 Filed 7-1-16; 8:45 am] BILLING CODE 4910-13-P