[Federal Register Volume 75, Number 105 (Wednesday, June 2, 2010)]
[Rules and Regulations]
[Pages 30690-30693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13218]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 406
[Docket No. FAA-2009-1240; Amendment No. 406-6]
RIN 2120-AJ63
Civil Penalty Inflation Adjustment for Commercial Space
Adjudications
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule brings Federal Aviation Administration
commercial space transportation regulations into compliance with the
Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by
the Debt Collection Improvement Act of 1996. The rule makes mandatory
inflation-based adjustments to the maximum civil penalty contained in
14 CFR part 406 authorized for violations of the Commercial Space
Launch Act of 1984, as codified at 49 U.S.C. subtitle IX, ch. 701,
Commercial Space Launch Activities.
DATES: This amendment becomes effective July 2, 2010.
FOR FURTHER INFORMATION CONTACT: Laura Montgomery, Senior Attorney,
Office of the Chief Counsel, Regulations Division, AGC-200, Federal
Aviation Administration, 800 Independence Avenue, SW., Washington, DC
20591; telephone (202) 267-3150; facsimile (202) 267-7971; e-mail
[email protected].
SUPPLEMENTARY INFORMATION:
Authority for This Rulemaking and Applicable Statutes
The statute under which the Secretary of Transportation regulates
commercial space transportation, 49 U.S.C. Subtitle IX, sections 70101-
70121 (chapter 701), provides for the Department of Transportation
(DOT), and, through delegation, the Federal Aviation Administration
(FAA) to impose civil penalties on persons who violate chapter 701, a
regulation issued under chapter 701, or any term or condition of a
license or permit issued or transferred under chapter 701. 49 U.S.C.
70105a(h)(i), 70115.
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 of 1996, Public Law 104-
134, codified at 28 U.S.C. 2461 note.
[[Page 30691]]
The FCPIAA requires Federal agencies to adjust minimum and maximum
civil penalty amounts for inflation to preserve their deterrent impact.
Under these laws, each agency must make an initial inflationary
adjustment for all applicable civil monetary penalties, and further
adjust these penalties at least once every 4 years. The FCPIAA required
the first adjustment to the maximum civil penalty found in 14 CFR part
406 to have been made in 1996.
Prior Rulemakings
This rule is the FAA's initial adjustment to the maximum civil
penalty found in 14 CFR part 406 which governs commercial space
transportation adjudications. The FAA has routinely adjusted for
inflation civil monetary penalties for aviation contained in 14 CFR
part 13. [See 61 FR 67445, Dec. 20, 1996, as amended by Amdt. 13-28, 62
FR 4134, Jan. 29, 1997; 67 FR 6366, Feb. 11, 2002; Amdt. 13-33, 71 FR
28522, May 16, 2006; 71 FR 47077, Aug. 16, 2006; 71 FR 52407, Sept. 6,
2006.]
Background
The FCPIAA determines inflationary adjustments by increasing civil
penalties by a cost-of-living adjustment (COLA). The COLA for each
civil penalty is the percentage by which the U.S. Department of Labor's
Consumer Price Index for all-urban consumers (CPI-U) for the month of
June of the calendar year preceding the adjustment exceeds the CPI-U
for the month of June of the calendar year in which the amount of such
civil penalty was last set or adjusted pursuant to the FCPIAA. The
FCPIAA contains specific rules for rounding the inflationary increase
based on the initial amount of the civil penalty being adjusted.
However, the FCPIAA limits the increase to a maximum of ten percent for
the first adjustment. This limitation does not apply to subsequent
adjustments.
Method of Calculation
14 CFR 406.9 states that under 49 U.S.C. 70115(c)(1)(a) a maximum
civil penalty of $100,000 is imposed for violations of chapter 701, a
regulation proscribed under chapter 701, or any term or condition of a
license or permit issued or transferred under chapter 701. However,
this rulemaking is our initial adjustment and any adjustment in civil
penalty is limited by statute to a maximum ten percent increase. Thus,
instead of using the COLA, the penalty is increased by ten percent of
$100,000, which is $10,000. Therefore, the new civil penalty becomes
$110,000 ($100,000 + $10,000).
Four years from now, when the next adjustment is due, we will
employ the COLA methodology. It works as follows, using the current
year only as an example. Were we using the COLA method this year, we
would first determine the appropriate CPI-U for June of the calendar
year preceding the year of adjustment. For an adjustment in 2010, we
would use the CPI-U for June of 2009, which was 215.693. We would also
determine the CPI-U for June of the year the civil penalty came into
force. Because the civil penalty came into force in 1984, we would use
the CPI-U for June of 1984, which was 103.7.
Second, we would calculate the COLA. To do this we would subtract
the CPI-U for June 1984 (103.7) from the CPI-U of June 2009 (215.693).
Next, we would divide the resulting difference (111.993) by the CPI-U
for June 1984 (103.7). The resulting quotient (1.07997) is then
multiplied by 100 yielding a COLA of 107.997%.
Were this not our initial adjustment, we would calculate the raw
inflationary increase by multiplying the maximum civil penalty
($100,000) by the COLA (107.997%). This would provide a raw inflation
increase of $107,997. Next, we would round the raw inflation amounts by
the statutory rounding formula found in Section 5(a) of the FCPIAA.
Determination of the proper rounding formula depends on the current
amount of the civil penalty at the time the calculation is made, not
the size of the raw inflationary increase. The applicable rounding
formula for the existing civil penalty of $100,000 would be that
``[a]ny increase * * * is rounded to the nearest * * *[m]ultiple of
$5,000 in the case of penalties greater than $10,000 but less than or
equal to $100,000 * * *'' Thus, the raw increase of $107,997 would
become $105,000 after rounding. Finally, the increase of $105,000 would
be added to the initial civil penalty $100,000 for an adjusted civil
penalty of $205,000.
Good Cause for Immediate Effectiveness of Final Rule
Under the Administrative Procedure Act, 5 U.S.C. 553(b)(3)(B), a
final rule may be issued without public notice and comment if the
agency finds good cause that notice and comment are impractical,
unnecessary, or contrary to public interest. Good cause exists in this
rule to dispense with public notice and comment because adjustments to
civil penalties for inflation are required by Congress, as set forth in
Section 5 of the FCPIAA, in order to maintain the deterrent effect of
civil penalties and promote compliance with the law. This rulemaking is
ministerial, technical, and noncontroversial. The FCPIAA serves as a
Congressional mandate and the FAA may not exercise any discretion or
policy judgments. The FAA has no discretion as to the amount of the
adjustment. Furthermore, it would be contrary to the public interest to
delay these adjustments in order to receive public comment because the
regulation concerns a civil penalty for conduct that is already illegal
under existing law. Also, any delay would be unnecessary as the FAA
cannot change the method of application of the mandatory inflation
adjustment as defined by the FCPIAA.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995, 44 U.S.C. 3507(d), requires
that the FAA consider the impact of paperwork and other information
collection burdens imposed on the public. The FAA has determined that
there are no current or new requirements for information collection
associated with this rule.
International Compatibility
In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is FAA policy to conform to
International Civil Aviation Organization (ICAO) Standards and
Recommended Practices to the maximum extent practicable. The FAA has
determined that there are no ICAO Standards and Recommended Practices
that correspond to these regulations.
Regulatory Evaluation, Regulatory Flexibility Determination,
International Trade Impact Assessment, and Unfunded Mandates Assessment
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 (RFA), Public Law 96-
354, codified at 5 U.S.C. 601-612, as amended by the Small Business
Regulatory Enforcement Fairness Act of 1996, Public Law 104-121,
requires agencies to analyze the economic impact of regulatory changes
on small entities. Third, the Trade Agreements Act of 1999 (Trade Act),
Public Law 96-39, codified at 19 U.S.C. 2501-2581, prohibits agencies
from setting standards that create unnecessary obstacles to the foreign
commerce of the U.S. In developing U.S. standards, the Trade Act
requires agencies to consider
[[Page 30692]]
international standards and, where appropriate, that they be the basis
of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995,
(Pub. L. 104-4), codified at 2 U.S.C. 658, 1501-03, and 1531-34,
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).
DOT Order 2100.5 prescribes policies and procedures for
simplification, analysis, and review of regulations. If the expected
impact is so minimal that a proposed or final rule does not warrant a
full evaluation, this order permits that a statement to that effect and
the basis for it be included in the preamble if a full regulatory
evaluation of the cost and benefits is not prepared. Such a
determination has been made for this final rule. The reasoning for this
determination is as follows. This rule adjusts for inflation the
maximum civil penalty for violations of the Commercial Space Launch Act
of 1984, to be in compliance with the Federal Civil Penalties Inflation
Adjustment Act of 1990. This inflation adjustment is an economic
transfer and not a social cost.
Regulatory Flexibility Determination
The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA)
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and of applicable
statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions
subject to regulation. To achieve this principle, agencies are required
to solicit and consider flexible regulatory proposals and to explain
the rationale for their actions to assure that such proposals are given
serious consideration.'' The RFA 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 rule will
have a significant economic impact on a substantial number of small
entities. If the agency determines that it will, the agency must
prepare a regulatory flexibility analysis as described in the RFA.
However, if an agency determines that a rule is not expected to
have a significant economic impact on a substantial number of small
entities, section 605(b) of the RFA provides that the head of the
agency may so certify and a 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.
As already noted, this rule adjusts for inflation only, as required
by the Federal Civil Penalties Inflation Adjustment Act of 1990.
Therefore, as FAA Administrator, I certify that this rule will not have
a significant economic impact on a substantial number of small
entities.
International Trade Impact Assessment
The Trade Agreements Act of 1979 (Pub. L. 96-39) prohibits Federal
agencies from establishing any standards or engaging in 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
consideration of international standards and, where appropriate, that
they be the basis for U.S. standards.
The FAA has assessed the potential effect of this final rule and
determined that it would impose identical inflation adjusted civil
penalties on domestic and international entities that violate 14 CFR
part 406, and thus would have a neutral trade impact. Furthermore, the
inflationary adjustment is a legitimate domestic objective preserving
the existing deterrent impact of 49 U.S.C. subtitle IX, chapter 701.
Therefore, we have determined that this rule will result in a neutral
impact on international trade.
Unfunded Mandates Assessment
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) 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 with the base year 1995) 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.'' The FAA currently uses an inflation-adjusted value
of $143.1 million in lieu of $100 million.
Because this final rule only increases a civil penalty by $10,000,
as required by FCPIAA, it does not contain a mandate that meets this
threshold amount. Therefore, the requirements of Title II of the act do
not apply.
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.
Environmental Analysis
FAA Order 1050.1E defines FAA actions that are categorically
excluded from preparation of an environmental assessment or
environmental impact statement under the National Environmental Policy
Act (NEPA) in the absence of extraordinary circumstances. The FAA has
determined this final rule qualifies for the categorical exclusion
identified in Chapter 3, paragraph 312d, and involves no extraordinary
circumstances.
Regulations That Significantly Affect Energy Supply, Distribution, or
Use
The FAA has analyzed this final rule under Executive Order 13211,
Actions Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use (May 18, 2001). We have determined that it is not
a ``significant energy action'' under the executive order because it is
not a ``significant regulatory action'' under Executive Order 12866,
and it is not likely to have a significant adverse effect on the
supply, distribution, or use of energy.
Availability of Rulemaking Documents
You can get an electronic copy of rulemaking documents using the
Internet by--
1. Searching the Federal eRulemaking Portal (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.gpoaccess.gov/fr/index.html.
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.
Anyone is able to search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act
[[Page 30693]]
statement in the Federal Register published on April 11, 2000 (Volume
65, Number 70; Pages 19477-78) or you may visit http://DocketsInfo.dot.gov.
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. If you are a small entity and you have a question
regarding this document, you may contact your local FAA official, or
the person listed under the FOR FURTHER INFORMATION CONTACT heading at
the beginning of the preamble. You can find out more about SBREFA on
the Internet at http://www.faa.gov/regulations_policies/rulemaking/sbre_act/.
List of Subjects in 14 CFR Part 406
Administrative procedure and review, Commercial space
transportation, Enforcement, Investigations, Penalties, Rules of
adjudication.
The Amendment
0
In consideration of the foregoing, the Federal Aviation Administration
amends part 406 of Title 14, Code of Federal Regulations as follows:
PART 406--INVESTIGATIONS, ENFORCEMENT, AND ADMINISTRATIVE REVIEW
0
1. The authority citation for part 406 continues to read as follows:
Authority: 49 U.S.C. 70101-70121.
0
2. Amend Sec. 406.9 by revising paragraph (a) to read as follows:
Sec. 406.9 Civil penalties.
(a) Civil penalty liability. Under 49 U.S.C. 70115(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 $110,000 for each
violation, as adjusted for inflation. A separate violation occurs for
each day the violation continues.
* * * * *
Issued in Washington, DC, on May 25, 2010.
J. Randolph Babbitt,
Administrator.
[FR Doc. 2010-13218 Filed 6-1-10; 8:45 am]
BILLING CODE 4910-13-P