Civil Penalties: Streamlined Enforcement Test and Evaluation Program; Final Rule DEPARTMENT OF TRANSPORTATION

SUMMARY: This Special Federal Aviation Regulation (SFAR) establishes a

test and evaluation program designed to streamline the procedures used

to process certain civil penalty enforcement actions. The program is

being tested as a result of recommendations made by the Vice

President's National Performance Review. If successful, the procedures

and delegation of authority outlined in this SFAR may be made

permanent.

DATES: This SFAR is effective August 26, 1994 through August 26, 1996.

Comments must be submitted on or before October 25, 1994.

ADDRESSES: Comments on this SFAR may be delivered or mailed, in

triplicate, to the Federal Aviation Administration, Office of the Chief

Counsel, Attention: Rules Docket (AGC-200), Docket No. 27873, 800

Independence Avenue, SW., Room 915G, Washington, DC 20591. Comments

submitted must be marked: ``Docket No. 27873.'' Comments may be

inspected in Room 915G between 8:30 a.m. and 5 p.m. on weekdays, except

Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Brian R. Reed, Attorney, Enforcement Division (AGC-320), Federal

Aviation Administration, 800 Independence Ave., SW., Washington, DC

20591; telephone (202) 267-7158.

SUPPLEMENTARY INFORMATION:

Comments Invited

The changes in this rule are temporary and involve matters of

agency organization, procedure, and practice only. Accordingly, the

rule changes are being adopted without notice and prior public comment.

The FAA, however, recognizes that the participation of the public may

add significantly to the rulemaking process. Interested persons are,

therefore, invited to comment by submitting such written data, views,

or arguments as they may desire. Comments relating to environmental,

energy, federalism, or economic impacts that might result from adopting

this rule are also invited. Substantive comments should be accompanied

by cost estimates. Comments must include the regulatory docket number

and be submitted in triplicate to the address above. All comments

received, as well as a report summarizing each substantive public

contact with FAA personnel on this rulemaking, will be filed in the

docket. The docket is available for public inspection before and after

the comment closing date.

All comments received on or before the close of the comment period

will be considered by the Administrator. This rule may be changed in

light of the comments received.

Commenters wishing the FAA to acknowledge receipt of their comments

submitted in response to this rule must submit a pre-addressed, stamped

postcard with those comments on which the following statement is made:

``Comments to Docket No. 27873.'' The postcard will be date-stamped by

the FAA and returned to the commenter.

Availability of SFAR

Any person may obtain a copy of this SFAR by submitting a request

to the Federal Aviation Administration, Office of Public Affairs,

Attention: Public Inquiry Center (APA-200), 800 Independence Avenue,

SW., Washington, DC 20591, or by calling (202) 267-3484. Requests must

include the amendment or docket number.

Persons interested in being placed on a mailing list for future

rulemaking actions should request a copy of Advisory Circular 11-2A,

Notice of Proposed Rulemaking Distribution System, which describes the

application procedure.

Background

The FAA has authority to assess civil penalties not to exceed

$50,000 for certain violations of the Federal Aviation Act of 1958 (49

U.S.C. App. 1301 et seq.), the FAA's regulations (14 CFR parts 1-199),

and certain other statutes and orders. (49 U.S.C. App. 1471(a)(3)). In

the case of persons other than those acting in the capacity of a pilot,

flight engineer, mechanic, or repairman, the procedures for civil

penalty assessment actions are those contained in Sec. 13.16 and part

13, subpart G of the FAA's regulations. The current civil penalty

assessment process for these actions is outlined below.

During the investigation phase, FAA investigative personnel

ordinarily notify alleged violators of an agency investigation by

issuing a letter of investigation. This notification is described in

FAA Order 2150.3A, the FAA's Compliance and Enforcement Program, but is

not required by statute, regulation, or that order. Following an

investigation, a civil penalty may be assessed only after notice of the

proposed charges and an opportunity for a hearing. This process is

begun by issuing a notice of proposed civil penalty to an alleged

violator (respondent). Section 13.16(c) delegates the authority to the

FAA's Deputy Chief Counsel and certain Assistant Chief Counsel in the

regions, centers, and headquarters to issue such notices.

Respondents have several options to respond to the notice of

proposed civil penalty. The person charged with a violation is required

to do one of the following:

(1) Submit the amount of the proposed civil penalty or an agreed-

upon lower amount.

(2) Submit written information demonstrating that the violation did

not occur, or that a penalty or the penalty amount is not warranted

under the circumstances.

(3) Submit a request for a reduction of the proposed civil penalty,

including the amount of reduction along with supporting reasons and

documentation, such as records indicating a financial inability to pay

the proposed penalty.

(4) Submit a written request for an informal conference to discuss

the matter with an agency attorney and submit relevant information or

documents.

(5) Request a hearing before an administrative law judge (ALJ) of

the Department of Transportation (DOT) Office of Hearings.

If a respondent does not respond to the notice of proposed civil

penalty, or chooses to proceed informally in response to a notice of

proposed civil penalty, and the matter is not resolved, the FAA

attorney then serves a final notice of proposed civil penalty. The

respondent must either request a hearing before an ALJ or pay the

amount of the proposed civil penalty, or an agreed-upon amount, within

15 days of receipt of the final notice. If neither a penalty is paid

nor a hearing is requested during the 15-day period, the FAA attorney

serves an order assessing civil penalty, which contains a finding of

violation and assesses a civil penalty. That order is final and not

appealable.

On September 7, 1993, the Vice President's National Performance

Review published a report entitled ``From Red Tape to Results: Creating

a Government that Works Better and Costs Less.'' That report included a

recommendation that the FAA streamline its civil penalty enforcement

program by eliminating several of the procedural steps it takes to

issue civil penalties in certain minor, uncontested cases. The FAA has

determined that streamlined procedures would be most appropriately

applied to those legal enforcement actions that facially appear to be

simple and factually straightforward. The SFAR adopts interim changes

to the existing rules governing procedures and delegation of authority

that are designed to enhance the efficiency and effectiveness of the

processing of civil penalty assessment actions in these types of cases.

The National Performance Review indicates that a streamlined

enforcement process may reduce costs, improve efficiency, and enhance

safety by notifying individuals of certain violations and processing

these actions within reduced time frames.

In addition to shortening the time for initiating certain cases, it

is expected that this test program also will encourage prompt

settlement of proposed civil penalties in these cases. The program will

not eliminate an individual's opportunity to request a hearing or

otherwise contest a proposed civil penalty. This SFAR will be effective

for two years, unless sooner canceled.

Discussion of Rule

Scope

These regulatory changes initially will be tested in certain civil

penalty assessment actions resulting from violations occurring in two

FAA regions (Great Lakes and Southwest) at three airports (Dallas/Forth

Worth International Airport, O'Hare International Airport, and

Indianapolis International Airport). The program may be extended to

violations at other airports or regions during the duration of the test

program.

In addition, the test program will apply only to alleged violations

by individuals presenting dangerous or deadly weapons for screening at

airports or in checked baggage, for which a civil penalty less than

$5,000 is proposed. While the FAA considers these violations to be

serious, the initial evaluation and processing of these cases tends to

be uncomplicated. Violations of weapons prohibitions, on the other

hand, for which a penalty of $5,000 or more is sought ordinarily are

more factually complex and involve evidence of several aggravating

factors. As a result, these cases tend to be more difficult to process,

and, therefore, would not be appropriate for handling under the test

program. The FAA does not intend to apply this program to complex civil

penalty actions, including factually complicated cases under $5,000.

If the program is successful in streamlining the civil penalty

enforcement process for the cases described above, the FAA will

consider amending this rule to extend the program to include other

relatively simple violations warranting civil penalty action.

Procedures and Delegations

The test program will involve several changes to current

enforcement practice. The test program dispenses with the FAA's current

practice of ordinarily issuing to the alleged violator a letter of

investigation seeking information about the alleged violation.

Experience has indicated that in the majority of factually clear,

uncomplicated cases, the respondent often does not provide additional

relevant information that is not already known to the FAA. The

information received by the FAA from local law enforcement offices

regarding weapons violations at airport screening checkpoints tends to

be complete and beyond serious dispute. A respondent, however, will

continue to have an opportunity to make any statements and submit any

evidence regarding the alleged violation following notification of the

alleged violation.

FAA Office of Civil Aviation Security Division Managers and Deputy

Division Managers, instead of FAA attorneys, will initiate a legal

enforcement action by issuing a notice of violation (NOV) to the

respondent. The NOV will cite the relevant facts and circumstances

pertaining to the alleged infraction and will include a proposed civil

penalty amount. The authority to issue NOVs will not be delegated below

the division level. By delegating to the Office of Civil Aviation

Security the authority to send the initial notification to a respondent

of an alleged violation, the FAA believes that it can reduce

significantly the time currently expended before a respondent is given

this notification. The name and phone number of a security agent

involved in the investigation will be included in the NOV in case the

respondent has any questions about the action being proposed.

The NOV will serve the same purpose that the notice of proposed

civil penalty now serves under current procedures. The NOV, however,

will include the following specific information:

(1) A description of the alleged violation;

(2) The proposed amount of civil penalty;

(3) An offer of settlement of the case, if appropriate, as

described below;

(4) The name and phone number of an FAA security special agent

involved in the investigation of the violation;

(5) Information regarding informal procedures; and

(6) Information on how to request a formal hearing before a DOT

ALJ.

In appropriate cases, the agency may extend to the respondent a

settlement offer to resolve the case immediately with a reduction of

the proposed civil penalty, on the condition that the penalty is paid

or a commitment to pay is made within 30 days. In conjunction with the

publication of this rule, the FAA will issue guidance on the exercise

of its discretionary settlement authority in these cases as well as

other similar cases not covered by the test and evaluation program.

This guidance will be published in Appendix 1 of FAA Order 2150.3A,

Compliance and Enforcement Program, and may be changed during the test

program.

The FAA believes that swifter notification of a violation, coupled,

in most cases, with an immediate offer of settlement, may encourage

quick resolution of simple cases while, at the same time, having no

negative impact on the effectiveness of the enforcement process. The

National Performance Review studied a similar program offered by the

Federal Highway Administration and found that approximately 40 percent

of proposed civil penalties were paid in this manner within 30 days.

The provisions of this SFAR will not limit the respondent's rights

in any way. An individual may choose to proceed under the current

informal and formal procedures, including requesting an informal

conference with an FAA attorney or formal hearing before a DOT ALJ. If

the FAA and respondent are unable to resolve the case informally, or if

the respondent fails to respond to the NOV within 30 days after

receiving it, a final notice of violation and civil penalty assessment

order (``final notice and order'') will be issued to the respondent.

This document serves two purposes:

(1) It provides a second opportunity for the respondent to request

a hearing on the record before a DOT ALJ; and

(2) It becomes an order assessing a civil penalty if the respondent

pays the civil penalty proposed in the final notice and order, or the

respondent does not request a hearing in accordance with the final

notice and order and fails to pay the amount of the proposed civil

penalty.

This streamlined process dispenses with the current procedure

requiring a separate order assessing civil penalty to be sent to the

respondent when the respondent pays the amount of the civil penalty

reflected in the final notice of proposed civil penalty, or when the

respondent fails to request a hearing in accordance with the final

notice of proposed civil penalty and fails to pay the amount of the

proposed civil penalty. The final disposition of the assessment action

results from the respondent's act or failure to act upon receipt of the

final notice. Issuance of a separate document entitled ``order

assessing civil penalty'' under the current procedures provides no

additional rights or notice to the respondent that is not otherwise

given in the final notice and order under these procedures.

Accordingly, elimination of the issuance of a separate order assessing

civil penalty under these circumstances will not alter the procedural

protections afforded respondents.

The final notice and order will be issued by an appropriate

Assistant Chief Counsel. The final notice and order will result in

either a civil penalty assessment or a formal hearing.

Regulatory Evaluation Summary

Changes to Federal regulations are required to undergo several

economic analyses. First, Executive Order 12866 directs each Federal

agency to 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 effect of regulatory changes on small entities.

Third, the Office of Management and Budget directs agencies to assess

the effect of regulatory changes on international trade. With respect

to this rule, the FAA has determined that it: (1) is not ``a

significant regulatory action'' as defined in the Executive Order; (2)

is not significant as defined in the Department of Transportation's

Regulatory Policies and Procedures; (3) will not have a significant

impact on a substantial number of small entities; and (4) will not

constitute a barrier to international trade. Therefore, a full

regulatory analysis, which includes the identification and evaluation

of cost-reducing alternatives to this rule, has not been prepared.

Instead, the agency has prepared a more concise analysis of this rule

which is presented in the following paragraphs.

The rule establishes a test program at three airports. The program

covers certain civil penalty cases against individuals submitting

dangerous or deadly weapons for screening at airport checkpoints or in

checked baggage. The rule will apply only to those cases that facially

appear to be simple and are factually straightforward, and that are

uncomplicated to process. During the test period, the rule delegates

authority to program office managers to initiate legal enforcement

actions and reduces the number of documents issued in this action. The

rule is intended to streamline the agency's civil penalty enforcement

process of notifying individuals of certain violations by processing

these actions within reduced time frames.

Costs

There will be no costs associated with this rule because it

consists only of changes to agency rules of procedure or practice in

part 13 of the FAA's regulations. The changes do not impose any new

economic requirements on the affected parties.

Benefits

The streamlined procedures will reduce the number of documents to

be served upon individuals. Additionally, this rule will likely reduce

the time between the violation and the processing of the enforcement

action.

Regulatory Flexibility Determination

The Regulatory Flexibility Act of 1980 (RFA) was enacted by

Congress to ensure that small entities are not unnecessarily and

disproportionately burdened by Federal regulations. The RFA requires a

Regulatory Flexibility Analysis if a rule will have ``a significant

economic impact on a substantial number of small entities.'' FAA Order

2100.14A outlines FAA's procedures and criteria for implementing the

RFA. Small entities are defined as independently owned and operated

small businesses and small not-for-profit organizations. Because this

rule will directly affect certain individuals (who are not defined as

entities), the rule will not have a significant economic impact on a

substantial number of small entities.

International Trade Impact Assessment

Because the rule only will affect certain individuals, it will not

constitute a barrier to international trade, including the export of

American goods and services to foreign countries and the import of

foreign goods and services to the United States.

Federalism Implications

The rule will not have substantial direct effects on the states, on

the relationship between the national government and that of any state,

or on the distribution of power and responsibilities among the various

levels of government. The respondents affected by the amendments are

private citizens, not state governments. Therefore, in accordance with

Executive Order 12612, it is determined that this regulation will not

have federalism implications to warrant the preparation of a Federalism

Assessment.

Paperwork Reduction Act

This rule contains no information collection requests requiring

approval of the Office of Management and Budget pursuant to the

Paperwork Reduction Act of 1980 (44 U.S.C. 3507 et seq.).

Conclusion

For the reasons discussed in the preamble, and based on the

findings in the Regulatory Flexibility Determination and the

International Trade Impact Analysis, the FAA has determined that this

regulation is not a significant regulatory action under Executive Order

12866. This rule is not considered significant under DOT Regulatory

Policies and Procedures (44 FR 11034; February 26, 1979). In addition,

this rule will not have a significant economic impact, positive or

negative, on a substantial number of small entities under the criteria

of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 13

Administrative practice and procedure, Air transportation, Federal

Aviation Administration, Investigations, Law enforcement, Penalties.

The Amendments

Accordingly, the Federal Aviation Administration amends part 13 of

Title 14, Code of Federal Regulations, by adding Special Federal

Aviation Regulation No. 72, as follows:

Special Federal Aviation Regulation No. 72--Civil Penalties:

Streamlined Enforcement Test and Evaluation Program

1. The authority citation for part 13 is amended to read as

follows:

Authority: 49 U.S.C. 106(g) and 322; 49 U.S.C. App. 1354(a) and

(c), 1374(d), 1401-1406, 1421-1432, 1471-1473, 1481, 1482, 1484-

1489, 1523, 1655(c), 1808-1810, 2157 (e) and (f), 2218, 2219; 18

U.S.C. 6002, 6004; 49 CFR 1.47.

2. Special Federal Aviation Regulation No. 72 is added to read as

follows:

Civil Penalties: Streamlined Enforcement Test and Evaluation Program.

This SFAR may be used, at the agency's discretion, in enforcement

actions involving individuals presenting dangerous or deadly weapons

for screening at airports or in checked baggage where the amount of the

proposed civil penalty is less than $5,000. In these cases,

Secs. 13.16(a), 13.16(c), and 13.16(f) through (l) of this chapter are

used, as well as sections (A) through (D) below:

(A) Delegation of authority. The authority of the Administrator,

under section 901 of the Federal Aviation Act of 1958, as amended, to

initiate the assessment of civil penalties for a violation of the Act,

or a rule, regulation, or order issued thereunder, is delegated to the

regional Office of Civil Aviation Security Division Manager and the

regional Office of Civil Aviation Security Deputy Division Manager for

the purpose of issuing notices of violation in cases involving

violations of the Federal Aviation Act and the FAA's regulations by

individuals presenting dangerous or deadly weapons for screening at

airport checkpoints or in checked baggage. This authority may not be

delegated below the level of the Office of Civil Aviation Security

Deputy Division Manager.

(B) Notice of violation. A civil penalty action is initiated by

sending a notice of violation to the person charged with the violation.

The notice of violation contains a statement of the charges and the

amount of the proposed civil penalty. Not later than 30 days after

receipt of the notice of violation, the person charged with a violation

shall:

(1) Submit the amount of the proposed civil penalty or an agreed-

upon amount, in which case either an order assessing a civil penalty or

a compromise order shall be issued in that amount;

(2) Submit to the regional Office of the Assistant Chief Counsel

any of the following:

(i) Written information, including documents and witness

statements, demonstrating that a violation of the regulations did not

occur or that a penalty or the penalty amount is not warranted by the

circumstances;

(ii) A written request to reduce the proposed civil penalty, the

amount of reduction, and the reasons and any documents supporting a

reduction of the proposed civil penalty, including records indicating a

financial inability to pay or records showing that payment of the

proposed civil penalty would prevent the person from continuing in

business; or

(iii) A written request for an informal conference to discuss the

matter with an agency attorney and submit relevant information or

documents; or

(3) Request a hearing in which case a complaint shall be filed with

the hearing docket clerk.

(C) Final notice of violation and civil penalty assessment order. A

final notice of violation and civil penalty assessment order (``final

notice and order'') may be issued after participation in any informal

proceedings as provided in paragraph (B)(2) of this section, or after

failure of the respondent to respond in a timely manner to a notice of

violation. A final notice and order will be sent to the individual

charged with a violation. The final notice and order will contain a

statement of the charges and the amount of the proposed civil penalty

and, as a result of information submitted to the agency attorney during

any informal procedures, may modify an allegation or a proposed civil

penalty contained in the notice of violation.

A final notice and order may be issued--

(1) If the person charged with a violation fails to respond to the

notice of violation within 30 days after receipt of that notice; or

(2) If the parties participated in any informal procedures under

paragraph (B)(2) of this section and the parties have not agreed to

compromise the action or the agency attorney has not agreed to withdraw

the notice of violation.

(D) Order assessing civil penalty. An order assessing civil penalty

may be issued after notice and opportunity for a hearing. A person

charged with a violation may be subject to an order assessing civil

penalty in the following circumstances:

(1) An order assessing civil penalty may be issued if a person

charged with a violation submits, or agrees to submit, the amount of

civil penalty proposed in the notice of violation.

(2) An order assessing civil penalty may be issued if a person

charged with a violation submits, or agrees to submit, an agreed-upon

amount of civil penalty that is not reflected in either the notice of

violation or the final notice and order.

(3) The final notice and order becomes (and contains a statement so

indicating) an order assessing a civil penalty when the person charged

with a violation submits the amount of the proposed civil penalty that

is reflected in the final notice and order.

(4) The final notice and order becomes (and contains a statement so

indicating) an order assessing a civil penalty 16 days after receipt of

the final notice and order, unless not later than 15 days after receipt

of the final notice and order, the person charged with a violation does

one of the following--

(i) Submits an agreed-upon amount of civil penalty that is not

reflected in the final notice and order, in which case an order

assessing civil penalty or a compromise order shall be issued in that

amount; or

(ii) Requests a hearing in which case a complaint shall be filed

with the hearing docket clerk.

(5) Unless an appeal is filed with the FAA decisionmaker in a

timely manner, an initial decision or order of an administrative law

judge shall be considered an order assessing civil penalty if an

administrative law judge finds that an alleged violation occurred and

determines that a civil penalty, in an amount found to be appropriate

by the administrative law judge, is warranted.

(6) Unless a petition for review is filed with a U.S. Court of

Appeals in a timely manner, a final decision and order of the

Administrator shall be considered an order assessing civil penalty if

the FAA decisionmaker finds that an alleged violation occurred and a

civil penalty is warranted.

Issued in Washington, DC, on August 19, 1994.

David R. Hinson,

Administrator.

[FR Doc. 94-21135 Filed 8-25-94; 8:45 am]

BILLING CODE 4910-13-M