Simplified Alternative Procedure for Resolving Civil Penalty Cases

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 1

[CGD 93-079]

RIN 2115-AE68

Simplified Alternative Procedure for Resolving Civil Penalty

Cases

AGENCY: Coast Guard, DOT.

ACTION: Interim final rule.

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SUMMARY: The Coast Guard is issuing an Interim Final Rule (IFR) to

allow for greater delegation by the District Commander, and to allow

for a simplified alternative procedure for resolving civil penalty

cases to be tested in three pilot ports for a period of six months.

This procedure should streamline the civil penalty process for certain

oil discharge and pollution prevention civil penalty cases by allowing

a Coast Guard official to present a Notice of Violation and proposed

penalty to a party in the field. Results of the pilot program will be

used in determining whether the program should be implemented

nationally and amending the final rule, if appropriate.

DATES: This rule is effective on April 7, 1994.

Comments must be received by October 7, 1994.

ADDRESSES: Comments may be mailed to the Executive Secretary, Marine

Safety Council (G-LRA/3406) (CGD 93-079), U.S. Coast Guard

Headquarters, 2100 Second Street, SW., Washington, DC 20593-0001, or

may be delivered to room 3406 at the same address between 8 a.m. and 3

p.m., Monday through Friday, except Federal holidays. The telephone

number is (202) 267-1477. The Executive Secretary maintains the public

docket for this rulemaking. Comments will become part of this docket

and will be available for inspection or copying at room 3406, U.S.

Coast Guard Headquarters, Unless otherwise indicated, documents

referenced in this preamble are available for inspection and copying at

the office of the Executive Secretary, Marine Safety Council (G-LRA/

3406), U.S. Coast Guard Headquarters, 2100 Second Street SW., room

3406, Washington, DC 20593-0001 between 8 a.m. and 3 p.m., Monday

though Friday, except Federal holidays. The telephone number is (202)

267-6234.

FOR FURTHER INFORMATION CONTACT:

Lieutenant Commander Richard Gaudiosi, Project Manager, Marine

Environmental Protection Division (G-MEP), (202) 267-6714.

SUPPLEMENTARY INFORMATION:

Request for Comments

The Coast Guard is encouraging comments on this interim rule in

order to consider as many perspectives as possible on the impacts of

employing this process and to evaluate its use as an enforcement tool

prior to national implementation. Interested persons should submit

written data, views, or arguments. Persons submitting comments should

include their names and addresses, identify this rulemaking (CGD 93-

079) and the specific section of this interim rule to which each

comment applies, and give the reason for each comment. The Coast Guard

requests that all comments and attachments be submitted in an unbound

format suitable for copying and electronic filing. If not practical, a

second copy of any bound materials is requested. Persons wanting

acknowledgment of receipt of comments should enclose a stamped, self-

addressed postcard or envelope.

The Coast Guard will consider all comments received during the

comment period. This interim final rule may be changed in view of the

comments.

The Coast Guard plans no public hearing. Persons may request a

public hearing by writing to the Marine Safety Council at the address

under ``ADDRESSES.'' The request should include reasons why a hearing

would be beneficial. If it determines that the opportunity for oral

presentations will aid this rulemaking, the Coast Guard will hold a

public hearing in a time and place announced by a later notice in the

Federal Register.

Drafting Information

The principal persons involved in drafting this document are

Lieutenant Commander Richard Gaudiosi, Project Manager, Marine

Environmental Protection Division, and C.G. Green, Project Counsel,

Office of the Chief Counsel.

Background and Purpose

The current procedures for assessing civil penalties by the Coast

Guard are contained in 33 CFR 1.07. Generally this process begins when

an alleged violation is detected by or reported to a Coast Guard

official. The alleged violation is investigated, and if it appears that

the elements for a violation case exist, civil enforcement action is

initiated by preparing a case report with a recommended penalty and

forwarding it with the case file to the appropriate Coast Guard

District office for review. The District office reviews the report to

determine whether there is in fact evidence of a prima facie case and

whether the assessment of the recommended penalty by a Hearing Officer

is appropriate. It then transmits the case file with a recommended

action to the Hearing Officer. Based on this case file, the Hearing

Officer makes an independent determination as to whether a violation

appears to have been committed. If so, the Hearing Officer sends a

Letter of Notification to the alleged violator that specifies, among

other matters, the alleged violation(s) and a penalty amount that

appears to be appropriate.

A party may pay the penalty amount specified as being appropriate

by the Hearing Officer, request an in-person hearing, or provide

written evidence or arguments in lieu of a hearing. If the party pays

the penalty, the case is closed and no further action is required. If

the party chooses either of the latter two options, the Hearing Officer

either conducts an in-person hearing or reviews the written evidence

and arguments, and then issues a written decision assessing a penalty

or dismissing the case. The Hearing Officer's decision may be

administratively appealed to the Commandant of the Coast Guard.

As applied to small (under 100 gallons) oil discharges and

pollution prevention violations, the current civil penalty assessment

process is not administratively efficient for many uncontested cases.

Further, the time required to process these violations minimizes the

deterrent effect of the sanction. It is not uncommon for a party to

have additional violations before being notified of the initiation of

action for the first violation.

There is a need for a process where notice of violation can be

given in the field to allow for early resolution of apparent small oil

spill and pollution prevention violations. Such a process would save

the time and cost of unnecessary internal review, improve deterrence,

and enable corrective action by providing a party with earlier notice

of violations. Each party would have the option of paying a proposed

penalty or pursuing their right to a hearing.

Notice of Violation

This rule amends 33 CFR 1.07 to provide a simplified procedure to

expedite processing of certain civil penalty violation cases. An

interim final rule is being published to test the simplified procedure.

A pilot program will be conducted in three ports, prior to a final rule

which would be implemented nationwide. The pilot program will be

conducted for six months in the ports of Charleston, SC, Galveston, TX,

and Los Angeles, CA.

The procedures will allow settlement of cases following the

issuance by a Coast Guard issuing officer of a Notice of Violation

containing a proposed penalty. A Coast Guard issuing officer will be a

commissioned, warrant, or petty officer, with specific training and

authority to issue a Notice of Violation.

A party will have the option of either paying the proposed penalty,

requesting determination by a Hearing Officer, or taking no action on

the Notice of Violation. Where a party decides to pay the proposed

penalty indicated on a Notice of Violation, there will be no District

Program Manager or Hearing Officer involved and the case will be

closed. Where a party requests a determination by a Hearing Officer or

takes no action, a full case file will be sent to the District

Commander, in accordance with present procedure, for review prior to

forwarding to the Hearing Officer. Upon receipt by the Hearing Officer,

the case will be processed under the current procedures. Any adverse

action by the Hearing Officer will be subject to administrative appeal

under the current procedures. A party who takes no action on a Notice

of Violation or who requests determination by a Hearing Officer may

find the preliminary assessment issued by the Hearing Officer to be

equal to or greater than that specified on the Notice of Violation.

Use of the simplified procedure will initially be limited, by

internal guidance, to certain requirements and prohibitions subject to

Class I Administrative Civil Penalties under the Federal Water

Pollution Control Act (FWPCA) as amended. A Notice of Violation can be

issued for two types of violations: (1) Oil discharges in violation of

the FWPCA, if they are 100 gallons or less, and (2) pollution

prevention violations (33 CFR parts 154, 155, 156).

Coast Guard issuing officers will issue a Notice of Violation with

a proposed penalty only in clear-cut cases as determined by applying

specific written guidance. Proposed penalty amounts would be taken from

a penalty schedule based on objective criteria. Any case in which

aggravating or extenuating circumstances are evidenced, or which

concern violations not included in specific guidance documents, may be

referred to the Hearing Officer for processing under current

procedures.

Delegation by the District Commander

This rule will also allow more flexibility on the part of the

District Commander to delegate authority for review of alleged

violations to any person under the District Commander's command. For

example, the District Commander could delegate review authority to the

Captain of the Port for certain pollution prevention violations, thus

eliminating the need for review by the District Commander's staff,

prior to the case being forwarded to a Hearing Officer. Such a

delegation would streamline the processing of a violation case and

would be in the best interest of the public and the party involved.

Regulatory Implementation

Based on the results of the pilot test and internal and external

comments received on the IFR, the Coast Guard will determine whether

the procedure should be implemented nationally and will make revisions

to the final rule and internal guidance, if appropriate. This approach

will facilitate implementation without disrupting the existing civil

penalty process for cases involving violations other than oil discharge

or pollution prevention violations. However, the rule is designed to

allow extension of the simplified process to other Coast Guard programs

without additional amendments to 33 CFR 1.07.

Under the Administrative Procedure Act (APA), procedural rules are

exempt from the notice and comment procedures and, under 5 U.S.C.

553(b)(3)(B), the promulgating agency may omit notice and comment.

Further, under the alternative simplified procedure established by this

IFR, a party will continue to have the option of requesting a hearing,

as under current regulations. Therefore, the Coast Guard has determined

that these regulations may be promulgated without prior notice and

opportunity for comment.

Since the public interest would not be served by delaying the date

of the interim rule, and a party will continue to have the option of

requesting a hearing, as under current regulations, the Coast Guard has

also determined that under 5 U.S.C. 533(d), these rules may be made

effective upon publication.

Nonetheless, as previously discussed in this preamble, the Coast

Guard is requesting comment on this interim rule and its pilot

implementation program.

Regulatory Evaluation

This rule is not a significant regulatory action under section 3(f)

of Executive Order 12866, does not require an assessment of potential

costs and benefits under section 6(a)(3) of that order, and has not

been reviewed under that order. It is not significant under the

``Department of Transportation Regulatory Policies and Procedures'' (44

FR 11040; February 26, 1979). The Coast Guard expects the economic

impact of this procedural rule to be so minimal that a full Regulatory

Evaluation is unnecessary. The total annual cost to the public from

civil penalties should not be changed by this proposal. Savings to the

government will be realized from the reduction in administrative costs

to enforce civil penalties by eliminating the need for review by the

District Commander or action by the Hearing Officer in cases where the

penalty specified in a Notice of Violation is paid by the party within

the allowed time.

Small Entities

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the

Coast Guard must consider whether this rulemaking will have a

significant economic impact on a substantial number of small entities.

``Small entities'' include independently owned and operated small

businesses that are not dominant in their field and that otherwise

qualify as ``small business concerns'' under section 3 of the Small

Business Act (15 U.S.C. 632). Because it expects the impact of this

proposal to be minimal, the Coast Guard certifies under 5 U.S.C. 605(b)

that this rulemaking will not have a significant economic impact on a

substantial number of small entities. If, however, you think that your

business qualifies as a small entity and that this rulemaking will have

significant economic impact on your business, please submit a comment

(see ADDRESSES) explaining why you think your business qualifies and in

what way and to what degree this rulemaking will economically affect

your business.

Collection of Information

This rulemaking contains no collection of information requirements

under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

Federalism

The Coast Guard has analyzed this rule under the principles and

criteria contained in Executive Order 12612 and has determined that

this rule does not have sufficient federalism implications to warrant

the preparation of a Federalism Assessment.

Environment

The Coast Guard considered the environmental impact of this

rulemaking and concluded that, under section 2.B.2 of Commandant

Instruction M1645.1B, this rule is categorically excluded from further

environmental documentation. Procedural rules do not require

environmental impact studies. A Categorical Exclusion Determination is

available in the docket for inspection or copying where indicated under

ADDRESSES.

List of Subjects in 33 CFR Part 1

Administrative practice and procedure, Authority delegations

(Government agencies), Freedom of Information, Penalties.

For the reasons set out in the preamble, the Coast Guard amends 33

CFR part 1 as follows:

Subpart 1.07--Enforcement; Civil and Criminal Penalty Proceedings

1. The authority citation of subpart 1.07 continues to read as

follows:

Authority: 14 U.S.C. 633; 49 CFR 1.46.

2. Section 1.07-5 is revised to read as follows:

Sec. 1.07-5 Definitions.

(a) The term District Commander, when used in this subpart, means

the District Commander, or any person under the District Commander's

command, delegated to carry out the provisions of Sec. 1.07-10(b).

(b) The term Hearing Officer means a Coast Guard officer or

employee who has been delegated the authority to assess civil

penalties.

(c) The term issuing officer means any qualified Coast Guard

commissioned, warrant, or petty officer.

(d) The term Notice of Violation means a notification of violation

and preliminary assessment of penalty, given to a party, in accordance

with Sec. 1.07-11.

(e) The term party means the person alleged to have violated a

statute or regulation to which a civil penalty applies and includes an

individual or public or private corporation, partnership or other

association, or a governmental entity.

3. Section 1.07-10 is amended by revising paragraph (a) to read as

follows:

Sec. 1.07-10 Reporting and investigation.

(a) Any person may report an apparent violation of any law,

regulation, or order that is enforced by the Coast Guard to any Coast

Guard facility. When a report of an apparent violation has been

received, or when an apparent violation has been detected by any Coast

Guard personnel, the matter is investigated or evaluated by Coast Guard

personnel. Once an apparent violation has been investigated or

evaluated, a report of the investigation may be sent to the District

Commander in accordance with paragraph (b) of this section or a Notice

of Violation under Sec. 1.07-11 may be given to the party by an issuing

officer.

* * * * *

4. A new Sec. 1.07-11 is added to read as follows:

Sec. 1.07-11 Notice of Violation.

(a) After investigation and evaluation of an alleged violation has

been completed, an issuing officer may issue a Notice of Violation to

the party.

(b) The Notice of Violation will contain:

(1) The alleged violation and the applicable law or regulations;

(2) The amount of the maximum penalty that may be assessed for each

violation;

(3) The amount of proposed penalty that appears to be appropriate;

(4) The statement that payment of the proposed penalty within 30

days will settle the case;

(5) The place and manner to which payment is to be made;

(6) The statement that the party may request a hearing prior to any

final assessment of a penalty and the address where to request such a

hearing.

(c) The Notice of Violation may be hand delivered to the party or

an employee of the party, or may be mailed to the business address of

the party.

(d) If a party requests a hearing, or takes no action on the Notice

of Violation within 30 days, a copy of the Notice of Violation, along

with the case file, will be sent to the District Commander for

processing under the procedures described in Sec. 1.07-10(b).

Dated: March 9, 1994.

A.E. Henn,

Rear Admiral, U.S. Coast Guard, Chief, Office of Marine Safety,

Security and Environmental Protection.

[FR Doc. 94-8370 Filed 4-6-94; 8:45 am]

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