[Federal Register Volume 62, Number 247 (Wednesday, December 24, 1997)]
[Notices]
[Pages 67369-67372]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33560]
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FEDERAL MARITIME COMMISSION
Small Business Regulatory Enforcement Fairness Act:
Implementation
AGENCY: Federal Maritime Commission.
ACTION: Notice.
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SUMMARY: On March 29, 1996, Public Law 104-121 was enacted. Title II of
the bill, called the ``Small Business Regulatory Enforcement Fairness
Act of 1996'' (``SBREFA''), affects the Federal Maritime Commission's
(``Commission'') rulemaking procedures and will attach additional
requirements to other Commission regulatory activity that may impact
upon small businesses.
This Notice defines ``small business'' for Commission regulatory
purposes; announces new procedures for rulemakings affecting small
businesses; and establishes two programs required by SBREFA: (1) A
program for responding to certain informal inquiries from small
businesses; and (2) a policy regarding reduction or waiver of civil
penalties in certain cases involving small businesses.
EFFECTIVE DATE: December 24, 1997.
FOR FURTHER INFORMATION CONTACT:
Vern W. Hill, Director, Bureau of Enforcement, Federal Maritime
Commission, 800 North Capitol Street, NW., Washington, DC 20573, (202)
523-5783.
SUPPLEMENTARY INFORMATION: Sections 202-245, Title II of Public Law
104-121, effective June 27, 1996, place a number of obligations on the
Commission whenever it regulates ``small business concerns'' as defined
by 15 U.S.C. 632 and regulations issued thereunder by the Small
Business Administration (``SBA'').
``Small Business '' Defined
Initially, the Commission must decide whether to adopt the SBA's
definitions of ``small business'' as being appropriate for the
Commission's regulatory purposes. Alternatively, the Commission may,
after consultation with the Office of Advocacy of the SBA, and after
providing opportunity for public comment, establish its own standards
for determining which of its regulated entities should appropriately be
considered small businesses within the context of Commission
regulation,
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and publish such standards in the Federal Register.
To make that initial determination, the Commission reviewed SBA
classifications and standards, and consulted with the SBA's Office of
Advocacy. From these sources, we learned that SBA definitions,
classifications and standards are intended to be as inclusive of small
businesses as possible; a purpose which does necessarily coincide with
the Commission's regulatory mandate.
The SBA catalogues businesses along industry lines using the
Standard Industrial Classification Manual (``SIC'') published by the
Executive Office of the President, Office of Management and Budget. SBA
then, in accordance with its regulations at 13 CFR 121.201, determines
which entities in each classification are small business establishments
based upon the number of their employees or the establishment's annual
receipts in millions of dollars.
The Commission identified the following SIC categories and codes as
falling within our regulatory jurisdiction:
4412 Deep Sea Foreign Transportation of Freight (Vessel Operating
Common Carriers--``VOCCs'')
4481 Deep Sea Transportation of Passengers (Passenger Vessel
Operators--``PVOs'')
4491 Marine Cargo Handing (Marine Terminal Operators--``MTOs'')
4731 Arrangement of Transportation of Freight and Cargo (Ocean
Freight Forwarders--``OFFs''; and Non-Vessel Operating Common
Carriers--``NVOCCs'')
Business entities in Categories 4412 and 4481, VOCCs and PVOs, are
evaluated by SBA according to their number of employees. The SBA has
determined that if such business establishments have less than 500
employees, they qualify as a small businesses for SBA purposes.
Business establishments in Categories 4491 and 4731, NVOCCs, OFFs and
MTOs, are evaluated by their annual receipts in millions of dollars.
For these categories, SBA determined that business establishments with
annual receipts (gross annual revenues) or less than $18.5 million are
small businesses.
As stated, the Commission could accept these SBA standards and
treat VOCCs and PVOs having fewer than 500 employees, and MTOs, OFFs
and NVOCCS having less than $18.5 million in gross annual revenues, as
small businesses; or, following established procedures, we could
develop our own standards more closely oriented to the Commission's
regulatory framework.
The dilemma is that, unlike other agencies which may choose to
develop their own standards, the Commission neither collects nor
maintains any data regarding the number of employees or gross annual
revenues of the entities it regulates. Indeed, we have no preexisting
regulatory purpose for doing so. Thus, for the Commission to create
standards by which to define ``small businesses'', and to determine
which regulated entities fall within those standards, a major
collection of data from all industry segments would have to be
undertaken. Moreover, many of the Commission's regulated entities are
foreign domiciles from whom such data is not readily accessible. Even
assuming sufficient data could be obtained by the Commission, the
collection and requisite economic analysis of that data would entail an
unfeasible expenditure of time and resources. For these reasons, the
Commission has determined to adopt the SBA's inclusive standards. Thus,
in the future, the Commission will be considering the small business
impact of many of its regulatory undertakings.
However, it is apparent that many Commission regulated entities are
VOCCs, PVOs and MTOs which generally are very large companies with far
in excess of 500 employees, in the case of VOCCs and PVOs, and $18.5
million in gross revenues in the case of MTOs. These companies, as well
as conferences or associations of such companies, generally represented
by retained counsel, frequently raise, informally, complex issues
responding to which involves considerable Commission time and effort.
Such entities are not the intended small business beneficiaries of
SBREFA.
Accordingly, the Commission is making a rebuttable presumption that
VOCCs and PVOs, as well as conferences and associations comprised of
VOCC and PVO members, have more than 500 employees, and that MTOs at
United States ports, as well as conferences and associations of such
MTOs, earn gross revenues in excess of $18.5 million per year. Thus,
VOCCs, PVOs and MTOs are presumed not to be small businesses
encompassed within the programs and policies mandated by SBREFA.
Nevertheless, any VOCC or PVO with fewer than 500 employees, or any
MTO with less than $18.5 million in gross annual revenues, that seeks
to be treated as a small business for Commission regulatory purposes,
may submit a request to such treatment to the Secretary of the
Commission, along with payroll or gross annual revenues evidence, as
applicable, sufficient to substantiate its claim and rebut the
presumption.
Rulemaking Affecting Small Businesses
Section 241 of Title II amends the Regulatory Flexibility Act
(``RFA''), 5 U.S.C. 603, and sets forth additional requirements
applicable to rulemaking proceedings that will have a significant
economic impact on a substantial number of small businesses. Under
section 242, small businesses now can seek judicial review of
Commission compliance with RFA requirements.
Compliance Guides
As required by section 212, each rule promulgated by the Commission
in the future that significantly affects a substantial number of small
businesses will include a ``compliance guide'' to assist small
businesses in complying with that rule. The content of the compliance
guide may be taken into account by a reviewing court ``as evidence of
the reasonableness or appropriateness'' of any proposed penalties for
noncompliance with the rule.
Negative Certifications and Regulatory Flexibility Analyses
The RFA requires federal agencies either to certify that a `` * * *
rule will not have a significant economic impact on a substantial
number of small entities'', or to prepare a regulatory flexibility
analysis. Because there are no developed standards or decisional
guidelines available for measuring ``significant economic impact'' or
``substantial number of small entities'', the meaning of those terms
will be developed on a case by case basis.
If a proposed rule will not have a significant economic impact on a
substantial number of small entities, either adverse or beneficial, an
initial regulatory flexibility analysis is not required. In these
instances, the RFA authorizes the Commission's Chairman to make a
negative certification with respect to that rulemaking. To make this
threshold determination, the Commission will undertake a preliminary
analysis to evaluate the economic impact of a proposed rule on small
business entities. Once this preliminary analysis is completed, the
Commission either will make a negative certification or undertake an
initial regulatory flexibility analysis. A certification of a finding
of no significant impact on a substantial number of entities will be
published with the proposed rule in the Federal Register and will be
accompanied by an explanation of the factual and economic bases for the
certification. The negative
[[Page 67371]]
certification is subject to judicial review.
When a proposed rule is expected to have a significant economic
impact, beneficial or adverse, on a substantial number of small
entities, an initial regulatory flexibility analysis will be prepared.
The initial regulatory flexibility analysis or a summary of it will be
published in the Federal Register with the proposed rule.
Under section 603(b) of the RFA, each initial regulatory
flexibility analysis is required to address: (1) reasons why the agency
is considering the action, (2) the objectives and legal basis for the
proposed rule, (3) the kind and number of small entities to which the
proposed rule will apply, (4) the projected reporting, record keeping
and other compliance requirements of the proposed rule, and (5) federal
rules that may duplicate, overlap or conflict with the proposed rule.
In addition, each initial regulatory flexibility analysis must describe
any significant alternatives to the proposal that accomplish the
statutory objectives and minimize the significant negative economic
impact of the proposal on small entities.
When the Commission issues a final rule, it will prepare a final
regulatory flexibility analysis or certify that the rule will not have
a significant economic impact on a substantial number of small
entities. A final regulatory flexibility analysis will discuss the
comments received, the alternatives considered and the rationale for
the final rule. The analysis itself or a summary thereof will be
published in the Federal Register with the final rule. The final
regulatory flexibility analysis is subject to judicial review.
Programs and Policies To Address Small Business Concerns
SBREFA requires:
(1) That the Commission establish a program for responding to
informal compliance inquiries from small businesses (section 213); and
(2) That the Commission establish a policy or program for reduction or
waiver of civil penalties for violations by small businesses of
statutory or regulatory requirements (section 223).
Program to Respond To Informal Inquiries From Small Businesses
The staff of the Commission has always responded informally to
telephonic inquiries from the regulated public. Such inquiries are
received daily, and often are handled routinely. Many inquiries involve
simple questions regarding matters such as tariff filings, licensing
and bonding, as well as procedural matters. Others are far more complex
and time consuming, involving contingencies and variables that must be
clarified or resolved even before the precise issue can be identified.
Most often, the latter type inquiries, and those requiring lengthy
discussions and follow-up discussions, are from VOCCs, PVOs and MTOs
through their retained counsel. For the same reasons discussed above,
the Commission does not consider inquiries from these sources to be
within the contemplation of the informal inquiry program required by
SBREFA.
While the Commission will continue to provide informal assistance
to all persons subject to its jurisdiction, with respect to inquiries
from small businesses, current practices are being augmented because of
SBREFA's new requirements that:
(1) After 2 years, the Commission must report on the scope of the
Commission's program and the achievements of the program in assisting
small businesses to comply with agency statutes and regulations; and
(2) The agency may be held accountable for the content of its
advice regarding an inquirer's compliance with statutory or regulatory
requirements. The substance of such advice can be raised in any
subsequent appeal of a civil penalty imposed against a participating
small business entity.
In accordance with SBREFA, and because of its reporting and
accountability provisions, the Commission is establishing the following
procedures:
Small businesses subject to Commission jurisdiction are invited to
make informal inquiries regarding the lawfulness of their own
activities. This program will apply to those small busineses that, at
the time fo the inquiry, identify themselves and the type of their
business operations, for example, NVOCC or OFF.
Inquiries may be submitted by telephone, letter or e-mail depending
upon the nature and complexity of the inquiry as determined,
ultimately, by the person receiving the inquiry. Additional information
may be required and requested. Responses will be prvovided by
telephone, letter or e-mail, as appropriate in the opinion of the
person responding.
The program goal is to provide prompt telephonic advice when
possible, or a written response within 20 days of the date that all
necessary information has been received. The Commission will make and
retain records of each informal inquiry made under this program in
order to document the name and description of the inquirer, relevant
dates, and the substance of the inquiry and the response thereto.
Depending on subject matter, inquiries by entities that are small
businesses shall be submitted to the following individuals at the
Federal Maritime Commission, 800 North Capitol Street, N.W.,
Washington, D.C. 20573-0001; or at the telephone number or e-mail
address listed below:
PASSENGER VESSEL CERTIFICATION
Theodore A. Zook............................202-523-5856; Theoz@fmc.gov
Curt L. Ohlsson.............................202-523-5856; Curto@fmc.gov
OCEAN FREIGHT FORWARDERS
Betty J. Bennett...........................202-523-5843; Bettyb@fmc.gov
Elnora V. Howard...........................202-523-5843; Elnora@fmc.gov
VOCC, NVOCC and MTO TARIFF MATTERS
James G. Cannon............................202-523-5818; Jamesg@fmc.gov
Roland E. Ramlow..........................202-523-5818; Rolandr@fmc.gov
Martin W. Wilson..........................202-523-5818; Martinw@fmc.gov
Ernest L. Estes...........................202-523-5818; Erneste@fmc.gov
James H. McEachin.........................202-523-5818; Jamesmc@fmc.gov
SERVICE CONTRACT MATTERS
Theodore A. Zook............................202-523-5856; Theoz@fmc.gov
Mamie H. Black.............................202-523-5856; Mamieb@fmc.gov
Roland E. Ramlow..........................202-523-5856; Rolandr@fmc.gov
AUTOMATED TARIFF FILING AND INFORMATION (``ATFI'') REGISTRATIONS
Anne E. Trotter..............................202-523-5818; Anne@fmc.gov
Hattie R. Broadnax........................202-523-5818; Hattieb@fmc.gov
ATFI ACCESS, USE AND FEES
Pat N. Gorski.................................202-523-5834; Pat@fmc.gov
AGREEMENT MATTERS
Jeremiah D. Hospital.....................202-523-5793; Jeremiah@fmc.gov
TRADE MONITORING MATTERS
Frank J. Schwarz...........................202-523-5845; Franks@fmc.gov
The Office of Informal Inquiries, Complaints and Informal Dockets
(``OIIC'') (Telephone: 202-523-5807, E-mail: Josephf@fmc.gov) will
continue to receive informal complaints and will attempt informally to
resolve related disputes. OIIC also will be the
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designated recipient of inquiries from small businesses under SBREFA
with respect to subjects not specified above.
Questions regarding the Commission's Rules of Practice and
Procedure, 46 CFR Part 502, do not fall within the scope of this
program and should be directed to the Office of the Secretary (202-523-
5725). Other requests for assistance from persons not covered by
SBREFA, as in the past, may be directed, as applicable, to the Office
of the General Counsel (202-523-5740), Bureau of Enforcement (202-523-
5783), Bureau of Economics and Agreement Analysis (202-523-5787) or the
Bureau of Tariffs, Certification and Licensing (202-523-5796;
[email protected]).
Reduction or Waiver Of Civil Penalties for Violations by Small
Business
As stated above, SBREFA (Sec. 223) requires that the Commission
establish a policy for reduction or waiver of civil penalties for
statutory or regulatory violations by small businesses. Within two
years, the Commission must report to four Congressional Committees on:
(1) The scope of the policy or program; (2) the number of enforcement
actions that qualified or failed to quality for the program or policy;
and (3) the total amount of penalty reductions and waivers granted.
SBREFA and its legislative history suggest certain approaches, i.e.,
consider ability to pay; consider good faith shown by the small
business; require that the violation be discovered through an agency
supported compliance assistance program; and allow for violations to be
corrected within a reasonable time. Repeat offenses or violations
involving willful or criminal conduct are not intended to be included
within the policy.
Reduction of Civil Penalties
The Commission already is subject to statutory requirements with
regard to civil penalties, including consideration of a respondent's
ability to pay, as well as its size and financial condition and the
circumstances of the violation. The Commission has followed those
requirements in the past and will continue to do so in the future. In
addition, appropriate records will be maintained so that the Commission
can fulfill its responsibility to file requisite reports to Congress.
Voluntary Compliance and Waiver of Civil Penalties
The Commission has established an internal policy, to be used in
appropriate cases, to obtain ``voluntary'' compliance by, and waiver of
civil penalties against, small businesses found to be violating
Commission statutes or regulations.
Under this program, each subject of an investigation will be
evaluated to determine whether, in the circumstances of that particular
case, a demand for civil penalties, or compliance and waiver of civil
penalties, would be the more effective regulatory tool. In making this
determination, the following factors will be considered:
1. Whether the violation was knowing and willful, involved fraud or
financial gain or caused injury to the public;
2. The subject's history of prior offenses;
3. Extent to which the subject demonstrates a good faith desire to
comply with Commission requirements in the future; and
4. The subject's ability to pay a civil penalty.
Appropriate records will be maintained in order for the Commission
to fulfill its responsibility for filing required reports to Congress.
By the Commission.
Ronald D. Murphy,
Assistant Secretary.
[FR Doc. 97-33560 Filed 12-23-97; 8:45 am]
BILLING CODE 6730-01-M
