[Federal Register Volume 59, Number 247 (Tuesday, December 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31792]
[[Page Unknown]]
[Federal Register: December 27, 1994]
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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: Final rule.
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SUMMARY: The Coast Guard is adopting as final, with minor revisions, an
interim rule allowing for greater delegation by the District Commander
and for a simplified alternative procedure for resolving civil penalty
cases. This procedure streamlines the process for resolution of certain
uncontested oil discharge and pollution prevention civil penalty cases
by allowing a Coast Guard official to present a notice of violation
(NOV) and proposed penalty to a party in the field.
EFFECTIVE DATE: January 26, 1995.
ADDRESSES: Unless otherwise indicated, documents referred to in this
preamble are available for inspection or 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 through Friday, except
Federal holidays. The telephone number is (202) 267-1477.
FOR FURTHER INFORMATION CONTACT: Lieutenant Jonathan C. Burton, Project
Manager, Marine Environmental Protection Division (G-MEP), (202) 267-
6714.
SUPPLEMENTARY INFORMATION:
Drafting Information
The principal persons involved in drafting this document are
Lieutenant Jonathan C. Burton, Project Manager, Marine Environmental
Protection Division, and C.G. Green, Project Counsel, Office of the
Chief Counsel.
Regulatory History
On April 7, 1994, the Coast Guard published an interim final rule
in the Federal Register (59 FR 16558) establishing an optional
alternative civil penalty procedure and announced a six-month pilot
implementation program to test the new procedure. The Coast Guard
received 5 letters during the comment period and 4 after the comment
period was closed. All comments were considered before drafting this
final rule. No public hearing was requested, and none was held.
Background and Purpose
The procedures for assessing civil penalties by the Coast Guard are
contained in 33 CFR 1.07. The civil penalty 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
normally initiated by preparing a case report with a recommended
penalty and forwarding it to the appropriate Coast Guard District
office for review. Since the establishment of the Notice of Violation
(NOV) option, some cases are now eligible for issuance of a NOV and
parties are afforded the option of either paying the proposed penalty
and closing the case, or having the violation processed through normal
procedures.
If the case is not eligible for NOV issuance or if the party
declines the NOV, the District staff reviews the case report to verify
that there was evidence sufficient to establish a prima facie case and
that the recommended penalty is appropriate. The case file is then
transmitted, with a recommended action, to the Hearing Officer. Based
on the case file, the Hearing Officer independently determines whether
prima facie evidence of a violation exists and, if so, sends a Letter
of Notification to the alleged violator. This letter specifies, among
other matters, the alleged violation(s) and a penalty amount deemed
appropriate based on the information provided to the Hearing Officer. A
party can pay the penalty amount specified 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 submitted written evidence and arguments. The
Hearing Officer then issues a written decision assessing a penalty or
dismissing the case. The Hearing Officer's decision can be
administratively appealed to the Commandant of the Coast Guard.
The Notice of Violation option was developed to address the Coast
Guard's concern that the civil penalty assessment process was too
lengthy when applied to small (under 100 gallons) oil discharges and
minor pollution prevention regulation violations. The lengthy process
time meant that a party frequently would have additional violations
before being notified by a Hearing Officer of the initiation of action
for the first violation.
The NOV option provides for early notification of alleged violators
and offers early resolution of uncontested small oil spill and
pollution prevention violations. Early resolution of these minor
violations saves time and reduces costs of internal reviews, improves
deterrence, and facilitates corrective action by providing a party with
earlier notice of violations.
The interim rule amended 33 CFR 1.07 to add the optional
alternative procedure and the Coast Guard conducted a pilot program for
six months in the Captain of the Port zones of Charleston, SC;
Galveston, TX; and Los Angeles, CA. The result of the pilot program was
favorable. During the pilot program 197 NOVs were issued for oil spills
and 21 NOVs were issued for pollution prevention violations with a
total penalty value of $96,400. As of October 13, 1994, 160 NOVs had
been paid totaling $57,275 in penalties.
The optional procedure allows early settlement of cases in which a
Coast Guard issuing officer issues a NOV. A Coast Guard issuing officer
is a commissioned, warrant or petty officer with specific training and
authority to issue a violation notice.
A party has the option of paying the penalty proposed on the NOV,
declining the NOV, or taking no action on the NOV. If a party pays the
proposed penalty indicated on a NOV, the case is closed without further
processing by a District Program Manager or Hearing Officer. If a party
declines the NOV or takes no action, the case is processed as if an NOV
had never been issued. A complete case file, report and recommended
penalty amount is sent to the District Commander for review prior to
being forwarded to the Hearing Officer for processing as any other
civil penalty case. The Hearing Officer's Letter of Notification would
specify a penalty deemed appropriate based on the case file. The
proposed penalty is not limited to the amount proposed in the field on
the NOV.
The NOV option will be implemented by Coast Guard Captains of the
Port as soon as sufficient numbers of personnel have been trained in
the issuance of NOVs. Representatives from each district, marine safety
office, and detachment are being sent to a ``train the trainer'' course
on the NOV option at the Coast Guard Reserve Training Center in
Yorktown, VA. After the initial Yorktown training, each unit will be
able to properly train additional personnel. Each district will
publicize the dates when its units will start to use the NOV option.
Use of the NOV option is initially being limited, by Commandant
Directive, to violations of specified regulations and statutory
requirements subject to Class I Administrative Civil Penalties under
the Federal Water Pollution Control Act (FWPCA), as amended. A NOV 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) violations of
pollution prevention regulations (33 CFR Parts 154, 155, 156) for which
the current penalty guidelines list a penalty not greater than $2500.
Coast Guard issuing officers can issue a NOV only in cases that
meet specific written guidance. Penalty amounts are taken from a
penalty schedule and may not be increased or decreased by the issuing
officer. Any case in which aggravating or extenuating circumstances are
involved, or in which the violations do not meet the specific written
guidance, is not eligible for NOV issuance and will be processed for
referral to the Hearing Officer in accordance with normal procedures.
Delegation by the District Commander 33 CFR 1.07-10(b)
The District Commander now has more flexibility to delegate
authority for review of alleged violations to any member under the
District Commander's command. For example, the District Commander may
now delegate case 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 forwarding the case
to a Hearing Officer. The expanded delegation authority allows District
Commanders greater flexibility in allocating their personnel resources
to process violation cases.
Discussion of Comments and Changes
I. General Comments
The Interim rule language of Sec. 1.07-11 and the NOV form used for
the pilot program left the impression that a party could request a
hearing on the proposed penalty offered by the NOV. In fact, if a party
does not wish to accept the NOV, a full case is forwarded to the
Hearing Officer who then makes an independent determination and issues
a preliminary assessment letter to which the party can respond. To
clarify this procedure Sec. 1.07-11 now specifies that the NOV include
a statement that the party may decline the NOV and, if the NOV is
declined, the party has the right to a hearing prior to a final
assessment of a penalty by a Hearing Officer. The NOV also states that
taking no action on the NOV has the same result as declining the NOV
but the processing time may increase. Furthermore, the NOV form makes
it clear that the Hearing Officer is in no way bound by any assessment
proposed by the NOV. To facilitate understanding of these rights the
NOV form is reproduced in Figure 1.
BILLING CODE 4910-14-P
TR27DE94.000
TR27DE94.001
BILLING CODE 4910-14-C
Two comments received during the pilot program were in favor of the
regulations and suggested that the NOV option be broadened to include
other Coast Guard programs.
The NOV option can be used by other Coast Guard programs that use
the civil penalty process. Any program that implements use of the NOV
option will do so by internal policy with prior notification to the
public in the Federal Register.
Three comments were in favor of the alternative process but
suggested different penalty amounts for small oil spills and pollution
prevention regulation violations.
The penalty amounts specified for small oil spills and pollution
prevention regulation violations used during the pilot program were
based on current Commandant's policy guidelines for assessing Coast
Guard civil penalties. These penalty amounts are reviewed regularly to
ensure that they reflect a fair and equitable enforcement policy.
The pilot program results indicated that the current small oil
spill penalties were appropriate. However, the Coast Guard has revised
some penalties for pollution prevention violations. Results of the
pilot program indicated that using the same penalty amounts for
pollution prevention violations as those specified in the current
Commandant's policy guidelines for assessing Coast Guard civil
penalties provided no incentive to accept an NOV. To encourage
acceptance of the NOV, pollution prevention violations that have a
recommended penalty of $2,500 or less under the Commandant's civil
penalty guidelines will be proposed on an NOV at 75% of the amount
listed for the specific offense. Pollution prevention violations that
have a recommended penalty of $2,500 or more under the Commandant's
civil penalty guidelines are no longer eligible for issuance of an NOV
and will be sent to the Hearing Officer for a determination. The NOV
option will be closely monitored to determine if additional spill
categories or different penalties are needed in the future.
Two comments asked that the determination of first offense be based
on the record of each platform or vessel, not the company as a whole.
The Coast Guard agrees that for purposes of NOV issuance each
platform, vessel, or unit should be treated separately when determining
whether or not it is a first offense for the purpose of assessing
penalties. This is reflected in the NOV implementation guidance.
One comment indicated that Coast Guard petty officers do not have
the experience to make a judgment as to when to issue a NOV and that
any assessment should only be made after review by a higher ranking
authority.
The Coast Guard disagrees. Coast Guard Petty Officers selected as
issuing officers are trained professionals who have demonstrated
knowledge and ability in their field. Before any Petty Officer
investigates a violation and issues a NOV, he or she is first given
proper instruction and is determined to be qualified by his or her
command. Issuing officers, however, have no discretion in assessing
penalty amounts. If an NOV is issued, the penalty amount is taken
directly from the implementing guidance. If the offense does not meet
specific criteria in the guidance, an NOV cannot be issued.
One comment stated that a party should be given the right to be
heard prior to the issuance of a NOV.
The Coast Guard disagrees. A party is not entitled to a hearing
prior to initiation of civil penalty action. Under Coast Guard
procedures, the ``initiation of civil penalty action'' occurs with the
Letter of Notification from a Hearing Officer, or in some cases with
the NOV. The NOV does not take away any rights a party has to a
hearing. The NOV procedure is voluntary, and the recipient of an NOV
may opt to have the case processed under ordinary procedures which
include the right to a hearing before disposition on the case.
Three comments expressed general confusion over how the NOV option
will work and concern about the protection of rights for a party issued
an NOV.
The NOV is an opportunity to use an optional procedure for
processing civil penalty cases. It may be declined by a party. The NOV
form states that a party may decline the NOV, which will immediately
result in a violation case being forwarded through the appropriate
district to a Hearing Officer for determination. The form also states
that taking no action on the NOV has the same result as declining the
NOV. A ``no action'' response will, however, delay the referral of the
case to the District for review because the 45-day from issuance period
must elapse before the Coast Guard begins processing the case under
normal procedures. A change has been made to Sec. 1.07-11(b)(6) to
reflect this procedure.
Three comments expressed concern that the implementing guidance was
not provided to the public during the pilot program.
A number of individuals requested, and were provided, the Coast
Guard's NOV guidance during the pilot program. A copy of current
implementing guidance is available by writing to:
Marine Environmental Protection Division (G-MEP), U.S. Coast Guard
Headquarters, 2100 Second Street SW., room 3406, Washington, DC 20593-
0001.
Three comments felt that a notice of proposed rulemaking (NPRM)
should have been published instead of an interim final rule (IFR).
The changes to 33 CFR 1.07 are procedural and provide a benefit to
the public. Thus, under 5 U.S.C. 553(b)(3) a NPRM was not necessary. An
IFR was published to provide a regulatory basis to conduct the pilot
program. Comments were encouraged and a six month comment period was
established. All comments were considered in implementing this final
rule. The NOV procedure is optional and use of the procedure provides a
benefit to the public. The IFR, however, requested comments both on the
procedure and on its implementation. Those comments were considered
before issuing this Final Rule, however no comments resulted in
substantial change to the IFR.
One comment expressed concern that Coast Guard personnel would be
over-zealous in their prosecution of civil penalty cases against small
business.
The NOV option has safeguards built in to protect from such an
occurrence. The criteria for using an NOV is based on the size of a
spill and the violation history of the party to whom it may be issued.
Issuing officers may not deviate from this criteria.
One comment encouraged the Coast Guard to proceed with a final rule
but make sure that all rights of a party are preserved and that ``no
response'' should not be interpreted as acceptance of a penalty.
As previously discussed, ``no response'' will result in processing
of a violation through ordinary procedures as if a NOV had never been
issued.
One comment asked that the NOV be provided to an officer of the
company that is being cited rather than an employee who may not pass it
to the appropriate official. The comment also suggested that 60 days is
a more reasonable time to respond.
Since the purpose of the NOV option is to provide immediate
notification of a settlement offer, it is impractical to always deliver
the NOV to a company officer. Further, the NOV may be against an
individual, not a company. Every effort is made to ensure that the
correct responsible party is identified.
As to the length of time to pay an NOV, the Coast Guard agrees that
30 days was too short a period. As a result of the pilot program the
Coast Guard had already decided to lengthen the time a party has to
respond to an NOV. During the pilot program the number of NOVs paid
within 30 days was approximately 65%, while payment before 45 days
exceeded 85%. Therefore, the deadline for payment of a penalty in a NOV
in order to avoid submission of the case to the Hearing Officer
established in Sec. 1.07-11(b)(4) has been changed from 30 to 45 days.
Regulatory Evaluation
No comments were received on the draft regulatory evaluation. This
rule is not a significant regulatory action under section 3(f) of
Executive Order 12866 and does not require an assessment of potential
costs and benefits under section 6(a)(3) of 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 there to be minimal economic impact from this procedural
rule and a full Regulatory Evaluation is unnecessary. The total annual
cost to the public from civil penalties is not increased by this rule.
Both the public and the government should realize savings from the
reduction in administrative processing costs through eliminating the
need for review by the District Commander and action by the Hearing
Officer in those cases in which the penalty specified in a NOV is paid
within the allowed time by the party.
Small Entities
Only one comment was received on the impact of the interim rule on
small entities. That comment concerned potential over-zealous
enforcement and is discussed in the comment section of this preamble.
Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the Coast
Guard considered whether this rulemaking would 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). This rule is administrative in nature, making final an
alternate method of processing violation cases. The total number of
civil penalties levied against the public does not substantially change
as the result of this regulation. Therefore, the Coast Guard certifies
under section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.) that this rule will not have a significant economic impact on a
substantial number of small entities.
Collection of Information
This rulemaking contains no collection of information requirements
under the Paperwork Reduction Act (44 U. S. C. 3501 et seq.).
Federalism
No comments were received on the federalism implications of the
interim rule. 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
No comments were received on the environmental impact of the
interim rule. The Coast Guard considered the environmental impact of
this rulemaking and concluded that, under section 2.B.2 of Commandant
Instruction M16475.lB, this rule is categorically excluded from further
environmental documentation. Procedural rules do not require
environmental impact studies.
List of Subjects in 33 CFR Part 1
Administrative practice and procedure, Authority delegations
(Government agencies), Freedom of Information, Penalties.
Accordingly, the interim rule amending 33 CFR Part 1 which was
published at 59 FR 16560 on April 7, 1994, is adopted as a final rule
with the following change:
PART 1--[AMENDED]
1. The authority citation for Subpart 1.01 continues to read as
follows:
Authority: 14 U.S.C. 633; 49 CFR 1.46.
Subpart 1.07--Enforcement; Civil and Criminal Penalty Proceedings
2. Section 1.07-11 is revised 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 the following information:
(1) The alleged violation and the applicable law or regulations
violated;
(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) A statement that payment of the proposed penalty within 45 days
will settle the case;
(5) The place to which, and the manner in which, payment is to be
made;
(6) A statement that the party may decline the Notice of Violation
and that if the Notice of Violation is declined, the party has the
right to a hearing prior to a final assessment of a penalty by a
Hearing Officer.
(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 declines a Notice of Violation or takes no action on
the Notice of Violation within 45 days, the case file will be sent to
the District Commander for processing under the procedures described in
Sec. 1.07-10(b).
Dated: December 21, 1994.
J.C. Card,
Rear Admiral, U.S. Coast Guard, Chief, Office of Marine Safety,
Security and Environmental Protection.
[FR Doc. 94-31792 Filed 12-23-94; 8:45 am]
BILLING CODE 4910-14-P
