[Federal Register Volume 63, Number 98 (Thursday, May 21, 1998)]
[Notices]
[Pages 27934-27937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13587]
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DEPARTMENT OF ENERGY
Small Entity Compliance Guidance and Civil Penalty Reduction and
Waiver Pursuant to the Small Business Regulatory Enforcement Fairness
Act of 1996; Statement of Policy
AGENCY: Department of Energy.
ACTION: Notice.
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SUMMARY: The Department of Energy today publishes a statement of policy
regarding guidance to small entities concerning compliance with
statutory and regulatory requirements and the waiver or reduction of
civil penalties for small entities that violate statutory and
regulatory requirements. This policy statement is published to comply
with sections 213 and section 223 of the Small Business Regulatory
Enforcement Fairness Act of 1996.
DATES: This policy takes effect on June 22, 1998.
ADDRESSES: Interested persons may submit any comments or suggestions
with respect to this policy statement to Michael W. Bowers, U.S.
Department of Energy, Office of General Counsel, GC-74, 1000
Independence Avenue, SW, Washington, DC 20585, (202) 586-9507.
FOR FURTHER INFORMATION CONTACT: Michael W. Bowers, U.S. Department of
Energy, Office of General Counsel, GC-74, 1000 Independence Avenue, SW,
Washington, DC 20585, (202) 586-9507.
SUPPLEMENTARY INFORMATION:
I. Background
The Small Business Regulatory Enforcement Fairness Act (SBREFA),
which was enacted as title II of Pub. L. 104-121, was signed into law
on March 29, 1996. The primary goals of SBREFA as stated in the Act are
to implement recommendations of the 1995 White House Conference on
Small Business; provide small entities enhanced opportunities for
judicial review of final agency action; encourage small business
participation in the regulatory process; develop more accessible
sources of information on regulatory and reporting requirements for
small entities; create a more cooperative regulatory environment for
small businesses; and make federal regulators more accountable for
``excessive'' enforcement actions.
Section 221 of SBREFA, 5 U.S.C. 601 note, defines the term ``small
entity'' as having the same meaning as in section 601 of the Regulatory
Flexibility Act (RFA). The RFA defines ``small entity'' as any ``small
business,'' ``small organization,'' or ``small governmental
jurisdiction.'' 5 U.S.C. 601(6). Under the RFA, a ``small business''
has the same meaning as ``small business concern'' under section 3 of
the Small Business Act, unless an agency, after consultation with the
Office of Advocacy of the Small Business Administration (SBA) and after
an opportunity for public comment, establishes other appropriate
definitions. 5 U.S.C. 601(3). Under the Small Business Act, a ``small
business concern'' is one that is independently owned and operated and
not dominant in its field of operation (15 U.S.C. 632(a)(1)). SBA
regulations further define ``small business concern'' using number of
employees or annual income by industry category. 13 CFR part 121. SBA's
regulations also provide that the affiliates of an enterprise are
included in determining its size. 13 CFR 121.103. The RFA defines
``small organization'' as a not-for-profit enterprise which is
independently owned and operated and not dominant in its field, unless
an agency, after opportunity for public comment, establishes other
definitions of the term appropriate to its activities and publishes
such definitions in the Federal Register. 5 U.S.C. 601(4). The RFA
defines a ``small governmental jurisdiction'' as governments of cities,
counties, towns, townships, villages, school districts, or special
districts with a population of less than 50,000, unless an agency
establishes other appropriate definitions after opportunity for public
comment. 5 U.S.C. 601(5). The Department of Energy (DOE or Department)
has not established alternative definitions of these terms. The RFA
definitions of these terms are included in Section III of the policy
statement published today.
The Department currently does not administer any program that is
focused principally on the regulation of small entities. DOE does
administer programs that involve financial assistance to, or
procurement from, small entities. Moreover, requirements in particular
rules issued by DOE, which may be enforced by assessment of civil
penalties, may apply to some small entities as well as large ones.
Therefore, to comply with sections 213 and 223 of SBREFA, the
Department has issued the policies set forth in this notice in order to
provide for: (1) Guidance to small entities concerning compliance with
statutes and regulations under the Department's jurisdiction, and (2)
the reduction and waiver of civil penalties for small entities.
II. Policy on Compliance Guidance to Small Entities
Under section 213 of SBREFA, 5 U.S.C. 601 note, each agency that
regulates the activities of small entities is directed to establish a
program for responding to inquiries from small entities concerning
compliance, utilizing existing functions and personnel of the agency to
the extent practicable. Section 213(a) provides: ``Whenever appropriate
in the interest of administering statutes and regulations within the
jurisdiction of an agency which regulates small entities, it shall be
the practice of the agency to answer inquiries by small entities
concerning information on, and advice about, compliance with such
statutes and regulations, interpreting and applying the law to specific
sets of facts supplied by the small entity. In any civil or
administrative action against a small entity, guidance given by an
agency applying the law to facts provided by the small entity may be
considered as evidence of the reasonableness or appropriateness of any
proposed fines, penalties or damages sought against such small
entity.''
The Department provides a variety of information and guidance to
persons about compliance with the requirements of the programs it
administers. Each substantive area under the Department's jurisdiction
has staff members who respond to inquiries about compliance with
applicable laws and regulations. If sources of general information are
insufficient to provide the needed guidance or assistance, DOE staff
members may provide specific, informal advice, or may advise the
requester to
[[Page 27935]]
use a more formal method to obtain answers to its inquiry. Following
are some examples of information and procedures that are available to
persons, including small entities, subject to particular DOE regulatory
requirements:
DOE directives, including compliance guides, are available
on an Internet website (http://www.explorer.doe.gov). These directives
primarily apply to the Department's management and operation of its
facilities and to DOE contractors and subcontractors if incorporated
into contracts. Explorer links to the DOE Technical Standards Program's
home page (http://apollo.osti.gov/html/techstds/techstds.html), which
provides access to guides and handbooks pertaining to use of technical
standards in DOE programs. The Department of Energy home page (http://
www.doe.gov) also includes links to information (e.g., names and
telephone numbers of contact persons) provided by various program
offices to assist persons who must comply with regulatory requirements.
DOE has issued a formal policy that addresses issuance of
guidance documents, including technical standards, to assist
contractors in implementing environment, safety and health requirements
at DOE sites (DOE P 450.2A). That policy also commits DOE to provide
opportunities for public input on guidance relating to nuclear safety
rules, including publication of notice of the availability of such
guidance and acceptance of public comments. DOE also has published a
detailed statement of policy concerning enforcement of nuclear safety
requirements as an appendix to its procedural rules for DOE nuclear
activities. 10 CFR part 820, appendix A. This policy statement was
amended on October 8, 1997 (62 FR 52479).
The Office of Energy Efficiency and Renewable Energy has
promulgated rules for the Alternative Fuel Transportation Program that
allow an owner or operator of a fleet of motor vehicles to request an
interpretive ruling on how DOE's regulations apply to its particular
facts and circumstances. 10 CFR 490.5. The regulations provide that
``[n]o person who obtains an interpretive ruling * * * shall be subject
to an enforcement action for civil penalties or criminal fines for
actions reasonably taken in reliance thereon * * *'' 10 CFR 490.5(i).
The Office also issued a ``plain English'' compliance guide when it
published regulations for the program.
The Department has not established a separate program specifically
to provide compliance guidance to small entities. The programs
administered by DOE generally involve large companies with contracts to
conduct operations at DOE facilities or regulation of private sector
companies, such as appliance manufacturers, that are not small
entities. The Department's policy is that each program office with
authority to bring enforcement actions against small entities for
violations of statutory or regulatory requirements should provide
compliance guidance to small entities to the extent appropriate and
practicable. Under this policy, DOE usually will answer inquiries of
small entities concerning compliance if doing so does not interfere
with a matter that currently is under investigation or the subject of
governmental proceedings.
The Department's policy on providing compliance guidance to small
entities includes several conditions on responding to requests by small
entities for written guidance applying law to facts they have provided.
These conditions are necessary because SBREFA provides that agency
guidance may be considered as evidence in any civil or administrative
enforcement proceeding. The policy provides that before responding in
writing to a small entity's request, DOE offices should require the
person who has requested the written guidance to provide in writing the
specific facts and circumstances relevant to its request and to
identify the pertinent statute or regulation. In addition, the policy
calls for DOE offices to consult with legal counsel, and any other DOE
office or agency with an interest in the matter, before providing a
written response to a small entity. With regard to DOE nuclear
activities, the Secretary has delegated to the General Counsel the
responsibility for formulating and issuing any interpretation
concerning the Atomic Energy Act of 1954, other nuclear statute, or a
DOE nuclear safety requirement. 10 CFR 820.51.
III. Policy on Reduction and Waiver of Civil Penalties for Small
Entities
Section 223(a) of SBREFA, 5 U.S.C. 601 note, provides the following
general standard for agency reduction and waiver policies: ``Each
agency regulating the activities of small entities shall establish a
policy or program * * * to provide for the reduction, and under
appropriate circumstances for the waiver, of civil penalties for
violations of a statutory or regulatory requirement by a small entity.
Under appropriate circumstances, an agency may consider ability to pay
in determining penalty assessments on small entities.''
DOE interprets the term ``civil penalites'' in section 223 to mean
civil money penalties. This interpretation is consistent with the
provision that an agency may consider a small entity's ``ability to
pay,'' and the requirement in section 223(c) that each agency report to
Congress on the ``total amount of penalty reductions and waivers''
under its policy or program.
Section 223(b) provides that agency policies or programs are
``(s)ubject to the requirements of other statutes'' and, thus, do not
supersede existing laws on penalties. It provides, moreover, that
agency policies or programs shall contain conditions or exclusions,
which may include, but shall not be limited to: (1) Requiring the small
entity to correct the violation within a reasonable time; (2) limiting
the applicability to violations discovered through participation by the
small entity in a compliance assistance or audit program operated or
supported by the agency or a state; (3) excluding from the program
small entities that have been subject to multiple enforcement actions
by the agency; (4) excluding violations involving willful or criminal
conduct; (5) excluding violations that pose serious health, safety, or
environmental threats; and (6) requiring a good faith effort to comply
with the law.
Several conditions or exclusions suggested in SBREFA are similar to
provisions of a Presidential memorandum on regulatory reform issued on
April 21, 1995, which directed executive agencies to modify penalties
for small businesses. The memorandum provides that agencies shall
exercise their discretion ``to waive the imposition of all or a portion
of a penalty when the violation is corrected within a time period
appropriate to the violation in question * * *. The provisions (of this
section) shall apply only where there has been a good faith effort to
comply with applicable regulations and the violation does not involve
criminal wrongdoing or significant threat to health, safety, or the
environment.'' Memorandum of the President of the United States to
Executive Agencies, ``Regulatory Reform--Waiver of Penalties and
Reduction of Reports'' (April 21, 1995) (5 U.S.C. 601 note).
The Department has authority to impose civil penalties under
various statutes. Section 18 of the Price-Anderson Amendments Act of
1988, 42 U.S.C. 2282a, authorizes DOE to impose civil money penalties
of up to $110,000 on certain persons for violation of DOE nuclear
safety requirements in any
[[Page 27936]]
applicable rule, regulation or order.\1\ The Department has published a
statement of enforcement policy for implementing this authority. 10 CFR
part 820, appendix A. Under the National Defense Authorization Act for
Fiscal Years 1992 and 1993, DOE may impose civil penalties on any
contractor of DOE who fails to provide for the training of individuals
involved in hazardous substance response or emergency response at DOE
nuclear weapons facilities, or who fails to certifiy such training. 42
U.S.C. 7274d. The Department also has authority to impose civil
penalties for violation of certain provisions of the Energy Policy Act,
42 U.S.C. 13262; the Energy Policy and Conservation Act, 42 U.S.C.
6303; the Program Fraud Civil Remedies Act, 31 U.S.C. 3801-3812; and
various other statutes. As mentioned previously, the programs
administered by DOE generally involve large contractors and companies,
but DOE rules sometimes apply to individual small entities that may be
subject to assessment of civil penalties for violation of regulatory
requirements.
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\1\ DOE recently revised the civil penalty amounts specified in
the PAAA and other statutes to comply with the Federal Civil
Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461 note, as
amended by the Debt Collection Improvement Act of 1996, Pub. L. 104-
134. See Final Rule, Inflation Adjustment of Civil Monetary
Penalties, 62 FR 46181 (Sept. 2, 1997).
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DOE will consider whether to reduce or waive civil penalties that
have been assessed against small entities on a case-by-case basis.
Under the DOE policy, small entities are not eligible for the reduction
or waiver of a civil penalty if: (1) The violation involves willful or
criminal conduct; (2) the small entity has not made a good faith effort
to comply with the law; or (3) the violation poses a serious threat to
health, safety, or the environment. These exclusions are given as
examples in SBREFA and are consistent with the President's memorandum
on waiver of penalties for small businesses.
The Department's policy statement includes a non-exclusive list of
factors that DOE may weigh in deciding whether to reduce or waive a
civil penalty that has been assessed against an eligible small entity.
DOE will consider a reduction or waiver of a civil penalty in the
following circumstances: (1) The small entity has not been subject to
previous enforcement actions for statutory or regulatory violations;
(2) the small entity has a low degree of culpability (e.g., violation
was committed inadvertently or without knowledge of requirements); (3)
the small entity cooperated fully during the investigation that
revealed the violation; (4) the small entity engaged in subsequent
corrective actions to mitigate the effects of the violation and prevent
future violations; (5) the small entity reasonably relied on misleading
or erroneous advice given by a DOE officer or employee; and (6) the
small entity is unable financially to pay the penalty. Each factor does
not necessarily need to be present for a small entity to qualify for
reduction or waiver of a civil penalty, and some factors may be weighed
more heavily than others, depending on the particular circumstances.
The Department does not intend this policy statement on reduction
and waiver of civil penalties for small entities to change its current
policies for enforcing nuclear safety requirements under 10 CFR part
820. This statement of policy complements, and is not intended to be
inconsistent with, the statement of enforcement policy in part 820. In
enforcing nuclear safety requirements, the Department encourages and
rewards contractors who promptly identify, report, and correct non-
compliant conditions before they become serious health, safety or
environmental threats. See General Statement of Enforcement Policy,
appendix A to 10 CFR part 820, ``Procedural Rules for DOE Nuclear
Activities.'' The Department's policy is to reduce significantly the
base civil penalty for a DOE contractor who identifies and promptly
reports a violation to DOE. On the other hand, the policy provides for
setting a civil penalty assessment above the base civil penalty if a
covered contractor fails to promptly report and correct potential
violations.
The DOE policy concerning the reduction and waiver of civil
penalties for small entities does not create a right or remedy for any
person. The Department reserves the right to reduce or waive civil
penalties in circumstances other than those listed under the policy
statement if it is legally permissible and in the public interest to do
so.
IV. Congressional Notification
Consistent with the Small Business Regulatory Enforcement Fairness
Act of 1996, DOE will submit to Congress a report regarding the
issuance of this policy statement prior to the effective date. The
report will note that the Office of Management and Budget has
determined that this statement of policy does not constitute a ``major
rule'' under that Act. 5 U.S.C. 804(2).
Issued in Washington, D.C., on May 12, 1998.
Mary Anne Sullivan,
Acting General Counsel.
Statement of Policy on Compliance Guidance and Reduction and Waiver
of Civil Penalties for Small Entities
The Department of Energy (DOE or Department) has issued this policy
statement to comply with sections 213 and 223 of the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), which was enacted
as title II of Pub. L. 104-121. Section 213(b) of SBREFA, 5 U.S.C. 601
note, requires agencies that regulate the activities of small entities
to establish a program for responding to inquiries from small entities
concerning information on, and advice about, compliance with statutory
and regulatory requirements. Section 223 of SBREFA, 5 U.S.C. 601 note,
requires each agency regulating the activities of small entities to
establish a program or policy to provide for the reduction, and under
appropriate circumstances, for the waiver of civil penalties for
violations of statutory or regulatory requirements by small entities.
I. Compliance Guidance to Small Entities
The following policies apply to inquiries from small entities
concerning compliance with applicable statutes and regulations:
1. Each DOE office with authority to bring enforcement actions
against small entities for violation of statutory or regulatory
requirements (hereafter ``DOE office'') should answer inquiries by
small entities concerning the application of statutes and regulations
to specific facts or circumstances, unless answering an inquiry may
interfere with an ongoing investigation or proceeding or otherwise
would not be appropriate or practicable.
2. DOE offices should require a small entity that requests DOE to
provide written guidance applying the law to facts to state the
specific facts and circumstances relevant to its request and to
identify the pertinent statute or regulation and the related question
on which guidance is sought.
3. DOE offices should consult with Department legal counsel, and
any other office or agency with an interest in the matter, before
responding in writing to a request by a small entity for guidance
regarding how a statute or regulation applies to particular facts and
circumstances.
4. DOE offices should deny a request by a small entity for
compliance guidance if the small entity has not
[[Page 27937]]
provided sufficient information upon which to base a response, or for
other good cause.
II. Reduction and Waiver of Civil Penalites for Small Entities
1. DOE offices shall consider on a case-by-case basis whether to
reduce or waive an initial assessment of a civil penalty against a
small entity for violation of a statutory or regulatory requirement in
accordance with the policies that follow.
2. A small entity that has been assessed a civil penalty by DOE
shall not be eligible for a reduction or waiver of the penalty if any
of the following apply:
(a) The violation involves willful or criminal conduct by the small
entity;
(b) The small entity has not made a good faith effort to comply
with the law; or
(c) The violation poses a serious threat to health, safety, or the
environment.
3. Subject to the exclusions in paragraph 2, DOE offices may
consider the following factors in deciding whether to reduce or waive a
civil penalty against a small entity:
(a) The small entity's history of legal or regulatory violations;
(b) The degree of culpability of the small entity when it committed
the violation;
(c) The extent to which the small entity cooperated during the
investigation;
(d) The extent to which the small entity engaged in subsequent
corrective actions to mitigate the effects of the violation and prevent
future violations;
(e) The extent to which the small entity reasonably relied on
misleading or erroneous advice given by a DOE employee;
(f) The ability of the small entity to pay the civil penalty, in
whole or in part; and
(g) Any other relevant fact.
4. DOE offices should require a person requesting the reduction or
waiver of a civil penalty under this policy to establish that it meets
the definition of ``small entity'' set forth in Section III of this
statement of policy.
5. This policy on reduction and waiver of civil penalties for small
entities complements, and does not supersede, the general statement of
enforcement policy in 10 CFR part 820, appendix A, which applies to
enforcement of nuclear safety requirements.
6. The Department reserves the right to reduce or waive civil
penalties in appropriate individual circumstances where it determines
that a reduction or waiver is permitted by law and warranted by the
public interest.
III. Definition of ``Small Entity''
For purposes of this policy, small entity means a ``small
business,'' ``small organization,'' or ``small governmental
jurisdiction'' as defined by the Regulatory Flexibility Act. 5 U.S.C.
601. The Regulatory Flexibility Act definitions are as follows:
(1) Small business has the same meaning as the term ``small
business concern'' under section 3 of the Small Business Act, unless
(DOE), after consultation with the Office of Advocacy of the Small
Business Administration and after opportunity for public comment,
establishes one or more definitions of such term which are appropriate
to the activities of (DOE) and publishes such definition(s) in the
Federal Register;
(2) Small organization means any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field,
unless (DOE) establishes, after opportunity for public comment, one or
more definitions of such term which are appropriate to the activities
of (DOE) and publishes such definition(s) in the Federal Register; and
(3) Small governmental jurisdiction means governments of cities,
counties, towns, townships, villages, school districts, or special
districts, with a population of less than fifty thousand, unless (DOE)
establishes, after opportunity for public comment, one or more
definitions of such term which are appropriate to the activities of
(DOE) and which are based on such factors as location in rural or
sparsely populated areas or limited revenues due to the population of
such jurisdiction, and publishes such definition(s) in the Federal
Register.
[FR Doc. 98-13587 Filed 5-20-98; 8:45 am]
BILLING CODE 6450-01-P
