1 late, or alter any such report, account, record, or memoran2 dum, or shall knowingly and willfully file any false report, 3 account, record, or memorandum, shall be deemed guilty of a 4 misdemeanor and, upon conviction thereof, be subject for 5 each offense to a fine of not less than $100 and not more 6 than $25,000 or to imprisonment for not more than one year, 7 or both.".

8

SEC. 5. Section 609(a) of the Federal Aviation Act of

9 1958 (49 U.S.C. 1429(a)) is amended:

10 (a) By amending the fourth sentence to read: "Any 11 person whose certificate is affected by an order of the Secre12 tary under this section, or against whom a civil penalty is 13 assessed by the Secretary under section 901(a)(1) of this Act 14 for a violation other than one relating to the transportation of 15 hazardous materials, may, except as provided in section 16 903(b)(2) of this Act, appeal the Secretary's order or assess17 ment to the Board and the Board may, after notice and hear18 ing, amend, modify or reverse the Secretary's order or as19 sessment if it finds that safety in air commerce or air trans20 portation and the public interest do not require affirmation of 21 the order or assessment.";

22

(b) By amending the sixth sentence by inserting the

23 words "or assessment" after the word "order" where it first 24 appears, and by inserting the words "in the case of certificate 25 action" after the word "unless"; and

(c) By amending the last sentence therein to read: "The

2 Secretary or the person substantially affected by the Board's

3 order may obtain judicial review of said order under the pro

4 visions of section 1006.".

5

SEC. 6. Section 903(b) of the Federal Aviation Act of

6 1958 (49 U.S.C. 1473(b)) is amended:

7

(a) By renumbering existing subparagraphs (1), (2), (3),

8 and (4) as subparagraphs (3), (4), (5), and (6), respectively; (b) By adding the following new subparagraphs (1) and

9

“(1) In the case of a civil penalty, assessed by the Secretary or the Board in accordance with section 901 of this Act, the issue of liability or amount of civil pen

alty shall not be reexamined in any subsequent suit for

collection of such civil penalty.

"(2) The United States district courts shall have exclusive jurisdiction over any civil penalty action initiated by the Secretary: (i) which involves an amount in controversy in excess of $10,000; (ii) which is an in rem action or in which an in rem action based on the same violation has also been brought; (iii) regarding

which an aircraft subject to lien has been seized by the United States; (iv) in which a suit for injunctive relief

based on the violation giving rise to the civil penalty

1.

2

has also been brought; or (v) for a violation of the exclusive rights provision of section 308(a) of this Act.".

3

(c) By amending the second sentence in subparagraph 4 (3) by inserting at the beginning of such sentence: "In the

5 case of civil penalty actions under subparagraph (2) of this 6 subsection,".

Mr. ANDERSON. Existing law establishes civil penalties of up to $1,000 per offense for violations of the FAA and CAB statutes and regulations.

The law also provides for a continuing violation. Each day of a separate offense is subject to $1,000 penalty.

H.R. 7488 raises the civil penalty to $25,000 per offense. The bill also changes the present procedure under which only a U.S. district court can impose a civil penalty. H.R. 7488 will allow the FAA itself to impose civil penalties of less than $10,000. A person against whom a penalty is imposed by the FAA would be able to appeal the decision to the NTSB where he would have a right to a hearing before an administrative law judge.

This is the same procedure followed when the FAA decides to suspend or revoke a certificate.

With respect to criminal penalties, H.R. 7488 establishes a new criminal penalty for knowing and willful violations of title VI of the Federal Aviation Act and the FAA's title VI regulations.

Title VI is the main statutory basis for most FAA safety and licensing regulations.

H.R. 7488 also increases existing criminal penalties and for the first time makes violators subject to imprisonment of up to a year as well as to fines.

The civil and criminal penalties established by H.R. 7488 generally relate to violations of statutes and regulations designed to further aviation safety. These regulations affect the safety of hundreds of millions of persons traveling by air each year. It is extremely important these penalties be high enough to deter violations which may endanger human life.

On the other hand, we must bear in mind that the civil and criminal penalties can have a severe and lasting impact on the individuals and companies against which they are imposed.

The possible violators cover a wide range from private pilots and mechanics to the largest airline company. The offenses subject cover a similar range from technical violations having no relation to safety to reckless conduct having high risks.

In considering legislation, we must assure ourselves that there will be adequate recognition of these differences and the type of offenses and the size of the offender.

We must also assure ourselves that persons accused of violations will be treated fairly and that they will not be subject to disproportionate penalties for trivial violations.

Mr. Snyder, any comments?

Mr. SNYDER. Yes, Mr. Chairman. I would say that I think this bill has generated a fair amount of interest in the aviation community. From what I have heard, it appears to be overwhelmingly negative. Naturally I wouldn't expect those subject to the enforcement powers of the FAA to favor giving the agency a bigger stick. However, when the bill is examined closely, several questions remain unanswered as to why the agency is asking for such a large increase in its power. Certainly the potential for serious abuse would be far greater than it is today.

As you have indicated, the agency is seeking to increase its civil penalty authority from $1,000 to $25,000 for violations of most provisions of the Federal Aviation Act.

The FAA apparently claims that this increase is needed to deter would-be violators to make sure individuals do not feel that the cost of violating regulations is a conceptual risk of doing business.

The most extreme cases of gross violations such as the documented abuses that occur in places like Cockroach Corner in south Florida. For these cases I think the FAA has a point.

Many are unscrupulous operators who have no regard for these safety regulations. Some amount of increased civil penalty authority may well be justified in those circumstances, even if it is a large

one.

However, for all those who care only about maximizing profit, there are also many who commit violations which are accidental or which result from an honest mistake with no malicious intent.

While some violations of this type can be quite serious, others may not be, and it would be up to the sound discretion of the FAA to use this authority wisely.

Quite frankly, Mr. Chairman, I am not sure I want to trust the FAA to draw those distinctions in all cases. I have serious reservations about supporting a 25-fold increase in the civil penalty authority for this reason.

In addition, I do not believe it is necessary to have any increased penalty apply to noncommercial operations.

I think with few exceptions a $1,000 fine is enough to deter most individuals from purposely violating a regulation. It should be pointed out the FAA also has authority to suspend or revoke certificates for certain violations, and the threat of such action is a very strong deterrent.

In cases where these have not had a sufficient deterrent value, it might be desirable to explore increasing the penalty for those who consistently violate the Federal aviation regulations.

Another point which must be made, Mr. Chairman, concerns the numerous ways the FAA has devised to effectively get around the $1,000 civil penalty maximum.

There is a certain perversity involved when the agency recently fined PSA $350,000 and Braniff $1.5 million, all subject to the $1,000 maximum.

They then tell Congress it needs more authority. What the FAA has done in these cases is levy these fines based on the number of different violations, number of flights, and the aircraft affected, and the number of days during which the violation occurs.

Obviously you can run it up fairly easily in this way and the FAA seems to be very accomplished in doing this.

One can imagine what fines might be levied if they were allowed to charge $25,000 per violation. This is another area of inquiry we might pursue before we decide if such an amendment is needed at all.

Mr. Chairman, this legislation would also accomplish other things. It would impose criminal penalties for willful and wanton violations, replace criminal penalties with civil penalties for rules governing the building of structures which may pose hazards to air navigation, the use of the NTSB as the agency which would hear appeals of civil cases much as it does in certificate actions.