Civil Monetary Penalties Inflation Adjustments for Ethics in Government Act Violations, 41787-41790 [2016-15193]
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41787
Rules and Regulations
Federal Register
Vol. 81, No. 124
Tuesday, June 28, 2016
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
OFFICE OF GOVERNMENT ETHICS
5 CFR Parts 2634 and 2636
RINs 3209–AA00 and 3209–AA38
Civil Monetary Penalties Inflation
Adjustments for Ethics in Government
Act Violations
Office of Government Ethics.
Interim final rule.
AGENCY:
ACTION:
In accordance with the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015, the U.S. Office of Government
Ethics (OGE) is issuing this rule to make
inflation adjustments for each of the five
civil monetary penalties provided in the
Ethics in Government Act, as reflected
in the executive branchwide financial
disclosure and outside employment/
activities regulations promulgated by
OGE.
SUMMARY:
This interim final rule is
effective August 1, 2016. Written
comments are invited and must be
received on or before August 1, 2016.
ADDRESSES: You may submit comments,
in writing, to OGE on this interim final
rule, identified by RINs 3209–AA00 and
3209–AA38, by any of the following
methods:
Email: usoge@oge.gov. Include the
reference ‘‘Civil Monetary Penalties
Inflation Adjustments Interim Final
Rule’’ in the subject line of the message.
Fax: (202) 482–9237.
Mail/Hand Delivery/Courier: Office of
Government Ethics, Suite 500, 1201
New York Avenue NW., Washington,
DC 20005–3917, Attention: ‘‘Civil
Monetary Penalties Inflation
Adjustments Interim Final Rule.’’
Instructions: All submissions must
include OGE’s agency name and the
Regulation Identifier Numbers (RINs),
3209–AA00 and 3209–AA38, for this
proposed rulemaking. All comments,
including attachments and other
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DATES:
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supporting materials, will become part
of the public record and subject to
public disclosure. Comments may be
posted on OGE’s Web site, www.oge.gov.
Sensitive personal information, such as
account numbers or Social Security
numbers, should not be included.
Comments generally will not be edited
to remove any identifying or contact
information.
FOR FURTHER INFORMATION CONTACT:
Kimberly L. Sikora Panza, Assistant
Counsel, General Counsel and Legal
Policy Division, Office of Government
Ethics, Telephone: 202–482–9300; TTY:
800–877–8339; FAX: 202–482–9237.
SUPPLEMENTARY INFORMATION:
I. Background
The Office of Government Ethics
(OGE) is issuing this interim final rule
as mandated by the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015 (Sec. 701 of
Pub. L. 114–74) (the 2015 Act), which
further amended the Federal Civil
Penalties Inflation Adjustment Act of
1990 (Pub. L. 101–410) (the Inflation
Adjustment Act) to adjust for inflation
the civil monetary penalties (CMPs)
provided in the Ethics in Government
Act of 1978 as amended, 5 U.S.C.
appendix (the Ethics Act). As explained
below, all of the Ethics Act CMPs are
being raised in accordance with the
formula set forth in the 2015 Act. These
‘‘catch-up’’ adjustments will improve
the effectiveness of the Ethics Act CMPs
and maintain their deterrent effect.
In revising the Inflation Adjustment
Act, the 2015 Act requires Federal
agencies to adjust the level of civil
monetary penalties with an initial
‘‘catch-up’’ adjustment through an
interim final rule. The 2015 Act also
requires agencies to make subsequent
annual inflationary adjustments of their
CMPs. Under the 2015 Act, the interim
final rule with the ‘‘catch-up’’ adjusted
penalties must take effect by August 1,
2016. In the case of the Ethics Act
CMPs, the effective date of this
rulemaking regarding the ‘‘catch-up’’
adjustments is August 1, 2016.
OGE emphasizes that the increased
civil monetary penalty amounts
calculated under the 2015 Act are
applicable only to civil penalties
assessed after August 1, 2016 whose
associated violations occurred after
November 2, 2015, the date of
enactment of the 2015 Act. Therefore,
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violations occurring on or before
November 2, 2015, and assessments
made on or before August 1, 2016 whose
associated violations occurred after
November 2, 2015, will continue to be
subject to the civil monetary penalty
amounts currently in effect. The
modified OGE regulatory provisions
will reflect the original, previouslyadjusted and newly-adjusted Ethics Act
CMP amounts. OGE will notify
departments and agencies by
memorandum of this rulemaking action
and its effect.
Ethics Act CMPs
There are five CMPs provided for in
the Ethics Act, as amended inter alia by
the 1989 Ethics Reform Act and the
2007 Honest Leadership and Open
Government Act (HLOGA). Specifically,
the law provides for civil penalties that
can be assessed by an appropriate
United States district court, based upon
a civil action brought by the Department
of Justice, for the following five types of
violations: knowing and willful failure
to file, report required information on,
or falsification of a public financial
disclosure report; knowing and willful
breach of a qualified trust by trustees
and interested parties; negligent breach
of a qualified trust by trustees and
interested parties; misuse of a public
report; and violation of outside
employment/activities provisions. See
sections 102(f)(6)(C)(i) and (ii), 104(a),
105(c)(2) and 504(a) of the Ethics Act, 5
U.S.C. appendix, 102(f)(6)(C)(i) and (ii),
104(a), 105(c)(2) and 504(a). These
penalties are reflected in 5 CFR
2634.701(b), 2634.702(a) and (b), and
2634.703 of OGE’s executive
branchwide financial disclosure
regulation and 5 CFR 2636.104(a) of
OGE’s executive branchwide covered
noncareer employee outside
employment/activities regulation.
In a 1999 rulemaking, 64 FR 47095,
Aug. 30, 1989, OGE made inflation
adjustments to the Ethics Act civil
monetary penalties. These adjustments
were mandated by the Debt Collection
Improvement Act of 1996, section 31001
of Pub. L. 104–134, 110 Stat. 1321,
which revised the Inflation Adjustment
Act to require Federal agencies to adjust
certain statutory CMPs for inflation.
Prior to the 1999 rulemaking, the Ethics
Act CMPs were set by statute in the
Ethics Reform Act of 1989. In the 1999
rulemaking, OGE increased the
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maximum civil monetary penalties for
knowing and willful breach of a
qualified trust by trustees and interested
parties; misuse of a public report; and
violation of outside employment/
activities provisions from $10,000 to
$11,000. OGE also increased the
maximum civil monetary penalty for
negligent breach of a qualified trust by
trustees and interested parties from
$5,000 to $5,500. In that same
rulemaking, OGE adjusted the
maximum civil monetary penalty for
knowing and willful failure to file,
report required information on, or
falsification of a public financial
disclosure report from $10,000 to
$11,000; however, in the 2007 HLOGA,
Congress statutorily increased that
penalty to a maximum of $50,000. No
further adjustments have been made to
any of the Ethics Act CMPs described in
this paragraph.
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Late Filing Fee Not a CMP
The Office of Government Ethics
notes that it has previously determined,
after consultation with the Department
of Justice, that the $200 late filing fee for
public financial disclosure reports that
are more than 30 days overdue (see
section 105(d) of the Ethics Act, 5 U.S.C.
appendix, 105(d), and 5 CFR 2634.704
of OGE’s regulations thereunder) is not
a civil monetary penalty as defined
under the Federal Civil Penalties
Inflation Adjustment Act, as amended.
Therefore, that fee is not being adjusted
in this rulemaking (nor was it
previously adjusted by OGE in the 1999
rulemaking), and will remain at its
current amount of $200.
Calculation of Inflation Adjustments
The ‘‘catch-up’’ adjustments to civil
monetary penalties mandated by the
2015 Act are based on the percent
change between the Consumer Price
Index for all Urban Consumers (CPI–U)
for the month of October in the year of
the previous adjustment (not made
under the Inflation Adjustment Act),
and the October 2015 CPI–U. The
inflation adjustments are to be rounded
to the nearest dollar, and agencies may
not increase penalty levels by more than
150 percent of the corresponding levels
in effect on November 2, 2015.
Subsequent annual adjustments for
inflation mandated by the 2015 Act will
be based on the percent change between
the October CPI–U preceding the date of
the adjustment, and the prior year’s
October CPI–U.
With the exception of the penalty for
knowing and willful failure to file,
report required information on, or
falsification of a public financial
disclosure report, 5 U.S.C. appendix,
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104(a), 5 CFR 2634.701(b), all of the
Ethics Act CMPs were last adjusted
other than pursuant to the Inflation
Adjustment Act by the 1989 Ethics
Reform Act. (As discussed above, the
adjustments made in the 1999
rulemaking were done pursuant to
amendments to the Inflation Adjustment
Act; the ‘‘catch-up’’ adjustment
calculation established by the 2015 Act
requires agencies to make adjustments
based on when CMPs were established
or last adjusted other than pursuant to
the Inflation Adjustment Act.) For these
CMPs, the adjusted penalties
established by this rulemaking will be
calculated by multiplying the penalty
amount established by the 1989 Ethics
Reform Act and 1.89361, the CPI–U
multiplier for 1989. The penalty for
knowing and willful failure to file,
report required information on, or
falsification of a public financial
disclosure report was most recently
adjusted by statute in 2007 by HLOGA.
For this CMP, the adjusted penalty
established by this rulemaking will be
calculated by multiplying the penalty
amount established by HLOGA and
1.13833, the CPI–U multiplier for 2007.
None of these adjusted penalties are
more than 150 percent of the
corresponding levels in effect on
November 2, 2015.
Applying the formula established by
the 2015 Act, OGE is amending the
Ethics Act CMPs to further increase the
three previously-adjusted $11,000
maximum penalties reflected in 5 CFR
2634.702(a) and 2634.703 and 5 CFR
2636.104(a), to a maximum of $18,936;
to increase the one previously-adjusted
$5,500 maximum penalty reflected in
2634.702(b), to a maximum of $9,468;
and to increase the one previouslyadjusted $50,000 maximum penalty,
reflected in 5 CFR 2634.701(b), to a
maximum of $56,916. As noted above,
these new amounts apply only to civil
monetary penalties that are assessed
after August 1, 2016 whose associated
violations occurred after November 2,
2015.
The Office of Government Ethics will
also make future adjustments to the
Ethics Act CMPs in accordance with the
statutory formula set forth in the 2015
Act, which provides for annual
adjustments for inflation.
II. Matters of Regulatory Procedure
Administrative Procedure Act
Pursuant to 5 U.S.C. 553(b), as
General Counsel of the Office of
Government Ethics, I find that good
cause exists for waiving the general
notice of proposed rulemaking and
public comment procedures as to these
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technical amendments. The notice and
comment procedures are being waived
because these amendments, which
concern matters of agency organization,
procedure and practice, are being
adopted in accordance with statutorily
mandated inflation adjustment
procedures of the 2015 Act, which
specifies adoption through an interim
final rulemaking. It is also in the public
interest that the adjusted rates for civil
monetary penalties under the Ethics in
Government Act become effective as
soon as possible in order to maintain
their deterrent effect. However, OGE
notes that, in order to provide an
appropriate period for notification to
executive branch departments and
agencies and their employees, the
effective date for this interim final rule
is August 1, 2016.
Regulatory Flexibility Act
As the designee of the Director of the
Office of Government Ethics, I certify
under the Regulatory Flexibility Act (5
U.S.C. chapter 6) that this interim final
rule would not have a significant
economic impact on a substantial
number of small entities because it
primarily affects current Federal
executive branch employees.
Paperwork Reduction Act
The Paperwork Reduction Act (44
U.S.C. chapter 35) does not apply
because this regulation does not contain
information collection requirements that
require approval of the Office of
Management and Budget.
Unfunded Mandates Reform Act
For purposes of the Unfunded
Mandates Reform Act of 1995 (2 U.S.C.
chapter 5, subchapter II), this rule
would not significantly or uniquely
affect small governments and will not
result in increased expenditures by
State, local, and tribal governments, in
the aggregate, or by the private sector, of
$100 million or more (as adjusted for
inflation) in any one year.
Executive Order 13563 and Executive
Order 12866
Executive Orders 13563 and 12866
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select the regulatory
approaches that maximize net benefits
(including economic, environmental,
public health and safety effects,
distributive impacts, and equity).
Executive Order 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This rulemaking has been
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reviewed by the Office of Management
and Budget, even though it is not
deemed ‘‘significant’’ under section 3(f)
of Executive Order 12866 since it is
limited to the adoption of statutorily
mandated inflation adjustments without
interpretation.
Executive Order 12988
As General Counsel of the Office of
Government Ethics, I have reviewed this
rule in light of section 3 of Executive
Order 12988, Civil Justice Reform, and
certify that it meets the applicable
standards provided therein.
List of Subjects
5 CFR Part 2634
Certificates of divestiture, Conflict of
interests, Government employees,
Penalties, Reporting and recordkeeping
requirements, Trusts and trustees.
5 CFR Part 2636
Conflict of interests, Government
employees, Penalties.
Dated: June 22, 2016.
David J. Apol,
General Counsel, Office of Government
Ethics.
PART 2634—EXECUTIVE BRANCH
FINANCIAL DISCLOSURE, QUALIFIED
TRUSTS, AND CERTIFICATES OF
DIVESTITURE
1. The authority citation for part 2634
is revised to read as follows:
■
Authority: 5 U.S.C. App. (Ethics in
Government Act of 1978); 26 U.S.C. 1043;
Pub. L. 101–410, 104 Stat. 890, 28 U.S.C.
2461 note (Federal Civil Penalties Inflation
Adjustment Act of 1990), as amended by Sec.
31001, Pub. L. 104–134, 110 Stat. 1321 (Debt
Collection Improvement Act of 1996) and
Sec. 701, Pub. L. 114–74 (Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015); E.O. 12674, 54
FR 15159, 3 CFR, 1989 Comp., p. 215, as
modified by E.O. 12731, 55 FR 42547, 3 CFR,
1990 Comp., p. 306.
2. Section 2634.101 is revised to read
as follows:
■
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Authority.
The regulation in this part is issued
pursuant to the authority of the Ethics
in Government Act of 1978, as
amended; 26 U.S.C. 1043; the Federal
Civil Penalties Inflation Adjustment Act
of 1990, as amended by the Debt
Collection Improvement Act of 1996
and the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015; and Executive Order 12674 of
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3. Section 2634.701 is amended by
revising paragraph (b) to read as follows:
■
§ 2634.701
reports.
Failure to file or falsifying
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*
(b) Civil action. The Attorney General
may bring a civil action in any
appropriate United States district court
against any individual who knowingly
and willfully falsifies or who knowingly
and willfully fails to file or report any
information required by filers of public
reports under subpart B of this part. The
court in which the action is brought
may assess against the individual a civil
monetary penalty in any amount, not to
exceed the amounts set forth below, as
provided by section 104(a) of the Act, as
amended, and as adjusted in accordance
with the inflation adjustment
procedures prescribed in the Federal
Civil Penalties Inflation Adjustment Act
of 1990, as amended:
Date of violation or assessment
Accordingly, for the reasons set forth
in the preamble, the Office of
Government Ethics is amending 5 CFR
parts 2634 and 2636 as follows:
§ 2634.101
April 12, 1989, as modified by
Executive Order 12731 of October 17,
1990.
Penalty
Violation occurring before Sept. 29,
1999 ............................................
Violation occurring between Sept.
29, 1999 and Sept. 13, 2007 ......
Violation occurring between Sept.
14, 2007 and Nov. 2, 2015 .........
Violation occurring after Nov. 2,
2015 and penalty assessed on
or before Aug. 1, 2016 ................
Violation occurring after Nov. 2,
2015 and penalty assessed after
Aug. 1, 2016 ...............................
$10,000
11,000
50,000
50,000
Date of violation or assessment
41789
Penalty
Violation occurring between Sept.
29, 1999 and Nov. 2, 2015 .........
Violation occurring after Nov. 2,
2015 and penalty assessed on
or before Aug. 1, 2016 ................
Violation occurring after Nov. 2,
2015 and penalty assessed after
Aug. 1, 2016 ...............................
11,000
11,000
18,936
(b) The Attorney General may bring a
civil action in any appropriate United
States district court against any
individual who negligently violates the
provisions of § 2634.408(d)(1) or (e)(1).
The court in which the action is brought
may assess against the individual a civil
monetary penalty in any amount, not to
exceed the amounts set forth below, as
provided by section 102(f)(6)(C)(ii) of
the Act and as adjusted in accordance
with the inflation adjustment
procedures of the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended:
Date of violation or assessment
Penalty
Violation occurring before Sept. 29,
1999 ............................................
Violation occurring between Sept.
29, 1999 and Nov. 2, 2015 .........
Violation occurring after Nov. 2,
2015 and penalty assessed on
or before Aug. 1, 2016 ................
Violation occurring after Nov. 2,
2015 and penalty assessed after
Aug. 1, 2016 ...............................
$5,000
5,500
5,500
9,468
5. Section 2634.703 is revised to read
as follows:
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56,916
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§ 2634.703
■
(a) The Attorney General may bring a
civil action against any person who
obtains or uses a report filed under this
part for any purpose prohibited by
section 105(c)(1) of the Act, as
incorporated in § 2634.603(f). The court
in which the action is brought may
assess against the person a civil
monetary penalty in any amount, not to
exceed the amounts set forth below, as
provided by section 105(c)(2) of the Act
and as adjusted in accordance with the
inflation adjustment procedures
prescribed in the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended.
*
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*
*
4. Section 2634.702 is revised to read
as follows:
§ 2634.702 Breaches by trust fiduciaries
and interested parties.
(a) The Attorney General may bring a
civil action in any appropriate United
States district court against any
individual who knowingly and willfully
violates the provisions of
§ 2634.408(d)(1) or (e)(1). The court in
which the action is brought may assess
against the individual a civil monetary
penalty in any amount, not to exceed
the amounts set forth below, as
provided by section 102(f)(6)(C)(i) of the
Act and as adjusted in accordance with
the inflation adjustment procedures
prescribed in the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended:
Date of violation or assessment
Penalty
Violation occurring before Sept. 29,
1999 ............................................
$10,000
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Misuse of public reports.
Date of violation or assessment
Violation occurring before Sept. 29,
1999 ............................................
Violation occurring between Sept.
29, 1999 and Nov. 2, 2015 .........
Violation occurring after Nov. 2,
2016 and penalty assessed on
or before Aug. 1, 2016 ................
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Penalty
$10,000
11,000
11,000
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Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Rules and Regulations
Date of violation or assessment
Violation occurring after Nov. 2,
2015 and penalty assessed after
Aug. 1, 2016 ...............................
Penalty
DEPARTMENT OF AGRICULTURE
Grain Inspection, Packers and
Stockyards Administration
18,936
7 CFR Part 800
(b) This remedy shall be in addition
to any other remedy available under
statutory or common law.
PART 2636—LIMITATIONS ON
OUTSIDE EARNED INCOME,
EMPLOYMENT AND AFFILIATIONS
FOR CERTAIN NONCAREER
EMPLOYEES
Grain Inspection Packers and
Stockyards Administration, USDA.
ACTION: Notification of suspension of
supervision fee assessment.
AGENCY:
The Department of
Agriculture (USDA), Grain Inspection,
Packers and Stockyards Administration
(GIPSA) is suspending the assessment of
Authority: 5 U.S.C. App. (Ethics in
Government Act of 1978); Pub. L. 101–410,
fees for supervision of official
104 Stat. 890, 28 U.S.C. 2461 note (Federal
inspection and weighing services
Civil Penalties Inflation Adjustment Act of
performed by delegated States and/or
1990), as amended by Sec. 31001, Pub. L.
designated agencies under the United
104–134, 110 Stat. 1321 (Debt Collection
States Grain Standards Act (USGSA).
Improvement Act of 1996) and Sec. 701, Pub.
DATES: This document is effective
L. 114–74 (Federal Civil Penalties Inflation
beginning July 1, 2016, and remains in
Adjustment Act Improvements Act of 2015);
E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., effect through June 30, 2017.
p. 215, as modified by E.O. 12731, 55 FR
FOR FURTHER INFORMATION CONTACT:
42547, 3 CFR, 1990 Comp., p. 306.
Barry Gomoll by phone at 202–720–
8286 or by email at Barry.L.Gomoll@
■ 7. Section 2636.104 is amended by
revising paragraph (a) to read as follows: usda.gov. Persons with disabilities who
require alternative means for
communication (Braille, large print,
§ 2636.104 Civil, disciplinary and other
action.
audio tape, etc.) should contact the
USDA Target Center at (202) 720–2600
(a) Civil action. Except when the
(voice and TDD).
employee engages in conduct in good
faith reliance upon an advisory opinion SUPPLEMENTARY INFORMATION: The
Agriculture Reauthorizations Act of
issued under § 2636.103, an employee
who engages in any conduct in violation 2015, Public Law 114–54, amended the
USGSA (7 U.S.C. 71–87k) to require
of the prohibitions, limitations and
GIPSA to adjust fees for the supervision
restrictions contained in this part may
of official grain inspection and weighing
be subject to civil action under 5 U.S.C.
app. 504(a) and a civil monetary penalty in order to maintain an operating
reserve of not less than 3 and not more
of not more than the amounts set forth
than 6 months (7 U.S.C. 79(j)(4)).
below, as adjusted in accordance with
GIPSA’s reorganization efforts over
the inflation adjustment procedures
prescribed in the Federal Civil Penalties the past 10 years have resulted in the
centralization of supervision of
Inflation Adjustment Act of 1990, as
delegated states and designated
amended, or the amount of the
agencies. Due to this and other GIPSA
compensation the individual received
for the prohibited conduct, whichever is cost reduction measures, the operating
reserve of GIPSA’s account for
greater.
supervision of official inspection and
Date of violation or assessment
Penalty weighing currently exceeds 6 months by
a significant margin. Accordingly,
Violation occurring before Sept. 29,
GIPSA is issuing this document to
1999 ............................................ $10,000 announce the suspension of the fee for
Violation occurring between Sept.
supervision of official inspection and
29, 1999 and Nov. 2, 2015 .........
11,000
weighing services of domestic grain and
Violation occurring after Nov. 2,
land carriers to Canada and Mexico
2015 and penalty assessed on
or before Aug. 1, 2016 ................
11,000 performed by delegated States and/or
designated agencies. According to the
Violation occurring after Nov. 2,
regulations under the USGSA, GIPSA
2015 and penalty assessed after
Aug. 1, 2016 ...............................
18,936 may suspend any provision of the
regulations in emergencies or other
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circumstances which would not impair
[FR Doc. 2016–15193 Filed 6–27–16; 8:45 am]
the objectives of the USGSA (7 CFR
BILLING CODE 6345–03–P
800.2). GIPSA has determined that
6. The authority citation for part 2636
is revised to read as follows:
■
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Suspension of Supervision Fee
Assessment Under the United States
Grain Standards Act
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SUMMARY:
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suspending supervision fees will not
impair the objectives of the USGSA
because the operating reserve for
supervision services is sufficient to
maintain the service without additional
funds.
GIPSA will no longer assess the fee of
$0.011 per metric ton of domestic
shipments officially inspected and/or
weighed, including land carrier
shipments to Canada and Mexico,
performed by delegated States and/or
designated agencies on or after July 1,
2016 (7 CFR 800.71 Schedule B). These
fees will remain suspended for one year,
at which time GIPSA will reassess the
operating reserve for supervision of
official agency inspection and weighing.
Official inspection agencies may no
longer pass the suspended supervision
fee on to their customers. Agencies
which list GIPSA supervision fees as a
line item on their fee schedules must
eliminate the fee. Agencies which
include supervision fees as a part of fees
that they charge to their customers must
either reduce fees by the amount of the
suspended fee or provide justification
and detailed cost information for
retaining current fees. All agencies must
submit revised fee schedules for GIPSA
approval (7 CFR 800.70).
Larry Mitchell,
Administrator, Grain Inspection, Packers and
Stockyards Administration.
[FR Doc. 2016–15152 Filed 6–27–16; 8:45 am]
BILLING CODE 3410–KD–P
DEPARTMENT OF ENERGY
10 CFR Parts 207, 218, 429, 431, 490,
501, 601, 820, 824, 851, 1013, 1017, and
1050
RIN 1990–AA46
Inflation Adjustment of Civil Monetary
Penalties
Office of the General Counsel,
U.S. Department of Energy.
ACTION: Interim final rule.
AGENCY:
The Department of Energy
(‘‘DOE’’) publishes this interim final
rule to adjust DOE’s civil monetary
penalties (‘‘CMPs’’) for inflation as
mandated by the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
further amended by the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015 (collectively
referred to herein as ‘‘the Act’’). This
rule adjusts CMPs within the
jurisdiction of DOE to the maximum
amount required by the Act.
SUMMARY:
E:\FR\FM\28JNR1.SGM
28JNR1
Agencies
[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)]
[Rules and Regulations]
[Pages 41787-41790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15193]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Rules
and Regulations
[[Page 41787]]
OFFICE OF GOVERNMENT ETHICS
5 CFR Parts 2634 and 2636
RINs 3209-AA00 and 3209-AA38
Civil Monetary Penalties Inflation Adjustments for Ethics in
Government Act Violations
AGENCY: Office of Government Ethics.
ACTION: Interim final rule.
-----------------------------------------------------------------------
SUMMARY: In accordance with the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015, the U.S. Office of Government
Ethics (OGE) is issuing this rule to make inflation adjustments for
each of the five civil monetary penalties provided in the Ethics in
Government Act, as reflected in the executive branchwide financial
disclosure and outside employment/activities regulations promulgated by
OGE.
DATES: This interim final rule is effective August 1, 2016. Written
comments are invited and must be received on or before August 1, 2016.
ADDRESSES: You may submit comments, in writing, to OGE on this interim
final rule, identified by RINs 3209-AA00 and 3209-AA38, by any of the
following methods:
Email: usoge@oge.gov. Include the reference ``Civil Monetary
Penalties Inflation Adjustments Interim Final Rule'' in the subject
line of the message.
Fax: (202) 482-9237.
Mail/Hand Delivery/Courier: Office of Government Ethics, Suite 500,
1201 New York Avenue NW., Washington, DC 20005-3917, Attention: ``Civil
Monetary Penalties Inflation Adjustments Interim Final Rule.''
Instructions: All submissions must include OGE's agency name and
the Regulation Identifier Numbers (RINs), 3209-AA00 and 3209-AA38, for
this proposed rulemaking. All comments, including attachments and other
supporting materials, will become part of the public record and subject
to public disclosure. Comments may be posted on OGE's Web site,
www.oge.gov. Sensitive personal information, such as account numbers or
Social Security numbers, should not be included. Comments generally
will not be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Kimberly L. Sikora Panza, Assistant
Counsel, General Counsel and Legal Policy Division, Office of
Government Ethics, Telephone: 202-482-9300; TTY: 800-877-8339; FAX:
202-482-9237.
SUPPLEMENTARY INFORMATION:
I. Background
The Office of Government Ethics (OGE) is issuing this interim final
rule as mandated by the Federal Civil Penalties Inflation Adjustment
Act Improvements Act of 2015 (Sec. 701 of Pub. L. 114-74) (the 2015
Act), which further amended the Federal Civil Penalties Inflation
Adjustment Act of 1990 (Pub. L. 101-410) (the Inflation Adjustment Act)
to adjust for inflation the civil monetary penalties (CMPs) provided in
the Ethics in Government Act of 1978 as amended, 5 U.S.C. appendix (the
Ethics Act). As explained below, all of the Ethics Act CMPs are being
raised in accordance with the formula set forth in the 2015 Act. These
``catch-up'' adjustments will improve the effectiveness of the Ethics
Act CMPs and maintain their deterrent effect.
In revising the Inflation Adjustment Act, the 2015 Act requires
Federal agencies to adjust the level of civil monetary penalties with
an initial ``catch-up'' adjustment through an interim final rule. The
2015 Act also requires agencies to make subsequent annual inflationary
adjustments of their CMPs. Under the 2015 Act, the interim final rule
with the ``catch-up'' adjusted penalties must take effect by August 1,
2016. In the case of the Ethics Act CMPs, the effective date of this
rulemaking regarding the ``catch-up'' adjustments is August 1, 2016.
OGE emphasizes that the increased civil monetary penalty amounts
calculated under the 2015 Act are applicable only to civil penalties
assessed after August 1, 2016 whose associated violations occurred
after November 2, 2015, the date of enactment of the 2015 Act.
Therefore, violations occurring on or before November 2, 2015, and
assessments made on or before August 1, 2016 whose associated
violations occurred after November 2, 2015, will continue to be subject
to the civil monetary penalty amounts currently in effect. The modified
OGE regulatory provisions will reflect the original, previously-
adjusted and newly-adjusted Ethics Act CMP amounts. OGE will notify
departments and agencies by memorandum of this rulemaking action and
its effect.
Ethics Act CMPs
There are five CMPs provided for in the Ethics Act, as amended
inter alia by the 1989 Ethics Reform Act and the 2007 Honest Leadership
and Open Government Act (HLOGA). Specifically, the law provides for
civil penalties that can be assessed by an appropriate United States
district court, based upon a civil action brought by the Department of
Justice, for the following five types of violations: knowing and
willful failure to file, report required information on, or
falsification of a public financial disclosure report; knowing and
willful breach of a qualified trust by trustees and interested parties;
negligent breach of a qualified trust by trustees and interested
parties; misuse of a public report; and violation of outside
employment/activities provisions. See sections 102(f)(6)(C)(i) and
(ii), 104(a), 105(c)(2) and 504(a) of the Ethics Act, 5 U.S.C.
appendix, 102(f)(6)(C)(i) and (ii), 104(a), 105(c)(2) and 504(a). These
penalties are reflected in 5 CFR 2634.701(b), 2634.702(a) and (b), and
2634.703 of OGE's executive branchwide financial disclosure regulation
and 5 CFR 2636.104(a) of OGE's executive branchwide covered noncareer
employee outside employment/activities regulation.
In a 1999 rulemaking, 64 FR 47095, Aug. 30, 1989, OGE made
inflation adjustments to the Ethics Act civil monetary penalties. These
adjustments were mandated by the Debt Collection Improvement Act of
1996, section 31001 of Pub. L. 104-134, 110 Stat. 1321, which revised
the Inflation Adjustment Act to require Federal agencies to adjust
certain statutory CMPs for inflation. Prior to the 1999 rulemaking, the
Ethics Act CMPs were set by statute in the Ethics Reform Act of 1989.
In the 1999 rulemaking, OGE increased the
[[Page 41788]]
maximum civil monetary penalties for knowing and willful breach of a
qualified trust by trustees and interested parties; misuse of a public
report; and violation of outside employment/activities provisions from
$10,000 to $11,000. OGE also increased the maximum civil monetary
penalty for negligent breach of a qualified trust by trustees and
interested parties from $5,000 to $5,500. In that same rulemaking, OGE
adjusted the maximum civil monetary penalty for knowing and willful
failure to file, report required information on, or falsification of a
public financial disclosure report from $10,000 to $11,000; however, in
the 2007 HLOGA, Congress statutorily increased that penalty to a
maximum of $50,000. No further adjustments have been made to any of the
Ethics Act CMPs described in this paragraph.
Late Filing Fee Not a CMP
The Office of Government Ethics notes that it has previously
determined, after consultation with the Department of Justice, that the
$200 late filing fee for public financial disclosure reports that are
more than 30 days overdue (see section 105(d) of the Ethics Act, 5
U.S.C. appendix, 105(d), and 5 CFR 2634.704 of OGE's regulations
thereunder) is not a civil monetary penalty as defined under the
Federal Civil Penalties Inflation Adjustment Act, as amended.
Therefore, that fee is not being adjusted in this rulemaking (nor was
it previously adjusted by OGE in the 1999 rulemaking), and will remain
at its current amount of $200.
Calculation of Inflation Adjustments
The ``catch-up'' adjustments to civil monetary penalties mandated
by the 2015 Act are based on the percent change between the Consumer
Price Index for all Urban Consumers (CPI-U) for the month of October in
the year of the previous adjustment (not made under the Inflation
Adjustment Act), and the October 2015 CPI-U. The inflation adjustments
are to be rounded to the nearest dollar, and agencies may not increase
penalty levels by more than 150 percent of the corresponding levels in
effect on November 2, 2015. Subsequent annual adjustments for inflation
mandated by the 2015 Act will be based on the percent change between
the October CPI-U preceding the date of the adjustment, and the prior
year's October CPI-U.
With the exception of the penalty for knowing and willful failure
to file, report required information on, or falsification of a public
financial disclosure report, 5 U.S.C. appendix, 104(a), 5 CFR
2634.701(b), all of the Ethics Act CMPs were last adjusted other than
pursuant to the Inflation Adjustment Act by the 1989 Ethics Reform Act.
(As discussed above, the adjustments made in the 1999 rulemaking were
done pursuant to amendments to the Inflation Adjustment Act; the
``catch-up'' adjustment calculation established by the 2015 Act
requires agencies to make adjustments based on when CMPs were
established or last adjusted other than pursuant to the Inflation
Adjustment Act.) For these CMPs, the adjusted penalties established by
this rulemaking will be calculated by multiplying the penalty amount
established by the 1989 Ethics Reform Act and 1.89361, the CPI-U
multiplier for 1989. The penalty for knowing and willful failure to
file, report required information on, or falsification of a public
financial disclosure report was most recently adjusted by statute in
2007 by HLOGA. For this CMP, the adjusted penalty established by this
rulemaking will be calculated by multiplying the penalty amount
established by HLOGA and 1.13833, the CPI-U multiplier for 2007. None
of these adjusted penalties are more than 150 percent of the
corresponding levels in effect on November 2, 2015.
Applying the formula established by the 2015 Act, OGE is amending
the Ethics Act CMPs to further increase the three previously-adjusted
$11,000 maximum penalties reflected in 5 CFR 2634.702(a) and 2634.703
and 5 CFR 2636.104(a), to a maximum of $18,936; to increase the one
previously-adjusted $5,500 maximum penalty reflected in 2634.702(b), to
a maximum of $9,468; and to increase the one previously-adjusted
$50,000 maximum penalty, reflected in 5 CFR 2634.701(b), to a maximum
of $56,916. As noted above, these new amounts apply only to civil
monetary penalties that are assessed after August 1, 2016 whose
associated violations occurred after November 2, 2015.
The Office of Government Ethics will also make future adjustments
to the Ethics Act CMPs in accordance with the statutory formula set
forth in the 2015 Act, which provides for annual adjustments for
inflation.
II. Matters of Regulatory Procedure
Administrative Procedure Act
Pursuant to 5 U.S.C. 553(b), as General Counsel of the Office of
Government Ethics, I find that good cause exists for waiving the
general notice of proposed rulemaking and public comment procedures as
to these technical amendments. The notice and comment procedures are
being waived because these amendments, which concern matters of agency
organization, procedure and practice, are being adopted in accordance
with statutorily mandated inflation adjustment procedures of the 2015
Act, which specifies adoption through an interim final rulemaking. It
is also in the public interest that the adjusted rates for civil
monetary penalties under the Ethics in Government Act become effective
as soon as possible in order to maintain their deterrent effect.
However, OGE notes that, in order to provide an appropriate period for
notification to executive branch departments and agencies and their
employees, the effective date for this interim final rule is August 1,
2016.
Regulatory Flexibility Act
As the designee of the Director of the Office of Government Ethics,
I certify under the Regulatory Flexibility Act (5 U.S.C. chapter 6)
that this interim final rule would not have a significant economic
impact on a substantial number of small entities because it primarily
affects current Federal executive branch employees.
Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply
because this regulation does not contain information collection
requirements that require approval of the Office of Management and
Budget.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
chapter 5, subchapter II), this rule would not significantly or
uniquely affect small governments and will not result in increased
expenditures by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more (as adjusted for
inflation) in any one year.
Executive Order 13563 and Executive Order 12866
Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select the regulatory approaches that
maximize net benefits (including economic, environmental, public health
and safety effects, distributive impacts, and equity). Executive Order
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This rulemaking has been
[[Page 41789]]
reviewed by the Office of Management and Budget, even though it is not
deemed ``significant'' under section 3(f) of Executive Order 12866
since it is limited to the adoption of statutorily mandated inflation
adjustments without interpretation.
Executive Order 12988
As General Counsel of the Office of Government Ethics, I have
reviewed this rule in light of section 3 of Executive Order 12988,
Civil Justice Reform, and certify that it meets the applicable
standards provided therein.
List of Subjects
5 CFR Part 2634
Certificates of divestiture, Conflict of interests, Government
employees, Penalties, Reporting and recordkeeping requirements, Trusts
and trustees.
5 CFR Part 2636
Conflict of interests, Government employees, Penalties.
Dated: June 22, 2016.
David J. Apol,
General Counsel, Office of Government Ethics.
Accordingly, for the reasons set forth in the preamble, the Office
of Government Ethics is amending 5 CFR parts 2634 and 2636 as follows:
PART 2634--EXECUTIVE BRANCH FINANCIAL DISCLOSURE, QUALIFIED TRUSTS,
AND CERTIFICATES OF DIVESTITURE
0
1. The authority citation for part 2634 is revised to read as follows:
Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 26
U.S.C. 1043; Pub. L. 101-410, 104 Stat. 890, 28 U.S.C. 2461 note
(Federal Civil Penalties Inflation Adjustment Act of 1990), as
amended by Sec. 31001, Pub. L. 104-134, 110 Stat. 1321 (Debt
Collection Improvement Act of 1996) and Sec. 701, Pub. L. 114-74
(Federal Civil Penalties Inflation Adjustment Act Improvements Act
of 2015); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.
0
2. Section 2634.101 is revised to read as follows:
Sec. 2634.101 Authority.
The regulation in this part is issued pursuant to the authority of
the Ethics in Government Act of 1978, as amended; 26 U.S.C. 1043; the
Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by
the Debt Collection Improvement Act of 1996 and the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015; and
Executive Order 12674 of April 12, 1989, as modified by Executive Order
12731 of October 17, 1990.
0
3. Section 2634.701 is amended by revising paragraph (b) to read as
follows:
Sec. 2634.701 Failure to file or falsifying reports.
* * * * *
(b) Civil action. The Attorney General may bring a civil action in
any appropriate United States district court against any individual who
knowingly and willfully falsifies or who knowingly and willfully fails
to file or report any information required by filers of public reports
under subpart B of this part. The court in which the action is brought
may assess against the individual a civil monetary penalty in any
amount, not to exceed the amounts set forth below, as provided by
section 104(a) of the Act, as amended, and as adjusted in accordance
with the inflation adjustment procedures prescribed in the Federal
Civil Penalties Inflation Adjustment Act of 1990, as amended:
------------------------------------------------------------------------
Date of violation or assessment Penalty
------------------------------------------------------------------------
Violation occurring before Sept. 29, 1999..................... $10,000
Violation occurring between Sept. 29, 1999 and Sept. 13, 2007. 11,000
Violation occurring between Sept. 14, 2007 and Nov. 2, 2015... 50,000
Violation occurring after Nov. 2, 2015 and penalty assessed on 50,000
or before Aug. 1, 2016.......................................
Violation occurring after Nov. 2, 2015 and penalty assessed 56,916
after Aug. 1, 2016...........................................
------------------------------------------------------------------------
* * * * *
0
4. Section 2634.702 is revised to read as follows:
Sec. 2634.702 Breaches by trust fiduciaries and interested parties.
(a) The Attorney General may bring a civil action in any
appropriate United States district court against any individual who
knowingly and willfully violates the provisions of Sec. 2634.408(d)(1)
or (e)(1). The court in which the action is brought may assess against
the individual a civil monetary penalty in any amount, not to exceed
the amounts set forth below, as provided by section 102(f)(6)(C)(i) of
the Act and as adjusted in accordance with the inflation adjustment
procedures prescribed in the Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended:
------------------------------------------------------------------------
Date of violation or assessment Penalty
------------------------------------------------------------------------
Violation occurring before Sept. 29, 1999..................... $10,000
Violation occurring between Sept. 29, 1999 and Nov. 2, 2015... 11,000
Violation occurring after Nov. 2, 2015 and penalty assessed on 11,000
or before Aug. 1, 2016.......................................
Violation occurring after Nov. 2, 2015 and penalty assessed 18,936
after Aug. 1, 2016...........................................
------------------------------------------------------------------------
(b) The Attorney General may bring a civil action in any
appropriate United States district court against any individual who
negligently violates the provisions of Sec. 2634.408(d)(1) or (e)(1).
The court in which the action is brought may assess against the
individual a civil monetary penalty in any amount, not to exceed the
amounts set forth below, as provided by section 102(f)(6)(C)(ii) of the
Act and as adjusted in accordance with the inflation adjustment
procedures of the Federal Civil Penalties Inflation Adjustment Act of
1990, as amended:
------------------------------------------------------------------------
Date of violation or assessment Penalty
------------------------------------------------------------------------
Violation occurring before Sept. 29, 1999..................... $5,000
Violation occurring between Sept. 29, 1999 and Nov. 2, 2015... 5,500
Violation occurring after Nov. 2, 2015 and penalty assessed on 5,500
or before Aug. 1, 2016.......................................
Violation occurring after Nov. 2, 2015 and penalty assessed 9,468
after Aug. 1, 2016...........................................
------------------------------------------------------------------------
0
5. Section 2634.703 is revised to read as follows:
Sec. 2634.703 Misuse of public reports.
(a) The Attorney General may bring a civil action against any
person who obtains or uses a report filed under this part for any
purpose prohibited by section 105(c)(1) of the Act, as incorporated in
Sec. 2634.603(f). The court in which the action is brought may assess
against the person a civil monetary penalty in any amount, not to
exceed the amounts set forth below, as provided by section 105(c)(2) of
the Act and as adjusted in accordance with the inflation adjustment
procedures prescribed in the Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended.
------------------------------------------------------------------------
Date of violation or assessment Penalty
------------------------------------------------------------------------
Violation occurring before Sept. 29, 1999..................... $10,000
Violation occurring between Sept. 29, 1999 and Nov. 2, 2015... 11,000
Violation occurring after Nov. 2, 2016 and penalty assessed on 11,000
or before Aug. 1, 2016.......................................
[[Page 41790]]
Violation occurring after Nov. 2, 2015 and penalty assessed 18,936
after Aug. 1, 2016...........................................
------------------------------------------------------------------------
(b) This remedy shall be in addition to any other remedy available
under statutory or common law.
PART 2636--LIMITATIONS ON OUTSIDE EARNED INCOME, EMPLOYMENT AND
AFFILIATIONS FOR CERTAIN NONCAREER EMPLOYEES
0
6. The authority citation for part 2636 is revised to read as follows:
Authority: 5 U.S.C. App. (Ethics in Government Act of 1978);
Pub. L. 101-410, 104 Stat. 890, 28 U.S.C. 2461 note (Federal Civil
Penalties Inflation Adjustment Act of 1990), as amended by Sec.
31001, Pub. L. 104-134, 110 Stat. 1321 (Debt Collection Improvement
Act of 1996) and Sec. 701, Pub. L. 114-74 (Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015); E.O. 12674, 54
FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55
FR 42547, 3 CFR, 1990 Comp., p. 306.
0
7. Section 2636.104 is amended by revising paragraph (a) to read as
follows:
Sec. 2636.104 Civil, disciplinary and other action.
(a) Civil action. Except when the employee engages in conduct in
good faith reliance upon an advisory opinion issued under Sec.
2636.103, an employee who engages in any conduct in violation of the
prohibitions, limitations and restrictions contained in this part may
be subject to civil action under 5 U.S.C. app. 504(a) and a civil
monetary penalty of not more than the amounts set forth below, as
adjusted in accordance with the inflation adjustment procedures
prescribed in the Federal Civil Penalties Inflation Adjustment Act of
1990, as amended, or the amount of the compensation the individual
received for the prohibited conduct, whichever is greater.
------------------------------------------------------------------------
Date of violation or assessment Penalty
------------------------------------------------------------------------
Violation occurring before Sept. 29, 1999..................... $10,000
Violation occurring between Sept. 29, 1999 and Nov. 2, 2015... 11,000
Violation occurring after Nov. 2, 2015 and penalty assessed on 11,000
or before Aug. 1, 2016.......................................
Violation occurring after Nov. 2, 2015 and penalty assessed 18,936
after Aug. 1, 2016...........................................
------------------------------------------------------------------------
* * * * *
[FR Doc. 2016-15193 Filed 6-27-16; 8:45 am]
BILLING CODE 6345-03-P