Rules of Practice and Procedure; Adjusting Civil Money Penalties for Inflation, 12583-12585 [05-5001]
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12583
Rules and Regulations
Federal Register
Vol. 70, No. 49
Tuesday, March 15, 2005
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.
impose under the Farm Credit Act of
1971, as amended (Farm Credit Act),
and under the National Flood Insurance
Reform Act of 1994 (Reform Act). The
Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by
the Debt Collection Improvement Act of
1996, requires all Federal agencies with
the authority to impose CMPs to
evaluate those CMPs periodically to
ensure that they continue to maintain
their deterrent value.
FEDERAL LABOR RELATIONS
AUTHORITY
EFFECTIVE DATE:
5 CFR Chapter XIV
FOR FURTHER INFORMATION CONTACT:
The regulation will
become effective on March 16, 2005.
New Addresses
Federal Labor Relations
Authority.
ACTION: Final rule; correction.
AGENCY:
SUMMARY: On March 9, 2005 (70 FR
11535), a final rule was published
announcing the relocation of the Boston
Regional Office of the Federal Labor
Relations Authority effective March 21,
2005. However, the moving date of the
Boston Regional Office has been delayed
and the relocation will be effective April
25, 2005.
DATES: Effective Date: March 9, 2005.
FOR FURTHER INFORMATION CONTACT:
Yvonne Thomas, Director,
Administrative Services Division,
Federal Labor Relations Authority, 1400
K Street, NW., Washington, DC 20424–
0001; (202) 218–7750.
Dated: March 10, 2005.
Yvonne Thomas,
Director, Administrative Services Division.
[FR Doc. 05–5053 Filed 3–10–05; 12:59 pm]
BILLING CODE 6727–01–P
FARM CREDIT ADMINISTRATION
12 CFR Part 622
Mark L. Johansen, Senior Policy Analyst,
Office of Policy and Analysis, Farm Credit
Administration, McLean, VA 22102–5090,
(703) 883–4498, TTY (703) 883–4434; or
Wendy R. Laguarda, Senior Counsel, or
Rebecca S. Orlich, Senior Attorney, Office
of General Counsel, Farm Credit
Administration, McLean, VA 22102–5090,
(703) 883–4020, TTY (703) 883–4020.
SUPPLEMENTARY INFORMATION:
I. Background
A. Federal Civil Penalties Inflation
Adjustment Act of 1990, as Amended
The Federal Civil Penalties Inflation
Adjustment Act of 1990 (FCPIA Act),1
as amended by the Debt Collection
Improvement Act of 1996 (DCIA),2
requires every Federal agency with
authority to issue CMPs 3 to enact
regulations that adjust its CMPs
pursuant to the inflation adjustment
formula in section 5(b) of the FCPIA
Act. Each Federal agency was required
to issue these regulations by October 23,
1996, and adjust when necessary at least
once every 4 years thereafter. Section 6
of the amended FCPIA Act specifies that
inflation-adjusted CMPs will apply only
to violations that occur after the
effective date of the adjustment. The
inflation adjustment is based on the
percentage increase in the Consumer
RIN 3052–AC28
Rules of Practice and Procedure;
Adjusting Civil Money Penalties for
Inflation
Farm Credit Administration.
ACTION: Final rule.
AGENCY:
SUMMARY: This regulation implements
cost-of-living adjustments to civil
money penalties (CMPs) that the Farm
Credit Administration (FCA) may
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1 Pub. L. 101–410, 104 Stat. 890 (October 5, 1990),
codified at 28 U.S.C. 2461 note.
2 Pub. L. 104–134, title III, section 31001(s), 110
Stat. 1321–373 (April 26, 1996), codified at 28
U.S.C. 2461 note.
3 Section 3(2) of the amended FCPIA Act defines
a CMP as any penalty, fine, or other sanction that:
(1) Either is for a specific monetary amount as
provided by Federal law or has a maximum amount
provided for by Federal law; (2) is assessed or
enforced by an agency pursuant to Federal law; and
(3) is assessed or enforced pursuant to an
administrative proceeding or a civil action in the
Federal courts.
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Price Index (CPI).4 Specifically, section
5(b) of the FCPIA Act defines the term
‘‘cost-of-living adjustment’’ as ‘‘the
percentage (if any) for each civil
monetary penalty by which (1) the
Consumer Price Index for the month of
June of the calendar year preceding the
adjustment, exceeds (2) the Consumer
Price Index for the month of June of the
calendar year in which the amount of
such civil monetary penalty was last set
or adjusted pursuant to law.’’
Furthermore, the increase for each CMP
that is adjusted for inflation must be
rounded using a method prescribed by
section 5(a) of the FCPIA Act. We made
our last adjustments to CMPs issued
under the Farm Credit Act in October
1996.5
B. CMPs Issued Under the Farm Credit
Act
The adjustment requirement affects
two provisions of section 5.32(a) of the
Farm Credit Act, which authorizes the
FCA to impose CMPs on Farm Credit
System (FCS or System) institutions and
their related parties. Section 5.32(a)
provides that any FCS institution or any
officer, director, employee, agent, or
other person participating in the
conduct of the affairs of an FCS
institution who violates the terms of a
final order issued under section 5.25 or
5.26 of the Farm Credit Act must pay up
to $1,000 per day for each day during
which such violation continues. Orders
issued under section 5.25 or 5.26 of the
Farm Credit Act include temporary and
permanent cease-and-desist orders. In
addition, section 5.32(h) provides for
the FCA to treat a directive issued under
sections 4.3(b)(2), 4.3A(e), or 4.14A(i) of
the Farm Credit Act as a final order
issued under section 5.25 for purposes
of assessing a CMP. Section 5.32(a) also
states that ‘‘[a]ny such institution or
person who violates any provision of
the [Farm Credit] Act or any regulation
issued under this Act shall forfeit and
pay a civil penalty of not more that $500
per day for each day during which such
violation continues.’’ The maximum
4 The CPI is published by the Department of
Labor, Bureau of Statistics, and is available at its
Web site: ftp://ftp.bls.gov/pub/special.requests/cpi/
cpiai.txt.
5 We made CMP adjustments in 2000 and
rescinded them in 2002 pursuant to instructions
from the General Accounting Office (now the
Government Accountability Office). See 65 FR
46087 (July 27, 2000) and 67 FR 68931 (Nov. 14,
2002).
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Federal Register / Vol. 70, No. 49 / Tuesday, March 15, 2005 / Rules and Regulations
amounts of these CMPs last increased in
1996, and the increases are set forth in
existing § 622.61.
1. Mathematical Calculation
The adjustment calculation will be
based on the percentage by which the
CPI for June 2004 exceeds the CPI for
June 1996. According to the Bureau of
Labor Statistics, the CPI for June 1996
was 156.7, and the CPI for June 2004
was 189.7, resulting in a percentage
change of 21.06 percent.
2. Penalty Amounts Remain the Same in
§ 622.61(a)(1)
The maximum CMP in § 622.61(a) for
a violation of a final order issued under
section 5.25 or 5.26 of the Farm Credit
Act is currently $1,100. Multiplying
$1,100 by 21.06 percent results in an
increase of $231.65. When that number
is rounded as required by the FCPIA
Act,6 the inflation-adjusted maximum
remains $1,100. Existing § 622.61(a) will
be revised and redesignated as
§ 622.61(a)(1).
3. New Penalty Amounts in
§ 622.61(a)(2)
The maximum CMP in existing
§ 622.61(b) for a violation of the Act or
regulations is $550. Multiplying $550 by
21.06 percent results in an increase of
$115.83. When that number is rounded
to $100 as required by the FCPIA Act,7
the inflation-adjusted maximum
increases to $650. Existing § 622.61(b)
will be revised and redesignated as
§ 622.61(a)(2).
C. CMPs Issued Under the Reform Act
The Flood Disaster Protection Act of
1973,8 as amended by the Reform Act,9
requires that FCA assess a CMP for a
pattern or practice of committing certain
specific actions in violation of the
National Flood Insurance Program.
Under the Reform Act, which became
law in 1994, these CMPs were not to
exceed $350 for each violation, and the
total amount of penalties assessed for
certain violations of the program against
any single regulated entity during any
6 ‘‘Any increase determined under this paragraph
shall be rounded to the nearest * * * (3) multiple
of $1,000 in the case of penalties greater than
$1,000 but less than or equal to $10,000.’’
Therefore, $231.65 is rounded to the nearest
multiple of $1,000, which is $0.
7 ‘‘Any increase determined under this paragraph
shall be rounded to the nearest * * * (3) multiple
of $100 in the case of penalties greater than $100
but less than or equal to $1,000.’’ Therefore,
$115.83 is rounded to the nearest multiple of $100,
or to $100.
8 42 U.S.C. 4012a.
9 103 Pub. L. 325, title V, 108 Stat. 2160, 2255–
87 (September 23, 1994).
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calendar year was not to exceed
$100,000.10
violations that occur after the effective
date of this rule.
1. Mathematical Calculation
Because this is our first adjustment of
the amounts for CMPs issued under the
Reform Act since the CMPs were set in
1994, the adjustment calculation will be
based on the percentage by which the
CPI for June 2004 exceeds the CPI for
June 1994. According to the Bureau of
Labor Statistics, the CPI for June 1994
was 148.0, and the CPI for June 2004
was 189.7, resulting in a percentage
change of 28.18. However, the amended
FCPIA Act limits the first adjustment of
a CMP to an amount not in excess of 10
percent of the original penalty.11
Therefore, any required adjustments are
limited to 10 percent.
III. Notice and Comment Not Required
by Administrative Procedure Act
2. New Penalty Amounts in § 622.61(b)
Multiplying $350 by 28.18 percent
yields a $98.63 increase, which would
be rounded to a $100 increase under the
usual formula. But the 10-percent limit
means that the CMP may increase by
only $35. Therefore, the new CMP
maximum for each violation will be
$385. Similarly, the $100,000 total cap
would have increased by a rounded
$30,000 under the usual formula, but
the 10-percent limit results in an
increase of only $10,000, bringing the
new cap to $110,000 in total penalties
that may be assessed under the Reform
Act against any single regulated entity
during any calendar year.
II. Other Changes to Part 622,
Subpart B
We have revised various sections in
part 622, subpart B on ‘‘Rules and
Procedures for Assessment and
Collection of Civil Money Penalties’’ to
clarify that the current CMP procedures
apply to CMPs assessed under the
Reform Act. We have provided that FCA
will forward payments for CMPs
assessed under the Reform Act to the
National Flood Mitigation Fund. We
have also made nonsubstantive changes
to conform the language of subpart B to
plain English principles.
In addition, we have deleted existing
§§ 622.53 and 622.54 as unnecessary
because they simply repeat provisions
of section 5.32(b) of the Farm Credit
Act. These deletions will have no
substantive effect on FCA procedures
for assessing and collecting CMPs.
As described above, these inflationadjusted CMPs will apply only to
U.S.C. 4012a(f).
11 Section 6 of the FCPIA Act, as amended by the
DCIA, provides: ‘‘The first adjustment of a civil
monetary penalty made pursuant to the amendment
made by paragraph (1) [amending the FCPIA Act]
may not exceed 10 percent of such penalty.’’
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The FCPIA Act gives Federal agencies
no discretion in the adjustment of CMPs
for the rate of inflation. Further, these
revisions are ministerial, technical, and
noncontroversial. For these reasons, the
FCA finds good cause to determine that
public notice and an opportunity to
comment are impracticable,
unnecessary, and contrary to the public
interest pursuant to the Administrative
Procedure Act, 5 U.S.C. 553(b)(B), and
adopts this rule in final form. For all of
the foregoing reasons, the FCA also
finds good cause to determine that this
regulation should become effective
immediately, pursuant to the
Administrative Procedure Act, 5 U.S.C.
553(d).
IV. Regulatory Flexibility Act
Pursuant to section 605(b) of the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.), the FCA hereby certifies that the
final rule will not have a significant
economic impact on a substantial
number of small entities. Each of the
banks in the System, considered
together with its affiliated associations,
has assets and annual income in excess
of the amounts that would qualify them
as small entities. Therefore, System
institutions are not ‘‘small entities’’ as
defined in the Regulatory Flexibility
Act.
List of Subjects in 12 CFR Part 622
Administrative practice and
procedure, Crime, Investigations,
Penalties.
I For the reasons stated in the preamble,
part 622 of chapter VI, title 12 of the
Code of Federal Regulations is amended
to read as follows:
PART 622—RULES OF PRACTICE AND
PROCEDURE
1. The authority citation for part 622 is
revised to read as follows:
I
Authority: Secs. 5.9, 5.10, 5.17, 5.25–5.37
of the Farm Credit Act (12 U.S.C. 2243, 2244,
2252, 2261–2273); 28 U.S.C. 2461 note; and
42 U.S.C. 4012a(f).
Subpart B—Rules and Procedures for
Assessment and Collection of Civil
Money Penalties
2. In § 622.52, revise paragraphs (a)
and (b) and add paragraph (c) to read as
follows:
I
§ 622.52
*
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Purpose and scope.
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*
Federal Register / Vol. 70, No. 49 / Tuesday, March 15, 2005 / Rules and Regulations
(a) For violations of the terms of a
final cease and desist order issued
under section 5.25 or 5.26 of the Act;
(b) For violations of any provision of
the Act or any regulation issued under
the Act; or
(c) For violations of the National
Flood Insurance Reform Act (Reform
Act) as set forth in 42 U.S.C. 4012a(f) or
any regulation issued under the Reform
Act.
§§ 622.53 and 622.54
Reserved]
[Removed and
3. Remove and reserve §§ 622.53 and
622.54.
I 4. Revise § 622.55(a) to read as follows:
I
§ 622.55 Notice of assessment of civil
money penalty.
(a) Notice of assessment. The notice of
assessment for a civil money penalty
will state:
(1) The legal authority for the
assessment;
(2) The amount of the civil money
penalty being assessed;
(3) The date by which the civil money
penalty must be paid;
(4) The matter of fact or law
constituting the grounds for assessment
of the civil money penalty;
(5) The right of the institution or
person being assessed to a formal
hearing to challenge the assessment;
(6) That failure to request a hearing
constitutes a waiver of the opportunity
for a hearing and the notice of
assessment will constitute a final and
unappealable order; and
(7) The time limit to request such a
formal hearing.
*
*
*
*
*
§§ 622.57(a), 622.58, and 622.59(b)
[Amended]
5. Amend §§ 622.57(a), 622.58, and
622.59(b) by removing the word ‘‘shall’’
and adding in its place, the word ‘‘will’’
each place it appears.
I 6. Revise §§ 622.60 and 622.61 to read
as follows:
I
§ 622.60
Payment of civil money penalty.
(a) Payment date. Generally, the date
designated in the notice of assessment
for payment of the civil money penalty
will be 60 days from the issuance of the
notice. If, however, the Board finds, in
a specific case, that the purposes of the
relevant statutes would be better served
if the 60-day period were changed, the
Board may shorten or lengthen the
period or make the civil money penalty
payable immediately upon receipt of the
notice of assessment. If a timely request
for a formal hearing to challenge an
assessment of a civil money penalty is
filed, payment of the penalty will not be
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Jkt 205001
required unless and until the Board
issues a final order of assessment
following the hearing. If an assessment
order is issued, it will specify the date
by which the civil money penalty is to
be paid or collected.
(b) Method of payment. Checks in
payment of civil money penalties must
be made payable to the ‘‘Farm Credit
Administration.’’ Upon collection, the
FCA will forward payment for penalties
described in § 622.52(a) and (b) to the
United States Department of Treasury.
The FCA will forward payment for
penalties described in § 622.52(c) to the
National Flood Mitigation Fund as
required by 42 U.S.C. 4012a(f)(8).
§ 622.61 Adjustment of civil money
penalties by the rate of inflation under the
Federal Civil Penalties Inflation Adjustment
Act of 1990, as amended.
(a) The maximum amount of each
civil money penalty within FCA’s
jurisdiction is adjusted in accordance
with the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended (28 U.S.C. 2461 note), as
follows:
(1) Amount of civil money penalty
imposed under section 5.32 of the Act
for violation of a final order issued
under section 5.25 or 5.26 of the Act:
The maximum daily amount is $1,100.
(2) Amount of civil money penalty for
violation of the Act or regulations: The
maximum daily amount is $550 for each
violation that occurs before March 16,
2005, and $650 for each violation that
occurs on or after such date.
(b) The maximum civil money penalty
amount assessed under 42 U.S.C.
4012a(f) is $350 for each violation that
occurs before March 16, 2005, with total
penalties under such statute not to
exceed $100,000 for any single
institution during any calendar year. For
violations that occur on or after March
16, 2005, the maximum civil money
penalty is $385 for each violation, with
total penalties under such statute not to
exceed $110,000 for any single
institution during any calendar year.
Dated: March 9, 2005.
Jeanette C. Brinkley,
Secretary, Farm Credit Administration Board.
[FR Doc. 05–5001 Filed 3–14–05; 8:45 am]
BILLING CODE 6705–01–P
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12585
PENSION BENEFIT GUARANTY
CORPORATION
29 CFR Parts 4022 and 4044
Benefits Payable in Terminated SingleEmployer Plans; Allocation of Assets
in Single-Employer Plans; Interest
Assumptions for Valuing and Paying
Benefits
Pension Benefit Guaranty
Corporation.
ACTION: Final rule.
AGENCY:
SUMMARY: The Pension Benefit Guaranty
Corporation’s regulations on Benefits
Payable in Terminated Single-Employer
Plans and Allocation of Assets in
Single-Employer Plans prescribe interest
assumptions for valuing and paying
benefits under terminating singleemployer plans. This final rule amends
the regulations to adopt interest
assumptions for plans with valuation
dates in April 2005. Interest
assumptions are also published on the
PBGC’s Web site (https://www.pbgc.gov).
DATES: Effective Date: April 1, 2005.
FOR FURTHER INFORMATION CONTACT:
Catherine B. Klion, Attorney, Legislative
and Regulatory Department, Pension
Benefit Guaranty Corporation, 1200 K
Street, NW., Washington, DC 20005,
(202) 326–4024. (TTY/TDD users may
call the Federal relay service toll-free at
1–800–877–8339 and ask to be
connected to (202) 326–4024.)
SUPPLEMENTARY INFORMATION: The
PBGC’s regulations prescribe actuarial
assumptions—including interest
assumptions—for valuing and paying
plan benefits of terminating singleemployer plans covered by title IV of
the Employee Retirement Income
Security Act of 1974. The interest
assumptions are intended to reflect
current conditions in the financial and
annuity markets.
Three sets of interest assumptions are
prescribed: (1) A set for the valuation of
benefits for allocation purposes under
section 4044 (found in Appendix B to
part 4044), (2) a set for the PBGC to use
to determine whether a benefit is
payable as a lump sum and to determine
lump-sum amounts to be paid by the
PBGC (found in Appendix B to part
4022), and (3) a set for private-sector
pension practitioners to refer to if they
wish to use lump-sum interest rates
determined using the PBGC’s historical
methodology (found in Appendix C to
part 4022).
Accordingly, this amendment (1) adds
to Appendix B to part 4044 the interest
assumptions for valuing benefits for
allocation purposes in plans with
valuation dates during April 2005, (2)
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]]>Agencies
[Federal Register Volume 70, Number 49 (Tuesday, March 15, 2005)]
[Rules and Regulations]
[Pages 12583-12585]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-5001]
=======================================================================
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FARM CREDIT ADMINISTRATION
12 CFR Part 622
RIN 3052-AC28
Rules of Practice and Procedure; Adjusting Civil Money Penalties
for Inflation
AGENCY: Farm Credit Administration.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This regulation implements cost-of-living adjustments to civil
money penalties (CMPs) that the Farm Credit Administration (FCA) may
impose under the Farm Credit Act of 1971, as amended (Farm Credit Act),
and under the National Flood Insurance Reform Act of 1994 (Reform Act).
The Federal Civil Penalties Inflation Adjustment Act of 1990, as
amended by the Debt Collection Improvement Act of 1996, requires all
Federal agencies with the authority to impose CMPs to evaluate those
CMPs periodically to ensure that they continue to maintain their
deterrent value.
EFFECTIVE DATE: The regulation will become effective on March 16, 2005.
FOR FURTHER INFORMATION CONTACT:
Mark L. Johansen, Senior Policy Analyst, Office of Policy and
Analysis, Farm Credit Administration, McLean, VA 22102-5090, (703)
883-4498, TTY (703) 883-4434; or
Wendy R. Laguarda, Senior Counsel, or Rebecca S. Orlich, Senior
Attorney, Office of General Counsel, Farm Credit Administration,
McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-4020.
SUPPLEMENTARY INFORMATION:
I. Background
A. Federal Civil Penalties Inflation Adjustment Act of 1990, as Amended
The Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIA
Act),\1\ as amended by the Debt Collection Improvement Act of 1996
(DCIA),\2\ requires every Federal agency with authority to issue CMPs
\3\ to enact regulations that adjust its CMPs pursuant to the inflation
adjustment formula in section 5(b) of the FCPIA Act. Each Federal
agency was required to issue these regulations by October 23, 1996, and
adjust when necessary at least once every 4 years thereafter. Section 6
of the amended FCPIA Act specifies that inflation-adjusted CMPs will
apply only to violations that occur after the effective date of the
adjustment. The inflation adjustment is based on the percentage
increase in the Consumer Price Index (CPI).\4\ Specifically, section
5(b) of the FCPIA Act defines the term ``cost-of-living adjustment'' as
``the percentage (if any) for each civil monetary penalty by which (1)
the Consumer Price Index for the month of June of the calendar year
preceding the adjustment, exceeds (2) the Consumer Price Index for the
month of June of the calendar year in which the amount of such civil
monetary penalty was last set or adjusted pursuant to law.''
Furthermore, the increase for each CMP that is adjusted for inflation
must be rounded using a method prescribed by section 5(a) of the FCPIA
Act. We made our last adjustments to CMPs issued under the Farm Credit
Act in October 1996.\5\
---------------------------------------------------------------------------
\1\ Pub. L. 101-410, 104 Stat. 890 (October 5, 1990), codified
at 28 U.S.C. 2461 note.
\2\ Pub. L. 104-134, title III, section 31001(s), 110 Stat.
1321-373 (April 26, 1996), codified at 28 U.S.C. 2461 note.
\3\ Section 3(2) of the amended FCPIA Act defines a CMP as any
penalty, fine, or other sanction that: (1) Either is for a specific
monetary amount as provided by Federal law or has a maximum amount
provided for by Federal law; (2) is assessed or enforced by an
agency pursuant to Federal law; and (3) is assessed or enforced
pursuant to an administrative proceeding or a civil action in the
Federal courts.
\4\ The CPI is published by the Department of Labor, Bureau of
Statistics, and is available at its Web site: ftp://ftp.bls.gov/pub/
special.requests/cpi/cpiai.txt.
\5\ We made CMP adjustments in 2000 and rescinded them in 2002
pursuant to instructions from the General Accounting Office (now the
Government Accountability Office). See 65 FR 46087 (July 27, 2000)
and 67 FR 68931 (Nov. 14, 2002).
---------------------------------------------------------------------------
B. CMPs Issued Under the Farm Credit Act
The adjustment requirement affects two provisions of section
5.32(a) of the Farm Credit Act, which authorizes the FCA to impose CMPs
on Farm Credit System (FCS or System) institutions and their related
parties. Section 5.32(a) provides that any FCS institution or any
officer, director, employee, agent, or other person participating in
the conduct of the affairs of an FCS institution who violates the terms
of a final order issued under section 5.25 or 5.26 of the Farm Credit
Act must pay up to $1,000 per day for each day during which such
violation continues. Orders issued under section 5.25 or 5.26 of the
Farm Credit Act include temporary and permanent cease-and-desist
orders. In addition, section 5.32(h) provides for the FCA to treat a
directive issued under sections 4.3(b)(2), 4.3A(e), or 4.14A(i) of the
Farm Credit Act as a final order issued under section 5.25 for purposes
of assessing a CMP. Section 5.32(a) also states that ``[a]ny such
institution or person who violates any provision of the [Farm Credit]
Act or any regulation issued under this Act shall forfeit and pay a
civil penalty of not more that $500 per day for each day during which
such violation continues.'' The maximum
[[Page 12584]]
amounts of these CMPs last increased in 1996, and the increases are set
forth in existing Sec. 622.61.
1. Mathematical Calculation
The adjustment calculation will be based on the percentage by which
the CPI for June 2004 exceeds the CPI for June 1996. According to the
Bureau of Labor Statistics, the CPI for June 1996 was 156.7, and the
CPI for June 2004 was 189.7, resulting in a percentage change of 21.06
percent.
2. Penalty Amounts Remain the Same in Sec. 622.61(a)(1)
The maximum CMP in Sec. 622.61(a) for a violation of a final order
issued under section 5.25 or 5.26 of the Farm Credit Act is currently
$1,100. Multiplying $1,100 by 21.06 percent results in an increase of
$231.65. When that number is rounded as required by the FCPIA Act,\6\
the inflation-adjusted maximum remains $1,100. Existing Sec. 622.61(a)
will be revised and redesignated as Sec. 622.61(a)(1).
---------------------------------------------------------------------------
\6\ ``Any increase determined under this paragraph shall be
rounded to the nearest * * * (3) multiple of $1,000 in the case of
penalties greater than $1,000 but less than or equal to $10,000.''
Therefore, $231.65 is rounded to the nearest multiple of $1,000,
which is $0.
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3. New Penalty Amounts in Sec. 622.61(a)(2)
The maximum CMP in existing Sec. 622.61(b) for a violation of the
Act or regulations is $550. Multiplying $550 by 21.06 percent results
in an increase of $115.83. When that number is rounded to $100 as
required by the FCPIA Act,\7\ the inflation-adjusted maximum increases
to $650. Existing Sec. 622.61(b) will be revised and redesignated as
Sec. 622.61(a)(2).
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\7\ ``Any increase determined under this paragraph shall be
rounded to the nearest * * * (3) multiple of $100 in the case of
penalties greater than $100 but less than or equal to $1,000.''
Therefore, $115.83 is rounded to the nearest multiple of $100, or to
$100.
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C. CMPs Issued Under the Reform Act
The Flood Disaster Protection Act of 1973,\8\ as amended by the
Reform Act,\9\ requires that FCA assess a CMP for a pattern or practice
of committing certain specific actions in violation of the National
Flood Insurance Program. Under the Reform Act, which became law in
1994, these CMPs were not to exceed $350 for each violation, and the
total amount of penalties assessed for certain violations of the
program against any single regulated entity during any calendar year
was not to exceed $100,000.\10\
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\8\ 42 U.S.C. 4012a.
\9\ 103 Pub. L. 325, title V, 108 Stat. 2160, 2255-87 (September
23, 1994).
\10\ 42 U.S.C. 4012a(f).
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1. Mathematical Calculation
Because this is our first adjustment of the amounts for CMPs issued
under the Reform Act since the CMPs were set in 1994, the adjustment
calculation will be based on the percentage by which the CPI for June
2004 exceeds the CPI for June 1994. According to the Bureau of Labor
Statistics, the CPI for June 1994 was 148.0, and the CPI for June 2004
was 189.7, resulting in a percentage change of 28.18. However, the
amended FCPIA Act limits the first adjustment of a CMP to an amount not
in excess of 10 percent of the original penalty.\11\ Therefore, any
required adjustments are limited to 10 percent.
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\11\ Section 6 of the FCPIA Act, as amended by the DCIA,
provides: ``The first adjustment of a civil monetary penalty made
pursuant to the amendment made by paragraph (1) [amending the FCPIA
Act] may not exceed 10 percent of such penalty.''
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2. New Penalty Amounts in Sec. 622.61(b)
Multiplying $350 by 28.18 percent yields a $98.63 increase, which
would be rounded to a $100 increase under the usual formula. But the
10-percent limit means that the CMP may increase by only $35.
Therefore, the new CMP maximum for each violation will be $385.
Similarly, the $100,000 total cap would have increased by a rounded
$30,000 under the usual formula, but the 10-percent limit results in an
increase of only $10,000, bringing the new cap to $110,000 in total
penalties that may be assessed under the Reform Act against any single
regulated entity during any calendar year.
II. Other Changes to Part 622, Subpart B
We have revised various sections in part 622, subpart B on ``Rules
and Procedures for Assessment and Collection of Civil Money Penalties''
to clarify that the current CMP procedures apply to CMPs assessed under
the Reform Act. We have provided that FCA will forward payments for
CMPs assessed under the Reform Act to the National Flood Mitigation
Fund. We have also made nonsubstantive changes to conform the language
of subpart B to plain English principles.
In addition, we have deleted existing Sec. Sec. 622.53 and 622.54
as unnecessary because they simply repeat provisions of section 5.32(b)
of the Farm Credit Act. These deletions will have no substantive effect
on FCA procedures for assessing and collecting CMPs.
As described above, these inflation-adjusted CMPs will apply only
to violations that occur after the effective date of this rule.
III. Notice and Comment Not Required by Administrative Procedure Act
The FCPIA Act gives Federal agencies no discretion in the
adjustment of CMPs for the rate of inflation. Further, these revisions
are ministerial, technical, and noncontroversial. For these reasons,
the FCA finds good cause to determine that public notice and an
opportunity to comment are impracticable, unnecessary, and contrary to
the public interest pursuant to the Administrative Procedure Act, 5
U.S.C. 553(b)(B), and adopts this rule in final form. For all of the
foregoing reasons, the FCA also finds good cause to determine that this
regulation should become effective immediately, pursuant to the
Administrative Procedure Act, 5 U.S.C. 553(d).
IV. Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.), the FCA hereby certifies that the final rule will
not have a significant economic impact on a substantial number of small
entities. Each of the banks in the System, considered together with its
affiliated associations, has assets and annual income in excess of the
amounts that would qualify them as small entities. Therefore, System
institutions are not ``small entities'' as defined in the Regulatory
Flexibility Act.
List of Subjects in 12 CFR Part 622
Administrative practice and procedure, Crime, Investigations,
Penalties.
0
For the reasons stated in the preamble, part 622 of chapter VI, title
12 of the Code of Federal Regulations is amended to read as follows:
PART 622--RULES OF PRACTICE AND PROCEDURE
0
1. The authority citation for part 622 is revised to read as follows:
Authority: Secs. 5.9, 5.10, 5.17, 5.25-5.37 of the Farm Credit
Act (12 U.S.C. 2243, 2244, 2252, 2261-2273); 28 U.S.C. 2461 note;
and 42 U.S.C. 4012a(f).
Subpart B--Rules and Procedures for Assessment and Collection of
Civil Money Penalties
0
2. In Sec. 622.52, revise paragraphs (a) and (b) and add paragraph (c)
to read as follows:
Sec. 622.52 Purpose and scope.
* * * * *
[[Page 12585]]
(a) For violations of the terms of a final cease and desist order
issued under section 5.25 or 5.26 of the Act;
(b) For violations of any provision of the Act or any regulation
issued under the Act; or
(c) For violations of the National Flood Insurance Reform Act
(Reform Act) as set forth in 42 U.S.C. 4012a(f) or any regulation
issued under the Reform Act.
Sec. Sec. 622.53 and 622.54 [Removed and Reserved]
0
3. Remove and reserve Sec. Sec. 622.53 and 622.54.
0
4. Revise Sec. 622.55(a) to read as follows:
Sec. 622.55 Notice of assessment of civil money penalty.
(a) Notice of assessment. The notice of assessment for a civil
money penalty will state:
(1) The legal authority for the assessment;
(2) The amount of the civil money penalty being assessed;
(3) The date by which the civil money penalty must be paid;
(4) The matter of fact or law constituting the grounds for
assessment of the civil money penalty;
(5) The right of the institution or person being assessed to a
formal hearing to challenge the assessment;
(6) That failure to request a hearing constitutes a waiver of the
opportunity for a hearing and the notice of assessment will constitute
a final and unappealable order; and
(7) The time limit to request such a formal hearing.
* * * * *
Sec. Sec. 622.57(a), 622.58, and 622.59(b) [Amended]
0
5. Amend Sec. Sec. 622.57(a), 622.58, and 622.59(b) by removing the
word ``shall'' and adding in its place, the word ``will'' each place it
appears.
0
6. Revise Sec. Sec. 622.60 and 622.61 to read as follows:
Sec. 622.60 Payment of civil money penalty.
(a) Payment date. Generally, the date designated in the notice of
assessment for payment of the civil money penalty will be 60 days from
the issuance of the notice. If, however, the Board finds, in a specific
case, that the purposes of the relevant statutes would be better served
if the 60-day period were changed, the Board may shorten or lengthen
the period or make the civil money penalty payable immediately upon
receipt of the notice of assessment. If a timely request for a formal
hearing to challenge an assessment of a civil money penalty is filed,
payment of the penalty will not be required unless and until the Board
issues a final order of assessment following the hearing. If an
assessment order is issued, it will specify the date by which the civil
money penalty is to be paid or collected.
(b) Method of payment. Checks in payment of civil money penalties
must be made payable to the ``Farm Credit Administration.'' Upon
collection, the FCA will forward payment for penalties described in
Sec. 622.52(a) and (b) to the United States Department of Treasury.
The FCA will forward payment for penalties described in Sec. 622.52(c)
to the National Flood Mitigation Fund as required by 42 U.S.C.
4012a(f)(8).
Sec. 622.61 Adjustment of civil money penalties by the rate of
inflation under the Federal Civil Penalties Inflation Adjustment Act of
1990, as amended.
(a) The maximum amount of each civil money penalty within FCA's
jurisdiction is adjusted in accordance with the Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended (28 U.S.C. 2461 note), as
follows:
(1) Amount of civil money penalty imposed under section 5.32 of the
Act for violation of a final order issued under section 5.25 or 5.26 of
the Act: The maximum daily amount is $1,100.
(2) Amount of civil money penalty for violation of the Act or
regulations: The maximum daily amount is $550 for each violation that
occurs before March 16, 2005, and $650 for each violation that occurs
on or after such date.
(b) The maximum civil money penalty amount assessed under 42 U.S.C.
4012a(f) is $350 for each violation that occurs before March 16, 2005,
with total penalties under such statute not to exceed $100,000 for any
single institution during any calendar year. For violations that occur
on or after March 16, 2005, the maximum civil money penalty is $385 for
each violation, with total penalties under such statute not to exceed
$110,000 for any single institution during any calendar year.
Dated: March 9, 2005.
Jeanette C. Brinkley,
Secretary, Farm Credit Administration Board.
[FR Doc. 05-5001 Filed 3-14-05; 8:45 am]
BILLING CODE 6705-01-P
