Adjustment of Civil Monetary Penalties for Inflation, 60047-60050 [2012-24248]
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Federal Register / Vol. 77, No. 191 / Tuesday, October 2, 2012 / Rules and Regulations
DEPARTMENT OF EDUCATION
34 CFR Part 36
RIN 1801–AA12
Adjustment of Civil Monetary Penalties
for Inflation
Department of Education.
Final regulations.
AGENCY:
ACTION:
The Department of Education
(Department) issues these final
regulations to adjust the Department’s
civil monetary penalties (CMPs) for
inflation, as required by the Federal
Civil Penalties Inflation Adjustment Act
of 1990.
DATES: These regulations are effective
October 2, 2012.
FOR FURTHER INFORMATION CONTACT:
Peter Wathen-Dunn, Office of the
General Counsel, U.S. Department of
Education, 400 Maryland Avenue SW.,
Room 6E207, Washington, DC 20202–
2241. Telephone: (202) 401–8300.
If you use a telecommunications
device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay
Service (FRS), toll free, at 1–800–877–
8339.
Individuals with disabilities can
obtain this document in an accessible
format (e.g., Braille, large print,
audiotape, or compact disc) on request
to the contact person listed under FOR
FURTHER INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION:
SUMMARY:
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Background
The Federal Civil Penalties Inflation
Adjustment Act of 1990 (Inflation
Adjustment Act) (28 U.S.C. 2461 note)
provides for the regular evaluation of
civil monetary penalties (CMPs) to
ensure that they continue to maintain
their deterrent value. The Inflation
Adjustment Act requires that each
agency issue regulations to adjust its
CMPs beginning in 1996 and at least
every four years thereafter. The
Department published its most recent
cost adjustment to each CMP in the
Federal Register on January 4, 2005 (70
FR 297), and those adjustments became
effective on the date of publication. The
Department previously adjusted its
CMPs in 2002. It has been more than
four years since the last adjustment.
Accordingly, the Department is now
making the necessary adjustments.
A CMP is defined in the statute as any
penalty, fine, or other sanction that is
(1) for a specific monetary amount as
provided by Federal law, or has a
maximum amount provided for by
Federal law; (2) assessed or enforced by
an agency pursuant to Federal law; and
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(3) assessed or enforced pursuant to an
administrative proceeding or a civil
action in the Federal courts.
The formula for the amount of a CMP
inflation adjustment is prescribed by
law and is not subject to the exercise of
discretion by the Secretary of Education
(Secretary). The adjustment reflects the
percentage increase in the Consumer
Price Index for all urban consumers
(CPI–U) published by the Department of
Labor from June of the calendar year in
which the amount was last adjusted, to
June of the calendar year preceding the
adjustment. The Inflation Adjustment
Act also requires agencies to round the
inflation adjustment based on the
amount of the penalty when last
adjusted.
• For penalties greater than $100 but
less than or equal to $1,000, the
adjusted amount must be rounded to the
nearest $100.
• For penalties greater than $1,000
but less than or equal to $10,000, the
adjusted amount must be rounded to the
nearest $1,000.
• For penalties greater than $10,000
but less than or equal to $100,000, the
adjusted amount must be rounded to the
nearest $5,000.
• For penalties greater than $100,000
but less than or equal to $200,000, the
adjusted amount must be rounded to the
nearest $10,000.
• For penalties greater than $200,000,
the adjusted amount must be rounded to
the nearest $25,000.
The Department’s Civil Monetary
Penalties
The following analysis calculates new
civil monetary penalties for penalty
statutes in the order in which they
appear in 34 CFR 36.2. The Inflation
Adjustment Act provides that
adjustments to an agency’s CMPs apply
only to violations that occur after the
effective date of the adjustments. These
regulations become effective upon
publication in the Federal Register.
Therefore, the adjustments made by this
amendment to the Department’s CMPs
apply only to violations that occur after
the date these regulations are published
in the Federal Register.
Statute: 20 U.S.C. 1015(c)(5).
Current Regulations: The CMP for 20
U.S.C. 1015(c)(5) [Section 131(c)(5) of
the Higher Education Act of 1965, as
amended (HEA)], as last adjusted in
2005, is a fine of up to $27,500 for
failure by an IHE to provide information
on the cost of higher education to the
Commissioner of Education Statistics.
New Regulations: The new penalty for
this section is $30,000.
Reason: This CMP was last adjusted
in 2005. Therefore, the inflation
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60047
adjustment is the percentage change in
the CPI–U from June 2005 (194.5)
through June 2011 (225.722), or 16%.
The new penalty is calculated as
follows: $27,500 × 16% = $4,400, which
increases the penalty, when rounded to
the nearest $5,000, to $30,000.
Statute: 20 U.S.C. 1027(f)(3)(now 20
U.S.C. 1022d(a)(3)).
Current Regulations: The CMP for 20
U.S.C. 1027(f)(3) [Section 207(f)(3) of
the HEA], as last adjusted in 2005,
provides for a fine of up to $27,500 for
failure by an IHE to provide information
to the State and the public regarding its
teacher-preparation programs.
New Regulations: The new penalty for
this section is $30,000.
Reason: In 2008, Congress amended
the HEA, redesignating this CMP as
section 205(a)(3) of the HEA (20 U.S.C.
1022d(a)(3)) and setting the fine at
$27,500. Because Congress reauthorized
this penalty in 2008, the inflation
adjustment for 20 U.S.C. 1022d(a)(3) is
the percentage change in the CPI–U
from June 2008 (218.815) through June
2011 (225.722), or 3.2%. The new
penalty is calculated as follows: $27,500
× 3.2% = $880, which increases the
penalty, when rounded to the nearest
$5,000, to $30,000.
Statute: 20 U.S.C. 1082(g).
Current Regulations: The CMP for 20
U.S.C. 1082(g) [Section 432(g) of the
HEA], as last adjusted in 2002, provides
for a fine of up to $27,500 for violations
by lenders and guaranty agencies of
Title IV of the HEA, which authorizes
the Federal Family Education Loan
Program.
New Regulation: The new penalty for
this section is $35,000.
Reason: This CMP was last adjusted
in 2002. Therefore, the inflation
adjustment is the percentage change in
the CPI–U from June 2002 (179.9)
through June 2011 (225.722), or 25.5%.
The new penalty is calculated as
follows: $27,500 × 25.5% = $7,012.5,
which increases the penalty, when
rounded to the nearest $5,000, to
$35,000.
Statute: 20 U.S.C. 1094(c)(3)(B).
Current Regulations: The CMP for 20
U.S.C. 1094(c)(3)(B) [Section
487(c)(3)(B) of the HEA], as last adjusted
in 2002, provides for a fine of up to
$27,500 for an IHE’s violation of Title IV
of the HEA or its implementing
regulations. Title IV authorizes various
programs of student financial assistance.
New Regulations: The new penalty for
this section is $35,000.
Reason: This CMP was last adjusted
in 2002. Therefore, the inflation
adjustment is the percentage change in
the CPI–U from June 2002 (179.9)
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Federal Register / Vol. 77, No. 191 / Tuesday, October 2, 2012 / Rules and Regulations
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through June 2011 (225.722), or 25.5%.
The new penalty is calculated as
follows: $27,500 × 25.5% = $7,012.5,
which increases the penalty, when
rounded to the nearest $5,000, to
$35,000.
Statute: 20 U.S.C. 1228c(c)(2)(E).
Current Regulations: None.
New Regulations: The new penalty for
this section is $1,100.
Reason: The CMP for 20 U.S.C.
1228c(c)(2)(E) [Section 429 of the
General Education Provisions Act] was
established in 1994 and has not been
adjusted. It provides a penalty of up to
$1,000 for an educational organization’s
failure to disclose certain information to
minor students and their parents.
The Inflation Adjustment Act was
passed in 1990 and required agencies to
first adjust their CMPs in 1996.
Although the percentage change in the
CPI–U from June 1994 through June
2011 is greater than 10%, the 1996
statute that amended the Inflation
Adjustment Act also limited the first
adjustment of a CMP to no more than 10
percent of the original penalty. Because
the Department has never adjusted the
CMP for 20 U.S.C. 1228c(c)(2)(E), the
Department is limited to a maximum
inflation adjustment of 10%, rounded to
the nearest $100. The new penalty is
calculated as follows: $1,000 × 10%,
which increases the penalty, when
rounded to the nearest $100, to $1,100.
Statute: 31 U.S.C. 1352(c)(1) and
(c)(2)(A).
Current Regulations: The CMPs for 31
U.S.C. 1352(c)(1) and (c)(2)(A), as last
adjusted in 2002, provide for a fine of
$11,000 to $110,000 for recipients of
Government grants, contracts, etc. that
improperly lobby Congress or the
Executive Branch with respect to the
award of Government grants and
contracts.
New Regulations: The new penalties
for these sections are $15,000 to
$140,000.
Reason: These CMPs were last
adjusted in 2002. Therefore, the
inflation adjustment is the percentage
change in the CPI–U from June 2002
(179.9) through June 2011 (225.722), or
25.5%. The new penalties are calculated
as follows: For the minimum fine of
$11,000, $11,000 × 25.5% = $2,805,
which increases the minimum penalty,
when rounded to the nearest $5,000, to
$15,000. For the maximum penalty of
$110,000, $110,000 × 25.5% = $28,050,
which increases the maximum penalty,
when rounded to the nearest $10,000, of
$140,000.
Statute: 31 U.S.C. 3802(a)(1) and
(a)(2).
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Current Regulations: The CMPs for 31
U.S.C. 3802(a)(1) and (a)(2), as last
adjusted in 2002, provide for a fine of
up to $5,500 for false claims and
statements made to the Government.
New Regulations: The new penalty for
this section is $7,000.
Reason: This CMP was last adjusted
in 2002. Therefore, the inflation
adjustment is the percentage change in
the CPI–U from June 2002 (179.9)
through June 2011 (225.722), or 25.5%.
The new penalty is calculated as
follows: $5,500 × 25.5% = $1,402,
which increases the penalty, when
rounded to the nearest $1,000, to
$7,000.
Executive Orders 12866 and 13563
Regulatory Impact Analysis
Under Executive Order 12866, the
Secretary must determine whether this
regulatory action is ‘‘significant’’ and,
therefore, subject to the requirements of
the Executive order and subject to
review by the Office of Management and
Budget (OMB). Section 3(f) of Executive
Order 12866 defines a significant
regulatory action as an action likely to
result in a rule that may—
(1) Have an annual effect on the
economy of $100 million or more, or
adversely affect a sector of the economy;
productivity; competition; jobs; the
environment; public health or safety; or
State, local, or tribal governments or
communities in a material way (also
referred to as ‘‘economically significant’’
regulations);
(2) Create serious inconsistency or
otherwise interfere with an action taken
or planned by another agency;
(3) Materially alter the budgetary
impacts of entitlement grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or
(4) Raise novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
stated in the Executive order.
Based on the number and amount of
penalties imposed under the CMPs
amended in this final regulation, we
have determined that this final
regulatory action will have none of the
economic impacts described under the
Executive order. These final regulations
are required by statute, are not at the
Secretary’s discretion, and, accordingly,
do not have any of the policy impacts
described under the Executive order.
Because this final regulatory action is
not a significant regulatory action, it is
not subject to review by OMB under
section 3(f) of Executive Order 12866.
We have also reviewed these
regulations under Executive Order
13563, which supplements and
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explicitly reaffirms the principles,
structures, and definitions governing
regulatory review established in
Executive Order 12866. To the extent
permitted by law, Executive Order
13563 requires that an agency—
(1) Propose or adopt regulations only
upon a reasoned determination that
their benefits justify their costs
(recognizing that some benefits and
costs are difficult to quantify);
(2) Tailor its regulations to impose the
least burden on society, consistent with
obtaining regulatory objectives and
taking into account, among other things,
and to the extent practicable, the costs
of cumulative regulations;
(3) In choosing among alternative
regulatory approaches, select those
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety,
and other advantages; distributive
impacts; and equity);
(4) To the extent feasible, specify
performance objectives, rather than the
behavior or manner of compliance a
regulated entity must adopt; and
(5) Identify and assess available
alternatives to direct regulation,
including economic incentives—such as
user fees or marketable permits—to
encourage the desired behavior, or
providing information that enables the
public to make choices.
Executive Order 13563 also requires
an agency ‘‘to use the best available
techniques to quantify anticipated
present and future benefits and costs as
accurately as possible.’’ The Office of
Information and Regulatory Affairs of
OMB has emphasized that these
techniques may include ‘‘identifying
changing future compliance costs that
might result from technological
innovation or anticipated behavioral
changes.’’
We are issuing these final regulations
as required by statute. The Secretary has
no discretion to consider alternative
approaches as delineated in the
Executive order. Based on this analysis
and the reasons stated in the preamble,
the Department believes that these final
regulations are consistent with the
principles in Executive Order 13563.
Waiver of Rulemaking and Delayed
Effective Date
Under the Administrative Procedure
Act (APA) (5 U.S.C. 553), the
Department generally offers interested
parties the opportunity to comment on
proposed regulations. However, the
APA provides that an agency is not
required to conduct notice- andcomment rulemaking when the agency,
for good cause, finds that notice and
public comment thereon are
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Federal Register / Vol. 77, No. 191 / Tuesday, October 2, 2012 / Rules and Regulations
impracticable, unnecessary, or contrary
to the public interest (5 U.S.C.
553(b)(B)). There is good cause to waive
rulemaking here as unnecessary.
Rulemaking is ‘‘unnecessary’’ when
the agency is issuing a minor rule in
which the public is not particularly
interested. It applies in those situations
in which ‘‘the administrative rule is a
routine determination, insignificant in
nature and impact, and inconsequential
to the industry and to the public.’’
Utility Solid Waste Activities Group v.
EPA, 236 F.3d 749, 755 (D.C. Cir. 2001),
quoting U.S. Department of Justice,
Attorney General’s Manual on the
Administrative Procedure Act 31 (1947)
and South Carolina v. Block, 558 F.
Supp. 1004, 1016 (D.S.C. 1983).
These regulations merely implement
the statutory mandate to adjust CMPs
for inflation. The regulations reflect
administrative computations performed
by the Department as prescribed by the
statute and do not establish or affect
substantive policy. The Secretary has no
discretion in determining the new
penalties.
The APA also generally requires that
regulations be published at least 30 days
before their effective date, unless the
agency has good cause to implement its
regulations sooner (5 U.S.C. 553(d)(3)).
Again, because these final regulations
merely implement non-discretionary
administrative computations, there is
good cause to make them effective on
the day they are published.
Regulatory Flexibility Act Certification
The Secretary certifies that these
regulations will not have a significant
economic impact on a substantial
number of small entities. The formula
for the amount of the inflation
adjustments is prescribed by statute and
is not subject to the Secretary’s
discretion. These CMPs are infrequently
imposed by the Secretary, and the
regulations do not involve any special
considerations that might affect the
imposition of CMPs on small entities.
Paperwork Reduction Act of 1995
These regulations do not contain any
information collection requirements.
Intergovernmental Review
This program is not subject to
Executive Order 12372 and the
regulations in 34 CFR part 79.
Assessment of Educational Impact
Based on our own review, we have
determined that these final regulations
do not require transmission of
information that any other agency or
authority of the United States gathers or
makes available.
Electronic Access to This Document:
The official version of this document is
the document published in the Federal
Register. Free Internet access to the
official edition of the Federal Register
and the Code of Federal Regulations is
available via the Federal Digital System
at: www.gpo.gov/fdsys. At this site you
can view this document, as well as all
other documents of this Department
published in the Federal Register, in
text or Adobe Portable Document
Format (PDF). To use PDF you must
have Adobe Acrobat Reader, which is
available free at the site.
You may also access documents of the
Department published in the Federal
60049
Register by using the article search
feature at: www.federalregister.gov.
Specifically, through the advanced
search feature at this site, you can limit
your search to documents published by
the Department.
(Catalog of Federal Domestic Assistance
Number does not apply)
List of Subjects in 34 CFR Part 36
Claims, Fraud, Penalties.
Dated: September 27, 2012.
Arne Duncan,
Secretary of Education.
For the reasons discussed in the
preamble, the Secretary amends part 36
in title 34 of the Code of Federal
Regulations as follows:
PART 36—ADJUSTMENT OF CIVIL
MONETARY PENALTIES FOR
INFLATION
1. The authority citation for part 36 is
revised to read as follows:
■
Authority: 20 U.S.C. 1221e–3 and 3474; 28
U.S.C. 2461 note, unless otherwise noted.
2. The authority citation for § 36.1 is
revised to read as follows:
■
§ 36.2
*
Purpose.
*
*
*
*
(Authority: 20 U.S.C. 1221e–3 and 3474; 28
U.S.C. 2461 note, unless otherwise noted)
3. Section 36.2 is amended by revising
Table I and the authority citation to read
as follows:
■
§ 36.2
*
Penalty adjustment.
*
*
*
*
TABLE I, SECTION 36.2—CIVIL MONETARY PENALTY INFLATION ADJUSTMENTS
New maximum
(and minimum, if
applicable)
penalty amount
Statute
Description
20 U.S.C. 1015(c)(5) (Section 131(c)(5) of the Higher Education Act of 1965 (HEA)).
Provides for a fine, as last adjusted, of up to $27,500 for failure by an institute of higher education to provide information on the cost of higher education to the Commissioner
of Education Statistics.
Provides for a fine, as set by Congress in 2008, of up to
$27,500 for failure by an IHE to provide information to the
State and the public regarding its teacher-preparation programs.
Provides for a civil penalty, as last adjusted, of up to $27,500
for violations by lenders and guaranty agencies of Title IV
of the HEA, which authorizes the Federal Family Education
Loan Program.
Provides for a civil penalty, as last adjusted, of up to $27,500
for an IHE’s violation of Title IV of the HEA, which authorizes various programs of student financial assistance.
Provides for a civil penalty of up to $1,000 for an educational
organization’s failure to disclose certain information to
minor students and their parents.
20 U.S.C. 1022d(a)(3) (Section 205(a)(3) of the HEA) .............
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20 U.S.C. 1082(g) (Section 432(g) of the HEA) .......................
20 U.S.C. 1094(c)(3)(B) (Section 487(c)(3)(B) of the HEA) ......
20 U.S.C. 1228c(c)(2)(E) (Section 429 of the General Education Provisions Act).
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$30,000.
$30,000.
$35,000.
$35,000.
$1,100.
60050
Federal Register / Vol. 77, No. 191 / Tuesday, October 2, 2012 / Rules and Regulations
TABLE I, SECTION 36.2—CIVIL MONETARY PENALTY INFLATION ADJUSTMENTS—Continued
New maximum
(and minimum, if
applicable)
penalty amount
Statute
Description
31 U.S.C. 1352(c)(1) and (c)(2)(A) ............................................
Provides for a civil penalty, as last adjusted, of $11,000 to
$110,000 for recipients of Government grants, contracts,
etc. that improperly lobby Congress or the Executive
Branch with respect to the award of Government grants
and contracts.
Provides for a civil penalty, as last adjusted, of up to $5,500
for false claims and statements made to the Government.
31 U.S.C. 3802(a)(1) and (a)(2) ................................................
(Authority: 20 U.S.C. 1221e–3 and 3474; 28
U.S.C. 2461 note, unless otherwise noted)
[FR Doc. 2012–24248 Filed 10–1–12; 8:45 am]
BILLING CODE 4000–01–P
DEPARTMENT OF THE INTERIOR
National Park Service
36 CFR Part 7
[NPS–SAGU–10884; 8671–0004–SZM]
RIN 1024–AE08
Special Regulations; Areas of the
National Park System, Saguaro
National Park, Bicycling
National Park Service, Interior.
Final rule.
AGENCY:
ACTION:
This rule designates the Hope
Camp Trail as a route for bicycle use
and allows for management of bicycle
use within Saguaro National Park.
Further, the rule meets the provision of
the National Park Service general
regulation pertaining to bicycles
requiring promulgation of a special
regulation to designate bicycle routes
outside of developed areas.
DATES: This rule is effective November
1, 2012.
FOR FURTHER INFORMATION CONTACT:
Darla Sidles, Superintendent, Saguaro
National Park, (520) 733–5101.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
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Legislation and Purposes of Saguaro
National Park
In 1933, in order to protect lands with
exceptional growth of various species of
cacti, including the so-called giant or
saguaro cactus, President Herbert
Hoover established what would later be
known as Saguaro National Monument
through Proclamation No. 2032 (47 Stat.
2557). In 1961 President John F.
Kennedy enlarged the national
monument to include certain lands in
what was then known as the Tucson
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Mountain Park through Proclamation
No. 3439 (76 Stat. 1437). In 1976
Congress designated 71,400 acres of the
national monument as wilderness (Pub.
L. 94–567, 90 Stat. 2692, 2693). Then, in
1991, through the Saguaro National
Monument Expansion Act of 1991,
Congress authorized the addition of
approximately 3,540 acres of lands to
the Rincon Unit of the national
monument (Pub. L. 102–61, 105 Stat.
303). Finally in 1994, through the
Saguaro National Park Establishment
Act of 1994, Congress again expanded
the park area and renamed it Saguaro
National Park (Park) (Pub. L. 103–364,
108 Stat. 3467, codified at 16 U.S.C.
410zz through 410zz–3).
The Park is an important national
resource visited by approximately
700,000 people annually. It
encompasses approximately 91,450
acres, 71,400 acres of which are
designated as wilderness. The Park has
two Districts—the Rincon Mountain
District east of Tucson and the Tucson
Mountain District west of Tucson. Both
are within Pima County, Arizona, and
are separated by the city of Tucson. The
Park protects a superb example of the
Sonoran Desert ecosystem, featuring
exceptional stands of saguaro cacti. The
saguaro is the tallest cactus in the
United States, and is recognized
worldwide as an icon of the American
Southwest.
The Hope Camp Trail is a 2.8-milelong hiking and equestrian trail that
originates at the Loma Alta Trailhead
and travels east through the
southwestern portion of the Park’s
Rincon Mountain District to the Arizona
State Trust Lands boundary beyond
Hope Camp. The trail generally
traverses relatively even terrain and
rolling hills and is lined with a variety
and abundance of desert trees and
shrubs. The trail is not within eligible,
proposed, recommended, or designated
wilderness.
Prior to the National Park Service
(NPS) acquisition in the mid 1990s, the
land was part of a privately-owned
ranch, and the trail route was a graded
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$15,000 to
$140,000.
$7,000.
dirt road used to support ranching
operations. The former owner also
allowed the route to be used for
recreational purposes, including hiking,
equestrian, and bicycle use. Shortly
after acquiring the land, the NPS closed
the route to motor vehicles and bicycles.
The trail is currently open to hiker and
equestrian use only. Although closed to
vehicular traffic, the route remains
approximately 14 feet wide, allowing
adequate room for two-way passage of
diverse user groups.
General Management Plan
The Park’s General Management Plan/
Environmental Impact Statement (GMP)
was completed in 2008. The GMP may
be viewed online at https://
parkplanning.nps.gov/sagu.
The purposes of the GMP are as
follows:
• Confirm the purpose, significance,
and special mandates of the Park.
• Clearly define resource conditions
and visitor uses and experiences to be
achieved at the Park.
• Provide a framework for NPS
managers to use when making decisions
about how to:
Æ Best protect Park resources;
Æ Provide quality visitor uses and
experiences; and
Æ Manage visitor uses and what kinds
of facilities, if any, to develop in/near
the Park.
• Ensure that a foundation for
decision making has been developed in
consultation with interested
stakeholders and adopted by NPS
leadership after an adequate analysis of
the benefits, impacts, and economic cost
of alternative courses of action.
The GMP identifies six different
management zones, which are specific
descriptions of desired conditions for
Park resources and visitor experiences
in different areas of the Park. As
identified in the GMP, the Hope Camp
Trail lies within the Natural Zone.
Under the GMP, activities within the
Natural Zone would include hiking,
horseback riding, running, bicycling,
and viewing flora and fauna. The zone
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]]>Agencies
[Federal Register Volume 77, Number 191 (Tuesday, October 2, 2012)]
[Rules and Regulations]
[Pages 60047-60050]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-24248]
[[Page 60047]]
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DEPARTMENT OF EDUCATION
34 CFR Part 36
RIN 1801-AA12
Adjustment of Civil Monetary Penalties for Inflation
AGENCY: Department of Education.
ACTION: Final regulations.
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SUMMARY: The Department of Education (Department) issues these final
regulations to adjust the Department's civil monetary penalties (CMPs)
for inflation, as required by the Federal Civil Penalties Inflation
Adjustment Act of 1990.
DATES: These regulations are effective October 2, 2012.
FOR FURTHER INFORMATION CONTACT: Peter Wathen-Dunn, Office of the
General Counsel, U.S. Department of Education, 400 Maryland Avenue SW.,
Room 6E207, Washington, DC 20202-2241. Telephone: (202) 401-8300.
If you use a telecommunications device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
Individuals with disabilities can obtain this document in an
accessible format (e.g., Braille, large print, audiotape, or compact
disc) on request to the contact person listed under FOR FURTHER
INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION:
Background
The Federal Civil Penalties Inflation Adjustment Act of 1990
(Inflation Adjustment Act) (28 U.S.C. 2461 note) provides for the
regular evaluation of civil monetary penalties (CMPs) to ensure that
they continue to maintain their deterrent value. The Inflation
Adjustment Act requires that each agency issue regulations to adjust
its CMPs beginning in 1996 and at least every four years thereafter.
The Department published its most recent cost adjustment to each CMP in
the Federal Register on January 4, 2005 (70 FR 297), and those
adjustments became effective on the date of publication. The Department
previously adjusted its CMPs in 2002. It has been more than four years
since the last adjustment. Accordingly, the Department is now making
the necessary adjustments.
A CMP is defined in the statute as any penalty, fine, or other
sanction that is (1) for a specific monetary amount as provided by
Federal law, or has a maximum amount provided for by Federal law; (2)
assessed or enforced by an agency pursuant to Federal law; and (3)
assessed or enforced pursuant to an administrative proceeding or a
civil action in the Federal courts.
The formula for the amount of a CMP inflation adjustment is
prescribed by law and is not subject to the exercise of discretion by
the Secretary of Education (Secretary). The adjustment reflects the
percentage increase in the Consumer Price Index for all urban consumers
(CPI-U) published by the Department of Labor from June of the calendar
year in which the amount was last adjusted, to June of the calendar
year preceding the adjustment. The Inflation Adjustment Act also
requires agencies to round the inflation adjustment based on the amount
of the penalty when last adjusted.
For penalties greater than $100 but less than or equal to
$1,000, the adjusted amount must be rounded to the nearest $100.
For penalties greater than $1,000 but less than or equal
to $10,000, the adjusted amount must be rounded to the nearest $1,000.
For penalties greater than $10,000 but less than or equal
to $100,000, the adjusted amount must be rounded to the nearest $5,000.
For penalties greater than $100,000 but less than or equal
to $200,000, the adjusted amount must be rounded to the nearest
$10,000.
For penalties greater than $200,000, the adjusted amount
must be rounded to the nearest $25,000.
The Department's Civil Monetary Penalties
The following analysis calculates new civil monetary penalties for
penalty statutes in the order in which they appear in 34 CFR 36.2. The
Inflation Adjustment Act provides that adjustments to an agency's CMPs
apply only to violations that occur after the effective date of the
adjustments. These regulations become effective upon publication in the
Federal Register. Therefore, the adjustments made by this amendment to
the Department's CMPs apply only to violations that occur after the
date these regulations are published in the Federal Register.
Statute: 20 U.S.C. 1015(c)(5).
Current Regulations: The CMP for 20 U.S.C. 1015(c)(5) [Section
131(c)(5) of the Higher Education Act of 1965, as amended (HEA)], as
last adjusted in 2005, is a fine of up to $27,500 for failure by an IHE
to provide information on the cost of higher education to the
Commissioner of Education Statistics.
New Regulations: The new penalty for this section is $30,000.
Reason: This CMP was last adjusted in 2005. Therefore, the
inflation adjustment is the percentage change in the CPI-U from June
2005 (194.5) through June 2011 (225.722), or 16%. The new penalty is
calculated as follows: $27,500 x 16% = $4,400, which increases the
penalty, when rounded to the nearest $5,000, to $30,000.
Statute: 20 U.S.C. 1027(f)(3)(now 20 U.S.C. 1022d(a)(3)).
Current Regulations: The CMP for 20 U.S.C. 1027(f)(3) [Section
207(f)(3) of the HEA], as last adjusted in 2005, provides for a fine of
up to $27,500 for failure by an IHE to provide information to the State
and the public regarding its teacher-preparation programs.
New Regulations: The new penalty for this section is $30,000.
Reason: In 2008, Congress amended the HEA, redesignating this CMP
as section 205(a)(3) of the HEA (20 U.S.C. 1022d(a)(3)) and setting the
fine at $27,500. Because Congress reauthorized this penalty in 2008,
the inflation adjustment for 20 U.S.C. 1022d(a)(3) is the percentage
change in the CPI-U from June 2008 (218.815) through June 2011
(225.722), or 3.2%. The new penalty is calculated as follows: $27,500 x
3.2% = $880, which increases the penalty, when rounded to the nearest
$5,000, to $30,000.
Statute: 20 U.S.C. 1082(g).
Current Regulations: The CMP for 20 U.S.C. 1082(g) [Section 432(g)
of the HEA], as last adjusted in 2002, provides for a fine of up to
$27,500 for violations by lenders and guaranty agencies of Title IV of
the HEA, which authorizes the Federal Family Education Loan Program.
New Regulation: The new penalty for this section is $35,000.
Reason: This CMP was last adjusted in 2002. Therefore, the
inflation adjustment is the percentage change in the CPI-U from June
2002 (179.9) through June 2011 (225.722), or 25.5%. The new penalty is
calculated as follows: $27,500 x 25.5% = $7,012.5, which increases the
penalty, when rounded to the nearest $5,000, to $35,000.
Statute: 20 U.S.C. 1094(c)(3)(B).
Current Regulations: The CMP for 20 U.S.C. 1094(c)(3)(B) [Section
487(c)(3)(B) of the HEA], as last adjusted in 2002, provides for a fine
of up to $27,500 for an IHE's violation of Title IV of the HEA or its
implementing regulations. Title IV authorizes various programs of
student financial assistance.
New Regulations: The new penalty for this section is $35,000.
Reason: This CMP was last adjusted in 2002. Therefore, the
inflation adjustment is the percentage change in the CPI-U from June
2002 (179.9)
[[Page 60048]]
through June 2011 (225.722), or 25.5%. The new penalty is calculated as
follows: $27,500 x 25.5% = $7,012.5, which increases the penalty, when
rounded to the nearest $5,000, to $35,000.
Statute: 20 U.S.C. 1228c(c)(2)(E).
Current Regulations: None.
New Regulations: The new penalty for this section is $1,100.
Reason: The CMP for 20 U.S.C. 1228c(c)(2)(E) [Section 429 of the
General Education Provisions Act] was established in 1994 and has not
been adjusted. It provides a penalty of up to $1,000 for an educational
organization's failure to disclose certain information to minor
students and their parents.
The Inflation Adjustment Act was passed in 1990 and required
agencies to first adjust their CMPs in 1996. Although the percentage
change in the CPI-U from June 1994 through June 2011 is greater than
10%, the 1996 statute that amended the Inflation Adjustment Act also
limited the first adjustment of a CMP to no more than 10 percent of the
original penalty. Because the Department has never adjusted the CMP for
20 U.S.C. 1228c(c)(2)(E), the Department is limited to a maximum
inflation adjustment of 10%, rounded to the nearest $100. The new
penalty is calculated as follows: $1,000 x 10%, which increases the
penalty, when rounded to the nearest $100, to $1,100.
Statute: 31 U.S.C. 1352(c)(1) and (c)(2)(A).
Current Regulations: The CMPs for 31 U.S.C. 1352(c)(1) and
(c)(2)(A), as last adjusted in 2002, provide for a fine of $11,000 to
$110,000 for recipients of Government grants, contracts, etc. that
improperly lobby Congress or the Executive Branch with respect to the
award of Government grants and contracts.
New Regulations: The new penalties for these sections are $15,000
to $140,000.
Reason: These CMPs were last adjusted in 2002. Therefore, the
inflation adjustment is the percentage change in the CPI-U from June
2002 (179.9) through June 2011 (225.722), or 25.5%. The new penalties
are calculated as follows: For the minimum fine of $11,000, $11,000 x
25.5% = $2,805, which increases the minimum penalty, when rounded to
the nearest $5,000, to $15,000. For the maximum penalty of $110,000,
$110,000 x 25.5% = $28,050, which increases the maximum penalty, when
rounded to the nearest $10,000, of $140,000.
Statute: 31 U.S.C. 3802(a)(1) and (a)(2).
Current Regulations: The CMPs for 31 U.S.C. 3802(a)(1) and (a)(2),
as last adjusted in 2002, provide for a fine of up to $5,500 for false
claims and statements made to the Government.
New Regulations: The new penalty for this section is $7,000.
Reason: This CMP was last adjusted in 2002. Therefore, the
inflation adjustment is the percentage change in the CPI-U from June
2002 (179.9) through June 2011 (225.722), or 25.5%. The new penalty is
calculated as follows: $5,500 x 25.5% = $1,402, which increases the
penalty, when rounded to the nearest $1,000, to $7,000.
Executive Orders 12866 and 13563
Regulatory Impact Analysis
Under Executive Order 12866, the Secretary must determine whether
this regulatory action is ``significant'' and, therefore, subject to
the requirements of the Executive order and subject to review by the
Office of Management and Budget (OMB). Section 3(f) of Executive Order
12866 defines a significant regulatory action as an action likely to
result in a rule that may--
(1) Have an annual effect on the economy of $100 million or more,
or adversely affect a sector of the economy; productivity; competition;
jobs; the environment; public health or safety; or State, local, or
tribal governments or communities in a material way (also referred to
as ``economically significant'' regulations);
(2) Create serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles stated in the
Executive order.
Based on the number and amount of penalties imposed under the CMPs
amended in this final regulation, we have determined that this final
regulatory action will have none of the economic impacts described
under the Executive order. These final regulations are required by
statute, are not at the Secretary's discretion, and, accordingly, do
not have any of the policy impacts described under the Executive order.
Because this final regulatory action is not a significant regulatory
action, it is not subject to review by OMB under section 3(f) of
Executive Order 12866.
We have also reviewed these regulations under Executive Order
13563, which supplements and explicitly reaffirms the principles,
structures, and definitions governing regulatory review established in
Executive Order 12866. To the extent permitted by law, Executive Order
13563 requires that an agency--
(1) Propose or adopt regulations only upon a reasoned determination
that their benefits justify their costs (recognizing that some benefits
and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society,
consistent with obtaining regulatory objectives and taking into
account, among other things, and to the extent practicable, the costs
of cumulative regulations;
(3) In choosing among alternative regulatory approaches, select
those approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather
than the behavior or manner of compliance a regulated entity must
adopt; and
(5) Identify and assess available alternatives to direct
regulation, including economic incentives--such as user fees or
marketable permits--to encourage the desired behavior, or providing
information that enables the public to make choices.
Executive Order 13563 also requires an agency ``to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible.'' The Office of
Information and Regulatory Affairs of OMB has emphasized that these
techniques may include ``identifying changing future compliance costs
that might result from technological innovation or anticipated
behavioral changes.''
We are issuing these final regulations as required by statute. The
Secretary has no discretion to consider alternative approaches as
delineated in the Executive order. Based on this analysis and the
reasons stated in the preamble, the Department believes that these
final regulations are consistent with the principles in Executive Order
13563.
Waiver of Rulemaking and Delayed Effective Date
Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the
Department generally offers interested parties the opportunity to
comment on proposed regulations. However, the APA provides that an
agency is not required to conduct notice- and-comment rulemaking when
the agency, for good cause, finds that notice and public comment
thereon are
[[Page 60049]]
impracticable, unnecessary, or contrary to the public interest (5
U.S.C. 553(b)(B)). There is good cause to waive rulemaking here as
unnecessary.
Rulemaking is ``unnecessary'' when the agency is issuing a minor
rule in which the public is not particularly interested. It applies in
those situations in which ``the administrative rule is a routine
determination, insignificant in nature and impact, and inconsequential
to the industry and to the public.'' Utility Solid Waste Activities
Group v. EPA, 236 F.3d 749, 755 (D.C. Cir. 2001), quoting U.S.
Department of Justice, Attorney General's Manual on the Administrative
Procedure Act 31 (1947) and South Carolina v. Block, 558 F. Supp. 1004,
1016 (D.S.C. 1983).
These regulations merely implement the statutory mandate to adjust
CMPs for inflation. The regulations reflect administrative computations
performed by the Department as prescribed by the statute and do not
establish or affect substantive policy. The Secretary has no discretion
in determining the new penalties.
The APA also generally requires that regulations be published at
least 30 days before their effective date, unless the agency has good
cause to implement its regulations sooner (5 U.S.C. 553(d)(3)). Again,
because these final regulations merely implement non-discretionary
administrative computations, there is good cause to make them effective
on the day they are published.
Regulatory Flexibility Act Certification
The Secretary certifies that these regulations will not have a
significant economic impact on a substantial number of small entities.
The formula for the amount of the inflation adjustments is prescribed
by statute and is not subject to the Secretary's discretion. These CMPs
are infrequently imposed by the Secretary, and the regulations do not
involve any special considerations that might affect the imposition of
CMPs on small entities.
Paperwork Reduction Act of 1995
These regulations do not contain any information collection
requirements.
Intergovernmental Review
This program is not subject to Executive Order 12372 and the
regulations in 34 CFR part 79.
Assessment of Educational Impact
Based on our own review, we have determined that these final
regulations do not require transmission of information that any other
agency or authority of the United States gathers or makes available.
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feature at this site, you can limit your search to documents published
by the Department.
(Catalog of Federal Domestic Assistance Number does not apply)
List of Subjects in 34 CFR Part 36
Claims, Fraud, Penalties.
Dated: September 27, 2012.
Arne Duncan,
Secretary of Education.
For the reasons discussed in the preamble, the Secretary amends
part 36 in title 34 of the Code of Federal Regulations as follows:
PART 36--ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION
0
1. The authority citation for part 36 is revised to read as follows:
Authority: 20 U.S.C. 1221e-3 and 3474; 28 U.S.C. 2461 note,
unless otherwise noted.
0
2. The authority citation for Sec. 36.1 is revised to read as follows:
Sec. 36.2 Purpose.
* * * * *
(Authority: 20 U.S.C. 1221e-3 and 3474; 28 U.S.C. 2461 note, unless
otherwise noted)
0
3. Section 36.2 is amended by revising Table I and the authority
citation to read as follows:
Sec. 36.2 Penalty adjustment.
* * * * *
Table I, Section 36.2--Civil Monetary Penalty Inflation Adjustments
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New maximum (and
minimum, if
Statute Description applicable) penalty
amount
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20 U.S.C. 1015(c)(5) Provides for a fine, $30,000.
(Section 131(c)(5) of the as last adjusted,
Higher Education Act of of up to $27,500
1965 (HEA)). for failure by an
institute of higher
education to
provide information
on the cost of
higher education to
the Commissioner of
Education
Statistics.
20 U.S.C. 1022d(a)(3) Provides for a fine, $30,000.
(Section 205(a)(3) of the as set by Congress
HEA). in 2008, of up to
$27,500 for failure
by an IHE to
provide information
to the State and
the public
regarding its
teacher-preparation
programs.
20 U.S.C. 1082(g) (Section Provides for a civil $35,000.
432(g) of the HEA). penalty, as last
adjusted, of up to
$27,500 for
violations by
lenders and
guaranty agencies
of Title IV of the
HEA, which
authorizes the
Federal Family
Education Loan
Program.
20 U.S.C. 1094(c)(3)(B) Provides for a civil $35,000.
(Section 487(c)(3)(B) of penalty, as last
the HEA). adjusted, of up to
$27,500 for an
IHE's violation of
Title IV of the
HEA, which
authorizes various
programs of student
financial
assistance.
20 U.S.C. 1228c(c)(2)(E) Provides for a civil $1,100.
(Section 429 of the General penalty of up to
Education Provisions Act). $1,000 for an
educational
organization's
failure to disclose
certain information
to minor students
and their parents.
[[Page 60050]]
31 U.S.C. 1352(c)(1) and Provides for a civil $15,000 to $140,000.
(c)(2)(A). penalty, as last
adjusted, of
$11,000 to $110,000
for recipients of
Government grants,
contracts, etc.
that improperly
lobby Congress or
the Executive
Branch with respect
to the award of
Government grants
and contracts.
31 U.S.C. 3802(a)(1) and Provides for a civil $7,000.
(a)(2). penalty, as last
adjusted, of up to
$5,500 for false
claims and
statements made to
the Government.
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(Authority: 20 U.S.C. 1221e-3 and 3474; 28 U.S.C. 2461 note, unless
otherwise noted)
[FR Doc. 2012-24248 Filed 10-1-12; 8:45 am]
BILLING CODE 4000-01-P
