Adjustment of Civil Monetary Penalties for Inflation, 60047-60050 [2012-24248]

Download as PDF 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: wreier-aviles on DSK5TPTVN1PROD with RULES 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 VerDate Mar<15>2010 14:57 Oct 01, 2012 Jkt 229001 (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 PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 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) E:\FR\FM\02OCR1.SGM 02OCR1 60048 Federal Register / Vol. 77, No. 191 / Tuesday, October 2, 2012 / Rules and Regulations wreier-aviles on DSK5TPTVN1PROD with RULES 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). VerDate Mar<15>2010 14:57 Oct 01, 2012 Jkt 229001 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 PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 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 E:\FR\FM\02OCR1.SGM 02OCR1 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) ............. wreier-aviles on DSK5TPTVN1PROD with RULES 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). VerDate Mar<15>2010 14:57 Oct 01, 2012 Jkt 229001 PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 E:\FR\FM\02OCR1.SGM 02OCR1 $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 wreier-aviles on DSK5TPTVN1PROD with RULES 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 VerDate Mar<15>2010 14:57 Oct 01, 2012 Jkt 229001 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 PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 $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 http:// 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 E:\FR\FM\02OCR1.SGM 02OCR1

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.

-----------------------------------------------------------------------

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.
    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 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

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
------------------------------------------------------------------------
                                                      New maximum (and
                                                         minimum, if
           Statute                 Description      applicable)  penalty
                                                           amount
------------------------------------------------------------------------
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.
------------------------------------------------------------------------


(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