Rules of Practice and Procedure; Adjusting Civil Money Penalties for Inflation, 32633-32635 [2016-11862]
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Federal Register / Vol. 81, No. 100 / Tuesday, May 24, 2016 / Rules and Regulations
the Energy Policy and Conservation Act, as
amended (ECPA), 42 U.S.C.
6295(o)(2)(B)(i)(V), which requires the
Attorney General to make a determination of
the impact of any lessening of competition
that is likely to result from the imposition of
proposed energy conservation standards. The
Attorney General’s responsibility for
responding to requests from other
departments about the effect of a program on
competition has been delegated to the
Assistant Attorney General for the Antitrust
Division in 28 CFR 0.40(g).
In conducting its analysis, the Antitrust
Division examines whether a proposed
standard may lessen competition, for
example, by substantially limiting consumer
choice or increasing industry concentration.
A lessening of competition could result in
higher prices to manufacturers and
consumers.
We have reviewed the proposed standards
contained in the Supplemental Notice of
Proposed Rulemaking (81 FR 2111 & 2420,
January 15, 2016) and the related Technical
Support Documents.
Based on this review, our conclusion is
that the proposed energy conservation
standards for commercial warm air furnace
equipment, commercial air-conditioning
equipment, and commercial heat pump
equipment are unlikely to have a significant
adverse impact on competition.
Sincerely,
William J. Baer
BILLING CODE 6450–01–P
FARM CREDIT ADMINISTRATION
12 CFR Part 622
RIN 3052–AD16
Rules of Practice and Procedure;
Adjusting Civil Money Penalties for
Inflation
Farm Credit Administration.
Final rule.
AGENCY:
This regulation implements
inflation adjustments to civil money
penalties (CMPs) that the Farm Credit
Administration (FCA) may impose or
enforce pursuant to the Farm Credit Act
of 1971, as amended (Farm Credit Act),
and pursuant to the Flood Disaster
Protection Act of 1973, as amended by
the National Flood Insurance Reform
Act of 1994 (Reform Act), and further
amended by the Biggert-Waters Flood
Insurance Reform Act of 2012 (BiggertWaters Act). The Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended by the Debt Collection
Improvement Act of 1996 (1996 Act)
and the Federal Civil Penalties Inflation
Adjustment Act of 2015 (2015 Act)
(collectively, 1990 Act, as amended),
requires all Federal agencies with the
mstockstill on DSK3G9T082PROD with RULES
SUMMARY:
VerDate Sep<11>2014
17:11 May 23, 2016
I. Objective
The objective of this regulation is to
adjust the maximum CMPs for inflation
with an initial ‘‘catch-up’’ adjustment
through an interim final rulemaking
(IFR) to retain the deterrent effect of
such penalties.
II. Background
A. Introduction
[FR Doc. 2016–12279 Filed 5–23–16; 8:45 am]
ACTION:
authority to enforce CMPs to evaluate
those CMPs each year to ensure that
they continue to maintain their
deterrent value and promote compliance
with the law.
EFFECTIVE DATE: This regulation is
effective on August 1, 2016.
FOR FURTHER INFORMATION CONTACT:
Michael T. Wilson, Policy Analyst,
Office of Regulatory Policy, Farm
Credit Administration, McLean, VA
22102–5090, (703) 883–4124, TTY
(703) 883–4056,
Or
Autumn Agans, Attorney-Advisor,
Office of General Counsel, Farm
Credit Administration, McLean, VA
22102–5090, (703) 883–4082, TTY
(703) 883–4056.
SUPPLEMENTARY INFORMATION:
Jkt 238001
Section 3(2) of the 1990 Act, as
amended, defines a civil monetary
penalty 1 as any penalty, fine, or other
sanction that: (1) Either is for a specific
monetary amount as provided by
Federal law or has a maximum amount
provided for by Federal law; (2) is
assessed or enforced by an agency
pursuant to Federal law; and (3) is
assessed or enforced pursuant to an
administrative proceeding or a civil
action in the Federal courts.2
The FCA imposes and enforces CMPs
through the Farm Credit Act and the
Flood Disaster Protection Act of 1973, as
amended. FCA’s regulations governing
CMPs are found in 12 CFR parts 622 and
623. Part 622 establishes rules of
practice and procedure applicable to
formal and informal hearings held
before the FCA, and to formal
investigations conducted under the
Farm Credit Act. Part 623 prescribes
rules with regard to persons who may
practice before the FCA and the
circumstances under which such
persons may be suspended or debarred
from practice before the FCA.
1 While the 1990 Act, as amended by 1996 and
2015 Acts, uses the term ‘‘civil monetary penalties’’
for these penalties or other sanctions, the Farm
Credit Act and the FCA Regulations use the term
‘‘civil money penalties.’’ Both terms have the same
meaning. Accordingly, this rule uses the term ‘‘civil
money penalty’’, and both terms may be used
interchangeably.
2 See 28 U.S.C. 2461 note.
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Sfmt 4700
32633
B. CMPs Issued Under the Farm Credit
Act
The Farm Credit Act provides that
any Farm Credit System (System)
institution or any officer, director,
employee, agent, or other person
participating in the conduct of the
affairs of a System institution who
violates the terms of a cease-and-desist
order that has become final pursuant to
section 5.25 or 5.26 of the Farm Credit
Act must pay up to a maximum daily
amount of $1,000 3 during which such
violation continues. This CMP
maximum was set by the Farm Credit
Amendments Act of 1985, which
amended the Farm Credit Act. Orders
issued by the FCA under section 5.25 or
5.26 of the Farm Credit Act include
temporary and permanent cease-anddesist orders. In addition, section
5.32(h) of the Farm Credit Act provides
that any directive issued under sections
4.3(b)(2), 4.3A(e), or section 4.14A(i) of
the Farm Credit Act ‘‘shall be treated’’
as a final order issued under section
5.25 of the Farm Credit Act for purposes
of assessing a CMP.
Section 5.32(a) of the Farm Credit Act
also states that ‘‘[a]ny such institution or
person who violates any provision of
the [Farm Credit] Act or any regulation
issued under this Act shall forfeit and
pay a civil penalty of not more than
$500 4 per day for each day during
which such violation continues.’’ This
CMP maximum was set by the
Agricultural Credit Act of 1987, which
was enacted in 1988, and amends the
Farm Credit Act. Current, inflationadjusted CMP maximums are set forth
in existing § 622.61 of FCA regulations.5
The FCA also enforces the Flood
Disaster Protection Act of 1973,6 as
amended by the National Flood
Insurance Reform Act of 1994,7 which
requires FCA to assess CMPs for a
pattern or practice of committing certain
specific actions in violation of the
National Flood Insurance Program. The
existing maximum CMP for a violation
under the Flood Disaster Protection Act
of 1973 is $2,000.8
3 The inflation-adjusted CMP in effect on
November 2, 2015, for a violation of a final order
is $1,100 per day, as set forth in § 622.61(a)(1) of
FCA regulations.
4 The inflation-adjusted CMP in effect on
November 2, 2015, for a violation of the Farm Credit
Act or a regulation issued under the Farm Credit
Act is $750 per day, as set forth in § 622.61(a)(2)
of FCA regulations.
5 Prior adjustments were made under the 1990
Act.
6 42 U.S.C. 4012a.
7 Pub. L. 103–325, title V, 108 Stat. 2160, 2255–
87 (September 23, 1994).
8 Pub. L. 112–141, 126 Stat. 405 (July 6, 2012).
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24MYR1
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Federal Register / Vol. 81, No. 100 / Tuesday, May 24, 2016 / Rules and Regulations
mstockstill on DSK3G9T082PROD with RULES
C. Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015
1. In General
The 2015 Act requires all Federal
agencies with authority to issue CMPs to
make inflation-based adjustments to all
CMPs within their jurisdictions no later
than July 1, 2016. The 2015 Act also
requires every Federal agency to adjust
the CMPs yearly, starting January 15,
2017.
Under Section 4(b) of the 1990 Act, as
amended, for the first adjustment made
in accordance with the 2015 Act
amendments, Federal agencies are to
make a ‘‘catch up’’ adjustment to the
civil monetary penalties through an IFR,
with the adjustment taking effect no
later than August 1, 2016.9 Subsequent
adjustments are to be made yearly
thereafter, no later than January 15.
Section 6 of the 1990 Act, as amended,
states that any increase to a civil
monetary penalty under this Act applies
only to civil monetary penalties,
including those whose associated
violation predated such increase, which
are assessed after the date the increase
takes effect.
Section 5(b) of the 1990 Act, as
amended, defines the term ‘‘cost-ofliving adjustment’’ as the percentage (if
any) for each civil monetary penalty by
which (1) the Consumer Price Index
(CPI) for the month of October of the
calendar year preceding the adjustment,
exceeds (2) the CPI for the month of
October 1 year before the month of
October referred to in (1) of the calendar
year in which the amount of such civil
monetary penalty was last set or
adjusted pursuant to law.10
The ‘‘catch-up’’ adjustment under the
2015 Act amendments requires Federal
agencies to use the cost-of-living
adjustment calculated by determining
the percentage change (if any) for each
civil monetary penalty by which the CPI
for the month of October 2015 exceeds
the CPI for the month of October during
the calendar year in which the CMP was
created or last adjusted for any reason
other than pursuant to the 1996 Act.
Several adjustments have been made
since the Farm Credit Act established
the CMP maximums. Those maximums
are to be disregarded for purposes of the
2015 Act amendment initial ‘‘catch-up’’
adjustment calculation. However,
agencies are limited to a 150-percent
increase in CMPs, based upon the CMP
in effect on November 2, 2015. The 1509 Pub.
L. 114–74, sec. 701(b)(1).
10 The CPI is published by the Department of
Labor, Bureau of Statistics, and is available at its
Web site: ftp://ftp.bls.gov/pub/special.requests/cpi/
cpiai.txt.
VerDate Sep<11>2014
17:11 May 23, 2016
Jkt 238001
percent limitation is on the amount of
the increase; therefore, the adjusted
penalty level(s) will be up to 250
percent of the level(s) in effect on
November 2, 2015.11
The increase for each CMP adjusted
for inflation must be rounded using a
method prescribed by section 5(a) of the
1990 Act, as amended, by the 2015
Act.12
2. Other Adjustments
If a civil monetary penalty is subject
to a cost-of-living adjustment under the
1990 Act, as amended, but is adjusted
to an amount greater than the amount of
the adjustment required under the Act
within the 12 months preceding a
required cost-of-living adjustment, the
agency is not required to make the costof-living adjustment to that CMP in that
calendar year.13
III. Catch-Up Adjustments
A. Mathematical Calculations of CatchUp Adjustments
The adjustment requirement affects
two provisions of section 5.32(a) of the
Farm Credit Act. For the ‘‘catch-up’’
adjustments to the CMPs set forth by the
Farm Credit Act, the calculation
required by the 2015 Act is based on the
percentage by which the CPI for October
2015 exceeds the CPIs for October 1985
and October 1988, respectively. The
maximum CMPs for violations under
section 5.32(a) were established in 1985
and 1988. The White House Office of
Management and Budget (OMB) set
forth guidance, as required by the 2015
Act,14 with a grid of multipliers for
calculating the new CMP values.15 The
OMB multiplier for the 1985 CMPs is
2.18802. The OMB multiplier for the
1988 CMPs is 1.97869.
The adjustment also affects the CMPs
set by the Flood Disaster Protection Act
of 1973, as amended. For the ‘‘catch-up’’
adjustments to the CMP set forth by the
Flood Disaster Protection Act of 1973, as
amended, the calculation required by
the 2015 Act is based on the percentage
by which the CPI for October 2012
exceeds the CPI for October 2015. The
maximum CMPs for violations were
created in 2012 by the Biggert-Waters
Act, which amended the Flood Disaster
11 OMB Circular M–16–06, Implementation of the
Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015.
12 Per section 5(a)(3) of the 2015 Act, any increase
determined under the subsection shall be rounded
to the nearest $1.
13 Per section 4(d) of the 1990 Act, as amended.
14 28 U.S.C. 2461 note, section 7(a).
15 OMB Circular M–16–06, Implementation of the
Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015.
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Fmt 4700
Sfmt 4700
Protection Act of 1973. The multiplier
for the 2012 CMPs is 1.02819.
If any of the CMP increases exceed
150 percent of the maximums in effect
as of November 2, 2015, the new
maximum CMPs will reflect a simple
150-percent increase over the November
2, 2015, CMP maximums.16
1. New Penalty Amount in § 622.61(a)(1)
While the inflation-adjusted CMP
currently in effect for violations of a
final order occurring on or after
November 2, 2015, is a maximum daily
amount of $1,100,17 the 2015 Act
amendments require FCA to use the
maximum daily amount of $1,000 to
compute the catch-up adjustment as this
was the amount in effect in 1985.
Multiplying the $1,000 CMP by the 1985
OMB multiplier, 2.18802, yields a total
of $2,188.02. When that number is
rounded as required by section 5(a) of
the 1990 Act, as amended the inflationadjusted maximum increases to $2,188.
The CMP in effect on November 2, 2015
was $1,100. Increasing the 2015 CMP
maximum of $1,100 by 150 percent
yields a CMP of $2,750. Since the new
CMP maximum calculated with the
1985 OMB multiplier is less than the
150-percent maximum increase
established by the 2015 Act
amendments, the new CMP maximum is
$2,188.
2. New Penalty Amount in § 622.61(a)(2)
While the inflation-adjusted CMP
currently in effect for violations of the
Farm Credit Act or regulations issued
under the Farm Credit Act occurring on
or after November 2, 2015, is a
maximum daily amount of $750,18 the
2015 Act amendments require FCA to
use the maximum daily amount of $500
to compute the catch-up adjustment as
this was the amount in effect in 1988.
Multiplying the $500 CMP maximum by
the 1988 OMB multiplier, 1.97869,
yields a total of $989.35. When that
number is rounded as required by
section 5(a) of the 1990 Act, as amended
the inflation-adjusted maximum
increases to $989. The CMP in effect on
November 2, 2015 was $750. Increasing
the 2015 CMP of $750 by 150 percent
yields a total of $1,875. Since the new
CMP maximum calculated with the
1988 OMB multiplier is less than the
150-percent maximum increase
established by the 2015 Act
16 The 150-percent limitation is on the amount of
the increase; therefore, the adjusted penalty level(s)
will be up to 250 percent of the level(s) in effect
on November 2, 2015. OMB Circular, M–16–06.
17 12 CFR 622.61(a)(1).
18 12 CFR 622.61(a)(2).
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24MYR1
Federal Register / Vol. 81, No. 100 / Tuesday, May 24, 2016 / Rules and Regulations
amendments, the new CMP maximum is
$989.
PART 622—RULES OF PRACTICE AND
PROCEDURE
ACTION:
3. New Penalty Amounts for Flood
Insurance Violations Under § 622.61(b)
■
1. The authority citation for part 622
continues to read as follows:
SUMMARY:
The existing maximum CMP for a
pattern or practice of flood insurance
violations pursuant to 42 U.S.C.
4012a(f)(5) is $2,000. Multiplying
$2,000 by the 2012 OMB multiplier,
1.02819, yields a total of $2,056.38.
When that number is rounded as
required by section 5(a) of the 1990 Act,
as amended, the new maximum
assessment of the CMP for violating 42
U.S.C. 4012a(f)(5) is $2,056. The CMP in
effect on November 2, 2015 was $2,000.
Increasing the 2015 CMP of $2,000 by
150 percent yields $5,000. Since the
new CMP maximum calculated with the
OMB multiplier is lower than the 150percent maximum increase established
by the 2015 Act amendments, the new
CMP maximum is $2,056.
Authority: Secs. 5.9, 5.10, 5.17, 5.25–5.37
of the Farm Credit Act (12 U.S.C. 2243, 2244,
2252, 2261–2273); 28 U.S.C. 2461 note; and
42 U.S.C. 4012a(f).
IV. Notice and Comment Not Required
by Administrative Procedure Act
The 1990 Act, as amended, gives
Federal agencies no discretion in the
adjustment of CMPs for the rate of
inflation. Further, these revisions are
ministerial, technical, and
noncontroversial. For these reasons, the
FCA finds good cause to determine that
public notice and an opportunity to
comment are impracticable,
unnecessary, and contrary to the public
interest pursuant to the Administrative
Procedure Act, 5 U.S.C. 553(b)(B), and
adopts this rule in final form.
V. Regulatory Flexibility Act
Pursuant to section 605(b) of the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.), the FCA hereby certifies that
this final rule will not have a significant
economic impact on a substantial
number of small entities. Each of the
banks in the System, considered
together with its affiliated associations,
has assets and annual income in excess
of the amounts that would qualify them
as small entities. Therefore, System
institutions are not ‘‘small entities’’ as
defined in the Regulatory Flexibility
Act.
List of Subjects in 12 CFR Part 622
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32635
Jkt 238001
§ 622.61 Adjustment of civil money
penalties by the rate of inflation under the
Federal Civil Penalties Inflation Adjustment
Act of 1990, as amended.
(a) The maximum amount of each
civil money penalty within FCA’s
jurisdiction is adjusted in accordance
with the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended (28 U.S.C. 2461 note), as
follows:
(1) Amount of civil money penalty
imposed under section 5.32 of the Act
for violation of a final order issued
under section 5.25 or 5.26 of the Act:
The maximum daily amount is $2,188
for violations that occur on or after
August 1, 2016.
(2) Amount of civil money penalty for
violation of the Act or regulations: The
maximum daily amount is $989 for each
violation that occurs on or after August
1, 2016.
(b) The maximum civil money penalty
amount assessed under 42 U.S.C.
4012a(f) is: $385 for each violation that
occurs on or after January 16, 2009, but
before July 1, 2013, with total penalties
under such statute not to exceed
$120,000 for any single institution
during any calendar year; $2,000 for
each violation that occurs on or after
July 1, 2013, but before August 1, 2016,
with no cap on the total amount of
penalties that can be assessed against
any single institution during any
calendar year; and $2,056 for each
violation that occurs on or after August
1, 2016, with no cap on the total amount
of penalties that can be assessed against
any single institution during any
calendar year.
Dated: May 16, 2016.
Dale L. Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2016–11862 Filed 5–23–16; 8:45 am]
[Docket No. SBA–2016–0004]
Small Business Size Standards
U.S. Small Business
Administration.
AGENCY:
PO 00000
Frm 00019
Fmt 4700
The Small Business
Administration (SBA) hereby gives
notice of its intended application and
interpretation of the interaffiliate
transactions exclusion from annual
receipts set forth in its Small Business
Size Regulations. Effective at the
issuance of this notice, SBA will apply
the exclusion to properly documented
transactions between a concern and its
domestic or foreign affiliates, regardless
of the type of relationship that resulted
in the finding of affiliation.
DATES:
Effective Date: This Policy Statement
is effective May 24, 2016.
Comment Date: Comments must be
received on or before July 25, 2016.
ADDRESSES: You may submit comments,
identified by Docket No. SBA–2016–
0004 by any of the following methods:
• Federal Rulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail or Hand Delivery/Courier:
Brenda Fernandez, U.S. Small Business
Administration, Office of Government
Contracting, 409 3rd Street SW., 8th
Floor, Washington, DC 20416.
SBA will post all comments on https://
www.Regulations.gov. If you wish to
submit confidential business
information (CBI) as defined in the User
Notice at https://www.Regulations.gov,
please submit the information to Brenda
Fernandez, U.S. Small Business
Administration, Office of Government
Contracting, 409 3rd Street SW., 8th
Floor, Washington, DC 20416, and
highlight the information that you
consider to be CBI and explain why you
believe this information should be held
confidential. SBA will review the
information and make a final
determination of whether the
information will be published or not.
FOR FURTHER INFORMATION CONTACT:
Brenda Fernandez, U.S. Small Business
Administration, Office of Government
Contracting, 409 3rd Street SW., 8th
Floor, Washington, DC 20416; (202)
205–7337; brenda.fernandez@sba.gov.
SUPPLEMENTARY INFORMATION:
Background
BILLING CODE 6705–01–P
13 CFR Part 121
For the reasons stated in the
preamble, part 622 of chapter VI, title 12
of the Code of Federal Regulations is
amended to read as follows:
17:11 May 23, 2016
2. Revise § 622.61 to read as follows:
SMALL BUSINESS ADMINISTRATION
Administrative practice and
procedure, Crime, Investigations,
Penalties.
VerDate Sep<11>2014
■
Statement of General Policy,
SBA Size Policy Statement No. 3.
Sfmt 4700
Under 13 CFR 121.104(d), the average
annual receipts size of a business
concern with affiliates is calculated by
adding the average annual receipts of
the business concern with the average
annual receipts of each affiliate.
However, in adding the receipts of a
concern with its affiliate, SBA excludes
‘‘proceeds from transactions between a
concern and its domestic or foreign
E:\FR\FM\24MYR1.SGM
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Agencies
[Federal Register Volume 81, Number 100 (Tuesday, May 24, 2016)]
[Rules and Regulations]
[Pages 32633-32635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11862]
=======================================================================
-----------------------------------------------------------------------
FARM CREDIT ADMINISTRATION
12 CFR Part 622
RIN 3052-AD16
Rules of Practice and Procedure; Adjusting Civil Money Penalties
for Inflation
AGENCY: Farm Credit Administration.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This regulation implements inflation adjustments to civil
money penalties (CMPs) that the Farm Credit Administration (FCA) may
impose or enforce pursuant to the Farm Credit Act of 1971, as amended
(Farm Credit Act), and pursuant to the Flood Disaster Protection Act of
1973, as amended by the National Flood Insurance Reform Act of 1994
(Reform Act), and further amended by the Biggert-Waters Flood Insurance
Reform Act of 2012 (Biggert-Waters Act). The Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended by the Debt Collection
Improvement Act of 1996 (1996 Act) and the Federal Civil Penalties
Inflation Adjustment Act of 2015 (2015 Act) (collectively, 1990 Act, as
amended), requires all Federal agencies with the authority to enforce
CMPs to evaluate those CMPs each year to ensure that they continue to
maintain their deterrent value and promote compliance with the law.
EFFECTIVE DATE: This regulation is effective on August 1, 2016.
FOR FURTHER INFORMATION CONTACT:
Michael T. Wilson, Policy Analyst, Office of Regulatory Policy, Farm
Credit Administration, McLean, VA 22102-5090, (703) 883-4124, TTY (703)
883-4056,
Or
Autumn Agans, Attorney-Advisor, Office of General Counsel, Farm Credit
Administration, McLean, VA 22102-5090, (703) 883-4082, TTY (703) 883-
4056.
SUPPLEMENTARY INFORMATION:
I. Objective
The objective of this regulation is to adjust the maximum CMPs for
inflation with an initial ``catch-up'' adjustment through an interim
final rulemaking (IFR) to retain the deterrent effect of such
penalties.
II. Background
A. Introduction
Section 3(2) of the 1990 Act, as amended, defines a civil monetary
penalty \1\ as any penalty, fine, or other sanction that: (1) Either is
for a specific monetary amount as provided by Federal law or has a
maximum amount provided for by Federal law; (2) is assessed or enforced
by an agency pursuant to Federal law; and (3) is assessed or enforced
pursuant to an administrative proceeding or a civil action in the
Federal courts.\2\
---------------------------------------------------------------------------
\1\ While the 1990 Act, as amended by 1996 and 2015 Acts, uses
the term ``civil monetary penalties'' for these penalties or other
sanctions, the Farm Credit Act and the FCA Regulations use the term
``civil money penalties.'' Both terms have the same meaning.
Accordingly, this rule uses the term ``civil money penalty'', and
both terms may be used interchangeably.
\2\ See 28 U.S.C. 2461 note.
---------------------------------------------------------------------------
The FCA imposes and enforces CMPs through the Farm Credit Act and
the Flood Disaster Protection Act of 1973, as amended. FCA's
regulations governing CMPs are found in 12 CFR parts 622 and 623. Part
622 establishes rules of practice and procedure applicable to formal
and informal hearings held before the FCA, and to formal investigations
conducted under the Farm Credit Act. Part 623 prescribes rules with
regard to persons who may practice before the FCA and the circumstances
under which such persons may be suspended or debarred from practice
before the FCA.
B. CMPs Issued Under the Farm Credit Act
The Farm Credit Act provides that any Farm Credit System (System)
institution or any officer, director, employee, agent, or other person
participating in the conduct of the affairs of a System institution who
violates the terms of a cease-and-desist order that has become final
pursuant to section 5.25 or 5.26 of the Farm Credit Act must pay up to
a maximum daily amount of $1,000 \3\ during which such violation
continues. This CMP maximum was set by the Farm Credit Amendments Act
of 1985, which amended the Farm Credit Act. Orders issued by the FCA
under section 5.25 or 5.26 of the Farm Credit Act include temporary and
permanent cease-and-desist orders. In addition, section 5.32(h) of the
Farm Credit Act provides that any directive issued under sections
4.3(b)(2), 4.3A(e), or section 4.14A(i) of the Farm Credit Act ``shall
be treated'' as a final order issued under section 5.25 of the Farm
Credit Act for purposes of assessing a CMP.
---------------------------------------------------------------------------
\3\ The inflation-adjusted CMP in effect on November 2, 2015,
for a violation of a final order is $1,100 per day, as set forth in
Sec. 622.61(a)(1) of FCA regulations.
---------------------------------------------------------------------------
Section 5.32(a) of the Farm Credit Act also states that ``[a]ny
such institution or person who violates any provision of the [Farm
Credit] Act or any regulation issued under this Act shall forfeit and
pay a civil penalty of not more than $500 \4\ per day for each day
during which such violation continues.'' This CMP maximum was set by
the Agricultural Credit Act of 1987, which was enacted in 1988, and
amends the Farm Credit Act. Current, inflation-adjusted CMP maximums
are set forth in existing Sec. 622.61 of FCA regulations.\5\
---------------------------------------------------------------------------
\4\ The inflation-adjusted CMP in effect on November 2, 2015,
for a violation of the Farm Credit Act or a regulation issued under
the Farm Credit Act is $750 per day, as set forth in Sec.
622.61(a)(2) of FCA regulations.
\5\ Prior adjustments were made under the 1990 Act.
---------------------------------------------------------------------------
The FCA also enforces the Flood Disaster Protection Act of 1973,\6\
as amended by the National Flood Insurance Reform Act of 1994,\7\ which
requires FCA to assess CMPs for a pattern or practice of committing
certain specific actions in violation of the National Flood Insurance
Program. The existing maximum CMP for a violation under the Flood
Disaster Protection Act of 1973 is $2,000.\8\
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\6\ 42 U.S.C. 4012a.
\7\ Pub. L. 103-325, title V, 108 Stat. 2160, 2255-87 (September
23, 1994).
\8\ Pub. L. 112-141, 126 Stat. 405 (July 6, 2012).
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[[Page 32634]]
C. Federal Civil Penalties Inflation Adjustment Act Improvements Act of
2015
1. In General
The 2015 Act requires all Federal agencies with authority to issue
CMPs to make inflation-based adjustments to all CMPs within their
jurisdictions no later than July 1, 2016. The 2015 Act also requires
every Federal agency to adjust the CMPs yearly, starting January 15,
2017.
Under Section 4(b) of the 1990 Act, as amended, for the first
adjustment made in accordance with the 2015 Act amendments, Federal
agencies are to make a ``catch up'' adjustment to the civil monetary
penalties through an IFR, with the adjustment taking effect no later
than August 1, 2016.\9\ Subsequent adjustments are to be made yearly
thereafter, no later than January 15. Section 6 of the 1990 Act, as
amended, states that any increase to a civil monetary penalty under
this Act applies only to civil monetary penalties, including those
whose associated violation predated such increase, which are assessed
after the date the increase takes effect.
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\9\ Pub. L. 114-74, sec. 701(b)(1).
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Section 5(b) of the 1990 Act, as amended, defines the term ``cost-
of-living adjustment'' as the percentage (if any) for each civil
monetary penalty by which (1) the Consumer Price Index (CPI) for the
month of October of the calendar year preceding the adjustment, exceeds
(2) the CPI for the month of October 1 year before the month of October
referred to in (1) of the calendar year in which the amount of such
civil monetary penalty was last set or adjusted pursuant to law.\10\
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\10\ The CPI is published by the Department of Labor, Bureau of
Statistics, and is available at its Web site: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
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The ``catch-up'' adjustment under the 2015 Act amendments requires
Federal agencies to use the cost-of-living adjustment calculated by
determining the percentage change (if any) for each civil monetary
penalty by which the CPI for the month of October 2015 exceeds the CPI
for the month of October during the calendar year in which the CMP was
created or last adjusted for any reason other than pursuant to the 1996
Act. Several adjustments have been made since the Farm Credit Act
established the CMP maximums. Those maximums are to be disregarded for
purposes of the 2015 Act amendment initial ``catch-up'' adjustment
calculation. However, agencies are limited to a 150-percent increase in
CMPs, based upon the CMP in effect on November 2, 2015. The 150-percent
limitation is on the amount of the increase; therefore, the adjusted
penalty level(s) will be up to 250 percent of the level(s) in effect on
November 2, 2015.\11\
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\11\ OMB Circular M-16-06, Implementation of the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015.
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The increase for each CMP adjusted for inflation must be rounded
using a method prescribed by section 5(a) of the 1990 Act, as amended,
by the 2015 Act.\12\
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\12\ Per section 5(a)(3) of the 2015 Act, any increase
determined under the subsection shall be rounded to the nearest $1.
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2. Other Adjustments
If a civil monetary penalty is subject to a cost-of-living
adjustment under the 1990 Act, as amended, but is adjusted to an amount
greater than the amount of the adjustment required under the Act within
the 12 months preceding a required cost-of-living adjustment, the
agency is not required to make the cost-of-living adjustment to that
CMP in that calendar year.\13\
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\13\ Per section 4(d) of the 1990 Act, as amended.
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III. Catch-Up Adjustments
A. Mathematical Calculations of Catch-Up Adjustments
The adjustment requirement affects two provisions of section
5.32(a) of the Farm Credit Act. For the ``catch-up'' adjustments to the
CMPs set forth by the Farm Credit Act, the calculation required by the
2015 Act is based on the percentage by which the CPI for October 2015
exceeds the CPIs for October 1985 and October 1988, respectively. The
maximum CMPs for violations under section 5.32(a) were established in
1985 and 1988. The White House Office of Management and Budget (OMB)
set forth guidance, as required by the 2015 Act,\14\ with a grid of
multipliers for calculating the new CMP values.\15\ The OMB multiplier
for the 1985 CMPs is 2.18802. The OMB multiplier for the 1988 CMPs is
1.97869.
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\14\ 28 U.S.C. 2461 note, section 7(a).
\15\ OMB Circular M-16-06, Implementation of the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015.
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The adjustment also affects the CMPs set by the Flood Disaster
Protection Act of 1973, as amended. For the ``catch-up'' adjustments to
the CMP set forth by the Flood Disaster Protection Act of 1973, as
amended, the calculation required by the 2015 Act is based on the
percentage by which the CPI for October 2012 exceeds the CPI for
October 2015. The maximum CMPs for violations were created in 2012 by
the Biggert-Waters Act, which amended the Flood Disaster Protection Act
of 1973. The multiplier for the 2012 CMPs is 1.02819.
If any of the CMP increases exceed 150 percent of the maximums in
effect as of November 2, 2015, the new maximum CMPs will reflect a
simple 150-percent increase over the November 2, 2015, CMP
maximums.\16\
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\16\ The 150-percent limitation is on the amount of the
increase; therefore, the adjusted penalty level(s) will be up to 250
percent of the level(s) in effect on November 2, 2015. OMB Circular,
M-16-06.
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1. New Penalty Amount in Sec. 622.61(a)(1)
While the inflation-adjusted CMP currently in effect for violations
of a final order occurring on or after November 2, 2015, is a maximum
daily amount of $1,100,\17\ the 2015 Act amendments require FCA to use
the maximum daily amount of $1,000 to compute the catch-up adjustment
as this was the amount in effect in 1985. Multiplying the $1,000 CMP by
the 1985 OMB multiplier, 2.18802, yields a total of $2,188.02. When
that number is rounded as required by section 5(a) of the 1990 Act, as
amended the inflation-adjusted maximum increases to $2,188. The CMP in
effect on November 2, 2015 was $1,100. Increasing the 2015 CMP maximum
of $1,100 by 150 percent yields a CMP of $2,750. Since the new CMP
maximum calculated with the 1985 OMB multiplier is less than the 150-
percent maximum increase established by the 2015 Act amendments, the
new CMP maximum is $2,188.
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\17\ 12 CFR 622.61(a)(1).
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2. New Penalty Amount in Sec. 622.61(a)(2)
While the inflation-adjusted CMP currently in effect for violations
of the Farm Credit Act or regulations issued under the Farm Credit Act
occurring on or after November 2, 2015, is a maximum daily amount of
$750,\18\ the 2015 Act amendments require FCA to use the maximum daily
amount of $500 to compute the catch-up adjustment as this was the
amount in effect in 1988. Multiplying the $500 CMP maximum by the 1988
OMB multiplier, 1.97869, yields a total of $989.35. When that number is
rounded as required by section 5(a) of the 1990 Act, as amended the
inflation-adjusted maximum increases to $989. The CMP in effect on
November 2, 2015 was $750. Increasing the 2015 CMP of $750 by 150
percent yields a total of $1,875. Since the new CMP maximum calculated
with the 1988 OMB multiplier is less than the 150-percent maximum
increase established by the 2015 Act
[[Page 32635]]
amendments, the new CMP maximum is $989.
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\18\ 12 CFR 622.61(a)(2).
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3. New Penalty Amounts for Flood Insurance Violations Under Sec.
622.61(b)
The existing maximum CMP for a pattern or practice of flood
insurance violations pursuant to 42 U.S.C. 4012a(f)(5) is $2,000.
Multiplying $2,000 by the 2012 OMB multiplier, 1.02819, yields a total
of $2,056.38. When that number is rounded as required by section 5(a)
of the 1990 Act, as amended, the new maximum assessment of the CMP for
violating 42 U.S.C. 4012a(f)(5) is $2,056. The CMP in effect on
November 2, 2015 was $2,000. Increasing the 2015 CMP of $2,000 by 150
percent yields $5,000. Since the new CMP maximum calculated with the
OMB multiplier is lower than the 150-percent maximum increase
established by the 2015 Act amendments, the new CMP maximum is $2,056.
IV. Notice and Comment Not Required by Administrative Procedure Act
The 1990 Act, as amended, gives Federal agencies no discretion in
the adjustment of CMPs for the rate of inflation. Further, these
revisions are ministerial, technical, and noncontroversial. For these
reasons, the FCA finds good cause to determine that public notice and
an opportunity to comment are impracticable, unnecessary, and contrary
to the public interest pursuant to the Administrative Procedure Act, 5
U.S.C. 553(b)(B), and adopts this rule in final form.
V. Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.), the FCA hereby certifies that this final rule will
not have a significant economic impact on a substantial number of small
entities. Each of the banks in the System, considered together with its
affiliated associations, has assets and annual income in excess of the
amounts that would qualify them as small entities. Therefore, System
institutions are not ``small entities'' as defined in the Regulatory
Flexibility Act.
List of Subjects in 12 CFR Part 622
Administrative practice and procedure, Crime, Investigations,
Penalties.
For the reasons stated in the preamble, part 622 of chapter VI,
title 12 of the Code of Federal Regulations is amended to read as
follows:
PART 622--RULES OF PRACTICE AND PROCEDURE
0
1. The authority citation for part 622 continues to read as follows:
Authority: Secs. 5.9, 5.10, 5.17, 5.25-5.37 of the Farm Credit
Act (12 U.S.C. 2243, 2244, 2252, 2261-2273); 28 U.S.C. 2461 note;
and 42 U.S.C. 4012a(f).
0
2. Revise Sec. 622.61 to read as follows:
Sec. 622.61 Adjustment of civil money penalties by the rate of
inflation under the Federal Civil Penalties Inflation Adjustment Act of
1990, as amended.
(a) The maximum amount of each civil money penalty within FCA's
jurisdiction is adjusted in accordance with the Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended (28 U.S.C. 2461 note), as
follows:
(1) Amount of civil money penalty imposed under section 5.32 of the
Act for violation of a final order issued under section 5.25 or 5.26 of
the Act: The maximum daily amount is $2,188 for violations that occur
on or after August 1, 2016.
(2) Amount of civil money penalty for violation of the Act or
regulations: The maximum daily amount is $989 for each violation that
occurs on or after August 1, 2016.
(b) The maximum civil money penalty amount assessed under 42 U.S.C.
4012a(f) is: $385 for each violation that occurs on or after January
16, 2009, but before July 1, 2013, with total penalties under such
statute not to exceed $120,000 for any single institution during any
calendar year; $2,000 for each violation that occurs on or after July
1, 2013, but before August 1, 2016, with no cap on the total amount of
penalties that can be assessed against any single institution during
any calendar year; and $2,056 for each violation that occurs on or
after August 1, 2016, with no cap on the total amount of penalties that
can be assessed against any single institution during any calendar
year.
Dated: May 16, 2016.
Dale L. Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2016-11862 Filed 5-23-16; 8:45 am]
BILLING CODE 6705-01-P