Inflation Adjustment of Civil Monetary Penalties, 42552-42554 [2016-15569]
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42552
Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Rules and Regulations
§ Penalties.
*
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(b) A fine of up to $145,023 may be
assessed against the vessel owner for
each day in which such vessel has
engaged in fishing (as such term is
defined in section 3 of the MagnusonStevens Fishery Conservation and
Management Act (16 U.S.C. 1802)
within the exclusive economic zone of
the United States; and
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Dated: June 27, 2016.
By Order of the Maritime Administrator.
Gabriel Chavez,
Secretary, Maritime Administration.
[FR Doc. 2016–15566 Filed 6–29–16; 8:45 am]
BILLING CODE 4910–81–P
FEDERAL MARITIME COMMISSION
46 CFR Part 506
[Docket No. 16–13]
RIN 3072–AC63
Inflation Adjustment of Civil Monetary
Penalties
Federal Maritime Commission.
Interim final rule.
AGENCY:
ACTION:
This rule implements the
Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (2015 Act) (Sec. 701 of Pub. L. 11–
74). The rule adjusts the maximum
amount of each statutory civil penalty
subject to Federal Maritime Commission
(Commission) jurisdiction for inflation,
in accordance with the requirements of
that Act. The 2015 Act requires that
agencies publish a catch-up adjustment
in the penalties in an interim rule by
July 1, 2016, and that agencies adjust
penalties yearly thereafter.
DATES: This rule is effective on August
1, 2016.
FOR FURTHER INFORMATION CONTACT:
Tyler Wood, General Counsel, Federal
Maritime Commission, 800 North
SUMMARY:
Non-inflationadjusted
penalty
U.S.C. Section
srobinson on DSK5SPTVN1PROD with RULES
46 U.S.C. 42304 ......................................
1,000,000
1 Increased CMPs are applicable only to violations
occurring after the increase takes effect.
2 61 FR 52704 (Oct. 8, 1996).
3 65 FR 49741 (Aug. 15, 2000); 74 FR 38114 (July
28, 2009); 79 FR 37662 (July 2, 2014).
4 5(b)(2); Memorandum for the Heads of Executive
Departments and Agencies for the Implementation
of the Federal Civil Penalties Inflation Adjustment
Act, M–16–06, at 4, February 24, 2016 (OMB
Guidance Memo).
VerDate Sep<11>2014
20:57 Jun 29, 2016
Capitol Street NW., Room 1018,
Washington, DC 20573, (202) 523–5740.
SUPPLEMENTARY INFORMATION: This rule
implements the 2015 Act, which
became effective on November 2, 2015.
The 2015 Act further amends the
Federal Civil Penalties Inflation
Adjustment Act of 1990 (FCPIAA),
Public Law 101–410, 104 Stat. 890
(codified as amended at 28 U.S.C. 2461
note), in order to improve the
effectiveness of civil monetary penalties
and to maintain their deterrent effect.
The Debt Collection Improvement Act of
1996 (DCIA), Public Law 104–134, Title
III, 31001(s)(1), 110 Stat. 1321–373,
originally amended the FCPIAA and
required the head of each executive
agency to adopt regulations that adjust
the maximum civil monetary penalties
(CMPs) assessable under its agency’s
jurisdiction at least every four years to
ensure that they continued to maintain
their deterrent value.1 In accordance
with the DCIA, the Commission
established Part 506 in 1996 and
adjusted its penalties.2 The Commission
further adjusted its civil penalty
amounts in 2000, 2009, and 2014.3
The 2015 Act requires that agencies
publish a catch-up adjustment in the
penalties in an interim rule by July 1,
2016, to become effective no later than
August 1, 2016. Following the catch-up
adjustment, the 2015 Act requires
agencies to adjust CMPs under their
jurisdiction annually beginning in 2017
based on changes in the consumer price
index using data from October in the
previous calendar year.
In order to catch-up CMPs, the 2015
Act requires agencies to identify the
year the civil penalty was established or
last adjusted by statute or regulation
other than pursuant to the FCPIAA.4
Catch-up adjustments are based on the
percent change between the Consumer
Price Index for all Urban Consumers
(CPI–U) 5 for the month of October of
the year in which the CMP was
established or adjusted (other than
through Inflation Adjustment Act
adjustments), and the October 2015
Jkt 238001
Year
Multiplier
1988
1.97869
5 3(3).
6 Id.
7 Id. The amount of the catch-up penalty cannot
exceed 250% of the amount that was effective on
November 2, 2015 which would be $112,500 for a
violation of Section 13.
8 The 150 percent limitation in the 2015 Act is on
the amount of the increase. The actual adjusted
penalty levels, however are capped at 250 percent
PO 00000
Frm 00100
Fmt 4700
Sfmt 4700
CPI–U. In accordance with the 2015 Act,
the Office of Management and Budget
(OMB) has issued guidance to agencies
on implementing the catch-up
adjustments and provided multipliers
for agencies to use depending on the
year a civil penalty was established or
adjusted (other than inflation
adjustments). Agencies look at the
multiplier corresponding to that year in
a table provided by OMB.6 Next,
agencies multiply the amount of the
penalty (not adjusted for inflation) by
the amount in the table.7 Under the
2015 Act, however, the catch-up
increase cannot exceed 150% of the
amount that was effective on November
2, 2015.8
For example, Section 13 of the
Shipping Act of 1984 (1984 Act), 46
U.S.C. 41107, imposes a maximum
$45,000 penalty for a knowing and
willful violation of the 1984 Act.9 The
penalty was established in 1984 for an
amount of $25,000 and has only been
adjusted pursuant to the FCPIAA since
then. As a result, the Commission
multiplied $25,000 by 2.25867 (the
multiplier provided by OMB for 1984)
to obtain an adjusted CMP of $55,467.
The last time the Commission
adjusted its CMP not pursuant to
FCPIAA varies depending on the
penalty.10 Accordingly, the Commission
has looked at the multiplier in the table
OMB provided to determine the
appropriate adjustment for its civil
penalties. In order to provide some
clarity, the table below shows the noninflation-adjusted penalty, the year it
was established or adjusted (other than
under the FCPIAA), the multiplier
provided by OMB, and the result of
applying the multiplier (rounded to the
nearest dollar per the statute). The table
also shows 250% of the amount of the
penalty in November 2015 (2015 Act
Cap). The new adjusted maximum
penalty is the lesser of (1) the amount
using the multiplier and (2) 250% of the
amount of the penalty in November
2015.
Multiplier
result
1,978,690
2015 Act cap
(250% of 11/2/
15 Amount)
4,000,000
New adjusted
maximum
penalty
amount
1,978,690
of the levels in effect on November 2, 2015. M–16–
06, OMB guidance memo, at 3; also at 5(b)(2)(C).
9 The Commission last adjusted its civil penalties
pursuant to FCPIAA in 2014.
10 Current CMPs at the Commission have been
effective since July 11, 2014. 79 FR 37662 (July 2,
2014).
E:\FR\FM\30JNR1.SGM
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42553
Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Rules and Regulations
Non-inflationadjusted
penalty
U.S.C. Section
46
46
46
46
46
46
46
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
U.S.C.
41107(a) ..................................
41107(b) ..................................
41108(b) ..................................
42104 ......................................
42106 ......................................
42108 ......................................
44102 ......................................
25,000
5,000
50,000
5,000
1,000,000
50,000
5,000
200
5,000
200
5,000
5,000
46 U.S.C. 44103 ......................................
srobinson on DSK5SPTVN1PROD with RULES
31 U.S.C. 3802(a)(1) ...............................
31 U.S.C. 3802(a)(2) ...............................
The new formula may result in a
lower penalty than the current penalty.
The catch-up penalty for 46 U.S.C.
42104 of $8,908, is actually lower than
the current penalty of $9,000. This
results from two things: (1) the lack of
a specific penalty for a violation of 46
U.S.C. 42104 until 1990; and (2) using
a multiplier based on the year the
penalty was established or modified that
excludes adjustments due to the
FCPIAA. The later a penalty was
established that excludes adjustments
due to the FCPIAA, the smaller the
multiplier. In this example, the latest
penalty amount that excludes
adjustments due to the FCPIAA for
violating 46 U.S.C. 42104 is $5,000,
established in 1990. The $5,000 penalty,
therefore, is multiplied by 1.78156
percent to get the adjusted penalty of
$8,908.
In contrast, the oldest non-FCPIAA
penalty for violating 46 U.S.C. 44103
was established in 1966 in the amount
of $5,000. Accordingly, using the
required table, such amount is
multiplied by 7.22912 percent to get the
adjusted penalty of $22,500.
The 2015 Act also requires that
agencies round up any increases in civil
monetary penalties by a dollar
regardless of the amount of the penalty,
which differs from the prior rounding
system that was based on the amount of
a penalty. The penalty in 46 U.S.C.
42104 was between $1,000 and $10,000,
and increases were therefore rounded to
the nearest $1,000 (often the next
highest $1,000), resulting in higher
adjusted amounts.11
The Commission is also making a
number of changes to other sections in
part 506 to reflect the amendments
made by the 2015 Act, including the
frequency and calculation of future
increases, how increases are rounded,
and when they apply.
11 See
46 CFR 506.4.
VerDate Sep<11>2014
20:00 Jun 29, 2016
Jkt 238001
Year
Multiplier
1984
1984
1984
1990
1990
1990
1966
2.25867
2.25867
2.25867
1.78156
1.78156
1.78156
7.22912
1966
7.22912
1986
1986
2.15628
2.15628
This interim final rule is issued
without prior public notice or
opportunity for public comment. Under
the Administrative Procedure Act
(APA), 5 U.S.C. 553(b)(B), a final rule
may be issued without notice and
comment if the agency for good cause
finds (and incorporates the finding and
a brief statement of reasons therefore in
the rules issued) that notice and public
comment thereon are impracticable,
unnecessary, or contrary to the public
interest. In this instance, the
Commission finds, for good cause, that
solicitation of public comment on this
final rule is unnecessary and
impractical.
Specifically, Congress has mandated
that the agency make the catch-up
inflation adjustments through an
interim final rule, and agencies are not
required to conduct notice and
comment prior to promulgation. The
Commission, under the FCPIAA as
amended by the 2015 Act, is required to
make the adjustment to the civil
monetary penalties according to a
formula specified in the statute. The
regulation requires ministerial,
technical computations that are
noncontroversial.
The Regulatory Flexibility Act (RFA),
as amended by the Small Business
Regulatory Enforcement Fairness Act of
1996, 5 U.S.C. 801 et seq., generally
requires an agency to prepare a
regulatory flexibility analysis of any rule
subject to notice and comment
rulemaking requirements, unless the
agency certifies that the rule will not
have a significant economic impact on
a substantial number of small entities.
Because the Commission has
determined that notice and comment are
not required under the APA for this
rulemaking, the requirements of the
RFA do not apply and no regulatory
flexibility analysis was prepared.
The rule does not contain any
collection of information requirements
as defined by the Paperwork Reduction
PO 00000
Frm 00101
Fmt 4700
Sfmt 4700
2015 Act cap
(250% of 11/2/
15 Amount)
Multiplier
result
56,467
11,293
112,934
8,908
1,781,560
89,078
36,146
1,446
36,146
1,446
10,781
10,781
New adjusted
maximum
penalty
amount
112,500
22,500
200,000
22,500
4,000,000
200,000
22,500
750
22,500
750
22,500
22,500
56,467
11,293
112,934
8,908
1,781,560
89,078
22,500
750
22,500
750
10,781
10,781
Act of 1995, as amended. Therefore,
Office of Management and Budget
review is not required.
This regulatory action is not a major
rule as defined under 5 U.S.C. 804(2).
List of Subjects in 46 CFR Part 506
Administrative practice and
procedure, Penalties.
For the reasons stated in the
preamble, Part 506 of title 46 of the
Code of Federal Regulations is amended
as follows:
PART 506—CIVIL MONETARY
PENALTY INFLATION ADJUSTMENT
1. The authority citation for part 506
continues to read as follows:
■
Authority: 28 U.S.C. 2461.
■
2. Revise § 506.1 to read as follows:
§ 506.1
Scope and purpose.
The purpose of this part is to establish
a mechanism for the regular adjustment
for inflation of monetary penalties and
to adjust such penalties in conformity
with the Federal Civil Penalties
Inflation Adjustment Act of 1990 (28
U.S.C. 2641 note) as originally amended
by the Debt Collection Improvement Act
of 1996, Public Law 104–134, April 26,
1996, and currently amended by the
Federal Civil Penalties Inflation Act
Adjustment Improvements Act of 2015,
Public Law 114–74, in order to maintain
the deterrent effect of civil monetary
penalties and to promote compliance
with the law.
3. In § 506.3, revise the introductory
text to read as follows:
■
§ 506.3 Civil monetary penalty inflation
adjustment.
The Commission shall, not later than
August 1, 2016, and at least every year
thereafter—
*
*
*
*
*
■
4. Revise § 506.4 to read as follows:
E:\FR\FM\30JNR1.SGM
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42554
Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Rules and Regulations
§ 506.4 Cost of living adjustments of civil
monetary penalties.
(a) The inflation adjustment under
§ 506.3 will initially be determined by
increasing the maximum civil monetary
penalty for each civil monetary penalty
by the initial cost-of-living adjustment.
The inflation adjustment will
subsequently be determined by
increasing the maximum civil monetary
penalty for each civil monetary penalty
by the cost-of-living adjustment. Any
increase determined under this section
shall be rounded to the nearest multiple
of $1.
(b) Inflation adjustment. For purposes
of paragraph (a) of this section, the term
‘cost-of-living adjustment’ means the
percentage (if any) for each civil
monetary penalty by which the
Consumer Price Index for the month of
October preceding the adjustment
exceeds the Consumer Price Index for
the month of October 1 year before the
month of October preceding the
adjustment.
(c) Initial adjustment. For purposes of
paragraph (a) of this section, the term
‘initial cost-of-living-adjustment’ means
the percentage (if any) for each civil
monetary penalty by which the
Consumer Price Index for the month of
October, 2015 exceeds the Consumer
Price Index for the month of October of
the calendar year during which the
amount of such civil monetary penalty
was established or adjusted under a
provision of law of civil monetary
penalty. The initial cost-of-living
adjustment may not exceed 150 percent
of such penalty on November 2, 2015,
the date of the enactment of the Federal
Civil Penalties Inflation Act Adjustment
Improvements Act of 2015.
(d) Inflation adjustment. Maximum
Civil Monetary Penalties within the
jurisdiction of the Federal Maritime
Commission are adjusted for inflation as
follows:
Maximum
penalty
amount prior
to August 1,
2016
United States Code Citation
Civil monetary penalty description
46 U.S.C. 42304 ...........................................................
Adverse impact on U.S. carriers by foreign shipping
practices.
Knowing and Willful violation/Shipping Act of 1984, or
Commission regulation or order.
Violation of Shipping Act of 1984, Commission regulation or order, not knowing and willful.
Operating in foreign commerce after tariff suspension
Failure to provide required reports, etc./Merchant Marine Act of 1920.
Adverse shipping conditions/Merchant Marine Act of
1920.
Operating after tariff or service contract suspension/
Merchant Marine Act of 1920.
Failure to establish financial responsibility for non-performance of transportation.
Failure to establish financial responsibility for death or
injury.
Program Fraud Civil Remedies Act/makes false claim
Program Fraud Civil Remedies Act/giving false statement.
46 U.S.C. 41107(a) ......................................................
46 U.S.C. 41107(b) ......................................................
46 U.S.C. 41108(b) ......................................................
46 U.S.C. 42104 ...........................................................
46 U.S.C. 42106 ...........................................................
46 U.S.C. 42108 ...........................................................
46 U.S.C. 44102 ...........................................................
46 U.S.C. 44103 ...........................................................
31 U.S.C. 3802(a)(1) ....................................................
31 U.S.C. 3802(a)(2) ....................................................
■
5. Revise § 506.5 to read as follows:
FEDERAL COMMUNICATIONS
COMMISSION
§ 506.5 Application of increase to
violations.
47 CFR Part 1
Any adjustment in a civil monetary
penalty under this part shall apply only
to civil monetary penalties, including
those whose associated violation
predated such increase, which are
assessed after the date the adjustment
takes effect.
By the Commission.
Rachel E. Dickon,
Assistant Secretary.
Adjustment of Civil Monetary Penalties
To Reflect Inflation
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
The Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015 (the 2015 Inflation
Adjustment Act) requires the Federal
Communications Commission to amend
its forfeiture penalty rules for inflation.
DATES: This rule is effective August 1,
2016.
SUMMARY:
[FR Doc. 2016–15569 Filed 6–29–16; 8:45 am]
srobinson on DSK5SPTVN1PROD with RULES
[DA 16–644]
BILLING CODE 6731–AA–P
FOR FURTHER INFORMATION CONTACT:
Donna Cyrus, Enforcement Bureau, 202–
418–7325.
VerDate Sep<11>2014
20:00 Jun 29, 2016
Jkt 238001
PO 00000
Frm 00102
Fmt 4700
Sfmt 4700
New adjusted
maximum
penalty
amount as of
August 1,
2016
1,600,000
1,978,690
45,000
56,467
9,000
11,293
80,000
9,000
112,934
8,908
1,600,000
1,781,560
80,000
89,078
9,000
300
9,000
300
9,000
9,000
22,500
750
22,500
750
10,781
10,781
On June 9,
2016, the Enforcement Bureau of the
Federal Communications Commission
adopted and released an order on
delegated authority, DA 16–644, which
adjusts the Commission’s forfeiture
penalties for inflation. On November 2,
2015, the President signed into law the
Bipartisan Budget Act of 2015, which
included, as Section 701 thereto, the
2015 Inflation Adjustment Act, which
amended the Federal Civil Penalties
Inflation Adjustment Act of 1990 (Pub.
L. 101–410), to improve the
effectiveness of civil monetary penalties
and maintain their deterrent effect.
Under the act, federal agencies,
including the Federal Communications
Commission, must issue an interim final
rulemaking and publish interim final
rules by July 1, 2016, which will take
effect by August 1, 2016. According to
the 2015 Inflation Adjustment Act, the
initial inflation adjustment will be the
SUPPLEMENTARY INFORMATION:
E:\FR\FM\30JNR1.SGM
30JNR1
]]>Agencies
[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Rules and Regulations]
[Pages 42552-42554]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15569]
=======================================================================
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FEDERAL MARITIME COMMISSION
46 CFR Part 506
[Docket No. 16-13]
RIN 3072-AC63
Inflation Adjustment of Civil Monetary Penalties
AGENCY: Federal Maritime Commission.
ACTION: Interim final rule.
-----------------------------------------------------------------------
SUMMARY: This rule implements the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015 (2015 Act) (Sec. 701 of Pub. L.
11-74). The rule adjusts the maximum amount of each statutory civil
penalty subject to Federal Maritime Commission (Commission)
jurisdiction for inflation, in accordance with the requirements of that
Act. The 2015 Act requires that agencies publish a catch-up adjustment
in the penalties in an interim rule by July 1, 2016, and that agencies
adjust penalties yearly thereafter.
DATES: This rule is effective on August 1, 2016.
FOR FURTHER INFORMATION CONTACT: Tyler Wood, General Counsel, Federal
Maritime Commission, 800 North Capitol Street NW., Room 1018,
Washington, DC 20573, (202) 523-5740.
SUPPLEMENTARY INFORMATION: This rule implements the 2015 Act, which
became effective on November 2, 2015. The 2015 Act further amends the
Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA),
Public Law 101-410, 104 Stat. 890 (codified as amended at 28 U.S.C.
2461 note), in order to improve the effectiveness of civil monetary
penalties and to maintain their deterrent effect. The Debt Collection
Improvement Act of 1996 (DCIA), Public Law 104-134, Title III,
31001(s)(1), 110 Stat. 1321-373, originally amended the FCPIAA and
required the head of each executive agency to adopt regulations that
adjust the maximum civil monetary penalties (CMPs) assessable under its
agency's jurisdiction at least every four years to ensure that they
continued to maintain their deterrent value.\1\ In accordance with the
DCIA, the Commission established Part 506 in 1996 and adjusted its
penalties.\2\ The Commission further adjusted its civil penalty amounts
in 2000, 2009, and 2014.\3\
---------------------------------------------------------------------------
\1\ Increased CMPs are applicable only to violations occurring
after the increase takes effect.
\2\ 61 FR 52704 (Oct. 8, 1996).
\3\ 65 FR 49741 (Aug. 15, 2000); 74 FR 38114 (July 28, 2009); 79
FR 37662 (July 2, 2014).
---------------------------------------------------------------------------
The 2015 Act requires that agencies publish a catch-up adjustment
in the penalties in an interim rule by July 1, 2016, to become
effective no later than August 1, 2016. Following the catch-up
adjustment, the 2015 Act requires agencies to adjust CMPs under their
jurisdiction annually beginning in 2017 based on changes in the
consumer price index using data from October in the previous calendar
year.
In order to catch-up CMPs, the 2015 Act requires agencies to
identify the year the civil penalty was established or last adjusted by
statute or regulation other than pursuant to the FCPIAA.\4\ Catch-up
adjustments are based on the percent change between the Consumer Price
Index for all Urban Consumers (CPI-U) \5\ for the month of October of
the year in which the CMP was established or adjusted (other than
through Inflation Adjustment Act adjustments), and the October 2015
CPI-U. In accordance with the 2015 Act, the Office of Management and
Budget (OMB) has issued guidance to agencies on implementing the catch-
up adjustments and provided multipliers for agencies to use depending
on the year a civil penalty was established or adjusted (other than
inflation adjustments). Agencies look at the multiplier corresponding
to that year in a table provided by OMB.\6\ Next, agencies multiply the
amount of the penalty (not adjusted for inflation) by the amount in the
table.\7\ Under the 2015 Act, however, the catch-up increase cannot
exceed 150% of the amount that was effective on November 2, 2015.\8\
---------------------------------------------------------------------------
\4\ 5(b)(2); Memorandum for the Heads of Executive Departments
and Agencies for the Implementation of the Federal Civil Penalties
Inflation Adjustment Act, M-16-06, at 4, February 24, 2016 (OMB
Guidance Memo).
\5\ 3(3).
\6\ Id.
\7\ Id. The amount of the catch-up penalty cannot exceed 250% of
the amount that was effective on November 2, 2015 which would be
$112,500 for a violation of Section 13.
\8\ The 150 percent limitation in the 2015 Act is on the amount
of the increase. The actual adjusted penalty levels, however are
capped at 250 percent of the levels in effect on November 2, 2015.
M-16-06, OMB guidance memo, at 3; also at 5(b)(2)(C).
---------------------------------------------------------------------------
For example, Section 13 of the Shipping Act of 1984 (1984 Act), 46
U.S.C. 41107, imposes a maximum $45,000 penalty for a knowing and
willful violation of the 1984 Act.\9\ The penalty was established in
1984 for an amount of $25,000 and has only been adjusted pursuant to
the FCPIAA since then. As a result, the Commission multiplied $25,000
by 2.25867 (the multiplier provided by OMB for 1984) to obtain an
adjusted CMP of $55,467.
---------------------------------------------------------------------------
\9\ The Commission last adjusted its civil penalties pursuant to
FCPIAA in 2014.
---------------------------------------------------------------------------
The last time the Commission adjusted its CMP not pursuant to
FCPIAA varies depending on the penalty.\10\ Accordingly, the Commission
has looked at the multiplier in the table OMB provided to determine the
appropriate adjustment for its civil penalties. In order to provide
some clarity, the table below shows the non-inflation-adjusted penalty,
the year it was established or adjusted (other than under the FCPIAA),
the multiplier provided by OMB, and the result of applying the
multiplier (rounded to the nearest dollar per the statute). The table
also shows 250% of the amount of the penalty in November 2015 (2015 Act
Cap). The new adjusted maximum penalty is the lesser of (1) the amount
using the multiplier and (2) 250% of the amount of the penalty in
November 2015.
---------------------------------------------------------------------------
\10\ Current CMPs at the Commission have been effective since
July 11, 2014. 79 FR 37662 (July 2, 2014).
--------------------------------------------------------------------------------------------------------------------------------------------------------
New adjusted
Non-inflation- Multiplier 2015 Act cap maximum
U.S.C. Section adjusted Year Multiplier result (250% of 11/2/ penalty
penalty 15 Amount) amount
--------------------------------------------------------------------------------------------------------------------------------------------------------
46 U.S.C. 42304......................................... 1,000,000 1988 1.97869 1,978,690 4,000,000 1,978,690
[[Page 42553]]
46 U.S.C. 41107(a)...................................... 25,000 1984 2.25867 56,467 112,500 56,467
46 U.S.C. 41107(b)...................................... 5,000 1984 2.25867 11,293 22,500 11,293
46 U.S.C. 41108(b)...................................... 50,000 1984 2.25867 112,934 200,000 112,934
46 U.S.C. 42104......................................... 5,000 1990 1.78156 8,908 22,500 8,908
46 U.S.C. 42106......................................... 1,000,000 1990 1.78156 1,781,560 4,000,000 1,781,560
46 U.S.C. 42108......................................... 50,000 1990 1.78156 89,078 200,000 89,078
46 U.S.C. 44102......................................... 5,000 1966 7.22912 36,146 22,500 22,500
200 1,446 750 750
46 U.S.C. 44103......................................... 5,000 1966 7.22912 36,146 22,500 22,500
200 1,446 750 750
31 U.S.C. 3802(a)(1).................................... 5,000 1986 2.15628 10,781 22,500 10,781
31 U.S.C. 3802(a)(2).................................... 5,000 1986 2.15628 10,781 22,500 10,781
--------------------------------------------------------------------------------------------------------------------------------------------------------
The new formula may result in a lower penalty than the current
penalty. The catch-up penalty for 46 U.S.C. 42104 of $8,908, is
actually lower than the current penalty of $9,000. This results from
two things: (1) the lack of a specific penalty for a violation of 46
U.S.C. 42104 until 1990; and (2) using a multiplier based on the year
the penalty was established or modified that excludes adjustments due
to the FCPIAA. The later a penalty was established that excludes
adjustments due to the FCPIAA, the smaller the multiplier. In this
example, the latest penalty amount that excludes adjustments due to the
FCPIAA for violating 46 U.S.C. 42104 is $5,000, established in 1990.
The $5,000 penalty, therefore, is multiplied by 1.78156 percent to get
the adjusted penalty of $8,908.
In contrast, the oldest non-FCPIAA penalty for violating 46 U.S.C.
44103 was established in 1966 in the amount of $5,000. Accordingly,
using the required table, such amount is multiplied by 7.22912 percent
to get the adjusted penalty of $22,500.
The 2015 Act also requires that agencies round up any increases in
civil monetary penalties by a dollar regardless of the amount of the
penalty, which differs from the prior rounding system that was based on
the amount of a penalty. The penalty in 46 U.S.C. 42104 was between
$1,000 and $10,000, and increases were therefore rounded to the nearest
$1,000 (often the next highest $1,000), resulting in higher adjusted
amounts.\11\
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\11\ See 46 CFR 506.4.
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The Commission is also making a number of changes to other sections
in part 506 to reflect the amendments made by the 2015 Act, including
the frequency and calculation of future increases, how increases are
rounded, and when they apply.
This interim final rule is issued without prior public notice or
opportunity for public comment. Under the Administrative Procedure Act
(APA), 5 U.S.C. 553(b)(B), a final rule may be issued without notice
and comment if the agency for good cause finds (and incorporates the
finding and a brief statement of reasons therefore in the rules issued)
that notice and public comment thereon are impracticable, unnecessary,
or contrary to the public interest. In this instance, the Commission
finds, for good cause, that solicitation of public comment on this
final rule is unnecessary and impractical.
Specifically, Congress has mandated that the agency make the catch-
up inflation adjustments through an interim final rule, and agencies
are not required to conduct notice and comment prior to promulgation.
The Commission, under the FCPIAA as amended by the 2015 Act, is
required to make the adjustment to the civil monetary penalties
according to a formula specified in the statute. The regulation
requires ministerial, technical computations that are noncontroversial.
The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801 et
seq., generally requires an agency to prepare a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Because the Commission has determined that notice and comment are not
required under the APA for this rulemaking, the requirements of the RFA
do not apply and no regulatory flexibility analysis was prepared.
The rule does not contain any collection of information
requirements as defined by the Paperwork Reduction Act of 1995, as
amended. Therefore, Office of Management and Budget review is not
required.
This regulatory action is not a major rule as defined under 5
U.S.C. 804(2).
List of Subjects in 46 CFR Part 506
Administrative practice and procedure, Penalties.
For the reasons stated in the preamble, Part 506 of title 46 of the
Code of Federal Regulations is amended as follows:
PART 506--CIVIL MONETARY PENALTY INFLATION ADJUSTMENT
0
1. The authority citation for part 506 continues to read as follows:
Authority: 28 U.S.C. 2461.
0
2. Revise Sec. 506.1 to read as follows:
Sec. 506.1 Scope and purpose.
The purpose of this part is to establish a mechanism for the
regular adjustment for inflation of monetary penalties and to adjust
such penalties in conformity with the Federal Civil Penalties Inflation
Adjustment Act of 1990 (28 U.S.C. 2641 note) as originally amended by
the Debt Collection Improvement Act of 1996, Public Law 104-134, April
26, 1996, and currently amended by the Federal Civil Penalties
Inflation Act Adjustment Improvements Act of 2015, Public Law 114-74,
in order to maintain the deterrent effect of civil monetary penalties
and to promote compliance with the law.
0
3. In Sec. 506.3, revise the introductory text to read as follows:
Sec. 506.3 Civil monetary penalty inflation adjustment.
The Commission shall, not later than August 1, 2016, and at least
every year thereafter--
* * * * *
0
4. Revise Sec. 506.4 to read as follows:
[[Page 42554]]
Sec. 506.4 Cost of living adjustments of civil monetary penalties.
(a) The inflation adjustment under Sec. 506.3 will initially be
determined by increasing the maximum civil monetary penalty for each
civil monetary penalty by the initial cost-of-living adjustment. The
inflation adjustment will subsequently be determined by increasing the
maximum civil monetary penalty for each civil monetary penalty by the
cost-of-living adjustment. Any increase determined under this section
shall be rounded to the nearest multiple of $1.
(b) Inflation adjustment. For purposes of paragraph (a) of this
section, the term `cost-of-living adjustment' means the percentage (if
any) for each civil monetary penalty by which the Consumer Price Index
for the month of October preceding the adjustment exceeds the Consumer
Price Index for the month of October 1 year before the month of October
preceding the adjustment.
(c) Initial adjustment. For purposes of paragraph (a) of this
section, the term `initial cost-of-living-adjustment' means the
percentage (if any) for each civil monetary penalty by which the
Consumer Price Index for the month of October, 2015 exceeds the
Consumer Price Index for the month of October of the calendar year
during which the amount of such civil monetary penalty was established
or adjusted under a provision of law of civil monetary penalty. The
initial cost-of-living adjustment may not exceed 150 percent of such
penalty on November 2, 2015, the date of the enactment of the Federal
Civil Penalties Inflation Act Adjustment Improvements Act of 2015.
(d) Inflation adjustment. Maximum Civil Monetary Penalties within
the jurisdiction of the Federal Maritime Commission are adjusted for
inflation as follows:
----------------------------------------------------------------------------------------------------------------
New adjusted
Maximum maximum
United States Code Citation Civil monetary penalty description penalty amount penalty amount
prior to as of August
August 1, 2016 1, 2016
----------------------------------------------------------------------------------------------------------------
46 U.S.C. 42304............................ Adverse impact on U.S. carriers by 1,600,000 1,978,690
foreign shipping practices.
46 U.S.C. 41107(a)......................... Knowing and Willful violation/ 45,000 56,467
Shipping Act of 1984, or
Commission regulation or order.
46 U.S.C. 41107(b)......................... Violation of Shipping Act of 1984, 9,000 11,293
Commission regulation or order,
not knowing and willful.
46 U.S.C. 41108(b)......................... Operating in foreign commerce after 80,000 112,934
tariff suspension.
46 U.S.C. 42104............................ Failure to provide required 9,000 8,908
reports, etc./Merchant Marine Act
of 1920.
46 U.S.C. 42106............................ Adverse shipping conditions/ 1,600,000 1,781,560
Merchant Marine Act of 1920.
46 U.S.C. 42108............................ Operating after tariff or service 80,000 89,078
contract suspension/Merchant
Marine Act of 1920.
46 U.S.C. 44102............................ Failure to establish financial 9,000 22,500
responsibility for non-performance 300 750
of transportation.
46 U.S.C. 44103............................ Failure to establish financial 9,000 22,500
responsibility for death or injury. 300 750
31 U.S.C. 3802(a)(1)....................... Program Fraud Civil Remedies Act/ 9,000 10,781
makes false claim.
31 U.S.C. 3802(a)(2)....................... Program Fraud Civil Remedies Act/ 9,000 10,781
giving false statement.
----------------------------------------------------------------------------------------------------------------
0
5. Revise Sec. 506.5 to read as follows:
Sec. 506.5 Application of increase to violations.
Any adjustment in a civil monetary penalty under this part shall
apply only to civil monetary penalties, including those whose
associated violation predated such increase, which are assessed after
the date the adjustment takes effect.
By the Commission.
Rachel E. Dickon,
Assistant Secretary.
[FR Doc. 2016-15569 Filed 6-29-16; 8:45 am]
BILLING CODE 6731-AA-P
