Civil Monetary Penalties Annual Inflation Adjustments, 66596-66599 [2018-27801]

Download as PDF 66596 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Rules and Regulations (1) * * * (iv) A statement that indicates whether such expenditure was in support of, or in opposition to a candidate, together with the candidate’s name and office sought; if the expenditure meets the criteria set forth in 11 CFR 104.3(b)(3)(vii)(C), memo text must be used to indicate the states in which the communication is distributed, as prescribed in that section; * * * * * On behalf of the Commission. Dated: December 18, 2018. Caroline C. Hunter, Chair, Federal Election Commission. [FR Doc. 2018–27800 Filed 12–26–18; 8:45 am] BILLING CODE 6715–01–P FEDERAL ELECTION COMMISSION 11 CFR Part 111 [Notice 2018–18] Civil Monetary Penalties Annual Inflation Adjustments Federal Election Commission. Final rules. AGENCY: ACTION: As required by the Federal Civil Penalties Inflation Adjustment Act of 1990, the Federal Election Commission is adjusting for inflation the civil monetary penalties established under the Federal Election Campaign Act, the Presidential Election Campaign Fund Act, and the Presidential Primary Matching Payment Account Act. The civil monetary penalties being adjusted are those negotiated by the Commission or imposed by a court for certain statutory violations, and those imposed by the Commission for late filing of or failure to file certain reports required by the Federal Election Campaign Act. The adjusted civil monetary penalties are calculated according to a statutory formula and the adjusted amounts will apply to penalties assessed after the effective date of these rules. DATES: The final rules are effective on January 1, 2019. FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General Counsel, or Mr. Joseph P. Wenzinger, Attorney, Office of General Counsel, (202) 694–1650 or (800) 424–9530. SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation Adjustment Act of 1990 (the ‘‘Inflation Adjustment Act’’),1 as amended by the khammond on DSK30JT082PROD with RULES SUMMARY: 1 Public Law 101–410, 104 Stat. 890 (codified at 28 U.S.C. 2461 note), amended by Debt Collection Improvement Act of 1996, Public Law 104–134, sec. VerDate Sep<11>2014 16:19 Dec 26, 2018 Jkt 247001 Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the ‘‘2015 Act’’),2 requires federal agencies, including the Commission, to adjust for inflation the civil monetary penalties within their jurisdiction according to prescribed formulas. A civil monetary penalty is ‘‘any penalty, fine, or other sanction’’ that (1) ‘‘is for a specific monetary amount’’ or ‘‘has a maximum amount’’ under federal law; and (2) that a federal agency assesses or enforces ‘‘pursuant to an administrative proceeding or a civil action’’ in federal court.3 Under the Federal Election Campaign Act, 52 U.S.C. 30101–45 (‘‘FECA’’), the Commission may seek and assess civil monetary penalties for violations of FECA, the Presidential Election Campaign Fund Act, 26 U.S.C. 9001–13, and the Presidential Primary Matching Payment Account Act, 26 U.S.C. 9031–42. The Inflation Adjustment Act requires federal agencies to adjust their civil penalties annually, and the adjustments must take effect no later than January 15 of every year.4 Pursuant to guidance issued by the Office of Management and Budget,5 the Commission is now adjusting its civil monetary penalties for 2019.6 The Commission must adjust for inflation its civil monetary penalties ‘‘notwithstanding Section 553’’ of the Administrative Procedures Act (‘‘APA’’).7 Thus, the APA’s notice-andcomment and delayed effective date requirements in 5 U.S.C. 553(b)–(d) do not apply because Congress has specifically exempted agencies from these requirements.8 Furthermore, because the inflation adjustments made through these final rules are required by Congress and involve no Commission discretion or policy judgments, these rules do not need to be submitted to the Speaker of the House of Representatives or the 31001(s)(1), 110 Stat. 1321, 1321–373; Federal Reports Elimination Act of 1998, Public Law 105– 362, sec. 1301, 112 Stat. 3280. 2 Public Law 114–74, sec. 701, 129 Stat. 584, 599. 3 Inflation Adjustment Act sec. 3(2). 4 Inflation Adjustment Act sec. 4(a). 5 See Inflation Adjustment Act sec. 7(a) (requiring OMB to ‘‘issue guidance to agencies on implementing the inflation adjustments required under this Act’’); see also Memorandum from Mick Mulvaney, Director, Office of Management and Budget, to Heads of Executive Departments and Agencies, M–19–04 (Dec. 14, 2018), https:// www.whitehouse.gov/wp-content/uploads/2017/11/ m_19_04.pdf (‘‘OMB Memorandum’’). 6 Inflation Adjustment Act sec. 5. 7 Inflation Adjustment Act sec. 4(b)(2). 8 See, e.g., Asiana Airlines v. FAA, 134 F.3d 393, 396–99 (DC Cir. 1998) (finding APA ‘‘notice and comment’’ requirement not applicable where Congress clearly expressed intent to depart from normal APA procedures). PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 President of the Senate under the Congressional Review Act, 5 U.S.C. 801 et seq. Moreover, because the APA’s notice-and-comment procedures do not apply to these final rules, the Commission is not required to conduct a regulatory flexibility analysis under 5 U.S.C. 603 or 604. See 5 U.S.C. 601(2), 604(a). Nor is the Commission required to submit these revisions for congressional review under FECA. See 5 U.S.C. 30111(d)(1), (4) (providing for congressional review when Commission ‘‘prescribe[s]’’ a ‘‘rule of law’’). The new penalty amounts will apply to civil monetary penalties that are assessed after the date the increase takes effect, even if the associated violation predated the increase.9 Explanation and Justification The Inflation Adjustment Act requires the Commission to annually adjust its civil monetary penalties for inflation by applying a cost-of-living-adjustment (‘‘COLA’’) ratio.10 The COLA ratio is the percentage that the Consumer Price Index (‘‘CPI’’) 11 ‘‘for the month of October preceding the date of the adjustment’’ exceeds the CPI for October of the previous year.12 To calculate the adjusted penalty, the Commission must increase the most recent civil monetary penalty amount by the COLA ratio.13 According to the Office of Management and Budget, the COLA ratio for 2019 is 0.02522, or 2.522%; thus, to calculate the new penalties, the Commission must multiply the most recent civil monetary penalties in force by 1.02522.14 The Commission assesses two types of civil monetary penalties that must be adjusted for inflation. First are penalties that are either negotiated by the Commission or imposed by a court for violations of FECA, the Presidential Election Campaign Fund Act, or the Presidential Primary Matching Payment Account Act. These civil monetary penalties are set forth at 11 CFR 111.24. Second are the civil monetary penalties assessed through the Commission’s Administrative Fines Program for late filing or non-filing of certain reports required by FECA. See 52 U.S.C. 30109(a)(4)(C) (authorizing Administrative Fines Program), 30104(a) (requiring political committee treasurers 9 Inflation Adjustment Act sec. 6. COLA ratio must be applied to the most recent civil monetary penalties. Inflation Adjustment Act, sec. 4(a); see also OMB Memorandum at 2. 11 The Inflation Adjustment Act, sec. 3, uses the CPI ‘‘for all-urban consumers published by the Department of Labor.’’ 12 Inflation Adjustment Act, sec. 5(b)(1). 13 Inflation Adjustment Act, sec. 5(a), (b)(1). 14 OMB Memorandum at 1. 10 The E:\FR\FM\27DER1.SGM 27DER1 66597 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Rules and Regulations to report receipts and disbursements within certain time periods). The penalty schedules for these civil monetary penalties are set out at 11 CFR 111.43 and 111.44. 1. 11 CFR 111.24—Civil Penalties FECA establishes the civil monetary penalties for violations of FECA and the other statutes within the Commission’s jurisdiction. See 52 U.S.C. 30109(a)(5), (6), (12). Commission regulations in 11 CFR 111.24 provide the current inflation-adjusted amount for each such Most recent civil penalty Section 11 11 11 11 11 CFR CFR CFR CFR CFR civil monetary penalty. To calculate the adjusted civil monetary penalty, the Commission multiplies the most recent penalty amount by the COLA ratio and rounds that figure to the nearest dollar. The actual adjustment to each civil monetary penalty is shown in the chart below. 111.24(a)(1) ................................................................................................................... 111.24(a)(2)(i) ................................................................................................................ 111.24(a)(2)(ii) ............................................................................................................... 111.24(b) ........................................................................................................................ 111.24(b) ........................................................................................................................ 2. 11 CFR 111.43, 111.44 —Administrative Fines FECA authorizes the Commission to assess civil monetary penalties for violations of the reporting requirements of 52 U.S.C. 30104(a) according to the penalty schedules ‘‘established and published by the Commission.’’ 52 U.S.C. 30109(a)(4)(C)(i). The Commission has established two such schedules: The schedule in 11 CFR 111.43(a) applies to reports that are not election sensitive, and the schedule in 11 CFR 111.43(b) applies to reports that are election sensitive.15 Each schedule contains two columns of penalties, one for late-filed reports and one for nonfiled reports, with penalties based on the level of financial activity in the report and, if late-filed, its lateness.16 In addition, 11 CFR 111.43(c) establishes a civil monetary penalty for situations in which a committee fails to file a report and the Commission cannot calculate the relevant level of activity. Finally, 11 CFR 111.44 establishes a civil monetary penalty for failure to file timely reports of contributions received less than 20 days, but more than 48 hours, before an election. See 52 U.S.C. 30104(a)(6). To determine the adjusted civil monetary penalty amount for each level of activity, the Commission multiplies the most recent penalty amount by the COLA ratio and rounds that figure to the nearest dollar. The new civil monetary penalties are shown in the schedules in the rule text, below. List of Subjects in 11 CFR Part 111 Administrative practice and procedures, Elections, Law enforcement, Penalties. For the reasons set out in the preamble, the Federal Election COLA $19,446 41,484 68,027 5,817 14,543 1. The authority citation for part 111 continues to read as follows: ■ Authority: 52 U.S.C. 30102(i), 30109, 30107(a), 30111(a)(8); 28 U.S.C. 2461 note; 31 U.S.C. 3701, 3711, 3716–3719, and 3720A, as amended; 31 CFR parts 285 and 900–904. § 111.24 [Amended] 2. Section 111.24 is amended in the table below by, for each section indicated in the left column, removing the number indicated in the middle column, and adding in its place the number indicated in the right column as follows: ■ Remove khammond on DSK30JT082PROD with RULES § 111.43 What are the schedules of penalties? (a) The civil money penalty for all reports that are filed late or not filed, except election sensitive reports and $19,936 42,530 69,743 5,964 14,910 PART 111—COMPLIANCE PROCEDURE (52 U.S.C. 30109, 30107(a)) 111.24(a)(1) ............................................................................................................................................................. 111.24(a)(2)(i) .......................................................................................................................................................... 111.24(a)(2)(ii) ......................................................................................................................................................... 111.24(b) .................................................................................................................................................................. 111.24(b) .................................................................................................................................................................. 3. Section 111.43 is amended by revising paragraphs (a), (b), and (c) to read as follows: 1.02522 1.02522 1.02522 1.02522 1.02522 Commission amends subchapter A of chapter I of title 11 of the Code of Federal Regulations as follows: Section ■ New civil penalty $19,446 41,484 68,027 5,817 14,543 Add $19,936 42,530 69,743 5,964 14,910 pre-election reports under 11 CFR 104.5, shall be calculated in accordance with the following schedule of penalties: Table 1 to paragraph (a) If the level of activity in the report was: And the report was filed late, the civil money penalty is: Or the report was not filed, the civil money penalty is: $1–4,999.99 a .............................. [$35 + ($6 × Number of days late)] × [1 + (.25 × Number of previous violations)]. [$68 + ($6 × Number of days late)] × [1 + (.25 × Number of previous violations)]. [$146 + ($6 × Number of days late)] × [1 + (.25 × Number of previous violations)]. $341 × [1 + (.25 × Number of previous violations)]. $5,000–9,999.99 ......................... $10,000–24,999.99 ..................... 15 Election sensitive reports are certain reports due shortly before an election. See 11 CFR 111.43(d)(1). VerDate Sep<11>2014 16:19 Dec 26, 2018 Jkt 247001 $410 × [1 + (.25 × Number of previous violations)]. $684 × [1 + (.25 × Number of previous violations)]. 16 A report is considered to be ‘‘not filed’’ if it is never filed or is filed more than a certain number of days after its due date. See 11 CFR 111.43(e). PO 00000 Frm 00041 Fmt 4700 Sfmt 4700 E:\FR\FM\27DER1.SGM 27DER1 66598 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Rules and Regulations If the level of activity in the report was: And the report was filed late, the civil money penalty is: Or the report was not filed, the civil money penalty is: $25,000–49,999.99 ..................... [$290 + ($28 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$437 + ($110 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$581 + ($146 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$871 + ($182 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$1164 + ($217 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$1453 + ($254 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$2181 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$2908 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$3633 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$4360 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$5086 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$5813 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$6541 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$7267 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. × $1230 × [1 + (.25 × Number of previous violations)]. × $3925 × [1 + (.25 × Number of previous violations)]. × $5086 × [1 + (.25 × Number of previous violations)]. × $6541 × [1 + (.25 × Number of previous violations)]. × $7994 × [1 + (.25 × Number of previous violations)]. × $9446 × [1 + (.25 × Number of previous violations)]. × $11,627 × [1 + (.25 × Number of previous violations)]. × $13,080 × [1 + (.25 × Number of previous violations)]. × $13,806 × [1 + (.25 × Number of previous violations)]. × $14,535 × [1 + (.25 × Number of previous violations)]. × $15,260 × [1 + (.25 × Number of previous violations)]. × $15,987 × [1 + (.25 × Number of previous violations)]. × $16,713 × [1 + (.25 × Number of previous violations)]. × $17,440 × [1 + (.25 × Number of previous violations)]. $50,000–74,999.99 ..................... $75,000–99,999.99 ..................... $100,000–149,999.99 ................. $150,000–199,999.99 ................. $200,000–249,999.99 ................. $250,000–349,999.99 ................. $350,000–449,999.99 ................. $450,000–549,999.99 ................. $550,000–649,999.99 ................. $650,000–749,999.99 ................. $750,000–849,999.99 ................. $850,000–949,999.99 ................. $950,000 or over ........................ a The civil money penalty for a respondent who does not have any previous violations will not exceed the level of activity in the report. (b) The civil money penalty for election sensitive reports that are filed late or not filed shall be calculated in Table 1 to paragraph (b) If the level of activity in the report was: And the report was filed late, the civil money penalty is: Or the report was not filed, the civil money penalty is: $1–$4,999.99 a ............................ [$68 + ($13 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$137 + ($13 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$205 + ($13 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$437 + ($35 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$654 + ($110 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$871 + ($146 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$1308 + ($182 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$1744 + ($217 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$2181 + ($254 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$3270 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$4360 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$5450 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$6541 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$7630 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$8719 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. [$9810 + ($290 × Number of days late)] × [1 + (.25 Number of previous violations)]. × $684 × [1 + (.25 × Number of previous violations)]. × $820 × [1 + (.25 × Number of previous violations)]. × $1230 × [1 + (.25 × Number of previous violations)]. × $1913 × [1 + (.25 × Number of previous violations)]. × $4360 × [1 + (.25 × Number of previous violations)]. × $5813 × [1 + (.25 × Number of previous violations)]. × $7267 × [1 + (.25 × Number of previous violations)]. × $8719 × [1 + (.25 × Number of previous violations)]. × $10,901 × [1 + (.25 × Number of previous violations)]. × $13,080 × [1 + (.25 × Number of previous violations)]. × $14,535 × [1 + (.25 × Number of previous violations)]. × $15,987 × [1 + (.25 × Number of previous violations)]. × $17,440 × [1 + (.25 × Number of previous violations)]. × $18,895 × [1 + (.25 × Number of previous violations)]. × $20,347 × [1 + (.25 × Number of previous violations)]. × $21,799 × [1 + (.25 × Number of previous violations)]. $5,000–$9,999.99 ....................... $10,000–24,999.99 ..................... $25,000–49,999.99 ..................... $50,000–74,999.99 ..................... $75,000–99,999.99 ..................... $100,000–149,999.99 ................. $150,000–199,999.99 ................. $200,000–249,999.99 ................. $250,000–349,999.99 ................. $350,000–449,999.99 ................. $450,000–549,999.99 ................. khammond on DSK30JT082PROD with RULES accordance with the following schedule of penalties: $550,000–649,999.99 ................. $650,000–749,999.99 ................. $750,000–849,999.99 ................. $850,000–949,999.99 ................. VerDate Sep<11>2014 16:19 Dec 26, 2018 Jkt 247001 PO 00000 Frm 00042 Fmt 4700 Sfmt 4700 E:\FR\FM\27DER1.SGM 27DER1 66599 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Rules and Regulations If the level of activity in the report was: And the report was filed late, the civil money penalty is: Or the report was not filed, the civil money penalty is: $950,000 or over ........................ [$10,901 + ($290 × Number of days late)] × [1 + (.25 × Number of previous violations)]. $23,254 × [1 + (.25 × Number of previous violations)]. a The civil money penalty for a respondent who does not have any previous violations will not exceed the level of activity in the report. (c) If the respondent fails to file a required report and the Commission cannot calculate the level of activity under paragraph (d) of this section, then the civil money penalty shall be $7,994. * * * * * § 111.44 [Amended] 4. Amend § 111.44(a)(1) by removing ‘‘$142’’ and adding in its place ‘‘$146’’. ■ On behalf of the Commission. Dated: December 18, 2018. Caroline C. Hunter, Chair, Federal Election Commission. [FR Doc. 2018–27801 Filed 12–26–18; 8:45 am] BILLING CODE 6715–01–P DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Parts 19 and 109 Notification of Inflation Adjustments for Civil Money Penalties Office of the Comptroller of the Currency, Treasury. ACTION: Notification of Monetary Penalties 2019. AGENCY: The Office of the Comptroller of the Currency (OCC) is providing notice of its maximum civil money penalties as adjusted for inflation. The inflation adjustments are required to implement the Federal Civil Penalties SUMMARY: Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. DATES: The adjusted maximum amount of civil money penalties in this document are applicable to penalties assessed on or after January 1, 2019, for conduct occurring on or after November 2, 2015. FOR FURTHER INFORMATION CONTACT: Lee Walzer, Counsel, Chief Counsel’s Office, (202) 649–5490, or, for persons who are deaf or hearing impaired, TTY, (202) 649–5597, Office of the Comptroller of the Currency. SUPPLEMENTARY INFORMATION: This document announces changes to the maximum amount of each civil money penalty (CMP) within the OCC’s jurisdiction to administer to account for inflation pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 (the 1990 Adjustment Act),1 as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Adjustment Act).2 Under the 1990 Adjustment Act, as amended, federal agencies must make annual adjustments to the maximum amount of each CMP the agency administers. The Office of Management and Budget (OMB) is required to issue guidance to federal agencies no later than December 15 of each year providing an inflation adjustment multiplier (i.e. the inflation adjustment factor agencies must use) applicable to CMPs assessed in the following year. The agencies are required to publish their CMPs, adjusted pursuant to the multiplier provided by OMB, by January 15 of the applicable year. To the extent an agency has codified a CMP amount in its regulations, the agency would need to update that amount by regulation. However, if an agency has codified the formula for making the CMP adjustments, then subsequent adjustments can be made solely by notice.3 In 2017, the OCC codified the formula for making CMP adjustments in its rules.4 In 2018, the OCC published a final regulation to remove the CMP amounts from its regulations, while updating those amounts for inflation through the notice process.5 On December 14, 2018, the OMB issued guidance to affected agencies on implementing the required annual adjustment, which included the relevant inflation multiplier.6 The OCC has applied that multiplier to the maximum CMPs allowable in 2018 for national banks and federal savings associations as listed in the 2018 CMP notice to calculate the maximum amount of CMPs that may be assessed by the OCC in 2019.7 There were no new statutory CMPs administered by the OCC during 2018. The following charts provide the inflation-adjusted CMPs for use beginning on January 1, 2019, pursuant to 12 CFR 19.240(b) and 109.103(c) for conduct occurring on or after November 2, 2015: PENALTIES APPLICABLE TO NATIONAL BANKS Description and Tier (if applicable) 12 U.S.C. 93(b) ....................................... Violation of Various Provisions of the National Bank Act: Tier 1 ........................................................................................................................ Tier 2 ........................................................................................................................ Tier 3 ........................................................................................................................ Violation of Reporting Requirements: Tier 1 ........................................................................................................................ Tier 2 ........................................................................................................................ 12 U.S.C. 164 .......................................... khammond on DSK30JT082PROD with RULES Maximum Penalty Amount (in Dollars) 1 U.S. Code Citation 1 Pub. L. 101–410, Oct. 5, 1990, 104 Stat. 890, codified at 28 U.S.C. 2461 note. 2 Pub. L. 114–74, Title VII, section 701(b), Nov. 2, 2015, 129 Stat. 599, codified at 28 U.S.C. 2461 note. 3 See OMB Memorandum M–18–03, ‘‘Implementation of the 2018 Annual Adjustment Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015’’ at 4, VerDate Sep<11>2014 16:19 Dec 26, 2018 Jkt 247001 which permits agencies that have codified the formula to adjust CMPs for inflation to update the penalties through a notice rather than a regulation. 4 82 FR 8584 (January 27, 2017). 5 83 FR 1517 (January 12, 2018) (final rule); 83 FR 1657 (Jan. 12, 2018) (2018 CMP Notice). 6 The inflation adjustment multiplier for 2019 is 1.02522. See OMB Memorandum M–19–04, ‘‘Implementation of Penalty Inflation Adjustments PO 00000 Frm 00043 Fmt 4700 Sfmt 4700 10,067 50,334 2 2,013,399 4,027 40,269 for 2019, Pursuant to the Federal Civil Penalties Inflation Adjust Act Improvements Act of 2015’’ at 1 (Dec. 14, 2018). 7 Penalties assessed for violations occurring prior to November 2, 2015, will be subject to the maximum amounts set forth in the OCC’s regulations in effect prior to the enactment of the 2015 Adjustment Act. E:\FR\FM\27DER1.SGM 27DER1

Agencies

[Federal Register Volume 83, Number 247 (Thursday, December 27, 2018)]
[Rules and Regulations]
[Pages 66596-66599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27801]


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FEDERAL ELECTION COMMISSION

11 CFR Part 111

[Notice 2018-18]


Civil Monetary Penalties Annual Inflation Adjustments

AGENCY: Federal Election Commission.

ACTION: Final rules.

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SUMMARY: As required by the Federal Civil Penalties Inflation 
Adjustment Act of 1990, the Federal Election Commission is adjusting 
for inflation the civil monetary penalties established under the 
Federal Election Campaign Act, the Presidential Election Campaign Fund 
Act, and the Presidential Primary Matching Payment Account Act. The 
civil monetary penalties being adjusted are those negotiated by the 
Commission or imposed by a court for certain statutory violations, and 
those imposed by the Commission for late filing of or failure to file 
certain reports required by the Federal Election Campaign Act. The 
adjusted civil monetary penalties are calculated according to a 
statutory formula and the adjusted amounts will apply to penalties 
assessed after the effective date of these rules.

DATES: The final rules are effective on January 1, 2019.

FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General 
Counsel, or Mr. Joseph P. Wenzinger, Attorney, Office of General 
Counsel, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation 
Adjustment Act of 1990 (the ``Inflation Adjustment Act''),\1\ as 
amended by the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (the ``2015 Act''),\2\ requires federal 
agencies, including the Commission, to adjust for inflation the civil 
monetary penalties within their jurisdiction according to prescribed 
formulas. A civil monetary penalty is ``any penalty, fine, or other 
sanction'' that (1) ``is for a specific monetary amount'' or ``has a 
maximum amount'' under federal law; and (2) that a federal agency 
assesses or enforces ``pursuant to an administrative proceeding or a 
civil action'' in federal court.\3\ Under the Federal Election Campaign 
Act, 52 U.S.C. 30101-45 (``FECA''), the Commission may seek and assess 
civil monetary penalties for violations of FECA, the Presidential 
Election Campaign Fund Act, 26 U.S.C. 9001-13, and the Presidential 
Primary Matching Payment Account Act, 26 U.S.C. 9031-42.
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    \1\ Public Law 101-410, 104 Stat. 890 (codified at 28 U.S.C. 
2461 note), amended by Debt Collection Improvement Act of 1996, 
Public Law 104-134, sec. 31001(s)(1), 110 Stat. 1321, 1321-373; 
Federal Reports Elimination Act of 1998, Public Law 105-362, sec. 
1301, 112 Stat. 3280.
    \2\ Public Law 114-74, sec. 701, 129 Stat. 584, 599.
    \3\ Inflation Adjustment Act sec. 3(2).
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    The Inflation Adjustment Act requires federal agencies to adjust 
their civil penalties annually, and the adjustments must take effect no 
later than January 15 of every year.\4\ Pursuant to guidance issued by 
the Office of Management and Budget,\5\ the Commission is now adjusting 
its civil monetary penalties for 2019.\6\
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    \4\ Inflation Adjustment Act sec. 4(a).
    \5\ See Inflation Adjustment Act sec. 7(a) (requiring OMB to 
``issue guidance to agencies on implementing the inflation 
adjustments required under this Act''); see also Memorandum from 
Mick Mulvaney, Director, Office of Management and Budget, to Heads 
of Executive Departments and Agencies, M-19-04 (Dec. 14, 2018), 
https://www.whitehouse.gov/wp-content/uploads/2017/11/m_19_04.pdf 
(``OMB Memorandum'').
    \6\ Inflation Adjustment Act sec. 5.
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    The Commission must adjust for inflation its civil monetary 
penalties ``notwithstanding Section 553'' of the Administrative 
Procedures Act (``APA'').\7\ Thus, the APA's notice-and-comment and 
delayed effective date requirements in 5 U.S.C. 553(b)-(d) do not apply 
because Congress has specifically exempted agencies from these 
requirements.\8\
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    \7\ Inflation Adjustment Act sec. 4(b)(2).
    \8\ See, e.g., Asiana Airlines v. FAA, 134 F.3d 393, 396-99 (DC 
Cir. 1998) (finding APA ``notice and comment'' requirement not 
applicable where Congress clearly expressed intent to depart from 
normal APA procedures).
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    Furthermore, because the inflation adjustments made through these 
final rules are required by Congress and involve no Commission 
discretion or policy judgments, these rules do not need to be submitted 
to the Speaker of the House of Representatives or the President of the 
Senate under the Congressional Review Act, 5 U.S.C. 801 et seq. 
Moreover, because the APA's notice-and-comment procedures do not apply 
to these final rules, the Commission is not required to conduct a 
regulatory flexibility analysis under 5 U.S.C. 603 or 604. See 5 U.S.C. 
601(2), 604(a). Nor is the Commission required to submit these 
revisions for congressional review under FECA. See 5 U.S.C. 
30111(d)(1), (4) (providing for congressional review when Commission 
``prescribe[s]'' a ``rule of law'').
    The new penalty amounts will apply to civil monetary penalties that 
are assessed after the date the increase takes effect, even if the 
associated violation predated the increase.\9\
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    \9\ Inflation Adjustment Act sec. 6.
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Explanation and Justification

    The Inflation Adjustment Act requires the Commission to annually 
adjust its civil monetary penalties for inflation by applying a cost-
of-living-adjustment (``COLA'') ratio.\10\ The COLA ratio is the 
percentage that the Consumer Price Index (``CPI'') \11\ ``for the month 
of October preceding the date of the adjustment'' exceeds the CPI for 
October of the previous year.\12\ To calculate the adjusted penalty, 
the Commission must increase the most recent civil monetary penalty 
amount by the COLA ratio.\13\ According to the Office of Management and 
Budget, the COLA ratio for 2019 is 0.02522, or 2.522%; thus, to 
calculate the new penalties, the Commission must multiply the most 
recent civil monetary penalties in force by 1.02522.\14\
---------------------------------------------------------------------------

    \10\ The COLA ratio must be applied to the most recent civil 
monetary penalties. Inflation Adjustment Act, sec. 4(a); see also 
OMB Memorandum at 2.
    \11\ The Inflation Adjustment Act, sec. 3, uses the CPI ``for 
all-urban consumers published by the Department of Labor.''
    \12\ Inflation Adjustment Act, sec. 5(b)(1).
    \13\ Inflation Adjustment Act, sec. 5(a), (b)(1).
    \14\ OMB Memorandum at 1.
---------------------------------------------------------------------------

    The Commission assesses two types of civil monetary penalties that 
must be adjusted for inflation. First are penalties that are either 
negotiated by the Commission or imposed by a court for violations of 
FECA, the Presidential Election Campaign Fund Act, or the Presidential 
Primary Matching Payment Account Act. These civil monetary penalties 
are set forth at 11 CFR 111.24. Second are the civil monetary penalties 
assessed through the Commission's Administrative Fines Program for late 
filing or non-filing of certain reports required by FECA. See 52 U.S.C. 
30109(a)(4)(C) (authorizing Administrative Fines Program), 30104(a) 
(requiring political committee treasurers

[[Page 66597]]

to report receipts and disbursements within certain time periods). The 
penalty schedules for these civil monetary penalties are set out at 11 
CFR 111.43 and 111.44.

1. 11 CFR 111.24--Civil Penalties

    FECA establishes the civil monetary penalties for violations of 
FECA and the other statutes within the Commission's jurisdiction. See 
52 U.S.C. 30109(a)(5), (6), (12). Commission regulations in 11 CFR 
111.24 provide the current inflation-adjusted amount for each such 
civil monetary penalty. To calculate the adjusted civil monetary 
penalty, the Commission multiplies the most recent penalty amount by 
the COLA ratio and rounds that figure to the nearest dollar.
    The actual adjustment to each civil monetary penalty is shown in 
the chart below.

----------------------------------------------------------------------------------------------------------------
                                                                    Most recent                      New civil
                             Section                               civil penalty       COLA           penalty
----------------------------------------------------------------------------------------------------------------
11 CFR 111.24(a)(1).............................................         $19,446         1.02522         $19,936
11 CFR 111.24(a)(2)(i)..........................................          41,484         1.02522          42,530
11 CFR 111.24(a)(2)(ii).........................................          68,027         1.02522          69,743
11 CFR 111.24(b)................................................           5,817         1.02522           5,964
11 CFR 111.24(b)................................................          14,543         1.02522          14,910
----------------------------------------------------------------------------------------------------------------

2. 11 CFR 111.43, 111.44 --Administrative Fines

    FECA authorizes the Commission to assess civil monetary penalties 
for violations of the reporting requirements of 52 U.S.C. 30104(a) 
according to the penalty schedules ``established and published by the 
Commission.'' 52 U.S.C. 30109(a)(4)(C)(i). The Commission has 
established two such schedules: The schedule in 11 CFR 111.43(a) 
applies to reports that are not election sensitive, and the schedule in 
11 CFR 111.43(b) applies to reports that are election sensitive.\15\ 
Each schedule contains two columns of penalties, one for late-filed 
reports and one for non-filed reports, with penalties based on the 
level of financial activity in the report and, if late-filed, its 
lateness.\16\ In addition, 11 CFR 111.43(c) establishes a civil 
monetary penalty for situations in which a committee fails to file a 
report and the Commission cannot calculate the relevant level of 
activity. Finally, 11 CFR 111.44 establishes a civil monetary penalty 
for failure to file timely reports of contributions received less than 
20 days, but more than 48 hours, before an election. See 52 U.S.C. 
30104(a)(6).
---------------------------------------------------------------------------

    \15\ Election sensitive reports are certain reports due shortly 
before an election. See 11 CFR 111.43(d)(1).
    \16\ A report is considered to be ``not filed'' if it is never 
filed or is filed more than a certain number of days after its due 
date. See 11 CFR 111.43(e).
---------------------------------------------------------------------------

    To determine the adjusted civil monetary penalty amount for each 
level of activity, the Commission multiplies the most recent penalty 
amount by the COLA ratio and rounds that figure to the nearest dollar. 
The new civil monetary penalties are shown in the schedules in the rule 
text, below.

List of Subjects in 11 CFR Part 111

    Administrative practice and procedures, Elections, Law enforcement, 
Penalties.

    For the reasons set out in the preamble, the Federal Election 
Commission amends subchapter A of chapter I of title 11 of the Code of 
Federal Regulations as follows:

PART 111--COMPLIANCE PROCEDURE (52 U.S.C. 30109, 30107(a))

0
1. The authority citation for part 111 continues to read as follows:

    Authority:  52 U.S.C. 30102(i), 30109, 30107(a), 30111(a)(8); 28 
U.S.C. 2461 note; 31 U.S.C. 3701, 3711, 3716-3719, and 3720A, as 
amended; 31 CFR parts 285 and 900-904.


Sec.  111.24   [Amended]

0
2. Section 111.24 is amended in the table below by, for each section 
indicated in the left column, removing the number indicated in the 
middle column, and adding in its place the number indicated in the 
right column as follows:

------------------------------------------------------------------------
                 Section                       Remove           Add
------------------------------------------------------------------------
111.24(a)(1)............................         $19,446         $19,936
111.24(a)(2)(i).........................          41,484          42,530
111.24(a)(2)(ii)........................          68,027          69,743
111.24(b)...............................           5,817           5,964
111.24(b)...............................          14,543          14,910
------------------------------------------------------------------------


0
3. Section 111.43 is amended by revising paragraphs (a), (b), and (c) 
to read as follows:


Sec.  111.43   What are the schedules of penalties?

    (a) The civil money penalty for all reports that are filed late or 
not filed, except election sensitive reports and pre-election reports 
under 11 CFR 104.5, shall be calculated in accordance with the 
following schedule of penalties:


Table 1 to paragraph (a)

----------------------------------------------------------------------------------------------------------------
If the level of activity in the report   And the report was filed late, the    Or the report was not filed, the
                 was:                         civil money penalty is:              civil money penalty is:
----------------------------------------------------------------------------------------------------------------
$1-4,999.99 \a\.......................  [$35 + ($6 x Number of days late)]   $341 x [1 + (.25 x Number of
                                         x [1 + (.25 x Number of previous     previous violations)].
                                         violations)].
$5,000-9,999.99.......................  [$68 + ($6 x Number of days late)]   $410 x [1 + (.25 x Number of
                                         x [1 + (.25 x Number of previous     previous violations)].
                                         violations)].
$10,000-24,999.99.....................  [$146 + ($6 x Number of days late)]  $684 x [1 + (.25 x Number of
                                         x [1 + (.25 x Number of previous     previous violations)].
                                         violations)].

[[Page 66598]]

 
$25,000-49,999.99.....................  [$290 + ($28 x Number of days        $1230 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$50,000-74,999.99.....................  [$437 + ($110 x Number of days       $3925 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$75,000-99,999.99.....................  [$581 + ($146 x Number of days       $5086 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$100,000-149,999.99...................  [$871 + ($182 x Number of days       $6541 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$150,000-199,999.99...................  [$1164 + ($217 x Number of days      $7994 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$200,000-249,999.99...................  [$1453 + ($254 x Number of days      $9446 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$250,000-349,999.99...................  [$2181 + ($290 x Number of days      $11,627 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$350,000-449,999.99...................  [$2908 + ($290 x Number of days      $13,080 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$450,000-549,999.99...................  [$3633 + ($290 x Number of days      $13,806 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$550,000-649,999.99...................  [$4360 + ($290 x Number of days      $14,535 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$650,000-749,999.99...................  [$5086 + ($290 x Number of days      $15,260 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$750,000-849,999.99...................  [$5813 + ($290 x Number of days      $15,987 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$850,000-949,999.99...................  [$6541 + ($290 x Number of days      $16,713 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$950,000 or over......................  [$7267 + ($290 x Number of days      $17,440 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
----------------------------------------------------------------------------------------------------------------
\a\ The civil money penalty for a respondent who does not have any previous violations will not exceed the level
  of activity in the report.

    (b) The civil money penalty for election sensitive reports that are 
filed late or not filed shall be calculated in accordance with the 
following schedule of penalties:


Table 1 to paragraph (b)

----------------------------------------------------------------------------------------------------------------
If the level of activity in the report   And the report was filed late, the    Or the report was not filed, the
                 was:                         civil money penalty is:              civil money penalty is:
----------------------------------------------------------------------------------------------------------------
$1-$4,999.99 \a\......................  [$68 + ($13 x Number of days late)]  $684 x [1 + (.25 x Number of
                                         x [1 + (.25 x Number of previous     previous violations)].
                                         violations)].
$5,000-$9,999.99......................  [$137 + ($13 x Number of days        $820 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$10,000-24,999.99.....................  [$205 + ($13 x Number of days        $1230 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$25,000-49,999.99.....................  [$437 + ($35 x Number of days        $1913 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$50,000-74,999.99.....................  [$654 + ($110 x Number of days       $4360 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$75,000-99,999.99.....................  [$871 + ($146 x Number of days       $5813 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$100,000-149,999.99...................  [$1308 + ($182 x Number of days      $7267 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$150,000-199,999.99...................  [$1744 + ($217 x Number of days      $8719 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$200,000-249,999.99...................  [$2181 + ($254 x Number of days      $10,901 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$250,000-349,999.99...................  [$3270 + ($290 x Number of days      $13,080 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$350,000-449,999.99...................  [$4360 + ($290 x Number of days      $14,535 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$450,000-549,999.99...................  [$5450 + ($290 x Number of days      $15,987 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$550,000-649,999.99...................  [$6541 + ($290 x Number of days      $17,440 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$650,000-749,999.99...................  [$7630 + ($290 x Number of days      $18,895 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$750,000-849,999.99...................  [$8719 + ($290 x Number of days      $20,347 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
$850,000-949,999.99...................  [$9810 + ($290 x Number of days      $21,799 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].

[[Page 66599]]

 
$950,000 or over......................  [$10,901 + ($290 x Number of days    $23,254 x [1 + (.25 x Number of
                                         late)] x [1 + (.25 x Number of       previous violations)].
                                         previous violations)].
----------------------------------------------------------------------------------------------------------------
\a\ The civil money penalty for a respondent who does not have any previous violations will not exceed the level
  of activity in the report.

    (c) If the respondent fails to file a required report and the 
Commission cannot calculate the level of activity under paragraph (d) 
of this section, then the civil money penalty shall be $7,994.
* * * * *


Sec.  111.44   [Amended]

0
4. Amend Sec.  111.44(a)(1) by removing ``$142'' and adding in its 
place ``$146''.

    On behalf of the Commission.

    Dated: December 18, 2018.
Caroline C. Hunter,
Chair, Federal Election Commission.
[FR Doc. 2018-27801 Filed 12-26-18; 8:45 am]
 BILLING CODE 6715-01-P