81_FR_41561 81 FR 41438 - Penalty Inflation Adjustments for Civil Money Penalties

81 FR 41438 - Penalty Inflation Adjustments for Civil Money Penalties

SOCIAL SECURITY ADMINISTRATION

Federal Register Volume 81, Issue 123 (June 27, 2016)

Page Range41438-41441
FR Document2016-13241

In accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996, and further amended by the Bipartisan Budget Act of 2015, section 701: Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, this interim final rule incorporates the penalty inflation adjustments for the civil money penalties contained in the Social Security Act.

Federal Register, Volume 81 Issue 123 (Monday, June 27, 2016)
[Federal Register Volume 81, Number 123 (Monday, June 27, 2016)]
[Rules and Regulations]
[Pages 41438-41441]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-13241]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 498

[Docket No. SSA-2016-0009]
RIN 0960-AH99


Penalty Inflation Adjustments for Civil Money Penalties

AGENCY: Social Security Administration.

ACTION: Interim Final Rule.

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

SUMMARY: In accordance with the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended by the Debt Collection Improvement 
Act of 1996, and further amended by the Bipartisan Budget Act of 2015, 
section 701: Federal Civil Penalties Inflation

[[Page 41439]]

Adjustment Act Improvements Act of 2015, this interim final rule 
incorporates the penalty inflation adjustments for the civil money 
penalties contained in the Social Security Act.

DATES: This interim final rule is effective on August 1, 2016.

FOR FURTHER INFORMATION CONTACT: Joseph E. Gangloff, Chief Counsel to 
the Inspector General, Room 3-ME-1, 6401 Security Boulevard, Baltimore, 
MD 21235-6401, (410) 966-4440, both directly and for IPTTY. For 
information on eligibility or filing for benefits, call the Social 
Security Administration's national toll-free number, 1-800-772-1213 or 
TTY 1-800-325-0778, or visit the Social Security Administration's 
Internet site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Social Security Administration (SSA) was established as an 
independent agency, effective March 31, 1995, under Public Law 103-296, 
the Social Security Independence and Program Improvements Act of 1994 
(SSIPIA). The SSIPIA also created an independent Office of the 
Inspector General (OIG) to which the Commissioner of Social Security 
(Commissioner) delegated certain authority for civil monetary penalty 
(CMP) cases on June 28, 1995.
    On November 27, 1995, the OIG published a final rule at 60 FR 58225 
establishing a new Part 498 in Title 20 of the Code of Federal 
Regulations. This Part serves as a repository for SSA's existing CMP 
regulations, which implemented section 1140 of the Social Security Act 
(the Act). These regulations were previously located at 42 CFR part 
1003.
    On April 24, 1996, the OIG published a final rule at 61 FR 18078 to 
implement SSA's new CMP authority provided under section 206(b) of the 
SSIPIA, which added section 1129 to the Act, effective October 1, 1994. 
This authority allows for imposition of penalties and assessments 
against any individual, organization, agency, or other entity that 
makes, or causes to be made, a false or misleading statement or 
representation of a material fact for use in determining initial or 
continuing rights to Old-Age, Survivors, and Disability Insurance or 
Supplemental Security Income benefit payments, if the person knew, or 
should have known, that such statement or representation was false or 
misleading, or omitted a material fact.
    In addition, on May 17, 2006, the OIG published a final rule at 71 
FR 28579 implementing the changes in the CMP program required by 
section 251(a) of Public Law 106-169, the Foster Care Independence Act 
of 1999 (FCIA), enacted December 14, 1999, and by sections 111, 201, 
204, and 207 of Public Law 108-203, the Social Security Protection Act 
of 2004 (SSPA), enacted March 2, 2004. Section 251(a) of FCIA expanded 
the authority under section 1129 to impose a civil monetary penalty and 
assessment for fraud involved in the receipt of benefits by certain 
World War II veterans. Sections 111, 201, 204, and 207 of SSPA 
broadened the scope under section 1129 by adding new categories of 
penalties against (1) representative payees with respect to wrongful 
conversions, and (2) individuals who withhold the disclosure of 
material facts to the SSA.

I. The Debt Collection Improvement Act of 1996

    In an effort to maintain the remedial impact of civil money 
penalties (CMPs) and promote compliance with the law, the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410) was 
amended by the Debt Collection Improvement Act of 1996 (Pub. L. 104-
134) to require Federal agencies to regularly adjust certain CMPs for 
inflation. As amended, the law requires each agency to make an initial 
inflationary adjustment for all applicable CMPs, and to make further 
adjustments at least once every four years thereafter for these penalty 
amounts. The Debt Collection Improvement Act of 1996 further stipulates 
that any resulting increases in a CMP due to the calculated inflation 
adjustments (i) should apply only to the violations that occur after 
October 23, 1996--the Act's effective date--and (ii) should not exceed 
10 percent of the penalty indicated. In addition to those penalties 
that fall under the Internal Revenue Code of 1986, the Tariff Act of 
1930 and the Occupational Safety and Health Act of 1970, CMPs that come 
under the Social Security Act were specifically exempted from the 
requirements of the Debt Collection Improvement Act of 1996.

II. Bipartisan Budget Act of 2015, Section 701: Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015

    The Bipartisan Budget Act of 2015, Section 701: Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 
114-74) (the 2015 Adjustment Act) amends the Federal Civil Penalties 
Inflation Adjustment Act of 1990 to require Federal agencies that 
impose CMPs subject to inflation adjustments to adjust the penalties 
for inflation annually instead of at least once every four years. The 
2015 Act expanded the categories of penalties that require adjustment 
for inflation to include CMPs under the Occupational Safety and Health 
Act of 1970 and the Social Security Act. The 2015 Adjustment Act 
further requires affected agencies to adjust the level of CMPs with an 
initial ``catch-up'' adjustment through the publication of this interim 
final rule no later than July 1, 2016, to be effective no later than 
August 1, 2016. We will identify, for each penalty, the year and 
corresponding amount(s) for which the maximum penalty level or range of 
minimum and maximum penalties was established or last adjusted in 
statute or regulation.

III. Initial Catch-Up Adjustment and Calculation for Annual Inflation 
Adjustments

    Based on guidance issued by the Office of Management and Budget 
(OMB),\1\ we will modify the penalty level or range that we identify as 
needing an initial catch-up based on the percent change between the 
non-seasonally adjusted Consumer Price Index for All Urban Consumers 
(CPI-U) for the month of October in the year in which the penalty was 
established or previously adjusted and the October 2015 CPI-U.\2\ We 
also will use OMB-published multipliers to make these adjustments.\3\ 
This initial catch-up adjustment may not exceed 150 percent of the 
amount of that penalty on the date of enactment of the 2015 Adjustment 
Act.\4\ The annual inflation adjustment in subsequent years must be a 
cost-of-living adjustment based on any increases in the October CPI-U 
(not seasonally adjusted) each year.\5\ Inflation adjustment increases 
must be rounded to the nearest multiple of $1.\6\
---------------------------------------------------------------------------

    \1\ On February 24, 2016, OMB published its memorandum 
``Implementation of the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015'' (OMB Memorandum M-16-06). The 
memorandum can be found at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf. The memorandum provides 
guidance to implement the civil monetary penalty adjustment 
requirements of Section 701 of Public Law 114-74.
    \2\ Id. at 3.
    \3\ Id. at 6.
    \4\ Id. at 3 and 8.
    \5\ Id. at 1.
    \6\ Id. at 3.
---------------------------------------------------------------------------

IV. Social Security Administration's New Penalty Levels Under the 
Initial Catch-Up Adjustment

    The Social Security Act currently includes three different CMP 
levels, one under Section 1129, 42 U.S.C. 1320a-8, and two under 
Section 1140, 42 U.S.C.

[[Page 41440]]

1320b-10. The Section 1129 CMP was established in Section 206(b) of the 
Social Security Independence and Program Improvements Act of 1994, 
Public Law 103-296, 108 Stat. 1509. The Section 1140 CMPs were 
established in Sec. 428(a) of the Medicare Catastrophic Coverage Act of 
1988, Public Law 100-360, 102 Stat. 815.
    Our current maximum CMP is $5,000.00 for each violation under 
Section 1129 of the Social Security Act, $25,000.00 per broadcast or 
telecast under Section 1140 of the Social Security Act, and $5,000.00 
for all other violations under Section 1140 of the Social Security Act. 
In OMB Memorandum, M-16-06, OMB instructed affected agencies to add an 
initial inflationary adjustment amount (a ``catch-up'' amount) to 
relevant CMPs based on the percent change between the CPI-U for the 
month of October in the year of the previous adjustment and the October 
2015 CPI-U. Based on OMB's guidance, our adjustments to the existing 
maximum CMPs result in the following new maximum penalties, which will 
be effective as of August 1, 2016. The information below serves as 
public notice of the new maximum penalty amounts for 2016; we will not 
be publishing a separate Federal Register Notice for this change. For 
any future adjustments, we will publish a notice in the Federal 
Register to announce the new amounts.

Section 1129 CMPs

    $5,000.00 (current maximum) x 1.59089 (OMB-issued initial 
adjustment multiplier) = $7,954.00 (new maximum CMP amount-rounded to 
the nearest dollar).

Section 1140 CMPs

    $25,000.00 (current maximum per broadcast or telecast) x 1.97869 
(OMB-issued initial adjustment multiplier) = $49,467.00 (new maximum 
CMP amount-rounded to the nearest dollar).
    $5,000.00 (current maximum for all other violations) x 1.97869 
(OMB-issued initial adjustment multiplier) = $9,893.00 (new maximum CMP 
amount-rounded to the nearest dollar).

Regulatory Procedures

Good Cause for Exception to Rulemaking Procedures

    Pursuant to sections 205(a), 702(a)(5), and 1631(d)(1) of the 
Social Security Act, 42 U.S.C. 405(a), 42 U.S.C. 902(a)(5), and 42 
U.S.C. 1383(d)(1), the Social Security Administration follows the 
Administrative Procedures Act (APA) rulemaking procedures specified in 
5 U.S.C. 553 in the development of our regulations.
    The APA provides exceptions to its Notice of Proposed Rulemaking 
(NPRM) procedures when an agency finds that there is good cause for 
dispensing with such procedures on the basis that they are 
impracticable, unnecessary, or contrary to the public interest. In the 
case of these interim final rules, we have determined that under 5 
U.S.C. 553(b)(B), good cause exists for waiving the NPRM procedures 
because doing so would have been impractical given the Congressional 
mandates.
    Public Law 114-74 was signed into law on November 2, 2015. Section 
701(b)(1)(D) requires that the Commissioner issue regulations to adjust 
CMPs through an interim final rulemaking, and requires the initial 
catch up adjustment to take effect no later than August 1, 2016. 
Accordingly, to issue these rules as a NPRM would have delayed issuance 
of final rules well past the required August 1, 2016 effective date. In 
light of the Congressional mandate that we issue regulations to adjust 
CMPs through an interim final rulemaking, and that the initial catch up 
adjustment take effect no later than August 1, 2016, we believe good 
cause exists for waiver of the NPRM procedures under the APA.

Executive Order 12866 as Supplemented by Executive Order 13563

    We consulted with OMB and determined that this interim final rule 
does not meet the criteria for a significant regulatory action under 
Executive Order 12866 as supplemented by Executive Order 13563. Thus, 
OMB did not review the interim final rule.

Regulatory Flexibility Act

    We generally prepare a regulatory flexibility analysis consistent 
with Public Law 96-354, the Regulatory Flexibility Act, unless the 
Inspector General certifies that a regulation will not have a 
significant economic impact on a substantial number of small business 
entities. While the increase in the civil monetary penalties provided 
for under sections 1129 and 1140 of the Social Security Act might have 
a slight impact on small entities, it is the nature of the violation 
and not the size of the entity that will result in an action by the 
OIG. In either case, we do not anticipate that a substantial number of 
small entities will be significantly affected by this revised 
rulemaking. These final rules reflect legislative amendments affecting 
previously existing sections of the Social Security Act, and do not 
substantially alter the effect of these sanctions on small business 
entities. Therefore, we have concluded, and the Inspector General 
certifies, that a regulatory flexibility analysis is not required for 
this interim final rule.

Paperwork Reduction Act

    These rules do not create any new or affect any existing 
collections and, therefore, do not require Office of Management and 
Budget approval under the Paperwork Reduction Act.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security--Disability Insurance; 96.002, Social Security--Retirement 
Insurance; 96.004, Social Security--Survivors Insurance; and 96.006, 
Supplemental Security Income)

List of Subjects in 20 CFR Part 498

    Administrative practice and procedure, Fraud.

Gale Stallworth Stone,
Deputy Inspector General of Social Security.
    For the reasons set forth in the preamble, we amend 20 CFR part 498 
as set forth below:

PART 498--CIVIL MONETARY PENALTIES, ASSESSMENTS AND RECOMMENDED 
EXCLUSIONS

0
1. The authority citation for part 498 continues to read as follows:

    Authority: Secs. 702(a)(5), 1129, and 1140 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1320a-8, and 1320b-10).


0
2. Amend Sec.  498.103 by adding and reserving paragraph (f), and 
adding paragraph (g), to read as follows:


Sec.  498.103  Amount of penalty.

* * * * *
    (f) [Reserved]
    (g) (1) The amount of the penalties described in paragraphs (a) 
through (d) of this section are the maximum penalties which may be 
assessed under these paragraphs for violations made after June 16, 
2006, but before August 1, 2016.
    (2) (i) After August 1, 2016 penalties are adjusted in accordance 
with the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. 
L. 101-410), as amended by the Debt Collection Improvement Act of 1996 
(Pub. L. 104-134), as further amended by the Bipartisan Budget Act of 
2015, Section 701: Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (Section 701 of Pub. L. 114-74).
    (ii) The maximum penalties which may be assessed under this section 
is the larger of:
    (A) The amount for the previous calendar year; or
    (B) An amount adjusted for inflation, calculated by multiplying the 
amount

[[Page 41441]]

for the previous calendar year by the percentage by which the Consumer 
Price Index for all urban consumers for the month of October preceding 
the current calendar year exceeds the Consumer Price Index for all 
urban consumers for the month of October of the calendar year two years 
prior to the current calendar year, adding that amount to the amount 
for the previous calendar year, and rounding the total to the nearest 
dollar.
    (iii) Notice of the maximum penalty which may be assessed under 
this section for calendar years after 2016 will be published in the 
Federal Register on an annual basis on or before January 15 of each 
calendar year.

[FR Doc. 2016-13241 Filed 6-24-16; 8:45 am]
BILLING CODE 4191-02-P



                                           41438               Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Rules and Regulations

                                           $1,000,000 or triple the monetary gain                     (1) Committed between May 22, 2008                    (2) Committed between October 23,
                                           to such person for each such violation;                 and August 14, 2011, not more than the                 2000 and October 22, 2004, not more
                                           and                                                     greater of $1,000,000 or triple the                    than the greater of $120,000 or triple the
                                              (2) [Reserved]                                       monetary gain to such person for each                  monetary gain to such person for each
                                              (B) For all other violations:                        such violation;                                        such violation;
                                              (1) Committed between November 27,                      (2) Committed on or after August 15,                  (3) Committed between October 23,
                                           1996 and October 22, 2000, not more                     2011, not more than the greater of                     2004 and October 22, 2008, not more
                                           than the greater of $110,000 or triple the              $1,025,000 or triple the monetary gain                 than the greater of $130,000 or triple the
                                           monetary gain to such person for each                   to such person for each such violation;                monetary gain to such person for each
                                           such violation;                                         and                                                    such violation; and
                                              (2) Committed between October 23,                       (B) For all other violations:                         (4) Committed on or after October 23,
                                           2000 and October 22, 2004, not more                        (1) Committed between November 27,                  2008, not more than the greater of
                                           than the greater of $120,000 or triple the              1996 and October 22, 2000, not more                    $140,000 or triple the monetary gain to
                                           monetary gain to such person for each                   than $550,000 for each such violation;                 such person for each such violation;
                                           such violation;                                            (2) Committed between October 23,                     (ii) In an administrative proceeding
                                              (3) Committed between October 23,                    2000 and October 22, 2004, not more                    before the Commission or a civil action
                                           2004 and October 22, 2008, not more                     than $575,000 for each such violation;                 in Federal court initiated on or after
                                           than the greater of $130,000 or triple the                 (3) Committed between October 23,                   August 1, 2016:
                                           monetary gain to such person for each                   2004 and October 22, 2008, not more                      (A) For manipulation or attempted
                                           such violation; and                                     than $625,000 for each such violation;
                                              (4) Committed on or after October 23,                                                                       manipulation violations, not more than
                                                                                                      (4) Committed between October 23,                   the greater of $1,098,190 or triple the
                                           2008, not more than the greater of                      2008 and October 22, 2012, not more
                                           $140,000 or triple the monetary gain to                                                                        monetary gain to such person for each
                                                                                                   than the greater of $675,000 or triple the             such violation; and
                                           such person for each such violation;                    monetary gain to such person for each
                                              (ii) In an administrative proceeding                                                                          (B) For all other violations, not more
                                                                                                   such violation; and                                    than the greater of $167,728 or triple the
                                           before the Commission or a civil action                    (5) Committed on or after October 23,
                                           in Federal court initiated on or after                                                                         monetary gain to such person for each
                                                                                                   2012, not more than the greater of                     such violation.
                                           August 1, 2016:                                         $700,000 or triple the monetary gain to
                                              (A) For manipulation or attempted                                                                             (b) The Commission will adjust for
                                                                                                   such person for each such violation; and               inflation the maximum penalties set
                                           manipulation violations, not more than                     (ii) In an administrative proceeding
                                           the greater of $1,098,190 or triple the                                                                        forth in this section on a yearly basis.
                                                                                                   before the Commission or a civil action
                                           monetary gain to such person for each                                                                            Issued in Washington, DC, on June 21,
                                                                                                   in Federal court initiated on or after
                                           such violation; and                                                                                            2016, by the Commission.
                                              (B) For all other violations:                        August 1, 2016:
                                                                                                      (A) For manipulation or attempted                   Christopher J. Kirkpatrick,
                                              (1) Not more than the greater of                                                                            Secretary of the Commission.
                                           $152,243 or triple the monetary gain to                 manipulation violations, not more than
                                           such person for each such violation; and                the greater of $1,098,190 or triple the                  Note: The following appendix will not
                                              (2) [Reserved]                                       monetary gain to such person for each                  appear in the Code of Federal Regulations.
                                              (2) For a civil monetary penalty                     such violation; and
                                           assessed pursuant to Section 6(d) of the                   (B) For all other violations, not more              Appendix to Adjustment of Civil
                                           Commodity Exchange Act, 7 U.S.C. 13b,                   than the greater of $838,640 or triple the             Monetary Penalties for Inflation—
                                           against any person (other than a                        monetary gain to such person for each                  Commission Voting Summary
                                           registered entity):                                     such violation;
                                                                                                      (4) For a civil monetary penalty                      On this matter, Chairman Massad and
                                              (i) In an administrative proceeding                                                                         Commissioners Bowen and Giancarlo voted
                                           before the Commission or a civil action                 assessed pursuant to Section 6c of the
                                                                                                                                                          in the affirmative. No Commissioner voted in
                                           in Federal court initiated prior to                     Commodity Exchange Act, 7 U.S.C. 13a–                  the negative.
                                           August 1, 2016, for violations                          1, against any registered entity or other
                                                                                                                                                          [FR Doc. 2016–15078 Filed 6–24–16; 8:45 am]
                                           committed on or after August 15, 2011,                  person:
                                                                                                      (i) In an administrative proceeding                 BILLING CODE 6351–01–P
                                           not more than the greater of $140,000 or
                                           triple the monetary gain to such person                 before the Commission or a civil action
                                           for each such violation; and                            in Federal court initiated prior to
                                              (ii) In an administrative proceeding                 August 1, 2016:                                        SOCIAL SECURITY ADMINISTRATION
                                           before the Commission or a civil action                    (A) For manipulation or attempted
                                                                                                   manipulation violations:                               20 CFR Part 498
                                           in Federal court initiated prior or after
                                           August 1, 2016, not more than the                          (1) Committed between May 22, 2008                  [Docket No. SSA–2016–0009]
                                           greater of $152,243 or triple the                       and August 14, 2011, not more than the
                                                                                                                                                          RIN 0960–AH99
                                           monetary gain to such person for each                   greater of $1,000,000 or triple the
                                           such violation; and                                     monetary gain to such person for each                  Penalty Inflation Adjustments for Civil
                                              (3) For a civil monetary penalty                     such violation; and                                    Money Penalties
                                           assessed pursuant to Section 6b of the                     (2) Committed on or after August 15,
                                           Commodity Exchange Act, 7 U.S.C. 13a,                   2011, not more than the greater of                     AGENCY:    Social Security Administration.
                                           against any registered entity or any                    $1,025,000 or triple the monetary gain                 ACTION:   Interim Final Rule.
                                           director, officer, agent, or employee of                to such person for each such violation;
                                           any registered entity:                                  and                                                    SUMMARY:  In accordance with the
Lhorne on DSK30JT082PROD with RULES




                                              (i) In an administrative proceeding                     (B) For all other violations:                       Federal Civil Penalties Inflation
                                           before the Commission or a civil action                    (1) Committed between November 27,                  Adjustment Act of 1990, as amended by
                                           in Federal court initiated prior to                     1996 and October 22, 2000, not more                    the Debt Collection Improvement Act of
                                           August 1, 2016:                                         than the greater of $110,000 or triple the             1996, and further amended by the
                                              (A) For manipulation or attempted                    monetary gain to such person for each                  Bipartisan Budget Act of 2015, section
                                           manipulation violations:                                such violation;                                        701: Federal Civil Penalties Inflation


                                      VerDate Sep<11>2014   15:06 Jun 24, 2016   Jkt 238001   PO 00000   Frm 00028   Fmt 4700   Sfmt 4700   E:\FR\FM\27JNR1.SGM   27JNR1


                                                               Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Rules and Regulations                                                41439

                                           Adjustment Act Improvements Act of                      program required by section 251(a) of                  inflation annually instead of at least
                                           2015, this interim final rule incorporates              Public Law 106–169, the Foster Care                    once every four years. The 2015 Act
                                           the penalty inflation adjustments for the               Independence Act of 1999 (FCIA),                       expanded the categories of penalties
                                           civil money penalties contained in the                  enacted December 14, 1999, and by                      that require adjustment for inflation to
                                           Social Security Act.                                    sections 111, 201, 204, and 207 of                     include CMPs under the Occupational
                                           DATES: This interim final rule is                       Public Law 108–203, the Social Security                Safety and Health Act of 1970 and the
                                           effective on August 1, 2016.                            Protection Act of 2004 (SSPA), enacted                 Social Security Act. The 2015
                                           FOR FURTHER INFORMATION CONTACT:
                                                                                                   March 2, 2004. Section 251(a) of FCIA                  Adjustment Act further requires affected
                                           Joseph E. Gangloff, Chief Counsel to the                expanded the authority under section                   agencies to adjust the level of CMPs
                                           Inspector General, Room 3–ME–1, 6401                    1129 to impose a civil monetary penalty                with an initial ‘‘catch-up’’ adjustment
                                           Security Boulevard, Baltimore, MD                       and assessment for fraud involved in the               through the publication of this interim
                                           21235–6401, (410) 966–4440, both                        receipt of benefits by certain World War               final rule no later than July 1, 2016, to
                                           directly and for IPTTY. For information                 II veterans. Sections 111, 201, 204, and               be effective no later than August 1,
                                           on eligibility or filing for benefits, call             207 of SSPA broadened the scope under                  2016. We will identify, for each penalty,
                                           the Social Security Administration’s                    section 1129 by adding new categories                  the year and corresponding amount(s)
                                                                                                   of penalties against (1) representative                for which the maximum penalty level or
                                           national toll-free number, 1–800–772–
                                                                                                   payees with respect to wrongful                        range of minimum and maximum
                                           1213 or TTY 1–800–325–0778, or visit
                                                                                                   conversions, and (2) individuals who                   penalties was established or last
                                           the Social Security Administration’s
                                                                                                   withhold the disclosure of material facts              adjusted in statute or regulation.
                                           Internet site, Social Security Online, at
                                                                                                   to the SSA.
                                           http://www.socialsecurity.gov.                                                                                 III. Initial Catch-Up Adjustment and
                                           SUPPLEMENTARY INFORMATION:                              I. The Debt Collection Improvement Act                 Calculation for Annual Inflation
                                                                                                   of 1996                                                Adjustments
                                           Background
                                                                                                      In an effort to maintain the remedial                  Based on guidance issued by the
                                              The Social Security Administration                   impact of civil money penalties (CMPs)                 Office of Management and Budget
                                           (SSA) was established as an                             and promote compliance with the law,                   (OMB),1 we will modify the penalty
                                           independent agency, effective March 31,                 the Federal Civil Penalties Inflation                  level or range that we identify as
                                           1995, under Public Law 103–296, the                     Adjustment Act of 1990 (Pub. L. 101–                   needing an initial catch-up based on the
                                           Social Security Independence and                        410) was amended by the Debt                           percent change between the non-
                                           Program Improvements Act of 1994                        Collection Improvement Act of 1996                     seasonally adjusted Consumer Price
                                           (SSIPIA). The SSIPIA also created an                    (Pub. L. 104–134) to require Federal                   Index for All Urban Consumers (CPI–U)
                                           independent Office of the Inspector                     agencies to regularly adjust certain                   for the month of October in the year in
                                           General (OIG) to which the                              CMPs for inflation. As amended, the law                which the penalty was established or
                                           Commissioner of Social Security                         requires each agency to make an initial                previously adjusted and the October
                                           (Commissioner) delegated certain                        inflationary adjustment for all                        2015 CPI–U.2 We also will use OMB-
                                           authority for civil monetary penalty                    applicable CMPs, and to make further                   published multipliers to make these
                                           (CMP) cases on June 28, 1995.                           adjustments at least once every four                   adjustments.3 This initial catch-up
                                              On November 27, 1995, the OIG                        years thereafter for these penalty                     adjustment may not exceed 150 percent
                                           published a final rule at 60 FR 58225                   amounts. The Debt Collection                           of the amount of that penalty on the
                                           establishing a new Part 498 in Title 20                 Improvement Act of 1996 further                        date of enactment of the 2015
                                           of the Code of Federal Regulations. This                stipulates that any resulting increases in             Adjustment Act.4 The annual inflation
                                           Part serves as a repository for SSA’s                   a CMP due to the calculated inflation                  adjustment in subsequent years must be
                                           existing CMP regulations, which                         adjustments (i) should apply only to the               a cost-of-living adjustment based on any
                                           implemented section 1140 of the Social                  violations that occur after October 23,                increases in the October CPI–U (not
                                           Security Act (the Act). These regulations               1996—the Act’s effective date—and (ii)                 seasonally adjusted) each year.5
                                           were previously located at 42 CFR part                  should not exceed 10 percent of the                    Inflation adjustment increases must be
                                           1003.                                                   penalty indicated. In addition to those                rounded to the nearest multiple of $1.6
                                              On April 24, 1996, the OIG published                 penalties that fall under the Internal
                                           a final rule at 61 FR 18078 to implement                Revenue Code of 1986, the Tariff Act of                IV. Social Security Administration’s
                                           SSA’s new CMP authority provided                        1930 and the Occupational Safety and                   New Penalty Levels Under the Initial
                                           under section 206(b) of the SSIPIA,                     Health Act of 1970, CMPs that come                     Catch-Up Adjustment
                                           which added section 1129 to the Act,                    under the Social Security Act were                       The Social Security Act currently
                                           effective October 1, 1994. This authority               specifically exempted from the                         includes three different CMP levels, one
                                           allows for imposition of penalties and                  requirements of the Debt Collection                    under Section 1129, 42 U.S.C. 1320a–8,
                                           assessments against any individual,                     Improvement Act of 1996.                               and two under Section 1140, 42 U.S.C.
                                           organization, agency, or other entity that
                                           makes, or causes to be made, a false or                 II. Bipartisan Budget Act of 2015,                       1 On February 24, 2016, OMB published its

                                           misleading statement or representation                  Section 701: Federal Civil Penalties                   memorandum ‘‘Implementation of the Federal Civil
                                           of a material fact for use in determining               Inflation Adjustment Act Improvements                  Penalties Inflation Adjustment Act Improvements
                                           initial or continuing rights to Old-Age,                Act of 2015                                            Act of 2015’’ (OMB Memorandum M–16–06). The
                                                                                                                                                          memorandum can be found at https://
                                           Survivors, and Disability Insurance or                     The Bipartisan Budget Act of 2015,                  www.whitehouse.gov/sites/default/files/omb/
                                           Supplemental Security Income benefit                    Section 701: Federal Civil Penalties                   memoranda/2016/m-16-06.pdf. The memorandum
                                           payments, if the person knew, or should                 Inflation Adjustment Act Improvements                  provides guidance to implement the civil monetary
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                                           have known, that such statement or                      Act of 2015 (Pub. L. 114–74) (the 2015                 penalty adjustment requirements of Section 701 of
                                                                                                                                                          Public Law 114–74.
                                           representation was false or misleading,                 Adjustment Act) amends the Federal                       2 Id. at 3.
                                           or omitted a material fact.                             Civil Penalties Inflation Adjustment Act                 3 Id. at 6.
                                              In addition, on May 17, 2006, the OIG                of 1990 to require Federal agencies that                 4 Id. at 3 and 8.

                                           published a final rule at 71 FR 28579                   impose CMPs subject to inflation                         5 Id. at 1.

                                           implementing the changes in the CMP                     adjustments to adjust the penalties for                  6 Id. at 3.




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                                           41440               Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Rules and Regulations

                                           1320b–10. The Section 1129 CMP was                      in 5 U.S.C. 553 in the development of                  sanctions on small business entities.
                                           established in Section 206(b) of the                    our regulations.                                       Therefore, we have concluded, and the
                                           Social Security Independence and                           The APA provides exceptions to its                  Inspector General certifies, that a
                                           Program Improvements Act of 1994,                       Notice of Proposed Rulemaking (NPRM)                   regulatory flexibility analysis is not
                                           Public Law 103–296, 108 Stat. 1509.                     procedures when an agency finds that                   required for this interim final rule.
                                           The Section 1140 CMPs were                              there is good cause for dispensing with
                                                                                                   such procedures on the basis that they                 Paperwork Reduction Act
                                           established in Sec. 428(a) of the
                                           Medicare Catastrophic Coverage Act of                   are impracticable, unnecessary, or                        These rules do not create any new or
                                           1988, Public Law 100–360, 102 Stat.                     contrary to the public interest. In the                affect any existing collections and,
                                           815.                                                    case of these interim final rules, we                  therefore, do not require Office of
                                              Our current maximum CMP is                           have determined that under 5 U.S.C.                    Management and Budget approval
                                           $5,000.00 for each violation under                      553(b)(B), good cause exists for waiving               under the Paperwork Reduction Act.
                                           Section 1129 of the Social Security Act,                the NPRM procedures because doing so                   (Catalog of Federal Domestic Assistance
                                           $25,000.00 per broadcast or telecast                    would have been impractical given the                  Program Nos. 96.001, Social Security—
                                           under Section 1140 of the Social                        Congressional mandates.                                Disability Insurance; 96.002, Social
                                           Security Act, and $5,000.00 for all other                  Public Law 114–74 was signed into                   Security—Retirement Insurance; 96.004,
                                           violations under Section 1140 of the                    law on November 2, 2015. Section                       Social Security—Survivors Insurance; and
                                                                                                   701(b)(1)(D) requires that the                         96.006, Supplemental Security Income)
                                           Social Security Act. In OMB
                                           Memorandum, M–16–06, OMB                                Commissioner issue regulations to                      List of Subjects in 20 CFR Part 498
                                           instructed affected agencies to add an                  adjust CMPs through an interim final
                                                                                                   rulemaking, and requires the initial                     Administrative practice and
                                           initial inflationary adjustment amount                                                                         procedure, Fraud.
                                           (a ‘‘catch-up’’ amount) to relevant CMPs                catch up adjustment to take effect no
                                           based on the percent change between                     later than August 1, 2016. Accordingly,                Gale Stallworth Stone,
                                           the CPI–U for the month of October in                   to issue these rules as a NPRM would                   Deputy Inspector General of Social Security.
                                           the year of the previous adjustment and                 have delayed issuance of final rules well                For the reasons set forth in the
                                           the October 2015 CPI–U. Based on                        past the required August 1, 2016                       preamble, we amend 20 CFR part 498 as
                                           OMB’s guidance, our adjustments to the                  effective date. In light of the                        set forth below:
                                           existing maximum CMPs result in the                     Congressional mandate that we issue
                                           following new maximum penalties,                        regulations to adjust CMPs through an                  PART 498—CIVIL MONETARY
                                           which will be effective as of August 1,                 interim final rulemaking, and that the                 PENALTIES, ASSESSMENTS AND
                                           2016. The information below serves as                   initial catch up adjustment take effect                RECOMMENDED EXCLUSIONS
                                           public notice of the new maximum                        no later than August 1, 2016, we believe
                                                                                                   good cause exists for waiver of the                    ■ 1. The authority citation for part 498
                                           penalty amounts for 2016; we will not
                                                                                                   NPRM procedures under the APA.                         continues to read as follows:
                                           be publishing a separate Federal
                                           Register Notice for this change. For any                Executive Order 12866 as                                 Authority: Secs. 702(a)(5), 1129, and 1140
                                           future adjustments, we will publish a                                                                          of the Social Security Act (42 U.S.C.
                                                                                                   Supplemented by Executive Order
                                                                                                                                                          902(a)(5), 1320a–8, and 1320b–10).
                                           notice in the Federal Register to                       13563
                                           announce the new amounts.                                                                                      ■ 2. Amend § 498.103 by adding and
                                                                                                     We consulted with OMB and
                                                                                                                                                          reserving paragraph (f), and adding
                                           Section 1129 CMPs                                       determined that this interim final rule
                                                                                                                                                          paragraph (g), to read as follows:
                                                                                                   does not meet the criteria for a
                                             $5,000.00 (current maximum) ×
                                                                                                   significant regulatory action under                    § 498.103   Amount of penalty.
                                           1.59089 (OMB-issued initial adjustment
                                                                                                   Executive Order 12866 as supplemented                  *       *     *    *    *
                                           multiplier) = $7,954.00 (new maximum
                                                                                                   by Executive Order 13563. Thus, OMB                       (f) [Reserved]
                                           CMP amount-rounded to the nearest
                                                                                                   did not review the interim final rule.                    (g) (1) The amount of the penalties
                                           dollar).
                                                                                                   Regulatory Flexibility Act                             described in paragraphs (a) through (d)
                                           Section 1140 CMPs                                                                                              of this section are the maximum
                                                                                                      We generally prepare a regulatory                   penalties which may be assessed under
                                              $25,000.00 (current maximum per                      flexibility analysis consistent with
                                           broadcast or telecast) × 1.97869 (OMB-                                                                         these paragraphs for violations made
                                                                                                   Public Law 96–354, the Regulatory                      after June 16, 2006, but before August 1,
                                           issued initial adjustment multiplier) =                 Flexibility Act, unless the Inspector
                                           $49,467.00 (new maximum CMP                                                                                    2016.
                                                                                                   General certifies that a regulation will                  (2) (i) After August 1, 2016 penalties
                                           amount-rounded to the nearest dollar).                  not have a significant economic impact
                                              $5,000.00 (current maximum for all                                                                          are adjusted in accordance with the
                                                                                                   on a substantial number of small                       Federal Civil Penalties Inflation
                                           other violations) × 1.97869 (OMB-issued                 business entities. While the increase in
                                           initial adjustment multiplier) =                                                                               Adjustment Act of 1990 (Pub. L. 101–
                                                                                                   the civil monetary penalties provided                  410), as amended by the Debt Collection
                                           $9,893.00 (new maximum CMP amount-                      for under sections 1129 and 1140 of the
                                           rounded to the nearest dollar).                                                                                Improvement Act of 1996 (Pub. L. 104–
                                                                                                   Social Security Act might have a slight                134), as further amended by the
                                           Regulatory Procedures                                   impact on small entities, it is the nature             Bipartisan Budget Act of 2015, Section
                                                                                                   of the violation and not the size of the               701: Federal Civil Penalties Inflation
                                           Good Cause for Exception to                             entity that will result in an action by the
                                           Rulemaking Procedures                                                                                          Adjustment Act Improvements Act of
                                                                                                   OIG. In either case, we do not anticipate              2015 (Section 701 of Pub. L. 114–74).
                                             Pursuant to sections 205(a), 702(a)(5),               that a substantial number of small                        (ii) The maximum penalties which
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                                           and 1631(d)(1) of the Social Security                   entities will be significantly affected by             may be assessed under this section is
                                           Act, 42 U.S.C. 405(a), 42 U.S.C.                        this revised rulemaking. These final                   the larger of:
                                           902(a)(5), and 42 U.S.C. 1383(d)(1), the                rules reflect legislative amendments                      (A) The amount for the previous
                                           Social Security Administration follows                  affecting previously existing sections of              calendar year; or
                                           the Administrative Procedures Act                       the Social Security Act, and do not                       (B) An amount adjusted for inflation,
                                           (APA) rulemaking procedures specified                   substantially alter the effect of these                calculated by multiplying the amount


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                                                               Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Rules and Regulations                                          41441

                                           for the previous calendar year by the                     • Federal eRulemaking Portal: http://                Agency will review this copy, including
                                           percentage by which the Consumer                        www.regulations.gov. Follow the                        the claimed confidential information, in
                                           Price Index for all urban consumers for                 instructions for submitting comments.                  its consideration of comments. The
                                           the month of October preceding the                      Comments submitted electronically,                     second copy, which will have the
                                           current calendar year exceeds the                       including attachments, to http://                      claimed confidential information
                                           Consumer Price Index for all urban                      www.regulations.gov will be posted to                  redacted/blacked out, will be available
                                           consumers for the month of October of                   the docket unchanged. Because your                     for public viewing and posted on http://
                                           the calendar year two years prior to the                comment will be made public, you are                   www.regulations.gov. Submit both
                                           current calendar year, adding that                      solely responsible for ensuring that your              copies to the Division of Dockets
                                           amount to the amount for the previous                   comment does not include any                           Management. If you do not wish your
                                           calendar year, and rounding the total to                confidential information that you or a                 name and contact information to be
                                           the nearest dollar.                                     third party may not wish to be posted,                 made publicly available, you can
                                             (iii) Notice of the maximum penalty                   such as medical information, your or                   provide this information on the cover
                                           which may be assessed under this                        anyone else’s Social Security number, or               sheet and not in the body of your
                                           section for calendar years after 2016 will              confidential business information, such                comments and you must identify this
                                           be published in the Federal Register on                 as a manufacturing process. Please note                information as ‘‘confidential.’’ Any
                                           an annual basis on or before January 15                 that if you include your name, contact                 information marked as ‘‘confidential’’
                                           of each calendar year.                                  information, or other information that                 will not be disclosed except in
                                           [FR Doc. 2016–13241 Filed 6–24–16; 8:45 am]
                                                                                                   identifies you in the body of your                     accordance with 21 CFR 10.20 and other
                                                                                                   comments, that information will be                     applicable disclosure law. For more
                                           BILLING CODE 4191–02–P
                                                                                                   posted on http://www.regulations.gov.                  information about FDA’s posting of
                                                                                                     • If you want to submit a comment                    comments to public dockets, see 80 FR
                                                                                                   with confidential information that you                 56469, September 18, 2015, or access
                                           DEPARTMENT OF HEALTH AND                                do not wish to be made available to the
                                           HUMAN SERVICES                                                                                                 the information at: http://www.fda.gov/
                                                                                                   public, submit the comment as a                        regulatoryinformation/dockets/
                                                                                                   written/paper submission and in the                    default.htm.
                                           Food and Drug Administration
                                                                                                   manner detailed (see ‘‘Written/Paper                      Docket: For access to the docket to
                                                                                                   Submissions’’ and ‘‘Instructions’’).                   read background documents or the
                                           21 CFR Part 573
                                                                                                   Written/Paper Submissions                              electronic and written/paper comments
                                           [Docket No. FDA–2014–F–0232]                                                                                   received, go to http://
                                                                                                      Submit written/paper submissions as                 www.regulations.gov and insert the
                                           Food Additives Permitted in Feed and                    follows:                                               docket number, found in brackets in the
                                           Drinking Water of Animals; Chromium                        • Mail/Hand delivery/Courier (for
                                                                                                                                                          heading of this document, into the
                                           Propionate; Extension of the Comment                    written/paper submissions): Division of
                                                                                                                                                          ‘‘Search’’ box and follow the prompts
                                           Period                                                  Dockets Management (HFA–305), Food
                                                                                                                                                          and/or go to the Division of Dockets
                                                                                                   and Drug Administration, 5630 Fishers
                                           AGENCY:    Food and Drug Administration,                                                                       Management, 5630 Fishers Lane, Rm.
                                                                                                   Lane, Rm. 1061, Rockville, MD 20852.
                                           HHS.                                                       • For written/paper comments                        1061, Rockville, MD 20852.
                                                 Final rule; extension of the
                                           ACTION:                                                 submitted to the Division of Dockets                   FOR FURTHER INFORMATION CONTACT:
                                           comment period.                                         Management, FDA will post your                         Chelsea Trull, Center for Veterinary
                                                                                                   comment, as well as any attachments,                   Medicine, Food and Drug
                                           SUMMARY:    The Food and Drug                           except for information submitted,                      Administration, 7519 Standish Pl.,
                                           Administration (FDA or we) is                           marked and identified, as confidential,                Rockville, MD 20855, 240–402–6729,
                                           extending the comment period for the                    if submitted as detailed in                            chelsea.trull@fda.hhs.gov.
                                           final rule, published in the Federal                    ‘‘Instructions.’’                                      SUPPLEMENTARY INFORMATION: In the
                                           Register of June 3, 2016, amending the                     Instructions: All submissions received              Federal Register of June 3, 2016 (81 FR
                                           regulations for food additives permitted                must include the Docket No. FDA–                       35610), FDA amended the regulations
                                           in feed and drinking water of animals to                2014–F–0232 for ‘‘Food Additives                       for food additives permitted in feed and
                                           provide for the safe use of chromium                    Permitted in Feed and Drinking Water                   drinking water of animals to provide for
                                           propionate as a source of chromium in                   of Animals; Chromium Propionate.’’                     the safe use of chromium propionate as
                                           broiler chicken feed. This action is in                 Received comments will be placed in                    a source of chromium in broiler chicken
                                           response to a food additive petition filed              the docket and, except for those                       feed. This action is in response to a food
                                           by Kemin Industries, Inc. We are taking                 submitted as ‘‘Confidential                            additive petition filed by Kemin
                                           this action due to maintenance on the                   Submissions,’’ publicly viewable at                    Industries, Inc. (Kemin). FDA found no
                                           Federal eRulemaking portal from July 1                  http://www.regulations.gov or at the                   significant environmental impact of this
                                           through July 5, 2016.                                   Division of Dockets Management                         action based on its evaluation of
                                           DATES: The FDA confirms the June 3,                     between 9 a.m. and 4 p.m., Monday                      evidence contained in an environmental
                                           2016, effective date of the final rule that             through Friday.                                        assessment submitted by Kemin.
                                           published on June 3, 2016 (81 FR                           • Confidential Submissions—To                          Interested persons were originally
                                           35610). The comment period for the                      submit a comment with confidential                     given until July 5, 2016, to submit
                                           final rule is extended. Submit either                   information that you do not wish to be                 comments or written objections and a
                                           electronic or written comments by July                  made publicly available, submit your                   request for a hearing.
                                           19, 2016.                                               comments only as a written/paper                          From July 1 through July 5, 2016, the
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                                           ADDRESSES: You may submit comments                      submission. You should submit two                      Federal eRulemaking Portal, http://
                                           as follows:                                             copies total. One copy will include the                www.regulations.gov, is undergoing
                                                                                                   information you claim to be confidential               maintenance. Therefore, we are
                                           Electronic Submissions                                  with a heading or cover note that states               extending the comment period for the
                                             Submit electronic comments in the                     ‘‘THIS DOCUMENT CONTAINS                               regulations permitting the use of
                                           following way:                                          CONFIDENTIAL INFORMATION.’’ The                        chromium propionate as a source of


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Document Created: 2016-06-25 02:06:39
Document Modified: 2016-06-25 02:06:39
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionInterim Final Rule.
DatesThis interim final rule is effective on August 1, 2016.
ContactJoseph E. Gangloff, Chief Counsel to the Inspector General, Room 3-ME-1, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 966-4440, both directly and for IPTTY. For information on eligibility or filing for benefits, call the Social Security Administration's national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit the Social Security Administration's Internet site, Social Security Online, at http:// www.socialsecurity.gov.
FR Citation81 FR 41438 
RIN Number0960-AH99
CFR AssociatedAdministrative Practice and Procedure and Fraud

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