81 FR 41817 - Civil Penalties

DEPARTMENT OF TRANSPORTATION
Saint Lawrence Seaway Development Corporation

Federal Register Volume 81, Issue 124 (June 28, 2016)

Page Range		41817-41818
FR Document		2016-15118

This interim final rule updates the maximum civil penalty amounts for violations of statutes and regulations administered by SLSDC pursuant to the Federal Civil Penalties Inflation Adjustment Improvement Act of 2015. This final rule amends our regulations to reflect the new civil penalty amounts for violations of the Seaway Regulations and Rules under the authority of the Ports and Waterways Safety Act of 1972, as amended (PWSA).

Federal Register, Volume 81 Issue 124 (Tuesday, June 28, 2016)

[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)]
[Rules and Regulations]
[Pages 41817-41818]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-15118]

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DEPARTMENT OF TRANSPORTATION

Saint Lawrence Seaway Development Corporation

33 CFR Part 401

RIN 2135-40

Civil Penalties

AGENCY: Saint Lawrence Seaway Development Corporation (SLSDC),
Department of Transportation (DOT).

ACTION: Interim final rule.

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SUMMARY: This interim final rule updates the maximum civil penalty
amounts for violations of statutes and regulations administered by
SLSDC pursuant to the Federal Civil Penalties Inflation Adjustment
Improvement Act of 2015. This final rule amends our regulations to
reflect the new civil penalty amounts for violations of the Seaway
Regulations and Rules under the authority of the Ports and Waterways
Safety Act of 1972, as amended (PWSA).

DATES: Effective date: This rule is effective July 28, 2016.

FOR FURTHER INFORMATION CONTACT: Carrie Lavigne, Chief Counsel, SLSDC,
telephone (315) 764-3231, 180 Andrews Street, Massena, NY 13362.

SUPPLEMENTARY INFORMATION:

I. Background

On November 2, 2015, the Federal Civil Penalties Inflation
Adjustment Improvement Act (the 2015 Act), Public Law 114-74, Section
701, was signed into law. The purpose of the 2015 Act is to improve the
effectiveness of civil monetary penalties and to maintain their
deterrent effect. The 2015 Act requires agencies to make an initial
catch up adjustment to the civil monetary penalties they administer
through an interim final rule and then to make subsequent annual
adjustments for inflation. The amount of increase of any adjustment to
a civil penalty pursuant to the 2015 Act is limited to 150 percent of
the current penalty. Agencies are required to issue the interim final
rule with the initial catch up adjustment by July 1, 2016.
The method of calculating inflationary adjustments in the 2015 Act
differs substantially from the methods used in past inflationary
adjustment rulemakings conducted pursuant to the Federal Civil
Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment
Act), Public Law 101-410. Previously, adjustments to civil penalties
were conducted under rules that required significant rounding of
figures. For example, a penalty increase that was greater than $1,000,
but less than or equal to $10,000, would be rounded to the nearest
multiple of $1,000. While this allowed penalties to be kept at round
numbers, it meant that penalties would often not be increased at all if
the inflation factor was not large enough. Furthermore, increases to
penalties were capped at 10 percent. Over time, this formula caused
penalties to lose value relative to total inflation.
The 2015 Act has removed these rounding rules; now, penalties are
simply rounded to the nearest $1. While this creates penalty values
that are no longer round numbers, it does ensure that penalties will be
increased each year to a figure commensurate with the actual calculated
inflation. Furthermore, the 2015 Act ``resets'' the inflation
calculations by excluding prior inflationary adjustments under the
Inflation Adjustment Act, which contributed to a decline in the real
value of penalty levels. To do this, the 2015 Act requires agencies to
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 (i.e., originally enacted by Congress) or
last adjusted by statute or regulation other than pursuant to the
Inflation Adjustment Act.
The Director of the Office of Management and Budget (OMB) provided
guidance to agencies in a February 24, 2016 memorandum on how to
calculate the initial adjustment required by the 2015 Act.\1\ The
initial catch up adjustment is based on the change between the Consumer
Price Index for all Urban Consumers (CPI-U) for the month of October in
the year the penalty amount was established or last adjusted by
Congress and the October 2015 CPI-U. The February 24, 2016 memorandum
contains a table with a multiplier for the change in CPI-U from the
year the penalty was established or last adjusted to 2015. To arrive at
the adjusted penalty the agency must multiply the penalty amount when
it was established or last adjusted by Congress, excluding adjustments
under the Inflation Adjustment Act, by the multiplier for the increase
in CPI-U from the year the penalty was established or adjusted provided
in the February 24, 2016 memorandum. The 2015 Act limits the initial
inflationary adjustment to 150 percent of the current penalty. To
determine whether the increase in the adjusted penalty is less than 150
percent, the agency must multiply the current penalty by 250 percent.
The adjusted penalty is the lesser of either the adjusted penalty based
on the multiplier for CPI-U in Table A of the February 24, 2016
memorandum or an amount equal to 250 percent of the current penalty.
This interim final rule adjusts the civil penalties for violations of
statutes and regulations that SLSDC administers consistent with the
February 24, 2016 memorandum.
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\1\ Memorandum from the Director of OMB to Heads of Executive
Departments and Agencies, Implementation of the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (Feb.
24, 2016), available at www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
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II. Inflationary Adjustments to Penalty Amounts in 33 CFR Part 401

The Ports and Waterways Act of 1972, as amended by the Ports and
Tanker Safety Act, Public Law 95-474, sec. 2, Oct. 17, 1978, 92 Stat.
1471 (1978), established a maximum civil penalty of $25,000 for each
violation of the Seaway Rules and Regulations at 33 CFR part 401. This
civil penalty has not been updated since it was established, except for
inflationary adjustments pursuant to the Inflation Adjustment Act of
1990. Applying the multiplier for the increase in CPI-U for 1978 in
Table A of the February 24, 2016 memorandum (3.54453) results in an
adjusted civil penalty of $88,613, which is below the 150 percent cap
Accordingly, paragraph (a) of Sec. 401.102 is being amended to change
the amount of the penalty to $88,613.

Public Comment

SLSDC is promulgating this interim final rule to ensure that the
civil penalties amount contained in 33 CFR 401.102 reflects the
statutorily mandated ranges as adjusted for inflation. Pursuant to the
2015 Act, SLSDC is required to promulgate a ``catch-up adjustment''
through an interim final rule. Pursuant to the 2015 Act and 5 U.S.C.
553(b)(3)(B), SLSDC finds that good cause exists for immediate
implementation of this interim final rule without prior notice and
comment because it would be

[[Page 41818]]

impracticable to delay publication of this rule for notice and comment
and because public comment is unnecessary. By operation of the Act,
SLSDC must publish the catch-up adjustment by interim final rule by
July 1, 2016. Additionally, the 2015 Act provides a clear formula for
adjustment of the civil penalties, leaving the agency little room for
discretion. For these reasons, SLSDC finds that notice and comment
would be impracticable and is unnecessary in this situation.

III. Rulemaking Analyses and Notices

Executive Order 12866, Executive Order 13563, and DOT Regulatory
Policies and Procedures

SLSDC has considered the impact of this rulemaking action under
Executive Order 12866, Executive Order 13563, and the Department of
Transportation's regulatory policies and procedures. This rulemaking
document was not reviewed under Executive Order 12866 or Executive
Order 13563. This action is limited to the adoption of adjustments of
civil penalties under statutes that the agency enforces, and has been
determined to be not ``significant'' under the Department of
Transportation's regulatory policies and procedures and the policies of
the Office of Management and Budget. Because this rulemaking does not
change the number of entities that are subject to civil penalties, the
impacts are limited.
We also do not expect the increase in the civil penalty amount in
33 CFR 401.102 to be economically significant. Since January 1, 2010 to
the present, the SLSDC assessed a total of approximately $27,000 in
civil fines and penalties. Thus, increasing the current civil penalty
amount would not result in an annual effect on the economy of $100
million or more.

Regulatory Flexibility Act

We have also considered the impacts of this rule under the
Regulatory Flexibility Act. I certify that this rule will not have a
significant economic impact on a substantial number of small entities.
The following provides the factual basis for this certification under 5
U.S.C. 605(b). The St. Lawrence Seaway Regulations and Rules primarily
relate to the activities of commercial users of the Seaway, the vast
majority of whom are foreign vessel operators. Therefore, any resulting
costs will be borne mostly by foreign vessels.

Executive Order 13132 (Federalism)

Executive Order 13132 requires SLSDC to develop an accountable
process to ensure ``meaningful and timely input by State and local
officials in the development of regulatory policies that have
federalism implications.'' ``Policies that have federalism
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.'' Under Executive Order 13132, the agency may not issue a
regulation with Federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the Federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments, the agency
consults with State and local governments, or the agency consults with
State and local officials early in the process of developing the
proposed regulation.
This rule will not have substantial direct effects on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government, as specified in Executive Order 13132.
The reason is that this rule will generally apply to commercial
users of the Seaway, the vast majority of whom are foreign vessel
operators. Therefore, any resulting costs will be borne mostly by
foreign vessels. Thus, the requirements of Section 6 of the Executive
Order do not apply.

Unfunded Mandates Reform Act of 1995

The Unfunded Mandates Reform Act of 1995, Public Law 104-4,
requires agencies to prepare a written assessment of the cost, benefits
and other effects of proposed or final rules that include a Federal
mandate likely to result in the expenditure by State, local, or tribal
governments, in the aggregate, or by the private sector, of more than
$100 million annually. Because this rule will not have a $100 million
effect, no Unfunded Mandates assessment will be prepared.

Executive Order 12778 (Civil Justice Reform)

This rule does not have a retroactive or preemptive effect.
Judicial review of a rule may be obtained pursuant to 5 U.S.C. 702.
That section does not require that a petition for reconsideration be
filed prior to seeking judicial review.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1980, we state
that there are no requirements for information collection associated
with this rulemaking action.

Privacy Act

Please note that anyone is able to search the electronic form of
all comments received into any of our dockets by the name of the
individual submitting the comment (or signing the comment, if submitted
on behalf of an association, business, labor union, etc.). You may
review DOT's complete Privacy Act Statement in the Federal Register
published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78), or
you may visit http://dms.dot.gov.

List of Subjects in 33 CFR Part 401

Hazardous materials transportation, Navigation (water), Penalties,
Radio, Reporting and recordkeeping requirements, Vessels, Waterways.
Accordingly, the Saint Lawrence Seaway Development Corporation is
amending 33 CFR part 401 as follows:

PART 401--SEAWAY REGULATIONS AND RULES

Subpart A--Regulations

0
1. The authority citation for subpart A of part 401 is revised to read
as follows:

Authority: 33 U.S.C. 981-990, 1231 and 1232, 49 CFR 1.52,
unless otherwise noted.

0
2. In Sec. 401.102, paragraph (a) is revised to read as follows:

Sec. 401.102 Civil penalty.

(a) A person, as described in Sec. 401.101(b) who violates a
regulation is liable to a civil penalty of not more than $88,613.
* * * * *

Issued on June 22, 2016
Carrie Lavigne,
Chief Counsel.
[FR Doc. 2016-15118 Filed 6-27-16; 8:45 am]
BILLING CODE 4910-61-P

Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Rules and Regulations 41817

(d) Information Broadcasts. The Agencies are required to issue the memorandum contains a table with a
Captain of the Port Pittsburgh or a interim final rule with the initial catch multiplier for the change in CPI–U from
designated representative will inform up adjustment by July 1, 2016. the year the penalty was established or
the public through broadcast notices to The method of calculating last adjusted to 2015. To arrive at the
mariners of the enforcement period for inflationary adjustments in the 2015 Act adjusted penalty the agency must
the safety zone as well as any changes differs substantially from the methods multiply the penalty amount when it
in the planned schedule. used in past inflationary adjustment was established or last adjusted by
rulemakings conducted pursuant to the Congress, excluding adjustments under
L. Mcclain, Jr., Federal Civil Penalties Inflation the Inflation Adjustment Act, by the
Commander, U.S. Coast Guard, Captain of Adjustment Act of 1990 (the Inflation multiplier for the increase in CPI–U
the Port Pittsburgh. Adjustment Act), Public Law 101–410. from the year the penalty was
[FR Doc. 2016–15239 Filed 6–27–16; 8:45 am] Previously, adjustments to civil established or adjusted provided in the
BILLING CODE 9110–04–P penalties were conducted under rules February 24, 2016 memorandum. The
that required significant rounding of 2015 Act limits the initial inflationary
figures. For example, a penalty increase adjustment to 150 percent of the current
DEPARTMENT OF TRANSPORTATION that was greater than $1,000, but less penalty. To determine whether the
than or equal to $10,000, would be increase in the adjusted penalty is less
Saint Lawrence Seaway Development rounded to the nearest multiple of than 150 percent, the agency must
Corporation $1,000. While this allowed penalties to multiply the current penalty by 250
be kept at round numbers, it meant that percent. The adjusted penalty is the
33 CFR Part 401 penalties would often not be increased lesser of either the adjusted penalty
RIN 2135–40 at all if the inflation factor was not large based on the multiplier for CPI–U in
enough. Furthermore, increases to Table A of the February 24, 2016
Civil Penalties penalties were capped at 10 percent. memorandum or an amount equal to
Over time, this formula caused penalties 250 percent of the current penalty. This
AGENCY: Saint Lawrence Seaway to lose value relative to total inflation. interim final rule adjusts the civil
Development Corporation (SLSDC), The 2015 Act has removed these penalties for violations of statutes and
Department of Transportation (DOT). rounding rules; now, penalties are regulations that SLSDC administers
ACTION: Interim final rule. simply rounded to the nearest $1. While consistent with the February 24, 2016
this creates penalty values that are no memorandum.
SUMMARY: This interim final rule
longer round numbers, it does ensure
updates the maximum civil penalty II. Inflationary Adjustments to Penalty
that penalties will be increased each
amounts for violations of statutes and Amounts in 33 CFR Part 401
year to a figure commensurate with the
regulations administered by SLSDC
actual calculated inflation. Furthermore, The Ports and Waterways Act of 1972,
pursuant to the Federal Civil Penalties
the 2015 Act ‘‘resets’’ the inflation as amended by the Ports and Tanker
Inflation Adjustment Improvement Act Safety Act, Public Law 95–474, sec. 2,
calculations by excluding prior
of 2015. This final rule amends our Oct. 17, 1978, 92 Stat. 1471 (1978),
inflationary adjustments under the
regulations to reflect the new civil established a maximum civil penalty of
Inflation Adjustment Act, which
penalty amounts for violations of the $25,000 for each violation of the Seaway
contributed to a decline in the real value
Seaway Regulations and Rules under Rules and Regulations at 33 CFR part
of penalty levels. To do this, the 2015
the authority of the Ports and 401. This civil penalty has not been
Act requires agencies to identify, for
Waterways Safety Act of 1972, as updated since it was established, except
each penalty, the year and
amended (PWSA). for inflationary adjustments pursuant to
corresponding amount(s) for which the
DATES: Effective date: This rule is the Inflation Adjustment Act of 1990.
maximum penalty level or range of
effective July 28, 2016. minimum and maximum penalties was Applying the multiplier for the increase
FOR FURTHER INFORMATION CONTACT: established (i.e., originally enacted by in CPI–U for 1978 in Table A of the
Carrie Lavigne, Chief Counsel, SLSDC, Congress) or last adjusted by statute or February 24, 2016 memorandum
telephone (315) 764–3231, 180 Andrews regulation other than pursuant to the (3.54453) results in an adjusted civil
Street, Massena, NY 13362. Inflation Adjustment Act. penalty of $88,613, which is below the
SUPPLEMENTARY INFORMATION: The Director of the Office of 150 percent cap Accordingly, paragraph
Management and Budget (OMB) (a) of § 401.102 is being amended to
I. Background
provided guidance to agencies in a change the amount of the penalty to
On November 2, 2015, the Federal February 24, 2016 memorandum on $88,613.
Civil Penalties Inflation Adjustment how to calculate the initial adjustment
Improvement Act (the 2015 Act), Public Public Comment
required by the 2015 Act.1 The initial
Law 114–74, Section 701, was signed catch up adjustment is based on the SLSDC is promulgating this interim
into law. The purpose of the 2015 Act change between the Consumer Price final rule to ensure that the civil
is to improve the effectiveness of civil Index for all Urban Consumers (CPI–U) penalties amount contained in 33 CFR
monetary penalties and to maintain for the month of October in the year the 401.102 reflects the statutorily
their deterrent effect. The 2015 Act penalty amount was established or last mandated ranges as adjusted for
requires agencies to make an initial adjusted by Congress and the October inflation. Pursuant to the 2015 Act,
asabaliauskas on DSK3SPTVN1PROD with RULES

catch up adjustment to the civil 2015 CPI–U. The February 24, 2016 SLSDC is required to promulgate a
monetary penalties they administer ‘‘catch-up adjustment’’ through an
through an interim final rule and then 1 Memorandum from the Director of OMB to interim final rule. Pursuant to the 2015
to make subsequent annual adjustments Heads of Executive Departments and Agencies, Act and 5 U.S.C. 553(b)(3)(B), SLSDC
for inflation. The amount of increase of Implementation of the Federal Civil Penalties finds that good cause exists for
Inflation Adjustment Act Improvements Act of 2015
any adjustment to a civil penalty (Feb. 24, 2016), available at www.whitehouse.gov/
immediate implementation of this
pursuant to the 2015 Act is limited to sites/default/files/omb/memoranda/2016/m-16- interim final rule without prior notice
150 percent of the current penalty. 06.pdf. and comment because it would be

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Document Created: 2016-06-28 00:53:26
Document Modified: 2016-06-28 00:53:26

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Interim final rule.
Contact		Carrie Lavigne, Chief Counsel, SLSDC, telephone (315) 764-3231, 180 Andrews Street, Massena, NY 13362.
FR Citation		81 FR 41817
CFR Associated		Hazardous Materials Transportation; Navigation (water); Penalties; Radio; Reporting and Recordkeeping Requirements; Vessels and Waterways

81 FR 41817 - Civil Penalties

DEPARTMENT OF TRANSPORTATIONSaint Lawrence Seaway Development Corporation

Federal Register Volume 81, Issue 124 (June 28, 2016)

DEPARTMENT OF TRANSPORTATION
Saint Lawrence Seaway Development Corporation