81 FR 42532 - Inspection Service Authority; Civil Monetary Penalty Inflation Adjustment

POSTAL SERVICE

Federal Register Volume 81, Issue 126 (June 30, 2016)

This rule updates postal regulations to implement inflation adjustments to civil monetary penalties that may be imposed under consumer protection and mailability provisions enforced by the Postal Service pursuant to the Deceptive Mail Prevention and Enforcement Act and the Postal Accountability and Enhancement Act. These adjustments are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. This notice also includes the statutory civil monetary penalties subject to the 2015 Act.

[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Rules and Regulations]
[Pages 42532-42534]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-15464]


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POSTAL SERVICE

39 CFR Part 233


Inspection Service Authority; Civil Monetary Penalty Inflation 
Adjustment

AGENCY: Postal Service.

ACTION: Interim final rule.

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SUMMARY:  This rule updates postal regulations to implement inflation 
adjustments to civil monetary penalties that may be imposed under 
consumer protection and mailability provisions enforced by the Postal 
Service pursuant to the Deceptive Mail Prevention and Enforcement Act 
and the Postal Accountability and Enhancement Act. These adjustments 
are required under the Federal Civil Penalties Inflation Adjustment Act 
of 1990, as amended by the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015. This notice also includes the statutory 
civil monetary penalties subject to the 2015 Act.

DATES: Effective date: August 1, 2016.

FOR FURTHER INFORMATION CONTACT: Steven Sultan, (202) 268-7385.

SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 (2015 Act), Public Law 114-74, 
129 Stat. 584, amended the Federal Civil Penalties Inflation Adjustment 
Act of 1990 (1990 Act), Public Law 101-410, 104 Stat. 890 (28 U.S.C. 
2461 note), to improve the effectiveness of civil monetary penalties 
and to maintain their deterrent effect. Section 3 of the 1990 Act 
specifically includes the Postal Service in the definition of 
``agency'' subject to its provisions.
    The 2015 Act requires the Postal Service to make two types of 
adjustments to civil penalties that meet the definition of ``civil 
monetary penalty'' under the 1990 Act. The Office of Management and 
Budget has furnished detailed instructions regarding these adjustments 
in memorandum M-16-06, Implementation of the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2016 (February 24, 2016), 
www.whitehouse.gov/omb/memoranda/2016/m-16-06.
    First, the Postal Service must make an initial ``catch-up'' 
adjustment to each of its qualifying civil monetary penalties through 
an interim final rule by July 1, 2016. The catch-up adjustment is based 
on the Consumer Price Index (CPI-U) and is calculated for each penalty. 
The amount of the adjustment is calculated by multiplying the current 
published penalty amount by an adjustment factor provided by the Office 
of Management and Budget (OMB). The adjustment factor varies depending 
on the year a penalty was last adjusted. The new penalty amount must be 
rounded to the nearest dollar.
    Second, the Postal Service must make an annual adjustment for 
inflation and publish the adjustment in the Federal Register by January 
15 of each year, beginning in 2017. Each penalty will be adjusted as 
instructed by OMB based on CPI-U from the most recent October.
    The 2015 Act allows the interim final rule and annual inflation 
adjustments to be published without prior public notice or opportunity 
for public comment.

Adjustments to Postal Service Civil Monetary Penalties

    Civil monetary penalties may be assessed for postal offenses under 
sections 106 and 108 of the Deceptive Mail Prevention and Enforcement 
Act, Public Law 106-168, 113 Stat. 1811, 1814 (see, 39 U.S.C. 3012(a), 
(c)(1), (d), and 3017(g)(2), (h)(1)(A)); and section 1008 of the Postal 
Accountability and Enhancement Act, Public Law 109-435, 120 Stat. 3259-
3261 (see, 39 U.S.C. 3018 (c)(1)(A)). The statutory civil monetary 
penalties subject to the 2015 Act and the amount of each penalty after 
the ``catch-up'' adjustment are as follows:

39 U.S.C. 3012(a)--False representations and lottery orders.

    Under 39 U.S.C. 3005(a)(1)-(3), the Postal Service may issue 
administrative orders prohibiting persons from using the mail to obtain 
money through false representations or lotteries. Persons who evade, 
attempt to evade, or fail to comply with an order to stop such 
prohibited practices may be liable to the United States for a civil 
penalty under 39 U.S.C. 3012(a). This section currently imposes a 
$50,000 penalty for each mailing less than 50,000 pieces, $100,000 for 
each mailing 50,000 to 100,000 pieces, and $10,000 for each piece above 
100,000 up to a penalty of $2,000,000. These penalties were last 
adjusted in 2000. Based on the guidance

[[Page 42533]]

in OMB memorandum M-16-06, an adjustment multiplier of 1.36689 will be 
used. The new penalties will be as follows: $68,345 for each mailing 
less than 50,000 pieces, $136,689 for each mailing of 50,000 to 100,000 
pieces, and $13,669 for each piece above 100,000 not to exceed 
$2,733,780.

39 U.S.C. 3012(c)(1)--False representation and lottery penalties in 
lieu of or as part of an order.

    In lieu of or as part of an order issued under 39 U.S.C. 
3005(a)(1)-(3), the Postal Service may assess a civil penalty. 
Currently, the amount of this penalty, set in 39 U.S.C. 3012(c)(1), is 
$25,000 for each mailing that is less than 50,000 pieces, $50,000 for 
each mailing of 50,000 to 100,000 pieces, and an additional $5,000 for 
every additional 10,000 pieces above 100,000 not to exceed $1,000,000. 
These penalties were last adjusted in 2000. Based on OMB guidance, an 
adjustment multiplier of 1.36689 will be used. The new penalties will 
be $34,172 for each mailing that is less than 50,000 pieces, $68,345 
for each mailing of 50,000 to 100,000 pieces, and an additional $6,834 
for every additional 10,000 pieces above 100,000 not to exceed 
$1,366,890.

39 U.S.C. 3012(d)--Misleading references to the United States 
Government; Sweepstakes and deceptive mailings.

    Persons sending certain deceptive mail matter described in 39 
U.S.C. 3001((h)-(k), including:
     Solicitations making false claims of Federal Government 
connection or approval;
     Certain solicitations for the purchase of a product or 
service that may be obtained without cost from the Federal Government;
     Solicitations containing improperly prepared ``facsimile 
checks''; and
     Certain solicitations for ``skill contests'' and 
``sweepstakes'' sent to individuals who, in accordance with 39 U.S.C. 
3017(d), have requested that such materials not be mailed to them);

may be liable to the United States for a civil penalty under 39 U.S.C. 
3012(d). Currently, this penalty is not to exceed $10,000 for each 
mailing. The penalty was last adjusted in 2000. Based on OMB guidance, 
an adjustment multiplier of 1.36689 will be used. The new penalty will 
be $13,669.

39 U.S.C. 3017(g)(2)--Commercial use of lists of persons electing not 
to receive skill contest or sweepstakes mailings.

    Under 39 U.S.C. 3017(g)(2), the Postal Service may impose a civil 
penalty against a person who provides information for commercial use 
about individuals who, in accordance with 39 U.S.C. 3017(d), have 
elected not to receive certain sweepstakes and contest information. 
Currently, this civil penalty may not exceed $2,000,000 per violation. 
The penalty was last adjusted in 2000. Based on OMB guidance, an 
adjustment multiplier of 1.36689 will be used. The new penalty may not 
exceed $2,733,780 per violation.

39 U.S.C. 3017(h)(1)(A)--Reckless mailing of skill contest or 
sweepstakes matter.

    Currently, under 39 U.S.C. 3017(h)(1)(A), any promoter who 
recklessly mails nonmailable skill contest or sweepstakes matter may be 
liable to the United States in the amount of $10,000 per violation for 
each mailing to an individual. The penalty was last adjusted in 2000. 
Based on OMB guidance, an adjustment multiplier of 1.36689 will be 
used. The new penalty is $13,669 per violation.

39 U.S.C. 3018(c)(1)(A)--Hazardous material.

    Under 39 U.S.C. 3018(c)(1)(A), the Postal Service may impose a 
civil penalty payable into the Treasury of the United States on a 
person who knowingly mails nonmailable hazardous materials or fails to 
follow postal laws on mailing hazardous materials. Currently, this 
civil penalty is at least $250, but not more than $100,000 for each 
violation. The penalty amounts were last adjusted in 2006. Based on OMB 
guidance, an adjustment multiplier of 1.17858 will be used. The new 
penalty is at least $295, but not more than $117,858 for each 
violation.

List of Subjects in 39 CFR Part 233

    Administrative practice and procedure, Banks, Banking, Credit, 
Crime, Infants and children, Law enforcement, Penalties, Privacy, 
Seizures and forfeitures.

    For the reasons set out in this document, the Postal Service amends 
39 CFR part 233 as follows:

PART 233--INSPECTION SERVICE AUTHORITY

0
1. The authority citation for 39 CFR part 233 is revised to read as 
follows:

    Authority:  39 U.S.C. 101, 102, 202, 204, 401, 402, 403, 404, 
406, 410, 411, 1003, 3005, 3012, 3017, 3018; 12 U.S.C. 3401-3422; 18 
U.S.C. 981, 983, 1956, 1957, 2254, 3061; 21 U.S.C. 881; Pub. L. 101-
410, 104 Stat. 890; Pub. L. 104-208, 110 Stat. 3009-378; Pub. L. 
106-168, 113 Stat. 1806; Pub. L. 114-74, 129 Stat. 584.


0
2. Revise Sec.  233.12 to read as follows:


Sec.  233.12  Civil penalties.

    (a) False representations and lottery orders. Under 39 U.S.C. 
3005(a)(1)-(3), the Postal Service may issue administrative orders 
prohibiting persons from using the mail to obtain money through false 
representations or lotteries. Persons who evade, attempt to evade, or 
fail to comply with an order to stop such prohibited practices may be 
liable to the United States for a civil penalty under 39 U.S.C. 
3012(a). As adjusted under Public Law 114-74, the penalties are as 
follows: $68,345 for each mailing less than 50,000 pieces, $136,689 for 
each mailing of 50,000 to $100,000 pieces, and $13,669 for each piece 
above 100,000 not to exceed $2,733,780.
    (b) False representation and lottery penalties in lieu of or as 
part of an order. In lieu of or as part of an order issued under 39 
U.S.C. 3005(a)(1)-(3), the Postal Service may assess a civil penalty 
payable under 39 U.S.C. 3012(c)(1). As adjusted under Public Law 114-
74, the penalties are as follows: $34,172 for each mailing that is less 
than 50,000 pieces, $68,345 for each mailing of 50,000 to 100,000 
pieces, and an additional $6,834 for every additional 10,000 pieces 
above 100,000 not to exceed $1,366,890.
    (c) Misleading references to the United States Government; 
Sweepstakes and deceptive mailings. Persons sending certain deceptive 
mail matter described in 39 U.S.C. 3001(h)-(k), including:
    (1) Solicitations making false claims of Federal Government 
connection or approval;
    (2) Certain solicitations for the purchase of a product or service 
that may be obtained without cost from the Federal Government;
    (3) Solicitations containing improperly prepared ``facsimile 
checks''; and
    (4) Solicitations for ``skill contests'' and ``sweepstakes'' sent 
to individuals who, in accordance with 39 U.S.C. 3017(d), have 
requested that such materials not be mailed to them; may be liable to 
the United States for a civil penalty under 39 U.S.C. 3012(d). As 
adjusted under Public Law 114-74, this penalty is not to exceed $13,669 
for each mailing.
    (d) Commercial use of lists of persons electing not to receive 
skill contest or sweepstakes mailings. Under 39 U.S.C. 3017(g)(2), the 
Postal Service may impose a civil penalty against a person who provides 
information for commercial use about individuals who, in accordance 
with 39 U.S.C. 3017(d), have elected not to receive certain sweepstakes 
and contest information. As adjusted under Public Law 114-74,

[[Page 42534]]

the penalty may not exceed $2,733,780 per violation.
    (e) Reckless mailing of skill contest or sweepstakes matter. Under 
39 U.S.C. 3017(h)(1)(A), any promoter who recklessly mails nonmailable 
skill contest or sweepstakes matter may be liable to the United States 
for a civil penalty for each mailing to an individual. As adjusted 
under Public Law 114-74, the penalty is $13,669 per violation.
    (f) Hazardous material. Under 39 U.S.C. 3018(c)(1)(A), the Postal 
Service may impose a civil penalty payable into the Treasury of the 
United States on a person who knowingly mails nonmailable hazardous 
materials or fails to follow postal laws on mailing hazardous 
materials. As adjusted under Public Law 114-74, the penalty is at least 
$295, but not more than $117,858 for each violation.

Stanley F. Mires,
Attorney, Federal Compliance.
[FR Doc. 2016-15464 Filed 6-29-16; 8:45 am]
 BILLING CODE 7710-12-P