81_FR_42678 81 FR 42552 - Inflation Adjustment of Civil Monetary Penalties

81 FR 42552 - Inflation Adjustment of Civil Monetary Penalties

FEDERAL MARITIME COMMISSION

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

Page Range42552-42554
FR Document2016-15569

This rule implements the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act) (Sec. 701 of Pub. L. 11-74). The rule adjusts the maximum amount of each statutory civil penalty subject to Federal Maritime Commission (Commission) jurisdiction for inflation, in accordance with the requirements of that Act. The 2015 Act requires that agencies publish a catch-up adjustment in the penalties in an interim rule by July 1, 2016, and that agencies adjust penalties yearly thereafter.

Federal Register, Volume 81 Issue 126 (Thursday, June 30, 2016)
[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Rules and Regulations]
[Pages 42552-42554]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-15569]


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FEDERAL MARITIME COMMISSION

46 CFR Part 506

[Docket No. 16-13]
RIN 3072-AC63


Inflation Adjustment of Civil Monetary Penalties

AGENCY: Federal Maritime Commission.

ACTION: Interim final rule.

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SUMMARY: This rule implements the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 (2015 Act) (Sec. 701 of Pub. L. 
11-74). The rule adjusts the maximum amount of each statutory civil 
penalty subject to Federal Maritime Commission (Commission) 
jurisdiction for inflation, in accordance with the requirements of that 
Act. The 2015 Act requires that agencies publish a catch-up adjustment 
in the penalties in an interim rule by July 1, 2016, and that agencies 
adjust penalties yearly thereafter.

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

FOR FURTHER INFORMATION CONTACT: Tyler Wood, General Counsel, Federal 
Maritime Commission, 800 North Capitol Street NW., Room 1018, 
Washington, DC 20573, (202) 523-5740.

SUPPLEMENTARY INFORMATION: This rule implements the 2015 Act, which 
became effective on November 2, 2015. The 2015 Act further amends the 
Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), 
Public Law 101-410, 104 Stat. 890 (codified as amended at 28 U.S.C. 
2461 note), in order to improve the effectiveness of civil monetary 
penalties and to maintain their deterrent effect. The Debt Collection 
Improvement Act of 1996 (DCIA), Public Law 104-134, Title III, 
31001(s)(1), 110 Stat. 1321-373, originally amended the FCPIAA and 
required the head of each executive agency to adopt regulations that 
adjust the maximum civil monetary penalties (CMPs) assessable under its 
agency's jurisdiction at least every four years to ensure that they 
continued to maintain their deterrent value.\1\ In accordance with the 
DCIA, the Commission established Part 506 in 1996 and adjusted its 
penalties.\2\ The Commission further adjusted its civil penalty amounts 
in 2000, 2009, and 2014.\3\
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    \1\ Increased CMPs are applicable only to violations occurring 
after the increase takes effect.
    \2\ 61 FR 52704 (Oct. 8, 1996).
    \3\ 65 FR 49741 (Aug. 15, 2000); 74 FR 38114 (July 28, 2009); 79 
FR 37662 (July 2, 2014).
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    The 2015 Act requires that agencies publish a catch-up adjustment 
in the penalties in an interim rule by July 1, 2016, to become 
effective no later than August 1, 2016. Following the catch-up 
adjustment, the 2015 Act requires agencies to adjust CMPs under their 
jurisdiction annually beginning in 2017 based on changes in the 
consumer price index using data from October in the previous calendar 
year.
    In order to catch-up CMPs, the 2015 Act requires agencies to 
identify the year the civil penalty was established or last adjusted by 
statute or regulation other than pursuant to the FCPIAA.\4\ Catch-up 
adjustments are based on the percent change between the Consumer Price 
Index for all Urban Consumers (CPI-U) \5\ for the month of October of 
the year in which the CMP was established or adjusted (other than 
through Inflation Adjustment Act adjustments), and the October 2015 
CPI-U. In accordance with the 2015 Act, the Office of Management and 
Budget (OMB) has issued guidance to agencies on implementing the catch-
up adjustments and provided multipliers for agencies to use depending 
on the year a civil penalty was established or adjusted (other than 
inflation adjustments). Agencies look at the multiplier corresponding 
to that year in a table provided by OMB.\6\ Next, agencies multiply the 
amount of the penalty (not adjusted for inflation) by the amount in the 
table.\7\ Under the 2015 Act, however, the catch-up increase cannot 
exceed 150% of the amount that was effective on November 2, 2015.\8\
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    \4\ 5(b)(2); Memorandum for the Heads of Executive Departments 
and Agencies for the Implementation of the Federal Civil Penalties 
Inflation Adjustment Act, M-16-06, at 4, February 24, 2016 (OMB 
Guidance Memo).
    \5\ 3(3).
    \6\ Id.
    \7\ Id. The amount of the catch-up penalty cannot exceed 250% of 
the amount that was effective on November 2, 2015 which would be 
$112,500 for a violation of Section 13.
    \8\ The 150 percent limitation in the 2015 Act is on the amount 
of the increase. The actual adjusted penalty levels, however are 
capped at 250 percent of the levels in effect on November 2, 2015. 
M-16-06, OMB guidance memo, at 3; also at 5(b)(2)(C).
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    For example, Section 13 of the Shipping Act of 1984 (1984 Act), 46 
U.S.C. 41107, imposes a maximum $45,000 penalty for a knowing and 
willful violation of the 1984 Act.\9\ The penalty was established in 
1984 for an amount of $25,000 and has only been adjusted pursuant to 
the FCPIAA since then. As a result, the Commission multiplied $25,000 
by 2.25867 (the multiplier provided by OMB for 1984) to obtain an 
adjusted CMP of $55,467.
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    \9\ The Commission last adjusted its civil penalties pursuant to 
FCPIAA in 2014.
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    The last time the Commission adjusted its CMP not pursuant to 
FCPIAA varies depending on the penalty.\10\ Accordingly, the Commission 
has looked at the multiplier in the table OMB provided to determine the 
appropriate adjustment for its civil penalties. In order to provide 
some clarity, the table below shows the non-inflation-adjusted penalty, 
the year it was established or adjusted (other than under the FCPIAA), 
the multiplier provided by OMB, and the result of applying the 
multiplier (rounded to the nearest dollar per the statute). The table 
also shows 250% of the amount of the penalty in November 2015 (2015 Act 
Cap). The new adjusted maximum penalty is the lesser of (1) the amount 
using the multiplier and (2) 250% of the amount of the penalty in 
November 2015.
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    \10\ Current CMPs at the Commission have been effective since 
July 11, 2014. 79 FR 37662 (July 2, 2014).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           New adjusted
                                                          Non-inflation-                                    Multiplier     2015 Act cap       maximum
                     U.S.C. Section                          adjusted          Year         Multiplier        result      (250% of 11/2/      penalty
                                                              penalty                                                       15 Amount)        amount
--------------------------------------------------------------------------------------------------------------------------------------------------------
46 U.S.C. 42304.........................................       1,000,000            1988         1.97869       1,978,690       4,000,000       1,978,690

[[Page 42553]]

 
46 U.S.C. 41107(a)......................................          25,000            1984         2.25867          56,467         112,500          56,467
46 U.S.C. 41107(b)......................................           5,000            1984         2.25867          11,293          22,500          11,293
46 U.S.C. 41108(b)......................................          50,000            1984         2.25867         112,934         200,000         112,934
46 U.S.C. 42104.........................................           5,000            1990         1.78156           8,908          22,500           8,908
46 U.S.C. 42106.........................................       1,000,000            1990         1.78156       1,781,560       4,000,000       1,781,560
46 U.S.C. 42108.........................................          50,000            1990         1.78156          89,078         200,000          89,078
46 U.S.C. 44102.........................................           5,000            1966         7.22912          36,146          22,500          22,500
                                                                     200                                           1,446             750             750
46 U.S.C. 44103.........................................           5,000            1966         7.22912          36,146          22,500          22,500
                                                                     200                                           1,446             750             750
31 U.S.C. 3802(a)(1)....................................           5,000            1986         2.15628          10,781          22,500          10,781
31 U.S.C. 3802(a)(2)....................................           5,000            1986         2.15628          10,781          22,500          10,781
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The new formula may result in a lower penalty than the current 
penalty. The catch-up penalty for 46 U.S.C. 42104 of $8,908, is 
actually lower than the current penalty of $9,000. This results from 
two things: (1) the lack of a specific penalty for a violation of 46 
U.S.C. 42104 until 1990; and (2) using a multiplier based on the year 
the penalty was established or modified that excludes adjustments due 
to the FCPIAA. The later a penalty was established that excludes 
adjustments due to the FCPIAA, the smaller the multiplier. In this 
example, the latest penalty amount that excludes adjustments due to the 
FCPIAA for violating 46 U.S.C. 42104 is $5,000, established in 1990. 
The $5,000 penalty, therefore, is multiplied by 1.78156 percent to get 
the adjusted penalty of $8,908.
    In contrast, the oldest non-FCPIAA penalty for violating 46 U.S.C. 
44103 was established in 1966 in the amount of $5,000. Accordingly, 
using the required table, such amount is multiplied by 7.22912 percent 
to get the adjusted penalty of $22,500.
    The 2015 Act also requires that agencies round up any increases in 
civil monetary penalties by a dollar regardless of the amount of the 
penalty, which differs from the prior rounding system that was based on 
the amount of a penalty. The penalty in 46 U.S.C. 42104 was between 
$1,000 and $10,000, and increases were therefore rounded to the nearest 
$1,000 (often the next highest $1,000), resulting in higher adjusted 
amounts.\11\
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    \11\ See 46 CFR 506.4.
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    The Commission is also making a number of changes to other sections 
in part 506 to reflect the amendments made by the 2015 Act, including 
the frequency and calculation of future increases, how increases are 
rounded, and when they apply.
    This interim final rule is issued without prior public notice or 
opportunity for public comment. Under the Administrative Procedure Act 
(APA), 5 U.S.C. 553(b)(B), a final rule may be issued without notice 
and comment if the agency for good cause finds (and incorporates the 
finding and a brief statement of reasons therefore in the rules issued) 
that notice and public comment thereon are impracticable, unnecessary, 
or contrary to the public interest. In this instance, the Commission 
finds, for good cause, that solicitation of public comment on this 
final rule is unnecessary and impractical.
    Specifically, Congress has mandated that the agency make the catch-
up inflation adjustments through an interim final rule, and agencies 
are not required to conduct notice and comment prior to promulgation. 
The Commission, under the FCPIAA as amended by the 2015 Act, is 
required to make the adjustment to the civil monetary penalties 
according to a formula specified in the statute. The regulation 
requires ministerial, technical computations that are noncontroversial.
    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801 et 
seq., generally requires an agency to prepare a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Because the Commission has determined that notice and comment are not 
required under the APA for this rulemaking, the requirements of the RFA 
do not apply and no regulatory flexibility analysis was prepared.
    The rule does not contain any collection of information 
requirements as defined by the Paperwork Reduction Act of 1995, as 
amended. Therefore, Office of Management and Budget review is not 
required.
    This regulatory action is not a major rule as defined under 5 
U.S.C. 804(2).

List of Subjects in 46 CFR Part 506

    Administrative practice and procedure, Penalties.

    For the reasons stated in the preamble, Part 506 of title 46 of the 
Code of Federal Regulations is amended as follows:

PART 506--CIVIL MONETARY PENALTY INFLATION ADJUSTMENT

0
1. The authority citation for part 506 continues to read as follows:

    Authority: 28 U.S.C. 2461.
0
2. Revise Sec.  506.1 to read as follows:


Sec.  506.1  Scope and purpose.

    The purpose of this part is to establish a mechanism for the 
regular adjustment for inflation of monetary penalties and to adjust 
such penalties in conformity with the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (28 U.S.C. 2641 note) as originally amended by 
the Debt Collection Improvement Act of 1996, Public Law 104-134, April 
26, 1996, and currently amended by the Federal Civil Penalties 
Inflation Act Adjustment Improvements Act of 2015, Public Law 114-74, 
in order to maintain the deterrent effect of civil monetary penalties 
and to promote compliance with the law.

0
3. In Sec.  506.3, revise the introductory text to read as follows:


Sec.  506.3  Civil monetary penalty inflation adjustment.

    The Commission shall, not later than August 1, 2016, and at least 
every year thereafter--
* * * * *

0
4. Revise Sec.  506.4 to read as follows:

[[Page 42554]]

Sec.  506.4  Cost of living adjustments of civil monetary penalties.

    (a) The inflation adjustment under Sec.  506.3 will initially be 
determined by increasing the maximum civil monetary penalty for each 
civil monetary penalty by the initial cost-of-living adjustment. The 
inflation adjustment will subsequently be determined by increasing the 
maximum civil monetary penalty for each civil monetary penalty by the 
cost-of-living adjustment. Any increase determined under this section 
shall be rounded to the nearest multiple of $1.
    (b) Inflation adjustment. For purposes of paragraph (a) of this 
section, the term `cost-of-living adjustment' means the percentage (if 
any) for each civil monetary penalty by which the Consumer Price Index 
for the month of October preceding the adjustment exceeds the Consumer 
Price Index for the month of October 1 year before the month of October 
preceding the adjustment.
    (c) Initial adjustment. For purposes of paragraph (a) of this 
section, the term `initial cost-of-living-adjustment' means the 
percentage (if any) for each civil monetary penalty by which the 
Consumer Price Index for the month of October, 2015 exceeds the 
Consumer Price Index for the month of October of the calendar year 
during which the amount of such civil monetary penalty was established 
or adjusted under a provision of law of civil monetary penalty. The 
initial cost-of-living adjustment may not exceed 150 percent of such 
penalty on November 2, 2015, the date of the enactment of the Federal 
Civil Penalties Inflation Act Adjustment Improvements Act of 2015.
    (d) Inflation adjustment. Maximum Civil Monetary Penalties within 
the jurisdiction of the Federal Maritime Commission are adjusted for 
inflation as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                   New adjusted
                                                                                      Maximum         maximum
        United States Code Citation           Civil monetary penalty description  penalty amount  penalty amount
                                                                                     prior to      as of August
                                                                                  August 1, 2016      1, 2016
----------------------------------------------------------------------------------------------------------------
46 U.S.C. 42304............................  Adverse impact on U.S. carriers by        1,600,000       1,978,690
                                              foreign shipping practices.
46 U.S.C. 41107(a).........................  Knowing and Willful violation/               45,000          56,467
                                              Shipping Act of 1984, or
                                              Commission regulation or order.
46 U.S.C. 41107(b).........................  Violation of Shipping Act of 1984,            9,000          11,293
                                              Commission regulation or order,
                                              not knowing and willful.
46 U.S.C. 41108(b).........................  Operating in foreign commerce after          80,000         112,934
                                              tariff suspension.
46 U.S.C. 42104............................  Failure to provide required                   9,000           8,908
                                              reports, etc./Merchant Marine Act
                                              of 1920.
46 U.S.C. 42106............................  Adverse shipping conditions/              1,600,000       1,781,560
                                              Merchant Marine Act of 1920.
46 U.S.C. 42108............................  Operating after tariff or service            80,000          89,078
                                              contract suspension/Merchant
                                              Marine Act of 1920.
46 U.S.C. 44102............................  Failure to establish financial                9,000          22,500
                                              responsibility for non-performance             300             750
                                              of transportation.
46 U.S.C. 44103............................  Failure to establish financial                9,000          22,500
                                              responsibility for death or injury.            300             750
31 U.S.C. 3802(a)(1).......................  Program Fraud Civil Remedies Act/             9,000          10,781
                                              makes false claim.
31 U.S.C. 3802(a)(2).......................  Program Fraud Civil Remedies Act/             9,000          10,781
                                              giving false statement.
----------------------------------------------------------------------------------------------------------------


0
5. Revise Sec.  506.5 to read as follows:


Sec.  506.5  Application of increase to violations.

    Any adjustment in a civil monetary penalty under this part shall 
apply only to civil monetary penalties, including those whose 
associated violation predated such increase, which are assessed after 
the date the adjustment takes effect.

    By the Commission.
Rachel E. Dickon,
Assistant Secretary.
[FR Doc. 2016-15569 Filed 6-29-16; 8:45 am]
BILLING CODE 6731-AA-P



                                              42552                 Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Rules and Regulations

                                              § Penalties.                                                  Capitol Street NW., Room 1018,                         CPI–U. In accordance with the 2015 Act,
                                              *     *    *     *     *                                      Washington, DC 20573, (202) 523–5740.                  the Office of Management and Budget
                                                (b) A fine of up to $145,023 may be                         SUPPLEMENTARY INFORMATION: This rule                   (OMB) has issued guidance to agencies
                                              assessed against the vessel owner for                         implements the 2015 Act, which                         on implementing the catch-up
                                              each day in which such vessel has                             became effective on November 2, 2015.                  adjustments and provided multipliers
                                              engaged in fishing (as such term is                           The 2015 Act further amends the                        for agencies to use depending on the
                                              defined in section 3 of the Magnuson-                         Federal Civil Penalties Inflation                      year a civil penalty was established or
                                              Stevens Fishery Conservation and                              Adjustment Act of 1990 (FCPIAA),                       adjusted (other than inflation
                                              Management Act (16 U.S.C. 1802)                               Public Law 101–410, 104 Stat. 890                      adjustments). Agencies look at the
                                              within the exclusive economic zone of                         (codified as amended at 28 U.S.C. 2461                 multiplier corresponding to that year in
                                              the United States; and                                        note), in order to improve the                         a table provided by OMB.6 Next,
                                              *     *    *     *     *                                      effectiveness of civil monetary penalties              agencies multiply the amount of the
                                                                                                            and to maintain their deterrent effect.                penalty (not adjusted for inflation) by
                                                Dated: June 27, 2016.
                                                                                                            The Debt Collection Improvement Act of                 the amount in the table.7 Under the
                                                By Order of the Maritime Administrator.                     1996 (DCIA), Public Law 104–134, Title                 2015 Act, however, the catch-up
                                              Gabriel Chavez,                                               III, 31001(s)(1), 110 Stat. 1321–373,                  increase cannot exceed 150% of the
                                              Secretary, Maritime Administration.                           originally amended the FCPIAA and                      amount that was effective on November
                                              [FR Doc. 2016–15566 Filed 6–29–16; 8:45 am]                   required the head of each executive                    2, 2015.8
                                              BILLING CODE 4910–81–P                                        agency to adopt regulations that adjust
                                                                                                                                                                      For example, Section 13 of the
                                                                                                            the maximum civil monetary penalties
                                                                                                                                                                   Shipping Act of 1984 (1984 Act), 46
                                                                                                            (CMPs) assessable under its agency’s
                                                                                                                                                                   U.S.C. 41107, imposes a maximum
                                              FEDERAL MARITIME COMMISSION                                   jurisdiction at least every four years to
                                                                                                                                                                   $45,000 penalty for a knowing and
                                                                                                            ensure that they continued to maintain
                                                                                                                                                                   willful violation of the 1984 Act.9 The
                                              46 CFR Part 506                                               their deterrent value.1 In accordance
                                                                                                                                                                   penalty was established in 1984 for an
                                                                                                            with the DCIA, the Commission
                                              [Docket No. 16–13]                                                                                                   amount of $25,000 and has only been
                                                                                                            established Part 506 in 1996 and
                                                                                                                                                                   adjusted pursuant to the FCPIAA since
                                              RIN 3072–AC63                                                 adjusted its penalties.2 The Commission
                                                                                                                                                                   then. As a result, the Commission
                                                                                                            further adjusted its civil penalty
                                              Inflation Adjustment of Civil Monetary                                                                               multiplied $25,000 by 2.25867 (the
                                                                                                            amounts in 2000, 2009, and 2014.3
                                              Penalties                                                        The 2015 Act requires that agencies                 multiplier provided by OMB for 1984)
                                                                                                            publish a catch-up adjustment in the                   to obtain an adjusted CMP of $55,467.
                                              AGENCY:     Federal Maritime Commission.                      penalties in an interim rule by July 1,                   The last time the Commission
                                              ACTION:    Interim final rule.                                2016, to become effective no later than                adjusted its CMP not pursuant to
                                                                                                            August 1, 2016. Following the catch-up                 FCPIAA varies depending on the
                                              SUMMARY:   This rule implements the                                                                                  penalty.10 Accordingly, the Commission
                                                                                                            adjustment, the 2015 Act requires
                                              Federal Civil Penalties Inflation                                                                                    has looked at the multiplier in the table
                                                                                                            agencies to adjust CMPs under their
                                              Adjustment Act Improvements Act of                                                                                   OMB provided to determine the
                                                                                                            jurisdiction annually beginning in 2017
                                              2015 (2015 Act) (Sec. 701 of Pub. L. 11–                                                                             appropriate adjustment for its civil
                                                                                                            based on changes in the consumer price
                                              74). The rule adjusts the maximum                                                                                    penalties. In order to provide some
                                                                                                            index using data from October in the
                                              amount of each statutory civil penalty                                                                               clarity, the table below shows the non-
                                                                                                            previous calendar year.
                                              subject to Federal Maritime Commission                           In order to catch-up CMPs, the 2015                 inflation-adjusted penalty, the year it
                                              (Commission) jurisdiction for inflation,                      Act requires agencies to identify the                  was established or adjusted (other than
                                              in accordance with the requirements of                        year the civil penalty was established or              under the FCPIAA), the multiplier
                                              that Act. The 2015 Act requires that                          last adjusted by statute or regulation                 provided by OMB, and the result of
                                              agencies publish a catch-up adjustment                        other than pursuant to the FCPIAA.4                    applying the multiplier (rounded to the
                                              in the penalties in an interim rule by                        Catch-up adjustments are based on the                  nearest dollar per the statute). The table
                                              July 1, 2016, and that agencies adjust                        percent change between the Consumer                    also shows 250% of the amount of the
                                              penalties yearly thereafter.                                  Price Index for all Urban Consumers                    penalty in November 2015 (2015 Act
                                              DATES: This rule is effective on August                       (CPI–U) 5 for the month of October of                  Cap). The new adjusted maximum
                                              1, 2016.                                                      the year in which the CMP was                          penalty is the lesser of (1) the amount
                                              FOR FURTHER INFORMATION CONTACT:                              established or adjusted (other than                    using the multiplier and (2) 250% of the
                                              Tyler Wood, General Counsel, Federal                          through Inflation Adjustment Act                       amount of the penalty in November
                                              Maritime Commission, 800 North                                adjustments), and the October 2015                     2015.

                                                                                                                                                                                                        New adjusted
                                                                                                        Non-inflation-                                                               2015 Act cap
                                                                                                                                                                   Multiplier                            maximum
                                                               U.S.C. Section                             adjusted             Year              Multiplier                         (250% of 11/2/
                                                                                                                                                                    result                                penalty
                                                                                                           penalty                                                                    15 Amount)          amount

                                              46 U.S.C. 42304 ......................................        1,000,000                 1988            1.97869        1,978,690           4,000,000           1,978,690

                                                1 Increased CMPs are applicable only to violations            5 3(3).                                              of the levels in effect on November 2, 2015. M–16–
                                              occurring after the increase takes effect.                                                                           06, OMB guidance memo, at 3; also at 5(b)(2)(C).
srobinson on DSK5SPTVN1PROD with RULES




                                                                                                              6 Id.
                                                2 61 FR 52704 (Oct. 8, 1996).                                                                                         9 The Commission last adjusted its civil penalties
                                                                                                              7 Id. The amount of the catch-up penalty cannot
                                                3 65 FR 49741 (Aug. 15, 2000); 74 FR 38114 (July
                                                                                                            exceed 250% of the amount that was effective on        pursuant to FCPIAA in 2014.
                                              28, 2009); 79 FR 37662 (July 2, 2014).
                                                4 5(b)(2); Memorandum for the Heads of Executive
                                                                                                            November 2, 2015 which would be $112,500 for a            10 Current CMPs at the Commission have been

                                                                                                            violation of Section 13.                               effective since July 11, 2014. 79 FR 37662 (July 2,
                                              Departments and Agencies for the Implementation
                                              of the Federal Civil Penalties Inflation Adjustment
                                                                                                              8 The 150 percent limitation in the 2015 Act is on   2014).
                                              Act, M–16–06, at 4, February 24, 2016 (OMB                    the amount of the increase. The actual adjusted
                                              Guidance Memo).                                               penalty levels, however are capped at 250 percent



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                                                                     Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Rules and Regulations                                                    42553

                                                                                                                                                                                                         New adjusted
                                                                                                            Non-inflation-                                                               2015 Act cap
                                                                                                                                                                       Multiplier                         maximum
                                                               U.S.C. Section                                 adjusted             Year              Multiplier                         (250% of 11/2/
                                                                                                                                                                        result                             penalty
                                                                                                               penalty                                                                    15 Amount)       amount

                                              46   U.S.C.   41107(a) ..................................            25,000                 1984            2.25867             56,467          112,500          56,467
                                              46   U.S.C.   41107(b) ..................................             5,000                 1984            2.25867             11,293           22,500          11,293
                                              46   U.S.C.   41108(b) ..................................            50,000                 1984            2.25867            112,934          200,000         112,934
                                              46   U.S.C.   42104 ......................................            5,000                 1990            1.78156              8,908           22,500           8,908
                                              46   U.S.C.   42106 ......................................        1,000,000                 1990            1.78156          1,781,560        4,000,000       1,781,560
                                              46   U.S.C.   42108 ......................................           50,000                 1990            1.78156             89,078          200,000          89,078
                                              46   U.S.C.   44102 ......................................            5,000                 1966            7.22912             36,146           22,500          22,500
                                                                                                                      200                                                      1,446              750             750
                                              46 U.S.C. 44103 ......................................                5,000                 1966            7.22912             36,146           22,500          22,500
                                                                                                                      200                                                      1,446              750             750
                                              31 U.S.C. 3802(a)(1) ...............................                  5,000                 1986            2.15628             10,781           22,500          10,781
                                              31 U.S.C. 3802(a)(2) ...............................                  5,000                 1986            2.15628             10,781           22,500          10,781



                                                 The new formula may result in a                                   This interim final rule is issued                   Act of 1995, as amended. Therefore,
                                              lower penalty than the current penalty.                           without prior public notice or                         Office of Management and Budget
                                              The catch-up penalty for 46 U.S.C.                                opportunity for public comment. Under                  review is not required.
                                              42104 of $8,908, is actually lower than                           the Administrative Procedure Act                         This regulatory action is not a major
                                              the current penalty of $9,000. This                               (APA), 5 U.S.C. 553(b)(B), a final rule                rule as defined under 5 U.S.C. 804(2).
                                              results from two things: (1) the lack of                          may be issued without notice and
                                              a specific penalty for a violation of 46                          comment if the agency for good cause                   List of Subjects in 46 CFR Part 506
                                              U.S.C. 42104 until 1990; and (2) using                            finds (and incorporates the finding and                  Administrative practice and
                                              a multiplier based on the year the                                a brief statement of reasons therefore in              procedure, Penalties.
                                              penalty was established or modified that                          the rules issued) that notice and public
                                              excludes adjustments due to the                                   comment thereon are impracticable,                       For the reasons stated in the
                                              FCPIAA. The later a penalty was                                   unnecessary, or contrary to the public                 preamble, Part 506 of title 46 of the
                                              established that excludes adjustments                             interest. In this instance, the                        Code of Federal Regulations is amended
                                              due to the FCPIAA, the smaller the                                Commission finds, for good cause, that                 as follows:
                                              multiplier. In this example, the latest                           solicitation of public comment on this
                                                                                                                                                                       PART 506—CIVIL MONETARY
                                              penalty amount that excludes                                      final rule is unnecessary and
                                                                                                                                                                       PENALTY INFLATION ADJUSTMENT
                                              adjustments due to the FCPIAA for                                 impractical.
                                              violating 46 U.S.C. 42104 is $5,000,                                 Specifically, Congress has mandated
                                                                                                                that the agency make the catch-up                      ■ 1. The authority citation for part 506
                                              established in 1990. The $5,000 penalty,                                                                                 continues to read as follows:
                                              therefore, is multiplied by 1.78156                               inflation adjustments through an
                                              percent to get the adjusted penalty of                            interim final rule, and agencies are not                   Authority: 28 U.S.C. 2461.
                                              $8,908.                                                           required to conduct notice and                         ■   2. Revise § 506.1 to read as follows:
                                                 In contrast, the oldest non-FCPIAA                             comment prior to promulgation. The
                                                                                                                Commission, under the FCPIAA as                        § 506.1      Scope and purpose.
                                              penalty for violating 46 U.S.C. 44103
                                              was established in 1966 in the amount                             amended by the 2015 Act, is required to                  The purpose of this part is to establish
                                              of $5,000. Accordingly, using the                                 make the adjustment to the civil                       a mechanism for the regular adjustment
                                              required table, such amount is                                    monetary penalties according to a                      for inflation of monetary penalties and
                                              multiplied by 7.22912 percent to get the                          formula specified in the statute. The                  to adjust such penalties in conformity
                                              adjusted penalty of $22,500.                                      regulation requires ministerial,                       with the Federal Civil Penalties
                                                                                                                technical computations that are                        Inflation Adjustment Act of 1990 (28
                                                 The 2015 Act also requires that                                noncontroversial.                                      U.S.C. 2641 note) as originally amended
                                              agencies round up any increases in civil                             The Regulatory Flexibility Act (RFA),               by the Debt Collection Improvement Act
                                              monetary penalties by a dollar                                    as amended by the Small Business                       of 1996, Public Law 104–134, April 26,
                                              regardless of the amount of the penalty,                          Regulatory Enforcement Fairness Act of                 1996, and currently amended by the
                                              which differs from the prior rounding                             1996, 5 U.S.C. 801 et seq., generally                  Federal Civil Penalties Inflation Act
                                              system that was based on the amount of                            requires an agency to prepare a                        Adjustment Improvements Act of 2015,
                                              a penalty. The penalty in 46 U.S.C.                               regulatory flexibility analysis of any rule            Public Law 114–74, in order to maintain
                                              42104 was between $1,000 and $10,000,                             subject to notice and comment                          the deterrent effect of civil monetary
                                              and increases were therefore rounded to                           rulemaking requirements, unless the                    penalties and to promote compliance
                                              the nearest $1,000 (often the next                                agency certifies that the rule will not                with the law.
                                              highest $1,000), resulting in higher                              have a significant economic impact on
                                              adjusted amounts.11                                                                                                      ■ 3. In § 506.3, revise the introductory
                                                                                                                a substantial number of small entities.
                                                 The Commission is also making a                                                                                       text to read as follows:
                                                                                                                Because the Commission has
                                              number of changes to other sections in                            determined that notice and comment are                 § 506.3 Civil monetary penalty inflation
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                                              part 506 to reflect the amendments                                not required under the APA for this                    adjustment.
                                              made by the 2015 Act, including the                               rulemaking, the requirements of the                      The Commission shall, not later than
                                              frequency and calculation of future                               RFA do not apply and no regulatory                     August 1, 2016, and at least every year
                                              increases, how increases are rounded,                             flexibility analysis was prepared.                     thereafter—
                                              and when they apply.                                                 The rule does not contain any
                                                                                                                collection of information requirements                 *    *     *    *     *
                                                11 See   46 CFR 506.4.                                          as defined by the Paperwork Reduction                  ■   4. Revise § 506.4 to read as follows:


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                                              42554                  Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Rules and Regulations

                                              § 506.4 Cost of living adjustments of civil                         ‘cost-of-living adjustment’ means the                  Price Index for the month of October of
                                              monetary penalties.                                                 percentage (if any) for each civil                     the calendar year during which the
                                                (a) The inflation adjustment under                                monetary penalty by which the                          amount of such civil monetary penalty
                                              § 506.3 will initially be determined by                             Consumer Price Index for the month of                  was established or adjusted under a
                                              increasing the maximum civil monetary                               October preceding the adjustment                       provision of law of civil monetary
                                              penalty for each civil monetary penalty                             exceeds the Consumer Price Index for                   penalty. The initial cost-of-living
                                              by the initial cost-of-living adjustment.                           the month of October 1 year before the                 adjustment may not exceed 150 percent
                                              The inflation adjustment will                                       month of October preceding the                         of such penalty on November 2, 2015,
                                              subsequently be determined by                                       adjustment.                                            the date of the enactment of the Federal
                                              increasing the maximum civil monetary                                                                                      Civil Penalties Inflation Act Adjustment
                                              penalty for each civil monetary penalty                                (c) Initial adjustment. For purposes of
                                                                                                                  paragraph (a) of this section, the term                Improvements Act of 2015.
                                              by the cost-of-living adjustment. Any
                                              increase determined under this section                              ‘initial cost-of-living-adjustment’ means                (d) Inflation adjustment. Maximum
                                              shall be rounded to the nearest multiple                            the percentage (if any) for each civil                 Civil Monetary Penalties within the
                                              of $1.                                                              monetary penalty by which the                          jurisdiction of the Federal Maritime
                                                (b) Inflation adjustment. For purposes                            Consumer Price Index for the month of                  Commission are adjusted for inflation as
                                              of paragraph (a) of this section, the term                          October, 2015 exceeds the Consumer                     follows:

                                                                                                                                                                                                         New adjusted
                                                                                                                                                                                           Maximum        maximum
                                                                                                                                                                                             penalty       penalty
                                                                United States Code Citation                                           Civil monetary penalty description                  amount prior   amount as of
                                                                                                                                                                                          to August 1,    August 1,
                                                                                                                                                                                              2016          2016

                                              46 U.S.C. 42304 ...........................................................   Adverse impact on U.S. carriers by foreign shipping              1,600,000      1,978,690
                                                                                                                              practices.
                                              46 U.S.C. 41107(a) ......................................................     Knowing and Willful violation/Shipping Act of 1984, or              45,000         56,467
                                                                                                                              Commission regulation or order.
                                              46 U.S.C. 41107(b) ......................................................     Violation of Shipping Act of 1984, Commission regula-                9,000         11,293
                                                                                                                              tion or order, not knowing and willful.
                                              46 U.S.C. 41108(b) ......................................................     Operating in foreign commerce after tariff suspension               80,000        112,934
                                              46 U.S.C. 42104 ...........................................................   Failure to provide required reports, etc./Merchant Ma-               9,000          8,908
                                                                                                                              rine Act of 1920.
                                              46 U.S.C. 42106 ...........................................................   Adverse shipping conditions/Merchant Marine Act of               1,600,000      1,781,560
                                                                                                                              1920.
                                              46 U.S.C. 42108 ...........................................................   Operating after tariff or service contract suspension/              80,000         89,078
                                                                                                                              Merchant Marine Act of 1920.
                                              46 U.S.C. 44102 ...........................................................   Failure to establish financial responsibility for non-per-           9,000         22,500
                                                                                                                              formance of transportation.                                          300            750
                                              46 U.S.C. 44103 ...........................................................   Failure to establish financial responsibility for death or           9,000         22,500
                                                                                                                              injury.                                                              300            750
                                              31 U.S.C. 3802(a)(1) ....................................................     Program Fraud Civil Remedies Act/makes false claim                   9,000         10,781
                                              31 U.S.C. 3802(a)(2) ....................................................     Program Fraud Civil Remedies Act/giving false state-                 9,000         10,781
                                                                                                                              ment.



                                              ■   5. Revise § 506.5 to read as follows:                           FEDERAL COMMUNICATIONS                                 SUPPLEMENTARY INFORMATION:     On June 9,
                                                                                                                  COMMISSION                                             2016, the Enforcement Bureau of the
                                              § 506.5 Application of increase to                                                                                         Federal Communications Commission
                                              violations.                                                         47 CFR Part 1                                          adopted and released an order on
                                                Any adjustment in a civil monetary                                                                                       delegated authority, DA 16–644, which
                                                                                                                  [DA 16–644]
                                              penalty under this part shall apply only                                                                                   adjusts the Commission’s forfeiture
                                              to civil monetary penalties, including                              Adjustment of Civil Monetary Penalties                 penalties for inflation. On November 2,
                                              those whose associated violation                                    To Reflect Inflation                                   2015, the President signed into law the
                                              predated such increase, which are                                                                                          Bipartisan Budget Act of 2015, which
                                              assessed after the date the adjustment                              AGENCY:  Federal Communications                        included, as Section 701 thereto, the
                                              takes effect.                                                       Commission.                                            2015 Inflation Adjustment Act, which
                                                                                                                  ACTION: Final rule.                                    amended the Federal Civil Penalties
                                                By the Commission.
                                                                                                                                                                         Inflation Adjustment Act of 1990 (Pub.
                                              Rachel E. Dickon,                                                   SUMMARY:    The Federal Civil Penalties                L. 101–410), to improve the
                                              Assistant Secretary.                                                Inflation Adjustment Act Improvements                  effectiveness of civil monetary penalties
                                              [FR Doc. 2016–15569 Filed 6–29–16; 8:45 am]                         Act of 2015 (the 2015 Inflation                        and maintain their deterrent effect.
                                                                                                                  Adjustment Act) requires the Federal
                                              BILLING CODE 6731–AA–P                                                                                                     Under the act, federal agencies,
                                                                                                                  Communications Commission to amend
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                                                                                                                                                                         including the Federal Communications
                                                                                                                  its forfeiture penalty rules for inflation.
                                                                                                                                                                         Commission, must issue an interim final
                                                                                                                  DATES: This rule is effective August 1,                rulemaking and publish interim final
                                                                                                                  2016.                                                  rules by July 1, 2016, which will take
                                                                                                                  FOR FURTHER INFORMATION CONTACT:                       effect by August 1, 2016. According to
                                                                                                                  Donna Cyrus, Enforcement Bureau, 202–                  the 2015 Inflation Adjustment Act, the
                                                                                                                  418–7325.                                              initial inflation adjustment will be the


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Document Created: 2018-02-08 07:44:44
Document Modified: 2018-02-08 07:44:44
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 rule is effective on August 1, 2016.
ContactTyler Wood, General Counsel, Federal Maritime Commission, 800 North Capitol Street NW., Room 1018, Washington, DC 20573, (202) 523-5740.
FR Citation81 FR 42552 
RIN Number3072-AC63
CFR AssociatedAdministrative Practice and Procedure and Penalties

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