81 FR 46827 - Program Fraud Civil Remedies: Civil Monetary Penalty Inflation Adjustment

OFFICE OF PERSONNEL MANAGEMENT

Federal Register Volume 81, Issue 138 (July 19, 2016)

This rule adjusts the level of civil monetary penalties contained in U.S. Office of Personnel Management regulations implementing the Program Fraud Civil Remedies Act of 1986, with an initial ``catch-up'' adjustment under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and Office of Management and Budget guidance.

[Federal Register Volume 81, Number 138 (Tuesday, July 19, 2016)]
[Rules and Regulations]
[Pages 46827-46828]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-17026]



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Federal Register / Vol. 81, No. 138 / Tuesday, July 19, 2016 / Rules 
and Regulations

[[Page 46827]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 185

RIN 3206-AN39


Program Fraud Civil Remedies: Civil Monetary Penalty Inflation 
Adjustment

AGENCY: Office of Personnel Management (OPM).

ACTION: Interim rule.

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SUMMARY: This rule adjusts the level of civil monetary penalties 
contained in U.S. Office of Personnel Management regulations 
implementing the Program Fraud Civil Remedies Act of 1986, with an 
initial ``catch-up'' adjustment under the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015 and Office of 
Management and Budget guidance.

DATES: Effective Date: August 1, 2016.
    Comment Date: Comments due on or before August 18, 2016.

ADDRESSES: You may submit comments, identified by RIN 3206-AN39, by any 
of the following methods:
    1. Internet--Send comments via email to [email protected].
    2. Fax--(202) 606-0082.
    3. Mail--Office of the General Counsel, ATTN: Katherine Pickar, 
Office of Personnel Management, 1900 E St. NW., Washington, DC 20415.
    Do not submit the same comments multiple times or by more than one 
method. Regardless of which method you choose, please state that your 
comments refer to RIN 3206-AN39.
    Caution: You should be careful to include in your comments only 
information that you wish to make publicly available as comments are 
posted without change, with any personal information provided. OPM 
strongly urges you not to include in your comments any personal 
information, such as Social Security numbers, Civil Service Annuity/
Final numbers, and/or medical information.

FOR FURTHER INFORMATION CONTACT: Katherine M. Pickar, Office of the 
General Counsel, Office of Personnel Management, 1900 E St. NW., 
Washington, DC 20415, [email protected], (202) 606-1700.

SUPPLEMENTARY INFORMATION: 

I. Background

    On November 2, 2015, the President signed into law the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 
701 of Pub. L. 114-74) (``the Act''). The Act requires agencies to: (1) 
Adjust the level of civil monetary penalties with an initial ``catch-
up'' adjustment through an interim final rulemaking, and (2) make 
subsequent annual adjustments for inflation. The purpose of these 
adjustments is to maintain the deterrent effect of civil penalties.
    This rule adjusts the following civil monetary penalties:

----------------------------------------------------------------------------------------------------------------
                                           Description of the         Current         Catchup        Adjusted
             CFR Citation                        penalty              penalty       adjustment        penalty
----------------------------------------------------------------------------------------------------------------
5 CFR 185.103(a)......................  Civil Penalty for False           $5,000          $5,781         $10,781
                                         Claims.
5 CFR 185.103(f)(2)...................  Civil Penalty for False            5,000           5,781          10,781
                                         Statements.
----------------------------------------------------------------------------------------------------------------

    This interim final rule is being issued without prior public notice 
or opportunity for public comments. The 2015 Act's amendments to the 
Inflation Adjustment Act require the agency to adjust penalties 
initially through an interim final rulemaking, which does not require 
the agency to complete a notice and comment process prior to 
promulgating the interim final rule. The amendments also explicitly 
require the agency to make subsequent annual adjustments 
notwithstanding 5 U.S.C. 553 (the section of the Administrative 
Procedure Act that normally requires agencies to engage in notice and 
comment). Additionally, the formula used for adjusting the amount of 
civil penalties is given by statute, with no discretion provided to OPM 
regarding the substance of the adjustments. OPM is charged only with 
performing ministerial computations to determine the amount of 
adjustment to the civil penalties due to increases in the Consumer 
Price Index for all Urban Consumers (CPI-U).

II. Calculation of Adjustment

    The Office of Management and Budget (OMB) issued guidance on 
calculating the catch-up adjustment. See February 24, 2016, Memorandum 
for the Heads of Executive Departments and Agencies, from Shaun 
Donovan, Director, Office of Management and Budget, re: Implementation 
of the Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015. Under this guidance, OPM has identified applicable civil 
monetary penalties and calculated the catch-up adjustment. A civil 
monetary penalty is any assessment with a dollar amount that is levied 
for a violation of a Federal civil statute or regulation, and is 
assessed or enforceable through a civil action in Federal court or an 
administrative proceeding. A civil monetary penalty does not include a 
penalty levied for violation of a criminal statute, or fees for 
services, licenses, permits, or other regulatory review. The calculated 
catch-up adjustment is based on the percent change between the Consumer 
Price Index for all Urban Consumers (CPI-U) for the month of October in 
the year of the previous adjustment (or in the year of establishment, 
if no adjustment has been made) and the October 2015 CPI-U.
    For purposes of the initial adjustment under the 2015 Act, while 5 
CFR part 185 was not promulgated until 1995, the civil penalties listed 
in part 185 were established in 1986 with the enactment of the Program 
Fraud Civil Remedies Act of 1986, Public Law 99-509, Sec. Sec.  6101-
6104, 100 Stat. 1874 (October 21, 1986), codified at 31 U.S.C. 3801-
3812. The amount of the penalties have not been changed since 1986. The 
1986

[[Page 46828]]

establishment of the Program Fraud Civil Remedies Act of 1986 serves as 
the base figure for the inflation calculation. Between October 1986 and 
October 2015, the CPI-U has increased by 215.628 percent. The post-
adjustment penalty amount or range is obtained by multiplying the pre-
adjustment penalty amount or range by the percent change in the CPI-U 
over the relevant time period, and rounding to the nearest dollar. 
Therefore, the new, post-adjustment penalty under the PFCRA is $5,000 x 
2.15628 = $10,781.40, which rounds to $10,781. The new, post-adjustment 
penalties are less than 250 percent of the pre-adjustment penalties, so 
the limitation on the amount of the adjustment is not implicated.

III. Procedural Requirements

A. Regulatory Impact Analysis: Executive Order 12866, as Supplemented 
by Executive Order 13563

    OPM, with the concurrence of the Office of Management and Budget 
(OMB), has determined that this is not a significant regulatory action 
under Executive Order 12866, as supplemented by Executive Order 13563. 
Therefore, no regulatory impact analysis is required.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires an agency to prepare 
a regulatory flexibility analysis for rules unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. The RFA applies only to rules for 
which an agency is required to first publish a proposed rule. See 5 
U.S.C. 603(a) and 604(a). The Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 requires agencies to adjust 
civil penalties with an initial catch-up adjustment through an interim 
final rule. An interim final rule does not include first publishing a 
proposed rule. Thus, the RFA does not apply to this final rule.

C. Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 804(2))

    This rule is not a major rule under the Small Business Regulatory 
Enforcement Fairness Act. This rule:
    (a) Does not have an annual effect on the economy of $100 million 
or more.
    (b) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (c) Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
United States-based enterprises to compete with foreign-based 
enterprises.

D. Unfunded Mandate Reform Act of 1995 (2 U.S.C. 1532)

    This rule does not involve a Federal mandate that may result in the 
expenditure by State, local and tribal governments, in the aggregate, 
or by the private sector, of $100 million or more and that such 
rulemaking will not significantly or uniquely affect small governments.

E. E.O. 12630, Takings

    This rule does not have takings implications.

F. E.O. 13132, Federalism

    This rule does not have federalism implications. The rule does 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.

G. E.O. 12988, Civil Justice Reform

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:
    (a) Does not unduly burden the judicial system.
    (b) Meets the criteria of section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    (c) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

H. E.O. 13175, Consultation With Indian Tribes

    In accordance with Executive Order 13175, OPM has evaluated this 
rule and determined that it has no tribal implications.

I. Paperwork Reduction Act

    This document does not contain information collection requirements 
subject to the Paperwork Reduction Act of 1995, Public Law 104-13.

List of Subjects in 5 CFR Part 185

    Administrative practice and procedure, Claims, Fraud, Penalties.

U.S. Office of Personnel Management.
Beth F. Cobert,
Acting Director.

    For the reasons set forth in the preamble, amend part 185 of title 
5 of the Code of Federal Regulations as follows:

PART 185--PROGRAM FRAUD CIVIL REMEDIES: CIVIL MONETARY PENALTY 
INFLATION ADJUSTMENT

0
1. The authority citation for part 185 is revised to read as follows:

    Authority:  28 U.S.C. 2461 note; 31 U.S.C. 3801-3812.


Sec.  185.103  [Amended]

0
2. Section 185.103 is amended as follows:
0
a. In paragraph (a) introductory text, remove ``$5,000'' and add in its 
place ``$10,781''.
0
b. In paragraph (f)(2), remove ``$5,000'' and add in its place 
``$10,781''.

[FR Doc. 2016-17026 Filed 7-18-16; 8:45 am]
 BILLING CODE 6325-48-P