81 FR 62629 - Civil Monetary Penalty Inflation Adjustment

DEPARTMENT OF DEFENSE
Office of the Secretary

Federal Register Volume 81, Issue 176 (September 12, 2016)

Page Range		62629-62631
FR Document		2016-21878

On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act), which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990. The 2015 Act updates the process by which agencies adjust applicable civil monetary penalties (CMP) for inflation to retain the deterrent effect of those penalties. The 2015 Act requires that not later than July 1, 2016, and not later than January 15 of every year thereafter, the head of each agency must, by regulation published in the Federal Register, adjust each CMP within its jurisdiction by the inflation adjustment described in the 2015 Act. Accordingly, the Department of Defense must adjust the level of all civil monetary penalties under its jurisdiction through a final rule and make subsequent annual adjustments for inflation.

Federal Register, Volume 81 Issue 176 (Monday, September 12, 2016)

[Federal Register Volume 81, Number 176 (Monday, September 12, 2016)]
[Rules and Regulations]
[Pages 62629-62631]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-21878]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 269

[Docket ID: DOD-2016-OS-0045]
RIN 0790-AJ42


Civil Monetary Penalty Inflation Adjustment

AGENCY: Under Secretary of Defense (Comptroller), Department of 
Defense.

ACTION: Final rule.

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SUMMARY: On November 2, 2015, the President signed into law the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 
2015 Act), which further amended the Federal Civil Penalties Inflation 
Adjustment Act of 1990. The 2015 Act updates the process by which 
agencies adjust applicable civil monetary penalties (CMP) for inflation 
to retain the deterrent effect of those penalties. The 2015 Act 
requires that not later than July 1, 2016, and not later than January 
15 of every year thereafter, the head of each agency must, by 
regulation published in the Federal Register, adjust each CMP within 
its jurisdiction by the inflation adjustment described in the 2015 Act. 
Accordingly, the Department of Defense must adjust the level of all 
civil monetary penalties under its jurisdiction through a final rule 
and make subsequent annual adjustments for inflation.

DATES: This rule is effective September 12, 2016.

FOR FURTHER INFORMATION CONTACT: Brian Banal, 703-571-1652.

SUPPLEMENTARY INFORMATION: On Thursday, May 26, 2016 (81 FR 33389-
33391), the Department of Defense published an interim final rule 
titled ``Civil Monetary Penalty Inflation Adjustment'' for a 60-day 
public comment period. The public comment period ended on July 25, 
2016. No public comments were received.
    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 requires agencies to adjust the level of civil monetary 
penalties through a final rule in the Federal Register.

Background Information

    The Federal Civil Penalties Inflation Adjustment Act of 1990, 
Public Law 101-410, 104 Stat. 890 (28 U.S.C. 2461, note), as amended by 
the Debt Collection Improvement Act of 1996, Public Law 104-134, April 
26, 1996, and further amended by the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 (the 2015 Act), Public Law 114-
74, November 2, 2015, requires agencies to annually adjust the level of 
Civil Monetary Penalties (CMP) for inflation to improve their 
effectiveness and maintain their deterrent effect. The 2015 Act 
requires that not later than July 1, 2016, and not later than January 
15 of every year thereafter, the head of each agency must adjust each 
CMP within its jurisdiction by the inflation adjustment described in 
the 2015 Act. The inflation adjustment must be determined by increasing 
the maximum CMP or the range of minimum and maximum CMPs, as 
applicable, for each CMP by the cost-of-living adjustment, rounded to 
the nearest multiple of $1. The cost-of-living adjustment is the 
percentage (if any) for each CMP by which the Consumer Price Index 
(CPI) for the month of October preceding the date of the adjustment 
(January 15), exceeds the CPI for the month of October in the previous 
calendar year. The initial adjustment to a CMP may not exceed 150 
percent of the corresponding level in effect on November 2, 2015.
    Any increased penalties will only apply to violations which occur 
after the date on which the increase takes effect.
    Each CMP subject to the jurisdiction of the Department of Defense 
has been adjusted in accordance with the 2015 Act. In compliance with 
the 2015 Act, the Department of Defense is amending its CMP penalty 
amounts.

Executive Summary

    On November 2, 2015, the President signed into law the Federal 
Civil Penalties Inflation Adjustment Act

[[Page 62630]]

Improvements Act of 2015 (the 2015 Act), which further amended the 
Federal Civil Penalties Inflation Adjustment Act of 1990 (the Inflation 
Adjustment Act). The 2015 Act updates the process by which agencies 
adjust applicable civil monetary penalties for inflation to retain the 
deterrent effect of those penalties. Agencies are required to make an 
initial ``catch-up'' adjustment for civil monetary penalties with the 
new levels published in the Federal Register by July 1, 2016, to take 
effect no later than August 1, 2016. Thereafter, agencies are required 
to make annual inflationary adjustments, starting January 15, 2017, and 
each year following, based on Office of Management and Budget (OMB) 
guidance. Finally, each year in accordance with OMB Circular A-136, 
agencies will report in the Agency Financial Reports the status of 
adjustments to civil monetary penalties.

I. Purpose of the Regulatory Action

    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015, Public Law 114-74, requires the Department of Defense to 
adjust applicable civil monetary penalties for inflation to improve the 
effectiveness and retain the deterrent effect of such penalties. The 
implementation of this rule will deter violations of law, encourage 
corrective action(s) of existing violations, and prevent waste, fraud, 
and abuse within the Department of Defense.

Description of Authority Citation

    Section 4(a) of the Federal Civil Penalties Inflation Adjustment 
Act of 1990, as amended, (28 U.S.C. 2461, note), mandates that not 
later than July 1, 2016, and not later than January 15 of every year 
thereafter, the head of each agency (in this case the Secretary of 
Defense) must adjust for inflation each civil monetary penalty provided 
by law within the jurisdiction of the Federal agency (in this case the 
Department of Defense), except for any penalty (including any addition 
to tax and additional amount) under the Internal Revenue Code of 1986 
[26 U.S.C. 1 et seq.] or the Tariff Act of 1930 [19 U.S.C. 1202 et 
seq.], through a final rulemaking; and publish each such adjustment in 
the Federal Register.

II. Summary of the Major Provisions of the Regulatory Action in 
Question

    Previously, the Debt Collection Improvement Act of 1996 required 
agencies to adjust civil monetary penalty levels every four years. The 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015 (the 2015 Act) Act updates this requirement, requiring annual 
adjustments for inflation based on Office of Management and Budget 
(OMB) guidance.
    In accordance with the 2015 Act, OMB will provide adjustment rate 
guidance no later than December 15, 2016, and no later than December 15 
for each following year, to adjust for inflation in the Consumer Price 
Index for all Urban Consumers as of the most recent October. Agencies 
are required to publish annual inflation adjustments in the Federal 
Register no later than January 15, starting in 2017, and each 
subsequent year.
    Agency heads are responsible for implementing this guidance and for 
submitting information to OMB annually on applicable civil monetary 
penalties through Agency Financial Reports in accordance with OMB 
Circular A-136.

III. Costs and Benefits

    There are no significant costs associated with the regulatory 
revisions that would impose any mandates on the Department of Defense, 
Federal, State or local governments, or the private sector. The 
Department of Defense anticipates that civil monetary penalty 
collections may increase in the future due to new penalty authorities 
and other changes in this rule. However, it is difficult to accurately 
predict the extent of any increase, if any, due to a variety of 
factors, such as budget and staff resources, the number and quality of 
civil penalty referrals or leads, and the length of time needed to 
investigate and resolve a case.

Regulatory Procedures

Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distribute impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has not been designated a ``significant 
regulatory action,'' because it does not: (1) Have an annual effect on 
the economy of $100 million or more or adversely affect in a material 
way the economy; a section of the economy; productivity; competition; 
jobs; the environment; public health or safety; or State, local, or 
tribal governments or communities; (2) create a serious inconsistency 
or otherwise interfere with an action taken or planned by another 
Agency; (3) materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs, or the rights and obligations of 
recipients thereof; or (4) raise novel legal or policy issues arising 
out of legal mandates, the President's priorities, or the principles 
set forth in these Executive Orders.

Unfunded Mandates Reform Act (2 U.S.C. Chapter 25)

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 
U.S.C. 1532) requires agencies to assess anticipated costs and benefits 
before issuing any rule the mandates of which require spending in any 
year of $100 million in 1995 dollars, updated annually for inflation. 
In 2014, that threshold is approximately $141 million. This rule will 
not mandate any requirements for State, local, or tribal governments, 
nor will it affect private sector costs.

Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. Chapter 6)

    The Department of Defense certifies that this rule is not subject 
to the Regulatory Flexibility Act because it would not, if promulgated, 
have a significant economic impact on a substantial number of small 
entities. Therefore, the Regulatory Flexibility Act, as amended, does 
not require a regulatory flexibility analysis.

Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    The Department of Defense certifies that this rule does not trigger 
any reporting or recordkeeping requirements under the Paperwork 
Reduction Act of 1995.

Executive Order 13132, ``Federalism''

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This final rule will not have a substantial effect on 
State and local governments.

List of Subjects in 32 CFR Part 269

    Administrative practice and procedure, Penalties.

[[Page 62631]]


0
Accordingly, the interim final rule published at 81 FR 33389-33391 on 
May 26, 2016 is adopted as a final rule without change.

    Dated: September 7, 2016.
Patricia L. Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2016-21878 Filed 9-9-16; 8:45 am]
 BILLING CODE 5001-06-P

62630 Federal Register / Vol. 81, No. 176 / Monday, September 12, 2016 / Rules and Regulations

Improvements Act of 2015 (the 2015 2015 (the 2015 Act) Act updates this the economy; productivity; competition;
Act), which further amended the requirement, requiring annual jobs; the environment; public health or
Federal Civil Penalties Inflation adjustments for inflation based on safety; or State, local, or tribal
Adjustment Act of 1990 (the Inflation Office of Management and Budget governments or communities; (2) create
Adjustment Act). The 2015 Act updates (OMB) guidance. a serious inconsistency or otherwise
the process by which agencies adjust In accordance with the 2015 Act, interfere with an action taken or
applicable civil monetary penalties for OMB will provide adjustment rate planned by another Agency; (3)
inflation to retain the deterrent effect of guidance no later than December 15, materially alter the budgetary impact of
those penalties. Agencies are required to 2016, and no later than December 15 for entitlements, grants, user fees, or loan
make an initial ‘‘catch-up’’ adjustment each following year, to adjust for programs, or the rights and obligations
for civil monetary penalties with the inflation in the Consumer Price Index of recipients thereof; or (4) raise novel
new levels published in the Federal for all Urban Consumers as of the most legal or policy issues arising out of legal
Register by July 1, 2016, to take effect recent October. Agencies are required to mandates, the President’s priorities, or
no later than August 1, 2016. Thereafter, publish annual inflation adjustments in the principles set forth in these
agencies are required to make annual the Federal Register no later than Executive Orders.
inflationary adjustments, starting January 15, starting in 2017, and each
January 15, 2017, and each year Unfunded Mandates Reform Act
subsequent year.
following, based on Office of Agency heads are responsible for (2 U.S.C. Chapter 25)
Management and Budget (OMB) implementing this guidance and for Section 202 of the Unfunded
guidance. Finally, each year in submitting information to OMB Mandates Reform Act of 1995 (UMRA)
accordance with OMB Circular A–136, annually on applicable civil monetary (2 U.S.C. 1532) requires agencies to
agencies will report in the Agency penalties through Agency Financial assess anticipated costs and benefits
Financial Reports the status of Reports in accordance with OMB before issuing any rule the mandates of
adjustments to civil monetary penalties. Circular A–136. which require spending in any year of
I. Purpose of the Regulatory Action III. Costs and Benefits $100 million in 1995 dollars, updated
annually for inflation. In 2014, that
The Federal Civil Penalties Inflation There are no significant costs threshold is approximately $141
Adjustment Act Improvements Act of associated with the regulatory revisions million. This rule will not mandate any
2015, Public Law 114–74, requires the that would impose any mandates on the requirements for State, local, or tribal
Department of Defense to adjust Department of Defense, Federal, State or governments, nor will it affect private
applicable civil monetary penalties for local governments, or the private sector. sector costs.
inflation to improve the effectiveness The Department of Defense anticipates
and retain the deterrent effect of such that civil monetary penalty collections Public Law 96–354, ‘‘Regulatory
penalties. The implementation of this may increase in the future due to new Flexibility Act’’ (5 U.S.C. Chapter 6)
rule will deter violations of law, penalty authorities and other changes in The Department of Defense certifies
encourage corrective action(s) of this rule. However, it is difficult to that this rule is not subject to the
existing violations, and prevent waste, accurately predict the extent of any Regulatory Flexibility Act because it
fraud, and abuse within the Department increase, if any, due to a variety of would not, if promulgated, have a
of Defense. factors, such as budget and staff significant economic impact on a
Description of Authority Citation resources, the number and quality of substantial number of small entities.
civil penalty referrals or leads, and the Therefore, the Regulatory Flexibility
Section 4(a) of the Federal Civil length of time needed to investigate and
Penalties Inflation Adjustment Act of Act, as amended, does not require a
resolve a case. regulatory flexibility analysis.
1990, as amended, (28 U.S.C. 2461,
note), mandates that not later than July Regulatory Procedures Public Law 96–511, ‘‘Paperwork
1, 2016, and not later than January 15 Executive Order 12866, ‘‘Regulatory Reduction Act’’ (44 U.S.C. Chapter 35)
of every year thereafter, the head of each Planning and Review’’ and Executive
agency (in this case the Secretary of The Department of Defense certifies
Order 13563, ‘‘Improving Regulation that this rule does not trigger any
Defense) must adjust for inflation each and Regulatory Review’’
civil monetary penalty provided by law reporting or recordkeeping requirements
within the jurisdiction of the Federal Executive Orders 13563 and 12866 under the Paperwork Reduction Act of
agency (in this case the Department of direct agencies to assess all costs and 1995.
Defense), except for any penalty benefits of available regulatory Executive Order 13132, ‘‘Federalism’’
(including any addition to tax and alternatives and, if regulation is
additional amount) under the Internal necessary, to select regulatory Executive Order 13132 establishes
Revenue Code of 1986 [26 U.S.C. 1 et approaches that maximize net benefits certain requirements that an agency
seq.] or the Tariff Act of 1930 [19 U.S.C. (including potential economic, must meet when it promulgates a
1202 et seq.], through a final environmental, public health and safety proposed rule (and subsequent final
rulemaking; and publish each such effects, distribute impacts, and equity). rule) that imposes substantial direct
adjustment in the Federal Register. Executive Order 13563 emphasizes the requirement costs on State and local
importance of quantifying both costs governments, preempts State law, or
asabaliauskas on DSK3SPTVN1PROD with RULES

II. Summary of the Major Provisions of and benefits, of reducing costs, of otherwise has Federalism implications.
the Regulatory Action in Question harmonizing rules, and of promoting This final rule will not have a
Previously, the Debt Collection flexibility. This rule has not been substantial effect on State and local
Improvement Act of 1996 required designated a ‘‘significant regulatory governments.
agencies to adjust civil monetary action,’’ because it does not: (1) Have an
List of Subjects in 32 CFR Part 269
penalty levels every four years. The annual effect on the economy of $100
Federal Civil Penalties Inflation million or more or adversely affect in a Administrative practice and
Adjustment Act Improvements Act of material way the economy; a section of procedure, Penalties.

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Federal Register / Vol. 81, No. 176 / Monday, September 12, 2016 / Rules and Regulations 62631

■ Accordingly, the interim final rule Member Services 3401 SW 21st St. 1995 (44 U.S.C. 3501–3521), no new or
published at 81 FR 33389–33391 on Building 9 Topeka, KS 66604; 785–925– revised collections of information are
May 26, 2016 is adopted as a final rule 0605. (This is not a toll-free number.) associated with this final rule. It amends
without change. SUPPLEMENTARY INFORMATION: On March an approved collection by allowing a
Dated: September 7, 2016. 16, 2016, VA published an interim final new method for veterans to submit the
Patricia L. Toppings, rule amending § 17.36(d)(1) of title 38, requested information, but this change
Code of Federal Regulations (CFR). 81 does not affect the burden on the public
OSD Federal Register Liaison Officer,
Department of Defense. FR 13994. The amendment allows under the approved collection. The
veterans to apply for enrollment in the information collection requirements for
[FR Doc. 2016–21878 Filed 9–9–16; 8:45 am]
VA healthcare system by telephone; in 38 CFR 17.36(d)(1) are currently
BILLING CODE 5001–06–P
particular, it allows veterans to consent approved by the Office of Management
over the phone to pay any copayments and Budget (OMB) and have been
the law requires for treatment or assigned OMB control number 2900–
DEPARTMENT OF EDUCATION services and to assign insurance benefits 0091.
34 CFR Chapter III to VA. Regulatory Flexibility Act
VA invited interested persons to
[Docket ID ED–2016–OSERS–0022; CFDA comment on the interim final rule on or The Secretary hereby certifies that
Number: 84.421B.] before May 16, 2016. We received two this final rule does not have a
comments. One commenter expressed significant economic impact on a
Final Priorities, Requirements, and concern over medications provided to substantial number of small entities as
Definition—Disability Innovation veterans with overseas service in the they are defined in the Regulatory
Fund—Transition Work-Based 1970s. The other sought VA assistance Flexibility Act, 5 U.S.C. 601–612. This
Learning Model Demonstrations with a claim for VA benefits. Both of final rule directly affects only
these comments are outside the scope of individuals and does not directly affect
Correction
this rulemaking. We are, therefore, small entities. Therefore, pursuant to 5
In rule document 2016–18031 U.S.C. 605(b), this rulemaking is exempt
making no changes based on those
beginning on page 50324 in the issue of from the initial and final regulatory
comments.
Monday, August 1, 2016, make the Based on the rationale in the interim flexibility analysis requirements of 5
following correction: final rule and in this final rule, VA is U.S.C. 603 and 604.
On page 50324, in the second column,
adopting the interim final rule as final Executive Order 12866 and 13563
under the DATES heading, in the last line
with no changes.
‘‘October 9, 2016’’ should read Executive Orders 12866 and 13563
‘‘September 6, 2016’’. Administrative Procedure Act direct agencies to assess the costs and
[FR Doc. C3–2016–18031 Filed 9–9–16; 8:45 am] The Secretary of Veterans Affairs benefits of available regulatory
BILLING CODE 1505–01–D determined there was good cause under alternatives and, when regulation is
5 U.S.C. 553(b)(B) to publish this rule necessary, to select regulatory
without prior opportunity for public approaches that maximize net benefits
DEPARTMENT OF VETERANS comment. The Secretary concluded that (including potential economic,
AFFAIRS failure to authorize verbal applications environmental, public health and safety
as soon as possible was contrary to the effects, and other advantages;
38 CFR Part 17 public interest because it prolonged distributive impacts; and equity).
delays in processing applications for Executive Order 13563 (Improving
RIN 2900–AP68 Regulation and Regulatory Review)
enrollment in the VA healthcare system.
We dispensed with the 30-day delay emphasizes the importance of
Telephone Enrollment in the VA
requirement for the effective date of a quantifying both costs and benefits,
Healthcare System
rule for good cause under 5 U.S.C. reducing costs, harmonizing rules, and
AGENCY: Department of Veterans Affairs. 553(d)(3). We anticipated that this promoting flexibility. Executive Order
ACTION: Final rule. regulation would be uncontroversial 12866 (Regulatory Planning and
and believed that any further delay in Review) defines a ‘‘significant
SUMMARY: The Department of Veterans regulatory action,’’ requiring review by
Affairs (VA) adopts as final, without allowing VA to complete applications
by telephone would be contrary to the OMB, unless OMB waives such review,
change, an interim final rule amending as ‘‘any regulatory action that is likely
its medical regulations. Specifically, public interest.
to result in a rule that may: (1) Have an
this rule allows veterans to complete Effect of Rulemaking annual effect on the economy of $100
applications for health care enrollment The Code of Federal Regulations, as million or more or adversely affect in a
by providing application information, revised by this final rulemaking, material way the economy, a sector of
agreeing to VA’s provisions regarding represents the exclusive legal authority the economy, productivity, competition,
copayment liability and assignment of on this subject. No contrary rules or jobs, the environment, public health or
third-party insurance benefits, and procedures are authorized. All VA safety, or State, local, or tribal
attesting to the accuracy and guidance must be read to conform with governments or communities; (2) Create
authenticity of the information provided this interim final rulemaking if possible a serious inconsistency or otherwise
asabaliauskas on DSK3SPTVN1PROD with RULES

to a VA employee over the phone. This or, if not possible, such guidance is interfere with an action taken or
action makes it easier for veterans to superseded by this rulemaking. planned by another agency; (3)
apply to enroll and speeds VA Materially alter the budgetary impact of
processing of applications. Paperwork Reduction Act entitlements, grants, user fees, or loan
DATES: Effective Date: This rule is Although this final rule contains programs or the rights and obligations of
effective on September 12, 2016. provisions constituting collections of recipients thereof; or (4) Raise novel
FOR FURTHER INFORMATION CONTACT: information, at 38 CFR 17.36(d)(1), legal or policy issues arising out of legal
Mathew J. Eitutis, Acting Director, under the Paperwork Reduction Act of mandates, the President’s priorities, or

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Document Created: 2016-09-10 00:57:09
Document Modified: 2016-09-10 00:57:09

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		This rule is effective September 12, 2016.
Contact		Brian Banal, 703-571-1652.
FR Citation		81 FR 62629
RIN Number		0790-AJ42
CFR Associated		Administrative Practice and Procedure and Penalties

81 FR 62629 - Civil Monetary Penalty Inflation Adjustment

DEPARTMENT OF DEFENSEOffice of the Secretary

Federal Register Volume 81, Issue 176 (September 12, 2016)

DEPARTMENT OF DEFENSE
Office of the Secretary