Federal Register Vol. 81, No.127,

The U.S. Department of Homeland Security (DHS) and U.S. Department of Labor (DOL) (collectively, “the Departments”) are promulgating this interim final rule to ensure that the amount of civil penalties assessed or enforced in our joint rules reflect the statutorily mandated maximum as adjusted for inflation. Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (“Inflation Adjustment Act”), the Departments are required to promulgate a “catch-up adjustment” through an interim final rule. Pursuant to the Inflation Adjustment Act and 5 U.S.C. 553(b)(3)(B), the Departments find that good cause exists for issuance of this interim final rule without prior notice and comment. By operation of the Inflation Adjustment Act, the Departments must publish the catch-up adjustment by July 1, 2016, and the rule must be effective no later than August 1, 2016. The Inflation Adjustment Act further provides that the increased penalty levels apply to any penalties assessed after the effective date of the increase. Additionally, the Inflation Adjustment Act provides a clear formula for adjustment of the civil penalties, leaving the agencies little room for discretion. Both because of the requirement for action by July 1 of this year, and because of the mechanistic nature of the rulemaking, the Departments find that notice and comment prior to issuing the inflation adjustment would be impracticable and unnecessary, respectively, in addition to being contrary to the language of the Inflation Adjustment Act.

On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Pub. L. 114-74, 701 (“Inflation Adjustment Act”), which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990, Pub. L. 101-410, as previously amended by the 1996 Debt Collection Improvement Act (collectively, the “Prior Inflation Adjustment Act”), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The Inflation Adjustment 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 method of calculating inflation adjustments in the Inflation Adjustment Act differs substantially from the methods used in past inflation adjustment rulemakings conducted pursuant to the Prior Inflation Act. Previously, adjustments to civil penalties were conducted under rules that required significant rounding of figures. For example, a penalty increase that was greater than $1,000, but less than or equal to $10,000, would be rounded to the nearest multiple of $1,000. While this allowed penalties to be kept at round numbers, it meant that penalties would often not be increased at all if the inflation factor was not large enough. Furthermore, increases to penalties were capped at 10 percent. Over time, this formula caused penalties to lose value relative to total inflation.

The Inflation Adjustment Act has removed these rounding rules; now, penalties are simply rounded to the nearest $1. This rounding ensures that penalties will be increased each year to a figure commensurate with the actual calculated inflation, and ensures that penalties are more easily and consistently updated. Furthermore, the Inflation Adjustment Act “resets” the inflation calculations by excluding prior inflationary adjustments under the Prior Inflation Act, which contributed to a decline in the real value of penalty levels. To do this, the Inflation Adjustment Act requires agencies to identify, for each penalty, the year and corresponding amount(s) for which the maximum penalty level or range of minimum and maximum penalties was established (i.e., originally enacted by Congress or by regulation) or last adjusted other than pursuant to the Prior Inflation Act.

Pursuant to the Inflation Adjustment Act, the Departments have reviewed the civil penalties for the H-2B program that are enforced by the Department of Labor. This interim final rule sets forth the initial “catch-up” adjustment only for these civil penalties. As required by the Inflation Adjustment Act, these civil penalties levels will subsequently be adjusted annually for inflation.

The Immigration and Nationality Act (INA) establishes the H-2B nonimmigrant classification for a non-agricultural temporary worker “having a residence in a foreign country which he has no intention of abandoning who is coming temporarily to the United States to perform . . . temporary [non-agricultural] service or labor if unemployed persons capable of performing such service or labor cannot be found in this country.” 8 U.S.C. 1101(a)(15)(H)(ii)(b), INA section 101(a)(15)(H)(ii)(b). DHS, which is charged with administration of the H-2B program, may grant a petition for an H-2B nonimmigrant worker “after consultation with appropriate agencies of the Government.” 8 U.S.C. 1184(c)(1), INA section 214(c)(1). DHS regulations therefore provide that an H-2B petition for temporary employment in the United States must be accompanied by an approved temporary labor certification from DOL. 8 CFR 214.2(h)(6)(iii)(A) and (iv)(A). The temporary labor certification serves as DHS's consultation with DOL with respect to whether a qualified U.S. worker is available to fill the petitioning H-2B employer's job opportunity and whether a foreign worker's employment in the job opportunity will adversely affect the wages or working conditions of similarly employed U.S. workers. See 8 CFR 214.2(h)(6)(iii)(A) and (D).1

The INA also authorizes DHS to impose appropriate remedies, including civil monetary penalties, against an employer for a substantial failure to meet the terms and conditions of employing an H-2B nonimmigrant worker, or for a willful misrepresentation of a material fact in a petition for an H-2B nonimmigrant worker. 8 U.S.C. 1184(c)(14)(A), INA section 214(c)(14)(A). The INA expressly and specifically authorizes DHS to delegate to DOL the aforementioned H-2B enforcement authorities. 8 U.S.C. 1184(c)(14)(B), INA section 214(c)(14)(B). DHS has delegated this authority to DOL, including authority over the civil monetary penalty established by law at associated 8 U.S.C. 1184(c)(14)(A)(i), INA section 214(c)(14)(A)(i). See DHS, Delegation of Authority to DOL under Section 214(c)(14)(A) of the Immigration and Nationality Act (Jan. 16, 2009) (available in the online docket for this Interim Final Rule at http://www.regulations.gov, in the Supporting Documents section); see 8 CFR 214.2(h)(6)(ix) (stating that DOL may investigate employers to enforce compliance with the conditions of, among other things, an H-2B petition and a DOL-approved temporary labor certification). Consistent with 8 CFR 214.2(h)(6)(ix) and DHS's delegation of statutory enforcement authority, DOL has authority to independently set, adjust, and impose civil monetary penalties under 8 U.S.C. 1184(c)(14)(A)(i), INA section 214(c)(14)(A)(i), and the Inflation Adjustment Act, amending the Prior Inflation Act.

On April 29, 2015, following a court's vacatur of nearly all of DOL's H-2B regulations, the Departments jointly promulgated an interim final rule governing DOL's role in enforcing the statutory and regulatory rights and obligations applicable to employment under the H-2B program. See Temporary Non-Agricultural Employment of H-2B Aliens in the United States, 80 FR 24,042 (Apr. 29, 2015) (codified at 8 CFR part 214, 20 CFR part 655, and 29 CFR part 503) (“2015 H-2B IFR”). These regulations include a provision regarding the assessment of civil monetary penalties by the Department of Labor. See 29 CFR 503.23.

As explained in the 2015 H-2B IFR, following conflicting legal decisions about the Department of Labor's authority to independently issue legislative rules to carry out its duties for the H-2B program under the INA, the Departments jointly issued the 2015 H-2B IFR “to ensure that there can be no question about the authority for and validity of the regulations in this area.” See 80 FR 24,045; see also 24,044-47. The Departments further explained that by issuing the 2015 H-2B IFR jointly, “the Departments affirm that this rule is fully consistent with the INA and implementing DHS regulations and is vital to DHS's ability to faithfully implement the statutory labor protections attendant to the program.” Id.

Litigation on these and related matters is ongoing. Accordingly, notwithstanding that DOL has authority to independently issue this inflation adjustment, and to ensure that there can be no question about the authority underlying this action, DHS and DOL are jointly issuing this Interim Final Rule.2 The Interim Final Rule implements the Federal Civil Penalties Inflation Adjustment Act's requirements with respect to the civil monetary penalty provisions found at 29 CFR 503.23.

Section 214(c)(14) of the INA, 8 U.S.C. 1184(c)(14), provides for the imposition of civil money penalties for a substantial failure to meet the terms and conditions of employing an H-2B nonimmigrant worker, or for a willful misrepresentation of a material fact in a petition for an H-2B nonimmigrant worker. This civil money penalty appears in regulation at 29 CFR 503.23. Applicable violations include those related to wages, impermissible deductions, prohibited fees and expenses, and improper refusal to employ or hire U.S. workers, among others. Existing § 503.23(b), (c), and (d) provide for a civil money penalty not to exceed $10,000 per violation. The maximum penalty amount last established by statute or regulation other than the Inflation Adjustment Act was $10,000 in 2005 and is the same as the existing maximum penalty amount. See Save Our Small and Seasonal Businesses Act of 2005, Title IV of Pub. L. 109-13, 404 (May 11, 2005).

To adjust the existing civil money penalty for this section, the Departments multiplied that maximum penalty amount by the inflation adjustment factor for 2005 of 1.19397, which resulted in a penalty of $11,940. The amount of the increase from $10,000 to $11,940 is $1,940, which is less than the statutory cap of 150% of the existing $10,000 penalty, which is $15,000; accordingly, the amount of the increase is not limited by the statutory cap. Consequently, § 503.23(b), (c), and (d) are revised to increase the maximum penalties for these violations from $10,000 to $11,940 per violation.

The Departments invite comments on the calculations outlined in this interim final rule.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the Departments consider the impact of paperwork and other information collection burdens imposed on the public. The Departments have determined that this interim final rule does not require any collection of information.

Executive Order 12866 requires that regulatory agencies assess both the costs and benefits of significant regulatory actions. Under the Executive Order, a “significant regulatory action” is one meeting any of a number of specified conditions, including the following: Having an annual effect on the economy of $100 million or more; creating a serious inconsistency or interfering with an action of another agency; materially altering the budgetary impact of entitlements or the rights of entitlement recipients, or raising novel legal or policy issues.

The Departments have determined that this interim final rule is not a “significant” regulatory action and a cost-benefit and economic analysis is not required. This regulation merely adjusts civil monetary penalties in accordance with inflation as required by the Inflation Adjustment Act, and has no impact on disclosure or compliance costs. The benefit provided by the inflationary adjustment to the maximum civil monetary penalties is that of maintaining the incentive for the regulated community to comply with the laws enforced by the Departments, and not allowing the incentive to be diminished by inflation.

Executive Order 13563 directs 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, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility to minimize burden.

As provided by Section 701(b)(1)(A) of the Inflation Adjustment Act, the Departments considered whether to publish a notice of proposed rulemaking to explore whether increasing the civil monetary penalty by the otherwise-required amount will have a negative economic impact or whether the social costs of increasing the civil monetary penalty by the otherwise required amount outweighs the benefits. The Departments determined that no such proposed rule is necessary given the modest increases to statutory penalties provided by the Inflation Adjustment Act, especially given the statutory cap.

In that context, Congress has already determined that any possible increase in costs is justified by the overall benefits of such adjustments. This interim final rule makes only the statutory changes outlined herein; thus there are no alternatives or further analysis required by E.O. 13563.

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), imposes certain requirements on Federal agency rules that are subject to the notice and comment requirements of the APA, 5 U.S.C. 553(b), and that are likely to have a significant economic impact on a substantial number of small entities. This interim final rule is exempt from the notice and comment requirements of the APA because the Inflation Adjustment Act directed agencies to issue an interim final rule. Moreover, pursuant to the Inflation Adjustment Act and 5 U.S.C. 553(b)(3)(B), the Departments find that good cause exists for issuing this interim final rule without prior notice and comment. By operation of the Inflation Adjustment Act, the Departments must publish the catch-up adjustment by July 1, 2016, and the rule must be effective no later than August 1, 2016. Additionally, the Inflation Adjustment Act provides a clear formula for adjustment of the civil penalties, leaving the agencies little room for discretion. For these reasons, the Departments find that providing notice and comment before issuing the IFR would be impracticable and unnecessary in this situation and contrary to the language of the Inflation Adjustment Act.

Therefore, the requirements of the RFA applicable to notices of proposed rulemaking, 5 U.S.C. 603, do not apply to this interim final rule. Accordingly, the Departments are not required to either certify that the interim final rule would not have a significant economic impact on a substantial number of small entities or conduct a regulatory flexibility analysis. Indeed, the rule only adjusts for the effects of inflation.

Because the interim final rule simply adjusts for inflation, it does not include any Federal mandate that may result in increased expenditures by State, local, or tribal governments; nor does it increase private sector expenditures by more than $100 million annually; nor does it significantly or uniquely affect small governments. Accordingly, the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501 et seq.) requires no further agency action or analysis.

This interim final rule does not have federalism implications because it 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. Accordingly, Executive Order 13132, Federalism, requires no further agency action or analysis.

This interim final rule does not have “tribal implications” because it does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Accordingly, Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, requires no further agency action or analysis.

This interim final rule will have no effect on family well-being or stability, marital commitment, parental rights or authority, or income or poverty of families and children. Accordingly, section 654 of the Treasury and General Government Appropriations Act of 1999 (5 U.S.C. 601 note) requires no further agency action, analysis, or assessment.

This interim final rule will have no adverse impact on children. Accordingly, Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks, as amended by Executive Orders 13229 and 13296, requires no further agency action or analysis.

This action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This action is therefore categorically excluded from further review under the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321-4375.

This interim final rule has not been identified to have impacts on energy supply. Accordingly, Executive Order 13211 requires no further Agency action or analysis.

This interim final rule will not implement a policy with takings implications. Accordingly, Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, requires no further agency action or analysis.

This interim final rule was drafted and reviewed in accordance with Executive Order 12988, Civil Justice Reform. This interim final rule was written to provide a clear legal standard for affected conduct and was carefully reviewed to eliminate drafting errors and ambiguities, so as to minimize litigation and undue burden on the Federal court system. The Departments have determined that this interim final rule meets the applicable standards provided in section 3 of Executive Order 12988.

Accordingly, for the reasons stated in the preamble, 29 CFR part 503 is amended as follows:

Table of Contents I. Background II. Adjustments by Component A. National Protection and Programs Directorate B. U.S. Customs and Border Protection C. Immigration and Customs Enforcement D. U.S. Coast Guard E. Transportation Security Administration III. Administrative Procedure Act IV. Regulatory Analyses A. Executive Orders 12866 and 13563 B. Regulatory Flexibility Act C. Unfunded Mandates Reform Act D. Paperwork Reduction Act I. Background

On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74 section 701 (Nov. 2, 2105)) (the 2015 Act),1 which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) (the Inflation Adjustment Act), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The 2015 Act requires agencies to: (1) adjust the level of civil monetary penalties with an initial “catch-up” adjustment through issuance of an interim final rule (IFR) and (2) make subsequent annual adjustments for inflation.

The 2015 Act applies to all agency civil penalties 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.) and the Tariff Act of 1930 (19 U.S.C. 1202 et seq.). See sec. 4(a)(1) of the 2015 Act. In the case of DHS, several civil penalties that are collected by U.S. Customs and Border Protection (CBP) and the U.S. Coast Guard fall under the Tariff Act of 1930, and thus DHS is not adjusting those civil penalties in this rulemaking.

The 2015 Act applies the new penalty amounts to all penalties that DHS assesses after August 1, 2016, the effective date of this rule. Additionally, pursuant to 28 U.S.C. 2461 note sec. 6, as amended by the 2015 Act, DHS will apply the adjusted penalty amounts for any violations that occurred after November 2, 2015 (i.e., the date the 2015 Act was signed into law) as long as the penalty is assessed after the effective date of this interim final rule.

The 2015 Act provides a new method for calculating inflation adjustments. The new method differs substantially from the methods that agencies used in the past when conducting inflation adjustments pursuant to the 1990 Inflation Adjustment Act. The new method is intended to more accurately reflect inflation. Previously, when agencies conducted adjustments to civil penalties, they did so under rules that required significant rounding of figures. For example, an agency would round a penalty increase that was greater than $1,000, but less than or equal to $10,000, to the nearest multiple of $1,000. While this allowed penalties to be kept at round numbers, it meant that agencies would often not increase penalties at all if the inflation factor was not large enough. Furthermore, increases to penalties were capped at 10 percent, which meant that longer periods without an inflation adjustment could cause a penalty to rapidly lose value in real terms. Over time, the formula used in the 1990 Inflation Adjustment Act calculations frequently caused penalties to lose value relative to actual inflation. The 2015 Act removed these rounding rules, and instead instructs agencies to round penalties to the nearest $1. While this creates penalty values that are no longer round numbers, it does ensure that agencies will increase penalties each year to a figure commensurate with the actual calculated inflation.

To better reflect the original impact of civil penalties, the 2015 Act “resets” the inflation calculations by excluding prior inflationary adjustments under the Inflation Adjustment Act. To do this, the 2015 Act requires agencies to identify, for each penalty, the year that Congress originally enacted the maximum penalty level/range of minimum and maximum penalty levels or the year that the agency last adjusted the penalty amount other than to pursuant to the Inflation Adjustment Act, and the corresponding penalty amount(s). The 2015 Act then requires agencies to perform an initial “catch-up” adjustment, using the original amounts of civil penalties as a baseline, so that the 2016 penalty levels are equal, in real terms, to the penalty amounts as they were originally established.

Pursuant to the 2015 Act, DHS undertook a review of the civil penalties that DHS and its components administer. This rule sets forth the initial “catch-up” adjustment for all civil penalties that DHS and its components administer. For each component, we have provided a table showing how DHS is increasing the penalties pursuant to the 2015 Act. The table contains the following information:

• In the first column (penalty name), we provide a description of the penalty.

• In the second column (citation), we provide the statutory cite from the United States Code (U.S.C.) and the regulatory cite from the Code of Federal Regulations (CFR).

• In the third column (current penalty), we list the existing penalty in effect on November 2, 2015.

• In the fourth column (baseline penalty (year)), we provide the amount and year of the penalty as enacted by Congress or as last changed through a mechanism other than pursuant to the Inflation Adjustment Act, whichever is later.

• In the fifth column (multiplier), we list the multiplier used to adjust the penalty. The multiplier is determined by the year of enactment or last adjustment of the penalty. The multiplier is based upon the Consumer Price Index (CPI-U) for the month of October 2015, not seasonally adjusted.2

• In the sixth column (preliminary new penalty), we list the amount obtained by multiplying the Baseline Penalty from column 4 with the Multiplier from column 5. This amount will be the final penalty, if, in accordance with the 2015 Act, this level does not increase penalty levels by more than 150 percent of the corresponding levels in effect on November 2, 2015.3

• In the seventh column, (adjusted new penalty), we provide the final number for the penalty. To derive this number, we compare the preliminary new penalty with the current penalty from column 3. The adjusted new penalty is the lesser of either the preliminary new penalty or an amount equal to 150 percent more than the current penalty.

Additionally, where applicable, we have also made conforming edits to regulatory text.

In the following sections, we briefly describe the civil penalties that DHS and its components assess. We describe the nature of the penalties and discuss relevant authorities. We include tables at the end of each section, which list the individual adjustments for each penalty. We also include discussions where we believe further explanation is helpful.

The National Protection and Programs Directorate (NPPD) administers only one civil penalty that the 2015 Act affects. This penalty assesses fines for violations of the Chemical Facility Anti-Terrorism Standards (CFATS), a program which regulates the security of chemical facilities that, in the discretion of the Secretary, present high levels of security risk. The CFATS program was originally established in 2007, pursuant to section 550 of the Department of Homeland Security Appropriations Act of 2007 (Pub. L. 109-295),4 and is currently located in part 27 of Title 6 of the CFR.

One question that arose is how to calculate the baseline date of the CFATS penalty, which is $25,000 per day. The question arose because the 2007 legislation, which established CFATS, did not create a new penalty provision, but rather referenced an older one: 5 Section 70119(a) of Title 46. The Maritime Transportation Security Act (MTSA) (Pub. L. 107-295) was enacted in 2002 and established this penalty provision. For that reason, arguments could be made that we should index the $25,000 penalty by the 2002 CPI value (the date the MTSA penalty was established) or the 2007 CPI value (the date the CFATS program was enacted). The difference between these numbers is material—indexing the $25,000 penalty by the 2002 CPI value would yield a current penalty of $32,796 per day, while indexing the penalty by the 2007 CPI value would yield a current penalty of only $28,458 per day.

Because the CFATS legislation did not create a new civil penalty, but rather simply referenced the existing MTSA penalty, we believe the intent of Congress was that violators of either MTSA or CFATS would face identical penalties. For this reason, we have considered the “baseline” year for the CFATS penalty to be 2002 rather than 2007, and have increased the penalty by the multiplier appropriate for that year, as shown in Table 1 below.

U.S. Customs and Border Protection (CBP) assesses civil monetary penalties for certain violations of title 8 of the CFR regarding the Immigration and Nationality Act of 1952 (Pub. L. 82-414, as amended) (INA). The INA contains provisions that impose penalties on persons, including carriers and aliens, who violate specified provisions of the INA. For example, section 231(g) of the INA, codified at 8 U.S.C. 1221(g), requires that a carrier shall be fined $1,000 for each person for whom manifest information is not provided.

CBP's relevant penalty provisions are located in numerous sections of the INA (see list below), however CBP has enumerated these penalties in regulation in one location—in 8 CFR 280.53. Below is the list of penalty provisions in the INA:

• Section 231(g), Penalties for non-compliance with arrival and departure manifest requirements for passengers, crewmembers, or occupants transported on commercial vessels or aircraft arriving to or departing from the United States.

• Section 234, Penalties for non-compliance with landing requirements at designated ports of entry for aircraft transporting aliens.

• Section 240B(d), Penalties for failure to depart voluntarily.

• Section 243(c)(1)(A), Penalties for violations of removal orders relating to aliens transported on vessels or aircraft under section 241(d) or for costs associated with removal under section 241(e).

• Section 243(c)(1)(B), Penalties for failure to remove alien stowaways under section 241(d)(2).

• Section 251(d), Penalties for failure to report an illegal landing or desertion of alien crewmen, and for each alien not reported on arrival or departure manifest or lists required in accordance with section 251 and penalties for use of alien crewmen for longshore work in violation of section 251(d).

• Section 254(a), Penalties for failure to control, detain, or remove alien crewmen.

• Section 255, Penalties for employment on passenger vessels of aliens afflicted with certain disabilities.

• Section 256, Penalties for discharge of alien crewmen.

• Section 257, Penalties for bringing into the United States alien crewmen with intent to evade immigration laws.

• Section 271(a), Penalties for failure to prevent the unauthorized landing of aliens.

• Section 272(a), Penalties for bringing to the United States aliens subject to denial of admission on a health-related ground.

• Section 273(b), Penalties for bringing to the United States aliens without required documentation.

• Section 274D, Penalties for failure to depart.

• Section 275(b), Penalties for improper entry.

We note, for reference, that CBP also assesses certain civil monetary penalties for customs violations under title 19 of the CFR. CBP assesses those penalties under the Tariff Act of 1930, as amended, but as we discussed above, the 2015 Act specifically exempts Tariff Act penalties from the inflation adjustment requirements in the 2015 Act. For that reason, we have not listed those title 19 penalties in the below table of CBP penalty adjustments.

Under this rule, the current penalties continue to be applicable with regard to violations that occurred on or before November 2, 2015, the date of enactment of the 2015 Act. In Table 2 below, we provide the penalties that we are adjusting in accordance with the 2015 Act, where the associated violations occurred after November 2, 2015.

Section 3206 of the Food, Conservation, and Energy Act of 2008 (the “2008 Farm Bill”), as amended by the Agricultural Act of 2014 (the “2014 Farm Bill”), provides that the Secretary of Agriculture will establish a program to provide grants to, or enter into cooperative agreements with, eligible organizations to procure locally or regionally produced commodities to respond to food crises and disasters. International nongovernmental organizations (NGOs) and intergovernmental organizations, like the World Food Program (WFP), have successfully utilized local and regional procurement over the last decade. Local and regional procurement, which has increasingly become a key element in the multilateral food aid response, is used to purchase food in countries affected by disasters and food crises or in a different country within the same region.

Currently many bilateral food assistance donors have shifted from commodity-based in-kind food aid to a cash-based food assistance program. The World Food Program has cited that the use of cash-based programs enables NGOs and intergovernmental organizations to purchase food locally or regionally in order to deliver assistance to beneficiaries quickly and cost-effectively, while also providing development benefits to local communities by strengthening agricultural markets where the food is purchased.

Several academic and other studies have cited significant cost and time savings for certain commodities and in certain areas.1 For example, GAO found that in Sub-Saharan Africa, local procurement cost about 34 percent less than similar in-kind U.S. food aid shipments. Some studies cited by the Government Accountability Office noted that large cash purchases in some developing countries could have detrimental effects on local market conditions if not carefully done. In cases where local purchases might substantially raise local market prices, in-kind donations of commodities may be more beneficial. Similarly, GAO and others have noted that in-kind donations can also have detrimental effects depending on local market conditions, depressing local farmers' prices if not carefully done. As the largest international food aid donor, contributing over half of all global food aid supplies to alleviate hunger and support development, the United States plays an important role in responding to food assistance needs and ensuring global food security. U.S. international food assistance programs must maintain flexibility and use the approach that best serves the in-country food security situation.

The USDA LRP Program adds another mechanism to deliver food assistance to the federal programs currently providing assistance, including Title II of the Food for Peace Act and International Disaster Assistance under the Foreign Assistance Act of 1961, both of which currently utilize local and regional procurement and are administered by the U.S. Agency for International Development, and USDA's Food for Progress Program and McGovern-Dole International Food for Education and Child Nutrition (“McGovern-Dole”) Program. The USDA LRP Program aims to support development activities to strengthen the capacity of food-insecure developing countries and address the cause of chronic food insecurity. Other objectives of the USDA LRP Program are to support the consumption of locally produced food and strengthen local value chains and all associated procurement activities. The USDA LRP Program will focus primarily on development programs, although the rule also provides for the furnishing of food assistance through an emergency response. Given the role of the United States Agency for International Development (USAID) as the lead agency in the provision of U.S. emergency humanitarian assistance, any emergency response will be determined in consultation with the USAID Administrator, as provided for in section 3206(b)(2) of the 2008 Farm Bill, as amended, to ensure programs address the highest priority needs only and are not duplicative.

The 2008 Farm Bill, as enacted on June 18, 2008, authorized and funded a pilot program (the USDA LRP pilot program) to test different approaches and study practical lessons regarding the timeliness, cost effectiveness, impacts on market, and quality and other benefits of locally procured food assistance. Twenty-one local and regional procurement pilot projects were funded in nineteen countries. An independent evaluation that examined the activities of the final twenty projects in eighteen countries (due to the cancellation of one project) demonstrated that locally procured food assistance can provide food assistance at lower cost, with a shorter delivery time, and in some cases has other development benefits. The full evaluation can be viewed at http://www.fas.usda.gov/newsroom/local-and-regional-food-aid-procurement-pilot-project-independent-evaluation-report.

To address food safety and quality and market sensitivities, the USDA LRP Program will build capacity to meet quality standards and product specifications to ensure food safety and nutritional content within each project and with its beneficiaries. To address market sensitivities around local and regional purchases, the USDA LRP Program will work with its recipients to improve the reliability and utility of market intelligence in areas where the USDA LRP Program is implemented, seeking to ensure that the USDA LRP Program minimizes potential adverse impacts and maximizes potential benefits.

The 2008 Farm Bill, as amended by the 2014 Farm Bill, authorizes the Secretary to provide grants to, or enter into cooperative agreements with, eligible organizations to implement international field-based projects that consist of local or regional procurements of eligible commodities to fill nutritional gaps for targeted populations and respond to food availability gaps generated by unexpected emergencies. The USDA LRP program will use the local or regional procurement of commodities for distribution in developing countries to complement existing food aid programs, giving preference to the McGovern-Dole Program. The Food and Agricultural Organization of the United Nations states that there is global consensus recognizing child nutrition as an essential element to improve not only the health and well-being of children around the world, but also the social and economic development of communities and countries. Under the USDA LRP Program, FAS will provide grants to, or enter into cooperative agreements with, private voluntary organizations, cooperatives, and the World Food Program to undertake activities such as strengthening value chains and other procurement activities.

The USDA LRP Program will be used for development projects, and focus on supplementing U.S. commodity purchases through the McGovern-Dole Program. The USDA LRP Program will focus on developing appropriate supply chains for the procurement of commodities from local producers. School meals using locally purchased foods will add locally known varieties to the meals, which may make them more appealing to the children and help increase nutrition. In cases where supply chains need to be strengthened in order to support a workable and reliable supply of food for the McGovern-Dole Program, the USDA LRP Program can work with producers, school authorities, and local municipalities in communities around schools to provide technical and management expertise to build reliable supply systems, as well as to procure commodities.

The USDA LRP Program will aim to strengthen rural farm communities economically and incentivize school attendance in order to improve education, while at the same time work with host country governments to build a type of safety net for those populations in great need. For example, this type of programing can address multiple issues in many developing countries, of which many have large, agricultural based economies with rural populations in need of education and market opportunities.

This rule is being issued as a final rule without prior notice and opportunity for comment. The Administrative Procedure Act exempts rules “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts” from the statutory requirement in 5 U.S.C. 553, which includes the requirement for prior notice and opportunity for comment (5 U.S.C. 553(a)(2)). However, members of the public may participate in this rulemaking by submitting written comments, data, or views. FAS will consider the comments received and may conduct additional rulemaking based on the comments. Written comments must be received by FAS or carry a postmark or equivalent no later than 60 days after publication of this rule in the Federal Register.

The Administrative Procedure Act (5 U.S.C. 553) provides generally that before rules are issued by Government agencies, the rule must be published in the Federal Register, and the required publication of a substantive rule is to be not less than 30 days before its effective date. However, noted above, one of the exceptions is that section 553 does not apply to rulemaking that involves a matter relating to benefits. Therefore, because this rule relates to benefits, this final rule is effective when published in the Federal Register. This will allow us to provide greater access to local and regional procured food aid as soon as possible during the 2016 school year.

The program covered by this regulation is listed in the Catalog of Federal Domestic Assistance (CFDA) under the following FAS CFDA number: 10.612, USDA LRP Program.

In accordance with the Paperwork Reduction Act of 1995, the following new information collection request that supports USDA's Local and Regional Food Aid Procurement Program was submitted to OMB for emergency approval. FAS is requesting comments from interested individuals and organizations on the information collection activities related to USDA's Local and Regional Food Aid Procurement application process and reporting requirements.

Title: USDA's Local and Regional Food Aid Procurement Program.

OMB Control Number: 0551-New.

Type of Request: New Collection.

Abstract: Under the USDA Local and Regional Food Aid Procurement Program, information will be gathered from applicants desiring to receive grants or enter into cooperative agreements under the USDA LRP Program to determine the viability of requests for resources to implement activities in foreign countries. Recipients of grants or cooperative agreements under the USDA LRP Program must submit performance and financial reports until funds provided by FAS and commodities purchased with such funds are utilized. Documents are used to develop effective grant or cooperative agreements and assure that statutory requirements and program objectives are met.

Estimate of Burden: The public reporting burden for each respondent resulting from information collection under the USDA Local and Regional Food Aid Procurement Program varies in direct relation to the number and type of agreements entered into by such respondent. The estimated average reporting burden for USDA Local and Regional Food Aid Procurement Program is 78 hours per response.

Type of Respondents: Private voluntary organizations, cooperatives, and intergovernmental organizations.

Estimated Number of Respondents: 22 per annum.

Estimated Number of Responses per Respondent: 17 per annum.

Estimated Total Annual Burden of Respondents: 29,172 hours.

Copies of this information collection can be obtained from Connie Ehrhart, the Agency Information Collection Coordinator, at (202) 690-1578 or email at [email protected].

Request for Comments: Send comments regarding (a) whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments may be sent to:

• Federal Rulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

• Director, Food Assistance Division, Office of Capacity Building and Development, Foreign Agricultural Service, 1400 Independence Ave. SW., STOP 1034, Washington, DC 20250.

On February 16, 2016, FAS published in the Federal Register a notice entitled “Notice of Request for Approval of a New Information Collection” at 81 FR 7742. This notice included a 60 day comment period for interested individuals to provide comments on the information collection burden of the USDA LRP Program. As such, the notice duplicates the request for comments above pertaining to the information collection burden of the USDA LRP Program. Interested parties may provide comments on the information collection burden either by providing comments on this rule or on the Federal Register notice that was published on February 16, 2016. It is not necessary to provide comments on both documents.

FAS is committed to complying with the E-Government Act of 2002 (44 U.S.C. chapter 36), to promote the use of the Internet and other information technologies to provide increased opportunities for citizens' access to Government information and services, and for other purposes.

Executive Order 12866, “Regulatory Planning and Review,” and Executive Order 13563, “Improving Regulation and Regulatory Review,” 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, distributive 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.

The Office of Management and Budget (OMB) designated this rule as significant under Executive Order 12866, “Regulatory Planning and Review,” and therefore, OMB has reviewed this rule. The costs and benefits of this final rule are summarized below. The full cost benefit analysis is available on regulations.gov.

The economic benefits of local and regional procurement have been identified in a number of studies 2 in addition to the USDA LRP pilot program during the period of 2009-2012, the results of which are documented in an independent evaluation report (http://www.fas.usda.gov/newsroom/local-and-regional-food-aid-procurement-pilot-project-independent-evaluation-report). For example, the results of the USDA LRP pilot program included: Cost savings in transport, shipping, and handling; better match between recipients' needs and program commodity availability; and time savings between the procurement and delivery of food, which is especially important in emergency situations. Since commodities purchased under the USDA LRP pilot program did not need to be shipped across oceans and were purchased nearer the final destination, the transport, shipping, and handling costs were on average lower than in-kind food assistance. In projects where recipients were children, improved commodity match resulted in more of the food provided being consumed, yielding nutritional gains. Delivery times for emergency food aid under the USDA LRP pilot program yielded faster delivery than in-kind food aid shipped from the United States. As a result of the USDA LRP pilot program, small-scale producers and suppliers began pooling resources to achieve economies of scale to increase their profitability. The USDA LRP Program is intended to maximize the impact of food assistance, consistent with the positive results achieved under the USDA LRP pilot program.

Congress passed the FCPIAA in 1990 to allow for regular adjustment for inflation of CMPs, maintain the deterrent effect of civil monetary penalties and promote compliance with the law, and improve the collection of CMPs by the Federal government (Pub. L. 101-410, 104 Stat. 890; 28 U.S.C. 2461 note). As amended by the Debt Collection Improvement Act of 1996, the FCPIAA required that the head of each agency review, and if necessary adjust by regulation, the CMPs assessed under statutes enforced by that agency at least once every 4 years, in accordance with a statutory formula linked to the percentage change in the Consumer Price Index (CPI) (Pub. L. 104-134, 110 Stat. 1321-373). The NRC has amended the CMP amounts under statutes it enforces (the AEA and Program Fraud Civil Remedies Act) four times, most recently in 2008 (September 23, 2008; 73 FR 54671). An adjustment was not performed in 2012 because the FCPIAA required agencies to round their CMP amounts to the nearest multiple of $1,000 or $10,000, depending on the size of the CMP amount, and the 2012 adjustments based on the statutory formula were small enough that no adjustment resulted.

On November 2, 2015, the FCPIAA was amended by the 2015 Improvements Act (Sec. 701, Pub. L. 114-74, 129 Stat. 599). The 2015 Improvements Act requires that the head of each agency through an interim final rulemaking make an initial “catch-up” adjustment of the CMPs assessed under statutes enforced by that agency by July 1, 2016, to be effective no later than August 1, 2016. This initial catch-up adjustment is to be calculated according to the percentage change between the CPI for the month of October 2015 and the CPI for the month of October of the calendar year when the CMP amount was last established by some means other than a FCPIAA adjustment. The increase for the initial catch up adjustment may not exceed 150 percent of the CMP amount as of the date of the enactment of the 2015 Improvements Act. Following the initial catch-up adjustment, agencies must continue to adjust their CMPs by January 15 of each year. This calculation is based on the percentage change between the CPI for the preceding month of October and the CPI for the month of October in the preceding year. All increases under the 2015 Improvements Act are to be rounded to the nearest multiple of one dollar.

Section 234 of the AEA limits civil penalties for violations of the AEA to $100,000 per day, per violation (42 U.S.C. 2282). Congress established the $100,000 amount in 1980 (Pub. L. 96-295, 94 Stat. 787). As discussed in Section I, “Background,” of this document, the NRC has adjusted this amount (currently set at $140,000) on four occasions since 1980, each time pursuant to the FCPIAA. For purposes of calculating the initial catch-up adjustment under the 2015 Improvements Act, the relevant baseline year for AEA CMPs is 1980 (the last time the CMP was established by some means other than a FCPIAA adjustment). Using the formula in the 2015 Improvements Act, the $100,000 amount established in 1980 will increase by 280.469 percent, resulting in a new CMP figure of $280,469.1 The 2015 Improvements Act caps the increase in penalty levels for the initial catch-up adjustment at no more than 150 percent of the CMP level in effect as of November 2, 2015, which means the amount of increase for AEA CMPs cannot exceed $210,000 (150 percent of the current $140,000 amount). A new CMP amount of $280,469 is an increase of $140,469, which is within the limit imposed by the 2015 Improvements Act. Therefore, the NRC is amending § 2.205 of title 10 of the Code of Federal Regulations (10 CFR) to reflect a new maximum CMP under the AEA in the amount of $280,469 per day, per violation.

Monetary penalties under the Program Fraud Civil Remedies Act were established in 1986 at $5,000 per claim (Pub. L. 99-509, 100 Stat. 1938; 31 U.S.C. 3802). The NRC has adjusted this amount (currently set at $7,000) multiple times pursuant to the FCPIAA since 1986. Using 1986 as the baseline year, the $5,000 amount will increase by 215.628 percent, resulting in a new CMP amount of $10,781. This is a $3,781 increase from the current $7,000 CMP amount, which is less than the statutory cap of a $10,500 increase (150 percent of $7,000). Therefore, the NRC is amending 10 CFR 13.3 to reflect a new maximum CMP amount of $10,781 per claim.

As permitted by the 2015 Improvements Act, the NRC may apply these increased CMP amounts to any penalties assessed by the agency after the effective date of this interim final rule (August 1, 2016), regardless of whether the associated violation occurred before or after this date (Pub. L. 114-74, 129 Stat. 600; 28 U.S.C. 2461 note). Conforming changes to the NRC Enforcement Policy (ADAMS Accession No. ML15029A148) will be published in a forthcoming Federal Register notice before the effective date of this interim final rule (August 1, 2016).

This interim final rule has been issued without prior public notice or opportunity for public comments. The Administrative Procedure Act (5 U.S.C. 553(b)(B)) does not require an agency to use the public notice and comment process “when 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 procedure thereon are impracticable, unnecessary, or contrary to the public interest.” In this instance, the NRC finds, for good cause, that solicitation of public comment on this interim final rule is unnecessary. Through the FCPIAA and 2015 Improvements Act, Congress has provided a non-discretionary statutory formula by which the NRC must adjust its CMPs for inflation. Requesting public comment on these CMP adjustments, which are required by statute, would not result in a different amount.

Paragraph (j) in § 2.205 is revised by replacing “$140,000” with “$280,469”.

Paragraphs (a)(1)(iv) and (b)(1)(ii) in § 13.3 are revised by replacing “$7,000” with “$10,781”.

Under the Regulatory Flexibility Act (5 U.S.C. 605(b)), the NRC certifies that this interim final rule will not have a significant economic impact on a substantial number of small entities.

This interim final rule adjusts for inflation the maximum CMPs the NRC may assess under the AEA and under the Program Fraud Civil Remedies Act of 1986. The formula for determining the amount of the adjustment is mandated by Congress in the FCPIAA, as amended by the 2015 Improvements Act (28 U.S.C. 2461 note). Congress passed this legislation on the basis of its findings that the power to impose monetary civil penalties is important to deterring violations of Federal law and furthering the policy goals of Federal laws and regulations. Congress has also found that inflation has diminished the impact of these penalties and their effect. The principal purposes of this legislation are to provide for adjustment of civil monetary penalties for inflation, maintain the deterrent effect of civil monetary penalties, and promote compliance with the law. Therefore, these are the anticipated impacts of this rulemaking. Direct monetary impacts fall only upon licensees or other persons subjected to NRC enforcement for violations of the AEA and regulations and orders issued under the AEA (10 CFR 2.205), or those licensees or persons subjected to liability pursuant to the provisions of the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801-3812) and the NRC's implementing regulations (10 CFR part 13).

The NRC has not prepared a backfit analysis for this rulemaking. This interim final rule does not involve any provision that would impose a backfit, nor is it inconsistent with any issue finality provision, as those terms are defined in 10 CFR chapter I. As mandated by Congress, this interim final rule increases CMP amounts for violations of already-existing NRC regulations and requirements. This interim final rule does not modify any licensee system, structures, components, designs, approvals, or procedures required for the design, construction, or operation of any facility.

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31883).

The NRC has determined that this interim final rule is the type of action described as a categorical exclusion in 10 CFR 51.22(c)(1) and (2). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this interim final rule.

This interim final rule does not contain a collection of information as defined in the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and, therefore, is not subject to the requirements of the Paperwork Reduction Act of 1995.

This interim final rule is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; 28 U.S.C. 2461 note; and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR parts 2 and 13.

On November 2, 2015, Congress enacted the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act),1 which amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment Act).2 The Inflation Adjustment Act required the OCC and other Federal agencies with civil money penalty (CMP) authority to publish by regulation the inflation-adjusted maximum assessment for each CMP authorized by a law that the agency has jurisdiction to administer.3 Key features of the Inflation Adjustment Act included requiring such agencies to make inflation adjustments at least once every four years following any initial adjustment, capping the initial inflation adjustment increase at 10 percent, and imposing rounding rules that limited increases based on the amount of the penalty.

The purpose of the 2015 Act is to: (i) Establish a mechanism to regularly adjust CMPs for inflation; (ii) maintain the deterrent effect of CMPs and promote compliance with the law; and (iii) improve the collection of CMPs by the Federal government.4 Key provisions of the 2015 Act include simplifying the process for calculating the inflation increase, eliminating the complex rounding rules, and requiring Federal agencies to adjust penalties on an annual basis.

The 2015 Act requires agencies to increase the level of each maximum CMP, or the range of minimum and maximum CMPs, with an initial “catch-up” adjustment through an interim final rule published in the Federal Register no later than July 1, 2016, with an effective date no later than August 1, 2016.5 Under the 2015 Act, agencies must calculate initial catch-up adjustments based on the percentage increase in the October 2015 Consumer Price Index for all Urban Consumers (CPI-U) 6 from the October CPI-U of the year the CMP was established or last adjusted by law. However, for the catch-up adjustment, the amount of the initial increase may not exceed 150 percent of the CMP in effect on the date the 2015 Act was enacted (i.e., November 2, 2015).

The 2015 Act requires agencies to publish subsequent annual adjustments in the Federal Register no later than January 15 of each year, beginning on January 15, 2017. The 2015 Act also requires agencies to calculate subsequent annual inflation adjustments based on the percentage increase in the CPI-U for the month of October preceding the date of the adjustment from the prior year's October CPI-U and to round all adjustments to the nearest dollar.

The 2015 Act also requires OMB to issue guidance to Federal agencies on implementing the required inflation adjustments. The OMB guidance (OMB Guidance), issued February 24, 2016, provides the multiplier (i.e., the inflation adjustment factor agencies must use to adjust their penalties), step-by-step instructions on how to calculate the catch-up adjustments, and other relevant information.7

The OCC last evaluated and adjusted the maximum amount of CMPs applicable to national banks and Federal savings associations in 2012. An interim final rule was published in the Federal Register on November 6, 2012,8 and became effective on December 6, 2012. The OCC published a technical amendment to this rule in the Federal Register on December 28, 2012,9 that became effective on December 28, 2012.

This interim final rule adjusts for inflation the maximum assessment for each CMP that the OCC has jurisdiction to impose in accordance with the 2015 Act and the OMB Guidance. The OCC is incorporating these adjustments into the charts that are set forth at 12 CFR 19.240(a) with respect to national banks (national bank chart) and 12 CFR 109.103(c) with respect to Federal savings associations (Federal savings association chart). Each chart identifies the statutes that authorize the OCC to assess CMPs, describes the different tiers of penalties provided in each statute (as applicable), and sets out the inflation-adjusted maximum penalty that the OCC may impose pursuant to each statutory provision. The OCC calculated the amounts in the charts in accordance with the OMB Guidance, as follows.

In order to calculate the catch-up adjustment, the OMB Guidance instructs agencies to identify, for each penalty, the year and corresponding amount(s) for which the maximum penalty level or range of minimum and maximum penalties was established (i.e., as originally enacted by Congress), or last adjusted (i.e., by Congress in statute, or by the agency through regulation), whichever is later, other than pursuant to the Inflation Adjustment Act. Thus, this step of the calculation excludes prior inflation adjustments under the Inflation Adjustment Act.10

The OMB Guidance then directs agencies to modify that penalty level or range based on the CPI-U for the month of October 2015, not seasonally adjusted. OMB calculated the multiplier that agencies must apply in order to adjust the penalty level or range of penalty levels, based on the year the penalty was established or last adjusted by statute or regulation, and provided these multipliers for the years 1914 through 2015.11 Agencies must apply the multiplier and round all penalty levels to the nearest dollar. However, because the 2015 Act caps the amount of the initial catch-up adjustment at 150 percent, the OMB Guidance states that each adjusted penalty cannot exceed 250 percent of the penalty level in effect on November 2, 2015.12 The 2015 Act states that agencies are required to apply the new penalty levels to CMPs that are assessed after the effective date of the rule. The OMB Guidance clarifies that inflation adjustments calculated and assessed pursuant to the 2015 Act adjust penalties prospectively and do not retrospectively change penalties previously assessed or enforced that the agency is actively collecting or has collected.13

The worksheets below show how the OCC calculated the new penalty levels for national banks and Federal savings associations. Only two penalties, those provided in 12 U.S.C. 1832(c) and 1884, were capped at 250 percent of the amount of the penalty on November 2, 2015.

The OCC did not exercise the discretion it is provided under the 2015 Act to seek a reduced catch-up adjustment determination from OMB. Such a request would have required the OCC to demonstrate that the penalty would have a negative economic impact, or that the social costs of the adjustment would outweigh the benefits.14 As the penalties reflected in the national bank chart and Federal savings association chart are, for the most part, maximum penalties, the OCC may impose lesser penalties, if warranted. Accordingly, the OCC concluded that a reduced catch-up adjustment determination was not necessary.

This interim final rule adjusts the following additional penalties that are being incorporated into the national bank chart and Federal savings association chart. First, both charts include a new CMP, provided in 15 U.S.C. 1639e(k), created by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).15 The new CMP makes it unlawful for a creditor who extends credit, or provides any services for a consumer credit transaction secured by the consumer's principal dwelling, to engage in any act or practice that violates the regulation implementing the appraisal independence requirements in section 1472 of the Dodd-Frank Act. Pursuant to the Dodd-Frank Act, the maximum daily penalty for the first violation is $10,000 and the maximum daily penalty for subsequent violations is $20,000. The adjusted maximum daily penalties will be $10,875 and $21,749, respectively.

The OCC also is adjusting the penalty provided in 12 U.S.C. 481, an existing CMP that previously was not included in the chart. Twelve U.S.C. 481 authorizes the OCC to assess on a national bank a maximum daily penalty of no more than $5,000 if any affiliate of a national bank refuses to permit an examiner to make an examination of such affiliate or refuses to provide any information required in the course of such an examination. The adjusted maximum daily penalty will be $9,468.

In addition, the OCC is adjusting the penalties provided in 12 U.S.C. 1832(c), 12 U.S.C. 1972(2)(F), and 15 U.S.C. 78u-2(b), three CMPs that are in the national bank chart, but were not previously included in the chart applicable to Federal savings associations. Twelve U.S.C. 1832(c) makes it unlawful for a depository institution to violate the restrictions on withdrawals by negotiable or transferable instruments for transfers to third parties. The penalty when first established was $1,000 per violation. The adjusted penalty will be $2,750 per violation. Twelve U.S.C 1972(2)(F) makes it unlawful for a savings association to violate anti-tying restrictions regarding correspondent accounts, unsafe or unsound practices, or breach of fiduciary duty. When first established, the maximum daily penalty was: $5,000 for a tier 1 violation; $25,000 for a tier 2 violation; $1,000,000 for a tier 3 violation by a person other than a bank; and the lesser of $1,000,000 or 1 percent of total assets for a tier 3 violation by a bank. The adjusted maximum daily penalties will be: $9,468 for a tier 1 violation; $47,340 for a tier 2 violation; $1,893,610 for a tier 3 violation by a person other than a bank; and the lesser of $1,893,610 or 1 percent of total assets for a tier 3 violation by a bank. Fifteen U.S.C. 78u-2(b) provides penalties for violations of various provisions of the Securities Act,16 the Securities Exchange Act,17 the Investment Company Act,18 and the Investment Advisers Act,19 as applicable. When first established, the maximum penalty per violation was: $5,000 for a tier 1 violation by a natural person; $50,000 for a tier 1 violation by any other person; $50,000 for a tier 2 violation by a natural person; $250,000 for a tier 2 violation by any other person; $100,000 for a tier 3 violation by a natural person; and $500,000 for a tier 3 violation by any other person. The adjusted maximum penalties will be: $8,907 for tier 1 (natural person); $89,078 for tier 1 (other person); $89,078 for tier 2 (natural person); $445,390 for tier 2 (other person); $178,156 for tier 3 (natural person); and $890,780 for tier 3 (other person).

The OCC is making several minor technical edits to the national bank chart and Federal savings association chart. The OCC is amending the charts by adding a footnote to each chart, where appropriate, to clarify that for certain penalties the applicable statute provides that the penalty will be the lesser of a dollar adjusted penalty amount or 1 percent of the bank's total assets. The text of the new Federal savings association chart no longer includes reference to 12 U.S.C. 3349(b). This penalty is an example of penalties that do not themselves provide the amount of the penalty but rather cross-reference 12 U.S.C. 1818. Instead, the OCC is adding a footnote to the national bank chart (footnote 3) and the Federal savings association chart (footnote 3), where appropriate, explaining that statutes cross-referencing 12 U.S.C. 1818 are adjusted automatically when the penalty in section 1818 is adjusted for inflation.

The interim final rule also deletes §§ 19.240(c) and 109.103(d), which provided an effective date of July 6, 2012, for the amount of the penalties for violations of 42 U.S.C. 4012a(f)(5), as all the penalty amounts on the revised national bank chart and Federal savings association chart are now effective on the same date.

Finally, consistent with the 2015 Act, revised §§ 19.240(b) and 109.103(c) state that the penalties in the charts at §§ 19.240(a) and 109.103(c) apply only to penalties assessed on or after the effective date of this interim final rule, August 1, 2016.

FHFA is an independent agency of the Federal government and the financial safety and soundness regulator of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises), the Federal Home Loan Banks (collectively, the Banks), and the Banks' Office of Finance under authority granted by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act).1 FHFA oversees the Enterprises and Banks (collectively, the regulated entities) to ensure that they operate in a safe and sound manner and maintain liquidity in the housing finance market in accordance with applicable laws, rules, and regulations. To that end, FHFA is vested with broad supervisory discretion and specific civil administrative enforcement powers, similar to such authority granted by Congress to the Federal bank regulatory agencies.2

Section 1376 of the Safety and Soundness Act (12 U.S.C. 4636) empowers FHFA to impose civil money penalties under specific conditions. FHFA's Rules of Practice and Procedure regulation (12 CFR part 1209) govern cease and desist proceedings, civil money penalty assessment proceedings, and other administrative adjudications.3 FHFA's Flood Insurance regulation (12 CFR part 1250) governs flood insurance responsibilities as they pertain to the Enterprises.4 FHFA's Implementation of the Program Fraud Civil Remedies Act of 1986 regulation (12 CFR part 1217) sets forth procedures for imposing civil penalties and assessments under the Program Fraud Civil Remedies Act (31 U.S.C. 3801 et seq.) on any person that makes a false claim for property, services or money from FHFA, or makes a false material statement to FHFA in connection with a claim, where the amount involved does not exceed $150,000.5

The Federal Civil Penalties Inflation Adjustment Act of 1990 (“Inflation Adjustment Act”), as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (“Adjustment Improvements Act”), requires FHFA, as well as other Federal agencies with the authority to issue civil money penalties (CMPs), to adjust by regulation the maximum amount of each CMP authorized by law that the agency has jurisdiction to administer.6 The Adjustment Improvements Act requires agencies to make an initial “catch-up” adjustment of their CMPs upon the statute's enactment, and further requires agencies to make additional adjustments on an annual basis following the initial adjustment.7

The Adjustment Improvements Act provides that the initial catch-up adjustment must be implemented by an interim final rule and will be based on the percent change between the Consumer Price Index for all Urban Consumers (CPI-U) for October 2015 and the CPI-U for the month of October in the year that the civil money penalty was established or adjusted under a provision of law other than the Inflation Adjustment Act. Previous inflation adjustments made under the Inflation Adjustment Act prior to the Adjustment Improvements Act are not considered in making the catch-up adjustment.8 In the future, annual inflation adjustments will be based on the percent change between the October CPI-U preceding the date of the adjustment and the October CPI-U for the year before that.

When promulgating any regulation that may have future effect relating to the Banks, the Director is required by section 1313(f) of the Safety and Soundness Act to consider the differences between the Banks and the Enterprises with respect to the Banks' cooperative ownership structure; mission of providing liquidity to members; affordable housing and community development mission; capital structure; and joint and several liability (12 U.S.C. 4513(f)).9 The Director considered the differences between the Banks and the Enterprises, as they relate to the above factors, and determined that this interim final rule is appropriate. In sum, the five differences identified in section 1313(f) of the Safety and Soundness Act do not require a different enforcement regulation for the Banks than for the Enterprises, and in any event, the inflation adjustments effected by the interim final rule are mandated by law.

This interim final rule adjusts the maximum penalty amount within each of the three tiers specified in 12 U.S.C. 4636 by amending the table contained in 12 CFR 1209.80 to reflect the new adjusted maximum penalty amount that FHFA may impose upon a regulated entity or any entity-affiliated party within each tier. The increases in maximum penalty amounts contained in this interim final rule may not necessarily affect the amount of any CMP that FHFA may seek for a particular violation, which may not be the maximum that the law allows; FHFA would calculate each CMP on a case-by-case basis in light of a variety of factors.10 This rule also adjusts the maximum penalty amounts for violations under the FHFA Flood Insurance regulation by amending the text of 12 CFR 1250.3 to reflect the new adjusted maximum penalty amount that FHFA may impose for violations under that regulation. FHFA has adjusted the maximum amounts for penalties under the Program Fraud Civil Remedies Act in a separate rule required by that Act, which was also published today in this edition of the Federal Register.

The Adjustment Improvements Act directs federal agencies to calculate each initial catch-up CMP adjustment as the percent change between the CPI-U for October 2015 and the CPI-U for October of the calendar year in which the amount of each CMP was set.11 The maximum CMP amounts for FHFA penalties under 12 U.S.C. 4636 were set in 2008.12 Since FHFA is making this round of catch-up adjustments in calendar year 2016, and the maximum CMP amounts were last set in calendar year 2008, the inflation adjustment amount for each maximum CMP amount was calculated by comparing the CPI-U for October 2008 with the CPI-U for October 2015, resulting in an inflation factor of 1.09819. For each maximum CMP amount, the product of this inflation adjustment and the previous maximum penalty amount was then rounded to the nearest whole dollar as required by the Adjustment Improvements Act, and was then summed with the previous maximum penalty amount to determine the new adjusted maximum penalty amount.13 The table below sets out these items accordingly.

The Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801 et seq.) (PFCRA) requires FHFA, as an “authority,” to establish by rule procedures for imposing civil penalties and assessments on any person who makes a false claim for property, services, or money from FHFA, or makes a false material statement to FHFA in connection with a claim, where the amount involved does not exceed $150,000.1 A “claim” as defined in the Act includes a request, demand, or submission for property, services, or money from FHFA or a party to a contract with FHFA, including money representing benefits.2 A “statement” is any representation, certification, affirmation, document, record, or accounting or bookkeeping entry with respect to a claim, a contract or a bid or proposal for a contract with FHFA, or a benefit from FHFA.3 For covered claims and statements, PFCRA provides an administrative remedy as an alternative to judicial action, where the Department of Justice (DOJ) has declined to prosecute under the civil False Claims Act, 31 U.S.C. 3729.4

PFCRA establishes a process of (a) investigation by the “investigating official,” who, by statute, is the Inspector General (IG) of the agency or a designee of the IG; (b) review by the agency's “reviewing official,” designated by the agency head, to determine if adequate evidence of liability exists; 5 and (c) review by DOJ. If the Attorney General approves use of the PFCRA process, PFCRA authorizes the reviewing official to initiate an action by providing notice to the person alleged to be liable; if a hearing on the record is requested, it is before a “presiding official,” which by statute is an Administrative Law Judge (ALJ) appointed or detailed for such purpose.6 PFCRA also establishes appeal rights to the agency head by any person determined by an ALJ to be liable, and further review is available by a U.S. District Court.7

A civil penalty may be imposed for making a false claim or statement to an agency even if the agency did not provide any money, property, services, or benefits to any person as a result. Where money, property, services, or benefits were provided as a result of the person's false claim or statement, an “assessment” may also be imposed as the administrative equivalent of damages. The maximum amount of any civil penalty is established by PFCRA, subject to periodic adjustments for inflation, and PFCRA also caps any assessment at an amount equal to twice the value of the money, property, services, or benefits provided.8

Following PFCRA's enactment in 1986, an interagency task force was established under the leadership of the Department of Health and Human Services to develop model implementing regulations by all affected agencies and departments. This action was consistent with the expectation that “regulations would be substantively uniform throughout the government, except as necessary to meet the specific needs of a particular agency or program.” 9 For that reason, FHFA reviewed the PFCRA rules of other departments and agencies and has modeled its proposed and interim final rule on the final rules of the Federal Deposit Insurance Corporation (FDIC) and Department of Housing and Urban Development (HUD).10 The FDIC rule was employed because, like FHFA, FDIC is a federal financial safety and soundness regulator. FHFA's supervisory, regulatory, enforcement, and resolution powers are similar to FDIC's, and both FDIC and FHFA have express independent litigating authority and authority to bring administrative actions for civil money penalties for false claims or statements made to them by their regulated institutions or entities and affiliated parties separate and apart from authority provided by PFCRA. The HUD rule was employed as it provides a structural model and an established operational approach.

On December 23, 2015, FHFA published a proposed rule to implement PFCRA.11

Similar to the FDIC in its final rule, FHFA proposed that its PFCRA rule would apply only to FHFA's employment and contracting activities, and not to FHFA's supervisory, regulatory, enforcement, conservatorship, or receivership activities because other civil and administrative remedies available to FHFA are adequate to redress fraud in the areas not covered. FHFA noted in the notice of proposed rulemaking that it intended that the PFCRA administrative process not be confused with ordinary Agency procedures available in regulatory or conservatorship situations.12 FHFA also proposed a process to investigate and adjudicate PFCRA claims in accordance with PFCRA's procedural requirements.13 Should a PFCRA case proceed to adjudication by an ALJ, FHFA proposed to use its existing Rules of Practice and Procedure, which were incorporated by reference.14

FHFA's proposed rule also established a maximum civil penalty that reflected an inflation adjustment to the statutory PFCRA civil penalty, addressed an assessment in lieu of damages of up to twice the amount of the false, fictitious, or fraudulent claim, and stated that the PFCRA rule would not preclude the imposition of any other authorized actions or sanctions currently employed by FHFA, including debarment and suspension of contractors.15

FHFA invited comments on all aspects of the proposed rule during a 60-day comment period that closed on February 22, 2016. FHFA received one comment from a private citizen that did not address the substance of the proposed rule.

FHFA has determined that no changes to the scope and process of the rule as proposed are necessary in light of comments received. Following publication of the proposed rule, however, FHFA reviewed provisions of the recently enacted Adjustment Improvements Act and has determined that further adjustment of the maximum penalty is required.16 Both the requirement that the penalty be adjusted and the adjustment formula to be applied are set forth in the Adjustment Improvements Act. Further, the Adjustment Improvements Act requires agencies to publish adjustments in accordance with that Act in an interim final rule.17 Consequently, FHFA is publishing this rule as an interim final rule to meet that requirement. If, prior to the effective date of the interim final rule, FHFA does not receive any comments from which FHFA concludes that the rule should be revised, this rule will become final without further action by FHFA.

Scope. As does the FDIC's PFCRA rule, FHFA's interim final rule states that it applies to FHFA's employment and contracting activities and does not apply to FHFA's supervisory, regulatory, enforcement, conservatorship, or receivership activities because other civil and administrative remedies available to FHFA with regard to its regulated entities (Fannie Mae, Freddie Mac (together, the Enterprises), any affiliate of an Enterprise, and the Federal Home Loan Banks) and the Office of Finance of the Federal Home Loan Bank System (OF) or any other entity-affiliated party are adequate to redress fraud in the areas not covered. This statement of scope is almost identical to the scope set forth by the FDIC in its PFCRA rule, at 12 CFR 308.500(c).18

In the event a regulated entity, any affiliate of an Enterprise, or the OF or any other entity-affiliated party made a false claim on or provided false information to FHFA in its supervisory, regulatory, enforcement, conservatorship, or receivership activities, FHFA has other available administrative remedies and independent litigating authority. See generally 12 U.S.C. 4513, 4514, 4585, and 4636. As a result, even without PFCRA, FHFA could pursue administrative or judicial remedies for such false claims or statements on its own behalf with similar or greater effect.

FHFA also notes that its PFCRA rule would not apply to false claims or statements made by any person to any regulated entity, an affiliate of an Enterprise, or the OF. PFCRA generally does not apply to false claims or statements made to private companies conducting private business activities, unless those companies are allocating money, property, services or benefits where the actual provider is the United States government.19 Because the regulated entities, including any affiliate of an Enterprise, and the OF do not receive United States government money, property, services, or benefits from FHFA, FHFA's interim final rule implementing PFCRA does not apply to any false claim or statement by any person to any regulated entity, including any affiliate of an Enterprise, or the OF.20

Process. Pursuant to PFCRA and FHFA's interim final rule, FHFA's “investigating official” (under PFCRA, the FHFA IG or the IG's designee) is responsible for initiating an investigation of any claim or statement believed to be false.21 The investigating official submits a report containing information about the case (including exculpatory information), the potential violation, and other relevant information relating to liability to the General Counsel of FHFA, the “reviewing official” designated by the Director of FHFA.22 The reviewing official (or the designee thereof) would then make a determination of whether there is adequate evidence of liability. If so, the reviewing official would provide written notice to the Attorney General of the intent to refer the allegations to an ALJ as presiding officer. Under the terms of PFCRA and the authority of the Attorney General, DOJ could elect to bring an action for civil relief under other applicable law, or the FHFA action may be deferred or postponed to avoid interference with a criminal investigation or prosecution by the Attorney General.

If the Attorney General approves the use of PFCRA, FHFA's reviewing official may refer the case to an ALJ as presiding officer. To initiate the action, the reviewing official must provide notice to any person who is subject to the allegation of liability. That person may then request a formal hearing on the record and is entitled to all exculpatory information in the possession of the investigating official or the reviewing official. If a hearing is requested, the ALJ would determine liability based on the preponderance of the evidence and the amount of any penalty (and, if appropriate, any assessment) to be imposed. The interim final rule implements statutory provisions for an appeal of the ALJ's decision to the Director of FHFA as the “authority head” and then to the appropriate U.S. District Court.

FHFA's interim final rule provides for hearing and appeal rights of persons subject to allegations of liability for any penalty or assessment under PFCRA. FHFA currently has Rules of Practice and Procedure in place at title 12 of the Code of Federal Regulations, part 1209, which establish evidentiary, hearing, and appeals procedures and processes for hearings on the record at FHFA. Similar to the HUD rule, FHFA's PFCRA rule cross-references its existing administrative enforcement procedures for purposes of PFCRA actions. FHFA's existing rules of procedure were issued subject to a notice and comment rulemaking process and, by using them for purposes of any PFCRA action, FHFA ensures due process and procedural consistency.

Maximum Penalty Amount. PFCRA establishes a maximum civil penalty of $5,000 for each violation of the Act.23 That amount is required to be adjusted for inflation by the Adjustment Improvements Act, which also sets forth the formula for the initial, or “catch up,” adjustment.24 FHFA has incorporated that adjustment into its interim final rule, resulting in a maximum penalty amount of $10,781. This is an increase in the maximum penalty amount initially set forth in the proposed rule, but it is required to comply with the Adjustment Improvements Act. This is the only substantive change FHFA has made to the rule as proposed.25

The Adjustment Improvements Act also requires that such “catch-up” adjustments be published in the form of an interim final rule. This rule is issued as an interim final rule, rather than as a final rule, only for purposes of meeting that requirement. If, prior to the effective date of the interim final rule, FHFA does not receive any comments from which FHFA concludes that the rule should be revised, this rule will become final without further action by FHFA.

The interim final rule does not contain any collections of information pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Therefore, FHFA has not submitted any information to the Office of Management and Budget for review.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that a regulation that has a significant economic impact on a substantial number of small entities, including small businesses and or small organizations, must include an initial regulatory flexibility analysis describing the regulation's impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities.26 FHFA has considered the impact of the interim final rule under the Regulatory Flexibility Act. The General Counsel of FHFA certifies that the interim final rule is not likely to have a significant economic impact on a substantial number of small entities, because the regulation merely fulfills a statutory requirement under PFCRA to establish procedures for imposing civil penalties and assessments against those persons who have violated existing prohibitions against making fraudulent claims or statements to FHFA in its contracting and employment activities, and does not alter any underlying requirements or prohibitions or impose any new requirements or prohibitions on persons subject to regulation by FHFA.

Accordingly, for the reasons stated in the preamble, and under the authority of 12 U.S.C. 4511, 4513, 4514, 4526, 4585 and 4636 and 31 U.S.C. 3803, FHFA amends subchapter A of Chapter XII of Title 12 of the Code of Federal Regulations by adding a new Part 1217 to read as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to the specified products. The NPRM was published in the Federal Register on April 1, 2016 (81 FR 18806). The NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

You may obtain further information by examining the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-4551.

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (81 FR 18806, April 1, 2016).

We reviewed the available data and determined that air safety and the public interest require adopting this AD as proposed.

RRD has issued Alert Service Bulletin (ASB) BR700-72-A101523, Revision 3, dated December 10, 2015. The service information describes procedures for replacing the pawl carrier pivot pins. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 4 engines installed on airplanes of U.S. registry. We also estimate that it will take about 3 hours per engine to comply with this AD. The average labor rate is $85 per hour. Required parts cost about $860 per engine. Based on these figures, we estimate the cost of this AD on U.S. operators to be $4,460.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect 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.

For the reasons discussed above, I certify this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class E airspace at Belleville Municipal Airport, Belleville, KS; Stanton County Municipal Airport, Johnson, KS; Marysville Municipal Airport, Marysville, KS; Atkinson Municipal Airport, Pittsburg, KS; and Washington County Veteran's Memorial Airport, Washington, KS.

On March 29, 2016, the FAA published in the Federal Register a notice of proposed rulemaking (NPRM) to modify Class E airspace at Belleville Municipal Airport, Belleville, KS; Stanton County Municipal Airport, Johnson, KS; Marysville Municipal Airport, Marysville, KS; Atkinson Municipal Airport, Pittsburg, KS; and Washington County Veteran's Memorial Airport, Washington, KS (81 FR 17420) Docket No. FAA-2016-4234. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Subsequent to publication, the FAA found an editorial error in the legal description for Marysville, KS; and the name of the town in the airspace designation and legal description for Atkinson Municipal Airport. These errors are corrected in this rule.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9Z, dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.9Z lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 modifies Class E airspace extending upward from 700 feet above the surface by removing the approach extensions at Belleville Municipal Airport, Belleville, KS; Stanton County Municipal Airport, Johnson, KS; Marysville Municipal Airport, Marysville, KS; and Atkinson Municipal Airport, Pittsburg, KS, due to decommissioning of NDBs, removal of NDB approaches, and the implementation of RNAV standard instrument approach procedures at the airports. Also, controlled airspace at Washington County Veteran's Memorial Airport is reduced from a 7.3-mile radius to a 6.3-mile radius of the airport. This action also updates the geographic coordinates of Marysville Municipal Airport, Marysville, KS, and Atkinson Municipal Airport, Pittsburg, KS, as well as noting the correct town for Atkinson Municipal Airport. Additionally, this action notes the name of Washington County Veteran's Memorial Airport (formerly Washington County Memorial Airport) to coincide with the FAAs aeronautical database. This rule is necessary for the safety and management of IFR operations under standard instrument approach procedures at the above airports.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

Background

NASA published a proposed rule in the Federal Register at 80 FR 63474 on October 20, 2015, to amend its regulations that govern International Space Station crewmembers, mementos aboard Orion and Space Launch System (SLS) missions, and the authority of the NASA Commander and removes the Agency's policy on space flight participation and other policies that were relevant to the Space Shuttle. The Space Shuttle Program formally commenced in 1972. After a total of 135 flights, the last of which occurred in July 2011, the Space Shuttle was officially retired after 30 years of operation. During this period, the fleet and its crews carried out a large and varied number of tasks to meet the goals and objectives of the Nation's space program. These included the launch of large interplanetary probes, the performance of scientific experiments under microgravity conditions, the on-orbit servicing of the Hubble Space Telescope, and the assembly and resupply of the International Space Station. Functions previously performed by the Space Shuttle will now be done by many different spacecraft currently flying or in development, including vehicles owned by both the Government and the private sector.

NASA is currently developing a new human-rated spacecraft, the Orion, and launch system, the Space Launch System (SLS). The Orion and SLS are designed to conduct journeys into deep space. With the end of the Space Shuttle Program, many sections of this rule are no longer relevant and will be deleted. However, sections which have current or future application will be maintained and updated or amended as required.

Significant elements of part 1214, in its current form, govern the use and operation of the Space Shuttle and cover a diverse number of areas including requirements for reimbursement for Space Shuttle services to civil U.S. Government and foreign users, the flight of Payload Specialists and Space Flight Participants on Space Shuttle missions, reimbursement terms, and conditions for use of the Spacelab Module. Also covered in part 1214 are the rules for the NASA Astronaut Candidate Recruitment and Selection Program, the Code of Conduct for the International Space Station Crew, and the Authority of the Space Shuttle Commander.

The intent of these amendments is to repeal those portions of the regulation that, with the ending of the Space Shuttle Program, are no longer relevant. Sections that remain in effect will be amended because they are outdated. Other sections that are applicable to the Orion and SLS will also be amended. Provisions currently in force relating to approving mementoes for flight and preventing the use of mementoes for economic gain remain relevant and were incorrectly omitted from the proposed rule published on October 20, 2015. These provisions have been reincorporated in the final rule at 14 CFR 1214.601 and 1214.602, except for language relating to dimensions and areas specific to the Space Shuttle which have not been retained.

There were two public comments received in response to the proposed rule. Comments were supportive in nature and do not warrant any changes in the rule's language.

Section 1214 is established under the National Aeronautics and Space Act (Space Act) (51 U.S.C. 20101, et seq.).

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, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This rule has been designated as “not significant” under section 3(f) of Executive Order 12866.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an agency to prepare an initial regulatory flexibility analysis to be published at the time the rule is published. This requirement does not apply if the agency “certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities” (5 U.S.C. 603). This rule updates these sections of the CFR to align with Federal guidelines and does not have a significant economic impact on a substantial number of small entities.

This final rule does not contain any information collection requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999) requires regulations be reviewed for Federalism effects on the institutional interest of states and local governments, and if the effects are sufficiently substantial, preparation of the Federal assessment is required to assist senior policy makers. The amendments will not have any substantial direct effects on state and local governments within the meaning of the Executive Order. Therefore, no Federalism assessment is required.

For the reason stated in the preamble, NASA is amending 14 CFR part 1214 as follows: