82 FR 2892 - Civil Monetary Penalty Inflation Adjustment-Alcoholic Beverage Labeling Act

DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau

Federal Register Volume 82, Issue 6 (January 10, 2017)

This document informs the public that the maximum penalty for violations of the Alcoholic Beverage Labeling Act (ABLA) is being adjusted in accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. Prior to the publication of this document, any person who violated the provisions of the ABLA was subject to a civil penalty of not more than $19,787, with each day constituting a separate offense. This document announces that this maximum penalty is being increased to $20,111.

[Federal Register Volume 82, Number 6 (Tuesday, January 10, 2017)]
[Rules and Regulations]
[Pages 2892-2893]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-00082]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 16

[Docket No. TTB-2017-0001; Notice No. 170]


Civil Monetary Penalty Inflation Adjustment--Alcoholic Beverage 
Labeling Act

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Notification of civil monetary penalty adjustment.

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SUMMARY: This document informs the public that the maximum penalty for 
violations of the Alcoholic Beverage Labeling Act (ABLA) is being 
adjusted in accordance with the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended. Prior to the publication of this 
document, any person who violated the provisions of the ABLA was 
subject to a civil penalty of not more than $19,787, with each day 
constituting a separate offense. This document announces that this 
maximum penalty is being increased to $20,111.

DATES: The new maximum civil penalty for violations of the ABLA takes 
effect on January 10, 2017 and applies to penalties that are assessed 
after that date.

FOR FURTHER INFORMATION CONTACT: Andrew L. Malone, Public Guidance 
Program Manager, Regulations and Rulings Division, Alcohol and Tobacco 
Tax and Trade Bureau, 1310 G Street NW., Box 12, Washington, DC 20005; 
(202) 453-1039, ext. 188.

SUPPLEMENTARY INFORMATION: 

Background

Statutory Authority for Federal Civil Monetary Penalty Inflation 
Adjustments

    The Federal Civil Penalties Inflation Adjustment Act of 1990 (the 
Inflation Adjustment Act), Public Law 101-410, 104 Stat. 890, 28 U.S.C. 
2461 note, requires the regular adjustment and evaluation of civil 
monetary penalties to maintain their deterrent effect and helps to 
ensure that penalty amounts imposed by the Federal Government are 
properly accounted for and collected. A ``civil monetary penalty'' is 
defined in the Inflation Adjustment Act as any penalty, fine, or other 
such sanction that is: (1) For a specific monetary amount as provided 
by Federal law, or has a maximum amount provided for by Federal law; 
(2) assessed or enforced by an agency pursuant to Federal law; and (3) 
assessed or enforced pursuant to an administrative proceeding or a 
civil action in the Federal courts.
    The Debt Collection Improvement Act of 1996 (the Improvement Act of 
1996), Public Law 104-134, section 31001(s), 110 Stat. 1321, enacted on 
April 26, 1996, amended the Inflation Adjustment Act by requiring civil 
monetary penalties to be adjusted for inflation.
    The Inflation Adjustment Act was further amended by the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 
Improvements Act of 2015), Public Law 114-74, section 701, 129 Stat. 
584, enacted on November 2, 2015. The Improvements Act of 2015 changed 
the method agencies use to calculate inflation adjustments to civil 
monetary penalties, as well as the method and frequency of future 
adjustments. The Improvements Act of 2015 also instructed agencies to 
apply its method of calculating the inflation adjustment to the 
original statutory penalty, rather than to penalties as they were 
adjusted under the Improvement Act of 1996. To account for inflation 
that took place between the enactment of the original penalties and the 
enactment of the Improvements Act of 2015, agencies must make a 
``catch-up'' first adjustment through an interim final rulemaking that 
is published no later than July 1, 2016, and takes effect no later than 
August 1, 2016. Agencies shall adjust civil monetary penalties by the 
inflation adjustment described in section 5 of the Inflation Adjustment 
Act no later than January 15 of every year thereafter. The Improvements 
Act of 2015 also provides that any increase in a civil monetary penalty 
shall apply only to civil monetary penalties, including those whose 
associated violation predated such an increase, which are assessed 
after the date the increase takes effect.
    As amended, the Inflation Adjustment Act provides that the 
inflation adjustment does not apply to civil monetary penalties under 
the Internal Revenue Code of 1986 or the Tariff Act of 1930.

Alcoholic Beverage Labeling Act

    The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the 
Federal Alcohol Administration Act (FAA Act) pursuant to section 
1111(d) of the Homeland Security Act of 2002, codified at 6 U.S.C. 
531(d). The Secretary has delegated various authorities through 
Treasury Department Order 120-01, dated December 10, 2013, (superseding 
Treasury Department Order 120-01, dated January 24, 2003), to the TTB 
Administrator to perform the functions and duties in the administration 
and enforcement of this law.
    The FAA Act contains the Alcoholic Beverage Labeling Act (ABLA) of 
1988, Public Law 100-690, 27 U.S.C. 213-219a, which was enacted on 
November 18, 1988. Section 204 of the ABLA, codified in 27 U.S.C. 215, 
requires that a health warning statement appear on the labels of all 
containers of alcoholic beverages manufactured, imported, or bottled 
for sale or distribution in the United States, as well as on containers 
of alcoholic beverages that are manufactured, imported, bottled, or

[[Page 2893]]

labeled for sale, distribution, or shipment to members or units of the 
U.S. Armed Forces, including those located outside the United States.
    The health warning statement requirement applies to containers of 
alcoholic beverages manufactured, imported, or bottled for sale or 
distribution in the United States on or after November 18, 1989. The 
statement reads as follows:

    GOVERNMENT WARNING: (1) According to the Surgeon General, women 
should not drink alcoholic beverages during pregnancy because of the 
risk of birth defects. (2) Consumption of alcoholic beverages 
impairs your ability to drive a car or operate machinery, and may 
cause health problems.

    Section 204 of the ABLA also specifies that the Secretary of the 
Treasury shall have the power to ensure the enforcement of the 
provisions of the ABLA and issue regulations to carry out them out. In 
addition, section 207 of the ABLA, codified in 27 U.S.C. 218, provides 
that any person who violates the provisions of the ABLA is subject to a 
civil penalty of not more than $10,000, with each day constituting a 
separate offense.
    Most of the civil monetary penalties administered by TTB are 
imposed by the Internal Revenue Code of 1986, and thus are not subject 
to the inflation adjustment mandated by the Inflation Adjustment Act. 
The only civil monetary penalty enforced by TTB that is subject to the 
inflation adjustment is the penalty imposed by the ABLA at 27 U.S.C. 
218.

TTB Regulations

    The TTB regulations implementing the ABLA are found in 27 CFR part 
16, and the regulations implementing the Inflation Adjustment Act with 
respect to the ABLA penalty are found in 27 CFR 16.33. This section 
indicates that the ABLA provides that any person who violates the 
provisions of this part shall be subject to a civil penalty of not more 
than $10,000, but also states that, pursuant to the provisions of the 
Federal Civil Penalties Inflation Adjustment Act of 1990, as amended, 
this civil penalty is subject to periodic cost-of-living adjustment. 
Accordingly, any person who violates the provisions of 27 CFR part 16 
shall be subject to a civil penalty of not more than the amount listed 
at https://www.ttb.gov/regulation_guidance/ablapenalty.html. Each day 
shall constitute a separate offense.
    To adjust the penalty, Sec.  16.33(b) indicates that TTB will 
provide notice in the Federal Register and at the Web site mentioned 
above of cost-of-living adjustments to the civil penalty for violations 
of this part.
    In this document, TTB is publishing its yearly adjustment to the 
maximum ABLA penalty, as required by the Inflation Adjustment Act, as 
amended.
    TTB made the initial adjustment to the ABLA penalty required by the 
Inflation Adjustment Act, as amended, in an interim final rule that was 
published and effective on July 1, 2016 (T.D. TTB-138, 81 FR 43062). 
Subsequent to the initial adjustment, the Improvements Act of 2015 
provides that, not later than January 15 of each year after the initial 
adjustment, the head of each agency shall adjust each civil monetary 
penalty subject to the Inflation Adjustment Act, as amended, by the 
inflation adjustment described in section 5 of the Act.
    As mentioned earlier, the ABLA contains a maximum civil monetary 
penalty, rather than a range of minimum and maximum civil monetary 
penalties. For such penalties, Section 5 indicates that the inflation 
adjustment shall be determined by increasing the maximum penalty by the 
cost-of-living adjustment. The cost-of-living adjustment means the 
percentage (if any) by which the Consumer Price Index for all-urban 
consumers (CPI-U) for the month of October preceding the date of the 
adjustment exceeds the CPI-U for the month of October 1 year before the 
month of October preceding the date of the adjustment.
    The CPI-U in October 2015 was 237.838, and the CPI-U in October 
2016 was 241.729. The rate of inflation between October 2015 and 
October 2016 is therefore 1.636 percent. When applied to the current 
ABLA penalty of $19,787, this rate of inflation yields a raw 
(unrounded) inflation adjustment of $323.72. Rounded to the nearest 
dollar, the inflation adjustment is $324, meaning that the new maximum 
civil penalty for violations of the ABLA will be $20,111.
    The new maximum civil penalty will apply to all penalties that are 
assessed after January 10, 2017. TTB has also updated its Web page at 
https://www.ttb.gov/regulation_guidance/ablapenalty.html to reflect the 
adjusted penalty.

    Signed: January 3, 2017.
John J. Manfreda,
Administrator.
[FR Doc. 2017-00082 Filed 1-9-17; 8:45 am]
 BILLING CODE 4810-31-P