82 FR 58348 - Federal Civil Penalties Adjustments

NATIONAL FOUNDATION FOR THE ARTS AND HUMANITIES
National Endowment for the Arts

Federal Register Volume 82, Issue 237 (December 12, 2017)

The National Endowment for the Arts (NEA) is adjusting the maximum civil monetary penalties that may be imposed for violations of the Program Fraud Civil Remedies Act (PFCRA) and the NEA's Restrictions on Lobbying to reflect the requirements of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act). The 2015 Act further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment Act) to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. This final rule finalizes the catch-up inflation adjustment interim final rule required by the Inflation Adjustment Act.

[Federal Register Volume 82, Number 237 (Tuesday, December 12, 2017)]
[Rules and Regulations]
[Pages 58348-58350]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-26733]


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NATIONAL FOUNDATION FOR THE ARTS AND HUMANITIES

National Endowment for the Arts

45 CFR Parts 1149 and 1158

RIN 3135-AA33


Federal Civil Penalties Adjustments

AGENCY: National Endowment for the Arts, National Foundation for the 
Arts And Humanities.

ACTION: Final rule.

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SUMMARY: The National Endowment for the Arts (NEA) is adjusting the 
maximum civil monetary penalties that may be imposed for violations of 
the Program Fraud Civil Remedies Act (PFCRA) and the NEA's Restrictions 
on Lobbying to reflect the requirements of the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act). The 
2015 Act further amended the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (the Inflation Adjustment Act) to improve the 
effectiveness of civil monetary penalties and to maintain their 
deterrent effect. This final rule finalizes the catch-up inflation 
adjustment interim final rule required by the Inflation Adjustment Act.

DATES: Effective date: This rule is effective December 12, 2017.

FOR FURTHER INFORMATION CONTACT: Aswathi Zachariah, Assistant General 
Counsel, National Endowment for the Arts, 400 7th St. SW, Washington, 
DC 20506, Telephone: 202-682-5418.

SUPPLEMENTARY INFORMATION:

1. Background

    On June 15, 2017 the NEA issued an interim final rule entitled 
``Implementing the Federal Civil Penalties Adjustment Act Improvements 
Act of 2015'' (the IFR) to implement the required catch-up and annual 
adjustments to the NEA's civil monetary penalties. (See 82 FR 27431) 
This rule finalizes the catch-up adjustment interim final rule and 
outlines the required annual adjustment of civil penalties in 
accordance with the 2015 Act, as amended.

2. Overview of Final Rule

    The 2015 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. Inflation adjustments will be based on the percent 
change in the Consumer Price Index for all Urban Consumers (CPI-U) for 
the month of October preceding the date of the adjustment, relative to 
the October CPI-U in the year of the previous adjustment.
    The Office of Management and Budget has issued two memoranda, 
providing guidance on implementing and calculating adjustments.\1\
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    \1\ OMB Memoranda M-16-06 and M-17-11.
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    In the IFR, the NEA identified two civil penalties in its 
regulations that require adjustment: (1) The penalty associated with 
Restrictions on Lobbying (45 CFR 1158.400; 45 CFR part 1158, app. A) 
and (2) the penalty associated with the Program Fraud Civil Remedies 
Act (45 CFR 1149.9). The NEA received no comments in response to the 
IFR and the proposed adjustments and therefore will continue to publish 
subsequent annual adjustments in

[[Page 58349]]

accordance with the law or as directed by the Office of Management and 
Budget.

3. Subsequent Annual Adjustments

    The 2015 Act requires agencies to make annual adjustments to civil 
penalty amounts no later than January 15 of each year following the 
adjustments contained in this final rule. For subsequent annual 
adjustments made in accordance with the 2015 Act, the amount of the 
adjustment will have the same basis as the annual adjustments 
previously described in the IFR (the percent increase between the CPI-U 
for the month of October preceding the date of the adjustment and the 
CPI-U for the October one year prior to the October immediately 
preceding the date of the adjustment). If there is no increase, there 
is no adjustment of civil penalties. Therefore, if the NEA adjusts 
penalties in January 2018, the adjustment will be calculated based on 
the percent change between the CPI-U for October 2017 (the October 
immediately preceding the date of adjustment) and October 2016 (the 
October one year prior to October 2017). The NEA will publish the 
amount of these annual inflation adjustments in the Federal Register no 
later than January 15 of each year.

4. Compliance

Administrative Procedure Act

    Section 553 of the Administrative Procedure Act requires agencies 
to provide an opportunity for notice and comment on rulemaking and also 
requires agencies to delay a rule's effective date for 30 days 
following the date of publication in the Federal Register unless an 
agency finds good cause to forgo these requirements. However, section 
4(b)(2) of the 2015 Act requires agencies to adjust civil monetary 
penalties notwithstanding section 553 of the Administrative Procedure 
Act (APA) and publish annual inflation adjustments in the Federal 
Register. ``This means that the public procedure the APA generally 
requires . . . is not required for agencies to issue regulations 
implementing the annual adjustment.'' OMB Memorandum M-17-11.
    Even if the 2015 Act did not except this rulemaking from section 
553 of the APA, the NEA has good cause to dispense with notice and 
comment. Section 553(b)(B), authorizes agencies to dispense with notice 
and comment procedures for rulemaking if the agency finds good cause 
that notice and comment are impracticable, unnecessary, or contrary to 
public interest. The annual adjustments to civil penalties for 
inflation and the method of calculating those adjustments are 
established by section 5 of the FCPIAA, as amended, leaving no 
discretion for the NEA. Accordingly, public comment would be 
impracticable because the NEA would be unable to consider such comments 
in the rulemaking process.

Regulatory Planning and Review (Executive Order 12866)

    Executive Order 12866 (E.O. 12866) established a process for review 
of rules by the Office of Information and Regulatory Affairs, which is 
within the Office of Management and Budget (OMB). Only ``significant'' 
proposed and final rules are subject to review under this Executive 
Order. ``Significant,'' as used in E.O. 12866, means ``economically 
significant.'' It refers to rules with (1) an impact on the economy of 
$100 million; or that (2) were inconsistent or interfered with an 
action taken or planned by another agency; (3) materially altered the 
budgetary impact of entitlements, grants, user fees, or loan programs; 
or (4) raised novel legal or policy issues.
    This final rule would not be a significant policy change and OMB 
has not reviewed this final rule under E.O. 12866. We have made the 
assessments required by E.O. 12866 and determined that this rule: (1) 
Will not have an effect of $100 million or more on the economy; (2) 
will not adversely affect in a material way the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, or Tribal governments or communities; (3) will not create a 
serious inconsistency or otherwise interfere with an action taken or 
planned by another agency; (4) does not alter the budgetary effects of 
entitlements, grants, user fees, or loan programs or the rights or 
obligations of their recipients; and (5) does not raise novel legal or 
policy issues.

Executive Order 13771

    Executive Order 13771 section 5 requires that agencies, in most 
circumstances, remove or rescind two regulations for every regulation 
promulgated unless they request and are specifically exempted from that 
order's requirements by the Director of the Office of Management and 
Budget.
    This rule is not subject to the requirements of Executive Order 
13771 because this rule is not significant under Executive Order 12866. 
Furthermore, the NEA has requested and has received an exemption from 
the requirement that the agency rescind two regulations for every 
regulation it promulgate from the Director of the Office of Management 
and Budget.

Federalism (Executive Order 13132)

    This rulemaking does not have Federalism implications, as set forth 
in E.O. 13132. As used in this order, Federalism implications mean 
``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.'' The NEA 
has determined that this rulemaking will not have Federalism 
implications within the meaning of E.O. 13132.

Civil Justice Reform (Executive Order 12988)

    This rulemaking meets the applicable standards set forth in section 
3(a) and 3(b)(2) of E.O. 12988. Specifically, this final rule is 
written in clear language designed to help reduce litigation.

Indian Tribal Governments (Executive Order 13175)

    Under the criteria in E.O. 13175, we have evaluated this final rule 
and determined that it would have no potential effects on Federally 
recognized Indian Tribes.

Takings (Executive Order 12630)

    Under the criteria in E.O. 12630, this rulemaking does not have 
significant takings implications. Therefore, a takings implication 
assessment is not required.

Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b))

    This rulemaking will not have a significant adverse impact on a 
substantial number of small entities, including small businesses, small 
governmental jurisdictions, or certain small not-for-profit 
organizations.

Paperwork Reduction Act of 1995 (44 U.S.C., Chapter 35)

    This rulemaking will not impose any ``information collection'' 
requirements under the Paperwork Reduction Act. Under the act, 
information collection means the obtaining or disclosure of facts or 
opinions by or for an agency by 10 or more nonfederal persons.

Unfunded Mandates Act of 1995 (Section 202, Pub. L. 104-4)

    This rulemaking does not contain a Federal mandate that will result 
in the expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year.

[[Page 58350]]

National Environmental Policy Act of 1969 (5 U.S.C. 804)

    The final rule will not have significant effect on the human 
environment.

Small Business Regulatory Enforcement Fairness Act of 1996 (Sec. 804, 
Pub. L. 104-121)

    This final rule would not be a major rule as defined in section 804 
of the Small Business Regulatory Enforcement Fairness Act of 1996. This 
final rule will not result in an annual effect on the economy of 
$100,000,000 or more, a major increase in costs or prices, significant 
adverse effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based companies to 
compete with foreign based companies in domestic and export markets.

E-Government Act of 2002 (44 U.S.C. 3504)

    Section 206 of the E-Government Act requires agencies, to the 
extent practicable, to ensure that all information about that agency 
required to be published in the Federal Register is also published on a 
publicly accessible Website. All information about the NEA required to 
be published in the Federal Register may be accessed at www.arts.gov. 
This Act also requires agencies to accept public comments on their 
rules ``by electronic means.'' See heading ``Public Participation'' for 
directions on electronic submission of public comments on this final 
rule.
    Finally, the E-Government Act requires, to the extent practicable, 
that agencies ensure that a publicly accessible Federal Government 
Website contains electronic dockets for rulemakings under the 
Administrative Procedure Act of 1946 (5 U.S.C. 551 et seq.). Under this 
Act, an electronic docket consists of all submissions under section 
553(c) of title 5, United States Code; and all other materials that by 
agency rule or practice are included in the rulemaking docket under 
section 553(c) of title 5, United States Code, whether or not submitted 
electronically. The Website https://www.regulations.gov contains 
electronic dockets for the NEA's rulemakings under the Administrative 
Procedure Act of 1946.

Plain Writing Act of 2010 (5 U.S.C. 301)

    Under this Act, the term ``plain writing'' means writing that is 
clear, concise, well-organized, and follows other best practices 
appropriate to the subject or field and intended audience. To ensure 
that this rule has been written in plain and clear language so that it 
can be used and understood by the public, the NEA has modeled the 
language of this rule on the Federal Plain Language Guidelines.

Public Participation

    The NEA has written this final rule in compliance with E.O. 13563 
by ensuring its accessibility, consistency, simplicity of language, and 
overall comprehensibility. In addition, the public participation goals 
of this order are also satisfied by the NEA's participation in a 
process in which its views and information are made public to the 
extent feasible, and before any decisions are actually made. This will 
allow the public the opportunity to react to the comments, arguments, 
and information of others during the rulemaking process. The NEA 
initiates its participation in an open exchange by posting the 
regulation and its rulemaking docket on https://www.regulations.gov.
    Finally, Section 2 of E.O. 13563 directs agencies, where feasible 
and appropriate, to seek the views of those who are likely to be 
affected by rulemaking. This provision emphasizes the importance of 
prior consultation with ``those who are likely to benefit from and 
those who are potentially subject to such rulemaking.'' One goal is to 
solicit ideas about alternatives, relevant costs and benefits (both 
quantitative and qualitative), and potential flexibilities. The NEA 
reaches out to interested and affected parties by soliciting comments.

List of Subjects in 45 CFR Parts 1149 and 1158

    Administrative practice and procedure, Government contracts, Grant 
programs, Loan programs, Lobbying, Penalties.


0
For the reasons stated in the preamble, the interim rule amending 45 
CFR parts 1149 and 1158 which was published at 82 FR 27431 on June 15, 
2017 is adopted as final without change.

    Dated: December 7, 2017.
Jillian Miller,
Director of Guidelines and Panel Operations, Administrative Services, 
National Endowment for the Arts.
[FR Doc. 2017-26733 Filed 12-11-17; 8:45 am]
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