82 FR 8986 - Civil Monetary Penalties Annual Inflation Adjustments

FEDERAL ELECTION COMMISSION

Federal Register Volume 82, Issue 21 (February 2, 2017)

As required by the Federal Civil Penalties Inflation Adjustment Act of 1990, the Federal Election Commission is adjusting for inflation the civil monetary penalties established under the Federal Election Campaign Act, the Presidential Election Campaign Fund Act, and the Presidential Primary Matching Payment Account Act. The civil monetary penalties being adjusted are those negotiated by the Commission or imposed by a court for certain statutory violations, and those imposed by the Commission for late filing of or failure to file certain reports required by the Federal Election Campaign Act. The adjusted civil monetary penalties are calculated according to a statutory formula and the adjusted amounts will apply to penalties assessed after the effective date of these rules.

[Federal Register Volume 82, Number 21 (Thursday, February 2, 2017)]
[Rules and Regulations]
[Pages 8986-8989]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-01431]


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FEDERAL ELECTION COMMISSION

11 CFR Part 111

[Notice 2017-01]


Civil Monetary Penalties Annual Inflation Adjustments

AGENCY: Federal Election Commission.

ACTION: Final rules.

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SUMMARY: As required by the Federal Civil Penalties Inflation 
Adjustment Act of 1990, the Federal Election Commission is adjusting 
for inflation the civil monetary penalties established under the 
Federal Election Campaign Act, the Presidential Election Campaign Fund 
Act, and the Presidential Primary Matching Payment Account Act. The 
civil monetary penalties being adjusted are those negotiated by the 
Commission or imposed by a court for certain statutory violations, and 
those imposed by the Commission for late filing of or failure to file 
certain reports required by the Federal Election Campaign Act. The 
adjusted civil monetary penalties are calculated according to a 
statutory formula and the adjusted amounts will apply to penalties 
assessed after the effective date of these rules.

DATES: The final rules are effective on February 2, 2017.

FOR FURTHER INFORMATION CONTACT: Mr. Neven F. Stipanovic, Acting 
Assistant General Counsel, or Mr. Eugene J. Lynch, Paralegal, Office of 
General Counsel, 999 E Street NW., Washington, DC 20463, (202) 694-1650 
or (800) 424-9530.

SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation 
Adjustment Act of 1990 (the ``Inflation Adjustment Act''),\1\ as 
amended by the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (the ``2015 Act''),\2\ requires federal 
agencies, including the Commission, to adjust for inflation the civil 
monetary penalties within their jurisdiction according to prescribed 
formulas. A civil monetary penalty is ``any penalty, fine, or other 
sanction'' that (1) ``is for a specific amount'' or ``has a maximum 
amount'' under federal law; and (2) that a federal agency assesses or 
enforces ``pursuant to an administrative proceeding or a civil action'' 
in federal court.\3\ Under the Federal Election Campaign Act, 52 U.S.C. 
30101-46 (``FECA''), the Commission may seek and assess civil monetary 
penalties for violations of FECA, the Presidential Election Campaign 
Fund Act, 26 U.S.C. 9001-13, and the Presidential Primary Matching 
Payment Account Act, 26 U.S.C. 9031-42.
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    \1\ Public Law 101-410, 104 Stat. 890 (codified at 28 U.S.C. 
2461 note), amended by Debt Collection Improvement Act of 1996, 
Public Law 104-134, sec. 31001(s)(1), 110 Stat. 1321, 1373; Federal 
Reports Elimination Act of 1998, Public Law 105-362, sec. 1301, 112 
Stat. 3280.
    \2\ Public Law 114-74, section 701, 129 Stat. 584, 599.
    \3\ Inflation Adjustment Act, section 3(2).
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    As required by the 2015 Act,\4\ the Commission recently instituted 
a one-time ``catch-up'' inflation adjustment to its civil monetary 
penalties. Civil Monetary Penalties Inflation Adjustments, 81 FR 41196 
(June 24, 2016). Starting in 2017, the Inflation Adjustment Act 
requires federal agencies to adjust their civil penalties annually, and 
the adjustments must take effect no later than January 15 of every 
year.\5\ Pursuant to guidance issued by the Office of Management and 
Budget,\6\ the Commission is now adjusting its civil monetary penalties 
for 2017.\7\
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    \4\ Inflation Adjustment Act, section 4(b)(1).
    \5\ Inflation Adjustment Act, section 4(a).
    \6\ See Inflation Adjustment Act section 7(a) (requiring OMB to 
``issue guidance to agencies on implementing the inflation 
adjustments required under this Act''); see also Memorandum from 
Shaun Donovan, Director, Office of Management and Budget, to Heads 
of Executive Departments and Agencies, M-17-11 (Dec. 16, 2016), 
https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf (``OMB Memorandum'').
    \7\ Inflation Adjustment Act, section 5.
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    The Commission must adjust for inflation its civil monetary 
penalties ``notwithstanding Section 553'' of the Administrative 
Procedures Act (``APA'').\8\ Thus, the APA's notice-and-comment and 
delayed effective date requirements in 5 U.S.C. 553(b)-(d) do not apply 
because Congress has specifically exempted agencies from these 
requirements.\9\
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    \8\ Inflation Adjustment Act, section 4(b)(2).
    \9\ See, e.g., Asiana Airlines v. FAA, 134 F.3d 393, 396-99 
(D.C. Cir. 1998) (finding APA ``notice and comment'' requirement not 
applicable where Congress clearly expressed intent to depart from 
normal APA procedures).
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    Furthermore, because the inflation adjustments made through these 
final rules are required by Congress and involve no Commission 
discretion or policy judgments, these rules do not need to be submitted 
to the Speaker of the House of Representatives or the President of the 
Senate under the Congressional Review Act, 5 U.S.C. 801 et seq. 
Moreover, because the APA's notice-and-comment procedures do not apply 
to these final rules, the Commission is not required to conduct a 
regulatory flexibility analysis under 5 U.S.C. 603 or 604. See 5 U.S.C. 
601(2), 604(a). Nor is the Commission required to submit these 
revisions for congressional review under FECA. See 5 U.S.C. 
30111(d)(1), (4) (providing for

[[Page 8987]]

congressional review when Commission ``prescribe[s]'' a ``rule of 
law'').
    The new penalty amounts will apply to civil monetary penalties that 
are assessed after the date the increase takes effect, even if the 
associated violation predated the increase.\10\
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    \10\ Inflation Adjustment Act, section 6.
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Explanation and Justification

    As amended by the 2015 Act, the Inflation Adjustment Act requires 
the Commission to annually adjust its civil monetary penalties for 
inflation by applying a cost-of-living-adjustment (``COLA'') ratio.\11\ 
The COLA ratio is the percentage that the Consumer Price Index 
(``CPI'') \12\ ``for the month of October preceding the date of the 
adjustment'' exceeds the CPI for October of the previous year.\13\ To 
calculate the adjusted penalty, the Commission must increase the most 
recent civil monetary penalty amount by the COLA ratio.\14\ According 
to the Office of Management and Budget, the COLA ratio for 2017 is 
0.01636, or 1.636%; thus, to calculate the new penalties, the 
Commission must multiply the most recent civil monetary penalties in 
force by 1.01636.\15\
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    \11\ The COLA ratio must be applied to the most recent civil 
monetary penalties, which include the recent catch-up adjustments. 
Inflation Adjustment Act, section 4(a); see also OMB Memorandum at 
2.
    \12\ The Inflation Adjustment Act, sec. 3, uses the CPI ``for 
all-urban consumers published by the Department of Labor.''
    \13\ Inflation Adjustment Act, section 5(b)(1).
    \14\ Inflation Adjustment Act, section 5(a), (b)(1).
    \15\ OMB Memorandum at 1.
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    The Commission assesses two types of civil monetary penalties that 
must be adjusted for inflation. First are penalties that are either 
negotiated by the Commission or imposed by a court for violations of 
FECA, the Presidential Election Campaign Fund Act, or the Presidential 
Primary Matching Payment Account Act. These civil monetary penalties 
are set forth at 11 CFR 111.24. Second are the civil monetary penalties 
assessed through the Commission's Administrative Fines Program for late 
filing or non-filing of certain reports required by FECA. See 52 U.S.C. 
30109(a)(4)(C) (authorizing Administrative Fines Program), 30104(a) 
(requiring political committee treasurers to report receipts and 
disbursements within certain time periods). The penalty schedules for 
these civil monetary penalties are set out at 11 CFR 111.43 and 111.44.

1. 11 CFR 111.24--Civil Penalties

    FECA establishes the civil monetary penalties for violations of 
FECA and the other statutes within the Commission's jurisdiction. See 
52 U.S.C. 30109(a)(5), (6), (12). Commission regulations in 11 CFR 
111.24 provide the current inflation-adjusted amount for each such 
civil monetary penalty. To calculate the adjusted civil monetary 
penalty, the Commission multiplies the most recent penalty amount by 
the COLA ratio and rounds that figure to the nearest dollar.
    The actual adjustment to each civil monetary penalty is shown in 
the chart below.

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                                                                    Most recent                      New civil
                             Section                               civil penalty       COLA           penalty
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11 CFR 111.24(a)(1).............................................         $18,750         1.01636         $19,057
11 CFR 111.24(a)(2)(i)..........................................          40,000         1.01636          40,654
11 CFR 111.24(a)(2)(ii).........................................          65,593         1.01636          66,666
11 CFR 111.24(b)................................................           5,609         1.01636           5,701
11 CFR 111.24(b)................................................          14,023         1.01636          14,252
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2. 11 CFR 111.43, 111.44--Administrative Fines

    FECA authorizes the Commission to assess civil monetary penalties 
for violations of the reporting requirements of 52 U.S.C. 30104(a) 
according to the penalty schedules ``established and published by the 
Commission.'' 52 U.S.C. 30109(a)(4)(C)(i). The Commission has 
established two such schedules: The schedule in 11 CFR 111.43(a) 
applies to reports that are not election sensitive, and the schedule in 
11 CFR 111.43(b) applies to reports that are election sensitive.\16\ 
Each schedule contains two columns of penalties, one for late-filed 
reports and one for non-filed reports, with penalties based on the 
level of financial activity in the report and, if late-filed, its 
lateness.\17\ In addition, 11 CFR 111.43(c) establishes a civil 
monetary penalty for situations in which a committee fails to file a 
report and the Commission cannot calculate the relevant level of 
activity. Finally, 11 CFR 111.44 establishes a civil monetary penalty 
for failure to file timely reports of contributions received less than 
20 days, but more than 48 hours, before an election. See 52 U.S.C. 
30104(a)(6).
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    \16\ Election sensitive reports are certain reports due shortly 
before an election. See 11 CFR 111.43(d)(1).
    \17\ A report is considered to be ``not filed'' if it is never 
filed or is filed more than a certain number of days after its due 
date. See 11 CFR 111.43(e).
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    To determine the adjusted civil monetary penalty amount for each 
level of activity, the Commission multiplies the most recent penalty 
amount by the COLA ratio and rounds that figure to the nearest dollar. 
The new civil monetary penalties are shown in the schedules in the rule 
text, below.

List of Subjects in 11 CFR Part 111

    Administrative practice and procedures, Elections, Law enforcement, 
Penalties.

    For the reasons set out in the preamble, the Federal Election 
Commission amends subchapter A of chapter I of title 11 of the Code of 
Federal Regulations as follows:

PART 111--COMPLIANCE PROCEDURE (52 U.S.C. 30109, 30107(a))

0
1. The authority citation for part 111 continues to read as follows:

    Authority: 52 U.S.C. 30102(i), 30109, 30107(a), 30111(a)(8); 28 
U.S.C. 2461 note; 31 U.S.C. 3701, 3711, 3716-3719, and 3720A, as 
amended; 31 CFR parts 285 and 900-904.


Sec.  111.24  [Amended]

0
2. In the table below for Sec.  111.24, for each paragraph indicated in 
the left column, remove the number indicated in the middle column, and 
add in its place the number indicated in the right column.

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                Paragraph                     Remove            Add
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(a)(1)..................................         $18,750         $19,057
(a)(2)(i)...............................          40,000          40,654
(a)(2)(ii)..............................          65,593          66,666
(b).....................................           5,609           5,701
(b).....................................          14,023          14,252
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0
3. Section 111.43 is amended by revising paragraphs (a), (b), and (c) 
to read as follows:


Sec.  111.43  What are the schedules of penalties?

    (a) The civil money penalty for all reports that are filed late or 
not filed, except election sensitive reports and pre-election reports 
under 11 CFR 104.5,

[[Page 8988]]

shall be calculated in accordance with the following schedule of 
penalties:

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                                                 And the report was filed late,    Or the report was not filed,
  If the level of activity in the report was:     the civil money penalty is:      the civil money penalty is:
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$1-4,999.99 \1\...............................  [$33 + ($6 x Number of days      $326 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$5,000-9,999.99...............................  [$65 + ($6 x Number of days      $392 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$10,000-24,999.99.............................  [$139 + ($6 x Number of days     $654 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$25,000-49,999.99.............................  [$277 + ($26 x Number of days    $1176 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$50,000-74,999.99.............................  [$417 + ($105 x Number of days   $3751 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$75,000-99,999.99.............................  [$556 + ($139 x Number of days   $4862 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$100,000-149,999.99...........................  [$833 + ($174 x Number of days   $6252 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$150,000-199,999.99...........................  [$1112 + ($208 x Number of days  $7641 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$200,000-249,999.99...........................  [$1389 + ($243 x Number of days  $9030 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$250,000-349,999.99...........................  [$2084 + ($277 x Number of days  $11,114 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$350,000-449,999.99...........................  [$2779 + ($277 x Number of days  $12,503 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$450,000-549,999.99...........................  [$3473 + ($277 x Number of days  $13,197 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$550,000-649,999.99...........................  [$4168 + ($277 x Number of days  $13,893 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$650,000-749,999.99...........................  [$4862 + ($277 x Number of days  $14,587 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$750,000-849,999.99...........................  [$5557 + ($277 x Number of days  $15,282 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$850,000-949,999.99...........................  [$6252 + ($277 x Number of days  $15,976 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$950,000 or over..............................  [$6946 + ($277 x Number of days  $16,671 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
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\1\ The civil money penalty for a respondent who does not have any previous violations will not exceed the level
  of activity in the report.

    (b) The civil money penalty for election sensitive reports that are 
filed late or not filed shall be calculated in accordance with the 
following schedule of penalties:

----------------------------------------------------------------------------------------------------------------
                                                 And the report was filed late,    Or the report was not filed,
  If the level of activity in the report was:     the civil money penalty is:      the civil money penalty is:
----------------------------------------------------------------------------------------------------------------
$1-$4,999.99 \1\..............................  [$65 + ($13 x Number of days     $654 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$5,000-$9,999.99..............................  [$131 + ($13 x Number of days    $784 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$10,000-24,999.99.............................  [$196 + ($13 x Number of days    $1176 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$25,000-49,999.99.............................  [$417 + ($33 x Number of days    $1829 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$50,000-74,999.99.............................  [$625 + ($105 x Number of days   $4168 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$75,000-99,999.99.............................  [$833 + ($139 x Number of days   $5557 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$100,000-149,999.99...........................  [$1250 + ($174 x Number of days  $6946 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$150,000-199,999.99...........................  [$1667 + ($208 x Number of days  $8335 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$200,000-249,999.99...........................  [$2084 + ($243 x Number of days  $10,420 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$250,000-349,999.99...........................  [$3126 + ($277 x Number of days  $12,503 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$350,000-449,999.99...........................  [$4168 + ($277 x Number of days  $13,893 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$450,000-549,999.99...........................  [$5210 + ($277 x Number of days  $15,282 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].

[[Page 8989]]

 
$550,000-649,999.99...........................  [$6252 + ($277 x Number of days  $16,671 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$650,000-749,999.99...........................  [$7293 + ($277 x Number of days  $18,061 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$750,000-849,999.99...........................  [$8335 + ($277 x Number of days  $19,449 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$850,000-949,999.99...........................  [$9378 + ($277 x Number of days  $20,838 x [1 + (.25 x Number of
                                                 late)] x [1 + (.25 x Number of   previous violations)].
                                                 previous violations)].
$950,000 or over..............................  [$10,420 + ($277 x Number of     $22,228 x [1 + (.25 x Number of
                                                 days late)] x [1 + (.25 x        previous violations)].
                                                 Number of previous
                                                 violations)].
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\1\ The civil money penalty for a respondent who does not have any previous violations will not exceed the level
  of activity in the report.

    (c) If the respondent fails to file a required report and the 
Commission cannot calculate the level of activity under paragraph (d) 
of this section, then the civil money penalty shall be $7,641.
* * * * *


Sec.  111.44  [Amended]

0
4. Amend paragraph (a)(1) of Sec.  111.44 by removing ``$137'' and 
adding, in its place, ``$139''.

    On behalf of the Commission.

    Dated: January 5, 2017.
Matthew S. Petersen,
Commissioner, Federal Election Commission.
[FR Doc. 2017-01431 Filed 2-1-17; 8:45 am]
BILLING CODE 6715-01-P