83 FR 3077 - Civil Monetary Penalty Inflation Adjustment

DEPARTMENT OF DEFENSE
Office of the Secretary

Federal Register Volume 83, Issue 15 (January 23, 2018)

The Department of Defense is issuing this final rule to adjust each of its statutory civil monetary penalties (CMP) to account for inflation. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act), requires the head of each agency to adjust for inflation its CMP levels in effect as of November 2, 2015, under a revised methodology that was effective for 2016 and for each year thereafter.

[Federal Register Volume 83, Number 15 (Tuesday, January 23, 2018)]
[Rules and Regulations]
[Pages 3077-3079]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-01168]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 269

[Docket ID: DOD-2016-OS-0045]
RIN 0790-AK09


Civil Monetary Penalty Inflation Adjustment

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

ACTION: Final rule.

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SUMMARY: The Department of Defense is issuing this final rule to adjust 
each of its statutory civil monetary penalties (CMP) to account for 
inflation. The Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended by the Debt Collection Improvement Act of 1996 and the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015 (the 2015 Act), requires the head of each agency to adjust for 
inflation its CMP levels in effect as of November 2, 2015, under a 
revised methodology that was effective for 2016 and for each year 
thereafter.

DATES: This rule is effective January 23, 2018 and is applicable 
beginning on January 12, 2018.

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

SUPPLEMENTARY INFORMATION: 

Background Information

    The Federal Civil Penalties Inflation Adjustment Act of 1990, 
Public Law 101-410, 104 Stat. 890 (28 U.S.C. 2461, note), as amended by 
the Debt Collection Improvement Act of 1996, Public Law 104-134, April 
26, 1996, and further amended by the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 (the 2015 Act), Public Law 114-
74, November 2, 2015, required agencies to annually adjust the level of 
CMPs for inflation to improve their effectiveness and maintain their 
deterrent effect. The 2015 Act required that not later than July 1, 
2016, and not later than January 15 of every year thereafter, the head 
of each agency must adjust each CMP within its jurisdiction by the 
inflation adjustment described in the 2015 Act. The inflation 
adjustment is determined by increasing the maximum CMP or the range of 
minimum and maximum CMPs, as applicable, for each CMP by the cost-of-
living adjustment, rounded to the nearest multiple of $1. The cost-of-
living adjustment is the percentage (if any) for each CMP by which the 
Consumer Price Index (CPI) for the month of October preceding the date 
of the adjustment (January 15), exceeds the CPI for the month of 
October in the previous calendar year.
    The initial catch up adjustments for inflation to the Department of 
Defense's CMPs were published as an interim final rule in the Federal 
Register on May 26, 2016 (81 FR 33389-33391) and became effective on 
that date. The interim final rule was published as a final rule without 
change on September 12, 2016 (81 FR 62629-62631), effective that date. 
The revised methodology for agencies for 2018 and each year thereafter 
provides for the improvement of the effectiveness of CMPs and to 
maintain their deterrent effect. Effective 2018, agencies' annual 
adjustments for inflation to CMPs shall take effect not later than 
January 15. The Department of Defense is adjusting the level of all 
civil monetary penalties under its jurisdiction by the Office of 
Management and Budget (OMB) directed cost-of-living adjustment 
multiplier for 2018 of 1.02041 prescribed in OMB Memorandum M-18-03, 
``Implementation of Penalty Inflation Adjustments for 2018, pursuant to 
the Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015,'' dated December 15, 2017. The Department of Defense's 2018 
adjustments for inflation to CMPs apply only to those CMPs, including 
those whose associated violation predated such adjustment, which are 
assessed by the Department of Defense after the effective date of the 
new CMP level.

Statement of Authority and Costs and Benefits

    Pursuant to 5 U.S.C. 553(b)B, there is good cause to issue this 
rule without prior public notice or opportunity for public comment 
because it would be impracticable and unnecessary. The Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (Section 
701(b)) requires agencies, effective 2017, to make annual adjustments 
for inflation to CMPs notwithstanding section 553 of title 5, United 
States Code. Additionally, the methodology used, effective 2017, for 
adjusting CMPs for inflation is established in statute, with no 
discretion provided to agencies regarding the substance of the 
adjustments for inflation to CMPs. The Department of Defense is charged 
only with performing ministerial computations to determine the dollar 
amount of adjustments for inflation to CMPs.
    Further, there are no significant costs associated with the 
regulatory revisions that would impose any mandates on the Department 
of Defense, Federal, State or local governments, or the private sector. 
Accordingly, prior public notice and an opportunity for public comment 
are not required for this rule. The benefit of this rule is the 
Department of Defense anticipates that civil monetary penalty 
collections may increase in the future due to new penalty authorities 
and other changes in this rule. However, it is difficult to accurately 
predict the extent of any increase, if any, due to a variety of 
factors, such as budget and staff resources, the number and quality of 
civil penalty referrals or leads, and the length of time needed to 
investigate and resolve a case.

[[Page 3078]]

Regulatory Procedures

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

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

Executive Order 13771, ``Reducing Regulation and Controlling Regulatory 
Costs''

    Executive Order 13771 requires that for every significant 
regulation promulgated, an agency must identify two for elimination and 
offset its costs. This rule is exempt from these requirements because 
it has been deemed not significant by the Office of Management and 
Budget.

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

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 
U.S.C. 1532) requires agencies to assess anticipated costs and benefits 
before issuing any rule the mandates of which require spending in any 
year of $100 million in 1995 dollars, updated annually for inflation. 
In 2016, that threshold is approximately $146 million. This rule will 
not mandate any requirements for State, local, or tribal governments, 
nor will it affect private sector costs.

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

    Because notice of proposed rulemaking and opportunity for comment 
are not required pursuant to 5 U.S.C. 553, or any other law, the 
analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 
601, et seq.) are inapplicable. Therefore, a regulatory flexibility 
analysis is not required and has not been prepared.

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

    The Department of Defense determined that provisions of the 
Paperwork Reduction Act of 1995, Public Law 104-13, 44 U.S.C. Chapter 
35, and its implementing regulations, 5 CFR part 1320, do not apply to 
this rule because there are no new or revised recordkeeping or 
reporting requirements.

Executive Order 13132, ``Federalism''

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

List of Subjects in 32 CFR Part 269

    Administrative practice and procedure, Penalties.

    Accordingly, 32 CFR part 269 is amended as follows.

PART 269--[AMENDED]

0
1. The authority citation for 32 CFR part 269 continues to read as 
follows:

    Authority:  28 U.S.C. 2461 note.


0
2. Revise Sec.  269.4(d) to read as follows:


Sec.  269.4   Cost of living adjustments of civil monetary penalties.

* * * * *
    (d) Inflation adjustment. Maximum civil monetary penalties within 
the jurisdiction of the Department are adjusted for inflation as 
follows:

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                                                                                      Maximum      New adjusted
             United States Code               Civil monetary penalty description  penalty amount      maximum
                                                                                  as of 01/15/17  penalty amount
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National Defense Authorization Act for FY    Unauthorized Activities Directed at        $126,626        $129,211
 2005, 10 U.S.C. 113, note.                   or Possession of Sunken Military
                                              Craft.
10 U.S.C. 1094(c)(1).......................  Unlawful Provision of Health Care..          11,119          11,346
10 U.S.C. 1102(k)..........................  Wrongful Disclosure--Medical
                                              Records:
                                               First Offense                               6,575           6,709
                                               Subsequent Offense                         43,832          44,726
10 U.S.C. 2674(c)(2).......................  Violation of the Pentagon                     1,811           1,848
                                              Reservation Operation and Parking
                                              of Motor Vehicles Rules and
                                              Regulations.
31 U.S.C. 3802(a)(1).......................  Violation Involving False Claim....          10,957          11,181
31 U.S.C. 3802(a)(2).......................  Violation Involving False Statement          10,957          11,181
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[[Page 3079]]

    Dated: January 18, 2018.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2018-01168 Filed 1-22-18; 8:45 am]
 BILLING CODE 5001-06-P