83 FR 32790 - Adjustment of Civil Monetary Penalty Amounts for 2018

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 83, Issue 136 (July 16, 2018)

Page Range		32790-32794
FR Document		2018-15116

This rule provides for 2018 inflation adjustments of civil monetary penalty amounts required by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

Federal Register, Volume 83 Issue 136 (Monday, July 16, 2018)

[Federal Register Volume 83, Number 136 (Monday, July 16, 2018)]
[Rules and Regulations]
[Pages 32790-32794]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-15116]

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 28, 30, 87, 180, and 3282

[Docket No. FR-6076-F-01]
RIN 2501-AD86

Adjustment of Civil Monetary Penalty Amounts for 2018

AGENCY: Office of the General Counsel, HUD.

ACTION: Final rule.

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SUMMARY: This rule provides for 2018 inflation adjustments of civil
monetary penalty amounts required by the Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015.

DATES: Effective date for 2018 inflation adjustment: August 15, 2018.

FOR FURTHER INFORMATION CONTACT: Dane Narode, Associate General
Counsel, Office of Program Enforcement, Department of Housing and Urban
Development, 1250 Maryland Avenue SW, Suite 200, Washington, DC 20024;
telephone number 202-245-4141 (this is not a toll-free number).
Hearing- or speech-impaired individuals may access this number via TTY
by calling the Federal Information Relay Service, toll-free, at 800-
877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

The Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (the 2015 Act) (Pub. L. 114-74, Sec. 701), which further
amended the Federal Civil Penalties Inflation Adjustment Act of 1990
(Pub. L. 101-410), requires agencies to make annual adjustments to
civil monetary penalty (CMP) amounts for inflation ``notwithstanding
section 553 of title 5, United States Code.'' Section 553 refers to the
Administrative Procedure Act, which might otherwise require a delay for
advance notice and opportunity for public comment on future annual
inflation adjustments. This annual adjustment is for 2018.
The annual adjustment is based on the percent change between the
U.S.

[[Page 32791]]

Department of Labor's Consumer Price Index for All Urban Consumers
(``CPI-U'') for the month of October preceding the date of the
adjustment, and the CPI-U for October of the prior year (28 U.S.C. 2461
note, section (5)(b)(1)). Based on that formula, the cost-of-living
adjustment multiplier for 2018 is 1.02041.\1\ Pursuant to the 2015 Act,
adjustments are rounded to the nearest dollar.\2\
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\1\ Office of Management and Budget, M-18-03, Memorandum for the
Heads of Executive Departments and Agencies, Implementation of
Penalty Inflation Adjustments for 2018, Pursuant to the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
(https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf).
(October 2017 CPI-U (246.663)/October 2016 CPI-U (241.729) =
1.02041.)
\2\ 28 U.S.C. 2461 note.
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II. This Final Rule

This rule makes the required 2018 inflation adjustment. Since HUD
is not applying these adjustments retroactively, the 2018 increases
apply to violations occurring on or after this rule's effective date.
For each component, HUD provides a table showing how the penalties are
being adjusted for 2018 pursuant to the 2015 Act. In the first column
(``Description''), HUD provides a description of the penalty. In the
second column (``Statutory Citation''), HUD provides the United States
Code statutory citation providing for the penalty. In the third column
(``Regulatory Citation''), HUD provides the Code of Federal Regulations
citation under Title 24 for the penalty. In the fourth column
(``Previous Amount''), HUD provides the amount of the penalty pursuant
to the rule implementing the 2017 adjustment (82 FR 24521, May 30,
2017). In the fifth column (``2018 Adjusted Amount''), HUD lists the
penalty after applying the 2018 inflation adjustment.

----------------------------------------------------------------------------------------------------------------
Regulatory
Description Statutory citation (24 Previous amount 2018 Adjusted amount
citation CFR)
----------------------------------------------------------------------------------------------------------------
False Claims & Statements.... Omnibus Budget 28.10 $10,957......... $11,181.
Reconciliation
Act of 1986 (31
U.S.C.
3802(a)(1)).
Advance Disclosure of Funding Department of 30.20 $19,246......... $19,639.
Housing and
Urban
Development Act
(42 U.S.C.
3537a(c)).
Disclosure of Subsidy Department of 30.25 $19,246......... $19,639.
Layering. Housing and
Urban
Development Act
(42 U.S.C.
3545(f)).
FHA Mortgagees and Lenders HUD Reform Act 30.35 Per Violation: Per Violation: $9,819.
Violations. of 1989 (12 $9,623. Per Year: $1,963,870.
U.S.C. 1735f- Per Year:
14(a)(2)). $1,924,589.
Other FHA Participants HUD Reform Act 30.36 Per Violation: Per Violation: $9,819.
Violations. of 1989 (12 $9,623. Per Year: $1,963,870.
U.S.C. 1735f- Per Year:
14(a)(2)). $1,924,589.
Indian Loan Mortgagees Housing 30.40 Per Violation: Per Violation: $9,819.
Violations. Community $9,623. Per Year: $1,963,870.
Development Act Per Year:
of 1992 (12 $1,924,589.
U.S.C. 1715z-
13a(g)(2)).
Multifamily & Section 202 or HUD Reform Act 30.45 $48,114......... $49,096.
811 Owners Violations. of 1989 (12
U.S.C. 1735f-
15(c)(2)).
Ginnie Mae Issuers & HUD Reform Act 30.50 Per Violation: Per Violation: $9,819.
Custodians Violations. of 1989 (12 $9,623. Per Year: $1,963,870.
U.S.C. Per Year:
1723i(b)). $1,924,589.
Title I Broker & Dealers HUD Reform Act 30.60 Per Violation: Per Violation: $9,819.
Violations. of 1989 (12 $9,623. Per Year: $1,963,870.
U.S.C. 1703). Per Year:
$1,924,589.
Lead Disclosure Violation.... Title X-- 30.65 $17,047......... $17,395.
Residential
Lead-Based
Paint Hazard
Reduction Act
of 1992 (42
U.S.C.
4852d(b)(1)).
Section 8 Owners Violations.. Multifamily 30.68 $37,396......... $38,159.
Assisted
Housing Reform
and
Affordability
Act of 1997 (42
U.S.C. 1437z-
1(b)(2)).
Lobbying Violation........... The Lobbying 87.400 Min: $19,246.... Min: $19,639.
Disclosure Act Max: $192,459... Max: $196,387.
of 1995 (31
U.S.C. 1352).
Fair Housing Act Civil Fair Housing 180.671(a) No Priors: No Priors: $20,521.
Penalties. Amendments Act $20,111. One Prior: $51,302.
of 1988 (42 One Prior: Two or More Priors: $102,606.
U.S.C. $50,276.
3612(g)(3)). Two or More
Priors:
$100,554.
Manufactured Housing Housing 3282.10 Per Violation: Per Violation: $2,852.
Regulations Violation. Community $2,795. Per Year: $3,565,045.
Development Act Per Year:
of 1974 (42 $3,493,738.
U.S.C. 5410).
----------------------------------------------------------------------------------------------------------------

II. Justification for Final Rulemaking for the 2018 Adjustments

HUD generally publishes regulations for public comment before
issuing a rule for effect, in accordance with its own regulations on
rulemaking in 24 CFR part 10. However, part 10 provides for exceptions
to the general rule if the agency finds good cause to omit advanced
notice and public participation. The good cause requirement is
satisfied when prior public procedure is ``impractical, unnecessary, or
contrary to the public interest'' (see 24 CFR 10.1). As discussed, this
rule makes the required 2018 inflation adjustment, which HUD does not
have discretion to change. Moreover, the 2015 Act specifies that a
delay in the effective date under the Administrative Procedure Act is
not required for annual adjustments under the 2015 Act. HUD has
determined,

[[Page 32792]]

therefore, that it is unnecessary to delay the effectiveness of the
2018 inflation adjustments to solicit prior public comments.
Section 7(o) of the Department of Housing and Urban Development Act
(42 U.S.C. 3535(o)) requires that any HUD regulation implementing any
provision of the Department of Housing and Urban Development Reform Act
of 1989 that authorizes the imposition of a civil money penalty may not
become effective until after the expiration of a public comment period
of not less than 60 days. This rule does not authorize the imposition
of a civil money penalty--rather, it makes a standard inflation
adjustment to penalties that were previously authorized. As noted
above, the 2018 inflation adjustments are made in accordance with a
statutorily prescribed formula that does not provide for agency
discretion. Accordingly, a delay in the effectiveness of the 2018
inflation adjustments in order to provide the public with an
opportunity to comment is unnecessary because the 2015 Act exempts the
adjustments from the need for delay, the rule does not authorize the
imposition of a civil money penalty, and, in any event, HUD would not
have the discretion to make changes as a result of any comments.

IV. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

Under Executive Order 12866 (Regulatory Planning and Review), a
determination must be made whether a regulatory action is significant
and, therefore, subject to review by the Office of Management and
Budget (OMB) in accordance with the requirements of the order.
Executive Order 13563 (Improving Regulations and Regulatory Review)
directs executive agencies to analyze regulations that are ``outmoded,
ineffective, insufficient, or excessively burdensome, and to modify,
streamline, expand, or repeal them in accordance with what has been
learned. Executive Order 13563 also directs that, where relevant,
feasible, and consistent with regulatory objectives, and to the extent
permitted by law, agencies are to identify and consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public. Executive Order 13771 (Reducing Regulation and
Controlling Regulatory Costs) requires that for every new regulation
issued, at least two prior regulations be identified for removal, and
that the cost of planned regulations be prudently managed and
controlled through a budgeting process. As discussed above in this
preamble, this final rule adjusts existing civil monetary penalties for
inflation by a statutorily required amount.
As a result of this review, OMB determined that this rule was not
significant under Executive Order 12866 and Executive Order 13563.
Moreover, as this rule is not a significant regulatory action under
Executive Order 12866, it is not considered an Executive Order 13771
regulatory action.

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Because HUD has determined that good cause exists to issue this rule
without prior public comment, this rule is not subject to the
requirement to publish an initial or final regulatory flexibility
analysis under the RFA as part of such action.

Unfunded Mandates Reform

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) \3\
requires that an agency prepare a budgetary impact statement before
promulgating a rule that includes a Federal mandate that may 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. If a budgetary impact statement is required, section 205 of UMRA
also requires an agency to identity and consider a reasonable number of
regulatory alternatives before promulgating a rule.\4\ However, the
UMRA applies only to rules for which an agency publishes a general
notice of proposed rulemaking. As discussed above, HUD has determined,
for good cause, that prior notice and public comment is not required on
this rule and, therefore, the UMRA does not apply to this final rule.
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\3\ 2 U.S.C. 1532.
\4\ 2 U.S.C. 1534.
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Executive Order 13132, Federalism

Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on State and local
governments and is not required by statute, or the rule preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. This rule will not have federalism
implications and would not impose substantial direct compliance costs
on State and local governments or preempt State law within the meaning
of the Executive order.

Environmental Review

This interim final rule does not direct, provide for assistance or
loan and mortgage insurance for, or otherwise govern, or regulate, real
property acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this
final rule is categorically excluded from environmental review under
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

List of Subjects

24 CFR Part 28

Administrative practice and procedure, Claims, Fraud, Penalties.

24 CFR Part 30

Administrative practice and procedure, Grant programs-housing and
community development, Loan programs-housing and community development,
Mortgage insurance, Penalties.

24 CFR Part 87

Government contracts, Grant programs, Loan programs, Lobbying,
Penalties, Reporting and recordkeeping requirements.

24 CFR Part 180

Administrative practice and procedure, Aged, Civil rights, Fair
housing, Individuals with disabilities, Investigations, Mortgages,
Penalties, Reporting and recordkeeping requirements.

24 CFR Part 3282

Administrative practice and procedure, Consumer protection,
Intergovernmental relations, Manufactured homes, Reporting and
recordkeeping requirements.

Accordingly, for the reasons described in the preamble, HUD amends
24 CFR parts 28, 30, 87, 180, and 3282 to read as follows:

PART 28--IMPLEMENTATION OF THE PROGRAM FRAUD CIVIL REMEDIES ACT OF
1986

0
1. The authority citation for part 28 continues to read as follows:

[[Page 32793]]

Authority: 28 U.S.C. 2461 note; 31 U.S.C. 3801-3812; 42 U.S.C.
3535(d).

0
2. In Sec. 28.10, revise paragraphs (a)(1) introductory text and
(b)(1) introductory text to read as follows:

Sec. 28.10 Basis for civil penalties and assessments.

(a) Claims. (1) A civil penalty of not more than $11,181 may be
imposed upon any person who makes, presents, or submits, or causes to
be made, presented, or submitted, a claim that the person knows or has
reason to know:
* * * * *
(b) Statements. (1) A civil penalty of not more than $11,181 may be
imposed upon any person who makes, presents, or submits, or causes to
be made, presented, or submitted, a written statement that:
* * * * *

PART 30--CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT

0
3. The authority citation for part 30 continues to read as follows:

Authority: 12 U.S.C. 1701q-1, 1703, 1723i, 1735f-14, and 1735f-
15; 15 U.S.C. 1717a; 28 U.S.C. 1 note and 2461 note; 42 U.S.C.
1437z-1 and 3535(d).

0
4. In Sec. 30.20, revise paragraph (b) to read as follows:

Sec. 30.20 Ethical violations by HUD employees.

* * * * *
(b) Maximum penalty. The maximum penalty is $19,639 for each
violation.

0
5. In Sec. 30.25, revise paragraph (b) to read as follows:

Sec. 30.25 Violations by applicants for assistance.

* * * * *
(b) Maximum penalty. The maximum penalty is $19,639 for each
violation.

0
6. In Sec. 30.35, revise the first sentence in paragraph (c)(1) to
read as follows:

Sec. 30.35 Mortgagees and lenders.

* * * * *
(c)(1) * * * The maximum penalty is $9,819 for each violation, up
to a limit of $1,963,870 for all violations committed during any one-
year period. * * *
* * * * *

0
7. In Sec. 30.36, revise the first sentence in paragraph (c) to read
as follows:

Sec. 30.36 Other participants in FHA programs.

* * * * *
(c) * * * The maximum penalty is $9,819 for each violation, up to a
limit of $1,963,870 for all violations committed during any one-year
period. * * *

0
8. In Sec. 30.40, revise the first sentence in paragraph (c) to read
as follows:

Sec. 30.40 Loan guarantees for Indian housing.

* * * * *
(c) * * * The maximum penalty is $9,819 for each violation, up to a
limit of $1,963,870 for all violations committed during any one-year
period. * * *

0
9. In Sec. 30.45, revise paragraph (g) to read as follows:

Sec. 30.45 Multifamily and section 202 or 811 mortgagors.

* * * * *
(g) Maximum penalty. The maximum penalty for each violation under
paragraphs (c) and (f) of this section is $49,096.
* * * * *

0
10. In Sec. 30.50, revise the first sentence in paragraph (c) to read
as follows:

Sec. 30.50 GNMA issuers and custodians.

* * * * *
(c) * * * The maximum penalty is $9,819 for each violation, up to a
limit of $1,963,870 during any one-year period. * * *

0
11. In Sec. 30.60, revise paragraph (c) to read as follows:

Sec. 30.60 Dealers or sponsored third-party originators.

* * * * *
(c) Amount of penalty. The maximum penalty is $9,819 for each
violation, up to a limit for any particular person of $1,963,870 during
any one-year period.

0
12. In Sec. 30.65, revise paragraph (b) to read as follows:

Sec. 30.65 Failure to disclose lead-based paint hazards.

* * * * *
(b) Amount of penalty. The maximum penalty is $17,395 for each
violation.

0
13. In Sec. 30.68, revise paragraph (c) to read as follows:

Sec. 30.68 Section 8 owners.

* * * * *
(c) Maximum penalty. The maximum penalty for each violation under
this section is $38,159.
* * * * *

PART 87--NEW RESTRICTIONS ON LOBBYING

0
14. The authority citation for part 87 continues to read as follows:

Authority: 28 U.S.C. 1 note; 31 U.S.C. 1352; 42 U.S.C. 3535(d).

0
15. In Sec. 87.400, revise paragraphs (a), (b), and (e) to read as
follows:

Sec. 87.400 Penalties.

(a) Any person who makes an expenditure prohibited herein shall be
subject to a civil penalty of not less than $19,639 and not more than
$196,387 for each such expenditure.
(b) Any person who fails to file or amend the disclosure form (see
appendix B) to be filed or amended if required herein, shall be subject
to a civil penalty of not less than $19,639 and not more than $196,387
for each such failure.
* * * * *
(e) First offenders under paragraph (a) or (b) of this section
shall be subject to a civil penalty of $19,639, absent aggravating
circumstances. Second and subsequent offenses by persons shall be
subject to an appropriate civil penalty between $19,639 and $196,387 as
determined by the agency head or his or her designee.
* * * * *

PART 180--CONSOLIDATED HUD HEARING PROCEDURES FOR CIVIL RIGHTS
MATTERS

0
16. The authority citation for part 180 continues to read as follows:

Authority: 28 U.S.C. 1 note; 29 U.S.C. 794; 42 U.S.C. 2000d-1,
3535(d), 3601-3619, 5301-5320, and 6103.

0
17. In Sec. 180.671, revise paragraphs (a)(1) through (3) to read as
follows:

Sec. 180.671 Assessing civil penalties for Fair Housing Act cases.

(a) * * *
(1) $20,521, if the respondent has not been adjudged in any
administrative hearing or civil action permitted under the Fair Housing
Act or any state or local fair housing law, or in any licensing or
regulatory proceeding conducted by a federal, state, or local
governmental agency, to have committed any prior discriminatory housing
practice.
(2) $51,302, if the respondent has been adjudged in any
administrative hearing or civil action permitted under the Fair Housing
Act, or under any state or local fair housing law, or in any licensing
or regulatory proceeding conducted by a federal, state, or local
government agency, to have committed one other discriminatory housing
practice and the adjudication was made during the 5-year period
preceding the date of filing of the charge.
(3) $102,606, if the respondent has been adjudged in any
administrative hearings or civil actions permitted under the Fair
Housing Act, or under

[[Page 32794]]

any state or local fair housing law, or in any licensing or regulatory
proceeding conducted by a federal, state, or local government agency,
to have committed two or more discriminatory housing practices and the
adjudications were made during the 7-year period preceding the date of
filing of the charge.
* * * * *

PART 3282--MANUFACTURED HOME PROCEDURAL AND ENFORCEMENT REGULATIONS

0
18. The authority citation for part 3282 continues to read as follows:

Authority: 28 U.S.C. 1 note; 28 U.S.C. 2461 note; 42 U.S.C.
3535(d) and 5424.

0
19. Revise Sec. 3282.10 to read as follows:

Sec. 3282.10 Civil and criminal penalties.

Failure to comply with these regulations may subject the party in
question to the civil and criminal penalties provided for in section
611 of the Act, 42 U.S.C. 5410. The maximum amount of penalties imposed
under section 611 of the Act shall be $2,852 for each violation, up to
a maximum of $3,565,045 for any related series of violations occurring
within one year from the date of the first violation.

Dated: July 8, 2018.
J. Paul Compton, Jr.,
General Counsel.
[FR Doc. 2018-15116 Filed 7-13-18; 8:45 am]
BILLING CODE 4210-67-P

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective date for 2018 inflation adjustment: August 15, 2018.
Contact		Dane Narode, Associate General Counsel, Office of Program Enforcement, Department of Housing and Urban Development, 1250 Maryland Avenue SW, Suite 200, Washington, DC 20024; telephone number 202-245-4141 (this is not a toll-free number). Hearing- or speech-impaired individuals may access this number via TTY by calling the Federal Information Relay Service, toll-free, at 800- 877-8339.
FR Citation		83 FR 32790
RIN Number		2501-AD86
CFR Citation		24 CFR 180 24 CFR 28 24 CFR 30 24 CFR 3282 24 CFR 87
CFR Associated		Aged; Civil Rights; Fair Housing; Individuals with Disabilities; Investigations; Mortgages; Administrative Practice and Procedure; Claims; Fraud; Penalties; Consumer Protection; Intergovernmental Relations; Manufactured Homes; Grant Programs-Housing and Community Development; Loan Programs-Housing and Community Development; Mortgage Insurance; Government Contracts; Grant Programs; Loan Programs; Lobbying and Reporting and Recordkeeping Requirements