83_FR_7396 83 FR 7361 - Civil Monetary Penalties Inflation Adjustments

83 FR 7361 - Civil Monetary Penalties Inflation Adjustments

SMALL BUSINESS ADMINISTRATION

Federal Register Volume 83, Issue 35 (February 21, 2018)

Page Range7361-7363
FR Document2018-03490

The Small Business Administration (SBA) is amending its regulations to adjust for inflation the amount of certain civil monetary penalties that are within the jurisdiction of the agency. These adjustments comply with the requirement in the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, to make annual adjustments to the penalties.

Federal Register, Volume 83 Issue 35 (Wednesday, February 21, 2018)
[Federal Register Volume 83, Number 35 (Wednesday, February 21, 2018)]
[Rules and Regulations]
[Pages 7361-7363]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-03490]


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SMALL BUSINESS ADMINISTRATION

13 CFR Parts 107, 120, 142, and 146

RIN 3245-AG96


Civil Monetary Penalties Inflation Adjustments

AGENCY: U.S. Small Business Administration.

ACTION: Final rule.

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SUMMARY: The Small Business Administration (SBA) is amending its 
regulations to adjust for inflation the amount of certain civil 
monetary penalties that are within the jurisdiction of the agency. 
These adjustments comply with the requirement in the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended by the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015, to 
make annual adjustments to the penalties.

DATES: Effective Date: This rule is effective February 21, 2018.

FOR FURTHER INFORMATION CONTACT: Arlene Embrey, 202-205-6976, or at 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On November 2, 2015, the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 (the 2015 Inflation Adjustment 
Improvements Act), Public Law 114-74, 129 Stat. 584, was enacted. This 
act amended the Federal Civil Penalties Inflation

[[Page 7362]]

Adjustment Act of 1990, Public Law 101-410, 104 Stat 890 (the 1990 
Inflation Adjustment Act), to improve the effectiveness of civil 
monetary penalties and to maintain their deterrent effect. The 2015 
Inflation Adjustment Improvements Act required agencies to issue an 
interim final rule by August 1, 2016, to adjust the level of civil 
monetary penalties with an initial ``catch-up'' adjustment, and to 
annually adjust these monetary penalties for inflation by January 15 of 
each subsequent year. The act authorizes agencies to implement the 
annual adjustments without regard to the requirements for public notice 
and comment or delayed effective date under the Administrative 
Procedures Act (the APA), 5 U.S.C. 553(b)(3)(B) and (d)(3), 
respectively.
    In addition, based on the definition of a ``civil monetary 
penalty'' in the 1990 Inflation Adjustment Act, agencies are to make 
adjustments only to the civil penalties that (i) are for a specific 
monetary amount as provided by Federal law or have a maximum amount 
provided for by Federal law; (ii) are assessed or enforced by an 
agency; and (iii) are enforced or assessed in an administrative 
proceeding or a civil action in the Federal courts. Therefore, 
penalties that are stated as a percentage of an indeterminate amount or 
as a function of a violation (penalties that encompass actual damages 
incurred) are not to be adjusted.
    On May 19, 2016, SBA published an interim final rule with its 
initial adjustments to the civil monetary penalties, including an 
initial ``catch-up'' adjustment. 81 FR 31489. These adjusted penalties 
became effective on August 1, 2016. SBA published its first annual 
adjustments to the monetary penalties in the Federal Register on 
February 9, 2017 (82 FR 9967), with an immediate effective date. This 
rule will establish the adjusted penalty amounts for 2018.
    According to the 2015 Inflation Adjustment Improvements Act and the 
Office of Management and Budget implementing guidance in M-18-03, 
Implementation of Penalty Inflation Adjustments for 2018, Pursuant to 
the Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015, (December 15, 2017), the formula for calculating the annual 
adjustments is based on the Consumer Price Index for all Urban 
Consumers (CPI-U) for the month of October preceding the adjustment, 
and specifically on the change between the October CPI-U preceding the 
date of adjustment and the prior year's CPI-U. Based on this 
methodology, the 2018 civil monetary penalty adjustment is 1.02041 
(October 2017 CPI-U (246.663)/October 2016 CPI-U (241.729) = 1.02041). 
The annual adjustments identified in this rule were obtained by 
applying this multiplier to the most recently adjusted penalty amounts 
that were published on February 9, 2017 (82 FR 9967).

II. Civil Money Penalties Adjusted by This Rule

    This rule makes adjustments to civil monetary penalties authorized 
by the Small Business Act, the Small Business Investment Act of 1958 
(SBIAct), the Program Fraud Civil Remedies Act, and the Byrd Amendment 
to the Federal Regulation of Lobbying Act. These penalties and the 
implementing regulations are discussed below.

1. 13 CFR 107.665--Civil Penalties

    SBA licenses, regulates and provides financial assistance to 
financial entities called small business investment companies (SBICs). 
Pursuant to section 315 of the SBIAct, 15 U.S.C. 687g, SBA may impose a 
penalty on any SBIC for each day that it fails to comply with SBA's 
regulations or directives governing the filing of regular or special 
reports. The penalty for non-compliance is incorporated in Sec.  
107.665 of the SBIC program regulations.
    This rule amends Sec.  107.665 to adjust the current civil penalty 
from $254 to $259 for each day an SBIC fails to file a required report. 
The current civil penalty amount of $254 was multiplied by the 
multiplier of 1.02041 to reach a product of $259, rounded to the 
nearest dollar.

2. 13 CFR 120.465--Civil Penalty for Late Submission of Required 
Reports

    According to the regulations at Sec.  120.465, any SBA Supervised 
Lender, as defined in 13 CFR 120.10, that violates a regulation or 
written directive issued by the SBA Administrator regarding the filing 
of any regular or special report is subject to the civil penalty amount 
stated in Sec.  120.465(b) for each day the company fails to file the 
report, unless the SBA Supervised Lender can show that there is 
reasonable cause for its failure to file. This penalty is authorized by 
section 23(j)(1) of the Small Business Act, 15 U.S.C. 650(j)(1).
    This rule amends Sec.  120.465 to adjust the current civil penalty 
to $6,460 per day for failure to file. The current civil penalty of 
$6,331 was multiplied by the multiplier of 1.02041 to reach a product 
of $6,460, rounded to the nearest dollar.

3. 13 CFR 142.1--Overview of Regulations

    SBA has promulgated regulations at 13 CFR part 142 to implement the 
civil penalties authorized by the Program Fraud Civil Remedies Act of 
1986 (PFCRA), 31 U.S.C. 3801-3812. The current electronic Code of 
Federal Regulations (eCFR) at Sec.  142.1(b) states that a person who 
submits, or causes to be submitted, a false claim or a false statement 
to SBA is subject to a civil penalty of not more than $10,781, for each 
statement or claim. However, this amount reflected in the eCFR is 
incorrect. Rather, the correct adjusted amount for 2017, as published 
in the February 9, 2017 rule, was $10,957 (the product of $10,781 and 
the multiplier of 1.10636). Therefore, this final rule makes the 
required adjustment for 2018 based on the correct published amount of 
$10,957. Accordingly, the rule amends Sec.  142.1(b) to adjust the 
current civil penalty to $11,181 per statement or claim. The adjusted 
civil penalty amount was calculated by multiplying the civil penalty 
amount of $10,957 by the multiplier of 1.02041 to reach a product of 
$11,181, rounded to the nearest dollar.

4. 13 CFR 146.400--Penalties

    SBA's regulations at 13 CFR part 146 govern lobbying activities by 
recipients of federal financial assistance. These regulations implement 
the authority in 31 U.S.C. 1352, which was established in 1989, and 
impose penalties on any recipient that fails to comply with certain 
requirements in the part. Specifically, under Sec.  146.400(a) and (b), 
penalties may be imposed on those who make prohibited expenditures or 
fail to file the required disclosure forms or to amend such forms, if 
necessary.
    This rule amends Sec.  146.400(a) and (b), to adjust the current 
civil penalty amounts to ``not less than $19,639 and not more than 
$196,387.'' The current civil penalty amounts of $19,246 and $192,459 
were multiplied by the multiplier of 1.02041 to reach a product of 
$19,639 and $196,387, respectively, rounded to the nearest dollar.
    This rule also amends Sec.  146.400(e) to adjust the civil penalty 
that may be imposed for a first time violation of Sec.  146.400(a) and 
(b) to a maximum of $19,639 and to adjust the civil penalty that may be 
imposed for second and subsequent offenses to ``not less than $19,639 
and not more than $196,387.'' The current civil penalty amounts of 
$19,246 and $192,459 were multiplied by the multiplier of 1.02041 to 
reach a product of $19,639 and $196,387,

[[Page 7363]]

respectively, rounded to the nearest dollar.

III. Justification for Final Rule

    The Inflation Adjustment Act provides that agencies shall annually 
adjust civil monetary penalties for inflation notwithstanding Section 
553 of the APA. Additionally, the Inflation Adjustment Act provides a 
nondiscretionary cost-of-living formula for annual adjustment of the 
civil monetary penalties. For these reasons, the requirements in 
sections 553(b), (c), and (d) of the APA, relating to notice and 
comment and requiring that a rule be effective 30 days after 
publication in the Federal Register, are inapplicable.

IV. Justification for Immediate Effective Date

    Section 553(d) requires agencies to publish their rules at least 30 
days before their effective dates, except if the agency finds for good 
cause that the delay is impracticable, unnecessary, or contrary to the 
public interest. By expressly exempting this rule from section 553, the 
2015 Inflation Adjustment Improvements Act has provided SBA with the 
good cause justification for this rule to become effective on the date 
it is published in the Federal Register.

Compliance With Executive Orders 12866, 12988, 13132, 13771, and the 
Paperwork Reduction Act (44 U.S.C. Ch. 35) and the Regulatory 
Flexibility Act (5 U.S.C. 601-612)

Executive Order 12866

    The Office of Management and Budget has determined that this final 
rule is not a significant regulatory action under Executive Order 
12866. This is also not a major rule under the Congressional Review 
Act, 5 U.S.C. 800.

Executive Order 12988

    This action meets applicable standards set forth in Sections 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. The action does not 
have retroactive or preemptive effect.

Executive Order 13132

    For the purpose of Executive Order 13132, SBA has determined that 
the rule will not have 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. Therefore, this final rule has no federalism implications 
warranting preparation of a federalism assessment.

Executive Order 13771

    This rule is not an Executive Order 13771 regulatory action because 
this rule is not significant under Executive Order 12866.

Paperwork Reduction Act

    SBA has determined that this rule does not impose additional 
reporting or recordkeeping requirements.

Regulatory Flexibility Act (RFA)

    The RFA requires agencies to consider the effect of their 
regulatory actions on small entities, including small non-profit 
businesses, and small local governments. Pursuant to the RFA, when an 
agency issues a rule the agency must prepare an analysis that describes 
whether the impact of the rule will have a significant economic impact 
on a substantial number of such small entities. However, the RFA 
requires such analysis only where notice and comment rulemaking is 
required. As stated above, SBA has express statutory authority to issue 
this rule without regard to the notice and comment requirement of the 
Administrative Procedure Act. Since notice and comment is not required 
before this rule is issued, SBA is not required to prepare a regulatory 
analysis.

List of Subjects

13 CFR Part 107

    Investment companies, Loan programs--business, Reporting and 
recordkeeping requirements, Small businesses.

13 CFR Part 120

    Loan programs--business, Reporting and recordkeeping requirements, 
Small businesses.

13 CFR Part 142

    Administrative practice and procedure, Claims, Fraud, Penalties.

13 CFR Part 146

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

    For the reasons set forth in the preamble, SBA amends 13 CFR parts 
107, 120, 142, and 146 as follows:

PART 107--SMALL BUSINESS INVESTMENT COMPANIES

0
1. The authority citation for part 107 continues to read as follows:

    Authority: 15 U.S.C. 681, 683, 687(c), 687b, 687d, 687g, 687m.


Sec.  107.665   [Amended]

0
2. In Sec.  107.665, remove ``$254'' and add in its place ``$259''.

PART 120--BUSINESS LOANS

0
3. The authority citation for part 120 continues to read as follows:

    Authority: 15 U.S.C. 634(b)(6), (b)(7), (b)(14), (h) and note, 
636(a), (h) and (m), 650, 687(f), 696(3) and 697(a) and (e); Pub. L. 
111-5, 123 Stat. 115; Pub. L. 111-240, 124 Stat. 2504; Pub. L. 114-
38, 129 Stat. 437.


Sec.  120.465   [Amended]

0
4. In Sec.  120.465, amend paragraph (b) by removing ``$6,331'' and 
adding in its place ``$6,460''.

PART 142--PROGRAM FRAUD CIVIL REMEDIES ACT REGULATIONS

0
5. The authority citation for part 142 continues to read as follows:

    Authority: 15 U.S.C. 634(b); 31 U.S.C. 3803(g)(2).


Sec.  142.1   [Amended]

0
6. In Sec.  142.1, amend paragraph (b) by removing ``$10,781'' and 
adding in its place ``$11,181''.

PART 146--NEW RESTRICTIONS ON LOBBYING

0
7. The authority citation for part 146 continues to read as follows:

    Authority: Section 319, Pub. L. 101-121 (31 U.S.C. 1352); 15 
U.S.C. 634(b)(6).


Sec.  146.400   [Amended]

0
8. In Sec.  146.400, amend paragraphs (a), (b), and (e) by removing 
``$19,246'' wherever it appears and adding in its place ``$19,639'' and 
by removing ``$192,459'' and adding in its place ``$196,387''.

    Dated: February 12, 2018.
Linda E. McMahon,
Administrator.
[FR Doc. 2018-03490 Filed 2-20-18; 8:45 am]
BILLING CODE 8025-01-P



                                                              Federal Register / Vol. 83, No. 35 / Wednesday, February 21, 2018 / Rules and Regulations                                              7361

                                               For the reasons set forth in the                       ■ 3. Add § 986.178 to subpart B to read               reports are due by the first business day
                                             preamble, 7 CFR part 986 is amended as                   as follows:                                           following the tenth day of the month.
                                             follows:                                                                                                       The report shall be submitted to the
                                                                                                      § 986.178    Other reports.                           Council on APC Form 5 and contain the
                                             PART 986—PECANS GROWN IN THE                               (a) Report of shipments and inventory               following information:
                                             STATES OF ALABAMA, ARKANSAS,                             on hand. Handlers shall submit to the                   (1) The name and address of the
                                             ARIZONA, CALIFORNIA, FLORIDA,                            Council, by the tenth day of the month                handler;
                                             GEORGIA, KANSAS, LOUISIANA,                              following the month of activity, a report               (2) The month covered by the report;
                                             MISSOURI, MISSISSIPPI, NORTH                             of all shipments, inventory, and                        (3) The date of inshell shipment(s);
                                             CAROLINA, NEW MEXICO,                                    committed inventory for pecans. Should                  (4) The weight of pecans exported for
                                             OKLAHOMA, SOUTH CAROLINA, AND                            the tenth day of the month fall on a                  shelling;
                                             TEXAS                                                    weekend or holiday, reports are due by                  (5) The date shelled pecans returned
                                                                                                      the first business day following the                  to the United States after shelling;
                                             ■ 1. The authority citation for 7 CFR                    tenth day of the month. The report shall                (6) The weight of shelled pecans
                                             part 986 continues to read as follows:                   be submitted to the Council on APC                    returned to the United States after
                                                 Authority: 7 U.S.C. 601–674.                         Form 2 and contain the following                      shelling; and
                                                                                                      information:                                            (7) The total weight of inshell pecans
                                             ■ 2. Add § 986.177 to subpart B to read
                                                                                                        (1) The name and address of the                     exported to Mexico for shelling, and
                                             as follows:
                                                                                                      handler;                                              shelled pecans returned from Mexico,
                                             § 986.177 Reports of pecans received by                    (2) The month covered by the report;                year to date.
                                             handlers.                                                  (3) The weight of all shipments of                    Dated: February 15, 2018.
                                               (a) Summary report U.S. pecans                         pecans, inshell and shelled, and inter-
                                                                                                                                                            Bruce Summers,
                                             received for your own account. Handlers                  handler transfers shipped and received
                                                                                                                                                            Acting Administrator, Agricultural Marketing
                                             shall submit to the Council, by the tenth                during the reporting period;
                                                                                                                                                            Service.
                                             day of the month, a summary report of                      (4) The weight of all shipments of
                                                                                                                                                            [FR Doc. 2018–03500 Filed 2–20–18; 8:45 am]
                                             inshell domestic pecans received during                  pecans, inshell and shelled, and inter-
                                                                                                      handler transfers shipped and received                BILLING CODE 3410–02–P
                                             the preceding month. Should the tenth
                                             day of the month fall on a weekend or                    in the previous month and year to date;
                                             holiday, reports are due by the first                      (5) Total inventory held by handler;
                                             business day following the tenth day of                    (6) All the inventory committed                     SMALL BUSINESS ADMINISTRATION
                                             the month. The report shall be                           (pecans not shipped, but sold or
                                                                                                      otherwise obligated) whether for                      13 CFR Parts 107, 120, 142, and 146
                                             submitted to the Council on APC Form
                                             1 and contain the following information:                 domestic sale or export; and,                         RIN 3245–AG96
                                               (1) The name and address of the                          (7) The weight of all shelled or inshell
                                             handler;                                                 pecans under contract for purchase from               Civil Monetary Penalties Inflation
                                               (2) The month covered by the report;                   other handlers.                                       Adjustments
                                               (3) The total weight and type of                         (b) Exports by country of destination.
                                                                                                      Handlers shall submit to the Council, by              AGENCY:  U.S. Small Business
                                             inshell pecans received, and the weight                                                                        Administration.
                                             by variety for improved pecans received                  the tenth day of the month following the
                                                                                                      month of shipment, a report of exports.               ACTION: Final rule.
                                             during the reporting period;
                                               (4) The total weight and type of                       Should the tenth day of the month fall                SUMMARY:   The Small Business
                                             inshell pecans received, and the weight                  on a weekend or holiday, reports are                  Administration (SBA) is amending its
                                             by variety for improved pecans received                  due by the first business day following               regulations to adjust for inflation the
                                             year to date; and,                                       the tenth day of the month. The report                amount of certain civil monetary
                                               (5) Assessments due on pecans                          shall be reported to the Council on APC               penalties that are within the jurisdiction
                                             received during the reporting period to                  Form 3 and contain the following                      of the agency. These adjustments
                                             be paid by the due date of the report.                   information:                                          comply with the requirement in the
                                               (b) Pecans purchased outside the                         (1) The name and address of the
                                                                                                                                                            Federal Civil Penalties Inflation
                                             United States. Handlers shall submit to                  handler;
                                                                                                                                                            Adjustment Act of 1990, as amended by
                                             the Council, by the tenth day of the                       (2) The month covered by the report;
                                                                                                                                                            the Federal Civil Penalties Inflation
                                             month, a summary report of shelled and                     (3) The total weight of pecans shipped
                                                                                                                                                            Adjustment Act Improvements Act of
                                             inshell pecans imported during the                       for export, whether inshell, shelled, or
                                                                                                                                                            2015, to make annual adjustments to the
                                             preceding month. Should the tenth day                    substandard during the reporting
                                                                                                                                                            penalties.
                                             of the month fall on a weekend or                        period;
                                                                                                        (4) The total weight of pecans shipped              DATES: Effective Date: This rule is
                                             holiday, reports are due by the first
                                             business day following the tenth day of                  for export, whether inshell, shelled, or              effective February 21, 2018.
                                             the month. The report shall be                           substandard during the previous period                FOR FURTHER INFORMATION CONTACT:
                                             submitted to the Council on APC Form                     and year to date; and,                                Arlene Embrey, 202–205–6976, or at
                                             6 and contain the following information:                   (5) The destination(s) of such exports.             arlene.embrey@sba.gov.
                                               (1) The name and address of the                          (c) Inshell pecans exported to Mexico               SUPPLEMENTARY INFORMATION:
                                             handler;                                                 for shelling and returned to the United
                                                                                                      States as shelled meats. Handlers shall               I. Background
                                               (2) The month covered by the report;
                                                                                                      submit to the Council, by the tenth day                 On November 2, 2015, the Federal
daltland on DSKBBV9HB2PROD with RULES




                                               (3) The date the pecans were
                                             imported;                                                of the month following the month of                   Civil Penalties Inflation Adjustment Act
                                               (4) The country of origin; and,                        shipment, a report of all inshell pecans              Improvements Act of 2015 (the 2015
                                               (5) The total weight of shelled and                    exported to Mexico for shelling and                   Inflation Adjustment Improvements
                                             inshell pecans received, and the weight                  returned to the United States as shelled              Act), Public Law 114–74, 129 Stat. 584,
                                             by variety for improved pecans                           pecans. Should the tenth day of the                   was enacted. This act amended the
                                             received.                                                month fall on a weekend or holiday,                   Federal Civil Penalties Inflation


                                        VerDate Sep<11>2014    16:21 Feb 20, 2018   Jkt 244001   PO 00000   Frm 00005   Fmt 4700   Sfmt 4700   E:\FR\FM\21FER1.SGM   21FER1


                                             7362             Federal Register / Vol. 83, No. 35 / Wednesday, February 21, 2018 / Rules and Regulations

                                             Adjustment Act of 1990, Public Law                       penalty adjustment is 1.02041 (October                3. 13 CFR 142.1—Overview of
                                             101–410, 104 Stat 890 (the 1990                          2017 CPI–U (246.663)/October 2016                     Regulations
                                             Inflation Adjustment Act), to improve                    CPI–U (241.729) = 1.02041). The annual
                                             the effectiveness of civil monetary                      adjustments identified in this rule were                SBA has promulgated regulations at
                                             penalties and to maintain their deterrent                                                                      13 CFR part 142 to implement the civil
                                                                                                      obtained by applying this multiplier to
                                             effect. The 2015 Inflation Adjustment                                                                          penalties authorized by the Program
                                                                                                      the most recently adjusted penalty
                                             Improvements Act required agencies to                                                                          Fraud Civil Remedies Act of 1986
                                                                                                      amounts that were published on
                                             issue an interim final rule by August 1,                                                                       (PFCRA), 31 U.S.C. 3801–3812. The
                                                                                                      February 9, 2017 (82 FR 9967).
                                             2016, to adjust the level of civil                                                                             current electronic Code of Federal
                                             monetary penalties with an initial                       II. Civil Money Penalties Adjusted by                 Regulations (eCFR) at § 142.1(b) states
                                             ‘‘catch-up’’ adjustment, and to annually                 This Rule                                             that a person who submits, or causes to
                                             adjust these monetary penalties for                                                                            be submitted, a false claim or a false
                                             inflation by January 15 of each                            This rule makes adjustments to civil                statement to SBA is subject to a civil
                                             subsequent year. The act authorizes                      monetary penalties authorized by the                  penalty of not more than $10,781, for
                                             agencies to implement the annual                         Small Business Act, the Small Business                each statement or claim. However, this
                                             adjustments without regard to the                        Investment Act of 1958 (SBIAct), the                  amount reflected in the eCFR is
                                             requirements for public notice and                       Program Fraud Civil Remedies Act, and                 incorrect. Rather, the correct adjusted
                                             comment or delayed effective date                        the Byrd Amendment to the Federal                     amount for 2017, as published in the
                                             under the Administrative Procedures                      Regulation of Lobbying Act. These                     February 9, 2017 rule, was $10,957 (the
                                             Act (the APA), 5 U.S.C. 553(b)(3)(B) and                 penalties and the implementing                        product of $10,781 and the multiplier of
                                             (d)(3), respectively.                                    regulations are discussed below.                      1.10636). Therefore, this final rule
                                                In addition, based on the definition of                                                                     makes the required adjustment for 2018
                                                                                                      1. 13 CFR 107.665—Civil Penalties
                                             a ‘‘civil monetary penalty’’ in the 1990                                                                       based on the correct published amount
                                             Inflation Adjustment Act, agencies are                      SBA licenses, regulates and provides               of $10,957. Accordingly, the rule
                                             to make adjustments only to the civil                    financial assistance to financial entities            amends § 142.1(b) to adjust the current
                                             penalties that (i) are for a specific                    called small business investment                      civil penalty to $11,181 per statement or
                                             monetary amount as provided by                           companies (SBICs). Pursuant to section                claim. The adjusted civil penalty
                                             Federal law or have a maximum amount                     315 of the SBIAct, 15 U.S.C. 687g, SBA                amount was calculated by multiplying
                                             provided for by Federal law; (ii) are                    may impose a penalty on any SBIC for                  the civil penalty amount of $10,957 by
                                             assessed or enforced by an agency; and                   each day that it fails to comply with                 the multiplier of 1.02041 to reach a
                                             (iii) are enforced or assessed in an                     SBA’s regulations or directives                       product of $11,181, rounded to the
                                             administrative proceeding or a civil                     governing the filing of regular or special            nearest dollar.
                                             action in the Federal courts. Therefore,                 reports. The penalty for non-compliance               4. 13 CFR 146.400—Penalties
                                             penalties that are stated as a percentage                is incorporated in § 107.665 of the SBIC
                                             of an indeterminate amount or as a                       program regulations.                                     SBA’s regulations at 13 CFR part 146
                                             function of a violation (penalties that                                                                        govern lobbying activities by recipients
                                             encompass actual damages incurred) are                      This rule amends § 107.665 to adjust               of federal financial assistance. These
                                             not to be adjusted.                                      the current civil penalty from $254 to                regulations implement the authority in
                                                On May 19, 2016, SBA published an                     $259 for each day an SBIC fails to file               31 U.S.C. 1352, which was established
                                             interim final rule with its initial                      a required report. The current civil                  in 1989, and impose penalties on any
                                             adjustments to the civil monetary                        penalty amount of $254 was multiplied                 recipient that fails to comply with
                                             penalties, including an initial ‘‘catch-                 by the multiplier of 1.02041 to reach a               certain requirements in the part.
                                             up’’ adjustment. 81 FR 31489. These                      product of $259, rounded to the nearest               Specifically, under § 146.400(a) and (b),
                                             adjusted penalties became effective on                   dollar.                                               penalties may be imposed on those who
                                             August 1, 2016. SBA published its first                                                                        make prohibited expenditures or fail to
                                                                                                      2. 13 CFR 120.465—Civil Penalty for
                                             annual adjustments to the monetary                                                                             file the required disclosure forms or to
                                             penalties in the Federal Register on                     Late Submission of Required Reports
                                                                                                                                                            amend such forms, if necessary.
                                             February 9, 2017 (82 FR 9967), with an                      According to the regulations at
                                             immediate effective date. This rule will                                                                          This rule amends § 146.400(a) and (b),
                                                                                                      § 120.465, any SBA Supervised Lender,                 to adjust the current civil penalty
                                             establish the adjusted penalty amounts                   as defined in 13 CFR 120.10, that
                                             for 2018.                                                                                                      amounts to ‘‘not less than $19,639 and
                                                                                                      violates a regulation or written directive            not more than $196,387.’’ The current
                                                According to the 2015 Inflation                       issued by the SBA Administrator
                                             Adjustment Improvements Act and the                                                                            civil penalty amounts of $19,246 and
                                                                                                      regarding the filing of any regular or                $192,459 were multiplied by the
                                             Office of Management and Budget
                                                                                                      special report is subject to the civil                multiplier of 1.02041 to reach a product
                                             implementing guidance in M–18–03,
                                                                                                      penalty amount stated in § 120.465(b)                 of $19,639 and $196,387, respectively,
                                             Implementation of Penalty Inflation
                                                                                                      for each day the company fails to file                rounded to the nearest dollar.
                                             Adjustments for 2018, Pursuant to the
                                             Federal Civil Penalties Inflation                        the report, unless the SBA Supervised                    This rule also amends § 146.400(e) to
                                             Adjustment Act Improvements Act of                       Lender can show that there is                         adjust the civil penalty that may be
                                             2015, (December 15, 2017), the formula                   reasonable cause for its failure to file.             imposed for a first time violation of
                                             for calculating the annual adjustments is                This penalty is authorized by section                 § 146.400(a) and (b) to a maximum of
                                             based on the Consumer Price Index for                    23(j)(1) of the Small Business Act, 15                $19,639 and to adjust the civil penalty
                                             all Urban Consumers (CPI–U) for the                      U.S.C. 650(j)(1).                                     that may be imposed for second and
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                                             month of October preceding the                              This rule amends § 120.465 to adjust               subsequent offenses to ‘‘not less than
                                             adjustment, and specifically on the                      the current civil penalty to $6,460 per               $19,639 and not more than $196,387.’’
                                             change between the October CPI–U                         day for failure to file. The current civil            The current civil penalty amounts of
                                             preceding the date of adjustment and                     penalty of $6,331 was multiplied by the               $19,246 and $192,459 were multiplied
                                             the prior year’s CPI–U. Based on this                    multiplier of 1.02041 to reach a product              by the multiplier of 1.02041 to reach a
                                             methodology, the 2018 civil monetary                     of $6,460, rounded to the nearest dollar.             product of $19,639 and $196,387,


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                                                              Federal Register / Vol. 83, No. 35 / Wednesday, February 21, 2018 / Rules and Regulations                                              7363

                                             respectively, rounded to the nearest                     Executive Order 13771                                 § 107.665     [Amended]
                                             dollar.                                                                                                        ■ 2. In § 107.665, remove ‘‘$254’’ and
                                                                                                        This rule is not an Executive Order
                                             III. Justification for Final Rule                        13771 regulatory action because this                  add in its place ‘‘$259’’.
                                                The Inflation Adjustment Act                          rule is not significant under Executive
                                                                                                                                                            PART 120—BUSINESS LOANS
                                             provides that agencies shall annually                    Order 12866.
                                             adjust civil monetary penalties for                      Paperwork Reduction Act                               ■ 3. The authority citation for part 120
                                             inflation notwithstanding Section 553 of                                                                       continues to read as follows:
                                             the APA. Additionally, the Inflation                       SBA has determined that this rule                      Authority: 15 U.S.C. 634(b)(6), (b)(7),
                                             Adjustment Act provides a                                does not impose additional reporting or               (b)(14), (h) and note, 636(a), (h) and (m), 650,
                                             nondiscretionary cost-of-living formula                  recordkeeping requirements.                           687(f), 696(3) and 697(a) and (e); Pub. L. 111–
                                             for annual adjustment of the civil                                                                             5, 123 Stat. 115; Pub. L. 111–240, 124 Stat.
                                                                                                      Regulatory Flexibility Act (RFA)
                                             monetary penalties. For these reasons,                                                                         2504; Pub. L. 114–38, 129 Stat. 437.
                                             the requirements in sections 553(b), (c),                   The RFA requires agencies to consider
                                             and (d) of the APA, relating to notice                                                                         § 120.465     [Amended]
                                                                                                      the effect of their regulatory actions on
                                             and comment and requiring that a rule                    small entities, including small non-                  ■ 4. In § 120.465, amend paragraph (b)
                                             be effective 30 days after publication in                profit businesses, and small local                    by removing ‘‘$6,331’’ and adding in its
                                             the Federal Register, are inapplicable.                  governments. Pursuant to the RFA,                     place ‘‘$6,460’’.
                                             IV. Justification for Immediate Effective                when an agency issues a rule the agency
                                                                                                      must prepare an analysis that describes               PART 142—PROGRAM FRAUD CIVIL
                                             Date                                                                                                           REMEDIES ACT REGULATIONS
                                                                                                      whether the impact of the rule will have
                                                Section 553(d) requires agencies to                   a significant economic impact on a
                                             publish their rules at least 30 days                                                                           ■ 5. The authority citation for part 142
                                                                                                      substantial number of such small                      continues to read as follows:
                                             before their effective dates, except if the              entities. However, the RFA requires
                                             agency finds for good cause that the                     such analysis only where notice and                     Authority: 15 U.S.C. 634(b); 31 U.S.C.
                                             delay is impracticable, unnecessary, or                  comment rulemaking is required. As                    3803(g)(2).
                                             contrary to the public interest. By                      stated above, SBA has express statutory
                                             expressly exempting this rule from                                                                             § 142.1    [Amended]
                                                                                                      authority to issue this rule without
                                             section 553, the 2015 Inflation                          regard to the notice and comment                      ■ 6. In § 142.1, amend paragraph (b) by
                                             Adjustment Improvements Act has                          requirement of the Administrative                     removing ‘‘$10,781’’ and adding in its
                                             provided SBA with the good cause                         Procedure Act. Since notice and                       place ‘‘$11,181’’.
                                             justification for this rule to become                    comment is not required before this rule
                                             effective on the date it is published in                                                                       PART 146—NEW RESTRICTIONS ON
                                                                                                      is issued, SBA is not required to prepare             LOBBYING
                                             the Federal Register.                                    a regulatory analysis.
                                             Compliance With Executive Orders                         List of Subjects                                      ■ 7. The authority citation for part 146
                                             12866, 12988, 13132, 13771, and the                                                                            continues to read as follows:
                                             Paperwork Reduction Act (44 U.S.C. Ch.                   13 CFR Part 107
                                                                                                                                                              Authority: Section 319, Pub. L. 101–121
                                             35) and the Regulatory Flexibility Act (5                                                                      (31 U.S.C. 1352); 15 U.S.C. 634(b)(6).
                                                                                                        Investment companies, Loan
                                             U.S.C. 601–612)
                                                                                                      programs—business, Reporting and                      § 146.400     [Amended]
                                             Executive Order 12866                                    recordkeeping requirements, Small
                                                The Office of Management and Budget                   businesses.                                           ■  8. In § 146.400, amend paragraphs (a),
                                             has determined that this final rule is not                                                                     (b), and (e) by removing ‘‘$19,246’’
                                                                                                      13 CFR Part 120                                       wherever it appears and adding in its
                                             a significant regulatory action under
                                             Executive Order 12866. This is also not                    Loan programs—business, Reporting                   place ‘‘$19,639’’ and by removing
                                             a major rule under the Congressional                     and recordkeeping requirements, Small                 ‘‘$192,459’’ and adding in its place
                                             Review Act, 5 U.S.C. 800.                                businesses.                                           ‘‘$196,387’’.
                                                                                                                                                              Dated: February 12, 2018.
                                             Executive Order 12988                                    13 CFR Part 142
                                                                                                                                                            Linda E. McMahon,
                                                This action meets applicable                            Administrative practice and                         Administrator.
                                             standards set forth in Sections 3(a) and                 procedure, Claims, Fraud, Penalties.                  [FR Doc. 2018–03490 Filed 2–20–18; 8:45 am]
                                             3(b)(2) of Executive Order 12988, Civil
                                                                                                      13 CFR Part 146                                       BILLING CODE 8025–01–P
                                             Justice Reform, to minimize litigation,
                                             eliminate ambiguity, and reduce                            Government contracts, Grant
                                             burden. The action does not have                         programs, Loan programs, Lobbying,
                                             retroactive or preemptive effect.                                                                              DEPARTMENT OF TRANSPORTATION
                                                                                                      Penalties, Reporting and recordkeeping
                                             Executive Order 13132                                    requirements.                                         Federal Aviation Administration
                                               For the purpose of Executive Order                       For the reasons set forth in the
                                             13132, SBA has determined that the rule                  preamble, SBA amends 13 CFR parts                     14 CFR Part 71
                                             will not have substantial direct effects                 107, 120, 142, and 146 as follows:                    [Docket No. FAA–2017–0856; Airspace
                                             on the States, on the relationship                                                                             Docket No. 17–AWP–10]
                                             between the national government and                      PART 107—SMALL BUSINESS
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                                             the States, or on the distribution of                    INVESTMENT COMPANIES                                  Amendment of Class E Airspace;
                                             power and responsibilities among the                                                                           Hanford, CA
                                             various levels of government. Therefore,                 ■ 1. The authority citation for part 107
                                                                                                                                                            AGENCY:  Federal Aviation
                                             this final rule has no federalism                        continues to read as follows:
                                                                                                                                                            Administration (FAA), DOT.
                                             implications warranting preparation of a                   Authority: 15 U.S.C. 681, 683, 687(c), 687b,        ACTION: Final rule.
                                             federalism assessment.                                   687d, 687g, 687m.



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Document Created: 2018-02-21 01:48:26
Document Modified: 2018-02-21 01:48:26
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective Date: This rule is effective February 21, 2018.
ContactArlene Embrey, 202-205-6976, or at [email protected]
FR Citation83 FR 7361 
RIN Number3245-AG96
CFR Citation13 CFR 107
13 CFR 120
13 CFR 142
13 CFR 146
CFR AssociatedInvestment Companies; Loan Programs-Business; Reporting and Recordkeeping Requirements; Small Businesses; Administrative Practice and Procedure; Claims; Fraud; Penalties; Government Contracts; Grant Programs; Loan Programs and Lobbying

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