83 FR 8945 - Federal Civil Penalties Inflation Adjustment Act Amendments

DEPARTMENT OF VETERANS AFFAIRS

Federal Register Volume 83, Issue 42 (March 2, 2018)

The Department of Veterans Affairs (VA) is providing public notice of inflationary adjustments to the maximum civil monetary penalties assessed or enforced by VA, as implemented by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, for calendar year 2018. VA may impose civil monetary penalties for false loan guaranty certifications. Also, VA may impose civil monetary penalties for fraudulent claims or written statements made in connection with VA programs generally. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, sets forth a formula that increases the maximum statutory amounts for civil monetary penalties and directs VA to give public notice of the new maximum amounts by regulation. Accordingly, VA is providing notice of the calendar year 2018 inflationary adjustments that increase maximum civil monetary penalties from $21,916 to $22,363 for false loan guaranty certifications and from $10,957 to $11,181 for fraudulent claims or written statements made in connection with VA programs generally.

[Federal Register Volume 83, Number 42 (Friday, March 2, 2018)]
[Rules and Regulations]
[Pages 8945-8946]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-04241]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 36 and 42

RIN 2900-AQ22


Federal Civil Penalties Inflation Adjustment Act Amendments

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is providing public 
notice of inflationary adjustments to the maximum civil monetary 
penalties assessed or enforced by VA, as implemented by the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015, for 
calendar year 2018. VA may impose civil monetary penalties for false 
loan guaranty certifications. Also, VA may impose civil monetary 
penalties for fraudulent claims or written statements made in 
connection with VA programs generally. The Federal Civil Penalties 
Inflation Adjustment Act of 1990, as amended by the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015, sets forth 
a formula that increases the maximum statutory amounts for civil 
monetary penalties and directs VA to give public notice of the new 
maximum amounts by regulation. Accordingly, VA is providing notice of 
the calendar year 2018 inflationary adjustments that increase maximum 
civil monetary penalties from $21,916 to $22,363 for false loan 
guaranty certifications and from $10,957 to $11,181 for fraudulent 
claims or written statements made in connection with VA programs 
generally.

DATES: Effective Date: This rule is effective March 2, 2018.

FOR FURTHER INFORMATION CONTACT: Michael Shores, Director, Office of 
Regulation Policy and Management (00REG), Department of Veterans 
Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 461-4921. 
(This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: On November 2, 2015, the President signed 
into law the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (2015 Act) (Pub. L. 114-74, sec. 701, 129 
Stat. 599), which amended the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890), to improve the 
effectiveness of civil monetary penalties and to maintain their 
deterrent effect. The 2015 Act was codified in a note following 28 
U.S.C. 2461. The 2015 Act requires agencies to publish annual 
adjustments for inflation, based on the percent change between the 
Consumer Price Index (CPI-U) for the month of October preceding the 
date of the adjustment and the prior year's October CPI-U. 28 U.S.C. 
2461 note 4(b) and 5(b)(1).
    Under 38 U.S.C. 3710(g)(4), VA is authorized to levy civil monetary 
penalties against private lenders that originate VA-guaranteed loans if 
a lender falsely certifies that they have complied with certain credit 
information and loan processing standards, as set forth by chapter 37, 
title 38 U.S.C. and part 36, title 38 CFR. Under section 3710(g)(4)(B), 
any lender who knowingly and willfully makes such a false certification 
shall be liable to the United States Government for a civil penalty 
equal to two times the amount of the Secretary's loss on the loan 
involved or to another appropriate amount, not to exceed $10,000, 
whichever is greater. VA implemented the penalty amount in 38 CFR 
36.4340(k)(1)(i) and (k)(3). On June 22, 2016, VA provided public 
notice of the adjustment to the $10,000 figure, as imposed by the 2015 
Act's ``catch up'' formula. See 81 FR 40523-40525; 81 FR 65551-65552, 
Sept. 23, 2016. The ``catch up'' formula imposed an adjustment from 
$10,000 to $21,563. See 38 CFR 36.4340(k)(1)(i) and (k)(3). VA did not 
publish the calendar year 2017 inflation adjustment. On December 16, 
2016, the Office of Management and Budget (OMB) published Circular M-
17-11. This circular stated that the inflation adjustment to the 
previously increased ``catch up'' figure was effectuated by multiplying 
the ``catch up'' figure by 1.01636. Consequently, the calendar year 
2017 inflation revision imposed an adjustment from $21,563 to $21,916, 
rounded to the nearest dollar. On December 15, 2017, OMB issued 
Circular M-18-03. This circular reflects that the October 2016 CPI-U 
was 241.729 and the October 2017 CPI-U was 246.663, resulting in an 
inflation adjustment multiplier of 1.02041. Accordingly, the calendar 
year 2018 inflation revision imposes an adjustment from $21,916 to 
$22,363.
    Under 31 U.S.C. 3802, VA can impose monetary penalties against any 
person who makes, presents, or submits a claim or written statement to 
VA that the person knows or has reason to know is false, fictitious, or 
fraudulent, or who engages in other covered conduct. The statute 
permits, in addition to any other remedy that may be prescribed by law, 
a civil penalty of not more than $5,000 for each claim. 31 U.S.C. 
3802(a)(1) and (2). VA implemented the penalty amount in 38 CFR 
42.3(a)(1) and (b)(1). That amount was subsequently increased to 
$5,500. See 61 FR 56449-56450, Nov.1, 1996. On June 22, 2016, VA 
provided public notice of the adjustment to the $5,500 figure, as 
imposed by the 2015 Act's ``catch up'' formula. See 81 FR 40523-40525; 
81 FR 65551-65552, Sept. 23, 2016. The ``catch up'' formula imposed an 
adjustment from $5,500 to $10,781. See 38 CFR 42.3(a)(1)(iv) and 
(b)(1). VA did not publish the calendar year 2017 inflation adjustment. 
Circular M-17-11 stated that the inflation adjustment to the previously 
increased ``catch up'' figure was effectuated by multiplying the 
``catch up'' figure by 1.01636. Consequently, the calendar year 2017 
inflation revision imposed an adjustment from $10,781 to $10,957. 
Circular M-18-03 reflects an inflation adjustment multiplier of 
1.02041. Therefore, the calendar year 2018 inflation revision imposes 
an adjustment from $10,957 to $11,181.
    Accordingly, VA is revising 38 CFR 36.4340(k)(1)(i) and (k)(3) and 
38 CFR 42.3(a)(1) and (b)(1) to reflect the 2018 inflationary 
adjustments for civil monetary penalties assessed or enforced by VA.

Administrative Procedure Act

    The Secretary of Veterans Affairs finds that there is good cause 
under 5 U.S.C. 553(b)(B) and (d)(3) to dispense with the opportunity 
for prior notice and public comment and to publish this rule with an 
immediate effective date. The 2015 Act requires agencies to make annual 
adjustments for inflation to the allowed amounts of civil monetary 
penalties ``notwithstanding section 553 of title 5, United States 
Code.'' 28 U.S.C. 2461 note 4(a) and (b). The penalty adjustments, and 
the methodology used to determine the adjustments, are set by the terms 
of the 2015 Act. VA has no discretion to make changes in those areas. 
Therefore, an opportunity for prior notice and public comment and a 
delayed effective date is unnecessary.

Executive Orders 12866, 13563, and 13771

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory

[[Page 8946]]

alternatives and, when regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects, and other advantages; 
distributive impacts; and equity). Executive Order 13563 (Improving 
Regulation and Regulatory Review) emphasizes the importance of 
quantifying both costs and benefits, reducing costs, harmonizing rules, 
and promoting flexibility. Executive Order 12866 (Regulatory Planning 
and Review) defines a ``significant regulatory action'' requiring 
review by OMB, unless OMB waives such review, as ``any regulatory 
action that is likely to result in a rule that may: (1) Have an annual 
effect on the economy of $100 million or more or adversely affect in a 
material way the economy, a sector 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 this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined, and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866. VA's impact analysis can be found as a 
supporting document at http://www.regulations.gov, usually within 48 
hours after the rulemaking document is published. Additionally, a copy 
of the rulemaking and its impact analysis are available on VA's website 
at http://www.va.gov/orpm/, by following the link for ``VA Regulations 
Published From FY 2004 Through Fiscal Year to Date.'' This rule is not 
an Executive Order 13771 regulatory action because this rule is not 
significant under Executive Order 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule 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 (adjusted annually for 
inflation) in any one year. This final rule will have no such effect on 
state, local, and tribal governments, or on the private sector.

Paperwork Reduction Act

    This final rule contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).

Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), imposes 
certain requirements on Federal agency rules that are subject to the 
notice and comment requirements of the Administrative Procedure Act 
(APA), 5 U.S.C. 553(b). This final rule is exempt from the notice and 
comment requirements of the APA because the 2015 Act directed the 
Department to issue the annual adjustments without regard to section 
553 of the APA. Therefore, the requirements of the RFA applicable to 
notice and comment rulemaking do not apply to this rule. Accordingly, 
the Department is not required either to certify that the final rule 
would not have a significant economic impact on a substantial number of 
small entities or to conduct a regulatory flexibility analysis.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number and title for the 
program affected by this document is 64.114, Veterans Housing 
Guaranteed and Insured Loans.

List of Subjects

38 CFR Part 36

    Condominiums, Housing, Individuals with disabilities, Loan 
programs--housing and community development, Loan programs--Veterans, 
Manufactured homes, Mortgage insurance, Reporting and recordkeeping 
requirements, Veterans.

38 CFR Part 42

    Administrative practice and procedure, Claims, Fraud, Penalties.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Gina S. 
Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, 
approved this document on February 23, 2018, for publication.

    Dated: February 23, 2018.
Jeffrey Martin,
Impact Analyst, Office of Regulation Policy & Management, Office of the 
Secretary, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs amends 38 CFR parts 36 and 42 as set forth below:

PART 36--LOAN GUARANTY

0
1. The authority citation for part 36 continues to read as follows:

    Authority:  38 U.S.C. 501 and 3720.


Sec.  36.4340   [Amended]

0
2. In Sec.  36.4340, amend paragraphs (k)(1)(i) introductory text and 
(k)(3) by removing ``$21,563'' and adding, in its place, ``$22,363.''

PART 42--STANDARDS IMPLEMENTING THE PROGRAM FRAUD CIVIL REMEDIES 
ACT

0
3. The authority citation for part 42 continues to read as follows:

    Authority:  Pub. L. 99-509, secs. 6101-6104, 100 Stat. 1874, 
codified at 31 U.S.C. 3801-3812.


Sec.  42.3   [Amended]

0
4. In Sec.  42.3, amend paragraphs (a)(1)(iv) and (b)(1)(ii) by 
removing ``$10,781'' and adding, in its place, ``$11,181.''

[FR Doc. 2018-04241 Filed 3-1-18; 8:45 am]
 BILLING CODE 8320-01-P