[Federal Register Volume 61, Number 196 (Tuesday, October 8, 1996)]
[Rules and Regulations]
[Pages 52704-52706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25561]
=======================================================================
-----------------------------------------------------------------------
FEDERAL MARITIME COMMISSION
46 CFR Part 506
[Docket No. 96-17]
Inflation Adjustment of Civil Monetary Penalties
AGENCY: Federal Maritime Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule implements the Federal Civil Penalties
Inflation Adjustment Act of 1990 as amended by the Debt Collection
Improvement Act of 1996. The rule adjusts the amount of each statutory
civil penalty subject to Federal Maritime Commission jurisdiction in
accordance with the requirements of the Act.
EFFECTIVE DATE: November 7, 1996.
FOR FURTHER INFORMATION CONTACT: Vern W. Hill, Director, Bureau of
Enforcement, Federal Maritime Commission, 800 North Capitol Street,
NW., Washington, DC 20573, (202) 523-5783.
SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation
Adjustment Act of 1990 (``1990 Act''), Public Law 101-410, 104 Stat.
890, 28 U.S.C. 2461 note, as amended by the Debt Collection Improvement
Act of 1996 (``Act''), Public Law 104-134, April 26, 1996, requires the
inflation adjustment of Civil Monetary Penalties (``CMP'') to ensure
that they continue to maintain their deterrent value. The Act requires
that not later than 180 days after its enactment, October 23, 1996, and
at least once every 4 years thereafter, the head of each agency shall,
by regulation published in the Federal Register, adjust each CMP within
its jurisdiction by the inflation adjustment described in the 1990 Act.
The inflation adjustment under the Act is to be determined by
increasing the maximum CMP by the cost-of-living adjustment, rounded
off as set forth in section 5(a) of the 1990 Act. The cost-of-living
adjustment is the percentage (if any) for each CMP by which the
Consumer Price Index (``CPI'') \1\ for the month of June of the
calendar year preceding the adjustment, exceeds the CPI for the
[[Page 52705]]
month of June of the calendar year in which the amount of such CMP was
last set or adjusted pursuant to law. The first adjustment to a CMP may
not exceed 10 percent of such penalty.
---------------------------------------------------------------------------
\1\ CPI is defined as the CPI for all urban consumers published
annually by the Department of Labor.
---------------------------------------------------------------------------
Any increased penalties shall apply only to violations which occur
after the date on which the increase takes effect.
A typical example of an inflation adjustment of a CMP is as
follows:
Section 13 of the Shipping Act of 1984 (``1984 Act''), 46 U.S.C.
app. 1712, imposes a maximum $25,000 penalty for a knowing and willful
violation of the 1984 Act. The penalty was set in 1984. The CPI for
June, 1984 was 310.7. The CPI for June, 1996 is 469.5. The inflation
factor, therefore, is 469.5/310.7 or 1.51. The maximum penalty amount
after increase and statutory rounding would be $40,000. (1.51 x 25,000)
The new maximum penalty amount after applying the 10% limit on an
initial increase is $27,500.
A similar calculation was done with respect to each CMP subject to
the jurisdiction of the Federal Maritime Commission (``Commission'').
In compliance with the Act, the Commission is hereby amending its
regulations by creating a new part 506 in 46 CFR which will be entitled
Civil Monetary Penalty Inflation Adjustment.
Notice and an opportunity for public comment are not necessary
prior to issuance of this final rule because it implements a definitive
statutory formula mandated by the Act.
The Commission certifies pursuant to the Regulatory Flexibility
Act, 5 U.S.C. 605(b), that this rule will not have a significant
economic impact on a substantial number of small entities, including
small businesses, small organizational units, and small governmental
jurisdictions because it merely increases the maximum statutory civil
monetary penalty by 10 percent for those entities that commit
violations after the effective date of this rule. The Commission rarely
has imposed the statutory maximum civil monetary penalty and, moreover,
considers ability of a respondent to pay a civil monetary penalty in
determining its amount. The size of a company necessarily enters into a
determination of its ability to pay.
The rule does not contain any collection of information
requirements as defined by the Paperwork Reduction Act of 1995, as
amended. Therefore, Office of Management and Budget review is not
required.
List of Subjects in 46 CFR Part 506
Administrative practice and procedure, Penalties.
Part 506 of title 46 of the Code of Federal Regulations is added to
read as follows:
PART 506--CIVIL MONETARY PENALTY INFLATION ADJUSTMENT
Sec.
506.1 Scope and purpose.
506.2 Definitions.
506.3 Civil Monetary Penalty Inflation Adjustment.
506.4 Cost of Living Adjustments of Civil Monetary Penalties.
506.5 Application of Increase to Violations.
Authority: 28 U.S.C. 2461.
Sec. 506.1 Scope and purpose.
The purpose of this Part is to establish a mechanism for the
regular adjustment for inflation of civil monetary penalties and to
adjust such penalties in conformity with the Federal Civil Penalties
Inflation Adjustment Act of 1990, 46 U.S.C. 2461, as amended by the
Debt Collection Improvement Act of 1996, Public Law 104-134, April 26,
1996, in order to maintain the deterrent effect of civil monetary
penalties and to promote compliance with the law.
Sec. 506.2 Definitions.
(a) Commission means the Federal Maritime Commission.
(b) Civil Monetary Penalty means any penalty, fine, or other
sanction that:
(1)(i) Is for a specific monetary amount as provided by Federal
law; or
(ii) Has a maximum amount provided by Federal law;
(2) Is assessed or enforced by the Commission pursuant to Federal
law; and
(3) Is assessed or enforced pursuant to an administrative
proceeding or a civil action in the Federal Courts.
(c) Consumer Price Index means the Consumer Price Index for all
urban consumers published by the Department of Labor.
Sec. 506.3 Civil Monetary Penalty Inflation Adjustment.
The Commission shall, not later than October 23, 1996, and at least
once every 4 years thereafter--
(a) By regulation adjust each civil monetary penalty provided by
law within the jurisdiction of the Commission by the inflation
adjustment described in Sec. 506.4; and
(b) Publish each such regulation in the Federal Register.
Sec. 506.4 Cost of Living Adjustments of Civil Monetary Penalties.
(a) The inflation adjustment under Sec. 506.3 shall be determined
by increasing the maximum civil monetary penalty for each civil
monetary penalty by the cost-of-living adjustment. Any increase
determined under this subsection shall be rounded to the nearest:
(1) Multiple of $10 in the case of penalties less than or equal to
$100;
(2) Multiple of $100 in the case of penalties greater than $100 but
less than or equal to $1,000;
(3) Multiple of $1,000 in the case of penalties greater than $1,000
but less than or equal to $10,000;
(4) Multiple of $5,000 in the case of penalties greater than
$10,000 but less than or equal to $100,000;
(5) Multiple of $10,000 in the case of penalties greater than
$100,000 but less than or equal to $200,000; and
(6) Multiple of $25,000 in the case of penalties greater than
$200,000.
(b) For purposes of paragraph (a) of this section, the term ``cost-
of-living adjustment'' means the percentage (if any) for each civil
monetary penalty by which the Consumer Price Index for the month of
June of the calendar year preceding the adjustment, exceeds the
Consumer Price Index for the month of June of the calendar year in
which the amount of such civil monetary penalty was last set or
adjusted pursuant to law.
(c) Limitation on initial adjustment. The first adjustment of civil
monetary penalty pursuant to Sec. 506.3 may not exceed 10 percent of
such penalty.
(d) Inflation adjustment. Maximum Civil Monetary Penalties within
the jurisdiction of the Federal Maritime Commission are adjusted for
inflation as follows:
----------------------------------------------------------------------------------------------------------------
Maximum New adjusted
United States Code Citation Civil Monetary Penalty penalty amount maximum
description as of 10/23/96 penalty amount
----------------------------------------------------------------------------------------------------------------
46 U.S.C. app. sec. 817d...................... Failure to establish financial 5,000 5,500
responsibility for death or 200 220
injury.
46 U.S.C. app. sec. 817e...................... Failure to establish financial 5,000 5,500
responsibility for 200 220
nonperformance of
transportation.
[[Page 52706]]
46 U.S.C. app. sec. 876....................... Failure to provide required 5,000 5,500
reports, etc.--Merchant Marine
Act of 1920.
46 U.S.C. app. sec. 876....................... Adverse shipping conditions/ 1,000,000 1,100,000
Merchant Marine Act of 1920.
46 U.S.C. app. sec. 876....................... Operating after tariff 50,000 55,000
suspension/Merchant Marine Act
of 1920.
46 U.S.C. app. sec. 1707a..................... Failure to pay ATFI Fee......... 5,000 5,500
46 U.S.C. app. sec. 1710a..................... Adverse impact on U.S. carriers 1,000,000 1,100,000
by foreign shipping practices.
46 U.S.C. app. sec. 1712...................... Operating in foreign commerce 50,000 55,000
after tariff suspension.
46 U.S.C. app. sec. 1712...................... Knowing and willful violation/ 25,000 27,500
Shipping Act of 1984 or
Commission regulation or order.
46 U.S.C. app. sec. 1712...................... Violation of Shipping Act of 5,000 5,500
1984, Commission regulation or
order, not knowing and willful.
46 U.S.C. app. sec. 1714...................... Failure to file anti-rebate 5,000 5,500
certification/Shipping Act of
1984.
31 U.S.C. sec. 3802(a)(1)..................... Program Fraud Civil Remedies Act/ 5,000 5,500
giving false statement.
31 U.S.C. sec. 3802(a)(2)..................... Program Fraud Civil Remedies Act/ 5,000 5,500
giving false statement.
----------------------------------------------------------------------------------------------------------------
Sec. 506.5 Application of Increase to Violations.
Any increase in a civil monetary penalty under this part shall
apply only to violations which occur after the date the increase takes
effect.
By the Commission.
Joseph C. Polking,
Secretary.
[FR Doc. 96-25561 Filed 10-7-96; 8:45 am]
BILLING CODE 6730-01-M
