2016-14675. Civil Monetary Penalties Inflation Adjustment

AGENCY:

Corporation for National and Community Service.

ACTION:

Interim final rule.

SUMMARY:

The Corporation for National and Community Service (CNCS) is updating its regulations to reflect required inflation-related increases to the civil monetary penalties in its regulations, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

DATES:

Effective date: This rule is effective August 1, 2016.

Comment due date: Technical comments may be submitted until July 25, 2016.

ADDRESSES:

You may send your comments electronically through the Federal government's one-stop rulemaking Web site at www.regulations.gov. Also, you may mail or deliver your comments to Phyllis Green, Executive Assistant, Office of General Counsel, at the Corporation for National and Community Service, 250 E Street SW., Washington, DC 20525. Due to continued delays in CNCS's receipt of mail, we strongly encourage comments to be submitted online electronically. The TDD/TTY number is 800-833-3722. You may request this notice in an alternative format for the visually impaired.

FOR FURTHER INFORMATION CONTACT:

Phyllis Green, Executive Assistant, Office of General Counsel, at 202-606-6709 or email to [e-mail]. Individuals who use a telecommunications device for the deaf (TTY-TDD) may call 800-833-3722 between 8:00 a.m. and 8:00 p.m. Eastern Time, Monday through Friday.

SUPPLEMENTARY INFORMATION:

I. Background

The Corporation for National and Community Service (CNCS) is a federal agency that engages more than five million Americans in service through its AmeriCorps, Senior Corps, Social Innovation Fund, and Volunteer Generation Fund programs, and leads the President's national call to service initiative, United We Serve. For more information, visit NationalService.gov.

On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Pub. L. 114-74) (the “Act”) to improve the effectiveness of civil monetary penalties and to maintain the deterrent effect of such penalties. The Act requires agencies to make a “catch-up” adjustment to the level of civil monetary penalties through an interim final rulemaking and to adjust the civil monetary penalties for inflation annually.

II. Method of Calculation

CNCS identified two civil monetary penalties in its regulations and calculated the catch-up adjustments as specified in the February 24, 2016, OMB Memorandum of the Heads of Executive Departments and Agencies, M-16-06, Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. A civil monetary penalty under the act is a penalty, fine, or other sanction that is for a specific monetary amount as provided by Federal law or has a maximum amount provided for by federal law and is assessed or enforced by an agency pursuant to Federal law and is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts. (See 28 U.S.C. 2461 note).

The inflation adjustment for each applicable civil monetary penalty is determined using the percent increase in the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October of the year in which the amount of each civil money penalty was most recently established or modified.

CNCS identified two civil penalties in its regulations: (1) The penalty associated with Restrictions on Lobbying (45 CFR 1230.400) and (2) the penalty associated with the Program Fraud Civil Remedies Act (45 CFR 2554.1).

In 1989, Congress established civil monetary penalties related to Restrictions on Lobbying (Section 319, Pub. L. 101-121; 31 U.S.C. 1352) ranging from $10,000 to $100,000. The multiplier for 1989 is 1.89361. Thus, the new range of possible civil monetary penalties is from $18,936 to $189,361.

The Program Fraud Civil Remedies Act of 1986 (Pub. L. 99-509) established a civil monetary penalty with an upper limit of $5,000. The multiplier for 1986 is 2.15628. Thus, the new upper limit of the civil monetary penalty is $10,781.

III. Summary of Final Rule

This final rule adjusts the civil monetary penalty amounts related to Restrictions on Lobbying (45 CFR 1230.400) and the Program Fraud Civil Remedies Act of 1986 (45 CFR 2554.1). The range of civil monetary penalties related to Restrictions on Lobbying increase from $10,000 to $100,000 to $18,936 to $189,361. The civil monetary penalties for the Program Fraud Civil Remedies Act of 1986 increase from up to $5,000 to up to $10,781.

IV. Regulatory Procedures

A. Determination of Good Cause for Publication Without Notice and Comment

CNCS finds, under 5 U.S.C. 553(b)(3)(B), that there is good cause to except this rule from the public notice and comment provisions of the Administrative Procedure Act, 5 U.S.C. 553(b). Because CNCS is implementing a final rule pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires CNCS to update its regulations based on a prescribed formula, CNCS has no discretion in the nature or amount of the change to the civil monetary penalties. Therefore, notice and comment for these proscribed updates is impracticable and unnecessary. As an interim final rule, no further regulatory action is required for the issuance of this legally binding rule. If you would like to provide technical comments, however, they may be submitted until July 25, 2016.

B. Review Under Procedural Statutes and Executive Orders

CNCS has determined that making technical changes to the amount of civil monetary penalties in its regulations does not trigger any requirements under procedural statutes and Executive Orders that govern rulemaking procedures.

V. Effective Date

This rule is effective August 1, 2016. The adjusted civil penalty amounts apply to civil penalties assessed after August 1, 2016 when the violation occurred after November 2, 2015. If the violation occurred prior to November 2, 2015 or a penalty was assessed prior to August 1, 2016, the pre-adjustment civil penalty amounts in effect prior to August 1, 2106 will apply.

List of Subjects

45 CFR Part 1230

• Government contracts
• Grant programs
• Loan programs
• Lobbying
• Penalties
• Reporting and recordkeeping requirements

45 CFR Part 2554

• Claims
• Fraud
• Organization and functions (Government agencies)
• Penalties

For the reasons discussed in the preamble, under the authority of 42 U.S.C. 12651c(c), the Corporation for National and Community Service amends chapters XII and XXV, title 45 of the Code of Federal Regulations as follows:

PART 1230—NEW RESTRICTIONS ON LOBBYING

1. The authority citation for part 12301 continues to read as follows:

Authority: Section 319, Pub. L. 101-121 (31 U.S.C. 1352); Pub. L. 93-113; 42 U.S.C. 4951, et seq.; 42 U.S.C. 5060

§ 1230.400

[Amended]

2. Amend § 1230.400 by:

a. In paragraphs (a), (b), and (e), removing “$10,000” and adding, in its place, “$18,936” each place it appears.

b. In paragraphs (a), (b), and (e), removing “$100,000” and adding, in its place, “$189,361” each place it appears.

Appendix A to Part 1230 [Amended]

3. Amend appendix A to part 1230 by:

a. Removing “$10,000” and adding, in its place, “$18,936” each place it appears.

b. Removing “$100,000” and adding, in its place, “$189,361” each place it appears.

PART 2554—PROGRAM FRAUD CIVIL REMEDIES ACT REGULATIONS

4. The authority citation for part 2554 continues to read as follows:

Authority: Pub. L. 99-509, Secs. 6101-6104, 100 Stat. 1874 (31 U.S.C. 3801-3812); 42 U.S.C. 12651c-12651d.

§ 2554.1

[Amended]

5. Amend § 2554.1 by removing “$5,000” in paragraph (b) and adding, in its place, “$10,781”.

Dated: June 16, 2016.

Jeremy Joseph,

General Counsel.