Adjustment of Civil Monetary Penalty Amounts for 2020
| Published date | 06 March 2020 |
| Citation | 85 FR 13041 |
| Record Number | 2020-04146 |
| Section | Rules and Regulations |
| Court | Housing And Urban Development Department |
Federal Register, Volume 85 Issue 45 (Friday, March 6, 2020)
[Federal Register Volume 85, Number 45 (Friday, March 6, 2020)]
[Rules and Regulations]
[Pages 13041-13045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04146]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 28, 30, 87, 180, and 3282
[FR-6196-F-01]
Adjustment of Civil Monetary Penalty Amounts for 2020
AGENCY: Office of the General Counsel, HUD.
ACTION: Final rule.
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SUMMARY: This rule provides for 2020 inflation adjustments of civil
monetary penalty amounts required by the Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015.
DATES: Effective date for 2020 inflation adjustment: April 6, 2020.
FOR FURTHER INFORMATION CONTACT: Aaron Santa Anna, Acting Associate
General Counsel, Office of Legislation and Regulations, Office of
General Counsel, Department of Housing and Urban Development, 451 7th
Street SW, Room 10276, Washington, DC 20024; telephone number 202-402-
5300 (this is not a toll-free number). Hearing- or speech-impaired
individuals may access this number via TTY by calling the Information
Relay Service at 800-877-8339 (this is a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (the 2015 Act) (Pub. L. 114-74, Sec. 701), which further
amended the Federal Civil Penalties Inflation Adjustment Act of 1990
(Pub. L. 101-410), requires agencies to make annual adjustments to
civil monetary penalty (CMP) amounts for inflation ``notwithstanding
section 553 of title 5, United States Code.'' Section 553 refers to the
Administrative Procedure Act, which provides for advance notice and
public comment on rules. However, as explained in Section III below,
HUD has
[[Page 13042]]
determined that advance notice and public comment on this final rule is
unnecessary. This annual adjustment is for 2020.
The annual adjustment is based on the percent change between the
U.S. Department of Labor's Consumer Price Index for All Urban Consumers
(``CPI-U'') for the month of October preceding the date of the
adjustment, and the CPI-U for October of the prior year (28 U.S.C. 2461
note, section (5)(b)(1)). Based on that formula, the cost-of-living
adjustment multiplier for 2019 is 1.01764.\1\ Pursuant to the 2015 Act,
adjustments are rounded to the nearest dollar.\2\
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\1\ Office of Management and Budget, M-20-05, Memorandum for the
Heads of Executive Departments and Agencies, Implementation of
Penalty Inflation Adjustments for 2020, Pursuant to the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
(https://www.whitehouse.gov/wp-content/uploads/2019/12/M-20-05.pdf).
(October 2019 CPI-U (257.346)/October 2018 CPI-U (252.885) =
1.01764.)
\2\ 28 U.S.C. 2461 note.
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II. This Final Rule
This rule makes the required 2020 inflation adjustment of civil
penalty amounts. Since HUD is not applying these adjustments
retroactively, the 2020 increases apply to violations occurring on or
after this rule's effective date. HUD provides a table showing how, for
each component, the penalties are being adjusted for 2020 pursuant to
the 2015 Act. In the first column (``Description''), HUD provides a
description of the penalty. In the second column (``Statutory
Citation''), HUD provides the United States Code statutory citation
providing for the penalty. In the third column (``Regulatory
Citation''), HUD provides the Code of Federal Regulations citation
under title 24 for the penalty. In the fourth column (``Previous
Amount''), HUD provides the amount of the penalty pursuant to the rule
implementing the 2019 adjustment (84 FR 9451, March 15, 2019). In the
fifth column (``2020 Adjusted Amount''), HUD lists the penalty after
applying the 2020 inflation adjustment.
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Statutory Regulatory citation 2020 Adjusted
Description citation (24 CFR) Previous amount amount
----------------------------------------------------------------------------------------------------------------
False Claims................... Omnibus Budget Sec. 28.10(a)....... $11,463.......... $11,665.
Reconciliation
Act of 1986 (31
U.S.C.
3802(a)(1)).
False Statements............... Omnibus Budget Sec. 28.10(b)....... $11,463.......... $11,665.
Reconciliation
Act of 1986 (31
U.S.C.
3802(b)(1)).
Advance Disclosure of Funding.. Department of Sec. 30.20.......... $20,134.......... $20,489.
Housing and
Urban
Development Act
(42 U.S.C.
3537a(c)).
Disclosure of Subsidy Layering. Department of Sec. 30.25.......... $20,134.......... $20,489.
Housing and
Urban
Development Act
(42 U.S.C.
3545(f)).
FHA Mortgagees and Lenders HUD Reform Act of Sec. 30.35.......... Per Violation: Per Violation:
Violations. 1989 (12 U.S.C. $10,067. Per $10,245. Per
1735f-14(a)(2)). Year: $2,013,399. Year:
$2,048,915.
Other FHA Participants HUD Reform Act of Sec. 30.36.......... Per Violation: Per Violation:
Violations. 1989 (12 U.S.C. $10,067. Per $10,245. Per
1735f-14(a)(2)). Year: $2,013,399. Year:
$2,048,915.
Indian Loan Mortgagees Housing Community Sec. 30.40.......... Per Violation: Per Violation:
Violations. Development Act $10,067. Per $10,245. Per
of 1992 (12 Year: $2,013,399. Year:
U.S.C. 1715z- $2,048,915.
13a(g)(2)).
Multifamily & Section 202 or HUD Reform Act of Sec. 30.45.......... $50,334.......... $51,222.
811 Owners Violations. 1989 (12 U.S.C.
1735f-15(c)(2)).
Ginnie Mae Issuers & Custodians HUD Reform Act of Sec. 30.50.......... Per Violation: Per Violation:
Violations. 1989 (12 U.S.C. $10,067. Per $10,245. Per
1723i(b)). Year: $2,013,399. Year:
$2,048,915.
Title I Broker & Dealers HUD Reform Act of Sec. 30.60.......... Per Violation: Per Violation:
Violations. 1989 (12 U.S.C. $10,067. Per $10,245. Per
1703). Year: $2,013,399. Year:
$2,048,915.
Lead Disclosure Violation...... Title X-- Sec. 30.65.......... $17,834.......... $18,149.
Residential Lead-
Based Paint
Hazard Reduction
Act of 1992 (42
U.S.C.
4852d(b)(1)).
Section 8 Owners Violations.... Multifamily Sec. 30.68.......... $39,121.......... $39,811.
Assisted Housing
Reform and
Affordability
Act of 1997 (42
U.S.C. 1437z-
1(b)(2)).
Lobbying Violation............. The Lobbying Sec. 87.400......... Min: $20,134. Min: $20,489.
Disclosure Act Max: $201,340. Max: $204,892.
of 1995 (31
U.S.C. 1352).
Fair Housing Act Civil Fair Housing Act Sec. 180.671(a)..... No Priors: No Priors:
Penalties. (42 U.S.C. $21,039. One $21,410. One
3612(g)(3)). Prior: $52,596. Prior: $53,524.
Two or More Two or More
Priors: $105,194. Priors:
$107,050.
Manufactured Housing Housing Community Sec. 3282.10........ Per Violation: Per Violation:
Regulations Violation. Development Act $2,924. Per $2,976. Per
of 1974 (42 Year: $3,654,955. Year:
U.S.C. 5410). $3,719,428.
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III. Justification for Final Rulemaking for the 2020 Adjustments
HUD generally publishes regulations for public comment before
issuing a rule for effect, in accordance with its own regulations on
rulemaking in 24 CFR part 10. However, part 10 provides for exceptions
to the general rule if the agency finds good cause to omit advanced
notice and public participation. The good cause requirement is
satisfied when prior public procedure is ``impractical, unnecessary, or
contrary to the public interest'' (see 24 CFR 10.1). As discussed, this
final rule makes the required 2020 inflation adjustment, which HUD does
not have discretion to change. Moreover, the 2015 Act specifies that a
delay in the effective date under the Administrative Procedure Act is
not required for annual adjustments under the 2015 Act. HUD has
determined, therefore, that it is unnecessary to delay the
effectiveness of the 2020 inflation adjustments to solicit public
comments.
Section 7(o) of the Department of Housing and Urban Development Act
(42 U.S.C. 3535(o)) requires that any HUD regulation implementing any
provision of the Department of Housing
[[Page 13043]]
and Urban Development Reform Act of 1989 that authorizes the imposition
of a civil money penalty may not become effective until after the
expiration of a public comment period of not less than 60 days. This
rule does not authorize the imposition of a civil money penalty--
rather, it makes a standard inflation adjustment to penalties that were
previously authorized. As noted above, the 2020 inflation adjustments
are made in accordance with a statutorily prescribed formula that does
not provide for agency discretion. Accordingly, a delay in the
effectiveness of the 2020 inflation adjustments in order to provide the
public with an opportunity to comment is unnecessary because the 2015
Act exempts the adjustments from the need for delay, the rule does not
authorize the imposition of a civil money penalty, and, in any event,
HUD would not have the discretion to make changes as a result of any
comments.
IV. Findings and Certifications
Regulatory Review--Executive Orders 12866 and 13563
Under Executive Order 12866 (Regulatory Planning and Review) (58 FR
51735), a determination must be made whether a regulatory action is
significant and, therefore, subject to review by the Office of
Management and Budget (OMB) in accordance with the requirements of the
order. Executive Order 13563 (Improving Regulations and Regulatory
Review) (76 FR 3821) directs executive agencies to analyze regulations
that are ``outmoded, ineffective, insufficient, or excessively
burdensome, and to modify, streamline, expand, or repeal them in
accordance with what has been learned.'' Executive Order 13563 also
directs that, where relevant, feasible, and consistent with regulatory
objectives, and to the extent permitted by law, agencies are to
identify and consider regulatory approaches that reduce burdens and
maintain flexibility and freedom of choice for the public. Executive
Order 13771 (Reducing Regulation and Controlling Regulatory Costs) (82
FR 9339) requires that for every new regulation issued, at least two
prior regulations be identified for removal, and that the cost of
planned regulations be prudently managed and controlled through a
budgeting process. As discussed above in this preamble, this final rule
adjusts existing civil monetary penalties for inflation by a
statutorily required amount.
HUD determined that this rule was not significant under Executive
Order 12866 and Executive Order 13563. Moreover, as this rule is not a
significant regulatory action under Executive Order 12866, it is not
considered an Executive Order 13771 regulatory action.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Because HUD has determined that good cause exists to issue this rule
without prior public comment, this rule is not subject to the
requirement to publish an initial or final regulatory flexibility
analysis under the RFA as part of such action.
Unfunded Mandates Reform
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) \3\
requires that an agency prepare a budgetary impact statement before
promulgating a rule that includes a Federal mandate that may result in
the expenditure by State, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year. If a budgetary impact statement is required, section 205 of UMRA
also requires an agency to identity and consider a reasonable number of
regulatory alternatives before promulgating a rule.\4\ However, the
UMRA applies only to rules for which an agency publishes a general
notice of proposed rulemaking. As discussed above, HUD has determined,
for good cause, that prior notice and public comment is not required on
this rule and, therefore, the UMRA does not apply to this final rule.
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\3\ 2 U.S.C. 1532.
\4\ 2 U.S.C. 1535.
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Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') (64 FR 43255)
prohibits an agency from publishing any rule that has federalism
implications if the rule either imposes substantial direct compliance
costs on State and local governments and is not required by statute, or
the rule preempts State law, unless the agency meets the consultation
and funding requirements of section 6 of the Executive order. This rule
will not have federalism implications and would not impose substantial
direct compliance costs on State and local governments or preempt State
law within the meaning of the Executive order.
Environmental Review
This final rule does not direct, provide for assistance or loan and
mortgage insurance for, or otherwise govern, or regulate, real property
acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this
final rule is categorically excluded from environmental review under
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).
List of Subjects
24 CFR Part 28
Administrative practice and procedure, Claims, Fraud, Penalties.
24 CFR Part 30
Administrative practice and procedure, Grant programs--housing and
community development, Loan programs--housing and community
development, Mortgage insurance, Penalties.
24 CFR Part 87
Government contracts, Grant programs, Loan programs, Lobbying,
Penalties, Reporting and recordkeeping requirements.
24 CFR Part 180
Administrative practice and procedure, Aged, Civil rights, Fair
housing, Investigations, Mortgages, Penalties, Persons with
disabilities, Reporting and recordkeeping requirements.
24 CFR Part 3282
Administrative practice and procedure, Consumer protection,
Intergovernmental relations, Manufactured homes, Reporting and
recordkeeping requirements.
Accordingly, for the reasons described in the preamble, HUD amends
24 CFR parts 28, 30, 87, 180, and 3282 as follows:
PART 28--IMPLEMENTATION OF THE PROGRAM FRAUD CIVIL REMEDIES ACT OF
1986
0
1. The authority citation for part 28 continues to read as follows:
Authority: 28 U.S.C. 2461 note; 31 U.S.C. 3801-3812; 42 U.S.C.
3535(d).
0
2. In Sec. 28.10, revise paragraphs (a)(1) introductory text and
(b)(1) introductory text to read as follows:
[[Page 13044]]
Sec. 28.10 Basis for civil penalties and assessments.
(a) * * *
(1) A civil penalty of not more than $11,665 may be imposed upon
any person who makes, presents, or submits, or causes to be made,
presented, or submitted, a claim that the person knows or has reason to
know:
* * * * *
(b) * * *
(1) A civil penalty of not more than $11,665 may be imposed upon
any person who makes, presents, or submits, or causes to be made,
presented, or submitted, a written statement that:
* * * * *
PART 30--CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT
0
3. The authority citation for part 30 continues to read as follows:
Authority: 12 U.S.C. 1701q-1, 1703, 1723i, 1735f-14, and 1735f-
15; 15 U.S.C. 1717a; 28 U.S.C. 1 note and 2461 note; 42 U.S.C.
1437z-1 and 3535(d).
0
4. In Sec. 30.20, revise paragraph (b) to read as follows:
Sec. 30.20 Ethical violations by HUD employees.
* * * * *
(b) Maximum penalty. The maximum penalty is $20,489 for each
violation.
0
5. In Sec. 30.25, revise paragraph (b) to read as follows:
Sec. 30.25 Violations by applicants for assistance.
* * * * *
(b) Maximum penalty. The maximum penalty is $20,489 for each
violation.
0
6. In Sec. 30.35, revise the first sentence in paragraph (c)(1) to
read as follows:
Sec. 30.35 Mortgagees and lenders.
* * * * *
(c)(1) * * * The maximum penalty is $10,245 for each violation, up
to a limit of $2,048,915 for all violations committed during any one-
year period. * * *
* * * * *
0
7. In Sec. 30.36, revise the first sentence in paragraph (c) to read
as follows:
Sec. 30.36 Other participants in FHA programs.
* * * * *
(c) * * * The maximum penalty is $10,245 for each violation, up to
a limit of $2,048,915 for all violations committed during any one-year
period. * * *
0
8. In Sec. 30.40, revise the first sentence in paragraph (c) to read
as follows:
Sec. 30.40 Loan guarantees for Indian housing.
* * * * *
(c) * * * The maximum penalty is $10,245 for each violation, up to
a limit of $2,048,915 for all violations committed during any one-year
period. * * *
0
9. In Sec. 30.45, revise paragraph (g) to read as follows:
Sec. 30.45 Multifamily and section 202 or 811 mortgagors.
* * * * *
(g) Maximum penalty. The maximum penalty for each violation under
paragraphs (c) and (f) of this section is $51,222.
* * * * *
0
10. In Sec. 30.50, revise the first sentence in paragraph (c) to read
as follows:
Sec. 30.50 GNMA issuers and custodians.
* * * * *
(c) * * * The maximum penalty is $10,245 for each violation, up to
a limit of $2,048,915 during any one-year period. * * *
0
11. In Sec. 30.60, revise paragraph (c) to read as follows:
Sec. 30.60 Dealers or sponsored third-party originators.
* * * * *
(c) Amount of penalty. The maximum penalty is $10,245 for each
violation, up to a limit for any particular person of $2,048,915 during
any one-year period.
0
12. In Sec. 30.65, revise paragraph (b) to read as follows:
Sec. 30.65 Failure to disclose lead-based paint hazards.
* * * * *
(b) Amount of penalty. The maximum penalty is $18,149 for each
violation.
0
13. In Sec. 30.68, revise paragraph (c) to read as follows:
Sec. 30.68 Section 8 owners.
* * * * *
(c) Maximum penalty. The maximum penalty for each violation under
this section is $39,811.
* * * * *
PART 87--NEW RESTRICTIONS ON LOBBYING
0
14. The authority citation for part 87 continues to read as follows:
Authority: 28 U.S.C. 1 note; 31 U.S.C. 1352; 42 U.S.C. 3535(d).
0
15. In Sec. 87.400, revise paragraphs (a), (b), and (e) to read as
follows:
Sec. 87.400 Penalties.
(a) Any person who makes an expenditure prohibited by this part
shall be subject to a civil penalty of not less than $20,489 and not
more than $204,892 for each such expenditure.
(b) Any person who fails to file or amend the disclosure form (see
appendix B of this part) to be filed or amended if required by this
part, shall be subject to a civil penalty of not less than $20,489 and
not more than $204,892 for each such failure.
* * * * *
(e) First offenders under paragraph (a) or (b) of this section
shall be subject to a civil penalty of $20,489, absent aggravating
circumstances. Second and subsequent offenses by persons shall be
subject to an appropriate civil penalty between $20,489 and $204,892 as
determined by the agency head or his or her designee.
* * * * *
PART 180--CONSOLIDATED HUD HEARING PROCEDURES FOR CIVIL RIGHTS
MATTERS
0
16. The authority citation for part 180 continues to read as follows:
Authority: 28 U.S.C. 1 note; 29 U.S.C. 794; 42 U.S.C. 2000d-1,
3535(d), 3601-3619, 5301-5320, and 6103.
0
17. In Sec. 180.671, revise paragraphs (a)(1) through (3) to read as
follows:
Sec. 180.671 Assessing civil penalties for Fair Housing Act cases.
(a) * * *
(1) $21,410, if the respondent has not been adjudged in any
administrative hearing or civil action permitted under the Fair Housing
Act or any state or local fair housing law, or in any licensing or
regulatory proceeding conducted by a Federal, state, or local
governmental agency, to have committed any prior discriminatory housing
practice.
(2) $53,524, if the respondent has been adjudged in any
administrative hearing or civil action permitted under the Fair Housing
Act, or under any state or local fair housing law, or in any licensing
or regulatory proceeding conducted by a Federal, state, or local
government agency, to have committed one other discriminatory housing
practice and the adjudication was made during the 5-year period
preceding the date of filing of the charge.
(3) $107,050, if the respondent has been adjudged in any
administrative hearings or civil actions permitted under the Fair
Housing Act, or under any state or local fair housing law, or in any
licensing or regulatory proceeding conducted by a Federal, state, or
local government agency, to have committed two or more discriminatory
housing
[[Page 13045]]
practices and the adjudications were made during the 7-year period
preceding the date of filing of the charge.
* * * * *
PART 3282--MANUFACTURED HOME PROCEDURAL AND ENFORCEMENT REGULATIONS
0
18. The authority citation for part 3282 continues to read as follows:
Authority: 15 U.S.C. 2697, 42 U.S.C. 3535(d), 5403, and 5424.
0
19. Revise Sec. 3282.10 to read as follows:
Sec. 3282.10 Civil and criminal penalties.
Failure to comply with this part may subject the party in question
to the civil and criminal penalties provided for in section 611 of the
Act, 42 U.S.C. 5410. The maximum amount of penalties imposed under
section 611 of the Act shall be $2,976 for each violation, up to a
maximum of $3,719,428 for any related series of violations occurring
within one year from the date of the first violation.
Dated: February 13, 2020.
J. Paul Compton, Jr.,
General Counsel.
[FR Doc. 2020-04146 Filed 3-5-20; 8:45 am]
BILLING CODE 4210-67-P
