Civil monetary penalties; inflation adjustment,

[Federal Register: January 4, 2005 (Volume 70, Number 2)]

[Rules and Regulations]

[Page 297-298]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr04ja05-10]

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DEPARTMENT OF EDUCATION

34 CFR Part 36

Adjustment of Civil Monetary Penalties for Inflation

AGENCY: Department of Education.

ACTION: Final regulations.

SUMMARY: The Department of Education (Department) issues these final regulations to adjust the Department's civil monetary penalties (CMPs) for inflation.

DATES: These regulations are effective January 4, 2005.

FOR FURTHER INFORMATION CONTACT: Lisa Kanter, Office of the General Counsel, U.S. Department of Education, 400 Maryland Avenue, SW., room 6E205, Washington, DC 20202-2241. Telephone: (202) 401-8300.

If you use a telecommunications device for the deaf (TDD), you may call the Federal Information Relay Service (FIRS) at 1 (800) 877-8339.

Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Adjustment Act of 1990 (Inflation Adjustment Act) (28 U.S.C. 2461 note), as amended by the Debt Collection Improvement Act of 1996 (DCIA) (31 U.S.C. 3701 note), provides for the regular evaluation of CMPs to ensure that they continue to maintain their deterrent value. As amended by the DCIA, the Inflation Adjustment Act requires that each agency issue regulations to adjust its CMPs beginning in 1996 and at least every 4 years thereafter. The Department's initial adjustment to each CMP was published in the Federal Register on November 18, 2002 (67 FR 69654) and became effective on the date of publication. Although it has not been 4 years since the Department's last adjustments, had the Department published adjustments in 1996 and 2000, it would now be time to adjust its CMPs. Accordingly, the Department is now making any necessary adjustments.

A CMP is defined in the statute as any penalty, fine, or other sanction that is (1) for a specific monetary amount as provided by Federal law, or has a maximum amount provided for by Federal law; (2) assessed or enforced by an agency pursuant to Federal law; and (3) assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts.

The formula for the amount of a CMP inflation adjustment is prescribed by law and is not subject to the exercise of discretion by the Secretary of the Department of Education (Secretary). The adjustment reflects the percentage increase in the Consumer Price Index for all urban consumers (CPI-U) published by the Department of Labor from June of the calendar year in which the amount was last set or adjusted pursuant to law, to June of the calendar year preceding the adjustment.

Four of the Department's CMP were adjusted in 2002. These CMPs are (1) 20 U.S.C. 1082(g), which provides for a fine of up to $27,500 for violations by lenders and guaranty agencies of Title IV-B of the Higher Education Act of 1965, as amended (HEA), which authorizes the Federal Family Education Loan Program; (2) 20 U.S.C. 1094(c)(3)(B), which provides for a fine of up to $27,500 for an institution of higher education's violation of Title IV of the HEA, which authorizes various programs of student financial assistance; (3) 31 U.S.C. 1352(c)(1) and (c)(2)(A), which provide for a fine of $11,000 to $110,000 for recipients of Government grants, contracts, etc. that lobby Congress or the Executive Branch with respect to the award of Government grants and contracts; and (4) 31 U.S.C. 3802(a)(1) and (a)(2), which provide for a fine of up to $5,500 for false claims and statements made to the Government. For these four CMPs, not enough inflation has occurred since 2002 to require an adjustment under the Inflation Adjustment Act.

Two of the Department's CMPs were enacted as part of the Higher Education Amendments of 1998 (Pub. L. 105-244). These CMPs are 20 U.S.C. 1015(c)(5), which provides for a fine of up to $25,000 for failure by an institution of higher education (IHE) to provide information on the cost of higher education to the Commissioner of Education Statistics, and 20 U.S.C. 1027(f)(3), which provides for a fine of up to $25,000 for failure by an IHE to provide information to the State and the public regarding its teacher preparation programs. In 2002, when the Department last adjusted its CMPs, not enough inflation had occurred to require an adjustment to these CMPs under the Inflation Adjustment Act. At this time, however, there has been more than 10 percent inflation, warranting an adjustment for each of these CMPs. By statute, the Department's first adjustment of a CMP may not exceed 10 percent of such a penalty, and, therefore, we are adjusting these CMPs by 10 percent.

Two additional points regarding the Department's adjustments are worth noting. First, the Department is using the following CPI-U figures as measures of inflation: 163 for June 1998; 179.9 for June 2002; and 183.7 for June 2003. Second, the increases to the Department's CMPs due to these inflation adjustments apply only to violations that occur after the effective date of the adjustments.

Waiver of Proposed Rulemaking

Under the Administrative Procedure Act (5 U.S.C. 553), the Department generally offers interested parties the opportunity to comment on proposed regulations. However, these regulations merely implement the statutory mandate to adjust CMPs for inflation. The regulations reflect administrative computations performed by the Department as prescribed by the statute and do not establish or affect substantive policy. Therefore, under 5 U.S.C. 553(b)(B), the Secretary has determined that public notice and comment are impracticable, unnecessary, and contrary to the public interest.

Regulatory Flexibility Act Certification

The Secretary certifies that these regulations will not have a significant economic impact on a substantial number of small entities. The formula for the amount of the inflation adjustments is prescribed by statute and is not subject to the exercise of discretion by the Secretary. These CMPs are infrequently imposed by the Secretary, and the regulations do not involve any special considerations that might affect the imposition of CMPs on small entities.

Paperwork Reduction Act of 1995

These regulations do not contain any information collection requirements.

Assessment of Educational Impact

Based on our own review, we have determined that these final regulations do not require transmission of information that any other agency or authority of the United States gathers or makes available.

Electronic Access to This Document

You may view this document, as well as all other documents of this Department published in the Federal Register, in text or Adobe Portable Document Format (PDF) on the Internet at the following site: http://www.ed.gov/news/fedregister .

To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about

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(Catalog of Federal Domestic Assistance Number does not apply)

List of Subjects in 34 CFR Part 36

Claims, Fraud, Penalties.

Dated: December 28, 2004. Eugene W. Hickok, Deputy Secretary of Education.

0 For the reasons discussed in the preamble, the Secretary amends part 36 in title 34 of the Code of Federal Regulations as follows:

PART 36--ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION

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

Authority: 28 U.S.C. 2461 note and 31 U.S.C. 3701 note, unless otherwise noted.

0 2. Section 36.2 is amended by revising Table I to read as follows:

Sec. 36.2 Penalty adjustment.

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Table I, Section 36.2.--Civil Monetary Penalty Inflation Adjustments

New maximum (and minimum, if Statute

Description

applicable) penalty amount

20 U.S.C. 1015(c)(5).......................... Provides for a fine of up $27,500. to $25,000 for failure by an institution of higher education (IHE) to provide information on the cost of higher education to the Commissioner of Education Statistics. 20 U.S.C. 1027(f)(3).......................... Provides for a fine of up $27,500. to $25,000 for failure by an IHE to provide information to the State and the public regarding its teacher-preparation programs. 20 U.S.C. 1082(g)............................. Provides for a civil

$27,500. penalty of up to $25,000 for violations by lenders and guaranty agencies of Title IV-B of the Higher Education Act of 1965, as amended (HEA), which authorizes the Federal Family Education Loan Program. 20 U.S.C. 1094(c)(3)(B)....................... Provides for a civil

$27,500. penalty of up to $25,000. for an institution of higher education's violation of Title IV of the Higher Education Act of 1965, as amended, which authorizes various programs of student financial assistance. 31 U.S.C. 1352(c)(1) and (c)(2)(A)............ Provides for a civil

$11,000 to $110,000. penalty of $10,000 to $100,000 for recipients of Government grants, contracts, etc. that lobby Congress or the Executive Branch with respect to the award of Government grants and contracts. 31 U.S.C. 3802(a)(1) and (a)(2)............... Provides for a civil

$5,500. penalty of up to $5,000. for false claims and statements made to the Government.

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[FR Doc. 05-100 Filed 1-3-05; 8:45 am]

BILLING CODE 4000-01-P