Civil Monetary Penalty Adjustments for Inflation
Federal Register, Volume 81 Issue 127 (Friday, July 1, 2016)
Federal Register Volume 81, Number 127 (Friday, July 1, 2016)
Rules and Regulations
Pages 42987-43006
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2016-15673
Page 42987
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DEPARTMENT OF HOMELAND SECURITY
8 CFR Parts 270, 274a, and 280
Coast Guard
Transportation Security Administration
49 CFR Part 1503
RIN 1601-AA80
Docket No. DHS-2016-0034
Civil Monetary Penalty Adjustments for Inflation
AGENCY: Department of Homeland Security.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule amends Department of Homeland Security (DHS or Department) regulations to adjust DHS and component civil monetary penalties for inflation. DHS calculated the adjusted penalties according to the statutory formula in the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which was signed into law on November 2, 2015. The adjusted penalties will be effective for civil penalties assessed after August 1, 2016 whose associated violations occurred after November 2, 2015.
DATES: Effective Date. This rule is effective on August 1, 2016.
Comment Date: Comments must be received on or before August 1, 2016.
ADDRESSES: You may submit comments, identified by docket number DHS-
2016-0034, by one of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
Mail: Megan Westmoreland, Office of the General Counsel, U.S. Department of Homeland Security, 245 Murray Lane SW., Mail Stop 0485, Washington, DC 20528-0485.
FOR FURTHER INFORMATION CONTACT: Megan Westmoreland, Attorney-Advisor, Office of the General Counsel, U.S. Department of Homeland Security. Phone: 202-447-4384.
SUPPLEMENTARY INFORMATION:
Table of Contents
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Background
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Adjustments by Component
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National Protection and Programs Directorate
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U.S. Customs and Border Protection
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Immigration and Customs Enforcement
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U.S. Coast Guard
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Transportation Security Administration
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Administrative Procedure Act
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Regulatory Analyses
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Executive Orders 12866 and 13563
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Regulatory Flexibility Act
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Unfunded Mandates Reform Act
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Paperwork Reduction Act
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Background
On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74 section 701 (Nov. 2, 2105)) (the 2015 Act),\1\ which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) (the Inflation Adjustment Act), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The 2015 Act requires agencies to: (1) adjust the level of civil monetary penalties with an initial ``catch-up'' adjustment through issuance of an interim final rule (IFR) and (2) make subsequent annual adjustments for inflation.
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\1\ The 2015 Act was enacted as part of the Bipartisan Budget Act of 2015, Public Law 114-74 (Nov. 2, 2015).
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The 2015 Act applies to all agency civil penalties except for any penalty (including any addition to tax and additional amount) under the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) and the Tariff Act of 1930 (19 U.S.C. 1202 et seq.). See sec. 4(a)(1) of the 2015 Act. In the case of DHS, several civil penalties that are collected by U.S. Customs and Border Protection (CBP) and the U.S. Coast Guard fall under the Tariff Act of 1930, and thus DHS is not adjusting those civil penalties in this rulemaking.
The 2015 Act applies the new penalty amounts to all penalties that DHS assesses after August 1, 2016, the effective date of this rule. Additionally, pursuant to 28 U.S.C. 2461 note sec. 6, as amended by the 2015 Act, DHS will apply the adjusted penalty amounts for any violations that occurred after November 2, 2015 (i.e., the date the 2015 Act was signed into law) as long as the penalty is assessed after the effective date of this interim final rule.
The 2015 Act provides a new method for calculating inflation adjustments. The new method differs substantially from the methods that agencies used in the past when conducting inflation adjustments pursuant to the 1990 Inflation Adjustment Act. The new method is intended to more accurately reflect inflation. Previously, when agencies conducted adjustments to civil penalties, they did so under rules that required significant rounding of figures. For example, an agency would round a penalty increase that was greater than $1,000, but less than or equal to $10,000, to the nearest multiple of $1,000. While this allowed penalties to be kept at round numbers, it meant that agencies would often not increase penalties at all if the inflation factor was not large enough. Furthermore, increases to penalties were capped at 10 percent, which meant that longer periods without an inflation adjustment could cause a penalty to rapidly lose value in real terms. Over time, the formula used in the 1990 Inflation Adjustment Act calculations frequently caused penalties to lose value relative to actual inflation. The 2015 Act removed these rounding rules, and instead instructs agencies to round penalties to the nearest $1. While this creates penalty values that are no longer round numbers, it does ensure that agencies will increase penalties each year to a figure commensurate with the actual calculated inflation.
To better reflect the original impact of civil penalties, the 2015 Act ``resets'' the inflation calculations by excluding prior inflationary adjustments under the Inflation Adjustment Act. To do this, the 2015 Act requires agencies to identify, for each penalty, the year that Congress originally enacted the maximum penalty level/range of minimum and maximum penalty levels or the year that the agency last adjusted the penalty amount other than to pursuant to the Inflation Adjustment Act, and the corresponding penalty amount(s). The 2015 Act then requires agencies to perform an initial ``catch-up'' adjustment, using the original amounts of civil penalties as a baseline, so that the 2016 penalty levels are equal, in real terms, to the penalty amounts as they were originally established.
Pursuant to the 2015 Act, DHS undertook a review of the civil penalties that DHS and its components administer. This rule sets forth the initial ``catch-up'' adjustment for all civil penalties that DHS and its components administer. For each component, we have provided a table showing how DHS is increasing the penalties pursuant to the 2015 Act. The table contains the following information:
In the first column (penalty name), we provide a description of the penalty.
In the second column (citation), we provide the statutory cite from the United States Code (U.S.C.) and the regulatory cite from the Code of Federal Regulations (CFR).
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In the third column (current penalty), we list the existing penalty in effect on November 2, 2015.
In the fourth column (baseline penalty (year)), we provide the amount and year of the penalty as enacted by Congress or as last changed through a mechanism other than pursuant to the Inflation Adjustment Act, whichever is later.
In the fifth column (multiplier), we list the multiplier used to adjust the penalty. The multiplier is determined by the year of enactment or last adjustment of the penalty. The multiplier is based upon the Consumer Price Index (CPI-U) for the month of October 2015, not seasonally adjusted.\2\
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\2\ OMB, Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Table A, 24 February 2016. https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
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In the sixth column (preliminary new penalty), we list the amount obtained by multiplying the Baseline Penalty from column 4 with the Multiplier from column 5. This amount will be the final penalty, if, in accordance with the 2015 Act, this level does not increase penalty levels by more than 150 percent of the corresponding levels in effect on November 2, 2015.\3\
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\3\ The 150 percent limitation is on the amount of the increase; therefore, the adjusted penalty levels are up to 250 percent of the levels in effect on November 2, 2015.
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In the seventh column, (adjusted new penalty), we provide the final number for the penalty. To derive this number, we compare the preliminary new penalty with the current penalty from column 3. The adjusted new penalty is the lesser of either the preliminary new penalty or an amount equal to 150 percent more than the current penalty.
Additionally, where applicable, we have also made conforming edits to regulatory text.
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Adjustments by Component
In the following sections, we briefly describe the civil penalties that DHS and its components assess. We describe the nature of the penalties and discuss relevant authorities. We include tables at the end of each section, which list the individual adjustments for each penalty. We also include discussions where we believe further explanation is helpful.
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National Protection and Programs Directorate
The National Protection and Programs Directorate (NPPD) administers only one civil penalty that the 2015 Act affects. This penalty assesses fines for violations of the Chemical Facility Anti-Terrorism Standards (CFATS), a program which regulates the security of chemical facilities that, in the discretion of the Secretary, present high levels of security risk. The CFATS program was originally established in 2007, pursuant to section 550 of the Department of Homeland Security Appropriations Act of 2007 (Pub. L. 109-295),\4\ and is currently located in part 27 of Title 6 of the CFR.
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\4\ Section 550 has since been superseded by the Protecting and Securing Chemical Facilities from Terrorist Attacks Act of 2014 (Pub. L. 113-254). The new legislation codified the statutory authority for the CFATS program within Title XXI of the Homeland Security Act of 2002, as amended. See 6 U.S.C. 621 et seq.
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One question that arose is how to calculate the baseline date of the CFATS penalty, which is $25,000 per day. The question arose because the 2007 legislation, which established CFATS, did not create a new penalty provision, but rather referenced an older one: \5\ Section 70119(a) of Title 46. The Maritime Transportation Security Act (MTSA) (Pub. L. 107-295) was enacted in 2002 and established this penalty provision. For that reason, arguments could be made that we should index the $25,000 penalty by the 2002 CPI value (the date the MTSA penalty was established) or the 2007 CPI value (the date the CFATS program was enacted). The difference between these numbers is material--indexing the $25,000 penalty by the 2002 CPI value would yield a current penalty of $32,796 per day, while indexing the penalty by the 2007 CPI value would yield a current penalty of only $28,458 per day.
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\5\ Section 550(d) of the Department of Homeland Security Appropriations Act of 2007 set forth the CFATS penalty, providing that ``any person who violates an order issued under this section shall be liable for a civil penalty under section 70119(a) of title 46, United States Code. After promulgation of the Protecting and Securing Chemical Facilities from Terrorist Attacks Act of 2014, the relevant U.S.C. citation is 6 U.S.C. 624(b)(1), which still refers to the civil penalty section in 46 U.S.C. 70119(a).
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Because the CFATS legislation did not create a new civil penalty, but rather simply referenced the existing MTSA penalty, we believe the intent of Congress was that violators of either MTSA or CFATS would face identical penalties. For this reason, we have considered the ``baseline'' year for the CFATS penalty to be 2002 rather than 2007, and have increased the penalty by the multiplier appropriate for that year, as shown in Table 1 below.
Table 1--CFATS Civil Penalty Adjustment
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Adjusted new penalty
Preliminary new increase capped at
Penalty name Citation Current penalty Baseline penalty * (year) Multiplier ** penalty multiplier 150% more than
x baseline penalty current penalty
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Penalty for non-compliance with 6 U.S.C. 624(b)(1);............ $25,000 per day................ $25,000 (2002)................ 1.31185 $32,796............. $32,796
CFATS regulations. 6 CFR 27.300(b)(3).............
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* The amount of the penalty and the year of when the penalty was established or last adjusted in statute or regulation other than pursuant to the Inflation Adjustment Act of 1990.
** OMB, Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Table A: 2016 Civil Monetary Penalty Catch-Up Adjustment Multiplier by Calendar Year,
February 24, 2016.
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U.S. Customs and Border Protection
U.S. Customs and Border Protection (CBP) assesses civil monetary penalties for certain violations of title 8 of the CFR regarding the Immigration and Nationality Act of 1952 (Pub. L. 82-414, as amended) (INA). The INA contains provisions that impose penalties on persons, including carriers and aliens, who violate specified provisions of the INA. For example, section 231(g) of the INA, codified at 8 U.S.C. 1221(g), requires that a carrier shall be fined $1,000 for each person for whom manifest information is not provided.
CBP's relevant penalty provisions are located in numerous sections of the INA (see list below), however CBP has
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enumerated these penalties in regulation in one location--in 8 CFR 280.53. Below is the list of penalty provisions in the INA:
Section 231(g), Penalties for non-compliance with arrival and departure manifest requirements for passengers, crewmembers, or occupants transported on commercial vessels or aircraft arriving to or departing from the United States.
Section 234, Penalties for non-compliance with landing requirements at designated ports of entry for aircraft transporting aliens.
Section 240B(d), Penalties for failure to depart voluntarily.
Section 243(c)(1)(A), Penalties for violations of removal orders relating to aliens transported on vessels or aircraft under section 241(d) or for costs associated with removal under section 241(e).
Section 243(c)(1)(B), Penalties for failure to remove alien stowaways under section 241(d)(2).
Section 251(d), Penalties for failure to report an illegal landing or desertion of alien crewmen, and for each alien not reported on arrival or departure manifest or lists required in accordance with section 251 and penalties for use of alien crewmen for longshore work in violation of section 251(d).
Section 254(a), Penalties for failure to control, detain, or remove alien crewmen.
Section 255, Penalties for employment on passenger vessels of aliens afflicted with certain disabilities.
Section 256, Penalties for discharge of alien crewmen.
Section 257, Penalties for bringing into the United States alien crewmen with intent to evade immigration laws.
Section 271(a), Penalties for failure to prevent the unauthorized landing of aliens.
Section 272(a), Penalties for bringing to the United States aliens subject to denial of admission on a health-related ground.
Section 273(b), Penalties for bringing to the United States aliens without required documentation.
Section 274D, Penalties for failure to depart.
Section 275(b), Penalties for improper entry.
We note, for reference, that CBP also assesses certain civil monetary penalties for customs violations under title 19 of the CFR. CBP assesses those penalties under the Tariff Act of 1930, as amended, but as we discussed above, the 2015 Act specifically exempts Tariff Act penalties from the inflation adjustment requirements in the 2015 Act. For that reason, we have not listed those title 19 penalties in the below table of CBP penalty adjustments.
Under this rule, the current penalties continue to be applicable with regard to violations that occurred on or before November 2, 2015, the date of enactment of the 2015 Act. In Table 2 below, we provide the penalties that we are adjusting in accordance with the 2015 Act, where the associated violations occurred after November 2, 2015.
Table 2--U.S. Customs and Border Protection Civil Penalties Adjustments
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Adjusted new penalty
Preliminary new increase capped at
Penalty name Citation Current penalty Baseline penalty * (year) Multiplier ** penalty multiplier 150% more than
x baseline penalty current penalty
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Penalties for non-compliance with 8 U.S.C. 1221(g)............... $1,100......................... $1,000 (2002).................. 1.31185 $1,312.............. $1,312
arrival and departure manifest 8 CFR 280.53(c)(1) (INA section
requirements for passengers, 231(g)).
crewmembers, or occupants
transported on commercial
vessels or aircraft arriving to
or departing from the United
States.
Penalties for non-compliance with 8 U.S.C. 1224.................. $3,200......................... $2,000 (1990).................. 1.78156 $3,563.............. $3,563
landing requirements at 8 CFR 280.53(c)(2) (INA section
designated ports of entry for 234).
aircraft transporting aliens.
Penalties for failure to depart 8 U.S.C. 1229c(d).............. $1,100-$5,500.................. $1,000-$5,000 (1996)........... 1.50245 $1,502-$7,512....... $1,502-$7,512
voluntarily. 8 CFR 280.53(c)(3) (INA section
240B(d)).
Penalties for violations of 8 U.S.C. 1253(c)(1)(A)......... $2,200......................... $2,000 (1996).................. 1.50245 $3,005.............. $3,005
removal orders relating to 8 CFR 280.53(c)(4) (INA section
aliens transported on vessels or 243(c)(1)(A)).
aircraft under section 241(d) of
the INA, or for costs associated
with removal under section
241(e) of the INA.
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Penalties for failure to remove 8 U.S.C. 1253(c)(1)(B)......... $5,500......................... $5,000 (1996).................. 1.50245 $7,512.............. $7,512
alien stowaways under section 8 CFR 280.53(c)(4) (INA section
241(d)(2) of the INA. 243(c)(1)(B)).
Penalties for failure to report 8 U.S.C. 1281(d)............... $320 for each alien............ $200 for each alien (1990)..... 1.78156 $356 for each alien. $356 for each alien
an illegal landing or desertion 8 CFR 280.53(c)(5) (INA section
of alien crewmen, and for each 251(d)).
alien not reported on arrival or
departure manifest or lists
required in accordance with
section 251 of the INA.
Penalties for use of alien 8 U.S.C. 1281(d)............... $7,500......................... $5,000 (1990).................. 1.78156 $8,908.............. $8,908
crewmen for longshore work in 8 CFR 280.53(c)(5) (INA section
violation of section 251(d) of 251(d)).
the INA.
Penalties for failure to control, 8 U.S.C. 1284(a)............... $750-$4,300.................... $500-$3000 (1990).............. 1.78156 $891-$5,345......... $891-$5,345
detain, or remove alien crewmen. 8 CFR 280.53(c)(6) (INA section
254(a)).
Penalties for employment on 8 U.S.C. 1285.................. $1,100......................... $1,000 (1990).................. 1.78156 $1,782.............. $1,782
passenger vessels of aliens 8 CFR 280.53(c)(7) (INA section
afflicted with certain 255).
disabilities.
Penalties for discharge of alien 8 U.S.C. 1286.................. $1,500-$4,300.................. $1,500-$3,000 (1990)........... 1.78156 $2,672-$5,345....... $2,672-$5,345
crewmen. 8 CFR 280.53(c)(8) (INA section
256).
Penalties for bringing into the 8 U.S.C. 1287.................. $16,000........................ $10,000 (1990)................. 1.78156 $17,816............. $17,816
United States alien crewmen with 8 CFR 280.53(c)(9) (INA section
intent to evade immigration laws. 257).
Penalties for failure to prevent 8 U.S.C. Sec. 1321(a)........ $4,300......................... $3,000 (1990).................. 1.78156 $5,345.............. $5,345
the unauthorized landing of 8 CFR 280.53(c)(10) (INA
aliens. section 271(a)).
Penalties for bringing to the 8 U.S.C. Sec. 1322(a)........ $4,300......................... $3,000 (1990).................. 1.78156 $5,345.............. $5,345
United States aliens subject to 8 CFR 280.53(c)(11) (INA
denial of admission on a health- section 272(a)).
related ground.
Penalties for bringing to the 8 U.S.C. Sec. 1323(b)........ $4,300......................... $3,000 (1990).................. 1.78156 $5,345.............. $5,345
United States aliens without 8 CFR 280.53(c)(12) (INA
required documentation. section 273(b)).
Penalties for failure to depart.. 8 U.S.C. 1324d................. $550........................... $500 (1996).................... 1.50245 $751................ $751
8 CFR 280.53(c)(13) (INA
section 274D).
Penalties for improper entry..... 8 U.S.C. Sec. 1325(b)........ $55-275........................ $50-$250 (1996)................ 1.50245 $75-$376............ $75-$376
8 CFR 280.53(c)(14) (INA
section 275(b)).
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* The amount of the penalty and the year of when the penalty was established or last adjusted in statute or regulation other than pursuant to the Inflation Adjustment Act of 1990.
** OMB, Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Table A: 2016 Civil Monetary Penalty Catch-Up Adjustment Multiplier by Calendar Year,
February 24, 2016.
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Immigration and Customs Enforcement
Immigration and Customs Enforcement (ICE) assesses civil monetary penalties for certain employment-related violations arising from the INA. ICE's civil penalties are located in title 8 of the CFR.
There are three different sections in the INA that impose civil monetary penalties for violations of the laws that relate to employment actions (sections 274A, 274B, and 274C). ICE has primary enforcement responsibilities for two of these civil penalty provisions (sections 274A and 274C), and the Department of Justice (DOJ) has enforcement responsibilities for one of these civil penalty provisions (section 274B). The INA, in sections 274A and 274C, provides for imposition of civil penalties for various specified unlawful acts pertaining to the employment eligibility verification process (Form I-9, Employment Eligibility Verification) and the employment of unauthorized aliens. These penalties cover, among other things, the knowing employment of unauthorized aliens and the failure to comply with the employment verification requirements relating to completion of the Form I-9. ICE assesses and imposes civil monetary penalties with respect to employer sanctions under section 274A of the INA and 8 CFR part 274a. Similarly, ICE imposes civil penalties for specified actions relating to immigration-related document fraud under section 274C of the INA and 8 CFR part 270. We note that while ICE is updating the penalty amounts in 8 CFR part 270, ICE has not assessed these penalties in recent years.
Because both DHS and DOJ implement the three employment-related penalty sections in the INA, both Departments are codifying the civil penalty amounts in their implementing regulations. Pursuant to the authority of the Inflation Adjustment Act and before the creation of DHS, DOJ previously adjusted the civil monetary penalties for inflation, increasing the specific amounts stated in sections 274A, 274B, and 274C of the INA. See 64 FR 7066 (Feb. 12, 1999) and 64 FR 47099 (Aug. 30, 1999). Both agencies issued a joint rulemaking to update the penalties in 2008. See 73 FR 10130 (Feb. 26, 2008). Today, as in 2008, the division of responsibilities between the Secretary of Homeland Security and the Attorney General requires action by both Departments in order to effectuate a further adjustment of the civil penalties. The minimum and maximum civil penalty amounts for each violation will necessarily be the same whether DHS or DOJ imposes the penalty. See 8 CFR 274a.10 and 270.3; 28 CFR 68.52(c) and (e).
In this rule, DHS is amending 8 CFR parts 270 and 274a of the DHS regulations to incorporate the revised schedule of civil penalties, as adjusted for inflation according to the statutory formula described above. We note that DOJ is similarly revising regulations in 28 CFR part 68 (which correspond to the penalties in 8 CFR part 270) in a separate civil penalty adjustment rulemaking.
Under this rule, the current penalties continue to be applicable with regard to violations that occurred on or before November 2, 2015, the date of enactment of the 2015 Act. Table 3 below lays out the changes to the penalties, where the associated violations occurred after November 2, 2015.
Table 3--Immigration and Customs Enforcement Civil Penalties Adjustments
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Adjusted new
Preliminary new penalty increase
Penalty name Citation Current penalty Baseline penalty Multiplier penalty capped at 150%
* (year) ** multiplier x more than current
baseline penalty penalty
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Civil penalties for violation 8 CFR 270.3(b)(1)(ii)(A).... $375-$3,200....... $250-$2,000 (1990) 1.78156 $445-$3,563....... $445-$3,563
of Immigration and
Naturalization Act (INA)
sections 274C(a)(1)-(a)(4),
penalty for first offense.
Civil penalties for violation 8 CFR 270.3(b)(1)(ii)(B).... $275-$2,200....... $250-$2,000 (1996) 1.50245 $376-$3,005....... $376-$3,005
of Immigration and
Naturalization Act (INA)
sections 274C(a)(5)-(a)(6),
penalty for first offense.
Civil penalties for violation 8 CFR 270.3(b)(1)(ii)(C).... $3,200-$6,500..... $2,000-$5,000 1.78156 $3,563-$8,908..... $3,563-$8,908
of Immigration and (1990)
Naturalization Act (INA)
sections 274C(a)(1)-(a)(4),
penalty for subsequent
offenses.
Civil penalties for violation 8 CFR 270.3(b)(1)(ii)(D).... $2,200-$5,500..... $2,000-$5,000 1.50245 $3,005-$7,512..... $3,005-$7,512
of Immigration and (1996)
Naturalization Act (INA)
sections 274C(a)(5)-(a)(6),
penalty for subsequent
offenses.
Violation/prohibition of 8 CFR 274a.8(b)............. $1,100............ $1,000 (1986) 2.15628 $2,156............ $2,156
indemnity bonds.
Civil penalties for knowingly 8 CFR 274a.10(b)(1)(ii)(A).. $375-$3,200....... $250-$2,000 (1986) 2.15628 $539-$4,313....... $539-$4,313
hiring, recruiting,
referral, or retention of
unauthorized aliens--Penalty
for first offense (per
unauthorized alien).
Penalty for second offense 8 CFR 274a.10(b)(1)(ii)(B).. $3,200-$6,500..... $2,000-$5,000 2.15628 $4,313-$10,781.... $4,313-$10,781
(per unauthorized alien). (1986)
Penalty for third or 8 CFR 274a.10(b)(1)(ii)(C).. $4,300-$16,000.... $3,000-$10,000 2.15628 $6,469-$21,563.... $6,469-$21,563
subsequent offense (per (1986)
unauthorized alien).
Civil penalties for I-9 8 CFR 274a.10(b)(2)......... $110-$1,100....... $100-$1,000 (1986) 2.15628 $216-$2,156....... $216-$2,156
paperwork violations.
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* The amount of the penalty and the year of when the penalty was established or last adjusted in statute or regulation other than pursuant to the
Inflation Adjustment Act of 1990.
** OMB, Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Table A: 2016 Civil Monetary Penalty Catch-Up
Adjustment Multiplier by Calendar Year, February 24, 2016.
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U.S. Coast Guard
The Coast Guard is adjusting for inflation the penalties in the table in part 27 of title 33 of the CFR. That table identifies the statutes that provide the Coast Guard with civil monetary penalty authority and sets out the inflation-adjusted maximum penalty that the Coast Guard may impose pursuant to each statutory provision. The new table in this regulation provides the current maximum penalty for violations that occurred after November 2, 2015. The penalties in effect for violations on or prior to November 2, 2015 can be found in prior CFR versions that pertain to the date in which the violation occurred. Since the Coast Guard had adjusted the table in part 27 for inflation on several occasions, not just one table can be used for all violations on or before November 2, 2015.
The Coast Guard is authorized to assess close to 150 penalties involving maritime safety and security and environmental stewardship that are critical to the continued success of Coast Guard missions. Various statutes in Title 14, 16, 19, 33, 42, 46, and 49 of the U.S.C. authorize these penalties. Titles 33 and 46 authorize the vast majority of these penalties as these statutes deal with navigation, navigable waters, and shipping.
Under title 33 of the U.S.C., the Coast Guard assesses penalties with respect to bridges, marine events, pollution prevention, oil discharges, sanitation, international navigation, and other environmental stewardship responsibilities. Most notably, the Coast Guard has express joint authority with the Environmental Protection Agency (EPA) to assess penalties in order to enforce the Federal Water Pollution Control Act (Clean Water Act) (CWA), as amended by the Oil Pollution Act of 1990 (OPA 90) (33 U.S.C. 1321 et seq.), and MARPOL Protocol, Annex VI (33 U.S.C. 1908). Penalties under the CWA and OPA 90 relate to the discharge of oil or a hazardous substance from a vessel or facility into or upon the navigable waters of the United States, adjoining shoreline, or into or upon the waters of the contiguous zone. Both agencies may assess penalties for discharges of oil or hazardous substances in connection with activities under the Outer Continental Shelf Lands Act or the Deepwater Port Act. Further, both agencies may assess penalties if a person fails to take mitigation or removal action, or fails to comply with an order of the Federal On-Scene Coordinator. The Coast Guard and EPA delineate enforcement boundaries within each region. Under the Act to Prevent Pollution from Ships (APPS) (33 U.S.C. 1901 et seq.), both of these agencies may assess penalties for any violation of Annex VI, including but not limited to the carriage and use of low-sulfur fuel oil, and vessel engine and emission requirements. While the EPA focuses primarily on engine permit requirements and shoreside facility compliance, the Coast Guard may refer other matters to the EPA for enforcement in accordance with established protocol.
Under title 46 of the U.S.C., the Coast Guard assesses penalties with respect to vessel inspections, vessel operations, manning and training on vessels, marine casualty reporting, drug testing, pilotage, vessel identification, and other aspects of personnel and operations involved in the shipping industry. The majority of civil penalties under this title relate to vessel compliance, which includes general inspection requirements, crew requirements and limitations, and operational requirements of the vessel to engage in a commercial enterprise.
Beyond title 33 and title 46 of the U.S.C., the Coast Guard assesses penalties related to the organization and management of the Coast Guard, aquatic species conservation, obstruction of revenue, and hazardous substances and materials. Most notably, the Coast Guard has joint authority with EPA under title 42 of the U.S.C. to assess penalties for hazardous substances. Under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) (42 U.S.C. 9601 et seq.), the Coast Guard may assess penalties for the failure to meet the notification requirements, failure to provide evidence of financial responsibility, or failure to follow an administrative order, among other violations. The Coast Guard has the primary responsibility to enforce the laws on navigational waterways.
As evidenced by the table below, the current inflation adjustment imposes a substantial change in many of the civil penalties administered by the Coast Guard. Part of the reason for the changes are that the enactment dates for penalties assessed by the Coast Guard vary widely, spanning from 1935 to 2014. Furthermore, the penalty amounts vary widely, spanning up to $250,000. Under the 2015 Act, and as mentioned elsewhere in this preamble, Congress has created a straightforward method for calculating the amount of the inflation allowable for each penalty.
While the increases due to inflation are, for some penalties, substantial, not all penalties will be equivalent to their original value in real terms. Pursuant to the 2015 Act, the Coast Guard cannot increase any penalty by more than 150% of the previously adjusted penalty. As the Coast Guard last adjusted penalties for inflation on June 2, 2011 (76 FR 31831), it cannot adjust any penalty by more than 150% of the amount set by the final rule of June 2, 2011. After the Coast Guard used the new method and applied the 150% cap, they increased the penalties by an amount of 3% to 150% above the last adjustment. Of those penalties that the Coast Guard is increasing in this rulemaking, approximately 23 of the penalties are increasing more than 100% from their 2011 value, and the 2015 Act limits the amount that they can increase to 150% of the 2011 value. All of the penalties that Congress or the Coast Guard enacted prior to 1980 are increasing more than 100%. This is due to the great difference between the CPI-U level from the years enacted and the CPI-U from October 2015.
There were three penalties that decreased in value from their previous amounts. These penalties (codified in 46 U.S.C. App. 1505(a)(2), 46 U.S.C. App. 1805(c)(2), and 42 U.S.C. 12151(c)) showed significant decreases. These changes occurred because Congress recodified these penalties in 2006 after the Coast Guard adjusted them for inflation. Using the 2006 recodification as the new statutory baseline, the penalty amounts declined significantly in this rulemaking from their current values.
Finally, we are adding several penalties to the existing table in 33 CFR 27.3 that had been inadvertently omitted from regulatory text. These penalties include a penalty for intentional interference with a broadcast (codified at 14 U.S.C. 88(e)), a clean hulls penalty for recreational and commercial vessels (33 U.S.C. 3852(c)), vessel documentation relating to mobile offshore drilling units (46 U.S.C. 12151(a)(2), and hazardous material training penalties (49 U.S.C. 5123(a)(3)).
Page 42993
Table 4--U.S. Coast Guard Civil Penalties Adjustments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted new
Baseline penalty Preliminary new penalty increase
Penalty name Citation Current penalty * (year) Multiplier penalty capped at 150%
(statutory ** multiplier x more than current
citation) baseline penalty penalty
--------------------------------------------------------------------------------------------------------------------------------------------------------
Saving Life and Property..... 14 U.S.C. 88(c)............. $10,000........... $10,000........... 1.00171 $10,017........... $10,017
(2014)............
(Pub. L. 113-281).
Saving Life and Property; 14 U.S.C. 88(e)............. 1,000............. $1,000............ 1.02819 1,028............. 1,028
Intentional Interference (2012)............
with Broadcast. (Pub. L. 112-213).
Confidentiality of Medical 14 U.S.C. 645(i); 33 CFR 4,000............. $3,000............ 1.67728 5,032............. 5,032
Quality Assurance Records 27.3. (1992)............
(first offense). (Pub. L. 102-587).
Confidentiality of Medical 14 U.S.C. 645(i); 33 CFR 30,000............ $20,000........... 1.67728 33,546............ 33,546
Quality Assurance Records 27.3. (1992)............
(subsequent offenses). (Pub. L. 102-587).
Aquatic Nuisance Species in 16 U.S.C. 4711(g)(1); 33 CFR 35,000............ $25,000........... 1.50245 37,561............ 37,561
Waters of the United States. 27.3. (1996)............
(Pub. L. 104-332).
Obstruction of Revenue 19 U.S.C. 70; 33 CFR 27.3... 3,000............. $2,000............ 17.36044 34,721............ 7,500
Officers by Masters of (1935)............
Vessels.
Obstruction of Revenue 19 U.S.C. 70; 33 CFR 27.3... 700............... $500.............. 17.36044 8,680............. 1,750
Officers by Masters of (1935)............
Vessels--Minimum Penalty.
Failure to Stop Vessel When 19 U.S.C. 1581(d)........... 5,000............. $5,000............ N/A N/A............... *** 5,000
Directed; Master, Owner, (1930)............
Operator or Person in Charge.
Failure to Stop Vessel When 19 U.S.C. 1581(d)........... 1,000............. $1,000............ N/A N/A............... *** 1,000
Directed; Master, Owner, (1930)............
Operator or Person in
Charge--Minimum Penalty.
Anchorage Ground/Harbor 33 U.S.C. 471; 33 CFR 27.3.. 110............... $10,000........... 1.08745 10,875............ 10,875
Regulations General. (2010)............
(Pub. L. 111-281).
Anchorage Ground/Harbor 33 U.S.C. 474; 33 CFR 27.3.. 300............... $200.............. 11.43452 2,287............. 750
Regulations St. Mary's river. (1946)............
(11 FR 7875)......
Bridges/Failure to Comply 33 U.S.C. 495(b); 33 CFR 25,000............ $25,000........... 1.09819 27,455............ 27,455
with Regulations. 27.3. (2008)............
(Pub. L. 108-293).
Bridges/Drawbridges.......... 33 U.S.C. 499(c); 33 CFR 25,000............ $25,000........... 1.09819 27,455............ 27,455
27.3. (2008)............
(Pub. L. 108-293).
Bridges/Failure to Alter 33 U.S.C. 502(c); 33 CFR 25,000............ $25,000........... 1.09819 27,455............ 27,455
Bridge Obstructing 27.3. (2008)............
Navigation. (Pub. L. 108-293).
Bridges/Maintenance and 33 U.S.C. 533(b); 33 CFR 25,000............ $25,000........... 1.09819 27,455............ 27,455
Operation. 27.3. (2008)............
(Pub. L. 108-293).
Bridge to Bridge 33 U.S.C. 1208(a); 33 CFR 800............... $500.............. 5.81511 2,908............. 2,000
Communication; Master, 27.3. (1971)............
Person in Charge or Pilot. (Pub. L. 92-63)...
Bridge to Bridge 33 U.S.C. 1208(b); 33 CFR 800............... $500.............. 5.81511 2,908............. 2,000
Communication; Vessel. 27.3. (1971)............
(Pub. L. 92-63)...
PWSA Regulations............. 33 U.S.C. 1232(a); 33 CFR 40,000............ $25,000........... 3.54453 88,613............ 88,613
27.3. (1978)............
(Pub. L. 95-474)..
Vessel Navigation: Regattas 33 U.S.C. 1236(b); 33 CFR 8,000............. $5,000............ 1.78156 8,908............. 8,908
or Marine Parades; 27.3. (1990)............
Unlicensed Person in Charge. (Pub. L. 101-380).
Vessel Navigation: Regattas 33 U.S.C. 1236(c); 33 CFR 8,000............. $5,000............ 1.78156 8,908............. 8,908
or Marine Parades; Owner 27.3. (1990)............
Onboard Vessel. (Pub. L. 101-380).
Vessel Navigation: Regattas 33 U.S.C. 1236(d); 33 CFR 3,000............. $2,500............ 1.78156 4,454............. 4,454
or Marine Parades; Other 27.3. (1990)............
Persons. (Pub. L. 101-380).
Page 42994
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(6)(B)(i); 15,000............ $10,000........... 1.78156 17,816............ 17,816
Discharges (Class I per 33 CFR 27.3. (1990)............
violation). (Pub. L. 101-380).
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(6)(B)(i); 40,000............ $25,000........... 1.78156 44,539............ 44,539
Discharges (Class I total 33 CFR 27.3. (1990)............
under paragraph). (Pub. L. 101-380).
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(6)(B)(ii); 15,000............ $10,000........... 1.78156 17,816............ 17,816
Discharges (Class II per day 33 CFR 27.3. (1990)............
of violation). (Pub. L. 101-380).
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(6)(B)(ii); 190,000........... $125,000.......... 1.78156 222,695........... 222,695
Discharges (Class II total 33 CFR 27.3. (1990)............
under paragraph). (Pub. L. 101-380).
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(7)(A); 33 40,000............ $25,000........... 1.78156 44,539............ 44,539
Discharges (per day of CFR 27.3. (1990)............
violation) Judicial (Pub. L. 101-380).
Assessment.
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(7)(A); 33 1,100............. $1,000............ 1.78156 1,782............. 1,782
Discharges (per barrel of CFR 27.3. (1990)............
oil or unit discharged) (Pub. L. 101-380).
Judicial Assessment.
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(7)(B); 33 40,000............ $25,000........... 1.78156 44,539............ 44,539
Failure to Carry Out Removal/ CFR 27.3. (1990)............
Comply With Order (Judicial (Pub. L. 101-380).
Assessment).
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(7)(C); 33 40,000............ $25,000........... 1.78156 44,539............ 44,539
Failure to Comply with CFR 27.3. (1990)............
Regulation Issued Under (Pub. L. 101-380).
1321(j) (Judicial
Assessment).
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(7)(D); 33 4,000............. $3,000............ 1.78156 5,345............. 5,345
Discharges, Gross Negligence CFR 27.3. (1990)............
(per barrel of oil or unit (Pub. L. 101-380).
discharged) Judicial
Assessment.
Oil/Hazardous Substances: 33 U.S.C. 1321(b)(7)(D); 33 130,000........... $100,000.......... 1.78156 178,156........... 178,156
Discharges, Gross CFR 27.3. (1990)............
Negligence--Minimum Penalty (Pub. L. 101-380).
(Judicial Assessment).
Marine Sanitation Devices; 33 U.S.C. 1322(j); 33 CFR 3,000............. $2,000............ 5.62265 11,245............ 7,500
Operating. 27.3. (1972)............
(Pub. L. 92-500)..
Marine Sanitation Devices; 33 U.S.C. 1322(j); 33 CFR 8,000............. $5,000............ 5.62265 28,113............ 20,000
Sale or Manufacture. 27.3. (1972)............
(Pub. L. 92-500)..
International Navigation 33 U.S.C. 1608(a); 33 CFR 8,000............. $5,000............ 2.80469 14,023............ 14,023
Rules; Operator. 27.3. (1980)............
(Pub. L. 96-591)..
International Navigation 33 U.S.C. 1608(b); 33 CFR 8,000............. $5,000............ 2.80469 14,023............ 14,023
Rules; Vessel. 27.3. (1980)............
(Pub. L. 96-591)..
Pollution from Ships; General 33 U.S.C. 1908(b)(1); 33 CFR 40,000............ $25,000........... 2.80469 70,117............ 70,117
27.3. (1980)............
(Pub. L. 96-478)..
Pollution from Ships; False 33 U.S.C. 1908(b)(1); 33 CFR 8,000............. $5,000............ 2.80469 14,023............ 14,023
Statement. 27.3. (1980)............
(Pub. L. 96-478)..
Inland Navigation Rules; 33 U.S.C. 2072(a); 33 CFR 8,000............. $5,000............ 2.80469 14,023............ 14,023
Operator. 27.3. (1980)............
(Pub. L. 96-591)..
Inland Navigation Rules; 33 U.S.C. 2072(b); 33 CFR 8,000............. $5,000............ 2.80469 14,023............ 14,023
Vessel. 27.3. (1980)............
(Pub. L. 96-591)..
Shore Protection; General.... 33 U.S.C. 2609(a); 33 CFR 40,000............ $25,000........... 1.97869 49,467............ 49,467
27.3. (1988)............
(Pub. L. 100-688).
Shore Protection; Operating 33 U.S.C. 2609(b); 33 CFR 15,000............ $10,000........... 1.97869 19,787............ 19,787
Without Permit. 27.3. (1988)............
(Pub. L. 100-688).
Oil Pollution Liability and 33 U.S.C. 2716a(a); 33 CFR 40,000............ $25,000........... 1.78156 44,539............ 44,539
Compensation. 27.3. (1990)............
(Pub. L. 101-380).
Page 42995
Clean Hulls.................. 33 U.S.C. 3852(a)(1)(A); 33 37,500............ $37,500........... 1.08745 40,779............ 40,779
CFR 27.3. (2010)............
(Pub. L. 111-281).
Clean Hulls--related to false 33 U.S.C. 3852(a)(1)(A); 33 50,000............ $50,000........... 1.08745 54,373............ 54,373
statements. CFR 27.3. (2010)............
(Pub. L. 111-281).
Clean Hulls--Recreational 33 U.S.C. 3852(c); 33 CFR 5,000............. $5,000............ 1.08745 5,437............. 5,437
Vessel. 27.3. (2010)............
(Pub. L. 111-281).
Hazardous Substances, 42 U.S.C. 9609(a); 33 CFR 35,000............ $25,000........... 2.15628 53,907............ 53,907
Releases, Liability, 27.3. (1986)............
Compensation (Class I). (Pub. L. 99-499)..
Hazardous Substances, 42 U.S.C. 9609(b); 33 CFR 35,000............ $25,000........... 2.15628 53,907............ 53,907
Releases, Liability, 27.3. (1986)............
Compensation (Class II). (Pub. L. 99-499)..
Hazardous Substances, 42 U.S.C. 9609(b); 33 CFR 100,000........... $75,000........... 2.15628 161,721........... 161,721
Releases, Liability, 27.3. (1986)............
Compensation (Class II (Pub. L. 99-499)..
subsequent offense).
Hazardous Substances, 42 U.S.C. 9609(c); 33 CFR 35,000............ $25,000........... 2.15628 53,907............ 53,907
Releases, Liability, 27.3. (1986)............
Compensation (Judicial (Pub. L. 99-499)..
Assessment).
Hazardous Substances, 42 U.S.C. 9609(c); 33 CFR 100,000........... $75,000........... 2.15628 161,721........... 161,721
Releases, Liability, 27.3. (1986)............
Compensation (Judicial (Pub. L. 99-499)..
Assessment subsequent
offense).
Safe Containers for 46 U.S.C. App 1505(a)(2) 8,000............. $5,000............ 1.17858 5,893............. 5,893
International Cargo. (codified as 46 USC 80509); (2006)............
33 CFR 27.3. (Pub. L. 109-304).
Suspension of Passenger 46 U.S.C. App 1805(c)(2) 70,000............ $50,000........... 1.17858 58,929............ 58,929
Service. (codified 46 USC 70305); 33 (2006)............
CFR 27.3. (Pub. L. 109-304;
Vessel Inspection or 46 U.S.C. 2110(e); 33 CFR 8,000............. $5,000............ 1.78156 8,908............. 8,908
Examination Fees. 27.3. (1990)............
(Pub. L. 101-508).
Alcohol and Dangerous Drug 46 U.S.C. 2115; 33 CFR 27.3. 7,000............. $5,000............ 1.45023 7,251............. 7,251
Testing. (1998)............
(Pub. L. 105-383).
Negligent Operations: 46 U.S.C. 2302(a); 33 CFR 6,000............. $5,000............ 1.31185 6,559............. 6,559
Recreational Vessels. 27.3. (2002)............
(Pub. L. 107-295).
Negligent Operations: Other 46 U.S.C. 2302(a); 33 CFR 30,000............ $25,000........... 1.31185 32,796............ 32,796
Vessels. 27.3. (2002)............
(Pub. L. 107-295).
Operating a Vessel While 46 U.S.C. 2302(c)(1); 33 CFR 7,000............. $5,000............ 1.45023 7,251............. 7,251
Under the Influence of 27.3. (1998)............
Alcohol or a Dangerous Drug. (Pub. L. 105-383).
Vessel Reporting 46 U.S.C. 2306(a)(4); 33 CFR 8,000............. $5,000............ 2.25867 11,293............ 11,293
Requirements: Owner, 27.3. (1984)............
Charterer, Managing (Pub. L. 98-498)..
Operator, or Agent.
Vessel Reporting 46 U.S.C. 2306(b)(2); 33 CFR 1,100............. $1,000............ 2.25867 2,259............. 2,259
Requirements: Master. 27.3. (1984)............
(Pub. L. 98-498)..
Immersion Suits.............. 46 U.S.C. 3102(c)(1); 33 CFR 8,000............. $5,000............ 2.25867 11,293............ 11,293
27.3. (1984)............
(Pub. L. 98-623)..
Inspection Permit............ 46 U.S.C. 3302(i)(5); 33 CFR 1,100............. $1,000............ 2.35483 2,355............. 2,355
27.3. (1983)............
(Pub. L. 98-89)...
Vessel Inspection; General... 46 U.S.C. 3318(a); 33 CFR 8,000............. $5,000............ 2.25867 11,293............ 11,293
27.3. (1984)............
(Pub. L. 98-498)..
Vessel Inspection; Nautical 46 U.S.C. 3318(g); 33 CFR 8,000............. $5,000............ 2.25867 11,293............ 11,293
School Vessel. 27.3. (1984)............
(Pub. L. 98-498)..
Vessel Inspection; Failure to 46 U.S.C. 3318(h); 33 CFR 1,100............. $1,000............ 2.25867 2,259............. 2,259
Give Notice IAW 3304(b). 27.3. (1984)............
(Pub. L. 98-498)..
Page 42996
Vessel Inspection; Failure to 46 U.S.C. 3318(i); 33 CFR 1,100............. $1,000............ 2.25867 2,259............. 2,259
Give Notice IAW 3309(c). 27.3. (1984)............
(Pub. L. 98-498)..
Vessel Inspection; Vessel 46 U.S.C. 3318(j)(1); 33 CFR 15,000............ $10,000........... 2.25867 22,587............ 22,587
>=1600 Gross Tons. 27.3. (1984)............
(Pub. L. 98-498)..
Vessel Inspection; Vessel 46 U.S.C. 3318(j)(1); 33 CFR 3,000............. $2,000............ 2.25867 4,517............. 4,517
=1600 Gross Tons. 22,587
46 U.S.C. 3318(j)(1).............................. Vessel Inspection; Vessel
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