Civil Monetary Penalty Inflation Adjustment Rule
Federal Register, Volume 83 Issue 85 (Wednesday, May 2, 2018)
Federal Register Volume 83, Number 85 (Wednesday, May 2, 2018)
Rules and Regulations
Pages 19180-19184
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2018-09316
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DEPARTMENT OF DEFENSE
Department of the Army, Corps of Engineers
33 CFR Part 326
RIN 0710-AA77
Civil Monetary Penalty Inflation Adjustment Rule
AGENCY: U.S. Army Corps of Engineers, Department of Defense.
ACTION: Final rule.
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SUMMARY: The U.S. Army Corps of Engineers (Corps) is issuing this final rule to adjust its civil monetary penalties under the Clean Water Act (CWA) and the National Fishing Enhancement Act to account for inflation. This action is mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act), which requires agencies to adjust the levels of civil monetary penalties with an initial ``catch-up'' adjustment followed by annual adjustments for inflation. The Inflation Adjustment Act prescribes a formula for adjusting statutory civil penalties to reflect inflation, maintain the deterrent effect of statutory civil penalties, and promote compliance with the law. Using the adjustment criteria provided in the December 15, 2017, Office of Management and Budget Memorandum regarding the ``Implementation of Penalty Inflation Adjustments for 2018, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015'', the 2018 annual adjustment for inflation will increase the Class I civil penalty under Section 309 of the Clean Water Act to $21,394 per violation, and the maximum civil penalty increases to $53,484. The judicial civil penalty under Section 404(s) of the Clean Water Act increases to $53,484 per day for each violation. Under the National Fishing Enhancement Act, the Class I civil penalty increases to $23,426 per violation.
DATES: This final rule is effective on May 2, 2018.
FOR FURTHER INFORMATION CONTACT: Ms. Stacey M. Jensen at 202-761-5856 or by email at email protected or access the U.S. Army Corps of Engineers Regulatory Home Page at http://www.usace.army.mil/Missions/CivilWorks/RegulatoryProgramandPermits.aspx.
SUPPLEMENTARY INFORMATION:
Executive Summary
The Corps is publishing this final rule to adjust its civil monetary penalties for inflation pursuant to the Inflation Adjustment Act. This law requires the Corps to publish annual adjustments for inflation. The purpose of the Inflation Adjustment Act is to maintain the deterrent effect of civil penalties by translating originally enacted statutory civil penalty amounts to today's dollars and rounding statutory civil penalties to the nearest dollar. The Inflation Adjustment Act required agencies to publish annual adjustments beginning no later than January 15 of each calendar year. Accordingly, the Corps is providing the second annual adjustment effective May 2, 2018, in this final rule. The rule will apply prospectively, to penalty assessments beginning on its effective date. Subsequently, the Corps intends to continue to publish annual adjustments as required by the Inflation Adjustment Act, no later than January 15 of each calendar year.
The Inflation Adjustment Act does not require agencies to implement the required adjustments through a notice and comment process unless proposing an adjustment of less than the amount otherwise required, and the Corps is not exercising any discretion it may have to make a lesser adjustment. For the annual adjustments, the Inflation Adjustment Act provides a clear formula for adjustment of the civil penalties, and the Corps has no discretion to vary the amount of the adjustment to reflect any views or suggestions provided by commenters. The Inflation Adjustment Act further provides that the increased penalty levels apply to penalties assessed after the effective date of the increase. For these reasons, the Corps finds that notice and comment would be impracticable and unnecessary in this situation and contrary to the language of the Inflation Adjustment Act.
Section 4 of the Inflation Adjustment Act directs federal agencies to publish annual penalty inflation adjustments. In accordance with Section 553 of the Administrative Procedures Act (APA), most rules are subject to notice and comment and are effective no earlier than 30 days after publication in the Federal Register. Section 4(b)(2) of the Inflation Adjustment Act further provides that each agency shall make the annual inflation adjustments ``notwithstanding section 553'' of the APA. According to the December 2017 OMB guidance issued to Federal agencies on the implementation of the 2018 annual adjustment, the phrase ``notwithstanding section 553'' means that ``the public procedure the APA generally requires--notice, an opportunity for comment, and a delay in effective date--is not required for agencies to issue regulations implementing the annual adjustment.'' Consistent with the language of the Inflation Adjustment Act and OMB's implementation guidance, this rule is not subject to notice and opportunity for public comment.
Background
On August 3, 2011, the Deputy Secretary of Defense delegated to the Secretary of the Army the authority and responsibility to adjust penalties administered by the U.S. Army Corps of Engineers. On August 29, 2011, the Secretary of the Army delegated that authority and responsibility to the Assistant Secretary of the Army for Civil Works.
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On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Public Law 114-74, 701 (Inflation Adjustment Act), which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 as previously amended by the 1996 Debt Collection Improvement Act (DCIA; collectively, ``prior inflation adjustment Acts''), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The Inflation Adjustment Act requires agencies to do the following: (1) Adjust the level of civil monetary penalties with an initial ``catch-up'' adjustment, through a final rule to be published by July 1, 2016; and (2) beginning no later than January 15, 2017, make subsequent annual adjustments for inflation. The Inflation Adjustment Act does not alter an agency's statutory authority, to the extent it exists, to assess penalties below the maximum level. The final rule implementing the initial ``catch-up'' adjustment mandated by the Inflation Adjustment Act as well as the 2017 annual inflation adjustment mandated by the Act was effective on December 12, 2017. This final rule fulfills the requirement for the 2018 annual inflation adjustment and is effective on May 2, 2018.
The Inflation Adjustment Act amends prior inflation adjustment Acts by substantially revising the method of calculating inflation adjustments. Prior inflation adjustment Acts required adjustments to civil penalties to be rounded significantly. For example, a penalty increase that was greater than $1,000, but less than or equal to $10,000, would be rounded to the nearest multiple of $1,000. While this allowed penalties to be kept at round numbers, it meant that agencies often would 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, this formula caused agency civil penalties to lose value relative to total inflation, thereby undermining Congress' original purpose in enacting statutory civil monetary penalties to be a deterrent and to promote compliance with the law. The Inflation Adjustment Act has removed these rounding rules. Penalties now are simply rounded to the nearest dollar. This rounding ensures that penalties will be increased each year to more effectively keep up with inflation.
The Inflation Adjustment Act required a ``catch-up'' adjustment that reset the inflation calculations by excluding prior inflationary adjustments under prior inflation adjustment Acts, and subsequent, annual adjustments to all civil penalties under the laws implemented by that agency. With this rule, the new statutory maximum penalty levels listed in Table 1 will apply to all statutory civil penalties assessed on or after the effective date of this rule.
Table 1 shows the calculation of the 2018 annual inflation adjustment based on the guidance provided by OMB (see December 15, 2017, Memorandum for the Heads of Executive Departments and Agencies, from Mick Mulvaney, Director, OMB, Subject: Implementation of Penalty Inflation Adjustments for 2018, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015). The OMB provided to agencies the cost-of-living adjustment multiplier for 2018, based on the CPI-U for the month of October 2017, not seasonally adjusted, which is 1.02041. Agencies are to adjust ``the maximum civil monetary penalty or the range of minimum and maximum civil monetary penalties, as applicable, for each civil monetary penalty by the cost-of-living adjustment.'' For 2018, agencies multiply each applicable penalty by the multiplier, 1.02041, and round to the nearest dollar. The multiplier should be applied to the most recent penalty amount, i.e., the one that includes the initial catch-up adjustment mandated by the Inflation Adjustment Act as well as the 2017 annual inflation adjustment. Column (1) contains the United States Code citations for the penalty statute. Column (2) contains the dollar amount most recently established by law (other than prior inflation adjustment Acts) for each civil monetary penalty. Column (3) in Table 1 sets out the penalty levels which were in effect prior to this rulemaking. Column (4) in Table 1 sets out the 2018 Inflation Adjustment Multiplier while Column (5) sets out the new penalty levels which take effect upon publication of this final rule in the Federal Register.
Table 1
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Current civil
monetary penalty Current CMP amount 2018 inflation CMP amount as of
Citation (CMP) amount in effect prior to adjustment May 2, 2018
established by law this rulemaking multiplier
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CWA, 33 U.S.C. 1319(g)(2)(A)..... $10,000 per $20,966 per 1.02041 $21,394 per
violation, with a violation, with a violation, with a
maximum of $25,000. maximum of $52,414. maximum of
$53,484.
CWA, 33 U.S.C. 1344(s)(4)........ Maximum of $25,000 Maximum of $52,414 1.02041 Maximum of $53,484
per day for each per day for each per day for each
violation. violation. violation.
National Fishing Enhancement Act, Maximum of $10,000 Maximum of $22,957 1.02041 Maximum of $23,426
33 U.S.C. 2104(e). per violation. per violation. per violation.
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In summary, under this final rule the minimum Class I civil penalty for violations under CWA Section 309(g)(2)(A), 33 U.S.C. 1319(g)(2)A), will increase from $20,966 per violation to $21,394, and the maximum penalty will increase from $52,414 per violation to $53,484. Judicially-imposed civil penalties under CWA Section 404(s)(4), 33 U.S.C. 1344(s)(4), will increase from a maximum of $52,414 per day for each violation to $53,484. Finally, the Class I civil penalty for violations of Section 205(e) of the National Fishing Enhancement Act, 33 U.S.C. 2104(e), will increase from a maximum of $22,957 per violation to $23,426.
This rule will not result in any additional costs to implement the Corps Regulatory Program because the Class I civil penalties and judicial civil penalties have been in effect since 1990 when the Corps first promulgated regulations regarding such penalties (Class I civil penalties were first established by statute in 1987). This rule merely adjusts the value of current statutory civil penalties to reflect and keep pace with the levels originally set by Congress when the statutes were enacted, as required by the Inflation Adjustment Act. This rule will result in additional costs to members of the regulated public who do not comply with the terms and conditions of issued Department of the Army permits and either receive a final Class I civil administrative penalty order from a District Engineer or are subject to a
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judicial civil penalty. The rule increases the minimum and maximum penalty amounts to $21,394 and $53,484 for Class I civil administrative penalties under the Clean Water Act, to a maximum of $53,484 for judicially-imposed civil penalties under the Clean Water Act, and to a maximum of $23,426 for Class I civil administrative penalties under the National Fishing Enhancement Act. The benefit of this rule will be to improve the effectiveness of Corps civil monetary penalties by maintaining their deterrent effect and promoting compliance with the law.
Administrative Requirements
Plain Language
In compliance with the principles in the President's Memorandum of June 1, 1998, regarding plain language, this preamble is written using plain language. The use of ``we'' in this notice refers to the Corps and the use of ``you'' refers to the reader. We have also used the active voice, short sentences, and common everyday terms except for necessary technical terms.
Paperwork Reduction Act
This final rule will not impose any new information collection burden under the provisions of the Paperwork Production Act (44 U.S.C. 3501 et seq.). This action merely increases the level of statutory civil penalties that could be imposed in the context of a federal civil administrative enforcement action or civil judicial case for violations of Corps-administered statutes and their implementing regulations.
Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. For the Corps regulatory program under Section 10 of the Rivers and Harbors Act of 1899, Section 404 of the Clean Water Act, and Section 103 of the Marine Protection, Research and Sanctuaries Act of 1972, the current OMB approval number for information requirements is maintained by the Corps of Engineers (OMB approval number 0710-0003). However, there are no new approval or application processes required as a result of this rulemaking that necessitate a new Information Collection Request (ICR). The regulation would not impose reporting or recordkeeping requirements. Therefore, this action is not subject to the Paperwork Reduction Act.
Executive Order 12866 and Executive Order 13563, ``Improving Regulation and Regulatory Review''
The OMB has not designated this final rule a ``significant regulatory action'' under Executive Order 12866. Accordingly, OMB has not reviewed this rule. Moreover, this final rule makes nondiscretionary adjustments to existing civil monetary penalties in accordance with the Inflation Adjustment Act and OMB guidance. The Corps, therefore, did not consider alternatives and does not have the flexibility to alter the adjustments of the civil monetary penalty amounts as provided in this rule. To the extent this rule increases civil monetary penalties, it would result in an increase in transfers from persons or entities assessed a civil monetary penalty to the government.
Executive Order 13132
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 10, 1999), requires the Corps to develop an accountable process to ensure ``meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications.'' The phrase ``policies that have Federalism implications'' is defined in the Executive Order to include regulations that have ``substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.''
This rule does not have Federalism implications. This nondiscretionary action is required by the Inflation Adjustment Act and will have no substantial direct effects on the States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, Executive Order 13132 does not apply to this rule.
Regulatory Flexibility Act (RFA), as Amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq.
The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice-and-comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations and small governmental jurisdictions.
The Regulatory Flexibility Act applies only to rules subject to notice-and-comment rulemaking requirements under the Administrative Procedure Act, 5 U.S.C. 553, or any other statute. See 5 U.S.C. 601-
612. The Regulatory Flexibility Act does not apply to this final rule because a notice-and-comment rulemaking process is not required for the reasons stated above.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under Section 202 of the UMRA, the agencies generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``Federal mandates'' that may result in expenditures to State, local, and Tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating a rule for which a written statement is needed, section 205 of the UMRA generally requires the agencies to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows the Corps to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the agency publishes with the final rule an explanation why that alternative was not adopted. Before the Corps establishes any regulatory requirements that may significantly or uniquely affect small governments, including Tribal governments, they must have developed under Section 203 of the UMRA a small
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government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.
We have determined that this final rule does not impose new substantive requirements and therefore does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and Tribal governments, in the aggregate, or the private sector in any one year. Therefore, this rule is not subject to the requirements of Sections 202 and 205 of the UMRA. For the same reasons, we have determined that this final rule contains no regulatory requirements that might significantly or uniquely affect small governments. Therefore, this final rule is not subject to the requirements of Section 203 of UMRA. Therefore, no actions are deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs us to use voluntary consensus standards in our regulatory activities, unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs us to provide Congress, through OMB, explanations when we decide not to use available and applicable voluntary consensus standards.
This rule does not involve technical standards. Therefore, we did not consider the use of any voluntary consensus standards.
Executive Order 13045
Executive Order 13045, ``Protection of Children from Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is determined to be ``economically significant'' as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that we have reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, we must evaluate the environmental health or safety effects of the rule on children, and explain why the regulation is preferable to other potentially effective and reasonably feasible alternatives.
This rule is not subject to this Executive Order because it is not economically significant as defined in Executive Order 12866. In addition, it does not concern an environmental or safety risk that we have reason to believe may have a disproportionate effect on children.
Executive Order 13175
Executive Order 13175, entitled ``Consultation and Coordination with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), requires agencies to develop an accountable process to ensure ``meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.'' The phrase ``policies that have tribal implications'' is defined in the Executive Order to include regulations that have ``substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.''
This rule does not have tribal implications. The rule imposes no new substantive obligations on tribal governments but instead merely adjusts the value of current statutory civil monetary penalties to reflect and keep pace with the levels originally set by Congress when the statutes were enacted. The calculation of the increases is formula-
driven and prescribed by statute and OMB guidance, and the Corps has no discretion to vary the amount of the adjustment to reflect any views or suggestions provided by commenters. Therefore, Executive Order 13175 does not apply to this rule.
Environmental Documentation
The Corps prepares appropriate environmental documentation, including Environmental Impact Statements when required, for all permit decisions. Therefore, environmental documentation under the National Environmental Policy Act is not required for this rule. This final rule does not constitute a major Federal action significantly affecting the quality of the human environment because it merely increases the value of statutory civil monetary penalties to reflect and keep pace with the levels originally set by Congress when the statutes were enacted. The calculation of the increases is formula-driven and prescribed by statute and OMB guidance, and the Corps has no discretion to vary the amount of the adjustment.
Appropriate environmental documentation has been, or will be, prepared for each permit action that is subject to the civil penalty process. Therefore, environmental documentation under the National Environmental Policy Act (NEPA) is not required for this final rule.
Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. We will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule cannot take effect until 60 days after it is published in the Federal Register. This rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).
Executive Order 12898
Executive Order 12898 requires that, to the greatest extent practicable and permitted by law, each Federal agency must make achieving environmental justice part of its mission. Executive Order 12898 provides that each Federal agency conduct its programs, policies, and activities that substantially affect human health or the environment in a manner that ensures that such programs, policies, and activities do not have the effect of excluding persons (including populations) from participation in, denying persons (including populations) the benefits of, or subjecting persons (including populations) to discrimination under such programs, policies, and activities because of their race, color, or national origin. This rule is not expected to negatively impact any community, and therefore is not expected to cause any disproportionately high and adverse impacts to minority or low-income communities. This rule relates solely to the adjustments to civil penalties to account for inflation.
Executive Order 13211
This rule is not a ``significant energy action'' as defined in Executive Order 13211, ``Actions Concerning Regulations That Significantly Affect Energy Supply,
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Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This rule relates only to the adjustments to civil penalties to account for inflation. This rule is consistent with current agency practice, does not impose new substantive requirements, and therefore will not have a significant adverse effect on the supply, distribution, or use of energy.
List of Subjects in 33 CFR Part 326
Administrative practice and procedure, Intergovernmental relations, Investigations, Law enforcement, Navigation (water), Water pollution control, Waterways.
Dated: April 19, 2018.
R.D. James,
Assistant Secretary of the Army (Civil Works).
For the reasons set forth in the preamble, the Corps amends 33 CFR part 326 as follows:
PART 326--ENFORCEMENT
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1. The authority citation for part 326 continues to read as follows:
Authority: 33 U.S.C. 401 et seq.; 33 U.S.C. 1344; 33 U.S.C. 1413; 33 U.S.C. 2104; 33 U.S.C. 1319; 28 U.S.C. 2461 note.
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2. Amend Sec. 326.6 by revising paragraph (a)(1) to read as follows:
Sec. 326.6 Class I administrative penalties.
(a) Introduction. (1) This section sets forth procedures for initiation and administration of Class I administrative penalty orders under Section 309(g) of the Clean Water Act, judicially-imposed civil penalties under Section 404(s) of the Clean Water Act, and Section 205 of the National Fishing Enhancement Act. Under Section 309(g)(2)(A) of the Clean Water Act, Class I civil penalties may not exceed $21,394 per violation, except that the maximum amount of any Class I civil penalty shall not exceed $53,484. Under Section 404(s)(4) of the Clean Water Act, judicially-imposed civil penalties may not exceed $53,484 per day for each violation. Under Section 205(e) of the National Fishing Enhancement Act, penalties for violations of permits issued in accordance with that Act shall not exceed $23,426 for each violation.
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Statutory civil monetary
penalty amount for violations
Environmental statute and U.S. Code that occurred after November 2,
citation 2015, and are assessed on or
after May 2, 2018
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Clean Water Act (CWA), Section $21,394 per violation, with a
309(g)(2)(A), 33 U.S.C. 1319(g)(2)(A). maximum of $53,484.
CWA, Section 404(s)(4), 33 U.S.C. Maximum of $53,484 per day for
1344(s)(4). each violation.
National Fishing Enhancement Act, Maximum of $23,426 per
Section 205(e), 33 U.S.C. 2104(e). violation.
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FR Doc. 2018-09316 Filed 5-1-18; 8:45 am
BILLING CODE 3720-58-P
