Civil Monetary Penalty Inflation Adjustment
| Published date | 04 March 2020 |
| Citation | 85 FR 12723 |
| Record Number | 2020-03725 |
| Section | Rules and Regulations |
| Court | Merit Systems Protection Board |
Federal Register, Volume 85 Issue 43 (Wednesday, March 4, 2020)
[Federal Register Volume 85, Number 43 (Wednesday, March 4, 2020)]
[Rules and Regulations]
[Pages 12723-12724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03725]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 85, No. 43 / Wednesday, March 4, 2020 / Rules
and Regulations
[[Page 12723]]
MERIT SYSTEMS PROTECTION BOARD
5 CFR Part 1201
Civil Monetary Penalty Inflation Adjustment
AGENCY: Merit Systems Protection Board.
ACTION: Final rule.
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SUMMARY: This final rule adjusts the level of civil monetary penalties
(CMPs) in regulations maintained and enforced by the Merit Systems
Protection Board (MSPB) with an annual adjustment under the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the
2015 Act) and Office of Management and Budget (OMB) guidance.
DATES: This final rule is effective on March 4, 2020.
FOR FURTHER INFORMATION CONTACT: Jennifer Everling, Acting Clerk of the
Board, Merit Systems Protection Board, 1615 M Street NW, Washington, DC
20419; Phone: (202) 653-7200; Fax: (202) 653-7130; or email:
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Penalties Inflation Adjustment Act of 1990 (the
1990 Act), Public Law 101-410, provided for the regular evaluation of
CMPs by Federal agencies. Periodic inflationary adjustments of CMPs
ensure that the consequences of statutory violations adequately reflect
the gravity of such offenses and that CMPs are properly accounted for
and collected by the Federal Government. In April 1996, the 1990 Act
was amended by the Debt Collection Improvement Act of 1996 (the 1996
Act), Public Law 104-134, requiring Federal agencies to adjust their
CMPs at least once every four years. However, because inflationary
adjustments to CMPs were statutorily capped at ten percent of the
maximum penalty amount, but only required to be calculated every four
years, CMPs in many cases did not correspond with the true measure of
inflation over the preceding four-year period, leading to a decline in
the real value of the penalty. To remedy this decline, the 2015 Act
(section 701 of Pub. L. 114-74) requires agencies to adjust CMP amounts
with annual inflationary adjustments through a rulemaking using a
methodology mandated by the legislation. The purpose of these
adjustments is to maintain the deterrent effect of civil penalties.
A civil monetary penalty is ``any penalty, fine, or other
sanction'' that: (1) ``is for a specific amount'' or ``has a maximum
amount'' under Federal law; and (2) a Federal agency assesses or
enforces ``pursuant to an administrative proceeding or a civil action
in the Federal courts.'' 28 U.S.C. 2461 note.
The MSPB is authorized to assess CMPs pursuant to 5 U.S.C.
1215(a)(3) and 5 U.S.C. 7326 in disciplinary actions brought by the
Special Counsel. The corresponding MSPB regulation for both CMPs is 5
CFR 1201.126(a). As required by the 2015 Act, and pursuant to guidance
issued by the OMB, the MSPB is now making an annual adjustment for
2020, according to the prescribed formulas.
II. Calculation of Adjustment
The CMP listed in 5 U.S.C. 1215(a)(3) was established in 1978 with
the enactment of the Civil Service Reform Act of 1978 (CSRA), Public
Law 95-454, section 202(a), 92 Stat. 1121-30 (Oct. 13, 1978), and
originally codified at 5 U.S.C. 1207(b). That CMP was last amended by
section 106 of the Whistleblower Protection Enhancement Act of 2012,
Public Law 112-199, 12 Stat. 1468 (Nov. 27, 2012), now codified at 5
U.S.C. 1215(a)(3), which provided for a CMP ``not to exceed $1,000.''
The CMP authorized in 5 U.S.C. 7326 was established in 2012 by section
4 of the Hatch Act Modernization Act of 2012 (Hatch Act), Public Law
112-230, 126 Stat. 1617 (Dec. 28, 2012), which provided for a CMP ``not
to exceed $1,000.'' On February 22, 2019, the MSPB issued a final rule
which increased the maximum CMP allowed under both 5 U.S.C. 1215(a)(3)
and 5 U.S.C. 7326 to $1,093 for the year 2019. See 84 FR 5583 (Feb. 22,
2019). This increase reflected the annual increase for the year 2019
mandated by the 2015 Act.
On December 16, 2019, OMB issued guidance on calculating the annual
inflationary adjustment for 2020. See Memorandum from Russell T.
Vought, Acting Dir., OMB, to Heads of Executive Departments and
Agencies re: Implementation of Penalty Inflation Adjustments for 2020,
Pursuant to the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, M-20-05 (Dec. 16, 2019). Therein, OMB
notified agencies that the annual adjustment multiplier for 2020, based
on the Consumer Price Index for All Urban Consumers (CPI-U), is 1.01764
and that the 2020 annual adjustment amount is obtained by multiplying
the 2019 penalty amount by the 2020 annual adjustment multiplier, and
rounding to the nearest dollar. Therefore, the new maximum penalty
under the CSRA and the Hatch Act is $1,093 x 1.01764 = $1,112.28, which
rounds to $1,112.
III. Effective Date of Penalties
The revised CMP amounts will go into effect on March 4, 2020. All
violations for which CMPs are assessed after the effective date of this
rule will be assessed at the adjusted penalty level regardless of
whether the violation occurred before the effective date.
IV. Procedural Requirements
A. Administrative Procedure Act
Pursuant to 5 U.S.C. 553(b), the MSPB has determined that good
cause exists for waiving the general notice of proposed rulemaking and
public comment procedures as to these technical amendments. The notice
and comment procedures are being waived because Congress has
specifically exempted agencies from these requirements when
implementing the 2015 Act. The 2015 Act explicitly requires the agency
to make subsequent annual adjustments notwithstanding 5 U.S.C. 553, the
section of the Administrative Procedure Act that normally requires
agencies to engage in notice and comment. It is also in the public
interest that the adjusted rates for CMPs under the CSRA and the Hatch
Act become effective as soon as possible to maintain their effective
deterrent effect.
[[Page 12724]]
B. Regulatory Impact Analysis: E.O. 12866
The MSPB has determined that this is not a significant regulatory
action under E.O. 12866. Therefore, no regulatory impact analysis is
required.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) requires an agency to prepare
a regulatory flexibility analysis for rules unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. The RFA applies only to rules for
which an agency is required to first publish a proposed rule. See 5
U.S.C. 603(a) and 604(a). As discussed above, the 2015 Act does not
require agencies to first publish a proposed rule when adjusting CMPs
within their jurisdiction. Thus, the RFA does not apply to this final
rule.
D. Paperwork Reduction Act
This document does not contain information collection requirements
subject to the Paperwork Reduction Act of 1995, Public Law 104-13 (44
U.S.C. Chapter 35).
E. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801, et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a ``major rule'' as defined by 5 U.S.C. 804(2).
List of Subjects in 5 CFR Part 1201
Administrative practice and procedure, Civil rights, Government
employees.
For the reasons set forth above, 5 CFR part 1201 is amended as
follows:
PART 1201--PRACTICES AND PROCEDURES
0
1. The authority citation for part 1201 continues to read as follows:
Authority: 5 U.S.C. 1204, 1305, and 7701, and 38 U.S.C. 4331,
unless otherwise noted.
Sec. 1201.126 [Amended]
0
2. Section 1201.126 is amended in paragraph (a) by removing ``$1,093''
and adding in its place ``$1,112.''
Jennifer Everling,
Acting Clerk of the Board.
[FR Doc. 2020-03725 Filed 3-3-20; 8:45 am]
BILLING CODE 7400-01-P
