Implementing the Federal Civil Penalties Adjustment Act Improvements Act of 2015

Citation85 FR 22025
Record Number2020-07761
Published date21 April 2020
SectionRules and Regulations
CourtNational Endowment For The Humanities,National Foundation On The Arts And Humanities
Federal Register, Volume 85 Issue 77 (Tuesday, April 21, 2020)
[Federal Register Volume 85, Number 77 (Tuesday, April 21, 2020)]
                [Rules and Regulations]
                [Pages 22025-22028]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-07761]
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                NATIONAL FOUNDATION ON THE ARTS AND HUMANITIES
                National Endowment for the Humanities
                45 CFR Part 1168
                RIN 3136-AA39
                Implementing the Federal Civil Penalties Adjustment Act
                Improvements Act of 2015
                AGENCY: National Endowment for the Humanities; National Foundation on
                the Arts and the Humanities.
                ACTION: Interim final rule; request for comments.
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                SUMMARY: The National Endowment for the Humanities (NEH) is adjusting
                the civil monetary penalties it imposes for violations of NEH's New
                Restrictions on Lobbying regulation, pursuant to the Federal Civil
                Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015
                Act). The 2015 Act, which amended the Federal Civil Penalties Inflation
                Adjustment Act of 1990 (the Inflation Adjustment Act), requires such
                adjustments to improve the effectiveness of civil monetary penalties
                and to maintain their deterrent effect.
                DATES: Effective date: This interim final rule is effective on April
                21, 2020. Comments must be submitted on or
                [[Page 22026]]
                before May 21, 2020. Applicability date: The adjusted penalty amounts
                will apply to penalties assessed on or after January 15, 2020, if the
                associated violations occurred after November 2, 2015.
                ADDRESSES: You may send comments by email to [email protected].
                 Instructions: Include ``RIN 3136-AA39'' in the subject line of the
                email.
                FOR FURTHER INFORMATION CONTACT: Elizabeth Voyatzis, Deputy General
                Counsel, Office of the General Counsel, National Endowment for the
                Humanities, 400 7th Street SW, Room 4060, Washington, DC 20506; (202)
                606-8322; [email protected].
                SUPPLEMENTARY INFORMATION:
                1. Background
                 For each regulation that imposes a civil monetary penalty, the 2015
                Act requires agencies to: (1) Adjust the level of civil monetary
                penalties with an initial ``catch-up'' inflation adjustment through an
                interim final rulemaking; and (2) make subsequent annual adjustments
                for inflation.
                 The Inflation Adjustment Act defines ``civil monetary penalty'' as
                a penalty, fine, or other sanction that is (1) for a specific monetary
                amount provided by Federal law, or has a maximum amount provided 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 civil monetary penalty inflation
                adjustment is prescribed by law--as explained in Office of Management
                and Budget (OMB) Memorandum M-16-06 (February 24, 2016)--and is based
                on the percentage change in the Consumer Price Index for All Urban
                Consumers (CPI-U) published by the U.S. Department of Labor for the
                month of October preceding the date of the adjustment, relative to the
                October CPI-U in the year of the previous adjustment. Additionally, the
                2015 Act eliminated the ten-percent cap on adjustments imposed by the
                Debt Collection Improvement Act of 1996. Instead, the 2015 Act imposes
                a cap on the amount of the adjustment, such that the amount of increase
                may not exceed 150 percent of the pre-adjustment penalty amount.
                Therefore, the total penalty amount resulting from adjustments under
                the 2015 Act may not exceed 250 percent of the pre-adjustment penalty
                amount.
                 NEH has only one regulation with civil monetary penalty provisions
                which requires adjustment under the 2015 Act: Its New Restrictions on
                Lobbying (45 CFR 1168).
                2. Adjustments to Civil Monetary Penalties in NEH's New Restrictions on
                Lobbying Regulation
                 This interim final rule incorporates the initial ``catch up''
                adjustment and the annual adjustment for 2020, and applies those
                adjustments cumulatively to the civil monetary penalties in 45 CFR
                1168.400. The calculations for these adjustments are in accordance with
                the OMB memoranda providing guidance on implementing the initial
                ``catch up'' adjustment \1\ and the 2020 adjustment \2\ under the 2015
                Act.
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                 \1\ OMB Memorandum M-16-06 (February 24, 2016).
                 \2\ OMB Memorandum M-20-05 (December 16, 2019).
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                A. Initial ``Catch-Up'' Adjustment for Inflation
                 NEH determined the first ``catch up'' adjustment by calculating the
                percent change between the CPI-U for October of the last year in which
                Congress adjusted the penalties (not including any adjustment made
                pursuant to the Inflation Adjustment Act before November 2, 2015), and
                the CPI-U for October 2015, and then rounding to the nearest dollar.
                 Congress set the penalty amounts found in 31 U.S.C. 1352(c) in
                1989, and has not adjusted them since. At that time, the range of civil
                penalties was a minimum of $10,000 and a maximum of $100,000. Between
                October 1989 and October 2015, the CPI-U increased by 189.361 percent.
                 Therefore, the post-adjustment minimum penalty under NEH's New
                Restrictions on Lobbying regulation is $10,000 x 1.89361 percent =
                $18,936.10, which rounds to $18,936. The post-adjustment maximum
                penalty under NEH's New Restrictions on Lobbying regulation is $100,000
                x 1.89361 = $189,361. These post-adjustment penalties are less than 250
                percent of the pre-adjustment penalties, so they do not implicate the
                post-adjustment amount limitation in the 2015 Act. Thus, the penalty
                range under NEH's New Restrictions on Lobbying regulation, for the
                purposes of the initial ``catch up'' adjustment, is a minimum of
                $18,936 and a maximum of $189,361.
                B. 2020 Adjustment for Inflation
                 This interim final rule also incorporates the required subsequent
                annual adjustment for 2020. NEH determined the 2020 adjustment by
                calculating the percent increase between the CPI-U for the month of
                October preceding the date of the adjustment (October 2019) and the
                CPI-U for the October one year prior to the October immediately
                preceding the date of the adjustment (October 2018).
                 For 2019, the penalty range for violations under NEH's New
                Restrictions on Lobbying regulation was a minimum of $20,134 and a
                maximum of $201,340.\3\ Between October 2018 and October 2019, the CPI-
                U increased by 101.764 percent.
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                 \3\ Table 1 details the annual adjustments to New Restrictions
                on Lobbying Civil Monetary Penalties for years 2016-2020.
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                 Therefore, the new, post-adjustment minimum penalty for 2020 under
                NEH's New Restrictions on Lobbying regulation is $20,134 x 1.01764 =
                $20,489.16, which rounds to $20,489. The new, post-adjustment maximum
                penalty for 2020 under NEH's New Restrictions on Lobbying regulation is
                $201,340 x 1.01764 = $204,891.64, which rounds to $204,892. These post-
                adjustment penalties are less than 250 percent of the pre-adjustment
                penalties, so they do not implicate the post-adjustment amount
                limitation in the 2015 Act. Thus, the range of penalties under NEH's
                New Restrictions on Lobbying regulation, for the purposes of the 2020
                annual adjustment, is a minimum of $20,489 and a maximum of $204,892.
                [[Page 22027]]
                 Table 1--Annual Adjustments to New Restrictions on Lobbying Civil Monetary Penalties
                 [2016-2020]
                ----------------------------------------------------------------------------------------------------------------
                 Applicable
                 multiplier
                 based on
                 Year Baseline penalty range percent New baseline penalty range
                 increase in
                 CPI-U
                ----------------------------------------------------------------------------------------------------------------
                2016.................................... $10,000-$100,000.......... 1.89361 $18,936-$189,361
                2017.................................... $18,936-$189,361.......... \4\ 1.01636 $19,246-$192,459
                2018.................................... $19,246-$192,459.......... \5\ 1.02041 $19,639-$196,387
                2019.................................... $19,639-$196,387.......... \6\ 1.02522 $20,134-$201,340
                2020.................................... $20,134-$201,340.......... 1.01764 $20,489-$204,892
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                \4\ OMB Memorandum M-17-11 (December 16, 2016).
                \5\ OMB Memorandum M-18-03 (December 15, 2017).
                \6\ OMB Memorandum M-19-04 (December 14, 2018).
                3. Subsequent Annual Adjustments
                 The 2015 Act requires agencies to make annual adjustments to civil
                penalty amounts no later than January 15 of each year following the
                initial adjustment. NEH will calculate the subsequent annual
                adjustments using the same method as the annual adjustment previously
                described herein. If the CPI-U does not increase, then the civil
                penalties remain the same. Therefore, if NEH adjusts penalties in
                January 2021, NEH will determine the adjustment by calculating the
                percent change between the CPI-U for October 2020 (the October
                immediately preceding the date of adjustment) and October 2019 (the
                October one year prior to October 2020).
                 NEH will publish a Notice in the Federal Register containing the
                amounts of these annual inflation adjustments no later than January 15
                of each year.
                4. Compliance
                Administrative Procedure Act of 1946
                 NEH finds good cause to issue this interim final rule without prior
                notice and comment. The 2015 Act requires agencies to adjust their
                civil monetary penalties according to a statutory formula, and NEH does
                not have any discretion when determining the amount of its adjustments;
                it merely performs ministerial computations to determine those amounts.
                As such, prior notice and comment is unnecessary because NEH would be
                unable to change the substance of this rule in response to suggestions
                from commenters. NEH is accepting public comments up to thirty (30)
                days after publication of this interim final rule, and may address any
                comments received when it publishes a final rule adopting this interim
                final rule.
                Executive Order 12866, Regulatory Planning and Review, and Executive
                Order 13563, Improving Regulation and Regulatory Review
                 This action is not a significant regulatory action and was
                therefore not submitted to OMB for review.
                Executive Order 13771, Reducing Regulation and Controlling Regulatory
                Costs
                 This action is not expected to be an Executive Order 13771
                regulatory action because this action is not significant under
                Executive Order 12866.
                Executive Order 13132, Federalism
                 This rulemaking does not have federalism implications. It will not
                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.
                Executive Order 12988, Civil Justice Reform
                 This rulemaking meets the applicable standards set forth in section
                3(a) and 3(b)(2) of Executive Order 12988. Specifically, this interim
                final rule is written in clear language designed to help reduce
                litigation.
                Executive Order 13175, Indian Tribal Governments
                 Under the criteria in Executive Order 13175, NEH evaluated this
                interim final rule and determined that it will not have any potential
                effects on Federally recognized Indian Tribes.
                Executive Order 12630, Takings
                 Under the criteria in Executive Order 12630, this rulemaking does
                not have significant takings implications. Therefore, a takings
                implication assessment is not required.
                Regulatory Flexibility Act of 1980
                 This rulemaking will not have a significant adverse impact on a
                substantial number of small entities, including small businesses, small
                governmental jurisdictions, or certain small not-for-profit
                organizations.
                Paperwork Reduction Act of 1995
                 This rulemaking does not impose an information collection burden
                under the Paperwork Reduction Act. This action contains no provisions
                constituting a collection of information pursuant to the Paperwork
                Reduction Act.
                Unfunded Mandates Reform Act of 1995
                 This rulemaking does not contain a Federal mandate that will result
                in the expenditure by State, local, and Tribal governments, in the
                aggregate, or by the private sector of $100 million or more in any one
                year.
                National Environmental Policy Act of 1969
                 This interim final rule will not have a significant effect on the
                human environment.
                Small Business Regulatory Enforcement Fairness Act of 1996
                 This interim final rule will not be a major rule as defined in
                section 804 of the Small Business Regulatory Enforcement Fairness Act
                of 1996. This interim final rule will not result in an annual effect on
                the economy of $100 million or more, a major increase in costs or
                prices, significant adverse effects on competition, employment,
                investment, productivity, innovation, or on the ability of United
                States-based companies to compete with foreign-based companies in
                domestic and export markets.
                E-Government Act of 2002
                 All information about NEH required to be published in the Federal
                Register
                [[Page 22028]]
                may be accessed at www.neh.gov. The website https://www.regulations.gov
                contains electronic dockets for NEH's rulemakings under the
                Administrative Procedure Act of 1946.
                Plain Writing Act of 2010
                 To ensure this final rule was written in plain and clear language
                so that it can be used and understood by the public, NEH modeled the
                language of this final rule on the Federal Plain Language Guidelines.
                Lists of Subjects in 45 CFR 1168
                 Administrative practice and procedure, Lobbying, Penalties.
                 For the reasons stated in the preamble, the National Endowment for
                the Humanities amends 45 CFR part 1168 as follows:
                PART 1168--NEW RESTRICTIONS ON LOBBYING
                0
                1. The authority citation for part 1168 is revised to read as follows:
                 Authority: 20 U.S.C. 959(a)(1); 28 U.S.C. 2461 note; 31 U.S.C.
                1352.
                0
                2. Amend Sec. 1168.400:
                0
                a. By removing ``$10,000'' and adding in its place ``$20,489'' and by
                removing ``$100,000'' and adding in its place ``$204,892'',
                respectively, each place they appear in paragraphs (a), (b), and (e);
                and
                0
                b. By adding paragraph (g).
                 The addition reads as follows:
                Sec. 1168.400 Penalties.
                * * * * *
                 (g) The penalty amounts listed under paragraphs (a), (b), and (e)
                of this section shall be adjusted annually for inflation. NEH will
                publish a document in the Federal Register containing the new penalty
                amounts no later than January 15 of each year.
                0
                3. Amend appendix A to part 1168:
                0
                a. By removing ``$10,000'' and adding in its place ``$20,489'' and by
                removing ``$100,000'' and adding in its place ``$204,892'',
                respectively, each place they appear; and
                0
                b. By adding a section entitled ``Annual Adjustments for Inflation'' at
                the end.
                 The addition reads as follows:
                Appendix A to Part 1168--Certification Regarding Lobbying
                * * * * *
                Annual Adjustments for Inflation
                 The penalty amounts listed in this appendix will be adjusted
                annually for inflation. NEH will publish a document in the Federal
                Register containing the new penalty amounts no later than January 15
                of each year.
                 Dated: April 8, 2020.
                Caitlin Cater,
                Attorney-Advisor, National Endowment for the Humanities.
                [FR Doc. 2020-07761 Filed 4-20-20; 8:45 am]
                BILLING CODE 7536-01-P
                

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