Rules of Practice and Procedure; Adjusting Civil Money Penalties for Inflation
| Citation | 85 FR 6023 |
| Record Number | 2020-01410 |
| Published date | 04 February 2020 |
| Section | Rules and Regulations |
| Court | Farm Credit Administration |
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.
Rules and Regulations Federal Register
6023
Vol. 85, No. 23
Tuesday, February 4, 2020
1
Note: While the 1990 Act, as amended by 1996
and 2015 Acts, uses the term ‘‘civil monetary
penalties’’ for these penalties or other sanctions, the
Farm Credit Act and the FCA Regulations use the
term ‘‘civil money penalties.’’ Both terms have the
same meaning. Accordingly, this rule uses the term
civil money penalty, and both terms may be used
interchangeably.
2
See 28 U.S.C. 2461 note.
3
Public Law 92–181, as amended.
4
42 U.S.C. 4012a and Public Law 103–325, title
V, 108 Stat. 2160, 2255–87 (September 23, 1994).
5
The inflation-adjusted CMP in effect on January
15, 2019, for a violation of a final order is $2,326
per day, as set forth in §622.61(a)(1) of FCA
regulations.
6
The inflation-adjusted CMP in effect on January
15, 2019, for a violation of the Farm Credit Act or
a regulation issued under the Farm Credit Act is
$1,052 per day, as set forth in §622.61(a)(2) of FCA
regulations.
7
Prior adjustments were made under the 1990
Act.
8
Public Law 112–141, 126 Stat. 405 (July 6,
2012).
9
The inflation-adjusted CMP in effect on January
15, 2019, for a flood insurance violation is $2,187,
as set forth in §622.61(b)of FCA regulations.
FARM CREDIT ADMINISTRATION
12 CFR Part 622
RIN 3052–AD41
Rules of Practice and Procedure;
Adjusting Civil Money Penalties for
Inflation
AGENCY
: Farm Credit Administration.
ACTION
: Final rule.
SUMMARY
: This regulation implements
inflation adjustments to civil money
penalties (CMPs) that the Farm Credit
Administration (FCA) may impose or
enforce pursuant to the Farm Credit Act
of 1971, as amended (Farm Credit Act),
and pursuant to the Flood Disaster
Protection Act of 1973, as amended by
the National Flood Insurance Reform
Act of 1994, and further amended by the
Biggert-Waters Flood Insurance Reform
Act of 2012 (Biggert-Waters Act)
(collectively FDPA, as amended).
DATES
: Effective date: This regulation is
effective on February 4, 2020.
Applicability date: The inflation-
adjusted CMP were applicable
beginning January 15, 2020.
FOR FURTHER INFORMATION CONTACT
:
Paul K. Gibbs, Associate Director,
Office of Regulatory Policy, Farm Credit
Administration, (703) 883–4203, TTY
(703) 883–4056,
or
Autumn R. Agans, Senior Attorney,
Office of General Counsel, Farm Credit
Administration, (703) 883–4082, TTY
(703) 883–4056.
SUPPLEMENTARY INFORMATION
:
I. Objective
The objective of this regulation is to
adjust the maximum CMPs for inflation
through a final rulemaking to retain the
deterrent effect of such penalties.
II. Background
A. Introduction
The Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by
the Debt Collection Improvement Act of
1996 (1996 Act) and the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015 (2015 Act)
(collectively, 1990 Act, as amended),
requires all Federal agencies with the
authority to enforce CMPs to evaluate
and adjust, if necessary, those CMPs
each year to ensure that they continue
to maintain their deterrent value and
promote compliance with the law.
Section 3(2) of the 1990 Act, as
amended, defines a civil monetary
penalty
1
as any penalty, fine, or other
sanction that: (1) Either is for a specific
monetary amount as provided by
Federal law or has a maximum amount
provided for by Federal law; (2) is
assessed or enforced by an agency
pursuant to Federal law; and (3) is
assessed or enforced pursuant to an
administrative proceeding or a civil
action in the Federal courts.
2
The FCA imposes and enforces CMPs
through the Farm Credit Act
3
and the
FDPA, as amended.
4
FCA’s regulations
governing CMPs are found in 12 CFR
parts 622 and 623. Part 622 establishes
rules of practice and procedure
applicable to formal and informal
hearings held before the FCA, and to
formal investigations conducted under
the Farm Credit Act. Part 623 prescribes
rules regarding persons who may
practice before the FCA and the
circumstances under which such
persons may be suspended or debarred
from practice before the FCA.
B. CMPs Issued Under the Farm Credit
Act
The Farm Credit Act provides that
any Farm Credit System (System)
institution or any officer, director,
employee, agent, or other person
participating in the conduct of the
affairs of a System institution who
violates the terms of a cease-and-desist
order that has become final pursuant to
section 5.25 or 5.26 of the Farm Credit
Act must pay up to a maximum daily
amount of $1,000
5
during which such
violation continues. This CMP
maximum was set by the Farm Credit
Amendments Act of 1985, which
amended the Farm Credit Act. Orders
issued by the FCA under section 5.25 or
5.26 of the Farm Credit Act include
temporary and permanent cease-and-
desist orders. In addition, section
5.32(h) of the Farm Credit Act provides
that any directive issued under sections
4.3(b)(2), 4.3A(e), or 4.14A(i) of the
Farm Credit Act ‘‘shall be treated’’ as a
final order issued under section 5.25 of
the Farm Credit Act for purposes of
assessing a CMP.
Section 5.32(a) of the Farm Credit Act
also states that ‘‘[a]ny such institution or
person who violates any provision of
the [Farm Credit] Act or any regulation
issued under this Act shall forfeit and
pay a civil penalty of not more than
$500
6
per day for each day during
which such violation continues.’’ This
CMP maximum was set by the
Agricultural Credit Act of 1987, which
was enacted in 1988, and amends the
Farm Credit Act. Current, inflation-
adjusted CMP maximums are set forth
in existing § 622.61 of FCA regulations.
7
The FCA also enforces the FDPA, as
amended, which requires FCA to assess
CMPs for a pattern or practice of
committing certain specific actions in
violation of the National Flood
Insurance Program. The existing
maximum CMP for a violation under the
Flood Disaster Protection Act of 1973 is
$2,000.
89
C. Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015
1. In General
The 2015 Act required all Federal
agencies to adjust the CMPs yearly,
starting January 15, 2017.
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Federal Register / Vol. 85, No. 23 / Tuesday, February 4, 2020 / Rules and Regulations
10
Public Law 114–74, sec. 701(b)(1).
11
The CPI is published by the Department of
Labor, Bureau of Statistics, and is available at its
website: ftp://ftp.bls.gov/pub/special.requests/cpi/
cpiai.txt.
12
Pursuant to section 5(a)(3) of the 2015 Act, any
increase determined under the subsection shall be
rounded to the nearest $1.
13
Pursuant to section 4(d) of the 1990 Act, as
amended.
14
OMB Circular M–20–05, Implementation of
Penalty Inflation Adjustments for 2020, Pursuant to
the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015.
15
28 U.S.C. 2461 note, section 7(a).
16
OMB Circular M–20–05, Implementation of
Penalty Inflation Adjustments for 2020, Pursuant to
the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015.
17
12 CFR 622.61(a)(1).
18
12 CFR 622.61(a)(2).
Under Section 4(b) of the 1990 Act, as
amended, annual adjustments are to be
made yearly no later than January 15 of
each year.
10
Section 6 of the 1990 Act,
as amended, states that any increase to
a civil monetary penalty under this 1990
Act applies only to civil monetary
penalties, including those whose
associated violation predated such
increase, which are assessed after the
date the increase takes effect.
Section 5(b) of the 1990 Act, as
amended, defines the term ‘‘cost-of-
living adjustment’’ as the percentage (if
any) for each civil monetary penalty by
which (1) the Consumer Price Index
(CPI) for the month of October of the
calendar year preceding the adjustment,
exceeds (2) the CPI for the month of
October 1 year before the month of
October referred to in (1) of the calendar
year in which the amount of such civil
monetary penalty was last set or
adjusted pursuant to law.
11
The increase for each CMP adjusted
for inflation must be rounded using a
method prescribed by section 5(a) of the
1990 Act, as amended, by the 2015
Act.
12
2. Other Adjustments
If a civil monetary penalty is subject
to a cost-of-living adjustment under the
1990 Act, as amended, but is adjusted
to an amount greater than the amount of
the adjustment required under the Act
within the 12 months preceding a
required cost-of-living adjustment, the
agency is not required to make the cost-
of-living adjustment to that CMP in that
calendar year.
13
III. Yearly Adjustments
A. Mathematical Calculations of 2020
Adjustments
The adjustment requirement affects
two provisions of section 5.32(a) of the
Farm Credit Act. For the 2020 yearly
adjustments to the CMPs set forth by the
Farm Credit Act, the calculation
required by the 2019 White House
Office of Management and Budget
(OMB) guidance
14
is based on the
percentage by which the CPI for October
2019 exceeds the CPIs for October 2018.
The OMB set forth guidance, as required
by the 2015 Act,
15
with a multiplier for
calculating the new CMP values.
16
The
2019 OMB multiplier for the 2020 CMPs
is 1.01764.
The adjustment also affects the CMPs
set by the Flood Disaster Protection Act
of 1973, as amended. The adjustment
multiplier is the same for all FCA
enforced CMPs, set at 1.01764. The
maximum CMPs for violations were
created in 2012 by the Biggert-Waters
Act, which amended the Flood Disaster
Protection Act of 1973.
1. New Penalty Amount in § 622.61(a)(1)
The inflation-adjusted CMP currently
in effect for violations of a final order
occurring on or after January 15, 2019,
is a maximum daily amount of $2,326.
17
Multiplying the $2,326 CMP by the 2019
OMB multiplier, 1.01764, yields a total
of $2,403.67. When that number is
rounded as required by section 5(a) of
the 1990 Act, as amended, the inflation-
adjusted maximum increases to $2,404.
Thus, the new CMP maximum is $2,404,
for violations that occur on or after
January 15, 2020.
2. New Penalty Amount in § 622.61(a)(2)
The inflation-adjusted CMP currently
in effect for violations of the Farm
Credit Act or regulations issued under
the Farm Credit Act occurring on or
after January 15, 2019, is a maximum
daily amount of $1,052.
18
Multiplying
the $1,052 CMP maximum by the 2019
OMB multiplier, 1.01764, yields a total
of $1,070.56. When that number is
rounded as required by section 5(a) of
the 1990 Act, as amended the inflation-
adjusted maximum increases to $1,071.
Thus, the new CMP maximum is $1,071,
for violations that occur on or after
January 15, 2020.
3. New Penalty Amounts for Flood
Insurance Violations Under § 622.61(b)
The existing maximum CMP for a
pattern or practice of flood insurance
violations pursuant to 42 U.S.C.
4012a(f)(5) occurring on or after January
15, 2019, is $2,187. Multiplying $2,187
by the 2019 OMB multiplier, 1.01764,
yields a total of $2,225.58. When that
number is rounded as required by
section 5(a) of the 1990 Act, as
amended, the new maximum
assessment of the CMP for violating 42
U.S.C. 4012a(f)(5) is $2,226. Thus, the
new CMP maximum is $2,226, for
violations that occur on or after January
15, 2020.
IV. Notice and Comment Not Required
by Administrative Procedure Act
The 1990 Act, as amended, gives
Federal agencies no discretion in the
adjustment of CMPs for the rate of
inflation. Further, these revisions are
ministerial, technical, and
noncontroversial. For these reasons, the
FCA finds good cause to determine that
public notice and an opportunity to
comment are impracticable,
unnecessary, and contrary to the public
interest pursuant to the Administrative
Procedure Act, 5 U.S.C. 553(b)(B), and
adopts this rule in final form.
V. Regulatory Flexibility Act
Pursuant to section 605(b) of the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.), the FCA hereby certifies that
this final rule will not have a significant
economic impact on a substantial
number of small entities. Each of the
banks in the System, considered
together with its affiliated associations,
has assets and annual income in excess
of the amounts that would qualify them
as small entities. Therefore, System
institutions are not ‘‘small entities’’ as
defined in the Regulatory Flexibility
Act.
List of Subjects in 12 CFR Part 622
Administrative practice and
procedure, Crime, Investigations,
Penalties.
For the reasons stated in the
preamble, part 622 of chapter VI, title 12
of the Code of Federal Regulations is
amended as follows:
PART 622—RULES OF PRACTICE AND
PROCEDURE
■1. The authority citation for part 622
continues to read as follows:
Authority: Secs. 5.9, 5.10, 5.17, 5.25–5.37
of the Farm Credit Act (12 U.S.C. 2243, 2244,
2252, 2261–2273); 28 U.S.C. 2461 note; and
42 U.S.C. 4012a(f).
■2. Revise § 622.61 to read as follows:
§ 622.61 Adjustment of civil money
penalties by the rate of inflation under the
Federal Civil Penalties Inflation Adjustment
Act of 1990, as amended.
(a) The maximum amount of each
civil money penalty within FCA’s
jurisdiction is adjusted in accordance
with the Federal Civil Penalties
Inflation Adjustment Act of 1990, as
amended (28 U.S.C. 2461 note), as
follows:
(1) Amount of civil money penalty
imposed under section 5.32 of the Act
for violation of a final order issued
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Federal Register / Vol. 85, No. 23 / Tuesday, February 4, 2020 / Rules and Regulations
under section 5.25 or 5.26 of the Act:
The maximum daily amount is $2,404
for violations that occur on or after
January 15, 2020.
(2) Amount of civil money penalty for
violation of the Act or regulations: The
maximum daily amount is $1,071 for
each violation that occurs on or after
January 15, 2020.
(b) The maximum civil money penalty
amount assessed under 42 U.S.C.
4012a(f) is $2,226 for each violation that
occurs on or after January 15, 2020, with
no cap on the total amount of penalties
that can be assessed against any single
institution during any calendar year.
Dated: January 23, 2020.
Dale Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2020–01410 Filed 2–3–20; 8:45 am]
BILLING CODE 6705–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 25
[Docket No. FAA–2020–0032; Special
Conditions No. 25–765–SC]
Special Conditions: Airbus Defense
and Space Model C–295 Series
Airplane; Electronic System Security
Protection From Unauthorized External
Access
AGENCY
: Federal Aviation
Administration (FAA), DOT.
ACTION
: Final special conditions; request
for comments.
SUMMARY
: These special conditions are
issued for the Airbus Defense and Space
(Airbus DS) C–295 series airplane. This
airplane will have novel or unusual
design features when compared to the
state of technology envisioned in the
airworthiness standards for transport
category airplanes. This design feature
is airplane electronic systems and
networks that allow access from
external sources (e.g., wireless devices,
internet connectivity) to the airplane’s
previously isolated, internal electronic
components. The applicable
airworthiness regulations do not contain
adequate or appropriate safety standards
for this design feature. These special
conditions contain the additional safety
standards that the Administrator
considers necessary to establish a level
of safety equivalent to that established
by the existing airworthiness standards.
DATES
: This action is effective on Airbus
DS on February 4, 2020. Send comments
on or before March 20, 2020.
ADDRESSES
: Send comments identified
by Docket No. FAA–2020–0032 using
any of the following methods:
•Federal eRegulations Portal: Go to
http://www.regulations.gov/ and follow
the online instructions for sending your
comments electronically.
•Mail: Send comments to Docket
Operations, M–30, U.S. Department of
Transportation (DOT), 1200 New Jersey
Avenue SE, Room W12–140, West
Building Ground Floor, Washington, DC
20590–0001.
•Hand Delivery or Courier: Take
comments to Docket Operations in
Room W12–140 of the West Building
Ground Floor at 1200 New Jersey
Avenue SE, Washington, DC, between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
•Fax: Fax comments to Docket
Operations at 202–493–2251.
Privacy: The FAA will post all
comments it receives, without change,
to http://www.regulations.gov/,
including any personal information the
commenter provides. Using the search
function of the docket website, anyone
can find and read the electronic form of
all comments received into any FAA
docket, including the name of the
individual sending the comment (or
signing the comment for an association,
business, labor union, etc.). DOT’s
complete Privacy Act Statement can be
found in the Federal Register published
on April 11, 2000 (65 FR 19477–19478).
Docket: Background documents or
comments received may be read at
http://www.regulations.gov/ at any time.
Follow the online instructions for
accessing the docket or go to Docket
Operations in Room W12–140 of the
West Building Ground Floor at 1200
New Jersey Avenue SE, Washington,
DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT
:
Thuan Nguyen, Airplane and Flight
Crew Interface Section, AIR–671,
Transport Standards Branch, Policy and
Innovation Division, Aircraft
Certification Service, Federal Aviation
Administration, 2200 South 216th
Street, Des Moines, Washington 98198;
telephone and fax 206–231–3365; email
Thuan.T.Nguyen@faa.gov.
SUPPLEMENTARY INFORMATION
: The
substance of these special conditions
has been published in the Federal
Register for public comment in several
prior instances with no substantive
comments received. Therefore, the FAA
has determined that prior public notice
and comment are unnecessary, and
finds that, for the same reason, good
cause exists for adopting these special
conditions upon publication in the
Federal Register.
Comments Invited
The FAA invites interested people to
take part in this rulemaking by sending
written comments, data, or views. The
most helpful comments reference a
specific portion of the special
conditions, explain the reason for any
recommended change, and include
supporting data.
The FAA will consider all comments
received by the closing date for
comments. The FAA may change these
special conditions based on the
comments received.
Background
On August 2, 2018 Airbus DS applied
for a change to Type Certificate No.
A21NM to update the Avionics System
Rockwell Collins Proline II to the
Avionics System based on Proline
Fusion in the Airbus DS C–295 series
airplane. The Airbus DS C–295 series
airplane, currently approved under
Type Certificate No. A21NM, is a twin-
engine, transport category airplane
configured for freighter use, with a
maximum takeoff weight of 46,300
pounds.
Type Certification Basis
Under the provisions of title 14, Code
of Federal Regulations (14 CFR) 21.101,
Airbus DS must show that the C–295
series airplane, as changed, meets the
applicable provisions of the regulations
listed in Type Certificate No. A21NM, or
the applicable regulations in effect on
the date of application for the change,
except for earlier amendments as agreed
upon by the FAA.
If the Administrator finds that the
applicable airworthiness regulations
(i.e., 14 CFR part 25) do not contain
adequate or appropriate safety standards
for the Airbus DS C–295 series airplane
because of a novel or unusual design
feature, special conditions are
prescribed under the provisions of
§ 21.16.
Special conditions are initially
applicable to the model for which they
are issued. Should the type certificate
for that model be amended later to
include any other model that
incorporates the same novel or unusual
design feature, or should any other
model already included on the same
type certificate be modified to
incorporate the same novel or unusual
design feature, these special conditions
would also apply to the other model
under § 21.101.
In addition to the applicable
airworthiness regulations and special
conditions, the Airbus DS C–295 series
airplane must comply with the fuel vent
and exhaust emission requirements of
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