[Federal Register Volume 61, Number 249 (Thursday, December 26, 1996)]
[Rules and Regulations]
[Pages 67944-67946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32564]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 269


Inflation Adjustment of Civil Monetary Penalties

AGENCY: Office of the Secretary, Department of Defense.

ACTION: Final rule.

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SUMMARY: This final rule adjusts the amount of each statutory civil 
penalty subject to Department of Defense jurisdiction in accordance 
with the requirements of the Federal Civil Penalties Inflation 
Adjustment Act of 1990 as amended by the Debt Collection Improvement 
Act of 1996.

EFFECTIVE DATE: January 27, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. Tom Summers, Directorate for 
Accounting Policy, Office of the Deputy Chief Financial Officer, Office 
of the Under Secretary of Defense (Comptroller), 1100 Defense Pentagon, 
Room 3A882, Washington, DC 20301-1100, (703) 697-0586 (e-mail address: 
[email protected]).

SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation 
Adjustment Act of 1990 (FCPIAA), Public Law 101-410, 104 Stat. 890, 28 
U.S.C. 2461, as amended by the Debt Collection Improvement Act of 1996 
(DCIA), Public Law 104-134, April 26, 1996, requires the inflation 
adjustment of Civil Monetary Penalties (CMP) to ensure that they 
continue to maintain their deterrent value. The DCIA requires that not 
later than 180 days after its enactment, and at least once every 4 
years thereafter, the head of each agency shall, by regulation 
published in the Federal Register, adjust each CMP within its 
jurisdiction by the inflation adjustment described in the FCPIAA. The 
inflation adjustment under the DCIA is to be determined by increasing 
the maximum CMP by the cost-of-living adjustment, rounding to amounts 
set forth in section 5(a) of the FCPIAA. The cost-of-living adjustment 
is the percentage (if any) for each CMP by which the Consumer Price 
Index (CPI) for the month of June of the calendar year preceding the 
adjustment, exceeds the CPI for the month of June of the calendar year 
in which the amount of such CMP was last set or adjusted pursuant to 
law. The first adjustment to a CMP may not exceed 10 percent of such 
penalty.
    Any increased penalties shall apply only to violations which occur 
after the date on which the increase takes effect.
    A typical example of an inflation adjustment of a CMP is as 
follows:
    Title 10 U.S.C., section 1094(c)(1) imposes a maximum penalty of 
$5,000 to a person who provides health care independently as a health-
care professional where that person does not have a current license to 
provide such care. The term ``health care professional'' means 
physician, dentist, clinical psychologist or nurse and any other person 
providing direct patient care as may be designated by the

[[Page 67945]]

Secretary of Defense in regulations. The penalty was set in 1985. The 
CPI for June 1985 and 322.3. The CPI for June 1995 is 456.7. The 
inflation factor, therefore, is 456.7/322.3 or 1.42. The maximum 
penalty amount after increase and statutory rounding would be $7,000 
(1.42 x 5,000). The new maximum penalty amount after applying the 10 
percent limit on an initial increase is $5,500.
    A similar calculation was done with respect to each CMP subject to 
the jurisdiction of the Department of Defense. In compliance with the 
DCIA, the Department of Defense hereby is amending its religions by 
creating this new part.
    This final rule has been issued without prior public notice or 
opportunity for public comment. The Administrative Procedure Act (5 
U.S.C. 553(b)(B)) does not require that process ``when the agency for 
good cause finds (and incorporates the finding and a brief statement of 
reasons therefor in the rules issued) that notice and public procedure 
thereon are impracticable, unnecessary, or contrary to the public 
interest.'' In this instance, the Department of Defense finds for good 
cause, that solicitation of public comment on this final rule is 
unnecessary and impractical. The Congress has required that the agency 
issue the amendments contained the rule, and provided no discretion to 
the agency regarding the substance of the amendments. All that is 
required of the Department of Defense for determination of the amount 
of the inflation adjustment are ministerial computations.
    It has been determined that 32 CFR part 269 is not a significant 
rule as defined under section 3(f)(1) through 3(f)(4) of Executive 
order 12866. The rule does not:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy; a sector of the 
economy; productivity; competition; jobs; the environment; public 
health or safety; or State, local or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlement, grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandate, the President's priorities, or the principles set forth in 
Executive Order 12866.
    The Department of Defense certifies that this rule is not subject 
to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, 
if promulgated, have a significant economic impact on a substantial 
number of small entities. This rule implements statutory authority 
intended to protect the Department's programs from abusive practices, 
but will have no adverse or disproportionate economic impact on small 
businesses.
    The Department of Defense certifies that this rule does not impose 
any reporting or recordkeeping requirements under the Paperwork 
Reduction Act of 1995.

List of Subjects in 32 CFR Part 269

    Administrative practice and procedure, penalties.

    Accordingly, Title 32, Chapter I, subchapter M of the Code of 
Federal Regulations, is amended to add part 269 to read as follows:

PART 269--CIVIL MONETARY PENALTY INFLATION ADJUSTMENT

Sec.
269.1  Scope and purpose.
269.2  Definitions.
269.3  Civil monetary penalty inflation adjustment.
269.4  Cost of living adjustments of civil monetary penalties.
269.5  Application of increase to violations.

    Authority: 28 U.S.C. 2461.


Sec. 269.1  Scope and purpose.

    The purpose of this part is to establish a mechanism for the 
regular adjustment for inflation of civil monetary penalties and to 
adjust such penalties in conformity with the Federal Civil Penalties 
Inflation Adjustment Act of 1990, 46 U.S.C. 2461, as amended by the 
Debt Collection Improvement Act of 1996, Public Law 104-134, April 26, 
1996, in order to maintain the deterrent effect of civil monetary 
penalties and to promote compliance with the law.


Sec. 269.2  Definitions.

    (a) Department. The Department of Defense.
    (b) Civil monetary penalty. Any penalty, fine, or other sanction 
that:
    (1)(i) Is for a specific monetary amount as provided by Federal 
law; or
    (ii) Has a maximum amount provided by Federal law;
    (2) Is assessed or enforced by the Department pursuant to Federal 
law; and
    (3) Is assessed or enforced pursuant to an administrative 
proceeding or a civil action in the Federal Courts.
    (c) Consumer Price Index. The index for all urban consumers 
published by the Department of Labor.


Sec. 269.3   Civil monetary penalty inflation adjustment.

    The Department shall, not later than 180 days after the enactment 
of the Debt Collection Improvement Act on April 23, 1996, and at least 
once every 4 years thereafter--
    (a) By regulation adjustment each civil monetary penalty provided 
by law within the jurisdiction of the Department of Defense by the 
inflation adjustment described in Sec. 269.4; and
    (b) Publish each such update in the Federal Register.


Sec. 269.4  Cost of living adjustments of civil monetary penalties.

    (a) The inflation adjustment under Sec. 269.3 shall be determined 
by increasing the maximum civil monetary penalty for each civil 
monetary penalty by the cost-of-living adjustment. Any increase 
determined under this paragraph shall be rounded to the nearest:
    (1) Multiple of $10 in the case of penalties less than or equal to 
$100;
    (2) Multiple of $100 in the case of penalties greater than $100 but 
less than or equal to $1,000;
    (3) Multiple of $1,000 in the case of penalties greater than $1,000 
but less than or equal to $10,000;
    (4) Multiple of $5,000 in the case of penalties greater than 
$10,000 but less than or equal to $100,000;
    (5) Multiple of $10,000 in the case of penalties greater than 
$100,000 but less than or equal to $200,000; and
    (6) Multiple of $25,000 in the case of penalties greater than 
$200,000.
    (b) For purposes of paragraph (a) of this section, the term ``cost-
of-living adjustment'' means the percentage (if any) for each civil 
monetary penalty by which the Consumer Price Index for the month of 
June of the calendar year preceding the adjustment, exceeds the 
Consumer Price Index for the month of June of the calendar year in 
which the amount of such civil monetary penalty was last set or 
adjusted pursuant to law.
    (c) Limitaiton on initial adjustment. The first adjustment of civil 
monetary penalty pursuant to Sec. 269.3 may not exceed 10 percent of 
such penalty.
    (d) Inflation adjustment. Maximum civil monetary penalties within 
the jurisdiction of the Department of Defense are adjusted for 
inflation as follows:

[[Page 67946]]



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                                                                                                         New    
                                                                                          Maximum      adjusted 
          United States Code citation             Civil monetary penalty description      penalty      maximum  
                                                                                         amount as     penalty  
                                                                                        of 10/23/96     amount  
----------------------------------------------------------------------------------------------------------------
10 U.S.C. 1094(c)(1)..........................  Unlawful Provision of Health Care.....       $5,000       $5,500
10 U.S.C. 1102(k).............................   Wrongful Disclosure--Medical Records:                          
                                                First Offense.........................        3,000        3,300
                                                Subsequent Offense....................       20,000       22,000
31 U.S.C. 1352................................  Use of Appropriated Funds to Influence                          
                                                 Contract:                                                      
                                                Minimum...............................       10,000       11,000
                                                Maximum...............................      100,000      110,000
31 U.S.C. 3721(i).............................  Personal Property Loss Claims from            1,000        1,100
                                                 Government Personnel.                                          
31 U.S.C. 3802(a)(1)..........................  Program Fraud Civil Remedies Act/             5,000        5,500
                                                 Violation Involving False Claim.                               
31 U.S.C. 3802(a)(2)..........................  Program Fraud Civil Remedies Act/             5,000        5,500
                                                 Violation Involving False Statement.                           
33 U.S.C. 1319(g)(2)(A).......................  Sec.  404  Permit Condition Violation,       10,000       11,000
                                                 Class I (per violation amount).                                
33 U.S.C. 1319(g)(2)(A).......................  Sec.  404  Permit Condition Violation,       25,000       27,500
                                                 Class I (maximum amount).                                      
33 U.S.C. 1319(g)(2)(B).......................  Sec.  404  Permit Condition Violation,       10,000       11,000
                                                 Class II (per day amount).                                     
33 U.S.C. 1319(g)(2)(B).......................  Sec.  404  Permit Condition Violation,      125,000      137,500
                                                 Class II (maximum amount).                                     
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Sec. 269.5  Application of increase to violations.

    Any increase in a civil monetary penalty under this part shall 
apply only to violations which occur after the date the increase takes 
effect.

    Dated: December 18, 1996.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 96-32564 Filed 12-24-96; 8:45 am]
BILLING CODE 5000-04-M