[Federal Register Volume 65, Number 145 (Thursday, July 27, 2000)]
[Rules and Regulations]
[Pages 46087-46088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18962]


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FARM CREDIT ADMINISTRATION

12 CFR Part 622

RIN 3052-AC01


Rules of Practice and Procedure; Adjusting Civil Money Penalties 
for Inflation

AGENCY: Farm Credit Administration (FCA).

ACTION: Final rule.

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SUMMARY: This regulation contains cost-of-living adjustments for all 
civil money penalties (CMPs) under our jurisdiction. The Federal Civil 
Penalties Inflation Adjustment Act of 1990 requires us to adjust our 
CMPs at least once every 4 years for inflation to ensure that the 
penalties deter future violations. The new penalties are $1,170 per day 
for violation of an order that has become final and $580 per day for 
violation of the law or regulations.

EFFECTIVE DATE: The regulation will become effective on October 23, 
2000.

FOR FURTHER INFORMATION CONTACT:

Mark L. Johansen, Policy Analyst, Office of Policy and Analysis, Farm 
Credit Administration, McLean, VA 22102-5090, (703) 883-4498, TDD (703) 
883-4444,
    or
Rebecca S. Orlich, Senior Attorney, Office of General Counsel, Farm 
Credit Administration, McLean, VA 22102-5090, (703) 883-4020, TDD (703) 
883-4444.

SUPPLEMENTARY INFORMATION:

I. Objective

    The objective of this regulation is to comply with Congress' 
mandate to adjust CMP amounts for inflation.

II. Cost-of-Living Adjustment

    The Federal Civil Penalties Inflation Adjustment Act of 1990 \1\ 
(FCPIA Act), as amended by the Debt Collection Improvement Act of 1996 
(DCIA),\2\ requires each agency to adjust each CMP within its 
jurisdiction by a prescribed cost-of-living adjustment at least once 
every 4 years. This cost-of-living adjustment is based on the formula 
described in section 5(b) of the FCPIA Act. We made our last adjustment 
in October 1996. Section 6 of the FCPIA Act states that any increase 
must apply only to violations that occur after the date the increase 
takes effect.
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    \1\ 28 U.S.C. 2461 note.
    \2\ Pub. L. 104-134, sec. 31001(s), 110 Stat. 1321-373 (April 
26, 1996).
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    This adjustment requirement affects two provisions of section 
5.32(a) \3\ of the Farm Credit Act of 1971, as amended (1971 Act), 
which allows the FCA to impose CMPs on Farm Credit System (FCS) 
institutions and their related parties. Section 5.32(a) specifies that 
any FCS institution or any officer, director, employee, agent, or other 
person participating in the conduct of the affairs of an FCS 
institution who violates the terms of an order that has become final 
and was issued under section 5.25 or 5.26 of the 1971 Act must pay up 
to $1,000 per day for each day during which such violation continues. 
Orders issued under section 5.25 or 5.26 include temporary and 
permanent cease-and-desist orders. In addition, section 5.32(h) 
provides for the FCA to treat a directive issued under section 
4.3(b)(2), 4.3A(e), or 4.14A(i) of the 1971 Act as a final order issued 
under section 5.25 for purposes of assessing a CMP. Section 5.32(a) 
also states that ``[a]ny such institution or person who violates any 
provision of the [1971] Act or any regulation issued under this [1971] 
Act shall forfeit and pay a civil penalty of not more than $500 per day 
for each day during which such violation continues.'' Since the 1996 
adjustment, our regulations have required penalty levels of $1,100 and 
$550, respectively.
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    \3\ 12 U.S.C. 2268(a).
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    The prescribed cost-of-living adjustment formula or inflation 
factor is based on the difference between the Consumer Price Index 
(CPI) for June of the preceding year of the adjustment (June 1999) and 
the CPI for June of the year the CMP was last set (June 1996).\4\ We 
used the Department of Labor, Bureau of Labor Statistics--All Urban 
Consumers tables, in which the period 1982-84 was equal to 100, to get 
the CPI numbers. In this case, the CPI value was 156.7 for June 1996 
and was 166.2 for June 1999, resulting in an inflation factor of 1.06 
(i.e., a 6-percent increase). The prerounding adjustments are $1,166.69 
from $1,100 for violations of final orders and $583.34 from $550 for 
violations of the 1971 Act and FCA regulations.
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    \4\ We note that the 1996 adjustment was based on the June 1995 
CPI. In calculating the new adjustments, the FCPIA Act requires us 
to use the 3-year period from June 1996 to June 1999.
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    Section 5 of the FCPIA Act prescribes a rounding method based on 
the amount of the calculated increase. In our case, the applicable 
rounding method is to the nearest $10 for increases less than or equal 
to $100. Therefore, the resulting penalties are $1,170 for violations 
of a final order and $580 for violations of the 1971 Act and FCA 
regulations. The existing penalty amounts will continue to apply to 
violations that occurred

[[Page 46088]]

before the effective date of this amendment.
    We are also revising the language of Sec. 622.61(a) to clarify that 
the final order violations include violations of a capital directive 
(issued under section 4.3(b)(2) or 4.3A(e) of the Farm Credit Act) or a 
restructuring directive (issued under section 4.14A(i)), as well as 
violations of cease-and-desist orders. Penalties for violations of 
these directives are prescribed by section 5.32(h) of the 1971 Act.
    The FCPIA Act gives Federal agencies no discretion in the 
adjustment of CMPs for the rate of inflation, and it also requires a 
reassessment on at least a 4-year cycle. Moreover, this regulation is 
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.

List of Subjects in 12 CFR Part 622

    Administrative practice and procedures, 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 to read as 
follows:

PART 622--RULES OF PRACTICE AND PROCEDURE

    1. Revise the authority citation for part 622 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.

Subpart B--Rules and Procedures for Assessment and Collection of 
Civil Money Penalties

    2. Revise Sec. 622.61 to read as follows:


Sec. 622.61  Adjustment of civil money penalties by the rate of 
inflation under the Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended.

    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:
    (a) Amount of civil money penalty imposed under section 5.32 of the 
Act for violation of a final order issued under section 5.25 or 5.26 of 
the Act:

------------------------------------------------------------------------
                                                             The maximum
                If the violation occurred--                     daily
                                                             amount is--
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Before October 23, 2000....................................       $1,100
On or After October 23, 2000...............................        1,170
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    (b) Amount of civil money penalty for violation of the Act or 
regulations:

------------------------------------------------------------------------
                                                             The maximum
                If the violation occurred--                     daily
                                                             amount is--
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Before October 23, 1996....................................         $500
On or after October 23, 1996, but before October 23, 2000..          550
On or After October 23, 2000...............................          580
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    Dated: July 21, 2000.
Kelly Mikel Williams,
Secretary, Farm Credit Administration Board.
[FR Doc. 00-18962 Filed 7-26-00; 8:45 am]
BILLING CODE 6705-01-P