[Federal Register Volume 67, Number 155 (Monday, August 12, 2002)]
[Rules and Regulations]
[Pages 52410-52413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20284]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 385

[Docket No. RM02-11-000; Order No. 890]


Civil Monetary Penalty Inflation Adjustment Rule

August 5, 2002.
AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
issuing a final rule for a Civil Monetary Penalty Inflation Adjustment 
as

[[Page 52411]]

mandated by the Debt Collection Improvement Act of 1996 (DCIA) to 
adjust the Commission's civil monetary penalties for inflation on a 
periodic basis. Prior to the enactment of this law, the Commission's 
penalties had never been adjusted for inflation. This rule will allow 
the Commission's penalties to keep pace with inflation and thereby 
maintain the deterrent effect Congress intended when it originally 
specified penalties.
    The first mandatory adjustment, as mandated by the DCIA, increases 
all of the Commission's penalty provisions by ten percent. The 
Commission is required to review its penalties again at least once 
every four years thereafter and adjust them as necessary for inflation 
according to a specified formula.

DATES: This final rule is effective August 12, 2002.

FOR FURTHER INFORMATION CONTACT: Carolyn Van Der Jagt, Office of the 
General Counsel, Federal Energy Regulatory Commission, 888 First 
Street, NE., Washington, DC 20426, (202) 208-2246.

SUPPLEMENTARY INFORMATION:
    Before Commissioners: Pat Wood, III, Chairman; William L. 
Massey, Linda Breathitt, and Nora Mead Brownell.

I. Background

    1. The Federal Civil Penalties Inflation Adjustment Act of 1990 \1\ 
(Adjustment Act) as amended by the Debt Collection Improvement Act of 
1996 \2\ (DCIA) provided for the regular evaluation of civil monetary 
penalties (CMP) to ensure that they continued to maintain their 
deterrent value and that penalty amounts due to the Federal Government 
were properly accounted for and collected. On April 26, 1996, the 
Adjustment Act was amended by the DCIA to require that each agency 
issue regulations to adjust its CMPs for inflation at least every four 
years. The amendment further provides that any resulting increases in a 
CMP due to the inflation adjustment should apply only to the violations 
that occur subsequent to the date of the publication in the Federal 
Register of the increased amount of the CMP. The first inflation 
adjustment of any penalty shall not exceed ten percent of such penalty.
---------------------------------------------------------------------------

    \1\ 28 U.S.C. 2461.
    \2\ 31 U.S.C. 3701.
---------------------------------------------------------------------------

II. Discussion

    2. A CMP is defined as any penalty, fine, or other sanction that: 
(1) 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. This final rule adjusts the civil penalties that 
are established by law and assessed or enforced by the Commission.
    3. Section 5 of the DCIA sets forth the formula for adjusting the 
penalties for inflation:

The inflation adjustment described under Section 4 [of the DCIA] shall 
be determined by increasing the maximum CMP or the range of minimum and 
maximum CMPs as applicable, for each CMP by the cost-of-living 
adjustment. The term ``cost of living'' adjustment is the percentage 
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.

However, the DCIA also sets a ten percent cap on the first adjustment 
for inflation. Since the Commission's penalties have never previously 
been adjusted for inflation, this first statutorily required adjustment 
will be limited to ten percent.
    4. The DCIA rounding rules require that an increase be rounded as 
follows:
    1. If the increase is greater than $0 and less than or equal to 
$100, round to the nearest multiple of $10.
    2. If the increase is greater than $100 and less than or equal to 
$1,000, round to the nearest multiple of $100.
    3. If the increase is greater than $1,000 and less than or equal to 
$10,000, round to the nearest multiple of $1,000.
    4. If the increase is greater than $10,000 and less than or equal 
to $100,000, round to the nearest multiple of $5,000.
    5. If the increase is greater than $100,000 and less than or equal 
to $200,000, round to the nearest multiple of $10,000.
    6. If the increase is greater than $200,000, round to the nearest 
multiple of $25,000.
    5. The Commission is implementing the following adjustments:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Civil Monetary Penalty
     United States Code citation               description                Current maximum penalty amount          New adjusted maximum penalty amount
--------------------------------------------------------------------------------------------------------------------------------------------------------
15 U.S.C. 3414(b)(6)(A)(i), Sec. 504  Failure to comply with        $5,000.00................................  $5,500.00
 Natural Gas Policy Act.               NGPA's provisions.
16 U.S.C. 823b(c), Sec. 31 Federal    Failure to comply with rule,  10,000.00 per day........................  11,000.00 per day
 Power Act.                            license, and permit
                                       requirements under
                                       Subchapter 12.
16 U.S.C. 825n(a), Sec. 315 Federal   Failure to comply with        1,000.00.................................  1,100.00
 Power Act.                            Commission orders and
                                       rules, failure to submit
                                       required reports.
16 U.S.C. 825(o)-1(b), Sec. 316a      Violation of Sec. 211, 212,   10,000.00................................  11,000.00
 Federal Power Act.                    213, 214 of FPA.
--------------------------------------------------------------------------------------------------------------------------------------------------------

III. Administrative Findings

    6. The Administrative Procedure Act (APA) requires rulemakings to 
be published in the Federal Register and also mandates that an 
opportunity for comments be provided when an agency promulgates 
regulations. However, the APA exempts certain rules of agency 
procedures from its notice and comment requirements.\3\ The Commission 
is required by the DCIA to adjust CMPs for inflation. Additionally, the 
formula for the amount of the penalty adjustment is prescribed by 
Congress and is not subject to the exercise of discretion by the 
Commission. The Commission is only required to determine the amount of 
inflation adjustments by performing administrative computations. 
Accordingly, the Commission has determined for good cause that public 
notice and comment are unnecessary, impractical, or contrary to the 
public interest and that the rule should be published in final form.
---------------------------------------------------------------------------

    \3\ 5 U.S.C. 553(b).

---------------------------------------------------------------------------

[[Page 52412]]

IV. Regulatory Flexibility Statement

    7. The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996,\4\ (SBREFA) 
generally requires an agency to prepare a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Because notice and opportunity for comment are not required by 5 U.S.C. 
553, or any other law, a Regulatory Flexibility Analysis is not 
required and was not prepared for purposes of the RFA.
---------------------------------------------------------------------------

    \4\ 5 U.S.C. 801 et seq.
---------------------------------------------------------------------------

    8. This action will not have a significant impact on a substantial 
number of small entities. As stated, the Commission is required by the 
DCIA to adjust civil monetary penalties for inflation. The formula for 
the amount of the penalty adjustment is prescribed by Congress and is 
not subject to the exercise of discretion by the Commission. The 
Commission's action implements this statutory mandate and does not 
substantively alter the existing regulatory framework. This rule does 
not affect mechanisms already in place, including statutory provisions 
and the Commission's policies, that address the special circumstances 
of small entities when assessing penalties in enforcement actions.

V. Effective Date

    9. For the same reasons the Commission has determined that public 
notice and comment is unnecessary, impractical, and contrary to the 
public interest, the Commission finds that it has good cause to adopt 
an effective date that is less than 30 days after the date of 
publication in the Federal Register pursuant to the APA,\5\ and 
therefore, the regulation is effective upon publication.
---------------------------------------------------------------------------

    \5\ 5 U.S.C. 553(b)(3)(B).
---------------------------------------------------------------------------

VI. Congressional Review Act

    10. The Congressional Review Act,\6\ as added by the SBREFA, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. The Commission will submit a report 
containing the rule and other required information to the U.S. Senate, 
the U.S. House of Representatives, and the Comptroller General of the 
United States prior to publication of the rule in the Federal Register. 
A major rule cannot take effect until 60 days after it is published in 
the Federal Register. The Commission has concluded, with the 
concurrence of the Administrator of the Office of Information and 
Regulatory Affairs at the Office of Management and Budget (OMB), that 
this is not a ``major rule'' as defined in section 251 of the SBREFA. 
Therefore, for the reasons outlined above, this action will take effect 
August 12, 2002.
---------------------------------------------------------------------------

    \6\ 5 U.S.C. 801 et seq.
---------------------------------------------------------------------------

VII. Information Collection Statement

    11. The OMB regulations require that OMB approve certain 
information collection requirements imposed by agency rules.\7\ 
However, this final rule contains no information reporting 
requirements, and therefore is not subject to OMB approval.
---------------------------------------------------------------------------

    \7\ 5 CFR Part 1320.
---------------------------------------------------------------------------

VIII. Environmental Assessment

    12. Commission regulations describe the circumstances where 
preparation of an environmental assessment or an environmental impact 
statement will be required.\8\ The Commission has categorically 
excluded certain actions from this requirement as not having a 
significant effect on the human environment.\9\ This final rule 
promulgates a procedural rule that is considered a categorical 
exclusion under section 380.4(a)(2)(ii) of the Commission's 
regulations. Therefore, no environmental assessment or environmental 
impact statement is necessary.
---------------------------------------------------------------------------

    \8\ Regulations Implementing National Environmental Policy Act, 
52 FR 47897 (Dec. 17, 1987), codified at 18 CFR Part 380.
    \9\ 18 CFR 380.4.
---------------------------------------------------------------------------

IX. Document Availability

    13. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's 
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. 
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    14. From FERC's Home Page on the Internet, this information is 
available in the Federal Energy Regulatory Records Information System 
(FERRIS). The full text of this document is available on FERRIS in PDF 
and WordPerfect format for viewing, printing, and/or downloading. To 
access this document in FERRIS, type the docket number excluding the 
last three digits of this document in the docket number field.
    15. User assistance is available for FERRIS and the FERC's website 
during normal business hours from our Help line at (202) 208-2222 or 
the Public Reference Room at (202) 208-1371 Press 0, TTY (202) 208-
1659. E-mail the Public Reference Room at 
[email protected].

List of Subjects in 18 CFR Part 385

    Administrative practice and procedure, Electric power, Penalties, 
Pipelines, Reporting and recordkeeping requirements.

    By the Commission.
Linwood A. Watson, Jr.,
Deputy Secretary.


    In consideration of the foregoing, the Commission is amending Part 
385, Title 18 of the Code of Federal Regulations, as follows:

PART 385--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for part 385 is revised to read as 
follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717z, 3301-3432; 16 
U.S.C. 791a-825r, 2601-2645; 28 U.S.C. 2461; 31 U.S.C. 3701, 9701; 
42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-85 (1988).


    2. In part 385, subpart P is added to read as follows:
Subpart P--Civil Monetary Penalty Inflation Adjustment
Sec.
385.1601   Scope and purpose (Rule 1601).
385.1602   Civil penalties, as adjusted (Rule 1602).


Sec. 385.1601  Scope and purpose (Rule 1601).

    The purpose of this subpart is to make inflation adjustments to the 
civil monetary penalties provided by law within the jurisdiction of the 
Commission. These penalties shall be subject to review and adjustment 
as necessary at least every four years in accordance with the Federal 
Civil Penalties Inflation Act of 1990, as amended.


Sec. 385.1602  Civil penalties, as adjusted (Rule 1602).

    The civil monetary penalties provided by law within the 
jurisdiction of the Commission are:
    (a) 15 U.S.C. 3414(b)(6)(A)(1), Natural Gas Policy Act: from $5,000 
to $5,500.
    (b) 16 U.S.C. 823b(c), Federal Power Act: from $10,000 to $11,000.
    (c) 16 U.S.C. 825n(a), Federal Power Act: from $1,000 to $1,100.

[[Page 52413]]

    (d) 16 U.S.C. 825(o)-1(b), Federal Power Act: from $10,000 to 
$11,000.

[FR Doc. 02-20284 Filed 8-9-02; 8:45 am]
BILLING CODE 6717-01-P