[Federal Register Volume 67, Number 220 (Thursday, November 14, 2002)]
[Rules and Regulations]
[Pages 68931-68932]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-28881]



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 Rules and Regulations
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  Federal Register / Vol. 67, No. 220 / Thursday, November 14, 2002 / 
Rules and Regulations  

[[Page 68931]]



FARM CREDIT ADMINISTRATION

12 CFR Part 622

RIN 3052-AC12


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 revises cost-of-living adjustments for all 
civil money penalties (CMPs) under the Farm Credit Administration's 
(FCA) jurisdiction. The Federal Civil Penalties Inflation Adjustment 
Act of 1990, as amended (FCPIA Act) requires us to adjust our CMPs at 
least once every 4 years for inflation. Our last adjustments, effective 
in October 2000, incorporated a rounding method based on the amount of 
the penalty increase. We have recently been advised by the General 
Accounting Office (GAO) that the adjustment should have been based on 
the amount of the penalty. Therefore, we have recalculated the 
penalties and have revised the penalty amounts.

EFFECTIVE DATE: The regulation will become effective on November 15, 
2002.

FOR FURTHER INFORMATION CONTACT: 

Mark L. Johansen, Policy Analyst, Office of Policy and Analysis, Farm 
Credit Administration, McLean, VA 22102-5090, (703) 883-4498, TTY (703) 
883-4434,

or

Rebecca S. Orlich, Senior Attorney, Office of General Counsel, Farm 
Credit Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 
883-2020.

SUPPLEMENTARY INFORMATION: 

I. Objective

    The objective of this regulation is to recalculate the CMP 
inflation adjustments consistent with the FCPIA Act.

II. Cost-of-Living Adjustment

    The FCPIA Act,\1\ 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 July 2000, effective in October of that year, when we increased the 
penalties from $1,100 to $1,170 per day for violation of an order that 
has become final, and from $550 to $580 per day for violation of the 
Farm Credit Act of 1971, as amended, or FCA regulations. See 65 FR 
46087 (July 27, 2000) for a full explanation of the types of violations 
subject to CMPs.
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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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    Earlier this year, the GAO began a government-wide review of 
agencies' application of the FCPIA Act. The GAO found that several 
agencies, including the FCA, took actions that did not conform to the 
strict language of the FCPIA Act and requested that each agency adjust 
its penalties accordingly. In a letter to the FCA, the GAO stated that 
they ``recognize some advantages to rounding on the basis of the size 
of the increase rather than the size of the penalty,'' but requested 
FCA ``to adjust the agency's civil penalties in a manner consistent 
with the requirements of the [FCPIA Act].'' See GAO-02-1084R FCA 
Penalty Adjustments.
    The FCPIA Act contains a formula for rounding CMP increases, 
setting out penalty ranges on amounts from less than or equal to $100, 
to amounts greater than $200,000, and provides different dollar 
multiples for rounding the increase in each penalty range. Section 5(a) 
of the FCPIA Act provides that increases determined under that 
subsection must be rounded to:

    [sbull] The nearest ``multiple of $10 in the case of penalties less 
than or equal to $100'';
    [sbull] The nearest ``multiple of $100 in the case of penalties 
greater than $100 but less than or equal to $1,000''; and
    [sbull] The nearest ``multiple of $1,000 in the case of penalties 
greater than $1,000 but less than or equal to $10,000.''

Emphasis added. In our 2000 regulation, we applied the rounding method 
to the amount of the increase in the penalty, rather than to the amount 
of the penalty itself.
    We based our 2000 CMP adjustments 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).\3\ For the 2000 adjustment, 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 were a $66.69 increase for the $1,100 penalty and a $33.34 
increase for the $550 penalty.
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    \3\ 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. 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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    Using the FCPIA Act's correct rounding formula, the $66.69 increase 
should have been rounded to the nearest $1,000, which is zero, because 
the penalty in question is in the $1,000-9,999 category. That rounding 
results in no adjustment to the $1,100 penalty. The $33.34 increase 
should have been rounded to the nearest $100, which is also zero, 
because the penalty in question is in the $100-999 category. That 
rounding results in no adjustment to the $550 penalty.
    We now amend Sec.  622.61 to provide for CMPs of $1,100 and $550. 
We note that the agency has not imposed any CMPs in the last 2 years; 
consequently, no person has been required to pay the higher penalty 
amounts we adopted in 2000.

III. Notice and Comment Not Required by Administrative Procedure Act

    The FCPIA Act gives Federal agencies no discretion in the 
adjustment of CMPs for the rate of inflation. 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. In addition, because 
this rule will relieve a burden by reducing the CMPs to the

[[Page 68932]]

correct amounts, the FCA has determined that it should become effective 
immediately.

IV. 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 the final rule will 
not have a significant economic impact on a substantial number of small 
entities. Each of the banks in the Farm Credit 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, Farm Credit System institutions are not ``small entities'' 
as defined in the Regulatory Flexibility Act.

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. 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.

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 daily amount is $1,100.
    (b) Amount of civil money penalty for violation of the Act or 
regulations:

------------------------------------------------------------------------
                                            The maximum daily amount is--
        If the violation occurred--
------------------------------------------------------------------------
Before October 23, 1996...................  $500
On or after October 23, 1996..............  $550
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    Dated: November 7, 2002.
Jeanette C. Brinkley,
Acting Secretary, Farm Credit Administration Board.
[FR Doc. 02-28881 Filed 11-13-02; 8:45 am]
BILLING CODE 6705-01-P