[Federal Register Volume 72, Number 27 (Friday, February 9, 2007)]
[Rules and Regulations]
[Pages 6143-6144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-569]


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DEPARTMENT OF HOMELAND SECURITY

Office of the Secretary

6 CFR Part 13

[DHS-2005-0059]
RIN 1601-AA11


Program Fraud Civil Remedies

AGENCY: Office of the Secretary, DHS.

ACTION: Final rule.

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SUMMARY: This final rule adopts, without change, the Program Fraud 
Civil Penalties interim rule published by the Department of Homeland 
Security (DHS) on October 12, 2005. This rule finalizes uniform 
administrative procedures for DHS to implement the Program Fraud Civil 
Remedies Act of 1986 (the Act).

DATES: The interim rule is adopted as final as of March 12, 2007.

FOR FURTHER INFORMATION CONTACT: Michael Russell, Acting Deputy 
Associate General Counsel, Division of General Law, Office of the 
General Counsel, Department of Homeland Security, Washington, DC 20528. 
Telephone: 202-205-4634 or facsimile: 202-772-9735, not toll free 
calls; or e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    The Program Fraud Civil Remedies Act of 1986, codified at 31 U.S.C. 
3801-3812 and adjusted in accordance with the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (Pub. L. 101-410), as amended by the 
Debt Collection Improvement Act of 1996 (Pub. L. 104-134), establishes 
an administrative remedy against anyone who makes a false Claim or 
written Statement to any of certain Federal agencies, including DHS. In 
brief, any person who submits a Claim or written Statement to an 
affected agency knowing or having reason to know that it is false, 
fictitious, or fraudulent, is liable for a penalty of up to $5,500 per 
false Claim or Statement and, in addition, with respect to Claims, for 
an assessment of up to double the amount falsely Claimed. The Act 
requires each affected Federal agency to publish rules and regulations 
necessary to implement the provisions of the Act. 31 U.S.C. 3809.
    The interim rule, published on October 12, 2005, at 70 FR 59209, 
contains procedures governing the imposition of civil penalties and 
assessments against persons who make, submit, or present, or cause to 
be made, submitted, or presented, false, fictitious, or fraudulent 
Claims or written Statements to DHS or any of its components. The final 
rule adopts those regulations as final.

II. Comment on the Interim Rule

    DHS solicited public comments on the interim rule and the comment 
period closed on November 15, 2005. DHS received one comment. The 
commenter expressed concern that the penalty of $5,500 per false Claim 
or Statement is far too low, because, the commenter asserted, the cost 
to the government for fraud exceeds this amount. The Act being 
implemented here limits the penalty and DHS is not authorized to exceed 
those limitations. The commenter also expressed concerns about how the 
government gives out money generally; these comments were beyond the 
scope of the rulemaking because the rule is limited to implementing the 
Program Fraud and Civil Remedies Act of 1986, and did not address 
government grant programs generally, or individual eligibility issues.

III. Regulatory Analyses

Executive Order 12866

    This final rule is considered by DHS to be a ``significant 
regulatory action'' under Executive Order 12866, section 3(f), 
Regulatory Planning and Review. 58 FR 51735, October 4, 1993 (Executive 
Order). Under Executive Order 12866 a significant regulatory action is 
subject to an Office of Management and Budget (OMB) review and to the 
requirements of the Executive Order. The Executive Order defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may: (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 entitlements, grants, user 
fees, or loan programs or the rights or obligations of recipients 
thereof; (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order. As discussed in the interim rule, because this 
rule announces procedures for a unique and relatively new cabinet-level 
department, and because DHS engages in uncommon relief and assistance 
efforts such as those following Hurricane Katrina, this rule may raise 
novel policy issues. 70 FR 59209, 59211 (Oct. 12, 2005). Accordingly, 
the rule was reviewed by the Office of Management and Budget.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) mandates that an agency 
conduct an RFA analysis when an agency is ``required by section 553 * * 
*, or any other law, to publish general notice of proposed rulemaking 
for any proposed rule, or publishes a notice of proposed rulemaking for 
interpretative rule involving the internal revenue laws of the United 
States * * *.'' 5 U.S.C. 603(a). RFA analysis is not required when a 
rule is exempt from notice and comment rulemaking under 5 U.S.C. 
553(b). DHS determined that good cause existed under 5 U.S.C. 553(b)(B) 
to exempt this rule from the notice and comment requirements of 5 
U.S.C. 553(b). See 70 FR 59209, 59210 (Oct. 12, 2005). Therefore, no 
RFA analysis under 5 U.S.C. 603 is required for this rule.

[[Page 6144]]

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1531-
1538) requires Federal agencies to assess the effects of their 
discretionary regulatory actions. In particular, UMRA addresses actions 
that may result in the expenditure by a State, local, or tribal 
government, in the aggregate, or by the private sector of $100,000,000 
or more in any one year. UMRA analysis is not required when a rule is 
exempt from notice and comment rulemaking under 5 U.S.C. 553(b). DHS 
determined that good cause existed under 5 U.S.C. 553(b)(B) to exempt 
this rule from the notice and comment requirements of 5 U.S.C. 553(b). 
See 70 FR 59209, 59210 (Oct. 12, 2005). Therefore, no UMRA analysis is 
required for this rule. Nevertheless, DHS does not expect this rule to 
result in such an expenditure.

Executive Order 13132, Federalism

    This final rule will not have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. It will not preempt any state laws. In 
accordance with section 6 of Executive Order 13132, we determine that 
this rule will not have federalism implications sufficient to warrant 
the preparation of a federalism impact statement.

Executive Order 12988, Civil Justice Reform

    This final rule meets the applicable standards in section 3(a) and 
3(b)(2) of Executive Order 12988.

Paperwork Reduction Act

    This final rule will not require or invite any additional record or 
information maintenance, submission, or collection for the DHS 
programs. Therefore, this final rule will not invoke the requirements 
of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

List of Subjects in 6 CFR Part 13

    Administrative practice and procedure, Claims, Fraud, Penalties.

Authority and Issuance

    Accordingly, for the reasons stated in the preamble, and pursuant 
to my authority as Secretary of Homeland Security, the interim rule 
adding 6 CFR part 13 that was published at 70 FR 59209 on October 12, 
2005, is adopted as a final rule without change.

Michael Chertoff,
Secretary.
[FR Doc. 07-569 Filed 2-8-07; 8:45 am]
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