[Federal Register Volume 77, Number 204 (Monday, October 22, 2012)]
[Rules and Regulations]
[Pages 64431-64434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25773]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1022

[Docket No. EP 716]


Civil Monetary Penalty Inflation Adjustment Rule

AGENCY: Surface Transportation Board.

ACTION: Final rule.

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SUMMARY: The Surface Transportation Board (Board) is issuing a final 
rule to adjust the Board's civil monetary penalties for inflation on a 
periodic basis pursuant to the Federal Civil Penalties Inflation Act of 
1990, as amended by the Debt Collection Improvement Act of 1996. Prior 
to the issuance of this rule, the Board's penalties have not been 
adjusted for inflation since they were prescribed in the Interstate 
Commerce Commission Termination Act of 1995 (ICCTA). As mandated by the 
Debt Collection Improvement Act, the Board's initial increase of its 
penalties cannot exceed 10%. The Board 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 rule is effective on October 22, 2012.

ADDRESSES: Information or questions regarding this final rule should 
reference Docket No. EP 716 and be in writing addressed to: Office of 
Proceedings, Surface Transportation Board, 395 E. Street SW., 
Washington, DC 20423-0001.

FOR FURTHER INFORMATION CONTACT: Marc Lerner, (202) 245-0390. Federal 
Information Relay Service (FIRS) for the hearing impaired: 1-800-877-
8339.

SUPPLEMENTARY INFORMATION: 
    Background. The Debt Collection Improvement Act of 1996 (DCIA), 
Public Law 104-134, 110 Stat. 1321, amended the Federal Civil Penalties 
Inflation Adjustment Act of 1990, Public Law 101-410, 104 Stat. 890 
(codified as amended at 28 U.S.C. 2461 note), to require each federal 
agency to adopt regulations at least once every four years that adjust 
for inflation the maximum amount of civil monetary penalties under the 
statutes administered by the agency.\1\ As defined, a civil monetary 
penalty is a statutorily prescribed specific amount, or maximum amount, 
provided by federal law that can be assessed by a federal agency and 
that can be enforced by the agency pursuant to an administrative 
proceeding or a civil action in a federal court. Congress passed this 
legislation on the basis of its findings that: (1) The power to impose 
civil monetary penalties is important to deterring violations of 
federal law and furthering the policy goals of federal laws and 
regulations; and (2) inflation has diminished the impact of these 
penalties.
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    \1\ Agency means an Executive agency as defined under 5 U.S.C. 
105. ``Executive agency'' includes an ``independent establishment,'' 
which is defined at 5 U.S.C. 104 in relevant part as ``an 
establishment in the executive branch'' that is not an ``Executive 
department.'' For purposes of the requirements of the DCIA, we 
determine that the Board is a covered agency.
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    Under the DCIA, the inflation adjustment is calculated by 
increasing the maximum civil monetary penalty amount per violation by 
the Cost-of-Living Adjustment, which is the percentage (if any) by 
which the Consumer Price Index for June of the year preceding the 
adjustment exceeds the Consumer Price Index for June of the year the 
civil monetary penalty amount was last set or adjusted, multiplied by 
the statutory maximum amount, rounded to the nearest specified amount 
using the formula contained in the statute. The DCIA requires agencies 
to round off the increase of each civil monetary penalty depending on 
its dollar amount: if the penalty is greater than $0 and less than or 
equal to $100, the increase is to be rounded to the nearest $10; if the 
penalty is greater than $100, but less than or equal to $1,000, the 
increase is rounded to the nearest $100; if the penalty is greater than 
$1,000 but less than or equal to $10,000, the increase is to be rounded 
to the nearest multiple of $1,000; if the penalty is greater than 
$10,000 but less than or equal to $100,000, the increase is to be 
rounded to the nearest multiple of $5,000; if the penalty is greater 
than $100,000 but less than or equal to $200,000, the increase is to be 
rounded to the nearest multiple of $10,000; and lastly, if the penalty 
is greater than $200,000, the increase is to be rounded to the nearest 
$25,000.
    Discussion. The statutory definition of civil monetary penalty 
covers the civil penalty provisions under the Rail Carrier (Part A), 
Motor and Water Carriers (Part B), and Pipeline Carrier (Part C) 
provisions of the Interstate Commerce Act (ICA), as amended by ICCTA. 
The Board's civil (and criminal) penalty authority related to rail 
transportation appears at 49 U.S.C. 11901-11908. The Board's penalty 
authority related to motor carriers, water carriers, brokers, and 
freight forwarders appears at 49 U.S.C. 14901-14915. The Board's 
penalty authority related to

[[Page 64432]]

pipeline carriers appears at 49 U.S.C. 16101-16106.\2\
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    \2\ The Board also has criminal penalty authority, enforceable 
in a federal criminal court. Congress has not, however, authorized 
federal agencies to adjust statutorily-prescribed criminal penalty 
provisions for inflation, and this rule does not address those 
provisions.
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    Because the Board was created in 1996, the year 2000 would have 
been the first time that the Board should have amended its regulations 
to adjust its civil monetary penalties for inflation.\3\ Subsequent 
amendments should have been effected in 2004, 2008, and in 2012. The 
Board's initial adjustment, however, cannot exceed 10% of each penalty, 
regardless of the rate of inflation. As set forth in the rule, the 
Board is adding 49 CFR 1022 to adjust the penalty for each violation 
for which a statutory minimum or maximum amount is specified under the 
ICA as amended by ICCTA. These adjusted penalties will apply only to 
violations which occur after the effective date of this regulation.
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    \3\ See GAO Report, GAO-03-409, Civil Penalties: Agencies Unable 
to Fully Adjust Penalties for Inflation Under Current Law (March 
2003), at 46 (STB not required to make initial adjustments until 
Jan. 1, 2000; as of Jun. 30, 2002, STB had not made the 
adjustments).
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    Immediate Final Rule. The Board has no discretion to set 
alternative levels of adjusted civil monetary penalties, since the 
amount of the inflation adjustment must be calculated in accordance 
with the statutory formula. Accordingly, the Board is issuing this 
regulation as a final rule, without opportunity for public notice and 
comment. The Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B), 
does not require that process ``when the agency for good cause finds'' 
that public notice and comment are ``impracticable, unnecessary, or 
contrary to the public interest.'' The Board finds that solicitation of 
public comments in this rulemaking is unnecessary and impracticable 
because Congress has prescribed that agencies adjust the civil monetary 
penalties under their jurisdiction and has provided no discretion to 
the agencies regarding the substance of the adjustments. The Board is 
only required to determine the amount of inflation adjustments by 
performing technical, ministerial computations. Thus, there is no need 
for affected parties to have 30 days' notice or opportunity to comment 
prior to the effectiveness of this regulation to adjust their conduct 
because the regulation concerns penalties for conduct that is already 
illegal under existing law. Accordingly, the Board has determined that 
there is good cause to make this regulation effective immediately upon 
publication.
    Regulatory Flexibility Statement. The Regulatory Flexibility Act 
(RFA), as amended by the Small Business Regulatory Enforcement Fairness 
Act of 1996, 5 U.S.C. 801 et seq., 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 the Board has determined that notice 
and comment are not required under the APA for this rulemaking, the 
requirements of the RFA do not apply.
    Paperwork Reduction Act. This final rule does not contain a new or 
amended information collection requirement subject to the Paperwork 
Reduction Act of 1995, 44 U.S.C. 3501 et seq.
    Effective Date. For the same reasons the Board has determined that 
public notice and comment is unnecessary and impracticable, the Board 
finds that it has good cause to make this regulation effective upon 
publication.

List of Subjects in 49 CFR Part 1022

    Administrative practice and procedures, Brokers, Civil penalties, 
Freight forwarders, Motor carriers, Pipeline carriers, Rail carriers, 
Water carriers.

    Decided: October 12, 2012.

    By the Board, Chairman Elliott, Vice Chairman Mulvey, and 
Commissioner Begeman.
Jeffrey Herzig,
Clearance Clerk.

    For the reasons set forth in the preamble, the Surface 
Transportation Board amends title 49, chapter X, of the Code of Federal 
Regulations by adding part 1022 to read as follows:

PART 1022--CIVIL MONETARY PENALTY INFLATION ADJUSTMENT

Sec.
1022.1 Scope and purpose.
1022.2 Definitions.
1022.3 Civil monetary penalty inflation adjustment.
1022.4 Cost-of-living adjustments of civil monetary penalties.

    Authority: 5 U.S.C. 551-557; 28 U.S.C. 2461 note; 49 U.S.C. 
11901, 14901, 14903, 14904, 14905, 14906, 14907, 14908, 14910, 
14915, 16101, 16103.


Sec.  1022.1  Scope and purpose.

    The purpose of this part is to establish a method to adjust for 
inflation the civil monetary penalties provided by law within the 
jurisdiction of the Board. These penalties shall be subject to review 
and adjustment at least once every four years using the method 
specified in the Debt Collection Improvement Act of 1996, Public Law 
104-134, 110 Stat. 1321, as it amends the Federal Civil Penalties 
Inflation Adjustment Act of 1990, Public Law 101-410, 104 Stat. 890 
(codified as amended at 28 U.S.C. 2461 note). The inflation adjustment 
is calculated by increasing the maximum civil monetary penalty amount 
per violation by the Cost-of-Living Adjustment, which is the percentage 
(if any) by which the Consumer Price Index for June of the year 
preceding the adjustment exceeds the Consumer Price Index for June of 
the year the civil monetary penalty amount was last set or adjusted, 
multiplied by the statutory maximum amount, rounded to the nearest 
specified amount using the formula contained in the statute. The 
initial adjustment, however, is capped at 10% of the penalty, 
regardless of the applicable rate of inflation.


Sec.  1022.2  Definitions.

    As used in this part:
    (a) Board means the Surface Transportation Board.
    (b) Civil monetary penalty means 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 Board 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 means the Consumer Price Index for all 
urban consumers published by the Department of Labor.
    (d) 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.


Sec.  1022.3  Civil monetary penalty inflation adjustment.

    The Board shall, immediately, and at least once every four years 
thereafter--
    (a) By regulation adjust each civil monetary penalty provided by 
law within the jurisdiction of the Board by the inflation adjustment 
described in Sec.  1022.4; and
    (b) Publish each such adjustment in the Federal Register.

[[Page 64433]]

Sec.  1022.4  Cost-of-living adjustments of civil monetary penalties.

    (a) Pursuant to the Debt Collection Improvement Act of 1996, as it 
amends the Federal Civil Penalties Inflation Adjustment Act of 1990, 
the increase of a civil monetary penalty assessed under this section 
shall be determined by multiplying the Cost-of-Living Adjustment by the 
existing maximum civil monetary penalty, rounded to the nearest 
specified amount using the guidelines set forth in paragraph (b) of 
this section.
    (b) Any increase determined under paragraph (a) of this section 
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; or
    (6) Multiple of $25,000 in the case of penalties greater than 
$200,000.
    (c) The first adjustment of any civil monetary penalty required by 
Sec.  1022.3 may not exceed 10% of such penalty.
    (d) The first application of the inflation adjustment method 
required by the statute results in the following adjustments to the 
civil monetary penalties within the jurisdiction of the Board:

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                                                                                                     Adjusted
                                                                                      Maximum         maximum
             U.S. Code citation               Civil monetary penalty description  penalty amount  penalty amount
                                                                                     year 1996       year 2012
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                                          Rail Carrier Civil Penalties
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49 U.S.C. 11901(a).........................  Unless otherwise specified, maximum          $5,000          $5,500
                                              penalty for each knowing violation
                                              under this part, and for each day.
49 U.S.C. 11901(b).........................  For each violation under sections               500             550
                                              11124(a)(2) or (b).
49 U.S.C. 11901(b).........................  For each day violation continues...              25           27.50
49 U.S.C. 11901(c).........................  Maximum penalty for each knowing              5,000           5,500
                                              violation under sections 10901-
                                              10906.
49 U.S.C. 11901(d).........................  For each violation under sections           100-500         110-550
                                              11123 or 11124(a)(1).
49 U.S.C. 11901(d).........................  For each day violation continues...              50              55
49 U.S.C. 11901(e)(1)......................  For each violation under sections               500             550
                                              11141-11145.
49 U.S.C. 11901(e)(2)......................  For each violation under section                100             110
                                              11144(b)(1).
49 U.S.C. 11901(e)(3)-(4)..................  For each violation of reporting                 100             110
                                              requirements, for each day.
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                                     Motor and Water Carrier Civil Penalties
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49 U.S.C. 14901(a).........................  Minimum penalty for each violation              500             550
                                              under sections 13501-13508, 13531,
                                              13901, 13902(c), and for each day.
49 U.S.C. 14901(a).........................  Minimum penalty if not registered             2,000           2,200
                                              to provide passenger
                                              transportation, for each violation
                                              under section 13901, and for each
                                              day.
49 U.S.C. 14901(b).........................  Maximum penalty for each violation           20,000          22,000
                                              of the hazardous waste rules under
                                              section 3001 of the Solid Waste
                                              Disposal Act.
49 U.S.C. 14901(d)(1)......................  Minimum penalty for each violation            1,000           1,100
                                              of household good regulations, and
                                              for each day.
49 U.S.C. 14901(d)(2)......................  Minimum penalty for each instance            10,000          11,000
                                              of transportation of household
                                              goods if broker provides estimate
                                              without carrier agreement.
49 U.S.C. 14901(d)(3)......................  Minimum penalty for each instance            25,000          27,500
                                              of transportation of household
                                              goods without being registered.
49 U.S.C. 14901(e).........................  Minimum penalty for each violation            2,000           2,200
                                              of a transportation rule.
49 U.S.C. 14901(e)(2)......................  Minimum penalty for each additional           5,000           5,500
                                              violation.
49 U.S.C. 14903(a).........................  Maximum penalty for undercharge or          100,000         110,000
                                              overcharge of tariff rate, for
                                              each violation.
49 U.S.C. 14904(a).........................  For first violation, rebates at                 200             220
                                              less than the rate in effect.
49 U.S.C. 14904(a).........................  For all subsequent violations......             250             275
49 U.S.C. 14904(b)(1)......................  Maximum penalty for first violation             500             550
                                              for undercharges by freight
                                              forwarders.
49 U.S.C. 14904(b)(1)......................  Maximum penalty for subsequent                2,000           2,200
                                              violations.
49 U.S.C. 14904(b)(2)......................  Maximum penalty for other first                 500             550
                                              violations under section 13702.
49 U.S.C. 14904(b)(2)......................  Maximum penalty for subsequent                2,000           2,200
                                              violations.
49 U.S.C. 14905(a).........................  Maximum penalty for each knowing             10,000          11,000
                                              violation of section 14103(a), and
                                              any violation of section 14103(b).
49 U.S.C. 14906............................  For first attempt to evade                      200             220
                                              regulation.
49 U.S.C. 14906............................  Minimum amount for each subsequent              250             275
                                              attempt to evade regulation.
49 U.S.C. 14907............................  Maximum penalty for recordkeeping/            5,000           5,500
                                              reporting violations.
49 U.S.C. 14908(a)(2)......................  Maximum penalty for violation of              2,000           2,200
                                              section 14908(a)(1).
49 U.S.C. 14910............................  When another civil penalty is not               500             550
                                              specified under this part, for
                                              each day.
49 U.S.C. 14915(a).........................  Minimum penalty for holding a                10,000          11,000
                                              household goods shipment hostage,
                                              for each day.
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                                        Pipeline Carrier Civil Penalties
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49 U.S.C. 16101(a).........................  Maximum penalty for violation of              5,000           5,500
                                              this part, for each day.
49 U.S.C. 16101(b)(1)......................  For each recordkeeping violation                500             550
                                              under section 15722, each day.
49 U.S.C. 16101(b)(2)......................  For each inspection violation                   100             110
                                              liable under section 15722, each
                                              day.

[[Page 64434]]

 
49 U.S.C. 16101(b)(3)......................  For each reporting violation under              100             110
                                              section 15723, each day.
49 U.S.C. 16103(a).........................  Maximum penalty for improper                  1,000           1,100
                                              disclosure of information.
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[FR Doc. 2012-25773 Filed 10-19-12; 8:45 am]
BILLING CODE 4915-01-P