[Federal Register Volume 81, Number 84 (Monday, May 2, 2016)]
[Rules and Regulations]
[Pages 26127-26129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09959]


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

RAILROAD RETIREMENT BOARD

20 CFR Part 356

RIN 3220-AB68


Civil Monetary Penalty Inflation Adjustment

AGENCY: Railroad Retirement Board.

ACTION: Interim final rule.

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

SUMMARY: As required by Section 701 of the Bipartisan Budget Act of 
2015, entitled the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015, the Railroad Retirement Board (Board) hereby 
amends its regulations to provide for adjustments in the minimum and 
maximum amounts of civil monetary penalties under the Board's 
jurisdiction. The amendment will increase the amount of penalties to 
adjust for inflation since the Board last adjusted its penalty amounts, 
and will provide the formula to be used for required annual adjustments 
in the penalty amounts.

DATES: Effective August 1, 2016. Comments must be received on or before 
July 1, 2016.

ADDRESSES: You may submit comments, identified by RIN 3220-AB68, by any 
of the following methods:
    1. Internet--Send comments via email to 
[email protected].
    2. Fax--(312) 751-3336.
    3. Mail--Secretary to the Board, Railroad Retirement Board, 844 N. 
Rush Street, Chicago, Illinois 60611-2092.
    Do not submit the same comments multiple times or by more than one 
method. Regardless of which method you choose, please state that your 
comments refer to RIN 3220-AB68.
    Caution: You should be careful to include in your comments only 
information that you wish to make publicly available as comments are 
posted without change, with any personal information provided. The 
Board strongly urges you not to include in your comments any personal 
information, such as Social Security numbers or medical information.

FOR FURTHER INFORMATION CONTACT: Marguerite P. Dadabo, Assistant 
General Counsel, Railroad Retirement Board, 844 North Rush Street, 
Chicago, IL 60611-2092, (312) 751-4945, TTD (312) 751-4701.

[[Page 26128]]


SUPPLEMENTARY INFORMATION: Section 701 of the Bipartisan Budget Act of 
2015, Public Law 114-74 (Nov. 2, 2015), entitled the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 
Act), amended the Federal Civil Penalties Inflation Adjustment Act of 
1990 (28 U.S.C. 2461 note) (Inflation Adjustment Act) to require 
agencies to publish regulations adjusting the amount of civil monetary 
penalties provided by law within the jurisdiction of the agency not 
later than July 1, 2016. The penalties authorized by the Program Fraud 
Civil Remedies Act, 31 U.S.C. 3801 et seq. (PFCRA), and the False 
Claims Act provisions at 31 U.S.C. 3729(a), are within the Board's 
jurisdiction, and the Board accordingly publishes this interim final 
rule in compliance with the 2015 Act.
    This interim final rule is being issued without prior public notice 
or opportunity for public comments. The 2015 Act's amendments to the 
Inflation Adjustment Act require the agency to adjust penalties 
initially through an interim final rulemaking, which does not require 
the agency to complete a notice and comment process prior to 
promulgating the interim final rule. The amendments also explicitly 
require the agency to make subsequent annual adjustments 
notwithstanding 5 U.S.C. 553 (the section of the Administrative 
Procedure Act that normally requires agencies to engage in notice and 
comment). Additionally, the formula used for adjusting the amount of 
civil penalties is given by statute, with no discretion provided to the 
Board regarding the substance of the adjustments. The Board is charged 
only with performing ministerial computations to determine the amount 
of adjustment to the civil penalties due to increases in the Consumer 
Price Index for all Urban Consumers (CPI-U).

Prior Adjustment History

    The Board last adjusted the civil penalties under its jurisdiction 
effective October 23, 1996, pursuant to the Inflation Adjustment Act, 
when the maximum penalty under the PFCRA was adjusted from $5,000 to 
$5,500 and the minimum and maximum penalties under 31 U.S.C. 3729 were 
adjusted from $5,000 to $5,500 and from $10,000 to $11,000, 
respectively. While the formula used to calculate these adjustments 
initially yielded higher final penalty amounts, the Debt Collection 
Improvement Act of 1996, Public Law 104-134, limited the amount of 
these previous adjustments to no more than 10 percent of the penalty 
amount or range, as appropriate. Therefore, the penalties were 
increased by the statutory maximum of 10 percent. Prior to the October 
23, 1996 adjustment, the Board last set or adjusted these penalty 
levels in 1986.

Initial Adjustment Under the 2015 Act

    For the first adjustment made in accordance with the 2015 Act, the 
amount of the adjustment is calculated based on the percent change 
between the CPI-U for October of the last year in which penalties were 
previously adjusted (not including any adjustment made pursuant to the 
Inflation Adjustment Act before November 2, 2015), and the CPI-U for 
October 2015. The 10 percent cap on adjustments imposed by the Debt 
Collection Improvement Act of 1996 has been eliminated by the 2015 Act. 
Instead, the 2015 Act imposes a cap on the amount of this initial 
adjustment, such that the amount of the increase may not exceed 150 
percent of the pre-adjustment penalty amount or range. As a result, the 
total penalty amount or range after the initial adjustment under the 
2015 Act may not exceed 250 percent of the pre-adjustment penalty 
amount or range.
    For purposes of the initial adjustment under the 2015 Act, the 
Board last set or adjusted the amount of civil penalties in 1986. The 
1996 adjustment must be disregarded for these calculations because that 
adjustment was made pursuant to the Inflation Adjustment Act and 
subject to the 10 percent cap imposed by the Debt Collection 
Improvement Act of 1996. Between October 1986 and October 2015, the 
CPI-U has increased by 215.628 percent. The post-adjustment penalty 
amount or range is obtained by multiplying the pre-adjustment penalty 
amount or range by the percent change in the CPI-U over the relevant 
time period, and rounding to the nearest dollar. Therefore, the new, 
post-adjustment maximum penalty under the PFCRA is $5,000 x 2.15628 = 
$10,781.40, which rounds to $10,781. The new, post-adjustment minimum 
penalty under 31 U.S.C. 3729 is $5,000 x 2.15628 = $10,781.40, which 
rounds to $10,781. The new, post-adjustment maximum penalty under 31 
U.S.C. 3729 is $10,000 x 2.15628 = $21,562.80, which rounds to $21,563. 
The new, post-adjustment penalties are less than 250 percent of the 
pre-adjustment penalties, so the limitation on the amount of the 
adjustment is not implicated. Therefore, the maximum penalty under the 
PFRCA for claims or statements made after August 1, 2016 will be 
$10,781, and the minimum and maximum penalties for false claims under 
31 U.S.C. 3729 will be $10,781 and $21,563 respectively.

Subsequent Annual Adjustments

    The 2015 Act also requires agencies to make annual adjustments to 
civil penalty amounts no later than January 15 of each year following 
the initial adjustment described above. The 2015 Act requires that 
these subsequent annual adjustments shall be made ``notwithstanding 
section 553 of title 5, United States Code.'' As noted earlier, this 
provision in the 2015 Act eliminates the requirement for public notice 
or opportunity for public comment prior to the publication of the final 
adjustment.
    For subsequent adjustments made in accordance with the 2015 Act, 
the amount of the adjustment is based on the percent increase between 
the CPI-U for the month of October preceding the date of the adjustment 
and the CPI-U for the October one year prior to the October immediately 
preceding the date of the adjustment. If there is no increase, there is 
no adjustment of civil penalties. Therefore, if the Board adjusts 
penalties in January 2017, the adjustment will be calculated based on 
the percent change between the CPI-U for October 2016 (the October 
immediately preceding the date of adjustment) and October 2015 (the 
October one year prior to October 2016). The Board will publish the 
amount of these annual inflation adjustments in the Federal Register no 
later than January 15 of each year, starting in 2017.

Regulatory Procedures

Executive Order 12866, as Supplemented by Executive Order 13563

    The Board, with the concurrence of the Office of Management and 
Budget, has determined that this is not a significant regulatory action 
under Executive Order 12866, as supplemented by Executive Order 13563. 
Therefore, no regulatory impact analysis is required.

Regulatory Flexibility Act

    The Board certifies that this rule would not have a significant 
economic impact on a substantial number of small entities because it 
affects individuals only. Therefore, a regulatory flexibility analysis 
is not required under the Regulatory Flexibility Act, as amended.

Paperwork Reduction Act

    This interim final rule imposes no reporting or recordkeeping 
requirements subject to OMB clearance.

List of Subjects in 20 CFR Part 356

    Claims, Penalties.

[[Page 26129]]

    For the reasons set out in the preamble, the Railroad Retirement 
Board revises title 20, chapter II, subchapter E, part 356 of the Code 
of Federal Regulations to read as follows:

PART 356--CIVIL MONETARY PENALTY INFLATION ADJUSTMENT

Sec.
356.1 Introduction.
356.2 Penalties under the Program Fraud Civil Remedies Act of 1986.
356.3 False claims.

    Authority:  28 U.S.C. 2461; 31 U.S.C. 3729, 3809.


Sec.  356.1  Introduction.

    (a) The Federal Civil Penalties Inflation Adjustment Act, as 
amended by the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (28 U.S.C. 2461 note), requires that civil 
monetary penalties be adjusted on an annual basis by the percentage by 
which the Consumer Price Index for all Urban Consumers (CPI-U) for the 
month of October preceding the adjustment exceeds the CPI-U for the 
month of October of the calendar year prior to the October preceding 
the adjustment, with final amounts rounded to the nearest dollar. That 
Act also requires a one-time catch up adjustment in the amount of the 
percentage by which the CPI-U for October 2015 exceeds the CPI-U for 
the month of October of the calendar year during which the amount of 
civil monetary penalty was established or adjusted under a provision of 
law other than the Federal Civil Penalties Inflation Adjustment Act.
    (b) Other than adjustments under the Federal Civil Penalties 
Inflation Adjustment Act, the Board last established or adjusted civil 
monetary penalties in 1986. The CPI-U increased by 215.628 percent 
between October 1986 and October 2015.
    (c) Imposition of the increased civil monetary penalties are 
limited to actions occurring after the effective date of the increases.
    (d) The amount of the one-time catch up adjustment may not exceed 
150 percent of the penalty amount or range as of November 2, 2015. The 
ten percent cap on increases imposed by the Debt Collection 
Improvements Act of 1996 was eliminated in the 2015 amendments to the 
Federal Civil Penalties Inflation Adjustment Act, and is no longer 
applicable.


Sec.  356.2  Penalties under the Program Fraud Civil Remedies Act of 
1986.

    (a) For claims or statements made on or before October 23, 1996, 
the maximum penalty which may be assessed under part 355 of this 
chapter is $5,000.
    (b) For claims or statements made after October 23, 1996, but 
before August 1, 2016, the maximum penalty which may be assessed under 
part 355 of this chapter is $5,500.
    (c) For claims or statements made on or after August 1, 2016, but 
before January 1, 2017, the maximum penalty which may be assessed under 
part 355 of this chapter is $10,781.
    (d) For claims or statements made on or after January 1, 2017, the 
maximum penalty which may be assessed under part 355 of this chapter is 
the larger of:
    (1) The amount for the previous calendar year; or
    (2) An amount adjusted for inflation, calculated by multiplying the 
amount for the previous calendar year by the percentage by which the 
CPI-U for the month of October preceding the current calendar year 
exceeds the CPI-U for the month of October of the calendar year two 
years prior to the current calendar year, adding that amount to the 
amount for the previous calendar year, and rounding the total to the 
nearest dollar.
    (e) Notice of the maximum penalty which may be assessed under part 
355 of this chapter for calendar years after 2016 will be published by 
the Board in the Federal Register on an annual basis on or before 
January 15 of each calendar year.


Sec.  356.3  False claims.

    (a) For claims or statements made on or before October 23, 1996, 
the minimum penalty which may be assessed under 31 U.S.C. 3729 is 
$5,000 and the maximum penalty is $10,000.
    (b) For claims or statements made after October 23, 1996, but 
before August 1, 2016, the minimum penalty which may be assessed under 
31 U.S.C. 3729 is $5,500 and the maximum penalty is $11,000.
    (c) For claims or statements made on or after August 1, 2016, but 
before January 1, 2017, the minimum penalty which may be assessed under 
31 U.S.C. 3729 is $10,781 and the maximum penalty is $21,563.
    (d) For claims or statements made on or after January 1, 2017, the 
minimum and maximum penalty amounts which may be assessed under 31 
U.S.C. 3729 is the larger of:
    (1) The amount for the previous calendar year; or
    (2) An amount adjusted for inflation, calculated by multiplying the 
amount for the previous calendar year by the percentage by which the 
CPI-U for the month of October preceding the current calendar year 
exceeds the CPI-U for the month of October of the calendar year two 
years prior to the current calendar year, adding that amount to the 
amount for the previous calendar year, and rounding the total to the 
nearest dollar.
    (e) Notice of the minimum and maximum penalty which may be assessed 
under 31 U.S.C. 3729 for calendar years after 2016 will be published by 
the Board in the Federal Register on an annual basis on or before 
January 15 of each calendar year.

    By Authority of the Board.
Martha P. Rico,
Secretary to the Board.
[FR Doc. 2016-09959 Filed 4-29-16; 8:45 am]
 BILLING CODE P