[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)]
[Rules and Regulations]
[Pages 41817-41818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15118]


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DEPARTMENT OF TRANSPORTATION

Saint Lawrence Seaway Development Corporation

33 CFR Part 401

RIN 2135-40


Civil Penalties

AGENCY: Saint Lawrence Seaway Development Corporation (SLSDC), 
Department of Transportation (DOT).

ACTION: Interim final rule.

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SUMMARY: This interim final rule updates the maximum civil penalty 
amounts for violations of statutes and regulations administered by 
SLSDC pursuant to the Federal Civil Penalties Inflation Adjustment 
Improvement Act of 2015. This final rule amends our regulations to 
reflect the new civil penalty amounts for violations of the Seaway 
Regulations and Rules under the authority of the Ports and Waterways 
Safety Act of 1972, as amended (PWSA).

DATES: Effective date: This rule is effective July 28, 2016.

FOR FURTHER INFORMATION CONTACT: Carrie Lavigne, Chief Counsel, SLSDC, 
telephone (315) 764-3231, 180 Andrews Street, Massena, NY 13362.

SUPPLEMENTARY INFORMATION:

I. Background

    On November 2, 2015, the Federal Civil Penalties Inflation 
Adjustment Improvement Act (the 2015 Act), Public Law 114-74, Section 
701, was signed into law. The purpose of the 2015 Act is to improve the 
effectiveness of civil monetary penalties and to maintain their 
deterrent effect. The 2015 Act requires agencies to make an initial 
catch up adjustment to the civil monetary penalties they administer 
through an interim final rule and then to make subsequent annual 
adjustments for inflation. The amount of increase of any adjustment to 
a civil penalty pursuant to the 2015 Act is limited to 150 percent of 
the current penalty. Agencies are required to issue the interim final 
rule with the initial catch up adjustment by July 1, 2016.
    The method of calculating inflationary adjustments in the 2015 Act 
differs substantially from the methods used in past inflationary 
adjustment rulemakings conducted pursuant to the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment 
Act), Public Law 101-410. Previously, adjustments to civil penalties 
were conducted under rules that required significant rounding of 
figures. For example, a penalty increase that was greater than $1,000, 
but less than or equal to $10,000, would be rounded to the nearest 
multiple of $1,000. While this allowed penalties to be kept at round 
numbers, it meant that penalties would often not be increased at all if 
the inflation factor was not large enough. Furthermore, increases to 
penalties were capped at 10 percent. Over time, this formula caused 
penalties to lose value relative to total inflation.
    The 2015 Act has removed these rounding rules; now, penalties are 
simply rounded to the nearest $1. While this creates penalty values 
that are no longer round numbers, it does ensure that penalties will be 
increased each year to a figure commensurate with the actual calculated 
inflation. Furthermore, the 2015 Act ``resets'' the inflation 
calculations by excluding prior inflationary adjustments under the 
Inflation Adjustment Act, which contributed to a decline in the real 
value of penalty levels. To do this, the 2015 Act requires agencies to 
identify, for each penalty, the year and corresponding amount(s) for 
which the maximum penalty level or range of minimum and maximum 
penalties was established (i.e., originally enacted by Congress) or 
last adjusted by statute or regulation other than pursuant to the 
Inflation Adjustment Act.
    The Director of the Office of Management and Budget (OMB) provided 
guidance to agencies in a February 24, 2016 memorandum on how to 
calculate the initial adjustment required by the 2015 Act.\1\ The 
initial catch up adjustment is based on the change between the Consumer 
Price Index for all Urban Consumers (CPI-U) for the month of October in 
the year the penalty amount was established or last adjusted by 
Congress and the October 2015 CPI-U. The February 24, 2016 memorandum 
contains a table with a multiplier for the change in CPI-U from the 
year the penalty was established or last adjusted to 2015. To arrive at 
the adjusted penalty the agency must multiply the penalty amount when 
it was established or last adjusted by Congress, excluding adjustments 
under the Inflation Adjustment Act, by the multiplier for the increase 
in CPI-U from the year the penalty was established or adjusted provided 
in the February 24, 2016 memorandum. The 2015 Act limits the initial 
inflationary adjustment to 150 percent of the current penalty. To 
determine whether the increase in the adjusted penalty is less than 150 
percent, the agency must multiply the current penalty by 250 percent. 
The adjusted penalty is the lesser of either the adjusted penalty based 
on the multiplier for CPI-U in Table A of the February 24, 2016 
memorandum or an amount equal to 250 percent of the current penalty. 
This interim final rule adjusts the civil penalties for violations of 
statutes and regulations that SLSDC administers consistent with the 
February 24, 2016 memorandum.
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    \1\ Memorandum from the Director of OMB to Heads of Executive 
Departments and Agencies, Implementation of the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (Feb. 
24, 2016), available at www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
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II. Inflationary Adjustments to Penalty Amounts in 33 CFR Part 401

    The Ports and Waterways Act of 1972, as amended by the Ports and 
Tanker Safety Act, Public Law 95-474, sec. 2, Oct. 17, 1978, 92 Stat. 
1471 (1978), established a maximum civil penalty of $25,000 for each 
violation of the Seaway Rules and Regulations at 33 CFR part 401. This 
civil penalty has not been updated since it was established, except for 
inflationary adjustments pursuant to the Inflation Adjustment Act of 
1990. Applying the multiplier for the increase in CPI-U for 1978 in 
Table A of the February 24, 2016 memorandum (3.54453) results in an 
adjusted civil penalty of $88,613, which is below the 150 percent cap 
Accordingly, paragraph (a) of Sec.  401.102 is being amended to change 
the amount of the penalty to $88,613.

Public Comment

    SLSDC is promulgating this interim final rule to ensure that the 
civil penalties amount contained in 33 CFR 401.102 reflects the 
statutorily mandated ranges as adjusted for inflation. Pursuant to the 
2015 Act, SLSDC is required to promulgate a ``catch-up adjustment'' 
through an interim final rule. Pursuant to the 2015 Act and 5 U.S.C. 
553(b)(3)(B), SLSDC finds that good cause exists for immediate 
implementation of this interim final rule without prior notice and 
comment because it would be

[[Page 41818]]

impracticable to delay publication of this rule for notice and comment 
and because public comment is unnecessary. By operation of the Act, 
SLSDC must publish the catch-up adjustment by interim final rule by 
July 1, 2016. Additionally, the 2015 Act provides a clear formula for 
adjustment of the civil penalties, leaving the agency little room for 
discretion. For these reasons, SLSDC finds that notice and comment 
would be impracticable and is unnecessary in this situation.

III. Rulemaking Analyses and Notices

Executive Order 12866, Executive Order 13563, and DOT Regulatory 
Policies and Procedures

    SLSDC has considered the impact of this rulemaking action under 
Executive Order 12866, Executive Order 13563, and the Department of 
Transportation's regulatory policies and procedures. This rulemaking 
document was not reviewed under Executive Order 12866 or Executive 
Order 13563. This action is limited to the adoption of adjustments of 
civil penalties under statutes that the agency enforces, and has been 
determined to be not ``significant'' under the Department of 
Transportation's regulatory policies and procedures and the policies of 
the Office of Management and Budget. Because this rulemaking does not 
change the number of entities that are subject to civil penalties, the 
impacts are limited.
    We also do not expect the increase in the civil penalty amount in 
33 CFR 401.102 to be economically significant. Since January 1, 2010 to 
the present, the SLSDC assessed a total of approximately $27,000 in 
civil fines and penalties. Thus, increasing the current civil penalty 
amount would not result in an annual effect on the economy of $100 
million or more.

Regulatory Flexibility Act

    We have also considered the impacts of this rule under the 
Regulatory Flexibility Act. I certify that this rule will not have a 
significant economic impact on a substantial number of small entities. 
The following provides the factual basis for this certification under 5 
U.S.C. 605(b). The St. Lawrence Seaway Regulations and Rules primarily 
relate to the activities of commercial users of the Seaway, the vast 
majority of whom are foreign vessel operators. Therefore, any resulting 
costs will be borne mostly by foreign vessels.

Executive Order 13132 (Federalism)

    Executive Order 13132 requires SLSDC to develop an accountable 
process to ensure ``meaningful and timely input by State and local 
officials in the development of regulatory policies that have 
federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that 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.'' Under Executive Order 13132, the agency may not issue a 
regulation with Federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, the agency 
consults with State and local governments, or the agency consults with 
State and local officials early in the process of developing the 
proposed regulation.
    This 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, as specified in Executive Order 13132.
    The reason is that this rule will generally apply to commercial 
users of the Seaway, the vast majority of whom are foreign vessel 
operators. Therefore, any resulting costs will be borne mostly by 
foreign vessels. Thus, the requirements of Section 6 of the Executive 
Order do not apply.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995, Public Law 104-4, 
requires agencies to prepare a written assessment of the cost, benefits 
and other effects of proposed or final rules that include a Federal 
mandate likely to result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of more than 
$100 million annually. Because this rule will not have a $100 million 
effect, no Unfunded Mandates assessment will be prepared.

Executive Order 12778 (Civil Justice Reform)

    This rule does not have a retroactive or preemptive effect. 
Judicial review of a rule may be obtained pursuant to 5 U.S.C. 702. 
That section does not require that a petition for reconsideration be 
filed prior to seeking judicial review.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980, we state 
that there are no requirements for information collection associated 
with this rulemaking action.

Privacy Act

    Please note that anyone is able to search the electronic form of 
all comments received into any of our dockets by the name of the 
individual submitting the comment (or signing the comment, if submitted 
on behalf of an association, business, labor union, etc.). You may 
review DOT's complete Privacy Act Statement in the Federal Register 
published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78), or 
you may visit http://dms.dot.gov.

List of Subjects in 33 CFR Part 401

    Hazardous materials transportation, Navigation (water), Penalties, 
Radio, Reporting and recordkeeping requirements, Vessels, Waterways.
    Accordingly, the Saint Lawrence Seaway Development Corporation is 
amending 33 CFR part 401 as follows:

PART 401--SEAWAY REGULATIONS AND RULES

Subpart A--Regulations

0
1. The authority citation for subpart A of part 401 is revised to read 
as follows:

    Authority:  33 U.S.C. 981-990, 1231 and 1232, 49 CFR 1.52, 
unless otherwise noted.


0
2. In Sec.  401.102, paragraph (a) is revised to read as follows:


Sec.  401.102  Civil penalty.

    (a) A person, as described in Sec.  401.101(b) who violates a 
regulation is liable to a civil penalty of not more than $88,613.
* * * * *

    Issued on June 22, 2016
Carrie Lavigne,
Chief Counsel.
[FR Doc. 2016-15118 Filed 6-27-16; 8:45 am]
 BILLING CODE 4910-61-P