[Federal Register Volume 83, Number 136 (Monday, July 16, 2018)]
[Rules and Regulations]
[Pages 32790-32794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-15116]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 28, 30, 87, 180, and 3282

[Docket No. FR-6076-F-01]
RIN 2501-AD86


Adjustment of Civil Monetary Penalty Amounts for 2018

AGENCY: Office of the General Counsel, HUD.

ACTION: Final rule.

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SUMMARY: This rule provides for 2018 inflation adjustments of civil 
monetary penalty amounts required by the Federal Civil Penalties 
Inflation Adjustment Act of 1990, as amended by the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015.

DATES: Effective date for 2018 inflation adjustment: August 15, 2018.

FOR FURTHER INFORMATION CONTACT: Dane Narode, Associate General 
Counsel, Office of Program Enforcement, Department of Housing and Urban 
Development, 1250 Maryland Avenue SW, Suite 200, Washington, DC 20024; 
telephone number 202-245-4141 (this is not a toll-free number). 
Hearing- or speech-impaired individuals may access this number via TTY 
by calling the Federal Information Relay Service, toll-free, at 800-
877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 (the 2015 Act) (Pub. L. 114-74, Sec. 701), which further 
amended the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410), requires agencies to make annual adjustments to 
civil monetary penalty (CMP) amounts for inflation ``notwithstanding 
section 553 of title 5, United States Code.'' Section 553 refers to the 
Administrative Procedure Act, which might otherwise require a delay for 
advance notice and opportunity for public comment on future annual 
inflation adjustments. This annual adjustment is for 2018.
    The annual adjustment is based on the percent change between the 
U.S.

[[Page 32791]]

Department of Labor's Consumer Price Index for All Urban Consumers 
(``CPI-U'') for the month of October preceding the date of the 
adjustment, and the CPI-U for October of the prior year (28 U.S.C. 2461 
note, section (5)(b)(1)). Based on that formula, the cost-of-living 
adjustment multiplier for 2018 is 1.02041.\1\ Pursuant to the 2015 Act, 
adjustments are rounded to the nearest dollar.\2\
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    \1\ Office of Management and Budget, M-18-03, Memorandum for the 
Heads of Executive Departments and Agencies, Implementation of 
Penalty Inflation Adjustments for 2018, Pursuant to the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015. 
(https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf). 
(October 2017 CPI-U (246.663)/October 2016 CPI-U (241.729) = 
1.02041.)
    \2\ 28 U.S.C. 2461 note.
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II. This Final Rule

    This rule makes the required 2018 inflation adjustment. Since HUD 
is not applying these adjustments retroactively, the 2018 increases 
apply to violations occurring on or after this rule's effective date. 
For each component, HUD provides a table showing how the penalties are 
being adjusted for 2018 pursuant to the 2015 Act. In the first column 
(``Description''), HUD provides a description of the penalty. In the 
second column (``Statutory Citation''), HUD provides the United States 
Code statutory citation providing for the penalty. In the third column 
(``Regulatory Citation''), HUD provides the Code of Federal Regulations 
citation under Title 24 for the penalty. In the fourth column 
(``Previous Amount''), HUD provides the amount of the penalty pursuant 
to the rule implementing the 2017 adjustment (82 FR 24521, May 30, 
2017). In the fifth column (``2018 Adjusted Amount''), HUD lists the 
penalty after applying the 2018 inflation adjustment.

----------------------------------------------------------------------------------------------------------------
                                                   Regulatory
         Description               Statutory      citation (24    Previous amount       2018 Adjusted amount
                                   citation           CFR)
----------------------------------------------------------------------------------------------------------------
False Claims & Statements....  Omnibus Budget             28.10  $10,957.........  $11,181.
                                Reconciliation
                                Act of 1986 (31
                                U.S.C.
                                3802(a)(1)).
Advance Disclosure of Funding  Department of              30.20  $19,246.........  $19,639.
                                Housing and
                                Urban
                                Development Act
                                (42 U.S.C.
                                3537a(c)).
Disclosure of Subsidy          Department of              30.25  $19,246.........  $19,639.
 Layering.                      Housing and
                                Urban
                                Development Act
                                (42 U.S.C.
                                3545(f)).
FHA Mortgagees and Lenders     HUD Reform Act             30.35  Per Violation:    Per Violation: $9,819.
 Violations.                    of 1989 (12                       $9,623.          Per Year: $1,963,870.
                                U.S.C. 1735f-                    Per Year:
                                14(a)(2)).                        $1,924,589.
Other FHA Participants         HUD Reform Act             30.36  Per Violation:    Per Violation: $9,819.
 Violations.                    of 1989 (12                       $9,623.          Per Year: $1,963,870.
                                U.S.C. 1735f-                    Per Year:
                                14(a)(2)).                        $1,924,589.
Indian Loan Mortgagees         Housing                    30.40  Per Violation:    Per Violation: $9,819.
 Violations.                    Community                         $9,623.          Per Year: $1,963,870.
                                Development Act                  Per Year:
                                of 1992 (12                       $1,924,589.
                                U.S.C. 1715z-
                                13a(g)(2)).
Multifamily & Section 202 or   HUD Reform Act             30.45  $48,114.........  $49,096.
 811 Owners Violations.         of 1989 (12
                                U.S.C. 1735f-
                                15(c)(2)).
Ginnie Mae Issuers &           HUD Reform Act             30.50  Per Violation:    Per Violation: $9,819.
 Custodians Violations.         of 1989 (12                       $9,623.          Per Year: $1,963,870.
                                U.S.C.                           Per Year:
                                1723i(b)).                        $1,924,589.
Title I Broker & Dealers       HUD Reform Act             30.60  Per Violation:    Per Violation: $9,819.
 Violations.                    of 1989 (12                       $9,623.          Per Year: $1,963,870.
                                U.S.C. 1703).                    Per Year:
                                                                  $1,924,589.
Lead Disclosure Violation....  Title X--                  30.65  $17,047.........  $17,395.
                                Residential
                                Lead-Based
                                Paint Hazard
                                Reduction Act
                                of 1992 (42
                                U.S.C.
                                4852d(b)(1)).
Section 8 Owners Violations..  Multifamily                30.68  $37,396.........  $38,159.
                                Assisted
                                Housing Reform
                                and
                                Affordability
                                Act of 1997 (42
                                U.S.C. 1437z-
                                1(b)(2)).
Lobbying Violation...........  The Lobbying              87.400  Min: $19,246....  Min: $19,639.
                                Disclosure Act                   Max: $192,459...  Max: $196,387.
                                of 1995 (31
                                U.S.C. 1352).
Fair Housing Act Civil         Fair Housing          180.671(a)  No Priors:        No Priors: $20,521.
 Penalties.                     Amendments Act                    $20,111.         One Prior: $51,302.
                                of 1988 (42                      One Prior:        Two or More Priors: $102,606.
                                U.S.C.                            $50,276.
                                3612(g)(3)).                     Two or More
                                                                  Priors:
                                                                  $100,554.
Manufactured Housing           Housing                  3282.10  Per Violation:    Per Violation: $2,852.
 Regulations Violation.         Community                         $2,795.          Per Year: $3,565,045.
                                Development Act                  Per Year:
                                of 1974 (42                       $3,493,738.
                                U.S.C. 5410).
----------------------------------------------------------------------------------------------------------------

II. Justification for Final Rulemaking for the 2018 Adjustments

    HUD generally publishes regulations for public comment before 
issuing a rule for effect, in accordance with its own regulations on 
rulemaking in 24 CFR part 10. However, part 10 provides for exceptions 
to the general rule if the agency finds good cause to omit advanced 
notice and public participation. The good cause requirement is 
satisfied when prior public procedure is ``impractical, unnecessary, or 
contrary to the public interest'' (see 24 CFR 10.1). As discussed, this 
rule makes the required 2018 inflation adjustment, which HUD does not 
have discretion to change. Moreover, the 2015 Act specifies that a 
delay in the effective date under the Administrative Procedure Act is 
not required for annual adjustments under the 2015 Act. HUD has 
determined,

[[Page 32792]]

therefore, that it is unnecessary to delay the effectiveness of the 
2018 inflation adjustments to solicit prior public comments.
    Section 7(o) of the Department of Housing and Urban Development Act 
(42 U.S.C. 3535(o)) requires that any HUD regulation implementing any 
provision of the Department of Housing and Urban Development Reform Act 
of 1989 that authorizes the imposition of a civil money penalty may not 
become effective until after the expiration of a public comment period 
of not less than 60 days. This rule does not authorize the imposition 
of a civil money penalty--rather, it makes a standard inflation 
adjustment to penalties that were previously authorized. As noted 
above, the 2018 inflation adjustments are made in accordance with a 
statutorily prescribed formula that does not provide for agency 
discretion. Accordingly, a delay in the effectiveness of the 2018 
inflation adjustments in order to provide the public with an 
opportunity to comment is unnecessary because the 2015 Act exempts the 
adjustments from the need for delay, the rule does not authorize the 
imposition of a civil money penalty, and, in any event, HUD would not 
have the discretion to make changes as a result of any comments.

IV. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and, therefore, subject to review by the Office of Management and 
Budget (OMB) in accordance with the requirements of the order. 
Executive Order 13563 (Improving Regulations and Regulatory Review) 
directs executive agencies to analyze regulations that are ``outmoded, 
ineffective, insufficient, or excessively burdensome, and to modify, 
streamline, expand, or repeal them in accordance with what has been 
learned. Executive Order 13563 also directs that, where relevant, 
feasible, and consistent with regulatory objectives, and to the extent 
permitted by law, agencies are to identify and consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public. Executive Order 13771 (Reducing Regulation and 
Controlling Regulatory Costs) requires that for every new regulation 
issued, at least two prior regulations be identified for removal, and 
that the cost of planned regulations be prudently managed and 
controlled through a budgeting process. As discussed above in this 
preamble, this final rule adjusts existing civil monetary penalties for 
inflation by a statutorily required amount.
    As a result of this review, OMB determined that this rule was not 
significant under Executive Order 12866 and Executive Order 13563. 
Moreover, as this rule is not a significant regulatory action under 
Executive Order 12866, it is not considered an Executive Order 13771 
regulatory action.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct 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 HUD has determined that good cause exists to issue this rule 
without prior public comment, this rule is not subject to the 
requirement to publish an initial or final regulatory flexibility 
analysis under the RFA as part of such action.

Unfunded Mandates Reform

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) \3\ 
requires that an agency prepare a budgetary impact statement before 
promulgating a rule that includes a Federal mandate that may result in 
the expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $100 million or more in any one 
year. If a budgetary impact statement is required, section 205 of UMRA 
also requires an agency to identity and consider a reasonable number of 
regulatory alternatives before promulgating a rule.\4\ However, the 
UMRA applies only to rules for which an agency publishes a general 
notice of proposed rulemaking. As discussed above, HUD has determined, 
for good cause, that prior notice and public comment is not required on 
this rule and, therefore, the UMRA does not apply to this final rule.
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    \3\ 2 U.S.C. 1532.
    \4\ 2 U.S.C. 1534.
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Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments and is not required by statute, or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This rule will not have federalism 
implications and would not impose substantial direct compliance costs 
on State and local governments or preempt State law within the meaning 
of the Executive order.

Environmental Review

    This interim final rule does not direct, provide for assistance or 
loan and mortgage insurance for, or otherwise govern, or regulate, real 
property acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this 
final rule is categorically excluded from environmental review under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

List of Subjects

24 CFR Part 28

    Administrative practice and procedure, Claims, Fraud, Penalties.

24 CFR Part 30

    Administrative practice and procedure, Grant programs-housing and 
community development, Loan programs-housing and community development, 
Mortgage insurance, Penalties.

24 CFR Part 87

    Government contracts, Grant programs, Loan programs, Lobbying, 
Penalties, Reporting and recordkeeping requirements.

24 CFR Part 180

    Administrative practice and procedure, Aged, Civil rights, Fair 
housing, Individuals with disabilities, Investigations, Mortgages, 
Penalties, Reporting and recordkeeping requirements.

24 CFR Part 3282

    Administrative practice and procedure, Consumer protection, 
Intergovernmental relations, Manufactured homes, Reporting and 
recordkeeping requirements.

    Accordingly, for the reasons described in the preamble, HUD amends 
24 CFR parts 28, 30, 87, 180, and 3282 to read as follows:

PART 28--IMPLEMENTATION OF THE PROGRAM FRAUD CIVIL REMEDIES ACT OF 
1986

0
1. The authority citation for part 28 continues to read as follows:


[[Page 32793]]


    Authority:  28 U.S.C. 2461 note; 31 U.S.C. 3801-3812; 42 U.S.C. 
3535(d).


0
2. In Sec.  28.10, revise paragraphs (a)(1) introductory text and 
(b)(1) introductory text to read as follows:


Sec.  28.10   Basis for civil penalties and assessments.

    (a) Claims. (1) A civil penalty of not more than $11,181 may be 
imposed upon any person who makes, presents, or submits, or causes to 
be made, presented, or submitted, a claim that the person knows or has 
reason to know:
* * * * *
    (b) Statements. (1) A civil penalty of not more than $11,181 may be 
imposed upon any person who makes, presents, or submits, or causes to 
be made, presented, or submitted, a written statement that:
* * * * *

PART 30--CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT

0
3. The authority citation for part 30 continues to read as follows:

    Authority: 12 U.S.C. 1701q-1, 1703, 1723i, 1735f-14, and 1735f-
15; 15 U.S.C. 1717a; 28 U.S.C. 1 note and 2461 note; 42 U.S.C. 
1437z-1 and 3535(d).


0
4. In Sec.  30.20, revise paragraph (b) to read as follows:


Sec.  30.20   Ethical violations by HUD employees.

* * * * *
    (b) Maximum penalty. The maximum penalty is $19,639 for each 
violation.

0
5. In Sec.  30.25, revise paragraph (b) to read as follows:


Sec.  30.25   Violations by applicants for assistance.

* * * * *
    (b) Maximum penalty. The maximum penalty is $19,639 for each 
violation.

0
6. In Sec.  30.35, revise the first sentence in paragraph (c)(1) to 
read as follows:


Sec.  30.35   Mortgagees and lenders.

* * * * *
    (c)(1) * * * The maximum penalty is $9,819 for each violation, up 
to a limit of $1,963,870 for all violations committed during any one-
year period. * * *
* * * * *

0
7. In Sec.  30.36, revise the first sentence in paragraph (c) to read 
as follows:


Sec.  30.36   Other participants in FHA programs.

* * * * *
    (c) * * * The maximum penalty is $9,819 for each violation, up to a 
limit of $1,963,870 for all violations committed during any one-year 
period. * * *

0
8. In Sec.  30.40, revise the first sentence in paragraph (c) to read 
as follows:


Sec.  30.40   Loan guarantees for Indian housing.

* * * * *
    (c) * * * The maximum penalty is $9,819 for each violation, up to a 
limit of $1,963,870 for all violations committed during any one-year 
period. * * *

0
9. In Sec.  30.45, revise paragraph (g) to read as follows:


Sec.  30.45   Multifamily and section 202 or 811 mortgagors.

* * * * *
    (g) Maximum penalty. The maximum penalty for each violation under 
paragraphs (c) and (f) of this section is $49,096.
* * * * *

0
10. In Sec.  30.50, revise the first sentence in paragraph (c) to read 
as follows:


Sec.  30.50   GNMA issuers and custodians.

* * * * *
    (c) * * * The maximum penalty is $9,819 for each violation, up to a 
limit of $1,963,870 during any one-year period. * * *

0
11. In Sec.  30.60, revise paragraph (c) to read as follows:


Sec.  30.60   Dealers or sponsored third-party originators.

* * * * *
    (c) Amount of penalty. The maximum penalty is $9,819 for each 
violation, up to a limit for any particular person of $1,963,870 during 
any one-year period.

0
12. In Sec.  30.65, revise paragraph (b) to read as follows:


Sec.  30.65   Failure to disclose lead-based paint hazards.

* * * * *
    (b) Amount of penalty. The maximum penalty is $17,395 for each 
violation.

0
13. In Sec.  30.68, revise paragraph (c) to read as follows:


Sec.  30.68   Section 8 owners.

* * * * *
    (c) Maximum penalty. The maximum penalty for each violation under 
this section is $38,159.
* * * * *

PART 87--NEW RESTRICTIONS ON LOBBYING

0
14. The authority citation for part 87 continues to read as follows:

    Authority:  28 U.S.C. 1 note; 31 U.S.C. 1352; 42 U.S.C. 3535(d).


0
15. In Sec.  87.400, revise paragraphs (a), (b), and (e) to read as 
follows:


Sec.  87.400   Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be 
subject to a civil penalty of not less than $19,639 and not more than 
$196,387 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
appendix B) to be filed or amended if required herein, shall be subject 
to a civil penalty of not less than $19,639 and not more than $196,387 
for each such failure.
* * * * *
    (e) First offenders under paragraph (a) or (b) of this section 
shall be subject to a civil penalty of $19,639, absent aggravating 
circumstances. Second and subsequent offenses by persons shall be 
subject to an appropriate civil penalty between $19,639 and $196,387 as 
determined by the agency head or his or her designee.
* * * * *

PART 180--CONSOLIDATED HUD HEARING PROCEDURES FOR CIVIL RIGHTS 
MATTERS

0
16. The authority citation for part 180 continues to read as follows:

    Authority: 28 U.S.C. 1 note; 29 U.S.C. 794; 42 U.S.C. 2000d-1, 
3535(d), 3601-3619, 5301-5320, and 6103.


0
17. In Sec.  180.671, revise paragraphs (a)(1) through (3) to read as 
follows:


Sec.  180.671   Assessing civil penalties for Fair Housing Act cases.

    (a) * * *
    (1) $20,521, if the respondent has not been adjudged in any 
administrative hearing or civil action permitted under the Fair Housing 
Act or any state or local fair housing law, or in any licensing or 
regulatory proceeding conducted by a federal, state, or local 
governmental agency, to have committed any prior discriminatory housing 
practice.
    (2) $51,302, if the respondent has been adjudged in any 
administrative hearing or civil action permitted under the Fair Housing 
Act, or under any state or local fair housing law, or in any licensing 
or regulatory proceeding conducted by a federal, state, or local 
government agency, to have committed one other discriminatory housing 
practice and the adjudication was made during the 5-year period 
preceding the date of filing of the charge.
    (3) $102,606, if the respondent has been adjudged in any 
administrative hearings or civil actions permitted under the Fair 
Housing Act, or under

[[Page 32794]]

any state or local fair housing law, or in any licensing or regulatory 
proceeding conducted by a federal, state, or local government agency, 
to have committed two or more discriminatory housing practices and the 
adjudications were made during the 7-year period preceding the date of 
filing of the charge.
* * * * *

PART 3282--MANUFACTURED HOME PROCEDURAL AND ENFORCEMENT REGULATIONS

0
18. The authority citation for part 3282 continues to read as follows:

    Authority: 28 U.S.C. 1 note; 28 U.S.C. 2461 note; 42 U.S.C. 
3535(d) and 5424.


0
19. Revise Sec.  3282.10 to read as follows:


Sec.  3282.10  Civil and criminal penalties.

    Failure to comply with these regulations may subject the party in 
question to the civil and criminal penalties provided for in section 
611 of the Act, 42 U.S.C. 5410. The maximum amount of penalties imposed 
under section 611 of the Act shall be $2,852 for each violation, up to 
a maximum of $3,565,045 for any related series of violations occurring 
within one year from the date of the first violation.

    Dated: July 8, 2018.
J. Paul Compton, Jr.,
General Counsel.
[FR Doc. 2018-15116 Filed 7-13-18; 8:45 am]
BILLING CODE 4210-67-P