[Federal Register Volume 83, Number 142 (Tuesday, July 24, 2018)]
[Rules and Regulations]
[Pages 34933-34935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-15764]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
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  Federal Register / Vol. 83, No. 142 / Tuesday, July 24, 2018 / Rules 
and Regulations  

[[Page 34933]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 185

RIN 3206-AN39


Program Fraud Civil Remedies: Civil Monetary Penalty Inflation 
Adjustment

AGENCY: Office of Personnel Management (OPM).

ACTION: Final rule.

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

SUMMARY: This rule adjusts the level of civil monetary penalties 
contained in U.S. Office of Personnel Management regulations 
implementing the Program Fraud Civil Remedies Act of 1986, with an 
initial ``catch-up'' adjustment under the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015 and Office of 
Management and Budget guidance. It also makes subsequent annual catch 
up adjustments.

DATES: Effective August 23, 2018.

FOR FURTHER INFORMATION CONTACT: Austin Fulk, Office of the General 
Counsel, Office of Personnel Management, 1900 E St, NW, Washington, DC 
20415, [email protected], (202) 606-1700.

SUPPLEMENTARY INFORMATION:

I. Background

    On November 2, 2015, the President signed into law the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 
701 of Pub. L. 114-74) (``the Act''). The Act required agencies to: (1) 
Adjust the level of civil monetary penalties with an initial ``catch-
up'' adjustment through an interim final rulemaking, and (2) make 
subsequent annual adjustments for inflation. The purpose of these 
adjustments is to maintain the deterrent effect of civil penalties.
    On July 19, 2016, OPM made an initial adjustment to the following 
civil monetary penalties to carry out the requirements of the 2015 Act, 
based on instructions found in Office of Management and Budget 
Memorandum M-16-06:

----------------------------------------------------------------------------------------------------------------
                                           Description of the         Current         Catchup        Adjusted
             CFR citation                        penalty              penalty       adjustment        penalty
----------------------------------------------------------------------------------------------------------------
5 CFR 185.103(a)......................  Civil Penalty for False           $5,000          $5,781         $10,781
                                         Claims.
5 CFR 185.103(f)(2)...................  Civil Penalty for False            5,000           5,781          10,781
                                         Statements.
----------------------------------------------------------------------------------------------------------------

    That rule took effect on August 1, 2016.
    This rule takes into account adjustments for the year 2016 based on 
inflation for that year. These calculations were made based on guidance 
contained in Office of Management and Budget Memorandum M-17-11:

----------------------------------------------------------------------------------------------------------------
                                                                                                  2016 Inflation
             CFR citation                  Description of the        Adjusted     2016 Inflation     adjusted
                                                 penalty              penalty       adjustment        amount
----------------------------------------------------------------------------------------------------------------
5 CFR 185.103(a)......................  Civil Penalty for False          $10,781            $176         $10,957
                                         Claims.
5 CFR 185.103(f)(2)...................  Civil Penalty for False           10,781             176          10,957
                                         Statements.
----------------------------------------------------------------------------------------------------------------

    This rule makes additional adjustments for the year 2017 based on 
inflation for that year. These calculations were made based on guidance 
contained in Office of Management and Budget Memorandum M-18-03:

----------------------------------------------------------------------------------------------------------------
                                                                                                  2016 Inflation
             CFR citation                  Description of the        Adjusted     2017 Inflation     adjusted
                                                 penalty              penalty       adjustment        amount
----------------------------------------------------------------------------------------------------------------
5 CFR 185.103(a)......................  Civil Penalty for False          $10,957            $223         $11,181
                                         Claims.
5 CFR 185.103(f)(2)...................  Civil Penalty for False           10,957             223          11,181
                                         Statements.
----------------------------------------------------------------------------------------------------------------

    This final rule is being issued without prior public notice or 
opportunity for public comments. The 2015 Act's amendments to the 
Inflation Adjustment Act required the agency to adjust penalties 
initially through an interim final rulemaking, which did not require 
the agency to complete a notice and comment process prior to 
promulgating the interim final rule. The amendments also explicitly 
required 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). The formula used for adjusting the amount of civil penalties 
is given by statute, with no discretion provided to OPM regarding the 
computation of the adjustments. OPM is charged only with performing 
ministerial computations to determine the amount of adjustment to the 
civil penalties due to increases in

[[Page 34934]]

the Consumer Price Index for all Urban Consumers (CPI-U).

II. Calculation of Adjustment

    The Office of Management and Budget (OMB) issued guidance on 
calculating the initial catch-up adjustment. See February 24, 2016, 
Memorandum for the Heads of Executive Departments and Agencies, from 
Shaun Donovan, Director, Office of Management and Budget, re: 
Implementation of the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015. Under this guidance, OPM has identified 
applicable civil monetary penalties and calculated the catch-up 
adjustment. A civil monetary penalty is any assessment with a dollar 
amount that is levied for a violation of a Federal civil statute or 
regulation, and is assessed or enforceable through a civil action in 
Federal court or an administrative proceeding. A civil monetary penalty 
does not include a penalty levied for violation of a criminal statute, 
or fees for services, licenses, permits, or other regulatory review. 
The calculated catch-up adjustment is based on the percent change 
between the Consumer Price Index for all Urban Consumers (CPI-U) for 
the month of October in the year of the previous adjustment (or in the 
year of establishment, if no adjustment has been made) and the October 
2015 CPI-U.
    The Office of Management and Budget published guidance on adjusting 
penalties based on the increase in the CPI-U between October of 2015 
and October of 2016, as well as between October of 2016 and 2017. See 
December 16, 2016, Memorandum for the Heads of Executive Departments 
and Agencies, from Shaun Donovan, Director, Office of Management and 
Budget, re: Implementation of the 2017 annual adjustment pursuant to 
the Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015; December 15, 2017 Memorandum for the Heads of Executive 
Departments and Agencies, from Mick Mulvaney, Director, Office of 
Management and Budget re: Implementation of Penalty Inflation 
Adjustments for 2018, Pursuant to the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015. This guidance provided OPM 
with the level to which civil penalties should be adjusted as annual 
inflation adjustments following the initial necessary update to comply 
with the 2015 Act. Although OPM published the initial interim final 
rulemaking to adjust its relevant penalties in compliance with the 2015 
Act, OPM has not yet issued the 2017 or 2018 adjustments. As a result, 
the increases associated with the first two annual inflation 
adjustments mandated under the 2015 Act after the original adjustment 
are combined here.

III. Executive Order Requirements

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a not significant regulatory 
action, under Executive Order 12866. E.O. 13771.
    This final rule is not an E.O. 13771 regulatory action because this 
rule is not significant under E.O. 12866.

A. Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities.
    The Regulatory Flexibility Act (RFA) requires an agency to prepare 
a regulatory flexibility analysis for rules unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. The RFA applies only to rules for 
which an agency is required to first publish a proposed rule. See 5 
U.S.C. 603(a) and 604(a). The Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 requires agencies to adjust 
civil penalties annually. No discretion is allowed. Thus, the RFA does 
not apply to this final rule.

B. Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 804(2))

    This rule is not a major rule under the Small Business Regulatory 
Enforcement Fairness Act. This rule:
    (a) Does not have an annual effect on the economy of $100 million 
or more.
    (b) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (c) Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
United States-based enterprises to compete with foreign-based 
enterprises.

C. Unfunded Mandate Reform Act of 1995 (2 U.S.C. 1532)

    This rule does not involve 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 and that such 
rulemaking will not significantly or uniquely affect small governments.

D. E.O. 12630, Takings

    This rule does not have takings implications.

E. E.O. 13132, Federalism

    We have examined this rule in accordance with Executive Order 
13132, Federalism, and have determined that this rule will not have any 
negative impact on the rights, roles, and responsibilities of State, 
local, or Tribal governments.

F. E.O. 12988, Civil Justice Reform

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:
    (a) Does not unduly burden the judicial system;
    (b) Meets the criteria of section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    (c) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

G. E.O. 13175, Consultation With Indian Tribes

    In accordance with Executive Order 13175, OPM has evaluated this 
rule and determined that it has no tribal implications.

H. Paperwork Reduction Act

    This rule does not involve any collections of information subject 
to the Paperwork Reduction Act of 1995, Public Law 104-13.

List of Subjects in 5 CFR Part 185

    Program fraud civil remedies, Claims, Penalties, Basis for civil 
penalties and assessments.

Office of Personnel Management.
Jeff T.H. Pon,
Director.

    For the reasons set forth in the preamble, OPM amends part 185 of 
title 5 of the Code of Federal Regulations as follows:

[[Page 34935]]

PART 185--PROGRAM FRAUD CIVIL REMEDIES: CIVIL MONETARY PENALTY 
INFLATION ADJUSTMENT

0
1. The authority citation for part 185 continues to read:

    Authority:  28 U.S.C. 2461 note.


Sec.  185.103   [Amended]

0
2. Section 185.103 is amended as follows:
0
a. In paragraph (a) introductory text, revise ``$10,781'' to read 
``$11,181''.
0
b. In paragraph (f)(2), revise ``$10,781'' to read ``$11,181''.

[FR Doc. 2018-15764 Filed 7-23-18; 8:45 am]
 BILLING CODE 6325-48-P