[Federal Register Volume 84, Number 22 (Friday, February 1, 2019)]
[Rules and Regulations]
[Pages 971-974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-00670]
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DEPARTMENT OF EDUCATION
34 CFR Parts 36 and 668
[Docket ID ED-2019-OGC-0004]
RIN 1801-AA18
Adjustment of Civil Monetary Penalties for Inflation
AGENCY: Department of Education.
ACTION: Final regulations.
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SUMMARY: The Department of Education (Department) issues these final
regulations to adjust the Department's civil monetary penalties (CMPs)
for inflation. This adjustment is required by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act),
which amended the Federal Civil Penalties Inflation Adjustment Act of
1990 (Inflation Adjustment Act). These final regulations provide the
2019 annual inflation adjustments being made to the penalty amounts in
the Department's final regulations published in the Federal Register on
January 16, 2018 (2018 final rule).
DATES: These regulations are effective February 1, 2019. The adjusted
CMPs established by these regulations are applicable only to civil
penalties assessed after February 1, 2019 whose associated violations
occurred after November 2, 2015.
FOR FURTHER INFORMATION CONTACT: Levon Schlichter, U.S. Department of
Education, Office of the General Counsel, 400 Maryland Avenue SW, Room
6E235, Washington, DC 20202-2241. Telephone: (202) 453-6387. Email:
[email protected].
If you use a telecommunications device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay Service, toll free, at 1-800-
877-8339.
Individuals with disabilities can obtain this document in an
accessible format (e.g., braille, large print, audiotape, or compact
disc) on request to the contact person listed in this section.
SUPPLEMENTARY INFORMATION:
Background. A CMP is defined in the Inflation Adjustment Act (28
U.S.C. 2461 note) as any penalty, fine, or other sanction that is (1)
for a specific monetary amount as provided by Federal law, or has a
maximum amount provided for by Federal law; (2) assessed or enforced by
an agency pursuant to Federal law; and (3) assessed or enforced
pursuant to an administrative proceeding or a civil action in the
Federal courts.
The Inflation Adjustment Act provides for the regular evaluation of
[[Page 972]]
CMPs to ensure that they continue to maintain their deterrent value.
The Inflation Adjustment Act required that each agency issue
regulations to adjust its CMPs beginning in 1996 and at least every
four years thereafter. The Department published its most recent cost
adjustment to its CMPs in the Federal Register on January 16, 2018 (83
FR 2062), and those adjustments became effective on the date of
publication.
The 2015 Act (section 701 of Pub. L. 114-74) amended the Inflation
Adjustment Act to improve the effectiveness of CMPs and to maintain
their deterrent effect.
The 2015 Act requires agencies to: (1) Adjust the level of CMPs
with an initial ``catch-up'' adjustment through an interim final rule
(IFR); and (2) make subsequent annual adjustments for inflation. Catch-
up adjustments are based on the percentage change between the Consumer
Price Index for all Urban Consumers (CPI-U) for the month of October in
the year the penalty was last adjusted by a statute other than the
Inflation Adjustment Act, and the October 2015 CPI-U. Annual inflation
adjustments are based on the percentage change between the October CPI-
U preceding the date of each statutory adjustment, and the prior year's
October CPI-U.\1\ The Department published an IFR with the initial
``catch-up'' penalty adjustment amounts on August 1, 2016 (81 FR
50321).
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\1\ If a statute that created a penalty is amended to change the
penalty amount, the Department does not adjust the penalty in the
year following the adjustment.
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In these final regulations, based on the CPI-U for the month of
October 2018, not seasonally adjusted, we are annually adjusting each
CMP amount by a multiplier for 2019 of 1.02522, as directed by the
Office of Management and Budget (OMB) Memorandum No. M-19-04 issued on
December 14, 2018.
The Department's Civil Monetary Penalties
The following analysis calculates new CMPs for penalty statutes in
the order in which they appear in 34 CFR 36.2. The penalty amounts are
being adjusted up based on the multiplier of 1.02522 provided in OMB
Memorandum No. M-19-04.
Statute: 20 U.S.C. 1015(c)(5).
Current Regulations: The CMP for 20 U.S.C. 1015(c)(5) (Section
131(c)(5) of the Higher Education Act of 1965, as amended (HEA)), as
last set out in statute in 1998 (Pub. Law 105-244, title I, section
101(a), October 7, 1998, 112 Stat. 1602), is a fine of up to $25,000
for failure by an institution of higher education (IHE) to provide
information on the cost of higher education to the Commissioner of
Education Statistics. In the 2018 final rule, we increased this amount
to $37,601.
New Regulations: The new penalty for this section is $38,549.
Reason: Using the multiplier of 1.02522 from OMB Memorandum No. M-
19-04, the new penalty is calculated as follows: $37,601 x 1.02522 =
$38,549.30, which makes the adjusted penalty $38,549, when rounded to
the nearest dollar.
Statute: 20 U.S.C. 1022d(a)(3).
Current Regulations: The CMP for 20 U.S.C. 1022d(a)(3) (Section
205(a)(3) of the HEA), as last set out in statute in 2008 (Pub. L. 110-
315, title II, section 201(2), August 14, 2008, 122 Stat. 3147), is a
fine of up to $27,500 for failure by an IHE to provide information to
the State and the public regarding its teacher-preparation programs. In
the 2018 final rule, we increased this amount to $31,320.
New Regulations: The new penalty for this section is $32,110.
Reason: Using the multiplier of 1.02522 from OMB Memorandum No. M-
19-04, the new penalty is calculated as follows: $31,320 x 1.02522 =
$32,109.89, which makes the adjusted penalty $32,110, when rounded to
the nearest dollar.
Statute: 20 U.S.C. 1082(g).
Current Regulations: The CMP for 20 U.S.C. 1082(g) (Section 432(g)
of the HEA), as last set out in statute in 1986 (Pub. L. 99-498, title
IV, section 402(a), October 17, 1986, 100 Stat. 1401), is a fine of up
to $25,000 for violations by lenders and guaranty agencies of Title IV
of the HEA, which authorizes the Federal Family Education Loan Program.
In the 2018 final rule, we increased this amount to $55,907.
New Regulations: The new penalty for this section is $57,317.
Reason: Using the multiplier of 1.02522 from OMB Memorandum No. M-
19-04, the new penalty is calculated as follows: $55,907 x 1.02522 =
$57,316.97, which makes the adjusted penalty $57,317, when rounded to
the nearest dollar.
Statute: 20 U.S.C. 1094(c)(3)(B).
Current Regulations: The CMP for 20 U.S.C. 1094(c)(3)(B) (Section
487(c)(3)(B) of the HEA), as set out in statute in 1986 (Pub. L. 99-
498, title IV, section 407(a), October 17, 1986, 100 Stat. 1488), is a
fine of up to $25,000 for an IHE's violation of Title IV of the HEA or
its implementing regulations. Title IV authorizes various programs of
student financial assistance. In the 2018 final rule, we increased this
amount to $55,907.
New Regulations: The new penalty for this section is $57,317.
Reason: Using the multiplier of 1.02522 from OMB Memorandum No. M-
19-04, the new penalty is calculated as follows: $55,907 x 1.02522 =
$57,316.97, which makes the adjusted penalty $57,317, when rounded to
the nearest dollar.
Statute: 20 U.S.C. 1228c(c)(2)(E).
Current Regulations: The CMP for 20 U.S.C. 1228c(c)(2)(E) (Section
429 of the General Education Provisions Act), as set out in statute in
1994 (Pub. L. 103-382, title II, section 238, October 20, 1994, 108
Stat. 3918), is a fine of up to $1,000 for an educational
organization's failure to disclose certain information to minor
students and their parents. In the 2018 final rule, we increased this
amount to $1,650.
New Regulations: The new penalty for this section is $1,692.
Reason: Using the multiplier of 1.02522 from OMB Memorandum No. M-
19-04, the new penalty is calculated as follows: $1,650 x 1.02522 =
$1,691.61, which makes the adjusted penalty $1,692, when rounded to the
nearest dollar.
Statute: 31 U.S.C. 1352(c)(1) and (c)(2)(A).
Current Regulations: The CMPs for 31 U.S.C. 1352(c)(1) and
(c)(2)(A), as set out in statute in 1989 (Pub. L. 101-121, title III,
section 319(a)(1), October 23, 1989, 103 Stat. 750), are a fine of
$10,000 to $100,000 for recipients of Government grants, contracts,
etc. that improperly lobby Congress or the Executive Branch with
respect to the award of Government grants and contracts. In the 2018
final rule, we increased these amounts to $19,639 to $196,387.
New Regulations: The new penalties for these sections are $20,134
to $201,340.
Reason: Using the multiplier of 1.02522 from OMB Memorandum No. M-
19-04, the new minimum penalty is calculated as follows: $19,639 x
1.02522 = $20,134.30, which makes the adjusted penalty $20,134, when
rounded to the nearest dollar. The new maximum penalty is calculated as
follows: $196,387 x 1.02522 = $201,339.88, which makes the adjusted
penalty $201,340, when rounded to the nearest dollar.
Statute: 31 U.S.C. 3802(a)(1) and (a)(2).
Current Regulations: The CMPs for 31 U.S.C. 3802(a)(1) and (a)(2),
as set out in statute in 1986 (Pub. L. 99-509, title VI, section
6103(a), Oct. 21, 1986, 100 Stat. 1937), are a fine of up to $5,000 for
false
[[Page 973]]
claims and statements made to the Government. In the 2018 final rule,
we increased this amount to $11,181.
New Regulations: The new penalty for this section is $11,463.
Reason: Using the multiplier of 1.02522 from OMB Memorandum No. M-
19-04, the new penalty is calculated as follows: $11,181 x 1.02522 =
$11,462.98, which makes the adjusted penalty $11,463, when rounded to
the nearest dollar.
Executive Orders 12866, 13563, and 13771
Regulatory Impact Analysis
Under Executive Order 12866, it must be determined whether this
regulatory action is ``significant'' and, therefore, subject to the
requirements of the Executive order and subject to review by OMB.
Section 3(f) of Executive Order 12866 defines a significant regulatory
action as an action likely to result in a rule that may--
(1) Have an annual effect on the economy of $100 million or more,
or adversely affect a sector of the economy; productivity; competition;
jobs; the environment; public health or safety; or State, local, or
Tribal governments or communities in a material way (also referred to
as ``economically significant'' regulations);
(2) Create serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles stated in the
Executive order.
We have determined that these final regulations: (1) Exclusively
implement the annual adjustment; (2) are consistent with OMB Memorandum
No. M-19-04; and (3) have an annual impact of less than $100 million.
Therefore, based on OMB Memorandum No. M-19-04, this is not a
significant regulatory action subject to review by OMB under section
3(f) of Executive Order 12866.
We have also reviewed these regulations under Executive Order
13563, which supplements and explicitly reaffirms the principles,
structures, and definitions governing regulatory review established in
Executive Order 12866. To the extent permitted by law, Executive Order
13563 requires that an agency--
(1) Propose or adopt regulations only upon a reasoned determination
that their benefits justify their costs (recognizing that some benefits
and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society,
consistent with obtaining regulatory objectives and taking into
account, among other things, and to the extent practicable, the costs
of cumulative regulations;
(3) In choosing among alternative regulatory approaches, select
those approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather
than the behavior or manner of compliance a regulated entity must
adopt; and
(5) Identify and assess available alternatives to direct
regulation, including economic incentives--such as user fees or
marketable permits--to encourage the desired behavior, or providing
information that enables the public to make choices.
Executive Order 13563 also requires an agency ``to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible.'' The Office of
Information and Regulatory Affairs of OMB has emphasized that these
techniques may include ``identifying changing future compliance costs
that might result from technological innovation or anticipated
behavioral changes.''
We are issuing these final regulations as required by statute and
in accordance with OMB Memorandum No. M-19-04. The Secretary has no
discretion to consider alternative approaches as delineated in the
Executive order. Based on this analysis and the reasons stated in the
preamble, the Department believes that these final regulations are
consistent with the principles in Executive Order 13563.
Under Executive Order 13771, for each new regulation that the
Department proposes for notice and comment or otherwise promulgates
that is a significant regulatory action under Executive Order 12866 and
that imposes total costs greater than zero, it must identify two
deregulatory actions. For fiscal year 2019, any new incremental costs
associated with a new regulation must be fully offset by the
elimination of existing costs through deregulatory actions. These final
regulations are not a significant regulatory action. Therefore, the
requirements of Executive Order 13771 do not apply.
Waiver of Rulemaking and Delayed Effective Date
Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the
Department generally offers interested parties the opportunity to
comment on proposed regulations. However, section 4(b)(2) of the 2015
Act (28 U.S.C. 2461 note) provides that the Secretary can adjust these
2019 penalty amounts notwithstanding the requirements of 5 U.S.C. 553.
Therefore, the requirements of 5 U.S.C. 553 for notice and comment and
delaying the effective date of a final rule do not apply here.
Regulatory Flexibility Act Certification
The Secretary certifies that these regulations will not have a
significant economic impact on a substantial number of small entities.
The formula for the amount of the inflation adjustments is prescribed
by statute and is not subject to the Secretary's discretion. These CMPs
are infrequently imposed by the Secretary, and the regulations do not
involve any special considerations that might affect the imposition of
CMPs on small entities.
Paperwork Reduction Act of 1995
These regulations do not contain any information collection
requirements.
Intergovernmental Review
This program is not subject to Executive Order 12372 and the
regulations in 34 CFR part 79.
Assessment of Educational Impact
Based on our own review, we have determined that these regulations
do not require transmission of information that any other agency or
authority of the United States gathers or makes available.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
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You may also access documents of the Department published in the
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by the Department.
List of Subjects
34 CFR Part 36
Claims, Fraud, Penalties.
[[Page 974]]
34 CFR Part 668
Administrative practice and procedure, Colleges and universities,
Consumer protection, Grant programs--education, Loan programs--
education, Reporting and recordkeeping requirements, Selective Service
System, Student aid, Vocational education.
Dated: January 29, 2019.
Betsy DeVos,
Secretary of Education.
For the reasons discussed in the preamble, the Secretary amends
parts 36 and 668 of title 34 of the Code of Federal Regulations as
follows:
PART 36--ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION
0
1. The authority citation for part 36 continues to read as follows:
Authority: 20 U.S.C. 1221e-3 and 3474; 28 U.S.C. 2461 note, as
amended by section 701 of Pub. Law 114-74, unless otherwise noted.
0
2. Section 36.2 is amended by revising Table I to read as follows:
Sec. 36.2 Penalty adjustment.
* * * * *
Table I--Section 36.2.--Civil Monetary Penalty Inflation Adjustments
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New maximum (and minimum, if applicable)
Statute Description penalty amount
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20 U.S.C. 1015(c)(5) (Section Provides for a fine, as set by $38,549.
131(c)(5) of the Higher Education Act Congress in 1998, of up to
of 1965 (HEA)). $25,000 for failure by an
institution of higher
education (IHE) to provide
information on the cost of
higher education to the
Commissioner of Education
Statistics.
20 U.S.C. 1022d(a)(3) (Section Provides for a fine, as set by $32,110.
205(a)(3) of the HEA). Congress in 2008, of up to
$27,500 for failure by an IHE
to provide information to the
State and the public
regarding its teacher-
preparation programs.
20 U.S.C. 1082(g) (Section 432(g) of Provides for a civil penalty, $57,317.
the HEA). as set by Congress in 1986,
of up to $25,000 for
violations by lenders and
guaranty agencies of Title IV
of the HEA, which authorizes
the Federal Family Education
Loan Program.
20 U.S.C. 1094(c)(3)(B) (Section Provides for a civil penalty, $57,317.
487(c)(3)(B) of the HEA). as set by Congress in 1986,
of up to $25,000 for an IHE's
violation of Title IV of the
HEA, which authorizes various
programs of student financial
assistance.
20 U.S.C. 1228c(c)(2)(E) (Section 429 Provides for a civil penalty, $1,692.
of the General Education Provisions as set by Congress in 1994,
Act). of up to $1,000 for an
educational organization's
failure to disclose certain
information to minor students
and their parents.
31 U.S.C. 1352(c)(1) and (c)(2)(A).... Provides for a civil penalty, $20,134 to $201,340.
as set by Congress in 1989,
of $10,000 to $100,000 for
recipients of Government
grants, contracts, etc. that
improperly lobby Congress or
the Executive Branch with
respect to the award of
Government grants and
contracts.
31 U.S.C. 3802(a)(1) and (a)(2)....... Provides for a civil penalty, $11,463.
as set by Congress in 1986,
of up to $5,000 for false
claims and statements made to
the Government.
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* * * * *
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
0
3. The authority citation for part 668 continues to read as follows:
Authority: 20 U.S.C. 1001-1003, 1070a, 1070g, 1085, 1087b,
1087d, 1087e, 1088, 1091, 1092, 1094, 1099c, 1099c-1, 1221e-3, and
3474; Pub. L. 111-256, 124 Stat. 2643; unless otherwise noted.
Sec. 668.84 [Amended]
0
4. Section 668.84 is amended in paragraph (a) by removing the number
``$55,907'' and adding in its place the number ``$57,317''.
[FR Doc. 2019-00670 Filed 1-31-19; 8:45 am]
BILLING CODE 4000-01-P