[Federal Register Volume 84, Number 51 (Friday, March 15, 2019)]
[Rules and Regulations]
[Pages 9451-9454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04898]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
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  Federal Register / Vol. 84, No. 51 / Friday, March 15, 2019 / Rules 
and Regulations  

[[Page 9451]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

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

[Docket No. FR-6139-F-01]
RIN 2501-AD90


Adjustment of Civil Monetary Penalty Amounts for 2019

AGENCY: Office of the General Counsel, HUD.

ACTION: Final rule.

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

SUMMARY: This rule provides for 2019 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 2019 inflation adjustment: April 15, 2019.

FOR FURTHER INFORMATION CONTACT: Ariel Pereira, Associate General 
Counsel, Office of Legislation and Regulations, Department of Housing 
and Urban Development, 451 7th Street SW, 200, Washington, DC 20024; 
telephone number 202-402-5138 (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 provides for advance notice and 
public comment on rules. However, as explained in Section III below, 
HUD has determined that advance notice and public comment on this final 
rule is unnecessary. This annual adjustment is for 2019.
    The annual adjustment is based on the percent change between the 
U.S. 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 1.02522.\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-19-04, Memorandum for the 
Heads of Executive Departments and Agencies, Implementation of 
Penalty Inflation Adjustments for 2019, Pursuant to the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015. 
(https://www.whitehouse.gov/wp-content/uploads/2017/11/m_19_04.pdf). 
(October 2018 CPI-U (252.885)/October 2017 CPI-U (246.663) = 
1.02522.)
    \2\ 28 U.S.C. 2461 note.
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II. This Final Rule

    This rule makes the required 2019 inflation adjustment of civil 
penalty amounts. Since HUD is not applying these adjustments 
retroactively, the 2019 increases apply to violations occurring on or 
after this rule's effective date. HUD provides a table showing how, for 
each component, the penalties are being adjusted for 2019 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 2018 adjustment (83 FR 32790, July 16, 2018). In the 
fifth column (``2019 Adjusted Amount''), HUD lists the penalty after 
applying the 2019 inflation adjustment.

----------------------------------------------------------------------------------------------------------------
                                                           Regulatory                            2019 adjusted
           Description             Statutory citation  citation (24 CFR)    Previous amount         amount
----------------------------------------------------------------------------------------------------------------
False Claims....................  Omnibus Budget       Sec.   28.10(a)    $11,181...........  $11,463.
                                   Reconciliation Act
                                   of 1986 (31 U.S.C.
                                   3802(a)(1)).
False Statements................  Omnibus Budget       Sec.   28.10(b)    $11,181...........  $11,463.
                                   Reconciliation Act
                                   of 1986 (31 U.S.C.
                                   3802(b)(1)).
Advance Disclosure of Funding...  Department of        Sec.   30.20       $19,639...........  $20,134.
                                   Housing and Urban
                                   Development Act
                                   (42 U.S.C.
                                   3537a(c)).
Disclosure of Subsidy Layering..  Department of        Sec.   30.25       $19,639...........  $20,134.
                                   Housing and Urban
                                   Development Act
                                   (42 U.S.C.
                                   3545(f)).
FHA Mortgagees and Lenders        HUD Reform Act of    Sec.   30.35       Per Violation:      Per Violation:
 Violations.                       1989 (12 U.S.C.                         $9,819.             $10,067
                                   1735f-14(a)(2)).                       Per Year:           Per Year:
                                                                           $1,963,870.         $2,013,399.
Other FHA Participants            HUD Reform Act of    Sec.   30.36       Per Violation:      Per Violation:
 Violations.                       1989 (12 U.S.C.                         $9,819.             $10,067
                                   1735f-14(a)(2)).                       Per Year:           Per Year:
                                                                           $1,963,870.         $2,013,399.
Indian Loan Mortgagees            Housing Community    Sec.   30.40       Per Violation:      Per Violation:
 Violations.                       Development Act of                      $9,819.             $10,067
                                   1992 (12 U.S.C.                        Per Year:           Per Year:
                                   1715z-13a(g)(2)).                       $1,963,870.         $2,013,399.
Multifamily & Section 202 or 811  HUD Reform Act of    Sec.   30.45       $49,096...........  $50,334.
 Owners Violations.                1989 (12 U.S.C.
                                   1735f-15(c)(2)).
Ginnie Mae Issuers & Custodians   HUD Reform Act of    Sec.   30.50       Per Violation:      Per Violation:
 Violations.                       1989 (12 U.S.C.                         $9,819.             $10,067
                                   1723i(b)).                             Per Year:           Per Year:
                                                                           $1,963,870.         $2,013,399.

[[Page 9452]]

 
Title I Broker & Dealers          HUD Reform Act of    Sec.   30.60       Per Violation:      Per Violation:
 Violations.                       1989 (12 U.S.C.                         $9,819.             $10,067
                                   1703).                                 Per Year:           Per Year:
                                                                           $1,963,870.         $2,013,399.
Lead Disclosure Violation.......  Title X--            Sec.   30.65       $17,395...........  $17,834.
                                   Residential Lead-
                                   Based Paint Hazard
                                   Reduction Act of
                                   1992 (42 U.S.C.
                                   4852d(b)(1)).
Section 8 Owners Violations.....  Multifamily          Sec.   30.68       $38,159...........  $39,121.
                                   Assisted Housing
                                   Reform and
                                   Affordability Act
                                   of 1997 (42 U.S.C.
                                   1437z-1(b)(2)).
Lobbying Violation..............  The Lobbying         Sec.   87.400      Min: $19,639......  Min: $20,134
                                   Disclosure Act of                      Max: $196,387.....  Max: $201,340.
                                   1995 (31 U.S.C.
                                   1352).
Fair Housing Act Civil Penalties  Fair Housing Act     Sec.   180.671(a)  No Priors: $20,521  No Priors: $21,039
                                   (42 U.S.C.                             One Prior: $51,302  One Prior: $52,596
                                   3612(g)(3)).                           Two or More         Two or More
                                                                           Priors: $102,606.   Priors: $105,194.
Manufactured Housing Regulations  Housing Community    Sec.   3282.10     Per Violation:      Per Violation:
 Violation.                        Development Act of                      $2,852.             $2,924
                                   1974 (42 U.S.C.                        Per Year:           Per Year:
                                   5410).                                  $3,565,045.         $3,654,955.
----------------------------------------------------------------------------------------------------------------

III. Justification for Final Rulemaking for the 2019 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 
final rule makes the required 2019 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, therefore, that it is unnecessary to delay the 
effectiveness of the 2019 inflation adjustments to solicit 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 2019 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 2019 
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.
    HUD 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

[[Page 9453]]

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.
---------------------------------------------------------------------------

    \3\ 2 U.S.C. 1532.
    \4\ 2 U.S.C. 1534.
---------------------------------------------------------------------------

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 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:

    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 the introductory text of paragraphs (a)(1) 
and (b)(1) to read as follows:


Sec.  28.10  Basis for civil penalties and assessments.

    (a) Claims. (1) A civil penalty of not more than $11,463 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 $11,463 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 $20,134 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 $20,134 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) Amount of penalty. The maximum penalty is $10,067 for each 
violation, up to a limit of $2,013,399 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) Amount of penalty. The maximum penalty is $10,067 for each 
violation, up to a limit of $2,013,399 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) Amount of penalty. The maximum penalty is $10,067 for each 
violation, up to a limit of $2,013,399 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 $50,334.
* * * * *


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) Amount of penalty. The maximum penalty is $10,067 for each 
violation, up to a limit of $2,013,399 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 $10,067 for each 
violation, up to a limit for any particular person of $2,013,399 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 $17,834 for each 
violation


[[Page 9454]]



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 $39,121.
* * * * *

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 $20,134 and not more than 
$201,340 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
appendix B of this part) to be filed or amended if required herein, 
shall be subject to a civil penalty of not less than $20,134 and not 
more than $201,340 for each such failure.
* * * * *
    (e) First offenders under paragraph (a) or (b) of this section 
shall be subject to a civil penalty of $20,134, absent aggravating 
circumstances. Second and subsequent offenses by persons shall be 
subject to an appropriate civil penalty between $20,134 and $201,340 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) $21,039, 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) $52,596, 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) $105,194, if the respondent has been adjudged in any 
administrative hearings or civil actions 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 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 is revised 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 this part 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 $2,924 for each violation, up to a 
maximum of $3,654,955 for any related series of violations occurring 
within one year from the date of the first violation.

    Dated: March 12, 2019.
J. Paul Compton, Jr.,
General Counsel.
[FR Doc. 2019-04898 Filed 3-14-19; 8:45 am]
BILLING CODE 4210-67-P