[Federal Register Volume 85, Number 77 (Tuesday, April 21, 2020)]
[Rules and Regulations]
[Pages 22025-22028]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07761]


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NATIONAL FOUNDATION ON THE ARTS AND HUMANITIES

National Endowment for the Humanities

45 CFR Part 1168

RIN 3136-AA39


Implementing the Federal Civil Penalties Adjustment Act 
Improvements Act of 2015

AGENCY: National Endowment for the Humanities; National Foundation on 
the Arts and the Humanities.

ACTION: Interim final rule; request for comments.

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SUMMARY: The National Endowment for the Humanities (NEH) is adjusting 
the civil monetary penalties it imposes for violations of NEH's New 
Restrictions on Lobbying regulation, pursuant to the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 
Act). The 2015 Act, which amended the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (the Inflation Adjustment Act), requires such 
adjustments to improve the effectiveness of civil monetary penalties 
and to maintain their deterrent effect.

DATES: Effective date: This interim final rule is effective on April 
21, 2020. Comments must be submitted on or

[[Page 22026]]

before May 21, 2020. Applicability date: The adjusted penalty amounts 
will apply to penalties assessed on or after January 15, 2020, if the 
associated violations occurred after November 2, 2015.

ADDRESSES: You may send comments by email to [email protected].
    Instructions: Include ``RIN 3136-AA39'' in the subject line of the 
email.

FOR FURTHER INFORMATION CONTACT: Elizabeth Voyatzis, Deputy General 
Counsel, Office of the General Counsel, National Endowment for the 
Humanities, 400 7th Street SW, Room 4060, Washington, DC 20506; (202) 
606-8322; [email protected].

SUPPLEMENTARY INFORMATION:

1. Background

    For each regulation that imposes a civil monetary penalty, the 2015 
Act requires agencies to: (1) Adjust the level of civil monetary 
penalties with an initial ``catch-up'' inflation adjustment through an 
interim final rulemaking; and (2) make subsequent annual adjustments 
for inflation.
    The Inflation Adjustment Act defines ``civil monetary penalty'' as 
a penalty, fine, or other sanction that is (1) for a specific monetary 
amount provided by Federal law, or has a maximum amount provided 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 formula for the amount of a civil monetary penalty inflation 
adjustment is prescribed by law--as explained in Office of Management 
and Budget (OMB) Memorandum M-16-06 (February 24, 2016)--and is based 
on the percentage change in the Consumer Price Index for All Urban 
Consumers (CPI-U) published by the U.S. Department of Labor for the 
month of October preceding the date of the adjustment, relative to the 
October CPI-U in the year of the previous adjustment. Additionally, the 
2015 Act eliminated the ten-percent cap on adjustments imposed by the 
Debt Collection Improvement Act of 1996. Instead, the 2015 Act imposes 
a cap on the amount of the adjustment, such that the amount of increase 
may not exceed 150 percent of the pre-adjustment penalty amount. 
Therefore, the total penalty amount resulting from adjustments under 
the 2015 Act may not exceed 250 percent of the pre-adjustment penalty 
amount.
    NEH has only one regulation with civil monetary penalty provisions 
which requires adjustment under the 2015 Act: Its New Restrictions on 
Lobbying (45 CFR 1168).

2. Adjustments to Civil Monetary Penalties in NEH's New Restrictions on 
Lobbying Regulation

    This interim final rule incorporates the initial ``catch up'' 
adjustment and the annual adjustment for 2020, and applies those 
adjustments cumulatively to the civil monetary penalties in 45 CFR 
1168.400. The calculations for these adjustments are in accordance with 
the OMB memoranda providing guidance on implementing the initial 
``catch up'' adjustment \1\ and the 2020 adjustment \2\ under the 2015 
Act.
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    \1\ OMB Memorandum M-16-06 (February 24, 2016).
    \2\ OMB Memorandum M-20-05 (December 16, 2019).
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A. Initial ``Catch-Up'' Adjustment for Inflation

    NEH determined the first ``catch up'' adjustment by calculating the 
percent change between the CPI-U for October of the last year in which 
Congress adjusted the penalties (not including any adjustment made 
pursuant to the Inflation Adjustment Act before November 2, 2015), and 
the CPI-U for October 2015, and then rounding to the nearest dollar.
    Congress set the penalty amounts found in 31 U.S.C. 1352(c) in 
1989, and has not adjusted them since. At that time, the range of civil 
penalties was a minimum of $10,000 and a maximum of $100,000. Between 
October 1989 and October 2015, the CPI-U increased by 189.361 percent.
    Therefore, the post-adjustment minimum penalty under NEH's New 
Restrictions on Lobbying regulation is $10,000 x 1.89361 percent = 
$18,936.10, which rounds to $18,936. The post-adjustment maximum 
penalty under NEH's New Restrictions on Lobbying regulation is $100,000 
x 1.89361 = $189,361. These post-adjustment penalties are less than 250 
percent of the pre-adjustment penalties, so they do not implicate the 
post-adjustment amount limitation in the 2015 Act. Thus, the penalty 
range under NEH's New Restrictions on Lobbying regulation, for the 
purposes of the initial ``catch up'' adjustment, is a minimum of 
$18,936 and a maximum of $189,361.

B. 2020 Adjustment for Inflation

    This interim final rule also incorporates the required subsequent 
annual adjustment for 2020. NEH determined the 2020 adjustment by 
calculating the percent increase between the CPI-U for the month of 
October preceding the date of the adjustment (October 2019) and the 
CPI-U for the October one year prior to the October immediately 
preceding the date of the adjustment (October 2018).
    For 2019, the penalty range for violations under NEH's New 
Restrictions on Lobbying regulation was a minimum of $20,134 and a 
maximum of $201,340.\3\ Between October 2018 and October 2019, the CPI-
U increased by 101.764 percent.
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    \3\ Table 1 details the annual adjustments to New Restrictions 
on Lobbying Civil Monetary Penalties for years 2016-2020.
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    Therefore, the new, post-adjustment minimum penalty for 2020 under 
NEH's New Restrictions on Lobbying regulation is $20,134 x 1.01764 = 
$20,489.16, which rounds to $20,489. The new, post-adjustment maximum 
penalty for 2020 under NEH's New Restrictions on Lobbying regulation is 
$201,340 x 1.01764 = $204,891.64, which rounds to $204,892. These post-
adjustment penalties are less than 250 percent of the pre-adjustment 
penalties, so they do not implicate the post-adjustment amount 
limitation in the 2015 Act. Thus, the range of penalties under NEH's 
New Restrictions on Lobbying regulation, for the purposes of the 2020 
annual adjustment, is a minimum of $20,489 and a maximum of $204,892.

[[Page 22027]]



              Table 1--Annual Adjustments to New Restrictions on Lobbying Civil Monetary Penalties
                                                   [2016-2020]
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                                                                        Applicable
                                                                        multiplier
                                                                         based on
                  Year                      Baseline penalty range        percent     New baseline penalty range
                                                                        increase in
                                                                           CPI-U
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2016....................................  $10,000-$100,000..........         1.89361  $18,936-$189,361
2017....................................  $18,936-$189,361..........     \4\ 1.01636  $19,246-$192,459
2018....................................  $19,246-$192,459..........     \5\ 1.02041  $19,639-$196,387
2019....................................  $19,639-$196,387..........     \6\ 1.02522  $20,134-$201,340
2020....................................  $20,134-$201,340..........         1.01764  $20,489-$204,892
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\4\ OMB Memorandum M-17-11 (December 16, 2016).
\5\ OMB Memorandum M-18-03 (December 15, 2017).
\6\ OMB Memorandum M-19-04 (December 14, 2018).

3. Subsequent Annual Adjustments

    The 2015 Act requires agencies to make annual adjustments to civil 
penalty amounts no later than January 15 of each year following the 
initial adjustment. NEH will calculate the subsequent annual 
adjustments using the same method as the annual adjustment previously 
described herein. If the CPI-U does not increase, then the civil 
penalties remain the same. Therefore, if NEH adjusts penalties in 
January 2021, NEH will determine the adjustment by calculating the 
percent change between the CPI-U for October 2020 (the October 
immediately preceding the date of adjustment) and October 2019 (the 
October one year prior to October 2020).
    NEH will publish a Notice in the Federal Register containing the 
amounts of these annual inflation adjustments no later than January 15 
of each year.

4. Compliance

Administrative Procedure Act of 1946

    NEH finds good cause to issue this interim final rule without prior 
notice and comment. The 2015 Act requires agencies to adjust their 
civil monetary penalties according to a statutory formula, and NEH does 
not have any discretion when determining the amount of its adjustments; 
it merely performs ministerial computations to determine those amounts. 
As such, prior notice and comment is unnecessary because NEH would be 
unable to change the substance of this rule in response to suggestions 
from commenters. NEH is accepting public comments up to thirty (30) 
days after publication of this interim final rule, and may address any 
comments received when it publishes a final rule adopting this interim 
final rule.

Executive Order 12866, Regulatory Planning and Review, and Executive 
Order 13563, Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was 
therefore not submitted to OMB for review.

Executive Order 13771, Reducing Regulation and Controlling Regulatory 
Costs

    This action is not expected to be an Executive Order 13771 
regulatory action because this action is not significant under 
Executive Order 12866.

Executive Order 13132, Federalism

    This rulemaking does not have federalism implications. It 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.

Executive Order 12988, Civil Justice Reform

    This rulemaking meets the applicable standards set forth in section 
3(a) and 3(b)(2) of Executive Order 12988. Specifically, this interim 
final rule is written in clear language designed to help reduce 
litigation.

Executive Order 13175, Indian Tribal Governments

    Under the criteria in Executive Order 13175, NEH evaluated this 
interim final rule and determined that it will not have any potential 
effects on Federally recognized Indian Tribes.

Executive Order 12630, Takings

    Under the criteria in Executive Order 12630, this rulemaking does 
not have significant takings implications. Therefore, a takings 
implication assessment is not required.

Regulatory Flexibility Act of 1980

    This rulemaking will not have a significant adverse impact on a 
substantial number of small entities, including small businesses, small 
governmental jurisdictions, or certain small not-for-profit 
organizations.

Paperwork Reduction Act of 1995

    This rulemaking does not impose an information collection burden 
under the Paperwork Reduction Act. This action contains no provisions 
constituting a collection of information pursuant to the Paperwork 
Reduction Act.

Unfunded Mandates Reform Act of 1995

    This rulemaking does not contain a Federal mandate that will 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.

National Environmental Policy Act of 1969

    This interim final rule will not have a significant effect on the 
human environment.

Small Business Regulatory Enforcement Fairness Act of 1996

    This interim final rule will not be a major rule as defined in 
section 804 of the Small Business Regulatory Enforcement Fairness Act 
of 1996. This interim final rule will not result in an annual effect on 
the economy of $100 million or more, a major increase in costs or 
prices, significant adverse effects on competition, employment, 
investment, productivity, innovation, or on the ability of United 
States-based companies to compete with foreign-based companies in 
domestic and export markets.

E-Government Act of 2002

    All information about NEH required to be published in the Federal 
Register

[[Page 22028]]

may be accessed at www.neh.gov. The website https://www.regulations.gov 
contains electronic dockets for NEH's rulemakings under the 
Administrative Procedure Act of 1946.

Plain Writing Act of 2010

    To ensure this final rule was written in plain and clear language 
so that it can be used and understood by the public, NEH modeled the 
language of this final rule on the Federal Plain Language Guidelines.

Lists of Subjects in 45 CFR 1168

    Administrative practice and procedure, Lobbying, Penalties.

    For the reasons stated in the preamble, the National Endowment for 
the Humanities amends 45 CFR part 1168 as follows:

PART 1168--NEW RESTRICTIONS ON LOBBYING

0
1. The authority citation for part 1168 is revised to read as follows:

    Authority: 20 U.S.C. 959(a)(1); 28 U.S.C. 2461 note; 31 U.S.C. 
1352.


0
2. Amend Sec.  1168.400:
0
a. By removing ``$10,000'' and adding in its place ``$20,489'' and by 
removing ``$100,000'' and adding in its place ``$204,892'', 
respectively, each place they appear in paragraphs (a), (b), and (e); 
and
0
b. By adding paragraph (g).
    The addition reads as follows:


Sec.  1168.400  Penalties.

* * * * *
    (g) The penalty amounts listed under paragraphs (a), (b), and (e) 
of this section shall be adjusted annually for inflation. NEH will 
publish a document in the Federal Register containing the new penalty 
amounts no later than January 15 of each year.

0
3. Amend appendix A to part 1168:
0
a. By removing ``$10,000'' and adding in its place ``$20,489'' and by 
removing ``$100,000'' and adding in its place ``$204,892'', 
respectively, each place they appear; and
0
b. By adding a section entitled ``Annual Adjustments for Inflation'' at 
the end.
    The addition reads as follows:

Appendix A to Part 1168--Certification Regarding Lobbying

* * * * *

Annual Adjustments for Inflation

    The penalty amounts listed in this appendix will be adjusted 
annually for inflation. NEH will publish a document in the Federal 
Register containing the new penalty amounts no later than January 15 
of each year.

    Dated: April 8, 2020.
Caitlin Cater,
Attorney-Advisor, National Endowment for the Humanities.
[FR Doc. 2020-07761 Filed 4-20-20; 8:45 am]
BILLING CODE 7536-01-P