[Federal Register Volume 87, Number 182 (Wednesday, September 21, 2022)]
[Proposed Rules]
[Pages 57655-57657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20311]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

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

[Docket No. FR-6346-N-01]


Adjustment of Civil Monetary Penalty Amounts: Request for 
Comments

AGENCY: Office of the General Counsel, HUD.

ACTION: Request for comments.

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SUMMARY: Consistent with the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended by the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015 (``2015 Act''), HUD 
annually publishes a final rule adjusting its civil money penalty 
amounts for inflation according to the formula provided by the 2015 
Act. In these rules, HUD does not apply the adjustments retroactively 
and provides that the inflation-adjusted penalty amounts apply to 
violations occurring on or after the rule's effective date. HUD is 
considering revising this approach, however, and annually applying 
inflation-adjusted penalty amounts to violations assessed after the 
date of inflation, if the violation occurred after the enactment of the 
2015 Act. Through this request for comments, HUD seeks public input on 
the impact of applying inflation-adjusted penalty amounts on the date 
the penalty is assessed rather than the date of the violation.

DATES: Comments are due on or before: November 21, 2022.

ADDRESSES: Interested persons are invited to submit comments regarding

[[Page 57656]]

this request. All submissions must refer to the above docket number and 
title. There are two methods for submitting public comments:
    1. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
https://www.regulations.gov. HUD strongly encourages commenters to 
submit comments electronically. Electronic submission of comments 
allows the author maximum time to prepare and submit a comment, ensures 
timely receipt by HUD, and enables HUD to make them immediately 
available to the public. Comments submitted electronically through the 
https://www.regulations.gov website can be viewed by other submitters 
and interested members of the public. Commenters should follow 
instructions provided on that site to submit comments electronically.
    2. Submission of Comments by Mail. Members of the public may submit 
comments by mail to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th Street 
SW, Room 10276, Washington, DC 20410-0500. Due to security measures at 
all federal agencies, however, submission of comments by standard mail 
often results in delayed delivery. To ensure timely receipt of 
comments, HUD recommends that comments submitted by standard mail be 
submitted at least two weeks in advance of the deadline. HUD will make 
all comments received by mail available to the public at https://www.regulations.gov.
    No Facsimile Comments. Facsimile (FAX) comments will not be 
accepted.
    Public Inspection of Public Comments. All properly submitted 
comments and communications regarding this document submitted to HUD 
are available for public inspection and copying between 8 a.m. and 5 
p.m. weekdays at the above address. Due to security measures at the HUD 
Headquarters building, an advance appointment to review the public 
comments must be scheduled by calling the Regulations Division at 202-
708-3055 (this is not a toll-free number). Hearing- or speech-impaired 
individuals can dial 7-1-1 to access the Telecommunications Relay 
Service (TRS), which permits users to make text-based calls, including 
Text Telephone (TTY) and Speech to Speech (STS) calls. Copies of all 
comments submitted are available for inspection and downloading at 
http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Aaron Santa Anna, Associate General 
Counsel for Legislation and Regulations, Office of the General Counsel, 
Department of Housing and Urban Development, 451 7th Street SW, Room 
10276, Washington, DC 20024; telephone number 202-708-3055 (this is not 
a toll-free number). Hearing- or speech-impaired individuals can dial 
7-1-1 to access the Telecommunications Relay Service (TRS), which 
permits users to make text-based calls, including Text Telephone (TTY) 
and Speech to Speech (STS) calls.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 (the 2015 Act) (Pub. L. 114-74, sec. 701, 129 Stat. 599), 
amended the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101- 410, 104 Stat. 890), to improve the effectiveness of 
civil monetary penalties and to maintain their deterrent effect. 
Specifically, the 2015 Act, codified at 28 U.S.C. 2461, note, requires 
agencies with statutory authority to assess civil money penalties 
(CMPs) and publish annual adjustments for inflation. Section 5 of the 
2015 Act establishes the formula for calculating annual adjustments and 
is tied to the Consumer Price Index for all Urban Consumers (CPI-U). In 
accordance with the 2015 Act, annual adjustments after the initial 
``catch-up'' adjustment may be issued ``notwithstanding section 553 of 
Title 5, United States Code'', the notice and comment requirements of 
the Administrative Procedure Act.
    On June 15, 2016, HUD issued for public comment an interim rule, 
pursuant to the 2015 Act, to amend CMP regulations (81 FR 38931). HUD 
finalized the interim rule the following year in the Inflation Catch-up 
Adjustment of Civil Monetary Penalty Amounts Final Rule and Adjustment 
of Civil Monetary Penalty Amounts for 2017 (82 FR 24521). HUD's 2017 
final rule stated that ``Since HUD is not applying these adjustments 
retroactively, the 2016 increases being finalized apply to violations 
occurring prior to the effective date of this final rule (and on and 
after the effective date of the 2016 interim rule) and the 2017 
increases apply to violations occurring on or after this rule's 
effective date.''
    Since the publication of the 2017 final rule, HUD has continued to 
apply inflation-adjusted penalty amounts to violations occurring on or 
after the rule's effective date each year.\1\ In addition, HUD has 
implemented its adjusted penalty amounts uniformly across the several 
programs for which it has authority to assess penalties.
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    \1\ See Adjustment of Civil Monetary Penalty Amounts for 2018-
2022 at 83 FR 32790; 84 FR 9451; 85 FR 13041; 86 FR 14370; and 87 FR 
24418.

  HUD Statutory and Regulatory Authority for Imposition of Civil Money
                                Penalties
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                                                          Regulatory
          Description            Statutory citation   citation  (24 CFR)
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False Claims...................  Omnibus Budget      Sec.   28.10(a).
                                  Reconciliation
                                  Act of 1986 (31
                                  U.S.C.
                                  3802(a)(1)).
False Statements...............  Omnibus Budget      Sec.   28.10(b).
                                  Reconciliation
                                  Act of 1986 (31
                                  U.S.C. 3802
                                  (a)(2)).
Advance Disclosure of Funding..  Department of       Sec.   30.20.
                                  Housing and Urban
                                  Development Act
                                  (42 U.S.C.
                                  3537a(c)).
Disclosure of Subsidy Layering.  Department of       Sec.   30.25.
                                  Housing and Urban
                                  Development Act
                                  (42 U.S.C.
                                  3545(f)).
FHA Mortgagees and Lenders       HUD Reform Act of   Sec.   30.35.
 Violations.                      1989 (12 U.S.C.
                                  1735f-14(a)(2)).
Other FHA Participants           HUD Reform Act of   Sec.   30.36.
 Violations.                      1989 (12 U.S.C.
                                  1735f-14(a)(2)).
Indian Home Loan Guarantee       Housing Community   Sec.   30.40.
 Lender or Holder Violations.     Development Act
                                  of 1992 (12
                                  U.S.C. 1715z-
                                  13a(g)(2)).
Multifamily & Section 202 or     HUD Reform Act of   Sec.   30.45.
 811 Owners Violations.           1989 (12 U.S.C.
                                  1735f-15(c)(2)).

[[Page 57657]]

 
Ginnie Mae Issuers & Custodians  HUD Reform Act of   Sec.   30.50.
 Violations.                      1989 (12 U.S.C.
                                  1723i(a)).
Title I Broker & Dealers         HUD Reform Act of   Sec.   30.60.
 Violations.                      1989 (12 U.S.C.
                                  1703).
Lead Disclosure Violation......  Title X--           Sec.   30.65.
                                  Residential Lead-
                                  Based Paint
                                  Hazard Reduction
                                  Act of 1992 (42
                                  U.S.C.
                                  4852d(b)(1)).
Section 8 Owners Violations....  Multifamily         Sec.   30.68.
                                  Assisted Housing
                                  Reform and
                                  Affordability Act
                                  of 1997 (42
                                  U.S.C. 1437z-
                                  1(b)(2)).
Lobbying Violation.............  The Lobbying        Sec.   87.400.
                                  Disclosure Act of
                                  1995 (31 U.S.C.
                                  1352).
Fair Housing Act Civil           Fair Housing Act    Sec.   180.671(a).
 Penalties.                       (42 U.S.C.
                                  3612(g)(3)).
Manufactured Housing             Housing Community   Sec.   3282.10.
 Regulations Violation.           Development Act
                                  of 1974 (42
                                  U.S.C. 5410).
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II. This Document

    This document announces that HUD is considering revising its 
implementation of the 2015 Act by providing that the adjusted penalty 
amounts would apply to penalties assessed after the publication of the 
adjustment, rather than to violations occurring after publication of 
the adjustment, as long as the violation occurred after the enactment 
of the 2015 Act. HUD is considering applying the inflation-adjusted 
penalty amounts in this manner after revisiting Section 6 of the 2015 
Act which provides that an ``increase under this Act in a civil 
monetary penalty shall apply only to civil monetary penalties, 
including those whose associated violation predate such increase, which 
are assessed after the date the increase takes effect.'' 28 U.S.C. 
2461, note. The Office of Management and Budget (``OMB'') guidance (M-
22-07) which provides the 2022 inflation multiplier also provides that 
the adjusted penalty applies to ``penalties assessed after the 
effective date of the applicable adjustment''.\2\ Finally, a review of 
the penalty adjustments published by other federal agencies suggests 
that they apply the inflation-adjusted penalty amounts to penalties 
assessed after the date of the increase as long as the violation 
occurred after the enactment of the 2015 Act.
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    \2\ December 15, 2021, Memorandum for the Heads of Executive 
Departments and Agencies (M-22-07) from Shalanda D. Young, Acting 
Director, Office of Management and Budget, Implementation of Penalty 
Inflation Adjustments for 2022, Pursuant to the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (OMB 
Memorandum), at 4.
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III. Request for Public Comments

    In considering the forthcoming 2023 fiscal year, HUD is considering 
whether to revise its implementation of the 2015 Act to apply 
inflation-adjusted penalty amounts on the date the penalty is assessed, 
rather than the earlier date of the violation, and is requesting public 
comment. HUD is interested in the impact of such a change, as well as 
the impact of applying the inflation-adjusted penalty to the date of 
assessment for some, but not all, programs.

Damon Smith,
General Counsel.
[FR Doc. 2022-20311 Filed 9-20-22; 8:45 am]
BILLING CODE 4210-67-P