[Federal Register Volume 88, Number 9 (Friday, January 13, 2023)]
[Rules and Regulations]
[Pages 2268-2270]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-00630]


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SURFACE TRANSPORTATION BOARD

49 CFR Part 1022

[Docket No. EP 716 (Sub-No. 8)]


Civil Monetary Penalties--2023 Adjustment

AGENCY: Surface Transportation Board.

ACTION: Final rule.

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SUMMARY: The Surface Transportation Board (Board) is issuing a final 
rule to implement the annual inflationary adjustment to its civil 
monetary penalties, pursuant to the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015.

DATES: This final rule is effective January 13, 2023.

FOR FURTHER INFORMATION CONTACT: Nathaniel Bawcombe at (202) 245-0376. 
Assistance for the hearing impaired is available through the Federal 
Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 (2015 Act), enacted as part of the Bipartisan Budget Act of 
2015, Public Law 114-74, sec. 701, 129 Stat. 584, 599-601, requires 
agencies to adjust their civil penalties for inflation annually, 
beginning on July 1, 2016, and no later than January 15 of every year 
thereafter. In accordance with the 2015 Act, annual inflation 
adjustments are to be based on the percent change between the Consumer 
Price Index for all Urban Consumers (CPI-U) for October of the previous 
year and the October CPI-U of the year before that. Penalty level 
adjustments should be rounded to the nearest dollar.

II. Discussion

    The statutory definition of civil monetary penalty covers various 
civil penalty provisions under the Rail (Part A); Motor Carriers, Water 
Carriers, Brokers, and Freight Forwarders (Part B); and Pipeline 
Carriers (Part C) provisions of the Interstate Commerce Act, as 
amended. The Board's civil (and criminal) penalty authority related to 
rail transportation appears at 49 U.S.C. 11901-11908. The Board's 
penalty authority related to motor carriers, water carriers, brokers, 
and freight forwarders appears at 49 U.S.C. 14901-14916. The Board's 
penalty authority related to pipeline carriers appears at 49 U.S.C. 
16101-16106.\1\ The Board has regulations at 49 CFR part 1022 that 
codify the method set forth in the 2015 Act for annually adjusting for 
inflation the civil monetary penalties within the Board's jurisdiction.
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    \1\ The Board also has various criminal penalty authority, 
enforceable in a Federal criminal court. Congress has not, however, 
authorized Federal agencies to adjust statutorily prescribed 
criminal penalty provisions for inflation, and this rule does not 
address those provisions.
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    As set forth in this final rule, the Board is amending 49 CFR part 
1022 to make an annual inflation adjustment to the civil monetary 
penalties in conformance with the requirements of the 2015 Act. The 
adjusted penalties set forth in the rule will apply only to violations 
that occur after the effective date of this regulation.
    In accordance with the 2015 Act, the annual adjustment adopted here 
is calculated by multiplying each current penalty by the cost-of-living 
adjustment factor of 1.07745, which reflects the percentage change 
between the October 2022 CPI-U (298.012) and the October 2021 CPI-U 
(276.589). The table at the end of this decision shows the statutory 
citation for each civil penalty, a description of the provision, the 
adjusted statutory civil penalty level for 2022, and the adjusted 
statutory civil penalty level for 2023.

III. Final Rule

    The final rule set forth at the end of this decision is being 
issued without notice and comment pursuant to the rulemaking provision 
of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B), which 
does not require that process ``when the agency for good cause finds'' 
that public notice and comment are ``unnecessary.'' Here, Congress has 
mandated that the agency make an annual inflation adjustment to its 
civil monetary penalties. The Board has no discretion to set 
alternative levels of adjusted civil monetary penalties, because the 
amount of the inflation adjustment must be calculated in accordance 
with the statutory formula. Given the absence of discretion, the Board 
has determined that there is good cause to promulgate this rule without 
soliciting public comment and to make this regulation effective 
immediately upon publication.

IV. Regulatory Flexibility Statement

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601-612, 
generally requires an agency to prepare a

[[Page 2269]]

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 the Board has determined that notice 
and comment are not required under the APA for this rulemaking, the 
requirements of the RFA do not apply.

V. Congressional Review Act

    Pursuant to the Congressional Review Act, 5 U.S.C. 801-808, the 
Office of Information and Regulatory Affairs has designated this rule 
as a non-major rule, as defined by 5 U.S.C. 804(2).

VI. Paperwork Reduction Act

    This final rule does not contain a new or amended information 
collection requirement subject to the Paperwork Reduction Act of 1995, 
44 U.S.C. 3501-3521.
    It is ordered:
    1. The Board amends its rules as set forth in this decision. Notice 
of the final rule will be published in the Federal Register.
    2. This decision is effective on its date of publication in the 
Federal Register.
    Decided: January 9, 2023.
    By the Board, Board Members, Fuchs, Hedlund, Oberman, Primus, and 
Schultz. Board Member Primus concurred with a separate expression.

BOARD MEMBER PRIMUS, concurring:
    Today's decision faithfully carries out the mandate of the 2015 Act 
by adjusting the Board's civil penalties for inflation. I write 
separately, however, to express concern about the adequacy of the 
penalties afforded by statute. The 2015 Act amended the Federal Civil 
Penalties Inflation Adjustment Act of 1990, Public Law 101-410, 104 
Stat. 890 (1990 Act). The 1990 Act, in turn, relied on congressional 
findings that:

    (1) the power of Federal agencies to impose civil monetary 
penalties for violations of Federal law and regulations plays an 
important role in deterring violations and furthering the policy 
goals embodied in such laws and regulations;
    (2) the impact of many civil monetary penalties has been and is 
diminished due to the effect of inflation;
    (3) by reducing the impact of civil monetary penalties, 
inflation has weakened the deterrent effect of such penalties . . .

104 Stat. at 890. Congress therefore stated that its purposes in 
enacting the 1990 Act included ``maintain[ing] the deterrent effect of 
civil monetary penalties and promot[ing] compliance with the law.'' Id.
    I question whether the penalties that the Board is permitted by 
statute to impose are sufficient to provide the deterrent effect that 
Congress intended, as applied to Class I railroads. Consider, as an 
example, the default penalty of $5,000 per violation, set forth in 49 
U.S.C. 11901(a). Inflation adjustments since 2012 have increased this 
penalty to the $9,413 per violation stated in the Board's decision 
today. See Civ. Monetary Penalty Inflation Adjustment Rule, EP 716, 
slip op. at 6 (STB served Oct. 22, 2012) (making an initial adjustment 
from $5,000 to $5,500). But the $5,000 baseline from which the Board 
began its inflation adjustments in 2012 was established in a different 
century--not even the 20th century, but the 19th. In fact, that $5,000 
penalty per violation was enacted in the Interstate Commerce Act of 
1887, which created the Board's predecessor, the Interstate Commerce 
Commission, and established the first federal regulation of the 
nation's railroads. Interstate Commerce Act, Sec.  10, 24 Stat. 379, 
382-83 (1887).
    Needless to say, the value of $5,000 has changed far more than 
these adjustments suggest. According to an online calculator offered by 
the Federal Reserve Bank of Minneapolis (which reaches back only to 
1913, thus understating inflation compared to an 1887 value), the 2022 
equivalent would have been almost $150,000.\2\ As a concrete example, 
real estate listings in 1887 offered houses in the District of Columbia 
for $1,700 to $7,800 (the latter a 12-room mansion). See For Sale--
Houses, Wash. Post, May 22, 1887, at 3. These penalties are not even a 
slap on the wrist. Other independent federal agencies, by contrast, 
have civil penalty authority that is more commensurate with the times. 
See, e.g., FTC Publishes Inflation-Adjusted Civil Penalty Amounts for 
2023 (including penalties as high as $1,426,319).\3\
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    \2\ https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator, last visited Jan. 9, 2023.
    \3\ https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-publishes-inflation-adjusted-civil-penalty-amounts-2023, last 
visited Jan. 9, 2023.
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    Class I railroads, meanwhile, reported between $388 million and $7 
billion in adjusted net railway operating income for 2021, the most 
recent year available. See R.R. Revenue Adequacy--2021 Determination, 
EP 552 (Sub-No. 26), App. B (STB served Sept. 6, 2022). The idea that 
$9,413 per violation will deter entities of this size from ``knowingly 
violating this part or an order of the Board under this part,'' Sec.  
11901(a), is farfetched to say the least. Congress should act to 
restore the deterrent effect of these civil monetary penalties and 
promote compliance with the law.

List of Subjects in 49 CFR Part 1022

    Administrative practice and procedures, Brokers, Civil penalties, 
Freight forwarders, Motor carriers, Pipeline carriers, Rail carriers, 
Water carriers.

Jeffrey Herzig,
Clearance Clerk.

    For the reasons set forth in the preamble, part 1022 of title 49, 
chapter X, of the Code of Federal Regulations is amended as follows:

PART 1022--CIVIL MONETARY PENALTY INFLATION ADJUSTMENT

0
1. The authority citation for part 1022 continues to read as follows:

    Authority:  5 U.S.C. 551-557; 28 U.S.C. 2461 note; 49 U.S.C. 
11901, 14901, 14903, 14904, 14905, 14906, 14907, 14908, 14910, 
14915, 14916, 16101, 16103.


0
2. Revise Sec.  1022.4(b) to read as follows:


Sec.  1022.4   Cost-of-living adjustments of civil monetary penalties.

* * * * *
    (b) The cost-of-living adjustment required by the statute results 
in the following adjustments to the civil monetary penalties within the 
jurisdiction of the Board:

[[Page 2270]]



                                            Table 1 to Paragraph (b)
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                                                                              2022--Penalty      2023--Adjusted
                                               Civil monetary penalty             amount         penalty amount
           U.S. Code citation                        description           -------------------------------------
                                                                             EP 716_7 (2022)    EP 716_8 (2023)
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                                                  Rail Carrier
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49 U.S.C. 11901(a)......................  Unless otherwise specified,                  $8,736             $9,413
                                           maximum penalty for each
                                           knowing violation under this
                                           part, and for each day.
49 U.S.C. 11901(b)......................  For each violation under section                874                942
                                           11124(a)(2) or (b).
49 U.S.C. 11901(b)......................  For each day violation continues                 45                 48
49 U.S.C. 11901(c)......................  Maximum penalty for each knowing              8,736              9,413
                                           violation under sections 10901-
                                           10906.
49 U.S.C. 11901(d)......................  For each violation under section           174-$874           187-$942
                                           11123 or section 11124(a)(1).
49 U.S.C. 11901(d)......................  For each day violation continues                 87                 94
49 U.S.C. 11901(e)(1), (4)..............  For each violation under                        874                942
                                           sections 11141-11145, for each
                                           day.
49 U.S.C. 11901(e)(2), (4)..............  For each violation under section                174                187
                                           11144(b)(1), for each day.
49 U.S.C. 11901(e)(3)-(4)...............  For each violation of reporting                 174                187
                                           requirements, for each day.
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                                             Motor and Water Carrier
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49 U.S.C. 14901(a)......................  Minimum penalty for each                      1,195              1,288
                                           violation and for each day.
49 U.S.C. 14901(a)......................  For each violation under section             11,957             12,883
                                           13901 or section 13902(c).
49 U.S.C. 14901(a)......................  For each violation related to                29,893             32,208
                                           transportation of passengers.
49 U.S.C. 14901(b)......................  For each violation of the             23,915-47,829      25,767-51,534
                                           hazardous waste rules under
                                           section 3001 of the Solid Waste
                                           Disposal Act.
49 U.S.C. 14901(d)(1)...................  Minimum penalty for each                      1,746              1,881
                                           violation of household good
                                           regulations, and for each day.
49 U.S.C. 14901(d)(2)...................  Minimum penalty for each                     17,473             18,826
                                           instance of transportation of
                                           household goods if broker
                                           provides estimate without
                                           carrier agreement.
49 U.S.C. 14901(d)(3)...................  Minimum penalty for each                     43,678             47,061
                                           instance of transportation of
                                           household goods without being
                                           registered.
49 U.S.C. 14901(e)......................  Minimum penalty for each                      3,494              3,765
                                           violation of a transportation
                                           rule.
49 U.S.C. 14901(e)......................  Minimum penalty for each                      8,736              9,413
                                           additional violation.
49 U.S.C. 14903(a)......................  Maximum penalty for undercharge             174,724            188,257
                                           or overcharge of tariff rate,
                                           for each violation.
49 U.S.C. 14904(a)......................  For first violation, rebates at                 349                376
                                           less than the rate in effect.
49 U.S.C. 14904(a)......................  For all subsequent violations...                438                472
49 U.S.C. 14904(b)(1)...................  Maximum penalty for first                       874                942
                                           violation for undercharges by
                                           freight forwarders.
49 U.S.C. 14904(b)(1)...................  Maximum penalty for subsequent                3,494              3,765
                                           violations.
49 U.S.C. 14904(b)(2)...................  Maximum penalty for other first                 874                942
                                           violations under section 13702.
49 U.S.C. 14904(b)(2)...................  Maximum penalty for subsequent                3,494              3,765
                                           violations.
49 U.S.C. 14905(a)......................  Maximum penalty for each knowing             17,473             18,826
                                           violation of section 14103(a),
                                           and knowingly authorizing,
                                           consenting to, or permitting a
                                           violation of section 14103(a)
                                           or (b).
49 U.S.C. 14906.........................  Minimum penalty for first                     2,392              2,577
                                           attempt to evade regulation.
49 U.S.C. 14906.........................  Minimum amount for each                       5,978              6,441
                                           subsequent attempt to evade
                                           regulation.
49 U.S.C. 14907.........................  Maximum penalty for                           8,736              9,413
                                           recordkeeping/reporting
                                           violations.
49 U.S.C. 14908(a)(2)...................  Maximum penalty for violation of              3,494              3,765
                                           section 14908(a)(1).
49 U.S.C. 14910.........................  When another civil penalty is                   874                942
                                           not specified under this part,
                                           for each violation, for each
                                           day.
49 U.S.C. 14915(a)(1)-(2)...............  Minimum penalty for holding a                13,885             14,960
                                           household goods shipment
                                           hostage, for each day.
49 U.S.C. 14916(c)(1)...................  Maximum penalty for each knowing             11,957             12,883
                                           violation under section
                                           14916(a) for unlawful brokerage
                                           activities.
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                                                Pipeline Carrier
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49 U.S.C. 16101(a)......................  Maximum penalty for violation of              8,736              9,413
                                           this part, for each day.
49 U.S.C. 16101(b)(1), (4)..............  For each recordkeeping violation                874                942
                                           under section 15722, each day.
49 U.S.C. 16101(b)(2), (4)..............  For each inspection violation                   174                187
                                           liable under section 15722,
                                           each day.
49 U.S.C. 16101(b)(3)-(4)...............  For each reporting violation                    174                187
                                           under section 15723, each day.
49 U.S.C. 16103(a)......................  Maximum penalty for improper                  1,746              1,881
                                           disclosure of information.
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[FR Doc. 2023-00630 Filed 1-12-23; 8:45 am]
BILLING CODE 4915-01-P