[Federal Register Volume 88, Number 61 (Thursday, March 30, 2023)]
[Rules and Regulations]
[Pages 18998-19001]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06414]


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NATIONAL FOUNDATION ON THE ARTS AND HUMANITIES

National Endowment for the Humanities

45 CFR Parts 1168 and 1174

RIN 3136-AA46


Civil Penalty Adjustments

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

ACTION: Final rule.

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SUMMARY: The National Endowment for the Humanities (NEH) is adjusting 
the maximum and minimum civil monetary penalties that may be imposed 
for violations of its New Restrictions on Lobbying and Program Fraud 
Civil Remedies Act regulations to reflect the requirements of the 
Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by 
the Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015. This final rule provides the 2023 annual inflation adjustments 
to the initial ``catch-up'' adjustments made on April 21, 2020, and 
August 13, 2021, and reflects all other inflation adjustments made in 
the interim. This final rule also codifies the statutory formula for 
inflation adjustments in NEH's New Restrictions on Lobbying and Program 
Fraud Civil Remedies Act regulations, so that NEH may publish a Notice 
in the Federal Register indicating the civil monetary penalty 
adjustment amounts for each regulation in January 2024 and every 
calendar year thereafter.

DATES: This rule is effective on March 30, 2023.

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

    The Federal Civil Penalties Inflation Adjustment Act of 1990, as 
amended by the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of

[[Page 18999]]

2015 (the Inflation Adjustment Act) \1\ directs each Executive agency 
to make an annual inflation adjustment for each civil monetary penalty 
provided by law within the jurisdiction of the agency, and to publish 
notice of each such adjustment in the Federal Register. An agency 
adjusts a civil monetary penalty by increasing the maximum amount of 
such penalty (or the range of minimum and maximum amounts, as 
applicable) by the percentage by which the Consumer Price Index for All 
Urban Consumers (CPI-U) for the month of October preceding the date of 
adjustment (in this case, October 2022) exceeds the CPI-U for the 
October one year prior to the October immediately preceding the date of 
the adjustment (in this case, October 2021), then rounding each amount 
to the nearest dollar. 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 therefore the amount of the adjustment is not subject to the 
exercise of discretion by the Chair of the National Endowment for the 
Humanities.
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    \1\ 28 U.S.C. 2461 note.
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    OMB has issued guidance on implementing and calculating the 2023 
adjustment under the Inflation Adjustment Act.\2\ Per this guidance, 
the CPI-U adjustment multiplier for this annual adjustment is 1.07745. 
In its prior rules, NEH identified two civil monetary penalties which 
require adjustment pursuant to the Inflation Adjustment Act: a civil 
monetary penalty that NEH may impose for violation of its New 
Restrictions on Lobbying regulation (the Lobbying Civil Monetary 
Penalty) \3\ and a civil monetary penalty that NEH may impose under its 
Program Fraud Civil Remedies Act Regulations (the PFCRA Civil Monetary 
Penalty).\4\ NEH made the initial ``catch-up'' adjustments to the 
Lobbying Civil Monetary Penalty when it amended its New Restrictions on 
Lobbying regulation on April 21, 2020,\5\ and to the PFCRA Civil 
Monetary Penalty when it adopted its Program Fraud Civil Monetary 
Penalties Act regulations on August 13, 2021.\6\ With this rule, NEH is 
adjusting the amount of those civil monetary penalties accordingly.
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    \2\ Office of Management and Budget (OMB) Memorandum M-23-05 
(December 15, 2022).
    \3\ 45 CFR 1168.400(a), (b), (e).
    \4\ 45 CFR 1174.3(a), (b).
    \5\ 85 FR 22025.
    \6\ 86 FR 44626.
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2. 2023 Adjustments

    Two civil monetary penalties in NEH regulations require adjustment 
in accordance with the Inflation Adjustment Act: (1) the Lobbying Civil 
Monetary Penalty and (2) the PFCRA Civil Monetary Penalty.

A. Adjustment to Lobbying Civil Monetary Penalty

    The Lobbying Civil Monetary Penalty is currently set at a range of 
a minimum amount of $22,021 and a maximum amount of $220,213. The post-
adjustment penalty or range is obtained by multiplying the pre-
adjustment penalty or range by the percent change in the CPI-U over the 
relevant time period and rounding to the nearest dollar. Between 
October 2021 and October 2022, the CPI-U increased by a multiplier of 
107.745%. Therefore, the new post-adjustment minimum Lobbying Civil 
Monetary Penalty is $23,727 ($22,021 multiplied by 1.07745) and the 
maximum Lobbying Civil Monetary Penalty is $237,268 ($220,213 
multiplied by 1.07745).
    Thus, the range for the Lobbying Civil Monetary Penalty shall be 
between $23,727 and $237,268.

B. Adjustment to PFCRA Civil Monetary Penalty

    The current maximum PFCRA Civil Monetary Penalty is set at $12,537. 
The post-adjustment penalty or range is obtained by multiplying the 
pre-adjustment penalty or range by the percent change in the CPI-U over 
the relevant time period and rounding to the nearest dollar. Between 
October 2021 and October 2022, the CPI-U increased by a multiplier of 
107.745%. Therefore, the new, post-adjustment maximum penalty NEH's 
PFCRA regulation is $13,508 ($12,537 multiplied by 1.07745).

3. Subsequent Annual Adjustments

    For subsequent annual adjustments to civil penalty amounts made in 
accordance with the Inflation Adjustment Act, the amount of the 
adjustment is based on the percent increase between the CPI-U for the 
month of October preceding the date of the adjustment and the CPI-U for 
the October one year prior to the October immediately preceding the 
date of the adjustment. If there is no increase, there is no adjustment 
of civil penalties. Therefore, if NEH adjusts penalties in January 
2024, the adjustment will be calculated based on the percent change 
between the CPI-U for October 2023 (the October immediately preceding 
the date of adjustment) and October 2022 (the October one year prior to 
October 2023). With this rule, NEH will publish a notice of the amount 
of these annual inflation adjustments in the Federal Register no later 
than January 15 of each year, starting in 2024.

4. Compliance

Administrative Procedure Act

    Pursuant to section 4 of the Inflation Adjustment Act, each Federal 
agency is required to publish adjustments no later than January 15 each 
year. In accordance with section 553 of the Administrative Procedure 
Act (APA), 5 U.S.C. 553, most rules are subject to notice and comment 
and are effective no earlier than 30 days after publication in the 
Federal Register. However, section 4(b)(2) of the Inflation Adjustment 
Act provides that each agency shall make the annual inflation 
adjustments ``notwithstanding section 553'' of the APA. Consistent with 
the language of the Inflation Adjustment Act, this rule is not subject 
to notice and an opportunity for public comment and will be effective 
on March 30, 2023.

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 the Office of Management and Budget for 
review.

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 
rulemaking 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 
rulemaking 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.

[[Page 19000]]

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 rulemaking will not have a significant effect on the human 
environment.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rulemaking will not be a major rule as defined in section 804 
of the Small Business Regulatory Enforcement Fairness Act of 1996. This 
rulemaking 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 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 may be accessed at www.neh.gov. The website 
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 rule speaks in plain and clear language so that the 
public can use and understand it, NEH modeled the language of the rule 
on the Federal Plain Language Guidelines.

List of Subjects in 45 CFR Parts 1168 and 1174

    Administrative practice and procedure, Claims, Fraud, Lobbying, 
Penalties.

    For the reasons stated in the preamble, the National Endowment for 
the Humanities amends 45 CFR chapter XI, subchapter D, as follows:

PART 1168--NEW RESTRICTIONS ON LOBBYING

0
1. The authority citation for part 1168 continues 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 by:
0
a. In paragraphs (a), (b), and (e):
0
i. Removing ``$20,489'' and adding in its place ``$10,000'' each place 
it appears.
0
ii. Removing ``$204,892'' and adding in its place ``$100,000'' each 
place it appears.
0
b. Revising paragraph (g).
0
c. Adding paragraph (h).
    The revision and addition read as follows:


Sec.  1168.400  Penalties.

* * * * *
    (g)(1) The penalty amounts provided in table 1 to this paragraph 
(g) apply to violations of this section that occurred prior to December 
31, 2023, with each row listing the penalty amounts for violations that 
occurred in a particular time frame.
    (2) For violations of this section that occur on or after January 
1, 2024, the maximum penalty range which may be assessed under this 
section is the larger of:
    (i) The amount for the previous calendar year; or
    (ii) An amount adjusted for inflation, calculated by multiplying 
the amount for the previous calendar year by the percentage by which 
the Consumer Price Index for All Urban Consumers published by the 
Department of Labor (CPI-U) for the month of October preceding the 
current calendar year exceeds the CPI-U for the month of October of the 
calendar year two years prior to the current calendar year, adding that 
amount to the amount for the previous calendar year, and rounding the 
total to the nearest dollar.

 Table 1 to Paragraph (g)--Civil Monetary Penalty Inflation Adjustments
                for Violations Prior to December 31, 2023
------------------------------------------------------------------------
               Date of violation                      Penalty range
------------------------------------------------------------------------
October 23, 1989-December 31, 2015.............         $10,000-$100,000
January 1, 2016-December 31, 2016..............           18,936-189,361
January 1, 2017-December 31, 2017..............           19,246-192,459
January 1, 2018-December 31, 2018..............           19,639-196,387
January 1, 2019-December 31, 2019..............           20,134-201,340
January 1, 2020-December 31, 2020..............           20,489-204,892
January 1, 2021-December 31, 2021..............           20,731-207,314
January 1, 2022-December 31, 2022..............           22,021-220,213
January 1, 2023-December 31, 2023..............           23,727-237,268
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    (h) Notice of the maximum penalty amounts which may be assessed 
under paragraphs (a), (b), and (e) of this section for calendar years 
after 2023 (calculated using the formula in paragraph (g)(2) of this 
section) will be published by NEH in the Federal Register on an annual 
basis on or before January 15 of each calendar year.

Appendix A to Part 1168 [Amended]

0
3. Amend appendix A to part 1168 by:
0
a. Removing ``$20,489'' and adding in its place ``$10,000'' each place 
it appears.
0
b. Removing ``$204,892'' and adding in its place ``$100,000'' each 
place it appears.

PART 1174--PROGRAM FRAUD CIVIL REMEDIES ACT REGULATIONS

0
4. The authority citation for part 1174 continues to read as follows:

    Authority: 31 U.S.C. 3801-3812; 5 U.S.C. App. 8G(a)(2).


0
5. Amend Sec.  1174.3 by:
0
a. In paragraphs (a)(1) introductory text and (b)(1) introductory text,

[[Page 19001]]

removing ``$11,803'' and adding in its place ``$5,000'' each place it 
appears.
0
b. Revising paragraph (f).
0
c. Adding paragraph (g).
    The revision and addition read as follows:


Sec.  1174.3  Basis for civil penalties and assessments.

* * * * *
    (f) Civil monetary penalty inflation adjustments. (1) The penalty 
amounts provided in table 1 to this paragraph (f) apply to violations 
of this section that occurred prior to December 31, 2023, with each row 
listing the penalty amounts for violations that occurred in a 
particular time frame.
    (2) For claims or statements made on or after January 1, 2024, the 
maximum penalty which may be assessed under this section is the larger 
of:
    (i) The amount for the previous calendar year; or
    (ii) An amount adjusted for inflation, calculated by multiplying 
the amount for the previous calendar year by the percentage by which 
the Consumer Price Index for All Urban Consumers published by the 
Department of Labor (CPI-U) for the month of October preceding the 
current calendar year exceeds the CPI-U for the month of October of the 
calendar year two years prior to the current calendar year, adding that 
amount to the amount for the previous calendar year, and rounding the 
total to the nearest dollar.

 Table 1 to Paragraph (f)--Civil Monetary Penalty Inflation Adjustments
                for Violations Prior to December 31, 2023
------------------------------------------------------------------------
                     Date of violation                         Penalty
------------------------------------------------------------------------
October 14, 2008-December 31, 2015.........................       $5,000
January 1, 2016-December 31, 2016..........................       10,781
January 1, 2017-December 31, 2017..........................       10,957
January 1, 2018-December 31, 2018..........................       11,181
January 1, 2019-December 31, 2019..........................       11,463
January 1, 2020-December 31, 2020..........................       11,665
January 1, 2021-December 31, 2021..........................       11,803
January 1, 2022-December 31, 2022..........................       12,537
January 1, 2023-December 31, 2023..........................       13,508
------------------------------------------------------------------------

    (g) Notice of civil monetary penalty inflation adjustments on or 
after January 1, 2024. The authority will publish in the Federal 
Register notice of the maximum penalty amount which may be assessed 
under this section for calendar years after 2023 (calculated using the 
formula in paragraph (f)(2) of this section) on an annual basis on or 
before January 15 of each calendar year.

    Dated: March 23, 2023.
Jessica Graves,
Legal Administrative Specialist, National Endowment for the Humanities.
[FR Doc. 2023-06414 Filed 3-29-23; 8:45 am]
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