Farm Credit Administration (FCA).
This regulation revises cost-of-living adjustments for all civil money penalties (CMPs) under the Farm Credit Administration's (FCA) jurisdiction. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended (FCPIA Act) requires us to adjust our CMPs at least once every 4 years for inflation. Our last adjustments, effective in October 2000, incorporated a rounding method based on the amount of the penalty increase. We have recently been advised by the General Accounting Office (GAO) that the adjustment should have been based on the amount of the penalty. Therefore, we have recalculated the penalties and have revised the penalty amounts.
The regulation will become effective on November 15, 2002.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Mark L. Johansen, Policy Analyst, Office of Policy and Analysis, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4498, TTY (703) 883-4434,
Rebecca S. Orlich, Senior Attorney, Office of General Counsel, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-2020.End Further Info End Preamble Start Supplemental Information
The objective of this regulation is to recalculate the CMP inflation adjustments consistent with the FCPIA Act.
II. Cost-of-Living Adjustment
The FCPIA Act, as amended by the Debt Collection Improvement Act of 1996 (DCIA), requires each agency to adjust each CMP within its jurisdiction by a prescribed cost-of-living adjustment at least once every 4 years. This cost-of-living adjustment is based on the formula described in section 5(b) of the FCPIA Act. We made our last adjustment in July 2000, effective in October of that year, when we increased the penalties from $1,100 to $1,170 per day for violation of an order that has become final, and from $550 to $580 per day for violation of the Farm Credit Act of 1971, as amended, or FCA regulations. See 65 FR 46087 (July 27, 2000) for a full explanation of the types of violations subject to CMPs.
Earlier this year, the GAO began a government-wide review of agencies' application of the FCPIA Act. The GAO found that several agencies, including the FCA, took actions that did not conform to the strict language of the FCPIA Act and requested that each agency adjust its penalties accordingly. In a letter to the FCA, the GAO stated that they “recognize some advantages to rounding on the basis of the size of the increase rather than the size of the penalty,” but requested FCA “to adjust the agency's civil penalties in a manner consistent with the requirements of the [FCPIA Act].” See GAO-02-1084R FCA Penalty Adjustments.
The FCPIA Act contains a formula for rounding CMP increases, setting out penalty ranges on amounts from less than or equal to $100, to amounts greater than $200,000, and provides different dollar multiples for rounding the increase in each penalty range. Section 5(a) of the FCPIA Act provides that increases determined under that subsection must be rounded to:
- The nearest “multiple of $10 in the case of penalties less than or equal to $100”;
- The nearest “multiple of $100 in the case of penalties greater than $100 but less than or equal to $1,000”; and
- The nearest “multiple of $1,000 in the case of penalties greater than $1,000 but less than or equal to $10,000.”
Emphasis added. In our 2000 regulation, we applied the rounding method to the amount of the increase in the penalty, rather than to the amount of the penalty itself.
We based our 2000 CMP adjustments on the difference between the Consumer Price Index (CPI) for June of the preceding year of the adjustment (June 1999) and the CPI for June of the year the CMP was last set (June 1996). For the 2000 adjustment, the CPI value was 156.7 for June 1996 and was 166.2 for June 1999, resulting in an inflation factor of 1.06 (i.e., a 6-percent increase). The prerounding adjustments were a $66.69 increase for the $1,100 penalty and a $33.34 increase for the $550 penalty.
Using the FCPIA Act's correct rounding formula, the $66.69 increase should have been rounded to the nearest $1,000, which is zero, because the penalty in question is in the $1,000-9,999 category. That rounding results in no adjustment to the $1,100 penalty. The $33.34 increase should have been rounded to the nearest $100, which is also zero, because the penalty in question is in the $100-999 category. That rounding results in no adjustment to the $550 penalty.
We now amend § 622.61 to provide for CMPs of $1,100 and $550. We note that the agency has not imposed any CMPs in the last 2 years; consequently, no person has been required to pay the higher penalty amounts we adopted in 2000.
III. Notice and Comment Not Required by Administrative Procedure Act
The FCPIA Act gives Federal agencies no discretion in the adjustment of CMPs for the rate of inflation. Moreover, this regulation is ministerial, technical, and noncontroversial. For these reasons, the FCA finds good cause to determine that public notice and an opportunity to comment are impracticable, unnecessary, and contrary to the public interest pursuant to the Administrative Procedure Act, 5 U.S.C. 553(b)(B), and adopts this rule in final form. In addition, because this rule will relieve a burden by reducing the CMPs to the Start Printed Page 68932correct amounts, the FCA has determined that it should become effective immediately.
IV. Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the FCA hereby certifies that the final rule will not have a significant economic impact on a substantial number of small entities. Each of the banks in the Farm Credit System, considered together with its affiliated associations, has assets and annual income in excess of the amounts that would qualify them as small entities. Therefore, Farm Credit System institutions are not “small entities” as defined in the Regulatory Flexibility Act.Start List of Subjects
List of Subjects in 12 CFR Part 622
- Administrative practice and procedures
For the reasons stated in the preamble, part 622 of chapter VI, title 12 of the Code of Federal Regulations is amended to read as follows:End Amendment Part Start Part
PART 622—RULES OF PRACTICE AND PROCEDUREEnd Part Start Amendment Part
1. The authority citation for part 622 continues to read as follows:End Amendment Part
Subpart B—Rules and Procedures for Assessment and Collection of Civil Money PenaltiesStart Amendment Part
2. Revise § 622.61 to read as follows:End Amendment Part
The maximum amount of each civil money penalty within FCA's jurisdiction is adjusted in accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended (28 U.S.C. 2461 note), as follows:
(a) Amount of civil money penalty imposed under section 5.32 of the Act for violation of a final order issued under section 5.25 or 5.26 of the Act: the maximum daily amount is $1,100.
(b) Amount of civil money penalty for violation of the Act or regulations:
|If the violation occurred—||The maximum daily amount is—|
|Before October 23, 1996||$500|
|On or after October 23, 1996||$550|
Dated: November 7, 2002.
Jeanette C. Brinkley,
Acting Secretary, Farm Credit Administration Board.
3. We used the Department of Labor, Bureau of Labor Statistics—All Urban Consumers tables, in which the period 1982-84 was equal to 100, to get the CPI numbers. We note that the 1996 adjustment was based on the June 1995 CPI. In calculating the new adjustments, the FCPIA Act requires us to use the 3-year period from June 1996 to June 1999.Back to Citation
[FR Doc. 02-28881 Filed 11-13-02; 8:45 am]
BILLING CODE 6705-01-P