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Daily Rules, Proposed Rules, and Notices of the Federal Government

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1022

[Docket No. EP 716]

Civil Monetary Penalty Inflation Adjustment Rule

AGENCY: Surface Transportation Board.
ACTION: Final rule.
SUMMARY: The Surface Transportation Board (Board) is issuing a final rule to adjust the Board's civil monetary penalties for inflation on a periodic basis pursuant to the Federal Civil Penalties Inflation Act of 1990, as amended by the Debt Collection Improvement Act of 1996. Prior to the issuance of this rule, the Board's penalties have not been adjusted for inflation since they were prescribed in the Interstate Commerce Commission Termination Act of 1995 (ICCTA). As mandated by the Debt Collection Improvement Act, the Board's initial increase of its penalties cannot exceed 10%. The Board is required to review its penalties again at least once every four years thereafter and adjust them as necessary for inflation according to a specified formula.
DATES: This rule is effective on October 22, 2012.
ADDRESSES: Information or questions regarding this final rule should reference Docket No. EP 716 and be in writing addressed to: Office of Proceedings, Surface Transportation Board, 395 E. Street SW., Washington, DC 20423-0001.
FOR FURTHER INFORMATION CONTACT: Marc Lerner, (202) 245-0390. Federal Information Relay Service (FIRS) for the hearing impaired: 1-800-877-8339.
SUPPLEMENTARY INFORMATION:

Background.The Debt Collection Improvement Act of 1996 (DCIA), Public Law 104-134, 110 Stat. 1321, amended the Federal Civil Penalties Inflation Adjustment Act of 1990, Public Law 101-410, 104 Stat. 890 (codified as amended at 28 U.S.C. 2461 note), to require each federal agency to adopt regulations at least once every four years that adjust for inflation the maximum amount of civil monetary penalties under the statutes administered by the agency.1 As defined, a civil monetary penalty is a statutorily prescribed specific amount, or maximum amount, provided by federal law that can be assessed by a federal agency and that can be enforced by the agency pursuant to an administrative proceeding or a civil action in a federal court. Congress passed this legislation on the basis of its findings that: (1) The power to impose civil monetary penalties is important to deterring violations of federal law and furthering the policy goals of federal laws and regulations; and (2) inflation has diminished the impact of these penalties.

1Agency means an Executive agency as defined under 5 U.S.C. 105. “Executive agency” includes an “independent establishment,” which is defined at 5 U.S.C. 104 in relevant part as “an establishment in the executive branch” that is not an “Executive department.” For purposes of the requirements of the DCIA, we determine that the Board is a covered agency.

Under the DCIA, the inflation adjustment is calculated by increasing the maximum civil monetary penalty amount per violation by the Cost-of-Living Adjustment, which is the percentage (if any) by which the Consumer Price Index for June of the year preceding the adjustment exceeds the Consumer Price Index for June of the year the civil monetary penalty amount was last set or adjusted, multiplied by the statutory maximum amount, rounded to the nearest specified amount using the formula contained in the statute. The DCIA requires agencies to round off the increase of each civil monetary penalty depending on its dollar amount: if the penalty is greater than $0 and less than or equal to $100, the increase is to be rounded to the nearest $10; if the penalty is greater than $100, but less than or equal to $1,000, the increase is rounded to the nearest $100; if the penalty is greater than $1,000 but less than or equal to $10,000, the increase is to be rounded to the nearest multiple of $1,000; if the penalty is greater than $10,000 but less than or equal to $100,000, the increase is to be rounded to the nearest multiple of $5,000; if the penalty is greater than $100,000 but less than or equal to $200,000, the increase is to be rounded to the nearest multiple of $10,000; and lastly, if the penalty is greater than $200,000, the increase is to be rounded to the nearest $25,000.

Discussion.The statutory definition of civil monetary penalty covers the civil penalty provisions under the Rail Carrier (Part A), Motor and Water Carriers (Part B), and Pipeline Carrier (Part C) provisions of the Interstate Commerce Act (ICA), as amended by ICCTA. 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. 14901-14915. The Board's penalty authority related topipeline carriers appears at 49 U.S.C. 16101-16106.2

2The Board also has 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.

Because the Board was created in 1996, the year 2000 would have been the first time that the Board should have amended its regulations to adjust its civil monetary penalties for inflation.3 Subsequent amendments should have been effected in 2004, 2008, and in 2012. The Board's initial adjustment, however, cannot exceed 10% of each penalty, regardless of the rate of inflation. As set forth in the rule, the Board is adding 49 CFR 1022 to adjust the penalty for each violation for which a statutory minimum or maximum amount is specified under the ICA as amended by ICCTA. These adjusted penalties will apply only to violations which occur after the effective date of this regulation.

3 See GAO Report, GAO-03-409, Civil Penalties: Agencies Unable to Fully Adjust Penalties for Inflation Under Current Law(March 2003), at 46 (STB not required to make initial adjustments until Jan. 1, 2000; as of Jun. 30, 2002, STB had not made the adjustments).

Immediate Final Rule.The Board has no discretion to set alternative levels of adjusted civil monetary penalties, since the amount of the inflation adjustment must be calculated in accordance with the statutory formula. Accordingly, the Board is issuing this regulation as a final rule, without opportunity for public notice and comment. The Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B), does not require that process “when the agency for good cause finds” that public notice and comment are “impracticable, unnecessary, or contrary to the public interest.” The Board finds that solicitation of public comments in this rulemaking is unnecessary and impracticable because Congress has prescribed that agencies adjust the civil monetary penalties under their jurisdiction and has provided no discretion to the agencies regarding the substance of the adjustments. The Board is only required to determine the amount of inflation adjustments by performing technical, ministerial computations. Thus, there is no need for affected parties to have 30 days' notice or opportunity to comment prior to the effectiveness of this regulation to adjust their conduct because the regulation concerns penalties for conduct that is already illegal under existing law. Accordingly, the Board has determined that there is good cause to make this regulation effective immediately upon publication.

Regulatory Flexibility Statement.The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801et seq.,generally requires an agency to prepare a 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.

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. 3501et seq.

Effective Date.For the same reasons the Board has determined that public notice and comment is unnecessary and impracticable, the Board finds that it has good cause to make this regulation effective upon publication.

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.

Decided: October 12, 2012.

By the Board, Chairman Elliott, Vice Chairman Mulvey, and Commissioner Begeman.

Jeffrey Herzig, Clearance Clerk.

For the reasons set forth in the preamble, the Surface Transportation Board amends title 49, chapter X, of the Code of Federal Regulations by adding part 1022 to read as follows:

PART 1022—CIVIL MONETARY PENALTY INFLATION ADJUSTMENT Sec. 1022.1 Scope and purpose. 1022.2 Definitions. 1022.3 Civil monetary penalty inflation adjustment. 1022.4 Cost-of-living adjustments of civil monetary penalties. 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, 16101, 16103.

§ 1022.1 Scope and purpose.

The purpose of this part is to establish a method to adjust for inflation the civil monetary penalties provided by law within the jurisdiction of the Board. These penalties shall be subject to review and adjustment at least once every four years using the method specified in the Debt Collection Improvement Act of 1996, Public Law 104-134, 110 Stat. 1321, as it amends the Federal Civil Penalties Inflation Adjustment Act of 1990, Public Law 101-410, 104 Stat. 890 (codified as amended at 28 U.S.C. 2461 note). The inflation adjustment is calculated by increasing the maximum civil monetary penalty amount per violation by the Cost-of-Living Adjustment, which is the percentage (if any) by which the Consumer Price Index for June of the year preceding the adjustment exceeds the Consumer Price Index for June of the year the civil monetary penalty amount was last set or adjusted, multiplied by the statutory maximum amount, rounded to the nearest specified amount using the formula contained in the statute. The initial adjustment, however, is capped at 10% of the penalty, regardless of the applicable rate of inflation.

§ 1022.2 Definitions.

As used in this part:

(a)Boardmeans the Surface Transportation Board.

(b)Civil monetary penaltymeans any penalty, fine, or other sanction that:

(1)(i) Is for a specific monetary amount as provided by federal law; or

(ii) Has a maximum amount provided by federal law;

(2) Is assessed or enforced by the Board pursuant to federal law; and

(3) Is assessed or enforced pursuant to an administrative proceeding or a civil action in the federal courts.

(c)Consumer Price Indexmeans the Consumer Price Index for all urban consumers published by the Department of Labor.

(d)Cost-of-Living Adjustmentmeans the percentage (if any) for each civil monetary penalty by which the Consumer Price Index for the month of June of the calendar year preceding the adjustment exceeds the Consumer Price Index for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law.

§ 1022.3 Civil monetary penalty inflation adjustment.

The Board shall, immediately, and at least once every four years thereafter—

(a) By regulation adjust each civil monetary penalty provided by law within the jurisdiction of the Board by the inflation adjustment described in § 1022.4; and

(b) Publish each such adjustment in theFederal Register.

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

(a) Pursuant to the Debt Collection Improvement Act of 1996, as it amends the Federal Civil Penalties Inflation Adjustment Act of 1990, the increase of a civil monetary penalty assessed under this section shall be determined by multiplying the Cost-of-Living Adjustment by the existing maximum civil monetary penalty, rounded to the nearest specified amount using the guidelines set forth in paragraph (b) of this section.

(b) Any increase determined under paragraph (a) of this section shall be rounded to the nearest:

(1) Multiple of $10 in the case of penalties less than or equal to $100;

(2) Multiple of $100 in the case of penalties greater than $100 but less than or equal to $1,000;

(3) Multiple of $1,000 in the case of penalties greater than $1,000 but less than or equal to $10,000;

(4) Multiple of $5,000 in the case of penalties greater than $10,000 but less than or equal to $100,000;

(5) Multiple of $10,000 in the case of penalties greater than $100,000 but less than or equal to $200,000; or

(6) Multiple of $25,000 in the case of penalties greater than $200,000.

(c) The first adjustment of any civil monetary penalty required by § 1022.3 may not exceed 10% of such penalty.

(d) The first application of the inflation adjustment method required by the statute results in the following adjustments to the civil monetary penalties within the jurisdiction of the Board:

U.S. Code citation Civil monetary penalty description Maximum
  • penalty
  • amount
  • year 1996
  • Adjusted
  • maximum
  • penalty
  • amount
  • year 2012
  • Rail Carrier Civil Penalties 49 U.S.C. 11901(a) Unless otherwise specified, maximum penalty for each knowing violation under this part, and for each day $5,000 $5,500 49 U.S.C. 11901(b) For each violation under sections 11124(a)(2) or (b) 500 550 49 U.S.C. 11901(b) For each day violation continues 25 27.50 49 U.S.C. 11901(c) Maximum penalty for each knowing violation under sections 10901-10906 5,000 5,500 49 U.S.C. 11901(d) For each violation under sections 11123 or 11124(a)(1) 100-500 110-550 49 U.S.C. 11901(d) For each day violation continues 50 55 49 U.S.C. 11901(e)(1) For each violation under sections 11141-11145 500 550 49 U.S.C. 11901(e)(2) For each violation under section 11144(b)(1) 100 110 49 U.S.C. 11901(e)(3)-(4) For each violation of reporting requirements, for each day 100 110 Motor and Water Carrier Civil Penalties 49 U.S.C. 14901(a) Minimum penalty for each violation under sections 13501-13508, 13531, 13901, 13902(c), and for each day 500 550 49 U.S.C. 14901(a) Minimum penalty if not registered to provide passenger transportation, for each violation under section 13901, and for each day 2,000 2,200 49 U.S.C. 14901(b) Maximum penalty for each violation of the hazardous waste rules under section 3001 of the Solid Waste Disposal Act 20,000 22,000 49 U.S.C. 14901(d)(1) Minimum penalty for each violation of household good regulations, and for each day 1,000 1,100 49 U.S.C. 14901(d)(2) Minimum penalty for each instance of transportation of household goods if broker provides estimate without carrier agreement 10,000 11,000 49 U.S.C. 14901(d)(3) Minimum penalty for each instance of transportation of household goods without being registered 25,000 27,500 49 U.S.C. 14901(e) Minimum penalty for each violation of a transportation rule 2,000 2,200 49 U.S.C. 14901(e)(2) Minimum penalty for each additional violation 5,000 5,500 49 U.S.C. 14903(a) Maximum penalty for undercharge or overcharge of tariff rate, for each violation 100,000 110,000 49 U.S.C. 14904(a) For first violation, rebates at less than the rate in effect 200 220 49 U.S.C. 14904(a) For all subsequent violations 250 275 49 U.S.C. 14904(b)(1) Maximum penalty for first violation for undercharges by freight forwarders 500 550 49 U.S.C. 14904(b)(1) Maximum penalty for subsequent violations 2,000 2,200 49 U.S.C. 14904(b)(2) Maximum penalty for other first violations under section 13702 500 550 49 U.S.C. 14904(b)(2) Maximum penalty for subsequent violations 2,000 2,200 49 U.S.C. 14905(a) Maximum penalty for each knowing violation of section 14103(a), and any violation of section 14103(b) 10,000 11,000 49 U.S.C. 14906 For first attempt to evade regulation 200 220 49 U.S.C. 14906 Minimum amount for each subsequent attempt to evade regulation 250 275 49 U.S.C. 14907 Maximum penalty for recordkeeping/reporting violations 5,000 5,500 49 U.S.C. 14908(a)(2) Maximum penalty for violation of section 14908(a)(1) 2,000 2,200 49 U.S.C. 14910 When another civil penalty is not specified under this part, for each day 500 550 49 U.S.C. 14915(a) Minimum penalty for holding a household goods shipment hostage, for each day 10,000 11,000 Pipeline Carrier Civil Penalties 49 U.S.C. 16101(a) Maximum penalty for violation of this part, for each day 5,000 5,500 49 U.S.C. 16101(b)(1) For each recordkeeping violation under section 15722, each day 500 550 49 U.S.C. 16101(b)(2) For each inspection violation liable under section 15722, each day 100 110 49 U.S.C. 16101(b)(3) For each reporting violation under section 15723, each day 100 110 49 U.S.C. 16103(a) Maximum penalty for improper disclosure of information 1,000 1,100