[Federal Register Volume 78, Number 142 (Wednesday, July 24, 2013)]
[Rules and Regulations]
[Pages 44419-44422]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-17703]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 78, No. 142 / Wednesday, July 24, 2013 / 
Rules and Regulations

[[Page 44419]]



FEDERAL ELECTION COMMISSION

11 CFR Part 111

[Notice 2013-10]


Civil Monetary Penalties Inflation Adjustments

AGENCY: Federal Election Commission.

ACTION: Final rules.

-----------------------------------------------------------------------

SUMMARY: In accordance with the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended, the Federal Election Commission is 
adopting final rules to apply inflation adjustments to certain civil 
monetary penalties under the Federal Election Campaign Act of 1971, as 
amended, the Presidential Election Campaign Fund Act, and the 
Presidential Primary Matching Payment Account Act. The civil penalties 
being adjusted are for a knowing and willful violation of the 
prohibition against making a contribution in the name of another; and 
certain late filed or non-filed reports under the Commission's 
administrative fines program. The adjusted civil monetary penalties are 
calculated according to a statutory formula and will be effective for 
violations occurring after the effective date of these rules. Further 
information is provided in the supplementary information that follows.

DATES: These penalty adjustments are effective on July 24, 2013.

FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General 
Counsel, or Ms. Cheryl A.F. Hemsley, or Ms. Jessica Selinkoff, 
Attorneys, 999 E Street NW., Washington, DC 20463, (202) 694-1650 or 
(800) 424-9530.

SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended (``Inflation Adjustment Act''),\1\ 
requires Federal agencies to adjust for inflation the civil monetary 
penalties within their jurisdiction at least once every four years 
according to detailed formulas. The Inflation Adjustment Act defines a 
civil monetary penalty as any penalty, fine, or other sanction that is 
for a specific amount, or has a maximum amount, as provided by Federal 
law, and that a Federal agency assesses or enforces in an 
administrative proceeding or in a civil action in Federal court.\2\ 
Under the Federal Election Campaign Act of 1971, as amended, 2 U.S.C. 
431 et seq. (``FECA''), the Federal Election Commission has 
jurisdiction over several civil penalties for violations of FECA, the 
Presidential Election Campaign Fund Act, 26 U.S.C. 9001 et seq., and 
the Presidential Primary Matching Payment Account Act, 26 U.S.C. 9031 
et seq. These rules fulfill the Commission's non-discretionary 
obligation under the Inflation Adjustment Act to adjust for inflation, 
according to the prescribed formulas, the civil penalties within its 
jurisdiction.
---------------------------------------------------------------------------

    \1\ Pub. L. 101-410, 104 Stat. 890 (codified at 28 U.S.C. 2461 
note), as amended by Debt Collection Improvement Act of 1996, Pub. 
L. 104-134, sec. 31001(s)(1), 110 Stat. 1321, 1373; Federal Reports 
Elimination Act of 1998, Pub. L. 105-362, sec. 1301, 112 Stat. 3280.
    \2\ Inflation Adjustment Act sec. 3(2).
---------------------------------------------------------------------------

Immediate Effectiveness of Final Rules

    The Inflation Adjustment Act requires the Commission to adjust the 
civil penalties under its jurisdiction by using a cost-of-living 
adjustment (``COLA'') formula. The application of this COLA does not 
involve any Commission discretion or policy judgments. Thus, the 
Commission finds that the ``good cause'' exception to the notice and 
comment requirement of the Administrative Procedure Act applies to 
these rules because notice and comment are unnecessary. 5 U.S.C. 
553(b)(B), (d)(3).
    For the same reasons, these rules do not need to be submitted to 
the Speaker of the House of Representatives or the President of the 
Senate under the Congressional Review Act, 5 U.S.C. 801 et seq., and 
these rules are effective upon publication. 5 U.S.C. 808(2). 
Accordingly, these amendments are effective on July 24, 2013. The new 
civil penalties are applicable only to violations that occur after this 
effective date.\3\
---------------------------------------------------------------------------

    \3\ Id. sec. 6.
---------------------------------------------------------------------------

Explanation and Justification

    Under the Inflation Adjustment Act, the Commission must adjust 
civil penalties by a COLA defined as the percentage by which the U.S. 
Department of Labor's Consumer Price Index for all urban consumers 
(``CPI'') for June of the year preceding the adjustment exceeds the CPI 
for June of the year in which each civil penalty was last set or 
adjusted.\4\ The amount of the resulting increase is then subject to 
rounding rules based on the size of the civil penalty.\5\ The Inflation 
Adjustment Act imposes a 10% cap on the first adjustment under its 
rules, but no cap on subsequent adjustments.\6\ That is, the first 
adjustment of a civil penalty may not exceed 10% of the starting civil 
penalty.
---------------------------------------------------------------------------

    \4\ Id. sec. 5(b).
    \5\ Id. sec. 5(a). The rounding rules applicable to the 
Commission's civil penalties require that if the existing penalty is 
less than or equal to $100, the increase is rounded to the nearest 
$10; if the existing penalty is greater than $100 but less than or 
equal to $1,000, the increase is rounded to the nearest $100; if the 
existing penalty is greater than $1,000 but less than or equal to 
$10,000, the increase is rounded to the nearest $1,000; and if the 
existing penalty is greater than $10,000 but less than or equal to 
$100,000, the increase is rounded to the nearest $5,000.
    \6\ Pub. L. 104-134, sec. 31001(s)(2), 110 Stat. 1321, 1373.
---------------------------------------------------------------------------

    The Commission has previously applied the Inflation Adjustment Act 
formulas to its civil penalties in 1997, 2002, 2005, and 2009.\7\ As 
explained below, the Inflation Adjustment Act now requires the 
Commission to adjust one civil penalty in 11 CFR 111.24 and some civil 
penalties in 11 CFR 111.43. Because of the rounding rules, the other 
civil penalties within the Commission's jurisdiction will not change.
---------------------------------------------------------------------------

    \7\ See Explanation and Justification for Final Rules on Civil 
Monetary Penalties Inflation Adjustments, 74 FR 31345 (July 1, 
2009), amended by Explanation and Justification for Final Rules on 
Civil Monetary Penalties Inflation Adjustments; Correction, 74 FR 
37161 (July 28, 2009) (collectively, ``2009 Adjustment''), 
Explanation and Justification for Final Rules on Inflation 
Adjustments for Civil Monetary Penalties, 70 FR 34633 (June 15, 
2005) (``2005 Adjustment''), Explanation and Justification for Final 
Rules on Adjustments to Civil Monetary Penalty Amounts, 62 FR 11316 
(Mar. 12, 1997). In January 2002, the rounding rules resulted in no 
adjustments. Agenda Doc. 02-06 (Jan. 17, 2002).
---------------------------------------------------------------------------

1. 11 CFR 111.24--General Civil Penalties

    FECA establishes civil penalties for violations of FECA or the 
other statutes within the Commission's jurisdiction.

[[Page 44420]]

Those statutory civil penalties are found at 2 U.S.C. 437g(a)(5), (6), 
and (12). Commission regulations in 11 CFR 111.24 set forth each such 
civil penalty, as adjusted pursuant to the Inflation Adjustment Act.
    These final rules adjust only one statutory civil penalty: the 
$50,000 civil penalty established by 2 U.S.C. 437g(a)(5)(B), which is 
currently at the 2009 level of $60,000. 11 CFR 111.24(a)(2)(ii).\8\ To 
determine the 2013 COLA, the CPI for June 2012 (229.478) \9\ is divided 
by the CPI for June 2009 (215.693), the year the civil penalty was last 
adjusted, for an increase of 6.4%. Next, the raw inflation adjustment 
is determined by multiplying the present civil penalty ($60,000) by the 
COLA (0.064) for a raw increase of $3,840, which is rounded to $5,000. 
Finally, the rounded increase is added to the civil penalty, for a new 
section 111.24(a)(2)(ii) civil penalty of $65,000.
---------------------------------------------------------------------------

    \8\ See 2009 Adjustment, 74 FR at 31347.
    \9\ U.S. Dep't of Labor, Bureau of Labor Statistics, Consumer 
Price Index: All Urban Consumers (May 16, 2013), available at ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
---------------------------------------------------------------------------

    Using the same Inflation Adjustment Act formulas, the Commission 
has also reviewed the other civil penalties in 11 CFR 111.24. None of 
those other civil penalties will change this year because of the 
rounding rules.

----------------------------------------------------------------------------------------------------------------
                                      Previous
              Section                  civil         Last         COLA         Raw        Rounded     New civil
                                      penalty      adjusted                  increase     increase     penalty
----------------------------------------------------------------------------------------------------------------
11 CFR 111.24(a)(1)...............       $7,500         2009        0.064      $480.00           $0   unchanged.
11 CFR 111.24(a)(2)(i)............       16,000         2009        0.064     1,024.00            0   unchanged.
11 CFR 111.24(a)(2)(ii)...........       60,000         2009        0.064     3,840.00        5,000      65,000.
11 CFR 111.24(b)..................        3,200         2009        0.064       204.80            0   unchanged.
11 CFR 111.24(b)..................        7,500         2009        0.064       480.00            0   unchanged.
----------------------------------------------------------------------------------------------------------------

2. 11 CFR 111.43, 111.44--Administrative Fines

    FECA permits the Commission to assess civil penalties for 
violations of the reporting requirements of 2 U.S.C. 434(a) in 
accordance with schedules of penalties established and published by the 
Commission. 2 U.S.C. 437g(a)(4)(C)(i). The penalty schedule in 11 CFR 
111.43(a) applies to reports that are not election sensitive, and the 
schedule in 11 CFR 111.43(b) applies to reports that are election 
sensitive.\10\ Each schedule contains two columns of penalties, one for 
late-filed reports and one for non-filed reports, with penalties based 
on the level of financial activity in the report and its lateness 
(where applicable).\11\ In addition, 11 CFR 111.43(c) establishes a 
civil penalty for situations in which a committee fails to file a 
report and the Commission cannot calculate the relevant level of 
activity. Finally, 11 CFR 111.44 establishes a civil penalty for 
failure to file timely reports of contributions received less than 20 
days, but more than 48 hours, before an election. See 2 U.S.C. 
434(a)(6).
---------------------------------------------------------------------------

    \10\ Election sensitive reports are certain reports due shortly 
before an election. See 11 CFR 111.43(d)(1).
    \11\ A report is considered to be ``not filed'' if it is never 
filed or is filed more than a certain number of days after its due 
date. See 11 CFR 111.43(e).
---------------------------------------------------------------------------

    The schedules in 11 CFR 111.43 were set in 2003 when the Commission 
re-promulgated its Administrative Fines program, which implements 2 
U.S.C. 437g(a)(4)(C). See Explanation and Justification for Final Rules 
on Administrative Fines, 68 FR 12572 (Mar. 17, 2003). In 2005, the 
Commission applied the Inflation Adjustment Act formulas to the civil 
penalties in section 111.43 but did not adjust any of the penalties 
because of the rounding rules. See 2005 Adjustment, 70 FR at 34635. 
Under the same procedures, the Commission adjusted some, but not all, 
of these civil penalties in 2009. See 2009 Adjustment, 74 FR at 31348-
49 (renumbering schedules and adjusting some penalties for inflation).
    For purposes of the current adjustments, the Commission multiplies 
each civil penalty that was raised in 2009 by a COLA of 0.064. For 
those civil penalties set in 2003 and unchanged in 2009, the Commission 
multiplies each civil penalty by a COLA of 0.249.\12\ Next, the 
Commission applies the statutory rounding formula to each of these raw 
increases. The resulting rounded increase is then added to the current 
civil penalty to determine the new raw civil penalty. Finally, the 
statutory 10% penalty cap is applied as necessary, i.e., to penalties 
that the Commission is adjusting this year for the first time. The 
actual adjustment to each civil penalty is shown in the schedules in 
the rule text, below.
---------------------------------------------------------------------------

    \12\ The CPI for June 2012 (229.478) divided by the CPI for June 
2003 (183.7) equals an increase of 24.9%.
---------------------------------------------------------------------------

    The $6,050 civil penalty in 11 CFR 111.43(c) was adjusted in 
2009,\13\ so the Commission multiplies it by a COLA of 0.064. Because 
of the rounding rules, this civil penalty will not change this year.
---------------------------------------------------------------------------

    \13\ See 2009 Adjustment, 74 FR at 37161 (correcting amount to 
$6,050).
---------------------------------------------------------------------------

    The penalty in 11 CFR 111.44 was last adjusted in 2005,\14\ so the 
Commission multiplies it by a COLA of 0.18.\15\ Because of the rounding 
rules, this civil penalty will not change this year.
---------------------------------------------------------------------------

    \14\ See 2005 Adjustment, 70 FR at 34635; Explanation and 
Justification for Final Rules on Administrative Fines, 65 FR 31787, 
31793 (May 19, 2000); see also 2009 Adjustment, 74 FR at 31347 (not 
adjusting this penalty due to rounding rules).
    \15\ The CPI for June 2012 (229.478) divided by the CPI for June 
2005 (194.5) equals an increase of 18%.
---------------------------------------------------------------------------

Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory 
Flexibility Act)

    The provisions of the Regulatory Flexibility Act are not applicable 
to this final rule because the Commission was not required to publish a 
notice of proposed rulemaking or to seek public comment under 5 U.S.C. 
553 or any other laws. 5 U.S.C. 603(a), 604(a). Therefore, no 
regulatory flexibility analysis is required.

List of Subjects in 11 CFR Part 111

    Administrative practice and procedures, Elections, Law enforcement, 
Penalties.

    For the reasons set out in the preamble, the Federal Election 
Commission amends subchapter A of chapter I of title 11 of the Code of 
Federal Regulations as follows:

PART 111--COMPLIANCE PROCEDURE (2 U.S.C. 437g, 437d(a))

0
1. The authority citation for part 111 continues to read as follows:

    Authority: 2 U.S.C. 432(i), 437g, 437d(a), 438(a)(8); 28 U.S.C. 
2461 nt.


0
2. Section 111.24 is amended by revising paragraph (a)(2)(ii) to read 
as follows:


Sec.  111.24  Civil Penalties (2 U.S.C. 437g(a)(5), (6), (12), 28 
U.S.C. 2461 nt.).

    (a) * * *
    (2) * * *
    (ii) Notwithstanding paragraph (a)(2)(i) of this section, in the 
case of a

[[Page 44421]]

knowing and willful violation of 2 U.S.C. 441f, the civil penalty shall 
not be less than 300% of the amount of any contribution involved in the 
violation and shall not exceed the greater of $65,000 or 1,000% of the 
amount of any contribution involved in the violation.
* * * * *

0
3. Section 111.43 is amended by revising paragraphs (a) and (b) to read 
as follows:


Sec.  111.43  What are the schedules of penalties?

    (a) The civil money penalty for all reports that are filed late or 
not filed, except election sensitive reports and pre-election reports 
under 11 CFR 104.5, shall be calculated in accordance with the 
following schedule of penalties:

------------------------------------------------------------------------
                               And the report was
 If the level of activity in     filed late, the      Or the report was
       the report was:         civil money penalty  not filed, the civil
                                       is:            money penalty is:
------------------------------------------------------------------------
$1-4,999.99 \a\.............  [$27.50 + ($5 x       $275 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$5,000-9,999.99.............  [$55 + ($5 x Number   $330 x [1 + (.25 x
                               of days late)] x [1   Number of previous
                               + (.25 x Number of    violations)].
                               previous
                               violations)].
$10,000-24,999.99...........  [$110 + ($5 x Number  $550 x [1 + (.25 x
                               of days late)] x [1   Number of previous
                               + (.25 x Number of    violations)].
                               previous
                               violations)].
$25,000-49,999.99...........  [$200 + ($20 x        $1090 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$50,000-74,999.99...........  [$330 + ($92.50 x     $2970 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$75,000-99,999.99...........  [$440 + ($110 x       $3850 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$100,000-149,999.99.........  [$660 + ($125 x       $4950 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$150,000-199,999.99.........  [$980 + ($150 x       $6050 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$200,000-249,999.99.........  [$1100 + ($175 x      $7150 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$250,000-349,999.99.........  [$1500 + ($200 x      $9800 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$350,000-449,999.99.........  [$2000 + ($200 x      $10,900 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$450,000-549,999.99.........  [$2750 + ($200 x      $10,450 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$550,000-649,999.99.........  [$3300 + ($200 x      $11,000 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$650,000-749,999.99.........  [$3850 + ($200 x      $11,550 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$750,000-849,999.99.........  [$4400 + ($200 x      $12,100 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$850,000-949,999.99.........  [$4950 + ($200 x      $12,650 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$950,000 or over............  [$5500 + ($200 x      $13,200 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
------------------------------------------------------------------------
\a\ The civil money penalty for a respondent who does not have any
  previous violations will not exceed the level of activity in the
  report.

    (b) The civil money penalty for election sensitive reports that are 
filed late or not filed shall be calculated in accordance with the 
following schedule of penalties:

------------------------------------------------------------------------
                               And the report was
 If the level of activity in     filed late, the      Or the report was
       the report was:         civil money penalty  not filed, the civil
                                       is:            money penalty is:
------------------------------------------------------------------------
$1-$4,999.99 \a\............  [$55 + ($10 x Number  $550 x [1 + (.25 x
                               of days late)] x [1   Number of previous
                               + (.25 x Number of    violations)].
                               previous
                               violations)].
$5,000-$9,999.99............  [$110 + ($10 x        $660 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$10,000-24,999.99...........  [$150 + ($10 x        $1090 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$25,000-49,999.99...........  [$330 + ($27.50 x     $1,400 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$50,000-74,999.99...........  [$495 + ($92.50 x     $3300 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$75,000-99,999.99...........  [$660 + ($110 x       $4400 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$100,000-149,999.99.........  [$1090 + ($125 x      $5500 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$150,000-199,999.99.........  [$1200 + ($150 x      $6600 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].
$200,000-249,999.99.........  [$1500 + ($175 x      $9250 x [1 + (.25 x
                               Number of days        Number of previous
                               late)] x [1 + (.25    violations)].
                               x Number of
                               previous
                               violations)].

[[Page 44422]]

 
$250,000-349,999.99.........  [$2475 + ($200 x      $10,900 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$350,000-449,999.99.........  [$3300 + ($200 x      $11,000 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$450,000-549,999.99.........  [$4125 + ($200 x      $12,100 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$550,000-649,999.99.........  [$4950 + ($200 x      $13,200 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$650,000-749,999.99.........  [$5775 + ($200 x      $14,300 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$750,000-849,999.99.........  [$6600 + ($200 x      $15,400 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$850,000-949,999.99.........  [$7425 + ($200 x      $16,500 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
$950,000 or over............  [$9250 + ($200 x      $17,600 x [1 + (.25
                               Number of days        x Number of
                               late)] x [1 + (.25    previous
                               x Number of           violations)].
                               previous
                               violations)].
------------------------------------------------------------------------
\a\ The civil money penalty for a respondent who does not have any
  previous violations will not exceed the level of activity in the
  report.

* * * * *

    On behalf of the Commission.
    Dated: July 18, 2013.
Ellen L. Weintraub,
Chair, Federal Election Commission.
[FR Doc. 2013-17703 Filed 7-23-13; 8:45 am]
BILLING CODE 6715-01-P