[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Rules and Regulations]
[Pages 42548-42552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15566]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
46 CFR Parts 221, 307, 340, and 356
RIN 2133-AB89
Civil Penalties
AGENCY: Maritime Administration (MARAD), Department of Transportation
(DOT).
ACTION: Interim final rule.
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SUMMARY: This interim final rule updates the maximum civil penalty
amounts for violations of statutes and regulations administered by
MARAD pursuant to the Federal Civil Penalties Inflation Adjustment Act
Improvement Act of 2015. This interim final rule amends our regulations
to reflect the new, adjusted civil penalty amounts MARAD may assess
pursuant for violations of procedures related to the American Fisheries
Act, certain regulated transactions involving documented vessels, the
Automated Mutual Assistance Vessel Rescue
[[Page 42549]]
program (AMVER), and the Defense Production Act.
DATES: This rule is effective August 1, 2016.
ADDRESSES: Office of Chief Counsel, MAR 225, Maritime Administration,
1200 New Jersey Avenue SE., West Building, Second Floor, Washington, DC
20590.
FOR FURTHER INFORMATION CONTACT: T. Mitchell Hudson, Jr., Office of
Chief Counsel, MARAD, telephone (202) 366-9373, email to:
[email protected], 1200 New Jersey Ave. SE., Washington, DC
20590.
SUPPLEMENTARY INFORMATION:
I. Background
On November 2, 2015, the Federal Civil Penalties Inflation
Adjustment Act Improvement Act (the 2015 Act), Public Law 114-74,
Section 701, was signed into law. The purpose of the 2015 Act is to
improve the effectiveness of civil monetary penalties and to maintain
their deterrent effect. The 2015 Act requires agencies to make an
initial catch up adjustment to the civil monetary penalties they
administer through an interim final rule and then to make subsequent
annual adjustments for inflation. The amount of increase of any
adjustment to a civil penalty pursuant to the 2015 Act is limited to
150 percent of the current penalty. Agencies are required to issue the
interim final rule with the initial catch up adjustment by July 1,
2016.
The method of calculating inflationary adjustments in the 2015 Act
differs substantially from the methods used in past inflationary
adjustment rulemakings conducted pursuant to the Federal Civil
Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment
Act), Public Law 101-410. Previously, adjustments to civil penalties
were conducted under rules that required significant rounding of
figures. For example, a penalty increase that was greater than $1,000,
but less than or equal to $10,000, would be rounded to the nearest
multiple of $1,000. While this allowed penalties to be kept at round
numbers, it meant that penalties would often not be increased at all if
the inflation factor was not large enough. Furthermore, increases to
penalties were capped at 10 percent. Over time, this formula caused
penalties to lose value relative to total inflation.
The 2015 Act has removed these rounding rules; now, penalties are
simply rounded to the nearest $1. While this creates penalty values
that are no longer round numbers, it does ensure that penalties will be
increased each year to a figure commensurate with the actual calculated
inflation. Furthermore, the 2015 Act ``resets'' the inflation
calculations by excluding prior inflationary adjustments under the
Inflation Adjustment Act, which contributed to a decline in the real
value of penalty levels. To do this, the 2015 Act requires agencies to
identify, for each penalty, the year and corresponding amount(s) for
which the maximum penalty level or range of minimum and maximum
penalties was established (i.e., originally enacted by Congress) or
last adjusted by statute or regulation other than pursuant to the
Inflation Adjustment Act.
The Director of the Office of Management and Budget (OMB) provided
guidance to agencies in a February 24, 2016 memorandum on how to
calculate the initial adjustment required by the 2015 Act.\1\ The
initial catch up adjustment is based on the change between the Consumer
Price Index for all Urban Consumers (CPI-U) for the month of October in
the year the penalty amount was established or last adjusted by
Congress and the October 2015 CPI-U. The February 24, 2016 memorandum
contains a table with a multiplier for the change in CPI-U from the
year the penalty was established or last adjusted to 2015. To arrive at
the adjusted penalty, the agency must multiply the penalty amount when
it was established or last adjusted by Congress, excluding adjustments
under the Inflation Adjustment Act, by the multiplier for the increase
in CPI-U from the year the penalty was established or adjusted provided
in the February 24, 2016 memorandum. The 2015 Act limits the initial
inflationary adjustment to 150 percent of the current penalty. To
determine whether the increase in the adjusted penalty is less than 150
percent, the agency must multiply the current penalty by 250 percent.
The adjusted penalty is the lesser of either the adjusted penalty based
on the multiplier for CPI-U in Table A of the February 24, 2016
memorandum or an amount equal to 250 percent of the current penalty.
This interim final rule adjusts the civil penalties for violations of
statutes and regulations that MARAD administers consistent with the
February 24, 2016 memorandum.
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\1\ Memorandum from the Director of OMB to Heads of Executive
Departments and Agencies, Implementation of the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (Feb.
24, 2016), available at www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
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II. Inflationary Adjustments to Penalty Amounts in 46 CFR Part 221
Changes to Civil Penalties for Regulated Transactions Involving Vessel
Ownership Transfers and Other Maritime Interests (46 CFR 221.61)
The maximum civil penalties arising under 46 CFR 221.61 have not
been updated since they were established, except for inflationary
adjustments pursuant to the Inflation Adjustment Act of 1990. The
maximum civil penalty for a single violation of any provision under 46
U.S.C. Chapter 313 and all of Subtitle III related MARAD regulations,
except section 31329, specified in 31309 of Title 46 of the United
States Code was set at $10,000 when the penalty was established by
Public Law 100-710, 102 Stat. 4747, enacted in 1988. Likewise, the
maximum civil penalty for a single violation of 31329 of Title 46 of
the United States Code as it relates to the court sales of documented
vessels, specified in 31330 of Title 46 of the United States Code was
set at $25,000 when the penalty was established by the same statute,
Public Law 100-710, 102 Stat. 4747, enacted in 1988. Lastly, for
penalties arising under 46 CFR 221.61, the maximum civil penalty for a
single violation of 56101 of Title 46 of the United States Code as it
relates to approvals required to transfer a vessel to a noncitizen,
specified in 56101(e) of Title 46 United States Code was set at not
more than $10,000 when the penalty was established by Public Law 101-
225, 103 Stat. 1908, enacted in 1989. Applying the multiplier for the
increase in CPI-U for 1988 in Table A of the February 24, 2016
memorandum (1.97869) results in an adjusted civil penalty of $19,787
pursuant to 46 U.S.C. 31309; $49,467 pursuant to 46 U.S.C. 31330.
Applying the multiplier for the increase in CPI-U for 1989 (1.89361)
results in an adjusted civil penalty of $18,936 pursuant to section
56101(e).
Inflationary Adjustments to Penalty Amounts in 46 CFR Part 307
Changes to Civil Penalties for Failure To File an AMVER Report (46 CFR
307.19)
The maximum civil penalty for a single violation of 50113 of Title
46 of the United States Code related to use and performance reports by
operators of vessels as specified in 50113(b) of Title 46 of the United
States Code was set at $50.00 per day when the penalty was established
by Public Law 84-612, 70 Stat. 332, enacted in 1956. This civil penalty
has not been updated since it was established. Applying the multiplier
for the increase in CPI-U for 1956 in Table A of the February 24,
[[Page 42550]]
2016 memorandum (8.64865) would result in an adjusted civil penalty of
$432.433, which is more than the limitation on inflationary adjustments
of 150 percent, accordingly the adjusted civil penalty is $125.00,
which is 150 percent of the previously penalty amount not counting
updates made under the Inflation Adjustment Act.
Inflationary Adjustments to Penalty Amounts in 46 CFR Part 340
Changes to Civil Penalties for Violating Procedures for the Use and
Allocation of Shipping Services, Port Facilities and Services for
National Security and National Defense Operations (46 CFR 340.9)
The maximum civil penalty for a single violation of 4501 of Title
50 of the United States Code, specified in 4513 of Title 50 of the
United States Code, at 46 CFR 340.9, was set at not more than $10,000
when the penalty was established by the Defense Production Act, 64
Stat. 799, enacted in 1950. This civil penalty has not been updated
since it was established. Applying the multiplier for the increase in
CPI-U for 1950 in Table A of the February 24, 2016 memorandum (9.66821)
would result in an adjusted civil penalty of $96682.1, which is above
the 150 percent limit for inflationary adjustments, so the adjusted
civil penalty is $25,000, which is 150 percent of the previous penalty
amount not counting updates under the Inflation Adjustment Act.
Inflationary Adjustments to Penalty Amounts in 46 CFR Part 356
Changes to Civil Penalties for Violations in Applying For or Renewing a
Vessel's Fishery Endorsement (46 CFR 356.49)
The maximum civil penalty for a single violation of 12151 of Title
46 of the United States Code for engaging in fishing operations as
defined in section 3 of the Magnuson-Stevens Fishery Conservation and
Management Act, within the Exclusive Economic Zone, specified in
12151(c) of Title 46 of the United States Code, and at 46 CFR 356.49,
was set at $100,000.00 for each day such vessel engaged in fishing when
the penalty was established by Public Law 105-277, 112 Stat. 2681-620,
enacted in 1998. This civil penalty has not been updated since it was
established. Applying the multiplier for the increase in CPI-U for 1998
in Table A of the February 24, 2016 memorandum (1.45023) results in an
adjusted civil penalty of $145,023.
III. Dispensing With Notice and Public Comment
MARAD is promulgating this interim final rule to ensure that the
amount of civil penalties contained in 46 CFR 221.61, 307.19, 340.9 and
356.49--reflect the statutorily mandated ranges as adjusted for
inflation. Pursuant to the 2015 Act, MARAD is required to promulgate a
``catch-up adjustment'' through an interim final rule. Pursuant to the
2015 Act and 5 U.S.C. 553(b)(3)(B), MARAD finds that good cause exists
for immediate implementation of this interim final rule without prior
notice and comment because it would be impracticable to delay
publication of this rule for notice and comment and because public
comment is unnecessary. By operation of the Act, MARAD must publish the
catch-up adjustment by interim final rule by July 1, 2016.
Additionally, the 2015 Act provides a clear formula for adjustment of
the civil penalties, leaving the agency little room for discretion.
Furthermore, the increases in MARAD's civil penalty authority
authorized by 46 U.S.C. 12151(c), 31309, 31330, 50113(b), 56101(e) and
50 U.S.C. 4513 are already in effect and the amendments merely update
the relevant regulations to reflect the new statutory civil penalty.
For these reasons, MARAD finds that notice and comment would be
impracticable and is unnecessary in this situation.
IV. Rulemaking Analyses and Notices
Executive Order 12866, Executive Order 13563, and DOT Regulatory
Policies and Procedures
MARAD has considered the impact of this rulemaking action under
Executive Order 12866, Executive Order 13563, and the Department of
Transportation's regulatory policies and procedures. This rulemaking
document was not reviewed under Executive Order 12866 or Executive
Order 13563. This action is limited to the adoption of adjustments of
civil penalties under statutes that the agency enforces, and has been
determined to be not ``significant'' under the Department of
Transportation's regulatory policies and procedures and the policies of
the Office of Management and Budget. Because this rulemaking does not
change the number of entities that are subject to civil penalties, the
impacts are limited. Furthermore, excluding the penalties in 46 CFR
221.61, 307.19, 340.9 and 356.49 for violating certain long standing
procedures, this final rule does not establish civil penalty amounts
that MARAD is required to seek.
We also do not expect the increase in the civil penalty amount in
any of these regulations to be economically significant. Over the last
five years, MARAD has not collected any civil penalties under these
regulations. Increasing the current civil penalty amount by 150 percent
would not result in an annual effect on the economy of $100 million or
more.
Regulatory Flexibility Act
We have also considered the impacts of this notice under the
Regulatory Flexibility Act. I certify that this rule will not have a
significant economic impact on a substantial number of small entities.
Since this regulation does not establish a penalty amount that MARAD is
required to seek, except for the long standing civil penalties set
forth in 46 CFR 221.61, 307.19, 340.9 and 356.49, this rule will not
have a significant economic impact on small businesses. Additionally,
over the last five years, MARAD has not collected any civil penalties
under these regulations. Accordingly, increasingly the civil penalty
amount is unlikely to have any economic impact on any small businesses.
In addition, MARAD has determined the RFA does not apply to this
rulemaking. The 2015 Inflation Act requires MARAD to publish an interim
final rule and does not require MARAD to complete notice and comment
procedures under the APA. The Small Business Administration's A Guide
for Government Agencies: How to Comply with the Regulatory Flexibility
Act (2012), provides that:
If, under the APA or any rule of general applicability governing
federal grants to state and local governments, the agency is
required to publish a general notice of proposed rulemaking (NPRM),
the RFA must be considered [citing 5 U.S.C. 604(a)]. . . . If an
NPRM is not required, the RFA does not apply.
Therefore, because the 2015 Inflation Act does not require an NPRM
for this rulemaking, the RFA does not apply.
Executive Order 13132 (Federalism)
Executive Order 13132 requires MARAD to develop an accountable
process to ensure ``meaningful and timely input by State and local
officials in the development of regulatory policies that have
federalism implications.'' ``Policies that have federalism
implications'' is defined in the Executive Order to include regulations
that 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.'' Under Executive Order 13132, the agency may
[[Page 42551]]
not issue a regulation with Federalism implications, that imposes
substantial direct compliance costs, and that is not required by
statute, unless the Federal government provides the funds necessary to
pay the direct compliance costs incurred by State and local
governments, the agency consults with State and local governments, or
the agency consults with State and local officials early in the process
of developing the proposed regulation.
This rule 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, as specified in Executive Order 13132. This rule
only updates existing penalties, pursuant to statute. MARAD has not
collected any civil penalties under these regulations within the last
five years and if it were to assess penalties, due to the amounts
involved, it would not have a substantial direct effect on a State.
Thus, the requirements of Section 6 of the Executive Order do not
apply.
Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995, Public Law 104-4,
requires agencies to prepare a written assessment of the cost, benefits
and other effects of proposed or final rules that include a Federal
mandate likely to result in the expenditure by State, local, or tribal
governments, in the aggregate, or by the private sector, of more than
$100 million annually. Because this rule will not have a $100 million
effect, no Unfunded Mandates assessment will be prepared.
Executive Order 12778 (Civil Justice Reform)
This rule does not have a retroactive or preemptive effect.
Judicial review of a rule based on this proposal may be obtained
pursuant to 5 U.S.C. 702. That section does not require that a petition
for reconsideration be filed prior to seeking judicial review.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980, we state
that there are no requirements for information collection associated
with this rulemaking action.
Privacy Act
Please note that anyone is able to search the electronic form of
all comments received into any of our dockets by the name of the
individual submitting the comment (or signing the comment, if submitted
on behalf of an association, business, labor union, etc.). You may
review DOT's complete Privacy Act Statement in the Federal Register
published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78), or
you may visit http://dms.dot.gov.
List of Subjects
46 CFR Part 221
Regulated Transactions Involving Documented Vessels and Other
Maritime Interests.
46 CFR Part 307
Establishment of Mandatory Position Reporting System for Vessels.
46 CFR Part 340
Priority Use and Allocation of Shipping Services, Containers and
Chassis, and Port Facilities and Services for National Security and
National Defense Related Operations.
46 CFR Part 356
Requirements for Vessels of 100 Feet or Greater in Registered
Length to Obtain a Fishery Endorsement to the Vessel's Documentation.
In consideration of the foregoing, 46 CFR parts 221, 307, 340, and
356 are amended as set forth below.
PART 221--REGULATED TRANSACTIONS INVOLVING DOCUMENTED VESSELS AND
OTHER MARITIME INTERESTS
0
1. The authority citation for 46 CFR part 221 is revised to read as
follows:
Authority: 46 U.S.C. chs. 301, 313, and 561; Pub. L. 114-74; 49
CFR 1.93.
0
2. Section 221.61 is revised to read as follows:
Sec. 221.61 Compliance.
(a) This subpart describes procedures for the administration of
civil penalties that the Maritime Administration may assess under 46
U.S.C. 31309, 31330 and 56101, pursuant to 49 U.S.C. 336.
(b) Pursuant to 46 U.S.C. 31309, a general penalty of not more than
$19,787 may be assessed for each violation of chapter 313 or 46 U.S.C.
subtitle III administered by the Maritime Administration, and the
regulations in this part that are promulgated thereunder, except that a
person violating 46 U.S.C. 31329 and the regulations promulgated
thereunder is liable for a civil penalty of not more than $49,467 for
each violation. A person that charters, sells, transfers or mortgages a
vessel, or an interest therein, in violation of 46 U.S.C. 56101(e) is
liable for a civil penalty of not more than $18,936 for each violation.
PART 307--ESTABLISHMENT OF MANDATORY POSITION REPORTING SYSTEM FOR
VESSELS
0
3. The authority citation for 46 CFR part 307 is revised to read as
follows:
Authority: Pub. L. 109-304; 46 U.S.C. 50113; Pub. L. 114-74; 49
CFR 1.93.
0
4. Section 307.19 is revised to read as follows:
Sec. 307.19 Penalties.
The owner or operator of a vessel in the waterborne foreign
commerce of the United States is subject to a penalty of $125.00 for
each day of failure to file an AMVER report required by this part. Such
penalty shall constitute a lien upon the vessel, and such vessel may be
libeled in the district court of the United States in which the vessel
may be found.
PART 340--PRIORITY USE AND ALLOCATION OF SHIPPING SERVICES,
CONTAINERS AND CHASSIS, AND PORT FACILITIES AND SERVICES FOR
NATIONAL SECURITY AND NATIONAL DEFENSE RELATED OPERATIONS
0
5. The authority citation for 46 CFR part 340 is revised to read as
follows:
Authority: 50 U.S.C. 4501 et seq. (``The Defense Production
Act''); Executive Order 13603 (77 FR 16651); Executive Order 12656
(53 FR 47491); Pub. L. 114-74; 49 CFR 1.45; 49 CFR 1.93(l).
0
6. Section 340.9 is revised to read as follows:
Sec. 340.9 Compliance.
Pursuant 50 U.S.C. 4513 any person who willfully performs any act
prohibited, or willfully fails to perform any act required, by the
provisions of this regulation shall, upon conviction, be fined not more
than $25,000 or imprisoned for not more than one year, or both.
PART 356--REQUIREMENTS FOR VESSELS OF 100 FEET OR GREATER IN
REGISTERED LENGTH TO OBTAIN A FISHERY ENDORSEMENT TO THE VESSEL'S
DOCUMENTATION
0
6. The authority citation for 46 CFR part 356 is revised to read as
follows:
Authority: 46 U.S.C. 12102; 46 U.S.C. 12151; 46 U.S.C. 31322;
Pub. L. 105-277, division C, title II, subtitle I, section 203 (46
U.S.C. 12102 note), section 210(e), and section 213(g), 112 Stat.
2681; Pub. L. 107-20, section 2202, 115 Stat. 168-170; Pub. L. 114-
74; 49 CFR 1.93.
0
7. In Sec. 356.49, revise paragraph (b) to read as follows:
[[Page 42552]]
Sec. Penalties.
* * * * *
(b) A fine of up to $145,023 may be assessed against the vessel
owner for each day in which such vessel has engaged in fishing (as such
term is defined in section 3 of the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1802) within the exclusive
economic zone of the United States; and
* * * * *
Dated: June 27, 2016.
By Order of the Maritime Administrator.
Gabriel Chavez,
Secretary, Maritime Administration.
[FR Doc. 2016-15566 Filed 6-29-16; 8:45 am]
BILLING CODE 4910-81-P