Adjustment of Civil Monetary Penalties for Inflation

<RULE> DEPARTMENT OF EDUCATION <CFR>34 CFR Parts 36 and 668</CFR> <RIN>RIN 1801-AA25</RIN> <SUBJECT>Adjustment of Civil Monetary Penalties for Inflation</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Department of Education. <HD SOURCE="HED">ACTION:</HD> Final regulations. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department of Education (Department) issues these final regulations to adjust the Department's civil monetary penalties (CMPs) for inflation. This adjustment is required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act), which amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation Adjustment Act). These final regulations provide the 2024 annual inflation adjustments being made to the penalty amounts in the Department's final regulations published in the <E T="04">Federal Register</E> on January 30, 2023 (2023 final rule). </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> These regulations are effective January 25, 2024. The adjusted CMPs established by these regulations are applicable only to civil penalties assessed after January 25, 2024, whose associated violations occurred after November 2, 2015. </DATES> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Rhondalyn Primes, U.S. Department of Education, Office of the General Counsel, 400 Maryland Avenue SW, room 6C150, Washington, DC 20202-2241. Telephone: (202) 453-6444. Email: <E T="03">rhondalyn.primes@ed.gov.</E> If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> A CMP is defined in the Inflation Adjustment Act (28 U.S.C. 2461 note) as any penalty, fine, or other sanction that is (1) for a specific monetary amount as provided by Federal law, or has a maximum amount provided for by Federal law; (2) assessed or enforced by an agency pursuant to Federal law; and (3) assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts. The Inflation Adjustment Act provides for the regular evaluation of CMPs to ensure that they continue to maintain their deterrent value. The Inflation Adjustment Act required that each agency issue regulations to adjust its CMPs beginning in 1996 and at least every four years thereafter. The Department published its most recent cost adjustment to its CMPs in the <E T="04">Federal Register</E> on January 30, 2023 (88 FR 5784), and those adjustments became effective on the date of publication. The 2015 Act (section 701 of Pub. L. 114-74) amended the Inflation Adjustment Act to improve the effectiveness of CMPs and to maintain their deterrent effect. The 2015 Act requires agencies to: (1) adjust the level of CMPs with an initial “catch-up” adjustment through an interim final rule (IFR); and (2) make subsequent annual adjustments for inflation. Catch-up adjustments are based on the percentage change between the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October in the year the penalty was last adjusted by a statute other than the Inflation Adjustment Act, and the October 2015 CPI-U. Annual inflation adjustments are based on the percentage change between the October CPI-U preceding the date of each statutory adjustment, and the prior year's October CPI-U. <SU>1</SU> <FTREF/> The Department published an IFR with the initial “catch-up” penalty adjustment amounts on August 1, 2016 (81 FR 50321). <FTNT> <SU>1</SU>  If a statute that created a penalty is amended to change the penalty amount, the Department does not adjust the penalty in the year following the adjustment. </FTNT> In these final regulations, based on the CPI-U for the month of October 2023, not seasonally adjusted, we are annually adjusting each CMP amount by a multiplier for 2024 of 1.03241, as directed by the Office of Management and Budget (OMB) Memorandum No. M-24-07 issued on December 19, 2023. The Department's Civil Monetary Penalties The following analysis calculates new CMPs for penalty statutes in the order in which they appear in 34 CFR 36.2. The penalty amounts are being adjusted up based on the multiplier of 1.03241 provided in OMB Memorandum No. M-24-07. <E T="03">Statute:</E> 20 U.S.C. 1015(c)(5). <E T="03">Current Regulations:</E> The CMP for 20 U.S.C. 1015(c)(5) (section 131(c)(5) of the Higher Education Act of 1965, as amended (HEA)), as last set out in statute in 1998 (Pub. L. 105-244, title I, section 101(a), October 7, 1998, 112 Stat. 1602), is a fine of up to $25,000 for failure by an institution of higher education (IHE) to provide information on the cost of higher education to the Commissioner of Education Statistics. In the 2023 final rule, we increased this amount to $45,429. <E T="03">New Regulations:</E> The new penalty for this section is $46,901. <E T="03">Reason:</E> Using the multiplier of 1.03241 from OMB Memorandum No. M-24-07, the new penalty is calculated as follows: $45,429 × 1.03241 = $46,901.3552, which makes the adjusted penalty $46,901, when rounded to the nearest dollar. <E T="03">Statute:</E> 20 U.S.C. 1022d(a)(3). <E T="03">Current Regulations:</E> The CMP for 20 U.S.C. 1022d(a)(3) (section 205(a)(3) of the HEA), as last set out in statute in 2008 (Pub. L. 110-315, title II, section 201(2), August 14, 2008, 122 Stat. 3147), is a fine of up to $27,500 for failure by an IHE to provide information to the State and the public regarding its teacher-preparation programs. In the 2023 final rule, we increased this amount to $37,839. <E T="03">New Regulations:</E> The new penalty for this section is $39,065. <E T="03">Reason:</E> Using the multiplier of 1.03241 from OMB Memorandum No. M-24-07, the new penalty is calculated as follows: $37,839 × 1.03241 = $39,065.36, which makes the adjusted penalty $39,065, when rounded to the nearest dollar. <E T="03">Statute:</E> 20 U.S.C. 1082(g). <E T="03">Current Regulations:</E> The CMP for 20 U.S.C. 1082(g) (section 432(g) of the HEA), as last set out in statute in 1986 (Pub. L. 99-498, title IV, section 402(a), October 17, 1986, 100 Stat. 1401), is a fine of up to $25,000 for violations by lenders and guaranty agencies of Title IV of the HEA, which authorizes the Federal Family Education Loan Program. In the 2023 final rule, we increased this amount to $67,544. <E T="03">New Regulations:</E> The new penalty for this section is $69,733. <E T="03">Reason:</E> Using the multiplier of 1.03241 from OMB Memorandum No. M-24-07, the new penalty is calculated as follows: $67,544 × 1.03241 = $69,733.10, which makes the adjusted penalty $69,733, when rounded to the nearest dollar. <E T="03">Statute:</E> 20 U.S.C. 1094(c)(3)(B). <E T="03">Current Regulations:</E> The CMP for 20 U.S.C. 1094(c)(3)(B) (section 487(c)(3)(B) of the HEA), as set out in statute in 1986 (Pub. L. 99-498, title IV, section 407(a), October 17, 1986, 100 Stat. 1488), is a fine of up to $25,000 for an IHE's violation of title IV of the HEA or its implementing regulations. Title IV authorizes various programs of student financial assistance. In the 2023 final rule, we increased this amount to $67,544. <E T="03">New Regulations:</E> The new penalty for this section is $69,733. <E T="03">Reason:</E> Using the multiplier of 1.03241 from OMB Memorandum No. M-24-07, the new penalty is calculated as follows: $67,544 × 1.03241 = $69,733.10, which makes the adjusted penalty $69,733, when rounded to the nearest dollar. <E T="03">Statute:</E> 20 U.S.C. 1228c(c)(2)(E). <E T="03">Current Regulations:</E> The CMP for 20 U.S.C. 1228c(c)(2)(E) (section 429 of the General Education Provisions Act), as set out in statute in 1994 (Pub. L. 103-382, title II, section 238, October 20, 1994, 108 Stat. 3918), is a fine of up to $1,000 for an educational organization's failure to disclose certain information to minor students and their parents. In the 2023 final rule, we increased this amount to $1,993. <E T="03">New Regulations:</E> The new penalty for this section is $2,058. <E T="03">Reason:</E> Using the multiplier of 1.03241 from OMB Memorandum No. M-24-07, the new penalty is calculated as follows: $1,993 × 1.03241 = $2,057.59, which makes the adjusted penalty $2,058, when rounded to the nearest dollar. <E T="03">Statute:</E> 31 U.S.C. 1352(c)(1) and (c)(2)(A). <E T="03">Current Regulations:</E> The CMPs for 31 U.S.C. 1352(c)(1) and (c)(2)(A), as set out in statute in 1989 (Pub. L. 101-121, title III, section 319(a)(1), October 23, 1989, 103 Stat. 750), are a fine of $10,000 to $100,000 for recipients of Government grants, contracts, etc. that improperly lobby Congress or the executive branch with respect to the award of Government grants and contracts. In the 2022 final rule, we increased these amounts to $23,727 to $237,268. <E T="03">New Regulations:</E> The new penalties for these sections are $24,496 to $244,958. <E T="03">Reason:</E> Using the multiplier of 1.03241 from OMB Memorandum No. M-24-07, the new minimum penalty is calculated as follows: $23,727 × 1.03241 = $24,495.99, which makes the adjusted penalty $24,496, when rounded to the nearest dollar. The new maximum penalty is calculated as follows: $237,268 × 1.03241 = $244,957.85, which makes the adjusted penalty $244,958, when rounded to the nearest dollar. <E T="03">Statute:</E> 31 U.S.C. 3802(a)(1) and (a)(2). <E T="03">Current Regulations:</E> The CMPs for 31 U.S.C. 3802(a)(1) and (a)(2), as set out in statute in 1986 (Pub. L. 99-509, title VI, section 6103(a), Oct. 21, 1986, 100 Stat. 1937), are a fine of up to $5,000 for false claims and statements made to the Government. In the 2023 final rule, we increased this amount to $13, ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 22k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━